HomeMy WebLinkAboutMINUTES - 03231999 - D1 bOARD OF SUPERVISORS/REDEVELOI r AGENCY/PUBLIC FINANCING AUTHORITY
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FROM: Phil Batchelor
Executive Director
DATE: March 23, 1999
SUBJECT: Redevelopment Agency Tax Allocation Bonds
SPECIFIC REQUEST(S) OR RECOMMENDATIONS(S) & BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS
1)As the Board of Supervisors, HOLD Public Hearing as required by Section 6586.5(a)(2) of the California
Government Code with respect to the public benefit of financing improvements using proposed revenue bond
proceeds,
2) As the Board of Supervisors, ADOPT a resolution making findings of public benefit with respect to, and
approving the issuance of bonds by the Contra Costa County Public Financing Authority, and approving the
borrowing of bond proceeds by the Contra Costa County Redevelopment Agency;
3)As the Governing Board of the Contra Costa Public Financing Authority, ADOPT a resolution authorizing
the issuance of revenue bonds to make loans to the Contra Costa County Redevelopment Agency for
Pleasant Hill PART, North Richmond, Bay Point, Oakley, and Rodeo Redevelopment Project Area's; and
4) As the Governing Board of the Contra Costa Redevelopment Agency, ADOPT a resolution authorizing
the borrowing of funds from the Contra Costa County Public Financing Authority related to the Pleasant Hill
BART, North Richmond, Bay Point, Rodeo, and Oakley Redevelopment Projects and approving actions
related thereto;
5)As the Board of Supervisors(including the Governing Board of the Water Conservation and Flood Control
District, the Library District, and the Water Agency) and as the Governing Board of the Redevelopment
Agency, APPROVE and AUTHORIZE the County Administrator and the Deputy Director-Redevelopment
respectively to execute a Fiscal Agreement between the County (including the General Fund, the Water
Conservation and Flood Control District,the Water Agency, and the Library District) and the Redevelopment
Agency pertaining to the Oakley Redevelopment Project.
FISCAL IMPACT
None. All bonds are secured by a pledge by Redevelopment Agency Tax Increments.
BACKGROUND/REASONS FOR RECOMMENDATIONS
In 1992, the Contra Costa County Public Financing Authority issued revenue bonds to make loans to the
Redevelopment Agency, the repayment of which was secured by a pledge of Redevelopment Agency Tax
increment revenues. The proceeds of these bonds were loanld to the Rede, o ent Agency to undertake
its redevelopment activities.
CONTINUED ON ATTACHMENT: X YES SIGNATURE.
2. I
RECOMMENDATION OF EXECUTIVE DIRECTOR RECOMMENDATION OF AGENCY COMM EE
7T
APPROVE OTHER
SIGNATURE(S): ACTION OF
AGENCY ON = APPROVED AS RECOMMENDED OTHER
.10
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A
UNANIMOUS (ABSENT TRUE AND CORRECT COPY OF AN
AYES: NOES: ACTION TAKEN AND ENTERED ON THE
ABSENT: ABSTAIN: MINUTES OF THE BOARD OF
SUPERVISORS ON THE DATE SHOWN.
Contact: Jim Kennedy
ATTESTED
335-1255-
Orig: Redevelopment Agency
cc: Community Development PHIL BATCHELOR, AGENCY SECRETARY
County Admiristrator
County Counsel BY i DEPUTY
via Redevelopment
Quint&Thimmig
Goldfwb&Lipman
Jones Hail
Stone&Youngberg
The purpose of the Public Financing Authority,which is a joint powers authority between the County of Contra Costa and the
Redevelopment Agency, is to allow for the issuance of bonds secured by multiple sources of revenue. This pooling of project
area resources permits the Redevelopment Agency to realize efficiencies in the issuance process. All bonds are secured
solely by a pledge: of Redevelopment Agency Tax Increments.
The Public Financing Authority also issued Bonds in 3995. To date, bonded indebtedness has been incurred for the Pleasant
Hill BART Station Project Area, the North Richmond Project Area, the Bay Point Project Area, and the Oakley Project Area.
The proposed and recommended financing will refinance existing Bonds and generate additional bond proceeds for each
of thefore mentioned project areas plus the Rodeo Redevelopment Project. This financing has been recommended by all
existing Redevelopment Project Area committees or MAC'S.
Based on current estimates of Tax Increments, current tax exempt bond rates, and current assumptions regarding project
needs, the amount of the financing would be approximately$37 million as shown in the table below,
Estimate of Contra Costa Counly Public Fingricing Authority 1999 Tax Allocation Revenue Bonds
Project Area Amount of Rgfu ding New bond Proceeds otaI
Bonds ($000,000) ($0001000) ($000,000)
Pleasant Hill BART $8.2 $8.9 $37.3
North Richmond $3.3 $2.3 $3.4
Bay Point $2.6 $3.8 $6.4
Oakley $3.3 $4.4 $7.7
Rodeo $0 $2.2 $2.2
$35.4 $23.4 $36.8
(Subject to Change)
The resolutions of the County Board of Supervisors, the Governing Board of the Redevelopment Agency, and the
Governing Board of the Contra Costa County Public Financing Authority link together. The resolution of the Board of
Supervisors approves the issuance of bonds by the Pubic Financing Authority. The resolution of the Public Financing
Authority authorizes the issuance of the bonds and the making of loans to the Contra Costa County Redevelopment Agency,
and the resolution of the Redevelopment Agency authorizes the borrowing of funds from the Public Financing Authority. The
expected issuance of these bonds, is to occur in late early April, dependant on market conditions.
PROPOSED 6MPRQVEMENT-
The following is a general description of various improvements that are being considered for financing with a portion
of the proceeds of the above-mentioned bonds. The improvements are not listed in any particular, order of priority No
decisions have been made as to the specific improvements to be funded with bond proceeds, which improvements actually
will be constructed, or the expected construction schedule.
A. Pleasant Hill BART Station Area
Pedestrian/Bicycle Projects including but not limited to overcrossings of Treat Boulevard, Walnut Creek and 1-680,
trail extensions and connections, pedestrian promenades, bicycle stations and signage and kiosks.
Development if the Iron Horse Corridor as a Greenspace, improvements to Fox Creek Park, tree planting, and other
public facilities.
Construction of a public parking garage, conference center and other public facilities including but not limited to
facilities for educational or cultural purposes.
Roadway improvements to North Main Street, Treat Boulevard, and Tones Road, including interchange
improvements, installation of traffic calming devices, restripping and other improvements. Signalization and other
improvements to various intersections.
Various drainage improvements including installation of pipes.
B. North Richmond
Roadway and other infrastructure improvements including extending Pittsburg Avenue, 7th Street and Soto Street,
storm drains,joint trenching, installation of street lights and medians, and landscaping improvements.
Development of an industrial business incubator with contract production center and training components.
Various housing programs.
C. Oakley
Roadway and other infrastructure improvements including storm drains, sewer, lighting, street scape, joint utility
trenching, water, parking structures, under grounding of utilities, expansion and upgrading of utilities in the Oakley
Road/Highway 4, Oakley Town, Sand Hill/Highway 4 and other areas.
Library and other community facilities.
D. Bay Point
!improvements to North Broadway, Solano, and Poinsettia Avenues, including cross streets, and urban design and
street improvements in the Willow Pass Road neighborhood commercial district.
Development of a mixed use, residential/commercial project in the North Broadway area.
Development in the marina and waterfront area, including infrastructure improvements.
Development of a light industrial area north of Willow Pass Road/Alves Lane area.
Infrastructure/urban design and street improvements int he Bailey Road corridor, including the South
Broadway/Orbasonia Heights area.
Rodeo
Parker Avenue roadway improvements.
Construction of senior housing developments.
Infrastructure and urban design improvements in the marina and waterfront area.
Infrastructure and street scape improvements related to a train station.
Improvements to existing and development of new community parks, including improvement of the multipurpose room
at Left Gomez Park.
F. All Areas
Unreinforced masonry building improvement program.
OAKLEY FISCAL AGREEMENT
LAFCO Resolution 97-17, approving the proposed incorporation of the City of Oakley 'included a condition authorized
the development of pass-through agreements (Fiscal Agreements) between the soon to be Oakley Redevelopment Agency
and the County for the General Fund, the County Water Conservation and Flood Control District, the County Water Agency,
and the County Library Distdct/Fund. The agreement reached in the LAFCO proceedings provided for the Fiscal Agreement
to be determined pursuant to Health and Safety Code Section 33607.5 as if the city had adopted the Redevelopment Plan
for Oakley initially. To remove ambiguities associated with the financing this conceptual agreement needs to be approved
at the time.
JK/srnb
DAdataNwp6\99031redtax.bos
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RESOLUTION NO. 99/123
A RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF
CONTRA COSTA MAKING FINDINGS WITH RESPECT TO AND APPROVING
THE ISSUANCE OF BONDS BY THE COUNTY OF CONTRA COSTA PUBLIC
FINANCING AUTHORITY,AND APPROVING THE BORROWING OF BOND
PROCEEDS BY THE CONTRA COSTA COUNTY REDEVELOPMENT AGENCY
WHEREAS, the County of Contra Costa (the "County") and the Contra Costa County
Redevelopment Agency(the "Agency") have heretofore entered into a Joint Exercise of Powers
Agreement establishing the County of Contra Costa Public Financing Authority (the
"Authority") for the purpose,among others,of issuing its bonds to be used to provide financial
assistance to the Agency; and
WHEREAS, the Agency is undertaking to assist the redevelopment of its Pleasant Hill,
North Richmond, Bay Point and Oakley Redevelopment Projects (collectively, the
"Redevelopment Projects"), and the Agency has previously entered into various loan
agreements (collectively, the "Prior Loan Agreements") with the Authority pursuant to which
the Authority has made various loans to the Agency (collectively, the "Prior Loans") from the
proceeds of revenue bonds issued by the Authority for such purpose(the "Prior Bands");and
WHEREAS, the Agency has determined that due to prevailing financial market
conditions it is in the best interests of the Agency to realize interest rate savings by refunding all
or designated portions of the Prior Loans at this time, and the Agency has requested the
Authority to lend it funds in an amount sufficient for such purpose and also to provide
additional financing for improvements (the "Improvements") to be located in the County and
within or of benefit to the Redevelopment Projects and the Rodeo Redevelopment Project,
including certain low and moderate income housing programs of the Agency;and
WHEREAS, for the purpose of raising funds necessary to provide such financial
assistance to the Agency,the Authority proposes to authorize the issuance of its revenue bonds
(the "Bonds") under the provisions of Article 4 (commencing with Section 6584) of Chapter 5 of
Division 7 of Title I of the Government Code of the State of California (the "Code"),
designated as the County of Contra Costa-Public .Financing Authority 1999 Tax Allocation
Revenue Bonds (Pleasant Hill BART, North Richmond, Bay Point, Rodeo and Oakley
Redevelopment Project Areas);and
WHEREAS, the proceeds of the Bonds will be applied to make five loans (collectively,
the "Loans") to the Agency pursuant to loan agreements in the case of the Oakley and Rodeo
Project Areas (collectively, the "Loan Agreements"), or supplements to the Prior Loan
Agreements in the case of the Pleasant Hill, North Richmond and Bay Point Project Areas
(collectively, the "Supplements"), as applicable, each between the Agency and the Authority;
and
WHEREAS, the County has on this date held a duly noticed public hearing on the
financing of the Improvements with the,proceeds of the Bonds, as required by Section 6586.5(a)
of the Code;and
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RESOLUTION NO. 99/124
A RESOLUTION OF THE COUNTY OF CONTRA COSTA PUBLIC FINANCING
AUTHORITY AUTHORIZING THE ISSUANCE OF REVENUE BONDS TO MAKE
LOANS TO THE CONTRA COSTA COUNTY REDEVELOPMENT AGENCY IN
CONNECTION WITH ITS PLEASANT HILL BART,NORTH RICHMOND,BAY
POINT,RODEO AND OAKLEY REDEVELOPMENT PROJECTS,AND
APPROVING RELATED DOCUMENTS AND ACTIONS
WHEREAS, the County of Contra Costa (the "County") and the Contra Costa County
Redevelopment Agency (the "Agency")have heretofore entered into a joint Exercise of Powers
Agreement establishing the County of Contra Costa Public Financing Authority (the
"Authority")for the purpose,among others,of issuing its bonds to be used to provide financial
assistance to the Agency; and
WHEREAS, the Agency is undertaking to assist the redevelopment of its Pleasant Hill
BART, North Richmond, Bay Point and Oakley Redevelopment Projects (collectively, the
".Redevelopment Projects"), and the Agency has previously entered into various loan
agreements (collectively, the "Prior Loan Agreements") with the Authority pursuant to which
the Authority has made various loans to the Agency (collectively, the "Prior Loans") from the
proceeds of revenue bonds issued by the Authority for such purpose(the "Prior Bonds");and
WHEREAS, the Agency has determined that due to prevailing financial market
conditions it is in the best interests of the Agency to realize interest rate savings by refunding all
or designated portions of the Prior Loans at this time, and the Agency has requested the
Authority to lend it funds in an amount sufficient for such purpose and also to provide
additional financing for the Redevelopment Projects and financing for the Rodeo
Redevelopment Project, including certain low and moderate income housing programs of the
Agency;and
WHEREAS, for the purpose of raising funds necessary to provide such financial
assistance to the Agency, the Authority proposes to authorize the issuance of its revenue bonds
(the "Bonds") under the provisions of Article 4(commencing with Section 6584) of Chapter 5 of
Division 7 of Title 1 of the Government Code of the State of California (the "Act"), to be
designated as the County of Contra Costa Public Financing Authority 1999 Tax Allocation
Revenue Bonds (Pleasant Hill BART, North Richmond, Bay Point, Rodeo and Oakley
Redevelopment Project Areas),and
WHEREAS, the proceeds of the Bonds will be applied to make loans (collectively, the
"Loans") to the Agency pursuant to loan agreements, in the case of the Oakley and Rodeo
Project Areas (collectively, the "Loan Agreements"), or supplements to the Prior Loan
Agreements in the case of the Pleasant Hill BART, North Richmond and Bay Point Project
Areas (collectively, the "Supplements"), as applicable, each between the Agency and the
Authority, and a portion of the proceeds of the Loans will be used to finance various
improvements (the "Improvements") located in the County and within or of benefit to the
.Redevelopment Projects and/or the Rodeo Redevelopment Project,and
WHEREAS, the Board of Supervisors of the County has held a duly noticed public
hearing with respect to the financing of the Improvements,and has made a finding of significant
public benefits in connection with the issuance of the Bonds and the use of the proceeds thereof
to finance the Improvements;and
WHEREAS, the firm of Stone & Youngberg LLC (the "Underwriter") has proposed to
purchase and underwrite the Bonds and there has been presented to the Authority a form of
Purchase Agreement for the Bands, to be entered into among the Authority, the Agency and the
Underwriter (the "Purchase Agreement") and there has been presented to the Authority a
proposed form of official statement (the "Official Statement") describing the Bonds, to be used
in connection with the marketing thereof by the Underwriter;and
WHEREAS, the Board of Directors (the "Board") of the Authority has duly considered
such transactions and wishes at this time to approve said transactions in the public interests of
the Authority.
NOW, THEREFORE, BE IT RESOLVED, by the Board of Directors of the County of
Contra Costa Public Financing Authority as follows:
Section 1. Findings and Determinations. Pursuant to the Act, the Board hereby finds
and determines that the issuance of the Bonds will result in savings in effective interest rates,
bond underwriting costs and bond issuance costs and thereby result in significant public
benefits to its members within the contemplation of Section 6586 of the Act.
Section 2. Issuance of Bonds,Approval of Indenture. The Board hereby authorizes the
issuance of the Bonds in a maximum aggregate principal amount not to exceed $50,000,000.
The Bonds shall be issued pursuant to an Indenture of Trust,by and between the Authority and
U.S. Bank Trust National Association, as trustee (the "Indenture"). The Board hereby
approves the Indenture in the form on file with the Secretary. The Chair, Executive Director,
Assistant Executive Director, and Deputy Executive Director (the "Designated Officers"), each
acting alone, are hereby authorized and directed to execute the Indenture for and in the name
and on behalf of the Authority in such form, together with such additions thereto and changes
therein as the Deputy Executive Director of the Authority shall deem necessary, desirable or
appropriate, the execution of which by a Designated Officer shall be conclusive evidence of the
approval of any such additions and changes. The Board hereby authorizes the delivery and
performance of the Indenture.
Section 3. Approval of Loans to Agency, Loan Agreements. The Board hereby
authorizes and approves the loan of the Bond proceeds by the Authority to the Agency
pursuant to and in accordance with the provisions of the Loan Agreements and the
Supplements,as applicable. The Board hereby approves the Loan Agreements in the respective
forms on file with the Secretary. The Designated Officers, each acting alone, are hereby
authorized and directed to execute each of the Loan Agreements for and in the name and on
behalf of the Authority in such forms, together with such additions thereto and changes therein
as the Deputy Executive Director of the Authority shall deem necessary, desirable or
appropriate(including,if requested by the Deputy Director-Redevelopment of the Agency, the
addition of an escrow for a portion of the proceeds of the Loan for the Pleasant Hill BART
Redevelopment Project, and related prepayment provisions), the execution of which by a
Designated Officer shall be conclusive evidence of the approval of any such additions and
changes. The Authority hereby authorizes the delivery and performance of the Loan
Agreements.
Section 4. Amendment of Prier Loan Agreements. The First Supplement to Pleasant
Hill Loan Agreement, the Second Supplement to f=orth Richmond Loan Agreement and the
Second Supplement to West Pittsburg Loan Agreement(collectively,the "Supplements"),in the
respective forms on file with the Secretary, are hereby approved. The Designated Officers,each
acting alone, are hereby authorized and directed, for and in the name of and on behalf of the
Authority, to execute and deliver the Supplements in said forms,with such additions thereto or
changes therein as are deemed necessary, desirable or appropriate by the Deputy Executive
2
Director, the approval of such changes to be conclusively evidenced by the execution and
delivery by a Designated Officer of the Supplements. The Authority hereby authorizes the
delivery and performance of the Supplements.
Section 5. Sale of Bunds. The Board hereby approves the sale of the Bonds by the
Authority by negotiation with the Underwriter,pursuant to the Purchase Agreement in the form
on file with the Secretary. The Designated Officers, each acting alone, are hereby authorized
and directed to execute the Purchase Agreement for and in the name and on behalf'of the
Authority in such form,together with such additions thereto and changes therein as the Deputy
Executive Director of the Authority shall deem necessary, desirable or appropriate, the
execution of which by the Deputy Executive Director shall be conclusive evidence of the
approval of any such additions and changes, upon the submission of an offer by the
Underwriter to purchase the Bonds, which offer is acceptable to the Deputy Executive Director
of the Authority and consistent with the requirements of this Resolution. The amount of
Underwriter's discount for the Bonds shall be not more than two percent (2%) of the par
amount thereof(not taking into account any original issue discount on the sale thereof) and the
average interest rate on the Bonds shall not exceed six percent(6%) per annum.
Section 6. Official Statement. The Board hereby approves the preparation of, and
hereby authorizes the Designated Officers, each acting alone, to deem final within the meaning
of Rule 15c2-12 of the Securities Exchange Act of 1934 except for permitted omissions, a
preliminary form of the Official Statement describing the Bonds. Distribution of such
preliminary Official Statement by the Underwriter is hereby approved. The Designated
Officers, each acting alone, are hereby authorized to execute the final form of the Official
Statement,including as it may be modified by such additions thereto and changes therein as the
Deputy Executive Director of the Authority shall deem necessary, desirable or appropriate, and
the execution of the final Official Statement by the Authority shall be conclusive evidence of the
approval of any such additions and changes. The Board hereby authorizes the distribution of
the final Official Statement by the Underwriter. The final Official Statement shall be executed
in the name and on behalf of the Authority by a Designated Officer.
Section 7. Defeasance of the Prior Bonds.The Authority consents to the use of proceeds
of the Bonds for the defeasance of a portion of the Prior Bonds and the prepayment of a
portion of the Prior Loans pursuant to an Escrow Deposit and Trust Agreement by and among
the Agency, the Authority and U.S. Bank Trust National Association, as escrow bank (the
"Escrow Agreement").The Authority hereby approves the.Escrow Agreement in the form on file
with the Secretary, together with such additions thereto and changes therein as the Deputy
Executive Director of the Authority shall deem necessary, desirable or appropriate, and the
execution thereof by a Designated Officer shall be conclusive evidence of the approval of any
such additions and changes. The Designated Officers,each acting alone, are hereby authorized
and directed to execute the Escrow Agreement for and in the name and on behalf of the
Authority. The Authority hereby authorizes the delivery and performance of the Escrow
Agreement.
Section 8. Continuing Disclosure Certificate. The Continuing Disclosure Certificate, in
the form on file with the Secretary, is hereby approved. The Designated Officers, each acting
alone, are hereby authorized and directed, for and in the name of and on behalf of the Agency,
to execute and deliver the Continuing Disclosure Certificate in said form., with such additions
thereto or changes therein as are deemed necessary, desirable or appropriate by the Deputy
Executive Director, the approval of such changes to be conclusively evidenced by the execution
and delivery by a Designated Officer of the Continuing Disclosure Certificate.
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Section 9< Designation of Bond Counsel and Disclosure Counsel. The law firm of Quint
& Thimmig LLP is hereby designated as bond counsel to the Authority, and the law firm of
Jones Mall is hereby designated as disclosure counsel for the Authority, with respect to the
Bonds. The Deputy Executive Director is hereby authorized and directed to execute agreements
with said firms for their services in connection with the Bonds, provided that payment of the
fees and expenses of such firms shall be contingent upon the issuance of, and payable solely
from the proceeds of, the Bonds.
Section 10. Official Actions. The Chair, the Executive Director, the Assistant Executive
Director, the Deputy Executive Director, the Secretary and any and all other officers of the
Authority are hereby authorized and directed, for and in the name and on behalf of the
Authority, to do any and all things and take any and all actions, including execution and
delivery of any and all assignments, certificates, requisitions, agreements, notices, consents,
instruments of conveyance, warrants and other documents, which they, or any of them, may
deem necessary or advisable in order to consummate the lawful issuance and sale of the Bonds,
the refunding of a portion of the Prior Bonds and refinancing of a portion of the Prior Loans,
and the consummation of the transactions on the part of the Authority as described in the
documents approved herein.
Section 11. Effective bate. This Resolution shall take effect from and after the date of
its passage and adoption.
PASSED, APPROVED AND ADOPTED this 23rd day of March, 1999 by the following
vote:
AYES: Supervisors Gioia, Uilkema, Gerbdr.V DeSaulnier, Ganciamilla
NOES: None
ABSENT: None
ABSTAIIN: None
By:
h ir, uydy of Contra Costa Public
Financing Authority
ATTEST: Phil Batchelor, Authority
Secretary
Deputy
03012.01J4078
3/22/99
4
I HEREBY CERTIFY that the foregoing resolution was duly and regularly passed and
adapted by the County of Contra Costa Public.Financing Authority at a regular meeting thereof
held on the 23rd day of March, 1999 and that the foregoing is a full, true and correct copy of
said Resolution.
Phil Batchelor,Secretary of the County of
Contra Costa Public Financing Authority
9
By: -
Deputy
5
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RESOLUTION NO. RA 99-01
A RESOLUTION OF THE CONTRA COSTA COUNTY REDEVELOPMENT
AGENCY AUTHORIZING THE BORROWING OF FUNDS FROM THE
COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY
RELATING TO THE AGENCY'S PLEASANT HILL BART,NORTH
RICHMOND,BAY POINT,RODEO AND OAKLEY REDEVELOPMENT
PROJECTS,AND APPROVING RELATED DOCUMENTS AND ACTIONS
WHEREAS, the County of Contra Costa (the "County„) and the Contra Costa County
Redevelopment Agency (the "Agency") have heretofore entered into a joint Exercise of Powers
Agreement establishing the County of Contra Costa Public Financing Authority (the
"Authority") for the purpose, among others, of issuing its bonds to be used to provide financial
assistance to the Agency; and
WHEREAS, the Agency is undertaking to assist the redevelopment of its Pleasant.Hill
BART, North Richmond, Bay Point and Oakley Redevelopment Projects (collectively, the
"Redevelopment Projects"), and the Agency has previously entered into various loan
agreements (collectively, the "Prior Loan Agreements") with the Authority pursuant to which
the Authority has made various loans to the Agency (collectively, the "Prior Loans") from the
proceeds of revenue bonds issued by the Authority for such purpose(the "Prior Bonds");and
WHEREAS, the Agency has determined that due to prevailing financial market
conditions it is in the best interests of the Agency to realize interest rate savings by refunding all
or designated portions of the Prior Loans at this time, and the Agency has requested the
Authority to lend it funds in an amount sufficient for such purpose and also to provide
additional financing for the Redevelopment Projects and financing for the Rodeo
Redevelopment Project, including certain low and moderate income housing programs of the
Agency;and
WHEREAS, for the purpose of raising funds necessary to provide such financial
assistance to the Agency,the Authority proposes to authorize the issuance of its revenue bonds
(the "Bonds")under the provisions of Article 4(commencing with Section 6584) of Chapter 5 of
Division 7 of Title 1 of the Government Code of the State of California (the "Act"), to be
designated as the County of Contra Costa Public Financing Authority 1999 Tax Allocation
Revenue Bonds (Pleasant Hill BART, North Richmond, Bay Point, Rodeo and Oakley
Redevelopment Project Areas);and
WHEREAS, the proceeds of the Bonds will be applied to make loans (collectively the
"Loans") to the Agency pursuant to loan agreements, in the case of the Oakley and Rodeo
Project Areas (collectively, the "Loan Agreements"), or supplements to the Prior Loan
Agreements, in the case of the Pleasant Hill BART, North Richmond and Bay Point Project
Areas (collectively, the "Supplements"), as applicable, each between the Agency and the
Authority;and
WHEREAS, the firm of Stone & Youngberg LLC (the "Underwriter") has proposed to
purchase and underwrite the Bonds and there has been presented to the Agency a form of
Purchase Agreement for the Bonds,to be entered into among the Authority,the Agency and the
Underwriter (the "Purchase Agreement") and there has been presented to the Agency a
proposed form of official statement(the "Official Statement") describing the Bonds, to be used
in connection with the marketing of the Bonds by the Underwriter;and
f
WHEREAS, the Agency has duly considered such transactions and wishes at this time
to approve said transactions in the public interests of the Agency.
NOW, THEREFORE, BE IT RESOLVED, by the Contra Costa County Redevelopment
Agency as follows:
Section 1. Findings and Determinations. Pursuant to the Act, the Agency hereby finds
and determines that the issuance of the Bonds will result in savings in effective interest rates,
bond underwriting costs and bond issuance costs and thereby result in significant public
benefits to the members of the Authority within the contemplation of Section 6586 of the Act.
Section 2. Approval of Loans from Authority;Loan Agreements. The Agency hereby
authorizes and approves the borrowing by the Agency from the Authority of the proceeds of the
Bonds pursuant to and in accordance with the provisions of the Loan Agreements and the
Supplements; provided that the aggregate principal amount of the Loans does not exceed
$50,000,000. The Agency hereby approves the Loan Agreements in the respective forms on file
with the Secretary. The Chair, Executive Director, Assistant Executive Director, Deputy
Executive Director and Deputy Director - Redevelopment (the "Designated Officers"), each
acting alone,are hereby authorized and directed to execute the Loan Agreements for and in the
name and on behalf of the Agency, in such forms, together with such additions thereto and
changes therein as the Deputy Director—Redevelopment shall deem necessary, desirable or
appropriate,the execution of which by a Designated Officer shall be conclusive evidence of the
approval of any such additions and changes. The Agency hereby authorizes the delivery and
performance of the Loan Agreements.
Section 3. Amendment of Prior Loan Agreements. The First Supplement to Pleasant
Hill Loan Agreement, the Second Supplement to North Richmond Loan Agreement and the
Second Supplement to West Pittsburg Loan Agreement(collectively,the "Supplements"),in the
respective forms on file with the Secretary,are hereby approved. The Designated Officers, each
.acting alone, are hereby authorized and directed, for and in the name of and on behalf of the
Agency, to execute and deliver the Supplements in said forms, with such additions thereto or
changes therein as are deemed necessary, desirable or appropriate by the Deputy Director -
Redevelopment (including, if in the opinion of the Deputy Director - Redevelopment it is
efficient financially for the Agency, the addition of an escrow for a portion of the Loan for the
Pleasant Hill BART Redevelopment Project and related prepayment provisions to the
applicable Supplement), the approval of such changes to be conclusively evidenced by the
execution and delivery by a Designated Officer of the Supplements. The Agency hereby
authorizes the delivery and performance of the Supplements.
Section 4 Refunding of the Prior Loan Agreements. A portion of the proceeds of the
Bonds will be applied to refinance a portion of the Agency's obligations under the Prior Loan
Agreements and to defease a portion of the Prior Bonds pursuant to an Escrow Deposit and
Trust Agreement by and among the Agency, the Authority and U.S. Bank Trust National
Association, as escrow bank (the "Escrow Agreement"). The Agency hereby approves the
Escrow Agreement in the form on file with the Secretary, together with such additions thereto
and changes therein as the Deputy Director—Redevelopment shall deem necessary,desirable or
appropriate, and the execution thereof by a Designated Officers shall be conclusive evidence of
the approval of any such additions and changes. The Designated Officers, each acting along,
are hereby authorized and directed to execute the final form of the Escrow Agreement for and in
the name and on behalf of the Agency. The Agency hereby authorizes the delivery and
performance of the Escrow Agreement.
2
r'
Section 5. Sale of Bonds. The Agency hereby approves the sale of the Bands by the
Authority by negotiation with the Underwriter,pursuant to the Purchase Agreement in the form
on file with the Secretary. The Designated Officers, each acting alone, are hereby authorized
and directed to execute the Purchase Agreement for and in the name and can behalf of the
Agency in such form, together with such additions thereto and changes therein as the Deputy
Director—Redevelopment shall deem necessary, desirable or appropriate, the execution of
which by the Agency shall be conclusive evidence'of the approval of such additions and
changes,upon the submission of an offer by the Underwriter to purchase the Bonds,which offer
is acceptable to the Deputy Director- Redevelopment and consistent with the requirements of
this Resolution. The amount of Underwriter's discount for the Bands shall be not more than
two percent(210) of the par amount thereof(not taking into account any original issue discount
on the sale thereof) and the average interest rate on the Bonds shall not exceed six percent(6%)
per annum.
Section 6. Official Statement. The Agency hereby approves the preparation of, and
hereby authorizes the Designated Officers,each acting alone,to deem final within the meaning
of Rule 15c2-12 of the Securities Exchange Act of 1934 except for permitted omissions, the
preliminary farm of the Official Statement describing the Bonds. Distribution of such
preliminary Official Statement by the Underwriter is hereby approved. The Designated
Officers, each acting alone, are hereby authorized to execute the final form of the Official
Statement,including as it may be modified by such additions thereto and changes therein as the
Deputy Director - Redevelopment shall deem necessary, desirable or appropriate, and the
execution of the final Official Statement by the Agency shall be conclusive evidence of the
approval of any such additions and changes. The Agency hereby authorizes the distribution of
the final Official Statement by the Underwriter. The final Official Statement shall be executed
in the name and on behalf of the Agency by a Designated Officer.
Section 7. Continuing disclosure Certificate. The Continuing Disclosure Certificate,in
the form on file with the Secretary, is hereby approved. The Designated Officers, each acting
alone, are hereby authorized and directed, for and in the name of and on behalf of the Agency,
to execute and deliver the Continuing Disclosure Certificate in said form,with such additions
thereto or changes therein as are deemed necessary, desirable or appropriate by the Deputy
Director—Redevelopment, the approval of such changes to be conclusively evidenced by the
execution and delivery by a Designated Officer of the Continuing Disclosure Certificate.
Section 5. Official Actions. The Chair, the Executive Director, the Assistant Executive
Director, the Deputy Executive Director, the Deputy Director - Redevelopment, the Secretary
and any and all other officers of the Agency are hereby authorized and directed, for and in the
name and on behalf of the Agency, to do any and all things and take any and all actions,
including execution and delivery of any and all assignments, certificates, requisitions,
agreements, notices, consents, instruments of conveyance, warrants, agreements and other
documents which they, or any of them., may deem necessary or advisable in order to
consummate the lawful issuance and sale of the Bonds, the making of the Loans and the
refunding of a portion of the Prior Bonds and refinancing of a portion of the Prior Loans as
described in the documents approved herein.
3
t
Section 9. Effective Date. This Resolution shall take effect from and after the date of its
passage and adoption,
PASSED AND ADOPTED on March 23, 1999 by the following vote:
AYES: SUPERVISORS GIOIA, UILK0 , GERBER, DeSAULNIER AND CANCIAMILLA
NOES: NONE
ABSENT: NONE
ABSTAIN. : NONE
ATTEST:
Phil Batchelor,Agency Secretary
FF s
By:
Deputy
03012.01:;4079
3/9!99
4
13093-04 JH.CKL 03/15/99
PRELIMINARY OFFICIAL STATEMENT DATED MARCH 1999
NEW ISSUE-FULL BOOK ENTITY Ratings: [TO COME]
(See"itatings"herein)
In the opinion of Quint&Thimmig LLP,San Francisco,California,Bond Counsel,subject,however to certain qualifications described herein,under
existing law,the interest on the Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for
purposes of the federal individual and corporate alternative minimum taxes, although it is included in certain income and earnings in computing the
alternative minimum tax imposed on corporations.In the further opinion of Bond Counsel,such interest is exempt from CalijOrnla personal income taxes. See
"LEGAL MfiT rERS—Tax Matters"herein.
$40,000,000*
COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY
1999 Tax Allocation Revenue Bonds
(Pleasant Hill SART,North Richmond,Bay Point,Rodeo
and Oakley Redevelopment Project Areas)
Dated.April 1,1999 Duet August 1,as shown below
The County of Contra Costa.Public Financing Authority(the "Authority")has determined to issue its 1999 Tax Allocation Revenue
Bonds(Pleasant Illll BART,North Richmond,Bay Point, Rodeo and Oakley Redevelopment Project Areas)(the "Bonds"). Proceeds of the
Bonds will be used to(i) finance acquisition and construction by the Authority of certain public capital improvements in the County of
Contra Costa(the°'County l and(ii)provide funds for five separate loans(the "Loans") to be made by the Authority to the Contra Costa
County Redevelopment Agency(the "Agency") pursuant to five loan agreements (the "Loan Agreements"). The Agency will use the
proceeds of the Loans to(a)finance certain redevelopment activities of the Agency,(b)provide for the prepayment of certain outstanding
obligations of the Agency,(c)fund separate reserve funds for each of the Loans and(d)pay the costs of issuing the Bonds.
The Bonds will be delivered as fully registered bonds, registered in the name of Cede & Co. as nominee of The Depository Trust
Company,New York,New York("UTC"),and will be available to ultimate purchasers("Beneficial Owners")in the denomination of$5,000 or
any integral multiple thereof,under the book-entry system maintained by UTC. Beneficial Owners will not be entitled to receive delivery of
certificates representing their ownership interest in the Bonds. The principal of,premium if any,and interest on the Bonds,due February 1
and August 1 of each year,commencing August 1,1999,will be payable by U.S. Bank Trust National Association,Sar Francisco,California,as
trustee(the"Trustee"),to DTC for subsequent disbursement to UTC participants,so long as DTC or its nominee remains the registered owner
of the Bonds.
The Bonds are subject to optional and msandatory redemption prior to maturity as described herein See"THE BONDS-Redemption"herein.
The Bonds are being issued pursuant to the terms of an Indenture of Trust,dated as of Match 1,1999,by and between the Authority
and the Trustee. The Bonds are limited obligations of the Authority and are payable exclusively from.Revenues (as defined herein) to be
derived from amounts payable to the Authority by the Agency under the Loan Agreements(which amounts are generally payable from tax
increment revenue received by the Agency from five separate project areas(each,a"Project Area'i,and from amounts on deposit in certain
funds and accounts,including the Reserve Funds and the Special Funds established under the Loan Agreements, as described herein).
Except to the limited extent described herein(see "SECURITY FOR THE BONDS a Limited Cross-Collateralization"herein), tax increment
revenues from one Project Area may not be used to make payments due under a Loan Agreement with respect to another Project Area. The
Agency's pledge of tax increment revenues to secure its obligation to May the Loans relating to the West Pittsburg/Bay Point Redevelopm art Project Area,
the North Richmond Project Area and the Pleasant Bill BART Station Redevelopment Project Area is on a pants/with its pledge of tax increment revenues
to repayment of certain outstanding indebtedness,as described herein.
The receipt of Revenues is subject to certain risks and limitations.See"RISK FACTORS"and"LIMITATIONS ON REVENUES AND
POSSIBLE SPENDING LIMITATIONS"herein.
THE BONDS ARE NOT A DEBT OF THE COUNTY,THE AGENCY OR THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL
SUBDIVISIONS(EXCEPT THE AUTHORITY),AND NONE OF THE COUNTY,THE AGENCY,THE STATE OF CALIFORNIA OR ANY OF
ITS POLITICAL SUBDIVISIONS(EXCEPT THE AUTHORITY) IS LIABLE THEREFOR, NOR IN ANY EVENT WILL THE BONDS BE
PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN THOSE OF THE AUTHORITY SPECIFICALLY PLEDGED THEREFOR
UNDER THE INDENTURE. THE BONDS DO NOT CONSTITUTE AN INDEBTEDNESS WITHINI THE MEANING OF ANY
CONSTITUTIONAL OR STATUTORY DEBT LIMIT OR RESTRICTION.THE AUTHORITY HAS NO TA CINI C POWER.
THE AGENCY'S OBLIGATION TO REPAY THE LOANS PURSUAN r TO THE LOAN AGREEMENTS IS NOT A DEBT OF THE
COUNTY,THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS(EXCEPT THE AGENCY),AND NEITHER THE
COUNTY,THE STATE OF CALIFORNIA NOR ANY OF ITS POLITICAL SUBDIVISIONS(EXCEPT THE AGENCY) IS LIABLE THEREFOR.
THE AGENCY'S OBLIGATION TO REPAY THE LOANS PURSUANT TO THE LOAN AGREEMENTS CONSTITUTES AN INDEBTEDNESS
OF THE AGENCY PAYABLE SOLELY FROM THE FUNDS AND PROPERTIES OF THE AGENCY SPECIFICALLY PLEDGED THEREFOR
UNDER THE LOAM AGREEMENTS.
This cover page contains certain information for quick reference only.It is not intended to be a summary of all factors relating to an
investment in the Bonds.Investors should review the entire Official Statement before making any investment decision.
"Preliminary;subject to change.
MATURITY SCHEDULE*
Maturity Rate Principal Interest Prig or Maturity Bate Principal Interest Price or
Uu=t 1) Amount Rate Yield
S®®°Io 'Tenn Bonds due August 1,20___.Price 4Y,
The Bonds are offered when,as and if issued and accepted by the Underwriter,subject to approval as to legality by Quint&'ahYmmig
LLP,Sala Francisco,California,Bond Counsel,and subject to certain other conditions. Jones Hao A Professional Law Corporation, San
Francisco,California is acting as disclosure counsel to the Authority.Certain legal matters will be passed on for the Agency by Goldfarb&
Lipman, San Francisco,California and for the Authority by County Counsel. It is anticipated that the Bonds,in book-entry form,will be
available for delivery on or about April 14,1999.
STONE & YOUNGBERG LLC
Dated.March_ 1999
No dealer, broker, salesperson or other person has been authorized to give any
information or to make any representations with respect to the Bonds, other than those
contained in this Official Statement, and, if given or made, such other information or
representations must not be relied upon as having been authorized by the Authority, the
Agency,the County or the Underwriter.
This Official Statement sloes not constitute an offer to sell or the solicitation of an offer
to buy nor shall there be any sale of the Bonds by a person in any jurisdiction in which it is
unlawful for such person to remake such an offer, solicitation or sale. This Official Statement is
not to be construed as a contract with the purchasers of the Bonds. Statements contained in
this Official Statement which involve estimates, forecasts or matters of opinion., whether or not
expressly so described herein, are intended solely as such and are not to be construed as a
representation of facts.
The information set forth herein has been obtained from the Authority,the Agency or the
County and other sources believed to be reliable, but the accuracy or completeness of such
information is not guaranteed by, and should not be construed as a representation by, the
Underwriter. The information and expressions of opinions herein are subject to change without
notice and neither delivery of this Official Statement nor any sale made hereunder shall, under
any circumstances, create any implication that there has been no change•in the affairs of the
Authority or the Agency since the date hereof. All summaries contained herein of the Indenture,
the Loan Agreements or other documents are made subject to the provisions of such documents
and do not purport to be complete statements of any or all of such provisions.
IN CONNECTION WITH THIS OFFERING,THE UNDERWRITER MAY OVERALLOT
OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF
THE BONDS AT A LEVEL ABOVE THAT WHICH NICHT OTHERWISE PREVAIL ON THE
OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT
ANYTIME.
COUNTY OF CONTRA COSTA PUBLIC FINANCING ALMIOR.ITY
AUTHORITY MEMBERS
Joe Canciamilla,Chair
Gayle B.Uilkema,Vice Chair
Donna Gerber,Member
Mark DeSaulnier,IMe»mber
John Goia,Member
AUTHORITY AND REDEVELOPMENT AGENCY STAFF
Phil Batchelor,County Administrator and Authority Executive Director
Jaynes Kennedy,Deputy Director-Redevelopment and Authority Deputy Executive Director
Beth.Lee,Redevelopment Proect Manager
Lourdes Chang„Redevelo meat rroject Manager
Becky England,Redevelopment Accountant
AGENCY'S SPECIALCOUNSEL
Goldfarb&Lipman
San Francisco,ealifornia
SPECIAL SERVICES
BOND COUNSEL
Quint&Thimn' LLP
San Francisco,California
DISCLOSURE COUNSEL
Jones Hall,A Professional Law Corporation
San Francisco,California
TRUSTEE AND ESCROW AGENT
U.S.Bank Trust National Association
San Francisco,California
FISCAL CONSULTANT
Katz Hollis
Sacramento,California
VERIFICATION AGENT
Causey,Demgen&Moore
Denver,Colorado
TABLE OF CONTENTS
P
INTRODUCTION...................................................................<.................e........I......e........r.......1
THE ``BONDS..............................................................................................................................6
THE FINANCING PLAN..............................e.........................................................................11
SECURITY FOR THE BONDS...........................................................................e<...................15
THEAUTHORITY.................................................................<.................................................23
THEAGENCY................a......................a.a........e..<...................................................................23
THE PLEASANT HILL BART PROJECT AREA...................................................................25
THE NORTH RICHMOND PROJECT AREA.......................a.....................................< ..35
THE WEST PITTSBURG/BAY POINT PROJECT AREA......................................................41
THE RODEO PROJECT AREA ................a........................r..<..................................................48
THE OAKLEY PROJECT AREA..............e.....
DIRECT AND OVERLAPPING DEB`I'...................................................................................64
RISKFACTORS........ . ..................................................... .............e........................................65
LIMITATIONS ON TAX REVENUES AND POSSIBLE SPENDING
LIMITATIONS............................................................................................a.........................70
LITIGATION............................................................................................................................76
RATING ............................................................................................. ..76
TAXMATTERS.......................................................................................................................76
CERTAINLEGAL MATTERS.................................................................................................77
UNDERWRITING....................a.e....e......e.....................a..............r........,.........e.er................r.....77
MISCELLANEOUS.e......e........e...............................................................................................77
APPENDIX A- Summary of Certain.Provisions of the Principal Legal Documents
APPENDIX B- Audited. Financial Statements of the Agency for Fiscal Year Ended.
June 30, 1998
APPENDIX C- Fiscal Consultant Report
APPENDIX D- General Information About the County of Contra Costa
APPENDIX E- Form of Bond Counsel Opinion.
APPENDIX F- Form of Continuing Disclosure Certificate
Location Map of the County
Project Area Map
OFFICIAL,STATEMENT
S40,000-000*
COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY
1999 Tac Allocation Revenue Bands
(Pleasant Hill BART,North Richmond,Bay Point,Rodeo and Oakley Redevelopment Project
Areas)
INTRODUCTION
This Official Statement,including the cover page and appendices hereto, is provided to
furnish information in connection with the sale by the County of Contra. Costa Public Financing
Authority (the "Authority") of its 1999 Tax Allocation Revenue Bonds (Pleasant Hill BART,
North Richmond, Bay Point, Rodeo and Oakley Redevelopment project Areas) (the "Bonds").
Definitions of certain terms used in this Official Statement are set forth in "APPENDIX A —
Summary of Certain provisions of the Principal Legal Documents".
This introduction is not a summary of this Official Statement. It is only a brier description of
and guide to,and is qualified by, more complete and detailed information contained in the entire Official
Statement,including the cover page and appendices hereto,and the documents summarized or described
herein. A full reviery should be made of the entire Official Statement. The offering of the Bonds to
potential investors is made only by means of the entire Official Statement.
Purpose of the Bonds
A portion of the proceeds of the Bonds will be used to fund five loans (each, a "Loan",
and collectively, the "Loans") from the Authority to the Contra Costa County Redevelopment
Agency (the "Agency"), pursuant to five loan agreements (each, a "Loan Agreement" and
collectively, the "Loan Agreements") with respect to the five separate project areas described
below (each a"Project Area" and collectively,the "Project Areas"), each dated as of March 1,
1999, by and between the Authority and the Agency. See "SECURITY FOR THE BONDS --
Loan Agreements".The proceeds of the Loans will be used by the Agency to (i) prepay on aro
advance basis certain outstanding obligations of the Agency, (ii) to provide funds for
redevelopment activities of the Agency in the Project Areas,(iii) to fund five separate reserve
funds for each of the Loans, and (iv) to pay the costs of issuing the Bonds. The Agency will
enter into the Loan. Agreements pursuant to the State of California's (the "State") Community
Redevelopment Law, constituting Part 1, Division 24 (commencing with Section.53000) of the
Health and Safety Code of the State (the "Redevelopment Law").
The portion of the Bond proceeds that is not loaned to the Agency under the Loan.
Agreements will be used by the Authority to finance acquisition and construction by the
Authority of certain public capital improvements in the County of Contra Costa ("County").
See "THE FINANCING PLAN—Estimated Sources and Lyses of Funds".
The Bonds are being issued pursuant to the Constitution and the laws of the State,
including the Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4 of Chapter 5
*Prel inary,subject to change.
1
of Division 7 of Title 1 (commencing with Section 6584) of the California Government Code (the
""Bond Law"), a resolution of the Authority adopted on March 23, 1999, and an Indenture of
Frust, dated as of March 1, 1999 by and between the Authority and U.S. Bank Trust National
Association,as trustee (the "Trustee"').
The County,the Authority and the Agency
The County. The County of Contra Costa is located in northern California,
approximately 20 miles northeast of San Francisco, and is bounded by the San Francisco and
San Pablo Bays,the Sacramento River Delta, and by Alameda County on the south. Ranges of
hills effectively divide the County into three distinct regions. The western portion, with its
access to water, contains much of the County's heavy industry. The central section is rapidly
developing from a suburban area into a major commercial and financial headquarters center.
The eastern part is also undergoing substantial change, from a rural, agricultural area, to a
suburban region. The population of the County, as of January 1, 1998, is 900,700. For certain
information with respect to the County, see ""APPENDIX D — General Information About the
County of Contra Costa."
The Authot'ty. The Authority was formed pursuant to an agreement dated as of April 7,
1992,by and between the County and the Agency. The Authority was created for the purpose
of assisting the County and the Agency in financing projects, through, among other means, the
acquisition by the Authority of capital improvements and/or the purchase by the Authority of
local obligations within the meaning of Articles 1 through 4 (commencing with Section 6500) of
Chapter 5, Division 7, Title 1 of the Government Code of the State of California (the "'Act"'),
The Authority is a distinct legal entity separate and apart from the County and the Agency,
and its debts and obligations are not debts or obligations of the County or the Agency. The
Authority has no taxing power.
The Agency. The Agency was activated in 1983, pursuant to the Redevelopment Law.
As described herein, certain proceeds of the Bonds will be used to fund five loans from the
Authority to the Agency with respect to five separate redevelopment project areas (the "Project
Areas"):
1998-99 1998-99
No.of Assessed Lricremental
Project Area Acres value value
Pleasant Hill BARS'Station Redevelopment Project 125 $298,568,063 $269,920,066
Area(the"Pleasant Hill BART Project Area")
North Richmond Redevelopment Project Area(the 900 118,591,428 60,022,334
"North Richmond Project Area")
Bay Point Redevelopment Project Area (formerly 1,500 301,238,280 123,415,890
known as the west Pittsburg Redevelopment
Project Area)(the"west Pittsburg/Bay Point
Project Area")
Rodeo Redevelopment Project Area(the"Rodeo 650 143,796,813 45,996,060
Project Area")
Oakley Redevelopment Project Area (the "Oakley 964 202,349,941 121,334,031
Project Area")
The five Project Areas are the only project areas of the Agency. The Oakley Project
Area, which currently lies in an unincorporated area of the County, is expected to be
incorporated as part of a new City of Oakley on July 1, 1999. Upon incorporation, the Oakley
Project Area could be transferred to the new City of Oakley, but only if the City of Oakley's
2
redevelopment agency were to assume the debts and obligations of the Oakley Project Area.
For more information on the Agency and the Project Areas, see the following sections in this
Offi
Any future decrease in the taxable valuation in a Project Area or in the applicable tax
rates could reduce the Tax Revenues allocated to the Agency, thereby potentially impacting the
ability of the Agency to make Loan payments under the Loan Agreements and, consequently,
could have an adverse impact on the ability of the Authority to pay debt service on the Bonds.
See"RISK FACTORS"herein.
Description of the Bands
Payments. Interest on the Bonds is payable on August 1, 1999, and semiannually
thereafter on each February 1 and August 1 by check or draft of the Trustee mailed by first class
mail or,in certain circumstances, by wire transfer, to the registered owners thereof. Principal is
payable when due upon surrender of the Bonds at the corporate trust office of the Trustee in
San Francisco,California. So long as DTC is the sole depository for the Bonds, all payments of
principal and interest on the Bonds will be made to ITC. See "THE BONDS - Book-Entry
Only System."herein.
Denominations. The Bonds will be issued in denominations of $5,000 each or integral
multiples thereof.
Redemptions. The Bonds maturing on or after August 1, — are subject to redemption
prior to their respective maturity dates, from any optional prepayment of the Loans or any
other source of available funds. The Term Bonds are also subject to mandatory redemption. See
"THE BONDS -Optional Redemption" and " – Mandatory Redemption From Sinking Fund
Payments"herein.
Registration. The Bonds will be issued in fully registered form without coupons in the
name of Cede&Co.,as nominee of The Depository Trust Company of New York which will act
as securities depository for the Bonds. No physical distribution of the Bonds will be made to
the public under this arrangement. So long as the Bonds are maintained in book-entry form, all
references herein to the owners or holders of the Bonds shall. mean The Depository Trust
Company and not the beneficial owners of the Bonds. See "THE BONDS - Book-Entry Only
System."herein.
Bond Owners'Risks
Prospective investors should review this Official Statement and the Appendices hereto
in their entirety and should consider certain risk factors associated with the purchase of the
Bonds,some of which have been summarized in the section herein entitled"RISK FACTORS."
Tax Exemption
In the opinion of Quint&Thimrnig LLP,Bond Counsel,under existing law and assuming
(among other things)compliance with certain covenants,interest on the Bonds is excluded from
gross income for federal tax purposes and is exempt from State of California personal income
taxes. In the opinion of Bond Counsel,interest on the Bonds is not a specific preference item for
purposes of the federal individual or corporate alternative minimum taxes, although Bond
Counsel observes that such interest is included in certain income and earnings in calculating
federal corporate alternative minimum taxable income. Bond Counsel is also of the opinion that
the interest on the Bonds is exempt from California personal income taxes. Bond Counsel
expresses no opinion regarding any other tax consequences caused by the ownership or
disposition of, or the accrual or receipt of interest on,the Bonds. See "TAX MATTERS"herein.
4
Continuing Disclosure
The Agency,on behalf of itself and the Authority,will execute an undertaking to provide
certain annual financial information and operating data relating to the Bonds, the Agency and
the Project Areas(the"'Annual Report"),The undertaking will be in the form attached hereto as
Exhibit E.The Annual Report shall be delivered by eachh not later than nine months after the end
of the Agency's fiscal.year(which would be March 31 based upon the Agency's current June 30
fiscal year end), commencing March 31, 2000 with respect to the 1998-99 fiscal year. The
Agency has also covenanted to provide notices of the occurrence of certain enumerated events,
if material. The Annual Report will be filed by the Agency with each Nationally Recognized
Municipal Securities Information Repository, and with the appropriate Mate information
depository,if any. The notices of material events will be filed by the Agency with the Municipal
Securities Rulemaking Board (and with the appropriate State information depository, if any).
The specific nature of the information to be contained in the Annual Deport or the notices of
material events is set forth below in Appendix P. These covenants have been made in order to
assist the Underwriter in complying with S.E.C. Rule 15c2-12(b)(5). [The Agency has never
failed to comply,in all material respects,with an undertaking pursuant to Rule 15c2-12.]
Other Information
This Official Statement speaks only as of its date, and the information contained herein
is subject to change.
No dealer,broker,salesperson or other person has been authorized by the Authority, the
Agency or the County to give any information or to make any representations in connection with
the offer or sale of the Bands other than as contained herein and, if given or made, such other
information or representations must not be relied upon as having been authorized by the
Authority, the Agency or the County. This Official Statement does not constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any sale of the Bonds by a person in
any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or
sale.
This Official Statement is not to be construed as a contract with the purchasers of the
Brands. Statements contained in this Official Statement which involve estimates, forecasts or
matters of opinion, whether or not expressly so described herein, are intended solely as such
and are not to be construed as representations of fact. The summaries and references to
documents, statutes and constitutional provisions referred to herein do not purport to be
comprehensive or definitive, and are qualified in their entireties by reference to each such
documents, statutes and constitutional provisions. All capitalized terms used in this Official
Statement (unless otherwise defined herein) which are defined in the Indenture or the Loan
Agreements shall have the meanings set forth therein, some of which are summarized in
"APPENDIX A---Summary of Certain Provisions of the Principal Legal Documents."
5
TBE BONDS
Description
General. The Bonds will be issued as fully registered bonds, and will bear interest at the
rates,and mature on August 1 in the years and in the amounts all as set forth on the cover page
of this Official Statement. The Bonds will be dated April 1, 1999.
Interest on the Bonds will be payable semiannually on February 1 and August 1 of each
year(each an"Interest Payment Date"),commencing August 1, 1999, and will be calculated on
the basis of a 360-day year composed of twelve 30-day months. Each Bond will bear interest
from the Interest Payment Date next preceding the date of authentication thereof,.unless(a) it is
authenticated after a Record Date (as defined below) and on or before the following Interest
Payment bate,in which event it shall bear interest from.such Interest Payment Dater or (b) it is
authenticated on or before July 15,1999,in which event it shall bear interest from April 1, 1999;
provided,however, that if, as of the date of authentication of any Bond, interest thereon is in
default, such Bond shall bear interest from the Interest Payment Date to which interest has
previously been paid or made available for payment thereon.
Interest on the Bands will be paid to the person whose name appears on the Registration
Books as the Owner thereof as of the fifteenth calendar day of the month immediately
preceding such Interest Payment Date (a "record Date") immediately preceding each such
Interest Payment Date. Such interest will be paid by check mailed on each Interest Payment
Date by first-class mail, postage prepaid., to the Owner at the address of such owner as it
appears on the Registration Books as of the preceding Record Date, or, upon written request
received by the Trustee prior any Record Date, of an owner of at least $1,000,000 in aggregate
principal amount of Bonds by wire transfer in immediately available funds to an account within
the continental United States designated by such owner. While the Bonds are held in the book-
entry only system of DTC, all such payments will be made to Cede & Co., as the registered
owner of the Bands. Principal of and the redemption premium (if any) on the Bonds are
payable in lawful money of the United States of America upon surrender of the Bonds at
maturity or earlier redemption at the corporate trust office of the Trustee indicated in the
Indenture.
Optional Redemption
The Bonds maturing on or before August 1, ,are not subject to optional redemption
prior to their respective maturity dates, The Bonds maturing on or after August 1, ____ , are
subject to redemption prior to their respective maturity dates, as a whole, or in part (among
maturities as determined by the Authority such that the principal and interest due on the Bonds
which remain Outstanding following such redemption are equal in total amount on each Interest
Payment Date to the remaining principal and interest due on each such date on the Loans
funded from the Bonds which remain Outstanding following the optional redemption of the
portion of the Loans being optionally prepaid,and by lot within a maturity), on any date on or
after August 1, from any optional prepayment of the Loans or any other source of
available funds,at the following respective redemption prices (expressed as percentages of the
principal amount of the Bonds to be redeemed), plus accrued interest thereon to the date of
redemption:
Redemption Dates Redemption Prices
August 1, through July 31, 102%
August 1, through July 31, 101
August 1, and thereafter 100
6
Mandatary Redemption From Sinking Find Payments
The Bonds maturing on August 1, 20® (the "20— Term Bonds") are also subject to
mandatory redemption prior to their stated maturity, in part by lot, from payments made by
the Authority into the Principal Account, on each August 1 on or after August 1, 20® at the
principal amount thereof and accrued interest thereon to the date fixed for redemption., without
premium,according to the following table:
Bonds Maturing Auggst 1,20
Mandatory
Redemption Date Principal Amount
Au Redeemed
(To conte]
The Bonds maturing on August 1, 20— (the "20— Term Ponds") are also subject to
mandatory redemption prior to their stated maturity, in part by lot, from payments made by
the Authority into the Principal Account, on each August 1 on or after August 1, 20_ at the
principal amount thereof and accrued interest thereon to the date fixed for redemption, without
premium,according to the following table:
Bonds Maturing August 1,20
Mandatory
Redemption Date Principal Amount
(August j.) Redeemed
[To come]
The Bonds maturing on August 1, 20— (the "20m,,,, Term. Bonds") are also subject to
mandatory redemption prior to their stated maturity, in part by lot, from payments made by
the Authority into the Principal Account, on each August 1 on or after August 1, 20._..., at the
principal amount thereof and accrued interest thereon to the date fixed for redemption, without
premium,according to the following table:
Bonds Maturing August 1,20
Mandatory
Redemption Date Principal Amount'
Auggst 1 Redeemed
[To come]
Whenever provision is made in the Indenture for the redemption of less than all of the
Bonds of any maturity,the Trustee will select the Bonds to be redeemed from all Bonds of such
maturity not previously called for redemption,by lot in any manner which the Trustee in its sole
discretion deems appropriate and fair. For purposes of such selection, all Bonds will be
deemed to be comprised of separate $5,000 portions and such portions win be treated as
separate Bonds which may be separately redeemed.
In lieu of redemption of Term Bonds on August 1 in any year, all or a portion of such
Term Bonds may be purchased by the Agency and tendered to the Trustee for cancellation not
later than the preceding June 15. If some but not all of such Term Bonds have been redeemed,
the total amount of all future sinking fund payments will be reduced by the aggregate principal
amount of such Term Bonds so redeemed,to be allocated among such sinking fund payments on
a pro rata basis at the written direction of the Authority.
General Redemption Provisions
Notice of redemption. The Trustee is required to mail (by first class mail) notice of any
redemption to the respective Owners of any Bonds designated for redemption at their
respective addresses appearing on the Registration Books, and to the Securities Depositories
and to one or more Information Services,at least 30 but not more than 60 days prior to the date
fined for redemption. The redemption notice will state the date of the notice, the redemption
date,the redemption place and the redemption price and will designate the CUSIP numbers, the
Bond numbers(but only if less than all of the Outstanding Bonds are to be redeemed) and the
maturity or maturities (in the event of redemption of all of the Bonds of such maturity or
maturities in whole)of the Bonds to be redeemed.
Effect of Redemption. From and after the date fixed for redemption,if funds available for
the payment of the principal of and interest (and premium, if any) on the Bonds called for
redemption have been provided, such Bonds will cease to be entitled to any benefit under the
Indenture other than the right to receive payment of the redemption price, and no interest will
accrue from and after the redemption date.
Boole-Entry Only System
The information in this section concerning DTC and DTC's book-entry system has been
obtained from sources that the Authority believes to be reliable, but the Authority takes no responsibility
for the accuracy thereof.
The Depository Trust Company ("DTC"), New York, New York, will act as securities
depository for the Bonds. The Bonds will be issued as fully registered bonds registered in the
name of Cede &Co. (DTC's partnership nominee). One fully registered Bondwill be issued for
each maturity of the Bonds,each in the aggregate principal amount of such maturity,and will be
deposited with DTC.
DTC is a limited purpose trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking Law, a member of the
Federal Reserve System,a"clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a clearing Authority registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934. DTC holds securities that its participants
(Participants) deposit with DTC. DTC also facilitates the settlement among Participants of
securities transactions, such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating the need for
physical movement of securities certificates. Direct Participants include securities brokers and
dealers,banks,trust companies,clearing corporations and certain other organizations. DTC is
owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange,Inc.and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others such as securities brokers and dealers, banks, and
trust companies that clear through or maintain a custodial relationship with a Direct
Participant,either directly or indirectly ("Indirect Participants"). The Rules applicable to DTC
and its participants are on file with the Securities and Exchange Commission.
8
Purchases of Bands under the DTC system must be made by or through Direct
Participants, which will receive a credit for the Bonds on DTC's records. The ownership
interest of each actual purchaser of each Bond ("Beneficial towner"')is in turn to be recorded on
the Direct and Indirect Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchase,but Beneficial Owners are expected to receive written
confirmations providing details of the transaction, as well as periodic statements of their
holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered
into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by
entries made on the books of Participants acting on behalf of Beneficial Owners, Beneficial
Owners will not receive bonds representing their ownership interests in Bonds, except in the
event that use of the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Participants with DTC are
registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Bonds with
DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership.
DTC has no knowledge of the actual Beneficial Owners of the Bonds,DTC's records reflect only
the identity of the Direct Participants to whose accounts such Bonds are credited,which may or
may not be the Beneficial Owners. The Participants will remain responsible for keeping account
of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by
Direct Participants to Indirect Participants, and by Direct Participants and Indirect
Participants to Beneficial Owners will be governed by arrangements among them, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the Bonds within a
maturity are being redeemed,DTC's practice is to determine by lot the amount of the interest of
each Direct Participant in such maturity to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to Bonds. Linder its
usual procedures,DTC mails an Omnibus Proxy to the Authority as soon as possible after the
record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those
Direct Participants to whose accounts the Bonds are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
Principal and interest payments on the Bonds will be made to DTC. DTC's practice is
to credit Direct Participants' accounts on the payable date in accordance with their respective
holdings shown on DTC"s records unless DTC has reason to believe that it will not receive
payment on the payable date. Payments by Participants to Beneficial Owners will be governed
by standing instructions and customary practices, as is the case with securities held for the
accounts of customers in bearer form or registered in street name, and will be the responsibility
of such Participant and not of DTC, the Trustee, or the Authority, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of principal and interest
to DTC is the responsibility of the Authority or the Trustee, disbursement of such payments to
Direct Participants shall be the responsibility of DTC, and disbursement of such payments to
the Beneficial Owners shall be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with respect to the
Bonds at any time by giving reasonable notice to the Authority or the Trustee. Under such
circumstances, in the event that a successor securities depository is not obtained, Bonds are
required to be printed and delivered.
9
The .Authority may decide to discontinue use of the system of book-entry transfers
through DTC (or a successor securities depository). In that event, Bonds will be printed and
delivered.
In the event that the hook-entry only system for the Bonds, or a portion of the Bonds, is
discontinued,Bond certificates in fully registered form will be delivered to,and registered in the
names of, the DTC Participants or such, other persons as such DTC Participants may specify
(which may be the Indirect DTC Participants or Beneficial Owners), in ;authorized
denominations. The ownership of the Bonds so delivered (and any Bonds thereafter delivered
upon a transfer or exchange)shall be registered in registration books to be kept by the Trustee at
its corporate trust office, and the Authority and the Trustee shall be entitled to treat the
registered owners of such Bonds, as their names appear in such registration books as of the
appropriate dates,as the owners thereof for all purposes described herein and in the Indenture.
Debt Service Schedule
Scheduled debt service on the Bonds, without regard to any optional redemption, is
shown in the following table.
TABLE 1
COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY
(Pleasant Hill BART,North Richmond,lay Poirot,Rodeo and
Oakley Redevelopment Project Areas)
Debt Service Schedule
Bond Year
Ending
rincipal.
[to come]
10
THE FINANCING PLAN
General
The Authority will use the proceeds of the Bonds to (i) finance acquisition and
construction by the .Authority of certain public capital improvements in the County and (ii)
make five Leans to the Agency. The Agency will apply the proceeds of the Loans to (A) pay
the costs of issuing the Bonds, (B) establish five reserve funds with respect to each Loan
Agreement,(C) finance certain redevelopment activities of the Agency in Project Areas and (D)
provide for the prepayment of certain outstanding obligations of the Agency.
Estimated Sources and Uses of Funds
On the date of issuance of the Bonds,pursuant to the Indenture, the Bond proceeds will
be deposited into (i)the Program Fund for payment by the Authority of the costs of acquisition
and construction by the Authority of certain public capital improvements and (ii) the Loan
.Fund, which will, then be disbursed to the five Loan Disbursement Funds created under the
Loan Agreements. The Loan Agreements provide for deposits into an Escrow Fund and a
Costs of Issuance Fund and into separate Redevelopment Funds and Reserve Funds. The
anticipated sources and ultimate uses of funds relating to the Bonds are as follows:
West
Pleasant North Pittsburg/
Sources of Funds: Bili PART Richmond Bav Point Rodeo Oakley Totals
Principal Amount of the Bonds
Less: Oil g'nal Issue Discount
Less: Underwriter`s Discount
Total Sources
Uses of Funds:
Costs of Issuance Fund(1)
am Fund(2)
P
R�evelopment ands(2)
Refundin Escrow(3)
Reserve Funds(4)
Low/, .Income Housing
Accounts
Total Uses
(1) Includes fees and expenses of the Trustee/Escrow Bank,Bond Counsel and Disclosure Counsel,printing costs, rating
agency fees and other related costs.
(2) See"Financing of capital Projects"below.
(3) See"Prepayment of Certain Agency obligations"below.
(4) In an amount equal to the initial Reserve Requirement for each of the Loans.See"SECURITY FOR THE BONDS-Reserve
Funds"below.
Il
Financing of Capital Projects
Certain proceeds of the Bonds will be used (i) to finance acquisition and construction by
the Authority of certain public capital improvements in the County and (ii) to provide the
Agency with Loan proceeds to finance certain redevelopment projects in the Project Area.
None of the improvements financed with proceeds of the Bonds will provide security for the
Bonds.
Agency Redevelopment Projects. The Agency will use certain proceeds of the Loans to
finance certain redevelopment projects. The Agency expects these redevelopment projects will
include the following,among others:
Pleasant Hill DART Project Area
• Public area improvements, including pedestrian/bicycle projects, development of
greenspace,tree planting and improvement of public facilities
• BART property improvements, including construction of a parking garage and a
conference center
• Drainage projects
North Richmond Project Area.
• road and infrastructure improvements, including storm drains, lighting, median
installation
• Economic development projects
® Affordable housing projects
Clakley Protect Area.
• Road and infrastructure improvements
• Community facilities
• Economic development projects
31est Pittsbur Bao Point Project Area.
• Road and infrastructure improvements
• Mixed use development project
+ Land acquisition in marina/waterfront and light industrial areas
Rodeo Project Ares.
$ Road and infrastructure improvements
• Affordable housing projects
• Park facility projects
Authority Public Capital Improvements. A portion of the proceeds of the Bonds will be
deposited by the Authority into the Program Fund and will be used to finance acquisition and
construction by the Authority of certain public capital improvements in the County. The
Authority expects these public capital improvements will include the following.
[to come]
12
Prepayment of Certain Agency Obligations
The 1992 Bonds and the 1992 Loans. The Authority has previously issued its $29,315,000
1992 Tax Allocation Revenue Bonds, Series A (Pleasant Hill, North Richmond, West Pittsburg,
and Oakley Redevelopment Project Areas) (the "1992. Bonds""), the proceeds of which were
used to fund four loans (the "1992. Loam") pursuant to four loan agreements (the "1992 Loan.
Agreements") withh respect to the Agency's Pleasant Hill BART, North Richmond, Test
Pittsburg/Bay Point,and Oakley Redevelopment Project Areas.
The 1995 North Richmond Bonds and Loan. In 1995, the Authority issued its $1,645,000
County of Contra Costa Public Financing Authority 1995 Tax Allocation Revenue Bonds, Series
A (forth Richmond Project Area) (the "1995 North Richmond Bonds'"), the proceeds of which
were used to fund a loan (the "1995 North Richmond Loan"') pursuant to the 1992 North
Richmond Loan Agreement dated as of May 1, 1992, as supplemented by a first supplement
thereto, dated as of June 1, 1995 (the "'North Richmond First Supplemental Loan Agreement"),
with respect to the Agency's North Richmond Project Area.
The 1995 West Pittsburg/Bay .Point Bonds and .Loan. In 1995, the Authority issued its
$2,735,000 1995 Tax Allocation Revenue Bonds, Series B (Bay Point Redevelopment Project),
dated December 1, 1995 (the "1995 West Pittsburg/Bay Point Bonds"), the proceeds of which
were used to fund a loan (the "1995 West Pittsburg/Bay Point Loan") pursuant to the 1992
West Pittsburg Loan Agreement, as supplemented by a first supplement thereto, dated as of
December 1, 1995, with respect to the Agency"s Bay Point Redevelopment Project Area
(formerly known as the West Pittsburg Redevelopment Project Area).
Refunding.Platt. The Agency will use certain proceeds of the Loans for the Pleasant Hill
BART,North Richmond, West Pittsburg/Bay Point and Oakley Project Areas to prepay all or
portions of certain 1992 Loans (the "'Refunded 1992 Loans"") and, as a result, to provide for the
refunding of a portion of the 1992 Bonds (the "'Refunded 1992 Bonds"):
PPleasant Hill_BARTProject Area. A portion of the Pleasant Hill BART Loan
proceeds will be used to prepay on an advance basis a portion of the 1992 Pleasant Hill
BART Loan. The Agency's pledge of Tax Revenues to its obligations under the Pleasant
Hill BART Loam Agreement will be on a parity with the Agency's pledge of Tax
Revenues to its obligation to repay the portion of the 1992 Pleasant Hill BART Loan
that will remain outstanding.
Nord Richmond ProjectArea.The North Richmond Loan will be :trade pursuant
to a second supplement to the 1992 North Richmond Loan Agreement. A portion of the
net proceeds of the North Richmond Loan will be used to prepay on an advance basis
the 1992 North Richmond Loan in full. Because the 1995 North Richmond Loan will not
be prepaid, the Agency"s pledge of Tax Revenues to its obligations under the North
Richmond Loan Agreement will be on a parity with the Agency's pledge of Tax Revenues
to its obligation to repay the 1995 North Richmond Loan
Yet PittsburgZBay Point Project Area. The West Pittsburg/Bay Point Loan will
be made pursuant to a second supplement to the 1992 West Pittsburg/Bay Point Loan
Agreement. A portion of the net proceeds of the West Pittsburg/Bay Point Loan will be
used to prepay on an advance basis the 1992 West Pittsburg/Bay Point Loan in full.
Because the 1995 West Pittsburg/Bay Point Loan will not be prepaid, the Agency's
pledge of Tax Revenues to its obligations under the West Pittsburg/Bay Point Loan
Agreement will be on a parity with the Agency's pledge of Tax Revenues to its obligation
to repay the 1995 West Pittsburg/Bay Point Loan.
13
Qaiky Pro--Et Area. The net proceeds of the Oakley Lean will be used to
prepay on an advance basis the 1992 Oakley Loan in full.
The portion of proceeds of the Loans described above,together with certain funds made
available through the prepayment of the refunded 1992 Loans, will be deposited in trust with
U.S. Bank `gust National Association, as escrow bank (the "Escrow Bank"), pursuant to an
Escrow Deposit and Trust Agreement, dated as of March 1, 1999,by and among the Authority,
the Agency and the Escrow Bank (the "Escrow Agreement"). The funds deposited with the
Escrow Bank will be applied to the purchase of direct obligations of the United States of
America (the "Federal Securities") and deposited into a separate escrow for the 1492 Refunded
Loans (the "Escrow Fund"). The total amount of Federal Securities and uninvested moneys
deposited in the Escrow Fund will be applied by the Escrow Bank for the sole purpose of (i)
paying the principal of and interest on the refunded 1992 Loans and the Refunded 1992 Bonds
as the same shall become due and payable to and including August 1, 2002, and (ii) prepaying
the remaining amounts due on such portion of the refunded 1992 Loans and redeem all
outstanding Refunded Bonds in full on August 1, 2002, at the price of 102 percent of the
principal amount thereof, plus accrued interest. See "VERIFICATION OF MATHEMATICAL
ACCURACY"'herein.
I"Veither the.Federal Securities deposited in the Escrow Fund nor interest earnings thereon will be
available to pay principal of and interest on the.Bonds.
14
SECURITY FOR THE BONDS
General
The Bonds are secured by a first lien can and pledge by the Authority under the Indenture
of all of the"Revenues",which team is defined to include(i)all amounts payable by the Agency
to the Authority pursuant to the Loan Agreements,(ii)all moneys deposited and held from time
to time by the Trustee in the funds and accounts established under the Indenture, other than
certain amounts in respect of administrative fees and indemnities and amounts payable to the
Federal government for rebate purpose;and(c)income and gains with respect to the investment
of amounts on deposit in the funds and accounts established under the Indenture, other than
the Rebate Account and the Costs of Issuance Fund.
As security for its obligation to make Loan payments to the Authority, the Agency has
made a pledge in each Loan Agreement of Tax Revenues from the related Project Area (see
"'Tax Revenues"below).The Tax Revenues from each Project Area represent amounts allocated
from the increased tax revenues to the Agency based on an increase in taxable valuation over
the base year valuation property tax roll on the property within such Project .Area. The Agency's
pledge of Tax Revenues under the Pleasant Hill BART Loan Agreement will be on a parity with its
pledge of Tax Revenues to repayment of the portion of the 1992 Pleasant Hill BART .Loan that will
remain outstanding. The Agency's pledge of Tax Revenues under the West Pittsburg/Bay Point Loan
Agreement will be on a parity with its pledge of Tax Revenues to repayment of the 1995 West
Pittsburg/Bay Point Loan, which will not be prepaid with proceeds of the Bonds. The Agency's pledge
of Tax Revenues under the North Richmond Loan Agreement will be on a parity with its pledge of Tax
Revenues to repayment of the 1995 North Richmond Loan, which will not be prepaid with proceeds of
the Bonds (See "'Parity Obligations" below).
Failure by the Agency to meet its obligations under a Loan Agreement may result in
insufficient Revenues being available for the Authority to pay the principal of, premium (if any)
and interest on the Bonds. The Indenture provides that any amounts recovered by the Trustee
as the result of its exercise of remedies following an event of default will be used (i) to pay
interest on the Bonds then due on a pro rata basis, (ii) to pay principal on the Bonds then due
and (iii)to pay overdue installments of principal and interest on a pro rata basis, in that order.
Except to the limited extent described in "SECURITY FOR THE BONDS — Limited Cross-
Collateralization" herein, Tax Revenues generated in one Project Area may not be used to matte
payments due under a Loan Agreement relating to another Project Area. See also "`APPENDIX A —
Summary of Certain Provisions of the Principal Legal Documents."
THE BONDS ARE NOT A DEBT OF THE COUNTY, THE AGENCY OR THE STATE
OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS (EXCEPT THE
AUTHORITY), AND NONE OF THE COUNTY, THE AGENCY, THE STATE OF
CALIFORNIA OR ANY OF TI'S POLITICAL SUBDIVISIONS (EXCEPT THE AUTHORITY) IS
LIABLE THEREFOR,NOR IN ANY EVENT WILL THE BONDS BE PAYABLE OUT OF ANY
FUNDS OR PROPERTIES OTHER THAN THOSE OF THE AUTHORITY SPECIFICALLY
PLEDGED THEREFOR UNDER THE INDENTURE. THE BONDS DO.NOT CONSTITUTE
AN INDEBTEDNESS WITHIN THE MEANING OF ANY CONST I UI ONAL OR
STATUTORY DEBT LIMIT OR RESTRICTION. THE AUTHORITY HAS NO TAXING
POWER.
15
Loan.Agreements
The Authority and the Agency have entered into the following loan agreements, each
dated as of March 1, 1999 between the Agency and the Authority (the"Loan Agreements"):
(i) the Oakley Loan Agreement;
(ii) the Rodeo Loan Agreement,
(iii) the North Richmond .Loan Agreement: a "Second Supplement to North Richmond
Loan Agreement", which supplements the North RichmondLoan Agreement,
dated as of May 1, 1992, as supplemented by the First Supplement to Loan
Agreement, dated as of June 1, 1995;
(iv) the Pleasant Hill BART Loan Agreement": a "First Supplement to .Pleasant Hill
Loan Agreement," which supplements the Pleasant Hill Loan Agreement, dated
as of May 1, 1992; and
(v) the West PittsburglBay Point Loan Agreement: a "Second Supplement to Nest
Pittsburg Loan Agreement" , which supplements the West Pittsburg Loan
Agreement,dated as of May 1, 1992, as supplemented by the First Supplement
to Loan Agreement, dated as of December 1, 1995.
In the Loan.Agreements,the Agency covenants to punctually pay or cause to be paid the
principal of and interest and prepayment premium (if any) on the Loans in strict conformity
with the terms of the Loan Agreements, and to faithfully observe and perform all of the
conditions,covenants and requirements of the Loan Agreements, The Agency .further covenants
to keep, or cause to be kept, proper books of record and accounts, separate from all other
records and accounts of the Agency and the County,in which complete and correct entries shall
be made of all transactions relating to the Redevelopment Project,the Tax Revenues, the Special
Funds,the Low and Moderate Housing Fund and the Redevelopment Fund,as applicable.
THE AGENCY'S OBLIGATION TO REPAY THE LOANS PURSUANT TO THE LOAN
AGREEMENTS IS NOT A DEBT OF THE COUNTY,THE STATE OF CALIFORNIA OR ANY
OF ITS POLITICAL SUBDIVISIONS (EXCEPT THE AGENCY), AND NEITHER THE
COUNTY, THE STATE OF CALIFORNIA NOR ANY OF ITS POLITICAL SUBDIVISIONS
(EXCEPT THE AGENCY) IS LIABLE THEREFOR.THE AGENCY'S OBLIGATION TO REPAY
THE LOANS PURSUANT TO THE LOAN AGREEMENTS CONSTrrUTES AN
INDEBTEDNESS .OF THE AGENCY PAYABLE SOLELY FROM THE FUNDS AND
PROPERTIES OF THE AGENCY SPECIFICALLY PLEDGED THEREFOR UNDER THE
LOAN AGREEMENTS.
Parity Obligations
Parity Nature of Existing Obligations. As described above, the Agency's pledge of Tax
Revenues to repayment of the Loans is on a parity with the Agency's pledge of Tax Revenues
with respect to the following obligations:
Pleasant Mill BART.Project Area. The Agency's pledge of Tax Revenues under the
Pleasant Hill BART Loan.Agreement will be on a parity with its pledge of Tax Revenues
to repayment of the portion of the 1992 Pleasant Hill BART Loan that will remain
outstanding.
West Pittsburg/Bay Point Project Area:The Agency's pledge of Tax Revenues under
the West Pittsburg/Bay Point Loam Agreement will be on a parity with its pledge of Tax
16
Revenues to repayment of the 1995 West Pittsburg/Bay Point Loan, which will not be
prepaid with proceeds of the Bonds.
Forth Richmond Project Area: The Agency°s pledge of Tax Revenues under the
:Forth Richmond Loan.Agreement will be on a parity with its pledge of Tax Revenues to
repayment of the 1995 forth Richmond Loan, which will not be prepaid with proceeds
of the Bonds.
Additional Parity Debt. In addition,each Loan Agreement permits the Agency at any time
to issue any loam, bonds, notes, advances or indebtedness payable from Tax Revenues on a
parity with the applicable Loan ("Parity Debt") to finance the applicable Redevelopment
Project,upon satisfaction of certain conditions contained in the Loan Agreements, including the
following.
(A) No Event of Default (as defined in the Loan Agreement) shall have occurred
and be continuing, and the Agency shall otherwise be in compliance with all covenants
set forth in the Loam Agreement.
(B) The Tax Revenues for the thea current Fiscal Year, as set .forth in a Written
Certificate of the Agency,based on assessed valuation, of property in.the Project Area
as evidenced in the written records of the County, plus at the option of the Agency the
Additional Revenues, shall be at least equal to one hundred twenty percent (120%) of
Maximum Annual Debt Service. "Additional Revenues" is defined in the Loam
Agreements as the amount of Tax Revenues which are estimated to be received by the
Agency within the Fiscal.Year following the Fiscal Year in which such calculation is made
as a result of increases in the assessed valuation of taxable property in the Project Area
due to transfer of ownership or any other interest in real property which has been
recorded but which is not then reflected on the tax rolls.
(C) The issuance of such Parity Debt shall not cause the Agency to exceed any
applicable "Plan Limitations" (defined in the Loan Agreements as the limitations
contained or incorporated in the applicable redevelopment plan on (a) aggregate
principal amount of indebtedness payable from Tax Revenues which may be
outstandinj at any time, (b) the aggregate amount of taxes which may be divided and
allocated to the Agency pursuant to the Redevelopment Flan and (c) the period of time
for establishing or repaying indebtedness payable from Tax Revenues). See the
subsections entitled"Redevelopment Place limitations"in each of the sections relating to
the various Project Areas. Without limiting the generality of the foregoing, the Agency
shall not issue any Parity Debt h-t the event and to the extent that either (a) the amount
of Maximum Annual Debt Service in any Bond Year following such.issuance exceeds the
aggregate amount of Tax Revenues which are eligible under the Redevelopment Plan to
be allocated to the Agency in any Fiscal.Year,or(b)the aggregate amount of debt service
on all outstanding obligations of the Agency, including such Parity Debt, exceeds the
aggregate amount of Tax Revenues which are eligible under the Redevelopment Plan to
be allocated and paid to the Agency during the period while such outstanding
obligations remain outstanding, or (c) the aggregate principal amount of all outstanding
obligations of the Agency,including such parity Debt,exceeds any applicable limit in the
Redevelopment flan on the aggregate principal amount of indebtedness which. the
Agency is permitted to have outstanding at any one time.
The North Richmond First Supplemental Loan Agreement sets forth certain additional
parity debt restrictions applicable only to the North Richmond Loan:
(a) For purposes of calculating Tax Revenues:
17
(i) such Tax Revenues shall be calculated on the basis of a tax rate of
$1.00 per $100 of assessed value; and
(ii) the amount of such Tax Revenues shall be the amount received in
the most recent Fiscal Year (which may be the current Fiscal Year) for which
records are available from the County establishing the assessed valuations of
property in the North Richmond Project Area; provided, however, that if at the
time such calculation is made,the Agency is party to a tax-sharing agreement or
arrangement with respect to Tax Revenues which is not subordinate to the 1995
North Richmond Loan and the effect of such agreement or arrangement would be
to reduce the amount of Tax Revenues payable to the Agency in any of the
succeeding five (5) Fiscal Years if gross tax increment revenues were to remain
constant,the amount of Tax Revenues shall be reduced by the greatest projected
reduction in such five (5)year period.
(b) In the event that the Agency has actual knowledge that any appeals are
then pending which seek a reduction in the assessed valuation of property within the
North Richmond Project Area, then for the purposes of calculating Tax Revenues, such
Tax Revenues shall be reduced by one-half of the amount of the requested reductions as
set forth in such.appeals.
(c) Additional Revenues may be taken into account in the calculation of Tax
Revenues, provided that the amount of Tax Revenues for the then current Fiscal Year
(based on assessed valuations set forth in the written records of the County) is at least
equal to one hundred five percent (105%) of Maximum Annual Debt Service on the
Loan, the 1995 :North Richmond Loan and any Parity Debt which will be Outstanding
following the issuance of such Parity Debt.
Each Loan Agreement provides that,in addition to the Loan and any Parity Debt, from
time to time the Agency may issue or incur Subordinate Debt in a principal amount determined
by the Agency, provided that the issuance of Subordinate Debt may not cause the Agency to
exceed any applicable Plan Limitations (as defined above).
See"APPENDIX A-Summary of Certain Provisions of the Principal Legal Documents"
for a more complete description of the conditions which must be satisfied for the issuance of
Parity Debt. See "THE AGENCY - Agency Indebtedness" for a discussion of currently
outstanding parity debt of the Project Areas.
Revenue Fund
All of the Agency's Loan repayments will be deposited into the Revenue Fund, which
will be held by the Trustee pursuant to the Indenture. On or before each Interest Payment Date,
the Trustee will transfer the following amounts into the following accounts in the specified order
of priority:
Interest Account. Can or before each Interest Payment Dater the Trustee will
deposit into the Interest Account an amount required to cause the aggregate amount on
deposit in the Interest Account to equal the amount of interest becoming due and
payable on such date on all Outstanding Bonds. All amounts on deposit in the Interest
Account on any Interest Payment Date, to the extent not required to pay any interest
then due and payable on the Bonds, will be transferred to the Agency for any lawful
purposes of the Agency.
1s
Principal account. On or before each date on which the principal. of the Bonds is
payable,the Trustee will deposit into the Principal Account an amount rewired to cause
the aggregate amount on deposit in the Principal Account to equal the, aggregate amount
of principal coming due and payable on such date on the Bonds,or the redemption price
of the Bonds(consisting of the principal amount thereof and any applicable redemption
premiums) required to be redeemed on such date. All amounts on deposit in the
Principal Account on each August 2, to the extent not required to pay the principal of
any Outstanding Bonds then due and payable,will be transferred to the Agency for any
lawful purposes of the Agency.
Surplus. In the event that any amounts remain on deposit in the Revenue Fund on
any Interest Payment Date after the transfers required to pay principal of and interest
on the Bonds, the Trustee will transfer such amount to the Agency for any lawful
purposes of the Agency.
Tax Revenues
Each Loan Agreement defines "Tax Revenues" to be all taxes annually allocated to the
Agency with respect to the applicable Project Area following the date of issuance of the Bonds
pursuant to Article 6 of Chapter 6 (commencing with Section 33670) of the Redevelopment Law
and Section. 16 of Article XVI of the Constitution of the State and as provided in the
Redevelopment Plans, including (a) all payments, subventions and. reimbursements (if any) to
the Agency specifically attributable to ad valorem taxes lost by reason of tax exemptions and
tax rate limitations, and (b) all amounts of such taxes required to be deposited into the Low
and Moderate Income Housing Fund of the Agency in any Fiscal Year pursuant to Section
33334.3 of the Redevelopment Law, to the extent permitted to be applied to the payment of
principal, interest and premium (if any) with respect to the Loan and any Parity Debt; but
excluding (w) amounts of such taxes required to be deposited into the Low and Moderate
Income Housing Fund of the Agency in any Fiscal Year pursuant to Section 33334.3 of the
Redevelopment Law, to the extent not permitted to be applied to the payment of principal,
interest and premium (if any)with respect to the Loam and/or any Parity Debt, (y) all amounts
of such takes required to be paid by the Agency pursuant to the Agency's agreements to share
tax increment revenues with other taxing agencies(except and to the extent that any amounts so
payable are payable on a basis subordinate to the payment of the Loam and/or any Parity
Debt,as applicable),and (z) the Business Inventory Tax Subvention.
As of the date hereof, the Agency deposits 20 percent of tax increment revenues
annually allocated to the Agency(net of amounts retained by the County as reimbursement for
collection and reimbursement costs) into a Low and Moderate Income Housing Account
established for each Project Area. See "Limited Cross-Collateralization." below for a discussion
of the circumstances in which moneys on deposit in the Low and Moderate Income Housing
Fund for each of the Project Areas except for the Pleasant Hill BART Project Area and the
Oakley Project Area may be used to repay the Loan for another Project Area (other than
Pleasant Hill BART Project Area and the Oakley Project Area). Because no portion of the
Pleasant Hill BART Loan or the Oakley Loan will be considered to have been used for low and
moderate income housing purposes, moneys on deposit in the Low and Moderate Income
Housing Accounts for the Pleasant Hill BART Project Area and the Oakley Project Area are not
available to repay the Pleasant Hill.BART Loan or the Oakley Loan, respectively, to repay any
other Loan or to pay principal and interest on the Bonds.
The Agency has no power to levy and collect property taxes, and ,any property tax
limitation, legislative measure, voter initiative or provisions of additional'sources of income to
taxing agencies having the effect of reducing the property tax rate, could reduce the amount of
Tax Revenues available to repay the Loans and, thus, could reduce the Revenues that would
19
otherwise be available to pay debt service on the Bonds. Likewise, broadened property tax
exemptions could have a similar effect. See "TUSK FACTORS" and "LIMITATIONS ON TAX
REVENUES AND POSSIBLE SPENDING LIMITATIONS"herein..
Tax Allocation Financing
The Redevelopment Law provides a means for financing redevelopment projects based
upon an allocation of taxes collected within a project area. The taxable valuation of a project
area last equalized prior to adoption of the redevelopment plan,or base roll,is established and,
except for any period during which the taxable valuation drops below the blase year level, the
taxing agencies thereafter receive the taxes produced by the levy of the.then current tax rate
upon the base roll. Taxes collected upon any increase in taxable valuation over the base roll
(other than the annual increase in the base year assessed value for inflation of up to 2 percent
which may be allocated to the taxing agencies) (commonly known as "tax increment revenues")
are allocated to a redevelopment agency and may be pledged by a redevelopment agency to the
repayment of any indebtedness incurred in financing or refinancing a redevelopment project.
Redevelopment agencies themselves have no authority to levy property taxes and must look
specifically to the allocation of tax increment revenues.
Allocation.of Taxes
As provided in the Redevelopment Plans,and pursuant to Article 6 of Chapter 6 of the
Redevelopment Law (commencing with Section 33670 of the California health and Safety
Code) and Section 16 of Article XVI of the Constitution of the State of California, taxes levied
upon taxable property in the Project Areas each year by or for the benefit of the State and any
city and county, district or other public corporation (herein collectively referred to as "taxing
agencies")for each fiscal year beginning after the effective date of the ordinances approving the
Redevelopment Plans,are divided as follows:
1. To other.taxing ageny : That portion of the taxes which would be produced by the
rate upon which the tax is levied each year by or for each of the taxing agencies upon the total
surn of the assessed value of the taxable property in each Project Area as shown upon the
assessment roll used in connection with the taxation of such property by such taxing agency last
equalized prior to the effective date of the ordinances which approved the redevelopment
Plans (the "Base Year Amount")shall be allocated to and when collected shall be paid into the
funds of the respective taxing agencies as taxes by or for the taxing agencies on all other
property are paid; and
2. To the Agency: That portion of the levied taxes each year in excess of the Base Year
Amount shall be paid into a special fund of the Agency to pay the principal of and interest on
bonds, loans, moneys advanced to, or indebtedness (whether funded, refunded., assumed, or
otherwise) incurred by the Agency to finance or refinance, in whole or in part, the related
Redevelopment Project.
When all bonds, loans, advances, and indebtedness, if any, and interest thereon, have
been paid, all moneys thereafter received from taxes upon the taxable property in the Project
Area shall be paid into the funds of the respective taxing agencies as taxes on all other property
are paid. See "Tax Revenues"' and the sub-sections entitled "'Tax Sharing Agreements" in the
sections herein pertaining to each of the Project Areas.
Unitary Taxes
The Agency receives an annual allocation of unitary property taxes attributable to each
of the Project Areas. Legislation enacted in 1986 (Chapter 1457) and 1987 (Chapter (921)
20
provided for a modification of the distribution of tax revenues derived from utility property
assessed by the State Board of Equalization, other than railroads. Prior to the 1988-89 fiscal
year,property assessed by the SBE was assessed statewide and was allocated according to the
location of individual components of a utility in a tax rate area. Commencing in 1.988-89, tax
revenues derived from utility property assessed by the SBE is accumulated in a single Tax Rate
Area for the County and distributed to each taxing entity in the County in the following manner:
(1)each taxing entity will receive the same amount as in the previous year plus an increase for
inflation of up to two percent; (2) if utility tax revenues are insufficient to provide the same
amount as in the previous year, each taxing entity's share would be reduced pro-rata county
wide; and (3) an increase in revenue above two percent would be allocated in the same
proportion as the taxing entity's local secured and taxable values are to the local secured
taxable values of the County. The valuation of railroad property continues to be allocated to
individual tax rate areas.
Unitary property tax revenue received by the Agency in fiscal year 1998-99 in each of
the Project Areas is set forth below:
Prr2i2ct Area I nitary Tax Revenue
Pleasant Hill BART $42,282
North Richmond 4,500
West Pittsburg/Bay Point 11,000
Rodeo 3,000
Oakley 10,000
Reserve Funds
Pursuant to the Loan Agreements, a separate Reserve Fund will be held by the Trustee
for each of the Loans. The Reserve Funds will be held in trust for the benefit of the Authority
and the owners of the Bonds. The amount on deposit in each Reserve Fund will be maintained
at the Reserve Requirement for each respective Loan at all times prior to the payment of each
Loan in full,except as otherwise described herein,
In the event that the Agency fails to deposit with the Trustee on or before any Interest
Payment Date or date of prepayment of each Loan the full amount of interest or principal
required to be deposited pursuant to the Loan Agreements, the Trustee will withdraw from the
related Reserve Fund an amount equal to any such deficiency. In the event that the amount on
deposit in any Reserve Fund shall at any time be less than the Reserve Requirement, the Trustee
is required to promptly notify the Agency of the amount required to be deposited therein to
restore the balance to the Reserve Requirement.
In the event that the amount on deposit in the Reserve Fund on any Interest Payment
Date exceeds the Reserve Requirement, the Trustee shall withdraw from the Reserve Fund and
deposit to the Revenue Fund all amounts in excess of the Reserve Requirement, and credit such
amounts towards the deposit then required to be made by the Agency pursuant to the Loan
Agreements.
The Agency may fund all or a portion of the Reserve Requirement with one or more
Qualified Reserve Fund Credit Instruments. Upon deposit of any Qualified Reserve Fund
Credit Instrument with the Trustee, the Trustee shall pay to the Agency from amounts in the
Reserve Fund an amount equal to the principal of the Qualified.Reserve Fund Credit Instrument.
See "APPENDIX A—Summary of Certain Provisions of the Principal Legal Documents."
21
In any case where the Reserve Fund is funded with a combination of cash and a
Qualified Reserve Fund Credit Instrument, the Trustee is required to deplete all cash balances
before drawing on the Qualified Reserve Fund Credit Instrument. With regard to replenishment,
any available moneys will be used first, to reinstate the Qualified Reserve Fund Credit
Instrument and second, to replenish the cash in the Reserve Fund. In the event the Qualified
Reserve Pond Credit Instrument is drawn upon,the Agency will be required to make payment of
interest on amounts advanced under the Qualified Reserve Fund Credit Instrument after making
payments of principal of or interest on the Loan and any Parity Debt.
Moneys on deposit in the Reserve Fund with respect to one Loan are not available to make Loan
payments with respect to another Loan.
Limited Cross-Collateralization
Portions of the proceeds of the Loans (in the percentages specified below) for the
following project areas (the "Cross-Collateralized Project Areas") will be used for low and
moderate income housing purposes that benefit all of the Cross--Collateralized Project Areas:
North Richmond Project Area: approximately
Nest Pittsburg/Bay Point Project Area: approximately
.rodeo Project Area: approximately
Consequently, the Loan Agreements for the Cross-Collateralized Project Areas provide
that, if at any time there is a deficiency in the amounts required to make Loan payments after
depletion of the Reserve .Fund under one of the Cross-Collateralized Project Area Loan
Agreements, 'Pax Revenues from. the Cross-Collateralized Project Areas may be paid by the
Agency to make up such deficiency. The Loam Agreements (i) require the deficiency to be
apportioned among the Cross-Collateralized Project Areas that do not then have an insufficient
Reserve Fund and (ii) limit the amount payable from Tax Revenues in any of the Cross-
Collateralized Project Areas to an amount not to exceed the aggregate debt service on the
portion of the Loans made under the Cross-Collateralized Project Area Loans attributable to
the proceeds of such Loans deposited in the Low and Moderate income Housing Accounts of
such related Project Areas.
The Agency has concluded that,in accordance with the foregoing, a rnax-Imum aggregate
amount of approximately $ in Tax Revenues from the other two Cross--Collateralized
Project Areas could be applied to the extent available to make such payments on behalf of the
third Cross-Collateralized Project Area, if necessary. The Agency's pledgeof Tax Revenues
under the Loan Agreements for the Cross-Collateralized Project Areas for this purpose is junior
to its pledge to repayment of the Bonds and any Parity Debt, which means that in any given
Bond Year, 'Pax Revenues from a Cross-Collateralized Project Area will be available for use
towards the Agency's obligations under an unrelated Cross-Collateralized Project Area Loan
Agreement or Parity Debt only to the extent such Tax Revenues exceed the Agency's obligations
during such Bond Year under such Loan Agreement and any related Parity Debt. See
"APPENDIX A-Summary of Certain Provisions of the Principal Legal Documents".
22
THE AUTHORI`I Y
The County of Contra Costa Public Financing Authority was established pursuant to a
joint Exercise of Powers Agreement dated April 7, 1992, by and between the County and the
Agency,under the provisions of the Act. The Board of Directors of the Authority is composed
of the members of the Board of Supervisors of the County. The Authority was created for the
purpose of providing financing for public capital improvements for the County and the Agency
through the acquisition by the Authority of such public capital improvements and/or the
purchase by the Authority of local obligations within the meaning of the Act.
THE AGENCY
Authority and Personnel
The Agency is a public body corporate and politic, organized and existing under and
pursuant to the Constitution and laws of the State. The Agency was established on December
6, 1983 with adoption of Ordinance leo. 83-67 pursuant to the Law. The flue members of the
County Board of Supervisors serve as the governing body of the Agency and exercise all rights,
powers, duties and privileges of the Agency. The Agency is charged with the authority and
responsibility of redeveloping and upgrading blighted areas of the County. The Agency is a
separate public body and exercises governmental functions in planning and carrying out
redevelopment projects. The Agency can build public improvements, facilitate the development
of on-and off-site improvements for private development projects,acquire and re-sell property,
and provide services of special benefit to the Project Areas.
Members of the Agency and their term of office are shown below:
Iy1 bem r Term E—=iLres
Joe Canciamilla,Chair January, 2001
Gayle B.Uilkema,Member January, 2001
Donna Gerber,Member January, 2001
Mark DeSaulnier,Member January, 2003
John Goia,Member January, 2003
The County Administrator,under terms of a cooperative agreement between the County
and the Agency, serves as Executive Director of the Agency. The present County
Administrator, Phil Batchelor,was named to that position in 1933.
Agency Powers and Duties
The Agency is charged with the responsibility for eliminating blight through the process
of redevelopment. Generally,this process is culminated when the Agency disposes of land for
development by the private sector, but before this can be accomplished, the Agency must
complete the process of acquiring and assembling the necessary sites, relocating residents and
businesses, demolishing the deteriorated improvements, grading and preparing the sites for
purchase by developers and providing for ancillary off-site improvements.
Redevelopment in the State is carried out pursuant to the Redevelopment Law. Section
33020 of the Redevelopment Law defines redevelopment as the "planning, development,
replanning,redesign,clearance,reconstruction or rehabilitation, or any combination of these, of
23
all or part of a survey area and the provision of such residential, commercial, industrial , public
or other structures or spaces as may be appropriate or necessary in the interest of the general
welfare,including recreational and other facilities incidental or appurtenant to them".
All powers of the Agency are vested in its five members. The Agency exercises all of the
governmental functions authorized-under the Law and has, among other powers, the authority
to acquire,administer,develop and sell or lease property,including the right of eminent domain,
and the right to issue debt and expend the proceeds.
Agency Financial Statements
The Redevelopment Law requires redevelopment agencies to have an independent
financial audit conducted each.year. The financial audit is also required to include an opinion of
the Agency's compliance with laws, regulations and administrative requirements governing
activities of the Agency. The firm of Macias, Gini & Company LLP, Walnut Creek, California,
prepared a financial statement for the Agency for the fiscal year ended June 30, 1998. The firm's
examination was made in accordance with generally accepted auditing standards. The Agency
follows fund accounting principles reflecting the modified accrual basis of accounting in which
revenue is recognized when earned or otherwise becomes available, and expenditures are
recognized when. incurred. The firm reported after their examination that they noted no
instances of noncompliance for the fiscal year ended. June 30, 1998. See "APPENDIX B -
Audited Financial Statements of the Agency for Fiscal Year Ended June 30, 1998".
The Agency has not requested nor did the Agency obtain permission from Macias, Gini
& Company LLP to include the audited financial statements as an appendix to this Official
Statement. Accordingly, Macias, Gini & Company LLP has not performed any post-audit
review of the financial condition or operations of the Agency.
Agency Indebtedness
The Agency currently has the fallowing outstanding indebtedness (see "APPENDIX B -
Audited Financial Statements of the Agency for Fiscal Year Ended June 30, 1998" hereto for
additional information relating to the payment of indebtedness of the Agency):
1992 Bonds. As described in "THE FINANCING PLANT - Prepayment of Certain
Agency Obligations," a portion of the 1992 Bonds will not be redeemed, and a corresponding
amount of the 1992 Pleasant Hill BART Loan will not be prepaid, with proceeds of the Bonds
and will be secured by a pledge of Tax Revenues of the Pleasant Hill BART Project Area on a
parity with the Pleasant Hill BART Loam.
1995 Bonds. As described in "THE FINANCING PLAN - Prepayment of Certain
Agency Obligations,"none of the 1995 North Richmond Bonds or the 1995 West Pittsburg/Bay
Point Bonds will be redeemed with proceeds of the Bonds, nor will any portion of the 1995
North Richmond Loan or the 1995 West Pittsburg/Bay Point Loan be prepaid with proceeds of
the Bonds. Consequently, the North Richmond Loan and the West Pittsburg/Bay Point Loan
will be secured by a pledge of Tax Revenues generated in the North Richmond Project Area and
the rest Pittsburg/Bay Point Project Areas, respectively, on a parity with the 1995 North
Richmond Loan and the 1995 West Pittsburg/Bay Point Loan,respectively.
24
TETE PLEASANT HILL BART IPIZOJEC17 AREA
GenerAl
General. The Pleasant Hill BART Project Area consists of approximately 125 acres.
Located in central Contra Costa County" the Pleasant Hill BART project Area lies in an area
with a high level of regional accessibility, provided by interstate 680 and the Bay Area Rapid
Transit System.(""BART"),a commuter train system that links key locations in the San Francisco
Bay Area. The focal plaint of the Pleasant Hill BART project Area is the Pleasant Hill BART
Station.
Major Developrant Activities in the Pleasant Dill BART Project Area. The Agency has been
involved in two major activities related to development within the Pleasant Hill. BART Project
Area since its inception: (i) the Agency has been a vehicle for assisting private developers in
assembling their development sites in order to permit development of the property, and (ii) the
Agency has been a vehicle for securing present and future financing of infrastructure necessary
to support the development contemplated by the Pleasant Hl BART Station Specific Plan.
Two ten.-story Class A offices, which are part of the development known. as Treat
Towers,are currently under construction in the project area.Construction of the two buildings is
substantially complete. The two office buildings, which occupy a 4.5 acre site, will include
approximately 375,000 square feet of office space as well as underground parking garages. The
projection of Tax Revenues to be generated in the pleasant Hill BART Project Area includes an
increase in assessed value in fiscal year 1999-00 as a result of this new development.
The projection of Tax Revenues does not include the following under-construction or
fully-entitled development occurring in the Pleasant Hill BART Project Area.
• BRIDGE Housing Corporation has started construction of an 87 unit multifamily
housing project. This project is exempt from property taxation.
• Holliday Development/The Martin Croup will begin construction of a 54-unit
market-rate townhouse project in June, 1399. Townhouse values are $250,000-
275,000/unit.
• Two hotels have received land use entitlements: Amerisuites (152 rooms) and
Homestead. Village (135 rooms). Construction is expected to start on Homestead
Village in June 1999 and on Amerisuites in Fall, 1999.
• Leisure Sports/Westin have entitlements .for a 175 room hotel/69,000 square foot
health club complex. The developers are in the process of securingfinancing with a
expected construction start of Fall, 1999.
Existing Land Uses. According to the 1998-99 County secured tax roll, approximately 69
percent of the land in the Pleasant Hill BART Project Area is used for commercial purposes, 30
percent for residential uses and 1 percent for other uses. To date, approximately $30 million in
infrastructure improvements and property acquisition necessary for future infrastructure
improvements have been financed in the pleasant Hill BART Project Area. These funds were
generated through Agency tax increment revenues,assessment district bonds,sped tax bonds,
private developer fees and property dedications. Major improvements to Treat Boulevard, Oak
Road, Buskirk Avenue and Las juntas Way have been completed. The .Agency expects to
continue working with adjacent jurisdictions through the mechanism of the Pleasant Hill BART
Station Steering Committee to implement additional infrastructure improvements.
25
Possible Annexation. The Pleasant Hill BART Project Area is in the sphere of influence of
the City of Walnut geek. Annexation of all or a portion of the Pleasant Hill BART Project
Area into the City of Walnut is also being considered. The Agency does not believe that partial
annexation or total annexation (in which case the City could assume the Agency's obligations
with respect to the Pleasant Hill BART Project Area) would adversely affect repayment of the
Pleasant Hill BART Loan.
The Pleasant Hilt BART Redevelopment Plan
The County Board of Supervisors (the "Board") adopted the Redevelopment .Plan
establishing the Pleasant Hill BART Project Area (the "Initial. Project Area"') by Ordinance No.
84-30 on July 10, 1984. At that time, the Redevelopment Plan was consistent with the County's
Pleasant Hill BART Station Area General Plan Amendment/Specific Plan that was adopted in
1983. On July 19, 1988, the Board amended the Specific Plan to change the land uses in the
area in order to promote the development of high density housing to enhance the balance of jobs
and housing opportunities in and around the Pleasant Hill BART Project Area. Accordingly,
the Redevelopment Plan was amended and restated on July 19, 1988 by Ordinance No. 88-55 in
order to conform with the amended Specific Plan. The amended Redevelopment Plan (as
amended,the ""Pleasant Hill BART Redevelopment Plan."), among other things,added territory
(the "'Amendment Area"') to the Initial Project Area. The principal goals and objectives of the
Pleasant Hill BART Redevelopment Plan are to (i) improve land use and development, (ii)
improve transportation and circulation of traffic and (iii) promote urban design which will
project a positive image and have high regional and local identity.
The Pleasant Hill BART Redevelopment Plan was further amended by Ordinance No.
94-62, adopted by the Board on December 6, 1994. The 1994 amendment amended the
Pleasant Hill BART Redevelopment Plan with respect to the time period during which the Plan
will be in effect, the time period during which the Agency may establish indebtedness and the
amount of tax increment revenues that may be allocated to the Agency. The 1994 amendment
brought the Pleasant Hill BART Redevelopment Plan into conformance with the limitations of
Section. 33333.6 of the Redevelopment Law (""AB 1290"') which went into effect on January 1,
1994. Finally,the Agency amended the Pleasant Hill BART Redevelopment Plan by Ordinance
No. 99-04 on February 23, 1999 pursuant to the provisions of Assembly Bill 1342 ("'AB 1342").
See""redevelopment Plan Limitations"below.
[Discuss amendment of Specific Plan and EIR]
Redevelopment Pian Limitations
The Pleasant Hill BART Redevelopment Plan permits the Agency to collect a cumulative
total of$125,000,000 of tax increment revenues, and to have outstanding bonded indebtedness
of up to $40,000,000 in the Pleasant Hill BART Project Area. According to the records of the
Agency,from the time of adoption of the Pleasant Hill BART Redevelopment Plan through the
end of fiscal year 1997-98, the Agency has received $20,639,679 in tax increment revenue from
the Pleasant Hill BART Project Area.
In 1993, the California Legislature enacted AB 1290. Among the changes to the
Redevelopment Law accomplished by AB 1290 was a provision which limits the period of time
for incurring and repaying loans, advances and indebtedness which are payable from tax
increment revenues. In general, a redevelopment plan may terminate not more than 40 years
following the date of original adoption, and loans, advances, and indebtedness may be repaid
during a period extending not more than 10 years following the date of termination of the
redevelopment plan. AB 1342 was passed in 1998 and became effective January 1, 1999. This
26
bill permits redevelopment agencies having plan limits shorter than those permitted by AB 1290
to amend their plans to incorporate the maximum permitted limits without complying with the
statutory amendment process.
With respect to the Pleasant Hl BART Project Area, the Board adopted Ordinance No.
94-62 on December 6, 1994 (in order to comply with AB 1290) and Ordinance No. 99-04 on
February 23, 1999 (in order to comply with AB 1342) and enacted the following time
limitations:
1. Est bLshing loans.advances and indgb nesse For the Initial Project Area:
July 10,2004;for the Amendment Area: July 19, 2008 (except for refinancing, refunding
or restructuring of existing indebtedness where the indebtedness is not increased and the
time for repayment is not extended,and certain housing obligations).
2, Effectiveness of the Pleasant Hill BART ltedevelorrma ent Plana ;duly 10,2024.
3. Eg3ent of indebtedness and receil2t-of roperty,taxes: Except for loans and
indebtedness approved or incurred prior to December 31,1.993, the Agency may not pay
indebtedness or receive property taxes after July 10,2034.
The Agency has covenanted in the Pleasant Hill BART Loam Agreement to comply with
all requirements of law to insure the allocation and payment to it of the Tax Revenues, including
without limitation the timely filing of any necessary statements of indebtedness with
appropriate officials of the County.
Tac Sharing Agreements
Pursuant to former Section 33401 of the redevelopment Law, the .agency has entered
into certain fiscal or"pass-through" agreements with respect to the Pleasant Hill BART Project
Area, described as follows.
County of Contra Costa; Consolidated Fire.Protection District. The Agency entered into a
Tax Sharing Agreement for the Pleasant Hill BART Project Area with the Consolidated Fire
Protection. District (the "Fire District") on July 19, 1988 with regard to the Amendment Area.
Pursuant to this agreement, the Fire District is to receive one hundred percent of tax increment
revenue that the Fire District would have received from the Amendment Area,without regard to
the division and allocation of tax increment revenue pursuant to Health and Safety Code
Section 33670.
Contra Costa County Mosquito Abatement District. The Agency entered into a Tax Sharing
Agreement for the Pleasant Hill BART Project Area with the Contra Costa County Mosquito
Abatement District (the "Mosquito District") dated September 20, 1988 with regard to the
Amendment Area.. The terms of this tax sharing agreement are similar to those of the Fire
District Tax Sharing Agreement, and allows the Mosquito District to receive one hundred
percent of tax increment revenue that the Mosquito District would have received from the
Amendment Area, without regard to the division and allocation of tax increment revenue
pursuant to Health and Safety Code Section 33670.
Contra Costa County Superintendent of Schools. The Agency entered into a Tax Sharing
Agreement for the Pleasant Hill. BART Project Area with the Contra Costa County
Superintendent of Schools (the "School Superintendent") dated September 20, 1988 with regard
to the Amendment Area. Pursuant to this agreement, the School Superintendent is to receive a
percentage of the amount equal to seventy-five percent of tax increment revenue that the School
Superintendent would have received from..the Amendment Area, without regard to the division
27
and allocation of tax increment revenue pursuant to Health and Safety Code Section 33670.
Such percentage is calculated by dividing the number of ""Approved Units" by the number of
"Occupied Units,", as both terms are defined in the School Superintendent Tax Sharing
Agreement. To date, approximately 100 percent of the Approved Units have been built and
occupied.
All of the above-discussed Tax Sharing Agreements provide for them subordination to
the Pleasant Hill BART Loan provided the Agency demonstrates to the affected taxing agencies
that the Agency has sufficient Tax Revenues to pay debt service on the Pleasant Hill BART
Loan and other obligations and make the payments provided by the respective tax spring
agreements. [The Agency has received subordination certificates from the Fire District, the
Mosquito Abatement District and the School Superintendent with regard to the Pleasant Hill
BART Loam.]
The above-discussed Tax Sharing Agreements also provide that the, County Auditor-
Controller may withhold such amount from the amount to be paid to the Agency, and pay such
amounts to the affected taxing agencies directly. None of the three above-discussed agreements
provide for any additional payments with regard to the Initial Area.
Section 33676 Allocations
Section 33676 of the Redevelopment Law allows taxing entities to receive additional
property taxes in a redevelopment project area above the base year revenue amount. Such
payments are based on annual increases in the real property portion of the base year value up
to the inflation limit of 2 percent. To be eligible to receive the additional 'property taxes, a
taxing entity must have adopted a resolution prior to the adoption of a redevelopment plan
(see "APPENDIX C - Fiscal Consultant Deport"). With respect to the Original Area only, the
Pleasant Hill BART Redevelopment Plan specifically permitted the type of tax sharing
contemplated by Section 33675 because Section 33676, although introduced in the State
Legislature,had not yet been adopted.
Currently, there are 39 taxing entities receiving allocations of property taxes under
Section 33676 (or the equivalent provisions of the Redevelopment Plan) in the Pleasant Hill
BART Project Area (28 in the Original Area and 11 in the Amendment Area. The projection of
tax increment revenues set forth in Table 5 herein assumes that the payments will continue to be
made to these taxing entities and that the payments will be made on a basis senior to Loan
repayment. See "APPENDIX C - Fiscal Consultant Report" and ""LIMITATIONS ON TAX
REVENUES ANTD POSSIBLE` SPENDING LIMITATIONS - Property Tax Collection
Procedure."'
Low and Moderate Income Housing
The Redevelopment Law requires redevelopment agencies to annually set aside 20
percent of all tax increment revenues into a Low and Moderate Income Housing Set-Aside Fund
(the "Low and Moderate Income Housing Fond"). The Agency has established a Low and
Moderate Income Housing .Fund and, within the Fund, established a separate Low and
Moderate Income Housing Account for each Project Area.
28
Sections 33334.2 and 33334.3 of the Redevelopment Law require redevelopment
agencies to set aside not less than 20 percent of all tax increment revenues allocated and paid
to redevelopment agencies from redevelopment project areas adopted after November 30, 1976
in the Low and Moderate Income Housing Fund to be expended for authorized love and
moderate income housing.Amounts on deposit in the Low and Moderate Income Dousing Fund
may also be applied to pay debt service on bonds,loans or advances of redevelopment agencies
to provide financing for such low and moderate income housing purposes. Linder the
Redevelopment Law, the set-aside requirement could be reduced or eliminated if the
redevelopment agency finds that (1)no need exists in the community to improve or increase the
supply of low and moderate income housing, (2) that some stated percentage less than 20
percent of the tax increment is sufficient to meet the housing need or (3) that other substantial
efforts,including the obligation of funds from certain local, state or federal sources for low and
moderate income housing, or equivalent impact are being provided for in the community. The
tax increment projections estimate .the annual housing set aside requirement of future tax
increment allocations to the Agency and are exclusive of assumed SB 2557 administrative
charges.
Moneys deposited into the Low and Moderate Income Housing Account for the Pleasant Hill
.BART project.Area are not available for repayment of the .Pleasant Hill BART Loan or to pay debt
service on the .Bonds. See "SECURITY FOR THE BONDS a Limited Cross-Collateralization"
above.
Historic Assessed Value and Tax Revenues
The following table shows, for each of the most recent five fiscal years: (i) incremental
taxable value, (ii) actual receipts, (iii) the percentage of current year collections relative to the
amount levied.,and(iv)the percentage of current year collections including supplemental taxes.
The County has elected to follow the procedures of Sections 4701 et seq. of the California
Revenue and Taxation Code, mown as the "Teeter Plan" as to general (axes entered and
collected on the secured tax roll. Therefore,property tax revenues in the Project Area reflect
levies rather than actual.collections. In addition,the County does not usuallyallocate or adjust
revenue to the Agency to reflect roll corrections which may result from successfully appealed
valuations,late assessments or corrected assessments. As a result, the Agency is not impacted
by negative adjustments.
TABLE 2
CONTRA COSTA COUNTY REDEVELOPMENT AGENCY
(Pleasant Hill BAIT Station Project Area)
Historic Incremental Values and Tax Receipts
Historical Collections
Incremental Historical Current Year Including
Fiscal Year Taxable Value Rec (1) Collections(2) Sup ementas(3)
1994-95 $219,629,653 $2,325,281 100.0% 101.4%
1995-96 252,292,628 2,675,544 100.0 107.6
1996-97 255,805,170 2,695,388 100.0 102.1
1997-98 261,886,424 2,755,591 100.0 100.9
1998-99 271,381,689 n/a n/a n/a
Includes all current taxes and redemption payments exclusive of supplementals.
21 Reflects levy to receipts ratio.
Percentage collection including supplemental taxes.
Source: Katz Hollis
29
Set forth in the table below is a summary of Pleasant Hill BART Project Area historical
assessed values for fiscal years 1994-95 through 1998-99.
TABLE 3
CONTRA COSTA COUNTY REDEVELOPMENT AGENCY
(Pleasant Hill BART Station Project Area)
Historic Assessed Values
(Base Year) 1994- ML-26 199 1297-9 8-2
Total Secured $28,413,041 $224,966,524 $242,527,477 $258,487,667 $267,247,113 $273,192,689
Total Unsecured 234.95621912 16 954.295 24.566,647 21,888,455 -_25 375,3
'Fetal Project Value $28,647,997 $246,878,797 $279,481,772 $283,054,314 $289,135,568 $298,568,063
%e Increase/Decrease -- -- 13.2% 1.3% 2.1% 3.3%
(1) Base Year is 1983-84 for the Original Area and 1987-88 for the Amended Area.
Source. Katz Hollis .
Major Taxable Property Owners
The following table lists the ten largest taxpayers within the Pleasant Hili BART Project
Area. Based on fiscal year 1998-99 locally assessed taxable valuations, the top ten taxable
property owners in the Project Area represent approximately 61.7 percent of the total Project
Area taxable value of $298,568,063.
TABLE 4
CONTRA COSTA COUNTY REDEVELOPMENT AGENCY
(Pleasant dill BART Station Project Area)
Ten Largest Taxable Property Owners for Fiscal Year 1.998-99
1998-99 %$of Total
Use/ No.of Assessed Pro ect
Assessee Com -N-me Parcel Value Value
Park Regency Partners Residential 6 $62,194,225 20.83%
Cornerstone Suburban(1) Commercial. 2 42,474,904 14.23
Walnut Creep Proerties Commercial 2 40,350,1.09 13.51
Koar-Pleasant HUNProperties rties Commercial 1 33,406,272 11.19
Hofmann,Kenneth&Martha Commercial 1 19,455,480 6.52
Pera Urban West Corp. Commercial 2 15,152,248 5.07
Airtouch Communications Unsecured 3 10,217,470 3.42
Walnut View Properties Commercial 1 6,360,000 2.18
Lincoln Property Ccs. Commercial 5 5,867,895 1.97
Cranbrook Realty Inv.Fund Commercial 1 583Q,02 Ilu
Total 24 $241,308,603 80.82%m
(1) Appeal of assessed value pending. See"Appeals of Assessed Value.f9
Source. Katz Hollis
30
Appeals of Assessed.Values
General. Pursuant to California law,property owners may apply for a reduction of their
property tax assessment by ting a written application, in the form prescribed by the State
Board of Equalization, with the appropriate county board of equalization or assessment
appeals board..
After the applicant and the assessor have presented their arguments,the Appeals Board
makes a final decision on the proper assessed value. The Appeals Board may rule in the
assessor's favor,in the applicant's favor, or the Appeals Board may set its own opinion of the
proper assessed value, which may be more or less than either the assessor's opinion or the
applicant's opinion.
Any reduction in the assessment ultimately granted applies to the year for which the
application is made and may also affect the values in subsequent years. Refunds for taxpayer
overpayment of property taxes may include refunds for overpayment of taxes in years after
that which was appealed. Current year values may also be adjusted as a result of a successful
appeal of prior year values. Any taxpayer payment of property taxes that is based on a value
that is subsequently adjusted downward will require a refund for overpayment.
Appeals for reduction in the "base year" value of an assessment, if successful, reduce
the assessment for the year in which the appeal is taken and prospectively thereafter. The base
year is determined by the completion date of new construction or the date of change of
ownership. Any base year appeal must be made within four years of the-change of ownership
or new construction date. A base year assessment appeal has significant future revenue impacts
because a reduced base year assessment will then reduce the compounded value of the property
prospectively. .Except for the 2 percent inflation factor, the value of the property cannot be
increased until a change of ownership occurs or additional improvements are added.
Section 51 of the Revenue and Taxation Code permits a reduction in the assessed value
if the full cash value of the property has been reduced by damage, destruction, depreciation,
obsolescence, removal of property or other factors causing a decline in value. Significant
reductions have taken place in some counties due to declining real estate values. Reductions
made under this code section may be initiated by the County Assessor 'or requested by the
property owner.
.After a roll reduction is granted under this section, the property is reviewed on an
annual basis to determine its full cash value and the valuation is adjusted accordingly. This
may result in further reductions or in value increases. Such increases must be in accordance
with the full cash value of the property and it may exceed the maximum annual inflationary
growth rate allowed on other properties under Article XIIIA of the State Constitution. Once the
property has regained its prior value, adjusted for inflation, it once again is subject to the
annual inflationary factor growth rate allowed under Article XIIIA. See "LIMITATIONS ON
TAX REVENUES ANIS POSSIBLE SPENDING LIMITATIONS v Article XIIIA of the California
Constitution"below.
The taxable value of unitary property :may be contested by utility companies and
railroads to the State Board of Equalization. Generally, the impact of utility appeals is on the
statewide value of a utility determined by the State Board of Equalization. As a result, the
successful appeal of a utility may not impact the taxable value of a project area but could
impact a project area's allocation of unitary property tax revenues.
Pending Appeals. There are three appeals currently pending on properties within the
Pleasant bill BART Project Area, including one by the largest assessee in the Pleasant Hill
31
BART Project Area. The aggregate original value of these three properties is $47,132,904, and
Katz Hollis has estimated the resolved value to be $42,010,454. The projection of assessed
value for fiscal year 199900 in the Pleasant Hill Project BART Area shown in Table 5 assumes
a reduction in value of$5,122,450 due to anticipated assessment appeal reductions.
Projected Tax Revenues
The tax increment revenue projections for the Pleasant Hill BART Project Area, as
prepared by Katz Hollis, are summarized below. All of the projections commence with the
reported values for Fiscal Year 1998-99. For purposes of the projections shown on Table 5, the
Pleasant Hill BART Project Area tax increment revenues have been projected based upon
assessed real property (land and improvements) taxable value increases resulting from
identified new development discussed above and the annual growth factors as set forth in the
footnotes to Table S. The projections also assume that the various entities entitled to tax
increment pursuant to tax sharing agreements with the Agency will receive tax increment
revenue on a subordinate basis to Pleasant Hill BART Loan repayment.The portion of the 1992
Pleasant Hill BART Loan not being prepaid with proceeds of the Pleasant Hill BART Loan will
be payable by the Agency from.Tax Revenues on a parity with the Pleasant Hill BART Doan.
32
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Estimated Loan Payment Coverage
The following table shows the debt service coverage on the Pleasant Hill BART Loan,
based on estimated.Tax Revenues from the Pleasant Hill BART Project Area. The porti
TSE NORTH RICHMOND PROJECT AREA
General
General. The North Richmond Project Area consists of approximately 900 acres.
Located in the western portion of Contra Costa County,the North Richmond Project Area is an
unincorporated contiguous area bordered on the south,east and north by the City of Richmond
and on the west by the San Francisco Bay. Although the area was historically subject to
seasonal flooding, the completion of a flood control project that channeled San Pablo and
Wildcat Creeps allowed for the removal of adjacent lands from the flood plain,
Existing Land Uses. According to the 1998-99 County secured tax roll, approximately 71
percent of the land in the North Richmond Project Area is used for industrial purposes, 21
percent for residential uses and 1 percent for agricultural uses.
Major Development Activities in the North Richmond Project Area. The projection of Tax
Revenues to be generated in the North Richmond Project Area does not incorporate the
following under-construction or fully-entitled developments in the North Richmond Project
Area.
Truck transfer facility on Brookside Drive: construction is scheduled to
commence by Summer 1999.
Parkway Estates on Gertrude Avenue: construction is expected to commence in
Spring 1999 and first home sales (12-20 units)are expected in the first quarter of
Fiscal Year 1999-00.
North Richmond Commercial. Center on V Street. construction is underway and
occupancy is expected by late-Summer 1999.
The forth Richmond Redevelopment Plan
The Board adopted the Redevelopment Plan establishing the North Richmond Project
Area by Ordinance No. 87-80 on July 14, 1987. The principal goals and objectives of the North
Richmond Redevelopment Plan are to (i) revitalize and expand industrial',and employment
related development in the northern portion of the North richmond Project Area, (ii) develop a
neighborhood commercial district and expansion of community facilities in the southern portion
of the North Richmond Project Area,and(iii)upgrade deteriorated housing and to stimulate the
construction of new affordable housing in the North Richmond Project Area. The North
Richmond Redevelopment Plan; is consistent with the North Richmond General Plan
Amendment to the County's General Plan.
The North Richmond Redevelopment Plan was further amended by Ordinance No. 94-
68, adopted by the Board on December 6, 1994. The 1994 amendment amended the North
Richmond Redevelopment Plan with respect to the time period during which the Plan will be in
effect,the time period during which the Agency may establish indebtedness and the amount of
tax increment revenues that may be allocated to the Agency. The 1994 an-iendment brought the
North Richmond Redevelopment Plan into conformance with AB 1290. See " North richmond
Redevelopment Plan Limitations" below. Finally, the Agency amended the North Richmond
Redevelopment flan by Ordinance No. 99-06 on February 23, 1999 pursuant to the provisions
of AB 1342.
35
For more information about AE 1294 and AB 1342, see "THE PLEASANT HILL BART
PROJECT AREA-Redevelopment Plan Limitations" above.
North Richmond Redevelopment Plan Limitations
The North Richmond Redevelopment Plan permits the Agency to collect a cumulative
total of $60,000,000 of tax increment revenues, and to have outstanding bonded indebtedness
of up to $30,000,000 in the North Richmond Project Area. According to the records of the
Agency,from the time of adoption of the North Richmond Redevelopment Plan through the end
of fiscal year 1997-98, the Agency has received $2,881,083 in tax increment revenue from the
North Richmond Project Area.
With respect to the North Richmond Project Area, the Board adopted Ordinance No.
94-63 on December 6, 1994 (in order to comply with AB 1290 and Ordinance No. 99-06 on
February 23, 1999 (in order to comply with AB 1342) and enacted the following time
limitations:
1. Establish g loans advames and ind b r ness: July 14, 2007 (except for
refinancing,refunding or restructuring of existing indebtedness where the indebtedness is
not increased and the time for repayment is not extended, and certain housing
obligations).
2. Effectivenessss of the Wirth Richmond Redevelopment Plan: July 14,2027.
3. Payment of indebtedne s and receipt-of property faxes: Except for loans and
indebtedness approved or incurred prior to December 31, 1993,the Agency may not pay
-indebtedness or receive property taxes after July 14,2037.
The Agency has covenanted in the :North Richmond Loan Agreement to comply with all
requirements of law to insure the allocation and payment to it of the Tax Revenues, including
without limitation the timely filing of any necessary statements of indebtedness with
appropriate officials of the County.
Tax Sharing Agreements
The Agency has not entered into any pass-through agreements with respect to the North
Richmond Project Area.
Section 33676 Allocations
Section 33675 of the Redevelopment Law allows taxing entities to receive additional
property taxes in a redevelopment project area above the base year revenue amount. See ""THE
PLEASANT HILL SART PROJECT AREA - Section 33675 Allocations". Currently, there are
13 taxing entities receiving allocations of property taxes under Section 33676 in the North
Richmond Project Area. The projection of tax increment revenues set forth in Table 10 herein
assumes that the payments will continue to be made to these taxing entities and that the
payments willl be made on a basis senior to Loan repayment. See "APPENDIX C - Fiscal
Consultant Report" and. "LIMITATIONS ON TAX REVENUES AND POSSIBLE SPENDING
LIMITATIONS-Property Tax Collection Procedure."
Low and Moderate Income Housing
As discussed above, see "SECURITY FOR THE BONDS - Limited Cross-
Collateralization,"-moneys deposited into the Low and Moderate Income Housing Account for
36
the forth Rich and Project Area will be available, subject to certain Limitations, to repay the
North Richmond Loan as well as the Loans relating to the other Cross-Collateralized Project
Areas.
Historic Assessed Values and Tax Revenues
The following table shows, for each of the most recent five fiscal years: (i) incremental
taxable value, (ii) actual receipts, (iii) the percentage of current year collections relative to the
amount levied,and(iv)the percentage of current year collections including supplemental taxes.
Contra Costa County has elected to follow the procedures of Sections 4701 et seq. of the
California Revenue and Taxation Code,known as the"Teeter Plan" as to general taxes entered
and collected on the secured tax roll, Therefore, property tax revenues in the Project Area
reflect levies rather than actual collections.
TABLE 7
CONTRA COSTA COLTI'- Y REDEVELOPMENT AGENCY
(North Richmond Project Area)
Historic Incremental Values and Tax Receipts
Historical Collections
Incremental Historical Current Year Includin
Fiscal Year Taxable value Collections{21 S e , t�(3)
1994-95 $35,675,731 $365,167 100.1% 104.3%
1995-96 44,041,885 459,017 100.0 104.2
1996-97 52,178,620 542,875 100.0 109.9
1997-98 60,492,087 629,459 99.8 103.0
1998-99 60,022,334 n/a n/a n/a
(1) Includes all current taxes and redemption payments exclusive of supplementals.
RReflects levy to receipts ratio.
Percentage collection including supplemental taxes.
Source: Katz Mollis
Set forth below in the table below is a summary of North Richmond Project Area
historical assessed values for fiscal years 1994-95 through 1998-99.
TABLE 8
CONTRA.COSTA COUNTY REDEVELOPMENT AGENCY
(North Richmond Project Area)
Historic Assessed Values
�Z3ase Pearl1 -2c
Total Secured $48,315,199 $73,044,668 $ 82,875,621 $ 88,577,512 $ 90,884,182 $ 91,174,268
Total Unsecured 10.253,895 21.20(3,157 19.735,358 22.170202 --28126.99 27,417160
Total Project value $58,569,094 $94,244,825 $102,614,979 $110,747,714 $119,061,181 $118,591,428
%Increase/Decrease -- -- 89% 7.9% 7.5% -0.4%
Source: Katz Hollis
37
Major Taxable Property Owners
The following table lists the ten largest taxpayers within the North Richmond Project
Area. used on fiscal year 1998-99 locally assessed taxable valuations, the top ten taxable
property owners in the Project Area represent approximately 52.8 percent of the total Project
Area taxable value of $118,591,428.
TABLE 9
CONTRA COSTA COUNTY REDEVELOPMENT AGENCY
(North Richmond Project Area)
Ten Largest Taxable Property Owners for Fiscal.Year 1998-99
2998-99 %of Total
Use/ No.of Assessed Pro'ect
sikaae Common Name Parcelsya ue Y—alm
West Co.Resource Recovery industrial 2 $16,814,201 14.18%
C S Acquisition Inc. Industrial 5 8,695,177 7.33
Irrmacc Corporation industrial 2 7,224,097 6.09
Bauman Landscape Inc. industrial 5 6,886,349 5.81
T_epst Soil Recycling of Oakland unsecured 1 5,612,286 4.73
NIP Co. Industrial 2 4,383,013 3.70
Hertz Equipment Rental Corp. Unsecured 1 4,155,837 3.50
Magruder Color Unsecured 1 3,506,786 296
Noll Manufacturing Co. Industrial 3 2,889,254 2.44
Color Spot Nurseries Inc. Industrial 3 2,471,440 2.08
Total $62,638,440 52.82%
Source: Katz Hollis
Appeals of Assessed Values
There are no appeals currently pending on properties within the North Richmond Project
Area. The projection of assessed value for fiscal year 1998-99 in the North,Richmond Project
Area shown in Table 10 assumes no reduction in value due to assessment appeal reductions.
See "THE PLEASANT HILL BART PROJECT AREA - Appeals of Assessed 'Values" for
general information relating to appeals.
Projected Tax Revenues
The tax increment revenue projections for the North Richmond Project Area,as prepared
by Katz Hollis, are summarized below. All of the projections coznmence with the reported
values for Fiscal Year 1998-99. For purposes of the projections shown on Table 10, the North
Richmond Project Area tax increment revenues have been projected based upon the annual
growth factors as set forth in the footnotes to Table 10. It should be noted that the Tax
Revenues projections do not include moneys required to be deposited into the Low and
Moderate Income Housing Account for the North richmond Project Area,even though a portion
of the North Richmond Lean payments are payable from such funds. In addition., Bond owners
should be aware that the portion of the 1995 North richmond Loam not being prepaid with proceeds
of the North Richmond Loan will be payable by the Agency from Tax Revenues on a parity with the
North Richmond Loan.
38
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Estimated Loan Payment Coverage
The following table shows the debt service coverage on the North Richmond Loan, based
on estimated Tax Revenues from the North Richmond Project Area. That portion of the 1995
North Richmond Lorin not being prepaid with proceeds of the.North Richmond Loan wall be payable by
the Agency from Tax Revenues on a parity with the North Richmond Loan.
TABLE 11
CONTRA COSTA COUNTY REDEVELOPMENT AGENCY
(North Richmond Project Area)
Estimated Loan Payment Coverage
Fiscal Low-Mod Total Outstanding Bands 1999
Year Tax Housing Available 1992 Loan 1995 Loan Bonds Total Debt
Endin Revenue(1) Add-Back(2) Tax Revenue Debt Service Debt Service DebtS gvlce Service Coverag
1999 $401,000 $26,829 $427,829 - $90,029 $90,02.9 4.75
2000 407,000 97,741 504,741 $123,185 193,788 316,973 1.59
2001 414,000 96,830 510,830 121,913 192,168 314,080 1.63
2002 420,000 95,898 515,898 _ 120,653 195,480 316,133 1.63
2003 427,000 96,131 523,131 - 124,355 193,530 317,885 1.65
2004 434,000 97,468 531,468 -- 127,725 191,530 319,255 1.66
2005 441,000 96,255 537,255 _ 125,745 189,480 315,225 1.70
(1) From Table 10.
(2) Equals the portion of the 1995 forth Richmond Loan and the portion of the North Richmond Loan payable
from the North Richmond Low and Moderate Income Housing.Account plus an additional 20 percent of such
amount for debt service coverage(the North Richmond Low and Moderate Income Hous` Account actually
provides 125 percent coverage on debt service payable from the North Richmond Low ana Moderate Income
Housing Account).
40
TIS WEST PITTSBURG/BAY POINT PROJECT AREA
General
General. The West Pittsburg/Bay Point Project Area consists of approximately 1,550
contiguous acres located in the eastern portion of Contra Costa County. It is generally bounded
by the City of Pittsburg on the east, State Route 4 on the south, Port Chicago Highway on the
west,and Suisun Bay and the Sacramento Northern Railroad right-of-way on the north.
Existing Land Uses. According to the 1998-99 County secured tax roll, within the West
Pittsburg/Bay Point Project Area, approximately 66 percent of the land is residential, 25
percent is industrial and 9 percent is commercial use.
Future Development Activities. There are no significant projects in the West Pittsburg/Bay Point
Project Area that are either under construction or even fully-entitled. However, the Agency
expects to begin implementation of the Pittsburg/Bay Point BART Station Area Specific Plan
immediately following its adoption in late-Spring or early-Summer 1999. The Specific Plan
contemplates more intensive land uses around the BART station, and the Agency expects
construction consistent with the Specific Plan will occur during the life of the Fonds.
The West Pittsburg/Bay Point Redevelopment Plan
The Board`adopted the Redevelopment Plan establishing the West Pittsburg Project
Area by Ordinance No. 87-102 on December 29, 1387. The West Pittsburg,Project Area was
subsequently renamed the Bay Point Redevelopment Project Area. The principal goals and
objectives of the West Pittsburg/Bay Point Redevelopment Plan are to (i) stimulate the
construction of new affordable housing, (ii) upgrade and rehabilitate existing housing units and
the development of neighborhood parrs and amenities, (iii) provide major infrastructure
improvements, (iv) expand and revitalize commercial development and (v) stimulate new
industrial development..The West Pittsburg/Bay Point Redevelopment Plan is consistent with
the County's General Plan
The West Pittsburg/Bay Point Redevelopment Plan was further amended by Ordinance
No. 94-64, adopted by the Board on December 6, 1994. The 1994 amendment amended the
West Pittsburg/Bay Point Redevelopment Plan with respect to the time period during which the
Plan will be in effect,the time period during which the Agency may establish indebtedness and
the amount of tax increment revenues that may be allocated to the Agency. The 1334
amendment brought the West Pittsburg/Bay Point Redevelopment Plan into'conformance with
AB 1290. Finally, the West Pittsburg/Bay Point Redevelopment Plan was amended by
Ordinance No. 33x05 on February 23, 1999 to bring the plan into conformance with AB 1342.
See"West Pittsburg/Bay Point Redevelopment Plan Limitations"below.
For more information about AB 1290 and AB 1342, see "TIME PLEASANT FALL BART
PROJECT AREA-Redevelopment Plan Lurutations"above.
West Pittsburg/Bay Point Redevelopment Plan Limitations
The West Pittsburg/Bay Point Redevelopment Plan permits the Agency to collect a
cumulative total of $116,000,000 of tax increment revenues, and to have outstanding bonded
indebtedness of up to $60,000,000 in the West Pittsburg/Bay Point Project Area. According to
the records of the Agency, from the time of adoption of the West Pittsburg/Bay Point
Redevelopment Plan through the end of fiscal year 1997-98,the Agency has received $7,518,988
in tax increment revenue from the West Pittsburg/Bay Point Project Area.
41
With respect to the West Pittsburg/Bay Paint Project Area, the Beard adopted
Ordinance No. 94-63 on December 6, 1994 (in order to comply with AB 1290 and Ordinance
No. 99-05 on February 23, 1999 (in order to comply with AB 1342), and enacted the following
time limitations:
1. Es ablishing leans, advances and indebtedness: December 29, 2007 (except
for refinancing, refunding or restructuring of existing indebtedness where the
indebtedness is not increased and the time for repayment is not extended, and certain
housing obligations).
2. Effectiveness f the West Pittsburg/Bay Point Recievelorment Plan:
December 29, 2027.
3. Payment of indebtedness and receijtQf property-taxes Except for loans and
indebtedness approved or incurred prior to December 31, 1993,the Agency may not pay
indebtedness or receive property taxes after December 29,2037.
The Agency has covenanted in the West Pittsburg/Bay Point Loan Agreement to comply
with all requirements of law to insure the allocation and payment to it of the Tax Revenues,
including without limitation the timely filing of any necessary statements of indebtedness with
appropriate officials of the County.
Tau Sharing Agreement
Pursuant to former Section 33401 of the Redevelopment Law, the Agency has entered
into one pass-through agreement with respect to the West Pittsburg/Bay Point Project Area,
described as follows.
Riverview Fire .Protection District of Contra Costa County. The Agency entered into a Tax
Sharing Agreement(the"Riverview Tax Sharing Agreement") for the West Pittsburg/Bay Point
Project Area with the Riverview Fire Protection District of Contra Costa County (the
"'Riverview District")on December 29,1987. Pursuant to this agreement, the Riverview District
is to receive one hundred percent of tax increment revenue that the Riverview District would
have received from the West Pittsburg/Bay Point Project Area, without regard to the division
and allocation of tax increment revenue pursuant to Health and Safety Code Section.33670. The
Riverview Tax Sharing Agreement also provides that the County Auditor-Controller may
withhold such amount from the amount to be paid to the Agency,and pay such amounts to the
Fire Protection directly. It should be noted that the Riverview District has been consolidated
into the Consolidated Fire Protection District,which has assumed the obligations and liabilities
of the Riverview District. [Confirm by review of LAFCO order]
The Riverview Tax Sharing Agreement provides for subordination to the West
Pittsburg/Bay Poiret Loan provided the Agency demonstrates to the Riverview District that the
Agency has sufficient Tax Revenues to pay debt service on the West Pittsburg/Bay Point Loan
and other obligations and make the payments provided by the tax sharing agreement. [The
Agency has received a subordination certificate from the Fire District with regard to the West
Pittsburg/Bay point Loran.]
Section 33676 Allocations
Section 33676 of the Redevelopment Law allows taxing entities to receive additional
property taxes in a redevelopment project area above the base year revenue amount. See "THE
PLEASANT HILL BART PROJECT AREA - Section 33676 Allocations,". Currently, there are
16 taxing entities 'receiving allocations of property taxes under Section 33676 in the West
42
Pittsburg/Bay Point Project Area.The projection of tax increment revenues set forth in Table 15
herein assumes that the payments will continue to be made to these taxing entities and that the
payments will be made on a basis senior to Loan repayment. See "APPENDIX C - Fiscal
Consultant Report" and "LIMITATIONS ON TAX REVENUES AND POSSIBLE SPENDING
LIMITATIONS-Property Tax Collection Procedure."
Low and Moderate Income Housing
As discussed above, see "SECURITY FOR THE BONDS Limited Cross-
Collateralization," moneys deposited into the Low and Moderate Income Housing Account for
the 'Nest Pittsburg/Bay Point Project Area will be available, subject to certain limitations, to
repay the West Pittsburg/Bay Point Loan as well as the Loans relating to the other Cross-
Collateralized Project Areas.
Historic Assessed Value and Taut Revenues
The following table shows, for each of the most recent five fiscal years: (i) incremental
taxable value, (ii) actual receipts, (iii) the percentage of current year collections relative to the
amount levied,and(iv)the percentage of current year collections including supplemental taxes.
Contra Costa County has elected to follow the procedures of Sections 4701 et sect. of the
California Revenue and Taxation Code,known as the "Teeter Plan" as to general taxes entered
and collected on the secured tax roll. Therefore, property tax revenues in the Project Area
reflect levies rather than actual collection.
TABLE 12
CONTRA COSTA COUNTY REDEVELOPMENT AGENCY
(West Pittsburg/Bay Point Project Area)
Historic Incremental Values and Tax Receipts
Historical Collections
Incremental Historical Current Year hicludin
Fiscal Year 'Tax _le Value Receipts(I !Colle-rtions f2! &PRItmentas(3)
1994-95 $93,861,520 $1,010,455 100.0% 106.1%
1995-96 94,174,013 1,018,020 100.0 1.04.0
1996-97 107,755,299 1,161,604 100.0 102.6
"997-98 122,427,756 1,319,633 99.8 104.6
1998`99 123,958,282 n/a n/a n/a
1 Includes all current taxes and redemption payments exclusive of supplementals.
2) R?fleets levy tra receipts ratio.
3 Percentage collection including supplemental taxes.
Source: Katz Hollis
43
Set forth below in the table below is a summary of West Pittsburg/Bay Paint Project
Area historical assessed values for fiscal years 1994-95 through 1998-99.
TABLE 13
CONTRA COSTA COUNTY REDEVELOPMENT AGENCY
(West Pittsburg/Bay Point Project Area)
Historic Assessed Values
ase fear) 1994-9 1995-9fi 1996-9 1997-98 122L-22
Total Secured $170,986,300 $264,442,641 $264,738,407 $278,503,534 $292,536,101 $294,214,022
Total Unsecured 6,836,090 7 241269 7,257.996 7,104,155 .7,714,04 7(}24.258
Total Project Value $177,822,390 $271,683,910 $271,996,403 $285,607,689 $300,250,146 $301,238,280
%Increase/Decrease -- -_ 0.1% 5.0% 5.1% 0.3%
Source. Katz Hollis
Major Taxable Property Owners
The following table lists the ten largest taxpayers within the West Pittsburg/Bay Point
Project Area. Based on fiscal year 1998-99 locally assessed taxable valuations, the top ten
taxable property Owners in the Project Area represent approximately 28.6 percent of the total
Project Area taxable value of $301,238,280.
TABLE 14
CONTRA COSTA COUNTY REDEVELOPMENT AGENCY
(West Pittsburg/Bay Paint Project Area)
Ten.Largest Taxable Property Owners for Fiscal Year 1998-99
1998-99 %of Total
Use/ No.of Assessed P *ect
nt
Assessee ComsxeNarne Parcels Value Value
LP Catal st Holdings Inc. Industrial 4 $51,018,943 10.64%
Dexter Lysol Aerospace Inc. Industrial 6 15,558,790 5.16
Willowbrook Apartments Residential 2 4,299,108 1.43
Acme Packaging Corporation Industrial 1 3,649,837 1.21
Johnson,Robert&Evelyn Mixed 7 2,564,593 0.85
Tower Energy Group Commercial 3 2,220,540 0.74
Frost,Joyyce Commercial 3 2,014,986 0.67
Trp yApartmer;tsinc. Residential 5 1,775,624 0.59
Gollders Arch Ltd.Partnership Commercial 6 1,552,595 0.52
Cheatham,Charles Commercial 1 1.368.125 0.45
Total 38 $86,023,141 28.56%
Source: Katz Hollis
44
Appeals of Assessed Values
There are four appeals currently pending on properties within the West Pittsburg/Bay
Point Project Area.The aggregate original value of these four properties is$1,206,563, and Katz
Mollis has estimated the resolved value to be $960,125. The projection of assessed value for
fiscal year 1998-99 in the West Pittsburg/Bay Point Project Area shown in Table 15 assumes a
reduction in value of $246,438 in fiscal year 1999-00 due to expected assessment appeal
reductions. See "THE PLEASANT HILL BART PROJECT AREA - Appeals of Assessed
Values"for general information relating to appeals.
Projected flax Revenues
The tax increment revenue projections for the West Pittsburg/Bay Point project Area, as
prepared by Katz Hollis, are summarized.below. All of the projections con—anence with the
reported values for Fiscal Year 1998-99. For purposes of the projections shown on Table 15, the
West Pittsburg/Bay Point Project Area tax increment revenues have been projected based upon
the annual growth factors as set forth in the footnotes to Table 15. The projections also assume
that the various entities entitled to tax increment pursuant to tax sharing agreements with the
Agency will receive tax increment revenue on a subordinate basis to West Pittsburg/Bay Point
Loan repayment It should be noted that the Tax Revenues projections do not include moneys
required to be deposited into the Low and Moderate Income Housing Account for the West
Pittsburg/Bay Point Project Area,even though a portion of the West Pittsburg/Bay Point Loan
payments are payable from such funds. In addition, Bond owners should be aware that the
1995 West Pittsburg Lean will be payable by the Agency from Tax Revenues on a parity with the West
Pittsburg/Bay Point Loan.
45
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Estimated Loan Payment Coverage
The following table shoves the debt service coverage on the West Pittsburg/Bay Point
Loan., based on estimated Tax Revenues from the West Pittsburg/Bay Paint Project Area. The
1995 West Pittsburg/Bay Point Loan will be payable by the Agency from Tax Revenues on a parity
with the Test.Pittsburg/Bay Point Loam,
TABLE 16
CONTRA COSTA COUNTY REDEVELOPMENT AGENCY
(West Pittsburg/Bay Point Project Areal)
Estimated Loan Payment Coverage
FiscalOutstanding Bonds_ Low-Mod Total 1999
Year Tax Housing Available 1992 Loan 1995 Loan ponds Total Debt
Endin Revenue(1) Add-Back(2) Tax Revenue Debt Service Debt Service Debt Service Service Coverage
1999 $837,000 $69,441 $906,441 - $224,593 $224,593 4.04
2000 850,000 206,304 1,056,304 -- $213,875 525,855 739,730 1.43
2001 863,000 204,861 1,067,861 -- 216,975 521,355 738,330 1.45
2002 876,000 202,930 1,078,930 - 214,725 521,668 736,393 1.47
2003 889,000 208,513 1,097,513 - 217,385 526,598 743,983 1.48
2004 901,000 206,142 1,107,142 -- 214,685 525,998 740,683 1.49
2005 912,000 205,304 1,117,304 - 216,935 520,053 736,988 1.52
1) From Table 15.
2) Equals the portion of the 1995 West Pittsbur /Bay Point Loan and the portion of the West Pittsbur /Bay
Point Loan payable from the West Pittsburg/lay Point Low and Moderate Income Housing Account pus an
additional 20 percent of such amount for debt service coverage (the West Pittsburg/Ba.y Point Low and
Moderate Income Housing Account actually provides 123 percent coverage on debt service payable from the
West Pittsburg/Bay Point Low and Moderate Income Housing Account).
47
THE RODEO PROJECT AREA
General
General. The Rodeo Project Area consists of approximately 650 acres bounded on the
west and south by the City of Hercules, on the north by San Pablo Pay and on the east by
Interstate 80. The Rodeo Project area is largely residential with commercial strips located along
the major corridors.
Existing Land Uses in the rodeo Project Area. Land use in the Rodeo Project Area is
primarily residential. According to the 1998-99 County secured tax roll, within the Rodeo
Project .Area, approximately 84 percent of the land is residential, 14 percent is commercial, 1
percent is industrial.and 1 percent is agricultural.
Major Development Activities in the Rodeo Project Area. The projection of Tax Revenues to
be generated in the Rodeo Project.Area does not incorporate the following under-construction or
fully-entitled developments in the Rodeo Project Area:
Schuler Homes is planning to build 58 single family homes in a development
called Willow Glen. The development will be constructed in two phases: the first
phase of 25 homes is expected to begin.by June 30, 1999 and the second phase of
33 homes is expected to begin in January 2000. The homes are expected to be
between 1,670 and 2,500 square feet and Schuler Homes expects to list the
homes for a sale price of $240,000-300,000.
The .Agency is planning a number of infrastructure improvements in the Rodeo
Project Area. Specifically, reconstruction of Parker Avenue is expected to begin
in 2001.The undergrounding of utilities on Parker Avenue has commenced and is
expected to be completed in December 2000. The reconstruction project will also
include repaving, installation of a median strip, landscaping and installation of
curb,gutter and sidewalks where needed. The Parker Avenue improvements are
designed to enhance the appearance of the main commercial strip in the Rodeo
Project Area and to encourage a more pedestrian-friendly atmosphere. In
addition to the reconstruction of Parker Avenue, the Agency is planning to
extend Cummings Skyway to provide an alternative route for trucks travelling on
Interstate 80, thereby, reducing truck traffic along Parker Avenue. [Confirm
language,particularly timing of Cummings Skyway extension]
The Rodeo Redevelopment.Plan
The Board adopted the Redevelopment Plant establishing the Rodeo Project Area by
Ordinance No. 90-50 on July 10, 1990. The principal goals and objectives of the Rodeo
Redevelopment Plan are to (i)fund circulation and transportation improvements,(ii) provide or
upgrade public and community facilities, (iii) provide infrastructure improvements, including
drainage improvements and utility upgrading, (iv) upgrade existing older residential
neighborhoods through rehabilitation of a substantial number of existing housing units, and (v)
stimulate new employment generating land use development. The Rodeo Redevelopment Plan is
consistent with the County's General Plan.
The rodeo Redevelopment Plan was further amended by Ordinance No. 94-66, adopted
by the Board on December 6, 1994. The 1994 amendment amended the Rodeo Redevelopment
Plan with respect to the time period during which the Rodeo Redevelopment Plan will be in
effect,the time period during which the Agency may establish indebtedness and the amount of
48
tax increment revenues that may be allocated to the Agency. The 1994 amendment brought the
Rodeo Redevelopment Plan into conformance with AB 1290. Finally, the Beard adopted
Ordinance No. 99-08 on February 23, 1999,amending the Rodeo Redevelopment Plan to bring it
into conformance with AB 1290. See " Rodeo Redevelopment Plan Limitations"below.
For more information about AB 1290 and AB 1342, see "'THE PLEASANT HILL BART
PROJECT AREA-Redevelopment Plan Limitations" above.
Rodeo Redevelopment flan Limitations
The Rodeo Redevelopment Plan permits the Agency to collect a cumulative total of
$125,000,000 of tax increment revenues,and to have outstanding bonded indebtedness of up to
$60,000,000 in the Rodeo Project Area. According to the records of the Agency, from the time
of adoption of the Rodeo Redevelopment Plan through the end of fiscal year 1997-98, the
Agency has received$2,440,078 in tax increment revenue from the Rodeo Project Area.
With respect to the Rodeo Project Area, the Board adopted Ordinance No. 94-66 on
December 6, 1994 (in order to comply with AB 1290) and Ordinance No. 99-08 on .February 23,
1999 (in order to comply with AB 1342),and enacted the following time limitations:
1. Establishing loans advances and indebtedness: July 10, 2010 (except for
refinancing,refunding or restructuring of existing indebtedness where the indebtedness is
not increased and the time for repayment is not extended, and certain housing
obligations).
2. Effectiveness of the Rodeo Redevelopment Plan: July 10,2030.
3. Payment of indebtedness and receipt of proel taxes: Except for loans and
indebtedness approved or incurred prior to December-31, 1993,the Agency may not pay
indebtedness or receive property taxes after July 10,2040.
The Agency has covenanted in the Rodeo Loan Agreement to comply with all
requirements of law to insure the allocation and payment to it of the Tax Revenues, including
without limitation the timely filing of any necessary statements of indebtedness with
appropriate officials of the County.
Tax Sharing Agreements
Pursuant to former Section 33401 of the Redevelopment Law, the Agency has entered
into pass-through agreements relating to the Rodeo Project Area dated May 8, 1990 with the
following entities:
(i) the East Bay Regional Park District
(ii) the Contra Costa Mosquito Abatement District,
(iii) the Contra Costa Community College District,and
(iv) the Rodeo Fire Protection District.
The temps of the pass-through agreements with each of these taxing agencies (the "Affected
Agencies")generally provide that the Affected Agency is to receive one hundred percent of tax
increment revenue that the Affected Agency would have received from the Rodeo Project Area,
without regard to the division and allocation of tax increment revenue pursuant to Health and
Safety Code Section 33670. The Agency is required to pay to the Affected .Agencies during the
following periods:
49
East BayRegional Park District and Rodeo Fire Protection District: Beginning in
fiscal year 1991-92 and continuing throughout the life of the Redevelopment Plan.
Mosquito Abatement -District and Co murdty College District Teri years
following the adoption of the Redevelopment Plan and continuing throughout the life of
the Redevelopment Plan.
Contra Festa County Office of Education:The Agency has also entered into a pass-through
agreement for the Rodeo Project Area with the Contra Costa County Office of Education (the
"'Office of Education") dated May 8, 1990. Pursuant to this agreement, the Office of Education
is to receive a percentage of the amount that the Office of Education would have received from
the Rodeo Project Area,without regard to the division and allocation of tax increment revenue
pursuant to Health and Safety Code Section 33670 (such amount being the ""Office of
Education's Share").Such percentage is either (i)50%beginning five years following adoption of
the Redevelopment Plan (which was July 10, 1995) or after the construction of at least 100
residential units which would create a demand for school facilities or (ii) 100% (beginning ten
years following the adoption of the Redevelopment Plan(which would be July 10,2000)).
All of the above-discussed Tax Sharing Agreements provide that the County Auditor-
Controller may withhold such amounts from the amount to be paid to the Agency, and pay
such amounts to the affected taxing agencies directly. The above-discussed Tax Sharing
Agreements also provides for subordination to the Rodeo Loan provided the Agency
demonstrates to the Affected Agencies that the Agency has sufficient Tax Revenues to pay debt
service on the Rodeo Loan and other obligations and make the payments provided by the Tax-
Sharing Agreements. [The Agency has received subordination certificates from the Affected
Agencies with regard to the Rodeo Loam.]
Section 33676 Allocations
Section 33676 of the Redevelopment Law allows taxing entities to receive additional
property taxes in a redevelopment project area above the base year revenue amount. See "THE
PLEASANT HILL BART PROJECT AREA -Section 33676 Allocations". Currently, there are 7
taxing entities receiving allocations of property taxes under Section 33676 'in the Rodeo Project
Area. The projection of tax increment revenues set forth in Table 20 herein assumes that the
payments will continue to be made to these taxing entities and that the payments will be made
on a basis senior to Loan repayment. See "APPENDIX C - Fiscal Consultant Report" and
"LIMITATIONS ON TAX REVENUES AND POSSIBLE SPENDING LIMITATIONS - Property
Tax Collection Procedure."
Low and Moderate Income Housing
As discussed above, see "'SECURITY FOR THE BONDS , - Limited Cross-
Collateralization,",moneys deposited into the Low and Moderate Income Housing Account for
the Rodeo Project Area will be available,subject to certain limitations,to repay the Rodeo Loan
as well as the Loans relating to the other Cross-Collateralized Project Areas.
50
Historic Assessed Value and Tax Revenues
The following table shows, for each of the most recent five fiscal years: (i) incremental
taxable value, (ii) actual receipts, (iii) the percentage of current year collections relative to the
amount levied,and(iv)the percentage of current year collections including supplemental taxes.
Contra Costa Bounty has elected to follow the procedures of Sections 4701 et seq. of the
California revenue and Taxation Code,known as the "Teeter Plan" as to general taxes entered
and collected on the secured tax roll. Therefore, property tax revenues in the Project Area
reflect levies rather than actual collections.
TABLE 17
CONTRA COSTA COUNTY REDEVELOPMENT AGENCY
(Rodeo Project Area)
Historic Incremental Values and Tax Receipts
Historical Collections
Incremental Historical Current Year Includin
Fiscal Year Taxable Value ec t . Collections(2 SuR121mentals(3)
1994-95 $37,108,421 $380,063 100.0% 128.2%
1.995-96 39,505,831 408,611 100.0 106.1
1996-97 41,246,166 426,091 100.0 103.6
1997-98 43,615,490 450,410 99.8 107.9
1998-99 46,113,816 n/a n/a n/a
(1) Includes all current taxes and redemption payments exclusive of supplementals.
RReflects levy to receipts ratio.
Percentage collection including supplemental taxes.
Source: Katz Mollis
Set forth below in the table below is a summary of Rodeo Project Area historical
assessed values for fiscal years 1994-95 through 1998-99.
TABLE 18
CONTRA.COSTA COUNTY REDEVELOPMENT AGENCY
(Rodeo Project Area)
Historic Assessed Values
ea 1994-95 1995-96 1996-97 1297-98 1 `
Total Secured $94,582,573 $128,205,385 $133,246,764 $134,986,537 $137,489,093 $139,144,002
Total Unsecured 3.218.180 6.703,789 4.059,820 4.060.382 3.927,150 4.652.811
Total Project Value $97,800,753 $134,909,174 $137,306,584 $139,046,919 $141,416,243 $143,796,813
%Increase/Decrease 1.8%® 1.3%d 1.7% 1.7%
Source: Katz Hollis
• 51
Major Taxable Property Owners
The following table lists the ten largest taxpayers within the Rodeo Project Area. Based
on fiscal year 1998-99 locally assessed taxable valuations, the top ten taxable property owners
in the Project Area represent approximately 12.8 percent of the total Project Area taxable value
of $143,796,813.
TABLE 19
CONTRA COSTA COUNTY REDEVELOPMENT AGENCY
(rodeo Project Area)
Ten Largest Taxable Property Owners for Fiscal Year 1998-99
1998-99 %of Total
Use/ No.of Assessed P
Amaa Comme iy'ame E=el s Value V
Bessolo,John Mixer! 21 $5,164,875 3.59%
Mock,York&Iok Commercial 6 5,161,640 3.59
Tosco Corporation(1) Mixed 6 2,085,492 1.45
Crockett Cable System Unsecured 2 1,410,301 098
Safeway Inc. Unsecured 1 1,311,051 0.91
Bertram,George&Sheila Commercial 5 753,396 0.52
Clover Trust Commercial 1 741,153 0.52
Cozzano,Thomas&Consuelo Commercial 4 676,280 0.47
Chang,wan-sze Residential 1 600,E00 0.42
Harbeck,Kimberly Residential 1 557.666 0.39
Total 48 $18,461,854 12.84%
(1) Pending appeal of assessed value. See"Appeals of Assessed Values"herein. [Confirm relationship with closed
facility].
Source; Katz Hollis
Appeals of Assessed Values
There is one appeal currently pending on a property within the Roden Project Area, by
Tosco Corporation, the third largest assessee in the Rodeo Project Area [Confirm relationship
with closed facility]. The original value of this property is $4,823,380, and Katz Hollis has
estimated the resolved value to be $1,804,598. The projection of assessed value for fiscal year
1998-99 in the Rodeo Project Area shown in Table 20 assumes a reduction in value of
$3,018,782 in fiscal year 1999-00 due to the expected assessment appeal reduction. See "THE
PLEASANT HILL BART PROJECT AREA - Appeals of Assessed Values" for general
information relating to appeals.
Projected Tax Revenues
The tax increment revenue projections for the Rodeo Project Area, as prepared by Katz
Hollis, are summarized below. All of the projections commence with the reported values for
Fiscal Year 1998-99. For purposes of the projections shown on Table 20,the Rodeo Project Area
tax increment revenues have been projected based upon the annual growth factors as set forth
in the footnotes to Table 20. The projections also assume that the various entities entitled to tax
increment pursuant to tax sharing agreements with the Agency will receive tax increment
revenue on a subordinate basis to Rodeo Loan repayment. It should be noted that the Tax
Revenues projections do not include moneys required to be deposited into the Low and
Moderate Income Housing Account for the Rodeo Project Area, even though a portion of the
Rodeo Loan payments are payable from such funds.
52
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Estimated Loan Payment Coverage
The following table shows the debt service coverage on the Rodeo Loan, based on
estimated Tax Revenues from.the Rodeo Project.Area.
TABLE 21
CONTRA COSTA COUNTY REDEVELOPMENT AGENCY
(Rodeo Project Area)
Estimated Loam Payment Coverage
outstanding Bands
Fiscal Low-Mod Total 1999
Year Tax Housing Available 1992 Loan 1995 Loan Bonds Total Debt
Revenue{1) Add-Back{2) fax Revenue bebt Service Debt Service l?ebt 8eie Service _Covera
1999 $343,000 $20,465 $363,465 -m - $55,504 $55,504 6.55
2000 334,000 79,395 413,395 -- - 221,513 221,513 1.57
2001 350,000 78,747 423,747 - - 219,533 219,533 1..95
2002 366,000 84,072 383,000 -- -- 222,470 222,470 1.72
2003 383,000 83,136 466,136 - - 225,130 225,130 2.07
2004 402,000 82,176 484,176 - -- 222,530 222,530 2..18
2005 422,000 81,192 503,192 «- -- 219,865 219,865 2.29
(1 From"fable 20.
2 Equals the portion of the Rodeos Loan payable from the Rodeo Low and Moderate Income Housing Account
plus an adc itianal 20 percent of such amount for debt service coverage(the Rodeo Low and Moderate Income
Housing Account actuallyprovides 125 percent coverage on debt service payable from the Rodeo Low and
Moderate Income Housing Account).
54
THE OAKLEY PROJ'EC'T'AREA
General
General. The Oakley Project Area consists of approximately 964 contiguous acres
.located in the eastern portion of the County. It is generally bounded on the east by the Atchison,
Topeka and Santa Fe Railroad (the"AT&SF") and State Route 4, on the south by Oakley Road,
State Route 4 and Cypress Road,on the west by Bridgehead/Neroly Road,and on the north by
the AT&SP right-of-way.
The Oakley Project Area, which currently lies in an unincorporated area of the County,
is expected to be incorporated as part of a new City of Oakley on jam, 1999. Pursuant to an
incorporation election on November 3, 1998, Resolution No. 97-17 of the Contra Costa County
Local Agency Formation Commission(the"Incorporation Resolution")and Section 33218 of the
Redevelopment Law, the County expects to transfer the Oakley Project Area to the City of
Oakley, in which case the City of Oakley"s redevelopment agency (the "City Redevelopment
Agency") would assume the debts and obligations of the Oakley Project Area, including the
obligation under the Oakley Loan Agreement.
Existing Land Uses. Land use in the Oakley Project Area is primarily residential.
.According to the 1998-99 County secured tax roll, within the Oakley Project Area,
approximately 76 percent of the land is residential, 30 percent is commercial, 2 percent is
agricultural and 2 percent is industrial.
Major Developnwnt Activities in the Oakley Project Area. The projection of Tax Revenues to
be generated in the Oakley Project Area does not incorporate the following under-construction
or fully-entitled developments in the Oakley Project Area:
® Self storage facility on highway 4 around Live Oak Avenue;construction is expected
in Sumner 1999.
• Gas station on Carol Lane;construction is expected to commence by Summer 1999.
• Arco Station and mini mart on highway 4 and Bridgehead Road; construction is
almost complete and the project should be operational by mid-March 1999.
• Two other projects are in the planning process and are expected to be entitled by
May 1999: (i) a self storage facility at Bridgehead and Highway 4 (construction
expected by Summer 1999)and (ii) a gas station and 7-11 on Highway 4 at Oakley
Road (construction expected by Summer 1999).
55
The Oakley Redevelopment Plan.
The Board adapted. the Redevelopment Plan establishing the Oakley Project Area by
Ordinance No. 89-89 on December 27, 1989. The principal goals and objectives of the Oakley
Redevelopment Plan are to (i) fund circulation and transportation improvements, primarily
those related to State Route 4 deficiencies, (ii) upgrade inadequate public and community
facilities, (iii) provide infrastructure improvements, (iv) upgrade and rehabilitate existing
housing units and the development of neighborhood parks and amenities,and(v) stimulate new
industrial employment. The Oakley Redevelopment Plan is consistent with the County's
General Plan.
The Oakley Redevelopment Plan was further amended by Ordinance No. 94-65,
adopted by the Board on December 6, 1994. The 1994 amendment amended the Oaklev
Redevelopment Plan with respect to the time period during which the Oakley Redevelopment
Plan will be in effect,the time period during which the Agency may establish indebtedness and
the amount of tax increment revenues that may be allocated to the Agency. The 1994
amendment brought the Oakley Redevelopment Plan into conformance with AB 1290. Section
33215 of the Redevelopment Law indicates that the Oakley Redevelopment Plan, for purposes
of AB 12909 and otherwise,will be considered to have been adopted by the City of Oakley City
Council on December 27, 1989 (the date the Plan was adopted by the County's Board of
Supervisors). Finally,the Board further amended the Redevelopment Plan.on February 23, 1999
by adoption of Ordinance No. 99-017 pursuant to the provisions of AB 1342. See " Oakley
Redevelopment Plan Limitations"below.
For additional information relating to AB 1290 and AB 1342, see "THE PLEASANT
HILL BART PROJECT AREA—Redevelopment Plan Limitations",above.
Oakley Redevelopment Plan Limitations
The Oakley Redevelopment Plan permits the Agency to collect a cumulative total of
$170,000,0010 of tax increment revenues,and to have outstanding bonded indebtedness of up to
$80,000,000 in the Oakley Project Area. According to the records of the Agency, from the time
of adoption of the Oakley Redevelopment Plan through the end of fiscal year 1997-98, the
Agency has received$7,047,907 in tax increment revenue from the Oakley Project Area.
With respect to the Oakley Project Area, the Board adopted Ordinance No. 94-65 on
December 6, 1994 (in order to comply with AB 1290) and Ordinance No. 99-07 on February 23,
1999 (in order to comply with AB 1342),and enacted the following time limitations:
1. Establishing Joans, adyan-ces and indebtedness: December 21, 2009 (except
for refinancing, refunding or restructuring of existing indebtedness where the
indebtedness is not increased and the time for repayment is not extended, and certain
housing obligations).
2. E fectiveness of the Oakley Redevelopment Plan: December 21,2029.
3. Payment of indebtedness and receipt of pier y taxes: Except for loans and
indebtedness approved or incurred prior to December 31, 1993,the Agency may not pay
indebtedness or receive property taxes after December 21,2039.
The Agency has covenanted in the Oakley Loan Agreement to comply with all
requirements of law to insure the allocation and payment to it of the Tax Revenues, including
without limitation the timely filing of any necessary statements of indebtedness with
appropriate officials of the County.
56
Tax Sharing Agreements
Pursuant to former Section 33401 of the Redevelopment Law, the Agency has entered
certain pass-through agreements,summarized below. Pursuant to the Incorporation Resolution,
the City Redevelopment Agency will continue to honor the pass-through agreements.
Riverview Fire Protection District (entered into on December 21, 12_8& The Agency
agrees to pay one hundred percent of the portion of tax increment that would have been paid to
the Riverview Fire Protection. District if the Oakley Project Area had not been established
without regard to the division and allocation of tax increment revenue pursuant to Health and
Safety Code Section 33670. It should be noted that the Riverview District has been consolidated
into the Consolidated Fire Protection.District,which has assumed the obligations and liabilities
of the Riverview District. More importantly, the boundaries of the Riverview Fire Protection!
District have been revised so that no portion of the Oakley Project Area lies within the Fire
Protection District. Accordingly,the Riverview Fire Protection District does not receive any tax
increment revenues generated in the Oakley Project Area and,consequently,no subordination to
Oakley Loan payments has been requested.
Qijklev Fire Protection Districts ntenraed into on December 21,_1989): 'The Agency agrees
to pay one hundred percent of the portion of tax increment that would have been paid to the
Oakley Fire Protection District if the Oakley Project Area had not been established without
regard to the division and allocation of tax increment revenue pursuant to Health and Safety
Code Section 33670.
Contra Costa Mosquito Abatement District entered into on Decemb r21 19 9 : the
Agency agrees to pay a percentage of the Mosquito District's Share (such Share being the
portion of tax increment that would have been paid to the Mosquito District if the Oakley
Redevelopment Project had not been established without regard to the division and allocation
of tax increment revenue pursuant to Health and Safety Code Section 33670). The percentage is
calculated based on the amount of assistance funds the Agency provides to the Mosquito
District. The percentage ranges from. 100% (if the Agency contributes less than $10,001) to 0%
(if the Agency contributes more than $90,000). The Agency's obligation under this agreement
commences in December 1994 and ends on December 21,2029.
East Bayegionl Park District (centered into on December 21 1989The Agency
agreed to mare payments to the East Bay Regional Park District of an amount not-to-exceed
$150,000 towards certain park improvements. The Agency has fulfilled this obligation.
Antioch Unified School District (entered into on Mar h 28 1990}.Oakley Union School
Di triCt (Cntgred in n F 1 1 9 Liberty High School Di5trict-Lentered intoon
February 14. 1990): The Agency agrees to pay to the three above-named School Districts 25%
of the gross tax increment revenues (prior to the deduction of Low and Moderate Income
Housing fund obligations) without regard to the division and allocation of tax increment
revenue pursuant to Health and Safety Code Section 33670, continuing until the expiration of
the Redevelopment Plan (which occurs on December 21, 2929). The School Districts agree to
limit the use such tax increment pass-throughs for certain projects of benefit to the School
Districts,as set forth in the Agreements.
Contra Costa County Office of Education (entered into on December 21 1989)The
Agency agrees to pay a percentage of the portion of tax increment that would have been paid to
the Contra Costa County Office of Education without regard to the division and allocation of
tax increment revenue pursuant to Health and Safety Code Section 33670. Such percentage is
either 50% (beginning five years after adoption of the Redevelopment Plan or the construction of
57
50,000 square feet of development) or 100% (beginning ten years after adoption of the
Redevelopment Plan,which would be December 27,1999).
All of the above-mentioned Tax Sharing Agreements provide for subordination to the
Oakley Loan provided the Agency demonstrates to the related taxing agencies that the Agency
has sufficient Tax Revenues to pay debt service on the Rodeo Loan and other obligations and
snake the payments provided by the Tax-Sharing Agreements. (The Agency has received
subordination certificates relating to the above-mentioned Tax-Sharing Agreements with regard
to the Oakley Loan.)
Pass-hrou h Provisions of the Incorporation resolution. Under the terms of the
Incorporation Resolution, to the extent allowed by law, but only if the City redevelopment
Agency assumes the rights and obligations of the Agency with respect to the Oakley Project
Area, the City redevelopment Agency will pay the County general fund, the County's Water
Conservation and Flood Control District, the County Water Agency, the County Fire Protection
District and the County Library District/Fund the portion of the tax increment revenues from
the Oakley Project Area required under Section 33607.5 of the Redevelopment Law.
Pursuant to Section 33607.5, the amounts to be passed through to the affected taxing
entities are as follows:
(a) From the first fiscal year through the last fiscal year in which the City
Redevelopment Agency receives tax increments, the City Redevelopment Agency will
pay an amount equal to 25 percent of the tax increments received by the City
Redevelopment Agency after the amount required to be deposited into the City
Redevelopment Agency's Low and Moderate Income Housing Fund (the "City Housing
Fund").
(b) From the eleventh fiscal year through the last fiscal year in which the City
Redevelopment Agency receives tax increments, the City redevelopment Agency will
pay,in addition to the amount specified in(a) above, an amount equal to 21 percent of
the tax increments which are in excess of the values in the Oakley Project Area in the
tenth fiscal'year,after the amount required to be deposited into the City Housing Fund.
(c) From the thirty-first fiscal year through the last fiscal year in which the City
Redevelopment Agency receives tax increments, the City Redevelopment Agency will
pay, in addition to the amount specified in (a) and (b) above, an amount equal to 14
percent of the tax increments received by the City redevelopment Agency which are in
excess of the values in the Oakley Project Area in the thirtieth fiscal year, after the
amount required to be deposited into the City Housing Fund.
For purposes of the statutory pass-through formula set forth above,the County expects that the
fiscal year beginning July 1,1999 will be considered to be the ninth year under the formula.
The County and the other County-related affected agencies under the incorporation
Resolution have agreed to subordinate their pass-through payment to repayment of the Oakley
Loan in the event the City Redevelopment Agency assumes the rights and obligations of the
County with respect to the Oakley Project Area.
58
Section 33676 Allocations
Section 33676 of the Redevelopment Law allows taxing entities to receive additional
property taxes in a redevelopment project area above the base year revenue amount. See "THE
PLEASANT HILL BART PROJECT AREA - Section 33676 Allocations". Currently, there are
10 taxing entities receiving allocations of property taxes under Section 33676 in the Oakley
Project Area. The projection of tax increment revenues set forth in Table 25 herein assumes that
the payments will continue to be made to these taxing entities and that the payments will be
made on a basis senior to Oakley Loan repayment. See "APPENDIX C - Fiscal Consultant
Report" and "LIMITATIONS ON TAX REVENUES AND POSSIBLE SPENDING
LIMITATION'S-Property Tax Collection Procedure."
Low and Moderate Income Housing
Moneys deposited into the Low and Moderate Income Housing Account for the Oakley
Project Area are not available to repay the Oakley Loan or to pay debt service on the Bonds.
Historic Assessed!Value and Tax Revenues
The following table shows, for each of the most recent five fiscal years: (i) incremental
taxable value, (ii) actual receipts, (iii) the percentage of current year collections relative to the
amount levied.,and (iv)the percentage of current year collections including, supplemental taxes.
Contra Costa County has elected to follow the procedures of Sections 4701 et seq. of the
California Revenue and Taxation Code,known as the "Teeter Plan" as to general taxes entered
and collected on the secured tax roll. Therefore, property tax revenues in the Project Area
reflect levies rather than actual collections.
TABLE 22
CONTRA.COSTA COUNTY REDEVELOPMENT AGENCY
(Oakley Project Area)
Historic Incremental Values and Tax Receipts
Historical Collections
Incremental Historical Current Year Including
Fiscal Year Taxable Value Receipts(1) Collections(2) Suo�lementals(3)
199495 $107,511,784 $1,142,318 100.0% 107.7%
199596 110,534,059 1,173,639 100.0 102.1
1946-97 116,351,785 1,232,264 100.0 104.1
1947-98 120,239,449 1,272,905 99.8 103.4
1998-99 121,334,031 n/a n/a n/a
(1) Includes all current taxes and redemption payments exclusive of supplementals.
{2) Reflects levy to receipts ratio.
3 Percentage collection including supplemental taxes.
Source: Katz Hollis
59
Set forth below in the table below is a summary of Oakley Project Area historical
assessed values for fiscal years 1994-95 through 1998-99.
TABLE 23
CONTRA COSTA COUNTY REDEVELOPMENT AGENCY
(Oakley Project Area)
Historic Assessed Values
1221-2-5 1995-9 1996 12azz-H 1298-9
Total Secured $81,015,910 $182,523,432 $186,002,337 $191,792,147 $195,866,725 $196,799,924
Total Unsecured 0 6.004,26 5,547,632 5.575,548 X88,634 555(#=1117
Total Project Value $81,015,910 $188,527,694 $191,549,969 $197,367,695 $201,255,359 $202,349,941.
%Increase/Decrease 1.6% 3.0% 2.0% 0.5%
Source: Katz Hollis
Major Taxable Property Owners
'the following table lists the ten largest taxpayers within the Oakley Project Area. Eased
on fiscal year 199E-99 locally assessed taxable valuations, the top ten taxable property owners
in the Project Area represent approximately 13.9 percent of the total Project Area taxable value
of $202,349,941.
TABLE 24
CONTRA COSTA COUNTY REDEVELOPMENT AGENCY
(Oakley Project Area)
Ten Largest Taxable Property Owners for Fiscal Year 1998-99
1998-99 %of Total
Use/ No.of Assessed Pro'ect
ssessee Commonhiame Parcels V4lue Va ue
Cypress Square-S&R Assoc. Commercial 1 $9,532,913 4.71%
Lucky Stores Inc.(1) Commercial 1 4,190,01.6 2.07
Conco Land Companyy Mixed 5 3,290,678 1.63
Northern California Lev. Commercial 4 2,578,955 1.27
Rayless Drug Stores NW Inc. Commercial 1 2,346,000 1.16
United Centro Properties Commercial 1 1,738,196 0.86
Ba Area Pallet Company Industrial 3 1,427,529 0.71
haleys Unsecured 1 1,047,178 0.52
Scarbrough,William Commercial 1 1,033,460 0.51
Brown,John&Louise Commercial 1 03 887 0.45
Total $28,088,812 13.88%
dol Pengng appeal of assessezl value. See"Appeals of Assessed Values."
acre: Kati Hollis
60
Appeals of Assessed Values
There are two appeals currently pending on properties within the Oakley Project Area,
including one by the second largest assessee in the Oakley Project Area. The aggregate original
value of these two properties is $3,548,047, and Katz Hollis has estimated the resolved value
to be $2,651,1.21. The projection of assessed value for fiscal year 199899 in the Oakley Project
Area shown in Table 25 assumes a reduction in value of$896,926 in fiscal year 1.999-00 due to
anticipated assessment appeal reductions. See "THE PLEASANT HILL BART PROJECT
AREA_Appeals of Assessed.Values" for general information relating to appeals.
Projected Taut Revenues
The tax increment revenue projections for the Oakley Project Area, as prepared by Katz
Hollis, are summarized below. All of the projections commence with the reported values for
Fiscal Year 1998-99. For purposes of the projections shown on Table 25, the Oakley Project
Area tax increment revenues have been projected based upon the annual ,growth factors as set
forth in the footnotes to Table 25. The projections also assume that the various entities entitled
to tax increment pursuant to tax sharing agreements with the Agency will receive tax increment
revenue on a subordinate basis to Oakley Loan repayment
61
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Estimated Loan Payment Coverage
The following table shows the debt service coverage on the Oakley Loan, based on
estimated Tax Revenues from the Oakley Project Area.
TABLE 26
CONTRA COSTA COUNTY REDEVELOPMENT AGENCY
(Oakley Project Area)
Estimated Loan Payment Coverage
Fiscal Low-plod Total Outstanding Bonds 1999
Year Tax Housing Available 1992 Loan 1995 Loan Bonds Total Debt
Endin Revenue(1) Add-Back(2) Tax Revenue Debt Service Debt Service 2ebt Service Service Coverag
1999 $979,000 $38,017 $1,017,017 -- -- $235,463 $235,463 4.32
2000 996,000 49,633 1,045,633 -- — 512,975 512,975 2.04
2001 1,021,000 50,401 1,071,401 .- -- 513,475 513,475 2.09
2002 1,046,000 49,906 1,095,906 — -- 513,600 513,600 2.13
2003 1,072,000 50,591 1,122,591 — 518,335 518,335 2.17
2004 1,100,000 50,015 1,150,015 — -- 517,535 517,535 .2.22
2005 1,128,000 49,424 1,177,424 — -- 516,385 516,385 2.28
(1) From Table 25.
(2) (to be discussed)
63
DIRECTAND OVERLAPPING DEBT
The following table summarizes direct and overlapping bonded debt within the Project
Areas in the aggregate,as of January 1, 1999. There can be no assurance as to the accuracy of
the following table, and inquiries concerning the scope and methodology of procedures carried
out to compile the information presented should be directed to California Municipal Statistics,
Inc.,San Francisco,California.
TABLE 27
CONTRA COSTA COUNTY REDEVELOPMENT AGENCY
(Pleasant Hill BART,North Richmond,Bay Point,Rodeo and
Oakley Redevelopment Project Areas)
Direct and Overlapping Bonded Debt
1998-99 Assessed Valuation $1,064,744,833
Base Year Valuation 445.802.789
Incremental Valuation $ 618,942,044
DIRECT DEBT: %Applicable Debt 1/1/99
Bay Point Redevelopment Project Area 100. % $ 5,045,625
North Richmond Redevelopment Project Area 100. 2,701,100
Oakley Redeve€opment Pro ect Area 100. 2,809,250
Pleasant Hill WT Redevellopment Project Area 100. 14,987,625
Rodeo Redevelopment.Project Area 100. 0
TOTAL DIRECT DEBT $25,543,600 (1)
Ratio to Incremental Valuation: 4.13%
OVERLAPPING TAX AND ASSESSMENT DEBT:
San Francisco Bay Area Rapid Transit District 0.212% $ 87,185
Liberty Union High School District 1.867 625,352
Oakley Union School District 5.937 415,590
Other School Districts Various 241,509
East Bay Municipal Utility District 0.198 16,286
East Bay Regional Park District 0.309 577,521
Contra Costa County Service Area No.R-8 0.122' 3,343
Contra Costa County Community Facilities District No.1991-1 100. 4,410,000
Mount Diablo Unified School District Community Facilities District No.1 1.247 943,293
Contra Costa County Assessment District No.1991-2 100. 1.55fl,00fl
TOTAL GROSS OVERLAPPING TAX AND ASSESSMENT DEBT $8,670,079
Less: East Bay Municipal Utility District 16,286
TOTAL NET OVERLAPPING TAX AND ASSESSMENT DEBT $8,653,793
OVERLAPPING GENERAL FUND OBLIGATION DEBT:
Contra Costa County General Fund Obligations 0.690% $1,853,285
Contra Costa County Pension Obligations 0.690 2,221,076
Contra Costa County Board of Education Certificates of Participation 0.690. 24,668
Alameda-Contra Costa Transit District Authority 0.078 19,395
Contra Costa Community College District Certificates of Participation 0.691 10,676
Liberty Union High School Distract Certificates of Participation 1.867 66,185
Unified School District Certificates of Participation Various 315,024
Los Medanos and Mount Diablo Hosital Authorities 7.601 and 0.141 391,324
Other Special District Certificates of Participation Various
TOTAL OVERLAPPING GENERAL FUND OBLIGATION DEBT $4,928,531
GROSS COMBINED TOTAL DIRECT AND OVERLAPPING DEBT $39,142,210 (2)
NET COMBINED TOTAL DIRECT AND OVERLAPPING DEBT $39,125,924
(1) Excludes tax allocation bonds to be sold.
(2) Excludes tax and revenue anticipation notes,revenue,mortgage revenue and tax allocation bonds and non-bonded
capital lease obligations
Ratios to 1 98-99 Assessed Valuation:
Gross Combined Total Direct and Overiapping Debt........3.68%
Net Combined Total Direct and Overlapping Debt.............3.67%
STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/98: $0
Source: California Municipal Statistics,Inc.
64
RISK FACTORS
The following information should be considered by prospective investors in evaluating
the Bonds. However, the following does not purport to be an exhaustive listing of risks and
other considerations which may be relevant to investing in the Bonds. In addition, the order in
which the following information is presented is not intended to reflect the relative importance of
any such risks.
To estimate the revenues available to pay debt service on the Bonds, the Agency has
made certain assumptions with regard to the assessed valuation in the Project Areas, future tax
rates and percentage of taxes collected. The Agency believes these assumptions to be
reasonable, but to the extent that the assessed valuation, the tax rates or the percentage of
taxes collected are less than the Agency's assumptions,the Tax Revenues available to pay debt
service on the Bonds will,in all likelihood,be less than those projected.
Reduction in Taxable Value
Tax Revenues allocated to the Agency are determined by the amount of incremental
taxable value in the Project Areas and the current rate or rates at which property in the Project
Areas is taxed. The reduction of taxable values of property caused by economic factors beyond
the Agency's control,such as a relocation out of a Project Area by one or more major property
owners, or the complete or partial destruction of such property caused by, among other
eventualities, an earthquake (see "Seismic Factors," below), flood or other natural disaster,
could cause a reduction in the Tax Revenues, and consequently, Revenues securing the Bonds.
Property owners may also appeal to the County Assessor for a reduction of their assessed
valuations or the assessor may reduce the assessed value on its own. Such a reduction of
assessed valuations and the resulting decline in Tax Revenues or the resulting refund of
property taxes could have an adverse effect on the Agency's ability to make timely payments of
principal of and interest on the Bonds.
Application of the Provisions of Article XIIIA(2(d) of the California Constitution and
California Revenue and Taxation Code Section 68 may also result in a significant reduction of
the assessed valuation of a property within a redevelopment project area. These provisions
permit a person who is displaced from property by eminent domain proceedings or by
governmental action resulting in a judgment of inverse condemnation to transfer the adjusted
base year value of the property from which the person is displaced to'another comparable
property anywhere within the State. Persons acquiring replacement property must request
assessment pursuant to these provisions within four (4) years of the date the property was
acquired by eminent domain or purchase or the date the judgment of inverse condemnation
becomes final Any such assessment pursuant to these provisions of Article XIIIA(2)(d) and
California Revenue and Taxation Code Section 68 could result in a substantial and completely
unexpected reduction in the assessed valuation of a property within the Project Area.
Redaction in Inflationary Rate
As described in greater detail below, Article XIIIA of the California Constitution
provides that the full cash value of real property used in determining taxable value may be
adjusted from year to year to reflect the inflationary rate,not to exceed a 2 percent increase for
any given year, or may be reduced to reflect a reduction in the consumer price index or
comparable local data. Such measure is computed on a calendar year basis. Because Article
XIIIA limits inflationary assessed value adjustments to the lesser of the actual inflationary rate
or 2 percent, there have been years in which the assessed values were adjusted by actual
inflationary rates, which were less than 2 percent. The Agency is unable to predict if any
65
adjustments to the full cash value of real property within. the Project Area, whether an increase
or a reduction,will be realized in the future.
Levy and Collection
The Agency does not have any independent power to levy and collect property taxes.
Any reduction in the tax rate or the implementation of any constitutional or legislative property
tax decrease could'reduce the Tax Revenues,and accordingly,could have an adverse impact on
the ability of the Agency to repay the Loans. Likewise, delinquencies in the payment of
property taxes could have an adverse effect on the Agency's ability to make timely Loan
payments. The County has elected to follow the procedures of Sections 4701 et seq. of the
California Revenue and Taxation Code,known as the "Teeter Plan" as to general taxes entered
and collected on the secured tax roll. Therefore, property tax revenues in the Project Area
reflect levies rather than actual collections.
Parity Debt
As described in "SECURITY FOR THE BONDS — Certain Parity Obligations," the
Agency's pledge of Tax Revenues generated in certain Project Areas as security for its obligation
to repay certain Loans is on a parity with its pledge of such Tax Revenues to its obligation to
repay certain outstanding obligations. In addition, the Agency may issue or incur obligations
payable from Tax Revenges on a parity with its pledge of Tax Revenues to repayment of the
Loans. The existence of and the potential for such obligations increases the risks associated
with the Agency's repayment of the Loans, and consequently, the Authority's payment of debt
service on the Bonds,in the event of a decrease in the Agency's collection of Tax Revenues.
Bankruptcy and Foreclosure
On July 30, 1992 the United States Court of Appeals for the Ninth Circuit issued an
opinion in a bankruptcy case entitled In re Glasply Marine Industries holding that ad valorem
property taxes levied by a county in the State of Washington after the date that the property
owner filed a petition for bankruptcy would not be entitled to priority over the claims of a
secured creditor with a prior lien on the property. Although the court upheld the priority of
unpaid taxes imposed before the bankruptcy petition, unpaid taxes imposed subsequent to the
filing of the bankruptcy petition were declared to be "administrative expenses" of the
bankruptcy estate, payable after the claims of all secured creditors. As a result, the secured
creditor was able to foreclose on the subject property and retain all the proceeds from the sale
thereof except the amount of the pre-petition taxes. Pursuant to this holding, post-petition
taxes would be paid only as adminis#native expenses and only if a bankruptcy estate has
sufficient assets to do so. In certain circumstances, payment of such administrative expenses
may be allowed to be deferred. (Ince the property is transferred out of the bankruptcy estate
(through foreclosure or otherwise)it would become subject to current ad valorem taxes.
The Glasply decision is controlling precedent in bankruptcy court in the State of
California. The lien date for property taxes in California is the January 1 preceding the fiscal
year for which the taxes are levied. Therefore,under Glasply, a bankruptcy petition filing would
prevent the lien for property taxes levied in subsequent fiscal years from attaching so long as
the property was part of the estate in bankruptcy. To the extent that Glasply is applied to
property owners within the Project Area who file for bankruptcy and whose taxes are a source
of Tax Revenues,the amount of Tax Revenues available to the Agency may be reduced.
However, Glasply only applies to bankruptcy petitions filed prior to October 22., 1994
because Congress enacted on that date 11 U.S.C. §362(b)(18),which added a new exception to
the automatic stay for ad valorem property taxes imposed by a political subdivision after the
66
filing of a bankruptcy petition. Thus, in the event of a bankruptcy petition filed on or after
October 22, 1994, the lien for ad valorem taxes in subsequent fiscal years will attach even if the
property is part of the bankruptcy estate.
State Budget
In connection with its approval of the budget for the 1992-93, 1993-94 and 1994-95
fiscal years, the State Legislature enacted legislation which, among other things, reallocated
funds from redevelopment agencies to school districts by shifting a portion of each agency's tax
increment,net of amounts due to other taxing agencies, to school districts for such fiscal years
for deposit in the Education Revenue Augmentation Fund ("ERAF"'). The amount required to
be paid by a redevelopment agency under such legislation was apportioned among all of its
redevelopment project areas on a collective basis, and was not allocated separately to
individual project areas. At present, the State is not requiring this reallocation to ERAF,
however,there can be no assurances that reallocations will not be required in the future.
Seismic Factors and Flooding
The occurrence of severe seismic activity and/or flooding in a Project Area could result
in substantial damage to property located in such Project Area, and could lead to successful
appeals for reduction of assessed values of such property. Such a reduction could result in a
decrease in Tax Revenues collected by the Agency.
Year 2000-Related Risks
A "'Year 2000" problem arises because most computer systems and programs were
designed to handle only a two-digit year, not a four digit year. When the Year 2000 begins,
these computers may interpret"00" as the year 1900 (e.g., 1998 is seen as °'98") and may either
stop processing date-related computations or process them incorrectly. If this Year 2000
problem is not timely remedied,problems could arise in the levy and collection of taxes and the
calculation of interest and principal payments on the Bonds. To prevent this, public entities
and banking organizations need to examine their computers and programs, fix the problem, test
their systems and test interactions with other systems. The Securities and Exchange
Commission ("'SEC"') has introduced proposed temporary regulations for non-bank related
paying agents and broker dealers to submit reports to the SEC regarding their attempts to solve
the Year 2000 problem.
County and the Agency. Contra Costa County has been working on Year 2000
remediation since June of 1995. In addition to a large commitment of County staff time and the
cost of replacement equipment and software, as of June 30, 1998, the County had contracts
with vendors totaling$577,000 to assist in the Year 2000 remediation project;
The County has also notified many of its business partners and is in the process of
defining compatible external interfaces. Despite these measures, the County cannot guarantee
that the County and all of its business partners will have addressed their year 2000 problems
by January 1, 2000. Potential risk factors associated with Year 2000 issues include the
possibility of a disruption or delay of revenues to the County and the Agency, and the
possibility of delayed payments to Bondholders as a result of the various possible disruptions.
67
The table below summarizes the status of the County's Year 2000 remediation project as
of December 16, 1998. The areas being addressed are on the left and defined below. Across
the top are the four stages of the Year 2000 remediation process as defined in the Governmental
Accounting Standards Board Bulletin No. 98-1.
Validation
Awareness Assessment Remediation and Testinsr
County Data Center Complete Complete Complete Ongoing
WAN/External Interface cls Complete Complete Expected Expected
Completion Completion
Jan. 1999 Feb. 1999
Health Services Data Center Complete Complete Expected Expected
Completion Completion
Sept. 1999 Sept. 1999
LAId/Desktop Computers c4f Complete Complete Expected Expected
Completion Completion
June 1999 June 1999
Imbedded Chips Complete Complete Ongoing Ongoing
Due Diligence`'� Complete Complete Ongoing Planned
Community Awareness ' Complete Complete Ongoing Planned
(1) Consists of the mainframe and minicomputer systems that are maintained at the Department of Information
Technology's(DoIT)data center. Most are large-scale applications covering areas of criminal justice,property
taxes,&eneral government,finance,human resources,etc.
(2) The wide area network (WAN) is the network that connects to, and is shared and owned by all County
departments. Maintaining the WAN is the responsibility of DoIT staff. External interfaces are electronic
connections to other County,State,federal and city computer systems and the internet.
(3) Consists of mainframe ani microcomputer systems that are maintained at the Health Services Department data
center. These include applications for patient billing, case management patient and facilities scheduling,
hazardous materials information,quality control and provider information.
(4) ]Local area networks (LANs) are networks of desktop computers and in some cases a minicompputer that are
maintained by individual County departments. Some stand-alone desktop computers are maintained l7y individual
County departments which are also used for important a plications.
(5) Includes any other equipment that contains an unbedded microprocessor. The General Services Department is
coordinating with the other departments to address this equipment.
(6) This is the Count`s process for documenting its planning,methodology,progress,results and present status of the
Year 2000 remediation project. This is done through various means,both electronically and on paper. This also
includes related programs of the Office of Emergency Services,Environmental Health,County Fire, County Sheriff,
pprivate business organizations,etc.
(7) This is the County's program for communicatsin aproac�tive,positive stance with the entire community regarding
the County's readiness to deal with the Year 200 issue.
Source: County Audited Financial Statements for Year Ended June 30,1995.
Trustee. The Trustee has undertaken an effort to evaluate its computer programs in
order to avoid computer problems on and after January 1, 2000. No assurance can be given as
to whether the Trustee will be successful in its efforts to address Year 2000 problems. The
Trustee has advised the Authority that certain information regarding such efforts toward
compliance with the Year 2000 matter is contained in filings by U.S. Bancorp (the corporate
parent of the Trustee) with the Securities and Exchange Commission, the Year 2000-related
provisions of which are incorporated herein by this reference. Further information about U.S.
Bancorp is available on the Internet athttp://www.usbankcom.
DTC. DTC management is aware that some computer applications, systems, and the
like for processing data ("Systems") that are dependent upon calendar dates, including dates
before, on,and after January 1,2000,may encounter"Year 2000 problems." ITC has informed
68
its participants and other members of the financial community (the "Industry") that it has
developed and is implementing a program so that its Systems, as the same relate to the timely
payment of distributions (including principal and income payments) to securityholders, book-
entry deliveries, and settlement of trades within. UTC ("DTC Services"), continue to function
appropriately. This program includes a technical assessment and a remediation plan, each of
which is complete. Additionally,FTC's plan includes a testing phase, which is expected to be
completed within appropriate time frames.
However, DTC's ability to perform its services properly is also dependent upon other
parties, including but not limited to, issuers and their agents, as well as third party vendors
from whom UTC licenses software and hardware,and third party vendors on whom DTC relies
for information or the provision of services, including telecommunication and electrical utility
service providers,among others. DTC has informed the Industry that it is contacting (and will
continue to contact)third party vendors from whom DTC acquires services to: (i) impress upon
them the importance of such services being Year 2000 compliant and(ii) determine the extent of
their efforts for Year 2000 remediation (and, as appropriate, testing) of their services. In
addition,DTC is in the process of developing such contingency plans as it deems appropriate.
Failure to solve the Year 2000 problem could adversely impact the levy and collection of
Tax Revenues which secure the Bonds,and could cause the Agency,the Trustee and/or DTC to
experience problems that may affect the timely payment of debt service on the Bonds.
69
LIMITATIONS ON TAX REVENUES AND POSSIBLE SPENDING LIMITATIONS
Article XIIIA of the California Constitution
California voters, on June 6, 1978, approved an amendment (commonly known as
Proposition 18) to the California Constitution. This amendment, which added Article XIIIA to
the California Constitution, among other things affects the valuation of real property for the
purpose of taxation in that it defines the full cash property value to mean. "the county
assessor's valuation of real property as shown on the 1975-76 tax bill under 'full cash value', or
thereafter, the appraised value of real property when purchased, newly constructed, or a
change in ownership has occurred after the 1975 assessment." The full cash value may be
adjusted annually to reflect inflation at a rate not to exceed 2 percent per year, a reduction in
the consumer price index or comparable local data, or declining property value caused by
damage, destruction or other factors including a general economic downturn. The amendment
further limits the amount of any ad valorem tax on real property to one percent of the full cash
value except that additional taxes may be levied to pay debt service on indebtedness approved
by the voters prior to July 1,1978,and bonded indebtedness for the acquisition or improvement
of real property approved on or after July 1, 1978 by two-thirds of the votes cast by the voters
voting on the proposition.
In the general election held November 4, 1986,voters of the State of California approved
two measures, Propositions 58 and 60, which further amend Article XIIIA. Proposition 58
amends Article XIIIA to provide that the terms "purchased" and "change of ownership," for
purposes of determining full cash value of property under Article XIIIA, do riot include the
purchase or transfer of (1) real property between spouses and (2) the principal residence and
the first$1,000,000 of other property between parents and children.
Proposition 60 amends Article XIIIA to permit the Legislature to allow persons over age
55 who sell their residence to buy or build another of equal or lesser value within two years in
the same county, and to transfer the old residence's assessed value to the new residence.
Pursuant to Proposition 60, the Legislature has enacted legislation permitting counties to
implement the provisions of Proposition 60.
Challenges to Article XIIIA. On. September 22, 1978, the California Supreme Court
upheld the amendment over challenges on several state and federal constitutional grounds
(Atnador Valley Joint Union Nigh School District v. State Board of Equalization). The Court
reserved certain constitutional issues and the validity of legislation implementing the
amendment for future determination in proper cases. Since 1978, several cases have been
decided interpreting various provisions of Article XIIIA;however,none of them have questioned
the ability of redevelopment agencies to use tax allocation financing.The United States Supreme
Court upheld the validity of the assessment procedures of Article XIIIA in Nordlinger v.Kahn.
The Agency cannot predict whether there will be any future challenges to California's
present system of property tax assessment and cannot evaluate the ultimate effect on the
Agency's receipt of Tax Revenues should a future decision hold unconstitutional the method of
assessing property.
Implementing Legislation. Legislation enacted by the California Legislature to implement
Article XIIIA provides that all taxable property is shown at full assessed value as described
above. In conformity with this procedure, all taxable property value included in this Official
Statement (except as noted) is shown at 100 percent of assessed value and all general tax rates
70
reflect the $1 per $100 of taxable value. Tax rates for voter approved bonded indebtedness and
pension liability are also applied to 100 percent of assessed value.
Future assessed valuation growth allowed under Article XIIIA (new construction, change
of ownership, 2 percent annual value growth) will be allocated on the basis of 'situs" among
the jurisdictions that serve the tax rate area within which the growth occurs, except for certain
utility property assessed by the State Board of Equalization. Local agencies and school districts
will share the growth of "base" revenue from the tax rate area. Each year's growth allocation
becomes part of each agency's allocation the following year. The Authority is unable to predict
the nature or magnitude of future revenue sources which may be provided by the State of
California to replace lost property tax revenues. Article XIIIA effectively prohibits the levying of
any other ad valorem property tax above the 1 percent limit except for taxes to support
indebtedness approved by the voters as described above.
Preposition 87
On November 8, 1988, the voters of the State approved Proposition 87, which amended
Article XVI, Section 16 of the California Constitution to provide that property tax revenue
attributable to the imposition of taxes on property within a redevelopment project area for the
purpose of paying debt service on bonded indebtedness approved by the voters of the taxing
entity after January 1, 1989 will be allocated to the taxing entity and not to the redevelopment
agency. Because this provision is not retroactive, the Agency does not believe the provision of
Proposition 87 will have a material adverse effect on the ability of the Agency to pay debt
service on the Bonds.
Allocation of Taxes
Secured taxes are due in two equal installments. Installments of taxes levied upon
secured property become delinquent on December 10 and Apra 10. Taxes on unsecured
property are due March 1 and become delinquent August 31.
The County Auditor-Controller is responsible for the aggregation of the taxable values
assigned by the Assessor as of the January 1 lien date for property within the boundaries of the
Project Areas. This results in the reported total current year Project Area taxable value and
becomes the basis of determining tax increment revenues due to the Agency. Although
adjustments to taxable values for property within the Project Areas may occur throughout the
fiscal year to reflect escaped assessments, roll corrections, etc., such adjustments are not
assumed on the tax increment projection. The County disburses tax increment revenue to all
redevelopment agencies from November through August with approximately 35 percent of
secured revenues apportioned by the end of December and a total of 75 percent of the secured
revenues by the end of the following April. Unsecured revenues are disbursed. in November,
March and August of each year. The November payment consists of an 80 percent advance on
the total unsecured levy.
The County has implemented the Alternative Method of Distribution of Tax Levies and
Collections and of Tax Sale Proceeds (the "Teeter Plan"), which allows each entity levying
property taxes in the County to draw on the amount of property taxes levied rather than the
amount actually collected. Therefore, the Agency's tax revenues reflect the total amount levied
rather than actual collections.
71
Property Tax Collection Procedure
Classifications. In California, property which is subject to ad valorem taxes is classified
as°°secured`° or"unsecured". Secured and unsecured property are entered on separate parts of
the assessment roll maintained by the county assessor. The secured classification includes
property on which any property tax levied by the County becomes a lien on that property
sufficient, in the opinion of the county assessor, to secure payment of the taxes. Every tax
which becomes alien on secured property has priority over all other Herts on the secured
property, regardless of the time of the creation of other liens. A tax levied on unsecured
property does not become alien against unsecured property, but may become alien on certain
other property owned by the taxpayer.
Collections. The method of collecting delinquent taxes is substantially different for the
two classifications of property. The taxing authority has four ways of collecting unsecured
property taxes in the absence of timely payment by the taxpayer: (1) a civil action against the
taxpayer; (2)filing a certificate in the office of the county clerk specifying certain facts in order
to obtain a judgment lien on certain property of the taxpayer; (3) filing a certificate of
delinquency for record in the county recorder's office, in order to obtain a lien on certain
property of the taxpayer; and (4) seizure and sale of the personal property, improvements or
possessory interests belonging or assessed to the assessee.
The exclusive means of enforcing the payment of delinquent taxes with respect to
property on the secured roll is the sale of property securing the taxes to the State for the amount
of taxes which are delinquent.
.Penalties. A 10% penalty is added to delinquent taxes which have been levied with
respect to property on the secured roll. In addition,property on the secured roll on which taxes
are delinquent is declared in default on or about June 30 of the fiscal year. Such property may
thereafter be redeemed by payment of the delinquent taxes and a delinquency penalty, plus a
redemption penalty of 1.5%per month to the time of redemption and a$15 Redemption Fee. If
taxes are unpaid for a period of five years or more, the property is recorded in a "Power to
Sell" status and is,subject to sale by the county tax collector. A 10%penalty also applies to the
delinquent taxes on property on the unsecured roll, and further, an additional penalty of 1-
1/2% per month accrues with respect to such taxes beginning the first day of the third month
following the delinquency date.
Delinquencies. The valuation of property is determined as of January 1 each year and
equal installments of taxes levied upon secured property become delinquent on the following
December 10 and April 10. Taxes on unsecured property are due January. 1. Unsecured taxes
enrolled by July 31,if unpaid,are delinquent August 31 at 5:00 p.m. and are subject to penalty;
unsecured taxes added to roll after July 31, if unpaid, are delinquent on the last day of the
month succeeding the month of enrollment.
Supplemental Assessments. A bill enacted in 1983, SB 313 (Statutes of 1983, Chapter
498), provides for the supplemental assessment and taxation of property as of the occurrence
of a change in ownership or completion of new construction after the January 1 lien date. The
statute may provide increased revenue to redevelopment agencies to the extent that
supplemental assessments as a result of new construction or changes of ownership occur within
the boundaries of redevelopment projects subsequent to the Tien date. To the extent such
supplemental assessments occur within the Project Area,Tax Revenues may increase.
72
Supplemental property tax receipts for the Project Areas over the past four years are set
forth below:
Project Area 1994-95 1995-96 1996-97 1997-98
Pleasant Hill BART $33,366 $202,014 $56,421 $26,015
North Richmond 15,382 19,174 54,009 19,958
W.Pittsburg/Bay Point 61,922 41,176 30,1011 63,873
Rodeo 107,007 24,739 15,323 36,517
Oakley 87,928 24,533 51,137 46,435
Source: Katz Hollis.
Educational Revenue Augmentation Fund (""ERAF"). In connection with its approval of a
budget for fiscal year 1993-94, the State Legislature enacted Senate Bill 1135 which, among
other things, reallocated tax increment money from redevelopment agencies to school districts.
Since fiscal year 1994-95, the State has not diverted property tax increment from
redevelopment agencies to other agencies in the State. However, the Katz Hollis report
attached hereto as Appendix C indicates that the County continues to utilize tax rate area
percentage factors that have been adjusted for ERAF in calculating 33676 allocations and tax
sharing payments,thereby increasing net tax increment revenue to the Agency. The various tax
increment projection tables set forth herein are based upon allocation factors that are not
adjusted for ERAF.
Tax Collection Fees
SB 2557 (Chapter 466, Statutes of 1990) authorizes county auditors to determine
property tax administration costs proportionately attributable to local jurisdictions.
Subsequent legislation specifically includes redevelopment agencies among the entities which are
subject to a property tax administration charge. The estimated 1998-99 SB 2557 charges, based
upon the actual SB 2557 charges to the Agency for fiscal year 1997-98,are as follows:
Project Estimated 1998-99 Estimated°i gf 1998-99
A_ res 5B 25
37 Total Tax Increment
Pleasant Hill BART $31,000 1.10%
North Richmond 71000 1.07
West Pittsburg/Bay Point 11,000 0.83
Rodeo 14,000 0.97
Oakley 5,000 1.13
The County deducts the SB 2557 charge from gross tax increment revenues before
distributing any tax increment revenues to the Agency. As a result, the amount of the SB 2557
charge in each year will not be available to pay debt service on the Bonds.
Unitary Property
AB 454 (Statutes of 1987, Chapter 921) modifies the distribution of tax revenues
derived from property assessed by the State Board of Equalization. Chapter 921 provides for
the consolidation of all State-assessed property, except for non-operating, non-unitary and
regulated railroad property, into a single tax rate area in each county. Chapter 921 further
provides for a new method of establishing tax rates on State-assessed property and
distribution of property tax revenues derived from State-assessed property to taxing
jurisdictions within each county in accordance with a new formula. Railroads will continue to be
assessed and revenues allocated to all tax rate areas where railroad property is sited. Chapters
73
1457 and 921 provide redevelopment agencies with their appropriate share of revenue
generated from the property assessed by the State Beard of Equalization.
State Beard of Equalization and Property Assessment Practices
Can. December 10, 1998, the State Board of Equalization ("SBOE") approved revisions
to its guidelines regarding the valuation of intangible business and commercial property for
property tax purposes. The SBOE approved these revisions over the strong objections of the
California Assessors Association ("CAA"), an organization representing all 58 County
Assessors in California. Prior to modification of the revised guidelines, SBOE staff estimated a
Statewide loss of $2.23 billion in property tax revenues. After modification of the revised
guidelines, SBOE staff revised its estimated loss to $4.36 million Statewide. however, the
CAA has indicated in a media release dated December 10, 1998 that it does not believe that the
modification to the revised guidelines will,minirnize the Statewide loss of property tax revenues
to the extent claimed by SBOE staff.
The County Assessors are not required by law to follow these guidelines,and the Contra
Costa County Assessor has indicated that he considers the guidelines to be advisory and will
not follow the new guidelines.
The Agency is not able to predict,at this time, whether the revised SBOE guidelines will
cause any reduction in its Tax Revenues. However, the Agency does not believe that the
SBOE's adoption of the revised guidelines will affect its ability to pay repay the Loans.
Article XIIIB of the California Constitution
On November 6, 1979, California. voters approved Proposition 4 which added Article
XM to the California Constitution, which has been subsequently amended several times. The
principal effect of Article XIIIB is to limit the annual appropriations of the State and any city,
county, school district, authority or other political subdivision of the State to the level of
appropriations for the prior fiscal year,as adjusted for changes in the cost of living,population
and services rendered by the government entity. The base years for establishing such
appropriation limit is fiscal year 1986-87 and the limit is to be adjusted annually to reflect
changes in population, cost of living and certain increases in the cost of services provided by
these public agencies.
Appropriations subject to Article XIIIB include generally the proceeds of taxes levied by
the State or other entity of local government, exclusive of certain State subventions, refunds of
taxes, benefit payments from retirement, unemployment insurance and disability insurance
funds.
Effective September 30, 1980, the California Legislature added Section 33678 to the
Health and Safety Code which provides that the allocation of taxes to a redevelopment agency
for the purpose of paying principal of,or interest on, loans, advances, or indebtedness will not
be deemed the receipt by the agency of proceeds of taxes levied by or on behalf of the agency
within the meaning of Article XIIIB or any statutory provision enacted in implementation
thereof. The constitutionality of Section 33678 has been upheld by the Second and Fourth
District Courts of Appeals in two decisions Bell Community Redevelopment Agency v. Woosely
and Brown v. Community Redevelopment Agency of the City of Santa Arca, which cases were not
accepted for review by the Supreme Court.
74
Proposition 218
On November 5, 1996, California voters approved Proposition 218-Voter Approval for
Local Government Taxes - Limitation on Fees, Assessments, and Charges - Initiative
Constitutional Amendment. Tax Increment Revenues securing the Agency's obligations to mare
payments on the Loans are derived from property taxes, which are outside the scope of taxes,
assessments and property-related fees and charges which were limited by Proposition 218,
AB 1290
In 1993,the California Legislature enacted AB 1294,which mandated a limitation on the
period of time for incurring and repaying loans, advances and indebtedness which are payable
from Tax Revenues. AB 1342, passed in 1998 and effective January 1, 1999, permits agencies
having redevelopment plan limits shorter than those permitted by AB 1290 to amend their
plans to incorporate the maximum permitted limits without complying with the statutory plan
amendment process. The Board adopted ordinances implementing AB 1294 in 1994 and, on
February 23, 1999, adopted ordinances implementing AB 1342. See the discussions entitled
""Redevelopment Plan Limitations"" in each of the five sections relating to the Project Areas
above.
Future Initiatives
Article XIIIA, Article XIIIB and certain other propositions affecting property tax levies
were each adopted as measures which qualified for the ballot pursuant to California's initiative
process. From time to time other initiative measures could be adopted, further affecting Agency
revenues or the Agency's ability to expend revenues.
75
VERIFICATION OF MATHEMATICAL ACCURACY
Causey, Demgen & Moore, Denver, Colorado, Certified Public Accountants, upon
delivery of the Bonds, will deliver a report on the mathematical accuracy of certain
computations, contained in schedules provided to them which were prepared by the Agency,
relating to the sufficiency of the anticipated receipts from the Escrow Securities to pay, when
due, the principal, whether at maturity or upon prior prepayment, interest and prepayment
premium requirements of the 1992 Loans being prepaid.
The report.of Causey, Demgen & Moore, will include the statement that the scope of
their engagement is limited to verifying the mathematical accuracy of the computations
contained in such schedules provided to them,and that they have no obligation to update their
report because of events occurring,or data or information coming to their attention, subsequent
to the date of their report.
LMGATION
There is no litigation pending or, to the Agency's knowledge, threatened in any way to
restrain or enjoin the issuance,execution or delivery of the Bonds, to contest the validity of the
Bonds,the Indenture, the Loan Agreements or any proceedings of the Authority or the Agency
with respect thereto. In the opinion of the Authority, the Agency and its counsel, there are no
lawsuits or claims pending against the Authority or the Agency which will materially affect the
Authority's or the Agency's finances so as to impair the ability to pay principal of and interest
on the Bonds when due.
RAT1IGS
[TO COME]
TAX MATTERS
In the opinion of Quint & Tttirrumig LLP, San Francisco, California, Bond Counsel,
subject, however, to the qualifications set forth below, ander existing law, the interest on the
Bonds is excluded from gross income for federal income tax purposes and such interest is not
an item of tax preference for purposes of the federal alternative minimum tax imposed on
individuals and corporations, provided, however, that for purposes of computing the
alternative minimum tax imposed on corporations (as defined for federal income tax purposes)
such interest is taken into account in determining certain income and earnings.
The opinions set forth in the preceding paragraph are subject to the condition that the
Authority and the Agency comply with all requirements of the Code that must be satisfied
subsequent to the delivery of the bonds in order that such interest be, or continue to be,
excluded from gross income for federal income tax purposes. The Authority and the Agency
have covenanted to comply with each such requirement. Failure to comply with certain of such
requirements may cause the inclusion of such interest in gross income for federal income tax
purposes to be retroactive to the date of delivery of the Bonds. Bond Counsel expresses no
opinion regarding other federal tax consequences arising with respect to the Bands.
76
In the further opinion of Bond Counsel, interest on the Bonds is exempt .from California
personal income taxes.
CERTAIN LEGAL MATTERS
The legal opinion.of Bond Counsel,approving the validity of the Bonds, in substantially
the form attached hereto as Appendix E, will be made available to purchasers at the time of
original delivery of the Bonds,and a copy thereof will be printed on each Bond. Certain matters
will be passed upon for the Agency by Goldfarb & Lipman, San Francisco, California, as
Agency Counsel.
Payment of the fees of Quint & Thimmig LLP, as Bond Counsel to the Authority, and Jones
Hall, A Professional Law Corporation, as disclosure counsel to the Authority, is contingent upon
issuance of the Bonds.
UNDERWTUTING
Stone & Youngberg LLC (the "Underwriter") has agreed to purchase the Bonds at a
purchase price of (being the principal amount of the Bonds ($ ) net of an
original issue discount of$ - anal underwriter's discount of $ ), plus accrued
interest. The initial public offering prices of the Bonds may be changed from time to time by the
Underwriter. The purchase contract relating to the Bonds provides that the Underwriter will
purchase all the Bonds if any are purchased, and that the obligation to make such purchase is
subject to certain'term and conditions set forth in the purchase contract, including, among
others,the approval of certain legal matters by counsel.
MISCELLANEOUS
All summaries of the Indenture,the Loan Agreements,the Escrow Agreement, applicable
legislation, agreements and other documents are made subject to the provisions of such
documents and do not purport to be complete statements of any or all of such provisions.
Deference is hereby made to such documents on file with the Authority for further information in
connection.therewith.
Any statements made in this Official Statement involving matters of opinion or of
estimates,whether or not expressly stated, are set forth as such and not as representations of
fact,and no representation is made that any of the estimates will be realized.
The execution and delivery of this Official Statement has been duly authorized by the
Authority.
COUNTY OF CONTRA COSTA PUBLIC
FINANCING AUTHORITY
By;
77
APPENDD(A
SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS
APPENDIX E
AUDITED►FINANCIAL STATEMENTS OF THE AGENCY
FOR FISCAL YEAR ENDED JUNE 30,1998
APPENDIX C
FISCAL CONSULTANT REPORT
A.PPENDIX D
GENERAL INFOWMATION ABOUT THE COUNTY OF CONTRA COSTA
General
Situated northeast of San Francisco, Contra Costa County (the "'County"') is bounded
by San Francisco and San Pablo`Says,the Sacramento River Delta, and by Alameda County on
the south. Ranges of hills effectively divide the County into three distinct regions. The western
portion, with its access to water, contains much of the County's heavy industry. The central
section is rapidly developing from a suburban area into a major commercial and financial
headquarters center. The eastern part is also undergoing substantial change, from a rural,
agricultural area, to a suburban region. The County has extensive and varied transportation
facilities-ports accessible to ocean-going vessels, railroads, freeways, and rapid transit lines
connecting the area with Alameda County and San Francisco.
The County is home to more than 868,000 people and thousands of businesses who are
served by 18 cities, 201 special districts and the County. The County also provides municipal
services for the 170,000 residents of the unincorporated areas.
Municipal Go erranent
The County has a general law form of government. A five-member Board of Supervisors,
each of whom. is Jelected to a four-year term, serves as the County's legislative body. Also
elected are the County Assessor, Auditor-Controller, Clerk-Recorder, District Attorney-Public
Administrator,Sheriff-Coroner and Treasurer-Tax Collector. A County Administrative Officer
appointed by the hoard of Supervisors runs the day-today business of the County.
Population
The California State Department of Finance reported that the County's population was
900,700 as of January 1998, an increase of 12.9 percent since 1990. The County's population
grew 21.5 percent during the 1980's,a moderate acceleration from the 17.7 percent growth rate
achieved in the decade of the 1970's.
Population figures for the cities and unincorporated areas of County for the last five
years are shown in the following table.
D-1
COUNTY OF CONTRA COST'.A,
Population Estimates
1994 1U9 122� 122-7
Antioch 71,200 . 73,240 74,900 77,200 79,300
Brentwood. 10,340 11,550 13,200 14,600 17,000
Clayton 8,475 3,750 9,425 10,100 10,600
Concord 112,300 11.1,940 112,000 112,800 113,440
Danville 34,450 35,754 37,1.00 38,450 39,154
El Cerrito 23,254 23,250 23,300 23,500 23,6403
Hercules 18,600 18,600 18,800 18,950 19,050
Lafayette 23,550 28,554 23,640 23,800 24,000
Martinez 35,050 35,140 35,200 35,654 36,100
Moraga 16,440 16,300 16,354 16,450 16,.550
Grind a 16,850 16,850 16,900 17,054 17,150
Pinole 18,050 18,144 18,150 18,354 18,450
Pittsburg 50,000 54,440 50,500 51,300 52,.240
Pleasant Hill 31,640 31,500 31,554 31,750 32,500
Richmond 91,300 90,900 91,100 92,140 92,800
San Pablo 25,800 26,000 26,000 26,150 26,400
Sart Ramon 39,000 39,950 40,750 42,340 43,500
Walnut Creek 61,900 62,000 62,1.00 62,800 63,200
Unincorporated 167,$ 7 Ell 1731 175
Tota. 856,000 8631300 872,600 887,200 900,700
Source:State Department of Finance estimates(as of January 1)
Employment
The County is included in the Oakland Metropolitan Statistical Area. The following
table summarizes the annual average civilian labor force,employment and unemployment in the
County for the calendar years 1994 through 1997 and the monthly average for December 1998.
U-2
OAKLAND METROPOLITAN STATISTICAL AREA
(CON`TRA COSTA ANIS ALAMEDA COUNTIES)
Civilian Labor Force,Employment and Unemployment
12L4 1995 1996129-7L9 (1)
Civilian Labor Force(2) 1,137,400 1,138,100 1,144,300 1,175,800 1,196,600
Employment 1,067,500 1,072,700 1,087,700 1,125,300 1,158,600
Unemployment 69,900 65,400 56,600 50,500 38,000
Unemployment Rate 6.1% 5.7% 4.9% 4.3% 3.2%
Yoagg and S llw:y E nployrnent: 1'>
Total All Industries 879,800 899,600 918,500 953,100 1,000,700
Agriculture 2,500 2,200 2,100 2,200 11500
Nonagricultural Industries 877,400 897,500 916,400 950,900 999,200
Mining 2,800 2,300 2,200 2,300 2,300
Construction 40,700 43,200 46,600 50,400 56,400
Manufacturing 102,300 108,100 114,600 119,500 120,000
Transportation,Public Utilities 57,300 58,300 58,500 60,700 63,300
Wholesale Trade 52,700 53,300 55,500 59,400 62,700
Retail Trade 151,800 152,100 152,500 154,600 165,300
Finance,insurance,Real Estate 56,500 52,900 52,100 54,600 56,000
Services 244,400 257,500 266,200 280,100 297,700
Government 169,900 169,800 168,200 169,400 175,500
(") Preliminary data not adjusted for seasonality,as of December 1998.
(2) Labor force data is by place of residence;includes self-employed individuals, unpaid family workers, household
domestic workers,and workers on strike.
(3) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household
domestic workers,and workers on strike.
Source:Labor Division of the California State Employment Development Department.
Largest Employers
Major industries in the County include petroleum relining, steel manufacturing,
prefabricated metals, chemicals, electronic equipment, paper products, services and food
processing. Most of the County's heavy manufacturing is located along the County's northern
boundary fronting on the Suisun and San Pablo Bays leading to San Francisco Bay and the
Pacific Ocean. Descriptions of major employers in selected industries follow.
Petroleum and Petroleum Products. The production of petroleum products formed time
initial basis of industrial development in the County. Currently, three companies manufacture
products from crude oil. The largest in terms of capacity is Chevron Corporation's ("Chevron')
Richmond Refinery, which began operations in 1902 and is the company's oldest and third-
largest refinery. The Richmond refinery, located on 3,000 acres, has a capacity of 365,000
barrels per day. The refinery produces a complete line of petroleum products and imports the
bulk of time crude oil from Alaska. Shipping facilities include the company's own wharf, which
is capable of handling four tankers at a time, making it the largest in the Bay Area in terms of
tonnage. Chevron operates a fleet of 37 tankers, of which seven are for intrastate business.
Petroleum products are. also shipped by truck and by two railroad carriers as well as
distributed by pipeline. The company has completed construction of a $160 million natural gas
fired cogeneration plant to fulfill its own requirements for electricity and steam,.
A number of Chevron's divisions are located throughout the County. Chevron Products
Company is located in Richmond where 1,777 employees work at an oil refinery and
management office. Chevron Research and Technology Company, located in Richmond, is the
only non-geological research arm of the company. This facility employs 402 people and is used
Dm3
by Chevron Research in its continuing program to improve the efficiency of conventional auto,
aircraft and marine fuels. Chevron Accounting Division is located in a 400,000 square foot
building in Concord where 1,328 employees operate the accounting and credit card center for
Chevron's entire domestic operations. Chevron also operates a facility in San Ramon where
2,397 employees are involved in computer, marketing, consumer services and other
administrative functions and in Walnut Creek where 246 employees work in various divisions.
Shell Oil Company, recently merged with Texaco to become Equilon Enterprises LLC
("Equilon"),began operating in Martinez in 1915. The Martinez Refining Company, located on
1,10€1 acres,is a combined oil refinery and industrial chemical production plant. It is one of the
three facilities on the West Coast that supplies all Shell-based brand products to the western
states. The complex currently has the capacity to process about 145,000 to 160,000 barrels of
crude oil per day. About 70 to 80 percent of this crude oil is transferred via the company's
pipeline from California oil fields, while the remainder is shipped from Alaska. Equilon's
docking facilities can handle two tankers and two barges simultaneously. Finished petroleum
products are shipped via a company owned pipeline, Southern Pacific Railroad's pipeline, and
by rail car and truck.
Tosco Refining Company, a wholly owned subsidiary of Tosco Corporation ("Tosco"),
operates an oil refinery at Rodeo between the cities of Richmond and Martinez, a distribution
terminal for Northern California at Richmond. The company began operations in 1896, and
occupies 1,100 acres and processes up to 100,000 barrels of raw materials per day. There are
600 full-bane employees at the refinery and 75 at the distribution terminal.. Tosca also operates
a second refinery with a capacity of 150,000 barrels per day at Avon near Martinez and a
carbon plant on Franklin Canyon Road near Highway 4 in the County. '.Total Tosco
employment in the County is approximately 1,200. Tosco recently announced a major
restructuring of its Sar:. Francisco Area Refinery Complex, which includes the facilities at
Richmond and rodeo. This restructuring will affect production capacity but is not expected to
have a major impact on employment. [DISCUSS CLOSURE]
Healthcare. One of the Bay Area's largest private employers, Kaiser Permanente Medical
Group has approximately 3,300 employees in the County. Kaiser provides medical coverage to
about one in three Bay Area residents and operates hospital and clinic facilities in Martinez,
Antioch and Walnut Creek and is scheduled to open a major facility in Richmond in 1999.
Telephone Serz*es. The San Ramon Chamber of Commerce has reported that SBC
(formerly known as "Pacific Telesis"), a major provider of telephone services, employs
approximately 7,500 people at it Bishop Ranch offices in the County.
The following tables list the largest private employers within the County and their
estimated number of employees:
D-4
COUNTY OF CONTRA COSTA
Largest Employers
As of,January 1998
Number of
Tees of BusinessEmployke
SBC Telephone services 7,500
Chevron/Credit Card Enterprise Accounting and credit card center 2,300
Radian International Environmental consultants 2,000
John Muir Medical Center Regional trauma.center 1,950
Kaiser Permanente Medical Center General medical and surgical hospital 1,600
Chevron/Richmond Refinery Petroleum refinery and management office 1,400
Mt.Diablo Medical Center Hospital 1,134
Diablo Valley College Community College 1,110
Bio Rad Laboratories Manufactures chemical products 1,000
USS-POSCO Industries Produces cold-roiled.,galvanized,tin plate sheet steel 990
Shell Martinez Refining Co Manufacturer and distributor 900
Contra Costa Newspaper Inc. Newspaper Publisher 900
Source: 1998 Contra Costa County Commerce&Industry Directory.
Effective Buying Income
"Effective Buying Income" is defined as personal income less personal tax and nontax
payments, a number often referred to as "disposable" or "after-tax"' income. Personal .income
is the aggregate of wages and salaries, other labor-related income (such as employer
contributions to private pension funds), proprietor's income, rental income (which includes
imputed rental income of owner-occupants of non-farm dwellings), dividends paid by
corporations, interest income from all sources, and transfer payments (such as pensions and
welfare assistance). Deducted from this total are personal taxes (federal, state and local),
nontax payments (fines, fees, penalties, etc.) and personal contributions to social msurance.
.According to U.S. government definitions, the resultant figure is commonly known as
"disposable personal income."
Due to changes implemented in 1996 in the method of calculating Effective Buying
Income,prior years are not directly comparable with statistics for 1996. The following table
summarizes the total effective buying income for the County,the State and the United States for
the period 1993 through 1997.
D-5
COUNTY OF CONTRA COSTA
Effective Buying Income
As of January 1,1993 through 1997
Total Effective Median Household
Buying Income Effective Buying
XQU A= (OW's Qmittd hic
1993 Contra Costa County $ 17,511,603 $47,305
California 509,152,677 37,686
United States 3,916,947,023 33,173
1994 Contra Costa County $ 18,241,412 $49,295
California 528,958,745 39,330
Unrted States 4,169,724,052 35,0156
1995 Contra Costa County $ 19,391,942 $51,814
California 552,074,838 401.969
United States 4,436,178,724 37,070
199{ 0i) Contra Costa County $ 17,251,252 $45,119
California 477,640,503 34,533
United States 3,964,285,118 32,258
1997 (l) Contra Costa County $ 17,773,391 $46,468
California 492,.516,991 35,216
United States 4,161,512,.384 33,482
is) Not comparable with prior years. Effective Buying Inde is now based on
mone income(which does not take into account sale of property,taxes and
social security paid.,receipt of food stamps,etc.)versus personal income.
Source: Sales&Marketing Management Survey of Buying Power.
Commercial Activity
During calendar year 1997, total taxable transactions in the County were
$9,277,418,000, or 8.2% greater than total taxable transactions of $8,575,704 that occurred in
the County during 1996. A summary of historic taxable sales within the County during the past
five yeas is shown in the following table.
COUNTY OF CONTRA COSTA
Taxable Transactions
(dollars in thousands)
Retail Stores Total.Outlets
Taxable Taxable
YearPear Transacti Fermi Tianaactiorss
1993 13,049 $5,266,404 23,781 $7,476,420
1994 13,493 5,353 437 24,434 7,818,165
1995 12,949 5,6038,735 24,343 8,339,755
1996 12,223 5,945,099 24,326 8,575,704
1997 11,798 6,556,188 23,643 9,277,418
Source: California State Board of Equalization.
D-6
Construction Activity
Building activity for the past five years in the County is shown in the following table.
COUNTY OF CONTRA COSTA
Building Permit Valuations
Valuation(S's i millions) N=htr of New Dwelling Tn'
New Sin&le Multi
Year Residential Nonresidential 2_taj Family EMU Total
1988 $785,925 $214,201 $1,000,126 5,853 2,171 8,024
1989 863,313 264,020 1,127,833 5,504 2,219 7,723
1990 560,193 252,443 812,636 3,132 1,149_ 4,281
199: 488,939 196,165 685,104 2,705 1,275 3,980
1992 638,714 207,099 845,813 3,279 614 3,893
1993 590,135 183,156 773,391 3,026 451 3,477
1994 699,395 166,160 865,555 3,682 230 3,912
1995 619,685 190,443 810,128 2,137 618 3,755
1996 584,108 n/a n/a 3,094 450 3,580
1997 582,793 n/a n/a 3,105 381 3,466
Source: Economic Sciences Corporation
D-7
APPENDIX E
FORM OF BOND COUNSEL OPINION
APPENDIX P
FORM OF CONMNUING DISCLOSURE CERTIFICATE
(?cant&T:hiwimg LL: 10/23/98
2/2/99
INDEN`T`URE OF TRUST
by and between the
COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY
and
U.S.BANK TRUST NATIONAL ASSOCIATION,
as Trustee
Dated as of March 1, 1999
Relating to:
County of Contra Costa Public Financing Authority
1999 Tax Allocation Revenue Bonds
(Pleasant Hill BART,North Richmond,Bay Point,Rodeo
and Oakley Redevelopment Project Areas)
03012.01:J4084
'
TABLE OF CONTENTS
ARTICLE
DEFINITIONS; AUTHORIZATION AND PURPOSE [FBONDS; EQUAL SECURITY
Section 1.01. [}efin6tious.......................... .......................................................'. 3
Section 1.02. I�leoofx�uosboc�oo..........................................................................................10
Section 1.03. Authorization and Purpose of Bonds....... ..................................... ......................I0
Section1.04. 2qoe]Security....................................................................................................1O
ARTICLE II
ISSUANCE (]FTHE BONDS
Section2.01. Terms c6the Bonds............................................................................................12
Section 2.02. Redemption of the Bonds.................. ................................ .......... ...............13
Section 2.03, Form ofthe Bonds.................................................................. 15
Section 2.04. Execution of Bonds................................ - ...................................... -----...15
Section 2.05. Transfer of Bonds........ — ................... ......................................... ..................16
Section 2.06. Exchange f Bonds .............................................. ................... ...............16
Section 2.07. --------------------------..--..16
Section 2.08. Bonds Mutilated,Lost,Destroyed*zStolen............................ .............................l6
Section2.09. 8 ..... .......................................... ...................................---...16
ARTICLE III
DEPOSIT AND APPLICATION OF PROCEEDS OFBONDS
Section 3.01. Issuance of Booda—....—. ....................................................................................1g
Section 3.02. Application ofProceeds ofSale ofBonds............... ..................................... ...Iy
Section3.03. Loan Fund.............................................................................—........'................I9
Section 3.04. Costs ofIssuance Fund........................................................................................19
Section 3.05. Loan Disbursement Funds..................................................................................19
Section3.06, Reserve Funds................................ .......................................... .......................1A
Section3.07. Program Fund...... ........................................................... .......... ......................2O
Sect-i on 3.08. Validity ufBonds.......................................... ....................................... ---...20
ARTICLE IV
REVENUES; FLOW OF FUNDS
Section 4.01. Pledge fRevenues; Assignment ofRights................................................. 21
Section 4.02. Receipt,Deposit and Application of Revenues........................................ ............21
Section4.03. Investments.......................................................................—........ ................22
Section 4.04. Valuation and Disposition ofInvestments............—.............................................23
ARTICLE
COVENANTS [FTHE AUTHORITY
Sect--"on 5.01. Punctual Payment ....................................24
Section 5.02. Extension of Payment m{ Bonds........................................'...................................24
Section 5.03. AgainstEncumbrances.......................................................................................24
Section 5.04. Power toIssue Bonds and Make Pledge.and Assignment------------.24
Section 5.05. Accounting Records and Financial Statements.............................. ........ ..............24
Section 5.06. NoAdditional Parity I}mb ---------------------..24
Section 5.07. Tax Covenants ---------------__'____25
Section 5.08. Rebate ofExcess Investment Earnings toUnited States...-- ................... ..........25
Section 5.09. Loan Agreements--------'.----------------------_26
Section5.,8. Waiver ofLaws...............—.................................... ...........................................28
Section S.1I. Continuing Disclosure.................................. ................ ....................... ...........28
SectWnEi12. Further Assurances...........................-- ...........................................................28
---- -- - -
^
ARTICLE VI
THE TRUSTEE
Section 6.O1. Appointment ofTrustee......................................................................................29
Section 6.02. Acceptance ofTrusts........................... ................................................'.............29
Section 6.03. Fees, Chargee and Expenses of Trustee............................... ................... ............31
Section 6.04. Notice to Bond {)vvnero of Default.......................... .................... ...... .................81
Section 6.05. Intervention by 7rotee................... ............................................... .........31
Section 6.06. Removal of Trustee................................................._.........................................�31
Section 6.07. Resignation by Trustee ............................................................ ..........32
Section 6.08. Appointment of Successor Trustee........................... .......................... ................32
Section6.09. ................................-------------- .........32
Section 6.10. Concerning any Successor Trustee.---------------.--_-----32
Section -----------------------..32
Secdoo6.l2. Limited Liability mfTrustee--.-----------._---..33
ARTICLE VII
MODIFICATION, AND AMENDMENT OF THE INDENTURE
Section 7.01. Amendment fIerenf—...'. ........................................................... ......................34
Section 7.02. Effect of Supplemental Indenture............................. ...........................................34
Section 7.03. Endorsement or Replacement of Bonds After Amendment...................................35
Section 7.04. Amendment 6yMutual Consent....................................................... .................35
ARTICLE VIII
EVENTS OFDEFAULT AND REMEDIES
Section 8.01. Events mfDefault................................................................................................36
Section 8.02. Remedies Upon Event nfDefault........................................................................36
Section 8.03. Application of Revenues and Other Funds After Default................. —.................37
Section 8.04, Power ofTrustee boControl Proceedings.........'....................^.......................'.....37
Section 8.05. Appointment ofRecelvpzo.................................................................... ...........38
Section8.06, Non-Waiver............................................................... ......................'................38
Section 8.87. Rights and Remedies of Bond Owners............--.......... ................................. ..38
Section 8.O8. Termination ofProceedings.................................................................. 30
ARTICLE IX
MISCELLANEOUS
Section 9.01. Limited Liability of Authority ............'..............................................'. ...40
Section 9.02. Benefits odIndenture Limited tnParties.................................. .......................4Q
Section 9.03. Discharge ofIndenture.......................................................................................4O
Section 9.04. Successor ImDeemed Included boAll References toPredecessor............................41
Section 9.05. Content ofCertificates.........................................................................................41
Section 9.06. Execution of Documents by Bond Owners,.........................................................,4I
Section 9.07. Disqualified Bonds.......... ............. ......................... ..........................................42
Section 9.00. Waiver of Personal Liability........................................................................ '.42
Section9.09. PartialInvalidity.............................................................................................42
Section 9.10, Destruction ufCancelled Bonds...........................................................................42
Section 9.D. Funds and Accounts.................................................. ................ ..................42
Section 9.12. PaymentooBusiness Days.......................................... ..........'..........................42
Section9.13. Notices...............................................................................................................43
Section 9.14. Unclaimed Moneys................................................................................ ............43
Section9.15. Governing Law..................................................................................................44
EXHIBIT&—FORM{)FBONDS
�
INDENTURE OF TRUST
THIS INDENTURE OF TRUST (this "Indenture"), made and entered into as of March 1,
1999, is by and between the COUNTY OF CONTRA COSTA PUBLIC FINANCING
AUTHORITY, a joint powers authority organized and existing under the laws of the State of
California (the "Authority"), and U.S. BANK TRUST NATIONAL ASSOCIATION, a national
banking association organized and existing under the laws of the United States of America
having a corporate trust office in San Francisco, California, and being qualified to accept and
administer the trusts hereby created (the "Trustee").
WITNESSETH;
WHEREAS, the Authority is a joint exercise of powers authority duly organized and
existing under and pursuant to that certain joint Exercise of Powers Agreement, dated April 7,
1992, by and between the County of Contra Costa (the "County") and the Contra Costa
County Redevelopment Agency(the "Agency"), and under the provisions of Articles 1 through
4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code
of the State of California (the "Act"), and is authorized pursuant to Article 4 of the Act (the
"Bond Law") to borrow money for the purpose of financing the acquisition of bonds, notes and
other obligations of, or for the purpose of making loans to, the County, the Agency and any
associate member to provide financing for public capital improvements of the County, the
Agency and any associate member; and
WHEREAS,for the purpose of providing funds to refinance certain outstanding loans by
the Authority to the Agency and thereby refund certain outstanding bonds of the Authority,
and to finance redevelopment projects of the Agency in its Pleasant Hill BART Station, North
Richmond, Bay Point, Rodeo and Oakley Redevelopment Project Areas, the Authority has
agreed to make five loans (collectively, the "Loans") to the Agency in the aggregate amount of
$ under and pursuant to five separate loan agreements (collectively, the "Loan
Agreements"),each by and between the Authority and the Agency;and
WHEREAS, in order to raise the funds required to make the Loans under the Loan
Agreements, the Authority has determined to issue its County of Contra Costa Public Financing
Authority 1999 Tax Allocation Revenue Bonds (Pleasant Hill BART, North Richmond, Bay
Point, Rodeo and Oakley Redevelopment Project Areas) in the aggregate principal amount of
(the "Bonds"), all pursuant to and secured by this Indenture in the manner provided
herein;and
WHEREAS, the Board of Supervisors of the County held a public hearing, after due
public notice, pursuant to Section 6586.5(a)(2) of the Bond Law with respect to the
improvements to be financed with the proceeds of the Loans, all of which improvements will be
located in the County; 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, premium (if any) and interest thereon, the
Authority has authorized the execution and delivery of this Indenture; and
WHEREAS, the Authority has found and determines, and hereby affirms, that all acts
and proceedings required by law necessary to make the Bonds,when executed by the Authority,
authenticated and delivered by the'Trustee and duly issued,the valid,binding and legal special
obligations of the Authority, and to constitute this Indenture a valid and binding agreement for
the uses and purposes herein set forth in accordance with its terms, have been done and taken,
and the execution and delivery of this Indenture have been in all respects duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the
payment of the principal of and the interest and premium (if any) on all Bonds at any time
issued and Outstanding under this Indenture, 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 repaid, and in consideration of the premises and of the mutual covenants herein contained
and of the purchase and acceptance of the Bonds by the Owners thereof, and for other valuable
consideration the receipt and sufficiency of which is hereby acknowledged,the Authority does
hereby covenant and agree with the Trustee, for the benefit of the respective Owners from time
to time of the Bonds, as follows:
2
ARTICLE I
DEFINITIONS;AUTHORIZATION AND PURPOSE OF BONDS;EQUAL SECURITY
Section 1.01. Definitions. Unless the context otherwise requires, the terms defined in
this Section 1.01 shall for all purposes of this Indenture and of any Supplemental Indenture and
of the Bonds and of any certificate, opinion, request or other documents herein mentioned have
the meanings herein specified. In addition, all terms defined in Section 1.01 of the Loan
Agreement and not otherwise defined in this Section 1.01 shall have the respective meanings
given such terms in the Loan Agreement.
"Act" means Articles 1 through 4 (commencing with Section 6500) of Chapter 5,
Division 7, Title 1 of the Government Code of the State, as in existence on the Closing Date or
as thereafter amended from time to time.
"A n .v," means the Contra Costa County Redevelopment Agency, a public body
corporate and politic organized under the laws of the State, and any successor thereto.
"Authority", means the County of Contra Costa Public Financing Authority, a joint
powers authority duly organized and existing under the Joint Exercise of Powers Agreement,
dated April 7, 1992, by and between the County and the Agency, and under the laws of the
State.
"Board" means the Board of Directors of the Authority
"Bond Counsel" means (a) Quint 8r. Thimmig LLP, or (b) any other attorney or firm of
attorneys appointed by or acceptable to the Agency of nationally-recognized experience in the
issuance of obligations the interest on which is excludable from gross income for federal income
tax purposes under the Tax Code.
"Bond Law" means the Marks-Roos Local Bond Pooling Act of 1985, constituting
Article 4 of the Act (commencing with Section 6584), as in existence on the Closing Date or as
thereafter amended from time to time.
"Bond Year" means each twelve-month period extending from August 2 in one calendar
year to August 1 of the succeeding calendar year, both dates inclusive; except that the first
Bond Year shall begin on the Closing Date and end on August 1, 1999.
"Bonds" means the $ aggregate principal amount of County of Contra Costa
Public Financing Authority 1999 Tax Allocation Revenue Bonds (Pleasant Hill BART, North
Richmond, Bay Point, Rodeo and Oakley Redevelopment Project Areas) authorized by and at
any time Outstanding pursuant to the Bond Law and this Indenture.
"Business Day" means a day of the year, other than a Saturday or Sunday, or legal
holiday on which banks in the State of California are required or authorized to remain closed.
"Certificate of the Authority" means a certificate in writing signed by the Chair,
Executive Director, Assistant Executive Director, Deputy Executive Director, Secretary or
Treasurer of the Authority, or by any other officer of the Authority duly authorized by the
Board for that purpose,written notice of which shall be given to the Trustee.
3
"CCl�sina Date" means March 1999, being the date of delivery of the Bonds to the
original purchasers thereof.
"Continuing`Disclosure Certificate" shall mean the Continuing Disclosure Certificate
executed by the Authority and dated the date of issuance and delivery of the Bonds, as
originally executed and as it may be amended from time to time in accordance with the terms
thereof.
"Costs of Issuance" means all expenses incurred in connection with the authorization,
issuance, sale and delivery of the Bonds, the making of the Loans pursuant to the Loan
Agreements and the refunding and defeasance of a portion of the Prior Loans and the Prior
Bonds from a portion of the proceeds of the Loans, including but not limited to all
compensation, fees and expenses (including but not limited to fees and expenses for legal
counsel) of the Authority, the Trustee and the Prior Bonds Trustee, compensation to any
financial consultants or underwriters, legal fees and expenses, filing and recording costs, rating
agency fees, costs of preparation and reproduction of documents and costs of printing.
"Costs of Issuance Fund" means the fund established and held by the Trustee pursuant
to Section 3.04.
" unt " means the County of Contra Costa, a political subdivision organized and
existing under the laws of the State.
"DefeasanceC7bli atg ions," means (a) cash, (b) non-callable direct obligations of the
United States of America ("Treasuries"), (c) evidences of ownership of proportionate interests
in future interest and principal payments on Treasuries held by a bank or trust company as
custodian,under which the owner of the investment is the real party in interest and has the right
to proceed directly and individually against the obligor and the underlying Treasuries are not
available to any person claiming through the custodian or to whom the custodian may be
obligated or (d) pre-refunded municipal obligations rated "AAA" and "Aaa" by Moody's and
S&P.
"Depository" means (a) initially, DTC, and (b) any other Securities Depositories acting
as Depository pursuant to Section 2.09.
"De oto sitory System Participant" means any participant in the Depository's book-entry
system.
„DT " means The Depository Trust Company, New York, New York, and its
successors and assigns.
"Escrow Agreement" means the Escrow Deposit and Trust Agreement, dated as of
March 1, 1999, among the Agency, the Authority and the Prior Trustee, in its capacity as
Escrow Bank thereunder.
"Excess Inyestment Earnings" means the amount of excess investment earnings
determined to be subject to rebate to the United States of America with respect to the
investment of the gross proceeds of the Bonds, determined pursuant to Section 148(f) of the
Tax Code.
"Event of Default" means any of the events described in Section 8.01.
"Fair Market Value" means,with respect to any investment, the price at which a willing
buyer would purchase such investment from a willing seller in a bona fide, arm's length
4
transaction (determined as of the date the contract to purchase or sell the investment becomes
binding) if the investment is traded on an established securities market (within the meaning of
Section 1273 of the Tax Code) and, otherwise, the term "Fair Market Value" means the
acquisition price in a bona fide arm's length transaction (as described above) if (i) the
investment is a certificate of deposit that is acquired in accordance with applicable regulations
under the Tax Code, (ii) the investment is an agreement with specifically negotiated withdrawal
or reinvestment provisions and a specifically negotiated interest rate(for example, a guaranteed
investment contract, a forward supply contract or other investment agreement) that is acquired
in accordance with applicable regulations under the Tax Code, (iii) the investment is a United
States Treasury Security - State and Local Government Series that is acquired in accordance
with applicable regulations of the United States Bureau of Public Debt, or (iv) any commingled
investment fund in which the Authority and related parties do not own more than a ten percent
(10%)beneficial interest therein if the return paid by the fund is without regard to the source of
the investment.
"Federal Securities" means (a) any direct general obligations of the United States of
America (including obligations issued or held in book entry form on time books of the
Department of the Treasury of the United States of America), the payment of principal of and
interest on which are unconditionally and fully guaranteed by the United States of America; (b)
obligations of any agency or department of the United States of America which represent the
full faith and credit of the United States of America or the timely payment of the principal of
and interest on which are secured or guaranteed by the full faith and credit of the United States
of America; and (c) any obligations issued by the State of California or any political subdivision
thereof the payment of and interest and premium(if any) on which are fully secured by Federal
Securities described in the preceding clauses (a) or (b), as verified by an independent certified
public accountant.
"Fiscal Year"means any twelvemonth period extending from July I in one calendar year
to June 30 of the succeeding calendar year, both dates inclusive, or any other twelve-month
period selected and designated by the Authority as its official fiscal year period.
"Indenture" means this Indenture of Trust, as originally executed or as it may from time
to time be supplemented,modified or amended by any Supplemental Indenture pursuant to the
provisions hereof.
"Independent Accountant" means any certified public accountant or firm of certified
public accountants appointed and paid by the Authority, and who, or each of whom (a) is in
fact independent and not under domination of the Authority, the County or the Agency; (b)
does not have any substantial interest, direct or indirect, in the Authority, the County or the
Agency; and (c) is not connected with the Authority, the County or the Agency as an officer or
employee of the Authority, the County or the Agency but who may be regularly retained to
mare annual or other audits of the books of or reports to the Authority, the County or the
Agency.
"Information Services" means Financial Information, Inc.'s "Daily Called Bond Service,"
30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor; Kenny
Information Services" "Called Bond Service," 65 Broadway, 16th Floor, New York, New York
10006; Moody's Investors Service "Municipal and Government," 99 Church Street, 8th Floor,
New York, New York 10007, Attention: Municipal News Reports; Standard &x: Poor's
Corporation "Called Bond Record," 25 Broadway, 3rd Floor, New York, New York 10004; and,
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
as the Authority may designate in a Certificate of the Authority delivered to the Trustee.
5
"Interest Account" means the account by that name established and held by the Trustee
pursuant to Section 4.02(b)(i).
"Interest Payment Date" means February 1 and August 1 in each year,beginning August
1, 1999, and continuing thereafter so long as any Bonds remain Outstanding.
"Loans" means, collectively, the loans made by the Authority to the Agency in the
aggregate principal amount of$ under and pursuant to the Loan Agreements.
"Loan Agreements" means, collectively, the Pleasant Hill Loan Agreement, the West
Pittsburg Loan Agreement, the Oakley Loan Agreement, the Rodeo Loan Agreement and the
North Richmond Loan Agreement.
"Loan Fund" means the fund by that name established and held by the Trustee
pursuant to Section 3.03.
"Maximum Annual Debt Service" means, as of the date of calculation, the maximum
amount obtained by totaling, for the current or any future Bond Year, the sum of; (a) the
principal amount of all Outstanding Bonds maturing in such Bond Year; (b) the aggregate
principal amount of all Outstanding Term Bonds scheduled to be redeemed by operation of
mandatory sinking fund deposits in such Bond Year, together with any premium thereon; and
(c) the interest which would be due during such Bond Year on the aggregate principal amount of
Bonds which would be Outstanding in such period if the Bonds are retired as scheduled, but
deducting and excluding from such aggregate principal anx►ount the aggregate principal amount
of Bonds no longer Outstanding.
"Mgody's" means Moody's Investors Service, its successors and assigns..
"N�minee" means (a) initially, Cede & Co. as nominee of DTC, and (b) any other
nominee of the repository designated pursuant to Section 2.09(a).
"North Richmond Loan Agreement" means the agreement by that name, dated as of
May 1, 1992,between the Agency and the Authority, as supplemented by the First Supplement
to North Richmond Loan Agreement, dated as of June 1, 1995, between the Agency and the
Authority,and the Second Supplement to North Richmond Loan Agreement, dated as of March
1, 1999, between the Agency and the Authority, and as it may from time to time be further
supplemented,modified or amended.
"Qakley Loan Agreement" means the agreement by that name, dated as of March 1,
1999,between the Agency and the Authority, as originally executed and as it may from time to
time be supplemented,modified or amended.
"Outstanding" when used as of any particular time with reference to Bonds, means all
Bonds theretofore executed, issued and delivered by the Authority under this Indenture except
(a)Bonds theretofore cancelled by the Trustee or surrendered to the Trustee for cancellation, (b)
Bonds paid or deemed to have been paid within the meaning of Section 9.03, and (c) Bonds in
lieu of or in substitution for which other Bonds shall have been executed, issued and delivered
pursuant to this Indenture or any Supplemental Indenture.
" wn r", when used with respect to any Bond, means the person in whose name the
ownership of such Bond shall be registered on the Registration Books.
"Participating Underwriter" shall have the meaning ascribed thereto in the Continuing
Disclosure Certificate.
6
"Permitted Investments" means any of the following which at the time of investment are
legal investments under the laws of the State for the moneys proposed to be invested therein.
(a) Federal Securities;
(b) bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following federal agencies and provided such obligations are
backed by the full faith and credit of the United States of America (stripped securities
are only permitted if they have been stripped by the agency itself): (i) direct obligations
or fully guaranteed certificates of beneficial ownership of the U.S. Export-Import Bank;
(ii) certificates of beneficial ownership of the Farmers Home Administration; (iii)
obligations of the Federal Financing Bank; (iv) Federal Housing Administration
debentures; (v) participation certificates of the General Services Administration; (vi)
guaranteed mortgage-backed bonds or guaranteed pass-through obligations of the
Government National Mortgage Association; (vii) guaranteed Title XI financings of the
U.S. Maritime Administration; (viii) project notes, local authority bonds, new
communities debentures and U.S. public housing notes and bonds of the U.S.
Department of Housing and Urban Development;
(c) bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following non-full faith and credit U.S.government agencies: (i)
senior debt obligations of the Federal Home Loan Bank System; (ii) participation
certificates and senior debt obligations of the Federal Home Loan Mortgage Corporation;
(iii) mortgaged-backed securities and senior debt obligations of the Federal National
Mortgage Association; (iv) senior debt obligations of the Student Loan Marketing
Association;and (v) obligations of the Resolution Funding Corporation;
(d) money market funds registered under the Investment Company Act of 1940,
whose shares are registered under the Securities Act of 1933,and having a rating by S&P
of AAm-G, AAAm or AAm and rated in the top rating category by Moody's (such
funds may include funds for which the Trustee, its affiliates or subsidiaries provide
investment advisory or other management services);
(e) certificates of deposit (including those of the Trustee and its affiliates)
secured at all times by collateral described in (a) or (b) above, which are issued by
commercial banks, savings and loan associations or mutual savings banks, which
collateral must be held by a third party and provided that the Bond Owners must have
a perfected first security interest in such collateral;
(f) certificates of deposit, savings accounts, deposit accounts or money market
deposits (including those of the Trustee and its affiliates) which are fully insured by
FDIC;
(g) any investment which is a legal investment for proceeds of the Bonds at the
time of the execution of such agreement, and which investment is made pursuant to an
agreement between the Authority, the Agency or the Trustee and a financial institution
or governmental body whose long term debt obligations are rated in one of the top two
rating categories by S&P and Moody's;
(h) commercial paper rated, at the time of purchase, "Prime-1" by Moody's and
"A-1" or better by S&P;
7
(i) bonds or notes issued by any state or municipality which are rated by
Moody's and S&P in one of the two highest rating categories assigned by such agencies,
(j) federal funds or bankers acceptances with a maximum term of one year of
any bank which an unsecured,uninsured and unguaranteed obligation rating of"Prim-
1" or "A3" or better by Moody's and "A-1" or "A" or better by S&P;
(k) pre-refunded municipal bonds rated "Aaa" by Moody's and "AAA" by
S&P,
(1) the Local Agency Investment Fund of the State of California, created
pursuant to section 16429.1 of the California Government Code, to the extent the
Trustee is authorized to register such investment in its name;and
(m) shares in a California common law trust established pursuant to Title 1,
Division 7, Chapter 5 of the California Government Code which invests exclusively in
investments permitted by Section 53635 of Title 5, Division 2, Chapter 4 of the
California Government Code, as it may be amended, including but not limited to the
California Arbitrage Management Program(CAMP).
"Pleasant hill Loan Agreement" means the agreement by that name, dated as of May 1,
1992, between the Agency and the Authority, as supplemented by the First Supplement to
Pleasant Hill Loan Agreement, dated as of March 1, 1999, between the Agency and the
Authority,and as it may from time to time be further supplemented,modified or amended.
"Principal Acc unt" means the account by that name established and held by the
Trustee pursuant to Section 4.02(b)(ii).
"Prior Bonds" means the Authority's County of Contra Costa Public Financing
Authority 1992 Tax Allocation Revenue Bonds, Series A (Pleasant Hill, North Richmond, West
Pittsburg and Oakley Redevelopment Project Areas) issued and outstanding under the
Indenture of Trust,dated as of May 1, 1992,between the Authority and the Prior Trustee.
"Prior Loans" means, collectively, the loans made by the Authority to the Agency in the
following initial principal amounts from proceeds of the Prior Bonds: (a) $22,673,935.50
principal amount with respect to the Pleasant Hill Redevelopment Project Area, (b)
$2,535,187.50 principal amount with respect to the West Pittsburg Redevelopment Project
Area, (c) $2,979,127.00 principal amount with respect to the Oakley Loan Redevelopment
Project Area, and (d) $1,126,750.00 principal amount with respect to the forth Richmond
Redevelopment Project Area.
"Prior Trustee" means U.S. Bank Trust National Association, in its capacity as
successor trustee for the Prior Bonds.
"Program. Fund" means the fund by that name established and held by the Treasurer of
the Authority pursuant to Section 3.07.
"Qualified Reserve Fund Cr dit In trum nt"means an irrevocable standby or direct-pay
letter of credit or surety bond issued by a commercial bank or insurance company and
deposited with the Trustee pursuant to a Loan Agreement provided that all of the following
requirements are met: (i) the long-term credit rating of such bank or insurance company is in the
highest rating category by Moody's and S&P, or the claims paying ability of such insurance
company is rated in the highest rating category by A.M. Best & Company, (ii) such letter of
credit or surety bond has a term of at least twelve (12) months, (iii) such letter of credit or
8
surety bond has a stated amount at least equal to the portion of the respective Reserve
Requirement with respect to which funds are proposed to be released pursuant to the
applicable Loan Agreement; and (iv) the Trustee is authorized pursuant to the terms of such
letter of credit or surety bond to draw thereunder an amount equal to any deficiencies which
may exist from time to time in the amounts available to repay the principal of and interest on
the respective Loan.
"Rebate Account" means the account established and held by the Trustee pursuant to
Section 4.02(b).
"Record Date" means, with respect to any Interest Payment Date, the fifteenth (15th)
calendar day of the month immediately preceding such Interest Payment Date, whether or not
such day is a Business Day,
„Ristration Books" means the records maintained by the Trustee pursuant to Section
2.07 for the registration and transfer of ownership of the Bonds.
"Recluest_of the Authority" means a request in writing signed by the Chair, Executive
Director, Assistant Executive Director, Deputy Executive Director, Secretary or Treasurer of the
Authority, or by any other officer of the Authority duly authorized by the Board for that
purpose,written notice of which shall be given to the Trustee.
"Revenue Fund" means the fund by that name established and held by the Trustee
pursuant to Section 4.02(a).
"Revenues" means: (a) all amounts payable by the Agency pursuant to Section 2.03,
Section 2.04 or 5.02 of any of the Loan Agreements; (b) all moneys deposited and held from
time to time by the Trustee in the funds and accounts established hereunder, other than the
Rebate Account;and (c) income and gains with respect to the investment of amounts on deposit
in the funds and accounts established hereunder, other than the Rebate Account and the Costs
of Issuance Fund.
"Rodeo Loan Agreement" means the agreement by that name, dated as of March 1,
1999,between the Agency and the Authority, as originally executed and as it may from time to
time be supplemented,modified or amended.
"S&P" means Standard & Poor's Ratings Services, its successors and assigns.
"Securities Depositories" means The Depository Trust Company, 711 Stewart Avenue,
Carden 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; and, in accordance with then current guidelines of the Securities and Exchange
Commission, such other addresses and/or such other securities depositories as the Authority
may designate in a Certificate of the Authority delivered to the Trustee.
"State" means the State of California.
"Supplem.ental Indenture"means any indenture,agreement or other instrument hereafter
duly executed by the Authority and the Trustee in accordance with the provisions of Section
7.01.
9
"Tax Code" means the Internal Revenue Code of 1986, as amended. Any reference to a
provision of the Tax Code shall include the applicable Tax Regulations with respect to such
provision.
"Tax Regulations" means temporary and permanent regulations promulgated under or
with respect to Section 103 and Sections 141 through 150, inclusive, of the Tax Code.
"Tax Revenue Certificate" means a certificate of the Agency identifying the amount of
all Tax Revenues received or to be received by the Agency in the then current Fiscal Year,based
on assessed valuation of property in the Project Area as evidenced in the written records of the
County.
"Term. Bonds" means the Bonds maturing on August 1 in each of the years ,
and
"Trust Office" means the corporate trust office of the Trustee at the address set forth in
Section 9.14, and such office as the Trustee may designate in writing to the Authority from time
to time as the place for transfer, exchange or payment of the Bonds.
"Trustee" means U.S. Bank Trust National Association and its successors and assigns,
and any other corporation or association which may at any time be substituted in its place as
provided in Article VI.
"West Pittsbur�Loan Agreement" means the agreement by that name, dated as of May
1, 1992, between the Agency and the Authority, as supplemented by the First Supplement to
West Pittsburg Loan Agreement, dated as of December 1, 1995, between the Agency and the
Authority, and the Second Supplement to West Pittsburg Loan Agreement, dated as of March
1, 1999, between the Agency and the Authority, and as it may from time to time be further
supplemented,modified or amended.
Section 1.02. Rules of Construction. All references in this Indenture to "Articles,"
"Sections," and other subdivisions are to the corresponding Articles,Sections or subdivisions of
this Indenture; and the words "herein," "hereof," "hereunder," and other words of similar
import refer to this Indenture as a whole and not to any particular Article, Section or
subdivision hereof.
Section 1.03. Authorization and Purpose of Bonds. The Authority has reviewed all
proceedings heretofore taken relative to the authorization of the Bonds and has found, as a
result of such review, and hereby finds and determines that all things, conditions, and acts
required by law to exist, happen and be performed precedent to and in the issuance of the
Bonds do exist, have happened and have been performed in due time, form and manner as
required by law, and the Authority is now authorized under the Bond Law and each and every
requirement of law, to issue the Bonds in the manner and form provided in this Indenture.
Accordingly, the Authority hereby authorizes the issuance of the Bonds pursuant to the Bond
Law and this Indenture for the purpose of providing funds to make the Loans to the Agency
under the Loan Agreements.
Section 1.04. Equal Security. In consideration of the acceptance of the Bonds by the
Owners thereof, this Indenture shall be deemed to be and shall constitute a contract among the
Authority, the Trustee and the Owners from time to time of the Bonds, and the covenants and
agreements herein set forth to be performed on behalf of the Authority shall be for the equal and
proportionate benefit, security and protection of all Owners of the Bonds without preference,
priority or distinction as to security or otherwise of any of the Bonds over any of the others by
10
reason of the number or date thereof or the time of sale, execution or delivery thereof, or
otherwise for any cause whatsoever,except as expressly provided therein or herein..
1�
ARTICLE II
ISSUANCE OF THE BONDS
Section 2.01. Terms of the Bands.
The Bonds authorized to be issued by the Authority under and subject to the Bond Law
and the terms of this Indenture shall be designated the "County of Contra Costa Public
Financing Authority 1999 Tax Allocation Revenue Bonds (Pleasant Hill BART, North
Richmond, Bay Point, Rodeo and Oakley Redevelopment Project Areas)" and shall be issued in
the original aggregate principal amount of Million Thousand Dollars
($_—-----).
The principal of and interest and premium (if any) on the Bonds shall be payable in
lawful money of the United States of America.
The Bonds shall be issued in fully registered form without coupons in denominations of
$5,000 or any integral multiple thereof, so long as no Bond shall have more than one maturity
date. The Bonds shall be dated March 1, 2399, and shall mature on August I in each of the
years and in the amounts, and shall bear interest (calculated on the basis of a 360-day year of
twelve 30-day months) at the rates, as follows:
Maturity Date Principal Interest Rate
(Auu 1) Amount Per Anne
[to come]
Interest on the Bonds shall be payable on each Interest Payment Date to the person
whose name appears on the Registration Books as the Owner thereof as of the Record Date
immediately preceding each such Interest Payment Date, such interest to be paid by check or
draft of the Trustee mailed by first class mail, postage prepaid, on each Interest Payment Date
to the Owner at the address of such Owner as it appears on the Registration Books as of the
preceding Record Date; provided, however, that at the written request of the Owner of at least
$1,000,000 in aggregate principal amount of Outstanding Bonds filed with the Trustee prior to
any Record Date, interest on such Bonds shall be paid to such Owner on each succeeding
Interest Payment Date by wire transfer of immediately available funds to an account in the
continental United States designated in such written request. Principal of and premium(if any)
on any Bond shall be paid upon presentation and surrender thereof, at maturity or the prior
redemption thereof, at the Trust Office of the Trustee. The principal of and interest and
premium (if any) on the Bonds shall be payable in lawful money of the United States of
America.
Each Bond shall bear interest from the Interest Payment Date next preceding the date of
authentication thereof, unless (a) it is authenticated after a Record Date and on or before the
following Interest Payment Date,in which event it shall bear interest from such Interest Payment
Date; or (b) it is authenticated on or before July 15, 1999, in which event it shall bear interest
from March 1, 1999; provided, however, that if, as of the date of authentication of any Bond,
interest thereon is in default, such Bond shall bear interest from the Interest Payment Date to
which interest has previously been paid or made available for payment thereon.
12
Section 2.02. Redemption of the Bonds.
(a) Redemption From Q12tional Loan Prepayments. The Bonds maturing on or before
August 1, , shall not be subject to optional redemption prior to their respective maturity
dates. The Bonds maturing on or after August 1, are subject to redemption prior to their
respective maturity dates, as a whole, or in part (among maturities as determined by the
Authority such that the principal and interest due on the Bonds which remain Outstanding
following such redemption are equal in total amount on each Interest Payment Date to the
remaining principal and interest due on each such date on the Loans funded from the Bonds
which remain Outstanding following the optional redemption of the portion of the Loans being
optionally prepaid, and by lot within a maturity), on any date on or after August 1, from
any optional prepayment of the Loans or any other source of available funds, at the following
respective redemption prices (expressed as percentages of the principal amount of the Bonds to
be redeemed),plus accrued interest thereon to the date of redemption:
Pedemr�tio= n Dates Redemption Pricgs
August 1, through July 31, 102%
August 1, through July 31, 101
August 1, and thereafter 100
(b) Mandatory Sicking]fund Redemption.
(i) Term Bonds Maturing on August 1, The Term Bonds maturing on
August 1, shall also be subject to mandatory redemption in whole, or in part by
lot, on August 1 in each year commencing August 1, from payments made by the
Authority into the Principal Account pursuant to Section 4.02(b)(ii), at a redemption
price equal to the principal amount thereof to be redeemed, without premium, plus
accrued interest to the date of redemption,in the aggregate respective principal amounts
and on August 1 in the respective years as set forth in the following table; provided,
however, that (i) in lieu of redemption thereof on August 1 in any year, all or a portion of
such Terra Bonds may be purchased by the Agency pursuant to Section 2.03 of a Loan
Agreement and tendered to the Trustee for cancellation not later than the preceding June
13, and (ii) if some but not all of such Term Bonds have been redeemed pursuant to
subsection (a) above, the total amount of all future sinking fund payments shall be
reduced by the aggregate principal amount of such Term Bonds so redeemed, to be
allocated among such sinking fund payinents on a pro rata basis at the written direction
of the Authority.
Sinking Fund Principal Amount Sinking Fund Principal Amount
Redemption Date to be Redeemed Redemption Date to be Redeemed
Au u t 1 or Purchased (August 1 or Purchas!?
[to come]
(ii) Term Bonds Maturing on August 1, The Term Bonds maturing on
August 1, _ , shall also be subject to mandatory redemption in whole, or in part by
lot, on August 1 in each year commencing August 1, , from payments made by the
Authority into the Principal Account pursuant to Section 4.02(b)(ii), at a redemption
price equal to the principal amount thereof to be redeemed, without premium, plus
13
accrued interest to the date of redemption,in the aggregate respective principal amounts
and on August 1 in the respective years as set forth in the following table; provided,
however, that (i) in lieu of redemption thereof on August 1 in any year, all or a portion of
such Term. Bonds may be purchased by the Agency pursuant to Section 2.03 of a Doan
Agreement and tendered to the Trustee for cancellation not later than the preceding June
15, and (ii) if some but not all of such Terra Bonds have been redeemed pursuant to
subsection (a) above, the total amount of all future sinking fund payments shall be
reduced by the aggregate principal amount of such Term Bonds so redeemed, to be
allocated among such sinking fund payments on a pro rata basis at the written direction
of the Authority.
Sinking Fund Principal Amount Sinking Fund Principal Amount
Redemption Date to be Redeemed Redemption Date to be Redeemed
(August 1 or Purchased (August 1 or Purchased
[to come]
(iii) Term Bonds Maturing on August 1, . The Term Bonds maturing on
August 1, shall also be subject to mandatory redemption in whole, or in part by
lot, on August 1 in each year commencing August 1, from payments made by the
Authority into the Principal Account pursuant to Section 4.02(b)(ii), at a redemption
price equal to the principal amount thereof to be redeemed, without premium, plus
accrued interest to the date of redemption,in the aggregate respective principal amounts
and on August 1 in the respective years as set forth in the following table; provided,
however, that (i) in lieu of redemption thereof on August 1 in any year, all or a portion of
such Term Bonds may be purchased by the Agency pursuant to Section 2.03 of a Loan
Agreement and tendered to the Trustee for cancellation not later than the preceding June
15, and (ii) if some but not all of such Term Bonds have been redeemed pursuant to
subsection (a) above, the total amount of all future sinking fund payments shall be
reduced by the aggregate principal amount of such Term Bonds so redeemed, to be
allocated among such sinking fund payments on a pro rata basis at the written direction
of the Authority.
Sinking Fund Principal Amount Sinking Fund Principal Amount
Redemption Date to be Redeemed Redemption Date to be Redeemed
Au u t 1 or Purchased Au u t 1 or Purchased
[to come]
(c) Notice of Redemption. The Trustee on behalf and at the expense of the Authority
shall mail (by first class mail) notice of any redemption to the respective Owners of any Bonds
designated for redemption at their respective addresses appearing on the Registration Books,
and to the Securities Depositories and to one or more Information Services, at least thirty (30)
but not more than sixty (60) days prior to the date fixed for redemption;provided, however, that
neither failure to receive any such notice so mailed nor any defect therein shall affect the
validity of the proceedings for the redemption of such Bonds or the cessation of the accrual of
interest thereon. Such notice shall state the date of the notice, the redemption date, the
redemption place and the redemption price and shall designate the CUSIP numbers, the Bond
14
numbers (but only if less than all of the Outstanding Bonds are to be redeemed) and the
maturity or maturities (in the event of redemption of all of the Bonds of such maturity or
maturities in whole) of the Bonds to be redeemed, and shall require that such Bonds be then
surrendered at the Trust Office of the Trustee for redemption at the redemption price, giving
notice also that further interest on such Bonds will not accrue from and after the redemption
date.
(d) Selection of Bonds for Redemption. Whenever provision is made in this Indenture
for the redemption of less than all of the Bonds of any maturity, the Trustee shall select the
Bonds to be redeemed from all Bonds of such maturity not previously called for redemption,by
lot in any manner which the Trustee in its sole discretion shall deem appropriate and fair. For
purposes of such selection, all Bonds shall be deemed to be comprised of separate $5,000
portions and such portions shall be treated as separate Bonds which may be separately
redeemed.
(e) Partial Redemption of Bonds. In the event only a portion of any Bond is called for
redemption,then upon surrender of such Bond the Authority shall execute and the Trustee shall
authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or
Bonds of the same series and maturity date, of authorized denominations in aggregate principal
amount equal to the unredeemed portion of the Bond to be redeemed.
(f) Effect of Redemption. From and after the date fixed for redemption, if funds
available for the payment of the principal of and interest(and premium, if any) on the Bonds so
called for redemption shall have been duly provided, such Bonds so called shall cease to be
entitled to any benefit under this Indenture other than the right to receive payment of the
redemption price, and no interest shall accrue thereon from and after the redemption date
specified in such notice.
Section 2.03. Form of the Bonds. The Bonds, the form of Trustee's certificate of
authentication, and the form of assignment to appear thereon, shall be substantially in the
respective forms set forth in Exhibit A attached hereto and by this reference incorporated
herein, with necessary or appropriate variations, omissions and insertions, as permitted or
required by this Indenture.
Section 2.04. Execution of Bonds. The Bonds shall be signed in the name and on behalf
of the Authority with the manual or facsimile signatures of its Chair and attested with the
manual or facsimile signature of its Secretary or any assistant duly appointed by the Board,
under the printed seal of the Authority, and shall be delivered to the Trustee for authentication
by it. In case any officer of the Authority who shall have signed any of the Bonds shall cease to
be such officer before the Bonds so signed shall have been authenticated or delivered by the
Trustee or issued by the Authority, such Bonds may nevertheless be authenticated, delivered
and issued and, upon such authentication, delivery and issue, shall be as binding upon the
Authority as though the individual who signed the same had continued to be such officer of the
Authority. Also, any Bond may be signed on behalf of the Authority by any individual who on
the actual date of the execution of such Bond shall be the proper officer although on the nominal
date of such Bond such individual shall not have been such officer.
Only such of the Bonds as shall bear thereon a certificate of authentication in
substantially the form set forth in Exhibit A,manually executed by the Trustee, shall be valid or
obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of
the Trustee shall be conclusive evidence that the Bonds so authenticated have been duly
authenticated and delivered hereunder and are entitled to the benefits of this Indenture.
15
Section 2.05. Transfer of Bonds. Any Bond may, in accordance with its terms, be
transferred,upon the.Registration Books,by the person in whose name it is registered,in person
or by his duly authorized attorney,upon surrender of such Bond for cancellation, accompanied
by delivery of a written instrument of transfer in a form approved by the Trustee, duly
executed. Whenever any Bond or Bonds shall be surrendered for transfer, the Authority shall
execute and the Trustee shall authenticate and deliver to the transferee a new Bond or Bonds of
like maturity and aggregate principal amount. The Trustee shall not be required to transfer,
pursuant to this Section,either(a) all Bonds during the period established by the Trustee for the
selection of Bonds for redemption, or (b) any Bonds selected for redemption pursuant to
Section 2.02.
Section 2.06. Exchange of Bonds. The Bonds may be exchanged at the Trust Office of
the Trustee for a like aggregate principal amount of Bonds of other authorized denominations
and of the same maturity. The Trustee shall not be required to exchange, pursuant to this
Section, either (a) all Bonds during the period established by the Trustee for the selection of
Bonds for redemption, or(b) any Bonds selected for redemption pursuant to Section 2.02.
Section 2.07. Registration Books. The Trustee will keep or cause to be kept at its Trust
Office sufficient records for the registration and transfer of the Bonds which shall at all
reasonable times during regular business hours be open to inspection by the Authority with
reasonable prior notice; and, upon presentation for such purpose, the Trustee shall, under such
reasonable regulations as it may prescribe, register or transfer or cause to be registered or
transferred,on said records Bonds as hereinbefore provided.
Section 2.08. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become
mutilated, the Authority, at the expense of the Owner of said Bond, shall execute, and the
Trustee shall thereupon authenticate and deliver, a new Bond of like series, tenor and
authorized denomination 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 by it and destroyed. If any Bond issued hereunder 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 for the Trustee and the
Authority satisfactory to the Trustee shall be given, the Authority, at the expense of the Bond
Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of
like series and tenor in lieu of and in substitution for the Bond so lost, destroyed or stolen (or if
any such Bond shall have matured or shall have been called for redemption, instead of issuing a
substitute Bond the Trustee may pay the same without surrender thereof upon receipt of
indemnity satisfactory to the Trustee). The Trustee may require payment of a reasonable fee for
each new Bond issued under this Section and of the expenses which may be incurred by the
Authority and the Trustee. Any Bond issued under the provisions of this Section in lieu of any
Bond alleged to be lost, destroyed or stolen shall constitute an original contractual obligation on
the part of the Authority whether or not the Bond alleged to be lost, destroyed or stolen be at
any time enforceable by anyone, and shall be equally and proportionately entitled to the
benefits of this Indenture with all other Bonds secured by this Indenture.
Section 2.09. Book-Entry System.
(a) Qriginal Delivery. The Bonds shall be initially delivered in the form of a separate
single fully registered Bond (which may be typewritten) for each maturity of the Bonds. Upon
initial delivery,the ownership of each such Bond shall be registered on the Registration Books in
the name of the Nominee. Except as provided in subsection (c), the ownership of all of the
Outstanding Bonds shall be registered in the name of the Nominee on the Registration Books.
16
With respect to Bonds the ownership of which shall be registered in the name of the
Nominee, the Authority and the Trustee shall have no responsibility or obligation to any
Depository System Participant or to any person on behalf of which the Nominee or the
Depository System Participant holds an interest in the Bonds. Without limiting the generality of
the immediately preceding sentence, the Authority and the Trustee shall have no responsibility
or obligation with respect to (i) the accuracy of the records of the Depository, the Nominee or
any Depository System Participant with respect to any ownership interest in the Bonds, (ii) the
delivery to any Depository System Participant or any other person, other than a Band Owner
as shown in the Registration Books, of any notice with respect to the Bonds, including any
notice of redemption, (iii) the selection by the Depository of the beneficial interests in the Bonds
to be redeemed in the event the Authority elects to redeem the. Bonds in part, (iv) the payment
to any Depository System Participant or any other person, other than a Bond Owner as shown
in the Registration Boobs, of any amount with respect to principal of or interest or premium, if
any, on the Bonds or (v) any consent given or other action taken by the Depository as Owner of
the Bonds. The Authority and the Trustee may treat and consider the person in whose name
each Bond is registered as the absolute owner of such Bond for the purpose of payment of
principal of and interest and premium, if any, on such Bond, for the purpose of giving notices of
redemption and other matters with respect to such Bond,for the purpose of registering transfers
of ownership of such Bond, and for all other purposes whatsoever. The Trustee shall pay the
principal of and interest and premium, if any, on the Bonds only to the respective Owners or
their respective attorneys duly authorized in writing, and all such payments shall be valid and
effective to fully satisfy and discharge all obligations with respect to payment of principal of
and interest and premium, if any, on the Bonds to the extent of the sum or sums so paid. No
person other than a Bond Owner shall receive a Bond evidencing the obligation of the Authority
to make payments of principal, interest and premium,if any,pursuant to this Indenture. Upon
delivery by the Depository to the Nominee and the Authority of written notice to the effect that
the Depository has determined to substitute a new Nominee in its place, such new nominee
shall become the Nominee hereunder for all purposes; and upon receipt of such a notice the
Authority shall promptly deliver a copy of the same to the Trustee.
(b) R_pre& ntation Letter. In order to qualify the Bonds for the Depository's book-
entry system, the Authority shall execute and deliver to such Depository a letter representing
such matters as shall be necessary to so qualify the Bonds. The execution and delivery of such
letter shall not in any way limit the provisions of subsection (a) above or in any other way
impose upon the Authority or the Trustee any obligation whatsoever with respect to persons
having interests in the Bonds other than the Bond Owners. Upon the written acceptance by the
Trustee, the Trustee shall agree, to the extent not inconsistent with the terms hereof, to take all
action reasonably necessary for all representations of the Trustee in such letter with respect to
the Trustee to at all times be complied with. In addition to the execution and delivery of such
letter, the Authority may take any other actions,not inconsistent with this Indenture, to qualify
the Bonds for the Depository's book-entry program.
(c) Transfers Outside Book-Entry Sy, stem. In the event that either (i) the Depository
determines not to continue to act as Depository for the Bonds, or (ii) the Authority determines
to terminate the Depository as such, then the Authority shall thereupon discontinue the book-
entry system with such Depository. In such event, the Depository shall cooperate with the
Authority and the Trustee in the issuance of replacement Bonds at the expense of the Authority
by providing the Trustee with a list showing the interests of the Depository System Participants
in the Bonds, and by surrendering the Bonds, registered in the name of the Nominee, to the
Trustee on or before the date such replacement Bonds are to be issued. The Depository, by
accepting delivery of the Bonds, agrees to be bound by the provisions of this subsection (c). If,
prior to the termination of the Depository acting as such, the Authority fails to identify another
Securities Depository to replace the Depository,then the Bonds shall no longer be required to be
registered in the Registration Books in the name of the Nominee, but shall be registered in
17
whatever name or names the Owners transferring or exchanging Bonds shall designate, in
accordance with the provisions hereof.
In the event the Authority determines that it is in the best interests of the beneficial
owners of the Bonds that they be able to obtain certificated Bonds, the Authority may notify
the Depository System Participants of the availability of such certificated Bonds through the
Depository. In such event, the Trustee will issue, transfer and exchange Bands as required by
the Depository and others in appropriate amounts; and whenever the Depository requests, the
Trustee and the Authority shall cooperate with the Depository in taking appropriate action (y)
to make available one or more separate certificates evidencing the Bonds to any Depository
System Participant having Bonds credited to its account with the Depository, or (z) to arrange
for another Securities Depository to maintain custody of a single certificate evidencing such
Bonds, all at the Authority's expense.
(d) Payment to the Nominee. Notwithstanding any other provision of this
Indenture to the contrary, so long as any Bond is registered in the name of the Nominee, all
payments with respect to principal of and interest and premium, if any, on such Bond and all
notices with respect to such Bond shall be made and given, respectively, as provided in the
letter described in subsection (b) of this Section or as otherwise instructed by the Depository.
1&
ARTICLE III
DEPOSIT AND APPLICATION OF PROCEEDS OF BONDS
Section 3.01. Issuance of Bonds. Upon the execution and delivery of this Indenture,the
Authority shall execute and deliver Bonds in the aggregate principal amount of
Million Thousand Dollars ($ ), and the Authority shall deliver the Bonds to
the Trustee for authentication and delivery to the original purchaser thereof upon the Request of
the Authority.
Section 3.02. Application of Proceeds of Sale of Bonds. Upon the receipt of payment
for the Bonds on the Closing Date, the Trustee shall apply the proceeds of sale thereof as
follows: (a) the Trustee shall deposit in the Interest Account the amount of $ ,
constituting accrued interest received on the sale of the Bonds, (b) the Trustee shall transfer to
the Treasurer of the Authority the amount of $ , which amount shall be deposited by
such Treasurer in the Program Fund, and (c) the Trustee shall deposit the remainder of such
proceeds in the Loan Fund, in the amount of$
Section 3.03. Loan Fund. The Trustee shall establish and maintain a separate fund to
be known as the 'Loan Fund" into which shall be deposited a portion of the proceeds of sale of
the Bonds pursuant to Section 3.02(c). The Trustee shall disburse all amounts in the Loan Fund
on the Closing Date as follows: (a) $ to the Loan Disbursement Fund established
under Section 7.03 of the Pleasant Full Loan Agreement, (b) $---- to the Loan
Disbursement Fund established under Section 8.03 of the West Pittsburg Loan Agreement, (c)
$ to the Loan Disbursement Fund established under Section 2.02 of the Oakley Loan
Agreement, (d) $ to the Loan Disbursement Fund established under Section 8.03 of
the North Richmond Loan Agreement, and (e) $ to the Loan Disbursement Fund
established under Section 2.02 of the Rodeo Loan Agreement.
Section 3.04. Costs of Issuance Fund. There is hereby established an account to be held
by the Trustee known as the "Costs of Issuance Fund" into which shall be deposited a portion
of the proceeds of the Loans in the aggregate amount of$ pursuant to Sections 2.02(x)
of the Oakley Loan Agreement and the Rodeo Loan Agreement, Section 7.03(a) of the Pleasant
Full Loan Agreement and Sections 8.03(x) of the West Pittsburg Loan Agreement and the North
Richmond Loan Agreement. The moneys in the Costs of Issuance Fund shall be used to pay
Costs of Issuance from time to time upon receipt of a Request of the Authority. Can September
1, 1999, or upon the earlier receipt by the Trustee of a Request of the Authority stating that all
Costs of Issuance have been paid, the Trustee shall transfer all remaining amounts in the Costs
of Issuance Fund to the Authority, to be used to pay any administrative expenses of the
Authority related to the Bonds, the Prior Bonds, the Loan Agreements or the Prior Loan
Agreements.
Section 3.05. Loan Disbursement Funds. There is established under Sections 2.02 of the
Rodeo Loan Agreement and the Oakley Loan Agreement, Section 7.03 of the Pleasant Hill Loan
Agreement and Sections 8.03 of the West Pittsburg Loan Agreement and the North Richmond
Loan Agreement separate funds to be held by the Trustee, each known as the "Loan
Disbursement Fund," which shall be held and disposed of by the Trustee as provided in said
Sections of the Loan Agreements.
Section 3.06. Reserve Funds. There is established under each of the Loan Agreements
separate funds to be held by the Trustee, each known as the "Reserve Fund," which shall be
held and disposed of by the Trustee as provided in the respective Loan Agreements.
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Section 3.07. Program Fund. There is hereby established a separate fund to be known
as the "Program Fund," which shall be held by the Treasurer of the Authority, into which the
Treasurer shall deposit the amount described in Section 3.02(b). The moneys in the Program
Fund shall be used and withdrawn by the Treasurer from time to time to pay or reimburse the
costs of public capital improvements upon submission of a Certificate of the Authority stating
(a) the person to whom payment is to be made, (b) the amount to be paid, (c) the purpose for
which the obligation was incurred, (d) that such payment is in respect of a public capital
improvement eligible under the Act to be financed by the Authority and consistent with the
public hearing held pursuant to Section 6586.5(x)(2) of the Bond Law with respect to the Bond,
and (e) that such amount has not been the subject of a prior disbursement from the Program
Fund. When no amounts remain on deposit in the Program .Fund, the Program. Fund shall be
closed.
Section 3.08. Validity of Bonds. The validity of the authorization and issuance of the
Bonds shall not be affected in any way by any proceedings taken by the Agency with respect to
the application of the proceeds of the Loam, and the recital contained in the Bonds that the
same are issued pursuant to the Bond Law shall be conclusive evidence of their validity and of
the regularity of their issuance.
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ARTICLE IV
REVENUES,FLOW OF FUNDS
Section 4.01. Pledge of Revenues, Assignment of Rights. Subject to the provisions of
Section 6.03, the Bonds shall be secured by a first lien on and pledge (which shall be effected in
the manner and to the extent hereinafter provided) of all of the Revenues and a pledge of all of
the moneys in the Revenue Fund, the Interest Account and the Principal Account, including all
amounts derived from the investment of such moneys. The Bonds shall be equally secured by a
pledge,charge and lien upon the Revenues and such moneys without priority for number,date
of Bonds, date of execution or date of delivery, and the payment of the interest on and
principal of the Bonds and any premiums upon the redemption of any thereof shall be and are
secured by an exclusive pledge,charge and lien upon the Revenues and such moneys. So long as
any of the Bonds are Outstanding, the Revenues and such moneys shall not be used for any
other purpose; except that out of the Revenues there may be apportioned such sums, for such
purposes, as are expressly permitted by Section 4.02.
The Authority hereby transfers in trust and assigns to the Trustee, for the benefit of the
Owners from time to time of the Bonds, all of the Revenues and all of the right,title and interest
of the Authority (but not the obligations) in the Loan Agreements (other than the rights of the
Authority under Sections 4.10 and 5.04 thereof). The Trustee shall be entitled to and shall
receive all of the Revenues, and any Revenues collected or received by the Authority shall be
deemed to be held, and to have been collected or received, by the Authority as the agent of the
Trustee and shall forthwith be paid by the Authority to the Trustee. The Trustee also shall be
entitled to and, subject to the provisions hereof, shall take all steps, actions and proceedings
reasonably necessary in its judgment to enforce, either jointly with the Authority or separately,
all of the rights of the Authority and all of the obligations of the Agency under the Loan
Agreements.
Section.4.02. Receipt,Deposit and Application of Revenues.
(a) Deposit of Revenues; Revenue Fund. All Revenues described in clause (a) of the
definition thereof in Section 1.01 shall be promptly deposited by the Trustee upon receipt
thereof in a special fund designated as the "Revenue Fund" which the Trustee shall establish,
maintain and hold in trust hereunder.
(b) Ali-cation of Revenues° p=
Scial Accounts. On or before each date on which
interest on the Bonds becomes due and payable, the Trustee shall transfer from the Revenue
Fund and deposit into the following respective accounts (each of which the Trustee shall
establish and maintain within the Revenue Fund), 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 from lack of Revenues sufficient to make any earlier required
deposit) at the time of deposit to be satisfied before any transfer is made to any account
subsequent in priority:
(i) Interest Account. On or before each date on which interest on the Bonds
becomes due and payable, the Trustee shall deposit in the Interest Account an amount
required to cause the aggregate amount on deposit in the Interest Account to equal the
amount of interest becoming due and payable on such date on all Outstanding Bonds.
No deposit need be made into the Interest Account if the amount contained therein is at
least equal to the interest becoming due and payable upon all Outstanding Bonds on
such date. All moneys 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
21
and payable (including accrued interest on any Bands redeemed prior to maturity). All
amounts on deposit in the Interest Account on any Interest Payment Date, to the extent
not required to pay any interest then having come due and payable on the Outstanding
Bonds,shall be withdrawn therefrom by the Trustee and transferred to the Agency to be
used for any lawful purposes of the Agency.
(ii) Principal Account. On or before each date on which the principal of the
Bonds shall be payable, the Trustee shall deposit in the Principal Account an amount
required to cause the aggregate amount on deposit in the Principal Account to equal the
aggregate amount of principal corning due and payable on such date on the Bonds
pursuant to Section 2.01, or the redemption price of the Bonds (consisting of the
principal amount thereof and any applicable redemption premiums) required to be
redeemed on such date pursuant to any of the provisions of Section 2.02. All moneys in
the Principal Account shall be used and withdrawn by the Trustee solely for the purpose
of (A) paying the principal of the Bonds at the maturity thereof, (B) paying the principal
of the Term Bonds upon the mandatory sinking fund redemption thereof pursuant to
Section 2.02(b), or (C) paying the principal of and premium (if any) on any Bonds upon
the redemption thereof pursuant to Section 2.02(a). All amounts on deposit in the
Principal Account on the first day of any Bond Year, to the extent not required to pay
the principal of any Outstanding Bonds then having come due and payable, shall be
withdrawn therefrom and transferred to the Agency to be used for any lawful purposes
of the Agency.
(iii) Surplus. In the event that any amounts remain on deposit in the Revenue
Fund on any August 1st after making all of the transfers from the revenue Fund with
respect to such date theretofore required under this Section 4.02, the Trustee shall apply
such amounts for the following purposes in the following order of priority, as shall be
directed by the Authority in writing:
(i) such amounts may, at the election of the Authority,be applied to pay
or reimburse the payment of the reasonable costs and expenses incurred by the
Authority to administer the Bonds and the Loans,
(ii) to the extent permitted under the Bond Law and as so confirmed and
directed in writing by the Authority, such amounts may be used for any lawful
purpose of the Authority and may be accumulated in the Surplus Account for
any such purpose as directed by the Authority to the Trustee in writing,and
(iii) the remainder of such amounts shall be paid to the Agency to be
applied by the Agency for any lawful purpose of the Agency.
(c) Rebate Account. The Trustee shall deposit in the Rebate Account from time to time,
from payments made by the Agency for such purpose pursuant to Sections 4.12 of the
respective Loan Agreements, an amount determined by the Authority to be subject to rebate to
the United States of America in accordance with Section 5.08. Amounts in the Rebate Account
shall be applied and disbursed by the Trustee solely for the purposes and at the times set forth
in Requests of the Authority filed with the Trustee pursuant to Section 5.08.
Section 4.03. Investments. All moneys in any of the funds or accounts established with
the Trustee pursuant to this Indenture or the Loan Agreements shall be invested by the Trustee
solely in Permitted Investments, as directed in writing by the Agency two (2) Business Days
prior to the making of such investment. Permitted Investments may be purchased at such prices
as the Agency shall determine. All Permitted Investments shall be acquired subject to any
limitations or requirements as may be established by the Written .Request of the Agency filed
22
with the Trustee. 'Moneys in all funds and accounts shall be invested in Permitted Investments
maturing not later than the date on which it is estimated that such moneys will be required for
the purposes specified in this Indenture. Absent timely written direction from the Agency, the
Trustee shall invest any funds held by it in Perrcutted Investments described in clause (d) of the
definition thereof.
All interest, profits and other income received from the investment of moneys in any
fund or account established pursuant to this Indenture shall be deposited in the Revenue Fund,
except that such interest, profits and other income (i) on amounts in the Costs of Issuance Fund
shall be retained therein to be used to the purposes thereof, and (ii) on amounts in the Rebate
Account shall be retained therein to be used for the purposes thereof. Permitted Investments
acquired as an investment of moneys in any fund established under this Indenture shall be
credited to such fund.
The Trustee or any of its affiliates may act as principal or agent in the making or
disposing of any investment. The Trustee shall sell or present for redemption, any Permitted
Investments so purchased whenever it shall be necessary to provide moneys to meet any
required payment, transfer,withdrawal or disbursement from the fund to which such Permitted
Investments is credited, and the Trustee shall not be liable or responsible for any loss resulting
from any investment made or sold pursuant to this Section 5.07. For purposes of investment,
the Trustee may commingle moneys in any of the funds and accounts established hereunder.
The Authority acknowledges that to the extent regulations of the Comptroller of the
Currency grant the Authority the right to receive brokerage confirmations of security
transactions as they occur, the Authority specifically waives receipt of such confirmations to
the extent permitted by law. The Trustee shall furnish the Authority periodic cash transaction
statements which include detail for all investment transactions made by the Trustee hereunder.
The Trustee or any of its affiliates may act as sponsor, advisor or manager in connection
with any investments made by the Trustee hereunder.
Section 4.04. Valuation and Disposition of investments. All investments of amounts
deposited in any fund or account created by or pursuant to this Indenture or the Loan
Agreements,or othemrise containing gross proceeds of the Bonds (within the meaning of Section
148 of the Tax Code), shall be acquired and disposed of and valued at Fair Market Value;
provided, however, that investments in funds or accounts (or portions thereof) that are subject to
a yield restriction under applicable provisions of the Tax Code), shall be valued at their present
value(within the meaning of Section 148 of the Tax Code).
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ARTICLE V
COVENANTS OF THE AUTHORITY
Section 5.O1. Punctual Payment. The Authority shall punctually pay or cause to be
paid the principal, interest and premium (if any) to become due in respect of all the Bonds, in
strict conformity with the terms of the Bonds and of this Indenture, according to the true intent
and meaning thereof, but only out of Revenues and other assets pledged for such payment as
provided in this Indenture.
Section 5.02. Extension of Payment of Bonds. The Authority 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 Indenture,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
Authority 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 Bands.
Section 5.03. Against Encumbrances. The Authority shall not create, or permit the
creation of, any pledge, lien, charge or other encumbrance upon the Revenues and other assets
pledged or assigned under this Indenture while any of the Bonds are Outstanding, except the
pledge and assignment created by this Indenture. Subject to this limitation, the Authority
expressly reserves the right to enter into one or more other indentures for any of its corporate
purposes, including other programs under the Bond Law, and reserves the right to issue other
obligations for such purposes.
Section 5.04. Power to Issue Bonds and Make Pledge and Assignment. The Authority is
duly authorized pursuant to law to issue the Bonds and to enter into this Indenture and to
pledge and assign the Revenues,the Loan Agreements and other assets purported to be pledged
and assigned,respectively,under this Indenture in the manner and to the extent provided in this
Indenture. The Bands and the provisions of this Indenture are and will be the legal, valid and
binding special obligations of the Authority in accordance with their terms, and the Authority
and the Trustee shall at all times, to the extent permitted by law, defend, preserve and protect
said pledge and assignment of Revenues and other assets and all the rights of the Bond Owners
under this Indenture against all claims and demands of all persons whomsoever.
Section 5.05. Accounting Records and Financial Statements. The Trustee shall at all
times keep, or cause to be kept, proper books of record and account, prepared in accordance
with industry standards, in which complete and accurate entries shall be made of all
transactions made by the Trustee relating to the proceeds of Bonds, the Revenues and all funds
and accounts established pursuant to this Indenture or the Loan Agreements. Such books of
record and account shall be available for inspection by the Authority and the Agency, during
regular business hours with reasonable prior notice.
Section 5.06. No Additional Parity Debt. Except for the Bonds,, the Authority
covenants that no additional bonds, notes or other indebtedness shall be issued or incurred
which are payable out of the Revenues in whole or in part.
24
Section 5.07. Tax Covenants Relating to Bonds.
(a) Private Business Use Limitation. The Authority shall assure that the proceeds of
the Bonds are not used in a manner which would cause the Bonds to become "Private activity
bonds" within the meaning of Section 141(a) of the Tax Code.
(b) Private Loan Limitation. The Authority shall assure that no more than five percent
(5%) of the net proceeds of the Bonds are used, directly or indirectly, to make or finance a loan
(other than loans constituting nonpurpose obligations as defined in the Tax Code or constituting
assessments) to persons other than state or local government units.
(c) Fed-eral Guarantee Prohibition. The Authority shall not take any action or permit or
suffer any action to be taken if the result of the same would be to cause the Bonds to be
"federally guaranteed"within the meaning of Section 149(b) of the Tax Code.
(d) No Arbitrage. The Authority shall not take, or permit or suffer to be taken by the
Trustee or otherwise, any action with respect to the Bond proceeds which, if such action had
been reasonably expected to have been taken, or had been deliberately and intentionally taken,
on the Closing Date,would have caused the Bonds to be "arbitrage bonds" within the meaning
of Section 148(x) of the Tax Code.
Section 5.08. Rebate of Excess Investment Earnings to United States.
(a) Obligation to Calculate Excess Investment Earnings. The Authority shall comply
with all applicable provisions of the Tax Code relating to the calculation of Excess Investment
Earnings and shall provide or cause to be provided written notice to the Trustee of the amount
so calculated. Such calculations shall be made by or on behalf of the Authority at such times,
and in such manner, as shall be required pursuant to all applicable provisions of the Tax Code.
Promptly upon} the making of any such calculation by or on behalf of the Authority, the
Authority shall give written notice thereof to the Trustee. The Authority shall make written
demand on the Agency from time to time for any amounts owed by the Agency in respect to
amounts owing to the United States under Sections 4.12 of the Rodeo Loan Agreement and the
Oakley Loan Agreement, Section 7.09(e) of the Pleasant Hill Loan Agreement and Sections
8.09(e) of the North Richmond Loan Agreement and the West Pittsburg Loan Agreement.
(b) Rebate to United States. The Authority shall pay to the Trustee from time to time,
in accordance with the Tax Code, all excess investment earnings required to be paid to the
United States of America pursuant to the Tax Code for deposit to the Rebate Account.
Amounts in the Rebate Account shall be applied by the Trustee, at the written direction of the
Authority,solely to make payments from time to time,when due, of excess investment earnings
to the United States of America; provided, however, that any amounts on deposit in the Rebate
Account in excess of the amount required to be paid to the United States of America shall be
withdrawn therefrom by the Trustee at the written direction of the Authority and paid to the
Agency. Payments to the United States of America shall be made to the address prescribed by
the Tax Regulations, together with such reports and statements as may be prescribed by the Tax
Regulations all as provided by the Authority in writing to the Trustee.
(c) Investment Transactions. The Authority shall assure that excess investment earnings
on the Bonds are not paid or disbursed except as required in this Section 5.08. To that end the
Authority shall assure that investment transactions are on an arm's length basis. In the event
that Nonpurpose Investments consist of certificates of deposit or investment contracts,
investment in such Nonpurpose Investments shall be made in accordance with the procedures
described in applicable Tax Regulations as from time to time in effect.
25
(d) Maintenance of Records. The Authority shall keep, and retain for a period of six (6)
years following the retirement of the Bonds, records of the determinations made pursuant to
this Section 5.08.
(e) —En. a e ent of Professional Services. In order to provide for the administration of
this Section 5.08, the Authority may provide for the employment of independent attorneys,
accountants and consultants compensated on such reasonable basis as the Authority may deem
appropriate.
(f) 'Trustee's Reliance_on Authority. The Trustee shall conclusively be entitled to rely
upon all calculations and directions made and furnished by the Authority under this Section
5.08, and the Trustee shall not incur any liability whatsoever in acting upon and as instructed
by such calculations and directions, or for failing to take any action in the absence of such
directions.
Section 5.09. Loan Agreements. (a) Collection of Revenues Enforcement of Loan
Agreements. The Trustee, as assignee of the Authority's rights pursuant to Section 4.01, shall
(subject to the provisions of this Indenture) promptly collect all amounts due from the Agency
pursuant to the Loan Agreements and, subject to the provisions hereof, shall diligently enforce,
and take all steps, actions and proceedings reasonably necessary for the enforcement of all of
the rights of the Authority thereunder and for the enforcement of all of the obligations of the
Agency thereunder.
(b) Amendments of Loan Agreements. The Authority and the Agency may at any time
amend or modify a Loan Agreement pursuant to the applicable provisions thereof,but only: (a)
if the Authority, the Agency or the Trustee first obtains the written consent of the Owners of a
majority in aggregate principal amount of the Bonds then Outstanding to such amendment or
modification, provided, however, that no such amendment or modification shall (i) extend the
maturity of or reduce the amount of interest or principal payments on the Loan, or otherwise
alter or impair the obligation of the Agency to pay the principal, interest or prepayment
premiums on the Loans at the time and place and at the rate and in the currency provided
herein, without the express written consent of the Owner of each affected Band, (ii) reduce the
percentage of Bonds required for the written consent to any such modification or amendment
thereof or hereof, or (iii) without its written consent thereto, modify any of the rights or
obligations of the Trustee; or (b) without the consent of any of the Bond Owners, if such
amendment or modification is for any one or more of the following purposes-
(i) to add to the covenants and agreements of the Agency contained in such
Loan Agreement other covenants and agreements thereafter to be observed,or to limit or
surrender any rights or power therein reserved to or conferred upon the Agency so long
as such limitation or surrender of such rights or powers shall not materially adversely
affect the Owners of the Bonds;
(ii) to make such provisions for the purpose of curing any ambiguity, or of
curing, correcting or supplementing any defective provision contained in such Loan
Agreement, or in any other respect whatsoever as the Agency may deem necessary or
desirable, provided under any circumstances that such modifications or amendments
shall not materially adversely affect the interests of the Owners of the Bonds;
(iii) to amend any provision thereof relating to the Tax Code, to any extent
whatsoever but only if and to the extent such amendment will not adversely affect the
exclusion from gross income for federal income tax purposes of interest on any of the
Bonds under the Tax Code,in the opinion of Bond Counsel;
26
(iv) to provide for the issuance of Parity Debt as defined in and under and in
accordance with the provisions of such Loan Agreement;or
(v) to provide for a Qualified Reserve Fund Credit Instrument for amounts held
in a Reserve Fund under a Loan Agreement, as permitted by Section 2.06(d) of such
Loan Agreement.
Nothing in this Section 5.09(b) shall prevent the Agency and the Authority from entering
into any amendment or modification of a Loan Agreement which solely affects a particular
Bond or Bonds all of the Owners of which shall have consented to such amendment or
modification. The Trustee shall be entitled to rely upon the opinion of Bond Counsel stating
that the requirements of this Section 5.09(b) have been met with respect to any amendment or
modification of a Loan Agreement.
(c) Sale o€Loans. The Authority may sell a Loan or any portion of the principal thereof
upon written direction of the Authority to the Trustee specifying the principal amount and
purchase price of such Loan to be sold, accompanied by: (i) cash and a written direction of the
Authority as to any investment of such cash in Defeasance Obligations, (ii) a certificate of the
Authority specifying the maturity or maturities and principal amounts of the Bonds to be
defeased (in the manner contemplated by Section 9.03(c)) with such cash and any Defeasance
Obligations specified pursuant to the preceding clause (i), (iii) a written certificate of an
Independent Accountant to the effect that the aggregate of the principal and interest due on the
portion, if any, of the Loans to be retained by the Trustee following such sale will be sufficient
in time and amount to timely pay the principal and interest due on the Bonds which will remain
Outstanding following such sale, and (iv) an opinion of Bond Counsel to the effect that such
sale,in itself,will not adversely affect the exclusion from the gross incomes of the Owners of the
interest on the Bonds. Upon receipt of such documents, the Trustee shall invest such cash as
specified by the Authority pursuant to clause (i) above and hold such investments and any
uninvested cash in an escrow fund to be used solely for payment of the Bonds defeased
therewith, and shall cooperate with the Authority in the transfer of such Loan so sold to the
purchaser thereof.
(d) Optional Prepayment of 1999 Pleasant Hill BART Loan. The Authority shall not
consent to the optional prepayment of the 1999 Loan under and as such term is used in Section
7.05 of the Pleasant Hill Loan Agreement unless it shall first have obtained a certificate of an
Independent Accountant which: (i) specifies (A) the premium, if any, to be paid by the Agency
under Section 7.05 of the Pleasant Hill Loan Agreement in connection with such optional
prepayment, (B) the principal amount and redemption date and price of any Bonds to be
redeemed pursuant to Section 2.02(a) as a result of the optional prepayment of such 1999
Loan, (C) the date and principal amount of any sinking fund redemption payments specified in
Section 2.02(b) to be reduced as a consequence of any such optional redemption under Section
2.02(a), and (D) the date and principal amount of any sinking fund redemption payments
specified in Section 7.04 of the Pleasant Hill Loan Agreement to be reduced as a consequence of
the proposed optional prepayment of such 1999 Loan; and (ii) concludes that, based upon the
information supplied in clauses (i)(A) through (D) above, and in reliance upon the Trustee, the
Agency and the Authority implementing the redemption of the Bonds and the prepayment of
such 1999 Loan in a manner consistent with such information, the aggregate of the scheduled
principal and interest due on the Loans which remain outstanding following such prepayment
will be sufficient in time and amount to timely pay the principal and interest due on the Bonds
which will remain Outstanding following any redemption of the Bonds to occur under Section
2.02(a) as a result of the optional prepayment of such 1999 Loan. The Authority and. the
Trustee may conclusively rely upon any such certificate of an Independent Accountant in
connection with the redemption of the Bonds under Section 2.02(a) and the reduction of any
sinking fund payments listed in Section 2.02(b) as a consequence of such optional redemption.
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The consent of the Authority to any such optional prepayment of such 1999 Loan may
be executed and delivered by the Executive Director of the Authority,who is hereby authorized
to so execute and deliver any such consent following receipt of the certificate of an Independent
Accountant described in the preceding paragraph, without the need for any further action by
the Board of Directors of the Authority. No officer of the Authority shall be subject to any
personal liability by reason of his execution and delivery of any such consent.
Section 5.101. Waiver of Laws. The Authority 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 Indenture or in the Bonds, and all benefit or advantage of any such law or
laws is hereby expressly waived by the Authority to the extent permitted by law.
Section 5.11. Continuing Disclosure. (a)The Authority hereby covenants and agrees that
it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate.
Notwithstanding any other provision of this Indenture, failure of the Authority to comply with
the Continuing Disclosure Certificate shall not be considered an Event of Default;however, the
Trustee may (and, at the request of the Participating Underwriter or the owners of at least 25%
aggregate principal amount of Outstanding Bonds but only to the extent indemnified to its
satisfaction from any liability or expense, including fees of its attorneys, shall) or any
Bondholder may, take such actions as may be necessary and appropriate to compel
performance by the Authority of its obligations under the Continuing Disclosure Certificate,
including seeking mandate or specific performance by court order.
(b) Not later than October 30 of each year, commencing October 30, 1999 and until
the October 30 following the final maturity of the Bonds, the Authority shall supply the
following information to the California Debt and Investment Advisory Commission ("CDIAC")
by mail, postage prepaid, but only to the extent required to be so supplied by CDIAC: (i) the
principal amount of the Bonds and the principal amounts of the Loans then outstanding, (ii)
that there is no separate reserve fund for the Bonds, and the balance in the reserve funds under
the Loan Agreements, (iii) the costs of issuance, including any ongoingfees, (iv) the total
amount of administrative fees collected, (v) the amount of administrative fees charged to the
Agency, (vi) the interest earnings and terms of all guaranteed investment contracts, (vii)
commissions and fees paid on guaranteed investment contracts, (viii) the delinquency rate on
the Loans, and (ix) any balance in any capitalized interest account.
(c) Until the final maturity of the Bonds, the Authority shall notify CDIAC by mail,
postage prepaid, to the extent required by CDIAC, within 10 days of (i) any failure to pay
principal and interest due on the Loans or the Bonds, or (ii) any withdrawal of funds from the
reserve funds established under the Loan Agreements to pay principal or interest on the Loans.
(d) The failure by the Authority to comply with the provisions of Section 5.11(a), (b)
or (c) shall not be an Event of Default hereunder. The provisions of Section 5.11(b) and (c)
shall be amended to reflect any applicable change in Section 6599.1(b) or (c) of the California
Government Code,without any action by the Authority or the Trustee.
Section 5.12. Further Assurances. The Authority will adopt, make, execute and deliver
any and all such further resolutions, instruments and assurances as may be reasonably
necessary or proper to carry out the intention or to facilitate the performance of this Indenture,
and for the better assuring and confirming unto the Owners of the Bonds the rights and benefits
provided in this Indenture.
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ARTICLE VI
THE TRUSTEE
Section 6.01. Appointment of Trustee. U.S. Bank Trust Rational Association is hereby
appointed Trustee by the Authority for the purpose of receiving all moneys required to be
deposited with the Trustee hereunder and to allocate, use and apply the same as provided in
this Indenture. The Authority agrees that it will maintain a Trustee having a corporate trust
office in the State, with a combined capital and surplus of at least Fifty Million Dollars
($50,000,000), and subject to supervision or examination by federal or State authority, so long
as any Bonds are Outstanding. 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 6.02 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.
Notwithstanding any other provision hereof, the Trustee shall at all times be the same
institution acting as trustee for the Prior Bonds and for the 1995 Bonds (as defined in the West
Pittsburg Loan Agreement).
The Trustee is hereby authorized to pay the principal of and interest and redemption
premium(if any) on the Bonds when duly presented for payment at maturity,or on redemption
or purchase prior to maturity, and to cancel all Bonds upon payment thereof. The Trustee shall
keep accurate records of all funds administered by it and of all Bonds paid and discharged.
Section 6.02. Acceptance of Trusts. The Trustee hereby accepts the trusts imposed
upon it by this Indenture, and agrees to perform said trusts, but only upon and subject to the
following express terms and conditions:
(a) The Trustee, prior to the occurrence of an ]went of Default and after curing
of all Events of Default which may have occurred, undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture. In case an Event of
Default hereunder has occurred (which has not been cured or waived), the Trustee may
exercise such of the rights and powers vested in it by this Indenture, and shall use the
same degree of care and skill and diligence in their exercise, as a prudent person would
use in the conduct of its own affairs.
(b) The Trustee may execute any of the trusts or powers hereof and perform the
duties required of it hereunder by or through attorneys, agents,or receivers, and shall be
entitled to advice of counsel concerning all matters of trust and its duty hereunder. The
Trustee may conclusively rely on an opinion of counsel as full and complete protection
for any action taken or suffered by it hereunder.
(c) The Trustee shall not be responsible for any recital herein, in the Loan
Agreements or in the Bonds, or for any of the supplements hereto or thereto or
instruments of further assurance, or for the sufficiency of the security for the Bonds
issued hereunder or intended to be secured hereby and the Trustee shall not be bound to
ascertain or inquire as to the observance or performance of any covenants, conditions or
agreements on the part of the Authority hereunder.
(d) The Trustee may become the Owner of Bonds secured hereby with the same
rights which it would have if not the Trustee;may acquire and dispose of other bonds or
evidences of indebtedness of the Authority with the same rights it would have if it were
29
Y
not the Trustee; and may act as a depository for and permit any of its officers or
directors to act as a member of, or in any other capacity with respect to, any committee
formed to protect the rights of Owners of Bonds, whether or not such committee shall
represent the Owners of the majority in aggregate principal amount of the Bonds then
Outstanding.
(e) The Trustee shall be protected in acting, in good faith, upon any notice,
request,consent, certificate, order, affidavit,letter, telegram or other paper or document
believed by it to be genuine and correct and to have been signed or sent by the proper
person or persons. Any action taken or omitted to be taken by the Trustee in good faith
pursuant to this Indenture upon the request or authority or consent of any person who at
the time of making such request or giving such authority or consent is the Owner of any
Bond, shall be conclusive and binding upon all future Owners of the same Bond and
upon Bonds issued in exchange therefor or in place thereof. The Trustee shall not be
bound to recognize any person as an Owner of any Bond or to take any action at his
request unless the ownership of such Bond by such person shall be reflected on the
Registration Books.
(f) As to the existence or non-existence of any fact or as to the sufficiency or
validity of any instrument, paper or proceeding, the Trustee shall be entitled to rely
upon a Certificate of the Authority as sufficient evidence of the facts therein contained
and prior to the occurrence of an Event of Default hereunder of which the Trustee has
been given notice or is deemed to have notice, as provided in Section 6.02(h) hereof,
shall also be at liberty to accept a Certificate of the Authority to the effect that any
particular dealing, transaction or action is necessary or expedient, but may at its
discretion secure such further evidence deemed by it to be necessary or advisable, but
shall in no case be bound to secure the same.
(g) The permissive right of the Trustee to do things enumerated in this Indenture
shall not be construed as a duty and it shall not be answerable for other than its
negligence or willful default. The immunities and exceptions from liability of the Trustee
shall extend to its officers, directors, employees and agents.
(h) The Trustee shall not be required to take notice or be deemed to have notice
of any Event of Default hereunder except failure by the Agency to make any of the
payments to the Trustee required to be made by the Agency pursuant to any of the Loan
Agreements or failure by the Authority or the Agency to file with the Trustee any
document required by this Indenture or any of the Loan Agreements to be so filed
subsequent to the issuance of the Bonds, unless the Trustee shall be specifically notified
in writing of such default by the Authority or by the Owners of at least twenty-five
percent (25%) in aggregate principal amount of the Bonds then Outstanding and all
notices or other instruments required by this Indenture to be delivered to the Trustee
must, in order to be effective, be delivered at the Trust Office of the Trustee, and in the
absence of such notice so delivered the Trustee may conclusively assume there is no
Event of Default hereunder except as aforesaid.
(i) At any and all reasonable times the Trustee, and its duly authorized agents,
attorneys, experts, accountants and representatives, shall have the right fully to inspect
all books, papers and records of the Authority pertaining to the Bonds, and to make
copies of any of such books, papers and records such as may be desired but which is
not privileged by statute or by law.
(j) The Trustee shall not be required to give any bond or surety in respect of the
execution of the said trusts and powers or otherwise in respect of the premises hereof.
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(k) :Notwithstanding anything elsewhere in this Indenture with respect to the
execution of any Bonds, the withdrawal of any cash, the release of any property, or any
action whatsoever within the purview of this Indenture, the Trustee shall have the right,
but shall not be required, to demand any showings, certificates, opinions, appraisals or
other information, or corporate action or evidence thereof, as may be deemed desirable
for the purpose of establishing the right of the Authority to the execution of any Bonds,
the withdrawal of any cash, or the taking of any other action by the Trustee.
(1) Before taking the action referred to in Section 8.02, the Trustee may require
that a satisfactory indemnity bond be furnished for the reimbursement of all expenses to
which it may be put and to protect it against all liability, except liability which is
adjudicated to have resulted from its negligence or willful default in connection with any
such action.
(m) All moneys received by the Trustee shall,until used or applied or invested as
herein provided,be held in trust for the purposes for which they were received but need
not be segregated from other funds except to the extent required by law.
Section 6.03. Fees, Charges and Expenses of Trustee. The Trustee shall be entitled to
payment and reimbursement for reasonable fees for its services rendered hereunder and all
advances, counsel fees (including expenses) and other expenses reasonably and necessarily
made or incurred by the Trustee in connection with such services. Any compensation of the
Trustee shall be limited to the amounts specified in the bid letter provided by the Trustee prior
to the issuance of the Bonds, except as may otherwise be approved by the Authority. Upon the
occurrence of an Event of Default hereunder, but only upon an Event of Default, the Trustee
shall have a first lien with right of payment prior to payment of any Bond upon the amounts
held hereunder for the foregoing fees,charges and expenses incurred by it respectively.
Section 6.04. Notice to Bernd Owners of Default. If an Event of Default hereunder
occurs with respect to any Bonds of which the Trustee has been given or is deemed to have
notice, as provided in Section 6.02(h) hereof, then the Trustee shall promptly give written notice
thereof by first-class mail to the Owner of each such Bond, unless such Event of Default shall
have been cured before the giving of such notice, provided, however, that unless such Event of
Default consists of the failure by the Authority to make any payment when due, the Trustee
may elect not to give such notice to the Bond Owners if and so long as the Trustee in good faith
determines that such Event of Default does not materially adversely affect the interests of the
Bond Owners or that it is otherwise not in the best interests of the Bond Owners to give such
notice.
Section 6.05. Intervention by Trustee. In any judicial proceeding to which the Authority
is a party which, in the opinion of the Trustee and its counsel, has a substantial bearing on the
interests of Owners of any of the Bonds, the Trustee may intervene on behalf of such Bond
Owers, and subject to Section 6,02(1) hereof, shall do so if requested in writing by the Owners
of a majority in aggregate principal amount of such Bonds then Outstanding.
Section 6.06. Removal of Trustee. The Owners of a majority in aggregate principal
amount of the Outstanding Bonds may at any time, or the Authority may(and the Authority, at
the request of the Agency shall) so long as no Event of Default shall have occurred and then be
continuing, remove the Trustee initially appointed, and any successor thereto,by an instrument
or concurrent instruments in writing delivered to the Trustee at least thirty(30) days prior to the
effective date of each removal, whereupon the Authority or such Owners, as the case may be,
shall appoint a successor or successors thereto, provided that any such successor shall be a
bank or trust company meeting the requirements set forth in Section 6.01.
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Section 6.07. Resignation by Trustee. The Trustee and any successor Trustee may at
any time give thirty (30)days'written notice of its intention to resign as Trustee hereunder,such
notice to be given to the Authority and the Agency by registered or certified mail. Upon
receiving such notice of resignation,the Authority shall promptly appoint a successor Trustee.
Section 6.08. Appointment of Successor Trustee. In the event of the removal or
resignation of the Trustee pursuant to Sections 6.06 or 6.07, respectively, with the prior written
consent of the Agency, the Authority shall promptly appoint a successor Trustee. In the event
the Authority shall for any reason whatsoever fail to appoint a successor Trustee within ninety
(90) days following the delivery to the Trustee of the instrument described in Section 6.06 or
within ninety (90) days following the receipt of notice by the Authority pursuant to Section
6.07, the Trustee may apply to a court of competent jurisdiction for the appointment of a
successor Trustee meeting the requirements of Section 6.01 hereof. Any such successor Trustee
appointed by such court shall become the successor Trustee hereunder notwithstanding any
action by the Authority purporting to appoint a successor Trustee following the expiration of
such ninety-day period.
Any resignation or removal of the Trustee pursuant to Section 6.06 or Section 6.07 and
appointment of a successor Trustee shall become effective upon written acceptance of
appointment by the successor Trustee. Upon such acceptance, the Authority shall cause notice
thereof to be given by first class mail, postage prepaid, to the Bond Owners at their respective
addresses set forth on the Registration Books.
Section 6.09. Merger or Consolidation. 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 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, without the
execution or filing of any paper or further act, anything herein to the contrary notwithstanding.
Section 6.10. Concerning any Successor Trustee. Every successor Trustee appointed
hereunder shall execute, acknowledge and deliver to its predecessor and also to the Authority
an instrument in writing accepting such appointment hereunder and thereupon such successor,
without any further act, deed or conveyance, shall become fully vested with all the estates,
properties, rights, powers, trusts, duties and obligations of its predecessors, but such
predecessor shall, nevertheless, on the Request of the Authority, or of the Trustee's successor,
execute and deliver an instrument transferring to such successor all the estates, properties,
rights, powers and trusts of such predecessor hereunder; and every predecessor Trustee shall
deliver all securities and moneys held by it as the Trustee hereunder to its successor. Should
any instrument in writing from the Authority be required by any successor Trustee for more fully
and certainly vesting in such successor the estate, rights, powers and duties hereby vested or
intended to be vested in the predecessor Trustee, any and all such instruments in writing shall,
on request,be executed, acknowledged and delivered by the Authority.
Section 6.11. Appointment of Co-Trustee. It is the purpose of this Indenture that there
shall be no violation of any law of any jurisdiction (including particularly the law of the State)
denying or restricting the right of banking corporations or associations to transact business as
Trustee in such jurisdiction. It is recognized that in the case of litigation under this Indenture,
and in particular in case of the enforcement of the rights of the Trustee on default, or in the case
the Trustee deems that by reason of any present or future law of any jurisdiction it may not
exercise any of the powers, rights or remedies herein granted to the Trustee or hold title to the
32
properties, in trust, as herein granted, or take any ether action which may be desirable or
necessary in connection therewith, it may be necessary that the Trustee appoint an additional
individual or institution as a separate co-trustee. The following provisions of this Section 6.11
are adopted to these ends.
In the event that the Trustee appoints an additional individual or institution as a
separate or co-trustee, each and every remedy, power, right, claim, demand, cause of action,
immunity, estate, title, interest and lien expressed or intended by this Indenture to be exercised
by or vested in or conveyed to the Trustee with respect thereto shall be exercisable by and vest
in such separate or co-trustee but only to the extent necessary to enable such separate or co-
trustee to exercise such powers, rights and remedies, and every covenant and obligation
necessary to the exercise thereof by such separate or co-trustee shall run to and be enforceable
by either of them.
Should any instrument in writing from the Authority be required by the separate trustee
or co-trustee so appointed by the Trustee for more fully and certainly vesting in and confirming
to it such properties,rights,powers, trusts, duties and obligations,any and all such instruments
in writing shall,on request,be executed, acknowledged and delivered by the Authority. In case
any separate trustee or co-trustee, or a successor to either, shall become incapable of acting,
resign or be removed, all the estates, properties, rights,powers, trusts, duties and obligations of
such separate trustee or co-trustee, so far as permitted by law, shall vest in and be exercised by
the Trustee until the appointment of a new trustee or successor to such separate trustee or co-
trustee.
Section 6.12. Indemnification, Limited Liability of Trustee. The Authority further
covenants and agrees to indemnify and save the Trustee and its officers, directors, agents and
employees,harmless against any loss,expense and liabilities which it may incur arising out of or
in the exercise and performance of its powers and duties hereunder or under any Loan
Agreement, including the costs and expenses of defending against any claim of liability, but
excluding any and all losses, expenses and liabilities which are due to the negligence or
intentional misconduct of the Trustee, its officers, directors, agents or employees. leo provision
in this Indenture shall require the Trustee to risk or expend its own funds or otherwise incur any
financial liability hereunder if it is not assured to its satisfaction that repayment of such funds
or adequate indemnity against such liability or risk is not assured to it. The Trustee shall not be
liable for any action taken or omitted to be taken by it in accordance with the direction of the
Owners of a majority in aggregate principal amount of Bonds Outstanding relating to the time,
method and place of conducting any proceeding or remedy available to the Trustee under this
Indenture. The obligations of the Authority under this paragraph shall survive the resignation or
removal of the Trustee under this Indenture or any defeasance of the Bonds.
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ARTICLE VII
MODIFICATION AND AMENDMENT OF THE INDENTURE
Section 7.01. Amendment Hereof. This Indenture and the rights and obligations of the
Authority and of the Owners of the Bonds may be modified or amended at any time by a
Supplemental Indenture which shall become binding upon adoption, without consent of any
Bond Owners, to the extent permitted by law but only for any one or more of the following
purposes-
(a) to add to the covenants and agreements of the Authority contained in this
Indenture, other covenants and agreements hereafter to be observed,to pledge or assign
additional security for the Bonds (or any portion thereof), or to surrender any right or
power herein reserved to or conferred upon the Authority;
(b) to make such provisions for the purpose of curing any ambiguity,
inconsistency or omission,or of curing or correcting any defective provision,contained in
this Indenture,or in any other respect whatsoever, as the Authority may deem necessary
or desirable, provided that such modification or amendment does not materially
adversely affect the interests of the Bond Owners in the opinion of Bond Counsel;
(c) to modify, amend or supplement the Indenture in such manner as to permit
the qualification of this Indenture under the Trust Indenture Act of 1939, as amended, or
any similar federal statute hereafter in effect, and to add such other terms, conditions
and provisions as may be permitted by said act or similar federal statute;
(d) to amend any provision hereof relating to the Tax Cade, to any extent
whatsoever but only if and to the extent such amendment will not adversely affect the
exclusion from gross income of interest on any of the Bonds under the Tax Code, in the
opinion of Bond Counsel;or
(e) to facilitate the issuance of additional obligations of the Agency pursuant to
a Loan Agreement.
Except as set forth in the preceding paragraph of this Section 7.01., this Indenture and
the rights and obligations of the Authority and of the Owners of the Bonds may only be
modified or amended at any time by a Supplemental Indenture which shall become binding
when the written consents of the Owners of a majority in aggregate principal amount of the
Bonds then Outstanding are filed with the Trustee. leo such modification or amendment shall
(a) extend the maturity of or reduce the interest rate on any Bond or otherwise alter or impair
the obligation of the Authority to pay the principal, interest or premiums (if any) at the time
and place and at the rate and in the currency provided therein of any Bond without the express
written consent of the Owner of such Bond, (b) reduce the percentage of Bonds required for the
written consent to any such amendment or modification, or (c) without its written consent
thereto,modify any of the rights or obligations of the Trustee.
Section. 7.02. Effect of Supplemental Indenture. From and after the time any
Supplemental Indenture becomes effective pursuant to this Article VII, this Indenture shall be
deemed to be modified and amended in accordance therewith, the respective rights, duties and
obligations of the parties hereto or thereto and all Owners of Outstanding Bonds, as the case
may be, shall thereafter be determined., exercised and enforced hereunder subject in all respects
to such modification and amendment, and all the terms and conditions of any Supplemental
34
Indenture shall be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
Section 7.133. Endorsement or Replacement of Bonds After Amendment. After the
effective date of any action taken as hereinabove provided, the Authority may determine that
the Bonds shall bear a notation,by endorsement in form approved by the Authority, as to such
action, and in that case upon demand of the Owner of any Bond Outstanding at such effective
date and presentation of his Bond for that purpose at the Trust Office of the Trustee, a suitable
notation as to such action shall be made on such Bond. If the Authority shall so determine,new
Bonds so modified as, in the opinion of the Authority, shall be necessary to conform to such
Bond Owners' action shall be prepared and executed, and in that case upon demand of the
Owner of any Bond Outstanding at such effective date such new Bonds shall be exchanged at
the 'frust Office of the Trustee, without cost to each Bond Owner, for Bonds then Outstanding,
upon surrender of such Outstanding Bonds.
Section 7.04. Amendment by Mutual Consent. The provisions of this Article VII shall
not prevent any Bond Owner from accepting any amendment as to the particular Bond held by
hien,provided that due notation thereof is made on such Bond.
35
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.01. Events of Default. The following events shall be Events of Default
hereunder:
(a) Default in the due and punctual payment of the principal. of any Bond when
and as the same shall become due and payable, whether at maturity as therein
expressed,by proceedings for redemption,by declaration or otherwise.
(b) Default in the due and punctual payment of any installment of interest on
any Bond when and as such interest installment shall become due and payable.
(c) Failure by the Authority to observe and perform any of the covenants,
agreements or conditions on its part in this Indenture or in the Bands contained, other
than as referred to in the preceding clauses (a) and (b), for a period of sixty (60) days
after written notice, specifying such failure and requesting that it be remedied has been
given to the Authority by the Trustee;provided,however, that if in the reasonable opinion
of the Authority the failure stated in such notice can be corrected, but not within such
sixty (60) day period, such failure shall not constitute an Event of Default if corrective
action is instituted by the Authority within such sixty (60) day period and diligently
pursued until such failure is corrected.
(d) The filing by the Authority of a petition or answer seeking reorganization or
arrangement under the federal bankruptcy laws or any other applicable law of the
United States of America, or if a court of competent jurisdiction shall approve a
petition, filed with or without the consent of the Authority,seeking reorganization under
the federal bankruptcy laws or any other applicable law of the United States of
America, 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 Authority or of
the whole or any substantial part of its property.
Section 8.02. Remedies Upon Event of Default. If any Event of Default shall occur,
then, and in each and every such case during the continuance of such Event of Default, the
Trustee may, and at the written direction of the Owners of a majority in aggregate principal
amount of the Bonds at the time Outstanding shall, upon notice in writing to the Authority and
the Agency, pursue any available remedy at law or in equity to enforce the payment of the
principal of and interest and premium (if any) on the Bonds, and to enforce any rights of the
Trustee under or with respect to this Indenture. Notice of the occurrence of any Event of
Default shall be given by the Trustee to the Bond Owners if and to the extent required pursuant
to Section 6.04 and indemnification is provided to the Trustee pursuant to Section 6.12 hereof.
If an Event of Default shall have occurred and be continuing and if requested so to do by
the Owners of a majority in aggregate principal amount of Outstanding Bonds and indemnified
as provided in Section 6.02(l), the Trustee shall be obligated to exercise such one or more of the
rights and powers conferred by this Article VIII, as the Trustee,being advised by counsel, shall
deem most expedient in the interests of the Bond Owners.
1\o remedy by the terms of this Indenture conferred upon or reserved to the Trustee (or
to the Bond Owners) is intended to be exclusive of any other remedy, but each and every such
remedy shall be cumulative and shall be in addition to any other remedy given to the Trustee or
to the Bond Owners hereunder or now or hereafter existing at law or in equity.
36
No delay or omission to exercise any right or power accruing upon any Event of Default
shall impair any such right or power or shall be construed to be a waiver of arty such Event of
Default or acquiescence therein;such right or power may be exercised from time to time as often
as may be deemed expedient.
Section 8.03. Application of Revenues and Other Funds After Default. All amounts
received by the Trustee pursuant to any right given or action taken by the Trustee under the
provisions of this Indenture shall be applied by the Trustee in the following order 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 -
Eir to the payment of the fees, costs and expenses of the Trustee in declaring
such Event of Default and in carrying out the provisions of this Article Mill, including
reasonable compensation to its agents, attorneys and counsel; and
Second, to the payment of the whole amount of interest on and principal of the
Bonds then due and unpaid, with interest on overdue installments of principal and
interest to the extent permitted by law at the net effective rate of interest then borne by
the Outstanding Bonds; provided, however, that in the event such amounts shall be
insufficient to pay in full the full amount of such interest and principal, then such
amounts shall be applied in the following order of priority.
(a) first, to the payment of all installments of interest on the Bonds then
due and unpaid, on a pro rata basis in the event that the available amounts are
insufficient to pay all such interest in full,
(b) second, to the payment of principal of the Bonds then due and
payable, such that the unpaid principal reflects, to the furthest extent possible,
the unpaid portion of the Loans, in the event that the available amounts are
insufficient to pay all such principal in full,and
(c) third, to the payment of interest on overdue installments of principal
and interest, on a pro rata basis in the event that the available amounts are
insufficient to pay all such interest in full.
Section 8.04. Power of Trustee to Control Proceedings. In the event that the Trustee,
upon the happening of an Event of Default, shall have taken any action,by judicial proceedings
or otherwise, pursuant to its duties hereunder, whether upon its own discretion or upon the
request of the Owners of at least a majority in aggregate principal amount of the Bonds then
Outstanding, it shall have full power,in the exercise of its discretion for the best interests of the
Owners of the Bonds, with respect to the continuance, discontinuance, withdrawal,
compromise, settlement or other disposal of such action; provided, however, that the Trustee
shall not, unless there no longer continues an Event of Default, discontinue, withdraw,
compromise or settle,or otherwise dispose of any litigation pending at law or in equity,if at the
time there has been filed with it a written request signed by the Owners of a majority in
aggregate principal amount of the Outstanding Bonds hereunder opposing such discontinuance,
withdrawal, compromise, settlement or other disposal of such litigation. .Any suit, action or
proceeding which any Owner of Bonds 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
Owners of Bonds similarly situated and the Trustee is hereby appointed (and the successive
respective Owners of the Bonds issued hereunder, by taking and holding the same, shall be
conclusively deemed so to have appointed it) the true and lawful attorney-in-fact of the
respective Owners of the Bonds for the purpose of bringing any such suit, action or proceeding
37
and to do and perform any and all acts and things for and on behalf of the respective Owners
of the Bonds as a class or classes, as may be necessary or advisable in the opinion of the
Trustee as such attorney-in-fact.
Section 8.05. Appointment of Receivers. Upon the occurrence of an Event of Default
hereunder, and upon the filing of a suit or other commencement of judicial proceedings to
enforce the rights of the Trustee and of the Bond Owners under this Indenture,the Trustee shall
be entitled, as a matter of right, to the appointment of a receiver or receivers of the Revenues
and other amounts pledged hereunder,pending such proceedings,with such powers as the court
making such appointment shall confer.
Section 8.06. Non-Waiver. Nothing in this Article VIII or in any other provision of this
Indenture, or in the Bonds, shall affect or impair the obligation of the Authority, which is
absolute and unconditional, to pay the interest on and principal of the Bonds to the respective
Owners of the Bonds at the respective dates of maturity, as herein provided, out of the
Revenues and other moneys herein pledged for such payment.
A waiver of any default or breach of duty or contract by the Trustee or any Bond
Owners 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. No delay or omission of the
Trustee or any Owner of any of the Bonds to exercise any right or power accruing upon any
default or breach shall impair any such right or power or shall be construed to be a waiver of
any such default or breach or an acquiescence therein; and every power and remedy conferred
upon the Trustee or Bond Owners by the Bond Law or by this Article VIII may be enforced and
exercised from time to time and as often as shall be deemed expedient by the Trustee or the
Bond Owners, as the case may be.
Section 8.07. Rights and Remedies of Bond Owners. No Owner of any Bond issued
hereunder shall have the right to institute any suit, action or proceeding at law or in equity, for
any remedy under or upon this Indenture, unless (a) such Owner shall have previously given to
the Trustee written notice of the occurrence of an Event of Default; (b) the Owners of 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 action,
suit or proceeding in its own name; (c) said Owners shall have tendered to the Trustee
indemnity reasonably acceptable to the Trustee against the costs, expenses and liabilities to be
incurred in compliance with such request; (d) the Trustee shall have refused or omitted to
comply with such request for a period of sixty (60) days after such written request shall have
been received by, and said tender of indemnity shall have been made to,the Trustee; and (e) no
direction inconsistent with such written request has been given to the Trustee during such sixty
(60) day period by the Owners of a majority in aggregate principal amount of the Bonds then
Outstanding.
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
Indenture,except in the manner herein provided,and that all proceedings at law or in equity to
enforce any provision of this Indenture shall be instituted, had and maintained in the manner
herein provided and for the equal benefit of all Owners of the Outstanding Bonds.
The right of any Owner of any Bond to receive payment of the principal of and interest
and premium(if any) on such Bond as herein provided or to institute suit for the enforcement of
any such payment,shall not be impaired or affected without the written consent of such Owner,
notwithstanding the foregoing provisions of this Section or any other provision of this Indenture.
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Section 8.08. Termination of Proceedings. In case the Trustee shall have proceeded to
enforce any right under this Indenture by the appointment of a receiver or otherwise, and such
proceedings shall have been discontinued or abandoned for any reason, or shall have been
determined adversely, then and in every such case, the Authority, the Trustee and the Bond
Owners shall be restored to their former positions and rights hereunder, respectively, with
regard to the property subject to this Indenture, and all rights, remedies and powers of the
Trustee shall continue as if no such proceedings had been taken.
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ARTICLE IX
MISCELLANEOUS
Section 9.01. Limited Liability of Authority. Notwithstanding anything in this
Indenture contained, the Authority shall not be required to advance any moneys derived from
any source of income other than the Revenues for the payment of the principal of or interest on
the Bonds, or any premiums upon the redemption thereof, or for the performance of any
covenants herein contained (except to the extent any such covenants are expressly payable
hereunder from the Revenues or otherwise from amounts payable under the Loan Agreements).
The Authority may, however, advance funds for any such purpose, provided that such funds
are derived from a source legally available for such purpose and may be used by the Authority
for such purpose without incurring indebtedness.
The Bonds shall be revenue bonds, payable exclusively from the Revenues and other
funds as in this Indenture provided. The general fund of the Authority is not liable, and the
credit of the Authority is not pledged, for the payment of the interest and premium (if any) on
or principal of the Bonds. The Owners of the Bonds shall never have the right to compel the
forfeiture of any property of the Authority. The principal of and interest on the Bonds, and any
premiums upon the redemption of any thereof, shall not be a legal or equitable pledge, charge,
lien or encumbrance upon any property of the Authority or upon any of its income, receipts or
revenues except the Revenues and other funds pledged to the payment thereof as in this
Indenture provided.
Section 9.02. Benefits of Indenture Limited to Parties. Nothing in this Indenture,
expressed or implied, is intended to give to any person other than the Authority, the Trustee,
the Agency and the Owners of the Bonds, any right,remedy or claim under or by reason of this
Indenture. Any covenants, stipulations,promises or agreements in this Indenture contained by
and on behalf of the Authority shall be for the sole and exclusive benefit of the Trustee, the
Agency and the Owners of the Bonds.
Section 9.€33. Discharge of Indenture. If the Authority shall pay and discharge any or all
of the Outstanding Bonds in any one or more of the following ways:
(a) by well and truly paying or causing to be paid the principal of, and
the interest and premium (if any) on, such Bonds as and when the same become
due and payable;
(b) by irrevocably depositing with the Trustee, in trust, at or before
maturity, money which, together with the available amounts then on deposit in
the funds and accounts established with the Trustee pursuant to this Indenture
and the Loan Agreements, is fully sufficient to pay such Bonds, including all
principal,interest and premiums(if any);or
(c) by irrevocably depositing with the Trustee or any other fiduciary, in
trust, non-callable Defeasance Obligations in such amount as an Independent
Accountant or Bond Counsel shall determine will, together with the interest to
accrue thereon and available moneys then on deposit in the funds and accounts
established with the Trustee pursuant to this Indenture and the Loan
Agreements, be fully sufficient to pay and discharge the indebtedness on such
Bonds (including all principal, interest and redemption premiums) at or before
their respective maturity dates;
40
and if such Bonds are to be redeemed prior to the maturity thereof notice of such redemption
shall have been mailed pursuant to Section 2.02(c) or provision satisfactoryto the Trustee shall
have been made for the mailing of such notice, then, at the Request of the Authority, and
notwithstanding that any of such Bonds shall not have been surrendered for payment, the
pledge of the Revenues and other funds provided for in this Indenture with respect to such
Bonds,and all other pecuniary obligations of the Authority under this Indenture with respect to
all such Bonds, shall cease and terminate, except only the obligation of the Authority to pay or
cause to be paid to the Owners of such Bonds not so surrendered and 'paid all sums due
thereon from amounts set aside for such purpose as aforesaid, and all expenses and costs of
the Trustee. Any funds held by the Trustee following any payment or discharge of the
Outstanding Bonds pursuant to this Section 9.03, which are not required' for said purposes,
shall be paid over to the Authority.
Section 9.04. Successor Is Deemed Included in All References to Predecessor. Whenever
in this Indenture or any Supplemental Indenture the Authority is named or referred to, such
reference shall be deemed to include the successor to the powers, duties and functions, with
respect to the management, administration and control of the affairs of the Authority, that are
presently vested in the Authority, and all the covenants, agreements and provisions contained
in this Indenture by or on behalf of the Authority shall bind and inure to the benefit of its
successors whether so expressed or not.
Section 9,05. Content of Certificates. Every certificate with respect to compliance with
a condition or covenant provided for in this Indenture made or given by an officer of the
Authority may be based, insofar as it relates to legal matters,upon a certificate or opinion of or
representations by counsel, unless such officer knows that the certificate or opinion or
representations with respect to the matters upon which his certificate may be based are
erroneous, or in the exercise of reasonable care should have known that the same were
erroneous. Any such certificate or opinion or representation made or given by counsel may be
based, insofar as it relates to factual matters, on information with respect to which is in the
possession of the Authority, or upon the certificate or opinion of or representations by an
officer or officers of the Authority, unless such counsel knows that the certificate or opinion or
representations with respect to the matters upon which his certificate,opinion or representation
may be based are erroneous, or in the exercise of reasonable care should have known that the
same were erroneous.
Section. 9.06. Execution of Documents by Bond Owners. Any request,consent or other
instrument required by this Indenture to be signed and executed by Bond Owners may be in any
number of concurrent writings of substantially similar tenor and may be signed or executed by
such Bond Owners in person or by their agent or agents duly appointed in writing. Proof of the
execution of any such request, consent or other instrument or of a writing appointing any such
agent,shall be sufficient for any purpose of this Indenture and shall be conclusive in favor of the
Trustee and of the Authority if made in the manner provided in this Section 9.06.
The fact and date of the execution by any person of any such request, consent or other
instrument or writing may be proved by the affidavit of a witness of such execution or by the
certificate of any notary public or other officer of any jurisdiction, authorized by the laws
thereof to take acknowledgments of deeds, certifying that the person signing such request,
consent or other instrument or writing acknowledged to him the execution thereof.
The ownership of Bonds shall be proved by the Registration Books. Any request,
consent or vote of the Owner of any Bond shall bind every future Owner of the same Bond and
the Owner of any Bond issued in exchange therefor or in lieu thereof,in respect of anything done
or suffered to be done by the Trustee or the Authority in pursuance of such request, consent or
vote. In lieu of obtaining any demand, request, direction, consent or waiver in writing, the
41
Trustee may call and hold a meeting of the Bond Owners upon such notice and in accordance
with such rules and obligations as the Trustee considers fair and reasonable for the purpose of
obtaining any such action.
Section 9.07. Disqualified Bonds. In determining whether the Owners of the requisite
aggregate principal amount of Bonds have concurred in any demand,request,direction,consent
or waiver under this Indenture, Bonds which are owned or held by or for the account of the
Agency or the Authority (but excluding Bonds held in any employees'retirement fund) shall be
disregarded and deemed not to be Outstanding for the purpose of any such determination,
provided, however, that for the purpose of determining whether the Trustee shall be protected in
relying on any such demand,request,direction,consent or waiver,only Bonds which the Trustee
knows to be so owned or held shall be disregarded.
Section 9.08. Waiver of Personal Liability. No officer, agent or employee of the
Authority shall be individually or personally liable for the payment of the interest on or
principal of the Bonds, but nothing herein contained shall relieve any such officer, agent or
employee from the performance of any official duty provided by law.
Section 9.09. Partial Invalidity. If any one or more of the covenants or agreements, or
portions thereof,provided in this Indenture on the part of the Authority(or of the Trustee)to be
performed should be contrary to law, then such covenant or covenants, such agreement or
agreements,or such portions thereof,shall be null and void and shall be deemed separable from
the remaining covenants and agreements or portions thereof and shall in no way affect the
validity of this Indenture or of the Bonds, but the Bond Owners shall retain all rights and
benefits accorded to them under the Bond Law or any other applicable provisions of law. The
Authority hereby declares that it would have entered into this Indenture and each and every
other 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 sections, paragraphs, subdivisions, sentences, clauses or phrases of this Indenture or the
application thereof to any person or circumstance may be held to be unconstitutional,
unenforceable or invalid.
Section 9.10. Destruction of Cancelled Bonds. Whenever in this Indenture provision is
made for the surrender to the Authority of any Bonds which have been paid or cancelled
pursuant to the provisions of this Indenture, at the Request of the Authority the Trustee shall
destroy such Bonds and furnish to the Authority a certificate of such destruction.
Section 9.11. Funds and Accounts. Any fund or account required by this Indenture to
be established and maintained by the Authority or the Trustee may be established and
maintained in the accounting records of the Authority or the Trustee, as the case may be, either
as a fund or an account, and may, for the purpose of such records, any audits thereof and any
reports or statements with respect thereto, be treated either as a fund or as an account. All
such records with respect to all such funds and accounts held by the Authority shall at all times
be maintained in accordance with generally accepted accounting principles and all such records
with respect to all such funds and accounts held by the Trustee shall be at all times maintained
in accordance with industry practices; in each case with due regard for the protection of the
security of the Bonds and the rights of every Owner thereof. Any fund or account required by
this Indenture to be established and maintained by the Authority or the Trustee may be
established and maintained in the form of multiple funds, accounts or sub-accounts therein.
Section 9.12. Payment on Business Days. Whenever in this Indenture any amount is
required to be paid on a day which is not a Business Day, such payment shall be required to be
made on the Business Day immediately following such day, provided that interest shall not
accrue from and after such day.
42
Section 9.13. Notices. Any notice, request, complaint, demand or other communication
under this Indenture shall be given by first class mail or personal delivery to the party entitled
thereto at its address set forth below, or by telecopy or other form of telecommunication, at its
number set forth below. Notice shall be effective either (a) upon transmission by telecopy or
other form of telecommunication, (b) 48 hours after deposit in the United States mail, postage
prepaid, or (c) in the case of personal delivery to any person, upon actual receipt. The
Authority, the Agency or the Trustee may, by written notice to the other parties, from time to
time modify the address or number to which communications are to be given hereunder.
If to the Authority: County of Contra Costa
Public Financing Authority
County Administration Building
c/o Community Development Department
651 Pine Street,4th Floor,North Wing
Martinez, California 94553
Attention: Deputy Executive Director
Telecopier: (925) 646-1309
If to the Agency: Contra Costa County Redevelopment Agency
County Administration Building
c/o Community Development Department
651 Pine Street, 4th Floor,North Wing
Martinez, California 94553
Attention: Deputy Director-Redevelopment
Telecopier: (925) 646-1309
If to the Trustee: T.T.S. Bank Trust National Association
One California Street,Suite 400
San Francisco, California 94211
Attention: Corporate Trust
Telecopier: (415) 273-4591
Whenever in this Indenture the giving of notice by mail or otherwise is required,the giving
of such notice may be waived in writing by the person entitled to receive such notice and in any
such case the giving or receipt of such notice shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
Section 9.14. Unclaimed Moneys. Anything in this Indenture to the contrary
notwithstanding, subject to the laws of the State, any moneys held by the Trustee in trust for
the payment and discharge of any of the Bonds which remain unclaimed for two (2) years after
the date when such Bonds have become due and payable, either at their stated maturity dates
or by call for earlier redemption, if such moneys were held by the Trustee at such date, or for
two (2) years after the date of deposit of such moneys if deposited with the Trustee after said
date when such Bonds become due and payable, shall, at the Request of the Authority, be
repaid by the Trustee to the Authority, as its absolute property and free from trust, and the
Trustee shall thereupon be released and discharged with respect thereto and. the Bond Owners
shall look only to the Authority for the payment of such Bonds; provided, however, that before
being required to make any such payment to the Authority, the Trustee shall, at the expense of
the Authority, cause to be mailed to the Owners of all such Bonds, at their respective addresses
appearing on the Registration Books, a notice that said moneys remain unclaimed and that,
after a date named in said notice, which date shall not be less than thirty(30) days after the
date of mailing of such notice, the balance of such moneys then unclaimed will be returned to
the Authority.
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Section 9.15. Governing Law. This Agreement shall he construed and governed in
accordance with the laws of the State of California.
44
IN WITNESS WHEREOF, the COUNTY OF CONTRA COSTA PUBLIC FINANCING
AUTHORITY has caused this Indenture to be signed in its name and U.S. BANK TRUST
NATIONAL ASSOCIATION, in token of its acceptance of the trust created hereunder, has
caused this Indenture to be signed in its corporate name by its officer identified below, all as of
the day and year first above written.
COUNTY OF CONTRA COSTA PUBLIC
FINANCING AUTHORITY
By
Deputy Executive Director
U.S. BANK TRUST NATIONAL
ASSOCIATION, as Trustee
By
Authorized Officer
03012.01:J4084
45
EXHIBIT A
FORM OF BONDS
No. $
COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY
1999 Tax Allocation Revenue Bond
(Pleasant Hill BART, North Richmond, Bay Point, Rodeo
and Oakley Redevelopment Project Areas)
RATE OF INTEREST: MATURITY DATE: ORIGINAL ISSUE DATE: CUSIP:
March 1, 1999
REGISTERED OWNER:
PRINCIPAL AMOUNT:
The COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY, a joint
powers authority organized and existing under the laws of the State of California (the
"Authority"), for value received, hereby promises to pay (but only out of the Revenues and
other moneys and securities hereinafter referred to) to the Registered Owner identified above or
registered assigns (the "Registered Owner"), on the Maturity Date identified above, the
Principal Amount identified above in lawful money of the United States of America; and to pay
interest thereon at the Rate of Interest identified above in like money from the Interest Payment
Date (as hereinafter defined) next preceding the date of authentication of this Bond (unless this
Bond is authenticated on or before an Interest Payment Date and after the fifteenth calendar
day of the month preceding such Interest Payment Date, in which event it shall bear interest
from such Interest Payment Date, or unless this Bond is authenticated on or prior to January 15,
1993, in which event it shall bear interest from the Original Issue Date identified above;
provided, however, that if, at the time of authentication of this Bond, interest is in default on this
Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has
previously been paid or made available for payment), payable semiannually on February 1 and
August 1 in each year, commencing August 1, 1999 (each, an "Interest Payment Date") until
payment of such Principal Amount in full. The Principal Amount hereof is payable upon
presentation hereof at the principal corporate trust office (the "Trust Office") of U.S. Bank
Trust National Association, as trustee (the "Trustee"), in Los Angeles, California. Interest
hereon is payable by check or draft of the Trustee mailed by first class mail on each Interest
Payment Date to the Registered Owner hereof at the address of the Registered Owner as it
appears on the Registration Books of the Trustee as of the fifteenth calendar day of the month
preceding such Interest Payment Date;except that at the written request of the owner of at least
$1,000,000 in aggregate principal amount of outstanding Bonds filed with the Trustee prior to
the fifteenth calendar day of the month preceding any Interest Payment Date, interest on such
Bonds shall be paid to such owner on such Interest Payment Date by wire transfer of
immediately available funds to an account in the continental United States designated in such
written request.
This Bond is one of a duly authorized issue of bonds of the Authority designated the
"County of Contra Costa Public Financing Authority 1999 Tax Allocation Revenue Bonds
(Pleasant Hill BART, forth Richmond, Bay Point, Rodeo and Oakley Redevelopment Project
Areas)" (the "Bonds"), limited in principal amount to $ secured by an Indenture of
Trust dated as of March 1, 1999 (the "Indenture"), by and between the Authority and the
Trustee. Reference is hereby made to the Indenture and all indentures supplemental thereto for
a description of the rights thereunder of the owners of the Bonds,of the nature and extent of the
Revenues (as that term is defined in the Indenture), of the rights, duties and immunities of the
Trustee and of the rights and obligations of the Authority thereunder,and all of the terms of the
Indenture are hereby incorporated herein and constitute a contract between the Authority and
the Registered Owner hereof, and to all of the provisions of which Indenture the Registered
Owner hereof,by acceptance hereof, assents and agrees.
The Bonds are authorized to be issued pursuant to the provisions of the Marks-Roos
Local Bond Pooling Act of 1985, constituting Article 4 (commencing with Section 6584) of
Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the
"Act"). The Bonds are special obligations of the Authority and, as and to the extent set forth
in the Indenture, are payable solely from and secured by a first lien and pledge of the Revenues
and certain other moneys and securities held by the Trustee as provided in the Indenture. All of
the Bonds are equally secured by a pledge of,and charge and lien upon, all of the Revenues and
such other moneys and securities, and the Revenues and such other moneys and securities
constitute a trust fund for the security and payment of the principal of and interest and
premium (if any) on the Bonds. The full faith and credit of the Authority is not pledged for the
payment of the principal of or interest or redemption premiums (if any) on the Bonds. The
Bonds are not secured by a legal or equitable pledge of, or charge, lien or encumbrance upon,
any of the property of the Authority or any of its income or receipts, except the Revenues and
such other moneys and securities as provided in the Indenture.
The Bonds have been issued to provide funds to make five loans (collectively, the
"Loans") to the Contra Costa County Redevelopment Agency (the "Agency") all as more
particularly described in the Indenture. The Loans will be made by the Authority to the Agency
pursuant to five separate Loan Agreements (collectively, the "Loan Agreements"), each by and
between the Agency and the Authority. Certain amounts payable by the Agency under the
Loan Agreements have been assigned to the Trustee under the Indenture, and such amounts
constitute the principal source of Revenues which are pledged to the payment of the Bonds.
The Agency has incurred loans,and may in the future issue its bonds,notes or other obligations,
on a parity with some of the Loans, subject to the terms and conditions of the applicable Loan
Agreement.
The Bonds maturing on or before August 1, , are not subject to redemption prior to
their respective maturity dates. The Bonds maturing on or after August 1, are subject to
redemption prior to their respective maturity dates as a whole, or in part at the election of the
Authority among maturities as provided in the Indenture and by lot within a maturity, from
prepayments of the Loans made at the option of the Agency pursuant to the Loan Agreements
or any other source of available funds, on any date on or after August 1, __ , at the following
respective redemption prices (expressed as percentages of the principal amount of the Bonds to
be redeemed),plus accrued interest thereon to the date of redemption:
Redemption Dates Redemption Price
August 1, through July 31, 102 %
August 1, through July 31, 101
August 1, and thereafter 100
The Bonds maturing on August 1, , are also subject to mandatory redemption in
whole, or in part by lot, on August 1 in each year commencing August 1, , from mandatory
A-2
sinking fund payments made by the Authority for such purpose, at a redemption price equal to
the principal amount thereof to be redeemed, without premium., plus accrued interest to the
date of redemption, in the aggregate respective principal amounts and on August 1 in the
respective years as set forth in the following table.
Sinking Fund Principal Amount Sinking Fund Principal Amount
Redemption Date to be Redeemed Redemption Date to be Redeemed
(August 1 or Purchased (August 1 or Purchased
The Bonds maturing on August 1, , are also subject to mandatory redemption in
whole, or in part by lot, on August 1 in each year commencing August 1, . from mandatory
sinking fund payments made by the Authority for such purpose, at a redemption price equal to
the principal amount thereof to be redeemed, without premium, plus accrued interest to the
date of redemption, in the aggregate respective principal amounts and on August 1 in the
respective years as set forth in the following table.
Sinking Fund Principal Amount Sinking Fund Principal Amount
Redemption Date to be Redeemed Redemption Date to be Redeemed
(August 1 or Purchased Au u t 1 or Purchased
The Bonds maturing on August 1, , are also subject to mandatory redemption in
whole, or in part by lot, on August 1 in each year commencing August 1, , from mandatory
sinking fund payments made by the Authority for such purpose, at a redemption price equal to
the principal amount thereof to be redeemed, without premium, plus accrued interest to the
date of redemption, in the aggregate respective principal amounts and on August 1 in the
respective years as set forth in the following table.
Sinking Fund Principal Amount Sinking Fund Principal Amount
Redemption Date to be Redeemed Redemption Date to be Redeemed
(August 1 or Purchased Au ust 1 -rLPurchased
The Trustee on behalf and at the expense of the Authority shall mail (by first class mail)
notice of any redemption to the respective owners of any Bonds designated for redemption, at
their respective addresses appearing on the registration books maintained by the Trustee, to the
Securities Depositories and to one or more Information Services (as such terms are defined in
the Indenture), at least thirty (30) but not more than sixty (60) days prior to the redemption;
provided, however, that neither failure to receive any such notice so mailed nor any defect
therein shall affect the validity of the proceedings for the redemption of such Bonds or the
cessation of the accrual of interest on the Bonds to be redeemed from and after the date fixed
for redemption. Such notice shall state the date of the notice, the redemption date, the
redemption place and the redemption price and shall designate the CUSIP numbers, the serial
numbers of each maturity or maturities (except that in the event of redemption of all of the
A-3
Bonds of any maturity, the Trustee shall designate such maturity without referencing each
individual Bond number) of the Bonds to be redeemed, and shall require that such Bonds be
then surrendered at the Trust Office of the Trustee for redemption at the redemption price,
giving notice also that further interest on such Bonds will not accrue from and after the
redemption date.
The Bonds are issuable as fully registered Bonds without coupons in denominations of
$5,000 or any integral multiple thereof. Subject to the limitations and upon payment of the
charges, if any, provided in the Indenture, Bonds may be exchanged at the Trust Office of the
Trustee for a like aggregate principal amount and maturity of Bonds of other authorized
denominations.
This Bond is transferable by the Registered Owner hereof, in person or by his attorney
duly authorized in writing, at the Trust Office of the Trustee,but only in the manner, subject to
the limitations and upon payment of the charges provided in the Indenture, and upon surrender
and cancellation of this Bond. Upon such transfer a new Bond or Bonds, of authorized
denomination or denominations, for the same aggregate principal amount and of the same
maturity will be issued to the transferee in exchange herefor. The Authority and the Trustee
may treat the Registered Owner hereof as the absolute owner hereof for all purposes, and the
Authority and the Trustee shall not be affected by any notice to the contrary.
The Indenture and the rights and obligations of the Authority and of the owners of the
Bonds and of the Trustee may be modified or amended from time to time and at any time in the
manner, to the extent, and upon the terms provided in the Indenture; provided that no such
modification or amendment shall (a) extend the maturity of or reduce the interest rate on any
Bond or otherwise alter or impair the obligation of the Authority to pay the principal,interest or
redemption premiums at the time and place and at the rate and in the currency provided therein
of any Bond without the express written consent of the owner of such Bond, (b) reduce the
percentage of Bonds required for the written consent to any such amendment or modification,or
(c)without its written consent thereto, modify any of the rights or obligations of the Trustee, all
as more fully set forth in the Indenture.
It is hereby certified that all things, conditions and acts required 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 the
Constitution and statutes of the State of California and by the Act, and that the amount of this
Bond, together with all other indebtedness of the Authority, does not exceed any limit
prescribed by the Constitution or statutes of the State of California or by the Act.
This Bond shall not be entitled to any benefit under the Indenture, or become valid or
obligatory for any purpose, until the certificate of authentication hereon shall have been signed
by the Trustee.
Unless this Bond is presented by an authorized representative of The Depository Trust
Company, a New York. corporation ("DTC") to the Authority or the Trustee for registration of
transfer, exchange or payment, and any Bond issued is registered in the name of Cede &Co. or
such other name as requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized representative of
DTC), ANY TRANSFER, FLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner hereof, Cede &
Co.,has an interest herein.
A-4
IN WITNESS WHEREOF, the Authority has caused this Bond to be executed in its name
and on its behalf by the facsimile signatures of its Chair and Secretary and its seal to be
reproduced hereon all as of the Original Issue Date identified above.
COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY
►SEAL}
Attest: By:
Secretary Chair
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the within-mentioned Indenture and registered on
the registration books of the Trustee.
Dated: March 1999 U.S. BANK TRUST NATIONAL
ASSOCIATION, as Trustee
By
Authorized Signatory
A-5
FORM OF ASSIGNMENT
For value received the undersigned hereby sells,assigns and transfers unto
(Name,Address and Tax Identification or social Security Number of Assignee)
the within registered Bond and hereby irrevocably constitute(s) and appoints(s)
attorney,
to transfer the same on the registration books of the Trustee with full power of substitution in
the premises.
Dated:
Signature Guaranteed: Signature:
Note: Si natures)must be guaranteed by a member firm Note: The signature
s) on this Assignment must
ofgthe New York stock Exchange or any national correspond with the name(s)as written on the
stock exchange or a commercial bank or trust face of the within registered Bond in every
company. particular without alteration or enlargement
or any change whatsoever.
A-6
Quint&Thirnrnig LLP 10/23/98
2/2/99
ESCROW DEPOSIT AND TRUST AGREEMENT
by and among the
CONTRA COSTA COUNTY REDEVELOPMENT AGENCY
the
COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY
and
U.S.BAND TRUST NATIONAL ASSOCIATION
as Escrow Bank
Dated as of March 1,1999
Relating to defeasance of a portion of the outstanding
County of Contra Costa Public Financing Authority
1992 Tax Allocation Revenue Bonds,Series A
(Pleasant Hill,North Richmond,West Pittsburg and
Oakley Redevelopment Project Areas)
and
refinancing of(i)a portion of the outstanding Loans under the
Pleasant Hill Loan Agreement and the West Pittsburg
Loan Agreement,each dated as of May 1,1992,each
between the Agency and the Authority,and(ii)all of the
outstanding Loans under the North Richmond Loan Agreement
and the Oakley Loan Agreement,each dated as of May 1,1992,
each between the Agency and the Authority
03012.01:J4081
ESCROW DEPOSIT AND TRUST AGREEMENT
This ESCROW DEPOSIT AND TRUST AGREEMENT is made and entered into as of
the 1st day of March, 1999, by and among the CONTRA COSTA COUNTY
REDEVELOPMENT AGENCY, a public body corporate and politic, organized and existing
under the laws of the State of California (the "Agency„), the COUNTY OF CONTRA COSTA
PUBLIC FINANCING AUTHORITY, a joint exercise of powers authority, organized and
existing under the laws of the State of California (the "Authority"), and U.S. BANK TRUST
NATIONAL ASSOCIATION, a national banking association organized and existing under the
laws of the United States of America, with a corporate trust office in San Francisco, California,
as successor trustee with respect to the hereinafter described 1992 Bonds (the "1992 Trustee")
and as escrow bank hereunder (the "Escrow Bank").
WITNESSETH .
WHEREAS, the Authority has heretofore issued its $29,315,000 initial principal amount
of County of Contra Costa Public Financing Authority 1992 Tax Allocation Revenue Bonds,
Series A (Pleasant Hill, North Richmond, West Pittsburg and Oakley Redevelopment Project
Areas) (the "1992 Bonds");
WHEREAS, the 1992 Bonds were issued for the purpose of making four loans to the
Agency (collectively, the "1992 Loans") under four loan agreements, each dated as of May 1,
1992 (collectively, the "1992 Loan Agreements") each by and between the Agency and the
Authority, to finance and refinance, as applicable, redevelopment activities within or of benefit
to the Agency's Pleasant Hill, North Richmond, West Pittsburg and Oakley Redevelopment
Project Areas;
WHEREAS, the 1992 Bonds were issued pursuant to an indenture of trust, dated as of
May 1, 1992 (the "1992 Indenture"),by and between the Authority and the 1992 Trustee;
WHEREAS, the 1992 Indenture provides that if the Authority shall pay and discharge
the entire indebtedness on all or any portion of the 1992 Bonds by irrevocably depositing with
the 1992 Trustee, in trust, Federal Securities (as defined in the 1992 Indenture) in such amount
as an Independent Accountant (as defined in the 1992 Indenture) shall determine will, together
with the interest to accrue thereon and available moneys then on deposit in the funds and
accounts established with the Trustee pursuant to the 1992 Indenture and the 1992 Loan
Agreements, be fully sufficient to pay and discharge the indebtedness on such 1992 Bonds
(including all principal, interest and redemption premiums) at or before their respective
maturity dates, and if the 1992 Bonds are to be redeemed prior to the maturity thereof notice of
such redemption is mailed pursuant to the 1992 Indenture or provision satisfactory to the 1992
Trustee shall have been made for the mailing of such notice, then, at the request of the
Authority, and notwithstanding that any of such 1992 Bonds shall not have been surrendered
for payment, the pledge of the Revenues (as defined in the 1992 Indenture) and other funds
provided for in the 1992 Indenture with respect to such 1992 Bonds, and all other pecuniary
obligations of the Authority under the 1992 Indenture with respect to such 1992 Bonds, shall
cease and terminate, except only the obligation of the Authority to pay or cause to be paid to
the owners of the 1992 Bonds not so surrendered and paid all sums due thereon and all
expenses and costs of the 1992 Trustee;
WHEREAS, the 1992 Loan Agreements contain provisions with respect to the discharge
of the Agency's obligations thereunder that are similar to the above-mentioned provisions of the
1992 Indenture;
Z
WHEREAS, the Agency has determined to provide for the refunding of a portion of the
1992 Bonds as identified in Exhibit B hereto (the "Refunded Bonds") and the refinancing of a
portion of its obligations under the 1992 Loan Agreements related to the Refunded Bonds (the
"Refunded 1992 Loans");
WHEREAS, for the purpose of providing funds for the refunding of the Refunded Bonds
and the refinancing of the Refunded 1992 Loans, the Authority has determined to issue its
$ ___ County of Contra Costa Public Financing Authority 1999 Tax Allocation Revenue
Bonds (Pleasant Hill BART, North Richmond, Bay Point, Rodeo and Oakley Redevelopment
Protect Areas) (the "1999 Bonds"), pursuant to and secured by an indenture of trust, dated as
of March 1, 1999 (the "1999 Indenture"), by and between the Authority and U.S. Bank Trust
National Association, as trustee (the "1999 Trustee") and to loan the proceeds thereof to the
Agency by making five separate loans to the Agency (collectively, the "1999 Loans");
WHEREAS, the Agency wishes to make a deposit from a portion of the proceeds of the
1999 Loans, as contemplated by the defeasance provisions of the 1992 Indenture and the 1992
Loan Agreements, with the Escrow Bank and to enter into this Escrow Deposit and Trust
Agreement for the purpose of providing the terms and conditions for the deposit and
application of amounts so deposited; and
WHEREAS, the Escrow Bank has full powers to act with respect to the irrevocable
escrow and trust created herein and to perform the duties and obligations to be undertaken
pursuant to this Escrow Deposit and Trust Agreement.
NOW,THEREFORE,in consideration of the above premises and of the mutual promises
and covenants herein contained and for other valuable consideration, the parties hereto do
hereby agree as follows:
Section 1. Definition_of Federal Securities. As used herein, the term "Federal Securities"
shall have the meaning ascribed thereto in the 1992 Indenture, and shall include Permitted
Investments (as defined in the 1992 Indenture) described in clause (b) of the definition thereof
(other than clause (b) (iv)); provided that any bond securities shall be non-callable.
Section 2. Appointment of Escrow Bank. The Agency and the Authority hereby appoint
the Escrow Bank as escrow bank for all purposes of this Escrow Deposit and Trust Agreement
and in accordance with the terms and provisions of this Escrow Deposit and Trust Agreement,
and the Escrow Bank hereby accepts such appointment.
Section 3. Establishment of Escrow Fund. There is hereby created by the Agency and the
Authority with, and to be held by, the Escrow Bank, as security for the payment of the
principal of and interest on the Refunded Bonds and the Refunded 1992 Loans as hereinafter
set forth, an irrevocable escrow to be maintained in trust by the Escrow Bank on behalf of the
Agency and the Authority and for the benefit of the owners of the Refunded Bonds, said escrow
to be designated the "Escrow Fuad." All moneys and Federal Securities deposited in the
Escrow Fund shall constitute a special fund for the payment of the principal of and interest on
the Refunded Bonds and the Refunded 1992 Loans in accordance with the provisions of the
1992 Indenture and the 1992 Loan Agreements, respectively. If at any time the Escrow Bank
shall receive actual knowledge that the moneys and Federal Securities in the Escrow Fund will
not be sufficient to make any payment required by Section 5 hereof, the Escrow Bank shall
notify the Agency of such fact and the Agency shall immediately cure such deficiency.
Section 4. Deposit into Escrow Fund; Investment of Amount. Concurrently with
delivery of the 1998 Bonds, the Agency shall cause to be transferred to the Escrow Bank for
2
deposit into the Escrow Fund the amount of$ in immediately available funds, derived
as follows:
(a) from the proceeds of sale of the 1999 Bonds loaned to the Agency in the
amount of (such amount being the aggregate of the amounts transferred to
the Escrow Bank pursuant to Section 7.03(d) of the Pleasant fill Loan Agreement,
Sections 8.03(e) of the West Pittsburg Loan Agreement and the North Richmond Loan
Agreement, and Section 2.02(e) of the Oakley Loan Agreement, as such terms are
defined in the 1999 Indenture);
(b) from the revenue fund established pursuant to the 1992 Indenture (the "1992
Revenue Fund") in the amount of$ ; and
(c) from the reserve funds established pursuant to the 1992 Loan Agreements
(the "1992 Reserve Funds") in the amount of $
Of the amounts deposited in the Escrow Fund pursuant to the preceding paragraph, the
Escrow Bank shall invest the sum of $ in the Federal Securities set forth in Exhibit A
attached hereto and by this reference incorporated herein (the "Escrowed Federal Securities")
and shall hold the remaining amount ($ ) in cash, uninvested. The Escrowed
Federal Securities shall be deposited with and held by the Escrow Bank in the Escrow Fund
solely for the uses and purposes set forth herein.
The Escrow Bank shall not be liable or responsible for any loss resulting from any
investment or reinvestment made pursuant to this Escrow Deposit and Trust Agreement and in
full compliance with the provisions hereof.
Section 5. Instructions as to Applicationof Deposit. The total amount of Escrowed
Federal Securities and uninvested moneys deposited in the Escrow Fund pursuant to Section 4
shall be applied by the Escrow Bank for the sole purpose of paying the principal of and interest
on the Refunded 1992 Loans and the Refunded Bonds as the same shall become due and
payable, to and including August 1, 2002, and to prepay the remaining amounts due on such
portion of the Refunded 1992 Loans and redeem all outstanding Refunded Bonds in full on
August 1, 2002, at the price of 102% of the principal amount thereof, plus accrued interest.
Following the final payment of the Refunded Bonds, together accrued interest to the payment
date, the Escrow Bank shall transfer any remaining amounts relating to the Refunded 1992
Loans or the Refunded Bonds to the Agency to be used for any lawful purpose of the Agency.
Section 6. Investment of Any Remaining Moneys. At the written direction of the Agency
Treasurer, the Escrow Bank shall invest and reinvest the proceeds received from any of the
Escrowed Federal Securities, and the cash originally deposited into the Escrow Fund, for a
period ending not later than the next succeeding interest payment date relating to the Refunded
Bonds, in Federal Securities; provided, however, that (a) such written directions of the Agency
Treasurer shall be accompanied by an opinion of nationally recognized bond counsel ("Bond
Counsel") that investment in accordance with such directions will not affect,for Federal income
tax purposes, the exclusion from gross income of interest due with respect to the 1992 Bonds or
the 1999 Bonds, and (b) if the Agency Treasurer directs such 'investment or reinvestment to be
made in United States Treasury Securities—State and Local Government Series, the Agency
shall, at its cost, cause to be prepared all necessary subscription forms therefor in sufficient
time to enable the Escrow Bank to acquire such securities.In the event that the Agency Treasurer
shall fail to file any such written directions with the Escrow Bank concerning the reinvestment of
any such proceeds, such proceeds shall be held uninvested by the Escrow Bank. Any interest
income resulting from investment or reinvestment of moneys pursuant to this Section 6 and not
3
required for the purposes set forth in Section 5 shall be transferred by the Escrow Bank to the
Agency to be used for any lawful purpose of the Agency.
The Escrow Bank may utilize any of its corporate affiliates as a depository to hold any
uninvested moneys on behalf of the Escrow Bank in accordance with this Escrow Deposit and
Trust Agreement.
Section 7. Substitution or Withdrawal of Federal Securities. The Agency Treasurer may,
at any time, direct the Escrow Bank in writing to substitute Federal Securities for any or all of
the Escrowed Federal Securities then deposited in the Escrow Fund, or to withdraw and
transfer to the Agency any portion of the Federal Securities then deposited in the Escrow Fund,
provided that any such direction and substitution or withdrawal shall be simultaneous and
shall be accompanied by: (a) a certification of an independent certified public accountant or
firm of certified public accountants of favorable national reputation experienced in the
refunding of obligations of political subdivisions that the Federal Securities then to be so
deposited in the Escrow Fund together with interest to be derived therefrom, or in the case of
withdrawal the Federal Securities to be remaining in the Escrow Fund following such
withdrawal together with the interest to be derived therefrom,shall be in an amount at all times
at least sufficient to make the payments specified in Section 5 hereof; and (b) an opinion of
Bond Counsel that the substitution or withdrawal will not affect, for Federal income tax
purposes, the exclusion from gross income of interest due with respect to the 1992 Bonds or the
1999 Bonds. In the event that, following any such substitution of Federal Securities pursuant to
this Section 7, there is an amount of moneys or Federal Securities in excess of an amount
sufficient to make the payments required by Section 5 hereof,such excess shall be transferred by
the Escrow Bank to the Agency to be used for any lawful purpose of the Agency.
Section 8. Application of 1992 Funds. On the date of original delivery of the 1999 Bonds
and the deposit of a portion of the proceeds thereof in the Escrow Fund pursuant to Section 4,
the Agency shall direct the 1992 Trustee to withdraw the amounts on deposit in the 1992
Revenue Fund ($ ), and the 1992 Reserve Funds ($ ), and transfer such amounts
to the Escrow Fund.
Section 9. A plication of Certain Terms of 1992 Indenture. All of the terms of the 1992
Indenture relating to the making of payments of principal of and interest on the 1992 Bonds are
incorporated in this Escrow Deposit and Trust Agreement as if set forth in full herein. The
provisions of the 1992 Indenture affording protections and limitations of liability to the 1992
Trustee and relating to the resignation and removal of the 1992 Trustee are also incorporated in
this Escrow Deposit and Trust Agreement as if set forth in full herein and shall be the procedure
to be followed with respect to any resignation or removal of the Escrow Bank hereunder.
Section 10. Compensation to Escrow Bank. The Agency shall pay the Escrow Bank full
compensation for its duties under this Escrow Deposit and Trust Agreement, including out-of-
pocket costs such as publication costs, legal fees and other costs and expenses relating hereto
and, in addition, fees, costs and expenses relating to the purchase of any Federal Securities
after the date hereof, pursuant to a separate agreement between the Agency and the Escrow
Bank. Under no circumstances shall amounts deposited in the Escrow Fund be deemed to be
available for said purposes.
Section 11. Liabilities and Obligations of Escrow Bank. The Escrow Bank shall have no
obligation to make any payment or disbursement of any type or incur any financial liability in
the performance of its duties under this Escrow Deposit and Trust Agreement unless the
Agency shall have deposited sufficient funds with the Escrow Bank. The Escrow Bank may rely
and shall be protected in acting upon the written or oral instructions of the Agency or its agents
relating to any matter or action as Escrow Bank under this Escrow Deposit and Trust
4
Agreement. The protections, immunities and limitations from liability provided to the 1992
Trustee under the 1992 Indenture shall be afforded the Escrow Bank hereunder and are
incorporated herein by reference.
The Escrow Bank and its respective successors, assigns, agents and servants shall not be
held to any personal liability whatsoever, in tort, contract, or otherwise, in connection with the
execution and delivery of this Escrow Deposit and Trust Agreement, the establishment of the
Escrow Fund, the acceptance of the moneys or any securities deposited therein, the purchase of
the securities to be purchased pursuant hereto, the retention of such securities or the proceeds
thereof,the sufficiency of the securities or any uninvested moneys held hereunder to accomplish
the defeasance of the Refunded Bonds, or any payment, transfer or other application of moneys
or securities by the Escrow Bank in accordance with the provisions of this Escrow Deposit and
Trust Agreement or by reason of any non-negligent act,non-negligent omission or non-negligent
error of the Escrow Bank made in good faith in the conduct of its duties. The recitals of fact
contained in the "whereas" clauses herein shall be taken as the statement of the Agency, and
the Escrow Bank assumes no responsibility for the correctness thereof. The Escrow Bank make
no representations as to the sufficiency of the securities to be purchased pursuant hereto and
any uninvested moneys to accomplish the payment of the Refunded Bonds pursuant to the
1992 Indenture or to the validity of this Escrow Deposit and Trust Agreement as to the Agency
and, except as otherwise provided herein, the Escrow Bank shall incur no liability in respect
thereof. The Escrow Bank shall not be liable in connection with the performance of its duties
under this Escrow Deposit and Trust Agreement except for its own negligence, willful
misconduct or default, and the duties and obligations of the Escrow Bank shall be determined
by the express provisions of this Escrow Deposit and Trust Agreement. The Escrow Bank may
consult with counsel, who may or may not be counsel to the Agency, and in reliance upon the
written opinion of such counsel shall have full and complete authorization and protection in
respect of any action taken, suffered or omitted by it in good faith in accordance therewith.
Whenever the Escrow Bank shall deem it necessary or desirable that a matter be proved or
established prior to taking, suffering, or omitting any action under this Escrow Deposit and
Trust Agreement, such matter (except the matters set forth herein as specifically requiring a
certificate of a nationally recognized firm of independent certified public accountants or an
opinion of counsel) may be deemed to be conclusively established by a written certification of
the Agency.
The Agency hereby assumes liability for, and hereby agrees (whether or not any of the
transactions contemplated hereby are consummated), to the extent permitted by law, to
indemnify, protect, save and hold harmless the Escrow Bank and its respective successors,
assigns, agents and servants from and against any and all liabilities, obligations, losses,
damages, penalties, claims, actions, suits, costs, expenses and disbursements (including legal
fees and disbursements) of whatsoever kind and nature which may be imposed on,incurred by,
or asserted against, at any time, the Escrow Bank (whether or not also indemnified against by
any other person under any other agreement or instrument)and in any way relating to or arising
out of the execution and delivery of this Escrow Deposit and Trust Agreement, the
establishment of the Escrow Fund, the retention of the moneys therein and any payment,
transfer or other application of moneys or securities by the Escrow Bank in accordance with the
provisions of this Escrow Deposit and Trust Agreement, or as may arise by reason of any act,
omission or error of the Escrow Bank made in good faith in the conduct of its duties; provided,
however, that the Agency shall not be required to indemnify the Escrow Bank against its own
negligence or willful misconduct. The indemnities contained in this Section 11 and the
compensation and reimbursement of expenses set forth in Section 10 shall survive the
termination of this Escrow Deposit and Trust Agreement.
Whenever, in the administration of this Escrow Deposit and Trust Agreement, the
Escrow Bank shall deem it necessary or desirable that a matter be proved or established prior
5
to taking or suffering any action hereunder,such matter(unless other evidence in respect thereof
be herein specifically prescribed) may, in the absence of negligence or willful misconduct on the
part of the Escrow Bank, be deemed to be conclusively proved and established by a certificate
of an authorized representative of the Agency, and such certificate shall, in the absence of
negligence or willful misconduct on the part of the Escrow Bank, be full warrant to the Escrow
Bank for any action taken or suffered in good faith by it under the provisions of this Escrow
Deposit and Trust Agreement.
The Escrow Bank may consult with counsel of its own choice (which may be counsel to
the Agency) and the opinion of such counsel shall be full and complete authorization to take or
suffer in good faith any action in accordance with such opinion of counsel.
The Escrow Bank shall not be responsible for any of the recitals or representations of the
Agency or the Authority contained herein.
Section 12. Amendment. This Escrow Deposit and Trust Agreement may be modified or
amended at any time by a supplemental agreement which shall become effective when the
written consents of the owners of one hundred percent (100%) in aggregate principal amount of
the Refunded Bonds then outstanding shall have been filed with the Escrow Bank. This Escrow
Deposit and Trust Agreement may be modified or amended at any time by a supplemental
agreement, without the consent of any such owners, but only (1) to add to the covenants and
agreements of any party, other covenants to be observed, or to surrender any right or power
herein or therein reserved to the Agency or the Authority, (2) to cure,correct or supplement any
ambiguous or defective provision contained herein, (3) in regard to questions arising hereunder
or thereunder, as the parties hereto or thereto may deem necessary or desirable and which, in
the opinion of counsel, shall not materially adversely affect the interests of the owners of the
1992 Bonds or the 1998 Bonds, and that such amendment will not cause interest on the 1992
Bonds or the 1998 Bonds to become subject to federal income taxation.
Section 13. Severability. If any section, paragraph, sentence, clause or provision of this
Escrow Deposit and Trust Agreement shall for any reason be held to be invalid or
unenforceable, the invalidity or unenforceability of such section, paragraph, sentence, clause or .
provision shall not affect any of the remaining provisions of this Escrow Deposit and Trust
Agreement.
Section 14. Notice of Escrow Bank, Agency: Authority. Any notice to or demand upon
the Escrow Bank may be served and presented, and such demand may be made, at the
principal corporate trust office of the Escrow Bank at One California Street, Suite 400, San
Francisco, CA 94111, Attention: Corporate Trust Department (or such other address as may
have been filed in writing by the Escrow Bank with the Agency and the Authority). Any notice
to or demand upon the Agency shall be deemed to have been sufficiently given or served for all
purposes by being mailed by registered or certified mail, and deposited, postage prepaid, in a
post office letter box, addressed to such party, at 651 Pine Street, North Lying, 4th Floor,
Martinez, CA 94553-1295, Attention: Deputy Director-Redevelopment (or such other address
as may have been filed in writing by the Authority with the Escrow Bank). Any notice to or
demand upon the Authority shall be deemed to have been sufficiently given or served for all
purposes by being mailed by registered or certified mail, and deposited, postage prepaid, in a
post office letter box, addressed to such party, at 651 Pine Street, North Vying, 4th Floor,
Martinez, CA 94553-1295, Attention: Deputy Director Redevelopment or such other address
as may have been filed in writing by the Agency with the Escrow Bank).
Section 15. Merger or Consolidation of Escrow Bank. Any company into which the
Escrow Bank may be merged or converted or with which may it be consolidated or any
company resulting from any merger,conversion or consolidation to which it shall be a party or
6
any company to which the Escrow Bank may sell or transfer all or substantially all of its
corporate trust business, provided such company shall be eligible to act as trustee under the
1992 Indenture, shall be the successor hereunder to the Escrow Bank without the execution} or
filing of any paper or any further act.
Section 16. Execution of Counterparts. This Escrow Deposit and Trust Agreement may
be executed in any number of counterparts,each of which shall for all purposes be deemed to be
an original and all of which shall together constitute but one and the same instrument.
Section 17. Governing Law. This Escrow Deposit and Trust Agreement shall be
construed and governed in accordance with the laws of the State of California.
7
IN WITNESS WHEREOF, the CONTRA COSTA COUNTY REDEVELOPMENT
AGENCY has caused this Escrow Deposit and Trust Agreement to be signed in its name by its
Deputy Director—Redevelopment, the COUNTY OF CONTRA COSTA PUBLIC FINANCING
AUTHORITY has caused this Escrow Deposit and Trust Agreement to be signed in its name by
its Deputy Executive Director, and U.S. BANK TRUST NATIONAL ASSOCIATION, in toren
of its acceptance of the trust created hereunder, has caused this Escrow Deposit and Trust
Agreement to be signed in its corporate name by its officer identified below, all as of the day
and year first above written.
CONTRA COSTA COUNTY
REDEVELOPMENT AGENCY
By
Deputy Director--Redevelopment
COUN'T'Y OF CONTRA COSTA PUBLIC
FINANCING AUTHORITY
By
Deputy Executive Director
U.S. BANK TRUST NATIONAL
ASSOCIATION, as Escrow Bank
By
Authorized Officer
03012.01:1'4e8=
8
Quhit&`:himsnig LLP 10/23/98
2/2/99
FIRST SUPPLEMENT TO PLEASANT HILL LOAN AGREEMENT
by and between the
CONTRA COSTA COUNTY REDEVELOPMENT AGENCY
and the
COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY
Dated as of March 1,1999
Relating to:
S
County of Contra Costa Public Financing Authority
1999 Tax Allocation Revenue Bonds
(Pleasant Hill BART,North Richmond,Bay Point,Rodeo
and Oakley Redevelopment Project Areas)
03012.01:J4082
TABLE OF CONTENTS
SECTION 1. Supplement to1992Loan Agreement--------------.--------.2
SECTION, 2. Amendment mf1g92Loan Agreement............................... ........... ............ ..........B
SECTION 3. Partial Invalidity ................. ............................................................ — ....... ....1O
SECTION 4. Execution ofCounterparts...............--- ......................... ...... .........................lO
SECTION5. Governing Law..... — ................................................... ........................... ........1D
i
FIRST SUPPLEMENT TO PLEASANT HILL LOAN AGREEMENT
THIS FIRST SUPPLEMENT TO PLEASANT HILL LOAN AGREEMENT (this "First
Supplement") is made and entered into as of March 1, 1999, by and between the CONTRA
COSTA COUNTY REDEVELOPMENT AGENCY, a public body, corporate and politic, duly
organized and existing under the laws of the State of California (the "Agency") and the
COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY, a joint powers authority
organized and existing under the laws of the State of California (the "Authority").
WITNESSETH.
WHEREAS, the Agency is a public body, corporate and politic, duly established and
authorized to transact business and exercise powers under and pursuant to the provisions of
Part 1 of Division 24 of the Health and Safety Code of the State of California (the
"Redevelopment Law"), and has the power under Section 33601 of the Redevelopment Law to
borrow money for any of its corporate purposes; and
WHEREAS, a redevelopment plan for Pleasant Hill BART Redevelopment Project Area
(herein called "Redevelopment Project"), in the County of Contra Costa, has been adopted in
compliance with all requirements of the Redevelopment Law; and
WHEREAS, the Authority has previously loaned to the Agency $22,673,935.50 (the
"Loan") pursuant to the terms of a Pleasant Hill Loan Agreement, dated as of May 1, 1992 (the
"1992 Loan Agreement"),by and between the Authority and the Agency; and
WHEREAS, the Agency has requested the Authority to make an additional loan (the
"1999 Loan") to the Agency pursuant to the terms of the 1992 Loan Agreement, as
supplemented by this First Supplement (collectively referred to herein as the "Loan
Agreement"), for the purpose of providing funds to refinance a portion of the Loan and to
assist in the financing of redevelopment activities within and of benefit to the Redevelopment
Project, all as provided herein, and the Agency hereby finds and determines that there will be
significant public benefits accruing from such borrowing,consisting of demonstrable savings in
effective interest rates and financing costs associated with the issuance of bonds as described
herein;and
WHEREAS, the 1999 Loan will be secured by the Agency by a pledge of certain tax
increment revenues on a parity with the Loan, the 1999 Loan will constitute "Parity Debt„
under and as defined in the 1992 Loan Agreement, and this First Supplement is being entered
into by the Agency and the Authority pursuant to and in accordance with the provisions of
Sections 2.08 and 6.04 of the 1992 Loan Agreement; and
WHEREAS, concurrent with the execution and delivery of this First Supplement the
Authority has issued its $ aggregate principal amount of County of Contra Costa
Public Financing Authority 1999 Tax Allocation Revenue Bonds (Pleasant Hill BART, North
Richmond, Bay Point, Rodeo and Oakley Redevelopment Project Areas) for the purpose of,
inter alia, making the 1999 Loan under the Loan Agreement; and
WHEREAS, in order to establish and declare the terms and conditions upon which the
1999 Loan is to be made and secured, the Agency and the Authority wish to enter into this First
Supplement; and
WHEREAS, all acts and proceedings required by law necessary to make this First
Supplement, when executed by the Agency and the Authority, the valid, binding and legal
obligations of the Agency and the Authority, and to constitute this First Supplement a valid
and binding agreement and supplement to the 1992 Loan Agreement for the uses and purposes
herein set forth in accordance with its terms, have been done and taken, and the execution and
delivery of this First Supplement have been in all respects duly authorized.
NOW,THEREFORE, in consideration of the premises and the mutual agreements herein
contained, the parties hereto do hereby agree as follows:
SECTION 1. Supplement to 1992 Loan Agreement. In accordance with the provisions
of Sections 2.08 and 6.04 of the 1992 Loan Agreement including Section 5.09 of the Indenture,
as defined therein), the 1992 Loan Agreement is hereby amended by adding a supplement
thereto consisting of a new article to be designated as Article VII. Such Article VII shall read in
its entirety as follows:
ARTICLE VII
1999 LOAN
Section 7.01. Definitions. Unless the context clearly requires otherwise, capitalized
terms used in this Article VII shall, for all purposes of this Article VII but not for any other
purpose of this Loan Agreement,have the respective meanings given in Section 1.01 of the 1999
Indenture, or as provided in this Section 7.01. Any capitalized terms used in this Article VII
that are not otherwise defined in Section 1.01 of the 1999 Indenture or in this Section 7.01 shall
have the respective meanings given in Section 1.01 of this Loan Agreement.
"Continuinnz Disclosure Certificate" means the Continuing Disclosure Certificate
of the Agency, dated March__, 1999, relating to the 1999 Bonds.
"LQan Disbursement Fund" means the fund by that name established held by the
Trustee pursuant to Section 7.03 hereof.
"1999 Redevelopment Fund" means the fund established and held by the Agency
pursuant to Section 7.06 hereof.
"Participating;Underwriter" has the meaning given such term in the Continuing
Disclosure Certificate.
"Reserve Requirement" means, as of any date of calculation, an amount equal to
Maximum Annual Debt Service taking into account only amounts due on the 1999 Loan
(and not amounts due on any other Parity Debt or on the Loan).
Section 7.02. Authorization of 1999 Loan. The Authority hereby agrees to lend to the
Agency, from the proceeds of sale of the 1999 Bonds, the aggregate principal amount of
Million Thousand Dollars ($ ) under and subject to the terms of
this Loan Agreement, the Bond Law and the Redevelopment Law. This Loan Agreement
constitutes a continuing agreement with the Authority to secure the full and final payment of the
1999 Loan, subject to the covenants, agreements,provisions and conditions herein contained.
2
Section 7.03. Disbursement and Application of 1999 Loan Proceeds. On the Nosing
Date, the Authority shall cause to be deposited into the Loan Disbursement Fund, which fund
is hereby created, the amount of$ . which shall be held by the Trustee and which shall
be immediately disbursed by the Trustee as follows:
(a) The Trustee shall deposit the amount of $ in the Costs of
Issuance Fund established under the 1999 Indenture.
(b) The Trustee shall transfer the amount of $ to, or upon the
order of, the Agency for deposit in the 1999 Redevelopment Fund established
under Section 7.06.
(c) The Trustee shall deposit the amount of $ in the 1999
Reserve Fund established under Section 7.07, which amount is equal to the
Reserve Requirement as of the Closing Date.
(d) The Trustee shall transfer the amount of $ to U.S. Bank
Trust National Association, as escrow bank (the "Escrow Bank"), to be used to
prepay $ of the principal amount of the 1992 Loan, and otherwise by
the Escrow Bank as provided in Section 4 of the Escrow Deposit and Trust
Agreement, dated as of March 1, 1999, among the Agency,the Authority and the
Escrow Bank.
In addition to the foregoing, the Trustee shall be deemed to have distributed to the
Agency on the Closing Date a portion of the discount on the Bonds in the amount of
$--------
Section 7.04. Repayment of 1999 Loan. The Agency shall repay the 1999 Loan in
installments on each of the dates in each of the years and in the amounts as set forth below:
Payment
Date Principal Interest Total
[to come]
Interest on each installment of principal of the 1999 Loan has been calculated at the
annual interest rate payable by the Authority on the 1999 Bonds on the basis of a 360-day year
of twelve 30-day months, and shall accrue on the unpaid principal of the 1999 Loan from the
Closing Date, but not including the Interest Payment Date with respect to which such
3
installment of principal is payable. Interest on the 1999 Loan shall be payable on each Interest
Payment Late shown above. Any installment of principal or interest which is not paid when
due shall continue to accrue interest from and including the Interest Payment Date with respect
to which such principal or interest is payable to but not including the date of actual payment.
Payments on the 1999 Loan shall be payable by the Agency to the Trustee, as assignee
of the Authority under the Indenture, in immediately available funds which constitute lawful
money of the United States of America. Notwithstanding the foregoing provisions of this
Section 7.04, in lieu of payment of any installment of principal of the Loan coming due and
payable on August 1 in any year in which Bonds are subject to mandatory sinking fund
redemption under the Indenture,the Agency shall have the right to purchase any of such Bonds
in an amount not exceeding the amount thereof which is subject to mandatory sinking fund
redemption on such August 1, and tender such Bonds to the Trustee for cancellation, provided
that such tender shall be made before the preceding June 15.
In the event principal of the 1999 Loan shall be prepaid in part pursuant to Section 7.05
hereof, the foregoing schedule of principal and interest payments shall be reduced as provided
in Section 5.09(4) of the Indenture; and the Agency shall promptly prepare and deliver such
revised schedule to the Trustee.
Section 7.05. Optional Prepayment of the Loan. With the prior consent of the
Authority (to be given pursuant to Section.5.09(4) of the 1999 Indenture), the Agency shall have
the right to prepay the unpaid principal installments of the Loan, in whole or in part in any
integral multiple of $5,000, on any date on which the 1999 Bonds are subject to optional
redemption pursuant to Section 2.02(a) of the 1999 Indenture,by depositing with the Trustee in
the Revenue Fund established under the 1999 Indenture an amount sufficient to redeem 1999
Bonds pursuant to Section 2.02(a) of the 1999 Indenture in the amount determined pursuant to
Section 5.09(4) of the 1999 Indenture, together with the amount of accrued interest and
premium (if any) required to be paid upon such redemption. The Authority agrees that upon
payment by the Agency to the Trustee of such amount, the Authority shall take or cause to be
taken any and all steps required under the 1999 Indenture to redeem such Outstanding 1999
Bonds on the redemption date designated pursuant to a Written Request of the Agency filed
with the Authority and the Trustee; provided, however, that such date shall be a date of
redemption of 1999 Bonds for which notice has been timely given pursuant to the 1999
Indenture.
Notwithstanding the foregoing, the Agency shall be required to give the Trustee written
notice of its intention to prepay the 1999 Loan under this Section and of the amounts and the
maturity or maturities of the 1999 Bonds to be redeemed and the manner of payment, at least
forty five (45) days prior to the date fixed for such prepayment, unless such requirement shall
be waived or modified by the Trustee, and to remit the amount of such prepayment to the
Trustee on the date scheduled for redemption of the 1999 Bonds. In the event that a portion of
the principal of the 1999 Loan shall have been prepaid by the Agency pursuant to this Section,
the amount of each future installment of principal and interest on the 1999 Loan set forth in
Section 7.04 shall be reduced as provided in Section 7.04,
Section 7.06. 1999 Redevelopment Fund. There is hereby established a separate fund to
be known as the "Pleasant Hill Redevelopment Project 1999 Redevelopment Fund",which shall
be held and maintained by the Agency. The moneys in the 1999 Redevelopment Fund shall be
used solely in the manner provided by the Redevelopment Law and the Redevelopment Plan to
provide financing for the Redevelopment Project.
4
Section 7.07. 1999 Reserve Fund.
(a) Establishment of 1999 Reserve Fund. There is hereby established a separate fund to
be known as the "Pleasant Hill Redevelopment Project 1999 Reserve Fund,"which shall be held
by the Trustee in trust for the benefit of the Authority and the Owners of the 1999 Bonds.
Amounts initially deposited in the 1999 Reserve Fund shall be derived from the proceeds of the
1999 Loan deposited therein pursuant to Section 7.03(c). The amount on deposit in the 1999
Reserve Fund shall be maintained at the Reserve Requirement (as defined in Section 7.01) at all
times prior to the payment of the 1999 Loan in full pursuant to Section 7.04, except to the
extent required for the purposes set forth in this Section 7.07.
(b) Transfers to Principal Account and Interest Account. In the event that the Agency
shall fail to deposit with the Trustee the full amount required to be deposited pursuant to
Section 3.03(a), the Trustee shall withdraw from the 1999 Reserve Fund and transfer to the
Interest Account and the Principal Account established under the 1999 Indenture,in such order,
the difference between the amount required to be deposited pursuant to Section 3.03(a) with
respect to the 1999 Loan and the amount actually deposited by the Agency in respect of
transfers to such Interest Account and Principal Account. In the event that the amount on
deposit in the 1999 Reserve Fund shall at any time be less than the Reserve Requirement (as
defined in Section 7.01),the Trustee shall promptly notify the Agency of the amount required to
be deposited therein to restore the balance to such Reserve Requirement, such notice to be given
by telephone,telecopy or other form of telecommunication,promptly confirmed in writing.
(c) Transfers o€-Excess Over Reserve Requirement. In the event that the amount on
deposit in the 1999 Reserve Fund on any Interest Payment Date exceeds the Reserve
Requirement (as defined in Section 7.01), the Trustee shall withdraw from the 1999 Reserve
Fund and deposit to the Revenue Fund established under the 1999 Indenture all amounts in
excess of the Reserve Requirement, and credit such amounts towards the deposit then required
to be made by the Agency pursuant to Section 3.03(a) in respect of amounts to be transferred to
the Interest Account and Principal Account established under the 1999 Indenture.
(d) Alternative Funding of Reserve Requirement. The Agency may fund all or a portion
of the Reserve Requirement (as defined in Section 7.01) with one or more Qualified Reserve
Fund Credit Instruments. Upon deposit of any Qualified Reserve Fund Credit Instrument with
the Trustee, the Trustee shall pay to the Agency from amounts in the 1999 Reserve Fund an
amount equal to the principal of the Qualified Reserve Fund Credit Instrument.
In any case where the 1999 Reserve Fund is funded with a combination of cash and a
Qualified Reserve Fund Credit Instrument, the Trustee shall deplete all cash balances before
drawing on the Qualified Reserve Fund Credit Instrument. With regard to replenishment, any
available moneys provided by the Agency shall be used first to reinstate the Qualified Reserve
Fund Credit Instrument and second,to replenish the cash in the 1999 Reserve Fund. In the event
the Qualified Reserve Fund Credit Instrument is drawn upon, the Agency shall make payment
of interest on amounts advanced under the Qualified Reserve Fund Credit Instrument after
making any payments pursuant to subsection (a) of Section 3.03.
In the event the Qualified Reserve Fund Credit Instrument will lapse or expire, the
Agency shall draw upon such Qualified Reserve Fund Credit Instrument prior to its lapsing or
expiring, make deposits from available Tax Revenues to the 1999 Reserve Fund to increase the
amount on deposit therein to the Reserve Requirement(as defined in Section 7.01) or substitute
such Qualified Reserve Fund Credit Instrument with a Qualified Reserve Fund Credit Instrument
that satisfies the requirements of this subsection (d).
5
Section 7.08. Investment of Moneys; Valuation of Investments. Moneys in the funds
and accounts held by the Trustee under this Article VII shall be invested by the Trustee in
Permitted Investments specified in the Written Request of the Agency filed with the Trustee at
least two (2) Business Days in advance of the making of such investments. In the absence of
any such direction,the Trustee shall invest any such moneys in Permitted Investments described
in clause(d) of the definition thereof which by their terms mature on or before the date on which
such moneys are required to be paid out hereunder.
Obligations purchased as an investment of moneys in any fund shall be deemed to be
part of such fund or account. Whenever in this Loan Agreement any moneys are required to be
transferred by the Agency to the Trustee, such transfer may be accomplished by transferring a
like amount of Permitted Investments which by their terms mature prior to the date on which
such moneys are required to be paid out hereunder. All interest or gain derived from the
investment of amounts in any of the funds or accounts established hereunder (other than with
respect to funds held by the Agency) shall be retained in the respective funds and accounts to
be used for the purposes thereof; provided, however, that all interest or, gain from the
investment of amounts in the 1999 Reserve Fund shall be deposited by the Trustee in the
Interest Account created under the 1999 Indenture, but only to the extent that the amount
remaining in the 1999 Reserve Fund following such deposit is equal to the Reserve Requirement
(as defined in Section 7.031).
For purposes of acquiring any investments hereunder,the Trustee may commingle funds
held by it hereunder. The Trustee may act as principal or agent in the acquisition or dispositions
of any investment. The Trustee shall incur no liability for losses arising from any investments
made pursuant to this Section 7.08.
Except as otherwise provided in the next sentence, all investments of amounts
deposited in any fund or account created by or pursuant to this Article, or otherwise containing
gross proceeds of the 1999 Loan (within the meaning of section 148 of the Tax Code) shall be
acquired, disposed of, and valued (as of the date that valuation is required by the Indenture or
the Code) at Fair Market Value. Investments in funds or accounts (or portions thereof) that are
subject to a yield restriction under applicable provisions of the Tax Code shall be valued at
their present value (within the meaning of section 148 of the Tax Code).
Section 7.09. Tax Covenants.
(a) en rail . The Agency shall not take any action or permit to be taken
any action within its control which would cause or which,with the passage of time if not
cured would cause, interest on the 1999 Bonds to become includable in gross 'income for
federal income tax purposes.
(b) Private Activity_ Bond Limitation. The Agency shall assure that the
proceeds of the 1999 Loan are not used in a manner which would cause the 1999 Bonds
to become "private activity bonds" within the meaning of Section 141(a) of the Tax
Code or to meet the private loan financing test of Section 141(c) of the Tax Code.
(c) Federal Guarantee Prohibition. The Agency shall not take any action or
permit or suffer any action to be taken if the result of the same would be to cause the
1999 Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the
Tax Code.
(d) �To Arbitrage. The Agency shall not take, or permit or suffer to be taken
by the Trustee or otherwise, any action with respect to the 1999 Loan proceeds which, if
such action had been reasonably expected to have been taken, or had been deliberately
6
and intentionally taken, on the Closing Date, would have caused the 1999 Bonds to be
"arbitrage bonds" within the meaning of Section 148 of the Tax Code.
(e) Debate Retluirement. The Agency shall take any and all actions necessary
to assure compliance with Section 148(f) of the Tax Code, relating to the rebate *of
excess investment earnings relating to the 1999 Bonds, if any, to the federal government,
so to ensure that interest on the 1999 Bonds does not become includable in gross income
for federal income tax purposes. Without limiting the generality of the foregoing
sentence, the Agency shall provide complete and accurate records relating to the
investment of the proceeds of the 1999 Loan to the Authority, and shall pay or cause to
be paid, in accordance with Section 5.08 of the 1999 Indenture, all excess investment
earnings which are attributable to the proceeds of the 1999 Loan.
(f) Additional Restrictions. In addition to complying with the foregoing
provisions of this Section, the Agency shall not take any action or permit or suffer any
action to be taken if the result of the same would be to cause interest on the 1999 Bonds
to be includable in gross income of the owners thereof for federal income tax purposes.
Section 7.10. Continuing Disclosure. The Agency hereby covenants and agrees that it
will comply with and carry out all of the obligations on its part contained in the Continuing
Disclosure Certificate. Notwithstanding any other provision of this Agreement, failure of the
Agency (or any other party thereto) to comply with the Continuing Disclosure Certificate shall
not be considered a default hereunder;however,any Participating Underwriter or any holder or
beneficial owner of the 1999 Bonds may take such actions as may be necessary and
appropriate, including seeking mandate or specific performance by court order, to cause the
Agency (or any other party thereto) to comply with its obligations under the Continuing
Disclosure Certificate.
Section 7.11. Payment of Authority Expenses. The Agency hereby agrees to pay any
and all expenses of the Authority incurred in connection with the administration of the Bonds
and the 1999 Bonds,including but not limited to trustee fees and expenses.
Section 7.12. Benefits Limited to Parties. Nothing in this Article VII, expressed or
implied,is intended to give to any person other than the Agency,the Authority, the Trustee and
the Owners of the 1999 Bonds any right, remedy, claim under or by reason of this Article VIL
Any covenants, stipulations, promises or agreements in this Article VII contained by and on
behalf of the Agency shall be for the sole and exclusive benefit of the Authority, the Trustee and
the Owners of the 1999 Bonds.
Section 7.13. Further Assurances. The Agency will adopt, make, execute and deliver
any and all such further resolutions, instruments and assurances as may be reasonably
necessary or proper to carry out the intention or to facilitate the performance of this Loan
Agreement, and for the better assuring and confirming unto the Owners of the 1999 Bonds the
rights and benefits provided in this Loan Agreement.
Section 7.14. Effect of this Article VIZ Except as in this Article VII expressly provided
or except to the extent inconsistent with any provision of this Article VII, the 1999 Loan shall be
deemed to be Parity Debt under and within the meaning of Section 1.01, and every term and
condition contained in the foregoing provisions of this Loan Agreement shall apply to the 1999
Loan with full force and effect, with such omissions, variations and modifications thereof as
may be appropriate to make the same conform to this Article VII. Notwithstanding the
foregoing, however, the 1999 Loan shall not be deemed to be Parity Debt under and within the
meaning of Section 1.01 for purposes of the following provisions of this Loan Agreement: (a) the
provisions of Article II shall not apply to the 1999 Loan (except that the 1999 Loan shall be
7
treated as Parity Debt for purposes of Sections 2.08 and 2.09); and (b)� the provisions of
Sections 4.11 and 4.12, inclusive, shall not apply to the 1999 Loan.
SECTION 2. Amendment of 1992 Loan Agreement. The 1992 Loan Agreement is
hereby further amended as set forth in this Section 2:
(A) Section 1.01 of the 1992 Loan Agreement is hereby amended by adding
thereto the following new defined terms and, in the case of the following defined terms
which are currently contained in Section 1.01, by amending such terms to read in their
entirety as follows:
"1999 Bonds" means the Authority's 1999 Tax Allocation Revenue
Bonds (Pleasant Hill BART, North Richmond, Bay Point, Rodeo and Oakley
Redevelopment Project Areas),issued and outstanding under the 1999 Indenture.
"1999 Indenture" means the Indenture of Trust dated as of December 1,
1999, by and between the Authority and U.S. Bank Trust National Association,
as trustee, as originally executed or as it may from time to time be supplemented,
modified or amended.
"1999_Loan" means the loan made by the Authority to the Agency in the
aggregate principal amount of$ pursuant to Section 7.02.
"1999 Reserve Fund" means the fund by that name established and held
by the Trustee under Section 7.07.
"First Supplement" means the First Supplement to Pleasant Hill Loam
Agreement, dated as of March 1, 1999, by and between the Agency and the
Authority.
"Loan Agreement" means this Loan Agreement by and between the
Agency and the Authority, as amended and supplemented by the First
Supplement, and as it may from time to time be further amended, modified or
supplemented.
"Parity Debt" means (a) the 1999 Loan, (b) any other loans, bonds,
notes, advances or indebtedness payable from Tax Revenues on a parity with the
Loan and the 1999 Loan to finance the Redevelopment Project, issued or
incurred pursuant to and in accordance with the first paragraph of Section 2.08,
or(c) any Refunding Debt issued or incurred in accordance with the provisions of
the second paragraph of Section 2.08.
"Parity Debt Instrument" means the First Supplement, and any other
resolution,indenture of trust,trust agreement or other instrument authorizing the
issuance of any Parity Debt.
"Reserve Reguirement" means, as of any date of calculation, an amount
equal to Maximum Annual Debt Service taking into account only amounts due on
the Loan (and not amounts due on any Parity Debt).
"Trustee" means U.S. Bank Trust National Association, as successor
trustee under the Indenture and as trustee under the 1933 Indenture.
8
(B) Clauses (a) and (b) of Section 3.033 of the 1992 Loan Agreement are
hereby amended to read in their entirety as follows:
(a) Interest and Princi ap l Deposits. No later than the fifteenth (15th)
calendar day of the month preceding each date on which the principal of or
interest on the Loan, the 1999 Loan or any other Parity Debt shall become due
and payable, including but not limited to the principal amount of the Loan or the
1999 Loan to be prepaid hereunder together with any prepayment premium
thereon, the Agency shall withdraw from the Special Fund and transfer to the
Trustee an amount which, together with the amounts then held on deposit in the
Interest Accounts, the Principal Accounts and the Revenue Funds established
under the Indenture and the 1999 Indenture, is equal to the aggregate amount of
such principal, interest and prepayment premium. The Trustee shall deposit
amounts so remitted representing payments on the Loan under the Indenture,
and amounts so remitted representing payments on the 1999 Loan under the
1999 Indenture.
(b) Ruerve-Fund Deposits. In the event that (i) the Trustee shall notify
the Agency pursuant to Section 2.06(b) or 7.07(b) that the amount on deposit in
the Reserve Fund or the 1999 Reserve Fund is less than the applicable Reserve
Requirement, or (ii) any Qualified Reserve Fund Credit Investment shall expire
and not be replaced in accordance with Section 2.036(d) or 7.07(b), as applicable,
or (iii) the amount in any reserve account described in Section 2.09(c)(iii) shall be
less than Maximum Annual Debt Service on the related Parity Debt, the Agency
shall immediately withdraw from the Special Fund and transfer (x)in the case of
any event described in the preceding clause (i) or (ii), to the Trustee for deposit in
the Reserve Fund or the 1999 Reserve Fund, as applicable, ars amount of money
necessary to maintain the applicable Reserve Requirement in the respective
Reserve Fund or 1999 Reserve Fund, or (y) in the case of an event described in
the preceding clause (iii), to the trustee for such Parity Debt for deposit in the
reserve account established for such Parity Debt an amount of money necessary
to maintain an amount equal to Maximum Annual Debt Service on such Parity
Debt in such reserve fund. No such transfer and deposit need be made to the
Reserve Fund or 1999 Reserve Fund so long as there shall be on deposit therein a
sum at least equal to the applicable Reserve Requirement.
Notwithstanding the foregoing, no such transfer and deposit need to be
made upon the occurrence of a default or failure to pay under any Qualified
Reserve Fund Credit Instrument, or any termination thereof prior to its stated
termination date,except as a result of a default by the Agency.
(C) Clause Second of Section 5.032 of the 1992 Loan Agreement is hereby
amended to read in its entirety as follows:
Second to the payment of the whole amount of interest on and principal
of the Loan, the 1999 Loan and any Parity Debt then due and unpaid, with
interest on overdue installments of principal and interest to the extent permitted
by law at the net effective rate of interest then borne by the Outstanding Bonds
(with respect to amounts due on the Loan) or the Outstanding 1999 Bonds (with
respect to amounts due on the 1999 Loan); provided, however, that in the event
such amounts shall be insufficient to pay in full the full amount of such interest
and principal, then such amounts shall be applied in the following order of
priority:
9
(a) first,to the payment of all installments of interest on the Loan, the
1999 Loan and any Parity Debt then due and unpaid, on a pro rata basis in
the event that the available amounts are insufficient to pay all such interest in
full,
(b) second, to the payment of all installments of principal of the Loan,
the 1999 Loan and any Parity Debt then due and payable, on a pro rata
basis in the event that the available amounts are installments of principal in
fall,and
(c) third, to the payment of interest on overdue installments of
principal and interest, on a pro rata basis in the event that the available
amounts are insufficient to pay all such interest in full.
(D) Clauses (a), (b) and (c) of Section 6.03 of the 1992 Loan Agreement are
hereby amended to read in their entirety as follows.
(a) by well and truly paying or causing to be paid the principal of and
interest and prepayment premiums (if any) on the Loan, the 1999 Loan and any
Parity Debt or such portion thereof, as and when the same become due and
payable;
(b) by irrevocably depositing with the Trustee, in trust, at or before
maturity, cash in an amount which, together with the available amounts then on
deposit in any of the funds and accounts established pursuant to the Indenture
or this Loan Agreement, in the opinion or report of Bond Counsel or an
Independent Accountant is fully sufficient to pay all principal of and interest
and prepayment premiums (if any) on the Loan, the 1999 Loan and any Parity
Debt or such portion thereof;or
(c) by irrevocably depositing with the Trustee or any other fiduciary, in
trust,non-callable Federal Securities or Permitted Investments described in clause
(b) of the definition thereof in such amount as Bond Counsel or an Independent
Accountant shall determine will, together with the interest to accrue thereon and
available moneys then on deposit in the funds and accounts established
pursuant to the Indenture or this Loan Agreement,be fully sufficient to pay and
discharge the indebtedness on the Loan, the 1999 Loan and any Parity Debt or
such portion.thereof(including all principal,interest and prepayment premiums)
at or before maturity;
SECTION 3. Partial Invalidity. If any Section, paragraph, sentence, clause or phrase of
this First Supplement shall for any reason be held illegal,invalid or unenforceable,such holding
shall not affect the validity of the remaining portions of this First Supplement. The Agency
hereby declares that it would have adopted this First Supplement and each and every other
Section,paragraph, sentence,clause or phrase hereof and authorized the 1999 Loan irrespective
of the fact that any one or more Sections,paragraphs, sentences, clauses, or phrases of this First
Supplement may be held illegal,invalid or unenforceable.
SECTION 4. Execution of Counterparts. This First Supplement may be executed in any
number of counterparts,each of which shall for all purposes be deemed to be an original and all
of which shall together constitute but one and the same instrument.
SECTION 5. Governing Law. This First Supplement shall be construed and governed in
accordance with the laws of the State of California.
10
IN WITNESS WHEREOF, the CONTRA COSTA COUNTY REDEVELOPMENT
AGENCY and the COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY have
caused this First Supplement to be signed by their respective officers all as of the day and year
first above written.
CONTRA COSTA COUNTY
REDEVELOPMENT .AGENCY
By—
Deputy Director-Redevelopment
COUNTY OF CONTRA COSTA PUBLIC
FINANCING AUTHORITY
By
Deputy Executive Director
03012.01:;4082
11
QuL & hir. gLLP 11/3/98
2/2/99
SECOND SUPPLEMENT TO NORTH RICHMOND LOAN AGREEMENT
by and between the
CONTRA COSTA COUNTY REDEVELOPMENT AGENCY
and the
COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY
Dated as of March 1,1999
Relating, to:
County of Contra Costa Public Financing Authority
1999 Tax Allocation Revenue Bonds
(Pleasant Hill BART,North Richmond,Bay Point,Rodeo
and Oakley Redevelopment Project Areas)
03012.01,J4107
^
TABLE OF CONTENTS
SECTION 1. Supplement tol992Loan Agreement--.--.--..---------.—.—..2
SECTION 2. Amendment nfl992Loan .—.,..—.......—.—..---.—.----/9
SECTION3. Partial ........................................ .....................................................l2
SECTION 4. Execution of (- ----------.----.------.-----.12
SECTION 5. Governing Law................................. ...............................................................l%
i
-- - - - - - -- --
SECOND SUPPLEMENT TO NORTH RICHMOND LOAN AGREEMENT
THIS SECOND SUPPLEMENT TO NORTH RICHMOND LOAN AGREEMENT (this
"First Supplement") is made and entered into as of March 1, 1999, by and between the
CONTRA COSTA COUNTY REDEVELOPMENT AGENCY, a public body., corporate and
politic, duly organized and existing under the laws of the State of California (the "Agency"),
and the COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY, a joint powers
authority organized and existing under the laws of the State of California (the "Authority").
WITNESSETH:
WHEREAS, the Agency is a public body, corporate and politic, duly established and
authorized to transact business and exercise powers under and pursuant to the provisions of
Part 1 of Division 24 of the Health and Safety Code of the State of California (the
"Redevelopment Law"), and has the power under Section 33601 of the Redevelopment Law to
borrow money for any of its corporate purposes;and
WHEREAS, a redevelopment plan for North Richmond Redevelopment Project Area
(herein called "Redevelopment Project"), in the County of Contra Costa, has been adopted in
compliance with all requirements of the Redevelopment Law;and
WHEREAS, the Authority has previously loaned to the Agency (i) $1,126,750.00 (the
"1992 Loan") pursuant to the terms of a North Richmond Loan Agreement, dated as of May 1,
1992 (the "Original Loan Agreement"),by and between the Authority and the Agency, and (ii)
$1,645,000.00 (the "1995 Loan") pursuant to the Original Loan Agreement, as supplemented
by the First Supplement to North Richmond Loan Agreement, dated as of June 1, 1995 (the
Original Loan Agreement, as so supplemented, being herein referred to as the "1992 Loan
Agreement"),by and between the Authority and the Agency;and
WHEREAS, the Agency has requested the Authority to make an additional loan (the
"1999 Loan") to the Agency pursuant to the terms of the 1992 Loan Agreement, as
supplemented by this Second Supplement (collectively referred to herein as the "Loan
Agreement"), for the purpose of providing funds to refinance the 1992 Loan and to assist in the
financing of redevelopment activities within and of benefit to the Redevelopment Project,
including,without limitation, financing for the purpose of increasing and improving within the
County of Contra Costa the supply of low and moderate income housing available at
affordable housing cost, all as provided herein, and the Agency hereby finds and determines
that there will be significant public benefits accruing from such borrowing, consisting of
demonstrable savings in effective interest rates and financing costs associated with the issuance
of bonds as described herein; and
WHEREAS, the 1999 Loan will be secured by the Agency by a pledge of certain tax
increment revenues on a parity with the 1992 Loan and the 1995 Loan, the 1999 Loan will
constitute "Parity Debt" under and as defined in the 1992 Loan Agreement, and this Second
Supplement is being entered into by the Agency and the Authority pursuant to and in
accordance with the provisions of Sections 2.09, 6.04 and 7.10 of the 1992 Loan Agreement;
and
WHEREAS, concurrent with the execution and delivery of this Second Supplement the
Authority has issued its $ aggregate principal amount of County of Contra Costa
Public Financing Authority 1999 Tax Allocation Revenue Bonds (Pleasant Hill BART, North
1
Richmond, Bay Point, Rodeo and Oakley Redevelopment Project Areas) for the purpose, inter
alia, of making the 1999 Loan under the Loan Agreement;and
WHEREAS, in order to establish and declare the terms and conditions upon which the
1999 Loan is to be made and secured, the Agency and the Authority wish to enter into this
Second Supplement, and
WHEREAS, all acts and proceedings required by law necessary to make this Second
Supplement, when executed by the Agency and the Authority, the valid, binding; and legal
obligations of the Agency and the Authority, and to constitute this Second Supplement a valid
and binding agreement and supplement to the 1992 Loan Agreement for the uses and purposes
herein set forth in accordance with its terms, have been done and taken, and the execution and
delivery of this First Supplement have been in all respects duly authorized.
NOW,THEREFORE,in consideration of the premises and the mutual agreements herein
contained,the parties hereto do hereby agree as follows:
SECTION 1. Supplement to 1992 Loan Agreement. In accordance with the provisions
of Sections 2.09, 6.04 and 7.10 of the 1992 Loan Agreement (including Section 5.09 of the
Indenture and Section 5.09 of the 1995 Indenture, as such terms are defined therein), the 1992
Loan Agreement is hereby amended by adding a supplement thereto consisting of a new article
to be designated as Article VIII. Such Article VIII shall read in its entirety as follows:
ARTICLE VIII
1999 LOAN
Section 8.01. Definitions. Unless the context clearly requires otherwise, capitalized
terms used in this Article VIII shall, for all purposes of this Article VIII but not for any other
purpose of this Loan Agreement,have the respective meanings given in Section 1.01 of the 1999
Indenture, or as provided in this Section 8.01. Any capitalized terms used in this Article VIII
that are not otherwise defined in Section 1.01 of the 1999 Indenture or in this Section 8.01 shall
have the respective meanings given in Section 1.01 of this Loan Agreement.
"Continuing Disclosure Certificate" means the Continuing Disclosure Certificate
of the Agency, dated March 1999, relating to the 1933 Bonds.
"Loan_Disbursement Fund" means the fund by that name established held by the
Trustee pursuant to Section 8.03 hereof.
"Low and Moderate Housing Account" means the account of the Agency
established pursuant to Section 8.06A., constituting a part of the Low and Moderate
Income Housing Fund of the Agency established pursuant to Section 33334.3 of the
Redevelopment Law.
"1999 R development Fund"means the fund established and held by the Agency
pursuant to Section 8.06 hereof.
"Participating Underwriter" has the meaning given such term in the Continuing
Disclosure Certificate.
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"Reserve Requirement" means, as of any date of calculation, an amount equal to
Maximum Annual Debt Service taking into account only amounts due on the 1999 Loan
(and not amounts due on any ether Parity Debt or on the Loan).
Section 8.02. Authorization of 1999 Loan. The Authority hereby agrees to lend to the
Agency, from the proceeds of sale of the 2999 Bonds deposited in the Loan Fund established
under the 1999 Indenture, the aggregate principal amount of Million
Thousand Dollars ($ ) under and subject to the terms of this Loan Agreement, the
Bond Law and the Redevelopment Law. This Loan Agreement constitutes a continuing
agreement with the Authority to secure the full and final payment of the 2999 Loan, subject to
the covenants, agreements,provisions and conditions herein contained.
Section 8.03. Disbursement and Application of 1999 Lawn Proceeds. On the Closing
Date, the Authority shall cause to be deposited into the Loan Disbursement Fund, which fund
is hereby created, the amount of$_ which shall be held by the Trustee and which shall
be immediately disbursed by the Trustee as follows:
(a) The Trustee shall deposit the amount of $ in the Costs of
Issuance Fund established under the 1999 Indenture.
(b) The Trustee shall transfer the amount of $ to, or upon the
order of, the Agency for deposit in the 2999 Redevelopment Fund established
under flection 8.06.
(c) The Trustee shall deposit the amount of $ in the 1999
Reserve Fund established under Section 8.07, which amount is equal to the
Reserve Requirement as of the Closing Date.
(d) The Trustee shall transfer the amount of $ to, or upon the
order of, the Agency for deposit in the Low and Moderate Housing Account
established under Section 8.06A.
(e) The Trustee shall transfer the amount of $ to U.S. Bank
Trust National Association as escrow bank (the "Escrow Bank") to be used to
prepay the 1992 Loan in full, and otherwise by the Escrow Bank as provided in
Section 4 of the Escrow Deposit and Trust Agreement, dated as of March 1,
2999, among the Agency, the Authority and the Escrow Bank.
[(f) The Trustee shall deposit the amount of $ in the Interest Account
established under the 2999 Indenture, which amount represents capitalized interest on
the 1999 Loan and shall be credited against amounts otherwise due on the Loan on
August 1, 1999.]
In addition to the foregoing, the Trustee shall be deemed to have distributed to the
Agency on the Closing Date a portion of the discount on the Bonds in the amount of
$-------
Section 8.04. Repayment of 1999 Loan. The Agency shall, repay the 2999 Loan in
installments on each of the dates in each of the years and in the amounts as set forth below:
3
Payment
Date Principal Interest Total
[to come]
Interest on each installment of principal of the 1999 Loan has been calculated at the
annual interest rate payable by the Authority on the 1999 Bonds on the basis of a 360-day year
of twelve 30-day months, and shall accrue on the unpaid principal of the 1999 Loan from the
Closing Date, but not including the Interest Payment Date with respect to which such
installment of principal is payable. Interest on the 1999 Loan shall be payable on each Interest
Payment Date shown above. Any installment of principal or interest which is not paid when
due shall continue to accrue interest from and including the Interest Payment Date with respect
to which such principal or interest is payable to but not including the date of actual payment.
Payments on the 1999 Loan shall be payable by the Agency to the Trustee, as assignee
of the Authority under the Indenture, in immediately available funds which constitute lawful
money of the United States of America. Notwithstanding the foregoing provisions of this
Section 8.04, in lieu of payment of any installment of principal of the Loan coming due and
payable on August I in any year in which Bonds are subject to mandatory sinking fund
redemption under the Indenture,the Agencv shall have the right to purchase any of such Bonds
in an amount not exceeding the amount thereof which is subject to mandatory sinking fund
redemption on such August 1, and tender such Bonds to the Trustee for cancellation, provided
that such tender shall be made before the preceding June 15.
In the event principal of the 1999 Loan shall be prepaid in part pursuant to Section 7.05
hereof, the foregoing schedule of principal and interest payments shall be reduced in the same
amount with respect to each annual installment as the amount of 1999 Bonds redeemed with
respect to the related maturity as further provided in the written directions to the Trustee
referred to in Section 2.02(a) of the 1999 Indenture; and the Agency shall promptly prepare and
deliver such revised schedule to the Trustee.
Section 8.05. Optional Prepayment of the Loan. The Agency shall have the right to
prepay the unpaid principal installments of the Loan, in whole or in part in any integral
multiple of $5,000, on any date on which the 1999 Bonds are subject to optional redemption
pursuant to Section 2.02(a) of the 1999 Indenture,by depositing with the Trustee in the Revenue
Fund established under the 1999 Indenture an amount sufficient to redeem a like aggregate
principal amount of 1999 Bonds pursuant to Section 2.02(a) of the 1999 Indenture, together
with the amount of accrued interest and premium (if any) required to be paid upon such
redemption. The Authority agrees that upon payment by the Agency to the Trustee of such
amount, the Authority shall take or cause to be taken any and all steps required under the 1999
Indenture to redeem such Outstanding 1999 Bonds on the redemption date designated pursuant
to a Written Request of the Agency filed with the Authority and the Trustee;provided, however,
4
that such date shall be a date of redemption of 1999 Bonds for which notice has been timely
given pursuant to the 1999 Indenture.
Notwithstanding the foregoing, the Agency shall be required to give the Trustee written
notice of its intention to prepay the 1999 Loan under this Section and of the amounts and the
maturity or maturities of the 1999 Bonds to be redeemed and the manner of payment, at least
forty five (45) days prior to the date fixed for such prepayment, unless such requirement shall
be waived or modified by the Trustee, and to remit the amount of such prepayment to the
Trustee on the date scheduled for redemption of the 1999 Bonds. In the event that a portion of
the principal of the 1999 Loan shall have been prepaid by the Agency pursuant to this Section,
the amount of each future installment of principal and interest on the 1999 Loan set forth in
Section 8.04 shall be reduced as provided in Section 8.04.
Section 8.05. 1999 Redevelopment Fund. There is hereby established a separate fund to
be known as the "North Richmond Redevelopment Project 1999 Redevelopment Fund",which
shall be held and maintained by the Agency. The moneys in the 1999 Redevelopment Fund
shall be used solely in the manner provided by the Redevelopment Law and the Redevelopment
Plan to provide financing for the Redevelopment Project consistent with the improvements
which were the subject of a public hearing pursuant to Section 6586.5(a)(2) of the Bond Law
with respect to use of proceeds of the 1999 Bonds.
Section 8.05A. Low and Moderate Housing Account There is hereby established a
separate fund to be known as the "Rodeo Redevelopment Project 1999 Low and Moderate
Housing Account",which shall be held and maintained by the Agency. The moneys in the Low
and Moderate Housing Account shall be used solely in the manner and for the purposes as
provided by Sections 33334.2 and 33334.3 of the Redevelopment Law consistent with the
improvements which were the subject of a public hearing pursuant to Section 6586.5(a)(2) of the
Bond Law with respect to use of proceeds of the 1999 Bonds.
Section 8.07. 1999 Reserve Fund.
(a) Establishment of 1999 Reserve Fund. There is hereby established a separate fund to
be known as the "North Richmond Redevelopment Project 1999 Reserve Fund", which shall be
held by the Trustee in trust for the benefit of the Authority and the Owners of the 1999 Bonds.
Amounts initially deposited in the 1999 Reserve Fund shall be derived from the proceeds of the
1999 Loan deposited therein pursuant to Section 8.03(c). The amount on deposit in the 1999
Reserve Fund shall be maintained at the Reserve Requirement (as defined in Section 8.01) at all
times prior to the payment of the 1999 Loan in full pursuant to Section 8.04, except to the
extent required for the purposes set forth in this Section 8.07.
(b) Transfers to Principal Account and Interest Account. In the event that the Agency
shall fail to deposit with the Trustee the full amount required to be deposited pursuant to
Section 3.03(a), the Trustee shall withdraw from the 1999 Reserve Fund and transfer to the
Interest Account and the Principal Account established under the 1999 Indenture,in such order,
the difference between the amount required to be deposited pursuant to Section 3.03(a) with
respect to the 1999 Loan and the amount actually deposited by the Agency in respect of
transfers to such Interest Account and Principal Account. In the event that the amount on
deposit in the 1999 Reserve Fund shall at any time be less than the Reserve Requirement (as
defined in Section 8.01), the Trustee shall promptly notify the Agency of the amount required to
be deposited therein to restore the balance to such Reserve Requirement, such notice to be given
by telephone,telecopy or other form of telecommunication,promptly confirmed in writing.
(c) Transfers of Excess Over Reserve Requirement. In the event that the amount on
deposit in the 1999 Reserve Fund on any Interest Payment Date exceeds the Reserve
5
Requirement (as defined in Section 8.01), the Trustee shall withdraw from. the 1999 Reserve
Fund and deposit to the Revenue Fund established under the 1999 Indenture all amounts in
excess of the Reserve Requirement, and credit such amounts towards the deposit then required
to be made by the Agency pursuant to Section 3.03(x) in respect of amounts to be transferred to
the Interest Account and Principal Account established under the 1999 Indenture.
(d)Alternative Funding of Reserve Requirement. The Agency may fund all or a portion
of the Reserve Requirement (as defined in Section 8.01) with one or more Qualified Reserve
Fund Credit Instruments. Upon deposit of any Qualified Reserve Fund Credit Instrument with
the Trustee, the Trustee shall pay to the Agency from amounts in the 1999 Reserve Fund an
amount equal to the principal of the Qualified Reserve Fund Credit Instrument.
In any case where the 1999 Reserve Fund is funded with a combination of cash and a
Qualified Reserve Fund Credit Instrument, the Trustee shall deplete all cash balances before
drawing on the Qualified Reserve Fund Credit Instrument. With regard to replenishment, any
available moneys provided by the Agency shall be used first to reinstate the Qualified Reserve
Fund Credit Instrument and second,to replenish the cash in the 1999 Reserve Fund. In the event
the Qualified Reserve Fund Credit Instrument is drawn upon, the Agency shall make payment
of interest on amounts advanced under the Qualified Reserve Fund Credit Instrument after
making any payments pursuant to subsection (a) of Section 3.03.
In the event the Qualified Reserve Fund Credit Instrument will lapse or expire, the
Agency shall draw upon such Qualified Reserve Fund Credit Instrument prior to its lapsing or
expiring, make deposits from available Tax Revenues to the 1999 Reserve Fund to increase the
amount on deposit therein to the Reserve Requirement (as defined in Section 8.01) or substitute
such Qualified Reserve Fund Credit Instrument with a Qualified Reserve Fund Credit Instrument
that satisfies the requirements of this subsection (d).
Section 8.O7A. junior Pledge in Favor of Certain Other Loan Agreements. The Agency
hereby determines that the low and moderate income housing components of the redevelopment
projects to be financed pursuant to the "1999 Other Loan Agreements'' hereinafter in this
subsection referred to are of benefit to the Project Area and that Tax Revenues shall be applied
to meet any deficiency which may exist in the amounts required to be transferred to the Trustee
from one or more of the "1999 Other Reserve Accounts", as hereinafter defined, such reserve
funds being established, respectively, by each of the several loan agreements, each dated as of
March 1, 1999 (May 1, 1992 with respect to the West Pittsburg project area), by and between
the Agency and the Trustee, relating respectively to the Oakley, West Pittburg and Rodeo
redevelopment project areas of the Agency (the "1999 Other Project Areas"), (such loan
agreements being referred to herein as the "1999 Other Loan Agreements" and such reserve
funds being referred to herein as the "1999 Other Reserve Accounts"):
(a) in the event there shall, at any time or from time to time, be insufficient
moneys in one or more of the 1999 Other Reserve Accounts to transfer to the Trustee
when due the full amount required to be so transferred to the Trustee in accordance with
the applicable provisions of the 1999 Other Loan Agreements, the Agency shall cause
Tax Revenues in the amount of such insufficiency to be paid to the Trustee; provided
however, that the obligation to pay such insufficiency shall be apportioned pro rata (to
the extent there are then allocable Tax Revenues available) among the Project Area and
such of the 1999 Other Project Areas as do not then have an insufficient reserve account
and, provided further, that the aggregate obligation of the Project Area and the 1999
Other Project Areas to pay such insufficiencies shall not exceed the aggregate debt
service on the portion of the loans made under the 1999 Other Loan Agreements and
this Loan Agreement attributable to the proceeds of such loans deposited in the Low
6
and Moderate Income Housing Account of the Agency pursuant to this Loan Agreement
and the 1999 Other Loan Agreements (plus a portion of such loans attributable to
reserves and financing costs);
(b) in the event of any such insufficiency in the 1999 Other Reserve Accounts, the
Trustee shall promptly notify the Agency, and upon receipt of any such notice, the
Agency shall promptly withdraw from the Special Fund and transfer to the Trustee an
amount equal to the portion of such insufficiency apportioned to the Project Area;
(c) if there shall then not be sufficient moneys in the Special Fund to transfer an
amount equal to the portion of such insufficiency apportioned to the Project Area, the
Agency shall have an obligation to continue making transfers to the Trustee as moneys
become available in the Special Fund until an amount equal to such portion has been
transferred to the Trustee;
(d) such obligation to pay Tax Revenues shall be an indebtedness of the Agency
within the meaning of Section 33670 of the Redevelopment Law;
(e) such obligation to pay Tax Revenues shall be, in all respects, junior and
subordinate to the obligation of the Agency to apply Tax Revenues to the payment of
the 1992 Loan, the 1995 Loan, the Loan and any Parity Debt, in accordance with the
further provisions of this Loan Agreement, but such obligation to pay Tax Revenues
shall be superior to all other future obligations payable from Tax Revenues;and
(f) in the event there shall, at any time or from time to time, be insufficient
moneys in the Reserve Fund to transfer to the Trustee when due the full amount required
to be so transferred to the Trustee in accordance with the applicable provisions of this
Loan Agreement and such insufficiency shall be paid pursuant to one or more of the
1999 Other Loan Agreements, the Agency shall cause the first available surplus Tax
Revenues in the amount of such insufficiency to be returned to the applicable special
funds of the 1999 Other Loan Agreements.
If appropriate determinations have been made by the Agency that any portion of a
redevelopment project to be financed with the proceeds of Parity Debt is of benefit to the 1999
Cather Project Areas,then the Agency may provide in the applicable Parity Debt Instrument that
provisions of like force and effect to the provisions of this Section 8.07A apply with respect to
any reserve fund established for such Parity Debt and such provisions of such Parity Debt
Instrument shall be deemed to be on a parity with the provisions of this Section 8.07A.
Section 8.08. Investment of Moneys; Valuation of Investments. honeys in the funds
and accounts held by the Trustee under this Article VIII shall be invested by the Trustee in
Permitted Investments specified in the Written Request of the Agency filed with the Trustee at
least two (2) Business Days in advance of the making of such investments. In the absence of
any such direction,the Trustee shall invest any such moneys in Permitted Investments described
in clause(d) of the definition thereof which by their terms mature on or before the date on which
such moneys are required to be paid out hereunder.
Obligations purchased as an investment of moneys in any fund shall be deemed to be
part of such fund or account. Whenever in this Loan Agreement any moneys are required to be
transferred by the Agency to the Trustee, such transfer may be accomplished by transferring a
like amount of Permitted Investments which by their terms mature prior to the date on which
such moneys are required to be paid out hereunder. All interest or gain derived from the
investment of amounts in any of the funds or accounts established hereunder (other than with
respect to funds held by the Agency) shall be retained in the respective funds and accounts to
7
be used for the purposes thereof; provided, however, that all interest or gain from the
investment of amounts in the 1999 Reserve Fund shall be deposited by the Trustee in the
Interest Account created under the 1999 Indenture, but only to the extent that the amount
remaining in the 1999 Reserve Fund following such deposit is equal to the Reserve Requirement
(as defined in Section 8.01).
For purposes of acquiring any investments hereunder, the Trustee may commingle funds
held by it hereunder. The Trustee may act as principal or agent in the acquisition or disposition
of any investment. The Trustee shall incur no liability for losses arising from any investments
made pursuant to this Section 8.08.
Except as otherwise provided in the next sentence, all investments of amounts
deposited in any fund or account created by or pursuant to this Article, or otherwise containing
gross proceeds of the 1999 Loan (within the meaning of section 148 of the Tax Code) shall be
acquired, disposed of, and valued (as of the date that valuation is required by the Indenture or
the Code) at Fair Market Value. Investments in funds or accounts (or portions thereof) that are
subject to a yield restriction under applicable provisions of the Tax Code shall be valued at
their present value (within the meaning of section 148 of the Tax Code).
Section 8.09. Tax Covenants.
(a) en rp ally. The Agency shall not take any action or permit to be taken
any action within its control which would cause or which,with the passage of time if not
cured would cause, interest on the 1999 Bonds to become includable in gross income for
federal income tax purposes.
(b) Private Activity Bond Limitation. The Agency shall assure that the
proceeds of the 1999 Loan are not used in a manner which would cause the 1999 Bonds
to become "private activity bonds" within the meaning of Section 141(a) of the Tax
Code or to meet the private loan financing test of Section 141(c) of the Tax Code.
(c) Federal Guarantee Prohibition. The Agency shall not take any action or
permit or suffer any action to be taken if the result of the same would be to cause the
1999 Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the
Tax Code.
(d) No Arbitrage. The Agency shall not take, or permit or suffer to be taken
by the Trustee or otherwise, any action with respect to the 1999 Loan proceeds which, if
such action had been reasonably expected to have been taken, or had been deliberately
and intentionally taken, on the Closing Date, would have caused the 1999 Bonds to be
"arbitrage bonds"within the meaning of Section 148 of the Tax Code.
(e) Rebate Requirement. The Agency shall take any and all actions necessary
to assure compliance with Section 148(f) of the Tax Code, relating to the rebate of
excess investment earnings relating to the 1999 Bonds, if any, to the federal government,
so to ensure that interest on the 1999 Bonds does not become includable in gross income
for federal income tax purposes. Without limiting the generality of the foregoing
sentence, the Agency shall provide complete and accurate records relating to the
investment of the proceeds of the 1999 Loan to the Authority, and shall pay or cause to
be paid, in accordance with Section 5.08 of the 1999 Indenture, all excess investment
earnings which are attributable to the proceeds of the 1999 Loan.
(f) Additional Restrictions. In addition to complying with the foregoing
provisions of this Section, the Agency shall not take any action or permit or suffer any
8
action to be taken if the result of the same would be to cause interest on the 1999 Bonds
to be includable in gross income of the owners thereof for federal income tax purposes.
Section 8.10. Continuing Disclosure. The Agency hereby covenants and agrees that it
will comply with and carry out all of the obligations on its part contained in the Continuing
Disclosure Certificate. Notwithstanding any other provision of this Agreement, failure of the
Agency (or any other party thereto) to comply with the Continuing Disclosure Certificate shall
not be considered a default hereunder;however, any Participating Underwriter or any holder or
beneficial owner of the 1999 Bonds may take such actions as may be necessary and
appropriate, including seeking mandate or specific performance by court order, to cause the
Agency (or any other party thereto) to comply with its obligations under the Continuing
Disclosure Certificate.
Section 8.11. Payment of Authority Expenses. The Agency hereby agrees to pay any
and all expenses of the Authority incurred in connection with the administration of the Bonds,
the 1995 Bonds and the 1999 Bonds,including but not limited to trustee fees and expenses.
Section 8.12. Benefits Limited to Parties. Nothing in this Article VIII, expressed or
implied,is intended to give to any person other than the Agency, the Authority,the Trustee and
the Owners of the 1999 Bonds any right, remedy, claim under or by reason of this Article VIII.
Any covenants, stipulations, promises or agreements in this Article VIII contained by and on
behalf of the Agency shall be for the sole and exclusive benefit of the Authority,the Trustee and
the Owners of the 1999 Bonds.
Section 8.13. Further Assurances. The Agency will adopt, make, execute and deliver
any and all such further resolutions, instruments and assurances as may be reasonably
necessary or proper to carry out the intention or to facilitate the performance of this Loan
Agreement, and for the better assuring and confirming unto the Owners of the 1999 Bonds the
rights and benefits provided in this Loan Agreement.
Section 8.14. Effect of this Article VIII. Except as in this Article VIII expressly
provided or except to the extent inconsistent with any provision of this Article VIII, the 1999
Loan shall be deemed to be Parity Debt under and within the meaning of Section 1.01, and
every term and condition contained in the foregoing provisions of this Loan Agreement shall
apply to the 1999 Loan with full force and effect, with such omissions, variations and
modifications thereof as may be appropriate to make the same conform to this Article VIII.
Notwithstanding the foregoing, however, the 1999 Loan shall not be deemed to be Parity Debt
under and within the meaning of Section 1.01 for purposes of the following provisions of this
Loan Agreement: (a) the provisions of Article II shall not apply to the 1999 Loan (except that
the 1999 Loan shall be treated as Parity Debt for purposes of Sections 2.09 and 2.10); (b) the
provisions of Sections 4.11 and 4.12, inclusive, shall not apply to the 1999 Loan; and (c) the
provisions of Article VII shall not apply to the 1999 Loan.
SECTION 2. Amendment of 1992 Loan Agreement. The 1992 Loan Agreement is
hereby further amended as set forth in this Section 2:
(A) Section 1.01 of the 1992 Loan Agreement is hereby amended by adding
thereto the following new defined terms and, in the case of the following defined terms
which are currently contained in Section 1.01, by amending such terms to read in their
entirety as follows:
"1999 Bonds" means the Authority's 1999 Tax Allocation Revenue Bonds
(Pleasant Hill BART, North Richmond, Bay Point, Rodeo and Oakley
Redevelopment Project Areas),issued and outstanding under the 1999 Indenture.
9
„2999 Indenture” means the Indenture of Trust dated as of March 1,
2999, by and between the Authority and U.S. Bank Trust National Association,
as trustee, as originally executed or as it may from time to time be supplemented,
modified or amended.
"2999 Loan'° means the loan made by the Authority to the Agency in the
aggregate principal amount of pursuant to Section 8.02.
"1999 Reserve Find" means the fund by that name established and held
by the Trustee under Section 8.07.
"First Suppler"means the First Supplement to forth Richmond Loan
Agreement, dated as of June 1, 2995, by and between the Agency and the
Authority.
"Loan Agreement" means this Loan Agreement by and between the
Agency and the Authority, as amended and supplemented by the First
Supplement and the Second Supplement, and as it may from time to time be
further amended,modified or supplemented.
"Parity Debt" means (a) the 1995 Loan, (b) the 1999 Loan, (c) any other
loans, bonds, notes, advances or indebtedness payable from Tax Revenues on a
parity with the Loan, the 2995 Loan and the 1999 Loan to finance the
Redevelopment Project, issued or incurred pursuant to and in accordance with
the first paragraph of Section 2.09 and Section 7.101, as applicable, or (d) any
Refunding Debt issued or incurred in accordance with the provisions of the
second paragraph of Section .2.09.
"Parity Debt Instrument" means the First Supplement, the Second
Supplement,and any other resolution,indenture of trust,trust agreement or other
instrument authorizing the issuance of any Parity Debt.
"Reserve Requirement" means, as of any date of calculation, an amount
equal to Maximum Annual Debt Service taking into account only amounts clue on
the Loan (and not amounts due on any Parity Debt).
"Second Suppler" means the Second Supplement to North Richmond
Loan Agreement, dated as of March 1, 1999,by and between the Agency and the
Authority.
"Trustee" means U.S. Bank Trust National Association, as successor
trustee under the Indenture and the 2995 Indenture, and as trustee under the
2999 Indenture.
(B) Clauses (a) and (b) of Section 3.03 of the 1992 Loan Agreement are
hereby amended to read in their entirety as follows:
(a) Int�t and Principal Deposits. No later than the fifteenth (25th)
calendar day of the month preceding each date on which the principal of or
interest on the Loan, the 1995 Loan, the 1999 Loan or any ether Parity Debt
shall become due and payable, including but not limited to the principal amount
of the Loan, the 1995 Loan or the 2999 Loan to be prepaid hereunder together
with any prepayment premium thereon, the Agency shall withdraw from the
10
Special Fund and transfer to the Trustee an amount which, together with the
amounts then held on deposit in the Interest Accounts, the Principal Accounts
and the Revenue Funds established under the Indenture, the 1995 Indenture and
the 1999 Indenture, is equal to the aggregate amount of such principal, interest
and prepayment premium. The Trustee shall deposit amounts so remitted
representing payments on the Loan under the Indenture, amounts so remitted
representing payments on the 1995 Loan under the 1995 Indenture, and amounts
so remitted representing payments on the 1999 Loan under the 1999 Indenture.
(b) Reserve Fund Deposits. In the event that (i) the Trustee shall notify
the Agency pursuant to Section 2.08(b), 7.07(b) or 8.07(b) that the amount on
deposit in the Reserve Fund, the 1995 Reserve Fund or the 1999 Reserve Fund is
less than the applicable Reserve Requirement, or (ii) any Qualified Reserve Fund
Credit Investment shall expire and not be replaced in accordance with Section
2.08(4), 7.07(b) or 8.07(b), as applicable, or (iii) the amount in any reserve
account described in Section 2.09(c)(iii) shall be less than Maximum.Annual Debt
Service on the related Parity Debt, the Agency shall immediately withdraw from
the Special Fund and transfer (x) in the case of any event described in the
preceding clause (i) or (ii), to the Trustee for deposit in the Reserve Fund, the
1.995 Reserve Fund or the 1999 Reserve Fund, as applicable, an amount of money
necessary to maintain the applicable Reserve Requirement in the respective
Reserve Fund,the 1995 Reserve Fund or the 1999 Reserve Fund,or (y) in the case
of an event described in the preceding clause (iii), to the trustee for such Parity
Debt for deposit in the reserve account established for such Parity Debt an
amount of money necessary to maintain an amount equal to Maximum. Annual
Debt Service on such Parity Debt in such reserve fund. No such transfer and
deposit need be made to the Reserve Fund, the 1995 Reserve Fund or the 1999
Reserve Fund so long as there shall be on deposit therein a sum at least equal to
the applicable Deserve Requirement.
Notwithstanding the foregoing, no such transfer and deposit need to be
made upon the occurrence of a default or failure to pay under any Qualified
Reserve Fund Credit Instrument, or any termination thereof prior to its stated
termination date, except as a result of a default by the Agency.
(C) Clause Second of Section 5.02 of the 1992 Loan Agreement is hereby
amended to read in its entirety as follows:
Second to the payment of the whole amount of interest on and principal
of the Loan, the 1995 Loan, the 1999 Loan and any Parity Debt then due and
unpaid, with interest on overdue installments of principal and interest to the
extent permitted by law at the net effective rate of interest then borne by the
Outstanding Bonds (with respect to amounts due on the Loan), the Outstanding
1995 Bonds (with respect to amounts due on the 1995 Loan), or the Outstanding
1999 Bonds (with respect to amounts due on the 1999 Loan), provided, however,
that in the event such amounts shall be insufficient to pay in full the full amount
of such interest and principal, then such amounts shall be applied in the
following order of priority:
(a) first,to the payment of all installments of interest on the Loan, the
1995 Loan, the 1999 Loan and any Parity Debt then due and unpaid, on a
pro rata basis in the event that the available amounts are insufficient to pay
all such interest in full,
11
(b) second, to the payment of all installments of principal of the Loan,
the 1995 Loan, the 1999 Loan and any Parity Debt then due and payable, on
a pro rata basis in the event that the available amounts are installments of
principal in full,and
(c) third, to the payment of interest on overdue installments of
principal and interest, on a pro rata basis in the event that the available
amounts are insufficient to pay all such interest in full.
(D) Clauses (a), (b) and (c) of Section 6.03 of the 1992 Loan Agreement are
hereby amended to read in their entirety as follows:
(a) by well and truly paying or causing to be paid the principal of and
interest and prepayment premiums (if any) on the Loan, the 1995 Loan, the 2999
Loan and any Parity Debt or such portion thereof, as and when the same become
due and payable;
(b) by irrevocably depositing with the Trustee, in trust, at or before
maturity, cash in an amount which,together with the available amounts then on
deposit in any of the funds and accounts established pursuant to the Indenture
or this Loan Agreement, in the opinion or report of Bond Counsel or an
Independent Accountant is fully sufficient to pay all principal of and interest
and prepayment premiums (if any) on the Loan, the 1995 Loan, the 1999 Loan
and any Parity Debt or such portion thereof; or
(c) by irrevocably depositing with the Trustee or any other fiduciary, in
trust,non-callable Federal Securities or Permitted Investments described in clause
(b) of the definition thereof in such amount as Bond Counsel or an Independent
Accountant shall determine will, together with the interest to accrue thereon and
available moneys then on deposit in the funds and accounts established
pursuant to the Indenture or this Loan Agreement, be fully sufficient to pay and
discharge the indebtedness on the Loan, the 1995 Loan, the 2999 Loan and any
Parity Debt or such portion thereof (including all principal, interest and
prepayment premiums)at or before maturity;
SECTION 3. Partial Invaliditv. If any Section, paragraph, sentence,clause or phrase of
this Second Supplement shall for any reason be held illegal, invalid or unenforceable, such
holding shall not affect the validity of the remaining portions of this Second Supplement. The
Agency hereby declares that it would have adopted this Second Supplement and each and
every other Section, paragraph, sentence, clause or phrase hereof and authorized the 1399 Loan
irrespective of the fact that any one or more Sections,paragraphs, sentences,clauses,or phrases
of this First Supplement may be held illegal,invalid or unenforceable.
SECTION 4. Execution of Counterparts. This Second Supplement may be executed in
any number of counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall together constitute but one and the same instrument.
SECTION 5. Governing Law. This Second Supplement shall be construed and governed
in accordance with the laws of the State of California.
12
IN WITNESS WHEREOF, the CONTRA COSTA COUNTY REDEVELOPMENT
AGENCY and the COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY have
caused this Second Supplement to be signed by their respective officers all as of the day and
year first above written.
CONTRA COSTA COUNTY
REDEVELOPMENT AGENCY
By
Deputy Director a Redevelopment
COUNTY OF CONTRA COSTA PUBLIC
FINANCING AUTHORITY
By --
Deputy Executive Director
030'2.01:4107
13
Quint&Thhmnig LLP 10/23/98
2/2/99
SECOND SUPPLEMENT TO WEST PITTSBURG LOAN AGREEMENT
by and between the
CONTRA COSTA COUNTY REDEVELOPMENT AGENCY
and the
COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY
Dated as of March 1,1999
Relating to:
County of Contra Costa Public Financing Authority
1999 Tax Allocation Revenue Bonds
(Pleasant Hill BART,North Richmond,Bay Point,Rodeo
and Oakley Redevelopment Project Areas)
o3c�z.a�:�4o�7
-
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TABLE OF CONTENTS
SECTION 1. Supplement tol9g2Loan Agreement...............................................................
SECTI[)N2. Amendment cd1992LoanAgreement......... ......... ...........................................
SECTION, 3. Partial Invalidity--.---------.—.---------.—.,.—.---.l2
SECTION 4. Execution of Counterparts....................................................... .....---.......l2
SECTION 5. Governing Law................................................ ................................................I2
i
SECOND SUPPLEMENT TO WEST PITTSBURG LOAN AGREEMENT
THIS SECOND SUPPLEMENT TO WEST PITTSBURG LOAN AGREEMENT (this
„First Supplement') is made and entered into as of March 1, 1999, by and between the
CONTRA COSTA COUNTY REDEVELOPMENT AGENCY, a public body, corporate and
politic, duly organized and existing under the laws of the State of California (the "Agency"),
and the COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY, a joint powers
authority organized and existing under the laws of the State of California (the "Authority").
WITNESSETH.
WHEREAS, the Agency is a public body, corporate and politic, duly established and
authorized to transact business and exercise powers under and pursuant to the provisions of
Part 1 of Division 24 of the Health and Safety Code of the State of California (the
"Redevelopment Law"), and has the power under Section 33601 of the Redevelopment Law to
borrow money for any of its corporate purposes; and
WHEREAS, a redevelopment plan for Bay Point Redevelopment Project Area (formerly
Known as the West Pittsburg Redevelopment Project Area, and herein called "Redevelopment
Project"), in the County of Contra Costa,has been adopted in compliance with all requirements
of the Redevelopment Law; and
WHEREAS, the Authority has previously loaned to the Agency (i) $2,535,287.50 (the
"1992 Loan") pursuant to the terms of a West Pittsburg Loan Agreement, dated as of May 1,
1992 (the "Original Loan Agreement'),by and between the Authority and the Agency, and (ii)
$2,735,000.00 (the "1995 Loan") pursuant to the Original Loan. Agreement, as supplemented
by the First Supplement to West Pittsburg Loan Agreement, dated as of December 1, 1995 (the
Original Loan Agreement, as so supplemented, being herein referred to as the "1992 Loan
Agreement"),by and between the Authority and the Agency; and
WHEREAS, the Agency has requested the Authority to male an additional loan (the
"1999 Loan") to the Agency pursuant to the terms of the 1992 Loan Agreement, as
supplemented by this Second Supplement (collectively referred to herein as the "Loan
Agreement"), for the purpose of providing funds to refinance the 1992 Loan and to assist in the
financing of redevelopment activities within and of benefit to the Redevelopment Project,
including,without limitation, financing for the purpose of increasing and improving within the
County of Contra Costa the supply of low and moderate income housing available at
affordable housing cost, all as provided herein, and the Agency hereby finds and determines
that there will be significant public benefits accruing from such borrowing, consisting of
demonstrable savings in effective interest rates and financing costs associated with the issuance
of bonds as described herein; and
WHEREAS, the 1999 Loan will be secured by the Agency by a pledge of certain tax
increment revenues on a parity with the 1992 Loan and the 1995 Loan, the 1999 Loan will
constitute "Parity Debt" under and as defined in the 1992 Loan Agreement, and this Second
Supplement is being entered into by the Agency and the Authority pursuant to and in
accordance with the provisions of Sections 2.09 and 6.04 of the 1992 Loan Agreement; and
WHEREAS, concurrent with the execution and delivery of this Second Supplement the
Authority has issued its $ aggregate principal amount of County of Contra Costa
Public Financing Authority 1999 Tax Allocation Revenue Bonds (Pleasant Hill BART, North
i
Richmond, Pay Point, Rodeo and Oakley Redevelopment Project Areas) for the purpose, inter
alfa, of making the 1999 Loan under the Loan Agreement,and
WHEREAS, in order to establish and declare the terms and conditions upon which the
1999 Loan is to be made and secured, the Agency and the Authority wish to enter into this
Second Supplement,and
WHEREAS, all acts and proceedings required by law necessary to make this Second
Supplement, when executed by the Agency and the Authority, the valid, binding and legal
obligations of the Agency and the Authority, and to constitute this Second Supplement a valid
and binding agreement and supplement to the 1992 Loan Agreement for the uses and purposes
herein set forth in accordance with its terms, have been done and taken, and the execution and
delivery of this First Supplement have been in all respects duly authorized.
NOW,THEREFORE, in consideration of the premises and the mutual agreements herein
contained, the parties hereto do hereby agree as follows:
SECTION 1. Supplement to 1992 Loan Agreement. In accordance with the provisions
of Sections 2.09 and 6.04 of the 1992 Loan Agreement (including Section 5.09 of the Indenture
and Section 5.09 of the 1995 Indenture, as such terms are defined therein),. the 1992 Loan
Agreement is hereby amended by adding a supplement thereto consisting of a new article to be
designated as Article VIII. Such Article VIII shall read in its entirety as follows:
ARTICLE VIII
1999 LOAN
Section 8.01. Definitions. unless the context clearly requires otherwise, capitalized
terms used in this Article VIII shall, for all purposes of this Article VIII but not for any other
purpose of this Loan Agreement,have the respective meanings given in Section 1.01 of the 1999
Indenture, or as provided in this Section 8.01. Any capitalized terms used in this Article VIII
that are not otherwise defined in Section 1.01 of the 1999 Indenture or in this Section 8.01 shall
have the respective meanings given in Section 1.01 of this Loan Agreement.
"Continuing Disclosure Certificate" means the Continuing Disclosure Certificate
of the Agency, dated March . , 1999, relating to the 1999 Ponds.
"Loan Disbursement Fund" means the fund by that name established held by the
Trustee pursuant to Section 8.03 hereof.
"Low and Moderate Housing Account" means the account of the Agency
established pursuant to Section 8.06A, constituting a part of the Low and Moderate
Income Housing Fund of the Agency established pursuant to Section 33334.3 of the
Redevelopment Law.
"1999 RQdeveloj2ment Fund" means the fund established and held by the Agency
pursuant to Section 8.06 hereof.
"Participating Underwriter" has the meaning given such term in the Continuing
Disclosure Certificate.
2
"Reserve Requirement" means, as of any date of calculation,an amount equal to
Maximum Annual Debt Service taking into account only amounts due on the 1999 Loan
(and not amounts due on any other Parity Debt or on the Loan).
Section 8.02. Authorization of 1999 Loan. The Authority hereby agrees to lend to the
Agency, from the proceeds of sale of the 1999 Bonds deposited in the Loan Fund established
under the 1999 Indenture, the aggregate principal amount of Million
Thousand Dollars ($-- ) under and subject to the terms of this Loan Agreement, the
Bond Law and the Redevelopment Law. This Loan Agreement constitutes a continuing
agreement with the Authority to secure the full and final payment of the 1999 Loan, subject to
the covenants,agreements,provisions and conditions herein contained.
Section 8.03. Disbursement and Application of 1999 Loan Proceeds. On the Closing
Date, the Authority shall cause to be deposited into the Loan Disbursement Fund, which fund
is hereby created, the amount of$ .which shall be held by the Trustee and which shall
be immediately disbursed by the Trustee as follows:
(a) The Trustee shall deposit the amount of $ in the Costs of
Issuance Fund established under the 1999 Indenture.
(b) The Trustee shall transfer the amount of $ to, or upon the
order of, the Agency for deposit in the 1999 Redevelopment Fund established
under Section 8.06.
(c) The Trustee shall deposit the amount of $_ in the 1999
Reserve Fund established under Section 8.07, which amount is equal to the
Reserve Requirement as of the Closing Date.
(d) The Trustee shall transfer the amount of $ to, or upon the
order of, the Agency for deposit in the Low and Moderate Housing Account
established under Section 8.06A.
(e) The Trustee shall transfer the amount of to U.S. Bank
Trust :`National Association as escrow bank (the "Escrow Bank") to be used to
prepay the 1992 Loan in full, and otherwise by the Escrow Bank as provided in
Section 4 of the Escrow Deposit and Trust Agreement, dated as of March 1,
1999, among the Agency,the Authority and the Escrow Bank.
[(f) The Trustee shall deposit the amount of $ in the Interest Account
established under the 1999 Indenture, which amount represents capitalized interest on
the 1999 Loan and shall be credited against amounts otherwise due on the Loan on
August 1, 1999.]
In addition to the foregoing, the Trustee shall be deemed to have distributed to the
Agency on the Closing Date a portion of the discount on the Bonds in the amount of
$--------
Section 8.04. Repayment of 1999 Loan. The Agency shall repay the 1999 Loan in
installments on each of the dates in each of the years and in the amounts as set forth below:
3
Payment
Date Principal In er t Total
[to come
Interest on each installment of principal of the 1999 Loan has been calculated at the
annual interest rate payable by the Authority on the 1999 Bonds on the basis of a 360-day year
of twelve 30-day months, and shall accrue on the unpaid principal of the 1999 Loan from the
Closing Date, but not including the Interest Payment Date with respect to which such
installment of principal is payable. Interest on the 1999 Loan shall be payable on each Interest
Payment Date shown above. Any installment of principal or interest which is not paid when
due shall continue to accrue interest from and including the Interest Payment Date with respect
to which such principal or interest is payable to but not including the date of actual payment.
Payments on the 1999 Loan shall be payable by the Agency to the Trustee, as assignee
of the Authority under the Indenture, in immediately available funds which constitute lawful
money of the United States of America. Notwithstanding the foregoing provisions of this
Section 8.04, in lieu of payment of any installment of principal of the Loan coming due and
payable on August 1 in any year in which Bonds are subject to mandatory sinking fund
redemption under the Indenture, the Agency shall have the right to purchase any of such Bonds
in an amount not exceeding the amount thereof which is subject to mandatory sinking fund
redemption on such August 1, and tender such Bonds to the Trustee for cancellation, provided
that such tender shall be made before the preceding June 15.
In the event principal of the 1999 Loan shall be prepaid in part pursuant to Section 7.05
hereof, the foregoing schedule of principal and interest payments shall be reduced in the same
amount with respect to each annual installment as the amount of 1999 Bonds redeemed with
respect to the related maturity as further provided in the written directions to the Trustee
referred to in Section 2.02(a) of the 1999 Indenture; and the Agency shall promptly prepare and
deliver such revised schedule to the Trustee.
Section 8.05. Optional Prepayment of the Lean. The Agency shall have the right to
prepay the unpaid principal installments of the Loan, in whole or in part in any integral
multiple of $5,000, on any date on which the 1999 Bonds are subject to optional redemption
pursuant to Section 2.02(a) of the 1999 Indenture,by depositing with the Trustee in the Revenue
Fund established under the 1999 Indenture an amount sufficient to redeem a like aggregate
principal amount of 1999 Bonds pursuant to Section 2.02(a) of the 1999 Indenture, together
with the amount of accrued interest and premium (if any) required to be paid upon such
redemption. The Authority agrees that upon payment by the Agency to the Trustee of such
amount, the Authority shall take or cause to be taken any and all steps required under the 1999
4
Indenture to redeem such Outstanding 1999 Bonds on the redemption date designated pursuant
to a Written Request of the Agency filed with the Authority and the Trustee;provided, however,
that such date shah be a date of redemption of 1999 Bonds for which notice has been timely
given pursuant to the 1999 Indenture.
Notwithstanding the foregoing, the Agency shall be required to give the Trustee written
notice of its intention to prepay the 1999 Loan under this Section and of the amounts and the
maturity or maturities of the 1999 Bonds to be redeemed and the manner of payment, at least
forty five (45) days prior to the date fixed for such prepayment, unless such requirement shall
be waived or modified by the Trustee, and to remit the amount of such prepayment to the
Trustee on the date scheduled for redemption of the 1999 Bonds. In the event that a portion of
the principal of the 1999 Loan shall have been prepaid by the Agency pursuant to this Section,
the amount of each future installment of principal and interest on the 1999 Loan set forth in
Section 8.04 shall be reduced as provided in Section 8.04.
Section 8.06. 1999 Redevelopment Fund. There is hereby established a separate fund to
be known as the "Bay Point Redevelopment Project 1999 Redevelopment Fund", which shall be
held and maintained by the Agency. The moneys in the 1999 Redevelopment Fund shall be
used solely in the manner provided by the Redevelopment Law and the Redevelopment Plan to
provide financing for the Redevelopment Project consistent with the improvements which were
the subject of a public hearing pursuant to Section 6586.5(a)(2) of the Bond Law with respect to
use of proceeds of the 1999 Bonds.
Section 8.06A. Low and Moderate Housing Account. There is hereby established a
separate fund to be known as the "Rodeo Redevelopment Project 1999 Low and Moderate
Housing Account",which shall be held and maintained by the Agency. The moneys in the Low
and Moderate Housing Account shall be used solely in the manner and for the purposes as
provided by Sections 33334.2 and 83334.8 of the Redevelopment Law consistent with the
improvements which were the subject of a public hearing pursuant to Section 6586.5(a)(2) of the
Bond Law with respect to use of proceeds of the 1999 Bonds.
Section 8.07. 1999 Reserve Fund.
(a) Establishment of 1999 Reserve Fund. There is hereby established a separate fund to
be known as the "Bay Point Redevelopment Project 1999 Reserve Fund",which shall be held by
the Trustee in trust for the benefit of the Authority and the Owners of the 1999 Bonds.
Amounts initially deposited in the 1999 Reserve Fund shall be derived from the proceeds of the
1999 Loan deposited therein pursuant to Section 8.03(c). The amount on deposit in the 1999
Reserve Fund shall be maintained at the Reserve Requirement(as defined in Section 8.01) at all
times prior to the payment of the 1999 Loan in full pursuant to Section 8.04, except to the
extent required for the purposes set forth in this Section 8.07.
(b) Transfers to Principal Account and Interest Account. In the event that the Agency
shall fail to deposit with the Trustee the full amount required to be deposited pursuant to
Section 3.03(a), the Trustee shall withdraw from the 1999 Reserve Fund and transfer to the
Interest Account and the Principal Account established under the 1999 Indenture,in such order,
the difference between the amount required to be deposited pursuant to Section 3.03(x) with
respect to the 1999 Loan and the amount actually deposited by the Agency in respect of
transfers to such Interest Account and Principal Account. In the event that the amount on
deposit in the 1999 Reserve Fund shall at any time be less than the Reserve Requirement (as
defined in Section 8.01),the Trustee shall promptly notify the Agency of the amount required to
be deposited therein to restore the balance to such Reserve Requirement, such notice to be given
by telephone,telecopy or other form of telecommunication,promptly confirmed in writing.
5
(c) Tran fir.$ of Excess Over Reserve Requirement. In the event that the amount on
deposit in the 1999 Reserve Fund on any Interest Payment Date exceeds the Reserve
Requirement (as defined. in Section 8.01), the Trustee shall withdraw from the 1999 Reserve
Fund and deposit to the Revenue Fund established under the 1999 Indenture all amounts in
excess of the Reserve Requirement, and credit such amounts towards the deposit then required
to be made by the Agency pursuant to Section 3.03(a) in respect of amounts to be transferred to
the Interest Account and Principal Account established under the 1999 Indenture.
(d)Alternative Funding of Reserve Requirement. The Agency may fund all or a portion
of the Reserve Requirement (as defined in Section 8.01) with one or more Qualified Reserve
Fund Credit Instruments. Upon deposit of any Qualified Reserve Fund Credit Instrument with
the Trustee, the Trustee shall pay to the Agency from amounts in the 1999 Reserve Fund an
amount equal to the principal of the Qualified Reserve Fund Credit Instrument.
In any case where the 1999 Reserve Fund is funded with a combination of cash and a
Qualified Reserve Fund Credit Instrument, the Trustee shall deplete all cash balances before
drawing on the Qualified Reserve Fund Credit Instrument, With regard to replenishment, any
available moneys provided by the Agency shall be used first to reinstate the Qualified Reserve
Fund Credit Instrument and second,to replenish the cash in the 1999 Reserve Fund. In the event
the Qualified Reserve Fund Credit Instrument is drawn upon, the Agency shall make payment
of interest on amounts advanced under the Qualified Reserve Fund Credit Instrument after
making any payments pursuant to subsection (a) of Section 3.03.
In the event the Qualified Reserve Fund Credit Instrument will lapse or expire, the
Agency shall draw upon such Qualified Reserve Fund Credit Instrument prior to its lapsing or
expiring, make deposits from available Tax Revenues to the 1999 Reserve Fund to increase the
amount on deposit therein to the Reserve Requirement (as defined in Section 8.01) or substitute
such Qualified Reserve Fund Credit Instrument with a Qualified Reserve Fund Credit Instrument
that satisfies the requirements of this subsection (d).
Section 8.07A. Junior Pledge in Favor of Certain 1999 Other Loan Agreements. The
Agency hereby determines that the low and moderate income housing components of the
redevelopment projects to be financed pursuant to the "1999 Other Loan Agreements"
hereinafter in this subsection referred to are of benefit to the Project Area and that Tax
Revenues shall be applied to meet any deficiency which may exist in the amounts required to be
transferred to the Trustee from one or more of the "1999 Other Reserve Accounts", as
hereinafter defined, such reserve funds being established, respectively, by each of the several
loan agreements, each dated as of March 1, 1999 (May 1, 1992 with respect to the North
Richmond project area),by and between the Agency and the Trustee,relating respectively to the
Oakley, North Richmond and Rodeo redevelopment project areas of the Agency tithe "1999
Other Project Areas"), (such loan agreements being referred to herein as the "1999 Other Loan
Agreements" and such reserve funds being referred to herein as the "1999 Other Reserve
Accounts"):
(a) in the event there shall, at any time or from time to time, be insufficient
moneys in one or more of the 1999 Other Reserve Accounts to transfer to the Trustee
when due the full amount required to be so transferred to the Trustee in accordance with
the applicable provisions of the 1999 Other Loan Agreements, the Agency shall cause
Tax Revenues in the amount of such insufficiency to be paid to the Trustee; provided
however, that the obligation to pay such insufficiency shall be apportioned pro rata (to
the extent there are then allocable Tax Revenues available) among the Project Area and
such of the 1999 Other Project Areas as do not then have an insufficient reserve account
and, provided further, that the aggregate obligation of the Project Area and the 1999
6
Other Project Areas to pay such insufficiencies shall not exceed the aggregate debt
service on the portion of the loans made under the 1999 Other Loan Agreements and
this Loan Agreement attributable to the proceeds of such loans deposited in the Low
and Moderate Income Housing Account of the Agency pursuant to this Loan Agreement
and the 1999 Other Loan Agreements (plus a portion of such loans attributable to
reserves and financing costs);
(b) in the event of any such insufficiency in the 1999 Other Reserve Accounts, the
Trustee shall promptly notify the Agency, and upon receipt of any such notice, the
Agency shall promptly withdraw from the Special Fund and transfer to the Trustee an
amount equal to the portion of such insufficiency apportioned to the Project Area;
(c) if there shall then not be sufficient moneys in the Special Fund to transfer an
amount equal to the portion of such insufficiency apportioned to the Project Area, the
Agency shall have an obligation to continue making transfers to the Trustee as moneys
become available in the Special Fund until an amount equal to such portion has been
transferred to the Trustee;
(d) such obligation to pay Tax Revenues shall be an indebtedness of the Agency
within the meaning of Section 33670 of the Redevelopment Law;
(e) such obligation to pay Tax Revenues shall be, in all respects, junior and
subordinate to the obligation of the Agency to apply Tax Revenues to the payment of
the 1992 Loan, the 1995 Loan, the Loan and any Parity Debt, in accordance with the
further provisions of this Loan Agreement, but such obligation to pay Tax Revenues
shall be superior to all other future obligations payable from Tax Revenues;and
(f) in the event there shall, at any time or from time to time, be insufficient
moneys in the Reserve Fund to transfer to the Trustee when due the full amount required
to be so transferred to the Trustee in accordance with the applicable provisions of this
Loan Agreement and such insufficiency shall be paid pursuant to one or more of the
1999 Other Loan Agreements, the Agency shall cause the first available surplus Tax
Revenues in the amount of such insufficiency to be returned to the applicable special
funds of the 1999 Other Loan Agreements.
If appropriate determinations have been made by the Agency that any portion of a
redevelopment project to be financed with the proceeds of Parity Debt is of benefit to the 1999
Other Project Areas, then the Agency may provide in the applicable Parity Debt Instrument that
provisions of like force and effect to the provisions of this Section 8.07A apply with respect to
any reserve fund established for such Parity Debt and such provisions of such Parity Debt
Instrument shall be deemed to be on a parity with the provisions of this Section 8.07A.
Section 8.08. Investment of Moneys; Valuation of Investments. Moneys in the funds
and accounts held by the Trustee under this Article VIII shall be invested by the Trustee in
Permitted Investments specified in the Written Request of the Agency filed with the Trustee at
least two (2) Business Days in advance of the making of such investments. In the absence of
any such direction,the Trustee shall invest any such moneys in Permitted Investments described
in clause (d)of the definition thereof which by their terms mature on or before the date on which
such moneys are required to be paid out hereunder.
Obligations purchased as an investment of moneys in any fund shall be deemed to be
part of such fund or account. Whenever in this Loan Agreement any moneys are required to be
transferred by the Agency to the Trustee, such transfer may be accomplished by transferring a
like amount of Permitted Investments which by their terms mature prior to the date on which
7
such moneys are required to be paid out hereunder. All interest or gain derived from the
investment of amounts in any of the funds or accounts established hereunder (other than with
respect to funds held by the Agency) shall be retained in the respective funds and accounts to
be used for the purposes thereof; provided, however, that all interest or gain from the
investment of amounts in the 1999 Reserve Fund shall be deposited by the Trustee in the
Interest Account created under the 1999 Indenture, but only to the extent that the amount
remaining in the 1999 Reserve Fund following such deposit is equal to the Reserve Requirement
(as defined in Section 8.01).
For purposes of acquiring any investments hereunder,the Trustee may commingle funds
held by it hereunder. The Trustee may act as principal or agent in the acquisition or disposition
of any investment. The Trustee shall incur no liability for losses arising from any investments
made pursuant to this Section 8.08.
Except as otherwise provided in the next sentence, all investments of amounts
deposited in any fund or account created by or pursuant to this Article, or otherwise containing
gross proceeds of the 1999 Loan (within the meaning of section 148 of the Tax Code) shall be
acquired, disposed of, and valued (as of the date that valuation is required by the Indenture or
the Code) at Fair Market Value. Investments in funds or accounts (or portions thereof) that are
subject to a yield restriction under applicable provisions of the Tax Code shall be valued at
their present value (within the meaning of section 148 of the Tax Code).
Section 8.09. Tax Covenants.
(a) Generally. The Agency shall not take any action or permit to be taken
any action within its control which would cause or which,with the passage of time if not
cured would cause, interest on the 1999 Bonds to become includable in gross income for
federal 'income tax purposes.
(b) Private Activity Bond Limitation. The Agency shall assure that the
proceeds of the 1999 Loan are not used in a manner which would cause the 1999 Bonds
to become "private activity bonds" within the meaning of Section 141(x) of the Tax
Code or to meet the private loan financing test of Section 141(c) of the Tax Code.
(c) Federal Guarantee Prohibition. The Agency shall not take any action or
permit or suffer any action to be taken if the result of the same would be to cause the
1999 Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the
Tax Code.
(d) No Arbitrage. The Agency shall not take, or permit or suffer to be taken
by the Trustee or otherwise, any action with respect to the 1999 Loan proceeds which, if
such action had been reasonably expected to have been taken, or had been deliberately
and intentionally taken, on the Closing Date, would have caused the 1999 Bonds to be
"arbitrage bonds" within the meaning of Section 148 of the Tax Code.
(e) Rebate Requirement. The Agency shall take any and all actions necessary
to assure compliance with Section 148(f) of the Tax Code, relating to the rebate of
excess investment earnings relating to the 1999 Bonds, if any, to the federal government,
so to ensure that interest on the 1999 Bonds does not become includable in gross income
for federal income tax purposes. Without limiting the generality of the foregoing
sentence, the Agency shall provide complete and accurate records relating to the
investment of the proceeds of the 1999 Loan to the Authority, and shall pay or cause to
be paid, in accordance with Section 5.08 of the 1999 Indenture, all excess investment
earnings which are attributable to the proceeds of the 1999 Loan.
8
(f) Additional Restrictions. In addition to complying with the foregoing
provisions of this Section, the Agency shall not tape any action or permit or suffer any
action to be taken if the result of the same would be to cause interest on the 1999 Bonds
to be includable in gross income of the owners thereof for federal income tax purposes.
Section. 8.10. Continuing Disclosure. The Agency hereby covenants and agrees that it
will comply with and carry out all of the obligations on its part contained in the Continuing
Disclosure Certificate. Notwithstanding any other provision of this Agreement, failure of the
Agency (or any other party thereto) to comply with the Continuing Disclosure Certificate shall
not be considered a default hereunder;however,any Participating Underwriter or any holder or
beneficial owner of the 1999 Bonds may take such actions as may be necessary and
appropriate, including seeking mandate or specific performance by court order, to cause the
Agency (or any other party thereto) to comply with its obligations under the Continuing
Disclosure Certificate.
Section 8.11. Payment of Authority Expenses. The Agency hereby agrees to pay any
and all expenses of the Authority incurred in connection with the administration of the Bonds,
the 1995 Bonds and the 2999 Bonds, including but not limited to trustee fees and expenses.
Section 8.12. Benefits Limited to Parties. Nothing in this Article VIII, expressed or
implied,is intended to give to any person other than the Agency,the Authority, the Trustee and
the Owners of the 1999 Bonds any right, remedy, claim under or by reason of this Article VIII.
Any covenants, stipulations, promises or agreements in this Article VIII contained by and on
behalf of the Agency shall be for the sole and exclusive benefit of the Authority,the Trustee and
the Owners of the 1999 Bonds.
Section 8.13. Further Assurances. The Agency will adopt, make, execute and deliver
any and all such further resolutions, instruments and assurances as may be reasonably
necessary or proper to carry out the intention or to facilitate the performance of this Loan
Agreement, and for the better assuring and confirming unto the Owners of the 1999 Bonds the
rights and benefits provided in this Loan Agreement.
Section 8.14. Effect of this Article VIII. Except as in this Article VIII expressly
provided or except to the extent inconsistent with any provision of this Article VIII, the 1999
Loan shall be deemed to be Rarity Debt under and within the meaning of Section 1.01, and
every term and condition contained in the foregoing provisions of this Loan Agreement shall
apply to the 1999 Loan with full force and effect, with such omissions, variations and
modifications thereof as may be appropriate to make the same conform to this Article VIII.
Notwithstanding the foregoing, however, the 1999 Loan shall not be deemed to be Parity Debt
under and within the meaning of Section 1.02 for purposes of the following provisions of this
Loan Agreement: (a) the provisions of Article II shall not apply to the 1999 Loan (except that
the 1999 Loan shall be treated as Parity Debt for purposes of Sections 2.09 and 2.20); (b) the
provisions of Sections 4.11 and 4.12, inclusive, shall not apply to the 1999 Loan; and (c) the
provisions of Article VII shall not apply to the 1999 Loan.
SECTION 2. Amendment of 1992 Loan A reg errient. The 2992 Loan Agreement is
hereby further amended as set forth in this Section 2:
(A) Section 2.01 of the 1992 Loan Agreement is hereby amended by adding
thereto the following new defined terms and, in the case of the following defined terms
which are currently contained in Section 1.01, by amending such terms to read in their
entirety as follows:
9
111999 Bonds" means the Authority's 1999 Tax Allocation Revenue Bonds
(Pleasant Hill, ?North Richmond, Bay Point, Rodeo and Oakley Redevelopment
Project Areas),issued and outstanding under the 1999 Indenture..
"1999 Indenture" means the Indenture of Trust dated as of March 1,
1999, by and between the Authority and U.S. Bank Trust National Association,
as trustee, as originally executed or as it may from time to time be supplemented,
modified or amended.
"1999 Loan" means the loan made by the Authority to the Agency in the
aggregate principal amount of$ pursuant to Section 8.02.
"1999 Reserve Fund" means the fund by that name established and held
by the Trustee under Section 8.07.
"First "u ply ement" means the First Supplement to West Pittsburg Loan
Agreement, dated as of December 1, 1995, by and between the Agency and the
Authority.
"Loa�reement" means this Loan Agreement by and between the
Agency and the Authority, as amended and supplemented by the First
Supplement and the Second Supplement, and as it may from time to time be
further amended,modified or supplemented.
"Parity" means (a) the 1995 Loan, (b) the 1999 Loan, (c) any other
loans, bonds, notes, advances or indebtedness payable from Tax Revenues on a
parity with the Loan, the 1995 Loan and the 1999 Loan to finance the
Redevelopment Project, issued or incurred pursuant to and in accordance with
the first paragraph of Section 2.09, or (d) any Refunding Debt issued or incurred
in accordance with the provisions of the second paragraph of Section 2.09.
"Parity Debt Instrument" means the First Supplement, the Second
Supplement,and any other resolution,indenture of trust,trust agreement or other
instrument authorizing the issuance of any Parity Debt.
"Reserve Requirement" means, as of any date of calculation, an amount
equal to'Maximum Annual Debt Service taking into account only amounts due on
the Loan (and not amounts due on any Parity Debt).
„Second Supplement" means the Second Supplement to West Pittsburg
Loan Agreement, dated as of March 1, 1999,by and between the Agency and the
Authority.
"Trustee" means U.S. Bank Trust National Association, as successor
trustee under the Indenture and the 1995 Indenture, and as trustee under the
1999 Indenture.
(B) Clauses (a) and (b) of Section 3.03 of the 1992 Loan Agreement are
hereby amended to read in their entirety as follows:
(a) Interest and Principal Deposits. No later than the fifteenth (15th)
calendar day of the month preceding each date on which the principal of or
interest on the Loan, the 1995 Loan, the 1999 Loan or any other Parity Debt
shall become due and payable, including but not limited to the principal amount
10
of the Loan, the 1995 Loan or the 1999 Loan to be prepaid hereunder together
with any prepayment premium thereon, the Agency shall withdraw from. the
Special Fund and transfer to the Trustee an amount which, together with the
amounts then held on deposit in the Interest Accounts, the Principal Accounts
and the Revenue Funds established under the Indenture, the 1995 Indenture and
the 1999 Indenture, is equal to the aggregate amount of such principal, interest
and prepayment premium. The Trustee shall deposit amounts so remitted
representing payments on the Loan under the Indenture, amounts so remitted
representing payments on the 1995 Loan under the 1995 Indenture, and amounts
so remitted representing payments on the 1999 Loan under the 1999 Indentures
(b) Reserve Fund Deposits. In the event that (i) the Trustee shall notify
the Agency pursuant to Section 2.08(b), 7.07(b) or 8.07(b) that the amount on
deposit in the Reserve Fund, the 1995 Reserve Fund or the 1999 Reserve Fund is
less than the applicable Reserve Requirement, or (ii) any Qualified Reserve Fund
Credit Investment shall expire and not be replaced in accordance with Section
2.08(d), ,7.07(b) or 8.07(b), as applicable, or (iii) the amount in any reserve
account described in Section 2.09(c)(iii) shall be less than Maximum Annual Debt
Service on the related Parity Debt, the Agency shall immediately withdraw from
the Special Fund and transfer (x) in the case of any event described in the
preceding clause (i) or (ii), to the Trustee for deposit in the Reserve Fund, the
1995 Reserve Fund or the 1999 Reserve Fund, as applicable, an amount of money
necessary to maintain the applicable Reserve Requirement in the respective
Reserve Fund, the 1995 Reserve Fund or the 1999 Reserve Fund, or(y) in the case
of an event described in the preceding clause (iii), to the trustee for such Parity
Debt for deposit in the reserve account established for such Parity Debt an
amount of money necessary to maintain an amount equal to Maximum Annual
Debt Service on such Parity Debt in such reserve fund. No such transfer and
deposit need be made to the Reserve Fund, the 1995 Reserve Fund or the 1999
Reserve Fund so long as there shall be on deposit therein a sum at least equal to
the applicable Reserve Requirement.
Notwithstanding the foregoing, no such transfer and deposit need to be
made upon the occurrence of a default or failure to pay under any Qualified
Reserve Fund Credit Instrument, or any termination thereof prior to its stated
termination date, except as a result of a default by the Agency.
(C) Clause Second of Section 5.02 of the 1992 Loan Agreement is hereby
amended to read in its entirety as follows:
5econd, to the payment of the whole amount of interest on and principal
of the Loan, the 1995 Loan, the 1999 Loan and any Parity Debt then due and
unpaid, with interest on overdue installments of principal and interest to the
extent permitted by law at the net effective rate of interest then borne by the
Outstanding Bonds (with respect to amounts due on the Loan), the Outstanding
1995 Bonds (with respect to amounts due on the 1995 Loan), or the Outstanding
1999 Bonds (with respect to amounts due on the 1999 Loan); provided, however,
that in the event such amounts shall be insufficient to pay in full the full amount
of such interest and principal, then such amounts shall be applied in the
following order of priority:
(a) first,to the payment of all installments of interest on the Loan, the
1995 Loan, the 1999 Loan and any Parity Debt then due and unpaid, on a
11
pro rata basis in the event that the available amounts are insufficient to pay
all such interest in full,
(b) second, to the payment of all installments of principal of the Loan,
the 1995 Loan, the 1999 Loan and any Parity Debt then due and payable, on
a pro rata basis in the event that the available amounts are installments of
principal in full, and
(c) third, to the payment of interest on overdue installments of
principal and interest, on a pro rata basis in the event that the available
amounts are insufficient to pay all such interest in full.
(D) Clauses (a), (b) and (c) of Section 6.03 of the 1992 Loan Agreement are
hereby amended to read in their entirety as follows:
(a) by well and truly paying or causing to be paid the principal of and
interest and prepayment premiums (if any) on the Loan, the 1995 Loan, the 1999
Loan and any Parity Debt or such portion thereof, as and when the same become
due and payable;
(b) by 'irrevocably depositing with the Trustee, in trust, at or before
maturity, cash in an amount which, together with the available amounts then on
deposit in any of the funds and accounts established pursuant to the Indenture
or this Loan Agreement, in the opinion or report of Bond Counsel or an
Independent Accountant is fully sufficient to pay all principal of and interest
and prepayment premiums (if any) on the Loan, the 1995 Loan, the 1999 Loan
and any Parity Debt or such portion thereof; or
(c) by irrevocably depositing with the Trustee or any other fiduciary, in
trust,non-callable Federal Securities or Permitted Investments described in clause
(b) of the definition thereof in such amount as Bond Counsel or an Independent
Accountant shall determine will, together with the interest to accrue thereon and
available moneys then on deposit in the funds and accounts established
pursuant to the Indenture or this Loan Agreement, be fully sufficient to pay and
discharge the indebtedness on the Loan, the 1995 Loan, the 1399 Loan and any
Parity Debt or such portion thereof (including all principal, interest and
prepayment premiums)at or before maturity;
SECTION, 3. Partial Invalidity. If any Section, paragraph, sentence, clause or phrase of
this Second Supplement shall for any reason be held illegal, invalid or unenforceable, such
holding shall not affect the validity of the remaining portions of this Second Supplement. The
Agency hereby declares that it would have adopted this Second Supplement and each and
every other Section, paragraph, sentence, clause or phrase hereof and authorized the 1999 Loan
irrespective of the fact that any one or more Sections,paragraphs, sentences,clauses,or phrases
of this First Supplement may be held illegal,invalid or unenforceable.
SECTION 4. Execution of Counterparts. This Second Supplement may be executed in
any number of counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall together constitute but one and the same instrument.
SECTION 5. Governing Law. This Second Supplement shall be construed and governed
in accordance with the laws of the State of California.
12
IN WITNESS WHEREOF, the CONTRA COSTA COUNTY REDEVELOPMENT
AGENCY and the COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY have
caused this Second Supplement to be signed by their respective officers all a5 of the day and
year first above written.
CONTRA COSTA COUNTY
REDEVELOPMENT AGENCY
By
Deputy Director-Redevelopment
COUNTY OF CONTRA COSTA PUBLIC
FINANCING AUTHORITY
By
Deputy Executive Director
03012.01:4077
13
Quint&`Chinu igLLQ' 10/23/98
2/2/99
OAKLEY LOAN AGREEMENT
by and between the
CONTRA COSTA COUNTY REDEVELOPMENT AGENCY
and the
COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY
Dated as of March 1,1999
Relating to:
County of Contra Costa Public Financing Authority
1999 Tax Allocation Revenue Bonds
(Pleasant Hill BART,North Richmond,Bay Point,Rodeo
and Oakley Redevelopment Project Areas)
03012.01:J4086
- -
`
^
TABLE OF CONTENTS
ARTICLE
DEFINITIONS
Section1.01. Defiuidona..................................................................................—...... ...............2
Section 1.02. Rules mfCooatouctku.............................................................................................5
ARTICLE 11
THE LOAN; APPLICATION QFLOAN PROCEEDS; PARITY DEBT
Section2.01. Authorization.......................................................................................................6
Section 2.02. Disbursement and Application of Loan Proceeds......................................... ..........6
Section2.03. Repayment ................................................................... ..........................6
Section 2.04. Optional Prepayment of the Lomo'........................................................................7
Section2.05. [Beaccved]............................................................................................................7
Section 2.06. Redevelopment Fund .................................... ......................................... 7
Section 2.07. Low and Moderate Housing Account.............................................................. 7
Section2.08. Reserve Fund.......................................................................................................7
Section2.09. Parity Debt...'........... .......................................................................................0
Section 2.10. Issuance ofSubordinate Debt..............................................................................1U
Section 2.11. Validity of Loan..............................................—.'......... '..................'....10
ARTICLE III
PLEDGE AND APPLICATION OF TAX REVENUES
Section 3.01. Pledge of Tax Revenues......................................................................................11
Section 3.02. Special ---------------------11
Section 3.03. Transfer ofTax Revenues From Fund.......... ..................... ........ ......—lI
Section l04. Investment of Moneys; Valuation ofInvestments................. ................................12
ARTICLE IV
OTHER COVENANTS OFTHE AGENCY
Section 4.01. Punctual Payment; Extension of Pmyznents--........ ........................... ................l8
Section 4.02. Limitation on Additional Indebtedness;Junior Pledge in Favor of Certain Other
LoanAgreements............................................................. .......................l3
Section4.03. Payment of Claims................................................. ...........................................14
Section 4.04. Books and Accounts;Financial Statements--------------------l4
Section 4.05. Protection of Security andRights................. ........ ................. ........ ...................15
Section 4.06. and {)f-hs Charges... ............................................ ...............15
Section 4.07Taxation u6LeasedProperty,..................................... ...... ..................................15
Section 4.08. Disposition of Property........................... ...................................................... ....I5
Section 4.09. Maintenance ofTax Revenues..... .......................... --...... ...............................l5
Section 4.10. Indemnification........... ...... ......................................... ....16
Section 4.11. Tax Covenants................... .......... ....... ............................................ ...— ..... ..16
Section 4.12 Payment ofReb tu6leAoz000t ..................................... — .......... ....................16
Section 4.13. Redevelopment of ProjectArea...... .............. ...... ......................... --- ..........17
Section 4.14, Continuing Disclosure............................ ...................................... ....................17
Secti-ooz4.15. Annual Review ofTax Revenues...........................— ................................ .......�17
Section 4.l6. Payment of Authority Expenses.......... ........... .............................. — .......... ....17
Section 4.17. Further Assurances................. ....................--............................... ................17
,
,
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
Section 5.01. Events ofDefault................--........ .................................................................I8
Section 5.02. Application ufFoude[puuDefaul -----------------------IO
Section5.03. NoWaiver..................... ....................... ...... — ........ ...... ...... ...... ...... — ...I9
Section 5.04. AFees and Expenses........................ ........................19
Section 5.05. Remedies Not Exclusive.............................................. .....................................19
ARTICLE VI
MISCELLANEOUS
Section 6.01. Benefits Limited to Parties....................................... ............................. .............2O
Section 6.02. Successor iaDeemed Included ioAll References toPredecessor............................2O
Section 6.03. Discharge ofLoan Agreement............................................................ ................2O
Section 6.04. Amendment ----------------......................................................21
Section 6.05. Waiver ofPersonal Liability......................................... ................ ......... ...........2l
Section 6.06. Payment onBuaineaeDaya--------.�:—.----.—_-----_----..21
Section6.07. Notices.............. —..........---.... ........................................................................2I
Section 6.08. Partial ----------------------------_—.22
Section 6.09. Article and Section Headings and References........................ ..................... ........22
Section 6.10. Execution ofCounterparts ...... .................... .................................................--Z2
Section6.11. Governing Law....................................................................... ......... ................22
Section6.12. Assignment.............................................. .................— ................... ...............22
EXHIBIT A-SCHEDULE OF LOAN PAYMENTS
��
OAKLEY LOAN AGREEMENT
THIS OAKLEY LOAN AGREEMENT is made and entered into as of March 1, 1999, by
and between the CONTRA COSTA COUNTY REDEVELOPMENT AGENCY, a public body,
corporate and politic, duly organized and existing under the laws of the State of California (the
"Agency") and the COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY, a
joint powers authority organized and existing under the laws of the State of California (the
"Authority")
WITNESSETH:
WHEREAS, the Agency is a public body, corporate and politic, duly established and
authorized to transact business and exercise powers under and pursuant to the provisions of
Part 1 of Division 24 of the Health and Safety Code of the State of California (the
"Redevelopment Law"), and has the power under Section 33601 of the Redevelopment Law to
borrow money for any of its corporate purposes; and
WHEREAS, a redevelopment plan for Oakley Redevelopment Project Area (the
"Redevelopment Project"), in the County of Contra Costa, has been adopted in compliance
with all requirements of the Redevelopment Law;and
WHEREAS, the Agency has requested the Authority to make a loan (the "Loan") to the
Agency hereunder for the purpose of providing funds for the refinancing of an outstanding loan
of the Agency and to assist in the financing of redevelopment activities within and of benefit to
the Redevelopment Project,including,without limitation,financing for the purpose of increasing
and improving within the County of Contra Costa the supply of low and moderate income
housing available at affordable housing cost, all as provided herein, and the Agency hereby
finds and determines that there will be significant public benefits accruing from such borrowing,
consisting of demonstrable savings in effective interest rates and financing costs associated with
the issuance of bonds as described herein; and
WHEREAS, concurrent with the execution and delivery of this Loan Agreement the
Authority has issued its $ aggregate principal amount of County of Contra Costa
Public Financing Authority 1999 Tax Allocation Revenue Bonds (Pleasant Hill BART, North
Richmond, Bay Point, Rodeo and Oakley Redevelopment Project Areas) for the purpose of,
among other things,making the Loan hereunder;and
WHEREAS, in order to establish and declare the terms and conditions upon which the
Loan is to be made and secured, the Agency and the Authority wish to enter into this Loan
Agreement;and
WHEREAS, all acts and proceedings required by law necessary to make this Loan
Agreement, when executed by the Agency and the Authority, the valid, binding and legal
obligations of the Agency and the Authority, and to constitute this Loan Agreement a valid and
binding agreement for the uses and purposes herein set forth in accordance with its terms,have
been done and taken, and the execution and delivery of this Loan Agreement have been in all
respects duly authorized.
NOW,THEREFORE,in consideration of the premises and the mutual agreements herein
contained, the parties hereto do hereby agree as follows:
ARTICLE I
DRF`LNTI IOly S
Section 1.01. Definitions. Unless the context clearly otherwise requires or unless
otherwise defined herein, the capitalized terms in this Loan Agreement shall have the respective
meanings which such terms are given in Section 1.01 of the Indenture. In addition,the following
terms defined in this Section 1.01 shall, for all purposes of this Loan Agreement, have the
respective meanings herein specified.
"Additional Revenues" means, as the date of calculation, the sum of the following: the
amount of Tax Revenues which, as shown in the Report of an Independent Redevelopment
Consultant, are estimated to be receivable by the Agency within the Fiscal Year following the
Fiscal Year in which such calculation is made as a result of increases in the assessed valuation
of taxable property in the Project Area due to transfer of ownership or any other interest in real
property which has been recorded but which is not then reflected on the tax rolls.
For purposes of this definition, the term "increases in the assessed valuation" means the
amount by which the assessed valuation of taxable property in the Project Area is estimated to
increase above the assessed valuation of taxable property in the Project Area (as evidenced in
the written records of the County) as of the date on which such calculation is made.
"Business Inventory Tax Subvention" means all amounts payable by the State to the
Agency under and pursuant to the provisions of Chapter 1.5 of Part 1 of Division 4 of Title 2
(commencing with Section 16110) of the Government Code of the State.
"Event of Default" means any of the events described in Section 5.01.
":Fiscal Year"means any twelve-month period extending from July 1 in one calendar year
to June 30 of the succeeding calendar year, both dates inclusive, or any other twelve-month
period selected and designated by the Agency as its official fiscal year period pursuant to a
Written Certificate of the Agency filed with the Trustee.
"Independent Redevelopment Consultant" means any consultant or firm of such
consultants appointed by or acceptable to the Agency, and who, or each of whom: (a) is
judged by the Agency to have experience in matters relating to the collection of Tax Revenues or
otherwise with respect to the financing of redevelopment projects; (b) is in fact independent
and not under the domination of the Agency; (c) does not have any substantial interest, direct
or indirect, with the Agency, other than as original purchaser of the Bonds or any Parity Debt;
and (d) is not connected with the Agency as an officer or employee of the Agency, but who
may be regularly retained to make reports to the Agency.
"Indenture" means the Indenture of Trust dated as of March 1, 1999, by and between
the Authority and the Trustee, authorizing the issuance of the Bonds, as originally executed or
as it may from time to time be supplemented,modified or amended.
"L an" means the loan made by the Authority to the Agency in the aggregate principal
amount of $ pursuant to Section 2.01.
"Loan Agreement" means this Loan Agreement by and between the Agency and the
Authority, as originally executed and as it may from time to time be amended, modified or
supplemented.
2
"Loan Disbursement_Fund" means the fund that name established and held by the
Trustee pursuant to Section 2.02 hereof.
"Low and Moderate Housing Account" means the account of the Agency established
pursuant to Section 2.07,constituting a part of the Low and Moderate Income Housing Fund of
the Agency established pursuant to Section 33334.3 of the Redevelopment Law.
"Maximum Annual Debt Service" means, as of the date of calculation, the largest
amount obtained by totaling, for the current or any future Bond Year,the sum of(a) the amount
of interest payable on the Loan and all outstanding Parity Debt in such Bond Year, assuming
that principal thereof is paid as scheduled and that any mandatory sinking fund payments are
made as scheduled, and (b) the amount of principal payable on the Loan and on all
outstanding Parity Debt in such Bond Year, including any principal required to be prepaid by
operation of mandatory sinking fund payments. For purposes of such calculation, there shall be
excluded a pro rata portion of each installment of principal of any Parity Debt, together with
the interest to accrue thereon, in the event and to the extent that the proceeds of such Parity
Debt are deposited in an escrow fund from which amounts may not be released to the Agency
unless the Tax Revenues for the current Fiscal Year (as evidenced in the written records of the
County), plus at the option of the Agency the Additional Revenues, at least equal one hundred
twenty percent(120%) of the amount of Maximum Annual Debt Service.
"Parity Debt" means (a) any loans, bonds, notes, advances or indebtedness payable
from Tax Revenues on a parity with the Loan to finance the Redevelopment Project, issued or
incurred pursuant to and in accordance with the first paragraph of Section 2.09, or (b) any
Refunding Debt issued or incurred in accordance with the provisions of the second paragraph of
Section 2.09.
"Parity Debt Instrument" means any resolution, indenture of trust, trust agreement or
other instrument authorizing the issuance of any Parity Debt.
"Plan Limitations" means the limitations contained or incorporated in the
Redevelopment Plan on (a) the aggregate principal amount of indebtedness payable from Tax
Revenues which may be outstanding at any time, (b) the aggregate amount of taxes which may
be divided and allocated to the Agency pursuant to the Redevelopment Plan, and (c) the period
of time for establishing or repaying indebtedness payable from Tax Revenues.
"Project Area" means the area of the Redevelopment Project as described in the
Redevelopment Plan.
"Redevelopment Fund" means the fund established and held by the Agency pursuant to
Section 2.06.
"Redevelopment Law" means the Community Redevelopment Law of the State,
constituting Part i of Division 24 of the Health and Safety Code of the State, and the acts
amendatory thereof and supplemental thereto.
"Redevelooment Plan" means the Redevelopment Plan for Redevelopment Project Area,
approved by Ordinance No. 89-89 enacted by the Board of Supervisors of the County on
December 21, 1989, together with any amendments thereof at any time duty authorized
pursuant to the Redevelopment Law.
"Redevelopment Proi2ctt" means the undertaking of the Agency pursuant to the
Redevelopment Plan and the Redevelopment Law for the redevelopment of the Project Area.
3
"Refunding Debt" means any loan, bond, note, advance or indebtedness payable from
Tax Revenues on a parity with the Loan; provided that the proceeds thereof are used to refund
all or a portion of the Loan or any Parity Debt (and to pay costs of issuance of and fund a
reserve fund for such Refunding Debt), and the debt service due on such Refunding Debt in any
Bond Year in which the Loan or such Parity Debt is Outstanding is not greater than the debt
service due on the portion of the Loan or any Parity Debt refunded with the proceeds of such
Refunding Debt.
"Reimbursement Agreements" means, collectively, any agreements entered into by the
Agency which are permitted under Section 4.09, under which the Agency is obligated to pay or
cause to be paid to other entities amounts which would otherwise be treated as Tax Revenues.
"Report" means a document in writing signed by an Independent Redevelopment
Consultant and including: (a) a statement that the person or firm making or giving such Report
has read the pertinent provisions of this Loan Agreement to which such Report relates; (b) a
brief statement as to the nature and scope of the examination or investigation upon which the
Report is based; and (e) a statement that, in the opinion of such person or firm, sufficient
examination or investigation was made as is necessary to enable said consultant to express an
informed opinion with respect to the subject matter referred to in the Report.
"Reserve Fund" means the fund established and held hereunder by the Trustee pursuant
to Section 2.08.
"Reserve Requirement"means,as of any calculation date, an amount equal to Maximum
Annual Debt Service. The Reserve Requirement as of the Closing Date is$
"Special Fund" means the fund established and held hereunder by the Agency pursuant
to Section 3.02.
"Subordinate Debt" means any loans, advances or indebtedness issued or incurred by
the Agency in accordance with the requirements of Section 2.10, which are either: (a) payable
from,but not secured by a pledge of or lien upon, the Tax Revenues; or (b) secured by a pledge
of or lien upon the Tax Revenues which is subordinate to the pledge of and lien upon the Tax
Revenues hereunder for the security of the Loan and any Parity Debt.
"Tax Revenues" means all taxes annually allocated to the Agency with respect to the
Project Area following the Closing Date pursuant to Article 6 of Chapter 6 (commencing with
Section 33670) of the Redevelopment Law and Section 16 of Article XVI of the Constitution of
the State and as provided in the Redevelopment Plan, including (a) all payments, subventions
and reimbursements (if any) to the Agency specifically attributable to ad valorem taxes lost by
reason of tax exemptions and tax rate limitations, and (b) all amounts of such taxes required to
be deposited into the Low and Moderate Income Housing Fund of the Agency in any Fiscal Year
pursuant to Section 33334.3 of the Redevelopment Law, to the extent permitted to be applied
to the payment of principal, interest and premium (if any) with respect to the Loan and any
Parity Debt; but excluding (w) amounts of such taxes required to be deposited into the Low
and Moderate Income Housing Fund of the Agency in any Fiscal Year pursuant to Section
33334.3 of the Redevelopment Law, to the extent not permitted to be applied to the payment of
principal, interest and premium (if any) with respect to the Loan and/or any Parity Debt, (y)
all amounts of such taxes required to be paid by the Agency pursuant to the Reimbursement
Agreements, and (z) the Business Inventory Tax Subvention.
"Trustee" means U.S. Bank Trust:National Association, a banking association organized
and existing under the laws of the United States of America, and its successors and assigns
acting as trustee under the Indenture.
4
„Written Request of the Agency„ or"Written Certificate of the Agency” means a request
or certificate, in writing, signed by the Chair, Vice Chair, Executive Director, Assistant
Executive Director, Deputy Executive Director,Deputy Director-Redevelopment or Treasurer
of the Agency, or by any other officer of the Agency duly authorized by the Agency for that
purpose.
Section 1.012. Rules of Construction. All references herein to "Articles," "Sections" and
other subdivisions are to the corresponding Articles, Sections or subdivisions of this Loan
Agreement, and the words "herein," "hereof," "hereunder" and other words of similar import
refer to this Loan Agreement as a whole and not to any particular Article, Section or
subdivision hereof.
5
ARTICLE II
THE LOAN;APPLICATION OF LOAN PROCEEDS;PARITY DEBT
Section 2.01. Authorization. The Authority hereby agrees to lend to the Agency, from a
portion of the proceeds of sale of the Bonds deposited in the Loan Fund established under the
Indenture, the aggregate principal amount of Million Thousand Dollars
($ } under and subject to the terms of this Loan Agreement, the Bond Law and the
Redevelopment Law. This Loan Agreement constitutes a continuing agreement with the
Authority to secure the full and final payment of the Loan, subject to the covenants,
agreements,provisions and conditions herein contained.
Section 2.02. Disbursement and Application of Loan Proceeds.
On the Closing Date of the Bonds, the Authority shall cause to be deposited into the
Loan Disbursement Fund, which fund is hereby created, the amount of $ which shall
be held by the Trustee and which shall be disbursed as follows:
(a) The Trustee shall deposit the amount of $ in the Costs of
Issuance Fund.
(b) The Trustee shall transfer the amount of $ to, or upon the
order of,the Agency for deposit in the Redevelopment Fund.
(c) The Trustee shall deposit the amount of $ in the Reserve
Fund.
(d) The Trustee shall transfer the amount of $ to, or upon the
order of,the Agency for deposit in the Low and Moderate Housing Account.
(e) The Trustee shall transfer the amount of $ to U.S. Bank Trust
National Association as escrow bank (the "Escrow Bank"), to be used to prepay
in full a loan made by the Authority to the Agency in 1992, and otherwise by the
Escrow Bank as provided in Section 4 of the Escrow Deposit and Trust
Agreement, dated as of March 1, 1999, among the Agency, the Authority and the
Escrow Bank.
[(f) The Trustee shall deposit the amount of $ in the Interest Account,
which amount represents capitalized interest on the Loan and shall be credited against
amounts otherwise due on the Loan on August 1, 1999.]
In addition to the foregoing, (i) the Trustee shall be deemed to have distributed to the
Agency on the Closing Date a pro rata share of the underwriter's discount and original issue
discount on the Bonds in the aggregate amount of$ ; and (ii) the Agency shall cause to
be transferred on the Closing Irate to the Redevelopment Fund and the Low and Moderate
Housing Account,respectively, all amounts on deposit in the Redevelopment Fund and the Low
and Moderate Housing Account established under the Oakley Loan Agreement, dated as of
May 1, 1992,between the Agency and the Authority.
Section 2.03. Repayment of Loan. The Agency shall repay the principal of the Loan in
installments on August 1 in each of the years and in the amounts, and shall pay interest on the
unpaid principal balance of the Loan on each Interest Payment Date and in the amounts, as set
forth in Exhibit A attached hereto and by this reference incorporated herein. Any installment of
6
principal or interest which is not paid when due shall continue to accrue interest at the net
effective rate of interest then borne by the Loan from and including the date on which such
principal or interest is payable to but not including the date of actual payment.
In the event the unpaid principal installments of the Loan shall be prepaid in whole or in
part pursuant to Section 2.04, or in the event the Bonds shall be redeemed pursuant to Section
2.02 of the Indenture,the schedule of principal installments set forth in Exhibit A hereto shall be
reduced on a pro rata basis in integral multiples of $5,000 corresponding to the principal
amount of the Bonds redeemed pursuant to the Indenture.
Principal of and interest on the Loan shall be payable by the Agency to the Trustee, as
assignee of the Authority under the Indenture, in immediately available funds which constitute
lawful money of the United States of America. Payment of such principal and interest shall be
secured, and amounts for the payment thereof shall be deposited with the Trustee at the times,
as set forth in Article III. Notwithstanding the foregoing provisions of this Section 2.03, in lieu
of payment of any installment of principal of the Loan coming due and payable on August 1 in
any year in which Term Bonds are subject to mandatory sinking fund redemption under the
Indenture,the Agency shall have the right to purchase any of such Term Bonds in an amount not
exceeding the amount thereof which is subject to mandatory sinking fund redemption on such
August 1, and tender such Term Bonds to the Trustee for cancellation, provided that such
tender shall be made before the preceding June 15.
Section 2.04. Optional Prepayment of the Loan. The Agency shall have the right to
prepay the unpaid principal installments of the Loan, in whole or in part in any integral
multiple of $5,000, on any date on which the Bonds are subject to optional redemption
.pursuant to Section 2.02(a) of the Indenture,by depositing with the Trustee in the Revenue Fund
an amount sufficient to redeem a like aggregate principal amount of Bonds pursuant to Section
2.02(x) of the Indenture, together with the amount of accrued interest and premium (if any)
required to be paid upon such redemption. The Authority agrees that upon payment by the
Agency to the Trustee of such amount, the Authority shall take or cause to be taken any and all
steps required under the Indenture to redeem such Outstanding Bonds on the redemption date
designated pursuant to a Written Request of the Agency filed with the Authority and the
Trustee; provided, however, that such date shall be a date of redemption of Bonds for which
notice has been timely given pursuant to the Indenture.
Section 2.05. [Reserved].
Section 2.06. Redevelopment Fund. There is hereby established a separate fund to be
known as the "Oakley Redevelopment Project Redevelopment Fund", which shall be held and
maintained by the Agency. The moneys in the Redevelopment Fund shall be used solely in the
manner provided by the Redevelopment Law and the Redevelopment Plan to provide financing
for the Redevelopment Project.
Section 2.07. Low and Moderate Housing Account. There is hereby established a
separate fund to be known as the "Oakley Redevelopment Project Low and Moderate Housing
Account", which shall be held and maintained by the Agency. The moneys in the Low and
Moderate Housing Account shall be used solely in the manner and for the purposes as provided
by Sections 33334.2 and 333.34.3 of the Redevelopment Law.
Section 2.08. Reserve Fund.
(a) Establishment of Reserve Fund. There is hereby established a separate fund to be
known as the "Oakley Redevelopment Project 1999 Reserve Fund", which shall be held by the
Trustee in trust for the benefit of the Authority and the Owners of the Bonds. Amounts initially
7
deposited in the Reserve Fund shall be derived from the proceeds of the Loan deposited therein
pursuant to Section 2.02 (c). The amount on deposit in the Reserve Fund shall be maintained at
the Reserve Requirement at all times prior to the payment of the Loan in full pursuant to Section
6.03, except to the extent required for the purposes set forth in this Section 2.08.
(b) Transfers to Principal Account and Interest Account. In the event that the Agency
shall fail to deposit with the Trustee the full amount required to be deposited pursuant to
Section 3.03(a), the Trustee shall withdraw from the Reserve Fund and transfer to the Interest
Account and the Principal Account, in such order, the difference between the amount required
to be deposited pursuant to Section 3.03(a) and the amount actually deposited by the Agency.
In the event that the amount on deposit in the Reserve Fund shall at any time be less than the
Reserve Requirement,the Trustee shall promptly notify the Agency of the amount required to be
deposited therein to restore the balance to the Reserve Requirement, such notice to be given by
telephone,telecopy or other form of telecommunication,promptly confirmed in writing.
(c) Transfers of Excess Over Reserve Requirement. In the event that the amount on
deposit in the Reserve Fund on any Interest Payment Date exceeds the Reserve Requirement,the
Trustee shall withdraw from the Reserve Fund and deposit to the Revenue Fund all amounts in
excess of the Reserve Requirement, and credit such amounts towards the deposit then required
to be made by the Agency pursuant to Section 3.03(a).
(d) Alternative Funding of Reserve Requirement. The Agency may fund all or a portion
of the Reserve Requirement with one or more Qualified Reserve Fund Credit Instruments. Upon
deposit of any Qualified Reserve Fund Credit Instrument with the Trustee,the Trustee shall pay
to the Agency from amounts in the Reserve Fund an amount equal to the principal of the
Qualified Reserve Fund Credit Instrument.
In any case where the Reserve Fund is funded with a combination of cash and a
Qualified Reserve Fund Credit Instrument, the Trustee shall deplete all cash balances before
drawing on the Qualified Reserve Fund Credit Instrument. With regard to replenishment, any
available moneys provided by the Agency shall be used first to reinstate the Qualified Reserve
Fund Credit Instrument and second, to replenish the cash in the Reserve Fund. In the event the
Qualified Reserve Fund Credit Instrument is drawn upon, the Agency shall make payment of
interest on amounts advanced under the Qualified Reserve Fund Credit Instrument after making
any payments pursuant to subsection (a) of Section 3.03.
In the event the Qualified Reserve Fund Credit Instrument will lapse or expire, the
Agency shall draw upon such Qualified Reserve Fund Credit Instrument prior to its lapsing or
expiring, make deposits from available Tax Revenues to the Reserve Fund to increase the
amount on deposit therein to the Reserve Requirement or substitute such Qualified Reserve Fund
Credit Instrument with a Qualified Reserve Fund Credit Instrument that satisfies the
requirements of this subsection (d).
Section 2.09. Parity Debt. In addition to the Loan, the Agency may issue or incur Parity
Debt in such principal amount as shall be determined by the Agency. The Agency may issue
and deliver any Parity Debt subject to the following specific conditions which are hereby made
conditions precedent to the issuance and delivery of such Parity Debt issued under this Section
2.09:
(a) No Event of Default shall have occurred and be continuing, and the Agency
shall otherwise be in compliance with all covenants set forth in this Loan Agreement.
(b) The Tax Revenues for the then current Fiscal Year, as set forth in a Written
Certificate of the Agency, based on assessed valuation of property in the Project Area
8
as evidenced in the written records of the County, plus at the option of the Agency the
Additional Revenues, shall be at least equal to one hundred twenty percent (120%n) of
Maximum Annual Debt Service.
(c) The related Parity Debt Instrument shall provide that.
(i) interest on such Parity Debt shall be payable on February 1 and
August 1 in each year of the term of such Parity Debt except the first twelve-
month period,during which interest may be payable on any February 1 or August
1 and provided that there shall be no requirement that such Parity Debt pay
interest on a current basis; and
(ii) the principal of such Parity Debt shall not be payable on any date
other than August 1 in any year; and
(iii) money(and/or a Qualified Reserve Fund Credit Instrument) shall be
deposited in a reserve account created under such Parity Debt Instrument from
the proceeds of said Parity Debt in an amount equal to Maximum Annual Debt
Service on such Parity Debt.
(d) The proceeds of such Parity Debt may be deposited into an escrow fund
from which amounts may not be released to the Agency unless the Tax Revenues for the
most recent Fiscal Year (as evidenced in the written records of the County), plus at the
option of the Agency the Additional Revenues, at least equals one hundred twenty
percent (120%) of the amount of Maximum Annual Debt Service; provided, however, that
the related Parity Debt Instrument shall provide that no amounts may be released from
such escrow fund until all amounts have been released or otherwise withdrawn from any
escrow fund established with respect to other Parity Debt which has previously been
issued.
(e) The issuance of such Parity Debt shall not cause the Agency to exceed any
applicable Plan Limitations. Without limiting the generality of the foregoing,the Agency
shall not issue any Parity Debt in the event and to the extent that either (a) the amount
of Maximum Annual Debt Service in any Bond Year following such issuance exceeds the
aggregate amount of Tax Revenues which are eligible under the Redevelopment Plan to
be allocated to the Agency in any Fiscal Year,or(b) the aggregate amount of debt service
on all outstanding obligations of the Agency, including such Parity Debt, exceeds the
aggregate amount of Tax Revenues which are eligible under the Redevelopment Plan to
be allocated and paid to the Agency during the period while such outstanding
obligations remain outstanding, or (c) the aggregate principal amount of all outstanding
obligations of the Agency,including such Parity Debt,exceeds any applicable limit in the
Redevelopment Plan on the aggregate principal amount of indebtedness which the
Agency is permitted to have outstanding at any one time.
(f) The Agency shall deliver to the Trustee a Written Certificate of the Agency
certifying that the conditions precedent to the issuance of such Parity Debt set forth in
subsections (a), (b), (c), (d) and (e) above have been satisfied.
Notwithstanding the foregoing, the Agency may issue or incur Refunding Debt in such
principal amount as shall be determined by the Agency so long as the conditions set forth in
subsections (a), (c) and (e) above are met, and the Agency delivers to the Trustee a Written
Certificate of the Agency certifying that such conditions precedent to the issuance of such
Refunding Debt set forth in subsections (a), (c) and (e) above have been met and such Refunding
Debt is otherwise in accordance with the definition of Refunding Debt herein.
9
Section 2.10. Issuance of Subordinate Debt. In addition to the Loan► and any Parity
Debt, from time to time the Agency may issue or incur Subordinate Debt in such principal
amount as shall be determined by the Agency, provided that the issuance of such Subordinate
Debt shall not cause the Agency to exceed any applicable Plan Limitations.
Section 2.11. Validity of Loan. The validity of the Loan shall not be dependent upon
the completion of the Redevelopment Project or upon the performance by any person of its
obligation with respect to the Redevelopment Project.
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ARTICLE III
PLEDGE AND APPLICATION OF TAX REVENUES
Section 3.01. Pledge of Tax Revenues. The Loan and all Parity Debt shall be equally
secured by a first pledge of and lien on all of the Tax Revenues and all of the moneys on deposit
in the Special Fund, without preference or priority for series, issue, number, dated date, sale
date, date of execution or date of delivery. Except for the Tax Revenues and other funds
pledged hereunder,no funds or properties of the Agency shall be pledged to, or otherwise liable
for, the payment of principal of or interest or prepayment premium(if any)on the Loan.
Section 3.02, Special Fund; Deposit of Tax Revenues. There is hereby established a
special fund to be known as the "Oakley Redevelopment Project 1999 Special Fund", which
shall be held by the Agency as a separate fund apart from all other funds and accounts of the
Agency. The Agency shall deposit all Tax Revenues in the Special Fund promptly upon the
receipt thereof, until such time (if any) during such Bond Year as the amounts on deposit in the
Special Fund equal the aggregate amounts required to be transferred to the Trustee pursuant to
Section 3.03. Except as may be otherwise provided in any Parity Debt Instruments, any Tax
Revenues received during such Bond Year in excess of such amounts shall be released from the
pledge and lien hereunder and may be used for any lawful purposes of the Agency.
Prior to the payment in full of the principal of and interest and prepayment premium (if
any) on the Loan and all Parity Debt and the payment in full of all other amounts payable
hereunder and under any Parity Debt Instruments,the Agency shall not have any beneficial right
or interest in the moneys on deposit in the Special Fund, except only as provided in this Loan
Agreement and in any Parity Debt Instruments, and such moneys shall be used and applied as
set forth herein and in any Parity Debt Instruments.
Section 3.03. Transfer of Tax Revenues From Special Fund. In addition to the transfers
required to be made pursuant to any Parity Debt Instruments,the Agency shall withdraw from
the Special Fund and transfer to the Trustee the following amounts at the following times and in
the following order of priority:
(a) Interest and Principal Deposits. No later than the fifteenth (15th) calendar
day of the month preceding each date on which the principal of or interest on the Loan
or any Parity Debt shall become due and payable, including but not limited to the
principal amount of the Loan to be prepaid hereunder together with any prepayment
premium thereon, the Agency shall withdraw from the Special Fund and transfer to the
Trustee an amount which, together with the amounts then held on deposit in the Interest
Account, the Principal Account and the Revenue Fund,is equal to the aggregate amount
of such principal,interest and prepayment premium.
(b) Reserve Fund Deposits. In the event that (i) the Trustee shall notify the
Agency pursuant to Section 2.08(b) that the amount on deposit in the Reserve Fund is
less than the Reserve Requirement, or (ii) any Qualified Reserve Fund Credit Investment
shall expire and not be replaced in accordance with Section 2.08(d), or (iii) the amount
in any reserve account described in Section 2.09(c)(iii) shall be less than Maximum
Annual Debt Service on the related Parity Debt,the Agency shall immediately withdraw
from the Special Fund and transfer (x) in the case of any event described in the
preceding clause (i) or (ii), to the Trustee for deposit in the Reserve Fund an amount of
money necessary to maintain the Reserve Requirement in the Reserve Fund,or (y) in the
case of an event described in the preceding clause (iii), to the trustee for such Parity
Debt for deposit in the reserve account established for such Parity Debt an amount of
money necessary to maintain an amount equal to Maximum Annual Debt Service on
11
such Parity Debt in such reserve fund. No such transfer and deposit need be made to
the Reserve Fund so long as there shall be on deposit therein a sum at least equal to the
Reserve Requirement.
Notwithstanding the foregoing, no such transfer and deposit need to be made
upon the occurrence of a default or failure to pay under any Qualified Reserve Fund
Credit Instrument, or any termination thereof prior to its stated termination date,except
as a result of a default by the Agency.
(c) Surplus. Except as may be otherwise provided in any Parity Debt
Instruments, the Agency shall not be obligated to deposit in the Special Fund in any
Bond Year an amount of Tax Revenues which, together with other available amounts in
the Special Fund, exceeds the amounts required in such Bond Year pursuant to Section
3.03 (a) and (b)r and all Tax Revenues which are received by the Agency during any
Bond Year in excess of the amounts required to be deposited in the Special Fund in such
Bond Year shall be released from the pledge thereof and lien thereon which is established
pursuant hereto. In the event that for any reason whatsoever any amounts shall remain
on deposit in the Special Fund on any August 2 after making all of the transfers
theretofore required to be made pursuant to the preceding clauses (a) and (b) and
pursuant to any Parity Debt Instruments,the Agency may withdraw such amounts from
the Special Fund, to be used for any lawful purposes of the Agency, including but not
limited to the payment of any Subordinate Debt, or the payment of any amounts due
and owing to the United States of America pursuant to Section 4.12.
Section 3.04. Investment of Moneys, Valuation of Investments. All moneys in the
Redevelopment Fund, the Low and Moderate Housing Account and the Special Fund shall be
invested by the Agency in any investments authorized for the investment of Agency funds under
the laws of the State. Obligations purchased as an investment of moneys in any fund or
account established hereunder shall be credited to and deemed to be part of such fund or
account. The Agency may commingle any amounts in any of the funds and accounts held
hereunder with any other amounts held by the Agency for purposes of making any investment,
provided that the Agency shall maintain separate accounting procedures for the investment of
all funds and accounts held hereunder. All interest, profits and other income received from the
investment of moneys in any fund or account established hereunder shall be deposited in such
fund or account. Notwithstanding anything to the contrary contained in this paragraph, an
amount of interest received with respect to any investment equal to the amount of accrued
interest, if any, paid as part of the purchase price of such investment shall be credited to the
fund from which such accrued interest was paid.
For the purpose of determining the amount in any fund or account established
hereunder, the value of investments credited to such fund shall be calculated at the lesser of(a)
the par amount thereof or (b) the cost thereof, excluding accrued interest and brokerage
commissions, if any; except that any investments having a maturity of more than five (5) years
from the date of investment shall be valued at least annually at the market value thereof.
The Agency covenants that all investments of amounts deposited in any fund or account
created by or pursuant to this Loan Agreement, or otherwise containing gross proceeds of the
Bonds (within the meaning of section 148 of the Code) shall be acquired, disposed of, and
valued (as of the date that valuation is required by this Indenture or the Code) at Fair Market
Value. Investments in funds or accounts (or portions thereof) that are subject to a yield
restriction under applicable provisions of the Code shall be valued by the Agency at their
present value(within the meaning of section 148 of the Code).
12
ARTICLE IV
OTHER COVENANTS OF THE AGENCY
Section 4.01. Punctual Payment; Extension of Payments. The Agency will punctually
pay or cause to be paid the principal of and interest and prepayment premium (if any) on the
Loan in strict conformity with the terms of this Loan Agreement, and it will faithfully observe
and perform all of the conditions, covenants and requirements of this Loan Agreement. The
Agency shall not directly or indirectly extend or assent to the extension of the maturity of any
installment of principal of or interest or premium (if any) on the Loan, and in case the principal
of or interest or premium (if any) on the Loan or the time of payment of any such claims
therefor shall be extended, suchprincipal, interest, premium or claims for interest shall not be
entitled, in case of any Event of Default hereunder, to the benefits of this Loan Agreement
except for payment of all amounts which shall not have been so extended.
Section 4.02. Limitation on Additional Indebtedness;Junior Pledge in Favor of Certain
Other Loan Agreements. (a) The Agency hereby covenants that it shall not issue any bonds,
notes or other obligations,enter into any agreement or otherwise incur any indebtedness,which
is in any case payable from all or any part of the Tax Revenues, excepting only the Loan, any
Parity Debt and any Subordinate :Debt, and any obligations entered into pursuant to Section
4.09.
(b) The Agency hereby determines that the low and moderate income housing
components of the redevelopment projects to be financed pursuant to the "Other Loan
Agreements" hereinafter in this subsection referred to are of benefit to the Project Area and that
Tax Revenues shall be applied to meet any deficiency which may exist in the amounts required
to be transferred to the Trustee from one or more of the "Other Reserve Accounts", as
hereinafter defined, such reserve funds being established, respectively, by each of the several
loan agreements, each dated as of March 1, 1999 (May 1, 1992 with respect to the West
Pittsburg and North Richmond project areas), by and between the Agency and the Trustee,
relating respectively to the North Richmond, Rodeo and West Pittsburg redevelopment project
areas of the Agency (the "Other Project Areas"), (such loan agreements being referred to herein
as the "Other Loan Agreements" and such reserve funds being referred to herein as the "Other
Reserve Accounts"):
(i) in the event there shall, at any time or from time to time, be insufficient
moneys in one or more of the Other Reserve Accounts to transfer to the Trustee when
due the full amount required to be so transferred to the Trustee in accordance with the
applicable provisions of the Other Loan Agreements, the Agency shall cause Tax
Revenues in the amount of such insufficiency to be paid to the Trustee;provided however,
that the obligation to pay such insufficiency shall be apportioned pro rata (to the extent
there are then allocable Tax Revenues available) among the Project Area and such of the
Other Project Areas as do not then have an insufficient reserve account and, provided
further, that the aggregate obligation of the Project Area and the Other Project Areas to
pay such insufficiencies shall not exceed the aggregate debt service on the portion of the
loans made under the Other Loan Agreements and this Loan Agreement attributable to
the proceeds of such loans deposited in the Low and Moderate Income Housing Account
of the Agency pursuant to this Loan Agreement and the Other Loan Agreements (plus a
portion of such loans attributable to reserves and financing costs);
(ii) in the event of any such insufficiency in the Other Reserve Accounts, the
Trustee shall promptly notify the Agency, and upon receipt of any such notice, the
13
Agency shall promptly withdraw from the Special Fund and transfer to the Trustee an
amount equal to the portion of such insufficiency apportioned to the Project Area,
(iii) if there shall then not be sufficient moneys in the Special Fund to transfer an
amount equal to the portion of such insufficiency apportioned to the Project Area, the
Agency shall have an obligation to continue making transfers to the Trustee as moneys
become available in the Special Fund until an amount equal to such portion has been
transferred to the Trustee;
(iv) such obligation to pay Tax Revenues shall be an indebtedness of the Agency
within the meaning of Section 33670 of the Redevelopment Law;
(v) such obligation to pay Tax Revenues shall be, in all respects, junior and.
subordinate to the obligation of the Agency to apply Tax Revenues to the payment of
the Loan and any Parity Debt, in accordance with the further provisions of this Loan
Agreement,but such obligation to pay Tax Revenues shall be superior to all ether future
obligations payable from Tax Revenues;and
(vi) in the event there shall, at any time or from time to time, be insufficient
moneys in the Reserve Fund to transfer to the Trustee when due the full amount required
to be so transferred to the Trustee in accordance with the applicable provisions of this
Loan Agreement and such insufficiency shall be paid pursuant to one or more of the
Other Loan Agreements,the Agency shall cause the first available surplus Tax Revenues
in the amount of such insufficiency to be returned to the applicable special funds of the
Other Loan Agreements.
If appropriate determinations have been made by the Agency that any portion of a
redevelopment project to be financed with the proceeds of Parity Debt is of benefit to the Other
Project Areas, then the Agency may provide in the applicable Parity Debt Instrument that
provisions of like force and effect to the provisions of this Section 4.02 apply with respect to
any reserve fund established for such Parity Debt and such previsions of such Parity Debt
Instrument shall be deemed to be on a parity with the provisions of this Section 4.02.
Section 4.03. Payment of Claims. The Agency will pay and discharge, or cause to be
paid and discharged, any and all lawful claims for labor, materials or supplies which, if
unpaid,might become a lien or charge upon the Tax Revenues or any part thereof, or upon any
funds in the hands of the Trustee, or which might impair the security of the Loan. Nothing
herein contained shall require the Agency to make any such payment so long as the Agency in
good faith shall contest the validity of said claims.
Section 4.04. Beaks and Accounts; Financial Statements. The Agency will keep, or
cause to be kept, proper books of record and accounts, separate from all other records and
accounts of the Agency and the County, in which complete and correct entries shall be made of
all transactions relating to the Redevelopment Project, the Tax Revenues, the Special Fund, the
Low and Moderate blousing Account and the Redevelopment Fund. Such books of record and
accounts shall at all times during business hours be subject, upon prior written request, to the
reasonable inspection of the Authority, the Trustee and the Owners of not less than ten percent
(10%) in aggregate principal amount of the Bonds then Outstanding, or their representatives
authorized in writing.
The Agency will cause to be prepared and filed with the Trustee annually, within one
hundred and eighty (180) days after the close of each Fiscal Year so long as any of the Bonds
are Outstanding, complete audited financial statements with respect to such Fiscal Year
showing the Tax Revenues, all disbursements from the Special Fund, the Redevelopment Fund
14
and the Low and Moderate Housing Account and the financial condition of the Redevelopment
Project,including the balances in all funds and accounts relating to the Redevelopment Project,
as of the end of such Fiscal Year. The Agency will furnish a copy of such statements, upon
reasonable request, to any Bond Owner.
Section 4.05. Protection of Security and Rights. The Agency will preserve and protect
the security of the Loam and the rights of the Trustee and the Bond Owners with respect to the
Loan. From and after the Closing bate, the Lean shall be incontestable by the Agency. The
Loan and the provisions of this Loan Agreement are and will be the legal, valid and binding
special obligations of the Agency in accordance with their terms, and the Agency shall at all
times, to the extent permitted by law, defend, preserve and protect all the rights of the Trustee
and the Bond Owners under this Loan Agreement against all claims and demands of all persons
whomsoever.
Section 4.06. Payments of 'faxes and Other Charges. The Agency will pay and
discharge, or cause to be paid and discharged, all taxes,service charges, assessments and other
governmental charges which may hereafter be lawfully imposed upon the Agency or the
properties then owned by the Agency in the Project Area, when the same shall become due.
Nothing herein contained shall require the Agency to make any such payment so long as the
Agency in good faith shall contest the validity of said taxes, assessments or charges. The
Agency will duly observe and comply with all valid requirements of any governmental authority
relative to the Redevelopment Project or any part thereof.
Section 4.07. Taxation of Leased Property. All ad valorem property taxes derived by
the Agency pursuant to Section 33673 of the Redevelopment Law with respect to the lease of
property for redevelopment shall be treated as Tax Revenues for all purposes of this Loan
Agreement.
Section 4.08. Disposition of Property. The Agency will .not participate in the
disposition of any land or real property in the Project Area to anyone which will result in such
property becoming exempt from taxation because of public ownership or use or otherwise
(except property dedicated for public right-of-way and except property planned for public
ownership or use by the Redevelopment Plan in effect on the date of this Loan Agreement) so
that such disposition shall, when taken together with other such dispositions, aggregate more
than ten percent (10%) of the land area in the Project Area unless such disposition is permitted
as hereinafter provided in this Section 4.08. If the Agency proposes to participate in such a
disposition,it shall thereupon appoint an Independent Redevelopment Consultant to report on
the effect of said proposed disposition. If the Report of the Independent Redevelopment
Consultant concludes that the Tax Revenues following such disposition will be at least equal to
one hundred twenty percent(120%) of Maximum Annual Debt Service on the Loan,the Agency
may thereafter make such disposition. If said Deport concludes that, following said proposed
disposition, the Tax Revenues will not be at least equal to one hundred twenty percent (120%)
Oil Maximum Annual Debt Service on the Loan, the Agency shall not participate in said
proposed disposition.
Section 4.09. Maintenance of Tax Revenues. The Agency shall comply with all
requirements of the Redevelopment Law to insure the allocation and payment to it of the Tax
Revenues, including without limitation the timely filing; of any necessary statements of
indebtedness with appropriate officials of the County and (in the case of supplemental
revenues and other amounts payable by the State) appropriate officials of the State. The
Agency shall not amend the Redevelopment Plan or any of the Reimbursement Agreements, or
enter into any agreement with the County or any other governmental or private entity, which
would have the effect of reducing the amount of Tax Revenues otherwise available to the
Agency for payment of the Loan, unless the Agency shall first obtain the Report of an
15
Independent Redevelopment Consultant stating that the Tax Revenues for the then current
Fiscal Year (calculated on the assumption that such reduction of Tax Revenues was in effect
throughout such Fiscal Year),plus at the option of the Agency the Additional Revenues,shall be
at least equal to one hundred twenty percent (120%) of Maximum Annual Debt Service on the
Loan and all Parity Debt.
Section 4.10. Payment of Expenses; Indemnification. The Agency shall pay to the
Trustee from time to time all compensation for all services rendered under this Moan Agreement
and the Indenture, including but not limited to all reasonable expenses, charges, legal and
consulting fees and other disbursements and those of its attorneys, agents and employees,
incurred in and about the performance of its powers and duties hereunder and thereunder. The
Trustee shall have a first lien on the funds held by it under the Indenture and hereunder to
secure the payment to the Trustee of all fees, costs and expenses, including reasonable
compensation to its experts, attorneys and counsel incurred in declaring an Event of Default
and in exercising the rights and remedies set forth in Article V.
The Agency further covenants and agrees to indemnify and save the Trustee and its
officers, directors, agents and employees, harmless against any losses, expenses and liabilities
which it may incur arising out of or in connection with the exercise and performance of its
powers and duties hereunder, including the costs and expenses of defending against any claim
of liability, but excluding any and all losses, expenses and liabilities which are due to the
negligence or intentional misconduct of the'Trustee, its officers, directors, agents or employees.
The obligations of the Agency under this paragraph shall survive the resignation or removal of
the Trustee under the Indenture, this Loan Agreement and payment of the Loan and the
discharge of this Loan Agreement.
Section 4.11. Tax Covenants.
(a) nrivatQ RumnessTs Li i7r to=i sn. The Agency shall assure that the proceeds of the
Bonds are not used in a manner which would cause the Bonds to become "private activity
bonds" within the meaning of Section 141(a) of the Tax Code.
(b) Private Loan Limitation. The Agency shall assure that no more than five percent
(5%) of the net proceeds of the Bonds are used, directly or indirectly, to make or finance a loan
(other than loans constituting nonpurpose obligations as defined in the Tax Code or constituting
assessments) to persons other than state or local government units.
(c) Federal Guarantee Prohibition. The Agency shall not take any action or permit or
suffer any action to be taken if the result of the same would be to cause the Bonds to be
"federally guaranteed"within the meaning of Section 149(b) of the Tax Code.
(d) No Arbitragg. The Agency shall not take, or permit or suffer to be taken by the
Trustee or otherwise, any action with respect to the Bond proceeds which, if such action had
been reasonably expected to have been taken, or had been deliberately and intentionally taken,
on the Closing Date of the Bonds,would have caused the Bonds to be "arbitrage bonds"within
the meaning of Section 148(a) of the Tax Code.
Section 4.12. Payment of Rebatable Amounts. The Agency agrees to furnish all
information to, and cooperate fully with, the Authority, the Trustee and their respective
officers, employees, agents and attorneys, in order to assure compliance with the provisions of
Section 5.08 of the Indenture. In the event that the Authority shall determine, pursuant to
Section 5.08 of the Indenture, that any amounts are due and payable to the United States of
America thereunder and that neither the Authority nor the Trustee has on deposit an amount of
available moneys (excluding moneys on deposit in the funds and accounts established for the
16
payment of the principal of or interest or redemption premium, if any, on the Bonds) to make
such payment, the Authority shall promptly notify the Agency of such fact. Upon receipt of
any such notice, the Agency shall promptly pay to the Trustee from available Tax Revenues or
any ether source of legally available funds, for deposit into the Rebate Account, the amounts
determined by the Authority to be due and payable to the United States of America as a result
of the investment of amounts on deposit in any fund or account established hereunder, together
with all other amounts due and payable to the United States of America.
Section 4.13, Redevelopment of Project Area. The Agency shall ensure that all activities
undertaken by the Agency with respect to the redevelopment of the Project Area are undertaken
and accomplished in conformity with all applicable requirements of the Redevelopment Plan
and the Redevelopment Law.
Section 4.14. Continuing Disclosure. The Agency hereby covenants and agrees that it
will comply with and carry out all of the provisions of the Continuing Disclosure Certificate.
Notwithstanding any other provision of this Loan Agreement, failure of the Agency to comply
with the Continuing Disclosure Certificate shall not be considered an Event of Default,however
any Participating Underwriter or any holder or beneficial owner of the Bonds may take such
actions as may be necessary and appropriate, including seeking specific performance by court
order,to cause the Agency to comply with its obligations under this Section 4.14.
Section 4.15. Annual Review of Tax Revenues. The Agency annually shall cause to be
prepared a report which sets forth the total amount of Tax Revenues remaining available to be
received by the Agency under the Redevelopment Plan cumulative tax increment limitations, as
well as future cumulative debt service on the Loan and other obligations of the Agency payable
from Tax Revenues (including the any Subordinate Debt). The Agency will not accept Tax
Revenues greater than the aggregate annual debt service payable by the Agency in any year on
all its obligations if such acceptance will cause the amount remaining under the tax increment
limit to fall below remaining cumulative debt service, except for the purpose of depositing such
revenues in escrow for future debt service or to prepay the Loan.
Section 4.16. Payment of Authority Expenses. The Agency hereby agrees to pay any
and all expenses of the Authority incurred in connection with the administration of the Bonds,
including but not limited to trustee fees and expenses.
Section 4.17. Further Assurances. The Agency will adopt, make, execute and deliver
any and all such further resolutions, instruments and assurances as may be reasonably
necessary or proper to carry out the intention or to facilitate the performance of this Loan
Agreement and for the better assuring and confirming unto the Trustee, the Authority and the
Owners of the Bands of the rights and benefits provided in this Loan Agreement.
17
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
Section 5.01. Events of Default. The following events shall constitute Events of Default
hereunder:
(a) Failure by the Agency to pay the principal of or interest or prepayment
premium (if any) on the Loan or any parity Debt when and as the same shall become
due and payable.
(b) Failure by the Agency to observe and perform any of the covenants,
agreements or conditions on its part contained in this Loan Agreement, other than as
referred to in the preceding clause (a), for a period of sixty(60) days after written notice
specifying such failure and requesting that it be remedied has been given to the Agency
by the Trustee; provided, however, that if in the reasonable opinion of the Agency the
failure stated in such notice can be corrected, but not within such sixty (60) day period,
such failure shall not constitute an Event of Default if corrective action is instituted by
the Agency within such sixty (60) day period and thereafter is diligently pursued until
such failure is corrected.
(c) The filing by the Agency of a petition or answer seeking reorganization or
arrangement under the federal bankruptcy laws or any other applicable law of the
United States of America, or if a court of competent jurisdiction shall approve a
petition, filed with or without the consent of the Agency, seeking reorganization under
the federal bankruptcy laws or any other applicable law of the United States of
America, 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 Agency or of the
whole or any substantial part of its property.
If an Event of Default has occurred and is continuing, the Trustee may, and at the
written direction of the Owners of a majority in aggregate principal amount of the Outstanding
Bonds the Trustee shall, subject to the provisions of the Indenture, exercise any remedies
available to the Trustee in law or at equity. Immediately upon becoming aware of the
occurrence of an Event of Default, the Trustee shall give notice of such Event of Default to the
Agency by telephone, telecopier or other telecommunication device, promptly confirmed in
writing.
Section 5.02. Application of Funds Upon Default. All amounts received by the Trustee
pursuant to any right given or action taken by the Trustee under the provisions of Article V of
this Loan Agreement,shall be applied by the Trustee in the following order:
First, to the payment of the fees, costs and expenses of the Trustee in declaring
such Event of Default and in carrying out the provisions of this Article V, including
reasonable compensation to its agents, attorneys and counsel, and
Seco. , to the payment of the whole amount of interest on and principal of the
Loan then due and unpaid, with interest on overdue installments of principal and
interest to the extent permitted by law at the net effective rate of interest then borne by
the Outstanding Bonds; provided, however, that in the event such amounts shall be
insufficient to pay in full the full amount of such interest and principal, then such
amounts shall be applied in the following order of priority:
18
(a) ,first, to the payment of all installments of interest on the Loan then
due and unpaid, on a pro rata basis in the event that the available amounts are
insufficient to pay all such interest in full,
(b) second, to the payment of all installments of principal of the Loan
then due and payable, on a pro rata basis in the event that the available amounts
are installments of principal in full, and
(c) third, to the payment of interest on overdue installments of principal
and interest, on a pro rata basis in the event that the available amounts are
insufficient to pay all such interest in full.
Section 5.03. No Waiver. Nothing in this Article V or in any other provision of this
Loan Agreement, shall affect or impair the obligation of the Agency, which is absolute and
unconditional, to pay from the Tax Revenues and other amounts pledged hereunder, the
principal of and interest and premium (if any) on the Loan to the Trustee when due, as herein.
provided,or affect or impair the right of action,which is also absolute and unconditional,of the
Trustee to institute suit to enforce such payment by virtue of the contract embodied in this Loan
Agreement.
A waiver of any default by the Trustee shall not affect any subsequent default or impair
any rights or remedies on the subsequent default. No delay or omission of the Trustee to
exercise any right or power accruing upon any default shall impair any such right or power or
shall be construed to be a waiver of any such default or an acquiescence therein, and every
power and remedy conferred upon the Trustee by the Redevelopment Law or by this Article V
may be enforced and exercised from time to time and as often as shall be deemed expedient by
the Trustee.
If a suit, action or proceeding to enforce any right or exercise any remedy shall be
abandoned or determined adversely to the Trustee,the Agency and the Trustee shall be restored
to their former positions, rights and remedies as if such suit, action or proceeding had not been
brought or taken.
Section 5.04. Agreement to Pay Attorneys'Fees and Expenses. In the event either party
to this Agreement should default under any of the provisions hereof and the nondefaulting
party or the Trustee should employ attorneys or incur other expenses for the collection of
moneys or the enforcement or performance or observance of any obligation or agreement on the
part of the defaulting party herein contained,the defaulting party agrees that it will on demand
therefor pay to the nondefaulting party or the Trustee, as the case may be, the reasonable fees
of such attorneys and such other expenses so incurred.
Section 5.05. Remedies Not Exclusive. No remedy herein conferred upon or reserved to
the Trustee is intended to be exclusive of any other remedy. Every 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 Redevelopment Law or any ether law.
19
ARTICLE VI
MISCELLANEOUS
Section 6.01, Benefits Limited to Parties. Nothing in this Loan Agreement,expressed or
implied,is intended to give to any person other than the Agency,the Trustee and the Authority,
any right, remedy or claim under or by reason of this Loan Agreement. All covenants,
stipulations,promises or agreements in this Loam Agreement contained by and on behalf of the
Agency shall be for the sole and exclusive benefit of the Authority and of the Trustee acting as
trustee for the benefit of the Owners of the Bonds.
Section 6.02. Successor is Deemed Included in All References to Predecessor. Whenever
in this Loan Agreement either the Agency, the Authority or the Trustee is named or referred to,
such reference shall be deemed to include the successors or assigns thereof, and all the
covenants and agreements in this Loan Agreement contained by or on behalf of the Agency,the
Authority or the Trustee shall bind and inure to the benefit of the respective successors and
assigns thereof whether so expressed or not.
Section 6.03. Discharge of Loan Agreement. If the Agency shall pay and discharge the
indebtedness on the Loan or any portion thereof in any one or more of the following ways:
(a) by well and truly paying or causing to be paid the principal of and interest
and prepayment premiums(if any)on the Lean or such portion thereof,as and when the
sante become due and payable;
(b) by irrevocably depositing with the Trustee, in trust, at or before maturity,
cash in an amount which, together with the available amounts then on deposit in any of
the funds and accounts established pursuant to the Indenture or this Loan Agreement,in
the opinion or report of Bond Counsel or an Independent Accountant is fully sufficient
to pay all principal of and interest and prepayment premiums (if any) on the Loan or
such portion thereof;or
(c) by irrevocably depositing with the Trustee or any other fiduciary, in trust,
non-callable Defeasance Obligations in such amount as Bond Counsel or an Independent
Accountant shall determine will, together with the interest to accrue thereon and
available moneys then on deposit in the funds and accounts established pursuant to the
Indenture or this Loan Agreement, be fully sufficient to pay and discharge the
indebtedness on the Loan or such portion thereof (including all principal, interest and
prepayment premiums)at or before maturity;
then,at the election of the Agency but only if all other amounts then due and payable hereunder
shall have been paid or provision for their payment made, the pledge of and lien upon the Tax
Revenues and other funds provided for in this Loan Agreement and all other obligations of the
Trustee, the Authority and the Agency under this Loan Agreement with respect to the Loan or
such portion thereof shall cease and terminate, except only the obligation of the Agency to pay
or cause to be paid to the Trustee, from the amounts so deposited with the Trustee or such
other fiduciary, all sums due with respect to the Lean or such portion thereof, and to pay all
expenses and costs of the Trustee when and as such expenses and costs become due and
payable. Notice of such election shall be filed with the Authority and the Trustee. Any funds
thereafter held by the Trustee hereunder,which are not required for said purpose, shall be paid
over to the Agency.
20
Notwithstanding the foregoing provisions of this Section 6.03, this Loan Agreement and
the obligations of the Agency hereunder shall not be discharged under this Section 6.03 unless
and to the extent that the Bonds shall have been discharged in whole or in part pursuant to the
provisions of Section 9.03 of the Indenture.
Section 6.04. Amendment. This Loan Agreement may be amended by the parties
hereto,but only under the circumstances set forth in, and in accordance with, the previsions of
Section 5.09 of the Indenture. The Authority and the Trustee covenant that the Indenture shall
not be amended, nor shall the Authority agree or consent to any amendment of the Indenture,
without the prior written consent of the Agency (except that such consent shall not be required
in the event that an Event of Default shall have occurred and be continuing hereunder).
Section 6.05. Waiver of Personal Liability. No member,officer, agent or employee of the
Agency shall be individually or personally liable for the payment of the principal of or interest
on the Lean; but nothing herein contained shall relieve any such member, officer, agent or
employee from the performance of any official duty provided by law.
Section 6.06. Payment on Business Days. Whenever in this Loan Agreement any
amount is required to be paid on a day which is not a Business Day, such payment shall be
required to be made on the Business Day immediately following such day, provided that
interest on such payment shall not accrue from and after such day.
Section 6.07. Notices. Any notice,request,complaint,demand or other communication
under this Loan Agreement shall be given by first class mail or personal delivery to the party
entitled thereto at its address set forth below, or by telecopy or other form of
telecommunication, at its number set forth below. Notice shall be effective either (a) upon
transmission by telecopy or other form of telecommunication, (b) 48 hours after deposit in the
United States mail, postage prepaid, or (c) in the case of personal delivery to any person,upon
actual. receipt. The Authority, the Agency or the Trustee may, by written notice to the other
parties, from time to time modify the address or number to which communications are to be
given hereunder.
If to the Authority: County of Contra Costa
Public Financing Authority
County Administration Building
c/o Community Development Department
651 Pine Street,4th Floor,North Wing
Martinez, California 94553
Attention: Deputy Executive Director
Telecopier: (925) 646-1309
If to the Agency: Contra Costa County Redevelopment Agency
County Administration Building
c/o Community Development Department
651 Pine Street,4th Floor,North Wing
Martinez, California 94553
Attention: Deputy Director_Redevelopment
Telecopier: (925) 646-1309
If to the Trustee: U.S. Bank Trust National Association
One California Street, 4th Floor
San Francisco, California 94111
Attention: Corporate Trust Services
Telecopier: (415) 273-4588
21
Section 6.08. Partial Invalidity. If any Section,paragraph, sentence, clause or phrase of
this Loan Agreement shall for any reason be held illegal, invalid or unenforceable, such holding
shall not affect the validity of the remaining portions of this Loan Agreement. The Agency
hereby declares that it would have adopted this Loan Agreement and each and every other
Section, paragraph, sentence, clause or phrase hereof and authorized the Loan irrespective of
the fact that any one or more Sections, paragraphs, sentences, clauses, or phrases of this Loan
Agreement may be held illegal,invalid or unenforceable.
Section 6.019. Article and Section Headings and References. The headings or titles of the
several Articles and Sections hereof, and any table of contents appended to copies hereof, shall
be solely for convenience of reference and shall not affect the meaning,construction or effect of
this Agreement. All references herein to "Articles," „Sections" and other subdivisions are to the
corresponding Articles, Sections or subdivisions of this Agreement; the words "herein,"
"hereof," "hereby," "hereunder" and other words of similar import refer to this Agreement as a
whole and not to any particular Article, Section or subdivision hereof; and words of the
masculine gender shall mean and include words of the feminine and neuter genders.
Section 6.10. Execution of Counterparts. This Agreement may be executed in any
number of counterparts,each of which shall for all purposes be deemed to be an original and all
of which shall together constitute but one and the same instrument.
Section 6.11. Governing Law. This Agreement shall be construed and governed in
accordance with the laws of the State.
Section 6.12. Assignment. Pursuant to Section 4.01 of the Indenture, the Authority has
assigned its right, title and interest (but not its duties or obligations) in this Agreement (other
than its rights under Section 4.10 and 5.04 hereof) to the Trustee, for the benefit of the Owners
from time to time of the Bonds. The Agency hereby consents to such assignment.
The Agency shall not assign its interest in this Agreement without the prior written
consent of the Authority and the Trustee.
The assignment of this Agreement to the Trustee is solely in its capacity as Trustee under
the Indenture and the duties, powers and liabilities of the Trustee in acting hereunder shall be
subject to the provisions of the Indenture,including,without limitation,the provisions of Article
SII thereof.
22
IN WITNESS WHEREOF, the CONTRA COSTA COUNTY REDEVELOPMENT
AGENCY and the COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY have
caused this Loan Agreement to be signed by their respective officers all as of the day and year
first above written.
CONTRA COSTA COUNTY
REDEVELOPMENT AGENCY
By
Deputy Executive Director
COUNTY OF CONTRA COSTA PUBLIC
FINANCING AUTHORITY
By
Deputy Director-Redevelopment
03012.0'14086
23
EXHIBIT A
SCHEDULE OF LOAN PAYMENTS
Principal Interest Aggregate
Loan Payment Date Installment Installment Loan Pa
Ymer►t
A-1
Quint&Thim_m4g LIS' 10/23/98
2/2/99
RODEO LOAN AGREEMENT
by and between the
CONTRA COSTA COUNTY REDEVELOPMENT AGENC`V'
and the
COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY
Dated as of March 1,1999
Relating to.
County of Contra Costa Public Financing Authority
1999 Tax Allocation Revenue Bonds
(Pleasant Hill BART,North Richmond,Bay Point,Rodeo
and Oakley Redevelopment Project Areas)
03012.01:)4087
_
`
`
TABLE OF CONTENTS
AdRTICLEI
DEFINITIONS
Section 1.01. l}efinitimny..'....................................'..... 2
Section 1.02. Rules ofConstruction.......................................................................�.�....�..........�..5
ARTICLE 11
THE LOAN; APPLICATION OF LOAN PROCEEDS; PARITY DEBT
Section 2.01. Authorization.................................................................. ........ 6
Section 2.02. Disbursement and Application ofLoan Proceeds.... ....—..........—..........................
6ectimo2.03. ---------------6
Section 2.04. Optional Prepayment of the Loan-........................................... ............................7
Section2.05. [Beaerve6]........................ .............................................................................. ....7
Section 2.O6. Redevelopment Fund ___________________________.7
Section 2.07. Lovvand��oderateHousing Account............................ ...................................—,7
Section2.08. Reserve Fund................. ........ ................................................._----.---7
Section2.09. ..................................... .............. .......................................8
Section 228. Issuance ufSubordinate Debt................ ....................................... .............---9
Section2.11. Validity ofLoan.....................................................................................................9
ARTICLE III
PLEDGE AND APPLICATION OF TAX REVENUES
Section 3.01. Pledge of Tax Revenues......................................................................................1O
Section 3.02. Special Fund;Deposit nfIaxBevenoea...............................................................18
Section 3.03. Transfer ofTax Revenues From Special Fund..................................... ................1O
Section 3.04. Investment of Moneys, Valuation of Investments...................................................I1
ARTICLE IV
OTHER COVENANTS OpTHE AGENCY
Section 4.01. Punctual Payment; Extension of Payments................... ............. .—................ ...l2
Section 4.02. Limitation uoAdditional Indebtedness;junior Pledge ioFavor ofCertain Other
LoanAgreements...............................................................................................12
Section � . cayunz,t o/Claims......................................................................—....................I3
Section 4.04. Books and Accounts;Financial Statements...........................................................13
Section 4.05. Protection nfSecurity andRights.........................................................................14
Section 4.06. Payments of Taxes and Other C6az0ea..�.............................................................14
Section 4.C7 Taxation ofLeased Property......................................... ......................................l4
Section 4O0
. . Disposition .........................-- ........................... ........... ...............14
Section 4.09. Maintenance ofTax Revenues.......... ............................ ...... .... .......................I4
Section 4.20. Indemnification................................................... .............l5
Section 4.I1. Tax Covenants..................................................... —~-------_----.—I5
Section 4]2. Payment of Rebatable Am ....... ^..............................--...... ..................—15
Section 4.13.
Redevelopment Project Area....................... .'...............—.............,.....l6
Section 4.14. Continuing ..............l6
Section 4.15. Annual Review mfTax Revenues........................................................................16
Section 4.16. Payment ofAuthority Expenses..........................................................................16
Section 4.17. Further Assurances ............................................................................................16
'�
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
Section 5.01. Events of Default......... ............ ............................-.................... ........... .....17
Section 5.02. Application of Funds Upon Default.....................................................................17
Section5.03. No Waiver........ ................................................... ............. .....--...—..............18
Section 5.04. Agreement to Pay Attorneys' Fees and Expenses.................................................18
Section 5.05. Remedies Not Exclusive.......... ...........................................................................18
ARTICLE VI
MISCELLANEOUS
Section 6.01. Benefits Limited to Parties........................................................... .......................19
Section 6.02. Successor is Deemed Included in All References to Predecessor........... ............ ...19
Section 6.03. Discharge of Loan Agreement............................................................. ...............19
Section6.04. Amendment.......................................................................................................20
Section 6.05. Waiver of Personal Liability......... ....... ........................................... .............. ...20
Section 6.06. Payment on Business Days............................................... ........... .......... .......20
Section6.07. Notices..................................................... ........................................ ................20
Section 6.08. Partial Invalidity........... ...... ............... ................................................. ......21
Section 6.09. Article and Section Headings and References.......................................................21
Section 6.10. Execution of Counterparts.... ........................... ................................. ............--21
Section6.11. Governing Law.................. ............. .................................................. ........ ......21
Section6.12. Assignment........... ..............................................................—.........................21
EXHIBIT A-SCHEDULE OF LOAN PAYMENTS
RODEO LOAN AGREEMENT
THIS RODEO LOAN AGREEMENT is made and entered into as of March 1, 1999, by
and between the CONTRA COSTA COUNTY REDEVELOPMENT AGENCY, a public body,
corporate and politic, duly organized and existing under the laws of the State of California (the
"Agency"), and the COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY, a
joint powers authority organized and existing under the laws of the State of California (the
"Authority").
WITNESSETH.
WHEREAS, the Agency is a public body, corporate and politic, duly established and
authorized to transact business and exercise powers under and pursuant to the provisions of
Part 1 of Division 24 of the Health and Safety Code of the State of California (the
"Redevelopment Law"), and has the power under Section 33601 of the Redevelopment Law to
borrow money for any of its corporate purposes; and
WHEREAS, a redevelopment plan for Rodeo Redevelopment Project Area (the
"Redevelopment Project"), in the County of Contra Costa, has been adopted in compliance
with all requirements of the Redevelopment Law;and
WHEREAS, the Agency has requested the Authority to make a loan (the "Loan") to the
Agency hereunder for the purpose of providing funds to assist in the financing of redevelopment
activities within and of benefit to the Redevelopment Project, including, without limitation,
financing for the purpose of increasing and improving within the County of Contra Costa the
supply of low and moderate income housing available at affordable housing cost, all as
provided herein, and the Agency hereby finds and determines that there will be significant
public benefits accruing from such borrowing, consisting of demonstrable savings in effective
interest rates and financing costs associated with the issuance of bonds as described herein;
and
WHEREAS, concurrent with the execution and delivery of this Loan Agreement the
Authority has issued its $ aggregate principal amount of County of Contra Costa
Public Financing Authority 1999 Tax Allocation Revenue Bonds (Pleasant Hill BART, North
Richmond, Bay Point, Rodeo and Oakley Redevelopment Project Areas) for the purpose of,
among other things,making the Loan hereunder; and
WHEREAS, in order to establish and declare the terms and conditions upon which the
Loan is to be made and secured, the Agency and the Authority wish to enter into this Loan
Agreement;and
WHEREAS, all acts and proceedings required by law necessary to snake this Loan
Agreement, when executed by the Agency and the Authority, the valid, binding and legal
obligations of the Agency and the Authority, and to constitute this Loan Agreement a valid and
binding agreement for the uses and purposes herein set forth in accordance with its terms,have
been done and taken, and the execution and delivery of this Loan Agreement have been in all
respects duly authorized.
NOW,THEREFORE,in consideration of the premises and the mutual agreements herein
contained,the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Unless the context clearly otherwise requires or unless
otherwise defined herein,the capitalized terms in this Loan Agreement shall have the respective
meanings which such terms are given in Section 1.01 of the Indenture. In addition,the following
terms defined in this Section 1.01 shall, for all purposes of this Loan Agreement, have the
respective meanings herein specified.
"Additional Revenues" means, as the date of calculation, the amount of Tax Revenues
which, as shown in the Report of an Independent Redevelopment Consultant, are estimated to
be receivable by the Agency within the Fiscal Year following the Fiscal Year in which such
calculation is made as a result of increases in the assessed valuation of taxable property in the
Project Area due to transfer of ownership or any other interest in real property which has been
recorded but which is not then reflected on the tax rolls.
For purposes of this definition, the term "increases in the assessed valuation" means the
amount by which the assessed valuation of taxable property in the Project Area is estimated to
increase above the assessed valuation of taxable property in the Project Area (as evidenced in
the written records of the County) as of the date on which such calculation is made.
"Business Inventor�v Tax Subvention" means all amounts payable by the State to the
Agency under and pursuant to the provisions of Chapter 1.5 of Part 1 of Division 4 of Title 2
(commencing with Section 16110) of the Government Code of the State.
"Event of Default" means any of the events described in Section 5.01.
"Fiscal Year"means any twelve-month period extending from July 1 in one calendar year
to June 30 of the succeeding calendar year, both dates inclusive, or any other twelve-month
period selected and designated by the Agency as its official fiscal year period pursuant to a
Written Certificate of the Agency filed with the Trustee.
"Independent Redeveloament Consultant" means any consultant or firm of such
consultants appointed by or acceptable to the Agency, and who, or each of whom: (a) is
judged by the Agency to have experience in matters relating to the collection of Tax Revenues or
otherwise with respect to the financing of redevelopment projects; (b) is in fact independent
and not under the domination of the Agency; (c) does not have any substantial interest, direct
or indirect, with the Agency, other than as original purchaser of the Bonds or any Parity Debt;
and (d) is not connected with the Agency as an officer or employee of the Agency, but who
may be regularly retained to make reports to the Agency.
"Indenture" means the Indenture of Trust dated as of March 1, 1999, by and between
the Authority and the Trustee, authorizing the issuance of the Bonds, as originally executed or
as it may from time to time be supplemented,modified or amended.
"Loan" means the loan made by the Authority to the Agency in the aggregate principal
amount of $ pursuant to Section 2.01.
"Loan Agreement" means this Loan Agreement by and between the Agency and the
Authority, as originally executed and as it may from time to time be amended, modified or
supplemented.
2
"Loan Disbursement Fund" means the fund that name established and held by the
Trustee pursuant to Section 2.02 hereof.
"Low and Moderate Housing Account" means the account of the Agency established
pursuant to Section 2.07, constituting a part of the Low and Moderate Income Housing Fund of
the Agency established pursuant to Section 33334.3 of the Redevelopment Law.
"Maximum Annual Debt Service" means, as of the date of calculation, the largest
amount obtained by totaling, for the current or any future Bond Year,the sum of(a) the amount
of interest payable on the Loan and all outstanding Parity Debt in such Bond Year, assuming
that principal thereof is paid as scheduled and that any mandatory sinking fund payments are
made as scheduled, and (b) the amount of principal payable on the Loan and on all
outstanding Parity Debt in such Bond Year, including any principal required to be prepaid by
operation of mandatory sinking fund payments. For purposes of such calculation,there shall be
excluded a pro rata portion of each installment of principal of any Parity Debt, together with
the interest to accrue thereon, in the event and to the extent that the proceeds of such Parity
Debt are deposited in an escrow fund from which amounts may not be released to the Agency
unless the Tax Revenues for the current Fiscal Year (as evidenced in the written records of the
County), plus at the option of the Agency the Additional Revenues, at least equal one hundred
twenty percent(120%) of the amount of Maximum Annual Debt Service.
"Parity Debt" means (a) any loans, bonds, notes, advances or indebtedness payable
from Tax Revenues on a parity with the Loan to finance the Redevelopment Project, issued or
incurred pursuant to and in accordance with the first paragraph of Section 2.09, or (b) any
Refunding Debt issued or incurred in accordance with the provisions of the second paragraph of
Section 2.09.
"Parity Debt Instrument" means any resolution, indenture of trust, trust agreement or
other instrument authorizing the issuance of any Parity Debt.
"Plan Limitations" means the limitations contained or incorporated in the
Redevelopment Plan on (a) the aggregate principal amount of indebtedness payable from Tax
Revenues which may be outstanding at any time, (b) the aggregate amount of taxes which may
be divided and allocated to the Agency pursuant to the Redevelopment Plan, and (c) the period
of time for establishing or repaying indebtedness payable from Tax Revenues.
"Project Area" means the area of the Redevelopment Project as described in the
Redevelopment Plan.
"Redevelopment Fund" means the fund established and held by the Agency pursuant to
Section 2.06.
"Redeveloi2 .ent Law" means the Community Redevelopment Law of the State,
constituting Part 1 of Division 24 of the Health and Safety Code of the State, and the acts
amendatory thereof and supplemental thereto.
"Redevelopment Plan" means the Redevelopment Plan for Redevelopment Project Area,
approved by Ordinance No. 90-50 enacted by the Board of Supervisors of the County on July
10, 1990, together with any amendments thereof at any time duly authorized pursuant to the
Redevelopment Law.
"Rgdevelopment Project" means the undertaking of the Agency pursuant to the
Redevelopment Plan and the Redevelopment Law for the redevelopment of the Project Area.
3
"Refunding,. I bt" means any loan, bond, note, advance or indebtedness payable from
Tax Revenues on a parity with the Loan; provided that the proceeds thereof are used to refund
all or a portion of the Loan or any Parity Debt (and to pay costs of issuance of and fund a
reserve fund for such Refunding Debt),and the debt service due on such Refunding Debt in any
Fond Year in which the Loan or such Parity Debt is Outstanding is not greater than the debt
service due on the portion of the Loan or any Parity Debt refunded with the proceeds of such
Refunding Debt.
"Reimbursement Agreements" means, collectively, any agreements entered into by the
Agency which are permitted under Section 4.09, under which the Agency is obligated to pay or
cause to be paid to other entities amounts which would otherwise be treated as Tax Revenues.
"Report" means a document in writing signed by an Independent Redevelopment
Consultant and including: (a) a statement that the person or firm making or giving such Report
has read the pertinent provisions of this Loan Agreement to which such Report relates; (b) a
brief statement as to the nature and scope of the examination or investigation upon which the
Report is based; and (c) a statement that, in the opinion of such person or firm, sufficient
examination or investigation was made as is necessary to enable said consultant to express an
informed opinion with respect to the subject matter referred to in the Report..
".Reserve Fund" means the fund established and held hereunder by the Trustee pursuant
to Section 2.08.
"Reserve Requirement" means, as of any calculation date, an amount equal to Maximum
Annual Debt Service. The Reserve Requirement as of the Closing Date is $
"Special Fund" means the fund established and held hereunder by the Agency pursuant
to Section 3.02.
"Subordinate Debt" means any loans, advances or indebtedness issued or incurred by
the Agency in accordance with the requirements of Section 2.10, which are either: (a) payable
from,but not secured by a pledge of or lien upon, the Tax Revenues; or (b) secured by a pledge
of or lien upon the Tax Revenues which is subordinate to the pledge of and lien upon the Tax
Revenues hereunder for the security of the Loan and any Parity Debt.
"Tax Revenues" means all taxes annually allocated to the Agency with respect to the
Project Area following the Closing Date pursuant to Article 6 of Chapter 6 (commencing with
Section 33670) of the Redevelopment Law and Section 16 of Article XVI of the Constitution of
the State and as provided in the Redevelopment Plan, including (a) all payments, subventions
and reimbursements (if any) to the Agency specifically attributable to ad valorem taxes lost by
reason of tax exemptions and tax rate limitations, and (b) all amounts of such taxes required to
be deposited into the Low and Moderate Income Housing Fund of the Agency in any Fiscal Year
pursuant to Section 33334.3 of the Redevelopment Law, to the extent permitted to be applied
to the payment of principal, interest and premium (if any) with respect to the Loan and any
Parity Debt; but excluding (w) amounts of such taxes required to be deposited into the Low
and Moderate Income Housing Fund of the Agency in any Fiscal Year pursuant to Section
33334.3 of the Redevelopment Law, to the extent not permitted to be applied to the payment of
principal, interest and premium (if any) with respect to the Loan and/or any Parity Debt, (y)
all amounts of such taxes required to be paid by the Agency pursuant to the Reimbursement
Agreements, and(z)the Business Inventory Tax Subvention.
"Trustee" means U.S. Bank Trust National Association, a banking association organized
and existing under the laws of the United States of America, and its successors and assigns
acting as trustee under the Indenture.
4
"Written Request of the Agency" or "Written Certificate of the Agency" means a request
or certificate, in writing, signed by the Chair, dice Chair, Executive Director, Assistant
Executive Director,Deputy Executive Director,Deputy Director-Redevelopment or Treasurer
of the Agency, or by any other officer of the Agency duly authorized by the Agency for that
purpose.
Section 1.02. Rules of Construction. All references herein to "Articles," "Sections" and
other subdivisions are to the corresponding Articles, Sections or subdivisions of this Loan
Agreement, and the words "herein," "hereof," "hereunder" and other words of similar import
refer to this Loan Agreement as a whole and not to any particular Article, Section or
subdivision hereof.
5
ARTICLE H
THE LOAN;APPLICATION OF LOAN PROCEEDS;PARITY DEBT
Section 2.01. Authorization. The Authority hereby agrees to lend to the Agency, from a
portion of the proceeds of sale of the Bonds deposited in the Loan Fund established under the
Indenture, the aggregate principal amount of Million Thousand Dollars
($ ) under and subject to the terms of this Loan Agreement, the Bond Law and the
Redevelopment Law. This Loan Agreement constitutes a continuing agreement with the
Authority to secure the full and final payment of the Loan, subject to the covenants,
agreements,provisions and conditions herein contained.
Section 2.02. Disbursement and Application of Loan Proceeds.
On the Closing Date of the Bonds, the Authority shall cause to be deposited into the
Loan Disbursement Fund, which fund is hereby created, the amount of$_, which shall
be held by the Trustee and which shall be disbursed as follows:
(a) The Trustee shall deposit the amount of $ in the Costs of
Issuance Fund.
(b) The Trustee shall transfer the amount of $ to, or upon the
order of,the Agency for deposit in the Redevelopment Fund.
(c) The Trustee shall deposit the amount of $ in the Reserve
Fund.
(d) The Trustee shall transfer the amount of $ _ to, or upon the order of,
the Agency for deposit in the Low and Moderate Housing Account.
[(e) The Trustee shall deposit the amount of$ in the Interest Account,
which amount represents capitalized interest on the Loan and shall be credited against
amounts otherwise due on the Loan on August 1, 19991.
In addition to the foregoing, the Trustee shall be deemed to have distributed to the
Agency on the Closing Date a pro rata share of the underwriter's discount and original issue
discount on the Bonds in the aggregate amount of$
Section 2.03. Repayment of Loan. The Agency shall repay the principal of the Loan in
installments on August 1 in each of the years and in the amounts, and shall pay interest on the
unpaid principal balance of the Loan on each Interest Payment Date and in the amounts, as set
forth in Exhibit A attached hereto and by this reference incorporated herein. Any installment of
principal or interest which is not paid when due shall continue to accrue interest at the net
effective rate of interest then borne by the Loan from and including the date on which such
principal or interest is payable to but not including the date of actual payment.
In the event the unpaid principal installments of the Loan shall be prepaid in whole or in
part pursuant to Section 2.04, or in the event the Bonds shall be redeemed pursuant to Section
2.02 of the Indenture,the schedule of principal installments set forth in Exhibit A hereto shall be
reduced on a pro rata basis in integral multiples of $5,000 corresponding to the principal
amount of the Bonds redeemed pursuant to the Indenture.
6
Principal of and interest on the Loan shall be payable by the Agency to the Trustee, as
assignee of the Authority under the Indenture, in immediately available funds which constitute
lawful money of the United States of America. Payment of such principal and interest shall be
secured, and amounts for the payment thereof shall be deposited with the Trustee at the times,
as set forth in Article III. Notwithstanding the foregoing provisions of this Section 2.03, in lieu
of payment of any installment of principal of the Loan coming due and payable on August 1 in
any year in which Term Bonds are subject to mandatory sinking fund redemption under the
Indenture,the Agency shall have the right to purchase any of such Term Bonds in an amount not
exceeding the amount thereof which is subject to mandatory sinking fund redemption on such
August 1, and tender such Term Bonds to the Trustee for cancellation, provided that such
tender shall be made before the preceding June 15.
Section 2.04. Optional Prepayment of the Loan. The Agency shall have the right to
prepay the unpaid principal installments of the Loan, in whole or in part in any integral
multiple of $5,000, on any date on which the Bonds are subject to optional redemption
pursuant to Section 2.02(a) of the Indenture,by depositing with the Trustee in the Revenue Fund
an amount sufficient to redeem a like aggregate principal amount of Bonds pursuant to Section
.2.02(a) of the Indenture, together with the amount of accrued interest and premium (if any)
required to be paid upon such redemption. The Authority agrees that upon payment by the
Agency to the Trustee of such amount, the Authority shall take or cause to be taken any and all
steps required under the Indenture to redeem such Outstanding Bonds on the redemption date
designated pursuant to a Written Request of the Agency filed with the Authority and the
Trustee, provided, however, that such date shall be a date of redemption of Bonds for which
notice has been timely given pursuant to the Indenture.
Section 2.05. [Reserved] .
Section 2.06. Redevelopment Fund. There is hereby established a separate fund to be
known as the "Rodeo Redevelopment Project 1999 Redevelopment Fund", which shall be held
and maintained by the Agency. The moneys in the Redevelopment Fund shall be used solely in
the manner provided by the Redevelopment Law and the Redevelopment Plan to provide
financing for the Redevelopment Project.
Section 2.07. Low and Moderate Housing Account. There is hereby established a
separate fund to be known as the "Rodeo Redevelopment Project 1999 Low and Moderate
Housing Account",which shall be held and maintained by the Agency. The moneys in the Low
and Moderate Housing Account shall be used solely in the manner and for the purposes as
provided by Sections 33334.2 and 33334.3 of the Redevelopment Law.
Section 2.08. Reserve Fund.
(a) Establishment of Reserve Fund. There is hereby established a separate fund to be
known as the "Rodeo Redevelopment Project 1992 Reserve Fund", which shall be held by the
Trustee in trust for the benefit of the Authority and the Owners of the Bonds. Amounts initially
deposited in the Reserve Fund shall be derived from the proceeds of the Loan deposited therein
pursuant to Section 2.02(c). The amount on deposit in the Reserve Fund shall be maintained at
the Reserve Requirement at all times prior to the payment of the Loan in full pursuant to Section
6.03, except to the extent required for the purposes set forth in this Section 2.08.
(b) Transfers to Principal AQQQunt and Interest Account. In the event that the Agency
shall fail to deposit with the Trustee the full amount required to be deposited pursuant to
Section 3.03(a), the Trustee shall withdraw from the Reserve Fund and transfer to the Interest
Account and the Principal Account, in such order, the difference between the amount required
to be deposited pursuant to Section 3.03(a) and the amount actually deposited by the Agency.
7
In the event that the amount on deposit in the Reserve Fund shall at any time be less than the
Reserve Requirement,the Trustee shall promptly notify the Agency of the amount required to be
deposited therein to restore the balance to the Reserve Requirement, such notice to be given by
telephone,telecopy or other form of telecommunication,promptly confirmed in writing.
(c) Transfers of Excess Over Reserve Requirement. In the event that the amount on
deposit in the Reserve Fund on any Interest Payment Date exceeds the Reserve Requirement,the
Trustee shall withdraw from the Reserve Fund and deposit to the Revenue Fund all amounts in
excess of the Reserve Requirement, and credit such amounts towards the deposit then required
to be made by the Agency pursuant to Section 3.03(x).
(d) Alternative Funding of Reserve Requirement. The Agency may fund all or a portion
of the Reserve Requirement with one or more Qualified Reserve Fund Credit Instruments. Upon
deposit of any Qualified Reserve Fund Credit Instrument with the Trustee, the Trustee shall pay
to the Agency from amounts in the Reserve Fund an amount equal to the principal of the
Qualified Reserve Fund Credit Instrument.
In any case where the Reserve Fund is funded with a combination of cash and a
Qualified Reserve Fund Credit Instrument, the Trustee shall deplete all cash balances before
drawing on the Qualified Reserve Fund Credit Instrument. With regard to replenishment, any
available moneys provided by the Agency shall be used first to reinstate the Qualified Reserve
Fund Credit Instrument and second, to replenish the cash in the Reserve Fund. In the event the
Qualified Reserve Fund Credit Instrument is drawn upon, the Agency shall make payment of
interest on amounts advanced under the Qualified Reserve Fund Credit Instrument after making
any payments pursuant to subsection (a) of Section 3.03.
In the event the Qualified Reserve Fund Credit Instrument will lapse or expire, the
Agency shall draw upon such Qualified Reserve Fund Credit Instrument prior to its lapsing or
expiring, make deposits from available Tax Revenues to the Reserve Fund to increase the
amount on deposit therein to the Reserve Requirement or substitute such Qualified Reserve Fund
Credit Instrument with a Qualified Reserve Fund Credit Instrument that satisfies the
requirements of this subsection (d).
Section 2.09. Rarity Debt. In addition to the Loan,the Agency may issue or incur Parity
Debt in such principal amount as shall be determined by the Agency. The Agency may issue
and deliver any Parity Debt subject to the following specific conditions which are hereby made
conditions precedent to the issuance and delivery of such Parity Debt issued under this Section
2.09.
(a) No Event of Default shall have occurred and be continuing, and the Agency
shall otherwise be in compliance with all covenants set forth in this Loan Agreement.
(b) The Tax Revenues for the then current Fiscal Year, as set forth in a Written
Certificate of the Agency, based on assessed valuation of property in the Project Area
as evidenced in the written records of the County, plus at the option of the Agency the
Additional Revenues, shall be at least equal to one hundred twenty percent (120%) of
Maximum Annual Debt Service.
(c) The related Parity Debt Instrument shall provide that:
(i) interest on such Parity Debt shall be payable on .February 1 and
August 1 in each year of the term of such Parity Debt except the first twelve-
month period,during which interest may be payable on any February 1 or August
8
1 and provided that there shall be no requirement that such Parity Debt pay
interest on a current basis, and
(ii) the principal of such Parity Debt shall not be payable on any date
other than August 1 in any year; and
(iii) money(and/or a Qualified Reserve Fund Credit Instrument) shall be
deposited in a reserve account created under such Parity Debt Instrument from
the proceeds of said Parity Debt in an amount equal to Maximum Annual Debt
Service on such Parity Debt.
(d) The proceeds of such Parity Debt may be deposited into an escrow fund
from which amounts may not be released to the Agency unless the Tax Revenues for the
most recent Fiscal Year (as evidenced in the written records of the County), plus at the
option of the Agency the Additional Revenues, at least equals one hundred twenty
percent (120%) of the amount of Maximum Annual Debt Service;,provided, however, that
the related Parity Debt Instrument shall provide that no amounts may be released from
such escrow fund until all amounts have been released or otherwise withdrawn from any
escrow fund established with respect to other Parity Debt which has previously been
issued.
(e) The issuance of such Parity Debt shall not cause the Agency to exceed any
applicable Plan Limitations. Without limiting the generality of the foregoing,the Agency
shall not issue any Parity Debt in the event and to the extent that either (a) the amount
of Maximum Annual Debt Service in any Bond Year following such issuance exceeds the
aggregate amount of Tax Revenues which are eligible under the Redevelopment Plan to
be allocated to the Agency in any Fiscal Year,or(b)the aggregate amount of debt service
on all outstanding obligations of the Agency, including such Parity Debt, exceeds the
aggregate amount of Tax Revenues which are eligible under the Redevelopment Plan to
be allocated and paid to the Agency during the period while such outstanding
obligations remain outstanding, or (c) the aggregate principal amount of all outstanding
obligations of the Agency,including such Parity Debt,exceeds any applicable limit in the
Redevelopment Plan on the aggregate principal amount of indebtedness which the
Agency is permitted to have outstanding at any one time.
(f) The Agency shall deliver to the Trustee a Written Certificate of the Agency
certifying that the conditions precedent to the issuance of such Parity Debt set forth in
subsections (a), (b), (c), (d) and (e) above have been satisfied.
Notwithstanding the foregoing, the Agency may issue or incur Refunding Debt in such
principal amount as shall be determined by the Agency so long as the conditions set forth in
subsections (a), (e) and (e) above are met, and the Agency delivers to the Trustee a Written
Certificate of the Agency certifying that such conditions precedent to the issuance of such
Refunding Debt set forth in subsections (a), (c) and (e) above have been met and such Refunding
Debt is otherwise in accordance with the definition of Refunding Debt herein.
Section 2.20. issuance of Subordinate Debt. In addition to the Loan and any Parity
Debt, from time to time the Agency may issue or incur Subordinate Debt in such principal
amount as shall be determined by the Agency, provided that the issuance of such Subordinate
Debt shall not cause the Agency to exceed any applicable Plan Limitations.
Section 2.711.. Validity of Loan. The validity of the Loan shall not be dependent upon
the completion of the Redevelopment Project or upon the performance by any person of its
obligation with respect to the Redevelopment Project.
9
ARTICLE III
PLEDGE AND APPLICATION OF TAX REVENUES
Section 3.01. Pledge of Tax Revenues. The Loan and all Parity Debt shall be equally
secured by a first pledge of and lien on all of the Tax Revenues and all of the moneys on deposit
in the Special Fund, without preference or priority for series, issue, number, dated date, sale
date, date of execution or date of delivery. Except for the Tax Revenues and other funds
pledged hereunder,no funds or properties of the Agency shall be pledged to,or otherwise liable
for,the payment of principal of or interest or prepayment premium(if any) on the Loan.
Section 3.02. Special Fund, Deposit of Tax Revenues. There is hereby established a
special fund to be known as the "Rodeo Redevelopment Project 1999 Special Fund", which
shall be held by the Agency as a separate fund apart from all other funds and accounts of the
Agency. The Agency shall deposit all Tax Revenues in the Special Fund promptly upon the
receipt thereof, until such time (if any) during such Bond Year as the amounts on deposit in the
Special Fund equal the aggregate amounts required to be transferred to the Trustee pursuant to
Section 3.03. Except as may be otherwise provided in any Parity Debt Instruments, any Tax
Revenues received during such Bond Year in excess of such amounts shall be released from the
pledge and lien hereunder and may be used for any lawful purposes of the Agency.
Prior to the payment in full of the principal of and interest and prepayment premium(if
any) on the Loan and all Parity Debt and the payment in full of all other amounts payable
hereunder and under any Parity Debt Instruments, the Agency shall not have any beneficial right
or interest in the moneys on deposit in the Special Fund, except only as provided in this Loan
Agreement and in any Parity Debt Instruments, and such moneys shall be used and applied as
set forth herein and in any Parity Debt Instruments.
Section 3.03. Transfer of Tax Revenues From Special Fund. In addition to the transfers
required to be made pursuant to any Parity Debt Instruments,the Agency shall withdraw from
the Special Fund and transfer to the Trustee the following amounts at the following times and in
the following order of priority:
(a) Interest and Principal Deposits. No later than the fifteenth (15th) calendar
day of the month preceding each date on which the principal of or interest on the Loan
or any Parity Debt shall become due and payable, including but not limited to the
principal amount of the Loan to be prepaid hereunder together with any prepayment
premium thereon, the Agency shall withdraw from the Special Fund and transfer to the
Trustee an amount which,together with the amounts then held on deposit in the Interest
Account, the Principal Account and the Revenue Fund,is equal to the aggregate amount
of such principal, interest and prepayment premium.
(b) Reserve Fund Deposits. In the event that (i) the Trustee shall notify the
Agency pursuant to Section 2.08(b) that the amount on deposit in the Reserve Fund is
less than the Reserve Requirement, or(ii) any Qualified Reserve Fund Credit Investment
shall expire and not be replaced in accordance with Section 2.08(d), or (iii) the amount
in any reserve account described in Section 2.09(c)(iii) shall be less than Maximum
Annual Debt Service on the related Parity Debt,the Agency shall immediately withdraw
from the Special Fund and transfer (x) in the case of any event described in the
preceding clause (i) or (ii), to the Trustee for deposit in the Reserve Fund an amount of
money necessary to maintain the Reserve Requirement in the Reserve Fund, or(y) in the
case of an event described in the preceding clause (iii), to the trustee for such Parity
Debt for deposit in the reserve account established for such Parity Debt an amount of
money necessary to maintain an amount equal to Maximum Annual Debt Service on
10
such Parity Debt in such reserve fund. No such transfer and deposit need be made to
the Reserve Fund so long as there shall be on deposit therein a sum at least equal to the
Reserve Requirement.
Notwithstanding the foregoing, no such transfer and deposit need to be made
upon the occurrence of a default or failure to pay under any Qualified Reserve Fund
Credit Instrument, or any termination thereof prior to its stated termination date, except
as a result of a default by the Agency.
(c) Surplus. Except as may be otherwise provided in any Parity Debt
Instruments, the Agency shall not be obligated to deposit in the Special Fund in any
Bond Year an amount of Tax Revenues which, together with other available amounts in
the Special Fund, exceeds the amounts required in such Bond Year pursuant to Section
3.03 (a) and (b); and all Tax Revenues which are received by the Agency during any
Bond Year in excess of the amounts required to be deposited in the Special Fund in such
Bond Year shall be released from the pledge thereof and lien thereon which is established
pursuant hereto. In the event that for any reason whatsoever any amounts shall remain
on deposit in the Special Fund on any August 2 after making all of the transfers
theretofore required to be made pursuant to the preceding clauses (a) and (b) and
pursuant to any Parity Debt Instruments, the Agency may withdraw such amounts from
the Special Fund, to be used for any lawful purposes of the Agency, including but not
limited to the payment of any Subordinate Debt, or the payment of any amounts due
and owing to the United States of America pursuant to Section.4.12.
Section 3.04. Investment of Moneys; Valuation of Investments. All moneys in the
Redevelopment Fund, the Low and Moderate Mousing Account and the Special Fund shall be
invested by the Agency in any investments authorized for the investment of Agency funds under
the laws of the State. Obligations purchased as an investment of moneys in any fund or
account established hereunder shall be credited to and deemed to be part of such fund or
account. The Agency may commingle any amounts in any of the funds and accounts held
hereunder with any other amounts held by the Agency for purposes of making any investment,
provided that the Agency shall maintain separate accounting procedures for the investment of
all funds and accounts held hereunder. All interest,profits and other income received from the
investment of moneys in any fund or account established hereunder shall be deposited in such
fund or account. Notwithstanding anything to the contrary contained in this paragraph, an
amount of interest received with respect to any investment equal to the amount of accrued
interest, if any, paid as part of the purchase price of such investment shall be credited to the
fund from which such accrued interest was paid.
For the purpose of determining the amount in any fund or account established
hereunder, the value of investments credited to such fund shall be calculated at the lesser of (a)
the par amount thereof or (b) the cost thereof, excluding accrued interest and brokerage
commissions, if any; except that any investments having a maturity of more than five (5) years
from the date of investment shall be valued at least annually at the market value thereof.
The Agency covenants that all investments of amounts deposited in any fund or account
created by or pursuant to this Loan Agreement, or otherwise containing gross proceeds of the
Bonds (within the meaning of section 148 of the Code) shall be acquired, disposed of, and
valued (as of the date that valuation is required by this Indenture or the Code) at Fair Market
Value. Investments in funds or accounts (or portions thereof) that are subject to a yield
restriction under applicable provisions of the Code shall be valued by the Agency at their
present value(within the meaning of section 148 of the Code).
11
ARTICLE IV
OTHER COVENANTS OF TIME AGENCY
Section 4.01. Punctual Payment; Extension of Payments. The Agency will punctually
pay or cause to be paid the principal of and interest and prepayment premium (if any) on the
Loan in strict conformity with the terms of this Loan Agreement, and it will faithfully observe
and perform all of the conditions, covenants and requirements of this Loan Agreement. The
Agency shall not directly or indirectly extend or assent to the extension of the maturity of any
installment of principal of or interest or premium(if any) on the Loan, and in case the principal
of or interest or premium (if any) on the Loan or the time of payment of any such claims
therefor shall be extended, such principal, interest, premium or claims for interest shall not be
entitled, in case of any Event of Default hereunder, to the benefits of this Loan Agreement
except for payment of all amounts which shall not have been so extended.
Section 4.02. Limitation on Additional Indebtedness,Junior Pledge in Favor of Certain
Other Loan Agreements. (a) The Agency hereby covenants that it shall not issue any bonds,
notes or other obligations, enter into any agreement or otherwise incur any indebtedness,which
is in any case payable from all or any part of the Tax Revenues, excepting only the Loan, any
Parity Debt and any Subordinate Debt, and any obligations entered into pursuant to Section
4.09.
(b) The Agency hereby determines that the low and moderate income housing
components of the redevelopment projects to be financed pursuant to the "Other Loan
Agreements" hereinafter in this subsection referred to are of benefit to the Project Area and that
Tax Revenues shall be applied to meet any deficiency which may exist in the amounts required
to be transferred to the Trustee from one or more of the "Other Reserve Accounts", as
hereinafter defined, such reserve funds being established, respectively, by each of the several
loan agreements, each dated as of March 1, 1999 (May 1, 1992 with respect to the West
Pittsburg and North Richmond project areas), by and between the Agency and the Trustee,
relating respectively to the Oakley, West Pittburg and North Richmond redevelopment project
areas of the Agency (the "Other Project Areas"), (such loan agreements being referred to herein
as the "Other Loan Agreements" and such reserve funds being referred to herein as the "Other
Reserve Accounts"):
(i) in the event there shall, at any time or from time to time, be insufficient
moneys in one or more of the Other Reserve Accounts to transfer to the Trustee when
due the full amount required to be so transferred to the Trustee in accordance with the
applicable provisions of the Other Loan Agreements, the Agency shall cause Tax
Revenues in the amount of such insufficiency to be paid to the Trustee;provided however,
that the obligation to pay such insufficiency shall be apportioned pro rata (to the extent
there are then allocable Tax Revenues available) among the Project Area and such of the
Other Project Areas as do not then have an insufficient reserve account and, provided
further, that the aggregate obligation of the Project Area and the Other Project Areas to
pay such insufficiencies shall not exceed the aggregate debt service on the portion of the
loans made under the Other Loan Agreements and this Loan Agreement attributable to
the proceeds of such loans deposited in the Low and Moderate Income Housing Account
of the Agency pursuant to this Loan Agreement and the Other Loan Agreements (plus a
portion of such loans attributable to reserves and financing costs);
(ii) in the event of any such insufficiency in the Other Reserve Accounts, the
Trustee shall promptly notify the Agency, and upon receipt of any such notice, the
12
Agency shall promptly withdraw from the Special Fund and transfer to the Trustee an
amount equal to the portion of such insufficiency apportioned to the Project Area;
(iii) if there shall then not be sufficient moneys in the Special Fund to transfer an
amount equal to the portion of such insufficiency apportioned to the Project Area, the
Agency shall have an obligation to continue making transfers to the Trustee as moneys
become available in the Special Fund until an amount equal to such portion has been
transferred to the Trustee;
(iv) such obligation to pay Tax Revenues shall be an indebtedness of the Agency
within the meaning of Section 33670 of the Redevelopment Law;
(v) such obligation to pay Tax Revenues shall be, in all respects, junior and
subordinate to the obligation of the Agency to apply Tax Revenues to the payment of
the Loan and any Parity Debt, in accordance with the further provisions of this Loan
Agreement,but such obligation to pay Tax Revenues shall be superior to all other future
obligations payable from Tax Revenues;and
(vi) in the event there shall, at any time or from time to time, be insufficient
moneys in the Reserve Fund to transfer to the Trustee when due the full amount required
to be so transferred to the Trustee in accordance with the applicable provisions of this
Loan Agreement and such insufficiency shall be paid pursuant to one or more of the
Other Loan Agreements, the Agency shall cause the first available surplus Tax Revenues
in the amount of such insufficiency to be returned to the applicable special funds of the
Other Loan Agreements.
If appropriate determinations have been made by the Agency that any portion of a
redevelopment project to be financed with the proceeds of Parity Debt is of benefit to the Other
Project Areas, then the Agency may provide in the applicable Parity Debt Instrument that
provisions of like force and effect to the provisions of this Section 4.02 apply with respect to
any reserve fund established for such Parity Debt and such provisions of such Parity Debt
Instrument shall be deemed to be on a parity with the provisions of this Section 4.02.
Section 4.03. Payment of Claims. The Agency will pay and discharge, or cause to be
paid and discharged, any and all lawful claims for labor, materials or supplies which, if
unpaid,might become a lien or charge upon the Tax Revenues or any part thereof, or upon any
funds in the hands of the Trustee, or which might impair the security of the Loan. Nothing
herein contained shall require the Agency to make any such payment so long as the Agency in
good faith shall contest the validity of said claims.
Section 4.04. Books and Accounts; Financial Statements. The Agency will keep, or
cause to be kept, proper books of record and accounts, separate from all other records and
accounts of the Agency and the County, in which complete and correct entries shall be made of
all transactions relating to the Redevelopment Project, the Tax Revenues, the Special Fund, the
Low and Moderate Housing Account and the Redevelopment Fund. Such books of record and
accounts shall at all times during business hours be subject, upon prior written request, to the
reasonable inspection of the Authority, the Trustee and the Owners of not less than ten percent
(10%) in aggregate principal amount of the Bonds then Outstanding, or their representatives
authorized in writing.
The Agency will cause to be prepared and filed with the Trustee annually, within one
hundred and eighty (180) days after the close of each Fiscal Year so long as any of the Bonds
are Outstanding, complete audited financial statements with respect to such Fiscal Year
showing the Tax Revenues, all disbursements from the Special Fund, the Redevelopment Fund
13
and the Low and Moderate Housing Account and the financial condition of the Redevelopment
Project, including the balances in all funds and accounts relating to the Redevelopment Project,
as of the end of such Fiscal Year. The Agency will furnish a copy of such statements, upon
reasonable request,to any Bond Owner.
Section 4.05. Protection of Security and Rights. The Agency will preserve and protect
the security of the Loan and the rights of the Trustee and the Bond Owners with respect to the
Loan. From and after the Closing Date, the Loan shall be incontestable by the Agency. The
Loan and the provisions of this Loan Agreement are and will be the legal, valid and binding
special obligations of the Agency in accordance with their terms, and the Agency shall at all
times, to the extent permitted by law, defend, preserve and protect all the rights of the Trustee
and the Bond Owners under this Loan Agreement against all claims and demands of all persons
whomsoever.
Section 4.06. Payments of Taxes and Cather Charges. The Agency will pay and
discharge, or cause to be paid and discharged, all taxes, service charges, assessments and other
governmental charges which may hereafter be lawfully imposed upon the Agency or the
properties then owned by the Agency in the Project Area, when the same shall become due.
Nothing herein contained shall require the Agency to make any such payment so long as the
Agency in good faith shall contest the validity of said taxes, assessments or charges. The
Agency will duly observe and comply with all valid requirements of any governmental authority
relative to the Redevelopment Project or any part thereof.
Section 4.07. Taxation of Leased Property. All ad valorem property taxes derived by
the Agency pursuant to Section 33673 of the Redevelopment Law with respect to the lease of
property for redevelopment shall be treated as Tax Revenues for all purposes of this Loan
Agreement.
Section 4.08. Disposition of Property. The Agency will not participate in the
disposition of any land or real property in the Project Area to anyone which will result in such
property becoming exempt from taxation because of public ownership or use or otherwise
(except property dedicated for public right-of-way and except property planned for public
ownership or use by the Redevelopment Plan in effect on the date of this Loan Agreement) so
that such disposition shall, when taken together with other such dispositions, aggregate more
than ten percent (10%) of the land area in the Project Area unless such disposition is permitted
as hereinafter provided in this Section 4.08. If the Agency proposes to participate in such a
disposition, it shall thereupon appoint an Independent Redevelopment Consultant to report on
the effect of said proposed disposition. If the Report of the Independent Redevelopment
Consultant concludes that the Tax Revenues following such disposition will be at least equal to
one hundred twenty percent(120%) of Maximum Annual Debt Service on the Loan,the Agency
may thereafter make such disposition. If said Report concludes that, following said proposed
disposition, the Tax Revenues will not be at least equal to one hundred twenty percent (120%)
of Maximum Annual Debt Service on the Loan, the Agency shall not participate in said
proposed disposition.
Section 4.09. Maintenance of Tax Revenues. The Agency shall comply with all
requirements of the Redevelopment Law to insure the allocation and payment to it of the Tax
Revenues, including without limitation the timely filing of any necessary statements of
indebtedness with appropriate officials of the County and (in the case of supplemental
revenues and other amounts payable by the State) appropriate officials of the State. The
Agency shall not amend the Redevelopment Plan or any of the Reimbursement Agreements, or
enter into any agreement with the County or any other governmental or private entity, which
would have the effect of reducing the amount of Tax Revenues otherwise available to the
Agency for payment of the Loan, unless the Agency shall first obtain the Report of an
14
Independent Redevelopment Consultant stating that the Tax Revenues for the then current
Fiscal Year (calculated on the assumption that such reduction of Tax Revenues was in effect
throughout such Fiscal Year),plus at the option of the Agency the Additional Revenues,shall be
at least equal to one hundred twenty percent (120%) of Maximum Annual Debt Service on the
Loan and all Parity Debt.
Section 4.10. Payment of Expenses; Indemnification. The Agency shall pay to the
Trustee from time to time all compensation for all services rendered under this Loan Agreement
and the Indenture, including but not limited to all reasonable expenses, charges, legal and
consulting fees and other disbursements and those of its attorneys, agents and employees,
incurred in and about the performance of its powers and duties hereunder and thereunder. The
Trustee shall have a first lien on the funds held by it under the Indenture and hereunder to
secure the payment to the Trustee of all fees, costs and expenses, including reasonable
compensation to its experts, attorneys and counsel incurred in declaring an Event of Default
and in exercising the rights and remedies set forth in Article V.
The Agency further covenants and agrees to indemnify and save the Trustee and its
officers, directors, agents and employees, harmless against any losses, expenses and liabilities
which it may incur arising out of or in connection with the exercise and performance of its
powers and duties hereunder, including the costs and expenses of defending against any claim
of liability, but excluding any and all losses, expenses and liabilities which are due to the
negligence or intentional misconduct of the Trustee, its officers, directors, agents or employees.
The obligations of the Agency under this paragraph shall survive the resignation or rer�oval of
the Trustee under the Indenture, this Loan Agreement and payment of the Loan and the
discharge of this Loan Agreement.
Section 4.11. Tax Covenants.
(a) Private Business Use Limitation. The Agency shall assure that the proceeds of the
Bonds are not used in a manner which would cause the Bonds to become "private activity
bonds" within the meaning of Section 141(a) of the Tax Code.
(b) Private Loan Limitation. The Agency shall assure that no more than five percent
(5%) of the net proceeds of the Bonds are used, directly or indirectly, to make or finance a loan
(other than loans constituting nonpurpose obligations as defined in the Tax Code or constituting
assessments) to persons other than state or local government units.
(c) Federal Guarantee Prohibition. The Agency shall not take any action or permit or
suffer any action to be taken if the result of the same would be to cause the Bonds to be
"federally guaranteed" within the meaning of Section 149(b) of the Tax Code.
(d) No Arbitrage. The Agency shall not take, or permit or suffer to be taken by the
Trustee or otherwise, any action with respect to the Bond proceeds which, if such action had
been reasonably expected to have been taken, or had been deliberately and intentionally taken,
on the Closing Date of the Bonds, would have caused the Bonds to be "arbitrage bonds" within
the meaning of Section 148(a) of the Tax Code.
Section 4.12. Payment of Rebatable Amounts. The Agency agrees to furnish all
information to, and cooperate fully with, the Authority, the Trustee and their respective
officers, employees, agents and attorneys, in order to assure compliance with the provisions of
Section 5.08 of the Indenture. In the event that the Authority shall determine, pursuant to
Section 5.08 of the Indenture, that any amounts are due and payable to the United States of
America thereunder and that neither the Authority nor the Trustee has on deposit an amount of
available moneys (excluding moneys on deposit in the funds and accounts established for the
I5
payment of the principal of or interest or redemption premium, if any, on the Bonds) to make
such payment, the Authority shall promptly notify the Agency of such fact. Upon receipt of
any such notice, the Agency shall promptly pay to the Trustee from available Tax Revenues or
any other source of legally available funds, for deposit into the Rebate Account, the amounts
determined by the Authority to be due and payable to the United States of America as a result
of the investment of amounts on deposit in any fund or account established hereunder, together
with all other amounts due and payable to the United States of America.
Section 4.13. Redevelopment of Project Area. The Agency shall ensure that all activities
undertaken by the Agency with respect to the redevelopment of the Project Area are undertaken
and accomplished in conformity with all applicable requirements of the Redevelopment Plan
and the Redevelopment Law.
Section 4.14. Continuing Disclosure. The Agency hereby covenants and agrees that it
will comply with and carry out all of the provisions of the Continuing Disclosure Certificate.
Notwithstanding any other provision of this Loan Agreement, failure of the Agency to comply
with the Continuing Disclosure Certificate shall not be considered an Event of Default,however
any Participating Underwriter or any holder or beneficial owner of the Bonds may take such
actions as may be necessary and appropriate, including seeking specific performance by court
order,to cause the Agency to comply with its obligations under this Section 4.14.
Section 4.15. Annual Review of Tax Revenues. The Agency annually shall cause to be
prepared a report which sets forth the total amount of Tax Revenues remaining available to be
received by the Agency under the Redevelopment Plan cumulative tax increment limitations, as
well as future cumulative debt service on the Loan and other obligations of the Agency payable
from Tax Revenues (including the any Subordinate Debt). The Agency will not accept Tax
Revenues greater than the aggregate annual debt service payable by the Agency in any year on
all its obligations if such acceptance will cause the amount remaining under the tax increment
limit to fall below remaining cumulative debt service, except for the purpose of depositing such
revenues in escrow for future debt service or to prepay the Loan.
Section 4.16. Payment of Authority Expenses. The Agency hereby agrees to pay any
and all expenses of the Authority incurred in connection with the administration of the Bonds,
including but not limited to trustee fees and expenses.
Section 4.17. Further Assurances. The Agency will adopt, make, execute and deliver
any and all such further resolutions, instruments and assurances as may be reasonably
necessary or proper to carry out the intention or to facilitate the performance of this Loan
Agreement and for the better assuring and confirming unto the Trustee, the Authority and the
Owners of the Bonds of the rights and benefits provided in this Loan Agreement.
16
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
Section 5.01. Events of Default. The following events shall constitute Events of Default
hereunder:
(a) Failure by the Agency to pay the principal of or interest or prepayment
premium (if any) on the Loan or any Parity Debt when and as the same shall become
due and payable.
(b) Failure by the Agency to observe and perform any of the covenants,
agreements or conditions on its part contained in this Loan Agreement, other than as
referred to in the preceding clause (a), for a period of sixty (60) days after written notice
specifying such failure and requesting that it be remedied has been given to the Agency
by the Trustee; provided, however, that if in the reasonable opinion of the Agency the
failure stated in such notice can be corrected, but not within such sixty (60) day period,
such failure shall not constitute an Event of Default if corrective action is instituted by
the Agency within such sixty (60) day period and thereafter is diligently pursued until
such failure is corrected.
(c) The filing by the Agency of a petition or answer seeking reorganization or
arrangement under the federal bankruptcy laws or any other applicable law of the
United States of America, or if a court of competent jurisdiction shall approve a
petition, filed with or without the consent of the Agency, seeking reorganization under
the federal bankruptcy laws or any other applicable law of the United States of
America, 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 Agency or of the
whole or any substantial part of its property.
If an Event of Default has occurred and is continuing, the Trustee may, and at the
written direction of the Owners of a majority in aggregate principal amount of the Outstanding
Bonds the Trustee shall, subject to the provisions of the Indenture, exercise any remedies
available to the Trustee in law or at equity. Immediately upon becoming aware of the
occurrence of an Event of Default, the Trustee shall give notice of such Event of Default to the
Agency by telephone, telecopier or other telecommunication device, promptly confirmed in
writing.
Section 5.02. Application of Funds Upon Default. All amounts received by the Trustee
pursuant to any right given or action taken by the Trustee under the provisions of Article V of
this Loan Agreement, shall be applied by the Trustee in the following order:
First, to the payment of the fees, costs and expenses of the Trustee in declaring
such Event of Default and in carrying out the provisions of this Article V, including
reasonable compensation to its agents, attorneys and counsel; and
Second, to the payment of the whole amount of interest on and principal of the
Loan then due and unpaid, with interest on overdue installments of principal and
interest to the extent permitted by law at the net effective rate of interest then borne by
the Outstanding Bonds, provided, however, that in the event such amounts shall be
insufficient to pay in full the full amount of such interest and principal, then such
amounts shall be applied in the following order of priority:
17
(a) first, to the payment of all installments of interest on the Loan then
due and unpaid, on a pro rata basis in the event that the available amounts are
insufficient to pay all such interest in full,
(b) second, to the payment of all installments of principal of the Loan
then due and payable, on a pro rata basis in the event that the available amounts
are installments of principal in full, and
(e) third, to the payment of interest on overdue installments of principal
and interest, on a pro rata basis in the event that the available amounts are
insufficient to pay all such interest in full.
Section 5.03. No Waiver. Nothing in this Article V or in any other provision of this
Loan Agreement, shall affect or impair the obligation of the Agency, which is absolute and
unconditional, to pay from the Tax Revenues and other amounts pledged hereunder, the
principal of and interest and premium (if any) on the Loan to the Trustee when due, as herein
provided, or affect or impair the right of action,which is also absolute and unconditional, of the
Trustee to institute suit to enforce such payment by virtue of the contract embodied in this Loan
Agreement.
A waiver of any default by the Trustee shall not affect any subsequent default or impair
any rights or remedies on the subsequent default. No delay or omission of the Trustee to
exercise any right or power accruing upon any default shall impair any such right or power or
shall be construed to be a waiver of any such default or an acquiescence therein, and every
power and remedy conferred upon the Trustee by the Redevelopment Law or by this Article V
may be enforced and exercised from time to time and as often as shall be deemed expedient by
the Trustee.
If a suit, action or proceeding to enforce any right or exercise any remedy shall be
abandoned or determined adversely to the Trustee,the Agency and the Trustee shall be restored
to their former positions, rights and remedies as if such suit, action or proceeding had not been
brought or taken.
Section 5.04. Agreement to Pay Attorneys'Fees and Expenses. In the event either party
to this Agreement should default under any of the provisions hereof and the nondefaulting
party or the Trustee should employ attorneys or incur other expenses for the collection of
moneys or the enforcement or performance or observance of any obligation or agreement on the
part of the defaulting party herein contained, the defaulting party agrees that it will on demand
therefor pay to the nondefaulting party or the Trustee, as the case may be, the reasonable fees
of such attorneys and such other expenses so incurred.
Section 5.05. Remedies Not Exclusive. No remedy herein conferred upon or reserved to
the Trustee is intended to be exclusive of any other remedy. Every 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 Redevelopment Law or any other law.
is
ARTICLE VI
MISCELLANEOUS
Section 6.01. Benefits Limited to Parties. Nothing in this Loan Agreement,expressed or
implied,is intended to give to any person other than the Agency, the Trustee and the Authority,
any right, remedy or claire under or by reason of this Loan Agreement. All covenants,
stipulations, promises or agreements in this Loan Agreement contained by and on behalf of the
Agency shall be for the sole and exclusive benefit of the Authority and of the Trustee acting as
trustee for the benefit of the Owners of the Bonds.
Section 6.02. Successor is Deemed Included in All References to Predecessor. Whenever
in this Loan Agreement either the Agency, the Authority or the Trustee is named or referred to,
such reference shall be deemed to include the successors or assigns thereof, and all the
covenants and agreements in this Loan Agreement contained by or on behalf of the Agency,the
Authority or the Trustee shall bind and inure to the benefit of the respective successors and
assigns thereof whether so expressed or not.
Section 6.03. Discharge of Loan Agreement. If the Agency shall pay and discharge the
indebtedness on the Loan or any portion thereof in any one or more of the following ways:
(a) by well and truly paying or causing to be paid the principal of and
interest and prepayment premiums (if any) on the Loan or such portion thereof,
as and when the same become due and payable,
(b) by irrevocably depositing with the 'Trustee, in trust, at or before
maturity, cash in an amount which, together with the available amounts then on
deposit in any of the funds and accounts established pursuant to the Indenture
or this Loan Agreement, in the opinion or report of Bond Counsel or an
Independent Accountant is fully sufficient to pay all principal of and interest
and prepayment premiums (if any) on the Loan or such portion thereof;or
(c) by irrevocably depositing with the Trustee or any other fiduciary, in
trust,non-callable Defeasance Obligations in such amount as Bond Counsel or an
Independent Accountant shall determine will,together with the interest to accrue
thereon and available moneys then on deposit in the funds and accounts
established pursuant to the Indenture or this Loan Agreement,be fully sufficient
to pay and discharge the indebtedness on the Loan or such portion thereof
(including all principal, interest and prepayment premiums) at or before
maturity;
then,at the election of the Agency but only if all other amounts then due and payable hereunder
shall have been paid or provision for their payment made, the pledge of and lien upon the Tax
Revenues and other funds provided for in this Loan Agreement and all other obligations of the
Trustee, the Authority and the Agency under this Loan Agreement with respect to the Loan or
such portion thereof shall cease and terminate, except only the obligation of the Agency to pay
or cause to be paid to the Trustee, from the amounts so deposited with the Trustee or such
other fiduciary, all sums due with respect to the Loan or such portion thereof, and to pay all
expenses and costs of the Trustee when and as such expenses and costs become due and
payable. Notice of such election shall be filed with the Authority and the Trustee. Any funds
thereafter held by the Trustee hereunder,which are not required for said purpose, shall be paid
over to the Agency.
19
Notwithstanding the foregoing provisions of this Section 6.03, this Loan Agreement and
the obligations of the Agency hereunder shall not be discharged under this Section 6.03 unless
and to the extent that the Bonds shall have been discharged in whole or in part pursuant to the
provisions of Section 9.03 of the Indenture.
Section 6.04. Amendment. This Loan Agreement may be amended by the parties
hereto,but only under the circumstances set forth in, and in accordance with, the provisions of
Section 5.09 of the Indenture. The Authority and the Trustee covenant that the Indenture shall
not be amended, nor shall the Authority agree or consent to any amendment of the Indenture,
without the prior written consent of the Agency (except that such consent shall not be required
in the event that an Event of Default shall have occurred and be continuing hereunder).
Section 6.05. Waiver of Personal Liability. No member,officer,agent or employee of the
Agency shall be individually or personally liable for the payment of the principal of or interest
on the Loan, but nothing herein contained shall relieve any such member, officer, agent or
employee from the performance of any official duty provided by law.
Section 6.06. Payment on Business Days. Whenever in this Loan Agreement any
amount is required to be paid on a day which is not a Business Day, such payment shall be
required to be made on the Business Day immediately following such day, provided that
interest on such payment shall not accrue from and after such day.
Section 6.07. Notices. Any notice, request, complaint, demand or other communication
under this Loan Agreement shall be given by first class mail or personal delivery to the party
entitled thereto at its address set forth below, or by telecopy or other form of
telecommunication, at its number set forth below. Notice shall be effective either (a) upon
transmission by telecopy or other form of telecommunication, (b) 48 hours after deposit in the
United States mail, postage prepaid, or (c) in the case of personal delivery to any person, upon
actual receipt. The Authority, the Agency or the Trustee may, by written notice to the other
parties, from time to time modify the address or number to which communications are to be
given hereunder.
If to the Authority: County of Contra Costa
Public Financing Authority
County Administration Building
c/o Community Development Department
651 fine Street,4th Floor,North Wing
Martinez, California 94553
Attention: Deputy Executive Director
Telecopier: (925) 646-1309
If to the Agency: Contra Costa County Redevelopment Agency
County Administration Building
c/o Community Development Department
651 Pine Street,4th Floor,North Wing
Martinez, California 94553
Attention: Deputy Director-Redevelopment
Telecopier: (925) 646-1309
20
If to the Trustee: U.S. Bank Trust National Association
One California Street, 4th Floor
San Francisco, California 94111
Attention: Corporate Trust Services
Telecopier: (415) 273-4588
Section 6.08. Partial Invalidity. If any Section, paragraph, sentence,clause or phrase of
this Loan Agreement shall for any reason be held illegal, invalid or unenforceable, such holding
shall not affect the validity of the remaining portions of this Loan Agreement. The Agency
hereby declares that it would have adopted this Loan Agreement and each and every other
Section, paragraph, sentence, clause or phrase hereof and authorized the Loan irrespective of
the fact that any one or more Sections, paragraphs, sentences, clauses, or phrases of this Loan
Agreement may be held illegal,invalid or unenforceable.
Section 6.09. Article and Section Headings and References. The headings or titles of the
several Articles and Sections hereof, and any table of contents appended to copies hereof, shall
be solely for convenience of reference and shall not affect the meaning,construction or effect of
this Agreement. All references herein to "Articles," "Sections" and other subdivisions are to the
corresponding Articles, Sections or subdivisions of this Agreement, the words "herein,"
"hereof," "hereby," "hereunder" and other words of similar import refer to this Agreement as a
whole and not to any particular Article, Section or subdivision hereof, and words of the
masculine gender shall mean and include words of the feminine and neuter genders.
Section 6.10. Execution of Counterparts. This Agreement may be executed in any
number of counterparts,each of which shall for all purposes be deemed to be an original and all
of which shall together constitute but one and the same instrument.
Section 6.11. Governing Law. This Agreement shall be construed and governed in
accordance with the laws of the State.
Section 6.12. Assignment. Pursuant to Section 4.01 of the Indenture, the Authority has
assigned its right, title and interest (but not its duties or obligations) in this Agreement (other
than its rights under Section 4.10 and 5.04 hereof) to the Trustee, for the benefit of the Owners
from time to time of the Bonds. The Agency hereby consents to such assignment.
The Agency shall not assign its interest in this Agreement without the prior written
consent of the Authority and the Trustee.
The assignment of this Agreement to the Trustee is solely in its capacity as Trustee under
the Indenture and the duties, powers and liabilities of the Trustee in acting hereunder shall be
subject to the provisions of the Indenture,including,without limitation,the provisions of Article
VI thereof.
211
IL WITLESS WHEREOF, the CONTRA COSTA COUNTY REDEVELOPMENT
AGENCY and the COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY have
caused this Lean Agreement to be signed by their respective officers all as of the day and year
first above written.
CONTRA COSTA COUNTY
REDEVELOPMENT AGENCY
By
Deputy Executive Director
COUNTY OF CONTRA COSTA PUBLIC
FINANCING AUTHORITY
By
Deputy Director-Redevelopment
0301-2.01:J4087
22
EXHIBIT A
SCHEDULE OF LOAN PAYMENTS
Principal Interest Aggregate
Loan Payment,Date Installment Installment Loan Payment
A-1
13093-04 ;T3:CKL 013/15/99
CON nNiJING DISCLOSURE CERTIFICATE
This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and
delivered by the Contra Costa County Redevelopment Agency(the"Agency"),on behalf of itself
and the County of Contra Costa Public Financing Authority (the "Authority"), in connection
with the issuance by the Authority of its $ County of Contra Costa Public Financing
Authority 1999 Tax Allocation. Revenue Bonds (Pleasant Hill BART, North Richmond, Bay
Point,Rodeo and Oakley Redevelopment Project Areas).
The Bonds are being issued pursuant to that certain indenture of Trust, dated as of
March 1, 1999 (the "indenture"),by and between the Authority and U.S. Bank Trust National
Association., as trustee (the "Trustee"). The Authority will use proceeds of the Bonds to (i)
finance acquisition and construction by the Authority of certain public capital improvements in
the County of Contra Costa and (ii)make five separate loans of the proceeds of the Bonds (the
"Loans") to the Agency,pursuant to five separate loan agreements, each dated as of March 1,
1999 (the "Loan Agreements"), and the Agency will repay the Loans from tax increment
revenues("Tax Revenues")generated in each of five project areas (the "Project Areas"): (i) the
Pleasant Hill BART Station Redevelopment Project Area, (ii) the North Richmond
Redevelopment Project Area, (iii) the Bay Point Redevelopment Project Area (formerly known
as the West Pittsburg Redevelopment Project Area), (iv) the Rodeo Redevelopment Project Area.
and(v) the Oakley Redevelopment Project Area.
The Agency will apply the proceeds of the Loans (i) to pay the costs of issuing the
Bonds, (ii) to establish five reserve funds for repayment of the Loans under the Loan.
Agreements, (iii) to establish, pursuant to that certain Escrow Deposit and Trust Agreement,
dated as of March.1, 1999 (the "Escrow Agreement"),by and among the Agency, the Authority
and U.S. Bank Trust National Association, as escrow bank (the "Escrow Bank"), an escrow
fund to provide for the advance refunding of a portion of the Authority's 1992 Tax Allocation
Revenge Bonds, Series A (Pleasant Hill, North Richmond, West Pittsburg and Oakley
Redevelopment Project Areas) (the "1992 Bonds") by providing for the prepayment of a
portion of four loan agreements,each dated as of May 1, 1992 (the "1992 Loan Agrements") by
and between the Agency and the Authority, and (iv) to finance certain redevelopment projects
of the Agency.
Pursuant to the Agency's covenants in each of the Loan Agreements, the Agency hereby
covenants and agrees as follows:
Section. 1. Pose of the Disclosure Certificate. This Disclosure Certificate is being
executed and delivered by the Agency, on behalf of itself and the Authority, for the benefit of
the holders and beneficial owners of the Bonds and in order to assist the Participating
Underwriter in complying with S.E.C. Rule 15c2-12(b)(5).
Section 2. Definitions. In addition to the definitions set forth in the Indenture, which
apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in
this Section,the following capitalized terms shall have the following meanings:
"Annual Report"shall mean any Annual Report provided by the Agency pursuant to, and
as described in,Sections 3 and 4 of this Disclosure Certificate.
i
13093-04 JH.CKL 03/05/99
"Dissemination Agent" shall mean U.S. Bank Trust National Association, or any
successor Dissemination Agent designated in writing by the Agency and which has filed with
the Agency and the Trustee a written acceptance of such designation.
"Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure
Certificate.
"National Repository" shall mean any Nationally Recognized Municipal Securities
Information Repository for purposes of the Rule. Information on the National Repositories as of
a particular date is available on the Internet at www.sec.gov/consumer/nrmsir.htm.
"Participating Underwriter" shall mean Stone & Youngberg LLC, the address of which is
50 California Street,35th Floor, San Francisco, CA 94111.
"Repository"shall mean each National Repository and each State Repository.
"Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange
Commission under the Securities Exchange Act of 1934,as the same may be amended from time
to time.
"State Repository" shall mean any public or private repository or entity designated by the
State of California as a state repository for the purpose of the Rule and recognized by the
Securities and Exchange Commission. As of the date of this Disclosure Certificate, there is no
State Repository.
Section 3. Provision of Annual Reports.
(a) The Agency hereby requests the Dissemination Agent to, not later than nine (9)
months after the end of the Agency's fiscal year (which date would currently be March 31,
based upon the June 30 end of the Agency's fiscal year), commencing with the March 31, 2000
report for the 1.998-99 fiscal year,provide to each Repository and the Participating Underwriter
an Annual Report which is consistent with the requirements of Section 4 of this Disclosure
Certificate. Not later than fifteen (15) Business Days prior to said date, the Agency shall
provide the Annual Deport to the Dissemination Agent (if other than the Agency). The Agency
shall provide a written certification with each Annual Report furnished to the Dissemination.
Agent and the Trustee to the effect that such Annual Report constitutes the Annual Report
required to be furnished by the Agency hereunder. The Dissemination Agent and the Trustee
may conclusively rely upon such certification of the Agency. The Annual Report may be
submitted as a single document or as separate documents comprising a package, and may
cross-reference other information as provided in Section 4 of this Disclosure Certificate.-
provided
ertificate,provided that the audited financial statements of the Agency may be submitted separately from
the balance of the Annual Report, and later than the date required above for the filing of the
Annual Report if not available by that date. If the Agency's fiscal year changes, it shall give
notice of such change in the same mariner as for Listed Event under Section 5(c).
(b) If the Agency is unable to provide to the Depositories an Annual Report by the
date required in subsection (a), the Agency shall send a notice to that effect to the Municipal
Securities Rulemaking Board in substantially the form attached as Exhibit A.
(c) The Dissemination Agent shall:
(i) determine each year prior to the date for providing the Annual Deport the
name and address of each National Depository and each State Repository, if any; and
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18093-04 N:CKL 03/05/99
(ii) (if the Dissemination Agent is other than the Agency) to extent the
Annual Report has been provided to the Dissemination Agent, file a report with the
Agency,the Issuer and the Trustee(if the Dissemination Agent is other than the Trustee)
certifying that the Annual Report has been provided pursuant to this Disclosure
Certificate, stating the date it was provided and listing all the Repositories to which it
was provided.
Section 4. Content of Aamia ort. The Agency's Annual Report shall contain or
incorporate by reference the following.-
(a)
ollowing:(a) Audited financial statements of the Agency for the most recent fiscal
year, prepared in accordance with generally accepted accounting principles as
promulgated to apply to governmental entities from time to time by the Governmental
Accounting Standards Board, and as further modified according to applicable State
law. If the Agency's audited financial statements are not available by the time the
Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall
contain unaudited financial statements in a format similar to the usual format utilized
by the Agency,and the audited financial statements shall be filed in the same manner as
the Annual Report when they become available. The financial statements of the Agency
may be consolidated with those of the County of Contra Costa and its related entities;
(b) The following information for the most recently completed fiscal year, in
substantially the form set forth in the Official Statement relating to the Bonds:
(i) Assessed values of property in each Project Area in substantially
the form of Tables 3, 8, 13, 18 and 23 of the Official Statement;
(ii) Tax Revenues in each Project Area in substantially the form of
Tables 5, 10, 15, 20 and 25 of the Official Statement;
(iii) Issuance by the Agency of any Parity Debt with respect to any
Project Area (if and to the extent permitted by the Loan
Agreements);
(iv) Information about each pending and successful appeal of
assessed values in each Project Area that exceeds 5% of assessed
value in such Project Area;
(v) Incremental taxable value, tax levy, current year collections,
current collections as a percentage of current year levy collected,
total collections and total collections as a percentage of the
current year's tax levy in each Project Area in substantially the
form of Tables 2, 7, 12, 17 and 22 of the Official Statement;
(vi) Amount of all Agency debt outstanding secured by a pledge of the
Tax Revenues in each Project Area,and cumulative amount of Tax
Revenues received by the Agency to date in such Project Area;and
(vii) Loan payments made pursuant to each Loan Agreement and the
debt service coverage ratio for its obligations under each Loan
Agreement and all applicable Parity Debt in substantially the
form of Tables 6, 11, 16, 21 and 26.
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(c) A copy of the report provided by the Authority pursuant to Section
5.110 of the Indenture for the most recent fiscal year;provided that if no such report is
required to be provided pursuant to said Section 5.11(b), the information described in
clauses (i) and (ii) of said Section 5.10(b).
(d) A copy of the reports required by Section 7.13 of the North Richmond
First Supplemental Loam.Agreement(as defined in the Official Statement).
Any or all of the items listed above may be included by specific reference to other
documents,including official statements of debt issues of the Agency or related public entities,
which have been submitted to each of the Repositories or the Securities and Exchange
Commission. If the document included by reference is a final official statement, it must be
available from the Municipal Securities Rulemaking Board. The Agency shall clearly identify
each such other document so included by reference.
If the annual financial information or operating data to be provided in the Annual
Report is amended pursuant to the provisions hereof, the annual financial information
containing the amended operating data or financial information shall explain, in narrative form,
the reasons for the amendment and the impact of the change in the type of operating data or
financial information being provided.
If an amendment is made to the undertaking specifying the accounting principles to be
followed in preparing financial statements, the annual financial information for the year in
which the change is made shall present a comparison between the financial statements or
information prepared on the basis of the new accounting principles and these prepared on the
basis of the former accounting principles.The comparison shall include a qualitative discussion
of the differences in the accounting principles and the impact of the change in the accounting
principles on the presentation of the financial information, in order to provide information to
investors to enable them to evaluate the ability of the Agency to meet its obligations. To the
extent reasonably feasible, the comparison shall be quantitative. A notice of the change in the
accounting principles shall be sent to the Repositories.
Section 5. Reporting of ai:=ificant Events.
(a) Pursuant to the provisions of this Section 5, the Agency shall give, or cause to be
given, notice of the occurrence of any of the following events with respect to the Bonds, if
material:
(1) Principal and interest payment delinquencies.
(2) Non-payment related defaults.
(3) Unscheduled draws on debt service reserves reflecting financial difficulties.
(m4) Unscheduled draws on credit enhancements reflecting financial difficulties.
(5) Substitution of credit or liquidity providers,or their failure to perform.
( ) Adverse tax opinions or events affecting the tax-exempt status of the security.
('7) Modifications to rights of security holders.
($) Bond calls.
(9) Defeasances.
(10) Release,substitution,or sale of property securing repayment of the securities.
(11) Rating changes.
(b) Whenever the Agency obtains knowledge of the occurrence of a Listed Event, the
Agency shall as soon as possible determine if such event would be material under applicable
Federal Securities law.
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13093-04 JH:CKL 03/05/99
(c) If the Agency determines that knowledge of the occurrence of a Listed Event
would be material under applicable Federal securities law, the Agency shall promptly file a
notice of such occurrence with the Municipal Securities Rulemaking Board and each State
Repository. Notwithstanding the foregoing, notice of Listed Events described in subsections
(a)(8)and (9)need not be given under this subsection any earlier than the notice (if any) of the
underlying event is given to holders of affected Bonds pursuant to the Indenture.
Section 6. Termination of Deporting-C)bligation. The Agency's obligations under this
Disclosure Certificate shall terminate upon the legal defeasance,prior redemption or payment in
full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the
.Agency shall give notice of such termination in the same manner as for a Listed Event under
Section 5(c).
The Agency's obligations hereunder may be assumed in part or in whole by any other
governmental agency if and to the extent that such governmental agency assumes the obligations
of the Agency with respect to one or more Loan Agreements pursuant to (i) a written agreement
executed by such other governmental agency and (ii) written notice by such other governmental
agency to each Depository and the Participating Underwriter notifying them of the assumption.
Section 7. Dissemination Agent The Agency may,from time to time, appoint or engage
a Dissemination Agent to assist it in carrying out its obligations under this Disclosure
Certificate, and may discharge any such Agent, with or without appointing a successor
Dissemination Agent. The initial Dissemination Agent shall be U.S. Bank Trust National
Association. The Dissemination Agent may at any time resign by providing thirty days written
notice to the Issuer, the Agency and the Trustee, such resignation to become effective upon
acceptance of appointment by a successor Dissemination Agent. Upon receiving notice of such
resignation, the Issuer shall promptly appoint a successor Dissemination Agent by an
instrument in writing,delivered to the Trustee. If no appointment of a successor Dissemination
Agent shall be made pursuant to the forgoing provisions of this Section within forty-five (45)
days after the Dissemination Agent shall have given to the Issuer, the Agency and the Trustee
written notice of its resignation,the Dissemination Agent may apply to any court of competent
jurisdiction to appoint a successor Dissemination Agent. Said court may thereupon, after such
notice, if any,as such court may deem proper, appoint a successor Dissemination Agent. The
Agency shall provide the Issuer and the Trustee with written notice of the identity of any
successor Dissemination Agent appointed or engaged by the Agency.
Section 8. Amendment,Waiver. Notwithstanding any other provision of this Disclosure
Certificate, the Agency may amend this Disclosure Certificate, and .any prevision of this
Disclosure Certificate may be waived,provided that the following conditions are satisfied:
(a)the amendment or waiver,if it relates to annual or event information to be provided,
is made in connection with a change in circumstances that arises from a change in legal
requirements,change in law,or change in the identity,nature,or status of the Agency,or type of
business conducted;
(b) the undertakings herein, as proposed to be amended or waived, would, in the
opinion of nationally recognized bond counsel,have complied with the requirements of the Rule
at the time of the primary offering of the Bonds, after taking into account any amendments or
interpretations of the Rule,as well as any change in circumstances;
(c) the proposed amendment or waiver (i) is approved by holders of the Bonds in the
manner provided in the Authority Indenture for amendments to the Authority Indenture with
the consent of the Authority Bondholders, or (ii) does not, in the opinion of the Trustee or
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13093-04 JH:CKL 03/05/99
nationally recognized bond counsel, materially impair the interests of Authority Bondholders;
and
(d) no amendment increasing or affecting the obligations or duties of the Dissemination
Agent or the Trustee shall be made without the consent of either such party.
Section 9. Additional Information Nothing in this Disclosure Certificate shall be
deemed to prevent the Agency from disseminating any other information, using the means of
dissemination set forth in this Disclosure Certificate or any other means of communication, or
including any other information in any Annual Deport or notice of occurrence of a Listed Event,
in addition to that which is required by this Disclosure Certificate. if the Agency chooses to
include any information in any Annual Report or notice of occurrence of a Listed Event in
addition to that which is specifically required by this Disclosure Certificate, the Agency shall
have no obligation under this Disclosure Certificate to update such information or include it in
any future Annual Report or notice of occurrence of a Listed Event.
Section 10. Default In the event of a failure of the Agency to comply with any provision
of this Disclosure Certificate, the Trustee at the written request of any Participating
Underwriter or the holders of at least 25%in aggregate amount of Outstanding Bands,shall,but
only to the extent indemnified to its satisfaction from and against any loss, cost, expense or
liability of any kind whatsoever, including, without limitation, fees and expenses of its
attorneys and additional fees and expenses of the Trustee, or any holder or beneficial owner of
the Bonds may take such actions as may be necessary and appropriate, including seeking
mandate or specific performance by court order, to cause the Agency to comply with its
obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall
not be deemed an Event of Default under the Indenture, and the sole remedy under this
Disclosure Certificate in the event of any failure of the Agency to comply with this Disclosure
Certificate shall be an action to compel performance.
Section 11. Duties, Immunities and Liabilities of Dissemimtion Agent. The
Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure
Certificate,and the Agency agrees to indemnify and save the Dissemination Agent, its officers,
directors,employees and agents,harmless against any loss,expense and liabilities which it may
incur arising out of or in the exercise or performance of its powers and duties hereunder,
including the costs and expenses (including attorneys fees) of defending against any claim of
liability, but excluding liabilities due to the Dissemination Agent's negligence or willful.
misconduct.The Dissemination Agent shall be paid compensation by the Agency for its services
provided hereunder in accordance with its schedule of fees as amended from time to time and
all expenses, legal fees and advances made or incurred by the Dissemination. Agent in the
performance of its duties hereunder, but such amounts shall be payable solely from Tax
Revenues available for such purpose.The Dissemination Agent shall have no duty or obligation
to review any information provided to it by the Agency and shall not be deemed to be acting in
any fiduciary capacity for the Agency, the Bondholders, or any other party. The obligations of
the Agency under this Section shall survive resignation or removal of the Dissemination Agent
and payment of the Bonds.
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13093-04 JH:CKL 03/03/99
Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of
the Agency, the Dissemination Agent, the Trustee, the Participating Underwriter and holders
and beneficial owners from time to time of the Bonds and the Bunds, and shall create no rights
in any other person or entity.
Date: April 1999
CONTRA COSTA COUNTY
REDEVELOPMENT AGENCY
By
Executive Director
The undersigned hereby agrees to act as
Dissemination Agent pursuant to the
foregoing Continuing Disclosure Certificate
U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
Its:
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?3093-04 JH:CKL 03/05/99
EXHIBIT A
NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD
OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: County of Contra Costa Public Financing Authority
Name of Bond Issue: County of Contra Costa Public Financing Authority 1998 Tax
Allocation Revenue Bonds (Pleasant Hill BART, .North Richmond,
Bay Point,Rodeo and Oakley Redevelopment Project Areas)
Date of Issuance: April 1999
NOTICE IS HEREBY GIVEN that the Contra Costa County Redevelopment Agency (the
"Agency") has not provided an Annual Report with respect to the above-named Bonds as
rewired by Section 3 of the Continuing Disclosure Certificate dated March 1, 1999 executed by
the Agency for the benefit of the holders and beneficial owners of the above-referenced bonds.
The Agency anticipates that the Annual Report will be filed by
Dated:
CONTRA. COSTA COUNTY
REDEVELOPMENT AGENCY
By:
Its:
cc: Trustee
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13093-04 JH:CKL 3/15/99
PURCHASE AGREEMENT
April 1999
County of Contra.Costa Public Financing Authority
651 Pine Street,North Wing,4th Floor
Martinez, California 94553-1295
County of Contra Costa Public Financing Authority
1998 Tax Allocation Revenue Bonds
(Pleasant Hill BART,North Richmond,Bay Point,Rodeo and
Oakley Redevelopment Project Areas)
Ladies and Gentlemen.
Stone&Youngberg LLC(the"Underwriter")offers to enter into this Purchase Agreement
(the "Purchase Agreement") with the County of Contra Costa Public Financing Authority (the
"Authority"),which upon your acceptance of this offer will be binding upon you and upon the
Underwriter. Terms not otherwise defined herein shall have the same meanings as set forth in
the Indenture,described below. This offer is made subject to your acceptance of this Purchase
Agreement on or before 5:00 p.m., Pacific Standard Time, on the date written above.
1. Purchase and Sale. Upon the terms and conditions and in reliance upon the
representations, warranties and covenants herein, the Underwriter hereby agrees to purchase
from the Authority,and the Authority hereby agrees to sell to the Underwriter, all (but not less
than all) of the $ County of Contra Costa Public Financing Authority 1998 Tax
Allocation Revenue Bonds (Pleasant Hill BART, North Richmond, Bay Point, Rodeo and
Oakley Redevelopment Project Areas) (the "Bonds"), at the purchase price of
$ (the "Purchase Price") (being the principal amount of the Bonds of
$ less an underwriter's discount of $ and an original issue discount of
The Purchase Price is to be paid on the Closing Date, as hereinafter defined.
The Authority, a joint exercise of powers authority formed by the County of Contra
Costa (the "County"') and the Contra Costa County Redevelopment Agency (the "Agency"),
will issue the Bonds pursuant to that certain Indenture of Trust, dated as of March 1, 1999, by
and between the Authority and U.S. Bank Trust National Association, as trustee (the
„Trustee"). The Bonds are special, limited obligations of the Authority, payable exclusively
from, and secured by a lien on Revenues (as defined in the Indenture). The Bonds shall be
dated as of the Closing Date and shall bear interest at the rates and shall mature as of the
dates and in the amounts,all as set forth in the attached Exhibit A. The Bonds shall be subject
to mandatory and optional redemption as described in the Indenture.
The Authority will use proceeds of the Bonds to (i) finance acquisition and construction
by the Authority of certain public capital improvements and (ii) make five separate loans (the
"Loans") to the Agency,pursuant to five separate loan agreements, each dated as of March 1,
1999 (the `Loan Agreements"), and the Agency will repay the Loans from tax increment
revenues(„Tax Revenues")generated in each of five project areas (the "Project Areas"). (i) the
Pleasant Bill BART Station Redevelopment Project Area, (ii) the North Richmond
Redevelopment Project Area, (iii) the Bay Point Redevelopment Project Area (formerly known
as the West Pittsburg Redevelopment Project Area), (iv) the Rodeo Redevelopment Project Area
and (v) the Oakley Redevelopment Project Area. The Agency's pledge of Tax Revenues
generated in the West Pittsburg/Bay Point, Pleasant Hill BART and North Richmond Project
Areas to repayment of the Loans relating to those Project Areas is on a parity with its pledge of
Tax Revenues to payment of certain outstanding obligations of the Agency (the "Existing Parity
Obligations").
The Agency will apply the proceeds of the Loans (i) to pay the costs of issuing the
Bonds, (ii) to establish five reserve funds for repayment of the Loans under the Loan
Agreements, (iii) to establish, pursuant to that certain Escrow Deposit and Trust Agreement,
dated as of March 1, 1999 (the "Escrow Agreement"),by and among the Agency, the Authority
and U.S. Bank Trust National Association, as escrow bank (the "Escrow Bank"), an escrow
fund to provide for the advance refunding of a portion of the Authority's 1992 Tax Allocation
Revenue Bonds, Series A (Pleasant Dill, North Richmond, Nest Pittsburg and Oakley
Redevelopment Project Areas) (the "1992 Bonds") by providing for the prepayment of a
portion of four loan agreements,each dated as of May 1, 1992 (the "1992 Loan Agrements")by
and between the Agency and the Authority, and (iv) to finance certain redevelopment projects
of the Agency.
The Indenture, the Loan Agreements and the Escrow Agreement are sometimes referred
to herein as the "Bond Documents".
Issuance of the Bonds is authorized by a resolution of the Authority adopted on March
23, 1999 (the "Authority Resolution"), a resolution of the Agency adopted on March 23, 1999
(the "Agency Resolution") and a resolution of the County Board of Supervisors adopted on
March 23,1999 (the "County Resolution") (collectively,the "Resolutions").
[The Bonds will be insured by a municipal bond insurance policy (the "Policy") to be
issued by (the "Insurer").]
2. .Bona .Fide Public OffMng. The Underwriter agrees to make a bona fide public
offering of all of the Bonds, at prices not in excess of the initial public offering yields or prices
set forth on the cover page of the Official Statement. The Bonds may be offered and sold to
certain dealers at prices lower than such initial public offering prices.
3. Otf tial Statement The Authority shall deliver or cause to be delivered to the
Underwriter promptly after acceptance of this Purchase Agreement copies of the Official
Statement relating to the Bonds,dated the date hereof, with such changes from the Preliminary
Official Statement as have been noted thereon (the "Official Statement"). The Authority
authorizes the Official Statement, including the cover page and Appendices thereto and the
information contained therein,to be used in connection with the sale of the Bonds and ratifies,
confirms and approves the use and distribution by the Underwriter for such purpose, prior to
the date hereof, of the Preliminary Official Statement dated March _ , 1999 (the "Preliminary
Official Statement"). The Authority deems such Preliminary Official Statement final as of its
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date for purposes of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended
("Rule 15c2-12"),except for information allowed to be omitted by Rule 15c2-12. The Authority
also agrees to delivery to the Underwriter, at the Authority's sole cost and at such address as
the Underwriter shall specify,as many copies of the Official Statement as the Underwriter shall
reasonably request as necessary to comply with paragraph (b)(4) of Rule 15c2-12 with Rule G-
32 and all other applicable rales of the Municipal Securities Rulemaking Board. The Authority
agrees to deliver such copies of the Official Statement within seven (7) business days after the
date hereof. such Official Statement shall contain all information previously permitted to be
omitted by Rule 15c2-12. The Underwriter agrees to give written notice to the Authority of the
date after which the Underwriter shall no longer be obligated to deliver Official Statements
pursuant to paragraph (b)(4) of the Rule which shall be no later than 25 days after the end of
the underwriting period.
The Underwriter agrees to promptly file a copy of the final Official Statement, including
any supplements prepared by the Authority, with a nationally recognized municipal securities
information repository, and to take any and all other actions necessary to comply with
applicable securities and Exchange Commission rules and Municipal Securities Rulemaking
Board rules governing the offering, sale and delivery of the Bonds to the ultimate purchasers
thereof.
4. Repmsentations, Warranties and Agreements of the Authority. 'Me Authority
represents and warrants to the Underwriter that, as of the Closing Date:
(a) . The Authority is a joint exercise of powers authority, organized and
existing under the laws of the State of California (the "State"), including the provisions
of Articles 1 through 4 (commencing with section 6500) of Chapter 5 of Division 7 of
"title 1 of the Government Code of the state (the "Act") and is authorized, among other
things,(i) to issue bonds,such as the Bonds, for the purposes described herein, and (ii)
to secure the Bonds in the manner contemplated by the Indenture.
(b) The Authority has the full right, power and authority (i) to enter into the
Indenture, the Loan Agreements and the Escrow Agreement, (ii) to enter into this
Purchase Agreement, (iii) to issue, sell and deliver the Bonds to the Underwriter as
provided herein, (iv) to carry out and consummate all other transactions on its part
contemplated by each of the aforesaid documents,and the Authority has complied with
all provisions of applicable law in all matters relating to such transactions.
(c) The Authority has duly authorized (i) the execution and delivery of the
Bonds and the execution, delivery and due performance by the Authority of this
Purchase Agreement,the Indenture,the Loan Agreements and the Escrow Agreement, (ii)
the distribution and use of the "deemed final" Preliminary Official statement and the
execution,delivery and distribution of the final Official Statement and (iii) the talking of
any and all such action as may be required on the part of the Authority to carry out, give
effect to and consummate the transactions on its part contemplated by such
instruments. All consents or approvals necessary to be obtained by the Authority in
connection with the foregoing have been received, and the consents or approvals so
received are still in full force and effect.
(d) The information relating to the Authority, the Agency, the County and the
Project Areas contained in the Official Statement will be true and correct: in all material
respects,and the Official Statement will not contain any untrue or misleading statement
of a material fact relating to the Authority, the County, the Agency and the Project
Areas or ornit to state any material fact relating to the Agency or the City necessary to
make the statements therein, in the light of the circumstances under which they were
made,not misleading.
(e) Neither the execution by the Authority of the Indenture, the Loan
Agreements or the Escrow Agreement and execution and delivery by the Authority of
this Purchase Agreement and of the Bonds nor the consummation of the transactions on
the part of the Authority contemplated herein or therein or the compliance with the
provisions hereof or thereof will conflict with, or constitute on the part of the Authority
a violation of,or a breach of or default under, (i) any statute, indenture,mortgage,note
or other agreement or instrument to which the Authority is a party or by which it is
bound, (ii) any provision of the State Constitution, or (iii) any existing law, rule,
regulation,ordinance,judgment,order or decree to which the Authority (or the members
of the Authority or any of its officers in their respective capacities as such) is subject.
(f) Neither the Authority, the County nor the Agency has ever been in default
at any time, as to principal of or interest on any bonds or similar obligations which it
has issued,including those which it has issued as a conduit for another entity, except as
otherwise specifically disclosed in the Official Statement; and the Authority has not
entered into any contract or arrangement of any kind which might give rise to any lien or
encumbrance on the Revenues pledged to the payment of the Bonds except as will be
specifically disclosed in the Official Statement.
(g) Except as will be specifically disclosed in the Official Statement, there is no
action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any
court, public board or body, which has been served on the Authority or, to the best
knowledge of the Authority, threatened, which in any way questions the powers of the
Authority referred to in paragraph(b)above,or the validity of any proceeding taken by
the Authority in connection with the issuance of the Bonds, or wherein an unfavorable
decision, ruling or finding could materially adversely affect the transactions
contemplated by this Purchase Agreement, the Indenture, the Loan Agreements or the
Escrow Agreement, or which, in any way, could adversely affect the validity or
enforceability of the Indenture, the Loan Agreements, the Escrow Agreement, the Bonds
or this Purchase Agreement or, to the knowledge of the Authority, which in any way
questions the exclusion from gross income of the recipients thereof the interest on the
Bonds for federal income tax purposes or in any other way questions the status of the
Bonds under federal or state tax laws or regulations.
(h) Any certificate signed by any official of the Authority and delivered to the
Underwriter in connection with the offer or sale of the Bonds shall be deemed a
representation and warranty by the Authority to the Underwriter as to the truth of the
statements therein contained.
(i) The Authority has not been notified of any listing or proposed listing by the
Internal Revenue Service to the effect that it is a bond issuer whose arbitrage
certifications may not be relied upon.
S. Covenants of the Authority. The Authority covenants with the Underwriter as of the
Closing Date as follows:
(a) The Authority will cooperate with the Underwriter in qualifying the Bonds
for offer and sale under the securities or Blue Sky laws of such jurisdictions of the
United States as the Underwriter may request; provided, however, that the Authority
shall not be required to consent to suit or to service of process in any jurisdiction. The
Authority consents to the use by the Underwriter in the course of complying with the
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securities or Blue Sky laws of the various jurisdictions of the documents relating to the
Bonds, subject to the right of the Authority to withdraw such consent for cause by
written notice to the Underwriter.
(b) The Authority shall provide the Underwriter with such information
regarding the Authority's and the Agency's current financial condition and ongoing
operations as the Underwriter may reasonably request.
(c) The Authority will take any and all steps within its control that are
necessary to cause the Bonds to be issued and delivered to the Underwriter on the
Closing Date, including, but not limited to, the execution of any certification deemed
necessary by Bond Counsel as a condition to the delivery of the Bond Counsel Opinion.
(d) The Authority consents to the Agency, on behalf of the Authority and the
Agency,covenanting and agreeing to execute an undertaking (the ""Continuing Disclosure
Certificate") to provide ongoing disclosure about the Bonds, the Agency and the Project
Areas,for the benefit of the owners of the Bonds as required by Section (b)(5)(i) of Mule
15c2-12, substantially in the form attached to the Preliminary Official Statement.
(e) The Authority agrees to cooperate with the Underwriter in the preparation
of any supplement or amendment to the Official Statement deemed necessary by the
Underwriter to comply with the Rule and any applicable rule of the Municipal Securities
Rulemaking Board.
(f) If at any time prior to the Closing Date, any event occurs with respect to
the Authority as a result of which the Official Statement, as then amended or
supplemented,might include an untrue statement of a material fact,or omit to state any
material fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, the Authority shall promptly notify the
Underwriter in writing of such event. Any information supplied by the Authority for
inclusion in any amendments or supplements to the Official Statement will not contain
any untrue or misleading statement of a material fact relating to the Authority, the
County, the Agency or the Project Areas or omit to state any such fact necessary to
make the statements therein, in the light of the circumstances under which they were
made,not misleading.
(g) - The Authority will not knowingly take or omit to take any action, which
action or omission will in any way cause the proceeds from the sale of the Bonds to be
applied in a manner other than as provided in the Indenture,the Loan Agreements or the
Escrow Agreement or which would cause the interest on the Bonds to be includable in
gross.income for federal income tax purposes.
6. Closing. On April . 1999, or at such other date and times as shall have been
mutually agreed upon by the Authority and the Underwriter (the "Closing Date"), the
Authority will deliver or cause to be delivered to the Underwriter the certificates, opinions and
documents hereinafter mentioned, each of which shall be dated as of the Closing Date. The
activities relating to the execution and delivery of the Bonds, opinions and other instruments as
described in Section 7 of this Purchase Agreement shall occur on the Closing Date. The delivery
of the certificates, opinions and documents as described herein shall be made at the offices of
Quint & Thimn- g LLP, San Francisco, California ("Bond Counsel"), or at such other place as
shall have been mutually agreed upon by the Authority and the Underwriter. Such delivery is
herein called the"Closing"
-5-
The Bonds will be prepared and physically delivered to the Trustee on the Closing Date
in the form of a separate single fully registered bond for each of the maturities of the Bonds.
The Bonds shall be registered in the name of the Cede & Co., as registered owner and nominee
for The Depository Trust Company ("DTC"), New York, New York. The Bonds will be
authenticated by the Trustee in accordance with the terms and provisions of the Indenture and
shall be delivered to DTC prior the Closing Date as required by DTC to assure delivery of the
Bonds on the Closing Date. It is anticipated that CUSIP identification numbers will be printed
on the Bonds, but neither the failure to print such number on any Bonds nor any error with
respect thereto shall constitute cause for a failure or refusal by the Underwriter to accept
delivery of and pay for the Bonds in accordance with the terms of this Purchase Agreement.
The Underwriter shall pay the CUSIP Service Bureau charge for the assignment of such numbers.
On or before 10:00 a.m. San Francisco Time, on the Closing Date, the Authority will
deliver, or cause to be delivered, the Bonds to DTC, in definitive form duly executed and
authenticated by the Trustee,and the Underwriter will pay the Purchase Price of the Bonds by
delivering to the Trustee,for the account of the Authority a wire transfer in federal funds of the
Purchase Price payable to the order of the Trustee.
7. Closing Conditions. The obligations of the Underwriter hereunder shall be subject to
the performance by the Authority of its obligations hereunder at or prior to the Closing Date
and are also subject to the following conditions:
(a) the representations, warranties and covenants of the Authority contained
herein shall be true and correct in all material respects as of the Closing Date;
(b) . as of the Closing Date, there shall have been no material adverse change in
the financial condition of the Authority,the Agency or the Project Areas;
(c) as of the Closing Date,all official actions of the Authority and the Agency
relating to this Purchase Agreement, the Loan Agreements, the Escrow Agreement and
the Indenture,as applicable,shall be in full force and effect;
(d) as of the Closing Date, the Underwriter shall receive the following
certificates, opinions and documents, in each case satisfactory in form and substance to
the Underwriter:
(i) a copy of the Indenture, as duly executed and delivered by the
Authority and the Trustee,and a copy of each of the Loan Agreements, as duly
executed and delivered by the Authority and the Agency;
(ii) a copy of the Escrow Agreement, as duly executed and delivered
by the Authority and the Escrow Bank;
(iii) an opinion of Bond Counsel, dated the Closing Date and
addressed to the Underwriter,in substantially the form attached as Appendix E
to the Preliminary Official Statement;
(iv) a certificate, dated the Closing Date, of the Authority executed by
the Chair or Executive Director of the Authority (or other duly appointed officer
of the Authority authorized by the Authority by resolution of the Authority) to
the effect that(A) there is no action,suit,proceeding or investigation at law or in
equity before or by any court,public board or body which has been served on the
Authority or, to the knowledge of the Authority, threatened against or affecting
the Authority to restrain or enjoin the Authority's participation in, or in any way
-6-
contesting the existence of the Authority or the powers of the Authority with
respect to, the transactions contemplated by this Purchase Agreement, the
Indenture, the Loan Agreements and the Escrow Agreement, and consummation
of such transactions; and (B)the representations and warranties of the Authority
contained in this Purchase Agreement are true and correct in all material
respects,and the Authority has complied with all agreements and covenants and
satisfied all conditions to be satisfied at or prior to the Closing Date as
contemplated by the indenture, the Loan Agreements, the Escrow Agreement,
and this Purchase Agreement;
(v) an opinion or opinions of counsel to the Authority, dated the
Closing Date and addressed to the Authority and the Underwriter to the effect
that:
(A) the Authority is a joint exercise of powers authority,
organized and existing under the laws of the State,including the Act;
(B) the Authority Resolution approving and authorizing the
execution and delivery of the Bonds,the indenture, the Loan Agreements,
the Escrow Agreement, this Purchase Agreement and the Official
Statement were duly adopted at meetings of the Authority which were
called and held pursuant to law and with all public notice required by
law and at which a quorum was present and acting throughout and have
not been amended from the dates of their respective adoption;
(C) the Indenture, the Loan Agreements, the Escrow Agreement
and this Purchase Agreement are valid and binding agreements of the
Authority, enforceable against the Authority in accordance with their
respective terms subject to the laws relating to bankruptcy, insolvency,
reorganization of creditors' rights generally and to the application of
equitable principles;
(D) to the best of such counsel's knowledge after due
investigation,there is no action,suit,proceeding or investigation at law or
in equity before or by any court, public board or body pending or
threatened against or affecting the Authority to restrain or enjoin the
Authority's participation in, or in any way contesting the existence of the
Authority or the powers of the Authority with respect to, the transactions
on the part of the Authority contemplated by the Official Statement, this
Purchase Agreement,the Indenture,the Loan Agreements and the Escrow
Agreement and the consummation of such transactions;
(E) there does not exist any action, suit, proceeding or
investigation pending with respect to which the Authority has been
served with process, or to the best of such counsel's knowledge,
threatened, which if adversely determined, could materially adversely
affect (a) the financial position of the Authority; (b) the ability of the
Authority to perform its obligations under the Bond Documents; or (c) the
allocation and payment of the Revenues to the Authority and the other
security for the Bonds provided by the Bond Documents;
(F) to the best of such counsel's knowledge after due
investigation, the execution and delivery by the Authority of the Bonds,
the indenture,the Loan Agreements,the Escrow Agreement, this Purchase
-7-
Agreement and compliance by the Authority with the provisions thereof,
ander the circumstances contemplated thereby, do not and will not
conflict with or constitute on the part of the Authority a breach of or
default under any agreement or other instrument to which the Authority is
a party or by which it is bound or any court order or consent decree to
which the Authority is subject, and
(C) the Official Statement does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein with respect to the Authority or the County, in light of
the circumstances under which they were made,not misleading;
(vi) a certificate, dated the Closing Date, of the Agency executed by
the Chair or Executive Director of the Agency(or other duly appointed officer of
the Agency authorized by the Agency by resolution of the Agency) to the effect
that:
(A) the Agency is a public body, corporate and politic,
organized and existing under the laws of the State, including the
Community Redevelopment Law of the State of California, constituting
Part 1 of Division 24 of the Health and Safety Code (the "Redevelopment
Law"),and is authorized,among other things, (i) to incur indebtedness of
the type contemplated by the Loan Agreements, and (ii) to pledge as a
source of repayment of the Loans its Tax Revenues (as defined in the
Loan Agreements)in the manner contemplated by the Loan Agreements;
(B) the Agency has the full right, power and authority to enter
into the Loan Agreements, the Continuing Disclosure Certificate and the
Escrow Agreement and to carry out and consummate all other
transactions on its part contemplated by the Loan Agreements, the
Continuing Disclosure Certificate and the Escrow Agreement, and the
Agency has complied with all provisions of applicable 'law in all matters
relating to such transactions;
(C) the Agency has duly authorized (i) the execution, delivery
and due performance by the Agency of the Loan Agreements, the
Continuing Disclosure Certificate and the Escrow Agreement, (ii) the
distribution and use of the "deemed final" Preliminary Official Statement
and the execution, delivery and distribution of the final. Official
Statement and (iii) the taking of any and all such action as may be
required on the part of the Agency to carry out, give effect to and
consummate the transactions on its part contemplated by such
instruments.-
(D)
nstruments;(D) the information relating to the Agency and the Project
Areas is true and correct in all material respects, and the Official
Statement does contain any untrue or misleading statement of a material
fact relating to the Agency or the Project Areas or omit to state any
material fact relating to the Agency or the Project Areas necessary to
make the statements therein,in the light of the circumstances under which
they were made,not misleading;
(E) neither the execution by the Agency of the Loan
Agreements, the Continuing Disclosure Certificate or the Escrow
Agreement nor the consummation of the transactions on the part of the
Agency contemplated therein or the compliance with the provisions
thereof will conflict with, or constitute on the part of the Agency a
violation of, or a breach of or default under, (i) any statute, indenture,
mortgage,note or other agreement or instrument to which the Agency is a
party or by which it is bound, (ii)any provision of the State Constitution,
or (iii) any existing law, rule, regulation, ordinance, judgment, order or
decree to which the Agency (or the members of the Agency or any of its
officers in their respective capacities as such) is subject;
(F) there is no action, suit, proceeding or investigation at law
or in equity before or by any court, public board or body which has been
served on the Agency or, to the knowledge of the Agency, threatened
against or affecting the Agency to restrain or enjoin the Agency's
participation in, or in any way contesting the existence of the Agency or
the powers of the Agency with respect to, the transactions contemplated
by this Purchase Agreement, the Indenture, the Continuing Disclosure
Certificate, the Loan Agreements and the Escrow Agreement, and
consummation of such transactions,
(G) the Agency has complied with all agreements and
covenants and satisfied all conditions to be satisfied at or prior to the
Closing Date as contemplated by the Loan Agreements, the Continuing
Disclosure Certificate and the Escrow Agreement,and
(H) in connection with execution and delivery of the Loan
Agreements relating to the Forth Richmond, Test Pittsburg/Bay Point
and Pleasant Hill BART project Areas, the Agency has complied with the
Parity Debt provisions of the documents relating to the Existing Parity
Obligations
(vii) an opinion of counsel to the Agency, dated the Closing Bate and
addressed to the Agency and the Underwriter to the effect that:
(A) the Agency is a public body, corporate and politic,
organized and existing under the laws of the State, including the
Redevelopment Law,
(B) the Agency Resolution approving and authorizing the
execution and delivery of the Loan Agreements,the Continuing Disclosure
Certificate and the Escrow Agreement was duly adopted at a meeting of
the Agency which was called and held pursuant to law and with all
public notice required by law and has not been amended from the date of
its adoption;
(C) the Loan Agreements, the Continuing Disclosure Certificate
and the Escrow Agreement are valid and binding agreements of the
Agency, enforceable against the Agency in accordance with their
respective terms subject to the laws relating to bankruptcy, insolvency,
reorganization of creditors' rights generally and to the application of
equitable principles;
(D) to the best of such counsel's knowledge after due
investigation,there is no action,suit,proceeding or investigation at law or
-9-
in equity before or by any court, public board or body pending or
threatened against or affecting the Agency to restrain or enjoin the
Agency's participation in, or in any way contesting the existence of the
Agency or the powers of the Agency with respect to, the transactions on
the part of the Agency contemplated by the Official Statement, the Loan
Agreements, the Continuing Disclosure Certificate, the Indenture and the
Escrow Agreement and the consummation of such transactions;
(E) to the best of such counsel's knowledge, after due
investigation, there does not exist any action, suit, proceeding or
investigation pending with respect to which the Agency has been served
with process, or to the best of such counsel's knowledge, threatened,
which if adversely determined, could materially adversely affect (a) the
financial position of the Agency; (b) the ability of the Agency to perform
its obligations under the Loan Agreements, the Continuing Disclosure
Certificate or the Escrow Agreement; or(c)the allocation and payment of
the Tax Revenues to the Agency and the other security for the Agency"s
obligation to repay the Loans provided by the Loan Agreements;
(F) to the best of such counsel's knowledge after due
investigation, the execution and delivery by the Agency of the Loan
Agreements, the Continuing Disclosure Certificate and the Escrow
Agreement and compliance by the Agency with the provisions thereof,
under the circumstances contemplated thereby, do not and will not
conflict with or constitute on the part of the Agency a breach of or default
under any agreement or other instrument to which the Agency is a party
or by which it is bound or any court order or consent decree to which the
Agency is subject;
(G) to the best of such counsel's knowledge, after due
investigation,the portions of the Official Statement describing the Agency
and the Project Areas (excluding therefrom the reports, financial and
statistical data and forecasts therein as to which no opinion need be
expressed) do not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made,not misleading;
(viii) an opinion of counsel to the Trustee and Escrow Bank, dated the
Closing Date and addressed to the Authority and the Underwriter, in
substantially the form as may be reasonably requested by the parties hereto;
(ix) a certificate, dated the Closing Date, of the Trustee and Escrow
Bank,signed by a duly authorized officer of the Trustee and Escrow Bank., to the
effect that (A) the Trustee and Escrow Bank are duly organized and validly
existing as a national banking association, with full corporate power to
undertake the trust of the Indenture and the Escrow Agreement, as applicable;
(B) the Trustee and Escrow Bank have duly authorized, executed and delivered
the Indenture and Escrow Agreement and by all proper corporate action has
authorized the acceptance of the trust of the Indenture or Escrow Agreement;
and (C) to the best of such officers knowledge, there is no action, suit,
proceeding or investigation at law or in equity before or by any court, public
board or body which has been served on the Trustee or Escrow Bank (either in
state or federal courts),or to the knowledge of the Trustee or Escrow Bank which
would restrain or enjoin the execution or delivery of the Indenture or Escrow
-10-
Agreement,as applicable,or which would affect the validity or enforceability of
the Indenture or the Escrow Agreement or the Trustee's and Escrow Bank's
participation in, or in any way contesting the powers or the authority of the
Trustee and the Escrow Bank with respect to, the transactions contemplated by
the Indenture and the Escrow Agreement or any other agreement, document or
certificate related to such transactions;
(x) a supplemental opinion of Bond Counsel, dated the Closing Date
and addressed to the Underwriter,to the effect that:
(A) this Purchase Agreement has been duly authorized,
executed and delivered by the Authority, and assuming the valid
execution and delivery by the Underwriter, is valid and binding upon the
Authority, subject to the laws relating to bankruptcy, insolvency,
reorganization of creditors' rights generally and to the application of
equitable principles;and
(B) the Bonds are exempt from registration pursuant to Section
3(a)(2) of the Securities Act of 1933, as amended, and the Indenture is
exempt from qualification pursuant to the Trust Indenture Act of 1939, as
amended; and
(C) the statements contained in the Official Statement under
the captions "THE BONDS", "SECURITY FOR THE BONDS", "TAX
MATTERS" and "APPENDIX A" and "'APPENDIX E°" thereto are
accurate insofar as such statements purport to expressly summarize
certain provisions of the Bonds, the Indenture, the Loan Agreements, the
Escrow Agreement and Bond Counsel's opinion concerning federal tax
matters relating to the Bonds.
(xi) a letter of Jones Fall, A Professional Law Corporation, as
disclosure counsel to the Authority, dated the Closing Date and addressed to the
Authority and the Underwriter stating that based upon its participation in the
preparation of the Official Statement and without having undertaken to
determine independently the fairness, accuracy or completeness of the
statements contained in the Official Statement, such counsel has no reason to
believe that,as of the date of the date thereof, the Official Statement (excluding
therefrom the reports, financial and statistical data and forecasts therein, the
information included in the Appendices thereto, information relating to The
Depository Trust Company and its book-entry system as to which no opinion
need be expressed) contains any untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein,in the light of the circumstances under which they were made,
not misleading;
(xii) an executed copy of the Continuing Disclosure Certificate;
(xi.ii) an Arbitrage Certificate in the form satisfactory to Bond Counsel;
(xiv) the final Official Statement executed by an authorized officer of
the Authority;
(xv) certified copies of the Agency Resolution,the Authority Resolution
and the County Resolution;
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(xvi) specimen Bonds;
(xvii) rating letters from S&P and Moody°s;
[(xviii)an executed Policy and a certificate and opinion of the Insurer as
to the validity and due authorization,execution and delivery of the Policyj
(xix) a Verification Report of Ernst 8r Young LLP, with respect to the
sufficiency of amounts deposited under the Escrow Agreement;
(xx) a letter from Katz Hollis, the Agency's fiscal consultant,
consenting to the use of its report in the Official Statement, including its use an
appendix;
(xxi) certificates in the forms attached hereto as Exhibit B-1 and
Exhibit B-2 executed by the Authority and the Agency,respectively;
(xxii) evidence of compliance by the Agency with the Parity Debt
provisions of the documents relating to the Existing Parity Obligations;and
(xxiii) such additional legal opinions,certificates, instruments and other
documents as the Underwriter may reasonably deem necessary to evidence the
truth and accuracy as of the time of the Closing Date of the representations and
warranties of the Authority contained in this Purchase Agreement and the due
performance or satisfaction by the Authority at or prior to such time of all
agreements then to be performed and all conditions then to be satisfied by the
Authority pursuant to this Purchase Agreement.
8. Termination. The Underwriter shall have the right to cancel its obligations to
purchase the Bonds if between the date hereof and the Closing Date:
(a) a decision with respect to legislation shall be reached by a committee of the
House of Representatives or the Senate of the Congress of the United States, or
legislation shall be favorably reported by such a committee or be introduced, by
amendment or otherwise,in or be passed by the House of Representatives or the Senate,
or recommended to the Congress of the United States for passage by the President of the
United States,or be enacted or a decision by a federal court of the United States or the
United States Tax Court shall have been rendered, or a ruling, release, order, regulation
or offering circular by or on behalf of the United States Treasury Department, the
Internal Revenue Service or other governmental agency shall have been made or proposed
to be made having the purpose or effect,or any other action or event shall have occurred
which has the purpose or effect, directly or indirectly, of adversely affecting the federal
income tax consequences of owning the Bonds, including causing interest on the Bonds
to be included in gross income for purposes of federal income taxation, or imposing
federal income taxation upon revenues other income of the general character to be
derived by the Authority or by any similar body under the Indenture or similar
documents or upon interest received on obligations of the general character of the Bonds,
or the Bonds which, in the reasonable opinion of the Underwriter, materially adversely
affects the market price of or market for the Bonds; or
(b) legislation shall have been enacted, or considered for enactment with an
effective date prior to the Closing bate, or a decision by a court of the United States
shall have.been rendered, the effect of which is that of the Bonds, including any
-12-
underlying obligations, or the Indenture, as the case may be, is not exempt from the
registration, qualification or other requirements of the Securities Act of 1933, as
amended and as then in effect,the Securities Exchange Act of 1934, as amended and as
then in effect, or the Trust Indenture Act of 1939,as amended and as then in effect; or
(c) a stop order, ruling, regulation or offering circular by the Securities and
Exchange Commission or any ether governmental agency having jurisdiction of the
subject matter shall have been issued or made or any other event occurs, the effect of
which is that the issuance, offering or sale of the Bonds, including any underlying
obligations,or the execution of the Indenture, as contemplated hereby or by the Official
Statement, is or would be in violation of any provisions of the federal securities laws,
including the Securities Act of 1933, as amended and as then in effect, the Securities
Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of
1939,as amended and as then in effect; or
(d) any event shall have occurred or any information shall have become known
to the Underwriter which causes the Underwriter to reasonably believe that the Official
Statement as then amended or supplemented includes an untrue statement of a material
fact, or omits to state any material fact necessary to make the statements therein,in light
of the circumstances under which they were made,not misleading;or
(e) there shall have occurred any outbreak of hostilities or any national or
international calamity or crisis, including a financial crisis, the effect of which on the
financial markets of the United States is such as, in the reasonable judgment of the
Underwriter, would materially adversely affect the market for or market price of the
Bonds; or
(f) there shall be in force a general suspension of trading on the New York
Stock Exchange,the effect of which on the financial markets of the United States is such
as,in the reasonable judgment of the Underwriter,would materially adversely affect the
market for or market price of the Bonds; or
(g) a general banking moratorium shall have been declared by federal, New
York or California authorities; or
(h) any proceeding shall be pending or threatened by the Securities and
Exchange Commission against the Authority or the Agency;or
(i) additional material restrictions not in force as of the date hereof shall have
been imposed upon trading in securities generally by any governmental authority or by
any national securities exchange; or
(j) the New York Stock Exchange or other national securities exchange, or any
governmental authority, shall impose, as to the Bonds or obligations of the general
character of the Bonds,any material restrictions not now in force, or increase materially
those now in force, with respect to the extension of credit by, or the charge to the net
capital requirements of the Underwriter; or
(k) the declaration of bankruptcy by a state or any subdivision or
instrumentality of a state, which state, subdivision or instrumentality has a population
of over 500,000, any of which, in the reasonable opinion of the 'Underwriter, has a
materially adverse effect on the United States securities markets; or
-13-
(l) any change,which in the reasonable opinion of the Underwriter, materially
adversely affects the marketability of the Bonds or the financial condition of the
Authority or the Agency.
9. Contingency of Obligations. The obligations of the Authority hereunder are subject
to the performance by the Underwriter of its obligations hereunder.
10. Duration of Representations, Warranties, Agreements and Covenants. All
representations,warranties, agreements and covenants of the Authority shall remain operative
and in full force and effect, regardless of any investigations made by or on behalf of the
Underwriter or the Authority and shall survive the Closing Date.
11. Expenses. The Authority will pay or cause to be paid all reasonable expenses
incident to the performance of its obligations under this Purchase Agreement, including,but not
limited to, mailing or delivery of the Bonds, costs of printing the Bonds, printing, distribution
and delivery of the Preliminary Official Statement, the Official Statement and any amendment
or supplement thereto, the fees and disbursements of Bond Counsel, Disclosure Counsel,
counsel to the Authority and counsel to the Agency, the fees and expenses of the Authority's
and the Agency's accountants,fees of the Authority's financial adviser, fees of the verification
agent, any fees charged by investment rating agencies for the rating of the Bonds, fees of the
Trustee and Escrow Bank, bond insurance premiums, if any, and fees of California Municipal
Statistics. In the event this Purchase Agreement shall terminate because of the default of the
Underwriter, the Authority will, nevertheless, pay, or cause to be paid, all of the expenses
specified above to the extent it is obligated by other agreements to pay such expenses. The
Underwriter shall pay all advertising expenses incurred in connection with the public offering of
the Bonds, and all other expenses incurred by them or any of them in connection with their
public offering and distribution of the Bonds, including CMAC fees and CUSIP fees (including
out-of-pocket expenses and related regulatory expenses).
12. Notices. Any notice or other communication to be given to the Authority under this
Purchase Agreement may be given by delivering the same in writing to the Authority, 651 Pine
Street,North Wing,5th Floor, Martinez, California 94553-1295, Attention: Executive Director,
and any notice or other communication to be given to the Underwriter under this Purchase
Agreement may be given by delivering the same in writing to Edward O. Schifling, Stone &
Youngberg LLC,50 California Street,35th Floor,San Francisco,California 94111.
13 parties in Interest. This Purchase Agreement is made solely for the benefit of the
Authority and the Underwriter(including the successors or assigns of the Underwriter) and no
other person,including any purchaser of the Bonds,shall acquire or have any right hereunder or
by virtue hereof. .
14 Governing.Law. This Purchase Agreement shall be governed by and construed in
accordance with the laws of the State of California.
15. Beadings. The headings of the paragraphs of this Purchase Agreement are inserted
for convenience of reference only and shall not be deemed to be a part hereof.
16. Effectiveness. This Purchase Agreement shall become effective upon your
acceptance hereof.
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17. Counterparts. This Purchase Agreement may be executed in several counterparts
which together shall constitute one and the same instrument.
Very truly yours,
STONE &YOUNGBERG LLC.
By_._._
Edward G.Schilling,
Member
Accepted and agreed to as of
the date first above written:
COUNTY OF CONTRA COSTA PUBLIC
FINANCING AUTHORITY
By-
Executive Director
EXHIBIT A TO THE
PURCHASE AGREEMENT
MATURITY SCHEDULE
?maturities Principal Amounts Interest Rtes Price
Exhibit A
Page 1
EXHIBIT B-1 TO THE
PURCHASE AGREEMENT
CERTIFICATE OF THE COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY
REGARDING FINALITY OF PRELIMINARY OFFICIAL STATEMENT
The undersigned hereby certifies and represents that he is the duly appointed and acting
Executive Director of the County of Contra Costa Public Financing Authority (the "Authority"),
and as such is duly authorized to execute and deliver this Certificate and further hereby
certifies and reconfirms on behalf of the Authority as follows:
(1) This Certificate is delivered in connection with the offering and sale of the
County of Contra Costa Public Financing Authority 1998 Tax Allocation
Revenue Bonds (Pleasant Hill, North Richmond, Bay Point, Rodeo and Oakley
Redevelopment Project Areas) (the "Bonds") in order to enable Stone &
Youngberg LLC, as underwriter of the Bonds, to comply with Securities and
Exchange Commission Rule 15c2-12 under the Securities Exchange Act of 1934
(the "Rule").
(2) In connection with the offering and sale of the Bonds, there.has been prepared a
Preliminary Official Statement, setting forth information concerning the Bonds,
the Authority and the County(the "Preliminary Official Statement").
(3) As used herein, "Permitted Omissions" shall mean the offering price(s), interest
rate(s), selling compensation, aggregate principal amount, principal amount per
maturity,delivery dates,ratings and other terms of the Bonds depending on such
matters,all with respect to the Bonds.
(4) The, Preliminary Official Statement is, except for the Permitted Omissions,
deemed final within the meaning of Rule 15c2=12, and the information therein
concerning the Bonds, the Authority and the County is accurate and complete
except for the Permitted Omissions,
IN WITNESS WHEREOF, I have hereunto set my hand as of March . 1999,
COUNTY OF CONTRA COSTA PUBLIC
FINANCING AUTHORITY
By:
Executive Director
Exhibit B-1
Page 1
EXHIBIT B-2 TO THE
PURCHASE AGREEMENT
CERTIFICATE REGARDING FINALITY OF PRELIMINARY OFFICIAL STATEMENT
The undersigned hereby certifies and represents that he is the duly appointed and acting
Executive Director of the Contra Costa County Redevelopment Agency (the "Agency"), and as
such is duly authorized to execute and deliver this Certificate and further hereby certifies and
reconfirms on behalf of the Agency as follows.
(1) This Certificate is delivered in connection with the offering and sale of the
County of Contra Costa Public Financing Authority 1998 Tax Allocation
Revenue Bonds (Pleasant Hill, North Richmond, Bay Point, Rodeo and Oakley
Redevelopment Project Areas) (the "Bonds") in order to enable Mone &
Youngberg LLC, as underwriter of the Bonds, to comply with Securities and
Exchange Commission Rule 15c2-12 under the Securities Exchange Act of 1934
(the ""Rule"").
(2) In connection with the offering and sale of the Bonds, there has been prepared a
Preliminary Official Statement(the "Preliminary Official Statement"), setting
forth information concerning, in part, the Agency and its redevelopment project
areas (the "Project Areas").
(3) As used herein, "Permitted Omissions" shall mean the offering;price(s), interest
rate(s), selling compensation, aggregate principal amount, principal amount per
maturity,delivery dates,ratings and other terms of the Bonds depending; on such
matters,all with respect to the Bonds.
(4) The Preliminary Official. Statement is, except for the Permitted Omissions,
deemed final within the meaning of Rule 15c2-12, and the information therein
concerning the Agency and the Project Areas is accurate and complete except for
the Permitted Omissions.
IN WITNESS WHEREOF, I have hereunto set my hand as of March , 1999.
CONTRA COSTA COUNTY
REDEVELOPMENT AGENCY
By.
Executive Director
Exhibit B-1
Page 1
PROOF OF PUBLICATION
NOTICE aF ('
(20"(5.5 C.C.P.) PUSUCHIS 0� ��J{r;
NOTICE 1S HEREBY GIVEN
that the Board of Supervisors
STATE OCALIFORNIA of the County of Contra Costa, `
County off Contra Costa ta (the "County' on Tuesday,' �k
�3arch 23, 1999,at the hour
I am a citizen of the United States and a resident of the of t:oc p.m.,in the Board of
Supervlsors Charnbees le-
County aforesaid; I am over the age of eighteen years, ca ad at 651 Fane skeet I
and not a party to or interested in the above-entitled Martinez,California win holr�
f r s public hearing In accor-; 7
matte.. ;dance with Section;
6588.5(aK2)of the Ca3lfomia
I am the Principal Legal Clerk of the West County Times, l Government code wilt re
spect.to the financing of im-i
a newspaper of general circulation, printed and publishedoveents by means of the 1.
at 2640 Shadelands Drive in the City of Walnut Creek, Isuamnce of revenue bonds:
County of Contra Costa, 94598. forte"Bonds") t tie Public
F-
C
nancntr
i Authority (the "Au-
And which newspaper has been adjudged a newspaper of thorlry'� and a loan of the
proceeds of the Sonds to the
general circulation by the Superior Court of the County of Contra Costa coonty Rade-
Contra Costa, State of California, under the date of veiopment A ency. The im-
August 29, 1978, Case (Number 188884. wIove entlocatedin the financedCounty
and will consist of various
The notice,of which the annexed is a printed co (set in public facilities. including
type not smaller than nonpareil), hasbeenpublished in
roadway,ousing andd'other tm-
each regular and entire issue of said newspaper and not provements,
in any supplement thereof on the following dates, to-wit: Notice is further iven that at
sold hearing at f Interested Jim Kennedy Lao"Dirac-
March 16 persons will have an opportu- for-Redevelopment,Contra
nity to be heard with respect Costa County Community
to the financing of the im- E�nvei_crpment De en,
all in the year of 1999 provements with proceeds of 651 Pine Street, 4th Floor,
the Bonds and the public North Wing,Martnez,Calitor-
benefits arising from the fi- nia 94553.
I certify (or declare) under penalty of perjury that the nancingwrtten conlrnants Dated:March 16,1899
foregoing is true and correct. may be submitted at or ire- HOARD of SUPERVISORS
1 CRS
fore trie hearing to,and a list
of the improvements that are OF THE COUNTY OF
Executed at Walnut Creek, California. being considered for financ- CONTRA COSTA
On this 16 day of March, 1999 Ing may be obtained from, 61
�l st aM ch 16,1998
Slgnat re
West County Times
P 0 Box 100
Pinole, CA 94564
(510) 262-2740
Proof of Publication of:
(attached is a copy of the legal advertisement that
published)
' (•1 t r r.
PROOF OF PUBLICATION
NOTIM CW
A
(2015.5 C.C.P.) i'NJ91HEARIN(8�
racrric;s is tt�R�BY Li1vE�f
NATE OF CALIFORNIA that the Board of
csr�m,a Chanty of Contra Costa �j
11
County of Contra Costa (ryar i P >#roe i of i +
arch 2 at thT'=hour
1 am a citizen of the United States and a resident of the su ,
County aforesaid; I am over the age of eighteen years, ca at 851 pine str.eL, Vr
and not a Martsnez,Odfornkt,WU hold i
party to or interested in the above-ent€t€ed a public hearing acaor-
matter. dance with section
SNg�(an of the Osafornia
Code *ft re-
I am the Principal Legal Clerk of the Contra Costa Times, spect to tm iinancOf Im-
a newspaper of general circulation, printed and published groantants by means of
eof revenue
at 2640 Shadelands Drive In the City of Walnut Creek, M u ter
County of Contra Costa, 94598. nancing Aumorit (me „Au-
the
And which newspaper has been adjudged a newspaper of a of a canto
Contra Costa County Retie-
genera#circulation by the Superior Court of the County of vent .The tm-
Contra Costa, State of California, under the date of �+ts be innate
October 22, 1934. Case Number 19764. an be located�the
ccuQty
and aaiii oorratst of
pubBc witties, inctud
The notice,of which the annexed is aprinted copy{set in roadway, drsinage. ng,ity :
type not smaller than nonpareil), has been published in provvemenm.ffoushv' r
each regular and entire issue of said newspaper and not Notice is Uthergiven mat at
in any supplement thereof on the following dates,to-wit: said t�alf Interested
personttgt16an opportu-
be heard have cing u` troe
prove
%4M proceeds of
a#€in the year of 1999 the
esa+�so ,
nencing.written comments
# certify (or declare) under penalty of perjury that they"be r be-
hem to a a
foregoing is true and correct. or the Improvements are
bekV considered for 0 t
ybe ,
Executed at Walnut Creek, California. ,rm Kennedy,De"DIrec-
On this 16 day of March, 1999 for-Redsysbpment,Contra
Costa County
.
imrmn
Development
65Fine Cm ti
................. ........... -Signature 5531g"
Contra Costa Times Datedt Match 16,IM
SORS
P O Box 4147 OF rnE CCO1Ct�YYi OF
Walnut Creek,CA 94596 CONTRA CesrA
(510) 935-2525 Pu6tish Maroti6304
1a,INg
Proof of Publication of:
(attached is a copy of the legal advertisement that
published)
PROOF OF PUBLICATION
( {�IJ.�J C.C.P.)
NICE OF f`its
PUBLICwr:ARINQ
NOTICE IS HEREBY GIVEN
that the Board of Supervisors
STATE OF CALIFORNIA of the County of Contra Costa
Count of Contra Costa (the ^Coun, `) on Tuesday, �j
County March 23, 1999, at the hour I f+
of 1:00 p.m.,in the Board of ; is
€ girt a Citizen of the United States and a resident of the supervisors Chambers to-
County aforesaid; 1 am over the age of eighteen years, catod at 651 Pine Street
and not a party to or interested in the above-entitled Martinez,California will hok)
matter. dance with Section
6566.5(a)(2)of the California
I am the Principal Legal Clerk of the Ledger Dispatch and Government Code with re-
Brentwood News. Newspapers of general circulation, speet to the financ ng of irn-
g provements by mean.of the
printed and published at 2640 Shadelands Chive in the Issuance of revenue bonds
City of Walnut Creek, County of Contra Costa, 945598.
(the
tf co°g statPubliiuFl-
nancin Authority (the "Au-
And which newspaper has been adjudged a newspaper of thorny' and a Boar. or the
general circulation by the Superior Court of the County of proceeds of the Bonds to the
Contra Costa County Rade-
Contra Costa, State of California, under the date of velopment Ar�envy. The im-
March 26, 1870. Case Number 746870. provements Co be financed
will be located In the County
and will consist of various
The notice, of which the annexed is a printed copy (set in pubuo facilities, including
type not smaller than nonpareil), has been published in roaawav, drainage, parking,
p utility,housing and other im-
each regular and entire issue of said newspaper and not provements.
in any supplement thereof on the following dates, to-wit:
Notice is further given that at
MarC€1 16 said hearing at. Interestednedy persons will will have an opportu- ''M Ken
nity to be heard with respect tot-Redsvaiopment,Contrar i
all in the year of 1999 provements with of
of Cepa mun t i
851 Ptna Btt+eitt,, th�Fioor;
the Bonds and the publicNorth Wing,Martlnaa,Califon-i
1 certify (or declare) under penalty of perjury that the benefits arising from the 11- nla 94583. #
foregoing is true and correct. Waning. written comments
may be submitted at or be Dated:March 18,1999
16 lore the hearing to,and a list BOARD OF SUPERVISt7Rs
Executed at Walnut Creek, California. of the improvements that are OF THE COUNTY of
being considered for 4nanc- CONTRA COSTA
On this 16 day Of March, 1999 Ing may be obtained from, mt�oai LOW 2462
ej/� Pmu Bah:March 16,1999
S€gnature
Ledger dispatch an Brentwood Ne s
P O Box 2299
Antioch, CA 94531-2299
(510) 757-2525
Proof of Publication of:
(attached is a copy of the legal advertisement that
published)