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HomeMy WebLinkAboutMINUTES - 02062001 - SD.4 (4) . sem• � 10/24/00 STANDBY BOND PURCHASE AGREEMENT dated as of January 1, 2001 between COUNTY OF CONTRA COSTA, CALIFORNIA AND WESTDEUTSCHE LANDESBANK GIROZENTRALE acting through its New York Branch relating to COUNTY OF CONTRA COSTA, CALIFORNIA TAXABLE PENSION OBLIGATION BONDS, REFUNDING SERIES 2000 508017.1 Y. o/ STANDBY BOND PURCHASE AGREEMENT This STANDBY BOND PURCHASE AGREEMENT, dated as of January 1, 2001, between COUNTY OF CONTRA COSTA, CALIFORNIA, a political subdivision duly organized and existing under the Constitution and laws of the State of California (the "County"), and WESTDEUTSCHE LANDESBANK GIROZENTRALE, a public law banking institution organized under the laws of the Federal Republic of Germany, acting through its New York Branch (the "Bank"). RECITALS WHEREAS, the County, pursuant to a Trust Agreement, dated as of February 1, 1994, as supplemented(the "Original Trust Agreement"),issued its County of Contra Costa Taxable Pension Obligation Bonds, 1994 Series A in the original aggregate principal amount of $337,365,000 (the "1994 Bonds"); and WHEREAS, the County has determined that it is in the County's best interests to purchase pursuant to a tender a portion of the 1994 Bonds and/or to defease a portion of the 1994 Bonds to their final maturity date (the "Refunding Project") and to issue its County of Contra Costa, California Taxable Pension Obligation Bonds, Refunding Series 2000 in the aggregate principal amount not to exceed $125,000,000 (the "Bonds") pursuant to a First Supplemental Trust Agreement, dated as of January 1, 2000 2001 (the "First Supplemental Trust Agreement" and, together with the Original Trust Agreement,the "Trust Agreement"); and WHEREAS,Resolution No. 2001- of the Board of Supervisors of the County, adopted on February 6, 2001 (the "Bond Resolution"),authorizes the issuance of the Bonds; and WHEREAS, the Trust Agreement provides that Bonds bearing interest at a variable rate may be tendered for or may be subject to purchase at various times before the maturity thereof; and WHEREAS, in order to provide funds for the purchase of Bonds which are tendered for purchase or required to be purchased and which are not remarketed, the County has requested the Bank to enter into this Agreement; and WHEREAS, it is the intention of the parties to this Agreement that the Bank's obligation hereunder shall be limited to payment of the purchase price (including eligible accrued interest) of any unremarketed Bonds and shall not constitute a guaranty of the payment of principal and interest on the Bonds; and WHEREAS, the Bank is willing to provide funds for such purposes on the terms and conditions provided herein; NOW, THEREFORE, the parties hereto agree as follows: 508017.1 sa. y ti ARTICLE I DEFINITIONS SECTION LL Definitions. Each capitalized term used herein and not otherwise defined herein shall have the meaning provided therefor in the Bonds, the Bond Resolution and the Trust Agreement. In addition, the following terms, as used herein, have the following meanings: "Agreement" means this Standby Bond Purchase Agreement, including any amendment or supplement hereto. "Alternate Liquidity Facility"has the meaning set forth in the Trust Agreement. "Authorized Denominations"has the meaning set forth in the Trust Agreement. "Available Commitment" means, as of any day, the sum of the Available Principal Commitment and the Available Interest Commitment, in each case as of such day. "Available Interest Commitment" means the amount of interest available under this Agreement which shall be in an amount equal to [thirty-four (34) days'] interest on the Available Principal Commitment based upon an assumed per annum rate of interest equal to 12% (based on the actual days elapsed in a year of 365 days, which, initially, shall equal an amount not to exceed $1,397,261, and thereafter means such initial amount adjusted from time to time as follows: (a) downward by an amount that bears the same proportion to such initial amount as the amount of any reduction in the Available Principal Commitment in accordance with clause (a) or (b) of the definition herein of "Available Principal Commitment" bears to the initial Available Principal Commitment and (b) upward by an amount that bears the same proportion to such initial amount as the amount of any increase in the Available Principal Commitment in accordance with clause (c) of the definition herein of"Available Principal Commitment" bears to the initial Available Principal Commitment. Any adjustments to the Available Interest Commitment shall occur simultaneously with any corresponding adjustments to the Available Principal Commitment. "Available Principal Commitment" initially means an amount not to exceed $[125,000,000], representing an amount equal to the original aggregate principal amount of the Bonds. The Available Principal Commitment shall be adjusted from time to time as follows: (a) downward by the principal amount of Bonds redeemed, paid or converted to any Mode other than the Daily Mode or the Weekly Mode, (b) downward by the principal amount of any Eligible Bonds purchased by the Bank pursuant to Section 2.1 hereof, and (c) upward by the principal amount of any Eligible Bonds theretofore purchased by the Bank pursuant to Section 2.1 hereof which are remarketed by the Remarketing Agent and for which the Bank has received immediately available funds equal to the principal amount thereof; provided, however, that the sum of (i) the Available Principal Commitment plus (ii) the aggregate principal amount of Bank Bonds shall never exceed $[125,000,000]. Any adjustments -2- 508017.1 , sem- . ti to the Available Principal Commitment pursuant to clauses (a), (b) or (c) hereof shall occur simultaneously with the occurrence of the events described in such clauses. "Bank"has the meaning set forth in the introductory paragraph to this Agreement. "Bank Bondholder" means the Bank (but only in its capacity as owner of Bank Bonds pursuant to this Agreement) and any other Person to whom the Bank has sold Bank Bonds pursuant to Section 2.4(a)(i) and(ii) or 8.4 hereof. "Bank Bonds" means any Bonds purchased by the Bank pursuant to Section 2.1 hereof, evidencing a Liquidity Advance or Term Loan, as the case may be, and shall include any Bonds held by a Participant pursuant to Section 8.4 hereof. "Bank Rate" means the rate per annum equal to the sum of the Base Rate in effect from time to time plus the Base Rate Margin in effect for such date as set forth in Schedule I hereto. "Base Rate"means, for any day, the higher of(i) the rate established from time to time by the Bank at its New York office as its Prime Rate, in effect on such date, and (ii) the Federal Funds Rate in effect on such date plus one-half of one percent(.50%). "Base Rate Margin"has the meaning set forth in Schedule I hereto. "Board of Supervisors" means the Board of Supervisors of the County of Contra Costa, California. "Bond Purchase Contract" means that certain Contract of Purchase relating to the Bonds between the County and the Underwriter named therein. "Bond Resolution"has the meaning set forth in the Recitals,as said Bond Resolution may be amended or supplemented from time to time, subject to Section 6.2(a)hereof. "Bonds"has the meaning set forth in the Recitals. "Book Entry Bond"means the Bonds, so long as the book entry system with DTC is used for determining beneficial ownership of the Bonds. "Business Day" means a day which is not a Saturday, Sunday or legal holiday on which banking institutions in the State of California, the city in which documents are required to be delivered to the Bank to draw on this Agreement or in the State of New York are authorized or required by law to close or a day on which the New York Stock Exchange is closed. "Change of Law" means the adoption, after the Effective Date, of or change in any law, rule, regulation, statute, treaty, guideline or directive of any Governmental Authority or any change after the Effective Date in the application, interpretation or enforcement of any of the foregoing. "Commitment Fee"has the meaning set forth in Section 3.1 hereof. -3- 508017.1 y "Commitment Period" means, with respect to the Bonds, the period from the Effective Date to and including the close of business on the earliest of(a) the Expiration Date; (b) the date on which no Bonds are otherwise Outstanding; (c)the date on which the Available Commitment shall be terminated in its entirety; (d) the Purchase Termination Date; (e) the fifth Business Day next succeeding the Conversion Date; and(f) the Substitution Date. "Conversion Date"means the date on which all of the Bonds have been converted to bear interest in a Mode other than the Daily Mode or the Weekly Mode. "County" has the meaning set forth in the introductory paragraph to this Agreement, and any successors or assigns. "County Rating" means the rating assigned by the Rating Agency to the Long Term Debt Issue of the County. "Daily Mode"has the meaning set forth in the Trust Agreement. "Debt" means (a) all Parity Obligations issued and Outstanding under the Trust Agreement; (b)all obligations of the County to pay the deferred purchase price of property, except trade accounts payable under normal trade tenors and which arise in the ordinary course of business, which rank on a parity with the Bonds; (c)any obligation of the County as lessee under a capitalized lease (excluding non-appropriation lease agreements in excess of $10,000,000; and (d) any obligation of the County for borrowed money of other Persons evidenced by bonds, debentures, notes or other similar instrument in excess of $10,000,000 other than Parity Obligations or the Bonds. "Default" means any condition or event which, with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default. "Default Rate" means a rate of interest per annum equal to the Bank Rate plus 2.00% per annum. "Differential Interest Amount" has the meaning set forth in Section 2.2(g) hereof. "Dollars"or "U.S. Dollars"means the lawful currency of the United States of America. "DTC"means The Depository Trust Company, and any successor and assign. "Effective Date"has the meaning set forth in Section 4.1 hereof. "Eligible Bonds" means any Outstanding Bonds, excluding Bonds owned by or on behalf of the County, Bank Bonds or Bonds bearing interest in any Mode other than a Daily Mode or Weekly Mode. "Enabling Acts" means Articles 10 and 11 (commencing with Section 53570) of Chapter 3 of Division 2 of Title 5 of the Government Code of the State of California. -4- 508017.1 ,54V. L "Environmental Law" shall mean the Comprehensive Environmental Response, Compensation and Liability Act, any so-called "Superfund", or any other applicable Federal, state, local or other statute, law, ordinance, code, rule, regulation, order or decree, as now or at any time hereafter in effect, regulating, relating to, or imposing liability concerning the environment, the impact on the environment on human health, or any hazardous or toxic waste, substance or material or pollutant or contaminant. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and, unless the content otherwise requires, the rules and regulations promulgated thereunder from time to time. "Event of Default"has the meaning set forth in Section 7.1 hereof. "Expiration Date" means the date on which this Agreement is to expire pursuant to its terms, initially 5:00 p.m. (New York time)on January 1, 2004, including any extension of such date pursuant to Section 2.6 hereof and, if any such date is not a Business Day, the next preceding Business Day, but not including the date of any early termination of the Available Commitment and the Purchase Termination Date. "Federal Funds Rate" means for any day the per annum rate (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average of the rates on overnight Federal Funds transactions with members of the Federal Reserve System arranged by Federal Funds brokers on that day, provided that (i) if the date for which the rate is to be determined is not a Business Day, the Federal Funds Rate for that day shall be the rate on such transactions on the next succeeding Business Day and (ii) if that rate is not so published for any day, the Federal Funds Rate for that day shall be the average rate charged to the Bank on that day on such transactions as determined by the Bank. Each determination of the Federal Funds Rate by the Bank shall be deemed conclusive and binding on the County absent manifest error. "First Supplemental Trust Agreement"has the meaning set forth in the Recitals. "Fiscal Year"means the fiscal year of the County as set forth in the Trust Agreement. "Fixed Rate Mode"has the meaning set forth in the Trust Agreement. "Governmental Authority" means the United States or any state or political subdivision thereof or any foreign nation or political subdivision thereof, any entity, body or authority exercising executive, legislative,judicial, regulatory or administrative functions of or pertaining to government in the United States (or any state, municipality or political subdivision thereof) or any foreign nation or political subdivision thereof, including, without limitation, any central bank or other governmental or quasi-governmental authority exercising control over banks or other financial institutions, and any corporation or other entity or authority owned or controlled (through stock or capital ownership or otherwise) by any of the foregoing. "Immediate Termination Event" means any Event of Default described in Section 7.1(b)(i), (e), (g), (h), (i), 0), (1)or(o). "Interest Component"has the meaning set forth in Section 2.1 hereof. -5- 508017.1 S V. y a _6 -a1 "Interest Payment Date" has the meaning set forth in the Trust Agreement, in addition to those dates set forth in Section 2.7 hereof with respect to the payment of interest on Bank Bonds. "Liquidity Advance" has the meaning set forth in Section 2.2(e) hereof. "Liquidity Advance Rate"shall mean, for each Bank Bond, a per annum rate of interest: (i) for the period commencing on the Purchase Date through and including the 30th day thereafter, equal to the Bank Rate plus one-half of one percent (0.50%); (ii) for the period commencing on the 31st day after the Purchase Date through and including the 60th day after the Purchase Date, equal to the Bank Rate plus three-quarters of one percent (0.75 % ); and (iii) thereafter, equal to the Bank Rate plus one percent (1.00%); provided that upon the occurrence of an Event of Default hereunder, the Liquidity Advance Rate shall equal the Default Rate; and provided further, that in no event shall the Liquidity Advance Rate cause the payment of interest by the County to exceed the Maximum Interest Rate. "Long Term Debt Issue"means the Bonds and ny Parity Obligations. "Mandatory Purchase Date" means any date on which the Bonds are subject to mandatory purchase in accordance with the Trust Agreement. "Material Adverse Effect" means (a) (i) with respect to any Person, a material adverse effect upon such Person's business, assets, liabilities, financial condition, results of operations or business prospects, and (ii) with respect to a group of Persons as a whole, a material adverse effect upon such Persons' business, assets, liabilities, financial condition, results of operations or business prospects taken as a whole, and (b) with respect to any agreement or obligation, a material adverse effect upon the binding nature, validity or enforceability of such agreement or obligation. "Maximum Interest Rate" means the maximum interest rate permitted under the laws of the State with respect to any Obligation incurred hereunder by the County. "Mode"means the Daily Mode, the Weekly Mode and the Fixed Rate Mode. "Moody's" means Moody's Investors Service, a corporation organized and existing under the laws of the State of Delaware, its successors and their assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, Moody's shall be deemed to refer to any other nationally recognized securities rating agency (other than S&P)designated by the County. "1994 Bonds"has the meaning set forth in the Recitals. "Notice of Bank Purchase" means (a) in the case of a purchase of a Bond pursuant to an optional tender by the Owner thereof, a notice in the form of Exhibit A attached hereto and -6- 508017.1 SD tI incorporated herein by this reference, or (b)in the case of a purchase of a Bond on a Mandatory Purchase Date, a notice in the form of Exhibit B attached hereto and incorporated herein by this reference. "Obligations" means all amounts owed by the County to the Bank under this Agreement and the Bank Bonds. "Official Statement" means the Official Statement of the County dated [ ), 2001 (including any documents incorporated therein by reference and any amendment or supplement thereto), relating to the Bonds. "Optional Tender Date" has the meaning assigned to the term "Purchase Date" in the Trust Agreement. "Original Trust Agreement"has the meaning set forth in the Recitals. "Other Taxes"has the meaning set forth in Section 3.3(a) hereof. "Outstanding" has the meaning set forth in the Trust Agreement, except that notwithstanding any provisions in the Trust Agreement to the contrary, Bank Bonds shall remain Outstanding until the Bank is paid all amounts due on such Bonds. "Owner" means the owner of a Bond as shown on the registration books maintained on behalf of the County. "Parity Obligations" means, at any date, all bonds, debentures, notes or other similar instruments of the County secured on a parity with or senior to the Bonds. "Participant"has the meaning set forth in Section 8.4 hereof. "Person" means an individual, a corporation, a partnership, an association, a business trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof. "Prime Rate" means, for any day, the rate per annum (calculated on the basis of a year of 365/366 days, as applicable) announced by the New York Branch of the Bank from time to time as its "prime rate" for U.S. dollar loans, or equivalent, as is in effect on such day, any change in such rate to be effective on the date such change is effective for such Branch's purposes, it being understood that such rate shall not necessarily be the best or lowest rate of interest available to such Branch's best or most preferred prime, large commercial customers. Each determination of the Prime Rate shall be conclusive and binding on the County absent manifest error. "Public Rate"means the interest rate borne by Bonds other than Bank Bonds. "Purchase Date" means any Business Day during the Commitment Period with respect to which the Bank has received a Notice of Bank Purchase pursuant to Section 2.2 hereof. -7- 508017.1 k "Purchase Price"means, with respect to any Eligible Bond or portion thereof, the principal amount thereof plus accrued interest, if any, to the Purchase Date,in each case without premium. "Purchase Termination Date" means the first date on which the Bank is no longer required to purchase Eligible Bonds pursuant to Section 7.2 hereof. "Rating Agency"means Moody'or S&P. "Refunding Project"has the meaning set forth in the Recitals. "Related Documents" means the Bonds, the Trust Agreement, the Bond Resolution, the Remarketing Agreement and the Bond Purchase Contract. "Remarketing Agent" means each or any remarketing agent, as the context may require, at the time serving as such under a Remarketing Agreement,initially Bear, Stearns&Co. Inc. "Remarketing Agreement" means an agreement between the County and the Remarketing Agent, as amended from time to time with the consent of the Bank, which consent shall not be unreasonably withheld. "Replacement Bank"means the issuer of an Alternate Liquidity Facility. "Retirement Law" means the County Employees Retirement Law of 1937, constituting Division 4 of Title 3 of the Government Code of the State of California. "S&P" means Standard & Poor's Ratings Service, Inc, a division of The McGraw-Hill Companies, Inc., its successors and their assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "S&P" shall be deemed to refer to any other nationally recognized securities rating agency (other than Moody's) designated by the County. "Sale Date"has the meaning specified in Section 2.4(a) hereof. "Sale Price"has the meaning specified in Section 2.4(a) hereof. "Special Counsel"has the meaning specified in Section 3.4 hereof. "State"means the State of California. "Substitution Date" means the date on which an Alternate Liquidity Facility is to be substituted for this Agreement. "Taxes"has the meaning set forth in Section 3.3(a)hereof. "Tender Agent" means, at any time, the Person serving in the capacity of Tender Agent under the Trust Agreement. "Term Loan" means a Liquidity Advance which shall not have been fully reimbursed by the County within sixty (60) days of the related Purchase Date. -8- 508017.1 "Term Loan Period" means the period commencing on the first to occur of (a) the sixty- first (61st) day following the Purchase Date and (b) the final day of the Commitment Period, and ending on the third anniversary of the Purchase Date on which the related Liquidity Advance has been made but in no event later than the{sixth }anniversary of the Effective Date. "Trust Agreement" has the meaning set forth in the Recitals, as said Trust Agreement may be amended and supplemented hereafter, subject to Section 6.2(a)hereof. "Trustee"has the meaning set forth in the Trust Agreement. "Underwriter" means the underwriter of the Bonds as set forth in the Bond Purchase Contract. "Weekly Mode"has the meaning set forth in the Trust Agreement. SECTION 1.2. Principles of Construction. (a) In this Agreement, words importing any gender include the other gender; references to statutes are to be construed as including all statutory provisions consolidating, amending or replacing the statute referred to; references to agreements and other contractual instruments shall be deemed to include all subsequent amendments and other modifications and supplements thereto, but only to the extent such amendments, modifications and supplements are not prohibited by this Agreement; references to Persons include their respective successors and assigns; references to Articles, Sections and Exhibits are to Articles, Sections and Exhibits in or to this Agreement unless otherwise specified; and references to the words "hereof," "hereto," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. (b) All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles in the United States. ARTICLE U COMMITMENT TO PURCHASE BONDS SECTION 2.1. Commitment to Purchase Bonds. The Bank agrees, on the terms and conditions contained in this Agreement, including Section 4.2 hereof, to make a Liquidity Advance with its own funds for the purchase at the Purchase Price of (a) all Eligible Bonds tendered or deemed tendered from time to time during the Commitment Period pursuant to optional tenders by Owners in accordance with the terms of the Bonds and (b) all Eligible Bonds required to be purchased on a Mandatory Purchase Date during the Commitment Period in accordance with the terms of the Bonds, in each case to the extent such Eligible Bonds are not remarketed in accordance with the Remarketing Agreement. The aggregate principal amount (or portion thereof) of any Bond purchased on any Purchase Date shall be an Authorized Denomination, and in any case the aggregate principal amount of all Bonds purchased on any Purchase Date, together with the aggregate principal amount of all Bank Bonds then Outstanding, shall not exceed the Available Principal Commitment on such date. The portion of the Purchase Price corresponding to accrued interest, if any, on the Bonds purchased on any Purchase Date (the 'Interest Component") shall not, in the aggregate, exceed the lesser of(i) the Available Interest Commitment with respect to such Bonds on such date and (ii) the actual -9- 508017.1 5V amount of interest accrued and unpaid on such Bonds to but excluding such date. The Bank shall have no obligation to make any Liquidity Advance with respect to the accrued interest, if any, due on the Bonds on any Interest Payment Date established pursuant to the Trust Agreement; provided, however, that if said Interest Payment Date shall coincide with a Purchase Date as a result of the delivery of a Notice of Bank Purchase in the form of Exhibit B hereto and all conditions precedent to said Liquidity Advance have otherwise been satisfied, then, in such event, the Bank shall be required to make a Liquidity Advance with respect to the accrued interest, if any, due on the Bonds tendered in conjunction with said Notice of Bank Purchase (including any Bonds which are to become Bank Bonds on such Purchase Date). Any Bond purchased by the Bank pursuant to this Section 2.1 shall thereupon become a Bank Bond and shall, from the date of such purchase and while it is a Bank Bond, bear interest at the Liquidity Advance Rate and have other characteristics all as set forth in the Trust Agreement and the Bonds; provided, however, that from and after the occurrence and continuation of an Event of Default, all Bank Bonds shall bear interest at the Default Rate until paid in full. SECTION 2.2. Method o/'Purchasing; Liquidity Advances; Term Loans. (a) Subject to the terms and conditions of this Agreement, on any Business Day during the Commitment Period, the Bank shall make a Liquidity Advance in order to pay the Purchase Price of Eligible Bonds tendered or deemed tendered in accordance with their terms upon receipt by the Bank, not later than (A)4:00 p.m., New York time, on the second Business Day prior to any Mandatory Purchase Date, (B) 11:00 a.m., New York time, on any Optional Tender Date for Bonds in the Weekly Mode, and (C) 11:45 a.m., New York time, on any Optional Tender Date for Bonds in the Daily Mode, of a written Notice of Bank Purchase in the form of Exhibit A or Exhibit B, as the case may be, completed on the Tender Agent's letterhead and signed by one purporting to be the Tender Agent's duly authorized signatory and upon satisfaction of the conditions provided in Section 4.2 hereof. Presentation of the Notice of Bank Purchase shall be made (i) at the Bank's address set forth on Exhibit D or at any other place as shall be designated by the Bank by written notice delivered to the Tender Agent and the County or (ii) in the form of a telecopy sent to the Bank's telecopy number and to the attention of the person set forth in Exhibit D, or such other number as shall be designated by the Bank by written notice delivered to the Tender Agent and the County. Any such presentation of a telecopy shall be confirmed by telephone and physical delivery of the Notice of Bank Purchase promptly following any telecopy presentation, but the failure to confirm the telecopy will not affect the validity of any such communication by telecopy. (b) If the Bank receives a Notice of Bank Purchase (i) in the form of Exhibit A in connection with an optional tender of Eligible Bonds, or (ii) in the form of Exhibit B in connection with a mandatory purchase of Eligible Bonds, at or before the time set forth therefor in sub-paragraph (a) above during the Commitment Period, and subject to satisfaction of the conditions provided in Section 4.2 as of the applicable Purchase Date, the Bank will transfer to the Tender Agent on such Purchase Date at or before 2:00 p.m., New York time, in immediately available funds, a Liquidity Advance equal to the aggregate Purchase Price of such Eligible Bonds. (c) If the Bank receives a Notice of Bank Purchase after the time set forth therefor in sub-paragraph (a) above from the Tender Agent, the Bank, subject to satisfaction of the -10- 508017.1 conditions provided in Section 4.2, will transfer to the Tender Agent at or before 12:00 noon, New York time, on the Business Day immediately following the Purchase Date specified in such notice, in immediately available funds, a Liquidity Advance equal to the aggregate Purchase Price of Eligible Bonds tendered or deemed tendered on such Purchase Date. (d) The County agrees that the Bank shall have no responsibility for, nor incur any liability in respect of, any act, or any failure to act, by the Tender Agent which results in the failure of the Tender Agent to effect the purchase of Bonds for the account of the Bank with funds paid by the Bank pursuant to this Section 2.2 and as set forth in the Bonds. The parties hereto understand and agree that the Bank's only responsibility under this Agreement is to purchase Bonds in accordance with this Agreement, the Trust Agreement and the Bonds and perform certain other administrative duties, and the parties intend that neither the Bank nor its directors, officers, employees or duly authorized agents shall be liable or responsible to third parties for any action or inaction under this Agreement other than actions or inactions of the Bank constituting a grossly negligent or willful failure to purchase Bonds in accordance with the terms of this Agreement. (e) Each payment by the Bank of the Purchase Price of any Bonds shall constitute an advance to the County (each such advance being a "Liquidity Advance" and, collectively, the "Liquidity Advances"). Each Liquidity Advance, and the accrued interest thereon (except as set forth in (g) below), shall be evidenced by the related Bank Bond(s) and shall be paid by or on behalf of the County on the earliest to occur of(i) the date on which any Bank Bonds purchased with funds disbursed in connection with such Liquidity Advance are redeemed, canceled, accelerated or otherwise paid in accordance with their terms, (ii) the date of the remarketing of the Bank Bonds evidencing such Liquidity Advance, (iii) the date on which any Bank Bonds purchased with the funds disbursed in connection with such Liquidity Advance mature in accordance with their terms, (iv) the Substitution Date, (v) the Conversion Date, and (vi) the end of the Term Loan Period, if applicable. The Bank shall be under no obligation to make any Liquidity Advance unless the conditions set forth in Section 4.2 hereof have been satisfied. The County may prepay any Liquidity Advance at any time without penalty and will use its best efforts to provide the Bank with one (1) Business Day's notice of such prepayment; provided, however, that any prepayment of a Liquidity Advance resulting from the remarketing of the related Bank Bond.shall be made upon not less than three (3) hours notice from the County to the Bank or the applicable Bank Bondholder. The Bank shall use its best efforts to notify the County and the Trustee of the amount of accrued interest on each Liquidity Advance on the Business Day prior to the date on which such amount is due. (f) Subject to the payment of any Liquidity Advance evidenced by a Bank Bond as provided in Section 2.2(e) hereof, each Liquidity Advance will automatically constitute a Term Loan beginning the earlier to occur of the sixty-first (61st) day after the related Purchase Date and the last day of the Commitment Period, provided that on the commencement date for such Term Loan, (i) the representations and warranties contained in Article V of this Agreement shall be true and correct as though made on and as of such date, except to the extent a representation or warranty relates specifically to an earlier date (in which case such representation and warranty shall be true and correct as of such date); and (ii) no Default or Event of Default shall have occurred and be continuing. On the commencement date of each Term Loan Period, the County shall be deemed to have represented and warranted to the Bank that the conditions set forth in (i) -11- 508017.1 and (ii) of the immediately preceding sentence have been satisfied. Each Term Loan, and the accrued interest thereon at the Liquidity Advance Rate (except as set forth in (g) below), shall be paid by or on behalf of the County upon the occurrence of any of the items set forth in Section 2.2(e)(i) through and including Section 2.2 (e)(v) above and shall, in addition thereto, be repaid by or on behalf of the County in six (6) equal semiannual installments, the first of which will occur on the one hundred eightieth (180th) day following the commencement of the Term Loan Period, with each subsequent installment being payable, together with interest accrued thereon at the Liquidity Advance Rate, one hundred eighty (180) days thereafter, and with the final installment being due and payable no later than the end of the Term Loan Period. The County may prepay any Term Loan at any time without penalty and will use its best efforts to provide the Bank with one (1) Business Day's notice of such prepayment; provided, however, that any prepayment of a Term Loan resulting from the remarketing of the related Bank Bond shall be made upon not less than three (3) hours notice from the County to the Bank or the applicable Bank Bondholder. The Bank shall use its best efforts to notify the County and the Trustee of the amount of accrued interest on each Term Loan on the Business Day prior to the date on which such amount is due. (g) On the date that any Bank Bond evidencing a Liquidity Advance or Term Loan, as the case may be, is remarketed, there shall be due and payable at such time the principal amount thereof together with interest thereon at the Public Rate, with the balance of any interest payable thereon on such date at the Liquidity Advance Rate (the "Differential Interest Amount") being payable by the County on the first Business Day of the next succeeding month. Provided that no Event of Default shall have occurred hereunder, no additional interest shall accrue on the amount representing any Differential Interest Amount; provided, however, that if such Differential Interest Amount is not paid on the date set forth in the immediately preceding sentence, then interest shall begin to accrue at the Default Rate on the amount representing said Differential Interest Amount from the date when it shall first become due until paid. SECTION 2.3. Reduction of Conuni.tinew; Termination; Substitution. (a) Mandatory Reduction of Commitment. Subject to the provisions of Section 2.3(b) hereof, upon (i) any redemption, repayment or other payment pursuant to the Trust Agreement of less than all of the principal amount of the Bonds (other than Bank Bonds) so that such Bonds shall cease to be Outstanding under the Trust Agreement, the aggregate Available Principal Commitment of the Bank shall automatically be reduced by the principal amount of such Bonds so redeemed, repaid or otherwise deemed paid, as the case may be, or (ii) the close of business on the Conversion Date, the aggregate Available Principal Commitment of the Bank shall automatically be reduced to zero, and in the case of either (i) or (ii), the Available Interest Commitment shall also be simultaneously reduced as provided in the definition thereof in Article I hereof. (b) Voluntary Termination; Fee. The County agrees not to replace this Agreement or to terminate this Agreement prior to the first anniversary of the Effective Date unless the County agrees to pay to the Bank, in addition to all other Obligations that may be due and payable at such time, a termination fee equal to 0.10% of the Available Commitment. Notwithstanding the foregoing provisions of this subsection (b), no termination fee will be required to be paid by the County if(i) the Bonds are then rated by Moody's, Moody's shall have lowered or withdrawn the short-term rating on the Bonds below "VMIG-1" as a result of the reduction by Moody's of the unsecured short-term rating of the Bank, or if the Bonds are then rated by S&P, S&P shall have -12- 508017.1 Sl7-`7 lowered or withdrawn the short-term rating on the Bonds below "A-1+" as a result of the reduction by S&P of the unsecured short-term rating of the Bank, (ii) the Bank collects additional amounts from the County pursuant to Section 3.2 or 3.3 as a result of conditions or events that are unique to Germany or (iii) the Bank does not agree to an extension of the Expiration Date as provided in Section 2.6 hereof; provided, however, Obligations, including without limitation, all principal and interest evidenced by Bank Bonds and all amounts payable under Article III hereof, shall be paid to, or in the case of Bank Bonds purchased from, the Bank at or prior to the time of termination. The County shall comply with the requirements of the Trust Agreement with respect to terminating this Agreement. (c) Alternate Liquidity Facility. Subject to the provisions of subsection (b) above, upon compliance with the conditions of Section 13.10(B) of the Trust Agreement regarding conversion of the interest rate on the Bonds to a Mode other than the Daily Mode or the Weekly Mode or upon compliance with the conditions of Section 16.15(B) of the Trust Agreement regarding delivery of an Alternate Liquidity Facility and the payment by the County of all Obligations due hereunder, the Tender Agent shall terminate this Agreement by giving the Bank (after five (5) days have elapsed since the satisfaction of the foregoing conditions) notice in writing to such effect; provided, however, that in the case of the delivery of an Alternate Liquidity Facility pursuant to Section 16.15(B) of the Trust Agreement: (i) the Replacement Bank shall agree, in a manner acceptable to the Bank, to purchase on the Substitution Date any Bank Bonds, not otherwise remarketed, held by or on behalf of a Bank Bondholder at the Purchase Price, and (ii) on the Substitution Date, the County and/or such Replacement Bank shall pay all other Obligations owing to the Bank hereunder (including Section 3.5 hereof), unless otherwise agreed to by the Bank. The Available Commitment shall automatically terminate on the expiration of the Commitment Period. (d) Except as specifically provided in this Section 2.3, the County shall have no right to reduce or terminate the Available Commitment. SECTION 2.4. Sale of Bank Bonds (a) Right to Sell Batik Bonds. The Bank shall not have the right to sell Bank Bonds to any Person other than: (i) Participants, (ii) the Replacement Bank, and (iii) any purchaser identified by the Remarketing Agent or their respective designees. Any Bank Bond sold to a Participant or the Replacement Bank shall bear interest at the Liquidity Advance Rate and may not be tendered for purchase under this Agreement or the Trust Agreement. The Bank agrees to notify the County, the Tender Agent, the Trustee and the Remarketing Agent promptly of any such sale (other than a sale made pursuant to Section 2.4(b)) and, if such Bank Bond is a Book Entry Bond, specifying the account at DTC to which such Bank Bond is credited; and to notify the transferee in writing that such Bond is no longer an Eligible Bond so long as it remains a Bank Bond and that there may not be a short-term investment rating assigned to such Bond so long as it remains a Bank Bond. Any Bank Bondholder purchasing a Bank Bond from the Bank or another Bank Bondholder shall be deemed to have agreed not to sell such Bank Bond to any Person except to the parties listed in the first sentence of this paragraph (a) and the Bank. (b) Sales by Remarketing Agent. The Bank and each other Bank Bondholder, by the acceptance by each of a Bank Bond, hereby authorize the Remarketing Agent to sell Bank Bonds purchased by the Bank pursuant to Section 2.2 above on behalf of the Bank or such Bank -13- 508017.1 Bondholder pursuant to the Trust Agreement and in accordance with applicable securities law at a price equal to the principal amount thereof plus unpaid accrued interest thereon to but excluding the date such Bank Bonds are to be sold (the "Sale Date") pursuant to this Section 2.4(b) at a rate of interest equal to the Public Rate (the "Sale Price"). The Bank agrees to deliver or cause to be delivered and, by its acceptance of a Bank Bond, each other Bank Bondholder agrees to deliver or cause to be delivered (but only upon receipt by the Bank or such other Bank Bondholder of immediately available funds in U.S. Dollars in the amount of the Sale Price plus any amount due pursuant to Section 3.5 hereof) to the Tender Agent each certificate representing a Bank Bond sold by it pursuant to this Section 2.4(b), including without limitation, certificates representing Bank Bonds which are deemed to have been delivered in accordance with the provisions of the Trust Agreement (or, in the case of Bank Bonds which are Book Entry Bonds, shall cause the beneficial ownership thereof to be credited to the account of the Remarketing Agent at DTC). (c) Right to Retain Bonds. (i) Notwithstanding the foregoing or anything else contained in this Agreement, the Bank and each other Bank Bondholder shall have the right, by not less than three (3) hours prior notice to the Remarketing Agent, to elect not to sell the Bank Bonds or any portion thereof pursuant to Section 2.4(b). In such event, the Tender Agent shall notify the County, the Remarketing Agent, the Trustee, the Bank and such Bank Bondholder that, as of the Sale Date, such Bond or Bonds shall no longer constitute Bank Bonds and such Bonds shall be deemed to have been remarketed and the Available Commitment shall be appropriately increased. (ii) After any sale of Bank Bonds by the Remarketing Agent pursuant to Section 2.4(b) and payment to the applicable Bank Bondholder of the outstanding principal and interest accrued on the Bank Bonds so sold (including interest accrued at the Liquidity Advance Rate), or any election by the Bank or a Bank Bondholder not to sell such Bank Bonds or any portion thereof through the Remarketing Agent pursuant to Section 2.4(b), such Bank Bonds so sold or as to which such election is made shall from such Sale Date or upon such election cease to bear interest at the Liquidity Advance Rate and shall bear interest at the Public Rate established by the Remarketing Agent;provided, that if such Bank Bonds are retained by the Bank or any Bank Bondholder, any amount due in connection therewith pursuant to Section 3.5 hereof shall continue to be payable. (d) Continuing Obligation. Following any sale of Bank Bonds pursuant to Section 2.4(b) or otherwise, or any election to retain Bonds pursuant to Section 2.4(c), the Bank shall retain the right to receive payment from the County of any interest thereon as provided herein (other than any amount representing the interest portion of the Sale Price actually received by the Bank Bondholder), in Section 3.5 hereof and in the Trust Agreement. Any such amounts shall be payable by the County to the Bank on the earlier of (i) the occurrence of an Immediate Termination Event, (ii) the Interest Payment Date next succeeding the applicable Purchase Date or, if the Purchase Date is an Interest Payment Date, then on said Purchase Date and (iii) the final day of the Commitment Period. (e) No Warranty. Any sale of a Bank Bond pursuant to this Section 2.4 shall be without recourse to the seller and without representation or warranty of any kind by the Bank or any Bank Bondholder. -14- 508017.1 SECTION 2.5. Rights of Bank. Bondholders. Upon purchasing Bank Bonds, Bank Bondholders shall be entitled to and, where necessary, shall be deemed assigned all rights and privileges accorded the Owners of the Bonds, except to the extent such rights and privileges conflict with this Agreement, in which case, the terms of this Agreement shall prevail and govern. Upon purchasing Bank Bonds, Bank Bondholders shall be recognized by the County, the Tender Agent, the Trustee and the Remarketing Agent as the true and lawful owners (or, in the case of Book Entry Bonds, beneficial owners) of the Bank Bonds, free from any claims, liens, security interests, equitable interests and other interests of the County, except as such interests might exist under the terms of the Bank Bonds with respect to all Owners (or, in the case of Book Entry Bonds, beneficial owners) of the Bonds. Bank Bonds shall be secured by, and payable from, the sources described in Section 3.8 hereof. SECTION 2.6. Extension of Conunitnient Period. The Expiration Date may be extended an unlimited number of times, in each case in the manner set forth in this Section 2.6. Upon receipt of written request of the County to extend the Expiration Date for an additional period as set forth in the form of Exhibit C hereto (received not more than 180 days or less than thirty (30) days prior to the first anniversary of the Effective Date and each anniversary thereafter), the Bank will use its best efforts to notify the County and the Trustee of its response within thirty (30) days of receipt of the request therefor (the Bank's decision to be made in its sole discretion and on such terms and conditions as to which the Bank and the County may agree); provided, however, that the failure of the County to receive a written confirmation from the Bank within the time established therefor shall be deemed a denial of such request. Any extension of this Agreement will be deemed to be on the existing terms of this Agreement unless the Bank and the County have entered into a writing confirming a change in any term of this Agreement. SECTION 2.7. Interest on. Bank Bonds. The County agrees to pay the Bank interest on each Bank Bond at a rate per annum equal to the Liquidity Advance Rate; provided, however, that upon the occurrence of any Event of Default, all Bank Bonds shall bear interest, payable on demand, at a rate per annum equal at all times to the Default Rate. The County agrees that interest with respect to any Bank Bond shall be payable monthly on the first Business Day of each month, on each of the dates set forth in Sections 2.2(e) and 2.2(f) for repayment of principal on Liquidity Advances and Term Loans, respectively, and on demand on the date immediately following any of the foregoing dates if such interest has not been paid in full when due (each such date being an "Interest Payment Date"for Bank Bonds). The County further agrees that the Interest Component, if any, included in the Purchase Price paid by the Bank for any Bond on the related Purchase Date shall be due and payable on the first Interest Payment Date for such Bank Bond occurring after the Purchase Date therefor, together with any additional interest due from said Purchase Date at the Liquidity Advance Rate. To the extent the Bank receives payment of principal of and interest on any Bank Bond, the Liquidity Advance or Term Loan, as the case may be, made in connection with the purchase of such Bank Bond shall be deemed reduced pro tanto, with the Bank (a) crediting any interest payment on the Bank Bond received by it, first to the payment of interest on the Liquidity Advance or Term Loan, as the case may be, and then to the payment of principal on such Liquidity Advance or Term Loan, as the case may be, and (b) crediting any principal repayment received on the Bank Bond to the principal of such Liquidity Advance or Term Loan, as the case may be. -15- 508017.1 6z), SECTION 2.8. Bunk Records. All transactions relating to the Available Commitment and Bank Bonds including, without limitation, redemptions, repayments, interest charges and reductions in the amount of the Available Commitment shall be reflected in the books and records of the Bank, which records shall be conclusive and binding upon the County absent fraud or manifest error. ARTICLE III FEES, COSTS, .EXPENSES, PAYMENTS AND INDEMNIFICATION SECTION 3.1. Commitment and Other- Fees. (a) The County shall pay to the Bank at its address set forth in Exhibit D hereof a non-refundable commitment fee (the "Commitment Fee") accruing at the rate established initially herein and subsequently in the Request for Extension of Expiration Date attached hereto as Exhibit C. The initial Commitment Fee shall accrue at the rate of.125% per annum on the Available Commitment. Such Commitment Fee shall be payable in arrears quarterly on each April 1, July 1, October 1 and January 1 during the Commitment Period (commencing on April 1, 2001) and on the last day of the Commitment Period, and shall be calculated on the basis of the average daily amount of the Available Commitment and on the basis of a 360-day year and the actual number of days elapsed; provided, however, that the Commitment Fee shall be increased or decreased as set forth in Schedule I hereto. In addition to the requirements set forth in Schedule I hereto regarding the Commitment Fee, if and to the extent that any of the amount represented by the Available Commitment remains outstanding following the occurrence of an Event of Default under Section 7.1 hereof, the Commitment Fee described herein shall be increased by.an amount equal to 1.00 % per annum from and including the date upon which said Event of Default first occurred through and including the last day of the Commitment Period. If the Available Commitment is terminated in its entirety, the accrued but unpaid Commitment Fee shall be payable on the effective date of such termination. (b) The County shall pay or cause to be paid to the Bank on the last Business Day of each month, in arrears, a fee equal to $150 for each purchase of Eligible Bonds by the Bank during said monthly period in order to compensate the Bank for its expenses in connection with such purchases. (c) In connection with the written request by the County of (i) any amendment, supplement or modification of this Agreement (except with respect to a modification solely for the purpose of extending this Agreement, for which no fee shall be paid) or (ii) any transfer of the rights and obligations of the parties to this Agreement, the County shall pay or cause to be paid to the Bank a sum equal to $2,500, plus the reasonable fees and expenses of the Bank's domestic and German counsel in accordance with the provisions of Section 3.4 hereof. (d) All fees hereunder, once paid, are non-refundable. (e) There shall be no upfront fee paid by the County for this Agreement. SECTION 3.2. Increased Cost of Maintaining the Commitment and Reduced Return. If, after the Effective Date, the Bank shall have determined that the adoption of any applicable law, rule or regulation, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority charged with the interpretation or administration thereof, -16- 508017.1 sa � or compliance by the Bank with any request or directive of any such Governmental Authority, has or would: (i) limit the deductibility of interest on funds obtained by the Bank to pay any of its liabilities or subject the Bank to any tax, duty, charge, deduction or withholding on or with respect to payments relating to the Bonds or this Agreement, or any amount paid or to be paid by the Bank pursuant to this Agreement (other than any tax measured by or based upon the overall net income or gross receipts of the Bank imposed by any jurisdiction having control over the Bank); (ii) impose, modify, require, make or deem applicable to the Bank any reserve requirement, capital requirement, special deposit requirement, insurance assessment or similar requirement against any assets held by, deposits with or for the account of, or loans, letters of credit, standby bond purchase agreements or commitments by, the Bank; (iii) change the basis of taxation of payments due the Bank under this Agreement or the Bonds (other than by a change in taxation of the overall net income or gross receipts of the Bank); or (iv) impose upon the Bank any other condition with respect to any amount paid or payable to or by the Bank or with respect to this Agreement, any Bonds or any of the other Related Documents; and the result of any of the foregoing is to increase the cost to the Bank of making any Liquidity Advance or Term Loan or maintaining its commitment hereunder, or to reduce the amount of any payment (whether of principal, interest or otherwise) receivable by the Bank, or to reduce the rate of return on the capital of the Bank or to require the Bank to make any payment on or calculated by reference to the gross amount of any sum received by it, in each case by an amount which the Bank in its reasonable judgment deems material, then: (1) the Bank shall promptly notify the County in writing of such event; (2) the Bank shall promptly deliver to the County a certificate stating the change which has occurred or the reserve requirements or other costs or conditions which have been imposed on the Bank or the request, direction or requirement with which it has complied, together with the date thereof, the amount of such increased cost, reduction or payment and a reasonably detailed description of the way in which such amount has been calculated, and the Bank's determination of such amounts, absent fraud or manifest error, shall be conclusive; and (3) the County shall, not more than 30 days after receipt of the Bank's certificate referred to in sub-paragraph (2) of this Section, pay to the Bank such additional amounts as will compensate the Bank for the costs, together with interest on such additional amounts, from the date of its receipt of such certificate until payment in full thereof, at a rate per annum equal to the Bank Rate in effect from time to time, payable at the end of such 30 day period. If the County shall fail to pay such additional amounts within such 30 day period, then the County shall pay interest on such additional -17- 508017.1 sa V amounts from the last day of such 30 day period until payment in full thereof at the Default Rate. The protection of this Section 3.2 shall be available to the Bank regardless of any possible contention of invalidity or inapplicability of the law, regulation or condition which has been imposed; provided, however, that if it shall be later determined by the Bank that any amount so paid by the County pursuant to this Section 3.2 is in excess of the amount payable under the provisions hereof, the Bank shall refund such excess amount to the County within 30 days after such determination. The obligations of the County under of this Section 3.2 shall survive for a period of three years beyond the termination of this Agreement. SECTION 3.3. Net of Tales, Etc. (a) Any and all payment to the Bank by the County hereunder shall be made, free and clear of and without deduction for any and all taxes, levies, imposts, deductions, charges, withholdings or liabilities imposed as a result of a Change of Law, excluding, however, taxes imposed on or measured by the net income or capital of the Bank by any jurisdiction or any political subdivision or taxing County thereof or therein solely as a result of a connection between the Bank and such jurisdiction or political subdivision (all such non- excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as "Taxes"). If as a result of a Change of Law, the County shall be required by law to withhold or deduct any Taxes imposed by the United States or any political subdivision thereof from or in respect of any sum payable hereunder to the Bank, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 3.3), the Bank receives an amount equal to the sum it would have received had no such deductions been made, (ii) the County shall make such deductions and (iii) the County shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law. If the County shall make any payment under this Section 3.3 to or for the benefit of the Bank with respect to Taxes and if the Bank shall claim any credit or deduction for such Taxes against any other taxes payable by the Bank to any taxing jurisdiction in the United States, then the Bank shall pay to the County an amount equal to the amount by which such other taxes are actually reduced; provided that the aggregate amount payable by the Bank pursuant to this sentence shall not exceed the aggregate amount previously paid by the County with respect to such Taxes. In addition, the County agrees to pay any present or future stamp, recording or documentary taxes and, if as a result of a Change of Law, any other excise or property taxes, charges or similar levies that arise under the laws of the United States of America, the State of California or the State of New York from any payment made hereunder or from the execution or delivery or otherwise with respect to this Agreement (hereinafter referred to as "Other Taxes"). The Bank shall provide to the County within a reasonable time a copy of any written notification it receives with respect to Other Taxes owing by the County to the Bank hereunder provided that the Bank's failure to send such notice shall not relieve the County of its obligation to pay such amounts hereunder. (b) The County shall, to the extent permitted by law, indemnify the Bank (where the final determination of the County's liability under this Section is established by a court of law, by an arbitrator, or by settlement agreed to by the County and the Bank) for the full amount of -18- 508017.1 Taxes and Other Taxes including any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 3.3 paid by the Bank or any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted; provided, that the County shall not be obligated to indemnify the Bank for any penalties, interest or expenses relating to Taxes or Other Taxes arising from the Bank's gross negligence or willful misconduct. The Bank agrees to give notice to the County of the assertion of any claim against the Bank relating to such Taxes or Other Taxes as promptly as is practicable after being notified of such assertion; provided, that the Bank's failure to notify the County promptly of such assertion shall not relieve the County of its obligation under this Section 3.3. Payments by the County pursuant to this indemnification shall be made within 30 days from the date the Bank makes written demand therefor, which demand shall be accompanied by a certificate describing in reasonable detail the basis thereof. The Bank agrees to repay to the County any refund (including that portion of any interest that was included as part of such refund) with respect to Taxes or Other Taxes paid by the County pursuant to this Section 3.3 received by the Bank for Taxes or Other Taxes that were paid by the County pursuant to this Section 3.3 and to contest, with the cooperation and at the expense of the County, any such Taxes or Other Taxes which the Bank or the County reasonably believes not to have been properly assessed. Other than any present or future stamp, recording or documentary taxes, the County shall not be liable for any Taxes or Other Taxes resulting from a Change of Law prior to the date of such Change of Law. (c) Within 30 days after the date of any payment of Taxes by the County, the County shall furnish to the Bank the original or a certified copy of a receipt evidencing payment thereof. The County shall compensate the Bank for all reasonable losses and expenses sustained by the Bank as a result of any failure by the County to so furnish such copy of such receipt. (d) All payments to the Bank under this Agreement and the Bank Bonds shall be made in U.S. Dollars and in immediately available and freely transferable funds at the place of payment without counterclaim, set-off, condition or qualification, and free and clear of and without deduction or withholding for or by reason or any present or future taxes, levies, imposts, deductions or charges of any nature whatsoever. In the event that the County is compelled by law to make any such deduction or withholding, the County shall nevertheless pay to the Bank such amounts as will result in the receipt by the Bank of the sum it would have received had no such deduction or withholding been required to be made. If requested, the Bank shall from time to time provide the County, the Trustee and the United States Internal Revenue Service (to the extent such information and forms may be lawfully provided by the Bank) with such information and forms as may be required by Treasury Regulations Section 1.1411 or any other such information and forms as may be necessary to establish that the County is not subject to any withholding obligation under Section 1442 or other comparable provisions of the Code. (e) The obligations of the County under this Section 3.3 shall survive for a period of three years beyond the termination of this Agreement. SECTION 3.4. Expenses. The County shall pay (a) all out-of-pocket expenses of the Bank, incurred through and including the Effective Date, (b) the fees and expenses of Winston & Strawn, special counsel to the Bank ("Special Counsel"), and German counsel in connection with the preparation, execution and delivery of this Agreement and the Related Documents;provided, -19- 508017.1 6 -o/ that such fees shall not exceed $33,000 in the aggregate, (c) all reasonable out-of-pocket expenses of the Bank, including fees and expenses of Special Counsel or any other counsel retained by the Bank, in connection with any waiver or consent hereunder, under any Related Documents or any transfer or amendment hereof or thereof or any Default or alleged Default hereunder or thereunder and (d) if any Default or Event of Default occurs, all out-of-pocket expenses incurred by the Bank, including fees and disbursements of counsel retained in connection with such Default or Event of Default and collection and other enforcement proceedings resulting therefrom. SECTION 3.5. Interest on Overdue Payments; Ma,vin u.nl Interest Rate. (a) The County shall pay or cause to be paid interest at the Default Rate in effect from time to time on overdue amounts payable by the County hereunder including any accrued and unpaid interest on Bank Bonds. Such interest shall be payable on written demand of the Bank. (b) In no event shall the amount of interest payable under this Agreement or the Bank Bonds exceed the Maximum Interest Rate. In the event any interest required to be paid under the Bank Bonds or hereunder at any time exceeds the Maximum Interest Rate, the portion of such interest required to be paid on a current basis shall equal such Maximum Interest Rate;provided, however, that the differential between the amount of interest payable (assuming no Maximum Interest Rate were applicable) and the amount paid on a current basis after giving effect to the Maximum Interest Rate shall be carried forward and shall be payable on any subsequent date of calculation (but in any event, no later than the last day of the Commitment Period when all such amounts shall become due and payable) so as to result in a recovery of interest previously unrealized (because of the limitation dictated by such Maximum Interest Rate) at a rate of interest, and as part of the interest payable, that, after giving effect to the recovery of such excess and all other interest paid and accrued hereunder to the date of calculation, does not exceed such Maximum Interest Rate. SECTION 3.6. Indemnification. (a) To the extent permitted by law, the County hereby indemnifies and holds the Bank harmless from and against any and all claims, damages, losses, liabilities, costs or expenses which the Bank may incur or which may be claimed against the Bank by any person or entity: (i) by reason of any inaccuracy or alleged inaccuracy in any material respect, or any untrue statement or alleged untrue statement of any material fact, contained in the Official Statement, or any other disclosure document or offering materials (in preliminary or final form) relating to the Bonds, or by reason of the omission or alleged omission to state therein a material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading; provided, that the County shall not be required to indemnify the Bank under this clause (a) for any claims, damages, losses, liabilities, costs or expenses incurred by reason of any untrue statement contained therein regarding the Bank, which information was expressly provided in writing by the Bank for inclusion in the Official Statement, or any other disclosure document or offering materials (the "Bank Infonnation"), if and to the extent it is finally determined by a court of competent jurisdiction that such Bank Information contained an untrue statement; and provided further, that if any such action or proceeding shall be settled by the Bank without there being a final-determination by a court of competent -20- 508017.1 jurisdiction that such Bank Information contained an untrue statement, then the County shall be required to indemnify the Bank pursuant to this Section only if such action or proceeding is settled with the County's consent; or (ii) by reason of or in connection with the execution, delivery or performance of any Related Document or any transaction contemplated by any Related Document or the Enabling Acts; or (iii) by reason of or in connection with the execution and delivery or payment of, or failure to make payment under, this Agreement; provided, that the County shall not be required to indemnify the Bank for any claims, damages, losses, liabilities,costs or expenses to the extent, but only to the extent,caused by(i) the willful misconduct or gross negligence of the Bank or (ii)the wrongful failure of the Bank to advance moneys as required hereunder after compliance with all conditions precedent to making a Liquidity Advance have been satisfied, {unless the making of such Advance was not otherwise permitted by law.} Without prejudice to the survival of any other Obligation obligation of the County hereunder, the indemnities and obligations of the County contained in this Section shall survive the payment in full of amounts payable pursuant to Article H and the last day of the Commitment Period. SECTION 3.7. Obligations Absolute. The obligations of the County under this Agreement shall be absolute, unconditional and irrevocable and shall be paid or performed strictly in accordance with the terms of this Agreement, under all circumstances whatsoever, including, without limitation, the following circumstances: (i) any lack of validity, legality or enforceability (other than by virtue of actions taken by the Bank) of this Agreement, any of the Bonds, the Trust Agreement or any other Related Document; (ii) any amendment or waiver of or any consent to departure from all or any of the Related Documents; (iii) any statement or other document presented under this Agreement proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect whatsoever; (iv) the purchase of a Bank Bond after the delivery of a Notice of Bank Purchase of a Bank Bond that does not comply with the terms of this Agreement; (v)the existence of any claim, set-off, defense or other rights which the County may have at any time against the Tender Agent (or any Person for whom the Tender Agent may be acting), any holder of a Bond, the Trustee, the Bank or any other Person, whether in connection with this Agreement, the transactions contemplated herein or in the Related Documents or any unrelated transaction; or (vi) any other circumstance which might constitute a legal or equitable discharge of any obligations hereunder (whether or not similar to any of the foregoing), it being agreed that the obligations hereunder shall not be discharged except by the performance thereof strictly in accordance with the terms of this Agreement including, without limitation, the payment in full as herein provided of all Obligations hereunder. SECTION 3.8. Security fc)r the Bonds The Bank Bonds will be secured under the Trust Agreement on a parity with all other Parity Obligations Outstanding thereunder, and all amounts representing the principal and interest due and payable pursuant to the Trust Agreement on said Bank Bonds (including interest accruing on Bank Bonds at or below the Maximum Interest Rate) -21- 508017.1 S l7• will be payable from the sources provided therefor in the Trust Agreement at the times and in the amounts specified therefor in this Agreement and in such Trust Agreement; provided, however, that to the extent of any conflict between the provisions of this Agreement and the Trust Agreement, the provisions of this Agreement shall be controlling. All payment Obligations of the County hereunder, other than Bank Bonds, are payable solely from amounts available for such purposes in the Administrative Fee Fund under the Trust Agreement. Deposits to the Administrative Fee Fund are to be made by the County in accordance with the Trust Agreement on an annual basis and are subject to annual appropriation by the County. SECTION 3.9. Payments; Computations. (a) Except as otherwise specifically provided herein, all payments of principal of and interest on Bank Bonds shall be paid by wire transfer to the Bank or Bank Bondholder, as the case may be, and all amounts payable under this Agreement shall be made to the Bank not later than 2:00 p.m., New York time, on the date when due and shall be made in immediately available funds. If any such payment is received by the Bank after 2:00 p.m., New York time, it shall be deemed to have been paid on the next succeeding Business Day. The Bank shall give written instructions to the Trustee not less than three (3) hours before the date of such payment as to which Bank Bonds will be paid and the identities of the Owners thereof, if other than the Bank. Whenever any payment to be made with respect to Bank Bonds or hereunder shall be stated to be due on a day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day and, with respect to payments of principal (other than a payment of principal of Bank Bonds at maturity, upon defeasance, redemption or otherwise), interest shall be payable at the applicable rate during such extension. Whenever any payment to be made under Bank Bonds at maturity or earlier redemption shall be stated to be due on a day which is not a Business Day, the date for payment thereof shall be extended to the next succeeding Business Day. (b) All computations of interest and fees payable by the County under this Agreement shall be made on the basis of a three hundred sixty (360) day year and actual days elapsed; provided, however, that all computations of interest with respect to Bank Bonds shall be made on the basis established therefor in the Trust Agreement (other than interest at the Liquidity Advance Rate or Default Rate, as the case may be, on the Interest Payment Dates set forth in Section 2.7 hereof and computation of the Commitment Fee on the basis set forth in Section 3.1 hereof). All payments to the Bank hereunder shall be made in Dollars and in immediately available funds. Interest shall accrue during each period during which interest is computed from and including the first day thereof to but excluding the last day thereof. (c) The County agrees to pay to the Bank on each Purchase Date or Sale Date, as applicable, an amount equal to any charge imposed on the Bank pursuant to the Trust Agreement in connection with the transfer or exchange of Bonds. The County agrees to cause the Trustee to give the Bank timely notice of each such charge, including the amount thereof. ARTICLE IV CONDITIONS SECTION 4.1. Conditions to Effectiveness of this Agreement. This Agreement shall become effective on the date (the "Effective Date") on which the following conditions are performed to the satisfaction of the Bank and its Special Counsel: -22- 508017.1 (a) there shall have been delivered to the Bank the following: (i) counterparts of this Agreement which shall have been duly executed and delivered by the County and the Bank; (ii) executed copies of the Related Documents, including copies, certified by the Clerk of the Board of Supervisors, of the Bond Resolution, the Original Trust Agreement and the First Supplemental Trust Agreement; provided, however, that with respect to the Bonds, the Bank may receive Bonds marked as a "specimen" or otherwise marked as "void" and shall not need to receive fully executed Bonds; (iii) any other documents evidencing the County's or any other Governmental Authority's authorization or approval of the execution and delivery of, and the performance by the County of its obligations under, this Agreement, the.Trust Agreement and the other Related Documents; (iv) a conformed copy of the Official Statement; (v) a copy of each opinion (other than the opinion of counsel to the Underwriter and any supplemental opinion of Bond Counsel relating to the Official Statement), certificate, report and other document (in each case addressed to the Bank, if so requested, or upon which the Bank is entitled to reply) required to be delivered under the Bond Purchase Contract to the Underwriter; (vi) a copy of the final approving opinion of Bond Counsel for the County, in the form delivered on the Effective Date, together with a reliance letter of Bond Counsel dated the Effective Date and addressed to the Bank, allowing the Bank to rely on its final approving opinion with respect to the Bonds; (vii) an opinion of Bond Counsel, dated the Effective Date and addressed to the County, substantially to the effect that upon the issuance of the Bonds and the application of the proceeds thereof in accordance with the Trust Agreement, all liability of the County in respect of the 1994 Bonds purchased or defeased to maturity with proceeds of the Bonds has ceased, terminated and been discharged pursuant to the terms of the Trust Agreement; (viii) the opinion of the County Counsel, as to the enforceability of this Agreement, addressed to the Bank, and in form and substance satisfactory to the Bank; (ix) evidence that the Bonds shall have received a rating of no less than "Aa3"/"VMIG-1" from Moody's;and "AA-"/"A-1+" from S&P; (x) any fees and disbursements payable to the Bank hereunder on or prior to the Effective Date; (xi) to the extent not provided pursuant to (iii) above, copies of all approvals or authorizations by, or consents of, or notices to or registrations with, any Governmental Authority required for the County to enter into this Agreement and the Related -23- 508017.1 Documents and of all such approvals, authorizations, consents, notices, or registrations required to be obtained or made by the County prior to the Effective Date in connection with the transactions contemplated hereby and by the Related Documents; (xii) a certificate of incumbency, executed by the County Executive or his/her duly authorized representative; (xiii) a certificate from each of the Trustee, the Remarketing Agent and the Tender Agent containing the names and specimen signatures of those officers executing documents on behalf of each of the Trustee, the Remarketing Agent and the Tender Agent, respectively; (xiv) such budgets, projections, investment policies and guidelines for permitted investments of the County and the funds and accounts held under the Trust Agreement as security for the Bonds, as the Bank may reasonably request; (xv) evidence acceptable to the trustee for the 1994 Bonds that the conditions precedent to the effectiveness/completion of the Refunding Project have been satisfied and that the documents to be executed in connection therewith have been executed and delivered concurrently with,or prior to, this Agreement; (xvi) a copy of a verification report in connection with the defeasance of the 1994 Bonds, if applicable; and (xvii) such other documents, instruments and opinions as the Bank may reasonably request relating to the legal authority for, and the validity, binding effect and enforceability of, this Agreement, the Trust Agreement and the other Related Documents and any other matters relevant hereto or thereto, all in form and substance satisfactory to the Bank; (b) there shall have been delivered to the County the following: (i) a counterpart of this Agreement, duly executed by the Bank; (ii) a certificate of incumbency, executed by an authorized officer or authorized officers of the Bank, including a representation as to the accuracy of the information regarding the Bank included in the Official Statement; (iii) an opinion of Winston & Strawn, New York, New York, Special Counsel to the Bank, in form and substance satisfactory to the Bank; and (iv) an opinion of German counsel to the Bank, in form and substance satisfactory to the Bank; (c) no Default or Event of Default shall have occurred and be continuing on the Effective Date and neither will result from the execution or delivery of this Agreement or the other Related Documents by the County; -24- 508017.1 (d) the representations and warranties of the County contained (or incorporated by reference) in this Agreement shall be true and correct in all material respects on and as of the Effective Date as if made on and as of such date; (e) the County shall have delivered to the Bank a certificate signed by the Clerk of the Board of Supervisors or his/her designated representative, dated the Effective Date, affirming the truth and accuracy of clauses (c) and (d) of this Section; (f) no material adverse change in any law, rule, guideline or regulation (or the interpretation or administration thereof) shall have occurred and be continuing that in the opinion of Special Counsel for the Bank would make it illegal for the Bank to execute and deliver this Agreement as provided herein; (g) none of the Rating Agencies shall have decreased its rating on any Long Term Debt Issue from the rating in effect on or prior to the Effective Date; (h) the effectiveness of this Agreement shall not contravene any law, rule or regulation applicable to the County or the Bank or any request, guideline or directive of any Governmental Authority with jurisdiction over either the County or the Bank; and (i) all proceedings in connection with this Agreement, and all documents incidental thereto, shall be satisfactory to the Bank and its Special Counsel. SECTION 4.2. Conditions to Each Purchase. The obligation of the Bank to purchase Eligible Bonds hereunder on any Purchase Date is subject to the following conditions: (a) the Bank shall have received a Notice of Bank Purchase as required by Section 2.2 hereof, and (b) no Immediate Termination Event shall have occurred on or prior to such Purchase Date, Each notification delivered pursuant to clause (a) of this Section 4.2 hereof shall constitute a representation and warranty by the County on each Purchase Date that the condition described in clause (b) of this Section 4.2 has been satisfied on such Purchase Date. Concurrently with the payment by the Bank pursuant to Section 2.2 hereof, the validly authorized, authenticated and issued Bank Bonds to be purchased by the Bank on each Purchase Date, accompanied by duly executed instruments in blank with an appropriate guarantee of signature in form satisfactory to the Bank (or its nominee), or registered in such name or names as the Bank has directed. If the Bonds purchased pursuant to Section 2.2 are Book Entry Bonds, the beneficial ownership of such Bonds shall be credited to the account of the Bank, or if directed in writing by the Bank, a nominee or designee of the Bank, maintained at DTC, and such Bonds shall be registered in the name of the Bank or its nominee or designee on the bond register maintained by or on behalf of the County, and, prior to the sale of any Bank Bond by the Bank as provided in Section 2.4, the Bank agrees to give all notices in the manner and by the time required by DTC. -25- 508017.1 ARTICLE V REPRESENTATIONS AND WARRANTIES SECTION 5.1. Representations and Warranties of the County. The County represents and warrants to the Bank as follows: (a) Organization; Power. The County is a county organized and existing by virtue of and under the Constitution and the laws of the State, has the requisite power to carry on its present and proposed activities, and has and had full power, right and authority to enter into this Agreement and the Related Documents to which it is a party and to perform each and all of the matters and things herein and therein provided for. (b) Authorization of Agreement and Related Documents. The County has taken, or caused to be taken, all necessary action to authorize the execution, delivery and performance of its obligations under this Agreement and each of the Related Documents to which it is a party. (c) Validity of Agreement and Related Documents. This Agreement has been duly executed and delivered by the County and is, and each of the Related Documents to which it is a party when executed and delivered will be, legal, valid and binding obligations of the County enforceable against the County in accordance with their respective terms, except as they may be limited by bankruptcy, insolvency, reorganization or moratorium applicable to the County and general equitable principles regarding the availability of specific performance. (d) Compliance of Agreement and Related Documents. The execution, delivery and perfonmance by the County of this Agreement and each of the Related Documents to which it is a party in accordance with their respective terms do not and will not (i)contravene the Constitution or statutes of the State applicable to the County's participation in the issuance of these Bonds which are in effect on the date hereof; (ii) require any consent or approval of any creditor of the County; or (iii) conflict with, result in a breach of or constitute a default under, or accelerate the performance required by, any contract or agreement to which the County is a party or by which it or any of its properties may be bound (other than a payment of the 1994 Bonds through the tender and/or defeasance thereof as contemplated by the Related Documents). The County is in compliance with all statutes, rules and regulations of the state and federal governments, including ERISA and Environmental Laws. (e) Approvals. Except for the Bond Resolution of the Board of Supervisors of the County, which has been adopted and is in full force and effect, no other authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required for the due execution, delivery and performance by the County of this Agreement and each of the Related Documents to which it is a party, nor is any election or referendum of voters required in connection therewith. (f) Litigation. Except as disclosed to the Bank prior to the date hereof, there are no actions, suits or proceedings pending, nor, to the knowledge of the County, are there any actions, suits or proceedings threatened, against the County or any property of the County in any court or before any arbitrator of any kind or before or by any governmental or nongovernmental body which may have a Material Adverse Effect on the County's ability to perform its obligations -26- 508017.1 under this Agreement or the Related Documents or which in any manner question the validity or enforceability of this Agreement or the Related Documents. (g) Financial Condition. The County's financial statements prepared for each of the Fiscal Years of the County ended June 30, 1997, 1998 and 1999, copies of which have been furnished to the Bank, have been prepared in accordance with generally accepted accounting principles and fairly present the County's financial condition as of such dates and the results of its operations for the periods then ended. (h) No Adverse Change. Since June 30, 1999, there has not been any material adverse change in the financial position, results of operations, business, or prospects of the County. (i) Amendments, Etc. There is no amendment, or proposed amendment certified for placement on a statewide ballot, to the Constitution of the State or any published administrative interpretation of the Constitution of the State or any State law, or any legislation which passed either house of the State legislature, or any published judicial decision, the effect of which could reasonably be expected to have a Material Adverse Effect. 0) No Immunity. Subject to compliance with specific legal procedures with respect to the enforceability of judgments against counties under California law, the County has no right of immunity from the jurisdiction of any court of competent jurisdiction or from any legal process therein which could be asserted in any action to enforce the obligations of the County under this Agreement or the Related Documents. (k) Security. The obligations of the County to pay principal and interest due on the Bank Bonds are absolute and unconditional obligations of the County imposed upon the County by law, are secured by and are payable from the amounts available for such purposes under the Trust Agreement and are otherwise enforceable against the County pursuant to the Retirement Law, the Bond Resolution and the Trust Agreement. All payment Obligations of the County hereunder, other than Bank Bonds, are payable from amounts available for such purpose in the Administrative Fee Fund under the Trust Agreement. Deposits to the Administrative Fee Fund are to be made by the County in accordance with the Trust Agreement on an annual basis and are subject to annual appropriation by the County. (1) Incorporation of Representation and Warranties by Reference. The County hereby makes to the Bank the same representations and warranties as are set forth in the Trust Agreement and the other Related Documents (in each case, as in effect on the Effective Date), which representations and warranties, as well as the related defined terms contained therein, are hereby incorporated by reference with the same effect as if each and every representation and warranty and defined term were set forth herein in its entirely. No amendment to such representations and warranties or defined terms made pursuant to the Related Documents shall be effective to amend such representations and warranties and defined terms as incorporated by reference herein without the written consent of the Bank. -27- 508017.1 (m) No Limitation on Interest Rate. The laws of the State impose no limitation on the rate of interest payable by the County hereunder or in connection with any Bank Bond evidencing any Liquidity Advance or Term Loan. (n) Disclosure. As of the date hereof, the information provided by the County in the Official Statement is accurate in all material respects for the purposes for which its use is authorized. Excluding information with respect to the Bank, as to which no representation is made, the Official Statement does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements made therein, in light of the circumstances under which they are or were made, not misleading. (o) No Event of Default under the Trust Agreement. No "Event of Default", as defined in the Trust Agreement, and no event which, with the giving of notice or lapse of time or both, would constitute such an "Event of Default" under the Trust Agreement has occurred and is continuing. SECTION 5.2. Survival of Representations and Warranties, Etc. All representations and warranties made by the County in any certificate, financial statement or other instrument delivered by or on behalf of the County pursuant to or in connection with this Agreement (including, but not limited to, any such statement made in or in connection with any amendment hereto or thereto)shall constitute representations and warranties made under this Agreement. All representations and warranties under this Agreement shall survive the execution and delivery of this Agreement, any investigation by the Bank and the purchase of any Bond. ARTICLE VI COVENANTS SECTION 6.1. Affirmative Covenants. From the date hereof until the final day of the Commitment Period and payment in full of all Obligations, the County shall: (a) Maintenance of Existence. Preserve and maintain its existence. (b) Inspection of Books. Permit representatives of the Bank, from time to time, as often as may be reasonably requested, to (i) inspect its books and records and make copies and take extracts from such books and records which relate to its performance under this Agreement or any Related Document and (ii) discuss with its officers and accountants its business, financial condition, results of operations and prospects. (c) Reporting Requirements. Furnish or cause to be furnished to the Bank the following: (i) as soon as available, and in any event within two hundred ten (210) days after the end of each Fiscal Year, a copy of the County's audited financial statements for such Fiscal Year; (ii) as soon as available, and in any event on or before August 31 in each year, a copy of the County's adopted budget resolution relating to the budget for the next succeeding Fiscal Year, certified by the County Clerk; -28- 508017.1 SCJ. (iii) simultaneously with the delivery of each set of financial statements referred to in clause (i) above, and forthwith upon the occurrence of any Default, a certificate of the County Administrator, stating whether there exists on the date of such certificate any Default and, if any Default then exists, setting forth the details thereof and the action which the County is taking or proposes to take with respect thereto; (iv) promptly advise the Bank in writing if the Board of Supervisors of the County fails to appropriate or make payments to the County of Contra Costa Employee's Retirement Fund in accordance with its obligations under the Retirement Law; and (v) such other information respecting the condition or operations, financial or otherwise,of the County as the Bank may from time to time reasonably request. (d) Notice of Default. Give prompt notice to the Bank of the occurrence of a Default or an Event of Default, specifying the details of such Default or Event of Default and the action that the County is taking or proposes to take with respect thereto. (e) Compliance With Laws, Etc. Comply with the requirements of all applicable law (including, without limitation, compliance with the Enabling Acts, the Retirement Law, Environmental Laws, ERISA and state securities and blue sky laws in connection with the offering, sale and delivery of the Bonds), noncompliance with which, singly or in the aggregate, could reasonably be expected to have a Material Adverse Effect. (f) Maintenance of Approvals, Filings and Registrations. At all times maintain and cause to be maintained in effect, renew and comply with all the terms and conditions of all governmental approvals as may be necessary or appropriate under any applicable law for the performance of this Agreement and the Related Documents to which the County is a party and to make its obligations hereunder and under such Related Documents legal, valid, binding and enforceable. (g) Payment. Reimburse the Bank for any outstanding Obligations under this Agreement as provided herein. (h) Accuracy of Information. Ensure that all data, certificates, reports, financial statements, opinions of counsel, documents and other information furnished to the Bank, whether pursuant to this Agreement, or in connection with or pursuant to any amendment or modification of, or waiver under, this Agreement, shall, at the time the same are so furnished, be complete and correct in all material respects, and not contain any untrue statements of a material fact or omit to state a material fact necessary in order to make the statements contained therein not misleading, and the furnishing of same to the Bank shall constitute a representation and warranty by the County to that effect. (i) Compliance With Related Documents. Keep and perform all of its covenants and agreements contained in the Related Documents to which it is a party (including, without limitation, all provisions therein for the benefit of the Bank). 0) Litigation; Material Change. Promptly notify the Bank of (i) the existence and status of any litigation which individually or in the aggregate, in the event of an unfavorable -29- 508017.1 outcome, could reasonably be expected to have a Material Adverse Effect, or (ii) any change in any material fact or circumstance represented or warranted in this Agreement or in any of the Related Documents. (k) Expiration Date. In the event of non-renewal of the Expiration Date, promptly but in no event later than the last day of the Commitment Period, use its best efforts to (i) obtain an Alternate Liquidity Facility or(ii)convert the interest rate on the Bonds to a Fixed Rate Mode and purchase, or cause to be purchased, all Bank Bonds. (1) Documents Related to Other Securities. At least ten (10) days prior to the issuance thereof, notify the Bank of the sale or placement of any Parity Obligations and, as soon as practicable but in any event within ten (10) days after the issuance thereof, furnish to the Bank copies of any prospectus, official statement, offering circular or placement memorandum, and any supplements thereto, that the County makes available in connection with the offering for sale of any such Parity Obligations. (m) Bond Rating. Notify the Bank of any change in the County Rating assigned to any Long Term Debt Issue within ten (10) Business Days upon receipt by the County of notification thereof. (n) Drop in Bond Rating; Purchase of Bank Bonds. If the County Rating assigned to any Long Term Debt Issue is reduced by either Moody's or S&P from "Aa3" or "AA-" respectively, to below "A3" or "A-", respectively, use its best efforts to (i)obtain an Alternate Liquidity Facility or (ii) convert the interest rate on the Bonds to a Fixed Rate Mode and purchase, or cause to be purchased, all Bank Bonds. The County agrees at all times to cause the Bonds to be rated by no less than two Rating Agencies. (o) Legislation. Promptly deliver to the Bank copies of all enacted State legislation of which the County's Director of Capital Facilities and Management has actual knowledge and which relates to, in any material way, or impacts upon the Enabling Acts, the Retirement Law, this Agreement or the Related Documents or the ability of the County to perform its obligations in connection herewith or therewith. (p) Appropriations. The Board of Supervisors will make annual appropriations in accordance with the Retirement Law in order to pay the principal of, premium, if any, and interest on the Bonds (including all Bank Bonds. The County will make the annual appropriations necessary in order to fund the Administrative Fee Fund created and maintained pursuant to the Trust Agreement in an amount necessary to pay to the Bank all of the County's other payment Obligations hereunder, exclusive of the amounts due and payable as principal and interest on the Bank Bonds. (q) Additional Documents. Furnish to the Bank from time to time, at the County's expense, all further instruments and documents, duly executed and delivered by the County, and take all further action that may be reasonably necessary, or that the Bank may reasonably request, in order to (i) perfect and protect any security interest or other right or interest assigned, or purported to be assigned, to the Bank under or in connection with this Agreement, the Trust Agreement or any other Related Document, or (ii)enable the Bank to exercise or enforce its -30- 508017.1 a-6-al rights or remedies under or in connection with this Agreement, the Bond Resolution or any other Related Document. (r) Obligations under Related Documents. Take all actions as may be reasonably requested by the Bank to enforce the obligations under the Related Documents of each of the other parties thereto. (s) Incorporation of Covenants by Reference. The County agrees that it will perform and comply with each and every material covenant and agreement required to be performed or observed by it in the Trust Agreement and the other Related Documents, which provisions, as well as related defined terms contained therein, are hereby incorporated by reference herein with the same effect as if each and every such provision were set forth herein in its entirety. (t) Proceeds of Bonds. The proceeds of the Bonds will be used by the County solely for the purposes described in the Official Statement, the Bond Resolution and the Trust Agreement. (u) Proceeds of Banff Bonds. The County will not permit the proceeds of any Liquidity Advance hereunder to be used for any purpose other than to pay the Purchase Price due and payable on any Purchase Date in connection with any Eligible Bonds. (v) Additional Bonds. The County shall not issue any Parity Obligations in the future unless each of the conditions precedent set forth in the Trust Agreement shall have been satisfied. (w) Selection of Bonds for Redemption. The County shall select, or cause to be selected, for redemption any and all Bank Bonds prior to selecting, or causing to be selected, for redemption any Bonds that are not Bank Bonds. The County shall not declare, instruct the Trustee to declare or permit an optional redemption of the Bonds pursuant to the Trust Agreement unless such optional redemption will be funded from sources other than Liquidity Advances made under this Agreement. (x) Conversions; Defeasance. The County (a) will promptly furnish, or cause to be furnished, to the Bank, not later than its furnishing the same to the Remarketing Agent, a copy of any written notice furnished by the County to the Trustee pursuant to the Trust Agreement indicating a proposed conversion of the interest rate on the Bonds; and (b) shall not permit a conversion of the Bonds to a Mode other than the Daily Mode or the Weekly Mode without the prior written consent of the Bank if, after giving effect to such conversion, any Bonds remain as Bank Bonds. In addition, the County will not defease, nor allow the defeasance of, the Bonds without having first or simultaneously satisfied all of its Obligations hereunder. SECTION 6.2. Negative Covenants. From the date hereof until the last day of the Commitment Period and payment in full of all Obligations hereunder: (a) No Amendment of Certain Documents. The County will not amend, supplement, modify or waive any of the provisions of the Bond Resolution, the Trust Agreement or the Bonds, or consent to any of the foregoing, without the prior written consent of the Bank; provided, however, the consent of the Bank will not be required for any amendment, supplement, -31- 508017.1 a -6-a1 modification or waiver of any of the foregoing documents which does not require the consent of the Owners unless such amendment, supplement, modification or waiver affects the Bank's rights under such document or hereunder,provided,further, however, the issuance of additional Parity Obligations in accordance with the provisions of the Trust Agreement will not require the consent of the Bank. The County will give the Bank notice as promptly as practicable (but in no event less than 10 Business Days) of any proposed amendment, supplement, modification or waiver of any provision of the Bond Resolution or the Trust Agreement and of any meeting of the Board of Supervisors at which any of the foregoing will be discussed or considered. (b) Preservation of Corporate Existence, etc. The County shall take no action to terminate its existence as a body corporate and politic, duly incorporated, validly existing and in good standing under the laws of the State. (c) County Actions. The County shall take no action inconsistent with the rights of the Bank under this Agreement including, without limitation, its obligations to make payments to the Bank hereunder. (d) No Violation of Environmental Laws. The County shall not violate, or knowingly consent to any action by or affecting the County which may or will have the effect to violate, any Environmental Laws where such violation would have a material adverse effect on the financial condition of the County considered as a whole, or on the ability of the County to carry out its business. (e) Offering Documents. Other than as expressly consented to in writing by the Bank, the County shall not refer to the Bank in any offering or reoffering document with respect to the Bonds or make any changes in reference to the Bank in any revision of any such offering or reoffering document without the Bank's prior written consent thereto, which consent shall not be unreasonably withheld. (f) Investments. The County shall not make any investments of amounts pledged to pay the Bonds which are not permitted pursuant to its guidelines as in effect on the Effective Date or as provided therefor in the Trust Agreement. (g) Tender Agent; Remarketing Agent. The County shall not substitute or replace the Tender Agent or the Remarketing Agent unless the County shall have received the prior written approval of the Bank with respect to a successor or replacement for such Person, which approval shall not be unreasonably withheld. ARTICLE VII EVENTS OF DEFAULT SECTION 7.1. Events of Default. The following events shall be "Events of Default": (a) . an event of default or default shall have occurred and shall be continuing under any of the Related Documents (other than an Event of Default specified hereinbelow); or -32- 508017.1 (b) the County shall fail to pay or cause to be paid when due (i) any amounts with respect to the principal of or interest or premium, if any, on the Bonds (including Bank Bonds) or any Parity Obligations, (ii) any amounts payable under Section 2.2 or 2.7 hereunder (other than as described in (i) above), or (iii) any other amount payable pursuant to this Agreement or the Bonds (including Bank Bonds); or (c) the County shall fail to observe or perform any covenant or agreement set forth in Sections 6.1(a), 6.1(k), 6.1(n), 6.1(p), 6.1(u), 6.1(x), 6.2(a) and 6.2(b) hereof; or (d) the County shall fail to observe or perform any covenant or agreement contained (or incorporated by reference) in this Agreement (other than those covered by clauses (b) or (c) above) for 30 days after written notice thereof requesting that such default be remedied has been given to it by the Bank; provided, however, such breach shall not constitute an Event of Default after such 30 day period for such period of time as, in the judgment of the Bank, the County is diligently pursuing a cure or correction of such failure, but in no event shall such period extend more than 60 days after such written notice was initially given; or (e) S&P and Moody's shall have (i) assigned any Long Term Debt Issue a rating below "BBB", in the case of S&P, and "Baal", in the case of Moody's, (ii) withdrawn their ratings of the Bonds or any Long Term Debt Issue, other than as a result of debt maturity, redemption, defeasance, nonapplication or nonprovision of information or due to a withdrawal or suspension of the Bank's short-term rating or (iii) suspended their ratings of the Bonds or any Long Term Debt Issue, other than as a result of debt maturity, redemption or defeasance or due to a withdrawal or suspension of the Bank's short-term rating; or; (f) (i) default by the County in the payment of any Debt (other than the Bonds or any Parity Obligations) including, without limitation, any principal or sinking fund installment, any interest, any premium thereon or any other related amount when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) or within any applicable grace period or (ii) the occurrence of any event under any ordinance, indenture, agreement, resolution, or instrument giving rise to any Debt (other than the Bonds or any Parity Obligations), which results in or would entitle the obligee thereof or a trustee on behalf of such obligee to pursue any remedies against the County, including the right to declare the acceleration of any maturity thereof or upon the lapse of time or the giving of notice or both would entitle the obligee thereof or a trustee on behalf of such obligee to accelerate any maturity thereof, or which results in the forfeiture by the County of any of its rights under any such ordinance, indenture, agreement, resolution, or instrument; or any such Debt (other than the Bonds or any Parity Obligations) shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), prior to the stated maturity thereof; or (g) the County (or any Governmental Authority having jurisdiction over the County) shall commence a voluntary case or other proceeding seeking (i) liquidation, reorganization, moratorium, debt adjustment or other relief for the County under any -33- 508017.1 S� a_d,di bankruptcy, insolvency, or other similar law now or hereafter in effect or (ii) the appointment of a receiver, liquidator, custodian, or other similar official with respect to the County or any substantial part of its property, or shall consent to or acquiesce in such relief or the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it; or (h) a receiver, liquidator, custodian, or other official, appointed in an involuntary case or proceeding commenced against the County, appointed without consent or acquiescence of the County, takes charge of a substantial part of the County's properties and such action is not stayed, discharged, or vacated for a period of 30 days; or (i) the County shall make a general assignment for the benefit of creditors, or declare a moratorium with respect to its debts, or shall fail generally to pay its debts as they become due, or shall take any action to authorize any of the foregoing; or 0) an involuntary case or other proceeding shall be commenced against the County seeking (i) liquidation, reorganization, or other relief with respect to the County's debts under any bankruptcy, insolvency, or other similar law now or hereafter in effect, or (ii) the appointment of a custodian, receiver, liquidator, trustee or other similar official for the County or for any substantial part of the County's property, and such proceeding or case shall not be dismissed or stayed within 90 days after the filing thereof or an order of relief shall be entered against the County under the federal bankruptcy laws as now or hereafter in effect; or (k) any representation or warranty made in Article V hereof or in any Related Document or in any certificate or other document delivered pursuant hereto shall prove to have been incorrect or misleading in any material respect when made; or (1) (i) a final, non-appealable judgment or order for the payment of money in excess of $10,000,000 payable from the funds required to pay the County's unfunded accrued actuarial liability evidenced by the Bonds and any Parity Obligations shall be rendered against the County, and such judgment or order shall continue unsatisfied and unstayed for a period of 60 days, or (ii)the County shall have failed promptly to lift any execution, garnishment, or attachment pursuant to such judgment or order as may materially impair the County's ability to carry on its business; or (m) except as set forth in (b)(i) above, the County shall default in the due performance or observance of any term, covenant or agreement under any agreement or instrument relating to any Parity Obligations or any other event shall occur and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such default or event is to accelerate, or permit the acceleration of, the maturity of such Parity Obligations; or any such Parity Obligations shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), prior to the stated maturity thereof; or (n) the Retirement Law is repealed, reenacted, amended or otherwise modified (whether directly or indirectly, and including, without limitation, by legislative -34- 508017.1 S Z), or judicial action), and such repeal, reenactment, amendment or modification would have, in the reasonable opinion of the Bank, a Material Adverse Effect on the power or authority of the County to provide for the payment of the principal of and interest on the Bonds; or (o) any material provision of this Agreement, the Enabling Acts, the Retirement Law, the Trust Agreement or other Related Document concerning the security or payment of any Bond (including any Bank Bond) shall, for any reason, cease to be valid and binding on the County or in full force and effect or shall be declared to be null and void, in each case, pursuant to a final administrative determination or judicial decision from which there shall not exist any further right of appeal or against which a timely appeal shall not have been filed by the County; or the validity or enforceability of this Agreement, the Trust Agreement, the Enabling Acts, the Retirement Law or any Bond (including any Bank Bond) shall be contested (i) by the County or (ii) by any Governmental Authority having jurisdiction over the County, unless with respect to clause (ii) above, the same is being contested by the County in good faith and by appropriate proceedings; or (p) the County shall deny that it has any or further liability or obligation under this Agreement, the Trust Agreement,the Enabling Acts, the Retirement Law or any Bond. SECTION 7.2. Remedies.- Upon the occurrence and continuance of any Event of Default, the Bank may (in addition to any rights the Bank has under Section 4.2): (a) give written notice of such Event of Default to the Trustee, the Tender Agent, the County and the Remarketing Agent and request the Trustee to cause a mandatory purchase of the Bonds in accordance with the Trust Agreement and the Bonds and prohibit the remarketing of the Bonds, thereby causing the Bank's obligations under this Agreement to terminate 30 days thereafter; and (b) take any other action or remedy permitted by law or in equity to enforce the rights of the Bank hereunder and under the Bonds and any Related Document. Notwithstanding Section 7.2(a) or 7.2(b) above, (i) the Bank's obligation to purchase Bonds hereunder shall terminate immediately without notice or any action on the part of the Bank upon the occurrence of an Immediate Termination Event hereunder and (ii) the Bank may require that all Obligations hereunder (other than outstanding Liquidity Advances and Term Loans) become due and payable immediately, without demand therefor; provided, however, that if and to the extent any Event of Default hereunder is deemed an "Event of Default" under the Trust Agreement permitting the acceleration of all Parity Obligations pursuant thereto, then, in such event, the Bank may require that all Bank Bonds become due and payable immediately, without demand therefor. Failure to take action in regard to one or more Events of Default shall not constitute a waiver of, or the right to take action in the future in regard to, such or subsequent Events of Default. Upon the occurrence of any Event of Default hereunder, all Obligations due and payable hereunder shall bear interest at the Default Rate. -35- 508017.1 ARTICLE VIII MISCELLANEOUS SECTION 8.1.Notices. All notices, requests and other communications to any party hereunder shall be in writing except as expressly provided otherwise in this Agreement, and shall be hand delivered, sent by facsimile transmission, or sent by mail to the addresses set forth on Exhibit D attached hereto and incorporated herein by this reference, or at such other address as may from time to time be furnished to the other parties, effective upon the receipt of notice thereof given as set forth above. Notwithstanding any provision to the contrary and unless requested in writing to not receive any notice as provided in this sentence by a party set forth in Exhibit D, an electronic mail shall be sufficient notice to a party set forth in Exhibit D. SECTION 8.2. No Waivers. (a) The obligations of the County hereunder shall not in any way be modified or limited by reference to any other document, instrument or agreement (including, without limitation, the Related Documents) except as otherwise expressly provided herein. (b) No failure or delay by the Bank in exercising any right, power or privilege hereunder, under the Related Documents or under the Bonds and no course of dealing between the County and the Bank shall operate as a waiver hereof or thereof nor shall any single or partial exercise hereof or thereof preclude any other or further exercise hereof or thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies which the Bank would otherwise have. SECTION 8.3. Ainendinents and Waivers. (a) No provision of this Agreement or any Bank Bond may be amended, modified, discharged or waived unless such amendment or waiver is in writing and is signed by the County and approved by the Bank. (b) The County shall provide notice to any Rating Agency of any amendment to this Agreement. SECTION 8.4. Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and shall inure to the benefit of the County and the Bank and their respective successors and assigns, except that the County and the Bank (except as provided below) may not assign or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the other party hereto. (b) The Bank may at any time grant to one or more banks or other institutions (each a "Participant") participating interests in the Available Commitment or any or all of its Bank Bonds. In the event of any such grant by the Bank of a participating interest to a Participant, whether or not notice is given to the County, the Bank shall remain responsible for the performance of its obligations hereunder, and the County shall continue to deal solely and directly with the Bank in connection with the Bank's rights and obligations under this Agreement. The County agrees that each Participant shall, to the extent provided in its participation agreement and subsection (d) below, be entitled to the benefits of Sections 3.2, 3.3, 3.4 and 3.6 hereof with respect to its participating interest. Notwithstanding the grant of a -36- 508017.1 -501 participating interest by the Bank to a Participant, it is understood and agreed by the parties to this Agreement that the County shall continue to deal solely and directly with the Bank. (c) The Bank may at any time assign all or any portion of its rights under this Agreement and any Bank Bonds to a Federal Reserve Bank. The obligations of the Bank under this Agreement or any part thereof may be assigned by the Bank to any financial institution with equivalent short-term ratings upon the prior written consent of the County (which consent shall not be unreasonably withheld). No such assignment shall release the Bank from its obligations hereunder. (d) No Participant or other transferee of the Bank's rights shall be entitled to receive any greater payment under Sections 3.2, 3.3, 3.4 or 3.6 hereof than the Bank would have been entitled to receive with respect to the rights transferred unless such transfer is made with the County's prior written consent. SECTION 8.5. Terni. of Ild s Agreement; Survival. (a) The obligation of the Bank to purchase Bonds shall terminate on the last day of the Commitment Period. This Agreement shall terminate when the Available Commitment shall have expired, no Bank Bonds remain outstanding and all Obligations payable pursuant to this Agreement have been paid in full. (b) Notwithstanding subsection (a) above, the obligations of the County under Sections 3.2, 3.3, 3.4 and 3.6 hereof, including all indemnities set forth herein, shall survive the execution and delivery of this Agreement, the Bonds and the Related Documents, the payment of the Bonds and the termination of the Available Commitment;provided, however, that the obligations of the County under Sections 3.2 and 3.3 shall survive the termination of this Agreement for a period not to exceed three years. SECTION 8.6. Choice of Law; Service of Process; Waiver of Jury Trial. (a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK; PROVIDED, HOWEVER, THAT THE AUTHORITY TO ENTER INTO THIS AGREEMENT AND THE OBLIGATIONS OF THE COUNTY HEREUNDER SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA. (b) THE COUNTY IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE RELATED DOCUMENTS, BY THE MAILING OF COPIES OF SUCH PROCESS TO IT AT ITS ADDRESS SPECIFIED IN EXHIBIT D. THE COUNTY ACKNOWLEDGES THAT THE TIME AND EXPENSE REQUIRED FOR TRIAL BY JURY EXCEED THE TIME AND EXPENSE FOR A BENCH TRIAL AND HEREBY WAIVES, TO THE EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL PROCEEDING TO WHICH THE BANK AND THE COUNTY ARE PARTIES ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE RELATED DOCUMENTS. -37- 508017.1 SECTION 8.7. Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. SECTION 8.8. Beneficiaries. Except as provided below, this Agreement is made solely for the benefit of the County, the Tender Agent, the Trustee and the Bank, their successors and assigns, and no other Person (including, without limitation, any Owners) shall have any right, benefit or interest under or because of the existence of this Agreement. SECTION 8.9. Headings Descriptive. The headings of the several sections and subsections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement. SECTION 8.10. [RESERVED.] SECTION 8.11. Severability. If any provision of this Agreement shall be held or deemed to be or shall in fact be illegal, inoperative or unenforceable, the same shall not affect any other provision or provisions herein contained or render the same invalid, inoperative or unenforceable to any extent whatever. SECTION 8.12. Interest Limitation. Except as otherwise provided in Section 3.5, the rate or amount of interest charged, collected, taken or received hereunder in connection with any Obligation hereunder shall not exceed the Maximum Interest Rate. SECTION 8.13. No Immunity. To the extent the County has any right of immunity, sovereign or otherwise, from set-off or legal proceedings, the County hereby irrevocably waives, to the fullest extent permitted by law, such right to immunity in respect of its Obligations under or related to this Agreement and the transactions contemplated hereby. SECTION 8.14. Right of Set-off. Upon the occurrence and during the continuance of any Event of Default, the Bank is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by the Bank at any of its offices to or for the credit or the account of the County against any and all of the Obligations of the County under this Agreement, irrespective of whether or not the Bank shall have made any demand therefor and although such Obligations may be contingent or unmatured. The Bank agrees promptly to notify the County after any such set-off and application made by the Bank; provided, that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Bank under this Section 8.14 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Bank may have. SECTION 8.15. Liability of the Bank. As between the Bank and the County, the County assumes all risks of the acts or omissions of the Tender Agent and the Trustee with respect to the use of any money made available by the Bank in accordance with this Agreement. Neither the Bank nor any of its officers or directors shall be liable or responsible for (a) the use which may be made of any money made available by the Bank in accordance with this Agreement or for any acts or omissions of the Tender Agent and the Trustee in connection -38- 508017.1 therewith; (b) the validity, enforceability, sufficiency, or genuineness of any Related Document or other document, or of any endorsement(s) thereon, even if any such document should in fact prove to be in any or all respects invalid, insufficient, fraudulent, or forged; (c)payment by the Bank against presentation of documents which do not strictly comply with the terms of this Agreement; (d) any amendment or waiver of or any consent to departure from all or any of the Bonds or other Related Documents; (e) the existence of any claim, set-off, defense or other right that the County may have at any time against the Bank, the Tender Agent, the Remarketing Agent, the Trustee or any other Person, whether in connection with this Agreement, the transactions contemplated herein or in any of the other Related Documents, or any unrelated transaction; or (f) any other circumstances whatsoever in making or failing to make payment under this Agreement, except only that the County shall have a claim against the Bank, and the Bank shall be liable to the County, to the extent, but only to the extent, of any direct, as opposed to consequential or punitive, damages suffered by the County which the County proves were caused by (i) the Bank's gross negligence or willful misconduct in determining whether documents presented under this Agreement strictly comply with the terms of this Agreement, or (ii) the Bank's willful failure to pay under this Agreement after the presentation to it by an authorized representative of the Tender Agent of documents strictly complying with the terms and conditions of this Agreement. In furtherance and not in limitation of the foregoing, the Bank may accept documents that appear on their face to be in order without responsibility for further investigation unless the Bank has received actual notice or information to the contrary. -39- 508017.1 s D, a-6-moi IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their duly authorized officers, all as of the date first above written. COUNTY OF CONTRA COSTA, CALIFORNIA By: County Administrator WESTDEUTSCHE LANDESBANK GIROZENTRALE, acting through its New York Branch By Title By Title 508017.1 EXHIBIT A NOTICE OF BANK PURCHASE (Optional Purchase) Westdeutsche Landesbank Girozentrale, acting through its New York Branch 1211 Avenue of the Americas New York, New York 10036 Attention: Loan Administration Re: Standby Bond Purchase Agreement, dated as of January 1, 2001, between Westdeutsche Landesbank Girozentrale, acting through its New York Branch, and County of Contra Costa, California The undersigned, a duly authorized signatory of , as Tender Agent (the "Tender Agent"), hereby certifies to Westdeutsche Landesbank Girozentrale, acting through its New York Branch (the "Bank"), in accordance with the Standby Bond Purchase Agreement (the "Standby Bond Purchase Agreement"), dated as of January 1, 2001, between the County of Contra Costa, California (the "County") and the Bank relating to the County's Taxable Pension Obligation Bonds, Refunding Series 2000 (the "Bonds"; all capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Standby Bond Purchase Agreement), that: (1) Notice of tender of Eligible Bonds for purchase pursuant to the optional tender provisions of the Trust Agreement has been received by the Tender Agent. (2) Moneys in the possession of the Tender Agent pursuant to the Trust Agreement are insufficient for such purchase. (3) The total principal amount of the Eligible Bonds for which there is not sufficient moneys referred to above is $ (4) Accrued, but unpaid, interest on such Bonds, computed in accordance with the terms of the Trust Agreement, as of the date of delivery hereof to the Bank, is $ 1 (5) The Bonds referred to above are hereby tendered to the Bank for purchase pursuant to the Standby Bond Purchase Agreement on the date hereof for an aggregate purchase price of$ Z To be used only if the Bonds are to be purchased on a date other than an Interest Payment Date that would have occurred without regard to the Purchase Date. A-1 508017.1 (6) Upon completion of purchase, the Tender Agent will deliver the Bonds to the Bank (or its nominee) in accordance with the requirements of the Trust Agreement and the Standby Bond Purchase Agreement. (7) The Bonds for which notice of tender of Bonds for purchase has been received bear interest in the [Weekly Mode] [Daily Mode].3 (8) The Purchase Date is , (9) Payment of the amount set forth in paragraph (5) hereof should be made to the Tender Agent in accordance with the following wire instructions: Bank: Address: ABA#: Account name or reference: (10) The Tender Agent has prepared, executed and delivered this Notice in accordance with the requirements of the Trust Agreement. To the best of its knowledge, without having undertaken any independent investigation, (a) no Immediate Termination Event has occurred or is continuing as of the date of this Notice and (b) none of the Bonds being tendered is in a Mode other than the Daily Mode or Weekly Mode or is owned by or on behalf of the County. IN WITNESS WHEREOF, the Tender Agent has executed and delivered this Notice as of the day of , as Tender Agent By: Title: (footnote continued. . .) 2 Insert the sum of principal and accrued interest shown in paragraphs 3 and 4. 3 Delete as applicable. A-2 508017.1 EXHIBIT B NOTICE OF BANK PURCHASE (Mandatory Purchase) Westdeutsche Landesbank Girozentrale, acting through its New York Branch 1211 Avenue of the Americas New York, New York 10036 Attention: Loan Administration Re: Standby Bond Purchase Agreement, dated as of Abe January 1, 2000 2001, between Westdeutsche Landesbank Girozentrale, acting through its New York Branch, and County of Contra Costa, California The undersigned, a duly authorized signatory of , as Tender Agent (the "Tender Agent"), hereby certifies to Westdeutsche Landesbank Girozentrale, acting through its New York Branch (the "Bank"), in accordance with the Standby Bond Purchase Agreement (the "Standby Bond Purchase Agreement"), dated as of Deeember-1 2000 January 1, 2001, between the County of Contra Costa, California (the "County") and the Bank relating to the County's Taxable Pension Obligation Bonds, Refunding Series 2000 (the "Bonds"; all capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Standby Bond Purchase Agreement), that: (1) Eligible Bonds have been tendered or deemed tendered to the Tender Agent for mandatory purchase pursuant to the terms of the Bonds. (2) Moneys in the possession of the Tender Agent pursuant to the Trust Agreement are insufficient for such purchase. (3) The total principal amount of the Eligible Bonds referred to above is $ (4) Accrued, but unpaid, interest on such Bonds, computed in accordance with the terms of the Trust Agreement, as of the date of delivery hereof to the Bank, is $ 1 (5) The Bonds referred to above are being delivered to the Bank for purchase pursuant to the Standby Bond Purchase Agreement on the date hereof for an aggregate purchase price of$ z To be used only if the Bonds are to be purchased on an Interest Payment Date that coincides with,and is the result of,a Purchase Date caused by delivery of this Exhibit B. B-1 50&017.1 �7 (6) Upon completion of purchase, the Tender Agent shall deliver the Bonds to the Bank (or its nominee) in accordance with the requirements of the Trust Agreement and the Standby Bond Purchase Agreement. (7) The Purchase Date is , (8) Payment of the amount set forth in paragraph (5) hereof should be made to the Tender Agent in accordance with the following wire instructions: Bank: Address: ABA#: Account name or reference: (9) The Tender Agent has prepared, executed and delivered this Notice in accordance with the requirements of the Trust Agreement. To the best of its knowledge, without having undertaken any independent investigation, (a) no Immediate Termination Event has occurred or is continuing as of the date of this Notice and (b) none of the Bonds being tendered is in a Mode other than the Daily Mode or the Weekly Mode or is owned by or on behalf of the County. IN WITNESS WHEREOF, the Tender Agent has executed and delivered this Notice as of the day of , as Tender Agent By: Title: (footnote continued. . .) 2 Insert the sum of principal and accrued interest shown in paragraphs 3 and 4. B-2 508017.1 a-6-6I EXHIBIT C FORM OF REQUEST FOR EXTENSION OF EXPIRATION DATE [Date] Westdeutsche Landesbank Girozentrale, acting through its New York Branch 1211 Avenue of the Americas New York, New York 10036 Attention: Joseph R. Herrera, Director Re: Request for Extension of Expiration Date Ladies and Gentlemen: Reference is hereby made to that certain Standby Bond Purchase Agreement (the "Agreement"), dated as ofer- January 1, ?9A9 2001, between Westdeutsche Landesbank Girozentrale, acting through its New York Branch (the "Batik"), and the County of Contra Costa, California (the "County"). All capitalized terms contained herein which are not specifically defined shall be deemed to have the definition set forth in the Agreement. In accordance with Section 2.6 of the Agreement, the County hereby requests an extension of the Expiration Date for an additional commitment period. The current Expiration Date is (or, if such day is not a Business Day, then the next preceding Business Day), and the County hereby requests that (1) your agreement to an extension of the Expiration Date be to a date which is not sooner than ( ) days after the date of your written approval endorsed below and (2) your decision to accept or decline such an extension be communicated with a copy delivered to the Tender Agent, the Trustee and the County, as soon as possible but in no event later than ( ) days following your receipt of this extension request. We understand that if you fail to respond on or prior to such thirtieth (30th) day, you shall be deemed to have rejected such request. From and after the effective date of any extension agreed to by you, to and including 1 (the "Commitment Fee Change Date"), the Commitment Fee shall accrue at the rate of percent (_%)2 per annum on the Available Commitment payable in accordance with the terms of Section 3.1(a) of the Agreement. From the Commitment Fee Change Date to and including 3, the Commitment Fee shall accrue at the Insert date upon which current pricing ends. Z Insert current Commitment Fee. 3 Insert date which is (_)days following the Commitment Fee Change Date. C-1 508017.1 • '54D.el rate of_percent (_%) per annum payable in accordance with the terms of Section 3.1(a) of the Agreement. Pursuant to Section 2.6 of the Agreement, we have enclosed along with this request the following information: 1. The Available Commitment equals $ , of which, $ , equals the Available Principal Commitment and$ , equals the Available Interest Commitment; 2. The nature of any and all Defaults or Events of Default, if any, occurring under the Agreement,the Trust Agreement and the other Related Documents; and 3. Any other pertinent information previously requested by the Bank. Your executed return of this Request for Extension of Expiration Date, with a copy to the Tender Agent, the Trustee and the County, will constitute a binding agreement in accordance with the terms of the Agreement. Very truly yours, COUNTY OF CONTRA COSTA, CALIFORNIA By: Its: The undersigned agrees that the Expiration Date is hereby extended to , Dated this day of , WESTDEUTSCHE LANDESBANK GIROZENTRALE, acting through its New York Branch By: Title: By: Title: cc: , as Trustee C-2 508017.1 EXHIBIT D ADDRESSES FOR NOTICES AND PAYMENTS County: County of Contra Costa County Administrator's Office 651 Pine Street, 6th Floor Martinez, California 94553 Attention: Director,Capital Facilities and Debt Management Telephone No.: (925) 335-1093 Telecopy No.: (925)646-1228 Bank: Address for Notices: Westdeutsche Landesbank Girozentrale, New York Branch 1211 Avenue of the Americas New York, New York 10036 Attn: Manager, Public Finance Department Tel: (212) 852-6324 Fax: (212) 852-6320 Wire Instructions: Westdeutsche Landesbank Girozentrale, New York Branch 1211 Avenue of the Americas New York, New York 10036 Attn: Loan Administration ABA No.: 021000021 Account No.: 920-1-060663 Account Name: County of Contra Costa, California Re: Public Finance Dept. No. 41200 Tel: (212) 852-6113 Fax: (212) 302-7946 Tender Agent: Attn: Tel: Fax: D-1 508017.1 Remarketing Agent: Bear, Stearns &Co. Inc. Attn: Tel: Fax: D-2 508019.1 f SCHEDULE I Base Rate Level County Rating Margin Commitment Fee I AA or Aa 0% .125% H A 0.5 .175 III BBB or Baa 1.0 .225 IV BB or Ba 1.5 .275 V B 2.0 .325 VI Suspended or 3.0 .525 Withdrawn The "Base Rate Margin" and "Commitment Fee" for any date shall be determined by reference to the County Rating (without regard to qualification by symbols, such as "+" and "—", or by numerical notations, such as "I", "2" and "3") for such date. A full letter downgrade in the County Rating of any Long Term Debt Issue (i.e., a reduction from "AA+", "AA" or "AA-", on the one hand, to "A+", "A" or "A-", on the other hand, would constitute one full letter downgrade) will result in a decrease in the applicable level. If the County Ratings assigned by the Rating Agencies appear in more than one rowi.e., a split rating), Base Rate Margin and Commitment Fee will be based on the row that includes the lowest rating. The Base Rate Margin, the Commitment Fee or both, as the case may be, will be reduced by the amounts described in the foregoing provisions on such date that the Rating Agency in question shall have publicly announced the reinstatement of the County Rating to that level which was applicable thereto prior to such rating downgrade, suspension or withdrawal. Each change in the Base Rate Margin resulting from a change in the County Rating shall become effective on the date of announcement or publication by the respective Rating Agency of a change in such rating or, in the absence of such announcement or publication, on the effective date of such changed rating. S-1 508017.1 TABLE OF CONTENTS )Page ARTICLE I DEFINITIONS................................................................................................. 1 SectionI.I. Definitions..................................................................................................2 Section 1.2. Principles of Construction..........................................................................9 ARTICLE II COMMITMENT TO PURCHASE BONDS ...................................................9 Section 2.1. Commitment to Purchase Bonds................................................................9 Section 2.2. Method of Purchasing; Liquidity Advances; Term Loans.......................10 Section 2.3. Reduction of Commitment; Termination; Substitution............................12 Section 2.4. Sale of Bank Bonds..................................................................................13 Section 2.5. Rights of Bank Bondholders...................................................................15 Section 2.6. Extension of Commitment Period............................................................15 Section 2.7. Interest on Bank Bonds............................................................................15 Section2.8. Bank Records...........................................................................................16 ARTICLE III FEES, COSTS,EXPENSES, PAYMENTS AND INDEMNIFICATION....................................................................................16 Section 3.1. Commitment and Other Fees....................................................................16 Section 3.2. Increased Cost of Maintaining the Commitment and Reduced Return.......................................................................................................16 Section3.3. Net of Taxes,Etc......................................................................................18 Section3.4. Expenses...................................................................................................19 Section 3.5. Interest on Overdue Payments; Maximum Interest Rate .........................20 Section 3.6. Indemnification ........................................................................................20 Section 3.7. Obligations Absolute................................................................................21 Section 3.8. Security for the Bonds..............................................................................21 Section3.9. Payments..................................................................................................21 ARTICLEIV CONDITIONS ...............................................................................................22 Section 4.1. Conditions to Effectiveness of this Agreement........................................22 Section 4.2. Conditions to Each Purchase....................................................................24 ARTICLE V REPRESENTATIONS AND WARRANTIES..............................................25 Section 5.1. Organization and Powers .........................................................................25 Section 5.2. Authorization; Contravention...................................................................25 Section 5.3 Governmental Consent or Approval ........................................................25 -i- 508017.1 . sem•� TABLE OF CONTENTS (continued) Page Section 5.4 Binding Effect..........................................................................................25 Section 5.5 Federal Reserve Regulations....................................................................26 Section5.6 Litigation..................................................................................................26 Section 5.7 No Event of Default under the Resolutions and Tender Agent Agreement................................................................................................26 Section 5.8 Financial Statements ................................................................................26 Section 5.9 Complete and Correct Information ..........................................................26 Section 5.10 Sovereign Immunity.................................................................................26 Section 5.11 Compliance with Rules and Regulations .................................................27 Section 5.12 No ERISA Plans.......................................................................................27 Section 5.13 Tax-Exempt Status of Bonds....................................................................27 Section 5.14 Incorporation of Representations and Warranties by Reference..............27 ARTICLE VI COVENANTS................................................................................................27 Section 6.1. Information...............................................................................................27 Section 6.2. Access to Records ....................................................................................29 Section 6.3. Incorporation of Covenants by Reference................................................29 Section 6.4. No Amendment of Certain Documents....................................................29 Section 6.5. Proceeds of Bonds....................................................................................29 Section 6.6. Taxes and Liabilities................................................................................29 Section 6.7. Supplemental Resolutions and Further Assurances.................................30 Section 6.8. Proceeds of Bank Bonds ..........................................................................30 Section 6.9. Compliance with Rules and Regulations .................................................30 Section 6.10. Maintenance and Operation of the Water System....................................30 Section 6.11. Investments Generally..............................................................................30 Section 6.12. Exempt Status...........................................................................................31 Section 6.13. Tender Agent; Remarketing Agent..........................................................31 Section 6.14. Additional Bonds......................................................................................31 Section 6.15. Sale or Encumbrance of System ..............................................................31 Section 6.16. Selection of Bonds for Redemption.........................................................31 Section 6.17. Conversions;Defeasance.........................................................................32 -ii- 508017.1 S Z� r TABLE OF CONTENTS (continued) Page ARTICLE VII EVENTS OF DEFAULT...............................................................................32 Section 7.1. Events of Default......................................................................................32 Section7.2. Remedies..................................................................................................34 ARTICLE VIII MISCELLANEOUS.......................................................................................34 Section8.1. Notices......................................................................................................35 Section8.2. No Waivers...............................................................................................35 Section 8.3. Amendments and Waivers .......................................................................35 Section 8.4. Successors and Assigns............................................................................35 Section 8.5. Term of this Agreement...........................................................................36 Section 8.6. Choice of Law..........................................................................................36 Section 8.7. Counterparts.............................................................................................36 Section 8.8. Beneficiaries.............................................................................................36 Section 8.9. Headings Descriptive...............................................................................36 Section8.10. Survival ....................................................................................................36 Section8.11. Severability...............................................................................................36 Section 8.12. Interest Limitation....................................................................................37 Section 8.13.. Liability of the Bank ................................................................................37 EXHIBIT A NOTICE OF BANK PURCHASE (OPTIONAL PURCHASE) .............................1 EXHIBIT B NOTICE OF BANK PURCHASE (MANDATORY PURCHASE)........................1 EXHIBIT C FORM OF REQUEST FOR EXTENSION OF EXPIRATION DATE...................I EXHIBIT D ADDRESSES FOR NOTICES AND PAYMENTS................................................1 -iii- 508017.1 An extra Section break has been inserted above this paragraph. Do not delete this Section break if you plan to add text after the Table of Contents/Authorities. Deleting this break will cause Table of Contents/Authorities headers and footers to appear on any pages following the Table of Contents/Authorities. 508819.1 INVITATION TO TENDER BONDS CASH TENDER OFFER BY THE COUNTY OF CONTRA COSTA, CALIFORNIA The County invites its'Bondowners to offer to sell to the County for cash TAXABLE PENSION OBLIGATION BONDS, 1994 SERIES A Expiration Date: Friday, ' 2001, 5:00 p.m. Eastern Standard Time Unless Terminated or Extended The County of Contra Costa, California currently contemplates issuing up to $ aggregate principal amount'of bonds (the "2001 Bonds") for the purpose of purchasing a portion of the following Bonds: Principal Secondary Maturity Amount Interest CUSIP Market Insured U.S. Treasury June 1 Outstanding Rate 212257 CUSIP 212257 Reference Security 2001 $13,350,000 6.20% AH2 AV 1 2002 16,060,000 6.30 AJ8 AQ2 and AT6 2003 19,045,000 6.40 AK5 AX7 2004 221340,000 6.50 AL3 -- 2005 25,975,000 6.55 AM] ARO 2006 29,970,000 6.65 AN9 -- 2007 34,375,000 6.70 AP4 AS8 2011 141,160,000 6.85 AA7 AU3 To make an informed decision as to whether, and how, to tender Bonds, a Bondowner should read this Invitation To Tender Bonds (the "Invitation") carefully and consult his or her account executive or other financial advisor. The Dealer Manager for the Invitation is Bear, Stearns & Co.Inc. Institutional investors with questions about the Invitation should contact Bear, Stearns & Co. Inc. Individual investors and their brokers and account executives with questions about the Invitation should contact the Information Agent. The Information Agent for the Invitation is: Bondholder Coin munications Group Attention: Nancy Norris Call Toll Free: (888)385-BOND or: (888)385-2663 E-mail: contact@bondcom.com 2001 10021499/598745.2 1 TABLE OF CONTENTS Paye 1. Introduction.................................................................. .... 1 2. Purpose of the Tender Offer............................................................................................ 1 3. Expiration Date................................................................................................................2 4. Notices to Bondowners....................................................................................................2 5. How to Tender Bonds...................................................................................................... 3 6. Determination of Purchase Prices.................................................................................... 5 7. Priority of Purchase......................................................................................................... 5 8. Bonds Not Purchased ...................................................................................................... 6 9. Provisions Applicable to All Tenders................................... 10. Authorized Denominations.............................................................................................. 7 11. Transmission of Tenders by Financial Institutions; DTC ATOP Account ..................... 7 12. Determinations as to Form and Validity of Tenders; Right of Waiver and Rejection.......................................................................................................................... 7 13. Amendments and Withdrawals of Tenders ..................................................................... 8 14. Irrevocability of Tenders; Return of Bonds Not Purchased............................................ 8 15. Determination of Amount to be Purchased..................................................................... 8 16. Acceptance of Tenders;Notice of Results ......................................................................9 17. Settlement Date; Purchase of Bonds ...............................................................................9 18. Purchase Funds.............................................................................................................. 10 19. Certain Conditions to Purchase ..................................................................................... 10 20. Extension, Termination and Amendment of Invitation; Changes to Terms.................. 11 21. Certain Income Tax Consequences............................................................................... 11 22. Solicitation Fees; Eligible Institutions are not Agents of the County........................... 11 23. Reimbursement of Financial Institution Expenses........................................................ 12 24. Dealer Manager's Fees and Expenses........................................................................... 12 25. Additional Information About the County.................................................................... 12 26. Miscellaneous.................................................................:.............................................. 12 10021499/598745.2 i -Z) CASH TENDER OFFER by the COUNTY OF CONTRA COSTA, CALIFORNIA 1. Introduction This Invitation To Tender Bonds (the "Invitation") is made by the County of Contra Costa, California (the "County") to the beneficial owners (the "Bondowners") of the County's bonds listed on the cover page hereof (the "Bonds."). The Invitation is contained in this document (including the cover page). Each Bondowner is invited by the County to offer to sell to the County for cash all or any part (in authorized denominations) of his or her beneficial ownership interests in the Bonds of a particular CUSIP number. An offer to sell may be made on a "competitive basis" by specifying a yield spread, or it may be made on a "non-competitive basis" by offering to sell Bonds of a particular CUSIP number without specifying a yield spread. The yield spread offered must be expressed in basis points over the yield-to-maturity of the applicable U.S. Treasury Reference Security set forth on the cover page of the Invitation. For Bonds purchased pursuant to the Invitation, the County will pay a Purchase Price (as defined herein) that results in a yield-to-maturity for such Bonds equal to the sum of (i) the appropriate U.S. Treasury Reference Yield (as defined herein) and (ii) the applicable yield spread established by the County (the "Acceptance Yield Spread".). See Sections 5 and 9 below. All Bonds that are purchased by the County pursuant to the Invitation will be cancelled. The County will utilize a "Modified Dutch Auction" procedure to determine an Acceptance Yield Spread for Bonds of a particular CUSIP number and will pay to all Bondowners of such CUSIP number a Purchase Price based upon the highest yield spread offered and accepted by the County with respect to Bonds of that CUSIP number. Bonds accepted for purchase will, subject to the conditions of the Invitation, be purchased for cash on the "Settlement Date", which is currently expected to be , , 2001. Bondowners whose offers are accepted will receive interest accrued but unpaid through the day immediately preceding the Settlement Date. See Section 17 below. The County is not obligated to accept any offers. In the event that the County accepts offers pursuant to the Invitation, it may, in its sole discretion, (i) reject offers made with respect to certain of the Bonds and (ii) accept offers made with respect to one or more of the Bonds but only at or above the applicable Acceptance Yield Spread. The Dealer Manager. for the Invitation is Bear, Stearns & Co. Inc. Institutional investors with questions about the Invitation should contact the Dealer Manager. Individual investors and their brokers and account executives with questions about the Invitation should contact Bondholder Communications Group (the "Information Agent"). 2.. Purpose of the Tender Offer The County believes that refunding certain of the Bonds with proceeds of the variable rate Taxable Pension Obligation Bonds, Refunding Series 2001 (the "2001 Bonds") will reduce debt service costs prior to the final maturity of the outstanding Bonds and will allow the County 10021499/598745.2 to levelize the amortization schedule of the currently outstanding Bonds. This will enable the County to achieve more. cost effective debt management. The County has several options available for a refunding. These include an advance refunding, a purchase of Bonds through - - - --the-Invitation-,-or-a combination-thereof. To fiend the advance refunding and/or-purchase, the County has authorized the issuance of the 2001 Bonds in an amount not to exceed $125,000,000. The County has authorized certain officials to determine the appropriate purchase price and principal to be purchased (if any) pursuant to the Invitation. If sufficient to meet the County's restructuring objective, Bonds are not tendered and accepted for purchase pursuant to the Invitation, the County has authorized certain County officials to use, if appropriate, a portion of the proceeds of the 2001 Bonds to advance refund certain outstanding Bonds. An advance refunding could be accomplished through the establishment of a defeasance escrow composed of a portfolio of highly-rated securities, a highly-rated investment contract or a combination thereof. No assurance can be given that the County will decide to proceed with the purchase and/or the advance refunding of Bonds or that Bonds in an amount equal to the amount of 2001 Bonds authorized to be issued will in fact be issued. 3. Expiration Date. The ability to tender Bonds will expire at 5:00 p.m., Eastern Standard Time, on Friday, , 2001 (unless terminated earlier) or on such later date or dates as the County may determine (the "Expiration Date"). See Section 20 below. Offers to sell Bonds received at the County's ATOP Account (described in Section 11 below) after the Expiration Date will not be considered. 4. Notices to Bondowners The County may give information about the Invitation to the market and Bondowners by delivery of the information to the following institutions: Bloomberg Financial Markets System, the Munifacts Wire System and The Depository Trust Company of New York ("DTC"). These institutions are called the "Information Services." Delivery by the County of inrormation to the Information Services will be deemed to constitute delivery of this information to each Bondowner. The County, the Dealer Manager and the Information Agent have no obligation to assure that a Bondowner actually receives any information given to the Information Services. A Bondowner who would like to receive information furnished by the County to the Information Services must make appropriate arrangements with his or her account executive. If the County extends the Invitation, or amends the terms of the Invitation (including a waiver of any term) in any material respect, the County may (but is not required to) disseminate additional Invitation material and extend the Invitation to allow, in the County's judgment, time for dissemination to Bondowners and for Bondowners to respond. 10021499/598745.2 2 Ste.y 5. How to Tender Bonds a. All Tenders Through Financial Institutions All of the Bonds are held in book-entry-only form through the facilities of DTC. As a result, Bondowners who are not DTC participants can only make offers to sell Bonds through instructions to the financial institutions which maintain the accounts in which their Bonds are held. A Bondowner may use the BLUE colored Bondowner's Instructions to give this instruction. The County, the Dealer Manager and the Information Agent are not responsible for making or transmitting any offer to sell Bonds. b. Competitive Tenders (tenders specifying an Offer Yield Spread) Offer. A Bondowner may make an offer to sell Bonds of a particular CUSIP number in a par amount of his or her choosing (in authorized denominations) by specifying a yield spread (an "Offer Yield Spread") at which the offer to sell Bonds of a particular CUSIP number is being made. Each Offer Yield Spread must be expressed in basis points over the yield-to- maturity of the U.S. Treasury Reference Security (.see the cover page of*the Invitation) as determined on the Pricing Date (as defined herein). Acceptance Yield Spread. The County will establish an Acceptance Yield Spread for Bonds of a particular.CUSIP number that are accepted for purchase. All offers of Bonds of a particular CUSIP number, if any, at or above the Acceptance Yield Spread will be accepted for purchase, subject to the terms of the Invitation, including the County's right to limit the amount of Bonds of a particular CUSIP number to be purchased. The County expects to announce the Acceptance Yield Spread by written notice, which shall constitute an Acceptance Notice (as defined herein), delivered to the Information Services not later than 1:00 p.m., Eastern Standard Time, on the business day after the Expiration Date. If permitted by the County, offers of Bonds of a particular CUSIP number at yield spreads below the applicable Acceptance Yield Spread may, under the circumstances and within the time period described below, be amended pursuant to the "Second Look"process described below in Section 5.b. All tenders that are accepted and paid will receive the Purchase Price (as defined in Section 6 below) established for that particular CUSIP number. See Section 6 below. ".Second Look"; Amendment to Tenders. The County may, but is not required to, permit Bondowners, whose Offer Price Spreads were below the applicable Acceptance Yield Spreads the opportunity to amend their tenders to specify a tender at the applicable Acceptance Yield Spread. If the County determines, in its sole discretion, to permit such amendments, the Information Services will be notified by 1:00 p.m., Eastern Standard Time, on the business day after the Expiration Date. In such case, Bondowners whose tenders were not accepted may amend their tenders to specify the applicable Acceptance Yield Spread by having their bank or broker so amend and transmit their tenders (and have such amended tenders received) prior to 5:00 p.m., Eastern Standard Time, on the second business day after the Expiration Date. The County may accept for purchase at the applicable Acceptance Yield Spread all or any portion of the Bonds of a particular CUSIP number tendered by such amended tenders, and if less than all such Bonds are accepted for purchase, those accepted for purchase will be accepted from 10021499/598745.2 3 highest to lowest original Offer Yield Spread for such Bonds and by time of tender for any identical original Offer Yield Spreads (and thereafter, in the County's sole discretion). ANY BONDOWNER WHO MAY BE UNABLE TO RECEIVE AND TRANSMIT SUCH — - ---NOTICES-ON-A TIMELY BASIS OR TO ACTON ANY SUCH AMENDMENT IS URGED TO MAKE ARRANGEMENTS FOR ANOTHER PERSON TO BE ABLE TO ACT ON HIS OR HER BEHALF. c. Non-Competitive Tenders (tenders not specifying an Offer Yield Spread) Offer. If a Bondowner wishes to do so, such Bondowner may indicate the par amount of Bonds of a particular CUSIP number offered without specifying an Offer Yield Spread. Acceptance. Offers of Bonds of a particular CUSIP number made without specifying an Offer Yield Spread will be accepted by the County if any offer of Bonds of such CUSIP number is accepted, subject to the acceptance of Bonds based on time of offer (and in the County's sole discretion for identical time offers). Bondowners who have offered Bonds of a particular CUSIP number without specifying an Offer Yield Spread will receive'the Purchase Price paid to all Bondowners of such CUSIP number whose offers are accepted. If all offers of Bonds of a particular CUSIP number do not specify an Offer Yield Spread, no offers of such Bonds will be accepted except as provided below under the subsection entitled "Establishment ofAcceptance Yield Spread; Deemed Acceptance gf'Acceptance Yield Spread. " If competitive tenders of Bonds of a particular CUSIP number are made and not withdrawn prior to the Expiration Date at an Offer Yield Spread acceptable to the County, then Bondowners who make non-competitive tenders of such CUSIP number shall have no right to withdraw their tenders after the Expiration Date. Acceptance Yield Spread. The County will establish an Acceptance Yield Spread for Bonds of a particular CUSIP number that are accepted for purchase. The County expects to announce the Acceptance Yield Spread by notice, which shall constitute an "Acceptance Notice," delivered to the Information Services not later than 1:00 p.m., Eastern Standard Time, on the business day after the Expiration Date. Establishment of Acceptance Yield Spread; Deemed Acceptance of Acceptance Yield Spread- If no offers of Bonds of a particular CUSIP number are accepted by the County because no offering Bondowner specified an Offer Yield Spread for such Bonds, the County may, but is not required to, set an Acceptance Yield Spread. If the County determines, in.its sole discretion, to set an Acceptance Yield Spread, it will notify the Information Services thereof, which shall constitute an Acceptance Notice, not later than 1:00 p.m., Eastern Standard Time, on the business day after the Expiration Date. In this situation, Bondowners whose offers are accepted at the Acceptance Yield Spread set by the County shall be deemed to have accepted the applicable Acceptance Yield Spread unless they direct their broker or custodian bank or other nominee to withdraw their original offer and such instructions are received by the County's ATOP Account prior to 5:00 p.m., Eastern Standard Time, on the second business day after the.Expiration Date. 10021499/ 98745.2 4 The County may accept for purchase at the applicable Acceptance Yield Spread all or any portion of Bonds of a particular CUSIP number deemed accepted, and if less than all such Bonds are accepted for purchase, those accepted for purchase will be accepted based on time of - --- -offer for such-Bonds (and in the County's sole discretion for identical time offers) in authorized denominations. ANY BONDOWNER WHO MAY BE UNABLE TO RECEIVE AND TRANSMIT SUCH NOTICES ON A TIMELY BASIS OR TO ACT ON ANY SUCH WITHDRAWAL IS URGED TO MAKE ARRANGEMENTS FOR ANOTHER PERSON TO BE ABLE TO ACT ON HIS OR HER BEHALF. All tenders that are accepted and paid will receive the Purchase Price (as defined in Section 6 below) established for that particular CUSIP number. See Section 6 below. 6. Determination of Purchase Prices The "Purchase Price" for the Bonds being purchased pursuant to the Invitation will be expressed in dollars per $100 principal amount of Bonds (e.g., $98.375) and calculated by the Pricing Time (as defined in the next paragraph) in a manner consistent with standard securities pricing methods for municipal securities and which results in a yield to the maturity date of such Bonds equal to the "Tender Offer Yield" for such Bonds, which is the sum of(a) the yield, in the case of Bonds whose U.S. Treasury Reference Security is a U.S. Treasury Note, to maturity (calculated in accordance with standard market practice) corresponding to the bid-side price (the "U.S. Treasury Reference Yield" for such Bonds), and (b) the Acceptance Yield Spread for such Bonds. The calculation of the Purchase Price will also utilize, as appropriate, the Settlement Date and the accrued interest on the Bonds to be purchased through the day immediately preceding the date upon which the Bonds are to be purchased by the County. The Dealer Manager will calculate the Tender Offer Yields, Purchase Prices and accrued interest, and such calculations will be final and binding, absent manifest error. The County will publicly announce the Purchase Price for the Bonds of a particular CUSIP number not later than 5:00 p.m., Eastern Standard Time, on the third business day after the Expiration Date by written notice to the Information Services. The "Pricing Time" for Bonds of a particular CUSIP number is the time as of which the yield on the applicable U.S. Treasury Reference Security will be determined for purposes of calculating the Purchase Price for such Bonds and will be not later than 1:00 p.m., Eastern Standard Time, on the third business day after the Expiration Date. The Purchase Price for a particular CUSIP number may differ from the Purchase Price for any other CUSIP number. In addition, the Purchase Price for Bonds of a particular CUSIP number may be significantly less than the par amount of the Bonds of such CUSIP number. 7. Priority of Purchase Subject to the second paragraph of this Section 7, offers to sell Bonds of a particular CUSIP number pursuant to the Invitation that are accepted by the County, if any are accepted, will be accepted in the following order of priority: 10021499/598745.2 5 • The first to be purchased will be Bonds initially tendered without an Offer Yield Spread (i.e., non-competitive tenders). - - - • The second to be purchased will be Bonds initially tendered at an original Offer Yield Spread for such Bonds that is at or above the Acceptance Yield Spread for such Bonds and, thereafter, in order of descending Offer Yield Spread (and in case of the same original Offer Yield Spread, by the date and time such tender was received and, thereafter, in the sole discretion of the County). • The third to be purchased will be "Second Look" retendered Bonds (if a Second Look is offered), and if less than all such Bonds are accepted for purchase, then from highest to lowest Offer Yield Spreads at which those Bonds were initially tendered and by time of tender for any identical original Offer Yield Spreads (and thereafter, in the County's sole discretion). The priority of purchase.described in the prior paragraph will not apply to Bonds of a particular CUSIP number-for which the County may have set an Acceptance Yield Spread in the manner described in Section 5.c above (under the subsection entitled "Establishment of Acceptance Yield Spread; Deemed Acceptance of Acceptance Yield Spread"). If the par amount of the Bonds of such CUSIP number not properly withdrawn exceeds the par amount of such CUSIP number the County has decided to purchase, then such Bonds will be purchased on the basis of the time of tender (earliest to latest), with tenders received at the same time being accepted or rejected by the County as determined by the County in its sole discretion. 8. Bonds Not Purchased Bonds that the County does not purchase pursuant to the Invitation will remain outstanding. The County makes no representation as to whether it will or will not in the future again invite offers to sell Bonds to the County. The Bondowners whose Bonds are not purchased pursuant to the Invitation will continue to bear the risk of ownership of such Bonds. Purchase of Bonds by the County pursuant to the Invitation (and pursuant to any advance refunding) will reduce the amount of Bonds of the applicable CUSIP numbers available to trade publicly, which could affect the liquidity and market value of the Bonds of those CUSIP numbers that are not purchased (or advance refunded) and that remain outstanding. In addition, if less than all of the Bonds for which sinking fluid redemptions have been established are purchased by the County pursuant to the Invitation (or advance refunded), the average life of such Bonds that remain outstanding may change. 9. Provisions Applicable to All Tenders A Bondowner should ask his or her account executive at the financial institution that maintains the account in which his or her Bonds are held or another professional financial advisor for help in determining whether to tender Bonds, the par amount of Bonds of any CUSIP number to be tendered and whether they should be tendered at one or more Offer Yield 10021499/598745.2 6 Spreads and, if so, what the Offer Yield Spread(s) should be, or whether they should be tendered without specifying an Offer Yield Spread. A Bondowner also should inquire as to whether his or her financial institution will charge a fee for submitting tenders if the County - - - - purchases his or her tendered Bonds. The County, the Dealer Manager and the Information Agent will not charge any Bondowner to make a tender or to have his or her tender accepted. A Bondowner may only offer to sell Bonds he or she owns. "All or none" tenders for any CUSIP number or for all tenders from a Bondowner are not permitted. 10. Authorized Denominations An offer to sell Bonds (with or without an Offer Yield Spread) of any CUSIP number must specify the par amount of such CUSIP number tendered. A tender must be in the par amount of $5,000 or any integral multiple thereof. A tender which does not meet this requirement will be reduced to the largest integral multiple of$5,000 of the amount tendered. 11. Transmission of Tenders by Financial Institutions; DTC ATOP Account The County, through the Information Agent, will establish an Automated Tender Offer Program account at DTC ( the "County's ATOP Account") for purposes of the Invitation. Offers to sell Bonds may only be made to the County through the County's ATOP Account. Any financial institution that is a participant in DTC may make a book-entry tender of the Bonds by causing DTC to transfer such Bonds into the County's ATOP Account in accordance with DTC's procedures. Concurrently with the delivery of Bonds through book-entry transfer into the County's ATOP Account, an agent's message in connection with such book-entry transfer must be transmitted to and received at the County's ATOP Account by not later than 5:00 p.m., Eastern Standard Time, on the Expiration Date. The name and the account number of the beneficial owner of the Bonds being tendered must be included in the agent's message with respect to all tenders of$500,000 or more. 12. Determinations as to Form and Validity of Tenders; Right of Waiver and Rejection All questions as to the validity (including the time of receipt at the County's ATOP Account), form, eligibility, acceptance and purchase of any tender will be determined by the County in its sole discretion and will be final, conclusive.and binding. The County reserves the right to waive any irregularities or defects in any tender. Neither the County, the Dealer Manager nor the Information Agent is obligated to give notice of any defects or irregularities in tenders, and they shall have no liability for failing to give such notice. The County reserves the absolute right to reject any and all tenders, whether or not they comply with the terms of the Invitation. 10021499/598745.2 7 s-D y 13. Amendments and Withdrawals of Tenders A Bondowner may amend his or her tender in any respect it chooses by causing an - amended tender to be received at the County's ATOP Account by-not later than 5:00 p.m., Eastern Standard Time, on the Expiration Date. A tender of Bonds may be withdrawn by a Bondowner by causing a withdrawal notice to be received at the County's ATOP Account by not later than 5:00 p.m., Eastern Standard Time, on the Expiration Date. In addition, if the County establishes an Acceptance Yield Spread where no competitive tenders of Bonds of a CUSIP number were made at a yield spread acceptable to the County, Bondowners who made non-competitive tenders of Bonds of such CUSIP number may withdraw their tenders as provided in Section 5.c above under the subsection entitled "Establishment of Acceptance Yield Spread; Deemed Acceptance of Acceptance Yield Spread" (and if not withdrawn, may be accepted by the County as provided in such Section 5.c). An amended tender or a notice of withdrawal must be submitted in substantially the same manner as the original tender. An amended or withdrawn tender must specify the name and account number of the Bondowner (i.e., the beneficial owner of the tendered Bonds) whose tender is being amended or withdrawn, the CUSIP number(s), the principal amount previously tendered and the DTC Voluntary Offer Instruction number for the tendered Bonds for which the tender is being amended or withdrawn. All questions as to the validity (including the time of receipt) of an amendment or withdrawal will be determined.by the County in its sole discretion and will be final, conclusive and binding. 14. Irrevocability of Tenders; Return of Bonds Not Purchased Except as set forth above in Section 13 and Section 5.c under the subsection entitled "Establishment of Acceptance Yield Spread; Deemed Acceptance of Acceptance Yield Spread," all tenders to sell Bonds will become irrevocable after 5:00 p.m., Eastern Standard Time, on the Expiration Date. The County will instruct DTC to return to the tendering institutions those Bonds that were tendered but were not accepted for purchase. The County, the Dealer Manager and the Information Agent are not responsible or liable for the return of Bonds to these tendering institutions or to their beneficial owners. 15. Determination of Amount to be Purchased The County does not have to purchase any Bonds tendered. After the Expiration Date, the County will determine, in its sole discretion, the amount (if any) of the Bonds of a particular CUSIP number that it will purchase. The County has authorized the issuance of up to $125,000,000 aggregate principal amount of 2001 Bonds for the purpose of purchasing Bonds and/or advance refunding Bonds. See Section 2 above. The purchase by the County of any Bond accepted for purchase is 10021499/598745.2 8 s�a conditioned upon, among other things, the receipt by the County of the proceeds of the 2001 Bonds available for such purpose. Notwithstanding anything to the contrary in the Invitation, the County may decide to purchase none, some or all of the Bonds of a particular CUSIP _ number. 16. Acceptance of Tenders; Notice of Results Acceptance by the County of tenders to sell Bonds shall constitute an irrevocable agreement between the tendering Bondowner and the. County to sell and purchase these Bonds, subject, however, to the conditions and terms of the Invitation, including the conditions to purchase set forth in Section 19 below. The acceptance of Bonds initially tendered will be made by written notification to the Information Services by 1:00 p.m., Eastern Standard Time, on the business day after the Expiration Date. This Acceptance Notice will state (i) the principal amount of the Bonds of each CUSIP number that the County has decided to accept for purchase as of such date and the Acceptance Yield Spread for the Bonds of each such CUSIP number, or (ii) that the County has decided not to purchase any Bonds. Acceptance of"Second Look" amended tenders described in Section 5.b above will be given by written notice to the Information Services not later than 1:00 p.m., Eastern Standard Time, on the third business day after the Expiration Date. This notice will state the principal amount of Bonds of each CUSIP member that the County has decided to purchase (if any) pursuant to the "Second Look." 17. Settlement Date; Purchase of Bonds The Settlement Date is the day on which Bonds accepted for purchase are to be purchased (subject to the terms of the Invitation, including but not limited to Section 20 hereof) at the applicable Purchase Prices and the accrued interest on purchased Bonds is to be paid. The Settlement Date has initially been set to occur on , 2001. The County may change the Settlement Date by giving notice to the Information Services. However, the Settlement Date may not be later than March _, 2001. If the County does not complete the purchase of the Bonds by such March , 2001, the right and obligation of the County to purchase any Bonds will automatically terminate, without any liability or other obligation to any Bondowner or other person or entity. Payment by the County will be made in immediately available funds by deposit with DTC of the aggregate Purchase Prices and accrued interest on the Bonds of each CUSIP number accepted for purchase. It is expected that, in accordance with DTC's standard procedures, DTC will transmit the aggregate Purchase Prices (plus accrued interest through the date immediately preceding the Settlement Date) in immediately available funds to its participant financial institutions holding the Bonds accepted for purchase on behalf of Bondowners for delivery to the Bondowners. The County, the Dealer Manager and the Information Agent have no responsibility or liability for the ultimate distribution of the Purchase Prices plus accrued interest from DTC to its participants or from the participants to the tendering Bondowners. 10021499/598745.2 9 18. Purchase Funds The funds to purchase Bonds .will be provided by the County from proceeds of the - - County's 2001 Bonds. The 2001 Bonds are-expected to be issued ori or-before the Settlement Date. The County's purchase of any Bonds is contingent upon the issuance of the 2001 Bonds and as otherwise provided in the Invitation. If the County does not issue the 2001 Bonds or does not have the proceeds thereof available to purchase Bonds on the Settlement Date, the County will not be required to purchase any Bonds that it has agreed to purchase and will have no liability or other obligation to any Bondowner or other person or entity. 19. Certain Conditions to Purchase Notwithstanding anything to the contrary in the Invitation, the County will .not be required to purchase any Bonds it has agreed to purchase, and will incur no liability or other obligation as a result, if, before the scheduled time of payment for such Bonds any of the following occurs: (a) Litigation or another proceeding is pending or threatened which the County believes may, directly or indirectly, have an adverse impact on the Invitation or the expected benefits of the Invitation to the County. (b) A war, national emergency, banking moratorium, suspension of payments by banks, a general suspension of trading by the New York Stock Exchange or a limitation of prices on the New York Stock Exchange exists and the County believes this fact makes it inadvisable to proceed with the purchase of Bonds. (c) A material change in the business or affairs of the County has occurred which the County believes makes it inadvisable to proceed with the purchase of Bonds. (d) Proceeds of the 2001 Bonds are not available to pay all Purchase Prices (plus accrued interest) on the Settlement Date. (e) There shall have been proposed or enacted or deemed applicable any statute, order, rule or regulation, or any action shall have been taken by any governmental authority that, in the opinion of the County, would or might prohibit, restrict or delay completion of, or materially affect the contemplated benefits to the County of, the Invitation. These conditions are for the sole benefit of the County. They may be asserted by the County regardless of the circumstances giving rise to any of these conditions or may be waived by the County in whole or in part at any time and from time to time in its discretion. The failure by the County at any time to exercise any of these rights will not be deemed a waiver of any of these rights, and the waiver of these rights with respect to particular facts and other circumstances will not be deemed a waiver of these rights with respect to any other facts and circumstances. Each of these rights will be deemed an ongoing right of the County which may be asserted at any time and from time to time. Any determination by the County concerning the events described in this Section will be final and binding upon all Bondowners and other persons and entities. If, prior to the time of payment for any-Bonds any of the events described happens, the County will have 10021499/598745.2 10 the absolute right to cancel the purchase of Bonds without any liability or other obligation to any Bondowner or other person or entity. -- - 20.-Extension, Termination and Amendment of Invitation; Changes.to Terms The County has the right to extend the Invitation to a time up to but not past 5:00 p.m., Eastern Standard Time, on the third business day following the initial Expiration Date, or any extension thereof, as to any or.all of the Bonds. Notice of an extension of the Expiration Date will be given to the Information Services by 1:00 p.m., Eastern Standard Time, of the first business day following the then current Expiration Date and will be effective when the notice is given. The County also has the right to terminate the Invitation at any time by giving notice-to the Information Services of the termination. The termination will be effective at the time specified in such notice or if no time is specified, then the termination will be effective at the time the notice is given to the Information Services. The County also has the right to amend or waive the terms of the Invitation in any respect and at any time by giving notice to the Information Services of the amendment or waiver. The amendment or waiver will be effective at the time specified in the notice or if no time is specified, then the amendment or waiver will be effective at the time the notice:is given to the Information Services. No extension, termination or amendment of the Invitation (or waiver of any term of the Invitation) will change the County's right to decline to purchase any or all Bonds without liability or other obligation. 21. Certain Income Tax Consequences The sale of Bonds may have different tax consequences for particular Bondowners. Bondowners are urged to consult their own tax advisors to determine the particular federal, state or local tax consequences of sales made pursuant to the Invitation, including the amount of any gain or loss resulting from the sale of Bonds and the effect of possible changes in the tax laws. 22. Solicitation Fees; Eligible Institutions are not Agents of the County The County will pay to any commercial bank or trust company having an office, branch or agency in the United States, and any firm that is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc. (each an "Eligible Institution"), a solicitation fee of $2.50 per $1,000 of up to the first $250,000 par amount of Bonds of each of its retail customers that are purchased pursuant to the Invitation. A retail customer is an individual who manages his or her own investments or an individual whose investments are managed by an investment manager or a bank trust department that holds the investments of that individual in a separate account in the name of that individual. Eligible Institutions must submit to the Information Agent requests for payment of solicitation fees on a Solicitation Fee Payment Request Form no later than 5:00 p.m., Eastern Standard Time, on the tenth business day following the Expiration Date. No solicitation fee will be paid on requests received after that time. 10021499/598745.2 11 sv. � No Eligible Institution is the agent, nor will it be deemed to be the agent, of the County for the Invitation. - -23.-Reimbursement of Financial Institution Expenses The County (not the retail customers) will reimburse financial institutions for their reasonable out-of-pocket expenses incurred in forwarding the Invitation and related documents to the Bondowners whose Bonds they hold (and to the Bondowners' account executives), and in handling and forwarding tenders to purchase these Bonds. This reimbursement will be at the amounts established by the New York Stock Exchange. Requests for reimbursement of out- of-pocket expenses must be made to the Information Agent no later than 2:00 p.m., Eastern Standard Time, on the tenth business day following the Expiration Date. No reimbursement will be made on requests received after that time. 24. Dealer Manager's Fees and Expenses The County will pay the Dealer Manager a fee pursuant to the Invitation in accordance with the Dealer Manager Agreement between the County and the Dealer Manager. In addition, the County will pay the Dealer Manager its reasonable out-of-pocket costs and expenses relating to the Invitation in accordance with such Agreement. 25. Additional Information About the County In connection with the proposed issuance of the County's 2001 Bonds, the County is preparing a Preliminary Official Statement (the "Preliminary Official Statement") containing information about the 2001 Bonds, the County, its facilities and the results of its operations. The Preliminary Official Statement is expected to be available to the public approximately two weeks after the date of the Invitation. A copy of the Preliminary Official Statement (once publicly available) and the County's most recent Comprehensive Annual Financial Report can be obtained from the County's Financial Advisor, C.M. de Crinis & Co., Inc. (attention Ms. Jean Buckley), 3000 Bridgeway, Suite 206, Sausalito, California 94965 (telephone (415) 339-8944)). 26. Miscellaneous The Invitation is not being made to, and tenders will not be accepted from or on behalf of, Bondowners in any jurisdiction in which the Invitation or the acceptance thereof would not be in compliance with the laws of such jurisdiction. In those jurisdictions whose laws require the Invitation to be made through a licensed or registered broker or dealer, the Invitation is being made on behalf of the County by the Dealer Manager. No one has been authorized by the County, the Dealer Manager or the Information Agent to recommend to any Bondowner whether to tender Bonds pursuant to the Invitation, at what Offer Yield Spread any tender should be made, or whether a tender should be made without specifying an Offer Yield Spread. No one has been authorized to give any information or to make any representations in connection with the. Invitation other than those contained in the Invitation. Any such recommendation, information or 10021499/598745.2 12 Sa. representations given or made cannot be relied upon as having been authorized by the County, the Dealer Manager or the Information Agent. - The County, the Dealer Manager and the Information Agent do not recommend to any Bondowner whether to tender Bonds, at what Offer Yield Spread or Offer Yield Spreads a tender should be made, or whether a tender should be made without specifying an Offer Yield Spread. Each Bondowner must make these decisions and should read the Invitation carefully and the information referred to herein and consult with his or her account executive or other financial advisor in making these decisions. COUNTY OF CONTRA COSTA, CALIFORNIA By: County Administrator and Clerk of the Board of Supervisors 10021499/598745.2 13 S� 2001 Dear Bondowner: Thank you for your investment in the County of Contra Costa, California, Taxable Pension Obligation Bonds, 1994 Series A (the "Bonds"). The Bonds are rated "AA-" by Standard & Poor's Ratings Services and "Aa3" by Moody's Investors Service. We are requesting that you sell the Bonds to us. Your Bonds are to be purchased from proceeds of new variable rate refunding bonds to be issued by the County. The deadline for responding to the Invitation is Friday, 2001, subject to extension or earlier termination. You may choose either a competitive tender or a non-competitive tender. Competitive tender. This method of tendering requires you to specify an exact yield spread over a benchmark U.S. Treasury Security for your Bonds. This is usually the preference of large financial institutions and broker-dealers. Non-competitive tender. With this method, you tender your Bonds without specifying a yield spread. A price will be established as provided in the Invitation. If we accept your tender, you will receive the same purchase price as everyone else who tendered the same Bonds and whose tenders we accepted. A non-competitive tender will be given a higher priority than a competitive tender. You may-also increase the chances of having your tender accepted by tendering early. We have appointed Bear, Stearns & Co. Inc. as the Dealer Manager for the Invitation. The terms and conditions of our proposal to purchase Bonds are described in the Invitation, which you should read carefully. You should also consult with your account executive or other financial advisor in deciding if, and how, you should respond to the Invitation. Questions regarding the procedures for submitting a tender may also be directed to the Information Agent, Bondholder Communications Group,'toll free, at 1 (888) 385-BOND or 1 (888) 385-2663, Attention: Nancy Norris. Thank you for taking the time to consider the Invitation. We appreciate your interest in our Bonds. COUNTY OF CONTRA COSTA, CALIFORNIA 10021499/598672.2 s- ANSWERS TO FREQUENTLY ASKED QUESTIONS 1. WHY DO YOU WANT TO PURCHASE MY BONDS? We, the County of Contra Costa, California (the "County"), believe that by purchasing your bonds and issuing new variable rate refunding bonds we may reduce our debt service costs prior to the final maturity of the existing bonds as well as levelize the amortization schedule of our pension bond obligations. This will enable the County to achieve more cost effective debt management. 2. WHO WILL SET THE PURCHASE PRICE? If your bonds are accepted for purchase, you will be paid the "Purchase Price," which is the same price the County will pay to all bondowners of a particular CUSIP number whose offers are accepted. We will set the "Acceptance Yield Spread" and in turn the Purchase Price for bonds of each CUSIP number through a "Modified Dutch Auction" process. 3. WHAT IS A "MODIFIED DUTCH AUCTION"? Under this process, if the County decides to buy bonds, the County will first consider the amount of yield spread proposed by bondowners of a particular CUSIP number, going from the highest spread to the lowest spread for each bond of such CUSIP number. Because bond prices go up as yields go down, a lower yield spread will result in a higher Purchase Price. If no yield spread is proposed by the bondowners of a particular CUSIP number for which bonds have been tendered, the County may establish the yield spread, subject to prompt withdrawal by such bondowners. The County will determine the amount of yield spread for the bonds of each CUSIP number that the County wants to purchase, and the County will purchase, subject to the terms of the Invitation, all or a portion of the bonds offered at or above the applicable yield spread. The yield spreads the County determines to accept are called the "Acceptance Yield Spreads." The Purchase Price for each bond will be based on the applicable Acceptance Yield Spread plus the yield-to-maturity of the applicable U.S. Treasury Security (see Question 4). 4. WHICH U.S. TREASURY SECURITY WILL BE USED IN CALCULATING MY BOND'S PURCHASE PRICE? The table on the cover page of the Invitation lists the specific U.S. Treasury Securities that will be used in calculating the Purchase Price of each bond of a particular CUSIP number that is accepted for purchase. By the Pricing Time, which is expected to be not later than 1:00 p.m., Eastern Standard Time, on , 2001, the County will establish the yield-to-maturity of the applicable U.S. Treasury Security for purposes of calculating the applicable Purchase Price. In addition to the Purchase Price, accrued interest will be paid through the day immediately preceding the date of purchase. 5. CAN YOU GIVE ME AN EXAMPLE OF HOW A PURCHASE PRICE WILL BE CALCULATED? Yes. Assume the County is proposing to purchase a bond of a particular CUSIP number and wants to calculate the Purchase Price of the bond. The bond used in this example is the bond maturing on June 1, 2006 (CUSIP 212257AN9) with a 6.65% interest rate. Let 10021499/598672.2 us further assume that, pursuant to the Modified Dutch Auction process, an Acceptance Yield Spread of — basis points was determined for the bond. Based on market conditions for the appropriate U.S. Treasury Reference Security for this bond, the County would calculate the Purchase Price as follows (in the example below, the Purchase Price is calculated in accordance with standard industry practice and assumes that the County will pay for the bond on the Settlement Date, which is expected .to be , 2001): Bond Information Interest Rate: ............................................. 6.65% Bond Maturity:.......................................... 6/l/06 Purchase Price Information U.S. Treasury Reference Yield (as of_/_/2001):.......................... % Acceptance Yield Spread:......................... 0. % L_bp) Tender Offer Yield*:................................. % Purchase Price (per$100):........................ $ * Tender Officer Yield equals the U.S.'rreasury Reference Yield plus the Acceptance Yield Spread. 6. WHEN WILL THE INVITATION EXPIRE? The Invitation is scheduled to expire at 5:00 p.m., Eastern Standard Time, on Friday, 2001, unless changed. This is called the "Expiration Date." 7. WHAT HAPPENS IF I DO NOT TENDER MY BONDS? If you do not tender your bonds, or if you tender only a portion of your bonds, then the bonds not tendered and accepted for purchase will remain outstanding and you will receive interest payments and the payment of principal on the same basis as before. Interest payments will continue until the bond matures or is purchased (if applicable) by the County. 8. WILL I PAY ANY FEES OR COMMISSIONS WHEN I TENDER MY BONDS? You will pay no fees to the County, the Dealer Manager or the Information Agent. However, if your bonds are held by a broker, dealer, bank, trust company or other institution, they may charge you a fee for their.services to you. 9. HOW DO I TENDER MY BONDS? If you own bonds that are held for you by a broker, dealer, bank, trust company or other institution, you will need to instruct your account executive at that financial institution to tender your bonds. The enclosed BLUE colored Bondowner's Instructions form may be used for this purpose. Your instructions must be given in advance of the Expiration Date deadline to provide your financial institution with sufficient time to transmit your tender to the County. 10021499/598672.2 7 sa 4 ' a-6-off 10. DO I HAVE TO SPECIFY A SPECIFIC YIELD SPREAD FOR THE BONDS WHEN I TENDER THEM? No. You have two tender options:.either a competitive tender or a non-competitive tender. Regardless of which option you choose, if your tender is accepted you will get the same Purchase Price as everyone else with bonds of the same CUSIP number whose tenders are accepted. You must choose only one of the following tender methods: • Competitive Tenders: You submit your bonds for tender and you specify the yield spread at which you are offering your bond. If your tender is at or above the Acceptance Yield Spread that we set for that CUSIP number, then subject to the terms of the Invitation, you will be paid the applicable Purchase Price for such bonds based on the Acceptance Yield Spread and according to the priorities for accepting tenders described in the Invitation. Most competitive tenders are made by large financial institutions and broker-dealers very familiar with the securities market, but that does not mean you cannot use this method. It just means that if you do choose to submit a competitive tender, you should be skilled in buying and selling securities or you should get independent professional financial advice. If you are interested in submitting a competitive tender, give your account executive instructions on the quantity, CUSIP number of the bonds you want to tender and what minimum yield spread you are willing to accept. • Non-Competitive Tenders: With this method, you tender your bonds but do not specify a yield spread. If we accept your non-competitive tender, you will be paid the Purchase Price that is based on the lowest yield spread (or highest dollar price) accepted for bonds of that same CUSIP number. A non-competitive tender provides the most assurance that you will sell the full amount of the bonds you tender. Before submitting a non-competitive tender, we suggest that you get independent professional financial advice. 11. WHAT IF TOO MANY BONDS ARE TENDERED AT A PRICE ACCEPTABLE TO US? The County has authorized the issuance of up to $125,000,000 of bonds for the purpose of purchasing bonds and/or advance refunding bonds. It is possible that we will be tendered more bonds of a particular CUSIP number at acceptable prices than we are prepared to purchase, particularly if there are large amounts of non-competitive tenders. In such a case, we will purchase bonds based on the order of priority shown in the answer to Question 14. 12. WHAT IF THE COMPETITIVE TENDER YIELD SPREAD I SUBMIT IS TOO LOW? On the first business day following the Expiration Date, the Acceptance Yield Spreads as determined by us will be announced. The Acceptance Yield Spreads will be released to the Information Services and posted on the Information Agent's web site at http://www.bondcom.com/ContraCosta/prices. If the yield spread at which you offered your bonds was lower than the Acceptance Yield Spread for such bonds determined by the County, you might have the opportunity to amend your tender to .designate a yield spread equal to the applicable Acceptance Yield Spread (the "Second Look" process). If so allowed, you must submit your amended tender no later than 5:00 p.m., Eastern Standard Time, on the second business day following the Expiration Date. 10021499/598672.2 3 13. MAY I AMEND MY TENDER? Yes. You may amend your tender at any time before the end of the Expiration Date deadline (currently 5:00 p.m., Eastern Standard Time, on Friday, , 2001). Also, as mentioned -above, there might be an opportunity to amend your tender after we determine the Acceptance Yield Spreads (through the "Second Look" process). If your tender is accepted, it cannot be withdrawn. 14. HOW DO I ASSURE THAT MY TENDER HAS THE HIGHEST POSSIBLE PRIORITY? The best way to assure that your tender will be given the highest possible priority is to tender your bonds early and submit a non-competitive tender. If the tender offer ends up being oversubscribed for a particular CUSIP number (that is, the County gets acceptable tenders for more bonds of that CUSIP number than it decides to purchase), the County will purchase bonds of that CUSIP number in the following order of priority: First, we will purchase bonds initially tendered on a non-competitive basis (i.e., tendered without specifying a yield spread); Second, we will purchase bonds initially tendered at an original offered yield spread for such bonds that is at or above the Acceptance Yield Spread for such bonds and, thereafter, in order of descending offered yield spread (and in case of the same original offered yield spread, by the date and time such tender was received and, thereafter, in the sole discretion of the County); and Third, if a "Second Look" is offered, we will purchase Second Look retendered bonds, and if less than all such Bonds are accepted for purchase, then from the highest to lowest offered yield spreads at which those bonds were initially tendered and by time of tender for any identical original offered yield spreads (and thereafter, in the sole discretion of the County). 15. WHAT WILL BE THE TAX IMPACT TO ME OF SELLING MY BONDS? You should consult your own tax advisors to determine the particular tax consequences (federal and state) to you of selling your bonds. 16. MAY I TENDER SOME OF MY BONDS BUT NOT ALL OF THEM? Yes, as long as they are tendered in authorized denominations of$5,000 or any integral multiple of$5,000. 17. WHEN IS THE EXPECTED SETTLEMENT DATE? The Settlement Date is the day on which bonds accepted for purchase are to be purchased. The Settlement Date has initially been set to occur on , 2001. 18. WHOM SHOULD I CALL IF I HAVE FURTHER QUESTIONS OR NEED ADDITIONAL COPIES OF DOCUMENTS? Please call your financial advisor or Nancy Norris of Bondholder Communications Group, the Information Agent, toll free at 1-888-385-BOND (1-888-385-2663) if you have any questions or need further information. 10021499/598672.2 4 S DY PLEASE NOTE THAT THESE QUESTIONS AND ANSWERS ARE PROVIDED TO YOU MERELY AS A SUMMARY, AND REFERENCE SHOULD BE MADE TO THE INVITATION. IN THE EVENT OF ANY INCONSISTENCY OR DISCREPANCY BETWEEN THESE QUESTIONS AND ANSWERS AND THE INVITATION., THE INVITATION WILL CONTROL. 10021499/598672.2 5 sad REQUEST TO TRANSMIT TO YOUR CLIENTS AND THEIR BROKERS . materials relating to the CASH TENDER OFFER by the COUNTY OF CONTRA COSTA, CALIFORNIA to its Bondowners for them to offer to sell to the County for cash the following TAXABLE PENSION OBLIGATION BONDS, 1994 SERIES A (indicated by CUSIP Number as follows): CUSIP Secondary Market Maturity Number Insured CUSIP June 1 212257 212257 2001 AH2 AV] 2002 AJ8 AQ2 and AT6 2003 AK5 AX7 2004 AL3 -- 2005 AMI ARO 2006 AN9 -- 2007 AP4 AS8 2011 AA7 AU3 Expiration Date: 5:00 PM Eastern Standard Time on , 2001, unless changed. Solicitation Fee: $2.50 per $1-,000 payable on the first $250,000 par amount purchased from each retail customer. To: Municipal Bond and Reorganization Departments From: The County of Contra Costa, California A. Please send the following materials to your Clients who own these Bonds AND also to their Brokers: 1. Letter from the County of Contra Costa, California(the "County"), including Answers To Frequently Asked Questions (IVORY COLORED). 2. Invitation to Tender Bonds (the "Invitation") made by the County dated 2001 (YELLOW COLORED). 3. Notice to Clients, on the back of which.is the Bondowner's Instructions (BLUE COLORED). B. Please also send to the Clients' Brokers (only), the Solicitation Fee Payment Request Form (GOLD COLORED). 10021499/598672.2 Invitation: The Invitation is being made by the enclosed Invitation To Tender Bonds of the County. This is the only information the County has authorized to describe the terms of the Invitation. Solicitation Fees: The County (not the retail customers) will pay to any commercial bank or trust company having an office, branch or agency in the United States, and any firm - - which is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc. (collectively, "Eligible Institutions"), a solicitation fee of $2.50 per $1,000 of up to the first $250,000 (par amount) of Bonds purchased from each of its retail customers pursuant to the Invitation. A retail customer is an individual who manages his or her own investments or an individual whose investments are managed by an investment manager or bank trust department that holds the investments of that individual in a separate account in the name of that individual. Eligible Institutions must submit requests for payment of solicitation fees on the Solicitation Fee Payment Request Form to the Information Agent at the address given below by 5:00 p.m., Eastern Standard Time, on or before the tenth business day following the Expiration Date. No payment of a solicitation fee will be made on requests received after that time. Reimbursement for Expenses: The County will reimburse financial institutions for their reasonable out-of-pocket expenses incurred in forwarding the Invitation and related documents to the Bondowners whose Bonds are subject to the Invitation (and to the Bondowners' account executives), and in handling and forwarding offers to purchase these Bonds. These reimbursements will be in the amounts established by the New York Stock Exchange. Requests for reimbursement must be received by the Information Agent at the address given below by 5:00 p.m., Eastern Standard Time, on or before the tenth business day following the Expiration Date. No reimbursement will be made on requests received after that time. Additional Material and Questions: Requests for additional copies of enclosed materials should be made to the Information Agent. Institutional investors with questions about the Invitation should contact Bear, Stearns & Co. Inc. Individual investors and their brokers and account executives with questions about the Invitation should contact the Information Agent. Dealer Manager: Bear, Stearns & Co. Inc. Information Agent: Bondholder Communications Group Attention: Nancy Norris 30 Broad Street, 46th Floor New York, New York 10004 Call Toll Free: (888) 385-BOND or: (888) 385-2663 Fax: (212) 422-0790 E-Mail: contact@bondcom.com 10021499/598672.2 2 NOTICE TO OUR CLIENTS of the CASH TENDER OFFER by the COUNTY OF CONTRA COSTA, CALIFORNIA 2001 To our Clients: You are a beneficial owner of certain of the Bonds of the County of Contra Costa, California (the "County") listed in the County's Invitation to Tender Bonds dated , 2001 (the "Invitation"). In the Invitation, the County has invited you and the other Bondowners to offer to sell to the County for cash some or all of these Bonds. Enclosed for your consideration are materials relating to the tender offer, including a letter from the County, the Invitation and this Notice. You should review the Invitation in order to make an informed decision regarding the Invitation, and you should also consult your account executive or other financial advisor in deciding whether, and if so, how, to respond to the Invitation. Since your Bonds are held through an account with us, only we can submit a tender to the County on your behalf. We will do so only upon your instructions. You may instruct us to make a tender on your behalf by contacting your account executive as well as by using the Bondowner's Instructions on the back of this letter. It is important that you contact your account executive following the Expiration Date (or as otherwise provided in the Invitation) to learn the results of the Invitation and any tender you may have made. Your attention is directed to the following provisions of the Invitation: If you wish us to submit a tender for you, then you must instruct us to do so by contacting your account executive. You may also instruct us by completing, executing and returning to your account executive the Bondowner's Instructions on the reverse side of this letter. • Please forward your instructions to us in time for us to submit your tenders prior to the Expiration Date deadline (presently set for 5:00 p.m., Eastern Standard Time, on Friday, , 2001). • The County will use a "Modified Dutch Auction" to establish the Acceptance Price Spread and in turn the Purchase Price for each CUSIP number. Each accepted tender (by CUSIP number) will receive the same price. • You may tender bonds either competitively (by specifying an Offer Yield Spread) or non- competitively (by not specifying an Offer Yield Spread). • If you specify an Offer Yield Spread, it must be expressed in basis points over the yield- to-maturity of the relevant U.S. Treasury Reference Security specified on the cover page of the Invitation (e.g., 40 for 40 basis points). • If you tender bonds non-competitively, your tender will receive the highest priority within that CUSIP number and you will receive the same purchase price as all other accepted tenders of that CUSIP number. • A tender (with or without specifying an Offer Yield Spread or Offer Yield Spreads) of Bonds of a particular CUSIP number must specify the par amount tendered. Bonds may only be tendered in authorized denominations (i.e., denominations of$5,000 and integral multiples thereof). • "All or none" tenders for any CUSIP number or for all tenders from a Bondowner are not permitted. You may only tender Bonds that you own. 10021499/598672.2 For assistance in completing this form, please contact your account executive or Nancy Norris of Bondholder Communications Group, toll free, at 888 385-BOND (2663). BONDOWNER'S INSTRUCTIONS with respect to the INVITATION TO TENDER BONDS made by the COUNTY OF CONTRA COSTA, CALIFORNIA to its Bondowners for them to offer to sell to the County for cash the TAXABLE PENSION OBLIGATION BONDS, 1994 SERIES A listed in the County's Invitation dated , 2001 Expiration Date: Friday, , 2001, 5:00 P.M. Eastern Standard Time unless terminated or extended. To: My Account Executive: I received the Invitation To Tender Bonds dated , 2001 of the County of Contra Costa, California (the ".County"). This document instructs you to offer to sell to the County in authorized denominations my Bonds of each CUSIP number specified by me below that are held by your firm for my account. If I am tendering Bonds of a particular CUSIP number at an Offer Yield Spread, that Offer Yield Spread is specified below. If I filled in the "non-competitive" circle, I agree to receive a purchase price based on the Acceptance Yield Spread determined by the Modified Dutch Auction process. If I filled in the "competitive" circle, I have specified the Offer Yield Spread(s) designated below (expressed in basis points over the yield-to-maturity of the relevant U.S. Treasury Reference Security specified in the Invitation, e.g., 40 for 40 basis points). I understand that my tender or tenders must be made in accordance with, and are subject to the terms of,the Invitation. The Terms of My Tender: Offer Yield Maturity Par Amount of Spread CUSIP# June 1 Bond tendered Tender Type in basispoints) o Non-competitive N/A 212257 $ o Competitive Bp o Non-competitive N/A 212257 $ o Competitive Bp My Name, Signature, Address and Daytime Tele hone Number: (Put Label Here) Signature(s) Print Bondowner's Name(s): X X Address: Dated: , 2001 (the date signed) City State Zip Code Arca Code and Daytime Tcle hone Number This completed and signed Bondowner's Instructions form must be immediately delivered by you to Your account executive. You may use the enclosed envelope. 10021499/598672.2 SOLICITATION FEE PAYMENT REQUEST FORM with respect to the INVITATION TO TENDER BONDS made by the COUNTY OF CONTRA COSTA, CALIFORNIA to its Bondowners for them to offer to sell to the County for cash the TAXABLE PENSION OBLIGATION BONDS, 1994 SERIES A of the County listed in the County's Invitation dated , 2001 I, the undersigned, understand that the County of Contra Costa, California (the ("County") has agreed to pay to any commercial bank or trust company having an office, branch or agency in the United States, and any firm which is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc. ("NASD"), a solicitation fee of$2.50 per $1,000 of up to the first $250,000 par amount of the Bonds of each of its retail customers that are purchased pursuant to the Invitation to Tender Bonds (the "Invitation"). A retail customer is an individual who manages his or her own investments or an individual whose investments are managed by an investment manager or a bank trust department that holds the investments of that individual in a separate account in the name of that individual. I represent that I am a registered employee of my firm, which is a financial institution mentioned in the prior paragraph. I personally solicited the tender from my firm's retail customer that resulted in the purchase by the County pursuant to the Invitation of the par amount of the Bonds set forth below. On behalf of my firm, I request payment of the resulting solicitation fee. This request for the solicitation fee constitutes a representation that (i) in making solicitations, I and my firm did not use any materials other than the Invitation, (ii) my firm is entitled to this solicitation fee under the terms and conditions described above and in the Invitation, (iii) if my firm is a foreign broker or dealer not eligible for membership in the NASD, it has agreed to conform to the NASD's Rules of Fair Practice in making a solicitation outside the United States to the same extent as though it was a NASD member, and (iv) my firm and I have complied with. and will comply with the applicable requirements of the Securities Exchange Act of 1934, as amended, in connection with the solicitation. PLEASE PRINT CLEARLY OR TYPE THE FOLLOWING INFORMATION: DTC Voluntary Offering Instruction (V.O.I.)'Ticket No.: Name of.My Firm's Client or Customer(optional): My Firm's Client or Customer's Account Number(mandatory): Par Amount of Bonds Purchased from this Client: $ CUSIP.NO.: 212.257 Full Name of My Firm: DTC Participant Number-of My Firm: My Name: My Title: My Branch or Office: My Telephone Number: My Signature: X 10021499/598672.2 Fee 1s to be paid to(payee): aaL o/ Fee should be sent to(address): Telephone number: Send this completed form to the Information Agent for receipt no later than 5:00 p.m., Eastern Standard Time, on the tenth business day following the Expiration Date of the Invitation (presently set for 5:00 p.m., Eastern Standard Time, on , 2001). No payment of a solicitation fee will be made on requests received after this time. The Information Agent: Bondholder Communications Group Attention: Nancy Norris 30 Broad Street, 46th Floor New York,New York 10004 Call Toll Free:(888)385-BOND or: (888)385-266') Fax: (212)422-0790 E-Mail: contact@bondcolm.com All questions as to the validity, form and eligibility (including time of receipt) of Solicitation Fee Payment Request Forms will be determined by the County, in its sole discretion, which determination will be final, conclusive and binding. Neither the County, the Dealer Manager, the Information Agent nor any other person is under any duty to give notification of any defects or irregularities in any Solicitation Fee Payment Request Form, and neither the County, the Dealer Manager nor the Information Agent will incur any liability or other obligation for failure to give such a notification. 100211499/598672.2 2