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Security for the 2010 Bonds. The 2010 Bonds will be payable from and secured by Housing Tax Revenues (as defined herein) allocated to the Agency from the Project Areas. In California, the financing and refinancing of redevelopment projects may be provided by the issuance of tax allocation bonds. Such bonds are payable from ad valorem property taxes attributable to increases in the assessed valuation of certain property (except public property and property exempt from taxation) in designated redevelopment project areas over that shown on the assessment roll for the adjusted base year, as explained in greater detail herein. Not less that 20% of the tax increment revenues are required by the Redevelopment Law to be deposited in the Agency's Low and Moderate Income Housing Fund for use pursuant to the Redevelopment Law to increase, improve or preserve the supply of low and moderate income housing within or of benefit to the project area. The 2010 Bonds are payable from and secured by such housing-related tax increment revenues of the Agency constituting "Housing Tax Revenues" (as defined herein) generated from property in the Project Areas. Housing Tax Revenues is defined in the Indenture and generally includes 20% of the incremental increase in property taxes collected within the Project Areas attributable to the increase in assessed valuation of property therein. Such taxes are eligible for allocation to the Agency pursuant to the Redevelopment Law in connection with development or rehabilitation of property to be used for low and moderate income housing within or of benefit to the Project Areas. Housing Tax Revenues are more fully described under the caption "SECURITY FOR THE BONDS -- Housing Tax Revenues". Based on assessment roll data provided by the Alameda County Auditor-Controller, the aggregate assessed valuation in fiscal year 2009-10 for the two Project Areas is approximately $3.297 billion. Aggregate Housing Tax Revenues, after payments of County administration fees, are estimated to be approximately $2,057,603 for Fiscal Year 2009-10 (see "APPENDIX A - Fiscal Consultant's Report"). See also "THE AGENCY AND THE PROJECT AREAS." In addition to the 2010 Bonds, the Agency may, subject to certain conditions, issue additional bonds or incur other loans, advances or indebtedness payable from Housing Tax Revenues on a parity with the 2010 Bonds to finance low- and moderate income housing activities for the Project Areas in such principal amount as shall be determined by the Agency. See "SECURITY FOR THE BONDS -Issuance of Additional Debt". Risk Factors. Certain risks are involved in investing in the 2010 Bonds. See "RISK FACTORS" herein. Should there occur any future decrease in the taxable valuation in the Project Areas or in the applicable tax rates, the Housing Tax Revenues (as more particularly described under the caption "SECURITY FOR THE BONDS -Housing Tax Revenues") allocated to the Agency from the Project Areas would be reduced and, correspondingly, Housing Tax Revenues would be reduced, having a possible adverse impact on the ability of the Agency to repay the 2010 Bonds. The Project Areas. On July 12, 1993, the City Council of the City (the "City Council") adopted the Redevelopment Plan (as amended, the "Alameda County -City of San Leandro Redevelopment Plan") for the Joint Project Area by Ordinance No. 93-012. The plan has been amended six times, as described herein. The Joint Project Area encompasses approximately 1,700 acres and is largely comprised of single-family residential parcels, along with commercial and industrial parcels. The assessed value of the Joint Project Area for fiscal year 2009-10 is approximately $2.267 billion and the base year valuation is $903,597,367. The Joint Project Area is a "joint" area due to the inclusion of land in both unincorporated Alameda County and the City. Accordingly, the Joint Project Area Redevelopment Plan provides that tax increment revenues generated from the Joint Project Area are split between the City and the County of -2-