HomeMy WebLinkAboutReso 91-2009~~SOLVTIOI~~ ~-o. 91-7009
CITY COUi~TC~~L
OF THE
CITY C)F Sl~Z7TFi SAN ~'R~NCISC{O
A RESOLUTION APPROVING THE FORM OF' AND AUTHORI7ING THE
EXECUTION AND DELIVERY OF A PURCI-SASE Al~'D SALE AGREEMENT
AND RELATED DOCUMENTS WITH RESPECT TO THE S:~L,E OF THE
SELLER'S PROPOSITION lA RECEIVABLE FROM THE STATE; AND
DIRECTING AND AUTHORI7_ING CERTAIN? OTHER .ACTIONS IN
CONNECTION TI~ERE~~ITH
V`~~HEREAS, pursuant to Section 2~.5 of Article xIII of the Califonria Constitution and
Chapter I4X~~X of the California Statu es of 2009 (Assembly Bill No. l >}, as amended (the
"Act"}, certain local agencies within the Stale of California (the "State"j are entitled to receive
certain payments to be ~Ilade by the State on or before June 3(?, ?(}I3, as reimbiarseme~lt 1'or
reductions i11 the percentage of the total amount of ad v~~alorem property tax revenues allocated to
such local agencies during the State's 2009-10 fiscal year (the ~`Reullbursement Payments"),
ti5-bleb reductiozis have been authorized pursuant to Sections 100.0.5 and I~JU.O6 of the Califon~ia
Revenue and Taxation Code;
V~THEREAS, the ~'ity «f~ South San Francisco, a local agency within the meaning of
Section 6585(f) of the California Govermnent Code (the "Seller"), is entitled to and has
detenliined to sell all 1-ight, title and interest of the Seller in and to its "Proposition 1A
receivable", as defined in Section 655~(g) of the California Govei~~~~ent Code (the "Proposition
1 A Receivable"), namely, the. right to payment of moneys d:ue or to become due to the Seller
pursuant to Section 25.>(a)(1)(B)(iii} of Article XIII of the California Constitution and Sectio~l
100.06 of the California Revenue and Taxation Code, in order to obtain motley to field public
capital improvements or working capital;
Vi-'HEREAS, the Seller is authorized to sell or otherwise dispose of its propelrty as the
interests of its .residents require;
Vi-'~-IEREAS, the California Statetivide Co1~1~i~lunities Development Authority, a joint
exercise of powers authority organized and existing ruder the la~~~s of the State (the
``Purchaser"}, has been authorized pursuant to Section 6558(x) of the California Government
Code to purchase the Proposition 1 A Receivable;
~~iBERE~~S, the Purchaser desires to purchase the Proposition IA Ieceivable and the
Seller desires to sell the Proposition IA Keceivable pursuant to a puurchase and. sale agreement by
and between the Seller and the Purchaser in the form presented to this City Council (the ``Sale
Agreement") For the purposes set Earth herein;
WIdEREAS, in order to rnance ihe~ purchase prise of the Proposition 1 A Recei~, aiale From
the Seller and the purchase price of other Proposition 1A Receivables fi-onl other Ioca1 agencies.
the Purchaser ~~~ill issue its bonds (the `Bonds") pursuant to Section 6~9O of the California
Government Code and an Indenture (the "Indenture"j, by and between the Purchaser and Wells
Fargo Bank, National Association, as tnistee (the "Trustee"), which Brn1ds will be payable solely
from the proceeds of the Seller's Proposition lA Receivable and other- Proposition 1 A
Receivables sold to tl~e Purchaser by local agencies in connection with the issuance of the
Bonds;
~'~rHEREAS, the Seller aclcnowledges that (i) any transfer of its Proposition 1A
Receivable to the Purchaser pursuant to the Sale Agreement shell be treated as an absolute sale
and transfer of the property so transferred and not as a pledge or grant ol~~ a security interest by
Ct_y~ oC Sc~ lth Sang Francisco to secure a borrowing, (iij any suc11 sale of its Proposition lA
Receivable to the Purchaser shall automatically be perfected without the need for physical
delivery, recordation, filing or hirther act, (:iii) the provisions of Dig-Tision 9 (coin~nencing with
Section 9141) of the California Commercial Code and Seetiolls 9?~.> to ~>5.1 of the California
Civil Code, inclusive, shall not al~~ply to the sale of its Proposition lA Receivable, and (ivj after
such transfer, the Seller shall have no right, title, or interest in or to the Proposition 1 A
receivable sold to the Ptn-chaser and the Proposition 1 A Receivable will tl~~ereafter be owned,
received, held and disbursed only by the Purchaser or a trustee or agent appointed by the
Purchaser;
WHEREAS, the Seller acknowledges that the Purch~~.ser will grant a security interest in
the Proposition IA Receivable to the Titiistee and any credit enhancer to secure payment of the
Bonds;
WHEREAS, a portion of the proceeds of the Bonds will be used by the Purchaser to>
among other things, pay the purchase price of the Proposition ] A Receivable;
t~TE-IEREAS, the Seller will use the proceeds receivE~d from tlie~ sale of~tl~e Proposition lA
Receivable for any lawful purpose as permitted under the applicable laws of the State;
NOW THEREFORE, the City Council of the C'it~; of South San Francisco hereby
resolves as follows:
Section. 1. All of the recitals set forth above are true and correct, and this City
C;~uncil hereby so finds and determines.
Section ?. The Seller hereby authorizes the sale of the Proposition 1 A Receivable
to the Purchaser for a price equal to the amount certifed as the Initial Amoui~~t (as defned in the
Sale Agreement) by the Colmty auditor pursuant to the Act. The form of Sale Agreement
presented to the City Co~~i~cil is hereby approved- An Authorized Officer (as set fo3-th in
A~ppendi~ A of this Resolution, attached hereto and by thi<.~ reference incorporated herein] is
hereby authori.~ed and directed to execute and deliver the Sale Agreement on ~!~ehalf of the Seller,
which shall be in the form presented at this meeting.
Section 3. Any Authorized Officer is hereby .authorized and ~~Iirected to send, or
to cause to be sent, an irrevocable written instt~uction to the State Controller (the "ln-evocable
Written Instniction") noiifying the State of the sale of the Proposition IA Receivable and
instructing the disbursement purs~zant to Section 6~~8.6(c) of California Goverlunent Code of the
Proposition lA. Receivable to the Trustee, on behalf of the Purchaser, which h-revocable Written
Instr2iction shall be in the form presented at this meeting.
-,
Section ~?_ The Authorzed Uflicers and such other Seller o~ficprs, as appropl~ate,
are hereby authorized and directed, ,jointly and severall}~, to do ~:nv and all things and to execute
and deliver any alld all documents, including belt not limited to, ~if required; appropriate escrow
instructions relatin~~ to the deli~~el-y into escrow of exe~~ited documents prior to the closing of the
Fonds, and such other- documents me~Iltioned in the Sale Agr~eernent or the Indenture, which any
of them may deem necessary oI- desirable iIl order to ilnplenlent the Sale Agreelllent and
otherwise to carry out, gig-e effect to and comply with the terms alld intent of this Resolution; and
all such actions heretofore taken by such officers are Ilerebv ratified, coniirrlled and appro~-ed.
Section, 5. ,-1ll consents, approvals, notices,orders, requests and other actions
pennit?ed or required by aay of the documents authorized by this Kesohrtion, tiirhether be;ol-e ar
after the sale of the Proposition lA Receivable or the issuance of the Bonds, includill~r v,~ithout
(imitation any~~ of tyre fore~~~oing that may be necessary or desirable iIl conneciion with ally dPE~ault
Lnldel~ OI' a trlend121ent of S~ICl2 doCUnlentS, Inay be grVeli Or ta~:,il by all ,Alitliorrzed OfljCer
without ft~riher authorization by this City Council, and each Authorized Officer is hereby
authorized and d=:rected to <~ive any such consent, approval, notice, order or request, to execute
any necessary or appropriate doculllents or amendr~lents. and to tape any such action that such
~~uthoried Oflicer Ilea}~ deem necessary or desirable to further the purposes ot~ this Resolution.
Section <. The City Council acknowledges that, upon execution and detivery of
the Sale ~~~greemznt, the Seller is contractually obligated to sell the Proposition lA Renei~°able to
the Purchaser pursuant to the Sale Agreement and the Seller shall not have any option to revoke
its approval of the Sale Agreernellt or to deten~li~ne not to p,~rfi~I~11 its oblivations t~hereunde~r.
approval-
Section 7. f his Resol~.~tion shall take effe~;.t from and after its adoption alxl
.PASSED ,a.i~TD ADOPTED try the (:icy Cr~~ulcit of the Cite of S~ot~th Sai
Francisco, State of California, this 28th day of Oato}r>er , 2UU9, by the follo~~-ink
vote:
.~y~S. Coun~:i~r:3rnbers Pedro Gonzalez, '~ichard A. ~arbarino, and Kevin `~1u11in,
Vice '~1ayor "lark Addiego and Mayor Kar_yl Matsumoto
NOES: None
_~BSENT: ~lon~e~
~~ _
~, gig.
Attest:
a.
.~ , .,,
~:,
-~,
Approved as io fonl~
SELLER'S COUNSEL
a
4~ /f
~~ /• f!
~_ r ,4 '~{
Dated: ~ ~ _ ~=r,~ , 1
~t
API'ENDI~ h
CITY OF SQLirIH S.~N F~Z.a'~}CISCO
Authorized Officers: ~3~lrr~, ~~. Neel, City° itilana~er
Jfl~~ Steele, Fi~~ance Director
~Iart~ ~'an Dziti~1, <~SSi~t~~lt Chit` ~Ia~~~~~r
any designee of any of tlleni, as ai:~~ointed in a ~~~ritten certificate of
such Authorized Officer delivered to the Tnastee.
CI^I'Y OI~_ SOUTH SA ~ F~R.~INC:ISC~(~, CAEI~= ORNiA_
as Seller..
and
CAL.I~OI~:NIA STATE~~'LDE COI~II~IUNI"PIES
DEVELOPI~ZENT AUT~IOIZITY,
as PEU~ch~ser
PUKCIIASE AND SALE ACiREE~IE'vT
Dated as of November 1, 20C~~
E-1
TABLE OF CO\'TE\'I'S
P~~e
1. DEFINITIONS AND 1NTERPRETATION ...................................................................._. 2
`? AGREE~~1Ei\'T TO SELL AND PURCHASE; CONDTIONS PRECEDENT....--- ~
3_ PURCHASE PRICE, CONVEYANCE OF PRO~POSL[,ION 1A RECEIVABLE
AND PAYR-TENT OF PURCHASE PRICE
................................................
4. REPRI=:SENTFITIONS AND ~Tv'ARRANTIES OF THE. PURCHASER .................... ......4
~. REPRESENTATIONS AND WARRANTIES OF THE SELLER ............................. ...... 5
6. COVENANTS Oh THE SELLER ............................................................................... ...... 7
?. THE P[IRCIIASER'S ACKNOWLEDG'~~IENT....._..._........ ....................................... ...... 9
8. NOTICES OF BRFACH .............................................. .. ............_............- --.... 9
`). LIABILITY OF SF_,LI.ER; INDEMNIFIC,4TIONT ...................................................... ...... 9
1 U. LIivIITATION ON LIABILITY .................................................................................. .... 10
1 1. THE SELLS-R'S ACKNOWLEDGI\~1ENT ............................ .... 10
1 ~. NOTICES .... ...................................................................................__......................... .... 1O
1 ~. AMEND;~IENTS ...................................................................................... ..
................. .... IO
4. SUCCI-;SSORS AND ASSIGNS ...................................................... . .... 10
1 >. THIRD PART' RIGHTS ............................................................................................ .... 11
l6. PARTIAL INtiALIDITY ......................._...---...-----....._...._......----....._..........__............_. _._. 11
17. COUN'TERPARTS ............................................................................................
..........
.... 11
1 ~. ENTIRE AGREEI~IENT ...........................................-_.........-----_................---.........._._. .... 11
19. GOVEF:NING LA~V .................................................................................................... .... I?
EXHIBIT A -DEFINITIONS ................................................................................................. ..A-1
EXHIBIT B I -- OPINION OF SELLEER'S COt?NSEL ........................................................... B1-1
EXHIBIT B? -- BRINGDO~U~T OPINIO?~? OF SELLER'S C'OUNSEL ................................. B2-1
EXHIBIT C I -CLERK'S C:ERT'IFICI'1TE ............................................................................. C1-1
.EXHIBIT C? --SELLER CERTIFICATE .............................................................................. C?-1
L-XHIBIT C ~ -BILL OF SALE AND BRINGDOtiVN CSR'TLFICATE ................................ C3-I
EXHIBIT D - IRP.EVOCABLE INSTRUCTIONS TO CONT.ROLLER ............................... .D-1
EXHIBIT E - ESCRO~~' INSTRUCTION LETTER ............................................................... . E-1
PliRCH ASE A\D SAI;>iJ A~GIiEE~ZE\~T
THIS PURCHASE AND SALE AGREEMEIy~T, dated as of :~Noven~ber 1, 2009
(this "A~reement"); is entered into by and between:
(1) CLT~' (~F S+C)UTH SAN FRANCISCO, a local agenc~~ of the State of
California «~ithin the i7ieani~lg of Section 6585(f} of the Califonlia Goveniment Code (the
"Seller"); and
~2} CALIFORNIA STATEWIDE C~OI`~~IMUNITIES DEVELOPMENT
AUTHORITY, a joint exercise of powers ai~tho~-ity organized and existingunder the lati~'s of the
Si.~.~te of Califor~~ia (the "Purchaser" j.
12ECITAL.S
A. Pursuant to Section 25.5 or Article XIII of the California Constitution and
Section 100.00 of the California Revenue and Taxation Code, local agencies «~ithi~l the I~Zeaning
of Section 65~5(f) of the California Govenurlent Code are entaled to recei~~e certain payments to
be~ made by the State of California (the "State"j on or before June 30, 2013. as reimbursement for
reductions in the percentage of the total amount of ad valorem property tax reti~e~-lees allocated to
such Iocal agencies during the State's 2009-i0 fiscal year, which redl~~ctions ha~~e been
authorized pursuant to Sections 100.05 and IOO.t)6 of the Ca.lifonlia Reti-enue and Taxation Code.
B. The Seller is the o~~~ner of the Proposition 1 A Receiti-able (as defined
belc>~~r) and is entitled to and has detenuined to sell all right, title and interest in and to the
Proposition lA receivable, namely, the right to payment of motleys due or to become due to the
Seller pursuant to Section 25._5(a}(1)(B}(iii) of Article XIII of the California Constitution and
Section 100.06 of the California P-,e~~e~nle and Taxation Code, in order to obtain mone~_~ to fiord
any lawful puz-~,ose as permitted ul3der the applicable la«~s of the State.
C. The Seller is authorized to sell or otl~ierwise dispose of its property as the
interests of its residents require.
D. The Purchaser, a joint exercise of po~~rers authority organized and existing
under the laws of the State; has been authorized pursuant to Section 65SS(x} of the California
Government Code to purchase the Proposition lA Recei~-ab}e_
E. The Seller is willing to sell, and the Purchaser is «-illing to purchase, the
Proposition 1 A Reeei~-able upon the terms specified in this Agreement.
F. Pursuant to its Proposition 1 A Recei~~~able Finalzcingr Pro~~ram (the
"Prog~~ram"), the Purchaser will issue its bonds (the "Bonds") pursuant to an Indenture (the
"Inde~ntlu-e"}, between the Purchaser and Wells Fargo BZnk, National Association, as ti~t-stee (the
"Trustee"), and will use a portion of the proceeds tl~iereof to purchase the Proposition I A
Recei~-able front the Se11er_
(s. The Purchaser ~~-i11 grant a security interest in such Proposition LA
Receivable to the Tnlstee and each Credit Enhancer to sec~.ue the Bonds.
~~IO~~~, THEREFORE, in consideration of th ~ above Recitals and the mutual
covenants herein contained_ the parties hereto hereby agree as ::ollo~~~s:
1. Def~~iliti~,~ns vid Inten~retation.
i a) For all purposes of this Agreement, except as other>vise expressly provided
herein or unless t}~e conte~~a otherwise requires, capitalized tr,rms not otherwise defined herein
shall have the meanin~~s ascribed to such teens in Exhibit A attached hereto and winch is
incorporated bti~ reference herein.
(b) The words`hereof," '`herein," "hereunder" and wards of similar import when
used in this Agreement shall refr to this Agreement as a whole and not to any partictdar
provision of this A~>ree.r3~ent: section and exhibits referen~:es contained in this A~~reenle~lt are
references to sf~~ctions and exhibits in or to this Agreement unless otherwise specired; and the
term "includin~~" shall nle~iil "incllyding without Ii~mitatian."
(c;1 A~1v agreement, instrturlent or statute defr~_ed or referred to herein or in any
instnrment or certificate delivered in connection herewith r~~1e~Zns such agreei~~ent, instnainent or
statute as from time to time may be amended, modified or supplemented and includes (in the
case of agreements or instruments) references to all attachments and exhibits thereto and
instnunents incorporated therein: and any references to a Person are also to its permitted
successors and assi~>ns_
?. A~>_reel>>ent to Sell and Purchase~_ Conditions Precedent.
(a~ i he Seller a~gees to sell, and the Purchaser agrees to purchase, on the Closing
Date, for an ainouiu equal to the Ptuchase Price, all ri~~ht, title and interest of tl~ie Seller in and to
the '`Proposition 1.~~ recei~,~able" as defined in Section 6~~5(~~) oh the California Government
Code (the "Pz_o~itor, 1.~ Receivable"), namely, the right to payment of moneys due or to
t~eeome due 1o the Seller pursuant to Section 2~.~(:a}(1)(B j(iii) of Article XILI of the Califonlia
Constitution ai-~d Section 1 C}0_t)G of the California Revenue and Taxation Code. The Purchase
I?.~ice shall be paid by 'hePurchaser to the Seller ill two equal cash installment payments, without
interest (each, aT~ ``Instatlt~~ent Payment" and, coI]ectivel_y, the "Installment Payments''), on
January 1 >, 2ii~ I U, and h~Iay ~, 2010 (each a "Payment Date" and, collectively, the "Payment
Dates"}. The Purchaser shall pay the Purchase Price b~,~ ~=~~ire transfer pursuant to wire
instructions provided by the Seller to the Tnistee by e-mail to john.deleray~awellsfargo.com or
b~,- facsimile to 213-614-355, Attention. Sohn De~leray. If wire instnuctions are not provided to
the Trustee (or if such wire instructions are invalid} payimf°n~~ will be made by check mailed to
the Seller's Principal Place of Business.
(b j ~'he performance by the Purchaser of its obligations Hereunder shall be
conditioned uh~on:
(i 1 Trar:sa;,tion Cowlsel receiving on or before the date the Bonds are sold
(.the ~`Pricin~ Date"j, to be held m escrow until the Closing Date and then
~Ieli~-erecl to the Purchaser on the Closing Date, the follo~~ring documents
duly executed b}- rile Seiler or its counsel, as applcable~ (I} an opinion of
cou,lsel to the Seller dated the Pricing Date iTl substantially the fond
attached hereto as EYhibil B I , (~} certificates dated the Pricing Date in
substa~~tially the loans attached hereto as Exllibit_ C1 and Exhibit. C_2,
f ~} irre~~~ocable instructions to the Col troller dated as of the Closing Date
i,1 substantially the foam attached hereto as Exhibit D, (-I) this A~~u-eemellt,
(~) a certified copy of the resolution of t'~~e Seller's l"ity ~~oil~l~l appro~~ing
this .-~greeillent, the tral~sactioiis contemplated hereby ~.ild the docuiiients
attached hereto as exhihits_ and (6) an escrow i.~stnlction letter in
substantially the form attached hereto as Exhibit E;
(ii) "h~~ansaction Counsel receivi~lg on or Lefore tl~~ Pricing Date, (I) a
bri>>gdown opinion of counsel to the Seller dated as of the Closing Date iii
substantially the form attached herete~ a~ Exhibit B2, aiid (2) a bill of sale
and brin~~down certiFicate of the Seller (.the "Bill of Sale"} in substantially
the Form attached hereto as Exhibit C3:~ pro~~ided that the Purchaser may
«~aiae, ill its sole discretion, the requirer~zents of Section ?(hj(ii}(I);
i;iii) the Ptuchaser issuin~~ Bonds i~1 ats tu~toi.mt ~~~1>;ch t~,~ill be sufficient to pay
the P~.ircllase Price; atld
f i~- } the receipt by tl7e Purchaser of a certification of the Coumty Auditor
cont~tnming the Initial Amount of the Proposition 1 A Receivable pursuant
to the Act.
(c) The per_Cor7l~ance by the Seller of its obli~atio~ls he~reuilder shall Le
coi~ditiened solely upon the Purchaser's issuance of the Bonds its execution and delivery of thus
Agreement, pursuant to which it is legally obligated to pay the Installment Payments to the Seller
on the Payment Dates as set forth in this Agreement, and no other act or omission on the part of
the Purchaser or any other party shall excuse the Seller from performing its obligations
hereunder. Seller specii-~c~illy disclaims any ri,ht to rescind this Agreemel~t; or to assert that title
to the Proposition l A Receivable has not passed to the Ptn-chaser, should Purchaser fail to snake
Instaihlent Payments in the requisite an~ou~lts on the Pad%me~nt Dates.
3. Purchase Price, Conveyance of Pro~osi~~~~:ion I A Receivable and Payment of
Purchase Price.
(a} Upozr pricing of the Bonds by the Purchaser, the Purchaser will inform the
Sell°r that it will pay the Purchase Price in Installment Payments on the Payment Dates_
(b) In consideratio~~~ of the Purchaser's agreem°nt to pay and deliver to the Seller
the Installment Payments on the Payment Dates. the Seller a~~.rees to (i) transfer, grant. bargain,
sell, assign_ cony%ey, set o~~er anal de1_iver to the Pru-chaser, absolutely and not as collateral
security, withc}ut recourse except. as expressly provided herein, and the Purchaser agrees to
purchase_ accept and receive, the Proposition IA Receivable, and (ii) assign to the Purchaser, to
the extent permitted by la;~~, all present or future rights, if any, of the Seller to enforce or cause
the enforcement o1~ pa~-n~ent of tl.e Proposition IA Recei~~~able pursuant to the Act. and other
applicable law. Such trazlsfer. ~~ral~t, bargain, sate, assigrm~ent, conveyance, set oyez- and
delivery is hereby- expressly stated to be a sale and, pl~.rs~aant to Section C>~~.6(b) of the
Califon~ia Government Code, shall be treated as all absolute sale and transfer of the Proposition
I A Receivable, a~1d not as a grant of a secarity interest by the Seller to secure a borrowing. This
is the statement referred to in Sections 6>~8.6(b) a~ld (c) of tale Califor~~a Government Code.
4. Representations and ~~'arranties of the Purchaser. The Purchaser represents
and warrants to the Seller, as of the date hereof, as folloi~~s:
(a) The Purchaser is duly organized, validly e~.isting and in good standing tinder
the laws of the State of California.
i,b) The Ptu-cl-~aser has frill polver and autholi~ty to enter into this agreement u~d to
perfoil~~ its obligations hereunder and has duly authorized such purchase and assignment of the
Proposition IA Receivable b}~ the Purchaser by all necessar~~ action.
(c) Neither the execution and delivery by the Purehase~r of this agreement, nor
the performance. by the Purchaser of its obligations hereunder; shall conflict with or result in a
breach or default under an}~ of its organizational documents, any la~~~, rule, regulation, judgment,
order or decree to which it is subject or any agreement or instn.uuent to which it is a pv~ty.
(dj "ho the best of the knowledge of the Purc~~laser, no action, suit, proceeding,
inquiry or investigation, at law or in equity, before or by any court, public board or body, is
pending or threatened in any ~~~ay against the Purchaser affecting the existence of the Purchaser
or the titles of its comtr~is>ioners or officers, or seeking to restrain or to el~join the purchase of
the Proposition IA Receivable or to direct the application of the proceeds of the purchase
thereof, or in any way contesting or affecting the validit~r or eirforceability of any of the
Transaction Docunle~nts or any other applicable a~~reements or any action of the Purchaser
contemplated by any ol~ said documments, or in arry way contesting the po~~~ers of the Purchaser or
its authority ~~,~ith respect to the Transaction Doculuents to which it is a pairty or any other
appiic;lble Areement, or any action on the part of the Purchaser contemplated by the Transaction
Documents,~or in an~~ way seeping to enjoin or restrain tl~e Purchaser from purchasing the
Proposition IA P.eceivable or ~~~hich if determined adverse~h~ to the Purchaser would have an
adverse effect upon the Purchaser's ability to purchase the Proposition 1 A Receivable, nor to the
knowledge ofthe Purchaser is there any basis therefor.
{e) This At7,reement, and its execution, dei~iv~ery and performance hereof have
been duly authorized by it, and this Agreement has been duly executed and delivered by it and
constitutes its valid and binding obligation enforceable against ~it in accorda~lce ti~rith the terns
hereof, subject to the effect of bankruptcy; insolvency, reorganization, moratoriwil, fraudulent
conveyance and other similar laws relating to or affecting creditors' rights generally or the
application of quitable principles in any proceeding, whether at la~~~ or in equity.
(f) The Purchaser is a separate le~7a1 entity. acting solely throu~zh its authorized
representatives, from the Seller, maintaining separate rec~~rds, books of account, assets; ba~rlc
accounts and fields, ~~hich are not and have not been conlmi~ngled with those of the Seller.
4
(',) All approvals, consents, authorizatiotls, elections and orders of or clings or
registrations with env ~~overnmental authority, board, agency or commission having jurisdiction
which would constitute a condition precedent to, or the absence of which would adversely affect,
the p~Irchase by the Purchaser of the Proposition 1 A Receivable or the performance by the
PII_rchaser of it, obli~~ations iulde~r the Tral~saction Doctlla~ents to l~~hich it is a party al~d ally other
applicable agreements, have been obtained alld are in furl force and effect.
(h~ Insofar as it would materially adversely affect the Purchaser's ability to enter
into, carry out aLld perform its obligations under any or all of the Transaction Documents to
~ti~hich it is a party, or consummate the transactions contennplated by the same, the Purchaser is
not in hreach of or de~ault under airy applicable constitutional provision, la~~; or adl~linistrative~
regulation of the Mate of Califonnia or the United States. or ~II~y applicable judgment or decree or
any loan agree~met~t. indenture, bond, note, resolution, agreel~~ent or other instrument to ~~rhich it
is a party or to ~t~-}rich it or i~ny of its propel-ty or assets is~ othertivise subject; and, to the hest of the
kno~~~lec(ge of the Purchaser, no event has occrn7-ed and is continuing 1~~hicll with the passage of
time or the giving of notice, or both, would constitute a default or an event of default tinder any
such instrulllent, and the execution and delivery by the Purchaser of the Transaction Doczul~ents
to which it is a party. and compliance by the Purchaser ~~~itl~I the provisions thereof, under the
circumstances contemplated thereby, do not and will not co~~f?ict ~~~ith or constitute on the part of
the Purchaser ~~ breach of or default under any agreement or other instnn-Went to tivhich the
Purchaser IS a paI"ty Or bV tivl11CI1 It IS bound Or any eXl~itnlg Iaw, regLllat1011, COllrt Order Or
consent decree to which the Purchaser is subject.
:~. Represel7tations and Warranties of tie Sel1el-. The Seller hereby represents
arld warrants to the Purchaser, as of the date hereof as follows
(a> Tl~e Seller is a local agency tivithin the meaning of Section 65~5(f} of the
California Governl~~ent Code, with full power and authority to execute and deliver this
agreement and to carry out its teens.
(b} The Seller has full power, authority ar~d legal right to sell and assign the
Proposition lA Receivable to the Purchaser and has duly authorized such sale and assiglrment to
the Purchaser ley all necessary action; and the execution, deli~~ery and performance. by the Seller
of this Agreement has been duly authorized by the Seller by all necessary action.
~cj This Agreement has been, and as of tl~Ie C'losinR Date the ~l3ill of Sale «~ill have
been, chlly executed and delivered by the Seller and, assuming the due authorization, execution
and deliveryy o:f this Ag~~eement by the Purchaser, each of this Agreement and the Bill of Salo
constitutes a legal, valid and binding obligation of the Seller enforceable in accordance ~~-ith its
terms, subject to the effect of banknlptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other similar laws relating to or aff~etillg creditors' righ€s ~~enerallv or the
application of equitable principles in any proceeding, wlhether at lati~~ or iI1 equ:ity~
(d} All approvals, consents, authorizatians, elections and orders of or ~Glin~s or
registrations with any governmental authority, board, agen~~y or commission ha~Ting jurisdictio7~
which would constitute a condition precedent to, or the absence of which «-ould adversely affect,
the sale by the Seller of the Proposition IA Receivable or tl~ie perAnnance '~~~~y the Se~11er of its
obligations under the I:esalution and the TraIlSaCtloll Documents to wlvch it is a party and any
other applicable agree~~nents, have been obtained and are in l:utl force and effect.
(e) Insofar as it would materially adversely affect the Seller's abilit}~ to enter into;
carry out and perforlu its obligations under any or ail of the Transaction Docurne~lts to ~~~hich it is
a party, or consunu~iate the transactions contemplated by the same, the Seller is not in breach of
or default under any applicable constit~~t~ional provision, la,tiv or adminisirati~-e regulation of the
State of Califonlia or the united States or any applicable _iudgn~ent or decree or any loan
a~~~reement, indenture, bond, note, resolution, ag1-eenle~nt or other instnuileut to which it is a party
or to «~hich it or any of its property or assets is othel~~ise subject, and, to the best of the
knowledge of the Seller, n~_~ event has occlu-red and is contisnir~;n~~ ~~~hich with the passage of time
or the giving of notice, or both, «-ould constitute a default or alp event of default under any such
instnu~lent, ancf the adoption of the Resolution and the execution and delivery by the Seller of the
Traiisactiou Documents to rwhich it is a party, and co~uplia;~.lce by the Seller with the provisions
thereof, under the circul~lstances contemplated thereby, do not and will not conflict tivith or
constitute on d~_e part of the Seller a breach of or defaltlt under any agreement or other instnunent
to which the Selier is a party or by which it is bound or any existing law, regulation, co~ut order
or consent decree to which the Seller is subject.
~fj To the best of the knowledge of the Seller, .uo action, suit, proceedinff, inquiry
or investi,~ration, at taw or i_1 egluty, before. or by any court, public board or body, is pendingr or
threatened in any way a;~ainst the Seller affecting the e~isl:er.~ce of the Seller or the titles of its
City Caw~cl members or officers to their respective offices, or seeking to restrain or to enjoin
the sale of the Proposition lA Receivable or to direct the application of the proceeds of the sale
thereof, rn- in any way contesting or affecting the validity or enforceability of any of the
Transaction Documents or any other applicable agreements or anv action of the Seller
contemplated by any of said documents, or in any way contesting the powers of the Selier or its
authority with respect to the Resolutiai~ or the Transac&ion Documents to which it is a party or
any other applicable agrcen~ent, or any action on the part of the Seller contemplated by the
Transaction Documents, or in any way seel.ing to en.}o~in o~r restrain the Seller from selling the
Proposition lA Receivable or ~~~hich if determined adversely to the Seller would have an adverse
effect upon the Seller's abiiity to sell the Propositioi~i lA Receivable, nor to the huotivledge of the
Seller is there any basis therefar_
(g} Prior to the sale of the Proposition IA Receivable to the Purchaser, the Seller
was the sole owner of the Proposition lA Receivable, v~d l-~as such right, title and interest to the
Proposition I ~ Receivable as provided in the Act. From and after the conveyal~ce of the
Proposition 1 A Recei~ able by the Seller to Purchaser on the Closing Date_ the Seller shall have
no right, title or interest in or to the Proposition lA Receivable. Except as provided in this
A~~reement, the Seller has not sold, transferred, assigned, set over or other-~~~-ise conveyed any
right, title or interest of any kind whatsoever in all or ar~~y portion of tl~ie Proposition L~
Receivable, nor has the Seller created, or to the best knt~~~~ledge of the Seller permitted tI~e
creation of, any lien; pledge, security interest or any other encun~~brance (a "Lien") thereoi~_
Prior to the sale of the Proposition IA Receivable to the Purchaser, the Seller held title to the
Proposition lA Receivablo free and clear of any Liens. As of the Closing Date, this Agreement,
to~~ether ti~~itli the Bill oi- Sale. constitutes a valid and absohite sale to the ~3uver of all of the
Sellers ri~~ht, title and interest in and to the Proposition lA Receivable.
6
(h) The Seller acts solely through its authorized officers or agel7ts.
Purchaser.
1,i) The Seller maintains records and books of account separate from those of the
(j) The Seller maintains its respective assets separately from the assets of the
Ptn~chaser (including throe<~h the. maintenance of separate bard: accounts}; the Seller's funds and
assts, and records relating thereto. hay-~e not been and are not commi~igled «~ith those of the
Pm~chaser.
(k) The Seller's principal place of business and chief executive office is located at
~IOt) Grand Aye.. P:U. Bc~~ 71 I, South San Fra~~cisc~, (v:~ ~~~}~ ~.
(1) The aggregate amotu~t of the hlstallment. Payments is reasonably equivalent
~~alue for the Proposition I A Receivable. The Seller aclct~o~~~Ie;iges that the amount payable to or
on behalf of the Purchaser b}~ the State n~ith respect to the Proposition I A Receivable will be in
excess of the Purchase Price and the Initial Amount of ~~he Proposition I A Receivable and
confirms that it has no claim to any such excess amount whatsoever.
f i~1:? The Seller does not act as an agent of tl~~e Purchaser in ally capacity, but
instead presents itself to the public as an entity separate from: tl~~e Purchaser.
(11} The Seller has not guaranteed and shall not guarantee the obligTations of the
PEU~chaser, nor shall it bold itself out or pel-mit itself to be held out as having agreed to pay or as
being Kahle for the debts of the Purchaser; and the Serer has not received nor sha]I the Seller
accept any credit or financing from any Person who is re1yi~~_7g upon the availability of the assets
of the Purchaser in exte~iding such credit or financing. The Seller has not purchased and shall
not purchase any of the Bonds or any interest therein.
(o) All tra]ISaCtlonS between or among the Seller, on the one hand, and the
Purchaser on the other hand {including, «ithout limitation, transactions ~~overned by contracts for
services and facilities, s~lch as payroll, ptuchasing, accounting, legal and personnel services and
office space j, ~~hether existing on the date hereof or enured into after the date hereof, shatI be on
terms and conditions (including, without limitation, teens relating to amounts to be paid
thereunder) which are believed by each such party thereto to be both fair a}_~d reasonable and
comparable to those a~~ailable on an anus-length basis from ;~?ersons «-ho are not off Bates.
(pj The Seller has not, under the provisions of Section 100.06(b) of the California
Revenue and Taxation Code, received a reduction for hardsl~~ip or otherwise, nor has it requested,
made arrangements for, or completed a reallocation or exchange with any other local agency, of
the total amount of the ad valorem property tax revenue reduction allocated to ~~~he Seller pursuant
to Section It)f).(}C(a) of the California Revenue and Taxation Code.
G. Covenants of the Seller.
i a) Tl~e Seller shall not take any action or on,;it to take any action u~hicl~ adversely
affects the interests of the Purchaser ii1 the Proposition l~. Receivable and in the proceeds
thereof. The Seller shall not take any action or omit to take ah~;y action that shall adversely affect
7
the ability of the Purchaser, and any assignee of the Purchaser, to receive payments of the
Proposition 1 A Recei~~~able.
(b j The Seller shall not take airy action ar- 01,~~.iit to take an_y action that would
impair the validity or effectiveness of the Act; nor, without the prior ~~-ritten consent of the
Purchaser or i`~s assi~~nees. agree to any amendi~lent, moc'ification, termialation_ lvaiver or
surrender- of_ the terns of the Act, or waive timely performance or obsen~ar,ee tinder the Act.
Nothin<~ in this agreeme~lt shall impose a duty on the Seller to seek to enforce the Act or to seek
enforcement thereof by others, or to pre~~ent others fi-on~ modifying, tern~inating7, discharging or
i~z~pairing the vahdit}~ or effectiveness of the Act.
~c) Upon request of the Purchaser or its assignee, (i) the Seller shall execute and
deliver such Further instru~Ilents and do such further acts (including being named as a plaintiff in
an appropriate proceeding; as may be reasei~rably necessar~~ or proper to carry out more
efitctively the purposes and intent of this Agreement au~l the Act; and (ii) the Seller shall take all
actions necessary to preser~ e. maintain and protect the title of the Purchaser to the Proposition
1 A Receivable.
(d~! On or before the Closing Date, the Seller shall send (or cause to be sent] an
irrevocable instn~ction to the Controller pursuant to Section GS~~.C(c) of California Goverm~zent
Code to cause the Controller to disburse all payments of the Proposition I A Receivable to the
Trustee, together with notice of the sale of the Proposition lf~ Receivable to the Purchaser and
the assignment of al( or a portion of such assets by the P1.u-chaser to the Tnistee. Such notice and
instztiictions shall be in the form of Exhibit D hereto. The Seller shall not take any action to
revoke or which would ha~,~e the effect of revoking, in ~~-hole or in part, such instnictions to the
Controller. Upon sending such irrevocable instnlction, the Seller shall have relinquished and
v,~aived any cornrol over the Proposition 1 A Receivable, any authority to collect the Proposition
I A Receivable, and any poti~~er to revoke or amend the instructions to the Controller
contemplated by this paragraph. Except as provided in ~ectioii 2(c} of this Ageeement, the Seller
shall not rescind, amend or modify the inst111ction described in the Fist sentence of this
paragraph. The Seller shall cooperate with the Purchaser or its assignee i~1 giving instnictions to
the Controller if the Pru~chaser or its assignee transfers the Proposition lA Feceivable. In the
event that the Seller receives auy proceeds of the Propositio~i IA Receivable, the Seller shall
hoid the same in t~ztst For the benefit of the Purchaser as~d the Tnistee and each Credit Enhancer,
as assi~~nees of the Purchaser, a11d shall promptly relrlit the same to the Tnistee.
(e) The Seller hereby covenants and agrees that it will not at any tii~~e institute
a~_ainst the Purchaser, or join in instituting against the Plucl~aser, any bankrnpt.cy, reorganization,
arrangeiuent, insoh~ency. liquidation, or similar proceeding under any United States or state
banknlptcy or similar law.
(f} The financial statements and books and records of the Seller prepared after the
C(esing Date shall reflect the separate existence of the Purchaser and the sale to the Purchaser of
the Proposition lA Receivable.
{g j The Seller shall treat the sale of the Proposition 1 A Recei~-able as a sale for
regulato~~~ and accounting purposes.
8
~h} From and after the elate of this Agreement, the Seller shall not sell, transfer,
assign, set over or other«~ise convey any ri~ht, title or interest of any kind w~hatsoe~~er in all or
any portion of the Proposition LA :Receivable, nor shall the Seller create, or to the knolvled~~e of
the Seller permit the creation of, any Lien thereon-
?. The Purchaser's Acl:notivled~ment. T]-~e Purchaser acknowledges that the
Pt-oposiiion IA Receivable is not a debt or liability of the Seller, and that the Proposition lA
Recei~~able is payable solely by~ the State from the funds of the Stag provided therefor.
Consequently, neither the taxing poorer of the Seller, nor the filll faith and credit thereof is
pledged to the payment of the Proposition IA Receivable. No representation is made by the
Seller concenlin~ the obligation or ability of the State to male any payment of the Proposition
l~ Receivable Intrsuant to Section l0U.U6 of tl3e Rever-ue and Taxation Code and Section 2.~-5
of article XIII of the California Constitution, nor is any representation made with respect to the
ability of the State to enact any change in the la~~~ applicable to the Transaction Documents
(including without Iimitatiol~ Section lO0.0h of the Revenue and Taxation Code or Section
6t~~.6 of the Government Code). The Purchaser acl:nawledg:es that the Seller has no obligatioTl
~~-ith respect to any offering document or disclosure related a_o the Bonds-
~. Notices of Breach.
(a} Upon disco~~ery by the Seller or the Purchaser that the Seller or Purchaser has
breached any of its covenants or that a-7y of the representations or warranties of the Seller or the
P-_-rchaser are materially false or misleading, in a manner that materially and adversely affects
the value of the Proposition 1 A Receivable or the Purchase Price thereof, the discovering party
shall give prompt written notice thereof to the other party and to the Tn-stee; as assignee of the
Purchaser, who s}~all, pursuant to the Indenture, promptly thereafter notify each Credit Enhancer
and the Rating Age-7cios.
(b) The Seller shall not be liable to t1~e Purchaser, tl~e Tnastee, the holders of the
Bonds, or any Credit Enhancer for arty loss, cost or expense resulting frolr- the failure of the
Trustee, any Credit ~,nhancer or the Purchaser to promptly notify the Seller upon the discovery
b}- an authorized oft~cer of the Trustee, any Credit Enhancer or the Purchaser of a breach of any
covenant or an}~ materially false or ruisleadi~ng representation or E~~arranty contained herein.
9. Liability of Seller; Indemnification. Thee Seller shall be liable in accordance
herewith o~1ly to the exte-1t of the obligations specifically undertaken by the Seller under this
agreement- The Seller shall indemnify, defend and hold harmless the Purchaser, the Trustee and
each Credit Enhancer, as assi-~~nees of the Purchaser, and a:heir respective officers, directors,
employees and agents from and against any and all costs, exI-enses; losses, clail~is; damages and
liabilities to the extent that such cost, expense, loss, cl~~ain~, damage or liability arose out of, or
was imposed upon and- such Person by the Seller's b~~reach of an~~ of its coverants contained
herein or any materially false or -liisleading representation or warralaty of the Seller contained
herein. Not~~~ithstanding ar-vthing to the contrary herein, th-e Seller shall have no liability For the
pa}~ment of the principal of or interest on the Bonds issricd lay the Purchaser.
9
I0. L,imltati011 on Liability.
(al The Seller and any off`ice~r or employee or went of the Seller may rely ire good
Faith on the advice of counsel or on any docu~z~ent of any kind, prima facie properly executed and
submitted by any Person respecting any platters arising ~~ereurfder. The Seller shall not be under
any obligation to appear in, prosecute or defend any legal action regarding the Act that is
unrelated to its specific obligations under this Agreement.
(b} No officer or employee of the Seile_~r shall have any Liability for the
representations, warrantees_ covenants, agreements or other obligations of the Seller hereunder or
in any of the cei-ritieates, notices or agreements delivered pursuant hereto, as to all of which
recourse shall be had solely to the assets of the Seller.
11. The Seller's Acknowledgment. The Se11_er~~ hereby agrees and acknowledges
that the Purchaser intends to assign and grant a security interest in all or a portion of (a) its rights
hereunder and (bj the Proposition lA Receivable, to the Trustee and each Credit Enhancer
pursuant to the Indenture- The Seller fzurther agrees and acknowledges that the Tn~stee, the
holders of the Bonds, and each Credit El>?iancer have re~~ied and shall continue to rely upon each
of the foregoing representations. warranties and covenants, and further agrees that such Persons
are entitled so to rely thereon- Each of file above representations, warranties and covenants shall
survive any assignn7ent and grant of a security interest iii all or a portion of this Agreement or the
Proposition lA Receivable to the Trustee and each Credit Enhancer and shall continue in fail
force and effect, nat~~-ithstanding any subsequent tenilinaton of this Agreement quid the other
Transaction Documents- The above representations, warrantees and covenants shall inure to the
benefit of the Trustee and each Credit Enhancer.
l2. Notices. Ali demands upon or, notices a~~.id communications to, the Seller, the
Purchaser, the Trustee or the Rating Agencies under this Agreement shall be in ~~rritina,
personally delivered or mailed by certified mail, return receipt requested, to such party at the
appropriate notice address, and shall be deemed to have bee:~i duly given upon receipt.
13. Amendments. This Agreement play be amended by the Seiler and the
Puuchaser, with (a) the consent of the Tnistee, (b) the cpnse~nt of each Credit Enhancer, and (c) a
Rating Agency Confiru~atian, but without the consent of any of the holders of the Bonds, for the
purpose of addin~~ any provisions to or changing in any rnailner or eliminating any of the
pra~-isions of this A«reement.
Promptly after the execution of any such. an~iendi~l~lent, the Purchaser shall furnish
writ-ten notification of the substance of such amendment to the Trustee and to the Rating
Agencies.
I4. Successors and Assi~~~ns. This Agreement shall be bindin~~ upon and inure to
the benefit of the Seller, the Purchaser and their respecti,~~e successors and permitted assigns.
The Seller may not assi~~n or transfer any of its rights or obligations under this Agreement
~~ ithout the prior written consent of the Ptu-ehaser. Except as specified herein, the Purchaser nay
eat assi~~r~ or transfer anv of its rights or obligations under this Agrreement without the prior
~z~ritten consent of the Seller.
10
I5. Third Parr Rights. The Tz~ustee and each Credit Enhancer are express and
intended third party beneficiaries under this Agreement. Nothin<7 elpressed in or to tie implied
from this A~}reement is intended to gig-~e, or shall be constn~ed to give, any Person, other than the
parties hereto, the Tnistee, and each Credit Enhancer, and their permitted successors and assigns
hereunder, any benefit or legal or equitable right, remedy or claiii~ under or by virrtue of this
Agreement or under or b}~ virtue of any provision herein.
16. Partial hwalidity. If at any tine any provision of this Agreement is or
becomes illegal, invalid or unenforceable in any respect under the law of any j~arisdictian, neither
the legality, validity or enforceability of the remaining provisions of this Agn~eeme~nt nor the
le~~ality, validity or enforceability of such provision undler t11e law of any other jurisdiction shall
in anv way be affected or impaired thereby.
17. Counterparts_ This Agreement play ve executed in any number of identical
counterparts, any set of a-inch signed by a1I the parties hereto shall be deemed to constitute a
complete, execi.~ted original for all purposes.
1 ~. Entire A<_~-eement. This Agreement sets forth the entire ~~understandillg and
agreement of the parties ~~-ith respect to the subject matter hereof and supersedes anv and. all oral
or written agreements or understandings between the parties as to the subject n~iatter hereof.
19. Gov~rni~i~r La«_. Ti1is A~~-e~ement slhall be goy-~ei-~~ed by end cc~nsntiled i~~
accordance with the laws ol~the State of California.
IN WITNESS WHEREOF, the Seller and the Purchaser hive caused this
Agreenzexlt to be drily executed as of the date first «-ritten above.
CITE" 0}F'SC>t~1'I'H S_~~T FRANCISCO, as Seller
Authorized Officer
CALIFOR~'`~~If~ STATEWIDE COh~IM~[Jlv'ITIES
DEVELyOPM~~~ENT AUTHORITZ', as Pw-chaser
Bv:
A~ithoi-ized SiUllato~y
i~. voverning Law. This Agreement shall be governed by and construed ill
accordance with the 1_aws of the State of California.
IN WITivESS WHEREOF, the Seiler and the Purchaser have caused this
Agreement to be duly e:Lec~aed as of the date first written above.:.
CITY OF SOUTH SAN FRANCISCO, as Seller
~1
~ ` Au'tho ized Officer
CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPivIENT AUTHORITY, as Purchaser
sy:
Authorized Signatory
12
EkHIBIT A
DEFI`1TI4~S
F=or all pul~~oses of this Agreement, except as otherwise expressly provided herein
or unless the context other~~~ise requires, capitalized terms not otherwise defined herein shall
have the meal~ities set forth beloti~~.
"Act" ~lleans Chapter l4XXX~ of the California Statutes of X009 (Assembly Bill
No. 1 ~), as amended.
`Bill of Sale"' has the meaning given to that terra in Section 2(b;~(iij hereof.
`'Closing Date" means the date on which the Bonds are issued. The Closing Date
is expected to be November l9, 2009, but the Purchaser may change the Closing Date by
providing e-mail notification to _ji~n_steele~cts f.1~et not later than one day prior to the Closing
Date.
"Cantroller" means the Controller of the State.
"County Auditor" means the auditor or auditor-controller of the cow~ty within
~~~hich the Seller is located.
"Credit Enhancer" means any municipal bond insurance company, bank or other
financial institution or organization which is performing in all material re-sects its obligations
under any Credit Support Instrti~ment for some or all of the Fonds.
"Credit Support Instrument" means a p~ol~icy of insurance, a letter of credit, a
stand-by purchase agreement, a revolving credit agreen~ient or other credit an~angement pursuant
to which a Credit Enhancer provides credit or liquidity support with respect to the payment of
interest, principal or purchase price of the Bonds_
"Initial Amount" means, with respect to the Proposition IA Receivable, the
amount of property tax revenue reallocated. away front the Seller pl~irsuant to the pro~~isions of
Section 100.00 of the Revenue and Taxation Code, as certified by the County Auditor pursuant
to the Act.
~`Instalh~~ent Payments" have the meaning set firth in Sectiail 2(a}.
"Payment Dates" have the meaning set forth in Section 2(aj.
"Pricin~7 Date" means the date on whichthe Bonds are sold. she Pricing Date is
expected to be November 10, 2009, but the Purchaser nay change the Pricing, Date by providii~lg
e-mail notification to jim.steele~cr~ssf.~~et not Inter than one day prior to the Pricing Date.
"Principal Place of Business" means. with respect to the Seller, the location of the
Seller's principal place of bEi~iness and chief executive ofkice located at 4C)O Gra~zel ~~-~e., P.t~
Box -71.1. South San Fraizciscc, CA ~40?3.
-1
"Proposition 1 A Receivable" has the Inea~lin~~; set forth in Section 2(a}.
"Purchase Price" means an amount equal to the Initial Amount.
"Rahn<~ Agency" means any nationally r~eco~rnized rating agency then providing
or nlaintainin~r a rating on the Bonds at die req~iest of dl~ Purcl~iaser.
"Rahn<~ Agency Confirmation" means ~vritiefl confin7lation from each Rating
Agency that any proposed action ~~-ill not, in and of itself, cause the Rating Agency to lover,
suspend or widldra~~~ the rating d1et1 assig~zed by such Ratin~~; Agency° to any Bonds.
"Resohltion" means the resolution adopted by t.~e City Cu~l~neil approving the sale
oI'the Proposit-ion ] ~ Receivable.
`State" meals dle State of California.
"Transaction Counsel" means Orrick, He~~ingte~n & Sutcliffe LLP.
"Transaction Doc~unents" mean this Agreement, the Bili of Sale, the Indenture,
the Bonds and die In-evocable Inst~zutious For Disbui-~emen~~ of Proposition IA Receivable of
Cite o i` South San Francisco, dated as of the Closing Date.
A-?
LYI~IBIT B1
~®
Dated: Pricing Date
California Statewide Coml~zunities Development Authority
Sacran~e~nto, California
Wells Fargo Bunk, National Association
L.os An~~eles_ California
Re: Sale o[' P?~oUosition lA Rece3vaf~le
Ladies & Gentlemen-
r...""`.vy.~
`°t~(I h~r'This Office ]gas] acted as counsel for the .ity of South Sa~1' FIa~1c~~co (the
"Seller") in connection with the adoption of that certain resolution (the "Resolution"} of the City
t~uncl of the Seller (the "Goven~ing Body"} pursuant ~o ~~hi~ch the Seller authorized the sale to
the Califoniia Statetivide Coizlrliurlities Development A~nthority (the "Puurchaser"} of the Seller's
"Proposition 1A Receivab?e", as defined u1 and prusu~int to the Purchase and Sale A~reelnent
dated as of Noveiuber l , 2(11)9 (the "Sale Agreement") between the Seller and. the Purchaser. In
connection ~~~ith these transactions, the Seller has issued certain Irrevocable Instnlctions For
Disbursement of the Sellzr's Proposition IA Receivable to the Controller of the State of
California (the "Disliursei~zent Instnletions") and a Bill of Sale and Bringdolvn Certificate of the
Seller (the "Fill of Sate" and, collecti~rel~r with the Sale Agreement and the Disbursement
Instn~ctions, the "Seller Documents").
y~Tnless the context othe~-~wise reduires, capil.al_ized terns used but not otherwise
~°~.
defined herein shall have the meanin«s given to such tel~nls in the Sale A<~reement ~~I~We] have
examined and are familiar ~~~,~ith the Seller Documents end with those documents relating to the
existence, organization, and operation of the Seller, the ~ad~~~ption of the R_esoluiio~n, azld the
execution of the Seller Documents, and have satisfied o~rse~lves as to such oth~°r matters as I/wed
deei~l ~iecessarv ill order to render the following opinions. A.s to paragraphs numbered 3 and 4
below-, ~h~uej ha. e relied as to factual matters on the representations and warranties of the Seller
contained in the Sale A~_>reement.
~~. Based upon the fore~~;oing, and subject to the lil~~itations and qualifications set
forth herein,~[Ir;~ve] are of the opinion that:
Bl-I
1. The Seller is a local agency, withi~l the ~.zieaning of Section C5~5(f} of tie
California Government Code. The Governing Body is the governingbody of the Seller.
?. The Resolution was duly adopted at a meeting of the Governing Body,
which 1~-as called and held pursuant to law and with all public notice required by Iaw, and at
which a quorum was present and acting throughout, and the Resolution is in fill force and effect
and has not been modired. amended or rescinded since the date of its adoption.
~. To the best of my~iour] lu~o~~~ledge, no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by an}% court, ~~ublic board or body, is pending ar
threatened in any way against the Seller (i) affecting the exi:>tence of dle~ Seller ar the titles of its
Governing Body members ar officers to their respective afF.ces; (ii} sect<ing to restrain or to
enjoin the sale of the Proposition lA Receivable or to direct the application of the proceeds of
the sale thereof; or materially adversely affecting the sa1'~e of tl~ie Proposition lA Receivable; (iii)
in any way contesting or affecting the validity or enfo~~ceab~ility of the Resolution, Seller
Documents or any other applicable agreements or any fiction of the Seller contemplated by any
of said doctunents; or (iv) in any way contesting the powers of the Seller ar its authority with
respect to theResolution or the Seller ~Docuinents or any a~.her applicable agreeluent, or any
action on the part of the Seller contemplated by ally of said docwnents.
~.,,.
=~. To the best of m}~~lour] lcno«~~ledg;e, prior to the sale o~f the Proposition lA
Receivable to the Purchaser, the Seller had not sold, transferred; assigned; set. over or otherwise
conveyed any right, title or interest of any kind whatsoever in alI or any portion of the Seller's
Proposition IA Receivable, nor had the Seller created, or permitted the creation of, a~iy Lien
thereon.
~. The Seller has duly authorized end executed the Seller Dociu7lents and,
assuming the due authorization execution and delivery of the Sale Agreement by the Purchaser,
each Seller Document will be Iegal, valid and binding against the Seller and enforceable against
the Seller in accordance ~~-ith its terms, except as enforcement nay be Limited by bankntptcy,
insolvency, reorganization, fraudulent conveyance, ma~atoriurzi or la~~-s relating to or affecting
creditors' rights, and the application of equitable principles and the. exercise oil judicial discretion
in appropriate areas.
Na opinion is expressed concerning tl~e obligation or ability of the State of
California to make any payment of the Proposition IA Recei~-~able~ pt~rsuvit to Section 10~.t~f of
the Revenue and Taxation Code and Section 25.5 of Article :VIII of the California Constitution,
nor is ally opinion expressed with respect to the ability of tl-:~~e State to enact any change in the
la~~~ applicable to the Seller Documents ~inehiding, urithout limitation, Section I00.(_~6 of the
Revenue and Taxation Code or Section 655.6 of the Government Code). Purthenllore, [I/we]
express no opinion ~ s to the value of the Proposition l A Receivable or as to any IegaI or
equitable remedies that may be available to any person sho~dd the Proposition lA Receivable
have little or no value. Na opinion is expressed with respect to the sale of Bonds by the
Purchaser.
Bl-2
The legal opiwon set fartll herein is ~int~nded for the information solely of the
addressees hereof and for the purposes contemplated b~ the ~~ale Aareement_ The addressees
may nat rely on it in connection with any transactions other rhan those described herein, and it is
loot to be relied upon by any other person or entity, or for' any other purpose, or quoted as a whole
ar in part, or other~~-ise refen-ed to, in any document, ar to be f led with any governmental or
adminisn-atiti-e a~~ency other than the Purcliase~r or with any other person ar entity for any purpose
r,~;.,
~~~ithout ~~lourJ prior «~1-itten consent. In addition to ~~~he addressees hereof, each Credit
Enhancer and the underwriters of the Bonds may rely upon~~ this legal opinion as if it were
addressed to the~m_ ~>`q~'e] do not undertake to advise yc~u of r~latters that play come to [my/our]
attention subsequent to the date hereof that may affect the op~n~.ons expressed here~m.
Very truly yours>
~~
~ ~ ~t
Seller's Ca~iiisel
B1-,
EXHIBIT B2
~~~~1~~ ~~ ~~~~i~~9~~
t~
Dated: Closing Dalte
alifornia Stateu~~ide Communities Development Atttharity
Sacramento, California
Wells Fargo Bank, ~iational association
Las .An~~e~les, California
Re: Sale ofPropos~ition lA ~Receivabl~(Brinado~~~n Opiniari'i
Ladies & Gentlerlen:
Pursuant to that certain Purchase and Sale Agreement dated as of ~Ioveniher 1,
?C}~9 (the "Sale _~greement") between the (.it}~ of South.`>an F~~ancisLv (tl-re "Seller") and the
California State~~-id~e Conilnunities Development Apthority (tl~e "Purchaser"1, this Office
delivered an apinion (the "Opinion") dated the PriciU~g Date as counsel far the Seiler in
co~tilectio~1 with the sale of the Seller's Proposition lA Receivable (as defined i11 the Sale
Agreement); tl~e execution of dacuments related thereto kind certain other related matters.
Capitalised te1-rns used but not defined Herein shall have the meanings given to
such teens in the Sale Agreement.
I canlin~~ that 3~~ou may continue to rely tppon the Opinion as if it «-ere dated as of
the date hereow~. Each Credit Enhancer and the under~,vriters of the Bonds mayy rely upon this
legal opinion as if it were addressed to them. This letter is delivered to you pursuant to Section
?fib}(ii)(1} of the Sale .A~~reenient.
~~ _
Very truly yours,
+:
E f O ` m~
SE;ller's Counsel
B?-1
EXHIBIT Cl
CLERK'S CERTIFICATE
CERTIFICATE OF THF,
CIT~J CLERIC OIL'
CITY OF SOUTH S~~.N I~RANCIS~;Q, CALIFORNIA
Dated: Pricing Dane
The undersigned City Clem of the City of South 5a~~ Francisco (the "Seller"}, a local
agenc~~ of the State of California within the meaning of ~~ection C~S~(f) of the California
Goy-eirs~ent Code, does Hereby certify that the foregoing is a full, tnie acid con-ect copy of
Resolution No. 9I-2009 _ duly adopted at a re"g~.~Iat r~~eetin~ of the City Co~.mci~ of sai d
Seller duly and legally held at the regular i~~eeting ~ place thereof on the 2gth. day of
~'?ctober , 2009, of Which sleeting all of th~~ menihers of said City. Caunc~ had due
notice and at which a duonnu was present and acting dhroughout, and that at said meeting said
resolution was adopted by the following vote:
AWES: ~ounci lmembers Pedro Gonzalez, Ri ch~.rd 4. Garbari no, and Kevin Mul 1 i n,
Vice Mayor Mark Addiego and Mayor K~.ry~l I~iatsumoto
NOES: ~1one
ABSENT: done
ABSTAIN: 'done
I do hereby further certify drat I have carefillly compared. the sa~~ie with the original
minutes of said meeting ors file and of record in il~y office and drat said resolution is a fizll, true
~u~d col~~ect copy of the original resolution adopted at siaid ~meeti~ng and entered in said minutes
and that said :resolution has not been amended, mod~Iied or rescinded sine the date of its
adoption and the same is now in full force and effect.
I do hereby further certify that an agenda of said rne~°ting was posted at Ieast 72 hours
before said meeting at a location in the City of South Stan Fra~~cisco, California freely accessible
to members of the public, and a brief general description of said resolution appeared on said
a~=enda.
Capitalized terms lrsed but not defined herein shall have the meanings given to such
terms in the Purchase and Sale Agreement, dated as o~ Nov~ezriber 1, 2009, between the Seller
and the California Statewide Communities Development Authority.
WITNESS by i~iy hand as of the Pricing Date.
t irv~~ ~~,~~rl~ t~~the C'ttv.~i~ Soui,r~ Stan
~ ~ - ~:_-~
ITT anc>is~ o, California
CI-1
EYHIBIT C2
SEELLER CERTIFICATE
SELLER CERTIFICATE
Dated: Pricing Date
We, the undersigned officers of the Cit}~ of Sout(1 Sa~~ 1~'r~tncisco (the "Seller"), a
local agency of the State of California within the meaning of Section 6~55(fi of the California
Govensivent Cede, holding the respective offices hereitl below set opposite our signatures, do
hereby certify that oil the date hereof the following; doc~.uz~ents (the "Seller Transaction
Documents") were officially executed and delivered by the Authorized Cuff cer ~r Officers whose
names appear on the executed copies thereof, to wit:
Dociu~~ent
1. Purchase ~ nd Sale Agreement, dated as of November 1.: 20U9 (the
"Sale rlgreelnent"), between the Seller a71d the C~liforn~.ia
Statewide Communities Developi~~lent Authority ~the~ "Purchaser"}
2. Irrevoc~ible Instnictions For Disbursement of Seller's Proposition
IA Receivable to the Controller of the State of C~lifon~ia, dated
the Closing Date.
3. Bill of Sale, dated the Closing Date.
Capitalised terns used herein and not defined herein shall have the meaning given
such te1~~IS in the Sale Agreement.
~~'e htt-ther certify as follows:
At the time of signin~~ the Seller Transaction Dgcurnents and the other dociuuents and
opinions related thereto, we held said offices, respecitively, and we now hold the same.
2- The representations and ~~~arranties of the Seller contained in the Seller Transaction
Documents are true and correct a of the date hereof in ~~~Il material respects.
~. The City .Council duly adopted its resolution (the "Resolution") approving.; the sale of the
Seller's Proposition 1 A Receivable at a meeting of the Cit}~ Cotil~cil which was duly called
and held pursuant to Iaw with all public notice req~iired by law and at which a quorum was
present and acting ~~-hen the Resolution a-as adoptedl, artd such Resolution is in fiill force and
effect and has not been amended; modified, supplemented or rescinded.
C~-1
I~T~~l1~e_ Oflictal Title
B~~Yy ~-3. ~;agel, Cit}r M~ila~er
Jil~ Steie, Finance. Di3-ectgr
Martti ~'al~ Dil~~n_ Assistant City Manager
S i ~l~attlr.~__,
,~'',~ ~
~`x; i
I ~iEREI3Y CERTIFY that the signata~res of the officers named above are
Rel"ltilne.
I~ateG: PI"1Cll1~ Date
~:
~~ ~;,
~~~ '_ -~~i't~- ~`~i~~,k al tile. ~'~t~, o1:So~~il~ San
,-
Fral~c~~~,~, ~ a~~~la, r,
C? -?
EXHIBIT C3
BILL OF SALE AND BRI~'GI~O«'1 CERTIFICATE
BILL OF SALE AND BRINCTDO~~'N CERTIFICATE
Pursuant to ienms and conditions of the Pnirchase Ind Sale Agreemment (the "Sale
Agreement"), dated as of November I, 2009, betweea~ the undersigned (the "Seller'] and the
Califon~ia State~~-ide Communities Development A,~uthority (the "Purchaser"), and in
consideration of the obligation of the Purchaser to pay anc~ deliver to the Seller the Purchase
Price (as defined in the Sale Agreement}, in two equai7 installment paymen1a to be made on
January I>, 2010, and Nlay 3, 2010 (collectively, the "P'aymeilt Dates"), tl-re Seller does hereby
(.a) transfer, grant, bargain. sell, assign, convey, set over'~ancl deliver to the Purchaser, absolutely
and not as collateral security, without recourse exceipt as expressly provided i» the Sale
Agreement, the Proposition lA Receivable as defined i~ the Sale Agreement (the "Proposition
1 A Receivable"), and (b) assign to the Pln-chaser, to the ~xte~nt permitted by la~v (as to which no
representation is made}, all present or futlu-e rights, if airy, of the Seller to en:Force or cause the
enforcement of payiment of the Proposition 1 A Rece~~ival~le pursuant to tl-ie Act and other
applicable law. Such transfer, grant, bargain, sale, k~ssignn~ent, conveyance_ set over and
delivery is I~ereby expressly stated to be a sale and, pu~~suant to Section G~88.G(b) of the
California Government Code, shall be treated as an absdlute~ sale and transfer of t1~e Proposition
IA Receivable_ and not as a grant of a security interest b}~ the Seller to secure a borrowing.
Seller specifically disclaims any right to rescind the .Agreement, or to assert that title to the
Proposition IA Receivable has not passed to the Purchlaser, should Purchaser fail to make the
installment payments in the requisite amounts on the Pa5~a~lent Dates.
The Seller hereby certifies that the representations and warranties of the Seller set
forth in the Certificate of the City Clerk dated. the Pricing Date, d1e Seller Certificate dated dated
the Pricing Date and in the Transaction Documents to '~~hich the Seller is a party are tale and
correct in all material respects as of the date hereof (except for such representations and
warranties made as of a specified date, which are tnle alnd rorre~ct as of such date). Capitalized
terms used but not defined herein shall have the me~inings given to such terms in the Sale
A~~reement_
Dated: Closing Date
+:'I'T~' OF S(=)t FH SAN
?~IZ_~NCISCO
~,~
~; ~-~- ~.
By i
rAuthorized Officer
C3-l
EkHIBIT D
IRRE~~OCABLE I~'~S7~I2UCTIOI~S TO CONTROLLER
IRREVOCABLE INSTRUCTIONS FQR DI.~BURSEMENT
OF PROPOSITION IA RECEIVABLE OF
CITY OF SOL`TH SAN FR.4i~C`ISC`C3
Dated: Closin6 Date
Office of the Controller
Stag of Califo~~iia
P.O. BoY 9428`0
Sacramento, California 9=I?~U-572
Re: Notice of Sale of Proposition IA k~ecE~,ivable by the City ofSonth-Sah
Fralci5cg-a1~d Whim Instnlctions, Infor~i~ation Form
Dear Sir or Madam:
Pt1rSClailt to Section 6588.6(c) of the California. Government Code, City o~f St~E~th
Sun Francisco (the "Seller";) hereby notifies youu of the isale b:y Seller, effective as of the date of
these instructions written above, of all right, title aipd interest of the Seller in and to tale
"Proposition IA Receivable" as defined in Section 658'~5(g} of the California Govei7ln~ent Code
(the "Proposition lA Receivable"); namely, the right to payrlnent of moneys due or to beco7ve
due to the Seller pursuant to Section 25.>(a}{~1)(B~}i(iii) of Article XIII of the Califon~ia
Constitution ar~d Section 100.0< of the California Reveixue antl Taxation Code.
By resoluiio~n, the Seller's .City Council ~uth~orized tl~e sale of the Proposition 1A
Receivable to the California Statewide ConUnunities I~e~~°elopment Authorit}~ (the "Purchaser"}
pursuant to a Purchase and Sale Agreement, dated as of November 1, 2009 the "Purchase and
Sale Agreement") and a Bill of Sale, dated the Closing -~ate (~as defined in the Purchase and Sale
Agreement). The Proposition lA Receivable has beetn pledTed and assigned by the Purchaser
pursuant to ail Indenture, dated as of November L 200 (the "Indenture") bet~,veen the Purchaser
and Wells Far<~o Bank, National Association, as Trustee (the `'Trustee"j.
The Seller hereby in~evocably requests and directs that, con~Emencin~ as of the
date of these instructions written above, all pavment5 of the Proposition lA Recei~-able (and
documentation related thereto be i~lade directly to W~IIs Wargo Bank; National Association, as
Trustee, in accordance with the wire instn~ctions and bank routing infon.lation set forth below.
Please note that the sale of~ tJre P~rol osilio~7 IA Rec•ei~~al~le l>>~ tl~e Seller is
ir1•ei~occrhle a~trl that: (i} the Seller has nu pvfs~er to rctvoke or cr~tle~rcl these irrstrr~cti~lrls at ar~>>
tine; (ii) the Purchaser shall Irrr~~e the poi~~er to revk~he or• arnenrl these instructions only if
there are no dotes of ~ the Purchaser outstan~lin~ rrnrl'et• the fncle~lture ~u~trl the Inrlentrrre has
beet~~ ~lischar,e~l; rrfr~l (iii} so lo~t~ as the Irt~~letltrtre lots ~zot ~5eeta rlischargerl, those insiructio~rs
D-1
cal~r7ot he revoked or amen~lc~l by the Purclrrrser H~ith~~lrct the consent of~the Trustee. ,Sl~zoulrZ
t~IL' ptfl"CJtCtSL'T, ~IOit'L'1'L'1', C~t'ZiTe1' U Tt'1"iltell 110ttCe tO the O~~~Ce Of f~l-2 CO)7fYUllef" SICIITTl~ lftllf:
(u) the Seller f~iilerl to tlieet the rcrluireme~zts set forth'irt the Pr~rchctse rv7~! ,Sclle Ag~•eeme~at;
(h) the Pirrch~rser hus not it~aive~l such re~~irirenre~its; ~rt~cl (~~) tl~e Pnrch~tser hr~s Prot purchr~se~l
the Proposition 1,4 Receiv~ihle as cr resz~lt of the circan~~st~f~ices ~leserihecl in (~~) rrn~l (h} aUove,
the~t~ these ijistructions slrnl! be arrto~tiaticctlly rescinded cn~~rl the Seller shall a~crisi he esr~titlerl
to receive «ll prrytrreni of moneys due or to beco~r2e flue tv the Seller pur~sucrnt to Section
Z~.S(a)(1)(B)(iii) of ,Article ~l'III of the California C~~nstitr,rtion cmd Sectiot~i 100.06 of tl7e
Cnlifor~nin Rei>c~nre rrnd 7~nsatio~i Cole.
Back Name: Z~'ells Faro Bank, N.A.
Belk ABA Routing ~_: 1? 1 OOU~'4~
Ba~1k Account ~~: OOO10 ~~377
bank Accoul~t Name: Corporate Tnlst Clearing
Further Credit To.- CSCDA Proposition IA Bends
Bai1k Address: 707 Wilshire Blvd., 17th Floor
MAC E2~ 1 ~-176
Los ,Angeles, CA 90U I7
Baal. Telephoner: (^13} 614-~3~3
Bank Contact Person: Robert Schneider
Please do not hesitate to call the undersi~necf if you have any ciuestions regarding
this transaction. ~I'hanl: you for your assistance i11 Phis natter.
Very tnily yours,
C:"ITT OF COL TI I SAN ~'R~~!CISCO
~~' `e = ~.~t~c''~v ~~~_
I3y"_ e---~- - -
f,~' .Authorizes Officer
:,
~-?
EYHIBIT E
ESCIZO«' IITSTRUCTIO\ LETTER
ESCROW INSTRUCTION; LETTER
c~~
R -
California Statewide Conu~lunities Development Authority
1100 K Street
Sacramento, CA 9 ~ ~ 1
Re: Proposition lA Receivable FinanainU
Dear Sir or Madar~l:
The City; of South San Francisco (thy "Seller") hereby notifies v_ ou of its
a,~rreement to participate in the California Statewide.'. Comnnuiities Development Authority
Proposition lA Receivable Financi~ig. By adoptidn of a resolution {the "Resolution")
authorizing the sale of its Proposition lA Receivable, the Seller's City CoEU~cil has agreed to sell
to the California Statei~~ide Comnnmites Development Authority (the "Pus-chasea''); for a
purchase price that meets the conditions set forth in the :EZesolution, all of its right, title and
interest in the Proposition 1 A Receivable.
Enclosed herewith are the following documents which have bee~i duly approved
and executed by the Seller and which are to be held in escrow by Orrick; Herrington &
Sutcliffe LLP, as transaction co~nlsel ("Transaction Counsel"), as instructed below:
I. certified copy of the Resoh~tion, together with a certificate of the City .:Clerk,
dated tl~e Pricing Date,
?. the Seller Certif cite, dated the Pricing Date;
~- the Opinion of Seller's Cotulsel, dated thf. Pricing Date;
4. the Opinion of Seller's Counsel (bringdo~;vz~ opinion}, dated the Closing Date;
~. the Purchase and Sale Agreement, dated as of November I , ?009;
6- the Bill of Sale and Bringdown Certificate, dated the Closing Date; and
7. the I7-revocal~le Instructions to Contralle~-, dated the Causing Date-
The foregoing docurlents are to be held in escrow by Transaction Counsel and
shall be delivered on the. Closing Date (as defiined in the Purchase and Sale Agreement.:),
provided that such Closinu Date occurs on or before December 31, ?009.
E-1
Should (i) the Closing Date not occur on~, or berl~ore Dece~u'uer 31, ?009, or (ii)
Trv~saction Counsel receive prior to the Closing Date wi~~ittel~ notiCcation lroi~,a Seller or Sellers
Counsel stating, respectively and in brood faith, that tl~e representations made in the Seller's
Certificate are not tnle Znd accurate, or the opinions set forth in the Opinion of Seller's Counsel
are not valid, in each case as of the Closing Date and prop-ided that the Purchaser n1ay, in its sole
discretion, choose to ~~aive receipt of such representation or opinions, then this agreei~lent shall
tenllinate and Transaction Counsel shall destroy all of the enclosed documents.
Very truly ypur~>,
CITY ~F S~OIITH 51~ F~.=~iLTCISC(J
;~~: ,
By: -~ -
A_utho7ized Officer
Enclosures
cc: Orrick, ~E~en-ington ~ Sutcliffe LLP
E-~'