CONTRACT 4009 Other40 " <- ,
CITY OF EL SEGUNDO, CALIFORNIA,
as Seller
and
CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY,
as Purchaser
PURCHASE AND SALE AGREEMENT
Dated as of November 1, 2009
E -1
TABLE OF CONTENTS
Page
1. DEFINITIONS AND INTERPRETATION ....................................... ............................... 2
2. AGREEMENT TO SELL AND PURCHASE; CONDITIONS PRECEDENT ................ 2
3. PURCHASE PRICE, CONVEYANCE OF PROPOSITION IA RECEIVABLE
AND PAYMENT OF PURCHASE PRICE ....................................... ............................... 3
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER ..........................4
5. REPRESENTATIONS AND WARRANTIES OF THE SELLER .... ............................... 5
6. COVENANTS OF THE SELLER ...................................................... ............................... 7
7. THE PURCHASER'S ACKNOWLEDGMENT ................................ ............................... 9
8. NOTICES OF BREACH .................................................................... ............................... 9
9. LIABILITY OF SELLER; INDEMNIFICATION ............................. ............................... 9
10. LIMITATION ON LIABILITY ....................................................... ............................... 10
11. THE SELLER'S ACKNOWLEDGMENT ....................................... ............................... 10
12. NOTICES ............................................................................................ .............................10
13. AMENDMENTS .............................................................................. ............................... 10
14. SUCCESSORS AND ASSIGNS ...................................................... ............................... 10
15. THIRD PARTY RIGHTS ................................................................. ............................... 11
16. PARTIAL INVALIDITY ................................................................. ............................... 11
17. COUNTERPARTS ........................................................................... ............................... 11
18. ENTIRE AGREEMENT ................................................................... ............................... 11
19. GOVERNING LAW ......................................................................... ............................... 12
EXHIBITA — DEFINITIONS .................................................................... ............................... A -1
EXHIBIT B 1— OPINION OF SELLER'S COUNSEL ............................ ............................... BI-1
EXHIBIT B2 — BRINGDOWN OPINION OF SELLER'S COUNSEL .. ............................... B2 -1
EXHIBIT C 1 — CLERK'S CERTIFICATE .............................................. ............................... C 1 -1
EXHIBIT C2 — SELLER CERTIFICATE ................................................ ............................... C2 -1
EXHIBIT C3 — BILL OF SALE AND BRINGDOWN CERTIFICATE . ............................... C3 -1
EXHIBIT D — IRREVOCABLE INSTRUCTIONS TO CONTROLLER . ............................... D -1
EXHIBIT E — ESCROW INSTRUCTION LETTER ................................. ............................... E -1
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT, dated as of November 1, 2009
(this "Agreement "), is entered into by and between:
(1) CITY OF EL SEGUNDO, a local agency of the State of California within
the meaning of Section 6585(f) of the California Government Code (the "Seller "); and
(2) CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT
AUTHORITY, a joint exercise of powers authority organized and existing under the laws of the
State of California (the "Purchaser ").
RECITALS
A. Pursuant to Section 25.5 of Article XIII of the California Constitution and
Section 100.06 of the California Revenue and Taxation Code, local agencies within the meaning
of Section 6585(f) of the California Government Code are entitled to receive certain payments to
be made by the State of California (the "State ") on or before June 30, 2013, as reimbursement for
reductions in the percentage of the total amount of ad valorem property tax revenues allocated to
such local agencies during the State's 2009 -10 fiscal year, which reductions have been
authorized pursuant to Sections 100.05 and 100.06 of the California Revenue and Taxation Code.
B. The Seller is the owner of the Proposition IA Receivable (as defined
below) and is entitled to and has determined to sell all right, title and interest in and to the
Proposition IA receivable, namely, the right to payment of moneys 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 Revenue and Taxation Code, in order to obtain money to fund
any lawful purpose as permitted under the applicable laws of the State.
C. The Seller is authorized to sell or otherwise dispose of its property as the
interests of its residents require.
D. The Purchaser, a joint exercise of powers authority organized and existing
under the laws of the State, has been authorized pursuant to Section 6588(x) of the California
Government Code to purchase the Proposition IA Receivable.
E. The Seller is willing to sell, and the Purchaser is willing to purchase, the
Proposition I Receivable upon the terms specified in this Agreement.
F. Pursuant to its Proposition IA Receivable Financing Program (the
"Program "), the Purchaser will issue its bonds (the "Bonds ") pursuant to an Indenture (the
"Indenture "), between the Purchaser and Wells Fargo Bank, National Association, as trustee (the
"Trustee "), and will use a portion of the proceeds thereof to purchase the Proposition IA
Receivable from the Seller.
G. The Purchaser will grant a security interest in such Proposition IA
Receivable to the Trustee and each Credit Enhancer to secure the Bonds.
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AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
1. Definitions and Interpretation.
(a) For all purposes of this Agreement, except as otherwise expressly provided
herein or unless the context otherwise requires, capitalized terms not otherwise defined herein
shall have the meanings ascribed to such terms in Exhibit A attached hereto and which is
incorporated by reference herein.
(b) The words "hereof .. "herein," "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; section and exhibit references contained in this Agreement are
references to sections and exhibits in or to this Agreement unless otherwise specified; and the
term "including" shall mean "including without limitation."
(c) Any agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such agreement, instrument 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
instruments incorporated therein; and any references to a Person are also to its permitted
successors and assigns.
2. Agreement to Sell and Purchase; Conditions Precedent.
(a) The Seller agrees to sell, and the Purchaser agrees to purchase, on the Closing
Date, for an amount equal to the Purchase Price, all right, title and interest of the Seller in and to
the "Proposition IA receivable" as defined in Section 6585(g) of the California Government
Code (the "_Proposition IA Receivable "), namely, the right to payment of moneys 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 Revenue and Taxation Code. The Purchase
Price shall be paid by the Purchaser to the Seller in two equal cash installment payments, without
interest (each, an "Installment Payment" and, collectively, the "Installment Payments "), on
January 15, 2010, and May 3, 2010 (each a "Payment Date" and, collectively, the "Payment
Dates "). The Purchaser shall pay the Purchase Price by wire transfer pursuant to wire
instructions provided by the Seller to the Trustee by e -mail to john.deleray @wellsfargo.com or
by facsimile to 213 -614 -3355, Attention: John Deleray. If wire instructions are not provided to
the Trustee (or if such wire instructions are invalid) payment will be made by check mailed to
the Seller's Principal Place of Business.
(b) The performance by the Purchaser of its obligations hereunder shall be
conditioned upon:
(i) Transaction Counsel receiving on or before the date the Bonds are sold
(the "akin Date "), to be held in escrow until the Closing Date and then
delivered to the Purchaser on the Closing Date, the following documents
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applicable law. Such transfer, grant, bargain, sale, assignment, conveyance, set over and
delivery is hereby expressly stated to be a sale and, pursuant to Section 6588.6(b) of the
California Government Code, shall be treated as an absolute sale and transfer of the Proposition
I Receivable, and not as a grant of a security interest by the Seller to secure a borrowing. This
is the statement referred to in Sections 6588.6(b) and (c) of the California Government Code.
4. Representations and Warranties of the Purchaser. The Purchaser represents
and warrants to the Seller, as of the date hereof, as follows:
(a) The Purchaser is duly organized, validly existing and in good standing under
the laws of the State of California.
(b) The Purchaser has full power and authority to enter into this Agreement and to
perform its obligations hereunder and has duly authorized such purchase and assignment of the
Proposition I Receivable by the Purchaser by all necessary action.
(c) Neither the execution and delivery by the Purchaser of this Agreement, nor
the performance by the Purchaser of its obligations hereunder, shall conflict with or result in a
breach or default under any of its organizational documents, any law, rule, regulation, judgment,
order or decree to which it is subject or any agreement or instrument to which it is a party.
(d) To the best of the knowledge of the Purchaser, 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 way against the Purchaser affecting the existence of the Purchaser
or the titles of its commissioners or officers, or seeking to restrain or to enjoin 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 validity or enforceability of any of the
Transaction Documents or any other applicable agreements or any action of the Purchaser
contemplated by any of said documents, or in any way contesting the powers of the Purchaser or
its authority with respect to the Transaction Documents to which it is a party or any other
applicable agreement, or any action on the part of the Purchaser contemplated by the Transaction
Documents, or in any way seeking to enjoin or restrain the Purchaser from purchasing the
Proposition IA Receivable or which if determined adversely to the Purchaser would have an
adverse effect upon the Purchaser's ability to purchase the Proposition IA Receivable, nor to the
knowledge of the Purchaser is there any basis therefor.
(e) This Agreement, and its execution, delivery 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 accordance with the terms
hereof, subject to the effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other similar laws relating to or affecting creditors' rights generally or the
application of equitable principles in any proceeding, whether at law or in equity.
(f) The Purchaser is a separate legal entity, acting solely through its authorized
representatives, from the Seller, maintaining separate records, books of account, assets, bank
accounts and funds, which are not and have not been commingled with those of the Seller.
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4009•,;
duly executed by the Seller or its counsel, as applicable: (1) an opinion of
counsel to the Seller dated the Pricing Date in substantially the form
attached hereto as Exhibit B1, (2) certificates dated the Pricing Date in
substantially the forms attached hereto as Exhibit Cl and Exhibit C2,
(3) irrevocable instructions to the Controller dated as of the Closing Date
in substantially the form attached hereto as Exhibit D, (4) this Agreement,
(5) a certified copy of the resolution of the Seller's City Council approving
this Agreement, the transactions contemplated hereby and the documents
attached hereto as exhibits, and (6) an escrow instruction letter in
substantially the form attached hereto as Exhibit E;
(ii) Transaction Counsel receiving on or before the Pricing Date, (1) a
bringdown opinion of counsel to the Seller dated as of the Closing Date in
substantially the form attached hereto as Exhibit B2, and (2) a bill of sale
and bringdown certificate of the Seller (the "Bill of Sale ") in substantially
the form attached hereto as Exhibit C3: provided that the Purchaser may
waive, in its sole discretion, the requirements of Section 2(b)(ii)(1);
(iii) the Purchaser issuing Bonds in an amount which will be sufficient to pay
the Purchase Price; and
(iv) the receipt by the Purchaser of a certification of the County Auditor
confirming the Initial Amount of the Proposition IA Receivable pursuant
to the Act.
(c) The performance by the Seller of its obligations hereunder shall be
conditioned solely upon the Purchaser's issuance of the Bonds and its execution and delivery of
this 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 specifically disclaims any right to rescind this Agreement, or to assert that title
to the Proposition IA Receivable has not passed to the Purchaser, should Purchaser fail to make
Installment Payments in the requisite amounts on the Payment Dates.
3. Purchase Price. Conveyance of Proposition IA Receivable and Payment of
Purchase Price.
(a) Upon pricing of the Bonds by the Purchaser, the Purchaser will inform the
Seller that it will pay the Purchase Price in Installment Payments on the Payment Dates.
(b) In consideration of the Purchaser's agreement to pay and deliver to the Seller
the Installment Payments on the Payment Dates, the Seller agrees to (i) transfer, grant, bargain,
sell, assign, convey, set over and deliver to the Purchaser, absolutely and not as collateral
security, without 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 law, all present or future rights, if any, of the Seller to enforce or cause
the enforcement of payment of the Proposition IA Receivable pursuant to the Act and other
4009 • . .
obligations under the Resolution and the Transaction Documents to which it is a party and any
other applicable agreements, have been obtained and are in full force and effect.
(e) Insofar as it would materially adversely affect the Seller's ability to enter into,
carry out and perform its obligations under any or all of the Transaction Documents to which it is
a party, or consummate the transactions contemplated by the same, the Seller is not in breach of
or default under any applicable constitutional provision, law or administrative regulation of the
State of California or the United States or any applicable judgment or decree or any loan
agreement, indenture, bond, note, resolution, agreement or other instrument to which it is a party
or to which it or any of its property or assets is otherwise subject, and, to the best of the
knowledge of the Seller, no event has occurred and is continuing which with the passage of time
or the giving of notice, or both, would constitute a default or an event of default under any such
instrument, and the adoption of the Resolution and the execution and delivery by the Seller of the
Transaction Documents to which it is a party, and compliance by the Seller with the provisions
thereof, under the circumstances contemplated thereby, do not and will not conflict with or
constitute on the part of the Seller a breach of or default under any agreement or other instrument
to which the Seller is a party or by which it is bound or any existing law, regulation, court order
or consent decree to which the Seller is subject.
(0 To the best of the knowledge of the Seller, 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 way against the Seller affecting the existence of the Seller or the titles of its
City Council members or officers to their respective offices, or seeking to restrain or to enjoin
the sale of the Proposition IA Receivable or to direct the application of the proceeds of the sale
thereof, or in any way contesting or affecting the validity or enforceability of any of the
Transaction Documents or any other applicable agreements or any action of the Seller
contemplated by any of said documents, or in any way contesting the powers of the Seller or its
authority with respect to the Resolution or the Transaction Documents to which it is a party or
any other applicable agreement, or any action on the part of the Seller contemplated by the
Transaction Documents, or in any way seeking to enjoin or restrain the Seller from selling the
Proposition IA Receivable or which if determined adversely to the Seller would have an adverse
effect upon the Seller's ability to sell the Proposition IA Receivable, nor to the knowledge of the
Seller is there any basis therefor.
(g) Prior to the sale of the Proposition IA Receivable to the Purchaser, the Seller
was the sole owner of the Proposition IA Receivable, and has such right, title and interest to the
Proposition IA Receivable as provided in the Act. From and after the conveyance of the
Proposition IA Receivable by the Seller to Purchaser on the Closing Date, the Seller shall have
no right, title or interest in or to the Proposition IA Receivable. Except as provided in this
Agreement, the Seller has not sold, transferred, assigned, set over or otherwise conveyed any
right, title or interest of any kind whatsoever in all or any portion of the Proposition IA
Receivable, nor has the Seller created, or to the best knowledge of the Seller permitted the
creation of, any lien, pledge, security interest or any other encumbrance (a "Lien ") thereon.
Prior to the sale of the Proposition IA Receivable to the Purchaser, the Seller held title to the
Proposition IA Receivable free and clear of any Liens. As of the Closing Date, this Agreement,
together with the Bill of Sale, constitutes a valid and absolute sale to the buyer of all of the
Seller's right, title and interest in and to the Proposition I Receivable.
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(g) All approvals, consents, authorizations, elections and orders of or filings or
registrations with any governmental authority, board, agency or commission having jurisdiction
which would constitute a condition precedent to, or the absence of which would adversely affect,
the purchase by the Purchaser of the Proposition IA Receivable or the performance by the
Purchaser of its obligations under the Transaction Documents to which it is a party and any other
applicable agreements, have been obtained and are in full force and effect.
(h) Insofar as it would materially adversely affect the Purchaser's ability to enter
into, carry out and perform its obligations under any or all of the Transaction Documents to
which it is a party, or consummate the transactions contemplated by the same, the Purchaser is
not in breach of or default under any applicable constitutional provision, law or administrative
regulation of the State of California or the United States or any applicable judgment or decree or
any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which it
is a party or to which it or any of its property or assets is otherwise subject, and, to the best of the
knowledge of the Purchaser, no event has occurred and is continuing which with the passage of
time or the giving of notice, or both, would constitute a default or an event of default under any
such instrument, and the execution and delivery by the Purchaser of the Transaction Documents
to which it is a party, and compliance by the Purchaser with the provisions thereof, under the
circumstances contemplated thereby, do not and will not conflict with or constitute on the part of
the Purchaser a breach of or default under any agreement or other instrument to which the
Purchaser is a party or by which it is bound or any existing law, regulation, court order or
consent decree to which the Purchaser is subject.
5. Representations and Warranties of the Seller. The Seller hereby represents
and warrants to the Purchaser, as of the date hereof, as follows:
(a) The Seller is a local agency within the meaning of Section 6585(f) of the
California Government Code, with full power and authority to execute and deliver this
Agreement and to carry out its terms.
(b) The Seller has full power, authority and legal right to sell and assign the
Proposition IA Receivable to the Purchaser and has duly authorized such sale and assignment to
the Purchaser by all necessary action; and the execution, delivery and performance by the Seller
of this Agreement has been duly authorized by the Seller by all necessary action.
(c) This Agreement has been, and as of the Closing Date the Bill of Sale will have
been, duly executed and delivered by the Seller and, assuming the due authorization, execution
and delivery of this Agreement by the Purchaser, each of this Agreement and the Bill of Sale
constitutes a legal, valid and binding obligation of the Seller enforceable in accordance with its
terms, subject to the effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other similar laws relating to or affecting creditors' rights generally or the
application of equitable principles in any proceeding, whether at law or in equity.
(d) All approvals, consents, authorizations, elections and orders of or filings or
registrations with any governmental authority, board, agency or commission having jurisdiction
which would constitute a condition precedent to, or the absence of which would adversely affect,
the sale by the Seller of the Proposition IA Receivable or the performance by the Seller of its
�Ugg • .;
the ability of the Purchaser, and any assignee of the Purchaser, to receive payments of the
Proposition IA Receivable.
(b) The Seller shall not take any action or omit to take any action that would
impair the validity or effectiveness of the Act, nor, without the prior written consent of the
Purchaser or its assignees, agree to any amendment, modification, termination, waiver or
surrender of, the terms of the Act, or waive timely performance or observance under the Act.
Nothing in this agreement shall impose a duty on the Seller to seek to enforce the Act or to seek
enforcement thereof by others, or to prevent others from modifying, terminating, discharging or
impairing the validity or effectiveness of the Act.
(c) Upon request of the Purchaser or its assignee, (i) the Seller shall execute and
deliver such further instruments and do such further acts (including being named as a plaintiff in
an appropriate proceeding) as may be reasonably necessary or proper to carry out more
effectively the purposes and intent of this Agreement and the Act, and (ii) the Seller shall take all
actions necessary to preserve, 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 instruction to the Controller pursuant to Section 6588.6(c) of California Government
Code to cause the Controller to disburse all payments of the Proposition IA Receivable to the
Trustee, together with notice of the sale of the Proposition IA Receivable to the Purchaser and
the assignment of all or a portion of such assets by the Purchaser to the Trustee. Such notice and
instructions shall be in the form of Exhibit D hereto. The Seller shall not take any action to
revoke or which would have the effect of revoking, in whole or in part, such instructions to the
Controller. Upon sending such irrevocable instruction, the Seller shall have relinquished and
waived any control over the Proposition IA Receivable, any authority to collect the Proposition
IA Receivable, and any power to revoke or amend the instructions to the Controller
contemplated by this paragraph. Except as provided in Section 2(c) of this Agreement, the Seller
shall not rescind, amend or modify the instruction described in the first sentence of this
paragraph. The Seller shall cooperate with the Purchaser or its assignee in giving instructions to
the Controller if the Purchaser or its assignee transfers the Proposition IA Receivable. In the
event that the Seller receives any proceeds of the Proposition IA Receivable, the Seller shall
hold the same in trust for the benefit of the Purchaser and the Trustee and each Credit Enhancer,
as assignees of the Purchaser, and shall promptly remit the same to the Trustee.
(e) The Seller hereby covenants and agrees that it will not at any time institute
against the Purchaser, or join in instituting against the Purchaser, any bankruptcy, reorganization,
arrangement, insolvency, liquidation, or similar proceeding under any United States or state
bankruptcy or similar law.
(f) The financial statements and books and records of the Seller prepared after the
Closing Date shall reflect the separate existence of the Purchaser and the sale to the Purchaser of
the Proposition IA Receivable.
(g) The Seller shall treat the sale of the Proposition IA Receivable as a sale for
regulatory and accounting purposes.
4009 .
(h) The Seller acts solely through its authorized officers or agents.
Purchaser. (i) The Seller maintains records and books of account separate from those of the
0) The Seller maintains its respective assets separately from the assets of the
Purchaser (including through the maintenance of separate bank accounts); the Seller's funds and
assets, and records relating thereto, have not been and are not commingled with those of the
Purchaser.
(k) The Seller's principal place of business and chief executive office is located at
350 Main Street, El Segundo, CA 90245.
(1) The aggregate amount of the Installment Payments is reasonably equivalent
value for the Proposition I Receivable. The Seller acknowledges that the amount payable to or
on behalf of the Purchaser by the State with respect to the Proposition IA Receivable will be in
excess of the Purchase Price and the Initial Amount of the Proposition IA Receivable and
confirms that it has no claim to any such excess amount whatsoever.
(m) The Seller does not act as an agent of the Purchaser in any capacity, but
instead presents itself to the public as an entity separate from the Purchaser.
(n) The Seller has not guaranteed and shall not guarantee the obligations of the
Purchaser, nor shall it hold itself out or permit itself to be held out as having agreed to pay or as
being liable for the debts of the Purchaser; and the Seller has not received nor shall the Seller
accept any credit or financing from any Person who is relying upon the availability of the assets
of the Purchaser in extending such credit or financing. The Seller has not purchased and shall
not purchase any of the Bonds or any interest therein.
(o) All transactions between or among the Seller, on the one hand, and the
Purchaser on the other hand (including, without limitation, transactions governed by contracts for
services and facilities, such as payroll, purchasing, accounting, legal and personnel services and
office space), whether existing on the date hereof or entered into after the date hereof, shall be on
terms and conditions (including, without limitation, terms relating to amounts to be paid
thereunder) which are believed by each such party thereto to be both fair and reasonable and
comparable to those available on an arms- length basis from Persons who are not affiliates.
(p) The Seller has not, under the provisions of Section 100.06(b) of the California
Revenue and Taxation Code, received a reduction for hardship 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 the Seller pursuant
to Section 100.06(a) of the California Revenue and Taxation Code.
6. Covenants of the Seller.
(a) The Seller shall not take any action or omit to take any action which adversely
affects the interests of the Purchaser in the Proposition IA Receivable and in the proceeds
thereof. The Seller shall not take any action or omit to take any action that shall adversely affect
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4009 • .
10. Limitation on Liability.
(a) The Seller and any officer or employee or agent of the Seller may rely in good
faith on the advice of counsel or on any document of any kind, prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. 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 Seller shall have any liability for the
representations, warranties, covenants, agreements or other obligations of the Seller hereunder or
in any of the certificates, 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 Seller 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 (b) the Proposition IA Receivable, to the Trustee and each Credit Enhancer
pursuant to the Indenture. The Seller further agrees and acknowledges that the Trustee, the
holders of the Bonds, and each Credit Enhancer have relied 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 the above representations, warranties and covenants shall
survive any assignment and grant of a security interest in all or a portion of this Agreement or the
Proposition IA Receivable to the Trustee and each Credit Enhancer and shall continue in full
force and effect, notwithstanding any subsequent termination of this Agreement and the other
Transaction Documents. The above representations, warranties and covenants shall inure to the
benefit of the Trustee and each Credit Enhancer.
12. Notices. All demands upon or, notices and communications to, the Seller, the
Purchaser, the Trustee or the Rating Agencies under this Agreement shall be in writing,
personally delivered or mailed by certified mail, return receipt requested, to such party at the
appropriate notice address, and shall be deemed to have been duly given upon receipt.
13. Amendments. This Agreement may be amended by the Seller and the
Purchaser, with (a) the consent of the Trustee, (b) the consent of each Credit Enhancer, and (c) a
Rating Agency Confirmation, but without the consent of any of the holders of the Bonds, for the
purpose of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement.
Promptly after the execution of any such amendment, the Purchaser shall furnish
written notification of the substance of such amendment to the Trustee and to the Rating
Agencies.
14. Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the Seller, the Purchaser and their respective successors and permitted assigns.
The Seller may not assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of the Purchaser. Except as specified herein, the Purchaser may
not assign or transfer any of its rights or obligations under this Agreement without the prior
written consent of the Seller.
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4009 • .
(h) From and after the date of this Agreement, the Seller shall not sell, transfer,
assign, set over or otherwise convey any right, title or interest of any kind whatsoever in all or
any portion of the Proposition IA Receivable, nor shall the Seller create, or to the knowledge of
the Seller permit the creation of, any Lien thereon.
7. The Purchaser's Acknowled ment. The Purchaser acknowledges that the
Proposition lA Receivable is not a debt or liability of the Seller, and that the Proposition IA
Receivable is payable solely by the State from the funds of the State provided therefor.
Consequently, neither the taxing power of the Seller, nor the full faith and credit thereof is
pledged to the payment of the Proposition IA Receivable. No representation is made by the
Seller concerning the obligation or ability of the State to make any payment of the Proposition
IA Receivable pursuant to Section 100.06 of the Revenue and Taxation Code and Section 25.5
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 law applicable to the Transaction Documents
(including without limitation Section 100.06 of the Revenue and Taxation Code or Section
6588.6 of the Government Code). The Purchaser acknowledges that the Seller has no obligation
with respect to any offering document or disclosure related to the Bonds.
8. Notices of Breach.
(a) Upon discovery by the Seller or the Purchaser that the Seller or Purchaser has
breached any of its covenants or that any of the representations or warranties of the Seller or the
Purchaser are materially false or misleading, in a manner that materially and adversely affects
the value of the Proposition IA Receivable or the Purchase Price thereof, the discovering party
shall give prompt written notice thereof to the other party and to the Trustee, as assignee of the
Purchaser, who shall, pursuant to the Indenture, promptly thereafter notify each Credit Enhancer
and the Rating Agencies.
(b) The Seller shall not be liable to the Purchaser, the Trustee, the holders of the
Bonds, or any Credit Enhancer for any loss, cost or expense resulting from the failure of the
Trustee, any Credit Enhancer or the Purchaser to promptly notify the Seller upon the discovery
by an authorized officer of the Trustee, any Credit Enhancer or the Purchaser of a breach of any
covenant or any materially false or misleading representation or warranty contained herein.
9. Liability of Seller; Indemnification. The Seller shall be liable in accordance
herewith only to the extent 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 assignees of the Purchaser, and their respective officers, directors,
employees and agents from and against any and all costs, expenses, losses, claims, damages and
liabilities to the extent that such cost, expense, loss, claim, damage or liability arose out of, or
was imposed upon any such Person by the Seller's breach of any of its covenants contained
herein or any materially false or misleading representation or warranty of the Seller contained
herein. Notwithstanding anything to the contrary herein, the Seller shall have no liability for the
payment of the principal of or interest on the Bonds issued by the Purchaser.
0
4009•.
19. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused this
Agreement to be duly executed as of the date first written above.
CITY OF EL SEGUNDO, as Seller
By:
Audio Ized Officer
CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY, as Purchaser
LOW
Authorized Signatory
12
4009.
15. Third Party Rights. The Trustee and each Credit Enhancer are express and
intended third party beneficiaries under this Agreement. Nothing expressed in or to be implied
from this Agreement is intended to give, or shall be construed to give, any Person, other than the
parties hereto, the Trustee, and each Credit Enhancer, and their permitted successors and assigns
hereunder, any benefit or legal or equitable right, remedy or claim under or by virtue of this
Agreement or under or by virtue of any provision herein.
16. Partial Invalidity. If at any time any provision of this Agreement is or
becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, neither
the legality, validity or enforceability of the remaining provisions of this Agreement nor the
legality, validity or enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
17. Counterparts. This Agreement may be executed in any number of identical
counterparts, any set of which signed by all the parties hereto shall be deemed to constitute a
complete, executed original for all purposes.
18. Entire Agreement. This Agreement sets forth the entire understanding and
agreement of the parties with respect to the subject matter hereof and supersedes any and all oral
or written agreements or understandings between the parties as to the subject matter hereof.
11
4009 • .a
19. Governing- Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused this
Agreement to be duly executed as of the date first written above.
CITY OF EL SEGUNDO, as Seller
Authorized Officer
CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY, as Purchaser
By: , '1( L� CL"
Authorized Signatory
12
4009 • . .
EXHIBIT A
DEFINITIONS
For all purposes of this Agreement, except as otherwise expressly provided herein
or unless the context otherwise requires, capitalized terms not otherwise defined herein shall
have the meanings set forth below.
"Act" means Chapter 14XXXX of the California Statutes of 2009 (Assembly Bill
No. 15), as amended.
"Bill of Sale" has the meaning given to that term in Section 2(b)(ii) hereof.
"Closing Date" means the date on which the Bonds are issued. The Closing Date
is expected to be November 19, 2009, but the Purchaser may change the Closing Date by
providing e-mail notification to Dcullen @elsegundo.org not later than one day prior to the
Closing Date.
"Controller" means the Controller of the State.
"County Auditor" means the auditor or auditor - controller of the county within
which 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 respects its obligations
under any Credit Support Instrument for some or all of the Bonds.
"Credit Support Instrument" means a policy of insurance, a letter of credit, a
stand -by purchase agreement, a revolving credit agreement or other credit arrangement 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 from the Seller pursuant to the provisions of
Section 100.06 of the Revenue and Taxation Code, as certified by the County Auditor pursuant
to the Act.
"Installment Payments" have the meaning set forth in Section 2(a).
"Payment Dates" have the meaning set forth in Section 2(a).
"Pricing Date" means the date on which the Bonds are sold. The Pricing Date is
expected to be November 10, 2009, but the Purchaser may change the Pricing Date by providing
e -mail notification to Dcullen @elsegundo.org not later 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 business and chief executive office located at 350 Main Street, El
Segundo, CA 90245.
EN
40o • .
"Proposition I Receivable" has the meaning set forth in Section 2(a).
"Purchase Price" means an amount equal to the Initial Amount.
"Rating Agency" means any nationally recognized rating agency then providing
or maintaining a rating on the Bonds at the request of the Purchaser.
"Rating Agency Confirmation" means written confirmation from each Rating
Agency that any proposed action will not, in and of itself, cause the Rating Agency to lower,
suspend or withdraw the rating then assigned by such Rating Agency to any Bonds.
"Resolution" means the resolution adopted by the City Council approving the sale
of the Proposition IA Receivable.
"State" means the State of California.
"Transaction Counsel" means Orrick, Herrington & Sutcliffe LLP.
"Transaction Documents" mean this Agreement, the Bill of Sale, the Indenture,
the Bonds and the Irrevocable Instructions For Disbursement of Proposition IA Receivable of
City of El Segundo, dated as of the Closing Date.
A -2
4010 ,.
CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY
REVENUE BONDS
(STATE OF CALIFORNIA PROPOSITION IA RECEIVABLES PROGRAM)
SERIES 2009
CERTIFICATE OF THE SELLER RE:
COMPONENTS OF PROPOSITION IA RECEIVABLES
The undersigned, an Authorized Officer of the City of El Segundo (the "Seller ") hereby
certifies as follows with respect to that certain Purchase and Sale Agreement, dated as of
November 1, 2009 (the "Agreement "), by and between the Seller and the California Statewide
Communities Development Authority (the "Purchaser ") as follows (all capitalized terms not
otherwise defined herein shall have the meanings ascribed thereto in the Agreement):
1. The components (the "Components ") of the Proposition IA Receivable listed in
Schedule I, attached hereto and incorporated herein by reference, belong to the Seller;
2. The Components are listed as they appear on the certification of the County
Auditor pursuant to Section 100.06 of the Revenue and Taxation Code;
3. By entering into the Agreement, the Seller is selling the Proposition IA
Receivable, including all Components thereof listed in Schedule I;
4. The Seller acknowledges that the Purchase Price of the Proposition IA
Receivable will be equal to aggregate the Initial Amounts of each Component as each such
Component is separately certified by the County Auditor; and
5. The funds or other entities listed as Components in Schedule I (other than the
Seller itself) are not independent legal entities with the power to enter into contracts.
Dated: Pricing Date
CITY OF EL SEGUNDO
8 0 . I
1
Component Certificate of City of El Segundo
ACKNOWLEDGEMENT OF SELLER'S COUNSEL
The undersigned, counsel to the Seller hereby acknowledges and confirms that the statements in
paragraphs 1 and 5 of this certificate are legally correct.
By:
Seller's Counsel
Component Certificate of City of El Segundo
SCHEDULEI
COMPONENTS OF PROPOSITION IA RECEIVABLE
Names of Components
City of El Segundo
Schedule I
Component Certificate of City of El Segundo
09•..
EXHIBIT B1
OPINION OF COUNSEL
to
CITY OF EL SEGUNDO
Dated: Pricing Date
California Statewide Communities Development Authority
Sacramento, California
Wells Fargo Bank, National Association
Los Angeles, California
Re: Sale of Proposition IA Receivable
Ladies & Gentlemen:
have his Office has] acted as counsel for the City of El Segundo (the "Seller ")
in connection wit t e adoption of that certain resolution (the "Resolution ") of the City Council
of the Seller (the "Governing Body ") pursuant to which the Seller authorized the sale to the
California Statewide Communities Development Authority (the "Purchaser ") of the Seller's
"Proposition lA Receivable ", as defined in and pursuant to the Purchase and Sale Agreement
dated as of November 1, 2009 (the "Sale Agreement ") between the Seller and the Purchaser. In
connection with these transactions, the Seller has issued certain Irrevocable Instructions For
Disbursement of the Seller's Proposition IA Receivable to the Controller of the State of
California (the "Disbursement Instructions ") and a Bill of Sale and Bringdown Certificate of the
Seller (the "Bill of Sale" and, collectively with the Sale Agreement and the Disbursement
Instructions, the "Seller Documents ").
Unless the context otherwise requires, capitalized terms used but not otherwise
defined herein shall have the meanings given to such terms in the Sale Agreement. e] have
examined and are familiar with the Seller Documents and with those documents relating to the
existence, organization, and operation of the Seller, the adoption of the Resolution, and the
execution of the Seller Documents, and have satisfied ourselves as to such other matters as (Owe]
deem necessary in order to render the following opinions. As to paragraphs numbered 3 and 4
below, IJ,"/ ve] have relied as to factual matters on the representations and warranties of the Seller
contained in the Sale Agreement.
Based upon the foregoing, and subject to the limitations and qualifications set
forth herein, I/ e] are of the opinion that:
B1 -1
4009....
1. The Seller is a local agency, within the meaning of Section 6585(f) of the
California Government Code. The Governing Body is the governing body of the Seller.
2. The Resolution was duly adopted at a meeting of the Governing Body,
which was called and held pursuant to law and with all public notice required by law, and at
which a quorum was present and acting throughout, and the Resolution is in full force and effect
and has not been modified, amended or rescinded since the date of its adoption.
3. To the best of 6Y -Jour] knowledge, 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 way against the Seller (i) affecting the existence of the Seller or the titles of its
Governing Body members or officers to their respective offices; (ii) seeking to restrain or to
enjoin the sale of the Proposition IA Receivable or to direct the application of the proceeds of
the sale thereof, or materially adversely affecting the sale of the Proposition IA Receivable' (iii)
in any way contesting or affecting the validity or enforceability of the Resolution, Seller
Documents or any other applicable agreements or any action of the Seller contemplated by any
of said documents; or (iv) in any way contesting the powers of the Seller or its authority with
respect to the Resolution or the Seller Documents or any other applicable agreement, or any
action on the part of the Seller contemplated by any of said documents.
4. To the best of /our] knowledge, prior to the sale of the Proposition IA
Receivable to the Purchaser, the Sell ad not sold, transferred, assigned, set over or otherwise
conveyed any right, title or interest of any kind whatsoever in all or any portion of the Seller's
Proposition IA Receivable, nor had the Seller created, or permitted the creation of, any Lien
thereon.
5. The Seller has duly authorized and executed the Seller Documents and,
assuming the due authorization execution and delivery of the Sale Agreement by the Purchaser,
each Seller Document will be legal, valid and binding against the Seller and enforceable against
the Seller in accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or laws relating to or affecting
creditors' rights, and the application of equitable principles and the exercise of judicial discretion
in appropriate areas.
No opinion is expressed concerning the obligation or ability of the State of
California to make any payment of the Proposition IA Receivable pursuant to Section 100.06 of
the Revenue and Taxation Code and Section 25.5 of Article XIII of the California Constitution,
nor is any opinion expressed with respect to the ability of the State to enact any change in the
law applicable to the Seller Documents (including, without limitation, Section 100.06 the
Revenue and Taxation Code or Section 6588.6 of the Government Code). Furthermore (ywe]
express no opinion as to the value of the Proposition IA Receivable or as to any legal or
equitable remedies that may be available to any person should the Proposition IA Receivable
have little or no value. No opinion is expressed with respect to the sale of Bonds by the
Purchaser.
B1 -2
4019'•"
EXHIBIT B2
OPINION OF COUNSEL
to
CITY OF EL SEGUNDO
Dated: Closing Date
California Statewide Communities Development Authority
Sacramento, California
Wells Fargo Bank, National Association
Los Angeles, California
Re: Sale of Proposition I Receivable (Bringdown Opinion)
Ladies & Gentlemen:
Pursuant to that certain Purchase and Sale Agreement dated as of November 1,
2009 (the "Sale Agreement ") between the City of El Segundo (the "Seller ") and the California
Statewide Communities Development Authority (the "Purchaser "), this Office delivered an
opinion (the "Opinion ") dated the Pricing Date as counsel for the Seller in connection with the
sale of the Seller's Proposition IA Receivable (as defined in the Sale Agreement), the execution
of documents related thereto and certain other related matters.
Capitalized terms used but not defined herein shall have the meanings given to
such terms in the Sale Agreement.
I confirm that you may continue to rely upon the Opinion as if it were dated as of
the date hereof. Each Credit Enhancer and the underwriters of the Bonds may rely upon this
legal opinion as if it were addressed to them. This letter is delivered to you pursuant to Section
2(b)(ii)(1) of the Sale Agreement.
Very truly yours,
<-----7,---z A- --
Seller's Counsel
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r;0U r .:
The legal opinion set forth herein is intended for the information solely of the
addressees hereof and for the purposes contemplated by the Sale Agreement. The addressees
may not rely on it in connection with any transactions other than those described herein, and it is
not to be relied upon by any other person or entity, or for any other purpose, or quoted as a whole
or in part, or otherwise referred to, in any document, or to be filed with any governmental or
administrative agency other than the Purchaser or with any other person or entity for any purpose
without [ &our] prior written consent. In addition to the addressees hereof, each Credit
Enhancer and the u derwriters of the Bonds may rely upon this legal opinion as if it were
addressed to them. VVe] do not undertake to advise you of matters that may come to / our]
attention subsequent to the date hereof that may affect the opinions expressed herein.
Very truly yours,
By
Seller's Counsel
B1 -3
40 0
EXHIBIT C1
CLERK'S CERTIFICATE
CERTIFICATE OF THE
CITY CLERK OF
CITY OF EL SEGUNDO, CALIFORNIA
Dated: Pricing Date
The undersigned City Clerk of the City of El Segundo (the "Seller "), a local agency of
the State of California within the meaning of Section 6585(f) of the California Government
Code, does hereby certify that the foregoing is a full, true and correct copy of Resolution No.
4626 duly adopted at a regular meeting of the City Council of said Seller duly and
legally held at the regular meeting place thereof on the 20th day of October
2009, of which meeting all of the members of said City Council had due notice and at which a
quorum was present and acting throughout, and that at said meeting said resolution was adopted
by the following vote:
AYES: McDowell, Busch, Fisher, Jacobson
NOES: None
ABSENT: Brann
ABSTAIN: None
I do hereby further certify that I have carefully compared the same with the original
minutes of said meeting on file and of record in my office and that said resolution is a full, true
and correct copy of the original resolution adopted at said meeting and entered in said minutes
and that said resolution has not been amended, modified or rescinded since the date of its
adoption and the same is now in full force and effect.
I do hereby further certify that da of said meeting was posted at least 72 hours
before said meeting at a location in th [ City/ own / County ] of El Segundo, California freely
accessible to members of the public, a ief general description of said resolution appeared
on said agenda.
Capitalized terms used but not defined herein shall have the meanings given to such
terms in the Purchase and Sale Agreement, dated as of November 1, 2009, between the Seller
and the California Statewide Communities Development Authority.
WITNESS by my hand as of the Pricing Date.
By: cwk
City Clerk 6f the City of El Segundo,
California
C1 -1
,09
EXHIBIT C2
SELLER CERTIFICATE
SELLER CERTIFICATE
Dated: Pricing Date
We, the undersigned officers of the City of El Segundo (the "Seller "), a local
agency of the State of California within the meaning of Section 6585(f) of the California
Government Code, holding the respective offices herein below set opposite our signatures, do
hereby certify that on the date hereof the following documents (the "Seller Transaction
Documents ") were officially executed and delivered by the Authorized Officer or Officers whose
names appear on the executed copies thereof, to wit:
Document
I. Purchase and Sale Agreement, dated as of November 1, 2009 (the
"Sale Agreement "), between the Seller and the California
Statewide Communities Development Authority (the "Purchaser ").
2. Irrevocable Instructions For Disbursement of Seller's Proposition
IA Receivable to the Controller of the State of California, dated
the Closing Date.
3. Bill of Sale, dated the Closing Date.
Capitalized terms used herein and not defined herein shall have the meaning given
such terms in the Sale Agreement.
We further certify as follows:
1. At the time of signing the Seller Transaction Documents and the other documents and
opinions related thereto, we held said offices, respectively, and we now hold the same.
2. The representations and warranties of the Seller contained in the Seller Transaction
Documents are true and correct as of the date hereof in all material respects.
3. The City Council duly adopted its resolution (the "Resolution ") approving the sale of the
Seller's Proposition IA Receivable at a meeting of the City Council which was duly called
and held pursuant to law with all public notice required by law and at which a quorum was
present and acting when the Resolution was adopted, and such Resolution is in full force and
effect and has not been amended, modified, supplemented or rescinded.
C2 -1
4009 • •
EXHIBIT C3
BILL OF SALE AND BRINGDOWN CERTIFICATE
BILL OF SALE AND BRINGDOWN CERTIFICATE
Pursuant to terms and conditions of the Purchase and Sale Agreement (the "Sale
Agreement "), dated as of November 1, 2009, between the undersigned (the "Seller ") and the
California Statewide Communities Development Authority (the "Purchaser "), and in
consideration of the obligation of the Purchaser to pay and deliver to the Seller the Purchase
Price (as defined in the Sale Agreement), in two equal installment payments to be made on
January 15, 2010, and May 3, 2010 (collectively, the "Payment Dates "), the Seller does hereby
(a) transfer, grant, bargain, sell, assign, convey, set over and deliver to the Purchaser, absolutely
and not as collateral security, without recourse except as expressly provided in the Sale
Agreement, the Proposition 1A Receivable as defined in the Sale Agreement (the "Proposition
IA Receivable "), and (b) assign to the Purchaser, to the extent permitted by law (as to which no
representation is made), all present or future rights, if any, of the Seller to enforce or cause the
enforcement of payment of the Proposition IA Receivable pursuant to the Act and other
applicable law. Such transfer, grant, bargain, sale, assignment, conveyance, set over and
delivery is hereby expressly stated to be a sale and, pursuant to Section 6588.6(b) of the
California Government Code, shall be treated as an absolute sale and transfer of the Proposition
IA Receivable, and not as a grant of a security interest by 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 Purchaser, should Purchaser fail to make the
installment payments in the requisite amounts on the Payment 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, the Seller Certificate dated the
Pricing Date and in the Transaction Documents to which the Seller is a party are true 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 true and correct as of such date). Capitalized terms used but not
defined herein shall have the meanings given to such terms in the Sale Agreement.
Dated: Closing Date
C3 -1
CITY OF EL SEGUNDO
J�
By'� 4Autho7il?d Officer
Name. Official Title
Jack Wayt, City Manager
Deborah Cullen, Director of Finance
Bill Crowe, Assistant City Manager
' ^0g • .
genuine. I HEREBY CERTIFY that the signatures of the officers named above are
Dated: Pricing Date
By: Vz" In
City CIA of the City of Et Segundo,
California
C2 -2
10 0 g - ..,j
EXHIBIT D
IRREVOCABLE INSTRUCTIONS TO CONTROLLER
IRREVOCABLE INSTRUCTIONS FOR DISBURSEMENT
OF PROPOSITION IA RECEIVABLE OF
CITY OF EL SEGUNDO
Dated: Closing Date
Office of the Controller
State of California
P.O. Box 942850
Sacramento, California 94250 -5872
Re: Notice of Sale of Proposition I Receivable by the City of El Segundo
and Wiring Instructions Information Form
Dear Sir or Madam:
Pursuant to Section 6588.6(c) of the California Government Code, City of El
Segundo (the "Seller ") hereby notifies you of the sale by Seller, effective as of the date of these
instructions written above, of all right, title and interest of the Seller in and to the "Proposition
IA Receivable" as defined in Section 6585(g) of the California Government Code (the
"Proposition IA Receivable "), namely, the right to payment of moneys 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 Revenue and Taxation Code.
By resolution, the Seller's City Council authorized the sale of the Proposition IA
Receivable to the California Statewide Communities Development Authority (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 Date (as defined in the Purchase and Sale
Agreement). The Proposition IA Receivable has been pledged and assigned by the Purchaser
pursuant to an Indenture, dated as of November 1, 2009 (the "Indenture ") between the Purchaser
and Wells Fargo Bank, National Association, as Trustee (the "Trustee ").
The Seller hereby irrevocably requests and directs that, commencing as of the
date of these instructions written above, all payments of the Proposition IA Receivable (and
documentation related thereto) be made directly to Wells Fargo Bank, National Association, as
Trustee, in accordance with the wire instructions and bank routing information set forth below.
Please note that the sale of the Proposition IA Receivable by the Seller is
irrevocable and that: (i) the Seller has no power to revoke or amend these instructions at any
time, (ii) the Purchaser shall have the power to revoke or amend these instructions only if
there are no notes of the Purchaser outstanding under the Indenture and the Indenture has
been discharged, and (iii) so long as the Indenture has not been discharged, these instructions
cannot be revoked or amended by the Purchaser without the consent of the Trustee. Should
D -1
q pg.
the Purchaser, however, deliver a written notice to the Office of the Controller stating that.
(a) the Seller failed to meet the requirements set forth in the Purchase and Sale Agreement,
(b) the Purchaser has not waived such requirements; and (c) the Purchaser has not purchased
the Proposition IA Receivable as a result of the circumstances described in (a) and (b) above,
then these instructions shall be automatically rescinded and the Seller shall again be entitled
to receive all payment of moneys 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 Revenue and Taxation Code.
Bank Name:
Bank ABA Routing #:
Bank Account #:
Bank Account Name:
Further Credit To:
Bank Address:
Bank Telephone #:
Bank Contact Person:
Wells Fargo Bank, N.A.
121000248
0001038377
Corporate Trust Clearing
CSCDA Proposition IA Bonds
707 Wilshire Blvd., 17th Floor
MAC E2818 -176
Los Angeles, CA 90017
(213) 614 -3353
Robert Schneider
Please do not hesitate to call the undersigned if you have any questions regarding
this transaction. Thank you for your assistance in this matter.
Very truly yours,
CITY OF EL SEGUNDO
D -2
.'A
EXHIBIT E
ESCROW INSTRUCTION LETTER
ESCROW INSTRUCTION LETTER
'Z , 2009
California Statewide Communities Development Authority
1100 K Street
Sacramento, CA 95814
Re: Proposition I Receivable Financin
Dear Sir or Madam:
The City of El Segundo (the "Seller ") hereby notifies you of its agreement to
participate in the California Statewide Communities Development Authority Proposition IA
Receivable Financing. By adoption of a resolution (the "Resolution ") authorizing the sale of its
Proposition IA Receivable, the Seller's City Council has agreed to sell to the California
Statewide Communities Development Authority (the "Purchaser "), for a purchase price that
meets the conditions set forth in the Resolution, all of its right, title and interest in the
Proposition IA Receivable.
Enclosed herewith are the following documents which have been duly approved
and executed by the Seller and which are to be held in escrow by Orrick, Herrington &
Sutcliffe LLP, as transaction counsel ( "Transaction Counsel "), as instructed below:
1. certified copy of the Resolution, together with a certificate of the City Clerk,
dated the Pricing Date;
2. the Seller Certificate, dated the Pricing Date;
3. the Opinion of Seller's Counsel, dated the Pricing Date;
4. the Opinion of Seller's Counsel (bringdown opinion), dated the Closing Date;
5. the Purchase and Sale Agreement, dated as of November 1, 2009;
6. the Bill of Sale and Bringdown Certificate, dated the Closing Date; and
7. the Irrevocable Instructions to Controller, dated the Closing Date.
The foregoing documents are to be held in escrow by Transaction Counsel and
shall be delivered on the Closing Date (as defined in the Purchase and Sale Agreement),
provided that such Closing Date occurs on or before December 31, 2009.
E -1
y0 0 9 • ,4 .13
EXHIBIT E
ESCROW INSTRUCTION LETTER
ESCROW INSTRUJZTION LETTER
2009
California Statewide Communities Dev opment Authority
1100 K Street
Sacramento, CA 95814
Re: Proposition IA Receivable Financing
Dear Sir or Madam:
The City of El Segundo (the "Seller ") hereby notifies you of its agreement to
participate in the California Statewide Communities Development Authority Proposition IA
Receivable Financing. By adoption of a resolution (the "Resolution ") authorizing the sale of its
Proposition IA Receivable, the Seller's City Council has agreed to sell to the California
Statewide Communities Development Authority (the "Purchaser "), for a purchase price that
meets the conditions set forth in the Resolution, all of its right, title and interest in the
Proposition IA Receivable.
Enclosed herewith are the following documents which have been duly approved
and executed by the Seller and which are to be held in escrow by Orrick, Herrington &
Sutcliffe LLP, as transaction counsel ( "Transaction Counsel "), as instructed below:
1. certified copy of the Resolution, together with a certificate of the City Clerk,
dated the Pricing Date;
2. the Seller Certificate, dated the Pricing Date;
3. the Opinion of Seller's Counsel, dated the Pricing Date;
4. the Opinion of Seller's Counsel (bringdown opinion), dated the Closing Date;
5. the Purchase and Sale Agreement, dated as of November 1, 2009;
6. the Bill of Sale and Bringdown Certificate, dated the Closing Date; and
7. the Irrevocable Instructions to Controller, dated the Closing Date.
The foregoing documents are to be held in escrow by Transaction Counsel and
shall be delivered on the Closing Date (as defined in the Purchase and Sale Agreement),
provided that such Closing Date occurs on or before December 31, 2009.
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Should (i) the Closing Date not occur on or before December 31, 2009, or (ii)
Transaction Counsel receive prior to the Closing Date written notification from Seller or Seller's
Counsel stating, respectively and in good faith, that the representations made in the Seller's
Certificate are not true and 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 provided that the Purchaser may, in its sole
discretion, choose to waive receipt of such representations or opinions, then this agreement shall
terminate and Transaction Counsel shall destroy all of the enclosed documents.
Enclosures
cc: Orrick, Herrington & Sutcliffe LLP
Very truly yours,
CITY OF EL SEGUNDO
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Officer