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HomeMy WebLinkAboutContracts & Agreements_130-20050 ORRICK June 13, 2005 Re California Statewide Communities Development Authority Vehicle License Fee (VLF) Receivable Financing Program To Participating Local Agency oPRICK 1E./n11(3TCIN 1if. Y ;' P r}lr '7F? !: Ft 1.111 CrIv"Q6 lifts; ifT4'¢APO 5rI?EC1- 514 Fr'ANf 1,rc3 (A 41(1'. )1;13`) // 3 5 la,. its PO Y O`?RI[ I' i Uhl Enclosed are the final versions of the resolutions and documents that your local agency will need to approve and execute in order to participate in the Vehicle License Fee (VLF) Receivable Financing Program sponsored by the California Statewide Communities Development Authority (CSCDA) Enclosed are three (3) copies of the following documents (A) Resolution approving participation in the VLF Receivable Financing Program (the "VLF Resolution"), and (B) Purchase and Sale Agreement (the "Sale Agreement") In addition, attached to the Sale Agreement are the following documents (C) Opinion of Counsel to be delivered in connection with pricing (Exhibit B 1), (D) Bnngdown Opinion of Counsel to be delivered in connection with closing (Exhibit B2), (E) Certificate of the City/Town Clerk or the Clerk of the Board of Supervisors, as applicable (Exhibit C1), (F) Seller Certificate (Exhibit C2), (G) Bill of Sale and Brmgdown Certificate (Exhibit C3), (H) Irrevocable Instructions to Controller (Exhibit D),and (I) Escrow Instruction Letter (Exhibit F) Please note that these documents are in final form and may not be changed without the approval from Orrick, Herrington & Sutcliffe LLP, Transaction Counsel (` Orrick') If you have questions or believe changes are required, please contact one of the Orrick team member's listed at the end of this letter I Instructions for Adoption of Resolutions Please take the following steps with respect to the enclosed resolutions (A) Adopt the VLF Resolution to participate in the VLF Receivable Financing Program Agenda Language The following language should be used for the agenda of the meeting at which the VLF Resolution will be adopted "A RESOLUTION APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF A Taxable/Member DOCSSF1 795566.3 0 ORRICK PURCHASE AND SALE AGREEMENT AND RELATED DOCUMENTS WITH RESPECT TO THE SALE OF THE SELLER'S VEHICLE LICENSE FEE RECEIVABLE FROM THE STATE, AND DIRECTING AND AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH " Sample Staff Report A sample Staff Report can be obtained from CSCDA's website at https //secure cacommunities com/cacomm/apps/vlf/ Adoption Deadline. The VLF Resolution must be adopted no later than June 30, 2005 in order to participate in the initial phase of the financing Fill in blanks and sign The Clerk should fill in the resolution number, the adoption date and the governing board information, and sign the three (3) copies of the VLF Resolution where indicated by the RED tabs Your legal counsel should approve the form by signing each copy of the VLF Resolution where indicated by the GREEN tabs 2 Instructions for Execution of Documents Please take the following steps with respect to the enclosed documents (A) Sign the Sale Agreement (B) Please arrange for an authorized officer to sign all three (3) copies of the Sale Agreement where indicated by the YELLOW "SIGN HERE" tabs Once your local agency has adopted the VLF Resolution and has signed the Sale Agreement, your local agency's obligations under the Sale Agreement are binding and are irrevocable Have legal counsel sign the legal opinion (Exhibit B1 to Sale Agreement) Please arrange for legal counsel to sign all three (3) copies of the legal opinion attached as Exhibit B1 of the Sale Agreement where indicated by the GREEN tabs Such legal counsel may be the Town Attorney, City Attorney or County Counsel, as appropnate There is no requirement that the legal opinion be placed on the letterhead of such legal counsel (C) Sign Clerk's Certificate (Exhibit C1 to Sale Agreement) Please arrange for the Town Clerk, City Clerk or Clerk of the Board of Supervisors, as appropriate, (1) to manually write on the signature page of the Certificate attached as Exhibit C 1 to the Sale Agreement in the appropnate places the resolution number, the adoption date and the governing board information, and (2) to sign all three (3) copies of the Certificate where indicated by the RED tabs Taxable/Member DOCSSF1 795566.3 -2- 0 ORRICK (D) Sign Seller Certificate (Exhibit C2 to Sale Agreement) Please arrange for all three (3) copies of the Seller Certificate attached as Exhibit C2 to the Sale Agreement to be signed by (1) the authorized officers of your local agency where indicated by the YELLOW ` SIGN HERE" tabs, and (2) the Town Clerk, City Clerk or Clerk of the Board of Supervisors, as appropriate, where indicated by the RED tabs (E) Sign Irrevocable Instructions to Controller (Exhibit D to Sale Agreement) Please arrange for an authorized officer to sign all three (3) copies of the Irrevocable Instructions to Controller attached as Exhibit D to the Sale Agreement where indicated by the YELLOW "SIGN HERE" tabs Please leave the document UNDATED — we will insert the date of the closing later and send the completed Irrevocable Instructions to Controller to the State Controller upon closing on behalf of your local agency (F) Sign Escrow Instruction Letter (Exhibit F to the Sale Agreement). Please arrange for an authonzed officer to sign all three (3) copies of the Escrow Instruction Letter attached as Exhibit E to the Sale Agreement where indicated by the YELLOW "SIGN HERE" tabs (G) Do NOT Sign the Bnngdown Opinion or the Bill of Sale at this time (Exhibits B2 and C3 to the Sale Agreement) Please do not Sign the Bnngdown Opinion or Bill of Sale at this time (Exhibits B2 and C3 to the Sale Agreement) These two documents will be sent to you for execution after the pricing of the Notes but prior to the closing (See paragraph 4 below ) 3 Return Executed Documents and Resolutions to Orrick As mentioned above, the VLF Resolution must be adopted no later than June 30, 2005 in order to participate in the VLF Receivable Financing Program As soon as possible thereafter, and in any event no later than July 8, 2005, all three (3) ongmally executed copies of the documents and resolutions described above need to be returned to Orrick, Herrington & Sutcliffe LLP 405 Howard Street San Francisco, California 94105 Attention Michael Eng (415) 773-5454 (direct dial) (415) 773-5759 (fax) meng@orrick corn (CSCDA VLF Financing) A self-addressed, prepaid federal express envelope has been enclosed with this letter to facilitate your return of these resolutions and documents Taxable/Member DOCSSFI 795566.3 -3- O ORRICK 4. Conclusion of Transaction After Orrick receives the executed documents described above, CSCDA and its investment bankers will pnce the Notes on or about July 14, 2005 At that time, CSCDA will know the exact Purchase Price that your local agency will be paid for its VLF receivable (the "Final Purchase Price") As described in the Sale Agreement, the Final Purchase Price will be at least equal to the Minimum Purchase Price indicated in the VLF Resolution and the Sale Agreement If the Authonty cannot achieve the Minimum Purchase Price, your local agency's VLF Receivable will not be purchased and you will be notified that you have been removed from the financing program Please review carefully the Minimum Purchase Price indicated in the VLF Resolution and the Sale Agreement to ensure that it accurately reflects the minimum amount for which your local agency will sell its VLF Receivable Once pricing occurs, Omck will send to you an additional package which will contain (1) a notification of the Final Purchase Price (or that your local agency has been removed from the program as descnbed above), and (2) the two additional documents that your local agency will need to sign and return before the closing of the financing, which are (a) the Bill of Sale and Bnngdown Certificate (Exhibit B2 to the Sale Agreement), and (b) the Seller's Bnngdown Certificate and Receipt (Exhibit C3 to the Sale Agreement) Your local agency does not need to sign and return these two documents at this time as these documents will be finalized and sent to you after the pncing of the Notes 5 Contacts for Further Information If you have any questions regarding this letter, the instructions contained herein., or the documents enclosed herewith, please call Michael Eng at (415) 773-5454, Patricia Wyler at (415) 773-5912, David Stevens at (415) 773-5503, or John Knox at (415) 773-5626 Taxable/Member DOCSSF1 795566.3 -4- Very Truly Yours, John H Knox /2- -t CITY OF REDLANDS, CALIFORNIA, as Seller and CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY, as Purchaser PURCHASE AND SALE AGREEMENT Dated July 14, 2005 Taxable DOCSSF1 817948 1 TABLE OF CONTENTS Page 1 DEFINITIONS AND INTERPRETATION 1 2 AGREEMENT TO SELL AND PURCHASE, CONDITIONS PRECEDENT 2 3 CONVEYANCE OF VLF RECEIVABLE AND PAYMENT OF FINAL PURCHASE PRICE 3 4 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER 3 5 REPRESENTATIONS AND WARRANTIES OF THE SELLER 3 6 COVENANTS OF THE SELLER 6 7 THE PURCHASER'S ACKNOWLEDGMENT 7 8 NOTICES OF BREACH . ...... 7 9 LIABILITY OF SELLER, INDEMNIFICATION 7 10 LIMITATION ON LIABILITY ... 8 11 THE SELLER'S ACKNOWLEDGMENT 8 12 NOTICES ..., .. 8 13 AMENDMENTS 8 14 SUCCESSORS AND ASSIGNS 8 15 THIRD PARTY RIGHTS ....... 9 16 PARTIAL INVALIDITY ... ........ 9 17 COUNTERPARTS 9 18. ENTIRE AGREEMENT ... , .... . 9 19 GOVERNING LAW , ... 10 EXHIBIT A — DEFINITIONS ...... .. A-1 EXHIBIT B1 — OPINION OF SELLER'S COUNSEL B1-1 EXHIBIT B2 — BRINGDOWN OPINION OF SELLER'S COUNSEL ... B2-1 EXHIBIT C1 — CLERK'S CERTIFICATE CI -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 — RESERVED , , E-1 EXHIBIT F — ESCROW INSTRUCTION LETTER F-1 Taxable DDCSSFI 817948 1 PURCHASE AND SALE AGREEMENT THIS PURCHASE AND SALE AGREEMENT, dated July 14, 2005 (this "Agreement"), is entered into by and between (1) CITY OF REDLANDS, a municipal corporation of the State of California (the "Seller"), and (2) CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY, a point exercise of powers authority organized and existing under the laws of the State of California (the "Purchaser") RECITALS A The Seller is the owner of the VLF Receivable (as defined below) B The Seller is willing to sell, and the Purchaser is willing to purchase, the VLF Receivable upon the terms specified in this Agreement C The Purchaser will issue its taxable and tax-exempt notes (the "Notes") 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 VLF Receivable from the Seller D The Purchaser will grant a security interest in such VLF Receivable to the Trustee and each Credit Enhancer to secure the Notes 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 ascnbed 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 exhibits 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 Taxable DOCSSF1 817948 1 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 cash paid by the Purchaser in an amount equal to the amount determined pursuant to Section 3(a) (the "Final Purchase Pnce"), which shall be not less than $1,040,000 00 (the "Minimum Purchase Price"), all future right, title and interest of the Seller in and to the "VLF Receivable" as defined in Section 6585(i) of the California Government Code (the "VLF Receivable"), namely, the right to payment of moneys due or to become due to the Seller out of funds payable in connection with vehicle license fees to a local agency pursuant to Section 10754 11 of the California Revenue and Taxation Code The Purchaser shall pay the Final Purchase Pnce by transfemng such Final Purchase Price directly to the Seller (b) The performance by the Purchaser of its obligations hereunder shall be conditioned upon (i) Transaction Counsel receiving on or before the date the Notes are sold (the "Pricing Date"), to be held in escrow until the Closing Date and then delivered to the Purchaser on the Closing Date, the following documents 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 C 1 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 F, (n) Transaction Counsel receiving on or before the Closing Date, (1) a bnngdown opimon 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 bnngdown certificate of the Seller (the "Bill of Sale") in substantially the foam attached hereto as Exhibit C3provided that the Purchaser may waive in its sole discretion the requirements of Section 2(b)(n)(1), and (iii) the Purchaser issuing notes in an amount which will be sufficient to pay the Final Purchase Price (c) The performance by the Seller of its obligations hereunder shall be conditioned solely upon the Purchaser's payment of the Final Purchase Price 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. Taxable 2 DOCSSFI 817948 1 (d) The Final Purchase Price shall be an amount that satisfies the conditions of Section 2 of the Resolution referred to in Section 2(b)(i)(5) above. 3 Conveyance of VLF Receivable and Payment of Final Purchase Price (a) Upon pricing of the Notes by the Purchaser, the Purchaser will inform the Seller of the Final Purchase Price, which shall be an amount at least equal to the Minimum Purchase Price, and which shall be determined by the Purchaser based on the final interest rates, costs of credit enhancement and issuance and terms of the Notes Upon pricing of the Notes, the Purchaser shall deliver a certificate to the Seller indicating the Final Purchase Price to be paid to the Seller on the Closing Date (b) In consideration of the payment and delivery by the Purchaser to the Selier of the Final Purchase Price, 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 VLF Receivable, and (u) assign to the Purchaser, to the extent permitted by law (as to which no representation is made), all present or future nghts, if any, of the Seller to enforce or cause the enforcement of payment of the VLF Receivable pursuant to the Act and other applicable law 4 Representations and Warranties of the Purchaser The Purchaser represents and warrants to the Seller that, as of the date hereof, (a) it is duly organized, validly existing and in good standing under the laws of the State of California, (b) it has full power and authonty to enter into this Agreement and to perform its obligations hereunder, (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, and (d) 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, moratonum, fraudulent conveyance and other similar laws relating to or affecting creditors' nghts generally or the application of equitable pnnciples in any proceeding, whether at law or in equity 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 municipal corporation validly existing under the laws and Constitution of the State of California, with full power and authonty 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 VLF 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 Selier of this Agreement has been duly authorized by the Seller by all necessary action Taxable 3 170CSSF1 817948 1 (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 authonzation, execution and delivery of this Agreement by the Purchaser, 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 VLF Receivable or the performance by the Seller of its obligations under the Resolution and the Transaction Documents and any other applicable agreements, have been obtained and are in full force and effect (e) Insofar as it would materially adversely affect the SelIer'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 oldie 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 in any material respect 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 (f) 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 VLF 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 the Seller 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 VLF Receivable or which if determined adversely to the Seller would have an adverse effect upon the Seller's ability to sell the VLF Receivable, nor to the knowledge of the Seller is there any basis therefor. Taxable 4 DOCSSFI 817948 1 (g) Prior to the sale of the VLF Receivable to the Purchaser, the Seller was the sole owner of the VLF Receivable, and has such right, title and interest as provided in the Act From and after the conveyance of the VLF Receivable by the Seller to Purchaser on the Closing Date, the Seller shall have no interest in the VLF 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 VLF Receivable, nor has the Seller created, or to the knowledge of the Seller permitted the creation of, any hen, pledge, security interest or any other encumbrance (a "Lien") thereon Prior to the sale of the VLF Receivable to the Purchaser, the Seller held title to the VLF Receivable free and clear of any Liens As of the Closing Date, this Agreement, together with the Bill of Sale, constitutes a valid sale to the Buyer of the Seller's right, title and interest in and to the VLF Receivable (h) The Seller acts solely through its authorized officers or agents (i) The Seller maintains records and books of account separate from those of the Purchaser (j) 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 35 Cajon Street, Redlands, CA 92373.1505. (1) The Seller has received reasonably equivalent value for the VLF Receivable (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 to satisfy the claims of such creditor (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 received a hardship advance of all or a portion of the VLF Receivable pursuant to Section 10754(a)(3)(D)(ui) of the Revenue and Taxation Code, or, if the Seller has received such an advance, the VLF Receivable to be conveyed to the Purchaser on the Closing Date is net of such advance Taxable 5 iDOCSSF1 817948 1 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 VLF Receivable and in the proceeds thereof The Seller shall not take any action or omit to take any action that shall adversely affect the ability of the Purchaser, and any assignee of the Purchaser, to receive payments made under the Act (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 assignee, amend, modify, terminate, waive or surrender, or agree to any amendment, modification, termination, waiver or surrender of, the tennis of the Act, or waive timely performance or observance under the Act, in each case if the effect thereof would be materially adverse to the Purchaser or to the Noteholders or any Credit Enhancer as assignees of the Purchaser 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 (11) the Seller shall take all actions necessary to preserve, maintain and protect the title of the Purchaser to the VLF Receivable, provided that such acts shall not impose any additional cost on the Seller that is not reimbursed (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 6588.5(c) of California Government Code to cause the Controller to disburse all payments of the VLF Receivable to the Trustee, together with notice of the sale of the VLF 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 The Seller hereby relinquishes and waives any control over the VLF Receivable, any authonty to collect the VLF Receivable, and any power to revoke or amend the instructions to the Controller contemplated by this paragraph 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 VLF Receivable In the event that the Seller receives any proceeds of the VLF 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 Sellei 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 Taxable 6 DOCSSFI 817998 1 (g) The Seller shall treat the sale of the VLF Receivable as a sale for regulatory and accounting purposes (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 VLF Receivable, nor shall the Seller create, or to the knowledge of the Seller pen -nit the creation of, any Lien thereon 7 The Purchaser's Acknowledgment The Purchaser acknowledges that the VLF Receivable is not a debt or liability of the Seller, and that the VLF Receivable is payable solely by the State from the funds of the State provided therefore Consequently, neither the taxing power of the Seller, nor the full faith and credit thereof is pledged to the payment of the VLF Receivable No representation is made by the Seller concerning the obligation of the State to make any payment of the VLF Receivable pursuant to Section 10754 11 of the Revenue and Taxation Code, 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 10754 11 of the Revenue and Taxation Code or Section 6588 5 of the Government Code) 8 Notices of Breach (a) Upon discovery by the Seller or the Purchaser that the Seller 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 VLF Receivable, 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 Noteholders, or any Credit Enhancer for any loss, cost or expense resulting solely 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 Notes issued by the Purchaser Taxable 7 DOCSSF1 817948 1 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, pnma facie properly executed and submitted by any Person respecting any matters arising hereunder The Seller shall not be under any obhgation 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 dehvered 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 nghts hereunder and (b) the VLF Receivable, to the Trustee and each Credit Enhancer pursuant to the Indenture The Seller further agrees and acknowledges that the Trustee, the Noteholders, 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 VLF 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 Noteholders, 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 wntten 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 nghts or obligations under this Agreement without the pnor wntten 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 pnor wntten consent of the Seller Taxable 8 DOCSSFI 817948 1 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 nght, 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, mvand or unenforceable in any respect under the law of anylunsdiction, 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 junsdiction 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 Taxable 9 DOCSSFI 817948 1 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 Purchase and Sale Agreement to be duly executed as of the date first written above Taxable DOCSSFI 817948 1 CITY OF REDLANDS, as Seller 17—fp Authorizedf�icer CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY, as Purchaser By Member 10 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 Section 10754 11 of the California Revenue and Taxation Code "Bill of Sale" has the meaning given to that term in Section 2(b)(ii) hereof "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 Notes "Credit Support Instrument" means a policy of insurance, a letter of credit, a stand-by purchase agreement, 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 the purchase price of the Notes "Closing Date" means the date the Notes are issued "Controller" means the Controller of the State "Final Purchase Price" has the meaning ascribed thereto in Section 2 "Minimum Purchase Price" has the meaning ascribed thereto in Section 2 "Noteholder" means, with respect to any Note, the person in whose name such Note is registered "Oustanding" has the meaning given to that term in the Indenture "Pncing Date" means the date the Notes are sold "Rating Agency" means any nationally recognized rating agency then providing or maintaining a rating on the Notes at the request of the Purchaser. "Rating Agency Confirmation" means wntten 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 Outstanding Notes "Resolution" means the resolution adopted by the City Council approving the sale of the VLF Receivable Taxable DOCSSFE 817948 1 "State" means the State of California "Transaction Counsel" means Orrick, Herrington & Sutcliffe LLP A-1 and the Notes Taxable DOCSSF1 8179481 "Transaction Documents" mean this Agreement, the Bill of Sale, the Indenture, A-2 EXHIBIT B1 OPINION OF COUNSEL to CITY OF REDLANDS July 14, 2005 California Statewide Communities Development Authonty Sacramento, California Wells Fargo Bank, National Association Los Angeles, California Re Sale of VLF Receivable Ladies & Gentlemen This Office acted as counsel for the City of Redlands (the "Seller") in connection with the 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 "VLF Receivable", as defined in and pursuant to the Purchase and Sale Agreement dated July 14, 2005 (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 VLF Receivable to the Controller of the State of California (the "Disbursement Instructions" and collectively with the Sale Agreement, 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 We 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 we deem necessary in order to render the following opinions As to paragraphs numbered 3 and 4 below, we have retied as to factual matters on the representations and warranties of the Seller contained in the Sale Agreement Based upon the foregoing, we are of the opinion that 1 The Seller is a municipal corporation and general law city, duly organized and validly existing pursuant to the laws and the Constitution of the State of California The Governing Body is the governing body of the Seller Taxable DOCSSF1 817948 1 B1-1 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 our best 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 of officers to their respective offices, (ii) seeking to restrain or to enjoin the sale of the VLF Receivable or to direct the application of the proceeds of the sale thereof, (iii) in any way contesting or affecting the validity or enforceability of the Resolution, the Seller Documents or any other applicable agreements or any action of the Seller contemplated by any of said documents, (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, or (v) in any way seeking to enjoin or restrain the Seller from selling the VLF Receivable or which, if determined adversely to the Seller, would have a material and adverse effect upon the Seller's ability to sell the VLF Receivable 4 To our best knowledge, prior to the sale of the VLF 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 all or any portion of the Seller's VLF 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 6 Assuming delivery of the Seller Documents by the Seller and the due authorization execution and delivery of the Seller Documents by the Purchaser, each Seller Document will be legal, vand and binding against the Seller and enforceable against the Seller in accordance with its own 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 of the State of California to make any payment of the VLF Receivable pursuant to Section 10754 11 of the Revenue and Taxation Code, 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 10754 11 of the Revenue and Taxation Code or Section 6588.5 of the Government Code), Furthermore, we express no opinion as to the value of the VLF Receivable or as to any legal or equitable remedies that may be available to any person should the VLF Receivable have little or no value Taxable DOCSSI1 817948 1 B1-2 This opinion is rendered only with respect to the laws of the State of California and the United States of America and is addressed only to its addressees In addition to the addressees hereof, each Credit Enhancer and the underwriters of the Notes may rely upon this legal opinion as if it were addressed to them No other person is entitled to rely on this opinion, nor may the addressees rely on it in connection with any transactions other than those described herein Taxable DOCSSFI 517948 1 Very truly yours, By ravat, B1-3 Sel 's Counsel OPINION OF COUNSEL to CITY OF REDLANDS [Closing Date] California Statewide Communities Development Authority Sacramento, California Wells Fargo Bank, National Association Los Angeles, California Re Sale of VLF Receivable (Bnngdown Opinion) Ladies & Gentlemen EXHIBIT B2 Pursuant to that certain Purchase and Sale Agreement dated July 14, 2005 (the "Sale Agreement") between the City of Redlands (the "Seller") and the California Statewide Communities Development Authority (the "Purchaser"), this Office delivered an opinion (the "Opinion") dated the Pricing Date (as defined in the Sale Agreement) as counsel for the Seller in connection with the sale of the Seller's VLF Receivable (as defined in the Sale Agreement), the execution of documents related thereto and certain other related matters I confirm that you may continue to rely upon the Opinion as if it were dated as of the date hereof Each Credit Enhancer, the underwriters of the Notes and Transaction Counsel may rely upon this legal opinion as if it were addressed to them This letter is delivered to you pursuant to Section 2(b)(n)(1) of the Sale Agreement Taxable DOCSSFI 817948 1 Very truly yours, By. Seller's Counsel B2-1 EXHIBIT CI CLERK'S CERTIFICATE CERTIFICATE OF THE CITY CLERK OF CITY OF REDLANDS, CALIFORNIA Dated July 14, 2005 The undersigned City Clerk of the City of Redlands, California, do hereby certify that the foregoing is a full, true and correct copy of Resolution No 6412 duly adopted at a regular meeting of the City Council of said Seller duly and regularly and legally held at the regular meeting place thereof on the 28th day of June , 2005, of which meeting all of the members of said City Council had due notice and at which all members thereof were present, and that at said meeting said resolution was adopted by the following vote AYES Councilmembers Gil, George, Harrison, Mayor Peppier NOES Councilmember Gilbreath ABSENT None 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 an agenda of said meeting was posted at least 72 hours before said meeting at a location in the City of Redlands, California freely accessible to members of the public, and a brief general description of said resolution appeared on said agenda WITNESS my hand as of the day and year first above wntten By6'-° , J Taxable DOCSSF1 817948 1 C1-1 Clerk of t�ie�,Cit� of Redlands, California EXHIBIT C2 SELLER CERTIFICATE SELLER CERTIFICATE Dated July 14, 2005 We, the undersigned officers of the City of Redlands (the "Seller"), State of California, holding the respective offices herein below set opposite our signatures, do hereby certify that on the date hereof the following documents (the "Transaction Documents") were officially executed and delivered by the Authorized Officer or Officers whose names appear on the executed copies thereof, to wit Document 1 Purchase and Sale Agreement, dated July 14, 2005 (the "Sale Agreement"), between the Seller and the California Statewide Communities Development Authority (the "Purchaser") 2 irrevocable Instructions For Disbursement of Seller's VLF Receivable to the Controller of the State of California 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 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 contained in the Transaction Documents are true and correct as of the date hereof in all matenal respects. 3 The City Council duly adopted its resolution (the "Resolution") approving the sale of the Seller's VLF Receivable at a meeting of the City Council which was duly called and held pursuant to law with all pubhc 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. 4 To the best knowledge of the undersigned, no action, suit, proceeding, inquiry or investigation, at law of in equity, before or by any court, pubhc 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 Seller's VLF Receivable or to direct the apphcation thereof of the proceeds of the sale thereof, or in any way contesting or affecting the validity or enforceability of the Resolution, the Transaction Documents, the Indenture, the Notes, or any Taxable DOCSSF1 817948 1 C2-1 other applicable agreements 01 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 or any other applicable agreement, or any action on the part of the Seller contemplated by any of said documents, or which if determined adversely to the Seller would have a material and adverse effect upon the Seller's ability to sell the Seller's VLF Receivable, nor to our knowledge is there any basis therefor 5 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, 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 apphcable 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 our knowledge, 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, and compliance by the Seller with the provisions thereof, under the circumstances contemplated thereby, do not and will not in any material respect 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 6 Pnor to the sale of the VLF Receivable to the Purchaser, the Seller was the sole owner of the VLF Receivable, and has such right, title and interest as provided in the Act From and after the conveyance of the VLF Receivable by the Seller to Purchaser on the Closing Date, the Seller shall have no interest in the VLF Receivable Except as provided in the Sale Agreement, the Seller has not sold, transferred, assigned, set over or otherwise conveyed any nght, title or interest of any kind whatsoever in all or any portion of the Seller's VLF Receivable, nor has the Seller created, or to our knowledge permitted the creation of, any Lien thereon Pnor to the sale of the VLF Receivable to the Purchaser, the Seller held title to the VLF Receivable free and clear of any Liens 7 All approvals, consents, authonzations, 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 materially adversely affect, the sale by the Seller of the Seller's VLF Receivable or the performance by the Seller of its obligations under the Resolution and the Transaction Documents and any other applicable agreements, have been obtained and are in full force and effect 8 The Seller has not received a hardship advance of all or a portion of the VLF Receivable pursuant to Section 10754(a)(3)(D)(in) of the Revenue and Taxation Code, or, if the Seller has received such an advance, the VLF Receivable to be conveyed to the Purchaser on the Closing Date is net of such advance Taxable DOCSSF1 817948 1 C2-2 Dated as of the date first above written Name, Official Title Susan Peppler, Mayor John Davison, City Manager Tina T Kundig, Finance Director genuine Taxable DOCSSFI 817948 1 I HEREBY CERTIFY that the signatures of the officers named above are Dated as of the date first above wntten C2-3 C><tr Clerk of t ieiW of Redlands, California EXHIBIT C3 BILL OF SALE AND BRINGDOWN CERTIFICATE BILL OF SALE AND BRINGDOWN CERTIFICATE In consideration of the payment and delivery by the California Statewide Communities Development Authority (the "Purchaser") to the undersigned (the "Seller") of $[Final Purchase Price] (the "Final Purchase Pnce"), and pursuant to terms and conditions of the Purchase and Sale Agreement (the "Sale Agreement"), dated July 14, 2005, between the Seller and the Purchaser, 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 VLF Receivable as defined in the Sale Agreement (the "VLF 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 VLF Receivable pursuant to the Act (as defined in the Sale Agreement) and other applicable law The Seller hereby acknowledges receipt of the Final Purchase Price The Seller hereby certifies that the representations and warranties of the Seller set forth in the Certificate of the City Clerk dated July 14, 2005, the Seller Certificate dated July 14, 2005, and in the Transaction Documents (as such terms are defined in the Sale Agreement) are true and correct in all matenal 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) Dated [Closing Date] Taxable DOCSSF1 817948 1 C3-1 CITY OF REDLANDS By Authonzed Officer EXHIBIT D IRREVOCABLE INSTRUCTIONS TO CONTROLLER IRREVOCABLE INSTRUCTIONS FOR DISBURSEMENT OF VLF RECEIVABLE OF CITY OF REDLANDS Office of the Controller State of California P O Box 942850 Sacramento, California 94250-5872 , 2005 Re Notice of Sale of VLF Receivable by the City of Redlands and Wiring Instructions Information Form Dear Sir or Madam Pursuant to Section 6588 5(c) of the California Government Code, City of Redlands (the "Seller") hereby notifies you of the sale by Seller, effective as of the date of these instructions wntten above, of all nght, title and interest of the Seller in and to the "VLF Receivable" as defined in Section 6585(1) of the California Government Code (the "VLF Receivable"), namely, the nght to payment of moneys due or to become due to the Seller out of funds payable in connection with vehicle license fees to a local agency pursuant to Section 10754 11 of the California Revenue and Taxation Code. By resolution, the Seller's City Council authonzed the sale of the VLF Receivable to the California Statewide Communities Development Authority (the "Purchaser") pursuant to a Purchase and Sale Agreement, dated July 14, 2005 and a Bill of Sale, dated [Closing Date] The VLF Receivable has been pledged and assigned by the Purchaser pursuant to an Indenture, dated July 14, 2005 (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 wntten above, all payments of the VLF 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 VLF Receivable by the Seller is irrevocable and that (i) the Seller has no power to revoke or amend these instructions at any time, (n) 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. Taxable DOCSSF1 817948 1 D-1 Bank Name Bank ABA Routing # Bank Account # Bank Account Name Further Credit To. Bank Address Bank Telephone # Bank Contact Person Wells Fargo N A. 121000248 0001038377 Corporate Trust Clearing CSCDA VLF #17848700 Wells Fargo Bank 707 Wilshire Blvd , 17 Floor 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. Taxable DOCSSFI 817948 1 Very truly yours, CITY OF REDLANDS By Authorized O facer D-2 Taxable DOCSSF1 817948 1 E-1 EXHIBIT E RESERVED EXHIBIT F ESCROW INSTRUCTION LETTER PARTICIPATION AGREEMENT AND ESCROW INSTRUCTION LETTER July 14, 2005 California Statewide Communities Development Authority 1100 K Street Sacramento, CA 95814 Re VLF Receivable Financing Dear Sir or Madam The City of Redlands (the "Seller") hereby notifies you of its agreement to participate in the California Statewide Communities Development Authority VLF Receivable Financing By adoption of a resolution (the "Resolution") authorizing the sale of its VLF Receivable, the Seller's City Council has agreed to sell to the California Statewide Communities Development Authority, for a purchase price that meets the conditions set forth in the Resolution, all of its nght, title and interest in the VLF Receivable Enclosed herewith ale the following documents which have been duly approved and executed by the Seller and which are to be held in escrow by Orrick, Hemngton & 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 July 14, 2005, 2 the Seller Certificate, dated July 14, 2005, 3 the Opinion of Seller's Counsel, dated July 14, 2005, 4 the Purchase and Sale Agreement, dated July 14, 2005, and 5 the Irrevocable Instructions to the Controller, undated The foregoing documents are to be held in escrow by Transaction Counsel and shall be delivered only upon payment to the Seller on or before August 31, 2005, of the Final Purchase Price (as defined in the Purchase and Sale Agreement) that meets the conditions of the Resolution. Upon such payment, Transaction Counsel is hereby authorized to fill in the closing date on the Irrevocable Instructions to the Controller Taxable DOCSSF1 81708 1 F-1 If the Final Purchase Price meeting the conditions of the Resolution is not paid to the Seller on or before August 31, 2005, this agreement shall terminate and Transaction Counsel shall return all of the enclosed documents to the Seller Enclosures cc Orrick, Herrington & Sutcliffe LLP Taxable DOCSSFI 817948 1 Very truly yours, CITY OF REDLANDS By F-2 Authorized Offic r RESOLUTION NO 6412 CITY COUNCIL OF THE CITY OF REDLANDS A RESOLUTION APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF A PURCHASE AND SALE AGREEMENT AND RELATED DOCUMENTS WITH RESPECT TO THE SALE OF THE SELLER'S VEHICLE LICENSE FEE RECEIVABLE FROM THE STATE, AND DIRECTING AND AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH WHEREAS, certain public agencies within the State of California (the "State") are entitled to receive certain payments payable by the State to each such local agency on or before August 15, 2006, in connection with vehicle license fees pursuant to Section 10754 11 of the California Revenue and Taxation Code ("VLF Gap Repayments"), WHEREAS, the City of Redlands (the "Seller") is entitled to and has determined to sell all right, title and interest of the Seller in and to the "VLF Receivable", as defined in Section 65850) of the California Government Code (the "VLF Receivable"), namely, the nght to payment of moneys due or to become due to the Seller out of funds payable in connection with vehicle license fees to a local agency pursuant to Section 10754 11 of the California Revenue and Taxation Code, WHEREAS, the California Statewide Communities Development Authonty, a joint exercise of powers authority organized and existing under the laws of the State (the "Authonty"), has been authorized pursuant to Section 6588(w) of the California Government Code to purchase the VLF Receivable, WHEREAS, the Authority desires to purchase the VLF Receivable and the Seller desires to sell the VLF Receivable pursuant to a purchase and sale agreement by and between the Seller and the Authority in the form presented to this City Council (the "Sale Agreement") for the purposes set forth herein, WHEREAS, in order to finance the purchase price of the VLF Receivable from the Seller and the purchase price of other VLF Receivables from other local agencies, the Authority will issue its taxable and tax-exempt notes (the "Notes") pursuant to Section 6590 of the California Government Code and an Indenture (the "Indenture"), by and between the Authonty and Wells Fargo Bank, National Association, as trustee (the "Trustee"), which Notes will be payable solely from the proceeds of the VLF Receivable and such other VLF Receivables, WHEREAS, the Seller acknowledges that the Authonty will grant a security interest in the VLF Receivable to the Trustee and any credit enhancer to secure payment of the Notes, and WHEREAS, a portion of the proceeds of the Notes will be used by the Authority to, among other things, pay the purchase price of the VLF Receivable, Taxable DOCSSF1 795390 1 WHEREAS, the Seller will use the proceeds received from the sale of the VLF Receivable for any lawful purpose as permitted under the applicable laws of the State, NOW THEREFORE, the City Council of the City of Redlands hereby resolves as follows Section 1 All of the recitals set forth above are true and correct, and this City Council hereby so finds and determines Section 2. The Seller hereby authorizes the sale of the VLF Receivable to the Authonty for a price no less than the Minimum Purchase Price set forth in Appendix A The form of Sale Agreement presented to the City Council is hereby approved An Authorized Officer (as set forth in Appendix A) is hereby authorized and directed to execute and deliver the Sale Agreement on behalf of the Seller, which shall be in substantially the form presented to this meeting, with such changes therein, deletions therefrom and additions thereto, as such Authorized Officer shall approve, which approval shall be conclusively evidenced by the execution and delivery of the Sale Agreement Section 3. Any Authorized Officer is hereby authorized and directed to send, or to cause to be sent, an irrevocable wntten instruction to the State Controller notifying the State of the sale of the VLF Receivable and instructing the disbursement pursuant to Section 6588 5(c) of California Government Code of the VLF Receivable to the Trustee, on behalf of the Authonty. Section 4. The Authorized Officers and such other Seller officers, as appropriate, are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents, including but not limited to one or more tax certificates, if required, appropnate escrow instructions relating to the delivery into escrow of executed documents pnor to the closing of the Notes, and such other documents mentioned in the Sale Agreement or the Indenture, which any of them may deem necessary or desirable in order to implement the Sale Agreement and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution, and all such actions heretofore taken by such officers are hereby ratified, confirmed and approved Section 5 All consents, approvals, notices, orders, requests and other actions permitted or required by any of the documents authonzed by this Resolution, whether before or after the sale of the VLF Receivable or the issuance of the Notes, including without limitation any of the foregoing that may be necessary or desirable in connection with any default under or amendment of such documents, may be given or taken by an Authorized Officer without further authorization by this City Council, and each Authonzed Officer is hereby authorized and directed to give any such consent, approval, notice, order or request, to execute any necessary or appropnate documents or amendments, and to take any such action that such Authonzed Officer may deem necessary or desirable to further the purposes of this Resolution Section 6 The City Council acknowledges that, upon execution and delivery of the Sale Agreement, the Seller is contractually obligated to sell the VLF Receivable to the Authonty pursuant to the Sale Agreement and the Seller shall not have any option to revoke its approval of the Sale Agreement or to determine not to perform its obligations thereunder Taxable DOCSSFI 7953901 2 Section 7. This Resolution shall take effect from and after its adoption and approval PASSED AND ADOPTED by the City Council of the City of Redlands, State of California, this 28th day of June , 2005, by the following vote AYES Councilmembers Gil, George, Harrison; Mayor Peppier NOES Councilmember Gilbreath ABSENT None Attest Com- uc Cit, Clerk Approved as to form SELLER'S COUNSEL By Dated LU June 28, 2005 Taxable DOCSSF1 795390 1 3 APPENDIX A CITY OF REDLANDS Minimum Purchase An amount equal to or greater than $1 ,040,000 00 (the "Minimum Price: Purchase Price") Authorized Officers. Mayor City Manager Finance Director any designee of any of them, as appointed in a written certificate of such Authorized Officer delivered to the Trustee Taxable DOCSSF1 7953901 8 Review the Public Works Department's temporary reorganization as requested by Elaine Craig, San Bernardino Public Employees Association 9 Reinstate the Business License Inspector part-time position in the Treasurer's Office 10 Add a second part-time position in the City Clerk's Office 11 Further study consultant services for one month each quarter for the NPDES program 12 Provide more information regarding the General Plan update 13 Provide additional infoiuiation regarding an early retirement incentive program 14 All supplementals for the enterprise funds under Municipal Utihties Department are to be included in the final budget 15 Consider transferring street sweeping responsibilities to the Municipal Utilities Department On motion of Councilmernber Peppier, seconded by Councilmember Harrison, adoption of the 2005-06 budget was continued to July 5, 2005, at 11 00 A M UNFINISHED BUSINESS Resolution No 6412 - VLF Receivable Financing Program - Continued from the June 21, 2005, meeting, Finance Dit ector Kundig again explained the history of the loss of vehicle license fees fl om the State and the gap repayment and the benefits of pal ticipation in the program for repayment under the California Statewide Communities Development Authority. Councilmember Gil moved to adopt Resolution No 6412, a resolution approving the form of and authorizing the execution and delivery of a purchase and sale agreement and related documents with respect to the sale of the seller's vehicle license fee receivable from the State and directing and authorizing certain other actions in connection therewith Motion seconded by Councilmember George and carried with Councilmember Gilbi eath voting NO as she felt this was an expensive process and that the City did not need the cash flow at this time EIR - Walton Development - Certification of the Final Environmental Impact Report foi Zone Change Nos 396 and 399, Conditional Use Permit Nos 809 and 819, Tentative Tract Nos 16465 and 16627, Agricuiturai Preserve Removal Nos 104 and 105, and Demolition No 79 was presented to the City Council for its consideration on June 21, 2005, and continued to this meeting to give the City's consultant time to incorporate additional information addressing noise and airport proximity issues. The additional information and analysis of the noise and airport issues is included in the revised Final EIR document The additional documentation consists of a letter from George Lessard that was presented to the City Council at the June 21, 2005, hearing, responses to the letter from the EIR consultant, and expanded revisions to the E1R contained in Section 4 0 of the Final EIR document The expanded final EIR also includes appendices containing overall noise analysis and recent aircraft noise study, and comment letters from the Redlands Sports Park project regarding airport proximity issues The Final EIR as revised and expanded re -affirms the previous Adjourned Regular Meeting June 28, 2005 Page 2