HomeMy WebLinkAbout10/7/2009 - STAFF REPORTS - 5.B.CITY COUNCIL
COMMUNITY REDEVELOPMENT AGENCY
CITY OF PALM SPRINGS, CALIFORNIA
0
MINUTES EXCERPT
WEDNESDAY, OCTOBER 7, 2009
5.B. PROPOSED 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 PROPOSITION 1A
RECEIVABLE FROM THE STATE AND DIRECTING AND
AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION
THEREWITH:
Geoffrey Kiehl, Director of Finance, provided background information as
outlined in the staff report dated October 7, 2009.
ACTION: 1) Adopt Resolution No. 22610, "A RESOLUTION OF THE CITY
COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA,
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 PROPOSITION 1A RECEIVABLE FROM THE STATE; AND
DIRECTING AND AUTHORIZING CERTAIN OTHER ACTIONS IN
CONNECTION THEREWITH;" and 2) Authorize the City Manager,
Director of Finance and Treasurer, City Attorney, and City Clerk to
execute all necessary documents subject to final review and approval by
the City Attorney, and subject to authorization from the state. Motion
Councilmember Foat, seconded by Councilmember Hutcheson and
unanimously carried on a roll call vote.
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS)
I, JAMES THOMPSON, City Clerk, City of Palm Springs, California, hereby
certify, that the preceding is an excerpt of the minute action of the Palm Springs City
Council at its regular meeting held on the 7th day of October, 2009.
Dated this 16th day of October, 2009.
ames Thompson, City Clerk
= City of Palm Springs, California
CITY OF PALM SPRINGS. CALIFORNIA,
as Seller
and
CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY,
as Purchaser
PURCHASE AND SALE AGREEMENT
Dated as of November 1. 2009
TABLE OF CONTENTS
Puce
1,
DEFINITIONS AND INTERPRETATION.................................................2
2.
AGREEMENT TO SELL AND PURCH-ASE; CONDITIONS PRECEDENT................2
3.
PURCHASE PRICE, CONVEYANCE OF PROPOSITION lA 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.
LIM I`I'ATION ON LIABILITY .................................................................
..10
11.
'ITIE SELLER'S ACKNOWLEDGMENT......................................................................
10
12.
NOTICES......................................................................................................10
13.
AMENDMENTS............................................................................................10
14.
SUCCESSORS AND ASSIGNS ...................................... ... .........................
10
15.
THIRD PARTY RIG[ ITS....................................... .........................................................
11
16.
PARTIAL INVALIDITY ................................................... ..........................11
17.
COUNTERPARTS....---•............................................................... ...................
11
18.
ENTIRE AGREEMENT.......................................................................................
11
19.
GOVERNING LAW .... ................................................. ............................
12
EXHIBITA—
DEFINITIONS ................ ......................................................... ................A-1
EXHIBIT
Bl —OPINION OF SELLER'S COUNSEL ....................................... ....................
B1-1
EXHIBIT
B2—BRINGDOWN OPINION OF SELLER'S COUNSEL.................................B2-1
EXHIBIT Cl — CLERK'S CERTIFICATE.............................................................................
C1-1
EXHIBIT C2 — SELLER CERTIFICATE......................................------..................................
C2-1
EXI-TT131T
C3 — BILL OF SALE AND BRINGDOWN CERTIFICATE ................................
0-1
EXHIBIT D — IRREVOCABI,E INSTRUCTIONS TO CONTROLLER ................................
D-1
EXHIBIT E — ESCROW INSTRUCTION LETTER .................... .........................
E-1
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PURCHASE AND SALE AGREEMENT
T'I-I IS PURCHASE AND SALE AGREEMENT, dated as of November 1, 2009
(this "Agreement"), is entered into by and between:
(1) CITY OF PALM SPRINGS, a local agency of the Slate 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 lA 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 propose as permitted under the applicable laws ofthc State.
C. The Seller is authorized to sell or otherwise dispose of its property as the
interests of its residents require.
D. The Purchaser, ajoint 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 N willing to sell, and the Purchaser is willing to purchase, the
Proposition IA 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 lA
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.
AGREEMENT
NOW, THEREhORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
1.De fin itions and lntertiretation.
(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 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
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.Ae reement 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 lA 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.deleraynawellsfargo.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 "Pricina 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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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 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 pan 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 lA Receivable has not passed to the Purchaser, should Purchaser fail to make
Installment Payments in the requisite amounts on the Payment Dates.
3.P urchase Price. Conveyance of Proposition lA Receivable and Davment 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
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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
IA 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.Re oresentations 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 lA 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 I Receivable, nor to the
knowledge of the Purchaser is there any basis therefor.
(e) This Agreement, and its execution, delivery and perfomrance 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 teens
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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(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.Re presentations 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 fill power, authority and legal right to sell and assign the
Proposition I A 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
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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 properly 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.
(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 Proposition lA 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 1 A 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 I A 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 lA Receivable by the Seller to Purchaser on the Closing Date, the Seller shall have
no right, title or interest in or to the Proposition lA Receivable. Except as provided in this
ACT 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 lA
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 lA Receivable to the Purchaser, the Seller held title to the
Proposition lA 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 1 A Receivable.
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(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
Q) 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
3200 C. Tahquitz Canyon Road, Palm Springs, CA 92263.
(1) The aggregate amount of the Installment Payments is reasonably equivalent
value for the Proposition IA 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.
in) 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.Cov enants 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
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 perforniance 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
IA 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 lA 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 forth 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 lA 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 I Receivable.
(b) The Seller shall treat the sale of the Proposition IA Receivable as a sale for
regulatory and accounting purposes.
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(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 Se lei, permit the creation of any Lien thereon.
73he Purchaser's Acknowledament. The Purchaser acknowledges that the
Proposition IA Receivable is not a debt or liability of the Seller, and that the Proposition lA
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.
S.Noti ces 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 lA 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.Li abilitv 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.
01
10, Limitation on LiabiliLv
(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 Acknowledement. 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.
10
15. Third Partv Riehts. The Trustee and each Credit Enhancer are express and
intended third party beneficiaries under this Agreement. Nothing expressed in or to be implied
ftom 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 Invaliditv. 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.
is. 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.
19. Governing Law. This Aareement 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
Aareement to be duly executed as of the date first written above.
CITY OF PALM SPRINGS, as Seller
�By_, —
Authoriz�icer
CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY, as Purchaser
m
Authorized Sibnatory
APPROVED BY CITY COUNCIL
1� 2abw `a7
12
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 Geoffrey.Kiehl(a)palmsprings-ca.gov 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 lA 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 Geoffrey.KiehiApalmsprings-ca.gov 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 3200 E. Tahquitz
Canyon Road, Palm Springs, CA 92263,
A-1
"Proposition 1 A 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 fiom 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 I 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 Palm Springs, dated as of the Closing Date.
A-2
EXHIBIT BI
OPINION OF COUNSEL
to
CITY OF PALM SPRINGS
Dated: Pricing Date
California Statewide Communities Development Authority
Sacramento, California
Wells largo Bank, National Association
Los Angeles, California
Re: Sale of Proposition IA Receivable
Ladies & Gentlemen
[I have/This Office has] acted as counsel for the City of Palm Springs (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
"Proposition IA 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 lA 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 terns used but not otherwise
defined herein shall have the meanings given to such terms in the Sale Agreement. [I/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 [Uwe]
deem necessary in order to render the following opinions. As to paragraphs numbered 3 and 4
below, [Ihve] 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/we] are of the opinion that:
i31-1
I. The Seller is a local agency, within the meaning of Section 6585(t) 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 [my/our] 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 lA 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.
d. To the best of [my/our] knowledge, prior to the sale of the Proposition IA
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
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 tenus, 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 ofjudicial 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 l A Receivable pursuant to Section 100.06 of
the Revenue and Taxation Code and Section 25.5 of Article MIT 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 of the
Revenue and 'Taxation Code or Section 6588.6 of the Government Code). Furthermore, [Uwe]
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 1A Receivable
have little or no value. No opinion is expressed with respect to the Sale of Bonds by the
Purchaser.
B1-2
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 gaoted 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 [nTy/our] prior written consent. In addition to the addressees hereof, each Credit
Fnhancer and the underwriters of the Bonds may rely upon this legal opinion as if it were
addressed to them. [I/We] do not undertake to advise you of matters that may come to [my/our]
attention subsequent to the date hereof that may affect the opinions expressed herein.
Very truly yours
ZdY
By. •�s����
/ Seller's Counsel
BI-3
E..XMBIT B2
OPINION OF COUNSEL
to
CITY OF PALM SPRINGS
Dated: Closing Date
California Statewide COmmnnitics Development Authority
Sacramento, California
Wells Fargo Bank, National Association
Los Angeles, California
Re: Sale of Proposition 1 A Receivable (Brinndown Oninion)
Ladies & Gentlemen:
Pursuant to that certain Purchase and Sale Agreement dated as of November 1,
2009 (the "Sale Agreement") between the City of Palm Springs (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 Sellers 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
4!
SYler's Counsel
B2-1
EXHIBIT CI
CLERK'S CERTIFICATE
CERTIFICATE OF THE
CITY CLERK OF
CITY OF PALM SPRINGS, CALIFORNIA
Dated: Pricing Date
The undersigned City Clerk of the City of Palm Springs (the "Seller'), a local agency of
the State of California within the meaning of Section 6585(0 of the California Government
Code, does hereby certify that the foregoing is a full, true and correct copy of Resolution No.
22610 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 7th 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: Councilmembers Foat,
Mayor Pougnet
NOES: None
ABSENT: (done
ABSTAIN: None
Hutcheson, Weigel, Mayor Pro Tern Mills, and
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 Palm Springs, California freely accessible to
members of the public, and a brief 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.
Ity Clerk of the City of Palm Springs,
California `
C1-1
EXHIBIT C2
SELLER CERTIFICATE
SELLER CERTI FICA'rE
Dated: Pricing Date
We, the undersigned officers of the City of Palm Springs (the "Seller"), a local
agency of the State of California within the meaning of Section 6585(D 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
1. 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 arc 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
Name. Official Title
David H. Ready, City Manager
Geoffrey S. Kiehl, Director of Finance and Treasurer
-.1-arThompson, City Clerk
ZG mms
genuine.
Si�na_tu_re
I I-IFREBY CERTIFY that the signatures of the officers named above are
Dated: Pricing Date
By:
ity Clcrlc of the City of Palm Springs,
California
C2-2
APPROVED BY CO COUNCIL
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 IA 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 lavv. 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 lA Receivable has not passed to the Purchaser, should Purchaser fail to make the
installment payments in the requisite amounts on the Payment hates.
The Seller hereby certifies that the representations and warranties of the Seller set
forth in the Certificate of the City Cleric 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 steal I have the meanings given to such terms in the Sale Agreement.
Dated: Clnsina Date
C3-1
CITY OF PALM SPRINGS
e
Authorized er✓
APPROVED BY CITY COUNCIL
EXHIBIT D
IRREVOCABLE INSTRUCTIONS TO CONTROLLER
IRREVOCABLE INSTRUCTIONS FOR DISBURSEMENT
OF PROPOSITION lA RECEIVABLE OF
CITY OF PALM SPRINGS
Dated: Closing Date
Office of the Controller
State of California
P.O. Box 942850
Sacramento, California 94250-5872
Re: Notice of Sale of Proposition IA Receivable by the City of Patin Springs
and Wiring Instructions Information Form
Dear Sir or Madam:
Pursuant to Section 6588.6(c) of the California Government Code, City of Palm
Springs (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 lA 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 lA
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 1 A 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 lA 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 1A Receivable by the Seller is
irrevocable and that: (i) the Seller hac no power to revoke or amend these instruetion.c 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 Indenucre and the Indenture has
been discharged; and (W) 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-I
the Purchaser, however, deliver a written notice to the Office of the Controller stating that:
(a) ti:e Seller failed to meet the requirements set forth in the Purchase and Sale Agreement;
(b) the Purchaser has Trot waived such requirements; and (c) the Purchaser has not purchased
the Proposition lA 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 file Seller pursuant to Section
25.5(a)(1)(S)(iii) of Article X111 of the California Constitution and Section 100.06 of the
California Revenue and Taxation Code.
Bank Name:
Wells Fargo Bank, N.A.
Bank ABA Routing #:
121000248
Bank Account9:
0001038377
Bank Account Name:
Corporate Trust Clearing
Further Credit To:
CSCDA Proposition 1 A Bonds
Bank Address:
707 Wilshire Blvd., 17th Floor
MAC E2818-176
Los Angeles, CA 90017
Bank Telephone #:
(213) 614-3353
Bank Contact Person:
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 PALM SPRINGS
7
Bv:
AuthoawetIrficer
APPROVED BY CITY COUNCIL
. aw w
D-2
EXHIBIT E
ESCROW INSTRUCTION LETTER
ESCROW INSTRUCTION LETTER
2009
California Statewide Communities Development Authority
1100 K Street
Sacramento, CA 95814
Re: Proposition IA Receivable I-inancinri
Dear Sir or Madam
The City of Palm Springs (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 R
Sutcliffe LLP, as transaction counsel ("Transaction Counsel"), as instructed below:
l.c crtif7ed copy of the Resolution, together with a certificate of the City Cleric,
dated the Pricing bate;
2-the Seller Certificate, dated the Pricing Date;
3.1he Opinion of Seller's Counsel, dated the Pricing Date;
4.the Opinion of Seller's Counsel (bring -down 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
Should (i) the Closing Date not occur on or berfore 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.
Vet),, truly yours,
CITY OF PALM SPRINGS
�By:
Authori�0ifccr %����
APPROVED BY CITY COUNCIL
Enclosures �0 IUb o t 0�
cc: Orrick, Herrington & Sutcliffe LLP 1
E-2
RESOLUTION NO. 22610
CITY COUNCIL
OF THE
CITY OF PALM SPRINGS
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 PROPOSITION IA RECEIVABLE FROM THE STATE; AND
DIRECTING AND AUTHORIZING CERTAIN OTHER ACTIONS IN
CONNECTION THEREWITH
WHEREAS, pursuant to Section 25.5 of Article Xrlr of the California Constitution and
Chapter 14XXXX of the Califomia Statutes of 2009 (Assembly Bill No. 15), as amended (the
"Act"), certain local agencies within the State of California (the "State") are entitled to receive
certain payments to be made by 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 (the "Reimbursement Payments"),
which reductions have been authorized pursuant to Sections 100.05 and 100.06 of the California
Revenue and Taxation Code;
WHEREAS, the City of Palm Springs, a local agency within the meaning of Section
6585(f) of the California Government Code (the "Seller"), is entitled to and has determined to
sell all right, title and interest of the Seller in and to its "Proposition IA receivable", as defined in
Section 6585(g) of the Califomia Govemment 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, in order to obtain money to fund public capital
improvements or working capital;
WHEREAS, the Seller is authorized to sell or otherwise dispose of its property as the
interests of its residents require;
WHEREAS, the California Statewide Communities Development Authority, a joint
exercise of powers authority organized and existing under the laws of the State (the
"Purchaser"), has been authorized pursuant to Section 6588(x) of the California Government
Code to purchase the Proposition IA Receivable;
WHEREAS, the Purchaser desires to purchase the Proposition IA Receivable and the
Seller desires to sell the Proposition 1 A Receivable pursuant to a purchase and sale agreement by
and between the Seller and the Purchaser in the form presented to this City Council (the "Sale
Agreement") for the purposes set forth herein;
WHEREAS, in order to finance the purchase price of the Proposition 1 A Receivable from
the Seller and the purchase price of other Proposition IA Receivables from other local agencies,
the Purchaser will issue its bonds (the "Bonds") pursuant to Section 6590 of the California
Government Code and an Indenture (the "Indenture"), by and between the Purchaser and Wells
Fargo Bank, National Association, as trustee (the "Trustee"), which Bonds will be payable solely
from the proceeds of the Seller's Proposition lA Receivable and other Proposition IA
Receivables sold to the Purchaser by local agencies in connection with the issuance of the
Bonds;
WHEREAS, the Seller acknowledges that (i) any transfer of its Proposition IA
Receivable to the Purchaser pursuant to the Sale Agreement shall be treated as an absolute sale
and transfer of the property so transferred and not as a pledge or grant of a security interest by
City of Palm Springs to secure a borrowing, (ii) any such sale of its Proposition I Receivable to
the Purchaser shall automatically be perfected without the need for physical delivery,
recordation, filing or further act, (iii) the provisions of Division 9 (commencing with Section
9101) of the California Commercial Code and Sections 954.5 to 955.1 of the California Civil
Code, inclusive, shall not apply to the sale of its Proposition IA Receivable, and (iv) after such
transfer, the Seller shall have no right, title, or interest in or to the Proposition IA Receivable
sold to the Purchaser and the Proposition lA Receivable will thereafter be owned, received, held
and disbursed only by the Purchaser or a trustee or agent appointed by the Purchaser;
WHEREAS, the Seller acknowledges that the Purchaser will grant a security interest in
the Proposition 1 A Receivable to the Trustee and any credit enhancer to secure payment of the
Bonds;
WHEREAS, a portion of the proceeds of the Bonds will be used by the Purchaser to,
among other things, pay the purchase price of the Proposition IA Receivable;
WHEREAS, the Seller will use the proceeds received from the sale of the Proposition IA
Receivable for any lawful purpose as permitted under the applicable laws of the State;
NOW THEREFORE, the City Council of the City of Palm Springs 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 Proposition 1 A Receivable
to the Purchaser for a price equal to the amount certified as the Initial Amount (as defined in the
Sale Agreement) by the County auditor pursuant to the Act. The form of Sale Agreement
presented to the City Council is hereby approved. An Authorized Officer (as set forth in
Annendix A of this Resolution, attached hereto and by this reference incorporated herein) is
hereby authorized and directed to execute and deliver the Sale Agreement on behalf of the Seller,
which shall be in the form presented at this meeting.
Section 3. Any Authorized Officer is hereby authorized and directed to send, or
to cause to be sent, an irrevocable written instruction to the State Controller (the "Irrevocable
Written Instruction") notifying the State of the sale of the Proposition IA Receivable and
instructing the disbursement pursuant to Section 6588.6(c) of California Government Code of the
Proposition I Receivable to the Trustee, on behalf of the Purchaser, which Irrevocable Written
Instruction shall be in the form presented at this meeting.
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, if required, appropriate escrow
instructions relating to the delivery into escrow of executed documents prior to the closing of the
Bonds, 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 authorized by this Resolution, whether before or
after the sale of the Proposition IA Receivable or the issuance of the Bonds, 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 Authorized Officer is hereby
authorized and directed to give any such consent, approval, notice, order or request, to execute
any necessary or appropriate documents or amendments, and to take any such action that such
Authorized 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 Proposition 1A Receivable to
the Purchaser 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-
3
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 Palm Springs, State
of California, this 7th day of October , 2009, by the following vote:
AYES: Councilmember Foat, Councilmember Hutcheson, Councilmember
Weigel, Mayor Pro Tem Mills and Mayor Pougnet_
NOES: None.
ABSENT- None.
Attest:
ames Thompson, City Clerk
Approved as to form:
SELLER'S O&NSEL
Dated: /
1�.
David H_ y Manager
I:!
APPENDIX A
14/6/991 ' ::tea
Authorized Officers: David ll. Ready, City Manager
Geoffrey S. Kiehl, Director of Finance and Treasurer
JapThompson, City Clerk
any designee of any of them, as appointed in a written certificate of
such Authorized Officer delivered to the Trustee.
CITY COUNCIL STAFF REPORT
DATE: OCTOBER 7, 2009
NEW BUSINESS
SUBJECT: 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 PROPOSITION 1A RECEIVABLE FROM THE
STATE; AND DIRECTING AND AUTHORIZING CERTAIN OTHER
ACTIONS IN CONNECTION THEREWITH
FROM: David H. Ready, City Manager
BY; Finance Department
Mr, IRA TWITIM
On July 28, 2009, the California legislature and the Governor passed the State budget
and approved a provision allowing the State to borrow eight percent of the amount of
property tax revenue apportioned to local governments as authorized by Proposition 1A
(2004). Under the provision, the State will be required to repay those obligations by
June 30, 2013. The provision also created an option for California local public agencies
to relieve the burden of loaning the State property taxes. The provision, called
Proposition 1A Securitization, authorizes the California Statewide Communities
Development Authority (California Communities JPA) to purchase the receivables due
to local agencies from the State.
RECOMMENDATION:
1. Adopt Resolution No. "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 PROPOSITION 1A RECEIVABLE FROM THE
STATE; AND DIRECTING AND AUTHORIZING CERTAIN OTHER ACTIONS IN
CONNECTION THEREWITH"
2. Authorize the City Manager, Director of Finance and Treasurer, City Attorney,
and City Clerk to execute all necessary documents subject to final review and
approval by the City Attorney.
ITEM NO. 5 - 15.
City Council Staff Report
October 7, 2009 — Page 2
Proposition 1A Securitization Program
Ir0F.Ala02121E—AlW 9[.Yi
Proposition 1A Suspension: Proposition 1A was passed by California voters in 2004 to
ensure local property tax and sales tax revenues remain with local government thereby
safeguarding funding for public safety, health, libraries, parks, and other local services.
Provisions can only be suspended if the Governor declares a fiscal necessity and two-
thirds of the Legislature concur.
The emergency suspension of Proposition 1A was passed by the Legislature and
signed by the Governor as ABX4 14 and ABX4 15 as part of the 2009-2010 budget
package on July 28, 2009. Under the provision, in fiscal year 2009-2010 the State will
borrow 8% of the amount of property tax revenue apportioned to cities, counties and
special districts. The state will be required to repay those obligations plus interest by
June 30, 2013.
Proposition 1A Securitization Prooram: Authorized under ABX4 14 and ABX4 15, the
Proposition 1A Securitization Program was instituted by California Communities to
enable Local Agencies to sell their respective Proposition 1A Receivables to California
Communities, Currently, SB 67 is being considered to clarify specific aspects of ABX4
14 and ABX4 15. Under the Securitization Program, California Communities will
simultaneously purchase the Proposition 1A Receivables, issue bonds ("Prop 1A
Bonds") and provide each local agency with the cash proceeds in two equal
installments, on January 15, 2010 and May 3, 2010 (to coincide with the dates that the
State will be shifting property tax from local agencies). The purchase price paid to the
local agencies will equal 100% of the amount of the property tax reduction. All
transaction costs of issuance and interest will be paid by the State of California.
Participating local agencies will have no obligation on the bonds and no credit exposure
to the State.
While SB 67 has not yet been passed and signed into law, California Communities
expects that to occur prior to funding the Program. If for any reason SB 67 is not
enacted and the bonds cannot be sold by December 31, 2009, all approved documents
placed in escrow with Transaction counsel will be of no force and effect and will be
destroyed.
If the City of Palm Springs sells its Proposition 1A Receivable under the Proposition 1A
Securitization Program, California Communities will pledge the City's Proposition 1A
Receivable to secure the repayment of a corresponding amount of the Prop 1A Bonds.
The City's sale of its Proposition 1A Receivable will be irrevocable. Bondholders will
have no recourse to the City if the State does not make the Proposition 1A Repayment.
Proposition 1A Prooram Sponsor: California Statewide Communities Development
Authority ("California Communities") is a joint powers authority sponsored by the
California State Association of Counties and the League of California Cities. The
K
City Council Staff Report
October 7, 2009 -- Page 3
Proposition 1A Securitization Program
member agencies of California Communities include approximately 230 cities and 54
counties throughout California.
Benefits of Participation in the Proposition 1A Securitization Proqram:
The benefits to the City of participation in the Proposition 1A Securitization Program
include:
• Immediate cash relief — The sale of the City's Proposition 1A Receivable will
provide the City with 100% of its Proposition 1A Receivable in two equal installments,
on January 15, 2010 and May 3, 2010.
• Mitigates impact of 8% property tax withholding in January and Mav — Per ABX4
14 and ABX4 15 and the proposed clean-up legislation SB 67, the State will withhold
8% of property tax receivables due to cities, counties, and special districts under
Proposition 1A. The financing provides bond proceeds to be distributed to coincide with
the dates that the State will be shifting property tax from local agencies.
• All costs of financing borne by the State of California — The City will not have to
pay any interest cost or costs of issuance in connection with its participation.
• No obligation on Bonds — The City has no obligation with respect to the payment
of the bonds, nor any reporting, disclosure or other compliance obligations associated
with the bonds.
Proceeds of the Sale of the Citv's Proposition 1A Receivable
Upon delivery of the Proposition 1A Bonds, California Communities will make available
to the City its fixed purchase price, which will equal 100% of the local agency's
Proposition 1A Receivable. These funds may be used for any lawful purpose of the City
and are not restricted by the program and will be distributed to the City on the dates
described above.
Proposed Proposition 1A Receivables Sale Resolution.
The proposed Proposition 1A Receivables Sale Resolution:
(1) Authorizes the sale of the City of Palm Spring's Proposition 1A Receivable to
California Communities for 100% of its Receivable;
(2) Approves the form, and directs the execution and delivery, of the Purchase and
Sale Agreement with California Communities and related documents;
(3) Authorizes and directs any Authorized Officer to send, or to cause to be sent, an
irrevocable written instruction required by statute to the State Controller notifying the
K
City Council Staff Report
October 7, 2009 -- Page 4
Proposition 1A Securitization Program
State of the sale of the Proposition 1A Receivable and instructing the disbursement of
the Proposition 1A Receivable to the Proposition 1A Bond Trustee;
(4) Appoints certain City officers and officials as Authorized Officers for purposes of
signing documents; and
(5) Authorizes miscellaneous related actions and makes certain ratifications, findings
and determinations required by law.
Proposed Purchase and Sale Aoreement
The proposed Purchase and Sale Agreement:
(1) Provides for the sale of the Proposition 1A Receivable to California Communities.
(2) Contains representations and warranties of the City of Palm Springs to assure
California Communities that the Proposition 1A Receivable has not been previously
sold, is not encumbered, that no litigation or other actions is pending or threatened to
disrupt the transaction and this is an arm's length "true sale" of the Proposition 1A
Receivable.
(3) Provides mechanics for payment of the Purchase Price.
(4) Contains other miscellaneous provisions.
Proposed Purchase and Sale Aareement Exhibits:
The proposed Proposition 1A Purchase and Sale Agreement Exhibits
(131) Opinion of Counsel: This is an opinion of the counsel to the City covering basic
approval of the documents, litigation, and enforceability of the document against the
City. It will be dated as of the Pricing date of the bonds (currently expected to be
November 10, 2009).
(62) Bringdown Opinion: This simply "brings down" the opinions to the closing date
(currently expected to be November 19, 2009),
(C1) Certificate of the City Clerk: A certificate of the City Clerk confirming that the
resolution was duly adopted and is in full force and effect.
(C2) Seller Certificate: A certification of the City dated as of the Pricing Date
confirming that the representations and warranties of the City are true as of the Pricing
Date, confirming authority to sign, confirming due approval of the resolution and
providing payment instructions.
4
City Council Staff Report
October 7, 2009 — Page 5
Proposition 1A Securitization Program
(C3) Bill of Sale and Bringdown Certificate: Certificate that brings the certifications of
C2 down to the Closing Date and confirms the sale of the Proposition 1A Receivable as
of the Closing Date.
(D) Irrevocable Instructions to the Controller! Required in order to let the State
Controller know that the Proposition 1A Receivable has been sold and directing the
State to make payment of the Receivable to the Trustee on behalf of the Purchaser-
(E) Escrow Instruction Letter: Instructs Transaction Counsel (Orrick, Herrington, and
Sutcliffe) to hold all documents in escrow until closing, and if closing does not occur by
December 31, 2009 for any reason, to destroy all documents.
FISCAL IMPACT:
The City is expected to be made whole
borrowing of City property tax revenues
Proposition 1A Securitization program.
for the estimated $2,058,000, three-year
by the State of California through the
The State Director of Finance has determined that the State will pay an interest rate of
2% to those cities that do not participate in this Proposition 1A Securitization program.
C
Geoffrey Kiehl, Director of Finance
�btiDavid H. Rea' 1y, City Manager
Attachments:
Proposition 1A Resolution
Sale and Purchase Agreement
Tom wilsgFrAssistant City Manager
Doug "olland, City Attorney
7
r1q-@k` $TI►TyT(IIL 00
CITY COUNCIL
OF THE
CITY OF PALM SPRINGS
A RESOLUTTON 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 PROPOSITION IA RECEIVABLE FROM THE STATE: AND
DTRECTTNG AND AUTHORIZING CERTAIN OTHER ACTIONS IN
CONNECTION THEREWITH
WHEREAS, pursuant to Section 25.5 of Article Xlll of the California Constitution and
Chapter 14XXXX of the California Statutes of 2009 (Assembly Bill No. 15), as amended (the
"Act"), certain local agencies within the State of California (the "State") are entitled to receive
certain payments to be made by the State on or before ,tune 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 (the "Reimbursement Payments"),
which reductions have been authorized pursuant to Sections 100.05 and 100.06 of the California
Revenue and Taxation Code;
WHEREAS, the City of Palm Springs, a local agency within the meaning of Section
6585(f) of the California Government Code (the "Seller"), is entitled to and has determined to
sell all right, title and interest of the Seller in and to its "Proposition 1 A 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, in order to obtain money to fund public capital
improvements or working capital;
WHEREAS, the Seller is authorized to sell or otherwise dispose of its property as the
interests of its residents require;
WHEREAS, the California Statewide Communities Development Authority, a joint
exercise of powers authority organized and existing under the laws of the State (the
"Purchaser"), has been authorized pursuant to Section 6588(x) of the California Government
Code to purchase the Proposition IA Receivable;
WHEREAS, the Purchaser desires to purchase the Proposition lA Receivable and the
Seller desires to sell the Proposition lA Receivable pursuant to a purchase and sale agreement by
and between the Seller and the Purchaser in the form presented to this City Council (the "Sale
Agreement") for the purposes set forth herein:
WHEREAS, in order to finance the purchase price of the Proposition I A Receivable from
the Seller and the purchase price of other Proposition IA Receivables from other local agencies,
the Purchaser will issue its bonds (the `Bonds") pursuant to Section 6590 of the California
Government Code and an Indenture (the "Indenture"), by and between the Purchaser and Wells
Fargo Bank, National Association, as trustee (the "Trustee"), which Bonds will be payable solely
I
from the proceeds of the Seller's Proposition lA Receivable and other Proposition IA
Receivables sold to the Purchaser by local agencies in connection with the issuance of the
Bonds;
WHEREAS, the Seller acknowledges that (i) any transfer of its Proposition lA
Receivable to the Purchaser pursuant to the Sale Agreement shall be treated as an absolute sale
and transfer of the property so transferred and not as a pledge or grant of a security interest by
City of Palm Springs to secure a borrowing, (ii) any such sale of its Proposition 1 A Receivable to
the Purchaser shall automatically be perfected without the need for physical delivery,
recordation, filing or further act, (iii) the provisions of Division 9 (commencing with Section
9101) of the California Commercial Code and Sections 954.5 to 955.1 of the California Civil
Code, inclusive, shall not apply to the sale of its Proposition 1 A Receivable, and (iv) after such
transfer, the Seller shall have no right, title, or interest in or to the Proposition IA Receivable
sold to the Purchaser and the Proposition IA Receivable will thereafter be owned, received, held
and disbursed only by the Purchaser or a trustee or agent appointed by the Purchaser;
WHEREAS, the Seller acknowledges that the Purchaser will grant a security interest in
the Proposition 1 A Receivable to the Trustee and any credit enhancer to secure payment of the
Bonds, -
WHEREAS, a portion of the proceeds of the Bonds will be used by the Purchaser to,
among other things, pay the purchase price of the Proposition IA Receivable;
WHEREAS, the Seller will use the proceeds received from the sale of the Proposition 1A
Receivable for any lawful propose as permitted under the applicable laws of the State;
NOW THEREFORE, the City Council of the Citv of Palm Springs 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 Proposition IA Receivable
to the Purchaser for a price equal to the amount certified as the Initial Amount (as defined in the
Sale Agreement) by the County auditor pursuant to the Act. The form of Sale Agreement
presented to the City Council is hereby approved. An Authorized Officer (as set forth in
Annendix A of this Resolution, attached hereto and by this reference incorporated herein) is
hereby authorized and directed to execute and deliver the Sale Agreement on behalf of the Seller,
which shall be in the form presented at this meeting.
Section 3. Any Authorized Officer is hereby authorized and directed to send, or
to cause to be sent, an irrevocable written instruction to the State Controller (the "Irrevocable
Written Instruction") notifying the State of the sale of the Proposition IA Receivable and
instructing the disbursement pursuant to Section 6588.6(c) of California Government Code of the
Proposition lA Receivable to the Trustee, on behalf of the Purchaser, which Irrevocable Written
Instruction shall be in the form presented at this meeting-
2
`7
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, if required, appropriate escrow
instructions relating to the delivery into escrow of executed documents prior to the closing of the
Bonds, 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 authorized by this Resolution, whether before or
after the sale of the Proposition 1 A Receivable or the issuance of the Bonds, 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 Authorized Officer is hereby
authorized and directed to give any such consent, approval, notice, order or request, to execute
any necessary or appropriate documents or amendments, and to take any such action that such
Authorized 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 Proposition IA Receivable to
the Purchaser 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.
3 8
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 Palm Springs, State
of California, this day of . 2009, by the following vote:
AYES:
NOES:
ABSENT:
Attest:
City Clerk
Approved as to form :
SELLER'S COUNSEL
Mayor
4
APPENDIX A
CITY OF PALM SPRINGS
Authorized Officers: David H. Ready, City Manager
Geoffrey S. Kiehl, Director of Finance and Treasurer
Jay Thompson, City Clerk
any designee of any of them, as appointed in a written certificate of
such Authorized Officer delivered to the Trustee.
1..9
CITY OF PALM SPRINGS, CALIFORNIA,
as Seller
and
CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY.
as Purchaser
PURCHASE AND SALE AGREEMENT
Dated as of November 1, 2009
11
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 ACKNOWLEDGMEN'I......................... ...............9
S.
NOTICES OF BREACH ........ ........................................................................
9
9,
LIABILITY OF SELLER: INDEMNIFICATION............................................................
9
10.
LIMITATION ON LIABJLITY----------...........................................................................
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
IT
COUNTERPARTS........................................................ • . ..
...... 11
18.
ENTIRE AGREEMENT....................................................................................
11
19.
GOVERNING LAW........................................................................................................12
EXHIBIT
A — DEFINITIONS ..................................... ..............................................................
A-1
EXHIBIT
BI —OPINION OF SELLER'S COUNSEL...........................................................B1-1
EXHIBIT
B2 — BRINGDOWN OPINION OF SELLER'S COUNSEL .................................
B2-1
EXHIBIT
C I— CLE ftl,�,' S CERTIFICATE.............................................................................
Cl-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
i
PURCHASE AND SAL.F AGREEMENT
THIS PURCHASE AND SALE AGREEMENT, dated as of November 1, 2009
(this "Agrcement"), is entered into by and between:
(1) CITY OF PALM SPRINGS, 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 Xlll 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 X 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 lA Receivable (as defined
below) and is entitled to and has detem-iined 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 X111 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 1 A Receivable.
E. The Seller is willing to sell, and the Purchaser is willing to purchase, the
Proposition 1A 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.
�3
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 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
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. Agrcement to Selland 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 riglit, 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 1A 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 Payiment" and, collectively, the "Installment Payments"), on
January 15, 2010, and May 3, 2010 (each a "Payment Dare" 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 "Pricing 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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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 0: 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 Countv Auditor
confirming the Initial Amount of the Proposition IA Receivable pursuant
to the Act.
(c) The perFornance by the Seller of its obligations hereunder shall be
conditioned solely upon the Purchaser's issuance of the Bonds 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 I 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. Convevance of Pro_osition IA Receivable and Pavment 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 Instal Iment 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
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applicable law. Such transfer, Brant, 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
1 A 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 IA 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 1 A 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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(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. Renresentations 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(o of the
California Government Code, with full power and authority to execuic 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
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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,
cant' 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 Scllcr is nor 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
rhereof, 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.
(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 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 I 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 lA 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 penmitted 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 1A 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 IA Receivable.
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(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.
6) 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
3200 E. Tahquitz Canyon Road, Palm Springs, CA 92263.
(1) The aggregate amount of the Installment Payments is reasonably equivalent
value for the Proposition IA 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
confines 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 alter 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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the ability of the Purchaser, and any assignee of the Purchaser, to receive payments of the
Proposition lA 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
IA 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 3(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 lA 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 I Receivable as a sale for
regulatory and accounting purposes.
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(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 Acknowlcdnmcnt. The Purchaser acknowledges that the
Proposition iA 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 Xiil 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 or 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.
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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 Acknowledument. 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 Tridentine. 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 I 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 Dating 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 Assi¢ns. 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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15. Third Partv Riahts. 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.
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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 PALM SPRINGS, as Seller
By:
Authorized Officer
CALIFORNIA STATEWIDE COMMUNITIES
DE V E LOPM ENI' AUTHORITY. as Purchaser
By:
Authorized Signatory
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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 Geoffrey. Kiehl a,palmsprings-ca.gov 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 Geoffrey.Kiehl@palmsprings-ca.gov 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 3200 E. Tahquitz
Canyon Road, Palm Springs, CA 92263.
A-1
25
"Proposition IA Receivable" has the meaning set forth in Section 3(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 lA Receivable.
"State" means the State of California.
"Transaction Counsel" means Orrick, Herrington & Sutcliffe LLP.
"Transaction Documents" mean this Agreement, the Lull of Sale, the Indenture,
the Bonds and the irrevocable instructions For Disbursement of Proposition lA Receivable of
City of Palm Springs, dated as of the Closing Date.
A-3
26
EXHIBIT B1
OPINION OF COUNSEL
to
CITY OF PALM SPRINGS
Dated: Pricing Date
California Statewide Communities Development Authority
Sacramento, California
Wells largo Bank, National Association
Los Angeles, California
Re: Sale ofPronosition IA Receivable
Ladies & Gentlemen:
[I have/This Office has] acted as counsel for the City of Palm Springs (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
"Proposition IA 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. 1n
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. [I/We] have
examined and are ramiliar 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 [1/we]
deem necessary in order to render the following opinions. As to paragraphs numbered 3 and 4
below, [I/we] 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, [1/we] are of the opinion that
B1-1
27
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 [my/our] 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 [my/our] knowledge, prior to the sale of the Proposition 1 A
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
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 terns, 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 1 A Receivable pursuant to Section 100.06 of
the Revenue and Taxation Code and Section 25.5 of Article X1II 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 of the
Revenue and Taxation Code or Section 6588.6 of the Government Code). Furthermore, [I/we]
express no opinion as to the value of the Proposition I Receivable or as to any legal or
equitable remedies that may be available to any person should the Proposition I Receivable
have little or no value. No opinion is expressed with respect to the sale of Bonds by the
Purchaser.
BI -2
28
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 othenvise 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 [my/our] prior written consent. In addition to the addressees hereof, each Credit
Enhancer and the underwriters of the Bonds may rely upon this legal opinion as if it were
addressed to them. []/We] do not undertake to advise you of matters that may come to [my/our]
attention subsequent to the date hereof chat may affect the opinions expressed herein.
Very truly yours,
LUM
Seller's Counsel
B1-3
ENT--IIBIT 132
OPINION OF COUNSEL
to
CITY OF PALM SPRINGS
Dated: Closing Date
California Statewide Communities Development Authority
Sacramento, California
Wells Fargo Bank, National Association
Los Angeles, California
Re: Sale ofPr000sition IA Receivable (Brin2down Opinion)
Ladies & Gentlemen:
Pursuant to that certain Purchase and Sale Agreement dated as of November 1,
2009 (the "Sale Agreement") between the City of Palm Springs (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 tenns 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,
By:
Seller's Counsel
B2-1
EXF11131T C1
CLERIC'S CERTIFICATE
CERTIFICATE OF THE
CITY CLERIC OF
CITY OF PALM SPRINGS, CALIFORNIA
Dated: Pricing Date
The undersigned City Clerk of the City of Palm Springs (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.
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 __ day of ,
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:
NOES:
ABSENT:
ABSTAIN
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 ineeting was posted at least 72 hours
before said meeting at a location in the City of Palm Springs, California freely accessible to
members of the public, and a brief 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:
City Clerk of the City of Palm Springs,
California
CI-1
31
EXHIBIT C2
SELLER CERTIFICATE
SELLER CERTIFICATE
Dated: Pricing Date
We, the undersigned officers of the City of Palm Springs (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
1. 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 terns 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 1 A 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
32
Name_ Official Title
David H. Ready, City Manager
Geoffrey S. Kiehl, Director of Finance and Treasurer
Jay Thompson, City Clerk
genuine.
Signature
I HEREBY CERTIFY that the signatures of the officers named above are
Dated: Pricing Date
M
City Clerk of the City of Palm Springs,
California
C2-2
33
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 IA Receivable as defined in the Sale Agreement (the "`Proposition
lA 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 io 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 dale, 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: Closinu Date
CITY OF PALM SPRINGS
us
Authorized Officer
34
EXIIIIIIT 1D
IRREVOCABLE INSTRUCTIONS TO CONTROLLER
IRREVOCABLE INSTRUCTIONS FOR DISBURSEMENT
OF PROPOSITION IA RECEIVABLE OF
CITY OF PALM SPRINGS
Dated: Closing Date
Office of the Controller
State of California
P.O. Box 942850
Sacramento, California 94250-5872
Re: Notice of Sale of Proposition IA Receivable by the City of Palm Springs
and Wiring Instructions Information Form
Dear Sir or Madam:
Pursuant to Section 6588.6(c) of the California Government Code, City of Palm
Springs (the "Seller") hereby notifies you of the sale by Seller, effective as of the date of these
instructions wriren above, of all right, title and interest of the Seller in and to the "Proposition
lA 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'I'axation 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 lA 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 lA 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 (W) 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 35
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 1A 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 YTH of the California Constitution and Section 100.06 of the
California Revenue and Taxation Code.
Bank Name:
Wells Fargo Bank, N.A.
Bank ABA Routing N:
121000248
Bank Account#:
0001038377
Bank Account Name:
Corporate Trust Clearing
Further Credit To:
CSCDA Proposition 1 A Bonds
Bank Address:
707 Wilshire Blvd., 17th Floor
MAC E2818-176
Los Angeles, CA 90017
Bank Telephone 9:
(213) 614-3353
Bank Contact Person:
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 PALM SPRINGS
0
Authorized Officer
D-2
EXHIBIT E
ESCROW INSTRUCTION LETTER
ESCROW INSTRUCTION LETTER
2009
California Statewide Communities Development Authority
1100 K Street
Sacramento, CA 95814
Re: Proposition 1 A Receivable FinancinL,
Dear Sir or Madam
The City of Palm Springs (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, Herrin. -Lon &
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 Dale:
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
37
Should (i) the Closing Date not occur on or berfore 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 PALM SPRINGS
in
E2
Authorized Officer
M