HomeMy WebLinkAboutRESOLUTIONS - 01012005 - 2005-087 RESOLUTION NO, 2005/87
BOARD OF SUPERVISORS
OF THE
COUNTY OF CONTRA COSTA
A RESOLUTION APPROVING THE FORM OF AND AUTHORIZING THE
EXECUTION AND DELIVERY OF A PURCHASE AND SALE AGREEMENT
AND RELATED DOCUMENTS WITH RESPECT TO THE SALE OF THE
SELLER'S VEHICLE LICENSE FEE RECEIVABLE FROM THE STATE;
AND DIRECTING AND AUTHORIZING CERTAIN OTHER ACTIONS IN
CONNECTION THEREWITH
WHEREAS, certain public agencies within the State of California (the "State") are
entitled to receive certain payments payable by the State to each such local agency on or before
August 15, 2006, in connection with vehicle license fees pursuant to Section 10754.11 of the
California Revenue and Taxation Code("VLF Gap Repayments");
WHEREAS, the County of Contra Costa (the "Seller") is entitled to and has determined
to sell all right, title and interest of the Seller in and to the "VLF Receivable", as defined in
Section 6585(1) of the California Government Code (the "VLF Receivable"),namely,the right to
payment of moneys due or to become due to the Seller out of funds payable in connection with
vehicle license fees to a local agency pursuant to Section 10754.11 of the California Revenue
and Taxation Code, in order to obtain money to fund qualified working capital expenditures
deemed necessary to meet the needs of the Seller's population;
WHEREAS, the California Statewide Communities Development Authority, a joint
exercise of powers authority organized and existing under the laws of the State(the "Authority"),
has been authorized pursuant to Section 6588(w) of the California Government Code to purchase
the VLF Receivable;
WHEREAS, the Authority desires to purchase the VLF Receivable and the Seller desires
to sell the VLF Receivable pursuant to a purchase and sale agreement by and between the Seller
and the Authority in the form presented to this Board of Supervisors (the "Sale Agreement") for
the purposes set forth herein;
WHEREAS, in order to finance the purchase price of the VLF Receivable from the Seller
and the purchase price of other VLF Receivables from other local agencies, the Authority will
issue its taxable notes (the "Taxable Notes") and tax-exempt notes (the "Tax-Exempt Notes" and
collectively with the Taxable Notes, the "Notes") pursuant to Section 6590 of the California
Government Code and an Indenture (the "Indenture"), by and between the Authority and Wells
Fargo Bank, National Association, as trustee (the "Trustee"), which Notes will be payable solely
from the proceeds of the VLF Receivable and such other VLF Receivables;
WHEREAS, the Seller acknowledges that the Authority will grant a security interest in
the VLF Receivable to the Trustee and any credit enhancer to secure payment of the Notes;
WHEREAS, a portion of the proceeds of the Tax-Exempt Notes will be used by the
Authority to, among other things, pay the purchase price of the VLF Receivable which will be
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DOCSSF1:797143.2
deposited in a separate account held in the Seller's name (the "Participant Custody Account") by
Wells Fargo Bank, National Association, as custodian (the "Custodian") under a master custodial
agreement (the "Custody Agreement"), and a portion of the proceeds of the Taxable Notes will
be used by the Authority to pay the capitalized interest on the Tax-Exempt Notes financing the
purchase price of the VLF Receivable;
WHEREAS, pursuant to the terms of the Custody Agreement, the Custodian will hold
and invest the sale proceeds in the Participant Custody Account and will disburse such proceeds
and the investment earnings thereon only upon the written request of the Seller, as provided in
the Custody Agreement; and
WHEREAS, the Seller reasonably expects to use the proceeds from the sale of the VLF
Receivable to fund qualified working capital expenditures as permitted under the applicable laws
of State and as described in Appendix A attached hereto and by reference incorporated herein;
NOW THEREFORE, the Board of Supervisors of the County of Contra Costa hereby
resolves as follows:
Section 1. All of the recitals set forth above are true and correct, and this Board
of Supervisors hereby so finds and determines.
Section 2. The Seller hereby authorizes the sale of the VLF Receivable to the
Authority for a price no less than the Minimum Purchase Price set forth in Appendix A. The
form of Sale Agreement presented to the Board of Supervisors is hereby approved.roved. An
Authorized Officer (as set forth in Appendix A) is hereby authorized and directed to execute and
deliver the Sale Agreement on behalf of the Seller, which shall be in substantially the form
presented to this meeting, with such changes therein, deletions therefrom and additions thereto,
as such Authorized Officer shall approve, which approval shall be conclusively evidenced by the
execution and delivery of the Sale Agreement.
Section 3. Any Authorized Officer is hereby authorized and directed to send, or
to cause to be sent, an irrevocable written instruction to the State Controller notifying the State of
the sale of the VLF Receivable and instructing the disbursement pursuant to Section 6588.5(c) of
California Government Code of the VLF Receivable to the Trustee, on behalf of the Authority.
Section 4. The Board of Supervisors hereby approves the application of the
proceeds from the sale of the VLF Receivable to fund qualified working capital expenditures.
Section 5. 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, one or more tax
certificates, appropriate escrow instructions relating to the delivery into escrow of executed
documents prior to the closing of the Notes, appropriate investment instructions, structured
investment agreements and related documents in connection with the investment of the
Participant Custody Account, 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
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DOCSSF1:797143.2 2
Resolution 2005/87
Resolution; and all such actions heretofore taken by such officers are hereby ratified, confirmed
and approved.
Section 6. 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 VLF Receivable or the issuance of the Notes, including without limitation
any of the foregoing that may be necessary or desirable in connection with any default under or
amendment of such documents, may be given or taken by an Authorized Officer without further
authorization by this Board of Supervisors, 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 7. The Board of Supervisors acknowledges that, upon execution and
delivery of the Sale Agreement, the Seller is contractually obligated to sell the VLF Receivable
to the Authority 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.
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DOCSSF1:797143.2 3
Resolution 2005/87
ti
Section 8. This Resolution shall take effect from and after its adoption and
approval.
PASSED AND ADOPTED by the Board of Supervisors of the County of Contra
Costa, State of California, this 15 day of February , 2005, by the following vote:
AYES: Supervisors Gioia, Piepho, DeSaulnier, Glover and Uilkema
NOES: None
ABSENT: None
Chair of th "Board of Supervisors
Attest:
r' Z f
erk of the Board of Su pervi or
Approved as to form
SELLER'S COUNSEL
B e
YAbzu
Dated:
Resolution 2005/87
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DOCSSF1:797143.2 4
APPENDIX A
COUNTY OF CONTRA COSTA
Description of use of Proceeds will be used to fund qualified working capital
proceeds from the sale expenditures.
of the VLF Receivable:
Minimum Purchase An amount equal to or greater dtan$19,163,490.02 (the
Price: Purchase Price").
Authorized Officers: County A 'strator
County Auditor-Controller
any designee of any of them, as appointed in a written certificate of
such Authorized Officer delivered to the Trustee.
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D005SF1:797143.2
COUNTY OF CONTRA COSTA, CALIFORNIA,
as Seller
and
CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY,
as Purchaser
PURCHASE AND SALE AGREEMENT
Dated March 2, 2005
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DOCSSFI:797142.2
TABLE OF CONTENTS
Page
I DEFINITIONS AND INTERPRETATION.............. 1
2. AGREEMENT TO SELL AND PURCHASE; CONDITIONS PRECEDENT................2
3. CONVEYANCE OF VLF RECEIVABLE AND PAYMENT OF FINAL
PURCHASEPRICE..........................................................................................................3
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER..........................3
5. REPRESENTATIONS AND WARRANTIES OF THE SELLER...................................3
6. COVENANTS OF THE SELLER.....................................................................................6
7. NOTICES OF BREACH...................................................................................................7
8. LIABILITY OF SELLER; INDEMNIFICATION............................................................7
9. LIMITATION ON LIABILITY ........................................................................................8
10. THE SELLER'S ACKNOWLEDGMENT........................................................................8
11. NOTICES...........................................................................................................................8
12. AMENDMENTS ...............................................................................................................9
13. SUCCESSORS AND ASSIGNS.......................................................................................9
14. THIRD PARTY RIGHTS................................................................................ .......9
15. PARTIAL INVALI]DITY....go 00*060 0000006004 00*0600*0 a&a***sell*** 0.0 too 000*004.0*0*0 00 00.#0 0*600.,a.,9
16. COUNTERPARTS............................................................................................................9
17. ENTIRE AGREEMENT....................................................................................................9
18. GOVERNING LAW........................................................................................................ 10
EXHIBITA—DEFINITIONS...................................................................................................A-1
EXHIBIT B 1 —OPINION OF SELLER'S COUNSEL...........................................................131-1
EXHIBIT B2—BRINGDOWN OPINION OF SELLER'S COUNSEL.......... 132-1
EXHIBIT Cl —CLERK'S CERTIFICATE......................000*000 000 0*000 Sao.**Ilea*10*00 woo pot cl—1
EXHIBIT C2—SELLER CERTIFICATE...............................................................................C2-1
EXHIBIT C3 —BILL OF SALE AND BRINGDOWN CERTIFICATE................................0-1
EXHIBIT D IRREVOCABLE INSTRUCTIONS TO CONTROLLER..........................064.60D-1
EXHIBIT E SELLER TAX CERTIFICATE............................. .aoo E-1
EXHIBIT F ESCROW INSTRUCTION LETTER.................................................................Foal
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DOCSSFI:797142.2
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT, dated March 2, 2005 (this
"Agreement"), is entered into by and between:
(1) COUNTY OF CONTRA COSTA, a political subdivision of the State of
California(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. The Seller is the owner of the VLF Receivable (as defined below).
B. The Seller is willing to sell, and the Purchaser is willing to purchase, the
VLF Receivable upon the terms specified in this Agreement.
C. In order to finance the purchase price of the VLF Receivable from the
Seller and the purchase price of other VLF Receivables from other local agencies, the Authority
will issue its taxable notes (the "Taxable Notes") and tax-exempt notes (the "Tax-Exempt Notes"
and collectively with the Taxable Notes, the "Notes") pursuant to Section 6590 of the California
Government Code and an Indenture (the "Indenture"), by and between the Authority and Wells
Fargo Bank, National Association, as trustee (the "Trustee"), which Notes will be payable solely
from the proceeds of the VLF Receivable and such other VLF Receivables.
D. A portion of the proceeds of the Tax-Exempt Notes will be used by the
Authority to, among other things, pay the purchase price of the VLF Receivable to the Seller,
and a portion of the proceeds of the Taxable Notes will be used by the Authority to pay the
capitalized interest on the Tax-Exempt Notes financing the purchase price of the VLF
Receivable.
E. The Purchaser will grant a security interest in such VLF Receivable to the
Trustee and each Credit Enhancer to secure the Notes.
F. The Seller reasonably expects to use the proceeds from the sale of the
VLF Receivable to fund qualified working capital expenditures.
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
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DOCSSFI:797142.2
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. Agreement to Sell and Purchase; Conditions Precedent.
(a) The Seller agrees to sell, and the Purchaser agrees to purchase, on the Closing
Date, for cash paid by the Purchaser in an amount equal to the amount determined pursuant to
Section 3(a) (the "Final Purchase Price"), which shall be not less than $19,163,490.02 (the
"Minimum Purchase Price"), all right, title and interest of the Seller in and to the "VLF
Receivable" as defined in Section 6585(i) of the California Government Code (the "VLF
Receivable"), namely, the right to payment of moneys due or to become due to the Seller out of
funds payable in connection with vehicle license fees to a local agency pursuant to Section
10754.11 of the California Revenue and Taxation Code. The Purchaser shall pay the Final
Purchase Price by depositing the Final Purchase Price in the Seller's Participant Custody
Account held by the Custodian under the Custody Agreement, as defined in and pursuant to the
Indenture.
(b) The performance by the Purchaser of its obligations hereunder shall be
conditioned upon:
(i) Transaction Counsel receiving on or before the date the Notes are sold(the
"PricingDate"), to be held in escrow until the Closing Date and then
delivered to the Purchaser on the Closing Date, the following documents
duly executed by the Seller or its counsel, as applicable: (1) an opinion of
counsel to the Seller dated the Pricing Date in substantially the for-in
attached hereto as Exhibit Bl, (2) certificates dated the Pricing Date in
substantially the forms attached hereto as Exhibit C1 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 Board of Supervisors
approving this Agreement, the transactions contemplated hereby and the
documents attached hereto as exhibits, (6) an escrow instruction letter in
substantially the form attached hereto as Exhibit F, and (7)the Seller Tax
Certificate in substantially the form(s) attached hereto as Exhibit E;
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DOCSSFI:797142.2 2
ii Transaction Counsel receiving on or before the Closing 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 C provided that the Purchaser may
waive in its sole discretion the requirements of Section 2(b)(ii)(1); and
(iii) the Purchaser issuing notes in an amount which will be sufficient to pay
the Final Purchase Price.
(c) The performance by the Seller of its obligations hereunder shall be
conditioned solely upon the Purchaser's payment of the Final Purchase Price as set forth in this
Agreement and no other act or omission on the part of the Purchaser or any other party shall
k-11
excuse the Seller from performing its obligations hereunder.
(d) The Final Purchase Price shall be an amount that satisfies the conditions of
Section 2 of the Resolution referred to in Section 2(b)(i)(5) above.
3. Conveyance of VLF Receivable and PgMent of Final Purchase Price.
(a) Upon pricing of the Notes by the Purchaser, the Purchaser will inform the
Seller of the Final Purchase Price, which shall be an amount at least equal to the Minimum
Purchase Price, and which shall be determined by the Purchaser based on the final interest rates,
costs of credit enhancement and issuance and terms of the Notes. Upon pricing of the Notes, the
Purchaser shall deliver a certificate to the Seller indicating the Final Purchase Price to be paid to
the Seller on the Closing Date.
(b) In consideration of the payment and delivery by the Purchaser to the Seller of
the Final Purchase Price, the Seller agrees to (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 herein, and the Purchaser agrees to purchase, accept and receive,
the VLF Receivable, and (b) assign to the Purchaser,, to the extent permitted by law (as to which
no representation is made), all present or future rights, if any, of the Seller to enforce or cause the
enforcement of payment of the VLF Receivable pursuant to the Act and other applicable law.
4. Representations and Warranties of the Purchaser. The Purchaser represents
and warrants to the Seller that, as of the date hereof, (a) it is duly organized, validly existing and
in good standing under the laws of the State of California, (b)it has full power and authority to
enter into this Agreement and to perform its obligations hereunder, (c) neither the execution and
delivery by the Purchaser of this Agreement, nor the performance by the Purchaser of its
obligations hereunder, shall conflict with or result in a breach or default under any of its
organizational documents, any law, rule, regulation, judgment, order or decree to which it is
subject or any agreement or instrument to which it is a party, and (d) this Agreement, and its
execution, delivery and performance hereof have been duly authorized by it, and this Agreement
has been duly executed and delivered by it and constitutes its valid and binding obligation
enforceable against it in accordance with the terms hereof, subject to the effect of bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws relating to
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DOCSSFI:797142.2 3
or affecting creditors' rights generally or the application of equitable principles in any
proceeding, whether at law or in equity.
5. Representations and Warranties of the Seller. The Seller hereby represents
and warrants to the Purchaser, as of the date hereof, as follows:
(a) The Seller is a political subdivision validly existing under the laws and
Constitution of the State of California, with full power and authority to execute and deliver this
Agreement and to carry out its terms.
(b) The Seller has full power, authority and legal right to sell and assign the VLF
Receivable to the Purchaser and has duly authorized such sale and assignment to the Purchaser
by all necessary action; and the execution, delivery and performance by the 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, constitutes a legal, valid and binding obligation
of the Seller enforceable in accordance with its terms, subject to the effect of bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws relating to
or affecting creditors' rights generally or the application of equitable principles in any
proceeding, whether at law or in equity.
(d) All approvals, consents, authorizations, elections and orders of or filings or
registrations with any governmental authority, board, agency or commission having jurisdiction
which would constitute a condition precedent to, or the absence of which would adversely affect,
the sale by the Seller of the VLF Receivable or the performance by the Seller of its obligations
under the Resolution and the Transaction Documents and any other applicable agreements, have
been obtained and are in fall force and effect.
(e) Insofar as it would materially adversely affect the Seller's ability to enter into,
carry out and perform its obligations under any or all of the Transaction Documents to which it is
a party, or consummate the transactions contemplated by the same, the Seller is not in breach of
or default under any applicable constitutional provision, law or administrative regulation of the
State of California or the United States or any applicable judgment or decree or any loan
agreement, indenture, bond, note, resolution, agreement or other instrument to which it is a party
or to which it or any of its property or assets is otherwise subject, and, to the best of the
knowledge of the Seller, no event has occurred and is continuing which with the passage of time
or the giving of notice, or both, would constitute a default or an event of default under any such
instrument, and the adoption of the Resolution and the execution and delivery by the Seller of the
Transaction Documents to which it is a party, and compliance by the Seller with the provisions
thereof, under the circumstances contemplated thereby, do not and will not in any material
respect conflict with or constitute on the part of the Seller a breach of or default under any
agreement or other instrument to which the Seller is a party or by which it is bound or any
existing law, regulation, court order or consent decree to which the Seller is subject.
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DOCSSFI:797142.2 4
(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
Board of Supervisors members or officers to their respective offices, or seeking to restrain or to
enjoin the sale of the VLF Receivable or to direct the application of the proceeds of the sale
thereof, or in any way contesting or affecting the validity or enforceability of any of the
Transaction Documents or any other applicable agreements or any action of the Seller
contemplated by any of said documents, or in any way contesting the powers of the Seller or its
authority with respect to the Resolution or the Transaction Documents to which the Seller is a
party or any other applicable agreement, or any action on the part of the Seller contemplated by
the Transaction Documents, or in any way seeking to enjoin or restrain the Seller from selling
the VLF Receivable or which if determined adversely to the Seller would have an adverse effect
upon the Seller's ability to sell the VLF Receivable, nor to the knowledge of the Seller is there
any basis therefor.
(g) Prior to the sale of the VLF Receivable to the Purchaser, the Seller was the
sole owner of the VLF Receivable, and has such right, title and interest as provided in the Act.
From and after the conveyance of the VLF Receivable by the Seller to Purchaser on the Closing
Date, the Seller shall have no interest in the VLF Receivable. Except as provided in this
Agreement, the Seller has not sold, transferred, assigned, set over or otherwise conveyed any
right, title or interest of any kind whatsoever in all or any portion of the VLF Receivable, nor has
the Seller created, or to the knowledge of the Seller permitted the creation of, any lien, pledge,
security interest or any other encumbrance (a "Lien") thereon. Prior to the sale of the VLF
Receivable to the Purchaser, the Seller held title to the VLF Receivable free and clear of any
Liens. As of the Closing Date, this Agreement, together with the Bill of Sale, constitutes a valid
sale to the Buyer of the Seller's right, title and interest in and to the VLF Receivable.
(h) The Seller acts solely through its authorized officers or agents.
(i) The Seller maintains records and books of account separate from those of the
Purchaser.
(j) The Seller maintains its respective assets separately from the assets of the
Purchaser (including through the maintenance of separate bank accounts); the Seller's finds 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
651 Pine Street, 11th Floor, Martinez, CA 94602.
(1) The Seller has received reasonably equivalent value for the VLF Receivable.
(m)The Seller does not act as an agent of the Purchaser in any capacity, but
instead presents itself to the public as an entity separate from the Purchaser.
(n) The Seller has not guaranteed and shall not guarantee the obligations of the
Purchaser, nor shall it hold itself out or permit itself to be held out as having agreed to pay or as
being liable for the debts of the Purchaser- and the Seller has not received nor shall the Seller
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DOCSSFI:797142.2 5
accept any credit or financing from any Person who is relying upon the availability of the assets
of the Purchaser to satisfy the claims of such creditor.
(o) All transactions between or among the Seller, on the one hand, and the
Purchaser on the other hand (including, without limitation, transactions governed by contracts for
services and facilities, such as payroll, purchasing, accounting, legal and personnel services and
office space), whether existing on the date hereof or entered into after the date hereof, shall be on
terms and conditions (including, without limitation, terms 'relating to amounts to be paid
thereunder) which are believed by each such party thereto to be both fair and reasonable and
comparable to those available on an arms-length basis from Persons who are not affiliates.
6. Covenants of the Seller.
(a) The Seller shall not take any action or omit to take any action which adversely
affects the interests of the Purchaser in the VLF Receivable and in the proceeds thereof. The
Seller shall not take any action or omit to take any action that shall adversely affect the ability of
the Purchaser,, and any assignee of the Purchaser, to receive payments made under the Act.
(b) The Seller shall not take any action or omit to take any action that would
impair the validity or effectiveness of the Act, nor, without the prior written consent of the
Purchaser or its assignee, amend, modify, terminate, waive or surrender, or agree to any
amendment, modification, termination, waiver or surrender of, the terms of the Act, or waive
timely performance or observance under the Act, in each case if the effect thereof would be
materially adverse to the Purchaser or to the Noteholders or any Credit Enhancer as assignees of
the Purchaser. Nothing in this agreement shall impose a duty on the Seller to seek to enforce the
Act or to seek enforcement thereof by others, or to prevent others from modifying, terminating,
discharging or impairing the validity or effectiveness of the Act.
(c) Upon request of the Purchaser or its assignee, (i) the Seller shall execute and
deliver such further instruments and do such further acts (including being named as a plaintiff in
an appropriate proceeding) as may be reasonably necessary or proper to carry out more
effectively the purposes and intent of this Agreement, and (ii)the Seller shall take all actions
necessary to preserve, maintain and protect the title of the Purchaser to the VLF Receivable,
provided that such acts shall not impose any additional cost on the Seller that is not reimbursed.
(d) The Seller shall execute the Seller Tax Certificate containing all necessary and
appropriate representations,, statements of intention, covenants, reasonable expectations, and
certifications of fact for Transaction Counsel to render its opinion that interest on the Notes is
excluded from gross income for federal income tax purposes pursuant to Section 103 of the
Code, including but not limited to matters relating to the use and investment of the proceeds of
Notes received by the Seller as the Final Purchase Price and investment earnings thereon and the
use of any and all property financed or refinanced with such proceeds and moneys.
(e) The Seller shall at all times do and perform all acts and things permitted by
law and this Agreement which are necessary or desirable in order to assure that interest paid on
the Tax-Exempt Notes (or any of them) will be excluded from gross income for federal income
tax purposes and shall take no action that would result in such interest not being excluded from
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DOCSSFI:797142.2 6
gross income for federal income tax purposes. Without limiting the generality of the foregoing,
the Seller agrees that it will comply with the provisions of the Seller Tax Certificate which are
incorporated herein.
(f) On or before the Closing Date, the Seller shall send (or cause to be sent) an
irrevocable instruction to the Controller pursuant to Section 6588.5(c) of California Government
Code to cause the Controller to disburse all payments of the VLF Receivable to the Trustee,
together with notice of the sale of the VLF Receivable to the Purchaser and the assignment of all
or a portion of such assets by the Purchaser to the Trustee. Such notice and instructions shall be
in the form of Exhibit D hereto. The Seller shall not take any action to revoke or which would
have the effect of revoking, in whole or in part, such instructions to the Controller. The Seller
hereby relinquishes and waives any control over the VLF Receivable, any authority to collect the
VLF Receivable, and any power to revoke or amend the instructions to the Controller
contemplated by this paragraph. The Seller shall not rescind, amend or modify the instruction
described in the first sentence of this paragraph. The Seller shall cooperate with the Purchaser or
its assignee in giving instructions to the Controller if the Purchaser or its assignee transfers the
VLF Receivable. In the event that the Seller receives any proceeds of the VLF Receivable, the
Seller shall hold the same in trust for the benefit of the Purchaser and the Trustee and each Credit
Enhancer., as assignees of the Purchaser, and shall promptly remit the same to the Trustee.
(g) The Seller acknowledges that the proceeds received by the Seller as the Final
Purchase Price hereunder continue to be proceeds of the Notes in the hands of the Seller and
agrees that such amounts will be invested in compliance with the Seller Tax Certificate.
(h) 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.
(i) The financial statements and books and records of the Seller prepared after the
Closing Date shall reflect the separate existence of the Purchaser.
0) The Seller shall treat the sale of the VLF Receivable as a sale for regulatory
and accounting purposes.
(k) From and after the date of this Agreement, the Seller shall not sell, transfer,
assign, set over or otherwise convey any right, title or interest of any kind whatsoever in all or
any portion of the VLF Receivable, nor shall the Seller create, or to the knowledge of the Seller
permit the creation of, any Lien thereon.
7. Notices of Breach.
(a) Upon discovery by the Seller or the Purchaser that the Seller has breached any
of its covenants or that any of the representations or warranties of the Seller or the Purchaser are
materially false or misleading, in a manner that materially and adversely affects the value of the
VLF Receivable, the discovering party shall give prompt written notice thereof to the other party
and to the Trustee, as assignee of the Purchaser, who shall, pursuant to the Indenture, promptly
thereafter notify each Credit Enhancer and the Rating Agencies.
Tax-Exempt/Contra Costa County
DOCSSFI:797142.2 7
(b) The Seller shall not be liable to the Purchaser, the Trustee, the Noteholders, or
any Credit Enhancer for any loss, cost or expense resulting solely from the failure of the Trustee,
any Credit Enhancer or the Purchaser to promptly notify the Seller upon the discovery by an
authorized officer of the Trustee, any Credit Enhancer or the Purchaser of a breach of any
covenant or any materially false or misleading representation or warranty contained herein.
8. Liability of Seller; Indemnification. The Seller shall be liable in accordance
herewith only to the extent of the obligations specifically undertaken by the Seller under this
Agreement. The Seller shall indemnify, defend and hold harmless the Purchaser, the Trustee and
each Credit Enhancer, as assignees of the Purchaser, and their respective officers, directors,
employees and agents from and against any and all costs, expenses, losses, claims, damages'and
liabilities to the extent that such cost, expense, loss, claim, damage or liability arose out of, or
was imposed upon any such Person by the Seller's breach of any of its covenants contained
herein or any materially false or misleading representation or warranty of the Seller contained
herein. The Seller shall indemnify, defend and hold harmless the Purchaser and the Trustee, as
assignee of the Purchaser, and their respective officers, directors, employees and agents from and
against any and all costs, expenses, losses, claims, damages and liabilities arising out of or
incurred in connection with a breach by the Seller of its obligations under the Seller Tax
Certificate, including any rebate or other obligation to the United States Department of the
Treasury, which result from actions by or omissions of the Seller, including from the investment
of the proceeds of the Tax-Exempt Notes by the Seller and the use by the Seller of any and all
property financed or refinanced with the proceeds of such Tax-Exempt Notes received by the
Seller as the Final Purchase Price. Notwithstanding anything to the contrary herein, the Seller
shall have no liability for the payment of the principal of or interest on the Notes issued by the
Purchaser.
9. 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.
10. The Seller's Acknowledgment. The Seller hereby agrees and acknowledges
that the Purchaser intends to assign and grant a security interest in all or a portion of(a) its rights
hereunder and (b) the VLF Receivable, to the Trustee and each Credit Enhancer pursuant to the
Indenture. The Seller further agrees and acknowledges that the Trustee, the Noteholders, and
each Credit Enhancer have relied and shall continue to rely upon each of the foregoing
representations, warranties and covenants, and further agrees that such Persons are entitled so to
rely thereon. Each of the above representations, warranties and covenants shall survive any
assignment and grant of a security interest in all or a portion of this Agreement or the VLF
Tax-Exempt/Contra Costa County
DOCSSFI:797142.2 8
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.
11. 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.
W -
12. Amendments. This Agreement may be amended by the Seller and the
Purchaser, with (a) the consent of the Trustee, (b) the consent of each Credit Enhancer, and (c) a
Rating Agency Confirmation, but without the consent of any-of the Noteholders, for the purpose
of adding any provisions to or changing in any manner or eliminating any of the provisions of
this Agreement.
Promptly after the execution of any such amendment, the Purchaser shall furnish
written notification of the substance of such amendment to the Trustee and to the Rating
Agencies.
13. Successors and Assi 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.
14. Third Party Rijzhts. 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.
15. Partial Invali . 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.
16. 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.
17. Entire Aweement. 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.
Tax-Exempt/Contra Costa County
DOCSSFI:797142.2 9
18. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused this
Purchase and Sale Agreement to be duly executed as of the date first written above.
COUNTY OF CONTRA COSTA, as Seller
J
y• /
FL Authorized Officer
CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY, as Purchaser
By;
Member
Tax-Exempt/Contra Costa County
DOCSSF1:797142.2 10
EXHIBIT A
DEFINITIONS
For all purposes of this Agreement, except as otherwise expressly provided herein
or unless the context otherwise requires, capitalized ten-ns not otherwise defined herein shall
have the meanings set forth below.
"Act"means Section 10754.11 of the California Revenue and Taxation Code.
"Bill of Sale"has the meaning given to that term in Section 2(b)(ii)hereof.
"Credit Enhancer" means any municipal bond insurance company, bank or other
financial institution or organization which is performing in all material respects its obligations
under any Credit Support Instrument for some or all of the Notes.
"Credit Support Instrument" means a policy of insurance, a letter of credit, a
stand-by purchase agreement, revolving credit agreement or other credit arrangement pursuant to
which a Credit Enhancer provides credit or liquidity support with respect to the payment of
interest,principal or the purchase price of the Notes.
"Closing Date"means the date the Notes are issued.
"Controller"means the Controller of the State.
"Final Purchase Price"has the meaning ascribed thereto in Section 2.
"Minimum Purchase Price"has the meaning ascribed thereto in Section 2.
"Noteholder" means, with respect to any Note, the person in whose name such
Note is registered.
"Oustanding"has the meaning given to that term in the Indenture.
"Pricing Date"means the date the Notes are sold.
"Rating Agency" means any nationally recognized rating agency then providing
or maintaining a rating on the Notes at the request of the Purchaser.
"Rating Agency Confirmation" means 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 Outstanding Notes.
"Resolution"means the resolution adopted by the Board of Supervisors approving
the sale of the VLF Receivable.
"Seller Tax Certificate" means the Tax Certificate, dated the date hereof, executed
by the Seller.
"State"means the State of California.
Tax-Exempt/Contra Costa County
DOCSSFI:797142.2 A-1
"Transaction Counsel"means Orrick, Herrington &Sutcliffe LLP.
"Transaction Documents" mean this Agreement, the Bill of Sale, the Seller Tax
Certificate, the Indenture, and the Notes.
Tax-Exempt/Contra Costa County
DOCSSF1:797142.2 A-2
EXHIBIT B1
OPINION OF COUNSEL
to
COUNTY OF CONTRA COSTA
March 2, 2005
California Statewide Communities Development Authority
Sacramento, California
Wells Fargo Bank, National Association
Los Angeles, California
Re: Sale of VLF Receivable
Ladies & Gentlemen:
This Office acted as counsel for the County of Contra Costa (the "Seller") in
connection with the adoption of that certain resolution (the "Resolution") of the Board of
Supervisors of the Seller (the "Governing Body") pursuant to which the Seller authorized the
sale to the California Statewide Communities Development Authority (the "Purchaser") of the
Seller's"VLF Receivable", as defined in and pursuant to the Purchase and Sale Agreement dated
March 2, 2005 (the "Sale Agreement") between the Seller and the Purchaser. In connection with
these transactions, the Seller has issued certain Irrevocable Instructions For Disbursement of the
Seller's VLF Receivable to the Controller of the State of California (the "Disbursement
Instructions" and collectively with the Sale Agreement, the "Transaction 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 have examined and am familiar with those documents relating to the existence,
organization, and operation of the Seller, the Resolution, the Transaction Documents and such
certified proceedings, certifications of officers of the Seller and others, and such other
agreements, instruments and documents, and have satisfied myself as to such other matters, as I
deem necessary in order to render the following opinions.
Based upon the foregoing, I am of the opinion that:
1. The Seller is a political subdivision of the State of California, duly organized
and validly existing pursuant to the laws and the Constitution of the State of California.
2. The Seller has full power and authority to adopt the Resolution and to execute
and deliver the Transaction Documents.
Tax-Exempt/Contra Costa County
DOCSSF 1:797142.2 BI-1
3. The Seller has duly authorized and executed the Transaction Documents and,
assuming delivery, each Transaction Document will be legal, valid, and binding against the
Seller, and enforceable against the Seller in accordance with its terms, except as enforcement
may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
laws relating to or affecting creditorsrights, and the application of equitable principles and the
exercise of judicial discretion in appropriate areas.
4. The Resolution was duly adopted at a meeting of the Governing Body which
was 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.
5. The Resolution is in fall force and effect and has not been amended, modified,
supplemented or rescinded.
C. To the best of my 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 affecting the existence of the Seller or the titles of its
Governing Body members or officers to their respective offices, or seeking to restrain or to
enjoin the sale of the VLF Receivable or to direct the application of the proceeds of the sale
thereof, or in any way contesting or affecting the validity or enforceability of the Resolution, 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 or any other applicable
agreement, or any action on the part of the Seller contemplated by any of said documents, or in
any way seeking to enjoin or restrain the Seller from selling the VLF Receivable or which if
determined adversely to the Seller would have a material and adverse effect upon the Seller's
ability to sell the VLF Receivable,nor to my knowledge is there any basis therefor.
7. 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 foregoing agreements, 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 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 my-knowledge, no event has occurred
and is continuing which with the passage of time or the giving of notice, or both, would
constitute a default or an event of default under any such instrument, and the adoption of the
Resolution and the execution and delivery by the Seller of the Transaction Documents, and
compliance with the provisions thereof, under the circumstances contemplated thereby, do not
and will not in any material respect conflict with or constitute on the part of the Seller a breach
of or default under any agreement or other instrument to which the Seller is a party or by which
it is bound or any existing law, regulation, court order or consent decree to which the Seller is
subj ect.
8. Prior to the sale of the VLF Receivable to the Purchaser, the Seller was the
sole owner of the VLF Receivable, and has such right, title and interest as provided in the Act.
From and after the conveyance of the VLF Receivable by the Seller to Purchaser on the Closing
Tax-Exempt/Contra Costa County
DOCSSFI:797142.2 B 1-2
Date, the Seller shall have no interest in the VLF Receivable. Except as provided in the Sale
Agreement, the Seller has not sold, transferred, assigned, set over or otherwise conveyed any
right, title or interest of any kind whatsoever in all or any portion of the Seller's VLF Receivable,
nor has the Seller created, or to my knowledge permitted the creation of, any Lien thereon. Prior
to the sale of the VLF Receivable to the Purchaser, the Seller held title to the VLF Receivable
free and clear of any Liens.
9. To the best of my knowledge, 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 materially adversely affect, the sale by the Seller of the VLF Receivable or the
performance by the Seller of its obligations under the Resolution and the Transaction Documents
and any other applicable agreements, have been obtained and are in full force and effect.
10. The Disbursement Instructions are irrevocable by the Seller, and comply with
the requirements of Section 6588.5(c) of the California Government Code.
Each Credit Enhancer, the underwriters of the Notes and Transaction Counsel
may rely upon this legal opinion as if it were addressed to them.
Very truly yours,
By: i- svi=
Seller's Counsel
Tax-Exempt/Contra Costa County
DOCSSF 1:797142.2 BI-3
EXHIBIT B2
OPINION OF COUNSEL
to
COUNTY OF CONTRA COSTA
[Closing Date]
California Statewide Communities Development Authority
Sacramento, California
Wells Fargo Bank,National Association
Los Angeles, California
Re: Sale of VLF Receivable (Bringdown Opinion)
Ladies &Gentlemen:
Pursuant to that certain Purchase and Sale Agreement dated March 2, 2005 (the
"Sale Agreement") between the County of Contra Costa (the "Seller") and the California
Statewide Communities Development Authority (the "Purchaser"), this Office delivered an
opinion(the "Opinion") dated the Pricing Date (as defined in the Sale Agreement) as counsel for
the Seller in connection with the sale of the Seller's VLF Receivable (as defined in the Sale
Agreement),the execution of documents related thereto and certain other related matters.
I confirm that you may continue to rely upon the Opinion as if it were dated as of
the date hereof. Each Credit Enhancer, the underwriters of the Notes and Transaction Counsel
may rely upon this legal opinion as if it were addressed to them. This letter is delivered to you
pursuant to Section 2(b)(ii)(1) of the Sale Agreement.
Very t-- -
By: —
Tax-Exempt/Contra Costa County
DOCSSFI:797142.2 B2_1
EXHIBIT C1
CLERK'S CERTIFICATE
CERTIFICATE OF THE
CLERK OF THE BOARD OF SUPERVISORS OF
COUNTY OF CONTRA COSTA, CALIFORNIA
Dated: March 2, 2005
The undersigned Clerk of the Board of Supervisors of the County of Contra Costa,
California, do hereby certify that the foregoing is a full, true and correct copy of Resolution No.
duly adopted at a regular meeting of the Board of Supervisors of said Seller
duly and regularly and legally held at the regular meeting place thereof on the day of
5 2005, of which meeting all of the members of said Board of Supervisors
had due notice and at which all members thereof were present, and that at said meeting said
resolution was adopted by the following vote:
AYES:
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 meeting was posted at least 72 hours
before said meeting at a location in the City of Martinez, California freely accessible to members
of the public, and a brief general description of said resolution appeared on said agenda.
WITNESS my hand as of the day and year first above written.
By:
Clerk of the Board of Supervisors of the
County of Contra Costa, California
Tax-Exempt/Contra Costa County
DOCSSFI:797142.2 CI-1
EXHIBIT C2
SELLER CERTIFICATE
SELLER CERTIFICATE
Dated: March 2, 2005
We, the undersigned officers of the County of Contra Costa (the "Seller"), State
of California, holding the respective offices herein below set opposite our signatures, do hereby
certify that on the date hereof the following documents (the "Transaction Documents") were
officially executed and delivered by the Authorized Officer or Officers whose names appear on
the executed copies thereof, to wit:
Document
1. Purchase and Sale Agreement, dated March 2, 2005 (the"Sale
Agreement"),between the Seller and the California Statewide
Communities Development Authority(the"Purchaser")
2. Irrevocable Instructions For Disbursement of Seller's VLF
Receivable to the Controller of the State of California dated the
Closing Date
3. Seller Tax Certificate, dated March 2, 2005
Capitalized terms used herein and not defined herein shall have the meaning given
such terms in the Sale Agreement.
We further certify as follows:
1. At the time of signing the Transaction Documents and the other documents and opinions
related thereto, we held said offices, respectively, and we now hold the same.
2. The representations and warranties contained in the Transaction Documents are true and
correct as of the date hereof in all material respects.
3. The Board of Supervisors duly adopted its resolution(the "Resolution") approving the sale of
the Seller's VLF Receivable at a meeting of the Board of Supervisors 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.
4. In the above-mentioned Resolution, the Board of Supervisors approved the financing of
qualified working capital expenditures.
Tax-Exempt/Contra Costa County
DOCSSFI:797142.2 C2-1
5. To the best knowledge of the undersigned, no action, suit, roceedin inquiry or
p g� q Y
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 Board of Supervisors members or officers to their respective offices, or seeking to restrain
or to enjoin the sale of the Seller's VLF Receivable or to direct the application thereof of the
proceeds of the sale thereof, or in any way contesting or affecting the validity or
enforceability of the Resolution, the Transaction Documents, the Indenture, the Notes, or any
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 or any other applicable agreement, or any
action on the part of the Seller contemplated by any of said documents, or which if
determined adversely to the Seller would have a material and adverse effect upon the Seller's
ability to sell the Seller's VLF Receivable, nor to our knowledge is there any basis therefor.
6. Insofar as it would materially adversely affect the Seller's ability to enter into, carry out and
perform its obligations under any or all of the Transaction Documents, or consummate the
transactions contemplated by the same, the Seller is not in breach of or default under any
applicable constitutional provision, law or administrative regulation of the State of California
or the United States or any 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 our knowledge, no event
has occurred and is continuing which with the passage of time or the giving of notice, or
both, would constitute a default or an event of default under any such instrument, and the
adoption of the Resolution and the execution and delivery by the Seller of the Transaction
Documents, and compliance by the Seller with the provisions thereof, under the
circumstances contemplated thereby, do not and will not in any material respect conflict with
or constitute on the part of the Seller a breach of or default under any agreement or other
instrument to which the Seller is a party or by which it is bound or any existing law,
regulation, court order or consent decree to which the Seller is subject.
7. Prior to the sale of the VLF Receivable to the Purchaser, the Seller was the sole owner of the
VLF Receivable, and has such right, title and interest as provided in the Act. From and after
the conveyance of the VLF Receivable by the Seller to Purchaser on the Closing Date, the
Seller shall have no interest in the VLF Receivable. Except as provided in the Sale
Agreement, the Seller has not sold, transferred, assigned, set over or otherwise conveyed an
right, title or interest of any kind whatsoever in all or any portion of the Seller's VLF
Receivable, nor has the Seller created, or to our knowledge permitted the creation of any
Lien thereon. Prior to the sale of the VLF Receivable to the Purchaser, the Seller held title to
the VLF Receivable free and clear of any Liens.
8. 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 materially adversely affect,
the sale by the Seller of the Seller's VLF Receivable or the performance by the Seller of its
obligations under the Resolution and the Transaction Documents and any other applicable
agreements, have been obtained and are in full force and effect.
Tax-Exempt/Contra Costa County
DOCSSF1:797142.2 C2-2
Dated as of the date first above written.
Name, Official Title Signature
.
C.-John Sweeten,County Admuustrator4 4'-tt(Z�
Stephen Ybarra, County Auditor-Controller
I HEREBY CERTIFY that the signatures of the officers named above are
genuine.
Dated as of the date first above written.
By:
of the Board of Supervisors oif/&
(15o'unty of Contra Costa,California
Tax-Exempt/Contra Costa County
DOCS SF 1:797142.2 C2-3
EXHIBIT C3
BILL OF SALE AND BRINGDOWN CERTIFICATE
BILL OF SALE AND BRINGDOWN CERTIFICATE
In consideration of the payment and delivery by the California Statewide
Communities Development Authority (the "Purchaser") to the undersigned (the "Seller") of
$[Final Purchase Price] (the "Final Purchase Price"), and pursuant to terms and conditions of the
Purchase and Sale Agreement (the "Sale Agreement"), dated March 2, 2005, between the Seller
and the Purchaser, the Seller does hereby (a) transfer, grant, bargain, sell, assign, convey, set
over and deliver to the Purchaser, absolutely and not as collateral security, without recourse
except as expressly provided in the Sale Agreement, the VLF Receivable as defined in the Sale
Agreement (the "VLF Receivable"), and (b) assign to the Purchaser, to the extent permitted by
law (as to which no representation is made), all present or future rights, if any, of the Seller to
enforce or cause the enforcement of payment of the VLF Receivable pursuant to the Act (as
defined in the Sale Agreement) and other applicable law.
The Seller hereby acknowledges receipt of the Final Purchase Price.
The Seller hereby certifies that the representations and warranties of the Seller set
forth in the Certificate of the Clerk of the Board of Supervisors dated March 2, 2005, the Seller
Certificate dated March 2, 2005, the Seller Tax Certificate dated March 2, 2005 and in the
Transaction Documents (as such terms are defined in the Sale Agreement) 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).
Dated: [Closing Date]
COL
By: _
Tax-Exempt/Contra Costa County
DOCSSF1:797142.2 0-1
r
EXHIBIT D
IRREVOCABLE INSTRUCTIONS TO CONTROLLER
IRREVOCABLE INSTRUCTIONS FOR DISBURSEMENT
OF VLF RECEIVABLE OF
COUNTY OF CONTRA COSTA
2005
Office of the Controller
State of California
P.O. Box 942850
Sacramento, California 94250-5872
Re: Notice of Sale of VLF Receivable by the County of Contra Costa and
Wiring Instructions Information Form
Dear Sir or Madam:
Pursuant to Section 6588.5(c) of the California Government Code, County of
Contra Costa (the "Seller") hereby notifies you of the sale by the Seller, effective as of the date
of these instructions written above, of all right, title and interest of the Seller in and to the "VLF
Receivable" as defined in Section 6585(1) of the California Government Code (the "VLF
Receivable"), namely, the right to payment of moneys due or to become due to the Seller out of
funds payable in connection with vehicle license fees to a local agency pursuant to Section
10754.11 of the California Revenue and Taxation Code.
By resolution, the Seller's Board of Supervisors authorized the sale of the VLF
Receivable to the California Statewide Communities Development Authority (the "Purchaser")
pursuant to a Purchase and Sale Agreement, dated March 2, 2005 and a Bill of Sale, dated
[Closing Date]. The VLF Receivable has been pledged and assigned by the Purchaser pursuant
to an Indenture, dated March 2, 2005 (the "Indenture") between the Purchaser and Wells Fargo
Bank,National Association, as Trustee (the "Trustee").
The Seller hereby irrevocably requests and directs that, commencing as of the
date of these instructions written above, all payments of the VLF Receivable (and documentation
related thereto) be made directly to Wells Fargo Bank, National Association, as Trustee, in
accordance with the wire instructions and bank routing information set forth below.
Please note that the sale of the VLF Receivable by the Seller is irrevocable and
that (i) the ,Seller has no power to revoke or amend these instructions at any time, (ii) the
Purchaser shall have the power to revoke or amend these instructions only if there are no
notes of the Purchaser outstanding under the Indenture and the Indenture has been
discharged, and (iii) so long as the Indenture has not been discharged, these instructions
cannot be revoked or amended by the Purchaser without the consent of the Trustee.
Tax-Exempt/Contra Costa County
DOCSSFI:797142.2 D-1
Bank Name: Wells Fargo N.A.
Bank ABA Routing#: 121000248
Bank Account#: 0001038377
Bank Account Name: Corporate Trust Clearing
Further Credit To: CSCDA VLF#16914200
Bank Address: Wells Fargo Bank
707 Wilshire Blvd., 17 Floor
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,
COUNTY OF CONTRA COSTA
By:
Authorized Officer
Tax-Exempt/Contra Costa County
DOCSSF 1:797142.2 D-2
EXHIBIT E
SELLER TAX CERTIFICATE
Seller Tax Certificate
This Seller Tax Certificate is executed and delivered by the County of Contra
Costa (the "Seller") in connection with the sale of its VLF Receivable (defined below) pursuant
to the Purchase and Sale Agreement, dated March 2, 2005, (the "Sale Agreement"), by and
between the Seller and the California Statewide Communities Development Authority (the
"Purchaser") in exchange-for the Final Purchase Price (as defined in the Sale Agreement). The
Seller certifies, covenants,warrants and represents as follows:
ARTICLE I. IN GENERAL
1.1 The Seller. The Seller is a political subdivision duly organized and
existing under and by virtue of the laws of the State of California. The Seller has the general
authority to exercise the power of eminent domain in furtherance of its governmental purposes.
1.2 Purpose of Seller Tax Certificate. In connection with the sale of the
VLF Receivable, the Purchaser is issuing its tax-exempt Revenue Anticipation Notes (Vehicle
License Fee Program), with appropriate series and sub-series designations (the "Notes"), to
acquire a portion of the VLF Receivable and similar receivables from other agencies
participating in the Purchaser's Vehicle License Fee Pro ant and is issuing its taxable Revenue
Anticipation Notes (Vehicle License Fee Program), ith appropriate series and sub-series
designations (the "Taxable Notes"), to acquire a portion of the VLF Receivable and similar
receivables from other agencies participating in the Purchaser's Vehicle License Fee Program.
The Seller is delivering this Seller Tax Certificate to the Purchaser with the understanding that
the Purchaser will rely in part upon this Seller Tax Certificate in obtaining an opinion from bond
counsel that interest on the Notes is excluded from gross income for federal income tax purposes
under Section 103 of the Internal Revenue Code of 1986.
1.3 Purpose of Financing. The proceeds of the sale of the Tax-Exempt VLF
Receivable (defined below), and investment earnings thereon, will be used to pay working
capital expenses of the Seller(as further defined below).
The proceeds of the sale of the Taxable VLF Receivable (defined below), and
investment earnings thereon, will be used to pay interest on the portion of the Notes and the'
Taxable Notes relating to the Tax-Exempt VLF Receivable and the Taxable VLF Receivable,
respectively, through November 15, 2006.
1.4 Definitions. Unless the context otherwise requires, the following
capitalized terms have the following meanings:
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DOCSSFI:797142.2 E-1
"Available Amounts"means all amounts (excluding unspent Gross Proceeds) held
in any funds or accounts maintained by or on behalf of the Seller, or by or on behalf of
any Related Person, which can be availed of by the Seller to pay general working capital
expenditures (including those payable directly or indirectly from amounts in or derived
from the Seller's General Fund) without legislative or judicial action and without a
legislative, judicial or contractual requirement to reimburse the amount so withdrawn
from such funds and accounts. For this purpose, a legislative, judicial or contractual
requirement shall be given effect only if it was- adopted or entered into for bona fide
governmental purposes unrelated to tax-exempt financing and without any view towards
increasing the amounts that could be borrowed on a tax-exempt basis or treated as
unavailable by or on behalf of the Seller or any Related Person.
"Available Amounts Deficit" means the amount by which the Seller's
expenditures that are paid from Available Amounts or would have been paid from
Available Amounts exceeds the Seller's cash balances or revenues that are or would be
Available Amounts. For example, if the Seller makes a payment out of the Seller's
General Fund of$1,000 to a person that is not a Related Person on a day when there are
zero Available Amounts, the Seller would then have a $1,000 Available Amounts Deficit
even though the Seller might transfer $1,000 from another fund to the Seller's General
Fund in order to avoid a negative balance in the Seller's General Fund.
"Code" means the Internal Revenue Code of 1986 (including amendments
thereto).
"Governmental Unit" means any state, or political subdivision of a state, but
excludes the United States and its agencies or instrumentalities.
"Gross Proceeds" means the proceeds from the sale of the Tax-Exempt VLF
Receivable together with any investment earnings thereon.
"Investment Property"means any security or obligation (other than a Tax Exempt
Bond), any annuity contract or any other investment type property.
"Nonpurpose Investment" means any Investment Property in which Gross
Proceeds are invested.
"Rebate Requirement"' means, with respect to the Gross Proceeds, the amount of
rebatable arbitrage computed pursuant to Section 1.148-3 of the Treasury Regulations.
"Related Person" means any entity commonly controlled with or by the Seller, as
set forth in Treasury Regulations Section 1.150-1(e).
"Taxable VLF Receivable" means that portion of the VLF Receivable acquired
with the Taxable Notes.
"Tax-Exempt Bond" means any obligation the interest on which is excluded from
federal gross income pursuant to the provisions of Section 103 of the Code, unless such
obligation is a "specified private activity bond" within the meaning of Section
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DOCSSFI:797142.2 E-2
57(a)(5)(C) of the Code, and also includes stock in a regulated investment company to
the extent that at least 95%of income to the stockholder is derived from such obligations.
"Tax-Exeiiipt VLF Receivable" means that portion of the VLF Receivable
acquired with the Notes.
"VLF Receivable" is defined in Section 6585(1) of the California Government
Code., namely, the right to payment of moneys due or to become due to the Seller out of
funds payable in connection with vehicle license fees to a local agency pursuant to
Section 10754.11 of the California Revenue and Taxation Code.
"Meld"means the arbitrage yield on the Notes.
ARTICLE 11. TAX LIMITATIONS
2.1 Expenditure of Proceeds. For purposes of this Seller Tax Certificate,
Gross Proceeds will be treated as spent only when they are deposited into the Seller's General
Fund and are treated as expended as set forth below. Gross Proceeds will be treated as expended
by the Seller for any purpose for which the Seller is authorized to expend funds from its General
Fund, however, Gross Proceeds will be expended (i) on the date the Gross Proceeds are first
transferred to the Seller, but only to the extent that the Seller has an Available Amounts Deficit
or (ii) after the date the Gross Proceeds are first transferred to the Seller, but only to the extent
the Seller is making a payment to a person that is not a Related Person and the Seller has no
Available Amounts. For purposes of this section, otherwise Available Amounts excludes
amounts that are actually held or set aside in a reasonable working capital reserve not exceeding
10% of the amount of Gross Proceeds initially transferred to the Seller, which does not exceed
five percent (5%) of the Seller's total working capital expenditures from its available funds in
Fiscal Year 2003-2004; provided, that if on the date that is six (6) months from the date of issue
of the Notes, all Gross Proceeds shall not have been so withdrawn and spent, the Seller shall
promptly notify Orrick, Herrington & Sutcliffe LLP ("Bond Counsel") and, to the extent of its
power and authority, comply with the instructions from Bond Counsel as to the means of
satisfying the rebate requirements of Section 148 of the Code. The working capital reserve shall
be funded with any revenues of the Seller's General Fund, but will not be funded with proceeds
of the Notes. In no event will amounts held in the working capital reserve exceed an amount that
constitutes a reasonable cash reserve based on the Seller's anticipated expenditures and revenues.
. 2.2 Deficit Expectations. The Seller's expected daily Available Amounts
Deficits, plus the amount of the Seller's reasonable working capital reserve (i.e., 10% of the
amount of Gross Proceeds initially transferred to the Seller), for the accounting periods during
which and immediately following the date the Seller first receives Gross Proceeds are anticipated
to be simificantly larger than the total amount of Gross Proceeds. The funds and accounts
maintained by or for the benefit of the Seller that hold Available Amounts are the Seller's
general governmental fund, including the Seller's General Fund, Land Development Fund, Child
Development Fund and County Library Fund, together with the Seller's Tax Resources Fund.
The Seller accounts for real property tax delinquencies pursuant to the Teeter Plan. The Seller
uses Available Amounts to make payment (directly or indirectly) of property taxes due to the
local agencies within the Seller but not paid by the taxpayer.
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DOCSSFI:797142.2 E-3
2.3 Federal Guarantee. The Seller will not directly or indirectly use or
pen-nit the use of any Gross Proceeds or take or omit to take any action that would cause the
Notes to be obligations that are "federally guaranteed" within the meaning of Section 149(b) of
the Code. In furtherance of this covenant, the Seller, to the extent of its power, will not allow the
payment of principal or interest with respect to the Notes to be guaranteed (directly or indirectly)
in whole or in part by the United States or any agency or instrumentality thereof. The Seller will
not use 5% or more of the Gross Proceeds to make or finance loans the payment of principal or
interest with respect to which is guaranteed in whole or in part by the United States or any
agency or instrumentality thereof.
2.4 No Refunding. Gross Proceeds will not be used directly or indirectly to
make principal, interest or premium payments with respect to any obligation of the Seller.
2.5 Expenditure and Investment Expectations. The Seller reasonably
expects that all of the Gross Proceeds will be expended within thirteen months. Not more than
50% of the Gross Proceeds will be invested in Nonpurpose Investments with a maturity of four
years or more.
2.6 No Other Replacement Proceeds or Abusive Device. The Seller will
not use any Gross Proceeds directly or indirectly to replace funds of the Seller which are or will
be used directly or indirectly to acquire Investment Property reasonably expected to produce a
yield that is materially higher than the yield on the Notes. The sale of the Tax-Exempt VLF
Receivable is not and will not be part of a transaction or series of transactions that (i) enables the
Seller to exploit the difference between tax exempt and taxable interest rates to gain a material
financial advantage and (ii) overburdens the market for tax exempt obligations in any manner,
including without limitation, by selling obligations that would not otherwise be sold or selling
more obligations, or issuing them sooner, or allowing them to remain outstanding longer, than
would otherwise be necessary.
2.7 General Tax Covenant. The Seller will not take any action, or fail to
take any action, if such action or failure to take such action would adversely affect the exclusion
from gross income of the interest on the Notes pursuant to section 103 of the Code. To that end,
the Seller will comply with all requirements of Sections 103 and 141 through 150 of the Code to
the extent that such requirements are, at the time, applicable to the Gross Proceeds and in effect.
2.8 Retention of Records. The Seller covenants to maintain all records
relating to the requirements of the Code and the representations, certifications and covenants set
forth in this Tax Certificate until November 15, 2009. The records that must be retained include,
but are not limited to documentation evidencing the expenditure of Gross Proceeds.
ARTICLE 111. REBATE
3.1 Undertakings, Pursuant to the Sale Agreement, the Seller has covenanted
to comply with the requirements of the Code set forth herein. The Seller acknowledges that the
Gross Proceeds will be treated as proceeds of the Notes and that the United States Department of
the Treasury has issued regulations with respect to certain of these undertakings, including the
proper method for computing whether any rebate amount is due the federal government under
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DOCSSF1:797142.2 E-4
Section 148(f) of the Code. (Treas. Reg. Sections 1.148-1 through 1.148-11, 1.150-1 and 1.150-
2.) The Seller further acknowledges that the United States Department of the Treasury may issue
additional regulations with respect to certain other of these undertakings. The Seller covenants
that it will undertake to deten-nine what is required with respect to the rebate provisions
contained in Section 148(f) of the Code and said regulations from time to time and will comply
with any requirements that may apply to the Gross Proceeds. Except to the extent inconsistent
with any requirements of the Code or future regulations, the Seller will undertake the
methodology described in this Seller Tax Certificate. The Seller may be relieved of the
obligation with respect to the Rebate Requirement set forth herein, as directed by the Purchaser.
3.2 Recordkeeping. The Seller shall maintain or cause to be maintained
detailed records with respect to each Nonpurpose Investment attributable to Gross Proceeds,
including: (a) purchase date; (b) purchase price; (c) information establishing fair market value
on the date such investment became a Nonpurpose Investment; (d) any accrued interest paid; (e)
face amount; (f) coupon rate; (g) periodicity of interest payments; (h) disposition price; (i) any
accrued interest received; and 0) disposition date. Such detailed recordkeeping is required to
facilitate the calculation of the Rebate Requirement. Promptly upon the request of the Purchaser,
the Seller will make available to the Purchaser, for the purpose of enabling the Purchaser to
comply with the requirements of its respective Tax Certificate, copies of any and all records that
Seller maintains, or is required to maintain,pursuant to this Seller Tax Certificate.
3.3 Rebate Requirement Calculation and Payment.
(a) Unless otherwise directed by the Purchaser, the Seller represents, warrants
and covenants that it will engage BondLogistix LLC to prepare a calculation of the Rebate
Requirement with respect to the Gross Proceeds consistent with the rules described in this
Section 3.3. The Seller will engage BondLogistix LLC to prepare and deliver to the Purchaser
the caTculation of the Rebate Requirement with respect to the Gross Proceeds within thirty (30)
days after the date the Notes mature (November 15, 2006). Concurrent with the delivery of such
calculation and as directed by the Purchaser, the Seller will set aside from designated funds an
amount sufficient to pay the Rebate Requirement with respect to the Gross Proceeds.
(b) For purposes of calculating the Rebate Requirement with respect to the
Gross Proceeds (i) the aggregate amount earned with respect to a Nonpurpose Investment shall
be determined by assuming that the Nonpurpose Investment was acquired for an amount equal to
its fair market value (determined as provided in Section 1.148-5(d)(6) of the Treasury
Regulations) at the time it becomes a Nonpurpose Investment, and (ii) the aggregate amount
earned with respect to any Nonpurpose Investment shall include any unrealized gain or loss with
respect to the Nonpurpose Investment (based on the assumed purchase price at fair market value
and adjusted to take into account amounts received with respect to the Nonpurpose Investment
and earned original issue discount or premium) on the first date when there are no outstanding
Notes or when the investment ceases to be a Nonpurpose Investment.
(c) The Seller shall pay to the United States Department of the Treasury (or,
in the alternative, to the Purchaser if so requested), out of designated funds not later than fifty
(5 0) days after the date the Notes mature (November 15, 2006), an amount equal to one hundred
percent (100%) of the Rebate Requirement (determined as of the first date when there are no
Tax-Exempt/Contra Costa County
DOCSSF1:797142.2 E-5
outstanding Notes) with respect to the Gross Proceeds, plus any actual or imputed earnings on
such Rebate Requirement, all as set forth in Section 1.148-3 of the Treasury Regulations and as
determined by or on behalf of the Purchaser.
(d) Each payment required to be made pursuant hereto and relating to the
%_0
Notes shall be filed with the Internal Revenue Service Center, Ogden UT 84201, on or before
the date such payment is due, and shall be accompanied by Internal Revenue Service Form 8038-
T. The Seller must retain records of the calculations required by this Section 3.3 until six (6)
years after the retirement of the last obligation of the Notes.
(e) Notwithstanding any other provision of this Seller Tax Certificate, the
Seller shall not be required to make any payment under this Seller Tax Certificate unless such
payment (i)relates to the Gross Proceeds, or(ii) results from the acts or omissions of the Seller.
(f) Notwithstanding any other provision of this Seller Tax Certificate, to the
extent that the Purchaser is required to make any payment under its Tax Certificate, and such
payment (i) relates to the Gross Proceeds, or (ii) results from the acts or omissions of the Seller,
then the Seller hereby agrees that, promptly upon the request of the Purchaser, it will reimburse
the Purchaser for such payment.
3.4 Investments and Dispositions.
(a) General Rule. No Investment Property may be acquired by the Seller with
Gross Proceeds for an amount (including transaction costs, except as otherwise provided in
Section 1.148-5(e) of the Treasury Regulations) in excess of the fair market value of such
Investment Property. No Investment Property acquired by the Seller with Gross Proceeds may
be sold or otherwise disposed of for an amount (including transaction costs, except as otherwise
provided in Section 1.148-5(e) of the Treasury Regulations) less than the fair market value of the
Investment Property.
(b) Fair Market Value. In general, the fair market value of any Investment
Property is the price a willing buyer would pay to a willing seller to acquire the Investment
Property, with no amount paid artificially to reduce or increase yield ield on such Investment
Property. This Section 3.4 describes various safe harbors for determining fair market value.
With an Opinion of Counsel, other methods may be used to establish fair market value; provided,
however, that such methods comply with the requirements of Section 1.148-5(d)(6) of the
Treasury Regulations.
(c) Arm's-length Purchases and Sales. If Investment Property is acquired
by the Seller pursuant to an arm's length transaction without regard to any amount paid to reduce
the yield on the Investment Property, the fair market value of the Investment Property shall be
the amount paid for the Investment Property (without increase for transaction costs, except as
otherwise provided in Section 1.148-5(e) of the Treasury Regulations). If Investment Property is
sold or otherwise disposed of by the Seller in an arm's length transaction without regard to any
reduction in the disposition price to reduce the Rebate Requirement, the fair market value of the
Investment Property shall be the amount realized from the sale or other disposition of the
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DOCSSFI:797142.2 E-6
Investment Property (without reduction for transaction costs, except as otherwise provided in
Section 1.148-5(e) of the Treasury Regulations).
(d) SLGS- If a United States Treasury obligation is acquired directly from or
disposed of directly to the United States Department of the Treasury(as in the case of the United
States Treasury Securities - State and Local Government Series), such acquisition or disposition
shall be treated as establishing a market for the obligation and as establishing the fair market
value of the obligation.
(e) Investment Contracts. The purchase price of any Investment Property
acquired by the Seller pursuant to an investment contract (within the meaning of Section 1.148-
)( of the Treasury Regulations) shall be determined as provided in this Section 3.4(e).
No investment contract shall be acquired by the Seller with Gross Proceeds unless the
requirements of this Section 3.4(e) are satisfied. With respect to any investment contract, the
Seller will obtain from the provider of the investment contract acquired by the Seller, broker
thereof or other party, such information, certification or representation as will enable the Seller to
determine that the requirements of this Section 3.4(e) are satisfied.
The purchase price of an investment contract acquired by the Seller will be
considered to be fair market value if:
(1) the Seller has made (or has had made on its behalf) a bona fide solicitation
for the investment contract; the solicitation must have specified the material terms of the
investment contract (i.e., all the terms that could directly or indirectly affect the yield or the cost
of the investment including the collateral security requirements for the investment contract) and,
unless the moneys invested pursuant to such investment contract will be held in a reasonably
required reserve fund or in bona fide debt service funds, the Seller's reasonably expected
drawdown schedule for the moneys to be invested; the solicitation has a legitimate business
purpose (i.e., a purpose other than to increase the purchase price or reduce the yield) for every
term of the bid specification;
(2) all bidders have an equal opportunity to bid so that, for example, no bidder
is given the opportunity to review other bids (a last look)before bidding;
(3) the Seller solicits bids from at least three (3) investment contract providers
with established industry reputations as competitive providers of investment contracts;
(4) the Seller includes in the bid specifications a statement to potential bidders
that by submitting a bid, the provider is making certain representations that the bid is bona fide,
and specifically that 1) the bidder did not consult with any other potential provider about its bid,
2) the bid was determined without regard to any other formal or informal agreement that the
potential provider had with the Seller or any other person, and 3) the bid was not submitted
solely as a courtesy to the Seller or any other person for purposes of satisfying the requirements
of Section 1.148-5 of the Treasury Regulations;
(5) at least three bids meeting the qualification requirements of the bid
solicitation (as set forth in (1) above) have been received from different providers of investment
contracts that have no material financial interest in the Notes (the following investment contract
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DOCSSFI:797142.2 E-7
providers are considered to have a material financial interest in the issue: 1) a lead underwriter
in a negotiated underwriting, but only until 15 days after the issue date of the issue, 2) an entity
acting as a financial advisor with respect to the purchase of the investment contract at the time
the bid specifications were forwarded to potential providers; and 3) any related party to a
provider that is disqualified for one of the two preceding reasons);
(6) at least one of the bids received by the Seller that meets the requirements
of thep receding paragraph is from an investment contract provider with an established industry
reputation as a competitive provider of investment contracts;
(7) the investment contract has a yield (net of any broker's fees) at least equal
to the highest yielding of the qualifying bids received from the bidders that have no material
financial interest in the Notes; if the investment contract is not the highest-yielding of the
qualifying bids, the Seller must have significant non-tax reasons, such as creditworthiness of the
bidder, for failure to purchase the highest-yielding investment contract offered;
(8) if an agent for the Seller conducts the bidding process, the agent does not
bid;
(9) the provider of the investment contract certifies as to all administrative
costs to be paid on behalf of the Seller, including any fees paid as broker commissions in
connection with the investment contract.
(f) Deemed Acquisition or Sale. The fair market value of any Investment
Property not directly purchased with Gross Proceeds for which there is an established securities
market generally is the price at which a willing buyer would purchase Investment Property from
a willing seller in a bona fide, arms length transaction.
(g) Certificates of Deposit. The purchase price of a certificate of deposit
issued by a commercial bank that has a fixed interest rate, a fixed principal payment schedule, a
fixed maturity and a substantial penalty for early withdrawal,will be considered to be fair market
value if:
(1) the yield on the certificate of deposit is not less than the yield on
reasonably comparable direct obligations of the United States; and
(2) the yield on the certificate of deposit is not less than the highest published
yield of the provider thereof which is currently available on comparable certificates of deposit
offered to the public.
(h) Broker Compensation. For purposes of computing the Yield on any
investment contract acquired through a broker, reasonable compensation received by such
broker, whether payable by or on behalf of the obligor or obligee of such investment contract,,
may be taken into account in determining the cost of the investment contract (as provided in
Section 1.148-5(e)(2)(iii) of the Treasury Regulations). Compensation is deemed reasonable if
does not exceed the lesser of(i) $30,000 or (ii) 0.2% of the amount reasonably expected, as of
the date of acquisition of the investment contract, to be invested under the investment contract
over its term, or $3,000 (if 0.2% of such amount reasonably expected to be invested under the
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DOCSSFI:797142.2 E-8
investment contract over its term is less than $3,000). In addition, the total fees received by the
broker with respect to the investment of any proceeds of the Notes that are taken into account
with respect to all investment contracts, at any time, may not exceed $85,000. All amounts
referenced are to be adjusted for inflation after the Closing Date.
3.5 Segregation of Proceeds. In order to perform the calculations required by
the Code, it is necessary to track separately all of the Gross Proceeds. To that end, the Seller
shall cause to be established separate accounts or subaccounts, or shall take such other
accounting measures as are necessary in order to account fully for all Gross Proceeds.
3.6 Filing Requirements. To the extent not filed by the Purchaser, the Seller
will file or cause to be filed such reports or other documents with the Internal Revenue Service
as are required by the Code to be filed by it.
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DOCSSFI:797142.2 E_9
ARTICLE IV, OTHER MATTERS
4.1 Expectations. The undersigned is an authorized representative of the
Seller acting for and on behalf of the Seller in executing this Seller Tax Certificate. To the best
of the knowledge and belief of the undersigned, there are no other facts, estimates or
circumstances that would materially change the expectations as set forth herein, and said
expectations are reasonable.
4.2 Amendments. Notwithstanding any other provision of this Seller Tax
Certificate, the Seller may amend this Seller Tax Certificate and thereby alter any actions
allowed or required by this Seller Tax Certificate if such amendment is signed by an authorized
officer and is supported by formal written agreement by the Purchaser.
4.3 Survival of Defeasance. Notwithstanding any provision in this Seller Tax
Certificate to the contrary, the obligation to comply with all requirements contained in this Seller
Tax Certificate shall survive defeasance or prepayment of the Notes.
Dated: March Z, 2005.
COUNTY OF CONTRA COSTA
By
Auth
Vted Officer
Tax-Exempt/Contra Costa County
DOCSSFI:797142.2 E-10
EXHIBIT F
ESCROW INSTRUCTION LETTER
PARTICIPATION AGREEMENT
AND
ESCROW INSTRUCTION LETTER
March 2, 2005
California Statewide Communities Development Authority
1100 K Street
Sacramento, CA 95814
Re: VLF Receivable Financing
Dear Sir or Madam:
The County of Contra Costa (the "Seller") hereby notifies you of its agreement to
participate in the California Statewide Communities Development Authority VLF Receivable
Financing. By adoption of a resolution (the "Resolution") authorizing the sale of its VLF
Receivable, the Seller's Board of Supervisors has agreed to sell to the California Statewide
Communities Development Authority, for a purchase price that meets the conditions set forth in
the Resolution, all of its right,title and interest in the VLF Receivable.
Enclosed herewith are the following documents which have been duly approved
and executed by the Seller and which are to be held in escrow by Orrick, Herrington &
Sutcliffe LLP, as transaction counsel ("Transaction Counsel"), as instructed below:
1. certified copy of the Resolution, together with a certificate of the Clerk of the
Board of Supervisors, dated March 2, 2005;
2. the Seller Certificate, dated March 2, 2005;
3. the Seller Tax Certificate, dated March 2, 2005
4. the Opinion of Seller's Counsel, dated March 2, 2005;
5. the Purchase and Sale Agreement, dated March 2, 2005; and
6. the Irrevocable Instructions to Controller, undated.
The foregoing documents are to be held in escrow by Transaction Counsel and
shall be delivered only upon payment to the Seller on or before April 29, 2005, of the Final
Purchase Price (as defined in the Purchase and Sale Agreement) that meets the conditions of the
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DOCSSFI:797142.2
Resolution. Upon such payment, Transaction Counsel is hereby authorized to fill in the closing
date on the Irrevocable Instructions to the Controller.
If the Final Purchase Price meeting the conditions of the Resolution is not paid to
the Seller on or before April 29, 2005, this agreement shall terminate and Transaction Counsel
shall return all of the enclosed documents to the Seller.
Very truly yours,
COUNTY OF CONTRA COSTA
By:
Authorized Officer
Enclosures
cc: Orrick, Herrington & Sutcliffe LLP
Tax-Exempt/Contra Costa County F-2
DOCSSFI:797142.2