2009-109- Approving The Form Of And Authorizing The Execution And Delivery Of A Purchase And Sale Agreement And Related Documents With Respect To The Sale Of The Seller's Proposition 1a Receivable From The State
®F THE -
TOE Q(?S GATO'
A RESOLUTION APPROVING THE FORM OF AND AUTHORIZING THE
EXECUTION AND DELIVERY OF A PURCHASE AND SALE AGREEMENT
AND RELATED DOCUMENTS WITH RESPECT TO THE SALE OF THE
SELLER'S PROPOSITION lA RECEIVABLE FROM THE STATE; 'AND
DIRECTING AND AUTHORIZING CERTAIN OTHER ACTIONS IN
CONNECTION THEREWITH
WHEREAS, pursuant to Section 25.5 of Article XIII of the California Constitution and
Chapter 14XXXX of the California Statutes of 2009 (Assembly Bill No. 15), as amended (the
"Act"), certain local agencies within the State of California (the "State") are entitled to receive
certain payments to be made by the State on or before June 30, 2013, as reimbursement for
reductions in the percentage of the total amount of ad valorem property tax revenues allocated to
such local agencies during the- State's 2009-10 fiscal year (the "Reimbursement Payments"),
which reductions have been authorized pursuant to Sections 100.05 and 100..06 of the California
Revenue and Taxation Code;
WHEREAS, the Town of;LoS .G"atos, a local agency within the meaning of Section
6585(f) of the California Government Code (the "Seller"), is entitled to and has determined to
sell all right, title and interest of the Seller in and to its "Proposition lA receivable", as defined in
Section 6585(g) of the California Government Code (the "Proposition IA Receivable"), namely,
the right to payment of moneys -due or to become due to the Seller pursuant to Section
25.5(a)(1)(B)(iii) of Article XIII of the California Constitution and Section 100.06 of the
California Revenue and Taxation Code, in order to obtain money to fund public capital
improvements or working capital;
WHEREAS, the Seller is authorized to sell or otherwise dispose of its property as the
interests of its residents require;
WHEREAS, the California Statewide Communities Development Authority, a joint
exercise of powers authority organized and existing under the laws of the State (the
"Purchaser"), has been authorized pursuant to Section 6588(x) of the California Government
Code to purchase the Proposition lA Receivable;
WHEREAS, the Purchaser desires to purchase the Proposition lA Receivable and the
Seller desires to sell the Proposition lA Receivable pursuant to a purchase and sale agreement by
and between the Seller and the Purchaser in the form presented to this Town Council (the "Sale
Agreement") for the purposes set fot-th herein;
WHEREAS, in order to finance the purchase price of the Proposition lA Receivable from
the Seller and the purchase price of other Proposition lA Receivables from other local agencies,
the Purchaser will issue its bonds (the "Bonds") pursuant to Section 6590 of the California
Government Code and an Indenture (the "Indenture"), by and between the Purchaser and Wells
Fargo Banl<, National Association, as trustee (the "Trustee"), which Bonds will be payable solely
ATTACHMENT 1
from the proceeds of the Seller's Proposition lA Receivable and other Proposition lA
Receivables sold to the Purchaser by local agencies in connection with the issuance of the
Bonds;
WHEREAS, the Seller acknowledges that (i) any transfer of its Proposition lA
Receivable to the Purchaser pursuant to the Sale Agreement shall be treated as an absolute sale
and transfer of the property so transferred and not as a pledge or grant of a security interest by
'Town of I os C~ito~ to secure a borrowing, (ii) anysuch sale of its Proposition 1A Receivable to
the Purchaser shall automatically be perfected without the need for physical delivery,
recordation, filing or further act, (iii) the provisions of Division 9 (commencing with Section
9101) of the California Commercial Code and Sections 954.5 to 955.1 of the California Civil
Code, inclusive, shall .not apply to the sale of its Proposition lA Receivable, and (iv) after such
transfer, the Seller shall have no right, title, or interest in or to the Proposition lA Receivable
sold to the Purchaser and the Proposition lA Receivable will thereafter be owned, received, held
and disbursed only by the Purchaser or a trustee or agent appointed by the Purchaser;
WHEREAS, the Seller acknowledges that the Purchaser will grant a security interest in
the Proposition 1 A Receivable to the Trustee and any credit enhancer to secure payment of the
Bonds;
WHEREAS, a portion of the proceeds of the Bonds will be used by the Purchaser to,
among other things, .pay the purchase price of the Proposition lA Receivable;
WHEREAS, the Seller will use the proceeds received from the sale of the Proposition lA
Receivable for any lawful purpose as permitted under the applicable. laws of the State;
NOW THEREFORE, the Town Council of the Town of Lc~~ C~~~to~ hereby resolves as
follows:
Section 1. All of the recitals set forth above are true and correct, and this To~~, n
Council` hereby so finds and determines.
Section 2. The Seller hereby authorizes the sale of the Proposition 1 A Receivable
to the Purchaser for a price equal to the amount certified as the Initial Amount (as defined in the
Sale Agreement) by the County auditor pursuant to the Act. The form of Sale Agreement
presented to t11e Town Council' is hereby approved. An Authorized Officer (as set forth in
Appendix A of this Resolution, attached hereto and by this reference incorporated herein) is
hereby authorized and directed to execute and deliver the Sale Agreement on behalf of t11e Seller,
which shall be in the form presented at this meeting.
Section 3. Any Authorized Officer is hereby authorized and directed to send, or
to cause to be sent, an irrevocable written instruction to the State Controller (the "Irrevocable
Written Instruction") notifying the State of the sale of the Proposition IA Receivable and
instructing the disbursement pursuant to Section 6588.6(c) of California Government Code of the
Proposition 1 A Receivable to the Trustee, on behalf of the Purchaser, which Irrevocable Written
Instruction shall be in the form presented at this meeting.
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Section 4. The Authorized Officers and such other Seller officers, as appropriate,
are hereby authorized and directed, jointly and severally, to do any and all things and to execute
and deliver any and all documents, including but not limited to, if required, appropriate escrow
instructions relating to the delivery into escrow of executed documents prior to the closing of the
Bonds, and such other documents mentioned in the .Sale Agreement or the Indenture, which any
of them may deem necessary or desirable in order to implement the Sale Agreement and
otherwise to carry out, give effect to and comply with the terms and intent of this Resolution; and
all such actions heretofore taken by such officers are hereby ratified, confirmed and approved.
Section 5. All consents, approvals, notices, orders, requests and other actions
permitted or required by any of the documents authorized by this Resolution, whether before or
after the sale of the Proposition lA Receivable or the issuance of the Bonds, including without
limitation any of the foregoing that may be necessary or desirable in connection with any default
under or amendment of such documents, may be given or taken by an Authorized Officer
without further authorization by this Town Council; and each Authorized Officer is hereby
authorized and directed to give any such consent, approval, notice, order or request, to execute
any necessary or appropriate documents or amendments, and to take. any such action that such
Authorized Officer may deem necessary or desirable to further the purposes of this Resolution.
Section 6. The I ~~~~ n ~ uunc;il acknowledges that, upon execution and delivery of
the Sale Agreement, the Seller is contractually obligated to sell the Proposition. IA Receivable to
the Purchaser pursuant to t11e Sale Agreement and the Seller shall not have any option to revoke
its approval of the Sale Agreement or to deter-nine not to perform its obligations thereunder.
approval.
Section 7. This Resolution shall take effect from and after its adoption and
PASSED AND ADOPTED by the Town Coi~ic_l of the'Lown ofyLos, Gatos, State
of California, this ~ ~'~~ day of ~`~-~~~~, , 2009, by the following vote
AYES: ~.,~ i Gi.,r1-~, ~YIC'_ a
rroES: 1°k~n~. ~~` ~ '~~-~-~Y, c:~,e1c~ 41~.'~,.~~~~r i`''~l i ~~ 1,~~~~SC~°v'~'~~'~
ABSENT: ~~
L Mayor
.Attest:
~. ~-.~-
C1erk~ clrnin~,ttator
'~ `~...
Approved as to form
SELLER'S COUNSEL
B ~ ~
y .~.~~ _
Dated: ~`'~_~~i~~ ~ l~ ~ r~t,~7
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