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HomeMy WebLinkAboutRDA AG PKT 2009-08-10 #2AGEN®A STAFF REPORT DATE: August 10, 2009 TO: Chairperson and Members of the Redevelopment Agency . THRU: David Carmany, Executive Director FROM: Lee Whittenberg, Director of Development Services SUBJECT: CONSENT TO TRANSFER -SEAL BEACH TRAILER PARK SUMMARY OF REQUEST: Authorize the Executive Director to Execute Exhibit C-1, Issuer Consent to Transfer of Project, of the "Assignment and Assumption Agreement" and any other necessary documents to allow Seal Beach Shores, Inc. ("Trailer Park Residents' Group") to effectuate the transfer of the Seal Beach Trailer Park ("Trailer Park") to Seal Beach Shores, Inc., Shores, Inc. of all of the obligations of Corporation related to such transfer and the of Seal Beach Mobile Home Park Revenu Park Project), Series 2000A (the "Bonds") Assumption Agreement. SAC6CGROUN®: and the assumption by Seal Beach Seal Beach Affordable Housing Redevelopment Agency of the City e Bonds (Seal Beach Mobile Home as described in the Assignment and On January 26, 2009 the Agency considered a Staff Report regarding consideration of the Agency ". to explore the feasibility of the resident's 501(c)(3) entity assuming the existing City bonds originally issued for the park purchase by LINC Housing." The Agency, by unanimous vote of the Agencymembers, directed "...staff to work with the Seal Beach Shores, Inc. Board in assuming the bonds to acquire the property for the residents." The Agency's primary objectives concerning the Trailer Park have been since the issuance of the Bonds in 2000: 1. Maintain affordable housing in the Trailer Park; and 2. Avoid default on the Bonds. The Agency directed its counsel and staff to seek review and approval of the transfer of the Trailer Park by ACA Financial Guaranty Corp. (Bond Insurer) and Best, Best, & Kreiger (Bond Counsel). Agency counsel and staff have worked with all parties to ensure that the necessary protections are retained for the Agency and that all contractual obligations that currently exist will remain in place upon the transfer of the ownership of the Seal Beach Trailer Park to Seal Beach Shores, Inc. Agenda Item 2 Page 2 ACA Financial Guaranty Corp. (Bond Insurer) have approved and consented to this transaction. A copy of the Bond Insurer letter is provided as Attachment B for the information of the Agency. The Bond Insurer consent letter also includes the "Assignment and Assumption Agreement" as reviewed and approved by the City Attorney The parties have agreed upon the forms of legal opinions amongst Best, Best, & Kreiger (Bond Counsel) and Borrower's Counsel. Bond Counsel's legal opinion has been finalized and will be delivered into escrow, to be released prior to closing and upon receipt of a legal opinion from Borrower's Counsel. Provided as Attachment C is the as prepared legal opinion letter of Bond Counsel for information of the Agency. FISCAL IMPACT: The Trailer Park Residents' Group agreed to reimburse the Agency for all costs and expenses incurred by Agency staff, attorneys and consultants in connection with its request. Funds have been deposited for reimbursement of Agency expenses and the Administrative Services/Finance Department will perform a final accounting of all Agency costs incurred. RECOMMEIV®ATION: Adopt Resolution No. 09-04, A Resolution of the Redevelopment Agency of the City of Seal Beach Authorizing the Executive Director to Execute Exhibit C-1, Issuer Consent to Transfer of Project, of the "Assignment and Assumption Agreement", and Any Other Necessary Documents to Effectuate the Transfer of the Seal Beach Trailer Park to Seal Beach Shores, Inc. and the Assumption by Seal Beach Shores, Inc. of all of the Obligations of Seal Beach Affordable Housing Corporation Related to Such Transfer and the Redevelopment Agency of the City of Seal Beach Mobile Home park Revenue Bonds (Seal Beach Mobile Home Park Project) Series 2000 A upon Review and Concurrence by Agency Counsel. SUBMITTED BY: NOTED AND APPROVED: ~~ e Whittenberg David Carmany, Executive Director Director of Development Serv' s Redevelopment Agency Attachment(s): A. Resolution No. 09-04 B. Consent Letter, ACA Financial Guaranty Corp., dated June 22, 2009, including: ^ Exhibit A, Assignment and Assumption Agreement; ^ Exhibit A -Legal Description; ^ Exhibit B -Contributed Assets; ^ Exhibit C-1 -Issuer Consent to Transfer of Project ^ Exhibit C-2 -Consent to Transfer of Project of ACA C. Form of Consent Letter -Best, Best & Kreiger, dated April, 2009 - d~iTT~1'1s9-71NI~ItlT RESOLUTION NO. 09-04 RESOLUTION NUMBER 09-04 A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE EXHIBIT C-1, ISSUER CONSENT TO TRANSFER OF PROJECT, OF THE "ASSIGNMENT AND ASSUMPTION AGREEMENT", AND ANY OTHER NECESSARY DOCUMENTS TO EFFECTUATE THE TRANSFER OF THE SEAL BEACH TRAILER PARK TO SEAL BEACH SHORES, INC. AND THE ASSUMPTION BY SEAL BEACH SHORES, INC. OF ALL OF THE OBLIGATIONS OF SEAL BEACH'AFFORDABLE HOUSING CORPORATION RELATED TO SUCH TRANSFER AND THE REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH MOBILE HOME PARK REVENUE BONDS (SEAL BEACH MOBILE HOME PARK PROJECT), SERIES 2000A UPON REVIEW AND CONCURRENCE BY AGENCY COUNSEL WHEREAS, On January 26, 2009 the Agency considered a Staff Report regarding consideration of the Agency "... to explore the feasibility of the resident's 501(c)(3) entity assuming the existing City bonds originally issued for the park purchase by L/NC Housing+'; and WHEREAS, the Redevelopment Agency, by unanimous vote, directed "...staff to work with the Seal Beach Shores, Inc. Board in assuming the bonds to acquire the property for the residents"; and WHEREAS, Agency counsel and staff have worked with all parties to ensure that the necessary protections are retained for the Agency and that all contractual obligations that currently exist will remain in place upon the transfer of the ownership of the Seal Beach Trailer Park to Seal Beach Shores, Inc.; and WHEREAS, ACA Financial Guaranty Corp. (Bond Insurer) and Best, Best, & Kreiger (Bond Counsel) have approved and consented to the assignment and assumption and transfer of the Seal Beach Trailer Park. NOW, THEREFORE, THE REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH DOES HEREBY RESOLVE: Section 1. The Executive Director is hereby authorized to execute Exhibit C-1, Issuer Consent to Transfer of Project, of the Assignment and Assumption Agreement. Section 2. The Executive Director is hereby authorized to execute any other necessary documents to effectuate the transfer of the Seal Beach Trailer Park to Seal Beach Shores, Inc. upon review and concurrence by Agency Counsel. (Intentionally Left Blank) Resolution Number 09-04 PASSED, APPROVED AND ADOPTED by the Redevelopment Agency of the City of Seal Beach this 10th day of Auoust , 2009 by the following vote: AYES: Agency Members NOES: Agency Members ABSENT: Agency Members ABSTAIN: Agency Members Chairman ATTEST: Secretary/City Clerk STATE OF CALIFORNIA } COUNTY OF ORANGE } SS CITY OF SEAL BEACH } I, Linda Devine, City Clerk of the City of Seal Beach, California, do hereby certify that the foregoing Resolution is the original copy of Resolution Number 09-04 on file in the office of the City Clerk, passed, approved, and adopted by the Redevelopment Agency of the City of Seal Beach at a meeting held thereof on the 10th day of Auoust , 2009. Secretary/City Clerk ATTACFlIVIENT B CONSENT LETTER, ACA FINANCIAL GUARANTY CORP., DATED JUNE 22, 2009, INCLUDING: ^ EXHIBIT A, ASSIGNMENT AND ASSUMPTION AGREEMENT; ^ EXHIBIT A -LEGAL DESCRIPTION; ^ EXHIBIT B -CONTRIBUTED ASSETS; ^ EXHIBIT C-1 -ISSUER CONSENT TO TRANSFER OF PROJECT ^ EXHIBIT C-2 - CONSENT TO TRANSFER OF PROJECT OF ACA `- - www.aca.com .`_` ® ACA Financial Guaranty Corp. ~ ~ 140 Broadway, 47th Floor ® New York, NY 10005 Flnanelel Guaranb Wrporatbn Voice 212.375.2000 June 22, 2009 Fax 212.375.2100 Redevelopment Agency of the City of Seal Beach Seal Beach, California Union Bank of California, N.A. San Francisco, California Seal Beach Affordable Housing Corporation Long Beach, California Seal Beach Shores, Inc. Long Beach, California Re: $6,750,000 Redevelopment Agency of the City of Seal Beach Mobile Home Park Revenue Bonds (Seal Beach Mobile Home Park Project), Series 2000A (the "Bonds") This consent is delivered by the undersigned on behalf of ACA Financial Guaranty Corporation ("ACA") in connection with a request letter, dated March 24, 2009 (the "Request"), from Jon P. Rodrigue of The Loftin Firm LLP, counsel to Seal Beach Shores, Inc. (the `Transferee"). As described in the Request, Seal Beach Affordable Housing Corporation (the "Owner") intends to transfer its interest in the Seal Beach Trailer Park (the "Project") to the Transferee, which Project was financed in part with the proceeds of the Bonds. ACA has heretofore issued its Bond Insurance Policy No. N11200-40 insuring the payment of principal and interest as due on the Bonds issued by the Redevelopment Agency of the City of Seal Beach (the "Issuer"). The Bonds are issued and secured under an Indenture of Trust, dated as of December 1, 2000 (the "Indenture"), by and between the Issuer and Union Bank of California, N.A., as trustee. The Issuer loaned the proceeds from the Bonds to the Original Borrower pursuant to a Loan Agreement, dated as of December 1, 2000 (the "Loan Agreement"), by and between the Issuer and the Original Borrower. Pursuant to Sections 6.2 and 6.32 of the Loan Agreement, ACA hereby consents to the transfer by the Owner of its interest in the Project to the Transferee under the proposed Assignment and Assumption Agreement by and among the Owner, Transferee and Trustee (the form of which is attached hereto as Exhibit A and incorporated herein by reference, and to be dated as of a date determined by the parties thereto) and in furtherance of the requirements of said Sections 6.2 and 6.32 of the Loan Agreement. This consent is expressly given in reliance upon the information submitted in connection with the Request and does not constitute a consent or waiver in connection with or in respect of any other provision of the Loan Agreement, the Indenture or any other financing document delivered in connection with the Bonds insured by ACA. This consent should not be construed,in any way as a recommendation or representation by ACA regarding the advisability of the transfer of the Project or any transactions related thereto. In particular, ACA understands that the Owner and the Transferee have consulted with counsel regarding the federal income tax consequences, if any, of the transaction. ACA provides this consent for its own benefit and in its own interest, and the Owner and the Transferee are solely responsible for obtaining such other waivers, consents or approvals or taking such other actions, if any, as may be required in connection with the financing documents delivered in connection with the Bonds. This consent is granted with the understanding and on the condition that the Owner and/or the Transferee shall promptly deliver, or cause to be delivered, to ACA (i) a complete set of the fully-executed closing documents (including an Assignment and Assumption Agreement in which Transferee agrees to operate the Project in a manner that does not constitute an unrelated trade or business of such organization or a governmental unit (as described in Section 145 of the Internal Revenue Code)) and legal opinions required under Sections 6.2 and 6.32 of the Loan Agreement relating to the transfer of the Project (including but not limited to an opinion of counsel to the Transferee that the obligations transferred to the Transferee under the Assignment and Assumption Agreement are validly transferred and legal, valid and binding on the Transferee) and (ii) at or prior to the transfer of the Project, a surveillance fee of $10,000 for the review of these matters. ACA FI ANCIAL GUARANTY CORPORATION By: ~ ~_ Steven J. B owitz General Counsel Exhibit A Contribution, Assignment and Assumption Agreement [see attached] RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: Redevelopment Agency of the ) City of Seal Beach ) 211 Eighth Street ) Seal Beach, CA 907040 ) Attn: Director of Development Services ) (Space above for Recorder's Office use only) This document is recorded for the benefit of the Redevelopment Agency of the City of Seal Beach and the recording is fee-exempt under Section 27383 of the Government Code. ASSIGNMENT AND ASSUMPTION AGREEMENT (SEAL BEACH TRAILER PARK PROJECT) By and Among SEAL BEACH AFFORDABLE HOUSING CORPORATION, SEAL BEACH SHORES, INC., and UNION BANK, N.A. (formerly known as Union Bank of California, N.A.), as trustee Dated as of August 1, 2009 Relating to $6,750,000 REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH MOBILE HOME PARK REVENUE BONDS (SEAL BEACH TRAILER PARK PROJECT) RVPUB\KSNO W\759849.1 THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Agreement"), made and entered into as of August 1, 2009, by and among the SEAL BEACH AFFORDABLE HOUSING CORPORATION, a California nonprofit public benefit corporation ("SBAHC"), SEAL BEACH SHORES, INC., a California nonprofit public benefit corporation ("SBSI") and UNION BANK, N.A. (formerly known as Union Bank of California, N.A.), a national banking association, as trustee ("Trustee"). WITNESSETH: WHEREAS, in furtherance of the maintenance of housing for citizens of low and very low income, on December 21, 2000 the Redevelopment Agency of the City of Seal Beach, a California redevelopment agency (the "Agency"), issued pursuant to an Indenture of Trust, dated as of December 1, 2000 (the "Indenture"), by and between the Agency and Trustee, $6,750,000 aggregate principal amount "Redevelopment Agency of the City of Seal Beach Mobile Home Park Revenue Bonds (Seal Beach Trailer Park Project), Series 2000A" (the "2000 Bonds"), the proceeds of which were loaned to LILAC Community Development Corporation ("LING-CDC") for the purpose of acquiring and rehabilitating the Seal Beach Trailer Park (the "Project") located within the City on the real property described in Exhibit A attached hereto as a low and very low income project; WHEREAS, in consideration of the loan made to LING-CDC from the proceeds of the 2000 Bonds, LING-CDC entered into that certain Loan Agreement, dated as of December 1, 2000 (the "2000 Loan Agreement"), by and among the Agency, the Trustee and LILAC-CDC relating to the Bonds, under the terms of which LING-CDC executed and delivered to the Agency for assignment to the Trustee its promissory note, dated December 1, 2000 (the "2000 Note"), in the principal amount of $6,750,000, under which it was to make loan payments to the Trustee in the amounts and at the time sufficient to pay, as due, the principal of and interest on the 2000 Bonds; . WHEREAS, in furtherance of the issuance of the 2000 Bonds, the Agency, the Trustee and LING-CDC entered into the Regulatory Agreement and Declaration of Restrictive Covenants, dated as of December 1, 2000 (the "2000 Regulatory Agreement"), which provided that the use and operation of the Project be restricted in certain respects in order to ensure that the Project would be used and operated in accordance with the Internal Revenue Code; and WHEREAS, in furtherance of issuance of the 2000 Bonds, the Agency and LINC- CDC entered into the Administration and Oversight Agreement, dated as of December 1, 2000 (the "2000 Administration Agreement") under which the Agency appointed Rosenow Spevacek Group, Inc. ("RSG") as an "Oversight Agent" under the 2000 Loan Agreement to monitor the compliance of LING-CDC thereunder and as "Program Administrator" to monitor compliance with the 2000 Regulatory Agreement; and WHEREAS, in compliance with Securities and Exchange Commission Rule 15c2-12, LILAC-CDC and the Trustee, acting in its capacity as dissemination agent, entered into the Continuing Disclosure Agreement, dated as of December 1, 2000 (the "2000 Disclosure Agreement"), under which LING-CDC agreed to provide annual reports to the Trustee for dissemination in conformity of Rule 15c2-12; and RVPUB~KSNOVl~759849.1 WHEREAS, in order to secure the payment of the 2000 Note, LILAC-CDC executed and delivered a Deed of Trust, dated as of December 1, 2000 (the "2000 Deed of Trust"), under which it conveyed, in trust, its right, title and interest to the Project to Fidelity National Title Insurance Company, as trustee under the 2000 Deed of Trust, for the benefit of the Trustee under the 2000 Indenture; and WHEREAS, in order to further secure its obligations under the 2000 Loan Agreement, LILAC-CDC executed and there was filed with the Secretary of State a UCC-1 Financing Statement on December _, 2000 (the "2000 Financing Statement"), giving a security interest in all personal property located in the Project to the Trustee, pursuant to the California Uniform Commercial Code (the 2000 Loan Agreement, 2000 Regulatory Agreement, 2000 Administration Agreement, 2000 Disclosure Agreement, 2000 Deed of Trust and 2000 Financing Statement are hereinafter referred to collectively as the "2000 Bond Documents"); and WHEREAS, in connection with the issuance of the Bonds and the financing of the Project, the Agency and LILAC-CDC entered into the following documents: (1) Amended and Restated Loan and Grant Agreement dated as of August 31, 2005 (the "Agency Loan Agreement"), (2) a Regulatory Agreement dated as of December 1, 2000, as amended by the Amendment of Regulatory Agreement dated as of August 31, 2005 (the "Agency Regulatory Agreement"), (3) a Deed of Trust dated as of December 1, 2000, as modified by the Modification of Deed of Trust dated as of August 31, 2005 (the "Agency Deed of Trust"), and (4) Residual Receipts Promissory Note in the principal amount of $985,000 and dated December 21, 2000 (the "Agency Note") (the Agency Loan Agreement, Agency Regulatory Agreement, Agency Deed of Trust and Agency Note are hereinafter referred to collectively as the "Agency Loan Documents"); and WHEREAS, pursuant to Section 6.32 of the 2000 Loan Agreement LILAC-CDC transferred the Project and all of LINC-CDC's obligations and rights under the 2000 Bond Documents and the Agency Loan Documents to SBAHC pursuant to that certain Contribution, Assignment and Assumption Agreement dated as of August 25, 2005; WHEREAS, SBSI has been formed as a California non-profit public benefit corporation, and has qualified as a 501(c)(3) tax exempt public charity; WHEREAS, in furtherance of their respective tax exempt purposes, SBAHC wishes to contribute the Project and contribute and assign all related personal property, intangibles, service contracts, and similar obligations as described in Exhibit B attached hereto, and collectively referred to herein as the "Contributed Assets" to SBSI, and SBSI wishes to accept the contribution and assignment; WHEREAS, concurrently with the recordation of this Agreement, SBAHC has executed and delivered to SBSI a grant deed conveying the Project to SBSI as permitted by Section 6.2 of the 2000 Loan Agreement and Section 10 of the 2000 Regulatory Agreement and the parties hereto wish to acknowledge and effectuate the contribution and assignment of the 2000 Bond Documents, the Agency Loan Documents and the Contributed Assets by SBAHC to SMSI and SBSI's acceptance and assumption thereof. RVPUB~KSNOVl~759849.1 2 NOW, THEREFORE, in consideration of the mutual covenants and undertakings set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree respectively as follows: Section 1. SBAHC Representations and Warranties. In order to induce the Agency, the Trustee and ACA Financial Guaranty Corporation ("ACA") to consent to this Agreement, SBAHC represents and warrants as follows: a. There is no pending or, to the best knowledge of SBAHC, threatened action, suit, proceeding, inquiry or investigation, at law or in equity, by or before any court, public board or body, known by SBAHC, nor, to the best of the knowledge of SBAHC, is there any basis therefor, looking toward the dissolution or liquidation of SBAHC, or wherein an unfavorable decision, ruling or finding would, in any way, materially adversely affect the transactions contemplated by this Agreement or which, in any way, would adversely affect the execution, validity, delivery or enforceability of this Agreement. b. SBAHC is anot-for-profit corporation duly organized, validly existing and in good standing under the laws of the State of California, has the power and authority to own its property and assets, to carry on its respective business as now being conducted by it and to execute, deliver and perform this Agreement. c. SBAHC has been determined by the Internal Revenue Service to be and continues to be exempt from Federal income taxes under Section 501(a) of the Internal Revenue Code of 1986, as amended (the "Code"), by virtue of being an organization described in Section 501(c)(3) of the Code, except for unrelated business income subject to taxation under Section 511 of the Code, and is not a "private foundation" as described in Section 590(a) of the Code, and SBAHC does not know of any circumstances which would disqualify or threaten to disqualify itself as such an organization. d. The execution, delivery and performance of this Agreement have been duly authorized by all requisite corporate action and approval on the part of SBAHC, and the execution and delivery hereof and compliance with the provisions hereof has not and will not conflict with or violate any provision of law, any rule, regulation, order, judgment, writ, injunction or decree of any court or agency of government or the certificate of incorporation or bylaws of SBAHC or require consent that has not otherwise been secured prior to the date hereof under, or result in a breach under, any indenture, agreement or other instrument to which SBAHC is a party or by which it or any of its property is subject to or bound, or be in conflict with, or constitute (with due notice and/or lapse of time) a breach of or default under any such indenture, agreement or other such instrument. e. This Agreement and any and all other agreements and documents required to be executed and delivered by SBAHC in order to carry out, give effect to and consummate the transactions contemplated by this Agreement have been duly authorized, executed and delivered by SBAHC and have not been amended, modified or rescinded, remain in full force and effect and are the legal, valid and binding obligations of SBAHC enforceable against it in accordance with their terms, except as such enforcement thereof may be limited by any bankruptcy, insolvency, reorganization, moratorium or similar statute, rule, regulation or other law affecting RVPUBUCSNOW~759849.1 3 the enforcement of creditors' rights and remedies generally, or by the unavailability of, or any limitation on the availability of, any particular right or remedy (whether in a proceeding in equity or at law) because of the discretion of a court or of any procedural requirement, public polity or equitable principle or otherwise, or by general principles of equity, and no authority for its execution, delivery or performance has been repealed, revoked or rescinded. SBAHC has duly authorized the taking of and has taken all internal action necessary to give effect to the transactions contemplated to be performed by the documents cited in this paragraph. f. SBAHC is not a party to or bound by any contract, agreement or other instrument, or subject to any charter or other restriction or any judgment, order, writ, injunction, decree, rule or regulation which, in the opinion of SBAHC, materially adversely affects the business, operations, affairs, properties, assets or condition, financial or otherwise, of SBAHC. g. Neither this Agreement nor any other document, certificate or statement furnished to you by or on behalf of SBAHC contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein not misleading. There is no fact known to SBAHC which materially adversely affects the business, operations, affairs, conditions, properties or assets of SBAHC. h. All consents, approvals or authorizations, if any, of any governmental authority, agency, quasi-governmental agency or private corporation required on the part of SBAHC in connection with the execution and delivery of this Agreement have been duly obtained, and SBAHC has complied with applicable provisions of law, if any, requiring any designation, declaration, filing, registration and/or qualification with any governmental authority in connection with such execution and delivery. Section 2. SBSI Representations and Warranties. In order to induce the Agency, the Trustee and the ACA to consent to this Agreement, the Assignor represents and warrants as follows: a. There is no pending or, to the best knowledge of SBSI, threatened action, suit, proceeding, inquiry or investigation, at law or in equity, by or before any court, public board or body, known by SBSI, nor, to the best of the knowledge of SBSI, is there any basis therefor, looking toward the dissolution or liquidation of SBSI, or wherein an unfavorable decision, ruling or finding would, in any way, materially adversely affect the transactions contemplated by this Agreement or which, in any way, would adversely affect the execution, validity, delivery or enforceability of this Agreement. b. SBSI is anot-for-profit corporation duly organized, validly existing and in good standing under the laws of the State of California, has the power and authority to own its property and assets, to can-y on its respective business as now being conducted by it and to execute, deliver and perform this Agreement. c. SBSI has been determined by the Internal Revenue Service to be and continues to be exempt from Federal income taxes under Section 501(a) of the Code by virtue of being an organization described in Section 501(c)(3) of the Code (or corresponding provisions of prior law), except for unrelated business income subject to taxation under Section 511 of the RVPUB~KSNOW~759849.1 4 Code, and is not a "private foundation" as described in Section 590(a) of the Code, and SBSI does not know of any circumstances which would disqualify or threaten to disqualify itself as such an organization. d. The execution, delivery and performance of this Agreement have been duly authorized by all requisite action and approval on the part of SBSI, and the execution and delivery hereof and compliance with the provisions hereof has not and will not conflict with or violate any provision of law, any rule, regulation, order, judgment, writ, injunction or decree of any court or agency of government or the certificate of incorporation or bylaws of SBSI or require consent that has not otherwise been secured prior to the date hereof under, or result in a breach under, any indenture, agreement or other instrument to which SBSI is a parry.or by which it or any of its property is subject to or bound, or be in conflict with, or constitute (with due notice and/or lapse of time) a breach of or default under any such indenture, agreement or other such instrument. e. This Agreement and any and all other agreements and documents required to be executed and delivered by SBSI in order to carry out, give effect to and consummate the transactions contemplated by this Agreement have been duly authorized, executed and delivered by SBSI and have not been amended, modified or rescinded, remain in full force and effect and are the legal, valid and binding obligations of SBSI enforceable against it in accordance with their terms, except as such enforcement thereof may be limited by any bankruptcy, insolvency, reorganization, moratorium or similar statute, rule, regulation or other law affecting the enforcement of creditors' rights and remedies generally, or by the unavailability of, or any limitation on the availability of, any particular right or remedy (whether in a proceeding in equity or at law) because of the discretion of a court or of any procedural requirement, public polity or equitable principle or otherwise, or by general principles of equity, and no authority for its execution, delivery or performance has been repealed, revoked or rescinded. SBSI has duly authorized the taking of and has taken all internal action necessary to give effect to the transactions contemplated to be performed by the documents cited in this paragraph. f. SBSI is not a party to or bound by any contract, agreement or other instrument, or subject to any charter or other restriction or any judgment, order, writ, injunction, decree, rule or regulation which, in the opinion of SBSI, materially adversely affects the business, operations, affairs, properties, assets or condition, financial or otherwise, of SBSI. g. Neither this Agreement nor any other document, certificate or statement furnished to you by or on behalf of SBSI contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein not misleading. There is no fact known to SBSI which materially adversely affects the business, operations, affairs, conditions, properties or assets of SBSI. h. All consents, approvals or authorizations, if any, of any governmental authority, agency, quasi-governmental agency or private corporation required on the part of SBSI in connection with the execution and delivery of this Agreement have been duly obtained, and SBSI has complied with applicable provisions of law, if any, requiring any designation, declaration, filing, registration and/or qualification with any governmental authority in connection with such execution and delivery. RVPUB~KSNOV1~759849.1 5 Section 3. Assigmnent and Assumption. SBAHC hereby assigns, grants, conveys and transfers to SBSI and SBSI hereby unconditionally and irrevocably accepts and assumes all of the rights, duties, responsibilities, obligations and liabilities of SBAHC under the 2000 Bond Documents, Agency Loan Documents, and Contributed Assets, and SBSI hereby agrees and undertakes to perform all of the loans, obligations, covenants and agreements of SBAHC contained therein to the full extent as if SBSI had originally been a party to each such document, subject to any and all applicable nonrecourse provisions set forth therein. Section 4. Sin lg a Purpose Entity. SBSI agrees to maintain its qualification as a tax exempt organization described in Section 501(c)(3) of the Internal Revenue Code, and shall operate the Project in a manner that does not constitute an unrelated trade or business of such organization. Section 5. Indemnities. a. SBAHC hereby agrees to indemnify and hold SBSI, Agency, ACA and Trustee harmless from any and all claims and obligations imposed under, or relating to, the Project, 2000 Bond Documents, Agency Loan Documents and the Contributed Assets, azising or occurring prior to the date of this Agreement. b. SBSI hereby agrees to indemnify and hold SBAHC, LILAC-CDC, Agency, ACA and Trustee harmless from any and all claims and obligations imposed under, or relating to, the Project, 2000 Bond Documents, Agency Loan Documents and the Contributed Assets, azising or occurring after the date of this Agreement. Section 6. Payment of Obligations. Any unpaid liabilities assumed by SBSI pursuant to this Agreement shall be paid directly by SBSI. Section 7. No Prior Assi~. SBAHC hereby represents and wazrants that it has not previously assigned, pledged, hypothecated or otherwise transferred any of its rights or obligations as to the Project, the 2000 Bond Documents, the Agency Loan Documents, or the Contributed Assets. For accounting and tax basis purposes, SBAHC hereby agrees to provide SBSI with detailed information concerning the tax and accounting basis in the Contributed Assets. Section 8. Agency and ACA as Third Party Beneficiaries. The Agency and ACA are third party beneficiaries of this Agreement and this Agreement cannot be amended in any way which adversely affects the Agency's or ACA's interests herein without the written consent of the Agency and/or ACA, as appropriate. Section 9. Further Assurances and Acts. It .is further agreed by the parties to this Agreement, that the appropriate officers and employees of each will undertake to perform such further duties and to execute such further documents as are necessary to implement and carry into full effect the intent and purpose of the within Agreement including, without limitation, execution and delivery of any and all assignments, certificates, agreements, notices, consents, instruments of conveyance, warrants and other documents which they, or any of them, may deem necessary or advisable in order to consummate the assignment and assumption as described herein or to otherwise effectuate the purposes of this Agreement. RVPUB~KSNOW~7~9849.1 6 Section 10. Consent of Third Parties. This Agreement is expressly contingent on SBAHC and SBSI receiving an executed Consent to Transfer of Project of the Issuer attached hereto as Exhibit C-1 and an executed Consent to Transfer of Project of ACA attached hereto as Exhibit C-2. Section 11. Counterparts. This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Section 12. Applicable Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. [Remainder of page intentionally left blank] RVPUBU{SNOW~759849.1 7 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first above written. SEAL BEACH AFFORDABLE HOUSING CORPORATION, a California nonprofit public benefit corporation By: Executive Director SEAL BEACH SHORES, INC., a California nonprofit public benefit corporation By: Executive Director UNION BANK, N.A., as Trustee By: Authorized Officer RVPUBUCSNOW~759849.1 g ACKNOWLEDGMENT STATE OF CALIFORNIA ) )ss: COUNTY OF ) On ,before me, ~ a notary public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) RVPUB~KSNOW~759849.1 9 ACKNOWLEDGMENT STATE OF CALIFORNIA ) )ss: COUNTY OF ) On before me, a notary public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) RVPUB~KSNOW1759849.1 1 ~ ACKNOWLEDGMENT STATE OF CALIFORNIA ) )ss: COUNTY OF ) On before me, a notary public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) RVPUB\KSNOW~759849.1 11 EXHIBIT A LEGAL DESCRIPTION A PARCEL OF LAND PARTLY IN THE CITY OF SEAL BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA AND PARTLY IN THE CITY OF LONG BEACH COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AND AS DESCRIBED AS FOLLOWS: A PORTION OF THAT PARCEL OF LAND GRANTED TO THE CITY OF SEAL BEACH BY THAT CERTAIN FINAL ORDER OF CONDEMNATION, SUPERIOR COURT OF LOS ANGELES COUNTY, CASE NO. C-78004, PARCEL 4, A CERTIFIED COPY OF WHICH WAS RECORDED MARCH 23, 1977 IN BOOK 12115, PAGE 195 OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA; AND A PORTION OF TIDE LAND LOCATION NO. 137 "SURVEY NO. 106", AS PATENTED BY THE STATE OF CALIFORNIA ON FEBRUARY 12, 1901 AND RECORDED APRIL 27, 1901 IN BOOK 9, PAGE 105 OF PATENTS, RECORDS OF LOS ANGELES COUNTY, AND RECORDED SEPTEMBER 5, 1905 IN BOOK 1, PAGE 231 OF PATENTS, RECORDS ORANGE COUNTY; SAID ABOVE PORTIONS OF LAND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE MOST NORTHERLY CORNER OF TRACT NO. 9783, AS SHOWN ON MAP FILED IN BOOK 437, PAGES 32 TO 36 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY; SAID CORNER BEING A POINT IN THE SOUTHEASTERLY LINE OF THE LOS ANGELES COUNTY FLOOD CONTROL DISTRICT LAND DESCRIBED AS PARCEL 8 IN SUPERIOR COURT CASE NO. 231287, IN AND FOR THE COUNTY OF LOS ANGELES, IN BOOK 2383, PAGE 42, RECORDS OF ORANGE COUNTY, SAID SOUTHEASTERLY LINE BEING A CURVE CONCAVE SOUTHEASTERLY AND HAVING A RADIUS OF 2000.00 FEET, A RADIAL LINE FROM SAID POINT BEARS SOUTH 35° 57' S5" EAST; THENCE NORTHEASTERLY ALONG SAID CURVE AND SOUTHEASTERLY LINE, AN ARC DISTANCE OF 356.05 FEET; THENCE TANGENT TO SAID CURVE AND CONTINUING ALONG SAID SOUTHEASTERLY LINE, NORTH 54° 02' OS" EAST 239.79 FEET TO THE NORTHEASTERLY LINE OF THAT 200.00 FOOT WIDE STRIP OF LAND DESCRIBED IN THE QUITCLAIM DEED TO THE PACIFIC ELECTRIC RAILWAY COMPANY, RECORDED FEBRUARY 21, 1926 IN BOOK 514, PAGE 44 OF DEEDS, RECORDS OF ORANGE COUNTY; THENCE SOUTHEASTERLY ALONG SAID NORTHEASTERLY LINE, SOUTH 42° 15' 32" EAST 492.08 FEET TO THE NORTHWESTERLY LINE OF FIRST STREET, AS IT NOW EXISTS, SAID LAST MENTIONED NORTHWESTERLY LINE BEING A LINE PARALLEL WITH AND DISTANT NORTHWESTERLY 110.00 FEET, MEASURED AT RIGHT ANGLES FROM THE BOUNDARY LINE OF THE RANCHO LOS ALAMITOS, PER MAP RECORDED IN BOOK 1, PAGES 460, 461 AND 462 OF PATENTS OF LOS ANGELES COUNTY, CALIFORNIA, AND AS SHOWN ON THE RECORD OF SURVEY RECORDED IN RECORD OF SURVEY BOOK 90, PAGES 23 TO 30, AND AS MORE PARTICULARLY ESTABLISHED BY SEAL BEACH BOUNDARY LINE AGREEMENT NO 2 DATED FEBRUARY 5, 1968 AND RECORDED APRIL 8, 1968 IN BOOK 8565, PAGE 1 OF OFFICIAL RECORDS OF ORANGE COUNTY; THENCE SOUTHWESTERLY ALONG SAID LAST MENTIONED PARALLEL LINE, AND THE NORTHWESTERLY LINE OF FIRST STREET, SOUTH 54° 48' 38" WEST 606.81 FEET TO RVPUBUCSNOVl~7~9849.1 A-1 THE BEGINNING OF A TANGENT CURVE CONCAVE SOUTHEASTERLY AND HAVING A RADIUS OF 610.00 FEET; THENCE SOUTHWESTERLY ALONG SAID CURVE, AN ARC DISTANCE OF 6.79 FEET TO THE MOST EASTERLY BOUNDARY CORNER OF SAID TRACT NO. 9783; THENCE NORTHWESTERLY ALONG THE NORTHEASTERLY BOUNDARY LINE OF SAID TRACT NO. 9783, THE FOLLOWING COURSES: NORTH 42° 17' 11" WEST 203.39 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE EASTERLY AND HAVING A RADIUS OF 15.00 FEET; THENCE NORTHERLY ALONG SAID CURVE, AN ARC DISTANCE OF 21.79 FEET T'O THE BEGINNING OF A REVERSE CURVE CONCAVE NORTHWESTERLY AND ~iAVING A RADIUS OF 112.50 FEET; THENCE NORTHEASTERLY ALONG SAID CURVE, AN ARC DISTANCE OF 10.24 FEET TO THE INTERSECTION OF ANON-TANGENT LINE BEARING NORTH 43° 58' 37" WEST, A LINE FROM SAID POINT OF INTERSECTION BEARS NORTH 54° 15' 24" WEST; THENCE NORTH 43° 58' 37" WEST 230.28 FEET TO THE MOST NORTHERLY CORNER OF SAID TRACT NO. 9783 AND THE POINT OF BEGINNING. THE ABOVE DESCRIBED PARCEL OF LAND IS SHOWN AS "NOT A PART" ON THE MAP OF TRACT NO. 9783, FILED IN BOOK 437, PAGES 32 TO 36, OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA. EXCEPT FROM THE ABOVE DESCRIBED PROPERTY, THAT PORTION OF THE SUBSURFACE THEREOF LYING ONE HUNDRED (100) FEET OR MORE BELOW THE SURFACE OF SAID PROPERTY, BUT WITHOUT AN RIGHT OF ENTRY UPON THE SURFACE THEREOF, AS SET FORTH IN MEMORANDUM OF LEASE, RECORDED JANUARY 30, 1980 IN BOOK 13484, PAGE 1969 OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA. ALSO EXCEPT THEREFROM ALL OIL, OIL RIGHTS, NATURAL GAS RIGHTS, MINERAL RIGHTS AND OTHER HYDROCARBON SUBSTANCES BY WHATEVER NAME KNOWN, TOGETHER WITH APPURTENANT RIGHTS THERETO, WITHOUT, HOWEVER, ANY RIGHT TO ENTER UPON THE SURFACE OF SAID LAND NOR ANY PORTION OF THE SUBSURFACE LYING ABOVE A DEPTH OF 500 FEET, AS EXCEPTED OR RESERVED IN INSTRUMENTS OF RECORD. END OF LEGAL DESCRIPTION RVPUB\KSNOW\759849.1 A-2 EXHIBIT B CONTRIBUTED ASSETS (1) All fixtures, furniture, equipment, furnishing and other personal property which relate in any way to the construction, use, occupancy, operation, development or marketing of the Project or the development thereof; (2) All utility deposits made (and any refunds thereof) and any and all other funds deposited as security for the fulfillment of any of the' obligations of SBAHC in connection with the Project (or any part thereof); (3) All deposits and bonds of SBAHC relating to the Park (or any part thereof), including, without limitation, deposits and bonds provided to any governmental agency as to the Park; (4) All original reports, appraisals, drawings, plans, blueprints, studies, specifications, certificates of occupancy, building permits, including all governmental approvals and permits and surveys relating to all or any part of the Park, all copies thereof, and all amendments, modifications, supplements, general conditions and addenda thereto, and copies of all financial documents, instruments, bills, checks, invoices, and all other books and records relating to all or any part of the Park; (5) All warranties and guaranties, whether oral or written, of manufacturers, vendors, contractors artd subcontractors relating to the construction, development or work performed or to be performed in connection with the Park; (6) All of SBAHC's legal and equitable claims, causes of action, and rights against the architects, engineers, designers, contractors, subcontractors, suppliers, and materialmen and any other party who has supplied labor, services, materials or equipment, directly or indirectly, in connection with the design, planning, marketing, construction, manufacturing or operation of all or any part of the Park; (7) The tradenames, tradestyles, service marks, logos, letterheads, advertising symbols, goodwill, telephone numbers, advertising rights, negatives, prints, brochures, flyers, pamphlets and all other media items used or to be used in connection with the marketing of the Park (or any part thereof); (8) All prepaid insurance policies in connection with the Park or improvements and all liability insurance policies relating to the Park or improvements thereon to the extent they apply to events that occurred prior to the transfer of the Park or such improvements; (9) All permits, licenses, contracts, approvals, business licenses, applications and agreements, of every kind and nature, relating to the Park, including, without limitation, all building permits and environmental and subdivision approvals; and (10) All general intangibles and other intangible property used in connection with the construction, use, operation, occupancy, development or marketing of the Park and improvements thereon, including but not limited to the agreements as to the management of the Park, the agreement as to the management of the SBAHC's assets, legal services and operating contracts. RVPUB\KSNO W\759849.1 B-1 EXHIBIT C-1 ISSUER CONSENT TO TRANSFER OF PROJECT The undersigned hereby consents to the transfer of the Project in accordance with the terms of the Assignment and Assumption Agreement (Seal Beach Trailer Park Project) dated August 1, 2009 among Seal Beach Affordable Housing Corporation, Seal Beach Shores, Inc., and Union Bank, N.A. This consent shall not be construed as a consent to any subsequent sale or transfer of the Project. REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH, a California redevelopment agency By: Name: Title: RVPUB\KSNOW\759849.1 C-1-1 ATTACHMENT C FORM OF CONSENT LETTER - BEST, BEST & KREIGER, DATED APRIL, 2009 BEST BEST & KRIEGER ATTORNEYS AT LAW INDIAN WELLS SACRAMENTO (760) 568-2611 3750 University Avenue, Suite 400 (916) 325-4000 - Post Office Box 1028 - IRVINE Riverside, California 92502-1028 SAN DIEGO (949) 263-2600 (951) 686-1450 (619) 525-1300 LOS ANGELES (951) 686-3083 Fax WALNUT CREEK (213) 617-8100 BBKlaw.com ~ (925) 977-3300 ONTARIO (909) 989-8584 Kyle A. Sstow (951)826-8272 Kyle. S now@bbklaw. com April _, 2009 Redevelopment Agency of the City of Seal Beach Seal Beach, California Union Bank of California N.A. Los Angeles, California ACA Financial Guaranty Corporation New York, New York Re: $6,750,000 Redevelopment Agency of the City of Seal Beach Mobile Home Park Revenue Bonds (Seal Beach Mobile Home Park Project) Series 2000A Ladies and Gentlemen: We acted as bond counsel in connection with the issuance by the Redevelopment Agency of the City of Seal Beach (the "Agency") of its $6,750,000 aggregate principal amount Mobile Home Pazk Revenue Bonds (Seal Beach Mobile Home Pazk Project) Series 2000A (the "Bonds"). The Agency issued the Bonds pursuant to the provisions of Section 33740 and following of the California Health and Safety Code and an Indenture of Trust, dated as of December 1, 2000 (the ``Indenture"), between the Agency and Union Bank of California, N.A. (the "Trustee"). The Bonds were issued for the purpose of making a loan to LINC Community Development Corporation, a California nonprofit public benefit corporation (the "Original Borrower") pursuant to a Loan Agreement, dated as of December 1, 2000 (the "Loan Agreement"), among the Agency, the Trustee and the Borrower, to finance the acquisition of the Seal Beach Trailer Pazk (the "Project"). The Original Borrower, pursuant to Section 6.32 of the Loan Agreement, transferred all of its interest in the Project to Seal Beach Affordable Housing Corporation (the "Borrower") under the terms of a Contribution Assignment and Assumption Agreement dated as of August 25, 2005. Terms not otherwise defined herein shall have the meanings ascribed to such terms in the Indenture. We aze informed that the Borrower desires to transfer the Project to Seal Beach Shores, Inc., a California nonprofit public benefit corporation (the "Transferee") under an Assignment of Assumption Agreement (Seal Beach Trailer Park Project) dates as of April _, 2009 among the Borrower, SBSI, the Agency and the Trustee (the "Assignment and Assumption Agreement"). RV PUB\KSNO W\760498.1 BEST BEST & KRIEGER ATTORNEYS AT LAW Redevelopment Agency of the City of Seal Beach Union Bank of California N.A. ACA Financial Guaranty Corporation April _, 2009 Page 2 In connection with the authorization and execution by the Agency of the Assignment and Assumption Agreement, we have examined and reviewed documents and matters deemed necessary by us to render the opinions set forth herein, including, without limitation, an opinion of in its capacity as counsel to SBSI dated April _, 2009. We have not undertaken to independently verify and we have assumed the accuracy of the factual matters represented, warranted or certified in such proceedings and the genuineness of all documents and signatures presented to us. This opinion is being delivered in satisfaction of Section 6.2 of the Loan Agreement and Section 10 of the Regulatory Agreement. Based on and subject to the foregoing, and in reliance thereon, we are of the opinion that, as of the date hereof, under existing laws, regulations, rulings and judicial decisions, the transfer of the Project under the Assignment and Assumption Agreement from the Borrower to SBSI will not, in and of itself, adversely affect the exclusion from gross income of interest on the Bonds for federal tax purposes or the exemption of interest on the Bonds from present State of California personal income taxes. We wish to point out that in order for interest on the Bonds to remain excluded from gross income for purposes of federal income taxation subsequent to the issuance of the bonds, it is necessary that provisions of the Internal Revenue Code be complied with on a continuous basis. We have made no investigation as to whether there has been such compliance in the present case, and accordingly, we express no opinion whatsoever as to whether interest on the Bonds is excluded from gross income for purposes of federal income taxation as of the date of this opinion, nor do we express any opinion as to whether interest on the Bonds is presently exempt from State of Califon:~ia personal income taxation. We have not been engaged, nor have we undertaken to advise, any party or to opine as to any matters not specifically covered herein, including, but not limited to, matters relating to compliance with any securities law. This opinion may be relied upon only by the parties to whom it is addressed and may not be circulated, quoted from or relied upon by any other party without our prior written consent. Very truly yours, RVP UBUCSNO W~760498.1