October 4,2012. Califomia School Finance Authority 915 Capitol Mall, Suite 101 Sacramento, CA 95814

Transcription

1 DEREKL. AUSTIN Attorney at Law 135 East Campbell Avenue, Suite 207 CAMPBELL, CA Telephone: (408) Facsimile; (213) October 4,2012 Califomia School Finance Authority 915 Capitol Mall, Suite 101 Sacramento, CA Orrick Herrington & Sutcliffe LLP 405 Howard Street San Francisco, CA Westhoff, Cone & Holsmstedt 500 Ygnacio VaUey Road Walnut Creek, CA The Bank of New York, Mellon Trust Company, N,A., as frustee ("Trustee"), for the benefit ofthe owners ofthe Califomia School Finance Authority Educational Facilities Revenue Bonds (Tri- VaUey Leaming Corporation), Series 2012A Corporate Trust 400 S. Hope Street, Suite 400 Los Angeles, CA NRFC WA Holdings II, LLC 399 Park Avenue, 18th Floor New York, NY Montevina Phase I, LLC Montevina Phase II, LLC c/o Westhoff, Cone & Holmstedt Attn: Mark Holmstedt 500 Ygnacio Valley Road, Suite 380 Walnut Creek, CA The Bondholders listed in Exhibit A attached hereto RE: BORROWER'S COUNSEL OPINION- CALIFORNIA SCHOOL FINANCE AUTHORITY EDUCATIONAL FACILITIES REVENUE BONDS, SERIES 2012A; Livennore Valley Charter School and Livermore Valley Charter Preparatory High School, both operated as Tri-Valley Leammg Corporation

2 Law Office of Derek L, Austin Page 2 Ladies and Gentlemen: I have acted as counsel to the Tri-Valley Leaming Coiporation ("Tri-Valley") and Livermore Valley Charter School and Livermore Valley Charter Preparatory High School, each operated as Tri-Valley (the "Bonower" or the "Schools") in connection with the issuance by the Authority ofthe Califomia School Finance Authority Educational Facilities Revenue Bonds (Tri- Valley Leaming Corporation Project), Series 2012A (the "Series 2012A Bonds") and loan ofthe proceeds thereof to the Bonower, and the leasing of certain real property by the Authority to the Borrower pursuant to certain leases. In such connection, I have reviewed all relevant documents, opimons and matters to the extent deemed necessary to render the opinions set forth herein, including; 1. Tri-Vailey Leaming Corporation articles of incorporation and bylaws; 2. The charters ofthe Schools (the "Charters") issued pursuant to the Charter Schools Act of 1992, constituting part 26.8, commencing with Section 47600, of Division 4 of Titie 2 of the Education Code ofthe State (the "Charter School Law"); 3. Form 1023 for Borrower; 4. IRS 501 (c)(3) Determination Letter for Bonower; 5. Forms 990 for Borrower; 6. Resolution of Bonower Approving the loan from Series 2012A Bonds; 7. Bond Purchase Agreement, dated September 6, 2012 (the "Bond Purchase Agreement") among the Westhoff, Cone & Holmstedt, the Authority, the State Treasurer, as agent for sale, and the Bonower. 8. Indenture, dated as of October 1, 2012 (the "Indenture"), between the Authority and The Bank of New York Mellon Trust Company, N.A., as trastee (the "Trastee"); 9. Loan Agreement, dated as of October 1, 2012 (the "Loan Agreemenf) between the Authority and the Borrower; 10. Site Lease, dated as of October 1, 2012 (the "Senior Site Lease ") between Montevina Phase I, LLC (the "Montevina 1") and the Authority; 11. Sublease, dated as of October 1, 2012 (the "Senior Sublease ") between the Authority and the Bonower;

3 Law Office of Derek L. Austin Page Assignment Agreement, dated as of October 1, 2012 (the "Senior Assignment Agreement") between the Authority and the Trustee; 13. Paying Agent Agreement, dated as of October 1, 2012 (the "Paying Agent Agreemenf) among the Authority, Montevina Phase II, LLC ("Montevina If), the Schools and The Bank of New York Mellon Trast Company, N.A,, as paying agent (the "Paying Agenf); 14. Calculation Agency Agreement; 15. Subordinate Site Lease, dated as of October 1, 2012 (the "Subordinate Site Lease") between Montevina II and the Authority; 16. Subordinate Sublease, dated as of October 1, 2012 (tiie "Subordinate Sublease ") between the Authority and the Borrower; 17. Subordinate Assignment Agreenient; 18. Leasehold Deed oftrast; 19. Fee Deed oftrast - Montevina I; 20. Release and Indemnity Agreement; 21. JPA Fee Deed oftrust; 22. Continuing Disclosure Agreement; 23. Tax Cerfificate and Agreement, dated as of October 1, 2012 (the "Senior Tax Certificate") between the Authority and the Borrower, relating to the Series 2012 Bonds; 24. Tax Certificate and Agreement, dated as of October 1, 2012 (the "QSCB Tax Certificate" and together with the "Senior Tax Certificate," the "Tax Certificates") between the Authority and the Borrower, relating to the Series 2012 Bonds; 25. Subordinate Leasehold Deed oftrast; 26. Subordination Agreement with Trustee, NRFC WA Holdings, II, LLC, and Montevina Phase I, LLC (the "Subordination Agreemenf); 27. Phase I Indemnification Agreement with the Authority; 28. Phase II Indemnification Agreenient with the Authority; 29. Intercreditor and Subordination Agreements with Trustee, NRFC WA Holdings, II, LLC, and Montevina Phase II, LLCs (the "Intercredhor Agreemenf); and

4 Law Office of Derek L. Austin Page Limited Offering Memorandum,dsf dated September 6, 2012, related to the Series 2012A Bonds, as supplemented (as supplemented, the "Limhed Offering Memorandum"). The opinions expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities, Such opmions may be affectedby actions taken or omitted or events occurring after the date hereof I have not undertaken to detemiine, or to infomi any person, whether any such actions are taken or omitted or events do occur or any other matters come to our attention after the date hereof, and we disclaim any obligation to update this opmion, I have assumed the genuineness ofall documents and signatures presented to Tri-Valley, the Borrower and me (whether as originals or as copies) and the due and legal execution and delivery thereofby, and validity against, any parties other than Tri-Valley and the Bonower. 1 have not undertaken to verify independentiy, and have assumed, the accuracy ofthe factual matters represented, warranted or certified in the documents, and ofthe legal conclusions contained in the opinions, referred to in the fourtii paragraph hereof Based upon and subject to the foregoing, and in reliance thereon, as ofthe date hereof, I am of the opinion that: (a) Tri-Valley is a California nonprofit public benefit corporation duly incorporated and in good standing under tlie laws ofthe State of California and the Schools are schools (the "Schools") established pursuant to the Charter Schools Law, and each of Tri-Valley and the Borrower has full legal right, power and authority to enter into the Loan Agreement, the Senior Sublease, the Subordinate Sublease, the Intercreditor Agreement, the Subordination Agreement, the JPA Fee Deed oftrust, the Release and Indemnity Agreement, the Subordinate Leasehold Deed oftrust and the Leasehold Deed of Trust, the Continuing Disclosure Agreement, the Paying Agent Agreement, the Bond Purchase Agreement, and the Tax Certificates and deliver the Intercept Notice (collectively, the " Borrower Docmnents"), and to carry out and consummate all transactions contemplated by the Borrower Documents and the Official Statement, and by proper corporate action has duly authorized the execution, delivery and performance of the Borrower Documents and the Official Statement and the distribution ofthe Preliminary Official Statement; (b) Tri-Valley is an organization described in Section 501(c)(3) ofthe Internal Revenue Code and is exempt from federal income tax under Section 501(a) ofthe Code, except with respect to any unrelated business income ofthe Borrower under Section 511 ofthe Code, h is not a "private foundation" as described in Section 509(a) of the Code. No facts have come to our attention which would lead us to believe that there has been any change or modification in the facts and circumstances which formed the basis of the Determination Letter or that the Determination Letter has been modified, limited or revoked; (c) Use ofthe Project, as that tenn is defmed in the Loan Agreement, in the manner described in the applicable Borrower Documents, will not constitute use in any "unrelated trade or business" within the meaning ofsection 513 ofthe Code; (d) Schools are charter schools established pursuant to the Charter School Law;

5 Law Office of Derek L. Austin PageS (e) Each of Tri-Valley and the Borrower has the power and authority and legal right to execute and deliver the Borrower Documents to which it is a paity and to perform its obligations thereunder. The execution and delivery by Tri-Valley and the Borrower of the Bonower Documents and the performance of their respective obligations thereunder have been duly authorized by the corporate proceedings of Tri-Valley and the Borrower, as applicable; (f) The Borrower Documents and the Intercept Notice constitute the legal, valid and binding obligations ofthe Borrower enforceable against it in accordance with their terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, liquidation, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally as such laws would apply in the event ofthe bankruptcy, insolvency, liqiiidafion or reorganization of, or other similar occurrence with respect to the Borrower or in the event ofany moratorium or similar occurrence affecting the Borrower; (g) The approval and distribution ofthe Preliminary Limited Offering Memorandum, related to the Series 2012A, as supplemented, and the Limited Offering Memorandum supplemented, the approval ofthe Bond Purchase Agreement and the Indenture, the execution and delivery ofthe Borrower Documents by the Borrower, and the perfonnance ofthe obligations ofthe Borrower under the Bonower Documents on the date hereof do not: (i) violate any federal or California statute, rule or regulation applicable to the Borrower, (ii) conflict with the provisions of the Borrower's organizational documents, (iii) violate any writ, order, judgment or decree to which the Borrower is a party or to which Borrower is subject and of which we have knowledge, (iv) require any consents, approvals, authorizations, registrations, declarations or filings by the Borrower under any federal or California statute (other tlian Blue Sky laws), rule or regulation applicable to the Borrower, or consents from any third party, that have not been obtained or made except filings and recordings required in order to perfect or otheiwise protect the security interests undei- the Borrower Documents, or (v) require the consent or approval of any trustee or holder of indebtedness ofthe Borrower other than those that have been obtained or made; (h) Although 1 have not independently verified and am not passing upon, and do not assume any responsibility for,, the accuracy, completeness or fairness ofthe.statements contained in the Limited Offering Memorandum, and am therefore unable to make any representation to the addressees in that regard, no facts have come to my attention that have caused me to believe that the statements contained in the sections of the Limited Offering Memorandum entitled "INTRODUCTION - The Project," "CHARTER SCHOOLS," "STATE FUNDING OF EDUCATION," "CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING EDUCATION REVENUES AND APPROPRIATION," "RISK FACTORS," "ABSENCE OF MATERIAL LITIGATION - The Borrower," "CONTINUING DISCLOSURE" and "APPENDIX A - INFORMATION CONCERNING THE PROJECT AND THE BORROWER" (except for any financial, statistical, economic or demographic data or forecasts, numbers, charts, tables, graphs, estimates, projections, assumptions or expressions of opinion, contained therein or included therein by reference) as of its date contained or contains an untrue statement of material fact or omitted or omits to state a material fact required, to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

6 Law Office of Derek L, Austin Page 6 (i) The officers or other designees of the Borrower executing the Borrower Documents and the Limited Offering Memorandum are duly and properly in office and authorized to execute and approve the same; (j) The BoiTower is not (i) in violation of any applicable law or administrative regulation of the State of Califomia or the United States or any applicable judgment or decree, which violation would materially adversely affect the financial position or operations ofthe Borrower or (ii) in default under any loan agreenient, indenture, bond, note, resolution, agreement or other in.strument to which the Borrower is a party or is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice or both, would constitute an event of default under any such instrument, which default would materially adversely affect the financial position or operations ofthe Borrower; (k) The execution and deliveiy of the Borrower Documents and execution and delivery of the Limited Offering Memorandum by the Borrower, the consummation by the Borrower of the transactions herein and therein contemplated and the Borrower's fulfillment of or compliance with the terms and conditions thereof will not (a) conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under (i) the bylaws ofthe Borrower, (ii) any indenture, mortgage, deed of trust, loan agreement, contract, lease or other agreement or instrument to which the Boirower is a party or by which it or its properties are otherwise subject or bound or (iii) any law or administrative rule or regulation or any court or administrative decree or order applicable to the Borrower; or (b) result in the creation or imposition ofany prohibited lien, charge or encumbrance ofany nature whatsoever upon any of the propeity or assets ofthe Borrower, except for the liens or pledges created by the Borrower Documents, which conflict, violation, breach, default, lien, charge or encumbrance could reasonably be expected to have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Borrower Documents, the Limited Offering Memorandum or the financial condition, assets, properties or operations of the Borrower; (1) No consent or approval of any trustee or holder of any indebtedness of the Borrower and no consent, pennission, authorization, order or license of, or filing or registration with, any govemmental issuer (except the approval ofthe Authority for the execution and delivery ofthe Bonds and in connection with Blue Sky proceedings) is necessaiy in connection whh the execution and delivery of this Agreement, the execution and delivery of the other Borrower Documents on the date hereof, the approval of the Limited Offering Memorandum, or the consummation of any transaction therein contemplated, except in all such cases as have been obtained or made and as are in full force and effect; (m) The Charters comply with the Charter School Law and are and will be on the date hereof valid and in full force and effect. The Borrower is in material compliance with the provisions of its Charters. The Borrower has the right to renew or extend such Charters, has not received oral or written notice from any Person to the contrary and will use all reasonable efforts to renew the Charters; (n) There are no actions, suits or proceedings which have been served on the Borrower or, to the best of the knowledge of the Borrower, are othenvise pending or threatened against the Borrower; i

7 Law Office of Derek L. Austin Page 7 (i) (ii) (iii) (iv) (v) (vi) seeking to restrain or enjoin the execution or delivery of any of the Bonds or the pledge under the Loan Agreement or any payments to be made by the Borrower pursuant to the Loan Agreement, the Sublease or the Subordinate Sublease; in any way contesting or affecting the Authority for the execution or delivery of the Bonds or the validity when executed and delivered of Borrower Documents or the pledge under the Indenture; in any way contesting the corporate existence or its status as a charter school under the Charter School Law or powers ofthe Bonower; which, if determined adversely to it, could reasonably be expected to materially adversely affect the consummation ofthe transactions contemplated by the Borrower Documents or the financial condition, assets or properties ofthe Borrower; alleging that the Limited Offering Memorandum, as amended or supplemented pursuant to this Agreement contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessaiy to make the statements therein, in the light ofthe circumstances under which they were made, not misleading; or contesting the powers of the Borrower to conduct the business now being conducted by it and as contemplated by the Borrower Documents, Sincerely, lek L. AUSTES^ Attomey at Law

8 Exhibit A Nuveen Investments 901 Marquette Avenue Suite 2900 Minneapolis, MN Attn: Andrew Clark, Vice President Alliance Bernstein LP Fixed Income Credit Research 1345 Avenue ofthe Americas, 37th floor New York, NY Attn: Dean Lewallen, Vice President