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<br />proceeds of the sale thereof, or in any way contesting or affecting the validity or
<br />enforceability of the Resolution, the Transaction Documents, the Indenture, the Notes, or any
<br />other applicable agreements or any action of the Seller contemplated by any of said
<br />documents, or in any way contesting the powers of the Seller or its authority with respect to
<br />the Resolution or the Transaction Documents or any other applicable agreement, or any
<br />action on the part of the Seller contemplated by any of said documents, or which if
<br />determined adversely to the Seller would have a material and adverse effect upon the Seller's
<br />ability to sell the Seller's VLF Receivable, nor to our knowledge is there any basis therefor.
<br />
<br />5. Insofar as it would materially adversely affect the Seller's ability to enter into, carry out and
<br />perform its obligations under any or all of the Transaction Documents, or consummate the
<br />transactions contemplated by the same, the Seller is not in breach of or default nuder any
<br />applicable constitutional provision, law or administrative regulation of the State of California
<br />or the United States or any applicable judgment or decree or any loan agreement, indenture,
<br />bond, note, resolution, agreement or other instrument to which it is a party or to which it or
<br />any of its property or assets is otherwise subject, and, to the best of our knowledge, no event
<br />has occurred and is continuing which with the passage of time or the giving of notice, or
<br />both, would constitute a default or an event of default under any such instrument, and the
<br />adoption of the Resolution and the execution and delivery by the Seller of the Transaction
<br />Documents, and compliance by the Seller with the provisions thereof, nuder the
<br />circumstances contemplated thereby, do not and will not in any material respect conflict with
<br />or constitute on the part of the Seller a breach of or default under any agreement or other
<br />instrument to which the Seller is a party or by which it is bound or any existing law,
<br />regulation, court order or consent decree to which the Seller is subject.
<br />
<br />6. Prior to the sale of the VLF Receivable to the Purchaser, the Seller was the sole owner of the
<br />VLF Receivable, and has such right, title and interest as provided in the Act. From and after
<br />the conveyance of the VLF Receivable by the Seller to Purchaser on the Closing Date, the
<br />Seller shall have no interest in the VLF Receivable. Except as provided in the Sale
<br />Agreement, the Seller has not sold, transferred, assigned, set over or otherwise conveyed any
<br />right, title or interest of any kind whatsoever in all or any portion of the Seller's VLF
<br />Receivable, nor has the Seller created, or to our knowledge permitted the creation of, any
<br />Lien thereon. Prior to the sale of the VLF Receivable to the Purchaser, the Seller held title to
<br />the VLF Receivable free and clear of any Liens.
<br />
<br />7. All approvals, consents, authorizations, elections and orders of or filings or registrations with
<br />any governmental authority, board, agency or commission having jurisdiction which would
<br />constitute a condition precedent to or the absence of which would materially adversely affect,
<br />the sale by the Seller of the Seller's VLF Receivable or the performance by the Seller of its
<br />obligations nuder the Resolution and the Transaction Documents and any other applicable
<br />agreements, have been obtained and are in full force and effect.
<br />
<br />Taxable
<br />DOCSSFI,795397.1
<br />
<br />C2-2
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