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Resolution No. 76481 RESOLUTION NO. 7648 2 3 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON AMENDING RESOLUTION NO. 7247, WHICH APPROVED 4 AND AUTHORIZED THE PARTICIPATION OF THE CITY OF 5 VERNON IN THE CALIFORNIA POWER EXCHANGE AND THE EXECUTION OF CERTAIN DOCUMENTS 6 7 WHEREAS, pursuant to Resolution No. 7247, the City Council 8 authorized participation by the City of Vernon in the California Power 9 Exchange (the "PX") program and approved the Participation Agreement to 10 the PX Tariff and certain other agreements; 11 WHEREAS, the PX has requested that all PX Participants enter 12 into additional agreements concerning a performance bond issued for the 13 benefit of the PX; and 14 WHEREAS, in order to meet the credit policy requirements of the 15 PX and the Participation Agreement, the Finance Committee has recommended 16 to the City Council that it adopt a resolution to amend Resolution No. 17 7247 to enable the City to execute the PX Indemnity Agreement in favor .of 18 the PX insurance company issuing the performance bond. 19 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY 20 OF VERNON AS FOLLOWS: 21 Section 1 The City Council of the City of Vernon does hereby 22 find and determine that the recitals contained hereinabove are true and 23 correct. 24 Section 2: The City Council of the City of Vernon hereby 25 approves the Indemnity Agreement, for the continuing benefit of ,the PX 26 insurance company issuing the PX Performance Bond, a copy of which has 27 been presented to the City Council, concurrently with this Resolution, and 28 the City Council hereby orders the Indemnity Agreement to be received and 29 filed by the City Clerk. 30 Section 3: The City Council of the City of Vernon hereby -1- 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 P41A 21 22 23 24 25 26 27 28 29 30 authorizes the Mayor and the City Clerk to execute the Indemnity Agreement for, and on behalf of, the City of Vernon. Section 4: The City Council of the City of Vernon hereby authorizes the City Administrator, upon the advice of counsel, to execute any documents, make whatever changes, and, perform such other acts and deeds as may be necessary or convenient to effect the purposes of this Resolution and satisfy the PX participation requirements, including any credit arrangements with the PX escrow agent. Section 5: That in all other respects, Resolution No. 7247 shall remain in full force and effect and that the provisions contained in Resolution No. 7247 not consistent with or in conflict with this Resolution are hereby repealed. Section 6: The City Clerk of the City of Vernon shall certify to the passage of this Resolution and thereupon and thereafter the same shall be in full force and effect. APPROVED AND ADOPTED this 17th of October, 2000. ATTEST: v BRUCE V. MALKENHORST, City Clerk r EONIS C. MALBURG, MAYOR WE a 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) I, BRUCE V. MALKENHORST, City Clerk of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. 7648, was duly adopted by the City Council of the City of Vernon at a regular meeting of the City Council duly held on Tuesday, October 17,-2000, and thereafter was duly signed by the Mayor of the City of Vernon. (SEAL) z � 9=' v /"o �' BRUCE V. MALKENHORST, City Clerk -3- NOTICE OF DETEATION �. RECEIVED To: X Office of Planning and Research From: City of Vernon QUN 6 2001 1400 Tenth Street, Room 121 4305 Santa Fe Avenue„ Sacramento, CA 95814 Vernon, CA 90058 community Services X County Clerk . F1 County of Los Angeles LED Environmental Filings APR 2 6 2001 12400 E. Imperial Hwy. Rm 1101 Norwalk, CA 90650 G 8 ,BOOR pn►��� SUBJECT: G. MORLA DEPUTY Filing of Notice of Determination in compliance with Section 21108 or 21152 of the Public Resources Code. Final Environmental Impact Report/Environmental Assessment for I-710/AtlanticBandini Improvements State Clearinghouse Number Lead Agency: (Area Code)Telephone/Extension: Contact Person: 99061121 City of Vernon (323) 583-8811 / 245 Samuel Kevin Wilson Project Location (include county) 4305 Santa Fe Avenue, Vernon, CA 90058 - Los Angeles County Project Description: The I-710/AtlantkBandini Interchange Improvements project. This is to advise that the City of Vernon has approved the above described project on April 18, 2001 and has made the following determinations regarding the above described project: 1. An Environmental Impact Report/Environmental Assessment was prepared for this project pursuant to the provisions of CEQA. 2. A statement of Overriding Considerations was adopted for this project. 3. Findings were made pursuant to the provisions of CEQA. This is to certify that the Environmental Impact Report with comments and responses and record of project approval is available to the General Public at: 0-NI Aim it sJ: De Minimis Impact Finding Project Title/Location (include county): City of Vernon 4305 Santa Fe Avenue Vernon, California 90058 Los Angeles County Project Description: The City of Vernon Community Services Department has prepared an Environmental Impact Report/Environmental Assessment in accordance with CEQA and NEPA guidelines for the I- 710/Atlantic/Bandini Interchange project. The City Council of the City of Vernon has determined that this project is consistent with the General Plan as adopted by the City of Vernon. (see Resolution No. 7748) Certification: . I hereby certify that the public agency has made the above finding and that the project will not individually or cumulatively have an adverse effect on wildlif resources, as defined in Section 711.2 of the Fish and Game Cod ( 1 nning Official) Title: Director of Community Services & Water i Lead Agency: City of Vernon Date: April 19, 2001 101 92265 (a) To deem this Agreement breached should the Bond Principal become involved in any agreement of proceeding of liquidation, receivership, or bankruptcy, voluntarily or involuntarily; (b) To adjust, settle or compromise any claim, demand, suit or judgment upon said Bond or Bonds, or any of them, unless the Undersigned shall request in writing that the Surety litigate such claim or demand, or defend such suit, or appeal from such judgment, and shall deposit with the Surety, at the time of such request, cash or collateral satisfactory to the Surety in kind and amount to be used in paying any judgment or judgments rendered with interest, costs and attorneys' fees. All damage, loss or expense of any nature which the Surety may incur under paragraph 7 shall be borne by the Undersigned. 8. The Surety shall have the exclusive right for itself and for the Undersigned to decide and determine whether any claim, suit, demand or judgment upon said Bond or Bonds shall, on the basis of liability, expediency or otherwise, be paid, settled, defended or appealed, and its determination shall be final, conclusive and binding upon the Undersigned (except as provided in paragraph 7 (b) hereof); and any loss, costs, charges, expense or liability thereby sustained or incurred, as well as any and all disbursements on account of costs, expenses, and attorneys' fees, deemed necessary or advisable by the Surety, shall be borne and paid immediately by the Undersigned, together with legal interest. In the event of any payment, settlement, compromise or investigation, an itemized statement of the payment, loss, costs, damages, expenses or attorneys' fees, sworn to by any officer of the Surety or the voucher or vouchers of other evidence of such payment, settlement or compromise shall be prima facie evidence of the fact and extent of the liability of the Undersigned to the Surety in any claim or suit hereunder and in any and all matters arising between the Undersigned and the Surety. 9. Until the Surety shall have been furnished with competent legal evidence of its discharge without loss from any and all Bonds, the Surety shall have the right at all times to free access to the books, records and accounts of each of the Undersigned for the purpose of examining the same. Each of the Undersigned hereby authorizes and requests any and all depositories in which funds of any of the Undersigned for the purpose of examining the same. Each of the Undersigned hereby authorizes and requests any and all depositories in which funds of any of the Undersigned may be deposited to furnish to the Surety the. amount of such deposits as of any date requested and any person, firm or corporation doing business with the Undersigned is hereby authorized to furnish any information requested by the Surety concerning any transaction. The Surety may furnish copies of any and all statements, agreements and financial statements and any information which it now has or may hereafter obtain concerning each of the Undersigned, to other persons or companies for the purpose of procuring co -suretyship or reinsurance or of advising interested persons or companies. 10. The Surety shall be entitled to enforce the obligations hereof directly against any and all of the Undersigned without the necessity of first proceeding against the Bond Principal. 11. This Agreement or a carbon, photographic, xerographic or other reproduction or copy of this Agreement shall constitute a Security Agreement to Surety and also a Financing Statement, both in accordance with the provisions of the Uniform Commercial Code of every jurisdiction wherein such Code is in effect, but the filing or recording of this Agreement shall be solely at the option of Surety and the failure to do so shall not release or impair any of the obligations of the Bond Principal or the Undersigned under this Agreement or otherwise arising, nor shall such failure be in any manner in derogation of the rights of Surety under this Agreement or otherwise. 12. Regardless of the date this Agreement is signed by the Undersigned, it is hereby understood and agreed by the Undersigned that the effective date of this Agreement is August 14, 2000. It is further understood and agreed that the undersigned, it heirs, executors and assigns are jointly and severally bound by the foregoing conditions of this agreement. t� da of �c 20 . Executed this y IN WITNESS WHEREOF, we have hereunto set our hands and seals the day and year first above written. Attest: BY: BRUCE V. MALKENHORST, CITY CLERK CITY OF VERNON (SEAL) BY•` , EONIS C. MALBURG, . AYOR INDEMNITY AGREEMENT THIS AGREEMENT is made by the undersigned for the continuing benefit of AIU Insurance Company, American Home Assurance Company, Granite State Insurance Company, Illinois National Insurance Company, The Insurance Company of the State of Pennsylvania, National Union Fire Insurance Company of Pittsburgh, PA, New Hampshire Insurance Company, Commerce and Industry Insurance Company, and Commerce and Industry Insurance Company of Canada (hereinafter referred to collectively as the "SURETY") for the purpose of indemnifying SURETY from all loss and expense incurred by SURETY, in connection with any bonds, undertakings or other instruments of guarantee issued for the benefit of the California Power Exchange Corporation and/or any of its related divisions therein as the Obligee (all of which hereinafter are defined as "Bond") executed on behalf of the undersigned or any present or future subsidiary or any subsidiary of a subsidiary, or divisions now in existence or hereafter formed or acquired, or on behalf of any individuals, partnerships or corporations upon request of any of the undersigned, City of Vernon, a public body and municipal corporation of the State of California (hereinafter referred to as "Undersigned"). INDEMNITY: In consideration of the execution of any and all bonds required by the California Power Exchange Corporation and/or any of its related divisions therein and as an inducement to such execution by SURETY, the Undersigned agrees to: 1. Indemnify SURETY and save it harmless from all loss and expense incurred by SURETY, including, but not limited to, interest, attorney fees and court costs, as a result of a claim made on any Bond or Bonds issued on behalf of the Undersigned. However, as it relates to the Core Market and CTS Pool Performance Bonds, the Undersigned's indemnity to the SURETY is limited to only the amount of loss and expense caused by the Undersigned's default or alleged default, subject to GENERAL PROVISIONS #5 below, under the Core Market and CTS Pool Performance Bonds. 2. To deposit with SURETY within 10 days after its demand in writing upon the Undersigned an amount sufficient to discharge any claim against SURETY on any Bonds made on or prior to the date of SURETY'S demand. Sums paid pursuant to this paragraph may be used to pay such claim or be held as collateral security against loss on such claim, but upon disposition of any claim any portion of each funds not applied to or collateralizing such shall be refunded to the Undersigned. 3. To pay any premium due for any bonds, except for the Core Market and CTS Pool Performance Bonds whose premium will be paid by the California Power Exchange Corporation, in accordance with the rates charged by the SURETY, including renewal premiums, until SURETY is provided with the evidence satisfactory to SURETY that SURETY has been discharged from all liability under such bonds. 4. Surety shall have every right, defense or remedy which a personal surety without compensation would have, including the right to secure its discharge from the suretyship, and nothing contained herein shall be considered or construed to waive, abridge or diminish any right or remedy which the Surety might have if this instrument were not executed. The Undersigned will, on request of the Surety, procure the discharge of the Surety from any bonds except as it relates to the Core Market and CTS Pool Performance Bonds, and all liability by reason thereof. Separate suits may be brought hereunder as causes of action may accrue, and the pendency and termination of any such suit shall not bar any subsequent action. The Surety shall be notified immediately by the Undersigned of any claim or action which may result in a claim against the Surety, such notice to be given by registered mail to the Surety at its Home Office. In the event of legal proceedings against the Surety, upon or on account of any said Bond or Bonds, the Surety may apply for a court order making any or all of the Undersigned parties defendants and to allow judgment, in the event of judgment against the Surety, to be rendered also against such Undersigned in like amount and in favor of the Surety, if the Surety so desires. GENERAL PROVISIONS: l . Assent by Surety to changes in any Bond or refusal so to assent shall not release or affect the obligations of Undersigned to Surety. 2. Surety shall have the right to decline to execute any bond, except for the Core Market and CTS Pool Performance Bonds, and Surety shall not be liable to the Undersigned and the Undersigned shall make no claim for any damages alleged to arise from such declination nor shall Surety be liable to the Undersigned should its Bond or Bonds not be accepted. Furthermore, Surety shall have the absolute right to cancel any Bond in accord with any cancellation provision contained therein, to procure its release from any Bond under any law for the release of sureties; and the Surety is hereby released from any liability for expense, cost of damage alleged to be sustained by the Undersigned by reason of such cancellation or release of the obligation. 3. Undersigned warrant that each of them is specifically and beneficially interested in the obtaining of each Bond. Failure to execute, or defective execution, by any party, shall not affect the validity of this obligation as to any other party executing the same and each and such other party shall remain fully bound and liable hereunder. 4. Invalidity of any portion or provision of this Agreement by reason of the laws of any state or for any other reason shall not render the other provisions or portion hereof invalid. Execution of any application for any Bond by the Undersigned, or for any other indemnity agreement by any Undersigned shall in no way abrogate, waive or diminish any rights of Surety under this Agreement. The Undersigned acknowledge that the execution of this Agreement and the undertaking of indemnity was not made in reliance upon any representation concerning the financial responsibility of any Undersigned, or concerning the competence of the Undersigned to perform. 5. As it relates to any Bonds required for the benefit of California Power Exchange Corporation and/or any of its related divisions therein, including but not limited to the Core Market and CTS Pool Performance Bonds, the nature of the Surety's obligation is such that the Surety is required to make payment within 20 days of a notice of default of the Bond Principal whether or not such default has been established as a fact or has merit. By signing this Agreement, the Undersigned has reviewed the various required Bond forms of the California Power Exchange, Corporation and hereby understands and agrees that certain rights of defense are being waived by the Surety and the Bond Principal in accordance with the terms of the Core Market and CTS Participation Agreements and related bond forms. Upon receipt of a first written or simple demand by the Surety, in accordance with INDEMNITY paragraphs stated above (which shall be conclusive evidence that such sum is due and payable), the Undersigned agrees to make such payment or place with the Surety such funds (subject to the Bond amount), without proof or condition that such claim has merit and or such claim was rightfully submitted by the California Power Exchange Corporation, and make such payment without any question or delay and whether or not such demand is in the Undersigned's opinion a proper demand. 6. In the event of a failure to comply with such demand the Undersigned hereby authorizes and empowers any attorney of any court of record of the United States or any of its territories or possessions to appear for the Undersigned in any suit by Surety and to confess judgment against the Undersigned for any sum or sums of money up to the amount of the Bond with costs, interest, and attorneys' fees. The authority to confess judgment as set forth herein shall not be exhausted by any one exercise thereof, but may be exercised from time to time and more than one time until all liability of the Undersigned to Surety shall have been paid in full. 7. The Surety shall have the right, at its option and in its sole discretion: L7 df CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ss. County of JAO& I On + �, before me, G16 r 1 GLy • © ro 3Cyo Noill 'ui Date Name and Title of Officer (e.g., "Jane Doe, Notary Public") personally appeared oc1.� n 1 S ly- c ek �. U . Name(s) of Signer(s) Place Notary Seal Above personally known to me ❑ 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. WITNESS my hand and o icial seal. Signat of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: Number of Pages: RIGHT THUMBPRINT OF SIGNER Top . © 1997 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 Prod. No. 5907 Reorder: Call Toll -Free 1-800-876-6827 SUPPORTING DOCUMENTS CITY COUNCIL LEONIS C. MALBURG Mayor THOMAS A. YBARRA Mayor Pro—Tem WM. "BILL" DAVIS Councilman H. "LARRY" GONZALES Councilman W. MICHAEL MCCORMICK Councilman BRUCE V. MALKENHORST City Administrator / City Clerk FAX (323) 581-7924 CITY HALL 4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058 TELEPHONE (323) 583-8811 Finance Committee City of Vernon Honorable Members: EDUARDO OLIVO City Attorney FAX: (562) 927-8722 KEVIN WILSON Director of Community Services & Water FAX: (323) 588-2761 October 12, 2000 ��D fnn 1 �V KENNETH J. DeDARIO Director of Municipal Utilities FAX: (323) 583-1983 DAVE TELFORD Fire Chief FAX: (323) 581-1385 BRUCE W. OLSON Police Chief FAX: (323) 583-5236 Participation in the Power Exchange (PX) performance bond program is necessary for the purpose of providing flexibility in the PX credit application process and to take advantage of the additional security offered to all PX participants. In order to become a participant, the PX requires all interested applicants to execute an indemnity agreement in favor of the insurance underwriter for the PX-American Home Insurance Company (AIG), and will only exercise its rights under the indemnity agreement against the City if the City owes the PX money and the City has defaulted on its responsibilities to the PX. This matter has been reviewed by the Utilities Department and our Legal Consultant and it is hereby recommended that authorization be granted to execute the indemnity agreement to participate in the Power Exchange performance bond program. Very truly yours, Bruce V. Malkenhorst Director of Finance BVM/ng OCT-19-2000 10:04 P.03 Thu, Oct 19, 2000 9:35 AM From: Clark_R Cheng@calpx.com To: Eric Fresch <fresch4@earthlink.net> Date: Thursday, October 19, 2000 8:18 AM Subject: Re,, PX--AIG--indemnity Agreement Per you volowail, Please avernight the rnr9amity Agredaent to the following addrees: Wi.forni a Powsr Exchange AttA; Clark Chong 200 south rros Robles, 4th Floor Pasadena, CA 91101 Be sure the signatures on the Indemnity are notarized. Thanks, Clark TOTAL P.03 OCT-19-2000 10:04 IE LAW OFFICES OF EIitIC T. ia'RESCH CITICORP CENTCR, ONE SANSOMC STREET I� TWENTY-FIRST vI.q OA !SAN FI3eaNC75CO3 CALIFORNIA 041" TEI,E„NONE f41W Z31S'0312 FAX I415I 43S'53455 October 19, 2000 Ms. Gloria J. Orosoo Chief Deputy City Clerk City of Vernon 4306 Santa Fe Avenue Vernon, Ca 90058 Re: Cahfomia Power Exchange Surety Bond J f �21 10 Clark Chong of the California Power Exchange has requested the City of Vernon to have the PX Indemnity Agreement signed and notarized today and sent FedX to his attention for delivery tomorrow morning. The address is California Power Exchange, Attu_ Clark Chong, 200 South Los Roblas, 4th Floor, Pasadena, Ca 91101. . I will call you todiscuss this matter. Sincerely, L " �— f, Eric Fresch LAW OFFICES OF ERIC T. FRESCH CITICORP CENTER, ONE SANSOME STREET TWENTY-FIRST FLOOR SAN FRANCISCO, CALIFORNIA 94104 TELEPHONE 141S) 235-93I2 FAX (415) 435-6385 October 2, 2000 Mr. Bruce V. Malkenhorst City Administrator City of Vernon 4305 Santa Fe Avenue Vernon, Ca 90058 Re: California Power Exchange Performance Bond Dear Mr. Malkenhorst: I recommend that you obtain authorization from the City Council to participate in the Power Exchange (the "PX") performance bond program. The purpose of this pro- gra im im s to prove a moreftexi i i in -PX credit qualification process and provide addition security for all PX participants. The PX requires all participants to execute an indemnity agreement in favor of the-f insurance underwriter for the PX--American Home Insurance Company ("AIG"). AIG will only exercise its rights under the indemnity agreement against the City if the City owes the PX money and the City has defaulted on its obligations to the PX. I have discussed this matter with Ken DeDario and Jorge Somoano. If you approve, I request the Finance Committee authorize submitting the PX indemnity agreement to the City Council. I also request that you authorize me to draft a resolution for the City Council to consider to approve the PX indemnity agreement and permit the City Administrator, upon advice of counsel, to execute any agreements necessary to conform to the credit policy requirements of the PX and perform whatever acts are necessary to effect the purpose of the City's participation in the PX. I look forward to discussing this matter with you. Please call me if you have any questions. Sincerely, Eric Fresch cc: Kenneth J.DeDario Jorge C. Somoano LAW OFFICES OF \ EIRIC T. FRESCH CITICORP CENTER, ONE SANSOME STREET TWENTY-FIRST FLOOR 'l SAN FRANCISCO, CALIFORNIA 94104 TELEPHONE (415) 235-9312 FAX (415) 43S-6385 October 12, 2000 Mr. Bruce V, Malkenhorst City Administrator City of Vernon 4305 Santa Fe Avenue Vernon, CA 90058 Dear Mr. Malkenhorst: This letter revises my letter of September 27 to you concerning my recommendation to expand the use of the Power Resource Cost Reduction Account. I recommend City Council Resolution No. 6868 be amended to authorize the Utilities Department to deposit surplus operating revenues to the Account which shall be administered under the sole authority of the City Administrator. The Account would be used to reduce power resource costs and make deposits of surplus revenues, which can include revenues projected to be received from the City's Transmission Revenue Requirement, as it becomes part of the Transmission Access Charge charged to the California Independent System Operator's customers. I look forward to discussing this matter with you at your convenience. Sincerely, Eric Fresch, Esq. EF:dm c: Kenneth J. DeDario Jorge C. Somoano A Recommendation To The City Of Vernon To Implement A Substantial Profit Generating Telecommunication System To Be Owned By The City Draft Prepared By: Dr. Richard M Bird Date: September 26, 2000 Table of Contents 1.0 Overview And Summary................................................................ 1.1 Why a Telecommunication System Owned By the City of Vernon?.....1 1.2 A Proposed New Organization Within the City of Vernon................2 2.0 A Proposed 6 Month Organization And Budget For Telco ..........................3 2.1 The Proposed Initial Organization.............................................3 2.2 A Proposed 6 Month Budget For Telco .............................. ....4 3.0 Estimate Of I" Year Stage 1 Operational Costs And Income Stream..............5 1.0 Overview And Summary 1.1 Why a Telecommunication System Owned By The City of Vernon? • The City of Vernon has made an investment in a fiber optic ring network now fully implemented for about half of the city, with the other half expected to be completed in another 4 to 6 months. • This fiber optic ring network can serve as the backbone for a state-of-the-art City of Vernon owned telecommunication system, hereinafter referred to as "Telsys". • The advantages of Telsys to the City of Vernon are: It can be a substantial profit center with a potential net profit of $6-9 million per year, when fully implemented. It will provide the businesses in the City of Vernon a state-of-the-art Telsys, which should provide them with a backbone to allow them to better compete, to survive and to grow in this evolving 2 1 " century information technology and internet driven business revolution that is occurring, to the benefit of the City of Vernon. - Telsys can be installed using the business's existing internal telephone equipment (PBX, telephone sets, etc.). - Should a business wish to upgrade its internal equipment, one of our proposed strategic partners (Lucent) will sell, install and maintain the new equipment, with the City of Vernon receiving a commission on the transaction. • The advantages of Telsys to the businesses in the City of Vernon are: - They can receive superior telecommunication services compared to what they now have and at significantly reduced costs to what they are now paying. - It will provide the businesses in the City of Vernon an available state-of-the- art Telsys, to allow them to better compete, to survive and to grow in this evolving 2 1 " century information technology and internet driven business revolution, to the benefit of the each participating business. - Telsys can be installed using the business's existing internal telephone equipment (PBX, telephone sets, etc.). • Telsys can be implemented with extremely credible strategic partners (such as Lucent Technologies, TelePacific and So. Cal. Edison), who install and maintain the system with little or no overhead to the City of Vernon. • Telsys can be implemented in four stages in such a way that there is no or little financial risk to the city. The implementation of Telsys is not begun until a sufficient number of business subscriptions is reached in stage 1 (about 100 businesses signing up) and they must sign up for a period guaranteeing at least a financial breakeven for the city after paying for the equipment, installation and maintenance involved (about 1 1/2 years). The process is repeated for stage 2, then stage 3 and finally stage 4. With lower telecommunication costs and superior services, why would a Vernon Business not want to subscribe for Telsys? Thus, much like what the City of Vernon has done with electric utilities, where the city supplies superior electricity delivery at a very low cost, and at a significant profit to the city, the same is possible for telecommunication services. 1.2 A Proposed New Organization Within The City of Vernon It is herein recommended that the City of Vernon form a new group independent of what is now the Utilities Department for the purpose of implementing a new City of Vernon owned telecommunication system for interested businesses in the City of Vernon and to include the new telecommunication system currently in development for City Hall and its related functions and buildings. This new organization is herein proposed to be named the Telecommunications Group or Division or Department as is the most appropriate. For brevity this proposed new telecommunication group will hereafter be referred to as "Telco" and the hardware telecommunication system, as previously defined, as "Telsys". It is proposed that the responsibility for the completion of the fiber optic networks also be placed under Telco. It may be necessary to revise the Charter of the City of Vernon to reflect such a change. It is herein proposed that Telco be officially formed and given a budget and a 6 month trial period for the purpose of completing the following 10 tasks: Task 1 - Managing the completion of the fiber optic network in the City of Vernon. Task 2 — Managing the completion of the City Hall telecommunication upgrade. Task 3 - Finalization of the strategic partners for Telsys. Task 4 - Configuring in detail, the stage 1 Telsys and the connection to the Telephone Central Office of a strategic partner such as TelePacific including the configuring of equipment, the planning for the installation and maintenance and the cost of each of these items. Task 5 - The defining of the costs of the various telecommunication services to be offered to the subscribing businesses, with an estimate of the services that will be subscribed and the resulting income stream coming to the City of Vernon. Task 6 - Survey of the stage 1 businesses (about 350) to estimate their interest level in subscribing to Telsys. Task 7 - Marketing of Telsys to the stage 1 businesses and the signing up of subscribers on the conditional basis of obtaining 100 subscribing businesses. Task 8 - With the signing of at least 100 businesses, the work of entering into contracts with the strategic partners and the placing of orders for equipment and services will begin. Task 9 — Configuring in detail, the stage 2 Telsys and the connection to the Telephone Central Office of a strategic partner, including the configuring of equipment, the planning for the installation and maintenance and the cost of each of these items. Task 10 Survey of the stage 2 businesses (about 350) to estimate their interest level in subscribing to Telsys. It has been preliminarily estimated, based on reasonable assumptions, that the cost of Telsys equipment, the cost of the installation and the cost of maintenance for a 1 year period, for 100 businesses, will be about $2 million. This cost does not include Telco management costs, estimated at $350,000 to $400,000 for the Vt year. Based on other assumptions discussed in Section 3.0, the income estimated for the first year is also about $2 million. Thus, based on all of these assumptions, the breakeven point is about at the15 month point. F] 2.0 A Proposed 6 Month Organization And Budget For Telco 2.1 The Proposed Initial Organization The proposed initial organization is shown below: Acting der Telco Reports To City Administrator Dr. Richard Bird 100 Hours/Month Telecommunications Engineer Ali Nour (Recommended If Interested) Full Time Administrator Greg Tsujiuchi (Recommended If Interested) About Half Time Figure 1 — Proposed Organization Chart For Telco Dr. Bird has been working on the Telsys configuration and the resulting business opportunity for the City of Vernon over the last 4 months under the incubator contract awarded to Woodbury University by the City of Vernon. He is intimately familiar with the needs, requirements, possible implementations and the business opportunity for the City of Vernon. He has been working in the information technology and communication technical fields over the total 35 years of his professional career, as an engineer and technologist, as a manager and executive and as a systems integrator. Dr. Bird proposes to serve in the function of Acting Manager of Telco on a consulting, time & material contract basis, at $80 per hour, up to 100 hours per month and not to exceed 6 months. To support him, Dr. Bird will need the assistance of a full time Telecommunications Engineer and a half time Administrator. Ali Nour, who works in the Vernon Electric Utilities Office and Greg Tsujiuchi, who is an Administrator in the City Administrator's Office, are familiar with this project and are recommended candidates, if they are interested. In any event, some support will be needed from Ali Nour because of his experience and familiarity with the Vernon City Hall telecommunications upgrade program. As an alternative a contract Telecommunications Engineer could be brought on board, with some early assistance from Ali Nour. Specific Duties proposed for the Telco Team Members are: Acting Manager, Telco: • Manage and coordinate the work effort of Tasks 1 through 10 as defined in Subsection 1.2. Telecommunication Engineer: • Take the lead technical role in the design, development, ordering, installation and operational testing of the equipment for Tasks 1 & 2. 3 • Take the lead technical role in the design and defining of costs for the equipment, including installation and maintenance, in Tasks 4 & 9. • Support the Acting Manager in the defining of costs to be charged to the Vernon Businesses for the telecommunication services to be offered per Task 5. • Take the lead technical role in defining the equipment and services to be ordered in Task 8. Administrator: • Support the Acting Manager in the work effort of Tasks 1 through 10. • Represent the Acting Manager in his absence. • Support the Acting Manager in the defining of costs to be charged to the Vernon Businesses for the telecommunication services to be offered per Task 5 and the estimation of the resulting income stream coming to the City of Vernon. • Take the lead marketing role for Tasks 6, 7 & 10. 2.2 A Proposed 6 Month Budget For Telco. The burdened rate of pay for the 3 proposed staff members over a six month period and the total are estimated at: • Dr. Bird - $50,000 • Telecommunications Engineer - $70,000 • Administrator - $30,000 • Total 6 month budget for Telco - $150,000 4 t 3.0 Estimate Of 1st Year Stage 1 Operational Costs And Income Stream A Cost/Income Analysis has herein been performed on the Lucent input for a City of Vernon Telecommunication System serving the business community based on a risk free, phased implementation approach. The approach is based on dividing the City of Vernon Business Community into relatively equal geographic quadrants (4 parts). The telecommunication business for only 1 quadrant would be pursued first, which would be in and include the City Hall requirements. The project would be terminated after a specified time(6 months) unless at least 100 businesses subscribed. The implementation would begin as soon as 100 businesses subscribed (City Hall would represent about 7%). The minimum subscription period would be 1 1/2 years. As will be shown, on this basis the project is financially risk free to the City of Vernon. As soon as the lst quadrant is subscribed at the minimum threshold level, a subscription program would begin in a 2na quadrant. This process would then continue until all 4 quadrants have sufficient subscribers. The layout for the Lucent Equipment is shown in Figure 2. The assumptions are therein stated. Basically, as shown, it is assumed that the 100 businesses have an average of 40 Phone Sets (a total of 4000 phone sets), where half (50) have PBXs and a Tl with 16 dial tone lines coming in and the other half have wiring panels with 40 dial tone lines coming in. It is assumed that 2 Lucent Stinger DSLAMs are implemented providing the capability for 480 total DSL lines. It is also assumed that the Central (Telephone). Office function and equipment is initially supplied by a Reseller, such as, TelePacific. On the basis of the above assumptions, a 1st year cost analysis and income analysis is presented in Figure 2. Based on this analysis, as can be seen, the breakeven point is one year and on this basis, there is little financial risk to the City of Vernon, since the minimum subscription period is 1 1/2 years. As also shown, the gross profit potential in the 2nd and succeeding years is $1.86 million per year and when all 4 quadrants become deployed (the Lucent Equipment is modular and expandable) is $7.44 million per year. Furthermore, Lucent has a lease/purchase program so that the City of Vernon could implement such a program with no initial outlay of cash for the equipment and based on a reasonable lease period (say 3 years) could actually have a positive cash flow from the very beginning of the implementation. Also, Lucent offers a single point maintenance program, such that if there is ever a problem with the equipment, only a single call ever be made to Lucent as opposed to having several maintenance vendors involved. Lastly, Lucent is the leading company in the world in fiber optic telecommunications equipment. Their standard unit transmits data at 2.3 Gbps and they have new already field installed and tested equipment transmitting data at 10Gbps. 5 40 Phone Sets 40 Phone Sets Total Of 4000 Telephone Sets With 2800 Incoming Dial Tone Lines PBX Wiring ------ -------- Panel T1 Stinger 2800 Total Stinger DSLAM Lines DSLAM 240 Lines 1/2 1/2 240 Lines 16 Lines 40 Lines M2500 2 1 Access City of Vernon Fiber Optic Network Switch -------------------------------- r------------------------------------ Of The 350 Companies: Divide Vernon Into 4 * 1/3 - 25 Or More Employees ! Geographic Quadrants * 1/3 6 To 24 Employees s (About 350 Companies/ * 1/3 - 5 Or Less Employees Quadrant) * Average Is 33.5 Employees 3 4 M4500 Hub Assumptions: Switch 1. The telephony business is implemented by the City of Vernon on a quadrant basis and is not begun until the 1st quadrant has been fully subscribed (100 Businesses). 2. The average number of telephone sets per business is 40. 3. Half the Businesses have T1 and PBX connections requiring 16 incoming dial tone lines and the other half Central Office have wiring panel connections with 40 incoming dial tone Connection With connections. Reseller Like TelePacific 4. A total of 480 DSL lines are used by the 100 Businesses. 5. The minimum telephony subscription period is 1 year. COST ANALYSIS 1st YEAR: 1. Equipment $1.53M. 2. Installation - 20% = $0.31M 3. Maintenance - 10%/Yr = $0.16/Yr Total 1st Year Cost = $2.OM INCOME ANALYSIS 1st YEAR: 1. Dial Tone Lines - 2800 x $10/Line/Mo = $336K/Yr. 2. T1 Lines - 50 x $1000/Mo = $600K/Yr. 3. DSL Lines 480 x $80/Mo = $460K/Yr. 4. Phone Usage - 1cent/Min x 60 Min/Day x 4000 Phone Sets x 260 Days/Yr = $624K/Yr. Total 1st Year Income Potential = $2.02M. 5. Other income should come in from Lucent selling upgrades to businesses internal telephone eauipment on a commission basis to Vernon. INCOME GENERATING POTENTIAL: 1. From the above analysis, the equipment can be paid off in the first year making the 2nd year income potential and years thereafter = Income - Maintenance = $1.86M/Yr. 2. Alternately, Lucent offers lease to purchase financing not requiring City of Vernon to put up any cash. On a 3 year lease to purchase basis, City of Vernon could start drawing a positive cash flow generating income from day one. 3. If the same assumptions are used in obtaining business subscribers in all 4 quadrants, then the eventual Income potential = $1.86M x 4 = $7.44M/Yr. 4. City of Vernon could eventually provide its own Central Office Equipment costing about $13M for the entire City which could eventually provide an additional source of income. Figure 2 - A Lucent Technology Phased Solution To A Vernon Money Making Telephony System 6 2 CALIFORNIA POWER EXCHANGE CORPORATION Meter Service Agreement For PX Participants The Meter Service Agreement for PX Participants is a pro forma Agreement that includes ordered compliance changes METER SERVICE AGREEMENT FOR PX PARTICIPANTS THIS AGREEMENT is dated this-Lf day of ,�i�,f/� , 19- / and is entered into, by and between: (1) City of Vernon having its registered and principal place of business located in 4305 Santa Fe Avenue, Vernon, CA 90058 (the "PX Participant"); and (2) California Power Exchange Corporation, a California non-profit corporation having its principal place of business located in such place in the State of California as the PX Governing Board may from time to time designate, initially 1000 S. Fremont, Building A-9-W, 5th Floor, Alhambra, California, 91803-4737 (the "PX"). The PX Participant and the PX are hereinafter referred to as the "Parties". Whereas: A. Section 5.2.3.1 of the PX Tariff requires the PX to enter into a meter service agreement with each PX Participant (other than those which are SCs which do not Schedule any Energy, Demand or Ancillary Services through the PX or which do not represent any SC Metered Entities) responsible for providing Settlement Quality Meter Data to the PX in accordance with the PX Tariff. B. Section 5.2 of the PX Tariff requires PX Participants to require their customers to adhere to the meter requirements set forth in Section 5 of the PX Tariff. C. The Parties are entering into this Agreement in order to establish the terms and conditions upon which they will discharge their respective duties and responsibilities pursuant to this Agreement and the PX Tariff. NOW THEREFORE, in consideration of the mutual covenants set forth herein, THE PARTIES AGREE as follows: ARTICLE I DEFINITIONS AND INTERPRETATION 1.1 Master Definitions Supplement. All terms and expressions used in this Agreement shall have the same meaning as those contained in the Master Definitions Supplement to the PX Tariff. 1.2 Special Definitions. The following terms and expressions used in this Agreement are defined as set forth below: "Metering Facilities" shall have the same meaning as the meaning contained in the PX Tariff. "PX-ISO Meter Service Agreement" means the meter service agreement for SCs entered into by the ISO and the PX in its capacity as a SC. "SC" means Scheduling Coordinator. 1.3 Interpretation. The following rules of interpretation and conventions shall apply to this Agreement: (a) if there is any inconsistency between this Agreement and the PX Tariff, the PX Tariff will prevail to the extent of the inconsistency; (b) the singular shall include the plural and vice versa; (c) the masculine shall include the feminine and neutral and vice versa; (d) "includes" or "including" shall mean "including without limitation"; (e) references to a section, article or schedule shall mean a section, article or a schedule of this Agreement, as the case may be, unless the context otherwise requires; (f) a reference to a given agreement or instrument shall be a reference to that agreement or instrument as modified, amended, supplemented or restated through the date as of which such reference is made; (g) unless the context otherwise requires, references to any Law shall be deemed references to such Law as it may be amended, replaced or restated from time to time; 2 (h) unless the context otherwise requires, any reference to a "person" includes any individual, partnership, firm, company, corporation, joint venture, trust, association, organization or other entity, in each case whether or not having separate legal personality; (i) unless the context otherwise requires, any reference to a Party includes a reference to its permitted successors and assigns; (j) any reference to a day, week, month or year is to a calendar day, week, month or year; and (k) the captions and headings in this Agreement are inserted solely to facilitate reference and shall have no bearing upon the interpretation of any of the terms and conditions of this Agreement. ARTICLE II TERM AND TERMINATION 2.1 Effective Date. This Agreement shall be effective as of the latter of the PX operations date, the date of execution of this Agreement, or, if applicable, the date it is accepted and made effective by FERC and shall remain in full force and effect until terminated by operation of law pursuant to Section 2.2 of this Agreement. 2.2 Termination 2.2.1 Termination by PX. Subject to Section 4.1, the PX may terminate this Agreement by giving written notice of termination in the event that the PX Participant commits any default under this Agreement and/or the PX Tariff which, if capable of being remedied, is not remedied within thirty [301 days after the PX has given it written notice of the default, unless excused by reason of Uncontrollable Force in accordance with Section 11 of the PX Tariff. Any notice of termination given pursuant to this Section must also be filed at the FERC. This Agreement shall terminate upon acceptance by FERC of a notice of termination. The PX shall timely file any notice of termination with FERC. 2.2.2 Termination by PX Participant. In the event that the PX Participant wishes to terminate this Agreement, the PX Participant shall give the PX ninety [901 days written notice. Any notice of termination given pursuant to this Section must also be filed at the FERC. This Agreement shall terminate upon acceptance by FERC of a notice of 3 termination. The PX shall timely file a notice of termination with FERC. ARTICLE III GENERAL TERMS AND CONDITIONS 3.1 Agreement Subject to PX Tariff. This Agreement shall be subject to the provisions of the PX Tariff and the PX-ISO Meter Service Agreement which shall be deemed incorporated herein, as the same may be changed or superseded from time to time. In the event of a conflict between the terms and conditions of this Agreement and any other terms and conditions set forth in the PX Tariff or the PX-ISO Meter Service Agreement, the terms and conditions of the PX Tariff or the PX-ISO Meter Service Agreement, as the case may be, shall prevail to the extent of the inconsistency. 3.2 Adherence to Same Requirements. The PX Participant shall ensure that any future agreements made between itself and its customers that address or concern the subject matter of this Agreement, including the provision of Settlement Quality Meter Data to the PX and the inspection, testing or auditing of Metering Facilities, shall specify that those customers shall adhere to the same requirements and standards referred to in this Agreement, the PX Tariff and the PX- ISO Meter Service Agreement. 3.3 PX Acting as Agent. The PX Participant authorizes the PX to act as its agent and grants the PX all necessary agency authority whether actual, implied or inherent for the purposes of enabling the PX to perform its obligations under this Agreement, the PX Tariff and the PX-ISO Meter Service Agreement. 3.4 Obligations and Rights of the PX Participant. 3.4.1 Meter Information. If the PX so requests, the PX Participant shall provide in the format prescribed by Schedule 1 to this Agreement the required information with respect to any meter or meters of the PX Participant (if any) or any ISO Metered Entity, SC Metered Entity or other customer the PX Participant represents. That information shall include the specific distribution loss factors or methodology they propose to use as determined by the relevant UDC and approved by the relevant Local Regulatory Authority. The PX Participant must immediately notify the PX of any changes to the information provided to the PX in accordance with this Section 3.4.1 and provide the PX with any information in relation to such change as reasonably Il requested by the PX. The PX Participant shall have the right to modify the information provided in Schedule 1, such modification shall not constitute an amendment to this Agreement. 3.4.2 Assistance and Cooperation of PX Participant. The PX Participant shall use its best efforts to ensure that the ISO and the PX shall, upon reasonable notice, have access to its entire Metering Facilities (if any) and the Metering Facilities of its customers in order to inspect, test or audit those Metering Facilities. If, after using its best efforts, the PX Participant is unable to provide the ISO or PX with such access rights, the PX Participant shall ensure that one of its employees is an ISO Authorized Inspector and such employee undertakes, at the ISO's or PX's request, the certification, testing, inspection and/or auditing of those Metering Facilities in accordance with the procedures established by the relevant Local Regulatory Authority or, if no such procedures have been established by that Local Regulatory Authority, in accordance with the procedures established pursuant to the ISO Tariff (including the requirement to complete and provide to the ISO or the PX with all necessary documentation). The PX acknowledges that it will not be prevented from fulfilling its obligations under the PX Tariff or this Agreement by reason of the fact that it is provided with escorted access to the Metering Facilities of the PX Participant's customers. 3.4.3 Profiled and Cumulative Meter Data. Where the PX Participant submits an Approved Load Profile to the PX as set forth in Section 5.1.2.3 of the PX Tariff, upon a request by the PX, the PX Participant shall also provide the PX with evidence that it has applied the appropriate Approved Load Profile to its customers Meter Data and provide the PX with all necessary authorizations of the Local Regulatory Authority which has jurisdiction over the use of that Approved Load Profile. 3.4.4 Security and Validation Procedures. The PX Participant shall apply to its Meter Data and the Meter Data of its customers, the security and validation procedures prescribed by the relevant Local Regulatory Authority. If the relevant Local Regulatory Authority has not prescribed any such procedures, the PX Participant shall apply procedures approved by the ISO. Settlement Quality Meter Data submitted to the PX by the PX Participant shall conform to the procedures set by the relevant Local Regulatory Authority or the ISO, where applicable, unless the ISO has, at its discretion, exempted the PX Participant or its customers from compliance with the procedures set by the ISO. Any such exemptions granted by the ISO shall be 5 described in Schedule 2 to this Agreement. Any amendment or addition to Schedule 2 to this Agreement shall not constitute an amendment to this Agreement. 3.5 Obligations and Rights of the PX. 3.5.1 PX as Third -Party Beneficiary. The PX shall be a third -party beneficiary to any future agreements between the PX Participant and its customers that address or concern the subject matter of this Agreement, including the provision of Settlement Quality Meter Data to the PX and the inspection, testing or auditing of Metering Facilities. Such agreements shall grant the PX access to any relevant information, records and facilities of the PX Participant's customers as needed by the PX to fulfill its obligations under the PX-ISO Meter Service Agreement, this Agreement and the PX Tariff to the extent such access is consistent with the applicable Local Regulatory Authority's tariff and regulations. ARTICLE IV PENALTIES AND SANCTIONS 4.1 Penalties. If the PX Participant provides incorrect or inaccurate metering data to the PX, the PX shall be entitled to impose penalties and sanctions, including but not limited to suspension of trading rights following 14 days written notice to the PX Participant. All penalties and sanctions shall be set forth in Schedule 3 Part A to this Agreement. No penalties or sanctions, including suspension of trading rights, may be imposed under this Agreement unless a Schedule providing for such penalties or sanctions has first been approved by any appropriate regulatory authority. Nothing in the Agreement, with the exception of the provisions relating to ADR, shall be construed as waiving the rights of the PX Participant to oppose or protest any penalty proposed by the PX to any regulatory authority or the specific imposition by the PX of any approved penalty on the PX Participant. 4.2 Corrective Measures. If the PX Participant or any of its customers fail to meet or maintain the standards of the Metering Facilities or comply with the audit or test procedures referred to in the PX Tariff or the ISO Tariff, the PX shall be permitted to take corrective measures. Schedule 3 Part B to this Agreement shall set forth the corrective measures and rights which the PX may exercise upon any failure by 11 the PX Participant or its customers to meet those standards for Metering Facilities or to comply with the audit or test procedures. ARTICLE V ACCESS TO METER DATA 5.1 Third Parties. Third parties authorized by the PX Participant to access the Settlement Quality Meter Data of its customers held by the PX shall be identified in Schedule 4 to this Agreement. Any amendment or addition to Schedule 4 to this Agreement shall not constitute an amendment to this Agreement. ARTICLE VI COSTS 6.1 Certification, Inspection and Auditing of Meters. The PX Participant shall be responsible for all reasonable costs incurred by the PX in connection with certification, inspection and all ongoing testing and auditing of its Metering facilities (if any) and those of its customers. The PX or ISO Authorized Inspector will furnish the PX Participant, upon request, an itemized bill for such costs. 6.2 Costs Incurred by PX as SC. Any and all reasonable costs incurred by the PX as a SC on behalf of the PX Participant or its customers shall be passed through to the PX Participant. If the PX Participant does not pay such costs to the PX within the time specified in the PX Tariff, the PX Participant shall be in default and shall incur Interest until such payment is made. The PX will furnish the PX Participant, upon request, with an itemized bill for such costs. ARTICLE VII DISPUTE RESOLUTION 7.1 Dispute Resolution. The Parties shall make reasonable efforts to settle all disputes arising out of or in connection with this Agreement. In the event any dispute is not settled, the Parties shall adhere to the PX ADR Procedures set forth in Section 7 of the PX Tariff, which is incorporated by reference, except that all reference to the PX Tariff in Section 7 of the PX Tariff shall be read as reference to this Agreement. 7 ARTICLE Vill REPRESENTATIONS AND WARRANTIES 8.1 Representations and Warranties. The PX Participant represents and warrants that the execution, delivery and performance of this Agreement has been duly authorized by all necessary corporate and/or governmental actions, to the extent authorized by law. ARTICLE IX LIABILITY AND INDEMNIFICATION 9.1 Liability and Indemnification. The provisions of Section 9 of the PX Tariff will apply to liability arising under this Agreement, except that all references to the PX Tariff in Section 9 of the PX Tariff shall be read as references to this Agreement. ARTICLE X UNCONTROLLABLE FORCES 10.1 Uncontrollable Forces Tariff Provisions. Section 11 of the PX Tariff shall be incorporated by reference into this Agreement except that all references to the PX Tariff shall be read as references to this Agreement. ARTICLE XI MISCELLANEOUS 11.1 Assignments. Either Party may assign or transfer any or all of its rights and/or obligations under this Agreement with the other Party's prior written consent, in accordance with Section 12 of the PX Tariff. Such consent shall not be unreasonably withheld. Any such transfer or assignment shall be conditioned upon the successor in interest accepting the rights and/or obligations under this Agreement as if said successor in interest was an original Party to this Agreement. 11.2 Notices. Any notice, demand or request which may be given to or made upon either Party regarding this Agreement shall be made in accordance with Section 15.1 of the PX Tariff. A Party must update the information in Schedule 5 as information changes. Such changes shall not constitute an amendment to this Agreement. E:? 11.3 Waivers. Any waivers at any time by either Party of its rights with respect to a default under this Agreement, or with respect to any other matter arising in connection with this Agreement, shall not be deemed a waiver with respect to any subsequent default or matter in accordance with Section 15.2 of the PX Tariff. Any delay, short or the statutory period of limitations, in asserting or enforcing any right under this Agreement shall not be deemed a waiver of such right. 11.4 Governing Law and Forum. This Agreement shall be deemed to be a contract made under and for all purposes shall be governed by and construed in accordance with the laws of the State of California, except its conflict of law provisions. The Parties irrevocably consent that any legal action or proceeding arising under or relating to this Agreement to which the PX ADR Procedures do not apply, shall be brought as appropriate, in any of the following forums: any court of the State of California, any federal court of the United States of America located in the State of California or, where subject to its primary or exclusive jurisdiction, before the Federal Energy Regulatory Commission. 11.5 Consistency with Federal Laws and Regulations. This Agreement shall incorporate by reference Section 15.7 of the PX Tariff as if the references to the PX Tariff were referring to this Agreement. 11.6 Merger. This Agreement constitutes the complete and final agreement of the Parties with respect to the subject matter hereto and supersedes all prior agreements, whether written or oral, with respect to such subject matter. 11.7 Severability. If any term, covenant, or condition of this Agreement or the application or effect of any such term, covenant, or condition is held invalid as to any person, entity, or circumstance, or is determined to be unjust, unreasonable, unlawful, imprudent, or otherwise not in the public interest by any court or government agency of competent jurisdiction, then such term, covenant, or condition shall remain in force and effect to the maximum extent permitted by law, and all other terms, covenants, and conditions of this Agreement and their application shall not be affected thereby, but shall remain in force and effect and the Parties shall be relieved of their obligations only to the extent necessary to eliminate such regulatory or other determination unless a court or governmental agency of competent jurisdiction holds that such provisions are not separable from all other provisions of this Agreement. 11.8 Counterparts. This Agreement may be executed in one or more counterparts at different times, each of which shall be regarded as an original and all of which, taken together, shall constitute one and the same Agreement. 11.9 Amendments. This Agreement may be amended from time to time by the mutual agreement of the Parties in writing. Amendments that are subject to FERC approval shall not take effect until FERC has approved such amendments. IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed on behalf of each by and through their authorized representatives as of the date as set forth in the first paragraph of this Agreement. California Power Exchange Corporation By: Title: ATTES L--- Z""/--� - Bruce V. Malkenhorst, City Clerk APPROVED AS TO FORM: City Attorney CITY of VERNON By: Gu LEONIS C. AALBURG Title: Mavor Date: Me] SCHEDULE 1 METER INFORMATION [Section 3.4.1 Entity Meter ID/Unmetered Load ID Name of the Facility Physical Location Electrical Location Zone Transmission Owner N/A Load Group/Demand Zone/Schedule Location Distribution System ISO Interface Point Description of the Approved Distribution loss factor applied Load profile ID 11 SCHEDULE 2 EXEMPTIONS FROM METERING STANDARDS AND OTHER REQUIREMENTS [Section 3.4.41 Describe the entity and the exemption granted to that entity including the period for which the exemption is granted N/A 12 SCHEDULE 3 PART A PX Imposed Penalties and Sanctions [Section 4.11 PART B Corrective Measures [Section 4.21 [To be provided] 13 SCHEDULE 4 Access to Meter Data [Section 5.11 List the third parties authorized to access the Settlement Quality Meter Data of the PX Participant and each of its customers that participate in the PX. [Note: Third parties, other than SCs, will not be able to access MDAS as at 1/1/981 I,1L-11 14 Name of Primary Representative: Title: Address: City/State/Zip Code Email address: Phone: Fax: Name of Alternative Representative: Title: Address: City/State/Zip Code Email address: Phone: Fax: SCHEDULE 5 NOTICE [Section 11.21 Kenneth J. DeDario Director of Utilities 4305 Santa Fe Avenue Vernon, California 90058 vernon@globalpac.com (323) 583-881 1, Ext. 211 (323) 583-1983 Jorge C. Somoano Assistant Director of Utilities 4305 Santa Fe Avenue Vernon, California 90058 vernon@globalpac.com (323) 583-881 1, Ext. 248 (323) 583-1983 *This schedule must be updated as information changes 15 SOFTWARE LICENSE AGREEMENT rb' THIS AGREEMENT is dated this day of�r4WIJ*ty , 19 f9 (the "Agreement") and is entered into, by and between City of Vernon having its registered and principal place of business located in 4305 Santa Fe Avenue, Vernon, CA 90058 ( the "PX Participant") and the California Power Exchange Corporation, a California non-profit public benefit corporation having its principal place of business located in such place in the State of California as the PX Governing Board may from time to time designate, initially 1000 S. Fremont, Building A-139-W, 5th Floor, Alhambra, California, 91803- 4737 (the "PX"). The PX Participant and the PX are hereinafter referred to as the "Parties". WHEREAS: A. The PX (as successor -in -interest to the Power Exchange Restructuring Trust) is party to a System Delivery and License Agreement with OM Technology AB ("OM") for the delivery and license of a proprietary software system for use in a power exchange and for related services, dated March 27, 1997 ("License Agreement"). B. Under the License Agreement, the PX has the right to use the Software Product and associated Documentation and license the OMNet API software and Hand-EL/PX Trade Application to Users, subject to certain terms and conditions. C. Hand -El Skandinavia AS ("HSAS") will cooperate with providing the Software Product to Users pursuant to this Agreement and will be a subcontractor of OM for this purpose. D. The Parties are entering into this Agreement in order to establish the terms and conditions upon which they will discharge their respective duties and responsibilities with respect to the Software Product. NOW THEREFORE, in consideration of the mutual covenants set forth herein, THE PARTIES AGREE as follows: ARTICLE I DEFINITIONS AND INTERPRETATION 1.1 Master Definitions Supplement. Unless defined in Section 1.2, all capitalized terms used in this Agreement shall have the same meaning as those contained in the Master Definitions Supplement to the PX Tariff. 1.2 Special Definitions. The following capitalized terms used in this Agreement shall have the meaning set forth below: "Documentation" shall mean any and all manuals, specifications, literature, and other documents supplied by the PX to the PX Participant related to the Software Product. "Hand-EL/PX Trade Application" shall mean the part of the Software Product developed by HSAS for use by the PX Participant pursuant to this agreement. "OMNet API Software" shall mean the part of the Software Product developed by OM for use by the PX Participant pursuant to this agreement. "Software Product" shall mean the OMNet API Software and the Hand-EL/PX Trade Application to be provided by the PX in accordance with the terms of this Agreement. "User" shall mean the participants trading on or otherwise connected to the PX for trading in the traded products, including the PX Participant. ARTICLE II TERM AND TERMINATION 2.1 Effective Date. This Agreement shall be effective as of the date of execution of this Agreement and shall remain in full force and effect until terminated pursuant to Section 2.2 of this Agreement. 2.2 Termination 2.2.1 Termination by P . The PX may terminate this Agreement by giving written notice of termination in the event that the PX Participant's certification under Section 2.6 of the PX Tariff is canceled by the PX, unless excused by reason of Uncontrollable Force in accordance with Section 11 of the PX Tariff, or in the event that the License Agreement is terminated. 2.2.2 Termination by PX Participant. In the event that the PX Participant wishes to terminate this Agreement, the PX Participant shall give the PX written notice of such intent to terminate and the date upon which termination is to be effective. 2.2.3 Effects of Expiration or Termination. Upon expiration or termination of this Agreement for any reason, the PX Participant shall (a) discontinue all use of the Software Product and Documentation, (b) deliver to the PX all physical copies of the Software Product and Documentation in its possession or under its control, (c) erase or destroy all copies of the Software Product and Documentation contained in any computer memory or data storage apparatus under its control and (d) provide PX with written notice within one (1) week of expiration of termination certifying that it has complied with the terms of this Section. ARTICLE III GENERAL TERMS AND CONDITIONS 3.1 Agreement Subject to PX Tariff. This Agreement shall be subject to the provisions of the PX Tariff which shall be deemed incorporated herein, as the same may be changed or superseded from time to time. In the event of a conflict between the terms and conditions of this Agreement and any other terms and conditions set forth in the PX Tariff, the terms and conditions of the PX Tariff shall prevail to the extent of the inconsistency. 3.2 OM as Third -Party Beneficiary. OM shall be a third -party beneficiary to this Agreement. OM shall have access to any relevant information, records and facilities of the PX Participant as required by OM. The PX, OM and/or their representatives shall have the right to examine the facilities and the books, records and other relevant materials of the PX Participant to the extent necessary to verify compliance with the terms of this Agreement. ARTICLE IV LICENSE TO SOFTWARE PRODUCT AND DOCUMENTATION 4.1 License. Subject to the terms and conditions of this Agreement, the PX hereby grants to the PX Participant and the PX Participant hereby accepts a non-exclusive, non- transferable license to use the Software Product in machine readable object code and the Documentation solely for the purpose of operation in connection with the trading activities of the PX on the following computer located at the following site(s): 4305 Santa Fe Avenue, Vernon, California 90058 and 2715 E. 50t' Street, Vernon, California 90058. The PX Participant may not change the location of the Software Product without the PX's prior consent. This license is for the version of the Software Product described in Article 1; any other versions, releases updates or upgrades of the Software Product shall be the subject of a separate agreement. The territory of this license is the United States, Canada and Mexico. The PX Participant shall not authorize or permit the Software Product or Documentation to be used or accessed by any third party other than consultants or contractors of the PX Participant who have a need to access the Software Product to perform services for the PX Participant and who have signed a nondisclosure agreement with the PX Participant. 4.2 Licensed Operating S, sue. The Software Product is licensed for execution on a Windows NT operating system only. 4.3 Intellectual Property Rights. The PX Participant acknowledges and agrees that the PX or its licensers will retain all right, title, interest and ownership in and to the Software Product and Documentation, including rights of copyright, trademark, trade secret, patent and other intellectual property rights. The PX Participant shall use reasonable efforts to maintain the Software Product and Documentation in confidence and shall not directly or indirectly, publish, communicate or disclose the Software Product and Documentation without the PX's prior written consent. The PX Participant shall reproduce (and shall not obliterate or obscure) the intellectual and property rights notices on or in the Software Product and Documentation. The provisions of this Section shall survive expiration or termination of this Agreement. 4.4 No Transfer of Title. The PX does not transfer to the PX Participant any title to or right of ownership in or to the Software Product or the Documentation pursuant to this Agreement or otherwise. 4.5 Non -Exclusive. The PX and its licensers expressly reserve the right to grant licenses to the Software Product or Documentation to other Users without restriction or limitation of any kind. 4.6 No Right to Assign, Transfer. or License. The PX Participant shall not sublicense, lease, encumber or otherwise transfer or assign this Agreement or the Software Product or Documentation to any third party or to use or permit the use of the Software Product or the Documentation outside the scope of this Agreement provided that the PX Participant may transfer and assign this Agreement and its right to use the Software Product and/or Documentation to any subsidiary or affiliate corporation of PX Participant or of any purchaser of all or substantially all of the assets comprising the business of PX Participant. 4.7 Back-up Copies. The PX Participant shall be entitled to make one (1) back-up copy of the Software Product as a back-ups for its own use only. The PX Participant shall not be entitled to make copies of the Documentation. Additional copies can be acquired from the PX for an additional fee. 4.8 Non -Circumvent. The PX Participant shall not decompile, reverse assemble or reverse engineer the Software Product for any reason. 4.9 Installation and Conversion of Data. The PX Participant shall be solely responsible for (a) installation of the Software Product, (b) interoperability of the Software Product with any other software and hardware of the PX Participant and (c) the conversion of any data required in connection with the PX Participant's use of the Software Product. ARTICLE V SOFTWARE PRODUCT WARRANTIES 5.1 Vendor Warranties. The PX shall pass through to the PX Participant any warranties with respect to the Software Product offered by OM or HSAS. The PX shall have responsibility for enforcing the provisions of the warranties against OM or HSAS. Except as provided in this Article 5.1, the PX disclaims all warranties regarding the Software Product. 5.2 Non -Infringement. The PX warrants that the Software Product does not infringe any United States intellectual property right of third parties. The PX and/or its licensers shall, at their expense, defend any action brought against PX Participant to the extent that it is based on a claim that the Software Product and/or Documentation infringes any US Patent, copyright, license, trade secret, or other proprietary right, provided that the PX is promptly notified in writing of such a claim. 5.3 Disclaimer. Any warranties that may be applicable to the Software Product shall not apply to the extent that the PX Participant has made any modifications or changes to the Software Product, or if deficiencies or malfunctions of the Software Product are due to causes and products external to the Software Product or to operation of the Software Product in any manner other than as contemplated by the Documentation. 5.4 No Other Express or Implied Warranties. THE WARRANTIES SET FORTH IN THIS AGREEMENT ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTIES AS TO SUITABILITY, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. ARTICLE VI DISPUTE RESOLUTION 6.1 Dispute Resolution. The Parties shall make reasonable efforts to settle all disputes arising out of or in connection with this Agreement. In the event any dispute is not settled, the Parties shall adhere to the PX ADR Procedures set forth in accordance with Section 7 of the PX Tariff, which is incorporated by reference, except that all reference to the PX Tariff in Section 7 of the PX Tariff shall be read as reference to this Agreement. ARTICLE VII LIABILITY AND INDEMNIFICATION 7.1 Liability and Indemnification. The provisions of Section 9 of the PX Tariff will apply to liability arising under this Agreement, except that all references to the PX Tariff in Section 9 of the PX Tariff shall be read as references to this Agreement. ARTICLE VIII UNCONTROLLABLE FORCES 8.1 Uncontrollable Forces Tariff Provisions. Section 11 of the PX Tariff shall be incorporated by reference into this Agreement except that all references to the PX Tariff shall be read as references to this Agreement. ARTICLE IX MISCELLANEOUS 9.1 Governing Law and Forum. This Agreement shall be deemed to be a contract made under and for all purposes shall be governed by and construed in accordance with the laws of the State of California, except its conflict of law provisions. The Parties irrevocably consent that any legal action or proceeding arising under or relating to this Agreement to which the PX ADR Procedures do not apply, shall be brought as appropriate, in any of the following forums: any court of the State of California, any federal court of the United States of America located in the State of California or, where subject to its primary or exclusive jurisdiction, before the Federal Energy Regulatory Commission. This Agreement shall incorporate by reference Section 15.6 of the PX Tariff. 9.2 Reservation of Rights. All rights not expressly granted in this Agreement are hereby reserved to the PX and its licensers. 9.3 Assignment. Except as stated in Paragraph 4.6, the PX Participant may not assign this Agreement, in whole or in part, or any of its rights or obligations under this Agreement without the prior written consent of the PX. Any attempted assignment in violation of this provision shall be void. IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed on behalf of each by and through their authorized representatives as of the date as set forth in the first paragraph of this Agreement. CALIFORNIA POWER EXCHANGE CORPORATION e _IER 0 � i ATTEST: Bruce V. Malkenhorst, City Clerk APPROVED AS TO FORM: City Attorney CITY of VERNON By: u, / EONIS C. LBURG Title: Mayor Date: Form of Participation Agreement to the PX Tariff THIS AGREEMENT is made the ,2 7 day of and is entered into, by and between: (1) City of Vernon having a registered or principal executive office at 4305 Santa Fe Avenue, Vernon, CA 90058 (the "PX Participant") and (2) THE CALIFORNIA POWER EXCHANGE CORPORATION, a California nonprofit public benefit Corporation having a principal executive office located at such place in the State of California as the PX Governing Board may from time to time designate (the "PX"). WHEREAS: A. The PX Participant has been certified by the PX under the certification procedure referred to in Section 2.6 of the PX Tariff. B. The PX Participant wishes to trade Energy through the PX Market under the terms and conditions set forth in the PX Tariff. NOW IT IS HEREBY AGREED as follows: I. Definitions A. Terms and expressions used in this Agreement shall have the same meanings as those contained in the Master Definitions Supplement to the PX Tariff. B. The "PX Tariff' shall mean the PX Operating Agreement and Tariff as amended from time to time, together with any Appendices or attachments thereto. II. Covenant of the PX Participant The PX Participant agrees that: A. the PX Tariff governs all aspects of trading in and administration of the PX Market, including (without limitation), the financial and technical criteria for PX Participants, bidding, Settlement, information reporting requirements and confidentiality restrictions; B. it will abide by, and will perform all of the obligations under the PX Tariff in respect of all matters set forth therein including, without limitation, all matters relating to the trading of Energy by it through the PX Market, ongoing obligations in respect of bidding, Settlement, security requirements, billing and payments, confidentiality and dispute resolution; C. its status as a PX Participant is at all times subject to the PX Tariff and; D. it will enter onto a software licensing agreement with the PX for use of the trade application software. 3. Term and Termination This Agreement shall commence on the later of (a) 12/20/98 or (b) the date the PX Participant is certified by the PX as a PX Participant and shall terminate upon acceptance by FERC of the Notice of Termination. The PX shall timely file a Notice of Termination. 4. Assignment Either party may assign its obligations under this Agreement with the other party's prior consent, not to be unreasonably withheld. 5. Partial Invalidity If any provision of this Agreement, or the application of such provision to any persons, circumstance of transaction, shall be held invalid, the remainder of this Agreement, or the application of such provision to other persons or circumstances or transactions, shall not be affected thereby. PX: Settlement Account The PX Participant shall at all times maintain an account with a bank in California to which credits or debits will be made in accordance with the billing and Settlement provisions of Section 6 of the PX Tariff. The details of such account shall be as set out in Section 7 hereof or as notified by the PX Participant to the PX from time to time by giving at least 5 Business Days written notice before the new account becomes operational. Notices Any notice demand or request made to or by either party regarding this Agreement shall be made in accordance with the PX Tariff and unless otherwise stated or agreed shall be made to the representative of the other party indicated below: Name of primary representative: - �L'i�•�E�vy Name of alternative representative: lsz�- � o Address: State: e '14 Zip code:�.3 E-mail Address: /a'exelyx' "2. Phone no.: e, 7 Fax no.: ?- PX Participant: Name of primary representative: Kenneth J. DeDario Name of alternative representative: Jorge C. Somoano Address: 4305 Santa Fe Avenue Vernon, California 90058 State: California Zip Code: 90058 E-mail Address: vernon c0globalpac.com Phone No.: (323) 583-8811 Fax No.: (323) 583-1983 Settlement Account: City of Vernon Number: 4159 283 738 Title: City of Vernon Sort Code: oba#121000248 Bank: Wells Fargo 8. Incorporation of Tariff. The PX Tariff is incorporated herein and made a part hereof. In the event of a conflict between the terms and conditions of this Agreement and any other terms and conditions set forth in the PX Tariff, the terms and conditions of the PX Tariff shall prevail. 9. Electronic Contracting. All submitted applications, schedules, bids, confirmations, changes to information on file N with the PX and other communications conducted via electronic transfer (e.g. direct computer link, FTP file transfer, bulletin board, e-mail, facsimile or any other means established by the PX) shall have the same legal rights, responsibilities, obligations and other implications as set forth in the terms and conditions of the PX Tariff as if executed in written format. 10. Payment Obligations. All obligations to pay amounts or perform obligations due with respect to the PX Tariff and any other charges, taxes or other expenses related to this Agreement (including, without limitation, expenses pursuant to the Meter Service Agreement) or the PX Participant's trading in the PX Market generally shall be the sole responsibility of the PX Participant. IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective authorized officials. PX: By: Gs �CC ame PX Participant: ATTEST: Bruce V. Malkenhorst, City Clerk APPROVED AS TO FORM: �c City Attorney /__1 6,�U "Al Title 1/z7/99, Date CITY of VERNON By: mac- ; rt LGu� L 0NIS C. MALB RG Title: Mayor Date: December H . 1998 DI C-02-199B 11:16 COMERICA INST.TRUST 415 328 9317 P.01/0B FAx TRANSMISSION COMERICA BANK-CALIFORNIA 250 LYT-TON AVENUE MC 41 95 PALO ALTO, CA 94301 650-462-� 4 FAX- 650-328-93 1 7 To: -j- Cm,&_z�r 0 Date: Company c U �t•�r� Pages: From: Fax #: Subject: fg�� /Per your request V For your information For your approval For processing Comments: -I2171gg As we discussed To review and comment Confirm receipt For your files -DEC-02-199B 11:16 COMERICA INST.TRUST 415 32E 9317 P.02i0B INSTITUTIONAL CASH INVESTMEN-I' ACCOUNT ICIA # INVESTMENT FUND ELECTION FORM ❑ AIM SHORT-TERM INVESTMENTS CO. PRIME PORTFOLIO A money market fund whose investment objective is the maximization of current income consistent with preservation of capital and the maintenance of liquidity. Investments arc in high Bade money market instruments such as U.S. Government obligations, bank obligations, commercial instruments and repurchase agreements. All instruments will have maturities of sixty- days or less. O AIM SHORT-TERM INVESTMENTS CO. LIQUID ASSETS PORTFOLIO This is a money market mutual fund which invests in high -quality money market instruments such as U.S. Government and foreign obligations, commercial instruments and repurchase agreements. �m Iif3u (s71 **Au F7 7 *AA- 17 The objective of these money market funds is to provide as high a level of current income as is consistent with preservation of capital and liquidity. Investments are in high quality commercial paper, U-S. Government obligations, bank obligations and repurchase agreements. ❑ DREYFUS GOVERNMENT CASH MANAGEMENT This is a money market mutual fund which invests in securities issued or guaranteed by the U.S_ government, its agencies or instrumentalities, as .yell as repurchase agreements collateralized with such securities. ❑ DREYFUS TREASURY PRIME CASH MANAGEMENT This is a money market mutual fund which invests exclusively in U.S. Treasury securities. ❑ SEI INSTITUTIONAL TAX-FREE PORTFOLIO This is a money market mutual fund which invests in U.S. dollar denominated municipal securities of issuers located in all fifty stares, the District of Columbia, Puerto Rico, and other U.S. Territories and possessions. ❑ MUNDER TAX-FREE MONEY MARKET This is a money market mutual fund which invests substantially all of its assets in a diversified portfolio of short-term municipal obligations. Munder Capital Management, investment advisor for Comerica Bank, serves as investment manager. O GOVERNMENT AGENCY REPURCHASE AGREEMENT This is an overnight repurchase agreement structured with multiple primary government dealers. The agreement is collateralized at 102% with U.S_ government agency and agency sponsored securities. ❑ MASTER TREASURY REPURCHASE AGREEMENT This is an open-ended repurchase agreement structured with Merrill Lynch Government Securities Incorporated. The agreement is collateralized at 102% with U.S. Treasury securities. ❑ CTFA CALIFORNIA TRUST FUNDS ACCOUNT The Comerica Bank -California Trust Funds Account is a fully secured savings deposit account with an interest rate tied to the Donoghue's weekly Money Market Averagc. Unlike Mutual Funds and other accounts, Comerica Bank -California's Trust Funds Account offers FDIC insurance up to $100,000 and collateralized protection of any funds in excess of $100,000. ❑ OTHER Read the prospectus camfu(ly, Mutual Funds and Repurchase Agreements are not insured or guaranteed. lrqitutional "rtusl FLECTtoN FFM Bcnnuda Cayman (;land.: Chicago Dall- Detroit Houston Lanriing Pnlo Alm 'P,EC-02-199E 11:17 COMERICA INST.TRUST 415 328 9317 P.03i0E DOCUMENT CHECKLIST TWITIM.'J ame of Client Given to Client DOCUMENT TITLE Received Signed Copy I Escrow Agreement Custodial or Trustee Agreement 2 Supplement to Escrow Agreement Supplement to Custodial/Trustee Agreement 3 Investment Fund Election 4 tma��Rsoutto do n A count dAppoin�i as�to an/T gste� p \ 5 W-9 • I ,DEC-02-1998 11:17 COMERICA INST.TRUST 415 32B 9317 P.04i08 SUPPLEMENT TO ESCROW AGREEMENT Institutional Trust Department This Agreement & Application and the appropriate entity authorization form must be completed, signed and received by Comerica Bank before an Escrow Account can be established. Once Comerica Bank has received the completed documentation, an account number will be assigned. L ACCOUNT REGISTRATION Account Number: Depositor Name: Address: Telephone Number: Taxpayer Identification Number (TIDY): 11 MAILING INSTRUCTIONS Mail receipWstatements to: Name: Name: Address: Address: IIl. SPECIAL INSTRUCTIONS Tcrm of Escrow: Purpose: Number of Shareholders: Law Firm - Investment Restrictions: DEC-02-1990 11:10 CONERICA INST.TRUST 415 328 9317 P.05i08 IV. INVESTMENT ELECTION (Select one option): 1. Comerica Bank is authorized to exercise its discretion in attempting to maximize yield by investing in any one of the institutional money fund options available or new options which may be added by Comerica Bank from time to time- 0 2. Comerica Bank is authorized to invest in the option checked on the Investment Fund Election Form or a comparable option which may be substituted by Comerica Bank from time to time . The investment options described in the Investment Fund Election Form are not a deposit or other obligation of or guaranteed by Comerica Bank and are not insured by the FDIC. Money market funds and repurchase agreements are subject to investment risk, including possible loss of the principal amount invested. A prospectus describing each of the money market funds offered as an ESCROW investment option is available upon request and should be reviewed prior to investing. V. DEPOSITOR AUTHORIZATION AND TAXPAYER CERTIFICATION This Agreement & Application made this day of , 19 , between (the "Depositor") and Comer ien Bank, a California Corporation (the "Bank'). Under the penalties of perjury, I certify that: (1) The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me), and (2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service that I am subject to backup withholding as a result of failure to report all interest or dividends, or ® the IRS has notified me that I am no longer subject to backup withholding. (This item (2) does not apply to real estate transactions, mortgage interest paid, the acquisition or abandonment of secured property, contributions to an individual retirement arrangement and payments other than interest and dividends.) Certification Instructions: YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE CURRENTLY SUBJECT TO WITHHOLDINC BECAUSE OF UNDER REPORTING INTEREST OR DIVIDENDS ON YOUR TAX RETURN. © Exempt from Backup Withholding I am authorized to sign this agreement according to the following (indicate the type of entity represented and complete the corresponding authorization form which has been included with this application): O Resolution of Corporate Board ❑ Limited Liability Corporation Authorization Depositor Signature: Comerica Bank: ❑ Partnership Authorization ❑ Sole Proprietorship[ Information Name and Title: Bv: Its: ' DE[-02-1998 11:18 [OMERlCA {NST.TRUST 415 328 9317 P.06/08 � tive Annualized Net Yields nal Cash Investment Account in i�i Dreyfus Janu AIM Dreyfus Treasury Institution al Prim e Month Gov't Prime Money Mkt I'd Obligations January March 4.94 May August �87 October December Average - PEC-02-1998 11:19 COMERICA lNST'TRUST 415 328 9317 P'07/08 I AIM Short Munde r SPI Gov't Merrill Lynch Term Inv Tax Free Tax Exempt Agency Treasury Liquid ssets IMon Mkt Fd Institutional Repo Repo 14 .......... 4.69 4.68 HOLE 5.01 7EC-02-1990 11:20 COMERICA INST.TRUST 415 326 9317 P.OB/OB } ► INSTITUTIONAL CASH INVESTMENT ACCOUNT FUND OVERVIEW AIM SHORT-T .RW iNV .STMENTS CO. PRIME PORTFOLIO: The investment objective of this money market mutual fund is to maximize current income consistent with preservation of capital and the maintenance of liquidity. Investments are in high grade money market instruments such as U.S. Government obligations, domestic bank obligations, Euro CD's, and time deposits of London branches of U.S. Banks, commercial instruments and repurchase agreements. All instruments will have maturities of sixty days or less. ATM SHORT-T .RM INVESTMENTS CO. Ll<OUID ASSETS PORTFOLIO: This is a money market mutual fund which invests in high - quality money market instruments such as U.S. Government and foreign obligations, commercial instruments and repurchases agreements. Commercial obligations may include both domestic and foreign issues that are U.S_ dollar denominated. JANUS MONEY MARKER UR&M A money market mutual fund which invests primarily in high -quality commercial paper, U.S. Government securities, and obligations of financial institutions_ The fund may invest in U.S. dollar denominated certificates of deposit issued by foreign banks and their branches. DREYFUS_GOVERNWNT --CASH MANAGEMENT: This is a money market fund structured with the objective of maximizing current income while preserving capital and maintaining liquidity. The Fund invests exclusively in (a) marketable securities issued or guaranteed as to principal and interest by the U.S. Government or by agencies or instrumentalities thereof, and (b) repurchase agreements pertaining thereto. DREYFUS TREASURY PRIME CASH MANThis money market mutual fund invests exclusively in U.S. Treasury securities_ It is structured with the objective of maximizing current income while preserving capital and maintaining liquidity. SEI NSTXTUTIONAL TAX-IFREE PORTFOLIO: This is a money market mutual fund which invests in U.S. dollar denominated municipal securities of issuers in all fifty states, the district of Columbia, Puerto Rico, and other U-S. Territories and possessions. The objective of the fund is to provide current income exempt from Federal income tax. MUNDER TAX-FREE MONEY MARKET FUND; This is a money market mutual fund which invests substantially all of its assets in a diversified portfolio of short-term, U.S. dollar denominated municipal obligations_ The objective is to provide current income exempt from Federal income tax. Munder Capital Management, investment advisor for Comerica Bank, serves as investment manager. CSVERNMENT AGENCY REPURCHASE AGREEMENT: This is an overnight repurchase agreement structured with multiple dealers. The agreement is collaterized with U.S. Government agency and agency -sponsored securities which have market value of 102% of the repurchase investment. The amount invested with each dealer on a given day may vary depending on the rate and overall capacity. MASTER TREASURY REPURCHASE AGREEiME1!LIt This is an open-end agreement where each day Merrill Lynch pays for the use of funds with interest comparable to prevailing money market rates in New York. The agreement is collaterized by U.S. Government securities with a market value of 102% of the repurchase investment. CTFA CALIFORNIA TRUST FUNDS ACCOUNT: The Comerica Bank -California Trust funds account is a fully secured savings deposit account with an interest rate tied to the Donoghue's weekly Money Market Average. Unlike other accounts that are not insured by the U.S. Government and give no assurance of maintaining a net asset value of $1.00 per share, Comerica Bank -California's Trust Funds Account offers FDIC insurance up to $100,00 and collateralized protection of any funds in excess of $100,000_ The Investment options (except CTFA) described above are not a deposit or other obligation of or guaranteed by Comerica Bank and are not insured by the FDIC The options seek to maintain a stable net asset value of SI.00 per share: however, there can be no assurance that this objective will be met. Money market funds and repurchase agreements are subject to investment risk including possible loss of the principal amount invested. A prospectus describing each of the money market funds offered as an 1CIA investment option is included with your account -opening materials; you should review them prior to investing. (rmenc�� kir.,lr.,�sIT-9 ADDENDUM TO PARTICIPATION AGREEMENT entered into, by and between [Full Legal Name of PX Participant] and the California Power Exchange Corporation Terminal Fee Election Under the terms of the PX Tariff, City of Vernon understands that to participate in the California Power Exchange Corporation (PX), PX Participant is required to utilize the PX trade application software. It is understood that to utilize this software all PX Participants must pay Terminal Fees, as set forth in the PX Tariff, Appendix E, Rate Schedule 1, for each workstation on which the trade application software is utilized. It is further understood that PX Participant must also execute a Software Sublicensing Agreement with the PX in order to utilize the trade application software. PX Participant agrees to subscribe to 2 trade application(s). PX Participant will run 2 concurrently. PX Participant is permitted to change the total number of trade applications to which it will subscribe by providing notice to the PX at least five business days prior to the start of the month in which PX Participant requires a different number of trade applications. The full monthly assessment of Terminal Fees will be charged for each use of the trade application software during any part of a month. Notice shall be provided to the PX in any method set forth for Electronic Contracting in Section 9 of the Participation Agreement entered into between the parties on /,27' ff IN WITNESS WHEREOF, the Parties have caused this Addendum to be executed by their respective authorized officials. By: CALIFORNIA POWER EXCHANGE CORPORATION Name Title Date CITY of VERNON ATTEST: Bruce V. Malkenhorst, City Clerk APPROVED AS TO FORM: By: EONIS C. MAL URG Title: Mayor 7 Date: , City Attorney ower'-."' July 13, 1999 Jorge Somoano City of Vernon 4305 Santa Fe Avenue Vernon, California 90058 USA Dear Jorge: In order to facilitate the review of creditworthiness by the City of Vernon ("Vernon") British Columbia Power Exchange Corporation ("Powerex") agrees to provide Vernon a copy of their most recent audited annual financial statements. In consideration of providing this information Vernon agrees to keep the contents of such financial statements strictly confidential and to use the statements solely for the purpose of reviewing Powerex's creditworthiness. Vernon further agrees not to distribute these documents or their contents other than to Vernon personnel responsible for the review and approval of Powerex's creditworthiness. cui�O Each parry's agreement to the terms of this letter shall be evidenced by the signature of its fiexi bi lity. authorized representative in the space provided below. commitment. British Columbia Power Exchange City of Vernon Corporation By: By: Name: David Wong Na e: Jorge C. Somoano Title: Credit Manager Title: Assistant Director of Utilities Resource Management Date: July 13, 1999 Date: August 24, 1999 BRITISH COLUMBIA POWER EXCHANGE CORPORATION Suite 1400 666 Burrard Street Vancouver, BC Canada V6C 2X8 TEL: 604.891.5000 1.800.220.4907 CITY COUNCIL LEONIS C. MALBURG Mayor THOMAS A. YBARRA Mayor Pro-Tem Wm. 'BILL" DAVIS Councilman H. "LARRY" GONZALES Councilman W. MICHAEL McCORMICK Councilman BRUCE V. MALKENHORST City Administrator/City Clerk FAX: (213) 581-7924 CITY HALL 4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058 TELEPHONE (213) 583-8811 December 15, 1998 Ms. Linda Foster Client Services Department California Power Exchange 1000 Fremont Avenue - A9W Alhambra, California 91803 DAVID B. BREARLEY City Attorney FAX: (818) 330-5818 KEVIN WILSON Director of Community Services & Water FAX: (213) 588-2761 KENNETH J. DeDARIO Director of Light & Power FAX: (213) 583-1983 DAVE TELFORD Fire Chief FAX: (213) 581-1385 LOUIS ROSENKRANTZ Police Chief FAX: (213) 581-1178 Dear Ms. Foster: Subject: Participation Agreements to the California Power Exchange Enclosed are two originals of the Meter Service Agreement for PX Participants, Software License Agreement, Terminal Fee Election and the Form of Participation Agreement to the PX Tariff. Please execute the originals and return one executed copy of each Agreement back to me as soon as possible. Thank you. Sincerely, o ge C. Somoano Assistant Director of Utilities Resource Management JCS:rmt Enclosures c: Gloria Orosco ✓ r� ,J CITY COUNCIL LEONIS C. MALBURG Mayor THOMAS A. YBARRA Mayor Pro-Tem Wm. 'BILL" DAVIS Councilman H. "LARRY" GONZALES Councilman W. MICHAEL McCORMICK Councilman BRUCE V. MALKENHORST City Administrator/City Clerk FAX: (213) 581-7924 December 15, 1998 CITY HALL 4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058 TELEPHONE (213) 583-8811 Ms. Erinn Mitz Comerica Bank -California 250 Lytton Avenue MC 4195 Palo Alto, California 94301 Dear Ms. Mitz: Subject: Comerica Escrow Agreement DAVID B. BREARLEY City Attorney FAX: (818) 330-5818 KEVIN WILSON Director of Community Services & Water FAX: (213) 588-2761 KENNETH J. DeDARIO Director of Light & Power FAX: (213) 583-1983 DAVE TELFORD Fire Chief FAX: (213) 581-1385 LOUIS ROSENKRANTZ Police Chief FAX: (213) 581-1178 Enclosed is an original executed Escrow Agreement by the City of Vernon. Please return an executed copy to my attention at the above address. I would like you to call me at (323) 583-8811, extension 248 when you receive this letter. Thank you. Sincerely, Jorge C. Somoano Assistant Director of Utilities Resource Management JCS:rmt Enclosure c: Gloria Orosco v Znnl C C� December 3, 1998 TO: Bruce V. Malkenhorst, City Administrator FROM: Kenneth J. DeDario, Director of Utilities SUBJECT: California Power Exchange Agreements Please place the following on the City Council agenda: Consideration of participation in the California Power Exchange (PX) which requires approval of various agreements including the following: • Form of Participation Agreement to the PX Tariff, • Software License Agreement and • Meter Service Agreement for PX Participants. If you have any questions or comments, please contact me. Thank you for your consideration. KJD: dm 1000 S. Fremont Ave. - A9W, Alhambra, California 91803 February 5, 1999 Mr. Jorge C. Somoano Assistant Director of Utilities City of Vernon 4305 Santa Fe Avenue Vernon, California 90058 Dear Mr. Somoano: The enclosed California Power Exchange agreements have been signed and executed. Please retain these documents for your records: ➢ PX Participant Agreement ➢ Terminal Fee Election Addendum ➢ Software License Agreement ➢ Meter Service Agreement If you have any questions please feel free to give me a call at 626-537-3368. Enclosure Sincerely, as Linda Foster Client Services Telephone: 626-537-3100 Fax: 626-537-3191 Website: www.calpx.com