Resolution No. 826210
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W.
RESOLUTION NO. 8262
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND AUTHORIZING THE EXECUTION OF
AN ESCROW AGREEMENT BY AND BETWEEN THE CITY OF
VERNON AND BNY WESTERN TRUST COMPANY REGARDING THE
MALBURG GENERATING STATION PROJECT
WHEREAS, the City of Vernon (the "City") is a municipal
corporation and a chartered city of the State of California organized
and existing under its Charter and the Constitution of the State of
California; and
WHEREAS, the City is authorized pursuant to the provisions
of its Charter and the City of Vernon Municipal Facilities Revenue
Bond Law, constituting Chapter 2, Article XI, of the Vernon City Code,
to issue bonds, notes and other obligations payable from the Net
Revenues of the Electric System (capitalized terms used herein and not
otherwise defined.shall have the meanings given such terms in the
Master Indenture mentioned below) to finance the Costs of improvements
and additions to the Electric System and to refund such bonds, notes
and other obligations; and
WHEREAS, pursuant to Resolution No. 8150 adopted by the City
Council on February 19, 2003, the City entered into an Indenture of
Trust, dated as of April 1, 2003, with BNY Western Trust Company ("BNY
Western"), as trustee, providing the terms of the Malburg Generating
Station Project Electric System Revenue Bonds to finance the costs of
improvements and additions to the Electric System or to refund any
outstanding bond or bonds; and
WHEREAS, on August 12, 2003, the Finance Committee
considered the recommendation of Bruce V. Malkenhorst, Director of
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no
Finance, dated August 7, 2003, that the City enter into an Escrow
Agreement dated as of August 4, 2003, with BNY Western to fund the
costs of improvements and additions to the Electric System and
authorize the payment of a special escrow fee of Two Thousand Dollars
and No Cents ($2,000.00) upon execution of the Agreement and annually
Ilthereafter.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council of the City of Vernon hereby
(finds and determines that the recitals contained hereinabove are true
land correct.
SECTION 2: The City Council of the City of Vernon hereby
approves the Escrow Agreement dated as of August 4, 2003, with BNY
Western Trust Company, a copy of which is attached hereto as Exhibit
"A" and made a part hereof.
SECTION 3: The City Council of the City of Vernon hereby
authorizes the City Administrator to execute said 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, the Finance Administrator, or the
Deputy City Treasurer to act as its "Authorized Officer" pursuant to
the Escrow Agreement, to execute any and all documents necessary to
implement and carry out the purposes specified in the Escrow Agreement
on behalf of the City of Vernon and to perform such other actions
deemed necessary or advisable.
SECTION 5: The City Council of the City of Vernon hereby
directs the City Clerk, or his designee, to send one fully executed
Agreement and the special escrow fee of $2,000.00 to:
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BNY Western Trust Company
Attn. Corporate Trust Department
700 South Flower, 2nd Floor
Los Angeles, CA 90017
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 27th day of August, 2003.
ATTEST
BRUCE V. MALKENHORST, City Clerk
LEONIS C. MAL RG, Uayor
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STATE OF CALIFORNIA )
) ss
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.
8262, was duly adopted by the City Council of the City of Vernon at an
adjourned regular meeting of the City Council duly held on Wednesday,
August 27, 2003, and thereafter was duly signed by the Mayor of the
City of Vernon.
(SEAL)
BRUCE V. MALKENHORST, City lerk
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EXHIBIT
VIL
ESCROW AGREEMENT
between
The City of Vernon
and
BNY WESTERN TRUST COMPANY
Dated as of August 4, 2003
ACCOUNT NUMBER 800452
City of Vernon Custody Escrow
MAESCROW.DOC
ESCROW AGREEMENT made this 4th day of August 200 3 and between BNY WESTERN TRUST
COMPANY ( "Escrow Agent" ) and the undersigned (collectively the "Depositors" and individually the
"Depositor").
Depositors and Escrow Agent hereby agree that, in consideration of the mutual promises and covenants contained
herein, Escrow Agent shall hold in escrow and shall distribute Escrow Property (as defined herein) in accordance
with and subject to the following Instructions and Terms and Conditions:
1.
2.
3.
I. INSTRUCTIONS:
Escrow Property
The property and/or funds deposited or to be deposited with Escrow Agent by Depositors shall be as
follows:
$4,160,000 Amount deposited on 8/l/03 and additional amounts to be received by city from time to time.
The foregoing property and/or funds, plus all interest, dividends and other distributions and payments
thereon (collectively the "Distributions") received by Escrow Agent, less any property and/or funds
distributed or paid in accordance with this Escrow Agreement, are collectively referred to herein as "Escrow
Property."
Investment of Escrow Property (Depositors are to select one of the following options, initial the option
selected and, if " (b) " is selected, insert the appropriate information.)
(a) Escrow Agent shall have no obligation to pay interest on or to invest or reinvest
any Escrow Property deposited or received hereunder.
X (b) Escrow Agent shall invest or reinvest Escrow Property, without distinction
between principal and income, in accordance with the following:
Wells Fargo Treasury Plus Money Market Fund
Escrow Agent shall have no liability for any loss arising from or related to any
such investment other than in accordance with paragraph 4 of the Terms and
Conditions.
Distribution of Escrow Property
Escrow Agent is directed to hold and distribute the Escrow Property in the following manner:
Upon written direction received from an "Authorized Officer" of the City of Vernon.
MAESCROW.DOC
4. Addresses
Notices, instructions and other communications shall be sent to Escrow Agent, Corporate Trust Department,
700 South Flower Street - 2nd Floor, Los Angeles, CA 90017 and to Depositors as follows:
City of Vernon, 4305 Santa Fe Avenue, Vernon, CA 90058, Attention Sharon Johnson, Deputy
City Treasurer
5. Distribution of Escrow Proverty Upon Termination
Upon termination of this Escrow Agreement, Escrow Property then held hereunder shall be distributed as
follows:
Upon written direction received from an "Authorized Officer" of the City of Vernon. .
6. Compensation
(a). At the time of execution of this Escrow Agreement, Depositors shall pay Escrow Agent Special
Escrow fee of 2,000.00 , payable upon execution of this Agreement. Said fee will be
payable annually in advance.
(b). Depositors shall pay a disbursement transaction fee of $ 35 for each disbursement
directed by Depositor.
(c). Depositors shall be responsible for and shall reimburse Escrow Agent upon demand for all
expenses, disbursements and advances incurred or made by Escrow Agent in connection with this
Agreement. In accordance with Escrow Agent's fee schedule dated as of July 23, 2003.
II. TERMS AND CONDITIONS:
The duties, responsibilities and obligations of Escrow Agent shall be limited to those expressly set forth
herein and no duties, responsibilities or obligations shall be inferred or implied. Escrow Agent shall not be
subject to, nor required to comply with, any other agreement between or among any or all of the Depositors
or to which any Depositor is a party, even though reference thereto may be made herein,, or to comply with
any direction or instruction (other than those contained herein or delivered in accordance with this Escrow
Agreement) from any Depositor or any entity acting on its behalf. Escrow Agent shall not be required to,
and shall not, expend or risk any of its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder.
2. This Agreement is for the exclusive benefit of the parties hereto and their respective successors hereunder,
and shall not be deemed to give, either express or implied, any legal or equitable right, remedy, or claim to
any other entity or person whatsoever.
If at any time Escrow Agent is served with any judicial or administrative order, judgment, decree, writ or
other form of judicial or administrative process which in any way affects Escrow Property (including but
not limited to orders of attachment or garnishment or other forms of levies or injunctions or stays relating to
the transfer of Escrow Property), Escrow Agent is authorized to comply therewith in any manner as it or its
legal counsel of its own choosing deems appropriate; and if Escrow Agent complies with any such judicial
or administrative order, judgment, decree, writ or other form of judicial or administrative process, Escrow
Agent shall not be liable to any of the parties hereto or to any other person or entity even though such order,
M\ESCROW.DOC
judgment, decree, writ or process maybe subsequently modified or vacated or otherwise determined to have
been without legal force or effect.
4. (a) Escrow Agent shall not be liable for any action taken or omitted or for any loss or injury resulting from
its actions or its performance or lack of performance of its duties hereunder in the absence of gross
negligence or willful misconduct on its part. In no event shall Escrow Agent be liable (i) for acting in
accordance with or relying upon any instruction, notice, demand, certificate or document from any
Depositor or any entity acting on behalf of any Depositor, (ii) for any consequential, punitive or special
damages, (iii) for the acts or omissions of its nominees, correspondents, designees, subagents or
subcustodians, or (iv) for an amount in excess of the value of the Escrow Property, valued as of the date of
deposit.
(b) If any fees, expenses or costs incurred by, or any obligations owed to, Escrow Agent hereunder are not
promptly paid when due, Escrow Agent may reimburse itself therefor from the Escrow Property and may
sell, convey or otherwise dispose of any Escrow Property for such purpose.
(c) As security for the due and punctual performance of any and all of Depositors' obligations to Escrow
Agent hereunder, now or hereafter arising, Depositors, individually and collectively, hereby pledge, assign
and grant to Escrow Agent a continuing security interest in, and alien on, the Escrow Property and all
Distributions thereon or additions thereto (whether such additions are the result of deposits by Depositors or
the investment of Escrow Property). The security interest of Escrow Agent shall at times be valid, perfected
and enforceable by Escrow Agent against Depositors and all third parties in accordance with the terms of
this Escrow Agreement.
(d) Escrow Agent may consult with legal counsel at the expense of the Depositors as to any matter relating
to this Escrow Agreement, and Escrow Agent shall not incur any liability in acting in good faith in
accordance with any advice from such counsel.
(e) Escrow Agent shall not incur any liability for not performing any act or fulfilling any duty, obligation or
responsibility hereunder by reason of any occurrence beyond the control of Escrow Agent (including but not
limited to any act or provision of any present or future law or regulation or governmental authority, any act
of God or war, or the unavailability of the Federal Reserve Bank wire or telex or other wire or
communication facility).
5. Unless otherwise specifically set forth herein, Escrow Agent shall proceed as soon as practicable to collect
any checks or other collection items at any time deposited hereunder. All such collections shall be subject
to Escrow Agent's usual collection practices or terms regarding items received by Escrow Agent for deposit
or collection. Escrow Agent shall not be required, or have any duty, to notify anyone of any payment or
maturity under the terms of any instrument deposited hereunder, nor to take any legal action to enforce
payment of any check, note or security deposited hereunder or to exercise any right or privilege which may
be afforded to the holder of any such security.
6. Escrow Agent shall provide to Depositors monthly statements identifying transactions, transfers or holdings
of Escrow Property and each such statement shall be deemed to be correct and final upon receipt thereof by
the Depositors unless Escrow Agent is notified in writing to the contrary within thirty (30) business days of
the date of such statement.
7. Escrow Agent shall not be responsible in any respect for the form, execution, validity, value or genuineness
of documents or securities deposited hereunder, or for any description therein, or for the identity, authority
or rights of persons executing or delivering or purporting to executor deliver any such document, security or
endorsement.
S. Notices, instructions or other communications shall be in writing and shall be given to the address set forth
in the "Addresses" provision herein (or to such other address as may be substituted therefor by written
notification to Escrow Agent or Depositors). Notices To Escrow Agent shall be deemed to be given when
MAESCROWDOC
actually received by Escrow Agent's Corporate Trust Department. Escrow Agent is authorized to comply
with and rely upon any notices, instructions or other communications believed by it to have been sent or
given by Depositors or by a person or persons authorized by Depositors. Whenever under the terms hereof
the time for giving a notice or performing an act falls upon a Saturday, Sunday, or banking holiday, such
time shall be extended to the next day on which Escrow Agent is open for business.
9. Depositors, jointly and severally, shall be liable for and shall reimburse and indemnify Escrow Agent and
hold Escrow Agent harmless and against any and all claims, losses, liabilities, costs, damages or expenses
(including reasonable attorneys' fees and expenses) (collectively, "Losses") arising from or in connection
with or related to this Escrow Agreement or being Escrow Agent hereunder (including but not limited to
Losses incurred by Escrow Agent in connection with its successful defense, in whole or in part of any claim
of gross negligence or willful misconduct on it part), provided, however, that nothing contained herein shall
require Escrow Agent to be indemnified for Losses caused by its gross negligence or willful misconduct.
10. (a) Depositors may remove Escrow Agent at any time by giving to Escrow Agent thirty (30) calendar days'
prior notice in writing signed by all Depositors. Escrow Agent, may resign at any time by giving to
Depositors thirty (30) calendar days prior written notice thereof.
(b) Within ten 00) calendar days after giving the foregoing notice of removal to Escrow Agent or receiving
the foregoing notice of resignation from Escrow Agent, all Depositors shall jointly agree on and appoint a
successor Escrow Agent. If a successor Escrow Agent has not accepted such appointment by the end of
such 10-day period, Escrow Agent may, in its sole discretion, deliver the Escrow Property to any of the
Depositors at the address provided herein or may apply to a court of competent jurisdiction for the
appointment of a successor Escrow Agent or for other appropriate relief. The costs and expenses (including
reasonable attorneys' fees and expenses) incurred by Escrow Agent in connection with such proceeding
shall be paid by, and be deemed a joint and several obligation of, the Depositors.
(c) Upon receipt of the identity of the successor Escrow Agent, Escrow Agent shall either deliver the
Escrow Property then held hereunder to the successor Escrow Agent, less Escrow Agent's fees, costs and
expenses or other obligations owed to Escrow Agent, or hold such Escrow Property (or any portion
thereof), pending distribution, until all such fees, costs and expenses or other obligations are paid.
(d) Upon delivery of the Escrow Property to successor Escrow Agent, Escrow Agent shall have no further
duties, responsibilities or obligations hereunder.
11. (a) In the event of any ambiguity or uncertainty hereunder or in any notice, instruction or other
communication received by Escrow Agent hereunder, Escrow Agent may, in its sole discretion, refrain from
taking any action other than retain possession of the Escrow Property, unless Escrow Agent receives written
instructions, signed by all Depositors, which eliminates such ambiguity or uncertainty.
(b) In the event of any dispute between or conflicting claims by or among the Depositors and/or any other
person or entity with respect to any Escrow Property, Escrow Agent shall be entitled, in its sole discretion,
to refuse to comply with any and all claims, demands or instructions with respect to such Escrow Property
so long as such dispute or conflict shall continue, and Escrow Agent shall not be or become liable in any
way to the Depositors for failure or refusal to comply with such conflicting claims, demands or instructions.
Escrow Agent shall be entitled to refuse to act until, in its sole discretion, either (i) such conflicting or
adverse claims or demands shall have been determined by a final order, judgment or decree of a court of
competent jurisdiction, which order, judgment or decree is not subject to appeal, or settled by agreement
between the conflicting parties as evidenced in a writing satisfactory to Escrow Agent or (ii) Escrow Agent
shall have received security or an indemnity satisfactory to it sufficient to hold it harmless from and against
any and all Losses which it may incur by reason of so acting. Escrow Agent may, in addition, elect, in its
sole discretion, to commence an interpleader action or seek other judicial relief or orders as it may deem, in
its sole discretion, necessary. The costs and expenses (including reasonable attorneys' fees and expenses)
incurred in connection with such proceeding shall be paid by, and shall be deemed a joint and several
obligation of, the Depositors.
WESCROW:DOC
12. This Agreement shall be interpreted, construed, enforced and administered in accordance with the internal
substantive laws (and not the choice of law rules) of the State of California. Each of the Depositors hereby
submits to the personal jurisdiction of and each agrees that all proceedings relating hereto shall be brought
in courts located within the City and State of California or elsewhere as Escrow Agent may select. Each of
the Depositors hereby waives the right to trial by jury and to assert counterclaims in any such proceedings.
To the extent that in any jurisdiction any Depositor may be entitled to claim, for itself or its assets,
immunity from suit, execution, attachment (whether before or after judgment) or other legal process, each
hereby irrevocably agrees not to claim, and hereby waives, such immunity. Each Depositor waives personal
service of process and consents to service of process by certified or registered mail, return receipt
requested, directed to it at the address last specified for notices hereunder, and such service shall be deemed
completed ten (10) calendar days after the same is so mailed.
13. Except as otherwise permitted herein, this Escrow Agreement may be modified only by a written
amendment signed by all the parties hereto, and no waiver of any provision hereof shall be effective unless
expressed in a writing signed by the party to be charged.
14. The rights and remedies conferred upon the parties hereto shall be cumulative, and the exercise or waiver of
any such right or remedy shall not preclude or inhibit the exercise of any additional rights or remedies. The
waiver of any right or remedy hereunder shall not preclude the subsequent exercise of such right or remedy.
15. Each Depositor hereby represents and wan -ants (a) that this Escrow Agreement has been duly authorized,
executed and delivered on its behalf and constitutes its legal, valid and binding obligation and (b) that the
execution, delivery and performance of this Escrow Agreement by Depositor do not and will not violate any
applicable law or regulation.
16. The invalidity, illegality or unenforceability of any provision of this Agreement shall in no way affect the
validity, legality or enforceability of any other provision; and if any provision is held to be enforceable as a
matter of law, the other provisions shall not be affected thereby and shall remain in full force and effect.
17. This Agreement shall constitute the entire agreement of the parties with respect to the subject matter and
supersedes all prior oral or written agreements in regard thereto.
18. This Agreement shall terminate upon the distribution of all Escrow Property from the Account. The
provisions of these Terms and Conditions shall survive termination of this Escrow Agreement and/or the
resignation or removal of the Escrow Agent.
19. No printed or other material in any language, including prospectuses, notices, reports., and promotional
material which mentions `BNY Western Trust Company" by name or the rights, powers, or duties of the
Escrow Agent under this Agreement shall be issued by any other parties hereto, or on such party's
behalf, without the prior written consent of Escrow Agency.
20. The headings contained in this Agreement are for convenience of reference only and shall have no effect on
the interpretation or operation hereof.
21. This Escrow Agreement may be executed by each of the parties hereto in any number of counterparts, each
of which counterpart, when so executed and delivered, shall be deemed to be an original and all such
counterparts shall together constitute one and the same agreement.
WESCROW.DOC
IN WITNESS WHEREOF, each of the parties have caused this Escrow Agreement to be executed by a dully
authorized officer as of the day and year first written above.
City of Vernon
By:
Name: Bruce V. Malkenhorst
Title: City Administrator
BNY WESTERN TRUST COANY, as Escrow Agent
By. t �----
Name: Sandee Parks
Title: Vice President
APPROVED AS TO FORM:
Eric Fresch, Legal Counsel
MAESCROWAW
$4,000,000 Custodial Services for City of Vernon Escrow Fund
CUSTODIAL SERVICES FEE SCHEDULE
ACCEPTANCE FEE Waived
This one time charge is payable at the time of the closing and includes the review and execution of
the Agreement and all documents submitted in support thereof, acceptance of the trust, and
attendance by the administrator at the pre -closing and closing, if necessary. Based upon the
transaction as described, and if you agree to use our form of Agreement, we do not anticipate the
need to hire outside counsel but reserve the right to employ counsel and bill at cost if deemed
appropriate or required.
ANNUAL ADMINISTRATION FEE $2,000.00
This annual fee is paid in advance for said period, or any portion thereof that any Bonds are
outstanding.
INVESTMENT CHART GE/per transaction $35.00
Transaction fees include the settlement, upon purchase, sale or maturity of trust funds invested
under the terms of the Trust Indenture.
INVESTMENT CHARGE/MONEY MARKET
An investment charge of thirty-seven basis points will be assessed on the average monthly balance
by the Trustee for government money market sweep investments in lieu of any investment charge on
a per transaction basis. The Trustee may also receive a service fee from the money market fund for
administrative services that would otherwise be performed by the money market fund administrator.
Should you elect to utilize the BNY Hamilton Fund, the aforementioned investment charge will be
waived.
DISBURSEMENT FEE (by check or wire) /per transaction $35.00
ANNUAL OUT-OF-POCKET EXPENSES
At Cost
Out-of-pocket expenses including, but not limited to, stationery, postage, telephone, and retention of
records will be billed annually at cost.
MISCELLANEOUS SERVICES
Out-of-pocket expenses of administrator to attend closings or special meetings, outside counsel,
accountants, special agents, etc. will be charged at the actual cost incurred. The charges for
performing services not contemplated at the time of execution of the Trust Indenture or not
specifically covered elsewhere in the Schedule will be commensurate with the service. These
extraordinary services include, but are not limited to: supplemental agreements; consent operations;
unusual releases or sinking fund redemptions; the preparation of special or interim reports which the
Trustee must submit to security holders; custody of collateral which is diversified, voluminous in
bulk or which involves the Trustee in more than the usual activity.
TERMS OF PROPOSAL
Final acceptance of the appointment as Trustee under the Trust Indenture is subject to the full
review of all documentation related hereto and acceptance by our trust committee. Trustee fees and
the estimated counsel fees may be increased if all documentation required for this financing is not in
substantially good order, an inordinate number of drafts are required, or the closing is unduly
delayed. This offer may be deemed terminated by us if we do not enter into a written agreement
within three months from the date of transmittal. Fees may be subject to adjustment during the life
of the issue.
0ASALES\PROPOSALUuty 2003\City of Vernon Custodial Services.doc
SUPPORTING
DOCUMENTS
ESCROW AGREEMENT
between
The City of Vernon
and
BNY WESTERN TRUST COMPANY
Dated as of August 4, 2003
ACCOUNT NUMBER 800452
City of Vernon Custody Escrow
MAFSCROW.DOC
ESCROW AGREEMENT made this 4th day of August 200 3 and between BNY WESTERN TRUST
COMPANY ( "Escrow Agent") and the undersigned (collectively the "Depositors" and individually the
"Depositor").
Depositors and Escrow Agent hereby agree that, in consideration of the mutual promises and covenants contained
herein, Escrow Agent shall hold in escrow and shall distribute Escrow Property (as defined herein) in accordance
with and subject to the following Instructions and Terms and Conditions:
I. INSTRUCTIONS:
Escrow Property
The property and/or funds deposited or to be deposited with Escrow Agent by Depositors shall be as
follows:
$4,160,000 Amount deposited on 8/l/03 and additional amounts to be received by city from time to time.
The foregoing property and/or funds, plus all interest, dividends and other distributions and payments
thereon (collectively the "Distributions") received by Escrow Agent, less any property and/or funds
distributed or paid in accordance with this Escrow Agreement, are collectively referred to herein as "Escrow
Property."
2. Investment of Escrow Property (Depositors are to select one of the following options, initial the option
selected and, if " (b) " is selected, insert the appropriate information.)
(a) Escrow Agent shall have no obligation to pay interest on or to invest or reinvest
any Escrow Property deposited or received hereunder.
X (b) Escrow Agent shall invest or reinvest Escrow Property, without distinction
between principal and income, in accordance with the following:
Wells Fargo Treasury Plus Money Market Fund
Escrow Agent shall have no liability for any loss arising from or related to any
such investment other than in accordance with paragraph 4 of the Terms and
Conditions.
Distribution of Escrow Property
Escrow Agent is directed to hold and distribute the Escrow Property in the following manner:
Upon written direction received from an "Authorized Officer" of the City of Vernon.
MAESCROW.DOC
Addresses
Notices, instructions and other communications shall be sent to Escrow Agent, Corporate Trust Department,
700 South Flower Street - 2nd Floor, Los Angeles, CA 90017 and to Depositors as follows:
City of Vernon, 4305 Santa Fe Avenue, Vernon, CA 90058
5. Distribution of Escrow Pro eMM Upon Termination
Upon termination of this Escrow Agreement, Escrow Property then held hereunder shall be distributed as
follows:
Upon written direction received from an "Authorized Officer" of the City of Vernon.
6. C^pm ensation
(a). At the time of execution of this Escrow Agreement, Depositors shall pay Escrow Agent Special
Escrow fee of 2,000.00 , payable upon execution of this Agreement. Said fee will be
payable annually in advance.
(b). Depositors shall pay a disbursement transaction fee of $ 35 for each disbursement
directed by Depositor.
(c). Depositors shall be responsible for and shall reimburse Escrow Agent upon demand for all
expenses, disbursements and advances incurred or made by Escrow Agent in connection with this
Agreement. In accordance with Escrow Agent's fee schedule dated as of July 23, 2003.
II. TERMS AND CONDITIONS:
The duties, responsibilities and obligations of Escrow Agent shall be limited to those expressly set forth
herein and no duties, responsibilities or obligations shall be inferred or implied. Escrow Agent shall not be
subject to, nor required to comply with, any other agreement between or among any or all of the Depositors
or to which any Depositor is a party, even though reference thereto may be made herein, or to comply with
any direction or instruction (other than those contained herein or delivered in accordance with this Escrow
Agreement) from any Depositor or any entity acting on its behalf. Escrow Agent shall not be required to,
and shall not, expend or risk any of its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder.
2. This Agreement is for the exclusive benefit of the parties hereto and their respective successors hereunder,
and shall not be deemed to give, either express or implied, any legal or equitable right, remedy, or claim to
any other entity or person whatsoever.
If at any time Escrow Agent is served with any judicial or administrative order, judgment, decree, writ or
other form of judicial or administrative process which in any way affects Escrow Property (including but
not limited to orders of attachment or garnishment or other forms of levies or injunctions or stays relating to
the transfer of Escrow Property), Escrow Agent is authorized to comply therewith in any manner as it or its
legal counsel of its own choosing deems appropriate; and if Escrow Agent complies with any such judicial
or administrative order, judgment, decree, writ or other form of judicial or administrative process, Escrow
Agent shall not be liable to any of the parties hereto or to any other person or entity even though such order,
M.\ESCROW.DOC
judgment, decree, writ or process may be subsequently modified or vacated or otherwise determined to have
been without legal force or effect.
4. (a) Escrow Agent shall not be liable for any action taken or omitted or for any loss or injury resulting from
its actions or its performance or lack of performance of its duties hereunder in the absence of gross
negligence or willful misconduct on its part. In no event shall Escrow Agent be liable (i) for acting in
accordance with or relying upon any instruction, notice, demand, certificate or document from any
Depositor or any entity acting on behalf of any Depositor, (ii) for any consequential, punitive or special
damages, (iii) for the acts or omissions of its nominees, correspondents, designees, subagents or
subcustodians, or (iv) for an amount in excess of the value of the Escrow Property, valued as of the date of
deposit.
(b) If any fees, expenses or costs incurred by, or any obligations owed to, Escrow Agent hereunder are not
promptly paid when due, Escrow Agent may reimburse itself therefor from the Escrow Property and may
sell, convey or otherwise dispose of any Escrow Property for such purpose.
(c) As security for the due and punctual performance of any and all of Depositors' obligations to Escrow
Agent hereunder, now or hereafter arising, Depositors, individually and collectively, hereby pledge, assign
and grant to Escrow Agent a continuing security interest in, and a lien on, the Escrow Property and all
Distributions thereon or additions thereto (whether such additions are the result of deposits by Depositors or
the investment of Escrow Property). The security interest of Escrow Agent shall at times be valid, perfected
and enforceable by Escrow Agent against Depositors and all third parties in accordance with the terms of
this Escrow Agreement.
(d) Escrow Agent may consult with legal counsel at the expense of the Depositors as to any matter relating
to this Escrow Agreement, and Escrow Agent shall not incur any liability in acting in good faith in
accordance with any advice from such counsel.
(e) Escrow Agent shall not incur any liability for not performing any act or fulfilling any duty, obligation or
responsibility hereunder by reason of any occurrence beyond the control of Escrow Agent (including but not
limited to any act or provision of any present or future law or regulation or governmental authority, any act
of God or war, or the unavailability of the Federal Reserve Bank wire or telex or other wire or
communication facility).
Unless otherwise specifically set forth herein, Escrow Agent shall proceed as soon as practicable to collect
any checks or other collection items at any time deposited hereunder. All such collections shall be subject
to Escrow Agent's usual collection practices or terms regarding items received by Escrow Agent for deposit
or collection. Escrow Agent shall not be required, or have any duty, to notify anyone of any payment or
maturity under the terms of any instrument deposited hereunder, nor to take any legal action to enforce
payment of any check, note or security deposited hereunder or to exercise any right or privilege which may
be afforded to the holder of any such security.
6. Escrow Agent shall provide to Depositors monthly statements identifying transactions, transfers or holdings
of Escrow Property and each such statement shall be deemed to be correct and final upon receipt thereof by
the Depositors unless Escrow Agent is notified in writing to the contrary within thirty (30) business days of
the date of such statement.
Escrow Agent shall not be responsible in any respect for the form, execution, validity, value or genuineness
of documents or securities deposited hereunder, or for any description therein, or for the identity, authority
or rights of persons executing or delivering or purporting to executor deliver any such document, security or
endorsement.
8. Notices, instructions or other communications shall be in writing and shall be given to the address set forth
in the "Addresses" provision herein (or to such other address as may be substituted therefor by written
notification to Escrow Agent or Depositors). Notices To Escrow Agent shall be deemed to be given when
MAESCROW. DOC
actually received by Escrow Agent's Corporate Trust Department. Escrow Agent is authorized to comply
with and rely upon any notices, instructions or other communications believed by it to have been sent or
given by Depositors or by a person or persons authorized by Depositors. Whenever under the terms hereof
the time for giving a notice or performing an act falls upon a Saturday, Sunday, or banking holiday, such
time shall be extended to the next day on which Escrow Agent is open for business.
9. Depositors, jointly and severally, shall be liable for and shall reimburse and indemnify Escrow Agent and
hold Escrow Agent harmless and against any and all claims, losses, liabilities, costs, damages or expenses
(including reasonable attorneys' fees and expenses) (collectively, "Losses") arising from or in connection
with or related to this Escrow Agreement or being Escrow Agent hereunder (including but not limited to
Losses incurred by Escrow Agent in connection with its successful defense, in whole or in part of any claim
of gross negligence or willful misconduct on it part), provided, however, that nothing contained herein shall
require Escrow Agent to be indemnified for Losses caused by its gross negligence or willful misconduct.
10. (a) Depositors may remove Escrow Agent at any time by giving to Escrow Agent thirty (30) calendar days'
prior notice in writing signed by all Depositors. Escrow Agent may resign at any time by giving to
Depositors thirty (30) calendar days prior written notice thereof.
(b) Within ten (10) calendar days after giving the foregoing notice of removal to Escrow Agent or receiving
the foregoing notice of resignation from Escrow Agent, all Depositors shall jointly agree on and appoint a
successor Escrow Agent. If a successor Escrow Agent has not accepted such appointment by the end of
such 10-day period, Escrow Agent may, in its sole discretion, deliver the Escrow Property to any of the
Depositors at the address provided herein or may apply to a court of competent jurisdiction for the
appointment of a successor Escrow Agent or for other appropriate relief. The costs and expenses (including
reasonable attorneys' fees and expenses) incurred by Escrow Agent in connection with such proceeding
shall be paid by, and be deemed a joint and several obligation of, the Depositors.
(c) Upon receipt of the identity of the successor Escrow Agent, Escrow Agent shall either deliver the
Escrow Property then held hereunder to the successor Escrow Agent, less Escrow Agent's fees, costs and
expenses or other obligations owed to Escrow Agent, or hold such Escrow Property (or any portion
thereof), pending distribution, until all such fees, costs and expenses or other obligations are paid.
(d) Upon delivery of the Escrow Property to successor Escrow Agent, Escrow Agent shall have no further
duties, responsibilities or obligations hereunder.
11. (a) In the event of any ambiguity or uncertainty hereunder or in any notice, instruction or other
communication received by Escrow Agent hereunder, Escrow Agent may, in its sole discretion, refrain from
taking any action other than retain possession of the Escrow Property, unless Escrow Agent receives written
instructions, signed by all Depositors, which eliminates such ambiguity or uncertainty.
(b) In the event of any dispute between or conflicting claims by or among the Depositors and/or any other
person or entity with respect to any Escrow Property, Escrow Agent shall be entitled, in its sole discretion,
to refuse to comply with any and all claims, demands or instructions with respect to such Escrow Property
so long as such dispute or conflict shall continue, and Escrow Agent shall not be or become liable in any
way to the Depositors for failure or refusal to comply with such conflicting claims, demands or instructions.
Escrow Agent shall be entitled to refuse to act until, in its sole discretion, either (i) such conflicting or
adverse claims or demands shall have been determined by a final order, judgment or decree of a court of
competent jurisdiction, which order, judgment or decree is not subject to appeal, or settled by agreement
between the conflicting parties as evidenced in a writing satisfactory to Escrow Agent or (ii) Escrow Agent
shall have received security or an indemnity satisfactory to it sufficient to hold it harmless from and against
any and all Losses which it may incur by reason of so acting. Escrow Agent may, in addition, elect, in its
sole discretion, to commence an interpleader action or seek other judicial relief or orders as it may deem, in
its sole discretion, necessary. The costs and expenses (including reasonable attorneys' fees and expenses)
incurred in connection with such proceeding shall be paid by, and shall be deemed a joint and several
obligation of, the Depositors.
WESCROW.DOC
12. This Agreement shall be interpreted, construed, enforced and administered in accordance with the internal
substantive laws (and not the choice of law rules) of the State of California. Each of the Depositors hereby
submits to the personal jurisdiction of and each agrees that all proceedings relating hereto shall be brought
in courts located within the City and State of California or elsewhere as Escrow Agent may select. Each of
the Depositors hereby waives the right to trial by jury and to assert counterclaims in any such proceedings.
To the extent that in any jurisdiction any Depositor may be entitled to claim, for itself or its assets,
immunity from suit, execution, attachment (whether before or after judgment) or other legal process, each
hereby irrevocably agrees not to claim, and hereby waives, such immunity. Each Depositor waives personal
service of process and consents to service of process by certified or registered mail, return receipt
requested, directed to it at the address last specified for notices hereunder, and such service shall be deemed
completed ten (10) calendar days after the same is so mailed.
13. Except as otherwise permitted herein, this Escrow Agreement may be modified only by a written
amendment signed by all the parties hereto, and no waiver of any provision hereof shall be effective unless
expressed in a writing signed by the party to be charged.
14. The rights and remedies conferred upon the parties hereto shall be cumulative, and the exercise or waiver of
any such right or remedy shall not preclude or inhibit the exercise of any additional rights or remedies. The
waiver of any right or remedy hereunder shall not preclude the subsequent exercise of such right or remedy.
15. Each Depositor hereby represents and warrants (a) that this Escrow Agreement has been duly authorized,
executed and delivered on its behalf and constitutes its legal, valid and binding obligation and (b) that the
execution, delivery and performance of this Escrow Agreement by Depositor do not and will not violate any
applicable law or regulation.
16. The invalidity, illegality or unenforceability of any provision of this Agreement shall in no way affect the
validity, legality or enforceability of any other provision; and if any provision is held to be enforceable as a
matter of law, the other provisions shall not be affected thereby and shall remain in full force and effect.
17. This Agreement shall constitute the entire agreement of the parties with respect to the subject matter and
supersedes all prior oral or written agreements in regard thereto.
18. This Agreement shall terminate upon the distribution of all Escrow Property from the Account. The
provisions of these Terms and Conditions shall survive termination of this Escrow Agreement and/or the
resignation or removal of the Escrow Agent.
19. No printed or other material in any language, including prospectuses, notices, reports, and promotional
material which mentions "BNY Western Trust Company" by name or the rights, powers, or duties of the
Escrow Agent under this Agreement shall be issued by any other parties hereto, or on such party's
behalf, without the prior written consent of Escrow Agency.
20. The headings contained in this Agreement are for convenience of reference only and shall have no effect on
the interpretation or operation hereof.
21. This Escrow Agreement may be executed by each of the parties hereto in any number of counterparts, each
of which counterpart, when so executed and delivered, shall be deemed to be an original and all such
counterparts shall together constitute one and the same agreement.
NU,�ESCROW.DOC
IN WITNESS WHEREOF, each of the parties have caused this Escrow Agreement to be executed by a duly
authorized officer as of the day and year first written above.
City of Vernon
Name: APPROVED AS TO FORM:
Na
Title: 9-'k
jj Eric Fresch, Legal Counsel
BNY WESTERN TRUST CO ANY, as Escrow Agent
By:
Name: Sandee Parks
Title: vice President
W ESCROW. lD YC