Resolution No. 83961
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RESOLUTION NO. 8396
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND RATIFYING THE EXECUTION OF A
PREMIUM FINANCE AGREEMENT DISCLOSURE STATEMENT AND
SECURITY AGREEMENT BY AND BETWEEN THE CITY OF
VERNON AND IMPERIAL PREMIUM FINANCE, INC., THROUGH
ARTHUR J. GALLAGHER OF TEXAS INC. FOR THE MALBURG
GENERATING STATION PROJECT
WHEREAS, the City of Vernon ("City") is constructing a 134
MW Combined Cycle Power Plant officially named the Malburg Generating
Station (the "Malburg Project") for the purpose of installing
additional generating capacity that will yield an efficient, cost-
effective, and reliable source of electric generation to the City's
linhabitants; and
WHEREAS, the City's current Builders Risk policy with Zurich
North America to reasonably cover the City's risk during the
construction of the Malburg Project, through start-up (hot testing)
and commissioning, will expire on April 25, 2004; and
WHEREAS, the City desires to purchase new policies of
insurance for the Malburg Project, financed by Imperial Premium
Finance, Inc., a subsidiary of AICCO, Inc., to protect the City for
the balance of the construction of the Malburg Project; and
WHEREAS, the City employed the services of Arthur J.
Gallagher of Texas, Inc. ("Arthur J. Gallagher") to act as the City's
broker to structure and obtain the appropriate insurance coverage; and
WHEREAS, Arthur J. Gallagher has recommended that the City
enter into an arrangement with Imperial Premium Finance, Inc., a
subsidiary of AICCO, Inc., for the provision of insurance; and
WHEREAS, in order to meet the urgent need for the insurance
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policies, the City Administrator executed a Premium Finance Agreement
Disclosure Statement and Security Agreement (the "Agreement") with
Imperial Premium Finance, Inc., through Arthur J. Gallagher, dated
February 19, 2004, and authorized payment of $89,454.68 in accordance
with the terms thereof, subject to ratification by the City Council;
land
WHEREAS, the total cost of the insurance, premium plus
finance charge is $1,073,456.16; and
WHEREAS, on February 24, 2004, the Finance Committee
considered the recommendation of Bruce V. Malkenhorst, the Director of
Finance, dated February 19, 2004, that the actions of the City
Administrator pertaining to obtaining the necessary insurance coverage
for the Malburg Project, issuing the initial payment and executing a
finance agreement with Imperial Premium Finance, Inc., which provides
for eleven monthly payments of $89,454.68 each, be ratified; and
WHEREAS, the City Council desires to approve and ratify the
Agreement, as executed by the City Administrator, the down payment of
the initial premium and the monthly payments in accordance therewith;
Iand
WHEREAS, the City Council of the City of Vernon has
determined that, pursuant to the provisions of subsection (a) of
Section 2.27 of the Vernon City Code, it is in the public interest and
necessity to ratify entering into the Agreement with Imperial Premium
(Finance, Inc.
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
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1 and correct.
2 SECTION 2: The City Council of the City of Vernon hereby
3 ratifies the execution of the Premium Finance Agreement Disclosure
4 Statement and Security Agreement with Imperial Premium Finance. Inc.,
5 a subsidiary of AICCO, Inc., a copy of which is attached hereto as
6 Exhibit "A" and made a part hereof.
7 SECTION 3: The City Council of the City of Vernon hereby
8 approves and ratifies the down payment of $89,454.68 in accordance
9 with the terms of the Agreement.
10 SECTION 4: The City Council of the City of Vernon hereby
11 authorizes the City Administrator, or his designee, to execute any and
12 all documents necessary for the purpose of securing the insurance for
13 the Malburg Project and to implement and carry out the purposes
14 specified in the Agreement, including the payment of eleven (11)
15 monthly payments in the amounts of $89,454.68 each, for, and on behalf
16 of, the City of Vernon.
17 SECTION 5: The City Council of the City of Vernon hereby
18 directs the City Clerk, or his designee, to send a copy of this
19 Resolution to:
20 Imperial Premium Finance, Inc. (Acct #04-025-880500-5)
21 c/o Cindy Stewart
Arthur J. Gallagher of Texas, Inc.
22 Energy Division
23 1900 West Loop South, Suite 1600
Houston, TX 77027
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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 3rd day of March, 2004.
ATTEST:
BRUCE V. MALKENHORST, City Clerk
EONIS C. MALBUftG, Mayor
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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.
8396, was duly adopted by the City Council of the City of Vernon at a
regular meeting of the City Council duly held on Wednesday, March 3,
2004, and thereafter was duly signed by the Mayor of the City of
Vernon.
(SEAL)
BRUCE V. MALKENHORST, City Clerk
- 5 -
EXHIBIT
PREMIUM FINANCE AGREEMENT
DISCLOSURE STATEMENT
AND SECURITY AGREEMENT
(CA License # 9739145 (AICCO, Inc.))
(C4 Lice-M-e- # 9739865 (Imperial Premium Finance, Inc.))
Imperial Premium Finance, Inc.
160 Water Street, New York, NY 10038 (212) 428-5431 or (877) 902-4242
1630 East Shaw Ave., Suite 160, Fresno, CA 93710 (559) 256-3300 or (877) 902-4242
777 South Figueroa SL,14'h FI., Los n,�geles, CA 90017 (213) 689-3600 or (87 7) 902-4242
Two Rincon Center,121 Spear St, 31d Ff., San Francisco, CA 94105 (877) 902-4242
One MacArthur Place, Suite 610, South Coast Metro, CA 92707 (714) 436-3500 or (877) 902.4242
520 Pike Street, Suite 2700, Seattle, WA 98101(206) 344-3237 or (877) 902-4242
SEE PAGE 3 FOR SCHEDULE OF FINANCED POLICIES
AGREEMENT OF INSURED (JOINT AND SEVERAL, IF MORE THAN ONE)
THE UNDERSIGNED INSURED:
In consideration of the premium payments being financed and, if applicable,
down payment being advanced by LENDER to the Insurance companies
listed on the SCHEDULE OF FINANCED POLICIES, or their representative,
promises to pay to the order of LENDER the TOTAL OF PAYMENTS to be
made in accordance with the PAYMENT SCHEDULE and if applicable, the
amount of any down payment advanced by LENDER subject to the
provisions set forth in this Agreement.
Irrevocably appoints LENDER Attomey-in-Fact with full authority, in the
event of default, to (I) cancel the said policies in accordance with the
provisions herein, (if) receive all sums assigned to LENDER and (iii) execute
and deliver on behalf of the undersigned all documents, forms and notices
relating to the insurance policies listed on the SCHEDULE OF FINANCED
POLICIES in furtherance of this Agreement.
IMPORTANT NOTICE TO INSURED
NOTICE: 1. Do not sign this Agreement before you read it or if It contains any blank
spaces. 2. You are entitled to a complete filled -in -copy of this Agreement. 3. Keep
your copy of this Agreement to protect your legal rights. 4. You are entitled to a
Spanish translation of this Agreement before signing. (Usted tiene derecho a la
vers!6n an espanol de este contrato antes de firmar).
NOTICE: See Pages 2 and 3 Additional Important Information.
THE INSURED AGREES TO THE PROVISIONS
ABOVE AND ON PAGES 2 AND 3
p
' DATE) J SIGNATURE (AND TITLE) OF INSURED(S) OR OR
BROKER ON THEIR BEHALF (to extent permitted by Law)
Bruce V. Malkenhorst, City
Administrator/City Clerk
AGENT OR BROKER Arthur J Gallagher Of Texas Inc
BUSINESS ADDRESS
1900 W Loop So
Ste 1600
Houston TX 77027
TEL. NODE -MAIL ADDRESS
The Undersigned Agent or Broker. 713-623-2330
Represents and warrants as follows: (a) to the best of the undersigned's
knowledge and belief, the insured's signature is genuine or, to the extent
permitted by applicable Law, the undersigned Agent or Broker hasbeen
authorized by the insured to sign this Agreement on their behalf, (b) all
named insureds have been disclosed to Lender (c) the insured has received
a copy of this Agreement, (d) the scheduled Policies are in full force and
effect and the premiums indicated therefore are correct, (e) the insured may
cancel all scheduled policies immediately upon request, (f) none of the
Policies scheduled in the Agreement are non -cancelable, and (g) the down
payment as indicated in Box "B" and installments due
on have been collected and are being retained by us.
Upon cancellation of any of the scheduled Policies, the undersigned Agent
or Broker agrees upon demand to pay to LENDER or its assigns their
commission on any unearned premiums applicable to the cancelled Policies.
For California business, the undersigned agent will receive from LENDER
$ for aiding in administration of premium finance agreement
relating to the above premiums.
THE AGENT OR BROKER AGREES TO THE
PROVISI 1S ABOV AND ON;IPAGE 3 ,
v ,
ATE SIGNATURE AND TITLE OF AGENT OR BROKER
IAICWEST(3I03) Page i of 3
ADDITIONAL AGREEMENTS OF INSURED (JOINT AND SEVERAL, IF MORE THAN ONE)
3. Cancellation. After the occurrence of a default in the payment of any money due the LENDER or a default consisting of a transfer to a third party of any of
the scheduled policies, LENDER may request cancellation of the insurance policies listed in the schedule upon expiration of 10 days written notice of intent to
cancel (13 days in Utah,15 days in Idaho), provided said default is not cured within such period, and LENDER may proceed to collect the entire unpaid
balance due hereunder or any part thereof by appropriate legal proceedings. If any default results in the cancellation of the Policy, Insured agrees to pay a
cancellation charge in accordance with applicable law (not applicable in NV).
4. Money Received After Cancellation. Any payment received after policy cancellation may be credited to the indebtedness due hereunder without any liability
or obligation on the part of LENDER to request reinstatement of such cancelled policy. Any sum received from an insurance company shall be credited to the
balance due hereunder, any surplus shall be paid over to the insured; in case of deficiency, the insured shall pay the same.
5. Application of Payments. If applicable law permits, all payments received by LENDER will be applied to the oldest invoice first. Any remaining amounts will
be applied to late fees and other charges (if applicable), the remainder (if any) would be applied to any other outstanding amounts.
6. Returned Check Charge. If any payment made by check is returned because the insured had no account or insufficient funds in the payor bank, insured will
be charged the maximum fee, if any, permitted under applicable law ($15 in NV).
7. Default. if any of the following happens:
a. A payment is not made when it is due;
b. A proceeding in bankruptcy, receivership, insolvency or similar proceeding is instituted by or against me; or
c. Insured fails to keep any promise the Insured makes in this Agreement;
Insured will be in default provided, however, that, to the extent required by applicable law, Insured may be held to be in default only upon the occurrence of
an event described in clause (a) above.
8. Security. To secure payment of all amounts due under this Agreement, Insured assigns LENDER a security interest in all right, title and interest to the Policy,
including (but only to the extent permitted by applicable law):
a. all money that is or may be due me because of a loss under the Policy that reduces the unearned premiums (subject to the interest of any applicable
mortgagee or loss payee);
b. any return of the premium for the Policy; and
c. dividends which may become due me in connection with the Policy.
9. Right to Demand Immediate Payment in Full. At any time after default, LENDER can demand and have the right to receive immediate payment (except to
the extent otherwise provided by applicable law, in which case LENDER will have the right to receive such payment in accordance with such law) of the total
unpaid balance due under this Agreement even if LENDER has not received any refund of unearned premium.
10. Warranties. Insured warrants to LENDER (a) to have received a copy of this Agreement and (b) if the insured is not an individual, that the signatory is
authorized to sign this Agreement on behalf of the Insured. The Insured represents that it is not presently the subject of or in contemplation of a proceeding in
bankruptcy, receivership, or insolvency, or if it is a debtor in bankruptcy, the Bankruptcy Court has authorized this transaction.
11. Early Payment. At any time, insured may pay the whole amount still unpaid. If Insured pays the full amount before if is due, Insured will be given a refund for
the unearned Finance Charge computed by the method of refund as required by applicable law.
12. Assignments. insured may not assign the Policy or this Agreement without LENDER's written consent. However, Insured does not need LENDER's written
consent to add mortgagees or other persons as loss payees. LENDER may transfer its rights under this Agreement to anyone without Insured's consent. All of
LENDER's rights sh211 inure to the benefit of LENDER's successors and assigns.
13. Collection. If money is due and Insured fails to pay, LENDER may collect the unpaid balance from me without recourse to the security interest granted under
this Agreement.
14. Late Charges. Upon default in payment of any installments for not less than five days (or such greater number of days required by applicable law), Insured
agrees to pay a late charge in accordance with applicable law. In no event shall such late charge exceed a maximum of 5% of such installment ($5 in
Montana; 2% maximum in Alaska and Oregon).
15. Finance Charge. The finance charge begins to accrue from the effective date of this Agreement or the earliest inception date of the Insurance Policy(ies)
listed on the Schedule of Policies, whichever is earlier. The finance charge shall be computed on an annual basis of twelve (12) months of 30 days each. If
LENDER terminates this Agreement due to a default Insured will pay interest on the outstanding indebtedness at the maximum rate authorized by applicable
state law in effect on the date of cancellation and from said date until Insured pays the outstanding indebtedness in full to LENDER. To the extent permitted by
applicable law, the Finance Charge may include a nonrefundable agreement charge not to exceed $20 ($10 in AK, AZ and WA; $12.50 in MT).
16. Attorney's Fees. If LENDER hires an attorney (which is not a salaried employee) to collect any money Insured owes under this Agreement, Insured will pay
that attorneys fees and other collection costs (including collectors' fees) if and to the extent permitted by applicable law (20% of outstanding balance maximum
in NV).
17. Agent or Broker. The Agent or Broker named on the front of this Agreement is neither authorized by LENDER to receive installments payable under this
Agreement nor is authorized to make any representations to insured on LENDER's behalf (except to the extent expressly required by applicable law).
18. Amendments. If the insurance contract has not been issued at the time of the signing of this Agreement, and if the policies being financed are assigned risk
policies or policies listed in a state fund, the policy numbers, if omitted herein, may be inserted in this Agreement after it has been signed.
19. Effective Date. This Agreement will not go into effect until it is accepted by LENDER in writing. In the State of California, Insured shall have the right to
disavow this Agreement for ten (10) days after acceptance by LENDER if the Agreement contained any blank space when it was executed by Insured (or on
Insured's behalf) and such blank space was subsequently filled in.
20. Limitation of Liability. Insured recognizes and agrees that LENDER is a lender and not an insurance company and that LENDER assumes no liability as an
insurer hereunder. LENDER's liability for breach of any of the terms of this Agreement or the wrongful or improper exercise of any of its powers under this
Agreement shall be limited to the amount of the principal balance outstanding, except in the event of LENDER's gross negligence or willful misconduct.
21_ Governing Laws. The law of the State of the Insured's residence shall govern this Agreement, except, for Colorado, Hawaii, Idaho and Wyoming Insureds
this contract is governed by the laws of the State of New York.
22. Signature and Acknowledgement. Insured has signed and received a copy of this Agreement. If the Insured is not an individual, the undersigned is
authorized to sign this Agreement on behalf of the Insured. All the Insureds listed in any Policy have signed. Insured acknowledges and understand that
insurance premium financing law does not require an insured to enter into a premium financing agreement as a condition of the purchase of any insurance
policy.
23. California Insured. FOR INFORMATION CONTACT THE DEPARTMENT OF CORPORATIONS, STATE OF CALIFORNIA.
24. Additional Insureds. No additional named insureds may be added to any Policy without Lenders written consent.
IAMEST0103) Page 2 of 3
— — Place (X)
If Not Authorized SCHEDULE OF POLICIES (Continue Schedule on Attachment If Necessary)
(See #4 below)
I
Policy Number and
Full Name of Insurance Company and Name and Address of
Type of
> >
Tenn
Effective Date
PrefixPolicy
I (itemized)
Issuing Agent or Company Office To Which Premium is
Policy
n
=
I in
I Policy
I
Pidd N
aanotices are Sena
premium
"'
I
Mos.
Premiums
o
cov.
IN a Y
By
Prem.
Lloyds of London*—***
PRP
0.0
12
02/15/2004
307,908.00
c/o Assigned Producer
Stamp Tax
692.79
Global Special Risks, Inc.
State Tax
9,237.24
Arch Insurance Company
PRP
0.0
12
02/15/2004
205,272.00
Stamford - CT
Stamp Tax
461.86
Global Special Risks, Inc.
State Ta
6,158.16
Commonwealth Insurance Company
PRP
0.0
12
02/15/2004
153.954.00
Seattle, WA (PO Box)
Stamp T
x
346.40
Global Special Risks, Inc.
State Ta
4,618.62
American Int'l Specialty Lns
PRP
0.0
12
02/15/2004
205,272.00
HOUSTON TX
Ciga Tax
4,105.44
Global Special Risks, Inc.
Liberty Insurance Underwriters
PRP
0.0
12
02/15/2004
153,954.00
Dallas - TX
Ciga Tax
3,079.08
Global Special Risks, Inc.
'(AR=ASSIGNED RISK), (A=AUDITABLE), (LS=LOSS SENSITIVE)
TOTAL PREMIUMS
1,055,059.59
Record in "A
ADDITIONAL: REPRESENTATIONS & WARRANTIES OF BROKER OR AGENT
Warrants that this is the authorized Policy issuing agent of the insurance companies or the broker placing the coverage directly with the insurance company on
all the Policies scheduled except those indicated with an "X" above.
Warrants that there are no policies included in this Agreement which are subject to audit, report of values, retrospective rating, or minimum earned
premium, except as indicated below, and that, if there are any, the deposit or provisional premium thereon is not less than the anticipated premium to
be earned for the full term of the policy.
Policy No.(s): Minimum earned premium, if any: $
Warrants that there are no assigned risk policies in the Schedule of Policies except as indicated in the Schedule of Policies.
The Agent or Broker will hold in trust for LENDER any payments made or credited to the Insured through the Agent or Broker directly, indirectly, actually or
constructively, by any of the insurance companies listed in the Schedule of Policies and will pay the monies to LENDER upon demand to satisfy the then
outstanding balance hereunder.
The Agent or Broker will promptly notify LENDER in writing if any information on this Agreement becomes inaccurate or if any additional named insureds are
added to the schedule of policies after this agreement is executed.
Warrants that all material information concerning the Insured and Policies has been disclosed to Lender.
IAIMEST(3M) Page 3 of 3
SUPPORTING
DOCUMENTS
0
Insured:
Imperial Premium Finance, Inc.
1630 E. Shaw Avenue
Suite 160
Fresno CA 93710
1-877-615-4242
City Of Vernon
4305 Santa Fe Ave
LOS ANGELES CA 90058-1714
City Of Vernon
4305 Santa Fe Ave
Los Angeles CA 90058
ACCOUNT NUMBER
04-025-880500-5
PAGE 1 OF 2
IMPERIAL
9cA6I
CREDITNOTICE OF ACCEPTANCEMPANrEs®
002333 N
Agent or Broker:
Arthur J Gallagher Of Texas Inc
1900 W Loop So
Ste 1600
Houston TX 77027
You will be invoiced for your payments.
TOTAL PREMIUMS
DOWN PAYMENT
AMOUNT FINANCED
FINANCE CHARGE
TOTAL OF PAYMENTS
1,055,059.59
89,454.68
965,604.91
18,396.57
984,001.48
ANNUAL % RATE
ACCEPTANCE DATE
MATURITY DATE
3.79
02/27/2004
01/15/2005
PAYMENT SCNFnl 11 F
1 st Pmt Due Date
Date
NO.
PAYABLE
PAYMENT AMOUNT
03/15/2004
15
11
Monthly
89,454.68
THE PREMIUM FINANCE AGREEMENT SUBMITTED BY YOUR INSURANCE
AGENT CONTAINS INCORRECT AND/OR INCOMPLETE INFORMATION
WITH RESPECT TO THE ITEM(S) LISTED BELOW:
THIS NOTICE CORRECTS THE ABOVE ERROR(S) AND/OR OMISSION(S)
SC14FDULF nF PnLICIFS
POLICY NUMBER
INSURANCE COMPANY
EFFECTIVE DATE
TERM
CVG
PREMIUM
Please Advise
Lloyds of London******
02/15/2004
18
BR
307,908.00
Stamp Tax
692.79
State Tax
9,237.24
Please Advise
Arch Insurance Company
02/15/2004
18
BR
205,272.00
Stamp Tax
461.86
State Tax
6,158.16
Please Advise
Commonwealth Insurance Company
02/15/2004
18
BR
153,954.00
SEE REVERSE SIDE FOR OUR CONSUMER PRIVACY POLICY.
CA 002709-000-MO-000002
PFSLGAWANSE2003
AIMI
{ Imperial Premium Finance, Inc.
1630 E. Shaw Avenue
Suite 160
Fresno CA 93710
1-877-615-4242
Insured:
City Of Vernon
4305 Santa Fe Ave
Los Angeles CA 90058
City Of Vernon
4305 Santa Fe Ave
Los Angeles CA 90058
ACCOUNT NUMBER
04-025-880500-5
PAGE 2 OF 2
IMPERIAL
A.I. CREDIT
NOTICE OF ACCEPTANCE C6MPANIEs&
Agent or Broker:
Arthur J Gallagher Of Texas Inc
1900 W Loop So
Ste 1600
Houston TX 77027
You will be invoiced for your payments.
TOTAL PREMIUMS
DOWN PAYMENT
AMOUNT FINANCED
FINANCE CHARGE
TOTAL OF PAYMENTS
1,055,059.59
89,454.68
965,604.91
18,396.57
984,001.48
ANNUAL % RATE
ACCEPTANCE DATE
MATURITY DATE
3.79
02/27/2004
01/15/2005
PAYMFNT SCI4Fnl11 F
1 st Pmt Due Date
Date
NO.
PAYABLE
PAYMENT AMOUNT
03/15/2004
15
11
Monthly
89,454.68
THE PREMIUM FINANCE AGREEMENT SUBMITTED BY YOUR IN
AGENT CONTAINS INCORRECT AND/OR INCOMPLETE INFORMATION
WITH RESPECT TO THE ITEM(S) LISTED BELOW:
THIS NOTICE CORRECTS THE ABOVE ERROR(S) AND/OR OMISSION(S)
SCHEDULE OF POLICIFS
POLICY NUMBER
INSURANCE COMPANY
EFFECTIVE DATE
TERM
CVG
PREMIUM
Stamp Tax
346.40
State Tax
4,618.62
Please Advise
American Int'l Specialty Lns
02/15/2004
18
BR
205,272.00
Ciga Tax
4,105.44
Please Advise
Liberty Insurance Underwriters
02/15/2004
18
BR
153,954.00
Ciga Tax
3,079.08
SEE REVERSE SIDE FOR OUR CONSUMER PRIVACY POLICY.
CA 002710-000-MO-WOW2
WSUSANOAPSE2W3
AIE351
CITY OF VERNON Bank1of 6/66 ica
16/66 CHECK 00214876
4305 SANTA FE AVENUE NUMBER
VERNON, CALIFORNIA 90058-0805. -
(323) 583-8811vr
,� f �, _CHECK DATE �_-'
CHECK AMOUNT
�4
02/19/04 $89,454.68
`� VOID AFTER 90 DAYS
PAY EIGHTY NINE THOUSAND FOUL ;UR DOLLARS & 68 CENTS
TO THE ARTHUR J. GALLAGHER
ORDER OF OF TEXAS INC . , v r yam'
111002L487611' i:L2200066Li: L4594"'L0483111