Resolution No. 8464a
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WE
RESOLUTION NO. 8464
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND RATIFYING THE EXECUTION OF AN
INVESTMENT AGREEMENT BY AND AMONG THE CITY OF
VERNON, BNY WESTERN TRUST COMPANY AND BAYERISCHE
LANDESBANK REGARDING 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
inhabitants; and
WHEREAS, on February 19, 2003, the City Council of the City
of Vernon adopted Resolution No. 8150 approving an Indenture of Trust,
as supplemented by a First Supplemental Indenture of Trust, a Second
Supplemental Indenture of Trust and a Third Supplemental Indenture of
Trust (collectively referred to as the "Indenture"), which established
various trust funds and accounts for the receipt and disbursement of
moneys issued pursuant to Electric System Revenue Bonds 2003 Series A,
B and C (collectively referred to as the "Bonds") for the Malburg
Project; and
WHEREAS, the City desires to enter into an agreement with
BNY Western Trust Company, Trustee of the Indenture, and Bayerische
Landesbank, acting through its New York Branch, a depository, setting
forth the terms and conditions for the investment of certain proceeds
relating to the Bonds; and
WHEREAS, in order to meet the urgent need to close the
transaction, the City Administrator executed an Investment Agreement
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(the "Agreement") with BNY Western Trust Company and Bayerische
Landesbank dated as of June 9, 2004, subject to ratification by the
(City Council; and
WHEREAS, on June 14, 2004, the Finance Committee considered
the recommendation of Bruce V. Malkenhorst, the Director of Finance,
dated June 10, 2004, that the actions of the City Administrator in
executing the Investment Agreement be ratified and authority granted
to the City Administrator to execute all necessary documents to
implement the Agreement; and
WHEREAS, the City Council desires to approve and ratify the
Agreement, as executed by the City Administrator; and
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 BNY Western Trust
Company and Bayerische Landesbank.
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
and correct.
SECTION 2: The City Council of the City of Vernon hereby
ratifies the execution of the Investment Agreement with BNY Western
Trust Company and Bayerische Landesbank, a copy of which is attached
hereto and incorporated by reference as Exhibit A.
SECTION 3: The City Council of the City of Vernon hereby
authorizes the City Administrator to execute any and all documents
necessary for the purpose of implementing and carrying out the
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purposes specified in the Agreement.
SECTION 4: The City Council of the City of Vernon hereby
directs the City Clerk, or his designee, to send a copy of this
Resolution to:
Bond Logistix LLC
Attn. A. Craig Underwood, President
777 S. Figueroa St., Suite 3200
Los Angeles, CA 90017
SECTION 5: 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 16th day of June, 2004.
ATTEST:
BRUCE V. MALKENHORST, City Clerk
LEONIS C. MALBU�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.
8464, was duly adopted by the City Council of the City of Vernon at a
regular meeting of the City Council duly held on Wednesday, June 16,
2004, and thereafter was duly signed by the Mayor of the City of
Vernon.
(SEAL)
BRUCE V. MALKENHORST, City Clerk
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EXHIBIT
" I
Bayerische Landeshank North and Latin
American Region
New York Branch
INVESTMENT AGREEMENT
THIS INVESTMENT AGREEMENT (the "Agreement") dated as of June 9,
2004 is entered into by and between BAYERISCHE LANDESBANK (the
"Depository"), acting through its New York Branch, and BNY WESTERN TRUST
COMPANY as trustee (the "Trustee"), under that Indenture of Trust, as supplemented
by a First Supplemental Indenture of Trust, a Second Supplemental Indenture of Trust
and a Third Supplemental Indenture of Trust, each dated as of April 1, 2003
(collectively, the "Indenture"), each by and between the City of Vernon (the "Issuer")
and the Trustee providing for the issuance of $162,610,000 aggregate principal
amount of the Issuer's Malburg Generating Station Project Electric System Revenue
Bonds 2003 Series A (Variable Rate Demand Bonds), 2003 Series B (Variable Rate
Demand Bonds) and 2003 Series C (Fixed Rate Bonds ) (collectively, the "Bonds").
WITNESSETH:
WHEREAS, the Indenture establishes various trust funds and accounts for the
receipt and disbursement of moneys, all as more fully set forth in the Indenture;
WHEREAS, pursuant to the Indenture, the Issuer has directed the Trustee to
invest certain moneys received by the Trustee under the Indenture with the Depository
pursuant to the terms and provisions of this Agreement; and
WHEREAS, the Depository is willing, on the terms and conditions set forth in
this Agreement, to accept the deposit of the moneys held or credited by the Trustee in
the fund (the "Fund") identified in Exhibit A to this Agreement with such amounts to
be deposited into the account (the "Account") identified in Exhibit A.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein set forth, the Depository and the Trustee hereby agree as follows:
560 Lexington Avenue
New York, N.Y. 10022, USA
WWW.BAYLBNY.COM
Phone:
212-310-9800
Telex:
177130 bayland nyk
Fax:
212-310-9841 (GENERAL)
212-310-9868 (LENDING)
212-310-9870 (TREASURY)
Swift:
BYLAUS33
Head Office:
Brienner Strasse 20
04-155049.2 80333 Munchen
BLB/City of Vernon#1821/06-04 Germany
Phone:49-89-2171-01
WWW.BLB.DE
ARTICLE I
DEPOSIT OF FUNDS
Section 1.01. Delivery of Funds. On June 10, 2004 (the "Initial Deposit Date"), the
Trustee shall deliver $44,243,238.62 (the "Invested Moneys"), such Invested Moneys
constituting all amounts held by the Trustee in the Fund on such date, and the Depository shall
accept the Invested Moneys from the Trustee. The amount deposited by the Trustee with the
Depository on the Initial Deposit Date shall be transferred by the Trustee from the Fund and shall
be deposited into the Account set forth in Exhibit A.
Section 1.02. Interest. Interest shall accrue on the daily outstanding balance of the
Invested Moneys at the rate set forth in Exhibit A (the "Rate of Earnings") on the Interest Rate
Calculation Basis set forth in Exhibit A. All interest earnings ("Earnings") shall be deposited to
the Account on each Interest Payment Date set forth in Exhibit A and thereafter shall constitute
Invested Moneys. If any Interest Payment Date is not a Business Day, Earnings will be
deposited on the first Business Day thereafter. A "Business Day" shall mean any day other than
a Saturday, Sunday or other day on which commercial banks are required or authorized to be
closed in New York, New York or Los Angeles, California or any day on which the payment
system of the Federal Reserve is not operational.
Section 1.03. Withdrawal. On each of the withdrawal dates set forth in Exhibit A (each
a "Withdrawal Date" and, collectively, the "Withdrawal Dates"), the Depository shall pay to the
Trustee such amounts as may be requested by the Trustee by delivery of a written request to the
Depository in the form of Exhibit C. The Issuer hereby represents and warrants that it
reasonably anticipates that the Invested Moneys will be withdrawn in accordance with the
procedures set forth herein on the dates and in the amounts set forth in Exhibit E. Withdrawals
may be made only for the purposes specified in the Indenture. Withdrawals may not be made
hereunder for reinvestment purposes. If any Withdrawal Date is not a Business Day, payment
will be made on the first Business Day thereafter. The Depository shall not be obligated to
permit more than one withdrawal per month under this Agreement pursuant to this Section and
shall not be obligated to permit withdrawals under this paragraph in an amount less than the
lesser of $1,000 and the remaining balance of Invested Moneys held in the Account.
Section 1.04. Form of Transfers. All fund transfers hereunder shall be made in lawful
currency of the United States of America by wire transfer of immediately available funds
pursuant to the wire transfer instructions set forth in Exhibit A for the party receiving such funds
transfer or pursuant to such other instructions as such party shall have specified by no less than
seven days' prior written notice to the other parry hereto; provided, however, that only those
individuals identified in the Certificate of Trustee, provided by the Trustee in connection with
this Agreement (the "Certificate of Trustee"), shall make changes to the Trustee's Wire
Instructions and the Depository shall have no obligation to accept such changes from any other
individuals.
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ARTICLE II
TERMINATION
The investment of Invested Moneys on deposit in the Account shall terminate on the
Termination Date set forth in Exhibit A. On the Termination Date, all Invested Moneys and
accrued but unpaid Earnings on deposit in the Account not previously withdrawn shall be paid to
the Trustee, and this Agreement shall terminate.
ARTICLE III
DEFAULT
Section 3.01. Events of Default. The following events are defaults under this
Agreement (each a "Default"):
(a) A failure by the Depository to make any payment of Invested Moneys or
Earnings when due pursuant to the provisions of this Agreement which continues for one
Business Day following' receipt by the Depository of written notice thereof from the
Trustee.
(b) If the Depository commences a case in bankruptcy relating to it, is
adjudicated an insolvent or bankrupt, petitions or applies for the appointment of any
receiver or trustee for itself or any substantial part of its property; or initiates any
proceeding relating to it under any reorganization, arrangement, or dissolution under
applicable bankruptcy laws; or if any such proceeding is initiated against it and if the
Depository indicates in any manner its consent thereto or if such proceeding is not
dismissed within 90 days.
(c) A failure by the Depository to perform any of its obligations under this
Agreement (other than those described in Section 3.01(a)) which continues for 10
Business Days or more after written notice thereof is given by the Trustee to the
Depository.
Section 3.02. Rights and Obligations of Parties Upon Default.
(a) Upon the occurrence of a Default under Section 3.01(a) or Section 3.01(b)
of this Agreement, the Trustee, upon providing the Depository with seven days' prior
written notice in the form of Exhibit C, may withdraw all Invested Moneys and unpaid
Earnings from the Depository. Upon the occurrence of a Default under Section 3.01(c) of
this Agreement or at any time thereafter as such Default remains uncured, the Trustee
may cause to be delivered to the Depository a notice setting forth the existence of a
Default in accordance with Section 3.01(c) above (the "Notice of Default"). If such
Default under Section 3.01(c) is not cured prior to the close of business of the tenth
Business Day following delivery of the Notice of Default, the Trustee shall have the
right, in addition to any other rights and remedies, to withdraw all Invested Moneys and
unpaid Earnings from the Depository exercised by delivery of written notice to the
Depository in the form of Exhibit C.
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BLB/City of Vernon# 1821/06-04 3
(b) If the Trustee elects to withdraw Invested Moneys and Earnings pursuant
to the preceding paragraph, and is able to reinvest such funds with another entity pursuant
to an agreement, the terms and conditions of which are substantially identical to this
Agreement and the substitution of which does not adversely affect the investment rating,
if any, assigned to the Bonds, the Trustee shall so invest the withdrawn Invested Moneys
and accrued Earnings. If the Trustee is not able to reinvest the withdrawn Invested
Moneys and Earnings in such a manner, the Trustee shall invest said funds upon the best
terms and conditions which it may obtain through the exercise of reasonable efforts, in
which case the Depository shall pay to the Trustee on each date on which Invested
Moneys would have been withdrawn hereunder the difference between (i) the amounts
which would have been payable hereunder with respect to all such funds on such
Withdrawal Date had such funds been left on deposit through the Termination Date and
(ii) the amounts actually realized by the Trustee through each such date of calculation.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Trustee's Representations and Warranties. The Trustee represents and
warrants to the Depository that: (a) on the date hereof the Trustee has delivered to the Depository
the Certificate of Trustee which specifies the representatives of the Trustee authorized to act on
its behalf hereunder which Certificate of Trustee has been duly executed and delivered on behalf
of the Trustee; (b) this Agreement has been executed on behalf of the Trustee by one of its duly
authorized representatives identified in the Certificate of Trustee and constitutes a valid and
binding obligation of the Trustee; (c) to the best of its knowledge, the execution, delivery and
performance of this Agreement by the Trustee does not and will not result in a breach or
violation of or cause a default under any provision of any law, regulation, order, license, decree,
judgment, indenture, contract or agreement binding upon the Trustee or its assets; (d) all moneys
that the Trustee invests with the Depository pursuant to this Agreement shall be derived from
funds and accounts established pursuant to the Indenture; and (e) the Trustee is authorized by the
Indenture to make all investments on the terms hereunder.
Section 4.02. Depository's Representations and Warranties. The Depository
represents and warrants to the Trustee that: (a) this Agreement has been executed on behalf of
the Depository by its duly authorized representatives and constitutes a valid and binding
obligation of the Depository; (b) to the best of its knowledge, the execution, delivery and
performance of this Agreement by the Depository does not and will not result in a breach or
violation of or cause a default under any provision of any law, regulation, order, license, decree,
judgment, indenture, contract or agreement binding upon the Depository or its assets; (c) the
obligations of the Depository to repay the Invested Moneys and Earnings hereunder are
supported by the Anstaltslast and the Gewahrtragerhaftung provided by the Free State of
Bavaria; and (d) the obligations of the Depository to repay the Invested Moneys and Earnings
hereunder ranks on a parity with other deposits held by the Depository and the other unsecured
and unsubordinated obligations of the Depository.
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ARTICLE V
ROLE OF THE DEPOSITORY
It is expressly understood and agreed that in performing its obligations neither the
Depository nor any of its directors, officers, employees or agents is acting as a fiduciary or agent
of the Trustee, the Issuer, the owners of the Bonds or any other party, and neither the Depository
nor any of its directors, officers, employees or agents shall be liable or responsible for: (a) the
payment of any amounts owing on or with respect to the Bonds; (b) the use or application by the
Trustee of any moneys payable to the Trustee hereunder; (c) any acts or omissions of the Trustee
under or with respect to the Bonds or the Indenture; (d) the validity or enforceability of the
Bonds or the Indenture; (e) the tax treatment of interest paid on the Bonds; or (f) the Trustee's
performance of its obligations under this Agreement, the Indenture, the Bonds or any other
agreement or instrument relating to the Bonds or their issuance (collectively, the "Bond
Documents"). Without limiting the foregoing, regardless of whether the Depository has
reviewed the Indenture or is generally familiar with the terms of indentures of a similar type, the
Depository shall have no duty to comply with the terms of the Indenture or to ascertain whether
the Trustee is in compliance therewith. The Trustee recognizes that the Depository may have
other business relationships with the Issuer and with other entities or persons party to any of the
Bond Documents. The Trustee shall maintain complete and accurate records identifying the
principal amount of Invested Moneys and Earnings thereon.
ARTICLE VI
REIMBURSEMENT
If at any time during the term of this Agreement the Trustee shall fail to make any
deposits required under Section 1.01 or shall make withdrawals other than those permitted under
Section 1.02, Section 1.03, Section 3.02 or Section 7.11, the Trustee and the Issuer hereby jointly
and severally agree to promptly reimburse the Depository in an amount equal to (a) the penalties,
losses, costs, expenses, damages and other charges incurred by the Depository as a result of the
breaking by the Depository of its deposit(s) or other funding arrangements or (b) in the case of a
withdrawal, an amount equal to seven days' interest on the amount withdrawn, calculated at the
Rate of Earnings if such amount is greater than the amount computed in accordance with
clause (a) of this sentence. A certificate as to the amount of such penalties, losses, costs,
expenses, damages and other charges submitted by the Depository to the Trustee and the Issuer
shall be conclusive, absent manifest error as to the amount thereof.
ARTICLE VII
MISCELLANEOUS
Section 7.01. Information .Regarding the Depository. Each of the Trustee and the
Issuer hereby agrees that it will not, nor will it permit any other person to, include in any offering
circular, information memorandum or other description of the Bonds any information relating to
the Depository without the Depository's prior written consent.
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Section 7.02. Indemnity. The Issuer hereby agrees to protect, indemnify, pay and hold
the Depository and its directors, officers, employees and agents harmless from and against any
and all claims, demands, liabilities, damages, losses, costs, charges and expenses, including,
without limitation, reasonable attorneys' fees and expenses which the Depository or its directors,
officers, employees or agents may incur or be subject to as a consequence of. (a) the receipt by
the Depository of the Invested Moneys; (b) the release by the Depository of the Invested Moneys
and Earnings at the time, in the amounts and to the places specified in or pursuant to this
Agreement; (c) the payment by the Depository of Earnings in accordance with the terms of this
Agreement; (d) any breach by the Trustee, the Issuer or any other party to any of the Bond
Documents or this Agreement or any of the Bond Documents or by which the obligations of the
parties concerned in connection with the issuance and payment of such Bonds are determined;
and (e) defense of any legal action to challenge the validity of this Agreement or any of the other
documentation referred to above. The obligations of the Issuer under the preceding sentence
shall survive the termination of this Agreement. Notwithstanding anything to the contrary
contained in the immediately preceding two sentences, the Issuer shall not have any obligation to
indemnify the Depository in respect of any liability incurred by the Depository arising solely out
of the gross negligence or willful misconduct of the Depository.
Section 7.03. No Waiver; Amendments. No failure or delay on the part of the
Depository or the Trustee in exercising any right or remedy hereunder shall operate as a waiver
thereof other than as provided in Section 7.11; nor shall any single or partial exercise of any such
right or remedy preclude any other right or remedy. The rights and remedies of the Depository
or the Trustee hereunder are cumulative and are not exclusive of any rights or remedies provided
by law or equity or in any other contract between the Trustee and the Depository. None of the
terms or provisions of this Agreement may be waived, modified or amended, except in writing
duly signed by the Depository and the Trustee. This Agreement completely sets forth the
agreement among the Depository, the Trustee and the Issuer and fully supersedes all prior
agreements, both written and oral, among the Depository, the Trustee and the Issuer relating to
all matters set forth herein.
Section 7.04. Notices. Any notices or other communications to be given under this
Agreement shall be given to the recipient at the address set forth in Exhibit A in writing by
personal service, by registered or certified mail, postage prepaid, by facsimile transmission, wire,
mailgram or telegram, or by courier service or messenger. Notice shall be deemed given only
upon actual receipt thereof by the party to which it is directed. Any party referenced in
Exhibit A may change the address to which notices are to be sent at any time by delivery of
proper notice of such change to the other parties referenced in Exhibit A in the manner described
in this Section.
Section 7.05. Survival. All warranties and representations made by the Trustee or the
Depository in this Agreement or in any of the instruments or documents delivered pursuant to
this Agreement, regardless of any investigation made, shall be considered to have been relied
upon by the other party hereto and shall survive the delivery of any instruments or documents.
Section 7.06. Successors and Assigns. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors, assigns and beneficiaries.
Notwithstanding the foregoing, this Agreement, and the obligations arising out of this Agreement
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or any part hereof, shall not be sold, pledged, assigned or otherwise transferred by any party
hereto without the prior written consent of the other parties hereto and any such attempted sale,
pledge, assignment or transfer shall be void ab initio; provided, however, that any successor to
the Trustee as trustee under the Indenture shall be considered a successor in interest to the
Trustee with respect to this Agreement without the necessity of obtaining the prior written
consent of the Depository. The Trustee and any successor trustee shall give prompt written
notice to the Depository of the appointment of any successor trustee.
Section 7.07. Applicable Law. PURSUANT TO SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW (OR ANY SUCCESSOR STATUTE
THERETO), THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK AND OF THE
UNITED STATES OF AMERICA.
Section 7.08. No FDIC Insurance. The deposit(s) made pursuant to this Agreement are
not insured by the Federal Deposit Insurance Corporation.
Section 7.09. Counterparts. This Agreement may be executed in several counterparts
and, as so executed, shall constitute one agreement binding upon all of the parties hereto.
Section 7.10. Contractual Relationship with Trustee. The deposit(s) made pursuant to
this Agreement with the Depository are made by BNY Western Trust Company solely in its
capacity as trustee under the Indenture, and the parties hereto recognize that this Agreement is a
contractual arrangement entered into between the Depository and the Trustee, solely in its
capacity as trustee under the Indenture, and the Depository shall have no obligation to the
holders of the Bonds or to any person other than the Trustee with respect to the deposit(s) made
hereunder. This Agreement and all documents executed by the Trustee in connection with this
Agreement shall be executed by duly authorized representatives designated in or pursuant to the
Certificate of Trustee.
Section 7.11. Downgrade.
(a) If the rating assigned to the Obligations (as defined below) falls below "Aa3" by
Moody's Investors Service, Inc. ("Moody's") or "AA-" by Standard & Poor's Ratings Services,
a division of the McGraw-Hill Companies, Inc. ("S&P"), during the term of this Agreement, the
Depository may, at the Depository's option, within 10 Business Days of the Depository's
receipt of written notice of Downgrade, take one or more of the following actions: (A) provide
written evidence from S&P or Moody's that the obligation of the Depository to make payments
such as those under this Agreement is rated equal to or higher than the ratings specified in this
Section 7.11(a); (B) assign this Agreement to a substitute provider with ratings equal to or
higher than the ratings specified in this Section 7.11(a); (C) take any other action mutually
agreed to by the Trustee, the Issuer and the Depository; or (D) enter into a repurchase
agreement, or such other agreement as is mutually acceptable to the Depository and the Trustee,
with the Trustee upon the same terms and conditions (with appropriate changes in terminology)
as are set forth in Exhibit A, pursuant to which the Depository shall sell and deliver to and agree
to repurchase from the Trustee U.S. government obligations of the type set forth in Exhibit D
(the "Securities"), having a market value not less than the applicable percentage amount "(the
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"Required Percentage") set forth on Exhibit D of the then outstanding Invested Moneys and
accrued but unpaid Earnings. Upon each repurchase of Securities by the Depository, the
Trustee shall deliver to the Depository such portion of the Securities (the "Excess Securities")
as is necessary such that the ratio of (x) the market value of Securities remaining in the
possession of the Trustee after delivery of the Excess Securities to the Depository to (y) the then
outstanding Invested Moneys and accrued but unpaid Earnings, shall equal the Required
Percentage. The value of the Securities shall be marked to market weekly, with a cure period of
two Business Days for delivery of additional securities and one Business Day for redelivery of
Excess Securities.
(b) If the Depository does not provide written evidence from S&P or Moody's or take
such other action as permitted in Section 7.11(a), the Trustee shall thereafter have the right, but
not the obligation, to terminate this Agreement by providing the Depository with seven days'
prior written notice in the form of Exhibit C, in which case on the withdrawal date specified in
such notice the Depository shall pay to the Trustee all Invested Moneys and Earnings accrued,
but unpaid, to the date of such withdrawal. Neither the Trustee, the Issuer nor any other person
shall have any recourse against and the Depository shall have no liability for its failure to provide
written evidence or take such other action as permitted in Section 7.11(a) other than as provided
in this Section 7.11(b). If the Trustee does not exercise its right to terminate this Agreement
pursuant to this Section 7.11(b) within 60 days of the commencement of such right to terminate,
such right shall be deemed waived.
(c) If the rating assigned to the Obligations (as defined below) falls below "AT' by
Moody's or "A-" by S&P during the term of this Agreement, the Depository shall provide
written notice to the Trustee of such downgrade within 10 Business Days after the Depository's
receipt of written notice of such occurrence. Following such downgrade, upon receipt of notice
a written notice (the "Section 7.1 l(c) Request Notice") from the Trustee requesting that the
Depository take action under this Section 7.11(c) the Depository shall have the right, but not the
obligation, exercised at the Depository's option, to (i) provide written evidence from S&P or
Moody's that the obligation of the Depository to make payments such as those under this
Agreement is rated equal to or higher than the ratings specified in this Section 7.11(c) or
(ii) take any other action mutually agreed to by the Trustee, the Issuer and the Depository. If
the Depository does not provide written evidence from S&P or Moody's or take such other
action as permitted in this Section 7.11(c) within 10 Business Days after the Depository's
receipt of a Section 7.11(c) Request Notice, the Trustee shall thereafter have the right, but not
the obligation, to terminate this Agreement by providing the Depository with seven days' prior
written notice in the form of Exhibit C, in which case on the withdrawal date specified in such
notice the Depository shall pay to the Trustee all Invested Moneys and Earnings accrued, but
unpaid, to the date of such withdrawal. Neither the Trustee, the Issuer nor any other person
shall have recourse against and the Depository shall have no liability for its failure to take one
or more of the actions permitted by clause (i) and (ii) of this Section 7.11(c) other than as
provided in this Section 7.11(c). If the Trustee does not exercise its right to terminate this
Agreement pursuant to this Section 7.11(c) within 60 days of the commencement of such right
to terminate, such right shall be deemed waived.
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"Obligations" means only those senior unsecured long-term debt obligations of the
Depository which benefit from the support of the Anstaltslast (maintenance obligation) and the
Gewahrtragerhaftung (guarantee obligation) provided by the Free State of Bavaria.
Section 7.12. Certain Prohibited Actions. The Issuer shall not (a) agree with any
person to exercise, refrain from exercising or waive any call, tender or redemption feature of the
Bonds or (b) sell or grant to or permit the sale or grant to any third party an instrument granting
to the holder thereof any rights relating to the exercise or waiver of any call, tender or
redemption feature of the Bonds.
Section 7.13. Notice to Depository of Refunding. The Issuer or the Trustee shall
immediately notify the Depository in writing as soon as any action is taken to effect a partial or
complete refunding of the Bonds.
Section 7.14. Consent to Jurisdiction and Venue, Etc. Pursuant to, and in accordance
with, Section 5-1402 of the New York General Obligations Law (or any successor statute
thereto), the Issuer, the Trustee and the Depository irrevocably (a) agree that any suit, action or
other legal proceeding arising out of or relating to this Agreement may be brought in a court of
record in the State of New York located in the Borough of Manhattan or in the United States
District Court for the Southern District of the State of New York located in the Borough of
Manhattan, (b) consent to the jurisdiction of each such court in any such suit, action or
proceeding, and (c) waive any objection which it may have to the laying of venue of any such
suit, action or proceeding in any of such courts and any claim that any such suit, action or
proceeding has been brought in an inconvenient forum. The Issuer, the Trustee and the
Depository also irrevocably consent to the service of any and all process in any action or
proceeding by mailing of copies of such process to the Issuer, the Trustee or the Depository, as
applicable, at its respective address provided in Exhibit A. The Issuer, the Trustee and the
Depository agree that a final judgment in any suit, action or proceeding shall be conclusive and
may be enforced in appropriate jurisdictions by suit on the judgment or in any other manner
provided by law. All mailings under this Section 7.14 shall be by certified mail, return receipt
requested.
Section 7.15. Amendments. The Issuer and the Trustee hereby agree that it shall not
enter into, or consent to, or request that the Issuer or Trustee, as applicable, enter into, or consent
to, any amendment or modification of any of the Bond Documents to which it is a party that
could impair the rights of the Depository or the ability of the Issuer or the Trustee to perform
their obligations to the Depository hereunder without the express written consent of the
Depository; provided, however, that nothing contained herein shall restrict the Issuer's ability to
issue additional bonds under the Indenture.
Section 7.16. Information on the Bonds. The Issuer and the Trustee shall, upon the
request of the Depository, promptly provide information regarding the Bonds and amounts held
in the funds and accounts related thereto as the Depository may request and such other
information that the Depository deems necessary to determine the Issuer's or the Trustee's
compliance with the terms of this Agreement.
04-155049.2
BLB/City of Vernon# 1821/06-04 9
Section 7.17. Direction to Trustee. By its execution hereof, the Issuer authorizes and
directs the Trustee to execute and deliver this Agreement and to perform its obligations as set
forth in this Agreement.
Section 7.18. Monthly Reports. The Depository shall provide monthly reports to the
Trustee and the Issuer, by the fifteenth day of each month, setting forth, as of the end of the
preceding month, the amount of Invested Moneys held hereunder and the accrued but unpaid
Earnings thereon.
Section 7.19. Interpretation. Unless otherwise provided herein, all references herein to
any Section shall constitute a reference to the corresponding Section of this Agreement and all
references herein to any Exhibit shall constitute a reference to the corresponding Exhibit attached
to this Agreement. All words used herein shall be construed to be of such gender or number as
the circumstances require. Each of the parties hereto represents that it has reviewed this
Agreement and has had an opportunity to negotiate to amend or modify its terms, and
accordingly, the rule of construction that any ambiguities are to be resolved against the drafting
party or parties shall not be employed in the interpretation of this Agreement.
Section 7.20. Incorporation of Certificate of Trustee by Reference. All terms and
conditions enumerated in the Certificate of Trustee are hereby incorporated into this Agreement.
Remainder of page intentionally left blank
04-155049.2
BCB/City of Vemon#1821/06-04 10
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the date and year first written above.
BAYERISCHE LANDESBANK
By 4!" 9(Ae
Authod'zed-Sign46ry
By
Authorized ignatory
BNY WESTERN TRUST COMPANY, as
Trustee
By _
Name
Title
The undersigned consents to the execution, delivery and performance of this Agreement,
hereby represents and warrants that this Agreement constitutes a permitted investment under the
Indenture and applicable law and agrees to the provisions of Article VI and Sections 1.03, 7.01,
7.02, 7.07, 7.12, 7.13, 7.14, 7.15, 7.16 and 7.17.
CITY OF VERNON
By _
Name
Title
04-155049.2
BLB/City of Vernon#1821/06-04 11
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the date and year first written above.
BAYERISCHE LANDESBANK
91
Authorized Signatory
Authorized Signatory
BNY WESTERN TRUST COMPANY, as
Trustee
B
Y
Name FE R TUZ N
Title ASSISTANT TREASURER
The undersigned consents to the execution, delivery and performance of this Agreement,
hereby represents and warrants that this Agreement constitutes a permitted investment under the
Indenture and applicable law and agrees to the provisions of Article VI and Sections 1.03, 7.01,
7.02, 7.07, 7.12, 7.13, 7.14, 7.15, 7.16 and 7.17.
CITY OF VERNON
By
Name
Title
04-155049.2 11
BLB/City of Vemon# 1821/06-04
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the date and year first written above.
BAYERISCHE LANDESBANK
LIM
Authorized Signatory
Authorized Signatory
BNY WESTERN TRUST COMPANY, as
Trustee
By_
Name
Title
The undersigned consents to the execution, delivery and performance of this Agreement,
hereby represents and warrants that this Agreement constitutes a permitted investment under the
Indenture and applicable law and agrees to the provisions of Article VI and Sections 1.03, 7.01,
7.02, 7.07, 7.12, 7.13, 7.14, 7.15, 7.16 and 7.17.
CITY OF VERNON
By
Name Bruce V. Malkenhorst
Title City Administrator City Clerk
APPROVED AS TO F
Fre ch, City Attorney
04-155049.2
BLB/City of Vernon#1821/06-04 11
EXHIBIT A
The Depository: Bayerische Landesbank
New York Branch
560 Lexington Avenue
New York, NY 10022
Attention: Ms. Elizabeth Roman/Ms. Pamela Dizon
Telephone: (212) 310-9891
Facsimile: (212) 310-9870
Wire Instructions: Account: The Chase Manhattan Bank
ABA #: 021-000-021
Account #: 544-7-07960
Account: Bayerische Landesbank, New York Branch
Ref: City of Vernon, 2003 Series A, B & C
CUSIP No.: 2003 Series A — 924397AN2
2003 Series B — 924397AP7
2003 Series C — 924397 BL5
The Trustee: BNY Western Trust Company
BNY Western Trust Company
Suite 500
700 South Flower Street
Los Angeles, CA 90017
Attention: Aurora Quiazon
Telephone: (213) 630-6236
Facsimile: (213) 630-6215
Wire Instructions: The Bank of New York
ABA #: 021 000 018
GLA: 111-565
Account #: 800212
Account Name: City of Vernon, Electric Sys. Ser A, B & C
The Issuer: City of Vernon
4305 Santa Fe Avenue
Vernon, CA 90058
Attention: Eric Fresch, Esq.
Telephone: (323) 588-8811, x175
Facsimile: (323) 826-1491
Interest Payment Dates:
04-155049.2
BLB/City of Vemon#1821/06-04
The first Business Day of
Business Day of July, 2004.
Account.
each month, commencing the first
All Earnings shall be deposited to the
Interest Rate
Calculation Basis: 360-day year made up of twelve 30-day months.
Account: Construction Account
Funds: 2003 Construction Fund (as created pursuant to Section 5.03 of the
First Supplemental Indenture of Trust).
Initial Principal Amount: $44,243,238.62
Rate of Earnings: 1.86% per annum
Withdrawal Dates: On any Business Day upon receipt by the Depository of at least
seven days' prior written notice from the Trustee in the form of
Exhibit C, which notice shall specify the purpose, amount and date
of such withdrawal.
Termination Date: The first to occur of (a) a withdrawal of all Invested Moneys on
deposit in this Account, (b) the date on which no Bonds remain
outstanding, or (c) July 1, 2005.
04-155049.2
BLB/City of Vemon# 1821/06-04 A-2
EXHIBIT B
RESERVED
04-155049.2
BLB/City of Vernon# 1821/06-04
EXHIBIT C
FORM OF WITHDRAWAL NOTICE
[DATE]
Bayerische Landesbank
New York Branch
560 Lexington Avenue
New York, NY 10022
Attention: Ms. Elizabeth Roman
Ms. Pamela Dizon
Re: Investment Agreement dated as of June 9, 2004 (the "Agreement") by and
between BNY Western Trust Company, as Trustee, and Bayerische Landesbank,
acting through its'New York Branch (the "Depository") relating to City of Vernon
Malburg Generating Station Project Electric System Revenue Bonds, 2003 Series
A,B&C
Dear Mmes. Roman and Dizon:
The Trustee hereby requests the withdrawal of Invested Moneys on the Withdrawal Date,
from the Account in the amounts specified below:
Withdrawal Date:
Withdrawal Amount: $
Account Number:
[TRUSTEE - check as appropriate]
This withdrawal is requested pursuant to:
Section 1.03 of the Agreement;
Section 3.02 of the Agreement due to the occurrence of a Default and
this notice constitutes the termination notice referenced in that Section;
Section 7.11 due to the downgrade of the Depository and this notice
constitutes the termination notice referenced in that Section;
04-155049.2
BLB/City of Vemon# 1821/06-04
Trustee's Wire Instructions:
The Bank of New York
ABA #: 021 000 018
GLA: 111-565
Account #: 800212
Account Name: City of Vernon, Electric Sys. Ser A, B & C
The Trustee hereby represents and warrants that the withdrawal hereby requested is
permitted under this Agreement. The undersigned hereby represents and warrants that the
undersigned is authorized to make this withdrawal pursuant to the Certificate of Trustee.
Capitalized terms used herein and not defined shall have the meanings given to such terms in the
Agreement.
Sincerely,
BNY WESTERN TRUST COMPANY, as
Trustee
By_
Name
Title
04-155049.2
BLB/City of Vemon# 1821/06-04 C-2
EXHIBIT D
Securities
Required Percentage
1. Direct obligations of the United States
(including obligations issued or held in
book -entry form on the books of the
Department of the Treasury, and CATS and
TIGRS) or obligations the principal of and
interest on which are unconditionally
guaranteed by the United States of America. 104%
2. Bonds, debentures, notes or other evidence of
indebtedness issued or guaranteed by any of
the following federal agencies and provided
such obligations are backed by the full faith
and credit of the United States (stripped
securities are only permitted if they have been
stripped by the agency itself): (i) Farmers
Home Administration ("FmHA") Certificates
of beneficial ownership; (ii) Federal Housing
Administration Debentures ("FHA"); (iii)
General Services Administration Participation
certificates; (iv) Government National
Mortgage Association ("GNMA") guaranteed
mortgage -backed bonds and guaranteed pass -
through obligations (participation certificates);
(v) United States Maritime Administration
Guaranteed Title XI financing; (vi) United
States Department of Housing and Urban
Development Project Notes and Local 104%
Authority Bonds.
04-155049.2
BLB/City of Vernon# 1821/06-04
3. Bonds, debentures, notes or other evidence of
indebtedness issued or guaranteed by any of
the following non -full faith and credit United
States government agencies (stripped securities
are only permitted if they have been stripped
by the agency itself): (i) Federal Home Loan
Mortgage Corporation ("FHLMC")
Participation Certificates and Senior debt
obligations; and (ii) Federal National Mortgage
Association ("FNMA") Mortgage -backed
securities and senior debt obligations (excluded
are stripped mortgage securities which are
valued greater than par on the portion of unpaid
principal). 105%
4. Cash 100%
04-155049.2
BLB/City of Vernon# 1821/06-04
EXHIBIT E
ANTICIPATED WITHDRAWAL SCHEDULE
CONSTRUCTION ACCOUNT
Date
06/01/2004
07/01 /2004
08/01 /2004
09/01 /2004
10/01 /2004
11 /01 /2004
12/01 /2004
01 /01 /2005
02/01 /2005
03/01/2005
04/01 /2005
05/01/2005
06/01/2005
07/01 /2005
04-155049.2
BLB/City of Vemon# 1821/06-04
Amount
$2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
4,124,318
4,124,318
4,124,318
4,124,318
4,124,318
4,124,318
4,124,318
4,124,316
SUPPORTING
DOCUMENTS
Bayerische Landesbank North and Latin
American Region
New York Branch
INVESTMENT AGREEMENT
THIS INVESTMENT AGREEMENT (the "Agreement") dated as of June 9,
2004 is entered into by and between BAYERISCHE LANDESBANK (the
"Depository"), acting through its New York Branch, and BNY WESTERN TRUST
COMPANY as trustee (the "Trustee"), under that Indenture of Trust, as supplemented
by a First Supplemental Indenture of Trust, a Second Supplemental Indenture of Trust
and a Third Supplemental Indenture of Trust, each dated as of April 1, 2003
(collectively, the "Indenture"), each by and between the City of Vernon (the "Issuer")
and the Trustee providing for the issuance of $162,610,000 aggregate principal
amount of the Issuer's Malburg Generating Station Project Electric System Revenue
Bonds 2003 Series A (Variable Rate Demand Bonds), 2003 Series B (Variable Rate
Demand Bonds) and 2003 Series C (Fixed Rate Bonds) (collectively, the "Bonds").
WITNESSETH:
WHEREAS, the Indenture establishes various trust funds and accounts for the
receipt and disbursement of moneys, all as more fully set forth in the Indenture;
WHEREAS, pursuant to the Indenture, the Issuer has directed the Trustee to
invest certain moneys received by the Trustee under the Indenture with the Depository
pursuant to the terms and provisions of this Agreement; and
WHEREAS, the Depository is willing, on the terms and conditions set forth in
this Agreement, to accept the deposit of the moneys held or credited by the Trustee in
the fund (the "Fund") identified in Exhibit A to this Agreement with such amounts to
be deposited into the account (the "Account") identified in Exhibit A.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein set forth, the Depository and the Trustee hereby agree as follows:
560 Lexington Avenue
New York, N.Y. 10022, USA
W W W.BAYLBNY.COM
,
Phone:
212-310-9800
Telex:
177130 bayland nyk
Fax:
212-310-9841 (GENERAL)
212-310-9868 (LENDING)
212-310-9870 (TREASURY)
Swift:
BYLAUS33
Head Office:
Bnenner Stresee 20
04-155049.2 80333 Munchen
BLB/Ci of Vernon#1821/06-04 Germany
�' Phone: 49-69-2171-01
W W W.BLB.DE
ARTICLE I
DEPOSIT OF FUNDS
Section 1.01. Delivery of Funds. On June 10, 2004 (the "Initial Deposit Date"), the
Trustee shall deliver $44,243,238.62 (the "Invested Moneys"), such Invested Moneys
constituting all amounts held by the Trustee in the Fund on such date, and the Depository shall
accept the Invested Moneys from the Trustee. The amount deposited by the Trustee with the
Depository on the Initial Deposit Date shall be transferred by the Trustee from the Fund and shall
be deposited into the Account set forth in Exhibit A.
Section 1.02. Interest. Interest shall accrue on the daily outstanding balance of the
Invested Moneys at the rate set forth in Exhibit A (the "Rate of Earnings") on the Interest Rate
Calculation Basis set forth in Exhibit A. All interest earnings ("Earnings") shall be deposited to
the Account on each Interest Payment Date set forth in Exhibit A and thereafter shall constitute
Invested Moneys. If any Interest Payment Date is not a Business Day, Earnings will be
deposited on the first Business Day thereafter. A "Business Day" shall mean any day other than
a Saturday, Sunday or other day on which commercial banks are required or authorized to be
closed in New York, New York or Los Angeles, California or any day on which the payment
system of the Federal Reserve is not operational.
Section 1.03. Withdrawal. On each of the withdrawal dates set forth in Exhibit A (each
a "Withdrawal Date" and, collectively, the "Withdrawal Dates"), the Depository shall pay to the
Trustee such amounts as may be requested by the Trustee by delivery of a written request to the
Depository in the form of Exhibit C. The Issuer hereby represents and warrants that it
reasonably anticipates that the Invested Moneys will be withdrawn in accordance with the
procedures set forth herein on the dates and in the amounts set forth in Exhibit E. Withdrawals
may be made only for the purposes specified in the Indenture. Withdrawals may not be made
hereunder for reinvestment purposes. If any Withdrawal Date is not a Business Day, payment
will be made on the first Business Day thereafter. The Depository shall not be obligated to
permit more than one withdrawal per month under this Agreement pursuant to this Section and
shall not be obligated to permit withdrawals under this paragraph in an amount less than the
lesser of $1,000 and the remaining balance of Invested Moneys held in the Account.
Section 1.04. Form of Transfers. All fund transfers hereunder shall be made in lawful
currency of the United States of America by wire transfer of immediately available funds
pursuant to the wire transfer instructions set forth in Exhibit A for the party receiving such funds
transfer or pursuant to such other instructions as such party shall have specified by no less than
seven days' prior written notice to the other party hereto; provided, however, that only those
individuals identified in the Certificate of Trustee, provided by the Trustee in connection with
this Agreement (the "Certificate of Trustee"), shall make changes to the Trustee's Wire
Instructions and the Depository shall have no obligation to accept such changes from any other
individuals.
04-155049.2
BLB/City of Vernon#1821/06-04 2
ARTICLE II
TERMINATION
The investment of Invested Moneys on deposit in the Account shall terminate on the
Termination Date set forth in Exhibit A. On the Termination Date, all Invested Moneys and
accrued but unpaid Earnings on deposit in the Account not previously withdrawn shall be paid to
the Trustee, and this Agreement shall terminate.
ARTICLE III
DEFAULT
Section 3.01. Events of Default. The following events are defaults under this
Agreement (each a "Default"):
(a) A failure by the Depository to make any payment of Invested Moneys or
Earnings when due pursuant to the provisions of this Agreement which continues for one
Business Day following receipt by the Depository of written notice thereof from the
Trustee.
(b) If the Depository commences a case in bankruptcy relating to it, is
adjudicated an insolvent or bankrupt, petitions or applies for the appointment of any
receiver or trustee for itself or any substantial part of its property; or initiates any
proceeding relating to it under any reorganization, arrangement, or dissolution under
applicable bankruptcy laws; or if any such proceeding is initiated against it and if the
Depository indicates in any manner its consent thereto or if such proceeding is not
dismissed within 90 days.
(c) A failure by the Depository to perform any of its obligations under this
Agreement (other than those described in Section 3.01(a)) which continues for 10
Business Days or more after written notice thereof is given by the Trustee to the
Depository.
Section 3.02. Rights and Obligations of Parties Upon Default.
(a) Upon the occurrence of a Default under Section 3.01(a) or Section 3.01(b)
of this Agreement, the Trustee, upon providing the Depository with seven days' prior
written notice in the form of Exhibit C, may withdraw all Invested Moneys and unpaid
Earnings from the Depository. Upon the occurrence of a Default under Section 3.01(c) of
this Agreement or at any time thereafter as such Default remains uncured, the Trustee
may cause to be delivered to the Depository a notice setting forth the existence of a
Default in accordance with Section 3.01(c) above (the "Notice of Default"). If such
Default under Section 3.01(c) is not cured prior to the close of business of the tenth
Business Day following delivery of the Notice of Default, the Trustee shall have the
right, in addition to any other rights and remedies, to withdraw all Invested Moneys and
unpaid Earnings from the Depository exercised by delivery of written notice to the
Depository in the form of Exhibit C.
04-155049.2
BLB/City of Vernon# 1821/06-04 3
(b) If the Trustee elects to withdraw Invested Moneys and Earnings pursuant
to the preceding paragraph, and is able to reinvest such funds with another entity pursuant
to an agreement, the terms and conditions of which are substantially identical to this
Agreement and the substitution of which does not adversely affect the investment rating,
if any, assigned to the Bonds, the Trustee shall so invest the withdrawn Invested Moneys
and accrued Earnings. If the Trustee is not able to reinvest the withdrawn Invested
Moneys and Earnings in such a manner, the Trustee shall invest said funds upon the best
terms and conditions which it may obtain through the exercise of reasonable efforts, in
which case the Depository shall pay to the Trustee on each date on which Invested
Moneys would have been withdrawn hereunder the difference between (i) the amounts
which would have been payable hereunder with respect to all such funds on such
Withdrawal Date had such funds been left on deposit through the Termination Date and
(ii) the amounts actually realized by the Trustee through each such date of calculation.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Trustee's Representations and Warranties. The Trustee represents and
warrants to the Depository that: (a) on the date hereof the Trustee has delivered to the Depository
the Certificate of Trustee which specifies the representatives of the Trustee authorized to act on
its behalf hereunder which Certificate of Trustee has been duly executed and delivered on behalf
of the Trustee; (b) this, Agreement has been executed on behalf of the Trustee by one of its duly
authorized representatives identified in the Certificate of Trustee and constitutes a valid and
binding obligation of the Trustee; (c) to the best of its knowledge, the execution, delivery and
performance of this Agreement by the Trustee does not and will not result in a breach or
violation of or cause a default under any provision of any law, regulation, order, license, decree,
judgment, indenture, contract or agreement binding upon the Trustee or its assets; (d) all moneys
that the Trustee invests with the Depository pursuant to this Agreement shall be derived from
funds and accounts established pursuant to the Indenture; and (e) the Trustee is authorized by the
Indenture to make all investments on the terms hereunder.
Section 4.02. Depository's Representations and Warranties. The Depository
represents and warrants to the Trustee that: (a) this Agreement has been executed on behalf of
the Depository by its duly authorized representatives and constitutes a valid and binding
obligation of the Depository; (b) to the best of its knowledge, the execution, delivery and
performance of this Agreement by the Depository does not and will not result in a breach or
violation of or cause a default under any provision of any law, regulation, order, license, decree,
judgment, indenture, contract or agreement binding upon the Depository or its assets; (c) the
obligations of the Depository to repay the Invested Moneys and Earnings hereunder are
supported by the Anstaltslast and the Gewahrtragerhaftung provided by the Free State of
Bavaria; and (d) the obligations of the Depository to repay the Invested Moneys and Earnings
hereunder ranks on a parity with other deposits held by the Depository and the other unsecured
and unsubordinated obligations of the Depository.
04-155049.2
BLB/City of Vernon#1821/06-04 4
ARTICLE V
ROLE OF THE DEPOSITORY
It is expressly understood and agreed that in performing its obligations neither the
Depository nor any of its directors, officers, employees or agents is acting as a fiduciary or agent
of the Trustee, the Issuer, the owners of the Bonds or any other party, and neither the Depository
nor any of its directors, officers, employees or agents shall be liable or responsible for: (a) the
payment of any amounts owing on or with respect to the Bonds; (b) the use or application by the
Trustee of any moneys payable to the Trustee hereunder; (c) any acts or omissions of the Trustee
under or with respect to the Bonds or the Indenture; (d) the validity or enforceability of the
Bonds or the Indenture; (e) the tax treatment of interest paid on the Bonds; or (f) the Trustee's
performance of its obligations under this Agreement, the Indenture, the Bonds or any other
agreement or instrument relating to the Bonds or their issuance (collectively, the "Bond
Documents"). Without limiting the foregoing, regardless of whether the Depository has
reviewed the Indenture or is generally familiar with the terms of indentures of a similar type, the
Depository shall have no duty to comply with the terms of the Indenture or to ascertain whether
the Trustee is in compliance therewith. The Trustee recognizes that the Depository may have
other business relationships with the Issuer and with other entities or persons parry to any of the
Bond Documents. The Trustee shall maintain complete and accurate records identifying the
principal amount of Invested Moneys and Earnings thereon.
ARTICLE VI
REIMBURSEMENT
If at any time during the term of this Agreement the Trustee shall fail to make any
deposits required under Section 1.01 or shall make withdrawals other than those permitted under
Section 1.02, Section 1.03, Section 3.02 or Section 7.11, the Trustee and the Issuer hereby jointly
and severally agree to promptly reimburse the Depository in an amount equal to (a) the penalties,
losses, costs, expenses, damages and other charges incurred by the Depository as a result of the
breaking by the Depository of its deposit(s) or other funding arrangements or (b) in the case of a
withdrawal, an amount equal to seven days' interest on the amount withdrawn, calculated at the
Rate of Earnings if such amount is greater than the amount computed in accordance with
clause (a) of this sentence. A certificate as to the amount of such penalties, losses, costs,
expenses, damages and other charges submitted by the Depository to the Trustee and the Issuer
shall be conclusive, absent manifest error as to the amount thereof.
ARTICLE VII
MISCELLANEOUS
Section 7.01. Information Regarding the Depository. Each of the Trustee and the
Issuer hereby agrees that it will not, nor will it permit any other person to, include in any offering
circular, information memorandum or other description of the Bonds any information relating to
the Depository without the Depository's prior written consent.
04-155049.2
BLB/City of Vemon# 1821/06-04 5
Section 7.02. Indemnity. The Issuer hereby agrees to protect, indemnify, pay and hold
the Depository and its directors, officers, employees and agents harmless from and against any
and all claims, demands, liabilities, damages, losses, costs, charges and expenses, including,
without limitation, reasonable attorneys' fees and expenses which the Depository or its directors,
officers, employees or agents may incur or be subject to as a consequence of. (a) the receipt by
the Depository of the Invested Moneys; (b) the release by the Depository of the Invested Moneys
and Earnings at the time, in the amounts and to the places specified in or pursuant to this
Agreement; (c) the payment by the Depository of Earnings in accordance with the terms of this
Agreement; (d) any breach by the Trustee, the Issuer or any other parry to any of the Bond
Documents or this Agreement or any of the Bond Documents or by which the obligations of the
parties concerned in connection with the issuance and payment of such Bonds are determined;
and (e) defense of any legal action to challenge the validity of this Agreement or any of the other
documentation referred to above. The obligations of the Issuer under the preceding sentence
shall survive the termination of this Agreement. Notwithstanding anything to the contrary
contained in the immediately preceding two sentences, the Issuer shall not have any obligation to
indemnify the Depository in respect of any liability incurred by the Depository arising solely out
of the gross negligence or willful misconduct of the Depository.
Section 7.03. No Waiver; Amendments. No failure or delay on the part of the
Depository or the Trustee in exercising any right or remedy hereunder shall operate as a waiver
thereof other than as provided in Section 7.11; nor shall any single or partial exercise of any such
right or remedy preclude any other right or remedy. The rights and remedies of the Depository
or the Trustee hereunder are cumulative and are not exclusive of any rights or remedies provided
by law or equity or in any other contract between the Trustee and the Depository. None of the
terms or provisions of this Agreement may be waived, modified or amended, except in writing
duly signed by the Depository and the Trustee. This Agreement completely sets forth the
agreement among the Depository, the Trustee and the Issuer and fully supersedes all prior
agreements, both written and oral, among the Depository, the Trustee and the Issuer relating to
all matters set forth herein.
Section 7.04. Notices. Any notices or other communications to be given under this
Agreement shall be given to the recipient at the address set forth in Exhibit A in writing by
personal service, by registered or certified mail, postage prepaid, by facsimile transmission, wire,
mailgram or telegram, or by courier service or messenger. Notice shall be deemed given only
upon actual receipt thereof by the party to which it is directed. Any party referenced in
Exhibit A may change the address to which notices are to be sent at any time by delivery of
proper notice of such change to the other parties referenced in Exhibit A in the manner described
in this Section.
Section 7.05. Survival. All warranties and representations made by the Trustee or the
Depository in this Agreement or in any of the instruments or documents delivered pursuant to
this Agreement, regardless of any investigation made, shall be considered to have been relied
upon by the other party hereto and shall survive the delivery of any instruments or documents.
Section 7.06. Successors and Assigns. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors, assigns and beneficiaries.
Notwithstanding the foregoing, this Agreement, and the obligations arising out of this Agreement
04-155049.2
BLB/City of Vemon#1821/06-04 6
or any part hereof, shall not be sold, pledged, assigned or otherwise transferred by any party
hereto without the prior written consent of the other parties hereto and any such attempted sale,
pledge, assignment or transfer shall be void ab initio; provided, however, that any successor to
the Trustee as trustee under the Indenture shall be considered a successor in interest to the
Trustee with respect to this Agreement without the necessity of obtaining the prior written
consent of the Depository. The Trustee and any successor trustee shall give prompt written
notice to the Depository of the appointment of any successor trustee.
Section 7.07. Applicable Law. PURSUANT TO SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW (OR ANY SUCCESSOR STATUTE
THERETO), THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK AND OF THE
UNITED STATES OF AMERICA.
Section 7.08. No FDIC Insurance. The deposit(s) made pursuant to this Agreement are
not insured by the Federal Deposit Insurance Corporation.
Section 7.09. Counterparts. This Agreement may be executed in several counterparts
and, as so executed, shall constitute one agreement binding upon all of the parties hereto.
Section 7.10. Contractual Relationship with Trustee. The deposit(s) made pursuant to
this Agreement with the Depository are made by BNY Western Trust Company solely in its
capacity as trustee under the Indenture, and the parties hereto recognize that this Agreement is a
contractual arrangement entered into between the Depository and the Trustee, solely in its
capacity as trustee under the Indenture, and the Depository shall have no obligation to the
holders of the Bonds or to any person other than the Trustee with respect to the deposit(s) made
hereunder. This Agreement and all documents executed by the Trustee in connection with this
Agreement shall be executed by duly authorized representatives designated in or pursuant to the
Certificate of Trustee.
Section 7.11. Downgrade.
(a) If the rating assigned to the Obligations (as defined below) falls below "Aa3" by
Moody's Investors Service, Inc. ("Moody's") or "AA-" by Standard & Poor's Ratings Services,
a division of the McGraw-Hill Companies, Inc. ("S&P"), during the term of this Agreement, the
Depository may, at the Depository's option, within 10 Business Days of the Depository's
receipt of written notice of Downgrade, take one or more of the following actions: (A) provide
written evidence from S&P or Moody's that the obligation of the Depository to make payments
such as those under this Agreement is rated equal to or higher than the ratings specified in this
Section 7.11(a); (B) assign this Agreement to a substitute provider with ratings equal to or
higher than the ratings specified in this Section 7.11(a); (C) take any other action mutually
agreed to by the Trustee, the Issuer and the Depository; or (D) enter into a repurchase
agreement, or such other agreement as is mutually acceptable to the Depository and the Trustee,
with the Trustee upon the same terms and conditions (with appropriate changes in terminology)
as are set forth in Exhibit A, pursuant to which the Depository shall sell and deliver to and agree
to repurchase from the Trustee U.S. government obligations of the type set forth in Exhibit D
(the "Securities"), having a market value not less than the applicable percentage amount (the
04-155049.2
BLB/City of Vemon# 1821/06-04 7
"Obligations" means only those senior unsecured long-term debt obligations of the
Depository which benefit from the support of the Anstaltslast (maintenance obligation) and the
Gewahrtragerhaftung (guarantee obligation) provided by the Free State of Bavaria.
Section 7.12. Certain Prohibited Actions. The Issuer shall not (a) agree with any
person to exercise, refrain from exercising or waive any call, tender or redemption feature of the
Bonds or (b) sell or grant to or permit the sale or grant to any third party an instrument granting
to the holder thereof any rights relating to the exercise or waiver of any call, tender or
redemption feature of the Bonds.
Section 7.13. Notice to Depository of Refunding. The Issuer or the Trustee shall
immediately notify the Depository in writing as soon as any action is taken to effect a partial or
complete refunding of the Bonds.
Section 7.14. Consent to Jurisdiction and Venue, Etc. Pursuant to, and in accordance
with, Section 5-1402 of the New York General Obligations Law (or any successor statute
thereto), the Issuer, the Trustee and the Depository irrevocably (a) agree that any suit, action or
other legal proceeding arising out of or relating to this Agreement may be brought in a court of
record in the State of New York located in the Borough of Manhattan or in the United States
District Court for the Southern District of the State of New York located in the Borough of
Manhattan, (b) consent to the jurisdiction of each such court in any such suit, action or
proceeding, and (c) waive any objection which it may have to the laying of venue of any such
suit, action or proceeding in any of such courts and any claim that any such suit, action or
proceeding has been brought in an inconvenient forum. The Issuer, the Trustee and the
Depository also irrevocably consent to the service of any and all process in any action or
proceeding by mailing of copies of such process to the Issuer, the Trustee or the Depository, as
applicable, at its respective address provided in Exhibit A. The Issuer, the Trustee and the
Depository agree that a final judgment in any suit, action or proceeding shall be conclusive and
may be enforced in appropriate jurisdictions by suit on the judgment or in any other manner
provided by law. All mailings under this Section 7.14 shall be by certified mail, return receipt
requested.
Section 7.15. Amendments. The Issuer and the Trustee hereby agree that it shall not
enter into, or consent to, or request that the Issuer or Trustee, as applicable, enter into, or consent
to, any amendment or modification of any of the Bond Documents to which it is a parry that
could impair the rights of the Depository or the ability of the Issuer or the Trustee to perform
their obligations to the Depository hereunder without the express written consent of the
Depository; provided, however, that nothing contained herein shall restrict the Issuer's ability to
issue additional bonds under the Indenture.
Section 7.16. Information on the Bonds. The Issuer and the Trustee shall, upon the
request of the Depository, promptly provide information regarding the Bonds and amounts held
in the funds and accounts related thereto as the Depository may request and such other
information that the Depository deems necessary to determine the Issuer's or the Trustee's
compliance with the terms of this Agreement.
04-155049.2
BLB/City of Vernon# 1821/06-04 9
Section 7.17. Direction to Trustee. By its execution hereof, the Issuer authorizes and
directs the Trustee to execute and deliver this Agreement and to perform its obligations as set
forth in this Agreement.
Section 7.18. Monthly Reports. The Depository shall provide monthly reports to the
Trustee and the Issuer, by the fifteenth day of each month, setting forth, as of the end of the
preceding month, the amount of Invested Moneys held hereunder and the accrued but unpaid
Earnings thereon.
Section 7.19. Interpretation. Unless otherwise provided herein, all references herein to
any Section shall constitute a reference to the corresponding Section of this Agreement and all
references herein to any Exhibit shall constitute a reference to the corresponding Exhibit attached
to this Agreement. All words used herein shall be construed to be of such gender or number as
the circumstances require. Each of the parties hereto represents that it has reviewed this
Agreement and has had an opportunity to negotiate to amend or modify its terms, and
accordingly, the rule of construction that any ambiguities are to be resolved against the drafting
party or parties shall not be employed in the interpretation of this Agreement.
Section 7.20. Incorporation of Certificate of Trustee by Reference. All terms and
conditions enumerated in the Certificate of Trustee are hereby incorporated into this Agreement.
Remainder of page intentionally left blank
04-155049.2
BLB/City of Vernon# 1821/06-04 10
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the date and year first written above.
BAYERISCHE LANDESBANK
LM
Authorized Signatory
Authorized Signatory
BNY WESTERN TRUST COMPANY, as
Trustee
By_
Name
Title
The undersigned consents to the execution, delivery and performance of this Agreement,
hereby represents and warrants that this Agreement constitutes a permitted investment under the
Indenture and applicable law and agrees to the provisions of Article VI and Sections 1.03, 7.01,
7.02, 7.07, 7.12, 7.13, 7.14, 7.15, 7.16 and 7.17.
CITY OF VERNON
By% -
-
Name Bruce V. Malkenhorst
Title City Administrator City Clerk
APPROVED AS FORM:
.
Eric T. Fr sch, City Attorney
04-155049.2
BLB/City of Vemon#1821/06-04 11
PIN 1��
IN WITNESS WHEREOF, the parties hereto have caused this Agree j U N
executed and delivered as of the date and year first written above. LEGAL DEFT.
BAYERISCHE LANDESBANI
7T
By 4�AO
Authorized SignAkry
By
Authorized ignatory
BNY WESTERN TRUST COMPANY, as
Trustee
By
Name
Title
The undersigned consents to the execution, delivery and performance of this Agreement,
hereby represents and warrants that this Agreement constitutes a permitted investment under the
Indenture and applicable law and agrees to the provisions of Article VI and Sections 1.03, 7.01,
7.02, 7.07, 7.12, 7.13, 7.14, 7.15, 7.16 and 7.17.
CITY OF VERNON
By _
Name
Title
04-155049.2
BLB/City of Vemon#1821/06-04 11
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the date and year first written above.
BAYERISCHE LANDESBANK
M.
Authorized Signatory
Authorized Signatory
BNY WESTERN TRUST COMPANY, as
Trustee
By
Name FE R TUZ N
Title ASSISTANT TREASURER
The undersigned consents to the execution, delivery and performance of this Agreement,
hereby represents and warrants that this Agreement constitutes a permitted investment under the
Indenture and applicable law and agrees to the provisions of Article VI and Sections 1.03, 7.01,
7.02, 7.07, 7.12, 7.13, 7.14, 7.15, 7.16 and 7.17.
CITY OF VERNON
By —
Name
Title
04-155049.2 11
BLB/City of Vemon# 1821/06-04
EXHIBIT A
The Depository: Bayerische Landesbank
New York Branch
560 Lexington Avenue
New York, NY 10022
Attention: Ms. Elizabeth Roman/Ms. Pamela Dizon
Telephone: (212) 310-9891
Facsimile: (212) 310-9870
Wire Instructions: Account: The Chase Manhattan Bank
ABA #: 021-000-021
Account #: 544-7-07960
Account: Bayerische Landesbank, New York Branch
Ref.: City of Vernon, 2003 Series A, B & C
CUSIP No.: 2003 Series A — 924397AN2
2003 Series B — 924397AP7
2003 Series C — 924397 BL5
The Trustee: BNY Western Trust Company
BNY Western Trust Company
Suite 500
700 South Flower Street
Los Angeles, CA 90017
Attention: Aurora Quiazon
Telephone: (213) 630-6236
Facsimile: (213) 630-6215
Wire Instructions: The Bank of New York
ABA #: 021 000 018
GLA: 111-565
Account #: 800212
Account Name: City of Vernon, Electric Sys. Ser A, B & C
The Issuer : City of Vernon
4305 Santa Fe Avenue
Vernon, CA 90058
Attention: Eric Fresch, Esq.
Telephone: (323) 588-8811, x175
Facsimile: (323) 826-1491
Interest Payment Dates:
04-155049.2
BLB/City of Vemon# 1821/06-04
The first Business Day of
Business Day of July, 2004.
Account.
each month, commencing the first
All Earnings shall be deposited to the
Interest Rate
Calculation Basis: 360-day year made up of twelve 30-day months.
Account: Construction Account
Funds: 2003 Construction Fund (as created pursuant to Section 5.03 of the
First Supplemental Indenture of Trust).
Initial Principal Amount: $44,243,238.62
Rate of Earnings: 1.86% per annum
Withdrawal Dates: On any Business Day upon receipt by the Depository of at least
seven days' prior written notice from the Trustee in the form of
Exhibit C, which notice shall specify the purpose, amount and date
of such withdrawal.
Termination Date: The first to occur of (a) a withdrawal of all Invested Moneys on
deposit in this Account, (b) the date on which no Bonds remain
outstanding, or (c) July 1, 2005.
04-155049.2,
BLB/City of Vernon#1821/06-04 A-2
EXHIBIT B
RESERVED
04-155049.2
BLB/City of Vernon# 1821/06-04
EXHIBIT C
FORM OF WITHDRAWAL NOTICE
[DATE]
Bayerische Landesbank
New York Branch
560 Lexington Avenue
New York, NY 10022
Attention: Ms. Elizabeth Roman
Ms. Pamela Dizon
Re: Investment Agreement dated as of June 9, 2004 (the "Agreement") by and
between BNY Western Trust Company, as Trustee, and Bayerische Landesbank,
acting through its New York Branch (the "Depository") relating to City of Vernon
Malburg Generating Station Project Electric System Revenue Bonds, 2003 Series
A,B&C
Dear Mmes. Roman and Dizon:
The Trustee hereby requests the withdrawal of Invested Moneys on the Withdrawal Date,
from the Account in the amounts specified below:
Withdrawal Date:
Withdrawal Amount: S
Account Number:
[TRUSTEE - check as appropriate]
This withdrawal is requested pursuant to:
Section 1.03 of the Agreement;
Section 3.02 of the Agreement due to the occurrence of a Default and
this notice constitutes the termination notice referenced in that Section;
Section 7.11 due to the downgrade of the Depository and this notice
constitutes the termination notice referenced in that Section;
04-155049.2
BLB/City of Vernon#1821/06-04
Trustee's Wire Instructions:
The Bank of New York
ABA #: 021 000 018
GLA: 111-565
Account #: 800212
Account Name: City of Vernon, Electric Sys. Ser A, B & C
The Trustee hereby represents and warrants that the withdrawal hereby requested is
permitted under this Agreement. The undersigned hereby represents and warrants that the
undersigned is authorized to make this withdrawal pursuant to the Certificate of Trustee.
Capitalized terms used herein and not defined shall have the meanings given to such terms in the
Agreement.
Sincerely,
BNY WESTERN TRUST COMPANY, as
Trustee
By_
Name
Title
04-155049.2
BLB/City of Vernon# 1821/06-04 C-2
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SUPPORTING
DOCUMENTS
CERTIFICATE OF
BAYERISCHE LANDESBANK
We, the undersigned officers of Bayerische Landesbank (the "Provider") HEREBY
CERTIFY in connection with the Investment Agreement between BNY Western Trust Company,
as trustee and the Provider dated as of June 9, 2004 (the "Agreement") that:
(a) the yield on the Agreement is at least equal to the yield offered by the
Provider on the date the Provider offered to enter into the Agreement on reasonably
comparable investment contracts offered to other persons, if any, funded from a source of
funds other than gross proceeds of an issue of tax-exempt bonds;
(b) neither the Provider nor any party related to the Provider has a material
interest in the tax-exempt bonds being issued by the City of Vernon (the "Issuer") in
connection with the purchase of the Agreement other than as provider of the Agreement;
(c) the Provider was not afforded the opportunity to review bids to the Issuer
from other providers before making its bid to the Issuer;
(d) the Provider did not consult with any other potential provider about its bid
prior to submission of its bid to the Issuer;
(e) the Provider's bid was determined without regard to any other formal or
informal agreement, other than the Request for Bids given to the Provider on behalf of
the Issuer, that the Provider has with the Issuer or any other person (whether or not in
connection with the bonds being issued by the Issuer);
(f) the Provider's bid was not submitted solely as a courtesy to the Issuer or to
any other person for purposes of satisfying the bidding requirements of
Section 1.148-5(d)(6)(iii)(B)(1) or (2) of the U.S. Treasury Regulations relating to the
yield and valuation of investments in connection with tax-exempt bonds;
(g) the Provider has established an industry reputation as a competitive
provider of agreements such as the Agreement; and
(h) the amount of administrative costs that are reasonably expected to be paid
by the Provider to third parties in connection with the Agreement is $30,000 plus the
normal and customary fees of counsel to the Provider. For purposes of this certification,
administrative costs include all brokerage or selling commissions paid by the Provider to
third parties in connection with the Agreement, legal or accounting fees, investment
advisory fees, recordkeeping, safekeeping, custody and other similar costs or expenses.
04-155018.1
City of Vernon/BLB#1821 - 06/04
Dated this 9th day of June, 2004.
By
Authorize atory
By
Authorized Signatory
04-155018.1
City of VemonBLB#1821 - 06/04
CERTIFICATE OF TRUSTEE
The undersigned, a duly authorized officer of BNY Western Trust Company (the
"Trustee"), in connection with the Investment Agreement between the Trustee and Bayerische
Landesbank (the "Depository") dated as of June 9, 2004 (the "Agreement"), HEREBY
CERTIFIES that the persons whose names, titles and signatures appear below are duly qualified
and acting representatives of the Trustee on the date hereof. Each holds the office set forth
beside his\her name, and the signature appearing opposite his\her name is the genuine signature
of such representative. Only these individuals, or such additional individuals as the undersigned
may designate by prior written notice to the Depository in the future, shall execute documents on
behalf of the Trustee in connection with the Agreement. The Depository shall not be obligated
to accept documents executed by any individual other than those listed below or designated in
the future.
Name
TERESA PETTA
GONZALO UREY
FE R. TUZON
Title
VICE PRESIDENT
ASSISTANT VICE
Signature
h
PRESIDENT
ASSISTANT TREASURER ` ) -�
Capitalized terms used herein and not otherwise defined shall have the meaning assigned
in the Agreement.
The Trustee acknowledges that it is the standard policy of the Depository to require
original signed hard copies of notices. The Trustee further acknowledges that the Depository
will accept facsimile requests only if the Trustee acknowledges and assumes all risks relating to
the use of such facsimile notices. The Trustee hereby acknowledges and assumes all risks
relating to the sending of notices by facsimile.
[Remainder of Page Left Intentionally Blank]
IN WITNESS WHEREOF, the undersigned has executed this Certificate for and on
behalf of the Trustee this 9`h day of June, 2004.
BNY WESTERN TRUST COMPANY, as
Trustee
By
Name FjK R. zoN
Title ASSISTANT TREASURER
2
7. JUN, 2004 17:07
BAYERNLB ALLG. RECHT
NR.;I6
S. 2
9 Bayerische
Landesbank
BNY Western Trust Company, as Trustee
Suite 500
700 South Flower Street
Los Angeles, CA 90017
City of Vernon, as Issuer
4305 Santa Fe Avenue
Vernon, CA 90058
Ladies and Gentlemen,
Munich, June 9, 2004
You have requested the opinion of Bayerische Landesbank (the `Bank")
acting through its Legal Services Division in connection with the execution and
delivery of the Investment Agreement through the Bank's New York Branch (the
"Branch") dated as of June 9, 2004 (the "Agreement") between the Bank and BNY
Western Trust Company, as trustee (the "Trustee') for the City of Vernon (the
"Issuer').
We have made factual investigations in respect of the Bank as we have
deemed necessary for the purpose of giving this opinion. We have assumed for the
Purpose of our opinion hereinafter expressed that the Agreement will constitute the
legal, valid and binding obligation of the Bank under the law of the State of
New York and United States Federal law, enforceable against the Bank in
accordance with the law of the State of New York and United States Federal law.
No opinion is expressed herein as to any matters governed by any laws other than
the laws of the Federal Republic of Germany and the Free State of Bavaria.
Based on the foregoing, we are of the opinion that:
1. The Bank is a bank duly organized and existing under the laws of
the Federal Republic of Germany and the Free State of Bavaria.
2. The Bank has the corporate power and authority to execute, deliver
and perform its obligations under the Agreement.
3. No authorizations, approvals or consents from any governmental
authorities in the Federal Republic of Germany or the Free State of Bavaria are
required in connection with the execution, delivery and performance by the Bank of
the Agreement which have not been obtained.
4. A final and conclusive judgment in any Federal court of the United
States and any court of the State of New York in respect of any suit, action or
proceeding, arising out of or relating to the Agreement, wherein process has been
Bayerische Landeabuk
90277 Munchen (Munich)
(-Pcetal address)
Parcel post
Brienaa ShWk 20
80333 Munchen
Telephone
General
+49 89 21 71-01
TeWar.
Geaeal
(0 99) 21 7I.35 79
Co erdal ReZW";
Amtsgaicla Mth ch a
HRA 76030
Deotear
Munchen
VAT-Reg*ndco;
DE 12927 33 72
7, JUN. 2004 17:08 BAYERNLB ALLG. RECHT NR. 516
Bayerische Landesbank
effectively served on the Branch, would be given conclusive effect by the
appropriate courts of the Federal Republic of Germany or the Free State of Bavaria
without reexamination of the substantive matters thereby adjudicated; provided,
however, that the requirements of Article 328 of the German Code of Civil
Procedure are met, in particular that recognition of the judgment is not contrary to
the public policy of the Federal Republic of Germany or the Free State of Bavaria,
as applicable, and is not unconscionable, and reciprocity exists between the relevant
jurisdiction and the Federal Republic of Germany or the Free State of Bavaria, as
applicable, with respect to the recognition of the final judgments of the courts of the
Federal Republic of Germany or the Free State of Bavaria, as applicable. We know
of no reason why recognition of such judgments would be deemed or held to be
either contrary to the public policy of the Federal Republic of Germany or the Free
State of Bavaria or unconscionable. Further, it is our understanding that reciprocity
for the recognition of judgments currently exists between the Federal Republic of
Germany, the Free State of Bavaria and the State of New York, but we must point
out that such reciprocity might cease to exist at any time.
5. The execution, delivery and performance of the Agreement has been
duly authorized by all necessary action on the part of the Bank and, upon execution
thereof by two officers of the Branch and upon due execution and delivery by the
other parties thereto, will constitute the legally valid and binding obligation of the
Bank enforceable against the Bank in accordance with its terms, except (i) as
limited by bankruptcy, insolvency, reorganization, moratorium and other laws
relating to, or affecting generally, the enforcement of creditors' rights or a
moratorium applicable to the Bank, and (ii) that no opinion is expressed as to the
availability of equitable remedies to any person seeking to enforce the Agreement.
The obligation of the Bank to make payments under the Agreement ranks
pailpassu with the obligations of the Bank to its other depositors and its other
unsecured and unsubordinated creditors.
6. Under the laws of the Federal Republic of Germany and the Free
State of Bavaria, the Trustee has the right to commence a direct action against the
Bank in any court in Germany having jurisdiction over the Bank based on
nonpayment by the Branch of amounts due under the Agreement.
7. The choice by the parties to the Agreement of the law of the State of
New York, United States of America, as governing law is legal, valid and binding
under the laws of the Federal Republic of Germany and the Free State of Bavaria,
except that the authorization of the Agreement by the Bank may be governed by the
laws of the Federal Republic of Germany and the Free State of Bavaria.
8. Under the laws of the Federal Republic of Germany and the Free
State of Bavaria, the Bank has the power to submit, and the Branch (on behalf of
the Bank) has validly and irrevocably submitted, to the jurisdiction of the State of
New York and the United States Federal Courts in the State of New York, with
respect to any action arising out of or based on the Agreement or any judgment
properly entered by any court in respect thereof.
S. 3
June 9, 2004
Page 2
7. JUN, 2004 17:09 BAYERNLB ALLG. RECHT NR. 516
Bayerische Landesbank
9. German courts, if requested, may express a judgment in United
States Dollars in respect of any action in connection with a debt in United States
Dollars under the Agreement. However, if a judgment awarded by a German court
were to be expressed in German Marks or Euro, it would normally be expressed by
reference to the exchange value of the relevant amount of United States Dollars at
the rate of exchange prevailing on the effective date of payment.
Kutak Rock LLP, special legal counsel to the New York Branch of the
Bank, and Moody's Investors Service, Inc., Standard & Poor's Ratings Services, a
division of the McGraw-Hill Companies, Inc. or Fitch Ratings, to the extent that
any assigns investment ratings to the Bonds referenced in the Agreement, may rely
upon this opinion as if it were addressed to them.
This opinion is limited to the matters expressly set forth above and no
opinion is implied or may be inferred beyond the matters expressly so stated. This
opinion is delivered to you in connection with the above -referenced transaction and
may not be utilized or quoted by you for any other purpose whatsoever or delivered
to any other person without our prior written consent.
This opinion is rendered to you and may not, without our written consent,
be used or relied upon by you in any other capacity or by any other person, except
as provided above, for any purpose whatsoever.
In this opinion, German legal concepts are expressed in English terms and
not in their original German terms. The concepts concerned may not be identical to
the concepts described by the same English term as they exist under the laws of
other jurisdictions.
Furthermore, this opinion is issued in Germany, and may only be relied
upon under the express condition that any issues of interpretation or liability arising
thereunder are governed by German law with exclusive jurisdiction being Munich,
Germany.
This opinion is being rendered by the signing in-house counsels in their
capacity as employees of Bayerische Landesbank acting as representatives of
Bayerische Landesbank. Consequently, this opinion is exclusively issued by
Bayerische Landesbank and the undersigned shall have no personal liability
hereunder.
Very truly yours,
Bayerische Landesbank
S. 4
June 9, 2004
Page 3
POLICYHOLDER COPY
STATE P.O. BOX 420807, SAN FRANCISCO, CA 94142-0807
COMPENSATION
INSURANCE
FUND CERTIFICATE OF WORKERS' COMPENSATION INSURANCE
ISSUE DATE: 05-28-2004
VERNON HISTORIC PRESERVATION SOCIETY
ATTN RACHEL MALKENHORST
2715 E 50TH ST
VERNON CA 90058
GROUP: 000579
POLICY NUMBER: 113-2004
CERTIFICATE ID: 47
CERTIFICATE EXPIRES: 07-01-2005
07-01-2004/07-01-2005
This is to certify that we have issued a valid Worker's Compensation insurance policy in a form approved by the California
Insurance Commissioner to the employer named below for the policy period indicated.
This policy is not subject to cancellation by the Fund except upon 30 days advance written notice to the employer.
We will also give you 30 days advance notice should this policy be cancelled prior to its normal expiration.
This certificate of insurance is not an insurance policy and does not amend, extend or alter the coverage afforded by the
policies listed herein. Notwithstanding any requirement, term or condition of any contract or other document with
respect to which this certificate of insurance may be issued or may pertain, he insurance afforded by the policies
described herein is subject to all the terms, exclusions, and conditions, of such policies:
AUTHORIZED REPRESENTATIVE PRESIDENT
EMPLOYER'S LIABILITY LIMIT INCLUDING DEFENSE COSTS: $11000,000 PER OCCURRENCE.
ENDORSEMENT #2065 ENTITLED CERTIFICATE HOLDERS' NOTICE EFFECTIVE 07-01-2004 IS
ATTACHED TO AND FORMS A PART OF THIS POLICY.
EMPLOYER
HAZLETT, JAMES F. AND HAZLETT, DONNA B. DBA: CARPET
KING
1203 S CENTRAL AVE
GLENDALE CA 91204
Fscl
PRINTED: 05-28-2004
SCIF 10262E Accept this certificate only if you see a faint watermark that reads 'OFFICIAL STATE FUND DOCUMENT' PAGE 1 OF 1