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Resolution No. 90681 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 _19__ 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 9068 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON APPROVING AND AUTHORIZING THE EXECUTION OF FOUR CUSTODIAL ESCROW ACCOUNT AGREEMENTS TO ACCOMMODATE (1) THE CITY'S TRANSMITTAL OF FUNDS TO DEBT SERVICES ON CITY'S BONDED INDEBTEDNESS WITH MORGAN STANLEY AND CITIBANK, (2) RATING AGENCY'S CREDIT QUALITY AND (3) REMIT INSTALLMENT PAYMENT FOR LEGAL COUNSEL SERVICES WHEREAS, the City of Vernon (the "City") is a municipal corporation and a chartered city of the State of California organized and existing under its Charter and the Constitution of the State of California; and WHEREAS, City staff have recommended on that the City enter into four Escrow Agreements with the Bank of New York Trust Company, N.A. to open a City of Vernon Light & Power Stabilization Account, a Morgan Stanley Debt Service Account, a Legal Counsel Disbursement Account and a BNY Citi Gas Account to allow the City's investment advisors to competitively place funds with the marketplace. 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 approves the four Escrow Agreements dated as of June 7, 2006, with the Bank of New York Trust Company, N.A., in substantially the same form as the copies which are attached hereto as Exhibits A (Light & Power Stabilization Account), B (Morgan Stanley Debt Service Account), C 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (Legal Counsel Disbursement Account) and D (BNY Citi Gas Account) and incorporated by reference. SECTION 3: The City Council of the City of Vernon hereby lauthorizes the Mayor to execute said Agreements for, and on behalf of, the City of Vernon and the Acting City Clerk is hereby authorized to attest thereto. SECTION 4: The City Council of the City of Vernon hereby authorizes the City Attorney, or his designee, to make whatever nonsubstantive, administrative and/or text changes, upon advice of (counsel, to the Agreements and to execute any and all documents necessary to implement and carry out the purposes specified in the Agreements on behalf of the City of Vernon and to perform such other actions deemed necessary or advisable. SECTION 5: The City Council of the City of Vernon hereby authorizes the Acting City Clerk, the Director of Finance, or the City Treasurer to act as its "Authorized Officer" pursuant to the Escrow lAgreements, to execute any and all documents necessary to implement and carry out the purposes specified in the Escrow Agreements on behalf of the City of Vernon and to perform such other actions deemed (necessary or advisable. SECTION 6: The City Council of the City of Vernon hereby directs the Acting City Clerk, or his designee, to send one fully executed Agreements and the special escrow fee of $2,000.00 for each account to: The Bank of New York Trust Company, N.A. Attn. Corporate Trust Department 700 South Flower, Suite 500 Los Angeles, CA 90017 - 2 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 -1-9- 20 21 22 23 24 25 26 27 28 SECTION 7: The Acting 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 7th day of June, 2006. ATTEST: BRUCE V. MAL NHORST, JR. Acting City C erk LEONIS C. M LBURG, Mayor - 3 - I 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 --19 20 21 22 23 24 25 26 27 28 STATE OF CALIFORNIA ) ) ss COUNTY OF LOS ANGELES ) I, BRUCE V. MALKENHORST, JR., Acting City Clerk of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. 9068, 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 7, 2006, and thereafter was duly signed by the Mayor of the City of -Vernon. (SEAL) BRUC Acti ty Clerk - 4 - New Legal Entity Name Changes for Global Corporate Trust Effective July 1, 2008 Current Legal Entity Name North America Legal Entity Name Changes The Bank of New York The Bank of New York Trust Company, N.A. BNYM (Delaware) BNY Trust Company of Canada New Legal Entity Name (if applicable) The Bank of New York Mellon The Bank of New York Mellon Trust Company National Association (or N.A.) BNY Mellon Trust of Delaware No Change Europe, Middle East, Africa (EMEA) Legal Entitv Name ChanL-es The Bank of New York The Bank of New York Mellon BNY Mellon Funds Services (Ireland) Limited No Change The Bank of New York (Luxembourg) S.A. No Change BNY Corporate Trustee Services Limited No Change BNY Financial Services plc (Dublin) No Change Asia Pacific Legal Entity Name Changes The Bank of New York BNY Trust (Australia) Pty Limited BNY Trust Company of Australia Limited BTA Institutional Services Australia Limited Permanent Custodians Limited BNY Trust (Australia) Registry Limited GT Australia Nominees Limited Rusdav Limited Brandwal Limited Latin America The Bank of New York Mellon BNY Mellon (Australia) Pty Ltd No Change No Change No Change No Change No Change No Change No Change The Bank of New York The Bank of New York Mellon BNY Mellon Servicos Financeiros DTVM S.A. No Change (effective June 11, 2008) CITY COUNCIL LEONIS C. MALBURG Mayor THOMAS A. YBARRA Mayor Pro —Tern WM. "BILL" DAVIS Councilman H. "LARRY" GONZALES Councilman W. MICHAEL McCORMICK Councilman 4305 Santa Fe Avenue, Vernon, California 90058. telephone (323) 583-8811 INCUMBENCY CERTIFICATE SOL BENUDIZ Police Chief MARK C. WHITWORTH Acting Fire Chief LEWIS J. POZZEBON Director of Environmental Health S. KEVIN WILSON Director of Community Services SHARON L. DUCKWORTH Acting City Treasurer The undersigned, Leonis C. Malburg, being the Mayor of City of Vernon (the "Company") does hereby certify that the individual(s) listed below are qualified and acting officers of the Company as set forth in the right column opposite their respective names and the signatures appearing in the extreme right column opposite the name of each such officer is a true specimen of the genuine signature of such officer and such individuals have the authority to execute documents to be delivered to, or upon the request of, The Bank of New York Trust Company, N.A. as Escrow/Custodial Agent under the Escrow Agreements dated as of June 21, 2006, by and between the Company and The Bank of New York Trust Company, N.A (formerly known as BNY Western Trust Company). (Print Name & Title) Thomas A. Ybarra, Mayor Pro Tern Hilario Gonzales, Councilman Rory Burnett, Finance Director (Signatures) IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Certificate as of the l day of Juft , 2006. "Na e: Leonis C. Malburb,,, Title: Mayor Txdugive(� wubugtriat CITY COUNCIL LEONIS C. MALBURG Mayor THOMAS A. YBARRA Mayor Pro—Tem WM. 'BILL" DAVIS Councilman H. "LARRY" GONZALES Councilman W. MICHAEL McCORMICK Councilman July 6, 2006 4305 Santa Fe Avenue, Vernon, California 90058 telephone (323) 583-8811 Ms. Aurora Quiazon The Bank of New York Trust Company, N.A. 700 South Flower Street, Suite 500 Los Angeles, CA 90017 Re: Escrow Agreements for Account Nos. 800456, 800457, 800458 and 800459 Dear Ms. Quiazon: SOL BENUDIZ Police Chief MARK C. WHITWORTH Acting Fire Chief LEWIS J. POZZEBON ®J Director of Environmental Health S. KEVIN WILSON Director of Community Services SHARON L. DUCKWORTH Acting City Treasurer Transmitted herewith are fully executed original agreements for each of the above -referenced accounts, approved by City Council on June 7, 2006, through Resolution No. 9068. If you have any questions regarding this matter, please call Mr. Eric Fresch, at (323) 583-8811 ext. 225." Very truly yours, Nelly Gir Deputy City Clerk NG/ke CC: Sharon Duckworth Resolution No. 9068 Agreement File No. 06-065 'Exclugively wnbugtrial CITY COUNCIL r1 e LEONIS C. MALBURG Mayor £� THOMAS A. YBARRA y� Mayor Pro—Tem 1 WM. "BILL" DAVIS J Councilman H. "CARRY" GONZALES Councilman W. MICHAEL McCORMICK 4305 Santa Fe Avenue, Vernon, California 90058 Councilman telephone (323) 583-8811 June 20, 2006 Ms. Aurora Quiazon The Bank of New York Trust Company, N.A. 700 South Flower Street, Suite 500 Los Angeles, CA 90017 Re: Escrow Agreements for Account Nos. 800456, 800457, 800458 and 800459 Dear Ms. Quiazon: SOL BENUDIZ Police Chief MARK C. WHITWORTH Acting Fire Chief LEWIS J. POZZEBON Director of Environmental Health S. KEVIN WILSON Director of Community Services SHARON L. DUCKWORTH Acting City Treasurer Transmitted herewith are duplicate original agreements for each of the above -referenced accounts, approved by City Council on June 7, 2006, through Resolution No. 9068. Please execute and return all agreements to this office. Upon execution by the City, one set of original agreements will be returned to you along with the required payments. If you have any questions regarding this matter, please call Mr. Eric Fresch, at (323) 583-8811 ext. 225. ery truly yours, Nelly Gir n Deputy City Clerk NG/ke cc: Sharon Duckworth Resolution No. 9068 Agreement File No. 06-065 'E'Ve[ugivero wubugtrial AGIA - 0G -a(S- CITY COUNCIL LEONIS C. MALBURG Mayor THOMAS A. YBARRA Mayor Pro-Tem . WM. 'BILL" DAVIS Councilman H. "LARRY" GONZALES Councilman W. MICHAEL McCORMICK Councilman 4305 Santa Fe Avenue, Vernon, California 90058 telephone (323) 583-8811 INCUMBENCY CERTIFICATE SOL BENUDIZ Police Chief MARK C. WHITWORTH Acting Fire Chief LEWIS J. POZZEBON Director of Environmental Health S. KEVIN WILSON Director of Community Services SHARON L. DUCKWORTH Acting City Treasurer The undersigned, Leonis C. Malburg, being the Mayor of City of Vernon (the "Company") does hereby certify that the individual(s) listed below are qualified and acting officers of the Company as set forth in the right column opposite their respective names and the signatures appearing in the extreme right column opposite the name of each such officer is a true specimen of the genuine signature of such officer and such individuals have the authority to execute documents to be delivered to, or upon the request of, The Bank of New York Trust Company, N.A. as Escrow/Custodial Agent under the Escrow Agreements dated as of June 21, 2006, by and between the Company and The Bank of New York Trust Company, N.A (formerly known as BNY Western Trust Company). (Print Name & Title) Thomas A. Ybarra, Mayor Pro Tern Hilario Gonzales, Councilman Rory Burnett, Finance Director (Signatures) ✓/, IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Certificate as of the lg day of jUQ1 , 2006. Na e. Leonis C. Malbur Title: Mayor 'excillugive(ty w0worial AGOr ob -06s— Securities Servicing The Bank of New York J L 5 Trust Company, N.A. 700 South Flower Street` A raa EW YORK- Suite 500 Los Angeles, CA 90017 FACSIMILE/E-MAIL INSTRUCTIONS: AUTHORIZATION Re: The City of Vernon Escrow 2006 Morgan Stanley Debt Service Account No. 800456 (the "Agreement") Date: June 21, 2006 Customer Authorization, Limitation of Liability and Indemnity: The City of Vernon ("Customer") hereby authorizes The Bank of New York (the "Bank") to rely upon and comply with instructions and directions sent by e-mail, facsimile and other similar unsecured electronic methods (but excluding on-line communications systems covered by a separate agreement (such as the Bank's Inform or CA$H- Register Plus system) ("On -Line Communications Systems)) ("Electronic Methods") by persons believed by the Bank to be authorized to give instructions and directions on behalf of Customer. Except as set forth below with respect to funds transfers, the Bank shall have no duty or obligation to verify or confirm that the person who sent such instructions or directions is, in fact, a person authorized to give instructions or directions on behalf of Customer (other than to verify that the signature on a facsimile is the signature of a person authorized to give instructions and directions on behalf of Customer); and the Bank shall have no liability for any losses, liabilities, costs or expenses incurred or sustained by Customer as a result of such reliance upon or compliance with such instructions or directions. Customer agrees to assume all risks arising out of the use of Electronic Methods to submit instructions and directions to the Bank, including without -limitation the risk of the Bank acting on unauthorized instructions, and the risk of interception and misuse by third parties. Funds Transfers. With respect to any "funds transfer," as defined in Article 4-A of the Uniform Commercial Code, the following security procedure will apply: Customer's payment instruction is to include the name and (in the case of a facsimile) signature of the person initiating the funds transfer request. If the name is listed as an authorized signer on the relevant account, the Bank will confirm the instructions by telephone call to any person - --listed-as an authorized signer on the account, who may be the same person who initiated the instruction. When calling back, the Bank will request from Customer's staff member his or her name. If the name is listed in the Bank's records as an authorized signer, the Bank will confirm the instructions with respect to amount, names and numbers of accounts to be charged or credited and other relevant reference information. Customer acknowledges that the Bank has offered to Customer other security procedures that are more secure and are commercially reasonable for Customer, and that Customer has nonetheless chosen the procedures described in this paragraph. Customer agrees to be bound by any payment order issued in its name, whether or not authorized, that is accepted by the Bank -in accordance with the above procedures. When instructed to credit or pay a party by both name and a unique numeric or alpha -numeric identifier (e.g. ABA number or account number), the Bank, and any other bank participating in the funds transfer, may rely solely on the unique identifier, even if it identifies a party different than the party named. This applies to beneficiaries as well as any intermediary bank. Customer agrees to be bound by the rules of any funds transfer network used in connection with any payment order accepted by the Bank hereunder. This authorization shall remain in full force and effect until canceled, revoked or amended by written notice received by the Bank; and replaces and supersedes any previous authorization from Customer to the Bank relating to the giving of instructions by facsimile, e-mail or other similar Electronic Methods (but excluding On -Line Communications Systems) and is in addition to all other authorizations. Notwithstanding any revocation, cancellation or amendment of this authorization, any action taken by the Bank pursuant to this authorization prior to the Bank's actual receipt and acknowledgement of a notice of revocation, cancellation or amendment shall not be affected by such notice. Customer agrees to indemnify and hold harmless the Bank against any and all claims, losses, damages liabilities, judgments, costs and expenses (incliding reasonable attorneys' fees) (collectively, "Losses") incurred or sustained by the Bank as a result of or in connection with the Banks reliance upon and compliance with instructions or directions given by Electronic Methods, provided, however, that such Losses have not arisen from the negligence or willful misconduct of the Bank, it being understood that the failure of the Bank to verify or confirm that the person giving the instructions or directions, is, in fact, an authorized person does not constitute negligence or willful misconduct. This document shall be governed by, and shall be construed in accordance with, the substantive laws (and not the choice of law rules) of the jurisdiction governing the Agreement. Customer hereby represents and warrants to the Bank that this authorization is properly given and has been duly approved by a resolution of its City Council. Nothing contained herein shall, or be deemed to, alter or modify the rights and remedies of the Bank as set forth in the Agreement. The execution of this document by Customer constitutes acceptance of the foregoing. Yours faithfully, THE BANK OF NEW YORK TRUST COMPANY, N. A. M. Name: Aurora Y. Quiazon Title: Assistant Vice President Customer hereby accepts and agrees to the terms and conditions set forth herein. CITY OF V ON --- By: Name: ruce V. Malkenhorst, Jr. Title: Acting City Clerk Aim," of -o&( — Securities Servicing The Bank of New York Trust Company, N.A. 1I. 700 South Flower StreetNEW YORK. Suite 500 1fi Los Angeles, CA 90017 FACSIMILEX-MAIL INSTRUCTIONS: AUTHORIZATION Re: The City of Vernon Escrow 2006 Citi Gas Account No. 800457 (the "Agreement") Date: June 21, 2006 Customer Authorization, Limitation of Liability and Indemnity: The City of Vernon ("Customer") hereby authorizes The Bank of New York (the "Bank") to rely upon and comply with instructions and directions sent by e-mail, facsimile and other similar unsecured electronic methods (but excluding on-line communications systems covered by a separate agreement (such as the Bank's Inform or CASH- Register Plus system) ("On -Line Communications Systems)) (`Electronic Methods") by persons believed by the Bank to be authorized to give instructions and directions on behalf of Customer. Except as set forth below with respect to funds transfers, the Bank shall have no duty or obligation to verify or confirm that the person who sent such instructions or directions is, in fact, a person authorized to give instructions or directions on behalf of Customer (other than to verify that the signature on a facsimile is the signature of a person authorized to give instructions and directions on behalf of Customer); and the Bank shall have no liability for any losses, liabilities, costs or expenses incurred or sustained by Customer as a result of such reliance upon or compliance with such instructions or directions. Customer agrees to assume all risks arising out of the use of Electronic Methods to submit instructions and directions to the Bank, including without limitation the risk of the Bank acting on unauthorized instructions, and the risk of interception and misuse by third parties. Funds Transfers. With respect to any "funds transfer," as defined in Article 4-A of the Uniform Commercial Code, the following security procedure will apply: Customer's payment instruction is to include the name and (in the case of a facsimile) signature of the person initiating the funds transfer request. If the name is listed as an authorized signer on the relevant account, the Bank will confirm the instructions by telephone call to any person - - listed- as an authorized signer on the account, who may be the same person who initiated the instruction. When calling back, the Bank will request from Customer's staff member his or her name. If the name is listed in the Bank's records as an authorized signer, the Bank will confirm the instructions with respect to amount, names and numbers of accounts to be charged or credited and other relevant reference information. Customer acknowledges that the Bank has offered to Customer other security procedures that are more secure and are commercially reasonable for Customer, and that Customer has nonetheless chosen the procedures described in this paragraph. Customer agrees to be bound by any payment order issued in its name, whether or not authorized, that is accepted by the Bank -in accordance with the above procedures. When instructed to credit or pay a party by both name and a unique numeric or alpha -numeric identifier (e.g. ABA number or account number), the Bank, and any other bank participating in the funds transfer, may rely solely on the unique identifier, even if it identifies a party different than the party named. This applies to beneficiaries as well as any intermediary bank. Customer agrees to be bound by the rules of any funds transfer network used in connection with any payment order accepted by the Bank hereunder. _ This authorization shall remain in full force and effect until canceled, revoked or amended by written notice received by the Bank; and replaces and supersedes any previous authorization from Customer to the Bank relating to the giving of instructions by facsimile, e-mail or other similar Electronic Methods (but excluding On -Line Communications Systems) and is in addition to all other authorizations. Notwithstanding any revocation, cancellation or amendment of this authorization, any action taken by the Bank pursuant to this authorization prior to the Bank's actual receipt and acknowledgement of a notice of revocation, cancellation or amendment shall not be affected by such notice. Customer agrees to indemnify and hold harmless the Bank against any and all claims, losses, damages liabilities, judgments, costs and expenses (including reasonable attorneys' fees) (collectively, "Losses") incurred or sustained by the Bank as a result of or in connection with the Bank's reliance upon and compliance with instructions or directions given by Electronic Methods, provided, however, that such Losses have not arisen from the negligence or willful misconduct of the Bank, it being understood that the failure of the Bank to verify or confirm that the person giving the instructions or directions, is, in fact, an authorized person does not constitute negligence or willful misconduct. This document shall be governed by, and shall be construed in accordance with, the substantive laws (and not the choice of law rules) of the jurisdiction governing the Agreement. Customer hereby represents and warrants to the Bank that this authorization is properly given and has been duly approved by a resolution of its City Council. Nothing contained herein shall, or be deemed to, alter or modify the rights and remedies of the Bank as set forth in the Agreement. The execution of this document by Customer constitutes acceptance of the foregoing. Yours faithfully, THE BANK OF NEW YORK TRUST COMPANY, N. A. 1.2 Name: Aurora Y. Quiazon Title: Assistant Vice President Customer hereby accepts and agrees to the terms and conditions set forth herein. CITY OF VE ON � By: Name: Bruce V. Malkenhorst, Jr. Title: Acting City Clerk Securities Servicing The Bank of New York Trust Company, N.A. * *� IX{ev BANK 700 South Flower Street ' c r` N E W VO R K., Suite 500 r Los Angeles, CA 90017 FACSIMILE/E-MAIL INSTRUCTIONS: _ AUTHORIZATION Re: The City of Vernon Escrow 2006 Legal Counsel Disbursement Account No. 500458 (the "Agreement") Date: June 21, 2006 Customer Authorization, Limitation of Liability and Indemnity: The City of Vernon ("Customer") hereby authorizes The Bank of New York (the "Bank") to rely upon and comply with instructions and directions sent by e-mail, facsimile and other similar unsecured electronic methods (but excluding on-line communications systems covered by a separate agreement (such as the Bank's Inform or CA$H- Register Plus system) ("On -Line Communications Systems)) ("Electronic Methods") by persons believed by the Bank to be authorized to give instructions and directions on behalf of Customer. Except as set forth below with respect to funds transfers, the Bank shall have no duty or obligation to verify or confirm that the person who sent such instructions or directions is, in fact, a person authorized to give instructions or directions on behalf of Customer (other than to verify that the signature on a facsimile is the signature of a person authorized to give instructions and directions on behalf of Customer); and the Bank shall have no liability for any losses, liabilities, costs or expenses incurred or sustained by Customer as a result of such reliance upon or compliance with such instructions or directions. Customer agrees to assume all risks arising out of the use of Electronic Methods to submit instructions and directions to the Bank, including without limitation the risk of the Bank acting on unauthorized instructions, and the risk of interception and misuse by third parties. Funds Transfers. With respect to any "funds transfer," as defined in Article 4-A of the Uniform Commercial Code, the following security procedure will apply: Customer's payment instruction is to include the name and (in the case of a facsimile) signature of the person initiating the funds transfer request. If the name is listed as an authorized signer on the relevant account, the Bank will confirm the instructions by telephone call to any person ------listed as an authorized signer on the account, who may be the same person who initiated the instruction. When calling back, the Bank will request from Customer's staff member his or her name. If the name is listed in the Bank's records as an authorized signer, the Bank will confirm the instructions with respect to amount, names and numbers of accounts to be charged or credited and other relevant reference information. Customer acknowledges that the Bank has offered to Customer other security procedures that are more secure and are commercially reasonable for Customer, and that Customer has nonetheless chosen the procedures described in this paragraph. Customer agrees to be bound by any payment order issued in its name, whether or not authorized, that is accepted by the Bank -in accordance with the above procedures. When instructed to credit or pay a party by both name and a unique numeric or alpha -numeric identifier (e.g. ABA'number or account number), the Bank, and any other bank participating in the funds transfer, may rely solely on the unique identifier, even if it identifies a party different than the party named. This applies to beneficiaries as well as any intermediary bank. Customer agrees to be bound by the rules of any funds transfer network used in connection with any payment order accepted by the Bank hereunder. This authorization shall remain in full force and effect until canceled, revoked or amended by written notice received by the Bank; and replaces and supersedes any previous authorization from Customer to the Bank relating to the giving of instructions by facsimile, e-mail or other similar Electronic Methods (but .excluding On -Line Communications Systems) and is in addition to all other authorizations. Notwithstanding any revocation, cancellation or amendment of this authorization, any action taken by the Bank pursuant to this authorization prior to the Bank's actual receipt and acknowledgement of a notice of revocation, cancellation or amendment shall not be affected by such notice. Customer agrees to indemnify and hold harmless the Bank against any and all claims, losses, damages liabilities, judgments, costs and expenses (including reasonable attorneys' fees) (collectively, "Losses") incurred or sustained by the Bank as a result of or inconnection with the Bank's reliance upon and compliance with instructions or directions given by Electronic Methods, provided, however, that such Losses have not arisen from the negligence or willful misconduct of the Bank, it being understood that the failure of the Bank to verify or confirm that the person giving the instructions or directions, is, in fact, an authorized person does not constitute negligence or willful misconduct. This document shall be governed by, and shall be construed in accordance with, the substantive laws (and not the choice of law rules) of the jurisdiction governing the Agreement. Customer hereby represents and warrants to the Bank that this authorization is properly given and has been duly approved by a resolution of its City Council. Nothing contained herein shall, or be deemed to, alter or modify the rights and remedies of the Bank as set forth .in the Agreement. The execution of this document by Customer constitutes acceptance of the foregoing. Yours faithfully, THE BANK OF NEW YORK TRUST COMPANY, N. A. By: Name: Aurora Y. Quiazon Title: Assistant Vice President Customer hereby accepts and agrees to the terms and conditions set forth herein. CITY OF VE N By: Name: Bruce V. Malkenhorst, Jr. Title: Acting City Clerk AblA oG-o6s- Securities Servicing The Bank of New York t Trust Company, N.A. 1K The BANK 700 South Flower Street o/NEW YORX. Suite 500 Los Angeles, CA 90017 FACSIMILE/E-MAIL INSTRUCTIONS: AUTHORIZATION Re: The City of Vernon Escrow 2006 Light & Power Stabilization Account No. 500459 (the "Agreement") Date: June 21, 2006 Customer Authorization, Limitation of Liability and Indemnity: The City of Vernon ("Customer") hereby authorizes The Bank of New York (the 'Bank") to rely upon and comply with instructions and directions sent by e-mail, facsimile and other similar unsecured electronic methods (but excluding on-line communications systems covered by a separate agreement (such as the Bank's Inform or CA$H- Register Plus system) ("On -Line Communications Systems)) ("Electronic Methods") by persons believed by the Bank to be authorized to give instructions and directions on behalf of Customer. Except as set forth below with respect to funds transfers, the Bank shall have no duty or obligation to verify or confirm that the person who sent such instructions or directions is, in fact, a person authorized to give instructions or directions on behalf of Customer (other than to verify that the signature on a facsimile is the signature of a person authorized to give instructions and directions on behalf of Customer); and the Bank shall have no liability for any losses, liabilities, costs or expenses incurred or sustained by Customer as a result of such reliance upon or compliance with such instructions or directions. Customer agrees to assume all risks arising out of the use of Electronic Methods to submit instructions and directions to the Bank, including without limitation the risk of the Bank acting on unauthorized instructions, and the risk of interception and misuse by third parties. Funds Transfers. With respect to any "funds transfer," as defined in Article 4-A of the Uniform Commercial Code, the following security procedure will apply: Customer's payment instruction is to include the name and (in the case of a facsimile) signature of the person initiating the funds transfer request. If the name is listed as an authorized signer on the relevant account, the Bank will confirm the instructions by telephone call to any person listed -as -an authorized signer on the account, who may be the same person who initiated the instruction. When calling back, the Bank will request from Customer's staff member his or her name. If the name is listed in the Bank's records as an authorized signer, the Bank will confirm the instructions with respect to amount, names and numbers of accounts to be charged or credited and other relevant reference information. Customer acknowledges that the Bank has offered to Customer other security procedures that are more secure and are commercially reasonable for Customer, and that Customer has nonetheless chosen the procedures described in this paragraph. Customer agrees to be bound by any payment order issued in its name, whether or not authorized, that is accepted by the Bank -in accordance with the above procedures. When instructed to credit or pay a parry by both name and a unique numeric or alpha -numeric identifier (e.g. ABA number or account number), the Bank, and any other bank participating in the funds transfer, may rely solely on the unique identifier, even if it identifies a party different than the party named. This applies to beneficiaries as well as any intermediary bank. Customer agrees to be bound by the rules of any funds transfer network used in connection with any payment order accepted by the Bank hereunder. This authorization shall remain in full force and effect until canceled, revoked or amended by written notice received by the Bank; and replaces and supersedes any previous authorization from Customer to the Bank relating to the giving of instructions by facsimile, e-mail or other similar Electronic Methods (but excluding On -Line Communications Systems) and is in addition toall other authorizations. Notwithstanding any revocation, cancellation or amendment of this authorization, any action taken by the Bank pursuant to this authorization prior to the Bank's actual receipt and acknowledgement of a notice of revocation, cancellation or amendment shall not be affected by such notice. AGMT 0(7 - ®GS Securities Servicing The Bank of New York Trust Company, N.A. � 1 8AN 700 South Flower Street /' N YORK- Suite 500 Los Angeles, CA 90017 AUTHORIZATION AND DIRECTION TO THE BANK OF NEW YORK TRUST COMPANY, N.A. TO INVEST CASH BALANCES IN MONEY MARKET MUTUAL FUNDS THROUGH THE BANK OF NEW YORK CUSTOMER NAME (the "Customer"): The City of Vernon ACCOUNT (the "Account"): Vernon Escrow 2006 Morgan Stanley Debt Service Account AGREEMENT (Description): Custody Escrow Agent ACCOUNT NUMBER: 800456 FUND CHOICE (the "Fund"): AIM GOVERNMENT & AGENCY PORTFOLIO PRIVATE (9999035) These instructions supersede any previous instructions which pertain to the investment of cash in the Account. AUTHORIZATION AND DIRECTION The Bank of New York Trust Company, N.A. ("BNYNA'), through its affiliate, The Bank of New York ("BNY"), is hereby authorized and directed to invest any available cash in the Account in shares of the Fund and to redeem shares of the Fund to meet the cash requirements of the Account. Customer may, from time to time, direct BNYNA in writing to redeem and exchange shares of the Fund for shares of, or to invest available cash or the proceeds from any redemption in, another eligible investment and BNYNA shall comply with such direction. Customer represents and warrants to BNYNA that it is authorized and empowered to direct BNYNA to make the investment specified herein through BNY and that the investment authorized herein is an authorized investment. PROSPECTUS: Customer has read the Prospectus of the Fund and has independently made the determination to direct BNYNA, through BNY, to invest available cash in the Account in shares of the Fund. Customer understands that the Fund is not an obligation of, or recommended, endorsed or guaranteed in any way by, BNY, its affiliates or any other bank; that the Fund is not insured by an agency or instrumentality of the United States, such as the Federal Deposit Insurance Corporation; and that investments in the Fund may be subject to investment risks, including possible loss of the principal amount invested. Customer further understands that, other than.with respect to the BNY Hamilton Funds, neither BNY nor its affiliates has participated in the preparation of the Prospectus or is responsible for its content. With respect to the BNY Hamilton Funds, Customer understands, and hereby acknowledges, that BNY provides investment advisory and other services to the BNY Hamilton Funds, and is compensated for such services. PERIODIC STATEMENTS: Customer agrees that transactions in the Fund will be reported only in BNYNA's regular periodic account statements. VOTING SHARES: Customer assumes the obligation and retains the right to vote all shares of the Fund held hereunder for the benefit of the Account. Customer agrees to indemnify and hold harmless the Bank against any and all claims, losses, damages liabilities, judgments, costs and expenses (including reasonable attorneys' fees) (collectively, "Losses") incurred or sustained by the Bank as a result of or in connection with the Bank's reliance upon and compliance with instructions or directions given by Electronic Methods, provided, however, that such Losses have not arisen from the negligence or willful misconduct of the Bank, it being understood that the failure of the Bank to verify or confmn that the person giving the instructions or directions, is, in fact, an authorized person does not constitute negligence or willful misconduct. This document shall be governed by, and shall be construed in accordance with, the substantive laws (and not the choice of law rules) of the jurisdiction governing the Agreement. Customer hereby represents and warrants to the Bank that this authorization is properly given and has been duly approved by a resolution of its City Council. Nothing contained herein shall, or be deemed to, alter or modify the rights and remedies of the Bank as set forth in the Agreement. The execution of this document by Customer constitutes acceptance of the foregoing. Yours faithfully, THE BANK OF NEW YORK TRUST COMPANY, N. A. an Name: Aurora Y. Quiazon Title: Assistant Vice President Customer hereby accepts and agrees to the terms and conditions set forth herein. CITY OF VERI ON By: Name: Bruce V. Malkenhorst, Jr. Title: Acting City Clerk SHAREHOLDER SERVICES FEES: Customer acknowledges that the Fund is authorized to make payments from its management fee or any other source available to parties such as banks or broker -dealers ("Service Organizations") that provide shareholder support services to the Fund and that Service Organizations currently are compensated at a rate of up to the Maximum Rate of .25% annually of the average net assets of each Fund with respect to which they provide or have provided shareholder support services. Customer further acknowledges that BNY is a Service Organization and is paid, and hereby consents to such payment, by the Fund up to the Maximum Rate annually of the average daily balance of the Account invested in the Fund for shareholder support services rendered to the Fund by BNY, which services may include, without limitation, answering client's inquiries regarding the Fund, assistance to clients in changing dividend options, account designations and addresses, processing purchase and redemption transactions, providing periodic statements showing a client's account balance and the integration of such statement with other transactions, arranging for BNY wires, and providing such other information and services as the Fund's distributor or Customer reasonably may request. Customer further acknowledges that the Fund may purchase securities from or through BNY or its affiliates, may, engage in repurchase transactions with BNY or its affiliates, may place funds on deposit in accounts with BNY or its affiliates and receive interest income thereon and may obtain other services from BNY for which BNY is paid a fee. INVESTMENT MAINTENANCE FEE: BNYNA will charge an investment maintenance fee with respect to investments in the Fund, calculated at an annual rate of up to .33 basis points on average total monthly account balances. The investment maintenance fee will be charged [monthly]. This Authorization and Direction is executed, acknowledged and consented to at Vernon, California on June 21, 2006. CITY OF VEIION By: Name: Bruce V. Malkenhorst, Jr. Title: Acting City Clerk AGOT of.-o(tS" Securities Servicing The Bank of New Yorkh r zr Trust Company, N.A.'ar� A,a.BANK 700 South Flower Street ol'NEW yO R Suite 500 �f _ Los Angeles, CA 90017 AUTHORIZATION AND DIRECTION TO THE BANK OF NEW YORK TRUST COMPANY, N.A. TO INVEST CASH BALANCES IN MONEY MARKET MUTUAL FUNDS THROUGH THE BANK OF NEW YORK CUSTOMER NAME (the "Customer"): The City of Vernon ACCOUNT (the "Account"): Vernon Escrow 2006 Citi Gas Account AGREEMENT (Description): Custody Escrow Agent ACCOUNT NUMBER: 800457 FUND CHOICE (the "Fund"): AIM GOVERNMENT & AGENCY PORTFOLIO PRIVATE (9999035) These instructions supersede any previous instructions which pertain to the investment of cash in the Account. AUTHORIZATION AND DIRECTION The Bank of New York Trust Company, N.A. ("BNYNA'), through its affiliate, The Bank of New York ("BNY"), is hereby authorized and directed to invest any available cash in the Account in shares of the Fund and to redeem shares of the Fund to meet the cash requirements of the Account. Customer may, from time to time, direct BNYNA in writing to redeem and exchange shares of the Fund for shares of, or to invest available cash or the proceeds from any redemption in, another eligible investment and BNYNA shall comply with such direction. Customer represents and warrants to BNYNA that. it is authorized and empowered to direct BNYNA to make the investment specified herein through BNY and that the investment authorized herein is an authorized investment. PROSPECTUS: Customer has read the Prospectus of the Fund and has independently made the determination to direct BNYNA, through BNY, to invest available cash in the Account in shares of the Fund. Customer understands that the Fund is not an obligation of, or recommended, endorsed or guaranteed in any way by, BNY, its affiliates or any other bank; that the Fund is not insured by an agency or instrumentality of the United States, such as the Federal Deposit Insurance Corporation; and that investments in the Fund may be subject to investment risks, including possible loss of the principal amount invested. Customer further understands that, other than with respect to the BNY Hamilton Funds, neither BNY nor its affiliates has participated in the preparation of the Prospectus or is responsible for its content. With respect to the BNY Hamilton Funds, Customer understands, and hereby acknowledges, that BNY provides investment advisory and other services to the BNY Hamilton Funds, and is compensated for such services. PERIODIC STATEMENTS: Customer agrees that transactions in the Fund will be reported only in BNYNA's regular periodic account statements. VOTING SHARES: Customer assumes the obligation and retains the right to vote all shares of the Fund held hereunder for the benefit of the Account. SHAREHOLDER SERVICES FEES: Customer acknowledges that the Fund is authorized to make payments from its management fee or any other source available to parties such as banks or broker -dealers ("Service Organizations") that provide shareholder support services to the Fund and that. Service Organizations currently are compensated at a rate of up to the Maximum Rate of .25% annually of the average net assets of each Fund with respect to which they provide or have provided shareholder support services. Customer further acknowledges that BNY is a Service Organization and is paid, and hereby consents to such payment, by the Fund up to the Maximum Rate annually of the average daily balance of the Account invested in the Fund for shareholder support services rendered to the Fund by BNY, which services may include, without limitation, answering client's inquiries regarding the Fund, assistance to clients in changing dividend options, account designations and addresses, processing purchase and redemption transactions, providing periodic statements showing a client's account balance and the integration of such statement with other transactions, arranging for BNY wires, and providing such other information and services as the Fund's distributor or Customer reasonably may request. Customer further acknowledges that the Fund may purchase securities from or through BNY or its affiliates, may engage in repurchase transactions with BNY or its affiliates, may place funds on deposit in accounts with BNY or its affiliates and receive interest income thereon and may obtain other services from BNY for which BNY is paid a fee. INVESTMENT MAINTENANCE FEE: BNYNA will charge an investment maintenance fee with respect to investments in the Fund, calculated at an annual rate of up to .33 basis points on average total monthly account balances. The investment maintenance fee will be charged [monthly]. This Authorization and Direction is executed, acknowledged and consented to at Vernon, California on June 21, 2006. CITY OF VE ON By: Name: Bruce V. Malkenhorst, Jr. Title: Acting City Clerk IoS- Securities Servicing The Bank of New York Trust Company, N.A.iN �� 700 South Flower Street 1 i �!�'€-/ BANK: � NEW YOLK.. Suite 500 . Los Angeles, CA 90017 `0j4'""` AUTHORIZATION AND DIRECTION TO THE BANK OF NEW YORK TRUST COMPANY, N.A. TO INVEST CASH BALANCES IN MONEY MARKET MUTUAL FUNDS THROUGH THE BANK OF NEW YORK CUSTOMER NAME (the "Customer"): The City of Vernon ACCOUNT (the "Account"): Vernon Escrow 2006 Legal Counsel Disbursement Account AGREEMENT (Description): Custody Escrow Agent ACCOUNT NUMBER: 800458 FUND CHOICE (the "Fund"): AIM GOVERNMENT & AGENCY PORTFOLIO PRIVATE (9999035) These instructions supersede any previous instructions which pertain to the investment of cash in the Account. AUTHORIZATION AND DIRECTION The Bank of New York Trust Company, N.A. ("BNYNA"), through its affiliate, The Bank of New York ("BNY"), is hereby authorized and directed to invest any available cash in the Account in shares of the Fund and to redeem shares of the Fund to meet the cash requirements of the Account. Customer may, from time to time, direct BNYNA in writing to redeem and exchange shares of the Fund for shares of, or to invest available cash or the proceeds from any redemption in, another eligible investment and BNYNA shall comply with such direction. Customer represents and warrants to BNYNA that it is authorized and empowered to direct BNYNA to make the _investment specified herein through BNY and that the investment authorized herein is an authorized investment. PROSPECTUS: Customer has read the Prospectus of the Fund and has independently made the determination to direct BNYNA, through BNY, to invest available cash in the Account in shares of the Fund. Customer understands that the Fund is not an obligation of, or recommended, endorsed or guaranteed in any way by, BNY, its affiliates or any other bank; that the Fund is not insured by an agency or instrumentality of the United States, such as the Federal Deposit Insurance Corporation; and that investments in the Fund may be subject to investment risks, including possible loss of the principal amount invested. Customer further understands that, other than with respect to the BNY Hamilton Funds, neither BNY nor its affiliates has participated in the preparation of the Prospectus or is responsible for its content. With respect to the BNY Hamilton Funds, Customer understands, and hereby acknowledges, that BNY provides investment advisory and other services to the BNY Hamilton Funds, and is compensated for such services. PERIODIC STATEMENTS: Customer agrees that transactions in the Fund will be reported only in BNYNA's regular periodic account statements. VOTING SHARES: Customer assumes the obligation and retains therightto vote all shares of the Fund held hereunder for the benefit of the Account. SHAREHOLDER SERVICES FEES: Customer acknowledges that the Fund is authorized to make payments from its management fee or any other source available to parties such as banks or broker -dealers ("Service Organizations") that provide shareholder support services to the Fund and that Service Organizations currently are compensated at a rate of up to the Maximum Rate of .25% annually of the average net assets of each Fund with respect to which they provide or have provided shareholder support services. Customer further acknowledges that BNY is a Service Organization and is paid, and hereby consents to such payment, by the Fund up to the Maximum Rate annually of the average daily balance of the Account invested in the Fund for shareholder support services rendered to the Fund by BNY, which services may include, without limitation, answering client's inquiries regarding the Fund, assistance to clients in changing dividend options, account designations and addresses, processing purchase and redemption transactions, providing periodic statements showing a client's account balance and the integration of such statement with other transactions, arranging for BNY wires, and providing such other information and services as the Fund's distributor or Customer reasonably may request. Customer further acknowledges that the Fund may purchase securities from or through BNY or its affiliates, may engage in repurchase transactions with BNY or its affiliates, may place funds on deposit in accounts with BNY or its affiliates and receive interest income thereon and may obtain other services from BNY for which BNY is paid a fee. INVESTMENT MAINTENANCE FEE: BNYNA will charge an investment maintenance fee with respect to investments in the Fund, calculated at an annual rate of up to .33 basis points on average total monthly account balances. The investment maintenance fee will be charged [monthly]. This Authorization and Direction is executed, acknowledged and consented to at Vernon, California on June 21, 2006. CITY OF VE Z N By: �L_ Name: Bruce V. Malkenhorst, Jr. Title: Acting City Clerk Awr Securities Servicing The Bank of New York Trust Company, N.A. " T,eBANI 700 South Flower Street WNEW YO P ., Suite 500 Los Angeles, CA 90017 AUTHORIZATION AND DIRECTION TO THE BANK OF NEW YORK TRUST COMPANY, N.A. TO INVEST CASH BALANCES IN MONEY MARKET MUTUAL FUNDS THROUGH THE BANK OF NEW YORK CUSTOMER NAME (the "Customer'); The City of Vernon ACCOUNT (the "Account"): Vernon Escrow 2006 Light & Power Stabilization Account AGREEMENT (Description): Custody Escrow Agent - ACCOUNT NUMBER: 800459 FUND CHOICE (the "Fund"): AIM GOVERNMENT & AGENCY PORTFOLIO PRIVATE (9999035) These instructions supersede any previous instructions which pertain to the investment of cash in the Account. AUTHORIZATION AND DIRECTION The Bank of New York Trust Company, N.A. ("BNYNA:'), through its affiliate, The Bank of New York ("BNY"), is hereby authorized and directed to invest any available cash in the Account in shares of the Fund and to redeem shares of the Fund to meet the cash requirements of the Account. Customer may, from time to time, direct BNYNA in writing to redeem and exchange shares of the Fund for shares of, or to invest available cash or the proceeds from any redemption in, another eligible investment and BNYNA shall comply with such direction. Customer represents and warrants to BNYNA that it is authorized and empowered to direct BNYNA to make the - investment specified herein through BNY and that the investment authorized herein is an authorized investment. PROSPECTUS: Customer has read the Prospectus of the Fund and has independently made the determination to direct BNYNA, through BNY, to invest available cash in the Account in shares of the Fund. Customer understands that the Fund is not an obligation of, or recommended, endorsed or guaranteed in any way by, BNY, its affiliates or any other bank that the Fund is not insured by an agency or instrumentality of the United States, such as the Federal Deposit Insurance Corporation; and that investments in the Fund may be subject to investment risks, including possible loss of the principal amount invested. Customer further understands that, other than -with respect to the BNY Hamilton Funds, neither BNY nor its affiliates has participated in the preparation of the Prospectus or is responsible for its content. With respect to the BNY Hamilton Funds, Customer understands, and hereby acknowledges, that BNY provides investment advisory and other services to the BNY Hamilton Funds, and is compensated for such services. PERIODIC STATEMENTS: Customer agrees that transactions in the Fund will be reported only in BNYNA's regular periodic account statements. VOTING SHARES: Customer assumes the obligation and retains the right to vote all shares of the Fund held hereunder for the benefit of the Account. SHAREHOLDER SERVICES FEES: Customer acknowledges that the Fund is authorized to make payments from its management fee or any other source available to parties such as banks or broker -dealers ("Service Organizations") that provide shareholder support services to the Fund and that Service Organizations currently are compensated at a rate of up to the Maximum Rate of .25% annually of the average net assets of each Fund with respect to which they provide or have provided shareholder support services. Customer further acknowledges that BNY is a Service Organization and is paid, and hereby consents to such payment, by the Fund up to the Maximum Rate annually of the average daily balance of the Account invested in the Fund for shareholder support services rendered to the Fund by BNY, which services may include, without limitation, answering client's inquiries regarding the Fund, assistance to clients in changing dividend options, account designations and addresses, processing purchase and redemption transactions, providing periodic statements showing a client's account balance and the integration of such statement with other transactions, arranging for BNY wires, and providing such other information and services as the Fund's distributor or Customer reasonably may request. Customer further acknowledges that the Fund may purchase securities from or through BNY or its affiliates, may engage in repurchase transactions with BNY or its affiliates, may place funds on deposit in accounts with BNY or its affiliates and receive interest income thereon and may obtain other services from BNY for which BNY is paid a fee. INVESTMENT MAINTENANCE FEE: BNYNA will charge an investment maintenance fee with respect to investments in the Fund, calculated at an annual rate of up to .33 basis points on average total monthly account balances. The investment maintenance fee will be charged [monthly]. This Authorization and Direction is executed, acknowledged and consented to at Vernon, California on June 21, 2006. n CITY OF VERN By: Name: Bruce V. Malkenhorst, Jr. Title: Acting City Clerk OG 0G17 r{ , BAN K t_- �/_NFW YORK. June 2, 2006 Ms. Sharon L. Duckworth City Treasurer City of Vernon 4305 Santa Fe Avenue Vernon, CA 90058 sduckworth@ci.vemon.ca.us Re: City of Vernon (Morgan Stanley Debt Service Account City of Vernon (BNY Citi Gas Account) City of Vernon (Legal Counsel Disbursement Account City of Vernon (Light & Power Stablization Account Dear Ms. Duckworth: On behalf of The Bank of New York Trust Company, N. A. ("BNY") we greatly appreciate the opportunity to present our proposal to provide escrow agent services on the above referenced transactions. Attached is our Fee Schedule, but please read on to discover more about the differences that BNY offers. Inherent in the process of identifying the financing team to bring an important debt financing to market is selecting an Escrow Agent who can assist the issuer in the on -going administrative process throughout the life of the engagement and is committed, professional and experienced. No other institution can demonstrate their commitment to providing trustee services to the public finance marketplace better than BNY. Through our enhanced systems and experienced professionals dedicated - - to -serving the needs of the municipal finance market, we provide our clientele industry leading services for today and the future. The Bank of New York Company, Inc. is one of the largest bank holding companies in the US, which has been ranked the number one overall trustee in terms of new debt issuance for three consecutive years, and is one of the leading Corporate Trust banks with over $3 trillion in outstanding debt. A Difference through Our People and Service The City will be serviced locally by their existing administrative team from our Los Angeles office, led by Ms. Aurora Quiazon. Aurora's professional profile is included below, for your review. Aurora Quiazon Assistant Vice President (213) 630-6236 aquiqzon@bqnkoEhy.co ZAFinance\Custody Escrow\BNY Fee Proposal 7-17-06.doc l/ W YORK Aurora has over twenty-five years banking experience, with the last thirteen years being in Corporate Trust administration, she is knowledgeable in the administration and management of municipal and corporate debt issues. Aurora holds a Bachelor of Science degree in Education from Philippine Normal College, and has completed the Cannon Financial Institute Corporate Trust School. PLEASE NOTE: As a standard procedure upon closing a bond issue, each administrator is prepared to deliver a detailed account synopsis including all information relating to investments, debt service, compliance, and requisition payments (as applicable), for use by the issuer and financing team. This synopsis is not only an aid for our clients, but for our administrators as well, as it enables them to thoroughly review the governing documents and establish useful ticklers andprocedures. This subsequently serves as a great tool to assist our clients in our long-term relationship between the Issuer and The Bank of New York Trust Company. A Difference Through Our bevel of Experience As an experienced member of your financing team, we provide the qualifications you require to ensure that, with your other financing team members, you have assembled the finest professionals in their field, thereby making your financing both attractive and successful. Attached you will find our complete Fee Schedule for this engagement detailing related fees and expenses associated with our appointment. You will find that the ultimate success of your offering is as critical to the Bank as it is to you. Further, you will discover that the responsiveness and superior service that characterize our performance are the very strengths that have made The Bank of New York Trust Company, N. A. a leading provider of securities services and a prime candidate for all your trustee and agency needs. Should you have any questions regarding our proposal or attached fee schedule, please feel free to contact me at (213) 630-6457. Very truly yours, Jose Matamoros Vice President ZAFinance\Custody Escrow\BNY Fee Proposal 7-17-06.doc VT Y. City of Vernon (Morgan Stanley Debt Service Account City of Vernon (BNY Citi Gas Account) City of Vernon (Legal Counsel Disbursement Account City of Vernon (Light & Power Stablization Account Fee Schedule July 17, 2006 Upon appointment of BNY as escrow agent, the Issuer shall be responsible for the payment of the fees, expenses and charges as set forth in this Fee Schedule. ACCEPTANCE FEE Waived This one time charge is payable at the time of the closing and includes the review and execution of the Indenture and all documents submitted in support thereof, acceptance of the trust, establishment of procedures and controls and set-up of trust accounts. Based upon the transaction described, and if you agree to use our form of Agreement, we do not anticipate the need to hire outside counsel but reserve the right to employ counsel and bill at cost if deemed appropriate or required. ANNUAL, ADMINISTRATIVE FEE/per account This annual fee is paid in advance for said period, trust account. INVESTMENT COMPENSATION $2,000 or any portion that any funds are deposited in the With respect to investments in money market mutual funds (other than the Hamilton Funds), the investment maintenance fee will be calculated at an annual rate of 37 basis points on average total monthly account balances. With respect to investments in money market mutual funds for which BNY provides shareholder services BNY (or its affiliates) may also receive and retain additional fees from the mutual funds (or their affiliates) for shareholder services as set forth in the Authorization and Direction to BNY to Invest Cash Balances in Money Market Mutual Funds. REQUISITION / DISBURSEMENT FEE (check or wire) /per transaction $35 MISCELLANEOUS FEES The fees for performing extraordinary or other services not contemplated at the time of the execution of the transaction or not specifically covered elsewhere in this schedule will be commensurate with the service to be provided and will be charged in BNY's sole discretion. These extraordinary services may include, but are not limited to, supplemental agreements, consent operations, unusual releases, tenders or sinking fund redemptions, the preparation of special or interim reports, custody of collateral, a one- time fee to be charged upon termination of an engagement. Counsel, accountants, special agents and others will be charged at the actual amount of fees and expenses billed. ZAFinanceTus[ody Escrow'BNY Fee Proposal 7-17-06.doc t- OUT-OF-POCKET EXPENSES At Cost Additional out-of-pocket expenses may include, but are not limited to, telephone; facsimile; courier; copying; postage; supplies; statutory filing charges, including UCC amendments, continuations, and termination fees; and expenses of BNY's representative(s) and Counsel for attending special meetings. Fees and expenses of BNY's representatives and Counsel will be charged at the actual amount of fees and expenses charged and all other expenses will be charged at cost. DFinancelustody Escrow\BNY Fee Proposal 7-17-06.doc / 7 AN TERMS AND DISCLOSURES TERMS OF PROPOSAL Final acceptance of the appointment as trustee under the Indenture is subject to approval of authorized officers of BNY and full review and execution of all documentation related hereto. Please note that if this transaction does not close, you will be responsible for paying any expenses incurred, including Counsel fees. We reserve the right to terminate this offer if we do not enter into final written documents within three months from the date this document is first transmitted to you. Fees may be subject to adjustment during the life of the engagement. MISCELLANEOUS The terms of this Fee Schedule shall govern the matters set forth herein and shall not be superseded or modified by the terms of the Indenture. This Fee Schedule shall be governed by the laws of the State of California without reference to laws governing conflicts. BNY and the undersigned agree to jurisdiction of the federal and state courts located in the City/County of San Francisco, State of California. CUSTOMER NOTICE REQUIRED BY THE USA PATRIOT ACT To help the US government fight the funding of terrorism and money laundering activities, US Federal law requires all financial institutions to obtain, verify, and record information that identifies each person (whether an individual or organization) for which a relationship is established. What this means to you: When you establish a relationship with BNY, we will ask you to provide certain information (and documents) that will help us to identify you. We will ask for your organization's name, physical address, tax identification or other government registration number and other information that will help us to identify you. We may also ask for a Certificate of Incorporation or similar document or other pertinent identifying documentation for your type of organization. We thank you for your assistance. Accepted By: Signature Date: July 17, 2006 Name: Bruce V. Malkenhorst, Jr. Title Acting City Clerk For BNYTC: 0 June 2, 2006 Jose Matamoros Vice President ZAFinanceTustody Escrow\BNY Fee Proposal 7-17-06.doc ESCROW AGREEMENT Between The City of Vernon .And THE BANK OF NEW YORK TRUST COMPANY, N.A. Dated as of June 7, 2006 ACCOUNT NUMBER 800456 City of Vernon Morgan Stanley Debt Service Account ESCROW AGREEMENT made this 7th day of June, 2006 and between THE BANK OF NEW YORK TRUST COMPANY, N.A. ("Escrow Agent") and the undersigned (collectively the 'Depositors" and individually the 'Depositor"). Depositors and Escrow Agent hereby agree that, in consideration of the mutual promises and covenants contained herein, Escrow Agent shall hold in escrow and shall distribute Escrow Property (as defined herein) in accordance with and subject to the following Instructions and Terms and Conditions: I. INSTRUCTIONS: Escrow Property The property and/or funds deposited or to be deposited with Escrow Agent by Depositors shall be as follows: $1,000,000.00 Amount deposited on 6/12/06 and additional amounts to be received by city from time to time. The foregoing property and/or funds, plus all interest, dividends and other distributions and payments thereon (collectively the 'Distributions") received by Escrow Agent, less any property and/or funds distributed or paid in accordance with this Escrow Agreement, are collectively referred to herein as "Escrow Property." 2. Investment of Escrow Property (Depositors are to select one of the following options, initial the option selected and, if "(b)" is selected, insert the appropriate information.) (a) Escrow Agent shall have no obligation to pay interest on or to invest or reinvest any Escrow Property deposited or received_ hereunder. X (b) Escrow Agent shall invest or reinvest Escrow Property, without distinction between principal and income, in accordance with the following: AIM Government & Agency Portfolio Private (9999035) Escrow Agent shall have no liability for any loss arising from or related to any such investment other than in accordance with paragraph 4 of the Terms and Conditions. 3. Distribution of Escrow Property Escrow Agent is directed to hold and distribute the Escrow Property in the following manner: Upon written direction received from an "Authorized Officer" of the City of Vernon. 4. Addresses Notices, instructions and other communications shall be sent to Escrow Agent, Corporate Trust Department, 700 South Flower Street — Suite 500, Los Angeles, CA 90017 and to Depositors as follows: City of Vernon, 4305 Santa Fe Avenue, Vernon, CA 90058 5. Distribution of Escrow Property Upon Termination Upon termination of this Escrow Agreement, Escrow Property then held hereunder shall be distributed as follows: Upon written direction received from an "Authorized Officer" of the City of Vernon. 6. Compensation (a). At the time of execution of this Escrow Agreement, Depositors shall pay Escrow Agent Special Escrow fee of $2,000.00 , payable upon execution of this Agreement. Said fee will be payable annually in advance. (b). Depositors shall pay a disbursement transaction fee of $35 for each disbursement directed by Depositor. (c). Depositors shall be responsible for and shall reimburse Escrow Agent upon demand for all expenses, disbursements and advances incurred or made by Escrow Agent in connection with this Agreement. In accordance with Escrow Agent's fee schedule dated as of June 5, 2006. II. TERMS AND CONDITIONS 1. The duties, responsibilities and obligations of Escrow Agent shall be limited to those expressly set forth herein and no duties, responsibilities or obligations shall be inferred or implied. Escrow Agent shall not be subject to, nor required to comply with, any other agreement between or among any or all of the Depositors or to which any Depositor is a party, even though reference thereto may be made herein, or to comply with any direction or instruction (other than those contained herein or delivered in accordance with this Escrow Agreement) from any Depositor or any entity acting on its behalf. Escrow Agent shall not be required to, and shall not, expend or risk any of its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder. 2. This Agreement is for the exclusive benefit of the parties hereto and their respective successors hereunder, and shall not be deemed to give, either express or implied, any legal or equitable right, remedy, or claim to any other entity or person whatsoever. 3. If at any time Escrow Agent is served with any judicial or administrative order, judgment, decree, writ or other form of judicial or administrative process which in any way affects Escrow Property (including but not limited to orders of attachment or garnishment or other forms of levies or injunctions or stays relating to the transfer of Escrow Property), Escrow Agent is authorized to comply therewith in any manner as it or its legal counsel of its own choosing deems appropriate; and if Escrow Agent complies with any such judicial or administrative order, judgment, decree, writ or other form of judicial or administrative process, Escrow Agent shall not be liable to any of the parties hereto or to any other person or entity even though such order, judgment, decree, writ or process may be subsequently modified or vacated or otherwise determined to have been without legal force or effect. 4. (a) Escrow Agent shall not be liable for any action taken or omitted or for any loss or injury resulting from its actions or its performance or lack of performance of its duties hereunder in the absence of gross negligence or willful misconduct on its part. In no event shall Escrow Agent be liable (i) for acting in accordance with or relying upon any instruction, notice, demand, certificate or document from any Depositor or any entity acting on behalf of any Depositor, (ii) for any consequential, punitive or special damages, (iii) for the acts or omissions of its nominees, correspondents, designees, subagents or subcustodians, or (iv) for an amount in excess of the value of the Escrow_ Property, valued as of the date of deposit. (b) If any fees, expenses or costs incurred by, or any obligations owed to, escrow Agent hereunder are not promptly paid when due, Escrow Agent may reimburse itself therefor from the Escrow Property and may sell, convey or otherwise dispose of any Escrow Property for such purpose. (c) As security for the due and punctual performance of any and all of Depositors' obligations to Escrow Agent hereunder, now or hereafter arising, Depositors, individually and collectively, hereby pledge, assign and grant to Escrow Agent a continuing security interest in, and a lien on, the Escrow Property and all Distributions thereon or additions thereto (whether such additions are the result of deposits by Depositors or the investment of Escrow Property). The security interest of Escrow Agent shall at times be valid, perfected and enforceable by Escrow Agent against Depositors and all third parties in accordance with the terms of this Escrow Agreement. (d) Escrow Agent may consult with legal counsel at the expense of the Depositors as to any matter relating to this Escrow Agreement, and Escrow Agent shall not incur any liability in acting in good faith in accordance with any advice from such counsel. (e) Escrow Agent shall not incur any liability for not performing any act or fulfilling any duty, obligation or responsibility hereunder by reason of any occurrence beyond the control of Escrow Agent (including but not limited to any act or provision of any present or future law or regulation or governmental authority, any act of God or war, or the unavailability of the Federal Reserve Bank wire or telex or other wire or communication facility). 5. Unless otherwise specifically set forth herein, Escrow Agent shall proceed as soon as practicable to collect any checks or other collection items at any time deposited hereunder. All such collections shall be subject to Escrow Agent's usual collection practices or terms regarding items received by Escrow Agent for deposit or collection. Escrow Agent shall not be required, or have any duty, to notify anyone of any payment or maturity under the terms of any instrument deposited hereunder, nor to take any legal action to enforce payment of any check, note or security deposited hereunder or to exercise any right or privilege which may be afforded to the holder of any such security. 6. Escrow Agent shall provide to Depositors monthly statements identifying transactions, transfers or holdings of Escrow Property and each such statement shall be deemed to be correct and final upon receipt thereof by the Depositors unless Escrow Agent is notified in writing to the contrary within thirty (30) business days of the date of such statement. 7. _ Escrow Agent shall not be responsible in any respect for _the _form, execution,_ validity, value or genuineness of documents or securities deposited hereunder, or for any description therein, or for the identity, authority or rights of persons executing or delivering or purporting to execute or deliver any such document, security or endorsement. 8. Notices, instructions or other communications shall be in writing and shall be given to the address set forth in the "Addresses" provision herein (or to such other address as may be substituted therefor by written notification to Escrow Agent or Depositors). Notices To Escrow Agent shall be deemed to be given when actually received by Escrow Agent's Corporate Trust Department. Escrow Agent is authorized to comply with and rely upon any notices, instructions or other communications believed by it to have been sent or given by Depositors or by a person or persons authorized by Depositors. Whenever under the terms hereof the time for giving a notice or performing an act falls upon a Saturday, Sunday, or banking holiday, such time shall be extended to the next day on which Escrow Agent is open for business. 9: Depositors, jointly and severally, shall be liable for and shall reimburse and indemnify Escrow Agent and hold Escrow Agent harmless against any and all claims, losses, liabilities, costs, damages or expenses (including reasonable attorneys' fees and expenses) (collectively, "Losses") arising from or in connection with or related to this Escrow Agreement or being Escrow Agent hereunder (including but not limited to Losses incurred by Escrow Agent in` connection with its successful defense, in whole or in part of any claim of gross negligence or willful misconduct on its part), provided, however, that nothing contained herein shall require Escrow Agent to be indemnified for Losses caused by its gross negligence or willful misconduct. 10. (a) Depositors may remove Escrow Agent at any time by giving to Escrow Agent thirty (30) calendar day's prior notice in writing signed by all Depositors. Escrow Agent may resign at any time by giving to Depositors thirty (30) calendar days prior written notice thereof. (b) Within ten (10) calendar days after giving the foregoing notice of removal to Escrow Agent or receiving the foregoing notice of resignation from Escrow Agent, all Depositors shall jointly agree on and appoint a successor Escrow Agent. If a successor Escrow Agent has not accepted such appointment by the end of such 10-day period, Escrow Agent may, in its sole discretion, deliver the Escrow Property to any of the Depositors at the address provided herein or may apply to a court of competent jurisdiction for the appointment of a successor Escrow Agent or for other appropriate relief. The costs and expenses (including reasonable attorneys' fees and expenses) incurred by Escrow Agent in connection with such proceeding shall be paid by, and be deemed a joint and several obligation of, the Depositors. (c) Upon receipt of the identity of the successor Escrow Agent, Escrow Agent shall either deliver the Escrow Property then held hereunder to the successor Escrow Agent, less Escrow Agent's fees, costs and expenses or other obligations owed to Escrow Agent, or hold such Escrow Property (or any portion thereof), pending distribution, until all such fees, costs and expenses or other obligations are paid. (d) Upon delivery of the Escrow Property to successor Escrow Agent, Escrow Agent shall have no further duties, responsibilities or obligations hereunder. 11. (a) In the event of any ambiguity or uncertainty hereunder or in any notice, instruction or other communication received by Escrow Agent hereunder, Escrow Agent may, in its sole discretion, refrain from taking any action other than retain possession of the Escrow Property, unless Escrow Agent receives written instructions, signed by all Depositors, which eliminates such ambiguity or uncertainty. (b) In the event of any dispute between or conflicting claims by or among the Depositors and/or any other person or entity with respect to any Escrow Property, Escrow Agent shall be entitled, in its sole discretion, to refuse to comply with any and all claims, demands or instructions with respect to such Escrow Property so long as such dispute or conflict shall continue, and Escrow Agent shall not be or become liable in any way to the Depositors for failure or refusal to comply with such conflicting claims, demands or instructions. Escrow Agent shall be entitled to refuse to act until, in its sole discretion, either (i) such conflicting or adverse claims or demands shall have been determined by a final order, judgment or decree of a court of competent jurisdiction, which order, judgment or decree is not subject to appeal, or settled by agreement between the conflicting parties as evidenced in a writing satisfactory to Escrow Agent or (ii) Escrow Agent shall have received security or an indemnity satisfactory to its sufficient to hold it harmless from and against any and all Losses which it may incur by reason of so acting. Escrow Agent may, in addition, elect, in its sole discretion, to commence an interpleader action or seek other judicial relief or orders as it may deem, in its sole discretion, necessary. The costs and expenses (including reasonable attorneys' fees and expenses) incurred in connection with such proceeding shall be paid by, and shall be deemed a joint and several obligation of, the Depositors. 12. This Agreement shall be interpreted, construed, enforced and administered in accordance with the internal substantive laws (and, not the choice of law rules) of the State of California. Each of the Depositors hereby submits to the personal jurisdiction of and each agrees that all proceedings relating hereto shall be brought in courts located within the City and State of California or elsewhere as Escrow Agent may select. Each of the Depositors hereby waives the right to trial by jury and to assert counterclaims in any such proceedings. To the extent that in any jurisdiction any Depositor may be entitled to claim, for itself or its assets, immunity from suit, execution, attachment (whether before or after judgment) or other legal process, each hereby irrevocably- agrees not to claim, and hereby _ waives, such immunity. Each Depositor waives personal service of process and consents to service of process by certified or registered mail, return receipt requested, direction to it at the address last specified for notices hereunder, and such service shall be deemed completed ten (10) calendar days after the same is so mailed. 13. Except as otherwise permitted herein, this Escrow Agreement may be modified only by a written amendment signed by all the parties hereto, and no waiver of any provision hereof shall be effective unless expressed in a writing signed by the party to be charged. 14. The rights and remedies conferred upon the parties hereto shall be cumulative, and the exercise or waiver of any such right or remedy shall not preclude or inhibit the exercise of any additional rights or remedies. The waiver of any right or remedy hereunder shall not preclude the subsequent exercise of such right or remedy. 15. Each Depositor hereby represents and warrants (a) that this Escrow Agreement has been duly authorized, executed and delivered on its behalf and constitutes its legal, valid and binding obligation and (b) that the execution, delivery and performance of this Escrow Agreement by Depositor do not and will not violate any applicable law or regulation. 16. The invalidity, illegality or unenforceability of any provision of this Agreement shall in no way affect the validity, legality or enforceability of any other provision; and if any provision is held to be enforceable as a matter of law, the other provisions shall not be affected thereby and shall remain in full force and effect. 17. This Agreement shall constitute the entire agreement of the parties with respect to the subject matter and supersedes all prior oral or written agreements in regard thereto. 18. This Agreement shall terminate upon the distribution of all Escrow Property from the Account. The provisions of these Terms and Conditions shall survive termination of this Escrow Agreement and/or the resignation or removal of the Escrow Agent. 19. No printed or other material in any language, including prospectuses, notices, reports, and promotional material which mentions "BNY Western Trust Company" by name or the rights, powers, or duties of the Escrow Agent under this Agreement shall be issued by any other parties hereto, or on such party's behalf, without the prior written consent of Escrow Agent. 20. The headings contained in this Agreement are for convenience of reference only and shall have no effect on the interpretation or, operation_ hereof. 21. This Escrow Agreement may be executed by each of the parties hereto in any number of counterparts, each of which counterpart, when so executed and delivered, shall be deemed to be an original and all such counterparts shall together constitute one and the same agreement. IN WITNESS WHEREOF, each of the parties have caused this Escrow Agreement to be executed by a duly authorized officer as of the day and year first written above. CITY OF VERNON By:�'�` Na e: ;Leonis C. Malburg Title: Mayor ATTEST: By: Bruce V. Malkenhorst, Jr. Acting City Clerk APPROVED AS TO FORM: Eric T. Fre ch, City Attorney THE BANK OF NEW YORK TRUST COMPANY, N.A., as Escrow Agent Name: Aurora Quiazdil Title: Assistant Vice President ESCROW AGREEMENT Between The City of Vernon And THE BANK OF NEW YORK TRUST COMPANY, N.A. Dated as of June 7, 2006 ACCOUNT NUMBER 800457 City of Vernon BNY Citi Gas Account ESCROW AGREEMENT made this 7ch day of June, 2006 and between THE BANK OF NEW YORK TRUST COMPANY, N.A. ('Escrow Agent") and the undersigned (collectively the 'Depositors" and individually the 'Depositor").. Depositors and Escrow Agent hereby agree that, in consideration of the mutual promises and covenants contained herein, Escrow Agent shall hold in escrow and shall distribute Escrow Property (as defined herein) in accordance with and subject to the following Instructions and Terms and Conditions: I. INSTRUCTIONS: Escrow Property The property and/or funds deposited or to be deposited with Escrow Agent by Depositors shall be as follows: $1,000.00 Amount deposited on 6/12/06 and additional amounts to be received by city from time to time. The foregoing property and/or funds, plus all interest, dividends and other distributions and payments thereon (collectively the 'Distributions") received by Escrow Agent, less any property and/or funds distributed or paid in accordance with this Escrow Agreement, are collectively referred to herein as "Escrow Property." 2. Investment of Escrow Property (Depositors are to select one of the following options, initial the option selected and, if "(b)" is selected, insert the appropriate information.) (a) Escrow Agent shall have no obligation to pay interest on or to invest or reinvest any Escrow Property deposited or received hereunder. X (b) Escrow Agent shall invest or reinvest Escrow Property, without distinction between principal and income, in accordance with the following: AIM Government & Agency Portfolio Private (9999035) Escrow Agent shall have no liability for any loss arising from or related to any such investment other than in accordance with paragraph 4 of the Terms and Conditions. 3. Distribution of Escrow Property Escrow Agent is directed to hold and distribute the Escrow Property in the following manner: Upon written direction received from an "Authorized Officer" of the City of Vernon. 4. Addresses Notices, instructions and other communications shall be sent to Escrow Agent, Corporate Trust Department, 700 South Flower Street — Suite 500, Los Angeles, CA 90017 and to Depositors as follows: City of Vernon, 4305 Santa Fe Avenue, Vernon, CA 90058 5. Distribution of Escrow Property Upon Termination Upon termination of this Escrow Agreement, Escrow Property then held hereunder shall be distributed as follows: Upon written direction received from an "Authorized Officer" of the City of Vernon. 6. Compensation (a). At the time of execution of this Escrow Agreement, Depositors shall pay Escrow Agent Special Escrow fee of $2,000.00 , payable upon execution of this Agreement. Said fee will be payable annually in advance. (b). Depositors shall pay a disbursement transaction fee of $35 for each disbursement directed by Depositor. ___ (c). Depositors shall be responsible for and shall reimburse Escrow Agent upon demand for all expenses, disbursements and advances incurred or made by Escrow Agent in connection with this Agreement. In accordance with Escrow Agent's fee schedule dated as of June 5, 2006. II. TERMS AND CONDITIONS 1. The duties, responsibilities and obligations of Escrow Agent shall be limited to those expressly set forth herein and no duties, responsibilities or obligations shall be inferred or implied. Escrow Agent shall not be subject to, nor required to . comply with, any other agreement between or among any or all of the Depositors or to which any Depositor is a party, even though reference thereto may be made herein, or to comply with any direction or instruction (other than those contained herein or delivered in accordance with this Escrow Agreement) from any Depositor or any entity acting on its behalf. Escrow Agent shall not be required to, and shall not, expend or risk any of its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder. 2. This Agreement is for the exclusive benefit of the parties hereto and their respective successors hereunder, and shall not be deemed to give, either express or implied, any legal or equitable right, remedy, or claim to any other entity or person whatsoever. 3. If at any time Escrow Agent is served with any judicial or administrative order, judgment, decree, writ or other form of judicial or administrative process which in any way affects Escrow Property (including but not limited to orders of attachment or garnishment or other forms of levies or injunctions or stays relating to the transfer of Escrow Property), Escrow Agent is authorized to comply therewith in any manner as it or its legal counsel of its own choosing deems appropriate; and if Escrow Agent complies with any such judicial or administrative order, judgment, decree, writ or other form of judicial or administrative process, Escrow Agent shall not be liable to any of the parties hereto or to any other person or entity even though such order, judgment, decree, writ or process may be subsequently modified or vacated or otherwise determined to have been without legal force or effect. 4. (a) Escrow Agent shall not be liable for any action taken or omitted or for any loss or injury resulting from its actions or its performance or lack of performance of its duties hereunder in the absence of gross negligence or willful misconduct on its art. In no event shall Escrow Agent be liable i for actin in accordance p g () g with or relying upon any instruction, notice, demand, certificate or document from any Depositor or any entity acting on behalf of any Depositor, (ii) for any consequential, punitive or special damages, (iii) for the acts or omissions of its nominees, correspondents, designees, subagents or subcustodians, or (iv) for an amount in excess of the value of the Escrow Property,_ valued_ as of the date of _ - deposit. (b) If any fees, expenses or costs incurred by, or any obligations owed to, escrow Agent hereunder are not promptly paid when due, Escrow Agent may reimburse itself therefor from the Escrow Property and may sell, convey or otherwise dispose of any Escrow Property for such purpose. (c) As security for the due and punctual performance of any and all of Depositors' obligations to Escrow Agent hereunder, now or hereafter arising, Depositors, individually and collectively, hereby pledge, assign and grant to Escrow Agent a continuing security interest in, and a lien on, the Escrow Property and all Distributions thereon or additions thereto (whether such additions are the result of deposits by Depositors or the investment of Escrow Property). The security interest of Escrow Agent shall at times be valid, perfected and enforceable by Escrow Agent against Depositors and all third parties in accordance with the terms of this Escrow Agreement. (d) Escrow Agent may consult with legal counsel at the expense of the Depositors as to any matter relating to this Escrow Agreement, and Escrow Agent shall not incur any liability in acting in good faith in accordance with any advice from such counsel. (e) Escrow Agent shall not incur any liability for not performing any act or fulfilling any duty, obligation or responsibility hereunder by reason of any occurrence beyond the control of Escrow Agent (including but not limited to any act or provision of any present or future law or regulation or governmental authority, any act of God or war, or the unavailability of the Federal Reserve Bank wire or telex or other wire or communication facility). 5. Unless otherwise specifically set forth herein, Escrow Agent shall proceed as soon as practicable to collect any checks or other collection items at any time deposited hereunder. All such collections shall be subject to Escrow Agent's usual collection practices or terms regarding items received by Escrow Agent for deposit or collection. Escrow Agent shall not be required, or have any duty, to notify anyone of any payment or maturity under the terms of any instrument deposited hereunder, nor to take any legal action to enforce payment of any check, note or security deposited hereunder or to exercise any right or privilege which may be afforded to the holder of any such security. 6. Escrow Agent shall provide to Depositors monthly statements identifying transactions, transfers or holdings of Escrow Property and each such statement shall be deemed to be correct and final upon receipt thereof by the Depositors unless Escrow Agent is notified in writing to the contrary within thirty (30) business days of the date of such statement. -__ 7. - -_ Escrow Agent shall not be responsible in any respect for the form, execution, validity, value or genuineness of documents or securities deposited hereunder, or for any description therein, or for the identity, authority or rights of persons executing or delivering or purporting to execute or deliver any such document, security or endorsement. Notices, instructions or other communications shall be in writing and shall be given to the address set forth in the "Addresses" provision herein (or to such other address as may be substituted therefor by written notification to Escrow Agent or Depositors). Notices To Escrow Agent shall be deemed to be given when actually received by Escrow Agent's Corporate Trust Department. Escrow Agent is authorized to comply with and rely upon any notices, instructions or other communications believed by it to have been sent or given by Depositors or by a person or persons authorized by Depositors. Whenever under the terms hereof the time for giving a notice or performing an act falls upon a Saturday, Sunday, or banking holiday, such time shall be extended to the next day on which Escrow Agent is open for business. 9. Depositors, jointly and severally, shall be liable for and shall reimburse and indemnify Escrow Agent and hold Escrow Agent harmless against any and all claims, losses, liabilities, costs, damages or expenses (including reasonable attorneys' fees and expenses) (collectively, "Losses") arising from or in connection with or related to this Escrow Agreement or being Escrow Agent hereunder (including but not limited to Losses incurred by Escrow Agent in connection with its successful defense, in whole or in part of any claim of gross negligence or willful misconduct on its part), provided, however, that nothing contained herein shall require Escrow Agent to be indemnified for Losses caused by its gross negligence or willful misconduct. 10. . (a) Depositors may remove Escrow Agent at any time by giving to Escrow Agent thirty (30) calendar day's prior notice in writing signed by all Depositors. Escrow Agent may resign at any time by giving to Depositors thirty (30) calendar days prior written notice thereof. (b) Within ten (10) calendar days after giving the foregoing notice of removal to Escrow Agent or receiving the foregoing notice of resignation from Escrow Agent, all Depositors shall jointly agree on and appoint a successor Escrow Agent. If a successor Escrow Agent has not accepted such appointment by the end of such 10-day period, Escrow Agent may, in its sole discretion, deliver the Escrow Property to any of the Depositors at the address provided herein or may apply to a court of competent jurisdiction for the appointment of a successor Escrow Agent or for other appropriate relief. The costs and expenses (including reasonable attorneys' fees and expenses) incurred by Escrow Agent in connection with such proceeding shall be paid by, and be deemed a joint and several obligation of, the Depositors. (c) Upon receipt of the identity_of the successor_ Escrow _Agent, Escrow Agent _ shall either deliver the Escrow Property then held hereunder to the successor Escrow Agent, less Escrow Agent's fees, costs and expenses or other obligations owed to Escrow Agent, or hold such Escrow Property (or any portion thereof), pending distribution, until all such fees, costs and expenses 'or other obligations are paid. (d) Upon delivery of the Escrow Property to successor Escrow Agent, Escrow Agent shall have no further duties, responsibilities or obligations hereunder. 11. (a) In the event of any ambiguity or uncertainty hereunder or in any notice, instruction or other communication received by Escrow Agent hereunder, Escrow Agent may, in its sole discretion, refrain from taking any action other than retain possession of the Escrow Property, unless Escrow Agent receives written instructions, signed by all Depositors, which eliminates such ambiguity or uncertainty. (b) In the event of any dispute between or conflicting claims by or among the Depositors and/or any other person or entity with respect to any Escrow Property, Escrow Agent shall be entitled, in its sole discretion, to refuse to comply with any and all claims, demands or instructions with respect to such Escrow Property so long as such dispute or conflict shall continue, and Escrow Agent shall not be or become liable in any way to the Depositors for failure or refusal to comply with such conflicting claims, demands or instructions. Escrow Agent shall be entitled to refuse to act until, in its sole discretion, either (i) such conflicting or adverse claims or demands shall have been determined by a final order, judgment or decree of a court of competent jurisdiction, which order, judgment or decree is not subject to appeal, or settled by agreement between the conflicting parties as evidenced in a writing satisfactory to Escrow Agent or (ii) Escrow Agent shall have received security or an indemnity satisfactory to its sufficient to hold it harmless from and against any and all Losses which it may incur by reason of so acting. Escrow Agent may, in addition, elect, in its sole discretion, to commence an interpleader action or seek other judicial relief or orders as it may deem, in its sole discretion, necessary. The costs and expenses (including reasonable attorneys' fees and expenses) incurred in connection with such proceeding shall be paid by, and shall be deemed a joint and several obligation of, the Depositors. 12. This Agreement shall be interpreted, construed, enforced and administered in accordance with the internal substantive laws (and not the choice of law rules) of the State of California. Each of the Depositors hereby submits to the personal jurisdiction of and each agrees that all proceedings relating hereto shall be brought in courts located within the City and State of California or elsewhere as Escrow Agent may select. Each of the Depositors hereby waives the right to trial by jury and to assert counterclaims in any such proceedings. To the extent that in any jurisdiction any Depositor may be entitled to claim, for itself or its assets, immunity from suit, execution, attachment (whether before or after judgment) or other legal process, _ each hereby_ irrevocably_ agrees not to claim and -hereby waives, such immunity. Each Depositor waives personal service of process and consents to service of process by certified or registered mail, return receipt requested, direction to it at the address last specified for notices hereunder, and such service shall be deemed completed ten (10) calendar days after the same is so mailed. 13. Except as otherwise permitted herein, this Escrow Agreement may be modified only by a written amendment signed by all the parties hereto, and no waiver of any provision hereof shall be effective unless expressed in a writing signed by the party to be charged. 14. The rights and remedies conferred upon the parties hereto shall be cumulative, and the exercise or waiver of any such right or remedy shall not preclude or inhibit the exercise of any additional rights or remedies. The waiver of any right or remedy hereunder shall not preclude the subsequent exercise of such right or remedy. 15. Each Depositor hereby represents and warrants (a) that this Escrow Agreement has been duly authorized, executed and delivered on its behalf and constitutes its legal, valid and binding obligation and (b) that the execution, delivery and performance of this Escrow Agreement by Depositor do not and will not violate any applicable law or regulation. 16. The invalidity, illegality or unenforceability of any provision of this Agreement shall in no way affect the validity, legality or enforceability of any other provision; and if any provision is held to be enforceable as a matter of law, the other provisions shall not be affected thereby and shall remain in full force and effect. 17. This Agreement shall constitute the entire agreement of the parties with respect to the subject matter and supersedes all prior oral or written agreements in regard thereto. 18. This Agreement shall terminate upon the distribution of all Escrow Property from the Account. The provisions of these Terms and Conditions shall survive termination of this Escrow Agreement and/or the resignation or removal of the Escrow Agent. 19. No printed or other material in any language, including prospectuses, notices, reports, and promotional material which mentions "BNY Western Trust Company" by name or the rights, powers, or duties of the Escrow Agent under this Agreement shall be issued by any other parties hereto, or on such party's behalf, without the prior written- consent of Escrow Agent. 20. The headings contained in this Agreement are for convenience of reference only and shall have no effect on the interpretation or operation hereof. 21. This Escrow Agreement may be executed by each of the parties hereto in any number of counterparts, each of which counterpart, when so executed and delivered, shall be deemed to be an original and all such counterparts shall together constitute one and the same agreement. IN WITNESS WHEREOF, each of the parties have caused this Escrow Agreement to be executed by a duly authorized officer as of the day and year first written above. CITY OF VERNON By- Na me: eonis C. Malburg Title: Mayor ATTEST: /7 Bv: Bruce V. Malkenhorst, Jr. Acting City Clerk APPROVED AS TO FORM: Eric T. Fresch, City Attorney THE BANK OF NEW YORK_TRUST COMPANY, _NA, _as Escrow Agent By: Name: Aurora Quiazon Title: Assistant Vice President ESCROW AGREEMENT Between The City of Vernon And THE BANK OF NEW YORK TRUST COMPANY, N.A. Dated as of June 7, 2006 ACCOUNT NUMBER 800458 City of Vernon Legal Counsel Disbursement Account ESCROW AGREEMENT made this 7ch day of June, 2006 and between THE BANK OF NEW YORK TRUST COMPANY, N.A. ("Escrow Agent") and the undersigned (collectively the 'Depositors" and individually the 'Depositor"). Depositors and Escrow Agent hereby agree that, in consideration of the mutual promises and covenants contained herein, Escrow Agent shall hold in escrow and shall distribute Escrow Property (as defined herein) in accordance with and subject to the following Instructions and Terms and Conditions: I. INSTRUCTIONS: Escrow Property The property and/or funds deposited or to be deposited with Escrow Agent by Depositors shall be as follows: $1,000.00 Amount deposited on 6/12/06 and additional amounts to be received by city from time to time. The foregoing property and/or funds, plus all interest, dividends and other distributions and payments thereon (collectively the 'Distributions") received by Escrow Agent, less any property and/or funds distributed or paid in accordance with this Escrow Agreement, are collectively referred to herein as 'Escrow Property." 2. Investment of Escrow Property (Depositors are to select one of the following options, initial the option selected and, if "(b)" is selected, insert the appropriate information.) (a) Escrow Agent shall have no obligation to pay interest on or to invest or reinvest any Escrow Property deposited or received hereunder. X (b) Escrow Agent shall invest or reinvest Escrow Property, without distinction between principal and income, in accordance with the following: AIM Government & Agency Portfolio Private (9999035) Escrow Agent shall have no liability for any loss arising from or related to any such investment other than in accordance with paragraph 4 of the Terms and Conditions. 3. Distribution of Escrow Property Escrow Agent is directed to hold and distribute the Escrow Property in the following manner: Upon written direction received from an "Authorized Officer" of the City of Vernon. 4. Addresses Notices, instructions and other communications shall be sent to Escrow Agent, Corporate Trust Department, 700 South Flower Street — Suite 500, Los Angeles, CA 90017 and to Depositors as follows: City of Vernon, 4305 Santa Fe Avenue, Vernon, CA 90058 Distribution of Escrow Property pon Termination Upon termination of this Escrow Agreement, Escrow Property then held hereunder shall be distributed as follows: Upon written direction received from an "Authorized Officer" of the City of Vernon. 6. Compensation (a). At the time of execution of this Escrow Agreement, Depositors shall pay Escrow Agent Special Escrow fee of $2,000.00 , payable upon execution of this Agreement. Said fee will be payable annually in advance. (b). Depositors shall pay a disbursement transaction fee of $35 for each disbursement directed by Depositor. (c). Depositors shall be responsible for and shall reimburse Escrow Agent upon demand for all expenses, disbursements and advances incurred or made by Escrow Agent in connection with this Agreement. In accordance with Escrow Agent's fee schedule dated as of June 5, 2006. IL TERMS AND CONDITIONS The duties, responsibilities and obligations of Escrow Agent shall be limited to those expressly set forth herein and no duties, responsibilities or obligations shall be inferred or implied. Escrow Agent shall not be subject to, nor required to comply with, any other agreement between or among any or all of the Depositors or to which any Depositor is a party, even though reference thereto may be made herein, or to comply with any direction or instruction (other than those contained herein or delivered in accordance with this Escrow Agreement) from any Depositor or any entity acting on its behalf. Escrow Agent shall not be required to, and shall not, expend or risk any of its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder. 2. This Agreement is for the exclusive benefit of the parties hereto and their respective successors hereunder, and shall not be deemed to give, either express or implied, any legal or equitable right, remedy, or claim to any other entity or person whatsoever. 3. If at any time Escrow Agent is served with any judicial or administrative order, judgment, decree, writ or other form of judicial or administrative process which in any way affects Escrow Property (including but not limited to orders of attachment or garnishment or other forms of levies or injunctions or stays relating to the transfer of Escrow Property), Escrow Agent is authorized to comply therewith in any manner as it or its legal counsel of its own choosing deems appropriate; and if Escrow Agent complies with any such judicial or administrative order, judgment, decree, writ or other form of judicial or administrative process, Escrow Agent shall not be liable to any of the parties hereto or to any other person or entity even though such order, judgment, decree, writ or process may be subsequently modified or vacated or otherwise determined to have been without legal force or effect. 4. (a) Escrow Agent shall not be liable for any action taken or omitted or for any loss or injury resulting from its actions or its performance or lack of performance of its duties hereunder in the absence of gross negligence or willful misconduct on its part. In no event shall Escrow Agent be liable (i) for acting in accordance with,or relying upon any instruction, notice, demand, certificate or document from any Depositor or any entity acting on behalf of any Depositor, (ii) for any consequential, punitive or special damages, (iii) for the acts or omissions of its nominees, correspondents, designees, subagents or subcustodians, or (iv) for an amount in excess of the value of the Escrow Property, valued- as of the date of deposit. (b) If any fees, expenses or costs incurred by, or any obligations owed to, escrow Agent hereunder are not promptly paid when due, Escrow Agent may reimburse itself therefor from the Escrow Property and may sell, convey or otherwise dispose of any Escrow Property for such purpose. (c) As security for the due and punctual performance of any and all of Depositors' obligations to Escrow Agent hereunder, now or hereafter arising, Depositors, individually and collectively, hereby pledge, assign and grant to Escrow Agent a continuing security interest in, and a lien on, the Escrow Property and all Distributions thereon or additions thereto (whether such additions are the result of deposits by Depositors or the investment of Escrow Property). The security interest of Escrow Agent shall at times be valid, perfected and enforceable by Escrow Agent against Depositors and all third parties in accordance with the terms of this Escrow Agreement. (d) Escrow Agent may consult with legal counsel at the expense of the Depositors as to any matter relating to this Escrow Agreement, and Escrow Agent shall not incur any liability in acting in good faith in accordance with any advice from such counsel. (e) Escrow Agent shall not incur any liability for not performing any act or fulfilling any duty, obligation or responsibility hereunder by reason of any occurrence beyond the control of Escrow Agent (including but not limited to any act or provision of any present or future law or regulation or governmental authority, any act of God or war, or the unavailability of the Federal Reserve Bank wire or telex or other wire or communication facility). 5. Unless otherwise specifically set forth herein, Escrow Agent shall proceed as soon as practicable to collect any checks or other collection items at any time deposited hereunder. All such collections shall be subject to Escrow Agent's usual collection practices or terms regarding items received by Escrow Agent for deposit or collection. Escrow Agent shall not be required, or have any duty, to notify anyone of any payment or maturity under the terms of any instrument deposited hereunder, nor to take any legal action to enforce payment of any check, note or security deposited hereunder or to exercise any right or privilege which may be afforded to the holder of any such security. 6. Escrow Agent shall provide to Depositors monthly statements identifying transactions, transfers or holdings of Escrow Property and each such statement shall be deemed to be correct and final upon receipt thereof by the Depositors unless Escrow Agent is notified in writing to the contrary within thirty (30) business days of the date of such statement. 7. Escrow Agent shall not be responsible in_any _respect for the form, execution,_ validity, value or genuineness of documents or securities deposited hereunder, or for any description therein, or for the identity, authority or rights of persons executing or delivering or purporting to execute or deliver any such document, security or endorsement. 8. Notices, instructions or other communications shall be in writing and shall be given to the address set forth in the "Addresses" provision herein (or to such other address as may be substituted therefor by written notification to Escrow Agent or Depositors). Notices To Escrow Agent shall be deemed to be given when actually received by Escrow Agent's Corporate Trust Department. Escrow Agent is authorized to comply with and rely upon any notices, instructions or other communications believed by it to have been sent or given by Depositors or by a person or persons authorized by Depositors. Whenever under the terms hereof the time for giving a notice or performing an act falls upon a Saturday, Sunday, or banking holiday, such time shall be extended to the next day on which Escrow Agent is open for business. 9. Depositors, jointly and severally, shall be liable for and shall reimburse and indemnify Escrow Agent and hold Escrow Agent harmless against any and all claims, losses, liabilities, costs, damages or expenses (including reasonable attorneys' fees and expenses) (collectively, "Losses") arising from or in connection with or related to this Escrow Agreement or being Escrow Agent hereunder (including but not limited to Losses incurred by Escrow Agent in connection with its successful defense, in whole or in part of any claim of gross negligence or willful misconduct on its part), provided, however, that nothing contained herein shall require Escrow Agent to be indemnified for Losses caused by its gross negligence or willful misconduct. 10. (a) Depositors may remove Escrow Agent at any time by giving to Escrow Agent thirty (30) calendar day's prior notice in writing signed by all Depositors. Escrow Agent may resign at any time by giving to Depositors thirty (30) calendar days prior written notice thereof. (b) Within ten (10) calendar days after giving the foregoing notice of removal to Escrow Agent or receiving the foregoing notice of resignation from Escrow Agent, all Depositors shall jointly agree on and appoint a successor Escrow Agent. If a successor Escrow Agent has not accepted such appointment by the end of such 10-day period, Escrow Agent may, in its sole discretion, deliver the Escrow Property to any of the Depositors at the address provided herein or may apply to a court of competent jurisdiction for the appointment of a successor Escrow Agent or for other appropriate relief. The costs and expenses (including reasonable attorneys' fees and expenses) incurred by Escrow Agent in connection with such proceeding shall be paid by, and be deemed a joint and several obligation of, the Depositors. (c) Upon receipt of the identity of the successor Escrow Agent, Escrow Agent _ shall either deliver the Escrow Property then held hereunder to the successor ` Escrow Agent, less Escrow Agent's fees, costs and expenses or other obligations owed to Escrow Agent, or hold such Escrow Property (or any portion thereof), pending distribution, until all such fees, costs and expenses or other obligations are paid. (d) Upon delivery of the Escrow Property to successor Escrow Agent, Escrow Agent shall have no further duties, responsibilities or obligations hereunder. 11. (a) In the event of any ambiguity or uncertainty hereunder or in any notice, instruction or other communication received by Escrow Agent hereunder, Escrow Agent may, in its sole discretion, refrain from taking any action other than retain possession of the Escrow Property, unless Escrow Agent receives written instructions, signed by all Depositors, which eliminates such ambiguity or uncertainty. (b) In the event of any dispute between or conflicting claims by or among the Depositors and/or any other person or entity with respect to any Escrow Property, Escrow Agent shall be entitled, in its sole discretion, to refuse to comply with any and all claims, demands or instructions with respect to such Escrow Property so long as such dispute or conflict shall continue, and Escrow Agent shall not be or become liable in any way to the Depositors for failure or refusal to comply with such conflicting claims, demands or instructions. Escrow Agent shall be.entitled to refuse to act until, in its sole discretion, either (i) such conflicting or adverse claims or demands shall have been determined by a final order, judgment or decree of a court of competent jurisdiction, which order, judgment or decree is not subject to appeal, or settled by agreement between the conflicting parties as evidenced in a writing satisfactory to Escrow Agent or (ii) Escrow Agent shall have received security or an indemnity satisfactory to its sufficient to hold it harmless from and against any and all Losses which it may incur by reason of so acting. Escrow Agent may, in addition, elect, in its sole discretion, to commence an interpleader action or seek other judicial relief or orders as it may deem, in its sole discretion, necessary. The costs and expenses (including reasonable attorneys' fees and expenses) incurred in connection with such proceeding shall be paid by, and shall be deemed a joint and several obligation of, the Depositors. 12. This Agreement shall be interpreted, construed, enforced and administered in accordance with the internal substantive laws (and not the choice of law rules) of the State of California. Each of the Depositors hereby submits to the personal jurisdiction of and each agrees that all proceedings relating hereto shall be brought in courts located within the City and State of California or elsewhere as Escrow Agent may select. Each of the Depositors hereby waives the right to trial by jury and to assert counterclaims in any such proceedings. To the extent that in any jurisdiction any Depositor may be entitled to claim, for itself or its assets, immunity from suit, execution, attachment (whether before or after judgment) or other legal process, each hereby irrevocably agrees not to claim, and hereby__ waives, such immunity. Each Depositor waives personal service of process and consents to service of process by certified or registered mail, return receipt requested, direction to it at the address last specified for notices hereunder, and such service shall be deemed completed ten (10) calendar days after the same is so mailed. 13. Except as otherwise permitted herein, this Escrow Agreement may be modified only by a written amendment signed by all the parties hereto, and no waiver of any provision hereof shall be effective unless expressed in a writing signed by the party to be charged. 14. The rights and remedies conferred upon the parties hereto shall be cumulative, and the exercise or waiver of any such right or remedy shall not preclude or inhibit the exercise of any additional rights or remedies. The waiver of any right or remedy hereunder shall not preclude the subsequent exercise of such right or remedy. 15. Each Depositor hereby represents and warrants (a) that this Escrow Agreement has been duly authorized, executed and delivered on its behalf and constitutes its legal, valid and binding obligation and (b) that the execution, delivery and performance of this Escrow Agreement by Depositor do not and will not violate any applicable law or regulation. 16. The invalidity, illegality or unenforceability of any provision of this Agreement shall in no way affect the validity, legality or enforceability of any other provision; and if any provision is held to be enforceable as a matter of law, the other provisions shall not be affected thereby and shall remain in full force and effect. 17. This Agreement shall constitute the entire agreement of the parties with respect to the subject matter and supersedes all prior oral or written agreements in regard thereto. 18. This Agreement shall terminate upon the distribution of all Escrow Property from the Account. The provisions of these Terms and Conditions shall survive termination of this Escrow Agreement and/or the resignation or removal of the Escrow Agent. 19. No printed or other material in any language, including prospectuses, notices, reports, and promotional material which mentions "BNY Western Trust Company" by name or the rights, powers, or duties of the Escrow Agent under this Agreement shall be issued by any other parties hereto, or on such party's behalf, without the prior written consent of Escrow Agent. 20. The headings contained in this Agreement are for convenience of reference only and shall have no effect on the interpretation or operation hereof. 21. This Escrow Agreement may be executed by each of the parties hereto in any number of counterparts, each of which counterpart, when so executed and delivered, shall be deemed to be an original and all such counterparts shall together constitute one and the same agreement. IN WITNESS WHEREOF, each of the parties have caused this Escrow Agreement to be executed by a duly authorized officer as of the day and year first written above. CITY OF VERNON By: - Name: eonis C. Malburg -- Title: Mayor ATTEST: By: Bruce V. Malkenhorst, Jr. Acting City Clerk APPROVED AS TO FORM: �� 7-0� Eric T. Fresch, City Attorney THE BANK OF NEW YORK TRUST COMPANY. N.A.. as Escrow A By: Name: Aurora Quiazon tZ Title: Assistant Vice President ESCROW AGREEMENT Between The City of Vernon And THE BANK OF NEW YORK TRUST COMPANY, N.A. Dated as of June 7, 2006 ACCOUNT NUMBER 800459 City of Vernon Light & Power Stabilization Account ESCROW AGREEMENT made this 7th day of June, 2006 and between THE BANK OF NEW YORK TRUST COMPANY, N.A. ("Escrow Agent") and the undersigned (collectively the 'Depositors" and individually the 'Depositor"). Depositors and Escrow Agent hereby agree that, in consideration of the mutual promises and covenants contained herein, Escrow Agent shall hold in escrow and shall distribute Escrow Property (as defined herein) in accordance with and subject to the following Instructions and Terms and Conditions: I. INSTRUCTIONS: Escrow PropertX The property and/or funds deposited or to be deposited with Escrow Agent by Depositors shall be as follows: $1,000.00 Amount deposited on 6/12/06 and additional amounts to be received by city from time to time. The foregoing property and/or funds, plus all interest, dividends and other distributions and payments thereon (collectively the 'Distributions") received by Escrow Agent, less any property and/or funds distributed or paid in accordance with this Escrow Agreement, are collectively referred to herein as "Escrow Property." 2. Investment of Escrow Property (Depositors are to select one of the following options, initial the option selected and, if "(b)" is selected, insert the appropriate information.) (a) Escrow Agent shall have no obligation to pay interest on or to invest or reinvest any Escrow Property deposited or received hereunder. X (b) Escrow Agent shall invest or reinvest Escrow Property, without distinction between principal and income, in accordance with the following: AIM Government & Agency Portfolio Private (9999035) Escrow Agent shall have no liability for any loss arising from or related to any such investment other than in accordance with paragraph 4 of the Terms and Conditions. 3. Distribution of Escrow PropertX Escrow Agent is directed to hold and distribute the Escrow Property in the following manner: Upon written direction received from an "Authorized Officer" of the City of Vernon. 4. Addresses Notices, instructions and other communications shall be sent to Escrow Agent, Corporate Trust Department, 700 South Flower Street — Suite 500, Los Angeles, CA 90017 and to Depositors as follows: City of Vernon, 4305 Santa Fe Avenue, Vernon, CA 90058 Distribution of Escrow Property pon Termination Upon termination of this Escrow Agreement, Escrow Property then held hereunder shall be distributed as follows: Upon written direction received from an "Authorized Officer" of the City of Vernon. 6. Compensation (a). At the time of execution of this Escrow Agreement, Depositors shall pay Escrow Agent Special Escrow fee of $2,000.00 , payable upon execution of this Agreement. Said fee will be payable annually in advance. (b). Depositors shall pay a disbursement transaction fee of $35 for each disbursement directed by Depositor. (c). Depositors shall be responsible for and shall reimburse Escrow Agent upon demand for all expenses, disbursements and advances incurred or made by Escrow Agent in connection with this Agreement. In accordance with Escrow Agent's fee schedule dated as of June 5, 2006. II. TERMS AND CONDITIONS The duties, responsibilities and obligations of Escrow Agent shall be limited to those expressly set forth herein and no duties, responsibilities or obligations shall be inferred or implied. Escrow Agent shall not be subject to, nor required to comply with, any other agreement between or among any or all of the Depositors or to which any Depositor is a party, even though reference thereto may be made herein, or to comply with any direction or instruction (other than those contained herein or delivered in accordance with this Escrow Agreement) from any Depositor or any entity acting on its behalf. Escrow Agent shall not be required to, and shall not, expend or risk any of its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder. 2. This Agreement is for the exclusive benefit of the parties hereto and their respective successors hereunder, and shall not be deemed to give, either express or implied, any legal or equitable right, remedy, or claim to any other entity or person whatsoever. 3. If at any time Escrow Agent is served with any judicial or administrative order, judgment, decree, writ or other form of judicial or administrative process which in any way affects Escrow Property (including but not limited to orders of attachment or garnishment or other forms of levies or injunctions or stays relating to the transfer of Escrow Property), Escrow Agent is authorized to comply therewith in any manner as it or its legal counsel of its own choosing deems appropriate; and if Escrow Agent complies with any such judicial or administrative order, judgment, decree, writ or other form of judicial or administrative process, Escrow Agent shall not be liable to any of the parties hereto or to any other person or entity even though such order, judgment, decree, writ or process may be subsequently modified or vacated or otherwise determined to have been without legal force or effect. 4. (a) Escrow Agent shall not be liable for any action taken or omitted or for any loss or injury resulting from its actions or its performance or lack of performance of its duties hereunder in the absence of gross negligence or willful misconduct on its part. In no event shall Escrow Agent be liable (i) for acting in accordance with or relying upon any instruction, notice, demand, certificate or document from any Depositor or any entity acting on behalf of any Depositor, (ii) for any consequential, punitive or special damages, (iii) for the acts or omissions of its nominees, correspondents, designees, subagents or subcustodians, or (iv) for an amount in excess of the value of the Escrow Property, valued as of the date of deposit. (b) If any fees, expenses or costs incurred by, or any obligations owed to, escrow Agent hereunder are not promptly paid when due, Escrow Agent may reimburse itself therefor from the Escrow Property and may sell, convey or otherwise dispose of any Escrow Property for such purpose. (c) As security for the due and punctual performance of any and all of Depositors' obligations to Escrow Agent hereunder, now or hereafter arising, Depositors, individually and collectively, hereby pledge, assign and grant to Escrow Agent a continuing security interest in, and a lien on, the Escrow Property and all Distributions thereon or additions thereto (whether such additions are the result of deposits by Depositors or the investment of Escrow Property). The security interest of Escrow Agent shall at times be valid, perfected and enforceable by Escrow Agent against Depositors and all third parties in accordance with the terms of this Escrow Agreement. (d) Escrow Agent may consult with legal counsel at the expense of the Depositors as to any matter relating to this Escrow Agreement, and Escrow Agent shall not incur any liability in acting in good faith in accordance with any advice from such counsel. (e) Escrow Agent shall not incur any liability for not performing any act or fulfilling any duty, obligation or responsibility hereunder by reason of any occurrence beyond the control of Escrow Agent (including but not limited to any act or provision of any present or future law or regulation or governmental authority, any act of God or war, or the unavailability of the Federal Reserve Bank wire or telex or other wire or communication facility). 5. Unless otherwise specifically set forth herein, Escrow Agent shall proceed as soon as practicable to collect any checks or other collection items at any time deposited hereunder. All such collections shall be subject to Escrow Agent's usual collection practices or terms regarding items received by Escrow Agent for deposit or collection. Escrow Agent shall not be required, or have any duty, to notify anyone of any payment or maturity under the terms of any instrument deposited hereunder, nor to take any legal action to enforce payment of any check, note or security deposited hereunder or to exercise any right or privilege which may be afforded to the holder of any such security. 6. Escrow Agent shall provide to Depositors monthly statements identifying transactions, transfers or holdings of Escrow Property and each such statement shall be deemed to be correct and final upon receipt thereof by the Depositors unless Escrow Agent is notified in writing to the contrary within thirty (30) business days of the date of such statement. 7. Escrow Agent shall not be responsible in any respect for the form, execution, validity, value or genuineness of documents or securities deposited hereunder, or for any description therein, or for the identity, authority or rights of persons executing or delivering or purporting to execute or deliver any such document, security or endorsement. 8. Notices, instructions or other communications shall be in writing and shall be given to the address set forth in the "Addresses" provision herein (or to such other address as may be substituted therefor by written notification to Escrow Agent or Depositors). Notices To Escrow Agent shall be deemed to be given when actually received by Escrow Agent's Corporate Trust Department. Escrow Agent is authorized to comply with and rely upon any notices, instructions or other communications believed by it to have been sent or given by Depositors or by a person or persons authorized by Depositors. Whenever under the terms hereof the time for giving a notice or performing an act falls upon a Saturday, Sunday, or banking holiday, such time shall be extended to the next day on which Escrow Agent is open for business. 9. Depositors, jointly and severally, shall be liable for and shall reimburse and indemnify Escrow Agent and hold Escrow Agent harmless against any and all claims, losses, liabilities, costs, damages or expenses (including reasonable attorneys' fees and expenses) (collectively, "Losses") arising from or in connection with or related to this Escrow Agreement or being Escrow Agent hereunder (including but not limited to Losses incurred by Escrow Agent in connection with its successful defense, in whole or in part of any claim of gross negligence or willful misconduct on its part), provided, however, that nothing contained herein shall require Escrow Agent to be indemnified for Losses caused by its gross negligence or willful misconduct. 10. (a) Depositors may remove Escrow Agent at any time by giving to Escrow Agent thirty (30) calendar day's prior notice in writing signed by all Depositors. Escrow Agent may resign at any time by giving to Depositors thirty (30) calendar days prior written notice thereof. (b) Within ten (10) calendar days after giving the foregoing notice of removal to Escrow Agent or receiving the foregoing notice of resignation from Escrow Agent, all Depositors shall jointly agree on and appoint a successor Escrow Agent. If a successor Escrow Agent has not accepted such appointment by the end of such 10-day period, Escrow Agent may, in its sole discretion, deliver the Escrow Property to any of the Depositors at the address provided herein or may apply to a court of competent jurisdiction for the appointment of a successor Escrow Agent or for other appropriate relief. The costs and expenses (including reasonable attorneys' fees and expenses) incurred by Escrow Agent in connection with such proceeding shall be paid by, and be deemed a joint and several obligation of, the Depositors. (c) Upon receipt of the identity of the successor Escrow_ Agent, Escrow Agent shall either deliver the Escrow Property then held hereunder to the successor Escrow Agent, less Escrow Agent's fees, costs and expenses or other obligations owed to Escrow Agent, or hold such Escrow Property (or any portion thereof), pending distribution, until all such fees, costs and expenses or other obligations are paid. (d) Upon delivery of the Escrow Property to successor Escrow Agent, Escrow Agent shall have no further duties, responsibilities or obligations hereunder. 11. (a) In the event of any ambiguity or uncertainty hereunder or in any notice, instruction or other communication received by Escrow Agent hereunder, Escrow Agent may, in its sole discretion, refrain from taking any action other than retain possession of the Escrow Property, unless Escrow Agent receives written instructions, signed by all Depositors, which eliminates such ambiguity or uncertainty. (b) In the event of any dispute between or conflicting claims by or among the Depositors and/or any other person or entity with respect to any Escrow Property, Escrow Agent shall be entitled, in its sole discretion, to refuse to comply with any and all claims, demands or instructions with respect to such Escrow Property so long as such dispute or conflict shall continue, and Escrow Agent shall not be or become liable in any way to the Depositors for failure or refusal to comply with such conflicting claims, demands or instructions. Escrow Agent shall be entitled to refuse to act until, in its sole discretion, either (i) such conflicting or adverse claims or demands shall have been determined by a final order, judgment or decree of a court of competent jurisdiction, which order, judgment or decree is not subject to appeal, or settled by agreement between the conflicting parties as evidenced in a writing satisfactory to Escrow Agent or (ii) Escrow Agent shall have received security or an indemnity satisfactory to its sufficient to hold it harmless from and against any and all Losses which it may incur by reason of so acting. Escrow Agent may, in addition, elect, in its sole discretion, to commence an interpleader action or seek other judicial relief or orders as it may deem, in its sole discretion, necessary. The costs and expenses (including reasonable attorneys' fees and expenses) incurred in connection with such proceeding shall be paid by, and shall be deemed a joint and several obligation of, the Depositors. 12. This Agreement shall be interpreted, construed, enforced and administered in accordance with the internal substantive laws (and not the choice of law rules) of the State of California. Each of the Depositors hereby submits to the personal jurisdiction of and each agrees that all proceedings relating hereto shall be brought in courts located within the City and State of California or elsewhere as Escrow Agent may select. Each of the Depositors hereby waives the right to trial by jury and to assert counterclaims in any such proceedings. To the extent that in any jurisdiction any Depositor may be entitled to claim, for itself or its assets, immunity from suit, execution, attachment (whether before or after judgment) or other legal process, each hereby irrevocably agrees not to claim, and hereby _ waives, such immunity. Each Depositor waives personal service of process and consents to service of process by certified or registered mail, return receipt requested, direction to it at the address last specified for notices hereunder, and such service shall be deemed completed ten (10) calendar days after the same is so mailed. 13. Except as otherwise permitted herein, this Escrow Agreement may be modified only by a written amendment signed by all the parties hereto, and no waiver of any provision hereof shall be effective unless expressed in a writing signed by the party to be charged. 14. The rights and remedies conferred upon the parties hereto shall be cumulative, and the exercise or waiver of any such right or remedy shall not preclude or inhibit the exercise of any additional rights or remedies. The waiver of any right or remedy hereunder shall not preclude the subsequent exercise of such right or remedy. 15. Each Depositor hereby represents and warrants (a) that this Escrow Agreement has been duly authorized, executed and delivered on its behalf and constitutes its legal, valid and binding obligation and (b) that the execution, delivery and performance of this Escrow Agreement by Depositor do not and will not violate any applicable law or regulation. 16. The invalidity, illegality or unenforceability of any provision of this Agreement shall in no way affect the validity, legality or enforceability of any other provision; and if any provision is held to be enforceable as a matter of law, the other provisions shall not be affected thereby and shall remain in full force and effect. 17. This Agreement shall constitute the entire agreement of the parties with respect to the subject matter and supersedes all prior oral or written agreements in regard thereto. 18. This Agreement shall terminate upon the distribution of all Escrow Property from the Account. The provisions of these Terms and Conditions shall survive termination of this Escrow Agreement and/or the resignation or removal of the Escrow Agent. 19. No printed or other material in any language, including prospectuses, notices, reports, and promotional material which mentions "BNY Western Trust Company" by name or the rights, powers, or duties of the Escrow Agent under this Agreement shall be issued by any other parties hereto, or on such party's behalf, without the prior written consent of Escrow Agent. 20. The headings contained in this Agreement are for convenience of reference only and shall have no effect on the interpretation or operation hereof. 21. This Escrow Agreement may be executed by each of the parties hereto in any number of counterparts, each of which counterpart, when so executed and delivered, shall be deemed to be an original and all such counterparts shall together constitute one and the same agreement. IN WITNESS WHEREOF, each of the parties have caused this Escrow Agreement to be executed by a duly authorized officer as of the day and year first written above. CITY OF VERNON By: Na L orris C. Malbu�!'rrg,*,,-- Title: Mayor ATTEST: By: 10 Bruce V. Malkenhorst, Jr. Acting City Clerk APPROVED AS TO FORM: Eric T. Freseh, City Attorney THE BANK OF NEW YORK TRUST COMPANY, N.A., as Escrow By:_ ".- Name: A rora Quiazon' Title: Assistant Vice President