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Resolution No. 2010-019RESOLUTION NO. 2010-19 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON AUTHORIZING AND APPROVING THE CITY ADMINISTRATOR TO TERMINATE A COMMODITY SWAP TRANSACTION WHEN APPROPRIATE; APPROVING THE TERMINATION AGREEMENT PURSUANT TO WHICH SUCH TERMINATION SHALL OCCUR; AND AUTHORIZING CERTAIN OTHER MATTERS RELATING THERETO WHEREAS, the City of Vernon (the "City") is a municipal corporation and a chartered city of the State of California organized and existing under its Charter and the Constitution of the State of California; and WHEREAS, the City and Societe Generale ("SG") entered into a commodity swap transaction (the "Transaction") pursuant to a Master Agreement, dated as of July 12, 2006 (the "Agreement"), between the City and SG, a Schedule to the Agreement, dated as of July 12, 2006, between the City and SG, and a Confirmation, dated July 12, 2006; and WHEREAS, the City and SG desire to terminate the. Transaction; and WHEREAS, the City and SG have proposed the terms of the termination agreement (the "Termination Agreement"), between the City and SG for the termination of the Transaction; and WHEREAS,. there has been submitted to this meeting a draft of the Termination Agreement. 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 Termination Agreement, in substantially the form attached hereto as Exhibit A and made a part hereof as though set forth in full herein, be and the same is hereby approved. The City Administrator of the City (the "City Administrator"), is hereby authorized to execute and deliver the Termination Agreement, in the name of and on behalf of the City, in substantially the form attached hereto with such changes, insertions and deletions as may be approved by the City Administrator, his execution thereof being conclusive evidence of such approval, and the City Clerk is hereby authorized to attest thereto; provided that the City shall not be obligated to make any termination payment to SG pursuant to the Termination Agreement. SECTION 3: The termination of the Transaction on the terms contained in the Termination Agreement as executed and delivered on behalf of the City as provided in this Resolution is hereby authorized and approved. SECTION 4: The Mayor, the Mayor Pro Tem, the City Administrator, the Treasurer, the City Clerk and the City Attorney of the City, and any other proper official, officer or employee of the City, acting singly, be and each of them hereby is authorized to execute and deliver any and all documents and instruments (except that only the City Administrator is authorized to execute and deliver the Termination Agreement) and to do and cause to be done any and all acts and things necessary or convenient in carrying out the actions authorized by this - 2 - Resolution and the transactions contemplated by the documents and instruments approved or authorized by this Resolution. SECTION 5: The City Clerk of the City of Vernon shall certify to the passage, approval and adoption of this resolution, and the City Clerk of the City of Vernon shall cause this resolution and the City Clerk's certification to be entered in the File of Resolutions of the Council of this City. APPROVED AND ADOPTED this 1st day of February, 2010. AT ST: V � AtX� UELA GIRON, C'ty Clerk - 3 - NAME: Hilario Gonzales TITLE: MAYOR-/ STATE OF CALIFORNIA ) ) ss COUNTY OF LOS ANGELES ) I, MANUELA GIRON, City Clerk of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. 2010-19, was duly passed, approved and adopted by the City Council of the City of Vernon at a regular meeting of the City Council duly held on Monday, February 1, 2010, and thereafter was duly signed by the Mayor or Mayor Pro-Tem of the City of Vernon. 2/Executed this day of February, 2010, at Vernon, California. (SEAL) - 4 - /t!CU/�ELAGIR pity Clerk EXHIBIT A Exhibit A [Termination Agreement Attached] Termination Agreement This Termination Agreement dated February _, 2010 (the "Agreement") between Societe Generale ("SG") and the City of Vernon (the "City" and, together with SG, the "Parties") sets forth the agreement between the Parties to terminate the Transaction referred to herein, effective as of the Effective Date, as defined herein. Reference is made to the ISDA Master Agreement and Schedule thereto dated as of July 12, 2006 (collectively, the "Master Agreement") between SG the City and the confirmation of a commodity swap transaction entered into on July 12, 2006 (the "Confirmation") between SG and the City with a notional quantity of 22,073,637 MMBtus of natural gas (the "Transaction"). Capitalized terms used but not defined herein have the meanings set forth in the Master Agreement or, if not defined therein, in the Confirmation. WHEREAS, the City has determined that it is the public interest to terminate the Transaction; WHEREAS, no default by the City has occurred and is continuing under the Master Agreement or any commitment, agreement or other instrument to which the City is a party, and termination of the Transaction will not cause or constitute a default under any commitment, agreement or other instrument to which the City is a party; WHEREAS, the City has obtained all necessary approvals, consents and authorizations to enter into this Agreement and terminate the Transaction on the terms set forth herein; NOW THEREFORE, in consideration of the mutual agreements contained herein and other good and valuable consideration, receipt and sufficiency of which is hereby acknowledged, SG and the City agree as follows: 1. Termination. The Transaction is hereby terminated, effective as of February _, 2010 ("Termination Date"). On the Termination Date, SG and the City shall each be released and discharged from further obligations to each other with respect to the Transaction and their respective rights against each other under the Transaction shall be cancelled. 2. Final Settlement Amount. In consideration of such termination and release, and in full and final settlement of all claims whatsoever past, present or future arising under or in connection with the Transaction, SG agrees to pay a final settlement amount of US $ (the "Final Settlement Amount") on or before the [ ] Business Day following the Termination Date. 3. Representations. Each of SG and the City hereby repeats each of its representations in the Master Agreement as of the date hereof and as of the Termination Date, as if this Agreement were a transaction under the Master Agreement. The City represents to SG as of the Termination Date that (1) no Additional Termination Event, as defined in the Confirmation, has occurred and is continuing, and (2) after consultation with its bond counsel, the City has determined that termination of the Transaction will not affect the tax status of any tax-exempt obligations issued by the City or its financing authority. 1 4. Non -Reliance Representation. Each of SG and the City represents to the other as follows: a. Non -Reliance. It is acting for its own account, and it has made its own independent decisions to into this Agreement and as to whether this Agreement is appropriate or proper for it based on its own judgment and upon advice from such advisers as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into this Agreement, it being understood that information and explanations related to the terms and conditions of this Agreement will not be considered investment advice or a recommendation to enter into this Agreement. No communication (written or oral) received from the other party will be deemed to be an assurance or guarantee as to the expected results of this Agreement. b. Assessment and Understanding. It is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of this Agreement. It is also capable of assuming, and assumes, the risks of this Agreement. c. Status of Parties. The other party is not acting as a fiduciary for or an adviser to it in respect of this Agreement. 5. Entire Agreement; Execution in Counterparts; Amendments. This Agreement constitutes the entire understanding and agreement with respect to the subject matter hereof and supersedes any prior representations, understandings or agreements written or oral between the Parties relating to the subject matter of this Agreement. This Agreement may be executed in counterparts, including by facsimile transaction, and each counterpart shall be deemed an original. This Agreement may not be modified or amended except in a writing signed by both Parties. 6. Governing Law; Waiver of Jury Trial; Jurisdiction; Notices. The provisions set forth in the Master Agreement relating to governing law, waiver of jury trial, submission to jurisdiction and addresses for notices shall apply to this Agreement. K CITY CLERK'S OFFICE INTEROFFICE MEMORANDUM DATE: March 9, 2010 TO: Donal O'Callaghan, City Administrator/Director of Light & Power FROM: Willard Yamaguchi, City Clerk RE: Resolution No. 2010-19 - A Resolution of the City Council of the City of Vernon Authorizing and Approving the City Administrator to Terminate a Commodity Swap Transaction When Appropriate; Approving the Termination Agreement Pursuant to Which Such Termination Shall Occur; and Authorizing Certain Other Matters Relating Thereto Transmitted herewith is a copy of the original agreement and Resolution No. 2010-19 referenced above, which was approved by City Council on February 1, 2010. Thank you. WY:dj c: Rory Burnett Masami Higa Alex Kung Joaquin Leon Resolution No. 2010-19, VNGFA-0002, 9014 Agreement File No. 10-010, 06-043, 06-071 u ORRICK February 26, 2010 VIA FEDERAL EXPRESS Donal O'Callaghan, City Administrator City of Vernon 4305 Santa Fe Avenue Vernon, California 90058 ORRICK, HERRINGTON & SUTCLIFFE LLP 777 SOUTH FIGUEROA STREET SUITE 3200 LOS ANGELES, CALIFORNIA 90017-5855 tel +1-213-629-2020 fax +1.213.612-2499 WWW.ORRICK.COM Sean J. Baxter (213) 612-2171 sbaxter@orrick.com Re: Termination of Commodity Swap Transaction with Societe Generale Dear Donal: In connection with the above -referenced transaction, enclosed please find a full set of original documents for the City's records. Please do not hesitate to call me at (213) 612-2171 if you have any questions. Veiy truly yours, jzo� abz� Sean J. Baxter Enclosures OHS West: 260850569.1 42797-2 ' D L.D L . --- ---- TERMINATION OF COMMODITY SWAP TRANSACTION WITH SOCIETE GENERALE Termination Date: February 23, 2010 SCHEDULE OF TRANSCRIPT DOCUMENTS 1. Termination Agreement, dated February 23, 2010, by and between the City of Vernon (the "City") and Societe Generale ("SG"). 2. Incumbency Certificate for the City Administrator of the City. 3. Power of Attorney and Certificate of Authority of SG's authorized signer. 4. Opinion of the Law Offices of Eric T. Fresch, Ltd., as counsel to the City. 5. Opinion of General Counsel Corporate and Investment Banking of SG, as counsel to SG. OHS West: 260850515.1 42797-2 EXHIBIT 1 Termination Agreement This Termination Agreement dated February 23, 2010 (the "Agreement") between Societe Generale ("SG") and the City of Vernon (the "City" and, together with SG, the "Parties") sets forth the agreement between the Parties to terminate the Transaction referred to herein, effective as of the Termination Date, as defined herein. Reference is made to the ISDA Master Agreement and Schedule thereto dated as of July 12, 2006 (collectively, the "Master Agreement") between SG and the City and the confirmation of a commodity swap transaction entered into on July 12, 2006 (the "Confirmation") between SG and the City with a notional quantity of 22,073,637 MMBtus of natural gas (the "Transaction"). Capitalized terms used but not defined herein have the meanings set forth in the Master Agreement as supplemented by the Confirmation. WHEREAS, the City has determined that it is the public interest to terminate the Transaction WHEREAS, the each of the Parties has obtained all necessary approvals, consents and authorizations required on its part to enter into this Agreement and terminate the Transaction on the terms set forth herein; NOW THEREFORE, inconsideration of the mutual agreements contained herein and other good and valuable consideration, receipt and sufficiency of which is hereby acknowledged, SG and the City agree as follows: 1. Termination. The Transaction is hereby terminated, effective as of February 23, 2010 ("Termination Date"). On the Termination Date, SG and the City shall each be released and discharged from further obligations to each other with respect to the Transaction and their respective rights against each other under the Transaction shall be cancelled. 2. Final Settlement Amount. In consideration of the termination and release in Section 1 hereof, and in full and final settlement of all claims whatsoever past, present or future arising under or in connection with the Transaction, SG agrees to pay a final settlement amount of US $4,445,000 on or before the fifth (5th) Business Day following the Termination Date. 3. Representations. Each of SG and the City hereby (1) repeats each of its representations in the Master Agreement as of the date hereof and as of the Termination Date, as if this Agreement were a transaction under the Master Agreement, and (2) represents to the other as of the Termination Date that (a) no default with respect to it has occurred and is continuing under the Master Agreement, (b) termination of the Transaction will not cause or constitute a default under any agreement or other instrument to which it is a party, and (c) this Agreement is a valid and binding obligation of such Party enforceable in accordance with its terms. The City represents to SG as of the Termination Date that (1) no Additional Termination Event, as defined in the Confirmation, has occurred and is continuing, and (2) after consultation with its bond counsel, the City has determined that 1 termination of the Transaction will not affect the tax status of any tax-exempt obligations issued by the City or its financing authority. 4. Non -Reliance Representation. Each of SG and the City represents to the other as follows; a. Non -Reliance. It is acting for its own account, and it has made its own independent decisions to into this Agreement and as to whether this Agreement is appropriate or proper for it based on its own judgment and upon advice from such advisers as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into this Agreement, it being understood that information and explanations related to the terms and conditions of this Agreement will not be considered investment advice or a recommendation to enter into this Agreement. No communication (written or oral) received from the other party will be deemed to be an assurance or guarantee as to the expected results of this Agreement. b. Assessment and Understanding. It is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of this Agreement. It is also capable of assuming, and assumes, the risks of this Agreement. c. Status of Parties. The other party is not acting as a fiduciary for or an adviser to it in respect of this Agreement. 5. Entire Agreement; Execution in Counterparts; Amendments. This Agreement constitutes the entire understanding and agreement with respect to the subject matter hereof and supersedes any prior representations, understandings or agreements written or oral between the Parties relating to the subject matter of this Agreement. This Agreement may be executed in counterparts, including by facsimile transmission, and each counterpart shall be deemed an original. This Agreement may not be modified or amended except in a writing signed by both Parties. 6. Governing Law; Waiver of Jury Trial; Jurisdiction; Notices. The provisions set forth in the Master Agreement relating to governing law, waiver of jury trial, submission to jurisdiction and addresses for notices shall apply to this Agreement. 2 IN WITNESS WHEREOF, the Parties have duly executed and delivered this Termination Agreement effective as of the Termination Date set forth above. SOCIETE ERALE CITY OF VERNON By: By: Name: Name: Title: (� -..- Q-+�ille Title: City Administrator Managing Director Head of Commodity Markets., The Americas Attest: By: Name: Title: City Clerk Approved: By: Name: Title: EXHIBIT 2 CERTIFICATE AS TO OFFICERS OF THE CITY OF VERNON AND SIGNATURES I, Manuela Giron, City Clerk of the City of Vernon (the "City") HEREBY CERTIFY that the signature set forth opposite the respective name of the following officer of the City is a manual specimen of his signature: Name Office Signature Donal O'Callaghan City Administrator IN WITNESS WHEREOF, I have hereunto set my hand this 17th day of February, 2010. Manuela Giron, City Clerk EXHIBIT 3 ®SOCIETE GENERALE Corporate & Investment Banking POUVOIR ---Le soussigne, Monsieur Olivier KHAYAT, demeurant a PARIS, 29 boulevard HAUSSMANN, Directeur de la Division Marches de Taux, Changes et Matieres Premieres (FICC) de la Banque de Financement et d'Investissement a la SOCIETE GENERALE Societe anonyme au capital de 738 409 055 euros, ayant son siege social a PARIS, 29 boulevard Haussmann, immatriculee au Registre du Commerce et des Societes sous le n 552 120 222 RCS PARIS ---------------------------------------------------------------------------------------- -------------- ----agissant en vertu des pouvoirs qui lui ont ete conferes le 15 fevrier 2008 par Monsieur Jean-Pierre MUSTIER, Directeur General Adjoint de la SOCIETE GENERALE en charge de la Banque de Financement et d'investissement, deposes le 27 fevrier 2008 au rang des minutes de I'Office notarial sis a Paris 9 rue d'Astorg ----------------------------------------- ------------------------------------------------------------------------------------------------------------------------- ------ confere a Monsieur Gonzague BATAILLE, Responsable du Departement « Matieres premieres, Metaux, Energie » de la Division Marches de Taux, Changes et Matieres Premieres (FICC) de la Banque de Financement et d'investissement a la SOCIETE GENERALE, les pouvoirs ci-apres : ---------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------- ------signer tous contrats, conventions, transactions, compromis avec tous clients, tous debiteurs ou autres personnes, portant sur tout bien ou droit mobilier ou immobilier ou toute prestation de service ; consentir toutes mentions et subrogations avec ou sans garanties ; desister la SOCIETE GENERALE avec ou sans constatation de paiement, de tous droits, actions, privileges et hypotheques, donner egalement, avec ou sans constatation de paiement, mainlevee de toutes inscriptions, saisies, oppositions et autres empechements quelconques ; consentir toutes anteriorites, toutes restrictions et limitations de privileges et d'hypotheques, ---- ------------------------------------------------------------------------------------------------------------------------------ ------signer tous documents, attestations ou declarations en matiere juridique, fiscale, comptable ou administrative,--------------------------------------------------------------------------------------- ------acquerir, souscrire, vendre, ceder et transferer, aux prix et conditions qu'il avisera, toutes valeurs, rentes, actions et obligations, parts sociales, autres titres ou droits ; a cot effet, signer tout document necessaire, requerir toutes conversions au porteur ou au nominatif, retirer tous titres, en donner decharge ; en cas d'amortissement total ou partiel des titres, actions ou obligations, en demander le remboursement ; toucher le montant de tout remboursement, en donnerdecharge------------------------------------------------------------------------------------------------------- ------ consentir tous decouverts, prets et ouvertures de credit, en fixer les modalites de remboursement, les interets et tous accessoires ainsi que toutes conditions -------------------------- ------ cautionner ou garantir, aupres de toutes administrations, societes et particuliers, 1'execution de toutes operations ou de tous engagements -------------------------------------------------- ------ consentir toutes avances, sur titres, ------constituer toutes suretes mobilieres en ,garantie de toutes operations et de tous engagements de la SOCIETE GENERALE --------------------------------------------------------------------- ------ accepter toutes garanties et notamment requerir toutes inscriptions d'hypotheques, de privileges immobiliers, de nantissements, gages ou autres, les renouveler, former opposition, -- ---_-_accorder des remises et delais, declarer toutes creances, recevoir tous dividendes, prendre part a toutes assemblees de creanciers, designer tout controleur, et, plus generalement, faire tout ce qui sera utile et necessaire, dans le cadre de toute procedure de traitement amiable ou judiciaire des difficultes des entreprises-------------------------------------------- ------ representer ou agir au nom de la SOCIETE GENERALE, soit en demandant, soit en defendant, devant toutes-autorites ou toutes juridictions se desister de toutes actions, acquiescer en son nom a tous jugements et decisions ; exercer toutes voies de recours ouvertes par la loi, le tout, tant on France qu'A 1'etranger- -------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------ ___---effectuer tous paiements, en exiger decharge---------------------------------------------------------- _ --_-signer les quittances des sommes qui sont ou pourraient titre dues a la SOCIETE GENERALE A quelque titre et pour quelque cause que ce soit ; en donner bonne et valable quittance---------------------------------------------------------------------------------------------------------------- ------signer tous contrats relatifs A des operations de marche, a des operations sur titres de quelque nature que ce soit, notamment sur instruments financiers, A toutes operations sur metaux precieux, devises, matieres premieres ou marchandises ; signer tous contrats de change ; signer tous contrats d'instruments financiers a terme, dont les derives de credit et plus generalement, signer tous contrats relatifs a des produits financiers tant pour le compte de la SOCIETE GENERALE que pour le compte de tiers ; signer tous contrats d'appels de marge ainsi que tous actes constitutifs de suretes mobilieres en garantie des engagements consentis par la SOCIETE GENERALE dans le cadre des contrats et operations vises ci- dessus ; signer tous actes constitutifs de suretes personnelles en garantie des engagements consentis par des tiers dans le cadre des contrats et operations vises ci-dessus ; accepter toute garantie ou surete personnelle ou reelle dont la SOCIETE GENERALE est beneficiaire dans le cadre des contrats et operations vises ci-dessus--------------------------------------------------- ------ signer tous documents relatifs a la gestion des operations de marche, des operations sur titres de quelque nature que ce soit, notamment sur instruments financiers, a la gestion des operations sur metaux precieux, devises, matieres premieres ou marchandises, a la gestion des operations de change, des instruments financiers a terme, dont les derives de credit et plus generalement, a la gestion des, produits financiers tant pour le compte de la SOCIETE GENERALE que pour le compte de tiers ; signer tous documents relatifs a la gestion des contrats d'appels de marge ainsi qu'A la gestion des suretes mobilieres en garantie des engagements consentis par la SOCIETE GENERALE ou A la gestion des suretes personnelles en garantie des engagements consentis par des tiers dans le cadre des contrats et operations visesci-dessus- -------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------- ------ ___-__signer tous contrats cadre relatifs a des operations de marche, A des operations sur titres de quelque nature que ce soit, notamment sur instruments financiers, a toutes operations sur metaux precieux, devises, matieres premieres ou marchandises ; signer tous contrats cadre d'operations de change ; signer tous contrats cadre d'instruments financiers a terme, dont les derives de credit et plus generalement, signer tous contrats cadre relatifs a des produits financiers tant pour le compte de la SOCIETE GENERALE que pour le compte de tiers; signer tous contrats d'appels de marge ainsi que tous actes constitutifs de suretes mobilieres en garantie des engagements consentis par la SOCIETE GENERALE dans le cadre des contrats et operations vises ci-dessus ; signer tous actes constitutifs de suretes personnelles en garantie des engagements consentis par des tiers dans le cadre des contrats et operations vises ci-dessus ; accepter toute garantie ou surete personnelle ou reelle dont la SOCIETE GENERALE est beneficiaire dans le cadre des contrats et operations vises ci-dessus------------- ------ representer la SOCIETE GENERALE a toutes assemblees constitutives de societes ou autres personnes morales, ainsi qu'A toutes assemblees ordinaires et extraordinaires en sa qualite d'associe, de nu-proprietaire, d'usufruitier, de bailleur ou de membre, prendre part A toutes deliberations ou decisions collectives, accepter toutes fonctions, signer toutes feuilles de presence, tous registres et proces-verbaux ; signer tous actes relatifs A la constitution ou la creation de societes de toute nature, Groupement d'Interet Economique (GIE), Groupement Europeen d'Interet Economique (GEIE), associations et fondations; exercer vis-A-vis de toute societe ou personne morale, le droit de communication dont dispose la SOCIETE GENERALE en sa qualite d'associe, de nu-proprietaire, d'usufruitier, de bailleur ou de membre----------------- ------ repr6senter la SOCIETE GENERALE a toutes assemblees de titulaires d'obligations, de valeurs mobilieres donnant acces au capital ou de titres participatifs, prendre part A toutes deliberations ou decisions collectives, signer toutes feuilles de presence, tous registres et proces-verbaux ; exercer vis-A-vis de toute societe le droit de communication dont dispose la SOCIETE GENERALE en sa qualite de titulaire d'obligations, de valeurs mobilieres donnant acces au capital ou de titres participatifs, ----------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------ ------signer tous actes relatifs a la constitution de societes ou autres personnes morales, -------- ------signer toute declaration de dissolution de societe dont la SOCIETE GENERALE est associeunique- -------------------------------------------------------------------------------------------------------- ------certifier toute signature autorisee de la SOCIETE GENERALE, ----------------------------------- ------consentir toutes substitutions, mais seulement affaire par affaire---------------------------------- ------ aux effets ci-dessus, passer et signer tous actes, pieces et pouvoirs, elire domicile, substituer clans les conditions ci-dessus enoncees, et, generalement, faire le necessaire--------- ------ Les presents pouvoirs se substituent A compter de ce four a ceux qui ont pu titre precedemment donnes a Monsieur Gonzague BATAILLE ----------------------------------------------- Fait A Paris lei 5 juillet 2008 SOCIETE GENERALE Corporate & Investment Banking POWER OF ATTORNEY ------ I, the undersigned, Mr. Olivier KHAYAT, domiciled at 29, boulevard Haussmann, Paris, Head of Fixed Income, Currencies and Commodities Division (FICC) of SOCIETE GENERALE Corporate and Investment Banking, a « societe anonyme >> with capital of 738,409,055 Euros, whose head office is at 29, boulevard Haussmann, Paris, registered on the Trade and Companies Register under number RCS Paris 552 120 222 ----------------------- --------------------------------------- ------ acting in pursuance of powers confered on 15th February 2008 by Mr. Jean-Pierre MUSTIER, Chief Executive Officer of SOCIETE GENERALE Corporate and Investment Banking, filed in the records of the firm of notaries at 9, rue d'Astorg, Paris 8, on the 27th February2008, ----------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------ ----------- confer the following powers to Mr. Gonzague BATAILLE, Head of the Department "Commodities Markets" of Fixed Income, Currencies and Commodities Division (FICC) of SOCIETE GENERALE Corporate and Investment Banking -------------------------------------------- ------------------------------------------------------------------------------------------------------------------------ ------sign all contracts, agreements, transactions, settlements with all customers, all debtors or other persons, applying to any movable or immovable assets or rights or any provision of services; grant any registration of charges with or without security; withdraw any of SOCIETE GENERALE's rights, actions, privileges or mortgages with or without acknowledgement of payment; discharge all registered charges, seizures, opposition and any other impediments, with or without. acknowledgement of payment; grant all precedents, all restrictions and limitations of privileges or mortgages----------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------ ------sign all documents, attestations or declarations in legal, tax, accounting or administrative matters,----------------------------------------------------------------------------------------------------- ------acquire, subscribe to, sell, assign and transfer, according to the prices and conditions which he thinks fit, all assets, stocks, shares and bonds, partnership shares, other securities or rights; for this purpose, sign any necessary documents; request all conversions into bearer or registered form; withdraw all securities and give discharges for same; in the event of total or partial redemption of securities, shares or bonds, request reimbursement of same; receive the value of any reimbursement, give discharges for same,--------------------------------------------------------------------------------------------------------------------------- - ------grant all loans and all credit facilities; define the reimbursement procedures, interest, all incidental charges and all conditions for same ----------------------------------------------------------------- ----------------------------- ------stand surety for or guarantee the execution of all operations or commitments with respect to all official bodies, companies and private individuals --------- --------------------------------------------- -------------------------------------------------- ------ grant all security -backed loans, -- ------grant all movable guarantees as surety for all SOCIETE GENERALE operations and commitments---------------------------------------------------------------------------------- ------accept all guarantees and, in particular, require all official entries of mortgages; immovable privileges, pledges; renew same; state opposition,-------------------------------------------- ------in the event of private receivership or official receivership or liquidation, grant all rebates and payment extensions; declare all receivables; receive all dividends; take part in all creditors meetings; appoint all auditors, and, more generally, take all measures that could be deemed usefulor necessary, ------------------------------------------------------------------------------------- ------ ------represent or act in the name of SOCIETE GENERALE as either plaintiff or defendant before any and all bodies or jurisdictions; withdraw the said company from all actions; agree in its name to all judgements and decisions; enter all appeals and more generally, take all avenues of recourse available under the law, both in France and abroad, ----------------------------- ------ make all payments, require discharges for same ------------------------------------------------------- ------ sign receipts for sums which are or may be due to SOCIETE GENERALE on any basis and for any reason whatsoever; give proper and valid discharges for same, -------------------------- ------ sign all contracts for market operations, for all operations involving securities of any nature, in particular financial instruments, precious metals, foreign currency, raw materials or merchandise; sign- all foreign exchange transactions; agree on all forward transactions involving financial instruments, including credit derivatives and more generally, sign all agreements on all other financial products on behalf of both SOCIETE GENERALE and third parties, sign all margin call agreements, and any agreements which constitute a personal property security given as a guarantee to commitments given by SOCIETE GENERALE in the contracts and transactions listed above; sign all agreements which constitute a personal security given as a guarantee to commitments given by third parties in the contracts and transactions listed above; accept all real or personal guarantees or securities of which SOCIETE GENERALE is beneficiary in the contracts and transactions listed above. --------------- ------ sign all documents relating to the management of market operations, of operations involving securities of any nature, in particular financial instruments, precious metals, foreign currency, raw materials or merchandise, of operations involving foreign exchange transactions, all forward transactions involving financial instruments, including credit derivatives and more _generally, sign all documents relating to all other financial products on behalf of both SOOIETE GENERALE and third parties; sign all documents relating to the management of margin call agreements and of personal property securities given as a guarantee to commitments given by SOCIETE GENERALE, or of personal securities given as a guarantee to commitments given by third parties in the contracts and transactions listed above. -------------------------------------------- ------------------------------------------------------------------------------------------------------- - ------sign all master agreements for capital market transactions, for operations involving securities of any nature, in particular financial instruments, precious metals, foreign currency, raw materials or merchandise; sign all master agreements for all forward transactions involving financial instruments, including credit derivatives and more generally, sign all master agreements for all other financial products on behalf of both SOCIETE GENERALE and third parties; sign all master agreements for margin call agreements and for all agreements which constitute a personal property security given as a guarantee to commitments given by SOCIETE GENERALE in the contracts and transactions listed above; sign all agreements which constitute a personal security given as a guarantee to commitments given by third parties in the contracts and transactions listed above; accept all real or personal guarantees or securities of which SOCIETE GENERALE is beneficiary in the contracts and transactions listed above. -------------- I SOCIETE GENERALE at all constituent general meetings of companies or other legal entities and at,all ordinary or extraordinary general meetings in its quality as partner, bare owner, usufructuary, lessor or member, take part in all collective proceedings or decisions; accept all posts; sign all attendance sheets, all minute books; sign all documents relating to the constitution of companies of any type, Economic Interest Groups (EIG), European Economic Interest Groups (EEIG), associations and foundations; use with regards to any company or legal entity the right of communication to which SOCIETE GENERALE is entitled in its quality as partner, bare owner, usufructuary, lessor ormember - ----------------------- ------------------------------------------------------------------------------------------------------------------------------ ------represent SOCIETE GENERALE at all general meetings of holders of bonds or transferable securities which give the holder the right to capital or redeemable shares, take part in all collective deliberations or decisions, sign any presence sheets, registers and records; use with regards to any company the right of communication to which SOCIETE GENERALE is entitled in its quality as a holder of bonds, or transferable securities giving the holder the right to capital or redeemable shares,---------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------ ------sign all documents relating to the incorporation of companies or other legal entities, -------- ------ sign all declarations relating to the winding -up of companies in which SOCIETE GENERALE is the sole and unique partner --------------------------------------------------------------------- ------ certify any authorized SOCIETE GENERALE signatures, ------------------------------------------- ------grant all substitutions though only on a case by case basis; ---------------------------------------- ----for the above purposes, draw up and sign all agreements, documents and powers; elect domicile; substitute under the above -mentioned conditions and, generally, do everything necessary.------------------------------------------------------------------------------------------- ---------------------------- -------rhese powers replace those previously given to Mr. Gonzague BATAILLE asof this day ------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------ Paris, on 151h July 2008 Certificate of Authority 1, Patricia Epstein, do hereby certify on behalf of Societe Gdndrale (the "Bank") that I am a Managing Director of the Bank, that the following person is authorized to negotiate, execute and deliver on behalf of the Bank ISDA Master Agreements, including but not limited to, Schedules thereto, ISDA Credit Support Annexes thereto, trade confirmations and any other documents related thereto, and that the signature of such person set forth opposite his name is his genuine signature. Name Current Title Signature Gonzague Bataille Managing Director IN WITNESS WHEREOF, I have executed this certificate on this a3 day of July, 2008. Assistant Secretary c:Itempinotes0563bdlsggomague bataille incumbency cert.doc EXHIBIT 4 ERIC T. FRESCH KATHERINE J. BRADSTREET February 23, 2010 Societe Generale 29 Boulevard Haussmann 75009 Paris, France LAW OFFICES OF EI RIC T. FBESCH, LTD. 33 NEW MONTGOMERY, SIXTH FLOOR SAN FRANCISCO, CALIFORNIA 94105-4537 TELEPHONE (415) 488-7760 e.fresch@comcast.net Re: Termination Agreement dated February 23, 2010 Ladies and Gentlemen: LOS ANGELES OFFICE 11766 WILSHIRE BLVD. SIXTH FLOOR LOS ANGELES. CA 90025-6538 (213) 392-0930 I have served as counsel to the City of Vernon (the "City") in connection with the Termination Agreement (the "Agreement") dated February 23, 2010 between the City and Societe Generale (the "Counterparty"). The Agreement terminates the transaction between the City and the Counterparty under the ISDA Master Agreement, dated as of July 12, 2006, between the City and the Counterparty, as supplemented by the Schedule, dated as of July 12, 2006 and the confirmation of a transaction entered into on July 12, 2006 between the City and the Counterparty. I am of the opinion that the: 1. The City is a chartered city, duly organized and existing under the Constitution and laws of the State of California. 2. The City has the authority and right to execute and deliver the Agreement, and the City has complied with the provisions of applicable law in all matters relating to the transactions contemplated by the Agreement. 3. The Agreement has been duly authorized, executed and delivered by the City and, assuming that the Agreement constitutes the legal, valid and binding agreement of the Counterparty, the Agreement constitutes the legal, valid and binding agreement of the City enforceable against it in accordance with its terms, except, in each case, as enforceability may be limited by laws relating to bankruptcy, insolvency Or other laws affecting the enforcement of creditors' rights generally and by the application of equitable principles if equitable remedies are sought. 4. No approval, consent or authorization of any governmental or public agency, authority or person is required for the execution and delivery by the City of the Agreement or the performance by the City of its obligations thereunder. Societe Generale February 23, 2010 Page 2 5. The execution and delivery of the Agreement by the City and compliance with the provisions thereof will not conflict with or constitute a breach or default under any instrument relating to the organization, existence or operation of the City, or any contractual restriction known to me binding on or affecting the City or any of its assets, the violation or conflict with which would have a material adverse effect on the City, or any ruling, regulation, ordinance, judgment, or decree to which the City or any of its officers in their respective capacities as such are subject or any provision of the laws of the State of California relating to the City and its affairs. Respectfully submitted, �_ Eric T. Fresch EXHIBIT 5 SOCIETE GENERALE Secretariat General Direction Juridique Banque de Financements et d'Investissements - TO: The City of Vernon 4305, Santa Fe Avenue Vernon California 90058 Dear Sirs, I have acted as General Counsel Corporate and Investment Banking of SOCIETE GENERALE in connection with the Termination Agreement dated as of FebruaryZ3, 2010 (the "Agreement") between SOCIETE GENERALE and the City of Vernon. I have examined the Agreement and have conducted such other investigations of fact and law as I have deemed necessary or advisable for the purposes of this opinion. I express no opinion as to any laws other than the laws and regulations of France as currently in effect. Upon the basis of the foregoing, I am of the opinion that: 1. SOCIETE GENERALE has been duly incorporated and is validly existing as a "societe anonyme" under the laws of France. 2. SOCIETE GENERALE has the corporate power to enter into and perform the Agreement and has taken all necessary corporate action to authorise the execution, delivery and performance of the Agreement in accordance with its terms. 3. The Agreement constitutes a legal, valid and binding obligation of SOCIETE GENERALE enforceable against it in France in accordance with its terms, subject however to any bankruptcy, insolvency, reorganisation, moratorium or other laws relating to or affecting generally the enforcement of creditors' rights and remedies, as the same may be applied in the event of bankruptcy, insolvency, liquidation, reorganisation, moratorium or similar situation of SOCIETE GENERALE. 4. All authorisations (approvals, consents, licences, exemptions, filings and registrations) and other requirements of governmental, judicial and public bodies and authorities required for the. execution, delivery and performance of the Agreement have been obtained or effected and are, to the best of my knowledge, in full force and effect. 5. To the best of my knowledge, the execution, delivery and performance by SOCIETE GENERALE of the Agreement will not result in any violation of the provisions of the organisational documents of SOCIETE GENERALE or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction in France over SOCIETE GENERALE or any of its properties. Societe Generale Societe Anonyme au capital de 582 831 013,75 EUR Tour Societe Generale - SEGVJUR/CIB Siege Social 17 cours>Valmy T61. 33 (0)1 42 13 60 00 29, Bd Haussmann 75009 Paris SOCIETE GENERALE 6. The submission to the non-exclusive jurisdiction of the courts of the State of New York for all purposes in connection with the Agreement is valid and binding on SOCIETE GENERALE under the laws of France and if any final and conclusive judgment of the courts of the State of New York is rendered against SOCIETE GENERALE in connection with the Agreement, such judgment would be recognised and enforced by the courts of France in accordance with Council Regulation (EC) n° 44/2001 of 22 December 2000 on jurisdiction and recognition and enforcement of judgments in civil and commercial matters, and the rules and regulations promulgated pursuant thereto. 7. The foregoing is subject to the following qualification: it is a principle of French law that obligations are not capable of being specifically enforced (except where such obligations relate to the payment of a sum of money and in some other limited cases) and French courts may issue an award of damages where specific performance cannot be ordered or an award of damages is determined adequate. I am furnishing this opinion solely for your benefit. It is not to be used, disclosed, quoted or otherwise referred to for any other purpose. Very truly yours, " Date: Name: Dominique Bourrinet Title: General Counsel Corporate and Investment Banking 2 UPROVED 0 10 CITY COUNCIL RIET�,EIVED 40 JAN 2 8 2010 STAFF REPORT CITYCLERK'S OFFICE CITY ADMINISTRATION OFFICE DATE: January 28, 2010 TO: Honorable Mayor and City Council Zg\`d FROM: Donal O'Callaghan, City Administrator RE: Termination of Societe Generale's Natural Gas Commodities SWAPS We are requesting Council approval for the authority to terminate on short notice as and when we believe would be the most advantageous position, the Societe Generale's Natural Gas Commodity SWAPS. These SWAPS are a physical transaction associated with approximately 25% of the natural gas purchased through the 2006 Natural Gas Prepay transaction. The value of these SWAPS are determined by the market position of natural gas, i.e. as natural gas price per MMBTU decreases, we the City of Vernon, receive monies. Vice versa, as natural gas prices per MMBTU increase, we pay Societe Generale. Today gas prices are lower then the SWAPS threshold value. So at present, we are receiving monies from Societe Generale, although in the past we have had to pay Societe Generale. The value of these SWAPS as we said are determined by the market price of natural gas, it is possible that natural gas will rise in price per MMBTU above the threshold value, when this happens, the City will be obligated to pay Societe Generale whatever that difference is, this difference could amount to a large expense. We have for sometime been discussing these SWAPS with our financial advisors, we have also been monitoring, tracking, and trending natural gas prices. We believe there is a possibility of gas prices rising. If this happens, it would be prudent to terminate these Societe Generale SWAPS in order to minimize forward costs to the City. Recommendation It is recommended that the City Council approve and delegate authority to the City Administrator to take all necessary actions including consulting with the City's financial advisors to terminate the Societe Generale's SWAPS as and when appropriate.