Resolution No. 2011-161RESOLUTION NO. 2011-161
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON AUTHORIZING AND APPROVING THE TRANSFER OF
THE RIGHTS AND OBLIGATIONS OF MORGAN STANLEY
CAPITAL SERVICES INC. UNDER AN INTEREST RATE SWAP
TRANS -ACTION. WITH THE CITY OF VERNON; APPROVING A
FORM OF NOVATION CONFIRMATION WITH RESPECT TO SUCH
TRANSFER; AND AUTHORIZING AND RATIFYING 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, pursuant to the provisions.of its Charter, the City
of Vernon Municipal Facilities Revenue Bond Law, constituting Article
XI of the City Code of the City of Vernon, and the Indenture of Trust,
dated as of December 1, 2004, between the City and The Bank of New York
Trust Company, N.A., as amended and supplemented, the City issued its
Electric System Revenue Bonds, 2004 Series A (the "2004 Series A
Bonds") and its Electric System Revenue Bonds, 2004 Series B (the "2004
Series B Bonds"); and
WHEREAS, the City has entered into that certain ISDA Master
Agreement, dated as of December 2, 2004 (as amended as of March 16,
2006, the "Master Agreement") with Morgan Stanley Capital Services Inc.
("Morgan Stanley"), including the Schedule to the Master Agreement,
dated as of December 2, 2004 (as amended and restated as of April 14,
2008, the "Schedule") and the Credit Support Annex (as amended as of
March 16, 2006 and as of April 14, 2008, the "Credit Annex" and,
together with the Master Agreement and the Schedule, the "2004
Agreement"); and
WHEREAS, in connection with the'issuance of the 2004 Series A
Bonds, the City and Morgan Stanley entered into an interest rate swap
transaction (the "Series A Transaction") pursuant to the 2004 Agreement
and a confirmation, dated.as of December 2, 2004 (as amended and
restated as of March 16, 2006 and as further amended and restated as of
April 27, 2009, the "Series A.Confirmation"); and
WHEREAS, in.connection with the issuance of the 2004 Series B
Bonds, the City and Morgan Stanley entered into an interest rate swap
transaction (the "Series B Transaction") pursuant to the 2004 Agreement
and a confirmation, dated as of December 2, 2004 (as amended and
restated as of March 16, 2006 and as further amended and restated as of
April 27, 2009, the "Series B Confirmation"); and
WHEREAS, notwithstanding the payment of the Series A Bonds
and the Series B Bonds, the City has determined, due to market and
other conditions, that it is in the best interests of the City not to
terminate the Series A Transaction or the Series B Transaction; and
WHEREAS, in accordance with the 2004 Agreement, Morgan
Stanley has determined to transfer all of its rights, liabilities,
duties and obligations under the Series B Transaction to Deutsche Bank
AG, New York Branch (the "Bank") which transfer shall substitute the
Bank for Morgan Stanley as the counterparty to the City with respect to
the Series B Transaction (relieving Morgan Stanley of its rights,
liabilities, duties and obligations with respect to the Series B
Transaction arising on and after the effective date of such transfer);
and
WHEREAS, the City has determined to consent to such transfer
of all of Morgan Stanley's rights, liabilities, duties and obligations
under the Series B Transaction to the Bank which transfer shall
- 2 -
continue the Series B Transaction substituting the Bank for Morgan
Stanley as the counterparty to the City with respect to the Series B
Transaction on and after the effective date of such transfer; and
WHEREAS, to evidence: (i) the transfer of all of Morgan
Stanley's rights, liabilities, duties and obligations under the Series
B Trans -action to -the Bank, (ii) the City's consent to such transfer,
and (iii) that the Series B Transaction between the City and the -Bank
(after the transfer of Morgan Stanley's rights, liabilities, duties and
obligations thereunder to*the Bank) shall continue on the terms and
conditions of the 2004 Agreement, with only such changes thereto as are
set forth therein, there has been prepared and presented to this
meeting a form of Novation Confirmation among the City, Morgan Stanley
a.nd•the Bank (as the same may be modified and completed in accordance
with this. Resolution, being referred to as the "Novation
Confirmation"); and
WHEREAS, the Novation Confirmation includes by reference the
2004 ISDA Novation Definitions (the "Novation Definitions") which
Novation Definitions include by reference the Novation Agreement (the
"Novation Agreement") in the form attached to the Novation Definitions
and which Novation Definitions and Novation Agreement have been
presented to this meeting; and
WHEREAS, after having reviewed and considered the proposal of
Morgan Stanley to transfer all of its rights, liabilities, duties and
obligations with respect to the Series B Transaction to the Bank as
provided in the Novation Confirmation, and the proposal of the Bank to
accept such transfer on such terms and conditions, this City Council
now desires to authorize and approve such transfer of all of Morgan
Stanley's rights, liabilities, duties and obligations with respect to
- 3 -
the Series B Transaction to the Bank as provided in the Novation
Confirmation, including the execution of such documents and the
performance.of such acts as may be necessary or desirable to effect
such transfer and the other actions contemplated by this Resolution.
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 does
hereby find and determine that the recitals contained hereinabove are
true and correct.
SECTION 2: The transfer of all of Morgan Stanley's rights,
liabilities, duties and obligations under the Series B Transaction to
the Bank on the terms and conditions provided in the Novation
Confirmation, including. the Novation Definitions and the Novation
Agreement, are hereby authorized and approved.
SECTION 3: The Novation Confirmation, in substantially the
form submitted to this meeting and made a part hereof as though set
forth in full herein, be and the same is hereby approved. Each of the
Mayor and the City Administrator (each an "Authorized Officer"), acting
singly, is hereby authorized to execute and deliver the Novation
Confirmation, in the name of and on behalf of the City, in
substantially the form presented to this meeting with such changes,
insertions and deletions as may be approved by the Authorized Officer.
executing the Novation Confirmation, said execution being conclusive
evidence of such approval, and the City Clerk of the City (the "City
Clerk") is hereby authorized to attest thereto.
SECTION 4: The Mayor, the City Administrator, the City
Clerk, the Director of the Light and Power Department and any other
proper official, officer or employee of the City, acting singly, be and
- 4 -
each of them hereby is authorized to execute and deliver any and all
documents:. and instruments and to do and cause to be done any and all
acts and things necessary or convenient in carrying out the
transactions contemplated by the documents and instruments approved or
authorized by this Resolution, including, without limitation, making.
any determinations or submission of any documents or reports which are
required by any rule or regulation of any_ governmental entity in
connection with the transfer of all of Morgan Stanley's rights,
liabilities, duties and obligations under the Series B Transaction to
the Bank and the execution, delivery and performance by the City of its
obligations under the documents and instruments approved or authorized
by this Resolution.
SECTION 5; All actions heretofore taken by any committee of
the City Council, or any official, officer, employee, representative or
agent of the City, in connection with the 2004 Agreement, the Novation
Confirmation, the Series A Transaction and/or the Series B Transaction,
including any amendments or supplements to the 2004 Agreement, the
Series A Transaction and/or the Series B Transaction, and/or the
authorization, execution, delivery, or performance of the City's
obligations under the 2004 Agreement, the Novation Confirmation, the
Series A Transaction and/or the Series B Transaction, including any
amendments or supplements to the 2004 Agreement, the Series A
Transaction and/or the Series B Transaction, are hereby ratified,
approved and confirmed.
SECTION 6: The City Council of the City of Vernon hereby
authorizes and directs the City Administrator, or his designee, to take
whatever action is deemed necessary or desirable for the purpose of
implementing and carrying out the purposes of this Resolution and the
- 5 -
transactions' herein approved or authorized.
SECTION 7 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 22nd day of September, 2011,
NAME:
TITLE; MAYOR'/ MAYOR PRO-TEM
ATT
qc�—1 r
ty Clerk
STATE OF,CALIFORNIA
ss
COUNTY OF LOS ANGELES
I,Willard G. Yamaguchi, City Clerk of the City of Vernon, do
hereby certify that the foregoing Resolution, being Resolution
No. 2'0'11-161, was duly passed, approved and adopted ,by the City Council
of the City of Vernon at an adjourned regular meeting of the City
Council duly held on Thursday, September 22, 2011, and thereafter was
duly s,ig,ned by the Mayor or Mayor Pro-Tem of the City of Vernon.
Executed this day of September, 2011, at Vernon, California.
illard amag c i, C y Clerk
(S„AZ
CERTIFICATION OF CITY CLERK
STATE OF CALIFORNIA )
ss
COUNTY OF LOS ANGELES)
I Willard G. Yamaguchi, City Clerk of the City of Vernon
(the "City"), HEREBY CERTIFY that.attached hereto as Exhibit A
is a true and complete copy of Resolution No. 2011-161, duly
adopted by the City Council of the City at a meeting duly called
and duly held on September 22., 2011,`at which meeting a quorum
was present and acting throughout. Such resolutionhas not been
modified, amended or repealed and is in full force and effect in
the form attached hereto as Exhibit A.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
the seal of the City this 23.rd day of September, 2011.
SEAL
Exhibit A
RESOLUTION NO. 2011-.161
RECEIVED
SP 2 2 2011
STAFF REPORT my CLERK'S OFFICE
CITY ADMINISTRATION
DATE: September 21, 2011
TO: Honorable Mayor and City Council
FROM: Mark C. Whitworth, City Administrator
RE: Transfer of Morgan Stanley Interest Rate Swaps to Deutsche Bank
Background
In 2004, the City entered into interest rate swap transactions with Morgan Stanley Capital
Services Inc, in connection with the issuance of its 2004 Series A and B Bonds.
Based on market and other conditions, the City's financial advisors have determined that it is .in
the City's best interest to consent to Morgan Stanley° s transfer .of its rights, liabilities, duties and
obligations under the Series B swaps to Deutsche' Bank AG. This will effect better transaction
terms for the City's Light & Power Department.
Recommendation
Approve the attached resolution and:Novation Confirmation to transfer the Counterparty of the
Series B swaps from Morgan Stanley to Deutsche Bank.
�v//- jla/
Juarez, Debbie
From:
Enomoto, Kristen
Sent:
Wednesday, October 12, 2011 4:59 PM
To:
Juarez, Debbie
Subject:
Deutsche Bank File
Attachments:
Deutsche Bank Certificate of the City Clerk 09-23-11.pdf; Deutsc a Bank Certificate of the
City 09-23-11.pdf
Hi Debbie,
Please add the attached copies to the Deutsche Bank file. Originals went to Orrick.
Thanks.
Kristen
CERTIFICATE OF CITY CLERK
I, Willard G. Yamaguchi, City Clerk of the City of Vernon (the "City"), HEREBY
CERTIFY as follows:
1. Attached hereto as Exhibit A is a true and complete copy of Resolution No. 8610,
duly adopted by the City Council of the City at a meeting duly called and duly held on
December 1, 2004, at which meeting a quorum was present and acting throughout. Such
resolution has not been modified, amended or repealed and is in full force and effect in the form
attached hereto as Exhibit A.
2. Attached hereto as Exhibit B is a true and complete copy of Resolution No. 9016,
duly adopted by the City Council of the City at a meeting duly called and duly held on April 10,
2006, at which meeting a quorum was present and acting throughout. Such resolution has not
been modified, amended or repealed and is in full force and effect in the form attached hereto as
Exhibit B.
3. Attached hereto as Exhibit C is a true and complete copy of Resolution No. 9915,
duly adopted by the City Council of the City at a meeting duly called and duly held on April 13,
2009, at which meeting a quorum was present and acting throughout. Such resolution has not
been modified, amended or repealed and is in full force and effect in the form attached hereto as
Exhibit C.
4. Attached hereto as Exhibit D is a true and complete copy of Resolution No. 2010-
49, duly adopted by the City Council of the City at a meeting duly called and duly held on
April 6, 2010, at which meeting a quorum was present and acting throughout. Such resolution
has not been modified, amended or repealed and is in full force and effect in the form attached
hereto as Exhibit D.
5. Attached hereto as Exhibit E is a true and complete copy of Resolution No. 2011-
161, duly adopted by the City Council of the City at a meeting duly called and duly held on
September 22, 2011, at which meeting a quorum was present and acting throughout. Such
resolution has not been modified, amended or repealed and is in full force and effect in the form
attached hereto as Exhibit E.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the City
this 23rd day of September, 2011.
CI1I
LE
CERTIFICATE OF THE CrrY
I, Mark C. Whitworth, City Administrator of the City of Vernon (the "City"), HEREBY
CERTIFY as follows:
1. The interest rate swap transaction entered into between Morgan Stanley Capital
Services LLC (formerly known as Morgan Stanley Capital Services Inc.) ("Morgan Stanley")
and the City, the terns of which are described in an ISDA Master Agreement, which agreement
included the Schedule, Credit Support Annex and two Confirmations, each dated as of December
2, 2004 (as amended and restated, the "Swap Agreement"), was duly executed and delivered by
the City.
2. Subsequent to execution and delivery, the Swap Agreement has not been modified
or amended except as amended by the Amendment to ISDA Master Agreement, dated as of
March 16, 2006,, which includes two Amended and Restated Confirmations and one original
Confirmation, and as further amended by the Amended and Restated Schedule to the Master
Agreement, dated as of April 14, 2008, and as further amended by both Amended and Restated
Confirmations, dated April 27, 2009, and as further amended by the Third Amendment to the
Credit Support Annex, dated as of September 22, 2011, each by and between Morgan Stanley
and the City, and as further amended by the Novation Confirmation, dated September 23, 2011
(the "Novation Confirmation"), among the City, Deutsche Bank AG, New York Branch and
Morgan Stanley, or terminated, except as by the Unwind of Transaction MSCS Ref. No. AUE37,
memorialized by the Confirmation dated April 7, 2010, by and between the Morgan Stanley and
the City.
3. No Event of Default or Termination Event (as such terms are defined in the Swap
Agreement) has occurred and no event has occurred that, with the passage of time or the giving
of notice (or both), would result in an Event of Default or Termination Event.
4. There is no action, suit, proceeding, inquiry or investigation at law or in equity, or
before any court, public board or body, pending or, to the best of my knowledge, threatened
against or affecting the City or any entity affiliated with the City or any of its officers in their
respective capacities as such (nor to the best of my knowledge, is there any basis therefor) that
questions the powers of the City to execute and deliver the Swap Agreement or the Novation
Confirmation or in connection with the Swap Agreement or the Novation Confirmation, or the
validity of the proceedings taken by the City in connection with the authorization, execution or
delivery of the Swap Agreement or the Novation Confirmation, or wherein any unfavorable
decision, ruling or finding would adversely affect the transactions contemplated by the Swap
Agreement or the Novation Confirmation, or that, in any way, would adversely affect the validity
or enforceability of the Swap Agreement or the Novation Confirmation or, in any material
respect, the ability of the City to perform its obligations under the Swap Agreement or the
Novation Confirmation or asserting that an Event of Default or Termination Event has occurred
or that the Swap Agreement has been terminated or is not otherwise in full force and effect.
2011.
IN WITNESS WHEREOF, I have hereunto set my hand this 23rd day of September,
CITY OF VERNON
M.
Mark C. Whitworth
City Administrator
Juarez, Debbie
From: Enomoto, Kristen
Sent: Monday, September 26, 2011 7:11 AM
To: Juarez, Debbie
Cc: Yamaguchi, Willard; Barcia, Ana
Subject: Additional Docs for Resolution 2011-161 File
Attachments: 3rd Amendment to CSA to ISDA 2004.pdf
Sorry, one more. Not sure that we'll get counterpart or fully executed copy on this one, but this copy should
probably go in 2011-161 and original 2004 bonds resolution file.
Thanks.
Kristen
From: Juarez, Debbie
Sent: Thursday, September 22, 2011 5:18 PM
To: Enomoto, Kristen
Cc: Yamaguchi, Willard; Barcia, Ana
Subject: RE: Additional Docs for Resolution 2011-161 File
Thankyou
(Debora( Juarez
4,fcor'ds WanagerrrentAs'sistaxt
City of 9leruou - City CCerk's Cffice
4305 Santa TeAvenue
`Aernau, (A90058
(323) 58.3-8811
From: Enomoto, Kristen
Sent: Thursday, September 22, 2011 5:18 PM
To: Juarez, Debbie
Cc: Yamaguchi, Willard; Barcia, Ana
Subject: Additional Docs for Resolution 2011-161 File
Attached are additional docs for the resolution file; I apologize if any are duplicative. I have asked BLX to
make sure to get us fully executed copies of the Novation Confirmation and incumbency certificates for our
files. Will forward those when they come in.
The second and third attachments are attachments to the first attachment.
Thanks.
Kristen
From: Enomoto, Kristen
Sent: Thursday, September 22, 2011 4:58 PM
To: 'Underwood, A. Craig'
Cc: 'e.fresch@comcast.net'; Whitworth, Mark
Subject: Vernon
Okay, docs are headed your way.
In the meantime, attached are PDFs and Word versions of the docs. The only thing I don't have is a PDF of
the incumbency certificate. Can you be sure to forward us a fully executed copy of that tomorrow, as well as
the fully executed Novation?
Thanks.
Kristen
From: Underwood, A. Craig rmailto:cunderwood(a)blxgroup.com]
Sent: Thursday, September 22, 2011 4:35 PM
To: Enomoto, Kristen
Cc: 'e.fresch@comcast.net; Whitworth, Mark
Subject: Re: Vernon
That's correct. We will see Mark in our offices tomorrow afternoon.
A. Craig Underwood
President
BLX Group LLC
From: Enomoto, Kristen rmailto:Kenomoto(alci.vernon.ca.usl
Sent: Thursday, September 22, 2011 04:33 PM
To: Underwood, A. Craig
Cc: e.fresch(lcomcast.net <e.fresch(alcomcast.net>; Whitworth, Mark <MWhitworth(@ci.vernon.ca.us>
Subject: Vernon
Attached is signed form.
We are putting all originals together to ship out to you in the next 15 minutes. We were not supposed to have
the Novation Confirmation signed today, right? Mark will sign that tomorrow?
So, packet of originals will include:
3 certified copies of resolution
3 partially executed incumbency certificates (Only Mayor signed today; Mark will sign tomorrow along with
Willard who wants to follow technical protocol and not sign until Mark has signed, so I will let you know what
time to expect them tomorrow.)
Original of attached Deutsche request form
City Attorney opinion
Montgomery Deutsche opinion
Please let me know if the above list is missing anything.
Thanks.
Kristen
_-_- ---- ------
From: Underwood, A. Craig rmailto:cunderwood(abblxgroup.coml
Sent: Thursday, September 22, 2011 3:51 PM
To: Enomoto, Kristen
Subject: Re: Vernon
Ok. Just forward email of form when you have it
A. Craig Underwood
President
BLX Group LLC
From: Enomoto, Kristen[mailto:Kenomotonci.vernon.ca.usl
Sent: Thursday, September 22, 2011 03:49 PM
To: Underwood, A. Craig
Cc: e.fresch@comcast.net <e.fresch@comcast.net>
Subject: Vernon
Sorry, forgot attachment.
From: Enomoto, Kristen
Sent: Thursday, September 22, 2011 3:48 PM
To: 'Underwood, A. Craig'
Cc: 'e.fresch@comcast.net'
Subject: Vernon
Craig,
The link to the charter (see below) is kind of crazy. Just want to confirm you still want us to use that.
Link to City Charter: http•//cityofvernon org/guicklinks/Vernon%20City%2OCharter%20(June%u202009%20-
%20Su ppl a me nt%2068)%20with%2008-31-10%2OAmend ments. pdf
Attached in the meantime is the settlement instructions on letterhead. It's the Word version, so you can add to
it or tweak it as necessary.
Thanks.
Kristen
From: Enomoto, Kristen
Sent: Thursday, September 22, 2011 3:30 PM
To: 'Underwood, A. Craig'
Cc: e.freschCacomcast.net
Subject: Vernon
Almost done, but had a couple questions. Just left message with your secretary to call me. 323-583-8811
x398.
Thanks.
Kristen
From: Underwood, A. Craig fmailto:cunderwoodCablxgroup.coml
Sent: Thursday, September 22, 2011 3:14 PM
To: Enomoto, Kristen
Cc: e.fresch@comcast.net
Subject: FW: Vernon
Kristen — any progress with this?
For controlling person, please list the Mayor and Mark, include full name and contact info.
We need one of them to sign it. Can we get it today? This is important. If we have to messenger to Mayor or
Mark, we should do so.
From: Chu, Eric H.
Sent: Thursday, September 22, 2011 1:32 PM
To: Underwood, A. Craig; Higgins, Jeffrey R.
Subject: FW: Vernon
this needs to be completed asap.
can one of you coordinate?
From: Michael Kowal rmailto:michael.kowal(o)db.coml
Sent: Thursday, September 22, 2011 7:03 AM
To: Chu, Eric H.
Cc: Prasanna Venugopal
Subject: Vernon
Figured this was also pretty urgent — can you have the client fill this out? Call me if things don't make sense.
Thanks,
Michael Kowal
Deutsche Bank
Municipal Capital Markets
60 Wall Street - 3rd Floor I New York, NY 10005
Office: 212.250.8257 1 michael.kowal(odb.com
This communication may contain confidential and/or privileged information. If you are not the intended
recipient (or have received this communication in error) please notify the sender immediately and destroy this
communication. Any unauthorized copying, disclosure or distribution of the material in this communication is
strictly forbidden.
Deutsche Bank does not render legal or tax advice, and the information contained in this communication should
not be regarded as such.
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For more information about BLX Group, please visit
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For more information about BLX Group, please visit
htip://www.blxgroup.com
THIRD AMENDMENT
dated as of September 22, 2011
to the
CREDIT SUPPORT ANNEX
to the
ISDA MASTER AGREEMENT
dated as of December 2, 2004
between
MORGAN STANLEY CAPITAL SERVICES LLC
(f/k/a Morgan Stanley Capital Services Inc.)
('Party A')
And
CITY OF VERNON
(Tarty B")
The parties have previously entered into that certain ISDA Master Agreement dated as of December 2, 2004 (the
"Agreement"), which Agreement includes the Schedule and the Credit Support Annex (the "Annex") attached thereto
(as previously amended as of March 16, 2006 and April 14, 2008) and all Confirmations exchanged between the
parties confirming the Transactions (or Swap Transactions) thereunder. The parties have agreed to amend the Annex
in accordance with the terms of this Amendment (the "Third Amendment").
NOW THEREFORE, in consideration of the mutual agreements contained herein, the parties agree as follows:
1. Amendment of the Annex. Upon execution of this Third Amendment by both parties, the Annex shall be and
hereby is amended as follows:
(a) Demands and Nodces. With respect to Party A only, Paragraph 13(k) of the Annex shall be deleted in its
entirety and replaced with the following:
"All demands, specifications and notices to Party A under this Annex shall be made to:
FID Collateral Department
1221 Avenue of the Americas, 28th Floor
New York, New York 10020
Tel: 212-762-5670
Fax: 212-507- 4949
Email: nyfidcollC3amorganstanley.com"
(d) The Ratings Table in Paragraph 13(b)(iv)(B) of the Annex is hereby amended to read in its entirety as
follows:
Moody's Rating
Ann
Aal
Aa2
Aa3
Al
A2
A3
Baal
Baa2
Baa3 and below or
unrated (if
previously rated) by
S&P and Moody's
S&PRating
Threshold
Minimum Transfer
Amount
AAA
USD 25,000,000
USD 1,000,000
AA+
USD 25,000,000
USD 1,000,000
AA
USD 25,000,000
USD 1,000,000
AA-
USD 25,000,000
USD 1,000,000
A+
USD 20,000,000
USD 1,000,000
A
USD 20,000,000
USD 1,000,000
A-
USD 20,000,000
USD 1,000,000
BBB+
USD 20,000,000
USD 1,000,000
BBB
USD 10,000,000
USD 100,000
BBB- and below or
Zero
USD 100,000
unrated (if
previously rated) by
S&P and Moody's
2. Representations. Each party represents to the other party that all representations contained in the Agreement, as
amended, are true and accurate as of the date of this Third Amendment and that such representations are deemed to
be given or repeated by each party, as the case may be, on the date of this Third Amendment.
3. Miscellaneous
(a) DeJlnitions. Capitalized terms used in this Third Amendment and not otherwise defined herein shall have
the meanings specified for such terms in the Agreement. As used in the Agreement (including any Confirmation
relating thereto), as amended by this Third Amendment, the terms "ISDA Master Agreement", "Agreement", "this
Agreement", "herein", "hereinafter", "hereof', "hereto" and other words of similar import, shall mean the Agreement
as amended hereby, unless the context otherwise specifically requires.
(b) Entire Agreement This Thud Amendment constitutes the entire agreement and understanding of the
parties with respect to its subject matter and supersedes all oral communication and prior writings (except as
otherwise provided herein) with respect thereto.
(c) Counterparts. This Thud Amendment may be executed and delivered in counterparts (including by
facsimile transmission) each of which will be deemed an original.
(d) . Headings. The headings used in this Third Amendment are for convenience of reference only and are not
to affect the construction of or to be taken into. consideration in interpreting this Third Amendment.
(e) Governing Law. This Third Amendment shall be governed by and construed in accordance with the
applicable law governing the Agreement
2
IN WITNESS WHEREOF, the parties have executed this Third Amendment on the respective dates specified
below with effect from the date specified in this Third Amendment.
MORGAN STANLEY CAPITAL SERVICES LLC CITY OF VERNON
By: By: ,it z� 9.s Aln la ,
Name: Name: Hilario Gonz es
Title: Title: Mayor
Date: Date: September 22, 2011
r.' "I
4305 Santa Fe Avenue, Vernon, California 90058
Telephone (323) 583-8811
September 22, 2011
Orrick, Herrington & Sutcliffe LLP
777 South Figueroa Street, Suite 3200
Los Angeles, CA 90017-5855
Ladies and Gentlemen:
I am the Interim City Attorney of the City of Vernon (the "City") and as such I have served as
counsel to the City in connection with the issuance by the City of its Novation Confirmation of
new transaction ("Novation"). As such counsel, I have examined and am familiar with (i) those
documents relating to the existence, organization and operation of the City; (ii) all necessary
documentation of the City relating to the authorization, execution and delivery of (a) Resolution
No. 2011-161, adopted by the City Council of the City on September 22, 2011, and (b) the
Novation Transaction among the City, Morgan Stanley Capital Services LLC, and Deutsche
Bank AG New York, collectively referred to herein as the "Legal Documents."
I am of the opinion that:
1. The City is a chartered city, duly created, organized and existing under the Constitution
and laws of the State of California and its charter and duly qualified to furnish municipal
services within the City.
2. The Resolution was duly adopted at a meeting of the City Council of the City, which was
called and held pursuant to law and with all public notice required by law and at which a
quorum was present and acting throughout and the Resolution is in full force and effect
and has not been amended, modified or supplemented.
3. The City has the authority and right to execute, deliver and perform the Legal
Documents, and the City has complied with the provisions of applicable law in all
matters relating to the transactions contemplated by the Legal Documents.
4. No approval, consent or authorization of any other governmental or public agency,
authority or person is required for the execution and delivery by the City of the Legal
Documents or the performance by the City of its obligations thereunder or the execution
and delivery, on the part of the City, of the Legal Documents.
Excfusivefy Industriaf
Orrick, Herrington & Sutcliffe
September 22, 2011
Page 2
5. The execution and delivery of the Legal Documents by the City and compliance with the
provisions thereof will not conflict with or constitute a breach of or default under any
instrument relating to the organization, existence or operation of the City, or
commitment, agreement or other instrument to which the City is a party or by which it or
its property is bound or affected, or any ruling, regulation, ordinance, judgment, order 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.
6. There is no action, suit, proceeding, inquiry or investigation at law or in equity, or before
any court, public board or body, pending or, to the best of my knowledge, threatened
against or affecting the City or any entity affiliated with the City or any of its officers in
their respective capacities as such (nor to the best of my knowledge, is there any basis
therefor) that questions the powers of the City referred to in paragraph 3 above or in
connection with the transactions contemplated by the Legal Documents, or the validity of
the proceedings taken by the City in connection with the authorization, execution or
delivery of the Legal Documents, or wherein any unfavorable decision, ruling or finding
would adversely affect the transactions contemplated by any of the Legal Documents, or
that, in any way, would adversely affect the validity or enforceability of any of the Legal
Documents or, in any material respect, the ability of the City to perform its obligations
under any of the Legal Documents.
Based on my participation in the preparation of the Legal Documents, I advise you that no facts
came to my attention which caused me to believe that any expression of opinion contain any
untrue statement of a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
Respectfully submitted,
Michael B..-Montgomery
Interim City Attorney
City of Vernon, 4305 Santa Fe Avenue, Vernon, California 90058 - Telephone (323) 583-8811
LAW OFFICES
MICHAEL B. MONTGOMERY
2627 Mission Street, Suite 1
San Marino, CA 91108-1639
CALIFORNIA STATE BAR NUMBER 34310
TELEPHONE:(626) 799-0550
FACSIMILE: (626) 799-0050
E-MAIL: MBMONTGOMERY@HOTMAIL.COM
ALSO ADMITTED TO FLORIDA
AND HAWAII STATE BARS
Deutsche Bank AG
ORANGE COUNTY OFFICE
453 S. GLASSELL STREET
ORANGE, CA 92666
(714) 771-7728
FLORIDA OFFICE
1323 S.E. THIRD AVENUE
FT. LAUDERDALE, FL 33316
(954)522-9441
OF COUNSEL
ALAN R. BURNS
JOHN ROBERT HARPER
Limited Liability Partnerships
COUNTERPARTY LEGAL OPINION
EXHIBIT
Re: ISDA Master Agreement, dated as of 1200 _ (the "Agreement"),
between Deutsche Bank AG and the City of Vernon (the "Counterparty")
Dear Sirs:
I am an attorney admitted to practice in Cailifornia and am counsel to the Counterparty, and
as such am generally familiar with its affairs. I have examined the Agreement and such other records
and instruments as I deemed advisable.
Based upon the foregoing, and having regard for legal considerations which I deem relevant, I
am of the opinion that:
1. The Counterparty is duly organized and validly existing under the laws of the
jurisdiction of its organization or incorporation and, if relevant under such laws, in good standing.
2. The Counterparty has the power (a) to execute and deliver the Agreement, any other
required documentation relating to the Agreement and any Credit Support Document to which it is a
party, and (b) to perform its obligations under the Agreement and any obligations it has under any
Credit Support Document to which it is a party, and has taken all necessary action to authorize such
execution, delivery and performance.
3. Such execution, delivery and performance do not violate or conflict with any law
applicable to the Counterparty, any provision of its constitutional documents, any order or judgment
of any court or other agency of government applicable to it or any of its assets or any contractual
restriction binding on or affecting the Counterparty.
4. All governmental and other consents that are required to have been obtained by it with
respect to the Agreement or any Credit Support Document to which the Counterparty is a parry have
been obtained and are in full force and effect and it has complied with all conditions of any such
consents.
5. The obligations of the Counterparty under the Agreement and any Credit Support
Document to which it is a parry constitute its legal, valid and binding obligations, enforceable in
accordance with their respective terms (subject as to enforceability to applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting creditors' rights generally and to
equitable principles of general application (regardless of whether enforcement is sought in a
proceeding in equity or at law)).
Very truly yours,
62c f�mery
Deutsche Bank 0
Request Form for New Trading Account
In order to proceed with the trading account creation, please provide us with the
following information to facilitate the set-up process. This request form is necessary to
abide by Deutsche Bank's compliance policy regarding the Patriot Act.
Date: September 22, 2011
I) Full Legal Name: City of Vernon
II) Full Legal Address (PO Boxes not acceptable): 4305 South Santa Fe Avenue,
Vernon, CA 90058
III) 5 Controlling Persons' Names, Titles (i.e. Director, President, etc) & Contact
Details:
Only 2 Controlling Persons:
Hilario Gonzales, Mayor
City of Vernon City Hall
4305 South Santa Fe Avenue
Vernon, CA 90058
Email: heonzalesga.ci.vernon.ca.us
Phone: (323) 583-8811 ext. 260
Fax: (323) 826-1422
Mark C. Whitworth, City Administrator
City of Vernon City Hall
4305 South Santa Fe Avenue
Vernon, CA 90058
Email: mwhitworthCa,ci.vernon.ca.us
Phone: (323) 583-8811 ext. 398
Fax: (323) 826-1422
IV) Contact Person's Details:
*Please provide us with the names, emails, telephone and fax numbers of all
parties who should receive reset notices/payment advices/trade confirmations.
Mark C. Whitworth, City Administrator
Email: mwhitworthgci.vemon.ca.us
Phone: (323) 583-8811 ext. 398
Fax: (323) 826-1422
Assistant: Kristen Enomoto
Email: kenomotogci.vernon.ca.us
V) Please list any Ultimate Beneficiary Owners ("UBOs") that hold a greater
than 25% stake, providing the exact each individual's stake as a percentage
in the entity as well as a scanned photo ID. If no UBOs with a greater than
25% stake exist, please confirm this to be the case.
N/A — Public Agency
VI) Tax ID or Foreign Equivalent: 95-600808
VII) Formation Docs:
*Please provide us with a Copy of your Articles of Incorporation
City Charter is attached.
VIII) Payments:
*Please provide us with your Standard Settlement Instructions for this transaction
on company letterhead.
See attached
Thank you in advance for your prompt attention to this request.
Please sign below to acknowledge that all information supplied to us is accurate and
complete.
Name: Hilario Gonzales
Title: Mayor
Organization: City of Vernon
2004 ISDA Novation
Definitions
ISDAa
INTERNATIONAL SWAPS AND DERIVATIVES ASSOCIATION, INC.
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.1. Novation....................................................
Section 1.2. Novation Confirmation .............................
Section 1.3. Novation Transaction ................................
Section 1.4. Transaction ................................................
Section 1.5. Transferor ..................................................
Section 1.6. Transferee .................................................
Section 1.7. Remaining Party ........................................
Section 1.8. Old Transaction .........................................
Section 1.9. New Transaction ......................................
Section 1.10. Old Agreement ........................................
Section 1.11. New Agreement ......................................
Section 1.12. ISDA Master Agreement .........................
Section 1.13.Old Confirmation .....................................
Section 1.14. New Confirmation ...................................
Section 1.15. Confirmation ............................................
Section 1.16. Novation Date .........................................
Section 1.17. Novation Trade Date ................................
Section 1.18. Novated Amount .....................................
Section 1.19. Novation Agreement ...............................
Section 1.20. Full First Calculation Period ....................
.....................................1
.....................................1
.....................................1
.....................................1
..2
!Wj
.............................................2
.............................................2
ARTICLE II
REPRESENTATIONS AND. WARRANTIES
3
3
3
3
4
4
Section 2.1. Representations and Warranties.............................................................5
ARTICLE III
MISCELLANEOUS
Section 3.1 Counterparts............................................................................................8
Section 3.2. Costs and Expenses................................................................................8
Section 3.3. Amendments..........................................................................................8
Section 3.4. Governing Law and Jurisdiction............................................................8
Section 3.5. Waiver of Jury Trial...............................................................................8
EXHIBITS
Exhibit A ISDA Novation Agreement
Exhibit B ISDA Four -Way Novation Agreement
Exhibit C Novation Confirmation
INTRODUCTION
The 2004 ISDA Novation Definitions (the "Definitions") are intended to facilitate
the documentation of the novation of transactions under any of the following: (i) the 2002
ISDA Master Agreement; (ii) the 1992 ISDA Master Agreement (Multicurrency — Cross
Border); (iii) the 1992 ISDA Master Agreement (Single Currency — Local Jurisdiction);
(iv) the 1987 Interest Rate and Currency Exchange Agreement; or the 1987 Interest Rate
Swap Agreement (each, an "ISDA Master Agreement"), as published by the International
Swaps and Derivatives Association, Inc. ("ISDA"). Copies of the ISDA Master
Agreements are available from the executive offices of ISDA or from the ISDA website
(www.isda.org). A three-way Novation Agreement, a four-way Novation Agreement and
a sample form of Novation Confirmation for use with the Definitions are attached as
Exhibits to the Definitions.
Capitalized terms used in the Definitions and not defined herein are intended to
have the meanings given such terms in the 2000 ISDA Definitions or other relevant ISDA
definitions booklet as the context requires.
ISDA anticipates that it may publish, in electronic form, supplements to the
Definitions over time. Unless the parties agree otherwise, where the Definitions are
being utilized, the parties will automatically incorporate the version of the supplement to
the Definitions most recently published at the date on which they enter into a novation of
a transaction documented by the Definitions.
ISDA has provided these Definitions to assist the efficient novation of
transactions under an ISDA Master Agreement. However, the precise documentation of
each individual transaction remains the responsibility of the parties concerned. ISDA
assumes no responsibilityfor any use to which these Definitions may be put. Each party
to a transaction evidenced by a Novation Confirmation referring to these Definitions
must satisfy itself that the Definitions are appropriate for the novation of the
transaetion(s), have been properly used and/or adapted in the Novation Confirmation for
the transaetion(s) and that the Novation Confirmation has generally been properly
drafted, in each case, to reflect the commercial intentions of the parties.
The Introduction is not part of the Definitions and is not offered as an
interpretation of the Definitions.
A User's Guide to the Definitions and a Best Practice Statement are published
separately by ISDA.
2004 ISDA NOVATION DEFINITIONS
ARTICLE I
DEFINITIONS
Section 1.1. Novation. Parties may document a Novation Transaction by
specifying in a Novation Confirmation that the Novation Transaction is subject to and
governed by the provisions set forth in the 2004 ISDA Novation Definitions, including
the provisions set forth in the Novation Agreement.
Section 1.2. Novation Confirmation. "Novation Confirmation" means,
with respect to a Novation Transaction, one or more documents or other evidence
exchanged between the Transferor, Transferee and Remaining Party, if applicable, or
otherwise effective which, taken together, confirm or evidence all of the terms of a
Novation Transaction. A form of Novation Confirmation is set forth in Exhibit C.
Section 1.3. Novation Transaction. "Novation Transaction" means a
Transaction in which (a) each Transferor transfers by novation to a Transferee and
releases and discharges a Remaining Party, if applicable, (b) that Transferee accepts the
transfer by novation of, and (c) that Remaining Party, if applicable, consents to such
transfer by novation and acceptance of, all of the rights, liabilities, duties and obligations
of a Transferor with respect to such Remaining Party and releases and discharges the
Transferor(s) under and in respect of the Novated Amount of such Transaction.
Section 1.4. Transaction. "Transaction" means any type of transaction
documented under an ISDA Master Agreement or specified as such in the relevant
Novation Confirmation.
Section 1.5. Transferor. "Transferor" means a party which transfers by
novation to a Transferee all of its rights, liabilities, duties and obligations with respect to
a Remaining Party, or, in the event that the other party to the Transaction is also
transferring its rights, liabilities, duties and obligations, a Transferee, and releases and
discharges such party, under and in respect of the Novated Amount of a Transaction.
This definition may include "Transferor 1" and "Transferor 2", as each term is used in
Exhibit B.
Section 1.6. Transferee. "Transferee" means a party which accepts by way of
novation all of the rights, liabilities, duties and obligations of a Transferor with respect to
a Remaining Party under and in respect of the Novated Amount of a Transaction (which
definition may include "Transferee 1" and "Transferee 2", as each tern is used in Exhibit
B) and notifies in accordance with Section 12 of the ISDA Master Agreement (or, if
applicable, Section 10 of the 1992 ISDA Master Agreement (Local Currency - Single
Jurisdiction)) the Transferor and/or the Remaining Party of its acceptance of such
novation.
Section 1.7. Remaining Party. "Remaining Party" means a parry which
consents to a Transferor's transfer by novation and the acceptance thereof by the
Transferee of all of the Transferor's rights, liabilities, duties and obligations with respect
to such Remaining Party under and in respect of the Novated Amount of a Transaction.
Section 1.8. Old Transaction. "Old Transaction" means the Transaction as
specified in the Old Confirmation (or Confirmation) between the Transferors or between
a Transferor and a Remaining Parry, as the case may be, all or part of which is the subject
of the novation from the Transferor to the Transferee.
Section 1.9. New Transaction. "New Transaction" means the new Transaction
between Transferees or between a Transferee and a Remaining Party, as the case may be,
having such terms as are specified in the New Confirmation, including terms (excluding
collateral and other credit support arrangements) identical to those of the Old Transaction
as more fully described in the Novation Confirmation.
Section 1.10. Old Agreement. "Old Agreement" means the ISDA Master
Agreement between the Transferors or between a Transferor and a Remaining Party, as
the case may be, to which the Old Transaction was subject.
Section 1.11. New Agreement. "New Agreement" means the ISDA Master
Agreement between the Transferees or between a Transferee and a Remaining Party, as
the case may be, that governs the relationship between the parties with respect to the New
Transaction. If such Transferees, or a Transferee and a Remaining Party, as the case may
be, have not yet executed an ISDA Master Agreement, the following shall be deemed to
be included in the Novation Confirmation: "This Novation Confirmation evidences a
complete and binding agreement between the parties as to the terms of the New
Transaction to which this Novation Confirmation relates. In addition, the parties agree
to use all reasonable efforts promptly to negotiate, execute and deliver an agreement in
the form of an ISDA Master Agreement, with such modifications as the parties will in
good faith agree. Upon the execution by the parties of such an agreement, this Novation
Confirmation will supplement, form part of, and be subject to that agreement. All
provisions contained in or incorporated by reference in that agreement upon its execution
will govern this Novation Confirmation except as expressly modified herein. Until the
parties execute and deliver that agreement, this Novation Confirmation, together with all
other documents referring to an ISDA Master Agreement (each a "Confirmation")
confirming transactions (each a "Transaction") entered into between the parties
(notwithstanding anything to the contrary in a Confirmation), shall supplement, form a
part of, and be subject to, an agreement in the form of the 1992 ISDA Master Agreement
(Multicurrency — Cross Border), if any Confirmation dated prior to the date of the
Novation Confirmation refers to that ISDA Master Agreement and otherwise the 2002
ISDA Master Agreement as if the parties had executed an agreement in such form (but
without any Schedule except for the election of the governing law specified in Section
3.4(a) of the 2004 ISDA Novation Definitions and a Termination Currency of euro, if the
ISDA Master Agreement between the Transferees or between a Transferee and a
2
Remaining Party, is expressed to be governed by English law, or United States Dollars, if
the ISDA Master Agreement between the Transferees or between a Transferee and a
Remaining Party, is expressed to be governed by the laws of the State of New York) on
the Trade Date of the first such Transaction between the parties. In the event of any
inconsistency between the provisions of that agreement and this Novation Confirmation,
this Novation Confirmation will prevail for the purpose of this Novation Transaction."
Section 1.12. ISDA Master Agreement. "ISDA Master Agreement" means the
published form of one of the following: (i) the 2002 ISDA Master Agreement; (ii) the
1992 ISDA Master Agreement (Multicurrency — Cross Border); (iii) the 1992 ISDA
Master Agreement (Local Currency — Single Jurisdiction); (iv) the 1987 ISDA Interest
Rate and Currency Exchange Agreement; or (v) the 1987 ISDA Interest Rate Swap
Agreement.
Section 1.13. Old Confirmation. "Old Confirmation" means the Confirmation
between the Transferors or between a Transferor and a Remaining Party, as the case may
be, setting forth the terms and conditions of the Old Transaction.
Section 1.14. New Confirmation. "New Confirmation" means the
Confirmation between the Transferees or between a Transferee and a Remaining Party, as
the case may be (or deemed to exist between the Transferees or between a Transferee and
a Remaining Party, as the case may be) setting forth the terms and conditions of the New
Transaction.
Section 1.15. Confirmation. "Confirmation" means the documents and other
confirming evidence exchanged or otherwise effective for purposes of confirming or
evidencing a Transaction.
Section 1.16. Novation Date. "Novation Date" means the date specified in the
Novation Confirmation, which is the date on which the provisions of Section 2 of the
Novation Agreement become effective.
Section 1.17. Novation Trade Date. "Novation Trade Date" means the date on
which the parties enter into a Novation Transaction, as specified in the Novation
Confirmation. If a Novation Trade Date is not specified in the Novation Confirmation,
the Novation Trade Date will be deemed to be the Novation Date.
Section 1.18. Novated Amount. "Novated Amount' means an amount specified
in the Novation Confirmation, which represents the portion of the Old Transaction being
novated. If the Novated Amount is less than the total amount used to determine
payments and/or deliveries under the Old Transaction, the Old Transaction and the Old
Confirmation shall remain in full force and effect but all future payments, deliveries and
calculations thereunder shall be based on such amount as has been reduced by the
relevant Novated Amount, and the Old Confirmation will be deemed to be amended
accordingly.
3
Section 1.19. Novation Agreement By exchanging a Novation Confirmation, a
Transferor, a Transferee and a Remaining Party will be deemed to have entered into a
Novation Agreement (the "Novation Agreement') as set forth in Exhibit A and
Transferor 1, Transferor 2, Transferee 1 and Transferee 2 will be deemed to have entered
into a Novation Agreement as set forth in Exhibit B as may be specified and
supplemented by the details and information set forth in the Novation Confirmation and
the 2004 ISDA Novation Definitions.
Section 1.20. Full First Calculation Period. If Full First Calculation Period is
specified to be applicable to a New Transaction, the initial Calculation Period with
respect to such New Transaction shall, for the purposes of determining the amounts
payable in relation to such Calculation Period, be deemed to commence on and include
the (a) Period End Date, Fixed Rate Payer Period End Date or Floating Rate Payer Period
End Date, as the case may be, of the Old Transaction that falls on or immediately
precedes the Novation Date, in each case as specified in the Novation Confirmation; or
(b) in the event the Novation Date occurs before or during the initial Calculation Period
of the Old Transaction, the Effective Date, in each case as specified in the Novation
Confirmation. If Full First Calculation Period is specified to be inapplicable to a New
Transaction, the initial Calculation Period with respect to such New Transaction shall, for
the purposes of determining the amounts payable in relation to such Calculation Period,
be deemed to commence on and include the Novation Date. If Full First Calculation
Period or a method .for making such determination is not specified to be applicable or
inapplicable in the Novation Confirmation, Full First Calculation Period will be deemed
to apply.
l0
ARTICLE 11
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties.
(a) On the Novation Date:
(i) Each of the parties makes to each of the other parties those
representations and warranties set forth in Section 3(a) of the ISDA Master
Agreement with references in such Section to "this Agreement' or "any Credit
Support Document' being deemed references to the Novation Agreement alone
(including, for the avoidance of doubt, the relevant Novation Confirmation).
(ii) The Remaining Party and the Transferor each makes to the other,
and the Remaining Party and the Transferee each makes to the other, the
representation set forth in Section 3(b) of the ISDA Master Agreement, in each
case with respect to the Old Agreement or the New Agreement, as the case may
be, and taking into account the parties entering into and performing their
obligations under the Novation Agreement.
(iii) Each of the Transferor and the Remaining Party represents and
warrants to each other and to the Transferee that:
(A) as of the Novation Date, no other party has any interest or
obligation in or under the Old Agreement in respect of the Novated
Amount of the Old Transaction (whether by way of security or otherwise);
(B) as of the Novation Date, all obligations of the Transferor
and the Remaining Party under the Old Transaction required to be
performed prior to the Novation Date have been fulfilled;
(C) unless otherwise specified and detailed in the Novation
Confirmation, no notice required in connection with the settlement of the
Old Transaction has been delivered by or to the Transferor or the
Remaining Party; and
(D) if the Old Transaction incorporates either the 2003 ISDA
Credit Derivatives Definitions or the 1999 ISDA Credit Derivatives
Definitions, the following additional representations and warranties shall
apply:
(i) unless otherwise specified and detailed in the
Novation Confirmation, neither the Transferor nor the
Remaining Party, nor Transferor 1 or Transferor 2, nor
Transferee 1 or Transferee 2, as applicable, has Delivered
any Deliverable Obligations or made any payments or other
adjustments in connection with the Settlement Method
applicable to the Old Transaction; and
(ii) unless otherwise specified and detailed in the
Novation Confirmation, no Credit Event Notice, Notice of
Publicly Available Information, Notice of Physical
Settlement or Notice of Intended Physical Settlement, as
applicable, has been delivered by or to the Transferor or the
Remaining Party.
(iv) With the exception of the representations and warranties made
under this Section 2.1, each of the Transferor, the Remaining Party and the
Transferee represents and warrants to each other that none of the other parties to
the relevant Novation Transaction nor their respective Affiliates (as that term is
defined in the 2002 ISDA Master Agreement) have made, as of the Novation
Date, any representation on which it is relying or is entitled to rely.
(b) The Transferor makes no representation or warranty and does not assume
any responsibility with respect to the legality, validity, effectiveness, adequacy or
enforceability of any New Transaction or the New Agreement or any documents
relating thereto and assumes no responsibility for the condition, financial or
otherwise, of the Remaining Party, the Transferee or any other person or for the
performance and observance by the Remaining Party, the Transferee or any other
person of any of its obligations under any New Transaction or the New
Agreement or any document relating thereto and any and all such conditions and
warranties, whether express or implied by law or otherwise, are hereby excluded.
(c) Unless there is a non -reliance provision in the New Agreement and/or the
Old Agreement and if "Non -Reliance" is specified as applicable in the Novation
Confirmation, each party to a Novation Transaction represents to the other party
that:
(i) Non -Reliance. It is acting for its own account, and it has made its
own independent decisions to enter into that Novation Transaction and as
to whether that Novation Transaction is appropriate or proper for it based
upon 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 that Novation Transaction, it being understood that information
and explanations related to the terms and conditions of a Novation
Transaction will not be considered investment advice or a
recommendation to enter into that Novation Transaction. 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 that
Novation Transaction.
0
(ii) 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 that Novation Transaction. It is also capable of assuming, and
assumes, the risks of that Novation Transaction.
(iii) Status of Parties. The other parties are not acting as a fiduciary for
or an adviser to it in respect of that Novation Transaction.
ARTICLE III
MISCELLANEOUS
Section 3.1. Counterparts. The Novation Confirmation may be executed and
delivered in counterparts (including by electronic messaging system or facsimile
transmission), each of which will be deemed an original.
Section 3.2. Costs and Expenses. The parties will each pay their own costs
and expenses (including legal fees) incurred in connection with the Novation Agreement
and as a result of the negotiation, preparation and execution of the Novation Agreement.
Section 3.3. Amendments. No amendment, modification or waiver in respect
of the Novation Agreement will be effective unless in writing (including a writing
evidenced by a facsimile transmission) and executed by each of the parties or confirmed
by an exchange of telexes or electronic messages on an electronic messaging system.
Section 3.4. Governing Law and Jurisdiction.
(a) The Novation Agreement will be governed by and construed in
accordance with either English law or the laws of the State of New York, as determined
by the parties in their selection of the law governing the ISDA Master Agreement
between the Transferee and the Remaining Party, if Exhibit A is applicable, or between
Transferee 1 and Transferee 2, if Exhibit B is applicable.
(b) The terms of Section 11 or Section 13 of the ISDA Master Agreement, as
appropriate, shall apply to the Novation Agreement with references in such Section to
"this Agreement" being deemed references to the Novation Agreement alone.
Section 3.5. Waiver of Jury Trial. Unless the New Agreement is governed by
the laws of the State of New York and contains a waiver of jury trial provision, the
parties waive, to the fullest extent permitted by applicable law, any right they may have
to a trial by jury in respect of any suit, action or proceeding relating to the Novation
Agreement. The parties certify that no representative, agent or attorney of either other
party has represented, expressly or otherwise, that such other party would not, in the
event of such a suit, action or proceeding, seek to enforce the foregoing waiver and
acknowledge that they have been induced to enter into the Novation Agreement by,
among other things, the mutual waivers and certifications in this Section 3.5.
EXHIBIT A to 2004 ISDA Novation Definitions
ISDA®
International Swaps and Derivatives Association, Inc.
NOVATION AGREEMENT
Dated as of the Novation Date (as set forth in the Novation Confirmation) among the Remaining Party, the
Transferor and the Transferee (in each case as identified in the Novation Confirmation).
This Novation Agreement is subject to, and hereby incorporates by reference, the 2004 ISDA Novation
Definitions (the "Definitions"). The Remaining Party and the Transferor have entered into one or more
Transactions each evidenced by a Confirmation and subject to an Old Agreement. This Novation
Agreement forms part of each Novation Confirmation.
With effect from and including the Novation Date the Transferor wishes to transfer by novation to the
Transferee, and the Transferee wishes to accept the transfer by novation of, and the Remaining Party
wishes to consent to such transfer by novation and acceptance thereof of, all the rights, liabilities, duties
and obligations of the Transferor with respect to the Remaining Party under each Old Transaction with
respect to the Novated Amount, with the effect that the Remaining Party and the Transferee enter into a
New Transaction corresponding to each Old Transaction.
The Remaining Party wishes to accept the Transferee as its sole counterparty with respect to each New
Transaction.
The Transferor and the Remaining Patty wish to be released and discharged from, as a result and to the
extent of the transfer described above, their respective obligations under and in respect of the Novated
Amount of each Old Transaction.
Accordingly, the parties agree as follows:--
1. Definitions.
Any capitalized tern not otherwise defined herein shall have the meaning assigned to such term in the
Definitions.
2. Transfer, Release, Discharge and Undertakings.
With effect from and including the Novation Date and in consideration of the mutual representations,
warranties and covenants contained in this Novation Agreement and other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged by each of the parties), and
subject to Section 1.20 of the Definitions:
(a) the Remaining Party and the Transferor are each released and discharged from further
obligations to each other under each Old Transaction with respect to the Novated Amount and
their respective rights against each other thereunder are cancelled, provided that such release and
discharge shall not affect any rights, liabilities or obligations of the Remaining Party or the
Transferor with respect to payments or other obligations due and payable or due to be performed
on or prior to the Novation Date and all such payments and obligations shall be paid or performed
by the Remaining Party or the Transferor in accordance with the terms of each Old Transaction;
(b) the Remaining Party, taking the same position in each New Transaction as it took in each
corresponding Old Transaction, and the Transferee, taking the position taken by the Transferor in
each Old Transaction, each undertake liabilities and obligations towards the other and acquire
rights against each other under each New Transaction with respect to the Novated Amount and
with terns identical to the terms (excluding collateral and other credit support arrangements and
subject to Section 2(c) below) of each corresponding Old Transaction, including, in the case of a
Credit Derivative Transaction, any rights or liabilities or obligations in respect of a Credit Event(s)
occurring on or prior to the Novation Date, unless otherwise stated in the Novation Confirmation;
(c) each New Transaction shall be governed by and form part of the New Agreement and
shall be evidenced either (i) by means of the Old Confirmation (as deemed modified to be
consistent with this Novation Agreement); (ii) by the Transferee and the Remaining Party entering
into a Confirmation specifying the terms of each New Transaction (provided, however, that any
failure of either the Transferee or the Remaining Party to enter into such Confirmation shall not
affect the rights and obligations of the Transferor pursuant to this Novation Agreement); or (iii) in
some other manner determined by the Transferee and the Remaining Party; and
(d) any fees payable by any party in connection with the transfer by novation hereunder shall
be subject to a separate agreement between such parties.
EXHIBIT B to 2004 ISDA Novation Definitions
ISDA®
International Swaps and Derivatives Association, Inc.
FOUR-WAY NOVATION AGREEMENT
Dated as of the Novation Date (as set forth in the Novation Confirmation) among Transferor I, Transferor
2, Transferee 1 and Transferee 2 (in each case as identified in the Novation Confirmation).
Transferor 1 and Transferor 2 have entered into one or more Transactions each evidenced by a
Confirmation and subject to an Old Agreement.
Transferee 1 and Transferee 2 have entered into an ISDA Master Agreement dated as of the date set forth in
the Novation Confirmation (the "New Agreement").
This Novation Agreement is subject to, and hereby incorporates by reference, the 2004 ISDA Novation
Definitions (the "Definitions"). This Novation Agreement forms part of each Novation Confirmation.
With effect from and including the Novation Date, (a) Transferor l wishes to transfer by novation to
Transferee 1, and Transferee l wishes to accept the transfer by novation of, all the rights, liabilities, duties
and obligations of Transferor I under and in respect of the Novated Amount of each Old Transaction and
(b) Transferor 2 wishes to transfer by novation to Transferee 2, and Transferee 2 wishes to accept the
transfer by novation of, all the rights, liabilities, duties and obligations of Transferor 2 under and in respect
of the Novated Amount of each Old Transaction, with the effect that Transferee 1 and Transferee 2 enter
into a New Transaction corresponding to each Old Transaction.
Each Transferee wishes to accept the other Transferee as its sole counterparty with respect to each New
Transaction.
Transferor 1 and Transferor 2 wish to be released and discharged from, as a result and to the extent of the
transfer described above, their respective obligations under and in respect of the Novated Amount of each
Old Transaction except as modified in Section 2 below.
Accordingly, the parties agree as follows:
1. Definitions.
Any capitalized term not otherwise defined herein shall have the meaning assigned to such term in the
Definitions.
2. Transfer, Release, Discharge and Undertakings.
With effect from and including the Novation Date and in consideration of the mutual representations,
warranties and covenants contained in this Novation Agreement and other good and valuable consideration
(the receipt and sufficiency of which are hereby acknowledged by each of the parties) and subject to
Section 1.20 of the Definitions:
(a) Transferor I and Transferor 2 are each released and discharged from further obligations
to each other under each Old Transaction with respect to the Novated Amount of each Old
Transaction and their respective rights against each other thereunder are cancelled, provided that
such release and discharge shall not affect any rights, liabilities or obligations of Transferor 1 or
Transferor 2 with respect to payments or other obligations due and payable or due to be performed
prior to the Novation Date and all such payments and obligations shall be paid or performed by
Transferor 1 or Transferor 2, as the case may be, in accordance with the terns of each Old
Transaction;
(b) Transferee 1, taking the position taken by Transferor 1 in each corresponding Old
Transaction, and Transferee 2, taking the position taken by Transferor 2 in each corresponding Old
Transaction, each undertake liabilities and obligations towards the other and acquire rights against
each other under each New Transaction with respect to the Novated Amount and with terms
identical to the terms (excluding collateral and other credit support arrangements and subject to
Section 2(c) below) of each corresponding Old Transaction, including, in the case of a Credit
Derivative Transaction, any rights or liabilities or obligations in respect of a Credit Event(s)
occurring on or prior to the Novation Date, unless otherwise stated and amended in the Novation
Confirmation;
(c) each New Transaction shall be governed by and form part of the New Agreement and
shall be evidenced either (i) by means of the Old Confirmation (as deemed modified to be
consistent with this Novation Agreement); (ii) by Transferee I and Transferee 2 entering into a
Confirmation specifying the terms of each New Transaction (provided, however, that any failure
of either Transferee I or Transferee 2 to enter into such Confirmation shall not affect the rights
and obligations of Transferor 1 or Transferor 2 pursuant to this Novation Agreement); or (iii) in
some other manner determined by Transferee 1 and Transferee 2; and
(d) any fees payable by Transferor I or Transferor 2 in connection with the transfer by
novation hereunder shall be subject to a separate agreement between such parties.
EXHIBIT C to 2004 ISDA Novation Definitions
Novation Confirmation
[Headed paper of Party A]
Date:
To: [Name and Address or Facsimile Number of Party B and Party C]
From: [Party A]
Re: Novation Transaction
Dear
The purpose of this [facsimile][letter] is to confine the terms and conditions of the Novation
Transaction entered into between the parties and effective from the Novation Date specified below. This
Novation Confirmation constitutes a "Confirmation" as referred to in the New Agreement specified below.
1. The definitions and provisions contained in the 2004 ISDA Novation Definitions (the
"Definitions") and the terns and provisions of [insert appropriate ISDA definitional booklet'], as published by
the International Swaps and Derivatives Association, Inc.2 and amended from time to time, are incorporated in
this Novation Confirmation. In the event of any inconsistency between (i) the Definitions, (ii) [insert
appropriate ISDA definitional booklet] and/or (iii) the Novation Agreement and this Novation Confirmation,
this Novation Confirmation will govern.
follows:
2. The terns of the Novation Transaction to which this Novation Confirmation relates are as
[Novation Trade Date:]
Novation Date:
Novated Amount:
[Transferor][Transferor 1]:
[Transferor 21:
[Transferee][Transferee 1]:
[Remaining Party][Transferee 2]:
[New Agreement (between [Transferee 1 and Transferee
2][Transferee and Remaining Party] )]:
[[Credit Event Notice Delivered Under Old Transaction and
Deemed Delivered Under New Transaction:]
[Notice of Publicly Available Information Delivered Under
ISDA Master Agreement [dated as
of _� [as per Section 1.11 of
the Definitions] subject to [English
law][the laws of the State of New
York]
l Include as applicable: the 1991 ISDA Definitions; the 1998 Supplement to the 1991 ISDA Definitions; the 2000 ISDA
Definitions; the 1992 ISDA FX and Currency Option Definitions; the 1998 FX and Currency Option Definitions; the 1993 ISDA
Commodity Derivatives Definitions; the 2000 Supplement to the 1993 ISDA Commodity Derivatives Definitions; the [9941SDA Equity
Option Definitions; the 1996 ISDA Equity Derivatives Definitions; the 2002 ISDA Equity Derivatives Definitions; the 1997 ISDA
Government Bond Option Definitions; the 1997 ISDA Bullion Definitions; the 1997 ISDA Short Form Bullion Definitions; the 1999
ISDA Credit Derivatives Definitions; and the 2003 ISDA Credit Derivatives Definitions.
2 The 1998 FX and Currency Option Definitions were published by the International Swaps and Derivatives Association, Inc.,
the Emerging Markets Traders Association and The Foreign Exchange Committee.
Old Transaction and Deemed Delivered Under New
Transaction:]
[Notice of Physical Settlement Delivered Under Old
Transaction, a copy of which is attached:]];
3. The terms of each Old Transaction to which this Novation Confirmation relates[, for
identification purposes, are as follows:'] [shall be as specified in the copy of the Old Confirmation attached
hereto as Exhibit A.]
[Reference Entity:]'
Trade Date of Old Transaction:
Effective Date of Old Transaction:
[[Scheduled] Termination Date] [Expiration Date] of Old
Transaction:
4. The terms of each New Transaction to which this Novation Confirmation relates [are as
followxb][shall be as specified in Section[s] _ [,_ and 1 ofJ the copy of the Old Confirmation attached
hereto as Exhibit A.][shall be as specified in the New Confirmation attached hereto as Exhibit [A][B].
Full First Calculation Period: Applicable, [commencing on [ ]]
[commencing on [ ], with respect to
any amounts to be paid by the
Transferee, and [ ], with respect to
any amounts to be paid by the
Remaining Party'
5. Other Provisions: [[Additional Provisions relating to the New Transaction][Credit Support
Documents relating to the New Transaction]] :
6. Miscellaneous Provisions: [Non -Reliance] [
Notice Details:
Telephone and/or Facsimile Numbers for Notices:
Transferee:
Remaining Party:
8. [The parties confirm their acceptance to be bound by this Novation Confirmation as of the
Novation Date by executing a copy of this Novation Confirmation and returning it to us].' The Transferor, by
its execution of a copy of this Novation Confirmation, agrees to the terms of the Novation Confirmation as it
relates to each Old Transaction. The Transferee, by its execution of a copy of this Novation Confirmation,
agrees to the terms of the Novation Confirmation as it relates to each New Transaction.].
3 The Credit Event Notice, the Notice of Publicly Available Information and the Notice of Physical Settlement, as applicable,
should be included if a Credit Derivative Transaction is the subject of novation.
4 Parties should specify terms necessary to identify the Old Transaction. For example, parties may wish to consider specifying
amounts that provide the basis for calculations under the Old Transaction such as Notional Amounts, Fixed Rate Amounts, Floating Rate
Amounts, as well as terms such as payment dates, rate references, strike prices, premiums and optional rights, among others.
5 Include if a Credit Derivative Transaction is the subject of novation.
6 The Remaining Party and the Transferee should treat the New Transaction as they would any Transaction newly entered into
and documented in part by a Confirmation of such Transaction in the appropriate form published by ISDA. If a document falling short of
a New Confirmation is exchanged between the Remaining Party and the Transferee with respect to the New Transaction, such parties
should carefully consider what is included to evidence the New Transaction.
7 The first bracketed option may be used if there is only one roll frequency with respect to the Old Transaction. The second
bracketed option may be used if there is one or more roll frequency with respect to the Old Transaction.
8 Delete if relying on other confirming evidence exchanged or otherwise effective for the purpose of confirming or evidencing
the agreement of the parties.
......................................
(Name of Remaining Party)'
By: .......................................
Name:
Title:
Date:
..................................................
(Name of Transferee)"
By: .............................................
Name:
Title:
Date:
.....................................
(Name of Transferor)10
By: ....................................
Name:
Title:
Date:
9 A signature block is not necessary for the Remaining Party if a Four -Way Novation Agreement is being used.
10 Insert additional Transferor signature line if a Four -Way Novation Agreement is being used.
I 1 Insert additional Transferee signature line if a Four -Way Novation Agreement is being used.
Juarez, Debbie
From:
Enomoto, Kristen
Sent:
Thursday, September 22, 2011 5:18 PM
To:
Juarez, Debbie
Cc:
Yamaguchi, Willard; Barcia, Ana
Subject:
Additional Does for Resolution 2011-161 File
Attachments:
Deutsche Bank Request Form for New Trading Account 09-22-11.pdf; Vernon City Charter
(June 2009 - Supplement 68) with 08-31-10 Amendments.pdf; Deutsche Bank Settlement
Instructions.pdf; City Attorney Opinion to Orrick 09-22-11.pdf; Montgomery Deutsche
Opinion.pdf; 2004-Novation-Definitions.pdf
Attached are additional does for the resolution file; I apologize if any are duplicative. I have asked BLX to
make sure to get us fully executed copies of the Novation Confirmation and incumbency certificates for our
files. Will forward those when they come in.
The second and third attachments are attachments to the first attachment.
Thanks.
Kristen
From: Enomoto, Kristen
Sent: Thursday, September 22, 2011 4:58 PM
To: 'Underwood, A. Craig'
Cc: 'e.fresch@comcast.net'; Whitworth, Mark
Subject: Vernon
Okay, does are headed your way.
In the meantime, attached are PDFs and Word versions of the does. The only thing I don't have is a PDF of
the incumbency certificate. Can you be sure to forward us a fully executed copy of that tomorrow, as well as
the fully executed Novation?
Thanks
Kristen
From: Underwood, A. Craig[mailto:cunderwood@blxgroup.com]
Sent: Thursday, September 22, 2011 4:35 PM
To: Enomoto, Kristen
Cc: 'e.fresch@comcast. net'; Whitworth, Mark
Subject: Re: Vernon
That's correct. We will see Mark in our offices tomorrow afternoon.
A. Craig Underwood
President
BLX Group LLC
From: Enomoto, Kristen[mailto:Kenomoto@ci.vernon.ca.us]
Sent: Thursday, September 22, 2011 04:33 PM
To: Underwood, A. Craig
Cc: e.fresch@comcast.net <e.fresch@comcast.net>; Whitworth, Mark <MWhitworth@ci.vernon.ca.us>
Subject: Vernon
Attached is signed form.
We are putting all originals together to ship out to you in the next 15 minutes. We were not supposed to have
the Novation Confirmation signed today, right? Mark will sign that tomorrow?
So, packet of originals will include:
3 certified copies of resolution
3 partially executed incumbency certificates (Only Mayor signed today; Mark will
Willard who wants to follow technical protocol and not sign until Mark has signed,
time to expect them tomorrow.)
Original of attached Deutsche request form
City Attorney opinion
Montgomery Deutsche opinion
Please let me know if the above list is missing anything.
Thanks.
Kristen
From: Underwood, A. Craig [mailto:cunderwood@blxgroup.com]
Sent: Thursday, September 22, 2011 3:51 PM
To: Enomoto, Kristen
Subject: Re: Vernon
Ok. Just forward email of form when you have it.
A. Craig Underwood
President
BLX Group LLC
From: Enomoto, Kristen[mailto:Kenomoto@ci.vernon.ca.us]
Sent: Thursday, September 22, 2011 03:49 PM
To: Underwood, A. Craig
Cc: e.fresch@comcast.net <e.fresch@comcast.net>
Subject: Vernon
Sorry, forgot attachment.
From: Enomoto, Kristen
Sent: Thursday, September 22, 2011 3:48 PM
To: 'Underwood, A. Craig'
Cc: 'e.fresch@comcast.net'
Subject: Vernon
Craig,
sign tomorrow along with
so I will let you know what
The link to the charter (see below) is kind of crazy. Just want to confirm you still want us to use that.
Link to City Charter: http://citvofvernon.org/guicklinks/Vernon%20City%2OCharter%20(June%202009%20-
%20Supple m e nt%2068)%20with%2008-31-10%2OAmend me nts. pdf
Attached in the meantime is the settlement instructions on letterhead. It's the Word version, so you can add to
it or tweak it as necessary.
Thanks.
Kristen
From: Enomoto, Kristen
Sent: Thursday, September 22, 2011 3:30 PM
To: 'Underwood, A. Craig'
Cc: e.fresch@comcast.net
Subject: Vernon
Almost done, but had a couple questions. Just left message with your secretary to call me. 323-583-8811
x398.
Thanks.
Kristen
From: Underwood, A. Craig [mailto:cunderwood@blxgroup.com]
Sent: Thursday, September 22, 2011 3:14 PM
To: Enomoto, Kristen
Cc: e.fresch@comcast.net
Subject: FW: Vernon
Kristen — any progress with this?
For controlling person, please list the Mayor and Mark, include full name and contact info.
We need one of them to sign it. Can we get it today? This is important. If we have to messenger to Mayor or
Mark, we should do so.
From: Chu, Eric H.
Sent: Thursday, September 22, 2011 1:32 PM
To: Underwood, A. Craig; Higgins, Jeffrey R.
Subject: FW: Vernon
this needs to be completed asap.
can one of you coordinate?
From: Michael Kowal [mailto:michael.kowal@db.com]
Sent: Thursday, September 22, 2011 7:03 AM
To: Chu, Eric H.
Cc: Prasanna Venugopal
Subject: Vernon
Figured this was also pretty urgent —can you have the client fill this out? Call me if things don't make sense.
Thanks,
Michael Kowa]
Deutsche Bank
Municipal Capital Markets
60 Wall Street - 3rd Floor I New York, NY 10005
Office: 212.250.8257 1 michael.kowal@db.com
This communication may contain confidential and/or privileged information. If you are not the intended
recipient (or have received this communication in error) please notify the sender immediately and destroy this
communication. Any unauthorized copying, disclosure or distribution of the material in this communication is
strictly forbidden.
Deutsche Bank does not render legal or tax advice, and the information contained in this communication should
not be regarded as such.
NOTICE TO RECIPIENT: THIS E-MAIL IS MEANT FOR ONLY THE
INTENDED RECIPIENT OF THE TRANSMISSION, AND MAY BE A
COMMUNICATION PRIVILEGED BY LAW. IF YOU RECEIVED THIS E-
MAIL IN ERROR, ANY REVIEW, USE, DISSEMINATION,
DISTRIBUTION, OR COPYING OF THIS E-MAIL IS STRICTLY
PROHIBITED. PLEASE NOTIFY US IMMEDIATELY OF THE ERROR BY
RETURN E-MAIL AND PLEASE DELETE THIS MESSAGE FROM YOUR
SYSTEM. THANK YOU IN ADVANCE FOR YOUR COOPERATION.
For more information about BLX Group, please visit
http://www.blxaroup.com
CONFIDENTIALITY NOTICE: This e-mail transmission, and any documents, files or previous e-mail messages attached to it may contain
confidential information that is legally privileged. If you are not the intended recipient, or a person responsible for delivering it to the intended
recipient, you are hereby notified that any disclosure, copying, distribution or use of any of the information contained In or attached to this
transmission is STRICTLY PROHIBITED.If you have received this transmission in error, please Immediately notify the sender. Please destroy
the original transmission and Its attachments without reading or saving in any manner.
NOTICE TO RECIPIENT: THIS E-MAIL IS MEANT FOR ONLY THE
INTENDED RECIPIENT OF THE TRANSMISSION, AND MAY BE A
COMMUNICATION PRIVILEGED BY LAW. IF YOU RECEIVED THIS E-
MAIL IN ERROR, ANY REVIEW, USE, DISSEMINATION,
DISTRIBUTION, OR COPYING OF THIS E-MAIL IS STRICTLY
PROHIBITED. PLEASE NOTIFY US IMMEDIATELY OF THE ERROR BY
RETURN E-MAIL AND PLEASE DELETE THIS MESSAGE FROM YOUR
SYSTEM. THANK YOU IN ADVANCE FOR YOUR COOPERATION.
For more information about BLX Group, please visit
http://www.blxlzroul).com
NOTICE TO RECIPIENT: THIS E-MAIL IS MEANT FOR ONLY THE
INTENDED RECIPIENT OF THE TRANSMISSION, AND MAY BE A
COMMUNICATION PRIVILEGED BY LAW. IF YOU RECEIVED THIS E-
MAIL IN ERROR, ANY REVIEW, USE, DISSEMINATION,
DISTRIBUTION, OR COPYING OF THIS E-MAIL IS STRICTLY
PROHIBITED. PLEASE NOTIFY US IMMEDIATELY OF THE ERROR BY
RETURN E-MAIL AND PLEASE DELETE THIS MESSAGE FROM YOUR
SYSTEM. THANK YOU IN ADVANCE FOR YOUR COOPERATION.
For more information about BLX Group, please visit
htti):%/www.blxaroun.com
Deutsche Bank
Request Form for New Trading Account.
In order to proceed with the trading account creation, please provide us with the
following information to facilitate the set-up process. This request form is necessary to
abide by Deutsche Bank's compliance policy regarding the Patriot Act.
Date: September 22, 2011
I) Full Legal Name: City of Vernon
II) Full Legal Address (PO Boxes not acceptable): 4305 South Santa Fe Avenue,
Vernon, CA 90058
III) 5 Controlling Persons' Names, Titles (i.e. Director, President, etc) & Contact
Details:
Only 2 Controlling Persons:
Hilario Gonzales, Mayor
City of Vernon City Hall
4305 South Santa Fe Avenue
Vernon, CA 90058
Email: hgonzales0&ci.vernon.ca.us
Phone: (323) 583-8811 ext. 260
Fax: (323) 826-1422
By: ry
Mark C. Whitworth, City Administrator
City of Vernon City Hall
4305 South Santa Fe Avenue
Vernon, CA 90058
Email: mwhitwod ci.vernon.ca.us
Phone: (323) 583-8811 ext. 398
Fax: (323)826-1422
IV) Contact Person's Details:
*Please provide us with the names, emails, telephone and fax numbers of all
parties who should receive reset notices/payment advices/trade confirmations.
Mark C. Whitworth, City Administrator
Email: mwhitworthnci.vemon ca.us
Phone: (323) 583-8811 ext. 398
Fax: (323) 826-1422
Assistant: Kristen Enomoto
Email: kenomoto@ci.vernon.ca.us
V) Please list any Ultimate Beneficiary Owners ("UBOs") that hold a greater
than 25% stake, providing the exact each individual's stake as a percentage
in the entity as well as a scanned photo ID. If no UBOs with a greater than
25% stake exist, please confirm this to be the case.
N/A — Public Agency
VI) Tax ID or Foreign Equivalent: 95-600808
VII) Formation Docs:
*Please provide us with a Copy of your Articles of Incorporation
City Charter is attached.
VIII) Payments:
*Please provide us with your Standard Settlement Instructions for this transaction
on company letterhead.
See attached
Thank you in advance for your prompt attention to this request.
Please sign below to acknowledge that all information supplied to us is accurate and
complete.
Name: Hilario Gonzales
Title: Mayor
Organization: City of Vernon
CHASTER
CITY OF VERNON*
Article I. Succession
CH;1.1.
Name.
CH; 1.2.
Boundaries.
CH: 1.3.
Rights and liabilities of the city.
CH: 1.4.
Ordinances.
CH: 1.6.
Officers and. employees.
CH: 1.6.
Pending actions and proceedings.
Article II. Powers of the City.
CH:2.1.
General powers.
CH:2.2.
Emergency Powers.
CH-., 2.3.
Intergovernmental relations.
Article III. City Connell.
CH:3.1.
Composition.
CH:32.
Powers.
CH:3.3..
Eligibility.
CH.3.4.
Election and terms.
CH:3.6.
Mayor.
CH: 3.6.
Mayor pro tempore.
CH:3.7.
Vacancy.
CH:3.8.
Forfeiture.
CH:3.9.
Forfeiture procedure.
CH- 3.10.
Council meetings and rules of order.
CH:3.11.
Compensation.
'This City Charter was approved by the electorate of the City of Vernon at the
General Municipal Election held April 12, 1988.
CH:101
Supp. #36, 4-88
VERNON CITY CODE
Article IV. Ordinances and Resolutions.
CM 4.1.
' Ordinances when required.
CH:4.2.
Procedure.
CH:4.3.
Effective date.
CM 4A.
Emergency ordinances.
CM 4.5.
Adoption by reference.
CH:4.6.
Codification.
Article V. Elections.
CH: 5.1. General municipal elections.
CH: 6.2. Special municipal elections.
CH:5.3. Procedure.
CH: 5A. Initiati%.. referendum and recall.
4"
Article VI. City Admhdsbcator.
CH:6.1.
Appointment.
CH:6.2.
Removal.
CH:6.3.
Compensation.
CH:6.4.
Duties.
CH:6.5.
Noninterference,
CH:6.6.
Eligibility.
CH: 6.7.
Other positions.
Article VII. Other Officers, Hoards, Commissions
and Employees.
CH: 7.1.
City cleric
CH: 7.2.
City treasurer.
CH:7.3.
City attorney.
CH: 7.4.
Other officers.
CH: 7.5.
Boards and commissions.
CH:7.6.
Employees,
Article V11a. Fiscal Administration.
CH:8.1. Fiscal year.
CH;.8.2: ' Submission of budget.
CH:8.3. Budget contents.
CH: 8.4. Adoption of the budget and appropriations.
CH: 8.5. Amendment of the budget.
CH:102
Supp. #35, 4,88
CH: 1.1 CHARTER
CH.8.6.
Lapse of appropriations.
CH:8.7.
Taxation.
CH:8.8.
Bonded debt limit.
CH:8.9.
Franchises.
CH:8,10.
Contracts.
CH:8.11.
Audit.
Article UL Miscellaneous Provisions.
CH:9.1.
Construction.
CH:9.2.
Violations.
CM 9.3.
Definitions.
CH: 9.4.
Official bonds.
CH:9.8.
Residence.
CH:9.6.
Severability.
Article I. Succession.
CH: 1.3
CH:1.1. Name.
The municipal corporation now existing and known as the City of
Vernon shall remain and continue to exist as a municipal corpo-
ration under its present name.
CH:1.2. Boundaries.
The boundaries and territoryof the City of Vernon shall continue
as now established until changed in a manner sufficient to legally
alter the boundaries and territory.
CM 1.3. Bights and liabilities of the city.
,-The city shall continue to own, possess, control, and remain
vested with all rights and property of every kind and nature owned,
possessed, controlled, or vested at the time that this Charter takes
effect. All legally enforceable debts, obligations, liabilities, and
contracts with respect to the city and in force at the time this
Charter takes effect shall be unaffected by the adoption of this
Charter.
CH.103
Supp. #36, 4-88
CH: IA VERNON CITY CODE CH: 1.6
CH: IA. Ordinances.
Each ordinance, code, resolution and other regulation, or portion
thereof, in force on the date that this Charter takes effect, and not
inconsistent with this Charter, shall be in force after this Charter
takes effect and shall remain in force until amended, repealed or
superseded by proper authority. If any section, subsection or
provision of such existing ordinance, code, resolution or other
regulation is inconsistent with this Charter and the remainder
thereof is not inconsistent with this Charter, such inconsistent
portion shall be deemed to be severed and repealed and the
remainder of such ordinance, code, resolution or other regulation
shall remain in force until amended, repealed or superseded.
CH:1.5. Officers and employees.
The tenure, duties and responsibilities of :the officers and
employees of the city shall not be affected by the adoption of this
Charter, except as specifically provided in this Charter, but shall be
subject to such ordinances or actions as may be duly adopted or
taken by the city council of the city subsequent to the adoption of
this Charter. No provision of this Charter shall be construed to
grant a right to employment to city employees.
CH:1.6. Pending actions and proceedings.
Neither this Charter, nor its adoption, shall affect or abate any
civil action or proceeding or criminal action or proceeding, brought
by or against the city or any officer, office, department or agency of
the city, which is pending on the date that this Charter takes effect.
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CH: 2.1 CHARTER CH: 2.2
Article II. Powers of the City.
CH: 2.1. General powers.
The city shall have full power and authority to adopt, make,
exercise and enforce all legislation, laws, and regulations and to
take all actions in respect to municipal affairs, without
limitation, which may lawfully be adopted, made, exercised,
taken or enforced under the Constitution of the State of
California subject only to such limitations as may be provided
by this Charter. The city shall also have the power and
authority to adopt, make, exercise and enforce all legislation,
laws and regulations and to take all actions and to exercise any
and all rights, powers and privileges heretofore or hereafter
established, granted or prescribed by any law of the State of
California, or by this Charter, or by other lawful authority.
The specification in this Charter of any particular power
shall not be held to be exclusive of any other specific power that
may be exercised under the general power, or of the general
powers, provided for in this section.
CH: 2.2. Emergency powers.
Notwithstanding any general or special provisions of this
Charter, in order to ensure continuity of governmental
operations in periods of extreme emergency resulting from
damage or destruction from acts of war, subversion, terrorism,
natural disaster or other causes of whatever nature, the City
Council, by majority vote of its members in office, shall have the
power and immediate duty to declare an emergency by
resolution and:
(a) To provide for prompt and temporary succession to the
powers and duties of all city offices, whether filled by election or
appointment, when the incumbent may become unavailable
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§ 2.3 VERNON CITY CODE § 3.2
for carrying on the powers and duties of such office; and
(b) To adopt such other measures as may be necessary and
proper for ensuring the continuity of city operations, including,
but not limited to the financing thereof.
CH: 2.3. Intergovernmental relations.
The city may exercise any of its powers, perform any of its
functions, or participate in the financing thereof, jointly or in
cooperation, by contract or otherwise, with any one or more
governmental entities or civil divisions or agencies thereof,
Article III. City Council.
CH:3.1. Composition.
There shall be a City Council composed of five members,
with staggered terms as provided in Section 3.4, elected at large
by the qualified voters of the City. (Adopted and ratified by the
voters at the election of June 2, 2009)
CH:3.2. Powers.
Subject to the provisions of this Charter, and the valid
delegation by this Charter of any power to any person, officer,
board or committee, the city council shall have the power and
authority, in the name of the city, to exercise all of the
governmental, legislative, administrative or other power,
authority or function of the city which a city council could
exercise under the Constitution of the State of California and
which now or hereafter would be competent for this Charter
specifically to enumerate.
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CH: 3.3 CHARTER CH: 3.4
CH:3.3. Eligibility.
No person shall be eligible to hold the office of
councilmember unless he or she is a voter and resident of the
City of Vernon at the time of filing nomination papers or
declaring candidacy and remains a voter and resident until the
election and throughout his or her term as councilmember.
CH: 3.4. Election and terms.
The regular election of councilmembers shall be held on the
second Tuesday of April in each year, commencing in 2010. The
terms of council members shall be staggered so that each
council member shall serve a five year term and one. council
member shall be elected each year; provided, however, that in
order to effect the election of council members according to
staggered terms as set forth above, upon adoption of this section
by the voters, the City Council shall assign each Council
position a number, with the Council seats which expire in 2010
assigned numbers 1, 2 and 3 by lot, and Council seats which
expire in 2012 assigned numbers 4 and 5 by lot. Council seat
number 3 will be subject to election for five year terms
commencing in 2010. Council seat number 1 will have its. term
extended one year to 2011, and will be subject to election for
five year terms commencing in 2011. Council seat number 2 will
have its term extended two years to 2012, and will be subject to
election for five year terms commencing in 2012. Council seat
number 4 will have its term extended one year to 2013, and will
be subject to election for five year terms commencing in 2013.
Council seat number 5 will have its term extended for two years
to 2014, and will be subject to election for five year terms
commencing in 2014.
The city council shall be the final judge of election results
and the qualifications of its members. The city council shall
canvass the returns of an election on the first Tuesday following
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§ 3.5 VERNON CITY CODE § 3.6
a city council election or such other date within fifteen days of
the election as may be provided by ordinance. The terms of each
elected council -member shall begin at the hour of the
completion of the canvass of the election returns. In the absence
of death, • removal from office or disqualification, each
councilmember shall serve until expiration of his or her term
and until a successor qualifies. (Adopted and ratified by the
voters at election of June 2,2009)
CH:3-5 Mayor.
At the council meeting at which any councilmember is
installed following a regular municipal election, and at any time
when there is a vacancy in the office of mayor, the city council
shall meet and shall elect one of its members as mayor. The
mayor shall be the presiding officer of the city council. The
mayor shall be a member of the city council for all purposes and
shall have all the rights, powers and duties of a member of the
city council in addition to those powers and duties conferred
upon the mayor by virtue of his or her office.
The mayor shall be the official head of the city for all
ceremonial purposes. The mayor shall perform such other
duties consistent with the office of mayor as may be prescribed
by this Charter or as may be provided by the city council. The
mayor shall serve in his or her capacity at the pleasure of the
city council and may be removed by a majority vote of the
members of the city council.
CH: 3.6. Mayor pro tempore.
At the time that a mayor is selected, the city council shall
also designate one of its members as mayor pro tempore. The
mayor pro tempore shall serve in such capacity at the pleasure
of the city council and may be removed by a majority vote of the
members of the council. The mayor pro tempore shall perform
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CH: 3.7 CHARTER CH: 3.8
the duties of the mayor during the mayor's absence or
disability.
CH:3.7. Vacancy.
Any vacancy occurring in the city council for whatever
reason may be filled by appointment by the city council. If the
city council fails to fill the vacancy within thirty days, then the
city council shall immediately call a special election to fill the
vacancy.
Any person appointed or elected to fill a vacancy on the city
council shall hold office for the remainder of the term in the
absence of death, removal from office or disqualification.
If an election occurs at which one or more full terms and one
or more unexpired terms are to be filled, no distinction between
the full terms and the unexpired terms shall be made in
nominating or voting. The person or persons elected by the
highest number of votes shall be elected for the full term or
terms and the person or persons elected with the fewest votes
shall be elected for the unexpired term or terms.
CH:3.8. Forfeiture.
The following shall be grounds for forfeiture of a council-
member's office:
(a) Absence from three consecutive regular meetings of the
council without permission of, or excuse by, the council, for
absence from at least one of those meetings expressed in its
official minutes;
(b) Conviction of a crime involving moral turpitude;
(c) Failure at any time during the councilmember's term of
CH:lo8. i
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CH: 3.9 CHAaTM CH: 3.10
office to meet any qualification for office prescribed by this Charter
or by the Constitution of the State of California
A vacancy caused by the forfeiture of a councilmember's office
shall be filled as prescribed by Section 3.7. of Article III of this
Charter.
CH: 3.9. Forfeiture procedure.
The council shall be the final judge of the grounds for forfeiture of
a councilmembees office and for that purpose shall have the power
to subpoena witnesses, administer oaths and require the produc-
tion of evidence. A member charged with forfeiture of office shall be
entitled to a public hearing on demand. Notice of such hearing shall
be given in the manner provided by ordinance.
An order of the city council of forfeiture shall be effective
immediately. A petition for judicial review of such order may be
Sled in a court of competent jurisdiction within two weeks after
notice to the councilmember of such order. Sending a copy of the
order of forfeiture by United States mail, certified and postage
prepaid, addressed to the councilmember at his or her address on
file with the city clerk, shall constitute notice for purposes of this
section. During the pendency of any such judicial action or
proceeding, anyone appointed by the council or elected to fill the
vacancy resulting from such forfeiture shall have all the rights,
duties, and powers of a councilmember and shall continue in such
office for the remainder of the term (in the absence of death,
removal from office or disqualification) unless and until a final
judgment is rendered holding the declaration of forfeiture to be
invalid or ordering the Council to reinstate the councilmember.
CH: 3.10. Council meetings and rules of order.
The city council shall hold regular meetings at least once each
month. The frequency, time and place of meetings, provisions for
adjournment of meetings and calling of special meetings and the
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CH: 3.11 VERNON CITY CODE CH: 4.1
rules of order for the conduct of council proceedings shall be
established by ordinance adopted by the council.
CH; 3.11. Compensation.
The council may determine the base compensation of council -
members by resolution adopted by a majorityvote of the members
of the council. Any change in the base compensation of council -
members shall be effective on the first day of the following fiscal
year or such other date as may be specified in the resolution.
In addition to such base compensation, individual council -
members may be compensated for serving on city boards, commis-
sions, committees or other city governmental bodies. Such addi-
tional compensation shall be set by resolution adopted by a
majority vote of the members of the council. Any change in
additional compensation of councilmembers shall be effective on
the first day of the following fiscalyear or such other date as may be
specified in the resolution.
Councihnembers shall also receive compensation for actual or
anticipated expenses that may be incurred in the performance of
their duties of office.
Article IV. Ordinances and Resolutions.
CH: 4.1. Ordinances when required.
The following actions by the city council shall be taken by
ordinance:
(a) Any action which this Charter requires to be taken by
ordinance;
(b) Provision of a fine or other penalty or establishment of a
rule or regulation forviolatidn of which a fine or other penaltymay
be imposed;
(c) Grant of a franchise;
(d) Creation of, alteration of, or abolishment of a com-
mission, board or agency;
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CH: 4.2 CHARTER CH: 4.2
(e) Restriction on the use of property,
(f) Adoption or amendment.of a code;
(g) Adoption of ordinances proposed under the initiative
power; and
(h) Amendment orrepeal of anyordinance or code previously
adopted.
Actions other than those referred to above in this section may be
taken by ordinance, by resolution or order duly entered in the
minutes of a council meeting as may be appropriate.
CH: 4.2. Procedure.
Every proposed ordinance shall be introduced in writing and
substantially in the form required for adoption. The enacting
clause shallbe, substantially 'The CityCouncil ofthe Cityof Vernon
hereby ordains:".
Except as provided by this Charter, no ordinance shall be
adopted by the city council on the day of Its introduction, nor
within fivedaysthereafter. Upon introduction anduponsecondpresent-
_. ation, unless at least one councilmember requests that an ordinance
be read in full, an ordinance may be read by title only. Unless a
higher vote is required by other provisions of this Charter, the
affirmative votes of a majority of the members of the City Council
shall be required for the enactment of any ordinance. Adopted
ordinances shall be signed by the mayor and attested by the city
clerk
In the event that any ordinance is substantially altered after its
introduction, it shall not be adopted within five days after the date
of such- alteration. The correction of typographical or clerical
errors or other minor changes shall not constitute the making of an
alteration within the meaning of this paragraph.
The city council mayprovide by ordinance for any publication or
posting of ordinances as it deems appropriate.
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CH: 4.3 VERNON CITY CODE CH: 4.5
CH: 4.3. Effective date.
An ordinance shall be effective after the thirtieth day following
its adoption with the exception of the following ordinances which
shall take effect upon adoption:
(a) An ordinance calling or otherwise relating to any election;
(b) An ordinance relating to public improvements, the cost
of which is to be borne wholly or in part by special assessments:
(c) An ordinance declaring the amount of money necessary
to be raised by taxation, or fixing the rate of property taxation, or
levying tax upon property;
(d) An ordinance fixing utility rates or charges;
(e) An emergency ordinance adopted as provided in Section
4.4. of this article of this Charter.
Ordinances referred to in paragraphs (a) through (d) of this
section may be introduced and adopted at one and the same
regular or special meeting.
An ordinance may specify a date on which all or a portion of its
provisions shall be operative.
CH: 4.4. Emergency ordinances.
Any ordinance declared by the city council to be necessary as an
emergency measure for the immediate preservation of the public
peace, health, or safety, and containing a statement of the reasons
for its urgency, may be adopted in the manner provided by this
Charter except that such emergencyordinance may be introduced
and adopted at one and the same regular or special meeting, and
shall take effect immediately.
CH: 4.5. Adoption by reference.
Detailed regulations pertaining to any subject, model codes, and
codifications of ordinances of other public agencies may be
adopted by reference, in their original form or with amendments
thereto, with the same effect as an ordinance, in the manner set
CH:112
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CH: 4.6 CHARTER CH: 5.3
forth for adopting ordinances. Not less than threecopies of the
regulations, codes or ordinances so adopted shall be filed and
kept on file for use and examination by the public in the office
of the city clerk.
CH:4.6. Codification.
The city council may by ordinance codify the ordinances of
the city. Ordinances so codified shall be repealed as of the
effective date of the codification unless the city council shall
otherwise provide. Amendments to a code shall be enacted by
ordinance.
Article V. Elections.
CH: 5.1. General municipal elections.
General municipal elections shall be held in the city on the
second Tuesday of April in each year. (Adopted and ratified by
the voters at the election of June 2, 2009.)
CH: 5.2. Special municipal elections.
All other municipal elections shall be special municipal
elections.
CH:5.8. Procedure.
The city council is authorized to adopt by ordinance
procedures governing municipal elections. Until the city council
adopts by ordinance provisions governing municipal elections,
all elections shall be held in accordance with the general laws of
the State of California. If an ordinance respecting municipal
elections is adopted by the city council thereby superseding
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CH: 5.4 VERNON CITY CODE CH: 5.4
certain provisions of the general laws governing municipal
elections, the general laws not so superseded as they may exist
from time to time shall be applicable unless and until the city
council shall take action otherwise.
CH: 5.4. Initiative, referendum and recall.
The power of the initiative and referendum and of the recall
of municipal elective officers is reserved to the voters of the city.
The procedures for initiative, referendum and recall shall be
governed by ordinance or ordinances of the city. Until the city
council adopts by ordinance provisions governing initiative,
referendum and recall, these procedures shall be in accordance
with the general laws of the State of California. If an ordinance
respecting initiative, referendum or recall of municipal elective
officers is adopted by the City Council, thereby superseding
certain provisions of the general laws governing initiative,
referendum and recall, the general laws not so superseded as
they may exist from time to time shall be applicable unless and
until the city council shall take action otherwise.
No initiative ordinance providing for the expenditure of
public money or for a change in salaries of any city officer or
employee shall take effect until the beginning of the fiscal year
next following the date of its adoption.
Editor's Note --Pursuant to Section 5.4 of the Charter of the
City of Vernon, the procedures for recall of municipal elective
officers shall be governed by ordinance of the city and said
ordinance shall supersede certain provisions of the general laws
of the State of California governing the recall of municipal
elective officers;
The City Council adopted Ordinance No. 1123, codified as
Article XIV of Chapter 2 of the Code of the City of Vernon,
establishing procedures for the recall of municipal elective
officers as provided for in the Charter.
CH:114
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CH:6.1 CHARTER CH:6.1
Section 4.3 of the Charter of the City of Vernon allows an .
ordinance to be introduced and adopted at one meeting if it
relates to an election.
Article VI. City Administrator.
CH:6.1. Appointment.
The city council shall appoint, by majority vote, a city
administrator who shall be the chief administrative officer of
the City of Vernon. The city administrator shall serve at the
pleasure of the council except as may otherwise be provided by
written contract; provided, however, that the city administrator
shall not be removed from office except as provided by this
Charter.
The city administrator shall engage in no other business or
occupation except as may be permitted by the council.
CH:114.1
Supp. #68, 6.09
CH: 6.2 CHARTER CH: 6.2
CEL 6.2. Removal.
(a) Except as otherwise provided by this section, the city
administrator maybe removed from office by a majorityvote of the
members of the city council
(b) At least thirty days before the effective date of removal,
the city administrator shall be furnished with a written notice
stating the councils intention to remove and, if requested by the
city administrator, the reasons therfor. Sending a copy of such
notice by United States mail, certified and postage prepaid,
addressed to the city administrator at his or her last known
address, shall constitute notice for purposes of this section. Within
seven days after receipt of such notice, the city administrator may,
bywritten notification to the city council, request a public hearing
before the city council. Upon such request, the council shall fix a
time and place for public hearing which shall .be held before the
date of the city administrator's removal. The city administrator
may appear and be heard at such hearing. The purpose of the
hearing is to allow the city council and the city administrator to
present publicly all pertinent facts prior to final action of removal.
In removing the city administrator, the city council shall use its
uncontrolled discretion and its action shall not depend upon. any
showing or degree of proof at the hearing. The city council action
shall be final.
(c) After furnishing the city administrator with written
notice of intended removal, the city council may suspend the city
administrator from duty with regular compensation to continue
until removal as provided by this section 6.2.
(d) The city administrator shall not be removed within
ninety days after the election of a councilmember unless.
(1) The city administrator has been convicted of com-
mission of a felony; or
(2) The city administrator has been convicted of a crime
prescribed by statute applicable to municipal officials.
In either case the city administrator may be removed by majority
vote of the members of the city council
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CH: 6.3 VERNON CITY CODE CH: 6.5
CH.6.i3. Compensation.
Compensation for the city administrator shall be set by the city
council. However, compensation for the city administrator shall
not be reduced within ninety days after the election of a council -
member.
CH. 6.4. Duties.
The city administrator shall be responsible to the city council for
the proper and efficient management of all the affairs of the city
and those specific duties assigned to the city administrator by this
Charter or by the city council. The specific duties of the city
administrator may be specified by ordinance, resolution or order of
the city council.
CH:6.5. Noninterference.
The power to direct the city administrator rests with the council
as a governing body, not with its individual members. No individual
member of the council, without authorization of the council, shall
in any manner direct or request the city administrator to appoint
any person to and/or remove any person from any office or
position of employment with the city.
No individual member of the city council, without authorization
of the council, shall give orders or instructions publiclyor privately
to any person under the jurisdiction of the city administrator or
otherwise interfere with the administrative staff of the city.
No individual member of the city council, without authorization
of the council, shall undertake to coerce or direct the city
administrator with respect to any of the city administrator's duties,
and/or any municipal contract, and/or in connection with the
purchase of any municipal supplies.
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CH: 6.6 CHARTER CH: 7.2
CH:6.6. Eligibility.
No person shall be eligible to be appointed city administrator
while serving as a member of the city council or within two years
following the termination of membership on the city council.
CH: 6.7. Other positions.
The citycouncil may appoint the city administrator to any other
office in the city and direct the city administrator to carry out the
duties of that office or any other position of employment with the
city in addition to his or her duties as city administrator.
Article VI. Other Officers, Boards, Commissions,
and Employees.
CH: 7.1. City clerk.
There shall be a city clerk who shall be the custodian of the city
seal and shall maintain a book or books of the ordinances and
resolutions adopted by the city council and the minutes of all
meetings and actions of the council. The city council shall provide
by ordinance for the method of selection of the city clerk, by
appointment or election, and the duties and tenure of the city clerk
The city clerk's compensation shall be fixed by the city council.
CH: 7.2. City treasurer.
There shall be a city treasurer who shall receive and safely keep
the funds of the city and shall disburse the same for public
purposes pursuant to appropriations and directions by the city
council. The city council shall provide by ordinance for the method
of selection of the city treasurer, by appointment or election, and
the duties and tenure of the city treasurer. The city treasurer's
compensation shall be fixed by the city council. The city treasurer
shall be bonded in an amount determined by the city council.
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CH: 7.3 VERNON CrrY CODE CH: 7.6
CH: 7.3. City attorney.
There shall be a city attorneywho shall be the legal officer of the
city. The city attorney shall serve at the pleasure of the city council
unless otherwise provided by written contract, and shall perform
such duties and provide such professional services as may be
assigned by the city council unless otherwise provided by written
contract. The compensation ofthe cityattorneyshall be determined
by the city council subject to any provisions of a written contract of
employment.
CH: 7.4. Other officers.
The city council shall provide for such other officers as it deems
appropriate, and shall fix the duties, tenure and compensation of
such officers by ordinance.
CH: 7.5. Boards and commissions.
The city council may, by ordinance, establish such boards and
commissions as the council deems to be necessary, and shall .
provide for the method of selection, tenure, duties and any
compensation of the boards and commissions so established.
CH:7.6. Employees.
All city employees shall serve at the will and pleasure of the city
council. No city employee shall have any right to employment with
the city unless that employee and the city have entered into a
written contract which gives the employee a property right to
employment with the city.
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CH: 8.1 CHARTER CH: 8.3
Article VIH. Fiscal Administration.
CH: 8.1. Fiscal year.
The fiscal year of the city shall begin on the first day of July and
end on the last day of June of the following year. The council may,
by ordinance, change the fiscal year.
CH: U. Submission of budget.
On or before the thirtieth day preceding the last day of the fiscal
year, the city administrator shall submit to the city council a
proposed budget for the ensuing fiscal year.
CH: U. Budget contents.
The proposed budget shall contain the following.
(a) • An estimate of the revenues and expenditures for each
city department for the ensuing fiscal year;
(b) A statement of comparison of expenditures for the
current fiscal year with proposed expenditures -for the ensuing
fiscal year, and reasons for the proposed increase or decrease;
(c) An estimate of money needed for contingent or emergen-
cy purposes;
(d) An estimate of all anticipated revenues;
(e) An estimate of the tax rate necessary to meet the
expenditures proposed;
(f) A recommendation for the amount of funds to be allocated
to capital outlays;
(9) A recommendation for amounts to be appropriated, with
reasons therefor, in such detail as the council may direct;
(h) Such other or further information as the city administra-
tor may deem advisable to submit, subject to approval by the city
council.
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CH: 8A VERNON CITY CODE CH: 8.6
CH: 8.4. Adoption of the budget and appropriations.
After receiving the budget, the city council shall hold a public
hearing regarding the adoption of the budget. Notice ofthe hearing
shall be given in such manner as the city council may provide by
ordinance. Copies of the proposed budget shall be made available
in the city clerk's office in city hall for public inspection.
At or after the public hearing, the council shall make anychanges
to the budget that it deems advisable and shall adopt the final
budget by resolution passed by the affirmative vote of a majority of
the members of the council on or before the last day of the fiscal
year preceding the fiscal year for which the budget is adopted (the
"budget year").
The resolution adopting the budget shall also operate as an
appropriation of funds in the amounts and for the purposes set
forth in the budget so adopted..
If the council fails to adopt the budget by the last day of such
preceding fiscal year, the amounts appropriated for the preceding
fiscal year shall be deemed adopted for the budget year on a
month -to -month basis, with all items prorated accordingly, until
such time as the city council adopts a budget for the budget year.
CH: 8.5. Amendment of the budget.
At any meeting of the city council after the adoption of the
budget, the city council may amend or supplement the budget by
the affirmative vote of a majority of the members of the council.
CH: 8.6. Lapse of appropriations.
Every appropriation, except an appropriation for a capital
expenditure, shall lapse at the end of the last day of the fiscal year if
that appropriation has not been expended or lawfully encumbered.
An appropriation for a capital expenditure shall continue in force
until the purpose for which it was made has been accomplished or
abandoned. The purpose of any such appropriation shall be
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CH: 8.7 CHARTER CH: 8.10
deemed abandoned if three years pass without any disbursement
from or encumbrance of the appropriation for such purpose.
CH: M. Taxation.
The city council may adopt all or part of a system of taxation for
the assessment, levy and collection of city taxes. The city council
may, by ordinance, authorize the transfer to, assumption of,, and
discharge by ofi9cers of the County of Los Angeles, of any function
of the city relating to assessment .of property for taxation, the
equalization of such assessment, and collection of taxes.
CH: 8.8. Bonded debt limit.
The total bonded general obligation debt of the city shall not
exceed fifteen percent of the assessed valuation of all property
taxable for municipal purposes.
CH:8.9. Franchises.
Franchises may be granted to persons, firms, corporations, or
other entities for such consideration and upon such terms,
conditions, restrictions, or limitations as may be prescribed by the
city council by ordinance.
CH. U0. Contracts.
The city council shall have the power, by majority vote, to enter
into any contract on behalf of the city. All contracts must be in
writing, signed by the mayor or other officer authozied by resolu-
tion, and attested by the city clerk There shall be no bidding
requirements for any contract unless the city council otherwise
provides by ordinance.
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CH: 8.11 VERNON CITY CODE CH: 9.2
CH:8.11. Audit.
The city council shall appoint a California certified public
accountant or firm of certified public accountants to provide an
independent, annual audit of all city accounts, including the
accounts of all departments, officers, and employees who receive,
handle or disburse public funds. The citycouncil may require more
frequent audits as it deems advisable.
Within one hundred twenty days after the end of the fiscal year,
unless the city council extends such time, a final audit and report
shall be submitted to each member of the city council and to other
officers designated by the council. Also, copies of the final audit and
report shall be provided to such other persons or agencies as the
city council may direct, and copies shall be made available in city
hall for public inspection.
Article IX. MisceHaneous Provisions.
CH:9.1. Construction.
The general grant of power to the city under Article II of this
Charter shall be construed broadly in favor of the city. The specific
provisions enumerated in this Charter are intended to be and shall
be interpreted as limitations upon the general grant of power and
shall be construed narrowly.
CH:9.2. Violations.
The city council may establish fines and penalties for violations of
ordinances.
CH:122
Supp. #35, 4.88
CH: 9.3 CEiAMR CH: 9.5
CH:9.3. Definitions.
Unless the provision or the context otherwise requires, as used in
this Charter.
(a) "Shall" is mandatory, and "may" is permissive;
(b) "City" is the City of Vernon;
(c) "Council" or "City Council" is the city council of Vernon;
(d) '' WAdmhUstrator"or"Administrator"isthecityadminis-
trator of Vernon;
(e) "Majority" of the city council means a majority of a
quorum of the city council.
(f) "Majorityof the members" of the council means a majority
of the entire membership of the city council.
(g) The masculine includes the feminine and the feminine
includes the masculine.
(h) The singular includes the plural and the plural includes
the singular.
CH: 9.4. Official bonds.
The city council shall, by ordinance, determine which officers or
other persons in the service of the city, in addition to the city
treasurer, shall give bonds for the faithful performance of their
duties. The council shall fix byordinance or resolution the amounts
and terms of the official bonds of all officials or employees who are
required to give such bonds. All bonds shall be executed by a
responsible corporate surety, and shall be approved as to form by
the city attorney, and shall be filed with the city. Premiums on
official bonds shall be paid by the city.
CH:9.5. Residence.
The city council may, to the maximum extent permitted by the
Constitution of the State of California, provide by ordinance for
protection against fraud in municipal elections in the cityinvolving
CH:123
Supp. #35, 4-88
CH: 9.6 VERNON Crry CODE CH: 9.6
claims of residence in areas of the city in which personal residence
is not permitted by law.
CH: 9.6 Severability.
If any provision of this Charter is held invalid, the other
provisions of the Charter shall not be affected thereby. If the
application of this Charter or any of its provisions to any person or
circumstance is held invalid, the application of the Charter and its
provisions to other persons or circumstances shall not be affected
thereby.
CH:124
supp. #36, 4.88
CHARTER INDEX
A
CITY COUNCIL (Coned)
APPROPRIATIONS.
Powers, CH: 3.2.
Adoption of budget, CH: 8.4.
Rules of order, CH: 3.10.
Terms, CH: 3.5.
Lapse of appropriation, CH: 8.6.
Vacancy, CH: 3.7.
B
COMPENSATION.
BOARDS AND COMMISSIONS.
City administrator, CH: 6.3.
Establishment, CH:7.6.
City council, CH: 3.11.
BUDGET.
D
Adoption, CH: 8.4.
E
Amendment, CH: 8.5.
Appropriations, CH: 8A.
ELECTION&
Contents, CH: 8.3.
General municipal, CH: 5.2.
Submission of budget, CH: 8.2.
Initiative, CH: 5.4.
C
Procedure, CH:5.3.
Recall, CH: 5.4.
CITY ADMINISTRATOR
Referendum, CH:5A.
Special Municipal, CH: 5.2.
Appointment, CH: 6.1.
Compensation, CH: 6.3.
EMPLOYEES.
Duties, CH: 6A.
Provisions, CH: 7.6.
Eligibility, CH: 6.6.
Noninterference, CH: 6.5.
F
Other positions, CH: 6.7.
Removal, CH: 6.2.
FISCAL ADMIDIISTBATOIL
CITY ATTORNEY.
Appropriations.
Provisions, CH: 7.3.
Adoption of budget, CH: 8.4.
Lapse of appropriation, CH: 8.6.
CITY CLERK
Audit, CH: 8.11.
Bonded debt limit, CH: 8.8.
Provisions, CH: 7.1.
Budget.
Adoption, CH; 8.4.
CITY COUNCIL
Amendment, CH: S.5.
Compensation, CH: 3.11.
Contents, CH: 8.3.
Composition, CH: 3.1.
Submission of Budget, Ch: 8.2.
Election, CH. 3.4.
Contracts, CH: 8.10.
Eligibility, CH:
year,
Forfeiture, CH:: 3. 3.8.
FrancFiscalisesCH: 8.9.
Forfeiture procedure, CH;;
Taxation, CH: 8.7.
3.9.
Mayor, CH: 3.6.
G — L
Mayor pro tempore, CH: 3.7.
Meetings, CH: 3.10.
CIA
Supp. #35, 4-88
VERNON Cry CODE
Fr
MISCELLANEOUS PROVISIONS.
Construction, CH: 9.1.
Definitions, CH: 9.3.
Official bonds, CH: 9.4.
Residence, CH: 9.5,
Severability, CH: 9.6.
Violations, CH: 9.2.
MUNICIPAL ELECTIONS.
General election, CH: 5.L
Special election, CH: 5.2.
F%A
C
OFFICERS.
City attorney, CH: 7.3.
City clerk, CM 7.1. -
City treasurer, CH: 7.2.
Other officers, CH: 7.4.
P
POWERS.
Emergency, CH: 2.2.
General, CH:2.1.
Intergovernmental relations, CH: 2.3.
0
R
8
Boundaries, CH: 1.2.
Liabilities, CH: 1.3.
Name, CH: 1.1.
Officers and employees, CH: 1.5.
Ordinances, CH: 1.4.
Pending actions, CH: 1.6.
Proceedings, CH: 1.6.
T—Z
ORDINANCES AND RESOLUTIONS.
Adoption by reference, CH: 4.5.
Codification, CH: 4.6.
Effective date, CM 4.3,
Emergency ordinances, CH: 4A.
Procedure, CH: 4.2.
When required, CH. 4.1.
CI:2
Supp. #35, 4-88
CERTIFICATE OF AUTHENTICATION
STATE OF CALIFORNIA )
ss
COUNTY OF LOS ANGELES )
I, Willard G. Yamaguchi, City Clerk of the City of Vernon, County of Los Angeles, State of
California, hereby certify that the attached is a full, true, complete and authentic copy of:
Amendments. to the Vernon City Charter, which were adopted by the voters. of the
City of Vernon on August 31, 2010, as submitted to the voters and ratified by them.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official Seal of the City of
Vernon, County of Los Angeles, State of California, this 14a' day of December 2010.
_. 2,r4...`. Ldz wr.rA,
Hilario Gonzales,
Mayor of the City of Vernon,
County of Los Angeles,
State of California
M
City Clerk of the
AMENDMENTS TO THE VERNON CITY CHARTER
PASSED BY THE VOTERS ON AUGUST 31, 2010
1. Article III. City Council.
CH: 3.3. Eligibility.
No person shall be eligible to hold the office of
councilmember unless he or she has resided in the City of
Vernon and been registered to vote for at least thirty (30
consecutive calendar days immediately preceding the date
nomination naners are issued to such person by the Citv
2. Article VIII. Fiscal Administration.
CH: 8.12 Light and Power Revenues.
After revenues from the City's Light and Power
enterprise are deposited into the Light and Power Fund,
such revenues shall be used solelv for the ouroose of
4305 Santa Fe Avenue, Vernon, California 90058
Telephone (323) 583-8811
September 22, 2011
City of Vernon Settlement Instructions:
The Bank of New York Trust Company, N.A.
Account Name: Custody Escrow Account
Routing Number: 021000018
Account Number: 800452
GLA #111-565
Exclusivefy Industnaf
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4305 Santa Fe Avenue, Vernon,California90058
Telephone
September 23, 2011
Morgan Stanley Capital Services LLC
New York, New York
Ladies and Gentlemen:
I am the Interim City Attorney of the City of Vernon (the "City") and as such I have served as
counsel to the City in connection with the issuance by the City of its Novation Confirmation of
new transaction ("Novation"). As such counsel, I have examined and am familiar with (i) those
documents relating to the existence, organization and operation of the City; (ii) all necessary
documentation of the City relating to the authorization, execution and delivery of (a) Resolution
No. 2011-161, adopted by the City Council of the City on September 22, 2011, and (b) the
Novation Transaction among the City, Morgan Stanley Capital Services LLC, and Deutsche
Bank AG New York, collectively referred to herein as the "Legal Documents."
I am of the opinion that:
1. The City is a chartered city, duly created, organized and existing under the Constitution
and laws of the State of California and its charter and duly qualified to furnish municipal
services within the City.
2. The Resolution was duly adopted at a meeting of the City Council of the City, which was
called and held pursuant to law and with all public notice required by law and at which a
quorum was present and acting throughout and the Resolution is in full force and effect
and has not been amended, modified or supplemented.
3. The City has the authority and right to execute, deliver and perform the Legal
Documents, and the City has complied with the provisions of applicable law in all
matters relating to the transactions contemplated by the Legal Documents.
4. No approval, consent or authorization of any other governmental or public agency,
authority or person is required for the execution and delivery by the City of the Legal
Documents or the performance by the City of its obligations thereunder or the execution
and delivery, on the part of the City, of the Legal Documents.
Ecfusivefy industriaf
Morgan Stanley
September 23, 2011
Page 2
5. The execution and delivery of the Legal Documents by the City and compliance with the
provisions thereof will not conflict with or constitute a breach of or default under any
instrument relating to the organization, existence or operation of the City, or
commitment, agreement or other instrument to which the City is a party or by which it or
its property is bound or affected, or any ruling, regulation, ordinance, judgment, order 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.
6. There is no action, suit, proceeding, inquiry or investigation at law or in equity, or before
any court, public board or body, pending or, to the best of my knowledge, threatened
against or affecting the City or any entity affiliated with the City or any of its officers in
their respective capacities as such (nor to the best of my knowledge, is there any basis
therefor) that questions the powers of the City referred to in paragraph 3 above or in
connection with the transactions contemplated by the Legal Documents, or the validity of
the proceedings taken by the City in connection with the authorization, execution or
delivery of the Legal Documents, or wherein any unfavorable decision, ruling or finding
would adversely affect the transactions contemplated by any of the Legal Documents, or
that, in any way, would adversely affect the validity or enforceability of any of the Legal
Documents or, in any material respect, the ability of the City to perform its obligations
under any of the Legal Documents.
Based on my participation in the preparation of the Legal Documents, I advise you that no facts
came to my attention which caused me to believe that any expression of opinion contain any
untrue statement of a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
Respectfully submitted,
icIvI haelgomery
:��
Interim City Attorney
City of Vernon, 4305 Santa Fe Avenue, Vernon, California 90058 - Telephone (323) 583-8811
Juarez, Debbie
From: Enomoto, Kristen
Sent: Monday, October 24, 2011 3:22 PM
To: Juarez, Debbie
Subject: Swap transfer
Attachments: City Attorney Opinion to Morgan Stanley and Orrick 09-23-11.pdf
Debbie
The attached is for the Deutsche Bank file and replaces the separate ones done to each of Morgan and Orrick.
I mailed the three originals to Sean for the official transcript today.
Thanks.
Kristen
From: Baxter, Sean J. fmailto:sbaxterColorrick.coml
Sent: Thursday, October 13, 2011 3:49 PM
To: Enomoto, Kristen
Cc: Chu, Eric H.
Subject: Swap transfer
Hi Kristen,
I am assembling documents for a mini -transcript for the City's records in connection with the swap transfer and it looks like
Mike Montgomery has the same opinion addressed separately to Morgan Stanley and to Orrick (see attached). Can you
please ask Mike to sign three (3) original opinions which are addressed to both Morgan Stanley and Orrick? They should
be dated September 23 (not September 22 like the original Orrick opinion). These can be delivered to my attention at
your convenience. Please let me know if you have any questions.
Thank you and have a good weekend.
Sean
•J
r 1
0 R R I C K
PUBLIC FINANCE
SEAN J. BAXTER
Project Manager
ORRICK, HERRINGTON & SUTCLIFFE LLP
777 SOUTH FIGUEROA STREET
SUITE 3200
LOS ANGELES, CA 90017-5855
tel 213-612-2171
fax 2t3-612-2499
sbax eriuon ick.com
www.orrick.com
4305 Santa Fe Avenue,
Telephone (323) 583-8811
September 23, 2011
Morgan Stanley Capital Services LLC Orrick, Herrington & Sutcliffe LLP
New York, New York 777 South Figueroa Street, Suite 3200
Los Angeles, CA 90017-5855
Ladies and Gentlemen:
I am the Interim City Attorney of the City of Vemon (the "City") and as such I have served as
counsel to the City in connection with the issuance by the City of its Novation Confirmation of
new transaction ("Novation"). As such counsel, I have examined and am familiar with (i) those
documents relating to the existence, organization and operation of the City; (ii) all necessary
documentation of the City relating to the authorization, execution and delivery of (a) Resolution
No. 2011-161, adopted by the City Council of the City on September 22, 2011, and (b) the
Novation Transaction among the City, Morgan Stanley Capital Services LLC, and Deutsche
Bank AG New York, collectively referred to herein as the "Legal Documents."
I am of the opinion that:
1. The City is a chartered city, duly created, organized and existing under the Constitution
and laws of the State of California and its charter and duly qualified to furnish municipal
services within the City.
2. The Resolution was duly adopted at a meeting of the City Council of the City, which was
called and held pursuant to law and with all public notice required by law and at which a
quorum was present and acting throughout and the Resolution is in full force and effect
and has not been amended, modified or supplemented.
3. The City has the authority and right to execute, deliver and perform the Legal
Documents, and the City has complied with the provisions of applicable law in all
matters relating to the transactions contemplated by the Legal Documents.
4. No approval, consent or authorization of any other governmental or public agency,
authority or person is required for the execution and delivery by the City of the Legal
Documents or the performance by the City of its obligations thereunder or the execution
and delivery, on the part of the City, of the Legal Documents.
F�cfusivefy Industriaf
Morgan Stanley
Orrick, Herrington & Sutcliffe
September 23, 2011
Page 2
5. The execution and delivery of the Legal Documents by the City and compliance with the
provisions thereof will not conflict with or constitute a breach of or default under any
instrument relating to the organization, existence or operation of the City, or
commitment, agreement or other instrument to which the City is a party or by which it or
its property is bound or affected, or any ruling, regulation, ordinance, judgment, order 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.
6. There is no action, suit, proceeding, inquiry or investigation at law or in equity, or before
any court, public board or body, pending or, to the best of my knowledge, threatened
against or affecting the City or any entity affiliated with the City or any of its officers in
their respective capacities as such (nor to the best of my knowledge, is there any basis
therefor) that questions the powers of the City referred to in paragraph 3 above or in
connection with the transactions contemplated by the Legal Documents, or the validity of
the proceedings taken by the City in connection with the authorization, execution or
delivery of the Legal Documents, or wherein any unfavorable decision, ruling or finding
would adversely affect the transactions contemplated by any of the Legal Documents, or
that, in any way, would adversely affect the validity or enforceability of any of the Legal
Documents or, in any material respect, the ability of the City to perform its obligations
under any of the Legal Documents.
Based on my participation in the preparation of the Legal Documents, I advise you that no facts
came to my attention which caused me to believe that any expression of opinion contain any
untrue statement of a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
Respectfully submitted,
Micfiael B. Mon ornery
Interim City Attorney
City of Vernon, 4305 Santa Fe Avenue, Vernon, California 90058 - Telephone (323) 583-8811