Loading...
Resolution No. 95781 2 3 4 5 y 7 8 9 10 11 IyA 13 14 15 16 17 IVn 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 9578 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON DIRECTING, APPROVING AND AUTHORIZING CERTAIN ACTIONS BY THE VERNON NATIONAL GAS FINANCING AUTHORITY RELATING TO 2006 SERIES A, B AND C BONDS WHEREAS, the City of Vernon (the "City") owns and operates a natural gas distribution system (the "Gas System") for supplying natural gas to the municipal electric system owned and operated by the City for supplying the inhabitants, businesses and industries within the City with electricity (the "Electric System") and expects to expand the operations of the Gas System to provide natural gas to businesses and industries within the City; and WHEREAS, the Gas System provides natural gas, and the Electric System provides electricity, at rates which promote economic development within the City; and WHEREAS, the Vernon Natural Gas Financing Authority (the "Authority") has been established as a separate entity under the California Joint Exercise of Powers Act to undertake projects and programs that promote economic development within the City; and WHEREAS, such projects and programs include, among other things, the Authority's issuance of bonds pursuant to any applicable bond law, providing credit facilities and liquidity facilities for such bonds, the entry into interest rate swap agreements with respect to such bonds, the entry into agreements with respect to the purchase of natural gas by the Authority and the sale of natural gas to the City; and WHEREAS, the Authority has issued its Variable Rate Revenue Bonds (Vernon Gas Project), 2006 Series A (the "Series A Bonds"), its 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 PA 22 23 24 25 26 27 Variable Rate Revenue Bonds (Vernon Gas Project), 2006 Series B (the "Series B Bonds") and its Variable Rate Revenue Bonds (Vernon Gas Project), 2006 Series C (the "Series C Bonds" and, together with the Series A Bonds and the Series B Bonds, the "2006 Bonds") in an aggregate principal amount of $430,845,000; and WHEREAS, the 2006 Bonds were issued pursuant to an Indenture of Trust (the "Master Indenture"), dated as of June 1, 2006, between the Authority and The Bank of New York Trust Company, N.A., as trustee (the "Trustee"), as supplemented by the First Supplemental Indenture of Trust (the "First Supplemental Indenture"), dated as of June 1, 2006, between the Authority and the Trustee; and WHEREAS, the Series A Bonds were issued in four Subseries (Subseries A-1, Subseries A-2, Subseries A-3, and Subseries A-4) in an ARS Interest Rate Period as provided in the First Supplemental Indenture; and WHEREAS, the Series B Bonds and the Series C Bonds were lissued in a Weekly Interest Rate Period as provided in the First Supplemental Indenture; and WHEREAS, the Authority and Citibank, N.A. have entered into a Standby Bond Purchase Agreement with respect to the Series B Bonds (the "Series B Standby Agreement") and a separate Standby Bond Purchase Agreement with respect to the Series C Bonds (the "Series C Standby Agreement"); and WHEREAS, the Authority has determined to Convert the Interest Rate Period for the Series A Bonds from an ARS Interest Rate Period to a Long -Term Interest Rate Period as follows: (i) the Long -Term Interest Rate Period for Subseries A-1 of the Series A Bonds is to begin on April 2, 2008 and end on August 1, 2009; (ii) the Long -Term Interest - 2 - 1 2 3 4 5 6 7 8 M 10 11 12 13 I= 15 16 17 18 19 P111A 21 22 23 24 25 26 27 28 (Rate Period for Subseries A-2 of the Series A Bonds is to begin on April 3, 2008 and end on August 1, 2009; (iii) the Long -Term Interest Rate Period for Subseries A-3 of the Series A Bonds is to begin on April 4, 2008 and end on August 1, 2009; and (iv) the Long -Term Interest Rate Period for Subseries A-4 of the Series A Bonds is to begin on March 31, 2008 and end on August 1, 2009. The Authority has determined to Convert the Interest Rate Period for the Series B Bonds and Series C Bonds from a Weekly Interest Rate Period to a Long -Term Interest Rate Period as follows: (i) the Long -Term Interest Rate Period for the Series B Bonds is to begin on April 2, 2008 and end on February 1, 2009; and (ii) the Long -Term Interest Rate Period for the Series C Bonds is to begin on April 2, 2008 and end on February 1, 2009. Each such Long -Term Interest Rate Period for a Series or Subseries of the 2006 Bonds is referred to herein as the "2009 Long -Term Period" for such Series or Subseries; and WHEREAS, in connection with the Conversion of each Subseries of the Series A Bonds to the applicable 2009 Long -Term Period, there has been prepared a disclosure document in the form of a Reoffering Memorandum (such Reoffering Memorandum in the form presented at this meeting, with such changes, insertions and deletions as are made pursuant to this Resolution, being referred to herein as the "Series A Reoffering Memorandum"); and WHEREAS, in connection with the Conversion of the Series B Bonds and the Series C Bonds to the applicable 2009 Long -Term Period, there has been prepared a disclosure document in the form of a Reoffering Memorandum (such Reoffering Memorandum in the form presented at this meeting, with such changes, insertions and deletions as are made pursuant to this Resolution, being referred to herein as the - 3 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 "Series B and Series C Reoffering Memorandum"); and WHEREAS, the City has determined that it is to the City's advantage and in the public interest of the inhabitants of the City, to direct, approve and authorize the Authority's implementation of the Conversion of each Subseries of the Series A Bonds, and the Series B Bonds and Series C Bonds, to the applicable 2009 Long -Term Period, and related transactions as described herein. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF VERNON AS FOLLOWS: SECTION 1: The City Council of the City hereby finds and determines that the recitals contained hereinabove are true and correct. SECTION 2: The City Council of the City hereby directs, approves, and authorizes the Authority to: (i) implement the Conversion of each Subseries of the Series A Bonds to the applicable 2009 Long - Term Period and, in connection therewith to terminate the Broker -Dealer Agreement with Citigroup Global Markets Inc. relating to the Series A Bonds; and (ii) implement the Conversion of the Series B Bonds and the Series C Bonds to the applicable 2009 Long -Term Period. The City Council hereby ratifies and confirms all prior actions taken by or on behalf of the Authority in connection with the Conversion of each Subseries of the Series A Bonds, the Series B Bonds and the Series C Bonds to the applicable 2009 Long -Term Period. SECTION 3: The City Council of the City hereby directs, approves, and authorizes the Authority to execute and deliver a Remarketing Agreement, in substantially the form approved in Authority Resolution VNGFA-0002, to Citigroup Global Markets Inc. in connection with the Series A Bonds. - 4 - 1 2 3 4 672 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SECTION 4: The Series A Reoffering Memorandum, in substantially the form presented at this meeting, be and the same is hereby approved. Each of the Mayor, the Mayor Pro Tem, the City Administrator, the Treasurer, the City Clerk and the City Attorney of the City (each being hereby appointed an "Authorized City Representative") acting singly, is hereby authorized to approve changes, insertions and deletions to the Series A Reoffering Memorandum as may be deemed appropriate by the approving officer with respect to the offering of the Series A Bonds in connection with the Conversion of each Subseries of the Series A Bonds to the applicable 2009 Long -Term Period. Each of the Authorized City Representatives, acting singly, is hereby authorized to approve any amendment or supplement to the Series A Reoffering Memorandum contemplated by a Remarketing Agreement relating to the Series A Bonds. The use of the Series A Reoffering Memorandum in connection with the offering and remarketing of each Subseries of the Series A Bonds by Citigroup Global Markets Inc. is hereby authorized and approved. SECTION 5: The Series B and Series C Reoffering Memorandum, in substantially the form presented at this meeting, be and the same is hereby approved. Each of the Authorized City Representatives, acting singly, is hereby authorized to approve changes, insertions and deletions to the Series B and Series C Reoffering Memorandum as may be deemed appropriate by the approving officer with respect to the offering of the Series B Bonds and Series C Bonds in connection with the Conversion of the Series B Bonds and Series C Bonds to the applicable 2009 Long -Term Period. Each of the Authorized City Representatives, acting singly, is hereby authorized to approve any amendment or supplement to the Series B and Series C Reoffering - 5 - 1 2 3 4 5 6 7 8 9A 10 11 12 13 m- 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Memorandum contemplated by a Remarketing Agreement relating to the Series B Bonds and Series C Bonds. The use of the Series B and Series IC Reoffering Memorandum in connection with the offering and remarketing of the Series B Bonds and Series C Bonds by Citigroup Global Markets Inc. is hereby authorized and approved. SECTION 6: The City Council of the City hereby authorizes the City Attorney, the City Clerk and all other proper officers and officials of the City to execute and deliver such other agreements,, documents and certificates, and to perform such other acts and deeds, as may be necessary or convenient to effect the purposes of this Resolution and the transactions herein authorized. SECTION 7: The City Clerk of the City of Vernon shall certify to the passage of this resolution, and thereupon and thereafter the same shall be in full force and effect. APPROVED AND ADOPTED this 17th day of March, 2008. ATTlEST: MANUELA GIRO Cfity Clerk Name: Leonis C. Malburg Title: Mayor - - 6 - 1 STATE OF CALIFORNIA ) ss 2 COUNTY OF LOS ANGELES ) 3 I, MANUELA GIRON, City Clerk of the City of Vernon, do hereby 4 5 certify that the foregoing Resolution, being Resolution No. 9578, was 6 duly adopted by the City Council of the City of Vernon at a regular 7 meeting of the City Council duly held on Monday, March 17, 2008, and 8 thereafter was duly signed by the Mayor or Mayor Pro-Tem of the City of 9 Vernon. 10 ll xMNUELA G ON City Clerk 12 13 (SEAL) 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 - STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss In accordance with the Uniform Facsimile Signatures of Public Officials Act (Govt. Code §5500 et sue.), I HEREBY CERTIFY under oath my manual signature. Manual Signature: Name of Officer: Manuela Giron Title of Office: City Clerk City of Vernon bscribed and sworn to before 7:::this day of , 2008. Notary Public, State of California [SEAL] CALIFORNIA JURAT WITH AFFIANT STATEMENT S S�S�S�S�4 S S,3�S,.�S S S S a• S a•�a�S�S�S�S�'vf�S�S�S�S S,.�S SAS a•�S S���S�S S.�S/,.�S�S!sw. See Attached Document (Notary to cross out lines 1-6 below) ❑ See Statement Below (Lines 1-5 to be completed only by document signer[s], not Notary) x Signature of Document Signer No. 1 State of California County of © —w--i JUDITH A. LEHR Commission # 1646385 ONotary Public - Calftnic los Angeles County My Comm. Efcpkes Feb 19, 20 Place Notary Seal Above ......... . Signature of Document Sign . 2 (if any) Subscribed and sworn to (or affirmed) before me on this /�th� day of Z 20 ,JY , by Date � onth Year Name of Signer proved to me on the basis of satisfactory evidence to be the person who appeared before me (.) (a (2) Name o r proved t me on the basis of satis or evidence to b e person who appeared before me.) Signature Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove _ valuable to persons relying on the document and could prevent MRAffli - fraudulent removal and reattachment of this form to another document. Top of thumb here Top of thumb here Further Description of Any Attached Document Title or Type of Document - Ad d i(^ 4m, d '('t 6'e' ^'' Document Date: '/NU'4/ l •7' '-2 G Q 'Y Number of Pages: Signer(s) Other Than Named Above: I " l l� 02007 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 • www.NationaiNotary.org Item #5910 Reorder: Call Toll -Free 1-800-876-6827 03/18/2008 16:04 FAX 323 826 1438 CITY CLERK'S OFFICE R1001 TX REPORT TRANSMISSION OK TX/RX NO 0522 CONNECTION TEL 712124382127 SUBADDRESS CONNECTION ID ST. TIME 03/18 16:01 USAGE T 02'25 PGS. SENT 7 RESULT OK 4305 Santa Fe Avenue Vemon, CA 90058 Phone: 323/583-3811 Fax: 323/826-1438 Fax To: Morna Lebron From: Eric Fresch Company: Standard & Poor's Fax: 212-438-2127 Date: March 18, 2008 Phone: 212-438-6808 Pages: 7, including cover Re: Electric Revenue Bonds 2008A & 2008B CC: moms iebron@standardandpoors.com ❑ Urgent ❑ For Review ❑ Please Comment ❑ Please Reply ❑ Please Recycle -Comments: trfJ8 11:25 S&P PUB FIN 0eMCGrOWHi11 t,)nlponles 2122085310 P.01i06 STANDARD &POORS Fax Attention Mr. Eric T, Fresch Company City ofvernon Fax Number 323-826-1439 Please sign and fax back to 212-438-2127 Thank you From Date Total Number or Pagcs, Including Covcr 95 water St. New York, NY 10041 21243M808 Tel 212-438.2127 Fax Morna Lebron March 17, 2008 Con(identiallty Native, ThO infotYnation contained in this facsitnite messagc is 411crtded only tdr the parson or entity named above. if you are not the intended recipient, ploasc be aware that any disseMination or copying ofthis communication is strictly pmlribited, If you have received this commtnication in errnr, please iuuncdiately notify us by telephone and return the original messagc to us at the above address via Postal Scrvica Thank yu4. MAR-17-2008 11:26 S&P PUB FIN 2122085310 P.02i06 STANDARD &POOICS Revise March 17, 2008 City of Vernon 4305 Santa Fe Avenue Vernon, CA 90058 Attention: Mr, Eric T. Fresch, City Attorney Morna Lebron Manager Fee Administration 55 Water street, 381h Floor New York, NY 10041.0003 tat 212 43"808 Morna_lebron&tandardandpoors.GOM issue no.:892399 Steven 0. Zimmermann Managing Director One Market Steuart Tower, ISth Floor San Francisco, CA 94105.1000 tat 415 3TI.5004 steVO-21MMOrMann@staridardandpours.com Re: US$101,580,000 GO of Clernon, Califori:ia, Electric Revenue Bonds, Consisting of. $39,160,000 Tax Exenept Series 2008A and $62,420,000 Taxable Series 2008B Dear Mr. Fresch: Thank you for your request for a Standard & Poor's rating for the above -referenced obligations. In accepting a Standard & Poor's rating, you agree to accept and comply with this letter and the enclosed Terms and Conditions. We will make every effort to provide you with the high level of analytical performance and knowledgeable service for which we've become known worldwide. The analytic team from Standard & .Poor's is Paul Dyson and Peter Murphy. If you have any questions at any time, please feel flee to contact Paul at 415-371-5079 or by email at haul dyson (a75tandardanepoors eom. Peter can be reached at 212-438-2065 or by email at peter mutphy@standardand oors-cops. If you have not already done so, please forward a set of all pertinent information to each analyst at the following address: Standard & Poor's Ratings Services Public Finance Department One Market Steuart Tower, 15th Floor San Francisco, CA 94105-1000 In consideration of our analytic review and issuance of the rating, you agree to pay us the following fees: Rating Fee of $40,000. Standard & Poor's reserves the right to adjust the rating fee if the proposed par amount changes. Payment of the fee is not conditioned on Standard & Poor's issuance of any particular rating. Annual surveillance .fee of $10,000 will be charged for so long as we maintain the rating. The annual surveillance fees will commence twelve months after the initial rating date. MAR-17-2008 11:26 S&P PUB FIN 2122085310 P.03i06 Mr. Eric T. Fresch Page 2 March 17, 2008 Derivatives Products analvsis fee. Standard & Poor's charges a separate fee for our review of derivative products. This separate fee is applicable for derivative products secured by any of the issuer/oblilor's revenues. Derivative products include, but are not limited to, interest rate swaps, caps, collars, floors, and swaptions. Derivative products analysis fees will be determined onn a case - by -case basis based on the number and complexity of the derivative products. Other fees and expenses. You will reirnburse Standard & Poor's for reasonable travel and legal expenses if such expenses are not included in the fee. Should the rating not be issued, you agree to compensate us based on our tirne, effort, and charges incurred through the date upon which it is determined that the rating will not be issued. Please sign below to indicate your acceptance of this letter and the enclosed terms and conditions and return the signed original of this letter to me as soon as possible, Please feel free to call me at 212 438-6808 if you have any questions or suggestions about our fee Policies. Should you have any analytical questions, you may direct them to your assigned analytical team. In addition, please visit our web site at www,standardand oors.com for our ratings definitions and criteria, research highlights, and related information. We appreciate your business and look forward to working with you. Sincerely yours, Standard & .Poor's Ratings Services a division of The McGraw -Pull Companies, Inc. .By: Morna Lebron Manager Fee Administration sb cc: Mr. Jeff Higgins, Managing Director Bond Logistix MAR-17-2008 11:26 S&P PUB FIN 2122085310 P.04i06 Mr. Eric T. Fresch Page 3 March 17, 2008 CONFIRMED, AGREED AND ACCEPTED AS OF THE DATE FIRST ABOVE WRITTEN City of Vernon By: Name: Eric Fresch Title: City Administrator MAR-17-2008 11:26 S&P PUB FIN 2122095310 P.05i06 STANDARD & POOKS Standard & Poor's Ratings Services Terms and Conditions Applicable To U.S. Public Finance Ratings XgQUest for a ratinn Standard & Poor's issues public finance ratings for a fee upon request from an issuer, or from an underwriter, financial advisor, investor, insurance company, or other entity, provided that the obligor and issuer (if different from the obligor) each has knowledge of the request, The term "issuer/obligor" in these Terms and Conditions means the issuer and the obligor if the obligor is different from the issuer. Agree to Ace t Terms and Conditions. Standard & Poor's assigns Public Finance: ratings subject to the terms and conditions stated herein and in the rating letter. The issuerlobligor's use of a Standard & Poor's public finance rating constitutes agreement to comply in all respects with the terms and conditions contained herein and in the rating letter and acknowledges the issuer/obligor's understanding of the scope and limitations of the Standard & Poor's rating as stated herein and in the rating letter. Fees and,ex enses. in consideration of our analytic review and issuance of the rating, the issucr/obligor agrees to pay Standard & Poor's a rating fee, payment of the fee is not conditioned on Standard & Poor's issuance of any particular rating. In most cases an annual surveillance fee will be: charged for so long as we maintain the rating, The issuer/obligor will reimburse Standard & Poor's for reasonable travel and legal expenses if such expenses are not included in the fee, Should the rating not be issued, the issucr/obligor agrees to compensate Standard & Poor's based on the time, effort, and charges incurred through the date upon which it is determined that the rating will not be issued. Scopp of Ratin _ The issuer/obligor understands and agrees that (i) an issuer rating reflects Standard & Poor's current opinion of the issucr/obligor's overall .financial capacity to pay its .financial obligations as they come due, (ii) an issue rating reflects Standard & Poor's current opinion of the likelihood that the issuer/obligor will make payments of principal and interest on a timely basis in accordance with the terms of the obligation, (iii) a rating is an opinion and is not a verifiable statement of fact, (iv) ratings are based on information supplied to Standard & Poor's by the issuer/obligor or by its agents and upon other information obtained by Standard & Poor's from other sources it considers reliable, (y) Standard & Poor's does not perform an audit in connection with any rating and a rating does not represent an audit by Standard & Poor's, (vi) Standard & Poor's relies on the issuer/obligor, its accountants, counsel, and other experts for the accuracy and completeness of the information submitted in connection with the rating and surveillance process, (vii) Standard & Poor's undertakes no duty of due diligence or independent verification of any information, (viii) Standard & Poor's does not and cannot guarantee the accuracy, completeness, or timeliness of the information relied on in connection with a rating or the results obtained from the use of such information, (ix) Standard & Poor's may raise, lower, suspend, Place on CreditWatch, or withdraw a rating at any time, in Standard & POWS sole discretion, and (x) a rating is not a "market" rating nor a recommendation to buy, hold, or sell any financial obligation. Publication. Standard & Poor's reserves the right to publish, disseminate, or license others to publish or disseminate the rating and the rationale for the rating unless the issuer/obligor specifically requests that the rating be assigned and maintained on a confidential basis. If a confidential rating subsequently becomes public through disclosure by the issuer/obligor or a third party other than Standard & Poor's, Standard & Poor's reserves the right to publish it. Standard & Poor's may publish explanations of Standard & Poor's ratings criteria from time to time and nothing in this Agreement shall be construed as limiting Standard & Poor's ability to modify er refine Standard & Door's criteria at any time as Standard & Poor's deems appropriate. Information to a Provided b the Issuer/obli r. The issuer/obligor shall meet with Standard & Poor's for an analytic review at any reasonable time Standard & Poor's requests. The issuer/obligor also agrees to provide Standard & Door's promptly with all information relevant to the rating and surveillance of the rating including information on Material changes to information previously supplied to Standard & Poor's. The rating may be affected by Door's opinion of the accuracy, completeness, Standard & timeliness, and reliability of information received from the issuer/obligor or its agents. Standard & Poor's undertakes no ditty of due diligence or independent verification of MAR-17-2008 11:27 S&P PUB FIN 2122085310 P.06i06 r information provided by the issuer/obligor or its agents. Standard & Poor's reserves the right to withdraw the rating if the issuer/obligor or its agents fails to provide Standard & Poor's with accurate, complete, timely, or reliable information. Standard & Poor's Not an Advisor riducia or Ex crt. The issuer/obligor understands and agrees that Standard & Poor's is not acting as an investment, financial, or other advisor to the issuer/obligor and that the issuer/obligor should not and cannot rely upon the rating or any other information provided by Standard & Poor's as investment or financial advice, Nothing in this Agreement is intended to or should be construed as creating a fiduciary relationship between Standard & Poor's and the issuer/obligor or between Standard & Poor's and recipients of the rating. The issuer/obligor understands and agrees that Standard & Poor's has not consented to and will not consent to being named an "expert" under the applicable securities laws, including without limitation, Section 7 of the U.S. Securities Act of 1933, Limitation on Dama es. The issuer/obligor agrees that Standard & Poor's, its officers, directors, shareholders, and employees shall not be liable to the issuer/obligor or any other person for any actions, damages, claims, liabilities, costs, expenses, or tosses in any way arising out of or relating to the rating or the related analytic services provided for in an aggregate amount in excess of the aggregate fees paid to Standard & Poor's for the rating, execpt for Standard & Poor's gross negligence or willful misconduct. In no event shall Standard & Poor's, its officers, directors, shareholders, or employees be liable for consequential, special, indirect, incidental, punitive or exemplary damages, costs, expenses, legal fees, or losses (including, without limitation, lost profits and opportunity costs). In furtherance and not in limitation of the foregoing, Standard & Poor's will not be liable in respect of any decisions made by the issuer/obligor or any other person as a result of the issuance of the rating or the related analytic services provided by Standard & Poor's hereunder or based on anything that appears to be advice or recommendations_ The provisions of this paragraph shall apply regardless of the form of action, damage, claim, liability, cost, expense, or loss, whether in contract, statute, tort (including, without Iimitation, negligence), or otherwise. The issuer/obligor acknowledges and agrees that Standard & Poor's does not waive any protections, privileges, or defenses it inay have under law, including but not limited to, the First Amendment of the Constitution of the United States of America. Term, This Agreement shall terminate when the ratings are withdrawn. Notwithstanding the foregoing, the paragraphs above, "Standard & Poor's Not an Advisor, Fiduciary; or Expert" and "Limitation on Damages", shall survive the termination of this Agreement or any withdrawal of a rating_ Third Parties. Nothing in this Agreement, or the rating when issued, is intended or should be construed as creating any rights on behalf of any third parties, including, without limitation, any recipient of the rating. No person is intended as a third party beneficiary to this Agreement or to the rating when issued_ Rindin Effect. This Agrcernent shall be binding on, and inure to the benefit of, the parries hereto and their successors and assigns. everabili , In the event that any term or provision of this Agreement shall be held to be invalid, void, or unenforceable, then the remainder of this Agreement shall not be affected, impaired, or invalidated, and each such term and provision shall be valid and enforceable to the fullest extent permitted by law, Conlnlete Agreement. This Agreement constitutes the complete agreement between the parties with respect to its subject matter. This Agreement may not be modif cd except in a writing signed by authorized representatives of both parties. Governing Law_ This Agreement and the rating letter shall be governed by the internal laws of the State of New York. The parties agree that the state and federal courts of New York shall be the exclusive forums for any dispute arising out of this Agreement and the parties hereby consent to the personal jurisdiction of such courts, TOTAL P.06 STANDARD March 20, 2008 City of Vernon 4305 S Santa Fe Ave Los Angeles; CA 90058 Attn: Mr, Eric Fresch, Acting City Administrator Pameia Berkowitz Director Client Business Management Ratings Services One Market Steuart Tower, i5th Floor San Francisco, CA 94105 415 RI 5012 Tel 415 3715062 Fax oAfii6l5..birk6witz@sandp.com Re: $430 Million Gas Prepay Transaction for the Vernon Natural Gas Financing Authority Dear Mr. Fresch: Thank you for your recent request for a rating.from Standard & Poor's Ratings Services ("Standard & Poor's"), This agreement ("Agreement"), including the attached Terms and Conditions and Utility and Energy Group Ratings Services and Fees which are expressly incorporated herein and made a part of this Agreement, sets forth the terms and conditions under which Standard & Poor's will assign ratings to the City of Vernon. (referred to herein as "you" or the "Company") and the Company's debt obligations. Upon receipt of a Standard & Poor's rating, the Company enters into a long-term relationship with Standard & Poor's whereby Standard & Poor's will maintain a Corporate Credit Rating (issuer rating) on the Company and expects to rate any and all future issues of publicly distributed debt, including but not limited to bond issues, syndicated loans, preferred stock, and hybrid/debt equity securities. The Company will pay Standard & Poor's ratings fees in accordance with the attached Utility and Energy Group Ratings Fees ("Fee Schedule"). Payment of the fees is not conditioned on issuance of any particular rating, and Standard & Poor's reserves the right to withdraw the ratings if fees are not paid. The Company will reimburse Standard & Poor's for its reasonable travel and related expenses if Standard & Poor's analysts are required to travel in connection with the mating and/or surveillance process. Should the rating not be assigned for any reason whatsoever, the Cotr►pany agrees to compensate Standard & Poor's based on our time, effort, and charges incurred through the date upon which it is determined that the rating will not be assigned. The amount due is up to the full rating fee amount; but is usually 60%=80% of the rating fee, plus any applicable travel and/or legal expenses. www:standardandnoom-r.om The fees to be paid by the Company for its rating apply only to the Company's ratings; this Agreement and the fees paid by the Company pursuant to this Agreement will not be applied to Standard & Poor's analytic services and ratings for any affiliates or subsidiaries of the Company. Please sign below to indicate that the Company accepts the statements contained in this Agreement, agrees to comply in all respects with the terms and conditions in this Agreement, and acknowledge your full understanding of the scope and limitations of the rating. Please return your signed original of this letter to Ms. Shelby McGill, 500 North Akard, Suite 3200, Dallas, TX 15201. Standard & Poor's is pleased to have the opportunity to be of service to you. For more information please visit our website at www.standardandpoors.coin_ if we can be of help in any other way, please contact us. Thank you for choosing Standard & Poor's, and we look forward to working with you. STANDARD & POOR'S RATINGS SERVICES, A division of The McGraw-Hill Comnanies_ Tnc. CONFI MIv D, AGREED AND ACCEPTED AS OF THE DATE FIRST ABOVE WRITTEN: City of Vernon By: - Name Eric Fresch Title: jQyAdministratpr Enclosures. Utility And Energy Group Ratings Fees Term and Condition Applicable to U.S. Corporate Ratings cc. Steve Dreyer, Managing Director, Standard & Poor's Craig Underwood, Bond Logistix Exhibit A Utility and Energy Group Ratings Fees Fees for Issue Ratings: The rating fee for the $430 million Gas Prepay Transaction is $135,000, Standard & Poor's reserves the right to adjust the rating fee if the proposed par amount changes. As described above, Standard & Poor's expects to rate any and all of the Company's future public debt obligations. The fees for such issue ratings will be based upon Standard & Poor's then current Fee Schedule. Annual Surveillance Fees: Commencing on the first anniversary of the date of this agreement, the Company shall pay an annual surveillance fee of $15,000 per year to Standard & Poor's. The annual surveillance fee is subject to change, but Standard & Poor's will provide advance notice to the Company of any change. STANDARD &POOXS Standard & Poor's Ratings Services Terms and Conditions Applicable To U.S. Corporate Ratings Scope of Rating. The Company understands and agrees that (i) an issuer rating reflects Standard & Poor's current opinion of the Company's overall financial capacity to pay its financial obligations as they come due, (ii) an issue rating reflects Standard & Poor's current opinion of the likelihood that the Company will make payments of principal and interest on a timely basis in accordance with the terms of the obligation, (iii) a rating is an opinion and is not a verifiable statement of fact, (iv) ratings are based on information supplied to Standard & Poor's by the Company or by its agents and upon other information obtained by Standard & Poor's from other sources it considers reliable, (v) Standard & Poor's does not perform an audit in connection with any rating and a rating does not represent an audit by Standard & Poor's, (vi) Standard & Poor's relies on the Company, its accountants, counsel, and other experts for the accuracy and completeness of the information submitted in connection with the rating and surveillance process, (vii) Standard & Poor's undertakes no duty of due diligence or independent verification of any information, (viii) Standard & Poor's does not and cannot guarantee the accuracy, completeness, or timeliness of the information relied on in connection with a rating or the results obtained from the use of such information, (ix) Standard & Poor's may raise, lower, suspend, place on CreditWatch, or withdraw a rating at any time, in Standard & Poor's sole discretion, and (x) a rating is not a "market" rating nor a recommendation to buy, hold, or sell any financial obligation. Publication. Standard & Poor's reserves the right to publish, disseminate, or license others to publish or disseminate the rating and the rationale for the rating unless the Company specifically requests that the rating be assigned and maintained on a confidential basis. If a confidential rating subsequently becomes public through disclosure by the Company or a third party other than Standard & Poor's, Standard & Poor's reserves the right to publish it. As a matter of policy, Standard & Poor's publishes ratings for all public issues in the U.S. market and 144A issues with registration rights. Standard & Poor's may publish explanations of Standard & Poor's ratings criteria from time to time and nothing in this Agreement shall be construed as limiting Standard & Poor's ability to modify or refine Standard & Poor's criteria at any time as Standard & Poor's deems appropriate. Information to be Provided by the Company. The Company shall meet with Standard & Poor's for an analytic review at any reasonable time Standard & Poor's requests. The Company also agrees to provide Standard & Poor's promptly with all information relevant to the rating and surveillance of the rating including information on material changes to information previously supplied to Standard & Poor's. The rating may be affected by Standard & Poor's opinion of the accuracy, completeness, timeliness, and reliability of information received from the Company or its agents. Standard & Poor's undertakes no duty of due diligence or independent verification of information provided by the Company or its agents. Standard & Poor's reserves the right to withdraw the rating if the Company or its agents fails to provide Standard & Poor's with accurate, complete, timely, or reliable information. Confidential Information. For purposes of this Agreement, "Confidential Information" shall mean information received by Standard & Poor's from the Company which has been marked "Proprietary and Confidential" or in respect of which Standard & Poor's has received from the Company specific written notice of its proprietary and confidential nature. Notwithstanding the foregoing, information disclosed by the Company shall not be deemed to be Confidential Information, and Standard & Poor's shall have no obligation to treat such information as Confidential information, if such information (i) was substantially known by Standard & Poor's at the time of such disclosure, (ii) was known to the public at the time of such disclosure, (iii) becomes known to the public (other than by Standard & Poor's act) subsequent to such disclosure, (iv) is disclosed lawfully to Standard & Poor's by a third party subsequent to such disclosure, (v) is developed independently by Standard & Poor's without reference to the Confidential Information, (vi) is approved in writing by the Company for public disclosure, or (vii) is required by law to be disclosed by the Company or Standard & Poor's provided that notice of such required disclosure is given to the Company. Commencing on the date hereof, Standard & Poor's will use Confidential Information only in connection with the assignment and monitoring of ratings and will not directly disclose any Confidential Information to any third party. Standard & Poor's may also use Confidential Information for research and modeling Purposes provided that the Confidential Information is not presented in a way that can be directly tied to the Company. The Company agrees that the Confidential Information may be used to raise, lower, suspend, withdraw, place on CreditWatch, and change the Outlook assigned to any rating if the Confidential Information is not directly disclosed. Standard & Poor's Not an Advisor Fiduciary, or Expert. The Company understands and agrees that Standard & Poor's is not acting as an investment, financial, or other advisor to the Company and that the Company should not and cannot rely upon the rating or any other information provided by Standard & Poor's as investment or financial advice. Nothing in this Agreement is intended to or should be construed as creating a fiduciary relationship between Standard & Poor's and the Company or between Standard & Poor's and recipients of the rating. The Company understands and agrees that Standard & Poor's has not consented to and will not consent to being named an "expert" under the applicable securities laws, including without limitation, Section 7 of the U.S. Securities Act of 1933. Limitation on Damages. The Company agrees that Standard & Poor's, its officers, directors, shareholders, and employees shall not be liable to the Company or any other person for any actions, darnages, claims, liabilities, costs, expenses, or losses in any way arising out of or relating to the rating or the related analytic services provided for in an aggregate amount in excess of the aggregate fees paid to Standard & Poor's for the rating, except for Standard & Poor's gross negligence or willful misconduct. In no event shall Standard & Poor's, its officers, directors, shareholders, or employees be liable for consequential, special, indirect, incidental, punitive or exemplary damages, costs, expenses, legal fees, or losses (including, without limitation, lost profits and opportunity costs). in furtherance and not in limitation of the foregoing, Standard & Poor's will not be liable in respect of any decisions made by the Company or any other person as a result of the issuance of the rating or the related analytic services provided by Standard & Poor's hereunder or based on anything that appears to be advice or recommendations. The provisions of this paragraph shall apply regardless of the form of action, damage, claim, liability, cost, expense, or loss, whether in contract, statute, tort (including, without limitation, negligence), or otherwise. The Company acknowledges and agrees that Standard & Poor's does not waive any protections, privileges, or defenses it may have under law, including but not limited to, the First Amendment of the Constitution of the United States of America. Long-term Relationship. Once the Company accepts a Standard & Poor's rating, it enters into a long-term relationship with Standard & Poor's. As part of this, Standard & Poor's will assign and maintain a Long -Term Corporate Credit Rating (issuer rating) on the Company and expects to rate syndicated bank loans and any and all public debt that is issued by, guaranteed by, and/or is in any other manner an obligation of the Company. Term. This Agreement shall terminate when the ratings are withdrawn. Notwithstanding the foregoing, the paragraphs above, "Confidential Information", "Standard & Poor's Not an Advisor, Fiduciary, or Expert", and "Limitation on Damages", shall survive the termination of this Agreement or any withdrawal of a rating. Third Parties. Nothing in this Agreement, or the rating when issued, is intended or should be construed as creating any rights on behalf of any third parties, including, without limitation, any recipient of the rating. No person is intended as a third party beneficiary to this Agreement or to the rating when issued. Bindin Eg #feet. This Agreement shall be binding on, and inure to the benefit of, the parties hereto and their successors and assigns. Severability. In the event that any term or provision of this Agreement shall be held to be invalid, void, or unenforceable, then the remainder of this Agreement shall not be affected, impaired, or invalidated, and each such term and provision shall be valid and enforceable to the fullest extent permitted by Iaw. Complete A reernent. This Agreement constitutes the complete agreement between the parties with respect to its subject matter. This Agreement may not be modified except in a writing signed by authorized representatives of both parties. Governing Law. This Agreement and the rating letter shall be governed by the internal laws of the State of New York. The parties agree that the state and federal courts of New York shall be the exclusive forums for any dispute arising out of this Agreement and the parties hereby consent to the personal jurisdiction of such courts. 2b2 USAirbill Tr�lug 8638 7761 0007 Express Numher 1 From pieesapdntandpmsshard n 1 a' /_-n ,Senders FedEx r r Sender's Name K(z)S` 5hr{ CWoMoTo Phone( 32.3) 5Aq---RR9 '1 Company C I i Y 'CIF ' VER h+l0N Address 4305 S SANTA FE -AVE eeplfadefrsaltemeem City VR1's ON State CA ZIP 900513-17 14' 2 Your Internal Billing Reference o i ` _ 1 O 14 _'V'816c) PoourInterealaBillingv e. 3 To Recipients `t Name LQy M �) �. j. r1 Cj� Phone ( ) Company ST A N b AR D_ '1 ?'O 0 R t S Recipients 7 ®R hKA,1` ®E Address O N f V ) jC ��0 We cannot deliver to P.O. boxes or P.O. ZIP codes.- - - - DaplJn.dSuitayltoom Address To request a package be held at a specific FedEx location, print FedEx-address here. - city D,ALUZ State- TX ZIP `I192.o.1 0374950980 4a Express Package Service Packages up to 159tbs. ❑ Fed6'Prionty 01vemight Nextbasin [/FedEx Standard Overnight Nextbusiness - FedEx FirsE'Overnight Eadiastnoxtbusinessmom'og ssmo 8'Fdday shipmelilsvnll bedeliveradun Mondepp aftemoan• Saturday OelivaiyNOTaveileble. delrverymeelectlocabons• unless SATURDAYOeINeryisselected. - - Satuday OolivaryNOTavailabla. FedV2Day ❑ Second businessdoy.•ThumdeV FedEx,Express Sever Thrtd business day' 11 shipmems.1--Iha delivoreden Mond SATURDAY Delivery Is Saturday Delivery NOTevelable. - unless selacmd I .,:.FedEx€nvelope rate noteveil.blc. Minimum chergerOne-pound rate. __. :I •Tormsilxedorks: 4b Express Freight Service" Packages over 150lb& ❑ FedExIPayFreight* Niudbusineee aV'• day ❑ FedEx MayFre�ht Second hrlsiness day. Thursday ❑ FedEx 3DayFreight Thirdbusiness ay" ship memswrllbedelNeredon Mandl shlpmmd 1bedelNemdon Mondayy SstuNeyDerrveryNGTaveleble.- unlessSATDP,DAYDaliveryisselectsd.. unless SATURDAYOeliveryisselecmd. -- •CellforConfilmuuon: - --Tornmllocations eA J ....U...V � FedEx ❑ FedEx Pak* ❑ FedEx ❑ FedEx ❑ Other I Envelope* Includes Fed Ex Small Pak, Box Tube Fed& large Pak and FedEx St dy Pek • Declared value [IMMOD. 8 Special Handling r Include FedEx address in Section 3. ❑SATURDAY Delivery HOLD Weekday HOLD Saturday NOTAvailablefor ❑ atFedExLocation ❑ at FedExLo'ceti Fed&Standad Overnight NOTAvailablefor Available ONLY for. - FedExFpstOvemightFed&Express Fed&nrs�t Overnight FedEx PrioriytyevemiggMand Sever,orFed&30ay Freight Fed&2Defnselectlocedons. Dpessthisshipmemcordaindangetousgoods7 - - pneboxmustbecheck... ---, Yes D Ice NO ❑ Yes attached ❑. SNppels 0eclereh0n ❑ Dryyal a,9,UN 1845 x kg r shipperaD lama.. notmgmted. . Cargo Aircraft Only Dengemusgeodstmcludingdryicelcannotbeshippedin FedFxpeckeginA T)Payrnetit BII% EnterFadExAcct No: or Credit Card No. below. I ` ender, ❑ Recipient :' ❑ Third Party ❑ Credit Card Cash/Check Acct No. ill Section 1w01 be billed. ,. CCred&eCCard No Total Packages Total Weigh Total DeclaredValuet $ - tourlisbill'is lirndadto $100 unlessyDudeclare a highervelue. See backfarderails.6yusingahisAiidllyou eggmetothe serviedoondiddha on the back ofthisAirbillandlntliecuriemFAE Service GtIda;includidg temis lhat gmaourliebiray. - 8 Residential Delivery Signature 0ptitins Ir aragahaesAaamra,ehaakDi� orindim ' No Signature Direct Signature " IndirectSi�aature ❑Required ❑ S meonaetmcipiems ❑ Irnocoeis ddrabl. 519 Peckoage maybe left addressmeys Anlar mcipieril's address, somaape J wahoutobterninge deliveryfeaepplres eta neighboringeddra may eignetumfordeWery. signfordel"sreryfeeeppli. Rev. Date IWOO-Pan T159279KD19W20d5 Fad&•PRINTED IN U.S.A•SRS �A/Lc � z3t Zud 21 �C) c���� � 0A�i s--�- P c o j4- t�,Jo KI V\j s� x Anr -- -----VERNONNATIU GAS —FINANCING -AUTHORITY - VARIABLE RATE REVENUE BONDS (VERNON GAS PROJECT), 2006 SERIES B CUSIP NUMBER 924401AAO NOTICE OF ELECTION TO RESCIND CONVERSION TO LONG-TERM INTEREST RATE PERIOD Notice is hereby given to The Bank of New York Trust Company, N.A., as trustee (the "Trustee") under that certain Indenture of Trust, dated as of June 1, 2006 (the "Master Indenture"), between the Vernon Natural Gas Financing Authority (the "Authority") and the Trustee, as supplemented by that certain First Supplemental Indenture of Trust, dated as of June 1, 2006 (the "First Supplemental Indenture" and, together with the Master Indenture, the "Indenture"), by and between the Authority and the Trustee, pursuant to Section 10 of Exhibit B to the First Supplemental Indenture, that the Authority has elected to rescind its election to Convert the Interest Rate Period for the above -described bonds ("the Series B Bonds") from a Weekly Interest Rate Period to a Long -Term Interest Rate Period. Such Long -Term Interest Rate Period was to have a proposed effective date of April 2, 2008 (the "Effective Date") and an ending date of February 1, 2009. The Series B Bonds shall remain in a Weekly Interest Rate Period, but are still subject to mandatory tender for purchase on the Effective Date. Capitalized terms used but undefined herein shall have the meaning ascribed thereto in the Indenture. Date: March 26, 2008 VERNON NATURAL GAS FINANCING AUTHORITY By: Authorized Authority kepresentative OHS West:260408820.1 - -- - -_ - VERNON NATURAL-GAS FINANCING AUTHORITY VARIABLE RATE REVENUE BONDS (VERNON GAS PROJECT), 2006 SERIES C CUSIP NUMBER 924401AB8 NOTICE OF ELECTION TO RESCIND CONVERSION TO LONG-TERM INTEREST RATE PERIOD Notice is hereby given to The Bank of New York Trust Company, N.A., as trustee (the "Trustee") under that certain Indenture of Trust, dated as of June 1, 2006 (the "Master Indenture"), between the Vernon Natural Gas Financing Authority (the "Authority") and the Trustee, as supplemented by that certain First Supplemental Indenture of Trust, dated as of June 1, 2006 (the "First Supplemental Indenture" and, together with the Master Indenture, the "Indenture"), by and between the Authority and the Trustee, pursuant to Section 10 of Exhibit B to the First Supplemental Indenture, that the Authority has elected to rescind its election to Convert the Interest Rate Period for the above -described bonds ("the Series C Bonds") from a Weekly Interest Rate Period to a Long -Term Interest Rate Period. Such Long -Term Interest Rate Period was to have a proposed effective date of April 2, 2008 (the "Effective Date") and an ending date of February 1, 2009. The Series C Bonds shall remain in a Weekly Interest Rate Period, but are still subject to mandatory tender for purchase on the Effective Date. Capitalized terms used but undefined herein shall have the meaning ascribed thereto in the Indenture. Date: March 26, 2008 VERNON NATURAL GAS FINANCING AUTHORITY By: �� &�L - Authorized Authority 4epresentative OHS West:260408820.1 S`IANDARD &POOWS March 20, 2008 City of Vernon 4305 S Santa Fe Ave Los Angeles, CA 90058 Attn : Mr. Eric Fresch, Acting City Administrator Pamela Berkowitz Director Client Business Manj&njent Ratings Services Fi Le . One Market Steuart Tower, i5th Floor San Francisco, CA 94105 415 3715012 Tel 415 3715o62 Fax pane la.lierkowi tz@sandp.com Re: $430 Million Gas Prepay Transaction for the Vernon Natural Gas Financing Authority Dear Mr. Fresch: Thank you for your recent request fora rating from Standard & Poor's Ratings Services C'Standard & Poor's" ). This agreement ("Agreement"), including the attached Terms and `Conditions and Utility and Energy Group Ratings Services and Fees which are expressly incorporated herein and made a part of this Agreement, sets forth the terms and conditions under which Standard & Poor's will assign ratings to the City of Vernon (referred to herein as "you" or the "Company") and the Company's debt obligations: Upon receipt of a Standard Vie. Poor's rating, the Company enters into a long-term relationship with Standard & Poor's whereby Standard & Poor's will maintain a Corporate Credit Rating (issuer rating) on the Company and expects to rate any and all future issues of publicly distributed debt, including but not limited to bond issues, syndicated loans, preferred stock, and hybrid/debt equity securities. The Company will pay Standard & Poor's ratings fees in accordance with the attached Utility and Energy Group Ratings Fees ("Fee Schedule"). Payment of the fees is not conditioned on issuance of any particular rating, and Standard & Poor's reserves the right to withdraw the ratings if fees are not paid. The Compariy will reimburse Standard & Poor's for its reasonable travel and related expenses if Standard & Poor's analysts are required to travel in connection with the mating and/or surveillance process. Should the rating not be assigned for any reason whatsoever, the Company agrees to compensate Standard & Poor's based on our time, effort, and charges incurred through the date upon which it is determined that the rating will not be assigned. The amount due is up io the full rating fee amount; but is usually 60%.;-90% of the rating fee, plus aiiy applicable travel and/or legal expenses. www:standardandnnors_r-nm The fees to be paid by the Company for its rating apply only to the Company's ratings; this Agreement and the fees paid by the Company pursuant to this Agreement will not be applied to Standard & Poor's analytic services and ratings for any affiliates or subsidiaries of the Company. Please sign below to indicate that the Company accepts the statements contained in this Agreement, agrees to comply in all respects with the terms and conditions in this Agreement, and acknowledge your full understanding of the scope and limitations of the rating. Please return your signed original of this letter to Ms. Shelby McGill, 500 North Akard, Suite 3200, Dallas, TX 75201. Standard & Poor's is pleased to have the opportunity to be of service to you. For more information please visit our website at www.standardandp6ors.c6in. If we can be of help in any other Way, please contact us- Thank you for choosing Standard & Poor's, and we look forward to working with you. STANDARD & POOR'S RATINGS SERVICES, a division of The McGraw-Hill Companies: Inc. By: !2- P _."ela Beri CONFIkMED, AGREED AND ACCEPTED AS OF THE DATE FIRST ABOVE WRITTEN. City of Vernon By: `ra Name: Eric Fresch Title City Administrator Enclosures: Utility and Energy Group Ratings Fees Term and Condition Applicable to U.S. Corporate Ratings ce Steve Dreyer, Managing Director, Standard & Poor's Craig Underwood, Bond Logistix Exhibit A Utility and Energy Group Ratings Fees Fees for Issue Ratings: The rating fee for the $430 million Gas Prepay Transaction is $135,000. Standard & Poor's reserves the right to adjust the rating fee if the proposed par amount changes. As described above, Standard & Poor's expects to rate any and all of the Company's future public debt obligations. The fees for such issue ratings will be based upon Standard & Poor's then current Fee Schedule. Annual Surveillance Fees: Commencing on the first anniversary of the date of this agreement, the Company shall pay an annual surveillance fee of $15,000 per year to Standard & Poor's. The annual surveillance fee is subject to change, but Standard & Poor's will provide advance notice to the Company of any change, STANDARD &POOKS Standard & Poor's Ratings Services Terms and Conditions Applicable To U.S. Corporate Ratings Scope of Rating. The Company understands and agrees that (i) an issuer rating reflects Standard & Poor's current opinion of the Company's overall financial capacity to pay its financial obligations as they come due, (ii) an issue rating reflects Standard & Poor's current opinion of the likelihood that the Company will make payments of principal and interest on a timely basis in accordance with the terms of the obligation, (iii) a rating is an opinion and is not a verifiable statement of fact, (iv) ratings are based on information supplied to Standard & Poor's by the Company or by its agents and upon other information obtained by Standard & Poor's from other sources it considers reliable, (v) Standard & Poor's does not perform an audit in connection with any rating and a rating does not represent an audit by Standard & Poor's, (vi) Standard & Poor's relies on the Company, its accountants, counsel, and other experts for the accuracy and completeness of the information submitted in connection with the rating and surveillance process, (vii) Standard & Poor's undertakes no duty of due diligence or independent verification of any information, (viii) Standard & Poor's does not and cannot guarantee the accuracy, completeness, or timeliness of the information relied on in connection with a rating or the results obtained from the use of such information, (ix) Standard & Poor's may raise, lower, suspend, place on CreditWatch, or withdraw a rating at any time, in Standard & Poor's sole discretion, and (x) a rating is not a "market" rating nor a recommendation to buy, hold, or sell any financial obligation. Publication. Standard & Poor's reserves the right to publish, disseminate, or license others to publish or disseminate the rating and the rationale for the rating unless the Company specifically requests that the rating be assigned and maintained on a confidential basis. If a confidential rating subsequently becomes public through disclosure by the Company or a third party other than Standard & Poor's, Standard & Poor's reserves the right to publish it. As a matter of policy, Standard & Poor's publishes ratings for all public issues in the U.S. market and 144A issues with registration rights. Standard & Poor's may publish explanations of Standard & Poor's ratings criteria from time to time and nothing in this Agreement shall be construed as limiting Standard & Poor's ability to modify or refine Standard & Poor's criteria at any time as Standard & Poor's deems appropriate. Information to be Provided by the Company. The Company shall meet with Standard & Poor's for an analytic review at any reasonable time Standard & Poor's requests. The Company also agrees to provide Standard & Poor's promptly with all information relevant to the rating and surveillance of the rating including information on material changes to information previously supplied to Standard & Poor's. The rating may be affected by Standard & Poor's opinion of.the accuracy, completeness, timeliness, and reliability of information received from the Company or its agents. Standard & Poor's undertakes no duty of due diligence or independent verification of information provided by the Company or its agents. Standard & Poor's reserves the right to withdraw the rating if the Company or its agents fails to provide Standard & Poor's with accurate, complete, timely, or reliable information. Confidential information. For purposes of this Agreement, "Confidential Information" shall mean information received by Standard & Poor's from the Company which has been marked "Proprietary and Confidential" or in respect of which Standard & Poor's has received from the Company specific written notice of its proprietary and confidential nature. Notwithstanding the foregoing, information disclosed by the Company shall not be deemed to be Confidential Information, and Standard & Poor's shall have no obligation to treat such information as Confidential Information, if such information (i) was substantially known by Standard & Poor's at the time of such disclosure, (ii) was known to the public at the time of such disclosure, (iii) becomes known to the public (other than by Standard & Poor's act) subsequent to such disclosure, (iv) is disclosed lawfully to Standard & Poor's by a third party subsequent to such disclosure, (v) is developed independently by Standard & Poor's without reference to the Confidential Information, (vi) is approved in writing by the Company for public disclosure, or (vii) is required by law to be disclosed by the Company or Standard & Poor's provided that notice of such required disclosure is given to the Company. Commencing on the date hereof, Standard & Poor's will use Confidential Information only in connection with the assignment and monitoring of ratings and will not directly disclose any Confidential Information to any third party. Standard & Poor's may also use Confidential Information for,research and modeling purposes provided that the Confidential Information is not presented in a way that can be directly tied to the Company. The Company agrees that the Confidential Information may be used to raise, lower, suspend, withdraw, place on CreditWatch, and change the Outlook assigned to any rating if the Confidential Information is not directly disclosed. Standard & Poor's Not an Advisor Fiduciary, or Expert. The Company understands and agrees that Standard & Poor's is not acting as an investment, financial, or other advisor to the Company and that the Company should not and cannot rely upon the rating or any other information provided by Standard & Poor's as investment or financial advice. Nothing in this Agreement is intended to or should be construed as creating a fiduciary relationship between Standard & Poor's and the Company or between Standard & Poor's and recipients of the rating. The Company understands and agrees that Standard & Poor's has not consented to and will not consent to'being named an "expert" under the applicable securities laws, including without limitation, Section 7 of the U.S. Securities Act of 1933. Limitation on Damages. The Company agrees that Standard & Poor's, its officers, directors, shareholders, and employees shall not be liable to the Company or any other person for any actions, dannages, claims, liabilities, costs, expenses, or losses in any way arising out of or relating to the rating or the related analytic services provided for in an aggregate amount in excess of the aggregate fees paid to Standard & Poor's for the rating, except for Standard & Poor's gross negligence or willful misconduct. In no event shall Standard & Poor's, its officers, directors, shareholders, or employees be liable for consequential, special, indirect, incidental, punitive or exemplary damages, costs, expenses, legal fees, or losses (including, without limitation, lost profits and opportunity costs). In furtherance and not in limitation of the foregoing, Standard & Poor's will not be liable in respect of any decisions made by the Company or any other person as a result of the issuance of the rating or the related analytic services provided by Standard & Poor's hereunder or based on anything that appears to be advice or recommendations. The provisions of this paragraph shall apply regardless of the form of action, damage, claim, liability, cost, expense, or loss, whether in contract, statute, tort (including, without limitation, negligence), or otherwise. The Company acknowledges and agrees that Standard & Poor's does not waive any protections, privileges, or defenses it may have under law, including but not limited to, the First Amendment of the {Constitution of the United States of America. Long-term Relationship Once the Company accepts a Standard & Poor's rating, it enters into a long-term relationship with Standard & Poor's. As part of this, Standard & Poor's will assign and maintain a Long -Term Corporate Credit Rating (issuer rating) on the Company and expects to rate syndicated bank loans and any and all public debt that is issued by, guaranteed by, and/or is in any other manner an obligation of the Company. Term. This Agreement shall terminate when the ratings are withdrawn. Notwithstanding the foregoing, the paragraphs above, "Confidential Information", "Standard & Poor's Not an Advisor, Fiduciary, or Expert", and "Limitation on Damages", shall survive the termination of this Agreement or any withdrawal of a rating. Third Parties. Nothing in this Agreement, or the rating when issued, is intended or should be construed as creating any rights on behalf of any third parties, including, without limitation, any recipient of the rating. No person is intended as a third party beneficiary to this Agreement or to the rating when issued. Binding Effect. This Agreement shall be binding on, and inure to the benefit of, the parties hereto and their successors and assigns. Severability. In the event that any term or provision of this Agreement shall be held to be invalid, void, or unenforceable, then the remainder of this Agreement shall not be affected, impaired, or invalidated, and each such term and provision shall be valid and enforceable to tine fullest extent permitted by law. Complete A reement. This Agreement constitutes the complete agreement between the parties with respect to its subject matter. This Agreement may not be modified except in a writing signed by authorized representatives of both parties. Governing Law. This Agreement and the rating letter shall be governed by the internal laws of the State of New York. The parties agree that the state and federal courts of New York shall be the exclusive forums for any dispute arising out of this Agreement and the parties hereby consent to the personal jurisdiction of such courts. Lb L USAirbill Trcug 8638 7761 0007 Express Number 1 From YleesepdM ndpressheld. Sandal's a IGR Name )srEIJ EnIDMOTo Phone( 3'A) f3 "q.=gg9 9 Company CITY O 'VERNON Address 4305 _S SANTA FE AV Dewllwofsuiea Room City VERNON State CA ZIP 90058=17 4 2 Your ifrtemal Billing Reference oil _ 1014 _ 51P716160 3 To Na eierrls LQy M-q G ) L L Phone ( ) Company &1An1DARD A POOR'& =.enfs 50o N®RTId AKARD t �U )'I C 32� p We cannot deliverto P.O. bogies or P.O. ZIP codes. DePUnoo/soite/Room Address To requests package be held at a specific FadEx location, print FedExaddress here. - City D A LL AS state TX zip -1 S LL o 0374250980 0 4a Express Package Service Packages up to 150lbs, ❑ FedPx'Priomydvemight Nexr6usmesg..ty O`Fidey [ fI.d.xStandardOvernigh ILLJII N.K<busiran bmoon! -: - FedExFrsfOvernight EerLestnaxtbuaineasmomurg shlIpomeree:I: delivered on Monday SaWrdey DelivaryNOTevelable. derrveryec ealactiocatiam.• pnfigs SAIURDAY OeINeryis selected. -.. - SeWrdayOaliveryNOTeveletile. RFpdEx2Day . Second budlness dey!Thuradey FedEx.Express Saver Third buens. day' � shipmemsvx7l be delivered on Monday - unless SATURDAY Oolivery u sale clod SaWrdayOerrvaryNOrevaleble. - —,.redFxEnnalopereb noteveile6leMmimem chergkOne•pound rate.- _. _�I •Tommtlxe6em 4b Ex Packages Packegesever f5g►bs ❑FedFxlDayYFHei ht* Ne#easineeeaBY• rm"gday FedFx2DayFreippht ❑ Succilt islneadeyy. ..day. FedFx3DayyFreight ❑ Third buanessdey.•• - shlpmems.6%hedelNeredonMonday plon"R,DAYDeIaery Is selected. shipmeMw9lbedel'rveredan Monteyy unless SATUaDAYDeliverylsselacled.- Saturday DeMoryNOTavalable. -- ._ 5 ackaging Llf FedEx ❑ 6e Pak* ❑ fedEx ❑ FedEx ❑.Other Envelope* Includes Fed&SmallPsk, Tube Box FadExlarge PakandRdExShrrdy Ppk - •Declaredvslue51'rhS5gD. 6 Special Handling F Include FedEx address in Section 3. ElSATURDAY Delivery HOLD Weekday HOLD Sshudey NOTAtrailablefor ❑ at Fault cation ElatFedEXlocabon FedExStandard Ovamight NOTAvoilablefor Available ONLYfor Fed&FirstOvemigghyFetlFx Express Fed&nrstovemight kd&Pdorhy0vemiggMend SavererF.d&SUay Freight Fed .2Dsytosalactbcations. Does ihis itdpmerd cordein danperous goods? gneboxmustbechacked --- ❑ ❑ ❑ D Ice NO AAsepereaeched SN pefs,Decleretion Dry ai UN 1945 x kg snippet's 0ecmretian. notregalred.Cargo Aircraft OnlyDenAerous goods (including dry ice) cennm beshipped in Fed& pcka9ing.. Ve ant Bi►►to: .� Enter FedExAca No. orCri Card No. below. —� Sender ❑ Recipiem ❑ Third Parry ❑ Credit Card ❑ Cash/Check Acct No' in Section I walbe blled. - Fed&kcLNa.. GedrtlsrdNo. - 0 Tatel,Packages Total Weigh Trial Declaredvaluet $ .00 r0urriedldyislimi�dto$100 unlessyoudeclareahigher value. See beckfordemis. Byurinethisat IYou agreeWMe senncecdndNansohthebeck olthisAiiM11 and inthacumMFee&Service Guide; inclutlmAlBrrmthatgnmourfebPdy. 8 Residential DeliderySignature Options Hyourequireesignature,checkD!mctormdimbL No Signature Dire Signature, IFT-mittSi�hature ❑Required ❑ Sdd_ oyecipiems ❑ finoone save able at � 179 Peckkaoemeybelalt address m�y pgnlm rec(plem's aric, ,someone whout obtemingga daliveryfeeepplles, a tenelghboringeddress may siguturefordorrvery. sign tordeliveryfeearpli... Rev. Date 1g/e6-PaA#l59279-&I999-2gg6 FedEmPRINTED IN U.S.A•SRS �1A/Lc � 23, 20() 21 H CaANQ c� OAN, -�Ax; Lt(-c,r3"1�—S()H r. ow -VERNON-NATURAL GAS --FINANCING AUTHORITY- _.___ - _- -- -- VARIABLE RATE REVENUE BONDS (VERNON GAS PROJECT), 2006 SERIES B CUSIP NUMBER 924401AAO NOTICE OF ELECTION TO RESCIND CONVERSION TO LONG-TERM INTEREST RATE PERIOD Notice is hereby given to The Bank of New York Trust Company, N.A., as trustee (the "Trustee") under that certain Indenture of Trust, dated as of June 1, 2006 (the "Master Indenture"), between the Vernon Natural Gas Financing Authority (the "Authority") and the Trustee, as supplemented by that certain First Supplemental Indenture of Trust, dated as of June 1, 2006 (the "First Supplemental Indenture" and, together with the Master Indenture, the "Indenture"), by and between the Authority and the Trustee, pursuant to Section 10 of Exhibit B to the First Supplemental Indenture, that the Authority has elected to rescind its election to Convert the Interest Rate Period for the above -described bonds ("the Series B Bonds") from a Weekly Interest Rate Period to a Long -Term Interest Rate Period. Such Long -Term Interest Rate Period was to have a proposed effective date of April 2, 2008 (the "Effective Date") and an ending date of February 1, 2009. The Series B Bonds shall remain in a Weekly Interest Rate Period, but are still subject to mandatory tender for purchase on the Effective Date. Capitalized terms used but undefined herein shall have the meaning ascribed thereto in the Indenture. Date: March 26, 2008 VERNON NATURAL GAS FINANCING AUTHORITY By: KxAtt� /�W� Authorized Authority epresentative OHS West:260408820.1 VERNON NATURAL GAS FINANCING AUTHORITY VARIABLE RATE REVENUE BONDS (VERNON GAS PROJECT), 2006 SERIES C CUSIP NUMBER 924401AB8 NOTICE OF ELECTION TO RESCIND CONVERSION TO LONG-TERM INTEREST RATE PERIOD Notice is hereby given to The Bank of New York Trust Company, N.A., as trustee (the "Trustee") under that certain Indenture of Trust, dated as of June 1, 2006 (the "Master Indenture"), between the Vernon Natural Gas Financing Authority (the "Authority") and the Trustee, as supplemented by that certain First Supplemental Indenture of Trust, dated as of June 1, 2006 (the "First Supplemental Indenture" and, together with the Master Indenture, the "Indenture"), by and between the Authority and the Trustee, pursuant to Section 10 of Exhibit B to the First Supplemental Indenture, that the Authority has elected to rescind its election to Convert the Interest Rate Period for the above -described bonds ("the Series C Bonds") from a Weekly Interest Rate Period to a Long -Term Interest Rate Period. Such Long -Term Interest Rate Period was to have a proposed effective date of April 2, 2008 (the "Effective Date") and an ending date of February 1, 2009. The Series C Bonds shall remain in a Weekly Interest Rate Period, but are still subject to mandatory tender for purchase on the Effective Date. Capitalized terms used but undefined herein shall have the meaning ascribed thereto in the Indenture. Date: March 26, 2008 VERNON NATURAL GAS FINANCING AUTHORITY By: �,a - Authorized Authority Representative OHS West:260408820.1