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Resolution No. 098791 2 3 4 5 6 7 8 9 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 28 27 28 RESOLUTION NO. 9879 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON APPROVING AND AUTHORIZING THE EXECUTION OF A LETTER AGREEMENT BY AND BETWEEN THE CITY OF VERNON AND STANDARD & POOR'S RATINGS SERVICES WHEREAS, the City of Vernon needs the rating services of Standard & Poor's Ratings Services ("Standard & Poor's") to provide analytic review and issuance of public finance ratings relating to the City's debt and capital financing plans; and WHEREAS, Standard & Poor's is a division of The McGraw-Hill Companies, Inc. and is known worldwide for its ratings services; and WHEREAS, the rating fee of Standard & Poor's is $63,000.00 plus, if applicable, derivative products analysis fees and reasonable travel and legal expense reimbursement; and WHEREAS, the City Council of the City of Vernon has determined that, pursuant to the provisions of subsection (a) of Section 2.27 of the Vernon City Code, it is in the public interest and necessity to approve an agreement with Standard & Poor's for public finance rating services. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF VERNON AS FOLLOWS: SECTION 1: The City Council of the City of Vernon hereby finds and determines that the recitals contained hereinabove are true and correct. SECTION 2: The City Council of the City of Vernon hereby approves the Letter Agreement with Standard & Poor's, a copy of which is attached hereto as Exhibit A and incorporated by reference. 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 SECTION 3: The City Council of the City of Vernon hereby authorizes the Mayor or Mayor Pro-Tem to execute said Letter Agreement for, and on behalf of, the City of Vernon and the City Clerk or Deputy City Clerk is hereby authorized to attest thereto. SECTION 4: The City Council of the City of Vernon hereby directs the City Clerk, or her designee, to send one fully executed Letter Agreement to: Standard & Poor's Ratings Services Attn.: Morna Lebron, Manager Fee Administration 55 Water Street, 38 th Floor New York, NY 10041-0003 SECTION 5: The City Council of the City of Vernon hereby approves and authorizes the City Administrator, or his designee, to perform such acts and deeds as may be necessary or convenient to effect the purposes of this Resolution and the transactions herein approved or authorized and to execute any and all documents as shall be required consistent with the terms of the Letter Agreement herein. SECTION 6: 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 9th day of March, 2009. ATTEST: �IANUELA GIRON, Cik-y Clerk Name: Leonis C. Malbura Title: Mayor / 24aye-r—P-r-e—T-e-m- - 2 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 STATE OF CALIFORNIA ) ss COUNTY OF LOS ANGELES I, MANUELA GIRON, City Clerk of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. 9879, was duly adopted by the City Council of the City of Vernon at a regular meeting of the City Council duly held on Monday, March 9, 2009, and thereafter was duly signed by the Mayor or Mayor Pro-Tem of the City of lVernon'. I (SEAL) Z��� M NUELA G ON,(City Clerk - 3 - 10,61481 The McGraw-Hill companies Marna Lebron Steven Q. Zimmermann Manager Fee Administration Managing Director STAN D 55 Water Street, 38th Floor One Market New York, NY 10041-W3 Steuart Tower, 1 Sth Floor &POOWS lei 212 438-6808 San Francisco, CA941054000 moma.lebron@)standardandpoors.com lei 415 371-5004 steve—zimniermann@standardaridpoors.com issue no.: 1050733 March 3, 2009 City of Vernon 4305 Santa Fe Avenue Vernon, CA 90058 Attention: Mr. Eric T. Fresch, City Administrator Re: US$421,000,000 City of Vernon, California, Electric System Revenue Bonds, 2009 Series A, dated. Date ofDelivery, due: August 1, 2021 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 free to contact Paul at 415-371-5079 or by email at I aul dyson standarda d oors.co 2 A aN Peter can be reached at 212-43 8-2065 or by email at peter M=hy(ibstandard"d oors.com. If you have not already done so, please fo rward 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 $63,000. 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. De,riva_tives Products Ln_aly§is 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/obligor's revenues. Derivative products include, but are not limited to, interest rate swaps, `�;tANII !?,,,D F"ic Mr. Eric T. Fresch Page 2 March 3, 2009 caps, collars, floors, and swaptions. Derivative products analysis fees will be determined on a case - by -case basis based on the number and complexity of the derivative products. Other fees and expenses. You 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, you agree to compensate us based on our time, 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.standardandpoors.com for our ratings defmitions 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-Hill Companies, Inc. By: Morna Lebron Manager Fee Administration sb cc: Mr. Craig Underwood, President Bond Logistix V SDUNDAIUI Mr. Eric T. Fresch Page 3 March 3, 2009 CONFIRMED, AGREED AND ACCEPTED AS OF THE DATE FIRST ABOVE WRITTEN City of Vemon By: Name: Title: Mayor / Mayor Pro-Tem ATTEST: MANUELA GIRON, City Clerk APPROVED AS TO FORM: JEFF A. HARRISON, City Attorney STANDARD &POOXS Standard & Poor's Ratings Services Terms and Conditions Applicable To U.S. Public Finance Ratings Request for a rating. 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/obligot" in these Terms and Conditions means the issuer and the obligor if the obligor is different from the issuer. Ap-reement to Accei)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 issuer/obligor'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 expenses. hi consideration of our analytic review and issuance of the rating, the issuer/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 issuer/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. Sc9pe of Rating. The issuer/obligor understands and agrees that (i) an issuer rating reflects Standard & Poor's current opinion of the issuer/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, (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 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 & 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 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 or refine Standard & Poor's criteria at any time as Standard & Poor's deems appropriate. Information to be Provided by the Issuer/oblip-or. 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 & 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 issuer/obligor or its agents. Standard & Poor's undertakes no duty of due diligence or independent verification of Nil] ANII I M V L 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, Fiduciary, or ExI2 . 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 Damages. 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 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 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 limitation, negligence), or otherwise. The issuer/obligor 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. 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. Binding Effect. This Agreement shall be binding on, and inure to the henefit 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 law. CoMlete Agreement. 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. 7heMCGrvw-,q111C0mp0"1e$ S TA N -D A--R- D &POORIS March 3, 2009 Morna Lebron Manager Fee Administration 55 Water Street, 38th Floor New York, NY 10041-OW3 lei 212 438-68DB morna—lebronLEDstaridardarWpoors.corn issue no.: 1050733 City of Vernon 4305 Santa Fe Avenue Vernon, CA 90058 Attention: Mr. Eric T. Fresch, City Administrator Steven G. Zimmermann Managing Director One Market Steuart Tower, 15th Floor San Francisco, CA 94105-1000 lei 415 371-5004 steve�_zimmermanngstaridardaridpoors.com Re: US$421,000,000 City qf Vernon, California, Electric System Revenue Bonds, 2009 Series A, dated. Date ofDelivery, due: August 1, 2021 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 free to contact Paul at 415-371-5079 or by email at paul dyson (a-),standardandpoors.co Peter can be reached at 212-438-2065 or by email at peter MulphyP dpoors.co ,standardan_ 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 $63,000. 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. Derivatives Products anglysis 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/obligor's revenues. Derivative products include, but are not limited to, interest rate swaps, -N DA 11� P Mr. Eric T. Fresch Page 2 March 3, 2009 caps, collars, floors, and swaptions. Derivative products analysis fees will be determined on a case by -case basis based on the number and complexity of the derivative products. Other fees and expenses. You 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, you agree to compensate us based on our time, 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.standardandpoors.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-Hill Companies, Inc. By: Moma Lebron Manager Fee Administration sb cc: Mr. Craig Underwood, President Bond Logistix 2_1 L)A, 1 � i Mr. Eric T. Fresch Page 3 March 3, 2009 CONFIRMED, AGREED AND ACCEPTED AS OF THE DATE FIRST ABOVE WRITTEN City of Vernon By: Name—: Title: Mayor /ZLayQT--Fre—T-em-- AT I kmT: MA UELA GIRONv-T_i_?_ Clerk APPROVED 0 FORM: q, JEF�/t rISON, City Attorney STANDARD &POOKS Standard & Poor's Ratings Services Terms and Conditions Applicable To U.S. Public Finance Ratings Reguest for a rating. 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. Agreement to Accept Terms and Conditions. Standard & Poor's assigns Public Finance ratings subject to the terms and conditions stated herein and in the rating letter. The issuer/obligor'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 exi)enses. In consideration of our analytic review and issuance of the rating, the issuer/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 issuer/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. Scope of Rating. The issuer/obligor understands and agrees that (i) an issuer rating reflects Standard & Poor's current opinion of the issuer/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 infon-nation 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 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 & 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 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 or refine Standard & Poor's criteria at any time as Standard & Poor's deems appropriate. Information to be Provided by the Issuer/oblig . 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 & 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 issuer/obligor or its agents. Standard & Poor's undertakes no duty of due diligence or independent verification of S-1 "-N� DA PAI) 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, FiduciM, or Expert. 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 Damaizes. 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 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 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 limitation, negligence), or otherwise. The issuer/obligor 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. 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. Binding Effect. This Agreement shall be binding on, and inure to the benefit of, the parties hereto and their successors and assigns. Severabilit . 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. Complete Agreement. This Agreement constitutes the complete agreement between the parties with respect to its subject matter. Ibis Agreement may not be modified except in a writing signed by authorized representatives of both parties. Goveming 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. "A J� Page I of I Juarez, Debbie From: Enomoto, Kristen Sent: Wednesday, March 04, 2009 2:41 PM To: Giron, Nelly Cc: 'Eric Fresch (BB)'; Harrison, Jeff; Lehr, Judy; Duckworth, Sharon; Juarez, Debbie Subject: Standard & Poor's Letter Agreement on 3/9/09 Council Agenda Nelly, Please include the two blue -backed originals of the Standard & Poor's Letter Agreement (Res. 9879) at the beginning of Eric's agenda packet and flag them for signature. If approved, they will need to be signed at the close of Monday's meeting. Please mail an original to the appropriate party on Monday and e-mail a copy to me, Eric, and Craig Underwood (cu nderwood O)bond log istix. com). I don't think we need it at the same time, but just to be on the safe side, please also flag the resolution for signature. Thank you, Kristen 3/4/2009 Ar� OFFICE OF THE CITY ATTORNEY Jeff A. Harrison, City Attorney 4305 Santa Fe Avenue, Vernon, California 90058 Telephone (323) 583-8811 Fax (323) 826-1438 March 9, 2009 Via Federal Express Ms. Morna Lebron Manager Fee Administration Standard & Poor's Ratings Services 55 Water Street, 38 th Floor New York, NY 10041-0003 Re: US$421,000,000 Cit_y of Vernon, California Electric System Revenue Bonds, 2009 Series A, dated: Date of Delivery, clue: August 1, 2021 Dear Morna: Enclosed please find the original Letter Agreement executed by the City of Vernon regarding the above -referenced matter. If you have any questions, please contact me. Sincerel JAf A. larrison City Attorney JH: j 1 Enclosures cc: Ms. Nelly Giron, City Clerk (Resolution No. 9879) E,-�c(usivefy Industria( vie McGraw-Hill Componles Morna Lebron Steven G. Zimmermann STANDARDManager Fee Administration Managing Director 55 Water Street, 38th Floor One Market New York, NY-10041-0003 Steuart Tower, 15th Floor &POOWS tel 212 438-6808 San Francisco, CA 94105-1000 nxwna—lebrongstandardandpoors.com tel 415 371-5064 steve—Zimmermannestandardaridpoors.com issue no.: 1050733 March 3, 2009 City of Vernon 4305 Santa Fe Avenue Vernon, CA 90058 Attention: Mr. Eric T. Fresch, City Administrator Re: US$421,000,000 City of Vernon, California, Electric System Revenue Bonds, 2009 Series A, dated. Date ofDelivery, due: August 1, 2021 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. I 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 free to contact Paul at 415-371-5079 or by email at I aul dyson A _P 2 standardand oors.co Peter can be reached at 212-438-2065 or by email at peter pMhy(a_),standardandpoors.co 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: Ratirtg Fee of $63,000. 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. Derivatives Products analysis 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/obligor's revenues. Derivative products include, but are not limited to, interest rate swaps, ,'7,ol A N I AA I i) N I )OR's Mr. Eric T. Fresch Page 2 March 3, 2009 caps, collars, floors, and swaptions. Derivative products analysis fees will be determined on a case - by -ease basis based on the number and complexity of the derivative products. Other fees and expenses. You 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, you agree to compensate us based on our time, 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 t A o your assigned analytical team. In addition, please visit our web site at www.standardandpoors.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-Hill Companies, Inc. By: Morna Lebron Manager Fee Administration sb cc: Mr. Craig Underwood, President Bond Logistix S-1 AN I JARD Mr. Eric T. Fresch Page 3 March 3, 2009 CONFIRMED, AGREED AND ACCEPTED AS OF THE DATE FIRST ABOVE WRITTEN City of Vernon By: Name—: r Title: Mayor /Za-y��. RANUELA GIRON,*—C i� Clerk APPROVED, RM: Q�7 4 JEF�/t - rISON, City Attorney STANDARD &POOICS Standard & Poor's Ratings Services Terms and Conditions Applicable To U.S. Public Finance Ratings Request for a rating. 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. Agreement to Accept Terms and Conditions. Standard & Poor's assigns Public Finance ratings subject to the terms and conditions stated herein and in the rating letter. The issuer/obligor'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 expenses. In consideration of our analytic review and issuance of the rating, the issuer/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. `fhe 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 issuer/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. Scope of Rating. The issuer/obligor understands and agrees that (i) an issuer rating reflects Standard & Poor's current opinion of the issuer/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, (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 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 fi7om 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 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 or refine Standard & Poor's criteria at any time as Standard & Poor's deems appropriate. Information,to be Provided by the Issuer/obligor. Theissuer/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 & 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 issuer/obligor or its agents. Standard & Poor's undertakes no duty of due diligence or independent verification of ,—AN !MIUD 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, Fiduciga, or Expert. 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 Damages. 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 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 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 limitation, negligence), or otherwise. The issuer/obligor 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. 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. 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 the fullest extent permitted by law. CoMplete Agreern . 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. S IAN f �AR 1)