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Resolution No. 2010-090RESOLUTION NO. 2010-90 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON APPROVING AND AUTHORIZING THE EXECUTION OF AN AGREEMENT ,BY'AND BETWEEN THE CITY OF VERNON AND LATHAM & WATKINS LLP FOR LEGAL SERVICES WHEREAS, the City of Vernon ("City") is a chartered municipal corporation of the State of California; and WHEREAS, the City desires to retain Latham and Watkins to provide certain legal services to its Light and Power utility. 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 basic financial terms Set forth in agreement with Latham and Watkins, a copy which is attached hereto as Exhibit A (the "Agreement"). SECTION 3: Subject to revisions to the Agreement satisfactory to the City Attorney, the City Council of the City of Vernon hereby authorizes the Mayor or Mayor Pro-Tem to execute the Agreement with such revisions for, and on behalf of, the City 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 the City Clerk's designee, to send a fully executed Agreement to Latham &Watkins LLP. SECTION -5: The City Clerk of the City of Vernon shall certify to the passage, approval and adoption of this resolution, and the City Clerk of the City of Vernon shall cause this resolution and the City Clerk's certification to be entered in the File of Resolutions of the Council of this City. APPROVED AND ADOPTED this 19th day of July, 2010. Name: Hilario Gonzales Title: Mayor ATTE Willa`d G. Ya gu hi ity Clerk 2 STATE OF CALIFORNIA ) ss COUNTY OF LOS ANGELES ) I, Willard G. Yamaguchi, City Clerk of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. 2010-90, was duly passed, approved and adopted by the City Council of the City of Vernon at a regular meeting of the City Council duly held on. Monday, July 19, 2010, and thereafter was duly signed by the Mayor or Mayor Pro-Tem of the City of Vernon. Executed this day of July, 2010, at Vernon, California. Willard G. a uc i, City Clerk (SEAL) - 3 - David B. Rogers 355 South Grand Avenue Direct Dial: +1.213.891.8236 Los Angeles, California 90071-1560 david.rogers@lw.com Tel: +1.213.485.1234 Fax: +1.213.891.8763 www.lw.com L A T H A M& W AT K I N S LLP FIRM / AFFILIATE OFFICES Abu Dhabi Moscow Barcelona Munich Beijing New Jersey Brussels New York Chicago Orange County July 14, 2010 Doha Paris Dubai Riyadh Frankfurt Rome Hamburg San Diego Hong Kong San Francisco The Honorable Mayor and Council Members Houston shanghai City of Vernon London Silicon valley 4305 South Santa Fe Avenue Los Angeles Singapore Vernon, California 90058 Madrid Tokyo Milan Washington, D.C. File No. 037484-0030 Gentlemen: We are pleased to serve City of Vernon as a client of Latham & Watkins LLP. This letter will confirm our discussions regarding your engagement of our firm for the matters described below. L. Lesal Services. You have asked us to represent you in connection with: (i) "Project Volt," involving the raising of significant capital from one or more infrastructure funds pursuant to a structure to be determined, (ii) the City's efforts to explore aggregating other municipal power users into a power pool and (iii) the City's efforts to acquire generation resources (whether by power purchase, tolling or similar agreements or by means of ownership, leasehold or other interests in -power generation facilities) to serve the City and or the power pool. Our services for other matters will be governed by our existing engagement letter with you. 2. Identity of the Client. Our clients in this matter will be solely the City and any joint powers authority formed and controlled by the City to effect any of the transactions described above (the "Clients"). We do not represent and will not be deemed to have an attorney -client relationship with any of City's partners, employees, directors, venturers or other affiliates or constituents solely on account of our representation of the Clients. You have designated Eric Fresch as your authorized representative to direct our activities and to be the primary person with whom we will communicate regarding the subject matter of this representation. This designation is intended to minimize uncertainty and to establish a clear line of authority for us, although in the course of our representation, we may also be working with other personnel in your organization. 3. Roles of Attorney and Client. Our responsibilities under this agreement are to provide legal counsel and assistance to you in accordance with this letter, and to provide statements to you that clearly state the basis for our fees and charges. We will not disclose any confidential information of yours to any other LA\2118816.1 July 14, 2010 Page 2 LATHAM&WATKINS«P client, even where that information might have some bearing on their interests. Likewise, we will not disclose the confidences of any other client to you, even where that information might have some bearing on your interests, and you agree that we are under no obligation to do so. You also agree to keep us informed of developments related to this representation and to pay our statements in a timely manner. To allow us to conduct a conflicts check, you represent that you have identified to us all persons and entities that are or may become involved in this matter, including all such persons or entities that are affiliated with you. You also agree to notify us if you become aware of any other persons or entities that are or may become involved in this matter. During the course of this engagement, we may express opinions or beliefs to you about the effectiveness of various courses of action or about the results that might be anticipated. Such statements are expressions of opinion only, and should not be construed as promises or guaranties. Please also be aware that Latham & Watkins LLP has internal ethics and professional responsibility counsel, who advise Latham attorneys regarding their ethical, professional and legal duties. From time to time, the attorneys working on your matter may consult these lawyers. You acknowledge that any such consultation is protected by Latham's own attorney -client privilege, and you waive any right to discovery of those communications. Should circumstances arise in which Latham & Watkins LLP faces a conflict of interest with respect to or by virtue of these communications, you agree to waive that conflict. You also agree that such communications are property of the firm and are not part of the Client File as defined in Section 4 of this letter. 4. Client Files and Retention. In the course of your representation, we shall maintain a file in which we may place correspondence, agreements, governmental filings, prospectuses, disclosures, pleadings, deposition transcripts, exhibits, physical evidence, expert reports, and other items reasonably necessary to your representation ("Client File"). The Client File shall be and remain your property. Upon completion of a specific project, your original Client File for that project shall be available to be taken by you. We will be entitled to make copies if we choose. You also agree at the conclusion of the project (whether or not you take possession of the Client File) to take possession of any and all original contracts, wills, stock certificates, and other such important documents that may be in the Client File and we shall have no further responsibility with regard to such documents. If you do not take possession of the Client File at the conclusion of the project, we will store such file for you for a period of seven years. If you do not take possession of the Client File during such seven-year storage period, you agree that we may dispose of it. You agree that the documents containing our attorney work product, mental impressions or notes and drafts of documents shall be and remain our property and shall not be considered part of your Client File. In addition, electronic documents such as e-mail and documents prepared on our word processing system (but excluding printed copies thereof), and databases shall be and remain our property and shall not be considered part of your Client File. You agree that we may enact and implement reasonable retention policies for such electronic documents and that our firm has discretion to delete such documents. LA\2118816.1 July 14, 2010 Page 3 LATHAM&WATKI NS«P 5. Conflicts of Interest. Without your consent, we will not represent any other party in this matter, nor any other matter substantially related to it. As with any other client and any other matter, you will have our complete loyalty with respect to this matter. We also note, however, that Latham & Watkins LLP is an international law firm with numerous attorneys and offices in many countries and that we practice in many diverse areas of law. Some of our clients may now or in the future operate in the same lines of business as you do. Both our own prudent business conduct, and the interests of our other clients, call for us to seek to retain the ability to take unrelated mattersfor all of our clients. We thus ask you in connection with this engagement to consent in advance to our acceptance of future matters (excluding litigation matters) adverse to Clients, provided that those matters are not substantially related to the work that we have done for you. By entering into this agreement, you consent to such adverse representations. Thus, for example, you agree that we would be able to take a new transactional matter for any client, adverse to Clients, at the same time that we are representing Clients in this matter, so long as the adverse matter is not substantially related to the work we have done for you. This consent also includes being adverse to you in any bankruptcy, regulatory, administrative, legislative or rulemaking proceeding. In addition, by entering into this agreement you agree that if we represent you in a matter across from another person or entity, we may represent such person or entity on matters not substantially related to our work for you. Because you are consenting only to our taking matters unrelated to anything we have handledforClients, we will not have obtained any confidential information from Clients that would be pertinent to any matter on which we will be representing these other clients. Nevertheless, we take very seriously our obligations to maintain the confidentiality of information we receive from all of our clients, including Clients and any other clients covered by this consent. Accordingly, we will continue to maintain the confidences of both Clients and our other clients. You should feel completely free to consult other counsel concerning these matters and we encourage you to do so. By signing this letter, you acknowledge that you have had an opportunity to consult with other counsel. Rates, Fees and Charges. For Project Volt, the City agrees that our fees will be, equal to 0.70% of the gross proceeds raised (the "Percentage Fee") payable at closing of the transaction. For each month starting June 1, 2010 through completion of Project Volt, the City agrees to pay us fees of $150,000 per month (the "Monthly Fee"). The aggregate amount of the Monthly Fees shall be credited against the Percentage Fee; provided that the Monthly Fees shall not be refundable if there is no Percentage Fee owing or if the Percentage Fee is less than the aggregate Monthly Fees. For the power pooling and generation projects, the City agrees that our fees will be equal to 80% of our typical hourly fees for each professional plus 0.40% of the transaction value. In addition to fees, the City agrees to pay for disbursements and other charges. These will include such items as photocopying ($0.17 per page); color prints/copies ($0.25 per page); scanning documents ($0.15 per page); use of fee -based research databases (90% of the third - party vendor rate or 1.25 times our volume -discounted cost depending on vendor); long-distance telephone charges (AT&T standard rates); couriers and air freight (1.10 times our volume- LA\2118816.1 July 14, 2010 Page 4 LATHAM&WATKINS« discounted cost); messengers (at third -party vendor rate); client -specific work by staff, staff overtime and meals (as defined by federal or local law); transportation (where dictated by safety reasons, and which may include a transaction fee); word processing ($60.00 per hour); postage, at cost; supplies (for large volume only); and other reasonable costs and expenses. For disbursements over $1,500, we may ask that billings be sent directly to you or that advances be provided. When our personnel travel, we generally utilize business class for international flights. Through a third -party travel management company, in-house travel services are provided for our U.S. offices. A ticketing fee of $30 will be charged for fares up to $300, and $75 will be charged for fares over $300. There are no additional charges for changes to reservations or for reimbursement of unused tickets. Our attorneys and paralegals bill for travel time, but if they work on another matter while traveling for you, you will not be billed for that time. We intend to provide statements to you on a monthly basis. They will show our time logged in tenth -of -an -hour increments and will separate fees from disbursements and other charges. Payment of our statements is due promptly upon receipt. Our rates are based on our receiving payment within thirty (30) days. Our billing rates and charges are usually revised annually, but we reserve the right to revise them at other times. Following any such revision, our new rates and charges will be applied to your account, and this letter constitutes written notice to you of our right to make such revisions. From time to time, you may request estimates of the fees and charges that we anticipate incurring on your behalf. These estimates are subject to unforeseen circumstances and are by their nature inexact. While we may provide estimates for your general planning purposes, such estimates are subordinate to our regular billing procedures, absent an express written agreement to the contrary. 7. Arbitration of Disputes. Any controversy or claim, whether in tort, contractor otherwise, arising out of or relating to the relationship between Clients, its affiliates or successors (the "Client Arbitration Parties") and Latham & Watkins LLP, its affiliated partnerships, attorneys or staff or any of their successors (the "Latham Arbitration Parties") or the services provided by the Latham Arbitration Parties pursuant to this engagement letter or otherwise to the Client Arbitration Parties shall be submitted to binding arbitration. By agreeing to arbitrate, you are agreeing to waive your right to a jury trial. The arbitration will be conducted in accordance with this document, the Federal Arbitration Act and CPR Rules for Non -Administered Arbitration, as in effect on the date of this engagement letter. The arbitration shall be conducted before a panel of three neutral arbitrators. The arbitration shall be commenced and held in Los Angeles, California. Any issue concerning the extent to which any dispute is subject to arbitration, the applicability, interpretation, or enforceability of this agreement shall be resolved by all of the arbitrators. To the extent state law is applicable, the arbitrators shall apply the substantive law of the State of California. Each party will be entitled to depose a maximum of six witnesses, plus all experts designated to be witnesses at the arbitration. The depositions shall be limited to a maximum of six hours per deposition. All aspects of the arbitration shall be treated as confidential and neither the parties nor the arbitrators may disclose the content or results of the arbitration, except as necessary to comply with legal or regulatory requirements. The result of the arbitration shall be binding on the parties and judgment on the arbitrators' award may be entered in any court having jurisdiction. I,A\2118816.1 July 14, 2010 Page b LATHAM&WATKI"NS«P 8. Limited Liability Partnership. Latham & Watkins LLP is a limited liability partnership (LLP). Similar to the corporate form of business organization, the LLP form generally limits the liability of the individual partners of the firm to the capital they have invested in the firm for claims arising from services performed by the firm. Our form of organization as an LLP will, not diminish the ability to recover damages from the firm or from any individuals who directly caused the loss. Because of legal requirements in those countries, work done out of our offices in England, France, Hong Kong, Japan, Singapore, Saudi Arabia, and Italy will be carried out through affiliated partnerships registered locally, but the distinction will be largely transparent to you as a client. 9. Entire Agreement and Miscellaneous. You and we understand that this letter constitutes the entire agreement pertaining to the engagement of Latham & Watkins LLP, and that it shall not be modified by any policies, procedures, guidelines or correspondence from you or your representative unless agreed to in writing by Latham & Watkins LLP. Our relationship with you will be deemed concluded when we have completed our services. In addition, and without .limiting the preceding sentence, in the event we have performed no work on your behalf for six consecutive months, you agree that our attorney -client relationship with you will°have been terminated. 10. Approval and Return of Letter. If this letter' meets with your approval, please sign and return the enclosed copy We look forward to working with you. a.A ly yo rs, DviB. Rogers of L,ATHAM & WATKINS LLP LA\2118816,,1 July 14, 2010 Page 6 LATHAM&WATKI NS«P Approval of Enmement City's authorizedrepresentative has read the enclosed letter and confirms it is binding on Clients. BY SIGNING THIS LETTER, CLIENTS AGREE TO HAVE ANY ISSUE ARISING OUT OF OR RELATING TO THE SERVICES OF THE LATHAM ARBITRATION PARTIES (INCLUDING ANY CLAIM FOR PROFESSIONAL LIABILITY) DECIDED IN ARBITRATION AND CLIENTS GIVE UP THEIR RIGHTS TO A JURY OR COURT TRIAL AND ACKNOWLEDGE THE ARBITRATION PROVISION IN SECTION 7 ABOVE. Date: July_, 2010. THE CITY OF VERNON, a California charter city and municipal corporation By: Name: Title: ATTEST: Approved as to form: Willard G. Yamaguchi, City Clerk, By: Name: Laurence S . Wiener Title: City Attorney LA\2118816.1 January 3, 2011 David B. Rogers, Esq. Latham & Watkins LLP 355 S. Grand Avenue Los Angeles, CA 90071-1560 Re: Legal Services Agreement Dear Mr. Rogers: Please find enclosed a fully executed original of the above -referenced document. If you have any questions regarding this matter, please contact me at (323) 583-8811 ext. 175. Very riG. ours, WILLY GUCHI City Clerk/Interim City Attorney WGY:dj Enclosure c: Resolution No. 2010-90 Agreement File No. 10-046 EiCcfusivefy IndustriaC David B. Rogers Direct Dial: +1,213.891,8236 david.rogers®Iw.com LATHAM&WATK I N SLLP July 14, 2010 The Honorable Mayor and Council Members City of Vernon 4305 South Santa Fe Avenue Vernon, California 90058 Gentlemen: 355 South Grand Avenue Los Angeles, California 90071-156D Tel: +1.213.485.1234 Fax: +1.213.891.8763 www.lw.com FIRM I AFFILIATE OFFICES Abu Dhabi Moscow Barcelona Munich Beijing New Jersey Brussels New York Chicago Orange County Doha Paris Dubai Riyadh Frankfurt Rome Hamburg San Diego Hong Kong San Francisco Houston Shanghai London Silicon Valley Los Angeles Singapore Madrid Tokyo Milan Washington, D.C. File No. 037484-0030 We are.pleased to serve City of Vernon as a client of Latham & Watkins LLP. This letter will confirm our discussions regarding your engagement of our firm for the matters described below. Lep,al Services. You have asked us to represent you in connection with: (i) "Project Volt," involving the raising of significant capital from one or more infrastructure funds pursuant to a structure to be determined, (ii) the City's efforts to explore aggregating other municipal power users into a power pool and (iii) the City's efforts to acquire generation resources (whether by power purchase, tolling or similar agreements or by means of ownership, leasehold or other interests in power generation facilities) to serve the City and or the power pool. Our services for other matters will be governed by our existing engagement letter with you. 2. Identity of the Client. Our clients in this matter will be solely the City and any joint powers authority formed and controlled by the City to effect any of the transactions described above (the "Clients"). We do not represent and will not be deemed to have an attorney -client relationship with any of City's partners, employees, directors, venturers or other affiliates or constituents solely on account of our representation of the Clients. You have designated Eric Fresch as your authorized representative to direct our activities and to be the primary person with whom we will communicate regarding the subject matter of this representation. This designation is intended to minimize uncertainty and to establish a clear line of authority for us, although in the course of our representation, we may also be working with other personnel in your organization. 3. Roles of Attorney and' Client. Our responsibilities under this agreement are to provide legal counsel and assistance to you in accordance with this letter, and to provide statements to you that clearly state the basis for our fees and charges. We will not disclose any confidential information of yours to any other LA\2.118816.1 July 14, 2010 Page 2 LATHAM&WATKINSLLP client, even where that information might have some bearing on their interests. Likewise, we will not disclose the confidences of any other client to you, even where that information might have some bearing on your interests, and you agree that we are under no obligation to do so. You also agree to keep us informed of developments related to this representation and to pay our statements in a timely manner. To allow us to conduct a conflicts check, you represent that you have identified to us all persons and entities that are or may become involved in this matter, including all such persons or entities that are affiliated with you. You also agree to notify us if you become aware of any other persons or entities that are or may become involved in this matter. During the course of this engagement, we may express opinions or beliefs to you about the effectiveness of various courses of action or about the results that might be anticipated. Such statements are expressions of opinion only, and should not be construed as promises or guaranties. Please also be aware that Latham & Watkins LLP has internal ethics and professional responsibility counsel, who advise Latham attorneys regarding their- ethical, professional and legal duties.. From time to time, the attorneys working on your matter may consult these lawyers, You acknowledge that any such consultation is protected by Latham's own attorney -client privilege, and you waive any right to discovery of those communications. Should circumstances arise in which Latham & Watkins LLP faces a conflict of interest with respect to or by virtue of these communications, you agree to waive that conflict. You also agree that such communications are property of the firm and are not part of the Client File as defined in Section 4 of this letter: 4. Client Files and Retention. In the course of your representation, we shall maintain a file in which we may place correspondence, agreements, governmental filings, prospectuses, disclosures, pleadings, deposition transcripts, exhibits, physical evidence, expert reports, and other items reasonably necessary to your representation ("Client File"). The Client File shall be and remain your property. Upon completion of a specific project, your original Client File for that project shall be available to be taken by you. We will be entitled to make copies if we choose. You also agree at the conclusion of the project (whether or not you take possession of the Client File) to take possession of any and all original contracts, wills, stock certificates, and other such important documents that may be in the Client File and we shall have no further responsibility with regard to such documents. If you do not take possession of the Client File at the conclusion of the project, we will store such file for you for a period of seven years. If you do not take possession of the Client File during such seven-year storage period, you agree that we may dispose of it. You agree that the documents containing our attorney work product, mental impressions or notes and drafts of documents shall be and remain our property and shall not be considered part of your Client File. In addition, electronic documents such as e-mail and documents prepared on our word processing system (but excluding printed copies thereof), and databases shall be and remain our property and shall not be considered part of your Client File. You agree that we may enact and.implement reasonable retention policies for such electronic documents and that our firm has discretion to delete such documents. LA12118816.1 July 14,2010 Page 3 LATHAM&WATKINS«P 5. Conflicts of Interest. Without your consent, we will not represent any other party in this matter, nor any other matter substantially related to it. As with any other client and any other matter, you will have our complete loyalty with respect to this matter. We also note, however, that Latham & Watkins LLP is an international law firm with numerous attorneys and offices in many countries and that we practice in many diverse areas of law. Some of our clients may now or in the future operate in the same lines of business as you do. Both our own prudent business conduct, and the interests of our other clients, call for us to seek to retain the ability to take unrelated matters for all of our clients. We thus ask you in connection with this engagement to consent in advance to our acceptance of future matters (excluding litigation matters) adverse to Clients, provided that those matters are not substantially related to the work that we have done for you. By entering into this agreement, you consent to such adverse representations. Thus, for example, you agree that we would be able to take a new transactional matter for any client, adverse to Clients, at the same time that we are representing Clients in this matter, so long as the adverse matter is not substantially related to the work we have done for you. This consent also includes being adverse to you in any bankruptcy, regulatory, administrative, legislative or rulemaking proceeding. In addition, by entering into this agreement you agree that if we represent you in a matter across from another person or entity, we may represent such person or entity on matters not substantially related to our work for you. Because you are -consenting only to our taking matters unrelated to anything we have handled for Clients, we will not have obtained any confidential information from Clients that would be pertinent. to any matter on which we will be representing these other clients. Nevertheless, we take very seriously our obligations to maintain the confidentiality of information we receive from all of our clients, including Clients and any other clients covered -by this consent. Accordingly, we will continue to maintain the confidences of both Clients and our other clients. You should feel completely free to consult other counsel concerning these matters and we encourage you to do so. By signing this letter, you acknowledge that you have had an opportunity to consult with other counsel. 6. Rates, Fees and Charges. For Project Volt, the City agrees that our fees will be. equal to 0.70% of the gross proceeds raised (the "Percentage Fee") payable at closing of the transaction. For each month starting June 1, 2010 through completion of Project Volt, the City agrees to pay us fees of $150,000 per month (the "Monthly Fee"). The aggregate amount of the Monthly Fees shall be credited against the Percentage Fee; provided that the Monthly Fees shall not be refundable if there is no Percentage Fee owing or if the Percentage Fee is less than the aggregate Monthly Fees. For the power pooling and generation projects, the City agrees that our fees will be equal to 80% of our typical hourly fees for each professional plus 0.40% of the. transaction value. In addition to fees, the City agrees to pay for disbursements and other charges. These will include such items as photocopying ($0.17 per page); color prints/copies ($0.25 per page); scanning documents ($0.1.5 per page); use of fee -based research databases (90% of the third - party vendor rate or 1.25 times our volume -discounted cost depending on vendor); long-distance telephone charges (AT&T standard rates); couriers and air freight (1.10 times our volume- LA12118816.1 July 14, 2010 Page 4 LATHAM&WATKINS«P discounted cost); messengers (at third -party vendor rate); client -specific work by staff; staff overtime and meals (as defined by federal or local law); transportation (where dictated by safety reasons, and which may include a transaction fee); word processing ($60.00 per hour); postage, at cost; supplies (for large volume only); and other reasonable costs and expenses. For disbursements over $1,500, we may ask that billings be sent directly to you or that advances be provided. When our personnel travel, we generally utilize business class for international flights. Through a third -party travel management company, in-house travel services are provided for our U.S. offices. A ticketing fee of $30 will be charged for fares up to $300, and $75 will be charged for fares over $300. There are no additional charges for changes.to reservations or for reimbursement of unused tickets. Our attorneys and paralegals bill for travel time, but if they work on another matter while traveling for you, you will not be billed for that time. We intend to provide statements to you on a monthly basis. They will show our time logged in tenth -of -an -hour increments and will separate fees from disbursements and other charges. Payment of our statements is due promptly upon receipt. Our rates are based on our receiving payment within thirty (30) days. Our billing rates and charges are usually revised annually, but we reserve the right to revise them at other times. Following any such revision, our new rates and charges will be applied to your account, and this letter constitutes written notice to you of our right to make such revisions. From time to time, you may request estimates of the fees and charges that we anticipate incurring on your behalf. These estimates are subject to unforeseen circumstances and are by their nature inexact. While we may provide estimates for your general planning purposes, such estimates are subordinate to our regular billing procedures, absent an express written agreement to the contrary. 7. Arbitration of Disputes. Any controversy or claim, whether in tort, contract or otherwise, arising out of or relating to the relationship between Clients, its affiliates or successors (the "Client Arbitration Parties") and Latham & Watkins LLP, its affiliated partnerships, attorneys or staff or any of their successors (the "Latham Arbitration Parties") or the services provided by the Latham Arbitration Parties pursuant to this engagement letter or otherwise to the Client Arbitration Parties shall be submitted to binding arbitration. By agreeing to arbitrate, you are agreeing to waive your right to a jury trial. The arbitration will be conducted in accordance with this document, the Federal Arbitration Act and CPR Rules for Non -Administered Arbitration, as in effect on the date of this engagement letter. The arbitration shall be conducted before a panel of three neutral arbitrators. The arbitration shall be commenced and held in Los Angeles, California. Any issue concerning the extent to which any dispute is subject to arbitration, the applicability, interpretation, or enforceability of this agreement shall be resolved by all of the arbitrators. To the extent state law is applicable, the arbitrators shall apply the substantive law of the State of California. Each party will be entitled to depose a maximum of six witnesses, plus all experts designated to be witnesses at the arbitration. The depositions shall be limited to a maximum of six hours per deposition. All aspects of the arbitration shall be treated as confidential and neither the parties nor the arbitrators may disclose the content or results of the arbitration, except as necessary to comply_ with legal or regulatory requirements. The result of the. arbitration shall be binding on the parties and judgment on the arbitrators' award may be entered in any court having jurisdiction. LA\2118816.1 July 14, 2010 Page E LATHAM&WATKINS«P S. Limited Liability Partnershit). Latham & Watkins LLP is a limited liability partnership (LLP). Similar to the corporate form of business -organization, the LLP form generally limits the liability of the individual partners of the firm to the capital they have invested in the firm for claims arising from services performed by the firm. Our form of organization as an LLP will.not diminish the ability to recover damages from the firm or from any individuals who directly caused the loss. Because of legal requirements in those countries, work done out of our offices in England, Prance, Hong Kong, Japan, Singapore, Saudi Arabia, and Italy will be carried out through affiliated partnerships registered locally, but the distinction will be largely transparent to you as a client. 9: Entire, Agreement and Miscellaneous. You and we understand that this letter constitutes the entire agreement pertaining to the engagement of Latham & Watkins LLP, and that it shall not be modified by any policies, procedures; guidelines or correspondence from you, or your representative unless agreed to in writing by Latham Watkins LLP. Our relationship with you will be deemed concluded when we have completed our services. In addition, and without limiting the preceding sentence, in the event we have performed no work on your behalf for six consecutive months, you agree that our attorney -client relationship with you will -have been terminated. 10. Approval and Return of Letter. If this letter'meets with your approval, please sign and return the enclosed copy We look forward to working with you: V ry truly yo 4rs, David 13. Rogers of LATHAM & WATKINS LLP LA\21188161 July 14, 2010 Page 0 LATHAM®WATKiNS«P Auaroval of Engagement City's authorized representative has read the enclosed letter and: confirms it is binding on Clients. BY SIGNING THIS LETTER, CLIENTS AGREE TO HAVE ANY ISSUE ARISING OUT OF OR RELATING TO THE SERVICES OF THE LATHAM ARBITRATION PARTIES (INCLUDING ANY CLAIM FOR PROFESSIONAL LIABILITY) DECIDED IN ARBITRATION AND CLIENTS GIVE UP THEIR RIGHTS TO A JURY OR COURT TRIAL AND ACKNOWLEDGE THE ARBITRATION PROVISION IN SECTION 7 ABOVE. Date: July__, 2910. December,,December,,b 2010 THE CITY OF VERNON, a California charter city and municipal corporation By:� Name: +i i l a r i o Goz a l e s Title: Mayor ATT T: Approved as to form: Wi and d. Yam Vg, CU Clerk B Na e: Title: Name: Willard G. Yamaguchi Title: Interim City Attorney LM12118816.1 Page l of 1 Juarez, Debbie From: Juarez, Debbie Sent: Monday, December 27, 2010 3:12 PM To: Muro, Evangelina Subject: Latham & Watkins Res. No. 2010-90 Per Kristen — This agreement can be prepared for execution by the parties as attached in Exhibit A to the resolution. Willard can sign the "Approved as to Form" and this can get signed by the Mayor tomorrow morning. I will be sending the executed agreements to David Rogers at Latham. Thank you., IDe6orah Juarez Records �41anagementAssistan.t City of Vernon - City CL•erk's Off -ice 4305 Santa 'Fe Avenue Vernon, CA 90058 (323) 583-8811 12/27/2010 STAFF REPORT City Attorney Department DATE: July 19, 2010 TO The Honorable Mayor and Members of the City Council FROM: Laurence S. Wiener, City Attorney RE: Consultant Contracts for Project Volt Background: As Mr. Eric Fresch has previously reported to the City Council, he has been assembling a consultant team to explore non traditional methods to raise capital for the Light and Power utility. He has titled this effort "Project Volt." Discussion: Mr. Fresch is now proposing that the City enter into three contracts with consultants for the purpose of further exploring Project Volt. The first contract would be with Associated Energy Partners ("AEP"). This contract would be for financial investment and energy consulting services. The principal of AEP is Eric Fresch and in addition to providing his own expertise, Mr. Fresch has indicated that AEP intends to subcontract with `other consultants, including Bond Logistics, to provide these services. The fee set forth in the. contract would be 0.95% of the value of the transaction. No fees would be owed if the transaction does not close. The second contract would be with Barclays Capital for financial advisory services. The fee for Barclays will be $8 million plus 2% of the value of the transaction in excess of $800 million. As with the contract with AEP, the fees are paid only upon closing the transaction. The third contract is with Latham and Watkins for legal services. This contract provides. that the City will pay a fee of 0.7% of the gross proceeds raised by the transaction. In addition, Latham will be paid a fee of $150,000 per month beginning June 1. If the transaction is completed, then the total amount due to Latham and Watkins will be reduced by the monthly fees that have already been paid. If the transaction is never completed, then Latham will keep the monthly fee as its compensation. Additionally, the Latham contract includes new rates for work other than Project Volt. These new rates are for work to (1) explore power pooling, or (2)advise the City in efforts to acquire generation resources (e.g., acquire a power plant, or purchase power from another entity). For this work, Latham would be paid at 80% of its full rates plus 0.4% of the transaction value. Each of the contracts were provided to the City midday on July 14th. ' Upon initial review of the contracts, it appears that each contract requires some revision to ensure that the contracts will not conflict with each other, will clearly define the scope of the project to which the contracts apply, and do not include certain provisions that are unacceptable to the City. However, if the City Council finds the basic financial terms of the contracts acceptable and wishes to allow Project Volt to move forward as quickly as possible, the City Attorney's Office would recommend that the City Council approve the basic financial terms presented in the contracts and authorize the ; Mayor to execute the contracts, with revisions satisfactory to the City Attorney. Recommendation: if the City Council finds the basic financial terms of the contracts acceptable and wishes to allow Project Volt to move forward as quickly as possible, the City Attorney's, Office recommends that the City Council approve the basic financial terms presented in the contracts and authorize the Mayor to execute the contracts, with revisions satisfactory to the City Attorney.