DRAFT
Attachment E - Fee Agreement (Gas System).docx
10005302
FEE AND INTEREST RATE AGREEMENT
Reference is hereby made to the Revolving Credit Agreement dated as of September 1 , 2026 (the “Agreement”), between the Board of Public Utilities Commissioners of the City of Long Beach, a commission existing under the charter of the City of Long Beach (the “Board”), acting on its own behalf and on behalf of the City of Long Beach, a charter city and municipal corporation duly organized and existing under its charter and the Constitution and laws of the State of California (the “Issuer”), and Wells Fargo Bank, National Association (together with its successors and assigns, the “Bank”), pursuant to which the Bank has agreed to make Loans to the Issuer. Capitalized terms used herein and not otherwise defined herein have the meanings set forth in the Agreement.
The purpose of this Fee and Interest Rate Agreement (this “Fee Letter”) is to confirm the agreement between the Bank and the Issuer with respect to the Commitment Fee and certain other fees payable by the Issuer to the Bank and to define the term “Applicable Spread” as used in the Agreement. This Fee Letter is the Fee Letter referenced in the Agreement, and the terms hereof are incorporated by reference into the Agreement. This Fee Letter and the Agreement are to be construed as one agreement between the Issuer and the Bank, and all obligations hereunder are to be construed as obligations thereunder. All references to amounts due and payable under the Agreement will be deemed to include all amounts, fees and expenses payable under this Fee Letter.
A
RTICLE I. F EES.
Section 1.1. Commitment Fee. The Issuer agrees to pay to the Bank on October 1, 2026, for the period commencing on the Closing Date and ending on September 30, 2026, and in arrears on the first Business Day of each January, April , July and October occurring thereafter to and including the Commitment Termination Date, and on the Commitment Termination Date, a non- refundable commitment fee (the “Commitment Fee”) with respect to the Available Commitment for each day in the related fee period, in an amount equal to the rate per annum (the “Commitment Fee Rate”) specified below:
LEVEL
MOODY’S
RATING S&P RATING FITCH RATING
COMMITMENT
FEE RATE
Level 1 Aa3 or above AA- or above AA- or above 0.25%
Level 2 A1 A+ A+ 0.30%
Level 3 A2 A A 0.35%
Level 4 A3 A- A- 0.40%
Level 5 Baa1 BBB+ BBB+ 0.55%
Level 6 Baa2 or below BBB or below BBB or below 0.75%
If there is no long-term unenhanced debt rating assigned to any Bonds, the term “Rating” shall mean the Indicative Rating and, in the event that there is a long- term unenhanced rating assigned to the Bonds, the term “Rating” shall mean the lowest long-term unenhanced debt rating assigned by any of Fitch, Moody’s (to the extent then rated by Moody’s) or S&P (to the extent then rated by S&P) to any Bonds (without regard to bond insurance or any other form of credit
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enhancement), and shall include the Indicative Rating. I n the event of a split in the applicable Ratings (i.e., one of the Ratings is at a different Level than one or more of the other Ratings), the Commitment Fee Rate shall be based upon the Level in which the lowe st Rating appears. In the event that a Rating is suspended, withdrawn or otherwise unavailable from any Rating Agency for credit related reasons or upon the occurrence and during the continuance of an Event of Default, the Commitment Fee Rate shall, immediately and automatic ally and without notice to the Issuer , be increased to the Commitment Fee Rate specified above for Level 6 plus one percent (1.00%) per annum. Any change in the Commitment Fee Rate resulting from a change in the Ratings shall be and become effective as of and on the date of the announcement of the change in the Ratings.
References to Ratings above are references to rating categories as determined by the Rating Agencies at the date hereof, and, in the event of adoption of any new or changed rating system by any Rating Agency, including, without limitation, any recalibration or realignment of (i) if there is no long-term unenhanced rating assigned to any Bonds, the Indicative Rating and (ii) if there is a long-term unenhanced rating assigned to any Bonds, the long- term unenhanced rating assigned to any Bonds, in connection with the adoption of a “global” rating scale, each of the Ratings referred to above from such Rating Agency shall be deemed to refer to the rating category under the new rating system which most closely approximates the applicable rating category as in effect on the date hereof. The Issuer acknowledges that as of the Closing Date the Commitment Fee Rate is that specified above for Level 1. To the extent any Commitment Fee is not paid when due, such Commitment Fee shall, to the extent permitted by law, accrue interest from the date payment is due until payment in full at the Default Rate, such interest to be payable on demand. Commitment Fees shall be payable in immediately available funds and computed on the basis of a year of 360 days and the actual number of days elapsed.
Section 1.2. Amendment, Consent or Waiver Fee . The Issuer agrees to pay to the Bank on the date of each amendment, supplement, or modification to the Agreement or this Fee Letter (or any Related Document, the amendment, supplement or modification of which requires the consent of, or waiver from, the Bank), a fee as may be agreed to between the Bank and the Issuer plus the reasonable fees and expenses of any legal counsel retained by the Bank in connection therewith.
Section 1.3. Applicable Spread. For purposes of the Agreement, “Applicable Spread” means a rate per annum associated with the Level corresponding to the Ratings, as specified below.
L
EVEL
MOODY’S
RATING S&P RATING FITCH RATING
APPLICABLE
SPREAD
Level 1 Aa3 or above AA- or above AA- or above 0.65%
Level 2 A1 A+ A+ 0.70%
Level 3 A2 A A 0.75%
Level 4 A3 A- A- 0.80%
Level 5 Baa1 BBB+ BBB+ 1.00%
Level 6 Baa2 or below BBB or below BBB or below 1.25%
In the event of a split in the applicable Ratings ( i.e., one of the Ratings is at a different Level than one or more of the other Ratings), the Applicable Spread shall be based upon the Level
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in which the lowest Rating appears. In the event that a Rating is suspended, withdrawn or otherwise unavailable from any Rating Agency for credit related reasons or upon the occurrence and during the continuance of an Event of Default, the Loans shall, immediately and automatically and without notice to the Issuer , bear interest at the Default Rate. Any change in the Applicable Spread resulting from a change in the Ratings shall be and become effective as of and on the date of the announcement of the change in the Ratings. References to Ratings above are references to rating categories as determined by the Rating Agencies at the date hereof, and, in the event of adoption of any new or changed rating system by any Rating Agency, including, without limitation, any recalibrat ion or realignment of (i) if there is no long -term unenhanced rating assigned to any Bonds, the Indicative Rating and (ii) if there is a long- term unenhanced rating assigned to any Bonds, the long- term unenhanced rating assigned to any Bonds, in connection with the adoption of a “global” rating scale, each of the Ratings referred to above from such Rating Agency shall be deemed to refer to the rating category under the new rating system which most closely approximates the applicable rating category as in effect on the date hereof. The Issuer acknowledges that as of the Closing Date the Applicable Spread is that specified above for Level 1.
Section 1.4. Termination and Reduction Fee. (a) Notwithstanding any provisions of the Agreement to the contrary, the Issuer agrees not to terminate the Revolving Commitment prior to the one (1) year anniversary of the Closing Date, except upon the payment by the Issuer to the Bank of a termination fee (the “Termination Fee”) in an amount equal to the product of (i) the Commitment Fee Rate in effect on the date of termination, (ii) the Revolving Commitment on the date of termination and (iii) a fraction, the numerator of which is equal to the number of days from and including the date of such termination to and including the one (1) year anniversary of the Closing Date and the denominator of which is 360. No termination of the Revolving Commitment shall become effective unless all amounts then payable by the Issuer to the Bank pursuant to this Section 1.4 and all amounts due to the Bank under the Agreement have been paid in full. (b) Notwithstanding the foregoing and anything set forth herein to the contrary, the Issuer agrees not to permanently reduce the Revolving Commitment prior to the one (1) year anniversary of the Closing Date, without the payment by the Issuer to the Bank of a reduction fee (the “Reduction Fee”) in connection with each and every permanent reduction of the Revolving Commitment as set forth herein in an amount equal to the product of ( i) the Commitment Fee Rate in effect on the date of such reduction, ( ii) the difference between the Revolving Commitment prior to such reduction and the Revolving Commitment after such reduction, and ( iii) a fraction, the numerator of which is equal to the number of days from and including the date of such reduction to and including the one (1) year anniversary of the Closing Date, and the denominator of which is 360. No permanent reduction of the Revolving Commitment shall become effective unless all amounts payable by the Issuer to the Bank pursuant to this Section 1.4 and all amounts then payable to the Bank under the Agreement have been paid in full.
A
RTICLE II. M ISCELLANEOUS.
Section 2.1. Amendments. No amendment to this Fee Letter shall become effective without the prior written consent of the Issuer and the Bank.
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Section 2.2. Governing Law; Jurisdiction; Waiver of Jury Trial . (a) THIS FEE LETTER
SHALL BE GOVERNED BY , AND CONSTRUED IN ACCORDANCE WITH , THE LAWS OF THE STATE OF CALIFORNIA.
(b) T O THE EXTENT PERMITTED BY APPLICABLE LAW, THE ISSUER AND THE BANK AGREE
TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY AND ALL CLAIM OR CAUSES OF ACTION BASED UPON OR ARISING OUT OF THIS FEE LETTER AND THE OTHER RELATED DOCUMENTS. IF AND
TO THE EXTENT THAT THE FOREGOING WAIVER OF THE RIGHT TO A JURY TRIAL IS UNENFORCEABLE
FOR ANY REASON IN SUCH FORUM
, EACH OF THE PARTIES HERETO HEREBY CONSENTS TO THE
ADJUDICATION OF ALL CLAIMS PURSUANT TO JUDICIAL REFERENCE AS PROVIDED IN CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638, AND THE JUDICIAL REFEREE SHALL BE EMPOWERED TO HEAR AND DETERMINE ALL ISSUES IN SUCH REFERENCE , WHETHER FACT OR LAW . EACH OF THE
PARTIES HERETO REPRESENTS THAT EACH HAS REVIEWED THIS WAIVER AND CONSENT AND EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS AND CONSENTS TO JUDICIAL REFERENCE FOLLOWING CONSULTATION WITH LEGAL COUNSEL ON SUCH MATTERS . IN THE EVENT
OF LITIGATION, A COPY OF THIS FEE LETTER MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY
THE COURT OR TO JUDICIAL REFERENCE UNDER CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638 AS PROVIDED HEREIN.
(c) E ACH PARTY HERETO CONSENTS TO AND SUBMITS TO IN PERSONAM JURISDICTION AND
VENUE IN THE STATE OF CALIFORNIA AND IN THE FEDERAL DISTRICT COURTS WHICH ARE LOCATED IN THE STATE OF CALIFORNIA. EACH PARTY ASSERTS THAT IT HAS PURPOSEFULLY AVAILED ITSELF
OF THE BENEFITS OF THE LAWS OF THE STATE OF CALIFORNIA AND WAIVES ANY OBJECTION TO IN
PERSONAM JURISDICTION ON THE GROUNDS OF MINIMUM CONTACTS , WAIVES ANY OBJECTION TO VENUE, AND WAIVES ANY PLEA OF FORUM NON CONVENIENS. THIS CONSENT TO AND SUBMISSION TO JURISDICTION IS WITH REGARD TO ANY ACTION RELATED TO THIS FEE LETTER. REGARDLESS OF WHETHER THE PARTY’S ACTIONS TOOK PLACE IN THE STATE OF CALIFORNIA OR ELSEWHERE IN THE
UNITED STATES, THIS SUBMISSION TO JURISDICTION IS NONEXCLUSIVE , AND DOES NOT PRECLUDE
EITHER PARTY FROM OBTAINING JURISDICTION OVER THE OTHER IN ANY COURT OTHERWISE HAVING
JURISDICTION
.
Section 2.3. Counterparts. This Fee Letter may be executed in multiple counterparts, each of which shall constitute an original but both or all of which, when taken together, shall constitute but one instrument. This Fee Letter may be delivered by the exchange of signed signature pages by facsimile transmission or by e-mail with a pdf copy or other replicating image attached, and any printed or copied version of any signature page so delivered shall have the same force and effect as an originally signed version of such signature page.
Section 2.4. Severability. Any provision of this Fee Letter which is prohibited, unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition, unenforceability or non- authorization without invalidating the remaining provisions hereof or affecting the validity, enforceability or legality of such provision in any other jurisdiction.
Section 2.5. Confidentiality. This Fee Letter and the terms hereof are for the Issuer’s confidential use only. The Issuer shall not deliver or permit (with knowledge), authorize or consent
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to the delivery of this Fee Letter to any person for delivery to the Municipal Securities Rulemaking Board and shall use its best efforts to not disclose this Fee Letter or the terms hereof to any person, other than its trustees, officers, employees, attorneys, accountants and financial advisors (but not commercial lenders), and then only on a confidential basis, except where (in the Issuer’s judgment, as applicable) disclosure is required by law or where the Bank consents to the proposed disclosure; provided, that any party to the transactions contemplated by this Fee Letter (and each employee, representative, or other agent of such party) may disclose to any and all persons, without limitation of any kind, the federal, state or local tax treatment of the transaction contemplated herein, and all materials of any kind (including opinions or other tax analyses) relating to such federal, state or local tax treatment, other than the name of the parties or any other person named herein, or information that would permit identification of the parties or such other persons, and any pr icing terms or other nonpublic business or financial information that is unrelated to the federal, state or local tax treatment of the transaction contemplated herein to the taxpayer and is not relevant to understanding the federal, state or local tax treatment of the transaction contemplated herein to the taxpayer. This authorization of tax disclosure is retroactively effective to the commencement of the first discussions between the parties regarding the transaction contemplated herein. These provisions are meant to be interpreted so as to prevent the transaction contemplated herein from being treated as offered under “conditions of confidentiality” within the meaning of the Code and the Treasury Regulations thereunder.
Section 2.6. Representation by Legal Counsel; Joint Preparation. The parties hereto have participated jointly in the negotiation and drafting of this Fee Letter , and each of the parties was represented by its respective legal counsel during the negotiation and execution of this Fee Letter. In the event an ambiguity or question of intent or interpretation arises, this Fee Letter shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Fee Letter.
ATTACHMENT E
[SIGNATURE PAGE TO FEE AND INTEREST RATE AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have caused this Fee Letter to be duly executed and delivered by their respective officers thereunto duly authorized as of date first written above.
BOARD OF PUBLIC UTILITIES COMMISSIONERS OF
THE CITY OF LONG BEACH, ACTING ON ITS
OWN BEHALF AND ON BEHALF OF THE CITY OF
LONG BEACH
By: ____________________________________
Name: B. Anatole Falagán
Title: General Manager, Public Utilities
Department of the City of Long
Beach
APPROVED AS TO FORM
DAWN MCINTOSH, City Attorney
By:
Principal Deputy City Attorney
ATTACHMENT E
[SIGNATURE PAGE TO FEE AND INTEREST RATE AGREEMENT]
WELLS FARGO BANK, NATIONAL ASSOCIATION
By: ____________________________________
Name: ____________________________
Title: ____________________________
ATTACHMENT E