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<br />Mr. William G. O'Brien, Chairman <br />Virginia Resources Authority <br />1111 East Main Street, Suite 1920 <br />Richmond, Virginia 23219 <br /> <br />Re: Southeastern Public Service Authority <br /> <br />Dear Mr. O'Brien: <br /> <br />By unanimously adopted resolution of Portsmouth City Council on February 24,2009, I <br />have been authorized to send this letter of conditional support for certain efforts of the Virginia <br />Resources Authority ("VRA") to provide refinancing for a portion of the debt of the Southeastern <br />Public Service Authority ("SPSA"). <br /> <br />Portsmouth understands that VRA is willing to seek refinancing of a significant portion <br />of SPSA's debt. The purpose would be to eliminate near-term debt service payments under the <br />present debt structure that will cause problems for certain SPSA members if the debt is not <br />restructured. Portsmouth further understands that VRA's willingness to thus assist the SPSA <br />members is conditioned on certain commitments from the eight localities that comprise SPSA. <br /> <br />To that end, Portsmouth makes the following commitment to VRA: <br /> <br />· Portsmouth desires to have VRA work with SPSA to restructure SPSA debt for the <br />pupose stated, and Portsmouth respectfully requests that VRA do so. <br />· Portsmouth is willing in principle to provide full faith and credit backing for a pro rata <br />portion of the new VRA debt, based on either population or tonnage. <br />· Portsmouth desires to have VRA continue to work with SPSA in all appropriate ways to <br />help SPSA improve its operations, properly evaluate all purchase offers, develop and <br />maintain a sound financial strategy, and make full and timely public disclosure of its <br />financial and operating condition. <br />· It is the hope of Portsmouth that all seven other SPSA members make commitments <br />similar to this one. <br /> <br />Portsmouth truly appreciates the willingness of VRA to assist with this most difficult <br />challenge. We look forward to working with you. <br /> <br />Sincerely yours, <br /> <br />Dr. James W. Holley, III, Mayor <br /> <br />cc: Portsmouth City Council <br />Kenneth L. Chandler, City Manager <br />G. Timothy Oksman, City Attorney <br />SPSA and other SPSA Members <br />