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ORDINA NO~~ Q.!~~~~_. AN ORDINANCE OF THE COUNCIL OF THE CITY OF PORTSMOUTH, VIRGINIA (THE "CITY") AUTHORIZING THE GENERAL OBLIGATION GUARANTY BY THE CITY OF THE TIMELY PAYMENT OF A PORTION OF PRINCIPAL OF AND INTEREST ON CERTAIN GUARANTEED SUBORDINATED REVENUE BONDS AND SENIOR SUBORDINATED REVENUE BONDS PREVIOUSL Y ISSUED BY THE SOUTHEASTERN PUBLIC SERVICE AUTHORITY OF VIRGINIA. WHEREAS, the Southeastern Public Service Authority of Virginia ("SPSA") was created pursuant to the Virginia Water and Sewer Authorities Act by its member jurisdictions (the "Owner Communities"), which are the Cities of Chesapeake, Franklin, Norfolk, Portsmouth, Suffolk and Virginia Beach, and the Counties of Isle of Wight and Southampton; WHEREAS, SPSA is currently indebted to the Virginia Resources Authority ("VRA") in the amount of approximately $140.7 million on bonds, consisting of guaranteed subordinated revenue bonds and senior subordinated revenue bonds, issued to finance and refinance various capital expenditures (collectively, the "SPSA Local Bonds"), including $71,985,000 in SPSA Local Bonds (the "2009 SPSA Local Bonds") purchased by VRA on June 17,2009 to restructure and refund certain outstanding SPSA Local Bonds as well as certain SPSA bonds not held by VRA; WHEREAS, SPSA has entered into a purchase and sale agreement with Wheelabrator Technologies, Inc. ("Wheelabrator") in connection with the potential sale (the "WTE Sale") of SPSA's RDF Plant and Power Plant (collectively, the "WTE Facilities"); WHEREAS, a portion of the proceeds of the WTE Sale are expected to be applied to the prepayment of a portion of the SPSA Local Bonds; WHEREAS, Section 6.1 (b) of the Financing Agreement entered into by VRA and SPSA in connection with the 2009 SPSA Local Bonds (the "Financing Agreement") provides that SPSA may not sell, exchange, lease (as lessor), pledge, encumber, cease to operate, enter into a management agreement to operate or otherwise dispose of or alienate in whole or in part either the Disposal System (including the RDF Plant) or the Power Plant System (including the SPSA Power Plant, all as defined in the Financing Agreement) without the prior written consent of VRA subject to certain limited exceptions not pertinent to this Resolution; WHEREAS, as a condition to VRA's consent to the WTE Sale, VRA has required that the timely payment of principal of and interest on the SPSA Local Bonds remaining after the WTE Sale (the "Remaining SPSA Local Bonds") be severally guaranteed by a moral obligation pledge of Southampton and the general obligation pledge of the other Owner Communities, including the City; WHEREAS, the terms of such guarantees are set forth in a Guaranty Agreement between the Owner Communities, U.S. Bank National Association, as trustee (the "Trustee") and SPSA (the "Guaranty Agreement"), the form of which has been presented to this meeting;