Standard & Poor's/RDA Bond Area #2 Rating Services 11STANDARD
&PooR'S
March 24, 2011
La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, CA 92253-1504
Attention: Mr. Thomas Genovese, Executive Director
Morna Lebron
Manager Fee Administration
55 Water Street, 38th Floor
New York, NY 10041-0003
tel 212 438-6808
morn_ lebron@standardandpoors.com
issue no.: 1165785
Re: US$5,000,000 La Quinta Redevelopment Agency, California, Tax Allocation Bonds
(Taxable), (La Quinta Redevelopment Project Area #2), Series 2011, dated. Date of
Delivery, due: September 1, 2039
Dear Mr. Genovese:
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.
Please return this executed engagement as soon as possible as no significant analytical work will
commence until it is received. Return directly to Pub] ieFinanceEngagementLtrsgc sandp.com
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. You will be contacted
directly by your assigned analytic team.
In consideration of our analytic review and issuance of the rating, you agree to pay us the
following fees:
Rating Fee of $12,000. 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,
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.
Mr. Thomas Genovese
Page 2
March 24, 2011
Note Regarding Private and Confidential Ratings: If you request a private rating (other than a
confidential rating) under this Agreement, Standard & Poor's will make such rating and related
report available by email or through a password -protected website or third -party private document
exchange to a limited number of third parties you identify, and you agree not to disclose such
rating to any third party other than your professional advisors who are bound by appropriate
confidentiality obligations. You also agree to maintain the list of third -parties authorized to access
the private rating current and to notify Standard & Poor's in writing of any changes to that list.
Standard & Poor's may make access to the private rating subject to certain terms and conditions,
and disclose on its public website the fact that the rated entity or obligations (as applicable) has
been assigned a private rating.
In the attached Terms & Conditions, any reference to "confidential rating" shall be read to include
"private rating", and any reference to "confidential basis" shall be read to include "private basis".
If you request a confidential rating under this Agreement, you agree that the rating will be
exclusively for your internal use, and not to disclose it to any third party other than your
professional advisors who are bound by appropriate confidentiality obligations.
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 contact me if you have any questions or suggestions about our fee policies. 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 Standard & Poor's Financial Services LLC business
By: Morna Lebron
Manager Fee Administration
Mr. Thomas Genovese
Page 3
March 24, 2011
by
cc: Ms. Robin M. Thomas, Senior Vice President
Wedbush Morgan Securities
CONFIRMED, AGREED AND ACCEPTED
AS OF THE DATE FIRST ABOVE WRITTEN
La Quinta Redevelopment Agency
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STANDARD
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Standard & Poor's Ratings Services
Terms and Conditions Applicable To Public Finance Ratings
You understand and agree that
General. The ratings and other views of Standard & Poor's Ratings Services ("Ratings Services") are statements of
opinion and not statements of fact. A rating is not a recommendation to purchase, hold, or sell any securities nor does it
comment on market price, marketability, investor preference or suitability of any security. While Ratings Services bases
its ratings and other views on information provided by issuers and their agents and advisors, and other information from
sources it believes to be reliable, Ratings Services does not perform an audit, and undertakes no duty of due diligence or
independent verification, of any information it receives. Such information and Ratings Services' opinions should not be
relied upon in making any investment decision. Ratings Services does not act as a "fiduciary" or an investment advisor.
Ratings Services neither recommends nor will recommend how an issuer can or should achieve a particular rating
outcome nor provides or will provide consulting, advisory, financial or structuring advice.
All Rating Actions in Ratings Services' Sole Discretion. Ratings Services may assign, raise, lower, suspend, place on
CreditWatch, or withdraw a rating, and assign or revise an Outlook, at any time, in Ratings Services' sole discretion.
Ratings Services may take any of the foregoing actions notwithstanding any request for a confidential or private rating or a
withdrawal of a rating, or termination of this Agreement. Ratings Services will not convert a public rating to a confidential
or private rating, or a private rating to a confidential rating.
Publication. Ratings Services reserves the right to use, publish, disseminate, or license others to use, publish or disseminate
the rating provided hereunder and any analytical reports, including the rationale for the rating, unless you specifically
request in connection with the initial rating that the rating be assigned and maintained on a confidential or private basis. If,
however, a confidential or private rating or the existence of a confidential or private rating subsequently becomes public
through disclosure other than by an act of Ratings Services or its affiliates, Ratings Services reserves the right to treat the
rating as a public rating, including, without limitation, publishing the rating and any related analytical reports. Any
analytical reports published by Ratings Services are not issued by or on behalf of you or at your request. Notwithstanding
anything to the contrary herein, Ratings Services reserves the right to use, publish, disseminate or license others to use,
publish or disseminate analytical reports with respect to public ratings that have been withdrawn, regardless of the reason for
such withdrawal. Ratings Services may publish explanations of Ratings Services' ratings criteria from time to time and
nothing in this Agreement shall be construed as limiting Ratings Services' ability to modify or refine its ratings criteria at
any time as Ratings Services deems appropriate.
Information to be Provided by You. For so long as this agreement is in effect, in connection with the rating provided
hereunder, you warrant that you will provide, or cause to be provided, as promptly as practicable, to Ratings Services all
information requested by Ratings Services in accordance with its applicable published ratings criteria. The rating, and
the maintenance of the rating, may be affected by Ratings Services' opinion of the information received from you or your
agents or advisors. You further warrant that all information provided to Ratings Services by you or your agents or
advisors regarding the rating or, if applicable, surveillance of the rating, as of the date such information is provided, (i)
contains no untrue statement of material fact and does not omit a material fact necessary in order to make such
information, in light of the circumstances in which it was provided, not misleading and (ii) does not infringe or violate the
intellectual property rights of a third party. A material breach of the warranties in this paragraph shall constitute a
material breach of this Agreement.
Confidential Information. For purposes of this Agreement, "Confidential Information" shall mean verbal or written
information that you or your agents or advisors have provided to Ratings Services and, in a specific and particularized
manner, have marked or otherwise indicated in writing (either prior to or promptly following such disclosure) that such
PF Ratings U.S. (10/28/10)
information is "Proprietary and Confidential." Notwithstanding the foregoing, information disclosed by you or your
agents or advisors to Ratings Services shall not be deemed to be Confidential Information, and Ratings Services shall
have no obligation to treat such information as Confidential Information, if such information (i) was known by Ratings
Services or its affiliates at the time of such disclosure and was not known by Ratings Services to be subject to a
prohibition on disclosure, (ii) was known to the public at the time of such disclosure, (iii) becomes known to the public
(other than by an act of Ratings Services or its affiliates) subsequent to such disclosure, (iv) is disclosed to Ratings
Services or its affiliates by a third party subsequent to such disclosure and Ratings Services reasonably believes that such
third party's disclosure to Ratings Services or its affiliates was not prohibited, (v) is developed independently by Ratings
Services or its affiliates without reference to the Confidential Information, (vi) is approved in writing by you for public
disclosure, or (vii) is required by law or regulation to be disclosed by Ratings Services or its affiliates Ratings Services
acknowledges that it is aware that U.S. and state securities laws impose restrictions on trading in securities when in
possession of material, non-public information and has adopted securities trading policies to that effect.
Ratings Services' Use of Information. Except as otherwise provided herein, Ratings Services shall not disclose Confidential
Information to third parties. Ratings Services may (i) use Confidential Information to assign, raise, lower, suspend, place on
CreditWatch, or withdraw a rating, and assign or revise an Outlook, and (ii) share Confidential Information with its affiliates
engaged in the ratings business who are bound by appropriate confidentiality obligations; in each case, subject to the
restrictions contained herein, Ratings Services and such affiliates may publish information derived from Confidential
Information. Ratings Services may also use, and share Confidential Information with any of its affiliates or agents engaged
in the ratings or other financial services businesses who are bound by appropriate confidentiality obligations ("Relevant
Affiliates and Agents"), for modelling, benchmarking and research purposes; in each case, subject to the restrictions herein,
Ratings Services and such affiliates may publish information derived from Confidential Information. With respect to
structured finance ratings not maintained on a confidential or private basis, Ratings Services may publish data aggregated
from Confidential Information, excluding data that is specific to and identifies individual debtors ("Relevant Data"), and
share such Confidential Information with any of its Relevant Affiliates and Agents for general market dissemination of
Relevant Data; you confirm that, to the best of your knowledge, such publication would not breach any confidentiality
obligations you may have toward third parties. Ratings Services will comply with all applicable U.S. and state laws, rules
and regulations protecting personally -identifiable information and the privacy rights of individuals. Ratings Services
acknowledges that you may be entitled to seek specific performance and injunctive or other equitable relief as a remedy for
Ratings Services' disclosure of Confidential Information in violation of this Agreement. Ratings Services and its affiliates
reserve the right to use, publish, disseminate, or license others to use, publish or disseminate any non -Confidential
Information provided by you, your agents or advisors.
Ratings Services Not an ExpertUnderwriter or Seller under Securities Laws. Ratings Services has not consented to and
will not consent to being named an "expert" or any similar designation under any applicable securities laws or other
regulatory guidance, rules or recommendations, including without limitation, Section 7 of the U.S. Securities Act of
1933. Ratings Services is not an "underwriter" or "seller" as those terms are defined under applicable securities laws or
other regulatory guidance, rules or recommendations, including without limitation Sections I I and 12(a)(2) of the U.S.
Securities Act of 1933. Rating Services has not performed the role or tasks associated with an "underwriter" or "seller"
under the United States federal securities laws or other regulatory guidance, rules or recommendations in connection with
this engagement.
Office of Foreign Assets Control. As of the date of this Agreement, (a) neither you nor the issuer (if you are not the
issuer) or any of your or the issuer's subsidiaries, or any director or corporate officer of any of the foregoing entities, is
the subject of any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the
Treasury ("OFAC Sanctions"), (b) neither you nor the issuer (if you are not the issuer) is 50% or more owned or
controlled, directly or indirectly, by any person or entity ("parent") that is the subject of OFAC Sanctions, and (c) to the
best of your knowledge, no entity 50% or more owned or controlled by a direct or indirect parent of you or the issuer (if
you are not the issuer) is the subject of OFAC sanctions. For so long as this agreement is in effect, you will promptly
notify Ratings Services if any of these circumstances change.
Ratings Services' Use of Confidential and Private Ratings. Ratings Services may use confidential and private ratings in
its analysis of the debt issued by collateralized debt obligation (CDO) and other investment vehicles. Ratings Services
may disclose a confidential or private rating as a confidential credit estimate or assessment to the managers of CDO and
similar investment vehicles. Ratings Services may permit CDO managers to use and disseminate credit estimates or
PF Ratings U.S. (1O/28110)
assessments on a limited basis and subject to various restrictions; however, Ratings Services cannot control any such use
or dissemination.
Entire Agreement. Nothing in this Agreement shall prevent Ratings Services from acting in accordance with applicable
laws, regulations and Ratings Services' policies as published from time to time. Subject to the prior sentence, this
Agreement, including any amendment made in accordance with provisions hereof, constitutes the complete and entire
agreement between the parties on all matters regarding the rating provided hereunder. The terms of this Agreement
supersede any other terms and conditions relating to information provided to Ratings Services by you or your agents and
advisors hereunder, including without limitation, terms and conditions found on, or applicable to, websites or other
ation
smeansuch terms and and tions arch you ore entered our into before ts and advisors
orr after the date of thisrAgreement available Such aterms andreonditions shallsif
be
null and void as to Ratings Services.
Limitation on Damages. Ratings Services 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. RATINGS
SERVICES GIVES NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. Ratings
Services, its affiliates or third party providers, or any of their officers, directors, shareholders, employees or agents shall
not be liable to you, your affiliates or any person asserting claims on your behalf, directly or indirectly, for any
inaccuracies, errors, or omissions, in each case regardless of cause, actions, damages (consequential, special, indirect,
incidental, punitive, compensatory, exemplary or otherwise), claims, liabilities, costs, expenses, legal fees or losses
(including, without limitation, lost income or lost profits and opportunity costs) in any way arising out of or relating to
the rating provided hereunder or the related analytic services even if advised of the possibility of such damages or other
amounts except to the extent such damages or other amounts are finally determined by a court of competent jurisdiction
in a proceeding in which you and Ratings Services are parties to result from gross negligence or willful misconduct of
Ratings Services. In furtherance and not in limitation of the foregoing, Ratings Services will not be liable to you, your
affiliates or any person asserting claims on your behalf in respect of any decisions alleged to be made by any person
based on anything that may be perceived as advice or recommendations. In the event that Ratings Services is
nevertheless held liable to you, your affiliates, or any person asserting claims on your behalf for monetary damages under
this Agreement, in no event shall Ratings Services be liable in an aggregate amount in excess of seven times the
aggregate fees paid to Ratings Services for the rating giving rise to the cause of action, up to a maximum of
US$5,000,000 except to the extent such monetary damages directly result from Ratings Services' intentional wrongdoing
or willful misconduct. 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.
Neither party waives 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.
Termination of Agreement. This Agreement may be terminated by either party at any time upon written notice to the
other party. Except where expressly limited to the term of this Agreement, these Terms and Conditions shall survive the
termination of this Agreement.
No Third —Party Beneficiaries. 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 of this Agreement or of 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.
Amendments. This Agreement may not be amended or superseded except by a writing that specifically refers to this
Agreement and is executed manually or electronically by authorized representatives of both parties.
PF Ratings U.S. (10/28/10)
Governing law. You irrevocably agree that this Agreement and the rating letter, for purposes of any claim against Rating
Services that may be asserted by you, your affiliates or any person asserting claims on your behalf, shall be governed by
the internal laws of the State of New York. You irrevocably agree that, for purposes of any claim against Rating Services
that may be asserted by you, your affiliates or any person asserting claims on your behalf in any dispute arising out of or
relating to this Agreement, the state courts of New York located in the County of New York or the U.S. federal court for
the Southern District of New York shall be the exclusive forums for such disputes and the parties hereby consent to the
personal jurisdiction of such courts. For purposes of any claim against you that Rating Services may assert in any dispute
arising out of or relating to the Agreement, neither party waives its right to contest the applicable governing law or the
appropriate forum, including in connection with any assertion of sovereign immunity.
PF Ratings U.S. (10/28/10)