STAFF REPORT HONORABLE MAYOR AND CITY COUNCIL ROBERT PERRAULT, CITY MANAGER

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1 STAFF REPORT TO: FROM: SUBJECT: HONORABLE MAYOR AND CITY COUNCIL ROBERT PERRAULT, CITY MANAGER AUTHORIZATION TO ENTER INTO AGREEMENTS FOR FINANCIAL ADVISORY AND BOND COUNSEL SERVICES ASSOCIATED WITH A POTENTIAL GENERAL OBLIGATION BOND ISSUE BACKGROUND As the Council is aware, the City is in the process of completing the due diligence steps associated with the potential placement of a ballot measure to authorize a general obligation bond issue to finance street rehabilitation. Thus far, the Council has retained the services of Fairbank, Maslin, Maullin, Metz & Associates (FM3), a public opinion research firm, and Pavement Management Incorporated. FM3 is in the process of conducting a public opinion survey on the City's behalf to determine voter support for a general obligation bond issue. Pavement Management Incorporated is in the process of analyzing the condition of the City's streets and the cost to complete repairs. Staff anticipates the polling results, as well as the pavement analysis, will be transmitted to the City Council during the month of June. At this point in the process, it is important that the City retain the services of a financial advisor and bond counsel to assist the City in the development of the ballot measure and, should the measure be approved, the subsequent bond issue and sale. Consequently, staff is recommending that the Council authorize entering into an agreement with A. M. Pecha & Associates LLC to act as financial advisor and the law firm of Nossaman LLP to act as bond counsel. DISCUSSION The early retention of a financial advisor and bond counsel is critical to the success of the potential bond issue. The financial advisor will assist staff with making recommendations to the City Council regarding the actual sizing of the bond and commensurate tax rates in order to maximize the potential to achieve an effective result that is consistent with the goals and objectives of the City. Once the measure has been approved by the voters, the financial advisor will work with bond counsel in the development of the transactional documentation, recommend a competitive or negotiated method for the sale of the bonds, and assist the rating agency in completing its analysis. Please see the Scope of Services identified as a part of the Agreement with A. M. Pecha & Associates LLC. (Please see Attachment 2.) Please Review for the Possibility of a PoJential Conflict of Interest: ij(none Identified by Staff CI Bright CI Peterson CI Marshall CI Lee CI Nicolls Meeting Date: _...:J:..:u:.:.n"'e""'2...,... 2"'O"'1"'4_ Agenda Item No.

2 Staff Report: Agreements Regarding Financial Advisor and Bond Counsel June 2,2014 Page 2 Bond counsel will initially assist City staff regarding the scope of the project and the development of the financing structure, including assisting with the preparation of ballot materials. Once the issue is approved, bond counsel will prepare the Resolution of Issuance and security documents, and will review all financial documents for legal sufficiency. With the assistance of City staff, bond counsel will draft the official statement for the issue and any disclosure documents necessitated by the issue. Please see the proposed agreement with Nossaman LLP. (Attachment 3) Should they be retained, both A. M. Peche & Associates LLC and Nossaman LLP will only be compensated for their services once the ballot measure passes and the bond issue transaction is completed. Both firms would be paid from the proceeds from the sale of the bond issue. In the case of A. M. Peche & Associates LLC, a sliding scale is used to calculate the fees. The scale is tied to the par amount of the bonds issued. For example, bonds issued with a $10,000,000 par value would require a fee of $80,000. For Nossaman LLP, the City would pay a fee not to exceed $50,000 for the initial issue and, for subsequent series of obligations, the City would pay up to $42,500 for each additional series issued. As noted earlier, all compensation will be paid from bond proceeds. The City has used, or is currently using, the services of both of these firms. The City / Dissolved Improvement Agency retained the services of A. M. Peche & Associates LLC to provide the City with annual Disclosure Statements required with the original Improvement Agency's bond issue. Both A. M. Peche & Associates LLC and Nossaman LLP were previously retained by the Improvement Agency in 2012 when the Agency attempted to issue an additional revenue bond that was aborted when all redevelopment agencies were eliminated by the State. A separate division of Nossaman currently represents the City regarding the Santa Maria Groundwater Basin Adjudication. ALTERNATIVES The Council has the following alternatives to consider: 1. The Council could authorize the City to enter into agreements with A. M. Peche & Associates LLC and Nossaman LLP to provide financial advisory and bond counsel services associated with a potential General Obligation Bond Issue for street rehabilitation financing; or 2. The Council could direct that staff issue a Request for Proposal/Request For Qualifications to solicit additional participation for both or either of these services; or 3. The Council could provide staff with additional direction. RECOMMENDED ACTION It is recommended that the City Council: 1) adopt the Resolution authorizing the City to enter into agreements with A. M. Peche & Associates LLC and Nossaman LLP to provide financial advisory and bond counsel services associated with a potential General Obligation Bond Issue to finance street rehabilitation; and 2) authorize the City Manager to execute the agreements on behalf of the City.

3 Staff Report: Agreements Regarding Financial Advisor and Bond Counsel June 2,2014 Page 3 FISCAL IMPACT The retention of these firms will not impact current City revenues. Compensation will be dependent upon the successful completion of a General Obligation Bond Issue. PUBLIC NOTIFICATION The agenda was posted in accordance with the Brown Act. Attachments 1. Draft Resolution authorizing the City to enter into agreements with A. M. Peche & Associates LLC and Nossaman LLP 2. Agreement materials submitted By A. M. Peche & Associates LLC 3. Agreement materials submitted by Nossaman LLP

4 Attachment 1 RESOLUTION NO. 14-_ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GROVER BEACH, CALIFORNIA, AUTHORIZING THE CITY TO ENTER AGREEMENTS FOR FINANCIAL ADVISORY AND BOND COUNSEL SERVICES ASSOCIATED WITH A POTENTIAL GENERAL OBLIGATION BOND ISSUE WHEREAS, the City is in the process of completing the due diligence steps associated with the potential placement of a ballot measure to authorize a general obligation bond issue to finance street rehabilitation; and WHEREAS, it is important that the City retain the services of a financial advisor and bond counsel to assist the City in the development of the ballot measure and, should the measure be approved, the subsequent bond issue and sale; and WHEREAS, once the measure has been approved by the voters, the financial advisor will work with bond counsel in the development of the transactional documentation, recommend a competitive or negotiated method for the sale of the bonds, and assist the rating agency in completing its analysis; and WHEREAS, the City has previously retained the services of, and was satisfied with the work performed by, A. M. Peche & Associates LLC and Nossaman LLP regarding a revenue bond that was subsequently aborted when the State dissolved all redevelopment agencies in NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Grover Beach does hereby: 1. Authorize the City to enter into agreements with A. M. Peche & Associates LLC and Nossaman LLP to provide financial advisory and bond counsel services associated with a potential General Obligation Bond Issue for street rehabilitation financing; and 2. Authorize the City Manager to sign the Agreement on behalf of the City. Upon motion by, second by Council Member, and on the following roll call vote, to wit: AYES: NOES: ABSENT: ABSTAIN: Council Members Council Members Council Members Council Members the foregoing Resolution was PASSED, APPROVED, and ADOPTED at a regular meeting of the City Council of the City of Grover Beach, California, this 2 nd day of June, Attest: DEBBIE P DONNA L. McMAHON, CITY CLERK

5 Attachment 2 AGREEMENT FOR SERVICES THIS IS AN AGREEMENT FOR SERVICES between the City of Grover Beach, to which reference is made herein as the "City" or the "Issuer," and A. M. Peche & Associates LLC, to which reference is made herein as "Peche & Associates LLC," in connection with the issuance by the Issuer of its General Obligation Bonds (the "Obligations") authorized by City voters at a future General Obligation Bond Election (the "G.O. Bond Election") to finance the replacement of City streets (the "Project"). 1. Employment. The Issuer hereby employs Peche & Associates LLC to perform, upon request of the Issuer, services set forth in the Scope of Services attached hereto. 2. Representations of Peche & Associates LLC. Peche & Associates LLC hereby represents the following: A. Peche & Associates LLC has no interest, whether direct, indirect or contingent, in any property or contract arising from or affected by the issuance and sale of the Obligations, except as financial advisor to the Issuer under this Agreement. Peche & Associates LLC will not receive a fee from any source other than the Issuer for services connected with the actual issuance of the Obligations after the passage of the G.O. Bond Election and, except as may be disclosed in writing, has no arrangement with respect thereto with any party other than the Issuer. B. Peche & Associates LLC is an independent private business, and is not a department or agency of the federal or California State governments or any other governmental entity. Peche & Associates LLC is not an investment banker, investment advisor, underwriter, remarketing agent, broker or dealer'in securities, or legal counsel, and will not function in any of those capacities hereunder. 3. Agreements of Peche & Associates LLC. Peche & Associates LLC hereby agrees as follows: A. Peche & Associates LLC will provide, as requested by the Issuer, the services set forth in the Scope of Services attached hereto. B. In providing such services, Peche & Associates LLC will make available the experience of its organization so as to represent the Issuer effectively. 4. Obligations Terms. The Obligations sale shall be subject to rates, terms, conditions and arrangements mutually agreeable to and negotiated between the Issuer and the underwriter. 5. Compensation. The Issuer shall pay to Peche & Associates LLC an amount to be based upon the following schedule based on the par amount issued, upon the closing of the sale of each series of Obligations. In addition, the Issuer shall reimburse Peche & Associates LLC's actual and reasonable expenses for couriers, mailing, telephone, travel, data and research information, copying, and other out-of-pocket expenses incurred by or for Peche & Associates LLC in performance of its services hereunder in the course of this engagement. Telephone and fax costs shall be billed at $50 per month beginning in the first month of the first meeting date during the course of this engagement to and including for the month of the closing of the Obligations. Mileage expenses will be billed at.565 per mile or the current prevailing IRS allowable reimbursement rate. However, no fee shall be payable to City of Grover Beach FA Contract

6 Agreement for Services Page 2 Peche & Associates LLC if the G.O. Bond Election is not successful or the sale of the Obligations are not closed successfully; provided that, if the G.O. Bond Election is successful and the sale of the Obligations is terminated due to an exercise of the Issuer's discretion, based upon a decision to use other funding, Peche & Associates LLC shall be paid all expenses incurred and a fee proportionate to the work performed to the date of that determination. Below are the fees for Bond issues. Par Amount of Issue Rounded Up To the Next $5,000 Up to but not including $2,000,000 $2,000,000 up to but not including $3,000,000 $3,000,000 up to but not including $4,000,000 $4,000,000 up to but not including $5,000,000 $5,000,000 up to but not including $6,000,000 $6,000,000 up to but not including $7,000,000 $7,000,000 up to but not including $8,000,000 $8,000,000 up to but not including $9,000,000 $10,000,000 and over Fee $35,000 $40,000 $50,000 $55,000 $60,000 $65,000 $70,000 $75,000 $80,000 If the Issuer desires to have a competitive sale, there will be an additional fee of $1 0,000. This reflects that Pech6 & Associates LLC will be preparing all of the quantitative analysis that would otherwise be prepared by the underwriter in a negotiated sale, as well as reviewing the Official Notice of Sale and calculating the bids submitted by underwriters, 6. Assignment. Peche & Associates LLC may assign this Agreement to a successor firm without the necessity of obtaining the consent of the Issuer. Peche & Associates LLC agrees to give notice of assignment to Issuer and upon receipt of such notice Issuer agrees to make all payments to the assignee designed in the assignment. 7. Entire Agreement; Amendments. All discussions, negotiations and prior agreements between the Issuer and Peche & Associates LLC are merged into this Agreement. This Agreement is the entire agreement between the parties respecting the subject matter hereof, This Agreement may be amended only in writing, 8. Term. This Agreement shall continue from month to month for the period reasonably necessary for the performance of the sale of the Obligations; provided, that either party hereto may terminate this Agreement for cause upon 15 day's written notice to the other party. 9. Government Code. Peche & Associates LLC and its representatives are not public officials 01' participating in governmental decisions, as those terms are used in Section of the California Government Code. No actions or opinions necessary for the performance of Peche & Associates LLC's duties under this Agreement will cause Peche & Associates LLC to be a "public official" 01' "participating in a governmental decision," as those terms are used in Section of the California Government Code. 10. Information. The Issuer, its officials and staff, bond/special counsel and others will be providing to Peche & Associates LLC various data, records, studies, computer printouts and other information and representations as to the facts relating to the Project, the Issuer and the Obligations. Peche & Associates LLC will be using and relying upon such data, records, studies, computer printouts and other information in the preparation of Peche & Associates LLC's work products. Peche & Associates

7 Agreement for Services Page 3 LLC shall not be obligated to establish or verify the accuracy or completeness of the information furnished to Peche & Associates LLC. 11. Standards. Peche & Associates LLC shall perform its services pursuant hereto in accordance with competent professional standards. The liability of Peche & Associates LLC to the Issuer for any breach of those professional standards arising out of or related to this Agreement or the services performed hereunder shall not exceed the fees paid or payable under this Agreement. 12. Governing Law. This Agreement shall be construed in accordance with the laws of the State of California. 13. Independent Contractor. Peche & Associates LLC's relationship to Issuer is that of an independent contractor. IN WITNESS WHEREOF, this Agreement has been executed and delivered for and in the names and on behalf of the Issuer and Peche & Associates LLC as of the date set forth below. DATED: May _,2014 A. M. PECHt & ASSOCIATES LLC Albert M. Peche, Manager Title: City Manager

8 City of Grover Beach/Peche & Associates LLC AGREEMENT FOR SERVICES SCOPE OF SERVICES In performing under this Agreement, Peche & Associates LLC shall, as and when requested by the Issuer, perform the following services: 1. Review and discuss financing options, methods of sale (competitive or negotiated) and strategies with the Issuer's officials and staff. 2. Assist in the employment of a finance team for the offering and sale of the Obligations, including bond/special counsel, underwriter, trustee/paying agent/registrar, verification agent, bond rating agency(ies), insurance providers, financial printer, and other members of the financing team if required. 3. Develop a transactional budget with the Issuer. 4. Work with the underwriter to analyze potential credit support for the Obligations, including without limitation, the potential for ratings, bond insurance, letters of credit, or other credit enhancement. 5. Work with bond counsel in the development of transactional documentation. 6. Meet with the Issuer's governing body and Issuer committees, officers, professional staff and employees in authorizing and reviewing the structure of the Obligations, so as to achieve an effective result consistent with the policies, goals and objectives established by the Issuer. 7. Review of the Issuer's debt structure under the Obligations and other financial matters identified by the Issuer as they relate to the issuance of the Obligations. 8. Meet and work with the Issuer's, polling consultant, bond counsel, underwriter, and other members of the financing team as required. 9. Assist in rating agency and bond insurance provider presentations and preparation therefor. 10. Review financial and quantitative analyses prepared by the underwriter for the Issuer. 11. Coordinate such financial analyses with the underwriter (and verification agent if necessary) during the entire financing process. 12. Discuss with the Issuer's officials and staff and the underwriter the maturity and amortization schedules, redemption features, any tender features, covenants, credit enhancement, and timing of the proposed offering and sales of the Obligations to assist in determining desirable results. 13. Advise the Issuer as to market conditions. City of Grover Beach FA Contract

9 Agreement for Financial Advisory Services Scope of Services Page At the time of the offering and sale of the Obligations. discuss with the Issuer the terms of the underwriter's offer to purchase the Obligations to assist the Issuer in evaluating the offer. 15. Peche & Associates LLC will review and comment on the Issuer's Official Statement prepared by disclosure or underwriter's counsel for the Obligations offering and sale.' 16. Assemble and collate, for review, consideration and discussion by the Issuer and its legal counsel, information provided by the Issuer and other parties associated with the issuance of the Obligations for use in the Issuer's Official Statement. Peche & Associates LLC shall be entitled to assume, and shall not be responsible for, the material accuracy and completeness of such information. Peche & Associates LLC's services in assembling and collating the information is not intended to relieve the Issuer and its governing body, officers, management, and staff, or others, of any responsibilities they may have under federal and state securities laws or otherwise to provide materially accurate and complete information to investors and the market. Peche & Associates LLC does not undertake to provide legal advice to the Issuer as to any of such information or its material accuracy or completeness under the law, or otherwise.

10 Attachment 3 AGREEMENT FOR BONDillISCLOSURE COUNSEL SERVICES CITY OF GROVER BEACH GENERAL OBLIGATION BONDS THIS AGREEMENT (the "Agreement") is made and entered into this day of -=-_~' 2014, between the City of Grover Beach, whose address is 154 South Eighth Street, Grover Beach" CA (the "City"), and Nossaman LLP, a partnership including professional corporations ("Nossaman") whose address is Von Karman Ave" Ste. 1800, Irvine, California WITNE SSE TH: WHEREAS, the City proposes to finance the certain street improvements (the "Project"); and WHEREAS, Nossaman is specifically trained and experienced in the conduct of proceedings for accomplishing the financing of the Project through the preparation, sale and delivery of tax-exempt general obligation bonds for such purposes (the "Obligations"); and NOW, THEREFORE, in consideration of the covenants and premises herein contained and other good and valuable consideration, the parties hereto agree as follows: 1. Duties. Nossaman shall provide legal services in connection with the authorization, issuance, sale, execution and delivery of the Obligations (the "Transaction"). Such services shall include, but not be limited to, the following: a, Conferring and consulting with City staff and consultants regarding the scope of the Project and the financing structure, including assisting with the preparation of the ballot materials and ordinances, and with the officers, administrative staff, financial advisor, underwriter and other representatives of the City in connection with the preparation and formulation of the Transaction. b. Attendance at all meetings of the City and any administrative meetings at which the Transaction is to be discussed or otherwise deemed necessary for the proper planning of the Transaction, when requested to attend such meetings by the City. c. Preparation of the Resolution of Issuance, security documents and all other resolutions, agreements, notices and other documents necessary for the proper conduct and consummation of the Transaction, including formation of a joint powers authority. d. A review of all financial documents for legal sufficiency. e. Preparation of the official statement or disclosure document in connection with the Transaction to assure the disclosure of all material facts within the knowledge of the City. I

11 f. Preparation of an incumbency certificate, an arbitrage certificate, and any and all other closing documents required of the City to accompany delivery of the financing documents. g. Preparation of documentation and assistance in obtaining credit enhancement and/or a rating on the Obligations if such a rating is sought. h. Attendance at and supervision of the closing, and issuing the legal opinion of Nos sam an stating that the interest payments with respect to the Obligations is exempt from present Federal and State income taxes, as the case may be, and approving in all respects the legality of all proceedings for the authorization, issuance, sale and delivery of the Obligations and other agreements relating to the Transaction. i. Preparation of a transcript of the closing of the Transaction. j. Conferring and consulting with City officials and agents with regard to any problems which may arise prior to the maturity of the issuance. k. Providing any other necessary services, including ongoing monitoring of the Transaction after the sale of the Obligations and assistance to the City regarding the Transaction, generally expected of Nos sam an not listed above. 2. Compensation. For provision of the services to be rendered pursuant to this Agreement relating to the initial financing of the Project, the City shall pay Nossaman a fee not to exceed $50,000. For subsequent series of Obligations secured by ihe ad valorem tax, the City shall pay Nossaman a fee not to exceed $42,500 for each such series. Such fees shall include any out-of-pocket expenses incurred by it in the course of this engagement, such as reproduction and printing costs, word processing time, long distance telephone calls, travel at the request of the City and similar items, but excluding any publication costs. Such fees are payable only upon issuance of the related series of Obligations, and shall be paid from proceeds thereof. We will ordinarily incur various costs and expenses or will provide certain in-house services while performing legal services. The City agrees to pay for these items in addition to our fees for legal services. The costs and expenses and in-house services may include, but will not necessarily be limited to, litigation searches; out of town travel expenses; long distance telephone charges; messenger and private courier delivery charges; photocopying and other reproduction services; computerized research charges; and similar items. In the event Nossaman is requested to perform additional work outside of its normal and customary services as bond counselor disclosure counsel, such as litigation, Nossaman will be paid additional compensation therefor following the submission of monthly, itemized bills at the hourly rate of the attorney performing such services; provided, however, there shall be no additional compensation due Nossaman under the paragraph without the prior approval of the City

12 3. Assignment. This Agreement may be assigned by the City to any other issuer of the securities as may be necessary to consummate the Transaction, without the consent of but with notice to Nossaman. 4. No Guarantees; Entire Agreement. Nothing in this Agreement and nothing in our statements to you should be construed as a guarantee or promise about the outcome of the Transaction or any phase thereof. We make no such guarantees or promises. Comments about the course or outcome of the Transaction or any phase thereof which we may make from time to time are expressions of opinion only. The written Agreement constitutes the entire Agreement between the parties hereto with respect to Nossaman services and neither patty has been induced to make or enter into this Agreement by reason or promise, agreement, representation, statement or warranty other than as herein contained. 5. Other Representation. Nossaman may, from time to time, have clients with interests which may be potentially adverse to the City. Nossaman reserves the right to represent said clients except on matters directly relating to the issuance and sale of the Obligations. We will disclose any such potential conflict to you and will seek a waiver of that conflict. We will of course work with you and our other clients to construct an appropriate ethical wall to protect the confidences of all of our clients and to clearly separate our work in any such case. Although we are not asking for a waiver now since these conflicts may not emerge, we ask that you agree to give good faith consideration to our requests for any such waivers in the future. This will allow us to better serve all of our clients. 6. Work Product. Our files developed in the course of work undertaken pursuant to this Agreement are your property. We will release those files to you or to anyone else you designate upon your written request delivered to the attorney in charge of this matter. However, such a request will signify the end of this engagement if it is then still ongoing. You agree that we may, in our sole discretion, copy all or any portion of such files at your expense and retain such copies, and that we may have a reasonable period of time before releasing the documents to you or your designee in order to make the copies. We will from time to time send portions of your files that are not currently needed to an off-site storage facility. The cost of using this facility will be our sole expense. However, we are not the guarantor of the security of any off-site storage facility. Accordingly, you agree that the firm will not be responsible for any damages which may occur as a result of the loss of any of your files which we store at an off-site storage facility. You also agree that we may, after the passage of two years without our having performed any work for you pursuant to this engagement, destroy the files of this engagement without further notice to you unless you have previously provided us with written instructions to forward the files to you or to another person you designate. 7. Insurance. We carry professional liability insurance which would cover the services we will be providing under the terms of this Agreement. That insurance is subject to a self-insured retention. 3

13 8. Arbitration. Except for a claim for the City's failure to pay fees for professional services and/or expenses, if any dispute arises out of, or relates to, a claimed breach of this agreement, the professional services rendered by attorneys, or any other disagreement of any nature, type or description regardless of the facts or legal theories which may be involved, such dispute shall be resolved by binding arbitration before the Los Angeles Office of JAMS/ENDISPUTE (or similar alternative dispute resolution firm should JAMS/ENDISPUTE cease to operate), by a panel of three arbitrators. Discovery shall be permitted pursuant to the provisions of Code of Civil Procedure section Each side shall bear his/her own costs and attorneys' fees. Any dispute as to the City's failure to pay fees for professional services and/or expenses shall, subject to the provisions of Business and Professions Code sections 6200 et seq., be resolved in the appropriate Superior Court of the State of California. The party prevailing in an action regarding a dispute as to the City's failure to pay fees for professional services and/or expenses shall be entitled to recover from the other party the prevailing party's actual attorneys' fees and costs incurred, including expert witness fees, witness fees, and associated expenses, whether or not the action proceeds to judgment. For the purposes of enforcing this agreement, and as otherwise required by law, you agree that this agreement may be disclosed to a court or arbitrator. 9. Privacy Policy. Please be advised that we have adopted a privacy policy in compliance with the requirements of the Gramm-Leach-Bliley Act, a copy of which is attached to this letter. If you have any questions concerning our Privacy Policy, please contact us. 10. Notices. All notices, demands, requests, consents and approvals given, required or permitted to be given hereunder, shall be contained in writing and shall be deemed sufficiently given if sent by express delivery service or by registered or certified mail, postage prepaid and return receipt requested, addressed to the parties at the addresses set forth above or on any addendum or counterpart to this Agreement, or to such other address as the recipient shall have notified the sender of in writing. You agree to keep us currently informed of any change in your address or telephone numbers so that we may effectively communicate with you. We will also advise you promptly of any change in the firm's business address, electronic mail address, telephone or facsimile numbers. 11. California Law. This Agreement is made under and shall be construed in accordance with the substantive laws of the State of California, without reference to choice of law rules. 12. Counterparts. This Agreement may be executed in counterparts each of which shall be deemed an original but all of which shall constitute one and the same instrument. 4

14 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers and representatives thereto duly authorized, all as of the day and year first above written. NOSSAMAN LLP, a partnership including professional corporations By: Jeff A. Stava, a Partner 5

15 PRIVACY POLICY OF NOSSAMAN LLP Lawyers, as providers of certain personal services, are now required by the Gramm-Leach-Bliley Act to inform their clients of their policies regarding privacy of client information. Our law firm understands your concerns as a client for privacy and the need to ensure the privacy of all your information. Your privacy is important to us and maintaining your trust and confidence is a high priority. Lawyers have been and continue to be bound by professional standards of confidentiality that are even more stringent than those required by such Act. Therefore, we have always protected your right to privacy. The purpose of this notice is to explain, as now required by law, our Privacy Policy with regard to personal information about you that we obtain and how we keep that information secure. NONPUBLIC PERSONAL INFORMATION WE COLLECT We collect nonpublic personal information about you that is provided to us by you or obtained by us with your authorization or consent, or otherwise furnished to us in the performance of our engagement, as through discovery in litigation. WE DO NOT DISCLOSE ANY PERSONAL INFORMATION ABOUT OUR CLIENTS OR FORMER CLIENTS TO ANYONE, EXCEPT AS PERMITTED OR REQUIRED BY LAW AND ANY APPLICABLE STATE ETHICS RULES. We do not disclose any nonpublic personal information about current or former clients obtained in the course of representation of those clients, except as expressly or impliedly authorized by those clients to enable us to effectuate the purpose of our representation or as required or permitted by law or applicable provisions of codes of professional responsibility or ethical rules governing our conduct as lawyers. In that regard, California law generally provides that lawyers are absolutely required not to reveal confidential information about clients, except as authorized by the client or as compelled by law. CONFIDENTIALITY AND SECURITY We retain records relating to professional services that we provide so that we are better able to assist you with your professional needs and to comply with professional guidelines or requirements of law. In order to guard your nonpublic personal information, we maintain physical, electronic, and procedural safeguards that comply with our professional standards. 6