DEALER MANAGER AGREEMENT. May [ ], 2009

Transcription

1 TRANSMITTAL 7 DEALER MANAGER AGREEMENT May [ ], 2009 E.J. De La Rosa & Co., Inc., As Co-Dealer Manager, Wilshire Boulevard, Suite 1650 Los Angeles, California Goldman, Sachs & Co., As Co-Dealer Manager, 85 Broad Street New York, New York Ladies and Gentlemen: The Harbor Department of the City of Los Angeles, a department of the City of Los Angeles (the Harbor Department ), plans to commence a tender offer for any and all of its outstanding $[ ] par amount Harbor Department of the City of Los Angeles Refunding Revenue Bonds, 2005 Series C-1 (AMT) (the 2005C-1 Bonds ), $[ ] par amount Harbor Department of the City of Los Angeles Refunding Revenue Bonds, 2006 Series A (AMT) (the 2006A Bonds ), $[ ] par amount Harbor Department of the City of Los Angeles Refunding Revenue Bonds, 2006 Series B (AMT) (the 2006B Bonds ) and $[ ] par amount Harbor Department of the City of Los Angeles Revenue Bonds, 2006 Series D (AMT) (the 2006D Bonds and together with the 2005C-1 Bonds, the 2006A Bonds and the 2006B Bonds, the Bonds ) (such tender offer, the Tender Offer ), upon the terms and subject to the conditions set forth in the tender offer material (the Offer Material ) which the Harbor Department has caused to be prepared and furnished to you on or prior to the date hereof for use in connection with the Tender Offer, consisting of (a) the invitation to tender, dated the date hereof (the Invitation ), (b) the letter from the Harbor Department to holders of Bonds, (c) the letter to brokers, dealers, commercial banks, trust companies and nominees, (d) the form of letter from any of them to their clients with the tendering instructions (the Instructions ) to holders set forth on the reverse thereto, and (e) any press releases or newspaper advertisements relating to the Tender Offer. Any other written offering materials and information relating to the Tender Offer that the Harbor Department may prepare or approve, including without limitation, the Preliminary Official Statement, dated May [ ], 2009 (together with any Appendices thereto, any documents incorporated therein by reference and any supplements or amendments thereto and as disseminated in its printed physical form or in electronic form in all respects materially consistent with such physical form, the Preliminary Official Statement ), shall be called Additional Material. The Preliminary Official Statement has been prepared in connection with the offering of the Harbor Department of the City of Los Angeles Refunding Revenue Bonds, 2009 Series C (the 2009C Bonds ) and contains information concerning the Harbor Department and its financial condition. The 2009C Bonds are not being offered for sale by the Invitation. LA v.4

2 1. Appointment of Co-Dealer Managers The Harbor Department hereby appoints you as exclusive co-dealer managers in connection with the Tender Offer (the Co-Dealer Managers ) and authorizes each of you to act on its behalf in accordance with this agreement and the terms of the Offer Material and Additional Material. The Harbor Department has prepared and approved the Offer Material and authorizes you and any other securities dealer or any commercial bank or trust company to use the Offer Material and Additional Material in connection with the solicitation of tenders. You agree to furnish no written material to holders of Bonds in connection with the Tender Offer other than the Offer Material and Additional Material. It is understood that nothing in this agreement nor the nature of your services shall be deemed to create a fiduciary or agency relationship between you and the Harbor Department. 2. Mailing of Offer Material The Harbor Department shall cause to be mailed to each registered holder of any Bonds and to each participant in the Depository Trust Company ( DTC ) appearing in the most recent available DTC securities position listing as a holder of Bonds (each such registered holder or participant, a Registered or Beneficial Owner ), as soon as practicable, by overnight courier or by another means of expedited delivery, copies of appropriate Offer Material and Additional Material. Thereafter, to the extent practicable until the expiration of the Tender Offer, the Harbor Department shall use its reasonable efforts to cause copies of such material to be mailed to each person who becomes a Registered or Beneficial Owner of Bonds. 3. Solicitation of Tenders (a) You agree to use your customary, reasonable efforts to solicit tenders of Bonds pursuant to the Tender Offer. You agree to perform those services as are customarily performed by investment banking institutions in connection with a tender offer of like nature, including, but not limited to, assisting the Harbor Department in the preparation of the documentation necessary to effect the transactions herein contemplated (without assuming responsibility for such documentation, unless such information has been furnished to the Harbor Department in writing by either of the Co-Dealer Managers), soliciting tenders pursuant to the Tender Offer and communicating generally regarding the Tender Offer with brokers, dealers, commercial banks, trust companies and other persons, including Registered or Beneficial Owners of the Bonds. Neither you nor any of your affiliates, nor any partners, directors, officers, agents, employees or controlling persons (if any) of you or any of your affiliates, shall have any liability to the Harbor Department or any other person for any act or omission on the part of any securities broker or dealer (other than you), commercial bank or trust company that solicits tenders, and neither you nor any of such persons or entities referred to above shall have any liability to the Harbor Department or any person asserting claims on behalf of or in right of the Harbor Department in connection with or as a result of either your engagement or any matter referred to in this agreement except to the extent that such liability results from your own gross negligence, willful misconduct or bad faith in performing the services that are the subject of this agreement. In soliciting tenders, no securities broker or dealer (other than yourselves), commercial bank or trust company shall be deemed to act as your agent or the agent of the Harbor Department, and LA v.4 2

3 you, as Co-Dealer Managers, shall not be deemed the agent of any other securities broker or dealer or of any commercial bank or trust company. (b) The Harbor Department agrees to furnish to you as many copies as you may reasonably request of the Offer Material and Additional Material in final form for use by you in connection with the Tender Offer. The Harbor Department shall not amend or supplement the Offer Material, or prepare or approve any Additional Material for use in connection with the Tender Offer, without your consent, which consent shall not be unreasonably withheld. (c) The Harbor Department agrees to advise you promptly of (i) the occurrence of any event which could cause the Harbor Department to withdraw, rescind, terminate or modify the Tender Offer or cause the Offer Material or Additional Material to contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading for purposes of the Tender Offer, (ii) any proposal or requirement to amend or supplement the Offer Material or Additional Material or (iii) any other information relating to the Tender Offer which you may from time to time reasonably request. (d) The Harbor Department will not use or publish any material in connection with the Tender Offer, or refer to you in any such material, without your consent, which consent shall not be unreasonably withheld. The Harbor Department will promptly inform you of any litigation or administrative action or claim with respect to the Tender Offer. (e) The Harbor Department agrees to furnish to you, to the extent the same is available to the Harbor Department, cards or lists or copies thereof showing the names and addresses of, and principal amount of Bonds held by, the Registered or Beneficial Owners of Bonds as of a recent date, and shall use its reasonable efforts to promptly advise you during the period of the Tender Offer as to any transfer or other changes in identity of the Registered or Beneficial Owners of Bonds. You shall, to the extent practicable, advise the Harbor Department daily as to the number and principal (or maturity) amount of Bonds that have been tendered, the offer prices of such Bonds, and the names and addresses of the Registered or Beneficial Owners thereof. You agree to use such information only in connection with the Tender Offer and not to furnish such information to any other person except in connection with the Tender Offer. (f) The Harbor Department authorizes the Co-Dealer Managers to communicate with Morrow & Co., LLC, as information agent (the Information Agent ), and DTC with respect to non-confidential matters relating to the Tender Offer. The Harbor Department shall arrange for DTC or the Information Agent to inform you during each business day during the Tender Offer (to be followed on a daily basis by written confirmation) as to the principal amount of Bonds which have been tendered pursuant to the Tender Offer during the interval since its previous report to you under this provision. 4. Compensation and Expenses (a) The Harbor Department shall pay to you, as compensation for your services as Co-Dealer Managers, a fee of $3.50 for each $1,000 principal amount of Bonds up to $100,000,000 tendered and purchased by the Harbor Department pursuant to the Tender Offer, a LA v.4 3

4 fee of $3.75 for each $1,000 principal amount of Bonds in excess of $100,000,000 up to $200,000,000 tendered and purchased by the Harbor Department pursuant to the Tender Offer and a fee of $4.00 for each $1,000 principal amount of Bonds in excess of $200,000,000 tendered and purchased by the Harbor Department pursuant to the Tender Offer. Such fee shall be payable concurrently with the payment for Bonds under the Tender Offer. (b) Whether or not any Bonds are tendered and purchased by the Harbor Department pursuant to the Tender Offer, the Harbor Department shall pay all expenses of the preparation, printing, mailing and publishing of the Offer Material and Additional Material, all reasonable fees payable to securities dealers (including yourselves), commercial banks, trust companies and nominees as reimbursement of their customary mailing and handling expenses incurred in forwarding the Offer Material and Additional Material to their customers, all reasonable fees and expenses of DTC and any information agent (including the Information Agent) engaged on behalf of the Harbor Department by either Co-Dealer Manager, and all advertising charges, any applicable transfer taxes payable in connection with the Tender Offer. If Bonds are tendered and purchased by the Harbor Department pursuant to the Tender Offer, the Harbor Department shall pay all other reasonable expenses in connection with the Tender Offer and shall reimburse you for all expenses incurred by you in connection with your services under this agreement, including, without limitation, (i) your reasonable out-of-pocket expenses and the reasonable fees and the disbursements of your outside counsel and (ii) any expenses incurred as a result of presenting testimony or evidence, or preparing to present testimony or evidence, in connection with any court or administrative proceeding arising out of the Tender Offer or in connection with any other acquisition of Bonds, except to the extent that any such expense was incurred as a result of your gross negligence, willful misconduct or bad faith in performing the services that are the subject matter of this agreement; provided, however, that the total amount of all such reasonable out-of-pocket expenses and the amount of the reasonable fees and the disbursements of your outside counsel to be reimbursed by the Harbor Department to the Co-Dealer Managers shall not exceed $20,000. In the event no Bonds are tendered and purchased by the Harbor Department pursuant to the Tender Offer, the Harbor Department shall negotiate in good faith with the Co-Dealer Managers to determine the amount of your reasonable out-of-pocket expenses and the reasonable fees and the disbursements of your outside counsel and (ii) any expenses incurred as a result of presenting testimony or evidence, or preparing to present testimony or evidence as described in the preceding sentence, if any, to be reimbursed by the Harbor Department to the Co-Dealer Managers. 5. Representations and Warranties by the Harbor Department The Harbor Department represents and warrants to, and agrees with, you that: (a) The Harbor Department is a proprietary department of the City of Los Angeles duly organized and validly existing under the Charter of the City of Los Angeles, effective on July 1, 2000, as the same may be amended or supplemented from time to time (the Charter ) and the laws of the State of California. (b) The Harbor Department has full legal right, power and authority to enter into this agreement, to authorize the making and consummation of the Tender Offer (including any related borrowings or other provisions for the payment for Bonds by the LA v.4 4

5 Harbor Department), the execution, delivery and performance of this agreement and the consummation of the transactions contemplated hereby; (c) By all necessary official action, the Harbor Department has duly authorized the making and consummation of the Tender Offer (including any related borrowings or other provisions for the payment for Bonds by the Harbor Department), the execution, delivery and performance of this agreement and the consummation of the transactions contemplated hereby and this agreement constitute the legal, valid and binding obligations of the Harbor Department, enforceable in accordance with their respective terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law). (d) The Offer Material and Additional Material comply and (as amended or supplemented, if amended or supplemented) will comply in all material respects with all applicable requirements of the federal securities laws; and the Offer Material and Additional Material do not and (as amended or supplemented, if amended or supplemented) will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. (e) The making and consummation of the Tender Offer (including any related borrowings or other provisions for the payment for Bonds by the Harbor Department), the execution, delivery and performance by the Harbor Department of this agreement and the consummation of the transactions contemplated hereby will not conflict with or constitute a breach of or default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Harbor Department is a party or to which the Harbor Department or any of its property or assets is otherwise subject. (f) Except as described in or contemplated by the Invitation to Tender, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization of, which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by the Harbor Department of its obligations in connection with the making and consummation of the Tender Offer (including any related borrowings or other provisions for the payment for Bonds by the Harbor Department), the execution, delivery and performance of this agreement or the consummation of the transactions contemplated hereby have been duly obtained. (g) Subject to the successful sale of all or a portion of the Harbor Department of the City of Los Angeles Refunding Revenue Bonds, 2009 Series C (the 2009C Bonds ), the Harbor Department has or will have available funds, and is authorized to use such funds under applicable law, to pay the full purchase price of the Bonds that it may LA v.4 5

6 become committed to purchase pursuant to the Tender Offer and all related fees and expenses. (h) Subject to the successful sale of the 2009C Bonds, the Harbor Department agrees to pay promptly, in accordance with the terms and subject to the conditions of the Offer Material and Additional Material, such full purchase price and all related fees and expenses. (i) The Harbor Department will cause to be made prior to commencement of the Tender Offer appropriate arrangements with DTC to allow for the book-entry movement of tendered Bonds between depository participants and the DTC. 6. Representations and Warranties by the Co-Dealer Managers You each represent and warrant to, and agree with, the Harbor Department that: (a) This agreement has been duly authorized, executed and delivered by the Co- Dealer Managers and constitutes its legal, valid and binding obligation, enforceable in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization and similar laws affecting creditors rights and by general principles of equity. (b) The execution, delivery and performance of this agreement by each of the Co- Dealer Managers does not and will not violate, in any material respect, any law, regulation or rule customarily applicable to the Co-Dealer Managers when acting in such capacity for transactions of this type. (c) The Standard Provisions for City Personal Services Contracts ( PSC ) applicable to this transaction are specifically enumerated in Appendix A hereto are hereby incorporated herein by reference as though fully set forth herein. (d) At all time during the Tender Offer, neither Co-Dealer Manager nor any of its affiliates shall effect any transactions in the Bonds for the purpose of raising or depressing the price of the Bonds. (e) You shall make and maintain records showing the date and time of each tender of which you have received notice, and the offer price, if any, of each tendered Bond. (f) You shall assist the Harbor Department in disseminating the Offer Material and Additional Material, but will not have any obligation to cause copies of the Offer Material and Additional Material to be transmitted generally to the Registered or Beneficial Owners of the Bonds. LA v.4 6

7 7. Conditions of Obligation Your obligation to act as Co-Dealer Managers hereunder shall at all times be subject, in your discretion, to the conditions that: (a) All representations, warranties and other statements of the Harbor Department contained herein are now, and at all times during the Tender Offer will be, true and correct. (b) The Harbor Department at all times during the Tender Offer shall have performed all of its obligations hereunder theretofore required to have been performed. (c) The City Attorney, as counsel to the Harbor Department in connection with the Tender Offer, shall have furnished to you prior to the commencement of the Tender Offer, as Co-Dealer Managers, their opinion, dated the date of the commencement of the Tender Offer, that will be substantially to the effect set forth in Appendix B hereto. 8. Miscellaneous (a) This agreement is made solely for the benefit of you, the Harbor Department and any partner, director, officer, agent, employee, controlling person or affiliate referred to in Section 8 hereof, and their respective successors, assigns, and legal representatives, and no other person shall acquire or have any right under or by virtue of this agreement. (b) In the event that any provision hereof shall be determined to be invalid or unenforceable in any respect, such determination shall not affect such provision in any other respect or any other provision hereof, which shall remain in full force and effect. (c) Except as otherwise expressly provided in this agreement, whenever notice is required by the provisions of this agreement to be given to (i) the Harbor Department, such notice shall be in writing addressed to the Harbor Department at [ ], facsimile number ([ ]) [ ]-[ ], Attention: [ ]; and (ii) you, such notice shall be in writing addressed to you, at E.J. De La Rosa & Co., Inc., [ ] and Goldman, Sachs & Co., 85 Broad Street, New York, New York 10004, facsimile number (212) , Attention: Registration Harbor Department. (d) This agreement contains the entire understanding of the parties with respect to your acting as Co-Dealer Managers for the Tender Offer, superseding any prior agreements with respect thereto and may not be modified or amended except in writing executed by the parties hereto. This agreement may be executed in any number of separate counterparts, each of which shall be an original, but all such counterparts shall together constitute one and the same agreement. (e) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. IN ANY ACTION RELATED LA v.4 7

8 TO THIS AGREEMENT, VENUE SHALL BE IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA. (f) The Co-Dealer Managers do not provide accounting, tax or legal advice. The Harbor Department is authorized, subject to applicable law, to disclose any and all aspects of this potential transaction that are necessary to support any U.S. federal income tax benefits expected to be claimed with respect to such transaction. (g) The Harbor Department acknowledges and agrees that (i) the transactions contemplated by this agreement between the Co-Dealer Managers and the Harbor Department are arm s-length commercial transactions between the Harbor Department, on the one hand, and the Co-Dealer Managers, on the other, (ii) in connection therewith and with the process leading to such transaction the Co-Dealer Managers are acting solely as a principal and not the agent (except as described in this agreement) or fiduciary of the Harbor Department, (iii) the Co- Dealer Managers have not assumed an advisory or fiduciary responsibility in favor of the Harbor Department with respect to the Tender Offer and the other transactions contemplated hereby or the process leading thereto (irrespective of whether the Co-Dealer Managers have advised or is currently advising the Harbor Department on other matters) or any other obligation to the Harbor Department except the obligations expressly set forth in this agreement and (iv) the Harbor Department has consulted its own legal and financial advisors to the extent it deemed appropriate. (h) This agreement shall terminate upon the earlier of (i) the day following the expiration, withdrawal or termination of the Tender Offer, (ii) the close of business on the day of actual receipt of written notice by the Co-Dealer Managers from the Harbor Department stating that this agreement is terminated, (iii) the close of business on the date of actual receipt of written notice by the Harbor Department from the Co-Dealer Managers stating that this agreement is terminated, (iv) the time and date on which this agreement shall be terminated by mutual consent of the parties hereto, or (v) 90 days from the date first written above, it being understood that (x) such termination shall not be deemed to terminate any of the rights or obligations of the Co-Dealer Managers or the Harbor Department previously accrued under this agreement and (y) Sections 4, 5 and 6 hereof will survive any termination of this agreement. [Remainder of this page intentionally left blank] LA v.4 8

9 TRANSMITTAL 7 Please sign and return to us a duplicate of this letter, whereupon it will become a binding agreement. Very truly yours, HARBOR DEPARTMENT OF THE CITY OF LOS ANGELES By: Board of Harbor Commissioners By: Chief Financial Officer Attest: By: Secretary Approved as to Form:, 2009 ROCKARD J. DELGADILLO, City Attorney By: Heather M. McCloskey, Deputy LA v.4 S-1

10 The undersigned hereby confirms that the foregoing letter, as of the date thereof, correctly sets forth the agreement between the Harbor Department and the undersigned. E.J. DE LA ROSA & CO., INC., as Co-Dealer Manager By: Authorized Officer By: Goldman, Sachs & Co., as Co-Dealer Manager LA v.4 S-2

11 TRANSMITTAL 7 Appendix A Standard Provisions for City Personal Services Contracts E.J. De La Rosa & Co., Inc. ( EJDLR ) and Goldman, Sachs & Co. ( GS and together with EJDLR, the Co-Dealer Managers ) agree to comply with the City of Los Angeles (the City ) requirements listed below: A. Inspections and Audits The Harbor Department of the City of Los Angeles (the Harbor Department ) or any of its duly authorized representatives, upon reasonable written notice, shall receive access, for the purposes of audit and investigation, to any and all books, documents, papers and records of the Co-Dealer Managers which pertain to the Dealer Manager Agreement. Said books, documents, papers and records must be retained by the Co-Dealer Managers for three years following final payment under the Dealer Manager Agreement. The Harbor Department agrees and acknowledges that the Co-Dealer Managers shall only be required to retain a copy of the final closing transcript for a period of no less than three years following final payment made by the Harbor Department hereunder. B. Business Tax Registration Certificate The Co-Dealer Managers represent that they have obtained and presently hold the Business Tax Registration Certificate(s) required by the City s Business Tax Ordinance (Article 1, Chapter 2, Sections and following of the Los Angeles Municipal Code). The Co-Dealer Managers will provide the Chief Financial Officer evidence that said Certificate has been obtained. The Co-Dealer Managers shall maintain, or obtain as necessary, all such Certificates required of them under said Ordinance and shall not allow any such Certificate to be revoked or suspended. The Co-Dealer Managers shall continue to remain in compliance with the City Business Tax Ordinance as it may be amended from time to time. See Exhibit A attached hereto. C. Taxpayer Identification Number ( TIN ) EJDLR declares that its authorized TIN is [ ]. GS declares that its authorized TIN is [ ]. No payments will be made under the Dealer Manager Agreement without a valid TIN. D. Prohibition Against Assignment or Delegation The Co-Dealer Managers may not, unless they have first obtained written permission of the Harbor Department: 1. Assign or otherwise alienate any of its rights under the Dealer Manager Agreement, including the right to payment; or LA v.4 Appendix A-1

12 2. Delegate, subcontract or otherwise transfer any of its obligations or duties under the Dealer Manager Agreement. E. Independent Contractor The Co-Dealer Managers shall act under the Dealer Manager Agreement as an independent contractors and not as agents or employees of the City. The Co-Dealer Managers shall not represent or otherwise hold out themselves or any of their directors, officers, partners, employees, subcontractors or agents to be an agents or employees of the City. F. Affirmative Action The Co-Dealer Managers agree to comply with Section and of the Los Angeles Administrative Code relating to nondiscrimination and affirmative action. G. Small Business Development Program It is the policy of the City to provide Small, Local Business Enterprises (SBEs), Minority-Owned Business Enterprises (MBEs), Women-Owned Business Enterprises (WBEs) and all Other Business Enterprises (OBEs) an equal opportunity to participate in the performance of all City contracts in all areas where such contracts afford such participation opportunities. The Co-Dealer Managers shall assist the Harbor Department in implementing this policy and shall use their best efforts to afford the opportunity for SBEs, MBEs, WBEs and OBEs to achieve participation in subcontracts where such participation opportunities present themselves and attempt to ensure that all available business enterprises, including SBEs, MBEs, WBEs and OBEs have equal participation opportunities which might be presented under the Dealer Manager Agreement. See Exhibit B attached hereto. NOTE: Prior to being awarded a contract with the Harbor Department, the Co-Dealer Managers and all subconsultants must be registered with the Department s Contract Management Database, e-diversityxchange. You can register by going to and clicking on the business link. H. Service Contractor Worker Retention Policy and Living Wage Policy Requirements. The Board of Harbor Commissioners of the City of Los Angeles adopted Resolution No on January 13, 1999, agreeing to adopt the provisions of Los Angeles City Ordinance No relating to Service Contractor Worker Retention (SCWR), Section et seq. of the Los Angeles Administrative Code, as the policy of the Harbor Department. Further, Charter Section 378 requires compliance with the City s Living Wage requirements as set forth by ordinance, Section et seq. of the Los Angeles Administrative Code. The Co-Dealer Managers shall comply with the policy whenever applicable. Violation of this provision, where applicable, shall entitle the Harbor Department to terminate the Dealer Manager Agreement and otherwise pursue legal remedies that may be available. See Exhibit C attached hereto. LA v.4 Appendix A-2

13 I. Equal Benefits The Co-Dealer Managers agree to comply with Los Angeles Administrative Code Section related to providing equal benefits to their employees with spouses and their employees with domestic partners. J. Professional Liability Insurance Each Co-Dealer Manager certifies that it now has professional liability insurance in the amount of One Million Dollars ($1,000,000) (the Coverage Amount ) which covers the services performed pursuant to the Dealer Manager Agreement, and that it will expend every reasonable effort to keep such insurance or its equivalent in effect at all times during performance of the Dealer Manager Agreement and until two (2) years following acceptance of the completed services. Two (2) executed copies of the Special Endorsement, Exhibit D attached to the Dealer Manager Agreement and made a part of it shall be filed with the Harbor Department s Executive Director. Alternatively, subject to approval by the City Attorney of the City, a Co-Dealer Manager may comply with this provision by filing with the Harbor Department s Executive Director (1) a letter certifying that it is self-insured up to the Coverage Amount and (2) current financial statements. K. Construction of Provisions and Title and Joint & Several Co-Dealer Manager Obligations All titles or subtitles appearing in the Dealer Manager Agreement have been inserted for convenience and shall not be deemed to affect the meaning or construction of any of the terms or provisions thereof. The language of the Dealer Manager Agreement shall be construed according to its fair meaning and not strictly for or against the City or the Co-Dealer Managers. The singular shall include the plural. Use of the masculine, feminine or neuter genders shall be deemed to include the genders not used. The Co-Dealer Managers obligations and liabilities under the Dealer Manager Agreement shall be joint and several. L. Confidential Information All information provided to the Co-Dealer Managers by the City shall be considered confidential unless such information is released to the public by the City or is otherwise available as provided by law. M. Conflict of Interest It is hereby understood and agreed that the parties to the Dealer Manager Agreement have read and are aware of the provisions of Section 1090 et seq. and Section et seq. of the Government Code relating to conflict of interest of public officers and employees, as well as the Los Angeles Municipal Code Municipal Ethics and Conflict of Interest provisions of Section et seq. and Conflict of Interest Code of the City and Harbor Department. All parties to the Dealer Manager Agreement agree that they are unaware of any financial or economic interest of any public officer or employee of the City relating to the Dealer Manager Agreement. Notwithstanding any other provision of the Dealer Manager Agreement, it is further understood and agreed that if such a financial interest does exist at the inception of the Dealer LA v.4 Appendix A-3

14 Manager Agreement, the Harbor Department may immediately terminate the Dealer Manager Agreement by giving written notice thereof. N. Compliance With Laws; Governing Law The Co-Dealer Managers shall abide by and obey all applicable federal, State of California and City laws including, but not limited to, the nondiscrimination and affirmative action provisions of the laws of the United States of America, the State of California and the City of Los Angeles. The Dealer Manager Agreement shall be governed by, and construed in accordance with, the laws of the State of California, and the Co-Dealer Managers shall stipulate that in any action related to the Dealer Manager Agreement, venue shall be in the County of Los Angeles, State of California. O. Workers Compensation Each Co-Dealer Manager certifies that it is aware of the provisions of Section 3700 of the California Labor Code which requires every employer to be insured against liability for Workers Compensation or to undertake self-insurance in accordance with the provisions of that Code, and that such Co-Dealer Manager shall comply with such provisions before commencing the performance of the tasks under the Dealer Manager Agreement. Each Co-Dealer Manager shall submit Workers Compensation policies, whether underwritten by the state insurance fund or private carrier, which provide that the public or private carrier waives its right of subrogation against the City in any circumstance in which it is alleged that actions or omissions of the City contributed to the accident. See Exhibit E. P. Wage and Earnings Assignment Orders/Notices of Assignments The Co-Dealer Managers are obligated to fully comply with all applicable state and federal employment reporting requirements for the Co-Dealer Managers employees. Each Co-Dealer Manager certifies that its principal owner(s) are in compliance with any Wage and Earnings Assignment Orders and Notices of Assignments applicable to them personally. The Co-Dealer Managers will fully comply with all lawfully served Wage and Earnings Assignment Orders and Notices of Assignments in accordance with Cal. Family Code Section 5230 et seq. The Co-Dealer Managers will maintain such compliance throughout the term of the Dealer Manager Agreement. LA v.4 Appendix A-4

15 TRANSMITTAL 7 Exhibit A to Appendix A Copies of Business Tax Registration Certificate(s) required by the City s Business Tax Ordinance are attached hereto. LA v.4 Exhibit A-1 to Appendix A

16 TRANSMITTAL 7 Exhibit B to Appendix A Declarations of Compliance With Small Business Development Program are attached hereto. LA v.4 Exhibit B-1 to Appendix A

17 TRANSMITTAL 7 Exhibit C to Appendix A Declarations of Compliance With Service Contractor Worker Retention Ordinance and Living Wage Ordinance are attached hereto. LA v.4 Exhibit C-1 to Appendix A

18 TRANSMITTAL 7 Exhibit D to Appendix A Copies of Special Endorsement(s) (or Letters re: Self-Insurance and Current Financial Statements) are attached hereto. LA v.4 Exhibit D-1 to Appendix A

19 TRANSMITTAL 7 Exhibit E to Appendix A Copies of Special Endorsements are attached hereto. LA v.4 Exhibit E-1 to Appendix A

20 TRANSMITTAL 7 Appendix B May [ ], 2009 E.J. De La Rosa & Co., Inc., As Co-Dealer Manager, Wilshire Boulevard, Suite 1650 Los Angeles, California Goldman, Sachs & Co., As Co-Dealer Manager 85 Broad Street New York, New York Ladies and Gentlemen: As Deputy City Attorney for the City of Los Angeles (the City ) in connection with the commencement of a tender offer by the Harbor Department of the City of Los Angeles (the Harbor Department ) for any and all of its outstanding $[ ] par amount Harbor Department of the City of Los Angeles Refunding Revenue Bonds, 2005 Series C-1 (AMT) (the 2005C-1 Bonds ), $[ ] par amount Harbor Department of the City of Los Angeles Refunding Revenue Bonds, 2006 Series A (AMT) (the 2006A Bonds ), $[ ] par amount Harbor Department of the City of Los Angeles Refunding Revenue Bonds, 2006 Series B (AMT) (the 2006B Bonds ) and $[ ] par amount Harbor Department of the City of Los Angeles Revenue Bonds, 2006 Series D (AMT) (the 2006D Bonds and together with the 2005C-1 Bonds, the 2006A Bonds and the 2006B Bonds, the Bonds ) (such tender offer, the Tender Offer ), upon the terms and subject to the conditions set forth in, I have examined: (i) the Dealer Manager Agreement, dated May [ ], 2009, by and between the Harbor Department and E.J. De La Rosa & Co., Inc. and Goldman, Sachs & Co., as Co-Dealer Managers; and (ii) the Offer Material and Additional Material described in the Dealer Manager Agreement, and I have made such other investigations of law and fact as I have deemed necessary to render the following opinion. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Dealer Manager Agreement. On the basis of the foregoing examination and my consideration of such questions of law as I have deemed relevant in the circumstances, I am of the opinion that: 1. The Harbor Department is a proprietary department of the City of Los Angeles duly organized and validly existing under the Charter of the City of Los Angeles, effective on July 1, 2000, as the same may be amended or supplemented from time to time (the Charter ) and the laws of the State of California, and has full legal right, power and authority to execute and deliver, and to perform its obligations under, the Dealer Manager Agreement. 2. The Harbor Department has full legal right, power and authority to authorize the Tender Offer and to enter into the Dealer Manager Agreement. LA v.4 Appendix B-1

21 3. By official action of the Harbor Department prior to or concurrently with the date hereof, the Harbor Department has duly authorized and approved the Tender Offer and the execution and delivery and adoption of, and the performance by the Harbor Department of its obligations contained in, the Dealer Manager Agreement. 4. The Dealer Manager Agreement has been duly authorized, executed and delivered by the Harbor Department, and upon due execution and delivery, the Dealer Manager Agreement will constitute, the legal, valid and binding obligations of the Harbor Department, enforceable against the Harbor Department in accordance with its terms, except to the extent that the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws of general applicability affecting the enforcement of creditors rights, by the general principles of equity, regardless of whether such enforceability is considered in equity or at law, and by the limitations on legal remedies against public entities in the State of California. 5. The making and consummation of the Tender Offer (including any related borrowings or other provisions for the payment for Bonds by the Harbor Department) and the execution and delivery by the Harbor Department of the Dealer Manager Agreement, and compliance by the Harbor Department with the provisions contained therein does not and will not conflict with or constitute a material breach of or material default or event of default under any constitutional provision, law, administrative regulation, judgment or decree or any provision of any loan agreement, indenture, bond, note, resolution, agreement or other instrument known to me after reasonable inquiry to which the Harbor Department is a party or to which the Harbor Department or any of its property or assets otherwise is or will be subject. 6. To the best of our knowledge (after reasonable investigation), no consent, approval, authorization or order of, or registration, qualification or filing with, any court or regulatory authority or other governmental agency or instrumentality is required by the Harbor Department in connection with the making and consummation of the Tender Offer (including the payment for Bonds by the Harbor Department) and the execution, delivery or performance of the Dealer Manager Agreement; provided, however, that no opinion is given concerning compliance with federal or state securities laws or tax laws or the Blue Sky Laws of any state. This letter is for the sole benefit of the addressees and is not to be used, circulated, quoted or otherwise referred to for any purpose other than in connection with the making and consummation of the Tender Offer. No other person, firm, corporation or other entity may rely on this letter without our prior written consent. We do not undertake, and expressly disclaim, any obligation to amend or supplement this opinion as facts and circumstances come to our attention, or changes in law occur, after the date hereof which could affect such opinion. This opinion is given in an official capacity and not personally and no personal liability shall derive herefrom. LA v.4 A-2