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FINANCIAL ADVISOR SERVICE AGREEMENT (2) .' " Financial Advisor Service Agree,ment THIS AGREEMENT made this ~ day of ~ 2003 by and between the City of Clearwater, P.O. Box 4748, Clearwater, Flo{1da 33758, hereinafter referred to as the "City", party of the first part, and William R. Hough & Co., 100 Second Avenue South, Suite 800, St. Petersburg, Florida 33701, herein after referred to as the "Financial Advisor", party of the second part; WITNESSETH: WHEREAS, the City has determined that there is a periodic need to review capital projects within the City; and WHEREAS, the City has determined that external funding may be required for these projects; and WHEREAS, the City has determined that the most feasible method of securing the required funds is through obtaining funds from various financial markets; and WHEREAS, a qualified financial advisor is required to assist in the preparation of plans, studies, analysis and recommendations to market the financial plans; and WHEREAS, the City issued Request for Proposal 16-03 to perform the required services described herein WHEREAS, Banc of America, who currently performs the requested services, contract will expire on June 21,2003 NOW, THEREFORE, the City and Financial Advisor agree to the terms and conditions stated as follows: SERVICES TO BE PERFORMED BY THE FINANCIAL ADVISOR: The Financial Advisor hereby agrees to perform the services described in RFP 16-03 Financial Advisor Services in connection with authorization, sale and delivery of financial arrangements on behalf of City's capital needs subject to the conditions and in consideration of payments as hereinafter set forth. The required services include, but are not limited to, the following: 1. Review exiting debt structure and financial resources to determine available borrowing capacity and refinancing options. 2. Recommend appropriate financial structure for proposed projects. 3. Assist the City with the preparation of cash flow forecasts for proposed issues, addressing debt service requirements and funding sources. 4. Provide advice on terms and features of bonds, timing and marketing of bond issues, market conditions as they relate to future sales, and prices of outstanding bonds. 0;;;',- ~ -.).~- 00 (I) 5. Advise on benefits of negotiated versus competitive bid sales for each issue and assist in dealings with designated underwriter and legal counsel. 6. Assist the City in preparation of an official statement in conjunction with bond counsel and the City. 7. Arrange for the widest possible distribution of the official statement to bond underwriters and potential investors. 8. Consult, as needed, with the City staff regarding various financing options or concerns. 9. Assist the City in obtaining the highest possible credit ranking. 10. Assist with bid opening or negotiated sale with underwriter, as applicable, to advise on recommendation on acceptability of preferred offer. 11. Assist with bond closings and coordinate printing, signing, and delivery of bonds. 12. Assist in selecting paying agents and other financial intermediaries as necessary. 13. Advise the City on proposed and actual changes in tax laws and financial market developments that could affect City bond financing plans. 14. Attend City Commission meetings and other scheduled City meetings as requested, with reasonable advance notice. 15. Provide expert testimony at validation hearings. FEES PAID TO FINANCAL ADVISOR FOR SERVICES: The Financial Advisor's fee shall be as follows: 1. Work directly related to bond issues: The Financial Advisor shall be paid at closing in accordance with the following schedule: Par Amount of Bonds Issued Fee Per $1,000 $0 - $20,000,000 next $20,000,000 next $20,000,000 $60,000,001 - above $1.00 $0.90 $0.75 $0.50 A minimum transaction fee of $15,000 shall be charged in connection with any financing. A $5,000 surcharge shall apply for any competitive sales and refunding bond issued. 2. Work not directly related to a bond issue: The Financial Advisor shall be compensated for all non-bond issue related work as follows: Senior Vice President and First Vice President Vice President Assistant Vice President and Financial Analyst Support Staff $185 per hour $150 per hour $11 0 per hour No Charge Expenses shall not exceed $2,000 per project without the prior approval of the City. COSTS PAID BY THE CITY: The City agrees to pay all costs of the bond issue, including but not limited to: fees for attorneys of the City, fee of Bond Counsel, rating agency fees, insurance costs, printing costs of the City, printing cost of the Bonds and the Official Statement, advertising costs, traveling expenses of Officials of the City, and out- of state traveling expenses ofthe Financial Advisor. GENERAL CONDITIONS: A. Financial Advisor agrees not to participate, either directly or indirectly, as an underwriter in the sale of any Bond issued by the City. It is agreed that the Financial Advisor may, however, purchase or sell any of such Bonds in the secondary market after the expiration of the underwriting period. B. Should financing not be obtained, the City shall not be financially obligated to the Financial Advisor except as to reimbursement of such expenses as may be hereinafter approved by the City prior to their being incurred. C. Should, in the course of performing services described in this Agreement, the City determines that additional work products are desired of the Financial Advisor, and should the Financial Advisor accept such assignments, then this Agreement may be amended in writing as mutually acceptable to the parties to provide for accomplishment of such additional work products and the basis of payment therefore. D. This Agreement shall be in full force and effect for a period of one year from the date of execution hereof provided, however, that the City shall have the option, at any time during this period and with its sole discretion to terminate this Agreement, said termination to be effective upon receipt by the Financial Advisor of written notice at least ninety (90) days prior to any such termination. The City will have the option to extend this contract for up to two one-year periods at its sole discretion under the same terms and conditions stated herein. E. In the event that Kevin Conitz, Senior Vice President, should either leave Financial Advisor or be permanently unavailable to assist the City when requested, the City may request a renegotiation of terms of this Agreement or may, at its sole option, terminate this agreement by giving written notice at least ten (10) days prior to such termination. Upon termination, the City shall have no further obligation to the Financial Advisor for any services. F. This agreement embodies the whole agreement of the parties. There are no promises, terms, conditions or obligations other than those contained herein; and this Agreement shall supersede all previous communications, representations of agreements, either verbal or written, between the parties hereto. G. Financial Advisor agrees to protect, defend, indemnify and hold the City and its officers & employees harmless from and against any and all losses, penalties, damages, settlements, costs, charges, professional fees or other expenses arising out of or due to any grossly negligent act or omission of the Financial Advisor, or its employees or agents. Financial Advisor shall procure and maintain professional liability insurance in an amount necessary to protect the City for all services performed during the life of this agreement. H. Financial Advisor agrees to transfer or assign to the City upon request, documents, financial analysis, correspondence and memos produced by the Financial Advisor for the benefit of the City. 1. In the event either party seeks to enforce this agreement, then both parties agree that the prevailing party shall be entitled to attorney fees and costs and that such enforcement shall be in a court of competent jurisdiction in Pinellas County, Florida. IN WITNESS WHEREOF, the parties hereto have set their hands and seal the day and year first above written: Countersigned: lit- ~ ~ B 'anJ ~un st 0 Mayor-Commissioner CITY OF CLEARWATER, B~'~7C William B. Home, II City Manager Approved as to form: Attest: flJk j Pamela K. Akin ~tswM City Attorney ~ l W..Qoq.. Cynthia E. -d-oudeau City Clerk. Witnesses: William R. Hough & Co. \~ "-- L- - By: ~ ~~A/ Attest: ~ ~ A..s.S \--. So ~.