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FINANCIAL ADVISOR SERVICE AGREEMENTFinancial Advisor Service Agreement THIS AGREEMENT made effective as of the / 'day of l'rht,.c 2, , 201L by and between the City of Clearwater, P.O. Box 4748, Clearwater, Florida 33758, hereinafter referred to as the "City", and Public Resources Advisory Group, Inc., 150 Second Avenue North, Suite 400, St. Petersburg, Florida 33701, hereinafter referred to as the "PRAG"; 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 11-19 to perform the required services described herein for a five-year period; and WHEREAS, the City has determined that they will utilize two financial advisory firms, one of which is PRAG NOW, THEREFORE, the City and PRAG agree to the terms and conditions stated as follows: SERVICES TO BE PERFORMED BY PRAG: PRAG hereby agrees to perform the services described in RFP 11-19 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: a. Review existing debt structure and financial resources to determine available borrowing capacity and refinancing options. b. Recommend appropriate financial structure for proposed projects. c. Assist the City with the preparation of cash flow forecasts for proposed issues, addressing debt service requirements and funding sources. d. 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. e. Advise on benefits of negotiated versus competitive bid sales for each issue and assist in dealings with designated underwriter and legal counsel. f. Assist the City in preparation of a Preliminary Official Statement and Official Statement in conjunction with bond counsel, disclosure counsel and the City. g. Consult, as needed, with the City staff regarding various financing options or concerns. h. Assist the City in obtaining the highest possible credit rating(s). i. Assist with bid opening or negotiated sale with under\writer, as applicable, to advise on recommendation on acceptability of preferred offer. j. Assist the City with monitoring the progress of a negotiated sale on the day of pricing, and as applicable, advise regarding market conditions and acceptability of the offer. k. Assist with bond pre -closings and closings, including coordinating printing, signing, and delivery of bonds. 1. Assist in selecting paying agents and other financial intermediaries, as necessary. m. Advise the City on proposed and actual changes in tax laws and financial market developments that could affect City bond financing plans. n. Attend City Council meetings and other scheduled City meetings as requested, with reasonable advance notice. o. Provide expert testimony at validation hearings. Additional financial advisory services can be performed by PRAG but must be mutually agreed upon in writing prior to the commencement of such services. FEES PAID TO PRAG FOR SERVICES: PRAG's fee shall be as follows: Work Directly Related to Bond Issues or Bank Loans: PRAG shall be paid at closing in accordance with the following schedule: Minimum fee — bond issue $20,000 Minimum fee — bank loan $15,000 Fee per bond First $25 million $0.90 $25 million - $50 million $0.75 $50 million - $100 million $0.65 Over $100 million $0.40 Work Not Directly Related to Bond Issues: PRAG shall be compensated for all non -bond issue related work as follows: Title Hourly Rate Senior Managing Director $275 Managing Director $200 Vice President $180 Assistant Vice President/Associate $150 Fees for consulting services will be invoiced monthly. PRAG bills in quarter hour increments. 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, fee of disclosure counsel, rating agency fees, bond insurance fees, printing costs of the City, printing cost of the Preliminary Official Statement, the Official Statement and all financing related documents, advertising costs, travel expenses of Officials of the City, and travel expenses of PRAG. GENERAL CONDITIONS: a. PRAG is not a broker-dealer and cannot participate as an underwriter in the sale of any Bond issued by the City. b. Unless otherwise determined by the City, should financing not be obtained, the City shall not be financially obligated to pay PRAG except as to reimbursement of such expenses as provided herein and such expenses as may be hereinafter approved by the City prior to their being incurred. c. If, in the course of performing services described in this Agreement, the City determine that additional work products are desired of PRAG, and if PRAG accepts 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 payments, therefore. d. This Agreement shall be in full force and effect for a period of five years from the date of contract; however, that each of the City and PRAG 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 non -terminating party of written notice at least ninety (90) days prior to any such termination. e. PRAG agrees to assist the City as provided only on the basis that it is expressly understood and agreed that PRAG assumes no responsibility to the City or any person for the accuracy or completeness of any information contained in any Preliminary Official Statement or Official Statement issued in connection with the City's financings. 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. PRAG 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 PRAG, or its employees or agents. PRAG shall procure and maintain professional liability insurance with respect to the services performed during the life of this agreement. h. PRAG agrees to transfer or assign to the City upon request, documents, financial analysis, correspondence and memos produced by PRAG for the benefit of the City. REGULATORY MATTERS: City's Obligations. The City agrees that its staff and consultants will cooperate with the Financial Advisor and make available any data in the possession of the City necessary to perform financial advisory services and regulatory obligations as described in Exhibit A to this agreement. PRAG's Obligations. MSRB Rule G-42 requires that a municipal advisor provide its client with certain written disclosures. Please see Exhibit A to this agreement for those disclosures. Authority to Direct PRAG. The following City individuals have the authority to direct PRAG's performance of its scope of work under this agreement: Jay Ravins, Finance Director Monica Mitchell, Assistant Finance Director Clement Vericker, Debt Manager IN WITNESS WHEREOF, the parties hereto have set their hands and seal the day and year first above written: Countersigned: CITY OF CLEARWATER, FLORIDA —ceo4en cPc\. o; Mayor Approved as to form: Jissistit City Attorney Witnesses: // City Manager Public Resources Advisory Group, Inc. By: Exhibit A Required Disclosure Pursuant to MSRB Rule G-42 1. Scope of Services (a) Services to be provided: The scope of services with respect to PRAG's engagement with the City (the "Scope of Services") are as described in the attached Agreement. 2. Term. We understand that our engagement will be for a term of five years from the date of its execution and that our engagement may be terminated with or without cause by either party. In case of any termination, we believe that the terminating party should endeavor to provide reasonable notice of such termination to the other party so as to permit an orderly transition. 3. Municipal Advisor's Regulatory Duties When Servicing the City. MSRB Rule G-42 requires that PRAG make a reasonable inquiry as to the facts that are relevant to the City's determination whether to proceed with a course of action or that form the basis for the advice provided by PRAG to the City with respect to municipal financial products or the issuance of municipal securities, including with respect to the structure, timing, terms, and other similar matters concerning such financial products or issues, based on all the facts and circumstances. The rule also requires that PRAG undertake a reasonable investigation to determine that it is not basing any recommendation on materially inaccurate or incomplete information. PRAG is also required under the rule to use reasonable diligence to know the essential facts about the City and the authority of each person acting on the City's behalf. Accordingly, PRAG will seek the City's assistance and cooperation, and the assistance and cooperation of the City's agents, with the carrying of these regulatory duties, including providing to PRAG accurate and complete information and reasonable access to relevant documents, other information and personnel needed to fulfill such duties. In addition, if the City provides direction to PRAG to review a recommendation made by a third party, PRAG requests that the City provide any information it has received from such third party relating to its recommendation. 4. Compensation. The form and basis of compensation for PRAG's services is set forth in the Agreement. 5. Disclosures of Conflicts of Interest. MSRB Rule G-42 requires that municipal advisors provide to their clients disclosures relating to any actual or potential material conflicts of interest, including certain categories of potential conflicts of interest identified in Rule G-42, if applicable. Accordingly, PRAG makes the following disclosures with respect to material conflicts of interest in connection with the Scope of Services under this Agreement, together with explanations of how PRAG addresses or intends to manage or mitigate each conflict. With respect to all of the conflicts disclosed below, PRAG mitigates such conflicts through its adherence to its fiduciary duty to the City, which includes a duty of loyalty to the City in performing all municipal advisory activities for the City. This duty of loyalty obligates PRAG to deal honestly and with the utmost good faith with the City and to act in the City's best interests without regard to PRAG's financial or other interests. (a) Compensation -Based Conflicts: The fees due under this Agreement will be contingent upon the successful closing of a transaction and is based on the size of a transaction. While this form of compensation is customary in the municipal securities market, this may present a potential conflict of interest because it could create an incentive for PRAG to recommend unnecessary financings or financings that are disadvantageous to the City or to advise the City to increase the size of the issue. (b) Other Municipal Advisor Relationships: PRAG serves a wide variety of other clients that may from time to time have interests that could have a direct or indirect impact on the interests of the City. For example, PRAG serves as municipal advisor to other municipal advisory clients , including Pinellas County and, in such cases, owes a regulatory duty to such other clients just as it does to the City under this Agreement. These other clients may, from time to time and depending on the specific circumstances, have competing interests. In acting in the interests of its various clients, PRAG could potentially face a conflict of interest arising from these competing client interests. As municipal advisor to Pinellas County we have been asked to provide information about the financing of spring training facilities in the State of Florida so that Pinellas County staff and the Board of County Commissioners have that information as they review the City's request for funding from the County. We are not currently advising the City in connection with this request. 6. Disclosures of Information Regarding Legal Events and Disciplinary History. MSRB Rule G-42 requires that municipal advisors provide to their clients certain disclosures of legal events or disciplinary history material to its client's evaluation of the municipal advisor or the integrity of the municipal advisor's management or advisory personnel. Accordingly, PRAG sets out below required disclosures and related information in connection with such disclosures. There are no legal events or disciplinary history that are material to the City's evaluation of PRAG or the integrity of PRAG's management or advisory personnel disclosed, or that should be disclosed, on any Form MA and Form MA -I filed with the SEC. The City may electronically access PRAG's most recent Form MA and each of our most recent Form MA -I filed with the SEC at the following website: www.sec.gov/edgar/searchedgar/companysearch.html. PRAG has not made any material, legal or disciplinary event disclosures on Form MA or any Form MA -I filed with the SEC. 7. Future Supplemental Disclosures. As required by MSRB Rule G-42, this disclosure may be supplemented or amended, from time to time as necessary, to reflect changed circumstances resulting in new conflicts of interest or changes in the conflicts of interest described above, or to provide updated information with regard to any legal or disciplinary events of PRAG. PRAG will provide the City with Exhibit A-1 Required Disclosure Pursuant to MSRB Rule G-10 Public Resources Advisory Group, Inc. is currently registered as a Municipal Advisor with the U.S. Securities and Exchange Commission and the Municipal Securities Rulemaking Board ("MSRB"). As a Municipal Advisor, we are required to provide the following written information to our municipal entity and obligated person clients in accordance with MSRB Rule G-10: The MSRB website at www.msrb.org, includes the Municipal Advisory client brochure that describes the protections that may be provided by the MSRB Rules and how to file a complaint with an appropriate regulatory authority.