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10-1201_STRADLING, YOCCA, CARLSON & RAUTH _Bond Counsel AgreementBOND COUNSEL AGREEMENT THIS AGREEMENT is made and entered into this 1st day of December, 2010 by and between the City of San Juan Capistrano, hereinafter referred to as "City," and Stradling, Yocca, Carlson & Rauth, a Professional Corporation hereinafter referred to as "Consultant." RECITALS, WHEREAS, City requires professional consulting services for legal matters in connection with the execution and delivery of certificates of participation to fund the acquisition and construction of certain public water improvements described as follows: 2011 Water Revenue Certificates of Participation (for convenience of reference the "Certificates"); and WHEREAS, City desires to retain Consultant to do the necessary legal work hereinafter outlined, upon the terms and conditions hereinafter set forth, for financing the acquisition and construction of said facilities; and WHEREAS, Consultant represents that it is ready, willing and able to perform said legal work; NOW, THEREFORE, City and Consultant, .for the consideration hereinafter named, agree as follows: SECTION 1. GENERAL.. The considerations of work on the project shall be governed by the conditions contained herein. In general, the tasks delineated herein are to be performed with minimum direction and assistance from City. All work performed by Consultant, however, shall be subject to review and approval of the City by its City Manager or its designee at all times. SECTION 2. SCOPE OF TASKS BY CONSULTANT. Subject to the terms and conditions of this Agreement, Consultant shall perform the tasks as set forth in Exhibit A, attached and incorporated herein by reference. During performance of the above tasks, Consultant shall have access to existing data in City files, and City shall provide copies of any such data Consultant requests at no cost to Consultant. SECTION 3. TIME OF BEGINNING AND COMPLETION OF SERVICES. The services provided under this Agreement shall begin upon execution of this Agreement by all parties. The services provided under this Agreement shall be completed on or before certificates are closed or the project is abandoned, whichever occurs first. DOCSOC/ 1449963 v 1/022658-0028 SECTION 4. PAYMENT FOR CONSULTANT'S SERVICES. Consultant contract billings may be submitted on the consultant's forms: and, at a minimum, should contain the following: Title of project(s) Purchase order number Total approved purchase order amount: Amount paid to date Amount requested Amount remaining on purchase order Breakdown of amounts by project type or account number Bills for bond counsel services shall be submitted at the closing of the Certificates for immediate payment through the Certificate Trustee subject to approval of invoice by the City. Payment shall be made pursuant to Exhibit A attached hereto. SECTION 6. COVENANT AGAINST CONTINGENT FEES. Consultant warrants that Strad ling,.Yocca, Carlson & Rauth has not employed or retained any company or person, other than a bona fide employee working for Consultant, to solicit or secure this Agreement, that Stradling, Yocca, Carlson & Rauth has not paid or agreed to pay any company or person, other than a bona fide employee, any fee, commission, percentage, brokerage fee, gift or any. other consideration, contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, City shall have the right to annul this Agreement without liability, or, at its sole discretion, to deduct from the Agreement price or consideration, or otherwise recover the full amount of such fee, commission, percentage, brokerage fee, gift or contingent fee. SECTION 6. EXPENSES. Consultant acknowledges City is under no obligation to compensate Consultant for services rendered or expenses accrued under this Agreement in excess of the maximum compensation specified in Section 4. SECTION 7. OWNERSHIP OF DOCUMENTS. All tracings, plans, specifications, maps or other documents prepared or obtained under the terms of this Agreement shall be delivered to, and become the property of City, and basic survey notes and sketches, charts, computations and other data prepared or obtained under this Agreement shall be made available upon request to City without restriction or limitation on their use. SECTION 6. CONFLICT OF INTEREST. The designs, plans, reports, investigation, acquired by Consultant pursuant to this Ackeerrient Consultant) shall not be shown to any: other publi DOCS OCi 1449963 v 1/022658-0028 cmaterials and documents prepared or (including any duplicate copies kept by or private person or entity, except as authorized by City. Consultant shall not disclose to any other public or private person or entity any information regarding the activities of City, except as authorized by City. SECTION 9. CONFLICT OF INTEREST. For the duration of this Agreement, Consultant shall not act as consultant or perform services of any kind for any person or entity in regard to this project without the prior written consent of City. SECTION 10. CHANGES IN SCOPE OF CONSULTANT'S SERVICES. No additional fee shall be paid by City for additional consultant services not included in this Agreement without the written approval of the City prior to undertaking such work. In the event of suspension of project by City, Consultant shall have the right to renegotiate fees if delay is greater than six (6) months. SECTION 11. TERMINATION. City may, without cause, terminate this Agreement at any time prior to completion by Consultant of any of the services required hereunder. Notice of termination of this Agreement shall be given in writing to Consultant, and shall be sufficient to complete when same is deposited in the U.S. mail, first class postage prepaid. In the event this Agreement is terminated by City, Consultant shall be paid the value of services performed by it pursuant to this Agreement prior to the date of termination thereof, such value to be the total to which it shall have become entitled, as determined by the City, less the amount of any payments previously made, but in no event exceeding the maximum contract amount stated in Section 4. SECTION 12. DISPUTES. Unless otherwise specified herein, any dispute over a question of fact arising under this Agreement which cannot be resolved by .agreement between the parties may be, by mutual consent of the parties, submitted to, a. "Board of Arbitration" consisting of three (3.) arbitrators having expertise relating to this" c: ntrabt subject matter, one of whom shall be selected by each of the parties, and the third by the two members selected by the parties. Each of the parties shall pay the member selected by it, and the compensation of the third member shall be paid equally by the parties. The parties shall be bound by the decision of the Board of Arbitration. SECTION 13. NO ASSIGNMENTS. Neither any part nor all of this Agreement may be assigned or subcontracted, except as otherwise specifically provided herein, or to which City, in its sole discretion, consents to in advance thereof in writing. Any assignment or subcontracting in violation of this provision shall be void. 3 DOCSOC/ 1449963 v 1 /022658-0028 SECTION 14. ENDORSEMENT ON PLANS ETC. Consultant shall endorse all plans, data and other documentation submitted to City pursuant to this Agreement. SECTION 15. MAINTENANCE OF RECORDS. Consultant shall maintain all books, documents, papers, employee time sheets, accounting records and other evidence pertaining to costs incurred and shall make such materials available at their respective offices at all reasonable times during the contract period and for three (3) years from the date of final payment under this Agreement for inspection by City, and copies thereof shall be furnished if requested. At all times during the term of this Agreement, Consultant shall be an independent contractor and shall not be an employee of the City. City shall have the right to control Consultant only insofar as the results of Consultant's services rendered pursuant to this Agreement; however, City shall not have the right to control the means by which Consultant accomplishes services rendered pursuant to this Agreement. All persons employed to provide. services under this Agreement shall be employees or contractors of Consultant and shall not be deemed employees of City for any reason or purpose. Consultant shall be responsible far providing worker's compensation insurance coverage for all persons employed to perform services under this Agreement. SECTION 17. INDEMNITY. Consultant maintains as of the date hereof, and shall continue to maintain throughout the term of this Agreement, a policy of professional liability insurance which insures Consultant against claims which it is legally obligated to pay, in a maximum policy amount of no less than $25,000,000. No indemnity is provided by Consultant to City, but rather Consultant agrees to maintain the foregoing insurance throughout the term of Consultant's engagement with respect to the project described herein. SECTION 18. INSURANCE REQUIREMENTS. 1) Comprehensive General LiabilitL. Consultant shall maintain in full force and effect comprehensive general liability coverage, including premises operations, products/completed operations, broad form property damage and blanket contractual liability in the following minimum amounts: $500,000 property damade, $500,000 injury to one person/any one occurrence/not limited to contractual period; $1,000,000 injury to more than one person/any one occurrence/not limited to contractual period. 4 DOCSOC/I449963v 1/022658-6028 2) Comprehensive Automobile Liability_ Consultant shall maintain in full force and effect comprehensive automobile liabilitycoverage, including owned, hired and non - owned vehicles in the following minimum amounts: $500,000 property damage, $500,000 injury to one person/anyone occurrence/not limited to contractual period; $1,000,000 injury to more than one personlany one occurrence/not limited to contractual period. 3) Errors and Omissions Coverage. Consultant shall maintain in full force and effect professional errors and omissions coverage in a minimum amount of $500,000. 4) Worker's Compensation. If Consultant employs employees to perform services under this Agreement, Consultant shall obtain and .maintain, during the life of this Agreement, Worker's Compensation Employer's Liability Insurance in the statutory amount as required by state law. These policies shall not terminate,. nor' shall they be cancelled nor the coverage reduced until after 30 days' written notice is given to the City. Prior to beginning work, Consultant shall provide to City certificates of insurance establishing that the required insurance coverages have been secured by Consultant. Consultant shall provide an endorsement to City establishing that City has been legally added as an additional insured to the insurance policies required under this Agreement. SECTION 19. TIME FOR SUBMITTING PROOF OF INSURANCE. Consultant shall submit proof of insurance requirements under this Agreement to the City Clerk's office prior to beginning any work under this Agreement. Consultant shall not receive any compensation until all insurance provisions have been satisfied. SECTION 20. LICENSES PERMITS ETC. Consultant represents and warrants to City that it has all licenses, permits, qualifications and approvals of whatever nature that are legally required to practice its profession. Consultant represents and warrants to City that Consultant shall, at its sole cost and expense, keep in effect at all times during the term of this Agreement, any license, permit or approval which is legally required for Consultant to practice its profession. SECTION 21. CONSULTANT NOT AN AGENT. Except as City may specify in writing, Consultant shall have no authority, express or implied, to act on behalf of the City in any capacity as an agent. Consultant shall have no authority, express or implied, pursuant to this Agreement, to bind City to any obligation. 5 DOCSOCI1449963 v 1/022658-0028 SECTION 22. PERSONNEL. Consultant agrees to assign the following person/persons to perform the tasks set forth in the Agreement: E. Kurt Yeager and Carol L. Lew. Consultant shall not unilaterally alter the assignment of the above personnel without the authorization of the City. City shall have the unrestricted right to order the removal of any person/persons assigned by Consultant by giving oral or written notice to Consultant to such' effect. SECTION 23. NON -DISCLOSURE REQUIREMENTS/CONFLICTS OF INTEREST. Pursuant to Council policy' it ha's been; determined that the services to be rendered under the provisions of this Agreement are excluded by the requirement of filing a Financial Disclosure Statement by California Administrative Code Section 18700(2)(A) and (B). Consultant certifies that to the best of its knowledge, no City or City employee or office of any public agency interest in this Agreement has any pecuniary interest in the business of Consultant and that no person associated with Consultant has any interest that would conflict in any manner or degree with the performance of this Agreement. Consultant represents that, other than representation by Consultant from time to time of underwriting firms which may purchase the Certificates, it presently has no interest and shall not acquire any interest, direct or indirect, which could conflict in any manner or degree with the faithful performance of this Agreement. Consultant is familiar with the provisions of Government Code Section 87100 and following, and it certifies that it does not know of any fact which constitute a violation of said provisions. Consultant will advise the City if a conflict arise. SECTION 24. NOTICE. All notices shall be personally delivered or mailed to the below listed addresses, or to such other addresses as may be designated by written notice. These addresses shall be used for delivery of service of process: To City: City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Attn: Cindy Russell, Chief Financial Officer/City Treasurer To Consultant: Stradling, Yocca, Carlson and Rauth 660 Newport Center Drive, Suite 1600 Newport Beach, CA 92660 Attn: Kurt Yeager 6 DOCSOC/ 1449963 v 1 /022{ 58-€1028 IN WITNESS WHEREOF, the parties have executed this Agreement the day and year first hereinabove written. CITY OF SA JUAN CAPISTRANO By: STRADLII��, YOCCA, CARLSON & RAUTH, A PROFESSIONAL CORPORATION, CC M 7 DOC SOC/ i 449963v 1/022658-0028 SCOPE OF WORK 1. SERVICES The City retains Consultant to provide, and Consultant agrees to provide, legal services in connection with the execution and delivery of certificates (hereinafter referred to as the "Certificates") to finance certain water and sewer projects. Such services will be divided into two phases: (a) development of a financing plan; and (b) implementation of the financing plan. In the first phase -- the planning stage -- we would expect: (i) to research applicable laws including federal and state tax laws, securities laws and other laws that may be applicable to the financing structure currently proposed; (ii) to attend conferences and consult with the City/City staff (including the City Finance Director and counsel) regarding such laws, to participate with any financial advisors, underwriters, developers, lenders and other experts retained by the City in structuring the financing; and (iii) to consult with other firms active in the bond practice when necessary to ensure that any novel approaches being considered would be generally accepted in the bond community. In the second phase -- the implementation stage -- we would expect: (i) to supervise and prepare documentation of all steps to be taken through the execution and delivery of the Certificates including: a. drafting all resolutions of the City and all other basic documents relating to the security of the Certificates, in consultation with the City, its counsel and financial advisors, underwriters and other experts; b. preparing the record of proceedings for the authorization, sale and delivery of the Certificates; C. preparing documents relating to the financing, including the indenture and related resolutions; d. preparing the official statement or placement memorandum for the Certificates; e. reviewing the Bond purchase contracts or the bidding documents and participating in the related negotiations; A-3 DOCS OC:/ 1449963 v 1/022658-0028 f. attending information meetings and other conferences scheduled by the City, the financial advisors or the underwriters; g. consulting with counsel to the City concerning any legislation or litigation during the course of the financing; h. consulting with the trustee and counsel to the trustee; i. preparing the form of the Certificates, and supervising their production or printing, signing, authentication and delivery; and rendering any necessary collateral legal opinions as to the inapplicability of the registration requirements of federal securities laws and other matters related to the execution and delivery of the Certificates and City authority with respect to the financing generally. (ii) to render a final legal opinion pertaining to the Certificates to the effect that: a. the Certificates have been properly authorized and issued and are valid and binding obligations; b. the essential sources of security for the Certificates have been legally provided;. and C. all interest with respect to the Certificates is excludable from gross income for federal income tax purposes and exempt from California personal income taxation, as applicable. 2. INDIVIDUAL RESPONSIBLE FORPROVIDING SERVICES The City agrees to accept and Consultant agrees to provide the aforementioned services through E. Kurt Yeager, Brian Forbath and Carol L. Lew. Should the above attorneys be unable to provide such services due to death, disability, or similar event, Consultant reserves the right to substitute, with City's consent, another of its attorneys to provide such services, and such substitution shall not alter or affect in any way Consultant's other obligations under this agreement. A-2.. DOCSOC/ 14 4 9963 v l /022558-0£128 3. BOND FEE Basic Bond Counsel Fee: The fee for the services described in this Agreement shall be based upon the total principal amount of Certificates authorized and sold and will be computed in accordance with the following schedule: Principal Amount of Certificates Fee $1,000,000 or less $25,000 $1,000,001 to $5,000,000 $25,000 plus 114 of 1 % of the excess over $1,000,000 $5,000,001 or more $38,000 plus 1110 of 1 % of the excess over $5,000,000, in no event to exceed $58,000 Additionally, for the service of preparing the Official Statement for the Certificates, the City agrees to pay Bond Counsel for each issue of Certificates a fee of $35,000. Except as provided in Section 4 below, Consultant fees are to be billed upon the execution and delivery of the Certificates and will be payable from Bond proceeds. In the event a refunding of obligations other than the 2002 Certificates is included, the cap described above will not apply. Out -of -Pocket Expenses: In addition to the Basic Fee, Bond Counsel shall be reimbursed for out-of-pocket expenses incurred pursuant to this Agreement and hourly fees incurred pursuant to Section 4 of the Agreement. Payment of the Basic Bond Counsel Fee and Out -of -Pocket Expenses is entirely contingent upon the successful sale of the Certificates, and payment thereof is to be made from the proceeds of the Certificates. 4, FOLLOW-UP SERVICES Bond counsel agrees to provide without additional cost normal follow-up consultation and related services following the sale of the Certificates. Should the City require Consultant to provide extraordinary services after the sale of the Certificates, such services shall be provided at an additional fee to be agreed upon at a later date. A-.3 DOCSOC/ 1449953 v 1/022658-0028 32400 PASEO ADELANTO SAN JUAN CAPISTRANO, CA 92675 (949) 493-1171 (949) 493-1053 FAX www.sanjuancapistrano.org i �I Ikaff",M TO: 0 Stradling, Yocca, Carlson and Rauth Attn: Kurt Yeager 660 Newport Center Drive, Suite 1600 Newport Beach, CA 92660 DATE: February 3, 2011 1-1 FROM: Christy Jakl, Deputy City Clerk (949) 443-6310 MEMBERS OF THE CITY COUNCIL SAM ALLEVATO LAURA FREESE LARRY KRAMER DEREK REEVE JOHMTAYLOR RE: Bond Counsel Agreement — 2011 Water Revenue Certificates of Participation Thank you for maintaining documentation confirming compliance with the terms of the agreement related to insurance. Please keep in mind this documentation must remain current with our office during the term of this agreement. If you have questions related to insurance requirements, please call me at (949) 443--6310. If you have questions concerning the agreement, please contact Cindy Russell, Chief Financial Officer/Treasurer at (949) 443-6301. An original amended agreement is enclosed for your records. Cc: Cindy Russell, Chief Financial Officer/Treasurer San Juan Capistrano: Preserving the Past to Enhance the .future