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BOND COUNSEL SERVICE CONTRACT THIS CONTRACT is made on 't(f- , 1999, between the CITY OF MOSCOW, a municipal corporation, (the "City"), Latah County, Idaho, acting by and through its authorized officers and WETZEL & WETZEL, P.L.L.C., 1322 W. Kathleen Avenue, Suite 2, Coeur d'Alene, Idaho, 83815 ("Bond Counsel"). Section 1: PURPOSE OF EMPLOYMENT The City hereby employs Bond Counsel to perform and render legal assistance and advice relative to the Judicial Confirmation of and the authorization, issuance, sale and delivery of revenue bonds (the "Bonds") of the City for improvement to the wastewater treatment plant of the City. Section 2: BOND COUNSEL SERVICES TAX EXEMPT FINANCING Bond Counsel shall be primarily responsible for rendering the following legal services: 2.1. Advise the City concerning the legal requirements applicable to authorizing certain tax-exempt financing to pay for the costs and expenses of the acquisitions and improvements to the wastewater treatment plant of the City. 2.2. Provide representation of Bond Counsel at appropriate public meetings held by the City in connection with the issuance and sale of the Bonds, when so directed by the City. 2.3. Prepare routine ordinances, resolutions, notices and other legal documents necessary for the proper conduct of proceedings for the authorization of tax-exempt financing. 2.4. Advise with respect to notices of hearing and the conduct of hearings, if any, as required by law. 2.5. Supervise the printing and delivery of the Bonds to purchaser and prepare all necessary closing documents. 2.6. Assemble and examine a transcript concerning all proceedings taken in connection with the issuance and sale of the Bonds. 2.7. Upon completion of the proceedings to Bond Counsel's satisfaction, BOND SERVICE CONTRACT PAGE -1 99-29 ---PAGE BREAK--- Section 3: provide its legal opinion stating that all proceedings had for the authorization and issuance of Bonds are lawful and valid, that the Bonds are valid and lawful special obligations of the City, and that interest on the Bonds is excluded from gross income for the purpose of federal and State of Idaho income taxation. BOND COUNSEL SERVICES JUDICIAL CONFIRMATION Bond Counsel shall be primarily responsible for drafting the pleadings required to seek a Judicial Confirmation that the debt instrument is an ordinary and necessary expense of the City within the meaning of Article 8, Section 3 of the Idaho Constitution for which no approving vote of the electorate is required. Bond Counsel shall be responsible for providing the following legal service: 3.1 Advising the City concerning the legal requirements applicable to the judicial confirmation process. 3.2 Providing representation of Bond Counsel at appropriate public hearings held in connection with the judicial confirmation process. 3.3 Prepare all notices of hearings and advise with respect to conduct of hearings required under the judicial conformation process. 3.4 Prepare all pleadings, affidavits and findings necessary to conclude the judicial confirmation process. 3.5 Attend the court hearings required for the presentation of the Petition for Judicial Confirmation. Section 4: COM PEN SA TION 4.1. For rendering the services set forth in Section 2 hereof, Bond Counsel shall receive from the City compensation in the amount of TEN THOUSAND FIVE HUNDRED DOLLARS ($10,500). Said compensation may be paid solely from the proceeds of the tax exempt financing, when available, and may be due following execution by the City of available, and may be due following execution by the City of the tax-exempt financing. In the event that the project is abandoned, Bond Counsel will be reimbursed only at the hourly rate not to exceed a cap of THREE HUNDRED DOLLARS ($300) and for direct expenses incurred and appropriately documented. BOND SERVICE CONTRACT PAGE-2 ---PAGE BREAK--- 4.2. If interim financing is arranged by Bond Counsel to the extent that an opinion is rendered, Bond Counsel shall receive an additional FIVE THOUSAND DOLLARS ($5,000) compensation, due and payable form the proceeds of such interim financing, when available. 4.3. If the City secured insurance for the Bond issue and additional certificates and documentation, which may include additional opinions rendered by Bond Counsel, then Bond Counsel shall receive additional compensation in the amount of ONE THOUSAND DOLLARS ($1,000). 4.4. For rendering the service set forth in Section hereof, Bond Counsel shall receive from the City the following: For drafting the authorizing resolution and fining a Petition of Judicial Confirmation including supporting Brief and Affidavit, and attending one court hearing, Bond Counsel shall receive SEVEN THOUSAND FIVE HUNDRED DOLLARS ($7,500). Said compensation shall be due at the completion of the Judicial Confirmation proceedings. For representation of the City in any appeal or other additional court action that may be required because the Petition is contested the City shall compensate Bond Counsel for legal services provided at an hourly rate of $150 per hour. Said compensation shall be due 4.5. Bond Counsel shall also be reimbursed for direct out-of-pocket expenses, including air travel, car travel and lodging expenses incurred attending meetings conducted by the City or other meetings which are germane to the proceedings, as well as long distance telephone, special messenger or air courier service, and photocopying expenses incurred in performance of its duties hereunder as approved by the City Engineer. Section 5: ADDITIONAL SERVICES Services in addition to Bond Counsel responsibilities provided for in Section 2 above may be performed by Bond Counsel upon specific direction of the Mayor. For such additional services, Bond Counsel shall be compensated separately, and shall account and bill for such services separately at the hourly rate normally charged by Bond Counsel of One Hundred Fifty Dollars ($150) per hour. Such additional services may include, bur ate not limited to the following: BOND SERVICE CONTRACT PAGE- 3 ---PAGE BREAK--- 5.1 Prepare and argue any appeal from an Order regarding the Petition for Judicial Confirmation. 5.2 Consult with the City and its financial consultant or underwriter in the preparation of an official statement (by financial consultant or underwriter) in connection with the sale of the Bonds and advise the City concerning the requirements of state and federal securities laws relating to the necessary disclosure of factual and legal information regarding such sale. This work would include due diligence review of the official statement and information relating to it to the extent deemed necessary to protect the interests of the City and all parties concerned in connection with the issuance of the Bonds. 5.3 Review and draft, as necessary, bond purchase agreements, property inclusion agreements and other like documents related to the issuance of the Bonds. 5.4 Attend rating City meetings and public information meetings relating to the issuance of the Bonds. 5.5 Prepare for and provide such supplemental opinions in addition to the opinion described in Section 2.7, as required of Bond Counsel by the underwriter of the Bonds in connection with their assistance. 5.6 Negotiate, or assist in negotiation of, the acquisition of any easements, land or rights, or in any eminent domain proceedings. 5.7 Perform ancillary legal work in connection with litigation, pending or threatened, concerning the Bonds. 5.8 Attend meetings, negotiate and/or prepare documentation relating to solicitation of grants and loans ancillary to the Project. 5.9 Prepare or negotiate contracts between the City and other persons or municipalities. 5.10 Negotiate with or practice before state or federal agencies. Section 6: CONSENT TO SIMULTANEOUS ADVERSE REPRESENTATION ON UNRELATED MATTERS The City is aware that WETZEL & WETZEL, P.L.L.C., is a diverse law firm and that we represent other companies and individuals. It is possible that some of our BOND SERVICE CONTRACT PAGE-4 ---PAGE BREAK--- present or future clients will have disputes with the City during the time that we are representing the City. Therefore, as a condition to our undertaking Bond Counsel services for the City; the City agrees that WETZEL & WETZEL, P.L.L.C. may with the consent of the City continue to represent, or undertake in the future to represent, existing or new clients in any matter that is not substantially related to our work with the City as Bond Counsel , even if the interest of such clients in those other matters are directly adverse to the City. WETZEL & WETZEL, P.L.L.C. agree, however, that the City's consent to conflicting representation contained in the proceeding sentence shall not apply in any instance where as the result of our representation of the City as Bond Counsel we have obtained sensitive, proprietary or other confidential information of a non-public nature that, if known to any such other clients of WETZEL & WETZEL, P.L.L.C. could be used in any such other matter by such clients to the material disadvantage of the City. Should the City withdraw consent to such representation, WETZEL & WETZEL, P.L.L.C. agree that this Contract may be terminated by the City immediately. Section 7: TERMINA T/ON This Contract shall be terminated in writing by either party by giving thirty (30) days written notice. Section 8: EXCEPTIONS Specifically excepted from this Contract are services by Bond Counsel that are engineering, architectural or accounting in nature. BOND SERVICE CONTRACT PAGE-5 ---PAGE BREAK--- IN WITNESS WHEREOF, the parties hereto have executed this Contract the day and year first above written. ATTEST: Clerk" 1 BOND SERVICE CONTRACT CITY OF MOSCOW Latah County, Idaho APPROVED: WETZEL & WETZEL, P.LL.C. PAGE-6