Grand River Dam Authority

Grand River Dam Authority REQUEST FOR PROPOSALS FOR FINANCIAL ADVISORY SERVICES Proposal #: 40830 Proposal Issue Date: January 23, 2015 Proposal Due: 4:00 p.m. Central February 4, 2015 Submit Proposals to: Nita Wade, Superintendent of Purchasing Grand River Dam Authority 226 West Dwain Willis Avenue Vinita, OK 74301 Submit questions solely to: Nita Wade, Superintendent of Purchasing nwade@grda.com

I. INVITATION TO RESPOND Sealed proposals for the Financial Advisor Request for Proposals (RFP) 40830 will be received by the Grand River Dam Authority, hereinafter called the Authority, until 4:00 pm, Central Time, February 4, 2015. The Proposal and Agreement shall be conditioned upon compliance with all provisions of the RFP Documents. A. General Advisory Services. The Proposal for this section is a firm, fixed hourly rates, indefinite delivery and indefinite quantity agreement. The Authority may, or may not, utilize all of the services mentioned in this agreement. The Advisor must clear all services to be provided, if applicable, with the GRDA prior to providing such services under this agreement. Pricing as submitted shall contain all direct and indirect costs associated with unit price, e.g., insurance, fees, taxes, profit, overhead, general and administrative expenses. All travel expenses to be incurred by the vendor in performance of the agreement shall be included in the total bid price / agreement amount. B. Financial Advisor to Three Potential Debt Transactions Any fees incurred for bond issuance will be paid only on a contingency basis upon the actual issuance of the bonds and are subject to approval of the Oklahoma State Bond Advisor (OSBA). The Authority and the OSBA reserve the right to accept the Proposal that, in their judgment, is the lowest and best value Proposal (using the criteria set out in this RFP; to reject any and all Proposals, and to accept or reject any irregularities and informalities in any Proposal(s) that is submitted. Proposals received after the specified Proposal due date time will not be accepted. Pricing as submitted shall contain all direct and indirect costs associated with unit price, e.g., insurance, fees, taxes, profit, overhead, general and administrative expenses. All travel expenses to be incurred by the Advisor in performance of the agreement shall be included in the total bid price / agreement amount.

II. Technical Specifications A. Purpose of Request The Authority is soliciting Proposals from experienced and qualified firms to provide financial advisory services in two areas: (i) assist the Authority in strategic planning, debt management, continuing disclosure and general financial advice; and (ii) the planning, structuring, marketing and delivery of the potential bond issues described below: 1. Evaluation of conversion of $65 million of Series 2014 C (federally taxable) from Weekly Mode to another Interest Mode in accordance with the terms and provisions of the Authority s Bond Resolution. 2. Evaluation of any refunding savings and efficiencies related to the potential refunding of all or a portion of the outstanding $538,750,000 Series 2008 A Revenue Bonds and the $239,315,000 Series 2010 A& B Revenue Bonds. 3. The funding of retrofits to coal units at the Grand River Energy Center (previously the Coal Fired Complex) primarily consisting of converting Unit 1 from a coal fired plant to a gas fired plant, or other upgrades necessary to comply with environmental regulations Respondents should have significant experience in advising public utilities. The term of the service agreement is one year with automatic renewals for an additional two (2) years. B. Schedule of Events Issuance of RFP January 23, 2015 Proposal Due Date February 4, 2015 Targeted Award Date February 11, 2015 C. Background The Authority was created as a non appropriated agency by the State of Oklahoma in 1935 as a conservation and reclamation district. The Authority has the power to control, store, preserve, and distribute the waters of the Grand River and its tributaries for any useful purpose and to develop and generate water power, electric power, and electric energy within the boundaries of the Authority to buy, sell, resell, interchange, and distribute electric power and

energy. The Grand River lies entirely within Oklahoma, but its drainage basin also extends over the states of Arkansas, Kansas, and Missouri. As part of the Authority s licensing agreements, it also has lake area responsibilities, one of which is the operation of a lake patrol for both Grand and Hudson lakes. The cost of those activities are funded primarily through electricity sales to rural cooperative, municipal, industrial and off system customers located in Oklahoma, Kansas, Missouri, and Arkansas. Electrical power is generated by GRDA by utilizing coal fired, natural gas, and hydro generation. The hydro facilities include the Kerr and Pensacola Dams, as well as the Salina Pumped Storage Project. The GRDA Coal Fired Complex in Chouteau, Oklahoma has two units. Unit 2 of the Complex is joint owned (62% owned by GRDA and 38% owned by KAMO Power). Additionally, the GRDA and KAMO share an integrated transmission system. GRDA is co owner of the Redbud Gas plant located near Luther, Oklahoma. GRDA s undivided interest in the assets and liabilities of the facility is 36%, while OGE s interest is 51% and OMPA s interest is 13%. OG&E operates the Redbud facility under an operating agreement with GRDA and OMPA and allocates certain costs and expenses attributable to Redbud to GRDA and OMPA in accordance with their undivided ownership interests. The Authority also has wind energy purchase agreements. The Authority issued Revenue Bonds, Series 2014A for $225,635,000 and Revenue Bonds, Series 2014B (Federally Taxable) for $84,845,000 on October 14, 2014. Proceeds of the Series 2014A&B are being utilized to finance a portion of the costs of construction of a nominal 495 MW combined cycle electric plant (GRDA 3) on the site of the Authority s existing Grand River Energy Center in Chouteau, Oklahoma. The Authority also issued Revenue Bonds, Series 2014C (Federally Taxable, variable rate) for $65,000,000 on December 10, 2014. Proceeds of the Series 2014C Bonds will be used to fund certain System Costs, consisting of capital additions, repairs and improvements. GRDA employs approximately 500 employees. More detailed information on the GRDA and its finances can be found in prior Comprehensive Annual reports which are located on the GRDA web site at grda.com. D. Scope of Services The Authority is seeking an experienced and qualified Financial Advisor to perform the following advisory services:

1. General Advisory Services a. Act as the Authority s Independent Municipal Advisor, as defined by the U.S. Securities Exchange Commission (SEC), in connection with all general capital markets activity. b. Provide independent financial advice and serve solely in the interest of the Authority. c. Be familiar with the Authority s existing debt levels and covenants relating to that debt, Authority resolutions, financial policies, strategic plan, capital plan, and anticipated financing needs. d. Assist in the development of strategic financial plans, financing programs, and strategies. e. Provide timely credit market information, evaluation and presentation of financing options, long term financial planning, documentation of finance decisions and on going quantitative analysis. f. Analyze and evaluate proposals received from underwriters and make necessary recommendations. g. On the Authority s existing debt portfolio, analyze refunding opportunities for potential savings. Specifically, evaluate any refunding savings and efficiencies related to potential refunding of all or a portion of the outstanding $538,750,000 Series 2008A Revenue Bonds and the $239,315,000 Series 2010 A & B Revenue Bonds. h. Evaluate conversion of existing variable rate bonds to fixed rate alternatives. Specifically, evaluate conversion of $65 million of Series 2014C (federally taxable) from Weekly Mode to another Interest Mode in accordance with terms and provisions of the Bond Resolution. i. Assist the Authority with continuing disclosure documentation and review. j. Assist with communications to the Authority s Board of Directors, customers and other outside organizations. Attend selected Board meetings and customer meetings and provide presentations as needed.

k. Assist the Authority in preparing and presenting information to the credit rating agencies. 2. Financial Advisor to Three Potential Debt Transactions: Conversion of the $65 million of Series 2014 C (federally taxable from Weekly Mode to another Interest Mode in accordance with the terms and provisions of the Authority s Bond Resolution. The refunding of all or a portion of the outstanding $538,750,000 Series 2008 A Revenue Bonds and the $239,315,000 Series 2010 A & B Bonds. The funding of retrofits to coal units at the Grand River Energy Center (previously the Coal Fired Complex) primarily consisting of converting Unit 1 from a coal fired plant to a gas fired plant, or other upgrades necessary to comply with environmental regulations.. a. Develop a plan of finance and prepare a financing schedule. This will include considering various potential financing techniques, including but not limited to, public versus privately placed debt, fixed versus variable rate debt, tax exempt versus taxable and long term versus short term. b. Provide recommendations for specific debt offerings, including but not limited to, options regarding timing, sizing, maturity schedules, call provisions and rate structure. c. Advise the Authority of the current market conditions in the context of upcoming bond issues which may impact interest rates and bond sales. Advise on bond issue timing based on market conditions. d. Advise on all debt offerings, including proposed interest rates and yields, need for credit enhancements, syndicate practices, pre sale marketing, and negotiation of fees and expenses. e. Advise the Authority on bond sales climate and make recommendations with respect to whether sales of bonds should be competitive or negotiated. If negotiated, assist the Authority in the selection of bond underwriting firms by developing RFPs. Manage, analyze, provide summaries of RFP responses, and provide recommendations of the underwriting team. f. Assist in preparation and review of official statements and other financing documents necessary for the issuance of debt. Conduct thorough reviews

of the financial calculations relating to the sale of debt contained in the associated documents. g. Assist in the selection and assignment of roles and responsibilities of bond counsel, trustee, paying agent, insurers, printers, rating agencies and other parties involved in the debt issuance process. h. Assist in the solicitation and evaluation of bond insurance and credit enhancement proposals. i. Assist in due diligence meetings with Underwriter s counsel. j. Assist in due diligence meetings with Liquidity provider s credit committees and counsel. k. Evaluate and provide expert advice to the Authority during the bond pricing in the area of overall structure of the bond issue, including timing of the issue relative to market conditions, maturity structures, call provisions, interest rates, reserve fund requirements, disposition of bond proceeds, flow of funds, issuance costs, confirmation of present value savings, etc. l. Provide feedback on underwriter recommendations, especially bond pricing and date. m. Assist in determining the best method for marketing or remarketing bonds under current market conditions. n. Assist in evaluation of investment opportunities for bond proceeds, debt service reserve fund, and other debt related funds. o. Manage escrow bidding and document the bidding process. p. Coordinate and supervise the bond closing details, including but not limited to: transcript, bond pricing, CUSIP numbers, delivery, transfer of funds, etc. required to successfully close the transaction. q. Provide a detailed Pricing Report for each transaction. r. Monitor and report to the Authority on post sale trading volume and spreads. s. Assist in remediation, tender, or defeasance of bonds, as necessary.

t. Provide a post settlement recap of the performance of the underwriting team and other pertinent information related to the issuance process. The firm engaged as Financial Advisor will not be permitted to participate as underwriter or provider of escrow securities for the Authority for the initial oneyear term or either of the two one year extensions of the contract. The Authority retains the right to prohibit the term extensions if key advisors assigned to the Authority s engagement are no longer available to work under this contract. Correspondingly, key members no longer with the firm shall only be prohibited from proposing on underwriting or other similar engagements until the end of any term they provided work to the Authority under the contract. 3. Proposal Requirements and Format Respondent should include the following information in the Proposal using the number format provided below. Failure to submit all of the required information may result in a rejection of the Proposal or may carry a negative weight when the Proposal is evaluated. Respondents shall submit an original and eight (8) copies of the proposal to the Authority. The eight (8) copies of the sealed proposals shall be sent to the Authority at the following address: Nita Wade, Superintendent of Purchasing Grand River Dam Authority 226 West Dwain Willis Avenue Vinita, OK 74301 One additional copy of the proposal should be submitted to the Oklahoma State Bond Advisor at the following address: Jim Joseph State Bond Advisor 9220 North Kelley Avenue Oklahoma City, OK 73131 Proposals must be original and hard copy. The Authority will not accept proposals sent to fax or electronic mail.

a. Cover Letter A cover letter which shall be considered an integral part of the Proposal shall be signed by the individual(s) authorized to bind the Respondent contractually. In signing the cover letter, the Respondent is indicating that the Respondent has read, understands and accepts each Section of this RFP including the proposed Agreement (Section V) If Respondent takes exception to sections in the RFP, please note in cover letter and provide a detailed description in Section II.D.3.b.i. The cover letters shall also contain a statement certifying the Respondent s work for the Authority will not create any conflict of interest. If a potential conflict of interest exists, please explain in detail in Section II.D.3.b.iii. The Respondent should state that if the firm is selected as Financial Advisor, the firm will not be allowed to resign to serve as underwriter or provider of escrow securities for a proposed transaction that occurs during the initial one year term or either of the two one year extensions of the agreement. The Authority retains the right to prohibit the term extensions if key advisors assigned to the Authority s engagement are no longer available to work under this contract. Correspondingly, key members no longer with the firm shall only be prohibited from proposing on underwriting or other similar engagements until the end of any term they provided work to the Authority under the contract. b. General Information. i. If exceptions to the RFP are noted in the Cover Letter, please provide a listing of the exceptions and include detailed descriptions (includes changes to the Agreement Section V). If exceptions are taken to the Agreement (Section V), the Respondent must clearly identify the language that is being taken exception to and provide the suggested alternate language for each exception. The nature and extent of exceptions, if any, made by the Respondent to the Authority s terms and conditions in the Agreement will be a consideration when evaluating Proposals. Respondents that demonstrate a willingness to accept the Authority s terms and conditions will be given a more favorable consideration by the Authority.

ii. iii. State whether your firm can provide all of the services in the Scope of Services in Section. Technical Specifications. Explain in detail any potential conflict of interest your firm might have in providing services to the Authority. (Expanded upon from Cover Letter.). c. Firm and Staff Qualifications and Experience. i. Provide a summary overview of your company that includes, but is not limited to, the year the firm was established, the type of ownership structure, the size of the firm, whether the firm has a specialized utilities financial advisory function and the size of that function, and the location of the office from which the work on this engagement is to be performed. Describe any significant or relevant changes in size of the firm or staffing levels. As Appendix 1 to the Proposal, please provide the firm s last two audited annual financial statements with auditor s opinion. ii. Describe your firm s current and prospective adherence to the Municipal Advisor Rule and any material changes your firm has taken or will be taking to ensure compliance. iii. Describe the team that will be assigned to provide services to the Authority for the term of the contract. Identify the individuals who will be involved in the primary role, and the responsibilities of each team member. Provide brief resumes for these individuals as Appendix 2 to the Proposal. Resumes should include relevant experience with utilities financial advisory services and revenue bond financing. Provide three recent public power references (including name, title, employer, phone number and email address) for the person who will serve as the Authority s primary point of contact. iv. Describe the firm s experience in providing financial advisory services over the past five years to public power authorities.

Include the name of the utility, dollar volume, and number of issues. Identify the individual from your firm who had the principal responsibility for the financial advisor services. v. Provide a brief description of your firm s and assigned staff members past experience with and knowledge of the Authority. Describe your knowledge of the Authority s debt portfolio, bond resolutions, and credit ratings. Discuss any learning curve that your firm or the assigned staff members will have in providing Financial Advisor Services to the Authority. vi. vii. viii. From the experience summarized in 3.b.v. above, briefly discuss the financial advisory services that are most similar to the Scope of Services included in this RFP. Focus on the major contributions made by your firm and how those contributions are relevant to the scope of Services. Describe any situations that have occurred in the last five years where your services as Financial Advisor were terminated. Identify any pending investigation of the firm (or any employees) or enforcement or disciplinary actions taken with the past three years by the SEC or other regulatory bodies. d. Market Technical & Analytical Information. i. How does your firm keep current on changing market conditions, products and services, and underwriter performance? Where does your firm get its market information? What sources does your firm rely on to advise on market pricing issues, market access issues, investor feedback, credit issues, etc.? Describe the availability of ongoing training and educational services that could be provided to the Authority. ii. iii. Describe the financial modeling and quantitative analysis capabilities your firm will use when providing financial advisor services to the Authority. Discuss your firm s role in evaluating financing alternatives other than bonds. Briefly mention alternatives that may be appropriate for the Authority s use.

iv. Based on your understanding of the Authority s financial situation, how should the Authority approach financing issues such as bond structures and investor marketing strategies? v. Describe your firm s experience in dealing with the credit rating agencies. As Financial Advisor, how would you help the Authority improve its ratings? What are the major concerns you see regarding maintaining or improving the Authority s credit rating? vi. vii. Describe your firm s methodology for recommending competitive versus negotiated financing. Indicate the role your firm would play as Financial Advisor under each method of sale. How does your firm evaluate senior and co manager performance after a financing? Based on your knowledge of the Authority and its debt issuance practices, describe what changes the Municipal Advisor Rule with will have on the Authority s capital market activities and interactions with underwriters. e. Additional Information Discuss any services not already described in the Scope of Services that your firm would offer the Authority. Provide sufficient detail so that the proposed services can be independently evaluated. Provide any additional information that could assist the Authority in evaluating your firm s capabilities for providing the best financial advisor services to the Authority. f. Fees Describe the firm s proposed fee schedule for the Scope of Services to be provided by your firm annually. Fees should be split into the following two categories: i. For the services described II.D.1. Provide your proposed hourly fee schedule for providing such services and an anticipated not to exceed amount for those services. The Authority may,

or may not, utilize all of the services mentioned in this agreement. The vendor must clear all services to be provided, if applicable, with the GRDA prior to providing such services under this provision of the agreement. The Proposal for this section is a firm, fixed hourly rates, indefinite delivery and indefinite quantity agreement. The Authority may, or may not, utilize all of the services mentioned in this agreement. Pricing as submitted shall contain all direct and indirect costs associated with unit price, e.g., insurance, fees, taxes, profit, overhead, general and administrative expenses. All travel expenses to be incurred by the vendor in performance of the agreement shall be included in the total bid price / agreement amount. Your proposal should be provided in the following format: *Manager 1 hourly fee $ *Staff 1 hourly fee $ * Use the title of the employees that will be assigned to the project. Annual not to exceed amount: Year 1 $ Year 2 $ Year 3 $ ii. For the services described in II.D.2. Provide a not to exceed advisory fee for a fixed rate bond transaction for EACH of the bond transactions described. See below: Conversion (or refunding) of the $65 million of Series 2014 C (federally taxable) from Weekly Mode to another Interest Mode in accordance with the terms and provisions of the Authority s Bond Resolution Advisory fee $ The refunding of all or a portion of the outstanding $538,750,000 Series 2008 A Revenue Bonds Advisory fee $

and The $239,315,000 Series A & B Bonds Advisory fee $ The funding of retro fits to coal units at the Grand River Energy Center (previously the Coal Fired Complex) primarily consisting of converting Unit 1 from a coal fired plant to a gas fired plant, or other upgrades necessary to comply with environmental regulations. Advisory fee $ If less than $50 million issued Advisory fee $ If more than $50 million issued Any fees incurred for bond issuance will be paid only on a contingency basis upon the actual issuance of the bonds and are subject to approval of the Oklahoma State Bond Advisor (OSBA). Pricing as submitted shall contain all direct and indirect costs associated with unit price, e.g., insurance, fees, taxes, profit, overhead, general and administrative expenses. All travel expenses to be incurred by the vendor in performance of the agreement shall be included in the total bid price / agreement amount. The Authority reserves the right to negotiate fees with one or more of the top evaluated respondents. The Authority may request best and final offers if deemed necessary and shall determine the scope and subject of any best and final request. However, the respondents should not expect an opportunity to strengthen its proposal during negotiation and should submit its best offer based on the terms and conditions set forth in this RFP. The Authority will not be responsible for expenses incurred in preparing and submitting a Proposal or costs related to negotiation of a contract for services. Such costs should not be included in the Proposal. g. Completion of Required forms. Complete the following forms attached to this RFP and a certificate of insurance:

Professional Service Contract Affidavit IV.A Affidavit of Nondiscrimination, Non Segregated Facilities, Non Collusion, Business Relationships IV.B. Certificate of Independent Price Determination IV.C. Certificate of No Conflicting Relationships IV.D. III. Selection Criteria Proposals will be evaluated on the information provided in the Proposal submission. The following criteria, but not limited to these criteria, will be used to evaluate the Proposals, not necessarily listed in the order of importance: A. The firm s demonstrated record of experience as a financial advisor to issuers of bonds, especially public power utilities. B. The qualifications, experience and availability of the primary advisor(s) and the other individuals to be assigned to the Authority. C. Technical content of the Proposal and how well the stated needs are addressed. D. References for similar financial advisor services and prior experience with the Authority. E. Adequacy and completeness of the Proposal. F. Exceptions taken to the Agreement for Professional or Technical Services. G. Fees.

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A. Professional Service Contract Affidavit PROFESSIONAL SERVICE CONTRACT AFFIDAVIT I,, FEI/SS# (name) have not previously entered into a contract with the agency or any other state agency which would result in a substantial duplication of the final product required by the proposed contract. STATE OF ) COUNTY OF ) Signed: Before me, the undersigned, a Notary Public, in and for said County and State, on this day of, 20, personally appeared to me known to be the identical person who subscribed the name of the maker thereof to the within and forgoing instrument as its and acknowledged to me that (s)he executed the same as his/her free and voluntary act and deed and as the free and voluntary act and deed of such agency, for the uses and purposes therein set forth. Given under my hand and seal of office the day and year above written. V. Notary Public My commission expires:

B. Affidavit of Nondiscrimination, Non Segregated Facilities, Non Collusion, Business Relationships AFFIDAVIT OF NONDISCRIMINATION, NONSEGREGATED FACILITIES, NONCOLLUSION, BUSINESS RELATIONSHIPS STATE OF ) COUNTY OF ) The undersigned, of lawful age, being first duly sworn upon oath, deposes and states that I am the duly authorized agent of the bidder submitting the attached bid and am authorized by said bidder to execute the within affidavit. I further swear that if said bidder is successful on this project, it will not discriminate against anyone in employment or employment practice because of race, color, religion, sex, or national origin. The undersigned further states that said bidder will comply with all federal and state laws and execute orders concerning the subject of nondiscrimination. The undersigned further states that said bidder does not and will not maintain or provide for its employees any segregated facilities as defined in the instructions to bidders for this project at any of its establishments, nor permit its employees to perform their services at any location under its control, where segregated facilities are maintained. The bidder further agrees that a violation of this certification is a breach of the equal opportunity clause of this bid and any contract awarded pursuant thereto. Said bidder further agrees that (except where it has obtained identical certification from proposed subcontractors for specific time periods), it will obtain identical certifications from proposed subcontractors prior to the award of subcontract exceeding Ten Thousand Dollars ($10,000) which are not exempt from the provisions of the equal opportunity laws, and that said bidder will retain such certifications in its files. The undersigned further states that for the purpose of certifying the facts pertaining to the existence of collusion among bidders and between bidders and state officials or employees, as well as facts pertaining to the giving or offering of things of value to government personnel in return for special consideration in the letting of any contract pursuant to the bid to which this statement is attached; that I am fully aware of the facts and circumstances surrounding the making of the bid to which this statement is attached and have been personally and directly involved in the proceedings leading to the submission of such bid; and that neither the bidder nor anyone subject to the bidder s direction or control has been a party: (a) to any collusion among bidders in restraint of freedom of competition by agreement to bid at a fixed price or to retain from bidding; nor (b) to any collusion with any state official or employee as to quantity, quality or price in the prospective contract, or as to any other terms of such prospective contractor; (c) in any discussions between bidders and any state official concerning exchange of money or other thing of value for special consideration in the letting of a contract.

The undersigned further states that any partnerships, joint ventures, or other business relationships that are now in effect, or existed within one (1) year prior to this statement with the architect, engineer, or other party to this project; or any such business relationships between any officer of director of the bidder and any officer or director of the architectural or engineering firm or other party to the project are described as follows: NAME OF BIDDER: BY: Affiant Subscribed and sworn before me this day of, 20. My Commission Expires: Notary

C. Certificate of Independent Price Determination CERTIFICATE OF INDEPENDENT PRICE DETERMINATION By submission of this proposal, the respondent certifies that in connection with this procurement: 1. Prior to the date established herein as the deadline for proposal submission, the prices which have been quoted in this proposal have not been knowingly disclosed by the respondent, directly or indirectly, to any other respondent or to any competitor; 2. No attempt has been made or will be made by the respondent to induce any other person or firm to submit or not submit a proposal for the purpose of restricting competition. Each person signing this proposal certifies that: 1. He/she is the person in the respondent s firm responsible within that organization for the decision as to the prices being offered herein and that he/she has not participated, and will not participate, in any action contrary to the restrictions cited above, or; 2. He/she is not the person in the respondent s firm responsible within that organization for the decision as to the prices being offered herein, but that he/she has been authorized in writing to act as agent for the persons responsible for such decision in certifying that such persons have not participated, and will not participate, in any action contrary to the restrictions cited above and as their agent does hereby so certify; and he/she has not participated, and will not participate, in any action contrary to the restrictions cited above. DATE: SIGNATURE: SIGNATURE: SIGNATURE:

D. Certificate of No Conflicting Relationships CERTIFICATE OF NO CONFLICTING RELATIONSHIPS The undersigned hereby certifies that: 1. He/she is an officer of the respondent, authorized to commit the respondent to all terms and conditions outlined in this proposal, and; 2. No conflict of interest exists, or is likely to exist, between the respondent and the procuring agency, and; 3. No relationship exists between the respondent and the procuring agency or any of its employees that would in any way interfere with fair competition in the selection process, and; 4. There is no relationship, contractual or otherwise, between the respondent and any other individual, firm or organization that may be a party to the contract that may be a conflict of interest or would in any way interfere with the respondent s ability to perform the duties described in the Request for Proposal. 5. Except as described in its proposal, the respondent will not receive any compensation, directly or indirectly, in connection with the proposed offering without the prior written approval of the Issuer and the State Bond Advisor. 6. The respondent will neither make, nor cause to be made, any payment to a third party in connection with the proposed offering, or the investment of the proceeds of the proposed offering, without the prior written approval of the Issuer and the State Bond Advisor. DATE: SIGNATURE: SIGNATURE: SIGNATURE:

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Contract 40830 PUBLIC FINANCIAL MANAGEMENT, INC. AGREEMENT FOR FINANCIAL ADVISORY SERVICES This Agreement, made and entered into this day of 2015, by and between Grand River Dam Authority, an agency of the State of Oklahoma, pursuant to 82 O.S. 862 et seq., ( Client ) and, (hereinafter called the Financial Advisor or "FA") sets forth the terms and conditions under which the Financial Advisor shall provide services. WHEREAS, Client is desirous of obtaining the services of a financial advisor to develop and assist in implementing Client s strategies to meet its current and long-term operations and capital financing needs and render assistance in respect to debt transactions; and WHEREAS, FA is capable of providing the necessary financial advisory services. NOW, THEREFORE, in consideration of the above mentioned premises and intending to be legally bound hereby, Client and FA agree as follows: I. SCOPE OF SERVICES FA shall furnish Client with financial advisor services as set forth in (i) the Request for Proposals for Financial Advisory Services #40830 attached as Exhibit A to this Agreement and (ii) the Bid Proposal submitted by FA attached as Exhibit B. In the event of a conflict, the precedence shall be 1. this Agreement; 2. the RFP #40830 and 3. FA s bid proposal. II. WORK SCHEDULE The services of the Financial Advisor are to commence as soon as practicable after the execution of this Agreement and a request by the Client for such service. III. FINANCIAL ADVISORY COMPENSATION 1. For the services described in Exhibit A, Section II.D.1: An hourly rate of $, including all direct and indirect costs associated with the services, not to exceed $ annually. 2. For the services described in Exhibit A, Section II.D.2, FA's professional fees and expenses shall be paid on a contingency basis upon the actual issuance of the bonds and are subject to approval of the Oklahoma State Bond Advisor prior to payment. Such fees and expenses shall be as follows: a) Conversion or refunding of the Sixty-five Million Dollar ($65,000,000) Series 2014 C (federally taxable) Bonds from Weekly Mode to another interest mode in accordance with the terms and provisions of the Client s Bond Resolution: Advisory Fee of $.

b) The refunding of all or a portion of the outstanding Five Hundred Thirty-Eight Million Seven Hundred Fifty Thousand Dollars ($538,750,000) Series 2008 A Revenue Bonds: Advisory Fee of $. c) The refunding of all or a portion of the outstanding Two Hundred Thirty-Nine Million Three Hundred Fifteen Thousand Dollars ($239,315,000) Series 2010 A and B Revenue Bonds: Advisory Fee of $. d) The funding of retrofits to Client s coal units: i) If less than Fifty Million Dollars ($50,000,000) issued: Advisory fee of $. ii) If more than Fifty Million Dollars ($50,000,000) issued: Advisory fee of $. IV. TERMS AND TERMINATION This Agreement shall remain in effect for one (1) year following the effective date unless terminated earlier as provided below. This term of this Agreement shall be extended annually for up to three (3) years following the effective date, unless otherwise terminated. If work required for one or more Client approved services is in progress as of the termination date of the Agreement, the Agreement shall be extended as required until the work is completed. The Client may terminate this Agreement for cause by providing a Show Cause letter to FA citing the noncompliance with the Agreement. FA shall have ten (10) days to reply to the Show Cause Letter and indicate why the Agreement should not be terminated. FA shall then have thirty (30) days to cure the noncompliance cited in the Show Cause Letter. If the noncompliance is not cured within thirty (30) days, the Client will terminate the Agreement. V. NON-ASSIGNABILITY FA shall not assign any interest in this Agreement or subcontract any of the work performed under the Agreement without the prior written consent of the Client. VI. INFORMATION TO BE FURNISHED TO THE FINANCIAL ADVISOR All information, data, reports, and records in the possession of the Client necessary for carrying out the work to be performed under this Agreement shall be furnished to the FA and the Client shall cooperate with the FA in all reasonable ways. Client along with the State Auditor and Inspector, upon reasonable prior notice, shall have the right to request to examine and audit such books, records, documents and other supporting data of FA which are reasonably necessary to substantiate the amounts and items invoiced. Such audit shall be conducted in accordance with a mutually agreed time schedule, on the account of Client, and in accordance with generally accepted auditing standards. The right to audit extends for a period of one year from the date of an invoice or from one year following the completion of 2

the Agreement whichever occurs last. Such audits will be conducted at FA's place of business during normal business hours, on a periodic basis not to exceed one audit per year, with such audit not exceeding three consecutive working days, unless otherwise mutually agreed. VII. NOTICES All notices given under this Agreement shall be in writing, sent by registered United States mail, with return receipt requested, addressed to the party for whom it is intended, at the address designated below. The parties designate the following as the respective places for giving notice: GRAND RIVER DAM AUTHORITY P.O. Box 409 Vinita, OK 74301 Attention: General Counsel [FINANCIAL ADVISOR] Attention: Chief Executive Officer VIII. TITLE TRANSFER All materials prepared by FA pursuant exclusively to this Agreement shall be the property of the Client. Upon termination of this Agreement, Financial Advisor shall deliver to the Client copies of any and all material pertaining to this Agreement. IX. FINANCIAL ADVISOR'S REPRESENTATIVES 1. Assignment of Named Individuals The professional employees of FA set forth in Exhibit B shall provide the services set forth in this Agreement: The representatives will not exceed two (2) individuals. The day to day contact shall be as follows: [NAME OF DAY TO DAY CONTACT] FA may, from time to time, amend team members upon the written consent of Client. 2. Changes in Staff Requested by the Client The Client has the right to request, for any reason, that FA replace any member of the advisory staff. Should the Client make such a request, FA shall promptly suggest a substitute for approval by the Client. 3

X. INSURANCE REQUIREMENTS 1. FA shall secure and maintain insurance of such type and in such minimum amounts as may be necessary to protect FA and the interests of Client against all hazards or risks of loss below. The form and limits of such insurance, together with the underwriter thereof in each case shall be acceptable to Client, and it shall be the responsibility of FA to maintain adequate insurance coverage at all times. The provision of insurance by FA of such types and in such minimum amounts as specified below does not limit FA s contractual responsibilities, liabilities, or obligations under this Agreement. a) Commercial General Liability Insurance. FA shall maintain for the duration of this Agreement a commercial general liability insurance policy written in comprehensive form and shall protect FA against all claims arising from injuries to members of the public or damage to property of others arising out of any act or omission to act of FA or its agents, employees or subcontractors. This policy shall also include protection against claims insured by usual personal injury liability coverage, a broad form property coverage endorsement, and insure any contractual liability assumed by FA. The liability limits shall not be less than a One Million Dollars ($1,000,000) combined single limit each occurrence for bodily injury and property damage. GRDA, its officers, directors, employees, representatives and agents shall be expressly named as additional insureds on the commercial general liability insurance policy with respect to liability arising out of work and operations performed by or on behalf of FA. The commercial general liability insurance policy shall stipulate that the insurance afforded to the additional insureds shall apply on a primary and non-contributory basis and that any other insurance carried by the additional insureds will be excess only and will not contribute with this insurance. b) Automobile Liability Insurance. FA shall maintain for the duration of this Agreement an automobile liability insurance policy insuring against claims for bodily injury and property damage and covering liability arising out of all motor vehicles, including owned, leased/hired, and non-owned motor vehicles. The limit of liability shall not be less than One Million Dollars ($1,000,000) per accident for bodily injury and property damages. The automobile liability insurance policy shall be written on an occurrence basis. c) Workers Compensation and Employer s Liability Insurance. For the duration of this Agreement, FA shall provide workers compensation insurance sufficient to meet its obligations under the laws of the State of Oklahoma. Further, FA shall provide employer liability insurance covering its legal obligation to pay damages because of bodily injury or occupational disease (including resulting death) sustained by an employee. The employer liability insurance shall contain a liability limit of no less than One Million Dollars ($1,000,000) per accident for bodily injury or disease. d) Excess/Umbrella Insurance. FA shall provide Excess/Umbrella insurance coverage of not less than Three Million Dollars ($3,000,000) to follow form on the 4

employer s liability, general liability and auto insurance heretofore described in this Section. e) Professional Liability Insurance. FA shall maintain for the duration of this Agreement professional liability insurance coverage related to FA s profession. The limit of liability shall not be less than One Million Dollars ($1,000,000) per claim. 2. Waiver of Subrogation. FA hereby grants to GRDA a waiver of FA s rights to subrogation against GRDA. Further, FA hereby grants to GRDA a waiver of all rights to subrogation which any insurer of FA may acquire against the GRDA by virtue of the payment of any loss. FA agrees to obtain any endorsement that may be necessary to effect this waiver of subrogation. FA understands and acknowledges that this waiver of subrogation provision applies regardless of whether FA has received a waiver of subrogation endorsement from its insurer. 3. A certificate of such insurance shall be forwarded to the Legal Department, Grand River Dam Authority, P. O. Box 409, Vinita, Oklahoma 74301. The certificate must show the name and address of the insured, particular work covered, limits of coverage, policy number, effective and expiration dates and cancellation requirements. Should any of the above described policies be cancelled before the expiration date, the issuing insurer will endeavor to mail 30 days written notice to GRDA, but failure to do so shall impose no obligation or liability of any kind upon the insurer, agents or representatives. XI. INDEMNIFICATION Consultant hereby agrees to indemnify, save, and hold harmless Client, its Directors, Officers, and Employees from any and all liability, loss, costs, charges, obligations, expenses, attorneys fees, litigation judgments, damages, claims and demands of any kind whatsoever from any third party arising from or out of any act or omission of FA, its officers, employees, or agents in the performance or nonperformance of its obligations under this Agreement. XII. INDEPENDENT CONTRACTOR FA, its employees, officers and representatives at all times shall be independent contractors and shall not be deemed to be employees, agents, partners, servants and/or joint venturers of Client by virtue of this Agreement or any actions or services rendered under this Agreement. XIII. MODIFICATION OF AGREEMENT The Agreement shall only be modified upon written agreement of the parties. XIV. CHOICE OF LAW AND VENUE This agreement shall be interpreted and construed in accordance with the laws of the State of Oklahoma and venue is proper in Craig County, Oklahoma. 5

XV. ENTIRE AGREEMENT This Agreement represents the entire agreement between Client and FA and may not be amended or modified except in writing signed by both parties. IN WITNESS THEREOF, the Client and Financial Advisory have executed this Agreement as of the day and year herein above written. ATTEST: CLIENT By: Daniel S. Sullivan General Manager/Chief Executive Officer Director of Investments DATE: ATTEST: [FINANCIAL ADVISOR] By: DATE: 6