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HomeMy WebLinkAbout2015 AgreementFINANCIAL ADVISORY AGREEMENT This Financial Advisory Agreement (the "Agreement") is made and entered into by and between the City of Sebastian, Florida (the "City") and First Southwest Company, LLC ("FirstSouthwest") effective as of the date executed by the City as set forth on the signature page hereof. WITNESSETH: WHEREAS, the City will have under consideration from time to time the authorization and issuance of indebtedness in amounts and forms which cannot presently be determined and, in connection with the authorization, sale, issuance and delivery of such indebtedness, the City desires to retain an independent financial advisor; and WHEREAS, the City desires to obtain the professional services of FirstSouthwest to advise the City regarding the issuance and sale of certain evidences of indebtedness or debt obligations that may be authorized and issued or otherwise created or assumed by the City (hereinafter referred to collectively as the "Debt Instruments") from time to time during the period in which this Agreement shall be effective; and WHEREAS, FirstSouthwest is willing to provide its professional services and its facilities as financial advisor in connection with all programs of financing as may be considered and authorized by the City during the period in which this Agreement shall be effective. NOW, THEREFORE, the City and FirstSouthwest, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, do hereby agree as follows: SECTION I DESCRIPTION OF SERVICES Upon the request of an authorized representative of the City, FirstSouthwest agrees to perform the financial advisory services stated in the following provisions of this Section I; and for having rendered such services, the City agrees to pay to FirstSouthwest the compensation as provided in Section V hereof. FirstSouthwest and the City agree that the authorized representative of the City shall include the City's Manager, City Attorney and Finance Director, and FirstSouthwest agrees that it shall not be entitled to any compensation or expenses unless such designated representatives authorize such work for financial advisory services. FirstSouthwest and the City further agree that FirstSouthwest will appoint primary liaisons to the City who shall be responsible for the day-to-day management of the financial advisory services provided under this Agreement, who initially will be Edward Stull and Joel Tindal. A. Financial Planning. At the direction of the City, FirstSouthwest shall: I. Survey and Analysis. Conduct a survey of the financial resources of the City to determine the extent of its capacity to authorize, issue and service any Debt Instruments contemplated. This survey will include an analysis of any existing debt structure as compared with the existing and projected sources of revenues which may be pledged to secure payment of debt service and, where appropriate, will include a study of the trend of the assessed valuation, taxing power and present and future taxing requirements of the City. In the event revenues of existing or projected facilities operated by the City are to be pledged to repayment of the Debt Instruments then under consideration, the survey will take into account any outstanding indebtedness payable from the revenues thereof, additional revenues to be available from any proposed rate increases and additional revenues, as projected by consulting engineers employed by the City, resulting from improvements to be financed by the Debt Instruments under consideration. 2. Future Financings. Consider and analyze future financing needs as projected by the City's staff and consulting engineers or other experts, if any, employed by the City. 3. Recommendations for Debt Instruments. On the basis of the information developed by the survey described above, and other information and experience available, submit to the City recommendations regarding the Debt Instruments under consideration, including such elements as the date of issue, interest payment dates, schedule of principal maturities, options of prior payment, security provisions, and such other provisions as may be appropriate in order to make the issue attractive to investors while achieving the objectives of the City. All recommendations will be consistent with the goal of designing the Debt Instruments to be sold on terms which are advantageous to the City, including the lowest interest cost consistent with all other considerations. 4. Market Information. Advise the City of our interpretation of current bond market conditions, other related forthcoming bond issues and general information, with economic data, which might normally be expected to influence interest rates or bidding conditions so that the date of sale of the Debt Instruments may be set at a favorable time. 5. Elections. In the event it is necessary to hold an election to authorize the Debt Instruments then under consideration, FirstSouthwest will assist in coordinating the assembly of such data as may be required for the preparation of necessary petitions, orders, resolutions, ordinances, notices and certificates in connection with the election, including assistance in the transmission of such data to a firm of municipal bond attorneys ("Bond Counsel") retained by the City. B. Debt Management and Financial Implementation. At the direction of the City, FirstSouthwest shall: 1. Method of Sale. Evaluate the particular financing being contemplated, giving consideration to the complexity, market acceptance, rating, size and structure in order to make a recommendation as to an appropriate method of sale, and: a. If the Debt Instruments are to be sold by an advertised competitive sale, FirstSouthwest will: (1) Supervise the sale of the Debt Instruments; (2) Disseminate information to prospective bidders, organize such informational meetings as may be necessary, and facilitate prospective bidders' efforts in making timely submission of proper bids; (3) Assist the staff of the City in coordinating the receipt of bids, the safekeeping of good faith checks and the tabulation and comparison of submitted bids; and (4) Advise the City regarding the best bid and provide advice regarding acceptance or rejection of the bids. b. If the Debt Instruments are to be sold by negotiated sale, FirstSouthwest will: (1) Recommend for the City's final approval and acceptance one or more investment banking firms as managers of an underwriting syndicate for the purpose of negotiating the purchase of the Debt Instruments. (2) Cooperate with and assist any selected managing underwriter and their counsel in connection with their efforts to prepare any Official Statement or Offering Memorandum. FirstSouthwest will cooperate with and assist the underwriters in the preparation of a bond purchase contract, an underwriters agreement and other related documents. The costs incurred in such efforts, including the printing of the documents, will be paid in accordance with the terms of the City's agreement with 3 the underwriters, but shall not be or become an obligation of FirstSouthwest, except to the extent specifically provided otherwise in this Agreement or assumed in writing by FirstSouthwest. (3) Assist the staff of the City in the safekeeping of any good faith checks, to the extent there are any such, and provide a cost comparison, for both expenses and interest which are suggested by the underwriters, to the then current market. (4) Advise the City as to the fairness of the price offered by the underwriters. 2. Offering Documents. Coordinate the preparation of the notice of sale and bidding instructions, official statement, official bid form and such other documents as may be required and submit all such documents to the City for examination, approval and certification. After i• such examination, approval and certification, FirstSouthwes'L shall provide the City wits a r supply of all such documents sufficient to its needs and distribute by mail or, where appropriate, by electronic delivery, sets of the same to prospective purchasers of the Debt Instruments. Also, FirstSouthwest shall provide copies of the final Official Statement to the purchaser of the Debt Instruments in accordance with the Notice of Sale and Bidding Instructions. 3. Credit Ratings. Make recommendations to the City as to the advisability of obtaining a credit rating, or ratings, for the Debt Instruments and, when directed by the City, coordinate the preparation of such information as may be appropriate for submission to the rating agency, or agencies. In those cases where the advisability of personal presentation of information to the rating agency, or agencies, may be indicated, FirstSouthwest will arrange for such personal presentations, utilizing such composition of representatives from the City as may be finally approved or directed by the City. 4. Trustee, Paving Agent, Registrar. Upon request, counsel with the City in the selection of a Trustee and/or Paying Agent/Registrar for the Debt Instruments, and assist in the negotiation of agreements pertinent to these services and the fees incident thereto. 5. Financial Publications. When appropriate, advise financial publications of the forthcoming sale of the Debt Instruments and provide them with all pertinent information. 6. Consultants. After consulting with and receiving directions from the City, arrange for such reports and opinions of recognized independent consultants as may be appropriate for the successful marketing of the Debt Instruments. 4 7. Auditors. In the event formal verification by an independent auditor of any calculations incident to the Debt Instruments is required, make arrangements for such services. 8. City Meetings. Attend meetings of the governing body of the City, its staff, representatives or committees as requested at all times when FirstSouthwest may be of assistance or service and the subject of financing is to be discussed. 9. Printine. To the extent authorized by the City, coordinate all work incident to printing of the offering documents and the Debt Instruments. 10. Bond Counsel. Maintain liaison with Bond Counsel in the preparation of all legal documents pertaining to the authorization, sale and issuance of the Debt Instruments. 11. Changes in Laws. Provide to the City copies of proposed or enacted changes in federal and state laws, rules and regulations having, or expected to have, a significant effect on the municipal bond market of which FirstSouthwest becomes aware in the ordinary course of its business, it being understood that FirstSouthwest does not and may not act as an attorney for, or provide legal advice or services to, the City. 12. Delivery of Debt Instruments. As soon as a bid for the Debt Instruments is accepted by the City, coordinate the efforts of all concerned to the end that the Debt Instruments may be delivered and paid for as expeditiously as possible and assist the City in the preparation or verification of final closing figures incident to the delivery of the Debt Instruments. 13. Debt Service Schedule: Authorizing Resolution. After the closing of the sale and delivery of the Debt Instruments, deliver to the City a schedule of annual debt service requirements for the Debt Instruments and, in coordination with Bond Counsel, assure that the paying agent/registrar and/or trustee has been provided with a copy of the authorizing ordinance, order or resolution. SECTION II OTHER AVAILABLE SERVICES In addition to the services set forth and described in Section I herein above, FirstSouthwest agrees to make available to the City the following services, when so requested by the City and subject to the agreement by the City and FirstSouthwest regarding the compensation, if any, to be paid for such services, R it being understood and agreed that the services set forth in this Section II shall require further agreement as to the compensation to be received by FirstSouthwest for such services: 1. Investment of Funds. From time to time, as an incident to the other services provided hereunder as financial advisor, FirstSouthwest may purchase such investments as may be directed and authorized by the City to be purchased, it being understood that FirstSouthwest will be compensated in the normal and customary manner for each such transaction. In any instance wherein FirstSouthwest may become entitled to receive fees or other compensation in any form from a third party with respect to these investment activities on behalf of the City, we will disclose to the City the nature and, to the extent such is known, the amount of any such compensation so that the City may consider the information in making its investment decision. It is understood and agreed that FirstSouthwest is a duly licensed broker/dealer and is affiliated with First Southwest Asset Management, LLC ("FirstSouthwest Asset Management'), a duly registered investment advisor. The City may, from time to time, utilize the broker/dealer services of FirstSouthwest and/or the investment advisory services of FirstSouthwest Asset Management with respect to matters which do not involve or affect the financial advisory services referenced in this Agreement. The terms and conditions of the engagement of FirstSouthwest and/or FirstSouthwest Asset Management to provide such services shall be determined by mutual agreement at the time such services are requested. 2. Exercising Calls and Refunding. Provide advice and assistance with regard to exercising any call and/or refunding of any outstanding Debt Instruments. 3. Capital Improvements Programs. Provide advice and assistance in the development of any capital improvements programs of the City. 4. Long Range Planning. Provide advice and assistance in the development of other long-range financing plans of the City. 5. Post -Sale Services. Subsequent to the sale and delivery of Debt Instruments, review the transaction and transaction documentation with legal counsel for the City, Bond Counsel, auditors and other experts and consultants retained by the City and assist in developing appropriate responses to legal processes, audit procedures, inquiries, internal reviews and similar matters. SECTION III TERM OF AGREEMENT This Agreement shall become effective as of the date executed by the City as set forth on the signature page hereof and, unless terminated by either party pursuant to Section IV of this Agreement, shall remain ri in effect thereafter for a period of five (5) years from such date, subject to the early termination provision in Section IV of this Agreement. SECTION IV TERMINATION This Agreement may be terminated with or without cause by the City or FirstSouthwest upon the giving of at least thirty (30) days' prior written notice to the other party of its intention to terminate, specifying in such notice the effective date of such termination. In the event of such termination, it is understood and agreed that only the amounts due FirstSouthwest for services provided and expenses incurred to the date of termination will be due and payable. No penalty will be assessed for termination of this Agreement. SECTION V COMPENSATION AND EXPENSE REIMBURSEMENT The fees due to FirstSouthwest for the services set forth and described in Section I of this Agreement with respect to each issuance of Debt Instruments during the term of this Agreement shall be calculated in accordance with the schedule set forth on Appendix A attached hereto. Unless specifically provided otherwise on Appendix A or in a separate written agreement between the City and FirstSouthwest, such fees, together with any other fees as may have been mutually agreed upon and all expenses for which FirstSouthwest is entitled to reimbursement, shall become due and payable concurrently with the delivery of the Debt Instruments to the purchaser. SECTION VI MISCELLANEOUS I. Choice of Law. This Agreement shall be construed and given effect in accordance with the laws of the State of Texas. 2. Binding Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of the City and FirstSouthwest, their respective successors and assigns; provided however, neither party hereto may assign or transfer any of its rights or obligations hereunder without the prior written consent of the other party. 3. Entire Agreement. This instrument contains the entire agreement between the parties relating to the rA rights herein granted and obligations herein assumed. Any oral or written representations or modifications concerning this Agreement shall be of no force or effect except for a subsequent modification in writing signed by all parties hereto. FIRST SOUTHWEST COMPANY, LLC By: i Edward D. Stull, Jr. Managing Director THE CITY OF SEBASTIAN, FLORIDA UM ATTEST: Secretary /2.44, �s Date Lary AsfG2rlEv APPENDIX A — FEE SCHEDULE The fees due to FirstSouthwest for the services set forth and described in the Agreement with respect to each issuance of Debt Instruments during the term of this Agreement shall be calculated in accordance with the schedules set forth below. A. With respect to compensation on a time and expenses basis, for non -bond related services, FirstSouthwest's hourly fee schedule, excluding out-of-pocket expenses is as follows: Position Rate per Hour Senior Vice President and above: $225.00 Vice President: $195.00 Assistant Vice President: $175.00 Analyst: $125.00 Administrative Staff: $ 60.00 Due to the nature of financial advisory services and our business, FirstSouthwest bills in quarter-hour increments. B. The fees due to FirstSouthwest for the services with respect to each issuance of Debt Instruments during the term of this Agreement shall be calculated in accordance with the schedule set forth below. Unless specifically provided otherwise herein or in a separate written agreement between the City and FirstSouthwest, such fees, together with any other fees and may have been mutually agreed upon and all expenses, for which FirstSouthwest is entitled to reimbursement, shall become due and payable concurrently with the delivery of the Debt Instruments to the purchaser. The fees due to FirstSouthwest related to specific issuances financings will not exceed those contained in our customary fee schedule as listed below.(') Debt (Bonds/Loans) Transaction Fee* $17,500 for the first $10,000,000 of bonds issued, plus $1.00 per $1,000 for amounts Greater than $10,000,000 of bonds issued O)Minimum $17,500 per transaction C. Arbitrage rebate calculation services, require a separate contractual agreement with our affiliate, First Southwest Asset Management, LLC. D. Continuing Disclosure services require a separate contractual agreement with First Southwest Company's Continuing Disclosure Department. E. In addition, FirstSouthwest will act as sole bidding agent for the restructuring and investment of certain Debt Instrument proceeds. FirstSouthwest agrees to structure and conduct all bids for any of the funds authorized by the Debt Instrument documents and to comply with Treasury Regulation 1.148-5 that applies to computing the yield and value of such investments and determine required documentation. The successful investment provider shall pay FirstSouthwest a fee equal to 0.05 percent of the weighted average dollar amount reasonably expected to be invested each year of the investment agreement. The fee paid by the winning provider will be the only compensation received by FirstSouthwest in connection with its engagement of a bidding agent. The payment of charges for financial advisory services rendered in connection with specific issuances of Debt Instruments shall be contingent upon the delivery of the Debt Instruments and shall be due at Appendix A-1 the time that the Debt Instruments are delivered. The payment of charges for other services shall be due and payable in accordance with the mutual agreement therefore between FirstSouthwest and the City. The City shall be responsible for ancillary expenses, if and when applicable, whether they are charges to the City directly as expenses or charged to the City by FirstSouthwest as reimbursable expenses. Bond Counsel Bond Printing Bond Ratings Computer structuring Underwriter and underwriter counsel Disclosure Counsel Official Statement preparation and Printing Paying agent/registrar/trustee Credit Enhancement CPA fees for refunding Travel expenses (not exceeding that allowed by the City Travel Policy) Miscellaneous, including copy, delivery and phone charges The charges for ancillary expenses, including computer structuring and official statement printing, shall be levied only for those services which are reasonably necessary in completing the transaction and which are reasonable in amount, unless such charges were incurred at the specific direction of the City. The payment of reimbursable expenses that FirstSouthwest has assumed on behalf of the City shall NOT be contingent upon the delivery of bonds and shall be due at the time that services are rendered and payable within 15 days of receiving an invoice therefore submitted by FirstSouthwest. Approval of billings under this Agreement shall be by the City Manager or his/her designee. All documentation for reimbursable expenses shall include copies of paid receipts and/or invoices and shall be of a sufficient nature to establish that the reimbursable expense was incurred and necessary to perform the service under this Agreement. Appendix A-2