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2007-059 FILE REFERENCE FORM 2007-059 X Additional File Exists Additional File Contains Records Not Public, According to the Public Records Act Other FILE(S Date Initials First Amendment to Agreement 03/27/09 ) R Second Amendment to Agreement [original is attached] 02/25/10 ) R S:\Our Documents\Ordinances\07\Financial Advisory Services.doc ORDINANCE NO. .:z007-0!Jt:J AN ORDINANCE APPROVING THE CITY MANAGER TO EXECUTE A FINANCIAL ADVISORY SERVICES AGREEMENT BETWEEN THE CITY OF DENTON AND FIRST SOUTHWEST COMPANY, APPROVING THE EXPENDITURE OF FUNDS THEREFOR, AND PROVIDING FOR AN EFFECTIVE DATE WHEREAS, the City has solicited, received and evaluated proposals for financial advisory services in accordance with the procedures of State law and City ordinances; and WHEREAS, the City has selected First Southwest Company for the purpose of providing financial advisory services; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION I. The City Council hereby approves the Financial Advisory Agreement, attached hereto, between the City of Denton and First Southwest Company. SECTION 2. The City Manager, or his designee, is authorized to make the expenditures as outlined in the attached Agreement and to exercise all rights and duties ofthe City of Denton under the Agreement. SECTION 3. This Ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the 21t1tdayof IlJ.df{yh ,2007. ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: FINANCIAL ADVISORY AGREEMENT This Financial Advisory Agreement (the "Agreement") is made and entered into by and between City of Denton, Texas ("Issuer") and First Southwest Company ("FSC") effective as of the date executed by the Issuer as set forth on the signature page hereof. WITNESSETH: WHEREAS, the Issuer 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, Issuer desires to retain an independent fmancial advisor; and WHEREAS, the Issuer desires to obtain the professional services ofFSC to advise the Issuer 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 Issuer (hereinafter referred to collectively as the "Debt Instruments") from time to time during the period in which this Agreement shall be effective; and WHEREAS, FSC is willing to provide its professional services and its facilities as fmancial advisor in connection with all programs of fmancing as may be considered and authorized by Issuer during the period in which this Agreement shall be effective. NOW, THEREFORE, the Issuer and FSC, 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 Issuer, FSC agrees to perform the financial advisory services stated in the following provisions ofthis Section I; and for having rendered such services, the Issuer agrees to pay to FSC the compensation as provided in Section V hereof. A. Financial Planning. At the direction of Issuer, FSC shall: I. Survey and Analysis. Conduct a survey of the fmancial resources of the Issuer 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 Issuer. In the event revenues of existing or projected facilities operated by the Issuer 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 Issuer, resulting from improvements to be financed by the Debt Instruments under consideration. 2. Future Financings. Consider and analyze future fmancing needs as projected by the Issuer's staff and consulting engineers or other experts, if any, employed by the Issuer. 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 Issuer 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 Issuer. All recommendations will be consistent with the goal of designing the Debt Instruments to be sold on terms which are advantageous to the Issuer, including the lowest interest cost consistent with all other considerations. 4. Market Information. Advise the Issuer 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, FSC will assist in coordinating the assembly of such data as may be required for the preparation of necessaty 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 Issuer. B. Debt Management and Financial Implementation. At the direction ofIssuer, FSC shall: I. Method of Sale. Evaluate the particular fmancing 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: 2 a. Ifthe Debt Instruments are to be sold by an advertised competitive sale, FSC will: (I) Supervise the sale of the Debt Instruments, reserving the right, alone or in conjunction with others, to submit a bid for any Debt Instruments issued under this Agreement which the Issuer advertises for competitive bids; however, in keeping with the provisions of Rule G-23 of the Municipal Securities Rulemaking Board, FSC will request and obtain written consent to bid prior to submitting a bid, in any instance wherein FSC elects to bid, for any installment of such 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 Issuer in coordinating the receipt of bids, the safekeeping of good faith checks and the tabulation and comparison of submitted bids; and (4) Advise the Issuer 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, FSC will: (1) Recommend for Issuer's fmal 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. FSC 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 Issuer's agreement with the underwriters, but shall not be or become an obligation of FSC, except to the extent specifically provided otherwise in this Agreement or assumed in writing by FSC. (3) Assist the staff of the Issuer 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 Issuer as to the fairness of the price offered by the underwriters. 3 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 Issuer for examination, approval and certification. After such examination, approval and certification, FSC shall provide the Issuer with a 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, FSC shall provide copies of the fmal 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 Issuer as to the advisability of obtaining a credit rating, or ratings, for the Debt Instruments and, when directed by the Issuer, 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, FSC will arrange for such personal presentations, utilizing such composition of representatives from the Issuer as may be fmally approved or directed by the Issuer. 4. Trustee. Paving Agent, Registrar. Upon request, counsel with the Issuer in the selection ofa 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 fmancial 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 Issuer, arrange for such reports and opinions of recognized independent consultants as may be appropriate for the successful marketing of the Debt Instruments. 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. Issuer Meetings. Attend meetings of the governing body of the Issuer, its staff, representatives or committees as requested at all times when FSC may be of assistance or service and .the subject of fmancing is to be discussed. 9. Printing. To the extent authorized by the Issuer, 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. 4 II. Changes in Laws. Provide to the Issuer 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 FSC becomes aware in the ordinary course of its business, it being understood that FSC does not and may not act as an attorney for, or provide legal advice or services to, the Issuer. 12. Deliverv of Debt Instruments. As soon as a bid for the Debt Instruments is accepted by the Issuer, 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 Issuer in the preparation or verification of fmal 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 Issuer 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 TERM OF AGREEMENT This Agreement shall become effective as of the date executed by the Issuer as set forth on the signature page hereof and, unless terminated by either party pursuant to Section IV of this Agreement, shall remain in effect thereafter for a period oftwo (2) years from such date. Unless FSC or Issuer shall notify the other party in writing at least thirty (30) days in advance of the applicable anniversary date that this Agreement will not be renewed, this Agreement will be automatically renewed on the second anniversary of the date hereof for an additional one (1) year period and thereafter will be automatically renewed on each anniversary date for successive one (I) year periods for up to 3 years. SECTION ill TERMINATION This Agreement may be terminated with or without cause by the Issuer or FSC 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 FSC for services provided and expenses incurred to the date oftermination will be due and payable. No penalty will be assessed for termination of this Agreement. 5 SECTION IV COMPENSATION AND EXPENSE REIMBURSEMENT The fees due to FSC 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 Issuer and FSC, such fees, together with any other fees as may have been mutually agreed upon and all expenses for which FSC is entitled to reimbursement, shall become due and payable concurrently with the delivery of the Debt Instruments to the purchaser. SECTION V 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 Issuer and FSC, 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 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 By: Hill A. Feinberg, Chairman and Chief Executive Officer -. By: ~)RQr(l../- Laura B. Alexander Senior Vice President 6 ATTEST: BY: APPROVED AS TO FORM: CITY ATTaR CITYOFD T CITY OF DENTON, TEXAS BY~cz:? Title:George C. Campbell, City Manager Date: ()Jj /27/07 I ' 7 ~ APPENDIX A The fees due FSC will not exceed those contained in the fee schedule as listed below. Base Fee - Any Issue Plus $1.00 per 1,000 Bond $25,000 The above charges include all financial advisory services including computer structuring and official statement preparation. The payment of charges for financial advisory services shall be contingent upon the delivery of bonds and shall be due at the time that bonds are delivered. The Issuer shall be responsible for the following expenses, if and when applicable, whether they are charged to the Issuer directly as expenses or charged to the Issuer by FSC as reimbursable expenses: Bond counsel Bond printing Bond ratings Credit enhancement CPA fees for refunding Official statement printing Paying agent/registrar/trustee Travel expenses Underwriter and underwriters counsel Miscellaneous, including copy, delivery, and phone charges The payment of reimbursable expenses that FSC has assumed on behalf of the Issuer shall NOT be contingent upon the delivery of bonds and shall be due at the time that services are rendered and payable upon receipt of an invoice therefor submitted by FSC. SECOND AMENDMENT TO FINANCIAL ADVISORY SERVICES AGREEMENT STATE OF TEXAS § COUNTY OF DENTON § This Second Amendment to that certain Financial Advisory Services Agreement executed on March 27, 2007 and amended March 27, 2009 between the City of Denton, Texas, a municipal corporation located in the State of Texas, hereinafter referred to as "City," and First Southwest Company, hereinafter referred to as "Financial Advisor"; said Agreement, including all amendments executed pursuant to the Agreement, are hereinafter referred to as the "Agreement"; NOW, THEREFORE, under the conditions and for the considerations hereinafter expressed, the parties hereby agree as follows: SECTION 1. In accordance with the Section II "Term of Agreement" of the Agreement, the Agreement is hereby extended for a second one-year extension which will begin March 27, 2010 and ending March 26, 2011. SECTION 2. Save and except as amended hereby, all the remaining articles, terms, conditions, sections, sentences, clauses, and phrases of the Agreement shall remain in full force and effect. IN WITNESS of which this Agreement has been executed on this the ~ f 2010 by the duly authorized officers of Financial Advisor and City. CITY OF DENTON: By: George C. Campbell City Manager ,T Address: City of Denton 215 E. McKinney Denton, Texas 76201 ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: Page 1 f APPROVED AS TO LEGAL FORM ANITA BURGESS, CITY ATTORNEY BY: FIRST SOUTHWEST COMPANY By: LA-t" A42'44'j-w- Authorized Signature Name: C, X a- Alelrrnaetoter- Title: st-v%Lor i lQ P~~s~ e~c H-~ Page 2