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HomeMy WebLinkAboutResolution - 2006-R0525 - Agreement - RBC Dain Rauscher Inc.- Financial Advisory Services - 10/26/2006Resolution NO. 2006-RO525 October 26. 2006 Item No. 5.18 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock, a Financial Advisory Agreement by and between the City of Lubbock and RBC Dain Rauscher Inc. d/b/a RBC Capital Markets, and all related documents. Said Financial Advisory Agreement is attached hereto and incorporated in this Resolution as if fully set forth herein and shall be included in the minutes of the Council. Passed by the City Council this 26th day of October 2006. ,ter DAVID A. MILLER, MAYOR ATTEST: Reb cca Garza, City Secretary APPROVED AS TO APPROVED AS TO FORM: as4edowiRBC Capital Markets.res October 6, 2006 RBC Capital Markets Resolution No. 2006—RO525 Mark C. Nitcholm Director, Fixed Income Banking U.S. Debt Markets 1001 Fannin, Suite 400 Houston, Texas 77002 (713)853-0823 Fax(713)651-3347 muk.nitcholas@rbcdain.com FINANCIAL ADVISORY AGREEMENT This Financial Advisory Agreement (the "Agreement"), is entered into this 26" day of October, 2006, by and between the City of Lubbock (the "Issuer") and RBC Dain Rauscher Inc. d/b/a RBC Capital Markets ("RBC Capital Markets"). WHEREAS, Issuer is in need of certain professional financial advisory services and RBC Capital Markets is capable of providing such financial services, upon the terms and provisions hereof; WHEREAS, RBC Capital Markets possesses considerable professional expertise in the provision of such services; NOW THEREFORE, for good and valuable consideration, Issuer and RBC Capital Markets hereby agree as follows: Retention of RBC Capital Markets. The Issuer will have under consideration the issuance of obligations evidencing indebtedness ("Obligations'), either in a single financing or in a series of financings, and that in connection with the issuance of such Obligations Issuer hereby agrees to retain RBC Capital Markets as Issuer's financial advisor in accordance with the terms of this Agreement This Agreement shall not be exclusive and Issuer may retain other parties to perform any or all of the services prescribed herein for any and all Obligations of the Issuer. Scone of Services. As financial advisor, RBC Capital Markets shall perform the following services: (a) Analyze the financing alternatives available to the Issuer, taking into account its borrowing capacity, future financing needs, policy considerations, and such other factors as RBC Capital Markets deems appropriate to consider. (b) Recommend a plan for the issuance of Obligations that will include: (1) the type of bonds (current interest, capital appreciation, deferred income, etc.); (2) the date of issue; (3) principal amount; (4) interest structure (fixed or variable); (5) interest payment dates; (6) a schedule of maturities; (7) early redemption options; (8) security provisions; (9) appropriate management fee and takedown; and (10) other matters that RBC Capital Markets considers appropriate to best serve the Issuer's interests. To the extent appropriate, the plan will address strategies in addition to the issuance of obligations, such as interest rate derivative transactions. (c) Advise Issuer of current conditions in the relevant debt market, upcoming bond issues, and other general information and economic data which might reasonably be expected to influence interest rates, bidding conditions or timing of issuance. (d) Organize and coordinate the financing team. Unless otherwise directed by Issuer, RBC Capital Markets will select the paying agent, escrow agent and verification agent, as the particular transaction may require, each of whom will be retained and compensated by Issuer. In a negotiated offering, RBC Capital Markets shall solicit and evaluate underwriter proposals upon request and make a recommendation for the hiring of the underwriter(s). (e) Work with counsel on the transaction, including bond counsel whom Issuer retains, who will be recognized municipal bond attorneys, whose fees will be paid by Issuer, and who will prepare the proceedings, provide legal advice concerning the steps necessary to be taken to issue the Obligations, and issue an unqualified opinion (in a form standard for the particular type of financing) approving the legality of the Obligations and (as applicable) tax exemption of the interest paid thereon and other services as needed by Issuer. In addition, bond counsel will issue an opinion to the effect that the disclosure document does not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading. Generally, working with counsel will mean coordinating with the attorneys and assisting in the financial advisory aspects of preparing appropriate legal proceedings and documents, including documents concerning any required election. (f) Assist in the Issuer's preparation of the Preliminary Official Statement ("POS") and the Official Statement ("OS") or equivalent document as the particular transaction may require (such as a private placement memorandum). (g) In connection with a competitive sale, RBD Capital Markets shall: coordinate the preparation of the Official Notice of Sale, the Uniform Bid Form (containing provisions recognized by the municipal securities industry as being consistent with the securities offered for sale) and other such documents which Issuer may request or deem appropriate; ii. submit all such documents for examination, approval, and certification by appropriate officials, employees, and agents of the Issuer, including bond attorneys; iii. coordinate delivery of these documents to a list of prospective bidders; iv. where appropriate, organize investor meetings; V. coordinate the receipt of bids; FA Agreement (Combined) 6130106 vi. advise as to the best bid, including acceptance or rejection of the best bid; vii. if a bid is accepted, coordinate the delivery of and payment for the Obligations; viii. assist in verification of final closing figures; ix. provide copies of documents to the purchaser of the Obligations in accordance with the terms of the Official Notice of Sale and the Uniform Bid Form. (h) Make recommendations as to credit rating(s) for the proposed Obligations and, should the Issuer seek a rating, coordinate the process of working with the rating agency or agencies and assist in the preparation of presentations as necessary. (i) Make recommendations as to obtaining municipal bond insurance, a liquidity facility or other credit enhancement for the Obligations and, should the Issuer seek any such credit enhancement, coordinate the process and assist in the preparation of presentations as necessary. (j) Attend meetings of governing bodies of the Issuer, its staff, representatives or committees as requested. (k) After closing, RBC Capital Markets shall deliver to the Issuer and the paying agent(s) definitive debt records, including a schedule of annual debt service requirements on the Obligations. Issuer acknowledges that advice and recommendations of RBC Capital Markets involve professional judgment on the part of RBC Capital Markets and that the results cannot be, and are not, guaranteed. 3. Information to be Provided to RBC Capital Markets. Issuer agrees (upon the reasonable request of RBC Capital Markets) to provide or cause to be provided to RBC Capital Markets non confidential information relating to the Issuer, the security for the Obligations, and other matters that RBC Capital Markets consider appropriate to enable RBC Capital Markets to perform its duties under this Agreement. With respect to all information provided by Issuer or on Issuer's behalf to RBC Capital Markets under this Agreement, Issuer agrees upon our request to obtain certifications (in a form reasonably satisfactory to us) from appropriate Issuer representatives as to the accuracy of the information and to use your best efforts to obtain certifications (in a form reasonably satisfactory to RBC Capital Markets) from representatives of parties other than the Issuer. Issuer acknowledges that RBC Capital Markets are entitled to reasonably rely on the accuracy and completeness of all information provided by Issuer or on Issuer's behalf. FA Agreement (Combined) 6/30/06 4. Official Statement. Issuer acknowledges that Issuer is responsible for the contents of the POS and OS and are subject to and may be held liable under federal or state securities laws for misleading or incomplete disclosure. To the extent permissible by law, and only to such extent, Issuer agrees to indemnify and hold RBC Capital Markets harmless against any losses, claims, damages or liabilities to which RBC Capital Markets may become subject under federal or state law or regulation insofar as such losses, claims, damages or liabilities (or actions in respect thereof) are based solely upon omission or alleged omission to state in the disclosure document a material fact required to be stated therein or necessary to make the statements therein not misleading; and will reimburse RBC Capital Markets for any reasonable legal or other expenses reasonably incurred by us in connection with investigating or defending any such loss, claim, damage, liability or action. G-23. In connection with Rule G-23 of the Municipal Securities Rulemaking Board, the Issuer agrees that RBC Capital Markets, subject to the terms hereof, may submit a bid (either independently or as a member of syndicate) for any issue of Obligations when offered for sale at competitive bid and prior to submitting any such bid we shall obtain the Issuer's written consent to bid on the particular issue of Obligations. 6. Fees and Expenses. In connection with the authorization, issuance, and sale of Obligations, Issuer agrees that RBC Capital Markets fee will be computed as shown on the "Fee Schedule" attached hereto. Such fee will become due and payable simultaneously with the delivery of the Obligations to the Purchaser of all or a part of the Obligations (the "Purchaser"). Such fee does not include, and RBC Capital Markets will be entitled to reimbursement from Issuer for, any actual "out-of-pocket" expenses incurred in connection with the provision of our services, including reasonable travel expenses or any other expenses incurred on your behalf. These expenses will be due and payable when presented to the Issuer, which normally will be simultaneously with the delivery of the Obligations to the Purchaser. 7. Interest Rate Derivatives. If Issuer decides to consider the use of interest rate derivative products as part of the financing plan for Obligations covered by this Agreement, RBC Capital Markets will be pleased to provide assistance upon request. The nature of our assistance will be set forth in an amendment to this Agreement or in another separate contract document. 8. Other Terms and Provisions. RBC Capital Markets submitted to Issuer, under letter dated September 29, 2406, its response to Issuer's Request for Proposal to Provide Financial Advisory Services (the "Response"), the Response being attached hereto as Exhibit "A". All terms, provisions, obligations and commitments made or contained in the Response shall be considered part of this Agreement, and incorporated by reference, for all purposes and intents. In the FA Agreement (Combined) 6/30/06 event of conflict between Agreement and the Response, the terms of the Agreement, as regards of such conflict, shall control and prevail. 9. Term of Aereement. This Agreement shall be for a period of thirty-six (36) months (the "Term") from the date hereof; however, this Agreement may be terminated by either party upon thirty (30) days written notice. Paragraphs 4 and 6 (insofar as it concerns reimbursable expenses) survive any termination of this Agreement. 10. Miscellaneous Provisions. This Agreement is submitted in duplicate originals. Issuer's acceptance of this Agreement will occur upon the return of one original executed by an authorized Issuer representative, and Issuer hereby represents that the signatory below is so authorized. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of the Agreement, which shall remain in full force and effect. 11. Independent Contractor. It is understood and agreed that RBC Capital Markets is to perform the Services in a sound and professional manner and exercising the degree of care, skill and diligence in the performance of the services contemplated herein as is exercised by a professional financial advisory group under similar circumstances and RBC Capital Markets hereby warrants to the Issuer that the Services shall be so performed. Further, RBC Capital Markets is and shall be considered at all times an independent contractor under this Agreement and/or in its service, hereunder. 12. Events of Default/Remedies. RBC Capital Markets' Defaults/Issuer's Remedies. In the event RBC Capital Markets shall default in the performance of any term or provision of this Agreement for any reason other than failure by the Issuer to perform hereunder, the Issuer may, if said default shall be continuing after five (5) days notice of such default is delivered to RBC Capital Markets, exercise any right or remedy available to it by law, contract, equity or otherwise, including without limitation, the right to terminate this Agreement without additional notice. The remedies set forth herein are cumulative and not exclusive, and may be exercised concurrently. 13. Miscellaneous. a. RBC Capital Markets shall comply with all laws, statutes, regulations, ordinances, rules and any other legal requirement related to, in any way, manner or form, the performance of the services contemplated herein. b. Any notice required by this Agreement shall be deemed to be properly served, if (i) provided in person or by telephonic facsimile; or (ii) deposited in the United States mail by certified letter, return receipt requested, addressed to the recipient at recipient's address shown below, subject to the right of either FA Agreement (Combined) 6/30/06 party to designate a different address by notice given in the manner just described. Notice shall be deemed to be received when delivered if provided in person or by telephonic facsimile or, if deposited in the United States mail, as set forth above, three (3) days after depositing such notice in the United States mail, as set forth above. For Issuer: Jeff Yates, Chief Financial Officer City of Lubbock P.O. Box 2000 Lubbock, Texas 79457 Facsimile: 806-775-2051 For RBC Capital Markets: Mark C. Nicholas, Director RBC Dain Rauscher Inc. First City Tower 1001 Fannin, Suite 400 Houston, Texas 77002-6708 Facsimile: 713-651-3347 c. THIS AGREEMENT IS TO BE CONSTRUED UNDER TEXAS LAW WITHOUT REGARD TO CONFLICT OF LAW RULES THAT WOULD DIRECT APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION. THE OBLIGATIONS OF THE PARTIES CREATED BY THIS AGREEMENT ARE PERFORMABLE, AT LEAST IN PART, IN LUBBOCK COUNTY, TEXAS. VENUE FOR ANY ACTION BROUGHT PURSUANT TO THIS AGREEMENT, OR ACTIVITY CONTEMPLATED HEREBY, SHALL EXCLUSIVELY BE IN LUBBOCK COUNTY, TEXAS. d. This Agreement, including the attachments and schedules hereto and agreements or documents incorporated herein by reference, represent the entire and sole agreement between the Issuer and RBC Capital Markets with respect to the subject matter hereof and supersedes any and all prior negotiations, understandings, representations or other agreements, whether written or oral. This Agreement may not be modified or amended except in writing and duly executed by each party hereto. e. Nothing contained herein shall be construed to imply a joint venture, joint enterprise, partnership or principal — agent relationship between RBC Capital Markets and the Issuer. FA Agreement (Combined) 6/30/06 f. A waiver by either Issuer or RBC Capital Markets of a breach of this Agreement shall be in writing. In the event either party shall execute and deliver such waiver, such waiver shall not affect the waiving party's rights with respect to any other or subsequent breach. g. Neither Issuer nor RBC Capital Markets may assign this Agreement, in whole or in part, without the written consent of such assignment by the non - assigning party. Issuer and RBC Capital Markets each bind itself or himself, their legal representatives and permitted assigns in respect to all provisions of this Agreement. h. Nothing in this Agreement shall be construed to provide any rights or benefits whatsoever to any party other than Issuer and RBC Capital Markets. 14. RBC Capital Markets shall obtain and maintain the following insurance policies and protection: a. Professional Liability: Professional Liability with a combined single limit of a minimum of $500,000 each occurrence and in the aggregate. b. Workers' Compensation and Emi lovers Liability Insurance: RBC Capital Markets shall elect to obtain workers' compensation coverage pursuant to Section 406.002 of the Texas Labor Code. Further, RBC Capital Markets shall maintain said coverage throughout the term of this Agreement and shall comply with all provision of Title 5 of the Texas Labor Code. Any termination of workers' compensation insurance coverage by RBC Capital Markets or any cancellation or non -renewal of workers' compensation insurance coverage for RBC Capital Markets shall be a material breach of this contract. RBC Capital Markets may maintain Occupational Accident and Disability Insurance in lieu of Workers' Compensation. In either event, the policy must be endorsed to include a waiver of subrogation in favor of the Issuer. FA Agreement (Combined) 6/30/06 Dated this 26th day October, 6.RBC DAIN RAUSCHER INC. d/b/a RBC CAPITAL MAIaEA By - Name Title 1 Date Dated this 26th day of October, 2006. CITY OF LU13BOCK DAVID A. MILLER, MAYOR ATTEST: Rebecca� City Secretary APPROVED AS TO FORM: Richard K. Casner, First AssistarzYCity Attorney aVCityANaieharNCiry of Lubbock FAAa memenmlllnc amps OcmMr 9, 2006 FA Apeemem (Combined) 6/30106 Resolution No. 2006—RO525 FEESCHEDULE In consideration for the services rendered by RBC Capital Markets, the Issuer agrees that our fee for each issue of Obligations will be as follows: More And Not Than More Than The Fee Is $0 $10,000,000 $15,000 plus $1.50 per $1,000 $10,000,001 $25,000,000 $30,000 plus $1.25 per $1,000 $25,000,001 $50,000,000 $48,750 plus $1.15 per $1,000 $50,000,000 No Limit $77,500 plus $1.00 per $1,000 RBC Capital Markets will bill the Issuer at closing for each issue of Obligations a net amount which will include a fee calculated on the above schedule as well as any "out-of- pocket" expenses incurred on behalf of the Issuer. Such expenses incurred could include preparation, printing, and distribution of Notice of Sale, Official Statement, rating fees and travel expenses related to rating, if any print of Obligations, and all appropriate costs and expenses associated with the closing and delivery of the Obligations. FA Agreement (Combined) 6/30/06