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HomeMy WebLinkAboutAgr 2010-05-19 (Wulff, Hansen)Investment Banking Agreement RECEIVED Page 1 of 5 JUN 2 4 2010 TOWN MANAGERS OFFICE TOWN OF TIBURON INVESTMENT BANKING AGREEMENT TOWN OF TIBURON - WULFF, HANSEN & CO. This is an agreement between the Town of Tiburon; a public agency of the State of California, referred to as "Town", and Wulff, Hansen & Co. ("WH"), an investment banking firm registered as a broker/ dealer with the Securities and Exchange Commission and the State of California and a member of the Financial Industry Regulatory Authority, Inc. ("FINRA") with its main office in San Francisco, California, referred to as "Investment Banker", for performing investment banking services and underwriting public financing instruments to be issued by the Town of Tiburon that are sold through negotiated sales, and consists of the following terms and conditions (the "Agreement"). Town and Investment Banker together are referred to as the "Parties". 1.0 Services of Investment Banker 1.1 Investment Banker agrees to perform the following investment banking services in connection with underwriting each negotiated sale (whether in one or more phases or series) of bonds relating to the Del Mar Valley 2010 Supplemental Utility Undergrounding Assessment District (the "Bonds") by the Town of Tiburon, Marin County, California, while this Agreement is in effect (the entire process leading to the sale of the Bonds is referred to herein as "Public Financing"): (a) Attendance at all public meetings of Town at which matters relating to the Public Financing are considered, except routine matters; (b) Attendance at Town staff meetings, or meeting with property owners relating to the Public Financing, upon the request of the Town after reasonable notice; (c) Work with affected property owners, Town staff, its professional advisors and Town Council members to conceive the structure, timing, terms, and other similar matters relating to the Public Financing; and coordinate a financing program acceptable to the property owners, Town, Investment Banker, and investors; (d) Telephone consultation with staff members, Town advisors and property owners to answer questions about the Public Financing and related matters; (e) Conduct the Investment Banker's due diligence investigation relative to the Bond offering and Disclosure Documents (i.e., Official Statement, Offering Statement or memorandum, or similar document, hereinafter collectively referred to as "Disclosure: bocuments") and review Disclosure Documents in conjunction with bond counsel for the Bond issue for Town review and approval. It is anticipated that no disclosure counsel or underwriter's counsel is to be involved regarding the Bonds, and subject to reimbursement of Investment Banker's expenses as set forth in paragraph 4.0, Investment Banker shall be responsible for preparation of the Disclosure Documents for review and approval by the Town. (f) Assist the Town in its selection of professional advisors (e.g., bond counsel, special tax rate consultant, engineer of work) relative to the Public Financing, if necessary; (g) Assist the Town's bond counsel and any special consultants in structuring of the financing and recommending specific terms and conditions affecting the Bonds; Investment Banking Agreement Page 2 of 5 (h) Evaluation of possibilities and benefits of and need to obtain credit enhancements and/or rating of the Bonds; (i) At least one day prior to the submission of a formal offer to Town for purchase of the Bonds, the Investment Banker will indicate to Town the interest rate or rates, the purchase price to be paid to the Town, and the public offering price of the Bonds that Investment Banker then estimates will be included in an offer. Said terms will be accompanied by recent comparative sales of similar issues, if any, known to Investment Banker and provided such information is available to Investment Banker, to clarify market levels of the Bond sale. The Parties intend, subject to market trends and conditions, that the Bonds, even though unrated, will be priced with interest rates that relate to recently priced AAA rated bonds. The length of the bond term shall be as set by the Town Council, as appropriate. (j) Arrangements for underwriting of the Bonds, at negotiated sale pursuant to paragraphs 3 and 4 below. 1.2 The service of Investment Banker under this Agreement shall not include the following: (a) Legal services of any kind; (b) Engineering services of any kind; (c) Financial advisory or financial consulting services. 1.3 The lead Banker to represent Investment Banker regarding Public Financing of the Town and this Agreement will be Mark Pressman. 2.0 Agreement of Town In consideration of the Agreement of Investment Banker to provide the underwriting services set forth in paragraph 1 and with the understanding that considerable time and work will be devoted toward furtherance of the Public Financing on behalf of the Town by Investment Banker, the Town agrees as follows: 2.1 Town will work with Investment Banker exclusively while this Agreement is in effect with respect to the Del Mar Valley 2010 Supplemental Utility Undergrounding Assessment District during the term hereof unless other arrangements" are mutually`agreed to in writing by both parties. 2.2 Town will cooperate with Investment Banker to the extent practical relating to the services being rendered by Investment Banker in connection with the Public Financing project and will assist Investment Banker in obtaining information regarding the Public Financing and will provide said information to the extent practicable. 2.3 For the purpose of this Public Financing and to the extent practical, Town will encourage Public Financing within its jurisdiction and will negotiate the sale of and sell each issue of Bonds which results from said financing exclusively to Investment Banker as described below. 3.0 Purchase and Sale of Bonds Investment Banking Agreement Page 3 of 5 3.1 At the time designated by the Town for sale of a Bond issue while this Agreement is in effect, Investment Banker, unless it believes in good faith that the Bonds are not marketable because of market conditions or other conditions beyond Investment Banker's control, will submit an offer to Town to purchase the Bonds, subject to pertinent resolutions, the Official Statement, and all other necessary documents, approvals, and proceedings governing or relating to such Bonds having been determined by bond counsel, the Town and the Investment Banker to be satisfactory in all respects for financing purposes. The Investment Banker may, at its option, form a group of investment banking firms ("Underwriting Group") for the purpose of making the offer and underwriting and selling the Bonds, and references to Investment Banker herein will include such Underwriting Group as the context requires. 3.2 Provided the purchase price, interest rate, and public offering price are determined in good faith to be satisfactory to Town and to Investment Banker, Town will agree to sell to Investment Banker and Investment Banker will agree to purchase the Bonds on a mutually agreeable closing date at such price and interest rates for sale to the public at such public offering price, or at such other public offering price or prices as Investment Banker determines in good faith to be appropriate in view of market conditions and other factors affecting price at the time of the public offering; provided that Investment Banker will not be obligated to purchase the Bonds on the closing date if it determines in good faith that the Bonds are not marketable as a result of market conditions or because of conditions beyond the control of Investment Banker. If Investment Banker decides not to purchase the Bonds, Town shall be entitled to work with another underwriter of its choice in marketing the particular Bonds at issue. If Town does utilize another underwriter as herein provided, this shall not affect the terms and conditions of this Agreement in relation to other Bond sales while this Agreement is in effect. 3.3 For each separate Bond issue, the purchase price to be paid to the Town by the Investment Banker will be set so that the difference (i.e., underwriting discount) between the purchase price and the total principal amount of the Bonds being issued will be 2.25% of District costs before Town contributions. Said price, subject to paragraph 4.4, will be determined for each Bond sale by negotiation between Investment Banker and the Town. 4.0 Investment Banking Compensation and Expenses 4.1 Town shall be billed for and pay directly,' whether or not Bonds are sold or delivered (unless payment of such fees and expenses is contingent on the Bonds being sold and delivered), the fees and expenses of its legal counsel, bond counsel, special tax rate consultants, financial advisors and consultants, engineers, and any other experts retained by the Town or retained by Investment Banker on behalf of the Town (e.g., bond paying agent, arbitrage calculations, arbitrage opinion, etc.) retained with Town's prior written permission unless the Town has otherwise directly agreed with such providers of services. The Town also shall pay, whether or not the Bonds are sold or delivered, all costs customarily paid in connection with issuance of bonds including printing the Bonds and other documents, including all preparation and printing costs for the Preliminary and final Official Statements, including all costs of reproduction and distribution thereof; all costs of staff consulting by others, preparing the Purchase Contract, the Official Statement, and the Resolutions, including all costs of reproduction and distribution thereof; costs of preparation, printing, signing, transportation, delivery, safekeeping of the Bonds; and overnight cost of funds thereon; costs of obtaining the overlapping debt statement; regulatory agency fees, advertising in local newspapers, property owner notices and travel by Town staff, Town officials, or the Town's professional advisors. Investment Banking Agreement Page 4 of 5 4.2 The expense of Underwriter's Counsel, if deemed necessary, shall be the responsibility of and paid for directly by Investment Banker. The compensation of Investment Banker shall provide for said expense in addition to its other duties as set forth above. 4.3 It is understood and agreed that Town shall not be required to pay a fee or other compensation to Investment Banker for services provided by Investment Banker to Town under this Agreement. It is understood that Investment Banker's compensation or profit is to come from the difference between the price paid to the Town for each issue of Bonds and the public offering price thereof and that Investment Banker will receive no fee or other compensation from the Town. 4.4 Upon funding of the Bonds at the conclusion of the Public Financing process, Investment Banker's minimum compensation for services described in paragraph 1.0 (bond discount) for the Del Mar Valley 2010 Supplemental Utility Undergrounding Assessment District Public Financing, exclusive of expenses, shall be $45,000. Should the Del Mar Valley 2010 Supplemental Utility Assessment District Public Financing fail to be funded from cash payments by property owners, other sources, sale and funding from Bond proceeds, or a combination thereof, Investment Banker shall receive no compensation or reimbursement of expenses. 5.0 Certification - No Conflict 5.1 Investment Banker certifies that it has no interest, either direct or contingent, in any property or contract arising from or affected by Public Financing with the Town of Tiburon, except as Investment Banker under this Agreement. 6.0 Term of Agreement 6.1 The term of this Agreement shall be until' December 31, 2010 or the issuance of the Bonds, whichever comes first, unless extended by mutual written consent of the Town and Investment Banker. 7.0 Termination of Agreement 7.1 The Town may terminate this Agreement with Investment Banker for malfeasance or should Investment Banker fail to maintain its registration in good standing with the Securities and Exchange Commission, the State of California and its clear record of membership with the Financial Industry Regulatory Authority, Inc. 8.0 Assignment 8.1 This Agreement may be assigned to another investment banker upon written consent of both the Investment Banker and the Town. 9.0 Classification of Relationship 9.1 It is expressly understood and agreed and Town hereby recognizes that in performing its activities, Investment Banker is acting solely on its., own behalf and not on behalf of the Town and that Investment Banking Agreement Page 5 of 5 any proposal for financing will be to purchase Bonds from the Town for its own account for resale. Nothing herein shall be construed to make the Investment Banker an employee or financing, fiscal, or other advisor of or consultant to the Town, or to establish any financing advisory or fiduciary relationship between the Town and the Investment Banker. WHEREFORE, the Parties have executed this Agreement as of the day of 2010. WULFF, HANSEN & CO. BY; Mark Pressman TOWN OF TIBURON BY. Margq t A. Curraii Town Manager i ATTEST: APPROVED AS TO FORM: Ann R. Danforth Town Attorney