HomeMy WebLinkAbout2016-006AFINANCIAL ADVISORY AGREEMENT
This Financial Advisory Agreement (the "Agreement") is made and entered into
by and between Indian River County, Florida (the "Issuer" or the "County') and
FirstSouthwest, a Division of Hilltop Securities Inc. ("FirstSouthwest") effective as of
January 25, 2016.
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 financial advisor;
and
WHEREAS, the Issuer desires to obtain the professional services of
FirstSouthwest 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, 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 Issuer during the period in which this Agreement shall be
effective.
NOW, THEREFORE, the Issuer and FirstSouthwest, in consideration of the
mutual covenants and agreements herein contained and other good and valuable
consideration, do hereby agree as follows:
Section 1. Description of Services. Upon the request of an authorized representative
of the Issuer, FirstSouthwest agrees to perform the financial advisory services stated in
the following provisions of this Section I; and for having rendered such services, the
Issuer agrees to pay to FirstSouthwest the compensation as provided in Section 5
hereof.
A. Financial Planning. At the direction of Issuer, FirstSouthwest shall:
1. Survey and Analysis. Conduct a survey of the financial 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
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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 financing 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, 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 Issuer.
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B. Debt Management and Financial Implementation. At the direction of Issuer,
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 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,
FirstSouthwest will:
(1) Recommend for Issuer'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
Issuer's agreement with the underwriters, but shall not be or
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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 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.
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, FirstSouthwest 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, 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 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, FirstSouthwest will
arrange for such personal presentations, utilizing such composition of
representatives from the Issuer as may be finally approved or directed by
the Issuer.
4. Trustee, Paying Agent, Registrar. Upon request, counsel with the Issuer
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.
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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
FirstSouthwest may be of assistance or service and the subject of
financing 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.
11. 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 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 Issuer.
12. Delivery 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 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 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.
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Section 2. Other Available Services. In addition to the services set forth and
described in Section I herein above, FirstSouthwest agrees to make available to Issuer
the following services, when so requested by the Issuer and subject to the agreement
by Issuer and FirstSouthwest regarding the compensation, if any, to be paid for such
services, 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:
A. 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 Issuer 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
Issuer, we will disclose to Issuer the nature and, to the extent such is known, the
amount of any such compensation so that Issuer 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. Issuer 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.
B. Exercising Calls and Refunding. Provide advice and assistance with regard to
exercising any call and/or refunding of any outstanding Debt Instruments.
C. Capital Improvements Programs. Provide advice and assistance in the
development of any capital improvements programs of the Issuer.
D. Long -Range Planning. Provide advice and assistance in the development of
other long-range financing plans of the Issuer.
E. Post -Sale Services. Subsequent to the sale and delivery of Debt Instruments,
review the transaction and transaction documentation with legal counsel for the
Issuer, Bond Counsel, auditors and other experts and consultants retained by the
Issuer and assist in developing appropriate responses to legal processes, audit
procedures, inquiries, internal reviews and similar matters.
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Section 3. Term of Agreement. This Agreement shall become effective as of January
25, 2016 and, unless sooner terminated by either party pursuant to the terms of this
Agreement, shall remain in effect thereafter for a period of five (5) years from such date.
Unless FirstSouthwest or the Issuer shall notify the other party in writing at least forty-
five (45) days in advance of the applicable anniversary date that this Agreement will not
be renewed, this Agreement will be automatically renewed on the fifth 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 (1) year periods, for a maximum
term, including all renewals, of ten (10) years.
Section 4. Termination. This Agreement may be terminated with or without cause by
the Issuer or FirstSouthwest upon the giving of at least forty-five (45) 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 5. 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 Issuer 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 6. Personnel. Edward D. Stull, Jr., Managing Director, will be assigned to
work with County as Financial Advisor. If, for any reason, personnel assigned is
changed or replaced, the County has the right to immediately terminate this Agreement.
The County has the right to approve, disapprove, or request, for any reason,
FirstSouthwest to replace any personnel assigned by FirstSouthwest to the account.
Should the County make such a request, FirstSouthwest shall promptly suggest a
substitute until a satisfactory substitute is selected.
Section 7. Indemnification. To the fullest extent permitted by law, FirstSouthwest
shall indemnify and hold harmless the County, its commissioners, officers, and
employees from liabilities, damages, losses and costs including, but not limited to,
reasonable attorney's fees, to the extent caused by the negligence, recklessness, or
intentional wrongful conduct of FirstSouthwest and other persons employed or utilized
by FirstSouthwest in the performance of this Agreement.
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Section 8. Insurance. FirstSouthwest shall not commence to perform the Services or
Additional Services under this Agreement until it has obtained all of the insurance
required under this Agreement and such certificates of insurance have been approved
by the County's Risk Manager. A certificate of insurance shall be provided to the
County's Risk Manager for review and approval ten days prior to commencement of any
work under this Agreement. The insurance company must have a rating by A.M. Best
Company of at least A: V. Such certificates of insurance or an endorsement provided
by FirstSouthwest must state that the County will be given thirty days' prior written
notice prior to cancellation or material change in coverage. The County shall be named
as an additional insured on all policies except workers' compensation. FirstSouthwest
shall procure and maintain, for the duration of this Agreement, the minimum insurance
coverage as set forth herein, and the cost of such insurance shall be included in
FirstSouthwest's fee.
A. Workers Compensation and Employers Liability: Workers Compensation limits
as required by the State of Florida and employers Liability limits of $500,000.00
disease (policy limit) and $100,000 disease (each employee).
B. Commercial General Liability: Minimum combined single limit of $500,000 per
occurrence for bodily injury and property damage. This is to include
premises/operations, products/completed operations, contractual liability and
independent contractors coverage.
C. Business Auto Liability: Minimum combined single limit of $500,000 per
occurrence for bodily injury and property damage. This is to include owned,
hired, and non -owned autos.
D. Professional liability: Minimum limit of $1,000,000 per occurrence.
The County, through its Risk Manager, reserves the right to periodically review any and
all policies of insurance and reasonably adjust the limits of coverage required
hereunder, from time to time throughout the term of this Agreement. In such event, the
County shall provide FirstSouthwest with separate written notice of such adjusted limits
and FirstSouthwest shall comply within thirty days of receipt thereof. The failure of
FirstSouthwest to provide such additional coverage shall constitute a default by
FirstSouthwest and shall be grounds for termination of this Agreement by the County.
Section 9. Miscellaneous.
A. The Background recitals are true and correct and form a material part of this
Agreement.
B. County Designee. The County Administrator is hereby designed as the
representative of the County. All work performed by FirstSouthwest pursuant to
this Agreement shall be by the direction of the County acting through the County
Administrator or his or her designee.
C. Independent Contractor. It is specifically acknowledged and agreed by the
parties hereto that FirstSouthwest is and shall be, in the performance of all
Services and activities under this Agreement, an independent contractor, and not
an employee, agent or servant of the County. All persons engaged in any of the
Services performed pursuant to this Agreement shall at all times, and in all
places, be subject to FirstSouthwest's sole discretion, supervision, and control.
FirstSouthwest shall exercise control over the means and manner in which
FirstSouthwest and its employees perform the Services, and in all respects
FirstSouthwest's relationship and the relationship of its employees to the County
shall be that of an independent contractor performing solely under the terms of
the Agreement and not as employees, agents, or servants of the County.
D. Governing Law; Venue; Attorney Fees. This Agreement shall be construed,
governed and interpreted according to the laws of the State of Florida. Venue for
any lawsuit brought by either party against the other party or arising out of this
Agreement shall be in Indian River County, Florida or, in the event of federal
jurisdiction, in the United States District Court for the Southern District of Florida.
Each party shall bear its own attorney fees in any dispute arising under this
Agreement.
E. Remedies; No Waiver. All remedies provided in this Agreement shall be deemed
cumulative and additional, and not in lieu or exclusive of each other or of any
other remedy available to either party, at law, or in equity. Each right, power,
remedy of the parties provided in this Agreement shall be cumulative and
concurrent and shall be in addition to every other right, power or remedy
provided for in this Agreement or now or hereafter existing at law or in equity or
by statute or otherwise. The failure of either party to enforce any provision of this
Agreement, or the waiver thereof, in any specific instance by either party shall
not be construed as a general waiver or relinquishment on its part of such
provision in any other instance, and such provision shall nevertheless remain in
full force and effect.
F. Severability. If any term or provision of this Agreement, or the application thereof
to any person or circumstance shall, to any extent, be held invalid or
unenforceable for the remainder of this Agreement, then the application of such
term or provision to persons or circumstances other than those as to which it is
held invalid or unenforceable shall not be affected, and every other term and
provision of this Agreement shall be deemed valid and enforceable to the extent
permitted by law.
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G. Availability of Funds. The obligations of the County under this Agreement are
subject to the availability of funds lawfully appropriated for its purpose by the
Board of County Commissioners of Indian River County.
H. No Pledge of Credit. FirstSouthwest shall not pledge the County's credit or make
it a guarantor of payment or surety for any contract, debt, obligation, judgment,
lien or any form of indebtedness.
I. Public Records Compliance.
1. Indian River County is a public agency subject to Chapter 119, Florida
Statutes. FirstSouthwest shall comply with Florida's Public Records Law.
Specifically, FirstSouthwest shall:
a. Keep and maintain public records that ordinarily and necessarily would
be required by the County in order to perform the service.
b. Provide the public with access to public records on the same terms
and conditions that the County would provide the records and at a cost
that does not exceed the cost provided in chapter 119, Florida Statutes
or as otherwise provided by law.
c. Ensure that public records that are exempt or confidential and exempt
from public records disclosure requirements are not disclosed except
as authorized by law.
d. Meet all requirements for retaining public records and transfer, at no
cost, to the County all public records in possession of FirstSouthwest
upon termination of the Agreement and destroy any duplicate public
records that are exempt or confidential and exempt from public records
disclosure requirements. All records stored electronically must be
provided to the County in a format that is compatible with the
information technology systems of the County.
2. Failure of FirstSouthwest to comply with these requirements shall be a
material breach of this Agreement.
J. Notices. Any notice, request, demand, consent, approval, or other
communication required or permitted by this Agreement shall be given or made
in writing and shall be served, as elected by the party giving such notice, by any
of the following methods: (a) Hand delivery to the other party; (b) Delivery by
commercial overnight courier service; or (c) Mailed by registered or certified mail
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(postage prepaid), return receipt requested at the addresses of the parties shown
below:
If to County
If to FirstSouthwest
County Administrator
Indian River County
1801 27th Street
Vero Beach, Florida 32960
Edward D. Stull, Jr.
Managing Director
FirstSouthwest
450 S. Orange Avenue, Suite 460
Orlando, FL 32801
Notices shall be effective when received at the address as specified above. Either party
may change its address, for purposes of this section, by written notice to the other party
given in accordance with the provisions of this section.
K. Survival. Except as otherwise expressly provided herein, each obligation in this
Agreement to be performed by FirstSouthwest shall survive the termination or
expiration of this Agreement.
L. Construction/Interpretation of Agreement. Each party has participated equally in
the negotiation and drafting of this Agreement. In the event that an arbitration
panel or court is required to interpret any provision of this Agreement, the
provision shall not be interpreted for or against either party upon the basis that
such party was or was not the preparer of this Agreement.
M. Sovereign Immunity. Nothing herein shall constitute a waiver of the County's
sovereign immunity.
N. No Third Party Beneficiaries. Except as otherwise expressly provided herein,
this Agreement is solely for the benefit of the named parties, and no enforceable
right or cause of action shall accrue hereunder to or for the benefit of any entity
or individual not a named party hereto.
O. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all which together will constitute
one and the same instrument.
P. Entire Agreement; Amendments. This Agreement constitutes the entire
agreement between the parties and supersedes all previous discussions,
understandings, and agreements between the parties relating to the subject
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matter of this Agreement. Amendments to and waivers of the provisions of this
Agreement shall be made by the parties only in writing by written amendment or
other appropriate written document.
IN WITNESS THEREOF, Issuer and FirstSouthwest have caused this Agreement to be
executed in their respective names as of the date entered below.
ATTEST: Jeffrey R. Smith, Clerk of BOARD OF COUNTY COMMISSIONERS,
Court and Comptroller INDIAN RIVER COUNTY ("Indian Rivgx
County")
By: B,
Depu y Clerk
.•�y c �'. ss
(Affix Seal)
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Approved: =moo•., A
By:
Jason. Brqwn
Count Ad inistrator
c -?::�7
0o p E. Flescher, Chai
�oved by BCC: January 19, 201
oYoved as to form and legal sufficiency:
By:
,,fDylan Reingold
County Attorney
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FIRSTSOUTHWEST,
a Division of Hilltop Securities Inc.
r
By:
Hill A. Feinberg, Chairman
Chief Executive Officer
rpt
Edward D. Stull, Jr.
Managing Director
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APPENDIX A
The fees due FirstSouthwest for the services set forth and described in this Agreement with respect to
each issuance of Debt Instruments during the term of the 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
Managing Director/Director:
Vice President:
Assistant Vice President:
Analyst/Associate:
Administrative:
Rate per Hour
$175/hr.
$120/hr.
$120/hr.
$120/hr.
$40/hr.
B. The fees due the FirstSouthwest for the services with respect to each issuance of Debt Instruments
(bonds, bank loans, etc.) 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 Issuer 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.
Debt Transaction Fee
$1.20 per $1,000 for the first $20,000,000 of debt instruments, plus
$0.75 per $1,000 for amounts greater than $20,000,000 of debt instruments
Minimum $15,000 per transaction
C. The County shall be responsible for typical transaction related expenses if and when applicable,
whether they are charges directly to the County as expenses or charged to the County by
FirstSouthwest as reimbursable expenses. The payment of reimbursable expenses that FirstSouthwest
has assumed on behalf of the County 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 submitted by
FirstSouthwest. Proposed charges may include items as listed below.
- Travel, lodging and meals, provided travel occurs in coach
- Courier services, facsimile, and photocopies
- Conference call charges
- Third party expenses, such as advertising, incurred on behalf of the County
D. Fees for ancillary services including continuing disclosure, arbitrage rebate, asset management,
structured products, pension and OPEB trusts, and non-traditional services will be based on a mutual
agreed upon fee.
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