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96-05 R - Financial Advisory Agreement with First Southwest Company RESOLUNTION NO . 96-05 AGREEMENT FOR FINANCIAL ADVISORY SERVICES By and Between CITY OF PROSPER,TEXAS And FIRST SOUTHWEST COMPANY This Agreement is entered into by and between the City of Prosper, Texas, (the "Client") and First Southwest Company("The Company"), effective as of the date of execution by the Client. 1. This Agreement shall apply to any and all competitive sale debt obligations that may be authorized and issued by or on behalf of the Client (hereinafter referred to collectively as the "Debt Instruments")from time to time during the period in which this Agreement shall be effective. 2. The Company agrees to provide its professional services as Financial Advisor and agrees to coordinate all programs of financing as may be considered during the period in which this Agreement shall be effective and to assume those expenses set out in Appendix A, provided, however, that its obligations to pay expenses shall not include any costs incident to litigation, mandamus action, test case or other similar legal actions. 3. The Client has retained, or will retain municipal bond attorneys ("Bond Counsel"). 4. The Company agrees to perform the following duties and all other duties as, in its judgment, may be necessary or advisable: a. The Company will conduct a survey of the financial resources of the Client to determine the extent of its capacity to authorize, issue and service debt. This survey will include an analysis of 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, and present and future taxing requirements of the Client. In the event revenues of existing or projected facilities operated by the Client 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, as well as additional revenues to be available from any additional revenues, as projected by consultants employed by the Client. The Company will also take into account future financing needs and operations as projected by the Client's staff and consultants, if any, employed by the Client. • b. The Company will provide to the Client its recommendations on the Debt Instruments under consideration including such elements as the date of issue, interest payment dates, principal payment dates, options of prior payment, security provisions, and any other additional provisions designed to make the issue attractive to investors. c. The Company will advise the Client of current bond market conditions, forthcoming bond issues and other general information and economic data which, in the judgment of the Company could be expected to influence interest rates so that the date of sale of the Debt Instruments may be set at a time which,in the opinion of The Company,will be favorable. d. In the event it is necessary to hold an election to authorize the Debt Instruments then under consideration, the Company will assist in coordinating the assembly and transmittal to Bond Counsel of such data as may be required for the preparation of necessary petitions, orders, resolutions, ordinances,notices and certificates in connection with the election. e. The Company will recommend the method of sale of the Debt Instruments that, in its opinion, is in the best interest of the Client and will proceed, as directed by the Client, with one of the following methods: i. Competitive Sale: The Company will supervise the sale of the Debt Instruments at a competitive sale in accordance with procedures set out herein. The Company reserves the right, alone or in conjunction with others, to submit a bid for any Debt Instruments issued under this Agreement which the Client advertises for competitive bids. In compliance with Rule G-23 of the Municipal Securities Rulemaking Board, the Company will request consent to bid in writing, in any instance wherein the Company elects to bid, prior to submitting a bid for each installment of Debt Instruments. ii. Other Methods of Sale: The Company will supervise and develop the plan of sale deemed most appropriate for the transaction contemplated. An additional fee for services not anticipated under this contract will be negotiated with the Client prior to sale. f. The Company will advise financial publications of the forthcoming sale of the Debt Instruments and provide them with all pertinent information,when appropriate. g. The Company will coordinate the preparation of the Notice of Sale and Bidding Instructions, Official Statement, Official Bid Form and such other documents as may be required. The Company will submit to the Client all such documents for examination, approval and certification. After such examination, approval and certification, the Company will provide the Client with a supply of all such documents sufficient to its needs and will distribute by mail sets of the same to prospective bidders and to banks, life, fire and casualty insurance companies, investment counselors and other prospective purchasers of the Debt Instruments. The Company will also provide sufficient copies of the Official Statement to the purchaser of the Debt Instruments in accordance with the Notice of Sale and Bidding Instructions. The expenses associated with printing and distribution of these documents will be paid by the Client. • h. The Company will arrange for such reports by consultants deems necessary by the Company for the successful marketing of the Debt Instruments. i. Subject to the approval of the Client, the Company will organize and make arrangements for such information meetings as, in the judgment of The Company, may be necessary. j. The Company will make recommendations to the Client as to the advisability of obtaining a credit rating, or ratings, for the Debt Instruments and, when directed by the Client, The Company will coordinate the preparation of such information as, in the opinion of the Company, is required 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, the Company will arrange for such personal presentations. k. The Company will make recommendations to the Client as to the advisability of obtaining municipal bond insurance or other credit enhancement, or qualifications for same, for the Debt Instruments and, when directed by the Client, the Company will coordinate the preparation of such information as, in the opinion of The Company, is required for submission to the appropriate company,institution or institutions. In those cases where the advisability of personal presentation of information to the appropriate company, institution or institutions, may be indicated, The Company will arrange for such personal presentations. 1. The Company will assist the Client at any competitive sale of Debt Instruments in coordinating the receipt and tabulation of bids and the Company will advise the Client as to the best bid. The Company will provide the Client with its recommendation as to acceptance or rejection of such bid. m. The Company will coordinate the efforts of all concerned to the end that the Debt Instruments may be delivered as expeditiously as possible. The Company will assist the Client in the preparation or verification of final closing figures incident to the delivery of the Debt Instruments. n. The Company will maintain liaison with Bond Counsel in the preparation of all legal documents pertaining to the authorization, sale and issuance of the Debt Instruments. It is understood that Bond Counsel will provide an unqualified legal opinion as to the legality of the issuance of the Debt Instruments at the time of delivery. o. If requested, the Company will advise the Client with respect to the selection of a Paying Agent/Registrar for the Debt Instruments, and will assist in the preparation of agreements pertinent to these services. p. In the event formal verification by an independent auditor of any calculations incident to the Debt Instruments is required, the Company will make arrangements for such services. q. The Company agrees to coordinate, at the Client's expense, all work incident to printing of the Debt Instruments, obtaining approval, as may be required by the Attorney General, registration by the Comptroller of Public Accounts and delivery to the purchaser. r. After the closing of the sale and delivery of the Debt Instruments, the Company will deliver to the Client a schedule of annual debt service requirements on the Debt Instruments. In coordination with Bond Counsel, the Company will assure that the Paying Agent/Registrar has been provided with a copy of the authorizing ordinance, order or resolution. s. The Company will attend any and all meetings of the governing body of the Client, its staff, representatives or committees as requested at all times when we may be of assistance or service and the subject of financing is to be discussed. t. The Company will advise the Client of changes, proposed or enacted, in Federal and State laws and regulations which would in the opinion of the Company significantly affect the municipal bond market. u. The Company will work with the Client, its staff and any consultants employed by the Client in developing financial feasibility studies and analyzing alternative financing plans. 5. In addition to the services set out above, the Company agrees to provide the following services when so requested: a. The Company will provide its advice as to the investment of certain funds of the Client. The Company will, when so directed, purchase those investments authorized to be purchased and the Company will charge a normal and customary commission for each such transaction. b. The Company will provide its advice and assistance with regard to exercising any call and refunding of any outstanding Debt Instruments. c. The Company will provide its advice and assistance in the development of, and financing for, any capital improvements programs of the Client. d. The Company will provide its advice and assistance in the development of the long-range financing plan of the Client. e. The Company will provide any other appropriate services when so requested by the Client for such fee as is mutually agreed upon by the Client and the Company. 6. The fee due to the Company in accordance with Appendix A which is attached hereto and incorporated herein, any other fees as may be mutually agreed and all expenses for which the Company is entitled to reimbursement, shall become due and payable concurrently with the delivery of the Debt Instruments to the purchaser. • 7. This Agreement shall become effective at the date of acceptance by the Issuer set out herein below and shall remain in effect thereafter for a period of five (5) years from the date of acceptance. This Agreement will be automatically renewed for successive one (1) year periods on each anniversary date unless otherwise terminated, in writing, by either party. This Agreement may be terminated without cause by the Issuer or First Southwest upon thirty (30) days' written notice to the other party. In the event of such termination, it is understood and agreed that only the amount due First Southwest 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. This Agreement is submitted in triplicate originals. When accepted by the Client, it, together with Appendix A attached hereto, will constitute the entire agreement between the Client and the Company for the purposes herein specified. Acceptance will be indicated by the signature of authorized officials of the Client on all three copies and the return of two executed copies to the Company. Respectfully submitted, FIRST SOUTHWEST COMPANY By /I at,,t Hill A.Feinberg President and Chief Executive Officer By `' 1 Jason N.Wilcox Associate ACCEPTANCE CLAUSE The above and foregoing is hereby in all things accepted and approved by the CITY COUNCIL , on this the 13th day of FEBRUARY 1996. By: Mayor Al"1EST: _ - -Ci ere ary (SEAL) APPENDIX A In consideration for the financial advising services rendered by FSWC in connection with the authorization and issuance of Debt Instruments, it is agreed that the Issuer shall pay FSWC a fee in accordance with the schedule below. Such fee shall become due and payable upon the delivery of the Debt Instruments to the purchaser. Base Fee-Any Issue $ 4,000 Plus $10.00 per $1,000 up to $ 250,000 Plus $9.00 per $1,000 next $ 250,000 Plus $6.00 per $1,000 next $ 500,000 Plus $4.00 per $1,000 next $ 1,500,000 Plus $2.50 per $1,000 next $ 2,500,000 Plus $1.75 per $1,000 next $ 5,000,000 Plus $1.25 per $1,000 next $ 10,000,000 Plus $1.00 per $1,000 next $ 10,000,000 The above charges shall be multiplied by 1.25 times for the completion of an application to a federal or State government agency or for the issuance of revenue bonds, reflecting the additional services required. The charges for ancillary services, including computer structuring and official statement printing, shall be levied in accordance with the applicable Internal Service Charge schedules of FSWC. The Issuer will be responsible for the payment of the expenses listed below. The payment of reimbursable expenses that FSWC has assumed on behalf of the Issuer shall not be contingent upon the delivery of the Debt Instruments. • Bond counsel • Bond printing • Bond ratings • Computer structuring • Credit enhancement • Official statement printing • Paying agent/registrar/trustee • Travel expenses of Company personnel, with prior approval • Underwriter and underwriters counsel • Miscellaneous,including copy, delivery, and phone charges