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HomeMy WebLinkAboutContracts & Agreements_149-2013_CCv0001.pdf OUTLINE CDS`INVESTMENT MENT BANKING SCOPE OF SERVICES CITY CDS'REDLANDS REDLANDS FINANCING AUTHORITY PROPOSED 2013SOLID WASTE ENTERPRISE FUND FINANCING CING Mayor Pete Aguilar and City Council Chairperson and Board Members City of Redlands City of°Redlands 35 Cajon Street 35 Cajon Street Redlands.CA 92373-1505 Redlands, CA 923;73-1505 Ladies and Gentlemen: This later will serve as an agreement between the City of Redlands the `City") and the Redlands ds Financing Authority fthe "Authority"), and Citigroup Global Markets Inc ("Citi" or "Uncle iter") to serve as the underwriter to the City ar d the Authority until the parties enter into a Bond purchase Agreement (the "Bond Purchase Agr anent") to the Bonds to be authorized and sold by the City in conjunction with the Authority. As used herein, "Citi" or "CG? I„ shall mean C tigr€up Global Markets Inc. andior any affiliate thereof, as we determine appropriate to perform the services described herein, We understand that the Authority intends to issue the bonds (the "Bonds" or "Offering„) totaling approximately S113,000,000, , secured by net revenues of the solid waste system owned and operated by the system(the" oiid Waste Fund".), The scope of services and conditions outlined its this letter are designed to be compliant with MSRB Pule G-I,the disclosure d requirements of G-17 supersede any provisions set forth herein. For this purpose, the City and the .Authority desire the services of the Underwriter to assist in the structuring, financing, marketing and eventual sale of the Bonds to investors,As the Underwriter for the proposed Bonds,Citi will use its best efforts to bring the bonds to market at the most favorable interest rates practicable give the structure and credit quality of the Bonds and given the market conditions existing at the time of their sale. The City, the Authority, and the Underwriter shall mutually agree upon the date of sale, which shall be scheduled so that proceeds may be delivered to the Cit=y and the Authority for the purpose of timely meeting their objectives. Nothing in this agreement shall obligate the City, the Authorit=y or the Underwriter to enter into tate Bond Purchase Agreement, As Underwriter,we agree to assist in the efforts of structuring and marketing the Bonds, L Citi Will Assist in the Structuring of the Proposed Bonds A, Citi will work with the City and the Authority,their Bond Counsel, Disclosure Counsel and the financial advisor to the City and the Authority ("Financial Advisor`) as well as other members of the City's and Authority's financing team in evaluating specific terms and conditions affecting the Bonds with the purposes ofmeeting the City's and Authority's financing objectives and assuring appropriate credit quality, B, Citi will work with the City and the Authority and their financial Advisor to design a feasible structure for the bonds that may help to enhance the Bands' marketability, C. If requested, the Underwriter will assist the City; the Authority and Financial Advisor in identifying a suitable investment vehicle for Bond proceeds that are deposited to the construction find, Waffle Citi will not provide any recommendations on which securities to invest, CG II does have the altili v to famish reports that illustrate: funding options. Citi will assist the City; the Authority also Financial Advisor in preparing material for review by credit rating agencies and any bond insurer (as applicable), While Citi will not be held accountable for the hifor atiors contained in said material, Citi will participate in any credit rating presentations to such rating agencies and insu ers- 'Docu erits and Serfingsl 126 call We fingslfemporary I timet FilesIOLK20M.Ciligroup Global Markets 7-1 1-13 as of 7-16,doex It. Citi Will Assist In Marketing the Bonds A. At least one day prior to the submission of any formal offer to the City and the Authority for the purchase of the Bonds,Citi will indicate to the City, the Authority, and the Financial Advisor the anticipated interest rate or rates on the Bonds,the purchase price from the City and the Authority and the public offering V.ice of the Fonds that the Underwriter then estimates will be included in such offer, This indication does not represent a firm bid or bona fide offer but is to be interpreted as solely preliminary and subject to change based on market conditions, Citi will coordinate with the Financial Advisor to develop a set of transaction comparables that demonstrate similar credit., structure and security qualities as the proposed Boards; these comparables will be presented to the City and the Authority for review. B. At the designated time for sale of the Bonds, Citi will submit an offer to the City and the Authority to purchase the Bonds by way of the Bond purchase Agreement. At the time of execution all provisions and conditions provided in the Bond Purchase Agreement shall supersede those provided herein. The purchase offer will be executed subject to pertinent resolutions of the City and the Authority, the Official Statement, and all other necessary documents, approvals and proceedings governing ing such Bonds having beer determined by Bond CoupseL City Attorney,the City,the Authority,and Citi to be satisfactory in all respects for financing purposes. it is intended that once purchased, the Brands will be re-offered to the public on the basis of a bona fide public offering. C. The fee for theUnderwriter's services will be taken in the form of a discount purchase of the Bards and, unless specifically agreed to otherwise, is fully contingent upon the sale of the Boards. Our final fee will be reasonably agreed to by the City and the Authority taking into consideration the underlying rating of the Boards and prevailing market conditions, subject to review of the City's and Authority's Financial Advisor. The not-to- exceed fee is$3.00 per 1,000 of parr amount of Brands. itt, General Provisions A. The City and the Authority agree to make available to the Underwriter and its counsel without cost, sufficient copies of any applicable reports, agreements, contracts, resolutions, and other relevant documents regarding the City and the Authority, the Solid Waste Enterprise, and the Bonds as reasonably may be required from time to time for the prompt and efficient performance by Citi of its obligations. B. The City and the Authority, in conjunction with the Financial Advisor and Disclosure Counsel, will prepare the Official Statements (preliminary and final versions) for sale of the Bonds in accordance with the standards of Rule l5c2-l21 of the Securities and Exchange Commission and other applicable securities laws. The (ficial Statement will include a description of the Bonds, the City and Authority, and pertinent financial and economic data relating to the City; the Authority and the Solid Waste Fund. All material disclosures, including but not limited to liabilities, litigation and risk factors will be clearly stated in the Preli€dnary and Final Official Statements.The approval,execution and delivery of the Official Statement will be authorized by the City and the Authority for use by Citi in marketing the Bonds. C. Citi will pay its own out-oaf-pocket and other expenses, including the oast of any legal counsel which may be retained by Citi,and any advertising expenses in connection with the public offering of the Bonds, D, The City and the Authority will pay from proceeds of the Bonds, or otherwise, all customary costs and expenses including the coast of preparing,printing and distributing the Official Statement and any salter documents,the fees and expenses of their counsel, Bond Counsel and Disclosure Counsel, fees to rating agencies, fees and expenses of their Financial Advisor,T =stee foes and expenses,expenses incurred:or behalf ofthe City and the Authority's employees which are incidental to implementing this agreement, including, but not limited to, meals, transportation, lodging, and entertainnnent of those employees and costs of any other experts or consultant retained by the City and the Authority in connection with the financing, E.. The City and the Authority will make their own independent decisions to enter into this transaction and as to whether the transaction is appropriate or proper for there based upon their ow t judgment and upon advice from such advisors as they have deemed necessary, including their Financial Advisor. They are not relying on any communication(written or oral)of Citi as investment advice or as a recd mmendatioara to enter into the transaction, C.=.)Ocu arenas and , nicpi2699rToc =Seetfingsvremporary Irt rnet Files LK20EA if roup Global Markets 7-11-13 of 7_€6.; x F It is understood and agreed that Citi (including iti's employees, is an independent contractor and that no fiduciary relationship exists between the parties, It is g� er understood and agreed, that as independent contractors and not employees or agents of the Ci ty or the Authority, neither Citi nor assigned personnel shall have any entitlement as any City or Authority employee,right to act on behalf of the Gity r the Authority in any- capacity whatsoever as agent nor to bind the City or the Authority to any obligation whatsoever. , Upon ltd days written notice to Citi, the City or the Authority may terminate this agreement with cause arid. in the event the termination for cause is the result of Citi failing to Performadequately the services outlined in Sections or B the CAV or the Authority may continue to pursue the sale of the ends without any farther obligation or compensation for Citi. H, Unless required by law, regulatory authority, gove mental authority or permitted under the governing bond purchase agreement,neither termination of this agreernent nor notice thereof may be given:(t)less than ten(10) business days prior to scheduled pricing;and the sa?e of the Bands,or( )during the time period from the sale elate of the bonds through and including the closing dates I, This agreement as not a commitment, express or implied, on the part of Citi to underwrite or purchase the Securities or to commit any capital, nor does it obligate Citi to eater into ars underwriting agreement, Bond Purchase Agreement or similar commitment to finance. Citi's participation in any Offering will be subject to, among other things, (i) satisfactory completion of all documentation for the Offering (including a disclosure document and an underwriting agreement),- (iD satisfactory completion of a customary due diligence review; (iii) in our determination, the absence of any material adverse charge in the financial markets or in the financial condition,operations or prospects of the Company, (iv)receipt of all required governmental and other approvals and appropriate legal opinions, including a iOb-5 disclosure opinion from counsel acceptable to itigroup, and (v)approval of our internal comm(m ent committee. 1. The City and the Authority hereby agree that;prior to the consummation of the Offering or the termination of this agreement(whichever is earlier), they will not otherwise issue debt on a senior or parity lien with the propose offering without our prier written consent. K, This agreement may be terminated by Citi at any time or by the City and the Authority at any time,without cause after 180 gays from the date hereof upon written notice unless such termination is prohibited by Section li ofth s - agrmeat. The provisions set forth regarding indemnification shall survive any termination ofthis agreetnent, L The City and the Authority acknowledge that they are not relying on the advice of Citl for tax, legal or accounting matters, they will seek and rely on the advice oftheir town professionals and advisors for such matters and will make an independent analysis and decision regarding any Offering based upon such advice, M. "his agreement may not be amended except in writing signed by all parties hereto. The City and the Autho$ity may not assign or delegate any of their rights or obligations hereunder without our prior written consent, C .Doc n its and S tfirigskzp12699,Loc e en sTernpar i-y z tercet RbvOLIK20D' ata ro�,j (3!obal.Marl eUS f-t i-i3 asof-l6. o x Upon your acceptance set fob below, this letter will constitute an a&reement between the CiVy and the Authority and the undersigned, Very truly yours, ITI iROUP GLOBALIMARKETS INC Cameron Parks,Director Dated:July 16,2013 This Agreement is executed on this lbs`day of July, 2013, at Redlands, Cafifomia and effective as of this 16'h day of July, 2013. REDLA I S FINANCING AUTHORITY CITY OF RMLANDS Pete Aguilar,Chairperson PeteAguilar,- sir Attest: Attest; ;gym irwin City 'erk Sari Irwin,C qtr vftit ep12699'feral Seg inns'iemnorary"rte stmt €:s, t -20D' =.grnu to aI Markets`,-11-13 of`�-1&docx