RDAP-2012-05 - 2012-02-20 RESOLUTON NO. RDAP R2012-05
A RESOLUTION OF THE DEVELOPMENT AUTHORITY OF
PEARLAND (DAP), TERMINATING SERVICES WITH RBC CAPITAL
MARKETS AND APPROVING AN AGREEMENT FOR FINANCIAL
ADVISORY SERVICES WITH BOSC, INC.
BE IT RESOLVED BY DAP BOARD OF DIRECTORS:
Section 1. That the Development Authority of Pearland, TX hereby
terminates services with RBC Capital Markets.
Section 2. That the Development Authority of Pearland, TX hereby
approves the Financial Services Agreement with BOSC, as attached.
PASSED, APPROVED, AND ADOPTED this 20th day of February. A.D
2012.
Taa
DAP CHAIRMAN
ATTEST:
Ee
DAP SECRETARY
BOSC,Inc.
A subsidiary of 80K Financial Corp
Public Finance Division
1401 McKinney Street,Suite 1650
Houston,TX 77010
Tel. 713.289.5899
Fax 713.354.0255
AGREEMENT FOR FINANCIAL ADVISORY SERVICES
This Agreement for Financial Advisory Services (the "Agreement") by and between the
DEVELOPMENT AUTHORITY OF PEARLAND, a political subdivision of the State of Texas
("Issuer"), and BOSC, INC. ("Advisor"), is entered into and effective as of the date executed by
the Issuer, as set forth on the signature page hereof.
I. BACKGROUND
Section 1. The Issuer expects to 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, the Issuer desires to retain a financial advisor.
Section 2. The Issuer desires to obtain the professional services of Advisor to advise
the Issuer regarding the execution, 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 "Issuer Obligations") from time to time during the
period in which this Agreement shall be effective.
Section 3. Advisor represents and warrants to Issuer that Advisor has the professional
licenses, certificates, knowledge, expertise and experience to provide the services set forth in this
Agreement. Advisor is willing to provide its professional services and 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.
II. SCOPE OF BASIC SERVICES
Advisor agrees to provide the Issuer with the services identified in Exhibit A.
III. ADDITIONAL SERVICES
In addition to the services described in Article II, Advisor agrees to perform and make
available to Issuer the services identified in Exhibit B, when so requested by the Issuer. The
terms of the services identified in Exhibit B shall be set forth as an amendment to this
Agreement or in a separate document.
IV. TERM OF AGREEMENT
This Agreement shall become effective as of the date executed by the Issuer as set forth
on the signature page hereof and, unless terminated by either party pursuant to Article V of this
Agreement, shall remain in effect thereafter for a period of five (5) years from such date. Unless
Advisor or Issuer notify the other party in writing at least thirty (30) days in advance of the
Broker D ler Ser ices and Securities offered ny but:" _r, an.B ,e i.te d n%estmerit ad,ser a registered broker deaier member FINRh.jLV EC.regis ration does of imply a ce,lain level of
k u er 1 a ling Insurance offe ed by BOSS aen y .n c an affiliat a apeuy ir,estments a d irs I an;e a,e not insured by kDIC are rcl deposits „rfher obliaaIions of and are not guaranteed by
any hank or bank a filiate Investments are suC.ct In r' i inciudinn possible IC.,c of p.incipa amount invested
applicable anniversary date that this Agreement will not be renewed, this Agreement will be
automatically renewed if mutually agreed upon by Advisor and Issuer on the fifth anniversary of
the date hereof for an additional five (5) year period.
V. TERMINATION
This Agreement may be terminated with or without cause by the Issuer or Advisor upon
the giving of at least thirty (30) days' prior written notice to the other party of its intention to
terminate, specifying in such notice the effective date of such termination. Advisor may not
terminate for the express purpose of taking an underwriting position in any bonds to be issued by
the Issuer. In the event of such termination, it is understood and agreed that only the amounts
due Advisor 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 by either party.
VI. COMPENSATION AND REIMBURSEMENT
The fees due to Advisor for the services described in Article II of this Agreement with
respect to each issuance of Issuer Obligations during the term of this Agreement shall be
calculated in accordance with the schedule set forth on Appendix A attached hereto.
Except to the extent specifically provided otherwise by this Agreement or assumed in
writing by Advisor, the Issuer shall reimburse Advisor for expenses incurred in connection with
the performance of services hereunder, including reasonable expenses described in Appendix A.
Unless specifically provided otherwise on Appendix A or in a separate written agreement
between Issuer and Advisor, such fees, together with any other fees as may have been mutually
agreed upon and all expenses for which Advisor is entitled to reimbursement, shall become due
and payable concurrently with the delivery of Issuer Obligations.
VII. MISCELLANEOUS
Section 1. While this Agreement is in effect, the Issuer will provide or cause to be
provided to Advisor information concerning the Issuer, including information relating to the
Issuer's financial condition and results of operations, the sources of security and payment for any
Issuer Obligations, and such other information (excluding confidential information unless such
confidential information is reasonably required to provide disclosure to investors) as Advisor
reasonably considers necessary or appropriate to perform its duties under this Agreement. Such
information will be taken or derived from the Issuer's official records or from other sources that
the Issuer determines and reasonably believes to be accurate and reliable, based on due inquiry
and investigation by the Issuer of such other sources; and, the Issuer expressly authorizes
Advisor to rely on the accuracy and completeness of all information provided to Advisor by or
on behalf of the Issuer.
Section 2. As an inducement to Advisor to enter into this Agreement and to perform
the duties assigned to it hereunder, the Issuer agrees to comply with all applicable requirements
and procedures imposed by law relating to, and all covenants and agreements entered into in
connection with or supporting, the validity, enforceability and terms (including terms relating to
security and tax-exemption) of any Issuer Obligations. As an inducement to Issuer to enter into
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this Agreement and to perform the duties assigned to it hereunder, the Advisor agrees to comply
with all applicable requirements and procedures imposed by law relating to, and all covenants
and agreements entered into in connection with or supporting, the validity, enforceability and
terms (including terms relating to security and tax-exemption) of any services by Advisor.
Further Advisor represents and warrants to Issuer that Advisor is familiar with the applicable
law, rules, regulations, and requirements in order for Advisor to perform Advisor's professional
services as a highly qualified and competent provider of said financial services.
Section 3. All actions and recommendations of Advisor pursuant to this Agreement
will be based on Advisor's professional judgment and information that the Issuer provides to
Advisor. Advisor's recommendations represent its professional judgment based upon Advisor's
review of information provided by the Issuer, to the extent that Advisor deems such information
relevant to any such recommendation, and Advisor's own knowledge and experience. Advisor's
recommendations will be offered in reliance upon the representations and covenants contained in
the agreements, certificates and other instruments prepared, executed and delivered in connection
with Issuer Obligations. The Issuer understands and agrees that this Agreement shall constitute
an agreement for professional services, and neither the performance by Advisor of its duties
hereunder nor the implementation of any of Advisor's recommendations shall be construed by
the Issuer as a guarantee of any result or outcome.
Section 4. This instrument contains the entire agreement between the parties relating
to the rights herein granted and obligations herein assumed. Any oral or written representations
or modifications concerning this Agreement shall be of no force or effect except for a subsequent
modification in writing signed by all parties hereto.
Section 5. If any provision of this Agreement shall be held or deemed to be or shall,
in fact, be invalid, inoperative or unenforceable as applied in any particular case because it
conflicts with any provision or provisions of any constitution, statute, rule of public policy, or
any other reason, such circumstances shall not have the effect of rendering the provision in
question invalid, inoperative or unenforceable in any other case or circumstance, or of rendering
any other provision or provisions of this Agreement invalid, inoperative or unenforceable to any
extent whatever.
Section 6. Any notice or other communication to be given to the Issuer under this
Agreement may be given by delivering the same in writing to the Development Authority of
Pearland, 3519 Liberty Drive, Pearland, Texas 77581, Attention: Finance Director; and, any
notice or other communication to be given to Advisor under this Agreement may be given by
delivering the same in writing to BOSC, Inc., 1401 McKinney Street, Suite 1650 Houston, Texas
77010, Attention: Public Finance Department.
Section 7. This Agreement shall be construed and given effect in accordance with the
laws of the State of Texas. Venue for any dispute regarding this Agreement shall be in the courts
of Brazoria County, Texas.
Section 8. This Agreement shall be binding upon and inure to the benefit of the
Issuer and Advisor, their respective successors and assigns; provided, however, that neither party
hereto may assign or transfer any of its rights or obligations hereunder without the prior written
consent of the other party.
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Section 9. The terms of this Agreement shall not be waived, altered, modified,
amended or supplemented in any manner whatsoever except by written instrument signed by all
of the parties hereto.
Section 10. This Agreement is submitted in duplicate originals. When accepted and
executed by the parties hereto, this Agreement will constitute the entire Agreement for the
purpose and consideration herein specified.
[Signature Page Follows]
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BOSC, INC.
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DEVELOPMENT AUTHORITY OF PEARLAND
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Date: c9•aO• a O l a
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EXHIBIT A
DESCRIPTION OF BASIC SERVICES
Upon the request of an authorized representative of the Issuer, Advisor will perform the
following financial advisory services pursuant to the terms of the Agreement for Financial
Advisory Services.
Financial Planning.
• Perform any necessary analyses of the financial resources of the Issuer to determine the
extent of its capacity to authorize, issue and service any Issuer Obligations
contemplated, including an analysis of any existing debt structure as compared with the
existing and projected sources of revenue that may be pledged to secure payment of
debt service. Advisor will also survey any trends of the assessed valuation, taxing
power and present and future taxing requirements of the Issuer, as appropriate. If the
revenues of a system or facility are to be pledged to repayment of the proposed Issuer
Obligations, the survey will take into account (i) any outstanding obligations which are
payable from the revenues thereof, (ii) additional revenues expected from any proposed
rate increase, and (iii) the additional revenues as projected by your consulting
engineers as the result of the improvements to be financed by the proposed Issuer
Obligations. Advisor will also take into account any policy considerations, future
financing needs and operational considerations, as provided or projected by Issuer's
staff and/or consulting engineers or other experts engaged by the Issuer.
• Assist in the formulation of a 5-10 Year Capital Improvement Plan to review the
Issuer's anticipated financing needs in light of future available revenues to support the
Issuer's financing needs and applicable State laws restricting debt capacity and assist in
periodically updating such plan.
• Submit to the Issuer recommendations regarding Issuer Obligations under
consideration, including such terms as the type of debt to be issued (e.g., current
interest obligation, capital appreciation obligation, or other obligation), principal
amount, interest rate mode (e.g., fixed, floating, or other interest rate mode), type of
debt instrument (e.g. tax-exempt, taxable, tax-credit, etc.), form of debt instrument (e.g.
Unlimited Tax Bond, Maintenance Tax Note, Tax and Revenue Anticipation Note,
Contractual Obligation, etc.), date of issue, interest payment dates, schedule of
principal maturities, options of prior payment, security provisions, and such other
provisions as we believe are appropriate in order to achieve the objectives of the Issuer
and make the issue attractive to investors. Such recommendations will be based on
information developed by the survey described above and other information available
to us. All recommendations will be consistent with the goal of structuring the Issuer
Obligations to be sold on terms that are advantageous to the Issuer, including the
lowest interest cost consistent with all other considerations.
• Advise the Issuer of current debt market conditions, forthcoming debt issues and
general information, including economic data, which might be expected to influence
interest rates or bidding conditions, as deemed necessary.
A-1
• In the event that an election is required to authorize the Issuer Obligations then under
consideration, Advisor will assist in gathering such information and data as may be
required for any petitions, orders, resolutions, ordinances, notices and certificates in
connection with the election, including assistance in the transmission of such data to
the Issuer's legal counsel.
• Consult with the Issuer regarding State funding and available revenues pursuant to
existing or proposed rules, as requested.
Debt Management.
• Assist in the preparation of a debt management policy for the Issuer.
• Evaluate new money and refunding financing transactions contemplated by the Issuer,
giving consideration to the complexity, market acceptance, rating, size and structure of
such transactions in order to make a recommendation as to an appropriate method of
sale.
• For qualified projects or financings, upon request, coordinate and assist in the
preparation of applications for financial assistance from state or federal governmental
agencies.
• In connection with the marketing, offer, sale and delivery of any Issuer Obligations,
whether such Issuer Obligations are publicly offered (through negotiated sale or
competitive bidding) or privately placed:
* Assist with the preparation of any offering materials for use in connection with
the marketing, offer and sale of the Issuer Obligations, including the notice of
sale and bidding instructions, preliminary official statement, official statement,
official bid form and such other documents and information as may be required
for the marketing, offer and sale of Issuer Obligations (collectively, "Offering
Documents"); however, Offering Documents shall be prepared based on
information provided by the Issuer and the Issuer shall be solely responsible for
the accuracy of the information provided, except to the extent that any such
information is expressly attributed by the Offering Document to another source.
Offering Documents will be prepared in accordance with customary industry
standards and submitted to the Issuer and its legal counsel for examination and
approval by the Issuer. Offering Documents shall be certified by the Issuer, as
directed by the Issuer's legal counsel. (See "Legal, Regulatory and
Administrative Matters", below.)
* After Issuer's examination and approval of an Offering Document, Advisor will
assist the Issuer with any arrangements for the printing of the Offering Document
and provide the Issuer with Offering Documents in sufficient quantity to meet its
needs and distribute such documents by mail or, where appropriate, by electronic
delivery, to prospective purchasers or the underwriters, as applicable, of the
Issuer Obligations.
A-2
* Provide copies of the final official statement to the purchaser or underwriters, as
applicable, of the Issuer Obligations in accordance with the notice of sale and
bidding instructions or the Issuer's agreement with the underwriters, as
appropriate.
* Advise the Issuer as to the utility of credit ratings and bond insurance or other
forms of credit or liquidity enhancement for Issuer Obligations.
* Coordinate the preparation of information as may be requested by, or appropriate
for submission to, a rating agency, bond insurer, or credit or liquidity
enhancement provider; and, consult with and advise the Issuer regarding the
form of any oral or written presentations to a rating agency, bond insurer, or
credit or liquidity enhancement provider. Any oral or written presentation shall
be based on information provided by the Issuer and the Issuer shall be solely
responsible for the accuracy of the information provided to any rating agency,
bond insurer, or credit or liquidity enhancement provider.
* To the extent that the Issuer elects to make a personal presentation of information
to one or more rating agencies, bond insurers, or credit or liquidity enhancement
providers, Advisor will arrange for such personal presentations, utilizing such
composition of representatives from the Issuer as may be approved or directed by
the Issuer. Any costs and expenses incurred by representatives of the Issuer as a
result of their participation in any personal presentation shall be paid and/or
reimbursed pursuant to and in accordance with the Issuer's internal policies
governing travel on official business of the Issuer.
* Coordinate and assist the Issuer's staff in the safekeeping of good faith checks, if
any.
* When appropriate, advise financial publications of the forthcoming sale of the
Issuer Obligations and provide them with all pertinent information.
* 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 Issuer Obligations.
• If Issuer Obligations are to be sold by an advertised competitive sale, Advisor will:
* Disseminate Offering Documents to prospective bidders and organize such
informational meetings as may be necessary.
* Coordinate the receipt of bids and the tabulation and comparison of submitted
bids.
* Advise the Issuer regarding the best bid and provide advice regarding acceptance
or rejection of bids.
A-3
• If Issuer Obligations are to be sold by negotiated sale, Advisor will:
* In connection with the Issuer's selection of one or more investment banking
firms to serve as managers of an underwriting syndicate for the purpose of
negotiating the purchase of Issuer Obligations, provide any advice and assistance
requested by the Issuer; however, the selection of members of an underwriting
syndicate shall controlled by the Issuer and be approved by the Issuer.
* Cooperate in the preparation of a bond purchase contract, an underwriters
agreement and other related documents; and, consult with the Issuer in
connection with the Issuer's policy concerning certain terms of the syndicate's
agreement among underwriters (e.g., order priority and designation policy) to
achieve the most efficient and lowest interest cost for the Issuer Obligations,
consistent with other considerations of the Issuer.
* Advise the Issuer as to the fairness of the price offered by the underwriters for the
Issuer Obligations.
• Upon request, advise the Issuer in the selection of professional consultants and fiscal
agents required in connection with Issuer Obligations, including trustees, paying
agents, registrars, escrow agents, verification agents, and assist in the negotiation of
agreements related to these services and the fees incident thereto, upon request.
• Attend meetings of the governing body of the Issuer, its staff, representatives or
committees, as requested by the Issuer.
• Provide the Issuer's legal counsel with financial information requested by such counsel
in connection with such counsel's preparation of legal documents pertaining to the
authorization, sale and issuance of the Issuer Obligations.
• Upon request, consult with the Issuer regarding proposed or enacted changes in federal
and state laws, rules and regulations that have (or are expected to have) a material
effect on the municipal bond market, it being understood that Advisor does not and
may not act as an attorney for, or provide legal advice or services to, the Issuer.
• Coordinate the efforts of all interested parties to effect the delivery of the Issuer
Obligations, and assist the Issuer in the preparation or verification of final closing
figures incident to the delivery of the Issuer Obligations.
• After the closing of the sale and delivery of the Issuer Obligations, deliver to the Issuer
a schedule of annual debt service requirements for the Issuer Obligations and, in
coordination with the Issuer's legal counsel, assure that the paying agent/registrar
and/or trustee has been provided with a copy of the authorizing ordinance, order or
resolution.
A-4
Legal, Regulatory and Administrative Matters
• Advisor will coordinate the issuance of the Issuer Obligations; however, Issuer shall
retain a firm of recognized municipal bond attorneys to prepare proceedings and advise
the Issuer regarding procedures required to issue the Issuer Obligations and issue an
unqualified opinion (in an acceptable form) approving the legality of the Issuer
Obligations. Advisor will coordinate with such firm of bond attorneys and assist in all
financial advisory aspects involved in the preparation of appropriate legal proceedings
and documentation.
• The Issuer shall also be responsible for the retention and engagement of competent
legal counsel to advise the Issuer concerning all other legal matters related to the
marketing, offer, sale and delivery of any Issuer Obligations, including applicable
federal and state securities laws and regulations; and, the Issuer shall be responsible
for the engagement of competent legal counsel to render an opinion covering the
Issuer's exercise of appropriate discretion and diligence in the preparation and
dissemination of any Offering Documents (e.g., a 10b-5 opinion addressing the
accuracy and completeness of each Offering Document).
• To the extent that the issuance and sale of the securities, and construction of the project
in question, requires the approval of any state or governmental agency, Advisor will
assist the Issuer in the preparation of all financial information required for inclusion in
applications for such approval. When requested by the Issuer, Advisor will appear on
Issuer's behalf to provide appropriate testimony at public hearings before state and
other governmental commissions and boards. Advisor will also participate in any
preliminary conferences with the staff of any state or governmental agencies, as
necessary.
• Advisor will annually coordinate the preparation and filing of the Issuer's ongoing
disclosure obligations required pursuant to SEC Rule 15(c)2-12 for City's debt
obligations and provide guidance on the submission thereof.
• Issuer will coordinate the use of other consultants, as necessary, to perform ongoing
activities to ensure the Issuer remains in compliance with applicable Federal and State
laws.
A-5
EXHIBIT B
DESCRIPTION OF ADDITIONAL SERVICES
Upon the request of an authorized representative of the Issuer, Advisor (or one or more
affiliates of Advisor) will perform the following financial advisory services pursuant to the terms
of the Agreement, subject to the mutual agreement of the Issuer and Advisor regarding the terms
and conditions thereof.
• Purchase such investments as may be directed and authorized by Issuer to be
purchased. To the extent that Advisor is entitled to receive fees or other compensation
in any form from a third party with respect to investment activities on behalf of the
Issuer, Advisor will disclose to the Issuer the nature and amount of any such
compensation so that the Issuer may consider the information in making its investment
decision.
• Provide other services (either directly or through an affiliate of Advisor) with respect to
matters which do not involve or affect the financial advisory services covered within
the Agreement, including:
o Trust Services,
o Cash/Investment Management Services,
o Financial Products Advisory Services (relating to the use and execution of
financial products and certain hedging transactions),
o Other Fiscal, Consulting or Advisory Services.
B-1
APPENDIX A
Fees
The fees due Advisor will not exceed those contained in our customary fee schedule as listed
below.
Fee Schedule for Financial Advisory Services—Sale of Issuer Obligations
Obligation Proceeds
And Not
More Than More Than The Fee Is
$ 0 $ 5,000,000 $ 50,000 minimum fee
5,000,000 No Limit $50,000 plus $0.40 per $1,000
for all over$5,000,000
The above charges may be multiplied by up to 1.25 times for the completion of a negotiated
sale, the issuance of revenue or refunding bonds, or the issuance of obligations associated with a
federal or state program. The charges for Issuer Obligations issued with a floating interest rate,
including services provided for the substitution of liquidity facilities or remarketing agreements, will
be negotiated with the Issuer.
The payment of charges for financial advisory services described in Article II of the
Agreement shall be contingent upon the delivery of Issuer Obligations and shall be due at the time
that Issuer Obligations are delivered. The payment of charges for services described in Article III of
the Agreement shall be due and payable in accordance with the mutual agreement therefor between
Advisor and Issuer.
Expenses
The Issuer shall be responsible for the following expenses, if and when applicable, whether
they are charged to the Issuer directly as expenses or charged to the Issuer by Advisor as
reimbursable expenses: fees and expenses of the Issuer's legal counsel, including bond counsel;
administrative and regulatory review and approval fees; bond printing expenses; credit rating fees;
credit enhancement fees; fees of other professionals, including accountants; official statement
printing and distribution expenses; fees of paying agents, registrars, trustees or escrow agents; travel
expenses outside of the State of Texas; fees and expenses of underwriter(s) and underwriter's
counsel; and, any other miscellaneous expenses incurred on behalf of the Issuer.
The payment of reimbursable expenses that Advisor has assumed on behalf of the Issuer shall
NOT be contingent upon the delivery of Issuer Obligations and shall be due at the time that services
are rendered and payable within thirty days receipt of an invoice therefor submitted by Advisor.
Appendix A-1