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HomeMy WebLinkAbout02878 - STONE & YOUNGBERG MUNICIPAL GOLF COURSE MOU BOND TAHQUITZ CREEK Stone & Youngberg-Underwriter Services - Golf Course Expan AGREEMENT #2878 MO 4626, 9-5-90 STONE & YOUNGBERG MEMBERS,PACIFIC STOCK EXCHANGE 4350 La Jolla Village Drive Suite 840 San Diego, California 92122 Telephone (619)452-0504 Facsimile (619)452-6131 UNDERWRITING AGREEMENT August 17, 1990 City of Palm Springs 3200 E. Tahquitz-McCallum Way Palm Springs, CA 92262-1786 Attn: Paul R. Howard, Finance Director Re: Underwriting Agreement (Municipal Golf Course) Honorable Members of the City Council: This letter will serve as an agreement between the City of Palm Springs (the "City") and Stone & Youngberg (the "Underwriter") to serve as underwriter to the City until the parties enter into an actual Purchase Contract regarding the negotiated sale of securities to be authorized by the City. You have informed us that the City intends to authorize the issuance of approximately $6 million in obligations to finance the construction of a new municipal golf course and for this purpose desires the services of the Underwriter to assist in structuring the financing and to enter into a Purchase Contract for the securities which is satisfactory to the City and the Underwriter. Such securities may either be bonds or certificates of participation as concluded by the City, Bond Counsel and the Underwriter upon further review of available issuing authority and the City's financing objectives. As a matter of simplicity, the securities to be sold by the City and purchased by the Underwriter are referred to as "Bonds" in this agreement. As Underwriter,we will use our best efforts to bring the Bonds to market at the lowest interest rates practicable under the market conditions existing at the time of their sale. The City and the Underwriter shall mutually agree upon the date of sale, which shall be scheduled so that Bond proceeds may be delivered to the City for the purpose of timely financing the municipal golf course and related improvements (the "Project"). SAN FRANCISCO(415) 981-1314 • LOS ANGELES(818) 789-2663 '" J The Underwriter agrees to perform all the services and functions necessary to achieve the financing objectives of the City, including the following: A. Structuring the Financine 1. The Underwriter will work with the City, Bond Counsel and other members of the City's financing team in recommending specific terms and conditions affecting the Bonds. 2. The Underwriter will work with the City to create the most feasible and efficient structure for securing the Bonds and enhancing their marketability. It is anticipated that the Bonds will be primarily secured by lease payments made by the City from any funds lawfully available to the City including, without limitation, revenues from the City's municipal golf course enterprise. 3. The Underwriter will prepare drafts of the Official Statements (preliminary and final versions, respectively) for sale of the Bonds in accordance with the standards of Rule 15c2-12 of the Securities Exchange Commission. The City agrees to participate in this document's preparation by providing pertinent information to be included therein and agrees to review the Official Statement for accuracy relating to matters concerning the Project and the revenues and funds providing security for the Bonds. The Official Statements will include a description of the Bonds and their security, the Project, and pertinent financial and economic data relating to the City and the surrounding area. The approval, execution and delivery of the Official Statements will be duly authorized by the City for use in marketing the Bonds. 4. If desired,we will assist the City in the selection of a Trustee bank and in structuring and funding a suitable investment vehicle for Bond proceeds pending their expenditure for construction of the Project. B. Marketing the Bonds 1. At the designated time for sale of the Bonds, the Underwriter will submit an offer to the City to purchase the Bonds by way of a Purchase Contract. The purchase offer will be subject to pertinent resolutions of the City, the Official Statement, and all other necessary documents, approvals, and proceedings governing such Bonds having been determined by Bond Counsel, the City and the Underwriter to be satisfactory in all respects for financing purposes. It is intended that once purchased, the Bonds will be re-offered to the public on the basis of an immediate bona fide public offering. -2- 2. At least one day prior to the submission of any such formal offer to the City for the purchase of the Bonds, the Underwriter will indicate to the City the interest rate or rates, the purchase price from the City, and the public offering price of the Bonds that we then estimate will be included in such offer. If, after negotiations in good faith, the City and the Underwriter fail to agree on the terms of sale of the Bonds, and upon written notice to the Underwriter, the City may then offer the Bonds for sale to others without any further obligation to the Underwriter. C. General Provisions Relating to the City and the Underwriter 1. The City agrees to make available to the Underwriter without cost, sufficient copies of any applicable reports, agreements, contracts, resolutions and other relevant documents pertaining to the Project, the City or the Bonds as reasonably may be required from time to time for the prompt and efficient performance by the Underwriter of its obligations hereunder. 2. The Underwriter will pay its own out-of-pocket and other expenses, including the cost of any legal counsel which may be retained by the Underwriter, Blue Sky and Investment Memorandum and any advertising expenses in connection with the public offering of the Bonds. 3. The City will pay from the proceeds of the Bonds all costs and expenses customarily paid therefrom including the cost of printing the Bonds and the Official Statements, and any other documents, the fees and expenses of its legal counsel, bond counsel, accountants and costs of any other experts or consultants retained by the City in connection with the financing. 4. It is expressly understood and agreed and the City hereby recognizes that in performing its activities the Underwriter is acting solely on its own behalf and plans to submit to the City a proposal to purchase the Bonds for resale. Nothing herein will be construed to make the Underwriter an employee or financial, fiscal or other advisor of the City, or to establish any fiduciary relationship between the City and the Underwriter. 5. It is understood and agreed that the City will not be required to compensate the Underwriter for services provided to the City under this agreement if the Bonds are not sold to the Underwriter. -3- 6. Upon termination of this agreement, the City will be under no further obligation to the Underwriter hereunder. Upon your acceptance set forth below, this letter will constitute an agreement between the City and the undersigned. Thank you for the opportunity to be of service to the City of Palm Springs. Very truly yours, STON - & YOUNGBG L. William Huck Partner LWH:am Accepted this day of :=rry;,',' 1990. v CITY OF PALM SPRINGS "R— uM Tt'17 BY By- City Manager ATTEST: C ry Clerk -4-