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Home My WebLink AboutProvide Investment Banking Services Augusta Richmond GA DOCUMENT NAME: 1>~v~d L -:Ln Ve:StJYlCil-C DOCUMENT TYPE: ~e en" e.n l:= YEAR:C)L BOX NUMBER: l { FILE NUMBER: 1,w51-l q . ~ NUMBER OF PAGES: 60." ~J 0€>rv ; ce.'2, i. A.G.Edwards & Sons, Inc. P INVESTMENTS SINCE 1887 3399 Peachtree Road. N.E. Sui/e 1100 A/lan/a, Georgia 30326 (404) 995-8930 October 4, 2002 lvIr. David Persaud Finance Director Augusta, Georgia Room 801 530 Greene Street Augusta, Georgia 30911 Re: Letter of Agreement to Provide Investment Banking Services Dear David: I t is our understanding that the Augusta, Georgia Conunission ("Augusta") is interested in entering into an investment banking agreement for a telm of five years in order to receive ongoing advice and assistance related to f111anciaI and capital markets matters. It is the i.ntention of AG. Edwards & Sons, Inc. (the "Firm") to provide the investment banking services necessaq to enable Augusta to achieve its objectives in the most cost-effective manner possible. The services to be provided will include, at a minimum, the following: A.G. Edwards will proactively assist Augusta in establishing specific objectives for any proposed financing, and if financing objectives are established, develop a financing plan to accomplish them. Details of the plan will address: (i) The amount and timing of any proposed bond or note issue(s). (ii) The structure and security features of the issue(s). (ill) The estimated debt service costs and other fiscal impacts associated with the issue(s). (iv) The estimated debt service savings associated with any proposed refuncling(s). As part of these services, A.G. Edwards will undertake the following tasks and functions: (1) Coordinate the structuring and timing of the proposed bond or note issue(s) to maxinuze advantages for Augusta while capitalizing; if possible, on favorable interest rate trends and all tax law related advantages. . In the structuring of any issue(s), maXl1111ze savings on any refunding component, minimize fiscal impacts of the new issue(s), and maximize Augusta's flexibility in terms of maturity schedules, redemption provisions, and other bond covenants. . In the structuring of any issue(s), in the sale of the bonds to investors, and in the use of bond proceeds, assure compliance with all applicable state and federal laws. A ugusta, Georgia Page 2 of 2 10/4/02 /l.G. Edwards & Sons. Inc. IN\'E~TMENT BANKING . In the development of bond or note security features, provide adequate protection to potential holders and maximize investor interest in such issue(s). Minimize long-term interest costs and issuance costs on Augusta's bond or note issue(s). Maximize the return on investment of Augusta's bond or note proceeds, consistent with all applicable laws and regulations. . . (2) Develop, implement and maintain a detailed schedule of fInancing activities so as to ensure the orderly and effIcient execution of the frnancing(s). Provide assistance to Augusta's legal counsel and bond counsel in the preparation of applicable resolutions and other legal documents necessary or appropriate to set forth the terms of the issue and the security therefore. Assist Augusta with the selection of a qualifIed fInancial institution to serve as paying agent / registrar and escrow agent on the issue(s), as needed. (3) Initiate and implement the preparation of the preliminary and fInal OffIcial Statement used in marketing the issue(s) to prospective investors. Such materials would describe the debt issue(s) in detail and properly disclose all relevant information about Augusta in compliance with disclosure guidelines promulgated by the Government Finance Officers Association, Municipal Securities Rulemaking Board and the Securities and Exchange Commission. (4) Apply on behalf of Augusta for credit ratings from Moody's and S&P, as deemed to be in Augusta's best interests, and provide all information necessary or appropriate for prompt agency review of said applications. Arrange for rating presentations before the rating agency analysts, where appropriate, and coordinate and implement the preparation of said presentations and supporting materials. (5) Solicit proposals for credit enhancement appropriate for any issue as a wav of improving the issue's ratings and reducing Augusta's net borrowing costs. (6) Advise Augusta on the proper and most advantageous timing of the bond sale, and assist it in consummating such sale. Such assistance will include the pre-marketing of the issue(s) to potential investors through the Firm's retail and institutional sales force, the pricing and offIcial offering of the bonds to investors, and the submission for the Authority approval of an offer to purchase the bonds for a mutually agreed upon schedule of maturities, interest rates and prices. (7) Assist Augusta, its counsel, and bond counsel in any necessary legal proceedings relating to the issuance and delivery of the bonds or notes. (8) Initiate and supervise the printing, authentication, and assignment of CUSIP numbers and determination of DTC eligibility for Augusta's bonds or notes. 1\ ugusta, Georgia Page 3 of 3 10/4/02 .fi.G.Edwards & Sons,Inc. INVESTMENT BANKING (9) Assist Augusta at closing, arrange for and in1plement the delivery of Augusta's authenticated bonds or notes to the Firm (except to the extent the bonds or notes are book entry only), advise Augusta on the best, most cost-effective investment plan for bond or note proceeds consistent with all applicable state and federal laws and regulations, and arrange for the purchase of such investments for Augusta, if desired. Advise Augusta on appropriate procedures for accounting for arbitrage profits and for rebating such profits to the U.S. Treasury if and to the extent required by federal law. (10) Provide ongoing advice and assistance regarding continuing disclosure obligations, structuring issues, credit market conditions, relations with the investment community and rating agencies, innovative financing techniques, federal and state legislative agendas, investment of Augusta's funds, and all other relevant topics - all in an effort to assure Augusta favorable access to the credit markets on an ongoing basis. Fee Arrangement As Augusta's investment banker, the Firm would provide the foregoing services, as needed, for the following professional fees: (i) Underwriting Fee. For any negotiated public offering of Bonds, the Firm would receive an underwriting fee on a cost per $1,000 in par amount of bonds or notes issued agreeable to Augusta, commensurate with the difficulty and size of the proposed undertaking. Such fee will be consistent with fees charged for similar size and type issues for other Georgia clients. The underwriting fee would be contingent upon the successful sale and closing of the proposed issue. For any competitive public offering of bonds or notes, the Firm would receive an advisory fee (in accordance with MSRB Rule G023) agreeable to August, commensurate with the difficulty of the proposed undertaking. Such fee will be consistent with fees charged for similar size and type issues for other Georgia clients. (ii) Expense Reimbursement. The Firm will seek to be reimbursed for customaq out-of- pocket expenses such as travel to and from meetings, postage and delivery charges, copying charges, and other miscellaneous expenses. (iii) Term of the Agreement. The term of this agreement shall be five (5) years from the date of its original adoption by Augusta. The Firm represents that the person primarily responsible for the services to be rendered hereunder is Mark Widener, and that the investment banking services called for by this Agreement shall be performed in accordance with the highest professional standard of ethics. Augusta, Georgia Page 4 of 4 10/4/02 ~.G. Edwa':1J!t.l~~'!;1:l~\~ If If the Firm should fail to fulfill their obligations under this Agreement in a timely and professional manner, or if it should breach any of the agreements set forth herein, Augusta shall have the right to terminate this Agreement by giving fifteen (15) days prior written notice of such termination and specifying the effective date thereof. In that event, Augusta would not be obligated for payment of services to the Firm (except fees related to services already rendered in the sale of bonds, which fees have not yet been paid) and all finished documents, data, reports and other papers prepared by the Firm shall, at the option of Augusta, become Augusta's property. In addition to its right to terminate this Agreement for cause, Augusta shall have the right to terminate this agreement without cause at any time upon the giving of thirty (30) days prior written notice to the Firm. The right to terminate without cause shall be mutual to the Firm and effectuated by the giving of thirty (30) days prior written notice to Augusta. . ~_ _ .IJ -<~ ',..d.V ~ a-u ~. -t. ~ f} /? -VI. fir .-......f (J;tc<.. IIlve~ ;VI $H"nuS / ?Ice ~ " fY6'"k1 r'IA:r -7A ~ /J I IL /' LL~ ~~L - ~ A ~ r- tJ.f- A-r~ ~ ~ I~ b1<.. ~~ '77"-d II-Uf/~ /n~ "/00 .. (/J Respectfully submitted, U f!eJ~. A.G. EDWARDS & SONS, INC. -1,ll~"o By: Mark Widener Managing Director Investment Banking Accepted as of the 4- day of ~~ ,2002