Wedbush Morgan/Underwriting 01AGREEMENT FOR UNDERWRITING SERVICES
THIS AGREEMENT, made this ��day of May, 2001, by and between the LA
QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, organized and
existing under the laws of the State of California, (together, hereinafter called the "Issuer"), party
of the first part, and WEDBUSH MORGAN SECURITIES, 12526 High Bluff Drive, Suite 300,
San Diego, California (hereinafter called the "Underwriter"), party of the second part:
WITNESSETH:
WHEREAS, the Issuer requires assistance in developing sound, equitable and practical
financing plans by taking into consideration sources of capital funds and cash flow requirements,
annual costs, the allocation of those costs, statutory requirements and restrictions, and methods if
applicable; and
WHEREAS, the Issuer requires the services of a municipal investment banker
experienced in underwriting debt obligations, to assist in such financial planning related thereto
and to purchase at negotiated sale the Issuer's obligations resulting therefrom; and
WHEREAS, consistent with the terms and conditions of this Agreement, the Issuer
wishes to engage the Underwriter to provide investment banker services for the Issuer.
NOW, THEREFORE, it is mutually agreed as follows, to wit:
The Issuer hereby employs the Underwriter and the Underwriter hereby accepts such
employment to perform the services, upon the terms, subject to the conditions, and in
consideration of payments as hereinafter set forth:
Services to be Performed by the Underwriter
Upon the request of the Issuer, The underwriter shall work together and in cooperation
with the Issuer's financing team (the Issuer's staff, fiscal consultant, bond counsel and disclosure
counsel), to diligently perform the following services:
1. Assemble, review and analyze available financial and economic data and
information that may have a general bearing on a program for financing any proposed project or
projects.
2. Based on the foregoing analysis, prepare a general review and description of the
proposed projects and outline the possible methods of financing such projects, the advantages
and disadvantages of each method as applied to a given project, the general legal and practical
requirements or restrictions applicable to each method and their attendant costs.
3. When the Issuer has approved a specific project or projects for implementation,
the estimated costs and method of financing of which have been sufficiently well established to
permit the preparation of a final financing plan, the Underwriter shall prepare such plan
containing, in addition to other information, the following:
A. A description of the financing or financings, including the purpose,
benefits, security, estimated costs and other pertinent information.
B. Details relating to the proposed method of financing, including tentative
bond amortization schedules, call features, sources and amounts of funds to be used in
amortizing the costs and other related data.
C. Recommendations as to further procedures. The foregoing will be
designed to answer substantially all of the important questions that might arise in connection
with the particular financing or financings and will contain current information as to estimated
costs and economic and fiscal information.
4. Assist Bond Counsel and Disclosure Counsel with the preparation of necessary
resolutions and other legal documents and make recommendations as to the exact terms and
conditions under which bonds (for the purpose of this Agreement, all references to "bonds" shall
mean any "debt obligation") are to be issued and sold, including timing and method of sale, final
amortization or repayment schedules, call and redemption features, provisions governing the
issuance of additional bonds, covenants and other provisions in order to secure the best possible
rating on the bonds.
5. Prepare the text and other material for an official statement or bond prospectus
describing the project or projects, the bonds, their security, and the economic and financial
background of the Issuer.
6. Assist in obtaining bond insurance and/or a bond rating for each proposed issue to
the end that such bonds may be sold for the lowest possible cost. The Underwriter shall provide
the bond insurers, Moody's Investors Service and Standard and Poor's Ratings Group with all
information required by such agencies necessary in establishing such bond insurance and/or
ratings and make such trips and schedule such conferences with such agencies as may be
necessary to obtain the highest possible rating on the bonds.
7. The Underwriter shall be available at reasonable times by telephone or at the
offices of the Issuer to discuss on a continuing basis the results of studies and analyses and
generate such additional information as desired or requested and consult with the Issuer as to the
financial aspects of any specific project then being considered.
Sale of Bonds: Compensation; Expenses
At such time as the Issuer is satisfied that the financing program meets the goals and
objectives of the Issuer and wishes the Underwriter to proceed with the financing program, the
Issuer and the Underwriter shall enter into a bond purchase agreement for the sale of the Issuer's
obligations to the Underwriter at a discount and bearing interest at rates which are commensurate
with the rates prevailing in the market for similar securities at the time the bonds are offered to
the public and which will be approved by the Issuer's staff and pricing consultant. For financings
of the size and security of that proposed by the Issuer, depending on market conditions, it is
anticipated that an underwriter's discount ranging from .090% to 1.100% of the principal amount
of Bonds issued (the "Bond Discount") and a net interest rate ranging from 5.150% to 5.350%
will be appropriate. Original issue discount, if any, will not exceed 1.75% of the principal
amount of Bonds issued. Nothing herein shall require the Issuer to enter into any Bond Purchase
Agreement
The Bond Discount will represent the total compensation to be paid to the Underwriter
and the Issuer shall not be liable for any additional fees whatsoever. The Bond Discount shall
conform to those prevailing in the marketplace for similar securities at the time that debt
obligations are sold. The Bond Discount applicable to each debt obligation shall be specified in
each bond purchase agreement.
All costs of the financing program will be payable out of bond proceeds when the bonds
are sold and delivered to the Underwriter, unless otherwise specified by the Issuer. In the event
that market conditions or actions by regulatory agencies prohibit completion of the financing by
the Issuer, the Underwriter will be responsible for all fees and expenses incurred in connection
with services to be performed as the Issuer's investment banker including, without limitation, the
expenses of its counsel, if any. The Issuer will be responsible for all other fees and expenses
incurred in connection with the financing.
Named Personnel
The Underwriter commits the principal personnel listed below to provide services
pursuant to this Agreement for the duration of its term.
Underwriter's Principal Personnel:
1. Robin M. Thomas, Senior Vice President
2. Michael K. Cavanaugh, Vice President
3. Daniel P. Massiello, Assistant Vice President
It has been determined that the individuals named in this Agreement are necessary for the
successful performance of this Agreement. The Underwriter shall not replace these individuals
without written consent of the Issuer, which shall not be unreasonably withheld. The consent of
the Issuer shall be given or denied in writing within thirty (30) days of the receipt of written
notice from the Underwriter of the intent to replace personnel. If the Issuer fails to respond to the
Underwriter within thirty (30) days of notification by the Underwriter, said personnel
replacement shall be deemed approved.
Term
The term of this Agreement shall remain in full force unless terminated by either party.
This Agreement may be terminated without cause by either party by giving the other party sixty
(60) days written notice of such cancellation.
Independent Contractor
The Underwriter shall perform the services as contained herein as an independent
contractor and shall not be considered an employee of the Issuer or under the Issuer's supervision
or control. This Agreement is by and between the Underwriter and the Issuer, and is not
intended, and shall not be construed, to create the relationship of agent, servant, employee,
partnership, joint venture, or association, between the Issuer and the Underwriter.
Successor and Assignment
The services as contained herein are to be rendered by the Underwriter whose name is as
appears first above written and said Underwriter shall not assign nor transfer any interest in this
Agreement without the prior written consent of the Issuer.
Indemnification
The Underwriter agrees to indemnify, defend (upon request by the Issuer) and save
harmless the Issuer, its elected and appointed officials, officers, agents and employees from and
against any liability, expense, including defense costs and legal fees, and claims for damages or
other relief of any nature whatsoever, including, but not limited to, bodily injury, death, personal
injury or property damage arising from or connected with the Underwriter's operations, or its
services, acts and/or omissions hereunder, including any workers' compensation suit, liability or
expense, arising from or connected with the services performed by or on behalf of the
Underwriter by any person pursuant to this Agreement.
Compliance With Laws
The parties agree to be bound by applicable federal, state and local laws, regulations and
directives as they pertain to the performance of this Agreement.
Severability
In the event that any provision herein contained is held to be invalid, void or illegal by
any court of competent jurisdiction, the same shall be deemed severable from the remainder of
this Agreement and shall in no way affect, impair or invalidate any other provision contained
herein. If any such provision shall be deemed invalid due to its scope or breadth, such provision
shall be deemed valid to the extent of the scope or breadth permitted by law.
Interpretation
No provision of this Agreement is to be interpreted for or against either party because that
party or that party's legal representative drafted such provision, but this Agreement is to be
construed as if both parties drafted it hereto.
Disputes - Attorney's Fees
If either party to this Agreement is required to initiate or defend litigation in any way
connected with this Agreement, the prevailing party in such litigation, in addition to any other
relief which may be granted, whether legal or equitable, shall be entitled to reasonable attorneys
fees.
Waiver
No breach of any provision hereof can be waived unless in writing. Waiver of any one
breach of any provision shall not be deemed to be a waiver of any other breach of the same or
any other provision hereof.
Notice
Notices herein shall be presented in person or by certified or registered U.S. mail, as
follows:
To the Underwriter: Wedbush Morgan Securities
12526 High Bluff Drive, Suite 300
San Diego, CA 92130
Phone: (800) 659-8200
Fax: (858)792-3498
Attention: Robin M. Thomas, Senior Vice President
To the Issuer: La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, CA 92253
Phone: (760)777-7100
Fax: (760)777-7101
Attention: Thomas P. Genovese, Executive Director
4
Nothing in this paragraph shall be construed to prevent the giving of notice by personal
service.
IN WITNESS WHEREOF, said Issuer, party of the first part, has caused these presents to
be properly executed, and said Underwriter, party of the second part, has caused these presents to
be executed by one of its officers, as of the date hereinabove set forth.
By: ,
94Agency Counsel
LA QUINTA REDEVELOPMENT AGENCY
By: lZe,t�o��
Executive Director
ATTEST:
By: � X�
gency Secretary
UNDERWRITER:
WEDBUSH MORGAN SECURITIES
By
Sety or Vice President