Financial Advisory Svs Agmt AGREEMENT
FINANCIAL ADVISORY SERVICES AGREEMENT
THIS AGREEMENT is made and entered into this 13th day of November, 2002 by and
between the City of Miami Beach, Florida (the "Client") and William R. Hough & Co., a Florida
Corporation with its principal place of business located at 100 Second Avenue South, Suite 800,
St. Petersburg, Florida 33701 (the "Financial Advisor").
1. The Client hereby retains William R. Hough & Co. and William R. Hough & Co.
hereby agrees to act as Financial Advisor to the Client.
2. The term of this Agreement shall commence with the execution hereof and shall
terminate two years from said date (the "Termination Date"). The Agreement shall automatically
renew for an additional two year period, unless within sixty (60) days prior to the Termination
Date hereof either Party provides written notice to the other party stating their intention not to
renew the Agreement. Either party may cancel and terminate this agreement upon sixty (60) days'
written notice to the other party, and at that time, all responsibility and obligation under this
Agreement will terminate. Once notice of Termination has been received, all work shall cease
unless otherwise directed by the Client. In the event of early termination of this Agreement, the
Financial Advisor shall be compensated on all projects in progress until the date of formal written
notification.
3. Financings Involving A Public Offering of Debt Securities. The Financial Advisor
agrees that upon request the following services may be performed by the Financial Advisor in
consideration of the compensation in Paragraph 6 hereto:
a. Review existing debt structure and financial resources to detemfine available
borrowing capacity.
b. Evaluate financing mechanisms and assist in the financing component of any such
mechanisms chosen by the Client.
c. To be available, upon proper notification, to participate in conference calls,
conferences, with the personnel of the Client and other consultants to the Client
regarding financing matters.
d. Provide information concerning the structure of financing programs used bY °ther
issuers.
Recommend in conjunction with bond counsel, provisions and covenants to be
contained in bond issues, including, but not limited to bond amounts, maturities,
interest rates, redemption provisions, flow of funds, debt service coverage
requirements, reserve funds, security pledges and conditions relating to the
issuance of additional bonds.
f. Assist with the preparation of debt service requirements for proposed issues.
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Advise on the use of a negotiated or competitive bid sale for each issue.
Coordinate bond closing and transfer of funds.
Advise as to the advantages and disadvantages of municipal bond insurance or
other credit enhancements.
Coordinate with and provide the municipal bond rating agencies (and credit
enhancers, if applicable) with information necessary to obtain an appropriate
rating on the bonds.
Advise as to market conditions and recommend the timing of the sale of the
bonds.
Assist where needed at the time of a competitive sale in checking all bids for
compliance with bid specifications, and make a recommendation as to award of
the bonds in the best interest of the Client.
Assist, upon request, in selection of the book-running managing underwriter and
co-managing underwriters for negotiated sale of bonds.
Advise whether to utilize a selling group.
Review the bond purchase agreement and advise as to its acceptance or rejection
in light of market conditions.
p. Assist in negotiating the interest rates proposed by the underwriters for the bonds
as well as the underwriters compensation and expenses on the issue expressed in
terms of the gross underwriters discount.
q. Assist legal counsel in the preparation and distribution of the Official Statement.
r. Arrange for distribution of the Official Statement to bond underwriters and
investors in accordance with the objectives communicated to the Financial
Advisor by the Client or its agents or representatives.
s. Assist, at bond closing, and coordinate printing, signing and delivery of bonds,
including receipt of transcript, bond printing, CUSIP numbers and delivery of
bonds.
Financings Not Involving a Public Offering of Debt Securities. The Financial
Advisor agrees that upon request the following services may be performed by the
Financial Advisor (in addition to the services previously described) in
consideration of the compensation in Paragraph 6 hereto:
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Assist in the selection of a financing vehicle, including but not limited to, private
placement of debt, participation in pooled short term borrowing programs, bank
loans, tax anticipation notes, certificates of participation, and revenue anticipation
notes or other alternative financial products, including but not limited to interest
rate swaps, caps or collars.
In conjunction with Client's legal counsel, assist in the preparation of private
placement memorandums, loan applications, or other information related to the
financing.
Services Not Involving Specific Financings. The Financial Advisor agrees that
upon request the following services may be performed by the Financial Advisor in
consideration of the compensation in Paragraph 6 hereto:
Attend meetings related to the Client's business as requested.
Prepare debt capacity reports and other requested services, such as periodic rating
agency updates and other special studies as directed by the Client.
Compensation. The Financial Advisor shall be compensated, for all work
performed, for the Client pursuant to paragraphs 3, 4 and 5 of this Agreement as
follows:
The Financial Advisor shall be paid the following hourly rates for all time
expended by its personnel for specific projects requested in writing by the Client,
as follows:
Senior Vice President
Vice President
Assistant Vice President and
Financial Analyst
Support Staff
$165 per hour
$150 per hour
$100 per hour
no charge
Alternatively, the City may wish to negotiate a fixed price for such special
projects.
The City and the Financial Advisor acknowledge that there will be special projects
for which the services of the Financial Advisor may be requested which are not
appropriately compensated for on an hourly rate and which do not result in the
issuance of bonds as more specifically referenced below. Fees for these special
services shall be negotiated on a case by case basis and shall be agreed to in
writing by both parties.
In connection with the issuance of debt, the Financial Advisor shall be paid at
closing in accordance with the following schedule with a minimum fee of$15,000
per transaction:
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Par Amount of Bonds Issued
First $0 - $50,000,000
$50,000,001 - $100,000,000
$100,000,001 - and more
Fee Per $1,000
$1.25
$1.oo
$0.75
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There shall be a surcharge of $5,000 for competitive sales and/or refundings.
In the capacity of placement and/or pricing agent of interest rate swaps or other
derivative products, William R. Hough & Co. will charge a fee of 0.05% of the
weighted average balance to be swapped each year, discounted at a taxable yield,
with a cap to be negotiated on each transaction reflecting the complexity and risk
associated with such transactions.
For the preparation of the bid solicitation and review of bids received for
securities to be purchased for escrow accounts, guaranteed investment agreements
and other investments, the Financial Advisor shall be paid a Placement Fee of five
basis points (0.05%) of the weighted average balance to be invested each year of
the agreement, discounted at a taxable yield by the agreement provider on behalf
of the Issuer.
For conduit financings proposed to be issued through the Client, the Financial
Advisor shall be paid on the same fee schedule as set forth above in paragraph (a)
by the Borrower. In the event that no bonds are actually issued, the Financial
Advisor shall receive a fee from the Borrower, such fee subject to negotiation
between the Financial Advisor and the Borrower, but in no event less than the
dollar amount for the hours expended on the project to compensate the Financial
Advisor for the preparation and presentation to the Client of a report analyzing the
credit, the proposed marketing plan, and analyzing the Client's protection from
any risk of default on the financing and making a recommendation regarding the
issuance of the proposed bonds.
The Financial Advisor shall be reimbursed for all out-of-pocket expenses. Travel
expense reimbursement shall comply with the Client's policy for reimbursement
of Client employees.
Other Services. The Client agrees that the following category of services, or other
services not enumerated herein, when requested in writing to be performed by the
Financial Advisor shall be compensated in a mutually agreed upon manner
confirmed in writing by both parties.
Assisting with validation proceedings and/or testifying as an expert witness with
respect to offerings.
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Providing secondary market disclosure services upon request in compliance with
Rule 15c(2)-12 of the Securities and Exchange Commission.
Participating in the development of a financial plan for the Client's capital
improvements program.
Advice on various budget and funding matters not specifically related to the offer
of securities or other financings referenced in Paragraphs 3 and 4 herein.
The parties acknowledge that if William R. Hough & Co. sells securities for
investment programs to the Client such sale is in William R. Hough & Co.'s role
as a broker/dealer and as principal and the Client acknowledges that a mark-up
will be charged on the sale, which markup shall be disclosed to the Client.
Richard Montalbano, Senior Vice Presidenh will be the primary banker for the
Financial Advisor for all work performed herewith. Other professionals will
perform services as directed by Richard Montalbano. Richard Montalbano maybe
removed from this position at the Client's request.
The Financial Advisor shall be entitled to the reimbursement of expenses
associated with all services contemplated herein in full.
The parties acknowledge that the Financial Advisor may have ongoing business
relationships with other investment banking firms and financial advisors,
including firms doing business with the Client.
This Agreement does not govern, nor does it prohibit the Financial Advisor
serving in other roles, such as investing funds as a broker/dealer, selling securities
to the Client as principal or other activities.
Severabilit~. Should any term, provision, covenant, condition or other portion of
this Agreement be held illegal or invalid, then such illegality or invalidity shall not
affect the remainder of this Agreement, and the remainder shall continue in full
force and effect as if such illegality or invalidity had not been contained herein.
Agreement. This Agreement may be executed in one or more copies, each of
which shall be an original, and the copies together constitute but one in the same
Agreement, which may be amended in writing with the consent of both parties
from time to time.
Assignments. The parties to this Agreement each bind itself and its partners,
successors, legal representatives and assigns to the other party to this Agreement
and to the partners, successors, legal representatives and assigns of such other
party in respect to all covenants and provisions of this Agreement and both parties
recognize that this Agreement is non-transferable to a third party.
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Entire Agreement. This Agreement constitutes the entire agreement between the
parties and shall supersede and replace all prior agreements or understandings,
written or oral, relating to the matters set forth herein. Notwithstanding the
foregoing, however, the Financial Advisor hereby affirms the accuracy of the
information provided by it in its proposal to the Client.
Amendment. This Agreement shall not be amended or modified other than in
writing signed by the parties hereto.
Governing Law. This Agreement is governed by and shall be construed in
accordance with the laws of the State of Florida.
Indemnification. Financial Advisor agrees to indemnify and hold harmless the
Client and its officers, employees and agents, from and against any and all actions,
claims, liabilities, losses, and expenses, including, but not limited to, attorneys'
fees, for personal, economic or bodily injury, wrongful death, loss o for damage to
property, at law or in equity, which may arise directly from the grossly negligent
acts, or gross negligent omissions of the Financial Advisor, in connection with the
Financial Advisor's performance of the Services specifically set forth in this
Agreement; and to that extent, the Financial Advisor shall pay all such claims and
losses and shall pay all such costs and judgments which may issue from any
lawsuit arising from such claims and losses, and shall pay all costs and attorneys'
fees expended by the Client in the defense of such claims and losses, including
appeals. The parties agree that one percent (1%) of the total compensation to the
Financial Advisor for performance of the Services under this Agreement is the
specific consideration from the Client to the Financial Advisor for the Financial
Advisor's Indemnity Agreement.
The Financial Advisor's obligation under this subsection shall not include the
obligation to indemnify the Client and its officers, employees and agents, from
and against any actions or claims or portions thereof which arise or are alleged to
have arisen from negligent acts or omissions or other wrongful conduct of the
Client and its officers, employees and agents. The parties each agree to give the
other party prompt notice of any claim coming to its knowledge that in any way
directly or indirectly affects the other party.
Access To Records. Financial Advisor agrees to allow access during nom~al
business hours to all financial records related to the performance of this
Agreement to the Clients and/or such authorized representatives as it may deem to
act on its behalf, and agrees to provide such assistance as may be necessary to
facilitate financial audit by the Client or its representatives when deemed
necessary to insure compliance with applicable accounting and financial
standards. Financial Advisor shall allow access during nmmal business hours to
all other records, forms, files and documents which have been generated in
performance of this Agreement, to those personnel as may be designated by the
Client.
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Conflict of Interest. The Financial Advisor agrees to adhere to and be governed
by the Metropolitan Miami-Dade County Conflict of Interest Ordinance (No. 72-
82), as amended; and by the City of Miami Beach Charter and Code, which are
incorporated be reference here in as if fully set forth herein, in connection with the
Agreement conditions hereunder.
Notices. All notices and communications in writing required or pemfitted
hereunder may be delivered personally to the representatives of the Financial
Advisor and the Client listed below or may be mailed by registered mail, postage
prepaid (or al,nailed if addressed to an address outside of the Client of dispatch).
Until changes by notice in writing, all such notices and communications shall be
addressed as follows:
TO FINANCIAL ADVISOR:
Richard Montalbano, Senior Vice President
William R. Hough & Co.
100 Second Avenue South, Suite #800
St. Petersburg, FL 33701
TO CITY:
City of Miami Beach
Attn: City Clerk
1700 Convention Center Drive
Miami Beach, FL 33139
(305) 673-7411
Notices hereunder shall be effective;
If delivered personally, on delivery; if mailed to an address in the Client of
Dispatch, on the day following the date mailed; and if mailed to an address
outside the Client of Dispatch on the seventh day following the date mailed.
Litigation Jurisdiction/Venue. This Agreement shall be enforceable in Miami-
Dade County, Florida, and if legal action is necessary by either party with respect
to the enforcement of any or all the terms or conditions herein, exclusive venue
for the enforcement of same shall lie Miami Dade County, Florida.
Attest:
Title: Robert Parcher, City Clerk
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and their seals to be affixed hereto as of the daya~ year first above written.
Beach, Florida
David Dermer, Mayor
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Attest:
WILLIAM R. HOUGH & CO.
~~'--'--
Rich~M/ontalbano
Title: Senior Vice President
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECU'I3ON
Attomey~ ~at~
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