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RBC Capital Markets for Financial Advisory Servicesao~7- zcy~~ C'JS - 3//Y/07 PROFESSIONAL SERVICES AGREEMENT BETWEEN THE CITY OF MIAMI BEACH, FLORIDA AND RBC CAPITAL MARKETS FOR FINANCIAL ADVISORY SERVICES THIS AGREEMENT made and entered into this /~~day of /i'!~/l~fj, 2007, by and between the CITY OF MIAMI BEACH, FLORIDA (hereinafter referred to as City), a municipal corporation having its principal offices at 1700 Convention Center Drive, Miami Beach, Florida, 33139, and RBC Dain Rauscher Inc. doing business under the name RBC Capital Markets, (hereinafter referred to as Consultant), a corporation with offices at 100 - 2"d Avenue South, Suite 800, St. Petersburg, Florida, 33701 SECTION 1 DEFINITIONS Agreement: This Agreement between the City and Consultant. Mayor: The Chief Administrative Officer of the City. Consultant: For the purposes of this Agreement, Consultant shall be deemed to be an independent Consultant, and not an agent or employee of the City. Services: All services, work and actions by the Consultant performed pursuant to or undertaken under this Agreement, as described in Section 2 and /exhibit "A": hereto. Fee: Amount paid to the Consultant to cover the costs of the Services. Risk Manager: The Risk Manager of the City, with offices at 1700 Convention Center Drive, Third Floor, Miami Beach, Florida 33139, telephone number (305) 673-7000, Ext. 6435, and fax number (305) 673-7023. SECTION 2 SCOPE OF WORK (SERVICES) The scope of work to be performed by Consultant is set forth in Exhibit "A" entitled "Scope of Services" (Services). SECTION 3 COMPENSATION 3.1 FIXED FEE Consultant shall be compensated for the Services to be provided herein, as set forth in Exhibit "A" attached hereto. 3.2 INVOICING Consultant shall submit an invoice, which includes the purchase order number and a detailed description of the Services provided. 3.3 METHOD OF PAYMENT Payments shall be made within thirty (30) days of the date of invoice, in a manner satisfactory to and as approved and received by, the City. Consultant shall mail all invoices to: City of Miami Beach c/o Patricia Walker Chief Financial Officer 1700 Convention Center Drive rd 3 Floor Miami, FL 33139 SECTION 4 GENERAL PROVISIONS 4.1 RESPONSIBILITY OF THE CONSULTANT With respect to the performance of the Services, the Consultant shall exercise that degree of skill, care, efficiency and diligence normally exercised by recognized professionals with respect to the performance of comparable Services. In its performance of the Services, the Consultant shall comply with all applicable laws, ordinances, and regulations of the City, Miami-Dade County, State of Florida, and Federal Government. 2 4.2 PUBLIC ENTITY CRIMES A State of Florida Form PUR 7068, Sworn Statement under Section 287.133(3)(a) Florida Statute on Public Entity Crimes shall be filed with the City's Procurement Division, prior to commencement of the Services herein. 4.3 DURATION AND EXTENT OF AGREEMENT (TERM) The initial term of this Agreement shall commence upon execution of this Agreement by all parties hereto, and shall terminate on five (5) years from said date. The Agreement may be renewed at the sole discretion of the City upon the same terms and conditions provided herein, for five (5) additional one (1) year terms, upon written notice to Consultant, which notice shall be provided at least thirty (30) days prior to the expiration of the initial term, or a renewal term, as the case may be. 4.4 TIME OF COMPLETION The Services to be rendered by the Consultant shall be commenced upon receipt of a written Notice to Proceed from the City subsequent to the execution of the Agreement, and Consultant shall adhere to the agreed upon schedule for each assignment as approved by the City's Chief Financial Officer. A reasonable extension of time shall be granted in the event the work of the Consultant is delayed or prevented by the City of by any circumstances beyond the reasonable control of the Consultant, including weather conditions or acts of God render performance of the Consultant's duties impracticable. 4.5 INDEMNIFICATION Consultant agrees to indemnify and hold harmless the City of Miami Beach 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 of or damage to property, at law or in equity, which may arise or be alleged to have arisen from the negligent acts, errors, omissions or other wrongful conduct of the Consultant, its employees, agents, sub-consultants, or any other person or entity acting under Consultant's control, in connection with the Consultant's performance of the Services pursuant to this Agreement; and to that extent, the Consultant shall pay all such claims and losses and shall pay all such costs an judgments which may issue from any lawsuit arising from such claims and losses, and shall pay all costs and attorneys' fees expended by the City in the defense of such claims and losses, including appeals. The parties agree that one percent (1%) of the total compensation to the Consultant for performance of the Services under this Agreement is the specific consideration from the City to the Consultant for the Consultant's Indemnity Agreement. The Consultant's obligation under this Subsection shall not include the obligation to indemnify the City of Miami Beach and its officers, employees and agents, from and against any actions or claims which arise or are alleged to have arisen from negligent acts or omissions or other wrongful conduct of the City 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. 3 4.6 TERMINATION, SUSPENSION AND SANCTIONS 4.6.1 Termination for Cause If the Consultant shall fail to fulfill in a timely manner, or otherwise violate any of the covenants, agreements, or stipulations material to this Agreement, the City shall thereupon have the right to terminate the Services then remaining to be performed. Prior to exercising its option to terminate for cause, the City shall notify the Consultant of its violation of the particular terms of this Agreement and shall grant Consultant seven (7) days to cure such default. If such default remains uncured after seven (7) days, the City, upon three (3) days' notice to Consultant, may terminate this Agreement and the City shall be fully discharged from any and all liabilities, duties and terms arising out of/or by virtue of this Agreement. Notwithstanding the above, the Consultant shall not be relieved of liability to the City for damages sustained by the City by any breach of the Agreement by the Consultant. The City, at its sole option and discretion, shall additionally be entitled to bring any and all legal/equitable actions that it deems to be in its best interest in order to enforce the City's right and remedies against the defaulting party. The City shall be entitled to recover all costs of such actions, including reasonable attorneys' fees. To the extent allowed by law, the defaulting party waives its right to jury trial and its right to bring permissive counter claims against the City in any such action. 4.6.2 Termination for Convenience of City THE CITY MAY ALSO, FOR ITS CONVENIENCE AND WITHOUT CAUSE, TERMINATE THE SERVICES THEN REMAINING TO BE PERFORMED AT ANY TIME DURING THE TERM HEREOF BY GIVING WRITTEN NOTICE TO CONSULTANT OF SUCH TERMINATION, WHICH SHALL BECOME EFFECTIVE FORTY-FIVE (45) DAYS FOLLOWING RECEIPT BY THE CONSULTANT OF THE WRITTEN TERMINATION NOTICE. IN THAT EVENT, ALL FINISHED OR UNFINISHED DOCUMENTS AND OTHER MATERIALS, AS DESCRIBED IN SECTION 2 AND IN EXHIBIT "A" SHALL BE PROPERLY ASSEMBLED AND DELIVERED TO THE CITY AT CONSULTANT'S SOLE COST AND EXPENSE. IF THE AGREEMENT IS TERMINATED BY THE CITY AS PROVIDED IN THIS SUBSECTION, CONSULTANT SHALL BE PAID FOR ANY SERVICES SATISFACTORILY PERFORMED, AS DETERMINED BY THE CITY AT ITS DISCERTION, UP TO THE DATE OF TERMINATION. 4.6.3 Termination for Insolvency The City also reserves the right to terminate the remaining Services to be performed in the event the Consultant is placed either in voluntary or involuntary bankruptcy or makes an assignment for the benefit of creditors. In such event, the right and obligations for the parties shall be the same as provided for in Section 4.6.2. 4.6.4 Sanctions for Noncompliance with Nondiscrimination Provisions In the event of the Consultant's noncompliance with the nondiscrimination provisions of this Agreement, the City shall impose such sanctions as the City or the State of Florida may determine to be appropriate, including but not limited to, withholding of payments to the Consultant under the 4 Agreement until the Consultant complies and/or cancellation, termination or suspension of the Services. In the event the City cancels or terminates the Services pursuant to this Subsection the rights and obligations of the parties shall be the same as provided in Section 4.6.2. 4.7 CHANGES AND ADDITIONS Changes and additions to the Agreement shall be directed by a written amendment signed by the duly authorized representatives of the City and Consultant. No alteration, change, or modification of the terms of this Agreement shall be valid unless amended in writing, signed by both parties hereto, and approved by the City. 4.8 AUDIT AND INSPECTIONS At any time during normal business hours and as often as the City may deem necessary, there shall be made available to the City and/or such representatives as the City may deem to act on its behalf, to audit, examine and make audits of all contracts, invoices, materials, payrolls, records of personnel, conditions of employment and other data relating to all matters covered by this Agreement. Consultant shall maintain any and all records necessary to document compliance with the provisions of this Agreement. 4.9 ACCESS TO RECORDS Consultant agrees to allow access during normal business hours to all financial records to the City 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 City or its representatives when deemed necessary to insure compliance with applicable accounting and financial standards. Consultant shall allow access during normal 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 City. 4.10 INSURANCE REQUIREMENTS The Consultant shall not commence any work pursuant to this Agreement until all insurance required under this Section has been obtained and such insurance has been approved by the City's Risk Manager. The Consultant shall maintain and carry in full force during the term of this Agreement the following insurance: 1. Consultant General Liability in the amount of $1,000,000, naming the City of Miami Beach, Florida, as an additional insured. 2. Consultant Professional Liability in the amount of $200,000. 3. Workers Compensation & Employers Liability as required pursuant to Florida statute. 4. The insurance must be furnished by insurance companies authorized to do business in the State of Florida. 5. Original certificates of insurance for the above coverage must be submitted to the City's Risk Manager for approval prior to any work commencing. These certificates will be kept rd on file in the office of the Risk Manager, 3 Floor, City Hall. 6. The Consultant is solely responsible for obtaining and submitting all insurance certificates for its sub-consultants. 5 All insurance policies must be issued by companies authorized to do business under the laws of the State of Florida. The companies must be rated no less than "B+" as to management and not less than "Class VI" as to strength by the latest edition of Best's Insurance Guide, published by A.M. Best Company, Oldwick, New Jersey, or its equivalent. Compliance with the foregoing requirements shall not relieve the Consultant of the liabilities and obligations under this Section or under any other portion of this Agreement, and the City shall have the right to obtain from the Consultant specimen copies of the insurance policies in the event that submitted certificates of insurance are inadequate to ascertain compliance with required overage. 4.10.1 Endorsements All of Consultant's certificates, above, shall contain wording that the insurer will endeavor to provide written notice to the City at least thirty (30) days prior to termination, cancellation or reduction in coverage in the policy. 4.10.2 Certificates Unless directed by the City otherwise, the Consultant shall not commence any Services pursuant to this Agreement until the City has received and approved, in writing, certificates of insurance showing that the requirements of this Section (in its entirety) have been met and provided for. 4.11 ASSIGNMENT, TRANSFER OR SUBCONTRACTING The Consultant shall not sub-contract, assign, or transfer any work under this Agreement without the prior written consent of the City. 4.12 SUB-CONSULTANTS The Consultant shall be liable for the Consultant's services, responsibilities and liabilities under this Agreement and the services, responsibilities and liabilities of sub-consultants, and any other person or entity acting under the direction or controls of the Consultant. When the term "Consultant" is used in this Agreement, it shall be deemed to include any sub-consultants and any other person or entity acting under the direction or control of Consultant. All sub-consultants must be approved of in writing prior to their engagement by Consultant. 4.13 EQUAL EMPLOYMENT OPPORTUNITY In connection with the performance of this Agreement, the Consultant shall not discriminate against any employee or applicant for employment because of race, color, religion, ancestry, sex, age, and national origin, place of birth, marital status, sexual orientation or physical handicap. The Consultant shall take affirmative action to ensure that applicants are employed and that employees are treated during their employment without regard to their race, color, religion, ancestry, sex, age, national origin, place of birth, marital status, disability, or sexual orientation. 6 4.14 CONFLICT OF INTEREST The Consultant agrees to adhere to and be governed by the Metropolitan Miami-Dade County Conflict of Interest Ordinance (No.72-82), and by the City of Miami Beach Charter and Code (as same may be amended from time to time); all of which are incorporated by reference herein as if fully set forth herein, in connection with the Agreement conditions hereunder. The Consultant covenants that it presently has no interest and shall not acquire any interest, direct or indirectly which should conflict in any manner or degree with the performance of the Services. The Consultant further covenants that in the performance of this Agreement, no person having any such interest shall knowingly be employed by the Consultant. No member of or delegate to the Congress of the United States shall be admitted to any share or part of this Agreement or to any benefits arising therefrom. 4.15 PATENT RIGHTS; COPYRIGHTS; CONFIDENTIAL FINDINGS Any patentable result arising out of this Agreement, as well as all information, design specifications, processes, data and findings, shall be made available to the City of public use. No reports, other documents, articles or devices produced in whole or in part under this Agreement shall be the subject of any application for copyright or patent by or on behalf of the Consultant or its employees or sub-Consultants. 4.16 NOTICES All notices and communications in writing required or permitted hereunder may be delivered personally to the representatives of the Consultant and the City listed below or may be mailed by registered mail, postage prepaid (or airmailed if addressed to an address outside of the city of dispatch). 7 Until changed by notice in writing, all such notices and communications shall be addressed as follows: TO CONSULTANT: Richard Montalbano, Managing Director RBC Capital Markets 100 Second Avenue South, Suite 800 St. Petersburg, FL 33701 (727) 825-7712 TO CITY: City of Miami Beach c/o Patricia Walker Chief Financial Officer 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 city of dispatch, on the day following the date mailed; and if mailed to an address outside the city of dispatch on the seventh day following the date mailed. 4.17 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 of the terms or conditions herein, exclusive venue for the enforcement of same shall lie in Miami-Dade County, Florida. By entering into this agreement, the Consultant and City expressly waive any rights either party may have to a trial by jury of any civil litigation related to, or arising out of, this agreement. 4.18 ENTIRETY OF AGREEMENT This writing and the Services embody the entire Agreement and understanding between the parties hereto, and there are no other agreements and understanding, oral or written with reference to the subject matter hereof that are not merged herein and superseded hereby. 4.19 LIMITATION OF CITY'S LIABILITY The City desires to enter into this Agreement only if in so doing the City can place a limit on the City's liability for any cause of action for money damages due to an alleged breach by the City of this Agreement, so that its liability for any such breach never exceeds the sum of $1,000. Consultant hereby expresses its willingness to enter into this Agreement with Consultant's recovery from the City for any damage action for breach of contract to be limited to a maximum amount of $1,000. 8 Accordingly, and notwithstanding any other term or condition of this Agreement, Consultant hereby agrees that the City shall not be liable to the Consultant for damages in an amount in excess of $1,000 for any action or claim for breach of contract arising out of the performance or non- performance of any obligations imposed upon the City by this Agreement. Nothing contained in this paragraph or elsewhere in this Agreement is in any way intended to be a waiver of the limitation placed upon the City's liability as set forth in Section 768.28, Florida Statutes. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 9 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their appropriate officials, as of the date first entered above. FOR CITY: ATTEST: City Clerk Robert Parcher FOR CONSULTANT: ATTEST: SA D. PINDER CUTIVE OFFICE ASSOCIATE CITY OF MIAMI BEACH CITY OF MIAMI BEACH, FLORIDA EY: t - Mayor Matti H. Bower By: 10 APPROVEb A3 T4 FORM & LANGUAGE 8 FObt'~XECUTlON MANAGING DIRECTOR RBC CA'I'AL MARKETS EXHIBIT A SCOPE OF SERVICES I . FinancingL Involving A Public Offering of Debt Securities. The Consultant agrees that upon request the following services may be performed by the Consultant in consideration of the compensation in Paragraph 4 of this Exhibit "A". a. Review existing debt structure and financial resources to determine available borrowing capacity. b. Evaluate financing mechanisms and assist in the financing component of any such mechanisms chosen by the City. c. To be available, upon proper notification, to participate in conference calls, conferences, with the personnel of the City and other consultants to the City regarding financing matters. d. Provide information concerning the structure of financing programs used by other issuers. e. 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. g. Advise on the use of a negotiated or competitive bid sale for each issue. h. Coordinate bond closing and transfer of funds. Advise as to the advantages and disadvantages of municipal bond insurance or other credit enhancements. j. 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. k. 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 recommendations as to award of the bonds in the best interest of the City. m. Assist, upon request, in selection of the book-running managing underwriter and co- managing underwriters for negotiated sale of bonds. n Advise whether to utilize a selling group. o. 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. p. Review the bond purchase agreement and advise as to its acceptance or rejection in light of market conditions. 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 Consultant by the City 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. 2. Financings Not Involving a Public Offering of Debt Securities. The Consultant agrees that upon request the following services may be performed by the Consultant (in addition to the services previously described) in consideration of the compensation in Paragraph 4 of this Exhibit "A". a. Assist in the selection of a financing vehicle, including but not limited to, private placement of debt, participation in pooled loan programs, 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 and investment of bond proceeds. b. In conjunction with City's legal counsel, assist in the preparation of private placement memorandums, loan applications, or other information related to the financing. 3. Services Not Involving_Specific Financings. The Consultant agrees that upon request the following services may be performed by the Consultant in consideration of the compensation in Paragraph 4 of this Exhibit "A". a. Attend meetings related to the City's business as requested. b. Prepare debt capacity reports and other requested services, such as periodic rating agency updates and other special studies as directed by the City. 4. Compensation. The Consultant shall be compensated, for all work performed, for the City pursuant to Paragraphs 1, 2, and 3 of this Exhibit "A" as follows: I3 a. The Consultant shall be paid the following hourly rates for all time expended by its personnel for specific projects requested in writing by the City, as follows: Managing Director and Director $225 per hour Vice President $200 per hour 12 Associate Vice President and Financial Analyst Support Staff $1 SO per hour no charge Alternatively, the City may wish to negotiate a fixed price for such special projects. The City and the Consultant acknowledge that there will be special projects for which the services of the Consultant 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 Consultant shall be paid at closing in accordance with the following schedule with a minimum fee of $15,000 per transaction: Par Amount of Bonds Issued Fee Per $1,000 First $0 - $50,000,000 $1.25 $50,000,000 - $100,000,000 $1.00 $100,000,000 -and more $0.75 There shall be a surcharge of $5,000 for competitive sales and/or refundings. c. In the capacity of placement and/or pricing agent of interest rate swaps or other derivative products, Consultant will charge a fee of five basis points (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 reinvestment of bond proceeds Consultant will charge a fee of 3 basis points computed on the same basis as described in the previous sentence. d. 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 Consultant 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 City. e. For conduit financings proposed to be issued through the City, the Consultant shall be paid on the same fee schedule as set forth above in paragraph (b) by the Borrower. In the event that no bonds are actually issued, the Consultant shall receive a fee from the Borrower, such fee subject to negotiation between the Consultant and the Borrower, but in no event less than the dollar amount for the hours expended on the project to compensate the Consultant for the preparation and presentation to the City of a report analyzing the credit, the proposed marketing plan, and analyzing the City's protection from any risk of default on the financing and making a recommendation regarding the issuance of the proposed bonds. 13 f. The Consultant shall be reimbursed for all out-of-pocket expenses. Travel expense reimbursement shall comply with the City's policy for reimbursement of City employees. 5. Other Services. The City agrees that the following category of services, or other services not enumerated herein, when requested in writing to be performed by the Consultant shall be compensated in a mutually agreed upon manner confirmed in writing by both parties. a. Assisting with validation proceedings and/or testifying as an expert witness with respect to offerings. b. Providing secondary market disclosure services upon request in compliance with Rule 15c(2)-12 of the Securities and Exchange Commission. c. Participating in the development of a financial plan for the City's capital improvements program. d. Advice on various budget and funding matters not specifically related to the offer of securities or other financings referenced in Paragraphs 1 and 2 of this Exhibit. 6. The parties acknowledge that if the Consultant sells securities for investment programs to the City such sale is in the Consultant's role as a broker/dealer and as principal and the City acknowledges that amark-up will be charged on the sale, which markup shall be disclosed to the City. 7. Richard Montalbano, Managing Director, will be the primary banker for the Consultant for all work performed herewith. Sonya Little, Vice President, will provide project support for all work performed herewith. Other professionals will perform services as directed by Richard Montalbano. Neither Richard Montalbano nor Sonya Little may be removed from this position without City's written approval. 8. The Consultant shall be entitled to the reimbursement of expenses associated with all services contemplated herein in full. 9. The parties acknowledge that the Consultant may have ongoing business relationships with other investment banking firms and financial advisors, including firms doing business with the City. 15 10. This Exhibit does not govern, nor does it prohibit the Consultant from serving in other roles, such as investing funds as a broker/dealer, selling securities to the City as principal or other activities. 14