Disclosure of Conflicts of Interest

Pursuant to Municipal Securities Rulemaking Board (“MSRB”) Rule G-42, on Duties of Non-Solicitor Municipal Advisors, Municipal Advisors are required to make certain written disclosures to clients which include, amongst other things, Conflicts of Interest of Partner Capital Advisors LLC (“PCA”) and its associated persons.

Conflicts of Interest

• Conflicts Arising from Compensation Fixed, Hourly or Contingent on the Size or Closing of Any Transaction 
• PCA will be paid for certain services based on the size of the financing or in a fixed or hourly amount, as agreed with you for each financing, and will be paid for certain services only upon the completion of a successful financing.  These forms of compensation create a conflict as described below.  
• Compensation contingent on the size of the transaction presents a conflict of interest because the advisor may have an incentive to advise the Client to increase the size of the securities issue for the purpose of increasing the advisor’s compensation. Compensation contingent on the closing of the transaction presents a conflict because the advisor may have an incentive to recommend unnecessary financings or recommend financings that are disadvantageous to the Client.  If the transaction is to be delayed or fail to close, an advisor may have an incentive to discourage a full consideration of such facts and circumstances, or to discourage consideration of alternatives that may result in the cancellation of the financing or other transaction.
• Compensation that is based on hourly fees of PCA personnel, with the aggregate amount equaling the number of hours worked by such personnel times an agreed-upon hourly billing rate presents a conflict of interest because the advisor could create an incentive to recommend alternatives that would result in more hours worked.
• It should be noted that other forms of compensation (i.e. fixed fee based) may also present a conflict of interest.  Fixed compensation presents a conflict of interest because the advisor may have an incentive to minimize its services to increase its profits from a transaction.  If the transaction is to be delayed or fail to close, an advisor may have an incentive to discourage a full consideration of such facts and circumstances, or to discourage consideration of alternatives that may result in the cancellation of the financing or other transaction.
• These conflicts of interest are mitigated by our regulatory obligation to the Client which require us to render unbiased and competent advice.  In addition, as financial services professionals we understand that the long-term success of PCA comes from seeking the best long-term solutions for our clients and not from trying to achieve short-term financial gains from a single transaction.  If the Client is concerned about any conflict arising from Municipal Advisor compensation, PCA is willing to discuss and provide another form of Municipal Advisor compensation.

Other Engagements or Relationships Impairing Ability to Provide Advice 

• PCA serves a wide variety of other clients that may from time to time have interests that could have a direct or indirect impact on the interests of other PCA’s clients. For example, PCA serves as municipal advisor to other municipal advisory clients and, in such cases, owes a regulatory duty to such other clients just as it does to the Client. These other clients may, from time to time and depending on the specific circumstances, have competing interests. In acting in the interests of its various clients, PCA could potentially face a conflict of interest arising from these competing client interests.  PCA fulfills its regulatory duty and mitigates such conflicts through dealing honestly and with the utmost good faith with the Client.  To the extent a structure, timing or similar issue become a concern that could affect the success of the Project, we will discuss with Client and/or other clients alternative strategies.  
• The fee paid to PCA increases the cost of investment to client.  The increased cost occurs from compensating PCA for municipal advisory services provided.