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R98-14 02-09-98RESOLUTION NO. R98-14 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO ENTER INTO A CONTRACT WITH VINSON & ELKINS, L.L.P., FOR THE DEVELOPMENT OF FINANCING PLANS AND LEGAL STRUCTURES FOR ECONOMIC DEVELOPMENT PROJECTS. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. That certain contract by and between the City of Pearland and Vinson & Elkins, L.L.P., a copy of which is attached hereto as Exhibit "A" and made a part hereof for all purposes, is hereby authorized and approved. Section 2. That the City Manager or his designee is hereby authorized to execute and the City Secretary to attest the original of the attached contract with Vinson & Elkins, L.L.P., for and on behalf of the City of Pearland, for the development of financing plans and legal structures for economic development projects. PASSED, APPROVED and ADOPTED this the , A.D., 1998. ATTEST: CITY ATTORNEY TOM REID MAYOR 9th, day of February Exhibit "A" WRITER'S TELEPHONE (713) 758-2096 Vinson&ff lkins ATTORNEYS AT LAW VINSON & ELKINS L.L.P. 2300 FIRST CITY TOWER I001 FANNIN STREET HOUSTON, TEXAS 77002-6760 TELEPHONE (713) 758-2222 FAX (713) 758-2346 December 8, 1997 WRITER'S FAX (713) 615-5523 Mr. Paul Grohman City Manager City of Pearland 3519 Liberty Drive Pearland, Texas 77581 Dear Paul: We appreciate being asked to represent the City of Pearland (the "City") in connection with the development of preliminary financing plans and legal structures for proposed economic development projects in the City for retail shopping and community sports and tourism facilities. Our experience has been that it is mutually beneficial to set forth, at the outset of our representation, the role and responsibilities of both our law firm and the client. That is the purpose of both this letter and the separate Standard Terms of Engagement for Legal Services that is enclosed with this letter. Client The client for this engagement is the City of Pearland, Texas This engagement does not create an attorney-client relationship with any other persons or entities, such as, developers and their parents, subsidiaries, affiliates, employees, officers, directors, shareholders, or partners. Scope of Engagement As your counsel we Will develop alternative methods for financing public improvements and, with the assistance of your financial advisors, create preliminary financing plans for proposed economic development projects in the City for retail shopping and community sports and tourism facilities. This engagement will include only the matter described in this paragraph. Should the City decide to proceed with these projects, our representation would be confirmed by written supplement to this letter. We understand and agree that this is not an exclusive agreement, and you are free to retain any other counsel of your choosing. We recognize that we shall be disqualified from representing any other client with interests materially and directly adverse to yours (i) in any HOUSTON DALLAS WASHINGTON. D.C. AUSTIN MOSCOW LONDON SINGAPORE Mr. Paul Grohman Page 2 December 8, 1997 matter where there is a reasonable probability that confidential information you furnished to us could be used to your disadvantage. You understand and agree that, with those exceptions, we are free to represent other clients, including clients whose interests may conflict with yours in litigation, business transactions, or other legal matters. You agree that our representing you in this matter will not prevent or disqualify us from representing clients adverse to you in other matters and that you consent in advance to our undertaking such adverse representations. You are advised that we presently represent Brazoria County Municipal Utility District No. 4, as general counsel and bond counsel, which is located in the City's extraterritorial jurisdiction. This engagement and our attorney-client relationship will be terminated when we have completed the services in the matters covered by this engagement letter and any written supplements to this engagement letter. If you later retain us to perform further or additional services, our attorney-client relationship will be established by another engagement letter. Our firm represents a number of lawyers and law firms in professional liability, business, tax and other matters. This means that we may have represented, may currently represent, or in the future may represent counsel opposing your interests in a matter in which we represent you. This will not in any way affect the diligence or vigor with which we represent your interests in the matter or the matters on which you engage our firm. If this is a concern to you, please let us know and we will check on the particular lawyers involved in your matter or matters. Cooperation In order to enable us to render effectively the legal services contemplated, the City has agreed to disclose fully and accurately all facts and keep us informed of all developments relating to this matter. We necessarily must rely on the accuracy and completeness of the facts and information you and your agents provide to us. To the extent it is necessary for the City's representatives to attend meetings in connection with this matter, we will attempt to schedule them so that the convenience of those representatives can be served. Fees For this matter, our fees will be based on the time spent by the lawyers and paralegal personnel who work on the matter. Our total fees on this matter shall not exceed $25,000, except with your prior written consent. Billing rates for our attorneys vary according to the experience of the individuals. In an effort to reduce overall legal costs, we utilize paralegal personnel whenever appropriate. Billing rates for both attorneys and paralegal personnel are, from time to time, reviewed and adjusted and may be changed with or without notice. Please feel free at any time to ask for our current rates. F:\JB0423\ENGAGE\PEARLAND.WPD Mr. Paul Grohman Page 3 December 8, 1997 In addition to our fees, there will be other charges for items incident to the performance of our legal services, such as photocopying, messengers, travel expenses, long-distance telephone calls, facsimile transmissions, postage, overtime for secretaries and other non-legal staff, specialized computer applications such as computerized legal research, and filing fees. The basis upon which we establish these other charges is set forth in the Standard Terms of Engagement For Legal Services. Withdrawal or Termination Our relationship is based upon mutual consent and you may terminate our representation at any time, with or without cause, by notifying us. Your termination of our services will not affect your responsibility for payment of fees for legal services rendered and of other charges incurred before termination and in connection with an orderly transition of the matter. We are subject to the rules of professional conduct for the jurisdictions in which we practice, which list several types of conduct or circumstances that require or allow us to withdraw from representing a client, including for example, nonpayment of fees or costs, misrepresentation or failure to disclose material facts, fundamental disagreements, and conflict of interest with another client. We try to identify in advance and discuss with our client any situation which may lead to our withdrawal, and if withdrawal ever becomes necessary, we give the client written notice of our withdrawal. If we elect to withdraw for any reason, you will take all steps necessary to free us of any obligation to perform further, including the execution of any documents necessary to complete our withdrawal, and we will be entitled to be paid for all services rendered and other charges accrued on your behalf to the date of withdrawal. Other If the foregoing, including the items set forth in the enclosed Standard Terms of Engagement For Legal Services, correctly reflects your understanding of the terms and conditions of our representation, please so indicate by executing the enclosed copy of this letter in the space provided below and return it to the undersigned. Please contact me if you have any questions. We are pleased to have this opportunity to be of service and to work with you. Very truly yours, F:\JB0423\ENGAGE\PEARLAND.WPD VINSON & ELKINS L.L.P. Standard Terms of Engagement for Legal Services This statement sets forth certain standard terms of our engagement as your lawyers and is intended as a supplement to the engagement letter that we have with you as our client. Unless modified in writing by mutual agreement, these terms will be an integral part of our agreement with you as reflected in the engagement letter. Therefore, we ask that you review this statement carefully and contact us promptly if you have any questions. We suggest that you retain this statement in your file with the engagement letter. The Scope of Our Work You should have a clear understanding of the legal services we will provide. Any questions that you have should be dealt with promptly. We will at all times act on your behalf to the best of our ability. Any expressions on our part concerning the outcome of your legal matters are expressions of our best professional judgment, but are not guarantees. Such opinions are necessarily limited by our knowledge of the facts and are based on the state of the law at the time they are expressed. It is our policy that the person or entity that we represent is the person or entity that is identified in our engagement letter, and absent an express agreement to the contrary does not include any affiliates of such person or entity (i.e., if you are a corporation or partnership, any parents, subsidiaries, employees, officers, directors, shareholders or partners of the corporation or partnership, or commonly owned corporations or partnerships; or, if you are a trade association, any members of the trade association). If you believe this engagement includes additional entities or persons as our clients you should inform us immediately. It is also our policy that the attorney-client relationship will be considered terminated upon our completion of any services that you have retained us to perform. If you later retain us to perform further or additional services, our attorney-client relationship will be revived subject to the terms of engagement that we agree on at that time. This engagement shall be subject to the Texas Disciplinary Rules of Professional Conduct. Who Will Provide the Legal Services Customarily, each client of the firm is served by a principal attorney contact. The principal attorney should be someone in whom you have confidence and with whom you enjoy working. You are free to request a change of principal attorney at any time. Subject to the supervisory role of the principal attorney, your work or parts of it may be performed by other lawyers and legal assistants in the firm. Such delegation may be for the purpose of involving lawyers or legal assistants with special expertise in a given area or for the purpose of providing services on the most efficient and timely basis. Whenever practicable, we will advise you of the names of those attorneys and legal assistants who work on your matters. -1- How Our Fees Will Be Set Generally, our fees are based on the time spent by the lawyers and paralegal personnel who work on the matter. We will charge for all time spent in representing your interests, including, by way of illustration, telephone and office conferences with you and your representatives, consultants (if any), opposing counsel, and others; conferences among our legal and paralegal personnel; factual investigation; legal research; responding to your requests for us to provide information to your auditors in connection with reviews or audits of financial statements; drafting letters and other documents; and travel. We will keep accurate records of the time we devote to your work in units of quarters of an hour. The hourly rates of our lawyers and legal assistants are reviewed and adjusted annually on a Firm-wide basis to reflect current levels of legal experience, changes in overhead costs, and other factors. Although we may from time to time, at the client's request, furnish estimates of legal fees and other charges that we anticipate will be incurred, these estimates are by their nature inexact (due to unforeseeable circumstances) and, therefore, the actual fees and charges ultimately billed may vary from such estimates. With your advance agreement, the fees ultimately charged may be based upon a number of factors, such as: The time and effort required, the novelty and complexity of the issues presented, and the skill required to perform the legal services promptly; The fees customarily charged in the community for similar services and the value of the services to you; The amount of money or value of property involved and the results obtained; The time constraints imposed by you as our client and other circumstances, such as an emergency closing, the need for injunctive relief from court, or substantial disruption of other office business; The nature and longevity of our professional relationship with you; The experience, reputation and expertise of the lawyers performing the services; The extent to which office procedures and systems have produced a high-quality product efficiently. For certain well-defined services (for example, a simple business incorporation), we will (if requested) quote a flat fee. It is our policy not to accept representation on a flat-fee basis except in such defined-service areas or pursuant to a special arrangement tailored to the needs of a particular client. In all such situations, the flat fee arrangement will be expressed in a letter, setting forth both the amount of the fee and the scope of the services to be provided. -2- We also will, in appropriate circumstances, provide legal services on a contingent fee basis. Any contingent fee representation must be the subject of a separate and specific engagement letter. Additional Charges In addition to our fees, there will be other charges for items incident to the performance of our legal services, such as photocopying, messengers, travel expenses, long-distance telephone calls, facsimile transmissions, postage, overtime for secretaries and other non-legal staff, specialized computer applications such as computerized legal research, and filing fees. The current basis for these charges is set forth below. The Firm will review this schedule of charges on an annual basis and adjust them to take into account changes in the Firm's costs and other factors. Duplicating The Firm charges $. 15 per page. Courier Services The Firm charges an amount which generally represents cost including the distribution service provided by the Firm. Depending on the volume of work performed by a service provider, the Firm may receive a volume discount during a particular accounting period for which no adjustment is made on an individual client's bill. Computer Aided Legal Research (CALR) Third party providers of CALR services charge the Firm amounts each month based on the type, extent, and duration of the services provided. The Firm charges clients for client research only based on the computed cost to the Firm for the use of the services. This cost is monitored and revised periodically to achieve an average "at cost" rate for clients. Telefax The Firm charges $1.00 telephone costs. per page for outgoing telefaxes, which includes all Telephone The Firm does not charge for local calls. Due to the Firm-wide volume of long distance calls and multitude of rates for the various area codes and exchanges (over 65,000), the Firm does not bill each individual call based on the statements received from providers, but rather charges a flat rate of $.41 per minute for each long distance call made within the United States. This rate ($.41) is an approximation of third party provider charges and internal costs associated with this service. International calls are charged based on the rate in effect for the country being called. Travel-Related Expenses Airfare, meals, and related travel expenses charged to the client represent actual, out-of-pocket cost. Depending on the volume of both Firm and personal travel, the Firm may receive beneficial services, including airline tickets from its travel agent -3- for which no adjustment is made on an individual client's account. In addition, credits earned under the Frequent Flyer Programs accrue to the individual traveler and not to the Firm. All Other Costs The Firm charges actual disbursements for third-party services like court reporters, expert witnesses, etc., and may recoup expenses reasonably incurred in connection with services performed in-house, such as mail services, secretarial overtime, file retrieval, etc. Unless special arrangements are otherwise made, fees and expenses of others (such as experts, investigators, consultants and court reporters) will be the responsibility of, and billed directly to, the client. Further, all invoices in excess of $500 will be forwarded to the client for direct payment. Billing Arrangements and Terms Our billing rates are based on the assumption of prompt payment. Consequently, unless other arrangements are made, fees for services and other charges will be billed monthly and are payable within thirty days of receipt. Advances Clients of the firm are sometimes asked to deposit funds as an advance payment with the firm. The advance payment will be applied first to payment of charges for such items as photocopying, messengers, travel, etc., as more fully described above, and then to fees for services. The advance will be deposited in our client advance account and we will charge such other charges and our fees against the advance and credit them on our billing statements. In the event such other charges and our fees for services exceed the advance deposited with us, we will bill you for the excess monthly or may request additional advances. Any unused portion of amounts advanced will be refundable at the conclusion of our representation. Client Documents We will maintain any documents you furnish to us in our client file (or files) for this matter. At the conclusion of the matter (or earlier, if appropriate), it is your obligation to advise us as to which, if any, of the documents in our files you wish us to turn over to you. These documents will be delivered to you within a reasonable time after receipt of payment for outstanding fees and costs. We will retain any remaining documents in our files for a certain period of time and ultimately destroy them in accordance with our record retention program schedule then in effect. -4- Mr. Paul Grohman Page 4 December 8, 1997 AGREED TO AND ACCEPTED: City of Pearla , Texa ~!' BY:Ma~u' '"~~i ty Manager F:\JB0423\ENGAGE\PEARLAND.WPD Vinson&Elkins ATTORNEYS AT LAW VINSON&ELKINS L.L.P 2300 FIRST CITY TOWER 1001 FANNIN STREET HOUSTON, TEXAS 77002-6760 TELEPHONE(713)758-2222 FAX(713) 758-2346 WRITER'S TELEPHONE WRITER'S FAX (713) 758-2096 (713)615-5523 August 21, 1998 Mr. Paul Grohman City Manager City of Pearland - 3519 Liberty Drive Pearland, Texas 77581 Dear Paul: In accordance with my discussion with you and Darrin Coker, I am writing to confirm that our December 8, 1997, engagement letter between Vinson & Elkins L.L.P. and our client, the City of Pearland, authorizes us to represent the City in connection with the development of any financing plans and legal structures for economic development projects as approved by the City of Pearland City Council Resolution No. R98-14, dated February 9, 1998. As we have discussed, this work will include the creation and representation of tax increment refinancing zones ("TIRZs") , public improvement districts ("PIDs"), management districts, non-profit corporations, municipal utility districts, or any other type of legal structures or legal entities to assist economic development projects. As you know, we are currently working with you and your staff in analyzing the entities we want to create on behalf of the City for the Collins Brothers proposed development project involving approximately 3,000 acres in the City of Pearland area. This letter clarifies our earlier engagement letter executed December 8, 1997, with the City of Pearland. By execution of this supplement, the City of Pearland acknowledges this clarification and accepts this supplement to our earlier engagement letter. We have also attached our Standard Terms of Engagement to this supplement. We appreciate the opportunity to work for the City of Pearland. Sincerely, James A. Boone HOUSTON DALLAS WASHINGTON,D.C. AUSTIN MOSCOW LONDON SINGAPORE Mr. Paul Grohman Page 2 August 21, 1998 '54 Accepted this -Z- day of AC91,184- , 1998. CITY OF P RAND By: Name: Pa1A 1 VJ. mh"vox) Title: C. I M av' Gt 3e1 I Enclosure F:\JB0423\ENGAGE\P EARLAN D.SU P • VINSON & ELKINS L.L.P. Standard Terms of Engagement for Legal Services This statement sets forth certain standard terms of our engagement as your lawyers and is intended as a supplement to the engagement letter that we have with you as our client. Unless modified in writing by mutual agreement, these terms will be an integral part of our agreement with you as reflected in the engagement letter. Therefore, we ask that you review this statement carefully and contact us promptly if you have any questions. We suggest that you retain this statement in your file with the engagement letter. The Scope of Our Work You should have a clear understanding of the legal services we will provide. Any questions that you have should be dealt with promptly. We will at all times act on your behalf to the best of our ability. Any expressions on our part concerning the outcome of your legal matters are expressions of our best professional judgment, but are not guarantees. Such opinions are necessarily limited by our knowledge of the facts and are based on the state of the law at the time they are expressed. It is our policy that the person or entity that we represent is the person or entity that is identified in our engagement letter, and absent an express agreement to the contrary does not include any affiliates of such person or entity (i.e., if you are a corporation or partnership, any parents, subsidiaries, employees, officers, directors, shareholders or partners of the corporation or partnership, or commonly owned corporations or partnerships; or, if you are a trade association, any members of the trade association). If you believe this engagement includes additional entities or persons as our clients you should inform us immediately. It is also our policy that the attorney-client relationship will be considered terminated upon our completion of any services that you have retained us to perform. If you later retain us to perform further or additional services, our attorney-client relationship will be revived subject to the terms of engagement that we agree on at that time. This engagement shall be subject to the Texas Disciplinary Rules of Professional Conduct. Who Will Provide the Legal Services Customarily, each client of the firm is served by a principal attorney contact. The principal attorney should be someone in whom you have confidence and with whom you enjoy working. You are free to request a change of principal attorney at any time. Subject to the supervisory role of the principal attorney, your work or parts of it may be performed by other lawyers and legal assistants in the firm. Such delegation may be for the purpose of involving lawyers or legal assistants with special expertise in a given area or for the purpose of providing services on the most efficient and timely basis. Whenever practicable, we will advise you of the names of those attorneys and legal assistants who work on your matters. How Our Fees Will Be Set Generally, our fees are based on the time spent by the lawyers and paralegal personnel who work on the matter. We will charge for all time spent in representing your interests, including, by way of illustration, telephone and office conferences with you and your representatives, consultants (if any), opposing counsel, and others; conferences among our legal and paralegal personnel; factual investigation; legal research; responding to your requests for us to provide information to your auditors in connection with reviews or audits of financial statements; drafting letters and other documents; and travel. We will keep accurate records of the time we devote to your work in units of quarters of an hour. The hourly rates of our lawyers and legal assistants are reviewed and adjusted annually on a Firm-wide basis to reflect current levels of legal experience, changes in overhead costs, and other factors. Although we may from time to time, at the client's request, furnish estimates of legal fees and other charges that we anticipate will be incurred, these estimates are by their nature inexact (due to unforeseeable circumstances) and, therefore, the actual fees and charges ultimately billed may vary from such estimates. With your advance agreement, the fees ultimately charged may be based upon a number of factors, such as: The time and effort required, the novelty and complexity of the issues presented, and the skill required to perform the legal services promptly; The fees customarily charged in the community for similar services and the value of the services to you; The amount of money or value of property involved and the results obtained; The time constraints imposed by you as our client and other circumstances, such as an emergency closing, the need for injunctive relief from court, or substantial disruption of other office business; The nature and longevity of our professional relationship with you; The experience, reputation and expertise of the lawyers performing the services; The extent to which office procedures and systems have produced a high-quality product efficiently. For certain well-defined services (for example, a simple business incorporation), we will (if requested) quote a flat fee. It is our policy not to accept representation on a flat-fee basis except in such defined-service areas or pursuant to a special arrangement tailored to the needs of a particular client. In all such situations, the flat fee arrangement will be expressed in a letter, setting forth both the amount of the fee and the scope of the services to be provided. 2 • We also will, in appropriate circumstances, provide legal services on a contingent fee basis. Any contingent fee representation must be the subject of a separate and specific engagement letter. Additional Charges In addition to our fees, there will be other charges for items incident to the performance of our legal services, such as photocopying, messengers, travel expenses, long-distance telephone calls, facsimile transmissions, postage, overtime for secretaries and other non-legal staff, specialized computer applications such as computerized legal research, and filing fees. The current basis for these charges is set forth below. The Firm will review this schedule of charges on an annual basis and adjust them to take into account changes in the Firm's costs and other factors. Duplicating The Firm charges $.15 per page. Courier Services The Firm charges an amount which generally represents cost including the distribution service provided by the Firm. Depending on the volume of work performed by a service provider, the Firm may receive a volume discount during a particular accounting period for which no adjustment is made on an individual client's bill. Computer Aided Legal Research (CALR) Third party providers of CALR services charge the Firm amounts each month based on the type, extent, and duration of the services provided. The Firm charges clients for client research only based on the computed cost to the Firm for the use of the services. This cost is monitored and revised periodically to achieve an average "at cost" rate for clients. Telefax The Firm charges $1.00 per page for outgoing telefaxes, which includes all telephone costs. Telephone The Firm does not charge for local calls. Due to the Firm-wide volume of long distance calls and multitude of rates for the various area codes and exchanges (over 65,000), the Firm does not bill each individual call based on the statements received from providers, but rather charges a flat rate of$.41 per minute for each long distance call made within the United States. This rate ($.41) is an approximation of third party provider charges and internal costs associated with this service. International calls are charged based on the rate in effect for the country being called. 3 s Travel-Related Expenses Airfare, meals, and related travel expenses charged to the client represent actual, out-of-pocket cost. Depending on the volume of both Firm and personal travel, the Firm may receive beneficial services, including airline tickets from its travel agent for which no adjustment is made on an individual client's account. In addition, credits earned under the Frequent Flyer Programs accrue to the individual traveler and not to the Firm. All Other Costs The Firm charges actual disbursements for third-party services like court reporters, expert witnesses, etc., and may recoup expenses reasonably incurred in connection with services performed in-house, such as mail services, secretarial overtime, file retrieval, etc. Unless special arrangements are otherwise made, fees and expenses of others (such as experts, investigators, consultants and court reporters) will be the responsibility of, and billed directly to, the client. Further, all invoices in excess of$500 will be forwarded to the client for direct payment. Billing Arrangements and Terms Our billing rates are based on the assumption of prompt payment. Consequently, unless other arrangements are made, fees for services and other charges will be billed monthly and are payable within thirty days of receipt. Advances Clients of the firm are sometimes asked to deposit funds as an advance payment with the firm. The advance payment will be applied first to payment of charges for such items as photocopying, messengers, travel, etc., as more fully described below, and then to fees for services. The advance will be deposited in our client advance account and we will charge such other charges and our fees against the advance and credit them on our billing statements. In the event such other charges and our fees for services exceed the advance deposited with us, we will bill you for the excess monthly or may request additional advances. Any unused portion of amounts advanced will be refundable at the conclusion of our representation. Client Documents We will maintain any documents you furnish to us in our client file (or files) for this matter. At the conclusion of the matter (or earlier, if appropriate), it is your obligation to advise us as to which, if any, of the documents in our files you wish us to turn over to you. These documents will be delivered to you within a reasonable time after receipt of payment for outstanding fees and costs. We will retain any remaining documents in our files for a certain period of time and ultimately destroy them in accordance with our record retention program schedule then in effect. 4 RESOLUTION NO. R98-14 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO ENTER INTO A CONTRACT WITH VINSON & ELKINS, L.L.P., FOR THE DEVELOPMENT OF FINANCING PLANS AND LEGAL STRUCTURES FOR ECONOMIC DEVELOPMENT PROJECTS. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. That certain contract by and between the City of Pearland and Vinson & Elkins, L.L.P., a copy of which is attached hereto as Exhibit "A" and made a part hereof for all purposes, is hereby authorized and approved. Section 2. That the City Manager or his designee is hereby authorized to execute and the City Secretary to attest the original of the attached contract with Vinson & Elkins, L.L.P., for and on behalf of the City of Pearland, for the development of financing plans and legal structures for economic development projects. PASSED, APPROVED and ADOPTED this the 9th day of February A.D., 1998. TOM REID MAYOR ATTEST: dam/ YF. NGL F G f ► SE is TARP APPROV I AS TO FORM: AM MO ES McCULLOUGH CITY ATTORNEY