2010-304s:\legat\our documents\ordinances\10\first southwest company.doc
ORDINANCE NO. 2010-304
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS,
AUTHORIZING THE CITY MANAGER TO EXECUTE THE ATTACHED AGREEMENT
TO CONSOLIDATE THE FINANCIAL ADVISORY, ARBITRAGE REBATE, AND
CONTINUING DISCLOSURE SERVICES AGREEMENTS BETWEEN THE CITY OF
DENTON AND FIRST SOUTHWEST COMPANY; APPROVING THE EXPENDITURE OF
FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City currently has three agreements with First Southwest Company
("FSW") which are for financial advisory services, continuing disclosure services, and arbitrage
services; and
WHEREAS, the Finance Department approached FSW regarding combining the existing
agreements into a single agreement; and
WHEREAS, State law requires at least two of these services to be competitively bid; and
WHEREAS, FSW is agreeable to both the merger and the competitive bid requirements;
and
WHEREAS, on November 16, 2010, the Audit/Finance Committee unanimously
recommended approval of combining the three above-mentioned agreements into one agreement;
NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The recitations in the preamble are true and correct and are incorporated
herewith as part of this Ordinance.
SECTION 2. The City Manager is hereby authorized to execute a professional services
agreement between the City of Denton and FSW, which is attached hereto and incorporated
herein by reference.
SECTION 3. The expenditure of funds as provided in the attached professional services
agreement is hereby authorized, and the previous expenditures regarding the above-mentioned
agreements are ratified and approved.
SECTION 5. This Ordinance shall become effective immediately upon its passage and
approval.
sAlegal\our documents\ordinances\10\first southwest company.doe
PASSED AND APPROVED this the day of , 2010.
MARK A. UG MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY.
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY:
2
PROFESSIONAL SERVICES AGREEMENT
FOR FINANCIAL ADVISORY, ARBITRAGE REBATE AND CONTINUING
DISCLOSURE SERVICES
STATE OF TEXAS
COUNTY OF DENTON §
THI AGREEMENT is made and entered into as of the day of
2010, by and between the City of Denton, Texas, a Texas municipal
corporation, with its principal office at 215 East McKinney Street, Denton, Denton County,
Texas 76201, hereinafter called "OWNER" and First Southwest Company, with an office at 777
Main Street, Suite 1200, Fort Worth, Texas 76102, hereinafter called "CONSULTANT," and
CONSULTANT's affiliate, First Southwest Asset Management, Inc., with its corporate office at
325 North St. Paul Street, Suite 800, Dallas, Texas 75201, hereinafter called CTSAM' acting
herein, by and through their duly authorized representatives.
WITNESSETH, that in consideration of the covenants and agreements herein contained,
the parties hereto do mutually agree as follows:
ARTICLE I
EMPLOYMENT OF CONSULTANT
The OWNER hereby contracts with the CONSULTANT and FSAM, as independent
contractors, and the CONSULTANT and FSAM hereby agree to perform the services herein in
connection with the Projects as stated in the sections to follow, with diligence and in accordance
with the highest professional standards customarily obtained for such services in the State of
Texas. The professional services set out herein are in connection with the following described
projects:
The Projects shall include, without limitation, the provision of financial advisory and
continuing disclosure services to be performed by the Consultant and the provision of arbitrage
rebate services to be performed by FSAM.
ARTICLE II
SCOPE OF SERVICES
The CONSULTANT and FSAM shall perform the following services in a professional
manner:
A. CONSULTANT shall perform all those services set forth in the Financial Advisory
Agreement attached hereto as Attachment A, which shall be attached to this Agreement
and made a part hereof for all purposes as separate agreements.
B. CONSULTANT shall perform all those services set forth in the Continuing Disclosure
Services Agreement attached hereto as Attachment B, which shall be attached to this
Agreement and made a part hereof for all purposes as separate agreements.
C. FSAM shall perform all those services set forth in the Arbitrage Rebate Services
Agreement attached hereto as Attachments C & D, which shall be attached to this
Agreement and made a part hereof for all purposes as separate agreements.
D. If there is any conflict between the terms of this Agreement and the attached attachments
to this Agreement, the terms and conditions of this Agreement will control over the terms
and conditions of the attached attachments.
ARTICLE III
ADDITIONAL SERVICES
Additional services to be performed by the CONSULTANT and FSAM, if authorized by
the OWNER, which are not included in the above-described Scope of Services, are described as
follows: (list all additional services that may be required for the project)
Not applicable.
ARTICLE IV
PERIOD OF SERVICE
This Agreement shall become effective upon execution of this Agreement by the
OWNER and the CONSULTANT and FSAM and upon issue of a notice to proceed by the
OWNER, and shall remain in force during the term of the respective agreements attached hereto
and any required extensions approved by the OWNER. This Agreement may be sooner
terminated in accordance with the provisions in Article XII and the respective agreements may
be terminated pursuant to each such agreement's terms. Time is of the essence in this
Agreement. The CONSULTANT and FSAM shall make all reasonable efforts to complete the
services set forth herein as expeditiously as possible and to meet the schedule established by the
OWNER, acting through its City Manager or his designee.
ARTICLE V
COMPENSATION
A. COMPENSATION TERMS:
"Subcontract Expense" is defined as expenses incurred by the CONSULTANT in
employment of others in outside firms for services in the nature of financial
advisory, arbitrage rebate and continuing disclosure.
2. "Direct Non-Labor Expense" is defined as that expense for any assignment
incurred by the CONSULTANT for supplies, transportation and equipment,
Page 2
travel, communications, subsistence, and lodging away from home, and similar
incidental expenses in connection with that assignment.
B. BILLING AND PAYMENT: For and in consideration of the professional services to be
performed by the CONSULTANT and FSAM herein, the OWNER agrees to pay, based
on the terms of the agreements attached hereto.
Partial payments to the CONSULTANT and FSAM will be made on the basis of detailed
monthly statements rendered to and approved by the OWNER through its City Manager
or his designee; however, under no circumstances shall any monthly statement for
services exceed the value of the work performed at the time a statement is rendered. The
OWNER may withhold the final five percent (5%) of the contract amount until
completion of the Projects.
Nothing contained in this Article shall require the OWNER to pay for any work which is
unsatisfactory, as reasonably determined by the City Manager or his designee, or which is
not submitted in compliance with the terms of this Agreement. The OWNER shall not be
required to make any payments to the CONSULTANT or FSAM when the
CONSULTANT or FSAM, respectively, is in default under this Agreement.
It is specifically understood and agreed that the CONSULTANT and/or FSAM shall not
be authorized to undertake any work pursuant to this Agreement which would require
additional payments by the OWNER for any charge, expense, or reimbursement above
the maximum not to exceed fee as stated, without first having obtained written
authorization from the OWNER. The CONSULTANT and FSAM shall not proceed to
perform the services listed in Article III "Additional Services," without obtaining prior
written authorization from the OWNER.
C. ADDITIONAL SERVICES: For additional services authorized in writing by the
OWNER in Article III, -the CONSULTANT and/or FSAM shall be paid pursuant to the
attached agreements. Payments for additional services shall be due and payable upon
submission by the CONSULTANT and/or FSAM, and shall be in accordance with
subsection B hereof. Statements shall not be submitted more frequently than monthly.
D. PAYMENT: If the OWNER fails to make undisputed payments due the CONSULTANT
and/or FSAM for services and expenses within thirty (30) days after receipt of the
CONSULTANT's and/or FSAM's undisputed statement thereof, prompt payment act
interest as set forth in Chapter 2251 of the Texas Government Code shall be paid on the
amounts due the CONSULTANT and/or FSAM. In addition, the CONSULTANT and/or
FSAM may, if payment is not received by the thirty-first (31St) day after receipt of
statement, after giving ten (10) days' written notice to the OWNER, suspend services
under this Agreement until the CONSULTANT and/or FSAM has been paid in full all
amounts due for services, expenses, and charges, provided, however, nothing herein shall
require the OWNER to pay prompt payment act interest if the OWNER has a bona fide
dispute with the CONSULTANT and/or FSAM concerning the payment or if the
Page 3
OWNER reasonably determines that the work is unsatisfactory, in accordance with this
Article V, "Compensation."
ARTICLE VI
OBSERVATION AND REVIEW OF THE WORK
The CONSULTANT and FSAM will exercise reasonable care and due diligence in
discovering and promptly reporting to the OWNER any defects or deficiencies in the work of the
CONSULTANT or FSAM or any subcontractors or subconsultants.
ARTICLE VII
OWNERSHIP OF DOCUMENTS
All documents prepared or furnished by the CONSULTANT and FSAM pursuant to this
Agreement are instruments of service, and shall become the property of the OWNER upon the
termination of this Agreement. The CONSULTANT and FSAM are entitled to retain copies of
all such documents. The documents prepared and furnished by the CONSULTANT and FSAM
are intended only to be applicable to this Project, and OWNER's use of these documents in other
projects shall be at OWNER's sole risk and expense. In the event the OWNER uses any of the
information or materials developed pursuant to this Agreement in another project or for other
purposes than specified herein, CONSULTANT and FSAM are released from any and all
liability relating to their use in that project.
ARTICLE VIII
INDEPENDENT CONTRACTOR
CONSULTANT and FSAM shall provide services to OWNER as independent
contractors, not as employees of the OWNER. CONSULTANT and FSAM shall not have or
claim any right arising from employee status.
ARTICLE IX
INDEMNITY AGREEMENT
The CONSULTANT and FSAM shall indemnify and save and hold harmless the
OWNER and its officers, agents, and employees from and against any and all liability, claims,
demands, damages, losses, and expenses, including, but not limited to court costs and reasonable
attorney fees incurred by the OWNER, and including, without limitation, damages for bodily and
personal injury, death and property damage, resulting from the negligent acts or omissions of the
CONSULTANT or FSAM or its officers, shareholders, agents, or employees in the execution,
operation, or performance of this Agreement.
Nothing in this Agreement shall be construed to create a liability to any person who is not
a party to this Agreement, and nothing herein shall waive any of the parties' defenses, both at
law or equity, to any claim, cause of action, or litigation filed by anyone not a party to this
Agreement, including the defense of governmental immunity, which defenses are hereby
expressly reserved.
Page 4
ARTICLE X
INSURANCE
During the performance of the services under this Agreement, CONSULTANT and
FSAM shall maintain the following insurance with an insurance company licensed to do business
in the State of Texas by the State Insurance Commission or any successor agency that has a
rating with Best Rate Carriers of at least an A- or above:
A. Comprehensive General Liability Insurance with bodily injury limits of not less than
$500,000 for each occurrence and not less than $500,000 in the aggregate, and with
property damage limits of not less than $100,000 for each occurrence and not less than
$100,000 in the aggregate.
B. Automobile Liability Insurance with bodily injury limits of not less than $500,000 for
each person and not less than $500,000 for each accident, and with property damage
limits of not less than $100,000 for each accident.
C. Worker's Compensation Insurance in accordance with statutory requirements, and
Employers' Liability Insurance with limits of not less than $100,000 for each accident.
D. Professional Liability Insurance with limits of not less than $1,000,000 annual aggregate.
E. The CONSULTANT and FSAM shall furnish insurance certificates or insurance policies
at the OWNER's request to evidence such coverages. The insurance policies shall name
the OWNER as an additional insured on all such policies, and shall contain a provision
that such insurance shall not be canceled or modified without thirty (30) days' prior
written notice to OWNER and CONSULTANT and FSAM. In such event, the
CONSULTANT and FSAM shall, prior to the effective date of the change or
cancellation, serve substitute policies furnishing the same coverage.
ARTICLE XI
ARBITRATION AND ALTERNATE DISPUTE RESOLUTION
The parties may agree to settle any disputes under this Agreement by submitting the
dispute to mediation. No mediation arising out of or relating to this Agreement may proceed
without the agreement of both parties to submit the dispute to mediation. The location for the
mediation shall be the City of Denton, Denton County, Texas unless a different location is
agreed to by the parties.
ARTICLE XII
TERMINATION OF AGREEMENT
A. Notwithstanding any other provision of this Agreement, either party may terminate by
giving thirty (30) days' advance written notice to the other party.
Page 5
B. This Agreement may be terminated in whole or in part in the event of either party
substantially failing to fulfill its obligations under this Agreement. No such termination
will be affected unless the other party is given (1) written notice (delivered by certified
mail, return receipt requested) of intent to terminate and setting forth the reasons
specifying the non-performance, and not less than thirty (30) calendar days to cure the
failure; and (2) an opportunity for consultation with the terminating party prior to
termination.
C. if the Agreement is terminated prior to completion of the services to be provided
hereunder, CONSULTANT and/or FSAM shall immediately cease all services and shall
render a final bill for services to the OWNER within thirty (30) days after the date of
termination. The OWNER shall pay CONSULTANT and FSAM for all services
properly rendered and satisfactorily performed and for reimbursable expenses to
termination incurred prior to the date of termination, in accordance with Article V
"Compensation." Should the OWNER subsequently contract with a new consultant for
the continuation of services on the Project,. CONSULTANT and/or FSAM shall
cooperate in providing information. The CONSULTANT and FSAM shall turn over all
documents prepared or furnished by CONSULTANT and FSAM pursuant to this
Agreement to the OWNER on or before the date of termination, but may maintain copies
of such documents for its use.
ARTICLE XIII
RESPONSIBILITY FOR CLAIMS AND LIABILITIES
Approval by the OWNER shall not constitute, nor be deemed a release of the
responsibility and liability of the CONSULTANT or FSAM, its employees, associates, agents,
subcontractors, and subconsultants for the accuracy and competency of their designs or other
work; nor shall such approval be deemed to be an assumption of such responsibility by the
OWNER for any defect in the design or other work prepared by the CONSULTANT or FSAM
its employees, subcontractors, agents, and consultants. CONSULTANT and FSAM retain,
design responsibility and liability at all times during this Agreement and after completion of this
Agreement.
ARTICLE XIV
NOTICES
All notices, communications, and reports required or permitted under this Agreement
shall be personally delivered or mailed to the respective parties by depositing same in the United
States mail to the address shown below, certified mail, return receipt requested, unless otherwise
specified herein. Mailed notices shall be deemed communicated as of three (3) days' mailing:
Page 6
To CONSULTANT:
First Southwest Company
David Medanich, Vice Chairman
777 Main Street, Suite 1200
Fort Worth, Texas 76102
To FSAM
First Southwest Asset Management, Inc.
Shelley Weiske, Senior Vice President
325 North St. Paul Street, Suite 800
Dallas, Texas 75201
To OWNER:
City of Denton
George C. Campbell, City Manager
215 East McKinney
Denton, Texas 76201
All notices shall be deemed effective upon receipt by the party to whom such notice is
given, or within three (3) days' mailing.
ARTICLE XV
ENTIRE AGREEMENT
This Agreement, consisting of twenty (20) pages and four (4) exhibits, constitutes the
complete and final expression of the agreement of the parties, and is intended as a complete and
exclusive statement of the terms of their agreements, and supersedes all prior contemporaneous
offers, promises, representations, negotiations, discussions, communications, and agreements
which may have been made in connection with the subject matter hereof.
ARTICLE XVI
SEVERABILITY
If any provision of this Agreement is found or deemed by a court of competent
jurisdiction to be invalid or unenforceable, it shall be considered severable from the remainder of
this Agreement and shall not cause the remainder to be invalid or unenforceable. In such event,
the parties shall reform this Agreement to replace such stricken provision with a valid and
enforceable provision which comes as close as possible to expressing the intention of the stricken
provision.
ARTICLE XVII
COMPLIANCE WITH LAWS
The CONSULTANT and FSAM shall comply with all federal, state, and local laws,
rules, regulations, and ordinances applicable to the work covered hereunder as they may now
read or hereinafter be amended.
Page 7
ARTICLE XVIII
DISCRIMINATION PROHIBITED
In performing the services required hereunder, the CONSULTANT and FSAM shall not
discriminate against any person on the basis of race, color, religion, sex, national origin or
ancestry, age, or physical handicap.
ARTICLE XIX
PERSONNEL
A. The CONSULTANT and FSAM represent that they have or will secure, at their own
expense, all personnel required to perform all the services required under this Agreement.
Such personnel shall not be employees or officers of, or have any contractual relations
with the OWNER. CONSULTANT and FSAM shall inform the OWNER of any conflict
of interest or potential conflict of interest that may arise during the term of this
Agreement.
B. All services required hereunder will be performed by the CONSULTANT and/or FSAM.
All personnel engaged in work shall be qualified, and shall be authorized and permitted
under state and local laws to perform such services.
C. In those instances deemed necessary by the OWNER, the CONSULTANT and/or FSAM
and/or their employees shall be required to submit to background checks.
ARTICLE XX
ASSIGNABILITY
The CONSULTANT or FSAM shall not assign any of its scope of work under in this
Agreement, and shall not transfer any of its scope of work under this Agreement (whether by
assignment, novation, or otherwise) without the prior written consent of the OWNER. Should
the CONSULTANT or FSAM assign any part of the monies due under this Agreement,
CONSULTANT or FSAM is required to provide written notice of the same to OWNER. Any
assignment of monies due under this Agreement shall not change any of the terms or conditions
of this Agreement to include but not limited to the terms and conditions for payment under this
Agreement.
ARTICLE XXI
MODIFICATION
No waiver or modification of this Agreement or of any covenant, condition, or limitation
herein contained shall be valid unless. in writing and duly executed by the parry to be charged
therewith, and no evidence of any waiver or modification shall be offered or received in evidence
in any proceeding arising between the parties hereto out of or affecting this Agreement, or the
rights or obligations of the parties hereunder, and unless such waiver or modification is in
Page 8
writing and duly executed; and the parties further agree that the provisions of this section will not
be waived unless as set forth herein.
ARTICLE XXII
NUSCELLANEOUS
A. The following exhibits are attached to and made a part of this Agreement: Exhibit A,
Financial Advisory Agreement; Exhibit B, Continuing Disclosure Services Agreement
and Exhibit C, Arbitrage Rebate Services Agreement.
B. CONSULTANT and FSAM agree that OWNER shall, until the expiration of five (5)
years after the final payment or after final completion of all work required under this
Agreement, whichever is longer, have access to and the right to examine any directly
pertinent books, documents, papers, correspondence, to include e-mails, and records of
the CONSULTANT and/or FSAM involving transactions relating to this Agreement.
CONSULTANT and FSAM are required to maintain and make available all electronic
records associated with this Agreement for purposes of examination. CONSULTANT
and FSAM agree that OWNER shall have access during normal working hours to all
necessary CONSULTANT and FSAM facilities and shall be provided adequate and
appropriate working space in order to conduct audits in compliance with this section.
OWNER shall give CONSULTANT and FSAM reasonable advance notice of intended
audits. This paragraph shall work in conjunction with the Audit provision set forth in
Article XXIII.
C. Venue of any suit or cause of action under this Agreement shall lie exclusively in Denton
County, Texas. This Agreement shall be construed in accordance with the laws of the
State of Texas.
D. For the purpose of this Agreement, the key persons who will perform most of the work
hereunder shall be David Medanich and Shelley Weiske. However, nothing herein shall
limit CONSULTANT and FSAM from using other qualified and competent members of
its firm to perform the services required herein. CONSULTANT and FSAM understand
that OWNER is to be informed of the removal or loss of any of the key persons working
under this Agreement. CONSULTANT and FSAM also agree to provide the OWNER
with notice of the name(s) of who it intends to replace the key person. OWNER shall
have a right to reject any replacement key person(s) and CONSULTANT and FSAM
agree to name a replacement key person(s) acceptable to the OWNER.
E. CONSULTANT and FSAM shall commence, carry on, and complete any and all projects
with all applicable dispatch, in a sound, economical, and efficient manner and in
accordance with the provisions hereof. In accomplishing the projects, CONSULTANT
and FSAM shall take such steps as are appropriate to ensure that the work involved is
properly coordinated with related work being carried on by the OWNER.
F. The OWNER shall assist the CONSULTANT and FSAM by placing at the
CONSULTANT's and FSAM's disposal all available information pertinent to the
Page 9
Projects, including previous reports, any other data relative to the Projects, and arranging
for the access thereto, and make all provisions for the CONSULTANT and FSAM to
enter in or upon public and private property as required for the CONSULTANT and
FSAM to perform services under this Agreement.
G. The captions of this Agreement are for informational purposes only, and shall not in any
way affect the substantive terms or conditions of this Agreement.
ARTICLE XXIII
RIGHT TO AUDIT
The OWNER shall have the right to audit and make copies of the books, records and
computations pertaining to this agreement. The CONSULTANT and FSAM shall retain such
books, records, documents and other evidence pertaining to this Agreement during the contract
period and five years thereafter, except if an audit is in progress or audit fmdings are yet
unresolved, in which case records shall be kept until all audit tasks are completed and resolved.
These books, records, documents and other evidence shall be available, within 10 business days
of written request. Further, the CONSULTANT and FSAM shall also require all Subcontractors,
material suppliers, and other payees to retain all books, records, documents and other evidence
pertaining to this agreement, and to allow the OWNER similar access to those documents. All
books and records will be made available within a 50 mile radius of the City of Denton. The cost
of the audit will be borne by the OWNER unless the audit reveals an overpayment of 1% or
greater. If an overpayment of 1% or greater occurs, the reasonable cost of the audit, including
any travel costs, must be borne by the CONSULTANT and/or FSAM, which must be payable
within five business days of receipt of an invoice.
Failure to comply with the provisions of this section shall be a material breach of this contract
and shall constitute, in the OWNER'S sole discretion, grounds for termination thereof. Each of
the terms "books" "records" "documents" and "other evidence" as used above shall be
construed to include drafts and electronic files, even if such drafts or electronic files are
subsequently used to generate or prepare a final printed document.
Page 10
IN WITNESS HEREOF, the City of Denton, Texas has caused this Agreement to be
executed by its duly authorized City Manager, and CONSULTANT and FSAM have, executed
this greeme t through their duly authorized undersigned officer on this the 71~ day of
, 2010.
CITY OF DENTON, TEXAS
GEOR E C. CAMPBELL, CITY MANAGER
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APP OVED
S TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY: L,%
i
L V-,Q c ,
WITNESS:
CONSULTANT
BY:
ill A. Feinberg
Chairman and Chief Executive Of r
FSAM e'44~
BY:
Hill A. Feinberg
Chairman and Chief Executive O ce
BY:
CITY OF DENTON
INSURANCE REQUIREMENTS FOR
CONSULTANTS/CONTRACTORS
The Offeror'sBidder's attention is directed to the insurance requirements below. It is highly
recommended that offerors/bidders confer with their respective insurance carriers or brokers
to determine in advance of its proposal or bid submission the availability of insurance
certificates and endorsements as prescribed and provided herein. If an offeror/apparent low
bidder fails to comply strictly with the insurance requirements, that offeror/bidder may be
disqualified from award of the contract. Upon award, all insurance requirements shall
become contractual obligations, which the successful offeror/bidder shall have a duty to
maintain throughout the course of this contract.
STANDARD PROVISIONS:
Without limiting any of the other obligations or liabilities of the Consultant/Contractor, the
Consultant/Contractor shall provide and maintain until the contracted work has been completed
and accepted by the City of Denton, Owner, the minimum insurance coverage as indicated
hereinafter.
As soon as practicable after notification of award, Consultant/Contractor shall file with the
Purchasing Department satisfactory certificates of insurance, containing the proposal/bid
number and title of the project. Consultant/Contractor may, upon written request to the
Purchasing Department, ask for clarification of any insurance requirements at any time;
however, Consultants/Contractors are strongly advised to make such requests prior to
proposal/bid opening, since the insurance requirements may not be modified or waived after
proposal/bid opening unless a written exception has been submitted with the proposal/bid.
Consultant/Contractor shall not commence any work or deliver any material until he or she
receives notification that the contract has been accepted, approved, and signed by the City of
Denton.
All insurance policies proposed or obtained in satisfaction of these requirements shall comply
with the following general specifications, and shall be maintained in compliance with these
general specifications throughout the duration of the Contract, or longer, if so noted:
Each policy shall be issued by a company authorized to do business in the State of
Texas with an A.M. Best Company rating of at least A.
• Any deductibles or self-insured retentions shall be declared in the proposal or bid. If
requested by the City, the insurer shall reduce or eliminate such deductibles or
self-insured retentions with respect to the City, its officials, agents, employees and
volunteers; or, the Consultant/Contractor shall procure a bond guaranteeing payment of
losses and related investigations, claim administration and defense expenses.
• Liability policies shall be endorsed to provide the following:
• Name as additional insured the City of Denton, its Officials, Agents,
Employees and volunteers.
• That such insurance is primary to any other insurance available to the
additional insured with respect to claims covered under the policy and that this
insurance applies separately to each insured against whom claim is made or
suit is brought. The inclusion of more than one insured shall not operate to
increase the insurer's limit of liability.
• Cancellation: City requires 30 day written notice should any of the policies
described on the certificate be cancelled or materially changed before the
expiration date.
• Should any of the required insurance be provided under a claims-made form,
Consultant/Contractor shall maintain such coverage continuously throughout
the term of this contract and, without lapse, for a period of three years beyond
the contract expiration, such that occurrences arising during the contract term
which give rise to claims made after expiration of the contract shall be covered.
• Should any of the required insurance be provided under a form of coverage that
includes a general annual aggregate limit providing for claims investigation or
legal defense costs to be included in the general annual aggregate limit, the
Consultant/Contractor shall either double the occurrence limits or obtain
Owners and Contractors Protective Liability Insurance.
• Should any required insurance lapse during the contract term, requests for
payments originating after such lapse shall not be processed until the City
receives satisfactory evidence of reinstated coverage as required by this
contract, effective as of the lapse date. If insurance is not reinstated, City may,
at its sole option, terminate this agreement effective on the date of the lapse.
SPECIFIC ADDITIONAL INSURANCE REQUIREMENTS:
All insurance policies proposed or obtained in satisfaction of this Contract shall additionally
comply with the following marked specifications, and shall be maintained in compliance with
these additional specifications throughout the duration of the Contract, or longer, if so noted:
[X] A. General Liability Insurance:
General Liability insurance with combined single limits of not less than $500,000.00
shall be provided and maintained by the Contractor. The policy shall be written on
an occurrence basis either in a single policy or in a combination of underlying and
umbrella or excess policies.
If the Commercial General Liability form (ISO Form CG 0001 current edition) is
used:
Page 13
Coverage A shall include premises, operations, products, and completed
operations, independent contractors, contractual liability covering this
contract and broad form property damage coverage.
Coverage B shall include personal injury.
Coverage C, medical payments, is not required.
If the Comprehensive General Liability form (ISO Form GL 0002 Current Edition
and ISO Form GL 0404) is used, it shall include at least:
• Bodily injury and Property Damage Liability for premises, operations,
products and completed operations, independent contractors and property
damage resulting from explosion, collapse or underground (XCU)
exposures.
Broad form contractual liability (preferably by endorsement) covering this
contract, personal injury liability and broad form property damage liability.
[X] Automobile Liability Insurance:
Contractor shall provide Commercial Automobile Liability insurance with Combined
Single Limits (CSL) of not less than $500,000.00 either in a single policy or in a
combination of basic and umbrella or excess policies. The policy will include bodily
injury and property damage liability arising out of the operation, maintenance and use of
all automobiles and mobile equipment used in conjunction with this contract.
Satisfaction of the above requirement shall be in the form of a policy endorsement for:
any auto, or
all owned, hired and non-owned autos.
[X] Workers Compensation Insurance
Contractor shall purchase and maintain Worker's Compensation insurance which, in
addition to meeting the minimum statutory requirements for issuance of such insurance,
has Employer's Liability limits of at least $100,000 for each accident, $100,000 per each
employee, and a $500,000 policy limit for occupational disease. The City need not be
named as an "Additional Insured" but the insurer shall agree to waive all rights of
subrogation against the City, its officials, agents, employees and volunteers for any work
performed for the City by the Named Insured. For building or construction projects, the
Contractor shall comply with the provisions of Attachment 1 in accordance with
§406.096 of the Texas Labor Code and rule 28TAC 110.110 of the Texas Worker's
Compensation Commission (TWCC).
Owner's and Contractor's Protective Liability Insurance
Page 14
The Contractor shall obtain, pay for and maintain at all times during the prosecution of
the work under this contract, an Owner's and Contractor's Protective Liability insurance
policy naming the City as insured for property damage and bodily injury which may arise
in the prosecution of the work or Contractor's operations under this contract. Coverage
shall be on an "occurrence" basis, and the policy shall be issued by the same insurance
company that carries the Contractor's liability insurance. Policy limits will be at least
combined bodily injury and property damage per occurrence with a aggregate.
] Fire Damage Legal Liability Insurance
Coverage is required if Broad form General Liability is not provided or is unavailable to
the contractor or if a contractor leases or rents a portion of a City building. Limits of not
less than each occurrence are required.
[X] Professional Liability Insurance
Professional liability insurance with limits not less than $1,000,000.00 per claim with
respect to negligent acts, errors or omissions in connection with professional services is
required under this Agreement.
Builders' Risk Insurance
Builders' Risk Insurance, on an All-Risk form for 100% of the completed value shall be
provided. Such policy shall include as "Named Insured" the City of Denton and all
subcontractors as their interests may appear.
" Commercial Crime
Provides coverage for the theft or disappearance of cash or checks, robbery inside/outside
the premises, burglary of the premises, and employee fidelity. The employee fidelity
portion of this coverage should be written on a "blanket" basis to cover all employees,
including new hires. This type insurance should be required if the contractor has access
to City funds. Limits of not less than each occurrence are required.
Additional Insurance
Other insurance may be required on an individual basis for extra hazardous contracts and
specific service agreements. If such additional insurance is required for a specific
contract, that requirement will be described in the "Specific Conditions" of the contract
specifications.
Page 15
ATTACHMENT 1
Worker's Compensation Coverage for Building or Construction Projects for
Governmental Entities
A. Definitions:
Certificate of coverage ("certificate") -A copy of a certificate of insurance, a
certificate of authority to self-insure issued by the commission, or a coverage
agreement (TWCC-81, TWCC-82, TWCC-83, or TWCC-84), showing statutory
workers' compensation insurance coverage for the person's or entity's employees
providing services on a project, for the duration of the project.
Duration of the project - includes the time from the beginning of the work on the
project until the contractor's/person's work on the project has been completed and
accepted by the governmental entity.
Persons providing services on the project ("subcontractor" in §406.096) - includes all
persons or entities performing all or part of the services the contractor has
undertaken to perform on the project, regardless of whether that person contracted
directly with the contractor and regardless of whether that person has employees.
This includes, without limitation, independent contractors, subcontractors, leasing
companies, motor carriers, owner-operators, employees of any such entity, or
employees of any entity which furnishes persons to provide services on the project.
"Services" include, without limitation, providing, hauling, or delivering equipment or
materials, or providing labor, transportation, or other service related to a project.
"Services" does not include activities unrelated to the project, such as food/beverage
vendors, office supply deliveries, and delivery of portable toilets.
B. The contractor shall provide coverage, based on proper reporting of classification
codes and payroll amounts and filing of any overage agreements, which meets the
statutory requirements of Texas Labor Code, Section 401.011(44) for all employees
of the Contractor providing services on the project, for the duration of the project.
C. The Contractor must provide a certificate of coverage to the governmental entity prior
to being awarded the contract.
D. If the coverage period shown on the contractor's current certificate of coverage ends
during the duration of the project, the contractor must, prior to the end of the
coverage period, file a new certificate of coverage with the governmental entity
showing that coverage has been extended.
E. The contractor shall obtain from each person providing services on a project, and
provide to the governmental entity:
1) a certificate of coverage, prior to that person beginning work on the project, so the
governmental entity will have on file certificates of coverage showing coverage
for all persons providing services on the project; and
Page 16
2) no later than seven days after receipt by the contractor, a new certificate of
coverage showing extension of coverage, if the coverage period shown on the
current certificate of coverage ends during the duration of the project.
F. The contractor shall retain all required certificates of coverage for the duration of the
project and for one year thereafter.
G. The contractor shall notify the governmental entity in writing by certified mail or
personal delivery, within 10 days after the contractor knew or should have known, of
any change that materially affects the provision of coverage of any person providing
services on the project.
H. The contractor shall post on each project site a notice, in the text, form and manner
prescribed by the Texas Workers' Compensation Commission, informing all persons
providing services on the project that they are required to be covered, and stating how
a person may verify coverage and report lack of coverage.
I. The contractor shall contractually require each person with whom it contracts to
provide services on a project, to:
1) provide coverage, based on proper reporting of classification codes and payroll
amounts and filing of any coverage agreements, which meets the statutory
requirements of Texas Labor Code, Section 401.011(44) for all of its employees
providing services on the project, for the duration of the project;
2) provide to the contractor, prior to that person beginning work on the project, a
certificate of coverage showing that coverage is being provided for all employees
of the person providing services on the project, for the duration of the project;
3) provide the contractor, prior to the end of the coverage period, a new certificate of
coverage showing extension of coverage, if the coverage period shown on the
current certificate of coverage ends during the duration of the project;
4) obtain from each other person with whom it contracts, and provide to the
contractor:
a) certificate of coverage, prior to the other person beginning work on the
project; and
b) a new certificate of coverage showing extension of coverage, prior to the
end of the coverage period, if the coverage period shown on the current
certificate of coverage ends during the duration of the project;
5) retain all required certificates of coverage on file for the duration of the project
and for one year thereafter;
6) notify the governmental entity in writing by certified mail or personal delivery,
within 10 days after the person knew or should have known, of any change that
materially affects the provision of coverage of any person providing services on
the project; and
Page 17
7) contractually require each person with whom it contracts, to perform as required
by paragraphs (1) - (7), with the certificates of coverage to be provided to the
person for whom they are providing services.
J. By signing this contract or providing or causing to be provided a certificate of
coverage, the contractor is representing to the governmental entity that all employees
of the contractor who will provide services on the project will be covered by workers'
compensation coverage for the duration of the project, that the coverage will be based
on proper reporting of classification codes and payroll amounts, and that all coverage
agreements will be filed with the appropriate insurance carrier or, in the case of a self-
insured, with the commission's Division of Self-Insurance Regulation. Providing
false or misleading information may subject the contractor to administrative penalties,
criminal penalties, civil penalties, or other civil actions.
K. The contractor's failure to comply with any of these provisions is a breach of contract
by the contractor which entitles the governmental entity to declare the contract void if
the contractor does not remedy the breach within ten days after receipt of notice of
breach from the governmental entity.
Page 18
CONFLICT OF INTEREST QUESTIONNAIRE FORM CIO
For vendor or other person doing business with local governmental entity
This questionnaire reflects changes made to the law by H.B. 1491, 80th Leg., Regular Session.
OFFICE USE ONLY
This questionnaire is being filed in accordance with chapter 176 of the Local Government Code by a
Date Received
person who has a business relationship as defined by Section 176.001(1-a) with a local
governmental entity and the person meets requirements under Section 176.006(a).
By law this questionnaire must be filed with the records administrator of the local government entity
not later than the 7th business day after the date the person becomes aware of facts that require the
statement to be filed. See Section 176.006, Local Government Code.
A person commits an offense if the person knowingly violates Section 176.006, Local Government
Code. An offense under this section is a Class C misdemeanor.
Name of person who has a business relationship with local governmental entity.
First Southwest Company
2
❑ Check this box if you are filing an update to a previously filed questionnaire.
(The law requires that you file an updated completed questionnaire with the appropriate filing authority not later than the 7th business
day after the date the originally filed questionnaire becomes incomplete or inaccurate.)
3
Name of local government officer with whom filer has an employment or business relationship.
Not applicable
Name of Officer
This section, (item 3 including subparts A, B, C & D), must be completed for each officer with whom the filer has an employment or other business
relationship as defined by Section 176.001(1-a), Local Government Code. Attach additional pages to this Form CIQ as necessary.
A. Is the local government officer named in this section receiving or likely to receive taxable income, other than investment income, from the
filer of the questionnaire?
0
0 N
o
Yes
B. Is the filer of the questionnaire receiving or likely to receive taxable income, other than investment income, from or at the direction of the
local government officer named in this section AND the taxable income is not received from the local governmental entity?
0 Yes 0 No
C. Is the filer of this questionnaire employed by a corporation or other business entity with respect to which the local government officer
serves as an officer or director, or holds an ownership of 10 percent or more?
0
0 N
o
Yes
D. Describe each affiliation or business relationship.
4
First So thw st Co y
Bv-
Signature of person Zing business with the governme a en ity Date
Adopted 06/2912007
CONFLICT OF INTEREST QUESTIONNAIRE FORM CIO
For vendor or other person doing business with local governmental entity
This questionnaire reflects changes made to the law by H.B. 1491, 80th Leg., Regular Session.
OFFICE USE ONLY
This questionnaire is being filed in accordance with chapter 176 of the Local Government Code by a
Date Received
person who has a business relationship as defined by Section 176.001(1-a) with a local
governmental entity and the person meets requirements under Section 176.006(a).
By law this questionnaire must be filed with the records administrator of the local government entity
not later than the 7th business day after the date the person becomes aware of facts that require the
statement to be filed. See Section 176.006, Local Government Code.
A person commits an offense if the person knowingly violates Section 176.006, Local Government
Code. An offense under this section is a Class C misdemeanor.
Name of person who has a business relationship with local governmental entity.
First Southwest Asset Management, Inc.
2
❑ Check this box if you are filing an update to a previously filed questionnaire.
(The law requires that you file an updated completed questionnaire with the appropriate filing authority not later than the 7th business
day after the date the originally filed questionnaire becomes incomplete or inaccurate.)
3
Name of local government officer with whom filer has an employment or business relationship.
Not applicable
Name of Officer
This section, (item 3 including subparts A, B, C & D), must be completed for each officer with whom the filer has an employment or other business
relationship as defined by Section 176.001(1-a), Local Government Code. Attach additional pages to this Form CIQ as necessary.
D. Is the local government officer named in this section receiving or likely to receive taxable income, other than investment income, from the
filer of the questionnaire?
0 N
o
Yes
E. Is the filer of the questionnaire receiving or likely to receive taxable income, other than investment income, from or at the direction of the
local government officer named in this section AND the taxable income is not received from the local governmental entity?
0 Yes 0 No
F. Is the filer of this questionnaire employed by a corporation or other business entity with respect to which the local government officer
serves as an officer or director, or holds an ownership of 10 percent or more?
0
0 N
o
Yes
D. Describe each affiliation or business relationship.
4
First Sout w s et anagement, Inc.
B : (ice-`' I~- ZOO/O
Signature of person doing business with the governmental entity Date
Adopted 0612912007
Page 20
Attachment A
FINANCIAL ADVISORY AGREEMENT
This Financial Advisory Agreement (the "Agreement") is made and entered into by and between City of
Denton, Texas ("Issuer") and First Southwest Company ("FSC") effective as ofthe date executed bythe Issuer
as set forth on the signature page hereof.
VaTNESSETH:
Va=AS, the Issuer will have under consideration from time to time the authorization and issuance
of indebtedness in amounts and forms which cannot presently be determined and, in connection with the
authorization, sale, issuance and delivery of such indebtedness, Issuer desires to retain an independent
financial advisor; and
WHEREAS, the Issuer desires to obtain the professional services ofFSC to advise the Issuer regarding
the issuance and sale of certain evidences of indebtedness or debt obligations that may be authorized and
issued- or otherwise created or assumed by the Issuer (hereinafter referred to collectively as the "Debt
Instruments") from time to time during the period in which this Agreement shall be effective; and
.WIBREAS, FSC is willing to provide its professional services and its facilities as financial advisor in
connection with all programs of financing as may be considered and authorized by Issuer during the period in
which this Agreement shall be effective.
NOW, THEREFORE, the Issuer and FSC, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, do hereby agree as follows:
SECTION I
DESCRIPTION OF SERVICES
Upon the request of an authorized representative of the Issuer, FSC agrees to perform the financial
advisory services stated in the following provisions of this Section I; and for having rendered such services;
the Issuer agrees to pay to FSC the compensation as provided in Section V hereof.
A. Financial Planning. At the direction of Issuer, FSC shall:
1. - Survey and Analysis. Conduct a survey of the financial resources ofthe Issuer to determine
the extent of its capacity to authorize, issue and service any Debt Instruments contemplated. This
survey will-include an analysis of any existing debt structure as compared with the existing and
projected sources of revenues which may be pledged to secure payment of debt service and,
where appropriate, will include a study of the trend of the assessed valuation, taxing power and
present and future taxing requirements of the Issuer. In the event revenues of existing or
pioj ected facilities operated by the Issuer are to be pledged to repayment of the Debt Instruments
Attachment A
then under consideration, the survey will take into account any outstanding indebtedness payable
from the revenues thereof, additional revenues to be available from any proposed rate increases
and additional revenues, as projected by consulting engineers employed by the Issuer, resulting
from improvements to be financed by the Debt Instruments under consideration.
2. Future Financings. Consider and analyze future financing needs as projectedbythe Issuer's
staff and consulting engineers or. other experts, if any, employed by the Issuer.
3. Recommendations for Debt Instruments. On the basis of the information developed by the
survey described above, and other information and experience available, submit to the Issuer
recommendations regarding the Debt Instruments under consideration, including such elements as
the date of issue, interest payment dates, schedule of principal maturities, options of prior
payment, security provisions, and such other provisions as may be appropriate in order to make
the issue attractive to investors while achievingthe objectives ofthe Issuer. All recommendations
will be consistent with the goal of designing the Debt Instruments to be sold on terms which are
advantageous to the Issuer, including the lowest interest cost consistent with all other
considerations.
4. Market Information. Advise the Issuer of our interpretation of current bond market
conditions, other related forthcoming bond issues and general information, with economic data,
which might normally be expected to influence interest rates or bidding conditions so that the date
of sale of the Debt Instruments may be set at a favorable time.
5. . Elections. In the event it is necessary to hold an election to authorize the Debt Instruments
then under consideration, FSC will assist in coordinating the assembly of such data as may be
required for the preparation of necessary petitions, orders, resolutions, ordinances, notices and
certificates in connection with the election, including assistance in the transmission of such datato
a film of municipal bond attorneys ("Bond Counsel") retained by the Issuer.
B. 'Debt Management and Financial Implementation. At the direction of Issuer, FSC shall:
1. Method of Sale. Evaluate the particular financing being contemplated, giving consideration
to the complexity, market acceptance, rating, size and structure* in order to make a
recommendation as to an appropriate method of sale, and:
2
Attachment A
a. If the Debt Instruments are to be sold by an advertised competitive sale, FSC will:
(1) Supervise the sale of the Debt Instruments, reserving the right, alone or in
conjunction with others, to submit a bid for any Debt instruments issued under this
Agreement which the Issuer advertises for competitive bids; however, in keeping with
the provisions ofRule G-23 of the Municipal Securities Rulemaking Board, FSC will
request and obtain written consent to bid prior to submitting a bid, in any instance
wherein FSC elects to bid, for any installment of such Debt Instruments;
(2) Disseminate information to prospective bidders, organize such informational
meetings, as may be necessary, and facilitate prospective bidders' efforts in making
timely submission of proper bids;
(3) Assist the staff of the Issuer in coordinating the receipt of bids, the safekeeping of
good faith checks and the tabulation and comparison of submitted bids; and
(4) Advise the Issuer regarding the best bid and provide advice regarding acceptance
or rejection of the bids.
b. If the Debt Instruments are to be sold by negotiated sale, FSC will:
(1) Recommend for Issuer's final approval and acceptance one or more investment
banking firms as managers of an underwriting syndicate forthepurpose ofnegotiating
the purchase of the Debt Instruments.
(2) Cooperate with and assist any selected managing underwriter and their counsel in
connection with their efforts to prepare any Official Statement or Offering
Memorandum. FSC will cooperate with and assist the underwriters in the preparation
of a bond purchase contract, an underwriters agreement and other related documents,
The costs incurred in such efforts, including the printing of the documents, will be paid
in accordance with the terms of the Issuer's agreement with the underwriters, but shall
not be or become an obligation of FSC, except to the extent specifically provided
otherwise in this Agreement or assumed in writing by FSC.
(3) Assist the staff of the Issuer in the safekeeping of any good faith checks, to the
extent there are any such, and provide a cost comparison, for both expenses and
interest which are suggested by the underwriters, to the then current market,
(4) Advise the Issuer as to the fairness of the price offered by the underwriters.
Attachment A
2. Offering Documents. Coordinate the preparation of the notice of sale and bidding
instructions, official statement, official bid form and such other documents as may be required
and submit all such documents to the Issuer for examination, approval and certification. After
such examination, approval and certification, FSC shall provide the Issuer with a supply of all
such documents sufficient to its needs and distribute by mail. or, where appropriate, by electronic
delivery, sets of the same to prospective purchasers of the Debt Instruments. Also, FSC shall
provide copies of the final Official Statement to the purchaser of the Debt Instruments in
accordance with the Notice of Sale and Bidding Instructions.
3. Credit Ratings.. Make recommendations to the Issuer as to the advisability of obtaining a
credit rating, or ratings, for the Debt Instruments and, when directed by the Issuer, coordinate the
preparation of such information as may be appropriate for submission to the rating agency, or
agencies. In those cases where the advisability of personal presentation of information to the
rating agency, or agencies, may be indicated, FSC will arrange for such personal presentations,
utilizing such composition of representatives from the Issuer as may be finally approved or
directed by the Issuer.
4. Trustee, Pa ijg Agent, Upon request, counsel with the Issuer in the selection of a
Trustee and/or Paying Agent/Registrar for the Debt Instruments, and assist in the negotiation of
agreements pertinent to these services and the fees incident thereto.
5. Financial Publications. When appropriate, advise financial publications ofthe forthcoming
sale of the Debt Instruments and provide them with all pertinent information.
6. Consultants. After consulting with and receiving directions from the Issuer, arrange for such
reports and opinions of recognized independent consultants as may be appropriate for the
successful marketing of the Debt Instruments.
7. Auditors. In the event formal verification by an independent auditor of any calculations
incident to the Debt Instruments is required, make arrangements for such services.
8. Issuer Meetings. Attend' meetings of the governing body of the Issuer, -its staff,
representatives or commitfees as requested at all times when FSC maybe of assistance or service
and the subject of financing is to be discussed.
9. Printing. To the extent authorized by the Issuer, coordinate all work incident to printing of
the offering documents and the Debt Instruments. * . .
10. Bond Counsel. Maintain liaison with Bond Counsel in -the preparation of all legal
documents pertaining to the authorization, sale and issuande of the Debt Instruments.
4
Attachment A
11, Changes in. Laws. Yrovide to the Issuer copies-of proposed or enacted changes in federal
and state laws, rules and regulations having, or expected to have, a significant effect on the
municipal bond market of which FSC becomes aware in the ordinary course of its business, it
being understood that FSC does not and may not act as an attorney for, or provide legal advice or
services to, the Issuer.
12. Delivery of Debt Instruments. As soon as a bid for the Debt Instruments is accepted by the
Issuer, coordinate the efforts of all concerned to the end that the Debt instruments may be
delivered and paid for as expeditiously as possible and assist the Issuer in the preparation or
verification of final closing figures incident to the delivery of the Debt instruments.
13. Debt Service Schedule, Authorizing Resolution. After the closing ofthe sale and delivery of
the Debt Instruments, deliver to the Issuer a schedule of annual debt service requirements for the
Debt Instruments and, in coordination with Bond Counsel, assure that the paying agent/registrar
and/or trustee has been provided with a copy of the authorizing ordinance, order or resolution.
SECTION H
TERM OF AGREEMENT
This Agreement shall become effective as of the date executed by the Issuer as set forth on the signature
page hereof and, unless terminatedby either party.pursuant to Section IV of this Agreement, shallTemain in
effect thereafter for a period oftwo (2) years from such date. Unless FSC or Issuer shall notify the other party
in writing at least thirty (30) days in advance of the applicable anniversary date that this Agreement wilt not be
renewed, this Agreement will be automatically renewed on the second anniversary of the date hereof for an
additional one (1) year period and thereafter will be automatically renewed on each anniversary date for
successive one (1) year periods for up to 3 years.
SECTIONM
TERMINATION
This Agreement may be terminated with or without cause by the Issuer or FSC upon the giving of at
least thirty (30) days' prior written notice to the other party of its intention to terminate, specifying in such.
notice the effective date of such termination. In the event of such termination, it is understood and agreedthat
only the amounts due FSC for services provided and expenses incurred to the date of termination will be due
and payable. No penalty will be assessed for termination of this Agreement.
Attachment A
SECTION IV
COMPENSATION AND EXPENSE REIMBURSEMENT
The fees due to FSC for the services set forth and described in Section I of this Agreement with respect
to each issuance of Debt Instruments during the term ofthis Agreement shall be calculated in accordance with
the schedule set forth on Appendix A attached hereto. Unless specifically provided otherwise on Appendix A
or in a separate written agreement between Issuer and FSC, such fees, together with any other fees as may
have been mutually agreed upon and all expenses for which FSC is entitled to reimbursement, shall become
due and payable concurrently with the delivery of the Debt Instruments to the purchaser.
SECTION V
MISCELLANEOUS
1. Choice of Law. This Agreement shall be construed and given effect in accordance with the laws of the
State of Texas.
2. Binding Effect, Assignment. This Agreement shall be binding upon and inure to the benefit of the
Issuer andFSC, their respective successors and assigns; providedhowever, neither partyhereto may assign or
transfer any of its rights or obligations hereunder without the prior written consent of the other party.
3. Entire Agreement. This instrument contains the entire agreement between.the parties relating to the
rights herein granted and obligations herein assumed. Any oral or written representations or modifications
concerning this Agreement shall be of no force or effect except for a subsequentmodification in writing signed
by all parties hereto.
FIRST SOUTHWEST COMPANY
C -7-
By. Gi
Hill A. Feinberg, Chairman and
Chief Executive Officer
By:
Laura B. Alexander
Senior Vice President
6
Attachment A
ATTEST:
WMA
retary
CITY OF DENTON, TEXAS
By
Title:George C. Campbell, City Manager
Date:'
APPROVED AS TO FORM:
CITY ATTOFN f .
CITY OF DT , TE
BY:
7
Attachment A
APPENDIX A
The fees due FSC will not exceed those contained in the fee schedule as listed below.
Base Fee - Any Issue $25,000
Plus $1.00 per 1,000 Bond
The above charges include all financial advisory services including computer structuring and ojficial
statementpreparation. The payment of charges for financial advisory services shall be contingent upon the
delivery of bonds and shall be due at the time that bonds are delivered.
The Issuer shall be responsible for the following expenses, if and when applicable, whether they are chargedto
the Issuer directly as expenses or charged to the Issuer by FSC as reimbursable expenses:
Bond counsel
Bond printing
Bond ratings
Credit enhancement
CPA fees for refunding
Official statement printing
Paying agent/registrar/trustee
Travel expenses
Underwriter and underwriters counsel
Miscellaneous, including copy, delivery, and phone charges
The payment of reimbursable expenses that FSC has assumed on behalf of the Issuer shall NOT be
contingent upon the delivery of bonds and shall be due at the time that services are rendered andpayable
upon receipt of an invoice therefor submitted by FSC.
Attachment B
AGREEMENT
FOR
CONTINUING DISCLOSURE SERVICES
BY AND BETWEEN
CITY OF DENTON, TEXAS
(HEREINAFTER REFERRED TO AS THE "ISSUEW')
AND
FSC DISCLOSURE SERVICES,
A DIVISION OF FIRST SOUTHWEST COMPANY
In connection with the sale and delivery of certain bonds, notes, certificates, or
other municipal obligations (the "Bonds"), the Issuer has made certain undertakings to
disclose to the investing public, on a periodic and continuing basis, certain information,
as more fully set forth in such undertakings and as contemplated by the provisions of
Securities and Exchange Commission Rule 15c2-12, as amended (the "Rule").
The Issuer has agreed to engage FSC Disclosure Services, a Division of First
Southwest Company ("Disclosure Services"), to assist it with these continuing disclosure
obligations, for the consideration and on the terms and conditions set forth herein,
including the preparation and submission of annual reports (the "annual reports") and the
reporting of certain specified events (the "Events"), which are set forth in the Issuer's
undertakings, the Rule and in Subsection 2c. below.
This agreement (the "Agreement") between the Issuer and the Disclosure Services
shall become effective at the date of its acceptance as provided for below.
The parties agree as follows:
1. This Agreement shall apply to all issues of Bonds delivered subsequent to the
effective date of the continuing disclosure requirements as specified in the Rule, to the
extent that any particular issue does not qualify for exceptions to the continuing
disclosure requirements of the Rule.
2. Disclosure Services agrees to perform the following duties in connection with
providing services relating to the Issuer's continuing disclosure obligations:
a. assist the Issuer in compiling data determined or selected by the Issuer to be
disclosed;
b. assist the Issuer in identifying other information to be considered by Issuer for
continuing disclosure reporting purposes;
Attachment B
c. assist the Issuer in preparing the presentation of such information, to include
annual reports containing financial information and operating data of the type provided in
the final official statement of applicable issues, and notices concerning the occurrence of
the specified Events and other items listed below:
1) Principal and interest payment delinquencies
2) Non-payment related defaults
3) Unscheduled draws on debt service reserves reflecting financial difficulties
4) Unscheduled draws on credit enhancements reflecting financial difficulties
5) Substitution of credit or liquidity providers, or their failure to perform
6) Adverse tax opinions or event affecting the tax-exempt status of the security
7) Modifications to rights of security holders
8) Bond calls
9) Defeasances
10) Release, substitution, or sale of property securing repayment of the securities
11) Rating changes
12) Noncompliance with the Rule
d. assist the Issuer in distributing or filing, in the Issuer's name, the above
mentioned annual reports, notices and audited annual financial statements to Nationally
Recognized Municipal Securities Information Repositories ("NRMSIR's"), the Municipal
Securities Rulemalang Board, appropriate State Information Depository ("SID"), rating
agencies, and other entities, as required by the Issuer's continuing disclosure obligations.
e. provide to the Issuer confirmation of distribution or dissemination of reports
and notices.
3. Issuer acknowledges and agrees to the following:
a. Disclosure Services will be compensated for the performance of services with
respect to assisting the Issuer with preparation and submission of continuing disclosure
reports in accordance with the schedule as set forth below:
(i) $2,500 per year for assistance in preparation and distribution of each annual
report and assistance in distribution of audited annual financial statements, if
Issuer is exempt from requirements other than filing with the SID, or
$3,500 per year for assistance in preparation and distribution of each annual
report and assistance in distribution of audited annual financial statements, if
Issuer is not exempt from filing reports with the NRMSIR's, plus
(ii) $100 minimum fee for assistance in preparation and distribution of each
notice concerning occurrence of an Event or noncompliance with the Rule; in
addition, a fee of $125 per hour for all time in excess of five (5) hours spent
2
Attachment B
in assisting with preparation and distribution of each notice concerning
occurrence of an Event or noncompliance with the Rule.
b. Issuer will provide to Disclosure Services, and Disclosure Services shall be
entitled to rely upon, all information regarding the issuance of the Bonds, including the
final official statement and the Issuer's commitment or undertaking regarding continuing
disclosure as contained in the resolution authorizing issuance of the Bonds or separate
contract or agreement; annual financial information and operating data of the type
provided in the final official statement, information concerning the occurrence of an
Event or noncompliance with the Rule; and any other information necessary in
connection with preparing continuing disclosure reports.
c. Issuer will provide to Disclosure Services, and Disclosure Services shall be
entitled to rely upon, annual written confirmation of all outstanding Bond issues for
which the issuer has a continuing disclosure obligation.
d. Issuer will provide to Disclosure Services all information -required for
preparation of each annual report, including financial information and operating data of
the type provided in the final official statement and other information deemed necessary
by Issuer, no later than 45 days prior to the date on which each annual report is due.
e. Issuer will provide full and complete copies of the audited annual financial
statement no later than ten (10) days prior to the date on which it is due.
f. Issuer will notify Disclosure Services immediately upon the occurrence or
immediately upon the Issuer's knowledge of the occurrence of each Event or
noncompliance with the Rule, and the Issuer will immediately provide all information
necessary for preparation of the notice of occurrence of each such Event or
noncompliance with the Rule.
g. Issuer shall have the sole responsibility for determining the disclosure to be
made in all cases, and the Issuer shall review and provide written approval of the content
and form of all continuing disclosure reports and notices. In the event of a disagreement
between the Issuer and Disclosure Services regarding the disclosure to be made, either the
Issuer or Disclosure Services may, but neither is obligated to, terminate this Agreement
by written notice to the other party.
h. A separate annual report will be prepared and distributed for each type of
security pledge in effect for outstanding financing issues or Bonds of the Issuer.
i. Issuer will inform Disclosure Services of the retirement of any Bonds included
under the scope of this Agreement within 30 days of such retirement.
4. In the event that Disclosure Services and the Issuer determine that advice of
counsel is appropriate with respect to any question concerning disclosure, then (i) the
Attachment B
Issuer may consult with its counsel, or (ii) the Issuer may authorize Disclosure Services to
seek legal advice from independent counsel regarding the disclosure. The Issuer agrees
that it shall be responsible for the fees and expenses of its own counsel. The Issuer agrees
to reimburse Disclosure Services the fees and expenses of independent counsel, if paid by
Disclosure Services, for advice rendered pursuant to authorization by the Issuer.
5. The Issuer agrees to hold harmless and to indemnify Disclosure Services and
its employees, officers, directors, and agents from and against any and all claims,
damages, losses, liabilities, reasonable costs and expenses whatsoever (including
attorneys' fees and expenses) which Disclosure Services may incur by reason of or in
connection with the distribution of information in the disclosure reports in accordance
with this Agreement, except to the extent such claims, damages, losses, liabilities, costs
and expenses result directly from. Disclosure Services' willful misconduct or gross
negligence in the distribution of such information.
In order to provide for just and equitable contribution, if a claim for
indemnification pursuant to the foregoing indemnification provision is made, but it is
determined in an appropriate proceeding that such indemnification may not be enforced,
even though the express provisions hereof provide for indemnification in such case, then
the issuer, on the one hand, and Disclosure Services, on the other hand, shall contribute to
the claims, damages, losses, liabilities, costs and expenses to which Disclosure Services
may be subject in accordance with the relative benefits received by Issuer, on the one
hand, and Disclosure Services, on the other hand, and also the relative fault of Issuer, on
the one hand, and Disclosure Services, on the other hand, in connection with the acts or
omissions which resulted in such claims, damages, losses, liabilities, costs or expenses;
and relevant equitable considerations shall also be considered. Notwithstanding the
foregoing, Disclosure Services, shall not be obligated to contribute any amount hereunder
that exceeds the amount of fees previously received by Disclosure Services pursuant to
this Agreement.
6. The fees and expenses due to Disclosure Services in providing continuing
disclosure services shall be calculated in accordance with Section 3a. of this Agreement.
The fees will be invoiced each year during the term of the Agreement, unless terminated
earlier, and fees will be payable within 30 days of receipt of invoice, except that the fees
for the first year's service will be invoiced and be payable upon acceptance of this
Agreement.
In addition, the Issuer agrees to reimburse Disclosure Services for the following
expenses: (i) legal fees and expenses of counsel incurred by Disclosure Services pursuant
to the terms of Section 4. above, and (ii) other out-of-pocket expenses reasonably
incurred by Disclosure Services in performing its obligations hereunder. The Issuer shall
remit payment for expenses to Disclosure Services within 30 days of receipt of invoice.
4
Attachment B
Bonds Issued Subsequent to Agreement
7. The provisions of this Agreement will include additional municipal bonds
and financings (including financing lease obligations) issued during the stated term of
this Agreement, if such bonds are subject to the continuing disclosure requirements.
In this connection, the Issuer agrees that the Issuer will notify Disclosure Services of
any municipal bonds and financing (including financing lease obligations) issued by
the Issuer during any fiscal year of the Issuer during the term of this Agreement, and
will provide Disclosure Services with such information as shall be necessary in order
for Disclosure Services to perform the services contracted for hereunder.
Effective Dates of Agreement
8. This Agreement shall become effective at the date of acceptance by the
Issuer as set out below and remain in effect thereafter for a period of five (5) years
from the date of acceptance. Unless Disclosure Services or Issuer shall notify the
other party in writing at least thirty (30) days in advance of the applicable anniversary
date that this Agreement will not be renewed, this Agreement will be automatically
renewed on the fifth anniversary of the date hereof for an additional one (1) year
period and thereafter will be automatically renewed on each anniversary date for
successive one (1) year periods. This agreement may be terminated with or without
cause by the Issuer or Disclosure Services upon thirty (30) days' written notice to the
other party. In the event of such termination, it is understood and agreed that only the
amounts due to Disclosure Services for services provided and expenses incurred to
and including the date of termination will be due and payable. No penalty will be
assessed for termination of this Agreement. In the event this Agreement is terminated
prior to its stated term, all records provided to Disclosure Services by the Issuer shall
be returned to the Issuer as soon as practicable. In addition, the parties hereto agree
that upon termination of this Agreement Disclosure Services shall have no continuing
obligation to the Issuer regarding any service contemplated herein. Notwithstanding
the foregoing, all indemnification, hold harmless and/or contribution obligations,
pursuant to Section 5 of this Agreement, shall survive any termination, regardless of
whether the termination occurs as a result of the expiration of the term hereof or the
Agreement is terminated sooner by either the Issuer or Disclosure Services under this
Section 8, pursuant to Subsection 3f, or otherwise.
Provision of Notices
Provision of information, delivery of certification and notices of Events and
noncompliance with the Rule, unless directed otherwise in writing, shall be sent to:
City of Denton, Texas
215 East McKinney
Denton, Texas 76201
Ms. Diana Ortiz
Director of Fiscal Operations
Phone: (940) 349-8224
Facsimile: (940) 349-7206
Email: diana.ortiz@cityofdenton.com
5
Attachment B
FSC Disclosure Services, a Division of First Southwest Company
325 North St. Paul Street, Suite 800
Dallas, Texas 75201
Attention: Beth Bankhead
VP for Continuing Disclosure
Telephone: (214) 953-4003
Facsimile: (214) 953-4050
Email: bbankhead@firstsw.com
Acceptance of Agreement
9. This Agreement is submitted in triplicate originals. When accepted by the
Issuer, it will constitute the entire Agreement between the Issuer and Disclosure Services
for the purposes and the consideration specified above.
Acceptance will be indicated on all copies and returned to Disclosure Services. An
executed original will be returned for your files.
Respectfully submitted,
FSC Disclosure Services, a Division of First
Southwest Company
By
Hill A. Feinberg
Chairman and Chief Executive Officer
By &A I-awkkeJ
Beth Bankhead
Vice President
Date
ACCEPTANCE CLAUSE
The above and foregoing is hereby in all things accepted and approved by the City of
Denton, Texas, on this the day of ci c 005.
r
By
u horized Representative
Title
6
Attachment C
PROPOSAL AND AGREEMENT
FOR
ARMIRAGE REBATE COMPLIANCE SERVICES
BY AND BETWEEN
CITY OF DENTON, TEXAS
(Hereinafter Referred to as the "Issuer")
AND
FIRST SOUTHWEST COMPANY
It is understood and agreed that the Issuer, in connection with the sale and delivery of
certain obligations as listed in Appendix A attached hereto (the "Obligations"), will have the
need to determipe to what extent, if any, it will be required to rebate investment earnings of the
proceeds of the Obligations to the United States of America (hereinafter referred to as
"Rebatable Arbitrage") pursuant to the provisions of Section 148(f)(2) of the Internal Revenue
Code of 1986 (the "Code"). We have been requested to provide professional services to the
Issuer as 'such services may be necessary to effect this determination and we are pleased to
submit the following proposal for consideration. This proposal, if accepted by the Issuer, shall
become the agreement (the "Agreement") between the Issuer and First Southwest Company
effective at the date of its acceptance as provided for herein below.
1. This Agreement shall apply to the Obligations described in Appendix A
attached hereto during the period in which this Agreement shall be effective.
Provisions of First Southwest Company
2. We agree to provide our professional services and our facilities in the
creation and maintenance of records useful to.or necessary in the determination of
Rebatable Arbitrage with regard to the Obligations. The Issuer will assume and pay the
fee of First Southwest Company as such.fee is set out in Appendix A attached hereto,
First' Southwest Company'shall nor be responsible for any .extraordinary expenses-
incurred in connection with providing such professional services, including any costs
incident to litigation, mandamus action, test case or other similar legalI actions; unless
First Southwest Company is a party to such litigation and a claim is asserted against First
Southwest Company for work performed under this Agreement.
3. We agree to perform the following duties in connection with-providing
arbitrage investment rebate services:
Attachment C
a. To cooperate fully with the-Issuer in reviewing the schedule of
investments made by the Issuer with (i) proceeds from the Obligations, and (ii)
proceeds of other funds of the Issuer which, under Regulations Section 1. 1-48 or
Temporary Regulations Section 1.103-ISAT(b)(6) or any successor regulations
thereto, are subject to the rebate requirements of the Code;
b. To perfonn, or cause to be performed, calculations no less
frequently than twice • a year, consistent with the Code and the regulations
promulgated thereunder, regarding the amounts of Rebatable Arbitrage from the
investment of funds subject to the requirements of Section 148(f)(2) of the Code;
C. To assist the Issuer in preparing schedules, records or other
information necessary to enable First Southwest Company to perform the-rebate
calculations as set forth in this Agreement;
d. . To provide a report to the Issuer specifying the amount of
Rebatable Arbitrage based upon the investment schedule, the calculations of bond
yield and investment, yield, and other information deemed relevant by First
Southwest Company.
Provisions of Issuer
4. In connection with the performance of. the aforesaid duties, the Issuer
agrees to the following:
a. That First Southwest Company will be compensated for the
performance of services with respect to calculating and advising the Issuer bf the
amount of Rebatable Arbitrage in accordance with -the schedule set forth in
Appendix A attached hereto.
b. . That the Issuer will provide First Southwest Company, and First
Southwest Company shall. be entitled to rely upon, all information regarding the
issuance of the Obligations and the investment of tfis proceeds therefrom, and any
other information. necessary in connection with calculating _the amount of
Rebatable Arbitrage. In particular, the Issuer shall furnish to First Southwest
Company the information set forth in Appendix B attached hereto.
c. ' That the Issuer will inform First Southwest Company, of the
retirement, prior to the scheduled maturity, of any' Obligations included under the
scope of this Agreement within 30 days of such retirement. This notification is
requited to provide sufficient time to comply with Section 1.148-1(b)(3)(R) of the
arbitrage regulations which requires final payment of any Rebatable Arbitrage
within 60 days of the final retirement of the Obligations.
2
Attachment C
5. In providing the services set forth in this Agreement, it is agreed that First
Southwest Company shall not incur any liability for any error of judgment made in good
faith by a responsible officer or officers thereof, unless it skull be proved that such error
of judgment was a result of the negligence or willful misconduct of said officer or
officers, First Southwest Company shall only be liable for penalty and interest resulting
from such error of judgment.
6. The fee and expenses due to First Southwest Company in providing
arbitrage investment rebate services shall be calculated in accordance with Appendix A
attached hereto. The fees will be payable annually upon delivery of the report prepared
by First Southwest Company for each Obligation during the term of the Agreement
unless terminated earlier.
Obligations Issued Subsequent to Initial Contract
7. The services contracted for under this Agreement will automatically extend
to any additional financing obligations (including financing lease obligations) issued
during the stated term of this Agreement, if such obligations are subject to the rebate
requirements under Section 148(f)(2) of the Code. In connection with extending the
scope of this Agreement to additional financing obligations, the issuer agrees to the
following:
a. The Issuer will notify First Southwest Company of any financing
obligations (including financing lease obligations) issued by the Issuer during any
calendar year of this Agreement, and will provide First Southwest Company with
such information regarding such other obligations as First Southwest Company
deems necessary in connection with ' its performance of the arbitrage rebate
services contracted for hereunder.
b. At the option of the Issuer, any 'additional financing obligations
issued subsequent to the execution of this Agreement may be excluded from the.
services provided for herein.. The Issuer must notify First Southwest Company
in writing of their intent to exclude any specific financing obligations fzoin the
scope of this Agreement.
Election to Pay Penalty in Lieu of Rebate
8. The services contracted for under this Agreement will automatically extend
to any additional financing obligations issued during the stated term of this Agreement,
if an election was made (prior to delivery of the Obligations) to pay penalty in lieu of
rebate for a qualified construction bond issue under Section 148(f)(2) of the Code: In
connection with extending the scope of this Agreement to include computations of
penalty, the Issuer agrees to the following:
3
Attachment C
a. The Issuer will notify First Southwest Company of any financing
obligations issued by the Issuer during any calendar year of this Agreement for
which a penalty election was made. The Issuer will provide First Southwest
Company with such information regarding the investment and expenditure of such
obligations as First Southwest Company deems necessary in connection with its
performance of the penalty calculation services contracted for hereunder.
b. At the option of the Issuer, any additional financing obligations
issued subsequent to the execution of this Agreement may -be excluded from the
services provided for herein. The Issuer must notify First Southwest Company
in writing of their intent to exclude any specific financing obligations from the
scope of this Agreement.
Effective Dates of Agreement
9. This~Agre~pnent>il~;eorne"°effeefi`e''a'itie date °of'a6cepfa~iceu6y the
Issuer-}as>set~;outKhozoin=abelo ma nrin?~efP°" f ha ft r' rovided However %that
this Agreerr~r~tFrttay,b~tnat~dg~trwrtttottt~oausecbythe~TssueraorPirst~.Southwest
Company upon thirty (30) days' written notice. In the event of such termination, it is
understood and agreed that only the amounts due to First Southwest Company for
services provided and expenses incurred to and including the date of termination will be
due and payable. No penalty will be assessed for termination of this Agreement. In the
event this Agreement is terminated prior to its stated term, all records provided to First
Southwest Company with respect to the investment of monies by the Issuer shall be
returned to the Issuer as soon as practicable. In addition, the parties hereto agree that
upon termination of this Agreement First Southwest Company shall have no continuing
obligation to the Issuer regarding any service contemplated herein.
4
Attachment C
Acceptance of Agreement
10. This Agreement is submitted in duplicate originals. When accepted by the
issuer, it, -together with Appendices A and B attached hereto, wit] constitute the entire
Agreement between the Issuer and First Southwest Company for the purposes and the
consideration herein specified.
Acceptance will be indicated on both conies and the return of one executed copy to 1i c9
Southwest Company.
Respectfully submitted,
FIRST SOUTHWEST COMPANY
By
Authorized Representative
Date '3D'13
5
7
Attachment C
PLEASE CHOOSE AND EXECUTE THE APPROPRIATE OPTION
ACCEPTANCE CLAUSE
Accotance Not Requiring Board Approval:
The above and foregoing is hereby in all things accepted and approved by the
(Issuer's Name)
on this the
day of
,19
By
Authorized Representative
Acceptance Muiring Board Approval:
Title
The above and foregoing is hereby • in all things accepted and approved by the
on this the _ day of
suet's Name) difi~•
1990 , pursuant to the provisions- of Pcesehtfien No~~~ passed and
approved by the Members of the on
Secretary
6
it
Attachment C
APPENDIX A
'FEES
The Obligations to be initially covered under this contract are:
Closing
Date
Description
Maximum
Annual Fee
01/22/87
$500,000. Certificates of Obligation, Series 1987.
$2,000
02124187
$17,485,000 Utility System Refunding, Series 1987
$2,000
05/26/87
$3,500,000 General Obligation, Series 1987
$2,000
03/08/88
$3,600,000 General Obligation, Series 1988
$2,000
09106/88
$3,500,000 Utility System Revenue, Series 1988
$2,000
02/21/89
$3,615,000 General Obligation, Series 1989
$2,000
11/29/89
$20,000,000 Utility System Revenue, Series 1989
$2,000
11/29/89
$1,550,000 Certificates of Obligation, Series 1989A
$2,000
04/07192
$1,325,000 Certificates of Obligation, Series 1992
$2,000
04107192
$2,630,000 General Obligation, Series 1992
$2,000
04107/92
$4,500,000 Utility System Revenue, Series 1992
$2,000
02/23/93
$1,450,000 Certificates of Obligation, Series 1993
$2,000
04/20/93
$2,975,000 General Obligation, Series 1993
$2,000
04/20/93
$6,575,000 Utility System Revenue, Series 1993
$2,000
As funds are expended and the time required to complete the annual computations decreases,
First Southwest Company agrees to adjust the annual fee as follows:
7
Attachment C
Description
Annual Fee
Electronic
Data Transfer
Reduction
Mbndmum
Transactions
'Reduction (1)
Construction and Reserve Fund
$2,000
($500)
($500)
Construction Fund only
$2,000
($500)
($500)
Reserve Fund only
$1,000
($250)
$0
All Funds spent - reports issued
$250
$0
$0
All Funds spent - no reports issued
$0
$0
$0
(1) Fee reduction for annual calculations which involve ten (10) or fewer investment
transactions per issue.
The fees for the above-captioned Obligations will only be'payable if a computation is required
under Section 148(f)(2) of the Internal Revenue Code of 1985, as amended. In the event that
any of the above-captioned Obligations, or any other Obligations added subsequent to the date
of this Agreement, comply with an exclusion to the computation requirement as defined by
Section 148 of the Internal Revenue Code or related regulations, the specified fee will be waived
by First Southwest Company.
For example, certain obligations are excluded from the rebate computation requirement if the
proceeds are spent within specific time periods. In the event one of the above-captioned
Obligations fulfill the exclusion requirements of the Internal Revenue Code or related
regulations, the specified fee will be waived by First Southwest Company.
The fee for Arbitrage Rebate Compliance Services of any additional obligations to be added to
this contract .shall be:
$2,000 for each issue of General Obligation or Revenue bonds, regardless of issue size;
$2,500 for each issue of Variable/Floating Rate bonds, regardless of issue size.
The above fees are payable annually upon delivery of the report prepared by First
Southwest Company, commencing-one year-after the date of-delivery of the Obligations and on
each computation date thereafter during the term of the Agreement, unless terminated earlier.
The fees for computations of Rebatable Arbitrage which encompass more, or less, than one full
year of investment data performed during the same computation period shall be prorated to
reflect the longer, or shorter, period of work performed during that period.
The fee for Arbitrage Penalty Calculation Services contracted for under.this Agreement shall be:
$1,000 semiannually for each issue of bonds, regardless of the type of issue.
81
Attachment C
APPENDIX B
INFORMATION REQUIRED TO PERFORM
REBATE COMPUTATIONS
The following-information must be provided for each bond issue requiring an arbitrage rebate
calculation. Most of this information can be accumulated at the time the bonds are issued and
sent to First Southwest Company as part of the delivery of the bonds. We recommend that
information related to investment activity be forwarded on a periodic basis. This will allow First
Southwest Company to enter and review the investment detail in advance of the computation date
required under federal law. In this manner, the time required to complete the computation and
issue the related report can be reduced.
For each bond issue, please obtain the following information to be sent to First Southwest
Company:
Copy of Official Statement for the Issue. If no Official Statement is prepared on the issue,
a copy of the bond resolution, indenture, ordinance or. similar official transcript describing the
issue will be needed.
Copy of Winning Bid Form and Underwriter's Certificate as to Yields. This information
is only required when the bond issue was sold on a competitive basis. If the sale was
negotiated, the Final Official Statement normally provides the information required to properly
compute the arbitrage yield. If the issue was sold competitively, the winning bid form and
underwriter's certificate are needed to obtain information regarding the interest rates and initial
offering yields to the public.
Copy of Form 8038 . (Informational Tax Form). This form is normally prepared by bond
counsel as part of the closing documents. A copy of this form must accompany any rebate
payments filed with the Internal Revenue Service.
Description of Funds created for the bond issue. To ensure that we have properly addressed
the distribution of all funds and the related arbitrage requirements, it is useful for us to obtain
a description of the various funds created by the bond issue. in the official documents
supporting the issuance of the bonds (e.g., Official Statement), there is normally a narrative
section outlining the funds for which bond proceeds and other monies may be deposited.
Copy of "No-Arbitrage Certificate." This certificate, although frequently called by another
name, describes the federal tax law requirements the Issuer must follow to comply with various
arbitrage laws. This document permits us to evaluate the specific tax compliance requirements
established by Bond Counsel at the time the bonds were issued,
9-
Attachment C
Investment transaction information. The computation of the rebate amount for excess
investment earnings requires very detailed investment records. In order for us to compute the
rebate amount, it is necessary that you forward investment information which includes the
following data:
• Source of funds for purchasing the investment (e.g. Construction Fund, Reserve
Fund, Debt Service Fund),
• Description of security purchased,
• Date purchased,
• Maturity date,
• Maturity value of security (par. value/face value),
• Purchase price of security 'showing both the cost of principal as well as any
accrued interest paid,
• Coupon rate (interest rate) and frequency of interest receipts,
• Yield to maturity (required for discount securities),
• Sale date, if sold prior to maturity,
• Sales price of both principal and interest, if sold-prior to maturity.
The best documentation available for the information listed above are copies of the actual trade
confirmations provided when the security is purchased or sold. The trade confirmation should
contain all of the information we will.require and should be the only documentation you would
have to provide us. If trade confirmations are 'not available, or are too cumbersome to
accumulate, your internal investment records would be sufficient for our purposes as long as tixe
information described above can' be obtained from your records.
Bank Statements for Iinteirest-Bearing Checking Account. In many 'situations, an
initefesi-bearing checking account is used to hold maturing investments and miscellaneous fund
balances until the proceeds are either reinvested or used on a specific project. The rebate
computation requires that all funds related to a bond issue be tracked. It will be necessary
therefore, for us to obtain the monthly bank statements related to any interest bearing checking
account in which bond proceeds or related funds were deposited.
if you have questions as to what would be the best source of information in your situation,
please do not hesitate to contact us.
10
Attachment D
APPENDIX III
AMENDED FEES
FirstSouthwest charges a fixed annual fee per issue. No hourly fees or "hidden costs" are charged, as the fixed annual fee per
issue includes all required analysis, calculation, ongoing support, periodic onsite visits and reports at fiscal year end and at
interim IRS calculation dates. Determining the impact of possible future bond issues or refunding opportunities on the
client's arbitrage liability is also provided at no additional cost.
Arbitrage Compliance Services Fee Schedule - FirstSouthwest's fee for arbitrage rebate services is based upon a fixed
annual fee per issue. The annual fee is charged based upon the number of years that proceeds exist subject to rebate from the
delivery date of the issue to the computation date.
The fee for each of the Bonds included in this contract shall be based on the table below. Annual Fee Calculation = Annual Fee
less Electronic Data Submission Discount (if applicable).
Additionally, due to significant time saving efficiencies realized when investment information is submitted in an
electronic format, First Southwest passes the savings to its clients by offering a 10% reduction in its fees if
information is provided in a spreadsheet or electronic text file format.
Payment terms: FirstSouthwest's fees are payable upon delivery of the reports.
Description Annual Fee
ANNUAL FEE $1,400
COMPREHENSIVE ARBITRAGE COMPLL4NCE SERVICES INCLUDE:
• Commingled Funds Analysis & Calculations
• Spending Exception Analysis & Calculations
• Yield Restriction Analysis & Calculations
(for yield restricted Project Funds, Reserve Funds, Escrow Funds, etc.)
• Parity Reserve Fund Allocations
• Transferred Proceeds Calculations
• Universal Cap Calculations
• Debt Service Fund Calculations (including earnings test when required)
INCLUDED
• Preparation of all Required IRS Paperwork for Making a Rebate Payment / Yield Reduction
Payment
• Retention of Records Provided for Arbitrage Computations
• IRS Audit Assistance
• Delivery of Rebate Calculations Each Year That Meets the Timing Requirements of the Audit
Schedule
• On-Site Meetings, as Appropriate, to Discuss Calculation Results / Subsequent Planning Items
OTHER SERVICES AVAILABLE:
IRS Refund Request - Update calculation, prepare refund request package, and assist issuer as
$750
necessary in responding to subsequent IRS Information Requests
Commercial Paper Calculations -Per allocated issue
$1,600
If a calculation only contains a Reserve Fund, the Annual Fee will be reduced to $750.00
47426-1
EXPLANATION OF TERMS:
a. Computation Year: A "Computation Year" represents a one year period from the delivery date of the issue to the date that
is one calendar year after the delivery date, and each subsequent one-year period thereafter. Therefore, if a calculation is
required that covers more than one "computation year," the annual fee is multiplied by the number of computation years
contained in the calculation being performed. If a calculation includes a portion of a computation year, i.e., if the calculation
includes 1 '/2 computation years, then the base fee will be multiplied by 1.5.
b. Electronic Data Submission: The data should be provided electronically in MS Excel or ASCII text file (comma
delimited text preferred) with the date, description, dollar amount, and an activity code (if not in debit and credit format)
on the same line in the file.
c. Variable/Floating Rate Bond Issues: Special services are also required to perform the arbitrage rebate calculations for
variable rate bonds. A bond is a variable rate bond if the interest rate paid on the bond is dependent upon an index which
is subject to changes subsequent to the issuance of the bonds. The computational requirements of a variable rate issue
are more complex than those of a fixed rate issue and, accordingly, require significantly more time to calculate. The
additional complexity is primarily related to the computation of the bond yield, which must be calculated on a "bond
year" basis. Additionally, the regulations provide certain flexibility in computing the bond yield and determining the
arbitrage amount over the first IRS reporting period; consequently, increased calculations are required to determine
which bond yield calculation produces the lowest arbitrage amount.
d. Commingled Fund Allocations: By definition, a commingled fund is one that contains either proceeds of more than
one bond issue or proceeds of a bond issue and non-bond proceeds (i.e., revenues) of $25,000 or more. The arbitrage
regulations, while permitting the commingling of funds, require that the proceeds of the bond issue(s) be "carved out"
for purposes of determining the arbitrage amount. Additionally, interest earnings must be allocated to the portion of the
commingled fund that represents proceeds of the issue(s) in question. Permitted "safe-harbor" methods (that is, methods
that are outlined in the arbitrage regulations and, accordingly, cannot be questioned by the IRS under audit), exist for
allocating expenditures and interest earnings to issues in a commingled fund. First Southwest uses one of the applicable
safe-harbor methods when doing these calculations.
47426-1
Exhibit 1
ARBITRAGE REBATE COMPLIANCE SERVICES
INVOICE DATE: 06/29/2010
INVOICE NUMBER: R11246
Line
Explanation
Series
Par Amount
1
Util Sys Rev Bds
1998
$
7,175,000
2
Util Sys Rev Bds
1998A
$
36,795,000
3
Util Sys Rev Bds
1998B
$
7,640,000
4
Util Sys Rev Bds
2000A
$
51,085,000
5
GO Bds
2001
$
14,245,000
6
Util Sys Rev Ref Bds
2001
$
59,545,000
7
Cert of Oblig
2001
$
12,120,000
8
Util Sys Rev Bds
2002A
$
56,710,000
9
GO Bds
2002
$
12,075,000
10
Cert of Oblig
2002
$
12,590,000
11
GO Ref Bds
2003
$
8,080,000
12
Cert of Oblig
2003
$
7,405,000
13
Util Sys Rev Ref Bds
2003
$
50,180,000
14
Cert of Oblig
2004
$
14,000,000
15
Util Sys Rev Ref Bds
2004
$
24,850,000
16
GO Ref Bds
2004
$
9,410,000
17
GO Bds
2005
$
5,000,000
18
Util Sys Rev Ref Bds
2005
$
53,845,000
19
Cert of Oblig
2005
$
7,145,000
20
GO Bds
2006
$
3,695,000
21
Cert of Oblig
2006
$
12,665,000
22
Util Sys Rev Bds
2006
$
8,515,000
23
Util Sys Rev Ref Bds
2007
$
41,795,000
24
Util Sys Rev Bds
2007
$
16,740,000
25
GO Bds
2007
$
15,925,000
26
Cert of Oblig
2007
$
11,445,000
27
GO Ref Bds
2007
$
2,827,000
28
Cert of Oblig
2007A
$
7,065,000
29
GO Bds
2008
$
7,300,000
30
Cert of Oblig
2008
$
10,685,000
31
Util Sys Rev Bds
2008
$
15,290,000
32
GO Ref Bds
200,9
$
7,525,000
Net Inv. Amt.
Current Fees
$ 1,500
$ 1,645
$ 820
$ 1,500
$ 1,500
$ 1,500
$ 1,500
$ 1,500
$ 1,500
$ 1,500
$ 1,500
$ 1,500
$ 1,500
$ 485
$ 760
$ 1,925
$ 1,500
$ 1,500
$ 1,500
$ 1,500
$ 1,500
$ 1,500
$ 1,500
$ 1,500
$ 1,500
$ 1,500
$ 1,500
$ 1,500
$ 1,525
$ 1,525
$ 1,520
$ 605
$ 45,310
Projected
Inv. Amt.
Proposed Fees
$
1,260
$
1,386
$
820
$
1,260
$
1,260
$
1,260
$
1,260
$
1,260
$
1,260
$
1,260
$
1,260
$
1,260
$
1,260
$
416
$
760
$
1,613
$
1,260
$
1,260
$
1,260
$
1,260
$
1,260
$
1,260
$
1,260
$
1,260
$
1,260
$
1,260
$
1,260
$
1,260
$
1,285
$
1,285
$
1,273
$
517
$
38,335
2