Loading...
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