2012-029s:\legallour documentslordinances\121first southwest company.doc
ORDINANCE NO. 2� 12-029
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS,
AUTHORIZING THE CITY MANAGER TO EXECUTE A CONSULTING SERVICES
AGREEMENT FOR FINANCIAL ADVISORY, ARBITR.AGE REBATE AND CONTINUlNG
DISCLOSURE SERVICES BETWEEN THE CITY OF DENTON AND FIRST SOUTHWEST
COMPANY AND AFFILIATE FIRST SOUTHWEST ASSET MANAGEMENT;
APPROVING THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN
EFFECTIVE DATE.
WHEREAS, the City has selected First Southwest Company and affiliate First Southwest
Asset Management for the purpose of financial advisory services, continuing disclosure services,
and arbitrage services; 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 First Southwest Company and affiliate First
Southwest Asset Management, which is attached hereto and incorporated herein by reference.
SECTION 3. The City Manager, or his designee, is authorized to make the expenditures
as outlined in the attached Agreement and to exercise all rights and duties of the City of Denton
under the Agreement.
SECTION 4. This Ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
�
BY:
APPRO ED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY: ��.�.���� �����%`�
�
/ `J � day of
:
2012.
, MAYOR
CONSULTING SERVICES AGREEMENT
FOR FINANCIAL ADVISORY, ARBITRAGE REBATE AND CONTINUING
DISCLOSURE SERVICES
STATE OF TEXAS
COUNTY OF DENTON §
HIS AGREEMENT is made and entered into as of the �%`5� day of
, 2012, by and between the City of Denton, Texas, a Texas municipal
corporation, wi its principal off'ice at 215 East McKinney Street, Denton, Denton County,
Texas 76201, hereinafter called "OWNER" and First Southwest Company, with an ofiice at 777
Main Street, Suite 1200, Fort Worth, Texas 76102, hereinafter called "CONSULTANT," and
CONSLJLTANT's affiliate, First Southwest Asset Management, Inc., with its corporate office at
325 North St. Paul Street, Suite 800, Dallas, Texas 75201, hereinafter called ("FSAM"), 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. CONSL7LTANT 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 foi�th in the Continuing Disclosure
Seivices Agreement attached hereto as Attachment B, which shall be attached to this
Agreenient and made a part hereof for all purposes as separate agreements.
C. FSAM shall perfoim all those seivices set forth in the Arbihage Rebate Services
Agreement attached hereto as Attachments C, 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 wi11 conhol over the tertns
and conditions of the attached attachments.
ARTICLE III
ADD�TIONAL SERVICES
Additional seivices to be performed by the CONSULTANT and FS.AM, if authoitized by
tlie OWNER, which are not included in the above-described Scope of Seivices, are described as
follows: (list all additional seivices that may be required for the project)
Not applicable.
ARTICLE IV
PERIOD OF SERVICE
This Agreement shall become effective upon execution of this Ag-reement by the
OWNER and the CONSULTANT and FSAM atid upon issue of a notice to proceed by the
OWNER, and shall remain in foxce dui�ing the term of the respective agreernents attached hereto
and any required axtansions approved by the OWNER. This Agreement may be sooner
terminated in aecoxdance with the provisions in Article XII and the respective agreements may
be terminated pursuant to each such agreement's teixns. Time is of the essence in this
Agreement. The CONSiJLTANT and FSAM shall make all reasonable efforCs to camplete the
se�vices 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 incuzred by the CONSULTANT in
employnnent of others in outside firms for seivices in the natuxe 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, transpoi�tation and equiprnent,
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havel, communications, subsistence, and lodging away fiom home, and similar
incidental expenses in co��nection wit11 that assignment.
B. BILLING AND PAYMENT: For and in consideration of the professional seivices to be
perfairned by the CON5IJLTANT and FSAM herein, the OWNER agrees to pay, based
on the teirns of the agreements attached hereto.
Partial payments to the CONSULTANT and FSAM will be made on the basis of detailed
monthly statements rendexed to and approved by the OWNER through its City Manager
or his designee; however, uiider no circumstances shall any monihly statement for
sezvices exceed the vahte of the worlc perfoimed at the time a staternent is rendered. The
OWNER may withhold the final five percent (5%) of the contract amonnt until
completion of the Projects,
Nothing contained in this Article shall reqtiire the OWNER to pay fo� any worlc which is
unsatisfacto�y, as reasonably deterimined by the City Manager or his designee, or which is
ziot sttbmitted in compliance with tha terms of this Agreement. The OWNER shall iiot be
required to mal�e any payments to the CONSULTANT or FSAM when the
CON5ULTAN'T or FSAM, respectively, is in default under this Agreement,
It is specifically nnderstood and agreed that the CONSULTANT and/or FSAM shall not
be authoi7zed to undertake any worlc pursuant to this Agreement which would require
additional payments by the OWNER %r any charge, expense, or reimbursement above
the maximum not to exceed £ee as stated, without first having obtained written
authorization from the OWNER. The CONSULTANT and FSAM shall not proceed to
per%rm the seivices listed in Article III "Additional Services," without obtaining prior
w�ritten authorization frorn the OWNER.
C, ADDITIONAL SERVICES: For additional services authorized in writing by the
OWNER in Article III, the CONSULTANT and/or FSAM sha11 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 accoxdance with
subsection B hereof. Statements shall not be submitted more frequently than rnonthly.
D. PAYMENT: If the OWNER fails to make undisputad payments due the CONSULTANT
andlor FSAM for sezvices and expenses within thirty (30) days after receipt of the
CONSITLTANT's and/or FSAM's undisputed statement thereof, prornpt payment act
interest as set forth in Chaptez 2251 of the Texas Govei�ment Code shall be paid on the
amounts due the C�NSULTANT and/or FSAM. In addition, the CONSLTLTANT and/or
FSAM nr�ay, if payment is not received by the thirty-first (315`) day after receipt of
statement, after giving ten (10) days' written notice to the OWNER, suspend sezvices
under this Agreement until the CONSULTANT and/or FSAM has been paid in full all
amounts due for services, e�enses, and chax•ges, p�•ovided, however, no�hing herein shall
require the OWNER to pay prompt payment act intarest if the OWNER has a bona fide
disptrte with ttze CONSULTANT and/or FSAM concei�ing the payment or if the
Page 3
OWNER reasonably determines tliat the worlc is uusatisfactory, in accordance with this
Article V, "Conipensation,"
ARTICLE VI
OBSERVATION AND REVTEW OF THE WORK
The CONSULTANT and FSAM will exercise reasonable care and due diligence in
disoovez-in.g and promptly reporting to the OWNER any defects or deiiciencies in the work of the
CONSULTANT or FSAM oz any subconhactors or subconsultants, "
ARTICLE VII
OWNERSHIP OF DOCUMENTS
A11 documents prepared or furnished by the CONSULTANT and FSAM pursuant to this
Agreement are instruments of seivice, and shall become the property of the OWNER tipon the
termination of this Agreement. The CONSLTLTANT and FSAM are entitled to retain copies of
all such documents, The docttments prepared and fuinished 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
infoirnation or materials developed pursuant to this Agreement in another project or for other
puiposes than speci�ed fierein, CONSULTANT and FSAM are released fiom any and aIl
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 froxn ennployee 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,
deznands, daxnages, losses, and expenses, inchiding, but not limited to court costs and reasonable
attoi�ey fees incurred by the OWNER, and including, without limitation, damages for bodily and
personal injuiy, death and property darnage, resulting from the negligex►t acts or omissions of the
CONSULTANT or FSAM or its officers, shazeholders, agents, or employees in the execution,
operation, or perfoz�rnance of this Agreement.
Nothing in this Ag,reennent sha11 be conshued to create a liability to any person who is not
a party to this Agreement, and nothing herein shal] 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
Page 4
Agreen�ent, including the defense of goveinmental in�n�uility, which defenses are herehy
expressly resetved.
ARTICLE X
INSURANCE
During the performance of the seivices 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 Insuz•ance Cornmission or any successot' agency that has a
rating with Best Rate Can-iers of at least an A- or above:
A. Comprehensive General Liability Insurance with bodily injury limits of not less than
$500,000 for each occui7ence and not less than $500,000 in the aggregate, and with
property darnage limits of not less than $100,000 for eacli occu:�•ence and not less than
$100,000 in the aggregate.
B, Autornobile Liability Iusurance with bodily injury lirnits of not less than $SOD,000 foi
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. Worlcer'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 CONS[TLT�INT' 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 sha11, pi7or 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 ai7sing out of or relating to this Agreement may proceed
without the agreement of both pai�ties to submit the dispuie to mediation. The location for the
mediation shall be the City of Denton, Danton County, Texas unless a different locaiion is
agreed to by the parties.
Page 5
ARTYCLE XII
TERIVIINATION OF AGREEMENT
A. Notwithstanding any other provision of this Agreement, either party may teirninate by
giving thirty (30} days' advance written notice to the other party.
B. This Agreement may be terminated in whole or in pa1�t in the event of either party
substantially failing to ful�ill its obligations under this Agreennent. No such termination
will be affected unless the othe� party is given (1) written notice (delivered by certi�ed
mail, retuin zeceipt requested) of intent to terminate and setting forth the reasons
specifying the non-perfoi7nance, and not less than thirty (30} calendar days to cure the
failure; and (2) an opporhinity for consultation with the teiminating party prior to
termination.
C. If the Agreement is teiminated prior to completion of the seivices to be provided
liereiinder, CONSULTANT and/or FSAM sha11 immediataly cease all seivices and shall
render a�inal bill for seivices to the OWNER within thirty (30) •days after the date of
termination. The OWNER shall pay CONSULTANT and FSAM for a11 seivices
properly t•endered and satisfactorily performed and for reinibu�'sable expenses to
iertnination incurred p1-ior to the date of tei�rnination, in accordance with Article V
"Cotnpensation." Should the OWNER subsequently cont�act with a new consultant for
the continuation of services on the Project, CONSULTANT andlor FSAM sha11
cooperate in providing information. The CONSLTLTANT and FSAM shall turn over a11
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 docurnents 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 GONSULTANT or FSAM, its employees, associates, agents,
subcontractors, and subconsultants for the accuracy and connpetency of their designs or other
worlc; nor shall such approval be deemed to be an assumption of such responsibility by the
OWNER for any defect in the design or other worlt prepared by the CONSULTANT or FSAM
its employees, subcont�actors, agents,' and consultants. CoNSULTANT and FS.AM retain,
design responsibility and liability at all times during this Agreennent and after completion of this
Agreement.
ARTICLE XIV
NOTICES
All notices, communications, and reports required or permitted under this Agreernent
shall be personally delivered or mailed to the respective parties by depositing same in the United
Page 6
States mail to the address shown belovv, cei�ified mail, retui�i receipt requested, unless otherwise
specified herein, Mailed notices sha11 be deemed comrnunicated as of tluee (3) days' mailing:
To CONSULTANT:
First Southwest Company
David Medanich, Vice Chainnan
777 Main Sh�eet, Suite 1200
Fort Worth, Texas 76102
To FSAM
Fixst Southwest Asset Management, Inc.
William Johnson, Senior Vice President
325 North St. Panl St�reet, Suite 800
Dallas, Texas 75201
To OWNER:
City of Denton
Bryaii Langley, Chief Financial Of�cer
215 East McI�inney
Denton, Texas 76201
All notices shall be deemed effective upon receipt by the paz�ty to wl�om such notice is
given, or within three (3) days' mailing.
ARTICLE XV
ENTIRE AGREEMENT
This Agreement, consisting of twenty (20) pages and tluee (3) exhibits, constitutes the
coxn.plete and final expression of the agreement of the parties, and is intended as a complete and
exclusive statement of the tertns of their agieements, and supersedes all prior contemporaneous
offers, prornises, representations, negotiations, discussions, communications, and agreements
which may have been made in connection with the subject matter hereo£
ARTICLE XVI
SEVERABILTTY
If any provision of this Agreement is found or deemed by a court oi competent
jurisdiction to be invalid or unenfoxceable, it shall be considered severable from the rernainder of
this Agreernent and shall not cause the remainder to be invalid or unenforceable. In such event,
the parties shall refoi�n this Agreement to xeplace such stricken provision with a valid and
enforceable provision which comes as close as possible to expressing the intention of the stricicen
provision.
ARTICLE XVII
COMPLIANCE WITH LAWS
The CONSULTANT and FSAM shall comply with aIl federal, state, and local laws,
iules, regulations, and ordinances applicable to the worlc covexed heraunder 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
disci�in�inate against any person on the basis of race, color, religion, sex, national origin or
ances�iy, age, or physical handicap.
ARTICLE XTX
PERSONNEL
A. The CONSULTANT and FSAM represent that they have or will secure, at their own
expense, all personnel reqi�ired to perform all the services requited undez• this Agreement.
Such personnel shall not be employees or officers of, or have any contractual relations
with the OWNER. CONSIJLTANT and FSAM shall inform the OWNL�R of any conflict
of interest or potential conflict of interest that may aiise during the terni of this
Agreement.
B. All seivices required heretmder will be performed by the CONSULTANT and/or FSAM.
All personnel engaged in worlc shall be qualified, and shall be aitthoiized alid pei7nitted
under state and local laws to perfoim such seivices.
C. In those instances deemed liecessary by the OWNER, the CONSULTANT and/or FSAM
and/or their employees shall be required to submit to background checics.
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 tlae prior written consent of the OWNER, Should
the CONSULTANT or FSAM assign any part of the monies due under this Agreernent,
CONSULTANT or FSAM is xequired to provide written notice of the same to OWNER. Any
assignment of monies due under this Agreement shall not change any of the tezx�ns or conditions
of this Agreement to include but not limited to the tei�ns and conditions for payment under this
Agreement.
ARTICLE XXI
MODIFICATION
No waiver or modification of this Agreement or oi any covenant, condition, or limitation
herein contained shall be valid unless in writing and duly executed by the party 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 oz affecting this Agreement, or the
rights or obligations of ihe parties hereunder, and unless such waiver or modification is in
Page 8
writing and duly executed; and the parties fut-ther agree that the provisions of this section will not
be waived unless as set forth herein.
ARTICLE XXII
MISCELLANEOUS
A, The following exhibits are attached to and made a part of this Agreement; Exhibit A,
Pinancial Advisoly Agceen�ent; Exhibit B, Continuing Disclosure Seivices Agreement
and Exhibit C, Arbitrage Rebate Seivices Agreement.
B. CONSULTANT and FSAM agree #hat OWNER shall, until the expiration of five (5)
years after the final payment or after final completion of all work requirad ttnder this
Ag-reement, whichever is longer, have access to and the right to examine any directly
pertznent boolcs, documents, papers, coxxespon.dence, to include e-rnails, and records of
the CONSiJLTANT and/or FSAM involving transactions relating to this Agreement.
CONSULTANT and FSAM are required to maintain and malce available all electronic
t-ecords associated with this Agreernent for puiposes of examination. CONSULTANT
and FSAM agz'ee that OWNER shall have access during noimal working hours to all
necessary CONSULTANT and FSAM facilities and shall be provided adequate and
appropi7ate working space in order to conduct audits in cornpliance 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 foi�th in
Article XXIII.
C. Venue of any suit or cause of aciion under this Agreement shall lie exclusively in Denton
County, Texas. This Agreernent shall be construed in accordance with the laws of the
Staie of Texas.
D. For the purpose of this Agreernent, the key persons who will perform most of the work
heraunder shall be David Medanich and Shelley Weiske. However, �othing hexein s�na11
limit CONSULTANT and FSAM froxn using other quali�ed and cornpetent members of
its firm to perform the services required herein. CONSULTANT and FSAM understand
that OVJNER is to be informed of the removal or loss of any of the lcey persons working
under this Agreement. CONSULTANT and FSAM also agree to provide the OVJNER
with notice of the name(s) of who it intends to replace the key person. OWNER shall
have a �ight to xeject any replacement lcey person(s) at�d CONSULTANT and FSAM
agree to narne a replacement lcey person(s) acceptable to the OWNER.
E. CONSULTANT and FSAM shall comrnence, 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, CONSLTLTANT
and FSAM shall take such steps as are appropriate to ensure that the worlc involved is
properly coordinated with xelated worlc being cai7ied on by the OWNER.
Page 9
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
Projects, inchiding previous reports, any othez data relative to the Projects, and ai7anging
for the access thereto, and make all provisions for the CON,SULTANT and FSAM to
enter in or upon public and private property as required for the CONSULTANT and
FSAIVI to pei�foim setvices under this Agreement,
G. The captions of this Agreement are for infoi�national purposes only, and shall not in any
way affect ihe sul�stantive teims or conditions of this Agreement.
ARTICLE XXIII
RIGHT TO AUDIT
The OWNER shall have the right to audit azid malce copies of the boolcs, records and
computations pertaining to tllis agreement, The CONSULTANT and FSAM shall retain such
boolcs, records, documents and other evidence pertaining to this Agreement duritng the contxact
period and five years thexeafter, except if an audit is in progress or audit findings are yet
unresolved, in which case records shall be kept until all audit tasks are completed and resolvad.
These books, a�ecords, docurnents and other evidence shall be available, within 10 business days
of written xequest, Fui�ther, the CONSULTANT and FSAM shall also require all Subcont�actors,
matei-ial suppliers, and other payees to retain all bool�s, records, docurnents and other evidence
pei�taining to this agreement, and to allow the OWNER similar access to those documents. All
books and xecords will be made available withix� 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 oveipayment 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 andlor 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 sale discretion, grounds for tertnination thereof. Each of
the terms "boolcs", "records", "documents" and "other evidence", as used above, shall be
construed to include drafts and elecironic files, even if such drafts or electronic files are
subsequently used to generate or prepare a£�inal printed document.
Page 10
IN WITNESS AEREOF, the City of Denton, Texas has caused this Agreement to be
axecuted by its duly authoi7zed City Manager, and CONSULTANT and FSAM have�ecuted
this greement through their duly authorized utxdersigned officer on this the �/� day of
� ' A , 2012.
CZTY OF DENTON, TEXA.S
�.
,1
,; �'I►1 �_.. _ I ..��. �;
'1� •'�' , �': Uf ui. .
�
ATTEST:
JENNTFER WALTERS, CITY SECRETARY
BY:
APPR ED AS LEGAL FORM:
ANITA BUR.GESS, CITY ATTORNEY
�
BY:
CONSULTANT �
BY; �
ill A. einberg
Chairman and Chief Executive O er
FSAM
1
BY:
Hill A. Feinberg
Chairman and Chief Executive Of
WITNESS:
.
BY: � f�l/- � �
CITY OF DENTON
INSURANCE REQUIREMENTS FOR
C O N S U LTAN TS/C 4 N TRACTO RS
TJte Offeror's/Bidder's c�tte�ztion is directed to tlae iirsul�a�zce ��eqtrirerne�tts below. It is /aiglzly
�•eco»am.ended tliat offeror�s/bidders co�tfe�• witla tJaeir respective i�tsui�ance carl�ie��s or brolrers
to deter»:ine in adva�ice of its proposal o�� bid s�cbraaissior2 tlie availability of irtsttrarace
certdficates arad efadoisenre�ats as prescribed artd provided Izer�ei�a. If a�z offero�/apparerat loiv
bidr�e�• fails to cor�:ply st�•ictly yvith tlte i�tstn�a�ace regtrir�e�nents, tltat offeror/bidder may be
�lisqicalifietl fi•o�n aivard of tlze contract. Upo�a award, all insairaiace rer,�trirernerats shall
becottte co�ttractt�al obligatio�ts, wl:iclt tlie sttccessfir/ offerof/bidder slrall Itave a drrty to
nr.ai�ztaiia thrarrglaorrt the conrse of tltzs contr�cct.
STANDARD PROVISIONS:
YVitho�at li»ziting ctlay of the other obligations or liabilities of the Conszrlta�at/Co�atr�rctor•, t1�.e
Consacltctnt/CoT�t��actor� S��arr ��°o>>ic�e c��ac� �nai��.taila iaatil t1�e cor�t��actec� tii�orlc Iaas beela con�pleted
nnd accepted b�� tlze Cit�� of Deiiton, Oiv�a.er, t.l�e »zr'nir�xat»a insalr�a�ice cove�°age ccs i�adicated
l�er•ei�zaf�er,
As soo�a as pr•acttcnble after notificatio�z. of alvai•�l, Consatlitt�at/Co�at�•acto�• shczll file with tlie
Pza°chaszizg Depa��t»ae�at satisfactor�� cer�tiftcates of insttr•afzce, contczi�aing the pi•oposc�l/bicl
ni�rnber� and title of the pr�oject. Consultnnt/Co�itractol• �nay, upon written r•ec�a�est to the
Pu�•chasing Depc�r•tment, aslc for clarificatio�a of a�ay insur�cznce rec�uirenaents at any time;
however°, ConsttltantslContractors are strongly advised to mal�e sisch �•eqicests pr�ior to
proposal/bid opeiaing, since the insurance requi�•e�nents may not be modified or waived after
proposal/bic� opening unless a written exceptzon has been submitted with the proposal/bid,
Consultant/Co�ttracior slaall �:ot commence a�:y work or deliver any material u�ztil l:e or slie
receives riotrficatiorz that the contract l:as been accepted, app�oved, and sig�:ed by tlte City of
Dentou.
All insut�ance policies proposed or obtained in satisfaction of these requi�•ements shall corrtply
with the following general specifications, and shall be maintained in corrcplic�nce with these
general specifications throughoict the dur�ation of the Cont�•act, or longer, if so noted:
• Each policy shall be issued by a company authoiized 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 proposa] 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 o�cials, agents, employees and
volunteers; or, the Consultant/Cont�actor shall procure a bond guaranteeing payment of
losses and related investigations, claim adminisnation and defense expenses.
• Liability policies shall be endorsed to provide the following:
• Name as additiozlal insured the City ofDenton, its Officials, Agents,
Employees and voltinteers.
• That such ilisurance is primary to any other insurance availal�le to the
additional insured with respect to claims covered under the policy and that this
insurance applies separately to each insured against wl�onn claim is made or
suit is brought. The inclusion of rnore than one insiued shaIl not ope��ate to
increase the insurer's liznit of liability.
• Ca�icellatio�a: Cit�� reqacit•es 30 day fvriife�a �aotice slaoarld a�aJ� of tlze policies
�lesct•ibed o�: tlte ce��tificate be cancelled or• r�raterr.allj� cha�aged before the
expri�atiori date.
� Should any of the required insurance be provided under a claims-made foi�i,
Consultant/Contractor shall maintain such covez•age continuously throughout
the tei�n of this cont�act and, withont lapse, for a period of tluee years beyond
the contzact expiration, such that occunences arising during the conhact ierm
whicl� give iise to claims n�ade aftex expiration of the contract sha11 be cove�ed.
• Should any of the requiied insurance be provided under a foini of coverage that
includes a general annual aggregate lirnit providing for claims investigation or
legal defense costs to be included in the general annual aggregate limit, the
Const�ltant/Contractor shall either dottble the occuixence limits or obtain
Owners and Cont�actors Protective Liability Insurance.
• Should any requued insurance lapse during the conhact teirn, requests for
paynnents originating after such lapse shall not be pxocessed until the City
receives satisfactozy evidence of reinstated coverage as requued by this
cont�act, effective as of the lapse date. If insurance is not reinstated, City rnay,
at its sole option, terminate this agreement effective on the date of the lapse.
SPECIFIC ADDITIONAL INSURANCE REQUIREMENTS:
All insurance policies p�°opased or obtainecl in satisfaction of this Contract shall additionally
co�nply with the follotiving ma�°l�ec� specifications, and shall be maintained in compliance with
these ac�ditional specifications throughout the duration of the Contract, or longer, if so notecl.�
[X] A. General Liability Insurance:
General Liability insurance with combined single limits of not less than $500,000.00
shall be provided and rnaintained by the Conhactor. 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:
Coverage A shall include premises, operations, products, and completed
operations, independent cont�•actors, conhactual liability covering this
conhact and broad faim propei�ty damage coverage.
Page 13
• Coverage B shall include personal injury.
• Coverage C, medical payments, is not required.
If the Comprehensive General Liability fo��rn (ISO Foim GL 0002 CuiYent Edition
and ISO Fortn GL OA04) is used, it shall include at least:
• Bodily injury and Properry Damage Liability for premises, operations,
products and completed operations, independent contractors and properly
damage resulting fiom explosion, collapse or underground (XCU}
exposures.
• Broad foim contrachaal liabi�ity (preferably by endorsement) covei7ng this
contract, personal injury liability and broad form propei�ty damage liability,
[X] Automobile Liability Insurance:
Conhactor shall provide Comniercial Automobile Liability insurance with Con�bined
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 policias. The policy will include bodily
injury and propez-ty damage liability arising out of the operation, maintenance and use of
all atttomobiles and mobile equipment used in conjunction with this conhact.
Satisfaction of the above xequixement shall be in the fornn of a policy endorsement for:
• any auto, or
• all owned, hired and non-owned autos.
[� Worlcers Compensation Insurance
Contractor sha11 purchase and maintain Worker`s Compensation insurance which, in
addition to meeting the minimurn statutoxy 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 noi 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 t'or any worlc
perforxned for the City by the Named Insured, For bttilding or conshuction projects, the
Cont�actor shall cornply 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 Commussion (TWCC).
[_] Owner's and Contractor's Protective Liability Insurance
The Cont�actor shall obtain, pay for and maintain at all times during the prosecution of
the vvork under this contract, an Owner's and Conhactor's P�•otective Liability insurance
policy naming the City as insured for property damage and bodily injury which rnay arise
in the prosecution of the work oi Contractor's operations under this contract. Coverage
Page 14
shall be on an "occui�-ence" basis, and the policy shall be issued by the same insurance
company that ca.i7-ies tl�e Cont�actor's liability insurance. Policy limits will be at least
combined bodily injury and property damage pex occurrence with a aggregate.
L] Fire Damage Legal Liability Insurance
Coverage is required if Broad foi7n General Liability is not provided or is unavailable to
the contractoz• or if a contractor leases or �•ents a portion of a City building. Limits of not
lessthan each occurrence are required.
[X] Professional Liability Insurance
Professional liability insurance with limits not less tha�� �1,000,000.00 per clainn with
respect to negligent acts, errors or oznissions in connection with professional services is
requi�ed under this Agreement,
[_] Builders' Risk Insurance
Builders' Rislc Insurance, on an All-Risk foim for 100% of the completed value shall be
provided. Such policy shall include as "Named Iusured" the City of Denton and all
subcont�actors as their interests may appear.
[_] Commercial Crime
Provides coverage for the theft or disappearance of cash or checics, robbery inside/outside
the premises, bttrglary of the premises, and employee fidelity. The amployee fidelity
portion of this coverage should be written on a"blanlcet" 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.
[_] AdditionalInsurance
Other insurance may be xequ�red on an individual basis for extra hazardous con�iacts and
specific service agreements. If such additional insurance is required for a specific
contract, that requirement will be desciibed 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. Definiiions:
Certiiicate of coverage ("certificate")-A copy of a cei�tificate of insurance, a
certificate of authoi7ty to self-iiisure issued by the commission, or a coverage
agreeznent (TWCC-81, TWCC-82, TWCC-83, or T'WCC-84), showing statutory
worlcers' compensation insurance coverage for the person's or entity's amployees
providing setvices on a project, for the duratioli of the project,
Duratioii of the project - includes the time fiom the beginning of the worlc on the
project until the cont�actor's/person's work on the project has been completed and
accepted by the goveinmental entity.
Persons providing seivices on the project ("subconnactor" in §406.096) - includes all
persons or entities perfoi�rning all or part of the seYVices the contractor has
undertalcen to perfornz on the project, regardless of whether that person contracted
directly with the contractor and regardless of whether that person has employees.
This includes, withoiit liniitation, independent cont�actors, subconh•acto:ts, leasing
companies, motor cai7tiers, owner-operators, employees of any such entity, or
employees of any entity which fuzciishes persons to provide seivices on the project.
"Seivices" include, without Iimitation, providing, hauling, or delivering equipment or
materials, or providing labor, transportation, or other setvice related to a project.
"Sezvices" does not include activiiies unrelated to the project, such as food/beverage
vendors, office supply deliveries, and delivexy of portable toilets.
B, The contractor sha11 provide coverage, based on pxoper reporting of classification
codes and payroll amounts and filing of any overage agreements, which meets the
statutory requirements of Texas Labor Code, Section 401.411(44) for all employees
of the Contractor providing services on the project, fox the duration of the project.
G The Cont�actor must provide a certificate of coverage to the governmental entity prior
to being awarded the cont�act,
D. If the coverage period shown on the contractor's cun•ent certit"icate of coverage ends
during the duration of the project, the cont�actor must, pi7or to the end of the
coverage pei�iod, fi1e a new certificate of coverage with the gove�.nmental entity
showing that coverage has been extended.
E, The contractor shall obtain fiom each person providing seivices on a pxoject, and
provide to the gove��mental entity:
1) a certificate of coverage, prior to that person beginning work on the project, so the
governmental entity will have ou file certificates of coverage showing coverage
for all persons providing seivices oii the project; and
Page 16
2} no latet� than seven days after receipt by the conhactor, a new certificate of
coverage showing extension of coverage, if tl�e coverage period shown on the
cui7ent cci�tificate of coverage ends during the duration ofthe project.
F. The contractor sha11 retain all required cez�ificates of coverage for the duration of the
project and for one year tliereafter.
G. 'The cont�actor shall notify the governmental entity in wz'iting by certified mail or
personal delivery, within 10 days after the contractox l�new or should have knovtm, of
any change that materially affects the provision of coverage of any person providing
seivices on the project,
H. The contractor sha11 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 requixed to be covered, and stating how
a person rnay verify coverage and report lacic of coverage.
I. The contt•actor shall contrachially require each person with whom it coni�acts to
provide seivices on a project, to:
1) provide covexage, based on proper reporting of classification codes and payroll
anlounts and filing of any coverage agreements, which meets the statutoiy
requixements 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 cont�actor, prior to that person beginning worlc on the project, a
ceifiificate of coverage shovving 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 cont�actox, priox to the end of the coverage period, a new certi�cate of
coverage showing extension of coverage, if the coverage period shown on the
cui�rent certificate of covarage ends during the duration of the project;
4) obtain from each other person with whom it contracts, and provide to the
contractor:
a) certiiicate of coverage, prior to the other person beginning worl� on the
proj ect; and
b) a new certificate of coverage showing extension of coverage, piior 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 a11 required certificates of coverage on file for the duration of the project
and for one year thereafter;
6) notify the goveinmental entity in writing by certified rnail ox personal delivezy,
within 10 days after the person lcnew or should have lcnown, of any change that
materially affects the provision of coverage of any person providing services on
the project; ai�d
Page 17
7) contractually require each person with whom it contracts, to perforan as required
by paragraphs (1) -(7), with the certificates of coverage to be provided to the
person for whom they are providing seivices,
By signing this contxact ot' providing or causing to be provided a certificate of
coverage, the conhactor is representing to the governmental antity that all employees
of the contractor who will provide seivices on the project will be covered by wox'Icezs'
compensaiion coverage for the duration of the project, that the coverage will be based
on pi•oper reporting of classification codes and payroll amounts, and that all coverage
agreements will be iiled with the appropi7ate instuance cay.�.ier or, in the case of a self-
insured, with the comrnission's Division of Self-Insurance Regulation, Providizig
false or misleading infolmation may subject the contractor to administ�ative penalties,
criminal penalties, civil penalties, or other civil actions.
I�. The contractor's failure to comply with any of these provisioils is a breach of contract
by the conhactor which entitles the goveinmental entity to declare the contract void if
the contxactor doas not rernedy the breach within ten days after receipt of notice of
breach fiom the goveinmental ei�tity.
Page 18
CONFL,ICT OF INTEREST QUESTIONNA{RE FORM CIQ
For vendor or other person doing business with local governmental entit
This questionnaire refiects changes made to the law by H.B. 1491, 80Eh Leg., Regular Sessfon. oFFICE USE ONLY
This questionnaire is being filed in accordance with chapter 176 of the Local Government Code by a Date Recelved
person who has a business relationship as deflned 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 176.0o6, Local Government Code.
A person commits an offense if the person knowingly violates Section 176,006, Locai 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 fifing an update to a previously filed questionnaire.
(The law requires that you file an updated completed questlonnaire wlfh the approprlate filing authority not later than the 7�h busfness
day after the dafe the originally flled questionnaire becomes incomplete or inaccurate.)
3
Name of locaf 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 wlth whom the filer has an employment or other business
relat[onship as defined by 5ection 176.001(1-a), Local Government Code. Attach additional pages to lhis Form CIQ as necessary.
A. Is the local government officer named in this section receiving or likely to raceive taxable income, other than invesiment income, from the
filer of the questlonnaire?
� Yes � No
B. Is the filer of the questionnaire receiving or Iikely 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 enOty7
� Yes 0 No
C, Is the filer of this questfonnaire 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 Yes � No
D. Describe each a�liation or business relationship,
4
First S thw t Com
B
Signature of person doing business with the governmental entity Date
Adopled 06YL8l20D7
19
CONFLICT OF INTEREST QUESTIONNAIRE FORM CIQ
For vendor or other person doing business with local governmental entit
This questionnaire reflects changes made to ihe law by H.B. 1491, 80th Leg., Regular Session. QFF�CE USE ONLY
This questionnaire is being filed in accordance with chapter 176 of the Local Government Code by a Date Recelved
person who has a business relationship as defined by Seciion 176.001(1-a) with a(ocal
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 �f 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 governmentai 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 flle an updated completed questionnaire with the appropriate filing authority not later than the 7�h business day
after the date ihe originally filed questionnaire becomes Incomplete or inaccurate.)
3
Name of local government officer with whom filer has an employment or business relatfonship.
� Not applicable
Name of O�cer
This section, (Item 3 including subparts A, B, C& D), must be completed for each officer with whom the ffler has an employment or oiher business
relationship as deffned 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 recelving or likely to receive taxable income, other than investment income, from the
filer of the questionnaire?
� Yes 0 No
E. Is the filer of the questionnafre receiving or likely to receive taxable income, other than Investment income, irom or at ihe direction of the
local government officer named (n this sectlon AND the taxable income is not received from the loca! governmental entity?
0 Yes � No
F. Is the fller of this questionnalre 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 more7
� Yes � No
D. Describe each afflliation or business relationship.
4
First outh st Asset nagement, Inc.
B
Date
Signature of person do g business wiFh the governmental entity •
20 Atlopted 06129120W
Attachment A
FINANCIAL ADVISORY AGREEMENT
Tl�is Financial Advisory Agreement (the "Agreement") is made and entered into by and betwaen
the City of Denton, Texas ("Issuer") and Firsi 5outl�west Company ("FSC") effective as of the date
executed by the Issuer as set forth on the signahire page l�ereof.
WITNESSETH:
WHEREAS, the Issuer will have under consideration from time to time the authorization and
issuance of indebtedness in amounts and forins which cannot presently be deteriilined and, in connection
with the azrtliorization, 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 of FSC to advise tlie Issuer
regarding the issttance and sale of certain evidences of indebtedness or debt obligations tlxat may be
authorized and issued or othei�vvise created or assumed by the Issuer (hereinafter referred to collectively as
the `Debt Instrunients") from time to time during the period in which this Agreement shall be effective;
and
WHEREAS, FSC is willing to provide its professional services and its facilities as �nancial advisor
in connection with all programs of �nancing as may be considered and authorized by Issuer during the
period in which tl�is Agreement shall be effectiva.
NOW, THEREFORE, the Issuer and FSC, in consideration of the mutual covenants and
agreements herein contained and other good and valuahle 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 financzal
advisoxy 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 hareof.
A. Financial Plannin�. At the direcrion of Issuer, FSC shall:
21
1. Survev and Analvsis. Conduct a survey of the fiiiancial resources of the Issuez• to
detennine the extent of its capacity to authorize, issue and seivice any Debt Instruments
contemplated, This suivey will include an analysis of any e�cisting debt shuctiue as
conipared with the existing and projected sources of revemies wl�ich x�xay be pledged to
secure payment of debt seivice and, whete appropriate, will include a study of the trend of the
assessed valuation, taxing power and present and future taxing requirements of the Issuer, In
tl�e event revemies of existing or projected facilities operated by the Issuer are to be pledged
to repaynzent of the Debt Instruments then under consideration, the suivey will take into
account any outstanding indebtedness payable fiom 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 iznprovements to be financed by
the Debt Insh•ui�aents timder consideration.
2. Future Financin�s. Consider and analyze fiiture financing needs as projected by tl�e
Issiiar's staff and cot�sulting engineers or other expeits, if any, employed by the Issuer.
3. Recouunendations for Debt Insh•umeiits. On the basis of the information developed by
tl�e survey described above, and other information and experience available, subnv.t to tl�e
Issuer recoimnei�dations cegarding the Debt Instnunents under consideration, including such
elements as the date of issue, interest payment dates, schedule of principal maturities, options
of prior payinent, security provisions, and sucli other provisions as may be appxopriate in
order to inake the issiie attractive to investors while achieving the objectives of the Issuer.
All xecommendations will be consistent with the goal of designing the Debt Instruments to be
sold on terms which are advantageous to the Issuex, 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 foxthcoming bond issues and general information, with econorz►ic
data, which might normally be expected to influence interest rates or bidding conditions so
that the date of sale of tlxe Debt Instruments may be set at a favorable tinie.
S. Elections. In the event it is necessaiy to hold an election to authorize tl�e Debt
Inshuments then under consideration, FSC will assist iun coordinating the assembly of such
data as may be required for the preparation of necessaiy petitions, orders, resolutions,
ordinances, notices and certiiicates in connection with tl�e election, including assistance in the
transmission of such data to a firm of inunicipal bond attorneys ("Bond Counsel") retained by
the Issuer.
B. Debt Mana�ement and Financial Iniplementation. At the direction of Issuer, FSC shall:
22
1, Metliod of Sale. Evaluate the particular financing being contemplated, giving
consideration to the complexity, inarlcet acceptance, rating, size and sh•uch►re in ordex to
malce a rec�nunendation as to an appropriate n�ethod of sale, and:
a. If tlie Debt Instz•uments are to be sold by an advertised competitive sale, FSC will:
(1) Supervise tlie sale of the DeUt Insti�uments;
(2) Disseininate infonnation to prospective bidders, organize such inforznational
meetings as nlay be necessary, and facilitate prospective bidders' effoi�ts in iizalcing
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 die tabulation and comparison of submitted bids; and
(4) Advise the Issuer regarduig the best bid and provide advice regarding
acceptance or rejection of flie bids.
b. If the Debt Instrun�ents are to be sold by negotiated sale, FSC will;
(1) Reconunend for Issuer's final approval and acceptance one or more investment
baniting firms as nlanagers of an underwi7ting syndicate for the purpose of
negotiating the purchase of the Debt Instruments.
(2) Cooperate with and assist any selected managing undervvriter and their
counsel in connection with their efforts to prepare any Official Statement or
Offexing Memorandum. FSC will cooperate with at�d assist the underwriters in the
preparation of a bond purchase contract, an underwriters agreement and other
related documents. The costs incut7ed in sncli efforts, including the printing of the
documents, will be paid in accordance with the terms of the Issuer's agreement
with the underwriters, but sliall not be or become an obligation of FSC, excapt 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 sucli, and provide a cost comparison, for botl� expenses and
interest whicli are suggasted by flie underwriters, to the then cun•ent market.
23
(4) Advise the Issuer as to the fairness of the price offered by tlie uiiderwriters.
2. Offering Documents. Coordinate the prepfu•ation of the notice of sale and bidding
instrnctions, official statement, official bid Fozni and such other documents as may be
iequired and submit all such docuu7ents to the Issuer for exaniination, approval and
cei�tification. After sucli examinatiozi, approval and certiiication, FSC shall provide the Issuer
witli a supply of all sucli docuinents sufficient to its needs and distribute by mail or, wliere
appropriate, by elect�onic delivery, sets of tlie sa�ne to prospective purchasers of the Debt
Inshuinents. Also, FSC shall provide copies of the final Official Stateu�ent to the purchaser of
the Debt Instivments in accordance with the Notice of Sale and Bidding Instructions.
3, Credit Ratin�s. Make reconunendations to the Issuer as to the advisability of obtaining
a credit rating, or ratings, for the Debt Instruments and, wl�en duected by the Tssuer,
coordinate the prepa�•ation of such inforination as may be appropriate for subinission io the
rating agency, or agencies. In tlxose cases where the advisability of pez•sonal presentation of
infor�liation to the rating agency, or agencies, nlay be indicated, FSC will aixange for sucli
personal presentations, ntilizing such composition of representatives fi�on� the Issuer as may
be finally approved or directed by the Issuer.
4. Tilistee Pavin� A�ent, Registrar. Upon reqiiest, counsel with the Issuer in the selection
of a Trustae and/or Paying Agent/Registrar for tha Debt Instruments, and assist in tlie
negotiation of agreements pertinent to fllese services and the fees incident thereto.
5. Financial Publications. When appropriate, advise financial publications of the
forthconung sale of tl�e Debt Instruments and provide thena with all pertinent inforniation,
6. Consultants, After consulting with and receiving directions fiom the Issuer, arrange for
such reports and opinions of recognized independent consultants as may be appropriate for
the successful markeiing of the Debt Instruments.
7. Auditors. In the event fornial verification by an independent auditor of any calculations
incident to the Debt Instruments is requixed, make arxangements for such services.
8. Issuer Meetin�s. Attend meetings of flie governing body of the Issuer, its staff,
representatives or cormnittees as requested at all tinies when FSC may be of assistance or
service and the subject of �nancing is to be discussed.
9, Printin�. To tlie axtent authorized by the Issuer, coordinate a11 worlc incident to printing
of tl�e offering documents and tlie Debt Instruments.
24
10. Bond Counsel. Maintain liaison witl� Bond Counsel in the preparation of all legal
docutiients pertaining to flie authorization, sale and issuance of the Debt Instruments.
11. Changes zn Laws. Provide 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 tl�at FSC does not and may not act as an attorney foz•, o�' provide
legal advice or services to, tlie Issuer.
12. Deliverv of Debt Instruments. As soon as a bid for the Debt Instruments is accepted by
the Issuer, coordinate tlie efforts of all concerned to the end tliat tl�e Debt Instruinents may be
delivered and paid for as expeditiously as possible and assist the Issuer in the preparation or
veiification of iinal closing figtu�es incident to the delivery of tlie Debt Instnunents.
13. Debt Service Scliedule; Authorizin� Resolution. After the closing of the sale and
delivery of the Debt Instrlunents, deliver to tl�e Issuer a schedule of annual debt service
requireinents for the Debt Instruinents and, in coordination witli Bond Counsel, assure that
the paying agent/regishar and/or hlistee has been provided with a copy of the authorizing
ordinance, order or resolution,
SECTION II
TERM OF AGREEMENT
This Agreement shall become effective as of the date executed by the Issuer as set forth on the
signat�ire page hereof and, unless terminated by either party pursuant to Secnon N of this Agreement,
shall remain in effect thereafter for a period of five (5) yeaxs from such date,
SECTTON III
TERMINATION
This Agreement may be terminated with or without cause by the Issuer or FSC upon the giving of
at least tl�irty (30) days' prior written notice to the other party of its intention to tenlunate, specifying in
such notice the effective date of such termination, In the event of such termination, it is understood and
agreed that only tlie amounts due FSC for services provided and expenses incurred to the date of
teimination �vill ba due and payable. No penalty will be assessed for ternzination of this Agreement.
25
SECTION IV
COMPENSATION AND EXPENSE REIMBURSEMENT
The fees due to FSC for the seivices set forth and described in Section I of tl�is Agceement with
respect to each issi�ance of Debt uishuments during the teinl of this Agreement shall be calculated in
accordance witli the schedule set forth on Appendix A attached hereto, Unless specifically provided
otherwise on Appendix A or in a separate writteiz agreement between Issuer and FSC, sucl� fees, together
with any other fees as may liave been inutually agt•eed upon and all expenses for whicl� FSC is entitled to
reimbursement, sl-►all become due and payable concurrently with the delivery of the Debt Inshuments to
the purchaser.
SECTION V
MISCELLANEOUS
1. Choice of Law. This Agreement sl�all be construed and given effect in accordance with the laws of
the State of Texas.
2. Binding Effect; Assi i�i�ent. This Agreeinent shall be binding upon and inure to the benefit of the
Issuer and FSC, tl�eir respective successors and assigns; provided l�owever, neither party hereto may
assign or transfer any of its �ights or obligations hereunder without tl�e prior written consent of the other
party.
3. Entire A eement. This instrument contains the eniue agreement between the parties relating to
the rights lierein granted and obligations harain assuined. Any oral or written representations or
modifications concerning this Agreement shall be of no force or effect except for a subsequent
modification in writing signed by all parties hereto.
FIRST SOUTHWEST COMP
By:
David I. Medanich, Vice Chairman
�� �����..�I—�
By: C�" " w ✓
Laura Alexander, Senior Vice President
26
`�_�\ � �� � � �� �i���L
_ �
� ' 1 —
27
CITY OF DENTON, TE�AS
�y,
Title: �C7�//✓G l//TY �/1�f�C��
Date:_ � �� / /2 D/2
APPEND]X A
The fees due FSC will not exceed those contained in the fee schedule as listed below.
Base Fee — Any Issue $25,0�0
Plus $1.00 per 1,000 Bonds
The charges for ancillary services, zncluding o£ficial statement printing, shall be levied only for those
services which are reasonably necessary in coznpleting the transaction and which are reasonable in
amount, unless such charges were incurred at the speci�c direction o:f the Issuer,
Tlae payrtze�at of claa�ges foi• firaa�acial adviso�y services descr°ibec� ir� Sectio�a I of tlze foregoi�a.g Agreenze�z.t
slaall be co�ztinge�at upor7 the deli.ve�y of bo�icls arad slzall be clice at tlae tiT�ae tlaat bo�zds m•e delivered.
The Issuer shall be responsible for the following expenses, if and vrk�en a�plicable, whether they are
charged to the Issuer directly as expenses or charged to the Tssuer by FSC as reimbursable expenses:
Bond counsel
Bond printing
Bond ratings
Credit enhancement .
� CPA fees for refunding
Official statement printing �
Paying agent/regish'ar/trustee -
Travelexpenses
Undervvriter and underwriters counsel
Miscellaneous, including copy, delivery, and phone charges
T7ie pay�lzeTat of ��ei»abursable ezpe�tses tlzat FSC lias assur�zed o�a belzalf of tlie Issuer• slaall NOT be
colttirzgent upon the delive�y of bonds and slaall be c�ue at tlae time tlzat services a�•e �•e�zcle��ed and paya�ile
upon recetpt of a�i i�avoice therefor subrnitted by FSC.
Page 28
Attachment B
AGREEMENT
FOR
CONTINUING DISCLOSURE SERVICES
SY AND BETWEEN
CITY OF DENT�N, TEXAS
(HEREINAFT�R REFERR�D TO AS THC "ISSU�R"�
AND
FSC CONTINUING DISCLOSURE SERVICES,
A DIVISION OF FIRST SOUTHWEST C�MPANY
In connection with the sale and deliveiy of certain bonds, notes, cei�tificates, or other municipal
obligations (the `Bonds"), the Issuer has rnade ceitain undertalcings to disclose to the investing
public, on a periodic and continuing basis, certain information, as more fully set forth in such
undertalcings and as contemplated by the provisions of Securities and Exchange Coinmission Rule
15c2-12, as amended (the "Ru1e").
The Zssuer has agreed to engage FSC Continuing Disclosure Services, a Division of First Southwest
Con�pany ("Continuing Disclosure Services"), to assist it with these continuing disclosure
obligations, for the consideration and on the terzns and conditions set foi-th herein, including the
preparation and submission �f annual reports (the "Annual Reports") and the reporiing of certain
speci�ed events (the "Events"), which are set forth in the Issuer's undertakings, the Ru1e and in
Sttbsection 2c, below.
This agreement (the "Agceement") between the Issuer and the Continuing Disclosure Services shall
become effective as of 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 zssue does not qualify for exceptions to the continuing disclosure requirements of
the Rule,
2. Continuing Disclosure Services agrees to perform the £ollowing in connection with providing
services ralating 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;
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 o f applicable issues, and notices concerning the occurrence
of the specified Events and other items listed below:
Page 29
1) Pz•incipal and interest �ayment delinquencies
2) Non-payment related defaults
3} Unscheduled draws on debt service reserves reflecting financial
dif� culties
4) Unscheduled draws on credit enhancements reflecting financial
difficulties
5) Substitution of credit or liqtiidity providers, or their failure to perform
6) Adverse tax opinions or events 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) The zssuance by the IRS of proposed or final determinations of
taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other
material notices or deterniinatiot�s with respect to the tax status of the
secuxzties of the Issuer
13) Tender offers
14) Sankruptcy, insolvency, receivership or similar proceeding
15) Mergers, consolidaiions, acquisitions, the sale of all or substantially all
of the assets of the obligated person or their termination
16) Appointment of a successor or additional htilstee or the change of the
name of a h-ustee
17) Noncompliance with tha Rule
d, assist the Issuer in dist�•ibuting or �iling, in the Issuer's name, the above mentioned
Annual Reports, notices and audited annual financial statements to the Nationally
Recognized Municipal Securities Information Repository ("NRMSIR"), which is the
Municipal Securities Rulemaldng Board ("MSRB"), appropriate State Information
Depositozy ("SID"), rating agencies, and other entities, as required by the Issuer's
continuing disclosure obligations.
e. provide to the Issuer con�irmation of distribution or dissemination o£ reports and
notices,
3. Issuer aclrnowledges and agrees to the following;
a. Continuing Disclosure 3ervices 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:
1} $2,500 per year for assistance in preparation and distribution of each
annual report and assistance in distributian of audited annua] financial
statements, if Issuer is exempt from requirements other than filing with
the SID, ox
$3,500 per year for assistance in preparation and distribution of each
annua] report and assistance in distribution of audited annual financial
statements, if Issuer is not exempt $•om �iling reports with the SID and
NRMSIR, plus
Page 30
2) $100 minimum fee for assistance in preparation and distribution of each
notice conceining occurrence of an Event or noncompliance with the
Rule; in addition, a fee of $125 per hour for all time in excess of �ve (5}
hours spent in assisting with preparation and distribution of each notice
concerning occurrence of an Event or noncompliance witl� the Rule.
Issuer will provide to Continuing Disclosure Seivices, and Continuing 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
undertalcing regarding continuing disclosure as contained in the resolution
authorizing issuance of the Bonds or separate contract or agreenient; annual �'inancial
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 infoimation necessaiy to prepare continuing disclosure reports.
c. Issuer wi11 provide to Continuing Disclosure Seivices, and Continuing 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 Continuing 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 infornlation deemed
necessaiy by Issuer, no later than 45 days piior to the date on which each Annual
Report is due.
e. Issuer will provide full and complete copies of the audited annual �nancial statement
no later than ten (10) days prior to the date on which it is due,
f, Issuer will notify Continuing Disclosure Services immediately upon the occurrence
or immediately upon the Issuer's Icnowledge of the occun•ence of each Event or
noncompliance with the Rule, and the Issuer wi11 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. The Issuer sha11 review and provide approval of the content and form of all
continuing disclosure reports and notices, with the exception of the following, which
will be filed automatically on the Issuer's behalf, unless the Issuer has noti�ied
Continuing Disclosure 5ervices otherwise in writing: bond calls, defeasances, and
rating changes, In the event of a disagreement between the Tssuer and Continuing
Disclosure Services regarding the disclosure to be made, either the Issuer or
Continuing Disclosure Services may, but neither is obligated to, terrninate this
Agreement by written notice to the other party.
h. A separate Annual Report will be pxepared and distributed for each type of security
pledge in e:ffect for outstanding financing issues or Bonds of the Issuer.
i. Issuer will inform Continuing 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 Co:ntinuing Disclosure Services and the Issuer determine that advice of
counsel is appropriate with respect to any question concerning disclosure, then (i) the Issuer
may consult with its counsel, or (ii) the Issuer may authorize Contirnting Disclosure Services
Page 31
to seelc legal advice fiom independent counsel regarding the disclosure. The Issuer agrees
that it shall be responsible frn' the fees and expenses of its own counsel. The Issuer agrees to
reimburse Continuing Disclosure Services the fees and expenses of independent counsel, if
paid by Continuing Disclosure Services, for advice rendered purstiant to autho�ization by the
Issuer.
5. The Issuer agrees to hold harmless and to indemnify Continuing Disclosure Services and its
employees, a�liates, officers, directors, and agents from and against any and all clairns,
damages, losses, liabilities, reasonable costs and expenses whatsoever (including attorneys'
fees and expanses) which Continuing Disclosure Services may incur by reason of or in
connection with the distribution of inforniation in the disclosure reports in accordance with
this Agreement, except to the extent such claims, damages, losses, liabilities, costs and
expenses result directly from Continuing Disclosure Seivices' willful misconduct or gross
negligence in the distribution of such information,
In order to provide for just and equitable contribution, if a claim for indemniiication pursuant
to the _foregoing indemnification provision is made, but it is determined in an appropriate
proceeding that such indemniffcation may not be enforced, even though the express
provisions hereof provide for indemnification in such case, then the Issuer, on the one hand,
and Continuing Disclosure Services, on the other hand, shall contribute to the clairns,
damages, losses, liabilities, costs and expenses #o which Continuing Disclosure Services may
be subject in accordance with the relative benefits received by Issuer, on the one hand, and
Continuing Disclosure Services, on the other hand, and also the relative fault of Issuer, on the
one hand, and Continuing Disclosure Seivices, on the other hand, in connection with the acts
or omissions which resulted in such claizns, damages, losses, liabiliiies, costs or expenses;
and relevant equitable considerations shall also be considered. Notwithstanding the
foregoing, Continuing Disclosure Setvices, shall not be obligated to contz'ibute any amount
hereunder that exceeds the amount of fees previously received by Continuing Disclosure
Services pursuant to this Agreement.
6, The fees and expenses due to Continuing 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 duning the tertn of the Agreement, unless terminated
earlier, and fees will be payable within 30 days of receipt of invoice, except that the fees for
the �rst year's service wi11 be invoiced and be payable upon acceptance of this Agreement.
In addition, the Issuer agrees to reimburse Continuing Disclosure Services for the following
expenses: (i) legal fees and expenses of counsel incurred by Continuing Disclostue Services
pursuant to the terms of Saction 4. above, and (ii) other out-of-poclLet expenses reasonably
incurred by Continuing Disclosure Services in performing its obligations hereunder, The
Issuer shall remit payment for expenses to Continuing Disclosure Services within 30 days of
receipt of invoice.
Bonds Issued Subsequent to Agreement: The provisions of this Agreement will include
additional municipal bonds and �nancings (including �nancing 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 Tssuer will notify
Continuing Disclosure Services of any municipal bonds and financing (including financing
lease obligations) issued by the Issuer during any fiscal year of ihe Issuer during the ternl of
this Agreement, and will provide Continuing Disclosure Seivices with such information as
shall be necessary in order for Continuing Disclosure Services to perfoinl the services
contracted for hereunder.
Page 32
Effective Dates of Agreement: This Agreement shall become effective as of 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. This agreement may be teiminated with or without
cause by the Issue�' or Conti�tting Disclosure Services upon thirty (3�) days' written notice to
the other party. Tn the event of such termination, it is understood and agreed that only the
amoimts due to Continuing Disclosttre Seivices for seivices provided and expenses incurred
to and including the date of teiYnination will be due and payable. No penalty will be assessed
for tei7nination of this Agreement. In the event this Agreement is terminated prior to its
stated term, all records provided to Contintiing Disclosure Services by the Issuer shall be
x•etumed to the Issuer as soon as practicable. In addition, the parties hereto agree that upon
tei7nination of this Agreement Continuing Disclosure Services shall have no continuing
obliga#ion to the Issuer regarding any service contemplated herein. Notwithstanding the
foregoing, all indemnification, hold harmless and/or conttibution obligations, pursuant to
Section 5 of this Agreement, shall survive any termination, regardless of whether the
termination occtiz•s as a xesult of the expiration of the tei�n hereof or the Agreement is
terminated sooner by either the Issuer or Continuing Disclosure Servicas under this Section 8,
pursuant to Subsection 3, g., or otherwise.
Provision of Notices
Provision of inforniation, delivery of certification and notices of Events and noncompliance
rvith the Rule, unless directed otherwise in tivriting, shall be sent to:
City of Denton, Texas
215 East McKinney
Denton, TX 76201
Bryan Langley
Chief Financial Officer
Phone: (940) 349-8224
Fax: (940) 349-72U6
Exnail; Bryan.Langley@cityofdenton.com
FSC Continuing Disclosure Services,
a Division of First Southwest Company
325 North St. Paul Street, Suite 800
Dallas, Texas 75201
Attention: Julie James
Vice President for Continuing Disclosure
Phone: (214) 953-8701
Fax: (214) 953-4050
Email: julie james@firstsw.com
Acceptance of Agreement
9. This Agreement is submitted in duplicate originals. When accepted by the Issuer, it will
constitute the entire Agreement between the Issuer and Continuing Disclosure Services for the
puiposes and the consideration specified above,
Acceptance will be indicated on all co�es and returr►ed to Continuing Disclosure Services. An
executed ori�inal wi11 be returned for votu files.
Page 33
Respectfully submitted,
FSC Continuing Disclosure Seivices, a Division of
First Southwesf Company
� �
By
Hil] A, Feinberg
Chairnian and Chi Executive Officer
By ,G�
J ' ame
ce Presi
Date
ACCEPTANCE CLAUSE
The above and fore�oing is hereby in all things accepted a1Zd approved by the City of Denton, Texas,
on this the �/'� day of �/ 2 12.
By
A orized epz'esentative
�Ieri�G L��i v /Ylfl�v���
Tit1e
Page 34
Attachment C
AGRE�MENT FOR
ARSITRAGE REBATE COMPLIANCE SERVICES
B�TWEEN
CITY O�' DENTON, T�XAS
(Hereinafter Referred to as the "Issuer")
AND
FIRST SOUTHWEST ASSET MANAGEMENT, INC.
(Hereinaftei• Referred to as "Fi��st Sonthwest")
It is understood and agreed that the Issuer, in connection with the sale and delivery of cei�tain bonds,
notes, cei�.ificates, or otliez• tax-exeinpt obligations (the "061igrrtions"), will have the need to determine to
what extent, if any, it will be required to rebate cei�tain investment earnings (the amount of such rebate
beixig referred to l�erein as tlie "Ar�bit►�age A�rrointt") from �lie pz•oceeds of the Obliga�ions to the United
States of America pursuant to the provisions of Section 148(�(2) of the Interna] Revenue Code of 1986,
as amended (the "Code"). For purposes of this Agreement, the ternl "Arbitrage Aniount" includes
paynients made under tlie election to pay penalty in lieu of rebate for a qualified construction issue imder
5ection 148(�(4) of the Code.
We are pleased to subinit tlie followii�g proposal for consideration; and if tl�e pz•oposal is accepted by the
Issuer, it sl�all become the agreement (the "Ag1^eemetrf') between the Issuer and First Soutl�west effective
at khe date of its acceptance as provided for herein below.
This Agi•eemeiit shall apply to all issues of tax-exempt Obligatioiis delivered subsequent to the
effective date of fihe rebate requireinents under the Code, except for {i) issues which qualify for
exceptio�is to the rebate requirements in accordance with Section 148 of the Code and related
Treasury regulations, or (ii) issues excluded by tlie Issuer in �vriting in accordance with the
fiu-ther provisions l�ereof, (iii) new issues effected in a fashion whereby First Southwest is
unaware of tlae existence of such issue, (iv) issues in which, for reasons outside the control of
First Soutliwest, First Southwest is unable to procure the necessary information requirad to
perforni such sarvices,
Covenants of First Soathwest
We agree to provide oiu professional services in deternuning Yhe Arbittage Amount with regard
to the Obligations. The Issuex will assume and pay the fee of Fixst Southwest as such fee is set
out in Appendix A attached hereta. First Southwest shall not be responsible £or any extraordinary
expenses incurred on behalf of Issuer in connection with providing such professional seivices,
including any costs incident to litigation, mandamus action, test case or other similar legal
actions.
We agree to perform the following duties in connection witli providing arbitrage rebate
compliance services:
a, To cooperate fully with the Issuer in reviewing the schedule of investments made by tlie
Issuer with (i) proceeds from the Obligations, and (ii) proceeds of other funds of the
Issuer which, under Treasury Regulations Section 1.148, or any snccessor regulations
thereto, are subject to the rebate requirements of the Code;
b. To perform, or cause to be performed, consistent with the Code and the regulations
promulgated thereunder, calculations to determine the Arbitrage Ainount nnder Section
148(�(2) of the Code; and
c. To provide a report to the Issuer specifyittg the Arbitrage Ainonnt based upon the
investment scliedule, the calcizlations of bond yield and investment yield, and aiher
Page 35
information deemed relevant by First Sottthwest. In undei�taking to provide the services
set forth in paragraph 2 and tlais paragraph 3, First Southwest does not assume any
responsibility for any record retention requiren�ents wl�ich the Issuer may have under the
Code or other applicable laws, it being understood tiiat the Issuer s11a11 remain responsible
for conlpliance with any such record retention requirements.
Covenants of the Issuer
4. In connection witl� tlle perforniance of tlie aforesaid duties, tl�e Issuer agrees to tlie following:
a. Tlle fees due to First Soutliwest in providing arUitt•age rebate conipliance seivices shall be
calculated in accordance witla Appendix A attached hereto. The fees will be payable
upon delivery of the report prepared by First Soutl�west for each isstte of Obligations
during the terin of this Agreement.
b. The Issuer will provide Firsi Southwest all information regarding the issuance of the
Obligations and the uiveshnent of the proceeds therefroni, and any other infornZation
necessary in coni�►ection witli calculating the Arbitz'age Ai�zotmt. First Southwest will rely
on the inforination supplied by tUe Issuer withflut inqni�y, it being understood tliat First
Southwest will not conduct an audit or take any other steps to verify the accuracy oz•
authenticity of the information provided by the Issuer.
Tl�e Issuer will notify First Southwest in wiiting of the retirement, prior to tl�e scheduled
maturity, of any Obligatio�as included under tlie scope of this Agreeinent within 30 days
of such retirement. This notification is required ta provide sufficient tinie to comply with
Treasury Regulations Section 1.148-3(g) which requizes final payment of any Arbitrage
Amount within 60 days of the final retiiement of tl�e Obligations, In the event the Issuer
fails to notify First Southwest in a tiulely manner as provided hereinabove, First
Southwest shall have no further obligation or responsibility to pravide any services under
this Agreement witl� respect to such retired Obligations.
5. In providing tl�e services set forth in this Agreeinent, it is agreed that First Southwest shall not
incur any liability for any error of judgment made in good faith by a responsible of�cer or
officars thereof and, except to the litnited extent set forth in this paragraph, shall not incur any
liability fox any other en•ors or onnissions, unless it shall be proved that such error or omission
was a result of the goss negligence or willful misconduct of said officer or of�cers. In the event
a payment is assessed by the Inteinal Revenue Service due to an error by First 5outhwest, the
Issuer vc+ill be responsible for paying the correct Arbitrage Amount and First SouthwesYs liability
shall not exceed the amount of any penalty or inteiest imposed on the Arbitrage Ainour►t as a
result of such error,
Obligations Issued Subsequent to Initial Coniract
6, The seivices conhacted for iuider tl�is Agreement will autoniatically extend to any additional
Obligations (including financing lease obligations} issued during the term of this Agreement, if
such Obligations are subject to the rebate xequirements under Section 148(fl{2) of the Code. In
connection with the issuance of additional Obligations, the Issuer agrees to tlie following;
a. The Issuer will noti£y or cause the noti�ication, in writing, to First Southwest of any tax-
exempt �nancing (including financing lease obligations) issued by the Issuer during any
calendar year of tliis Agreement, and will provide Fust Southwest with such information
regaz•ding such Obligations as First Southwest may request in connection with its
performance of the arbiU:age rebate seivices contracted for hereunder. If such notice is
not provided to First Southwest with regard to a particular issue, First Southwest sha11
have no obligation to provide any services hereunder with respect to such issue,
Page 36
b. At the option of the Issuer, any additional Obligations to be issued subsequent to tlie
executioii of this Agreement n:�ay be excluded :fi•oni the services provided for herein. In
order to exclttde an issue, the Issuer naust notify First Soutlxwest in writii�g of theu intent
to exchide any specific Obligations fi•om the scope of this Agreement, wl�ich exclusion
shall be permanent for the full life of the Obligations; and after receipt of sucl� notice,
First Southwest shaIl 11ave no obligation to provide any services under this Agreeiiient
with respect to such excluded Obligations.
Electfon to Pay Penalt,y in Liea of Rebate
7. The services contracted for under this Agreeinent will auto�natically extend to any additional
financing obligations issued during the stated term of this Agreement, if an election was niade
(prior to delivery of the Obligations) to pay penalty in lieu of rebate for a quali�ad construction
bond issue under Section 148(�(2) of the Code. In connection with extending the scope of this
Agreement to inchide computations of penalty, the Issuer agrees to the following:
a. The Issuer �vill notify First Southwest of any financing obligations issued by the Issuer
dnring aziy calendar year of this Agceement for which a penalty election was made, Tlie
Isstter will provide First Southwest with such information xegarding the inveshnent and
expenditure of such obligations as First Southwest deems necessary in connection with its
perforniance of the penalty calculation seivices conh•acted for hereunde�•,
At the option of tlie Issuer, any additional financing obligations issued subsequent to tlie
execution of this Agreeinent niay be exchided froni the services provided for herein, Tl�e
Issiier must notify First Southwest in tivriting of its intent to eYClude any specific
financing obligations froni the scope of this Agreement.
Effective Date of Agreement
8. Tl�is Agreement shall beconie effective at the date of accepiance by the Issuer as set out herein
below and xernain in effect thereafter for a period of five (5) years from the date of acceptance,
provided, however, that this Agreement may be tei7ninated with or without cause by the Issuer or
First Southwest upon thirry (30) days prior written notice to tha other party. In the event of such
termination, it is understood and agreed that only the amounts due to First Southwest for services
provided and extiaordinary expenses incuired to and including the date of termination will be due
and payable. No penalty will be assessed for terinination of this Agreement. In the event this
Agreement is ternvnated prior to tha coxnpletion of its stated term, all records provided to First
Southwest with respect to the investment of monies by the Issuer shall be reiuined to the Issuer as
soon as practicable following written request by Issuer. In addition, the parties hareto agree that,
upon termination of this Agreement, First Southwest shall have no continuing obligation to the
Issuer rega�•ding any arbitrage rebate related services contemplated herein, regardless of whether
such services have previously been undertalcen, completed or performed,
Acceptance of Agreement
9. 'I'lxis Agreement is submitted in duplicate originals. When accepted by the Issuer in accordance
with the terms liereof, it, together with Appendix A attached hereto, will constitute the entire
Agreement between the Issuer and First Sotttltwest for the puiposes and the consideration herein
speci�ied. In order for this Agreement to beconie effective, it must be accepted by tl�e Issuer
witlain sixty (60) days of the date appearing below elie signature of First Southwest's authorized
representative l�ereon. After the expiration of such 60-day period, acceptance by the Issuer shall
only become effective upon delivexy of written aclrnowledgement and reaffirmafion by Fu•st
Southwest that tlle terms and conditions set forth in tlus Agreement remain acceptable to First
Soutliwest.
Page 37
Go��erning Law
10. Tliis Agreeinent will be governed by and constiued in accordance with the laws of the State of
Texas, without regard to its principles of coi�flicts of laws.
Acceptance will be indicated on both copies and the return of one executed couv to First Southwest.
Respectfully subinitted,
FIRST SOUTHWEST ASSET MANAGEMENT, INC,
�
�
By
Hill A. Feinberg, Cl�airman, Cl�ief Exe e Officer
Date
ISSUER'S ACCEPTANCE CLAUSE
The above and foregoing is hereby in all things accepted and approved by
(�/T�/ D� �� /_.�_To__�, %��1` , on tlais the Z��l� day of � , 2Q12•
By
Aut rized resentative
Title /� C� Ti �/CT �/ n/ /l��Nl9 (���_
Printed NameJT �I/�/1 T1G�11�
Page 38
APPENDIX A — FEES
The Obligations to be covex•ed initially uiider this conh�act include all issues of tax-exempt obligations delivered
subsequent to the effective dates of the rebate requirements, under d�e Code, except as set forth in 5ection I of the
Agreement.
The fee for any Obligatioi2s under this conhact shall only be payable if a computation is required under Section
148(fl(2) of the Code. In the event that any of the Obligations fall within an exclusion to the computation
requuement as defiiied by Section 148 of the Code or related regulations and no calculations were requi�•ed by
First Southwest to make that detetmination, no fee will be charged for such issue. For example, cei�tain
obligations are excluded fi•om the rebate com�utation requirement if the proceeds are spent within specific time
periods. In the avent a particular issue of Obligations fiil�lls the exclusion reqnirements of the Code or related
regulations, the speciiied fee will be waived by First Southwest if no calculations were required to malce the
deteimination.
First Southwest's fee for arbitrage rebate services is based upon a fixed annual fee per issue. The aunual fee is
charged based upon the nwnber of years that proceeds exist subject to rebate fi•om the deliveiy date of the issue
to the computation date.
Fust Soutliwest's fees are payable ttpon delivery of the repoit. The first report will be made followu�g oiie year
froni the date of delivery of the Obligations an.d on each computation date thereafter during the term of the
Agreement. The fees for computations of the Arbitrage Amonnt which encompass more, or less, thaii one
Computation Year sllall be prorated to reflect the longer, or shorter, period of work perFormed during that period.
The fee for each of the Obligations included in this cont��act shall be based on the table below.
Additionally, due to significant iime saving efficiencies realized �vhen investment informatiov is
submitted in an electronic format, First Southwest p�sses the savings to its clients by offering a 10%
reducflon in its fees if' information is provided in a spreAdsheet or electronic text �ile format.
Descri tion AnuualI'ee
ANNUAL FEE $1,40
COMPXEHENSIVE AXBl"TI{AGE CDAIPLIAIVCE SERVICES INCLUDE:
• Conuningled Funds Analysis & Calculations
• Spending Exception Analysis & Calculations
• Yield Restriction Analysis & Calculations
(for yield restricted Project Funds, Reserve Funds, Escrow Funds, ate.)
• Parity Reserve Fund Allocations
• Transferred Proceeds Calculations
• Universal Cap Calculations
• Debt Service Fund Calculations (including earnings test when required)
• Preparation of all Required IRS Paperworlc for Malcing a Rebate Payment / Yield INCLUDED
Reduction Payment
• Retention of Records Provided for Arbibrage Computations
• IRS Audit Assistance
• Dalivery 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
OTFI�R SERVICES AVAILABLE:
IRS Refund Reqtiest — Update calculation, prepare refi�nd request pacicage, and assist issuer as $750
necessary in responding to subsequent IRS InfoiYnation Requests
Commercial Paner Calcul�tions — Per allocated issue $L600
Page 39
EXPLANATION OF TERMS:
a. Computafion Year: A"Computation Year" represents a oile year period froin the deliveiy date of
the issue to the date that is one calendar year after t1�e delivery date, and each subsequent one-year
period tliereafter. Therefore, if a calculation is required that covers more than one "computation
yeat•," the annual fea is multiplied by the nunlber of computation years c�ntained in the calculation
being perfornied, If a calculation includes a portion of a coinputation year, i.e., if tl�e calculation
inchtdes 1'/z computation yeat�s, flien flie 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 (corruna delimited text prefened) with the date, description, dollar amount, and an
activity code (if not in debit and credit foi7nat) on the same line in tlie file.
c. Vaa�iable/Floating Rate Bond Issues: Special seivices are also required to perform the arbitrage
rebate calculations for variable rate bonds. A bond is a variable rate bond if tl�e interest rate paid
on tlie bond is dependent upon an index which is subject to changes subsequent to the issuance of
the bonds. The coinputationa] reqturements of a variable rate issue are more coinplex tl�an tliose
of a fixed rate issue and, accordingly, require significantly more tiine to calculate. The additional
coinplexity zs primarily related to the cornputation of the bond yield, which inust be calculated on
a"bond year" basis. Additionally, the regulations pz•ovide certain flexibility in coi�lputing tlie
bond yield and detei7nining the arbit�age amount over tlie first IRS reporting period;
cot�sequently, increased calculations are required to deternune which bond yield calculation
produces the lowest arbih�age ainount.
d. Commingled Fund Allocations: By de�nition, a coznnvngled fund is one that contains either
proceeds o£ inore than one bond issue or proceeds of a bond issue and non-bond proceeds {i.e.,
revenues) of $25,000 or niore. The arbitrage regulations, while permitting the coirnningling of
funds, require that the proceeds of the bond issue(s) be "carved out" for purposes of dete��nuning
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. Pei�xnitted "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 Sonthwest uses one of the applicable safe-harbor methods
when doing these calculations.
e. Debt Service Reserve Funds: The authorizing documents for many revenue bond issues require
that a separate fund be established (the "Reserve Fund") into whicl� either bond proceeds or
revenues are deposited in an amount equal to some desiguated level, such as average annual debt
service on all paxity bonds. This Reserve Fund is established for the benefit of the bondholders as
additional sectu7ty for payment on the debt. Ir� most cases, the balance in the Rese�ve Fund
reinains stable throughoui tlie life of the bond issue. Reserve Funds, whether funded with bond
proceeds or revenues, must be included in all rebate calculations.
f. Debt Service Fund Calculaiions: Issuers are required under the regialations to analyze the
invested balances in their debt service funds annually to deteixnine whether the fund depletes as
required during the year and is, therefore, "bona fide" (i.e., potentially exempt from rebate in that
year). It is not uncommon for suzplus balances to develop in the debt service fund that services an
issuer's tax supported debt, particularly due to timing differences of when the funds were due to
be collected versus wl�en the :funds were actually collected. First Southwest performs this forn�al
analysis of the debt seivice fund and, should it be determined that a surplus balance exists in the
fund during a given year, allocates the surplus balance among tlie various issues serviced by the
fund in a manner that is acceptable under IRS review.
g. Earnings Test far Debt Service Funds: Certain types of bond issues require an additional level
of analysis for the debt seivice fund, even if tlle fitnd depletes as required under the regulations
Page 40
and is "bona fide." For short-terin, fixed rate issues, private activity issues, and variable rate
issues, the regulations require that an "eaimings test" be perfoi7ned on a bona fide debt service
fiind to determine if tlie interest earnings reached $100,000 during the year. In cases where tlie
earnings reach or exceed tl�e $100,000 tlu•esliold, tlie entire fiind (not just the surplus or residua]
portion) is subject to rebate.
h. Transfe��red Proceeds Calculations: Wl�en a bond issue is refinanced (refunded) by another
issue, special seivices relating to "transfened proceeds" calculations may need to be perfornied.
Under the regulations, when proceeds of a refunding issue are used to retire principal of a prior
issue, a pro-rata portion of the unspent proceeds of the prior issue becon�es subject to rebate
and/or yield restriction as transferred proceeds of tl�e 1'efunding issue. The refunding issue
essentially "adopts" the unspent proceeds of tlie prior issue for purposes of the arbitrage
calculations. These calculations are required under tl�e regulations to ensure tliat issuers continue
to exercise due diligence to complete the project(s) for which the prior bonds were issued,
Universal Cap: Cuirent regulations provide an overall linutation on tlie ainount of gross
pxoceeds allocable to an issue. Siinply stated, tlie value of inveshnents allocated to an issue
cannot exceed tlie value of all ontstanding bonds of the issue. For example, this situation can
occur if an rssuer encounters signif'icant construction delays or enters into litigation with a
contractor. It may take nionths or even years to resolve the problems and begin or resume
spending the bond procaeds; however, during this tin�e the debt seivice paynzents are still being
paid, including any scheduled principal payinents. Thus, it's possible for the value of tlie
investments purchased with bond proceeds to exceed the vahie of the bonds outstanding, In such
cases, a"de-allocation" of proceeds may be requu•ed to coinply witlx the liniitation ivles outlined
in the regulations.
j, Yield Restriction Analysis/Yield Redaction Computations: Tlie IRS shongly encourages
issuers to spend the proceeds of each bond issue as quicicly as possible to achieve the
governmental purpose for which the bonds were issued. Certain types of proceeds can qualify for
a"teinporaiy period," during which time the proceeds may be invested at a yield higher than the
yield on the bonds without jeopardizing the tax-exeinpt status of the issue, The most conunon
temporary period is the three-year temporary period for capital project proceeds. A#ter the end of
the temporary period, the proceeds must be yield reshicted or the issuer must xenut the
appropriate yield reduction payment when due. First Southwest perfoi7ns a comprehensive yield
rest�7ction analysis when appropriate for all issues having proceeds remaining at the end of the
applicable temporary period and also calculates the amount of the yield reduction payment due to
the IRS.
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