BHPFC Resolution No. 5A RESOLUTION OF THE BOARD OF DIRECTORSTHE BAYTOWN
HOSPITALITY LIC FACILITIES CORPORATION AUTHORIZING A
MUNICIPAL ADVISORYI L P SECURITIESINC.; AND
PROVIDINGO THE EFFECTIVE DATE THEREOF.
BERESOLVED BY THE BOARDCTO OF THE BAYTOWNITY
PUBLIC FACILITIES CORPORATION:
Section l: That the Board of Directors of the Baytown Hospitality Public Facilities
Corporation hereby authorizes a Municipal Advisory Agreement with Hilltop Securities Inc. A copy of
said agreement is attached hereto as Exhibit "A" and incorporated herein for all intents and purposes.
Section 2: This resolution shall take effect immediately fro and after its passage by the
Board of Directors of the Baytown Hospitality Public Facilities Corporation.
INTRODUCED, and PASSED by the affirmative votepofhoard of irectors of the
ayto ospitality Public Facilities Co oration, this the 7`h of or, 2019.
C Y, Vice President
E
s
BRYSCH, Assis Secretary
APPROVEDT ®«'
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ACIO RAMIREZ, SR., G n ra Counsel
�iCO FSOI'`4.Legal; aren,FilestCity Council\PFC%Resolution\2014'November 7 unicipalAdvisoryAgreement illtopSecurities.doc
Exhibit "A"
HilitopSecurities
M11t a ttoldh s Company.
MUNICIPAL ADVISORY AGREEMENT
This Municipal Advisory Agreement (the "Agreement") is made and entered into by and between
Baytown Hospitality Public Facilities Corporation (the "Issuer") and Hilltop Securities Inc.
("Hilltopecuritics"), and is dated, and shall be effective as of, the date executed by the Issuer as set forth
on the signature page hereof (the "Effective ate").
WITNESSETH:
WHEREAS, the Issuer will have under consideration from time to time the authorization and
issuance of municipal securities, including but not limited to the issuance and sale of evidences of
indebtedness or debt obligations that may currently or in the future be authorized and issued or otherwise
created or assumed by the Issuer, in amounts and forms which carina presently be deters -nine ; and
WHEREAS, in connection with the authorization, sale, issuance and delivery of such municipal
securities, as well as in connection with any matters relating to municipal financial products of the Issuer,.
the Issuer desires to retain a municipal advisors and
WHEREAS, the Issuer desires to obtain the professional services of HilltOPSCCUrities as a
municipal advisor to advise the Issuer regarding the issuance of municipal securities and any municipal
financial products, all as more fully described herein, during the period in which this Agreement shall be
effective; and
WHEREAS, HilltopSecurities is willing to provide its professional services and its facilities as a
municipal advisor in connection with the Issuer's issuances of municipal securities and any municipal
financial products, all as more fully described herein, during the period in ti`°Inch this Agreement shall be
cffectivca
THEREFORE, the Issuer and Hi€ltopSecurities, in consideration of the mutual covenants
and agreements herein contained and other good and valuable consideration, do hereby agree as follows.
SECTION I
SCOPE OF SERVICES
A. Score of Services and DischaEgLALRKaR2RajkUjfiga.
1. Scope ofServices.
(a) HilltopSecuritics is engaged by the Issuer as its municipal advisor to provide the services set
forth in A2nodix A hercto (the "Municipal Advisory Services"). The Municipal Advisory Services,
together with any services to be provided by Hilho Securities as the Issuer's independent registered
municipal advisor ("I A") pursuant to subparagraph B.1 of this Section 1, arc hereinafter collectively
- referred to as the "Scope of Services" hereunder. The Scope of Services to be provided by HilhopSecuritics
may be changed only as provided in paragraph D of this Section 1.
(b) If the Issuer engages HilhopSccuritics or any of its affiliates, in a capacity other than as
municipal advisor, to provide additional services that are not municipal advisory activities ("Non -Municipal
Advisor Services"), such engagement for Non -Municipal Advisor Services shall be evidenced by a separate
Advisor Services shall notbegovern by this Agreement and are intended to consist of activitiesii at
agreementY
not
requiring registration as a municipal advisor under the Securities Exchange Act.
(c) The Issuer shall provide written notice to HilltopSccuritics of any other municipal advisor
engaged by the Issuer, whether in regard to all or any portion of the Municipal Advisory Services or for
the accuracy or completeness of the official statement, other than with respect to information abou!
HilltopSecurities provided for inclusion in the official statement, if applicable. The Issuer agrees that
HilltopSecurities may rely on any infortnation provided to it by the Issuer for purposes of this paragraph.
5. Representations and Certifications. If and to the extent provided in the Scope of Services,
matters pertaining to the Issuer, its municipal securities or municipal financial products arising as part of
the Municipal Advisory Services to be provided pursuant to this Agreement, the Issuer hereby agrees to
provide accurate and complete information to HilltopSecurities as may be reasonably necessary or
otherwise helpful to HilltopSecurities in fulfilling its responsibty to have a reasonable basis for any
represe-ctatioTs, oAer tYa-c. represey-tatitis �,y Y-illt+lSecuities regardi7g itself, xmle ix a cezificzte sixe t
bv VilitonSrAsumitieR t%,at -nav he relied unnT hv tre lqqner- 2TV Otrer na-tv i'TvnIved it*%%-JO---01eJ0i!!�10256Z
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B. Services as IndC Blgiltered MuniclRal Advisor.
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written presentation of the Issuer contemplated under SEC Rule 15Ba I - I (d)(3)(vi)(B) shall be subject to
prior approval by HilltopSecurities.
If there are any other aspects of the issuance of municipal securities or municipal financial products
outside the scope of the Municipal Advisory Services with respect to which the Issuer seeks to have
HilltogSecurities serve as its IRMA- such aspects, which are setwateanazz
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(b) If the Issuer elects not to designate HilltopSecuritics to serve as an IRMA for purposes of the
IRMA exemption with respect to the Municipal Advisory Services, or if the Issuer elects to designate
HilltopSecurities to serve as IRMA for less than the full range of Municipal Advisory Services, such
election shall be set forth in Appendix A.
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(c) The Issuer shall provide written notice to HilltopSecurities of any other municipal advisor
jj.jcjjjj livilir has been designated as an IRMA i and such
n h visor to the Issuer
at ewartv to serve as migunicial'add
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the Issuer.
2. HillropSecures Not Responsible for Independence front Third Parties. Notwithstanding
HilltopSecurities' status as an IRMA, HilltopSecuritics shall not be responsible for ensuring that it is
independent, within the meaning of the IRMA exemption as interpreted by the SEC, from another party
wishing to rely on the exemption from the definition of municipal advisor afforded under the IRMA
ensvvirrg drat-avq-s�, pw",u Tu4ases
of Section 15B of the Securities Exchange Act or any SEC or Municipal Securities Rulemaking Board
("MSRB") rule thereunder. The Issuer expressly acknowledges that it is the responsibility of such other
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3. Recommendations Provided by Third Parties Relying on IRMA Exemption. The Issuer
agrees that, to the extent the Issuer seeks to have HilltopSecurities provide advice with regard to any
recommendation made by a third party relying on the IRMA exemption, the Issuer shall provide to
well as any information it has received from such third party. In connection therewith, HilltopSecurities
shall be authorized to communicate with such third party as necessary or appropriate in order for
HilltopSecurities to have the information it needs to provide informed advice to the Issuer with regard to
such recommendation. HilltopSccurities shall provide to the Issuer recommendations it receives directly
from any third party but shall not be required to provide advice to the Issuer with regard to any such
in this subparagraph B.3.
Except as may be otherwise expressly provided in writing by HilltopSecurities, no recommendation
by a third -party (including but not limited to a Co -Municipal Advisor) shall be deemed to be a
recommendation by Hill
of a third -party recommendation shall not be viewed as HilltopSecurities having implicitly accepted or
approved such aspect of the recommendation or otherwise having adopted the recommendation or any
aspect thereof as its own recom Ic L12c
:cit seek ti, k?ve HilittlSecurities 7,rvvita-z1vicc with regirt t*,?ay rec&mmealatiia male'xy a thirt jany
relying on the -%t ke_re_�uimt4f!
to such recommendation notwithstanding any information it may have received from such third party.
VW,t F -M IM0111111MIDSOUN as inuicative mat ine issuer aocs not seeK to have hilitopSecuritics provide
such advice.
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amendment as provided in this paragraph. Furthermore, to the extent that any such activities not within the
Agreement, HilltopSecurities; may take such action, if any, as it deems appropriate pursuant to
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appendix shall be dated as of its effective date and shall cause Appendix A, taken together with the
provisions of this Section 1, to clearly set forth the then -current scope of HilltopSecurities' engagement
hereunder and any limitations to such scope.
E. Non -Municipal Advisory Activities Related to Scone of Services. The Scope of Services under
this Agreement is intended to encompass activities subject to the provisions of Securities Exchange Act
Section 15B and the rules of the SEC and MSRB thereunder relating to municipal advisory activities.
or appropriate to provide the intended services hereunder in a fair, effective and efficient manner for the
actions that may not qualify as municipal advisory activities. Unless otherwise prohibited by Securities
Exchange Act Section 15B or any rule of the SEC or MSRB thereunder, the fact that HilltopSccurities
serves as municipal advisor to the Issuer in connection with a particular matter shall not prohibit
HilltopSecuritics from undertaking such necessary or appropriate non -municipal advisory activities in
Co :a�CS SU&, TOT -W UTiciral advismx/ activitie.
---------- - — - - - - -
MSRB thereunder.
SECTION II
TERM AND TERMINATION
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inniversary date of the Effective Date shall occur.
B. Termination of this Engagement. This Agreement may be terminated with or without cause by
tka Issuer ir HilluaSecuities u7am thegivizgif at le2st thirty (3Ways' T&*r written attice tv theither
party of its intention to terminate, specng in such notice the effective date of such termination. In the
event of such termination, it is understood and agreed that only the Amounts due HilltopSecurities for
services provided and expenses incurred to the date of termination will be due and payable. No penalty
will be assessed for termination of this Agreement.
SECTION III
A. Compensation. The fees due to HilltopSccurities for the Municipal Advisory Services and any
other services set forth in Appendix A hereto shall be as provided in Appendix B hereto. The Issuer has
not excessive. If at any time the Issuer becomes concerned that, notwithstanding its initial belief that the
comiensation arraneements set Williahli- �W
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engagement may potentially become excessive, the Issuer shall immediately notify HilltopSecurities,
writing of its concern in that regard.
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written approval.
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MSRB Rule G-42(b)(i)(D) and (c)(ii).
D. No Custody of Issuer Funds. This engagement does not contemplate that HilltopSccuritics
receive deposit of or maintain custody of the Issuer's funds unless otherwise provided in Appendix A
�,creto.
E. Limitation on Liability In the absence of willful misconduct, bad faith, gross negligence or
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persons, HilltopSecurities and its associated persons shall have no liabty to the Issuer for any act or
*mission in the course of, or connected with, rendering services hereunder or for any error of judgment,
mistake of law, or any toss arising out of any issuance of municipal securities, any municipal financial
f!)roduct or any other investment.
SECTION IV
REQUIRED DISCLOSURES
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(c)(ii). The Conflict Disclosu s also describe ow HilltopSecuritie addresses or intends to manage or
mitigate any disclosed conflicts of interest, as well as the specific type of information regarding, and the
MA and MA -1 filed by topSecurities with the SEC.
B. Waiver of Disclosed Conflicts of Interest. By executing this Agreement, the Issuer hereby waives
any conflicts of interest disclosed by HilltopSecuritics in the Conflict Disclosures as of the date of this
Agreement.
C. Consent to Electronic Delivery of Disclosures. By executing this Agreement, the Issuer consents,
fY r th WMvwq-f-LVw
Issuer, in lieu of delivery of hard copy. The Conflict Disclosures may be delivered by email to the Issuer
zt Ron Bottoms, or at such other email address as the Issuer may hereafter provide in writing to
HilltopSecurities.
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A. ' Choice of Law. This Agreement shall be construed and given effect in accordance with the laws
of the State of Texas.
B. Bindinp Effect; Assignment. This Agreement shall be binding upon and inure to the bencfit of
the Issuer and HilltopSccuritics, their respective successors and assigns; provided however, neither party
the other party.
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representations or modifications concerning this Agreement shall be of no force or effect except for a
Section I hereof.
Signature pagefollbips
HILLTOP SECURITIES INC. BAYTOWN HOSPITALITY PUBLIC
FACILITIES CORPORATION
By: By:
David K. Medanich
Vice Chairman Title
L -In
Joe Morrow
Managing Director Date:
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APPENDIX A
This Appendix A sets out the scope of the Municipal Advisory Services to be performed by
HAU2rSmMies XUF—UMU'ludke
Section I of the Agreement, and with the understanding that:
(a) Individual actions taken within this scope shall be consistent with any request or
However, not all listed activities will be appropriate, necessary or applicable to any particular
matter subject to this Agreement.
(b) For purposes of this Agreement, an issuance of municipal securities (an
"issuance") shall encompass any and all stages in the life of an issuance, from the pre -issuance
planning stage to the repayment stage.
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LAVIV - I XJVNAVW�W4UV1%M' WRIEW
new issuances, throughout the term of this Agreement. The activities to be performed by topSecurities
maN include. de"jiding on the
Issuer, one or more of the following:
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awrognate, would include a studi of the trend of the assesseg iiijilli, 1%
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operated by the Issuer are to be pledged to repayment of the contemplated issuance, the survey
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. -tult Ye ex7ectet tt uke izu,2ectuxt zw;y iutst?.zfiaj; iateYtetzess 7ayaYlefi4m sych revenlyes,
additional revenues to be available from any proposed rate increases, and additional revenues
resulting from improvements to be financed by the contemplated issuance, as projected by
consulting engineers engaged by the Issuer.
2. Future Financings. In connection with the contemplated issuance, considering and
experts, if any, engaged by the Issuer.
3. Recommendations. Making recommendations to the Issuer on the contemplated issuance,
including such elements as the date of issue, interest payment dates, schedule of principal
maturities, options for prepayment, security provisions, and such other provisions as may be
appropriate.
4. Market Information. Advising the Issuer of HilltopSecuritics' view of current bond
market conditions, other related forthcoming bond issues and general information (including
conditions relevant to setting an appropriate date and time for the sale of the issuance.
a
5. Elections. In the event it is necessary to hold an election to authorize the contemplated
the election, including assistance in the transmission of such data to the Issuer's bond counsel.
Debt Manaseement and Financial Implementation for New Issuance
6. Method of Sale. Evaluating the particular financing being contemplated, giving
consideration to the complexity, market acceptance, rating, size and structure in order to make a
recommendation as to an appropriate method of sale, and:
(1) Supervising the sale of the municipal securities;
(2) Disseminating information to prospective bidders, organizing such informational
meetings as may be necessary, and facilitating prospective bidders' efforts in making
timely submission of proper bids;
(3) Assisting the staff of the Issuer in coordinating the receipt of bids, the safekeeping of
good faith checks and the tabulation and comparison of submitted bids;
(4) Advising the Issuer regarding the best bid and provide advice regarding acceptance or
rejection of the bids; and
(5) Obtaining CUSIP numbers on behalf oft a Issuer.
b. If the issuance is to be sold by negotiated sale:
purpose of negotiating the purchase of the municipal securities;
(2) Cooperating with and assisting any selected sole or managing underwriter and its
counsel, as well as any disclosure counsel retained by the Issuer, in connection with the
preparation of any preliminary or final official statement or offering memorandum.
HilltopSecurities will cooperate with and assist the underwriters in the preparation of a
bond purchase contract, an underwriters' agreement and other related documents;
(3) Assisting the staff of the Issuer in the safekeeping of any good faith checks and
providing a cost comparison to the then -current market of expenses, interest rates and
prices which are proposed by the underwriters;
(4) Advising the Issuer on the fairness of the price offered by the underwriters;
(5) Advising the Issuer in connection with any terms and conditions it may wish to
establish with respect to order priorities and other similar matters relating to the
underwriting of the new issuance;
(6) If the new issuance will have a retail order period, advising the Issuer on retail
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(7) At the request of the Issuer, reviewing required disclosures by underwriters to the
Issuer relating to their role as underwriter, conflicts of interests, material terms and risks
of the issuance, and any other matters, and providing any appropriate advice to the Issuer
in connection with such disclosures.
7. Offering Documents for Competve Offerings. Coordinating the preparation of the
i-ifice of saleomd bidding-iistructio-cs, preli-miTa3V ol5icial statene-Tt (i-TcludiTg cooperativg-,v-.A*
and assisting any disclosure counsel retained by the Issuer), official bid form and such other
documents as may be required and submitting all such documents to the Issuer for examination,
approval and certcation. After such examination, approval and certcation, HilltopSecurities
provide copies of the final official statement to the winning bidder purchasing the municipal
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S. Credit Ratings. Making recommendations to the Issuer on the advisability of obtaining
one or more credit ratings for the issuance and, when directed by the Issuer, coordinating the
cases where the advisability of personal presentation of information to a rating agency may be
of representatives from the Issuer as may be approved or directed by the Issuer.
9. Trustee, Paying Agent, Registrar, Professionals and Other Transaction Participants.
Upon request, providing advice to the Issuer in the selection of a trustee and/or paying
ageTt/regisVar, legal, accivuxtiig trttker 71r0ossitz.21s, 2xi +tker tY-xs?-ct4)x Y, 1. rel?ti7i6
t and assistin in the '1 -i Y 1-
fees dent thereto.
10. Financial Publications. When appropriate, advising financial publications of the
forthcoming sale of the municipal securities and providing them with all pertinent information.
11. Consultants. After consulting with and receiving directions from the Issuer, arranging for
such reports and opinions of recognized independent consultants as may be appropriate for the
successful marketing of the issuancc.
12. Auditors. In the event formal vercation by an independent auditor of any calculations
dent to the issuance is required, making arrangements for such services.
13. Issuer Meetings. Attending meetings of the governing body of the Issuer, its staff,
regresex M.ives--j.r ctw&2zittees m rcAuestei whcF. HiIla,.TSccxritics rn&yAe,.jf,-TqsisY-nce trservice
and matters within the scope of this engagement are to be discussed.
14. Printing. To the extent authorized by the Issuer, coordinating all work incident to printing
or final production, physical or electronic, of the offering documents.
15. Bond Counsel. Maintaining liaison with bond counsel in the preparation of all legal
documents pertaining to the authorization, sale and issuance of the municipal securities.
16. Changes in Laws. Providing 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 HilltopSecurities becomes aware in the ordinary course of its
IF 1111111
fYrovide legal advice or services to, the Issuer.
17. Delivery of the Municipal Securities. As soon as a bid for the purchase of a competitive
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or direction of the Issuer:
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2. Refundings and Tender Offers. Providing advice to the Issuer with regard to opportunities for
means of a new issuance, bank loans, or other funds of the Issuer, but not including serving as
effected. Transaction -based advice in connection with a specific new issuance of bonds to
effectuate any such refunding or tender offer would be provided within the scope of Municipal
Advisory Services for new issuances described in Section I above. Transaction -based advice in
offer, other than b means I j Tg of ba ds
3. Continuing Disclosure. Providing advice to the Issuer with regard to continuing disclosure
undertakings for outstanding issuances; processes, policies and procedures to comply with
continuing disclosure
under a continuing disclosure
described in Section V. below.
111. Particularized Services on Qutstandinjj Issuances of Municipal Securities. HilltopSecurities
may provide to the Issuer certain additional advisory or related services in connection with particular
tutstanding issuances or matters affecting multiple outstanding issuances throughout the term of this
;Fr direction of the Issuer:
19
1. Other Post -Sale Services. Reviewing the transaction features and documentationof
outstanding issuances with legal counsel forte Issuer, bond counsel, auditors and other experts
and consultants retained by the Issuer and assistingin developingappropriate responses to legal
processes, audit procedures, inquiries, internal views and similar , or other services relate
to one or more outstanding issuances as may be agreed to by the Issuer and HilltopSecurities.
2. Brokerage icipal Escrow Investments. At the request of the Issuer, brokering the
purchase of municipal escrow investments in connection with a refunding tt i
issuance, together it any recommendations by HilltopSecurities (but not by HilltopSecurities
Asset Management, LLC as an investment adviser) with respect to such r era e.
ices1as Indegendent Registeredici vis ("' ". At the t o
the Issuer, HilltopSecurities shall, as the Issuer's IRMA, review provide advice tote Issuer i
connection with c a ti s, proposals, ideas or matters suggested or otherwise communicated
by a third tote Issuer with respect to the same aspects of the issuance of municipal securities or
municipal financial products that ait i the scope of Municipal Advisory Services. There are no aspects
of the issuance of municipal securities or municipal financial products that are outside the scope of
Municipal Advisory Services set forth int is Appendix.
V. Other Services Relati a ici rides.HilltopSecurities agrees to make available to
the Issuer other services relating to municipal securities, when so requested the Issuer and subject to the
agreement by Issuer and HilltopSecurities regarding the specific requirements it respect to such a ices,
which requirements shall be made part of the scope of Municipal Advisory Services and included in this
Appendix s an amendment or addendum, whichservices may include, wit out limitation:
1. Capital nr rovr t Programs. Providing advice and assistance in the development of any
capital improvement ro r oft the Issuer.
Long-Range2. in . Providing advice and assistance in the development of other long-
range fi
-
fi ci is oft the Issuer.
3. Refundings and Tender Offers. Providing advice and assistancein executing refunding or
tender offer of an outstandingissuance other than by means of refunding o , such s by means
of a bank loan or other funds of the Issuer.
. Continuing Disclosure Documents. Preparing and providingvice with regard tot the content
of continuing disclosure documents in compliance with the Issuer's continuing disclosure
undertakings for its outstandingissuances, other than in the capacity iss i ti t under
continuing isclosure undertaking.
As provided in paragraph ection I of the Agreement, amendments to this Appendix
be effected replacement of this Appendix A withversion hereof or by the addition
addendumto this Appendix A, and this Appendix A, as it may have been amended, shall be dated
and effective the most recent of the date set forth in any such amendment or the date set forth
in any addendum tot is Appendix A.
13
APPENDIA B
This Appendix B sets out the form and basis of compensation to HilltopSecurities for the Municipal
Advisory Services provided under this Agreement as set forth in Appendix A; provided that the
zttel ta, tke sci;uetf tke 1tuxicil,71 A-tvisivjy Sexiices, uodess itke:rxise;rrovidet? im tie aueA--uejt to tle
A
Section I of the Agreement.
1. New Issuances of Municipal Securities. The fees due HilltopSecurities in connection with thc;
securities will not exceed those contained in our fee schedule as listed below:
The above charges shall be multiplied byfor an issuance of municipal securities for which
HilltopSecurities participates in the completion of an application to a federal or state government agency
or for the issuance of revenue bonds, refunding bonds or variable rate bonds, reflecting the additional
services required.
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of the new issuance and shall be due at the time that the municipal securities are delivered.
11. Baseline Advice on Outstanding Issuances of MuniciRal Securities. There shall be no additional
Appendix A hereto, with the understanding that such services arc integral to HilltopSecurities' engagement
as nuxiciTal advis tr sych services thrr—x6K m—f
as part of the fees paid for the other services provided by HilltopSecurities hereunder.
III. Particularized Services on Outstanding Issuances of Municipal Securities. In connection with
Billing
Title Rate
Directors and Above
$400.00
Vice Presidents
300.00
Assistant Vice Presidents
250.00
Associates/Analysts
210.00
Clerical/Administrative Staff
160.00
In connection with ftj b[jW"j BW16"j ?. --I�
t e under then-iwxm-cj-wY-km
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may consider the information in making its investment decision.
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[�.ricing for the other clients. Furthermore, any potential conflict arising from the firm effecting or otherwise
wifh�w-b-Jvrtsactious is mit, - ted #%, rcearts of such ctivitics
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acivisory ousiness, inereDy 17CGUCIng LYIQ RKEM10,17 inat u1c inturc5is vi butal vt,,L:x L114*111h WIFIA19
have an impact on the semices provided by the Firm to Client.
VI. Comr:iensation-Based Conflicts. Fees that are based on the size ofthe issue are contingent upon
the delivery of the Issue. While this form of compensation is customary in the municipal securities market,
this may present a conflict because it could create an incentive for the Firm to recommend unnecessary
financings or financing,-, that are disadvantageous to Client, or to advise Client to increase the size of the
issue. This conflict of interest is mitigated by the general mitigations described above.
Fees based on a fixed amount are usually based upon an analysis by Client and the Firm of, among other
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by the Firm. This forrn of compensation presents a potential conflict of interest because, if the transaction
requires more work than originally contemplated, the Firm may sufler a loss. Thus, the Firm may
recommend less time-consuming alternatives, or fail to do a thorough analysis of alternatives. This conflict
of interest is mitigated by the general mitigations described above.
Hourly fees are calculated with, the aggregate amount equaling the number of hours worked by Firm
personnel times an agrccd-upon hourly billing rate. This form of compensation presents a potential conflict
of interest if Client and the Finn do not agree on a reasonable maximum amount at the outset of the
engagement, because the Firm does not have a financial incentive to recommend alternatives that would
result in fewer hours worked. This conflict of interest is mitigated by the general mitigations described
above.
MSRB Rule G-42 requires that municipal advisors provide to their clients certain disclosures of legal or
disciplinary events material to its client's evaluation of the municipal advisor or the integrity o0f the
municipal advisor's management or advisory personnel.
Accordingly, the Finn sets out below required disclosures and related information in connection with such
disclosures.
1. Material Legal or 1iscil2linary Event. The Finn discloses the following legal or disciplinary events
that may be material to Client's evaluation of the Firm or the integrity of the Finn's management or advisory
personnel,
For related disciplinary actions please refer to the Finn's Broke webpagm
The Firm self-reported violations of SEC Rule 15c2-12: Continuing Disclosure. The Firm
settled with the SEC on February 2, 2016. The Finn agreed to retain independent consultant
and adopt the consultant's finding. Finn paid a fine of $360,000.
The Finn settled with the SEC in matters related to violations of MSRB Rules
and SEC rule 1513(c) (1). The Firm disp
,orgcd fees of $120,000 received as financial advisor
on the deal, paid prejudgment interest of $22,400.00 and a penalty of $50,000.00.
The Finn entered into a Settlement Agreement with Rhode Island Commerce Corporation.
Under the Settlement AgrccmcnL the firm agreed to pay $16.0 million to settle any and all
claims in connection with The Rhode Island Economic Development Corporation Job
Creation Guaranty Program Taxable Revenue and (38 Studios, LLC Project) Series 2010,
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including the litigation thereto. The case, filed in 2012, arose out of a failed loan by Rhode
Island Economic Development Corporation. The firm's predecessor company, First Southwest
Company, LLC, was one of 14 defendants. FirstSout west's engagement was limited to
advising on the structure, terms„ and rating of the underlying bonds. Hilltop settled with no
admission of liability or wrongdoing.
On April 34, 2019, the Firm entered into a Settlement Agreement with Berkeley County
School District of Berkeley County, South Carolina. The case, filed in March of 2019, arose
in connection with certain bond transactions occurring from 2012 to 2014, for which former
employees of Southwest Securities, Inc., a predecessor company, provided financial advisory
services. The Firm agreed to disgorge all financial advisory fees related to such bond
transactions, which amounted to $822,966.47, to settle any and all claims, including litigation
thereto. Cinder the Settlement Agreement, the Finn was dismissed from the lawsuit with
prejudice, no additional penalty, and with no admission of liability or wrongdoing.
U. div to Access Form MA and Form MA -1 Filings. The Firm's most recent Forrn MA and each
most recent Form MA -I filed with the SEC are available on the SEC's EDGAR system at Forrils MA and
SIA -1, The SEC pen -nits certain items of information required on Form MA or MA -I to be provided by
reference to such required information already filed by the Finns in its capacity as a broker-dealer on Form
D or Form C14 or as an investment adviser on Form ADV, as applicable. Inforrnation provided by the Firm
on Form BD or Form U4 is publicly accessible through reports generated by BrokerCheck at
tt ; f rokercheek fins or =,and the Finn's most recent Form ADV is publicly accessible at the Investment
Adviser Public isclosure website at }art ; .sv�v®s�.ttti�ts�ri fo.sec®�$ra®,,. For purposes of accessing such
rokerCheck reports or Form ADV, click previous hyperlinks.
PART C — FutumSupplemental Disclosures
As required by MSRB Rule G-42, this Municipal Advisor Disclosure Statement may be supplemented or
amended, from time to time as needed, to reflect changed circumstances resulting in new conflicts of interest
or changes in the conflicts of interest described above, or to provide updated information with regard to any
legal or disciplinary events of the Ficins The Firm will provide Client with any such supplement or
amendment as it becomes available throughout the term of the Agreement,
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