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<br /> <br />l~ <br /> <br />PROPOSAL AND AGREEMENT <br /> <br />50 <br /> <br />For <br /> <br />FINANCIAL ADVISORY SERVICES <br /> <br />By and Between <br /> <br />THE CITY OF SAN MARCOS, TEXAS <br /> <br />And <br /> <br />FllŒTSOUTffWESTCOMPANY <br /> <br />. . <br /> <br />It is understood that the City of San Marcos, (the "Issuer"), will have under consideration from <br />time to time the authorization and issuance of indebtedness in amounts and forms which cannot <br />presently be determined and that in connection with the authorization, sale, issuance and. delivery <br />of such indebtedness of the Issuer, First Southwest Company ("FSWC").has been requested to <br />submit a proposal to provide professional services to the Issuer in the capacity of Financial <br />Advisor ("Financial Advisor"). FSWC is pleased to comply with this request and submit the <br />following proposal for consideration. This proposal, if accepted by the Issuer, shall become the <br />agreement (the" Agreement") between the Issuer and FSWC effective at the date of its <br />acceptance as provided for herein below. <br /> <br />1. This Agreement shall apply to any and all evidences of indebtedness or debt <br />obligations that may be authorized and issued or otherwise created or assumed by the Issuer <br />(hereinafter referred to collectively as the "Debt 4Istruments") from time to time during the <br />period in which this Agreement shall be effective. <br /> <br />2. FSWC agrees to provide its professional services and its facilities as Financial Advisor <br />and agree to direct and coordinate all programs of fmancing as may be considered and authorized <br />during the period in which this Agreement shall be effective and to assume and pay those <br />expenses set out in Appendix A, provided, however, that FSWC's obligations to pay expenses <br />shall not include any costs incident to litigation, mandamus action, test case or other 'similar legal <br />actions. <br /> <br />3. FSWC agrees to perform the following duties normally performed by such fmancial <br />advisors and all other duties as, in its judgment, may be necessary or advisable: <br /> <br />a. FSWC will conduct a survey of the fmancial resources of the Issuer to <br />determine the extent of its capacity to authorize, issue and service debt. This survey will include <br />an analysis of the existing debt structure as compared with the existing and projected sources of <br />revenues which may be pledged to secure payment of debt service and, where appropriate, will <br />include a study of the trend of the assessed valuation, taxing power and present and future taxing <br />requirements of the Issuer. In the event revenues of existing or projected facilities operated by <br />the Issuer are to be pledged to repayment of the Debt Instruments then under consideration, the <br />survey will take into account any outstanding indebtedness payable from the revenues thereof, <br />additional revenues to be available from any proposed rate increases and additional revenues, as <br />projected by consulting engineers employed by the Issuer, resulting from improvements to be <br />fmanced by the Debt Instruments under consideration. FSWC will also take into account future <br />fmancing needs and operations as projected by the Issuer's staff and consulting engineers or other <br />experts, if any, employed by the Issuer. <br /> <br />b. On the basis of the information developed by the survey described above, and <br />other information and experience available to FSWC, FSWC will submit to the Issuer its <br /> <br />1 <br />