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HomeMy WebLinkAboutContract 47401 CITY SECRETARY CONTRACT NO. I Deloitte Deloitte&Touche LLP Suite 1501 201 Main Street Fort Worth,TX 76102-3134 USA December 17,2015 Tel:+1 817 347 3300 Fax:+1 817 336 2013 www.deloitte.com David Cooke, City Manager City of Fort Worth, Texas 1000 Throckmorton Fort Worth, Texas 76102 Dear Mr. Cooke: Deloitte& Touche LLP("D&T"or"we"or"us")is pleased to serve as independent auditors for Fort Worth Local Development Corporation(the"Fort Worth LDC"or"you"or"your"). Ms. Reem Samra will be responsible for the services that we perform for the Fort Worth LDC hereunder, hereafter referred to as the"engagement". In addition to the audit services we are engaged to provide under this engagement letter,we would also be pleased to assist the Fort Worth LDC on issues as they arise throughout the year. Hence,we hope that you will call Ms. Samra whenever you believe D&T can be of assistance. The services to be performed by D&T pursuant to this engagement are subject to the terms and conditions set forth herein and in the accompanying appendices. Such terms and conditions shall be effective as of the date of the commencement of such services. Audit of Financial Statements and Other Reporting Our engagement is to perform an audit in accordance with(1)auditing standards generally accepted in the United States of America("generally accepted auditing standards"), and(2)the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States ("generally accepted government auditing standards")(generally accepted auditing standards and generally accepted government auditing standards are collectively referred to herein as the "Auditing Standards"). The objectives of an audit conducted in accordance with the Auditing Standards are to: • Express an opinion on whether each opinion unit of the Fort Worth LDC's basic financial statements,for the year ended September 30,2015 (the"financial statements"), are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America("generally accepted accounting principles"). • Report on the Fort Worth LDC's internal control over financial reporting and on its compliance with certain provisions of laws,regulations, contracts, and grant agreements and other matters for the year ended September 30,2015, based on an audit of financial statements performed in accordance with generally accepted government auditing standards. Appendix A contains a description of the auditor's responsibilities and the scope of an audit in accordance with the Auditing Standards. OFFICIAL RECORD CITY SECRETARY T.WORTH!TX Member of �, g� Deloitte Touche Tohmatsu D&T Reports We expect to issue written reports upon the completion of our audit. Our ability to express any opinion or to issue any report as a result of this engagement and the wording thereof will,of course,be dependent on the facts and circumstances at the date of our reports.If,for any reason,we are unable to complete our audit or are unable to form or have not formed any opinion,we may decline to express any opinion or decline to issue any report as a result of this engagement.If we are unable to complete our audit,or if any report to be issued by D&T as a result of this engagement requires modification,the reasons for this will be discussed with the Board of Directors,and the Fort Worth LDC's management. Management's Responsibilities Appendix B describes management's responsibilities. Responsibility of Board of Directors As independent auditors of the Fort Worth LDC,we acknowledge that the Board of Directors is directly responsible for the appointment,compensation,and oversight of our work,and accordingly,except as otherwise specifically noted,we will report directly to the Board of Directors. You have advised us that the services to be performed under this engagement letter,including,where applicable,the use by D&T of affiliates or related entities as subcontractors in connection with this engagement,have been or will be approved by the Board of Directors in accordance with the Board of Directors' established preapproval policies and procedures. Communications with Board of Directors Appendix C describes various matters that we are required by the Auditing Standards to communicate with the Board of Directors and management. Fees We estimate that our fees for this engagement will be$20,000,plus expenses.Based on the anticipated timing of the work as indicated in Appendix F,our fees will be billed in the month of December,2015. We anticipate sending the invoice according to the above schedule,and the payment is due 30 days from the date of the invoice. Our continued service on this engagement is dependent upon payment of our invoices in accordance with these terms. Our estimated fees are based on certain assumptions,including(1)timely and accurate completion of the requested entity participation schedules and additional supporting information,(2)no inefficiencies during the audit process or changes in scope caused by events that are beyond our control, (3)the effectiveness of internal control over financial reporting throughout the period under audit,(4)a minimal level of audit adjustments(recorded or unrecorded),and(5)no changes to the timing or extent of our work plans. We will notify you promptly of any circumstances we encounter that could significantly affect our estimate and discuss with you any additional fees,as necessary. 2 Access to Working Papers by Regulators We may be requested or required by a regulator of the Fort Worth Entity, including but not limited to the Comptroller General of the United States, or representatives of the United States Government Accountability Office(GAO)(each, a"Regulator")to provide access to working papers related to this engagement. In the event of any such request or requirement,we will notify you prior to providing such access unless applicable law or regulation prohibits such notice. The working papers for this engagement are the property of D&T and constitute D&T's confidential information. We may request confidential treatment of our working papers.Access to our working papers will be provided under the supervision of D&T's personnel and upon request we may provide copies of working papers to a Regulator. The Fort Worth LDC hereby consents,where consent is required,to D&T providing access to working papers and copies thereof to a Regulator.Fees for professional services relating to such access,plus related expenses, will be billed in addition to the estimated fees outlined herein. The working papers related to this engagement will be retained by us for a minimum of three years from the dates of the reports issued, or such longer period as required to satisfy legal and administrative requirements. Inclusion of D&T Reports or References to D&T in Other Documents or Electronic Sites If the Fort Worth LDC intends to publish or otherwise reproduce in any document any report issued as a result of this engagement, or otherwise make reference to D&T in a document that contains other information in addition to the audited financial statements(e.g., in a periodic filing with a regulator, in a debt or equity offering circular, or in a private placement memorandum),thereby associating D&T with such document,the Fort Worth LDC agrees that its management will provide D&T with a draft of the document to read and obtain our approval for the inclusion or incorporation by reference of any of our reports, or the reference to D&T, in such document before the document is printed and distributed. The inclusion or incorporation by reference of any of our reports in any such document would constitute the reissuance of such reports. The Fort Worth LDC also agrees that its management will notify us and obtain our approval prior to including any of our reports on an electronic site. Our engagement to perform the services described herein does not constitute our agreement to be associated with any such documents published or reproduced by or on behalf of the Fort Worth LDC. Any request by the Fort Worth LDC to reissue any report issued as a result of this engagement,to consent to any such report's inclusion or incorporation by reference in an offering or other document, or to agree to any such report's inclusion on an electronic site will be considered based on the facts and circumstances existing at the time of such request. The estimated fees outlined herein do not include any procedures that would need to be performed in connection with any such request. Should D&T agree to perform such procedures,fees for such procedures would be subject to the mutual agreement of the Fort Worth LDC and D&T. Nothing in this engagement letter is intended to restrict the ability of the Fort Worth LDC to distribute to other parties a complete set of the Fort Worth LDC's financial statements and/or related notes thereto so long as our Independent Auditor's Report is not included with the Fort Worth LDC's financial statements and as long as there is no reference to D&T thereby associating D&T with such information. Notwithstanding the foregoing,D&T understands and acknowledges that the Fort Worth LDC is a public entity under the laws of the State of Texas, and as such, all documents and data held by the Fort Worth LDC are subject to disclosure under Chapter 552 of the Texas Government Code,the Texas Public Information Act(the "Act"). If the Fort Worth LDC is required to disclose any documents that may reveal any D&T proprietary information to third parties under the Act, or by any other legal process,law, rule or judicial order by a court of competent jurisdiction,the Fort Worth LDC will,unless otherwise prohibited by law or regulation,notify D&T prior to disclosure of such documents. The Fort Worth LDC 3 shall not be liable or responsible in any way for the disclosure of information not clearly marked as "Proprietary/Confidential Information" or if disclosure is required by the Act or any other applicable law or court order. In the event there is a request for such information under the Act, it will be the responsibility of D&T to submit reasons objecting to disclosure. A determination on whether such reasons are sufficient will not be decided by the Fort Worth LDC,but by the Office of the Attorney General of the State of Texas,or by a court of competent jurisdiction. The parties acknowledge and agree that D&T is being engaged under this engagement letter to provide only the services described herein. Should the Fort Worth LDC request,and should D&T agree to provide,services(including audit services)beyond those described herein, such services will constitute a separate engagement and will be governed by a separate engagement letter. This engagement letter, including Appendices A through G attached hereto and made a part hereof, constitutes the entire agreement between the parties with respect to this engagement and supersedes any other prior or contemporaneous agreements or understandings between the parties,whether written or oral,relating to this engagement. If the above terms are acceptable and the services described are in accordance with your understanding, please sign the copy of this engagement letter in the space provided and return it to us. [Signature Page to Follow] 4 Accepted and agreed: By: ,lob. �TL4cnt Deloitte and Touche LLP Date: December 17, 2015 Accepted and agreed to by Fort Worth Local Development Corporation By: / Name/Title: tllt!� fv Date:__ cc: Board of Directors of Fort Worth Local Development Corporation APPROVED AS TO N LEGALITY: AS TA CITY ATTORNEY Of FO v$ °® g .F !%00000000 a S EOFFICIALECORD5 ETARYS TX APPENDIX A AUDITORS RESPONSIBILITIES AND SCOPE OF AN AUDIT IN ACCORDANCE WITH THE AUDITING STANDARDS This Appendix A is part of the engagement letter dated December 17,2015,between Deloitte& Touche LLP and the Fort Worth LDC. Auditor's Responsibilities Our responsibilities under the Auditing Standards include forming and expressing opinions and reporting on certain matters as described in the Audit of Financial Statements and Other Reporting section of this engagement letter. The audit of the financial statements and our reporting on other matters do not relieve management or the Board of Directors of their responsibilities. Scope of an Audit and Other Reporting The Auditing Standards require that we plan and perform the audit to obtain reasonable,rather than absolute, assurance about whether each opinion unit of the financial statements are free from material misstatement, whether caused by fraud or error.However,because of the inherent limitations of an audit, together with the inherent limitations of internal control, an unavoidable risk exists that some material misstatements may not be detected,even though the audit is properly planned and performed in accordance with the Auditing Standards. We have no responsibility to plan and perform the audit to obtain reasonable assurance that misstatements,whether caused by fraud or error,that are not material to the financial statements as a whole are detected. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements,whether caused by fraud or error. In making those risk assessments,we consider internal control relevant to the Fort Worth LDC's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Fort Worth LDC's internal control.An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. An audit also includes tests of the Fort Worth LDC's compliance with certain provisions of laws, regulations, contracts, and grant agreements. However,our objective is not to provide an opinion on compliance with those provisions, and accordingly,we will not express such an opinion. As part of the audit,we will be alert to situations or transactions that could be indicative of abuse as defined by generally accepted government auditing standards,which involves behavior that is deficient or improper when compared with behavior that a prudent person would consider reasonable and necessary business practice given the facts and circumstances.Abuse also includes misuse of authority or position for personal financial interests or those of an immediate or close family member or business associate. The determination of abuse is subjective;generally accepted government auditing standards do not require us to provide reasonable assurance of detecting abuse, and we will not design the audit to detect abuse.However,if we become aware of abuse that could be quantitatively or qualitatively material to the financial statements,we will apply procedures specifically directed to ascertain the potential effect on the financial statements or other financial data significant to the audit objectives. Under generally accepted 6 government auditing standards,we may be required to directly report known or likely fraud, noncompliance with provisions of laws,regulations,contracts or grant agreements, or abuse to outside parties. Generally accepted accounting principles provide for certain required supplementary information(RSI), such as a management's discussion and analysis,to accompany the Fort Worth LDC's financial statements.As part of the audit,we will apply certain limited procedures to the Fort Worth LDC's RSI, which will consist principally of inquiries of management about the methods of preparing the information. We will disclaim an opinion on the RSI,unless(1)some of the RSI is omitted, (2)the measurement or presentation of the RSI departs materially from the prescribed guidelines,or(3)we have unresolved doubts about whether the RSI is measured or presented in accordance with prescribed guidelines. 7 APPENDIX B MANAGEMENT'S RESPONSIBILITIES This Appendix B is part of the engagement letter dated December 17,2015,between Deloitte& Touche LLP and the Fort Worth LDC. Financial Statements,Internal Control,and Compliance Management is responsible for the preparation,fair presentation, and overall accuracy of the financial statements in accordance with generally accepted accounting principles and all accompanying information in accordance with prescribed guidelines or applicable criteria. In this regard, management has the responsibility for, among other things: • Selecting and applying the accounting policies • Designing,implementing, and maintaining effective internal control relevant to(1)the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error and(2)compliance with laws,regulations,and provisions of contracts or grant agreements • Identifying and ensuring that the Fort Worth LDC complies with the laws and regulations applicable to its activities and the provisions of contracts or grant agreements, and informing us of all instances of identified or suspected fraud,noncompliance with provisions of laws, regulations,contracts or grant agreements, or abuse • Providing us with(1)access to all information of which management is aware that is relevant to the preparation and fair presentation of the financial statements, and all accompanying supplementary information,such as records, documentation, and other matters, (2)additional information that we may request from management for the purpose of our audit, and(3) unrestricted access to personnel within the Fort Worth LDC from whom we determine it necessary to obtain audit evidence • Taking timely and appropriate steps to remedy fraud,noncompliance with provisions of laws, regulations, contracts or grant agreements, or abuse that we report • Having a process to track the status of audit findings and recommendations • Identifying for us previous audits, attestation engagements,and other studies related to the objectives of our audit and whether related recommendations have been implemented. Management's Representations We will make specific inquiries of the Fort Worth LDC's management about the representations(1) embodied in the financial statements and accompanying information, (2)regarding the effectiveness of internal control, and(3)regarding the Fort Worth LDC's compliance with laws,regulations, and the provisions of contracts and grant agreements. In addition,we will request that management provide us with the written representations the Fort Worth LDC is required to provide to its independent auditors under the Auditing Standards. The responses to those inquiries and the written representations of management are part of the evidential matter that D&T will rely on in forming its opinion on the Fort 8 Worth LDC's financial statements and reporting on accompanying information.Because of the importance of management's representations,the Fort Worth LDC agrees to release and,to the extent not prohibited by applicable law,indemnify D&T,its subcontractors,and their respective personnel from all claims, liabilities, and expenses relating to our services under this engagement letter attributable to any misrepresentation by management. Independence Matters In connection with our engagement,D&T,management, and the Board of Directors will assume certain roles and responsibilities in an effort to assist D&T in maintaining independence. D&T will communicate to its partners,principals, and employees that the Fort Worth LDC is an attest client.Management of the Fort Worth LDC will ensure that the Fort Worth LDC,together with its subsidiaries and other entities that comprise the Fort Worth LDC for purposes of the consolidated financial statements,has policies and procedures in place for the purpose of ensuring that neither the Fort Worth LDC nor any such subsidiary or other Fort Worth LDC will act to engage D&T or accept from D&T any service that under American Institute of Certified Public Accountants(AICPA),generally accepted government auditing standards, or other applicable rules would impair D&T's independence.All potential services are to be discussed with Ms. Samra. In connection with the foregoing paragraph,the Fort Worth LDC agrees to furnish to D&T and keep D&T updated with respect to a corporate tree that identifies the legal names of the Fort Worth LDC's affiliates, as defined in AICPA Code of Professional Conduct Interpretation No. 10 1-18 (e.g.,parents, subsidiaries, investors, or investees)("Fort Worth LDC Affiliates"),together with the ownership relationship among such entities. Such information will be maintained in a database accessible by D&T in connection with their compliance with AICPA or other applicable independence rules. Management will coordinate with D&T to ensure that D&T's independence is not impaired by hiring former or current D&T partners,principals,or professional employees in a key position, as defined in the AICPA Code of Professional Conduct. Management of the Fort Worth LDC will ensure that the Fort Worth LDC,together with its subsidiaries and other entities that comprise the Fort Worth LDC for purposes of the consolidated financial statements, also has policies and procedures in place for purposes of ensuring that D&T's independence will not be impaired by hiring a former or current D&T partner, principal, or professional employee in a key position that would cause a violation of the AICPA Code of Professional Conduct,generally accepted government auditing standards,or other applicable independence rules.Any employment opportunities with the Fort Worth LDC for a former or current D&T partner,principal,or professional employee should be discussed with Ms. Samra before entering into substantive employment conversations with the former or current D&T partner,principal, or professional employee. Equity or Debt Security Issuances The Fort Worth LDC agrees to furnish to D&T and keep D&T updated with respect to any equity or debt securities of the Fort Worth LDC and Fort Worth LDC Affiliates(including,without limitation,tax- advantaged debt of such entities that is issued through governmental authorities)that are registered, issued, listed, or traded outside of the United States(whether through stock,bond,commodity, futures or similar markets, or equity, debt, or any other securities offerings),together with related securities identification information(e.g.,ticker symbols or CUSIP®,IS11,40, or Sedol®numbers).The Fort Worth LDC acknowledges and consents that such information may be treated by D&T as being in the public domain. 9 For purposes of the preceding sections entitled"Independence Matters"and"Equity or Debt Security Issuances", "D&T"shall mean Deloitte&Touche LLP and its subsidiaries;Deloitte Touche Tohmatsu Limited, its member firms,the affiliates of Deloitte&Touche LLP,Deloitte Touche Tohmatsu Limited and its member firms; and, in all cases, any successor or assignee. 10 APPENDIX C COMMUNICATIONS WITH BOARD OF DIRECTORS This Appendix C is part of the engagement letter dated December 17,2015, between Deloitte& Touche LLP and the Fort Worth LDC. We are responsible for communicating with the Board of Directors significant matters related to the audit that are,in our professional judgment,relevant to the responsibilities of the Board of Directors in overseeing the financial reporting process. In connection with the foregoing,we will communicate to the Board of Directors any fraud we identify or suspect that involves(1)management, (2)employees of the Fort Worth LDC who have significant roles in internal control, or(3)other employees of the Fort Worth LDC when the fraud results in a material misstatement of the financial statements. In addition,we will communicate with the Board of Directors any other matters related to fraud that are, in our professional judgment,relevant to their responsibilities. We will communicate to management any fraud perpetrated by lower-level employees of which we become aware that does not result in a material misstatement of the financial statements;however,we will not communicate such matters to the Board of Directors,unless otherwise directed by the Board of Directors . In addition, as required by generally accepted government auditing standards, our report on the Fort Worth LDC's internal control over financial reporting and on its compliance with certain provisions of laws,regulations,contracts, and grant agreements and other matters will include any findings of material noncompliance of such provisions, fraud,and material abuse that we have identified during our audit. We will also communicate,in writing,to management and the Board of Directors any significant deficiencies or material weaknesses in internal control(as defined in generally accepted auditing standards)that we have identified during the audit,including those that were remediated during the audit. We are not required to design procedures for the purpose of identifying other matters to communicate with the Board of Directors. However,we will communicate to Board of Directors matters required by the Auditing Standards. We may also communicate to management and the Board of Directors on internal control, compliance,or other matters we observe and possible ways to improve the Fort Worth LDC's operational efficiency and effectiveness or otherwise improve its internal control or other policies and procedures. 11 APPENDIX D GENERAL BUSINESS TERMS This Appendix D is part of the engagement letter to which these terms are attached(the engagement letter, including its appendices,the"engagement letter")dated December 17,2015, between Deloitte& Touche LLP and the Fort Worth LDC. 1. Independent Contractor.D&T is an independent contractor and D&T is not, and will not be considered to be,an agent,partner, fiduciary, or representative of the Fort Worth LDC or the Board of Directors. D&T shall have exclusive control of and the exclusive right to control,the details of the work performed hereunder by its employees,officers,personnel and subcontractors, and shall be solely responsible for the acts and omissions of its employees, officers,personnel and subcontractors. Nothing herein shall be construed as creating a partnership or joint venture between the Fort Worth LDC and D&T, and the doctrine of respondeat superior shall have no application as between the Fort Worth LDC and D&T. 2. Survival. The agreements and undertakings of the Fort Worth LDC contained in the engagement letter will survive the completion or termination of this engagement. 3. Assignment and Subcontracting.Except as provided below,no parry may assign any of its rights or obligations(including,without limitation, interests or claims)relating to this engagement without the prior written consent of the other parties. The Fort Worth LDC hereby consents to D&T subcontracting a portion of its services under this engagement to any affiliate or related entity, whether located within or outside of the United States.Professional services performed hereunder by any of D&T's affiliates or related entities shall be invoiced as professional fees, and any related expenses shall be invoiced as expenses, unless otherwise agreed. 4. Severability.If any term of the engagement letter is unenforceable,such term shall not affect the other terms, but such unenforceable term shall be deemed modified to the extent necessary to render it enforceable,preserving to the fullest extent permissible the intent of the parties set forth herein. 5. Force Maieure.No party shall be deemed to be in breach of the engagement letter as a result of any delays or non-performance directly or indirectly resulting from circumstances or causes beyond its reasonable control, including,without limitation,fire, epidemic or other casualty,act of God, strike or labor dispute,war or other violence,or any law, order or requirement of any governmental agency or authority. 7. Dispute Resolution.Any controversy or claim between the parties arising out of or relating to the engagement letter or this engagement(a"Dispute")shall be resolved as set forth in the Dispute Resolution Provision attached hereto as Appendix E and made a part hereof. Amendments. This engagement letter may not be amended, changed or otherwise modified without the prior written consent of both parties. 8. Insurance.D&T shall carry insurance in the minimum types and amounts for the duration of this engagement, including any renewal terms,and furnish certificates of insurance as evidence thereof. Coverage and Limits: Commercial General Liability-$1,000,000 each occurrence;$2,000,000 aggregate.Automobile Coverage: $1,000,000 each accident on a combined single limit basis. Automobile coverage shall be on any vehicle used by D&T, its employees, agents,representatives in 12 the course of the providing services under this engagement. "Any vehicle"shall be any vehicle owned,hired and non-owned. Worker's Compensation: statutory limits. Professional Liability (Errors and Omissions): $1,000,000 each claim limit; $1,000,000 aggregate limit. Professional Liability coverage may be provided through an endorsement to the Commercial General Liability (CGL)policy,or a separate policy specific to Professional E&O. Either is acceptable if coverage meets all other requirements. Professional Liability(Errors and Omissions)Coverage may be claims-made, and maintained for the duration of the engagement and for two(2)years following completion of services provided, if commercially available. An annual certificate of insurance shall be submitted to the Fort Worth LDC to evidence coverage. Certificates. Certificates of Insurance evidencing that D&T has obtained all required insurance shall be delivered to the Fort Worth LDC prior to D&T proceeding with any work pursuant to this engagement. The commercial general liability and automobile liability policies shall be endorsed to include the Fort Worth LDC as an additional insured thereon,as its interests may appear. The term Fort Worth LDC shall include its employees,officers, officials, agent and volunteers in respect to the contracted services.Any failures on the part of the Fort Worth LDC to request required insurance documentation shall not constitute a waiver of the insurance requirement. D&T will endeavor to provide a minimum of thirty(30)days' notice of cancellation of coverage to the Fort Worth LDC. Ten(10)days' notice shall be acceptable in the event of non-payment of premium.Notice shall be sent to Fort Worth Local Development Corporation,through the City of Fort Worth, 1000 Throckmorton Street,Fort Worth,Texas, 76102 with copies to the City of Fort Worth Attorney at the same address 9. Termination.The Fort Worth LDC may terminate this engagement if D&T fails to cure a material breach within thirty (30)calendar days of receipt of written notice being given of such material breach. If more than thirty(30)calendar days are required to cure such material breach,a reasonable time in excess of said days may be established,provided both parties agree in writing as to the time period. In the event such material breach is not cured within the specified time,the Fort Worth LDC shall have the right terminate this engagement immediately upon expiration of the specified time and upon written notice to D&T. The Fort Worth LDC may terminate this engagement for any reason, with or without cause,upon ninety(90)days written notice to D&T. In the event that this engagement is terminated prior to the expiration date,D&T shall immediately discontinue all services or the entering into contracts in connection with the performance of this engagement and shall return all records of the Fort Worth LDC that have been submitted to D&T for purposes of completion of the then current audit. The Fort Worth LDC shall pay D&T for services actually rendered and expenses incurred up to the effective date of termination and D&T shall continue to provide the Fort Worth LDC with services requested by the Fort Worth LDC and in accordance with this engagement up to the effective date of termination.D&T shall not be entitled to lost or anticipated profits should the Fort Worth LDC choose to exercise its option to terminate. D&T may terminate this engagement at any time,immediately upon written notice to the Fort Worth LDC if D&T determines that the performance of any part of the services under this engagement letter would be in conflict with law, or applicable independence or professional rules or standards. In such case,the Fort Worth LDC shall compensate D&T under the engagement letter for services provided and expenses incurred up to and including the effective date of termination. 10. INDEMNIFICATION/LIABILITY.D&T SHALL INDEMNIFY AND HOLD THE FORT WORTH LDC AND ITS OFFICERS,AGENTS AND EMPLOYEES HARMLESS FROM AND AGAINST ALL LIABILITY, EXPENSE, INCLUDING REASONABLE DEFENSE COSTS AND REASONABLE LEGAL FEES,AND CLAIMS FOR DAMAGES, IN EACH CASE SOLELY FOR BODILY INJURY,DEATH OR DAMAGE TO REAL OR TANGIBLE PERSONAL PROPERTY, 13 TO THE EXTENT DIRECTLY AND PROXIMATELY CAUSED BY THE NEGLIGENCE OR WILLFUL MISCONDUCT OF D&T WHILE ENGAGED IN THE PERFORMANCE OF SERVICES HEREUNDER;PROVIDED,HOWEVER, THAT IF THERE ALSO IS FAULT ON THE PART OF THE FORT WORTH LDC OR ANY ENTITY OR INDIVIDUAL INDEMNIFIED HEREUNDER OR ANY ENTITY OR INDIVIDUAL ACTING ON THE FORT WORTH LDC'S BEHALF, THE FOREGOING INDEMNIFICATION SHALL BE ON A PROPORTIONATE RESPONSIBILITY BASIS.ACCORDINGLY,THE FORT WORTH LDC SHALL NOTIFY D&T PROMTLY,IN WRITING, OF ANY CLAIM OR ACTION FOR WHICH INDEMNITY SHALL BE SOUGHT IN CONNECTION WITH THIS PARAGRAPH 10. ON SUCH NOTIFICATION, D&T SHALL PROMPTLY ASSUME RESPONBILITY FOR AND DEFEND OR SETTLE ANY AND ALL CLAIMS OR ACTIONS DESCRIBED ABOVE WITH COUNSEL OF ITS OWN CHOOSING. THE FORT WORTH LDC SHALL COOPERATE IN ALL REASONABLE RESPECTS WITH D&T IN CONNECTIONS WITH ANY SUCH CLAIM. 11. Disclosure of Conflicts and Confidential Information.D&T hereby represents to the Fort Worth LDC that to the knowledge of the engagement leader providing services hereunder, it has made full disclosure of any existing conflicts of interest related to D&T's services under this engagement. In the event that any conflicts of interest arise after the effective date of the engagement letter,D&T hereby agrees promptly to make full disclosure to the Fort Worth LDC.D&T further agrees that it shall treat all information provided to it by the Fort Worth LDC as confidential and shall not disclose any such information to a third party without the prior written approval of the Fort Worth LDC, using at least the same degree of care as it employs in maintaining in confidence its own confidential information of a similar nature,but in no event less than a reasonable degree of care. Notwithstanding the foregoing,the Fort Worth LDC hereby consents to D&T disclosing such information(1)to its contractors providing administrative, infrastructure and other support services to D&T and its subcontractors providing services in connection with this engagement, in each case, whether located within or outside of the United States,provided that such contractors and subcontractors have agreed to be bound by confidentiality obligations similar to those in this paragraph; (2)as may be required by law, or regulation or to respond to governmental inquiries, or in accordance with applicable professional standards or rules, or in connection with litigation or arbitration pertaining hereto; or(3) to the extent such information(i)is or becomes publicly available other than as the result of a disclosure in breach hereof,(ii)becomes available to D&T on a non-confidential basis from a source that D&T believes is not prohibited from disclosing such information to D&T,(iii)is already known by D&T without any obligation of confidentiality with respect thereto, or(iv)is developed by D&T independently of any disclosures made to D&T hereunder. In satisfying its obligations under this paragraph,D&T shall maintain the Fort Worth LDC's trade secrets and proprietary or confidential information in confidence using at least the same degree of care as it employs in maintaining in confidence its own trade secrets and proprietary or confidential information, but in no event less than a reasonable degree of care. 12. Right to Review.D&T agrees that the Fort Worth LDC shall,until the expiration of three(3)years after conclusion of any audit commenced during the said three years,have access to and the right to examine at reasonable times any directly pertinent books and records of D&T involving transactions relating to this engagement at no additional cost to the Fort Worth LDC. D&T agrees to provide the Fort Worth LDC with copies of all such documentation at D&T's sole cost and expense. The Fort Worth LDC shall give D&T reasonable advance notice of intended reviews. The Fort Worth LDC's right above shall be limited only to those books and records that are necessary to substantiate D&T's invoices hereunder and D&T shall have the right to redact such books and records to the extent it deems necessary to protect its proprietary and confidential information and address any privacy concerns. 14 13. Compliance with Laws. D&T agrees that in the performance of its obligations hereunder,it will comply with all applicable federal, state and local laws, ordinances,rules and regulations and that any work it produces in connection with this engagement will also comply with all applicable federal, state and local laws, ordinances,rules and regulations. 14. Non-discrimination Covenant.D&T agrees that in the performance of its duties and obligations hereunder, it shall not discriminate in the treatment or employment of any individual or group of individuals on any basis prohibited by law. 15. Notices.Notices required pursuant to the provisions of this engagement shall be conclusively determined to have been delivered when(1)hand-delivered to the other party, its agents, employees, servants or representatives, (2)delivered by facsimile with electronic confirmation of the transmission,or(3)received by the other party by United States Mail,registered,return receipt requested, addressed as follows: Fort Worth Local Development Corporation Deloitte and Touche LLP Attn:Henry Day Attn:Reem Samra 1000 Throckmorton 201 Main Street Fort Worth TX 76102 Fort Worth TX 76102 Facsimile: (817)392-8966 Facsimile: (214) 880-5376 16. Governinz Law/Venue. This engagement shall be construed in accordance with the laws of the State of Texas. In the event that the parties do not agree to resolve a Dispute through binding arbitration,venue for any action,whether real or asserted, at law or in equity, brought pursuant to this engagement shall lie in state courts located in Tarrant County, Texas or the United States District Court for the Northern District of Texas,Fort Worth Division. 15 17. Review of Counsel.The parties acknowledge that each party and its counsel have reviewed and revised this engagement letter and that the normal rules of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this engagement letter or exhibits hereto. 16 APPENDIX E DISPUTE RESOLUTION PROVISION This Appendix E is part of the engagement letter dated December 17,2015,between Deloitte& Touche LLP and the Fort Worth LDC. This Dispute Resolution Provision sets forth the dispute resolution process and procedures applicable to the resolution of Disputes and shall apply to the fullest extent of the law,whether in contract, statute,tort (such as negligence), or otherwise. Mediation: All Disputes shall be first submitted to nonbinding confidential mediation by written notice to the parties, and shall be treated as compromise and settlement negotiations under the standards set forth in the Federal Rules of Evidence and all applicable state counterparts,together with any applicable statutes protecting the confidentiality of mediations or settlement discussions. Mediation shall be held in Tarrant County, Texas, and the parties shall make a good faith effort to agree on a mediator. If the parties cannot agree on a mediator,the International Institute for Conflict Prevention and Resolution("CPR"),at the written request of a party, shall designate a mediator. Arbitration Procedures: If a Dispute has not been resolved within 90 days after the effective date of the written notice beginning the mediation process(or such longer period, if the parties so agree in writing), the mediation shall terminate, and upon written consent of an authorized representative of each of the parties,the Dispute shall be settled by binding arbitration to be held in Tarrant County, Texas. The arbitration shall be solely between the parties and shall be conducted in accordance with the CPR Rules for Non-Administered Arbitration that are in effect at the time of the commencement of the arbitration, except to the extent modified by this Dispute Resolution Provision(the"Rules"). The arbitration shall be conducted before a panel of three arbitrators. Each of the Fort Worth LDC and Deloitte&Touche LLP shall designate one arbitrator in accordance with the"screened"appointment procedure provided in the Rules and the two party-designated arbitrators shall jointly select the third in accordance with the Rules.No arbitrator may serve on the panel unless he or she has agreed in writing to enforce the terms of the engagement letter(including its appendices)to which this Dispute Resolution Provision is attached and to abide by the terms of this Dispute Resolution Provision.Except with respect to the interpretation and enforcement of these arbitration procedures(which shall be governed by the Federal Arbitration Act),the arbitrators shall apply the laws of the State of Texas(without giving effect to its choice of law principles)in connection with the Dispute. The arbitrators shall have no power to award punitive,exemplary or other damages not based on a party's actual damages(and the parties expressly waive their right to receive such damages). The arbitrators may render a summary disposition relative to all or some of the issues,provided that the responding party has had an adequate opportunity to respond to any such application for such disposition.Discovery shall be conducted in accordance with the Rules. All aspects of the arbitration shall be treated as confidential, as provided in the Rules. Before making any disclosure permitted by the Rules,a party shall give written notice to all other parties and afford such parties a reasonable opportunity to protect their interests.Further,judgment on the arbitrators' award may be entered in any court having jurisdiction. Costs: Each party shall bear its own costs in both the mediation and the arbitration;however,the parties shall share the fees and expenses of both the mediators and the arbitrators equally. 17 APPENDIX F COORDINATION OF THE ENGAGEMENT This Appendix F is part of the engagement letter dated December 17, 2015,between Deloitte& Touche LLP and the Fort Worth LDC. We will plan the performance of our audit in accordance with the following estimated timetable: Estimated Targeted for to Begin Completion Audit Performance Schedule: November December Planning 2015 2015 Audit procedures November January 2015 2015 Board of Directors Communications: Report on the basic financial statements March 2016 Report on the Fort Worth LDC's internal control over financial reporting and on compliance and other matters based March 2016 on an audit of financial statements performed in accordance with government auditing standards 18 APPENDIX G CIRCUMSTANCES AFFECTING TIMING AND FEE ESTIMATE This Appendix G is part of the engagement letter dated December 17,2015, between Deloitte& Touche LLP and the Fort Worth LDC. The fees quoted for the engagement are based on certain assumptions. Circumstances may arise during the engagement that may significantly affect the targeted completion dates or our fee estimate.As a result, changes to the fees may be necessary. Such circumstances include but are not limited to the following: Facilitation of the Engagement 1. Changes to the timing of the engagement at the Fort Worth LDC's request. Changes to the timing of the engagement usually require reassignment of personnel used by D&T in the performance of services hereunder. However,because it is often difficult to reassign individuals to other engagements,D&T may incur significant unanticipated costs. 2. All requested information, including documentation of the Company's internal control over financial reporting, is not(a)provided by the Fort Worth LDC on the date requested, (b)completed in a format acceptable to D&T,(c)mathematically correct, or(d)in agreement with the appropriate Company records (e.g., general ledger accounts,completed trial balance).D&T will provide the Company with a separate listing of required schedules, information requests,and the dates such items are needed. 3. Significant delays in responding to our requests for information, such as [reconciling variances, providing requested supporting documentation(e.g.,invoices,contracts,and other documents), or responding to our inquiries of Fort Worth LDC management. 4. Deterioration in the quality of the Fort Worth LDC's accounting records during the current-year engagement in comparison with the prior-year engagement. 5. A completed trial balance,referenced to the supporting analyses and schedules and financial statements [and interim financial information, is not provided timely by the Fort Worth LDC's personnel. 6. Draft financial statements with appropriate supporting documentation are not prepared accurately and timely by the Fort Worth LDC's personnel. 7. Electronic files in an appropriate format and containing the information requested are not provided by the Fort Worth LDC on the date requested for our use in performing file interrogation.D&T will provide the Fort Worth LDC with a separate listing of the required files and the dates the files are needed. 8. The engagement team,while performing work on the Fort Worth LDC's premises, is not provided with high-speed access to the Internet for purposes of conducting the engagement. 19 Significant Issues or Changes 9. Significant deficiencies or material weaknesses in the design or operating effectiveness of the Fort Worth LDC's internal control over financial reporting are identified during our audit that result in an expansion of our audit procedures on the related financial statement accounts. 10. A significant level of proposed audit adjustments is identified during our engagement. 11. A significant number of drafts of the financial statements are submitted for our review,or we identify a significant level of deficiencies in the draft financial statements 12. Significant new issues or changes as follows: a. Significant new accounting issues. b. Significant changes in accounting policies or practices from those used in prior years. c. Significant events or transactions not contemplated in our budgets. d. Significant changes in the Fort Worth LDC's financial reporting process or Information Technology systems. e. Significant changes in the Fort Worth LDC's accounting personnel,their responsibilities, or their availability. f. Significant changes in auditing standards g. Significant changes in the Company's use of specialists, or the specialists or their work product does not meet the qualifications required by generally accepted auditing standards, generally accepted government auditing standards,the AICPA standards for our reliance upon their work. 13. The procedures necessary to adopt any new Statements of Government Accounting Standards have not been completed by the Fort Worth LDC's personnel. 14. Changes in audit scope caused by events that are beyond our control. Payment for Services Rendered 15. Without limiting its rights or remedies,D&T may halt or terminate its services entirely if payment is not received within 30 days of the date of the invoice. 20