HomeMy WebLinkAboutContract 47402 RARY
Deloitte NTRACT �i�,,-Z,D�,
Touche LLP
Suite 1501
201 Main Street
Fort Worth,TX 76102-3134
USA
December 17,2015 Tel:+1 817 347 3300
Fax:+'8173362013
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 Sports Authority(the"FW Sports Authority"or"you"or"your"). Ms.Reem Samra will be
responsible for the services that we perform for FW Sports Authority 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 FW Sports Authority 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 FW Sports Authority'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 FW Sports Authority'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
y` FT.WORTH, TX
Member of
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 FW Sports Authority's management.
Management's Responsibilities
Appendix B describes management's responsibilities.
Responsibility of Board of Directors
As independent auditors of the FW Sports Authority,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
o r w i 11 b e 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$10,000,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 invoices 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 FW Sports Authority 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.
Access to Working Papers by Regulators
We may be requested or required by a regulator of the FW Sports Authority,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
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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 FW
Sports Authority 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 FW Sports Authority 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 FW Sports Authority 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 FW Sports Authority 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 FW Sports Authority.
Any request by the FW Sports Authority 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 FW
Sports Authority and D&T.
Nothing in this engagement letter is intended to restrict the ability of the FW Sports Authority to
distribute to other parties a complete set of the FW Sports Authority's financial statements and/or related
notes thereto,so long as our Independent Auditor's Report is not included with the FW Sports Authority'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 FW Sports Authority is a
public entity under the laws of the State of Texas, and as such, all documents and data held by the FW
Sports Authority are subject to disclosure under Chapter 552 of the Texas Government Code,the Texas
Public Information Act(the "Act"). If the FW Sports Authority 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 FW Sports Authority will,unless
otherwise prohibited by law or regulation,notify D&T prior to disclosure of such documents. The FW
Sports Authority 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
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reasons are sufficient will not be decided by the FW Sports Authority, 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 FW Sports Authority 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]
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Accepted and agreed:
By: ` G�bt�t.
L.Le
Deloitte and Touche LLP
Date December 17,2015
Accepted and agreed to by Fort W h Sports Authority:
By:
Name/Title:
Date:
cc: Board of Directors of the Fort Worth Sports Authority
APPROVED AS TO
FORI%ATt GALITY:
LO
ASSISTANT Wy ATTORNEY
G-R
rOFFICIAL RECORD
5 CRETARYRTH, 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 FW Sports Authority.
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 FW Sports Authority'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 FW Sports
Authority'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 FW Sports Authority'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
government auditing standards,we may be required to directly report known or likely fraud,
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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 FW Sports Authority's financial
statements.As part of the audit,we will apply certain limited procedures to the FW Sports Authority'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.
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APPENDIX B
MANAGEMENT'S RESPONSIBILITIES
This Appendix B is part of the engagement letter dated December 17,2015, between Deloitte&
Touche LLP and the FW Sports Authority.
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 FW Sports Authority 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 FW Sports Authority 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 FW Sports Authority'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 FW Sports Authority'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 FW Sports Authority 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 FW
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Sports Authority's financial statements and reporting on accompanying information. Because of the
importance of management's representations,the FW Sports Authority 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 FW Sports Authority is an attest client.Management of
the FW Sports Authority will ensure that the FW Sports Authority,together with its subsidiaries and other
entities that comprise the FW Sports Authority for purposes of the consolidated financial statements,has
policies and procedures in place for the purpose of ensuring that neither the FW Sports Authority nor any
such subsidiary or other FW Sports Authority 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 FW Sports Authority agrees to furnish to D&T and keep
D&T updated with respect to a corporate tree that identifies the legal names of the FW Sports Authority's
affiliates,as defined in AICPA Code of Professional Conduct Interpretation No. 101-18 (e.g.,parents,
subsidiaries,investors, or investees)("FW Sports Authority 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 FW Sports Authority will ensure that the FW
Sports Authority,together with its subsidiaries and other entities that comprise the FW Sports Authority
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 FW Sports Authority 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 FW Sports Authority agrees to furnish to D&T and keep D&T updated with respect to any equity or
debt securities of the FW Sports Authority and FW Sports Authority 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®,ISIN®, or Sedol®numbers). The FW
Sports Authority acknowledges and consents that such information may be treated by D&T as being in
the public domain.
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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.
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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 FW Sports Authority.
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 FW Sports Authority who have significant
roles in internal control, or(3)other employees of the FW Sports Authority 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 FW
Sports Authority'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 FW Sports Authority's operational efficiency
and effectiveness or otherwise improve its internal control or other policies and procedures.
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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 FW Sports Authority.
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 FW Sports Authority 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 FW Sports Authority and D&T, and the doctrine of respondeat superior shall have no
application as between the FW Sports Authority and D&T.
2. Survival.The agreements and undertakings of the FW Sports Authority contained in the
engagement letter will survive the completion or termination of this engagement.
3. Assignment and Subcontracting.Except as provided below,no party 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 FW Sports Authority 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
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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 FW Sports Authority to evidence coverage.
Certificates. Certificates of Insurance evidencing that D&T has obtained all required insurance shall
be delivered to the FW Sports Authority 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 FW Sports Authority as an additional insured thereon, as its interests may appear. The
term FW Sports Authority shall include its employees, officers, officials, agent and volunteers in
respect to the contracted services.Any failures on the part of the FW Sports Authority 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
FW Sports Authority. Ten(10)days' notice shall be acceptable in the event of non-payment of
premium.Notice shall be sent to Fort Worth Sports Authority,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 FW Sports Authority 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 FW
Sports Authority shall have the right terminate this engagement immediately upon expiration of the
specified time and upon written notice to D&T. The FW Sports Authority 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 FW Sports Authority that have been submitted to
D&T for purposes of completion of the then current audit. The FW Sports Authority 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 FW Sports Authority with services requested by the FW Sports
Authority 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 FW Sports Authority choose to exercise its
option to terminate.
D&T may terminate this engagement at any time, immediately upon written notice to the FW Sports
Authority 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 FW Sports Authority 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 FW
SPORTS AUTHORITY 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
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SOLELY FOR BODILY INJURY,DEATH OR DAMAGE TO REAL OR TANGIBLE
PERSONAL PROPERTY, 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 FW SPORTS AUTHORITY OR ANY ENTITY OR
INDIVIDUAL INDEMNIFIED HEREUNDER OR ANY ENTITY OR INDIVIDUAL ACTING
ON THE FW SPORTS AUTHORITY'S BEHALF,THE FOREGOING INDEMNIFICATION
SHALL BE ON A PROPORTIONATE RESPONSIBILITY BASIS.ACCORDINGLY, THE FW
SPORTS AUTHORITY 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 FW SPORTS
AUTHORITY 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 FW Sports
Authority 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 FW Sports Authority. D&T further agrees that
it shall treat all information provided to it by the FW Sports Authority as confidential and shall not
disclose any such information to a third party without the prior written approval of the FW Sports
Authority,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 FW Sports Authority 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 FW Sports
Authority'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 FW Sports Authority 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 FW Sports Authority. D&T
agrees to provide the FW Sports Authority with copies of all such documentation at D&T's sole cost
and expense. The FW Sports Authority shall give D&T reasonable advance notice of intended
reviews. The FW Sports Authority'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
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books and records to the extent it deems necessary to protect its proprietary and confidential
information and address any privacy concerns.
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 Sports Authority 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. Governing 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.
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.
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APPENDIX E
DISPUTE RESOLUTION PROVISION
This Appendix E is part of the engagement letter dated December 17,2015, between Deloitte&
Touche LLP and the FW Sports Authority.
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 FW Sports Authority
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.
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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 FW Sports Authority.
We will plan the performance of our audit in accordance with the following estimated timetable:
Estimated Targeted for
to Begin Completion
Audit Performance Schedule:
Planning November December
2015 2015
Audit procedures November January 2015
2015
Board of Directors Communications:
Report on the basic financial statements March 2016
Report on the FW Sports Authority'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
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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 FW Sports Authority.
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 FW Sports Authority'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 FW Sports Authority 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 FW Sports Authority management.
4. Deterioration in the quality of the FW Sports Authority'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 FW Sports Authority's
personnel.
6. Draft financial statements with appropriate supporting documentation are not prepared accurately and
timely by the FW Sports Authority's personnel.
7. Electronic files in an appropriate format and containing the information requested are not provided by
the FW Sports Authority on the date requested for our use in performing file interrogation. D&T will
provide the FW Sports Authority with a separate listing of the required files and the dates the files are
needed.
8. The engagement team,while performing work on the FW Sports Authority's premises,is not
provided with high-speed access to the Internet for purposes of conducting the engagement.
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Significant Issues or Changes
9. Significant deficiencies or material weaknesses in the design or operating effectiveness of the FW
Sports Authority'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 FW Sports Authority's financial reporting process or Information
Technology systems.
e. Significant changes in the FW Sports Authority'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 FW Sports Authority'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.
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