20-DELIBERATE/ACT ON RES APPROVING PROFESSIONAL SERVICES CONTRACT WITH MCCALL, PARKHURTS & HORTON LLP FOR BOND COUNSEL SERVICES FOR $15,000

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B. ATTORNEY-CLIENT RELATIONSHIP Upon execurion of this engagement letter, the City will be our client and an attorney-client relarionship will exist between us. We further assume that all other parties in this transaction understand that we represent only the City in this transaction, we aYe not counsel to any other party, and we are not acting as an intermediary among the parries. Our services as bond counsel are limited to those contracted for in this letter; the City's execution of this engagement letter will constitute an acknowledgment of those limitations. Our xepresentation of the City will not affect, however, our responsibility to render an objective Legal Opinion. Our representation of the City and the attorney-client relationship created by this engagement letter will be concluded upon issuance of the Obligations. Nevertheless, subsequent to Closing, we will mail the appropriate Internal Revenue Service Form 8038, prepaYe and distribute to the participants in the transaction a transcYipt of the proceedings pertaining to the Obligarions. C. CONFLICTS As you are awaxe, our firm represents many political subdivisions and investment banking firms, among others, who do business with political subdivisions. Our firm also repxesents the Texas Water Development Board in the capacity as bond counsel. It is possible that during the time that we aYe xepresenting the City, one or more of our present or future clients will have transactions ~vith the Cit~~. It is also possible that we may be asked to represent, in an unrelated matter, one or more of the entiries involved in the issuance of the Obligations. We do not believe such representation, if it occuxs, will adversely affect our ability to represent you as pxovided in this letter, either because such matters will be sufficiently different from the issuance of the Obligations so as to make such representations not adverse to our representation of you, or because the potential fox such adversity is remote or minor and outweighed by the considerarion that it is unlikely that advice given to the other client will be relevant to any aspect of the issuance of the Obligations. Execurion of this letter will signify the City's consent to ouY xepresentation of others consistent with the circumstances described in this paragraph. D. FEES Based upon: (i) our current understancling of the terms, structure, size and schedule of the financing represented by the Obligations; (u) the duries we will undertake pursuant to this engagement letter; (iu) the time we anricipate devoting to the financing; and (iv) the responsibilities we will assume in connecrion therewith, our fee will be $10,000 for the first $1,000,000 in principal amount of Obligations sold, plus $2 per $1,000 of Obligations for all principal amounts in excess of $1,000,000, but with a minimum fee of $15,000. We will be reimbursed for our out-of-pocket expenses reasonably and necessarily incurred in connecrion with the authorization, issuance, and delivery of such Obligations, e.g. travel, photocopying, and similar expenses. In addirion, we will advance for the City and be reimbursed for the Attorney General filing fee, and said fee and expenses will be payable at the time of the delivery of and payment for the Obligations, but our fees are wholly contingent upon actual delivery of the Obligations. Fees for lirigarion, and any other special services not noYmally included in the legal services performed by bond counsel will be Page I A-3 - 13