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ORIGINAL CONTRACT
RETURN TO FINANCE DEPT.
KPMG LLP Telephone 513 421 6430
312 Walnut Street, Suite 3400
Cincinnati, OH 45202 Internet www.us.kpmg.com

December 11, 2013

Scott C. Stiles, ICMA-CM


Acting City Manager
City of Cincinnati
Room 104, City Hall
801 Plum Street
Cincinnati, OH 45202

Mr. Stiles:

Thank you for considering KPMG LLP (“KPMG”) to provide advisory services related to the City of
Cincinnati (“Client” or “City”) for the Cincinnati Streetcar project (“Project”). This letter, along with
KPMG’s modified terms and conditions, describes our proposed scope of work and professional fee
arrangement as an order for services, which constitute the entire agreement between KPMG and Client
with respect to the subject matter hereof and supersedes all other oral and written representations,
understandings or agreements relating to the subject matter hereof except as specifically modified or
included by reference in this letter.

PROJECT BACKGROUND

The Cincinnati Streetcar is a modem streetcar system designed to link major employment centers in
Downtown and Uptown, connecting through Cincinnati’s historic Over the Rhine neighborhood. The
first phase of the Project is budgeted at approximately $150 million and is being delivered under a
traditional delivery method.

In early December, the City suspended the Project including all spending and incurring of additional
costs by the City for construction, in order to permit the City to obtain an analysis of the total costs
associated with continuation or suspension of the Project.

SCOPE OF WORK
The City has requested assistance from KPMG in performing the following scope of work:

1. Evaluate cost associated with terminating the Project


2. Evaluate cost associated with completing the current phase of the Project
3. Evaluate cost associated with operating and maintaining the current phase of the Project for 30 years
4. Evaluate assumptions made by the City in its calculations regarding the cost to complete and the cost
to terminate the current phase of the Project

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Page 2 of 6
December 11,2013

APPROACH

1) Evaluate cost associated with terminating the Project


a) Prepare summary of contracts, purchase orders, committed cost, and other Project costs
b) Collect and record Project invoices paid to date
c) Collect and record outstanding Project invoices
d) Collect estimate of unbilled Project work performed to date
e) Confirm any cancellation costs, penalties, and termination costs associated with cancelling the
Project
f) For Project work completed to date, review City’s estimate of cost to restore to original state.
This will not include an independent estimate, rather analysis of the process and documentation
prepared by City
g) Summarize information in a report including estimate of cost associated with terminating the
Project and description of elements included and not included in the estimate

2) Evaluate cost associated with completing the current phase of the Project
a) Prepare summary of contracts, purchase orders, committed cost, and other Project costs
b) Collect and record Project invoices paid to date
c) Collect and record outstanding Project invoices
d) Collect estimate of unbilled Project work performed to date
e) Review Project and cost completion estimates prepared by City for each line item in the Project
budget. This will not include an independent estimate, rather analysis of the process and
documentation prepared by City, including review of percentage completion on major work
packages, consideration of any change orders, and overall completeness of documentation
prepared by the City related to estimates and forecasts
I) Summarize information in a report including estimate of cost associated with completing the
current phase of the Project and description of elements included and not included in the estimate

3) Evaluate cost associated with operating and maintaining the current phase of the Project for 30 years
a) Prepare summary of contracts or estimates compiled or prepared by the City associated with
operating and maintaining the current phase of the Project for 30 years
b) Evaluate the City’s assumptions included in the operating and maintenance cost estimate
c) Summarize information in a report including estimate of cost associated with operating and
maintaining the current phase of the Project for 30 years and a description of elements included
and not included in the City’s estimate

4) Evaluate assumptions made by the City in its calculations regarding the cost to complete and the cost
to terminate the current phase of the Project
a) Obtain original Project budget prepared by the City and related assumptions
b) Obtain estimate of cost to terminate the Project prepared by the City and related assumptions
c) Evaluate and analyze assumptions and other estimates, and summarize in a report
Page 3 of 6
December 11, 2013

DELIVERABLES

KPMG’ s deliverables under this engagement will include a written report summarizing the work
performed and any observations, limitations or conclusions reached during our analysis.

KPMG SERVICE TEAM


I, Geno Armstrong, will participate as Engagement Principal, maintaining overall responsibility for the
engagement, including billing and client relations. John I-lerzog will serve as the engagement Managing
Director and will be actively involved in the performance of the engagement and will use such other staff
for assistance as deemed necessary.

PROFESSIONAL FEES AND TIMING


We will be compensated for fees and expenses incurred on this engagement. Total amount payable by the
City under this contract shall not exceed $250,000. Our fees are based upon the actual hours of
professional service rendered extended by the hourly rates of the professional.

PrincipallManaging Director $495


Director/Senior Manager $450
Manager $425
Senior Associate $350
Associate $295

Out-of-Pocket Expenses: Our professional fees do not include out-of-pocket expenses incurred for travel,
meals, lodging, printing, copying, shipping, and other administrative expenses, which will be billed
separately.

We will submit our billings on a monthly basis to be paid in thU within 30 days. We reserve the right to
halt further services until payment is received on past due invoices.

OTHER MATTERS
The services, fees, and delivery schedule for these services are based upon the following assumptions,
representations, or information supplied by the City.
KPMG is not responsible for and will not make management decisions relating to this engagement or any
other aspect of the City’s business. The City shall have responsibility for making all decisions with
respect to the management and administration of its construction projects.

By accepting this proposal, the City accepts responsibility for the substantive outcomes of this
engagement and, therefore, has a responsibility to be in a position in fact and appearance to make an
informed judgment on the results of this engagement and that the City will comply with the following:

• Designate a qualified management level individual to be responsible and accountable for


overseeing the engagement

• Establish and monitor the performance of the engagement to ensure that it meets management’s
objectives
Page 4 of S
• December 11,2013

• Make any decisions that involve management functions related to the engagement and accept fUll
responsibility for such decisions

• Evaluate the adequacy of the services performed and any findings that result

• KPMG’s work under this engagement does not include a review or audit of financial statements,
tax services, or other services of KPMG not listed in this engagement.

KPMG will provide our services in accordance with the terms and conditions of this letter. Such services
constitute an advisory engagement conducted under the American Institute of Certified Public
Accountants (“AICPA”) Standards for Consulting Services, and are not intended to be an audit, review,
examination, attestation, or agreed upon procedures engagement as those services are defined in AICPA
literature applicable to such engagements. Our work will be more limited than would be necessary to
express an opinion on the company’s system of internal control, and will not necessarily disclose all
control weaknesses. Accordingly, these services shall not result in the issuance of a written
communication to third parties by KPMG directly reporting on financial data or internal controls or
expressing a conclusion or any other form of assurance.

Although KPMG does not anticipate any questions to arise during this engagement that involve legal
interpretations, we will refer any such questions to the City’s designee(s). The scope of work does not
require that KPMG make any legal interpretations or render any legal advice, and the parties hereby
agree that in connection with KPMG’s performance of the services under this engagement we shall not
do so. All legal interpretations and rendering of legal advice shall be the City’s responsibility.

KPMG LLP in the US provides audit, tax and advisory services to Cincinnati Bell Telephone Company,
LLC. KPMG LLP in the US provides audit, tax and advisory services and one or more other member
firms of KPMG International provide advisory services to Time Warner Cable Midwest LLC. KPMG
LLP in the US and one or more other member firms of KPMG International provide audit, tax and
advisory services to Level 3 Communications, Inc. KPMG LLP in the US provides tax services and one
or more other member firms of KPMG International provide audit, tax and advisory services to CAF
USA, Inc. KPMG LLP in the US provides audit and tax services to LTK Consulting Services. KPMG
LLP in the US provides tax and advisory services and one or more other member firms of KPMG
International provide audit, tax and advisory services to Parsons Brinckerhoff. KPMG LLP in the US
and one or more other member firms of KPMG International provide tax and advisory services to Duke
Energy Ohio. By accepting this engagement, the City agrees the services proposed under this
engagement letter to do not constitute a conflict of interest based on the relationships outlined herein.

As a large professional services organization, KPMG is engaged by new clients every day and cannot
ensure that an engagement for the involved parties will not be accepted by KPMG. We take no
responsibility for monitoring possible conflicts that could arise during the course of the engagement,
although we will inform you promptly should any come to our attention. We reserve the right to resign
from this engagement at any time if conflicts arise or become known to us that, in our judgment, would
impair our ability to perform objectively.

The City represents to KPMG that it has obtained all legal consents necessary to award this contract to
KPMG, and that award of this contract is made in accordance with all applicable law, regulations, rules,
policies, and requirements, including but not limited to any applicable laws governing sole or single
source contracts.
Page 5 of 6
December II, 2013

This engagement is subject to the Standard Terms and Conditions included as an attachment with the
following modifications and inclusions:

1. Paragraph 4(c) is modified to delete everything after the first sentence, and to insert a new second
sentence: “KPMG may, in its sole discretion, mark such advice, recommendations, information,
Deliverables, or other work product to reflect the foregoing.”

2. Paragraph 6 is deleted and replaced with the following: Limitation on Damages “Notwithstanding
-

anything else in this Engagement Letter (including its attachments) to the contrary, the liability of the
Client Parties and the KPMG Parties to one another, on account of any actions, damages, claims,
liabilities, costs, expenses or losses in any way arising out of or relating to the services performed
under the Engagement Letter shall be limited to the amount of fees paid or owing to KPMG under the
Engagement Letter. In no event shall any of the Client Parties or any of the KPMG Parties be liable
for consequential, special, indirect, incidental, punitive or exemplary damages, costs, expenses, or
losses (including, without limitation, lost profits and opportunity costs). This Paragraph shall apply
regardless of the form of action, damage, claim, liability, cost, expense, or loss asserted, whether in
contract, statute, tort (including but not limited to negligence) or otherwise.”

3. Paragraph 8 is deleted in its entirety.

4. Paragraph 11(b) is modified to (i) insert “To the extent permitted by Ohio law,’ at the beginning of the
first sentence; and (ii) insert “or as required by the Ohio Public Records Act?! after “Paragraph 15
below” in the second sentence.

5. Paragraph 13 is modified to replace “New York” with “Ohio.”

6. Paragraph 14 is deleted and replaced with the following: “The parties agree that any dispute or claim
arising out of or relating to the Engagement Letter or the services provided thereunder shall first be
submitted to non-binding mediation. Mediation may take place at a location to be designated by the
parties using the Mediation Procedures of the International Institute for Conflict Prevention and
Resolution, with the exception of paragraph 2 (Selecting the Mediator). If, after good faith efforts, the
parties are unable to resolve their dispute through mediation within 90 days after the issuance by one
of the parties of a request for mediation, then the parties are free to pursue all other legal and equitable
remedies available to them. Nothing herein shall preclude KPMG from filing a timely formal claim in
accordance with applicable Ohio law provided, however, that KPMG shall, if permitted, seek a stay of
said claim during the pendency of any mediation. Either party may seek to enforce any written
agreement reached by the parties during mediation in any court of competent jurisdiction.

7. Paragraphs 15(a), (b), and (e) are deleted in their entirety.

8. Appendix A is deleted in its entirety.


Page 6 of 6
December 11,2013

Thank you for allowing us to assist you in this matter. If this letter and the attached terms and conditions
correctly state our arrangement, please sign the enclosed copy and return it to us. If you have any
questions, please call me at (415) 963-7125.

Very truly yours,

KPMG LLP

By:

Geno Armstrong
Principal

Cc: John P. Curp, City Solicitor, City of Cincinnati

Accepted by: City of Cincinnati

By:

Title: ,44-t ______


, ,
DATE
Date: /2/43 ~‘5 • n îô -
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BY _-~
KPMG LLP
Standard Terms and Conditions for Advisory and Tax Services

Services; Client Responsibilities. 4. Ownership and Use of Deliverables.

(a) References herein to Client shall refer to the addressee of the (a) KPMG has created, acquired, owns or otherwise has rights in, and
Proposal or Engagement Letter to which these Standard Terms and may, in connection with the performance of services under the
Conditions are attached or incorporated (the “Engagement Letter”) Engagement Letter, use, provide, modii3’, create, acquire or
and references herein to KPMG shall refer to KPMG LLP, a otherwise obtain rights in, (i) concepts, ideas, methods,
Delaware registered limited liability partnership and the United methodologies, procedures, processes, know-how, techniques,
States member firm of the 1(2MG network of independent firms (the models, templates and software and (ii) the general elements of
“KPMG Network”). Client, its parent company and their affiliates, style, design, art work and graphics and content of general
and their respective directors, officers, employees, and agents are applicability included in KPMG’s Deliverables (as defined below)
collectively referred to herein as the “Client Parties.” KPMG, the or work product not specific to Client or the services under the
other member firms of the KPMG Network and firms and entities engagement letter (collectively, the “KPMG Property”). KPMG
controlled by, or under common control with, one or more such retains all ownership and use rights in the KPMG Property. Client
member finns (collectively, the “Member Fints”), and their shall acquire no rights or interest in the KPMG Property, except as
affiliates, and their respective partners, principals, employees, and expressly provided in the next paragraph. KPMG acknowledges
agents are collectively referred to herein as the “KPMG Parties.” that KPMG Property shall not include any of Client’s confidential
information or tangible or intangible property, and KPMG shall
(b) It is understood and agreed that KPMG’s services may include have no ownership rights in such property.
advice and recommendations; hut all decisions in connection with
the implementation of such advice and recommendations shall be (b) Except for KPMG Property, and upon flu and final payment to
the responsibility of, and made by, Client. 1(2MG will not perform KPMG under the Engagement Letter, the tangible items specified as
management functions or make management decisions for Client. deliverables or work product in the Engagement Letter including
any intellectual property rights appurtenant thereto (the
(c) If KPMG audits the financial statements of Client or provides any “Deliverables”) will become the property of Client. Jf any KPMG
other attestation services to Client, the rules of the American Property is contained in any of the Deliverables, KPMG hereby
Institute of Certified Public Accountants (“AICPA”) require Client grants Client a royalty-free, paid-up, non-exclusive, perpetual
to agree to the following provisions of this Paragraph 1(c). In license to use such KPMG Property in connection with Client’s use
connection with KPMG’s provision of services under the of the Deliverables. Client acknowledges and agrees that KPMG
Engagement Letter, Client agrees that Client, and not KPMO, shall shall have the right to retain for its files copies of each of the
perform the following functions: (i) make all management decisions Deliverables, subject to the provisions of Paragraph 11 below.
and perform all management functions; (ii) designate an individual
who possesses suitable skill, knowledge and experience, preferably (c) Client acknowledges and agrees that any advice, recommendations,
within senior management, to oversee such services, and to evaluate information, Deliverables or other work product provided to Client
the adequacy and results of such services; (iii) accept responsibility by KPMG in connection with the services under the Engagement
for the results of such services; and (iv) establish and maintain Letter is intended for Client’s sole benefit and KPMG does not
internal controls over the processes with which such services are authorize any other party to rely upon such advice,
concemed, including monitoring on-going activities. recommendations, information, Deliverables or other work product
and any such reliance shall be at such party’s sole risk. Client
(d) Subsequent to the completion of this engagement, KPMG will not agrees that if it makes such advice, recommendations, information
update its advice, recommendations or work product for changes or or work product available to any third party other than as expressly
modifications to the law and regulations, or to the judicial and permitted by the Engagement Letter the provisions of Paragraph
administrative interpretations thereof, or for subsequent events or 8(b) shall apply unless Client provides the written notice to the third
transactions, unless Client separately engages KPMG to do so in party in substantially the form of Appendix A hereto (the “Notice”),
writing after such changes or modifications, interpretations, events which Notice shall be acknowledged in writing by such third party
or transactions. and returned to Client. Upon request, Client shall provide 1(2MG
with a copy of the foregoing Notice and acknowledgement and any
2. Tax on Services. All fees, charges and other amounts payable to notice and acknowledgement sent to Client by such third party as
KPMG under the Engagement Letter do not include any sales, use, contemplated by the Notice. Client may only make a Deliverable
excise, value added or other applicable taxes, tariffs or duties, bearing the “KPMG” name or logo available to a third party in its
payment of which shall be Client’s sole responsibility, excluding entirety. Notwithstanding the foregoing, (i) in the event of a
any applicable taxes based on KPMG’s net income or taxes arising disclosure made by Client that is required by law, that is made to a
from the employment or independent contractor relationship regulatory authority having jurisdiction over Client or that is made
between KPMG and its personnel. pursuant to Paragraph 18(a) below, no acknowledgement of the
Notice shall be required and (ii) no Notice or acknowledgement
3. Termination. Either party may terminate the Engagement Letter at shall be required with respect to disclosures expressly authorized by
any time by giving written notice to the other party not less than 30 the Engagement Letter.
calendar days before the effective date of termination.
5. Warranties. KPMG’s services under the Engagement Letter are
subject to and will be performed in accordance with AICPA and
other professional standards applicable to the services provided by
KPMG under the Engagement Letter and in accordance with the

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Standard Terms and Conditions for Advisory and Tax Services

tents thereof. KPMG disclaims all other warranties, either express 8. Indemnification.
or implied.
(a) KPMG agrees to indemnil~’, hold harmless and defend the Client
6. Limitation on Damages. Except for the respective indemnification Parties from and against any and all Liabilities for physical injury
obligations of Client and KPMG set forth herein, the liability of the to, or illness or death of, any person regardless of status, and
Client Parties and the KPMG Parties to one another, on account of damage to or destruction of any tangible property, which any of the
any actions, damages, claims, liabilities, costs, expenses or losses in Client Parties may sustain or incur, to the extent such Liabilities
any way arising out of or relating to the services performed under result from the negligence or wilIthI misconduct of the KPMG
the Engagement Letter shall be limited to the amount of fees paid or Parties. Client agrees to indemniW, hold harmless and defend the
owing to KPMG under the Engagement Letter. In no event shall KPMG Parties from and against any and all Liabilities for physical
any of the Client Parties or any of the KPMG Parties be liable for injury to, or illness or death of, any person regardless of status, and
consequential, special, indirect, incidental, punitive or exemplary damage to or destruction of any tangible property, which any of the
damages, costs, expenses, or losses (including, without limitation, KPMG Parties may sustain or incur, to the extent such Liabilities
lost profits and opportunity costs). For avoidance of doubt, any result from the negligence or willful misconduct of the Client
damages awarded against any of the Client Parties or the KPMG Parties.
Parties based on a third party claim suhject to indemnification
hereunder shall not be subject to the disclaimer in the previous (b) In accordance with Paragraph 4(c), Client agrees to indemni&,
sentence. The provisions of this Paragraph shall apply regardless of defend and hold harmless the KPMG Parties from and against any
the font of action, damage, claim, liability, cost, expense, or loss and all Liabilities incurred or suffered by or asserted against any of
asserted, whether in contract, statute, tort (including but not limited the KPMG Parties in connection with a third party claim to the
to negligence) or otherwise. extent resulting from such party’s reliance upon KPMG’s advice,
recommendations, information, Deliverables or other work product
7. Infringement. as a result of Client’s disclosure of such advice, recommendations,
information or work product without adhering to the notice
(a) KPMG hereby agrees to indemnify, hold harmless and defend the requirements of Paragraph 4(c) above. The foregoing
Client Parties from and against any and all claims, liabilities, losses, indemnification obligation shall apply regardless of whether the
expenses (including reasonable attorneys’ fees), fines, penalties, third party claim alleges a breach of contract, violation of statute or
taxes or damages (collectively “Liabilities”) asserted by a third party tort (including without limitation negligence) by KPMG.
against any of the Client Parties to the extent such Liabilities result
from the infringement by the Deliverables (including any KPMG (c) The party entitled to indemnification (the “Indemnified Party”) shall
Property contained therein) of such third party’s patents issued as of promptly noti& the party obligated to provide such indemnification
the date of the Engagement Letter, trade secrets, trademarks or (the “Indemnit3’ing Party”) of any claim for which the Indemnified
copyrights. The preceding indemnification shall not apply to any Party seeks indemnification. The Indemnil~ing Party shall have the
infringement to the extent arising out of (i) use of the Deliverables right to conduct the defense or settlement of any such claim at the
other than in accordance with applicable documentation or Indemnifying Party’s sole expense, and the Indemnified Party shall
instructions supplied by KPMG or other than for Client’s internal cooperate with the Indemnifying Party. The party not conducting
business purposes; (ii) any alteration, modification or revision of the the defense shall nonetheless have the right to participate in such
Deliverables not expressly agreed to in writing by KPMG; or (iii) defense at its own expense. The Indemnified Party shall have the
the combination of the Deliverables with materials not supplied or right to approve the settlement of any claim that imposes any
approved by KPMG. liability or obligation other than the payment of money damages for
which the Indemnifying Party has accepted responsibility.
(b) In case any of the Deliverables (including any KPMG Property
contained therein) or any portion thereof is held, or in KPMG’s 9. Cooperation; Use of Information.
reasonable opinion is likely to be held, to constitute infringement,
KPMG may, within a reasonable time, at its option either; (i) secure (a) Client agrees to cooperate with KPMG in the performance of the
for Client the right to continue the use of such infringing item; or services under the Engagement Letter and shall provide or arrange
(ii) replace, at KPMG’s sole expense, such item with a substantially to provide KPMG with timely access to and use of the personnel,
equivalent non-infringing item or modi~’ such item so that it facilities, equipment, data and information necessary for KPMG to
becomes non-infringing. In the event KPMG is, in its reasonable perform the services under the Engagement Letter. The
discretion, unable to perform either of the options described in Engagement Letter may set forth additional details regarding
clauses (i) or (ii) above, Client shall return the allegedly infringing KPMG’s access to and use of personnel, facilities, equipment, data
item to KPMG, and KPMO’s sole liability shall be to reibnd to and information.
Client the amount paid to KPMG for such item; provided that the
foregoing shall not be construed to limit KPMO’s indemnification (b) The Engagement Letter may set forth additional obligations of
obligation set forth in Paragraph 7(a) above. Client in connection with the services under the Engagement Letter
necessary for KPMG to perform its obligations under the
(c) The provisions of this Paragraph 7 state KPMG’s entire liability and Engagement Letter. Client acknowledges that its failure to satisfy
Client’s sole and exclusive remedy with respect to any infringement these obligations could adversely affect KPMG’s ability to provide
or claim of infringement. the services under the Engagement Letter.

(c) Client acknowledges and agrees that KPMG will, in performing the
services under the Engagement Letter, base its conclusions on the

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Standard Terms and Conditions for Advisory and Tax Services

facts and assumptions that Client furnishes and that KPMG may use leadership projects, to improve the delivery of services to clients
data, material, and other information furnished by or at the request and to allow clients to evaluate various business transactions and
or direction of Client without any independent investigation or opportunities. The KPMG Parties will only use this information
verification and that KPMG shall be entitled to rely upon the without attribution to Client and under circumstances where Client
accuracy and completeness of such data, material and other will not be identified as the source of the information.
information. Inaccuracy or incompleteness of such data, material
and other information furnished to KPMG could have a material (d) KPMG may also use Client information and information relating to
adverse effect on KPMG’s conclusions. the services rendered under the Engagement Letter for the purpose
of permitting the 1(2MG Parties to access and share knowledge and
10. Jndependent Contractor. It is understood and agreed that each of information solely among the KPMG Parties. The KPMG Parties
the parties hereto is an independent contractor and that neither party receiving this information will be obligated to comply with
is or shall be considered an agent, distributor or representative of the confidentiality obligations with respect to such information in
other. Neither party shall act or represent itself, directly or by accordance with this Paragraph 11.
implication, as an agent of the other or in any manner assume or
create any obligation on behalf of, or in the name of, the other. (e) Each party shall exercise the same level of care to protect the other’s
information as it exercises to protect its own confidential
11. Confidentiality. information but in no event less than reasonable care, except to the
extent that applicable law or professional standards impose a higher
(a) “Confidential Information” means all documents, software, reports, requirement.
data, records, forms and other materials obtained by one party (the
“Receiving Party”) from the other party (the “Disclosing Party”) or (0 If the Receiving Party receives a subpoena or other validly issued
at the request or direction of the Disclosing Party in the course of administrative or judicial demand requiring it to disclose the
performing the services under the Engagement Letter: (i) that have Disclosing Party’s Confidential Information, the Receiving Party
been marked as confidential; (ii) whose confidential nature has been shall, unless prohibited by law, provide prompt written notice to the
made known by the Disclosing Party to the Receiving Party; or (iii) Disclosing Party of such demand in order to permit it to seek a
that due to their character and nature, a reasonable person under like protective order. So long as the Receiving Party gives notice as
circumstances would treat as confidential. Notwithstanding the provided herein, the Receiving Party shall be entitled to comply
foregoing, Confidential Information does not include information with such demand to the extent required by law, subject to any
which: (I) is already known to the Receiving Party at the time of protective order or the like that may have been entered in the matter.
disclosure by the Disclosing Party; (2) is or becomes publicly In the event the Receiving Party is requested to testis’ or produce its
known through no wrongful act of the Receiving Party; (3) is documents relating to the services under the Engagement Letter
independently developed by the Receiving Party without benefit of pursuant to subpoena or other legal process in judicial or
the Disclosing Party’s Confidential Information; (4) relates to administrative proceedings to which it is not a party, or in
infornution provided by KPMG relating to the tax treatment or tax connection with an informal inquiry or investigation with the
structure of any transaction; (5) the Receiving Party determines is consent of the Disclosing Party, the Disclosing Party shall reimburse
required to he maintained or disclosed by the Receiving Party under the Receiving Party for its time and expenses, including reasonable
sections 6011, 6111 or 6112 of the Intemal Revenue Code (“IRC”) attorney’s fees, incurred in responding to such requests.
or the regulations thereunder or under any similar or analogous
provisions of the laws of a state or other jurisdiction; or (6) is 12. Assignment. Subject to Paragraph 15 below, neither party may
received by the Receiving Party from a third party without assign, transfer or delegate any of its rights or obligations without
restriction and without a breach of an obligation of confidentiality. the prior written consent of the other party, such consent not to be
unreasonably withheld.
(b) The Receiving Party will deliver to the Disclosing Party or destroy
all Confidential Information of the Disclosing Party and all copies 13. Governing Law; Severability. The Engagement Letter and these
thereof when the Disclosing Party requests the same, except for Standard Terms and Conditions shall be governed by and construed
copies retained in work paper files or records, anything that may be in accordance with the laws of the State of New York, without
stored in back up media or other electronic data storage systems, regard to its conflict of laws provisions. In the event that any term
latent data and metadata. Except as otherwise set forth in this or provision of the Engagement Letter or these terms shall be held to
Paragraph 11 or Paragraph 15 below, the Receiving Party shall not be invalid, void or unenforceable, then the remainder of the
disclose to any person, firm or entity any Confidential Information Engagement Letter and these terms shall not be affected, and each
of the Disclosing Party without the Disclosing Party’s express, prior such term and provision shall be valid and enforceable to the fullest
written permission; provided, however, that notwithstanding the extent permitted by law.
foregoing, the Receiving Party may disclose Confidential
Information to the extent that it is required or necessary to be 14. Alternative Dispute Resolution.
disclosed pursuant to a statutory or regulatory provision or court or
administrative order, or, subject to appropriate conditions of (a) Any dispute or claim arising out of or relating to the Engagement
confidentiality, to fulfill professional obligations and standards Letter between the parties or the services provided thereunder shall
(including quality and peer review) or to submit and process an be submitted first to non-binding mediation (unless either party
insurance claim. elects to forego mediation by initiating a written request for
arbitration) and if mediation is not successful within 90 days afier
(c) The KPMG Parties may aggregate Client information with the issuance by one of the parties of a request for mediation then to
information from other sources in connection with thought binding arbitration in accordance with the Rules for Non-

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Standard Terms and Conditions for Advisory and Tax Services

Administered Arbitration of the International Institute for Conflict responsibility to cause these third party service providers to comply
Prevention and Resolution (the “IICPR”). Any issue concerning the with such conditions of confidentiality and KPMG shall be
extent to which any dispute is subject to arbitration, or any dispute responsible for any consequences of their failure to comply.
concerning the applicability, interpretation, or enforceability of
these dispute resolution procedures, including any contention that (d) Accordingly, Client consents to KPMG’s disclosure to a Member
all or part of these procedures is invalid or unenforceable, shall be Firm or third party service provider and the use by such Member
governed by the Federal Arbitration Act and resolved by the Firm and third party service provider of data and information,
arbitrators. By operation of this provision, the parties agree to including but not limited to Confidential Information, received from
forego litigation over such disputes in any court of competent or at the request or direction of Client for the purposes set forth in
jurisdiction. Paragraph 11 and this Paragraph 15.

(b) Mediation, if selected, may take place at a location to be designated (e) Any services performed by a Member Firm or third party service
by the parties using the Mediation Procedures of the IICPR, with the provider shall be performed in accordance with the terms of the
exception of paragraph 2 (Selecting the Mediator). Engagement Letter and these Standard Terms and Conditions,
including Paragraph 11 (Confidentiality), but KPMG shall remain
(c) Arbitration shall take place in New York, New York. The responsible to Client for the performance of such services. Client
arbitration panel shall have no power to award non-monetary or agrees that any claim relating to the services under the Engagement
equitable relief of any sort except as provided in IICPR Rule 13 Letter may only be made against KPMG and not any other Member
(Interim Measures of Protection). Damages that are inconsistent Firm or third party service provider referred to above.
with any applicable agreement between the parties, that are punitive
in nature, or that are not measured by the prevailing party’s actual 16. Miscellaneous.
damages shall be unavailable in arbitration or any other forum. In
no event, even if any other portion of these provisions is held to be (a) Sarbanes-Oxley. Except as otherwise set forth in the Engagement
invalid or unenforceable, shall the arbitration panel have power to Letter, in accepting this engagement, Client acknowledges that
make an award or impose a remedy that could not be made or completion of this engagement or acceptance of Deliverables
imposed by a court deciding the matter in the same jurisdiction. resulting from this engagement will not constitute a basis for
Client’s assessment or evaluation of internal control over financial
(d) Either party may seek to enforce any written agreement reached by reporting and disclosure controls and procedures, or its compliance
the parties during mediation, or to confirm and enforce any final with its principal officer certification requirements under Section
award entered in arbitration, in any court of competent jurisdiction. 302 of the Sarbanes-Oxley Act of 2002 (the “Act”). The services
under the Engagement Letter shall not be construed to support
(e) Notwithstanding the agreement to such procedures, either party may Client’s responsibilities under Section 404 of the Act requiring each
seek equitable relief to enforce its rights in any court of competent annual report filed under Section 13(a) or 15(d) of the Securities
jurisdiction. Exchange Act of 1934 to contain an internal control report from
management.
15 Use of Member Firms and Third Party Service Providers.
(b) Electronic Communications. KPMG and Client may
(a) Client acknowledges and agrees that the services under the communicate with one another by electronic mail or otherwise
Engagement Letter, including any applicable tax advice, may be transmit documents in electronic form during the course of this
performed by a Member Firm located outside of the United States. engagement. Each party accepts the inherent risks of these forms of
Client understands that each Member Firm is a separate, distinct and communication (including the security risks of interception of or
independent legal entity and is not a partner, principal, agent or unauthorized access to such communications, the risks of corruption
affiliate of KPMG and KPMC1 is not a partner, principal, agent or of such communications and the risks of viruses or other harmful
affiliate of any other Member Firm. devices). Client agrees that the final hardcopy version of a
document, including a Deliverable, or other written communication
(b) Client further acknowledges that in connection with the that KPMG transmits to Client shall supersede any previous
performance of services under the Engagement Letter, KPMG and versions transmitted electronically by KPMO to Client unless no
Member Firms, in their discretion or at Client’s direction, may such hard copy is transmitted.
utilize the services of third party service providers within and
without the United States to complete the services under the (c) California Accountancy Act. For engagements where services
Engagement Letter. will be provided by KPMG through offices located in California,
Client acknowledges that certain of KPMG’s personnel who may be
(c) KPMG uses third party service providers within and without the considered “owners’ under the California Accountancy Act and
United States to provide at KPMG’s direction administrative and implementing regulations (Califomia Business and Professions
clerical services to KPMG. These third party service providers may Code section 5079(a); 16 Cal. Code Regs. sections 51 and 51.1) and
in the performance of such services have limited access to who may provide services in connection with this engagement, may
information, including but not limited to Confidential Information, not be licensed as certified public accountants under the laws of any
received by KPMG from or at the request or direction of Client. of the various states.
KPMG represents to Client that each such third party service
provider has agreed to conditions of confidentiality with respect to (d) Volume Rebates. Where KPMG is reimbursed for expenses, it is
Client’s information to the same or similar extent as KPMG has KPMG’s policy to bill clients the amount incurred at the time the
agreed to pursuant to Paragraph 11 above. KPMG has full good or service is purchased. If KPMG subsequently receives a

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KPMG LLP
Standard Terms and Conditions for Advisory and Tax Services

volume rebate or other incentive payment from a vendor relating to


such expenses, KPMG does not credit such payment to Client. 18. Additional Terms for Engagements Involving Tax Services.
Instead, KPMG applies such payments to reduce its overhead costs,
which costs are taken into account in determining KPMG’s standard (a) Notwithstanding anything to the contrary set forth herein, no
billing rates and certain transaction charges that may be charged to provision in the Engagement Letter or these Standard Terms and
clients. Conditions is or is intended to be construed as a condition of
confidentiality within the meaning of IRC sections 6011, 6111,
(e) Use of Names and Logos. Except as permitted by law or the terms 6112 or the regulations thereunder, or under any similar or
of the Engagement Letter, neither party shall acquire hereunder any analogous provisions of the laws of a state or other jurisdiction. In
right to use the name or logo of the other party or any part thereof. particular, Client (and each employee, representative, or other agent
Any such use shall require the express written consent of the owner of Client) may disclose to any and all persons, without limitation of
party. any kind, the tax treatment and tax structure of any transaction
within the scope of this engagement and all materials of any kind
(1) Privileged Communications. Information relating to advice (including opinions and other tax analyses) that are provided to
KPMO provides to Client, including communications between Client relating to such tax treatment and tax structure. Client also
KPMG and Client and material KPMG creates in the course of agrees to use commercially reasonable efforts to inform KPMG of
providing advice, may be privileged and protected from disclosure any conditions of confidentiality imposed by third party advisors
to the IRS or other governmental authority in certain circumstances. with respect to any transaction on which KPMO advice is requested.
As KPMG is not able to assert the privilege on Client’s behalf with Such notification must occur prior to KPMG providing any advice
respect to any communications for which privilege has been waived, with respect to the transaction.
Client agrees to promptly noti1~’ KPMG of any such waivers,
whether resulting from communications with KPMG or third parties (b) Treasury regulations under IRC section 6011 require taxpayers to
in the same or a related matter. Client also understands that disclose to the IRS their participation in reportable transactions and
privilege may not be available for communications with an audit IRC section 6707A imposes strict penalties for noncompliance.
client and that KPMG personnel providing audit and non-audit Client agrees to use commercially reasonable efforts to inform
services will discuss matters that may affect the audit to the extent KPMG if Client is required to disclose any transaction covered by
required by applicable professional standards. Client agrees that the Engagement Letter as a reportable transaction to the IRS or to
KPMG will not assert on Clients behalf any claim of privilege any state or other jurisdiction adopting similar or analogous
unless Client specifically instructs KPMG in writing to do so after provisions. JRC section 6111 requires a material advisor with
discussing the specific request and the grounds on which such respect to a reportable transaction to disclose information on the
privilege claim would be made. Notwithstanding the foregoing, transaction to the IRS by a prescribed date, and IRC section 6112
Client acknowledges that in no event will KPMG assert any claim requires the material advisor to maintain, and make available to the
of privilege that KPMG concludes, after exercising reasonable IRS upon request, a list of persons and other information with
judgment, is not valid. respect to the transaction. KPMG will use commercially reasonable
efforts to inform Client if KPMG provides Client’s identit~’ing
(g) Active Spreadsheets and Electronic Files. KPMG may use information to the IRS under IRC section 6111 or 6112, or to any
models, electronic files and spreadsheets with embedded macros state or other jurisdiction adopting similar or analogous provisions.
created by KPMG to assist KPMG in providing the services under
the Engagement Letter. If Client requests a working copy of any (c) Unless expressly provided for, KPMG’s services do not include
such model, electronic file or spreadsheet, KPMG may, at its representing Client in the event of a challenge by the IRS or other
discretion, make such item available to Client for its internal use tax or revenue authorities.
only and such item shall be considered a Deliverable subject to
Paragraph 4 above; provided that Client is responsible for obtaining (d) In rendering tax advice, KPMG may consider, for example, the
the right to use any third party products necessary to use or operate applicable provisions of the Internal Revenue Code of 1986, and the
such item. Employee Retirement Income Security Act of 1974, each as
amended, and the relevant state, local and foreign statutes, the
(h) Non-Solicitation. During the term of the Engagement Letter and regulations thereunder, income tax treaties, and judicial and
for one year thereafter, neither party shall solicit for hire as an administrative interpretations, thereof. These authorities are subject
employee, consultant or otherwise any of the other party’s personnel to change, retroactively or prospectively, and any such changes
who have had direct involvement with the services under the could affect the validity of KPMG’s advice.
Engagement Letter, without such other party’s express written
consent. This prohibition shall not apply to any offers of
employment which result from a general solicitation for
employment, including without limitation, through the Internet,
newspapers, magazines and radio.

17. Entire Agreement. The Engagement Letter and these Standard


Terms and Conditions, including the Exhibits and Appendices
hereto and thereto, constitute the entire agreement between KPMG
and Client with respect to the services under the Engagement Letter
and supersede all other oral and written representations,
understandings or agreements relating thereto.

Page 5 October 1,2011 Release*


APPENDIX A

fFORM OF NOTICE AND ACKNOWLEDGEMENT]

[Name of Third Party]


Address

The advice, recommendations and information in the document included with this notice were
prepared for the sole benefit of [Name of Client], based on the specific facts and circumstances
of [Name of Client], and its use is limited to the scope of KPMG’s engagement for [Name of
Client]. It has been provided to you for informational purposes only and you are not authorized
by KPMG to rely upon it and any such reliance by you or anyone else shall be at your or their
own risk. You acknowledge and agree that KPMG accepts no responsibility or liability in
respect of the advice, recommendations or other information in such document to any person or
organization other than [Name of Client]. You shall have no right to disclose the advice,
recommendations or other information in such document to anyone else without including a copy
of this notice and, unless disclosure is required by law or to fulfill a professional obligation
required under applicable professional standards, obtaining a signed acknowledgement of this
notice from the party to whom disclosure is made and you provide a copy thereof to [Name of
Client]. You acknowledge and agree that you will be responsible for any damages suffered by
KPMG as a result of your failure to comply with the terms of this notice.

Please acknowledge your acceptance of the foregoing by signing and returning to us a copy of
this letter.*

Very truly yours,

[Name of Client]

By: _____________

Name:
Title:

Accepted and Agreed to on this — day of ____, 20_ by:*

[Name of Third Party

By: _____________

Name:
Title:
*Remove in the event of a disclosure made by Client that is required by law, that is made to a
regulatory authority having jurisdiction over Client or that is made pursuant to Paragraph 18(a)
of the Standard Terms and Conditions in which case an acknowledgement is not required by the
terms of Paragraph 4(c).

PageS October 1,2011 Release*