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A TRUE COPY <br />CERTIFICATION ON LAST RACE <br />J.R. SMITH, CLERK <br />Government Investment Cooperative (LOGIC). These programs offer Texas government entities investment <br />options for their cash management programs based on the entities specific needs. The Firm and the <br />aforementioned affiliate's business with a client could create an incentive for the Firm to recommend to a <br />client a course of action designed to increase the level of a client's business activities with the affiliates or to . <br />recommend against a course of action that would reduce or eliminate a client's business activities with the <br />affiliates. This potential conflict is mitigated by the fact that the Firm and affiliates are subject to their own <br />comprehensive regulatory regimes. <br />II. PlainsCapital Bank Aftiliate Conflict. The Firm, directly and through affiliated companies, <br />provides or may provide services/advice/products to or on behalf of clients that are related to the Firm's <br />advisory activities within the Scope of Services outlined in the Agreement. Affiliate, PlainsCapital Bank, <br />provides banking services to municipalities including loans and custody. The Firm and the aforementioned <br />affiliate's business with a client could create an incentive for the Firm to recommend to a client a course of <br />action designed to increase the level of a client's business activities with the affiliates or to recommend against <br />a course of action that would reduce or eliminate a client's business activities with the affiliates. This potential <br />conflict is mitigated by the fact that the Firm and affiliates are subject to their own comprehensive regulatory <br />regimes. <br />III. Other Municipal Advisor or Underwriting Relationships. The Firm serves a wide variety of other <br />clients that may from time to time have interests that could have a direct or indirect impact on the interests of <br />Client. For example, the Firm serves as municipal advisor to other municipal advisory clients and, in such <br />cases, owes a regulatory duty to such other clients just as it does to Client. These other clients may, from time <br />to time and depending on the specific circumstances, have competing interests, such as accessing the new <br />issue market with the most advantageous timing and with limited competition at the time of the offering. In <br />acting in the interests of its various clients, the Firm could potentially face a conflict of interest arising from <br />these competing client interests. In other cases, as a broker-dealer that engages in underwritings of new <br />issuances of municipal securities by other municipal entities, the interests of the Firm to achieve a successful <br />and profitable underwriting for its municipal entity underwriting clients could potentially constitute a conflict <br />of interest if, as in the example above, the municipal entities that the Firm serves as underwriter or municipal <br />advisor have competing interests in seeking to access the new issue market with the most advantageous timing <br />and with limited competition at the time of the offering. None of these other engagements or relationships <br />would impair the Firm's ability to fulfill its regulatory duties to Client. <br />IV. Secondary Market Transactions in Client's Securities. The Firm, in connection with its sales and <br />trading activities, may take a principal position in securities, including securities of Client, and therefore the <br />Firm could have interests in conflict with those of Client with respect to the value of Client's securities while <br />held in inventory and the levels of mark-up or mark-down that may be available in connection with purchases <br />and sales thereof. In particular, the Firm or its affiliates may submit orders for and acquire Client's securities <br />issued in an Issue under the Agreement from members of the underwriting syndicate, either for its own <br />account or for the accounts of its customers. This activity may result in a conflict of interest with Client in <br />that it could create the incentive for the Firm to make recommendations to Client that could result in more <br />advantageous pricing of Client's bond in the marketplace. Any such conflict is mitigated by means of such <br />activities being engaged in on customary terms through units of the Firm that operate independently from the <br />Firm's municipal advisory business, thereby reducing the likelihood that such investment activities would <br />have an impact on the services provided by the Firm to Client. under this Agreement. <br />V. Broker -Dealer and Investment Advisory Business. The Firm is dually registered as a broker-dealer <br />and an investment advisor that engages in.a broad range of securities -related activities to service its clients, <br />in addition to serving as a municipal advisor or underwriter. Such securities -related activities, which may <br />include but are not limited to the buying and selling of new issue and outstanding securities and investment <br />advice in connection with such securities, including securities of Client, may be undertaken on behalf of, or <br />16 <br />