MDD Resolution No. 364RESOLUTION NO. 364
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN
MUNICIPAL DEVELOPMENT DISTRICT AUTHORIZING THE PRESIDENT TO
EXECUTE AN ENGAGEMENT LETTER WITH BRACEWELL LLP, FOR
SERVICES AS BOND COUNSEL AND OTHER LEGAL SERVICES IN
CONNECTION WITH THE HOTEL/CONVENTION CENTER PROJECT;
AUTHORIZING PAYMENT OF AN AMOUNT NOT TO EXCEED TWO HUNDRED
THOUSAND AND N0/100 DOLLARS ($200,000.00); MAKING OTHER
PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE
DATE THEREOF.
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BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE BAYTOWN MUNICIPAL
DEVELOPMENT DISTRICT:
Section 1: That the Board of Directors of the Baytown Municipal Development District
hereby finds that the expenditures authorized herein are in support of improvements, which satisfy the
purposes for which the funds can be expended pursuant to Chapter 377 of the Texas Local Government
Code and/or Section 3888.102 of the Special District Local Laws Code. All required findings pursuant
thereto are hereby declared to have been made and adopted as findings of the Board of Directors.
Section 2: That the Board of Directors of the Baytown Municipal Development District
hereby authorizes the President to execute an engagement letter with Bracewell LLP, for services as bond
counsel and other legal services in connection with the Hotel/Convention Center Project. A copy of said
engagement letter is attached hereto as Exhibit "A," and incorporated herein for all intents and purposes.
Section 3: That the Board of Directors of the Baytown Municipal Development District
hereby authorizes the payment of an additional amount not to exceed TWO HUNDRED THOUSAND
AND N0/100 DOLLARS ($200,000.00) to the City of Baytown in accordance with the agreement
referenced in Section 2 hereof.
Section 4: This resolution shall take effect immediately
Board of Directors of the Baytown Municipal Development District.
INTRODUCED, READ and PASSED by the affirmative
Baytown Municipal Development District, this the 13`h day of DecJ
A
ETICIA BRYSCH, Assistant Secretary
APPROVED AS TO FORM:
ACIO RAMIREZ, SR., Geer 1 Counsel
and after its passage by the
of the Board of Directors of the
2018.
DONCARLOS, President
1'.cobfs0l\legal\Karen\FileslCity CounciMunicipal Development District\Resolutions\2018\December\BracewellEngagementLetter.doc
Exhibit "A"
BRACEWELL
November 28, 2018
Baytown Municipal Development District
c/o Ignacio Ramirez
City of Baytown, Texas
2401 Market Street
Baytown, TX 77522-0424
Re: Engagement letter— Baytown Municipal Development District— Hotel and Conference Center
Ladies and Gentlemen,
Thank you for engaging us to represent the Baytown Municipal Development District ("District"
or "Client") as bond counsel in connection with issuance of bonds or other obligations forthe construction
of a Hotel and Conference Center development (the "Project"). We appreciate the confidence you have
shown in Bracewell LLP ("Bracewell" or "Firm") and look forward to this opportunity to represent your
interests.
It is our practice to confirm the terms and conditions of our engagements, and that is the purpose
of this Engagement Letter and the attached Terms of Engagement. This engagement has been
approved by Bracewell subject to the conditions described in this letter.
Scope of Engagement
Bracewell will represent the District in connection with its issuance, from time to time, of bonds
and other obligations ("Obligations") in connection with the Project.
We agree that our services as bond counsel will include the following:
1. Attendance at all meetings of the Board of Directors of the District (the "Board") and the City
Council of the City of Baytown, Texas (the "City"), as well as meetings or conferences with the
District's or City's administration and/or financial advisors, as required or requested in
connection with the planning and authorization of Obligations, including consultation on
federal income tax matters;
2. Preparation of the bond indenture, orders or resolutions of the Board authorizing issuance of
Obligations, together with all other legal documents comprising the transcript of proceedings
for authorization and issuance of Obligations and assistance with the preparation of agenda
information;
Jonathan K. Frels T:+1.713.221.1599 F:+1.800.404.3970
Partner 711 Louisiana Street, Suite 2300, Houston, Texas 77002.2770
lonathan.frels@bracewell.com bracewell.com
Baytown Municipal Development District
November 28, 2018
Page 2
3. The review of those sections of the offering documents that pertain to the description and
security of the Obligations, the District's documents related to the financing, matters related
to the federal income tax treatment of interest on the Obligations, and our opinion;
4. Preparation of and submission to the Attorney General of Texas of a transcript of proceedings
for each series of Obligations to obtain the approval of the Attorney General and registration
of Obligations by the Comptroller of Public Accounts of Texas;
S. Preparation and filing of legal documents required under federal income tax law for the
Obligations, and the preparation of and deliveryto the District of a memorandum with respect
to the federal income tax treatment of Obligation proceeds;
6. Representation of the District at the closing of the sale of Obligations, including preparation
of all closing documents; and
7. If appropriate, the delivery at closing of our approving opinion as to the validity of the
Obligations under Texas law, and the exclusion of interest on the Obligations from gross
income of the holders under federal income tax law.
The services outlined above do not include such matters as services as disclosure counsel in
connection with the sale of the Obligations, obtaining IRS rulings or clarifications of federal tax law,
presentations to rating agencies or bond insurers, or "blue sky" or securities registration services. We will
be pleased to provide legal services in connection with any matters not included in paragraphs 1 through
7 above, but we believe that such additional services, if requested by the District, should be the subject
of an addendum to this letter or a separate letter of engagement. Our representation of the District with
respect to any particular series of Obligations will end upon the closing for that particular series of
Obligations.
It is our understanding that the District has engaged Hilltop Securities, Inc. as its financial advisor
in connection with the Project. The services provided by our firm do not include the provision of advice
in connection with the feasibility, business terms or financial aspects of the Project, including without
limitation, business terms contained in any transaction documents or the potential financial impacts of
the proposed Project, any transaction documents or the Obligations on the District or the City. Our role
in connection with the preparation of the transaction documents is limited solely to advice in connection
with obtaining the approval of the Office of the Attorney General of the Obligations issued for the Project
and matters related to the federal income tax treatment of the Obligations.
This Engagement Letter may be supplemented to reflect new matters or issues that deviate from
the current engagement in scope, billing arrangements, complexity, risk, or that otherwise require a
substantial change in terms and conditions. The Terms of Engagement, however, will govern all projects
and engagements for Client.
Baytown Municipal Development District
November 28, 2018
Page 3
Fees, Expenses and Billing
1. Project Structuring Phase
Priorto the completion of substantially final versions of the of the franchise agreement, operating
agreement and bond indenture for the Project (the "Project Structuring Phase"), our fees will be based
primarily on an hourly charge determined by the amount of time devoted by Bracewell professionals to
perform the legal services contemplated by this engagement. Other factors authorized by Rule 1.5(a) of
the ABA Model Rules of Professional Conduct also may be considered when determining the fees charged
by Bracewell. Billing rates for our attorneys vary according to the experience of the individuals. Our
current billing rates for those attorneys who are expected to work on the Project are attached as Schedule
I. In an effort to reduce overall legal costs, we utilize non -lawyer personnel and associates whenever
appropriate. Billing rates for both attorneys and non -lawyer personnel are, from time to time, reviewed
and adjusted and may be changed with notice to the District. Invoices for legal fees incurred during the
Project Structuring Phase will be delivered to Client on a monthly basis and payable in accordance with
the attached Terms of Engagement.
2. Bond Issuance Phase
Following the completion of substantially final versions of the franchise agreement, operating
agreement and bond indenture for the Project (the 'Bond Issuance Phase"), our fees will be based
primarily on an hourly charge determined by the amount of time devoted by Bracewell professionals to
perform the legal services contemplated by this engagement. Other factors authorized by Rule 1.5(a) of
the ABA Model Rules of Professional Conduct also may be considered when determining the fees charged
by Bracewell. Billing rates for our attorneys vary according to the experience of the individuals. Our
current billing rates forthose attorneys who are expected to work on the Project are attached as Schedule
I. In an effort to reduce overall legal costs, we utilize non -lawyer personnel and associates whenever
appropriate. Billing rates for both attorneys and non -lawyer personnel are, from time to time, reviewed
and adjusted and may be changed with notice to the District. In addition to the hourly charges, the District
will pay to us from the proceeds of the sale of each issue or series of Obligations an opinion fee equal to
$1.00 per $1,000 in principal amount of the Bonds. Fees incurred during the Bond Issuance Phase will be
payable from proceeds of the Obligations actually issued, sold and delivered.
Other Charges
In addition to our fees, there will be other charges for items incident to the performance of our legal
services, such as the cost of transcripts, photocopying, messengers, travel expenses, long-distance
telephone calls, facsimile transmissions, postage, overtime for secretaries and other non -legal staff,
specialized computer applications such as computerized legal research, and filing fees.
Joint Representation
As we have discussed, the District and the City could choose to be represented by separate counsel in this
matter. You have advised us that, due to cost considerations and possible strategic advantages, you prefer
that the firm represent you jointly. We have discussed, and you understand, the possible risks of joint
Baytown Municipal Development District
November 28, 2018
Page 4
representation, including our ability to zealously represent both of you, our ability to negotiate effectively
on behalf of each of you, the limitation on our ability to represent one of you in a dispute against the
other, the possible loss of attorney client privileges, the possible effect on your willingness to disclose
confidences to us that maybe shared within the client group. You are aware that, in agreeing to represent
you jointly, we are relying on your representation that your interests are aligned and you agree on all
material issues concerning this matter.
You acknowledge and agree that, in spite of your current agreement on all material issues, you each have
other interests that could give rise to a conflict of interest among the members of the client group. You
further agree that, in the event a conflict of interest arises, we may withdraw from the representation of
one or more of you, in order to resolve the conflict. You agree that, in the event of our withdrawal from
one or more of you, we may continue to represent other members of the client group, even if, as a result
of such withdrawal, we take positions adverse to your interests in any subsequent negotiation or
proceeding relating to this matter. You agree that you will not use our representation of any of you in
this engagement, or any conflict arising from the joint representation in this engagement, as the basis for
a claim to disqualify us as counsel to other members of the group.
As we have discussed, one of the necessary consequences of this joint representation is the sharing of
confidential information concerning the subject matter of the joint representation. You acknowledge and
agree that communications between the firm and any or all of you relating to this matter will be treated
as confidential and will not be disclosed outside the client group without your informed consent or as
otherwise permitted by the applicable rules of professional conduct or other law. You also acknowledge
and agree that whatever relevant or material communications or information we receive concerning this
matter, including communications from any one of you, will be shared with each of you as we consider
appropriate. You further acknowledge and agree that in the event a dispute arises between or among
one or more of you, and you are no longer represented by us in this matter, we may nevertheless use
confidential information we have concerning this matter to the advantage of those we continue to
represent in any subsequent proceeding or negotiation relating to this matter.
Any of you may withdraw from the joint representation at any time for any reason, upon written notice
to the firm and each other client. You acknowledge and agree that you (1) will remain responsible for
your share of the firm's fees and expenses incurred to the date that notice of withdrawal is received by
the firm; (2) you will be responsible for retaining and paying for separate legal representation; and (3) we
may continue to represent the others in the client group, consistent with the other provisions of this
letter, even if we take positions adverse to your interests in any subsequent proceeding or negotiation
relating to this matter.
Conflicts of Interest: ADDlicable Standard
For purposes of evaluating conflicts of interests, you acknowledge that Bracewell relies upon the
Texas Disciplinary Rules of Professional Conduct. Bracewell may represent other clients that may be
adverse to your interests in substantially unrelated matters, and it may represent other clients within the
same industry.
Baytown Municipal Development District
November 28, 2018
Page 5
Conclusion
You are encouraged to discuss the terms of this engagement letter with your general
counsel. Please call me if you wish to discuss any aspect of this engagement.
If this Engagement Letter, including the provisions in the attached Terms of Engagement, correctly
reflects your understanding of the terms and conditions of our representation, please sign the enclosed
copy of this letter in the space provided and return it to me.
Thank you again for the opportunity to represent you in this matter.
Very truly yours,
Jonathan K. Frels
Partner
AGREED AND ACCEPTED:
Baytown Municipal Utility District City of Baytown, Texas
By:
By:
Date: Date:
Baytown Municipal Development District
November 28, 2018
Page 6
Schedule of Rates
Personnel
Jonathan Frels
Robert Collins
Brock Bailey
Derrick Mitchell
Brian Teaff
Julie Partain
Christine Latimer
Paige Abernathy
Priscilla Kwan
Rates
$610
$610
$610
$610
$610
$515
$470
$415
$300
BRACEWELL LLP
TERMS OF ENGAGEMENT
Introduction
These are the Terms of Engagement adopted by Bracewell LLP ("Bracewell") and the addressee of the
preceding Engagement Letter ("Client") and referred to in our Engagement Letter as the basis for our
representation. Because they are an integral part of our agreement to provide representation, we ask
that you review this document carefully and retain it for your files. If you have any questions after reading
it, please promptly inform your principal contact at the Firm.
Client of the Firm
Because Bracewell has been engaged to represent the Client only, the engagement does not include the
Client's family members, affiliated or related entities, or their respective individual officers, directors,
partners, equity owners or employees.
Unless otherwise specifically stated in the Engagement Letter, our representation does not include any
parent, subsidiary, or affiliated entity; employee, officer, director, shareholder, member or partner of an
entity; or, any commonly owned entity. For any trade association, our representation does not include
any member of the trade association; and for individuals, our representation does not include any
employer, partner, spouse, sibling, or other family member. In the event we are asked to undertake
representation of any other entity in connection with this engagement, we will do so only by agreement
defined in the Engagement Letter. By execution of the Engagement Letter, Client consents to Bracewell's
use of the name and a generic description of the transaction in Bracewell marketing materials.
Confidential Client information will not be included in such materials.
Our Relationship with Others and Conflicts of Interest
Conflict of Interest is a concern for Bracewell and its clients. We attempt to identify actual and potential
conflicts at the outset of each engagement. Unfortunately, conflicts sometimes arise or become apparent
after work begins on an engagement. When that happens, we will do our best to address and resolve the
situation in the manner that best serves the interests of all of our affected clients.
If a Conflict of Interest unrelated to this engagement develops between you and another client of
Bracewell, you consent to the firm's adverse representation in the unrelated matter.
Bracewell accepts this engagement on the understanding that our representation of you will not preclude
us from accepting another engagement from a new or existing client provided that (1) such engagement
is not substantially related to the subject matter of services we provide to you and (2) such other
engagement would not impair the confidentiality of related client information.
Staffing the Proiect
In most cases, one attorney will be your primary contact. In order to provide you with the expertise of
our firm, and to provide services on a cost effective basis, that attorney will delegate parts of your work
to other lawyers, paralegals and professionals.
Billing Arrangements and Terms of Pavment
Fees for professional services and expenses are not contingent on the outcome of the project, unless
expressly stated in the Engagement Letter.
Unless expressly stated in the Engagement Letter, Bracewell issues invoices on a periodic basis, normally
each month, for fees and expenses. Invoices are due on receipt and are considered past due 30 days after
receipt.
Clients frequently ask us to estimate the fees and other charges they are likely to incur in connection with
a particular matter. Any estimate is based on professional judgment and facts and circumstances that
appear at the time. As such, any estimate is subject to the understanding that, unless we agree otherwise
in writing, it does not represent a maximum, minimum, or fixed -fee quotation. The ultimate cost
frequently is more or less than the amount estimated.
It may be necessary for us to retain third parties, such as consultants, experts and investigators, in order
to represent you adequately. In that event, you will be responsible for the prompt payment of the invoices
of those third parties. Although we may advance third -party disbursements in reasonable amounts, we
will ask you to pay larger third -pa rty invoices (usually those over $500) directly to the third party providing
the services.
If the representation will require a concentrated period of activity, such as a trial, arbitration, or hearing,
we reserve the right to require the payment of all amounts owed and the prepayment of the estimated
fees and expenses to be incurred in completing the trial, arbitration, or hearing, as well as arbitration fees
likely to be assessed. If you fail to pay timely the estimated fees and expenses, we will have the right to
cease performing further work and the right to withdraw from the representation, subject to any
applicable rules of court or other applicable tribunal.
Although an insurer's payment of defense costs may be applied to billings of the firm, the payment
obligation remains with you. Failure of any insurer to pay all or part of the billings for this project does
not relieve you from the obligation to pay billings in full and in a timely manner.
Taxes
The Client agrees that all payments under the Engagement Letter shall be payable to Bracewell in U.S.
Dollars, free and clear of any and all present and future taxes, levies, imposts, duties, deductions,
withholdings, fees, liabilities and similar charges (the "Taxes"). If any Taxes are required to be withheld
or deducted from any amount payable under the Engagement Letter, then the amount payable under the
Engagement Letter shall be increased to the amount which, after deduction from such increased amount
of all Taxes required to be withheld or deducted therefrom, will yield to Bracewell the amounts stated to
be payable to Bracewell under the Engagement Letter.
Termination
You may terminate the engagement at any time, with or without cause, by notifying us in writing. The
firm also can terminate the engagement before the completion of its representation of you in the
specified matter if (a) the continued representation would result in a violation of the applicable rules of
professional conduct or other law; (b) the termination can be accomplished without material adverse
effect on your interests; (c) you persist in a course of action that Bracewell reasonably believes is criminal
or fraudulent, or you have used our services to perpetrate a crime or fraud, (d) the firm has a fundamental
disagreement with the objective or tactics in this engagement; (e) you deliberately and substantially fail
to discharge an obligation regarding this engagement, including the payment of fees and expenses and
the duty of cooperation as provided in the Terms of Engagement; or (f) other good cause for termination
exist. In the event that the firm intends to terminate the engagement, the firm will give reasonable notice
and allow you access to your files relating to this engagement.
For purposes of this Engagement Letter, this engagement terminates upon written notice of termination
by Client or by Bracewell.
The termination of our services will not affect your responsibility for payment of legal services rendered
and other charges incurred before termination and in connection with an orderly transition of the project.
After completion of the representation, however, changes may occur in the applicable laws or regulations
that could affect your future rights and liabilities in regard to the matter. Bracewell has no continuing
obligation to give advice with respect to any future legal developments that may relate to the project.
Bracewell Files
You agree that Bracewell will own and retain its own files and any related electronically stored information
pertaining to the engagement. You will not have the right or ability to require us to deliver such files and
records (or copies thereof) to you, except as required by law. Examples of Bracewell files and records are:
firm administrative records, financial files and documents, time and expense reports, personnel and
staffing materials, credit and accounting records, electronic mail correspondence (other than such
correspondence which was sent to you by a member of our firm) and internal lawyer's work product, such
as drafts, notes, memoranda and legal and factual research, including investigative reports prepared by
or for the internal use of lawyers. Further, at the discretion of the responsible partner for the project in
question, we may destroy any such documentation which is the property of Bracewell or any
documentation which such partner determines to be duplicative or unnecessary in all cases without
having to obtain your consent, provided, however, that Bracewell shall followthe Client's record retention
schedule as published at the time of this engagement.
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Choice of Law
Because Bracewell performs legal services in a number of jurisdictions, for consistency and predictability,
the Client and Bracewell agrees that the Texas Disciplinary Rules of Professional Conduct (found at
www.texasbar.com or www.txethics.org) will govern all issues of legal ethics and professionalism.
Disclaimer
We cannot guarantee the outcome of any matter. Any expression of our professional judgment regarding
your matter or the potential outcome is, of course, limited by our knowledge of the facts and based on
the law at the time of expression. It is also subject to any unknown or uncertain factors or conditions
beyond our control.
Either at the commencement or during the course of the representation, we may express opinions or
beliefs about the matter or various courses of action and the results that might be anticipated. Any
expressions on our part concerning the outcome of the representation, or any other legal matters, are
based on our professional judgment and are not guarantees.
By signing the Engagement Letter or otherwise indicating your acceptance of the Engagement Letter, you
acknowledge that Bracewell has made no promises or guarantees to you about the outcome of the
representation, and nothing in these Terms of Engagement shall be construed as such a promise or
guarantee.
Your Cooperation
To enable us to provide effective representation, you agree to: (1) disclose to us fully, accurately and on
a timely basis, all facts and documents that are or might be material or that we may request; (2) keep us
apprised on a timely basis of all developments relating to the representation that are or might be material;
(3) attend meetings, conferences, and other proceedings when it is reasonable to do so; (4) provide
updated information for conflicts purposes, if necessary; and (5) cooperate fully with us in all matters
relating to the engagement.
Modification of Our Agreement
The Terms of Engagement reflect our agreement on the terms of all engagements, and are not subject to
any oral agreements, modifications, or understandings. Any change in these Terms of Engagement must
be made in writing signed by both Bracewell and Client.
In Conclusion
If you have questions or concerns, at any time, relating to the terms and conditions of this engagement,
the services or advice provided by Bracewell, or the fees and expenses reflected in the invoices, please
bring them to the attention of your principal contact at our firm, or Bracewell's General Counsel or
Managing Partner.
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