Ordinance No. 9,786 ORDINANCE NO. 9786
® AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS, AUTHORIZING AND DIRECTING,THE MAYOR TO EXECUTE AN
ENGAGEMENT LETTER FOR VINSON & ELKINS, L.L.P., TO SERVE AS
BOND COUNSEL TO THE CITY OF BAYTOWN; AND PROVIDING FOR
THE EFFECTIVE DATE THEREOF.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS:
Section 1: That the City Council of the City of Baytown, Texas, hereby authorizes
and directs the Mayor to execute an engagement letter for Vinson & Elkins, L.L.P., to serve as
bond counsel to the City of Baytown. A copy of said engagement letter is attached hereto,
marked Exhibit "A," and made a part hereof for all intents and purposes.
Section 2: This ordinance shall take effect immediately from and after its passage by
the City Council of the City of Baytown.
INTRODUCED, READ and PASSED by the affirmative vote of the City Council of the
City of Baytown this the 22nd day of April, 2004.
PETE C. ALFARO, Iffayor
ATTEST:
�A_ Y•W. mITH, City Clerk
APPROVED AS TO FORM:
riQKAC-'IO RAMIREZ, SR., y Attorney
® F:\Karen\Files\City Council\Ordinances\V&FBondCounselOrdinance.doc
VINSON&ELKINS L.L.P.
2300 FIRST QIY TOWER
Vinson&ek��� O FANN TEXAS 77
A7'1URNEYSATUW 1-�JLSiON,TEXAS 77002.6760 _
TELEPHONE(713)758-=
® FAX(713)75&2346
www.vclaw.com
Frank McCreary
Direct DLd 713-758-2440
Direct Fax 713-615-5256
f mccrear)evelaw.com
April 14, 2004
Honorable Mayor and City Council
City of Baytown
City Hall
2401 Market Street
Post Office Box 424
Baytown, Texas 77522-0424
Ladies and Gentlemen:
This letter, when accepted by you, will constitute our agreement to serve as bond counsel to
the City. We agree that our services as bond counsel will include the following:
1. Preparation of the ordinance calling each bond election held by the City,
including Spanish and Vietnamese translation of the election ordinance;
2. Submission to the United States Department of Justice of a request for
preclearance of each bond election under the Federal Voting Rights Act;
3. For each issue or series of bonds (or other obligations), attendance at all meetings
of the City Council as required or requested in connection with the planning and
authorization of such issue or series, including consultation on federal income tax
matters;
4. For each issue or series of bonds (or other obligations), preparation of the
ordinance of the City Council authorizing issuance of the obligations of such issue
or series, together with all other legal documents comprising the transcript of
proceedings for authorization and issuance of such issue or series;
5. Consultation with the City and the City's financial advisors to review information
of a legal nature to be included in any Official Statement or other prospectus for
each issue or series of obligations, regarding the terms and conditions of the
obligations to be issued, the legal authority for the issuance of the obligations and
the pledge of taxes or revenues for the payment of such obligations, and the status
of the obligations and the interest thereon under federal income tax law;
E=ff A►
AUSTIN • BELLING • DALLAS • DUBAI • HOUSTON • LONDON • MOSCOW • NEW YORK • SINGAPORE • WASHINGTON,D.C.
Page 2
April 14, 2004
• 6. Preparation of and submission to the Attorney General of Texas of a transcript of
proceedings for each issue or series of bonds (or other obligations) to obtain the
approval of the Attorney General and registration by the Comptroller of Public
Accounts of Texas of such issue or series;
7. Preparation and filing of legal documents required under federal income tax law
for each issue or series of bonds (or other obligations), and the preparation of and
delivery to the City of a letter of instructions with respect to the federal income
tax treatment of bond proceeds;
8. Supervision of the printing of each issue or series of bonds (or other obligations);
9. Representation of the City at the closing of the sale of each issue or series,
including preparation of all closing documents; and
10. If appropriate, the delivery at closing of our approving opinion as to the validity
of each issue or series of bonds (or other obligations) under Texas law and the
exclusion of interest on such obligations from gross income of the holders under
federal income tax law.
For the services outlined above, our fee would be as follows:
(a) For the City's Series 2004A Certificates of Obligation, a fee of$15,000, payable from
the proceeds of the Certificates.
(b) For the City's Series 2004 General Obligation and Refunding Bonds, a fee of$15,000,
payable from the proceeds of the Bonds.
The above fees are contingent on the issuance of the obligations by the City. If no
obligations are issued, no fee will be due.
Fees for future bond counsel services will be established at the time of each issue, subject to
the approval of the City.
The City would also reimburse us for disbursements made on behalf of the City and
expenses and charges relating to our representation, including travel, long distance telephone
charges, and photocopy and document delivery charges. All such charges will be subject to
approval by the City.
The services outlined above do not include such matters as services as disclosure counsel in
connection with bond issues, work on post-closing federal tax or disclosure issues, obtaining IRS
rulings or clarifications of federal tax law, or presentations to rating agencies or bond insurers.
® We will be pleased to provide legal services in connection with any matters not included in
paragraphs 1 through 10 above, but we believe that such additional services should be the subject
of a separate engagement letter.
i
i
Page 3
April 14, 2004
•
This agreement will remain in force and effect unless terminated as provided herein. This
agreement may be terminated by either party at any time on thirty days' written notice. We
agree not to assign or otherwise transfer any interest in this agreement without the prior written
consent of the City.
This agreement incorporates the Standard Terms of Engagement For Legal Services (the
"Standard Terms") attached hereto. We agree that any increases in the "Additional Charges"
described in the Standard Terms will not be effective until 45 days after receipt by the City of a
revised schedule of such charges reflecting any such increases.
If the arrangement set out above meets with your approval, please take appropriate action to
approve this agreement and return one executed copy to the undersigned.
Very truly yours,
�G
ank McCreary
0257:2150
Attachment
1596818_2.DOC
ACCEPTED:
CITY OF BAYTOWN, TEXAS
By:
Mayor
Page 4
April 14, 2004
® VINSON & ELKINS L.L.P.
Standard Terms of Engagement
for Legal Services
This statement sets forth certain standard terms of our engagement as your lawyers and is
intended as a supplement to the engagement letter that we have with you as our client. Unless
modified in writing by mutual agreement,.these terms will be an integral part of our agreement
with you as reflected in the engagement letter. Therefore, we ask that you review this statement
carefully and contact us promptly if you have any questions. We suggest that you retain this
statement in your file with the engagement letter.
The Scope of Our Work
You should have a clear understanding of the legal services we will provide. Any
questions that you have should be dealt with promptly.
We will at all times act on your behalf to the best of our ability. Any expressions on our
part concerning the outcome of your legal matters are expressions of our best professional
judgment, but are not guarantees. Such opinions are necessarily limited by our knowledge of the
facts and are based on the state of the law at the time they are expressed.
It is our policy that the person or entity that we represent is the person or entity that is
identified in our engagement letter, and absent an express agreement to the contrary does not
include any affiliates of such person or entity (e.g., if you are a corporation or partnership, any
parents, subsidiaries, employees, officers, directors, shareholders or partners of the corporation
or partnership, or commonly owned corporations or partnerships; or, if you are a trade
association, any members of the trade association). If you believe this engagement includes
additional entities or persons as our clients you should inform us immediately.
It is also our policy that the attorney-client relationship will be considered terminated
upon our completion of any services that you have retained us to perform. If you later retain us
to perform further or additional services, our attorney-client relationship will be revived subject
to the terms of engagement that we agree on at that time.
This engagement shall be subject to the Texas Disciplinary Rules of Professional
Conduct .
Who Will Provide the Legal Services
Customarily, each client of the Firm is served by a principal attorney contact. The
principal attorney should be someone in whom you have confidence and with whom you enjoy
working. You are free to request a change of principal attorney at any time. Subject to the
supervisory role of the principal attorney, your work or parts of it may be performed by other
® lawyers and legal assistants in the Finn. Such delegation may be for the purpose of involving
lawyers or legal assistants with special expertise in a given area or for the purpose of providing
I
Page 5
April 14, 2004
services on the most efficient and timely basis. Whenever practicable, we will advise you of the
names of those attorneys and legal assistants who work on your matters.
How Our Fees Will Be Set
Generally, our fees are based on the time spent by the lawyers and paralegal personnel
who work on the matter. We will charge for all time spent in representing your interests,
including, by way of illustration, telephone and office conferences with you and your
representatives, consultants (if any), opposing counsel, and others; conferences among our legal
and paralegal personnel; factual investigation; legal research; responding to your requests for us
to provide information to your auditors in connection with reviews or audits of financial
statements; drafting letters and other documents; and travel. We will keep accurate records of
the time we devote to your work in units of quarters of an hour.
The hourly rates of our lawyers and legal assistants are reviewed and adjusted annually
on a firm-wide basis to reflect current levels of legal experience, changes in overhead costs, and
other factors.
Although we may from time to time, at the client's request, furnish estimates of legal fees
and other charges that we anticipate will be incurred, these estimates are by their nature inexact
(due to unforeseeable circumstances) and, therefore, the actual fees and charges ultimately billed
may vary from such estimates.
With your advance agreement, the fees ultimately charged may be based upon a number
of factors, such as:
- The time and effort required, the novelty and complexity of the issues presented, and the
skill required to perform the legal services promptly;
- The fees customarily charged in the community for similar services and the value of the
services to you;
- The amount of money or value of property involved and the results obtained;
- The time constraints imposed by you as our client and other circumstances, such as an
emergency closing, the need for injunctive relief from court, or substantial disruption of
other office business;
The nature and longevity of our professional relationship with you;
The experience, reputation and expertise of the lawyers performing the services;
The extent to which office procedures and systems have produced a high-quality product
efficiently.
Page 6
April 14, 2004
I
For certain well-defined services (for example, a simple business incorporation), we will
(if requested) quote a flat fee. It is our policy not to accept representation on a flat-fee basis
except in such defined-service areas or pursuant to a special arrangement tailored to the needs of
a particular client. In all such situations, the flat fee arrangement will be expressed in a letter,
setting forth both the amount of the fee and the scope of the services to be provided.
We also will, in appropriate circumstances, provide legal services on a contingent fee
basis. Any contingent fee representation must be the subject of a separate and specific
engagement letter.
Additional Charges
In addition to our fees, there will be other charges for items incident to the performance
of our legal services, such as 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. The
current basis for these charges is set forth below. The Firm will review this schedule of charges
on an annual basis and adjust them to take into account changes in the Firm's costs and other
factors.
Duplicating
The Firm charges $.15 per page.
Courier Services
The Firm charges an amount which generally represents cost including the
distribution service provided by the Firm. Depending on the volume of work
performed by a service provider, the Firm may receive a volume discount during a
particular accounting period for which no adjustment is made on an individual
client's bill.
Computer Aided Legal Research(CALR)
Third party providers of CALR services charge the Firm amounts each month
based on the type, extent, and duration of the services provided. The Firm charges
clients for client research only based on the computed cost to the Firm for the use
of the services. This cost is monitored and revised periodically to achieve an
average "at cost" rate for clients.
Teiefax
The Firm charges $1.00 per page for outgoing telefaxes, which includes all
telephone costs.
Telohone
I
Page 7
April 14, 2004
The Firm does not charge for local calls. Due to the Firm-wide volume of long
distance calls and multitude of rates for the various area codes and exchanges
(over 65,000), the Firm does not bill each individual call based on the statements
received from providers, but rather charges a flat rate of$.41 per minute for each
long distance call made within the United States. This rate ($.41) is an
approximation of third party provider charges and internal costs associated with
this service. International calls are charged based on the rate in effect for the
country being called.
Travel-Related Expenses
Airfare, meals, and related travel expenses charged to the client represent actual,
out-of-pocket cost. Depending on the volume of both Firm and personal travel,
the Firm may receive beneficial services, including airline tickets from its travel
agent for which no adjustment is made on an individual client's account. In
addition, credits earned under the Frequent Flyer Programs accrue to the
individual traveler and not to the Firm.
All Other Costs
The Firm charges actual disbursements for third-party services like court
reporters, expert witnesses, etc., and may recoup expenses reasonably incurred in
connection with services performed in-house, such as mail services, secretarial
overtime, file retrieval, etc.
Unless special arrangements are otherwise made, fees and expenses of others (such as
experts, investigators, consultants and court reporters) will be the responsibility of, and billed
directly to, the client. Further, all invoices in excess of$500 will be forwarded to the client for
direct payment.
Billing Arrangements and Terms
Our billing rates are based on the assumption of prompt payment. Consequently, unless
other arrangements are made, fees for services and other charges will be billed monthly and are
payable within thirty days of receipt.
By engaging us, you acknowledge and agree that you are responsible for payment of fees,
expenses and disbursements. In appropriate matters as an accommodation to you, we may agree
to direct our bills to third-party payors (e.g., an insurer), but you agree that you will remain fully
responsible for timely payment of our bills if for any reason the third party does not timely pay
such bills. Likewise, we agree that we owe our professional obligations to you, even when a
third party pays our bills.
•
Page 8
April 14, 2004
Advances
Clients of the Firm are sometimes asked to deposit funds as an advance payment with the
Firm. The advance payment will be applied first to payment of charges for such items as
photocopying, messengers, travel, etc., as more fully described above, and then to fees for
services. The advance will be deposited in our client advance account and we will charge such
other charges and our fees against the advance and credit them on our billing statements. In the
event such other charges and our fees for services exceed the advance deposited with us, we will
bill you for the excess monthly or may request additional advances. Any unused portion of
amounts advanced will be refundable at the conclusion of our representation.
Confidentiality
We will preserve the confidentiality of information you provide us consistent with
applicable law including the rules of professional conduct governing lawyers. This confirms
your agreement that, with respect to firm brochures or other material or information regarding
the firm and its practice, we may indicate the general nature of our representation of you and
your identity as a firm client.
Client and Firm Documents
We will maintain any documents that you furnish to us in our client file (or files) for this matter.
At your request, we will return your documents to you at the conclusion of the matter (or earlier,
if appropriate). It is your obligation to tell us which, if any, of the documents that you furnish us
that you want returned. We will return those documents to you promptly after our receipt of
payment for outstanding fees and charges. Our own files pertaining to this matter, including the
work performed by our attorneys, will be retained by the Firm. Any documents retained by the
firm will be kept for a certain period of time, and ultimately we will destroy them in accordance
with our record retention program schedule then in effect.
15968182-DOC
i
I
VINSON&ELKINS L.L.P.
2300 FIRST CITY TOWER
Vmson& lk 1001 FANNINSTREET
ATTORNEYS AT LAW HOLSTON,TEXAS 77002-6760
TELEPHONE(713)758-2222
FAX(713)758-2346
www.velaw.com
Frank McCreary
Direct Dial 713-758-2440
Direct Fax 713-615-5256
fmccrear)6velawcom
April 14,2004
Honorable Mayor and City Council
City of Baytown
City Hall
2401 Market Street
Post Office Box 424
Baytown,Texas 77522-0424
Ladies and Gentlemen:
This letter, when accepted by you, will constitute our agreement to serve as bond counsel to
the City. We agree that our services as bond counsel will include the following:
1. Preparation of the ordinance calling each bond election held by the City,
including Spanish and Vietnamese translation of the election ordinance;
2. Submission to the United States Department of Justice of a request for
preclearance of each bond election under the Federal Voting Rights Act;
3. For each issue or series of bonds (or other obligations), attendance at all meetings
of the City Council as required or requested in connection with the planning and
authorization of such issue or series, including consultation on federal income tax
matters;
4. For each issue or series of bonds (or other obligations), preparation of the
ordinance of the City Council authorizing issuance of the obligations of such issue
or series, together with all other legal documents comprising the transcript of
proceedings for authorization and issuance of such issue or series;
5. Consultation with the City and the City's financial advisors to review information
of a legal nature to be included in any Official Statement or other prospectus for
each issue or series of obligations, regarding the terms and conditions of the
obligations to be issued, the legal authority for the issuance of the obligations and
the pledge of taxes or revenues for the payment of such obligations, and the status
of the obligations and the interest thereon under federal income tax law;
AUSTIN • BEIJING • DALLAS • DUBAI • HOUSTON • LONDON • MOSCOW • NEW YORK • SINGAPORE • WASHINGTON,D.C.
Page 2
April 14,2004
6. Preparation of and submission to the Attorney General of Texas of a transcript of
proceedings for each issue or series of bonds (or other obligations) to obtain the
approval of the Attorney General and registration by the Comptroller of Public
Accounts of Texas of such issue or series;
7. Preparation and filing of legal documents required under federal income tax law
for each issue or series of bonds (or other obligations), and the preparation of and
delivery to the City of a letter of instructions with respect to the federal income
tax treatment of bond proceeds;
8. Supervision of the printing of each issue or series of bonds(or other obligations);
9. Representation of the City at the closing of the sale of each issue or series,
including preparation of all closing documents; and
10. If appropriate, the delivery at closing of our approving opinion as to the validity
of each issue or series of bonds (or other obligations) under Texas law and the
exclusion of interest on such obligations from gross income of the holders under
federal income tax law.
For the services outlined above, our fee would be as follows:
(a) For the City's Series 2004A Certificates of Obligation, a fee of$15,000, payable from
the proceeds of the Certificates.
(b) For the City's Series 2004 General Obligation and Refunding Bonds, a fee of$15,000,
payable from the proceeds of the Bonds.
The above fees are contingent on the issuance of the obligations by the City. If no
obligations are issued,no fee will be due.
Fees for future bond counsel services will be established at the time of each issue, subject to
the approval of the City.
The City would also reimburse us for disbursements made on behalf of the City and
expenses and charges relating to our representation, including travel, long distance telephone
charges, and photocopy and document delivery charges. All such charges will be subject to
approval by the City.
The services outlined above do not include such matters as services as disclosure counsel in
connection with bond issues, work on post-closing federal tax or disclosure issues, obtaining IRS
rulings or clarifications of federal tax law, or presentations to rating agencies or bond insurers.
We will be pleased to provide legal services in connection with any matters not included in
paragraphs 1 through 10 above,but we believe that such additional services should be the subject
of a separate engagement letter.
Page 3
April 14, 2004
This agreement will remain in force and effect unless terminated as provided herein. This
agreement may be terminated by either party at any time on thirty days' written notice. We
agree not to assign or otherwise transfer any interest in this agreement without the prior written
consent of the City.
This agreement incorporates the Standard Terms of Engagement For Legal Services (the
"Standard Terms") attached hereto. We agree that any increases in the "Additional Charges"
described in the Standard Terms will not be effective until 45 days after receipt by the City of a
revised schedule of such charges reflecting any such increases.
If the arrangement set out above meets with your approval, please take appropriate action to
approve this agreement and return one executed copy to the undersigned.
Very truly yours,
U4
ank McCreary
0257:2150
Attachment
1596818_2.DOC
ACCEPTED:
CITY OF BAYTOWN,TEXAS
By: lice, C.
Mayor
Page 4
April 14,2004
VINSON& ELK INS L.L.P.
Standard Terms of Engagement
for Legal Services
This statement sets forth certain standard terms of our engagement as your lawyers and is
intended as a supplement to the engagement letter that we have with you as our client. Unless
modified in writing by mutual agreement, these terms will be an integral part of our agreement
with you as reflected in the engagement letter. Therefore, we ask that you review this statement
carefully and contact us promptly if you have any questions. We suggest that you retain this
statement in your file with the engagement letter.
The Scope of Our Work
You should have a clear understanding of the legal services we will provide. Any
questions that you have should be dealt with promptly.
We will at all times act on your behalf to the best of our ability. Any expressions on our
part concerning the outcome of your legal matters are expressions of our best professional
judgment,but are not guarantees. Such opinions are necessarily limited by our knowledge of the
facts and are based on the state of the law at the time they are expressed.
It is our policy that the person or entity that we represent is the person or entity that is
identified in our engagement letter, and absent an express agreement to the contrary does not
include any affiliates of such person or entity (e.g., if you are a corporation or partnership, any
parents, subsidiaries, employees, officers, directors, shareholders or partners of the corporation
or partnership, or commonly owned corporations or partnerships; or, if you are a trade
association, any members of the trade association). If you believe this engagement includes
additional entities or persons as our clients you should inform us immediately.
It is also our policy that the attorney-client relationship will be considered terminated
upon our completion of any services that you have retained us to perform. If you later retain us
to perform further or additional services, our attorney-client relationship will be revived subject
to the terms of engagement that we agree on at that time.
This engagement shall be subject to the Texas Disciplinary Rules of Professional
Conduct .
Who Will Provide the Legal Services
Customarily, each client of the Firm is served by a principal attorney contact. The
principal attorney should be someone in whom you have confidence and with whom you enjoy
working. You are free to request a change of principal attorney at any time. Subject to the
supervisory role of the principal attorney, your work or parts of it may be performed by other
lawyers and legal assistants in the Firm. Such delegation may be for the purpose of involving
lawyers or legal assistants with special expertise in a given area or for the purpose of providing
Page 5
April 14, 2004
services on the most efficient and timely basis. Whenever practicable, we will advise you of the
names of those attorneys and legal assistants who work on your matters.
How Our Fees Will Be Set
Generally, our fees are based on the time spent by the lawyers and paralegal personnel
who work on the matter. We will charge for all time spent in representing your interests,
including, by way of illustration, telephone and office conferences with you and your
representatives, consultants (if any), opposing counsel, and others; conferences among our legal
and paralegal personnel; factual investigation; legal research; responding to your requests for us
to provide information to your auditors in connection with reviews or audits of financial
statements; drafting letters and other documents; and travel. We will keep accurate records of
the time we devote to your work in units of quarters of an hour.
The hourly rates of our lawyers and legal assistants are reviewed and adjusted annually
on a firm-wide basis to reflect current levels of legal experience, changes in overhead costs, and
other factors.
Although we may from time to time, at the client's request, furnish estimates of legal fees
and other charges that we anticipate will be incurred, these estimates are by their nature inexact
(due to unforeseeable circumstances) and, therefore,the actual fees and charges ultimately billed
may vary from such estimates.
With your advance agreement, the fees ultimately charged may be based upon a number
of factors, such as:
- The time and effort required, the novelty and complexity of the issues presented, and the
skill required to perform the legal services promptly;
- The fees customarily charged in the community for similar services and the value of the
services to you;
- The amount of money or value of property involved and the results obtained;
- The time constraints imposed by you as our client and other circumstances, such as an
emergency closing, the need for injunctive relief from court, or substantial disruption of
other office business;
- The nature and longevity of our professional relationship with you;
- The experience,reputation and expertise of the lawyers performing the services;
- The extent to which office procedures and systems have produced a high-quality product
efficiently.
Page 6
April 14, 2004
For certain well-defined services (for example, a simple business incorporation), we will
(if requested) quote a flat fee. It is our policy not to accept representation on a flat-fee basis
except in such defined-service areas or pursuant to a special arrangement tailored to the needs of
a particular client. In all such situations, the flat fee arrangement will be expressed in a letter,
setting forth both the amount of the fee and the scope of the services to be provided.
We also will, in appropriate circumstances, provide legal services on a contingent fee
basis. Any contingent fee representation must be the subject of a separate and specific
engagement letter.
Additional Charges
In addition to our fees, there will be other charges for items incident to the performance
of our legal services, such as 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. The
current basis for these charges is set forth below. The Firm will review this schedule of charges
on an annual basis and adjust them to take into account changes in the Firm's costs and other
factors.
Duplicating
The Firm charges$.15 per page.
Courier Services
The Firm charges an amount which generally represents cost including the
distribution service provided by the Firm. Depending on the volume of work
performed by a service provider,the Firm may receive a volume discount during a
particular accounting period for which no adjustment is made on an individual
client's bill.
Computer Aided Legal Research(CALR)
Third party providers of CALR services charge the Firm amounts each month
based on the type, extent, and duration of the services provided. The Firm charges
clients for client research only based on the computed cost to the Firm for the use
of the services. This cost is monitored and revised periodically to achieve an
average "at cost"rate for clients.
Telefax
The Firm charges $1.00 per page for outgoing telefaxes, which includes all
telephone costs.
Telephone
Page 7
April 14, 2004
The Firm does not charge for local calls. Due to the Firm-wide volume of long
distance calls and multitude of rates for the various area codes and exchanges
(over 65,000), the Firm does not bill each individual call based on the statements
received from providers, but rather charges a flat rate of$.41 per minute for each
long distance call made within the United States. This rate ($.41) is an
approximation of third party provider charges and internal costs associated with
this service. International calls are charged based on the rate in effect for the
country being called.
Travel-Related Expenses
Airfare, meals, and related travel expenses charged to the client represent actual,
out-of-pocket cost. Depending on the volume of both Firm and personal travel,
the Firm may receive beneficial services, including airline tickets from its travel
agent for which no adjustment is made on an individual client's account. In
addition, credits earned under the Frequent Flyer Programs accrue to the
individual traveler and not to the Firm.
All Other Costs
The Firm charges actual disbursements for third-party services like court
reporters, expert witnesses, etc., and may recoup expenses reasonably incurred in
connection with services performed in-house, such as mail services, secretarial
overtime, file retrieval, etc.
Unless special arrangements are otherwise made, fees and expenses of others (such as
experts, investigators, consultants and court reporters) will be the responsibility of, and billed
directly to, the client. Further, all invoices in excess of$500 will be forwarded to the client for
direct payment.
Billing Arrangements and Terms
Our billing rates are based on the assumption of prompt payment. Consequently, unless
other arrangements are made, fees for services and other charges will be billed monthly and are
payable within thirty days of receipt.
By engaging us, you acknowledge and agree that you are responsible for payment of fees,
expenses and disbursements. In appropriate matters as an accommodation to you, we may agree
to direct our bills to third-party payors (e.g., an insurer), but you agree that you will remain fully
responsible for timely payment of our bills if for any reason the third party does not timely pay
such bills. Likewise, we agree that we owe our professional obligations to you, even when a
third party pays our bills.
Page 8
April 14, 2004
Advances
Clients of the Firm are sometimes asked to deposit funds as an advance payment with the
Firm. The advance payment will be applied first to payment of charges for such items as
photocopying, messengers, travel, etc., as more fully described above, and then to fees for
services. The advance will be deposited in our client advance account and we will charge such
other charges and our fees against the advance and credit them on our billing statements. In the
event such other charges and our fees for services exceed the advance deposited with us, we will
bill you for the excess monthly or may request additional advances. Any unused portion of
amounts advanced will be refundable at the conclusion of our representation.
Confidentiality
We will preserve the confidentiality of information you provide us consistent with
applicable law including the rules of professional conduct governing lawyers. This confirms
your agreement that, with respect to firm brochures or other material or information regarding
the firm and its practice, we may indicate the general nature of our representation of you and
your identity as a firm client.
Client and Firm Documents
We will maintain any documents that you fin-nish to us in our client file (or files) for this matter.
At your request, we will return your documents to you at the conclusion of the matter(or earlier,
if appropriate). It is your obligation to tell us which, if any, of the documents that you furnish us
that you want returned. We will return those documents to you promptly after our receipt of
payment for outstanding fees and charges. Our own files pertaining to this matter, including the
work performed by our attorneys, will be retained by the Firm. Any documents retained by the
firm will be kept for a certain period of time, and ultimately we will destroy them in accordance
with our record retention program schedule then in effect.
1596818 2.DOC
Rx Pate/Time APR-14- M(WEP) 15 13 P. M
04/13/2004 22:08 FAX Z 002
VINSM&SUMS LLP.
Z3W F&M crmu m
Vinson&f1], 10D1 PAPOGNSUM
ATfOPMYS AT LAW IDtNM K TEXAS 77 VW60
TELEPHDM(713)7sa zP
FAX(M)79B M4
www.%vkw.com
Frank McCfcary
Dimcc Dial 713.759.2440
Dimcs Fax 713.615 5256
fmccrew)Qvelawc.jm
April 14, 2004
Board of Directors
Baytown Area Water Authority
2123 Market Street
Baytown,Texas '77520
Ladies and Gentlomen:
This letter, when accepted by you, will constitute our agreement to serve as bond counsel to
the Authority. W,agree that our services as bond counsel will include the following:
1. For each issue or series of bonds (or other obligations), attendance at all meetings
of the Hoard of Directors as required or requested in connection with the planning,
and authorization of such issue or series, including consultation on federal income
tax matters;
2. For each issue or series of bonds (or other obligations), preparation of the
resolution of the Board authorizing issuance of the obligations of such issue or
series, together with all other legal documents comprising the transcript of
proceedings for authorization and issuance of such issue or series;
3. Consultation with the Authority and the Authority's financial advisors to review
infinmation of a legal nature to be included in any Official Statement or other
prospectus for each issue or series of obligations, regarding the terms and
conditions of the obligations to be issued, the legal authority for the issuance of
the obligations and the pledge of taxes or revenues for the payment of such
obligations, and the status of the obligations and the interest thereon under federal
ina3me tax law;
4. Preparation of and submission to the Attorney General of Texas of a transcript of
proceedings for each issue or series of bonds (or other obligations) to obtain the:
approval of the Attorney General and registration by the Comptroller of Public:
Accounts of Texas of such issue or series;
5. Prermration and filing of legal documents required under federal income tax law
for each issue or series of bonds (or other obligations), and the preparation of and
EXHIBIT A
Rx Date/Time APR-19-MI (WED) H :H P. M
04/13/2004 22:08 FAX Q 003
Page 2
April 14, 2004
delivery to the Authority of a letter of instructions with respect to the federal
income tax treatment of bond proceeds;
6. Supervision of the printing of each issue or series of bonds (or other obligations);
7. Representation of the Authority at the closing of the sale of each issue or serifs,
including preparations of all closing documents; and
8. If appropriate, the delivery at closing of our approving opinion as to the validity
of each issue or series of bonds (or other obligations) under Texas law and the
exclusion of interest on such obligations from gross income of the holders under
federal income tax law.
For the services outlined above, our fee for the Authority's Series 2004 Contract Revenue
Bonds to be sold to the Texas Water Development Board would be $19,500. Such fee will be
contingent on the issuance of the bonds by the Authority. If no bonds are issued, no fee will be
due.
Fees for future bond counsel services will be established at the time of each issue, subject io
the approval of the Authority.
The Authority would also reimburse us for disbursements made on behalf of the Authority
and expenses and charges relating to our representation, including travel, long distance telephone
charges, and photocopy and document delivery charges. All such charges will be subject to
approval by the Authority.
The services outlined above do not include such matters as services as disclosure counsel in
connection with bond issues, work on post-closing federal tax or disclosure issues, obtaining IRS
rulings or clarifications of federal tax law, or presentations to rating agencies or bond insurer.;.
We will be plewed to provide legal services in connection with any matters not included in
paragraphs 1 through 8 above, but we believe that such additional services should be the subject
of a separate engagement letter.
This agreement will remain in force and effect unless terminated as provided herein. This
agreement may be terminated by either party at any time on thirty days' written notice. We
agree not to assign or otherwise transfer any interest in this agreement without the prior written
consent of the Authority.
This agreement incorporates the Standard Terms of Engagement For Legal Services (the
"Standard Terms") attached hereto. We agree that any increases in the "Additional Charges"
described in the Standard Terms will not be effective until 45 days aver receipt by the Authority
of a revised schedule of such charges reflecting any such increases.
Rx Date/Time APR-14-MIREP) IH: P, 009
04/13/2004 22:09 FAX 9 004
Page 3
April 14,2004
If the arrangement set out above meets with your approval,please take appropriate action to
approve this agreement and return one executed copy to the undersigned.
Very truly yours,
McCreary
0257:2150
Attachment
1602263_1.DOC
ACCEPTED:
BAYTOWN AREA WATER AUTHORITY
By.
President, Board of Directors
Rx Rate/Time APR-14-Z0 IREP) HA P. M
04/13/2004 22:09 FAX 0 005
Page 4
April 14, 2004
VINSON&ELMNS L.L.P.
Standard Terris of Engagement
for Legal Services
This statement sets forth certain standard terms of our engagement as your lawyers and is
intended as a supplement to the engagement letter that we have with you as our client. Unless
modified in writing by mutual agreement, these terms will be an integral part of our agreement
with you as reflected in the engagement letter. Therefore, we ask that you review this statement
carefully and contact us promptly if you have any questions. We suggest that you retain this
statement in your file with the engagement letter.
The Scope of Our Work
You should have a clear understanding of the legal services we will provide. Any
questions that you have should be dealt with promptly.
We will at all times act on your behalf to the best of our ability. Any expressions on our
part concerning the outcome of your legal matters are expressions of our best professiomil
judgment,but are not guarantees. Such opinions are necessarily limited by our knowledge of the
facts and are based on the state of the law at the time they are expressed.
It is our policy that the person or entity that we represent is the person or entity that is
identified in our engagement letter, and absent an express agreement to the contrary does not
include any affiliates of such person or entity (e.g., if you are a corporation or partnership, any
parents, subsidiaries, employees, officers, directors, shareholders or partners of the corporation
or partnership, or commonly owned corporations or partnerships; or, if you are a trade
association, any members of the trade association). If you believe this engagement includes
additional entities or persons as our clients you should inform us immediately.
It is also our policy that the attorney-client relationship will be considered terminated
upon our completion of any services that you have retained us to perform. If you later retain us
to perform further or additional services, our attorney-client relationship will be revived subjecst
to the terms of engagement that we agree on at that time.
This engagement shall be subject to the Texas Disciplinary Rules of Prolbssionid
Conduct.
Who Will Provide the Legal Services
Customarily, each client of the Firm is served by a principal attorney contact. The
principal attorney should be someone in whom you have confidence and with whom you enjoy
working. You at-e free to request a change of principal attorney at any time. Subject to the
supervisory role of the principal attorney, your work or parts of it may be performed by other
lawyers and legal assistants in the Firm. Such delegation may be for the purpose of involving
lawyers or legal assistants with special expertise in a given area or for the purpose of providing
Rx Date/Time APR-19-20 MEP) H: H P- M
04/13/2004 22:09 FAX 1006
Page 5
April 14,2004
services on the most efficient and timely basis. 'Whenever practicable, we will advise you of the
names of those attorneys and legal assistants who work on your matters.
How Our Fees Will Be Set
Generally, our fees are based on the time spent by the lawyers and paralegal personnel
who work on the matter. We will charge for all time spent in representing your interests,
including, by way of illustration, telephone and office conferences with you and your
representatives, consultants (if any), opposing counsel, and others; conferences among our legal
and paralegal personnel; factual investigation; legal research; responding to your requests for us
to provide information to your auditors in connection with reviews or audits of financial
statements; drafing letters and other documents; and travel. We will keep accurate records of
the time we devote to your work in units of quarters of an hour.
The hourly rates of our lawyers and legal assistants are reviewed and adjusted annually
on a firm-wide bmis to reflect current levels of legal experience, changes in overhead costs, and
other factors.
Although we may from time to time, at the client's request, furnish estimates of legal fens
and other charges that we anticipate will be incurred, these estimates are by their nature inexact
(due to unforeseeable circumstances) and,therefore,the actual fees and charges ultimately billet
may vary from such estimates.
With your advance agreement, the fees ultimately charged may be based upon a numbs
of factors, such as:
The time and effort required, the novelty and complexity of the issues presented, and the
skill required to perform the legal services promptly;
The fees t;ustomarily charged in the community for similar services and the value of the
services to you;
The amount of money or value of property involved and the results obtained;
The time constraints imposed by you as our client and other circumstances, such as an
emergency closing, the need for injunctive relief from court, or substantial disruption of
other office business;
The nature and longevity of our professional relationship with you;
The experience,reputation and expertise of the lawyers performing the services;
The extent to which office procedures and systems have produced a high-quality product
efficiently.
Rx Pate/Time APR-14-MI (CEP) I 3 P. H?
04/13/2004 22:09 FAX Q 007
Page 6
April 14, 2004
For certain well-defined services (for example, a simple business incorporation), we will
(if requested) quote a flat fee. It is our policy not to accept representation on a flat-fee basis
except in such defined-service areas or pursuant to a special arrangement tailored to the needs of
a particular client. In all such situations, the flat fee arrangement will be expressed in a lettt.7,
setting forth both the amount of the fee and the scope of the services to be provided.
We also will, in appropriate circumstances, provide legal services on a contingent fee
basis. Any contingent fee representation must be the subject of a separate and specific
engagement letter.
Additional Charges
In addition to our fees, there will be other charges for items incident to the performance
of our legal services, such as 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. The
current basis for these charges is set forth below. The Firm will review this schedule of charges
on an annual basis and adjust them to take into account changes in the Firm's costs and other
factors.
licatin
The Firm charges$.15 per page.
Courier Services
The Firm charges an amount which generally represents cost including the
distribution service provided by the Firm. Depending on the volume of work
performed by a service provider,the Firm may receive a volume discount during a
particular accounting period for which no adjustment is made on an individual
client's bill.
Qm_ Ruter Aided Legal Research(CALM
Third party providers of CALR services charge the Firm amounts each month
based on the type, extent, and duration of the services provided. The Firm charges
clients for client research only based on the computed cost to the Firm for the use
of the services. This cost is monitored and revised periodically to achieve an
average "at cost"rate for clients.
Telefax
The Firm charges $1.00 per page for outgoing telefaxes, which includes A
telephone costs.
Telephone
Rx Date/Time APR-14-MI(WEP) HA P. 008
04/13/2004 22:09 FAX 008
Page 7
April 14,2004
The Firm does not charge for local calls. Due to the Firm-wide volume of long
distance calls and multitude of rates for the various area codes and exchanges
(aver 65,000), the Firm does not bill each individual call based on the statements
received from providers, but rather charges a flat rate of$.41 per minute for each
long distance call made within the United States. This rate ($.41) is .m
approximation of third party provider charges and internal costs associated with
this service. International calls are charged based on the rate in effect for the
country being called.
Travel-Related Ex enses
Airfare, meals, and related travel expenses charged to the client represent actual,
out-of-pocket cost, Depending on the volume of both Firm and personal travel,
the Firm may receive beneficial services, including airline tickets from its travel
agent for which no adjustment is made on an individual client's account. In
addition, credits earned under the Frequent Flyer Programs accrue to the
individual traveler and not to the Firm.
All Other Costs
The Firm charges actual disbursements for third-party services like court
reporters, expert witnesses, etc., and may recoup expenses reasonably incurred in
connection with services performed in-house, such as mail services, secretarial
overtime, file retrieval, etc.
Unless special arrangements are otherwise made, fees and expenses of others (such as
experts, investigators, consultants and court reporters) will be the responsibility of, and billed
directly to, the client. Further, all invoices in excess of$500 will be forwarded to the client for
direct payment.
Billing Arrangements and Terms
Our billing rates are based on the assumption of prompt payment. Consequently, unless
other arrangements are made, fees for services and other charges will be billed monthly and are
payable within thirty days of receipt.
By engaging us, you acknowledge and agree that you are responsible for payment of fe%,
expenses and disbursements. In appropriate matters as an accommodation to you, we may agree
to direct our bills to third-party payors (e.g., an insurer), but you agree that you will remain fully
responsible for tiraely payment of our bills if for any reason the third party does not timely pay
such bills. Likevrise, we agree that we owe our professional obligations to you, even when a
third party pays our bills.
Rx Rate/Time APR-19-2HflWH) I[H PIP
04/13/2004 22:10 FAX Q 009
Page S
April 14, 2004
Advances
Clients of the Firm are sometimes asked to deposit funds as an advance payment with the
Firm. The advance payment will be applied first to payment of charges for such items as
photocopying, messengers, travel, etc., as more fully described above, and then to fees for
services. The advance will be deposited in our client advance account and we will charge such
other charges and our fees against the advance and credit them on our billing statements. In the
event such other charges and our fees for services exceed the advance deposited with us,we will
bill you for the excess monthly or may request additional advances. Any unused portion of
amounts advancad will be refundable at the conclusion of our representation.
Confidentiality
We will preserve the confidentiality of information you provide us consistent with
applicable law including the rules of professional conduct governing lawyers. This confirnis
your agreement that, with respect to firm brochures or other material or information regarding
the firm and its practice, we may indicate the general nature of our representation of you and
your identity as a firm client.
Client and Fyrm Documents
We will maintain any documents that you famish to us in our client file(or files) for this mutter.
At your request, ive will return your documents to you at the conclusion of the matter(or earlier,
if appropriate). It is your obligation to tell us which, if any, of the documents that you filrnish its
that you want returned. We will return those documents to you promptly after our receipt of
payment for outstanding fees and charges. Our own files pertaining to this matter, including the
work performed by our attorneys, will be retained by the Firm. .Any documents retained by the
firm will be kept for a certain period of time, and ultimately we will destroy them in accordance
with our record retention program schedule then in effect.
16=63_1.DW
VINSON&ELKINS L.L.P.
2300 FIRST CITY TOWER
Vinson&M 1001 FANNIN STREET
ATTORNEYS ATLAW HDLM ON,TEXAS 77002-6760
TELEPHONE(713)758-2222
FAX(713)758-2346
www.velawcom
Frank McCreary
Direct Dial 713-758-2440
Direct Fax 713-615.5256
fmccrear)6velawcom
April 21, 2004
Board of Directors
Baytown Area Water Authority
2123 Market Street
Baytown,Texas 77520
Ladies and Gentlemen:
This letter, when accepted by you, will constitute our agreement to serve as bond counsel to
the Authority. We agree that our services as bond counsel will include the following:
1. For each issue or series of bonds (or other obligations), attendance at all meetings
of the Board of Directors as required or requested in connection with the planning
and authorization of such issue or series, including consultation on federal income
tax matters;
2. For each issue or series of bonds (or other obligations), preparation of the
resolution of the Board authorizing issuance of the obligations of such issue or
series, together with all other legal documents comprising the transcript of
proceedings for authorization and issuance of such issue or series;
3. Consultation with the Authority and the Authority's financial advisors to review
information of a legal nature to be included in any Official Statement or other
prospectus for each issue or series of obligations, regarding the terms and
conditions of the obligations to be issued, the legal authority for the issuance of
the obligations and the pledge of taxes or revenues for the payment of such
obligations, and the status of the obligations and the interest thereon under federal
income tax law;
4. Preparation of and submission to the Attorney General of Texas of a transcript of
proceedings for each issue or series of bonds (or other obligations) to obtain the
approval of the Attorney General and registration by the Comptroller of Public
Accounts of Texas of such issue or series;
5. Preparation and filing of legal documents required under federal income tax law
for each issue or series of bonds (or other obligations), and the preparation of and
AUSTIN • SEWING • DALLAS • DUBAI • HOUSTON • LONDON • MOSCOW • NEW YORK • SINGAPORE • WASHINGTON,D.C.
Page 2
April 21, 2004
delivery to the Authority of a letter of instructions with respect to the federal
income tax treatment of bond proceeds;
6. Supervision of the printing of each issue or series of bonds(or other obligations);
7. Representation of the Authority at the closing of the sale of each issue or series,
including preparation of all closing documents; and
8. If appropriate, the delivery at closing of our approving opinion as to the validity
of each issue or series of bonds (or other obligations) under Texas law and the
exclusion of interest on such obligations from gross income of the holders under
federal income tax law.
For the services outlined above, our fee for the Authority's Series 2004 Contract Revenue
Bonds to be sold to the Texas Water Development Board would be $19,500. Such fee will be
contingent on the issuance of the bonds by the Authority. If no bonds are issued, no fee will be
due.
Fees for future bond counsel services will be established at the time of each issue, subject to
the approval of the Authority.
The Authority would also reimburse us for disbursements made on behalf of the Authority
and expenses and charges relating to our representation, including travel, long distance telephone
charges, and photocopy and document delivery charges. All such charges will be subject to
approval by the Authority.
The services outlined above do not include such matters as services as disclosure counsel in
connection with bond issues, work on post-closing federal tax or disclosure issues, obtaining IRS
rulings or clarifications of federal tax law, or presentations to rating agencies or bond insurers.
We will be pleased to provide legal services in connection with any matters not included in
paragraphs 1 through 8 above, but we believe that such additional services should be the subject
of a separate engagement letter.
This agreement will remain in force and effect unless terminated as provided herein. This
agreement may be terminated by either party at any time on thirty days' written notice. We
agree not to assign or otherwise transfer any interest in this agreement without the prior written
consent of the Authority.
This agreement incorporates the Standard Terms of Engagement For Legal Services (the
"Standard Terms") attached hereto. We agree that any increases in the "Additional Charges"
described in the Standard Terms will not be effective until 45 days after receipt by the Authority
of a revised schedule of such charges reflecting any such increases.
Page 3
April 21, 2004
If the arrangement set out above meets with your approval, please take appropriate action to
approve this agreement and return one executed copy to the undersigned.
Very truly yours,
tank cCreary
0257:2150
Attachment
1602263_1.DOC
ACCEPTED:
BAYTOWN AREA WATER AUTHORITY
By:::- .. '
?Zc�
President, Board of Directors
-!A(-
Page 4
April 21, 2004
VINSON&ELEINS L.L.P.
Standard Terms of Engagement
for Legal Services
This statement sets forth certain standard terms of our engagement as your lawyers and is
intended as a supplement to the engagement letter that we have with you as our client. Unless
modified in writing by mutual agreement, these terms will be an integral part of our agreement
with you as reflected in the engagement letter. Therefore, we ask that you review this statement
carefully and contact us promptly if you have any questions. We suggest that you retain this
statement in your file with the engagement letter.
The Scope of Our Work
You should have a clear understanding of the legal services we will provide. Any
questions that you have should be dealt with promptly.
We will at all times act on your behalf to the best of our ability. Any expressions on our
part concerning the outcome of your legal matters are expressions of our best professional
judgment,but are not guarantees. Such opinions are necessarily limited by our knowledge of the
facts and are based on the state of the law at the time they are expressed.
It is our policy that the person or entity that we represent is the person or entity that is
identified in our engagement letter, and absent an express agreement to the contrary does not
include any affiliates of such person or entity (e.g., if you are a corporation or partnership, any
parents, subsidiaries, employees, officers, directors, shareholders or partners of the corporation
or partnership, or commonly owned corporations or partnerships; or, if you are a trade
association, any members of the trade association). If you believe this engagement includes
additional entities or persons as our clients you should inform us immediately.
It is also our policy that the attorney-client relationship will be considered terminated
upon our completion of any services that you have retained us to perform. If you later retain us
to perform further or additional services, our attorney-client relationship will be revived subject
to the terms of engagement that we agree on at that time.
This engagement shall be subject to the Texas Disciplinary Rules of Professional
Conduct.
Who Will Provide the Legal Services
Customarily, each client of the Firm is served by a principal attorney contact. The
principal attorney should be someone in whom you have confidence and with whom you enjoy
working. You are free to request a change of principal attorney at any time. Subject to the
supervisory role of the principal attorney, your work or parts of it may be performed by other
lawyers and legal assistants in the Firm. Such delegation may be for the purpose of involving
lawyers or legal assistants with special expertise in a given area or for the purpose of providing
Page 5
April 21,2004
services on the most efficient and timely basis. Whenever practicable, we will advise you of the
names of those attorneys and legal assistants who work on your matters.
How Our Fees Will Be Set
Generally, our fees are based on the time spent by the lawyers and paralegal personnel
who work on the matter. We will charge for all time spent in representing your interests,
including, by way of illustration, telephone and office conferences with you and your
representatives, consultants (if any), opposing counsel, and others; conferences among our legal
and paralegal personnel; factual investigation; legal research; responding to your requests for us
to provide information to your auditors in connection with reviews or audits of financial
statements; drafting letters and other documents; and travel. We will keep accurate records of
the time we devote to your work in units of quarters of an hour.
The hourly rates of our lawyers and legal assistants are reviewed and adjusted annually
on a firm-wide basis to reflect current levels of legal experience, changes in overhead costs, and
other factors.
Although we may from time to time, at the client's request, furnish estimates of legal fees
and other charges that we anticipate will be incurred, these estimates are by their nature inexact
(due to unforeseeable circumstances) and, therefore, the actual fees and charges ultimately billed
may vary from such estimates.
With your advance agreement, the fees ultimately charged may be based upon a number
of factors, such as:
- The time and effort required, the novelty and complexity of the issues presented, and the
skill required to perform the legal services promptly;
- The fees customarily charged in the community for similar services and the value of the
services to you;
- The amount of money or value of property involved and the results obtained;
- The time constraints imposed by you as our client and other circumstances, such as an
emergency closing, the need for injunctive relief from court, or substantial disruption of
other office business;
- The nature and longevity of our professional relationship with you;
- The experience,reputation and expertise of the lawyers performing the services;
- The extent to which office procedures and systems have produced a high-quality product
efficiently.
Page 6
April 21, 2004
For certain well-defined services (for example, a simple business incorporation), we will
(if requested) quote a flat fee. It is our policy not to accept representation on a flat-fee basis
except in such defined-service areas or pursuant to a special arrangement tailored to the needs of
a particular client. In all such situations, the flat fee arrangement will be expressed in a letter,
setting forth both the amount of the fee and the scope of the services to be provided.
We also will, in appropriate circumstances, provide legal services on a contingent fee
basis. Any contingent fee representation must be the subject of a separate and specific
engagement letter.
Additional Charges
In addition to our fees, there will be other charges for items incident to the performance
of our legal services, such as 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. The
current basis for these charges is set forth below. The Firm will review this schedule of charges
on an annual basis and adjust them to take into account changes in the Finn's costs and other
factors.
Duplicating
The Firm charges$.15 per page.
Courier Services
The Firm charges an amount which generally represents cost including the
distribution service provided by the Firm. Depending on the volume of work
performed by a service provider,the Firm may receive a volume discount during a
particular accounting period for which no adjustment is made on an individual
client's bill.
Computer Aided Legal Research(CALR)
Third party providers of CALR services charge the Firm amounts each month
based on the type, extent, and duration of the services provided. The Firm charges
clients for client research only based on the computed cost to the Firm for the use
of the services. This cost is monitored and revised periodically to achieve an
average "at cost"rate for clients.
Telefax
The Firm charges $1.00 per page for outgoing telefaxes, which includes all
telephone costs.
Telephone
Page 7
April 21, 2004
The Firm does not charge for local calls. Due to the Firm-wide volume of long
distance calls and multitude of rates for the various area codes and exchanges
(over 65,000), the Firm does not bill each individual call based on the statements
received from providers, but rather charges a flat rate of$.41 per minute for each
long distance call made within the United States. This rate ($.41) is an
approximation of third party provider charges and internal costs associated with
this service. International calls are charged based on the rate in effect for the
country being called.
Travel-Related Expenses
Airfare, meals, and related travel expenses charged to the client represent actual,
out-of-pocket cost. Depending on the volume of both Firm and personal travel,
the Firm may receive beneficial services, including airline tickets from its travel
agent for which no adjustment is made on an individual client's account. In
addition, credits earned under the Frequent Flyer Programs accrue to the
individual traveler and not to the Firm.
All Other Costs
The Firm charges actual disbursements for third-party services like court
reporters, expert witnesses, etc., and may recoup expenses reasonably incurred in
connection with services performed in-house, such as mail services, secretarial
overtime, file retrieval, etc.
Unless special arrangements are otherwise made, fees and expenses of others (such as
experts, investigators, consultants and court reporters) will be the responsibility of, and billed
directly to, the client. Further, all invoices in excess of$500 will be forwarded to the client for
direct payment.
Billing Arrangements and Terms
Our billing rates are based on the assumption of prompt payment. Consequently, unless
other arrangements are made, fees for services and other charges will be billed monthly and are
payable within thirty days of receipt.
By engaging us, you acknowledge and agree that you are responsible for payment of fees,
expenses and disbursements. In appropriate matters as an accommodation to you, we may agree
to direct our bills to third-party payors (e.g., an insurer), but you agree that you will remain fully
responsible for timely payment of our bills if for any reason the third party does not timely pay
such bills. Likewise, we agree that we owe our professional obligations to you, even when a
third party pays our bills.
Page 8
April 21, 2004
Advances
Clients of the Firm are sometimes asked to deposit funds as an advance payment with the
Firm. The advance payment will be applied first to payment of charges for such items as
photocopying, messengers, travel, etc., as more fully described above, and then to fees for
services. The advance will be deposited in our client advance account and we will charge such
other charges and our fees against the advance and credit them on our billing statements. In the
event such other charges and our fees for services exceed the advance deposited with us, we will
bill you for the excess monthly or may request additional advances. Any unused portion of
amounts advanced will be refundable at the conclusion of our representation.
Confidentiality
We will preserve the confidentiality of information you provide us consistent with
applicable law including the rules of professional conduct governing lawyers. This confirms
your agreement that, with respect to firm brochures or other material or information regarding
the firm and its practice, we may indicate the general nature of our representation of you and
your identity as a firm client.
Client and Firm Documents
We will maintain any documents that you furnish to us in our client file (or files) for this matter.
At your request,we will return your documents to you at the conclusion of the matter(or earlier,
if appropriate). It is your obligation to tell us which, if any, of the documents that you famish us
that you want returned. We will return those documents to you promptly after our receipt of
payment for outstanding fees and charges. Our own files pertaining to this matter, including the
work performed by our attorneys, will be retained by the Firm. Any documents retained by the
firm will be kept for a certain period of time, and ultimately we will destroy them in accordance
with our record retention program schedule then in effect.
1602263_1.DOC