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09-05-2007 SHERMAN & HOWARD LLC SIGNED ENGAGEMENT LETTER AS COUNSEL TO THE AURAC O L O R A D O September 5, 2007 Sherman & Howard LLC Attorneys & Counselors at Law 633 Seventeenth St, Suite # 3000 Denver, CO 80202 Dear Sir: 970-748-4000 970-949-9139 Fax Relay recognized www.avon.org Please see enclosed a copy of the signed engagement letter from Sherman & Howard as counsel to the Avon Urban Renewal Authority. Sincerely, ~c atty cK y, Dire or of Administrative Services P.O. Box 975 Avon, CO 81620 Avon... a smoke free community Post Office Box 975 400 Benchmark Road Avon, Colorado 81620 Sherman & Howard L.L.C. Randy D. Funk Direct Dial Number: (303) 299-8046 E-mail: rfunk@sah.com ATTORNEYS & COUNSELORS AT LAW 633 SEVENTEENTH STREET, SUITE 3000 DENVER, COLORADO 80202 TELEPHONE: 303 297-2900 FAX: 303 298-0940 OFFICES IN: COLORADO SPRINGS RENO • LAS VEGAS • PHOENIX August 28, 2007 Mr. Ronald C. Wolfe Chairman of the Board of Commissioners Avon Urban Renewal Authority P.O. Box 975 Avon, Colorado, 81620 Dear Chairman Wolfe: This letter is to confirm our engagement as counsel to the Avon Urban Renewal Authority (the "Authority"). We have completed our engagement with the Town of Avon to create the Authority as set forth in our letter dated September 6, 2006, and we look forward to representing the Authority. We appreciate the Authority's confidence in us and will do our best to continue to merit it. In establishing the attorney-client relationship, we believe that it is good practice to set forth in some detail and in writing the elements of our mutual understanding as to the scope of our representation and the terms of our employment. While some (perhaps most) of the matters covered in this letter will never be relevant or of concern between us, we hope you will understand that, as attorneys and counsellors, it is our natural function to try to make communication clear and complete, and to anticipate and resolve questions before they arise. Also, we believe that since performance of our services may require our joint effort and cooperation, the better our mutual understanding of our respective roles, responsibilities and contributions, the more efficient, effective and economical our work for the Authority can be. Scope of Employment We understand our employment will include those matters requested by you, the Executive Director of the Authority, the Treasurer of the Authority, or the Board of Commissioners of the Authority and will likely include providing the Authority legal advice and assistance in a variety of areas including, but not limited to the organization of the Authority; the approval and implementation of urban renewal plans, the planning of Authority financing projects. Authority is Client We understand that the Authority, rather than any individual Commissioner or employee, is our client. We expect that most of our contacts with the Authority will be through the Authority's staff, and we will generally rely upon the Authority's staff to keep the Board of Commissioners informed about the advice and other legal services we provide. However, since Sherman & Howard L.L.C. Avon Urban Renewal Authority August 28, 2007 Page 2 the ultimate responsibility for the management of the Authority is vested in the Board of Commissioners, there may be occasions when we will deem it advisable to communicate directly with the Board of Commissioners. Conflicts of Interest Before accepting any new business, the Colorado Rules of Professional Conduct (the "Rules") require us to evaluate whether there exist any ethical constraints to representing the Authority. As you are aware, our firm currently represents the Town of Avon (the "Town") in a variety-of matters While the Authority and the Town cooperate in many material respects, they are separate entities and could possibly have interests that are adverse to one another. We do not believe that our current or prospective engagements as counsel to the Town will materially limit or adversely affect our ability to represent the Authority because the potential for adversity between the Town and the Authority is remote and minor. In reviewing our current and potential future representation of the parties discussed above, we have considered: whether we can represent each client with undivided loyalty; whether we can protect the confidentiality of each client; the duration and extent of our engagement with the parties; the likelihood that a conflict will eventuate, possibly requiring our withdrawal from the representation; and should any conflict arise, any prejudice to each client which might result therefrom. Consent Requested. Pursuant to the matters discussed herein, we will treat your execution of this letter as consent to our current representation of the Town. Your execution of this letter will also signify the Authority's consent to our prospective representation of the Town while we are representing the Authority hereunder. If at any time a question should arise about an adverse representation, please do not hesitate to contact us. Supervision and Delegation I will be the attorney who will coordinate and oversee the services we perform on the Authority's behalf. We routinely delegate selected responsibilities to other persons in our firm when, because of special experience, time availability or other reasons, they are in a better position to carry them out. In addition, we will try, where feasible, to delegate tasks to persons who can properly perform them at the least cost to the Authority. Financial Arrangements I am enclosing a Memorandum about Financial Arrangements, which outlines the financial terms of our engagement. Please read the memorandum carefully. If anything in the financial arrangements presents a problem, or is unclear, please advise me promptly so that we may discuss it and reach a full understanding. Sherman & Howard's rates for the work by its attorneys and legal assistants vary based on the experience and expertise of the individuals involved. Typically, we adjust these rates at the beginning of a calendar year to reflect changing economic conditions. Colorado's ethics rules governing attorneys require that the basis or rate of legal fees be communicated to the client Sherman & Howard L.L.C. Avon Urban Renewal Authority August 28, 2007 Page 3 in writing. Accordingly, set out below are the firm's current billing rates for the attorneys and legal assistants who will be working with the Authority. We are sensitive to the Authority's budgetary constraints and for certain matters as mutually agreed we will provide some discount from these fees. Generally, when our fees are able to be reimbursed from a third-party or paid from a financing transaction, we will charge our standard rates. For other matters when such recovery is not likely, we will discount our rates by 10%. We will always strive to use the most cost-effective means to accomplish the Authority's objectives. If you have any questions about the fees being charged for your representation, please contact me. Attorney/ Legal Assistant Randy D. Funk Matthew O. Gray Hourly Effective Rate Date $350.00 December 17, 2006 $190.00 December 17, 2006 Public Contract for Services - Compliance with § 8-17.5-101 C.R.S.. In connection with our engagement with the Authority, Sherman & Howard L.L.C. qualifies as a "contractor" pursuant to § 8-17.5-101(2), C.R.S. and we hereby certify that, as of the date hereof. (i) we do not knowingly employ or contract with an illegal alien, and (ii) we have participated in the Basic Pilot Program (as defined in § 8-17.5-101(1), C.R.S.) in order to confirm the employment eligibility of all employees who are newly hired for employment in the United States. In compliance with Section § 8-17.5-102(2), C.R.S., the provisions set forth in Exhibit A to this engagement letter are incorporated herein and made a part hereof. We are pleased to have the Authority as a client, and look forward to a mutually satisfactory and beneficial relationship. Our effectiveness and the Authority's best interest are enhanced by an atmosphere of candor and confidence between us, not only as to the facts and circumstances of the legal issues on which we are working, but also as to the client-attorney relationship itself. We hope you will not hesitate to discuss with us any question or concern you might have about either. Sincerely, andy D. Funk Sherman & Howard L.L.C. Avon Urban Renewal Authority August 28, 2007 Page 4 Accepted and Approved: AVON URBAN RENEWAL AUTHORITY i t V By: Mr. Ronald C. Wolfe Its: Chairman Date: Q 1 a% 10-1 RDF/rh Enclosure Sherman & Howard L.L.C. Exhibit A A. Sherman & Howard L.L.C. shall not: (I) knowingly employ or contract with an illegal alien to perform work described in this engagement letter under Scope of Employment (the "Legal Services") or (II) enter into a contract with a subcontractor that fails to certify to Sherman & Howard L.L.C. that the subcontractor shall not knowingly employ or contract with an illegal alien to perform the Legal Services. B. Sherman & Howard L.L.C.: (I) has confirmed or attempted to confirm the employment eligibility of all employees who are newly hired for employment in the United States through participation in the Basic Pilot Program; (II) shall not use Basic Pilot Program procedures to undertake preemployment screening of job applicants while performing Legal Services; (III) shall be required (only if Sherman & Howard L.L.C. obtains actual knowledge that a subcontractor performing Legal Services knowingly employs or contracts with an illegal alien): (a) to notify the subcontractor and the Authority within three days that Sherman & Howard L.L.C. has actual knowledge that the subcontractor is employing or contracting with an illegal alien; and (b) terminate the subcontract with the subcontractor if within three days of receiving the notice required pursuant to subparagraph (a) of this subparagraph (III) the subcontractor does not stop employing or contracting with the illegal alien; except that Sherman & Howard L.L.C. shall not terminate the contract with the subcontractor if during such three days the subcontractor provides information to establish that the subcontractor has not knowingly employed or contracted with an illegal alien; and (IV) shall comply with any reasonable request by the Department of Labor and Employment made in the course of an investigation that such department is undertaking pursuant to § 8-17.5-102(5) C.R.S. Sherman & Howard L.L.C. MEMORANDUM ABOUT FIRM POLICIES 1. FINANCIAL ARRANGEMENTS 1. Periodic Billings for Legal Services. Unless we have reached a different agreement in a specific matter, the firm submits statements for legal services monthly. These are generally mailed toward the middle of the month following the latest date covered in the statement. In retaining Sherman & Howard, you agree to pay our statements upon presentation. If you do not pay statements within 30 days after receipt, the firm may, at its option, charge a late fee at the rate of 12% per annum on the balance due. 2. Determining the Fee. This firm has offices in Colorado, Nevada and Arizona. In fixing fees for services, our lawyers are bound by the rules of professional conduct established by the Supreme Courts of those states. These rules list a number of factors to be considered .in establishing a fee. These include: time spent; reputation; the skill and experience required to complete the services properly; the extent to which the acceptance of the particular matter will preclude other employment; the amount involved; the results obtained; the time limitations imposed by the client or by the circumstances; the nature and length of the professional relationship with the client; and whether the fee is fixed or contingent. Generally, the firm fixes the fees for its services based primarily on hourly rates for the lawyers or paralegals performing the services. These rates reflect the experience and expertise of the individuals involved. At the present time, hourly rates for Members and Counsel range from $310 to $425; rates for Associates range from $190 to $290; and rates for Paralegals range from $100 to $135. We adjust hourly rates from time to time, generally at year end. We will use the modified rates in setting fees for work performed after such adjustments. Circumstances, including those set out above, may require departure from the application of hourly rates. When expressly agreed in writing, fees may be fixed on some other basis. 3. Retainers. With new clients or with substantial new matters for existing clients, the firm may require the client to pay a retainer. A retainer is in the nature of a deposit, held by the firm for the protection of its investment of time and effort. With a retainer, we still bill for services on a periodic basis. Ordinarily, we will apply the retainer against fees and expenses billed on our periodic statements, but you agree to pay the full amount of those statements as submitted. This will keep the retainer at the agreed amount through the course of the representation. At the time of the final billing, we will apply the retainer against the balance due and return any excess. 4. Paralegals. Certain work may be done by paralegals or legal assistants. Such persons, although not lawyers, have undergone training to perform certain services that would otherwise need to be performed by lawyers. That work is supervised by lawyers. The use of paralegals allows us to deliver legal services to you at a lower cost. 5. Contract Personnel. On occasion, when the nature of a specific engagement or personnel needs require, we may use contract lawyers or paralegals to assist on a specific project. Ordinarily, we bill for their services based on experience and expertise of the individuals on the same basis as for "regular" lawyers and paralegals. Sherman & Howard L.L.C. 6. Client Disbursements. Most matters require the firm to incur certain expenses on your behalf. Some of these reflect payments to third parties while others represent internal costs incurred to provide services. These expenses include items such as fees for court filings, delivery and copying charges, travel expenses, computer assisted research and a variety of others. In retaining the firm, you agree that we have the authority to use our judgment in making such expenditures on your behalf and that you will pay such amounts as billed on our periodic statements. We will do our best to minimize these costs and generally will seek your approval before incurring significant items of expense. If the nature of the matter is such that we anticipate substantial advances, we may require a separate deposit for such purpose. We also may request that substantial individual items such as expert witness fees, the costs of deposition transcripts and major printing costs be billed directly to you by the vendor. You agree to pay such items as billed by the vendors. II. DOCUMENT RETENTION POLICY Sherman & Howard has adopted a policy for client file retention to comply with applicable legal ethics rules. Under that policy, at the conclusion of our representation of a client in a matter, a responsible firm attorney will direct a review of the file to determine which materials should be retained because of pending proceedings or as a record of the representation and which are no longer needed. Ordinarily, we will retain for several years such materials as correspondence, final substantive work product, documents obtained from the client, and documents obtained from third parties. We may not retain such materials as duplicates of the above-described material, or drafts and notes. Duplicates, drafts and notes are generally no longer needed by the client or by the firm after the conclusion of the representation. As to the client file materials that we retain, ordinarily the firm will keep files for Business, Real Estate, Litigation and Employment Law matters for seven years, Tax and Estate Plan matters for ten years and Public Finance matters for seven years after the final maturity of the bonds. At the end of that time, unless a client has advised us in writing to the contrary, we will destroy the bulk of the file. We would not destroy original legal documents such as corporate records, employee benefit plans, deeds or contracts, if these original documents are in our file. Nor will we destroy originals or copies of wills, estate plans, or trusts. Ordinarily, we will return those to the client. If the file is especially voluminous, we may return the client documents to the client sooner than the end of this period as our storage facilities are limited. If a client wishes to snake other arrangements for retention or disposition of files, the client should advise the firm in writing. Whatever alternative arrangements are agreed to should be put in writing so both client and the firm are clear on their obligations. If at any time the client's files become subject to legal or administrative process or become relevant to pending or threatened litigation, the client should also advise us of that promptly, so the firm can take appropriate steps to preserve those files. At the conclusion of a representation, even if the client directs the firm to return files from the representation, the firm always reserves the right to retain a copy of the client files. 2 BUS_RE\1406721.1 Randy D. Funk Direct Dial Number: (303) 299-8046 E-mail: rfunk@sah.com August 28, 2007 Mr. Larry Brooks Town Manager Town of Avon, Colorado P.O. Box 975 Avon, Colorado, 81620 Dear Mr. Brooks: This letter is to confirm our engagement as counsel to the Town of Avon, Colorado (the "Town"). We have completed our engagement with the Town to create the Avon Urban Renewal Authority as set forth in our letter dated September 6, 2006, and we look forward to continuing to represent the Town in the future on other matters as requested. We appreciate the Town's confidence in us and will do our best to continue to merit it. In establishing the attorney-client relationship, we believe that it is good practice to set forth in some detail and in writing the elements of our mutual understanding as to the scope of our representation and the terms of our employment. While some (perhaps most) of the matters covered in this letter will never be relevant or of concern between us, we hope you will understand that, as attorneys and counsellors, it is our natural function to try to make communication clear and complete, and to anticipate and resolve questions before they arise. Also, we believe that since performance of our services may require our joint effort and cooperation, the better our mutual understanding of our respective roles, responsibilities and contributions, the more efficient, effective and economical our work for the Town can be. Scope of Employment We understand our employment will include those matters requested by you, the Town Attorney, or the Town Council and will likely include providing the Town legal advice and assistance in a variety of areas including, but not limited to land use matters, Town financing projects and other municipal law matters affecting the Town. Town is Client We understand that the Town, rather than any individual Council Member or employee, is our client. We expect that most of our contacts with the Town will be through the Town's staff, and we will generally rely upon the Town's staff to keep the Town Council informed about the advice and other legal services we provide. However, since the ultimate responsibility for the management of the Town is vested in the Town Council, there may be occasions when we will deem it advisable to communicate directly with the Town Council. `L Town of Avon, Colorado August 28, 2007 Page 2 Conflicts of Interest Before accepting any new business, the Colorado Rules of Professional Conduct (the "Rules") require us to evaluate whether there exist any ethical constraints to representing the Town. As you are aware, our firm currently represents the Avon Urban Renewal Authority (the "Authority") in a variety of matters While the. Town and the Authority cooperate in many material respects, they are separate entities and could possibly have interests that are adverse to one another. We do not believe that our current or prospective engagements as counsel to the Authority will materially limit or adversely affect our ability to represent the Town because the potential for adversity between the Town and the Authority is remote and minor. In reviewing our current and potential future representation of the parties discussed above, we have considered: whether we can represent each client with undivided loyalty, whether we can protect the confidentiality of each client; the duration and extent of our engagement with the parties; the likelihood that a conflict will eventuate, possibly requiring our withdrawal from the representation; and should any conflict arise, any prejudice to each client which might result therefrom. Consent Requested. Pursuant to the matters discussed herein, we will treat your execution of this letter as consent to our current representation of the Authority. Your execution of this ( letter will also signify the Town's consent to our prospective representation of the Authority while we are representing the Town hereunder. If at any time a question should arise about an adverse representation, please do not hesitate to contact us. Supervision and Delegation I will be the attorney who will coordinate and oversee the services we perform on the Town's behalf. We routinely delegate selected responsibilities to other persons in our firm when, because of special experience, time availability or other reasons, they are in a better position to carry them out. In addition, we will try, where feasible, to delegate tasks to persons who can properly perform them at the least cost to the Town. Financial Arrangements I am enclosing a Memorandum about Financial Arrangements, which outlines the financial terms of our engagement. Please read the memorandum carefully. If anything in the financial arrangements presents a problem, or is unclear, please advise me promptly so that we may discuss it and reach a full understanding. Sherman & Howard's rates for the work by its attorneys and legal assistants vary based on the experience and expertise of the individuals involved. Typically, we adjust these rates at the beginning of a calendar year to reflect changing economic conditions. Colorado's ethics rules governing attorneys require that the basis or rate of legal fees be communicated to the client in writing. Accordingly, set out below are the firm's current billing rates for the attorneys and legal assistants who will be working with the Town. We are sensitive to *the Town's budgetary constraints and for certain matters as mutually agreed we will provide some discount from these Town of Avon, Colorado August 28, 2007 Page 3 fees. Generally, when our fees are able to be reimbursed from a third-party or paid from a financing transaction, we will charge our standard rates. For other matters when such recovery is not likely, we will discount our rates by 10%. We will always strive to use the most cost- effective means to accomplish the Town's objectives. If you have any questions about the fees being charged for your representation, please contact me. Attorney/ Legal Assistant Randy D. Funk Dee P. Wisor Samuel A. Evig Matthew O. Gray Hourly Effective Rate Date $350.00 December 17, 2006 $425.00 December 17, 2006 $205.00 December 17, 2006 $190.00 December 17, 2006 Public Contract for Services - Compliance with § 8-17.5-101 C.R.S. In connection with our engagement with the Town, Sherman & Howard L.L.C. qualifies as a "contractor" pursuant to § 8-17.5-101(2), C.R.S. and we hereby certify that, as of the date hereof: (i) we do not knowingly employ or contract with an illegal alien, and (ii) we have participated in the Basic Pilot Program (as defined in § 8-17.5-101(1), C.R.S.) in order to confirm the employment eligibility of all employees who are newly hired for employment in the United States. In compliance with Section § 8-17.5-102(2), C.R.S., the provisions set forth in Exhibit A to this engagement letter are incorporated herein and made a part hereof. We are pleased to have the Town as a client, and look forward to a mutually satisfactory and beneficial relationship. Our effectiveness and the Town's best interest are enhanced by an atmosphere of candor and confidence between us, not only as to the facts and circumstances of the legal issues on which we are working, but also as to the client-attorney relationship itself. We hope you will not hesitate to discuss with us any question or concern you might have about either. Sincerely, Randy D. Funk RDF/rh Enclosure Town of Avon, Colorado August 28, 2007 Page 4 Accepted and Approved: TOWN OF AVON By: Larry Brooks Its: Town Manager Date. Y ~ Exhibit A A. Sherman & Howard L.L.C. shall not: (I) knowingly employ or contract with an illegal alien to perform work described in this engagement letter under Scope of Employment (the "Legal Services") or (II) enter into a contract with a subcontractor that fails to certify to Sherman & Howard L.L.C. that the subcontractor shall not knowingly employ or contract with an illegal alien to perform the Legal Services. B. Sherman & Howard L.L.C.: (I) has confirmed or attempted to confirm the employment eligibility of all employees who are newly hired for employment in the United States through participation in the Basic Pilot Program; (II) shall not use Basic Pilot Program procedures to undertake preemployment screening of job applicants while performing Legal Services; (III) shall be required (only if Sherman & Howard L.L.C. obtains actual knowledge that a subcontractor performing Legal Services knowingly employs or contracts with an illegal alien): (a) to notify the subcontractor and the Town within three days that Sherman & Howard L.L.C. has actual knowledge that the subcontractor is employing or contracting with an illegal alien; and (b) terminate the subcontract with the subcontractor if within three days of receiving the notice required pursuant to subparagraph (a) of this subparagraph (III) the subcontractor does not stop employing or contracting with the illegal alien; except that Sherman & Howard L.L.C. shall not terminate the contract with the subcontractor if during such three days the subcontractor provides information to establish that the subcontractor has not knowingly employed or contracted with an illegal alien; and (IV) shall comply with any reasonable request by the Department of Labor and Employment made in the course of an investigation that such department is undertaking pursuant to § 8-17.5-102(5) C.R.S. BUS RE\1410160.1 6