Loading...
04-08-2009 URA Bond Counsel LtrSherman & Howard L.L.C. Dee P. Wisor Direct Dial Number: (303) 299 -8228 E -mail: dwisor @sah.com Licensed in Colorado Avon Urban Renewal Authority P. O. Box 975 Avon, Colorado 81620 Attention: Mr. Scott Wright Assistant Town Manager Dear Scott: ATTORNEYS & COUNSELORS AT LAW 633 SEVENTEENTH STREET; SUITE 3000 DENVER, COLORADO 80202 TELEPHONE: 303 297 -2900 FAX: 303 298 -0940 OFFICES IN: COLORADO SPRINGS STEAMBOAT SPRINGS - VAIL • PHOENIX RENO • LAS VEGAS • ST. LOUIS April 8, 2009 We are pleased to confirm our engagement as bond counsel to the Avon Urban Renewal Authority (the "Issuer ") in connection with a loan (the "Loan") pursuant to a Loan Agreement (the "Loan Agreement ") to be entered into between the Issuer and Vectra Bank ( "Vectra "). In connection with the Loan, Vectra will be represented by Kutak Rock LLP ( "Kutak "). We appreciate your confidence in us and will do our best to continue to merit it. This letter sets forth the role we propose to serve and the responsibilities we propose to assume as bond counsel to the Issuer in connection with the Loan. Personnel. Dee Wisor will be principally responsible for the work performed by Sherman & Howard L.L.C. on your behalf and he will be assisted by Kim Crawford. Where appropriate, certain tasks may be performed by other attorneys or paralegals. At all times, however, Dee Wisor will coordinate, review, and approve all work completed for the Issuer. Scope of Services. Bond counsel is engaged as a recognized expert whose primary responsibility is to render an objective legal opinion with respect to the authorization and issuance of bonds or other obligations like those evidenced by the Loan Agreement. As your bond counsel, we will: examine applicable law; consult with the parties to the Loan prior to the funding of the Loan; review customary authorizing and operative documents, including the Loan Agreement, which may include proceedings relating to: the authorization of the Loan, and closing certificates; review a certified transcript of proceedings; and undertake such additional duties as we deem necessary to render our opinions. As counsel to Vectra, Kutak will be preparing the Loan Agreement and related documents and we will review and comment on such documents prepared by Kutak. Subject to the completion of proceedings to our satisfaction, we will render our opinions relating to the validity and enforceability of the Loan Agreement against the Issuer, and the exclusion of the interest paid on the Loan (subject to certain limitations which Sherman & Howard L.L.C. Avon Urban Renewal Authority April 8, 2009 Page 2 may be expressed in the opinion) from gross income for federal income tax purposes and for Colorado income tax purposes. Our opinions will be addressed to the Issuer and will be executed and delivered by us in written form on the date the Loan is funded (the "Closing "). The opinions will be based on facts and law existing as of their date. Our services as bond counsel are limited to those contracted for explicitly herein; the Issuer's execution of this letter constitutes an acknowledgment of those limitations. Specifically, but without implied limitation, our responsibilities do not include any representation by Sherman & Howard L.L.C. in connection with any IRS audit or any litigation involving the Issuer or the Loan, or any other matter. Neither do we assume responsibility for the preparation of any collateral documents (e.g., environmental impact statements) which are to be filed with any state, federal or other regulatory agency. Nor do our services include financial advice (including advice about the structure of the Loan) or advice on the investment of funds related to the Loan. If such services are requested of us, we suggest that we discuss the nature and extent of those services and an estimate of our fee at the time of the request. Attorney - Client Relationship. In Issuer will be our client and an attorney- client represent the interests of the Issuer rather thaj members of the Board or the Issuer's employees. performing our services as bond counsel, the relationship will exist between us. We will i its Board of Commissioners the individual Notice of and Consent to Conflicts of Interest. Our firm currently represents Vectra in connection with various general commercial matters, commercial real estate and construction matters, and other public finance and swap matters unrelated to the Loan. Pursuant to the Colorado Rules of Professional Conduct (the "Rules "), it would be a conflict of interest for our firm to represent one client (the Issuer) directly adverse to another client ( Vectra) even if the matters are wholly unrelated and even if different lawyers do the work. However, the Rules permit a law firm to represent clients in such concurrent conflict situations if the firm reasonably believes it can provide competent and diligent representation to both clients, the representation is not prohibited by law, the representation does not involve the assertion of a claim by one client against the other in the same proceeding, and both clients give their informed consent. We believe that our representations of the Issuer in the Loan and of Vectra in pending and future unrelated matters would satisfy these conditions. We have considered a number of issues in assessing this conflict. Among those are whether we can effectively represent the Issuer on the current Loan despite the conflict and whether we can protect the confidentiality of both clients' information in their separate matters. We believe we can do so, and can fully and properly represent both clients. Accordingly, we are asking the Issuer to agree that it will waive and give its consent to the conflict of interest with respect to the firm's representation of Vectra on the matters discussed above as well as on Sherman & Howard L.L.C. Avon Urban Renewal Authority April 8, 2009 Page 3 possible future unrelated representations of Vectra. We note that we have obtained a comparable waiver and consent from Vectra. A request for consent to a conflict of interest implicates legal issues for you, including issues as to the nature and scope of the waiver and its potential significance for the Issuer. Our firm is not disinterested as to such issues, and therefore cannot advise you on them. We recommend that you consult with the Town Attorney, or seek the advice of other independent counsel, on this matter. We appreciate your consideration of these issues and are available to discuss any of these issues with you. Assuming you consent to the representation on the terms outlined here, we ask that you execute this letter to signify the Issuer's consent to the firm's current and possible future adverse representations of Vectra in matters unrelated to this Loan while we are serving as the Issuer's counsel in this Loan. Fee Arrangement. Based upon: (i) our current understanding of the terms, structure, size and schedule of the financing, (ii) the responsibilities we will undertake pursuant to this letter, (iii) the time we anticipate devoting to the financing, and (iv) the skill and experience required to complete the services properly, we estimate that our fee as bond counsel will be in the range of $30,000 to $40,000 Such fee may vary: (i) if the principal amount of the Loan actually issued differs significantly from the amount stated above, (ii) if material changes in the structure of the financing occur, or (iii) if unusual or unforeseen circumstances arise which require a significant increase in our time or our responsibilities. Specifically, if the Loan is not delivered at Closing on or before September 1, 2009, it will be necessary for us to repeat and update much of our work and a commensurate increase in our fees will result. If, at any time, we believe that circumstances require an adjustment of our original fee estimate, we will consult with you. In addition, this letter authorizes us to make disbursements on your behalf, which we estimate will not exceed $2,000. The Issuer agrees to reimburse us for such disbursements, including travel costs, photocopying, deliveries, filing fees, computer assisted research, and other necessary office expenses. We understand and agree that our contingent fees will be paid at Closing out of Loan proceeds. If the financing is not consummated, we understand and agree that we will not be paid. Compliance with Article XXVIII of the Colorado Constitution. If and only to the extent this letter constitutes a "sole source government contract" within the meaning of Article XXVIII of the Colorado Constitution ( "Article XXVIII"), then the provisions of Sections 15 through 17 of Article XXVIII ( "Amendment 54 ") are hereby incorporated into this letter and Sherman & Howard L.L.C. shall comply with the provisions of Amendment 54. In such a case, Sherman & Howard L.L.C. Avon Urban Renewal Authority April 8, 2009 Page 4 for purposes of this letter, Sherman & Howard L.L.C. shall constitute a "contract holder" for purposes of Amendment 54, as shall any additional persons, officers, directors or trustees related to Sherman & Howard L.L.C. who qualify as "contract holders" pursuant to the definition set forth in Article XXVIII. In addition, if and only to the extent this letter constitutes a "sole source government contract," the Sherman & Howard L.L.C. hereby certifies that it is not ineligible to hold any "sole source government contract" pursuant to Amendment 54 or any contract thereunder, and the Sherman & Howard L.L.C. hereby agrees to notify the Issuer immediately if, at any point during the term of this letter, the Sherman & Howard L.L.C. shall become ineligible to hold any "sole source government contract" pursuant to Amendment 54 or any contract thereunder. If any provision or provisions of Amendment 54 are held to be unconstitutional or otherwise invalid by a court of competent jurisdiction in a non - appealable action, have been repealed retroactively or otherwise do not apply to this letter, such provision or provisions shall no longer be incorporated into this letter and the parties hereto shall have no obligations under such provision or provisions. Document Retention. At or within a reasonable period after Closing, we will review the file to determine what materials should be retained as a record of our representation and those that are no longer needed. We will provide you with a copy of the customary transcript of documents after Closing and will return any original documents obtained from you (if a copy is not included in the transcript). We will retain for several years a copy of the transcript and such other materials as correspondence, final substantive work product, documents obtained from you, and documents obtained from third parties. We will not retain such materials as duplicates of the above - described material, or drafts and notes that do not appear needed any longer. Ordinarily the firm will keep the retained materials until seven years after the final maturity of the Loan. At the end of that time, unless you advise us in writing to the contrary, we will destroy the bulk of the file. If the file is especially voluminous, we may destroy all or portions of it earlier, as our storage facilities are limited. If you prefer other arrangements for retention or disposition of our files in this matter, please advise us in writing. Termination of Engagement. Upon delivery of our approving opinions, our responsibilities as bond counsel will terminate with respect to the Loan, and our representation of the Issuer and the attorney - client relationship created by this engagement letter will be concluded. Should the Issuer seek the advice of bond counsel on a post - closing matter or seek other, additional legal services, we would be happy to discuss the nature and extent of our separate engagement at that time. Approval. If the foregoing terms of this engagement are acceptable to you, please so indicate by returning the duplicate original of this letter signed by the officer so authorized, retaining the other original for your files. Sherman & Howard L.L.C. Avon Urban Renewal Authority April 8, 2009 Page 5 We are pleased to have the opportunity to serve as your bond counsel and look forward to a mutually satisfactory and beneficial relationship. If at any time you have questions concerning our work or our fees, we hope that you will contact us immediately. SHERMAN & HOWARD L.L.C. By: ..P� (mil/ ZC -� Accepted and Approved: AVON,URBAN RENEWAL AUTHORITY C, Its: C hcu( Date: L/ W Aj�. -, .0 DPW /jw r ,� Enclosures 983653.1