10-24-2013 URA Sherman & Howard AgreementSherman & Howard L.L.0
Dee P. Wisor
Direct Dial Number: (303) 299 -8228
E -mail: dwisor(aDshermanhoward.com
Avon Urban Renewal Authority
P. O. Box 975
Avon, Colorado 81620
Attention: Mr. Scott Wright
Assistant Town Manager
Dear Scott:
ATTORNEYS & COUNSELORS AI' LAW
633 SEVENTEEN "rl -I STREE.i, SUITE 3000
DENVER, COLORADO 80202
IT:LEPHONF. (303) 297 -2900
FAX. (303) 298 -0940
W W W.SHERIv1AN)IOWARD.COM
October 24, 2013
We are pleased to confirm our engagement as bond counsel to the Avon Urban
Renewal Authority (the "Authority ") in connection with the issuance of Tax Increment Revenue
Bonds (the "Bonds ") which will be purchased by Branch Banking & Trust Company ( "BB &T ").
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 bond counsel to
the Authority in connection with the Bonds.
Personnel
Dee Wisor will be principally responsible for the work performed by Sherman &
I toward L.L.C. on your behalf. 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 Authority.
Scope of Employment
As your bond counsel we are being engaged as a recognized expert whose
primary responsibility is to render an objective legal opinion with respect to the authorization of
securities like the Bonds. We will: examine applicable law; consult with the parties to the
transaction prior to the execution of the Bonds; prepare customary authorizing and operative
documents, which may include proceedings relating to the authorization and execution of the
Bonds and related documents and closing certificates; review a certified transcript of'
proceedings; and undertake such additional duties as we deem necessary to render the opinion.
Subject to the completion of proceedings to our satisfaction, we will render our opinion relating
to the validity of the Bonds, and the exclusion of the interest of the rentals paid under the Bonds
Sherman & Howard L.L.C.
Avon Urban Renewal Authority,
October 24. 2013
Page 2
(subject to certain limitations which may be expressed in the opinion) from gross income for
federal income tax purposes, and the exclusion of the interest of the rentals paid under the Bonds
for Colorado income tax purposes.
It is our understanding that this transaction will be a private placement of the
Bonds with the BB &T, and that no official statement or other disclosure document will be
prepared. Accordingly, we are not assuming or undertaking responsibility for assisting in the
preparation of any such official statement or other offering document to be used in connection
with the placement of the Bonds, nor are we responsible for advising the Authority on disclosure
issues or performing any investigation to determine the accuracy, completeness, or sufficiency of
statements made in connection with such placement.
In delivering our opinion, we will rely upon the certified proceedings and other
certifications of public officials and other persons furnished to us without undertaking to verify
the same by independent investigation. Our opinion will be addressed to the Authority and will
be executed and delivered by us in written form on the date the execution and delivery of the
Bonds (the "Closing "). The opinion will be based on facts and law existing as of their date.
Our services are limited to those contracted for explicitly herein; the Authority'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 &
Iloward L.L.C. in connection with any IRS audit or any litigation involving the Authority or the
Bonds, 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
financial advice about the structure of the Bonds financing) or advice on the investment of funds
related to the Bonds.
Representation of the Authority
In performing our services, the Authority will be our client and an attorney - client
relationship will exist between us. We will represent the interests of the Authority, rather than
the Commissioners of the Authority or employees of the Authority. We will work closely with
the Authority Attorney and will rely on the opinion of the Authority Attorney with regard to
specific matters, including pending litigation. We assume that other parties to the transaction
will retain such counsel as they deem necessary and appropriate to represent their interests in this
transaction.
Conflicts of Interest
As you are aware, our Public Finance Department specializes in all aspects of
public finance in Colorado, Nevada, New Mexico, Idaho and Wyoming and our firm represents
many political subdivisions, investment bankers /underwriters, financial institutions and other
companies and individuals. Before accepting any new business, the Colorado Rules of
Sherman & Howard L.L.C.
Avon Urban Renewal Authority,
October 24, 2013
Page 3
Professional Conduct (the "Rules ") require us to evaluate whether there exist any ethical
constraints to representing the Issuer in this matter. We note that BB &T has been our client in
past engagements unrelated to the Authority and that currently, we are representing BB &T in
connection with certain foreclosure proceedings in Arizona. Our past and current representations
of BB &T are not in any way connected to your proposed Bonds. It is also possible that during
the course of our engagement with you, we may be asked to represent BB &T in other, unrelated
mattere. Because the Authority will sell the Bonds to BB &T, the Authority's interests are
"adverse" to those of BB &T. 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, and both clients give
their consent. Please be advised that we have already received BB &T's consent to our
representation of governmental issuers as bond counsel in matters unrelated to our representation
of BB &T.
Factors Considered. We do not believe that our current or prospective
engagements, as counsel to BB &T, will materially limit or adversely affect our ability to
represent the Authority either: (i) because the potential for adversity is remote or minor and is
outweighed by the consideration that it is unlikely that any advice given to BB &T or prospective
clients in unrelated transactions would be relevant to our representation of the Authority in
connection with the Bonds, or (ii) because such matters are or will be sufficiently different from
this financing so as to make the representation not adverse to our representation of the Authority
in connection with the Bonds. In reviewing our current and potential future representation of the
BB &T, we have considered: whether we can represent each client with undivided loyalty:
whether we can protect the confidentiality of each client; the limited 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. In determining whether to consent to and waive this conflict
of interest, you should understand that your waiver includes your acknowledgement and
agreement: (i) that you are not entitled to information we will obtain during our representation
of BB &T or a financial institution acting as the Authority's financial advisor, underwriter or
trustee, and (ii) that we have no duty to provide such information to you or to use it in
representing you. We advise you to discuss with your general counsel the advantages and risks
involved in such simultaneous, adverse representations. Pursuant to such consultation and the
matters discussed herein, we will treat your execution of this letter as consent to our current
representation of BB &T. Your execution of this letter will also signify the Authority's consent
to our prospective representation of BB &T, consistent with the circumstances described above
while we are acting as bond counsel hereunder. If at any time a question should arise about an
adverse representation, please do not hesitate to contact us.
Sherman & Howard L.L.C.
Avon Urban Renewal Authority,
October 24, 2013
Page 4
Fee Arrangement
Based upon: (i) our current understanding of the terms, structure, size and
schedule of the financing, (ii) the duties we will undertake pursuant to this letter, (iii) the time we
anticipate devoting to the financing, and (iv) the responsibilities we will assume, we estimate that
our fee for this engagement will be $20,000. Such fee may vary: (i) if the principal amount of
the Bonds increases significantly, (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 Bonds is not executed and delivered at Closing
on or before January 1, 2014, 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.
Our fees are usually paid at Closing out of Bonds proceeds. We customarily do
not submit any statement until the Closing, unless there is a substantial delay in completing the
financing. We understand and agree that our contingent fees will be paid at Closing out of
proceeds. If the financing is not consummated, we understand and agree that we will not be
paid.
Termination of Engagement
The above fees contemplate compensation for usual and customary services as
bond counsel to the Authority, as described above. Upon delivery of the opinion and letter, our
responsibilities as bond counsel will terminate with respect to this financing, and our
representation of the Authority and the attorney- client relationship created by this engagement
letter will be concluded. Specifically, but without implied limitation, we do not undertake to
provide continuing advice to the Authority or to any other party to the transaction. Many post -
issuance events may affect the Bonds, the tax - exempt status of interest on the Bonds, or
liabilities of the parties to the transaction. Such subsequent events might include a change in the
project to be financed with Bonds proceeds, a failure by one of the parties to comply with its
contractual obligations (e.g., rebate requirements, continuing disclosure requirements), an IRS
audit, or a change in federal or state law. Should the Authority seek our advice 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.
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 which
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
Sherman & Howard L.L.C.
Avon Urban Renewal Authority,
October 24, 2013
Page 5
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 Bonds term. 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 a portion 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.
Approval
If the estimated fees and other foregoing terms of this engagement are acceptable
to you, please so indicate by returning the enclosed copy of this letter signed by the officer so
authorized, retaining the original for your files.
We appreciate this opportunity to serve as your bond counsel on this financing
and look forward to a mutually satisfactory and beneficial relationship.
SHERMAN & HOWARD L.L.C.
By: I V '
DPW:jw
Enclosures
Accepted and Approved:
AVON URBAN RENEWAL AUTHORITY
By:
Title:
Date:
PUBHN/1693129 i