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15-0505_BEST BEST & KRIEGER_Agenda Report_B5'AN Successor Agency to the San Juan Capistrano Community Redevelopment Agency Agenda Re TO: Karen P. Brust, Executive Directo FROM: Tom Bokosky, Human Resources ager DATE: May 5, 2015 5/612015 SUBJECT: Consideration of Agreement for Legal Services with Best, Best & Krieger, LLP and Termination of Rutan & Tucker, LLP as City Attorney RECOMMENDATION: By motion, 1. Approve the Agreement for Legal Services with Best, Best & Krieger, LLP, and; 2. Terminate Rutan & Tucker, LLP as City Attorney, and, 3. Authorize the City Manager to negotiate a transitional agreement with Rutan & Tucker, LLP, EXECUTIVE SUMMARY: On April 21, 2015, the City Council approved the Agreement for Legal Services with Best, Best & Krieger, LLP, which will also provide legal services to the Successor Agency to the San Juan Capistrano Community Redevelopment Agency, which must approve the Agreement (Attachment 1). DISCUSSION/ANALYSIS: At the direction of the City Council, staff released a Request for Proposal for City Attorney Services on February 4, 2015. The City Council considered proposals from eighteen (18) law firms and selected Jeffrey Ballinger, with the law firm Best, Best & Krieger, LLP (BB&K), as City Attorney. BB&K will represent the City, the San Juan Capistrano Housing Authority, and the Successor Agency to the San Juan Capistrano Successor Agency May 5, 2015 Paae2of3 Community Redevelopment Agency for general and special legal services (including litigation) and lobbying services. The proposed Agreement for Legal Services will be effective May 1, 2015, for an annual flat fee of $420,000, per fiscal year, for all three entities. The monthly fee for May and June will be prorated at $35,000 per month. Legal work that falls outside of this arrangement is bond financing, reimbursable work and existing litigation regarding the San Juan Hills Golf Course and the San Juan Basin Authority and conflicts related to existing and previous clients. Specifically, BB&K has indicated it is General Counsel to the Santa Margarita Water District and special counsel would be required if the need arose. Reimbursable work is legal services funded by a third party, such as a developer or the City's insurance provider. The proposed Agreement for Legal Services with BB&K will be effective May 1, 2015 and replaces the current agreement with Rutan & Tucker, LLP. The agreement will remain in effect until terminated by either party upon a thirty (30) days' advance written notice. FISCAL IMPACT: The proposed Agreement for Legal Services with BB&K will cap the annual legal fees at $70,000 for May 2015 and June 2015 and $420,000 for Fiscal Year 2015-2016. The legal costs specific to Successor Agency matters will be charged accordingly. The Successor Agency Adopted Fiscal Year 2014-2015 and 2015-2016 Budgets include $250,000 annually for the Administrative Cost Allowance, which is sufficient to cover anticipated legal costs. ENVIRONMENTAL IMPACT: Not applicable. PRIOR CITY COUNCIL REVIEW: • On April 21, 2015, the City Council approved the Agreement for Legal Services with Best, Best & Krieger, LLP, COMM ISSION/COMM ITTEEIBOARD REVIEW AND RECOMMENDATIONS: Not applicable. Successor Agency May 5, 2015 Pa e3of3 NOTIFICATION: Best, Best & Krieger, LLP ATTACHMENTS): Attachment 1 --- Agreement for Legal Services AGREEMENT FOR LEGAL SERVICES BETWEEN CITY OF SAN JUAN CAPISTRANO, SAN JUAN CAPISTRANO HOUSING AUTHORITY, AND SUCCESSOR AGENCY TO THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY AND BEST BEST & KRIEGER LLP 1. PARTIES AND DATE. This Agreement is made and entered into as of the 21st day of April, 2015, by and between the CITY OF SAN JUAN CAPISTRANO ("City"), the SAN JUAN CAPISTRANO HOUSING AUTHORITY ("Housing Authority"), the SUCCESSOR AGENCY TO THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY ("Successor Agency") (collectively, "Client") and BEST BEST & KRIEGER LLP, a limited liability partnership engaged in the practice of law ("BB&K" ). 2. RECITALS. 2.1 Client wishes to engage the services of BB&K as its legal counsel to perforin all necessary legal services for the Client on the terms set forth below. 2.2 For purposes of this Agreement, as appropriate, the term "Client" shall include the City, the community's Successor Agency, Housing Authority, and any other affiliated entities, the term "City Attorney" shall include "Legal Counsel" to the Successor Agency, Housing Authority, and any other affiliated entities, and the term "City Council" shall include the governing boards of the Successor Agency, Housing Authority, and any other affiliated entities. 3. TERMS. 3.1 Term. The term of this Agreement shall commence on May 1, 2015 and shall continue in full force and effect until terminated in accordance with Section 3.12. 3.2 Scope of Services. BB&K shall serve as City Attorney and shall perform legal services ("Services") as may be required from time to time by the Client as set forth by this Agreement, including those legal services set forth in Exhibit "A", attached hereto and incorporated by reference herein, unless otherwise agreed to by the Client and BB&K. 3.3 Designated City Attorney. Jeffrey S. Ballinger shall be designated as City Attorney and shall attend all City Council meetings (unless excused), and shall be responsible for the performance of all Services under this Agreement, including the supervision of Services performed by other members of BB&K. Elizabeth Hull shall be designated as Assistant City Attorney, and shall attend such meetings as may be requested by the City Attorney. No change in these assignments shall be made without the consent of the Client. 09959.0000019714188.2 ATTACHMENT I 3.4 Time of Performance. The Services of BB&K shall be performed expeditiously in the time frames and as directed by the Client. 3.5 Assistance. The Client agrees to provide all information and documents necessary for the attorneys at BB&K to perform their obligations under this Agreement. 3.6 Independent Contractor. BB&K shall perforin all legal services required under this Agreement as an independent contractor of the Client and shall remain, at all times as to the Client, a wholly independent contractor with only such obligations as are required under this Agreement. Neither the Client, nor any of its employees, shall have any control over the manner, mode or means by which BB&K, its agents or employees, render the legal services required under this Agreement, except as otherwise set forth. The Client shall have no voice in the selection, discharge, supervision or control of BB&K's employees, representatives or agents, or in fixing their number, compensation, or hours of service. 3.7 Fees and Costs. BB&K shall render and bill for legal services in the following categories and at rates set forth in Exhibit "B" and in accordance with the BB&K Billing Policies also set forth in Exhibit "B", attached hereto and incorporated herein by reference. In addition, the Client shall reimburse BB&K for reasonable and necessary expenses incurred by it in the performance of the Services under this Agreement. Authorized reimbursable expenses shall include, but are not limited to, printing and copying expenses, mileage expenses at the rate allowed by the Internal Revenue Service, toll road expenses, long distance telephone and facsimile tolls, computerized research time (e.g. Lexis or Westlaw), research services performed by BB&K's library staff, extraordinary mail or delivery costs (e.g. courier, overnight and express delivery), court fees and similar costs relating to the Services that are generally chargeable to a client. However, no separate charge shall be made by BB&K for secretarial or word processing services. 3.8 Billing. BB&K shall submit monthly to the Client a detailed statement of account for Services. The Client shall review BB&K's monthly statements and pay BB&K for Services rendered and costs incurred, as provided for in this Agreement, on a monthly basis. 3.9 Annual Reviews. The Client and BB&K agree that a review of performance and the compensation amounts referenced in this Agreement should occur at least annually. 3.10 Insurance. BB&K carries errors and omissions insurance with Lloyd's of London. After a standard deductible, this insurance provides coverage beyond what is required by the State of California. A separate schedule containing BB&K's insurance policies will be available for inspection upon Client's request. 3.11 Attorney -Client Privilege. Confidential communication between the Client and BB&K shall be covered by the attorney-client privilege. As used in this article, "confidential communication" means information transmitted between the Client and BB&K in the course of the relationship covered by this Agreement and in confidence by a means that, so far as the Client is aware, discloses the information to no third persons other than those who are present to further the interests of the Client in the consultation or those to whom disclosure is reasonably 09959, 00000\9714188.2 2 necessary for the transmission of the information or the accomplishment of the purpose for which BB&K is consulted, and includes any legal opinion formed and advice given by BB&K in the course of this relationship. 3.12 Termination. of Agreement and Legal Services. This Agreement and the Services rendered under it may be terminated at any time upon thirty (30) days' prior written notice from either party, with or without cause. In the event of such termination, BB&K shall be paid for all Services authorized by the Client and performed up through and including the effective date of termination. BB&K shall also be reimbursed for all costs associated with transitioning any files or other data or documents to a new law firm or returning them to the Client. In the event this Agreement is terminated, by either party, BB&K agrees that it shall not assume representation of any client in a matter that is adverse to the City, Housing Authority or Successor Agency, for a period of twelve (12) months following the effective date of such termination.. 3.13 Entire Agreement. This Agreement contains the entire Agreement of the parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements. 3.14 Governing Law. This Agreement shall be governed by the laws of the State of California. Venue shall be in Orange County. 3.15 Amendment; Modification. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing and signed by both parties. 3.16 Waiver. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a party shall give the other party any contractual rights by custom., estoppel, or otherwise. 3.17 Invalidity; Severability. if any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect. 3.18 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original. 3.19 Delivery of Notices. All notices permitted or required under this Agreement notices shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose: 09959.00000\9714188.2 3 Client: City of San Juan Capistrano BB&K: Best Best & Krieger LLP 32400 Paseo Adelanto 655 West Broadway, 15th Floor San Juan Capistrano, CA 92675 San Diego, CA 92101 Attention: City Manager Attention: Jeffrey S. Ballinger 3.20 Indemnification. (A) BB&K agrees to indemnify Client, its officers, employees and agents against, and will hold and save each of them harmless from, any and all actions, suits, claims, damages to persons or property, losses, costs, penalties, obligations, errors, omissions or liabilities (herein "claims or liabilities") that may be asserted or claimed by any person, firm or entity arising out of or in connection with the work, operations or activities of BB&K, its agents, employees, subcontractors, or invitees, provided for herein or arising from the acts or omissions of BB&K hereunder, or arising from BB&K�s performance of or failure to perform any term, provision, covenant or condition of this Agreement, except to the extent such claims or liabilities arise from the negligence or willful misconduct of Client, its officers, agents or employees. (B) Client acknowledges BB&K is being appointed as City Attorney pursuant to the authority of Government Code Section 36505, and has the authority of that office. Accordingly, the Client is responsible pursuant to Government Code Section 825 for providing a defense for the City Attorney for actions within the scope of its engagement hereunder. Therefore, Client agrees to undertake its statutory duty and indemnify BB&K, its officers, employees and agents against and will hold and save each of them harmless from, any and all claims or liabilities that may be asserted or claims by any person, firm or entity arising out of or in connection with the work, operations or activities of BB&K within the course and scope of its performance hereunder, but nothing herein shall require Client to indemnify BB&K for liability arising from its own negligence or alleged negligence. In connection herewith: (i) Client will promptly provide a defense and pay any judgment rendered against the Client, its officers, agency or employees for any such claims or liabilities arising out of or in connection with such work, operations or activities of Client hereunder; and (ii) In the event BB&K, its officers, agents or employees is made a party to any action. or proceeding filed or prosecuted against Client for such damages or other claims solely arising out of or in connection with the work operation or activities of Client hereunder, Client agrees to pay to BB&K, its officers, agents or employees any and all costs and expenses incurred by attorney, its officers, agents or employees in such action or proceeding, including, but not limited to, legal costs and attorneys' fees. IN WITNESS WHEREOF, the Client and BB&K have executed this Agreement for Legal Services as of the date first written above. (signatures contained on following page) 09959,0000019714188.2 4 AGREEMENT FOR LEGAL SERVICES BETWEEN CITY OF SAN JUAN CAPISTRANO, SAN JUAN CAPISTRANO HOUSING AUTHORITY, AND SUCCESSOR AGENCY TO THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY AND BEST BEST & KRIEGER LLP CITY OF SAN JUAN CAPISTRANO BEST BEST & KRIEGER LLP Derek Reeve, Mayor Jeffrey S. Ballinger, Partner Date: Date: Attest: Maria Morris, City Clerk SAN JUAN CAPISTRANO HOUSING AUTHORITY Kerry K. Ferguson, Chair Date: Attest: Maria Morris, Board Secretary SUCCESSOR AGENCY TO THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY Kerry K. Ferguson, Chair Date: Attest: Maria Morris, Board Secretary 09959.0000019714188.2 5 EXHIBIT "A" TO AGREEMENT FOR LEGAL SERVICES BETWEEN CITY OF SAN JUAN CAPISTRANO, SAN JUAN CAPISTRANO HOUSING AUTHORITY, AND SUCCESSOR AGENCY TO THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY AND BEST BEST & KRIEGER LLP "SERVICES" General Counsel services include the following: • Advise the City Council, City Boards and Commissions, and all City officials on legal matters pertaining to municipal government, including the Brown Act and parliamentary procedures for running meetings. • Attend all City Council meetings (unless excused) and other meetings as requested. • Coordinate and manage the services and costs of all outside legal counsel within budgetary limits as approved by the City Council. • On a monthly basis, provide a written status report of assigned projects, requests, and litigation in order to keep the City Council informed of important legal issues and to facilitate the City Council's periodic evaluation of the City Attorney. • Provide legal advice to staff upon request of the City Manager. • Prepare and/or review all ordinances, resolutions, municipal contracts, joint powers agreements, and other agreements and contracts entered into by the City. • Research and submit legal opinions on municipal or other legal matters as requested by the City Council or City Manager. • Alert the City in a timely manner on new State or Federal legislation or judicial decisions that may impact the City and propose appropriate action(s) to assure compliance. • Provide legal work pertaining to land use issues including but not limited to property acquisitions, property disposals, public improvements, easements, dedications and right-of-way vacations. • Enforce City codes, zoning regulations, and building standards through administrative and judicial actions. 09959, 00000`,9714188.2 Exhibit A • Attend staff meetings at the request of the City Manager (currently held weekly). • Provide designated office hours or times of availability at City Hall as requested by the City. • Communicate with the press, when authorized to do so, regarding City legal matters. • Promptly response to calls, c -mails, and correspondence from the City Council and staff. • Review current documents, policies, and forms to ensure compliance to current laws. Special Counsel services include the following: • Litigation and formal administrative or other adjudicatory hearing matters • Prosecutorial enforcement of codes and ordinances • Labor relations and employment matters, which include providing guidance on personnel matters, including policy and procedures affecting employees • Non -routine real estate matters • Land acquisition and disposal matters • Successor Agency and housing matters • Taxes, fees and charges matters • Public works and public construction disputes • Non -routine contract negotiation matters • Non -routine land use and development matters • Environmental matters, which include assisting in the preparation of Environmental Impact Reports and compliance with the California Environmental Quality Act (CEQA) • Toxic substances matters • Nater law matters • Telecommunications • Bond and public finance matters 09959.00000\9714188.2 Exhibit A i Tax and ERISA related matters ® Complex public utility matters Advocacy matters (e.g. legislative and regulatory), including state and federal lobbying 09959.00OW9714188.2 Exhibit A EXHIBIT "B" TO AGREEMENT FOR LEGAL SERVICES BETWEEN CITY OF SAN JUAN CAPISTRANO, SAN JUAN CAPISTRANO HOUSING AUTHORITY, AND SUCCESSOR AGENCY TO THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY AND BEST BEST & KRIEGER LLP ANNUAL FLAT FEE AMOUNT BB&K shall provide all general and special counsel legal services to the Client for an annual flat fee of Four Hundred Twenty Thousand Dollars ($420,000), billed on a monthly basis ($35,000/month). The only legal services that will be billed for separately from this flat fee are public finance/bond work and third party reimbursable work, which shall be billed as set forth below. The Client and BB&K shall monitor the legal services provided under this Agreement, and the parties shall consider adjustments to the annual amount, similar to other Client departments, on an annual basis, during the Client's normal budget cycle. THIRD PARTY REIMBURSABLE BILLING RATES 1. Third Party Reimbursable Legal Services - Description. Third Party Reimbursable Legal Services shall include legal services provided to the Client for which the Client receives reimbursement from a developer or other third party. These reimbursable legal services typically include review of CC&Rs; establishment of financing districts (i.e., Community Facilities Districts; Assessment Districts; Landscape and Lighting Maintenance Districts); and land use/environmental projects for which the Client receives reimbursement. Whenever a new matter arises that may qualify as a Third Party Reimbursable Legal Service, BB&K and Client shall discuss such possibility and Client shall use its best efforts to collect a deposit from the third party in such amount as will be sufficient to cover the anticipated legal fees. Such deposit shall be provided to the Client prior to BB&K incurring fees for Third Party Reimbursable Legal Services. 2. Third Party Reimbursable Legal Services - Rates. The Client shall pay for Third Party Reimbursable Legal Services at BB&K's then current published standard private client rates,. Upon execution of this Agreement, BB&K shall provide a copy of its published rate schedule to the Client. BB&K shall also provide annual written updates to the Client when changes are made to the published rate schedule. 0995 9.000(10197 1 4 1 8 8 2 Exhibit B 120nare1LN",mramy. :Ti7►i1761314a1►COBk".�I 1. Public Finance Legal Services — Description & Rates. The Client shall pay for Public Finance Legal Services at the rates set forth for Public Finance Legal Services, below. For bond counsel and certificates of participation special counsel services in connection with the financing of public facilities, BB&K shall be compensated, depending upon the type of bonds, certificates of participation or other obligations that are to be issued, based on the following schedules. Unless otherwise mutually agreed, our fees as bond counsel on these financings will be payable from proceeds of each series of the bonds upon their issuance. A. Certificates of Participation and Revenue Bonds. For services in connection with the issuance and sale of certificates of participation and revenue bonds, BB&K shall. be paid a fee, which will be the greater of (i) $35,000 or (ii) an amount based on the total principal amount of the certificates of participation or bonds to be sold, computed as follows: .50% of the first $10 million of the amount of the certificates or bonds issued, plus .25% of the next $10 million of the amount thereof, plus 125% of the amount thereof, if any, over $20 million. Notwithstanding the foregoing, in those cases where the fees are reimbursable by a third party, at BB&K's option it may proceed on a hourly basis and utilize the Third Party Reimbursable Legal Services category provided for in this Agreement. B. Community Facilities Districts. For services in connection with the issuance and sale of bonds of community facilities districts, BB&K shall be paid a fee, which will be the greater of (i) $35,000 or (ii) an amount based on the total principal amount of the bonds to be sold, computed as follows: .50% of the first $10 million of the amount of the bonds issued, plus .25% of the next $10 million of the amount thereof, plus .125% of the amount thereof, if any, over $20 million. Notwithstanding the foregoing, in those cases where the fees are reimbursable by a third party, at BB&K's option it may proceed on a hourly basis and utilize the Third Party Reimbursable Legal Services category provided for in this Agreement with respect to services rendered for the formation of or annexation to a CFD, as well as the negotiation and preparation of funding agreements and joint financing agreements. Hourly compensation shall be payable solely from deposits of third parties and bond counsel fees shall be payable solely from the proceeds of the sale of bonds. 09959.00000\9714188.2 Exhibit B C. Assessment Districts. For services in connection with the issuance and sale of bonds of assessment districts, BB&K shall be paid a fee, which will be the greater of (i) $35,000 or (ii) an amount based on the total principal amount of the bonds to be sold, computed as follows: 50% of the first $6 million of the amount of the bonds issued, plus .25% of the next $10 million of the amount thereof, plus 125% of the amount thereof, if any, over $16 million. Notwithstanding the foregoing, in those cases where the fees are reimbursable by a third party, at BB&K`s option it may proceed on a hourly basis and utilize the Third Party Reimbursable Legal Services category provided for in this Agreement with respect to services rendered for the formation of or annexation to an AD, as well as the negotiation and preparation of funding agreements and joint financing agreements. Hourly compensation shall be payable solely from deposits of third parties and bond counsel fees shall be payable solely from the proceeds of the sale of bonds. D. Tax Allocation Bonds. For services in connection with the issuance and sale of tax allocation bonds. BB&K shall be paid a fee, which will be the greater of (i) $35,000, or (ii) an amount based on the total principal amount of the bonds to be sold, computed as follows: .50% of the first $6 million of the amount of bonds issued, plus .25% of the next $4 million of the amount of bonds issued, plus .20% of the next $5 million of the amount of bonds issued, plus .15% of the next $5 million of the amount of bonds issued, plus 125% of the amount thereof, if any, over $20 million. Notwithstanding the foregoing, in those cases where the fees are reimbursable by a third party, at BB&K`s option it may proceed on an hourly basis and utilize the Third Party Reimbursable Legal Services category provided for in this Agreement. E. Investment and Other Agreements. For investment agreements, derivative transactions or interest rate swaps relating to any bond issue, a separate fee will be charged depending on the type of derivative. Generally, our fee for a derivative transaction mirrors our bond counsel fee. Review of investment agreements will be included in the annual flat fee amount set forth above. F. Issuer's Counsel Opinions. For all Issuer's Counsel opinions provided by BB&K in connection with any bond financing, fees shall be the following: (1) for opinions on financings for which BB&K does not provide bond counsel and disclosure counsel services, $10,000; (2) 09959.0000019714188 , 2 Exhibit B for opinions on financings for which BB&K provides bond counsel services only, $5,000; (3) for opinions on financings for which BB&K provides disclosure counsel services only, $2,500; and (4) for opinions on financings for which BB&K provides both bond and disclosure counsel services, there will be no charge. G. Disclosure Counsel Services. For disclosure counsel services, fees shall be charged at one half of the amounts set forth in paragraphs A through D, above. ADDITIONAL BB&K BILLING POLICIES Our century of experience has shown that the attorney-client relationship works best when there is mutual understanding about fees, expenses, billing and payment terms. Therefore, this statement is intended to explain our billing policies and procedures. Clients are encouraged to discuss with us .any questions they have about these policies and procedures. Clients may direct specific questions about a bill to the attorney with whom the client works or our Accounting Department. Any specific billing arrangements different from those set forth below will be confirmed in a separate written agreement between the client and the firm. Fees for Professional Services Unless a flat fee is set forth in our engagement agreement with a client, our fees for the legal work we will undertake will be based in substantial part on time spent by personnel in our office on that client's behalf. In special circumstances which will be discussed with the client and agreed upon in writing, fees will be based upon the novelty or difficulty of the matter, or the time or other special limitations imposed by the client. Fees For Other Services, Costs and Expenses We attempt to serve all our clients with the most effective support systems available. Therefore, in addition to fees for professional legal services, we also charge separately for some other services and expenses to the extent of their use by individual clients. These charges include but are not limited to, mileage at the current IRS approved rate per mile, extraordinary telephone and document delivery charges, copying charges, computerized research, court filing fees and other court -related expenditures including court reporter and transcription fees. No separate charge is made for secretarial or word processing services; those costs are included within the above hourly rates. We may need to advance costs and incur expenses on your behalf on an ongoing basis. These items are separate and apart from attorneys' fees and, as they are out-of-pocket charges, we need to have sufficient funds on hand from you to pay there when due. We will advise the client from time to time when we expect items of significant cost to be incurred, and it is required that the client send us advances to cover those costs before they are due. Monthly Invoices and Payment Best Best & Krieger LLP provides our clients with monthly invoices. Invoices are due 09959,0000019714188.2 Exhibit B and payable upon receipt. Processing of some expenses is delayed until the next month and billed thereafter. Our fees are not contingent upon any aspect of the matter and are due upon receipt. All billings are due and payable within ten days of presentation unless the full amount is covered by the balance of an advance held in our trust account. If a bill is not paid within 45 days from the date of receipt, a late charge of one percent per month on the unpaid invoice shall be added to the balance owed, commencing with the next statement and continuing until paid. It is our policy to treat every question about a bill promptly and fairly. It is also our policy that if a client does not pay an invoice within 60 days of receipt, we assume the client is, for whatever reason, refusing to pay. We will then advise the client by letter that the client may pay the invoice within 14 days or the firm will take appropriate steps to withdraw as attorney of record. If the delay is caused by a problem in the invoice, we must rely upon the client to raise that with us during the 14 -day period. This same policy applies to fee arrangements which require the client to replenish fee deposits or make deposits for anticipated costs. From time to time clients have questions about the format of the bill or description of work performed. If you have any such questions, please ask there when you receive the bill so we may address them on a current basis. BEST BEST & KRIEGER LLP €19959.00000197 1 4 1 88.2 Exhibit B