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I Edward Everett March 27, 2003 Page 2 Once we have reconciled the interests of the stakeholders with our proposal, I intend that we work with both the local Fish and Wildlife Service representatives and their supervisors in Sacramento and Washington, DC to fashion a workable plan. I believe that we will know if we have a workable plan to succeed in 6 months from engagement. As we discussed, my engagement is limited to performance of services related to this matter. I will have primary responsibility for your representation and will utilize other firm lawyers and paralegals, as I believe appropriate in the circumstances. The principal factors in determining our fees will be the time and effort devoted to the matter and the hourly rates of the lawyers and paralegals involved. My current hourly rate is $300. I understand that in these economic times, you are wisely concerned about the cost of legal services. I expect to work closely with you and whomsoever you shall designate in addition to Terry Huffman of Huffman and Broadway. As a result of those economic concerns, we have agreed that my representation of the City is limited to legal fees chargeable to you in the amount of $30,000 plus expenses. In the event we have not completed performance on this project, as we approach those total hourly billings in that amount, I will issue a written statement of project progress to you. That document will detail the likelihood of ultimate success, the remaining tasks necessary to complete performance and suggest a project budget to complete performance of the project. No further work on the project by Perkins Coie LLP will continue until you have approved the budget in excess of the original budget amount. From time to time, Perkins Coie LLP may advance or incur certain costs and expenses with respect to your legal matters. These costs will be charged to you. Such charges include long- distance telephone charges, photocopying, computerized legal research, travel expenses, messenger services and other reasonable expenses. Although all such expenses are your responsibility and we assume no liability for payment, for administrative ease, Perkins Coie, acting on your behalf, will generally advance payment to providers if your account is current. Each month I will review the time recorded to your account before an invoice is sent to you at this same address. We try to bill all clients on a monthly basis. Statements are generally mailed by the last week of the month following the month in which the 109901- 97001DA030840.0351 Much 27, 2003