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WINSTEAD <br />Austin Dallas Fort Worth Houston San Antonio The Woodlands Washington, D.C. <br />401 Congress Avenue 512.370.2800 OFFICE <br />Suite 2100 512.370.2850 Fax <br />Austin, Texas 78701 winstead.com <br />July 23, 2008 <br />Mr. Rick Menchaca <br />City Manager <br />City of San Marcos <br />630 East Hopkins <br />San Marcos, Texas 78666 <br />direct dial: 512.370.2871 <br />j lcarter@winstead.com <br />Re: Engagement of Winstead PC ("Winstead") by the City of San Marcos ("San <br />Marcos"). <br />Dear Mr. Menchaca: <br />Thank you very much for contacting Winstead in connection with federal and state <br />legislative representation for the time period beginning January 1, 2008 thru December 31, 2008. <br />As a matter of company policy, it is required that Winstead provide you with this engagement <br />letter in order to set out the specific terms which will be applicable to the representation <br />including the terms set forth in this letter and the Standard Terms of Engagement for Services <br />("Standard Terms of Engagement") attached hereto (collectively, the "Engagement Letter"). <br />Specifically, the following terms and provisions will apply to this engagement: <br />Winstead will charge a total retainer fee of $20,000 a month beginning January 1, 2008 <br />thru December 31, 2008 for federal and state government relations; of which, $15,000 will be for <br />federal government relations representation and $5,000 will be for state governmental relations <br />representation. Notwithstanding the terms of this contract, the state portion of the retainer shall <br />commence July 1, 2008. <br />In addition to the fee for services rendered described above, pursuant to the attached <br />standard terms of engagement, you will also be responsible for Winstead's regular expense <br />charges in connection with the engagement, courier services and travel pre-approved by San <br />Marcos. Expenses for State legislative dinners and other entertainment will not exceed a total of <br />$500 for the year. This amount maybe exceeded with the approval of the City Manager. <br />Winstead will provide you a detailed statement for expenses as soon as possible <br />following the end of each calendar month until such time as the engagement is completed. We <br />will endeavor to deliver these statements to you on or about the 10th day of the month following <br />WINSTEAD PC ATTORNEYS <br />