RETAINER AGREEMENT: CIVIL RIGHTS CASE

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1 I. Introduction RETAINER AGREEMENT: CIVIL RIGHTS CASE The undersigned, hereinafter referred to as the "Clients," hereby retains the KENNEDY LAW FIRM, hereinafter referred to as the "Attorneys," for the purpose of legal representation in the Client's case, brought under federal law, against, hereinafter referred to as the "case," on the terms set out below. Attorneys promise to do their utmost on behalf of Client and to utilize all ethical and legal procedures to advance Client's interest in this matter. Attorneys cannot and do not guarantee or promise to Client any specific outcome of this claim. II. The Client Will Be Responsible for the Expenses of Litigation The Client will be responsible for all expenses incurred in connection with the case, including charges for transcripts, witness fees, mileage, service of process, filing fees, long distance telephone calls, reproduction costs, and all other expenses and out-of-pocket disbursements regardless of the outcome of the case. In the event that Client is unable to pay these expenses prior to receipt of settlement or verdict in this matter, or in the event that Attorney has not been compensated for such expenses by the time of receipt of settlement or verdict in this matter, said expenses may be deducted from the proceeds of any recovery. Attorneys are given a lien on any monies recovered by Client to assure payment of their fees, expenses and tax herein. In the event that no money is recovered in connection with this claim, Attorneys shall receive nothing for their services. The Client shall remain liable for all costs and expenses advanced by Attorneys. III. The Scope of the Agreement is Limited This agreement covers services only through the entry of judgment by a court. After this point it shall not be necessary for the Attorneys to perform any further services for the Client in the absence of a new retainer agreement, but if such services are performed, with the Client's express or implied consent, the terms of this agreement shall continue in effect.

2 IV. The Attorney's Fee Where There is No Separate Payment of Attorney Fees In the event that there is recovered in the case a single sum of money, the Attorney's fees shall be the larger of: (A) A reasonable attorneys' fee, which shall be defined as the Attorneys fees computed at their regular hourly rate, at the time of recovery, recognizing that Attorneys current hourly rate is $ and will increase periodically in 2011 and thereafter to account for inflation and increased operating costs, or: (B) A standard contingent fee, which shall be defined as: (i) (ii) Thirty-Five (35%) of the recovery if it is recovered before any appeal is taken; Forty (40%) of the recovery if it is recovered after an appeal is taken. Any contingency fee shall be taken on the gross recovery to the Client before expenses are deducted from the proceeds of any such recovery. Any settlement offer of a fixed sum which includes a division between damages and attorneys' fees shall be treated by the Client and the Attorneys as an offer of a single sum of money and, if accepted, shall be treated as the recovery of a single sum of money to be apportioned between the Client and the Attorneys according to this section. Any division of such an offer, when made, into damages and attorneys' fees shall be completely disregarded by the Client and the Attorney. V. The Attorneys Fees Where There is a Separate Payment of Attorneys' Fees In the event there is recovered in the case, either by settlement or litigation, an award of damages or other monetary relief for the Client and a separate award of attorneys' fees, the Attorneys fee in the case shall be the larger of: (A) The separate award of attorneys' fees; or, (B) The separate award of attorneys' fees as supplemented according to this paragraph. If the separate award of attorneys' fee is less than a reasonable attorney's fee as defined in paragraph IV-A above, the Client shall be required to pay supplemental attorneys' fees equal to the difference between the fees recovered and the reasonable attorneys' fees as defined in paragraph IV-A above, but such a supplemental fee shall in no event exceed a fee as defined in paragraph IV-B above; or, (C) A standard contingent fee as defined in paragraph IV-B above, based on a total sum of the attorneys fee award lumped together with the damages awarded. 2

3 (D) In a case in which there are civil rights causes of action for which fees can be awarded and tort claims causes of action, for which no fees can be awarded, attorneys may take their fee (pursuant to the preceding three subsections of this agreement) and may take a standard contingent fee portion of any sum recovered for tort claims causes of action. VI. Gross Receipts Tax on Attorneys' Fees and Costs In addition to the above-described attorneys' fees and expenses, Attorneys shall be paid by Client gross receipts tax upon their fee and upon such costs as to which that tax applies. This tax shall be paid in an amount to be determined by the relevant law at the time of settlement or receipt of verdict in this case. VII. Explanation of Fee Concepts The Attorneys ordinarily bill their clients for their work at an hourly billing rate. The rates at which attorneys bill for their time vary from attorney to attorney depending upon such factors as experience and degree of specialization. These rates may also be increased from time to time to reflect changes in the above factors and inflation. These hourly billing rates are set at such levels that, assuming the Attorneys work full time and are compensated for all their services at their hourly rate, they will be able to pay their office expenses and pay fair salaries to themselves and their employees. Accordingly, the Attorneys continued practice and their livelihood depends upon being compensated at their hourly billing rate, for substantially all services rendered. It is mutually understood that this is a difficult and contested case with claims under the Civil Rights Act which may warrant the award of attorneys' fees by the Court should Client prevail. It is also understood that because of the difficult nature of assessing damages for constitutional torts and the significant chance that any recovery in terms of damages may only be for token amounts, if any, Attorneys agree to look first to the Court and defendants for payment of attorneys' fees as compensation for civil rights claims in this case as provided for by Section 1988 of the Civil Rights Act. A "contingent fee" arrangement, meaning an arrangement where the Attorneys compensation is contingent upon success in the case, has a number of disadvantages for the Attorneys. First, although the Attorneys attempt to exercise their best judgment in selecting cases to accept on contingent fee arrangements, the outcome of legal proceedings is always uncertain. A portion of these cases will be lost and generate no fee at all. Second, because a case, even if won, generates a fee only at its conclusion, it provides no income to help defray the Attorneys office expenses and salaries while it is being litigated. On the other hand, a contingent fee arrangement has distinct advantages for the Client, who is able to obtain the services of specialists in the civil rights field to litigate his or her cases. These services often would be far beyond the Client's means if he or she were required to pay for them on an ongoing basis like a fee-paying client. Also, because the Attorneys compensation 3

4 depends on victory in the case, the Client has an added assurance that the Attorneys will exert their best efforts on his or her behalf. Some civil rights laws provide for the separate recovery of "a reasonable attorneys' fee" in addition to damages, from the defendant. While there are general guidelines for the computations of reasonable attorneys' fees, there are no fixed rules by which the courts may compute an exact figure in any individual case. The amount of attorneys' fees to be awarded against any defendant is in the discretion of the trial judge, and is often less than the fees of the attorneys involved when computed at their regular hourly rates. Because the court may award an inadequate fee in such a case, the Client may be required to supplement such an award as set forth in paragraph V above, or the Attorneys may opt to include the fee in the total award and split that on a contingency basis with the Client. In cases brought under laws providing for attorneys' fees, defendants may make settlement offers which include a proposed division of the total amount offered into one amount for damages and one amount for attorneys' fees. If such an offer is made, and if the proposed division between damages and attorneys fees is respected by the Client and the Attorneys, it might create a financial conflict of interest between the Client and the Attorneys. For example, if a defendant offers a settlement package which includes a generous amount for damages but a small amount for attorneys' fees, it might be in the Client's interest to accept the offer but in the Attorneys interest to decline it. Conversely, it might be in the Attorneys interest to accept but in the Client's interest to decline an offer which provides for a generous attorneys' fee but only meager damages. Because of these potential conflicts, some courts have suggested that plaintiffs' attorneys attempt to settle or litigate the damages questions first, and only when these questions are resolved, to settle or litigate the amount of attorneys' fees to be paid by the defendant. Because of these court rulings, the Attorney will attempt to settle or litigate any damages questions in the case before settling or litigating the attorneys' fees issue. However, since these court rulings are not binding upon defendants, they may still make package settlement offers with specified components for attorneys' fees and damages. The only way that the Attorneys and the Client can be sure to avoid the type of conflict discussed above is to agree, prior to the commencement of representation, that any division of a settlement offer into attorneys fees and damages proposed by the defendant will be disregarded by the Attorneys and the Client, and that they will treat the total offer as one amount to be apportioned between the Client and the Attorneys according to previously agreed terms. In this case, these terms are set forth in paragraph IV above. By this agreement, the Client and the Attorneys agree to this procedure. VIII. Client Will Not Settle Without Attorneys Consent; Attorney Will Not Settle Without Client's Consent The Client will not compromise or settle the case without the written consent of the Attorneys. Nor will the Attorneys compromise or settle the case without the consent of the Client. In consideration of the Attorneys agreement to represent the Client in the case, the Client agrees not to accept any offer of settlement which does not include a monetary component sufficient to insure that the Attorneys receive a reasonable fee as defined in paragraph IV above. 4

5 IX. Termination of Attorney-Client Relationship Attorneys may terminate their portion of this Agreement and withdraw at any time upon giving reasonable notice in writing to Client. Client shall have the option to terminate this Agreement without particular cause by giving Attorneys written notice of termination. If the Client terminates, Attorneys shall be entitled to be paid for all hours actually worked prior to receipt of written notice of termination. This attorneys fee shall be paid as soon as possible by the Client but, in any circumstance, shall be paid prior to any payment of any fee to any other counsel or distribution of any proceeds to any person. Attorneys are given a lien by the Client against any monies recovered for this claim in order to insure such payment. X. Acknowledgment By their signatures below, the parties acknowledge that they have read this agreement and understand its contents, that it fairly, accurately, and completely describes the agreement made between them, and that there are no agreements or representations between them not set forth herein. This agreement supersedes any and all prior agreements between the parties. CLIENT DATE ATTORNEY DATE 5

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