CONTINGENT FEE CONTRACT FOR LEGAL SERVICES

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1 CONTINGENT FEE CONTRACT FOR LEGAL SERVICES STATE OF TEXAS COUNTY OF NUECES This is a contingent fee contract for legal service between Nueces County, Texas, a political subdivision of the State of Texas ["Client"] and Mikal C. Watts and the firm of Watts Guerra Craft LLP and Robert C. Hilliard and the firm of Hilliard Munoz Gonzales LLP ["Attorneys"]. 1. Scope of Engagement Client retains and employs Attorneys to sue for and recover all damages and compensation to which Client may be entitled, as well as to compromise and settle all claims and causes of action, against Mortgage Electronic Registration Systems, Inc., its affiliates, shareholders, and all persons or entities acting in concert with them, including but not limited to_rv'fi:_r~corp,_ir-j_~,stewart T_i_t!e ~uarany <::ompany, Stevvart ~itle Compa_ny_, ~a_nk of America, N.A., and Aspire Financial, Inc. d/b/a Texaslending.com, in activities related to the recording or non-recording of documents related to promissory notes and mortgage obligations and liens on real property located in Nueces County, Texas. Attorneys' services may include making a demand; preparing a complaint or petition; prosecuting a lawsuit; investigating claims; enforcing any judgment obtained, by levy, garnishment and other lawful judicial remedy; filing proof of claim in any bankruptcy proceeding; defending any judicial lien against avoidance motions under 11 U.S. C. 522(f), if a defense is warranted and economically practical in Attorneys' business judgment; and keeping Client informed about the progress and status of Client's claims and causes of action. 2. Attorneys' Fees the lesser of: In consideration of services to be rendered by Attorneys, Client agrees to pay Attorneys (a) (b) twenty-five percent (25%) of Client's recovery; or the average of the percentage of a recovery to be paid as attorney's fees in contingency fee contracts of the ten {10) most populous Texas counties being represented by Attorneys under contingency fee contracts for the same or similar claims and causes of action. If Attorneys are representing fewer than ten (10) Texas counties under contingency contracts for the same or similar claims and causes of action, the percentage of recovery to be paid as attorney's fees by Client shall equal the average of the percentage of recovery to be paid as attorney's fees in contingency contracts for all Texas counties represented by Attorneys in such claims and causes of action on a contingency fee basis. 1

2 ' ' Notwithstanding anything to the contrary herein, the percentage of recovery to be paid by Client as attorney's fees shall not exceed the lowest percentage of recovery to be paid as attorneys' fees by any other Texas county Attorneys may represent in similar claims. In the event this action is consolidated in any manner with any other action, such as a pending multi-district litigation case (MDL), whether state or federal, Attorneys agree that insofar as attorney's fees are determined by the Court, Attorneys shall be bound by any such judicial determination. Notwithstanding anything to the contrary herein, if the claim or cause of action is such that the fee allowed to an attorney is set by law or Order of the Court, the amount payable to the Attorneys shall be limited to the maximum so allowed by law or by Order of the Court. Attorneys shall be compensated for their services only if a recovery is actually obtained by Client. 3. Deduction of Expenses, and Calculation and Explanation of Contingency Attorneys agree to advance costs of court as well as the expenses of litigation determined by Attorneys to be reasonable and necessary. Client will only reimburse expenses actually incurred. Client agrees that it will only reimburse Attorneys for such expenses if the percentage of recovery to be paid as attorney's fees pursuant to the terms of this contract is nineteen percent (19%) or less. The percentage paid to Attorneys as attorney's fees will be calculated after expenses and costs are deducted from the amount of the recovery. At the conclusion of the matter, or at the conclusion of any claim forming a part of Client's claims and causes of action, Attorneys will provide Client with a statement clearly detailing the determination of attorney's fees, costs of court, reasonable and necessary expenses actually incurred, and the remittance to Client. 4. Lead Counsel and Referral of Case The parties to this contract expect that at all times, Mikal C. Watts and Robert C. Hilliard shall be co-lead counsel in any litigation brought pursuant hereto. Client agrees that Attorneys may refer this matter to another lawyer to prosecute the Client's causes of action, only with the Client's prior written consent, if the referral is in the Client's best interest. If the matter is referred, the Attorneys will continue to make reasonable efforts to assure adequacy of representation and to provide adequate client communication by monitoring the prosecution of the claims and causes of action throughout the representation, and ensuring that Client is informed of those matters that come to Attorneys' attention and that a reasonable lawyer would believe Client should be aware of based on Client's best interest. Client understands and agrees that Attorneys may associate additional legal counsel in connection with the handling of Client's claims and causes of action. Such decision to associate 2

3 additional counsel shall be at Attorneys' sole discretion, and all fees paid to such additional counsel shall be paid from fees earned pursuant to this contract. Client agrees that Attorneys are authorized to share their fee with additional legal counsel. The division of the Attorneys' fee is based upon joint responsibility for the representation of Client, and, if a recovery is made, attorney's fees shall be paid as followed: Watts Guerra Craft, LLP SO% Hilliard Munoz Gonzales, LLP 50% This fee-sharing agreement will not increase the total fees owed by Client and will not affect the net recovery to Client. If, for any reason, the law of the state where suit is filed or transferred prescribes restrictions on, or otherwise directs, the amounts that can be shared among attorneys, the above-stated fee-sharing arrangement may be modified accordingly, with written notice to Client. Attorneys agree that they will seek and secure the consent of Client prior to the association of any other counsel. Such notice shall be in compliance with Section 1.04{f) of the Texas Disciplinary Rules ofprotessional Conduct. Attorneys also agree to notify the Nueces County Attorney of any intention to associate any additional counsel. 5. Modification of the Engagement Neither Client nor Attorneys may unilaterally modify or amend this contract. If Attorneys determine that the scope of this contract needs to be modified or amended, Attorneys must notify Client and submit an amended proposal for written approval. No work will be done on a modified or amended engagement unless the modification or amendment has been approved by Client. 6. Permission to Withdraw If, after a preliminary investigation, Attorneys determine that Client's claims and causes of action should not be pursued further, Client agrees that Attorneys may withdraw from the representation of the Client by sending written notice of Attorneys' intention to withdraw. In such event, Client will not be obligated to pay any fees to Attorneys, but expenses will be reimbursed on the same terms as if the Attorneys had continued-i.e., if Client receives a recovery and pays 20% or more of such recovery as fees to successor counsel, Client shall owe no expenses to Attorneys or associated firms or attorneys. 7. Texas Law to Apply This agreement shall be construed in accordance with the laws of the State of Texas, and all obligations of the parties are performable in Nueces County, Texas. 3

4 8. Parties Bound This agreement is binding on and inures to the benefit of the parties and their respective officials, heirs, executors, administrators, legal representatives, successors, and assigns. 9. Legal Construction In case any one or more of the provisions contained in this agreement is held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability will not affect any other provision, and this agreement shall be construed as if such invalid, illegal, or unenforceable provision did not exist, or had never been contained herein. 10. Prior Agreements Superseded This contract constitutes the sole and only agreement of the parties and supersedes any prior Uf1d~!st~nd_ing_ or written or oral agre_em~_nt~b~twe~ll t_hep_a_rti~s_i_n~::o_f111~ctioq_ijvjtf1_ Client's claims and causes of action. Attorneys make no guarantee regarding the outcome of any claim or litigation, and any and all comments by Attorneys regarding potential outcomes are expressions of opinion only. 11. No Solicitation or Warranties By executing this agreement, Client affirms that this case was not solicited by Attorneys, and that the agreement is not being entered into as a result of inducement or promises of money. There can be no assurances, and Attorneys make no warranties, representations, or guarantees, about the outcome of Client's claims or the litigation, particular results from Attorneys' services, or services provided by others at Attorneys' request, as well as the response and timeliness of action by any governmental official, department, court of law, or mediator. Client acknowledges the risk that Client may win or lose at trial, and that any decision could be upheld, reversed or modified on appeal. Client understands that Attorneys do not represent Client in connection with negotiating the terms of this agreement. 12. Compliance with Applicable Law Attorneys are expected to assist Client in complying with all applicable laws and regulations. Attorneys agree to notify Client if Attorneys believe Client has violated an applicable law in the course of a matter so that Client may have a chance to cure the defect. 4

5 13. Attorneys are Not Tax Lawyers or Tax Advisors Attorneys agree to act as Client's lawyer in this matter but not in any other matter without an additional contract. Client agrees that Attorneys have no obligation to advise Client, and will not advise Client, about the taxability of money received from this claim or litigation, or about the deductibility of expenses paid by Client in connection with this matter. Client assumes the obligation of obtaining tax advice from other attorneys and tax professionals. 14. Litigation Practices and Settlement No appeal of any case may be taken without the written approval of Client. Except for formal discovery, no information or photocopies should be released from Client's files to any litigant or any third party without a subpoena. Opportunities for settlement or for alternative dispute resolution should be identified early in any litigation and given serious consideration. No settlement of any nature will be made for any of Client's claims or causes of action w_it_qq_ut the written a[jproval of Cli_~nt. 15. Waiver of Conflicts Conflicts of interest may only be waived in writing by Client. 16. Required Notice to Client The State Bar of Texas investigates and prosecutes professional misconduct committed by Texas attorneys. Although not every complaint against or dispute with a lawyer involves professional misconduct, the State Bar's Office of Chief Disciplinary Counsel will provide you with information about how to file a complaint. Please call toll-free for more information. 17. Communication with Client Notices to Client should be sent to: Han. Samuel L. Neal, Jr., Nueces County Judge, 901 Leopard, Room 303, Corpus Christi, TX 78401, and to: Laura Garza Jimenez, Nueces County Attorney, 901 Leopard, Rm. 207, Corpus Christi, TX The Nueces County Attorney shall be copied on written communication between Attorneys and adverse parties. Communication between Attorneys and Client, including the County Attorney, are subject to the attorney-client privilege and the attorney work product doctrine, and shall not be disclosed to any person without the express approval of Client_ Memoranda and opinions submitted to Client should contain conspicuous notice that the writing is a protected communication. 5

6 Requests for payment of attorney's fees and expenses pursuant to this contract should be sent to the Nueces County Attorney for review and approval. Attorneys acknowledge that any request for payment will be placed on the Commissioners Court agenda for payment and will be public record. Attorneys acknowledge that this agreement will be public record. 18. Effective Date This agreement shall te effective after it is signed by Client and Attorneys. Date, Jr., In His Cap Nueces County Judge Date ~> <::: ;: Hilliard Munoz Gonzales LLP FILEP FOR RECORP. APR 3 o

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