Re:ABC Patent Litigation

John Smith

November __, 2007

Page 1

Ronald J. Brown
(612) 340-2879
FAX (612) 340-8856

November __, 2007

Attorney/Client Privileged
John Q. Smith, M.D.
Chief Executive Officer
XYZ Corporation
P.O. Box 444
Minneapolis, Minnesota 55402

Re:ABC Patent Litigation

Dear John:

This representation agreement (“Agreement”) sets out the basis on which Dorsey & Whitney LLP (“Dorsey”) shall provide legal services for XYZ Corporation (“XYZ”) relating to assertion of U.S. Patent No. 6,666,666(“the ‘666 Patent”) against anticipated defendant ABC Corporation (“Defendant”). The parties regard this Agreement as containing confidential and privileged attorney-client communications and intend to treat it as such.

Negotiable Agreement. The contingent fee and other terms set forth in this Agreement are not set by law, but rather are negotiable between XYZ and Dorsey.

Services. The parties contemplate that Dorsey shall provide representation in connection with assertion of the ‘666 Patent against Defendant until resolution of disputed issues is reached with the Defendant by trial or otherwise (“Resolution”). Assertion of the ‘666 Patent against Defendant, whether through pre-litigation negotiation, litigation, settlement, or otherwise, shall be referred to herein as “Enforcement.”

Recovery. “Recovery” as used in this Agreement means the total recovery through money and/or the value of any business accommodation (such as a cross-license to Defendant’s technology) received from the Defendant and/or other persons or entities related to the Enforcement, after subtraction for expenses and other charges paid by XYZ or advanced by Dorsey pursuant to item (1) under “Fees” below. Any amounts awarded against XYZ on Excluded Claims (as defined in section (3) under “Fees” below) shall not be subtracted from Recovery. “Recovery” includes, but is not limited to, any money received for the sale and/or license of some or all rights to the Defendant, and any amount awarded as compensatory damages, exemplary or punitive damages, attorney fees, expenses, interest, and/or costs.

Fees. Payment shall be made to Dorsey according to the following terms:

(1)XYZ shall pay 100% of out-of-pocket expenses, service charges, and expert witness charges incurred in connection with Enforcement.

(2)XYZ shall pay Dorsey a contingent fee as set forth below.

(a)33 1/3% of any Recovery in the event of Resolution within 60 days after an action is filed;

(b)40% of any Recovery in the event of Resolution more than 60 days after an action is filed but before the filing of a notice of appeal by either party;

(3)Enforcement may subject XYZ to cross-claims, counterclaims, or claims filed in another action. This Agreement covers only cross-claims or counterclaims that are asserted in an action filed by Dorsey on XYZ’ behalf to enforce the ‘666 Patent and that relate directly to the validity or enforceability of the ‘666 Patent or the issue of whether the ‘666 Patent has been infringed. Any other cross-claims, counterclaims or claims against XYZ are excluded (collectively “Excluded Claims”) In the event any Excluded Claims are filed against XYZ, Dorsey shall bill XYZ its normal hourly fees to defend XYZ against those Excluded Claims. My current hourly rate is $530. Our hourly rates are subject to adjustment from time to time.

Structured Settlement and Fees. Sometimes money is recovered for a client in the form of a “structured settlement” or payment of royalties. This means that the recovery is paid over a period of time, often with an initial “lump sum” paid upon settlement, or shortly after, followed by additional payments over time. If there is a structured settlement reached in this case at its conclusion, Dorsey’s fee would be based on the total amount of the settlement to be received by you. If an initial lump sum payment exceeds the fee owed Dorsey, our fee would be paid out of the initial lump sum payment. If the fee exceeds the initial lump sum, the lump sum would be applied toward the fee, and the balance of the fee would be paid from the periodic payments first received by XYZ.

Disbursements and Service Charges. This matter will require out-of-pocket expenses, such as court filing fees, costs for depositions and expert witnesses and photocopying, costs of obtaining file histories, phone or fax charges. XYZ agrees to pay directly any disbursement items, or Dorsey may in its discretion advance payment of such expenses, but XYZ agrees to repay Dorsey when billed for them. XYZ also agrees to pay Dorsey’s service charges for items such as photocopying, facsimiles and the like. These obligations to repay advances and to pay service charges apply regardless of outcome. XYZ will continue to be obligated to pay disbursements and service charges already incurred and to be incurred, and Dorsey retains the right to cease representation if such amounts are not paid by the client when due. If a Recovery occurs, then any unpaid disbursements, expenses, witness fees and the like shall be paid prior to any other distribution of the Recovery.

Client Cooperation. Your assurance to us that XYZ will cooperate fully in Enforcement and be reasonable and realistic in its pursuit of Recovery is a material inducement to Dorsey in undertaking this representation. More specifically,

(1)XYZ agrees to assist Dorsey in Enforcement, including, but not limited to, by providing documents, factual briefings, tutorials, consulting, testimony at deposition and trial, and preparation for testimony. The costs for such assistance shall be borne by XYZ and not deducted from Recovery in calculating Dorsey’s contingent fee.

(2)XYZ agrees to reasonable consideration of settlement opportunities and strategies as Enforcement progresses, weighing our evaluation of the likelihood of success against the value of the settlement opportunity or strategy. Moreover, in the event our positive assessment of the case changes so materially as the result of the discovery of adverse facts and/or change in the state of the law that we conclude the case is highly unlikely to succeed at trial, then XYZ agrees either to settle the case, if that is possible, dismiss the case, or, if Dorsey requests, cooperate in Dorsey’s withdrawal.

Termination. We intend and expect to complete our services to your satisfaction. However, we may withdraw if XYZ breaches this Agreement (for example, by failing to pay expenses or to cooperate in Enforcement), if XYZ refuses to follow Dorsey’s advice on a material matter, or for any other reason required or permitted by professional rules. XYZ may discharge Dorsey at any time by written notice. Upon any such withdrawal or discharge, XYZ shall promptly reimburse Dorsey for any costs and expenses advanced by Dorsey on XYZ’ behalf. Payment of fees in the event of withdrawal or discharge shall be as follows:

(1)In the event of withdrawal or discharge after a right to Recovery has been established (e.g., by winning a lawsuit, or negotiating a settlement or a license agreement), then XYZ shall pay Dorsey its contingent fee as provided in this Agreement when and as it receives the Recovery. For example, in the event of a withdrawal or discharge after a judgment is entered but before a notice of appeal has been filed, XYZ would pay Dorsey 40% of the Recovery for Dorsey’s services through the date of judgment.

(2)In the event Dorsey withdraws on account of XYZ’s breach of this Agreement or XYZ discharges Dorsey before a right to Recovery has been established, then, upon any subsequent Recovery by XYZ related to the subject of Dorsey’s engagement, XYZ shall pay Dorsey the reasonable value of its services, which, depending upon the circumstances, may be determined by a court or other tribunal to exceed the amount that would otherwise be due under this Agreement.

(3)If Dorsey withdraws for any reason other than XYZ’s breach of this Agreement before a right to Recovery has been established, then Dorsey shall be entitled to the reasonable value of its services if XYZ, a court or other tribunal determines that such recovery would be just and equitable.

Security Interest. To secure payment of all sums due to Dorsey under this Agreement for services rendered or expenses advanced, XYZ grants Dorsey a security interest in, and a lien on all claims, causes of action, and Recovery related to the subject matter of this engagement. This means that Dorsey’s fees and costs will be paid first out of any Recovery. XYZ agrees to sign any document reasonably necessary to give notice to third parties of the lien within five business days of XYZ’ receipt of such document, including, but not limited to, a financing statement or continuation statement under the Uniform Commercial Code. XYZ also agrees that Dorsey may file or record any such document, with or without XYZ’ signature, with any court or other public agency at Dorsey’s discretion.

Arbitration. Any dispute over Dorsey’s legal fees shall be submitted to arbitration under California Business and Professions Code Sections6200-6206, to be provided by and in accordance with the rules of the Palo Alto Area Bar Association.

Final Statement and Client File. When a Recovery is made on XYZ’ claim or when Dorsey’s services are complete with respect to any action it commences, Dorsey shall provide written statements stating the outcome and, if there is a Recovery, showing the amounts due Dorsey. At the conclusion of representation, Dorsey will release to XYZ, at XYZ’ request, all XYZ papers and property, including correspondence, pleadings, deposition transcripts, exhibits, physical evidence, expert reports, and other items reasonably necessary to XYZ’ representation. We reserve the right to keep copies for our own files of any client papers.

Very truly yours,

Ronald J. Brown

XYZ Corporation hereby agrees to have the law firm Dorsey & Whitney LLP represent XYZ Corporation in matters relating to the Defendant on the terms stated above.

Agreed to:

By:

John Q. Smith, M.D., CEO of XYZ Corporation