HARDER ABRAMS 1801 AVENUE OF THE STARS, SUITE 1120 LOS ANGELES, CALIFORNIA 90067 424.203.1600 - 7, 2013 Re: Regresentation We are pleased to send you ihis correspondence which shall constituie ihe agreement (the "Agreement"') between you ("Chem") and HARDER ABRAMS LLP ("Anomeys'") setting fonh our mutual righis and obligations in connection wiih the duties and services i0 be provided to you by Aitorneys. ll Conditions. This Agreemem will not iake effect, and Aitorneys will have no obligaiion to provide legal services, and Atiorneys will nor be auihorized to take any action on Client's behalf, unless and until the Agreement is fully executed by the parties. 2 Scope of Services. Client is hiring Atiorneys to represeni Clieni in the matter of Clients claims relating to Gawker Media and its relaied entities and individuals (collectively, "Gav. including without limitation, a whistlebolower proceeding before rhe lniernal Revenue Services and any other governmental iaxmg or other agencies, and a possible lawsuit or class aciion lawsuii against Gawker Media regarding employment law matiers including failure io pay wages, and related matiers (Collectively, the "Mntter") Aitorneys will represeni Client until a resolution of the Maiter is reached which could include seitlement, judgment by way of trial or mbitraiionr and/or resolution of the ins proceeding or Client elects not to proceed further and so noiiries Attorneys Atiorneys will undertake all reasonable and appropriate litigaiion measures through resolution of the Matter, unless it becomes tinancially unfeasible or impracticable for Aitorneys to do so, in which case Attorneys will so notify Client and allow client a reasonable period ofiime io find substituie counsel. 3 of the Parties. Attorneys will provide those legal services reasonably required io represent Client in prosecuting the claims described in Paragraph 2 and will take reasonable steps io keep Client informed of progress and developments, and to respond February 7, 2013 Representation Agreement Page 2 promptly to inquiries and communications. Client agrees to be truthful with Attorneys, to cooperate, to keep Attorneys informed of any information and developments which may come to Client’s attention relating to the Matter, to abide by this Agreement, to pay legal fees and costs pursuant to this Agreement, and to keep Attorneys advised of the contact information for Client and/or his designated representatives, including addresses, telephone numbers and whereabouts. Client agrees to appear at all legal proceedings when Attorneys and Client’s other legal advisors deem it necessary, and generally to cooperate fully with Attorneys in all matters related to the preparation and presentation of Client’s claims. 4. Legal Fees. Attorneys only will be compensated for legal services rendered if a recovery is obtained for Client. The fee to be paid to Attorneys will be a percentage of the “recovery.” The term “recovery” means: the total of all amounts of money or other benefits (for example, in-kind contribution of products or services or a donation to Client’s charity, etc.) received by settlement, judgment or arbitration award, payment by the IRS, or other form of payment or compensation to Client, including the reasonable value of any non-monetary proceeds. Client agrees to pay Attorneys as compensation for services rendered in connection with said representation one third (33-1/3%) of the recovery. In the event of Attorneys’ discharge or withdrawal as provided in Section 11, below, prior to recovery by way of settlement or judgment, Client agrees that, upon payment of a recovery in Client’s favor in the Matter, Attorneys shall be entitled to be paid by Client, out of the recovery, a reasonable fee for Attorneys’ representation, taking into consideration the hours that Attorneys (and their paralegals and clerks) actually worked on the Matter, according to the hourly rates set forth below which are reasonable for the specialized litigation services that Attorneys are providing to Client: Partners: Of Counsels: Associates: Paralegals/Clerks: $550 per hour $495 per hour $395 per hour $195/$150 per hour Such fees shall be in addition to reimbursement of Attorneys’ costs as set forth in Section 6, below. 5. Negotiability of Fees. The rates set forth above are not set by law, but are negotiable between Attorneys and Client. 6. Costs and Litigation Expenses. Attorneys will advance all costs in the Matter, which shall include court fees, messenger costs, court reporters’ fees, photocopying, postage, deposition costs, and travel costs. In addition, Attorneys will retain local counsel (such as Andrea Paparella, Esq. of Liddle & Robinson), and may also retain expert witnesses, consultants and/or investigators. Attorneys will be reimbursed for the costs advanced out of the recovery, with Attorneys’ fees being paid first, and costs reimbursed second. February 7, 2013 Representation Agreement Page 3 If an award of fees and/or costs is sought on Client’s behalf in this action, Client understands that the amount that the court may order as fees and/or costs is the amount the court believes the party is entitled to recover, and does not determine what fees and/or costs Attorneys are entitled to charge Client, or that only the fees and/or costs that were allowed were reasonable. Client agrees that, whether or not attorneys’ fees or costs are awarded by the court in Client’s case, Client will remain responsible for the payment, in full, of all attorneys’ fees and costs authorized and incurred in accordance with this Agreement. Client further agrees that, if attorneys’ fees are ordered and recovered from the opposing party, Attorneys have the option (which they may exercise in their sole and absolute discretion) of either receiving 100% of any such attorneys’ fees award in lieu of the contingency fee described in Section 4 above, or alternatively, including the collected attorneys’ fees as part of the recovery, as described in Section 4. 7. Partial Settlements. Attorneys shall be entitled to compensation in accordance with Paragraph 4 above, and shall further be entitled to reimbursement of all costs and litigation expenses advanced, pursuant to Paragraph 6 above, from any and all partial settlements achieved prior to the conclusion of the case and such fees and costs shall be paid to Attorneys prior to the conclusion of the case or the receipt of all sums to be received by full settlement, judgment or award. 8. Settlement of Claims. Attorneys will communicate all settlement proposals made by any defendants. Subject to any order of the court, Client shall have the right to accept or reject any such settlement proposals. Client is aware that if Client rejects a settlement proposal that is recommended by Attorney, Client may seek other counsel to represent Client and/or Attorneys may withdraw from the representation of Client provided, however, that Client understands that Attorneys will retain a lien, as set forth in Paragraph 18 below, on any claims, causes of action, settlements, awards, or judgments received from any claim or case upon which Attorneys rendered services. Any such lien shall be calculated using the hourly rates set forth in Paragraph 4, based on the actual hours worked by Attorneys until the date of such withdrawal. Client hereby grants to Attorneys a power of attorney and authority to deposit any settlement drafts or checks into Attorneys’ client trust account relating to any settlement on behalf of Client to which Client has given approval. 9. Disbursement of Net Recovery of Funds from Any Settlement, Award or Judgment. Upon the receipt of the entire recovery and allocation of such sums pursuant to the terms of this Agreement, and unless otherwise ordered by a court, Attorneys shall disburse the remaining sums to Client. Client will receive its share of any partial settlement, should any sums be available, after Attorneys have been compensated and reimbursed for costs as set forth herein. 10. Limitation of Representation. Attorneys are representing Client only on the Matter described in Paragraph 2. Attorneys’ representation does not include independent or related matters that may arise. This Agreement also does not include defending Client against, or representing Client in any claims that may be asserted against Client as a cross-claim or February 7, 2013 Representation Agreement Page 4 counter- claim in Client’s case. This Agreement does not apply to any other legal matters. If any such matters arise later, Attorneys and Client will either negotiate a separate agreement if Client and Attorneys agree that Attorneys will perform such additional work or Client will engage separate counsel with respect to such cross-claim or additional legal work. 11. Discharge and Withdrawal. Client may discharge Attorneys at any time, upon written notice to Attorneys. Attorneys may withdraw from representation of Client (a) with Client’s consent, (b) upon court approval, or (c) if no court action has been filed, for good cause and upon reasonable notice to Client. Good cause includes Client’s breach of this contract, Client’s refusal to cooperate with Attorneys or to follow Attorneys’ advice on a material matter, or any other fact or circumstance that would render Attorneys’ continuing representation unlawful or unethical. Additionally, Attorneys reserve the right to terminate their relationship with Client should Attorneys determine that it is not economically feasible for Attorneys to continue to represent Client in the Matter. Notwithstanding Attorneys’ withdrawal or Client’s notice of discharge, and without regard to the reasons for the withdrawal or discharge, Client will remain obligated to pay Attorneys for all costs incurred prior to the termination and, in the event that there is any net recovery obtained by Client after conclusion of Attorneys’ services, Client remains obligated to pay Attorneys for the reasonable value of all services rendered from the effective date of this Agreement to the date of discharge, according to the agreed rates set forth in Section 4, above, unless Attorneys elect to withdraw pursuant to the last sentence of the preceding Paragraph. 12. Conclusion of Services. When Attorneys’ services conclude, all approved and unpaid charges will immediately become due and payable. Attorneys are authorized to use any funds held in Attorneys’ trust account as a deposit against costs to apply to such unpaid charges. After Attorneys’ services conclude, upon request, Client’s file and property will be delivered to Client, or Client’s other attorneys, whether or not Client has paid any fees and/or costs owed to Attorneys. 13. Receipt of Proceeds. All proceeds of Client’s case shall be deposited into Attorneys’ trust account for disbursement in accordance with the provisions of this Agreement. 14. Disclaimer of Guarantee. Nothing in this Agreement and nothing in Attorneys’ statements to Client will be construed as a promise or guarantee about the outcome of the Matter. Attorneys make no such promises or guarantees. There can be no assurance that Client will recover any sum or sums in the Matter. Attorneys’ comments about the outcome of the Matter are expressions of opinion only. Client acknowledges that Attorneys have made no promise or guarantees about the outcome. 15. Privacy. In the course of representing Client, Attorneys may receive nonpublic personal financial information, such as financial statements, tax returns and other personal information, from Client or Client’s accountants or other representatives. Absent Client’s consent to disclose that information or as required by law, Attorneys shall hold all such February 7, 2013 Representation Agreement Page 5 information in strict confidence and to share it only with such personnel who are required to be aware of it in order to perform the services for which Attorneys have been retained. From time to time, however, Attorneys may share certain information with third parties who assist in providing services to Client (such as administrative and client service functions), subject to the obligation of these third parties not to use or disclose such information for any other purpose. Attorneys retain records relating to their professional services to the Client so that Attorneys are better able to assist Client with Client’s professional needs and, in some cases, to comply with professional guidelines. In order to guard Client’s nonpublic personal information from unauthorized disclosure, Attorneys maintain physical, electronic and procedural safeguards that comply with professional standards. 16. File Retention/Destruction Policy. Client is entitled, upon written request, to any files in Attorneys’ possession relating to the legal services performed by Attorneys for Client, excluding internal accounting records or other documents not reasonably necessary to Client’s representation, and documents considered to be attorney work subject to Attorneys’ right to make copies. Client agrees that upon the conclusion of Client’s matter, Attorneys will not be required to retain or store any pleadings or publicly filed or recorded documents, if those documents are otherwise retained or stored in any court or other publicly accessible file archive. As to all other files in Attorneys’ possession upon the conclusion of the matter, Attorneys may elect to notify Client, at Client’s last known address, of Attorneys’ intention to destroy or discard Client’s files unless contrary written instructions are received. Client may upon receipt of such notice advise Attorneys of Client’s intention to retrieve the files, or Client may direct Attorneys to forward the file materials to Client, at Client’s expense. If Client fails to respond within 30 days from the date the notice is mailed, and if Attorneys have no reason to believe that the files to be destroyed or discarded include things that would be required by law to be maintained or things that would be reasonably necessary to establish a claim or a defense, Attorneys may destroy or discard the files. 17. Arbitration. (a) Any controversy between the parties regarding the construction, application or performance of any services under this Agreement, and any claim arising out of or relating to this Agreement or its breach, shall be submitted to binding arbitration under the rules of the American Arbitration Association upon written request of one party after the service of that request on the other party. The dispute shall be heard and determined by a single arbitrator. Attorneys and Client shall each have the right of discovery in connection with any arbitration proceeding in accordance with California Code of Civil Procedure Section 1283.05. The parties shall bear their own legal fees and costs for all claims. The sole and exclusive venue for the arbitration and/or any legal dispute, shall be Los Angeles County, California. (b) Notwithstanding subparagraph A above, in any dispute subject to the jurisdiction of the State of California over attorneys’ fees, charges, costs or expenses, Client has the right to elect arbitration pursuant to the fee arbitration procedures of the State Bar of February 7, 2013 Representation Agreement Page 6 California, as set forth in California Business and Professions Code Sections 6200, et seq. Those procedures permit a trial after arbitration, unless the parties agree in writing, after the dispute has arisen, to be bound by the arbitration award. If, after receiving a notice of Client’s right to arbitrate, Client does not elect to proceed under the State Bar fee arbitration procedures and to file a request for fee arbitration within 30 days, any dispute over fees, charges, costs or expenses may be resolved by binding arbitration as provided in the previous subparagraph (a). Because each party is giving up a right, Client is encouraged to have an independent lawyer of Client’s choice review these arbitration provisions before agreeing to them. By initialing below, Client and Attorneys confirm that they have read and understand subparagraphs (a) and (b) above, and voluntarily agree to the provisions thereof. In doing so, Client and Attorneys voluntarily give up important constitutional rights to trial by judge or jury, as well as rights to appeal. Client is advised that Client has the right to have an independent lawyer of Client’s choice review these arbitration provisions, and this entire Agreement, prior to initialing this provision or signing this Agreement. (Client Initial here) (Attorneys Initial here) 11. Lien. Client hereby grants Attorneys a lien on any and all claims or causes of action that are the subject of the representation under this Agreement. The lien will be for any sums owing to Attorneys pursuant to the terms herein at the conclusion of services performed. The lien will attach to any recovery Client may obtain, whether by arbitration award, judgment, settlement or otherwise. The effect of such a lien is that Attorneys may be able to compel payment of fees and costs from any such funds recovered on behalf of Client even if Attorneys have been discharged before the end of the case. Because a lien may affect Client’s property rights, Client may seek the advice of an independent lawyer of Client’s choice before agreeing to such a lien. By initialing this paragraph, Client represents and agrees that Client has had a reasonable opportunity to consult such an independent lawyer and - whether or not Client has chosen to consult such an independent lawyer – Client agrees that Attorneys will have a lien as specified above. (Client Initial here) (Attorneys Initial here) 12. Effective Date. This Agreement will govern all legal services performed by Attorneys on behalf of Client commencing with the date Attorneys first performed services. The date at the beginning of the Agreement is for reference only. Even if this Agreement does not take effect, Client will be obligated to pay Attorneys the reasonable value of any services Attorneys may have performed for Client. February 7, 2013 Representation Agreement Page 7 The parties agree that this agreement may be signed in counterparts and that signatures may be transmitted electronically (by facsimile or email) and will have the same legal effect as an ori nal signature and the agreement and all such counterparts will constitute one legally binding instrument. If you agree with the terms of this Agreementr please sign a copy of this Agreement where indicated and return it to me. You may retain the original for your records. We look forward to working with you. Very truly yours, CHARLES J. HARDER for HARDER MIRELL 8: ABRAMS LLP AGREED: February 7, 2013 Representation Agreement Page 8 ATTORNEY FEE SCHEDULE (in U.S. Dollars) PARTNERS/OF COUNSEL...........................................................$425.00 - $595.00 per hour *** ASSOCIATES.................................................................................$250.00 - $395.00 per hour *** CLERKS & PARALEGALS...........................................................$90.00 - $195.00 per hour