This agreement confirms the terms and conditions upon which Legal Cost Consultants, Inc., "LCC" will provide services to "Client" with respect to accounting for all invoices and vendor charges in the "Litigation.” LCC includes Legal Cost Consultants, Inc. and its employees and agents. Litigation" is the legal controversy which is the underlying basis for LCC to review litigation related expenses." Client" includes one or more insurance companies and may also include non-insurance entities that may be sharing the cost of the Litigation. “Joint Cost Sharing Agreement" is an agreement entered into by Clients. "Vendor(s)" are those entities that provide legal or other services to defend the above legal action.

Please read, with care, the terms and conditions upon which LCC is willing to accept acting as your complex litigation accountant. This agreement may alter or clarify certain terms in the prior agreements and replaces the previous engagement agreement (if any). LCC's fees remain unchanged. If the terms and conditions are acceptable to you, please execute this agreement where indicated below and return it to LCC at 2340 South El Camino Real, Suite 1, San Clemente, CA 92672 and/or fax to 949-369-8922. Alternatively, your acceptance of our services will confirm your acceptance of this agreement. In either event, you are entering into an agreement that is binding on both LCC and the participants under the Joint Cost Sharing Agreement.

The purpose of this agreement is to set forth the scope of LCC's engagement, to confirm that we are in mutual agreement with respect to the Agreement, to set forth the various duties of the parties, to set forth the financial arrangements pursuant to LCC's engagement and to verify your approval of the terms.

The terms and conditions of the Agreement are as follows:

Parties to the Agreement:

The parties to the Agreement are Legal Cost Consultants, Inc. ("LCC") [as defined above] and "Client(s)" [as defined above].


This Agreement will take effect immediately upon LCC's receipt of vendor invoices. In many cases, Client has worked with LCC in the past and is familiar with its practice and charges.Due to the time sensitive nature of the complex litigation accounting services, LCC will begin work upon receipt of the file, which may occur prior to Client signing this Agreement.Client can, at any time, terminate this Agreement [see below].

This Agreement is a condition upon which LCC agrees to provide services to its Clients Because LCC will be representing multiple Clients pursuant to a Joint Defense Agreement (or cost sharing agreement) that may be formal or informal, LCC will not require each Client to sign this Agreement. This Agreement provides for a waiver of certain rights to file a lawsuit by and between the parties to the agreement, and restricts the parties to arbitration of any dispute. Those terms shall apply to all Clients, whether or not they sign this Agreement if they are parties to a formal or informal Joint Defense Agreement.

Scope of Engagement:


LCC agrees to provide the Client those services reasonably required to determine for each Client its share of expenses in the Litigation in which Client is sharing expenses with other entities. LCC will provide services including accounting for expenses in the Litigation and determination of each Client's share of such expenses. LCC will not perform a legal audit of attorney billing. LCC will review bills for duplication of invoices, interest charges, etc. LCC will also attend meetings, as requested by Client, and will be available by phone to answer any questions regarding vendor invoice amounts, payments, etc. LCC will provide Client with comprehensive written reports regarding approved vendor invoices, each Client's share of same, and payment status.

LCC is not acting as an escrow. LCC is not acting as a trust company or trustee However, LCC does recognize it has duties to Client with respect to any money deposited by Client into the LCC "Client Account(s)." LCC maintains one or more "Client Accounts" at a bank(s) including Pacific Western Bank. LCC deposits Client funds into such account(s) for payment of vendor invoices or reimbursement to insurers. LCC may maintain funds from various matters in one or more Client Accounts. LCC maintains complete accounting with respect to each matter and each Client Account.


Client agrees to forward all Vendor payments to LCC (payable either directly to each Vendor or to the LCC Client Account) on a timely basis. Client agrees to forward copies of or other evidence of any past vendor payments to LCC on a timely basis. Client agrees to timely inform LCC of any new Clients that will be sharing litigation expenses (or reimbursing other Clients). Client agrees to timely inform LCC if it no longer participates in the Joint Defense Agreement, to any modification of the sharing arrangement(s) and to provide LCC with a copy of the Joint Defense Agreement and any modifications thereto.


Attached to this agreement are LCC's standard charges. The hourly and percentage charges will not be raised during LCC's representation of Client on this litigation.

LCC's charges will be invoiced periodically based on the activities in the underlying matter. The details on the periodic statement will list the services rendered by LCC since the last LCC statement. LCC's fee structure is based on the premise that Client will pay all statements upon receipt, but in no event later than 45 days thereafter. If Client has any question about or objection to a statement or the basis for LCC's fees either in general or Client's share of LCC's fees, Client should raise that inquiry promptly. If Client objects to or questions a portion of a statement, LCC asks that Client pay the undisputed portion along with a written explanation of the reason for non-payment.

Client should pay its share of invoices directly to the LCC Client Account. Deposited funds are used to pay approved vendor charges and reimburse other insurers or other payers who are owed money. LCC is responsible for all banking charges and interest from the account(s), if any, will be paid to LLC. These charges and interest have been taken into account in establishing LCC's, charges as detailed below. LCC understands that its primary obligation is to pay vendors or reimburse Client(s) money deposited in the Client Account(s).


Any dispute, controversy or claim arising out of or relating to this Agreement or breach, termination, enforcement, interpretation or validity thereof, without limitation, including the determination of the scope or applicability of this Agreement to arbitrate ("Dispute") shall be resolved and determined by binding arbitration in Los Angeles, California, before a sole arbitrator, pursuant to the laws of the State of California for agreements made in and to be performed in California, even if said agreement and/or services are entered into or performed outside of California. The arbitration shall be administered by the American Arbitration Association ("AAA"), in County of Orange, California pursuant to its Commercial Rules and Supplementary Procedures for Large, Complex Disputes with the arbitrator (one) chosen from the Large, Complex Dispute Panel, if one exists and is agreed to by all parties, otherwise as determined by the AAA. The arbitrator shall, in the Award, allocate all of the costs of the arbitration (and mediation, if applicable) including the fees of the arbitrator and the AAA against the party who did not prevail. Attorneys' fees shall be borne by each party. Upon the request of both parties, a mediation shall be conducted prior to the arbitration pursuant to the Mediation Rules of the AAA. Judgment on the Award may be entered in any court having jurisdiction.


Client can withdraw from the Agreement at any time, with or without cause. The termination shall be in writing delivered to LCC.


LCC's policy with regard to documents is as follows: 1) invoices are scanned into our database and stored on our computer. The paper invoices may be destroyed or discarded by LCC at any time..Original invoices are often maintained by the defending law firm. 2) At the conclusion of a matter, LCC will maintain correspondence and other documents in storage for 3 months. At the conclusion of that period, all documents are discarded. Accordingly, if there are any documents or papers Client wishes to remove from the file at the conclusion of the matter, please advise LCC of that request, in writing, to insure that the documents are not destroyed. LCC is not liable for any damages that may result if and when documents are destroyed. LCC reserves the right to charge reasonable charges for copying and related charges if a Client(s) requests copies of the documents.


Client understands that LCC has made no representation or guarantee concerning the accounting services it will perform. In particular, LCC does not guarantee that any reduction to vendor billing recommended by LCC will be upheld by a court or arbitrator if the vendor and/or any other party contests such reduction(s). LCC will be held harmless and will be indemnified by Client for any actions against it by any vendor, insured or other third party.


No variance, change, modification or augmentation of this Agreement shall be effective unless and until confirmed in writing, making express reference to this Agreement. This document and the fee schedule attached to it, embodies the whole agreement of the parties (and by reference any cost sharing agreement entered into by the Client(s)). There are no promises, terms, conditions or obligations other than those contained in this Agreement, and this Agreement shall supersede all previous communications, representations, or other agreements, either verbal or written, between LCC and the Client.


This Agreement may be signed in counterpart. Facsimile signatures of LCC and of Client(s) shall be effective as original signatures.


This Agreement will also apply to services rendered for such future matters that Client request LCC to handle.


By: Brad Malamud, its president


LCC bills for complex litigation accounting as follows:

One time charges:

Set-up (all insurers and related information and all vendors) - $500

Periodic charges:

Invoice processing & accounting: 2.5% of vendor invoices (see below for additional services included in invoice processing)

Monthly charge of $10.00 per defending insurer, per insured

Attendance at Meetings - Out of pocket charges only. No time charges.

Out of pocket costs, at cost, without mark-up, except:.

Photocopying or C.D.s of vendor invoices at $.10 per page - no charge for CD jewel box.



Posting vendor invoices and scanned

Posting payments by Clients (insurers/payees) - scanned

Reports regarding amounts owing and approved charges

Determining payment and responsibility shares

Supplies including paper, envelopes, data storage and backup, etc.

Electronic delivery of invoices to payers

Updates in C.L.A.I.M.S. software

Response to telephone inquiries by vendors and parties

All reports to vendors, insures, etc.


Long distance and local telephone