Settlement Expense Letter

Settlement Expense Letter

This Settlement Expense Letter (the "Letter") is entered into as of Effective Date: by and between Claimant Name: (hereinafter "Claimant") and Payor Name: (hereinafter "Payor"). The parties agree to the terms set forth below with respect to the allocation, approval and payment of expenses related to the settlement referenced below.

RECITALS

WHEREAS, the parties have entered into a Settlement Agreement dated Settlement Date: and identified as Settlement Reference: (the "Settlement Agreement"), resolving certain claims between them; and

WHEREAS, the parties anticipate payment of settlement proceeds and certain expenses reasonably incurred in connection with the claim and resolution thereof; and

WHEREAS, the parties desire to set forth their agreement governing the identification, approval, allocation, and payment of those expenses from the settlement proceeds.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

1. DEFINITIONS

For the purposes of this Letter, the following capitalized terms shall have the meanings set forth below:

"Settlement Proceeds" means the gross sum payable under the Settlement Agreement prior to deductions for Allowed Expenses, taxes or other authorized deductions.

"Allowed Expenses" means costs and expenses that are (a) reasonable and necessary, (b) incurred in connection with the prosecution, defense, settlement or resolution of the underlying claim, and (c) documented by receipts, invoices or contemporaneous records provided to Payor in accordance with Section 4.

2. EXPENSE AUTHORIZATION AND ITEMIZATION

Claimant shall submit to Payor an itemized statement of all anticipated and incurred expenses for which Claimant requests payment or reimbursement (the "Itemized Expenses"). The Itemized Expenses shall identify the date, vendor or payee, the nature of the expense, and the amount.

Itemized Expenses (provide detail or attach supporting schedules):

Alternatively, enter up to three principal expense line items below:

3. PAYMENT TERMS

Payor agrees that Allowed Expenses shall be paid from Settlement Proceeds as follows: (a) upon disbursement of Settlement Proceeds, Payor shall either (i) pay Allowed Expenses directly to the designated payee(s) or (ii) deduct the amount of Allowed Expenses from the Settlement Proceeds prior to remittance to Claimant; (b) any deduction or payment shall be effected within Payment Period (days): days of receipt of complete supporting documentation as required by Section 4.

If Payor elects to hold funds in escrow to cover disputed or pending expenses, such holdback shall be identified and governed in accordance with Section 5.

4. ACCOUNTING, RECEIPTS AND APPROVAL

Claimant shall deliver to Payor original receipts, invoices, billing statements or other contemporaneous documentation reasonably evidencing each requested expense. Payor shall have the right to request reasonable additional supporting documentation within Request Response Period (days): days of submission. Failure to timely provide requested documentation may result in delay of payment until documentation is provided.

5. ESCROW OR HOLDBACK

The parties agree that a portion of the Settlement Proceeds may be held in escrow to satisfy Allowed Expenses that are disputed or not yet documented to Payor's reasonable satisfaction. Escrow Required: Yes

The escrow agent and escrow instructions shall be mutually agreed in writing by the parties. Funds released from escrow shall be released only upon joint written instruction of the parties or final determination by a court or arbitrator of competent jurisdiction.

6. TAXES

Each party shall be responsible for its own tax obligations arising from the Settlement Proceeds and any payments or reimbursements made under this Letter unless otherwise required by applicable law. Any withholding or reporting required by law shall be the responsibility of the withholding party and shall be accomplished in a manner that preserves the net amounts contemplated by the parties to the extent practicable.

7. INDEMNIFICATION AND OFFSET

Each party shall indemnify and hold harmless the other party and any escrow agent from and against any liability, loss, cost or expense (including reasonable attorneys' fees) arising out of false, misleading, or fraudulent expense submissions, or out of the indemnifying party's breach of any representation or warranty in this Letter. Payor reserves the right to offset against any amounts otherwise due to Claimant sums that Payor reasonably disputes as not constituting Allowed Expenses, provided Payor notifies Claimant of the basis for such offset in writing.

8. NOTICES

Notice Address for Claimant

Notice Address for Payor

9. GOVERNING LAW; ENTIRE AGREEMENT; SEVERABILITY

This Letter shall be governed by and construed in accordance with the laws of Governing State: without regard to conflict of laws principles. This Letter constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings and representations, whether written or oral. If any provision of this Letter is held to be invalid, illegal or unenforceable, the remaining provisions shall continue in full force and effect.

10. AMENDMENTS; WAIVER; COUNTERPARTS

This Letter may be amended only by a writing executed by both parties. No failure or delay by either party in exercising any right or remedy under this Letter shall operate as a waiver thereof. This Letter may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

11. REPRESENTATIONS

Each party represents and warrants that it has the full power and authority to enter into this Letter and to perform its obligations hereunder, that the person signing on its behalf is duly authorized, and that the execution and performance of this Letter does not violate any other agreement to which it is a party.

The parties acknowledge that this Letter sets forth the entire agreement regarding the treatment of expenses from the settlement and is intended to be binding and enforceable according to its terms.

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