Exhibit 10.1
SERVICES AGREEMENT
This Services Agreement (this “Agreement”), dated as of October 1, 2009 (the
“Effective Date”), is by and between American Processing Company, LLC, a
Michigan limited liability company (d/b/a NDeX) (the “Default Specialist”),
James E. Albertelli, P.A., a Florida professional association d/b/a “Albertelli
Law” (the “Firm”), and, solely for purposes of making the commitments set forth
in Article VIII (Restrictive Covenants), James E. Albertelli (the “Restricted
Party”). The Default Specialist and the Firm are hereinafter collectively
referred to as the “Parties” and each as a “Party.” Unless otherwise indicated,
capitalized terms used but not otherwise defined herein have the meanings set
forth in Section 1.1 below.
RECITALS
A. The Firm is engaged in the Practice of Law with offices in Jacksonville and
Tampa, Florida. Prior to the date hereof, in addition to the Practice of Law,
the Firm provided certain non-legal services to Clients, including the Mortgage
Default Services.
B. Immediately prior to, and in connection with the transactions contemplated by
this Agreement, the Firm has sold to the Default Specialist substantially all of
the assets (the “Purchased Assets”) used by the Firm in the business of
providing Mortgage Default Services to the Firm’s Clients and the Default
Specialist has assumed certain liabilities of the Firm associated therewith (the
“Assumed Liabilities”) pursuant to the Purchase Agreement.
C. The Firm now desires, subject to the terms and conditions described herein,
to engage the Default Specialist to provide Mortgage Default Services to the
Firm for the benefit of its Clients; provided, however, that the performance of
any Legal Services in connection with the business of the Firm shall continue to
be performed solely by the Firm.
D. The Restricted Party acknowledges and agrees that the Restricted Party will
receive direct and substantial benefit from the consummation of the transactions
contemplated by the Purchase Agreement and has agreed to become a party to this
Agreement for the limited purpose of agreeing to certain covenants applicable to
him as set forth in Article VIII (Restrictive Covenants).
AGREEMENTS
In consideration of the foregoing, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definition of Certain Terms. The terms defined in this Section 1.1, whenever
used in this Agreement (including in the Schedules and Exhibits), shall have the
respective meanings indicated below for all purposes of this Agreement:
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

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“AAA” means the American Arbitration Association.
“Affiliate” as applied to any Person, means any other Person, directly or
indirectly, controlling, controlled by, or under common control with, that
Person. The term “control” (including, with correlative meanings, the terms
“controlling,” “controlled by” and “under common control with”), as applied to
any Person, includes the possession, directly or indirectly, of fifty percent
(50%) or more of the voting power (or in the case of a Person which is not a
corporation, fifty percent (50%) or more of the ownership interest, beneficial
or otherwise) of such Person or the power otherwise to direct or cause the
direction of the management and policies of that Person, whether through voting,
by contract or otherwise.
“Agencies” shall mean, individually or collectively, Fannie Mae, Freddie Mac,
FHA, VA and GNMA and any other governmental agencies or quasi-governmental
agencies who are residential mortgage lenders or residential mortgage loan
servicing companies that are or become Clients of the Firm.
“Agreement” has the meaning set forth in the Preamble of this Agreement.
“Applicable Law(s)” means any statute, law, ordinance, regulation, requirement,
order or rule of any Governmental Body, or any governmental or administrative
interpretation thereof, including, but not limited to, any and all federal,
state and local laws governing the legal profession generally, including, but
not limited to, the State of Florida’s Rules of Professional Conduct, the Fair
Debt Collection Practices Act and the Graham-Leach-Bliley Act.
“Assumed Liabilities” has the meaning set forth in the Recitals of this
Agreement.
“BLS” has the meaning set forth in Section 3.1(b) of this Agreement
“Breaching Party” has the meaning set forth in Section 9.3 of this Agreement.
“Business” means the business of providing Mortgage Default Services.
“Business Day” means a day of the year on which banks are not required or
authorized by law to close in Minneapolis, Minnesota.
“Change” and “Changes” have the meaning set forth in Article X of this
Agreement.
“Claim” has the meaning set forth in Section 12.6 of this Agreement.
“Clients” shall mean residential mortgage lenders or residential mortgage loan
servicing companies that have engaged the Firm, or may engage the Firm in the
future, as well as any other Person who receives Legal Services in combination
with Mortgage Default Services from the Firm.
“CPI” has the meaning set forth in Section 3.1(b) of this Agreement.
“CPI Percentage” has the meaning set forth in Section 3.1(b) of this Agreement.
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

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“Default Specialist Confidential Information” has the meaning set forth in
Section 7.1(a) of this Agreement.
“Default Specialist” has the meaning set forth in the Preamble of this
Agreement.
“Default Specialist Intellectual Property” has the meaning set forth in Section
7.6 of this Agreement.
“Default Specialist Workforce” has the meaning set forth in Section 5.1 of this
Agreement.
“Effective Date” has the meaning set forth in the Preamble to this Agreement.
“Employee Expenses” means any and all employee costs of the Default Specialist
Workforce, including, but not limited to, personnel salaries, overtime, bonuses,
commissions, fringe benefits, accrued vacations, sick leave time, profit
sharing, pension, and any insurance benefits.
“Engagement Letter” means any engagement letter, contract, agreement or other
arrangement between the Firm and a Client.
“Exclusivity Term” means the period commencing on the Effective Date and
continuing until the earlier of (i) two years from the Effective Date, or
(ii) the date upon which an Exclusivity Termination Event shall have occurred.
“Exclusivity Termination Event” means the occurrence of any of the following:
(i) the failure by the Firm or the Restricted Party to cure a Material Breach
within sixty (60) days after receipt from the Default Specialist of a written
notice describing such Material Breach, (ii) the Firm ceases to operate its
legal services business as historically operated by the Firm prior to the
Effective Date or (iii) the Firm becomes Insolvent.
“Extended Term” has the meaning set forth in Section 9.2 of this Agreement.
“Fannie Mae” shall mean the Federal National Mortgage Association.
“Fee Schedule” has the meaning set forth in Section 3.1(a) of this Agreement.
“Firm Confidential Information” has the meaning set forth in Section 7.2(a) of
this Agreement.
“Firm Damages” has the meaning set forth in Section 12.4 of this Agreement.
“Firm” has the meaning set forth in the Preamble of this Agreement.
“First Installment Payment” has the meaning given to such term in the Purchase
Agreement.
“First Invoice” has the meaning set forth in Section 3.2(b) of this Agreement.
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

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“First Invoice Amount” has the meaning set forth in Section 3.2(b) of this
Agreement.
“FHA” shall mean the Federal Housing Administration.
“Force Majeure Condition” shall mean any condition or event beyond the control
of the Party affected thereby, including, but not limited to, fire, explosion,
or other casualty, act of God, war or civil disturbance, acts of public enemies,
embargo, the performance or non-performance of third parties, acts of city,
state, local or federal governments in their sovereign, regulatory, or
contractual capacity, labor difficulties and strikes.
“Freddie Mac” shall mean the Federal Home Loan Mortgage Corporation.
“GAAP” means United States generally accepted accounting principles,
consistently applied in accordance with past practices.
“GNMA” shall mean the Government National Mortgage Association.
“Governmental Body” means any:
(a) federal, state, county, municipal, city, town, village, district, or other
jurisdiction or government of any nature;
(b) governmental or quasi-governmental authority of any nature (including any
governmental agency, branch, department, official, or other entity and any court
or other tribunal); or
(c) body exercising, or entitled or purporting to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing authority or
power of any nature.
“Indemnified Party” has the meaning set forth in Section 12.6 of this Agreement.
“Indemnifying Party” has the meaning set forth in Section 12.6 of this
Agreement.
“Initial Term” has the meaning set forth in Section 9.1 of this Agreement.
“Insolvent” means a party who makes an assignment for the benefit of its
creditors, or voluntarily commences proceedings in bankruptcy, reorganization or
liquidation under the United States Bankruptcy Code, 11 U.S.C. §§ 101, et seq.,
as amended, or under any other state, federal or Applicable Law for the relief
of debtors (or an action under any such laws is commenced against such party and
is not discharged within 60 days), or has a receiver, trustee or custodian
appointed to operate its business who is not discharged within 60 days of his,
her or its appointment.
“Investors” shall mean Fannie Mae, Freddie Mac, GNMA, FHA, VA, other Agencies
and the Private Investors, collectively.
“Invoice” means any Monthly Invoice or the First Invoice.
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

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“Legal Services” means counseling or assisting others in matters that require
the use of legal discretion and legal knowledge, the giving of advice or the
rendering of any service requiring the use of legal skill or knowledge,
including the provision of any service constituting the practice of law under
all Applicable Laws.
“Malpractice Insurance Policies” has the meaning set forth in Section 4.6 of
this Agreement.
“Material Breach” means any breach of this Agreement (other than, with respect
to clauses (a), (b) or (c) below, as a result of a Force Majeure Condition) by
one Party or, with respect to clause (d) only, the Firm that:
(a) significantly deprives the Non-breaching Party of the benefits afforded to
it under this Agreement;
(b) causes the Non-breaching Party to suffer material losses or material damages
that cannot be properly redressed by the payment of money;
(c) constitutes gross negligence or willful misconduct on the part of the
Breaching Party that results in a material loss or material damages to the
non-Breaching Party; or
(d) the failure by the Firm to timely pay any amounts owed to the Default
Specialist under this Agreement.
“Measuring Month” has the meaning set forth in Section 3.1(b) of this Agreement.
“Monthly Invoice” has the meaning set forth in Section 3.2(a) of this Agreement.
“Mortgage Default Services” means all services relating to the residential (but
not commercial) foreclosure, residential eviction, residential bankruptcy and
litigation (with respect to any of the foregoing) practices of the Firm
including, but not limited to, REO closing work, posting and publishing or other
related services, but excluding in each instance any Legal Services and also
excluding skip tracing, registered agent verification, real estate brokerage and
short sale procurement services performed by lawyers in the Firm. For the
avoidance of doubt, the Mortgage Default Services shall not include any of the
functions performed by the PREO Software; provided, however, that the PREO
Software shall not be used to perform any of the services relating to the
residential (but not commercial) foreclosure, residential eviction, residential
bankruptcy and litigation (with respect to any of the foregoing) practices of
the Firm including, but not limited to, REO closing work, posting and publishing
or other related services.
“New Fee Amount” has the meaning set forth in Section 3.1(b) of this Agreement.
“Non-breaching Party” has the meaning set forth in Section 9.3 of this
Agreement.
“Office Products” has the meaning set forth in Section 4.4 of this Agreement.
“Parties” and “Party” each has the meaning set forth in the Preamble of this
Agreement.
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

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“Person” means an individual, partnership, corporation (including a business
trust, professional corporation or professional association), joint stock
company, trust, unincorporated association, joint venture, limited liability
company or other entity, or a government or any political subdivision or agency
thereof.
“Practice of Law” means any activities that constitute providing Legal Services.
“PREO Software” means those certain online bidding and loss mitigation software
programs and applications (and all derivations thereof) owned by the Restricted
Party or his Affiliates, whether or not such programs and applications are
referred to by the name “PREO” or “REO2GO.”
“Prevailing Party” has the meaning set forth in Section 12.2 of this Agreement.
“Private Investors” shall mean private investors (i.e., non-Agency) who make or
invest in residential mortgage loans.
“Purchase Agreement” means that certain Asset Purchase Agreement, executed on
the Effective Date, but immediately prior to the execution of this Agreement, by
and among the Firm, the Default Specialist, the Restricted Party and the other
parties a party thereto.
“Purchased Assets” has the meaning set forth in the Recitals of this Agreement.
“Reasonable Attorneys’ Fees” shall mean those reasonable attorneys’ fees
actually incurred and paid in obtaining a judgment in favor of the Prevailing
Party, calculated based on a maximum hourly rate of $250.
“Restricted Period” has the meaning set forth in Section 8.1(a) of this
Agreement.
“Restrictive Covenants” has the meaning set forth in Section 8.1 of this
Agreement.
“Sales Tax” has the meaning set forth in Section 3.1(d) of this Agreement.
“Second Installment Payment” has the meaning given to such term in the Purchase
Agreement.
“Standard Operating Procedures” means the operating procedures agreed to by the
Parties regarding the integration of Mortgage Default Services provided by the
Default Specialist and Legal Services provided by the Firm.
“Sublease Agreements” means those certain Sublease Agreements, each dated as of
the date hereof, by and between the Firm and the Default Specialist.
“Territory” has the meaning set forth in Section 8.1(a) of this Agreement.
“VA” shall mean the Department of Veterans Affairs.
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

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“Veritas Software” means that certain case management software program owned by
the Default Specialist and used in the provision of Mortgage Default Services
whether or not such program is referred to by the name “Veritas”.
“Work Product” shall mean all work product developed by the Firm, or any of its
employees or approved subcontractors (tangible, recorded or otherwise, and
without regard to the form of recordation or state of completion) in the
performance of Legal Services for Clients, whether or not the services being
performed are complete.
“Work-in-Process” shall mean at any time all Work Product in the hands of the
Firm including, but not limited to, mortgage loan files, bankruptcy, foreclosure
or litigation files relating to any Client mortgage loan, working papers,
narrative descriptions, reports, data, tapes, diskettes, software (if originally
provided by a Client), and all material of similar character.
1.2 Additional Terms. The terms “hereof,” “herein” and “hereunder” and terms of
similar import are references to this Agreement as a whole and not to any
particular provision of this Agreement. The term “including” as used in this
Agreement is used to list items by way of example and shall not be deemed to
constitute a limitation of any term or provision contained herein. As used in
this Agreement, the singular or plural number shall be deemed to include the
other whenever the context so requires. Section, paragraph, clause, Exhibit and
Schedule references contained in this Agreement are references to sections,
paragraphs, clauses and schedules in or to this Agreement, unless otherwise
specified.
ARTICLE II
SERVICES TO BE PROVIDED BY THE DEFAULT SPECIALIST
2.1 Mortgage Default Services. The Firm hereby exclusively engages the Default
Specialist, and the Default Specialist hereby agrees, to perform the Mortgage
Default Services that the Firm has determined or established as necessary and
essential for the benefit of, and on behalf of, its Clients. For all purposes
under this Agreement, the term “Firm” shall include any other law firm or lawyer
that becomes affiliated with the Firm or the Restricted Party or with whom the
Restricted Party becomes affiliated. The Default Specialist hereby agrees to
perform Mortgage Default Services for the Firm on an exclusive basis throughout
the Territory during the Exclusivity Term.
2.2 Supervision of Default Specialist Personnel. The Parties intend that all
employees of the Default Specialist who are providing Mortgage Default Services
pursuant to this Agreement, shall, to the extent required by Applicable Law,
work under the direct or indirect supervision of an attorney employed by the
Firm in a manner consistent with the historical practices of the Firm. Such
supervising attorney shall have the ultimate authority as to all legal decisions
regarding each file, matter, or case for which the Default Specialist is
performing Mortgage Default Services. Notwithstanding the foregoing, and in any
event, the Firm agrees to cause its attorneys to provide supervision of the
employees of the Default Specialist that are providing Mortgage Default Services
in compliance with Applicable Law.
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

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2.3 Standard Operating Procedures. The Standard Operating Procedures shall be
formulated in compliance with all Applicable Laws. The Standard Operating
Procedures shall be amended from time to time by the Firm and the Default
Specialist, in accordance with changes in Applicable Law, or for the reasonable
accommodation of reasonable requests of Clients, Investors or Agencies, so long
as any such amendments shall not materially increase the duties or
responsibilities of the Default Specialist hereunder.
2.4 Exclusivity. During the Exclusivity Term, the engagement of the Default
Specialist by the Firm shall be on an exclusive basis solely with respect to the
Territory, and the Default Specialist, in its sole discretion, may provide
Mortgage Default Services to any other Person outside of the Territory. From and
after the end of the Exclusivity Term, the engagement of the Default Specialist
by the Firm shall be on a non-exclusive basis, and the Default Specialist, in
its sole discretion, may provide Mortgage Default Services to any other Person,
either inside or outside the Territory.
ARTICLE III
COMPENSATION AND REIMBURSEMENT
3.1 Fees and Reimbursement.
(a) Initial Fee Schedule. Subject to the terms and conditions of this
Section 3.1, in consideration for the performance of the Mortgage Default
Services hereunder, the Default Specialist will be compensated on a per file fee
basis for files referred by the Firm to the Default Specialist for processing in
accordance with the following fee schedule (the “Fee Schedule”):

          Type of File   Per File Fee  
Foreclosure
  $ [***]  
Bankruptcy
  $ [***]  
Eviction
  $ [***]  
Litigation
  $ [***]  
REO Closing with Title
  $ [***]  
REO Closing without Title
  $ [***]  

The Fee Schedule set forth above shall be in effect for a period starting on the
Effective Date and ending on September 30, 2010.
(b) Amendments to Fee Schedule.
(i) Commencing on October 1, 2010, on October 1st of each year during the
Initial Term and any Extended Term of this Agreement, each per file fee set
forth on the Fee Schedule shall be adjusted to equal that amount (the “New Fee
Amount”) equal to the product of (x) the per file fee in effect during the
immediately preceding calendar year and (y) the CPI Percentage. For each year,
the New Fee Amount for each fee per file shall be submitted to the Firm in
writing by the Default Specialist on a date that is no later than thirty
(30) days after the publication of the Consumer Price Index – All Urban
Consumers, U.S. City Average by the BLS for the applicable Measuring Month. For
purposes of this Agreement, for any particular year during the Initial Term and
any Extended Term of this Agreement, the “CPI Percentage” shall equal the
product of (x) 100% and (y) a fraction, the numerator of which is the Consumer
Price Index – All Urban Consumers, for the South Urban Region, Size Class A (the
“CPI”) compiled and published by the Bureau of Labor Statistics and the
Department of Labor (the “BLS”) for the United States of America for the month
of August of the then current calendar year (the “Measuring Month”) and the
denominator of which is the CPI for the month twelve (12) months prior to such
Measuring Month. In the event that the CPI Percentage is less than 100% for any
particular year, the Parties agree that there shall be a decrease to the New Fee
Amount for such year. If the CPI shall be discontinued with no successor or
comparable successor index, then the Default Specialist and the Firm agree to
use the Consumer Price Index – All Urban Consumers, U.S. City Average published
by the BLS or an successor index that most closely approximates such index. If
the Consumer Price Index – All Urban Consumers, U.S. City Average shall be
discontinued with no successor or comparable successor index, then the Default
Specialist and the Firm shall attempt to agree in good faith upon a substitute
index or formula.
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

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(ii) For purposes of example only, to determine the CPI Percentage for the
twelve-month period commencing on October 1, 2010, the CPI Percentage would
equal the product of (x) 100% and (y) a fraction, the numerator of which would
equal the Consumer Price Index – All Urban Consumers, for the South Urban
Region, Size Class A published by the BLS for the month of August 2010 and the
denominator of which would be the Consumer Price Index – All Urban Consumers,
for the South Urban Region, Size Class A published by the BLS for the month of
August 2009.
(c) Client Related Third Party Expenses. Notwithstanding anything to the
contrary herein, the Firm agrees that it will pay all Client related third party
expenses incurred by the Default Specialist in the performance of the Mortgage
Default Services hereunder, including, but not limited to, fees paid for
(i) title insurance; (ii) filing of deeds and other legal documents;
(iii) sheriff services; (iv) packaging services; and (v) court costs.
(d) Taxes. The Firm acknowledges and agrees that the per file fees set forth in
the Fee Schedule, as may be amended from time to time, do not include any
applicable withholding, sales, use, excise, services or similar tax (any such
tax, a “Sales Tax”). If any Sales Tax is assessed on the provision of any
Mortgage Default Services under this Agreement, the Firm shall either (i) pay,
reimburse or indemnify the Default Specialist for such Sales Tax or (ii) provide
the Default Specialist with a certificate or other proof, reasonably acceptable
to the Default Specialist, evidencing an exemption from liability for such Sales
Tax. The Parties agree to cooperate with each other in determining the extent to
which any Sales Tax is due and owing under the circumstances, and will provide
and make available to each other any resale certificate, information regarding
out of state use of materials, services or sale, and other exemption
certificates or information reasonably requested by either Party.
3.2 Invoice and Payments.
(a) Invoice. Within fifteen (15) days following the end of each calendar month
during the term of this Agreement, and any extensions or renewals thereof, the
Default Specialist shall submit an invoice to the Firm (each a “Monthly
Invoice”) indicating (i) the number and types of files referred by the Firm to
the Default Specialist for processing during the preceding month, and (ii) the
total amount due to the Default Specialist for such files referred during the
preceding month; provided, however, that the Default Specialist and the Firm
acknowledge and agree that only fifty percent (50%) of the aggregate amount due
with respect to Foreclosure files referred by the Firm to the Default Specialist
for processing during the preceding month shall be due and payable by the Firm
in such Monthly Invoice and that the remaining balance owed by the Firm to the
Default Specialist for such Foreclosure files shall be paid by the Firm to the
Default Specialist no later than nine (9) months after the initial due date for
such Monthly Invoice.
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

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(b) First Invoice. The first Monthly Invoice (the “First Invoice”) shall be
delivered by the Default Specialist to the Firm as soon as practicable after the
Effective Date. The amount due on this First Invoice (the “First Invoice
Amount”) shall be calculated as follows: the sum of (i) the product of (A) the
number of Foreclosure Files open as of the Effective Date, multiplied by (B) a
per file fee of $[***] for each such open Foreclosure File, plus (ii) the
product of (A) the number of all other files identified on the Fee Schedule open
as of the Effective Date, multiplied by (B) a per file fee of $[***] for each
such open file. For purposes of example only, if there were [***] Foreclosure
Files and [***] other files open as of the Effective Date, then the First
Invoice Amount would be equal to $[***] (([***] x $[***])+([***] x $[***]) =
$[***]). The Firm shall pay the First Invoice Amount to the Default Specialist
as follows: (i) [***] Dollars ($[***]) shall be paid on December 1, 2009, (ii)
[***] Dollars ($[***]) shall be paid on February 1, 2009, (iii) [***] Dollars
($[***]) shall be paid by offset against the First Installment Payment pursuant
to Section 2.2 of the Purchase Agreement, and (iv) the remaining balance of the
First Invoice Amount shall be paid by offset against the Second Installment
Payment pursuant to Section 2.2 of the Purchase Agreement. The Default
Specialist acknowledges and agrees that it will perform the Mortgage Default
Services with respect to all files in process on the Effective Date which are
the subject of the First Invoice in exchange for payment by the Firm of the
First Invoice Amount as provided in this Section 3.2(b) and that no further
amounts will be owed by the Firm to the Default Specialist for such Mortgage
Default Services to be performed by the Default Specialist on such files other
than any related third party expenses incurred by the Default Specialist in the
performance of the Mortgage Default Services pursuant to Sections 3.1(c) or
3.1(d) hereof.
(c) Objection. The Firm shall have the right to dispute, in good faith, any
Invoice, in part or in total. The Firm will promptly notify the Default
Specialist of any dispute regarding any Invoice, and the Parties agree to use
all commercially reasonable efforts to promptly resolve any such dispute. If the
Parties are unable to reach a resolution, then the Parties will choose a
mutually acceptable independent accounting firm to resolve such dispute. The
decision of the independent accounting firm shall be final as to all matters
relating to such dispute, and the Parties shall split all costs associated with
the engagement of the independent accounting firm equally. When attempting to
resolve any such dispute, the Parties agree to allow the other Party and the
independent accounting firm access to all information relevant to such issue(s)
in dispute, unless such access would violate any other provision of this
Agreement, the attorney client privilege or any client secrets.
(d) Payment. The Firm shall pay each Monthly Invoice (other than the First
Invoice) within forty-five (45) days after receipt thereof.
3.3 Reasonable Value. The Firm and the Default Specialist acknowledge and agree
that the Fee Schedule and any increases thereto pursuant to Section 3.1(b), have
been negotiated at arm’s-length and represent and shall represent the reasonable
value of the Mortgage Default Services furnished by the Default Specialist
pursuant to this Agreement, considering the nature and volume of the services
required. Payment of the fees pursuant to Section 3.2 hereof is not intended to
be and shall not be interpreted or applied as permitting the Default Specialist
to share in the Firm’s fees for Legal Services performed by the Firm on behalf
of its Clients.
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

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ARTICLE IV
AFFIRMATIVE COVENANTS OF THE FIRM
4.1 Exclusive Use of the Default Specialist for Mortgage Default Services.
During the term of this Agreement and any extensions or renewals thereof, the
Firm shall engage only the Default Specialist to provide Mortgage Default
Services on behalf of any Client in the Territory, and shall not retain, hire,
employ, use or engage any other Person to provide Mortgage Default Services. The
Default Specialist shall be entitled to obtain injunctive relief against the
breach or threatened breach of the obligations of the Firm set forth in this
Section 4.1 without the posting of any bond or other security.
4.2 Notification to and Consents from Clients. In accordance with Applicable Law
and any Engagement Letter, the Firm shall notify and, where required by the
terms or conditions of any Engagement Letter, obtain the consent of its existing
Clients and any new Clients of the Firm’s intention to use the Default
Specialist to provide Mortgage Default Services.
4.3 Supervision of Default Specialist. The Firm agrees to cause its attorneys to
provide supervision of the employees of the Default Specialist that are
providing Mortgage Default Services in compliance with Applicable Law.
4.4 Support of the Default Specialist. Pursuant to the Sublease Agreements, the
Firm shall permit employees of the Default Specialist to (i) utilize its office
space, as the Parties shall mutually determine, acting reasonably and in good
faith, and (ii) provide access to, and the authorized use of, all software and
assets owned or licensed by the Firm needed by the Default Specialist to operate
the Business and to adequately and efficiently provide the Mortgage Default
Services to the Firm and its Clients; provided, however, that all office
furniture, office equipment (including, but not limited to, telephones,
computers and copiers), office supplies and all other normal and customary
office products associated with or required to perform the Mortgage Default
Services contemplated by this Agreement (collectively, the “Office Products”)
shall be the responsibility of the Default Specialist. Notwithstanding the
foregoing, the Firm shall have no responsibility for any Employee Expenses. The
Firm shall provide to the Default Specialist in a timely manner file count
reports in a form consistent with, and using the same methodology as, the file
count reports generated by the Firm for its own account prior to the date of
this Agreement.
4.5 Compliance With Law; Adherence to Professional Standards.
(a) Professional Ethical Requirements. From and after the Effective Date, the
Firm shall fully inform the Default Specialist of all professional ethical
responsibilities relating to the Practice of Law (and any changes thereto), as
the same may be applicable to any Mortgage Default Services performed by the
Default Specialist under this Agreement. The Firm will inform the Default
Specialist of and cooperate with the Default Specialist to assure that any
confidences and secrets of Clients will be protected and maintained to the full
extent required by any professional ethics rules applicable to the Practice of
Law.
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

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(b) Compliance with Applicable Laws. The Firm shall perform Legal Services
diligently, conscientiously and in a manner consistent with professional and
ethical standards and in compliance with all Applicable Laws, including laws and
professional ethical rules and requirements applying to the legal profession,
and requirements of the Agencies. It is expressly acknowledged by the Parties
that all Legal Services provided by the Firm shall be performed solely by
licensed attorneys or under the direct supervision and control of licensed
attorneys. Each of the attorneys working for the Firm shall be licensed to
practice law in the State of Florida, and any other state or federal district in
which such attorney renders Legal Services. The Firm shall require that all
attorneys who are licensed and in good standing as lawyers with the applicable
licensing authorities in one or more states and who perform the Practice of Law
who are employees of the Firm comply with Applicable Laws, including, but not
limited to, all applicable ethical standards and rules of professional
responsibility relating to the Practice of Law.
4.6 Maintenance of Malpractice Insurance. During the term of this Agreement and
any extensions or renewals thereof, and except as otherwise provided herein, the
Firm shall maintain legal malpractice insurance policies (the “Malpractice
Insurance Policies”) in at least the same amount as provided for by the Firm’s
current Malpractice Insurance Policies issued by an insurance carrier with an
A.M. Best rating of “A” or better. The Firm represents and warrants that the
Malpractice Insurance Policies are in full force and effect and the Firm is not
in default under any of them and no claim for coverage thereunder has been
denied under any such current Malpractice Insurance Policies with respect to any
matter. At the request of the Default Specialist from time to time, the Firm
shall furnish the Default Specialist with a copy of the certificate of insurance
evidencing the coverage under such Malpractice Insurance Policies and the Firm
agrees that no such Malpractice Insurance Policies may be cancelled or the
amount of coverage under such Malpractice Insurance Policies reduced without
thirty (30) days prior written notice to the Default Specialist.
ARTICLE V
AFFIRMATIVE COVENANTS OF THE DEFAULT SPECIALIST
5.1 Hiring and Maintenance of Default Specialist Workforce; Compensation. The
Default Specialist shall employ or otherwise retain and be responsible for
selecting, hiring, training and supervising all personnel necessary or
appropriate for the operation of the Default Specialist and the provision of
Mortgage Default Services to the Firm (the “Default Specialist Workforce”). All
employee and employment benefit matters shall be the responsibility of the
Default Specialist, including, but not limited to, the number, nature, type and
compensation of the Default Specialist Work Force and all administrative or
governmental filings regarding employment. The Default Specialist shall have
sole responsibility for the Employee Expenses (including any such expenses
associated with the Default Specialist’s employment of the Restricted Party).
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

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5.2 Office Products. The Default Specialist shall provide, at its sole expense,
all Office Products to its employees in connection with its obligations under
this Agreement, and shall have sole responsibility for the maintenance and
insurance of such personalty, subject to the terms of the Sublease Agreements.
5.3 Performance of Mortgage Default Services. Default Specialist shall perform
the Mortgage Default Services in a manner substantially consistent with the
historical practices of the Firm.
5.4 Prohibition Against Providing Legal Services. The Parties acknowledge that
the Default Specialist is not authorized or qualified to engage in any activity
which under Applicable Laws may only be performed by licensed attorneys and that
nothing herein shall be construed as permitting or authorizing the Default
Specialist to provide Legal Services to Clients. Notwithstanding anything to the
contrary in this Agreement, to the extent any act or service required of the
Default Specialist is construed or deemed to constitute the provision of Legal
Services, the Default Specialist is released from any obligation to provide, and
the Firm shall be deemed not to have requested the Default Specialist to
provide, such act or service.
5.5 Independence of the Firm. The Firm will be the exclusive provider of Legal
Services to Clients under this Agreement and the Firm shall have complete and
absolute control over the methods by which the Practice of Law is conducted by
the Firm. All matters involving the internal management, control, or finances of
the Firm shall remain the sole responsibility of the Firm and its partners, and
the Default Specialist shall have no authority whatsoever over the Firm as it
relates to its Practice of Law.
5.6 Maintenance of E & O Insurance. During the term of this Agreement and any
extensions or renewals thereof, the Default Specialist shall maintain errors and
omissions insurance policies with policy limits of at least $5 million per
occurrence and $5 million in the aggregate, issued by an insurance carrier with
an A. M. Best rating of “A” or better.
ARTICLE VI
CERTAIN COVENANTS OF BOTH PARTIES
6.1 Records. The Parties shall maintain accurate books and records regarding the
provision of Mortgage Default Services to the Firm by the Default Specialist, in
compliance with all Applicable Laws, and shall retain such records for not less
than five (5) years or for such longer period as may be required under
Applicable Law, including any securities laws applicable to Default Specialist
or its Affiliates.
6.2 Transition to Veritas. The Firm shall use its commercially reasonable
efforts to cooperate with the Default Specialist in the adaptation of the
Veritas Software for use by the Firm after the Effective Date.
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

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ARTICLE VII
CONFIDENTIALITY; INTELLECTUAL PROPERTY
7.1 Protection of the Default Specialist’s Confidential Information.
(a) Confidential Information. All confidential information, proprietary
information and rights, and trade secrets of the Default Specialist (the
“Default Specialist Confidential Information”), shall be safeguarded and treated
as confidential by the Firm. Default Specialist Confidential Information
includes, but is not limited to, records, files, electronic records, documents,
bulletins, publications, manuals, financial data and information, marketing
plans and proposals, accounting control procedures and any information relating
to and concerning the identity of customers, prospects, suppliers, employees and
manner of operations of the Default Specialist. Default Specialist Confidential
Information shall also include specifications, software code (including, but not
limited to, the Veritas Software program owned by the Default Specialist),
design, materials, documentation, flow charts, diagrams, schematics, data,
databases, and business and production methods and techniques of the Default
Specialist and all other confidential information, proprietary information and
rights, and trade secrets of the Default Specialist. However, the Work Product,
Work-in-Process and Client files of the Firm shall not in any event constitute
Default Specialist Confidential Information.
(b) Nondisclosure of Confidential Information. The Firm recognizes and
acknowledges that the Default Specialist Confidential Information is valuable,
special and unique and that the protection of Default Specialist Confidential
Information is critical to the Default Specialist and its ability to maintain
its competitive advantage over its competitors. In furtherance thereof, the Firm
shall use Default Specialist Confidential Information solely in conjunction with
this Agreement. Without the express written consent of the Default Specialist,
the Firm shall not at any time disclose or use Default Specialist Confidential
Information to any Person except in furtherance of this Agreement.
(c) Disclosure under Court Order. Notwithstanding the foregoing restrictions,
the Firm may use and disclose any Default Specialist Confidential Information to
the extent required by an order of any Governmental Body, but only after the
Default Specialist has been so notified and has had the opportunity, if
possible, to obtain reasonable protection for such information in connection
with such disclosure, or in connection with any dispute between the Firm and the
Default Specialist. The Firm shall cooperate fully with the Default Specialist
in connection with obtaining any protective order or other appropriate remedy.
7.2 Protection of Firm Confidential Information.
(a) Confidential Information. All confidential information, proprietary
information and rights and trade secrets of the Firm (“Firm Confidential
Information”), shall be safeguarded and treated as confidential by the Default
Specialist. Firm Confidential Information includes, but is not limited to any
records, files, electronic records, documents, bulletins, publications, manuals,
financial data and information, marketing plans and proposals, accounting
control procedures, information relating to Clients, customers, prospects,
suppliers, employees and manner of operations of the Firm, Work Product,
Work-in-Process and any information of or pertaining to a Client that is
confidential or privileged pursuant to any contract, statute, regulation, rule,
code or legal precedent. Firm Confidential Information shall also include
specifications, software code (including, but not limited to, the PREO
Software), design, materials, documentation, flow charts, diagrams, schematics,
data, databases and business and production methods and techniques of the Firm
and all other confidential information, proprietary information and rights and
trade secrets of the Firm.
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

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(b) Nondisclosure of Confidential Information. The Default Specialist recognizes
and acknowledges that Firm Confidential Information is valuable, special and
unique and that the protection of Firm Confidential Information is critical to
the Firm. In furtherance thereof, the Default Specialist shall use Firm
Confidential Information solely in conjunction with this Agreement. Without the
express written consent of the Firm, the Default Specialist shall not at any
time disclose or use Firm Confidential Information to any Person except in
furtherance of this Agreement.
(c) Disclosure under Court Order. Notwithstanding the foregoing restrictions,
the Default Specialist may use and disclose any Firm Confidential Information to
the extent required by an order of any Governmental Body, but only after the
Firm has been so notified and has had the opportunity, if possible, to obtain
reasonable protection for such information in connection with such disclosure.
The Default Specialist shall cooperate fully with the Firm in connection with
obtaining any protective order or other appropriate remedy.
7.3 Confidentiality of Third Party Information.
(a) Confidentiality of Third Party Confidential Information. The Parties
recognize that each Party has received and in the future may receive
confidential or proprietary information of Clients and other third parties and
such information is subject to a duty on the part of the recipient to maintain
the confidentiality of such information and to use it only for certain limited
purposes. The Parties agree at all times during the term of this Agreement and
thereafter, to hold such information in strictest confidence, and not to use it
or disclose it to any Person, except as necessary in connection with the Firm’s
performance of Legal Services, or the performance of Mortgage Default Services
by the Default Specialist, consistent with their respective agreements with, or
obligations under Applicable Law to, such Clients or other third parties.
(b) Covenant Against Disclosure. Each Party agrees to use commercially
reasonable efforts to safeguard the confidential material and to prevent the
unauthorized, negligent or inadvertent use or disclosure thereof.
7.4 Exceptions to Definition of Confidential Information. The obligations of the
Parties to treat any information as proprietary and confidential under this
Article VII shall not apply to information which (i) is publicly available or
(ii) is obtained from a third party that is not bound, to the knowledge of the
receiving party, by an obligation of confidentiality.
7.5 Remedies. The Parties acknowledge that disclosure of any confidential
material could give rise to irreparable injury to the Parties and that such
injury may be inadequately compensable in damages. Accordingly, the Firm or the
Default Specialist, as applicable, is entitled to obtain injunctive relief
against the breach or threatened breach of the undertakings set forth in
Sections 7.1, 7.2 and 7.3 without the posting of any bond or other security.
This relief shall not be exclusive of, and shall be in addition to, any other
remedies available at law or equity.
7.6 Ownership of Intellectual Property. The Firm acknowledges and agrees that
the Default Specialist owns the worldwide right, title, and interest in and to
any and all inventions, original works of authorship, findings, conclusions,
ideas, data, databases, flowcharts, scripts, discoveries, developments,
concepts, improvements, techniques, processes and know-how, whether or not
patentable or registrable under copyright or similar laws, created or developed
prior to the date of this Agreement which relate to the provision of Mortgage
Default Services including all patent rights, copyrights, trademarks, know-how
and trade secrets, or other intellectual property rights related thereto and all
modifications, improvements or changes thereto (the “Default Specialist
Intellectual Property”).
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

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7.7 License of the Default Specialist Intellectual Property. During the term of
this Agreement, the Default Specialist hereby grants the Firm a nonexclusive,
worldwide, and royalty-free license to use the Default Specialist Intellectual
Property for the benefit of Clients, subject to the following terms, conditions,
and restrictions:
(a) The license granted pursuant to this Section 7.7 authorizes only the Firm
and its authorized employees and any agents or contractors to use the Default
Specialist Intellectual Property.
(b) No part or portion of the Default Specialist Intellectual Property may be
sublicensed, copied, reproduced or duplicated by any means, or translated into
machine language by the Firm, without the prior express written permission of
the Default Specialist, except that the Firm may make those copies of the
Default Specialist Intellectual Property necessary for non-productive back-up
purposes only.
(c) The Firm’s license and right to use the Default Specialist Intellectual
Property under the terms of this Agreement shall commence on the Effective Date
and shall continue until the termination of this Agreement.
7.8 No License of PREO Software. Nothing herein shall grant to the Default
Specialist any license or other right to use the PREO Software and the Default
Specialist acknowledges and agrees that it has no right, title or interest of
any kind in the PREO Software.
7.9 Disclosure. Notwithstanding anything in this Agreement which may imply the
contrary, the Default Specialist and its Affiliates may (i) disclose the
existence of this Agreement and the terms and conditions hereof and/or (ii) file
a copy of this Agreement, to the extent determined by Default Specialist and its
Affiliates to be required by Applicable Law, including, but not limited to, any
applicable securities laws or stock exchange requirements.
ARTICLE VIII
RESTRICTIVE COVENANTS
8.1 Restrictive Covenants of the Firm. As additional consideration for the
Default Specialist entering into this Agreement with the Firm and as additional
consideration for the Default Specialist to purchase the Purchased Assets and to
assume the Assumed Liabilities from the Firm pursuant to the Purchase Agreement,
the Firm and the Restricted Party covenant with the Default Specialist as
follows (with such covenants being collectively referred to below as the
“Restrictive Covenants”):
(a) Non-Compete. During the term of this Agreement (including any extensions or
renewals thereof), and for a period of two (2) years following termination of
this Agreement (the “Restricted Period”), none of the Firm, the Restricted Party
or any of their respective Affiliates shall directly or indirectly, without the
prior written consent of the Default Specialist, purchase, join, control, invest
in, organize, start or form, or contract with, any business or Person that will
provide Mortgage Default Services anywhere in the State of Florida (the
“Territory”). In addition, during the Restricted Period, the Firm shall be
prohibited from effecting a merger or consolidation of the Firm with or into any
other entity which is effected with a principal purpose of acquiring Mortgage
Default Services capabilities for the Firm. Notwithstanding the foregoing,
nothing contained in this Section 8.1(a) shall restrict, in any way, the Firm’s
or the Restricted Party’s ability to provide or perform Legal Services to
Clients of the Firm.
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

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(b) Non-Solicitation. During the Restricted Period, without the prior written
consent of the Default Specialist, none of the Firm, the Restricted Party, or
any of their respective Affiliates shall, direct or indirectly, whether alone or
in connection with any other Person, hire, recruit or employ, or solicit or
otherwise seek to hire, recruit, or employ, any employee or independent
contractor of the Default Specialist (i) who is then employed or engaged by the
Default Specialist or (ii) who was employed or engaged by the Default Specialist
within the six (6) month period prior to such contact.
8.2 Blue-Pencil. If any court of competent jurisdiction or any other
Governmental Body shall at any time deem the term of any particular restrictive
covenant contained in Section 8.1 too lengthy or the Territory too extensive,
the other provisions of this Article VIII shall nevertheless stand, and the
Restricted Period and/or the Territory shall be reduced to such duration or size
as such court or Governmental Body shall determine to be permissible.
8.3 Remedies. The Firm and the Restricted Parties each acknowledge that any
breach of any of the Restrictive Covenants could give rise to irreparable injury
to the Default Specialist and that such injury may be inadequately compensable
in damages. Accordingly, the Parties agree that the Default Specialist shall be
entitled to obtain injunctive relief against the breach or threatened breach of
the undertakings set forth in Section 8.1 without the posting of any bond or
other security. This relief shall not be exclusive of, and shall be in addition
to, any other remedies available at law or equity.
ARTICLE IX
TERM AND TERMINATION
9.1 Initial Term. The initial term of this Agreement shall be for a period of
twenty (20) years, commencing as of the date hereof and ending at midnight on
the twentieth anniversary of the date hereof (the “Initial Term”).
9.2 Automatic Ten Year Extensions. This Agreement shall be automatically
extended for up to two (2) separate and successive ten (10) year periods (with
each such successive ten (10) year period being referred to herein as an
“Extended Term”) unless, and only if at least one (1) year prior to the
expiration of the Initial Term or, if applicable, at least one (1) year prior to
the expiration of the Extended Term then in effect, either Party shall give the
other written notice of its intention not to extend the Initial Term or, if
applicable, the Extended Term then in effect.
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

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9.3 Termination for Breach. Upon any Party hereto (the “Non-breaching Party”)
becoming aware of a Material Breach of this Agreement by any other Party (the
“Breaching Party”), the Non-breaching Party shall provide to the Breaching Party
a written notice describing such Material Breach. The Breaching Party shall have
a sixty (60) day period within which to cure such Material Breach. If the
Breaching Party has not cured such Material Breach within such period, the
Non-breaching Party may terminate this Agreement. Nothing in this Section 9.3
shall prejudice or otherwise restrict the Non-breaching Party in the exercise of
any of its other remedies under this Agreement or Applicable Law.
9.4 Termination for Insolvency. In the event a Party shall become Insolvent, the
other Party hereto may immediately terminate this Agreement upon written notice
to the Insolvent Party.
9.5 Provisions Applicable Upon Any Termination of this Agreement.
(a) Payment of Fees. Notwithstanding any contrary provision contained in this
Agreement, upon the expiration of the Initial Term or any Extended Term of this
Agreement, or upon any earlier termination of this Agreement pursuant to any of
the termination provisions contained in this Agreement, the Default Specialist
shall continue to collect and receive all compensation, reimbursement, and
payment due for all Mortgage Default Services provided prior to the effective
date of the expiration or the termination of this Agreement.
(b) Default Specialist Proprietary Information. Upon any termination of this
Agreement, the Firm shall immediately discontinue the use of and shall promptly
return all Default Specialist Confidential Information that has been made
available to the Firm by reason of participation herein and shall return all
such property, together with any copies thereof in its possession, to the
Default Specialist.
(c) Firm Proprietary Information. Upon any termination of this Agreement, the
Default Specialist shall immediately discontinue the use of and shall promptly
return all Firm Confidential Information that has been made available to the
Default Specialist by reason of participation herein and shall return all such
property, together with any copies thereof in its possession, to the Firm.
(d) Access to Records. The Firm shall provide to the Default Specialist access,
at reasonable times and upon reasonable request, to records relating to the
Legal Services provided in connection with any Mortgage Default Services the
Default Specialist performed for the Firm, for a period ending one year after
the later of (i) expiration of the applicable statute of limitations for any
claim which may be asserted against the Default Specialist arising from the
activities pursuant to this Agreement, or (ii) conclusion of all matters
relating to such claim.
(e) Return of Work Product. Upon termination of this Agreement, or upon any
Client’s earlier request, the Firm will ensure, and the Default Specialist will
cooperate with the Firm in ensuring, that all Work Product and Work-in-Process,
or any lesser part designated by the Firm or any Client in writing, shall be
returned by the Default Specialist to the Firm or such Client (it being
understood and agreed that the Default Specialist shall have no obligation to
return any work product developed or arising out of the clerical, technical,
administrative and other non-legal services performed by it pursuant to the
terms hereof).
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

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ARTICLE X
CHANGES
10.1 Changes. In the event (a) any Applicable Laws or any interpretations
thereof, or any requirements of Clients, Agencies or Investors at any time
during the term of this Agreement are modified, implemented, threatened to be
implemented, or determined to prohibit, restrict or in any way materially change
the method of providing or paying for Mortgage Default Services as described in
or contemplated by this Agreement, or (b) the manner of providing Mortgage
Default Services, including the nature of the relationship or services involved
in foreclosures that are the subject of the Mortgage Default Services, is
required to change in any material respect to meet market demands for services
of the type rendered by the Firm, which change, in either case, has or could
reasonably be expected to have a material adverse effect on the ability of
either the Firm or the Default Specialist to engage in commercial activity
consistent with and in furtherance of its business plans (all of the foregoing
being hereinafter collectively referred to as “Changes,” and individually, a
“Change”), then the Parties to this Agreement shall negotiate in good faith to
amend this Agreement as necessary to provide for procurement of services and
payment hereunder, while at the same time preserving the economic expectations
of the Parties as set forth herein, to the fullest extent reasonably possible.
To the extent any act or service required of the Default Specialist in this
Agreement should be construed or deemed, by any Applicable Law or Governmental
Body to constitute the provision of Legal Services, the performance of said act
or service by the Default Specialist shall be deemed waived and forever
unenforceable and the provisions of this Section 10.1 shall be applicable.
Neither Party shall claim or assert illegality as a defense to the enforcement
of this Agreement or any provision hereof; instead, any such purported
illegality shall be resolved pursuant to the terms of this Section 10.1.
ARTICLE XI
INDEPENDENT RELATIONSHIP
11.1 Independent Contractor Status. Each of the Parties acknowledges that each
is an independent contractor and not an agent, employee or representative of the
other. This Agreement shall not create any partnership or joint venture between
the Parties.
11.2 No Referral Arrangements. The Parties hereby acknowledge and agree that no
benefits to the Default Specialist hereunder require or are in any way
contingent upon the recommendation, referral or any other arrangement by the
Default Specialist for the provision of any Legal Services or other service
offered by the Firm.
11.3 No Restriction on the Default Specialist Expansion. The Default Specialist
(and its Affiliates) may from time to time (i) be engaged by the Firm and any
other Person to perform services which are not included in or related to the
Mortgage Default Services, or (ii) invest in or engage in businesses wholly
unrelated to the Mortgage Default Services; provided, however, the Default
Specialist shall not provide any Legal Services. Nothing in this Agreement shall
be construed to preclude the Default Specialist from providing services the same
as or similar to those provided under this Agreement to other customers of the
Default Specialist during the term of this Agreement; provided, however, that,
during the Exclusivity Term only, the Default Specialist may only provide
Mortgage Default Services within the Territory to the Firm.
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

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11.4 Referrals From Others than the Firm. The Default Specialist may from time
to time (i) be engaged by other Persons to perform Mortgage Default Services;
(ii) enter into agreements similar to this Agreement with other Persons; and
(iii) enter into co-engagements with other law firms which will provide Legal
Services for the Default Specialist customers, in all cases without the
necessity of obtaining approval from the Firm, except that during the
Exclusivity Term, any such actions described in clauses (i), (ii) and (iii) in
this Section 11.4 which are proposed to be taken by the Default Specialist in
the Territory shall require the prior written approval of the Firm.
ARTICLE XII
INDEMNIFICATION; LIMITATIONS OF LIABILITY
12.1 No Consequential Damages. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL OR SIMILAR DAMAGES EVEN IF
THE LIKELIHOOD OF SUCH DAMAGES IS KNOWN TO SUCH PARTY.
12.2 Costs of Enforcement. If either Party files suit in any court against the
other Party to enforce the terms of this Agreement against the other Party or to
obtain performance by the other Party hereunder, the Prevailing Party will be
entitled to recover all reasonable costs, including Reasonable Attorneys’ Fees,
from the other Party as part of any judgment in such suit. The term “Prevailing
Party” shall mean the Party in whose favor final judgment after appeal (if any)
is rendered with respect to the claims asserted in the complaint.
12.3 Force Majeure. No Party hereto shall be liable for delay or default in
performing hereunder (other than a delay or default in payment of any monies due
to the other Party) if such performance is delayed or prevented by a Force
Majeure Condition.
12.4 Indemnification of the Firm by the Default Specialist. Subject to the
limitations of Sections 12.1 and 12.7, the Default Specialist shall indemnify,
defend and hold harmless the Firm and its officers, directors, employees,
members, and equityholders from and against any claims, damages, losses,
liabilities, costs and expenses, including Reasonable Attorneys’ Fees
(collectively, the “Firm Damages”) arising out of or incurred in connection with
(i) the failure of the Default Specialist to perform the Mortgage Default
Services in accordance with this Agreement, including any Firm Damages incurred
by the Firm arising out of the Default Specialist’s obligations under Article V
above, (ii) any breach of this Agreement by the Default Specialist, or (iii) any
disclosure of Firm Confidential Information; provided, however, that the Default
Specialist will not be liable for indemnification hereunder to the extent that
the claim, damage, loss, liability, or expense results from the willful
misconduct or negligence of the Firm or any of its officers, directors,
employees, members, and equityholders; and provided, further, that the maximum
obligations for Firm Damages under this Section 12.4 shall be limited to Five
Hundred Thousand Dollars ($500,000) per action or omission that gives rise to
any such indemnification claim and an aggregate cap totaling Five Million
Dollars ($5,000,000) during the entire term of this Agreement, including the
Initial Term and any Extended Term. Such right of indemnification under this
Section 12.4 will survive the termination of this Agreement.
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

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12.5 Indemnification of the Default Specialist by the Firm. Subject to the
limitations of Sections 12.1 and 12.7, the Firm acknowledges that the Firm is
responsible for the supervision, as may be required by Applicable Law, of the
employees of the Default Specialist providing Mortgage Default Services to the
Firm on behalf of the Clients pursuant to this Agreement. The Firm shall
indemnify, defend and hold the Default Specialist and its officers, directors,
employees, members, and equityholders harmless from and against any claims,
damages, losses, liabilities, costs and expenses, including Reasonable
Attorneys’ Fees which may be imposed upon, incurred by or asserted against the
Default Specialist or such other indemnified Persons in any manner arising out
of (i) the provision of Mortgage Default Services by the Default Specialist to
the Firm pursuant to this Agreement in connection with the failure of an
attorney employed by the Firm to properly supervise the employees of the Default
Specialist or as a result of complying with such supervising attorney’s
direction or supervision, (ii) any breach of or default under any Engagement
Letter as a result of the referral of files by the Firm to the Default
Specialist pursuant to this Agreement, (iii) any breach of this Agreement by the
Firm, (iv) any disclosure of Default Specialist Confidential Information,
(v) any disclosure of any information contained in any file or otherwise
disclosed by the Firm or its employees or agents in contravention or violation
of any Engagement Letter, Applicable Law or other obligation to any other Person
or (vi) the access provided to, or the use of, any software and assets owned or
licensed by the Firm to the Default Specialist in contravention or violation of
(A) any contract, license, lease, agreement or other arrangement to which the
Firm is a party or is subject to or (B) Applicable Law; provided that, the Firm
will not be liable for indemnification hereunder to the extent that the claim,
damage, loss, liability or expense results from the willful misconduct or
negligence of the Default Specialist or any of its officers, directors,
employees, members and equityholders (other than by the Restricted Party in his
capacity as an officer and employee of the Default Specialist). Such right of
indemnification under this Section 12.5 will survive the termination of this
Agreement, and shall be limited to Five Hundred Thousand Dollars ($500,000) per
action or omission that gives rise to any such indemnification claim and an
aggregate cap totaling Five Million Dollars ($5,000,000) during the entire term
of this Agreement, including the Initial Term and any Extended Term.
12.6 Indemnification Procedures. Promptly upon becoming aware of any matter
which is subject to the provisions of Sections 12.4 or 12.5 (a “Claim”), any
Person seeking indemnification (an “Indemnified Party”) must give notice of the
Claim to the other Party (the “Indemnifying Party”), accompanied by a copy of
any written documentation regarding the Claim received by the Indemnified Party.
The Indemnified Party shall also provide reasonable cooperation and information
to assist the Indemnifying Party in the defense or settlement of any Claim. If
the Indemnified Party fails to notify the Indemnifying Party of the Claim
promptly or to provide reasonable cooperation and information to defend or
settle the Claim, the Indemnifying Party shall not be required to indemnify the
Indemnified Party to the extent that such failure prejudices the Indemnifying
Party’s ability to defend or settle the Claim. The Indemnifying Party, at its
sole option, may take whatever action it deems reasonable and appropriate in the
handling, defense, or settlement of any Claim, subject to the terms of any
applicable insurance policy. The Indemnifying Party will notify the Indemnified
Party in writing of any proposed settlement of a Claim, and shall not settle any
Claim without the prior written consent of the Indemnified Party, which such
consent shall not be unreasonably withheld, conditioned or delayed. The
Indemnified Party shall not settle any Claim without the prior written consent
of the Indemnifying Party.
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

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12.7 Limitation on Indemnification. No claim for indemnification by an
Indemnified Party pursuant to Sections 12.4 or 12.5 shall be payable unless and
until the aggregate amount of all Damages incurred by the Indemnified Party
under Sections 12.4 or 12.5 exceeds Twenty-Five Thousand Dollars ($25,000.00),
after which the Indemnified Party may seek indemnification for the full amount
of such claims.
12.8 Sole and Exclusive Remedy. Except as otherwise expressly set forth in this
Agreement, the Parties agree that the indemnification set forth in this
Article XII shall be the sole and exclusive remedy for breaches of the
representations, warranties, covenants and agreements described herein.
ARTICLE XIII
MISCELLANEOUS
13.1 No Other Agreement. The terms and conditions set forth in this Agreement
are those adopted by the Parties after extensive study and discussion and
supersede all other agreements, contracts, statements, courses of conduct, and
expressions of intent which may have previously existed between the Parties.
This Agreement, including the appendices, Schedules and Exhibits attached hereto
and made a part hereof for all purposes, represent the entire agreement between
the Parties with respect to the subject matter herein.
13.2 Notices. All notices, requests, demands, waivers and other communication
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given if (a) delivered personally; (b) sent by
registered or certified mail, return receipt requested, postage prepaid; or
(c) sent by next-day or overnight courier or delivery to the applicable address
set forth below, as set forth below or, in each case, at such other address as
may be specified in writing to the other Party:
If to the Default Specialist:
American Processing Company, LLC
c/o Dolan Media Company
Attn : James P. Dolan
222 South Ninth Street, Suite 2300
Minneapolis, Minnesota 55402
with a copy to:
Katten Muchin Rosenman LLP
Attn: Walter S. Weinberg, Esq.
525 West Monroe Street
Chicago, Illinois 60661-3693
If to Firm:
Albertelli Law
Attention: James E. Albertelli
208 North Laura Street, Suite 900
Jacksonville, Florida 32202
with a copy to:
Smith Hulsey & Busey
Attention: Stephen D. Moore, Jr., Esq.
225 Water Street, Suite 1800
Jacksonville, Florida 32202
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

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All such notices, requests, demands, waivers and other communications shall be
deemed to have been received (x) if by personal delivery on the date after such
delivery, (y) if by certified or registered mail, on the third business day
after the mailing thereof or (z) if by next-day or overnight courier or
delivery, on the date of such delivery.
13.3 Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to its
conflict of laws principles.
13.4 Captions. The captions used in this Agreement are for convenience of
reference only and do not constitute a part of this Agreement and will not be
deemed to limit, characterize or in any way affect the meaning or interpretation
of any provision of this Agreement, and all provisions of this Agreement will be
enforced and construed as if no caption had been used in this Agreement.
13.5 Severability. If any covenant, agreement, provision or term of this
Agreement is held to be invalid for any reason whatsoever, then such covenant,
agreement, provision or term will be deemed severable from the remaining
covenants, agreements, provisions and terms of this Agreement and will in no way
affect the validity or enforceability of any other provision of this Agreement.
13.6 Due Authorization. Each Party warrants that the terms of this Agreement and
its execution, delivery and performance have been duly authorized and approved
by all necessary action of each Party.
13.7 Counterparts. The Parties may execute this Agreement in separate
counterparts, each of which shall be deemed an original and all of which
together will constitute one and the same instrument. To the extent signed and
delivered by means of a facsimile machine or other electronic transmission
(including transmission in portable document format by electronic mail), this
Agreement shall be treated in all manners and respects and for all purposes as
an original and shall have the same binding legal effect as if it were the
original signed version thereof delivered in person. None of the undersigned
shall raise the use of a facsimile machine or other electronic transmission to
deliver a signature or the fact that such signature was transmitted or
communicated through the use of a facsimile machine or other electronic
transmission as a defense to the enforceability of this Agreement and each of
the undersigned forever waives any such defense.
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

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13.8 Amendments; Waivers. No amendment, modification or discharge of this
Agreement, and no waiver hereunder, shall be valid or binding unless set forth
in writing and duly executed by the Party against whom enforcement of the
amendment, modification, discharge or waiver is sought. Any such waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no way impair the rights of the Party granting such waiver
in any other respect or at any other time. Neither the waiver by either of the
Parties of a breach of or a default under any of the provisions of this
Agreement, nor the failure by either of the Parties, on one or more occasions,
to enforce any of the provisions of this Agreement or to exercise any right or
privilege hereunder, shall be construed as a waiver of any other breach or
default of a similar nature, or as a waiver of any of such provisions, rights or
privileges hereunder.
13.9 No Third Party Beneficiaries. Nothing in this Agreement shall confer any
rights upon any Person (except for Persons entitled to indemnification
hereunder) other than the Parties and their respective successors and permitted
assigns.
13.10 Assignment. This Agreement shall be binding upon and inure to the benefit
of the Firm and Default Specialist and their respective successors and assigns;
provided no such assignment shall relieve the assignor of its duties under this
Agreement. Without limiting the foregoing, the Parties agree that neither this
Agreement, nor any duties or obligations under this Agreement, shall be assigned
or transferred by either Party without the prior consent of the other.
13.11 No Strict Construction; Interpretation. The language used in this
Agreement will be deemed to be the language chosen by the Parties to express
their mutual intent and no rule of strict construction will be applied against
any Person.
13.12 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Parties and their respective successors and permitted assigns.
13.13 Arbitration. Except with respect to requests for injunctive or other
equitable relief, in the event of any claim, dispute or controversy arising out
of or related to this Agreement, the Default Specialist and the Restricted
Party, both on behalf of himself and the Firm, agree to hold a face-to-face
meeting at a mutually agreeable time and location to discuss and attempt to
resolve in good faith any such claim, dispute or controversy. If the Default
Specialist and the Restricted Party are unable to reach a consensual resolution
of any such claim, dispute or controversy, then either the Default Specialist or
the Restricted Party may request arbitration in accordance with the Commercial
Arbitration Rules of the AAA by providing the other Party with written notice
thereof. Any demand for arbitration hereunder must be filed in writing with the
other Parties to this Agreement and with the AAA. The Parties shall select the
arbitrator(s) according to the applicable AAA rules. Any arbitration proceedings
under this Agreement shall be conducted in the State of Delaware. Any award
rendered by an arbitrator shall be final, and judgment may be entered upon it in
accordance with applicable law in any court having jurisdiction. This
Section 13.13 shall be specifically enforceable in accordance with applicable
law in any court of competent jurisdiction. No undisputed payments due or
payable under this Agreement shall be withheld on account of potential or
pending arbitration proceedings.
[SIGNATURE PAGE FOLLOWS]
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

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IN WITNESS WHEREOF, the undersigned hereby execute this Services Agreement as of
the date first above written.

            AMERICAN PROCESSING COMPANY, LLC
      By:   /s/ David A. Trott         Name:   David A. Trott        Title:  
CEO and Chairman        JAMES E. ALBERTELLI, P.A.
      By:   /s/ James E. Albertelli         Name:   James E. Albertelli       
Title:   President        The undersigned hereby executes this Services
Agreement solely for purposes of making the commitments set forth in
Article VIII (Restrictive Covenants).
      /s/ James E. Albertelli       James E. Albertelli, individually   

PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

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