Exhibit 10.2

 

DOCUMENT SOLUTIONS DIVISION

EQUITY APPRECIATION RIGHTS PLAN

 

INTRODUCTION

 

WHEREAS, Altisource Solutions S.à r.l., a Luxembourg private limited liability
company (société à responsabilité limitée), having its registered office at 40,
avenue Monterey, L-2163 Luxembourg and registered with the Luxembourg register
of commerce and companies under number B 147268 (the “Parent,” and together with
its subsidiaries and Affiliates, “Altisource”), desires to motivate and retain
executives and employees of the Document Solutions division of the Parent (the
“Division”) as well as executives and employees of Affiliates providing services
to the Division; and

 

WHEREAS, pursuant to the authority of the 2009 Equity Incentive Plan (the “ASPS
Plan”) of Altisource Portfolio Solutions S.A., a Luxembourg public limited
liability company (société anonyme), having its registered office at 40, avenue
Monterey, L-2163 Luxembourg and registered with the Luxembourg register of
commerce and companies under number B 72391 (“ASPS”), and the approval of the
Board of Directors of ASPS or the Compensation Committee of the Board of
Directors of ASPS (collectively, the “Board”) the Board of Managers of the
Parent has duly authorized the adoption of this Document Solutions Division
Equity Appreciation Rights Plan (the “Plan”) pursuant to which Parent may from
time to time award rights to participate in any increase in value of the
Division (“Equity Appreciation Rights”) to Participants (as defined below).

 

NOW, THEREFORE, Parent hereby adopts this Plan pursuant to which it may award
Equity Appreciation Rights pursuant to Article III below, on the terms and
conditions described herein and in the applicable Award Agreement (as defined in
Section 3.1 below).

 

ARTICLE I

ADMINISTRATION OF THE PLAN

 

Section 1.1                                    Administrator.  The Plan shall be
administered by the Board, or its specified designees to the extent of the
authority properly delegated to them (each, the “Administrator”), which shall
have complete discretion and authority to interpret and construe the Plan and
any awards of Equity Appreciation Rights issued hereunder pursuant to Award
Agreements, to decide all questions of eligibility and benefits (including
underlying factual determinations), and to adjudicate all claims and disputes. 
The determination of the Administrator on any and all matters pertaining
directly or indirectly to the Plan, any Equity Appreciation Rights issued or
repurchased pursuant to the Plan, and/or any Award Agreement shall be final,
binding and conclusive on all interested parties.

 

Section 1.2                                    Administrative Rules.  Subject to
the provisions of this Plan, the Administrator may in its sole and absolute
discretion:

 

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(a)                                 adopt, amend and rescind rules and
regulations relating to the Plan;

 

(b)                                 determine the terms and provisions of the
respective awards of Equity Appreciation Rights, including provisions defining
or otherwise relating to (i) the duration of the awards, (ii) the effect of
termination of employment on continued benefits under the Plan, and (iii) the
effect of any approved leaves of absence on the rights to benefits under the
Plan;

 

(c)                                  make all determinations necessary or
advisable for administering the Plan, including but not limited to those
associated with any payment terms and conditions set forth under Article V of
the Plan, as well as any Appreciation Value, Base Value and Fair Market Value
relative to any award; and

 

(d)                                 correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in any Award Agreement in the manner
and to the extent it shall deem expedient to carry the Plan or Award Agreement
into effect, and it shall be the sole and final judge of such expediency
(clauses (a)-(d) hereof, the “Administrative Rules”).

 

For the avoidance of doubt, the determination of the Administrator on matters
pertaining to the Administrative Rules (including any and all discretionary
actions and interpretations of the Plan and any Award Agreements) may in all
cases be made in the best interests of Altisource on a consolidated basis, and
shall in all cases be final, binding, and conclusive on all interested parties.

 

Section 1.3                                    Administrator Determinations.  No
one acting as the Administrator (or any designee of the Administrator, including
without limitation any Board member, Manager or other designee of the Board) nor
anyone acting solely or with others as Administrator shall be liable, with
respect to the Plan or any Award Agreement, for any act, whether of commission
or omission, taken by any other member or by any officer, agent, manager, or
employee of the Parent or the Division and any one or more direct or indirect
Subsidiaries or Affiliates (as each such term is defined below) of the Parent or
the Division, or all, now or hereafter existing or, excepting circumstances
involving his or her own intentional or willful misconduct as the same is
determined by a court of competent jurisdiction in a final order or judgment
that is not subject to further appeal, for anything done or omitted to be done
by such person.  No one acting as the Administrator (including without
limitation any Board member, Manager or other designee of the Board) or anyone
acting solely or with others as Administrator shall have any fiduciary duties to
any Participants under this Plan or the Award Agreements or in connection with
the transactions contemplated hereby and thereby.

 

Section 1.4                                    Certain Definitions.  The
following terms shall have the meanings set forth below:

 

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“Affiliate” means, with respect to any specified Person, any other Person that
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person (with the
term “control” (including, with correlative meanings, the terms “controlling,”
“controlled by” and “under common control with”), as used with respect to any
Person, meaning the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through ownership of voting securities, by agreement or otherwise).

 

“Appreciation Value” means the accrual value of an (i.e., one) Exercised Right,
as determined in accordance with Section 5.2 of the Plan.

 

“Base Value” means, for each Participant, the Fair Market Value of an (i.e.,
one) equity unit of the Division, as specified in a Participant’s Award
Agreement, as determined by the Board as of the Grant Date (as specified in the
Participant’s Award Agreement) of the Equity Appreciation Right.

 

“Beneficiary” means the person or entity designated by the Participant, in a
form approved by the Division, to succeed to the Participant’s rights under an
Award Agreement or to receive payment or settlement under an award after the
Participant’s death.

 

“Company” means any corporate or other entity formed at any time to hold the
business or businesses comprising the Division. If a company is formed
subsequent to the date of this Plan, all references to the Division shall be
deemed references to the Company, and all references to the Board or Managers
shall include the Board and Managers of the Company.

 

“Exercise Notice” means a written notice to Parent pursuant to Section 5.1
hereof with respect to Exercised Rights.

 

“Fair Market Value” means the fair market value of any property (including
Equity Appreciation Rights and Share Equivalency Units), in all cases as
reasonably determined by the Administrator, as of a given time and as frequently
as the Administrator determines, based on any valuation methodology, facts and
circumstances it considers relevant, including but not limited to taking into
account or modifying (i) any businesses, operations, liabilities, or other
financial circumstances (whether or not directly associated with the Division)
of ASPS or any of its Affiliates or Subsidiaries; and/or (ii) any valuation
report, whether or not by an independent party, that the Administrator may, but
shall not be required to, obtain, which value when used to determine the Fair
Market Value of the Division, shall be reduced to the extent of any excess of
total pre-tax loss over pre-tax income of the Division as determined by the
Administrator in its sole discretion for the period commencing on the Grant Date
(as defined in the Participant’s Award Agreement) and ending on the date the
Fair Market Value determination is made, if any.

 

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“Person” means any individual, partnership, corporation, association, limited
liability company, trust, joint venture, unincorporated organization or entity,
or any government, governmental department or agency or political subdivision
thereof.

 

“Public Offering” means a firm commitment underwritten public offering of common
equity (or such equity securities as the Administrator determines most closely
approximates common equity) of the Company pursuant to an effective registration
statement under the Securities Act (or similar registration statement if
conducted in a jurisdiction other than the United States), other than pursuant
to a registration statement on Form S-4 or Form S-8 or any similar or successor
form.

 

“Qualified IPO” means the first Public Offering of common equity (or such equity
securities as the Administrator determines most closely approximates common
equity) of the Company, underwritten on a firm commitment basis by a nationally
recognized underwriter, pursuant to an effective registration statement under
the Securities Act, as amended, or similar rules of a non-U.S. jurisdiction.

 

“Sale of the Division” means (i) a sale (in a single transaction or in a series
of related transactions) to any non-Affiliated Person or Persons pursuant to
which such Person or Persons acquire all or substantially all of the assets of
the Division, or (ii) if a Company has been formed, a sale, disposition or other
transfer of any units of equity interests in the Company for value (in a single
transaction or in a series of related transactions) to any non-Affiliated Person
or Persons pursuant to which such Person or Persons acquire more than 50% of the
voting equity interests of the Company (whether by merger, consolidation, sale
or transfer of membership interests, reorganization, recapitalization or
otherwise).

 

“Share Equivalency Units” mean equity equivalent units in the Division that are
valued similar to Equity Appreciation Rights of the Division.

 

“Share Equivalency Unit Notice” means a notice with respect to Share Equivalency
Units issued pursuant to Section 5.1 hereof to Participant following an Exercise
Notice.

 

“Share Equivalency Unit Value” means an amount equal to the Fair Market Value of
an (i.e., one) Exercised Right as of the most recent Valuation Date before the
Payment Date.

 

“Subsidiary” means any Person that is controlled by, either directly or
indirectly, the Division or Parent (or other specified Person) (with the term
“control” (including, with correlative meanings, the terms “controlling,”
“controlled by” and “under common control with”), as used with respect to any
Person, meaning the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through ownership of voting securities, by agreement or otherwise).

 

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“Valuation Date” means any date or dates that the Administrator shall in its
sole and absolute discretion designate; provided that (i) the Administrator may
not designate a Valuation Date retroactively, and (ii) unless the Administrator
decides otherwise before the end of a calendar year in which the Plan is
effective, the last day of such year shall be a Valuation Date.

 

“Window Period” means a period of twenty-eight (28) days following the
Administrator’s written notice to Participants following any Valuation Date, or
such other period as the Administrator shall in its sole and absolute discretion
decide.

 

Section 1.5                                    Other Definitions. Each of the
following terms is defined in the Section set forth opposite such term:

 

Term

 

Section

 

 

 

Administrative Rule

 

1.2(d)

Administrator

 

1.1

Aggregate Approved Sale Consideration

 

5.5(b)

Altisource

 

Introduction

Approved Sale

 

5.5(a)

ASPS

 

Introduction

ASPS Plan

 

Introduction

Award Agreement

 

3.1

Board

 

Introduction

Division

 

Introduction

Drag-Along Right

 

5.5(a)

Equity Appreciation Rights

 

Introduction

Exercised Rights

 

5.1

Individual Representation

 

5.5(b)

Offer Date

 

5.1

Parent

 

Introduction

Participant

 

3.1

Payment Date

 

5.3

Plan

 

Introduction

Rejection Date

 

5.3

Relative FMV Amount

 

5.5(b)

 

 

 

 

ARTICLE II

EQUITY APPRECIATION RIGHTS AVAILABLE FOR ISSUANCE

 

Section 2.1                                    Number of Equity Appreciation
Rights Issuable.  A pool of 15,000,000 Equity Appreciation Rights shall be
reserved for issuance under the Plan, which number shall automatically be
reduced upon the exchange of Equity Appreciation Rights for Share

 

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Equivalency Units (as defined below) pursuant to Article V hereof by an amount
equal to the aggregate number of Exercised Rights (as defined below) exchanged
in such transaction. The pool of 15,000,000 Equity Appreciation Rights initially
represents 15% of the right to the increase in the value of the Division over
the Base Value.

 

Section 2.2                                    Increase in Rights Issuable.  The
Board may, from time to time in its discretion, increase the number of Equity
Appreciation Rights available for issuance under the Plan, within the limits of
Luxembourg law. Nothing in this Plan shall be construed as to give any
Participant any pre-emptive, subscription or similar rights, nor shall
Participants be entitled to adjustments (e.g., additional Equity Appreciation
Rights to prevent dilution) to the extent the number of Equity Appreciation
Rights (or similar rights) available for issuance under the Plan (or any other
ASPS or Company equity incentive plan or other grant) is increased.

 

ARTICLE III

ELIGIBILITY AND PARTICIPATION UNDER THE PLAN

 

Section 3.1                                    Grant of Awards; Eligibility. 
Awards of Equity Appreciation Rights may be granted by the Administrator to any
employee, manager, officer or director of Altisource that is selected by the
Administrator to participate in the Plan, and may be conditioned on payment to
the Division of a designated price for the Equity Appreciation Rights.  Each
award of Equity Appreciation Rights granted pursuant to the Plan shall be
evidenced by an Award Agreement, executed by the Parent and the Altisource
employee, manager, officer, or director (the “Participant”) to whom the award is
granted (an “Award Agreement”), specifying the number of Equity Appreciation
Rights awarded to the Participant and incorporating such terms as the
Administrator shall deem necessary or desirable.

 

Section 3.2                                    Effect of Adoption.  The adoption
of the Plan shall not be deemed to give any person a right to be granted Equity
Appreciation Rights under the Plan except as explicitly set forth in an Award
Agreement.

 

ARTICLE IV

VESTING OF AWARDS GRANTED UNDER THE PLAN

 

Section 4.1                                    Vesting.  The Equity Appreciation
Rights granted to a Participant under this Plan (and any associated cash or
share-based dividends except to the extent an Award Agreement provides
otherwise) shall “Vest” (as such term is defined in the applicable Award
Agreement with the Participant) in accordance with the terms and conditions set
forth in the applicable Award Agreement with the Participant.  The Administrator
shall have sole and absolute discretion to determine whether or not, when, and
the extent to which a Participant has Vested under any Award Agreement. 
Notwithstanding the fact that any Equity Appreciation Right has become Vested,
no Participant may sell, assign or transfer any Equity Appreciation Right, other
than as provided herein or in the applicable Award Agreement.

 

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Section 4.2                                    No Right to Employment.  Nothing
in this Plan, nor any grant of Equity Appreciation Rights hereunder, shall
confer upon any Participant any right to continue in the employ of Altisource or
interfere in any way with the right of Altisource to terminate a Participant’s
employment at any time, and nothing contained herein shall be deemed a waiver or
modification of any provision contained in any other agreement between a
Participant and Altisource (including the Division, the Parent and ASPS).

 

ARTICLE V

PAYMENT RIGHTS AND OBLIGATIONS

 

Section 5.1                                    Exercise Rights.  At any time
within a Window Period after the date on which a Participant has Vested in an
Equity Appreciation Right (and before its expiration or forfeiture) pursuant to
the terms of an applicable Award Agreement, the Participant may provide an
Exercise Notice setting forth the number of Vested Equity Appreciation Rights
that the Participant is irrevocably offering to have the Parent or the Division
redeem (the “Exercised Rights”) in exchange for payment pursuant to the terms
and conditions of Section 5.2 below.  The Parent may require the Participant to
submit an Exercise Notice for the Exercised Rights electronically through the
Shareworks system or any other online system pursuant to the procedures set
forth therein as determined by the Parent in its sole discretion.  The business
day on which the Parent receives an Exercise Notice (whether or not submitted
electronically) shall be the “Offer Date” for such Exercised Rights. Within
fourteen (14) calendar days of the Offer Date, the Parent will provide the
Participant with a Share Equivalency Unit Notice, stating the number of Share
Equivalency Units that Participant is entitled to as a result of the Exercise
Notice. The Participant shall be entitled to a number of Share Equivalency Units
equal to the aggregate Appreciation Value (determined as set forth in
Section 5.2 below) of the Exercised Rights divided by the Fair Market Value of
one Equity Appreciation Right as of the most recent Valuation Date prior to the
Offer Date.

 

Section 5.2                                    Determination of Appreciation
Value.  The Appreciation Value for each Exercised Right shall be determined by
the Administrator and shall equal the Fair Market Value of an Exercised Right
minus the Base Value of the Exercised Right. The aggregate Appreciation Value
shall be determined by multiplying the Appreciation Value of an Exercised Right
by the total number of the Exercised Rights.

 

Section 5.3                                    Payment of Share Equivalency Unit
Value.  Subject to the terms and conditions set forth in this Article V, on the
date six months and one day after any Offer Date for any Exercised Rights (the
“Payment Date”), the Division (or Parent or an Affiliate, as applicable) shall
redeem the Share Equivalency Units that Participant holds by paying the
Participant an amount equal to the Share Equivalency Unit Value multiplied by
the number of Share Equivalency Units that Participant is entitled to as set
forth in the applicable Share Equivalency Unit Notice received by Participant.
Payment of the aggregate Share Equivalency Unit Value to which Participant is
entitled under this Section 5.3 shall be made on or after the

 

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Payment Date in one or more of the following forms, which form will be selected
by the Administrator in its sole discretion:

 

(a)                                 Cash payable by wire transfer of immediately
available funds to an account designated by the Participant to the Division in
writing;

 

(b)                                 That number of shares of common stock of
ASPS pursuant to the ASPS Plan (or such successor plan as may be approved by
ASPS shareholders) determined by dividing the aggregate payment due by the
average of the high and low trading price of the ASPS common stock on the first
trading day following Payment Date; or

 

(c)                                  If a Company has been formed, that number
of common shares of the Company or such equity securities of the Company as the
Board determines most closely approximates common equity determined by dividing
the aggregate payment due by the Fair Market Value of a share or equity security
as determined by the Board.

 

In the case of clauses (b) or (c) above, cash will be paid for any fractional
share or security otherwise issuable to Participant.

 

Notwithstanding the foregoing, if any payment to be made under this Section 5.3
would, in the Administrator’s determination at its sole discretion, materially
impair or jeopardize the ability of the Division, the Parent, ASPS or any of
their respective Affiliates to meet current or projected cash-flow and/or
liquidity needs, to limit ASPS shareholder dilution, to avoid a pro-forma breach
of any covenants in any of their credit agreements or other financing documents,
or to operate as a going concern, then the Administrator may in its discretion
reject the Participant’s offer made pursuant to the Exercise Notice at any time
before the tentative Payment Date (the “Rejection Date”), in which event the
Participant’s Equity Appreciation Rights subject to the rejected Exercise Notice
shall be reinstated according to the same terms and conditions in effect
immediately before the Offer Date and the Participant may not present the Parent
with another Exercise Notice with respect to the rejected Exercised Rights
sooner than the six-month anniversary of the Rejection Date. To the extent
payment to be made under this Section 5.3 would jeopardize the ability of the
Division, the Parent, ASPS or any of their respective Affiliates to meet current
or projected cash-flow and/or liquidity needs, to limit ASPS shareholder
dilution, to avoid a pro-forma breach of any covenants in any of their credit
agreements or other financing documents, or the Parent to operate as a going
concern, the Administrator may on the Payment Date (in lieu of rejecting a
Participant’s offer made pursuant to the Exercise Notice) provide the
Participant with a subordinated promissory note in the principal amount equal to
the above-referenced payment and bearing simple interest at a rate equal to the
then current three-month LIBOR, in a form approved by the lenders of ASPS or any
of its Affiliates (or other source of applicable financing) and containing
reasonable terms designed to avoid any covenant breach or insolvency during the
period of such delayed payment.

 

If the payment is to be made in ASPS common stock pursuant to clause (b) above
or in Company common shares or equity pursuant to clause (c) above, as a
condition to a Participant’s receiving such equity, such Participant will sign
ASPS’ or the Company’s equity holders agreement, if applicable, and otherwise
agree to comply with other restrictions applicable to

 

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analogous equity holders of ASPS or the Company, as the case may be, if
requested by the Administrator.

 

The following is an example of the calculations required by Sections 5.1 through
5.3 hereof.

 

Assume a participant with 10 Vested Equity Appreciation Rights granted with a
Base Value of $1.00 per Equity Appreciation Right provides an Exercise Notice,
entitling the Participant to Share Equivalency Units.

 

Assume each exercised Equity Appreciation Right has a Fair Market Value of
$10.00 as provided by the Board.

 

The aggregate value of the Exercised Rights would be 10 multiplied by $9.00 (the
difference between the Exercised Right Fair Market Value of $10.00 and the Base
Value of $1.00), or $90.00. Divide that by the Fair Market Value of one
Exercised Right of $10.00, yielding 9 Share Equivalency Units.

 

The participant would then hold the 9 Share Equivalency Units for six months and
one day. The Section 5.3 payment would be equal to the then determined Fair
Market Value of the Exercised Right as of the most recent Valuation Date. Assume
this Fair Market Value to be $12.00 per Exercised Right. Consequently, the
payment would be $108.00, based on 9 Share Equivalency Units times the then
value of $12.00 per unit. The aggregate payment pursuant to Section 5.3 would be
$108.

 

Section 5.4                                    Appraisal Rights. 
Notwithstanding anything herein to the contrary, each of the Participants hereby
waives any appraisal rights or similar rights that such Participant may be
entitled to under Luxembourg law or other applicable law with respect to the
Shares subject to a Participant’s Equity Appreciation Rights and to such Equity
Appreciation Rights.

 

Section 5.5                                    Drag-Along Right.

 

(a)                                 Drag-Along Right Generally.  Subject to the
other provisions of this Section 5.5, if a Company has been formed and
Participant holds common shares or other equity securities in the Company
pursuant to a payment made under Section 5.3(c), and at any time thereafter the
Parent or ASPS proposes to sell any or all of its respective shares of stock (or
equivalent equity interest) in the Company, the Parent or ASPS, as applicable,
shall have the right (the “Drag-Along Right”) in its sole discretion to deliver
notice to the Company that the Parent or ASPS desires the Company and/or the
Participants to enter into agreements with one or more Persons that would result
in such sale of the Parent’s or ASPS’s shares in the Company (an “Approved
Sale”), whereupon all Participants and the Company shall consent to and raise no
objections against the Approved Sale, and each Participant shall, and by entry
into an Award Agreement

 

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agrees to, sell all or any portion of his or her shares or securities in the
Company as is required by Parent or ASPS, on the terms and conditions approved
by the Parent or ASPS.  Subject to the other provisions of this Section 5.5, all
Participants and the Company shall take all necessary and desirable actions in
connection with the consummation of the Approved Sale, including the execution
of such agreements and such instruments and other actions reasonably necessary
to (i) provide the representations, warranties, indemnities, covenants,
conditions, escrow agreements and other provisions and agreements relating to
such Approved Sale; and (ii) to effectuate the allocation and distribution of
the aggregate consideration upon the Approved Sale as set forth below.

 

(b)                                 Notice of Approved Sale.  Subject to
applicable securities laws and regulations and confidentiality requirements, the
Company shall provide each Participant with written notice of any Approved Sale
at least ten (10) days prior to the consummation thereof, which notice shall
specify the terms and conditions of the Approved Sale as well as the Relative
FMV Amount of the shares or securities that such Participant is required to sell
in the Approved Sale.  “Relative FMV Amount” means, with respect to any
Participant, the quotient determined by the Administrator by dividing (i) the
Fair Market Value of such Participant’s shares or securities by (ii) the
aggregate consideration received by the Parent or ASPS, as applicable, any other
selling Stockholders, all Participants and any other selling entities in the
Approved Sale (the “Aggregate Approved Sale Consideration”).

 

(c)                                  Consideration for Approved Sale.  Subject
to any escrow, holdbacks or similar mechanisms in the Approved Sale as well as
any Vesting requirements of the Plan or an Award Agreement, upon the
consummation of an Approved Sale, each Participant shall receive (or have the
right to receive) from the acquiring entity (or from such other entity as may be
provided in the definitive documentation governing such Approved Sale) a
percentage of the Aggregate Approved Sale Consideration equal to his, her or its
Relative FMV Amount in consideration for the sale of his or her shares or
securities in the Company.

 

(d)                                 Representations, Warranties and
Indemnities.  In the event that the Participants are required to provide any
representations, warranties or indemnities in connection with an Approved Sale
(other than representations, warranties and indemnities provided concerning each
Participant’s valid ownership of his or her shares or securities in the Company,
free of all liens and encumbrances, enforceability and each Participant’s
authority, power, and right to enter into and consummate agreements relating to
such Approved Sale without violating applicable law or any other agreement
(collectively, the “Individual Representations”)), then each Participant shall
not be liable, on a several or joint basis, for more than his, her or its
Relative FMV Amount of any liability for misrepresentation or indemnity (except
in respect of the Individual Representations) and such liability shall not
exceed the total aggregate consideration received by such Participant in respect
of the Approved Sale.

 

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(e)                                  Proxy and Power of Attorney.  Each
Participant hereby grants, or in connection with entry into an Award Agreement
will grant, an irrevocable proxy and power of attorney to each of the Division,
the Parent and ASPS with respect to any shares or other securities he or she
holds in the Company to take all necessary actions and execute and deliver all
documents deemed necessary and appropriate by either of the Division, the Parent
or ASPS to effectuate the consummation of any Approved Sale on terms that are
consistent with the provisions of this Section 5.5.  The Participants hereby
agree to indemnify, defend and hold each of the Company, the Parent and ASPS
harmless (severally in accordance with their respective Relative FMV Amounts, as
defined in the applicable Award Agreements with the Participants, and not
jointly and severally) against all liability, loss or damage, together with all
reasonable costs and expenses (including reasonable legal fees and expenses),
relating to or arising from the invalidity of the proxy and power of attorney
granted hereby or the Participant’s actions taken to contest the validity of
such proxy and power of attorney.

 

Section 5.6                                    Administrator Discretion Upon
Sale of the Division or Qualified IPO.  Notwithstanding anything herein or in an
Award Agreement to the contrary, as of or in connection with a Sale of the
Division or Qualified IPO, the Administrator shall have the ability, at its sole
discretion, to accelerate the Vesting and/or transferability of any Equity
Participation Rights or to terminate or amend the Plan and any Equity
Participation Rights or Share Equivalency Units as necessary consistent with the
terms of, and to facilitate, the Sale of the Division or Qualified IPO. 
Furthermore and notwithstanding anything herein or in an Award Agreement to the
contrary, as of or in connection with a Sale of the Division or Qualified IPO,
the Administrator shall have the ability, at its sole discretion, to redeem any
Equity Appreciation Rights or Share Equivalency Units, without any consideration
due to the Participant holding such Equity Appreciation Rights.

 

Section 5.7                                    Discretionary Put Option Right
for Participants.  The Administrator may expressly provide in an Award Agreement
that the Parent or the Division will purchase back from a Participant all or
some of the Equity Appreciation Rights or Share Equivalency Units issued
pursuant to an Award Agreement.  The terms and conditions of such a put option
right for any Participant shall be determined by the Administrator in its
discretion.

 

ARTICLE VI

MISCELLANEOUS

 

Section 6.1                                    No Rights as a Member.  A
Participant shall have no distribution, voting, or any other rights as a member
or stockholder of the Division, the Company or any of its Subsidiaries or
Affiliates as a result of participation in the Plan or with respect to any
Equity Appreciation Rights, whether Vested or not Vested.

 

Section 6.2                                    Unfunded Plan.  The Plan is
unfunded.  Neither the Division nor any of its parents, Subsidiaries or
Affiliates (including the Parent and ASPS) shall segregate any assets in

 

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connection with or as a result of the Plan.  The rights of a Participant to
benefits under this Plan shall be solely those of a general, unsecured creditor
of the Division and Parent.

 

Section 6.3                                    Amendment; Termination of Plan. 
While the Parent’s intent is to pay Participants’ benefits according to the
provisions of the Plan, the Administrator may unilaterally amend, modify,
suspend, eliminate or terminate, in whole or in part, any or all provisions of
the Plan or any Award Agreement.  Subject to Section 6.4, no such amendment,
modification, suspension, elimination or termination of the Plan may materially
and adversely affect any right of any Participant that arises on a Payment Date
occurring prior to the effective date of such amendment, modification, change,
suspension, elimination or termination of the Plan without such Participant’s
written consent.

 

Section 6.4                                    No Limitation on Corporate
Actions; Adjustments for Recapitalizations, Mergers, Acquisitions and other
Transactions.  This Plan and the Equity Appreciation Rights granted hereunder
shall have no effect on the Division’s capital structure, and shall not affect
the right of the Parent, ASPS, the Division or any of their respective
Subsidiaries or Affiliates to reclassify, recapitalize, issue equity or
otherwise change its capital or debt structure or to merge, consolidate, convey
any or all of its assets, dissolve, liquidate, wind up or otherwise reorganize.
The Administrator shall have the discretion to make adjustments to the Plan and
the awards made hereunder to reflect any changes that the Administrator deems
appropriate as a result of any Sale of the Division, Qualified IPO, business
combination, acquisition, recapitalization, reclassification, merger,
consolidation, reorganization, stock dividend, stock split, spin off of one or
more divisions or subsidiaries or similar transaction affecting the Equity
Appreciation Rights.  Upon the occurrence of any such events, the Administrator
may make appropriate adjustments to the Equity Appreciation Rights to avoid
inequitable dilution or enlargement of award values or rights in connection with
any such event, taking into account a Fair Market Value or other valuation of
the Division (as determined by the Administrator in its sole discretion based on
any facts and circumstances it considers relevant).  For the avoidance of doubt,
the Equity Appreciation Rights are subject to the dilutive impact of equity
issuances (including a Qualified IPO) or other costs of capital made in
connection with acquisitions or capital raises.  Further, in recognition that
the Division is a business division of Parent and is one member of a
consolidated group of companies, the Division or Parent may take or refrain from
taking actions or otherwise effect transactions that are in the best interest of
the consolidated group and/or the stockholders of Parent that may not be the
same actions or transactions that would be taken by the Division if it were not
affiliated with Parent or part of a consolidated group, and no Participant shall
have any rights, as a holder of Equity Appreciation Rights or any shares of
stock issued pursuant to the Plan, as a result of such action, inaction, or
transaction.

 

Section 6.5                                    Anti-Alienation.  No right or
interest to or in any Equity Appreciation Right, rights under Article V to
payment or other benefit to a Participant shall be assignable or transferred by
such Participant except by will or the laws of descent and distribution or
except as set forth herein upon Equity Appreciation Rights being issued pursuant
to an Award Agreement,

 

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and subject to Luxembourg law.  No right, benefit or interest of a Participant
hereunder shall be subject to anticipation, alienation, sale, assignment, grant
of usufruct, encumbrance, charge, pledge, hypothecation or set off in respect of
any claim, debt or obligation, or to execution, attachment, levy or similar
process, or assignment by operation of law without the prior written consent of
the Parent, and subject to Luxembourg law.  Any attempt, voluntarily or
involuntarily, to effect any action specified previously in this Section shall,
to the fullest extent permitted by law, be null, void and of no effect;
provided, however, that this provision shall not preclude a Participant from
designating one or more Beneficiaries to receive any amount that may be payable
to such Participant under the Plan after his or her death and shall not preclude
the legal representatives of a Participant’s estate from assigning any right
hereunder to the person or persons entitled thereto under his or her will, or,
in the case of intestacy, to the person or persons entitled thereto under the
laws of intestacy applicable to his or her estate.

 

Section 6.6                                    Certain Tax Matters.  To the
extent the Division or Parent determines that a Participant is required to pay
any federal, state or local taxes (or other required withholdings or taxes) by
reason of any Equity Appreciation Rights awarded hereunder being treated at any
point as wages or being included in such Participant’s gross income, the Parent
shall be permitted to require the Participant, promptly upon the request by the
Parent, to pay to the Parent (or any of its Affiliates) any such amounts as may
be required by law to be withheld by the Parent (or such Affiliate) or cause the
Parent to deduct any such amounts from any payment otherwise due from the Parent
to the Participant (including wage and bonus payments).  The Administrator’s
determination of the Fair Market Value of the Equity Appreciation Rights for
such purposes, and its calculation of the amount of taxes to be withheld, shall
be binding on the Participant.  Any such withheld amounts shall be treated for
purposes of the Plan and any Award Agreement as having been paid to the
Participant.

 

Section 6.7                                    Code Section 409A.  With respect
only to each Participant who is a U.S. taxpayer at any time from the Grant Date
of an Award through its settlement pursuant to Article V above, this Plan
(including any grant of Equity Appreciation Rights and any Award Agreement made
hereunder) is intended to be exempt from Code Section 409A pursuant to its
short-term deferral rule, and, accordingly, to the maximum extent permitted,
this Plan shall with respect to such Participant be interpreted and be
administered to be in accordance therewith.  To the extent necessary to achieve
such exemption from Code Section 409A, the Administrator may amend or modify
this Plan pursuant to Section 6.3.  Each amount to be paid or benefit to be
provided to such a Participant pursuant to this Plan that constitutes deferred
compensation subject to Code Section 409A shall be construed as a separate
identified payment for purposes of Code Section 409A.  Notwithstanding anything
to the contrary in this Plan, to the extent that any payments to be made upon
such a Participant’s separation from service would result in the imposition of
any individual penalty tax imposed under Code Section 409A, the payment shall
instead be made on the first business day after the earlier of (i) the date that
is six months following such Participant’s separation from service and (ii) such
Participant’s death.

 

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Section 6.8                                    Conflicts with ASPS Plan.  Should
there be any conflict between the terms of this Plan and the ASPS Plan, the
terms of this Plan shall govern except as otherwise required by law.

 

Section 6.9                                    Notices.  All notices and other
communications under this Plan and/or an Award Agreement shall be in writing and
shall be given in the manner set forth below (or at such other address a party
may specify by like notice).

 

(a)                                 If to the Division or Parent, by first-class
mail, certified or registered with return receipt requested or hand delivery
acknowledged in writing by the recipient personally, and such notice shall be
deemed to have been duly given three days after mailing or immediately upon duly
acknowledged hand delivery to the respective persons named below:

 

Altisource Solutions S.à r.l.

40, avenue Monterey

L-2163 Luxembourg

Attn: Board of Managers

 

With a copy
to:                                                                                                           
Kevin.Wilcox@altisource.lu

 

(b)                                 If to a Participant, to the Participant’s
address as set forth in the applicable Award Agreement, by first-class mail,
certified or registered with return receipt requested, or by hand delivery, and
such notice shall be deemed to have been duly given three days after mailing or
immediately upon hand delivery to the Participant.

 

Section 6.10                             Successors.  The rights and obligations
under this Plan and any Award Agreement shall inure to the benefit of, and shall
be binding upon the Division, Parent and their successors and assigns, and,
subject to Section 6.5, the Participants and their respective beneficiaries and
legal representatives.

 

Section 6.11                             Headings; Severability.  Headings
appearing in this Plan and any Award Agreement are for convenience only and
shall not be deemed to explain, limit or amplify the provisions hereof.  The
invalidity or unenforceability of any particular provision of this Plan or any
Award Agreement shall not affect the other provisions hereof or thereof, and
this Plan and/or such Award Agreement shall be construed in all respects as if
the invalid or unenforceable provision were omitted.

 

Section 6.12                             Effective Date.  The Plan shall become
effective upon the effective date of the first Equity Appreciation Right award
granted hereunder.

 

Section 6.13                             Governing Law.  THIS PLAN, AND ANY
DISPUTES BETWEEN THE PARENT AND ANY PARTICIPANT, SHALL BE GOVERNED BY AND
CONSTRUED IN

 

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ACCORDANCE WITH THE LAWS OF THE GRAND DUCHY OF LUXEMBOURG, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW UNLESS OTHERWISE PROVIDED IN THE APPLICABLE AWARD
AGREEMENT.

 

Section 6.14                             Jurisdiction; Venue; Waiver of Jury
Trial.  BY ACCEPTANCE OF ANY AWARD MADE UNDER THIS PLAN AND UNLESS OTHERWISE
PROVIDED IN THE APPLICABLE AWARD AGREEMENT, A PARTICIPANT HEREBY AGREES THAT ANY
AND ALL DISPUTES BETWEEN THE PARTIES HERETO WHICH MAY ARISE PURSUANT TO THIS
PLAN OR ANY AWARD MADE HEREUNDER WILL BE HEARD EXCLUSIVELY AND DETERMINED BEFORE
AN APPROPRIATE COURT LOCATED IN THE GRAND DUCHY OF LUXEMBOURG, AND THE PARENT
AND EACH PARTICIPANT SUBMITS ITSELF AND ITS PROPERTY TO THE EXCLUSIVE
JURISDICTION OF THE FOREGOING COURTS WITH RESPECT TO SUCH DISPUTES.  BY
ACCEPTANCE OF ANY AWARD MADE UNDER THIS PLAN, A PARTICIPANT HEREBY (I) WAIVES TO
THE FULLEST EXTENT PERMITTED BY LAW ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE COURTS REFERRED TO ABOVE ON THE GROUNDS OF INCONVENIENT FORUM OR
OTHERWISE AS REGARDS ANY AND ALL DISPUTES BETWEEN THE PARTICIPANT AND THE PARENT
WHICH MAY ARISE PURSUANT TO THIS PLAN OR ANY AWARD MADE HEREUNDER, (II) WAIVES
TO THE FULLEST EXTENT PERMITTED BY LAW ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE IN THE COURTS REFERRED TO ABOVE FOR ANY
DISPUTE BETWEEN THE PARTIES HERETO WHICH MAY ARISE PURSUANT TO THIS PLAN AND ANY
AWARD MADE HEREUNDER, AND (III) AGREES THAT A JUDGMENT OR ORDER OF ANY COURT
REFERRED TO ABOVE IN CONNECTION WITH ANY AND ALL DISPUTES BETWEEN THE
PARTICIPANT AND THE PARENT WHICH MAY ARISE PURSUANT TO THIS PLAN OR ANY AWARD
MADE HEREUNDER IS CONCLUSIVE AND BINDING ON IT AND MAY BE ENFORCED AGAINST IT IN
THE COURTS OF ANY OTHER JURISDICTION.  EACH PARTICIPANT WAIVES ANY RIGHT TO A
TRIAL BY JURY IN ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY, AND AGREES THAT ANY SUCH SUIT,
ACTION OR OTHER PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

 

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