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SERVICES AGREEMENT

Consulting Services Agreement

SERVICES AGREEMENT | Document Parties: American Processing Company, LLC | DOLAN APC LLC | Mortgage Default Support Services You are currently viewing:
This Consulting Services Agreement involves

American Processing Company, LLC | DOLAN APC LLC | Mortgage Default Support Services

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Title: SERVICES AGREEMENT
Governing Law: Minnesota     Date: 2/25/2008
Industry: Printing and Publishing     Law Firm: Katten Muchin     Sector: Services

SERVICES AGREEMENT, Parties: american processing company  llc , dolan apc llc , mortgage default support services
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EXHIBIT 10.2
SERVICES AGREEMENT
     This Services Agreement (this “ Agreement ”), dated as of February 22, 2008 (the “ Effective Date ”), is by and between American Processing Company, LLC, a Michigan limited liability company (the “ Service Provider ”), Wilford & Geske, a Minnesota professional corporation (the “ Firm ”), and, solely for purposes of making the commitments set forth in Article VIII (Restrictive Covenants), Lawrence A. Wilford and James A. Geske (each a “ Restricted Party ,” and collectively, the “ Restricted Parties ”). The Firm and the Service Provider are hereinafter collectively referred to as the “ Parties ”. 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 a general service law firm engaged in the Practice of Law, including, without limitation, providing foreclosure, bankruptcy, eviction and related legal services to its Clients out of the Firm’s principal office located in Woodbury, Minnesota. Prior to the date hereof, in addition to the Practice of Law, the Firm provided certain non-legal services to its Clients, including the Mortgage Default Support Services.
     B. Immediately prior to, and in connection with the transactions contemplated by this Agreement, the Firm has sold to the Service Provider substantially all of the assets (the “ Purchased Assets ”) used by the Firm in the business of providing Mortgage Default Support Services and the Service Provider has assumed certain liabilities of the Firm associated therewith (the “ Assumed Liabilities ”) pursuant to that certain Asset Purchase Agreement, executed concurrently with this Agreement (the “ Purchase Agreement ”), by and among the Firm, the Service Provider and the Restricted Parties.
     C. The Firm now desires, subject to the terms and conditions described herein, to engage the Service Provider to provide Mortgage Default Support 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 by the Firm.
     D. Each Restricted Party 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 24b-2 OF THE SECURITIES EXCHANGE ACT; [***] DENOTES OMISSIONS.

 


 
     “ 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 Persons, includes the possession, directly or indirectly, of ten percent (10%) or more of the voting power (or in the case of a Person which is not a corporation, ten percent (10%) 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 that 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.
     “ Amended Fee Schedule Date ” means January 1, 2009 and each anniversary thereof.
     “ Amended Fee Schedule ” has the meaning set forth in Section 3.1(c) of this Agreement.
     “ Applicable Law(s) ” means any statute, law, ordinance, regulation, requirement, order or rule of any federal, state, local government or other governmental agency or body or of any other type of regulatory body, or any governmental or administrative interpretation of any 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 Minnesota’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 Support 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 from 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 24b-2 OF THE SECURITIES EXCHANGE ACT; [***] DENOTES OMISSIONS.

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     “ Computer System ” shall have the meaning set forth for such term in the Purchase Agreement, together will all enhancements and additions thereto and replacements for any component parts thereof.
     “ 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.
     “ Effective Date ” has the meaning set forth in the Preamble to this Agreement.
     “ Employee Expenses ” means any and all employee costs of the Service Provider 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.
     “ Encumbrances ” means any liens, hypothecations, mortgages, charges, security interests, pledges and other encumbrances and claims of any nature.
     “ Engagement Letter ” means any engagement letter, contract, agreement or other arrangement between the Firm and a Client.
     “ 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 Invoice ” has the meaning set forth in Section 3.2(a) 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 set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting
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 24b-2 OF THE SECURITIES EXCHANGE ACT; [***] DENOTES OMISSIONS.

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Standards Board (or any successor authority) that are applicable as the date of determination, consistently applied in accordance with past practices.
     “ Governmental Body ” means any:
          (a) foreign, 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.
     “ GNMA ” shall mean the Government National Mortgage Association.
     “ 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.
     “ Initial Year ” has the meaning set forth in Section 3.1(b) 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 (c) 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 and the Private Investors, collectively.
     “ Invoice ” means any Monthly Invoice or the First Invoice.
     “ Legal Services ” means the practice of law, including counseling or assisting others in matters that require the use of legal discretion and profound legal knowledge, the giving of advice or the rendering of any service requiring the use of legal skill or knowledge or any other such service, the provision of which by an individual whom is not a licensed attorney, would constitute the unauthorized practice of law in the State of Minnesota.
     “ Malpractice Insurance Policies ” has the meaning set forth in Section 4.6 of this Agreement.
     “ Material Breach ” means any breach of this Agreement by one Party that:
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 24b-2 OF THE SECURITIES EXCHANGE ACT; [***] DENOTES OMISSIONS.

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     (a) significantly deprives the Non-breaching Party of the material benefits afforded to it under this Agreement;
     (b) causes the Non-breaching Party to suffer losses or damages that cannot be properly redressed by the payment of money; or
     (c) constitutes gross negligence or willful misconduct on the part of the Breaching Party.
     “ Measuring Month ” has the meaning set forth in Section 3.1(b) of this Agreement.
     “ Monetary Default Event ” has the meaning set forth in Section 9.3 of this Agreement.
     “ Monthly Invoice ” has the meaning set forth in Section 3.2(a) of this Agreement.
     “ Mortgage Default Support Services ” means the mortgage default support and processing services summarized on Exhibit A , which are undertaken in connection with residential mortgage defaults including, but not limited to, the processing and support of foreclosures, foreclosure sales, evictions, torrens action, reduced redemption and bankruptcy filings, but excluding in each instance any Legal Services; provided , however , the Mortgage Default Support Services shall not include the direct provision by Service Provider of any service of process, auction services, title services, and posting and newspaper publication 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.
     “ Objection Notice ” has the meaning set forth in Section 3.1(c) of this Agreement.
     “ Office Products ” has the meaning set forth in Section 4.4 of this Agreement.
     “ Parties ” has the meaning set forth in the Preamble of this Agreement.
     “ Person ” means an individual, partnership, corporation (including a business trust), 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.
     “ Prevailing Party ” has the meaning set forth in Section 12.2 of this Agreement.
     “ Private Investors ” shall mean individual private investors who make or invest in residential mortgage loans.
     “ Purchase Agreement ” has the meaning set forth in the Recitals to this Agreement.
     “ Purchased Assets ” has the meaning set forth in the Recitals 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 24b-2 OF THE SECURITIES EXCHANGE ACT; [***] DENOTES OMISSIONS.

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     “ Reasonable Attorneys’ Fees ” shall mean those attorney’s fees actually incurred in obtaining specific performance, injunctive relief or a judgment in favor of the Prevailing Party.
     “ 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.
     “ Second Invoice ” has the meaning set forth in Section 3.2(a) of this Agreement.
     “ Service Provider Confidential Information ” has the meaning set forth in Section 7.1(a) of this Agreement.
     “ Service Provider Intellectual Property ” has the meaning set forth in Section 7.6 of this Agreement.
     “ Service Provider Workforce ” has the meaning set forth in Section 5.1 of this Agreement.
     “ Service Provider ” has the meaning set forth in the Preamble of this Agreement.
     “ Standard Operating Procedures ” or “ SOPs ” means the operating procedures agreed to by the Parties regarding the provision of Mortgage Default Support Services by the Service Provider to the Firm.
     “ Termination Date ” means the effective date of the termination of this Agreement in accordance with Sections 9.3 , 9.4 or 9.5 .
     “ Territory ” has the meaning set forth in Section 8.1(a) of this Agreement.
     “ Transition ” has the meaning set forth in Section 6.2 .
     “ Transition Plan ” has the meaning set forth in Section 6.2 .
     “ Veritas Software ” means that certain case management software program owned by the Service Provider and used in the provision of Mortgage Default Support 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 including Service Provider, for the Firm’s Clients (tangible, recorded or otherwise, and without regard to the form of recordation or state of completion), whether or not the services being performed are complete and specifically includes all work product of the Service Provider in providing the Mortgage Default Support Services, other solely than such materials relating to the Service Provider’s internal administration (its employees, equipment, software and other systems).
     “ Work-in-Process ” shall mean at any time shall mean the files for which some portion of mortgage default processing and support services have been performed by the Firm prior to the Effective Date.
     “ 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 24b-2 OF THE SECURITIES EXCHANGE ACT; [***] DENOTES OMISSIONS.

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     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, Exhibits and Schedules in or to this Agreement, unless otherwise specified.
ARTICLE II
SERVICES TO BE PROVIDED BY THE SERVICE PROVIDER
     2.1 Mortgage Default Support Services . The Firm hereby engages the Service Provider, and the Service Provider hereby agrees, to perform the Mortgage Default Support Services that the Firm has determined or established as necessary and essential for the benefit of, and on behalf of, its Clients, including, but not limited to, those set forth on Exhibit A .
     2.2 Supervision of Service Provider Personnel . The Parties intend that all employees of the Service Provider who are providing Mortgage Default Support 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 solely with respect to any Legal Services. Such supervising attorney shall have the ultimate authority as to all Legal Services regarding each file, matter, or case for which the Service Provider is performing the Mortgage Default Support Services. Notwithstanding the foregoing, Service Provider shall be solely responsible for the supervision of its employees as to employment-related matters.
     2.3 Standard Operating Procedures . The Standard Operating Procedures shall be initially formulated in compliance with all Applicable Laws. Until the parties agree otherwise, the Standard Operating Procedures shall be those utilized by the Firm in providing such services with respect to its Client files prior to the Effective Time, which such SOPs shall be communicated by the Firm to the Service Provider. The Standard Operating Procedures shall be amended from time to time by the Parties, in accordance with changes in Applicable Law, or for the reasonable accommodation of reasonable requests by the Firm, based upon the changing requirements of its Clients, Investors or Agencies, any such amendment to be made upon the mutual agreement of the Parties.
     2.4 Exclusivity . During the term of this Agreement (including any extensions or renewals thereof), none of the Service Provider or any of its Affiliates shall directly or indirectly provide Mortgage Default Support Services to any other Person with respect to Legal Services related to real estate located in the State of Minnesota. The foregoing shall apply to all Persons performing Legal Services related to real estate located in Minnesota whether or not such Person is actually located in the State of Minnesota or simply providing Legal Services in Minnesota. For clarity, during the term of this Agreement (including any extensions or renewals thereof), the foregoing shall prohibit the Service Provider and its Affiliates from directly or indirectly licensing the Veritas Software to any other Person with respect to Legal Services related to real estate located in the State of Minnesota. Notwithstanding the foregoing, Service Provider shall, with the prior written consent of the Firm (which consent will not be unreasonably withheld or
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 24b-2 OF THE SECURITIES EXCHANGE ACT; [***] DENOTES OMISSIONS.

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delayed), be entitled to provide Mortgage Default Support Services to any Person who has sold to the Service Provider substantially all of the assets used by such Person in the business of providing Mortgage Default Support Services. The parties acknowledge that it would be reasonable for the Firm to withhold its consent if the provision of Mortgage Default Support Services by the Service Provider could reasonably be expected to lead to the material erosion of the Firm’s market share or reduce or eliminate a material competitive advantage of the Firm.
     2.5 Employees . The Firm shall have the right to request that any employee of Service Provider that is providing Mortgage Default Support Services to the Firm hereunder be removed from providing such services and the Parties shall cooperate in good faith to accommodate any such request as soon as reasonably practicable. The Parties shall cooperate in good faith as to the staffing by Service Provider of the personnel providing Mortgage Default Support Services to the Firm, including, without limitation, the removal, replacement or other change in such personnel.
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 Support Services hereunder, the Service Provider will be compensated on a per file fee basis for each file on which the Firm utilizes the Service Provider for Services in accordance with the following fee schedule (the “ Fee Schedule ”):
     
Type of File   Per File Fee
Foreclosure
  $[***]
Bankruptcy
  $[***]
Eviction
  $[***]
Reduced Redemption
  $[***] (for files opened prior to January 1, 2008)
 
  $[***] (for files opened on or after January 1, 2008)
Torrens Action
  $[***]
Other
  $[***]
The Fee Schedule set forth above shall be in effect for a period starting on the Effective Date and ending on March 31, 2009. For the avoidance of doubt, the Parties acknowledge that the per file fee for each file will not be less than or exceed the specified per file fee in effect for that particular type of file at the time the Firm directs the Service Provider to perform Mortgage Default Support Services for a particular file, without regard to the amount of Mortgage Default Support Services required with respect to such file.
     (b)  Amended Fee Schedule.
          (i) The parties acknowledge and agree that, for each of the calendar years 2009, 2010, 2011 2012 and 2013 (each an “ Initial Year ”), on April 1 st of each Initial Year, each per file fee set forth on the Fee Schedule shall be increased to equal that amount (the “ New Fee
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 24b-2 OF THE SECURITIES EXCHANGE ACT; [***] DENOTES OMISSIONS.

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Amount ”) equal to the product of (x) the per file fee in effect during the immediately preceding Initial Year and (y) the CPI Percentage. In no event shall the New Fee Amount for any per file fee be less than the per file fee for the immediately preceding year. For each Initial Year, the New Fee Amount for each fee per file shall be submitted to the Firm in writing by Service Provider 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 (as defined below) for the applicable Measuring Month (as defined below). The Firm acknowledges that it shall have no right to contest the New Fee Amounts for any Initial Year. For purposes of this Agreement, for any Initial Year, 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, U.S. City Average (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 February immediately preceding April 1 st of such Initial 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 Initial Year, the Parties agree that there shall be no increase or decrease to the per file fee in effect for such Initial Year; provided, however , if, for a given Initial Year, the CPI percentage is calculated to be less than 100%, the CPI Percentage for the next Initial Year shall be computed using the Measuring Month twenty-four (24) months prior to such Measuring Month as the denominator. For purposes of example only, to determine the CPI Percentage for the adjustment to be made on April 1, 2009 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, U.S. City Average published by the BLS for the month of February 2009 and the denominator of which would be the Consumer Price Index — All Urban Consumers, U.S. City Average published by the BLS for the month of February 2008. In addition, for purposes of example only, if the CPI Percentage is calculated to be less than 100% in 2009, then the CPI Percentage for the adjustment to be made on April 1, 2010 would be equal the product of (x) 100% and (y) a fraction, the numerator of which would equal the Consumer Price Index — All Urban Consumers, U.S. City Average published by the BLS for the month of February 2010 and the denominator of which would be the Consumer Price Index — All Urban Consumers, U.S. City Average published by the BLS for the month of February 2008.
     (c) For each year during the term of this Agreement after the Initial Years, on or before the forty-fifth (45th) day prior to an Amended Fee Schedule Date, the Service Provider may propose to the Firm an amended Fee Schedule (an “ Amended Fee Schedule ”) that will be in effect for the one-year period commencing with the applicable Amended Fee Schedule Date. On or before the fifteenth (15th) day after receiving the proposed Amended Fee Schedule, the Firm may deliver to the Service Provider a notice of objection to the proposed Amended Fee Schedule (an “ Objection Notice ”). If no such Objection Notice is timely delivered by the Firm to the Service Provider, then that Amended Fee Schedule shall be binding on the Parties for the one-year period commencing on the applicable Amended Fee Schedule Date. If the Firm does timely deliver to the Service Provider an Objection Notice, the Firm and the Service Provider shall thereafter negotiate with each other in good faith to agree upon an Amended Fee Schedule. If the Firm and the Service Provider are unable to agree upon an Amended Fee Schedule within thirty (30) days after an Objection Notice has been given, then the existing Fee Schedule shall remain in effect and the Service Provider shall thereafter have the option of terminating this Agreement in its sole discretion in accordance with Section 9.4 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 24b-2 OF THE SECURITIES EXCHANGE ACT; [***] DENOTES OMISSIONS.

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     (d)  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 Service Provider as a part of the performance of the Mortgage Default Support Services hereunder, including, but not limited to, fees paid for (i) publication and posting of legal notices; (ii) title insurance; (iii) filing of deeds and other legal documents; (iv) sheriff services; (v) packaging services; and (vi) court costs.
     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 Service Provider 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 Service Provider for processing during the preceding month and (ii) the total amount due to the Service Provider for such files referred during the preceding month. The first such Monthly Invoice shall be delivered on February 27, 2008 (the “ First Invoice ”) and for this Invoice only, the amount will equal the product of: (A) [***]; (B) the number of Foreclosure, Bankruptcy, Eviction, Proceeding Subsequent and Reduced Redemption files referred to the Firm prior to the Effective Date but after the date that is [***] days, [***] days, [***] days, [***] days and [***] days, respectively, prior to the Effective Date; and (C) the applicable per file fee identified in the Fee Schedule. For purposes of calculating the First Invoice, the parties hereby agree that the First Invoice shall estimate the following number of Foreclosure, Bankruptcy, Eviction, Proceeding Subsequent and Reduced Redemption files as having been referred to the Firm prior to the Effective Date but after the dates specified for each file type set out in the immediately preceding sentence, as follows: [***] files, [***] files, [***] files, [***] files, and [***] files, respectively. The amounts set forth in the immediately preceding sentence shall be reflected in the First Invoice; provided , however , within ninety (90) days after the Effective Date, the Parties shall together agree on the actual file counts involved. To the extent the Parties determine that the actual file count is different than the amounts set forth above, the Service Provider shall include an adjustment for such difference in the first Monthly Invoice for which such information is available. The second Monthly Invoice shall be delivered on or before March 15, 2008 (the “ Second Invoice ”) and for this Invoice only, the amount will equal the product of: (Y) the files created by the Firm for the period subsequent to the Effective Date through and including February 29, 2008 and (Z) the per file fee identified in the Fee Schedule.
     (b)  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 Service Provider of any dispute regarding any Invoice, and the Parties agree to use their best 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.
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 24b-2 OF THE SECURITIES EXCHANGE ACT; [***] DENOTES OMISSIONS.

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     (c)  Payment . The Firm shall pay each Invoice within fifteen (15) days after receipt thereof; provided, however, that the Firm is under no obligation to make any payments for any amounts in any Invoice that is subject to a dispute as provided in Section 3.2(b) above, until ten (10) days after such dispute is resolved.
     3.3 Reasonable Value . The Firm and the Service Provider acknowledge and agree that the Fee Schedule has been, and any Amended Fee Schedule shall be, negotiated at arm’s-length and represents the reasonable value of the Mortgage Default Support Services furnished by the Service Provider 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 Service Provider to share in the Firm’s fees for Legal Services performed by the Firm on behalf of its Clients.
ARTICLE IV
AFFIRMATIVE COVENANTS OF THE FIRM
     4.1 Exclusive Use of the Service Provider for Mortgage Default Support Services . During the term of this Agreement and any extensions or renewals thereof, the Firm shall engage only the Service Provider to provide Mortgage Default Support Services (or services similar to the Mortgage Default Support Services) for the Firm or on behalf of a Client, and shall not retain, hire, employ, use or engage any other Person to provide such services.
     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 Service Provider to provide Mortgage Default Support Services.
     4.3 Supervision of Service Provider Employees . The Firm agrees to cause its attorneys to provide supervision (as to Legal Services only) of the employees of the Service Provider that are providing Mortgage Default Support Services in compliance with Applicable Law.
     4.4 Support of the Service Provider . The Firm shall permit employees of the Service Provider to have access to, and the authorized use of, all software and assets owned or licensed by the Firm needed by the Service Provider to operate the Business and to adequately and efficiently provide the Mortgage Default Support Services to the Firm and its Clients; provided , however , nothing in this Section 4.4 shall be deemed to create any affirmative obligation on the Firm’s part to purchase or acquire any such software or assets; provided , further , in connection with the acquisition or use by the Service Provider of any such software or asset, the Parties shall work together in good faith to determine the Service Provider’s allocable share, if any, of such expense. Notwithstanding the foregoing, to the extent the Firm fails to provide the Service Provider with the authorized use of all software and assets owned or licensed by the Firm reasonably needed by the Service Provider to operate the Business and to adequately and efficiently provide the Mortgage Default Support Services, the Service Provider shall not be required to provide Mortgage Default Support Services with respect to any file that requires such authorized use or access. Except as otherwise agreed to by the Parties in writing, all office furniture, office equipment (including, but not limited to, telephones, computers and copiers),
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 24b-2 OF THE SECURITIES EXCHANGE ACT; [***] DENOTES OMISSIONS.

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office supplies and all other normal and customary office products associated with or required to perform the Mortgage Default Support Services contemplated by this Agreement (collectively, the “ Office Products ”) shall be the responsibility of the Service Provider. The Firm shall have no responsibility for any Employee Expenses. The Firm shall provide to the Service Provider 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 Service Provider 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 Support Services to be performed by the Service Provider under this Agreement. The Parties will cooperate to protect and maintain the confidences and secrets of Clients to the full extent required by any professional ethics rules applicable to the Practice of Law, however, each Party shall be responsible for any breaches by its employees of his/her obligation to protect and maintain the confidences and secrets of any Clients.
     (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 Minnesota, and any other state or federal district in

 
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