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EXHIBIT 10.1 AMENDED AND RESTATED SERVICES AGREEMENT
This Amended and Restated Services
Agreement (this " Agreement "), dated as of September 2,
2008 (the " Effective Date "), is by and between National
Default Exchange, LP, a Delaware limited partnership (" NDEx
") and Barrett Daffin Frappier Turner & Engel, LLP, a Texas
limited liability partnership (f/k/a Barrett Burke Wilson Castle
Daffin & Frappier, LLP) (the " Firm "). NDEx 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 its principal office in
Addison, Texas. Prior to the date of the Firm’s entry into
that certain Contribution Agreement (as defined below), in addition
to the Practice of Law, the Firm provided certain non-legal
services to Clients, including the Foreclosure Trustee Services.
B. The Firm and NDEx entered
into that certain Contribution Agreement, dated as of June 1,
2006 (the " Contribution Agreement "), pursuant to which the
Firm contributed to NDEx substantially all of the assets used by
the Firm in the business of providing Foreclosure Trustee Services
to the Firm’s Clients, and NDEx assumed certain liabilities
of the Firm associated therewith.
C. Contemporaneously with entry
into the Contribution Agreement, the Firm and NDEx entered into
that certain Services Agreement, dated as of June 1, 2006 (the
" Original Services Agreement "), pursuant to which the Firm
engaged NDEx to provide Foreclosure Trustee Services and other
services to the Firm and its Clients; provided ,
however , that the performance of any Legal Services in
connection with the business of the Firm continued, and presently
continue, to be performed by the Firm.
D. Pursuant to the Equity
Purchase Agreement, APC is acquiring one hundred percent (100%) of
the direct and indirect equity interests in National Default
Exchange Holdings, L.P., a Delaware limited partnership and the
parent of NDEx (" NDEx Holdings "), from the holders of such
equity interests. This Agreement is being entered into in
connection with, and as a condition to, the consummation of the
transactions contemplated by the Equity Purchase Agreement.
E. The Firm and NDEx now desire,
subject to the terms and conditions described herein, to amend and
restate the Original Services Agreement in its entirety in the
manner set forth in this Agreement.
G. It is the intention of the
Parties that the services to be rendered to the Firm by NDEx under
this Agreement include: (i) Foreclosure Trustee Services to
the Firm and to the Clients; and (ii) Support Services 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.
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: " Access Rights "
means the right to, or have representatives to, upon at least three
Business Days notice, and at the sole expense of the Party
exercising the Access Rights:
(a) examine (i) all
financial, accounting, and bookkeeping records, and (ii) all
other records, reports and other papers of the other Party, in each
case relating to this Agreement and/or the performance of such
Party’s obligations under this Agreement, except to the
extent that such action would, in the reasonable opinion of
counsel, constitute a waiver of the attorney/client privilege or
violate any obligations of confidentiality to third parties;
(b) make copies and take
extracts from any of the materials described in clause (a) of
this definition, except for information that is subject to a
written confidentiality agreement with a third party; and
(c) meet with appropriate
personnel of the Party providing access to discuss the materials
described in clause (a) of this definition during normal
business hours. " 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 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. Notwithstanding
anything to the contrary herein, for purposes of this Agreement,
(i) NDEx shall not be considered an "Affiliate" of the Firm,
and (ii) the Firm shall be not considered an "Affiliate" of
NDEx . " 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. 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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" Amended Fee
Schedule Date " means (i) with respect to each
Initial Quarter, the first day of each Initial Quarter, and
(ii) with respect to each calendar year after 2009,
January 1, 2010 and each anniversary thereof.
" Amended Fee Schedule " has
the meaning specified in Section 3.1(b) hereof.
" APC " means American
Processing Company, LLC, a Michigan limited liability company.
" 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 Disciplinary Rules of
Professional Conduct for the State of Texas, the Fair Labor
Standards Act, the FDCPA, and the Graham-Leach-Bliley Act.
" Breaching Party " has the
meaning set forth in Section 8.3 of this Agreement.
" Business " means the
business of providing Foreclosure Trustee 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 IX of this Agreement.
" Claim " has the meaning set
forth in Section 11.6 of this Agreement.
" Client Engagement Letters "
means engagement letters from time to time in effect during the
Term of this Agreement between the Firm and the Clients relating to
the Firm’s Foreclosure Business and related Practice of Law
including, but not limited to, the Client Engagement Letters in
effect on the Effective Date. "
Clients " shall mean, collectively, (i) Investors or
other residential mortgage lenders or (ii) Servicers, in each
case who 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. " Contribution
Agreement " has the meaning set forth in the Recitals to this
Agreement. " Deeds of Trust "
means residential mortgage loan deeds of trust which grant a
mortgage lien and deed of trust covering Property to a Foreclosure
Trustee for the benefit of an Investor or other lender to secure
the payment and performance of one or more promissory notes payable
to the Investor or other lender. "
Defaulted Loans " means Loans with respect to which the
borrower is in payment or other default.
" Effective Date " has the
meaning set forth in the Preamble to 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.
3
" Employee Expenses " means
any and all employee costs of the NDEx 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 Relationships "
means contracts, agreements or engagements between the Firm and
certain Clients that govern the relationship between the Firm and
such Clients. " Equity Purchase
Agreement " means that certain Equity Purchase Agreement, dated
as of July 28, 2008, by and among APC and the other parties a
party thereto. " Extended Term
" has the meaning set forth in Section 8.2 of this
Agreement. " Fannie Mae "
shall mean the Federal National Mortgage Association.
" FDCPA " means the Fair Debt
Collection Practice Act. " Fee
Schedule Period " means (i) with respect to each
Initial Quarter, the calendar quarter commencing on the first day
of such Initial Quarter, and (ii) with respect to each
calendar year after 2009, the calendar year commencing on January 1
of such calendar year. " FHA "
shall mean the Federal Housing Administration
" 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 11.4 of this Agreement.
" Firm’s Foreclosure
Business " means Legal Services provided by the Firm to Clients
relating to Foreclosures (including, but not limited to, Legal
Services ancillary to the collection, disposition, litigation,
bankruptcy, eviction, negotiation and settlement of Defaulted Loans
and Foreclosures on Property which secures Defaulted Loans).
" Firm " has the meaning set
forth in the Preamble of this Agreement.
" Firm’s Business "
means the business of providing Legal Services to the Clients.
" First Invoice " has the
meaning set forth in Section 3.2(a) of this Agreement.
" 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. 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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" Foreclosure " means the
process by which a Foreclosure Trustee sells real property at a
foreclosure sale or takes over a Property on behalf of an Investor
or other lender or a Servicer in connection with a Defaulted Loan.
" Foreclosure Trustee " means
a trustee appointed under a Deed of Trust.
" Foreclosure Trustee
Administration Fee " has the meaning set forth in Section
3.1(a) of this Agreement. "
Foreclosure Trustee Services " means services other than
Legal Services related to activities undertaken by a Foreclosure
Trustee in connection with Foreclosures, including, but not limited
to: (i) receiving referrals from Clients or other Servicers of
loan files under the Firm’s Engagement Relationships or
otherwise, and related requests for Foreclosure services with
respect to Defaulted Loans; (ii) review and set-up of loan
files for Foreclosure; (iii) document retrieval and research;
(iv) providing acceleration and Foreclosure notices; posting
property for Foreclosure sale, and coordinating and engaging (at
the Firm’s expense) third parties to perform posting of
Foreclosure notices; (v) attending Foreclosure sales;
(vi) accepting Foreclosure bids, and otherwise providing or
arranging for the provision of Foreclosure posting and sales
services, including the engagement (at the Firm’s expense) of
third parties to perform the services related to the conduct of the
Foreclosure auction sale; (vii) Loan reinstatements;
(viii) generating Foreclosure sales confirmation reports;
(ix) title curative services with respect to Property subject
to Foreclosure; (x) processing of claims on Defaulted Loans
with the Insurers; (xi) litigation support services related to
Defaulted Loans; and (xii) bankruptcy setup services related
to Defaulted Loans; provided , however , that the
following services are specifically excluded from the definition of
Foreclosure Trustee Services: (a) any Legal Services, and
(b) any Title Work or other title related services billed
directly to the Firm by NDEx Title. "
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;
(a) 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
(b) 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 11.6 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.
5
" Indemnifying Party " has
the meaning set forth in Section 11.6 of this
Agreement. " Initial Fee
Schedule " has the meaning set forth in
Section 3.1(a) of this Agreement.
" Initial Quarter " means each
calendar quarter during 2009. "
Initial Term " has the meaning set forth in
Section 8.1 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,
collectively, Fannie Mae, Freddie Mac and the Private Investors.
" Insurers " means,
collectively, FHA and VA. "
Invoice " means any Monthly Invoice or the First Invoice.
" Legal Services " means the
preparation of a pleading or other document incident to an action
or special proceeding in any court or the management of the action
or proceeding on behalf of a client before a judge in court, as
well as any services rendered to or on behalf of a client out of
court, including the giving of advice or the rendering of any
service requiring the use of legal skill or knowledge, such as
preparing a legal instrument, the legal effect of which under the
facts and conclusions involved must be determined based on
professional legal judgment and skill, including, without
limitation, 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. "
Loans " means residential mortgage loans secured by a deed
of trust, mortgage or other security interest in Property.
" Malpractice Insurance
Policies " has the meaning set forth in Section 4.6
of this Agreement. " Material
Breach " means any breach of this Agreement 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;
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.
6
(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; (d) with respect to the Firm,
the failure by the Firm to timely pay a Monthly Invoice when owed
to NDEx under this Agreement. (e)
with respect to the Firm, the failure by the Firm to timely pay any
amounts owed to NDEx Title for Title Work performed by NDEx Title.
" 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.
" NDEx " has the meaning set
forth in the Preamble of this Agreement.
" NDEx Confidential
Information " has the meaning set forth in
Section 7.1(a) of this Agreement.
" NDEx Intellectual Property "
has the meaning set forth in Section 7.6 of this
Agreement. " NDEx Title "
means NDEx Title Services, LLC, a Texas limited liability company
and an Affiliate of NDEx. " NDEx
Workforce " has the meaning set forth in
Section 5.1 of this Agreement.
" 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 8.3 of this Agreement.
" Objection Notice " has the
meaning specified in Section 3.1(b) hereof.
" Office Products " has the
meaning set forth in Section 4.4 of this Agreement.
" Original Services Agreement
" has the meaning set forth in the Recitals 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.
" Practice Providers " means
the Firm’s attorneys who perform the Practice of Law.
" Prevailing Party " has the
meaning set forth in Section 11.2 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.
7
" Private Investors " shall
mean private investors (i.e., non-Agency) who make or invest in
residential mortgage loans. "
Proceeding " means any claim, suit, litigation, arbitration,
hearing, audit, charge, investigation, or other action (whether
civil, criminal, administrative, investigative, or informal)
commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Body, arbitrator or mediator.
" Property " means the real
and personal property included within any particular parcel or
tract of improved residential real estate.
" Reasonable Attorneys’
Fees " shall mean those attorneys’ fees actually incurred
in obtaining a judgment in favor of the Prevailing Party.
" Sales Tax " has the meaning
set forth in Section 3.1(d) of this Agreement.
" Servicers " means entities
that provide billing and collection and other services related to
the servicing and administration of Loans.
" Services " means,
collectively, the Foreclosure Trustee Services and the Support
Services. " Standard Operating
Procedures " means the operating procedures agreed to by the
Parties regarding the integration of Foreclosure Trustee Services
provided by NDEx and Legal Services provided by the Firm.
" Support Services " means
those certain non-legal business management, administrative and
other support services to be provided by NDEx to support the
Firm’s Foreclosure Business including, but not limited to,
human resources administration and financial accounting services,
and computer hardware and software support and maintenance,
technical support, system administration, network administration,
telecommunications and data system support and administration,
networking connectivity, assistance with purchasing IT hardware,
software and other products, data backups, and system security in
accordance with the requirements of the Clients, and the other
services described on Schedule 1 hereto, as may be
modified from time to time by written agreement of the Parties.
" Term of this Agreement "
means, collectively, the Initial Term and each Extended Term.
" Termination Date " means the
effective date of the termination of this Agreement in accordance
with Sections 8.3 , 8.4 or 8.5 .
" Title Work " means,
collectively, obtaining title evidence, examining title, preparing
title summary reports, ordering tax certificates and performing
title curative activities, including, but not limited to,
preparation and review of title searches and abstracts of title
relating to Property. " 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.
8
" 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 NDEX
2.1 Foreclosure Trustee
Services . The Firm hereby exclusively engages NDEx, and NDEx
hereby agrees, to perform the Foreclosure Trustee 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 any partner
of or owner in the Firm. 2.2
Support Services . In addition to the Foreclosure Trustee
Services, NDEx hereby agrees to provide the Support Services. The
Parties acknowledge and agree that if the Firm requests that NDEx
provide additional support services to the Firm not set forth on
Schedule 1 hereto, then the Parties will at that time
negotiate in good faith the scope of any such additional support
services and the additional fees to be paid by the Firm to NDEx for
such additional support services; provided , however
, that NDEx can, in its sole discretion, decide not to provide any
such additional support services to the Firm and in no event shall
such a decision to not provide any such additional support services
be deemed to be a breach or default by NDEx of this Agreement.
2.3 Title Services to NDEx
Title . As additional consideration for the Services to be
provided by NDEx to the Firm hereunder, the Firm agrees to
exclusively refer all of its Title Work to NDEx Title for the Term
of this Agreement. The Firm acknowledges and agrees that the Title
Work performed by NDEx Title shall be in addition to, and not part
of, the Services provided by NDEx under this Agreement and that all
costs and expenses of NDEx Title in providing the Title Work shall
be separately billed by NDEx Title to the Firm and shall not be
covered by or included in the Initial Fee Schedule or any Amended
Fee Schedule hereunder. 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.
9
NDEx Title will provide title services at the standard
reimbursable rates announced or published from time to time by
Investors. 2.4 Supervision of NDEx
Personnel . The Parties intend that all employees of NDEx who
are providing Foreclosure Trustee 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. Such attorney shall have the ultimate authority as to all
legal decisions regarding each file, matter, or case for which NDEx
is performing Foreclosure Trustee Services. The Firm agrees to
cause its attorneys to provide supervision of the employees of NDEx
that are providing Foreclosure Trustee Services in compliance with
Applicable Law. The Firm shall be responsible for assuring that any
supervisory attorney is licensed to engage in the Practice of Law
in the state or states in which such attorney is providing
supervision or other Legal Services.
2.5 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 NDEx, in accordance with changes in Applicable Law, or for the
reasonable accommodation of reasonable requests of Clients, so long
as any such amendments shall not materially increase the duties or
responsibilities of NDEx or the Firm hereunder.
2.6 No Exclusivity . The
engagement of NDEx by the Firm is on a non-exclusive basis, and
NDEx, in its sole discretion, may provide Foreclosure Trustee
Services to any other Person. 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 Services hereunder, NDEx will (i) be compensated on a per
file fee basis for files referred by the Firm to NDEx for
processing in accordance with the fee schedule set forth on
Exhibit A attached hereto (the " Initial Fee
Schedule ") and (ii) receive a monthly foreclosure trustee
administration fee (the " Foreclosure Trustee Administration
Fee ") in an amount set forth on the Initial Fee Schedule.
(b) Amended Fee
Schedules. On or before the forty-fifth (45th) day prior to an
Amended Fee Schedule Date, NDEx may propose to the Firm an
amended Fee Schedule (an " Amended Fee Schedule ") that will
be in effect for the next Fee Schedule 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 NDEx 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 NDEx,
then that Amended Fee Schedule shall be binding on the parties
hereto for the next Fee Schedule Period commencing on the
applicable Amended Fee Schedule Date. If the Firm does timely
deliver to NDEx an Objection Notice, the Firm and NDEx shall
thereafter negotiate with each other in good faith to agree upon an
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.
10
Amended Fee Schedule. If the Firm and NDEx are unable to agree
upon an Amended Fee Schedule within fifteen (15) days after an
Objection Notice has been given, then the existing Fee Schedule
shall remain in effect and NDEx shall thereafter have the option of
terminating this Agreement in its sole discretion in accordance
with Section 8.4 hereof
(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 NDEx in the performance of the 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. The Firm acknowledges and agrees that the
Title Work to be performed by NDEx Title and charges for posting of
files shall be treated as a third party expense to be billed
separately by NDEx Title and paid by the Firm in accordance with
the invoices received from NDEx Title.
(d) Taxes .
Notwithstanding anything to the contrary herein, the Firm
acknowledges and agrees that the fees set forth on 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 Services under this Agreement, the
Firm shall either (i) cause the Clients to pay such Sales Tax,
(ii) pay the Sales Tax itself, or (iii) provide NDEx with
a certificate or other proof, reasonably acceptable to NDEx,
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. If any amount of
Sales Tax is required to be paid, and is paid, by the Firm, the
amount of such Sales Tax paid will be deducted from the fees
payable by the Firm to NDEx hereunder.
3.2 Invoice and Payments .
(a) Invoice . Within
fifteen (15) days following the end of each calendar month
during the Term of this Agreement, NDEx shall submit an invoice to
the Firm (each a " Monthly Invoice ") indicating
(i) the number and types of files referred by the Firm to NDEx
for processing during the preceding month, (ii) the total
amount due to NDEx for such files referred during the preceding
month and (iii) the Foreclosure Trustee Administration Fee.
The first such Monthly Invoice shall be delivered on
September 2, 2008 (the " First Invoice ") and for this
Invoice only, the amount will equal [***] percent ([***]%) of the
product of (i) the number of Texas Foreclosure, HEL and
Eviction files created but not billed and (ii) the respective
Texas Foreclosure, HEL and Eviction file fees set forth on the
Initial 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 NDEx 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
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.
11
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.
(c) Payment . The Firm
shall pay each Invoice within fifteen (15) days after receipt
thereof. 3.3 Reasonable Value
. The Firm and NDEx 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 Services furnished by NDEx
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 NDEx 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 Exclusivity . During the
Term of this Agreement, the Firm shall engage only (i) NDEx to
provide Foreclosure Trustee Services on behalf of any Client and
(ii) NDEx Title to perform the Title Work on behalf of the
Firm, and in each case the Firm shall not retain, hire, employ, use
or engage any other Person to provide such services unless
specifically so directed in writing by a Client without the urging
or encouragement of the Firm or any partner of or owner in the
Firm. NDEx and NDEx Title shall each 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 Client
Engagement Letter, the Firm shall notify and, where required by the
terms or conditions of any Client Engagement Letter, obtain the
consent of its existing Clients and any new Clients of the
Firm’s intention to use NDEx to provide Foreclosure Trustee
Services. 4.3 Supervision of NDEx
Employees . The Firm agrees to cause its attorneys to provide
supervision of the employees of NDEx that are providing Foreclosure
Trustee Services in compliance with Applicable Law.
4.4 Support . Pursuant to
separate sublease agreements between NDEx Holdings and the Firm,
NDEx and the Firm shall permit each other’s employees to
(i) utilize each other’s office space without charge, as
the Parties shall mutually determine, acting reasonably and in good
faith, and (ii) provide access to, and the authorized use of,
all software, hardware, and assets owned or licensed by the Firm or
NDEx needed by the other to operate the Business and to adequately
and efficiently provide the 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 Services contemplated by this Agreement (collectively, the "
Office 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.
12
Products ") shall be the responsibility of NDEx.
Notwithstanding the foregoing, the Firm shall have no
responsibility for any Employee Expenses. The Firm shall provide to
NDEx 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 NDEx of all professional ethical
responsibilities relating to the Practice of Law (and any changes
thereto), as the same may be applicable to any services performed
by NDEx under this Agreement. The Firm will inform NDEx of and
cooperate with NDEx to assure tha
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