EXHIBIT 10.2
TRANSITION SERVICES AGREEMENT , dated as of August 10, 2009,
between OCWEN FINANCIAL CORPORATION, a Florida corporation (“
OCWEN ” or together with its Affiliates “
OCWEN Group ”), and ALTISOURCE SOLUTIONS S.à
r.l., a public limited liability company organized under the laws
of the Grand Duchy of Luxembourg and an indirect, wholly-owned
subsidiary of OCWEN (“ ALTISOURCE ” or together
with its Affiliates “ ALTISOURCE Group
”).
RECITALS
WHEREAS,
OCWEN and Altisource Portfolio Solutions S.A. (formerly known as
Altisource Portfolio Solutions S.à r.l., formerly known as
Ocwen Luxembourg S.à r.l.), the sole parent of ALTISOURCE
(“ ALTISOURCE Parent ”), are parties to a
Separation Agreement dated as of August 10, 2009 (the “
Separation Agreement ”), pursuant to which OCWEN will
(i) contribute to ALTISOURCE Parent the Altisource Business (as
defined in the Separation Agreement) and (ii) distribute (the
“ Distribution ”) to the holders of shares of
OCWEN’s outstanding capital stock all of the outstanding
capital stock of ALTISOURCE Parent;
WHEREAS,
following the Distribution, ALTISOURCE Parent will operate the
Altisource Business, and OCWEN will operate the OCWEN Business (as
defined in the Separation Agreement); and
WHEREAS,
following the Distribution, (i) ALTISOURCE desires to receive, and
OCWEN is willing to provide, or cause to be provided, certain
transition services in connection with the Altisource Business and
(ii) OCWEN desires to receive, and ALTISOURCE is willing to
provide, or cause to be provided, certain transition services in
connection with the OCWEN Business, in each case for a limited
period of time and subject to the terms and conditions of this
Agreement.
NOW,
THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained in this Agreement, the parties agree as
follows:
1.
Definitions .
(a) Capitalized
terms used herein and not otherwise defined have the meanings given
to such terms in the Separation Agreement.
(b) For
the purposes of this Agreement, the following terms shall have the
following meanings:
“
Affiliate ” means with respect to any Person (a
“Principal”) (a) any directly or indirectly
wholly-owned subsidiary of such Principal, (b) any Person that
directly or indirectly owns 100% of the voting stock of such
Principal or (c) a Person that controls, is controlled by or is
under common control with such Principal. As used herein,
“control” of any entity means the possession, directly
or indirectly, through one or more intermediaries, of the power to
direct or cause the direction of the management or policies of such
entity, whether through ownership of voting securities or other
interests, by contract or otherwise. Furthermore, with respect to
any Person that is partially owned by such Principal and does not
otherwise constitute an Affiliate (a “Partially-Owned
Person”), such Partially-Owned Person shall be considered an
Affiliate of such Principal for purposes of this Agreement if such
Principal can, after making a good faith effort to do so, legally
bind such Partially-Owned Person to this Agreement.
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“
Agreement ” means this Transition Services Agreement,
including the Schedules hereto and any SOWs entered into pursuant
to Section 2(b) .
“
Fully Allocated Cost ” means, with respect to
provision of a Service, the all-in cost of the Providing
Party’s provision of such Service, including a share of
direct charges of the function providing such Service, and
including allocable amounts to reflect compensation and benefits,
technology expenses, occupancy and equipment expense, and
third-party payments incurred in connection with the provision of
such Service, but shall not include any Taxes payable as a result
of performance of such Service.
“
OCWEN-Provided Services ” means the services set forth
on Schedule I and the SOWs related thereto.
“
ALTISOURCE-Provided Services ” means the services set
forth on Schedule II and the SOWs related
thereto.
“
Providing Party ” means a party in its capacity of
providing a Service hereunder.
“
Receiving Party ” means a party in its capacity of
receiving a Service hereunder.
“
Services ” means, as the context requires, the
OCWEN-Provided Services and the ALTISOURCE-Provided Services,
collectively or either of the OCWEN-Provided Services or the
ALTISOURCE-Provided Services.
“
SOW ” means a statement of work entered into between
the parties on an as-needed basis to describe a particular service
that is not covered specifically in a schedule hereto, but has been
agreed to be provided pursuant to the terms of this Agreement
except as otherwise set forth in such SOW.
2.
Provision of Services .
(a)
Generally . Subject to the terms and conditions of this
Agreement, (i) OCWEN shall provide, or cause to be provided, to
ALTISOURCE and the ALTISOURCE Group, solely for the benefit of the
Altisource Business in the ordinary course of business, the
OCWEN-Provided Services, and (ii) ALTISOURCE shall provide, or
cause to be provided, to OCWEN and the OCWEN Group, solely for the
benefit of the OCWEN Business in the ordinary course of business,
the ALTISOURCE-Provided Services, in each case for periods
commencing on the Distribution Date through the respective period
specified in Schedule I or Schedule II (the “
Service Period ”), unless such period is
earlier terminated in accordance with Section 5 .
(b)
Statements of Work . In addition to the services provided as
set forth on Schedule I and Schedule II , from time
to time during the term of this Agreement the parties shall have
the right to enter into SOWs to set forth the terms of any related
or additional transition services to be performed hereunder. Any
SOW shall be agreed to by each party, shall be in writing and (I)
shall contain: (i) the identity of each of the Providing Party and
the Receiving Party; (ii) a description of the Services to be
performed thereunder; (iii) the applicable performance standard for
the provision of such Service, if different from the Performance
Standard; (iv) the amount, schedule and method of compensation for
provision of such Service, which shall reflect the Fully Allocated
Cost of such Service; and (II) may contain (i) the Receiving
Party’s standard operating procedures for receipt of services
similar to such Service, including operations, compliance
requirements and related training schedules; (ii) information
technology support requirements of the Receiving Party with respect
to such Service; and (iii) training and support commitments with
respect to such Service. For the avoidance of doubt, the terms and
conditions of this Agreement shall apply to any SOW.
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(c) The
Services shall be performed on Business Days during hours that
constitute regular business hours for each of OCWEN and ALTISOURCE,
unless otherwise agreed. No Receiving Party, nor any member of its
respective Group, shall resell, subcontract, license, sublicense or
otherwise transfer any of the Services to any Person whatsoever or
permit use of any of the Services by any Person other than by the
Receiving Party and its Affiliates directly in connection with the
conduct of the Receiving Party’s respective business in the
ordinary course of business.
(d) Notwithstanding
anything to the contrary in this Section 2 (but subject to
the second succeeding sentence), the Providing Party shall have the
exclusive right to select, employ, pay, supervise, administer,
direct and discharge any of its employees who will perform
Services. The Providing Party shall be responsible for paying such
employees’ compensation and providing to such employees any
benefits. With respect to each Service, the Providing Party shall
use commercially reasonable efforts to have qualified individuals
participate in the provision of such Service; provided ,
however, that (i) the Providing Party shall not be obligated to
have any individual participate in the provision of any Service if
the Providing Party determines that such participation would
adversely affect the Providing Party or its Affiliates; and (ii)
none of the Providing Party or its Affiliates shall be required to
continue to employ any particular individual during the applicable
Service Period.
(e) Each
of OCWEN and ALTISOURCE acknowledges that the purpose of this
Agreement is to enable it to receive the applicable Services on an
interim basis. Accordingly, at all times from and after the
Distribution Date, each of OCWEN and the OCWEN Group, on the one
hand, and ALTISOURCE and the ALTISOURCE Group, on the other hand,
shall use commercially reasonable efforts to make or obtain, or
cause to be made or obtained, any filings, registrations,
approvals, permits or licenses; implement, or cause to be
implemented, any systems; purchase, or cause to be purchased, any
equipment; and take, or cause to be taken, any and all other
actions, in each case necessary or advisable to enable it to
provide for the Services for itself as soon as reasonably
practical, and in any event prior to the expiration of the relevant
Service Periods. For the avoidance of doubt, no Providing Party
shall be required to provide any Service for a period longer than
the applicable Service Period.
3.
Standard of Performance .
(a) The
Providing Party shall use commercially reasonable efforts to
provide, or cause to be provided, to the Receiving Party and the
Receiving Party’s Group, each Service in a manner generally
consistent with the manner and level of care with which such
Service was provided to the Altisource Business or the OCWEN
Business, as applicable, immediately prior to the Distribution Date
(or, with respect to any Service not provided prior to the
Distribution Date, generally consistent with the manner and level
of care with which such Service is performed by the Providing Party
for its own behalf) (the “ Performance Standard
”), unless otherwise specified in this Agreement.
Notwithstanding the foregoing, no Providing Party shall have any
obligation hereunder to provide to any Receiving Party (i) any
improvements, upgrades, updates, substitutions, modifications or
enhancements to any of the Services unless otherwise specified in
Schedule I or Schedule II , as applicable, or (ii)
any Service to the extent that the need for such Service arises,
directly or indirectly, from the acquisition by the Receiving Party
or any member of its Group, outside the ordinary course of
business, of any assets of, or any equity interest in, any Person.
The Receiving Party acknowledges and agrees that the Providing
Party may be providing services similar to the Services provided
hereunder and/or services that involve the same resources as those
used to provide the Services to its and its Affiliates’
business units and other third parties, and, accordingly, the
Providing Party reserves the right to modify any of the Services or
the manner in which any of the Services are provided in the
ordinary course of business; provided , however, that no
such modification shall materially diminish the Services or have a
materially adverse effect on the business of the Receiving
Party.
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(b) The
Providing Party will use commercially reasonable efforts not to
establish priorities, as between the Providing Party and its
Affiliates, on the one hand, and the Receiving Party and its
Affiliates, on the other hand, as to the provision of any Service,
and will use commercially reasonable efforts to provide the
Services within a time frame so as not to materially disrupt the
business of the Receiving Party. Notwithstanding the foregoing, the
Receiving Party acknowledges and agrees that, due to the
transitional nature of the Services, the Providing Party shall have
the right to establish reasonable priorities as between the
Providing Party and its Affiliates, on the one hand, and the
Receiving Party and its Affiliates, on the other hand, as to the
provision of any Service if the Providing Party determines that
such priorities are necessary to avoid any adverse effect to the
Providing Party and its Affiliates. If any such priorities are
established, the Providing Party shall advise the Receiving Party
as soon as possible of any Services that will be delayed as a
result of such prioritization, and will use commercially reasonable
efforts to minimize the duration and impact of such
delays.
4.
Fees for Services .
(a) As
compensation for a particular Service, the Receiving Party agrees
to pay to the Providing Party the Fully Allocated Cost of providing
the Services in accordance with this Agreement or, with respect to
any SOW, the amount set forth therein.
(b) The
Providing Party shall submit statements of account to the Receiving
Party on a monthly basis with respect to all amounts payable by the
Receiving Party to the Providing Party hereunder (the “
Invoiced Amount ”), setting out the Services provided,
and the amount billed to the Receiving Party as a result of
providing such Services (together with, in arrears, any Commingled
Invoice Statement (as defined below) and any other invoices for
Services provided by third parties, in each case setting out the
Services provided by the applicable third parties). The Receiving
Party shall pay the Invoiced Amount to the Providing Party by wire
transfer of immediately available funds to an account or accounts
specified by the Providing Party, or in such other manner as
specified by the Providing Party in writing, or otherwise
reasonably agreed to by the Parties, within 30 days of the date of
delivery to the Receiving Party of the applicable statement of
account; provided , that, in the event of any dispute as to
an Invoiced Amount, the Receiving Party shall pay the undisputed
portion, if any, of such Invoiced Amount in accordance with the
foregoing, and shall pay the remaining amount, if any, promptly
upon resolution of such dispute.
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(c) The
Providing Party may engage third-party contractors, at a reasonable
cost, to perform any of the Services, to provide professional
services related to any of the Services, or to provide any
secretarial, administrative, telephone, e-mail or other services
necessary or ancillary to the Services (collectively, the “
Ancillary Services ”) (all of which may be contracted
for separately by the Providing Party on behalf of the Receiving
Party) after giving notice to the Receiving Party, reasonably in
advance of the commencement of such Services and Ancillary Services
to be so provided by such contractors, of the identity of such
contractors, each Service and Ancillary Service to be provided by
such contractors and a good faith estimate of the cost (or formula
for determining the cost) of the Services and Ancillary Services to
be so provided by such contractors. The Receiving Party may, in its
sole discretion, decline to accept any such Services or Ancillary
Services to be provided by any such contractors by giving prompt
written notice to the Providing Party, provided that, if the
Receiving Party so declines any Service or Ancillary Service from
any such contractors, then thereafter, notwithstanding anything in
this Agreement to the contrary, the Providing Party shall be
excused from any obligation to provide such Service or Ancillary
Service.
(d) The
Providing Party may cause any third party to which amounts are
payable by or for the account of the Receiving Party in connection
with Services or Ancillary Services to issue a separate invoice to
the Receiving Party for such amounts. The Receiving Party shall pay
or cause to be paid any such separate third party invoice in
accordance with the payment terms thereof. Any third party invoices
that aggregate Services or Ancillary Services for the benefit of
the Receiving Party and its Group, on the one hand, with services
not for the benefit of Receiving Party and its Group, on the other
hand (each, a “ Commingled Invoice ”), shall be
separated by the Providing Party. The Providing Party shall prepare
a statement indicating that portion of the invoiced amount of such
Commingled Invoice that is attributable to Services or the
Ancillary Services rendered for the benefit of Receiving Party and
its Group (the “ Commingled Invoice Statement
”). The Providing Party shall deliver such Comming
