CONFIDENTIAL SERVICES AGREEMENT BETWEEN LAW OFFICES OF DAVID J. STERN, P.A. AND DJS PROCESSING, LLC DATED JANUARY 15, 2010
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
REDACTED
VERSION
CONFIDENTIAL
BETWEEN
LAW
OFFICES OF XXXXX X. XXXXX, P.A.
AND
DJS
PROCESSING, LLC
DATED
JANUARY 15, 2010
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
TABLE
OF CONTENTS
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Page
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RECITALS
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1
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ARTICLE
I.
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DEFINITIONS
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1
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ARTICLE
II.
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SERVICES
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1
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2.1
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Engagement
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1
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2.2
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Use
of Provider
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1
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2.3
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Non-Exclusive
Provision of Services
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1
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2.4
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Description
of Services
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2
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2.5
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Independence
of the Law Firm
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2
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2.6
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Standard
Operating Procedures
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2
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ARTICLE
III.
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CHANGES
TO SERVICES; CHANGE IN CIRCUMSTANCES
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2
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3.1
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Changes
to Services
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2
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3.2
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Service
Fees for Changed Services
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2
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3.3
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Provision
of Changed Services
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2
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3.4
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Change
in Circumstances
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3
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ARTICLE
IV.
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RIGHT
OF FIRST REFUSAL
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3
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4.1
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Additional
Law Firm Services
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3
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4.2
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Additional
Provider Services
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4
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ARTICLE
V.
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TERM
AND TERMINATION
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5
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5.1
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Commencement
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5
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5.2
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Initial
Term
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5
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5.3
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Renewal
Periods
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5
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5.4
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Termination
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5
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5.5
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Effects
of Termination
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6
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5.6
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Performance
Metrics Termination
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6
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5.7
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Survival
Following Termination
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6
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ARTICLE
VI.
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FACILITIES
AGREEMENT
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7
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ARTICLE
VII.
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SERVICE
FEES
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7
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7.1
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Services
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7
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7.2
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Reimbursed
Expenses
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7
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7.3
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Changes
to Fee Schedule.
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7
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i
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
7.4
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Billing
Process
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8
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7.5
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Payment
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9
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7.6
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Temporary
Service Fees
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10
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7.7
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Taxes.
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10
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7.8
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Ongoing
Services at Effective Date.
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11
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ARTICLE
VIII.
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PROVIDER
OBLIGATIONS
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11
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8.1
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Reliance
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11
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8.2
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Notice
of Adverse Circumstances
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11
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8.3
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Compliance
with Applicable Law
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11
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8.4
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Separation
of Services
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12
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8.5
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Conflict
Check; Waiver
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12
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8.6
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Review
of Procedures; Quality Control
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12
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8.7
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Standard
of Care
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12
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8.8
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Performance
Metrics
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13
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8.9
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Marketing
Materials
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13
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8.10
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Guaranteed
Payments
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13
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ARTICLE
IX.
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PRACTICE
OF LAW
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14
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ARTICLE
X.
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SCHEDULED
ASSESSMENTS
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14
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ARTICLE
XI.
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EXPENSES
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15
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ARTICLE
XII.
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INDEPENDENT
CONTRACTOR; USE OF SUBCONTRACTORS
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15
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12.1
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Independent
Contractor
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15
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12.2
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Subcontractors
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15
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ARTICLE
XIII.
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FIRM
OBLIGATIONS
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15
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13.1
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Notice
of Excluded File
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15
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13.2
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Client
Notification and Consent
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16
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13.3
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Firm
Personnel
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16
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13.4
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Firm
Information
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16
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13.5
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License
to Practice Law
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16
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13.6
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Compliance
with Applicable Law
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16
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13.7
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Professional
Ethical Requirements
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16
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13.8
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Review
of Procedures
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16
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13.9
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Notice
of Adverse Circumstances
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17
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ii
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
13.10
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Marketing
Materials
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17
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13.11
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Continuation
of Business
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17
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ARTICLE
XIV.
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ASSET
OWNERSHIP
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17
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14.1
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Intellectual
Property; Equipment.
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17
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14.2
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Reservation
of Rights/No Contest.
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17
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14.3
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Licenses.
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18
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ARTICLE
XV.
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RESTRICTIVE
COVENANTS
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19
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15.1
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Confidentiality
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19
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15.2
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Privileged
Information.
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20
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15.3
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Competition
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20
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15.4
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Recruitment
of Employees
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21
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15.5
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Limits
on Activities
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21
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15.6
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Equitable
Remedies
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21
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15.7
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Blue-Pencil
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21
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ARTICLE
XVI.
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INSURANCE
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21
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16.1
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Provider’s
Insurance
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21
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16.2
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Malpractice
Insurance
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22
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ARTICLE
XVII.
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INDEMNIFICATION
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22
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17.1
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Firm’s
Indemnity
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22
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17.2
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Provider’s
Indemnity
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23
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17.3
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Limitation
of Liability
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23
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17.4
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Indemnification
Procedures.
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23
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17.5
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Sole
and Exclusive Remedy
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25
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ARTICLE
XVIII.
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RECORDS;
AUDIT RIGHTS
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25
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18.1
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Maintenance
of Records
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25
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18.2
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Access
to Records
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25
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18.3
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Audit
Rights
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26
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ARTICLE
XIX.
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DISPUTE
RESOLUTION
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26
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19.1
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Exclusive
Procedures
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26
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19.2
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Negotiation
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26
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19.3
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Mediation
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26
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19.4
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Judicial
Enforcement
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27
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iii
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
ARTICLE
XX.
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GENERAL
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27
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20.1
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Notices
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27
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20.2
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Assignment
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28
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20.3
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Enforcement
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28
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20.4
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Governing
Law; Venue; Jurisdiction
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28
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20.5
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Change
in Applicable Law
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28
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20.6
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No
Third Party Beneficiaries
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28
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20.7
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Severability
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28
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20.8
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Construction.
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29
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20.9
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Force
Majeure
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29
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20.10
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Entire
Agreement; Amendment
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30
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20.11
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Counterparts;
Effectiveness
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30
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20.12
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Waiver
of Jury Trial
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30
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EXHIBIT
A
|
DEFINITIONS
|
A-1
|
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EXHIBIT
B
|
Description
of Services
|
X-0
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||
XXXXXXX
X
|
Xxx
Xxxxxxxx
|
X-0
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||
XXXXXXX
X
|
Expenses
|
D-1
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||
EXHIBIT
E
|
Performance
Metrics
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E-1
|
iv
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
This
Services Agreement (the “Agreement”)
is made as of the 15th of
January, 2010 (the “Effective
Date”), between the LAW
OFFICES OF XXXXX X. XXXXX, P.A., a Florida professional association, with
a place of business at 000 X. Xxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx
00000 (“Firm”)
and DJS PROCESSING, LLC,
a Delaware limited liability company with a place of business at 000 X. Xxxx
Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000 (“Provider”)
(each of Firm and Provider, a “Party”;
together, the “Parties”).
RECITALS
A. Firm
is engaged in the practice of law with its principal office in
Florida.
B. Firm
now desires to engage Provider as an independent contractor to provide Services
to Firm, upon the terms and conditions set forth in this Agreement.
AGREEMENT
ARTICLE
I.
DEFINITIONS
The
capitalized terms used in this Agreement (including the Exhibits) shall have the
meanings set forth in Exhibit
A attached hereto.
ARTICLE
II.
SERVICES
2.1 Engagement. Provider
agrees to provide to Firm, and Firm agrees to purchase from Provider, all
Services used in the conduct of Firm’s business.
2.2 Use of
Provider. Firm shall use Provider to provide any and all
Services used by Firm from time to time during the Term and shall not retain,
hire, employ, use or engage any employee or Person other than Provider to
provide Services, whether directly or indirectly, except (i) to the extent that
Provider is prohibited by Applicable Law from performing any such Service, (ii)
Services to be performed for any Excluded File, (iii) Services arising out of
Additional Law Firm Services for which Provider has declined to accept the
applicable offer in accordance with Section
4.1, and (iv) Services arising out of Additional Provider Services for
which Firm has declined to accept the applicable offer in accordance with Section
4.2.
2.3
Non-Exclusive Provision
of Services. Firm acknowledges and agrees that Provider is
providing Services to Firm under this Agreement on a non-exclusive basis and
that Provider may provide any services, including services that are the same or
substantially similar to the Services, to other Persons, including to law firms
other than Firm (the “Other
Firms”), in any jurisdiction. Notwithstanding the foregoing,
in no event shall Firm be required to direct and supervise the provision of
Services by Provider to third parties (whether or not such supervision is
required by Applicable Law).
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
2.4
Description of
Services. The Services to be provided by Provider under this
Agreement shall initially be those set forth in Exhibit
B attached
hereto, and shall also include Changed Services and additional Services pursuant
to Article
IV hereof, to be performed by Provider to the extent required, and as
contemplated by, the terms and conditions of this Agreement. Without
limiting the foregoing, the employees of Firm shall not provide Services for any
Included Files to any Client without the prior written consent of
Provider.
2.5
Independence of the Law
Firm. The Parties hereto acknowledge that Provider will not
provide Legal Services with respect to any Files, and Firm shall have complete
and absolute control over the methods by which the practice of law is conducted
by Firm. All matters involving the internal management, control, or
finances of Firm shall remain the sole responsibility of Firm and its
shareholders, and Provider shall have no authority whatsoever over Firm as it
relates to its practice of law. If the Service(s) to be provided
require the direction and supervision of an attorney employed or contracted by
Firm, then (i) Firm’s attorney(s) shall so direct and supervise the Service(s)
and the personnel providing those Service(s) on behalf of Provider and (ii) the
Firm, in its sole and absolute discretion, has the right to exclude any employee
or Subcontractor of Provider from being involved in the provision of such
Service(s) for the Firm if the Firm deems such action is necessary for Firm to
fulfill its obligations under Applicable Law. The Parties acknowledge
that Provider shall have no authority whatsoever to enter into, amend,
terminate, extend or renew any agreement or arrangement on behalf of Firm or any
employee or associate of Firm, or to bind Firm, in any way, without Firm’s prior
written consent.
2.6
Standard Operating
Procedures. Provider shall provide the
Services in accordance with standard operating procedures (“SOPs”)
formulated in compliance with Applicable Law. Until the Parties agree
otherwise, the SOPs shall be (i) those utilized by Firm in providing services to
the Clients prior to the Effective Date; (ii) communicated by Firm to Provider
and documented prior to the Effective Date; and (iii) amended from time to time
by the Parties in accordance with Article
III.
ARTICLE
III.
CHANGES TO SERVICES; CHANGE
IN CIRCUMSTANCES
3.1
Changes to
Services. If, at any time during the Term, Applicable Law,
Client demands, or best practices require any change in the scope or nature of
Services, or in the method, manner or means by which Services are performed,
excluding any Additional Law Firm Services as described in Section
4.1 or any
Additional Provider Services as described in Section
4.2, Provider at that time agrees to perform such changed, different
and/or additional Services (collectively, the “Changed
Services”), subject to the provisions of Section
3.2. Each Party shall provide notice to the other as soon as
commercially reasonable of the need for Changed Services and, subject to Section
2.2, Firm agrees to engage Provider for such Changed
Services.
3.2
Service Fees for Changed
Services. Any modification to the Services may result in an
adjustment to the Services Fees payable for such Services, as provided in Article
VII.
3.3
Provision of Changed
Services. If required by Applicable Law, the Client or the
Firm, Provider shall commence performing Changed Services prior to the time when
the Parties shall have reached agreement on any adjustment to the Service Fees,
if any, for such Changed Services.
2
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
3.4
Change in
Circumstances. The Parties acknowledge that, from time to
time, after the Effective Date, it may be necessary or desirable for either
Party to change or adjust the nature and/or structure of its
business. Accordingly, notwithstanding anything to the contrary
contained in this Agreement, each Party agrees to negotiate with the other in
good faith, at the request from time to time of the other Party, to adjust or
amend the terms and provisions of this Agreement to reflect such changes in the
nature and/or structure of the requesting Party’s business and to give effect to
the general financial intent of the Parties.
ARTICLE
IV.
RIGHT OF FIRST
REFUSAL
4.1
Additional Law Firm
Services. Provider shall have a right of first refusal to
provide any additional Services required by Firm in connection with Firm’s
provision of any Legal Services that are not of the nature or type conducted by
Firm as of the Effective Date (“Additional
Law Firm Services”) in accordance with this Section
4.1; provided that Provider demonstrates to Firm’s reasonable
satisfaction that it is able to provide the Additional Law Firm Services in
accordance with the standard of care set forth in Section
8.7 and subject to Section
15.5.
4.1.1 Notice. Firm will
give Provider written notice (a “Notice”)
of its intention to conduct the Additional Law Firm Services at least thirty
(30) days prior to its initiation of the Additional Law Firm
Services. The Notice shall offer Provider the right to perform all
Services necessary or incidental for Firm to conduct such Additional Law Firm
Services and set forth the proposed Service Fees and scope of Services required
with respect to the Additional Law Firm Services. Firm shall
determine such proposed Service Fees in good faith and at a reasonable level
based upon then current rates charged by other similar companies for such
services. If required by Applicable Law, a client of Firm or Firm,
Provider shall commence performing the Additional Law Firm Services prior to the
time when the Parties shall have reached agreement on any adjustment to the
Service Fees, if any, for such Additional Law Firm Services.
4.1.2 Offer and
Acceptance. Provider shall have 45 days after receipt of the
Notice (the “Offer
Period”) to accept such offer by giving Firm a written notice of
acceptance. During the Offer Period, both Parties will use
commercially reasonable efforts to reach a mutually satisfactory agreement
relating to terms and conditions for the provision of such Services, including
Service Fees relating thereto. The Parties will amend this Agreement
to include the agreed terms and conditions relating to such
Services. If Provider does not accept the offer in its entirety
during the Offer Period, Firm will have the right within 90 days after
expiration of the Offer Period, to retain a third party, which is not an
Affiliate of Firm, to provide such Services (other than those that Firm and
Provider have agreed will be provided by Provider) on terms and conditions that
are less favorable to the third party than the terms and conditions offered to
Provider in the Notice. If Firm does not consummate an agreement with
a third party within that 90-day period in accordance with the foregoing
limitations, the right of Firm to retain a third party to provide such Services
will terminate and Firm must again comply with the procedures set forth in this
Section
4.1.2 with respect to the provision of such Services.
3
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
4.1.3 Prohibition by Applicable
Law. This Section
4.1.3 will not apply to the extent Provider is prohibited by Applicable
Law from performing Additional Law Firm Services. In such case, Firm
must notify Provider of the requirement that a law firm provide such
Services. If requested in writing by Provider, Firm will use
commercially reasonable efforts to revise the proposal so as to permit Provider
to perform such Additional Law Firm Services in accordance with Section
4.1 and Applicable Law.
4.2
Additional Provider
Services. In the event that Provider offers new or additional
services required by Firm to conduct its business, Provider shall have a right
of first refusal to provide such new or additional services to Firm (“Additional
Provider Services”) in accordance with this Section
4.2; provided that Provider demonstrates to Firm’s reasonable
satisfaction that it is able to provide the Additional Provider Services in
accordance with the standard of care set forth in Section
8.7.
4.2.1 Notice. Provider
shall provide Firm with written notice of offering to provide the Additional
Provider Services the proposed Service Fees and scope of services required with
respect to the Additional Provider Services (the “Additional
Provider Services Notice”). Provider shall determine such
proposed Service Fees in good faith and at a reasonable level based upon then
current rates charged by other similar companies for such services.
4.2.2 Offer and
Acceptance. To the extent that Firm requires such Additional
Provider Services to conduct its business, Firm shall have 45 days after receipt
of the Additional Provider Services Notice (the “Additional
Provider Services Offer Period”) to accept such offer by giving Provider
a written notice of acceptance. During the Additional Provider
Services Offer Period, both Parties will use commercially reasonable efforts to
reach a mutually satisfactory agreement relating to terms and conditions for the
provision of such Additional Provider Services, including Service Fees relating
thereto. The Parties will amend this Agreement to include the agreed
terms and conditions relating to such Additional Provider
Services. If Firm does not accept the offer in its entirety during
the Additional Provider Services Offer Period, Firm will have the right to
continue to (i) use any third party previously used by Firm to provide such
Additional Provider Services (other than those services that Firm and Provider
have agreed will be provided by Provider) on terms and conditions that are less
favorable to the third party than the terms and conditions offered to Firm in
the Additional Provider Services Notice or (ii) provide such Additional Provider
Services itself. In the event that Firm (i) does not require the
Additional Provider Services at the time of receipt of the Additional Provider
Services Notice, but thereafter requires such services, (ii) engages a third
party to provide such services or (iii) changes the third party providing such
services or the terms upon which it engages a third party to provide such
services, then such services shall constitute Additional Law Firm Services
covered by Section
4.1.
4
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
4.2.3 Prohibition by Applicable Law or
Existing Agreement. This Section
4.2 will not apply to the extent Firm is prohibited by Applicable Law
from retaining Provider to provide the applicable Additional Provider Services
or the retention of Provider to provide the applicable Additional Provider
Services would be a breach of any existing agreement to which Firm is a
party. In such case, Firm must notify Provider of such prohibition
and, if requested in writing by Provider, use commercially reasonable efforts to
revise the proposal so as to permit Provider to perform such Additional Provider
Services in accordance with this Section
4.2, Applicable Law and existing agreements.
ARTICLE
V.
TERM AND
TERMINATION
5.1
Commencement. This
Agreement shall commence on the Effective Date.
5.2
Initial
Term. Unless terminated earlier in accordance with this Article
V, this Agreement will continue in full force and effect for an initial
term of twenty-five (25) years (the “Initial
Term”), subject to Section
5.3.
5.3
Renewal
Periods. Unless terminated earlier in accordance with this
Article
V, this Agreement shall automatically renew for successive additional
five (5) year periods after the Initial Term (each a “Renewal
Period”), unless either Party delivers to the other a written notice of
its intention not to renew this Agreement at least twelve (12) months prior to
the expiration of the Initial Term or any Renewal Period, in which case this
Agreement shall terminate at the expiration of that Initial Term or Renewal
Period, as the case may be. The Initial Term and any subsequent
Renewal Period shall hereinafter collectively be referred to as the “Term.”
5.4
Termination. This
Agreement may be terminated for any of the following reasons: (i) upon the
expiration of this Agreement in accordance with Sections
5.2 or 5.3; (ii) by written agreement of both Parties; (iii) by any Party
upon written notice to the other Party in the event that any governmental,
regulatory or judicial entity of competent jurisdiction shall have issued a
permanent injunction or other final order of decree which is not subject to
appeal or in respect of which all time periods for appeal have expired enjoining
or otherwise preventing any Party from performing, in any material
respect, this Agreement or any Service; (iv) upon written notice by one Party of
material breach of this Agreement or the Facilities Agreement by the other
Party, including, but not limited to, Section
8.7, and, if capable of cure, such breach remains uncured for a period of
one hundred twenty (120) days after such written notice of the material breach;
provided that, if Provider is terminating for a non-monetary breach by Firm or
due to an inability to increase the Service Fee pursuant to Article
VII, upon request of Firm, Provider must continue to provide the Services
to Firm for the period requested by Firm, up to six (6) months, on the
terms and conditions set forth in this Agreement; or (v) as provided in Section
5.6 below.
5
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
5.5
Effects of Termination.
Upon such termination of this Agreement, (i) Provider shall
continue to collect and receive from Firm all reimbursements and payments due to
Provider prior to the date of termination of this Agreement and for Services
required to be rendered by Provider following the termination of this Agreement;
(ii) in addition to Subsection (i), if requested by Firm, Provider will continue
providing Services for any Included File in progress at the time of termination
until such Included File is (a) closed, (b) becomes an Excluded File or (c)
until Firm is no longer handling such File; and Firm will continue to be
obligated to pay the Service Fees and all other amounts payable to Provider for
all such Included Files in existence at the date of termination for as long as
it continues to provide Services for such Included File and the Access Fee for
Excluded Files to the extent Firm uses Provider Intellectual Property Rights in
connection with such Excluded File; (iii) Firm will return to Provider and cease
to use all Confidential Information of Provider, all Provider Intellectual
Property Rights, and any third party information, except as required to conclude
work on Included Files in accordance with this Section
5.5 and Excluded Files for which an Access Fee is paid; (iv) Provider
will return to Firm and cease to use all Confidential Information of Firm and
all Intellectual Property Rights owned by Firm (which does not include any
Provider Intellectual Property Rights), except as required to conclude work on
Included Files in accordance with this Section 5.5
and on Excluded Files for which Firm has paid an Access Fee; and (v) Provider
will, for a period of seven (7) years after the Termination Date, maintain and
grant Firm access, at Firm’s cost, to the work performed on the Included Files
pursuant to this Agreement in accordance with Article
XVIII.
5.6
Performance Metrics
Termination. In the event that Provider consistently fails to
achieve the Performance Metrics, due to its own action or omission and not those
of any third party, with respect to Included Files of a Client, Firm shall
notify Provider of such failure to perform (the “Performance
Notice”), which Performance Notice shall contain (i) the detail of the
nature of such failure(s) to perform, and (ii) suggested steps to cure such
failure. Upon receipt by Provider of the Performance Notice, Provider
shall have one hundred twenty (120) days to work in good faith to resolve such
failures. If Provider is unable reasonably to resolve such failures,
Firm shall have the right to designate all Included Files of that Client as
Excluded Files. If requested by Firm, Provider will complete any and
all work in progress on any such File for such Client, and Firm shall pay
Provider the Service Fee for any such Files for which it completes the required
Services in accordance with the terms of this Agreement. Firm shall
be required to pay a percentage of the Access Fee for these Excluded Files based
upon the percentage of Services required to be rendered with respect to such
Excluded File following the date the File is designated as an Excluded File and
Firm shall have the right to the use of Provider Intellectual Property as
provided in Section
7.3.4 to provide Services to those Files.
5.7
Survival Following
Termination. Notwithstanding expiration or termination of this
Agreement (whether in whole or in part), (i) nothing in this Article
V shall in any way operate to impair or destroy any of the rights or
remedies of either Party of its obligations to comply with the provisions of
this Agreement which have accrued prior to the Termination Date, (ii) Firm will
remain liable to Provider for all Service Fees, and other amounts payable to
Provider under this Agreement and (iii) the provisions of Sections
2.5, 2.6, 8.1, 8.4, 8.5, 8.6, 8.8, 8.10, 13.3, 13.4 , 13.5, 13.6 and 13.10 and
Articles V, VII, IX, XI, XII, XIV, XV, XVI, XVII, XVIII and XX shall
survive termination of this Agreement indefinitely.
6
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
ARTICLE
VI.
FACILITIES
AGREEMENT
The
Parties acknowledge that, on the Effective Date, Provider and Firm have entered
into a Facilities Sharing Agreement for the sublease of a portion of the
premises to be occupied by Firm after the Effective Date (the “Facilities
Agreement”). The Parties acknowledge that either Party may
immediately terminate the Facilities Agreement upon termination or expiration of
this Agreement, in accordance with the terms and conditions of the Facilities
Agreement.
ARTICLE
VII.
SERVICE
FEES
7.1
Services. In consideration
for the performance of Services relative to each Included File, Firm shall pay
Provider the applicable fee as set forth on the Fee
Schedule, attached hereto as Exhibit
C (the “Service
Fees”). If at any time prior to the conclusion of a File, such
File is converted from one file type to another (e.g., from a foreclosure File
to a bankruptcy File), then a new File will be deemed to have been created on
the date of such conversion and to have been referred by Firm to Provider for
processing and Provider will be entitled to a new Service Fee in accordance with
the Fee Schedule for that File. In no case shall the payment of
Service Fees by Firm to Provider be interpreted or implied as permitting
Provider to share in Firm’s fees for Legal Services. Rather, the
payment of Service Fees by Firm to Provider is acknowledged as the Parties’
negotiated agreement establishing the reasonable value of the
Services.
7.2
Reimbursed
Expenses. Firm shall
reimburse Provider for all Client Reimbursements advanced by Provider in
connection with the performance of Services hereunder as provided in Sections
7.4 and 7.5. In the event that Firm is unable to secure reimbursement
from any Client for such amount due to Provider’s failure to submit timely such
costs to Firm, Firm shall not be obligated to make such reimbursement to
Provider.
7.3
Changes to Fee Schedule.
7.3.1 Either
Party may propose a Fee Schedule change if (i) changes in Applicable Law, Client
demands, Performance Metrics, or best practices, as determined by Firm or
Provider, materially changes Services required so as to increase or decrease
materially the cost of providing the Services; or (ii) the cost to provide the
Services increases or decreases materially, whether as a result of increases or
decreases in fees charged by third Parties or as a result of an increase or
decrease in the volume of Services provided, whether affecting Provider, the
industry in which Provider participates or the national, regional or global
economy generally. In determining whether there should be a change to
the Fee Schedule, all changes in Services or the cost to provide Services shall
be considered cumulatively until there is a change to the Fee Schedule
reflecting such change.
7.3.2 The
Party proposing an adjustment to the Fee Schedule must provide the other Party
written notice setting forth the proposed adjustment and the facts or
circumstances together with reasonable supporting information to support the
proposed adjustment. Such notice may be provided by (i) Xxxxx X.
Xxxxx or a person designated by Xx. Xxxxx on behalf of the Firm and (ii) a
person designated by majority vote of the members of the Board of Managers of
the Provider (who are not an owner, officer, employee or agent of the Firm)
shall be authorized to negotiate on behalf of Provider. The Fee
Schedule may not be adjusted more than twice each calendar year.
7
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
7.3.3 In
the event that Firm and Provider wish to amend the Fee Schedule, the Parties
agree to act in good faith and to use commercially reasonable efforts to seek to
reach an agreement mutually satisfactory to the Parties in connection with any
proposed amendment to the Fee Schedule that is permitted by this Article
VII. In the event that Xxxxx X. Xxxxx is the Chief Executive
Officer of the Provider, a person designated by majority vote of the members of
the Board of Managers of the Provider (other than Xxxxx X. Xxxxx or any other
owner, officer or employee or agent of the Firm) shall be authorized to
negotiate on behalf of Provider. If the Parties are unable to reach
agreement on any such proposed adjustment within sixty (60) days after notice of
such proposed adjustment, the Parties will cause promptly thereafter a
nationally recognized independent firm of public accountants (the “Arbitrator”)
reasonably satisfactory to both Parties to make a determination in writing,
within thirty (30) days, of the appropriate amendment to the Fee Schedule, which
determination shall be binding on the Parties. The Arbitrator’s
determination shall be made based upon the amount it reasonably determines is
required to fairly compensate Provider for the Services to be provided, taking
into consideration the relevant reasonable economic expectations of each of the
Parties when they entered into this Agreement and the economic needs of the Firm
in order for it to provide Legal Services to its Clients in accordance with
Applicable Law. The fees and expenses of the Arbitrator shall be
allocated equally between Provider and Firm. Each Party agrees that
it will, and each agrees to cause the Arbitrator to, cooperate in the
determination of any such adjustment to the Fee Schedule, including making
available to the other party and to the Arbitrator, to the extent necessary, any
books, personnel , records and work papers.
7.3.4 Access Fee. In the
event that any File is or becomes an Excluded File, Firm shall pay to Provider a
fee for the Firm’s use of Provider Intellectual Property in conjunction with the
handling and processing of said File(s) (the “Access
Fee”), consistent with the terms of this Article
VII and as set forth in the Fee Schedule attached hereto as Exhibit
C. With respect
to Files that become Excluded Files after work has been started on the Files,
the Access Fee shall be based upon the percentage of Services required to be
rendered with respect to such Excluded File following the date the File is
designated as an Excluded File. Following the termination of this
Agreement, Firm shall pay the Provider the Access Fee or the applicable
percentage thereof pursuant to this Section
7.3.4 of this Agreement, for any File of Firm with respect to which Firm
uses Provider Intellectual Property pursuant to the license set forth in Section
14.3 to the extent Firm has not or will not pay a full Service Fee for
such File or has not paid a full Access Fee for such File. The Access
Fee was mutually established by the Parties and represents a reasonable market
rate for the benefits provided.
7.4
Billing
Process. Provider will
submit invoices to Firm for all Service Fees (other than amounts payable under
Section
7.7) and Client Reimbursements (the “Invoice”)
on the following schedule:
|
(i)
|
Provider
may invoice the Firm for Client Reimbursements incurred by Provider at any
time after such Client Reimbursements are
incurred.
|
8
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
|
(ii)
|
Provider
may issue the first fee invoice (“First Invoice”) with respect to
foreclosure services rendered on a File once the Firm is permitted to
invoice its Clients, or, if earlier, sixty (60) days after the File is
referred to Provider. The First Invoice shall be for 75% of the
Service Fees payable with respect to foreclosure services rendered on a
File and shall reference any Client Reimbursements previously invoices but
not yet paid to Provider by the
Firm.
|
|
(iii)
|
Provider
may issue the second fee invoice (“Second Invoice”) with respect to
foreclosure services rendered on a File once the Firm is permitted to
invoice its Clients or, if earlier, three hundred thirty (330) days after
the File is referred to Provider. The Second Invoice shall be
for 25% of the Service Fees payable with respect to foreclosure services
rendered on the File and shall reference any Client Reimbursements
previously invoiced but not yet paid to Provider by the
Firm.
|
|
(iv)
|
In
all other cases, the Provider may invoice the Firm for services rendered
on a File (the “Non-Foreclosure Invoice”) once the Firm is permitted to
invoice its clients for these services or, if earlier, ninety (90) days
after the File is referred to Provider or as otherwise agreed by the
Provider and the Firm.
|
Provider
will, with each Invoice, provide to Firm such information as may be reasonably
requested by Firm to support the calculation of such Service
Fees. When invoicing its Clients, Firm will include in such invoices
all Client Reimbursements previously invoiced by Provider to Firm unless Firm
has already invoiced Client for such Client Reimbursements.
7.5
Payment. Firm agrees to
pay each invoice promptly, without notice, demand and without any set-off and,
in any event, no later than five (5) Business Days after Firm receives payment
of the invoice issued by Firm to its Client for (i) the Client Reimbursements
covered by Provider’s invoice, in the case of Client Reimbursements, and (ii)
legal services for which the Services covered by Provider’s invoice were
provided, in the case of Services, provided, however, that in no event shall
Firm’s payment of Service Fees occur more than ninety (90) days after the date
of Provider’s invoice to Firm for such Service Fees. If Firm defaults
on any amount payable to Provider pursuant to this Agreement for more than 30
days after its payment date as set forth in this Agreement, Firm will be
obligated to pay interest on such overdue amount from the date due, until paid,
at the prime rate as published in The Wall Street Journal, Eastern
Edition in effect at the time of such payment plus 2% per annum (the
“Default
Rate”). Interest payable under this Section
7.5 shall be calculated daily on the basis of a year of 365 days and the
actual number of days elapsed and compounded monthly, from the relevant date
when payment was due through the date of payment; provided that such interest
rate will not exceed the maximum rate permitted by Applicable
Law. All payments made by Firm hereunder will be applied first to
accrued but unpaid interest and then to amounts otherwise due under this
Agreement but unpaid. If Firm fails to pay the full amount due within
90 days of the date payment was due, such failure will be considered a material
breach of this Agreement (except to the extent of any invoiced amounts
reasonably disputed by Firm in good faith). In the event that Firm
has received payment from its Client on an Included File and has failed to pay
Provider for the Services rendered on such File as required by this Agreement,
then the Default Rate shall be increased by 5% per annum with respect to the
amount payable to Provider for Services for that File, and Provider shall be
permitted to offset the amount due to Provider for Services for that File
against amounts due by Provider to Firm under Section
8.10. Firm will maintain in force and effect its billing and
collection practices generally as they existed prior to the Effective Date, with
only such changes as are required from time to time by its Clients.
9
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
7.6
Temporary Service
Fees. If Provider provides any Services hereunder (including
Changed Services) during any period after an adjustment to the Fee Schedule has
been proposed but prior to the time when any resulting adjustment to the Fee
Schedule shall have been agreed by the Parties or determined by the Arbitrator,
the Service Fees payable for such Services until the time of such agreement or
determination (the “Temporary
Service Fees”) shall be equal to the Service Fees existing prior to such
proposal. At such time when the resulting Service Fees for such
Services are agreed or so determined by the Arbitrator, (i) the applicable
adjustment to the Fee Schedule for such Services will be effective as of the
date when the adjustment was first proposed, notwithstanding the fact that the
amount of such adjustment may not have been agreed by the Parties or so
determined by the Arbitrator until a later date, (ii) the Firm shall be required
to pay to Provider any amount by which the aggregate Service Fees payable for
such Services (based upon the Service Fees as ultimately agreed by the Parties
or so determined by the Arbitrator) exceeds the aggregate Temporary Service Fees
actually paid for such Services and (iii) Provider shall be required to pay to
the Firm any amount by which the aggregate Temporary Service Fees actually paid
for such Services exceeds the aggregate Services Fees payable for such Services
(based upon the Service Fees as ultimately agreed by the Parties or so
determined by the Arbitrator). Firm or Provider, as the case may be,
shall submit invoices for all amounts payable by the other party promptly after
the applicable adjustment to the Fee Schedule has been agreed by the Parties or
determined by the Arbitrator in accordance with this Section
7.6. Any amount payable by Firm or Provider pursuant to this
Section
7.6 shall be payable as provided in Section
7.5.
7.7
Taxes.
7.7.1 Amounts
payable by either of Firm or Provider hereunder are exclusive of any applicable
withholding, sales, use, excise, services or similar tax (any such tax, a “Sales
Tax”), which may be assessed on the provision of Services
hereunder. If any Sales Tax is assessed on the provision of any
Services under this Agreement, Firm shall either (i) pay directly or reimburse
or indemnify Provider for such Sales Tax, or (ii) provide Provider with a
certificate or other proof, reasonably acceptable to Provider, evidencing an
exemption from liability for such Sales Tax. All amounts under this
Agreement and in any Fee Schedule are expressed exclusive of Sales
Taxes.
7.7.2 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.
10
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
7.8
Ongoing
Services at Effective Date.
7.8.1 Provider
shall provide foreclosure Services on all of Firm’s open Files at the Effective
Date, except as otherwise provided in Section
2.2, on the following basis: (a) with respect to Files that
have been open less than two hundred forty (240) days, if there have been no
xxxxxxxx by Firm to its Client on the File, then Provider may xxxx Firm for one
hundred (100%) percent of the foreclosure Service Fees on such File in
accordance with Section
7.4, (b) with respect to Files that have been open less than two hundred
forty (240) days, if there has been one billing by Firm to its Client on the
File, then Provider may xxxx Firm for twenty-five (25%) percent of the
foreclosure Service Fees on such File and (c), with respect to Files that have
been open more than two hundred forty (240) days, if Firm bills its Client with
respect to such file after the Effective Date, then Provider may xxxx Firm for
twenty-five (25%) percent of the foreclosure Service Fees on such
File. In all other cases, Provider may not xxxx Firm for any
foreclosure Service Fees on such File.
7.8.2 Provider
shall provide all other Services on all of Firm’s open Files at the Effective
Date, except as otherwise provided in Section
2.2, on the following basis: if the Firm bills its client for any service
after the Effective Date, then Provider shall be permitted to xxxx Firm for any
Services provided by Provider relating thereto at one hundred (100%) percent of
its Service Fee.
7.8.3 All
billing and payments on Services covered by this Section
7.8 shall be in accordance with Sections
7.4 and 7.5, except for Files covered by Section
7.8.1(c)(i), which shall be billed at the time Firm bills its Client on
such File.
ARTICLE
VIII.
PROVIDER
OBLIGATIONS
8.1
Reliance. Provider
shall be entitled to rely upon the genuineness, validity and truthfulness of any
instruction, notice, document, instrument, certificate or other writing provided
to it by Firm in connection with the performance of Services hereunder unless
such instruction, notice, document, instrument, certificate or other writing
appears on its face to be fraudulent, false or forged.
8.2
Notice of Adverse
Circumstances. Provider agrees to notify Firm promptly of the
occurrence of any event that would, or would reasonably be expected, to result
in a material adverse effect upon the business, operations, assets or financial
condition of Provider or Firm, including: (a) commencement of
litigation, investigation or other proceeding to which Provider is a party
before any Governmental Body; (b) any claim that Provider’s activities do not
comply with Applicable Law; or (c) any complaint from a Client. Such
notice shall provide sufficient details and information to enable Firm to
appreciate the substance of the matter giving rise to the notice, and Provider
shall promptly provide such additional information regarding the matter
addressed by the notice as Firm may reasonably request.
8.3
Compliance with
Applicable Law. Provider agrees to perform Services hereunder
in compliance with all Applicable Law.
11
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
8.4 Separation
of Services. Provider agrees to use commercially reasonable
efforts to separate any services that it may, from time to time, perform for its
clients who are not Clients of Firm (the “Non-Firm
Clients”) from services it performs for Clients of
Firm.
8.5 Conflict
Check; Waiver. Whenever Provider proposes to provide any
services to a party, other than a Client of Firm, Provider shall cooperate with
Firm to comply with any professional or ethical requirements to which Firm is
subject in using a provider of Services with a multiple customer
base. Examples of such requirements may include, but are not limited
to, requirements related to confidentiality and avoiding conflicts of
interests. Provider agrees to perform a conflicts check in accordance
with the procedures established from time to time by Firm (as notified to
Provider) to determine whether a potential conflict of interest exists relating
to the provision of services to a Non-Firm Client and the provision of Services
under this Agreement to Clients. Subject to any confidentiality
obligations under the terms of any written agreement with a third party or under
Applicable Law, if the results of such conflicts check reveal a potential
conflict of interest, Provider agrees immediately to notify Firm of such
potential conflict. If waivers of the conflict cannot be obtained,
then Provider shall not provide services to the Non-Firm Client except for
services of the type provided prior to the date when the conflict
arose. If the provision by Provider of any Services for a Client of
Firm would constitute a conflict of interest under Applicable Law as a result of
services being rendered for a pre-existing Non-Firm Client, (i) Provider will
not, without obtaining the prior written consent of Firm, perform such Services
and (ii) the File for such Client will become an Excluded File and Firm shall be
obligated to pay the applicable Access Fee for such File in accordance with
Article
VII.
8.6 Review
of Procedures; Quality Control. On a regular basis throughout
the Term, Provider shall review its internal policies, procedures, training
programs, forms and other relevant materials to ensure that the provision of
Services hereunder is at all times in accordance with Applicable
Law. Provider shall carry out a written program to monitor the
quality of the Services provided by Provider, which program shall be subject to
review and approval by Firm, which approval shall not be unreasonably withheld,
delayed or conditioned. If any dispute shall arise between Firm and
Provider regarding the quality of Services supervised by the Firm pursuant to
Section
2.5 and required changes in SOPs to improve the quality of such Services,
that cannot be resolved as provided in Sections
19.2 and 19.3, then Provider shall implement any such changes in SOPs
required by the Firm.
8.7 Standard
of Care. Provider hereby warrants that it at all times shall
perform the Services with the same degree of care, skill and diligence with
which Firm historically has performed such services for the benefit of itself
and its subsidiaries, if any, prior to the date of this Agreement, and in any
event with at least the degree of care, skill and diligence that is customary in
the industry and in accordance with any performance metrics specified by Firm’s
Clients. Provider also warrants that the Services shall be performed
in a good, professional, and workmanlike manner by qualified
personnel. Without limiting Firm’s rights under Section
5.4, in the event of a breach of any of the foregoing warranties, or any
other defective or non-confirming Services, Provider shall promptly re-perform
such Services at no additional charge to Firm and, if a recurring deficiency,
undertake appropriate corrective actions to prevent future
occurrences.
12
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
8.8 Performance
Metrics. Provider shall not consistently fail to meet the
Performance Metrics due to its own action or omission and not those of any third
party. Provider shall provide monthly reporting regarding failures by
Provider to meet the Performance Metrics, as set forth in Exhibit
E. The Parties agree to review annually the Performance
Metrics and determine whether adjustments are required for changes in
circumstances, including technological advances, changes in methods, or changes
to Services reasonably requested by Firm. If Provider consistently
fails to meet the Performance Metrics, Provider shall (i) promptly investigate
and perform an analysis to identify the cause of the failure; (ii) provide to
Firm a report on the causes of the problem; (iii) correct the problem, at the
sole cost and expense of Provider, to the extent such problem is within
Provider’s control; (iv) take appropriate preventive measures to reduce the
probability of recurrence, if the problem is within Provider’s control; (v) take
appropriate actions to mitigate the adverse effects of the problem prior to its
correction; and (vi) periodically advise Firm of the status of remedial efforts
being undertaken with respect to such problems.
8.9 Marketing
Materials. Provider may not use the name of Firm in any
marketing materials without the prior written consent of
Firm. Provider may not use the name of any Client of Firm in any
marketing materials without the prior written consent of the
Client. Provider may seek the consent of Client only as authorized by
Firm. All marketing materials used or distributed by Provider must be
in accordance with Applicable Law.
8.10 Guaranteed
Payments. Subject to Section
7.5,
Provider shall make payments to Firm as provided in this Section
8.10 in the event that Firm does not generate at least Two Million and
00/100 Dollars ($2,000,000.00) annually in Adjusted EBITDA for the first four
(4) years following the Effective Date (the “Measurement
Period”). Adjusted EBITDA will be calculated for each calendar
month during the Measurement Period, the calendar years ended December 31, 2010,
2011 and 2012 and 2013; provided that the calculation for the calendar year
periods shall be based upon Firm’s audited financial statements for such years,
prepared in accordance with GAAP, and audited by an independent certified public
accounting firm selected by the Firm and approved by Provider, which approval
will not be unreasonably withheld. “Adjusted
EBITDA” shall equal Firm’s EBITDA, (a) less, to the extent not included
in EBITDA for the applicable period, reserves for uncollectible accounts
receivable, (b) plus, to the extent included in EBITDA for the applicable
period, any net loss arising from the sale, other disposition, write-down or
abandonment of capital assets, (c) plus, to the extent included in EBITDA for
the applicable period, any net loss arising from or represented by items that
would in accordance with GAAP require separate treatment or classification in
the preparation of Firm’s financial statements as extraordinary items, (d) plus,
to the extent included in EBITDA for the applicable period, (i) any expenses in
excess of $2,000,000 related to (A) Xxxxx X. Xxxxx’x travel and Firm’s promotion
costs, (B) Xxxxx X. Xxxxx’x salary, bonus and benefits at Firm in excess of Four
Hundred One Thousand Two Hundred Eighteen and 00/100 Dollars ($401,218.00),
(C) other compensation or payments to Xxxxx X. Xxxxx or his affiliates, (D) for
periods beginning after December 31, 2009, Excess Attorney Cost, or (E) real
estate rental and/or lease expenses in excess of those provided in the
Facilities Agreement; (e) less, to the extent included in EBITDA for the
applicable period, any net gain arising from the sale or other disposition of
capital assets and (f) less, to the extent included in EBITDA for the applicable
period, any net gain arising from or represented by items that would in
accordance with GAAP require separate treatment or classification in the
preparation of Firm’s financial statements as extraordinary items. An
estimated reimbursement payment of One Hundred Sixty Six Thousand Six Hundred
Sixty Seven and 00/100 Dollars ($166,667.00) per month will be made by Provider
to Firm within fifteen (15) days following each month end for each month during
the Measurement Period. After delivery to Provider of monthly
financial statements of Firm (with a calculation of such month’s Adjusted
EBITDA), Provider and Firm will mutually agree on any “true-up” payments due to
or from Firm or Provider (as the case may be) in order for Firm to achieve
$166,667 of Adjusted EBITDA for the previous month so that Provider only pays
Firm the amount, if any, required for the Adjusted EBITDA to at least equal
$166,667 for that month. In addition, within thirty (30) days
following delivery of the final audited financial statements of Firm (with a
calculation of such year’s Adjusted EBITDA) for each year through December 31,
2013, but in no case later than April 30 of the following year,
Provider and Firm will mutually agree on any “true-up” payments due to or from
Firm or Provider (as the case may be) so that Provider only pays Firm the
amount, if any, required for the Adjusted EBITDA to at least equal the targeted
$2,000,000 of Adjusted EBITDA for the calendar year covered by those financial
statements.
13
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
ARTICLE
IX.
PRACTICE
OF LAW
The
Parties acknowledge that Provider does not intend, and is not authorized or
qualified, to engage in any activity that constitutes the practice of
law. To the extent any act or service required to be performed by
Provider pursuant to this Agreement is construed to constitute the practice of
law by a court of competent jurisdiction or by any Governmental Body charged by
law with regulating the practice of law, the requirement to perform that act or
service shall be deemed waived and unenforceable. To the extent
required by Applicable Law, all employees of Provider and any Subcontractors
performing Services for any Included Files will do so under the supervision of
an attorney employed by Firm. Provider and Firm each agrees to ensure
that its respective signs, forms, letterhead, advertising and other materials
contain no information that is inconsistent with the fact that Provider provides
Services only and not Legal Services, that Firm provides Legal Services, that
they are separate businesses and that neither performs the work or services of
the other (except as otherwise provided under this Agreement). The
Parties each acknowledge and agree that no benefit to Provider under this
Agreement requires or is in any way contingent upon the recommendation, referral
or any other arrangement by Provider for the provision of any Legal Services or
other service offered by Firm.
ARTICLE
X.
SCHEDULED
ASSESSMENTS
The
Parties shall hold assessment meetings (the “Assessments”)
once each calendar quarter on a date mutually agreed upon by the Parties, and at
such times between such quarterly meetings as the Firm may reasonably require,
to discuss matters relating to this Agreement, including to assess any proposed
changes to the Service Fees, SOPs, Performance Metrics or any amounts
payable hereunder as contemplated hereby, any anticipated needs or proposals for
Changed Services, any proposed changes to the monitoring or supervision of
Services or monitoring of Legal Services, any complaint to or other grievance
filed by a Client against Firm that relates to or involves Provider or the
relationship between Provider and Firm, the Services or this Agreement, and any
other operational, strategic, or other issues or matters arising in connection
with this Agreement. The Parties intend that information exchanged at
such Assessments will be in addition to ongoing communication throughout the
Term between representatives of Provider and Firm with respect to this
Agreement.
14
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
ARTICLE
XI.
EXPENSES
During
the Term of this Agreement, the Parties agree that each party shall be
responsible for the performance of certain activities and the payment of certain
expenses as set forth in Exhibit
D, “Expenses”, attached hereto and incorporated herein by
reference.
ARTICLE
XII.
INDEPENDENT
CONTRACTOR; USE OF SUBCONTRACTORS
12.1 Independent
Contractor. Provider is an independent contractor and nothing
in this Agreement, or related to Provider’s performance under this Agreement,
shall be construed to create an employee relationship between Firm and Provider
or any Provider consultant or subcontractor (each a “Subcontractor”). Provider
will be responsible for (i) selecting, hiring, training and supervising (except
for the supervision and monitoring required by Applicable Law to be provided by
Firm) all employees and other staff of Provider who provide Services for
Included Files. Provider shall timely pay all benefits and
compensation of such employees and other personnel and all other employees and
other personnel of Provider, consistent with the Allocation of Expenses in Exhibit
D.
12.2 Subcontractors. Provider
shall generally perform the Services required to be supervised by an attorney
authorized to practice law in Florida (which are to be supervised by the Firm)
(the “Supervised
Services”) through its own staff or the staff of its
Affiliates. When Provider is not able to provide the Supervised
Services itself or through its Affiliates, and in providing Services other than
the Supervised Services, Provider may, in its discretion, utilize Subcontractors
to provide the Services hereunder other than (i) any Subcontractor that the
applicable Client prohibits Firm or Provider from using, or requires Firm or
Provider to cease using, and (ii) any Subcontractor that Applicable Law
prohibits Firm or Provider from using; provided that Provider will remain
ultimately responsible for ensuring that the Services are provided to Firm in
accordance with the terms and conditions of this Agreement, and that each
Subcontractor shall agree to be bound by the provisions of Article
XV regarding Confidential Information. Firm may require
Provider to use any Subcontractor specified by Firm if (i) the applicable Client
requires Firm or Provider to use such Subcontractor (without Firm or any of its
Affiliates having caused the Client to, or otherwise having suggested, that the
Client impose such requirement) or (ii) Firm reasonably believes that the use of
such Subcontractor is necessary for Firm or Provider to fulfill its obligations
under Applicable Law.
ARTICLE
XIII.
FIRM
OBLIGATIONS
13.1 Notice
of Excluded File. Firm shall not provide (or engage any other
Person to provide) any Services or any further Services for an Excluded File
until it has notified Provider in writing that such File is or has become an
Excluded File. Firm may make arrangements with another Person to
provide all or part of any Services for any Excluded File or may provide the
Services itself.
15
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
13.2 Client
Notification and Consent. Firm will (i) prior to the Effective
Date, notify its Clients of the arrangements described in this Agreement and the
formation and ownership of Provider and (ii) use commercially reasonable
efforts to obtain the consent of its Clients thereto, to the extent required by
Applicable Law or by the terms of any agreement between Firm and any Client and,
if such consent is not obtained, Files from such Client will be Excluded
Files. Firm will provide a copy of, and Provider shall have the right
to review and comment on, any such notification prior to delivery to any
Clients. Copies of any such consents obtained from Clients shall be
provided to Provider.
13.3 Firm
Personnel. Firm will be responsible for selecting, hiring,
training and supervising all employees and other personnel of Firm who provide
Legal Services. Firm shall timely pay all benefits and compensation
of such employees and personnel and all other employees and other personnel of
Firm.
13.4 Firm
Information. Firm shall make available on a timely basis to
Provider all information requested by Provider and that is reasonably necessary
to enable Provider to provide the Services; provided
that, Provider shall not be responsible for any failure to perform
Services to the extent caused by the insufficiency or inaccuracy of information
so requested or provided. Subject to the obligations of the Parties
to protect the confidential information of Clients of Firm, Firm shall give
Provider reasonable access, during normal business hours and at such other times
as are reasonably required, to Firm’s premises to the extent reasonably
necessary to enable Provider to perform the Services. Provider shall
use its reasonable efforts to provide Services in a manner that does not disrupt
Firm’s normal business activities.
13.5 License
to Practice Law. Firm will comply with Rule 4-8.6, Authorized
Business Entities, of the Rules Regulating the Florida Bar, including that Firm
will engage in the practice of law in the State of Florida only through
officers, directors, agents and employees who are qualified to practice law in
the State of Florida, and
will provide to its Clients the services of attorneys authorized to practice law
in said jurisdiction that are sufficient
to provide the Legal Services required on the Included Files and will supervise
Services through persons with sufficient competency and experience in the
applicable area of law.
13.6 Compliance
with Applicable Law. Firm agrees to provide Legal Services to
Clients with respect to Included Files, in compliance with all Applicable
Law.
13.7 Professional
Ethical Requirements. From and after the Effective Date, Firm
agrees to inform Provider of all professional ethical responsibilities with
respect to Provider’s performance of Services, and shall cooperate with Provider
to ensure that all Client Confidences and Secrets will be protected and
maintained to the fullest extent required by any professional ethics rules
applicable to Firm’s practice of law.
13.8 Review
of Procedures. On a regular basis throughout the Term, Firm
shall review its internal policies, procedures, training programs, forms and
other relevant materials to ensure that the provision of Services hereunder is
at all times in accordance with Applicable Law.
16
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
13.9 Notice
of Adverse Circumstances. Firm agrees to notify Provider
promptly of the occurrence of any of the following events that would, or would
reasonably be expected to result in a material adverse effect upon the business,
operations, assets or financial condition of Firm, (and to provide such details
and information as reasonably requested by Provider relating thereto) including:
(a) the commencement of any litigation, investigation or other proceeding to
which Firm, or any attorney employed by Firm relating to his employment by Firm
or his practice of law, is a party before any Governmental Body; (b) the
termination by any Client of its engagement of Firm (or any Client ceasing to
use Firm); (c) Firm’s acceptance of any new Excluded File; (d) any managing
member of Firm who is an attorney ceasing to be employed by Firm for any reason
whatsoever; (e) any change in disbursements payable by Client to Firm; or (f)
any claim (whether actual or, to its knowledge, threatened) that the performance
of any services by Firm or Provider is not in compliance with Applicable
Law. Firm agrees to notify Provider immediately of any disciplinary
actions or malpractice actions initiated against any attorney of Firm, including
in the notice a statement of the underlying facts and circumstances alleged in
the action.
13.10 Marketing
Materials. Firm may not use the name of Provider in any
marketing materials without the prior written consent of
Provider.
13.11 Continuation
of Business. Firm agrees to use commercially reasonable
efforts to continue to conduct its business in the ordinary course consistent
with past practice for a period of at least five (5) years from the Effective
Date.
ARTICLE
XIV.
ASSET
OWNERSHIP
14.1 Intellectual
Property; Equipment.
14.1.1 It
is hereby acknowledged and agreed that Provider shall retain all right, title
and interest in and to any and all inventions, technological developments,
intellectual property and proprietary rights, whether or not patentable or
registrable under copyright or similar laws, made or received or reduced to
practice by Provider, either alone or jointly with Firm, during the Term of this
Agreement.
14.1.2 All
procedures, methods, systems, strategies, Firm’s intellectual property rights,
tools, equipment, facilities and other resources owned by Firm are expressly
retained by Firm and will remain the exclusive property of Firm.
14.2 Reservation
of Rights/No Contest.
14.2.1 All
rights in Provider Intellectual Property Rights (as defined below) not expressly
granted to Firm herein are expressly reserved to Provider. Firm
agrees not to (and will ensure that its Affiliates do not) directly or
indirectly question, attack, contest or in any other manner impugn the value,
validity or enforceability of any Provider Intellectual Property Rights,
including in any action in which enforcement of a provision of this Agreement is
sought. Firm will not voluntarily become a party adverse to Provider
in any claim, action, suit, arbitration, litigation or other proceeding anywhere
in the world in which a third party contests the validity of any Provider
Intellectual Property Rights.
17
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
14.2.2 All
rights in Firm’s intellectual property rights not expressly granted to Provider
herein are expressly reserved to Firm. Provider agrees not to (and
will ensure that its Affiliates do not) directly or indirectly question, attack,
contest or in any other manner impugn the value, validity or enforceability of
any Firm intellectual property rights, including in any action in which
enforcement of a provision of this Agreement is sought. Provider will
not voluntarily become a party adverse to Firm in any claim, action, suit,
arbitration, litigation or other proceeding anywhere in the world in which a
third party contests the validity of any Firm intellectual property
rights.
14.3 Licenses.
14.3.1 Provider
hereby grants to Firm a royalty-free, non-transferable, non-exclusive,
non-sublicensable, limited license to use all intellectual property rights of
Provider (other than any trademarks, service marks, trade dress, logos, domain
names, rights of publicity, trade names, corporate names, business and marketing
plans, customer and supplier lists and, whether or not confidential, business
information relating to any customer of Provider, other than Firm, (including
pricing and cost information)) (the “Provider
Intellectual Property Rights”) during and six (6) months after the Term
solely for the purpose of conducting, and solely to the extent necessary to
conduct, its business in respect of Included Files and Excluded Files for which
an Access Fee is paid in accordance with the terms and conditions of this
Agreement. For avoidance of doubt, nothing in this Agreement shall
grant or be construed to grant Firm any right to sublicense or permit any third
party to use Provider Intellectual Property Rights, including any third party
providing services to Firm with respect to any Excluded Files. If
Firm makes or develops any improvements, derivative works, modifications or
other enhancements or works based in any way on Provider Intellectual Property
Rights (collectively, “Improvements”),
Firm hereby assigns and conveys and agrees to assign and convey all of its
right, title and interest in and to such Improvements to Provider.
14.3.2 Upon
the expiration of the foregoing license, Firm shall promptly return to Provider
any Provider Intellectual Property Rights in the possession of Firm, together
with all tangible embodiments thereof, and shall have no further right or
license to use such Provider Intellectual Property Rights
18
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
ARTICLE
XV.
RESTRICTIVE
COVENANTS
15.1 Confidentiality. Provider
and Firm each acknowledges that it may receive Confidential Information from the
other in connection with the performance of their respective obligations under
this Agreement. Neither Provider nor Firm will disclose or use any
Confidential Information of the other Party without the prior written consent of
such other party, except as required for the performance by Provider of Services
hereunder or the performance by Firm of Legal Services to Clients with respect
to Included Files, as the case may be, or as otherwise contemplated by this
Agreement, including servicing of Excluded Files as permitted by this Agreement,
except that the Confidential Information or portions thereof may be disclosed
within the internal organization of the party receiving such Confidential
Information (the “Receiving
Party”) and to its subsidiaries, affiliates, consultants, contractors or
other third parties serving as its legal, accounting, financial, investment or
other advisors who need to know such information for the purpose of assisting
the Receiving Party in the conduct of its business; provided that (i) the
Receiving Party shall inform each such party and its personnel of the
confidentiality of the information being provided and of the provisions of this
Agreement; (ii) they shall agree to abide by and be bound by the provisions of
this Agreement; and (iii) the Receiving Party hereby agrees to be responsible
for any breach of this Agreement by any such person; provided, however,
Privileged Information may only be disclosed by Provider as provided in Section
15.2. Each party will keep such Confidential Information
confidential and will use commercially reasonable efforts to ensure that its
Affiliates and officers, directors, employees, personnel, agents and
representatives (the “Representatives”)
who have access to such Confidential Information comply with such non-disclosure
and non-use obligations.
15.1.1 Nothing
in this Agreement shall permit the disclosure of any Confidential Information
that constitutes a trade secret under Applicable Law at any time.
15.1.2 Neither
Party shall be under any obligation with respect to any Confidential Information
if it is or becomes part of the public domain other than by breach of this
Agreement by either Party.
15.1.3 Notwithstanding
the foregoing, a Receiving Party and its Representatives may disclose
Confidential Information as and to the extent required by Applicable Law (as
applicable, the “Disclosing
Party”), provided that the Disclosing Party provides notice to the
non-disclosing party of the anticipated disclosure a reasonable time prior to
such disclosure. In the event that the Receiving Party or any of its
Representatives receives a request under Applicable Law to disclose all or any
part of the information contained in the Confidential Information, the Receiving
Party agrees to (i) immediately notify the Disclosing Party of the existence,
terms and circumstances surrounding such a request; (ii) consult with the
Disclosing Party on the advisability of taking legally available steps to resist
or narrow such request, and (iii) if disclosure of such information is required,
upon request by the Disclosing Party, cooperate with the Disclosing Party at the
Disclosing Party’s expense in obtaining an order or other reliable assurance
that confidential treatment will be accorded to such portion of the information
which the Disclosing Party so designates. Nothing contained herein
will require either Provider or Firm or any other Persons mentioned above to
fail to honor a subpoena, court or administrative order or a requirement of
Applicable Law on a timely basis.
15.1.4 The
Parties recognize that there is a risk that electronic confidential
communications between Firm and Provider may be intercepted by third parties not
associated with the Parties, and the Parties hereby agree to accept that risk,
and neither will hold the other Party liable for any such loss of
confidentiality or losses flowing therefrom, provided that the Parties
transmitting electronic information have adopted and at all relevant times were
using industry-standard network security technology
19
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
15.1.5 Provider
and Firm will each use commercially reasonable efforts to safeguard all
Confidential Information of the other Party against improper disclosure or
use. Provider shall cause each of its employees that provide Services
to Firm to sign an agreement whereby such employee shall agree to keep
confidential Firm’s Confidential Information and Client Confidences and
Secrets. Upon request, Provider shall provide a copy of such
agreement to Firm.
15.2 Privileged
Information.
15.2.1 Provider
shall report directly to Firm with respect to Included Files. Any and
all communications between Provider and Firm or any of its Clients, as well as
communications between Provider and Firm or any attorney, agent, employee or
personnel acting on the Firm’s or any of its Client’s behalf, will be
confidential and made solely for the purpose of assisting Firm in its
representation of its Clients. Provider will not disclose to any
Person, without Firm and Client’s written permission, the nature or content of
any such oral or written communications, information regarding any Client gained
from the inspection of any record or document submitted by Firm to Provider
relating to any File or any other Confidential Information relating to Clients
that has come into the possession of Provider during the performance of Services
under this Agreement or otherwise, including Client Confidences and Secrets
(“Privileged
Information”). Provider will not permit any Person (other than
Provider’s employees and other personnel) to inspect any Privileged Information
without Firm’s permission in advance, except as required by Applicable Law;
provided that,
in that event, Provider will comply with the requirements of Section
15.1.3 above with respect to the Privileged Information. All
Privileged Information, regardless of the nature and the source from which it
emanates, will be held by Provider solely for Firm’s convenience and subject to
Firm’s unqualified right to instruct Provider with respect to possession and
control.
15.2.2 Provider
will immediately return all Privileged Information to Firm upon
request.
15.3 Competition. In
consideration for the benefits Firm will receive in connection with this
Agreement and as an inducement to Provider to enter into this Agreement, at all
times during the Term and for a period of two (2) years after the Term, Firm
will not, and Firm will ensure that its Affiliates will not, directly or
indirectly, without the prior written consent of Provider, provide any Services
or any services substantially similar to the Services, purchase, join, control,
invest in, organize, start or form any business, individual, partnership, firm,
corporation or other entity that provides any Services or any services
substantially similar to the Services, or otherwise compete with the business of
Provider as conducted during the Term in any state in the United States where
Provider conducted business at the date of termination of this Agreement, except
to provide Services to Firm’s Clients on Excluded Files as permitted by the
terms of this Agreement and to continue to provide title insurance as a title
insurance agent in accordance with its current business activities in this area
(but not title searches) to Firm’s Clients, unless and until Provider or one of
its Affiliates is able to provide such title insurance through the Fund (“Permitted
Title Insurance Activities”). Notwithstanding the foregoing,
if this Agreement is terminated for any reason arising out of Provider’s uncured
material breach of the Agreement, the terms of this non-compete provision shall
not apply to Firm. Except as specified in Section
15.5, nothing contained in this Section
15.3 shall in any way restrict Firm’s ability to provide or perform Legal
Services (without Services) to Clients.
20
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
15.4 Recruitment
of Employees. At all times during the Term and for a period of
two (2) years after the Term, neither Firm nor Provider will, and each of them
will ensure that its Affiliates will not, directly or indirectly, employ,
solicit, induce, recruit, encourage or otherwise interfere with the employment
relationship of any person who is employed by the other Party at such time or
who was employed by the other Party within the previous twelve (12) month period
(or attempt to do any of the foregoing). Notwithstanding the
foregoing, if this Agreement is terminated for any reason arising out of either
Party’s uncured material breach of the Agreement, the terms of this recruitment
provision shall not apply to the non-breaching Party.
15.5 Limits
on Activities. Notwithstanding anything else herein to the
contrary, Firm shall undertake no other business activities other than legal
activities that support, require or relate to the Services of Provider; provided
that, up to five percent (5%) of Firm’s annual xxxxxxxx for services may
consist of business activities that do not support, require or relate to the
Services of Provider and Firm may continue to conduct the Permitted Title
Insurance Activities, except that it shall not do so to the extent that Company
becomes authorized to do so.
15.6 Equitable
Remedies. Each Party agrees that a failure to comply with any
provision of this Article
XV will cause the other Party irreparable harm and that such other Party
will be entitled to equitable relief including specific performance, an
injunction, a restraining order and/or other equitable relief in order to
enforce the provisions of this Article
XV, which right is in addition to, and not in lieu of, any other remedy
to which such Party is entitled under Applicable Law (including monetary
damages).
15.7 Blue-Pencil. If
any court of competent jurisdiction shall at any time deem the term of any
particular restrictive covenant contained in this Article
XV too lengthy or the scope too extensive, the other provisions of this
Article
XV shall nevertheless stand, and the restricted period and/or the scope
shall be reduced to such duration or size as such court shall determine to be
permissible.
ARTICLE
XVI.
INSURANCE
16.1 Provider’s
Insurance. Provider covenants that during the Term it will
maintain the insurance coverage listed below (“Insurance
Policies”) with, to the extent available, insurance carriers rated no
less than “A” by A.M. Best. Provider will name Firm as an additional
insured under the Insurance Policies described below and, at the request of Firm
from time to time, Provider shall furnish to Firm a copy of the certificates of
insurance evidencing the coverage under Provider’s Insurance
Policies. The certificate(s) will indicate that the policy will not
change or terminate without at least thirty (30) days prior written notice to
Firm. Provider further agrees that no such Insurance Policies may be
cancelled or the amount of coverage under the Insurance Policies reduced without
thirty (30) days prior written notice to Firm. The Insurance Policies
shall be deemed primary without right of contribution from Firm or Firm’s
insurers, and the insurance carriers under those Insurance Policies will waive
their subrogation rights against Firm. Provider shall obtain the
following insurance coverage:
21
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
16.1.1 Automobile
Liability. Hired/non-owned automobile liability insurance in a
coverage amount of $1 Million combined single limit;
16.1.2 General
Liability. General liability insurance in a coverage amount of $1
Million per occurrence and $2 Million in the aggregate;
16.1.3 Errors
and Omissions Liability. Errors and omissions liability insurance in
a coverage amount of $1 Million per occurrence and $3 Million in the aggregate;
and
16.1.4 Workers’
Compensation. Workers’ compensation insurance covering United States
employees: (i) Part A—Statutory Benefits, and (ii) Part B—Employer’s Liability
Coverage, in a coverage amount of $1 Million per occurrence;
16.1.5 General
Umbrella. General Umbrella coverage in the amount of $5 Million
in the aggregate for the policy coverages described in Sections
16.1.2, 16.1.3, and 16.1.5 hereof.
16.2 Malpractice
Insurance. During the Term of this Agreement and any
extensions or renewals thereof, and except as otherwise provided herein, Firm
shall use commercially reasonable efforts to maintain legal malpractice
insurance policies (the “Malpractice
Insurance Policies”) in at least the same amount as provided for by
Firm’s current Malpractice Insurance Policies issued by an insurance carrier
with an A.M. Best rating of “A” or better (subject to appropriate increase for
any growth in Firm’s business or revenues). Firm represents and
warrants that the Malpractice Insurance Policies are in full force and effect
and that they are not in default under any of them and no material claim for
coverage thereunder has been denied under any such current Malpractice Insurance
Policies with respect to any matter.
ARTICLE
XVII.
INDEMNIFICATION
17.1 Firm’s
Indemnity. Firm shall be responsible for, and shall indemnify,
defend and hold harmless Provider (and its Affiliates, directors, officers,
members, employees, personnel or agents) from and against, any and all Losses
(including deductible amounts under any insurance policies) arising out of,
based upon or resulting from any gross negligence, willful misconduct,
malpractice, error or omission (“Covered
Action”) (or claimed Covered Action) by Firm or any of its Affiliates,
directors, officers, members, employees, personnel or agents (other than
Provider or any of its Affiliates, directors, officers, members, employees,
personnel or agents acting on behalf of Provider) or breach of this Agreement,
whether such Covered Action occurred prior to, on or after the
Effective Date; provided, however, that Firm will not be liable for
indemnification hereunder to the extent that the claim, damage, loss, liability
or expense results from the willful misconduct or gross negligence of Provider
or breach of this Agreement by Provider. Notwithstanding anything to
contrary herein, with respect to indemnification for actions or omissions of
Firm existing as of the date hereof for which indemnification is available to
Provider under the Contribution Agreement, Provider shall only be entitled to
obtain indemnification for such actions or omissions pursuant to the
Contribution Agreement and not hereunder.
22
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
17.2 Provider’s
Indemnity. Provider shall be responsible for, and shall
indemnify, defend and hold harmless Firm (and its Affiliates, directors,
officers, members, employees, personnel or agents) from and against, any and all
Losses (including deductible amounts under any insurance policies) arising out
of, based upon or resulting from any Covered Action (or claimed Covered Action)
by Provider or any of its Affiliates, directors, officers, members, employees,
personnel or agents (other than Firm or any of its Affiliates, directors,
officers, members, employees, personnel or agents acting on behalf of Firm) or
breach of this Agreement from and after the Effective Date; provided, however,
that Provider will not be liable for indemnification hereunder to the extent
that the claim, damage, loss, liability, or expense results from the willful
misconduct or gross negligence of Firm or breach of this Agreement by
Firm.
17.3 Limitation
of Liability. Neither Party nor any of their respective
Affiliates will be liable to the other Party or any third party for any special,
punitive, consequential, incidental or exemplary damages (including lost or
anticipated revenues or profits relating to the same and attorneys’ fees)
arising from any claim relating to this Agreement or any of the Services to be
provided hereunder or the performance of or failure to perform such Party’s
obligations under this Agreement, whether such claim is based on warranty,
contract, tort (including negligence or strict liability) or otherwise, and
regardless of whether such damages are foreseeable or an authorized
representative of such Party is advised of the possibility or likelihood of such
damages. Each Party disclaims all warranties, express or implied,
other than the express warranties set forth in this Agreement, including,
without limitation, the implied warranties of merchantability and fitness for a
particular purpose.
17.4 Indemnification
Procedures.
17.4.1 Third
Party Claims.
|
(i)
|
Within
ten (10) days after receipt by the Indemnified Party of notice of the
commencement of any action by a third party in respect of which, if
successful, the Indemnified Party would be entitled to indemnification
hereunder (a “Third
Party Claim”), the Indemnified Party shall notify each Indemnifying
Party thereof in writing (stating the nature, basis and amount of the
claim in reasonable detail), but any failure to so notify the Indemnifying
Party shall not relieve the Indemnifying Party from any liability that it
may have to the Indemnified Party other than to the extent the
Indemnifying Party is actually prejudiced thereby. Thereafter,
the Indemnified Party shall deliver to the Indemnifying Party within ten
(10) days after the Indemnified Party’s receipt thereof, copies of all
notice and documents (including court papers) received by the Indemnified
Party relating to the Third Party
Claim.
|
23
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
|
(ii)
|
The
Indemnifying Party shall have the right to assume control of the defense
of the Indemnified Party against the Third Party Claim, or if the
Indemnifying Party does not assume such defense, to participate in the
defense of such Third Party Claim at its own expense. The
Indemnified Party shall have the right to participate in such action or
proceeding and to retain its own counsel but the Indemnifying Party shall
not be liable for any legal expenses of other counsel subsequently
incurred by such Indemnified Party in connection with the defense thereof
unless (i) the Indemnifying Party has agreed in writing to pay such fees
and expenses, (ii) the Indemnifying Party shall have failed to employ
counsel in a timely manner, or (iii) the Indemnified Party shall have been
advised by legal counsel that having common counsel would present such
counsel with a conflict of interest or the defendants in or targets of any
such action or proceeding include both an Indemnified Party and an
Indemnifying Party and such Indemnified Party reasonably concludes that
there may be legal defenses available to it or other Indemnified Parties
that are in conflict with, or could reasonably be expected to conflict
with, those available to the Indemnifying Party; provided,
however, that the Indemnifying Party shall not, in connection with
any one such action or proceeding or separate but substantially similar
actions or proceedings in the same jurisdiction arising out of the same
general allegations, be liable for the fees and expenses of more than one
separate firm of attorneys at any time for all Indemnified Parties, except
to the extent that local counsel, in addition to its regular counsel, is
required in order to effectively defend against such action or
proceeding.
|
|
(iii)
|
So
long as the Indemnifying Party is conducting the defense of the Third
Party Claim:
|
|
(i)
|
the
Indemnified Party shall be entitled to participate in the defense of such
claim and to employ counsel at its own expense to assist in the handling
of such claim;
|
|
(ii)
|
no
Indemnifying Party shall consent to the entry of any judgment or enter
into any settlement that does not include as an unconditional term thereof
the giving by each claimant or plaintiff to each Indemnified Party of a
release from all liability in respect of such claim without the applicable
Indemnified Party’s consent; and
|
|
(iii)
|
the
Indemnifying Party shall not be liable to such Indemnified Party hereunder
for any legal expenses subsequently incurred by such Indemnified Party in
connection with the defense
thereof.
|
|
(iv)
|
The
Indemnified Parties from whom the defense was assumed shall reimburse the
Indemnifying Party assuming the defense for all legal fees and expenses
reasonably incurred in defending against such claim if it is subsequently
determined that the Third Party Claim is a claim for which indemnification
is not required under this Article
XVII. The Indemnified Party shall obtain the prior
written approval of the Indemnifying Party before paying, discharging, or
admitting liability or entering into any settlement of a claim or ceasing
to defend against such claim (with such approval not to be unreasonably
withheld or delayed). All of the applicable Indemnified and
Indemnifying Parties shall cooperate with the Party assuming the defense
in the defense thereof. Such cooperation shall include the
retention and the provision, to the Party assuming the defense, of records
and information, which are reasonably relevant to such Third Party Claim,
and making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided
hereunder. The Party assuming the defense shall keep the
applicable Indemnified and Indemnifying Parties fully informed regarding
the progress and status
thereof.
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24
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
17.4.2 Other
Claims. In the event any Indemnified Party has a claim under
Sections
17.1 or 17.2 that does not involve a Third Party Claim being asserted
against or sought to be collected from such Indemnified Party, the Indemnified
Party shall deliver written notice of such claim with reasonable promptness (and
stating the nature, basis and amount of the claim in reasonable detail) to the
Indemnifying Party; but any failure to so notify the Indemnifying Party shall
not relieve the Indemnifying Party from any liability that it may have to the
Indemnified Party other than to the extent the Indemnifying Party is actually
prejudiced thereby. If the Indemnifying Party disputes the liability
with respect to such claim, the Indemnifying Party and the Indemnified Party
shall proceed in good faith under the dispute resolution procedure set forth in
Article
XIX of this Agreement.
17.5 Sole
and Exclusive Remedy. Notwithstanding
anything to the contrary in this Agreement, absent fraud, the Parties agree that
the indemnification set forth in this Article
XVII shall be the sole and exclusive remedy for the matters described
herein.
ARTICLE
XVIII.
RECORDS;
AUDIT RIGHTS
18.1 Maintenance
of Records. Provider and Firm each agrees to keep and maintain
complete and accurate books and records. Such books and records must
be kept by each such Party for at least seven (7) years after the date such book
or record was created or made, unless the other Party gives such Party written
consent authorizing destruction of such book or
record.
18.2 Access
to Records. Provider and Firm each agree to provide to the
other Party and its employees and other personnel, auditors, advisers and other
authorized representatives reasonable access, at reasonable times and upon
reasonable request, to its accounting records, financial statements and
information, files, books, records, contracts and other information and
materials reasonably relating to this Agreement, other than any Client
Confidences and Secrets. Any such access shall not interfere
unreasonably with the conduct of the business, or disrupt the personnel or
operations of either Party, require any Party to provide the other Party with
access to or copies of any information that must be maintained as confidential
in accordance with the terms of a written agreement with a third party
(including any Client) or under Applicable Law. Any files, books,
records, contracts, information and other materials provided by one Party to the
other pursuant to this Agreement shall remain the property of the providing
Party, subject to the rights of the receiving Party to use such materials solely
in the performance by Provider of Services hereunder or the performance by Firm
of Legal Services to Clients with respect to Included Files, as the case may be,
or as otherwise contemplated hereby.
25
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
18.3 Audit
Rights. Throughout the Term and for two (2) years thereafter,
Provider and Firm will each have the right, exercisable no more than once during
each calendar year, at its own expense and on thirty (30) days prior written
notice to the other Party, to have its auditors or other representatives audit
the books and records of the other Party for the sole purpose of certifying the
accuracy of the Service Fees and any other matters relating to this
Agreement.
ARTICLE
XIX.
DISPUTE
RESOLUTION
19.1 Exclusive
Procedures. Any dispute arising out of or relating to this
Agreement shall be resolved in accordance with the procedures specified in this
Article
XIX, which shall be the sole and exclusive procedures for the resolution
of any such disputes.
19.2
Negotiation. The
Parties shall attempt to resolve any dispute arising out of or relating to this
Agreement promptly by negotiation between executives who have authority to
settle the controversy. Either Party may give the other written
notice of any dispute not resolved in the normal course of business. Within
fifteen (15) days after delivery of the notice, the receiving Party shall submit
to the other a written response. The notice and response shall
include (i) a statement of that Party’s position and a summary of arguments
supporting that position, and (ii) the name and title of the Person who will
represent that Party and of any other person who will accompany the
representative. Within thirty (30) days after delivery of the initial
notice, the representatives of both Parties shall meet at a mutually acceptable
time and place or by telephone, and thereafter as often as they reasonably deem
necessary, to attempt to resolve the dispute. All reasonable requests
for information made by one Party to the other will be honored. All
negotiations pursuant to this clause are confidential and shall be treated as
compromise and settlement negotiations for purposes of applicable rules of
evidence and any additional confidentiality protections provided by
law.
19.3
Mediation. If
the dispute has not been resolved by negotiation as provided above within sixty
(60) days after delivery of the initial notice of negotiation, or if the Parties
failed to meet within thirty (30) days after delivery of said notice, either
Party may give the other Party written notice of the initiation of
mediation. Thereafter, the Parties shall endeavor to settle the
dispute by non-binding mediation, provided, however, that if one Party fails to
participate in the negotiation as described above, the other Party can initiate
mediation prior to the expiration of the foregoing periods. The
Parties will jointly select a mediator, and will share equally all costs of the
mediation. If the Parties cannot agree upon a mediator, a mediator
will be selected from the CPR Panels of Distinguished Neutrals, in accordance
with the CPR Mediation procedure. All mediation proceedings are
confidential and shall be treated as compromise and settlement negotiations for
purposes of applicable rules of evidence and any additional confidentiality
protections provided by law.
26
Portions
of this Exhibit have been omitted pursuant to a request for confidential
treatment under Rule 24b-2 promulgated under the Securities and Exchange Act of
1934 and are indicated by *****.
19.4 Judicial
Enforcement. If at any point either Party determines in good
faith that mediation will not succeed, then it shall notify the other Party of
that determination. Thereafter, the Parties may resort to any remedy
available by law. Notwithstanding the provisions of this Article
XIX, the Parties acknowledge that monetary damages alone will be
inadequate to remedy any violation or threatened violation of this
Agreement. Accordingly, nothing in this Agreement, including the
requirements to submit disputes to the dispute resolution mechanisms set forth
in this Agreement, will prevent a Party from seeking equitable relief in the
form of an injunction from any court of competent jurisdiction to prevent the
other Party’s continued violation or threatened violation of this
Agreement. A Party seeking such an injunction will not be required to
post any bond with the court. Such right to seek an injunction will
be in addition to any potential damage award that such Party may be granted in
any proceedings with respect to such violation or threatened
violation.
ARTICLE
XX.
GENERAL
20.1 Notices. Any
notice, demand, approval, consent or communication required, permitted, or
desired to be given hereunder, will be in writing and will be served on the
Parties at the following respective addresses:
If
to Firm:
|
Law
Offices of Xxxxx X. Xxxxx, P.A.
000
X. Xxxx Xxxxxx Xxxx
Xxxxx
000
Xxxxxxxxxx,
Xxxxxxx 00000
ATTN: Xxxxx
X. Xxxxx
Facsimile: (000)
000-0000
|
If
to Provider:
|
DJS
Processing, LLC
000
X. Xxxx Xxxxxx Xxxx
Xxxxx
000
Xxxxxxxxxx,
Xxxxxxx 00000
ATTN: Xxxxx
X. Xxxxx
Facsimile: (000)
000-0000
|
or such
other address, or the attention of such other person or officer, as any Party
may by written notice designate. Any notice, demand, or communication
required, permitted, or desired to be given hereunder will be sent either by
hand delivery, by prepaid certified or registered mail, return receipt
requested, postage prepaid in the United States Mail, by a nationally recognized
overnight courier, or via facsimile or other electronic transmission (including
transmission in portable document format by electronic mail). If any
notice, demand or communication is sent by facsimile or electronic mail
transmission, an original must be simultaneously sent by one of the
foregoing mail or courier methods. All such notices, demands or
communications shall be deemed to have been received (i) if by personal
delivery, facsimile machine or other electronic transmission (including
transmission in portable document format by electronic mail), on the date after
such delivery, (ii) if by certified or registered mail, on the third business
day after the mailing thereof or (iii) if by next-day or overnight courier or
delivery, on the date of such delivery.
27
Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****.
20.2 Assignment. This
Agreement and all of the provisions hereof shall be binding upon and inure to
the benefit of each of the Parties hereto and their respective successors and
permitted assigns. Neither this Agreement nor any rights, benefits or
obligations set forth herein may be assigned by any of the parties, except that
(a) Provider or Firm may assign this Agreement and any of the provisions hereof
without the written consent of the other to (i) a successor by way of merger,
consolidation, reorganization, stock sale, or by way of a sale of all or
substantially all of its assets where the transferee, assignee or successor in
such asset sale agrees in writing to be fully bound by all of the provisions of
this Agreement or (ii) to any lender as a collateral assignment for security
purposes. Any purported assignment in violation of this Section
20.2 will be void.
20.3 Enforcement. In the event either Party resorts to
legal action to enforce or interpret any provision of this Agreement, the
prevailing Party will be entitled to recover the costs and expenses of such
action so incurred, including reasonable attorney’s fees.
20.4 Governing Law; Venue;
Jurisdiction. This Agreement, and all matters arising under or
related hereto, shall be governed according to the laws of the State of Florida,
without respect to its conflict of law principles. Each Party hereby
consents to the exclusive jurisdiction of the courts of the State of Florida and
of the United States of America in the County of Broward for any actions, suits
or proceedings arising out of or relating to this Agreement and the transactions
contemplated hereby (and each Party agrees not to commence any action, suits or
proceeding relating thereto except in such courts).
20.5 Change in Applicable
Law. If any change in Applicable Law occurs that would require
(i) any change to any notice previously provided to a Client or any additional
notice to be provided to a Client relating to this Agreement, (ii) any change to
the Services provided under this Agreement, (iii) any change to the monitoring
of Services or Legal Services or (iv) any other change to this Agreement, the
Parties agree to act in good faith and use commercially reasonable efforts to
seek to resolve such matter in a manner that is mutually satisfactory to both
Parties.
20.6
No
Third Party Beneficiaries. This
Agreement does not create, and will not be construed as creating, any rights
enforceable by any person not a Party to this
Agreement.
20.7 Severability. The Parties hereto
have negotiated and prepared the terms of this Agreement in good faith with the
intent that each and every one of the terms, covenants and conditions herein be
binding upon and inure to the benefit of the respective
Parties. Accordingly, if any one or more of the terms, provisions,
promises, covenants or conditions of this Agreement or the application thereof
to any person or circumstance will be adjudged to any extent invalid,
unenforceable, void or voidable for any reason whatsoever by a court of
competent jurisdiction or an arbitration tribunal, such provision will be as
narrowly construed as possible, and each and all of the remaining terms,
provisions, promises, covenants and conditions of this Agreement or their
application to other persons or circumstances will not be affected thereby and
will be valid and enforcement to the fullest extent permitted by
law. To the extent this Agreement is in violation of Applicable Law,
the Parties shall negotiate in good faith to amend this Agreement, to the extent
possible consistent with its purposes, to conform to Applicable
Law. Neither Party shall claim or assert illegality as a defense to
the enforcement of this Agreement or any provision hereof; instead, any such
purported illegality shall be resolved pursuant to this Section
20.7.
28
Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****.
20.8 Construction.
20.8.1 All
references in this Agreement to “Articles,” “Sections” and “Exhibits” refer to
the articles, sections and exhibits of this Agreement. The article and section
headings and titles appearing in this Agreement are inserted only as a matter of
convenience and in no way define, limit, construe, or describe the scope or
extent of such section or in any way affect this Agreement or the interpretation
hereof.
20.8.2 All
references to “$” or “dollars” will be to United States dollars and all
references to “days” will be to calendar days unless otherwise
specified.
20.8.3 As
used in this Agreement, neutral pronouns and any variations thereof shall be
deemed to include the feminine and masculine and all terms used in the singular
shall be deemed to include the plural, and vice versa, as the context may
require.
20.8.4 The
words “hereof”, “herein” and “hereunder” and other words of similar import refer
to this Agreement as a whole, as the same may from time to time be amended or
supplemented, and not to any subdivision contained in this
Agreement.
20.8.5 The
word “including” when used herein is not intended to be exclusive and means
“including, but not limited to.” The word “or” when used herein is
not intended to be exclusive unless the context clearly requires
otherwise.
20.8.6 The
Schedules hereto will be deemed to be incorporated in and an integral part of
this Agreement.
20.8.7 All
provisions of this Agreement have been mutually negotiated and
drafted. The provisions of this Agreement will be interpreted and
construed in accordance with their fair meanings, and not strictly for or
against either Party, regardless of which Party may have drafted this Agreement
or any specific provision.
20.9 Force
Majeure. Neither
Party will be deemed to have breached this Agreement and neither will be liable
or otherwise responsible for any interruption, delay or failure to perform any
obligation under this Agreement, when such interruption, delay or failure arises
from causes beyond its reasonable control, including any outbreak or material
escalation of hostilities or other armed conflict or declaration by the United
States of a national emergency or war, acts of public enemy, acts of terrorism,
embargo, any fire, explosion, earthquake, flood, hurricane, tornado, drought or
bad weather or other natural disaster, any other acts of God or acts of city,
state, local or federal governments, regulatory bodies, including the Florida
Bar or the bar of any jurisdiction in which Firm provides Legal Services, in
their sovereign, regulatory or contractual capacity. If, however,
Provider cannot perform such delayed Services for a period of five (5) days due
to such cause, then Firm may suspend this Agreement solely with respect to such
delayed Service upon written notice to Provider. In the event
Provider is excused from supplying any Service in accordance with the terms of
this paragraph (including during the five (5) day notice period referenced in
the prior sentence), Firm shall be free to (i) provide such services itself, or
(ii) acquire such services from any substitute source, at Firm’s expense and
without further liability to Provider, for the period of such disruption, delay
or nonperformance (and a period thereafter necessary to honor reasonable
commitments beyond the expiration of any disruption or delay), and solely to the
extent reasonably necessitated by, such nonperformance. If, after the
period of disability, Provider is once again able to perform the Services in
accordance with the terms of this Agreement, Firm shall reinstate this Agreement
with respect to Provider’s performance of such Services upon written notice to
Provider.
29
Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****.
20.10
Entire
Agreement; Amendment. With
respect to the subject matter of this Agreement, this Agreement supersedes all
previous contracts and constitutes the entire agreement between the
Parties. Neither Party will be entitled to benefits other than those
specified herein. No prior oral statements or contemporaneous
negotiations or understandings or prior written material not specifically
incorporated herein will be of any force and effect, and no changes in or
additions to this Agreement will be recognized unless incorporated herein by
amendment as provided herein, such amendment(s) to become effective on the date
stipulated in such amendment(s). No provision of this Agreement shall
be deemed waived, amended, supplemented or modified by any Party, unless such
wavier, amendment, supplement or modification is in writing and signed by an
authorized representative of the Party against whom it is sought to enforce such
waiver, amendment, supplement or modification. The Parties
specifically acknowledge that, in entering into and executing this Agreement,
the Parties rely solely upon the representations and agreements contained in
this Agreement and no others.
20.11 Counterparts;
Effectiveness. The Parties may execute this Agreement in
separate counterparts, each of which shall be deemed an original and all of
which together will constitute one and the same instrument. To the
extent signed and delivered by means of a facsimile machine or other electronic
transmission (including transmission in portable document format by electronic
mail), this Agreement shall be treated in all manners and respects and for all
purposes as an original and shall have the same binding legal effect as if it
were the original signed version thereof delivered in person. None of
the undersigned shall raise the use of a facsimile machine or other electronic
transmission to deliver a signature or the fact that such signature was
transmitted or communicated through the use of a facsimile machine or other
electronic transmission as a defense to the enforceability of this Agreement and
each of the undersigned forever waives any such defense.
20.12 Waiver
of Jury Trial. THE PARTIES HERETO SHALL AND THEY HEREBY DO WAIVE
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE
PARTIES IN ANY MANNER CONNECTED WITH THIS AGREEMENT, AND/OR ANY CLAIM OF INJURY
OR DAMAGE.
[Signature
page follows.]
30
Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****.
IN WITNESS WHEREOF, the
Parties have executed this Agreement as of the Effective Date.
LAW
OFFICES OF XXXXX X. XXXXX, P.A., a
Florida
professional association
|
||
By:
|
|
|
Xxxxx
X. Xxxxx, President
|
||
DJS
PROCESSING, LLC, a Delaware limited
liability
company
|
||
By:
|
|
|
Xxxxx
X. Xxxxx,
President
|
31
Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****.
EXHIBIT
A
DEFINITIONS
“Affiliate” means any other
Person that controls, is controlled by, or is under common control with, such
Person where “control” means the possession, directly or indirectly, of the
power to direct the management and policies of a Person whether through the
ownership of voting securities, by contract or otherwise.
“Agreement” means this Services
Agreement, as amended from time to time in accordance with this
Agreement.
“Applicable Law” means any
federal, state or local law (statutory, common or otherwise), constitution,
treaty, convention, ordinance, code, rule, regulation, order, injunction,
judgment, decree, ruling or other similar requirement enacted, adopted,
promulgated or applied by a Governmental Body and shall include without
limitation the Rules Regulating the Florida Bar or the code of conduct of any
other jurisdiction in which Firm provides Legal Services, as amended from time
to time, for lawyers admitted to practice in the State of Florida or any other
jurisdiction in which Firm provides Legal Services, and any other rules of
professional conduct for lawyers admitted to practice in the State of Florida or
any other jurisdiction in which Firm provides Legal Services, in each case to
the extent binding upon or applicable to such Person, as amended from time to
time.
“Business Days” means days on
which Firm is open for business.
“Client” means any person or
entity for whom Firm provides Legal Services at any time during the
Term.
“Client Confidences and
Secrets” shall mean any “confidences” or “secrets” of a Client, as those
terms are defined in the Rules Regulating the Florida Bar or the code of conduct
of any other jurisdiction in which Firm provides Legal Services, for lawyers
admitted to practice in the State of Florida or any other jurisdiction in which
Firm provides Legal Services or any other rules of professional conduct for
lawyers admitted to practice in the State of Florida or any other jurisdiction
in which Firm provides Legal Services, as amended from time to
time.
“Client Reimbursements” means,
with respect to any Client, those expenses and disbursements, including filing
fees, fees for publication and posting of legal notices, court costs, sheriff
services, fees for title searches and title insurance, fees for service of
process, packaging services, mediation fees, and other expenses, for which such
Client agrees to reimburse Firm.
“Confidential Information”
means all non-public, proprietary or confidential information in whatever form
or media (whether written or oral) of Provider, Firm or Other Firms, including
financial information, marketing plans, procedures, policies and personnel
records, client lists and client information, fee schedules and fee
arrangements, Client Confidences and Secrets, trade secrets, financial and other
information received about or from a mortgagor, borrower, guarantor, defendant
or other Person obtained in connection with any File and the terms and
provisions of this Agreement.
A-1
Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****.
“Contribution Agreement” means
the Contribution and Membership Interest Purchase Agreement between Firm and
Affiliates of Provider.
“EBITDA” means the Firm’s
earnings before interest, taxes, depreciation and amortization.
“Effective Date” means the date
upon which all Parties to this Agreement shall have executed a fully executed
copy of this Agreement.
“Excess Attorney Cost” means
the following amount:
A - ((B +
C) x D)
where
|
A
=
|
Firm’s
actual attorney salary, bonus and benefits for the Measurement
Period.
|
|
B
=
|
Firm’s
per attorney average annual base salary and bonus expense as of the
Effective Time, calculated by dividing total attorney compensation for the
twelve months prior to the Effective Time (other than for Xxxxx X. Xxxxx)
by the Full-Time Equivalent Attorneys, multiplied by the following
fraction: the mean annual wages of United States attorneys as of the most
recently reported date immediately prior to the end of the Measurement
Period, published by the United States Department of Labor, Bureau of
Labor Statistics divided by the mean annual wages of United States
attorneys as of May 2008, published by the United States Department of
Labor, Bureau of Labor Statistics.
|
|
C
=
|
average
actual cost per attorney of benefits for the Measurement Period,
calculated by dividing the total benefits cost to Firm to provide benefits
to attorneys for the Measurement Period (other than Xxxxx X. Xxxxx)
divided by the Full-Time Equivalent
Attorneys.
|
|
D
=
|
actual
number of new Files referred to Firm during the Measurement Period divided
by E, rounded up to the next highest whole
number.
|
|
E
=
|
twelve
(12) multiplied by ninety (90%) percent of the average number of new Files
referred to the Firm per attorney employed by Firm, calculated by dividing
the aggregate number of new Files referred to the Firm in the month of
February 2010 by the Full-Time Equivalent Attorneys for the month of
February 2010.
|
A-2
Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****.
“Excluded File” is a file of
Firm for which Firm is prohibited from using Provider to provide Services due to
(i) prohibition by the applicable Client by written notice (without Firm or any
of its Affiliates having caused the Client to, or otherwise suggested that the
Client, require Firm to use any Person other than Provider to provide Services
for that File); (ii) prohibition by Applicable Law; or (iii) Provider’s breach
and failure to cure with respect to Performance Metrics. An existing
File of Firm may become an Excluded File upon Firm’s receipt of written notice
from its Client prohibiting Firm from using Provider to provide Services with
respect to such File. A File shall be considered an Excluded File as
to a particular Service, but not other Services, if Firm is prohibited from
using Provider to provide the Service for that File for any of the reasons set
forth above.
“Fee Schedule” means the fee
schedule for Services attached hereto as Exhibit
C, as amended from time to time in accordance with this Agreement, and
shall include any amendments to the Fee Schedule.
“File” means a specific matter
of any Client for whom Firm provides Legal Services.
“Full-Time Equivalent
Attorneys” means the full-time equivalent number of attorneys employed by
Firm during the Measurement Period, calculated by dividing the number of
Business Days worked by Firm’s attorneys during the Measurement Period divided
by the number of Business Days in the Measurement Period. Attorneys
on a part-time status, who do not work full days, shall be deemed to have worked
only a fraction of a Business Day (i.e., an attorney who works half days shall
be treated as working one half (0.5) of a Business Day for each day
worked).
“Fund” means Attorneys’ Title
Insurance Fund, Inc.
“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 Standards Board (or any successor authority) that are applicable as
of the date of determination, consistently applied in accordance with past
practices.
“Governmental Body” means any
governmental body, agency or official of any country or political subdivision of
any country, including any federal, national, supranational, state, local or
other government, governmental, regulatory or administrative authority
(including any self-regulatory organization), agency or commission or any court,
tribunal, or judicial or arbitral body and shall include The Florida Bar, and
the bar of any other jurisdiction in which Firm provides Legal Services, and
their respective disciplinary committees.
“Indemnified Party” means any
Party seeking indemnification.
“Indemnifying Party” means any
Party providing indemnification.
A-3
Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****.
“Intellectual Property Rights”
means (i) patents and patent applications (including all reissues, divisions,
continuations, continuations-in-part, extensions and reexaminations thereof)
registered or applied for in the United States and all other nations throughout
the world, all improvements to the inventions disclosed in each such
registration, patent or patent application, (ii) trademarks, service marks,
trade dress, logos, domain names, rights of publicity, trade names and corporate
names (whether or not registered) in the United States and all other nations
throughout the world, including all registrations and applications for
registration of the foregoing and all goodwill associated therewith, (iii)
copyrights (whether or not registered) and registrations and applications for
registration thereof in the United States and all other nations throughout the
world, including all derivative works, moral rights, renewals, extensions,
reversions or restorations associated with such copyrights, now or hereafter
provided by law, regardless of the medium of fixation or means of expression,
(iv) computer software, (v) trade secrets and know-how, (vi) databases and data
collections, (vii) any other similar type of proprietary intellectual property
right and (viii) all rights to xxx or recover and retain damages and costs and
attorneys’ fees for past, present and future infringement or misappropriation of
any of the foregoing.
“Included File” means any File
for which Firm performs Legal Services for any Client, other than any Excluded
Files or Files relating to Additional Law Firm Services or Additional Provider
Services for which Provider does not provide Services.
“Legal Services” means services
that are required to be performed by a licensed attorney under Applicable
Law.
“Losses” means any losses,
damages, liabilities, costs, expenses (including reasonable expenses of
investigation and reasonable legal fees and expenses), fees,
penalties, fines, judgments, settlements and claims of whatever kind and
nature.
“Performance Metrics” means the
measurements of the performance of Provider in providing Services to Firm, as
specified in Exhibit
E to this Agreement, as amended from time to time in accordance with this
Agreement.
“Person” means an individual,
corporation, partnership, association, trust, limited liability company or any
other entity or organization, including a government or political subdivision or
an agency, unit or instrumentality thereof.
“Provider Intellectual Property
Rights” means (i) all Intellectual Property Rights acquired by Provider
pursuant to the Contribution Agreement and (ii) all other Intellectual Property
Rights owned, made, conceived, expressed, developed, and/or reduced to practice
by Provider or its Affiliates, agents or representatives relating to the
Services, subject to any rights or interests of any Client in such Intellectual
Property Rights.
“Service Fees” means the fees
described in Article
VII.
“Services” means all services
for an Included File listed on Exhibit
B that are not Legal Services, including Additional Law Firm Services and
Additional Provider Services that are added to Exhibit
B by amendment to this Agreement. Services will not include
any Legal Services, services arising out of Additional Law Firm Services for
which Provider has declined to accept the applicable offer in accordance with
Section
4.1, and services arising out of Additional Provider Services for which
Firm has declined to accept the applicable offer in accordance with Section
4.2.
A-4
Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****.
“Termination Date” means the
date of termination in its entirety, or expiration, of this Agreement in
accordance with Article
V.
Additional Definitions. Each
of the following terms is defined in the Section set forth opposite such
term:
Item
|
Article/Section
|
|
Access
Fee
|
7.3.4
|
|
Adjusted
EBITDA
|
8.10
|
|
Additional
Law Firm Services
|
4.1
|
|
Additional
Provider Services
|
4.2
|
|
Additional
Provider Services Notice
|
4.2.1
|
|
Additional
Provider Services Offer Period
|
4.2.2
|
|
Agreement
|
Introductory
Paragraph
|
|
Arbitrator
|
7.3.3
|
|
Assessments
|
10
|
|
Changed
Services
|
3.1
|
|
Covered
Action
|
17.1
|
|
Default
Rate
|
7.5
|
|
Disclosing
Party
|
15.1.3
|
|
Dispute
Resolution
|
19
|
|
Effective
Date
|
Introductory
Paragraph
|
|
Facilities
Agreement
|
6
|
|
Firm
|
Introductory
Paragraph
|
|
Improvements
|
14.3.1
|
|
Initial
Term
|
5.2
|
|
Insurance
Policies
|
16.1
|
|
Invoice
|
7.4
|
|
Malpractice
Insurance Policies
|
16.2
|
|
Measurement
Period
|
8.10
|
|
Non-Firm
Clients
|
8.4
|
|
Non-Foreclosure
Invoice
|
7.4
|
|
Notice
|
4.1.1
|
|
Offer
Period
|
4.1.2
|
|
Other
Firms
|
2.3
|
|
Party
or Parties
|
Introductory
Paragraph
|
|
Performance
Notice
|
5.6
|
|
Permitted
Title Insurance Activities
|
15.3
|
|
Privileged
Information
|
15.2.1
|
|
Provider
|
Introductory
Paragraph
|
|
Provider
Intellectual Property Rights
|
14.3.1
|
|
Receiving
Party
|
15.1
|
|
Renewal
Period
|
5.3
|
|
Representatives
|
15.1
|
|
Sales
Tax
|
7.7.1
|
A-5
Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****.
Item
|
Article/Section
|
|
Service
Fees
|
7.1
|
|
SOPs
|
2.6
|
|
Subcontractor
|
12.1
|
|
Supervised
Services
|
12.2
|
|
Temporary
Service Fees
|
7.6
|
|
Term
|
5.3
|
|
Third
Party Claim
|
17.4.1
|
A-6
Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****.
EXHIBIT
B
Description of
Services
|
1.
|
Foreclosure
|
|
2.
|
Bankruptcy
– Florida
|
|
3.
|
Bankruptcy
– Puerto Rico
|
|
4.
|
Eviction
|
|
5.
|
Closings
|
|
6.
|
Monitor
Junior Lien Positions
|
|
7.
|
Loss
Mitigation
|
|
8.
|
Litigation/Other
|
B-1
Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****.
EXHIBIT
C
Fee
Schedule
Services
|
Per File Processing Fee
|
|
Foreclosure
|
[*****]
|
|
Bankruptcy
– Florida
|
[*****]
|
|
Bankruptcy
– Puerto Rico
|
[*****]
|
|
Eviction
|
[*****]
|
|
Closings
|
[*****]
|
|
Monitor
Junior Lien Positions
|
[*****]
|
|
Loss
Mitigation
|
[*****]
|
|
Litigation/Other
|
[*****]
|
Access Fee
|
Per Excluded File
|
|
Foreclosure
|
[*****]
|
|
Bankruptcy
– Florida
|
[*****]
|
|
Bankruptcy
– Puerto Rico
|
[*****]
|
|
Eviction
|
[*****]
|
|
Closings
|
[*****]
|
|
Monitor
Junior Lien Positions
|
[*****]
|
|
Loss
Mitigation
|
[*****]
|
|
Litigation/Other
|
[*****]
|
C-1
Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****.
EXHIBIT
D
Expenses
1.
|
Provided by
Firm. Firm will be responsible for providing, during the
Term at its expense, (a) all items and costs relating to the Excluded
Files and (b) all items and costs that are not the responsibility of
Provider under the item no. 2 below, and that are necessary for, or
incidental to, the provision of Legal Services for Included Files or other
activities of Firm including the
following:
|
|
(i)
|
the
cost of engaging consultants and advisors to
Firm;
|
|
(ii)
|
continuing
legal education expenses for employees and personnel of
Firm;
|
|
(iii)
|
outsourcing
fees paid to Persons who transmit initial File information to
Firm;
|
|
(iv)
|
expenses,
out-of-pocket fees, and other disbursements of Firm incurred in providing
Legal Services for the Included Files that are not Client
Reimbursements;
|
|
(v)
|
the
cost of recruiting and hiring attorneys for
Firm;
|
|
(vi)
|
the
compensation and benefits of employees and personnel of
Firm;
|
|
(vii)
|
all
taxes, including payroll, income, excise, property or value added taxes,
to the extent related to the services or activities of Firm,
and
|
|
(viii)
|
the
law library and legal research data base expenses of Firm, including costs
associated with subscribing to the Lexis-Nexis or similar
databases.
|
2.
|
Provided by
Provider. Provider will be responsible for the costs
associated with the provision of Services for Included Files, during the
Term, including the following
costs:
|
|
(i)
|
the
cost of recruiting and hiring personnel of
Provider;
|
|
(ii)
|
the
compensation and benefits of employees and personnel of
Provider;
|
|
(iii)
|
the
cost of engaging consultants and advisors to
Provider;
|
|
(iv)
|
expenses,
out-of-pocket fees, and other disbursements of Provider incurred in
providing Services for the Included Files that are not Client
Reimbursements;
|
|
(v)
|
all
taxes, including payroll, income, excise, property or value added taxes,
to the extent related to the services provided by, or activities of,
Provider;.
|
|
(vi)
|
Client
Reimbursements for filing fees, court costs and mediation fees, subject to
reimbursement as provided in Section
7.2 of the Agreement; and
|
|
(vii)
|
File
communication fees such as fees for accessing Client
systems.
|
D-1
Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment under Rule 24b-2
promulgated under the Securities and Exchange Act of 1934 and are indicated by
*****.
EXHIBIT
E
Performance
Metrics
The
provisions of foreclosure Services within the time frames set forth
below:
|
1.
|
Filing
of complaint within thirty (30) days of receipt of
File.
|
|
2.
|
Service
of complaint on defendant within thirty (30) days after complaint is
filed.
|
|
3.
|
Entry
of judgment on complaint, if uncontested, within sixty (60) days after
complaint is served.
|
|
4.
|
Foreclosure
sale conducted within thirty (30) days after judgment is
entered.
|
|
5.
|
Certificate
of Title issued within ten (10) days after judgment is
entered.
|
|
6.
|
In
contested cases, Certificate of Title issued within one hundred fifty
(150) days of receipt of File.
|
E-1