MANAGEMENT SERVICES AGREEMENT
Exhibit
10.3
THIS
MANAGEMENT SERVICES AGREEMENT ("Services Agreement"), dated
this 31st day of March, 2006, is entered into by and between
PHH
HOME LOANS, LLC,
a
limited liability company formed under Delaware law (the "Company"), and
PHH
MORTGAGE CORPORATION ("PMC"),
a corporation organized under the laws of the State of New Jersey (collectively,
the "Parties").
WITNESSETH:
WHEREAS,
in connection with the commencement of operations of the Company on or about
October 1, 2005 (Launch Date), PMC began providing management services
substantially in accordance with the terms and conditions of the form of
Management Services Agreement identified in the AOA (defined below) as Exhibit
B; and
WHEREAS,
the Company, PMC, and Cendant Member have conferred extensively since the
Launch
Date and are now prepared to formally memorialize their agreement with respect
to the provision of these services; and
WHEREAS,
the Board of Advisors of the Company has approved and ratified the terms
and
conditions of this Management Services Agreement.
NOW,
THEREFORE, in consideration of the mutual representations, warranties,
covenants, promises and agreements set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereto agree as follows:
[***]
INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES ACT
OF 1934,
AS AMENDED.
1. Capitalized
Terms.
Capitalized terms not otherwise defined in this Services Agreement shall
have
the meaning described in the Strategic Relationship Agreement, dated as of
January 31, 2005 (the “SRA”), or the Amended and Restated Limited Liability
Company Operating Agreement, also dated as of January 31, 2005, as amended
on
May 12, 2005 (“AOA”), as the case may be.
2. Representations
and Warranties of Company.
The
Company represents and warrants to PMC that:
(a) It
is
duly organized and existing, and in good standing, pursuant to the laws of
the
State of Delaware;
(b) It
has
the requisite limited liability company authority to enter into this Services
Agreement and to perform its obligations hereunder; and
(c) The
terms
and conditions of this Services Agreement do not violate any provision of
its
Certificate of Formation, Operating Agreement or any other agreement to which
it
is a party.
3. Representations
and Warranties of PMC.
PMC
represents and warrants to the Company that:
(a) It
is
duly organized and existing, and in good standing, pursuant to the laws of
the
State of New Jersey;
(b) It
has
the requisite corporate authority to enter into this Services Agreement and
to
perform its obligations hereunder; and
(c) The
terms
and conditions of this Services Agreement do not violate any provision of
its
Articles of Incorporation, Bylaws or any other agreement to which it is a
party.
4. Capacity
Services.
PMC may
provide to the Company or the Company may provide to PMC the capacity services
described in Exhibit
4.1
attached
hereto, on and pursuant to the terms set forth therein. In consideration
for
performing the services described in Exhibit
4.1
hereto,
the Company shall pay to PMC or PMC shall pay to the Company a cash fee
calculated and payable in the manner set forth in Exhibit
4.1.
5. Product
Support Services.
PMC
shall provide to the Company the product support services described in
Exhibit
5.1
attached
hereto, on and pursuant to the terms set forth therein. In consideration
for
performing the services described in Exhibit
5.1
hereto,
the Company shall pay to PMC monthly, a cash fee calculated as set forth
in
Exhibit
5.1.
6. General
Administrative Services.
PMC
shall provide to the Company the general administrative services described
in
Exhibit
6.1
attached
hereto, on and pursuant to the terms set forth therein. In consideration
for
performing the services described in Exhibit
6.1
hereto,
the Company shall pay to PMC the cash fee or cash fees calculated and payable
in
the manner set forth in Exhibit
6.1.
7. IT
Administrative Services.
PMC
shall provide to the Company the IT administrative services described in
Exhibit
7.1
attached
hereto, on and pursuant to the terms set forth therein. In consideration
for
performing the services described in Exhibit
7.1
hereto,
the Company shall pay to PMC monthly, a cash fee calculated as set forth
in
Exhibit
7.1.
8. Required
Disclosures.
The
amount, payor and payee of the fees incurred in connection with the product
support services pursuant to Exhibit
5.1
shall be
described in the Mortgage Loan Disclosures, to the extent required by
law.
9. Standard
of Care.
PMC
shall perform the services provided pursuant to this Services Agreement with
no
less degree of care than PMC or any of its Affiliates exercises in providing
such services for its own account or the account of any third party with
a
similar regulatory profile, provided,
that in
no event shall PMC exercise a lesser degree of care than that exercised by
PMC
prior to the date of the SRA.
10. Compliance
with Laws.
Actions
taken or not taken by PMC and its Affiliates, and all communications made
when
performing its obligations under this Services Agreement shall comply in
all
material respects with the requirements of all applicable laws. PMC
shall
promptly inform the Company in writing of any notices, inquiries or other
communications, written or oral, received by PMC or any Affiliate thereof
with
respect to any material legal, administrative, arbitral or other proceedings,
claims, actions or governmental or regulatory investigations or findings
with
respect to any of the services provided pursuant to this Services
Agreement.
11. Records
Preservation and Retention.
(a) PMC
acknowledges that all Mortgage Loan Documents are the property of the Company.
PMC shall use its reasonable best efforts to safeguard the Mortgage Loan
Documents that it may hold or retain. PMC may enter into an arrangement with
a
third party agent to maintain the Mortgage Loan Documents with the reasonable
consent of the Company.
(b) PMC
agrees that it or its agent will hold and be responsible for such Mortgage
Loan
Documents within a secure and controlled environment to include, but not
be
limited to, fireproof vaults. PMC agrees that it or its agent will use its
reasonable best efforts to protect such Mortgage Loan Documents from destruction
or loss and from the unauthorized divulgence of confidential information.
PMC
shall, if such Mortgage Loan Documents are lost or destroyed, replace such
Mortgage Loan Documents in all necessary respects. Further, such Mortgage
Loan
Documents will be maintained under such conditions as to have them readily
available for use and examination by the Company, upon its reasonable request
therefor.
(c) Upon
request by the Company, PMC will forward any and all of the Company's records
and the Company Mortgage Loan Documents in its possession that the Company
reasonably may seek.
(d) PMC
shall
maintain all such Mortgage Loan Documents and other records relating to the
services provided by it hereunder in accordance with all applicable federal,
state and local laws and regulations, as well as Mortgage Loan investor and
insurer requirements and reasonable Company requirements, as provided to
PMC.
12. Right
to Audit.
The
Company and its officers, employees and agents, including third party attorneys
and accountants and auditors shall have full and complete access to PMC's
records and operations at reasonable times to monitor PMC's performance on
behalf of the Company pursuant to this Services Agreement, and all audit,
inspection and review rights that the Cendant Member has with respect to
the
Company as provided in the Operating Agreement.
13. Termination.
This
Services Agreement shall terminate automatically upon the effective date
of any
termination of the SRA in accordance with its terms; provided
that
such termination shall have no effect on the Parties' obligations with respect
to Mortgage Loans in the process of origination at the time of such termination;
and further
provided
that the
representations, warranties and covenants of the Parties contained herein
and
the respective obligations of each Party hereunder to indemnify and hold
harmless the other Party set forth in Section 14 below shall survive the
termination of this Services Agreement (i) for a period of one (1) year
thereafter, in the event of a Cendant Put, a Two Year Put, a Purchase Right
transaction, a Special Termination Put or a Non-Renewal Put, or (ii) for
a
period of five (5) years thereafter, in the event of a PHH Sale, a Two Year
PHH
Sale or a Non-Renewal PHH Sale. In connection with any termination contemplated
by clause (ii) above, PMC shall deliver to the Company, at the effective
time of
such termination, any records in its possession as contemplated by Section
11
hereof.
14. Indemnification.
(a) PMC
shall
indemnify, hold harmless and defend the Company, its members, directors,
officers and employees and its successors and assigns and their members,
directors, officers and employees, with counsel approved by the Company,
from
and against any and all Losses which the Company or any such parties may
incur
or be subject to arising out of, relating to, or in connection with (i) any
representation of PMC that was not true when made, (ii) any breach by PMC
of its
warranties or covenants or the terms and conditions of this Services Agreement,
or (iii) any actions or failures to act by PMC or any of its Affiliates in
connection with the services provided pursuant to this Services Agreement
that
constitute negligence, bad faith or willful misconduct. PMC's obligation
to so
indemnify, hold harmless and defend the Company and any such parties shall
survive termination of this Services Agreement in accordance with Section
14.
The Company's right to indemnification, as provided herein, shall be in addition
to, and not in lieu of all other rights and remedies it may have under
law.
(b) The
Company shall indemnify, hold harmless and defend PMC, its directors, officers
and employees and its successors and assigns and their directors, officers
and
employees, with counsel approved by PMC, from and against any and all Losses
which PMC or any such parties may incur or be subject to arising out of,
relating to or in connection with any representation made by the Company
that
was not true when made or any breach by the Company of its warranties or
covenants or the terms and conditions of this Services Agreement. The Company's
obligation to so indemnify, hold harmless and defend PMC and any such parties
shall survive termination of this Services Agreement in accordance with Section
14. PMC's right to indemnification, as provided herein, shall be in addition
to,
and not in lieu of, all other rights and remedies it may have under
law.
15. Cooperation.
The
Parties acknowledge that the success of their efforts under this Services
Agreement depends on the cooperation of each of them. Accordingly, each of
the
Parties shall use its best efforts and confer in good faith in an attempt
to
agree upon any matter hereunder which requires such agreement.
16. No
Partnership.
This
Services Agreement is not intended to be, nor shall it be construed to be,
the
formation of a partnership or joint venture between the Parties.
17. Notices.
All
notices and statements to be given under this Services Agreement are to be
in
writing, delivered by hand, facsimile, overnight mail or similar service,
or
first class United States mail, postage prepaid and registered or certified
with
return receipt requested, to the following addresses or facsimile numbers,
as
applicable (which addresses and facsimile numbers may be revised by written
notice):
The
Company:
PHH
Home
Loans, LLC
0000
Xxxxxxxxxx Xxxx
Xx.
Xxxxxx,
XX 00000
Attention:
President
Facsimile:
With
a copy
to:
Cendant
Real
Estate Services Venture Partner, Inc.
0
Xxxxxx
Xxxxx
Xxxxxxxxxx,
XX 00000
Attention:
Xxxx Xxxx
Facsimile:
PMC:
PHH
Mortgage
Corporation
0000
Xxxxxxxxxx Xxxx
Xx.
Xxxxxx,
XX 00000
Attention:
President
Facsimile:
000-000-0000
All
written notices and statements shall be deemed given, delivered, received
and
effective upon personal delivery or receipt of facsimile or telegram, one
(1)
calendar day after sending by overnight mail or any similar service or five
(5)
calendar days after mailing by first class United States mail in the manner
set
forth above.
18. Expenses
and Payment Terms.
PMC
shall receive no compensation under the terms of this Services Agreement
except
as expressly provided herein. The Company shall, at its sole cost and expense,
employ all persons necessary for it to carry out its duties and responsibilities
hereunder. All costs and expenses incurred by either Party in connection
herewith (including salaries for their respective personnel and their respective
legal fees and expenses) shall be solely the expenses of the Party incurring
them. Neither Party shall be obligated to contribute any amount as capital
or
otherwise to the other. Monthly fees payable hereunder shall be billed by
the
fifteenth (15th)
of the
month following the date services were provided and shall be due and payable
by
the last day of such month.
19. Amendment.
This
Services Agreement may be amended and any provision hereof waived, but only
in
writing signed by the Party against whom such amendment or waiver is sought
to
be enforced; provided,
however,
that
any action taken by the Company pursuant to this Section 19 shall be valid
only
if taken following receipt of the prior approval of the Company's Board of
Advisors (as defined in the Operating Agreement) in accordance with Section
6.3
of the Operating Agreement.
20. Governing
Law.
THIS
SERVICES AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE
OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAWS RULES THEREOF, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN
ACCORDANCE WITH SUCH LAWS.
Any
legal suit, action or proceeding against any of the Parties hereto arising
out
of or relating to this Services Agreement shall only be instituted in any
federal or state court in New York, New York, pursuant to Section 5-1402
of the
New York General Obligations Law, and each Party hereby irrevocably submits
to
the exclusive jurisdiction of any such court in any such suit, action or
proceeding. The Parties hereby agree to venue in such courts and hereby waive,
to the fullest extent permitted by law, any claim that any such action or
proceeding was brought in an inconvenient forum. Each of the Parties hereby
irrevocably waives all right to trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Services Agreement.
21. Dispute
Resolution.
In the
event of any disputes under this Services Agreement, resolution shall occur
pursuant to the dispute resolution procedures contained in Section 13.11
of the
SRA as if such provision applied to the Parties hereto.
22. Severability;
Release.
The
Parties hereto shall not perform, or be expected to perform, any act hereunder
that is, or is reasonably believed to be, in violation of any applicable
state
or federal rule or regulation. If any provision of this Services Agreement
is
now or later in violation of any local, state or federal law, then such
provision shall be considered null and void for purposes of this Services
Agreement with all other provisions remaining in full force and effect. Each
Party expressly releases the other from any liability in the event either
of
said Parties cannot fulfill any obligation hereunder due to any prohibition
under local, state or federal laws pertaining to such obligation; provided,
that
the Parties agree to work together to structure an alternative solution for
addressing the provisions so found to be in violation.
23. Further
Assurances.
The
Parties agree that each will, from time to time, execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered, such amendments
and supplements hereto and such further instruments as may be reasonably
required or appropriate to further express the intention of the Parties,
or to
facilitate the performance of this Services Agreement.
24. Section
Headings.
The
headings of the various sections of this Services Agreement have been inserted
for convenience of reference only and shall not be deemed to be a part of
this
Services Agreement.
25. Assignment.
PMC may
not assign this Services Agreement or any of its rights or obligations hereunder
without the prior express written consent of the Company. The Company may
not
assign this Services Agreement or any of its rights or obligations hereunder
without the prior approval of the Company's Board of Advisors (as defined
in the
Operating Agreement) in accordance with Section 6.3 of the Operating
Agreement.
IN
WITNESS WHEREOF, each of the undersigned Parties has caused this Services
Agreement to be duly executed and delivered by one of its duly authorized
officers, all as of the date hereof.
|
PHH
HOME LOANS, LLC
|
PHH
MORTGAGE CORPORATION
|
|
By: /s/
Xxxxxxx X. Xxxxxxx
|
By:
/s/ Xxxxxxx X. Xxxxxxx
|
|
Name:
Xxxxxxx X. Xxxxxxx
|
Name:
Xxxxxxx X. Xxxxxxx
|
|
Title:
President
and Chief Executive Officer
|
Title:
President
and Chief Executive Officer
|
EXHIBIT
4.1
Capacity
Services
Services:
Capacity
services include the following services provided by PMC to the Company and/or
services provided by the Company to PMC:
| · |
Capacity
services for Net One Tele-services
-
includes phone consultants and additional staff for Loan Processing
Center
- additional staffing will be through PMC
employees.
|
| · |
Description
of services
-
1) weekend coverage to PMC from the Company or to the Company from
PMC; 2)
coverage for the corporate relocation business processed by the Company
on
behalf of PMC for non-Cendant Mobility driven business; 3) foreign
language support; and 4) excess capacity
support.
|
Fees1 :
| · |
The
fee for Net One Tele-services support will be [***] per lead paid
monthly.
|
| · |
The
fee for loan processing support will be [***] per application paid
monthly.
|
1 Effective as of Launch Date
[***]
INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES ACT OF
1934,
AS AMENDED.
EXHIBIT
5.1
Product
Support Services
Services:
Product
Support consists of the following services provided by PMC to the Company (not
including the Small Corps and whether or not the Company incurs these costs
or
similar costs directly):
| · |
Loan
control and completion
(LCC) - post-closing functions here include reconciling the HUD1
received
from closing agents to the cash dispersed on the loan reconciling
the tax
and insurance escrows if appropriate, the submissions for insurance
with
HUD for GNMA insured loans and loan pools, certain compliance monitoring
activities, verification of recorded deeds and title insurance policies
etc.
|
| · |
Pricing
-
functions here include establishing the rate and fees for the borrowers
established at the time of the rate lock commitment based on then
current
market conditions and profit expectations, performance of competitive
surveys and market data gathering efforts to verify the competitiveness
of
pricing, determination of price concessions and implementation of
concession policies etc.
|
| · |
Loan
sales
-
functions here include the aggregation of loans into pools based
on
appropriate characteristics, determination of best execution decisions,
gathering loans files, performance of due diligences, and shipping
of
files, management of GSE agency and mortgage loan investor relationships
etc.
|
| · |
Product
development
-
functions include development of loan program parameters, program
design
to comply with investor requirements, design integration of new programs
to company processes, communication of new programs and related
requirements etc.
|
| · |
Credit
risk management
-
includes providing access to PMC's automated underwriting systems,
monitoring of loan quality, monitoring of compliance with documentation
standards, monitoring performance of loans to assess underwriting
and
pricing effectiveness etc.
|
| · |
Mail
print center
-
includes collection and copying of documents in connection with processing
of the Company's loan applications and loan closing
packages.
|
| · |
Operational
strategy department
-
includes development, processing and reporting on client survey results,
office of the president for customer satisfaction and recovery,
etc.
|
| · |
Document
Review Center
-
includes the cost of finalizing loan processing and preparation of
closing
documents.
|
Fees:
Fees
will
be based on the fair value of services provided, based on actual costs incurred
by PMC plus a profit margin of [***]. On or before January 1 of each year,
PMC
will provide the Company with a forecast of estimated per loan costs, inclusive
of profit margin, for Production Support Services (Forecast Fees) for the
upcoming calendar year. Forecast Fees for the services will be billed on a
monthly basis. During the last month of each calendar quarter, PMC will analyze
Forecast Fees billed for the calendar year to date, inclusive of profit margin,
compare those fees to the actual costs incurred by PMC for the calendar year
to
date plus remainder of year forecast (Current Forecast Costs), and reconcile
the
two. In the event the Forecast Fees billed are greater than the Current Forecast
Costs, [***]. In the event Current Forecast Costs are greater than Forecast
Fees
billed, [***]. Appropriate adjustments will be made to the Forecast Fees on
a
going forward basis based on the results of this analysis. [***].
For
every
year after 2006, the annual per loan Production Support Services fees to be
charged shall not exceed the 2006 levels adjusted upward by the greater of
three
percent (3%) annualized or the cumulative change in Consumer Price Index (CPI)
from 2006 to the calendar year being evaluated without the written consent
of
the PHH Home Loans Board of Advisors.
Forecast
and Actual Fees for 20051 and
Forecast Fees for 2006 for Production Support Services will be as
follows:
Production
Support Fees
|
Forecast
|
Actual
|
Forecast
2006
|
|
|
2005
Fees
|
2005
Fees
|
Fees
|
|
|
($
per loan)
|
($ per loan) | ($ per loan) | |
|
Fees
for Total loans
|
[***]
|
||
|
Fees
for First Mortgage Loans
|
[***]
|
[***]
|
|
|
Fees
for Piggy-Back Second
|
[***]
|
[***]
|
|
|
Mortgages
|
1 Effective as of Launch Date
[***]
INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES ACT OF
1934,
AS AMENDED.
EXHIBIT
6.1
General
Administrative Services
Services:
General
Administrative (non-IT) services include the following services provided by
PMC
to the Company (including the Small Corps and whether or not the Company incurs
these costs or similar costs directly):
| · |
Accounting
and Finance
-
includes maintenance of the general ledger and related sub ledgers,
preparation of financial reports and management reports, preparation
of
financial forecasts, staffing models, profitability models, payment
of
bills, funding of loans, establishment of controls, controls monitoring,
determination of sales proceeds,
etc.
|
| · |
Telecom
-
includes the cost of telephone systems, staffing for maintenance
and call
prioritization systems, etc (including the PIMI
systems)
|
| · |
Business
intelligence
-
includes development and scheduling of management reporting and client
reporting systems, reporting data management
etc.
|
| · |
Legal
-
includes consulting on legal matters
etc.
|
| · |
Human
resources
-
includes payroll processing or related management, benefits management
and
participation in benefit plans, hiring-related matters, training-related
matters, etc
|
| · |
Public
relations
-
includes event management services, press related matters,
etc.
|
| · |
Administration
-
Vendor management, etc
|
| · |
Facilities
-
includes building management, landscaping management, heating, air
conditioning, power, growth management,
etc.
|
| · |
Training
-
development and delivery of training materials
etc.
|
| · |
Executive
-
includes an allocation of PHH Corporation executive management and
corporate structure, PHH Mortgage executive management and structure,
a
portion of Management incentive programs to the extent not allocated
to
specific functions, etc
|
Fees:
Fees
will
be charged based on a per loan basis, subject to a fixed minimum annual dollar
amount. Both the per-loan and annual minimum fees will adjust upward on the
first day of each calendar year at a maximum of 3%. The minimum annual payment
will be determined by PHH Member on a calendar year basis on or before December
31st
of each
calendar year. Reconciliation of (i) Forecast 2005 Fees billed versus Actual
2005 Fees incurred for 2005 and (ii) Forecast 2005 Fees billed in January and
February 2006 versus Stated 2006 Fees for the first quarter of 2006 for General
Administrative Services will take place no later than March 31,
2006.
Forecast
and Actual Fees for 20051 and
Stated Fees for 2006 for General Administrative Services are as
follows:
General
Administrative Services Fees
|
Forecast
|
Actual
|
Stated
|
|
|
2005
Fees
|
2005
Fees
|
2006
Fees
|
|
|
($)
|
($)
|
($)
|
|
|
Fees
for Total Loans2
|
[***]
|
||
|
Fees
for First Mortgage Loans2
|
[***]
|
[***]
|
|
|
Fees
for Piggy-Back Second Mortgages2
|
[***]
|
[***]
|
|
|
Minimum
Calendar Year Fees
|
[***]
|
[***]
|
[***]
|
Once
every two years PMC will prepare a schedule of at least three alternatives
for
the fixed and variable components of the General Administrative Services fees.
Within thirty (30) days of receipt of the schedule, Cendant Member will notify
PMC of its selection of fee structures for the following two year period. Fees
set forth above reflect the low volume option chosen by Cendant Member for
2005
and 2006.
1
Effective as of Launch Date
2 Fees
are per loan fees
[***]
INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES ACT OF
1934,
AS AMENDED.
EXHIBIT
7.1
IT
Administrative Services
Services:
| · |
IT
Administrative Services to the Company, including the Small Corps,
include
the following:
|
| o |
systems
operations
|
| o |
maintenance
of production systems
|
| o |
help
desk support
|
| o |
network
support
|
| o |
development
of enhancements
|
| o |
systems
interoperability
|
| o |
maintenance
of websites
|
| o |
systems
security
|
| o |
systems
management reporting
|
| o |
data
management
|
| o |
IT
vendor management
|
| o |
project
evaluation and management
|
| o |
resource
allocations
|
| o |
telecom
systems and support
|
| o |
new
systems integration
|
| o |
major
systems development
|
| o |
systems
controls
|
Fees:
Fees
will
be charged based on a per loan basis, subject to a fixed minimum annual dollar
amount. Both the per loan fees and the annual minimum fees will adjust upward
on
the first day of each calendar year (Reset) by the greater of (i) 3% or (ii)
the
increase in the Consumer Price Index rate for the October to October period
immediately preceding the Reset. The minimum annual payment will be determined
by the PHH member on a calendar year basis on or before December 31st
of each
calendar year. Reconciliation of (i) Forecast 2005 Fees billed versus Actual
2005 Fees incurred for 2005 and (ii) Forecast 2005 Fees billed versus Stated
2006 Fees for the first quarter of 2006 for IT Administrative Services will
take
place no later than March 31, 2006.
Forecast
and Actual Fees for 20051 and
Stated Fees for 2006 for IT Administrative Services are as follows:
IT
Administrative Fees
|
Forecast
|
Actual
|
Stated
|
|
|
2005
Fees
|
2005
Fees
|
2006
Fees
|
|
|
($)
|
($)
|
($)
|
|
|
Fees
for Total Loans 1
|
[***]
|
||
|
Fees
for First Mortgage Loans2
|
[***]
|
[***]
|
|
|
Fees
for Piggy-Back Second
|
|||
|
Mortgages1
|
[***]
|
[***]
|
|
|
Minimum
Calendar Year Fees
|
[***]
|
[***]
|
[***]
|
Once
every two years PMC will prepare a schedule of at least three alternatives
for
the fixed and variable components of the IT Administrative Services Fees. Within
thirty (30) days of receipt of the schedule, Cendant Member will notify PMC
of
its selection of fee structures for the following two year period. Fees set
forth above reflect the low volume chosen by Cendant Member for 2005 and
2006.
1 Effective
as of Launch Date
2 Fees
are per loan fees
[***]
INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES ACT
OF 1934,
AS AMENDED.
