MARKETING AGREEMENT BY AND BETWEEN COLDWELL BANKER REAL ESTATE CORPORATION, CENTURY 21 REAL ESTATE CORPORATION, ERA FRANCHISE SYSTEMS, INC., AND SOTHEBY’S INTERNATIONAL AFFILIATES, INC. AND CENDANT MORTGAGE CORPORATION
Exhibit 10.4
EXECUTION COPY
BY AND BETWEEN
COLDWELL BANKER REAL ESTATE CORPORATION,
CENTURY 21 REAL ESTATE CORPORATION,
ERA FRANCHISE SYSTEMS, INC., AND
SOTHEBY’S INTERNATIONAL AFFILIATES, INC.
AND
CENDANT MORTGAGE CORPORATION
This Marketing Agreement (“Agreement”) is entered into as of the 31st day of January, 2005 (“Effective Date”), between Cendant Mortgage Corporation (to be renamed PHH Mortgage Corporation), a New Jersey corporation (“PHH Mortgage”) having an office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ and Coldwell Banker Real Estate Corporation (“Coldwell Banker”), Century 21 Real Estate LLC, ERA Franchise Systems, Inc. (“ERA”), and Sotheby’s International Affiliates, Inc., each having offices at ▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (each a “Brand” and collectively, the “Brands”) (collectively, the “Parties”).
WHEREAS, PHH Mortgage is engaged in providing mortgage services that include counseling, efficient processing, origination, and servicing of mortgage loans on homes located in the United States; and
WHEREAS, the Brands operate as real estate franchisors that license their respective marks, tools, and systems to independently owned and operated real estate brokerages who in turn provide home purchase and sales services to their customers; and
WHEREAS, PHH Mortgage and Coldwell Banker, ERA and TM Acquisition Corp. executed a trademark license agreement of even date herewith pursuant to which PHH Mortgage licensed Coldwell Bank Mortgage®, Century 21 Mortgage® and ERA Mortgage® names and marks; and
WHEREAS, PHH Mortgage and the Brands wish to develop a marketing program (“Program”) the purpose of which will be to market PHH Mortgage’s mortgage services to the Brands’ franchisees (the “Franchisees”) offices;
NOW, THEREFORE, in consideration of the mutual promises contained herein, the Parties hereby agree as follows:
| 1. | The Program. |
| (a) | The Brands shall recommend PHH Mortgage as their preferred providers of
mortgage programs and products to their Franchisees. The Program shall also include
mail inserts, brochures and advertisements on a quarterly basis to the Franchisees. In
addition, the Brands shall provide access to PHH Mortgage in the Brands’ company
newsletters and to all of the Franchisees, if appropriate, during periodic sales
meetings. The Brands shall also actively promote the PHH Mortgage products and
services to the Franchisees, and such Franchisees’ sales agents (as applicable),
including without limitation, providing annual letters or e-mails (the contents of such
promotional literature could be determined within the reasonable discretion of the
Brands) to both the Franchisees and the Franchisees’ sales agents, as appropriate, from
the respective Brands’ presidents or chief operating officers promoting the salability
of the PHH Mortgage products and services. Additionally, the Brands shall provide PHH
Mortgage (at no additional charge) at each of the Brand’s and Cendant’s residential
real estate trade shows (as applicable) and at each of the Brand’s and Cendant’s
international business conferences relating to real estate where there is a trade show:
(i) two (2) complimentary standard size booths at a mutually agreeable location
prominent to visitors to such trade shows or international business conference; and
(ii) an opportunity for a PHH Mortgage representative to host its own break-out session
(if any are held) during such conferences on a day on which a majority of such
break-out sessions are being held and at a location where a majority of break-out
sessions are being held, and at a location reasonably designed to obtain participation. |
The Brands shall provide to PHH Mortgage (at no charge to PHH Mortgage) a meaningful
opportunity for a senior member of PHH Mortgage’s management to speak for a period
of time, mutually agreed upon by the parties, at each Brand’s annual franchise
conventions subject to respective Brand approval of individual and script, which
approval shall not be unreasonably withheld. PHH Mortgage shall abide by all
reasonable rules established by the Brands or the convention center for each such
convention. |
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The Brands shall provide to PHH Mortgage (at no charge) a “premier” (or highest
level that may exist) sponsorship at all brand national conventions, regional or
local conferences under the control of the Brands. |
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The Brands shall include on-line promotion on each of the Brand sites of the PHH
Mortgage opportunity, as well as a hyperlink to the PHH Mortgage site. PHH Mortgage
agrees not to over-ride any browser or back functionality for those users who arrive
at the PHH Mortgage site from such link and shall provide a link back to such Brand
site on each of the PHH Mortgage web pages. |
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The Brands shall also provide PHH Mortgage certain marketing opportunities as set
forth on Exhibits A-D. |
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| (b) | Although each Brand shall market PHH Mortgage to its Franchisees as required
by the Program, the Brands shall not be required to, and they shall not as part of the
Program, provide advice, counseling or assistance to consumers in connection with any
particular mortgage loan for which the consumers have applied or may apply to PHH
Mortgage. |
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| (c) | The Brands shall encourage their Franchisees to embrace PHH Mortgage as each
Franchisee’s provider of mortgage products and services and, when and where |
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appropriate, to inform the Franchisees’ agents of the mortgage loan products and
services offered by PHH Mortgage. |
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| (d) | The Brands shall provide monthly reports to PHH Mortgage reflecting monthly
Franchisee mortgage activity. |
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| (e) | The Brands shall offer to PHH Mortgage those additional programs, and shall
employ those strategies with respect thereto, as are listed on Exhibit E. |
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| 2. | Compensation. Beginning on March 1, 2005, PHH Mortgage shall pay a fee to the Brands
(“Monthly Marketing Fee”) for the access and marketing provided under the Program every month
during the term of this Agreement (“Monthly Term”). The amount of the Monthly Marketing Fee
is set forth in Exhibit 2 hereto as amended from time to time in accordance with this Section
2. The Monthly Marketing Fee shall be paid in arrears, on the first day of the month next
succeeding the end of the Monthly Term in respect of which such fee is paid, with the
exception of the first payment which shall be made with the second payment when the second
payment is due on April 1, 2005. The Parties each acknowledge and agree that the Monthly
Marketing Fee reflects the reasonable and fair market value of the goods and services to be
provided by the Brands under the Program, without regard to the value or volume of Mortgage
Loans that may be attributable to the Program. |
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Not more frequently than once each year, any Party may notify the other, in writing, of
its determination (a “Determination”), and the basis thereof, that the Monthly Marketing Fee
amount may fail to reflect the reasonable and fair market value of the goods and services to
be provided by the Brands, such determination to be based upon all relevant information made
available to the Parties, including but not limited to: (i) the number of real estate
agents employed by or working with the Brand’s Franchisees; (ii) the number of real estate
customers (including home buying customers) of the Brand’s Franchisees; (iii) the average,
number and range of sales prices and sales of homes by the Brand’s Franchisees; (iv) the
Brand’s marketing area; (v) the number of consumers and agents of the |
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Brand’s Franchisees indicating that they have heard, seen or recall the Program, as
indicated by surveys or other mean; and (vi) changes thereto since the prior year
(collectively, the “Data”). To the extent it is reasonably available, the Brands agree to
provide the Data to PHH Mortgage. If the other Party agrees with the Determination, the
Monthly Marketing Fee amount shall be so adjusted, effective upon the commencement of the
next applicable one-month term. If there is disagreement, the Parties shall attempt in good
faith to resolve the disagreement. If the Parties are unable to resolve the disagreement
within sixty (60) days following the date on which the notifying Party provide notice to the
other Party of its desire to change the Monthly Marketing Fee, the parties shall refer the
disagreement to an independent third party jointly selected by the Parties and having
expertise in the real estate brokerage and mortgage businesses to resolve the disagreement. |
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| 3. | Exclusivity. Each of the Brands hereby agrees that, except as set forth below or
elsewhere in this Agreement, such Brand shall exclusively recommend PHH Mortgage as provider
of Mortgage Loans to the independent sales associates affiliated with such Brand’s
Franchisees. Each of the Brands further agrees that it shall actively and exclusively promote
PHH Mortgage and its Mortgage Loan origination services to such Brand’s Franchisees;
provided, however that: |
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(i) No Brand Franchisee shall be required, in any manner whatsoever, to
condition doing business with a customer on such customer obtaining a Mortgage Loan
from, having to contact, or having to agree to be contacted by, PHH Mortgage; and |
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(ii) PHH Mortgage acknowledges that neither the Brands nor any of their
Affiliates have the right to co-brand with a Person that is not a Cendant Affiliate
the “Sotheby’s International Realty” name and ▇▇▇▇ and that all marketing materials
directed to the customers of the Sotheby’s Brand’s Franchisees will be branded as
“PHH Mortgage.” |
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| 4. | Relationship. The relationship between PHH Mortgage and the Brands shall be that of
independent contractors and no party shall be or represent itself to be an agent, employee,
partner or joint venturer of the others, nor shall any party have or represent itself to have
any power or authority to act for, bind or commit another party. PHH Mortgage shall have sole
discretion and authority with respect to product development, origination, processing,
underwriting and servicing of all mortgage financing. |
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| 5. | Confidential Information. Each party recognizes that, during the term of this
Agreement, its directors, officers or employees may obtain knowledge of trade secrets,
membership lists and other confidential information, including the terms of this Agreement, of
the other party which are valuable, special or unique to the continued business of that party
(collectively, “Confidential Information”). Accordingly, each party hereby agrees that
Confidential Information will be held in strict confidence, and each Party hereto will
exercise the same degree of care with respect thereto that such Party uses to preserve and
safeguard its own confidential proprietary information. The Confidential Information will not
directly or indirectly be divulged, disclosed, sold or communicated to any other person or
entity or used for any purposes other than those purposes expressly contemplated by this
Agreement, except as otherwise required by judicial or regulatory authorities having
jurisdiction in respect thereof. |
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| 6. | Disclaimer. Neither PHH Mortgage nor the Brands make any representation or warranty
to each other regarding the effect that this Agreement and the consummation of the
transactions contemplated hereby may have upon the Foreign, Federal, State or local tax
liability of the other. |
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| 7. | Severability. If any provision of this Agreement should be invalid, illegal or in
conflict with any applicable state or federal law or regulation, such law or regulation shall
control, to the extent of such conflict, without affecting the remaining provisions of this
Agreement. |
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| 8. | Term and Termination. The term of this Agreement shall be coextensive with the term
of the Strategic Relationship Agreement (as defined below). This Agreement shall terminate
automatically upon the termination of the Strategic Relationship Agreement in accordance with
its terms, except that the obligations of the parties set forth in Sections 5 and 9 of this
Agreement shall survive any such termination and the obligations of PHH Mortgage under Section
2 of this Agreement shall survive any such termination solely with respect to any unpaid
amount of any Monthly Marketing Fee payable in respect of any Monthly Term or portion thereof
prior to such termination. |
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| 9. | Hold Harmless. |
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| (a) | PHH Mortgage agrees to indemnify, defend and hold the Brands harmless from and
against any and all claims, suits, actions, liability, losses, expenses, or damages
which may hereafter arise, which the Brands, its affiliates, directors, officers,
agents or employees may sustain due to or arising out of any negligent act or omission
or by breach of any agreement with a Brand Franchisee by PHH Mortgage, its affiliates,
officers, agents, representatives or employees or out of any act by PHH Mortgage, its
affiliates, officers, agents, representatives or employees in violation of this
Agreement or in violation of any applicable law or regulation. |
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| (b) | The Brands agree to indemnify, defend and hold PHH Mortgage harmless from and
against any and all claims, suits, actions, liability, losses, expenses, or damages
which may hereafter arise, which PHH Mortgage, its affiliates, directors, officers,
agents or employees may sustain due to or arising out of any gross negligence on the
part of the Brands or any of their affiliates, officers, agents, representatives or
employees (it being understood that no Brand Franchisee shall be an affiliate, agent or
representative of a Brand for any purpose under this Agreement). |
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| 10. | License. PHH Mortgage hereby grants to the Brands during the term of this Agreement
the limited, revocable license and right to use PHH Mortgage’s name, trade names (as |
applicable), service marks, trademarks, logos and emblems (collectively known as the
“Licensed Marks”) solely for the purpose of marketing and promoting PHH Mortgage under the
terms of this Agreement. The Brands shall have no right, title, or interest in or to the
Licensed marks other than to use the Licensed Marks pursuant to the terms of this Agreement. |
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| 11. | Notices. All notices required or permitted by this Agreement shall be in writing and
shall be given by certified mail, return receipt requested or by reputable overnight courier
with package tracing capability and sent to the address at the head of this Agreement or such
other address that a party specified in writing in accordance with this paragraph. |
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| 12. | Amendment. The terms and conditions of this Agreement may not be modified or amended
other than by a writing signed by all Parties. |
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| 13. | Assignment; Binding Nature. The terms of this Agreement shall be binding upon and
shall inure to the benefit of the Parties hereto. This Agreement shall not be assigned by any
party without the express prior written consent of the other party. |
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| 14. | Entire Agreement. This Agreement and any Exhibits attached hereto constitute the
entire Agreement between the Parties and supercede any and all prior and contemporaneous
agreements, understandings, documents, negotiations, and/or discussions (whether oral or
written) between the Parties with respect to the subject matter hereof. |
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| 15. | Governing Law. This agreement shall be subject to and construed under the laws of
the State of New York, without reference to conflicts of law provisions thereof. |
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| 16. | Definitions. |
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| (a) | “Operating Agreement” means the Amended and Restated Limited Liability
Company Operating Agreement for PHH Home Loans, LLC, dated as of January |
31, 2005, by and between PHH Broker Partner Corporation and Cendant Real Estate
Services Venture Partner, Inc. |
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| (b) | “Strategic Relationship Agreement” means the Strategic Relationship
Agreement, dated as of January 31, 2005, by and among Cendant Real Estate Services
Group, LLC, Cendant Real Estate Services Venture Partner, Inc., PHH Corporation, PHH
Mortgage, PHH Broker Partner Corporation and PHH Home Loans, LLC. |
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed the day and year first above written.
CENDANT MORTGAGE CORPORATION
Signature: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
COLDWELL BANKER REAL ESTATE CORPORATION
Signature: /s/ ▇▇▇▇ ▇. ▇▇▇▇
By: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President and Secretary
CENTURY 21 REAL ESTATE LLC
Signature: /s/ ▇▇▇▇ ▇. ▇▇▇▇
By: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President and Secretary
ERA FRANCHISE SYSTEMS, INC.
Signature: /s/ ▇▇▇▇ ▇. ▇▇▇▇
By: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President and Secretary
SOTHEBY’S INTERNATIONAL AFFILIATES, INC.
Signature: /s/ ▇▇▇▇ ▇. ▇▇▇▇
By: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President and Secretary