Exhibit 10.23
FORM OF
MARKETING AND
ADMINISTRATIVE SERVICES AGREEMENT
THIS MARKETING AND ADMINISTRATIVE SERVICES AGREEMENT, hereinafter
referred to as the "Agreement," is entered into on this _____ day of ________,
2003, by and between EDUCATION LENDING SERVICES, INC., a Delaware corporation,
doing business as "Consolidation Assistance Program, hereinafter referred to as
"CAP," having its principal place of business at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and ________________________________________,
hereinafter referred to as "Marketer," having its principal place of business at
___________________________________________________.
RECITALS
WHEREAS, CAP desires Marketer to market on behalf of CAP the federal
consolidation loans (hereinafter referred to as "Consolidation Loans") offered
and originated by CAP pursuant to the Federal Family Education Loan Program
(hereinafter referred to as "FFELP") to current and prospective customers of
Marketer in the form of leads and/or completed Consolidation Loan Applications;
and
WHEREAS, Marketer desires to market on behalf of CAP the Consolidation
Loans offered by CAP using its lender name of "Consolidation Assistance
ProgramSM," on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties mutually agree as follows:
1. MARKETING SERVICES.
1.1 Marketer shall market to all of its current and prospective
customers utilizing its Website and direct marketing activities the
consolidation loans authorized under Sections 427 and 428 of the Higher
Education Act of 1965, as amended (hereinafter referred to as the "Act"), that
are offered by and meet CAP's consolidation loan criteria. Marketer agrees that
Marketer will not use the loan applications of CAP for any consolidation loan
not meeting such criteria or for any other lender.
1.2 For the compensation set forth in section 2. below, Marketer shall
provide the marketing, administration, and related activities and/or services as
set forth in Exhibit 1.2 attached hereto and by this reference made a part
hereof.
1.3 Marketer agrees that prior to the use by Marketer of any collateral
marketing material, whether written material or Website screens, specifically
utilizing CAP or
-1-
Consolidation Assistance Program names used in its marketing activities,
Marketer shall receive the prior written approval of CAP. CAP shall have five
(5) business days after receipt by CAP to respond in writing to Marketer whether
a respective submission is approved or denied. If Marketer does not receive a
response from CAP to the submitted collateral within the five (5) business day
period, then the specific submitted collateral material shall be deemed
approved.
1.4 In addition to the activities and/or services set forth on Exhibit
1.2 attached hereto, Marketer shall be required to become reasonably
knowledgeable and current on the applicable procedures, policies, rules and
regulations concerning the marketing and availability of the educational loans
offered through the Federal Family Education Loan Program authorized by Title
IV-B of the Higher Education Act of 1965, as amended, as related to the student
loan services offered by or through CAP.
1.5 Marketer shall provide CAP from its Website and/or internet and
direct marketing activities with qualified leads and/or completed Consolidation
Loan applications. For purposes of this Agreement, a "Qualified Lead" is a
prospective Federal Consolidation loan applicant that has met the qualification
criteria set forth in Exhibit 1.5 attached hereto and by this reference made a
part hereof, and a "Consolidation Loan Application" is a consolidation loan
application completed and executed by the respective borrower that is ready for
processing by CAP or its third party servicer as a FFELP consolidation loan.
1.6 Within thirty (30) days after the execution of this Agreement,
Marketer shall provide or make available to CAP in the electronic format and
methodology set forth on Exhibit 1.6 attached thereto and by this reference made
a part hereof, entitled "Data Transfer Specifications," all Qualified Lead
and/or Consolidation Loan Application information relating to the information
sent to or received by CAP during the term of this Marketing Agreement. The
information and methodology for submitting the Qualified Lead information may be
modified by CAP at any time during the term hereof upon thirty (30) days prior
written notice to Marketer. Marketer hereby agrees that all of Qualified Lead
and/or Consolidated Loan Application information is confidential information and
shall only be transmitted, received, and/or maintained by Marketer in an
encrypted format or electronically secured environment reviewed by and approved
by CAP. All such confidential information shall not be transmitted or sent
outside the United States of American without the prior written permission of
CAP.
1.7 CAP agrees to provide Marketer with detailed electronic information
each business day summarizing the status of all outstanding Applications by
Social Security Number. The electronic information shall be in the format and
contain the information set forth in Exhibit 1.7 attached hereto and by this
reference made a part hereof ("Application Information"). The Application
Information shall be provided to Marketer's FTP site each business day or daily
through the internet as such access is made available to Marketer by CAP. If
Marketer requests a change in the Application Information format, Marketer shall
compensate CAP at the rate of $200 per hour to implement such change, subject to
the CAP's prior written or e-mail approval of the requested change, and if so
approved by CAP, the subsequent approval by Marketer of the time required for
ELServices to implement such requested change, whether in writing or by e-mail.
-2-
2. COMPENSATION TO MARKETER.
2.1 CAP shall pay Marketer a "Marketing Fee" in the amount set forth in
Exhibit 2.1 attached hereto and by this reference made a part hereof for each
completed Consolidation Loan application ("Completed Application") resulting
from the marketing, administration, and related activities of Marketer as set
forth in Exhibit 1.2 attached hereto.
2.2 For purposes of this Agreement, a "Completed Application" shall
mean a FFELP consolidation loan application received and processed by CAP, or
its third party service provider(s), wherein all the Loan Verification
Certificates ("LVCs") for a respective Consolidation Loan application have been
received and the application is ready to be guaranteed by a guarantor and funded
by CAP as a FFLEP consolidation loan.
3. PAYMENT OF COMPENSATION.
3.1 Except as specifically set forth in Exhibit 2.1 attached hereto,
all compensation due Marketer for Completed Applications shall be paid within
thirty (30) days after the end of the prior calendar month during the term of
this Agreement for which a payment is due Marketer. Each monthly payment shall
be accompanied by a report indicating the number of Completed Applications
received by CAP from the marketing and administrative activities of Marketer for
the respective prior calendar month period.
4. COMPLIANCE.
4.1 The parties intend and in good faith believe that the fees to be
paid hereunder reflect reasonable compensation by CAP for the marketing,
administration, and related services and/or activities of Marketer as set forth
in this Agreement. Such payments of compensation are intended to comply with
Section 435(d) (5) of the Higher Education Act of 1965, as amended, and the
regulations, policy statements, and pronoucements of the U.S. Department of
Education, and all such compensation shall be immediately discontinued if the
Department of Education informs either party hereto that such payments do not
comply with that section of the Higher Education Act, unless an alternative
compensation arrangement is acceptable to the parties and approved by the
Department of Education or by the opinion of counsels for both parties.
5. TERM AND TERMINATION.
5.1 The term of this Agreement shall be for the period beginning on the
date of this Agreement and ending _________________, unless terminated prior
thereto in accordance with the terms of this Agreement.
5.2 CAP may terminate this Agreement upon thirty (30) days prior
written notice to Marketer if:
a. [insert terms of termination specific to Marketer];
-3-
b. [insert loan application volume specific to Marketer];
c. In the reasonable judgment of CAP the occurrence of one of the
following events adversely affects the rate of return or value of Consolidation
Loans: (i) an amendment to or other legislative or executive action affecting
the Higher Education Act, (ii) any tax law applicable to the operations of the
CAP or any other applicable law or regulation, or (iii) any implementation or
interpretation of any existing provision of the Higher Education Act, including
but not limited to a determination by the Secretary pursuant to Section 427A(h)
of the Higher Education Act that changes the basis for determining the rate of
interest for Consolidation Loans.
5.3 Marketer may terminate this Agreement upon thirty (30) days prior
written notice to CAP should CAP fail to make timely payment of the compensation
to Marketer in accordance with Section 3. above, and such breach for non-payment
is not cured within fifteen (15) days after written notice is received by CAP.
5.4 Upon written notice to Marketer by CAP of a material breach of the
terms of this Agreement, Marketer shall cease all marketing activities on behalf
of CAP under the terms of this Agreement until such time as the breach is cured
by Marketer, but not later than thirty (30) days after such written notice is
received. If the material breach is not cured by Marketer within the thirty (30)
day period, CAP shall have the right to terminate this Agreement at anytime
thereafter upon written notice to Marketer. For purposes of this Agreement, a
"material breach" shall include, but not limited to, the violation of any
federal and state law regarding the privacy of customer information and
violation of the use of the marks of CAP as set forth in Section 6. below.
5.5 In the event (i) of a sale or distribution of all or substantially
all of the assets of Marketer or a sale or distribution of sufficient stock
(other than pursuant to a public offering) or membership interests, as the case
maybe, of Marketer to effect a change in control or (ii) that Marketer or its
affiliates enters into the business of providing FFELP student loans services or
a product(s) or services substantially similar to those student loan products or
services of CAP or its affiliates, CAP may, in its sole discretion, terminate
this Agreement immediately upon written notice to Marketer.
5.6 Either party may terminate this Agreement with immediate effect:
(i) upon the institution by the other party of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by the other party to institution of
bankruptcy or insolvency proceedings against it or the filing by the other party
of a petition or answer or consent seeking reorganization or release under the
Federal Bankruptcy Code, or any other applicable Federal or state law, or the
consent by the other party to the filing of any such petition or the appointment
of a receiver, liquidator, assignee, trustee, or other similar official of the
other party or of any substantial part of its property, or the making by the
other party of an assignment for the benefit of creditors, or the admission in
writing by the other party of an assignment for the benefit of creditors, or the
admission in writing by the other party of its inability to pay its debts
generally as they become due or the taking of corporate action by the other
party in furtherance of any such actions; (ii) if, within
-4-
sixty (60) days after the commencement of an action against the other party
seeking any bankruptcy, insolvency, reorganization, liquidation, dissolution or
similar relief under any present or future law or regulation, such action shall
not have been dismissed or all orders or proceedings hereunder affecting the
operations or the business of the other party stayed, or if the stay of any such
order or proceeding shall thereafter be set aside; or if, within sixty (60) days
after the appointment without the consent or acquiescence of the other party of
any trustee, receiver or liquidator or similar official of the other party, or
of all or any substantial part of the property of the other party, such
appointment shall not have been vacated.
6. USE OF MARKS.
6.1 CAP owns certain marks, including the word ▇▇▇▇ EDUCATION LENDING
SERVICES and CONSOLIDATION ASSISTANCE PROGRAM and associated logos (such
specifically identified marks herein collectively referred to as the "Marks").
Marketer acknowledges and agrees that any use of the Marks shall be in a form
and in a medium as approved from time to time by CAP. Marketer further agrees
that CAP has the right to seek and obtain injunctive relief for any violation by
the Marketer, its agents and assigns, of Marketer's obligations hereunder. CAP
hereby grants to Marketer a non-exclusive, nontransferable license to use the
Marks in connection with its website and direct mail financial aid information
marketing activities solely in manner approved by CAP in accordance with the
terms of this Agreement, and Marketer accepts this license subject to the terms
and conditions set forth in paragraph 6.4. below.
6.2 Any and all materials used by Marketer to solicit or contact its
customers on behalf of CAP using the Marks or related trademarks and/or service
marks, including all written materials and/or Website screens, shall be subject
to the prior written approval of CAP.
6.3 Upon termination of this Agreement, Marketer agrees to immediately
discontinue all use of the Marks or any term and/or logo confusingly similar
thereto, and to destroy all materials and Website screens in its possession
bearing the Marks. Marketer further agrees to verify to CAP its compliance with
the above in the form of a notarized statement to be deliverable to CAP within
thirty (30) business days after the termination of this Agreement.
6.4 Marketer acknowledges the ownership of the Marks in CAP, and agrees
that it will do nothing inconsistent with such ownership, and that all use of
the Marks by Marketer shall inure to the benefit of and be on behalf of CAP. The
license granted hereunder shall not give Marketer any right, title, or interest
in the Marks other than the right to use the ▇▇▇▇ in accordance with the terms
of this Agreement, and Marketer agrees that it will not attack the title of CAP
to the Marks or attack the validity of the license granted hereunder.
6.5 Notwithstanding any other provision of this Agreement to the
contrary, neither party shall have the right to use the other party's registered
or unregistered trademarks, service marks, or trade names, or to refer to the
other party directly or indirectly, in connection with any product, promotion or
publication without the prior written approval of that party. Each party
-5-
acknowledges that any prior consent of use or reference may be revoked at any
time with immediate effect.
7. WARRANTIES.
7.1 Each party represents and warrants that the performance of its
obligations under this Agreement complies with all applicable federal, state,
local, and foreign laws and regulations. Each party covenants to inform the
other party immediately of any changes in such laws or regulations of which it
shall have knowledge and which may require a change in the performance
obligations hereunder.
7.2 Each party represents and warrants that it is a duly organized
limited liability company or corporation and in good standing in the state of
its organization. Each party further represents and warrants that it has the
full power and authority to execute this Agreement and to take all actions
required by, and to perform the agreements contained in this Agreement, and that
each party's obligations under this Agreement do not conflict with its
obligations under any other agreement to which it is a party.
8. INDEMNIFICATION AND HOLD HARMLESS.
8.1 Each party shall indemnify and hold harmless the other party, its
parent, subsidiaries, affiliates, successors, assignees, managers, directors,
officers, agents, and employees (each an "Indemnitee) from and against any loss,
damage, cost, expense, liability, and settlement, including without limitation,
any reasonable attorney fees and court costs (each of the foregoing a "Claim")
reasonably incurred by any Indemnitee which Claim arises out of or in connection
with (i) the intentional or negligent act or omission of the other party, or its
officers, directors, managers, employees, contractors, or agents (collectively,
the "Agents") in the course of the performance of each parties duties and
obligations under this Agreement; (ii) the material failure of a party and its
Agents, as the case may be, to comply with the terms of this Agreement; or (iii)
the material failure of a party (including without limitation its Agents who
perform on behalf of the party hereunder) to comply with its obligations under
any and all laws, rules, or regulations applicable to a party or its Agents as
the case may be.
8.2 Each Indemnitee seeking indemnification under this Agreement shall
give prompt notice to the respective party (the "Indemnitor") along with such
Indemnitee's request for indemnification, of any Claim for which it is seeking
indemnification. The parties understand and further agree that no settlement of
an indemnified Claim shall be made by an Indemnitee without the concurrence of
the Indemnitor. The Indemnitor shall control the settlement or defense of any
Claim; provided, however, that the Indemnitee may, at its cost, engage its own
attorneys. The Indemnitee will fully cooperate with the Indemnitor to enable it
to fulfill its obligations with respect to such Claim.
8.3 The provisions of this section 8. shall survive the termination of
this Agreement.
-6-
9. LIMITATION OF LIABILITY.
9.1 IN NO EVENT SHALL ANY PARTY HERETO (INCLUDING WITHOUT LIMITATION
THE AGENTS AND EMPLOYEES THEREOF) BE LIABLE TO THE OTHER PARTY (INCLUDING
WITHOUT LIMITATION THE AGENTS AND EMPLOYEES THEREOF) FOR ANY SPECIAL, INCIDENTAL
OR CONSEQUENTIAL DAMAGES, EVEN IF SUCH PARTY SHALL HAVE BEEN ADVISED OF THE
POSSIBILITY OF SUCH POTENTIAL LOSS OR DAMAGE.
9.2 EXCEPT AS OTHERWISE EXPRESSLY STATED HEREIN, THE AGGREGATE
LIABILITY OF EITHER PARTY HERETO (THE "LIABLE PARTY") TO THE OTHER PARTY HERETO
(INCLUDING WITHOUT LIMITATION THE AGENTS AND EMPLOYEES THEREOF) IN CONNECTION
WITH THIS AGREEMENT, SHALL NOT EXCEED THE AMOUNT PAID OR OWING AND UNPAID BY
CAP UNDER THIS AGREEMENT, REGARDLESS OF THE FORM OF ACTION GIVING RISE
TO SUCH LIABILITY (WHETHER IN CONTRACT, TORT OR OTHERWISE).
9.3 THE LIMITATION SET FORTH IN SECTION 9.2 ABOVE SHALL NOT APPLY TO
DAMAGES ARISING DIRECTLY FROM (i) THE BREACH BY THE LIABLE PARTY OF ITS
OBLIGATIONS UNDER SECTIONS 6. MARKS AND 10. CONFIDENTIALITY HEREOF, (II) A
NON-AFFILIATED THIRD PARTY CLAIM OR (III) THE INTENTIONAL OR GROSSLY NEGLIGENT
ACT OR OMISSION OF THE LIABLE PARTY IN THE COURSE OF THE PERFORMANCE OF ITS
DUTIES OR OBLIGATIONS UNDER THIS AGREEMENT.
9.4 The provisions of this Section 9. shall survive the termination of
this Agreement.
10. CONFIDENTIALITY.
10.1 General: This Agreement and the information furnished each other
prior to or after the execution of this Agreement, except as may be otherwise
required by statute, for financial reporting purposes, court order, or as may be
necessary to the performance of the services required under this Agreement,
shall be held in strict confidence by each party as proprietary information.
10.2 Termination of Agreement: Upon termination or expiration of this
Agreement and at the request and option of Marketer or CAP, as the case may be,
the other party agrees promptly (i) to return the confidential information of
the other party to such party or (ii) destroy the confidential information of
the other party and acknowledge in a sworn affidavit that all such confidential
information has been destroyed.
11. PUBLICITY.
11.1 Except as may be required by law, no party hereto shall issue
advertising, promotional activity, press, or publicity release relating to the
provisions of this Agreement or the
-7-
other party, including the affiliates of either party, without securing the
prior written consent of such other party.
12. GOVERNING LAW.
12.1 Except as otherwise required by federal law, this Agreement shall
be governed by and construed in accordance with the laws of the State of
Delaware, without reference to its conflict of laws principals. At the sole
discretion of Grad Partner, the County of San Diego may be the proper venue for
all purposes under this Agreement.
13. ASSIGNMENT.
13.1 Neither party may assign or transfer this Agreement, or the rights
hereunder, to any party without the prior written consent of the other party,
except that CAP may assign or transfer this Agreement to its parent, a
subsidiary or an affiliate thereof without Marketer's prior written consent.
Such consent shall not be unreasonably withheld by the non-requesting party. For
purposes of this paragraph a "transfer" shall include a transfer or sale of more
than fifty percent (50%) of the ownership interests in either party, whether by
sale or transfer of stock, membership interests, or the assets of the respective
party.
14. NOTICES.
14.1 All notices required hereunder must be in writing and will be
deemed to have been given when delivered personally or received by a overnight
delivery service, or three (3) days after being deposited in the U.S. Mail,
certified or registered, return receipt requested, postage prepaid, at the
addresses first listed above or such other address as the parties may designate
from time to time in writing during the term hereof. Notwithstanding the
foregoing, any notice shall also be transmitted by facsimile to the receiving
party on the day the respective notice is deposited in the U.S. mail by the
forwarding party.
15. ALTERNATIVE DISPUTE RESOLUTION.
15.1 Negotiation: The parties shall attempt in good faith to resolve
any dispute arising out of or relating to this Agreement (other than disputes
regarding material breaches) promptly by negotiations between executives who
have authority to settle the controversy. Any party may give the other party
written notice of any dispute not resolved in the normal course of business.
Within twenty (20) days after delivery of said notice, executives of both
parties shall meet at a mutually acceptable time and place, and thereafter as
often as they reasonably deem necessary, to exchange relevant information and to
attempt to resolve the dispute. If the matter has not been resolved within sixty
(60) days of the disputing party's notice, or if the parties fail to meet within
twenty (20) days, either party may initiate mediation of the controversy or
claim as provided hereinafter. If a negotiating party intends to be accompanied
at a meeting by an attorney, then the other negotiating party shall be given
advance notice of such intention and may also be accompanied by an attorney. All
negotiations pursuant to this clause shall be deemed
-8-
confidential and shall be treated as compromise and settlement negotiations for
purposes of the Federal Rules of Evidence and state rules of evidence.
15.2 Mediation: If the above referenced dispute has not been resolved
by negotiation as provided above, the parties shall endeavor to settle the
dispute by mediation under the then current Center for Public Resources ("CPR")
Model Procedure for Mediation of Business Disputes. One neutral third party will
be selected from the CPR Panels of Neutrals to mediate the dispute. If the
parties encounter difficulty in agreeing on a neutral, they will seek the
assistance of CPR in the selection process.
15.3 Other Remedies: In the event of a dispute arising out of or
relating to this contract or the breach, termination or validity thereof, which
has not been resolved by non-binding means as provided in Sections 15.1 and 15.2
above within sixty (60) days of the initiation of such procedure, either party
may seek any remedy available at law or equity, including recourse to the
courts.
16. NO IMPLIED WAIVER.
16.1 Any waiver or modification, expressed or implied, by either party
of any breach of this Agreement shall not be construed to be a waiver of any
such breach or any acquiescence thereto, nor shall any delay or omission by such
party to exercise any right arising from any such breach affect or impair the
respective party's right to such breach or any future breach. All rights and
remedies hereunder are cumulative and are not exclusive of any other rights or
remedies provided hereunder or by law.
17. CONSTRUCTION.
17.1 In the event it is determined that this Agreement or any part of
this Agreement is or would be declared invalid for any reason, the parties agree
to execute as soon as possible a new Agreement, in whole or in part,
reestablishing, to the extent allowed, the intent of the parties when the
original Agreement was entered into by them.
18. COUNTERPARTS.
18.1 This Agreement may be executed in one or more counterparts, each
of which shall constitute an original, but all of which together shall
constitute one and the same instrument notwithstanding that all parties are not
signatories to the same counterparts.
19. BENEFIT.
19.1 This Agreement shall be binding upon and insure to the benefit of
the parties thereto and their respective successors and assigns in consideration
of the mutual promises and previously provided services described herein.
-9-
20. ENTIRE AGREEMENT.
20.1 This instrument contains the entire agreement of the parties
hereto and supersedes all prior negotiations, understandings, letters,
arrangements, and agreements between them concerning the subject matter
contained herein.
21. HEADINGS.
21.1 Headings stated in this Agreement are for convenience of reference
only and are not intended as a summary of such sections and do not affect,
limit, modify, or construe the contents thereof.
IN WITNESS THEREOF, the parties have executed this Marketing and
Administrative Services Agreement on the date first set forth above.
CAP: Marketer:
EDUCATION LENDING SERVICES, INC. __________________________________
a Delaware corporation
dba "Consolidation Assistance Program"
By:__________________________________ By:_________________________________
-10-