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EXHIBIT 10.20
EXECUTION COPY
LICENSE, STAFFING, PURCHASE AND SALE AGREEMENT
BETWEEN
E-LOAN, INC.
AND
NET.B@NK
Dated as of June 1, 1998
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THIS LICENSE, STAFFING, PURCHASE AND SALE AGREEMENT (this "Agreement") is made
and entered into as of June 1, 1998 between E-LOAN, INC., a California
corporation having an office at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
("Licensor"), and NET.B@NK, a Federal savings bank having an office located at
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Licensee").
WHEREAS, Licensor owns a unique and distinctive format and system (the "System")
relating to the establishment and operation of a proprietary single-family
residential mortgage loan origination system utilizing the Internet and
telemarketing call centers (the "Program");
WHEREAS, Licensor identifies the System by means of certain trade names, service
marks, trademarks, logos, emblems and indicia of origin, including but not
limited to the Licensor's name and the marks and logos and such other trade
names, service marks, and trademarks as are now designated (and may hereinafter
be designated by Licensor in writing) for use in connection with the System (the
"Proprietary Marks");
WHEREAS, Licensor continues to develop, use, and control the use of such
Proprietary Marks in order to identify for the public its ownership of the
System, and to represent the System's high standards of quality and service;
WHEREAS, Licensee desires to enter into the business of operating the Program in
order to make single-family residential mortgage loans ("Loans") under
Licensor's System and wishes to obtain a non-exclusive, non-transferable license
(the "License") from Licensor to operate the Program and use the Proprietary
Marks in connection therewith, as well as to receive other assistance to be
provided by Licensor in connection therewith;
WHEREAS, Licensor operates and outsources a telemarketing call center in support
of the operations of financial services companies, including mortgage companies,
and Licensee desires assistance with its staffing, space and equipment needs on
an interim basis as it establishes its Internet and telemarketing call center
under the trade name "E-Loan" ("E-Loan Internet Origination Center").
NOW THEREFORE, the parties, in consideration of the undertakings and commitments
of each party to the other party set forth herein, hereby agree as follows:
1. GRANT AND LICENSE FEE
1.1 Licensor grants Licensee a non-exclusive license to use the
System, including the Program and the Proprietary Marks, solely
in regard to those states indicated in that attached Appendix A
(as may be modified from time to time by mutual written consent
of the parties hereto) and during the term of this Agreement
(the
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"License"). Said Appendix A, including any such modifications,
is incorporated as part of this Agreement.
1.2 Upon execution of this Agreement, Licensee shall pay to Licensor
a one-time fee of One Thousand Dollars and No/100 ($1,000.00) as
full compensation to Licensor for its grant of the License
hereunder.
2. TERM AND RENEWAL
2.1 Except as otherwise provided herein, the term of this Agreement
shall expire one (1) year from the date of this Agreement.
2.2 At its option exercisable by giving written notice to Licensee at
least sixty (60) days prior to the first anniversary of the date
of this Agreement, Licensor may renew this Agreement for one (1)
additional term of one (1) year if Licensor shall have satisfied
all monetary obligations owed by Licensor to Licensee and its
parent, subsidiaries and affiliates under this Agreement and
under any other contract between the parties as of the date of
such notice and as of the date of commencement of the renewal
term.
2.3 At its option exercisable by giving written notice to Licensor at
least sixty (60) days prior to the first anniversary of the date
of this Agreement, Licensee may renew this Agreement for one (1)
additional term of one (1) year if Licensee shall have satisfied
all monetary obligations owed by Licensee to Licensor and its
parent, subsidiaries and affiliates under this Agreement and
under any other contract between the parties as of the date of
such notice and as of the date of commencement of the renewal
term.
2.4 This Agreement may be terminated with or without cause by Licensor or
Licensee upon thirty (30) days' written notice to the other party.
3. FUNDING, PURCHASE AND SALE OF LOANS
3.1 Licensor agrees to purchase from Licensee, and Licensee agrees to
sell to Licensor, in accordance with and subject to the terms and
conditions of this Agreement, all Loans made by Licensee under
the Program and processed, underwritten and closed under the
separate Mortgage Loan Processing Agreement between the parties
dated as of even date herewith (the "Processing Agreement"), with
each Loan purchase and sale to be consummated (by payment of the
Purchase Price for such Loan in accordance with Section 3.2
hereof) within forty-eight (48) hours after Loan settlement and
funding to the greatest extent practicable and in all events
within seven (7) calendar days after Loan settlement and funding.
Such Loans will be sold by Licensee and purchased by Licensor
without recourse and on a servicing-released basis, with Licensor
undertaking servicing of all Loans so purchased by Licensor.
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3.2 The purchase price ("Purchase Price") to be paid by Licensor and
accepted by Licensee for each Loan sold to Licensor pursuant to
Section 3.1 hereof shall be equal to the sum of: (1) the Net
Funding Amount (as defined in Section 1.1.11 of the Processing
Agreement), plus (2) the accrued and unpaid interest (at the
interest rate specified in the Loan note) on the Net Funding
Amount through and including the date on which the purchase and
sale of the Loan is consummated, plus (3) a Loan Administration
Fee (as defined in Section 3.3 hereof) per Loan. The Purchase
Price for each Loan shall be deposited by Licensor in immediately
available funds in an account to be maintained with Licensee in
the name of Licensor (the "Licensor's Account") and shall be
deemed to have been paid to Licensee upon Licensee's drafting the
Licensor's Account for the amount of such Purchase Price. Upon
Licensor's deposit (in accordance with this Section 3.2) of the
Purchase Price applicable to any Loan which Licensor is obligated
to purchase under this Agreement, Licensee (i) shall, at
Licensee's expense, deliver to Licensor any and all documents and
instruments which evidence, secure, or otherwise relate to such
Loan and which are then in Licensee's actual possession, (ii)
shall release in Licensor's favor any and all rights of Licensee
in, to, and under such documents and instruments, and (iii) shall
be entitled to draft the Licensor's Account for the amount of
such Purchase Price, whereupon Licensee shall give Licensor
written notification that Licensee has so drafted the Licensor's
Account.
3.3 As part of the Purchase Price for each Loan, Licensor shall pay
a Loan Administration Fee to Licensee in accordance with this
Section 3.3. The "Loan Administration Fee" shall be $300.00 per
Loan.
3.4 Upon Licensor's delivery of the Purchase Price (including,
without limitation, the Loan Administration Fee) applicable to
any Loan, Licensee (1) shall deliver to Licensor any and all
documents and instruments which evidence, secure, or otherwise
relate to such Loan and which are then in Licensee's actual
possession and (2) shall release in Licensor's favor any and all
rights of Licensee in, to, and under such documents and
instruments; provided that no later than the first business day
following Licensee's receipt of the Purchase Price from Licensor
for any Loan sold by Licensee to Licensor pursuant to this
Agreement, Licensee shall duly endorse the original promissory
note evidencing such Loan and shall deliver same to Licensor.
3.5 If Licensor fails to deliver the Purchase Price (including,
without limitation, the Loan Administration Fee) for any Loan
within seven (7) calendar days after notification by Licensee
that Licensee is in possession of the original promissory note
evidencing such Loan or if Licensor otherwise fails to consummate
the purchase of such Loan in accordance with this Section 3,
Licensee, in its sole discretion, shall be entitled to exercise
any and all rights and remedies, at law or in equity or
otherwise, with respect to any and all such failures by Licensor
and any and all Loans subject to such failures by Licensor,
including, without limitation, the following:
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(1) Licensee shall be entitled to effect the sale of any and
all such Loans to any other person(s) or entity(ies) at
any commercially reasonable price(s) (any such sale being
an Alternative Sale"), with Licensor being obligated to
indemnify Licensee for any and all losses, damages,
liabilities, claims, legal fees, and other expenses
incurred by Licensee as a direct or indirect consequence
of any and all Alternative Sales, including, without
limitation, (i) the Loan Administration Fee which is due
for any such Loan under this Agreement and which has not
been paid to Licensee and (ii) any positive difference
between the Purchase Price due under this Agreement for
any such Loan and the price actually received by Licensee
through the Alternative Sale of such Loan; and
(2) Licensee shall be entitled to specific performance of
Licensor's obligation to purchase any and all such Loans,
together with monetary relief for any and all losses,
damages, liabilities, claims, legal fees, and other
expenses incurred by Licensee as a direct or indirect
consequence of Licensor's breach of this Agreement.
3.6 If Licensor delivers the Purchase Price (including, without
limitation, the Loan Administration Fee) for any Loan within
seven (7) calendar days after notification by Licensee that
Licensee is in possession of the original promissory note
evidencing such Loan, and if Licensee nonetheless fails to
consummate the sale of such Loan in accordance with this Section
3, Licensor, in its sole discretion, shall be entitled to
exercise any and all rights and remedies, at law or in equity or
otherwise, with respect to any and all such failures by Licensee
and any and all Loans subject to such failures by Licensee,
including, without limitation, the remedy of specific performance
of Licensee's obligation to sell any and all such Loans, together
with monetary relief for any and all losses, damages,
liabilities, claims, legal fees, and other expenses incurred by
Licensor as a direct [or indirect] consequence of Licensee's
breach of this Agreement.
3.7 Each party hereto agrees to reimburse the other party hereto (the
"Damaged Party") for up to $1,000.00 per Loan in actual losses
and damages incurred by the Damaged Party as a direct result of
any error, mistake, negligent act or omission, or breach of this
Agreement or the Processing Agreement in the course of the
reimbursing party's performance of its obligations under this
Agreement or the Processing Agreement.
4. DUTIES OF LICENSOR
4.1 Licensor shall provide to Licensee technical and administrative
support, including the service of contract employees and the
rental of requisite space and equipment, as set forth in Section
9 below.
4.2 Licensor shall provide periodic and continuing advisory
assistance to Licensee as to the operation and promotion of the
Program as Licensor deems advisable.
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4.3 Licensor shall market and promote the Program, as set forth in
Section 10 below.
5. DUTIES OF LICENSEE
5.1 Licensee shall operate the Program, under a separate division of
Licensee to be known as "E-Loan, a division of Net.B@nk," or as
otherwise denominated by Licensee after consultation with
Licensor. Such division shall be operated and managed separately
from the mortgage lending operations of Licensee.
5.2 Licensee will prominently use the Proprietary Marks, subject to
specific prior review and approval by Licensor, in all aspects of
the Program and otherwise, including, without limitation, in the
operation of the Program in relation to prospective borrowers.
5.3 Licensee acknowledges the proprietary interest of Licensor in all
information with respect to the System and Program. Licensee
undertakes to comply with its obligations under the Agreement
with respect to all Licensor Confidential Information, as defined
in Section 8.4 below, and at no time to divulge, disclose,
reference, or transfer to any other person such Licensor
Confidential Information, including the identities of customers
and related information or to use the same for any purpose other
than its operations under the License, without the written
consent of Licensor.
5.4 Except as otherwise required by law, all statements of any kind
whatsoever by Licensee with regard to the System and Program
shall identify Licensor as the sole owner and developer the
System and Program. Licensee shall at no time or in any manner
whatsoever claim or represent itself to have any rights or
interest in the development or ownership of the System or
Program, except as explicitly provided by this Agreement.
5.5 Licensee understands and acknowledges that the rights and duties
set forth in this Agreement are solely related to Licensee, and
that Licensor has granted this License in reliance on Licensee's
business skill, financial capacity, and personal character.
Accordingly, Licensee shall not, without prior written consent of
Licensor, transfer, pledge, or in any way encumber either the
rights and obligations of Licensee under this Agreement or any
interest in the System or Program hereunder, except to a
permitted assignee under Section 16.1 hereof.
5.6 Licensee covenants to operate in compliance with the System and
shall use best efforts to maintain the highest degree of quality
and services. Licensee shall operate the Program in strict
conformity with such methods, standards, and specifications as
Licensor may from time to time prescribe in the Manual of
Operation, as mutually agreed in writing.
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5.7 Licensee acknowledges that, subject to Licensor's compliance
with its obligations under this Agreement and subject to
compliance of the System and the Program with all applicable
laws, rules and regulations: (1) Licensor has the full,
exclusive authority over the information presented in the
Program and over all rules and standards included therein; and
(2) in its sole discretion, Licensor may change such content at
any time and from time to time; provided that any material
changes that would affect Licensee's Program operations or
product information will require prior notification of at least
three (3) business days to Licensee.
6. PROPRIETARY MARKS
6.1 Licensor represents and warrants to Licensee that Licensor is the
owner of all right, title, and interest in and to the Proprietary
Marks, free and clear of all liens, encumbrances and claims of
any kind.
6.2 With respect to Licensee's use of the Proprietary Marks
designated by Licensor, Licensee shall use them only in the
manner authorized and permitted by Licensor.
6.3 Licensee shall use the Proprietary Marks designated only for the
operation of the Program licensed hereunder.
6.4 Unless otherwise authorized or required by Licensor, Licensee
shall operate the Program only under the name permitted under
Section 5.1 hereof, without prefix or suffix.
6.5 During the term of this Agreement and renewal thereof, Licensee
shall identify Licensor (in a manner reasonably acceptable to
Licensor) as the owner of the System and Program in conjunction
with any use of the Proprietary Marks.
6.6 Licensee's right to use the Proprietary Marks is limited to such
uses as are designated by Licensor or authorized under this
Agreement, and any unauthorized use thereof shall constitute an
infringement of Licensor's rights if Licensee continues such use
on or after the tenth (10th) calendar day following Licensee's
receipt of written notice from Licensor to cease such
unauthorized use.
6.7 Licensee expressly understands and acknowledges that:
6.7.1 Licensor is the owner of all rights, title and interests
in and to the Proprietary Marks and the goodwill
associated with and symbolized by them.
6.7.2 The Proprietary Marks are valid and serve to identify
the System and Program and those who are authorized to
operate under the System.
6.7.3 Neither Licensee nor any affiliate of Licensee shall
directly or indirectly contest the validity of
Licensor's ownership of the Proprietary Marks, nor
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shall Licensee, directly or indirectly, seek to register
the Proprietary Marks with any government agency, except
with Licensor's express written permission.
6.7.4 Licensee's use of the Proprietary Marks does not give
Licensee any ownership interest or other interest in or
to the Proprietary Marks, except the License granted by
this Agreement.
6.7.5 Any and all goodwill arising from Licensee's use of the
Proprietary Marks shall inure solely and exclusively to
Licensor's benefit, and upon expiration or termination
of this Agreement and the License herein granted, no
monetary amount shall be assigned as attributable to any
goodwill associated with Licensee's use of the System or
the Proprietary Marks.
6.7.6 The right and license to use the Proprietary Marks
granted hereunder to Licensee is non-exclusive, and
Licensor thus has and retains the rights, among others:
to use the Proprietary Marks itself in connection with
selling products and services; to grant other licenses
for the Proprietary Marks; and to develop and establish
other systems using the same or similar Proprietary
Marks, or any other proprietary marks, and to grant
licenses or franchises thereto without providing any
rights therein to Licensee.
6.7.7 Licensor reserves the right to substitute different
proprietary marks for use in identifying the System and
Program and the businesses operating thereunder if
Licensor's currently owned Proprietary Marks no longer
can be used, or if Licensor, in its sole discretion,
determines that substitution of different proprietary
marks is desirable.
6.8 Licensee shall require all signs and other materials and
documentation which may be designated by Licensor to bear the
Proprietary Marks in the form, color, location and manner
prescribed by Licensor.
7. (SECTION INTENTIONALLY DELETED)
8. CONFIDENTIAL INFORMATION
8.1 Licensor retains all rights of ownership and copyright in the
System and Program and Proprietary Marks except as provided for
temporary use by the Licensee under the terms of this Agreement.
8.2 As between Licensor and Licensee, the System and Program,
including its design, structure, operation, programming, output,
content, graphics, and all derivative works thereof (other than
the proprietary logos and graphics of Licensee), are the
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sole and exclusive property of Licensor to be licensed under the
terms of this Agreement for use by Licensee.
8.3 Except for the non-exclusive, non-transferable License to use the
System and operate the Program, Licensee has no, and shall not
acquire any, ownership or other rights or interest in the System
or Program as a result of this Agreement or any business
relationship with the Licensor, unless the parties hereafter
agree to the contrary.
8.4 Licensee understands and acknowledges that the System and Program
contain and embody valuable trade secrets of Licensor. Licensee
shall keep confidential the Program and all other information
provided by Licensor to Licensee or otherwise acquired by
Licensee through the operation of the Program as referred to in
Section 10.1 hereof (collectively, the "Licensor Confidential
Information") and all copies or physical embodiments thereof in
its possession, and shall limit access to the Licensor
Confidential Information to those of its personnel. Licensee
shall not use any part of the Licensor Confidential Information
in any manner other than as expressly permitted under this
Agreement. Licensee shall secure and protect the Licensor
Confidential Information and any and all copies thereof in its
possession through security measures at least as protective as
those used by Licensee to maintain the security of its valuable
confidential and proprietary information. Upon termination of
this Agreement for any reason, Licensee shall upon request return
to Licensor all tangible embodiments of Licensor Confidential
Information in its possession or under its control, or destroy
all such tangible embodiments and certify such destruction in
writing. The obligations provided in this Section 8.4 shall not
apply to any information which (1) is generally known to the
public or in the trade or becomes so generally known without
breach of this Agreement by Licensee; (2) is shown by written
record to have been known to Licensee prior to its disclosure by
Licensor hereunder; (3) is disclosed to Licensee without
restriction of confidentiality by a third party who is not in
breach of an obligation of confidentiality to Licensor in making
such disclosure; or (4) is disclosed by Licensee pursuant to
judicial, administrative, or other legally binding order. The
obligations of this Section 8.4 shall survive any termination of
this Agreement. The parties hereto further acknowledge that they
are bound by that certain Nondisclosure Agreement dated September
9, 1998, as duly executed by the parties hereto.
8.5 Licensee acknowledges that any failure to comply with the
requirements of this Section 8 will cause Licensor irreparable
injury, and Licensee agrees to pay all court costs and
reasonable attorney's fees incurred by Licensor in any
successful action or proceeding to obtain specific performance
of, or an injunction against violation of, the requirements of
this Section 8.
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9. STAFFING, SPACE AND EQUIPMENT
9.1 In order to enable Licensee to utilize the License and make Loans
thereunder, Licensor will provide personnel to Licensee on an "as
needed" basis and in sufficient number to support the
telemarketing functions of the E-Loan Internet Origination Center
(the "Support Work"). Such employees shall be assigned to the
Support Work on a full-time basis (40 hours per week). All
personnel provided for the Support Work shall be selected and
trained by Licensor under standards that are consistent with the
Program and are not less than those used by Licensor for its own
call center operations.
9.2 Each assigned employee is and shall remain an employee of
Licensor and shall not be considered an employee of Licensee.
Although it is the responsibility of Licensee to supervise and
review the Support Work of each Licensor employee, Licensee will
also be entitled to review such Support Work. Any questions or
problems with assigned employees shall be communicated to
Licensor immediately by Licensee. All contact with an assigned
Licensor employee regarding assignment scheduling for Support
Work must be coordinated through Licensor.
9.3 Licensor guarantees satisfaction with each Licensor employee
assigned to Support Work for Licensee. If, for any reason,
Licensee is dissatisfied with any such Licensor employee's
performance, a different Licensor employee will immediately be
assigned to the Support Work.
9.4 Licensor represents and warrants that its employees are
adequately covered by workers' compensation insurance and that
Licensor assumes total responsibility to pay the employees'
salary, all related federal, state, and local payroll taxes and
any other applicable charges required by law, and applicable
employee benefits, such as health insurance, retirement, etc., if
any.
9.5 Licensor agrees to provide all necessary space to Licensee for
the E-Loan Internet Origination Center, as well as the use of
telephone, computer and other equipment on an "as needed" basis
for the operation of Licensee's E-Loan Internet Origination
Center during the term of this Agreement. Licensor and Licensee
will review monthly the space and equipment needs of Licensee.
Licensee is authorized to utilize reasonable signage or other
marks to indicate to the public Licensee's presence in operating
its E-Loan Internet Origination Center.
9.6 As compensation for the staffing, space and equipment provided to
Licensee by Licensor in accordance with this Section 9, Licensee
shall, with respect to each calendar month during the term
hereof, pay Licensor the Staffing Fee and the Facility Fee (as
both are hereinafter defined) due for such calendar month, in
arrears, on or before the seventh (7th) calendar day of the next
succeeding calendar month. All Staffing Fees and Facility Fees
shall be paid in immediately available Funds.
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9.7 The "Staffing Fee" shall be $75.00 per Loan funded by Licensee
pursuant to the Processing Agreement and purchased by Licensor
pursuant to this Agreement.
9.8 The "Facility Fee" shall be: (1) $25.00 per Loan with respect to
the first 100 Loans funded by Licensee pursuant to the Processing
Agreement and purchased by Licensor pursuant to this Agreement
during any calendar month during the term of this Agreement; and
(2) $50.00 per Loan with respect to the 101st and subsequent
Loans so funded and purchased during any calendar month during
the term of this Agreement.
9.9 It is the intent of the parties that all compensation received by
Licensor in the form of Staffing Fees and Facility Fees shall not
exceed the reasonable value of the services rendered or goods or
facilities furnished within the meaning of the Real Estate
Settlement Procedures Act, 12 U.S.C. Section 2601 et seq. as
amended from time to time and the regulations which are
promulgated thereunder.
10. MARKETING AND PROMOTION
10.1 Licensor shall have sole responsibility for the marketing of the
Program on behalf of Licensee, including, without limitation,
television, radio, print, or electronic advertising and other
promotion.
10.2 Licensee shall at no time advertise, promote, or in any manner
whatsoever publish or communicate its role in operation of the
System or Program, without the prior written approval of
Licensor, except as required by law or regulation.
11. DEFAULT, TERMINATION, AND OBLIGATIONS THEREAFTER; ARBITRATION
11.1 If either party or any person holding a controlling interest
(direct or indirect) in Licensee becomes a debtor in proceedings
under the U.S. Bankruptcy Code or any similar law in the United
States or elsewhere, it is the parties' understanding and
agreement that any transfer of the License, or any obligations
and/or rights hereunder, shall be subject to written approval of
the transfer or termination of the Agreement at the sole
discretion of the Licensor.
11.2 Licensee shall be deemed to be in default and Licensor may, at
its option, terminate this Agreement and all rights granted
hereunder, without affording Licensee any opportunity to cure
the default, effective immediately upon the delivery of written
notice to Licensee by Licensor, upon the occurrence of any of
the following events, provided that Licensor shall have remitted
to Licensee, prior to any such termination being effective, any
and all amounts due Licensee from Licensor under this Agreement
as of the date of such termination:
11.2.1 If Licensee at any time ceases to operate or otherwise
abandons use of the System and operation of the Program;
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11.2.2 If Licensee or any senior policy making officer thereof
is convicted of a felony, a crime involving moral
turpitude, or any other crime or offense that is
reasonably likely to have a material adverse effect on
the System, the Proprietary Marks, the goodwill
associated therewith, or Licensor's interest therein;
11.2.3 If Licensee purports to transfer any rights or
obligations under this Agreement or any interest to any
third party in a manner that is contrary to the terms of
this Agreement; or
11.2.4 If, contrary to the terms hereof, Licensee discloses or
divulges the Licensor Confidential Information provided
to Licensee by Licensor without the written approval of
Licensor.
11.3 Subject to the provisions of Section 11.4 hereof, this Agreement
may be terminated by either party during the existence of any of
the following conditions.
11.3.1 If the other party ("Other Party") is the subject of any
of the following: (1) a court having jurisdiction shall
have entered a decree or order constituting an order for
relief in respect of the Other Party under Title 11 of
the United States Code, as now constituted or hereafter
amended, or any other applicable federal or state
bankruptcy law or other similar law, or appointing a
receiver, liquidator, assignee, trustee, custodian,
sequestrator, or similar official of the Other Party or
any substantial part of its properties, or ordering the
winding-up or liquidation of the affairs of the Other
Party, or any petition seeking such relief or
appointment shall have been filed in such a court and
shall not have been dismissed within a period of
forty-five (45) days (2) the Other Party shall have
filed a petition, answer, or consent seeking relief
under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other
applicable federal or state bankruptcy law or other
similar law, or the Other Party shall consent to the
institution of proceedings thereunder or to the filing
of any such petition or to the appointment or taking of
possession of a receiver, liquidator, assignee, trustee,
custodian, sequestrator, or other similar official of
the Other Party or of any substantial part of
properties, or the Other Party shall fail generally to
pay its debts as such debts become due, or the Other
Party shall take any corporate action in furtherance of
any such action; (3) any admission by the Other Party of
its insolvency or inability to pay its debts as they
fall due; or (4) the adjudication of the Other Party as
bankrupt or insolvent;
11.3.2 If the Other Party fails to pay the terminating party
any amount within sixty (60) days after the date on
which such amount was first due the terminating party in
accordance with this Agreement or, if a due date is
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not specified herein or therein, within sixty (60) days
after the Other Party's receipt of an invoice for such
amount.
11.3.3 If the Other Party is in material breach of or material
default under this Agreement.
11.3.4 If the Other Party engages in any dishonest or
fraudulent conduct; or
11.3.5 If it becomes unlawful for the parties hereto to do
business in accordance with this Agreement.
11.4 Upon either party's issuance of proper notice of termination of
this Agreement pursuant to this Section 11 or Section 2.4
hereof:
11.4.1 The parties agree to continue their cooperation in order
to effect an orderly termination of their relationship.
Each party shall immediately cease accepting Loan
applications under the Program, provided, however, that
Licensor shall, at Licensee's option, continue the
Support Work under the terms and conditions of this
Agreement in order to consummate any Loan(s) for which
an application has been received by Licensor or Licensee
on or prior to the date of termination. All compensation
due any party in connection with any such Loan(s) shall
be paid in accordance with this Agreement, and
Licensor's obligation to purchase any such Loan(s) shall
be in full force and effect in accordance with and
subject to the terms and conditions of this Agreement.
11.4.2 Licensee shall comply with Section 11.8 hereof.
11.5 Any controversy arising in conjunction with or relating to this
Agreement, and any amendment hereof, shall be determined and
settled by arbitration in a location mutually agreed upon by the
parties, in accordance with the rules of the American Arbitration
Association. Any arbitration award rendered hereunder shall be
final and binding on each of the parties hereto and their
respective successors and assigns, and judgment may be entered
thereon by any court having jurisdiction. The parties shall
continue their performance under this Agreement while the
arbitration proceeding is pending.
11.6 Licensee agrees, if at any time it operates or begins hereafter
to operate any other similar System or Program, not to use any
reproduction, counterfeit copy, or colorable imitation of the
Proprietary Marks, either in connection with such other System or
Program or the promotion thereof, which is likely to cause
confusion, mistake or deception or which is likely to dilute
Licensor's rights in and to the Proprietary Marks, and further
agrees not to utilize any designation of origin, description,
trademark, service ▇▇▇▇, or representation which suggests or
represents a present or past association or connection with
Licensor, the System, or the Proprietary Marks.
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11.7 Licensee shall pay Licensor all damages, costs, and expenses
(including reasonable attorney's fees) incurred by Licensor,
subsequent to the termination of this Agreement pursuant to
Section 11.2 hereof, in any successful action or proceeding to
obtain injunctive or other relief for the enforcement of any
provisions of this Section 11.
11.8 Licensee shall immediately upon expiration or termination of this
Agreement deliver to Licensor all manuals, records, and
instructions containing Licensor Confidential Information
(including without limitation any copies thereof, even if such
copies were made in violation of this Agreement), all of which
are acknowledged to be the property of Licensor.
11.9 Licensor shall provide such access to any copies of records
delivered pursuant to Section 11.8, or any reports prepared by
Licensee hereunder for any federal or state regulator asserting
authority over the activities of Licensee as shall be required by
law or regulation or as shall be requested in writing by
Licensee.
12. INDEPENDENT CONTRACTOR AND INDEMNIFICATION
12.1 It is understood and agreed by the parties that: (1) neither this
Agreement nor the Processing Agreement creates a fiduciary
relationship between them; (2) Licensee shall be an independent
contractor in its use of the License; (3) Licensor shall be an
independent contractor in performing its obligations under
Section 9 hereof; and (4) nothing in this Agreement or the
Processing Agreement is intended to constitute either party an
agent, legal representative, subsidiary, joint venturer, partner,
employee, or servant of the other for any purpose whatsoever.
12.2 It is understood and agreed that nothing in this Agreement
authorizes either party to make any contract, agreement,
warranty, or representation on the other party's behalf, or to
incur any debt or other obligation in the other party's name; and
that the other party shall in no event assume liability for, or
be deemed liable hereunder as a result of, any such action.
12.3 Licensor shall indemnify and hold Licensee harmless from and
against any and all losses, damages, costs, expenses,
liabilities, obligations and claims of any kind (collectively,
"Liabilities"), and agrees to promptly defend Licensee from, and
reimburse Licensee for, all such Liabilities, including, without
limitation, reasonable attorney's fees, arising or resulting
from: (1) any challenge by another person to any patent,
trademark or intellectual property interest used by Licensee
under this Agreement; or (2) Licensor's negligence or wrongdoing
in any related proceeding; or (3) any failure of the System, the
Program or Licensor to comply, and to cause all Loans to be in
compliance, with any applicable Federal or state law, rule or
regulation (including without limitation the Consumer Credit
Protection Act, the Fair Credit Reporting Act, the Real Estate
Settlement Procedures Act, the Federal Trade Commission Act, and
state statutes purporting
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to regulate or license the origination of or terms and
conditions of Loans generated by the Program); (4) any challenge
to Licensee's authority to use the System and operate the
Program; (5) any breach of Licensor's representations and
warranties under this Agreement; or (6) any and all claims by
borrowers relating to any matters referenced under foregoing
clauses (1) through (5), inclusive. This Section 12.3 shall
survive the expiration or termination of this Agreement.
12.4 Licensee shall indemnify and hold Licensor harmless against any
and all claims arising directly from or as a result of: (1)
Licensee's use of the System and operation of the Program (as
well as the costs, including reasonable attorney's fees, of
defending against them) in violation of this Agreement; or (2)
any breach of Licensee's representations and warranties under
this Agreement. This Section 12.4 shall survive the expiration or
termination of this Agreement.
13. APPROVALS AND WAIVERS
13.1 No delay, waiver, omission, or forbearance on the part of either
party to exercise any right, option, duty, or power arising out
of any breach or default by the other party under any of the
terms, provisions, covenants, or conditions hereof, shall
constitute a waiver by such first party to enforce any such
right, option, duty or power against the other party, or as to
subsequent breach or default by the other party.
14. SEVERABILITY AND CONSTRUCTION
14.1 Each portion, section, part, term, and/or provision of this
Agreement shall be considered severable; and if, for any reason,
any section, part, term, and/or provision herein is determined to
be invalid and contrary to, or in conflict with, any existing or
future law or regulation by a court or agency asserting
jurisdiction, such shall not impair the operation of, or have any
other effect upon, such other portions, sections, parts, and/or
provisions of this Agreement as may remain otherwise
intelligible; and the latter shall continue to be given full
force and effect and bind the parties hereto; and said invalid
portions, sections, parts, terms and/or provisions shall be
deemed not to be part of this Agreement.
14.2 All captions in this Agreement are intended solely for the
convenience of the parties, and shall not be deemed to affect the
meaning or construction of any provision hereof.
14.3 All provisions of this Agreement which, by their terms or
intent, are designed to survive the expiration or termination of
this Agreement, shall so survive the expiration and/or
termination of the this Agreement. Without limiting the
immediately preceding sentence, all warranties and indemnities
by either party under this Agreement shall survive the
expiration or termination of this Agreement.
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14.4 No right or remedy conferred upon or reserved to Licensor or
Licensee by this Agreement is intended to be, nor shall be
deemed, exclusive of any other right.
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LICENSOR AND LICENSEE.
15.1 Licensor hereby represents, warrants and covenants to Licensee
as follows:
15.1.1 Licensor is a corporation duly organized, validly
existing, and in good standing under the laws of the
State of California and that it has all requisite
corporate power and authority necessary to make and
perform its obligations under this Agreement. The
execution and delivery of this Agreement and all
documents, instruments and agreements required to be
executed by Licensor pursuant hereto, and the
consummation of the transactions contemplated hereby,
have each been duly and validly authorized by all
necessary action of Licensor. This Agreement constitutes
a valid, legal and binding agreement of Licensor
enforceable by Licensee in accordance with its terms,
subject to bankruptcy, insolvency, reorganization,
receivership or other laws affecting rights of creditors
generally and subject to general equity principles.
15.1.2 Licensor is qualified to do business in all states and
in any other jurisdiction in which such qualification is
required or where Licensor maintains an office or does
substantial business.
15.1.3 The execution, delivery and performance of this
Agreement by Licensor, its compliance with the terms
hereof and consummation of the transactions contemplated
hereby will not violate, conflict with, result in a
breach of, give to any right of termination,
cancellation or acceleration under, constitute a default
under, be prohibited by or require any additional
approval under: (1) Licensor's charter, by-laws, or
other organizational documents, or any other material
instrument or agreement to which Licensor is a party or
by which Licensor is bound or which affects this
Agreement, or (2) any and all laws, orders, injunctions
or decrees applicable to Licensor.
15.1.4 Licensor possesses and will maintain at all times while
this Agreement is in effect any and all necessary
licenses and permits required by any and all laws
necessary to conduct the business contemplated by the
terms of this Agreement. Licensee's obligations under
this Agreement and the Processing Agreement do not
require Licensee to obtain or maintain any such state or
local licenses or permits.
15.1.5 Neither Licensor nor its agents know of, or with the
exercise of reasonable diligence, would know of any
suit, action, arbitration or legal or administrative or
other proceeding pending or threatened against Licensor
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which would affect is ability to perform its obligations
under this Agreement.
15.2 Licensee hereby represents, warrants and covenants to Licensor
as follows:
15.2.1 Licensee is a federal savings bank duly chartered,
validly existing, and in good standing under the laws of
the United States and that it has all requisite
corporate power and authority necessary to make and
perform this Agreement. The execution and delivery of
this Agreement and all documents, instruments and
agreements required to be executed by Licensee pursuant
hereto, and the consummation of the transactions
contemplated hereby, have each been duly and validly
authorized by all necessary action of Licensee. This
Agreement constitutes a valid, legal and binding
agreement of Licensee enforceable by Licensor in
accordance with its terms, subject to bankruptcy,
insolvency, reorganization, receivership or other laws
affecting rights of creditors generally and subject to
general equity principles.
15.2.2 Subject to Licensor's full compliance with Licensor's
representations and warranties under this Agreement:
(1) The execution, delivery and performance of this
Agreement by Licensee, its compliance with the
terms hereof and consummation of the
transactions contemplated hereby will not
violate, conflict with, result in a breach of,
give rise to any right of termination,
cancellation or acceleration under, constitute a
default under, be prohibited by or require any
additional approval under: (i) Licensee's
charter, by-laws, or other organizational
documents, or any other material instrument or
agreement to which Licensee is a party or by
which Licensee is bound or which affects this
Agreement, or (ii) any and all laws, orders,
injunctions or decrees applicable to Licensee.
(2) Licensee possesses and will maintain its federal
savings bank charter at all times while this
Agreement is in effect.
(3) Neither Licensee nor its agents know of, or with
the exercise of reasonable diligence, would know
of any suit, action, arbitration or legal or
administrative or other proceeding pending or
threatened against Licensee which would affect
its ability to perform its obligations under
this Agreement.
15.2.3 Each party agrees that it will not use the trademarks,
service marks, logo, name or any other proprietary
descriptions of the other party or the other party's
parent or affiliates, whether registered or
unregistered, without the other party's prior written
consent.
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15.2.4 Each party agrees to notify the other as soon as
practicable of any formal request by a governmental
agency to examine records pertaining to the other party
or its customers, if the party being subjected to such
examination is permitted to so notify the other party.
Each party agrees that the other party is authorized to
fully cooperate with any such examination, and that such
cooperation will not constitute a breach of this
Agreement, including, without limitation, a breach of
the confidentiality provisions in Section 10.13 hereof.
16. MISCELLANEOUS.
16.1 This Agreement may not be assigned, in whole or in part, by any
party hereto without the prior written consent of the other party,
except to: (1) a parent company or wholly owned subsidiary of the
assigning party, (2) a person or entity that purchases in excess
of fifty percent (50%) of either party's voting stock, or (3) any
entity which purchases substantially all assets of the assigning
party. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
permitted assigns.
16.2 All notices required to be given hereunder will be considered
delivered when placed in the United States Mail, certified mail,
return receipt requested, properly addressed, or when delivered by
courier, to the parties at their respective addresses as set forth
on the signature page of this Agreement; provided that a party may
change its address for notices hereunder by giving the other party
written notice of such change.
16.3 This Agreement constitutes the entire agreement of the parties and
supersedes all prior understandings, whether written or oral,
between the parties thereto. This Agreement will not be modified
except by written instrument duly executed by Licensor and
Licensee. Any approvals or consents required by either party by
the terms of this Agreement shall not be unreasonably withheld.
Notwithstanding the above, in the event either party expressly
waives a default or breach of the other party, this waiver will
not be considered a waiver of a later default or breach of the
same or any other provision of this Agreement. If either party
fails to object or take affirmative action with respect to any
conduct of the other party which is in violation of the terms of
this Agreement, this failure shall not be construed as a waiver of
such terms between the parties hereto.
16.4 This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same agreement.
16.5 Neither party shall be liable to the other party for any loss or
damage due to delays or failure to perform resulting from an event
of "Force Majeure," which shall mean and include: an act of God;
accident; war; fire; lockout; strike or labor dispute; riot
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or civil commotion; act of public enemy; enactment, rule, order
or act of civil or military authority; acts or omissions of the
other party; judicial action; inability to secure adequate
materials, labor, or facilities; the inability of carriers to
make scheduled deliveries; or any other event beyond the
reasonable control of such party. Notwithstanding the foregoing,
Force Majeure shall not excuse either party from making payments
when due.
16.6 This Agreement shall be construed fairly as to both parties and
not in favor of or against either party, regardless of which party
prepared this Agreement.
16.7 This Agreement will be interpreted and construed in accordance
with, and will be governed by, the laws of the State of Georgia.
The parties hereto irrevocably submit themselves to the
jurisdiction of the courts of the State of Georgia. Any suit or
action arising out of this Agreement may be brought in the court
of competent jurisdiction in the County of ▇▇▇▇▇▇, State of
Georgia. Service of process may be made, in addition to any other
method permitted by law, by certified mail, return receipt
requested, sent to the applicable address set forth herein.
16.8 Notwithstanding anything to the contrary in this Agreement,
Licensee may enter into any agreement with third parties for
similar services or otherwise directly offer, originate or make
mortgage loans in any states.
16.9 In the event Licensor makes secondary market commitments in the
name of Licensee to sell Loans on behalf of Licensee and pursuant
to this Agreement, Licensor agrees to sell and deliver such Loans
in accordance with the secondary market commitments made in the
name of and on behalf of Licensee with respect to such Loans;
provided that nothing in this Agreement shall authorize Licensor
to make such commitments in the name of or on behalf of Licensee.
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IN WITNESS WHEREOF, the parties hereto have duly executed, sealed and delivered
this Agreement in duplicate on the day and year first above written.
NET.B@NK E-LOAN, INC.
LICENSEE LICENSOR
By: /s/ illegible By: /s/ ▇▇▇▇ ▇▇▇▇▇
----------------------------- ------------------------------
Name: Illegible Name: ▇▇▇▇ ▇▇▇▇▇
--------------------------- ----------------------------
Title: President Title: VP
-------------------------- ---------------------------
[BANK SEAL] [CORPORATE SEAL]
Address for Notices:
NET.B@NK E-LOAN, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇ Attn: ▇▇▇▇ ▇▇▇▇▇
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APPENDIX A
List of Applicable States