1
EXHIBIT 10.40
MARKETING AGREEMENT
BY AND BETWEEN
E-LOAN, INC.
AND
PHH MORTGAGE SERVICES CORPORATION
Release Date:
REVISED DATE: 2/4/98
2
MARKETING AGREEMENT
This Marketing Agreement ("Agreement") is entered into as of the 19th
day of January, 1998 ("Effective Date"), between PHH Mortgage Services
Corporation ("PHH"), a New Jersey corporation having an office at ??000 Xxxxxx
Xxx, Xx. Xxxxxx, Xxx Xxxxxx 00000 and E-LOAN, INC., having an office at 000
Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxx, XX 00000 ("E-Loan") (the "Parties").
WHEREAS, PHH 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, E-Loan is a mortgage broker which provides marketing and
access services to mortgage senders via the internet.
WHEREAS, PHH and E-Loan wish to develop a marketing and access program
("Program") the purpose of which will be to market PHH's mortgage services on
the internet.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the Parties hereby agree as follows:
The Program.
(a) E-Loan shall provide access to PHH and market PHH and its
various mortgage programs and products on the internet at
various web sites. The web sites shall include promotional
information about PHH and educational materials to customers
regarding the mortgage process. E-Loan shall be responsible
for developing and maintaining the web sites which shall
enable customers to access information regarding various loan
programs and products, provide comparative product
descriptions, costs and similar information, allow the
customer to prequalify for a mortgage loan, and select the
most suitable loan product under their circumstances.
(b) The Parties contemporaneously have agreed upon additional
details concerning their respective obligations under the
Program, including but not limited to, as applicable, the
frequency, size, number and general content of the web sites
to be advertised. E-Loan shall review and make suggestions to
PHH regarding PHH's advertisements and the most effective
manner in which to promote its programs and products on the
internet. PHH shall have sole discretion in selecting the
marketing materials which are ultimately placed on the web
site.
(c) As part of the Program, E-Loan shall provide monthly reports
to PHH (E-Loan Reports), in form and format reasonably
acceptable to the Parties, that describe, among other things,
the extent to which E-Loan has met its obligations under the
Program.
(d) In addition, PHH shall provide to E-Loan its standard monthly
reporting on registrations, cancellations, closings and
pipeline so that E-Loan may monitor the effectiveness and
quality of the mortgage services provided by PHH.
2
3
Compensation. Beginning January 19, 1998, PHH shall pay a fee to E-Loan
("Semiannual Marketing Fee") for the access and marketing provided
under the Program every six months during the term of this Agreement
(Semiannual term). The amount of the Semiannual Marketing Fee shall be
$100,000 unless adjusted as provided in this Section 2. The Semiannual
Marketing Fee shall be paid in two equal installments. The first
installment of $50,000 shall be paid within 30 days of execution of
this Agreement and the second installment of $50,000 shall be paid
within 10 days of the end of the Semiannual period. The Parties each
acknowledge and agree that the Semiannual Marketing Fee reflects the
reasonable and fair market value of the goods and services to be
provided by E-Loan under the Program, without regard to the value or
volume of mortgage loans that may be attributable to the Program. Not
more frequently than once each six months, either party may notify the
other, in writing, of its determination (Determination), and the bases
therefor, that the Semiannual Marketing Fee amount may fail to reflect
the reasonable and fair market value of the goods and services to be
provided in the E-Loan Reports, and upon other information made
available to the Parties including but not limited to: (i) the number
of web sites maintained by E-Loan; (ii) the number of customers
visiting the web site; (iii) E-Loan's marketing area; (iv) changes
thereto since the prior six month period (collectively, the Data). To
the extent they are reasonably available to it, E-Loan agrees to
provide the Data to PHH as part of its E-Loan Reports. If the other
party agrees with the Determination, the Semiannual Marketing Fee
amount shall be so adjusted, effective upon the commencement of the
next six month term. If there is disagreement, the Parties shall
attempt in good faith to resolve the disagreement. If unable to do so,
the Semiannual Marketing Fee shall not be adjusted in response to that
Determination.
Regulatory Compliance. Each party will comply with all applicable
regulatory requirements of the United States or any state with respect
to its services to be provided under this Agreement. Each party shall
maintain any and all government approvals, licenses or authorizations
required by the laws of the United States or any state to engage in the
activities described in this Agreement.
Relationship. The relationship between PHH and E-Loan shall be that of
independent contractors and neither party shall be or represent itself
to be an agent, employee, partner or joint venturer of the other, nor
shall either party have or represent itself to have any power or
authority to act for, bind or commit the other. PHH shall have sole
discretion and authority with respect to product development,
origination, processing, underwriting and servicing of all mortgage
financing.
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 of the other party which are valuable, special or unique to
the continued business of that party. Accordingly, each party hereby
agrees to hold such information in confidence and to use its best
efforts to ensure that such information is held in confidence by its
officers, directors and employees and to be utilized only in accordance
with the terms of this agreement.
Trademarks. Each party shall grant the other party a license to use
certain of its trademarks during the term of this Agreement. Each party
agrees that nothing herein shall give to the other party any right,
title or interest in the other party's Marks, except to use the Marks
in accordance with the terms of this Agreement and that the PHH Marks
and the E-Loan Marks are the sole and exclusive property of PHH and
E-Loan, respectively.
3
4
Disclaimer. Neither PHH nor E-Loan make any representation or warranty
to the 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.
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.
Term and Termination.
(a) The term of this Agreement shall be for a period of one (1)
year commencing on its Effective Date unless earlier
terminated in accordance with the provisions of this Section
9. Upon expiration of the initial one (1) year term, this
Agreement shall automatically renew from year to year unless
earlier terminated in accordance with the provisions of this
Section 9.
(b) Either party may terminate this Agreement, at any time, with
or without cause by providing sixty (60) days written notice
to the other.
(c) Upon termination of this Agreement, as provided herein: (i)
E-Loan shall refrain from any and all further use of or
reference to materials utilizing PHH; (ii) PHH shall continue
to process, in due course, any mortgage loan applications
submitted by E-Loan's customers prior to termination of this
Agreement; and (iii) PHH shall be obligated to pay any then
due Semiannual Marketing Fee, and (iv) the provisions of
Sections 5 and 10 of this Agreement shall survive.
Hold Harmless.
(a) PHH agrees to indemnify, defend and hold E-Loan harmless from
and against any and all claims, suits, actions, liability,
losses, expenses, or damages which may hereafter arise, which
E-Loan, its affiliates, directors, officers, agents or
employees may sustain due to or arising out of any negligent
act or omission by PHH, its affiliates, officers, agents,
representatives or employees or out of any act by PHH, its
affiliates, officers, agents, representatives or employees in
violation of this Agreement or in violation of any applicable
law or regulation. Provided, however, the above
indemnification shall not provide coverage for (a) any claim,
suit, action, liability, loss, expense or damage that resulted
from an act or omission of E-Loan or (b) the amount by which
any cost, fee, expense or loss associated with any of the
foregoing were increased as a result of an act or omission on
the part of E-Loan.
(b) E-Loan agrees to indemnify, defend and hold PHH harmless from
and against any and all claims, suits, actions, liability,
losses, expenses, or damages which may hereafter arise, which
PHH, its affiliates, directors, officers, agents or employees
may sustain due to or arising out of any negligent act or
omission by E-Loan, its affiliates, officers, agents,
representatives or employees or out of any act by E-Loan, its
affiliates, officers, agents, representatives or employees in
violation of this Agreement or in violation of any applicable
law or regulation. Provided,
4
5
however, the above indemnification shall not provide coverage
for (a) any claim, suit, action, liability, loss, expense or
damage that resulted from an act or omission of PHH or (b) the
amount by which any cost, fee, expense or loss associated with
any of the foregoing were increased as a result of an act or
omission on the part of PHH.
1. 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.
2. Amendment. The terms and conditions of this Agreement may not be
modified or amended other than by a writing signed by both Parties.
3. 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.
4. Entire Agreement. This Agreement and any Exhibits attached hereto
constitute the entire Agreement between the Parties and supersede all
oral or written negotiations of the Parties with respect to the subject
matter hereof.
5. Governing Law. This agreement shall be subject to and construed under
the laws of the State of New Jersey, without reference to conflicts of
law provisions thereof.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed the day and year first above written.
E-LOAN, INC. PHH MORTGAGE SERVICES CORPORATION
Signature: /s/ Signature Illegible Signature: /s/ Signature Illegible
By: XXXX XXXXX By: Xxxxx Xxxxxxxx
---------- --------------
Title: V.P. Sales & Bus Dev. Title: Vice President Marketing
--------------------- ------------------------
5
