EX-10.17
LICENSE, STAFFING, PURCHASE AND SALE AGREEMENT
BETWEEN
FIRST MORTGAGE NETWORK, INC.
AND
ATLANTA INTERNET BANK, INC.
Dated as of April 1, 1998
THIS LICENSE, STAFFING, PURCHASE AND SALE AGREEMENT (this "Agreement") is made
and entered into as of April 1, 1998 between FIRST MORTGAGE NETWORK, INC., a
Florida corporation having an office at 0000 Xxxxxxx Xxxx., Xxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxx 00000 ("Licensor"), and ATLANTA INTERNET BANK, FSB, a
Federal savings bank having an office located at 000 Xxxxxxxxxx Xxxxxxx, Xxxxx
000, Xxxxxxxxxx, Xxxxxxx 00000 ("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 "American Finance" ("American Finance 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 Appendix A and during the
term of this Agreement (the "License").
1.2 Upon execution of this Agreement, Licensee shall pay to Licensor
a single fee of ** as full compensation to Licensor for its grant
of the License hereunder.
2
** indicates information which has been omitted pursuant to a confidential
treatment request filed separately with the Commission.
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 sixty (60) 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.
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: ** Licensor
shall be entitled to a credit against the Purchase Price in the
amount of ** (i) from and including the date on which the sale
and purchase of such Loan is consummated between Licensee and
Licensor if the Purchase Price is received by Licensee by 12 noon
(prevailing Atlanta, Georgia time) on the date of consummation,
or (ii) after the date on which the sale and purchase of such
Loan is consummated between the Licensee and Licensor if the
Purchase Price is not received by Licensee by 12 noon (prevailing
Atlanta, Georgia, time) on the date of consummation. Licensor
shall also be entitled to a credit against the Purchase Price in
the amount of ** **
3
** indicates information which has been omitted pursuant to a confidential
treatment request filed separately with the Commission.
3.3 In addition to and not in lieu of the Purchase Price for each
Loan, Licensor shall pay Loan Sale Fees to Licensee in accordance
with this Section 3.3. The "Loan Sale Fees" shall include (a) **
per Loan funded by Licensee pursuant to the Processing Agreement,
which amount shall be due and payable from Licensor to Licensee
in immediately available funds simultaneously with the
consummation of each Loan sale from Licensee to Licensor pursuant
to this Agreement, plus (b) the amount, if any, equal to the
difference between ** and the aggregate Loan Sale Fees otherwise
due Licensee for Loans that Licensee funds pursuant to the
Processing Agreement during May 1998, which amount, if any, shall
be due and payable from Licensor to Licensee in immediately
available funds no later than June 5, 1998, plus (c) the amount,
if any, equal to the difference between ** and the aggregate Loan
Sale Fees otherwise due Licensee for Loans that Licensees funds
pursuant to the Processing Agreement during June 1998, which
amount, if any, shall be due and payable from Licensor to
Licensee in immediately available funds no later than July 6,
1998.
3.4 Upon Licensor's delivery of the Purchase Price and Loan Sale
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.
3.5 If Licensor fails to deliver the Purchase Price and Loan Sale
Fee for any Loan within seven (7) calendar days after settlement
and funding of 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
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** indicates information which has been omitted pursuant to a confidential
treatment request filed separately with the Commission.
and any and all Loans subject to such failures by Licensor,
including, without limitation, the following:
(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 Sale 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.
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.
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 "American Finance, a division of
Atlanta Internet Bank, FSB," 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.
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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 (as defined in Section 7 below) or otherwise in writing.
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.
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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 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.
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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. CONFIDENTIAL OPERATING MANUAL
7.1 In order to protect the reputation and goodwill of Licensor
and to maintain high standards of operation under Licensor's
Proprietary Marks, Licensee shall conduct its business in
accordance with the Licensor's operating manual (the "Manual"), a
copy of which will be provided to Licensee concurrently with the
parties' execution of this Agreement.
7.2 Licensee shall at all times treat the Manual, any other
materials created for or approved by Licensor for use in the
operation of the Program, and the information contained therein,
as confidential, and shall use all reasonable efforts to maintain
such information as secret and confidential. Licensee shall not
at any time copy, duplicate, record or otherwise reproduce the
foregoing materials, in whole or in part, nor otherwise make the
same available to any unauthorized person.
7.3 The Licensee's copy of the Manual shall at all times remain
the sole property of Licensor and shall at all times be kept in a
secure place on Licensee's premises.
7.4 Subject to the terms and conditions of Section 5.7, Licensor
may from time to time revise the contents of the Manual, and
Licensee expressly agrees to make corresponding revisions to its
copy of the Manual and to comply with each new or changed
standard.
7.5 Licensee shall at all times maintain the Manual and insure
that the Manual is kept current and up to date; and, in the event
of any dispute as to the contents of the Manual, the terms of the
master copy of the Manual maintained by Licensor at Licensor's
home office shall be controlling.
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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 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.
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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.
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 Licensee's American Finance 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 its American Finance 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 American Finance
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 American Finance Internet Origination
Center.
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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.
9.7 The "Staffing Fee" shall be ** 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 ** per calendar month, provided,
however, that the Facility Fee shall be subject to reduction as
follows:
(1) Facility Fee is reduced to ** per month if loan volume in any
one month is less than ** Loans, but greater than ** Loans;
(2) Facility Fee is reduced to ** per month if loan volume in any
one month is less than ** Loans, but greater than ** Loans;
or
(3) Facility Fee is reduced to ** per loan per month if loan
volume in any one month is less than ** Loans.
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. 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
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** indicates information which has been omitted pursuant to a confidential
treatment request filed separately with the Commission.
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;
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 contents of the Manual or other
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
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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 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 affect 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
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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 xxxx, or representation which
suggests or represents a present or past association or
connection with Licensor, the System, or the Proprietary Marks.
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 the Manual, and all other
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 the
Manual, any records delivered pursuant to Section 11.5, 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.
11.10 Licensor shall have the option, to be exercised within
sixty (60) days after expiration or termination, to purchase from
Licensee any or all of its equipment, signs, supplies, or
inventory of Licensee related to the operation of the System, at
Licensee's cost or fair market value, whichever is less.
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.
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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 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
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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.
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 Florida 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
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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
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,
17
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.
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.
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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 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 Xxxxxx, 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
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such Loans; provided that nothing in this Agreement shall
authorize Licensor to make such commitments in the name of or on
behalf of Licensee.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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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.
ATLANTA INTERNET BANK, FSB FIRST MORTGAGE NETWORK, INC.
LICENSEE LICENSOR
By: /s/ X. X. Xxxxxx By: /s/ Xxxxx X. Xxxxxx
------------------------- ---------------------------
Name: X. X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice Chairman & CEO Title: President
------------------------- ---------------------------
[BANK SEAL] [CORPORATE SEAL]
Address for Notices: Address for Notices:
Atlanta Internet Bank, FSB First Mortgage Network, Inc.
000 Xxxxxxxxxx Xxxxxxx 0000 Xxxxxxx Xxxx.
Xxxxx 000 Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000 Fax: (000) 000-0000
Attn: Xxx Xxxxxxxxx Attn: Xxxx X. Xxxxxxx
APPENDIX A
** indicates information which has been omitted pursuant to a confidential
treatment request filed separately with the Commission.
`
