AMENDMENT NUMBER ONE TO SUBPRIME AGREEMENT
FOR DISTRIBUTION, MARKETING, FACILITIES, AND SERVICES
This AMENDMENT NUMBER ONE TO SUBPRIME AGREEMENT FOR DISTRIBUTION,
MARKETING, FACILITIES, AND SERVICES (the "Amendment") is entered into as of July
____, 1999 ("Effective Date"), between INTUIT LENDER SERVICES, INC., a Delaware
corporation, with its principal place of business at 0000 Xxxxxx Xxxxxx,
Xxxxxxxx Xxxx, XX 00000 ("ILSI"), and XXXXXXXX.XXX, INC. (f/k/a FIRST MORTGAGE
NETWORK, INC. or FMN), a Florida corporation, with its principal place of
business at 0000 Xxxxxxx Xxxx, Xxxxxxxxxx, XX, 00000 ("MDC").
ILSI and MDC are hereinafter referred to as the "Parties."
WITNESSETH:
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WHEREAS, the Parties entered into a SUBPRIME AGREEMENT FOR
DISTRIBUTION, MARKETING, FACILITIES, AND SERVICES (the "Agreement") as of May
26, 1999 and desire to amend the Agreement as more particularly set forth
herein.
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
1. All capitalized terms used herein that are not otherwise defined herein shall
have the respective meanings ascribed to them in the Agreement.
2. Section 3.3 is deleted and the following replacement section shall be
inserted in its place:
3.3 Conversion Ratios for Subprime Loans. The following minimum
performance standards shall apply to MDC's conversion of Subprime Loans from the
indicated stage or category, to a closed and funded loan.
(i) Inquiry Stage: **.
(ii) Prequalification Stage: **.
(iii) Application Stage: **.
(a) The parties agree that ILSI will not provide pricing for Subprime
Loans online for five (5) months from the Commencement Date (or such earlier or
later date as the parties subsequently agree in writing). Therefore, all loans
closed and funded during that period will be deemed to be Inquiry Stage loans.
(b) If, MDC does not achieve the conversion ratios set forth above for
three (3) consecutive months (based upon a blended average of the categories),
then, upon notice from ILSI, MDC shall have ninety (90) days to cure the
shortfall in conversions. If MDC fails to cure such shortfall during the cure
period, ILSI shall have the right to terminate this Agreement in accordance with
Article VIII.
4. Paragraph 4.2 is deleted and restated in its entirety as follows:
4.2 Signing and Exclusivity Fee. MDC shall pay ILSI a nonrefundable fee
of ** on August 10, 1999, provided that ILSI has begun offering
Subprime Loans on
** indicates information which has been omitted pursuant to a confidential
treatment request filed separately with the Commission.
the Website on or before that date. Furthermore, MDC shall pay ILSI a
non-refundable exclusivity fee in the aggregate amount of **,
payable in three equal installments on the first day of each Contract
Year for the first three Contract Years. Thereafter, MDC shall pay ILSI
a non-refundable exclusivity fee in the amount of ** for each
successive Contract Year on the first day of each such year. The
Signing and Exclusivity Fee shall be prorated in the event of
termination of this Agreement by ILSI prior to the expiration of the
Initial Term or any successive Contract Year and any amount due MDC
shall be paid within thirty days of the termination date.
5. Paragraph 8.2 of the Agreement is deleted and the following replacement
section shall be inserted in its place:
8.2 Termination. This Agreement may be terminated by written notice by
either party prior to the end of the Term due to one of the following
Events of Default, after giving the defaulting party the applicable
notice and opportunity to cure set forth below:
(a) Termination for Breach. If a party breaches a material term or
condition of this Agreement, the non-defaulting party must give the
defaulting party written notice of the breach. If the breach is of a
monetary nature, the defaulting party will have five (5) business days
to cure the default. Otherwise, the defaulting party will have thirty
(30) days to cure the default. The non-defaulting party may terminate
this Agreement at the expiration of the applicable cure period if the
breach is not cured within the given cure period.
(b) Change in Control. If MDC merges with, or is acquired by, a third
party, and, in the reasonable opinion of ILSI, such change in control
materially adversely affects MDC's ability to perform under this
Agreement, then ILSI may terminate this Agreement after giving three
(3), months' prior written notice. This provision shall specifically
exclude mergers in which MDC is the surviving entity.
(c) Change in Financial Condition. If MDC undergoes a material change
in financial condition such that it is unable to meet its obligations
under this Agreement, ILSI may terminate this Agreement if, after
giving MDC written notice and a 15-day opportunity to cure, MDC's
financial condition has not been restored to the extent that it can
perform its obligations hereunder; provided however, that if the
adverse change in MDC's financial condition results in MDC's failure to
fund loans as and when scheduled for three (3) consecutive days, ILSI
may thereafter immediately terminate this Agreement and at its option,
seek alternative funding for the affected loans.
(d) Termination for Failure of Performance in Achieving Conversion. If
MDC does not meet minimum requirements for converting Subprime Loans as
set forth in Section 3.3, ILSI shall notify MDC in writing. Thereafter,
MDC shall have ninety (90) days after notice to cure such shortfall. If
MDC has failed to cure the shortfall during the ninety (90) day cure
period, then ILSI may terminate this Agreement after six (6) months
prior written notice to MDC.
(e) Termination For Insufficient Volume. If ILSI does not achieve at
least ** of the minimum number of Submissions of
Subprime Loans to MDC as described in Section 3.2 for three (3)
consecutive months, MDC shall notify ILSI in
** indicates information which has been omitted pursuant to a confidential
treatment request filed separately with the Commission.
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writing of the shortfall. Thereafter, ILSI shall have ** days
after notice to cure the shortfall. If ILSI fails to cure the shortfall
during the ** cure period, and for six (6) consecutive months
thereafter, then MDC may terminate this Agreement after giving six (6)
months prior written notice to ILSI.
(f) Bankruptcy. In the event of the occurrence of any of the following
events, the non-defaulting party may terminate this Agreement
immediately upon giving prior written notice to the defaulting party:
(i) the commencement of any bankruptcy, insolvency,
reorganization, dissolution, liquidation of debt, receivership or
conservatorship proceeding or other similar proceeding under federal or
state bankruptcy, debtors relief, bank regulatory or other law by or
against either party; or
(ii) the appointment of a receiver, conservator, trustee or
similar officer to take charge of, a substantial part of the property
of either party.
(g) Termination Without Cause.
(i) By ILSI. At any time during the Term commencing three (3)
months from the date of this Amendment Number One, ILSI will have the
right, with or without cause, to terminate this Agreement upon nine (9)
months prior written notice to MDC. In such event MDC will have no
other remedies, and ILSI will have no other obligations, under this
Agreement following the effective date of such termination; provided,
however, that during such nine (9) month notice period, MDC shall
continue to process, underwrite and close Subprime Loans in accordance
with the performance criteria established in this Amendment Number One
even if such closings extend beyond the termination date.
(ii) By MDC. At any time during the Term, MDC shall have the
right, with or without cause, to terminate this Agreement upon twelve
months (12) months prior written notice to ILSI. In such event ILSI
will have no other remedies, and MDC will have no other obligations
under this Agreement following the effective date of such termination;
provided, however, that during such twelve (12) month notice period,
ILSI will continue to perform its obligations under the Agreement, and
MDC shall continue to process, underwrite and close Subprime Loans in
accordance with the performance criteria established in this Amendment
Number One even if such closings extend beyond the termination date.
(h) Termination With or Without Cause. If either party terminates this
Agreement with or without cause in accordance with the provisions of
this Agreement, both parties shall be immediately relieved of any
exclusivity restrictions imposed upon them by this Agreement. In the
event of termination with or without cause, the Guaranteed Submissions
obligation of ILSI established under Section 3.2 of the Agreement shall
be reduced by a steady rate over the period between the date of the
notice of termination and the date of termination such that the number
of ILSI Submissions is obligated to transmit to MDC for funding and
processing is reduced by one-ninth (1/9) each month. (e.g., 1/9th
reduction for the first
** indicates information which has been omitted pursuant to a confidential
treatment request filed separately with the Commission.
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month, 2/9ths reduction for the second month, etc.) In the event that
this agreement is terminated by MDC then the same incremental reduction
in ILSI's obligation to transmit loans to MDC shall apply except that
the reductions shall be ovet 12 months rather than nine.
(i) Non-exclusive Remedy. The exercise by either party of any remedy
under this Agreement will be without prejudice to its other remedies
under this Agreement or otherwise.
6. Except as specifically set forth in this Amendment, all terms and conditions
of the Agreement shall remain in full force and effect. All references to the
Agreement after the date hereof shall automatically be deemed to include this
Amendment, and, accordingly, without limiting the generality of this sentence,
it is understood and agreed that the defined term "Agreement" includes,
collectively, the Agreement and this Amendment. In the event of any conflict
between the terms of this Amendment and the terms of the Agreement, the terms of
the Agreement shall control.
7. This Amendment may be executed in one or more counterparts, each of which
shall be deemed an original.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
signed and delivered by its duly authorized officer as of the date first written
above.
INTUIT LENDER SERVICES, INC. XXXXXXXX.XXX, INC.
By________________________________ By_______________________________
Name_____________________________ Name_____________________________
Title_______________________________ Title______________________________
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