MORTGAGE LOAN PROCESSING AGREEMENT
THIS AGREEMENT (the "Agreement") is made as of the 1st day of April,
1998 by and between FIRST MORTGAGE NETWORK, INC. ("PROCESSOR"), a Florida
corporation having an office at 0000 Xxxxxxx Xxxx., Xxxxx Xxxxx, Xxxxxxxxxx, XX
00000, Attention: Xxxx X. Xxxxxxx, and ATLANTA INTERNET BANK, FSB ("LENDER"), a
Federal savings bank having an office located at 000 Xxxxxxxxxx Xxxxxxx, Xxxxx
000, Xxxxxxxxxx, Xxxxxxx 00000, Attention: Xxx Xxxxxxxxx.
RECITALS
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PROCESSOR operates a program that is characterized by borrower
convenience features such as direct on-line Internet access, a 24-hour toll-free
interest rate hotline, toll-free telephone access, speed of commitment, and
nationwide availability. PROCESSOR will establish a loan processing service
bureau (the "Loan Processing Program") to allow LENDER to offer residential
mortgage products in certain states through its Internet and telemarketing call
center facilities operated by LENDER under the trade name "American Finance"
("American Finance Internet Origination Center") pursuant to a separate License,
Staffing, Purchase and Sale Agreement between the parties, dated as of even date
herewith (the "License Agreement").
In consideration of the above recitals, the terms and covenants of this
Agreement, and other valuable consideration, the receipt and sufficiency of
which are acknowledged, the parties agree as follows:
AGREEMENT
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1. Loan Processing Program.
1.1 Duties of PROCESSOR. PROCESSOR will perform the following loan
processing and underwriting services on behalf of LENDER in connection
with all loans originated through LENDER's American Finance Internet
Origination Center with respect to certain states as identified in
Appendix A.
1.1.1 PROCESSOR will provide information on loan products and interest rate
pricing information to LENDER, to be updated each business day.
1.1.2 PROCESSOR will provide support and counseling services to assist with
the completion of loan applications and will receive loan applications
transmitted by LENDER or LENDER's customers by electronic mail or other
means. PROCESSOR will handle all aspects of loan processing and
underwriting, including verification of borrower information, loan
approval, closing, shipping and post-closing. PROCESSOR will underwrite
the loans in conformity with underwriting standards adopted by the
LENDER. All loans made under the Loan Processing Program will be closed
in the name of the LENDER and be funded by LENDER. PROCESSOR will issue
instructions to LENDER for funding and will supervise the closing of
loans.
1.1.3 PROCESSOR will make all disclosures required by federal or state law to
loan applicants, including disclosures required by the Real Estate
Settlement Procedures Act, Truth in Lending Act, and Equal Credit
Opportunity Act. PROCESSOR warrants that it will issue all disclosures
within the applicable legal time period.
1.1.4 Pursuant to the License Agreement, the PROCESSOR shall purchase, on a
non-recourse basis, all loans closed and funded by LENDER under the
Loan Processing Program.
1.1.5 PROCESSOR will assist LENDER in compiling information required by
federal or state regulatory agencies, including information required by
LENDER for compliance with the Home Mortgage Disclosure Act and
Community Reinvestment Act.
1.1.6 PROCESSOR will provide LENDER with status reports of the Loan
Processing Program upon demand of LENDER, which reports will include
information on Program usage and comments by users.
1.1.7 PROCESSOR will respond promptly and professionally to questions,
comments, complaints and other reasonable requests regarding loans from
LENDER's customers or on request by LENDER and shall cooperate and
assist in promptly answering same.
1.1.8 PROCESSOR shall promptly provide copies to LENDER of all written
correspondence related to the Loan Processing Program or any loan
originated thereunder which could reasonably lead to a claim or demand
against LENDER and/or its affiliates by any third party or any
liability of LENDER and/or its affiliates to a third party.
1.1.9 At its sole discretion, PROCESSOR shall use commercially reasonable
efforts to market the Loan Processing Program and shall, at a minimum,
cooperate with and reasonably assist LENDER by supplying material,
advice and information for LENDER's marketing and promotional
activities which relate to the Loan Processing Program.
1.1.10 PROCESSOR hereby represents and warrants to LENDER, and covenants in
favor of LENDER, that all loans originated on LENDER's behalf pursuant
to this Agreement and the License Agreement will be underwritten,
processed, originated, and closed (i) in conformity with all conditions
and requirements necessary for sale of such loans in the secondary
market for single-family residential mortgage loans and (ii) in
compliance with all applicable federal, state and local laws, rules and
regulations, including, without limitation, the Real Estate Settlement
Procedures Act, Truth in Lending Act, Flood Disaster Protection Act,
Equal Credit Opportunity Act, applicable usury limitations, and
applicable lending laws (all conditions, requirements, laws, rules and
regulations referenced in clauses (i) and (ii) of this Section 1.1.10
being herein collectively referred to as the "Applicable
Requirements"). PROCESSOR further represents and warrants to LENDER,
and covenants in favor of LENDER, that PROCESSOR (and its agents and
employees performing work pursuant to this Agreement and the License
Agreement) have such familiarity and experience with the Applicable
Requirements as is necessary to
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ensure the accuracy of the foregoing representation and warranty under
this Section 1.1.10 and the fulfillment of the foregoing covenant under
this Section 1.1.10.
1.1.11 No later than 4:00pm (prevailing Atlanta, Georgia time) on the business
day immediately preceding the business day on which funding for any
loan will be due from LENDER in accordance with Section 1.2.7 hereof,
PROCESSOR shall deliver to LENDER true, correct and complete copies of
(1) a nationally recognized title insurance company's insured closing
letter covering the applicable closing attorney with respect to such
loan, (2) the pertinent borrower's loan application, and (3) the
PROCESSOR's "Net Check Letter to Escrow Agent" (including, without
limitation, itemization of settlement fees) with respect to such loan,
and (4) wiring instructions. Within three (3) business days after
closing of each loan pursuant to this Agreement and the License
Agreement, PROCESSOR shall cause delivery to LENDER (i) the fully
executed original promissory note evidencing such loan, LENDER agrees
to notify PROCESSOR of receipt of such note, and (ii) a true, correct
and complete copy of the security instrument (i.e., mortgage, deed of
trust, or deed to secure debt) securing such loan. Each loan funded by
LENDER pursuant to this Agreement shall be the sole and exclusive
property of LENDER until such loan is duly sold by LENDER. So long as
any such loan is the property of LENDER: (a) all documents evidencing,
securing, or otherwise relating to such loan shall likewise be the sole
and exclusive property of LENDER and shall specify LENDER as sole
holder of such loan; and (b) any such documents remaining in the
possession of PROCESSOR or its closing attorney or other agent shall be
deemed to be held by PROCESSOR as custodian for LENDER, with PROCESSOR
hereby being charged with all reasonable due care in safeguarding such
documents on behalf of LENDER and hereby being authorized to take only
those actions (with respect to such documents) which LENDER hereafter
authorizes in writing.
1.2 Duties of LENDER.
LENDER will use the Loan Processing Program as its exclusive mortgage
lending program for loans originated by it through its American Finance
Internet Origination Center with respect to those states identified in
Appendix A. In connection with the Loan Processing Program, LENDER will
perform the following functions:
1.2.1 LENDER will use its best efforts to market, promote and advertise the
availability of residential mortgage loans, pursuant to LENDER's
marketing plan and budget.
1.2.2 LENDER will originate and deliver to PROCESSOR applications for
mortgage loans in accordance with all applicable mortgage loan
specifications and guidelines agreed upon by LENDER and PROCESSOR.
1.2.3 LENDER will transmit to PROCESSOR, by electronic mail or other means,
any mortgage loan application received from its customers by LENDER
through the American Finance Internet Origination Center with respect
to the states identified in Appendix A. The complete application
packages must be transmitted to and received by PROCESSOR for
processing within 24 hours of receipt.
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1.2.4 Underwriting standards utilized by LENDER will be in conformity with
applicable law and guidelines of secondary market investors, including
the Federal National Mortgage Association, Federal Home Loan Mortgage
Corporation, and the Government National Mortgage Association, and/or
the guidelines of private investors, as applicable.
1.2.5 LENDER will retain ultimate responsibility for underwriting decisions
and will review and approve or deny each loan, including PROCESSOR's
recommended credit and underwriting decisions for each loan. LENDER
shall have the opportunity to provide a "second review" of all denied
or incomplete loan application files.
1.2.6 LENDER will be named as the payee on all loans and all disclosures will
be given to borrowers in the name of the LENDER.
1.2.7 LENDER will fund all loans originated through the Loan Processing
Program, using its own funds or funds obtained through a warehouse line
of credit, which funds shall be disbursed by LENDER to PROCESSOR or its
agent in accordance with funding instructions from PROCESSOR for the
loan closing.
1.2.8 LENDER agrees to sell to PROCESSOR all loans made by LENDER under the
Loan Processing Program under terms and conditions set forth in the
License Agreement. Such loans will be sold on a non-recourse basis.
1.3 Exclusive Agreement. During the term of this Agreement, PROCESSOR will
have the exclusive right to perform the duties outlined above as part
of the Loan Processing Program and LENDER will not enter into any
agreement with third parties for similar services (whether in the
aggregate or singly) with respect to the operation of the American
Finance Internet Origination Center. PROCESSOR retains the right to
offer residential mortgage loans to any customer who applies to
PROCESSOR through another of the PROCESSOR's mortgage loan programs or
through a loan offer made to the public by PROCESSOR. PROCESSOR also
retains the right to offer similar Loan Processing Programs to other
lenders.
LENDER retains the right to offer residential mortgage loans to any
customer who applies to LENDER through another of the LENDER's mortgage
loan programs or through a loan offer made to the public by LENDER.
2. Compensation.
2.1 For its efforts, PROCESSOR will be paid by LENDER all **, including
without limitation, any and all **, and other types of **. Payment will
be made in the form of ** for all loans sold to PROCESSOR by LENDER
under the License Agreement.
** indicates information which has been omitted pursuant to a
confidential treatment request filed separately with the
commission.
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2.2 It is the intent of the parties that all compensation received by
PROCESSOR shall not exceed the reasonable value of the services
rendered 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.
3. Term.
3.1 Except as otherwise provided herein, the term of this Agreement shall
expire one (1) year from the date of this Agreement.
3.2 At its option exercisable by giving written notice to LENDER at least
sixty (60) days prior to the first anniversary of the date of this
Agreement, PROCESSOR may renew this Agreement for one (1) additional
term of (1) year if PROCESSOR shall have satisfied all monetary
obligations owed by PROCESSOR to LENDER and its parent, subsidiaries,
and affiliates under this Agreement and any other contract between the
parties as of the date of such notice and as of the date of
commencement of the renewal term.
3.3 At its option exercisable by giving written notice to PROCESSOR at
least sixty (60) days prior to the first anniversary of the date of
this Agreement, LENDER may renew this Agreement for one (1) additional
term of (1) year if LENDER shall have satisfied all monetary
obligations owed by LENDER to PROCESSOR and its parent, subsidiaries,
and affiliates under this Agreement and any other contract between the
parties as of the date of such notice and as of the date of
commencement of the renewal term.
3.4 This Agreement may be terminated with or without cause by PROCESSOR or
LENDER upon sixty (60) days written notice to the other party.
3.5 In the event this Agreement is terminated by either party, PROCESSOR
will continue to process, underwrite and close any complete application
for a Mortgage Loan that has been received from LENDER as of the date
of notification of termination under the same terms and conditions of
this Agreement. In addition, LENDER shall continue to be obligated
under the same terms and conditions of this Agreement to fund all such
Mortgage Loans and pay for the services provided by PROCESSOR.
4. Legal Fees.
In the event action is taken by either party to enforce the provisions
of this Agreement, whether suit is brought or not, the prevailing party
shall be entitled to reasonable attorney's fees and costs from the
nonprevailing party.
5. Indemnity.
5.1 Each party hereby indemnifies and agrees to hold harmless the other
party against liabilities, damages, costs, charges, legal fees,
judgments, expenses (including attorneys' fees) or any other losses
(collectively, the "Liabilities") incurred as a result of a third
party's use of LENDER's American Finance Internet Origination Center to
the extent
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such Liabilities result from any negligent acts or omissions, bad
faith, or willful misconduct of the indemnifying party or its
employees, agents or affiliates.
5.2 PROCESSOR will indemnify and hold LENDER harmless against, and will at
its own expense defend, any action brought against LENDER to the extent
such action is based upon a breach of this Agreement by PROCESSOR;
provided that PROCESSOR is promptly notified in writing by LENDER of
any such action; and provided, further, that PROCESSOR shall have the
exclusive right to control such defense. In no event shall LENDER
settle any such claim, lawsuit or proceeding without PROCESSOR's prior
written approval.
5.3 LENDER will indemnify and hold PROCESSOR harmless against, and will at
its own expense defend, any action brought against PROCESSOR to the
extent such action is based upon a breach of this Agreement by LENDER;
provided that LENDER is promptly notified in writing by PROCESSOR of
any such action; and provided, further that LENDER shall have the
exclusive right to control such defense. In no event shall PROCESSOR
settle such claim, lawsuit or proceeding without LENDER's prior written
approval.
6. Liability.
UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE FOR INDIRECT,
INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES (SUCH AS, BUT
NOT LIMITED TO, LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST
BUSINESS) ARISING FROM THE USE OR INABILITY TO USE THE AMERICAN FINANCE
INTERNET ORIGINATION CENTER AND THE LOAN PROCESSING PROGRAM OR ARISING
FROM THE USE OF ANY LINKED UP INTERNET SITE (EVEN IF THAT PARTY HAS
BEEN ADVISED OF, OR HAS FORESEEN THE POSSIBILITY OF, SUCH DAMAGES).
7. Miscellaneous.
7.1 PROCESSOR represents that it is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Florida,
and that it has all corporate power necessary to make and perform its
obligations under this Agreement.
7.2 LENDER represents that it 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 corporate power necessary to make and
perform this Agreement^.
7.3 LENDER represents and warrants that it has not entered into any other
agreement, whether written or oral, or engaged in any course of
conduct, that is currently binding or continuing that would prohibit it
from entering into this Agreement.
7.4 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 affiliate(s), whether registered or
unregistered, without the other party's prior written consent.
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7.5 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 ^ paragraph 7.15.
7.6 Nothing in this Agreement or the License Agreement will be deemed to
constitute a partnership, joint venture, employment, affiliated
business arrangement, or agency relationship between the parties.
7.7 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.
7.8 All notices required to be given hereunder shall be made by regular
mail, facsimile or express courier to the addresses as set forth at the
beginning of this Agreement.
7.9 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 executed by PROCESSOR and LENDER. Any approvals
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 the 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 understanding or
representations, between the parties hereto, whether oral or written.
7.10 This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and
the same agreement^.
7.11 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," including without limitation: 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; defaults of
subcontractors or suppliers; the inability of carriers to make
scheduled deliveries; or any other event beyond the reasonable control
of such party. Notwithstanding the foregoing, such Force Majeure shall
not excuse either party from making payments when due.
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7.12 The invalidity, in whole or in part, of any term of this Agreement does
not affect the validity of the remainder of the Agreement.
7.13 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.
7.14 The parties acknowledge and agree that the Loan Processing Program is
not intended to permit the access or transmission of LENDER's customer
names, screen names, addresses or any information concerning LENDER's
customers ("Customer Information"), other than that required to be
accessed or transmitted in connection with a Mortgage Loan
application.
7.15 The parties agree to maintain the terms and conditions of this
Agreement confidential during the term of this Agreement. In addition,
each party acknowledges that in performing under this Agreement it may
gain access to confidential information belonging to the other party
and its customers, including but not limited to business, financial and
technological information (collectively, "Confidential Information"),
which Confidential Information constitutes and shall constitute
valuable assets and trade secrets. Accordingly, when a party (the
"Receiving Party") receives Confidential Information from another party
(the "Owning Party"), the Receiving Party shall, both during the term
of this Agreement and following the termination thereof, (i) keep
secret and retain in strict confidence any Confidential Information
received from the Owning Party, (ii) not disclose to any third party
any Confidential Information received from the Owning Party for any
reason whatsoever, (iii) not disclose any Confidential Information
received from the Owning Party to the Receiving Party's employees,
except on a need-to-know basis, and (iv) not make use of any
Confidential Information received from the Owning Party for its own
purposes or for the benefit of any third party except as authorized by
this Agreement. Notwithstanding the foregoing, the parties' duty
regarding Confidential Information shall not apply when disclosure is
made pursuant to (i) any state or federal law or regulation, or (ii)
the order of any state or federal court or agency, provided the party
disclosing such Confidential Information provides prior written notice,
wherever practicable, to the other party.
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IN WITNESS WHEREOF, the parties have executed this Agreement under seal
as of the date and year first set forth above.
FIRST MORTGAGE NETWORK, INC.
By: _____________________________________
Name: ___________________________________
Title: __________________________________
[CORPORATE SEAL]
ATLANTA INTERNET BANK, FSB
By: /s/ X. X. Xxxxxx
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Name: X. X. Xxxxxx
--------------------------------------
Title: Vice Chairman & CEO
--------------------------------------
[BANK SEAL]
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Appendix A
**
** indicates information which has been omitted pursuant to a
confidential treatment request filed separately with the
commission.
