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EXHIBIT 10.7
REGIONAL ASSOCIATE AGREEMENT
This Regional Associate Agreement (this "Agreement") is made between
Allied Capital Lending Corporation, a Maryland corporation ("Allied"), and the
person identified in Schedule A hereto (the "RA").
Allied is a diversified financial services firm engaged in, among other
activities, the business of providing financing for commercial borrowers.
Allied desires to be introduced to prospective loan and other investment
opportunities, and the RA desires to submit such opportunities to Allied for
Allied's consideration.
In consideration of the foregoing, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto, intending to be legally and equitably bound, hereby agree
as set forth below.
SECTION 1. TERMS OF ENGAGEMENT.
(a) INTRODUCTION AND ACCEPTANCE OF INVESTMENT OPPORTUNITIES. The RA shall
introduce to Allied any loan or other investment opportunity that the RA
reasonably believes will satisfy Allied's established investment criteria or
designated product line (each such prospective loan or other investment
opportunity, an "Investment Opportunity") by timely delivery to Allied of a
written description of such Investment Opportunity.
(b) RIGHTS OF FIRST REFUSAL. The RA shall use its good faith best efforts
to refer to Allied all Investment Opportunities that the RA reasonably believes
will satisfy Allied's established investment criteria and to assist Allied in
completing the transaction. Within ten (10) business days after receipt of a
written description of an Investment Opportunity from the RA, Allied will
notify the RA as to whether or not Allied intends to pursue the Investment
Opportunity. If Allied so accepts the Investment Opportunity, then the
following terms of this Agreement shall control; if not so accepted, then the
RA may refer the Investment Opportunity to other lenders.
(c) DUE DILIGENCE; DISCRETION. Allied will, to the extent it deems
necessary, perform its own due diligence investigation regarding each
Investment Opportunity, and Allied may enlist the RA's assistance in gathering
information about the Investment Opportunity and in preparing transaction
write-ups, in addition to that provided pursuant to Subsection (a) above.
Notwithstanding any other provisions of this Agreement, Allied may, in its
absolute discretion, refuse to consider any Investment Opportunity.
(d) SUBLICENSE AGREEMENT. As a condition of Allied entering into this
Agreement, the RA shall enter into a Sublicense Agreement substantially in the
form attached hereto as Exhibit A granting the RA the non- exclusive right to
use certain of Allied's trade names, service marks, logos, emblems and other
indicia of origin.
(e) MARKET AREA FOR SBA 7(a) AND 504 LOAN PRODUCTS ONLY: The RA may
actively solicit new business using the licensed marks set forth in the
Sublicense Agreement attached hereto as Exhibit A in the Market Area as defined
in Schedule A.
The RA may not solicit Investment Opportunities or otherwise pursue new
business using the Licensed Marks outside the Marketing Area, but may be
compensated for each Investment Opportunity closed by Allied outside of the
Marketing Area, if such Investment Opportunity was introduced to Allied by the
RA in accordance with the procedures of Section 1(a) above. At Allied's sole
discretion, Allied may
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require that for Investment Opportunities introduced
outside of the Marketing Area, the assistance of another RA be enlisted for Due
Diligence services as described in Section 1(C) above. In that case, any
compensation paid by Allied pursuant to the Investment Opportunity will be
shared by each RA, as they shall mutually agree.
Allied reserves the right to develop relationships with other
organizations who are not RA's and do not license the Allied Capital Licensed
Marks for the purpose of referral of small business investment opportunities
("Referral Relationship"). If an Investment Opportunity is introduced to Allied
through a Referral Relationship, Allied may request the assistance of another
RA to be enlisted for Due Diligence services as described in Section 1(C)
above. In that case, Allied will agree with the RA on the amount of
compensation to be shared with the Referral Relationship source, not to exceed
one percent (1%) of the loan amount.
Allied may have assigned other RA's that have sublicensed the Licensed
Marks to the Marketing Area as identified on Schedule A. These RA's may also
solicit within the Marketing Area. Allied will not assign any new RA that has
sublicensed the Licensed Marks other than those RA's named or to be named as
listed on Schedule A to the Marketing Area within the term of this Agreement if
the RA satisfies the Marketing Area Production Levels set forth in Schedule A.
(f) MARKETING AREA FOR NON-SBA 7(a) AND 504 LOAN PRODUCTS: Allied has not
identified specific marketing areas for loan products other than SBA 7(a) and
504 loan products, however, Allied reserves the right to restrict any RA's
solicitation activity using Licensed Marks to a specific geographic location
for non-SBA7(a) and 504 loan products at any time.
SECTION 2. COMPENSATION. For each Investment Opportunity Allied accepts
and thereafter actually closes and funds, Allied will pay to the RA the amounts
stated to be payable in accordance with the provisions set forth in the Loan
Fee Schedule, Payment Schedule and Rebate Provisions of Schedule A. The RA
shall not receive any commission, brokerage, finder's or other fee or
compensation from the borrower or other beneficiary in connection with any such
Investment Opportunity without Allied's prior written consent.
SECTION 3. COVENANTS.
(a) STANDARDS OF OPERATION. The RA shall at all times during the term of
this Agreement operate the RA's business in compliance with all applicable
laws, rules and regulations and shall maintain all licenses or other
authorizations necessary for the operation of such business. The RA will not
knowingly operate the RA's business in any way which adversely reflects upon
Allied.
(b) NO TRANSFERS. Neither this Agreement nor the RA's rights and duties
hereunder may be sold, assigned or delegated by the RA without the prior
written consent of Allied.
(c) CONFIDENTIALITY. The RA shall at all times use and maintain in
confidence any proprietary information provided to the RA from Allied. For this
purpose, "proprietary information" means any information, oral or written, that
is not generally known outside of Allied that relates to its marketing plans,
customer lists, pricing methods, general financial performance data, or to
Allied's borrowers, but does not include proprietary information which is
received by the RA from a third party without restriction. The RA will receive
and maintain all proprietary information in confidence using all reasonable
care and, except as
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provided herein, shall not use proprietary information for the RA's benefit or
disclose it in whole or in part to any third party except as may be required or
contemplated in the course of the engagement hereunder. The RA agrees to
maintain the confidentiality of all proprietary information during the term of
the Agreement and for a period of two (2) years after its termination.
(d) INDEPENDENT STATUS. The RA shall at all times be an independent
contractor hereunder, rather than a co-venturer, agent, employee, franchisee or
representative of Allied. The RA shall work independently without supervision
by Allied, shall be responsible for its own taxes, shall not be required to
work on a continuing daily basis or on any specific work schedule and shall not
be provided with office space or administrative support by Allied. Allied
hereby acknowledges and agrees that the RA may engage in other businesses and
ventures.
(e) INDEMNIFICATION. Each of the RA and Allied shall indemnify, defend and
hold harmless the other from and against any and all losses claims, damages,
liabilities and expenses whatsoever, joint or several, as incurred, as to which
such other party may become subject under any applicable federal or state law
or otherwise, related to or arising out of or based upon any act or omission of
the RA or Allied, as the case may be, in connection with a breach or
misrepresentation or omission by such party of such party's obligations
hereunder or the representations contained herein or in connection with any
transactions contemplated hereby, and will reimburse the other party for all
legal or other expenses (including, without limitation, attorneys' fees and
expenses) as they are incurred in connection with the investigation of,
preparation for or defense of any pending or threatened claim or any action or
proceeding arising therefrom, whether or not such other party is a named party
in any such claim, action or proceeding; provided, however, that no party shall
have liability to the other to the extent that any such loss, claim, damage,
liability or expense is found in a final judgment by a court of competent
jurisdiction to have resulted from such other party's willful misconduct or
gross negligence.
SECTION 4. DURATION OF AGREEMENT.
(a) TERM. This Agreement shall take effect as of the date of execution and
shall remain in effect through December 31, 1997. Thereafter, the term of this
Agreement may be renewed for an additional one year period if agreed to by both
parties.
(b) TERMINATION. Notwithstanding any other provision hereof, Allied may
terminate this Agreement upon thirty days' prior written notice to the RA on
occurrence of any of one or more of the following events:
1. UNAUTHORIZED LOAN COMMITMENTS RA indicates in any way that RA can cause
or commit ALLIED or any other entity now doing business using name that
includes words "Allied Capital", or any of their subsidiaries or
affiliates, to fund any loan or investment.
2. NON-PERFORMANCE RA fails to perform or breaches any covenant,
obligation, term, condition, warranty or certification herein and fails to
cure such noncompliance within thirty (30) days after ALLIED gives written
notice thereof; provided, however, that such opportunity to cure shall be
limited to no more than two (2) such instances in any twelve (12) month
period.
3. FALSEHOOD RA knowingly makes, or has made, any materially false
statement or report to ALLIED in connection with this Agreement or
otherwise.
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4. BREACH OF COVENANTS RA operates the business conducted hereunder in a
manner contrary to or inconsistent with the Licensed Marks or this
Agreement, and RA fails to cure such deficiency within thirty (30) days
after ALLIED gives written notice to cure.
5. UNAUTHORIZED TRANSFERS RA attempts to transfer, in any way, this
Agreement in violation of the terms hereof.
6. FAILURE TO OPERATE AND CONTROL RA abandons or surrenders control of or
fails to operate actively the business conducted under this Agreement for
seven (7) or more consecutive days, except for illness, normal vacations
and holidays.
7. CRIMINAL CONVICTION RA or any person owning an interest in or any key
employee of RA is convicted of a felony, a crime of moral turpitude, or
any other crime or offense relating to the financial services business.
8. VIOLATION OF LAW RA fails, for a period of ten (10) days after
notification of non-compliance, to comply with any law or regulation
applicable to its financial services business, including without
limitation the Investment Company Act of 1940, as amended, the Investment
Advisers Act of 1940, as amended, and all other applicable securities and
broker-dealer laws.
This Agreement shall automatically terminate in the event of a material
breach of any terms of this Agreement. The RA's right to receive any
compensation pursuant to an Investment Opportunity presented by the RA and duly
accepted by Allied before such termination shall remain undiminished by any
such notice of termination.
SECTION 5. MISCELLANEOUS.
(a) NOTICES. Any notice required to be given hereunder shall be sufficient
if in writing, and sent by certified or registered mail, return receipt
requested, first-class postage prepaid, if to the RA at the address listed in
Schedule A hereto, and if to Allied, to its office located at 0000 X Xxxxxx,
X.X., 0xx Xxxxx, Xxxxxxxxxx, XX 00000.
(b) GOVERNING LAW. This Agreement, including any exhibits hereto, shall be
construed in accordance with and governed by the laws of the State of Maryland,
without regard to its principles of conflicts of law. Venue for any
adjudication hereof shall be only in the courts of the State of Maryland or the
federal courts in the State of Maryland, the jurisdiction of which courts both
parties hereby consent to as the agreement of the parties, as not inconvenient
and as not subject to review by any court other than such courts in Maryland.
Both parties intend and agree that the courts of the jurisdictions in which the
RA conducts business should afford full faith and credit to any judgment
rendered by a court of the State of Maryland against the RA, and should hold
that the Maryland courts have jurisdiction to enter a valid, in personam
judgment against the RA. The RA agrees that service of any summons and/or
complaint, and other process which may be served in any action, may be made by
mailing via registered mail or delivering a copy of such process to the RA at
its address specified below, and the RA agrees that this submission to
jurisdiction to consent to service of process are reasonable and made for the
express benefit of Allied.
(c) WAIVER OF JURY TRIAL. Each party to this Agreement agrees that any
suit, action or proceeding, whether claim or counterclaim, brought or
instituted by any party hereto or any successor or assign of any
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party on or with respect to this Agreement which in any way relates, directly
or indirectly, to the subject matter hereof or any event, transaction or
occurrence arising out of or in any way connected with this Agreement or the
dealings of the parties with respect thereto, shall be tried only by a court
and not by a jury. EACH PARTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY
JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING. The RA acknowledges and agrees
that this Section is a specific and material aspect of this Agreement between
the parties and that Allied would not enter into this Agreement with the RA if
this waiver of jury trial section were not a part of this Agreement.
(d) ENTIRE AGREEMENT; MODIFICATIONS AND WAIVERS; SEVERABILITY. This
Agreement represents the entire agreement and understanding by and between
Allied and the RA with respect to the services herein referred to, and no
representations, promises, agreements or understandings, written or oral, not
herein contained shall be of any force or effect. No change or modification
hereof shall be valid or binding unless the same is in writing and signed by
the party against whom such waiver is sought to be enforced; moreover, no valid
waiver of any provision of this Agreement at any time shall be deemed a waiver
of any other provision of this Agreement at such time or will be deemed a valid
waiver of such provision at any other time. In the event any provision
contained herein shall be held to be invalid, illegal or unenforceable, it
shall not affect any other provision hereof, and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein, unless to do so would cause this Agreement to fail of its
essential purpose.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
____________, 1997.
ALLIED CAPITAL LENDING CORPORATION
0000 X Xxxxxx, X.X., 0xx Xxxxx, Xxxxxxxxxx, X.X. 00000
By:
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Xxxx X. Xxxxxxx
Executive Vice President
REGIONAL ASSOCIATE
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Name:
Title:
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