EXHIBIT 10.35
ADMINISTRATIVE SERVICES AND TECHNOLOGY SHARING AGREEMENT
This Administrative Services and Technology Sharing Agreement (the
"Agreement") is effective as of January 27, 2000 (the "Effective Date") by and
between XXXXXXXXX.XXX, INC., a Florida corporation (the "Client"), and
XXXXXXXX.XXX, INC., a Florida corporation ("MDCM").
FACTUAL BACKGROUND
A. The Client is a newly-formed, majority-owned subsidiary of
MDCM. MDCM's Openclose Division has developed, in cooperation with Xxxxxx Xxx, a
Web site whereby participating mortgage lenders, brokers and vendors can
exchange lender product and pricing information, automated underwriting data and
borrower application information in a neutral environment. This Web site,
xxxx://xxx.xxxxxxxxx.xxx/ (the "Openclose Web Site") is designed to expand the
availability of important and useful underwriting information, which results in
faster transactions, cost savings for borrowers, brokers, and lenders by
eliminating unnecessary paperwork, and improved communications between lenders
and brokers. MDCM has transferred a co-ownership interest in the Openclose Web
Site to the Client. The Client also provides custom versions of the Openclose
Web Site to mortgage lenders and brokers for use in their own names ("Private
Label").
B. The Client believes that it may be more efficient to
"outsource" certain administrative, management and technology support related
functions, thereby providing the Client with access to higher quality and more
sophisticated level of support at a lower cost because of the ability to "share"
the cost with other customers of the "outsource" provider. Of course, the
Client, desiring to be a stand-alone business, will retain other administrative
and management functions "in-house" where it is necessary for the "core
business" and is more cost effective or is otherwise more desirable.
C. The Client desires to have access to and the use of certain
assets of which MDCM is the owner or licensee.
D. The Client also desires to engage MDCM to perform certain
technology services including Web hosting and source code development services.
NOW, THEREFORE, the parties hereto agree as follows:
1. MANAGEMENT AND TECHNOLOGY SERVICES.
(a) ENGAGEMENT. The Client hereby engages MDCM to provide the
following services:
(i) FINANCIAL AND ACCOUNTING MATTERS. MDCM shall
maintain Client's general ledger, accounts receivable and
accounts payable records, and fixed asset records and provide
billing and collection services. MDCM shall also
prepare or cause to be prepared Client's federal, state and
local tax returns, and financial statements. MDCM shall also
provide, or cause to be provided, to Client payroll services,
including assistance with regulatory compliance matters. MDCM
shall maintain all past accounting, tax and payroll records
until such time as such records shall be disposed of in
accordance with applicable legal requirements and MDCM's
normal record disposal policies.
(ii) INSURANCE MATTERS. MDCM shall provide or cause
to be provided to Client insurance with the coverage,
insurers, and maximum deductibles set forth on SCHEDULE
1(a)(ii). All such insurance policies shall add Client as an
additional named insured and such insurers shall be required
to provide Client with no less than 5 days prior written
notice of any change or cancellation of any such insurance. In
the event of any such potential change which may have a
materially adverse affect on the Client, or in the event of
potential cancellation, Client shall be entitled to secure
replacement insurance at its own cost.
(iii) EMPLOYEE BENEFITS MATTERS. MDCM shall provide
or cause to be provided administrative services necessary to
the provision and maintenance of customary employee benefits,
including without limitation the Client's 401(k) Plan,
medical, dental, vision, and life insurance programs, and
stock option plan, and to the extent feasible, will permit the
employees of the Client to participate in MDCM's 401(k),
insurance and stock option plans.
(iv) LEGAL SERVICES. MDCM shall provide Client with
all legal services reasonably requested by Client which MDCM
in-house counsel currently provides to MDCM in the ordinary
course of business.
(v) FACILITIES MANAGEMENT SERVICES. As to the office
space described in Section 5, MDCM shall provide Client with
all facilities management services that MDCM currently
provides in the standard course of business in office space
occupied by MDCM. MDCM shall provide Client with the use of
computer equipment currently used in the Openclose Business.
(vi) IT SERVICES. MDCM shall provide certain general
information technology services and infrastructure including
assistance with, installation, and maintenance of telephonic
and computer equipment. As to the office space described in
Section 5, MDCM shall also provide Client with the use of
MDCM's existing and future telephone automatic call
distribution networks and systems and email systems. MDCM
shall provide such technical support and maintenance as Client
reasonably requests for Client and its clients and licensees
for the Software (as defined in the License Agreement) and the
Openclose Code. Client will not be charged for revisions or
updates provided under the License Agreement.
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(vii) WEB HOSTING AND MAINTENANCE OF OPENCLOSE WEB
SITE. MDCM will provide Web hosting services for the Openclose
Web Site pursuant to the Web Hosting Agreement attached as
EXHIBIT A. In consideration of hosting the Openclose Web Site,
Client shall pay to MDCM $5,000 per month, or such other
amount negotiated from time to time and stated in the Web
Hosting Agreement, commencing with the month following the
last month of a three-consecutive-month period in which Client
has positive net income, as reflected on the monthly financial
statements prepared by or for Client.
(viii) WEB HOSTING OF PRIVATE LABEL SITES. MDCM will
provide Web hosting services for Client's Private Label Web
sites for the following costs and charges: (i) for Private
Label Web sites provided to brokers under the Countrywide
Agreement, Client shall pay MDCM $20 per month per Private
Label Web site and (ii) for all other Private Label Web sites,
Client shall pay to MDCM monthly an amount equal to 10% of the
monthly receipts generated from each Private Label Web site,
such payment to be made within 30 days following the end of
the month for which receipts are being determined. Client
shall be entitled to offer to its clients MDCM's Private Label
Web Hosting services provided that the applicable agreement
includes provisions substantially similar to those set forth
in EXHIBIT A attached hereto, except that the limitation of
liability set forth therein and established at $100,000 shall
be modified as the parties mutually agree. Each such agreement
shall identify MDCM as an intended third party beneficiary of
such agreement and MDCM shall perform the hosting services
therein. In the event of termination of such Web Hosting
Services as permitted pursuant to the applicable agreement, if
the third party client requests and Client agrees, MDCM shall
transfer such site to Client or to such other location as
Client shall direct, for Client to assume hosting obligations.
Notwithstanding the foregoing, MDCM shall continue to provide
and shall comply with all of its obligations under the Web
site hosting agreements set forth on SCHEDULE 1(a)(viii)
hereto (the "Existing Client Web Site Hosting Agreements")
even if such agreements have been assigned to Client under the
Contribution Agreement, unless Client directs otherwise. MDCM
shall not terminate or modify such agreements without Client's
prior written consent unless termination is permitted by the
Existing Client Web Site Hosting Agreements. MDCM will use
commercially reasonable efforts to notify Client of the
reason(s) for such termination as soon as reasonably
practicable after such termination.
Openclose shall require the operator of each Private
Label Web site (other than existing operators of Private Label Web
sites identified on SCHEDULE 1(a)(viii)) to execute a Web hosting
agreement that includes provisions substantially similar to the Web
Hosting Agreement attached as EXHIBIT A, except that the limitation of
liability set forth therein and established at $100,000 shall be
modified as the parties mutually agree. Each such agreement shall
identify MDCM as an intended third party beneficiary. Except as
described in Section 7, nothing herein shall prevent Client from
offering additional Web hosting services through itself or third
parties.
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(ix) COOPERATION IN TRANSFERRING WEB SITES. In the
event Client moves its Openclose Web Site or any of its
Private Label Web sites to another host, MDCM shall reasonably
cooperate in the transfer of the Web sites to the new host.
(x) XXXXXX MAE CONTENT. Pursuant to the Amended and
Restated Desktop Underwriter Seller/Servicer Software License
and Subscription Agreement between MDCM and Xxxxxx Xxx entered
into October 1998 (the "Xxxxxx Mae Agreement"), MDCM has
access to certain technology made available by Xxxxxx Xxx (the
"Xxxxxx Mae Content"). As part of its obligations as co-owner
of the Openclose Code, MDCM shall provide Client with access
to the results generated by the Xxxxxx Xxx Content and shall
assist Client in incorporating such results into the Openclose
Web Site. Client understands and agrees that use of and access
to the Xxxxxx Mae Content under this Agreement is subject to
the terms and conditions of the Xxxxxx Xxx Agreement and that
such use and access shall terminate on the earlier of (i)
expiration or termination of Xxxxxx Mae Agreement, (ii)
expiration or termination of this Agreement, or (iii) transfer
of MDCM's interest in the Openclose Code to Client as set
forth in Section 5.03 of the Contribution Agreement. MDCM
hereby represents and warrants that the Xxxxxx Xxx Agreement
is in full force and effect, that neither MDCM nor Xxxxxx Mae
are in breach thereof, that MDCM is entitled to provide the
services and access hereunder provided to Client. MDCM hereby
agrees to use its best efforts to maintain the Xxxxxx Xxx
Agreement in full force and effect for the remaining term of
the Xxxxxx Mae Agreement and any renewal terms provided for
therein and agrees to pursue on behalf of the Client any
remedies for indemnification or otherwise on behalf of the
Client.
(xi) DEVELOPMENT SUPPORT. MDCM shall perform such
specific consulting projects and research projects for source
code development, from time to time, as shall be requested by
the Client and upon such terms as may be agreed upon between
the Client and MDCM; provided that the cost of these services
to Client will equal MDCM's salary and benefits costs for the
employee-developers and other direct costs and expenses, plus
10%. It is understood between the parties that to the extent
that MDCM performs development services for the Client on or
in connection with the Openclose Web Site or Openclose Code,
Client shall own all rights in the results and proceeds of
such services (other than pre-existing works or material
licensed from third parties), unless the parties agree
otherwise in writing. Nothing herein shall prevent the Client
itself or through third parties from performing such
development services from time to time.
(xii) OTHER SERVICES PROVIDED BY MDCM. MDCM shall
provide and perform such other services, as shall be requested
by the Client and agreed upon between the Client and MDCM,
from time to time, at such price and on such terms as agreed.
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(xiii) GHR CONTRACT. Pursuant to the Technology
Sharing and Marketing Agreement between MDCM and GHR Systems,
Inc. dated August 31st, 1998, as amended ( the "GHR
Contract"), MDCM and GHR share certain technology, revenue,
business knowledge and marketing and sales capabilities,
portions of which apply to the Client's Business, as
hereinafter defined. To the extent that the obligations of GHR
under the GHR Contract pertain to or are necessary for
Client's Business, MDCM and Client agree to use their
reasonable best efforts to cooperate with each other in order
to ensure that MDCM and Client each receive the benefit of,
and discharge the responsibilities of, the GHR Contract that
pertain respectively to MDCM's Business and Client's Business,
as their interests may appear. Without limiting the generality
of the foregoing MDCM agrees upon receipt of notice from
Client to register with GHR prospects of Client under section
3.d of Schedule A of the GHR Contract, to pay to Client all
amounts received from GHR that pertain solely to marketing
related to Client's Business. MDCM further agrees not to
terminate the GHR Contract without Client's prior written
consent, which shall not be unreasonably withheld. MDCM
further agrees that in connection with a renegotiation or
renewal of the GHR Contract, Client shall have the right to
direct MDCM as to whether the renegotiated or renewed GHR
Contract provides GHR with any marketing or other rights with
respect to Openclose Code. Client agrees to reimburse MDCM for
any amounts required to be paid by MDCM to GHR that pertain to
Client's Business provided that to the extent it has a right
to do so, MDCM shall not incur any expenses that relate to
Client's Business without Client's prior written consent.
(xiv) DEXMA AGREEMENT, EXISTING WEB SITE HOSTING
AGREEMENTS AND LENDER/BROKER CONTRACTS. The parties
acknowledge that the Dexma Agreement and the Existing Web Site
Hosting Agreements entered into prior to the date hereof are
necessary for the operation of the Openclose Business but are
not being assigned contemporaneously herewith and that all or
a portion of the lender and broker agreements may not be
currently assigned. MDCM agrees to execute any necessary
documents, instruments or agreements necessary to assign these
agreements to Client upon Client's request and agrees that
until the earlier of the expiration of the term of each such
agreement (including any renewal periods contained therein) or
any such assignment, MDCM shall use its best efforts to keep
such agreements in full force and effect. MDCM further agrees
that until the assignment of each of the aforementioned
agreements, MDCM shall take all actions to enforce its rights
under the agreements at the direction of Client and shall
promptly remit to Client any proceeds, revenues or
consideration received in connection with such agreements.
(b) COMPENSATION. For services described in subsections
(a)(i), (a)(iii), (a)(iv), (a)(v) and (a)(vi) of this Section 1 (the
"Administrative Services"), MDCM shall be compensated based on the
following allocation of costs and expenses. Allocation of costs and
expenses for Administrative Services shall be determined by headcount
as follows: MDCM shall determine the ratio of MDCM employees working
full-time on Administrative Services for Client to the number of MDCM
full-time employees on its payroll. Such ratio shall be applied to
MDCM's total salary, benefits costs and other direct costs and expenses
for its employees to determine the pass-through cost to Client. For
example, if 75 MDCM employees are working full-time on Administrative
Services for Client and MDCM has 750 full-time employees on its
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payroll, Such ratio shall be applied to MDCM's total salary, benefits
costs and other direct costs and expenses for its employees to
determine the pass-through cost to Client. For example, if 75 MDCM
employees are working full-time on Administrative Services for CLient
and MDCM has 750 full-time employees on its payroll, Client will be
charged 10% of MDCM's total salary costs, employee benefits costs and
other direct costs and expenses relating to MDCM financial, accounting,
employee benefits, human resources, legal, facilities management and IT
services. The same headcount ratio shall be applied to the cost of
insurance provided under Section 1(a)(ii) to determine a pass-through
cost to Client. Additional compensation is as otherwise described in
the sections of this Agreement describing the services to be provided
to Client.
MDCM has attached as Schedule 1(b) its budget and estimate of
the costs anticipated to be incurred by Client in connection therewith for the
calendar years 2000 and 2001. Within 30 days prior to the commencement of each
calendar year of the term of this Agreement, MDCM shall provide to Client for
Client's approval a similar budget, adjusted for the forthcoming year. MDCM
shall not be entitled to incur any expense that is not set forth in such a
budget without Client's consent, which shall not be unreasonably withheld.
Nothing in the budget shall be construed to limit Client's ability to require
MDCM to provide services under Section 1(a) or limit the compensation to which
MDCM shall be entitled for services rendered to Client that are not described in
the budget.
2. OWNERSHIP AND USE OF INTELLECTUAL PROPERTY.
(a) OPENCLOSE CODE. The term "Openclose Code" refers to the
programming and other intellectual property identified in the
Contribution Agreement among MDCM, Client and the other parties
thereto, of even date herewith (the "Contribution Agreement"). Solely
in order to provide the services described in Section 1(a)(xi), MDCM
may retain a reasonable number of copies of the Openclose Code (in both
object code and source code forms) and all associated documentation
which MDCM shall treat as Confidential Information of Client in
accordance with this Agreement, and, upon termination or expiration of
this Agreement for any reason, MDCM shall deliver to Client any and all
copies of such Openclose Code, and modifications and derivative works
based thereon, in whatever form or medium. MDCM acknowledges and agrees
that Client shall be considered a joint owner and co-inventor of all
copyrights, trade secrets, inventions, proprietary rights and
intellectual property contained in the Openclose Code. MDCM warrants
that no other copies of the Openclose Code exist on the date hereof.
(b) DELIVERY OF MODIFICATIONS OF OPENCLOSE CODE. In the event
that MDCM at Client's request carries out any modifications of or
preparation of any derivative works based on the Openclose Code, MDCM
shall within ten (10) days of such services deliver to Client updated
source and object code, all copies and documentation in connection
therewith.
(c) DERIVATIVE WORKS OF OPENCLOSE CODE. All derivative works
based on the Openclose Code developed by MDCM pursuant to Section
1(a)(xi) of this Agreement
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("Derivative Openclose Code") shall be owned by Client. Such ownership
rights shall be confirmed in the written terms agreed upon by the
parties for such development or in any other agreement or document the
Client reasonably requests MDCM to execute. Nothing herein shall
entitle MDCM to create any such derivative works except pursuant to the
provisions of a separate written agreement between the parties pursuant
to Section 1(a)(xi) or otherwise.
(d) LICENSE TO MDCM CODE. MDCM shall grant Client a perpetual,
world-wide, irrevocable non-exclusive license to the object code and
source code versions of certain software, technology and other rights
("MDCM Code"), pursuant to the License Agreement attached hereto as
Exhibit B (the "License Agreement"). As provided in the License
Agreement, Client shall also be entitled to receive copies of the
object code and source code versions of future MDCM Code developed by
MDCM. MDCM shall be the exclusive owner of the MDCM Code.
(e) RESIDUAL KNOWLEDGE. The parties mutually acknowledge that
during development of the Openclose Code and the performance of
services as provided in Section 1(a)(xi), MDCM and its personnel and
agents have and may become acquainted with certain general ideas,
concepts, know-how, methods, techniques, processes, and skills
pertaining to the Openclose Code (the "Residual Knowledge").
Notwithstanding anything in this Agreement to the contrary, and
regardless of expiration or termination of this Agreement, Client
hereby grants MDCM a perpetual, worldwide, noncancelable, irrevocable,
royalty free license to use the Residual Knowledge in conducting its
business, other than the Openclose Code or Client's Proprietary and
Confidential Information. Such license includes the right for MDCM to
use the Residual Knowledge in providing services and/or creating and
licensing programming, technologies, and other materials for MDCM's
other clients and for MDCM itself and its subsidiaries and affiliates,
and Client acknowledges and agrees that it shall not assert against
MDCM, its personnel, or MDCM's other clients any claim, prohibition, or
restraint from using such Residual Knowledge. ANY SUCH LICENSE IS
GRANTED "AS IS" AND "WITH ALL FAULTS." CLIENT HEREBY DISCLAIMS ANY AND
ALL WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
OF TITLE. CLIENT SHALL HAVE NO LIABILITY WHATSOEVER IN CONNECTION WITH
THE USE BY MDCM OF SUCH RESIDUAL KNOWLEDGE AND MDCM SHALL FOREVER
DEFEND, INDEMNIFY AND HOLD HARMLESS CLIENT IN THE EVENT OF ANY CLAIM OR
LOSS INCURRED BY CLIENT ARISING OUT OF USE BY MDCM OR ITS AFFILIATES,
SUBSIDIARIES, LICENSEES OR ASSIGNEES OF SUCH RESIDUAL KNOWLEDGE.
3. TERM. The term of this Agreement shall be twenty-five (25) years
from the date hereof, provided that the term shall thereafter automatically
renew from time to time for successive, additional one-year terms unless either
party shall provide the other party with a written notice of termination at
least six (6) months prior to the termination date (including any termination
date as a result of any renewal period).
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4. BILLING. MDCM shall xxxx the Client, on a monthly basis, a fee
reflecting compensation due for services rendered in the preceding month
calculated as provided for in this Agreement. The xxxx shall be due and payable
within thirty days of receipt. The Client shall have full access to MDCM's
records to the extent necessary to verify and audit MDCM's billing procedures,
provided that the Client agrees to keep all such information confidential. The
Client shall have the right, at any time, to review and audit the bills, and in
the event that the Client believes the bills are not prepared by MDCM in a
reasonable and good faith manner, the Client may request that the xxxx be
independently reviewed and adjusted by an independent certified public
accountant reasonably acceptable to the Client and MDCM. To the extent that any
investigation or audit reveals a discrepancy in MDCM's favor in the amount of 5%
or more of amounts paid for the preceding month, MDCM shall bear the cost of
such audit or investigation.
5. LEASE OF OFFICE SPACE TO THE CLIENT. MDCM recognizes that Client
would receive certain benefits from having a portion of its operations located
at or near MDCM's offices. Therefore, MDCM will provide certain available office
space and office support services to the Client pursuant to the Sublease
Agreement in the form attached as Exhibit C, with such changes as may be
required by the landlord. Until such time as the Sublease Agreement has been
executed and consent of the landlord obtained, the Client will reimburse MDCM
for MDCM's occupancy expense under its prime lease from landlord occupied by
MDCM personnel involved in the provision of services to the Client pursuant to
this Agreement.
6. SEPARATE IDENTITY OF CLIENT. The Client desires to remain at all
times a separate company. Toward that end, all business records, reports and
files prepared or maintained by MDCM for the Client shall remain the sole and
exclusive property and records of the Client and the Client shall be entitled to
their return at any time upon request. Moreover, all of the Client's funds,
accounts receivable or other property shall at all times be clearly and
distinctly maintained as the Client's separate and distinct property and shall
not be combined or commingled with the property of MDCM. Moreover, MDCM shall
have no authority hereunder to enter into contracts on behalf of, or otherwise
legally bind, the Client. Although MDCM shall make recommendations to the Client
hereunder, all decisions whether to accept or reject the advice of MDCM are up
to the Client's total discretion.
7. Non-Competition.
(a) BY CLIENT. The Client covenants and agrees that it will
not directly or indirectly for the term of this Agreement and for a
period of two years following the termination of this Agreement:
(i) engage in, continue in or carry on any business
which competes with MDCM in MDCM's Business (as hereinafter
defined) or which is substantially similar thereto (except
that Client may engage in mortgage banking to develop and
maintain mortgage banking capability for the purpose of
obtaining and maintaining approval of and a seller/servicer
license with, Xxxxxx Mae, Xxxxxxx Mac, Xxxxxx Xxx and similar
institutions to the extent required to permit Client to obtain
and maintain a license to utilize any such institution's
automated underwriting software);
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(ii) offer employment to a person who is or was
employed by MDCM during the then immediately preceding twelve
(12) months, or assist any other person or entity in offering
employment to a person who is or was employed by MDCM, during
the then immediately preceding twelve (12) months, without the
prior written consent of MDCM;
(iii) undertake any business with or solicit the
business of any person, firm or company who shall have been a
customer of MDCM and with whom any executive of MDCM or their
subordinates has dealt with during the then immediately
preceding twelve (12) months which might adversely affect
MDCM's business relationship with such customer, but only if
such solicited business relates to MDCM's Business;
(iv) engage in any practice the purpose of which is
to evade the provisions of this covenant not to compete.
(b) BY MDCM. MDCM covenants and agrees that it will not
directly or indirectly for the term of this agreement and for a period
of two years following the termination of this Agreement:
(i) engage in, continue in or carry on any business
which competes with the Client in the Client's Business (as
hereinafter defined) or which is substantially similar
thereto, except that MDCM may provide Web site development,
marketing, hosting and operation services to those Mortgage
Brokers (as defined in the agreement between MDCM and
Countrywide Home Loans, Inc. (the "Countrywide Agreement"))
that:
(a) as of December 22, 1999 have entered
into a written agreement with MDCM whereby MDCM
provides to such Mortgage Broker services and/or
products other than or in addition to Web site
development or hosting services (and only so long as
that written agreement remains in effect); or
(b) are net branches or are affiliated with
a real estate broker or agent, builder or financial
planner, insurance agent or other financial advisor
that is not principally a mortgage broker and have
entered into or shall hereafter enter into a written
agreement with MDCM whereby MDCM provides to such
Mortgage Brokers mortgage banking services and/or
products other than or in addition to Web site
development or hosting services (and only for so long
as such affiliation and written agreement remains in
effect). For purposes of this subparagraph (b), "net
branches" shall mean written contractual
relationships by which MDCM hires a person or entity
to manage a loan origination office under a name
other than "xxxxxxxx.xxx", the principal purpose of
which is to originate mortgage loans and sell them to
MDCM.
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(ii) consult with, advise or assist in any way,
whether or not for consideration, any corporation,
partnership, firm or other business organization which is now
or becomes a Competitor of the Client if the principal purpose
of such consultation, advice or assistance is to permit such
corporation, partnership, firm or business organization to
compete with Client in the Client's Business, including, but
not limited to, advertising or otherwise endorsing the
products of any Competitor of the Client for such purpose;
soliciting customers or otherwise serving as an intermediary
for any such Competitor of the Client for such purpose;
loaning money or rendering any other form of financial
assistance to or engaging in any form of business transaction
with any Competitor of the Client for such purpose;
(iii) offer employment to a person who is or was
employed by the Client during the then immediately preceding
twelve (12) months, or assist any other person or entity in
offering employment to a person who is or was employed by the
Client, during the then immediately preceding twelve (12)
months, without the prior written consent of the Client;
(iv) undertake any business with or solicit the
business of any person, firm or company who shall have been a
customer of the Client and with whom any executive of the
Client or their subordinates has dealt with during the then
immediately preceding twelve (12) months which might adversely
affect the Client's business relationship with such customer,
but only if such solicited business relates to the Client's
Business; or
(v) engage in any practice the purpose of which is to
evade the provisions of this covenant not to compete.
(c) MDCM'S BUSINESS. "MDCM's Business" shall mean (i) the
conduct of mortgage banking services consisting of one or more of the
following: originating, processing, underwriting, closing, funding and
selling loans on its own behalf or on behalf of its lender clientele
and Mortgage Brokers identified in Section 7(b)(i); (ii) the
development, marketing, sale and operation of Web sites, the principal
purpose of which is for consumers to obtain from lenders (without
participation of brokers, other than Mortgage Brokers identified in
Section 7(b)(i)) the origination, refinancing, processing,
underwriting, funding and closing of residential and commercial
mortgages; and (iii) the development, marketing, sale and operation of
private label Web sites described in (ii) above for lenders to which
consumers but not brokers (other than Mortgage Brokers identified in
Section 7(b)(i)) would have access.
(d) "CLIENT'S BUSINESS". "Client's Business" shall mean (i)
the provision (including, but not limited to, development, licensing
and hosting) of business-to-business web site portals, or private label
versions thereof, to mortgage brokers, lenders, mortgage insurance
companies and similar vendors pursuant to which such participants
exchange through such portals information, including but not limited
to, lender product and pricing information, automated underwriting
data, mortgage insurance certificates
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and borrower application information, using results obtained from
Xxxxxx Mae's Desktop Underwriter software, Xxxxxxx Mac's Loan
Prospector Software, or functionally equivalent software (collectively,
"Information"), except that "Client's Business" shall not restrict MDCM
from providing Information in connection with providing the services
described in the definition of "MDCM's Business"; (ii) providing "Web
Site Services" to "Countrywide Customers" as such terms are described
in the Countrywide Agreement; and (iii) providing Web site services to
mortgage brokers, including without limitation, development, marketing,
testing, sale, hosting and operation of Web sites for one particular
broker or many brokers.
(e) COMPETITOR. The term "Competitor" means any person,
entity, corporation, partnership, association, joint venture or other
organization that engages in or attempts to engage in the MDCM Business
or Client Business, respectively.
(f) SCOPE. The geographic scope of the covenant not to compete
shall extend world-wide. The Client and MDCM each hereby acknowledges
that the duration and scope of the covenants not to compete contained
in this section are reasonable.
(g) SURVIVAL. The provisions of this Section 7 shall survive
termination or expiration of this Agreement for any reason.
8. CONFIDENTIALITY. Subject to the License Agreement, the parties
agree, both during the Term of this Agreement and for a period of two years
after termination of this Agreement, but in no event less than ten (10) years
from the Effective Date, to hold each other's Proprietary or Confidential
Information in strict confidence. The parties agree not to make each other's
Proprietary or Confidential Information available in any form to any third party
or to use each other's Proprietary or Confidential Information for any purpose,
other than the implementation of and as specified in this Agreement and other
than use by Client in the Openclose Business. Each party agrees to take all
reasonable steps to ensure that Proprietary or Confidential Information of
either party is not disclosed or distributed by its employees, agents or
consultants in violation of the provisions of this Agreement. Each party's
Proprietary or Confidential Information shall remain the sole and exclusive
property of that party. Each party expressly agrees to include, maintain,
reproduce and perpetuate all notices or markings on all copies of all tangible
media comprising each party's Proprietary or Confidential Information in the
manner in which such notices or markings appear on such tangible media or in the
manner in which either party may reasonably request. The provisions of this
Section 8 shall survive termination or expiration of this Agreement for any
reason. For the purposes of this section, "Proprietary or Confidential
Information" shall mean knowledge and information not generally known in the
industry which provides a competitive advantage, including, without limitation,
technology, computer programs, research and development programs, formulas,
know-how, forecasts, sales and marketing methods, financing sources, customer
and mailing lists, customer usages and requirements, financial information and
all other confidential information, trade secrets and data. Proprietary or
Confidential Information includes, but is not limited to, the Openclose Code and
the MDCM Code and all derivative works based thereon and all trade secrets
related thereto. Openclose Code and MDCM Code derivative works shall be the
Proprietary and Confidential Information of its owner. Neither party shall have
any obligation with respect to Proprietary or Confidential
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Information which: (i) is or becomes generally known to the public by any means
other than a breach of the obligations of a receiving party; (ii) with respect
to Client, is Openclose Code and all derivative works based thereon and all
trade secrets related thereto, (iii) rightly received by the receiving party
from a third party after the date hereof, (iv) is independently developed by the
receiving party without reference to information derived from the other party;
and (v) subject to disclosure under court order or other lawful process.
9. EQUITABLE RELIEF. Each party acknowledges that the provisions and
restrictions contained in Section 7 and 8 of this Agreement are necessary to
protect the legitimate continuing interests of Client and MDCM and that any
breach or violation thereof may result in irreparable injury and damage to the
other party. Accordingly, each party hereby agrees that, in the event of such
breach, the other party may be entitled to seek equitable relief as granted by
any appropriate judicial body.
10. TERMINATION.
(a) BY CLIENT. The Client may terminate this Agreement
immediately upon delivery of written notice to MDCM. In addition, the
Client, from time to time, may expand or reduce the scope of services
provided by MDCM. For example, as illustration, Client may determine
that the number of employees at Client has increased to the level where
human resource management should now be handled "in-house" rather than
by MDCM. The parties recognize that this will be a flexible and
evolving relationship. If MDCM shall incur any expenses in connection
with and resulting from the Client's expansion, reduction, or
termination of any specific services or provision of technology
hereunder, Client shall reimburse MDCM for such costs or expenses
promptly upon receipt of an itemized account thereof.
(b) BY MDCM. MDCM may terminate the agreement upon not less
than 90 days written notice in the event that the Client has failed to
pay any outstanding invoice on the date due or within 30 days
thereafter.
(c) TERMINATION OF LEGAL SERVICES. Notwithstanding anything
herein to the contrary, MDCM's obligations hereunder to provide legal
services to Client as described in Section 1(a)(iv) hereof shall
automatically terminate as of the date MDCM ceases to hold, directly or
indirectly, a majority of the voting power of all classes of
outstanding voting stock of Client.
11. CHANGE OF CONTROL. The parties recognize that MDCM currently owns
more than a majority of the outstanding common stock of the Client. It is the
intention of the parties, and the parties hereto acknowledge and agree, that any
increase or decrease in MDCM's ownership of the Client's common stock shall have
no effect on MDCM's obligations hereunder, except as otherwise expressly
provided herein.
12. INDEPENDENT CONTRACTOR RELATIONSHIP. It is acknowledged and agreed
that MDCM's relationship with the Client is at all times hereunder an
independent contractor. The Client shall have no authority over MDCM's internal
business affairs and decisions. MDCM shall have no
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authority to act on behalf of, or legally bind the Client, and MDCM shall not
hold itself out as having any such authority. This Agreement shall not be
construed as creating a partnership or joint venture.
13. LIMITATION OF LIABILITY AND DISCLAIMER OF WARRANTIES.
(a) MDCM hereby warrants and represents that: MDCM will
provide the services requested pursuant to this Agreement in a
workmanlike and professional manner; MDCM shall comply with all of its
obligations under the Web Site Hosting Agreements referred to under
Sections 1(a)(vii) and 1(a)(viii) hereunder and the License Agreement;
the results and proceeds of MDCM's services provided hereunder do not
and will not infringe upon the copyright, trademark or service xxxx
rights of third parties; to the best of MDCM's knowledge, the results
and proceeds of MDCM's services provided hereunder do not and will not
infringe upon the patent rights of third parties. MDCM shall use
reasonable efforts to provide the services and technology described
herein with substantially the same degree of care as it employs in
making the same services and technology available for its own
operations; provided however that MDCM shall not be liable to Client or
any other person for any loss, damage, or expense which may result
therefrom or from any change in the manner in which MDCM renders such
services, so long as MDCM deems such change necessary or desirable in
the conduct of its own operations.
(b) EXCEPT AS PROVIDED IN SECTION 13(a), THE OPENCLOSE CODE,
MDCM CODE, AND ALL OTHER PROGRAMMING AND SOFTWARE (COLLECTIVELY
"SOFTWARE") BUT NOT THE SERVICES TO BE PROVIDED OR PERFORMED HEREUNDER,
ARE PROVIDED "AS IS," WITH ALL FAULTS, AND WITHOUT WARRANTY OF ANY
KIND. EXCEPT AS PROVIDED IN SECTION 13(a), MDCM DISCLAIMS ALL
WARRANTIES, EXPRESS AND IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE
IMPLIED WARRANTIES OF MERCHANTABILITY, AND FITNESS FOR A PARTICULAR
PURPOSE. CLIENT EXPRESSLY AGREES AND ACKNOWLEDGES THAT USE OF THE
SOFTWARE HEREUNDER IS AT CLIENT'S SOLE RISK. MDCM DOES NOT WARRANT THAT
THE SOFTWARE AND ALL SERVICES TO BE PROVIDED OR PERFORMED HEREUNDER
WILL MEET CLIENT'S REQUIREMENTS, OR THAT THE OPERATION OF THE SOFTWARE
OR USE OF THE SERVICES WILL BE UNINTERRUPTED OR ERROR-FREE, OR THAT
DEFECTS IN THE SOFTWARE OR SERVICES WILL BE CORRECTED.
(c) IN NO EVENT SHALL MDCM OR ANY OF ITS OFFICERS, DIRECTORS,
OR AGENTS BE LIABLE TO CLIENT OR ANY THIRD PARTY FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, INDIRECT,
SPECIAL, PUNITIVE, OR EXEMPLARY DAMAGES FOR LOSS OF BUSINESS, LOSS OF
PROFITS, BUSINESS INTERRUPTION, LOSS OF DATA, OR LOSS OF BUSINESS
INFORMATION) ARISING OUT OF OR CONNECTED IN ANY WAY WITH THE SOFTWARE,
SERVICES, OR MDCM'S PERFORMANCE UNDER THIS AGREEMENT, OR USE OF OR
INABILITY TO
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USE THE SOFTWARE OR SERVICES, OR FOR ANY CLAIM BY ANY OTHER PARTY, EVEN
IF MDCM HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
14. CLIENT INDEMNITY.
Client shall indemnify and hold MDCM harmless against any and all
liabilities, losses, damages, judgments, claims, causes of action, and costs
(including attorneys fees and disbursements) which MDCM may hereafter incur,
suffer, or be required to pay, defend, settle, or satisfy as a result of third
party claims against MDCM based on or arising out of: (i) representations or
warranties made by Client to its Private Label customers that are not
substantially similar to those in EXHIBIT A or have not been approved in writing
by MDCM; or (ii) Client's failure to comply with its obligations under Section
1(a)(viii).
15. MISCELLANEOUS.
(a) FORCE MAJEURE. Neither party shall be in default of this
Agreement or liable to the other party for any delay or default in
performance where occasioned by any cause of any kind or extent beyond
its control, including but not limited to, armed conflict or economic
dislocation resulting therefrom; embargoes; shortages or labor, raw
materials, production facilities or transportation; labor difficulties;
civil disorders of any kind; action of any civil or military
authorities (including priorities and allocations); fires; floods;
telecommunications failures; Internet slow-downs; and accidents. The
dates on which the obligations of a party are to be fulfilled shall be
extended for a period equal to the time lost by reason of any delay
arising directly or indirectly from:
(i) Any of the foregoing causes; or
(ii) Inability of that party, as a result of causes
beyond its reasonable control, to obtain instruction or
information from the other party in time to perform its
obligations by such dates.
(b) SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such a manner as to be effective and
valid under applicable law, but if any provision hereof is held by a
court of competent jurisdiction to be prohibited or invalid, such
prohibition or invalidity shall not affect the remaining provisions of
this Agreement. In the event a court of competent jurisdiction shall
determine and hold that the covenants contained herein are invalid or
unenforceable for any reason, the parties hereby request that such
court reform the provisions hereof in a manner to cause the covenants
contained herein to be enforceable as closely as possible to the way in
which originally written.
(c) COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which, when so executed, shall be deemed to be
an original, and all of which shall together constitute but a single
instrument.
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(d) FURTHER ASSURANCES. The parties hereby agree to execute
such other documents and perform such other acts as may be reasonably
necessary or desirable to carry out the purposes of this Agreement.
(e) NOTICES. Any and all notices provided for herein shall be
in writing and shall be considered as properly given if delivered to
the party or sent by registered or certified mail, postage prepaid, to
the parties hereto at the addresses set out below opposite their names
or such other address or to the attention of such other person as the
party shall have specified by prior written notice. Any notice under
this Agreement shall be deemed to have been given (a) if delivered in
person, when so delivered or refused; (b) if sent by facsimile or
overnight courier, one (1) business day following transmission or
delivery to courier (as the case may be; or (c) if by registered or
certified mail, three (3) days following deposit in the U. S. Mail.
If to the Client: Xxxxxxxxx.xxx, Inc.
0000 Xxxxx Xxxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attn: Chief Operating Officer
If to MDCM: Xxxxxxxx.xxx, Inc.
0000 Xxxxx Xxxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attn: General Counsel
Copies of all Notices to: Xxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxx, Xx., Esq.
(f) BINDING EFFECT. This Agreement shall bind and inure to the
benefit of the parties, and their respective successors, heirs and
assigns.
(g) GOVERNING LAW. This Agreement and the obligations of the
parties hereunder shall be interpreted, construed and enforced in
accordance with the laws of the State of Florida.
(h) ATTORNEYS' FEES AND COSTS. If either party brings suit or
arbitration against the other to enforce the terms of this Agreement,
the prevailing party shall be entitled to recover all reasonable costs,
including attorneys' fees, from the other party as part of any judgment
or award.
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(i) ASSIGNMENT. This Agreement shall not be assignable in
whole or in part by MDCM or Client without the other party's prior
written consent, and any attempted assignment without such consent
shall be void, provided that Client may assign this Agreement to any
person acquiring all or substantially all of its assets without
obtaining such consent.
(j) SURVIVAL. The provisions of this Agreement which by their
terms survive the termination of this Agreement, including Sections 7
and 8, or expressly require action subsequent to termination of this
Agreement shall survive the termination of this Agreement to the extent
set forth in such provisions.
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IN WITNESS WHEREOF, the undersigned parties hereto have duly executed
this Agreement on the date first above written.
XXXXXXXXX.XXX, INC.
By: _____________________________________________
Xxxxx Xxxxxx, President and Chief Operating
Officer
XXXXXXXX.XXX, INC.
By: _____________________________________________
Xxxx X. Xxxxxx, President and Chief Executive
Officer
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