Marketing and Customer Referral Agreement
BY AND BETWEEN
AND
Dated as of
THIS MARKETING AND CUSTOMER REFERRAL AGREEMENT (this “Agreement”) is executed to be effective as of (the “Effective Date”), by and between , a corporation (“Parent”), and , a corporation (“Subsidiary”). and may be collectively referred to as the “parties,” and individually as a “party.”
Recitals
WHEREAS, Parent is the direct and/or indirect holder of all of the equity interests in Subsidiary;
WHEREAS, contemporaneously with the execution and delivery of this Agreement, Parent and Subsidiary have entered into a , dated as of the date hereof (the “Separation Agreement”), and the other (as defined in the Separation Agreement);
WHEREAS, promptly following the execution of this Agreement and the other , Subsidiary will undertake an initial public offering (the “IPO”) of a portion of its common stock (the “”);
WHEREAS, immediately following consummation of the IPO, Parent will own at least of the ;
WHEREAS, as of the date hereof it is the intention, but not the obligation, of Parent and Subsidiary to sell or issue, as applicable, additional shares of at an undetermined future date or dates in one or more transactions such that Parent would thereafter own less than of the ;
WHEREAS, Parent and its subsidiaries and affiliates (excluding Subsidiary and its subsidiaries) is in the business of providing consumer financial products and services in its store-front retail locations throughout ;
WHEREAS, Subsidiary and its subsidiaries (collectively, “”) is in the business of originating and arranging short-term consumer loans via the Internet through the use of the electronic, publicly available websites at the specific URLs used to identify the websites and any website owned, controlled, or utilized by for the purpose of originating or arranging consumer loans (and any successor URLs selected by ) containing the functionality to originate or arrange consumer loans by (the “”);
WHEREAS, has developed, operates and maintains a real-time, host-based loan management processing software system and call center providing the means and/or facilities for processing prospective customer loan applications, originating or arranging consumer loans, as well as funding, servicing and collecting such loans (collectively the “”);
WHEREAS, currently markets, originates and/or arranges consumer loan products including deferred presentment transactions, “payday” loans, installment loans, line of credit advances and other financial products offered through the (such financial products collectively referred to as the “”) and manages the origination, funding, servicing and collection of these loans through the ;
WHEREAS, Parent and its subsidiaries other than (collectively, “”) and currently have an informal agreement for the payment of referral fees and commissions similar to the structure set forth in this Agreement, and the parties desire to continue this marketing and referral arrangement after the IPO; and
WHEREAS, the purpose of this Agreement is to set forth the relationship and structure between and , after the closing of the IPO, for their marketing and customer referral arrangement.
NOW, THEREFORE, in consideration of the covenants contained herein, Parent, on behalf of itself and its subsidiaries other than , and Subsidiary, on behalf of itself and its subsidiaries, agree to the following terms and conditions that apply to the referral of, and payment for the referral of, customers or applicants:
Customer Referral Agreement
Pursuant to the terms and conditions of this Agreement, the parties agree that Subsidiary shall pay Parentcertain fees and commissions, as set forth in Section 5. of this Agreement, in consideration for Parent referring individual customers or applicants (the “Customers”) to Subsidiary using the following referral methods:
Lead Referrals. Parent shall have the right to create and maintain a hyperlink from any website owned and controlled by Parent (“”) to a to allow potential Customers to click-through to a for the purpose of originating or arranging a consumer loan. Parent shall, at its own cost and expense, provide all Internet connections, equipment, operating systems, and software required for Parent to use a as set forth in this Agreement in accordance with the technical requirements of a provided by Subsidiary. Parentand any person or entity under Parent’s control shall comply at all times with the terms of use of Subsidiary and any acceptable use policy of any third-party service provider provided by Subsidiary to Parent in writing with respect to a in connection with its use of a as set forth in this Agreement. Parent shall not, and shall not permit any person under Parent’s control to make derivative works of a ; reverse engineer, reverse assemble, decompile or otherwise attempt to derive source code from a ; use or allow the use of a in contravention of any applicable law; introduce into a any virus or other code or routine intended to damage or disrupt a ; use a by means of “framing,” “deep linking,” “robots,” “bots,” “spiders,” “data mining,” “scraping,” or any other similar automated method except as expressly permitted in this Agreement; or otherwise act in a fraudulent, malicious, or negligent manner when using a . For the purposes of this Agreement, each customer provided to a through a link on the to whom Subsidiary subsequently originates or arranges a consumer loan that is ultimately funded to the consumer shall be referred to individually as a “Lead Referral” and collectively as the “Lead Referrals.”
Coupon Referrals. Parent shall also have the right to provide coupons to Customers for the purpose of advertising online consumer loans originated or arranged by Subsidiary via a and any such Customers that obtain a Loan through a as a result of the foregoing are referred to herein individually as a “Coupon Referral” and collectively as the “Coupon Referrals.” The Customer coupons shall contain a unique code to be provided by Subsidiary, which will identify the particular referring Parentlocation. Subject to Subsidiary’s right to approve any such marketing materials, as set forth below, the Customer coupon will be designed by Parent to promote and market a to Customers and prospective customers in . Parent shall make all decisions relating to the distribution and promotion of the Customer coupons.
Term
The term of this Agreement will begin as of the Effective Date and will continue thereafter for a period of 0 years (the “Term”). This Agreement shall automatically renew for additional 0 years renewal terms following the expiration of the Term or any renewal thereof, unless a party hereto provides the other party hereto with written notification of its intention not to renew this Agreement at least 0 days prior to the end of the Term or any renewal term, as the case may be, or unless this Agreement is terminated in accordance with the provisions set forth in Section 7..
Representations and Warranties
Parent represents and warrants to Subsidiary that it has all licenses, permits, consents and approvals required to be obtained by it from any regulatory agency exercising its authority over Parent in order for it to lawfully conduct its business, to perform its obligations hereunder and to receive the rights and benefits available to it hereunder except to the extent the failure to have any of the foregoing could not, singly or in the aggregate, reasonably be expected to have a material adverse effect on Parent. Subsidiary represents and warrants to Parent that it has all licenses, permits, consents and approvals required to be obtained by it from any regulatory agency exercising its authority over Subsidiary in order for it to lawfully conduct its business, to perform its obligations hereunder and to receive the rights and benefits available to it hereunder except to the extent the failure to have any of the foregoing could not, singly or in the aggregate, reasonably be expected to have a material adverse effect on Subsidiary.
Covenants
Subsidiary Covenants.
Subsidiary agrees to provide the P0D (as defined in Section (5.c)) to Parent detailing all loan activity to any Subsidiary customer who was referred to Subsidiary pursuant to this Agreement (“Referral”).
For all originated or arranged by Subsidiary pursuant to this Agreement, Subsidiary shall be responsible for collecting the debt as represented by each of the Customer loan agreements. Further, Subsidiary shall develop and employ a comprehensive collections strategy to facilitate same, which can include placement of the debt with third-party collections agencies or sale of the debt to third-party buyers.
Subsidiary agrees that it will obtain and maintain any and all licenses, registrations, or authorizations that are or may be required by any with authority over Subsidiary for the origination or arrangement of consumer loans.
Subsidiary will comply with all , including those of any governmental agencies that exercise authority over Subsidiary to the extent the same are applicable to Subsidiary’s rights or obligations under, or performance of, this Agreement.
Subsidiary will maintain functionality within the to accurately track, and report to Parent, all incoming Lead Referrals and Coupon Referrals at all times during the Term of this Agreement (and any renewal term) and to accurately track P0D generated by all Coupon Referrals until such time as Subsidiary is no longer obligated to pay Parent Referral Commissions applicable to such Customer, as provided below.
Parent Covenants.
Parent will deliver Lead Referrals to Subsidiary by such means as mutually agreed to by the parties. Parent shall determine in its sole discretion which Customers will be delivered to Subsidiary in order for the Customer to be offered a Loan, or the arrangement of a Loan, by Subsidiary pursuant to this Agreement.
Parent will consult with Subsidiary in the development of any advertising artwork and promotional copy that specifically markets the offered or arranged by Subsidiary (collectively, “advertising materials”). Prior to using any advertising materials, Parent shall submit the same to Subsidiary for approval and Subsidiary shall approve the same within 0 days following receipt thereof from Parent. If Subsidiary does not approve or disapprove the same by notifying Parent thereof in writing within such 0 days, such advertising materials shall be deemed approved by Subsidiary; provided, however, if Subsidiary timely disapproves any such advertising materials, the parties hereto shall promptly and diligently work together to develop a mutually agreed upon form of such advertising materials. Subsidiary hereby agrees and acknowledges that any advertising materials in use by Parent on or prior to the date hereof are approved advertising materials. Subsidiary agrees to waive all rights of attribution and integrity, and all other common-law and statutory rights relating to the advertising materials.
Parent agrees that it will obtain and maintain any and all licenses, registrations, or authorizations that are or may be required by any with authority over Parent related to its referral of customers to Subsidiary.
Parent will comply with all , including those of any governmental agencies that exercise authority over Parent, to the extent the same are applicable to any of Parent’s rights or obligations under, or performance of, this Agreement.
Consideration
Subsidiary agrees to pay Parent the following fees and commissions in consideration of the customer referrals as referenced in Section 1. of this Agreement:
Referral Fee. In consideration for Lead Referrals, Subsidiary agrees to pay Parent a per lead referral fee in the amount of for each Lead Referral provided by Parent to Subsidiary (collectively, the “Referral Fees”).
Referral Commission. In consideration for each Coupon Referral from a Parent location utilizing a unique Subsidiary coupon code, Subsidiary agrees to pay Parent a referral commission for each Coupon Referral in an amount equal to of the P0D from each such Customer (the “Referral Commission”). For the purposes of calculating the Referral Commission, the “Net Revenue” shall be defined as gross loan fees and interest received from a Customer minus any unrecovered principal, interest, or fees. For purposes of this calculation, once a Coupon Referral has been referred to Subsidiary pursuant to this Agreement, Subsidiary shall continue to pay a Referral Commission throughout the life of Subsidiary’s customer relationship with such Customer, with the life of Subsidiary’s customer relationship of any particular Customer being deemed to have ended only at such time as such Customer has had no amount outstanding under any Loan for a period of consecutive months; provided, however, for purposes of this Section in no event shall the life of Subsidiary’s customer relationship with any particular Customer be deemed to extend beyond the end of the 0 months following the termination of this Agreement, as more particularly described in Section (7.b) below.
Settlement. On or before the P0M of each month, Subsidiary shall provide an electronic statement of accounting with transactional level details that provides the necessary support for the calculation of Referral Fees, Referral Commissions and Net Revenue applicable to each Customer, as well as any other recovery of revenue for any other prior period (the “P0D”). On or before the of each month, Subsidiary shall remit payment of the amount of Referral Fees and Referral Commissions as shown on the P0D that is due and owing to Parent for the prior month via an ACH credit to an account designated by Parent. If Parent disagrees with the amount shown as due and owing to Parent on any P0D, Parent shall notify Subsidiary thereof in writing and the parties will work together to resolve such dispute in accordance with this Agreement; provided, however, Subsidiary shall be obligated to pay any amount not in dispute when the same is first due and payable.
Confidentiality
Subsidiary and Parent each acknowledge and agree that the terms of of the shall apply to Information made available or disclosed by one party to the other in connection with this Agreement. For the avoidance of doubt, it is hereby agreed that Subsidiary and its subsidiaries and affiliates are referred to as ‘’ and the ‘,’ respectively, under the and Parent and its subsidiaries and affiliates are referred to as ‘ and the ‘,’ respectively, under the .
Termination
Either party may terminate this Agreement: (i) at any time upon written notice to the other party if the other party breaches this Agreement and fails to cure such breach within 0 days after receipt of written notice of the breach; or (ii) for any reason upon 0 days written notice to the other party. In the event of a termination by one party as a result of the other party’s breach of this Agreement, the non-defaulting party shall have all rights and remedies available to such party at law or in equity.
In the event this Agreement is terminated for any reason hereunder, Subsidiary shall compensate Parent for (i) Lead Referrals Parent delivers to Subsidiary through the date of termination, and (ii) all Referral Commissions applicable to all Coupon Referrals Parent delivers to Subsidiary through the date of termination until the earlier to occur of (x) the end of Subsidiary’s customer relationship with such Customer as provided in Section (5.b) above, or (y) the end of the 0 months month following the termination date of this Agreement and during this period, Subsidiary shall continue to provide Parent with the P0D described in Section (5.c) and continue to pay Parent the Referral Commissions applicable to all such Coupon Referrals, as set forth in Section (5.b).
Indemnification
The parties agree to be responsible for their own actions, and each party agrees to indemnify, defend and hold harmless the other party and such other party’s directors, officers, employees and agents for, from and against all claims and losses of any type, including reasonable attorneys’ fees, in connection with, in whole or in part: (i) any negligent act or omission by, or any willful misconduct on the part of, the indemnifying party; or (ii) the indemnifying party’s failure to comply with any applicable , or any breach of this Agreement by the indemnifying party.
Audit Rights
Parent shall, during the Term and until the later of (i) 0 years after any termination of this Agreement, or (ii) such date on which all amounts due and owing by Subsidiary to Parent pursuant to this Agreement have been paid in full, have the right to audit and inspect Subsidiary’s books and records relating in any manner to the terms, conditions and performance of this Agreement. Subsidiary shall, during the Term have the right to audit and inspect Parent’s books and records, policies and procedures and marketing activities as they relate to the terms, conditions and performance of this Agreement by Parent.
Intellectual Property
Nothing in this Agreement constitutes an agreement by a party to assign or otherwise convey title to any of its intellectual property rights to the other party. As between the parties, each party will retain full ownership of and title to all intellectual property rights and related goodwill, in its respective URL addresses, domain names, equipment, materials, hardware, software designs, works of authorship, inventions and other items provided by such party in connection with this Agreement. The parties also agree that any intellectual property created solely by a party as a part of this Agreement shall be the sole and exclusive property of the creating party.
Limitation of Liability
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, UNDER NO CIRCUMSTANCES, INCLUDING NEGLIGENCE, SHALL EITHER PARTY HEREUNDER BE LIABLE FOR ANY INDIRECT, INCIDENTAL, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES INCURRED OR SUFFERED BY THE OTHER PARTY ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, INCLUDING WITHOUT LIMITATION LOST REVENUE, LOSS OF INCOME, OR LOSS OF BUSINESS ADVANTAGE, EVEN IF THE PARTY SUFFERING SUCH DAMAGES, OR AN AUTHORIZED REPRESENTATIVE OF SUCH PARTY, HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Construction
The parties have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party because of the authorship of any provision of this Agreement. Any reference to any shall be deemed also to refer to such law as amended and all rules and regulations promulgated thereunder, unless the context requires otherwise. Any reference to any contract or agreement (including schedules, exhibits and other attachments thereto), including this Agreement, shall be deemed also to refer to such contract or agreement as amended, restated, or otherwise modified, unless the context requires otherwise. The words “include,” “includes,” and “including” shall be deemed to be followed by “without limitation.” Pronouns in masculine, feminine, and neuter genders shall be construed to include any other gender, and words in the singular form shall be construed to include the plural and vice versa, unless the context requires otherwise. The words “this Agreement,” “herein,” “hereof,” “hereby,” “hereunder,” and words of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. Where this Agreement states that a party “will” or “shall” perform in some manner or otherwise act or omit to act, it means that such party is legally obligated to do so in accordance with this Agreement. The captions, titles, and headings included in this Agreement are for convenience only and do not affect this Agreement’s construction or interpretation. Any reference to an Article, Section, or Schedule in this Agreement shall refer to an Article or Section of, or Schedule to, this Agreement, unless the context otherwise requires. This Agreement is for the sole benefit of the parties and does not, and is not intended to, confer any rights or remedies in favor of any other than the parties.
Assignment
Except as set forth herein, neither party shall assign, transfer, or otherwise alienate any or all of its rights or interest under this Agreement without the express prior written consent of the other party, which consent may be granted or withheld in such other party’s sole discretion; provided, however, that the foregoing shall in no way restrict the performance of any of the terms or conditions of this Agreement by an affiliate or subsidiary of a party hereto to the extent the same is consistent with the intent of this Agreement.
Entire Agreement
This Agreement and the constitute the entire agreement between the parties with respect to the subject matter hereof and supersede (a) all prior oral or written proposals or agreements, (b) all contemporaneous oral proposals or agreements, and (c) all previous negotiations and all other communications or understandings between the parties, in each case with respect to the subject matter hereof. To the extent any portion of this Agreement conflicts, or is inconsistent, with any other , this Agreement shall control; provided, however, that if there are any conflicting or inconsistent provisions in the , the shall control.
Notices
Any notice, instruction, direction or demand under the terms of this Agreement required to be in writing shall be duly given upon delivery, if delivered by hand, facsimile or other generally accepted means of electronic transmission, or mail (with postage prepaid), to the following addresses:
or to such other addresses or telecopy numbers as may be specified by like notice to the other party.
Governing Law
This Agreement shall be construed in accordance with and governed by the substantive internal laws of the , excluding its conflicts of law rules.
Severability
If any term or other provision of this Agreement shall be determined by a to be invalid, illegal, or unenforceable, such invalidity, illegality, or unenforceability shall not render the entire Agreement invalid. Rather, this Agreement shall be construed as if not containing the particular invalid, illegal, or unenforceable provision, and all other provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to either party. Upon such determination that any term or other provision is invalid, illegal, or unenforceable, the parties shall negotiate in good faith to modify this Agreement so as to give effect to the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent permitted under applicable .
Amendment
This Agreement may only be amended by a written agreement executed by both parties.
Guarantees
Subsidiary will cause to be performed and hereby guarantees the performance of any and all actions of each of its affiliates and subsidiaries to the extent such actions are necessary or appropriate to effectuate the provisions of this Agreement. Parent will cause to be performed and hereby guarantees the performance of any and all actions of each of its affiliates and subsidiaries to the extent such actions are necessary or appropriate to effectuate the provisions of this Agreement.
Counterparts
This Agreement may be executed in separate counterparts, each of which will be deemed an original and all of which, when taken together, will constitute one and the same agreement. Any signature affixed to this Agreement by a party hereto may be delivered by such party to the other party via electronic or facsimile transmission and any party’s signature affixed to this Agreement that is delivered to the other party via an electronic or facsimile transmission shall be treated as an original signature to this Agreement and will constitute an original counterpart of this Agreement.
Authority
Each party represents to the other party that (a) it has the corporate power and authority to execute, deliver, and perform this Agreement, (b) the execution, delivery, and performance of this Agreement by it have been duly authorized by all necessary corporate or other actions, (c) it has duly and validly executed and delivered this Agreement, and (d) this Agreement is its legal, valid, and binding obligation, enforceable against it in accordance with its terms, subject to applicable , or other similar laws affecting creditors’ rights generally and general equity principles.
Binding Effect
This Agreement binds and benefits the parties and their respective successors and permitted assigns. Other than those entitled to indemnity hereunder, there are no third-party beneficiaries having rights under or with respect to this Agreement.
Waiver
A provision of this Agreement may be waived only by a writing signed by the party intended to be bound by the waiver. A party is not prevented from enforcing any right, remedy, or condition in the party’s favor because of any failure or delay in exercising any right or remedy or in requiring satisfaction of any condition, except to the extent that the party specifically waives the same in writing. A written waiver given for one matter or occasion is effective only in that instance and only for the purpose stated. A waiver once given is not to be construed as a waiver for any other matter or occasion. Any enumeration of a party’s rights and remedies in this Agreement is not intended to be exclusive, and a party’s rights and remedies are intended to be cumulative to the extent permitted by law and include any rights and remedies authorized in law or in equity.
Dispute Resolution
All disputes and controversies which may arise out of or in connection with this Agreement and are not resolved through good faith negotiation shall be settled in accordance with the provisions of of the .
Relationship of Parties
This Agreement does not create a fiduciary relationship, partnership, joint venture, or relationship of trust or agency between the parties.
Further Assurances
From time to time, each party agrees to execute and deliver such additional documents, and will provide such additional information and assistance as any party may reasonably require to carry out the terms of this Agreement.
Survival
The parties agree that the provisions of this Agreement that by their terms or nature are intended to survive the termination of this Agreement shall survive such termination.
Effect if IPO Does Not Occur
If the IPO is terminated pursuant to the (as defined in the ), then all actions and events that are, under this Agreement, to be taken or occur effective as of the , or otherwise in connection with the IPO, will not be taken or occur except to the extent specifically agreed otherwise by the parties hereto.
No Publicity
Neither party shall (a) use the other party’s trademarks, logo or name in connection with any advertising materials, or (b) issue a press release announcing the parties’ business relationship, without the prior, written consent of the other party as to the context and content of such materials or press release. Each party shall have the right to terminate its consent at any time and for any reason by providing written notice to the other party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective as of the .
