SYSTEMS AND MARKETING AGREEMENT

This Systems and Marketing Agreement ("Agreement") is entered into as ofSeptember 30, 1999("Effective Date") between Option One Mortgage Corporation dbaH&R Block Mortgage, a California corporation having an address at S Ada,Irvine, California 92618 ("HRBM") and E-LOAN, Inc., a California corporationhaving an office at 5875 Arnold Road, Dublin, California 94568 ("E-LOAN")(collectively, the "Parties")

 

WHEREAS, HRBM is engaged in providing mortgage services that includeprocessing, origination, and funding mortgage leans secured by residentialproperties located in the United States; and

 

WHEREAS, E-LOAN is engaged in marketing mortgage services via the Internetincluding attracting visitors to E-LOAN's website, providing visitors with avariety of mortgage options, and displaying a variety of competitive loanproducts available on the market;

 

WHEREAS, HRSM and E-LOAN wish to develop a systems communication andmarketing program("Program") to facilitate and market HRBM's loan products tovisitors of E-LOAN's website;

 

NOW, THEREFORE, in consideration of their mutual promises, the Parties herebyagree as follows:

 

I. The Program

 

(a) E-LOAN shall market HRBM's various mortgage programs and products toInternet users.  The Program shall include a comprehensive marketing plandesigned, executed, and paid for by E-LOAN, to attract visitors to E-LOAN'swebsite ("Customers") for the purpose of obtaining mortgage loans from HRSMand other mortgage companies. All customers meeting the HRSM mortgage loanguidelines, as set forth in Exhibit A, will be noted and the on-line preliminaryapplication will be transferred to HRSM for further processing.

 

(b) Although E-LOAN shall market HRBM to its   Customers as required by theProgram: (i) E-

LOAN shall not be required to, and shall not,       endorse HRBM, in anycommunications under

the Program that are targeted to Customers;(1E) E-LOAN shall not be requiredto recommend HRSM as a mortgage provider and (iii) E-LOAN shall not be requiredto, and

shall not as part of the Program, provide advice, counseling or assistance toCustomers in connection with any particular HRBM mortgage loan, for which theyhave applied. E-Loan shall not hold itself out as a partner, joint venturer, orsimilar business affiliate of HRSM.

 

 2. Compensation.

HRBM shall pay E-Loan a one-time, non-refundable fee for the creation,construction, installation, and testing of the software, hardware, and othersystem enhancements necessary for communications between E-Loan and HRRM systemsand for enabling the

credit calculations on information submitted by the Customers (the "Set-UpFee) The amount of the Set-Up Fee shall be [*] and shall be due upon executionof this Agreement by both Parties and payable no more than twenty (20) daysthereafter.

 

b) HRBM shall pay E-Loan a marketing fee of [*] per month (the "MonthlyMarketing

Fee") for the marketing activities provided under this Agreement inconnection with the

Program- Each Monthly Marketing Fee shall be paid on or before the twentieth(20th) day

following the end of each month. To illustrate, the Monthly Marketing Fee duefor October marketing shall be due on or before November 20,1999. The Partieseach acknowledge

and agree that the Monthly Marketing Fee reflects the reasonable and fairmarket value of the goods and services to be provided by E-LOAN under theProgram, without regard to the

value or volume of mortgage loans that may be attributable to theProgram.

 

 3. Term and Termination.

(a) The term of this Agreement shall be for a period of [*] commencing onits

Effective Date unless earlier terminated in accordance with the provisions ofthis Section 3.

(b) Notwithstanding anything to the contrary in this Agreement, either partymay terminate this Agreement at any time, in the following situations ("Eventsof Default"):

(1) Material breach or this Agreement by the other party which remains

uncured after thirty (30) days' written notice thereof;

(2) A party makes a general assignment for the benefit of creditors, or filesa voluntary petition in bankruptcy or for reorganization or arrangement underthe bankruptcy laws, or a petition in bankruptcy is filed against a party and isnot dismissed within sixty (60) days after filing, or a receiver or trustee isappointed for all or any part of the property or assets of a party.

 

Upon termination of this Agreement, as provided herein or pursuant toParagraph 19; (I) HREM shall continue to process, in due course any mortgageloan applications submitted by any Customer prior to the date of termination and(ii) HRBM's obligation to pay any then due Monthly Marketing Fee will beprorated as of such date, and (iii) the provisions of Section 5 of thisAgreement shall survive.

 

4. Relationship. The relationship between HRBM and E-LOAN shall be that ofindependent contractors and neither party shall be or represent itself td be anagent, employee, partner or joint venturer of the other, nor shall either partyhave or represent itself to have any power or authority to act for, bind orcommit the other.

  5. Representations and Warranties.

(a) HRBM's Authority/Legal Actions. HRSM is a corporation duly organized,validly existing

and in good standing under the laws of the State of California with fullcorporate power and authority to transact the business contemplated by thisAgreement and it possesses all requisite authority, power, license. permits andfranchises to conduct its business as presently conducted. Its execution,delivery and compliance with its obligations under the terms of this Agreementare not prohibited or restricted by any government agency- There is no claim.action. suit, proceeding or investigation pending or, to the best of HRBM'sknowledge, threatened against it or against any of its principal 

officers, directors or key employees, which, either in any one instance or inthe aggregate. may result in an adverse

change in the business, operations, financial condition, properties or assetsof HRBM, or in

any impairment of the right or ability of HREM to carry on its businesssubstantially as now

conducted through its existing management group, or in any material liabilityon the part of HRBM, or which would draw into question the validity of thisAgreement.

 

(b) E-LOAN's Authority/Legal Actions. E-LOAN is a corporation duly organized,validly existing and in good standing under the laws of the State or Delawarewith full corporate power and authority to transact any and all businesscontemplated by this Agreement and it possesses all requisite authority. power,license, permits and franchises to conduct its business as presently conducted.Its execution, delivery and compliance with its obligations under the terms ofthis Agreement are not prohibited or restricted by any government agency. Thereis no claim, action, suit. proceeding or investigation pending or, to the bestof E-LOAN's knowledge, threatened against it or against any of its principalofficers, directors or key employees which, either in any one instance or in theaggregate, may result in an adverse change in the business, operations, originalcondition, properties or assets of E-LOAN, or

in any impairment of the right or ability of E-LOAN to carry on its businesssubstantially as now conducted through its existing management group, or in anymaterial liability on the part of E-LOAN, or which would draw into question thevalidity of this Agreement. The information and content on the E-LOAN website(other than information supplied by HRRM)and the E-LOAN Marks (as defined below)licensed hereunder, do not and will not infringe on the patent, copyright,trademark. trade name or other proprietary right of any third party.

(c) E-LOAN's Compliance. E-LOAN's website structure, format, information, andcontent, as built and as used by E-LOAN shall be in full compliance with allapplicable federal and state laws and this Agreement. E-LOAN has obtained, orwill have obtained in connection with the transactions contemplated by thisAgreement, all necessary federal and state approvals in connection withoperation and ownership or its website and the content thereof and will make thenecessary changes to its website to reflect this Agreement and insure accuraterepresentation- The Privacy notices and Privacy Policies of E-LOAN's websiteshall be consistent with the Federal Trade Commission's procedure or rules, andcomply with acceptable trade practices.

 

6. Execution/Conflict with Existing Laws or Contracts. The parties have takenall necessary action to authorize their respective execution, delivery andperformance of this Agreement The execution

and delivery of this Agreement and the performance of the obligations of therespective parties hereunder will not (I) conflict with or violate theCertificate or Incorporation or By-laws of either party or any provision of anylaw or regulation or any decree, demand or order to which either pad is subjector (ii) conflict with or result in a breach of or constitute a default (or anevent which, with notice or lapse of time, or both, would constitute a default)under any or the terms, conditions or provisions of any agreement or instrumentto which either party is a party or by which it is bound, or any order or decreeapplicable to either party, or result in the creation or imposition of any lienon any of their assets or property.

 

 

7. Confidential Information. Each party recognizes that during the term ofthis Agreement, its 	directors, officers, employees and authorized	representatives such as attorneys and accountants, may obtain knowledge ortrade secrets, customer lists, membership lists and other confidentialinformation or the other party which is valuable, proprietary, special or uniqueto the continued business of that party, which information is initiallydelivered in written form including electronic form or is summarized anddelivered in writing within thirty (30) days after initial delivery in non-written form, and which writing is marked "Confidential" or in a similar natureto indicate its nonpublic and proprietary nature ("Confidential information.However, Confidential Information does not include information that is or (i)becomes available to the general public other than through a breach by the

recipient party, (ii) already known to the recipient party as or the time ofcommunication to the recipient party, (iii) developed by the recipient partyindependently or and without reference to information communicated by the otherparty, or (iv) rightfully received by the recipient party from a third partywhich third party is not under a legal duty of confidentiality with respect tosuch information. Accordingly, each party as a recipient of the other'sConfidential Information agrees to hold the Confidential Information of thecommunicating party and the terms and conditions of this Agreement in confidenceand to use diligent efforts to ensure that the communicating party'sConfidential Information the terms hereof are held in confidence by it officers,directors, employees, representatives and others over whom it exercises controlUpon discovering any unauthorized disclosure of the communicating party'sConfidential Information or the terms or this Agreement, the recipient will usediligent efforts to recover such information and to prevent its further

disclosure to additional third parties. In addition, the recipient party willpromptly notify the

communicating party in writing of any such unauthorized disclosure of thecommunicating party's Confidential Information. The parties' obligations underthis paragraph will survive for a period or

three (3) years following the expiration or earlier termination of thisAgreement.

 

 8. Hold Harmless.

 

(a) HRSM agrees to indemnify, defend and hold E-LOAN harmless from andagainst any and

all claims, suits, actions, liability, losses, expenses or damages which mayhereafter arise,      which E-LOAN, its affiliates, directors, officers, agentsor employees may sustain due to or       arising out of any misrepresentation,negligent ad or omission by HRBM, its affiliates, officers. agents,representatives or employees or out of any act by HRBM, its affiliates,officers, agents, representatives or employees in violation of this Agreement orin violation of any applicable law or regulation. Provided, however, the aboveindemnification shall not provide coverage for (a) any claim, suit or action,liability or loss, expense or damage that resulted from F-LOAN'S negligent actor omission to a breach by E-LOAN

of any of its representations, warranties or obligations under thisAgreement, or (b) the

amount by which any cost, fee, expense or loss associated with any of theforegoing were

increased as a result of an act or omission on the part of F-LOAN. As acondition of the

foregoing indemnity obligation, E-LOAN agrees to give HRBM reasonably promptnotice of any third party claim.

 

(b) E-LOAN agrees to indemnify, defend and hold HRBM harmless from andagainst any and all claims, suits, actions, liability, losses, expenses ordamages which may hereafter arise,        which HRBM, its affiliates, directors,officers, agents or employees may sustain due to or

arising out of any misrepresentation, negligent act or omission by E-LOAN,its affiliates, officers, agents, representatives or employees or out of any actby E-LOAN, its affiliates, officers, agents, representatives or employees inviolation of this Agreement or in violation of any applicable law or regulation.Provided, however, the above indemnification shall not provide coverage for (a)any claim, suit or action, liability or loss, expense or damage that resultedfrom a negligent act or omission of HRBM or that is attributable to a breach byHRBM of any of its representations, warranties or obligations pursuant to thisAgreement, or(b) the amount by which any cost, fee, expense or loss associatedwith any of the foregoing were increased as a result of an act or omission onthe part of HRBM. As a condition of the foregoing indemnity obligation, HRRMagrees to give E-LOAN reasonably prompt notice of any third party claim.

 

 

 9. Notices. All notices required Of permitted by this Agreement shall be inwriting and shall be given by certified mail, return receipt requested or byreputable overnight courier with package tracing

capability and sent to the address at the read of this Agreement or suchother address that a party specified in writing in accordance with thisparagraph.

 

 10. Disclaimer Concerning Tax Effects. Neither party to this Agreement makesany representation or      warranty to the other regarding the effect that thisAgreement and the consummation of the transactions contemplated hereby may haveupon the foreign, federal, state or local tax liability of the other.

 

 11 - Disclaimer of Warranties Neither E-LOAN nor HRSM guarantees continuousor uninterrupted display or distribution of any links contemplated hereunder. orcontinuous or uninterrupted operation of their respective websites- In the eventof interruption of display or distribution of E-LOAN's or HRBM's links or theparties' websites (or any portion there to the parties' sole obligation to eachother shall be to restore service as soon as practical- In no event will eitherparty be liable for consequential, punitive. special or indirect damages inconnection with this Agreement or the obligations contemplated hereby even ifthey are advised of the possibility of such damages.

Notwithstanding the foregoing. or any other provision in this Agreement,should operation be interrupted for eight or more hours throughout a day (an"Interrupted flay") for five consecutive calendar days or longer, the MonthlyMarketing Fee shall be reduced by that amount equal to $2,500 per clay for eachInterrupted Day.

 

 12. Capitalized Terms. Capitalized terms used herein shall have the meaningsset forth herein.

 

 13. Amendment. The terms and conditions of this Agreement may not bemodified or amended other than by a writing signed by both parties.

 

 14. Trademark License. Neither party may use the other parties trademarks,service marks, trade names, logos, or other commercial or productdesignation(collectively "Marks") for any purpose whatsoever without the priorwritten consent of the other party.

 

 15. Assignment/Binding Nature. Neither party may assign, voluntarily, byoperation of law, or otherwise,

any rights, or delegate any duties under this Agreement to any party that isnot an affiliate of itself as of the Effective Date, without the other party'sprior written consent, except that either party may

assign this Agreement or any of its rights or obligations arising hereunderto the surviving entity in a merger, acquisition, reorganization orconsolidation in which it participates, or to a purchaser of substantially allof its assets; providing that the assigning party will give reasonable writtennotice to the non-assigning party in advance of such merger, acquisition orother assignment and that the

surviving entity is not a competitor to the non-assigning party. Subject tothe foregoing, this

Agreement shall be binding upon and shall inure to the benefit of thesuccessors and assigns of the Parties.

  16. Entire Agreement. This Agreement and any Exhibits attached heretoconstitute the entire Agreement between the Parties and supersede all oral andwritten negotiations of the Parties with respect to the subject matterhereof

 

 17. Governing Law. This agreement shall be subject to and construed underthe laws of the Stale of California. without reference to conflicts of lawprovisions thereof

 

 18. Severability. If any provision of this Agreement should be invalid,illegal or in conflict with any

applicable state or federal law or regulation, such law or regulation shallcontrol, to the extent or such conflict, without affecting the remainingprovisions or this Agreement. This Agreement shall be deemed to be severableand. if any provision is determined to be void or unenforceable, then thatprovision will be deemed severed and the remainder or the Agreement will remainin effect. Without limiting the foregoing, if either party is advised by counselor a regulatory body having jurisdiction over the party's activities that anyprovision of this Agreement violates any applicable federal or state law orregulation, then the parties agree cooperate to comply with such advice bymodifying or terminating this Agreement (in whole or in part).

 

 IN WITNESS WHEREOF, the Parties have caused this Agreement to be executedthe day and year first

above written-

 

 

E-LOAN, Inc.                 Option One Mortgage Corporation,dba H & R Block Mortgage

By;						  By;

 

 

                                   Exhibit A

 

 HRRM loan program Guidelines

 

   [*]

 

 

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