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EXHIBIT 10.14
FORM OF
REGIONAL ASSOCIATE AGREEMENT
This Regional Associate Agreement (this "Agreement") is made between
Allied Capital Corporation, a Maryland corporation ("Allied"), and the person
identified in Schedule A hereto (the "RA").
Allied is a diversified financial services firm engaged in, among other
activities, the business of providing financing for commercial borrowers.
Allied desires to be introduced to prospective loan and other investment
opportunities, and the RA desires to submit such opportunities to Allied for
Allied's consideration.
In consideration of the foregoing, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto, intending to be legally and equitably bound, hereby agree
as set forth below.
SECTION 1. TERMS OF ENGAGEMENT.
(a) INTRODUCTION AND ACCEPTANCE OF INVESTMENT OPPORTUNITIES. The RA
shall introduce to Allied any loan or other investment opportunity that the
RA reasonably believes will satisfy Allied's established investment criteria
or designated product line (each such prospective loan or other investment
opportunity, an "Investment Opportunity") by timely delivery to Allied of a
written description of such Investment Opportunity in form and substance
acceptable to Allied.
(b) RIGHTS OF FIRST REFUSAL. The RA shall use its good faith best
efforts to refer to Allied all Investment Opportunities that the RA
reasonably believes will satisfy Allied's established investment criteria and
to assist Allied in completing the transaction. Within ten (10) business
days after receipt of a written description of an Investment Opportunity from
the RA, Allied will notify the RA as to whether or not Allied intends to
pursue the Investment Opportunity. If Allied so accepts the Investment
Opportunity, then the following terms of this Agreement shall control; if not
so accepted, then the RA may refer the Investment Opportunity to other
lenders.
(c) DUE DILIGENCE; DISCRETION. Allied will, to the extent it deems
necessary, perform its own due diligence investigation regarding each
Investment Opportunity, and Allied may enlist the RA's assistance in
gathering information about the Investment Opportunity and in preparing
transaction write-ups, in addition to that provided pursuant to Subsection
(a) above. Notwithstanding any other provisions of this Agreement, Allied
may, in its absolute discretion, refuse to consider any Investment
Opportunity.
(d) SUBLICENSE AGREEMENT. As a condition of Allied entering into this
Agreement, the RA shall enter into a Sublicense Agreement substantially in
the form attached hereto as Exhibit A granting the RA the non-exclusive right
to use certain of Allied's trade names, service marks, logos, emblems and
other indicia of origin.
(e) MARKET AREA FOR SBA 7(a) AND 504 LOAN PRODUCTS ONLY: The RA may
actively solicit new business using the licensed marks set forth in the
Sublicense Agreement attached hereto as Exhibit A in the Market Area as
defined in Schedule A.
The RA may not solicit Investment Opportunities or otherwise pursue new
business using the Licensed Marks outside the Marketing Area, but may be
compensated for each Investment Opportunity
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closed by Allied outside of the Marketing Area, if such Investment
Opportunity was introduced to Allied by the RA in accordance with the
procedures of Section 1(a) above. At Allied's sole discretion, Allied may
require that for Investment Opportunities introduced outside of the Marketing
Area, the assistance of another RA be enlisted for Due Diligence services as
described in Section 1(c) above. In that case, any compensation paid by
Allied pursuant to the Investment Opportunity will be shared by each RA, as
they shall mutually agree.
Allied reserves the right to develop relationships with other
organizations who are not RA's and do not license the Allied Capital Licensed
Marks for the purpose of referral of small business investment opportunities
("Referral Relationship"). If an Investment Opportunity is introduced to
Allied through a Referral Relationship, Allied may request the assistance of
another RA to be enlisted for Due Diligence services as described in Section
1(c) above. In that case, Allied will agree with the RA on the amount of
compensation to be shared with the Referral Relationship source, not to
exceed one percent (1%) of the loan amount.
Allied may have assigned other RA's that have sublicensed the Licensed
Marks to the Marketing Area as identified on Schedule A. These RA's may also
solicit within the Marketing Area. Allied will not assign any new RA that
has sublicensed the Licensed Marks other than those RA's named or to be named
as listed on Schedule A to the Marketing Area within the term of this
Agreement if the RA satisfies the Marketing Area Production Levels set forth
in Schedule A.
(f) MARKETING AREA FOR NON-SBA 7(a) AND 504 LOAN PRODUCTS: Allied has
not identified specific marketing areas for loan products other than SBA 7(a)
and 504 loan products, however, Allied reserves the right to restrict any
RA's solicitation activity using Licensed Marks to a specific geographic
location for non-SBA7(a) and 504 loan products at any time.
SECTION 2. COMPENSATION. For each Investment Opportunity Allied
accepts and thereafter actually closes and funds, Allied will pay to the RA
the amounts stated to be payable in accordance with the provisions set forth
in the Loan Fee Schedule, Payment Schedule and Rebate Provisions of Schedule
A. The RA shall not receive any commission, brokerage, finder's or other fee
or compensation from the borrower or other beneficiary in connection with any
such Investment Opportunity without Allied's prior written consent
SECTION 3. COVENANTS.
(a) STANDARDS OF OPERATION. The RA shall at all times during the term
of this Agreement operate the RA's business in compliance with all applicable
laws, rules and regulations and shall maintain all licenses or other
authorizations necessary for the operation of such business. The RA will not
knowingly operate the RA's business in any way which adversely reflects upon
Allied.
(b) NO TRANSFERS. Neither this Agreement nor the RA's rights and
duties hereunder may be sold, assigned or delegated by the RA without the
prior written consent of Allied.
(c) CONFIDENTIALITY. The RA shall at all times use and maintain in
confidence any proprietary information provided to the RA from Allied. For
this purpose, "proprietary information" means any information, oral or
written, that is not generally known outside of Allied that relates to its
marketing plans, customer lists, pricing methods, general financial
performance data, or to Allied's borrowers, but does not
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include proprietary information which is received by the RA from a third
party without restriction. The RA will receive and maintain all proprietary
information in confidence using all reasonable care and, except as provided
herein, shall not use proprietary information for the RA's benefit or
disclose it in whole or in part to any third party except as may be required
or contemplated in the course of the engagement hereunder. The RA agrees to
maintain the confidentiality of all proprietary information during the term
of the Agreement and for a period of two (2) years after its termination.
(d) INDEPENDENT STATUS. The RA shall at all times be an independent
contractor hereunder, rather than a co-venturer, agent, employee, franchisee
or representative of Allied. The RA shall work independently without
supervision by Allied, shall be responsible for its own taxes, shall not be
required to work on a continuing daily basis or on any specific work schedule
and shall not be provided with office space or administrative support by
Allied. Allied hereby acknowledges and agrees that the RA may engage in
other businesses and ventures.
(e) INDEMNIFICATION. Each of the RA and Allied shall indemnify,
defend and hold harmless the other from and against any and all losses
claims, damages, liabilities and expenses whatsoever, joint or several, as
incurred, as to which such other party may become subject under any
applicable federal or state law or otherwise, related to or arising out of or
based upon any act or omission of the RA or Allied, as the case may be, in
connection with a breach or misrepresentation or omission by such party of
such party's obligations hereunder or the representations contained herein or
in connection with any transactions contemplated hereby, and will reimburse
the other party for all legal or other expenses (including, without
limitation, attorneys' fees and expenses) as they are incurred in connection
with the investigation of, preparation for or defense of any pending or
threatened claim or any action or proceeding arising therefrom, whether or
not such other party is a named party in any such claim, action or
proceeding; provided, however, that no party shall have liability to the
other to the extent that any such loss, claim, damage, liability or expense
is found in a final judgment by a court of competent jurisdiction to have
resulted from such other party's willful misconduct or gross negligence.
SECTION 4. DURATION OF AGREEMENT.
(a) TERM. This Agreement shall take effect as of the date of
execution and shall remain in effect through December 31, 1998. Thereafter,
the term of this Agreement may be renewed for an additional one year period
if agreed to by both parties.
(b) TERMINATION. Notwithstanding any other provision hereof, Allied
may terminate this Agreement upon thirty days' prior written notice to the RA
on occurrence of any of one or more of the following events:
1. Unauthorized Loan Commitments RA indicates in any way that RA can
cause or commit ALLIED or any other entity now doing business using
name that includes words "Allied Capital", or any of their subsidiaries
or affiliates, to fund any loan or investment.
2. Non-Performance RA fails to perform or breaches any covenant,
obligation, term, condition, warranty or certification herein and fails
to cure such noncompliance within thirty (30) days after ALLIED gives
written notice thereof; provided, however, that such opportunity to
cure shall be limited to no more than two (2) such instances in any
twelve (12) month period.
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3. Falsehood RA knowingly makes, or has made, any materially false
statement or report to ALLIED in connection with this Agreement or
otherwise.
4. Breach of Covenants RA operates the business conducted hereunder in
a manner contrary to or inconsistent with the Licensed Marks or this
Agreement, and RA fails to cure such deficiency within thirty (30) days
after ALLIED gives written notice to cure.
5. Unauthorized Transfers RA attempts to transfer, in any way, this
Agreement in violation of the terms hereof.
6. Failure to Operate and Control RA abandons or surrenders control of
or fails to operate actively the business conducted under this
Agreement for seven (7) or more consecutive days, except for illness,
normal vacations and holidays.
7. Criminal Conviction RA or any person owning an interest in or any
key employee of RA is convicted of a felony, a crime of moral
turpitude, or any other crime or offense relating to the financial
services business.
8. Violation of Law RA fails, for a period of ten (10) days after
notification of non-compliance, to comply with any law or regulation
applicable to its financial services business, including without
limitation the Investment Company Act of 1940, as amended, the
Investment Advisers Act of 1940, as amended, and all other applicable
securities and broker-dealer laws.
This Agreement shall automatically terminate in the event of a material
breach of any terms of this Agreement. The RA's right to receive any
compensation pursuant to an Investment Opportunity presented by the RA and
duly accepted by Allied before such termination shall remain undiminished by
any such notice of termination.
SECTION 5. MISCELLANEOUS.
(a) NOTICES. Any notice required to be given hereunder shall be
sufficient if in writing, and sent by certified or registered mail, return
receipt requested, first-class postage prepaid, if to the RA at the address
listed in Schedule A hereto, and if to Allied, to its office located at 1666
K Street, N.W., 9th Floor, Washington, DC 20006.
(b) GOVERNING LAW. This Agreement, including any exhibits hereto,
shall be construed in accordance with and governed by the laws of the State
of Maryland, without regard to its principles of conflicts of law. Venue for
any adjudication hereof shall be only in the courts of the State of Maryland
or the federal courts in the State of Maryland, the jurisdiction of which
courts both parties hereby consent to as the agreement of the parties, as not
inconvenient and as not subject to review by any court other than such courts
in Maryland. Both parties intend and agree that the courts of the
jurisdictions in which the RA conducts business should afford full faith and
credit to any judgment rendered by a court of the State of Maryland against
the RA, and should hold that the Maryland courts have jurisdiction to enter a
valid, in personam judgment against the RA. The RA agrees that service of
any summons and/or complaint, and other process which may be served in any
action, may be made by mailing via registered mail or delivering a copy of
such process to the RA at its address specified below, and the RA agrees that
this submission to jurisdiction to consent to service of process are
reasonable and made for the express benefit of Allied.
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(c) WAIVER OF JURY TRIAL. Each party to this Agreement agrees that any
suit, action or proceeding, whether claim or counterclaim, brought or
instituted by any party hereto or any successor or assign of any party on or
with respect to this Agreement which in any way relates, directly or
indirectly, to the subject matter hereof or any event, transaction or
occurrence arising out of or in any way connected with this Agreement or the
dealings of the parties with respect thereto, shall be tried only by a court
and not by a jury. EACH PARTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL
BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING. The RA acknowledges and
agrees that this Section is a specific and material aspect of this Agreement
between the parties and that Allied would not enter into this Agreement with
the RA if this waiver of jury trial section were not a part of this Agreement.
(d) ENTIRE AGREEMENT; MODIFICATIONS AND WAIVERS; SEVERABILITY. This
Agreement represents the entire agreement and understanding by and between
Allied and the RA with respect to the services herein referred to, and no
representations, promises, agreements or understandings, written or oral, not
herein contained shall be of any force or effect. No change or modification
hereof shall be valid or binding unless the same is in writing and signed by
the party against whom such waiver is sought to be enforced; moreover, no
valid waiver of any provision of this Agreement at any time shall be deemed a
waiver of any other provision of this Agreement at such time or will be
deemed a valid waiver of such provision at any other time. In the event any
provision contained herein shall be held to be invalid, illegal or
unenforceable, it shall not affect any other provision hereof, and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein, unless to do so would cause this
Agreement to fail of its essential purpose.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
____________, 1998.
ALLIED CAPITAL CORPORATION
1666 K Street, N.W., 9th Floor, Washington, D.C. 20006
By:
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Name:
Title: Regional Associate
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