EXHIBIT
10.4
COMPUTER SYSTEMS AND
SOFTWARE
LEASE AND LICENSE
AGREEMENT
This COMPUTER SYSTEMS AND SOFTWARE
LEASE AND LICENSE AGREEMENT (“Agreement”) by and
between First Advantage Credco, LLC (hereafter referred to as
“Credco”), a Delaware Limited Liability Company and
RELS Reporting Services, LLC (hereinafter referred to as
“RELS”), a Delaware Limited Liability Company, is
effective January 1, 2008.
RECITALS
WHEREAS: RELS acts as a reseller of
consumer reports and other products and services to certain
entities with whom RELS has a written agreement to provide such
consumer reports and other products and services (“RELS
CUSTOMERS”).
WHEREAS: RELS Customers are in the
business of extending mortgage loans to consumers and requires
consumer reports from the three national consumer reporting
agencies in order to make lending decisions. Such reports are best
analyzed when merged and duplicate information is eliminated and
formatted in a user friendly manner.
WHEREAS: Credco is engaged in the
business of developing and licensing software that produces Merged
Reports and other products and services and leasing computer
systems capable of delivering them.
WHEREAS; Credco is also a consumer
reporting agency that provides information services to the mortgage
industry.
WHEREAS: Credco now wishes to
license software and lease computer systems to RELS sufficient to
allow RELS to obtain Merged Reports and other products and services
from the national consumer reporting agencies and other products
and services from other agencies pursuant to arrangements to be
made between RELS CUSTOMERS or RELS and such agencies and RELS
desires to license such system and Equipment from Credco on the
terms and conditions described in this Agreement.
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NOW THEREFORE, in consideration of the mutual
promises and other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as
follows:
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a)
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Licensed
Software – Licensed
Software means Credco’s Software which is a program that
(1) merges/combines information received from one or more
consumer reporting agencies, eliminates duplicate information and
presents a combined report in a standardized arrangement, and
(2) receives other information from various data providers and
presents such information in an easy-to-read format.
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b)
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Equipment - One or more dedicated Web servers and related
hardware and all other tangible items, including without
limitation, computers, peripherals, cables, interface devices,
tools and spare parts, together with associated supplies and
documentation, required to allow RELS to obtain Merged Reports and
other products and services through the Licensed
Software.
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c)
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Installation
Site - Credco offices in
Poway, California.
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d)
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Merged
Reports – Consumer
credit reports obtained from one or more of the national consumer
reporting agencies that are combined into one report containing
current and accurate information.
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e)
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Operative - In good working order and repair with the
appropriate functionality to allow RELS the ability to obtain the
Merged Reports and other products and services.
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f)
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Operational
Failure - The failure of
the leased Equipment and/or Licensed Software to be Operative
during RELS’s business hours arising from causes within
Credco’s control. The term Operational Failure shall not
include failures caused by (1) RELS’s failure to follow
proper procedures provided to it by Credco, (2) failure of
RELS’s equipment, or (3) the national consumer reporting
agencies or any other information provider or agency.
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a)
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Credco, in
consideration of payment of the monthly fees set forth in Exhibit A
hereto, hereby grants and RELS accepts a limited, non-exclusive
license, subject to the terms and conditions set forth herein to
use the Licensed Software and related “bug” fixes,
updates, enhancements, upgrades or re-releases, for the purpose of
furnishing Merged Reports and other products and services to RELS
CUSTOMERS and to no other party and for no other purpose. This
Agreement, any license and any program to which it applies may not
be assigned, sublicensed or otherwise transferred by RELS without
the prior written consent of Credco. Any attempted assignment by
RELS without such consent shall be void and this Agreement shall be
terminated.
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b)
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Except as
expressly stated herein, RELS agrees that it and its employees,
shall not: (i) use Credco's Licensed Software, other than
within the scope of the license granted by Credco under this
section; (ii) in any way alter, change, modify, adapt,
translate, or make derivative works of any Merged Reports or other
products and services delivered hereunder; (iii) sublicense
Credco's Licensed Software; or (iv) integrate, cross-reference
or otherwise use any data contained in Credco's Licensed Software
with data obtained from any third party.
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Credco, in consideration of payment
of the fee set forth in Exhibit A hereby leases to RELS all
Equipment necessary to run the Licensed Software and furnish the
Merged Reports and other products and services to RELS CUSTOMERS,
whether such Equipment is located at the Installation Site or
elsewhere, and agrees to provide RELS all Connectivity necessary or
appropriate for RELS to access the Equipment and Licensed Software
to enable it to furnish Merged Reports and other products and
services to RELS CUSTOMERS. RELS recognizes that the Equipment may
be used for other applications and on behalf of other clients of
Credco and RELS shall have no claim on any particular computer
Equipment or server by this lease. Credco shall not be responsible
for equipment needed by RELS to receive the Merged Reports and
other products and services, but only Equipment that makes the
Merged Reports and other products and services
available.
This Agreement is effective from the
date hereof and shall remain in force and effect for twelve months
and shall thereafter be automatically be renewed for additional 12
month terms until either party terminates this Agreement by giving
the other three months’ written notice prior to the term then
in effect; provided, however, that either party may terminate this
Agreement in the event of a material breach hereof by the other
party, which breach remains uncured thirty (30) days after
written notice of such breach is given to the breaching party. In
the event that either party hereto shall be adjudged insolvent or
bankrupt, or upon the institution of any proceedings seeking
relief, reorganization or arrangement under any laws relating to
insolvency, or if any involuntary petition in bankruptcy is filed
against such party and said petition is not discharged within sixty
(60) days after such filing, or upon any assignment for the
benefit of its creditors, or upon the appointment of a receiver,
liquidator or trustee of any of its assets, or upon the
liquidation, dissolution or winding up of its business
(“Event of Bankruptcy”), then the party affected by any
such Event of Bankruptcy shall immediately give notice thereof to
the other party, and the other party at its option may terminate
this Agreement upon written notice.
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5)
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Equipment
Installation
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Credco shall configure and use its
current Equipment or install new Equipment and Licensed Software
for RELS at the Installation Site. The cost of the hardware and
software configuration and installation shall be paid by Credco.
The Equipment provided for the use by RELS shall meet the current
and reasonably anticipated future volume requirements of RELS as
estimated in Exhibit B attached hereto and shall otherwise be
sufficient for provision of Merged Reports and other products and
services in accordance with the terms hereof for such estimated
volume. If specialized equipment is required by RELS and/or RELS
CUSTOMERS for a particular purpose, Credco may choose to charge
RELS an additional fee for such specialized equipment and RELS
agrees to pay such additional fee.
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a)
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Credco agrees
to make necessary modification in the Equipment and Licensed
Software, without charge to RELS, to comply with any changes that
may from time to time be introduced by the national consumer
reporting agencies or Credco’s other data providers. Credco
agrees to make necessary modification in the Equipment and Licensed
Software, with charge to RELS, to comply with any changes that may
from time to time be required by RELS and/or RELS
CUSTOMERS.
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b)
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In the event of
an Operational Failure, Credco shall assign Credco’s
qualified technical service personnel to resolve the Operational
Failure and bring the Equipment back into operation as soon as
possible. Priority shall be given by Credco to operational problems
which impair RELS’s ability to obtain Merged Reports or other
products and services. During Operational Failures, Credco shall
provide RELS, at a point designated by RELS from time to time, with
progress reports to RELS’s on-site designated person (or
position).
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7)
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Warranties, Disclaimers and
Indemnities
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a)
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Credco
Warranties – Credco hereby represents and warrants to RELS as
follows: (i) the Equipment and the Licensed Software shall be
capable of delivering Merged Reports in the volume requirements
estimated in Exhibit B attached hereto and will be free from
material defects and errors; (ii) Credco has the power and
right to lease the Equipment and license the Licensed Software to
RELS without violating the rights of any third party;
(iii) neither the Licensed Software nor the stated use thereof
by RELS does nor will infringe any patent, copyright, trademark,
trade secret, confidentiality or other proprietary right of any
third party; and (iv) the Licensed Software shall not contain
any backdoor, time bomb, logic bomb, or other code designed
(A) to permit access unauthorized by RELS to any RELS system,
Web site, computer or network or to any software installed on a
RELS computer or network (including the Licensed Software itself),
(B) to permit the Licensed Software or any RELS system, Web
site, computer or network to be locked or disabled by Credco or any
third party without RELS’s consent, (C) to cause the
Licensed Software to cease operating after a certain period of
time, or D) to cause damage to any of RELS’s hardware,
software or data.
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b)
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RELS Warranties
– RELS represents and warrants to Credco that (i) it has
the right and power to enter into this Agreement and that there is
no outstanding contract, commitment or legal impediment which may
limit, restrict or impair its ability to perform its obligations
hereunder; RELS shall use the Licensed Software and the Merged
Reports and any other products and services RELS CUSTOMERS or RELS
obtains therefrom on behalf of RELS CUSTOMERS in full compliance
with all applicable laws, including without limitation the Fair
Credit Reporting Act (FCRA) and related state laws and the Real
Estate Settlement Procedures Act; (iii) RELS shall resell the
Merged Reports only to RELS CUSTOMERS in connection with a
permissible purpose as defined in FCRA and shall fully comply with
its obligations as a reseller under FCRA; and (iv) RELS is in
full compliance with all other applicable laws and
regulations.
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c)
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Information “as is”
– RELS understands that the accuracy of information processed
from third parties and furnished to RELS through the Licensed
Software is not guaranteed by Credco. Credco shall have no
responsibility for the accuracy, currency or quality of
any
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Merged Reports or any other products
or services (or the information contained therein) or other
information received through the Licensed Software and RELS accepts
all such data “as is.”
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d)
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RELS Indemnity
– RELS agrees to indemnify and hold Credco harmless from any
and all expenses, costs, claims and damages, including attorneys
fees incurred by Credco or its affiliated companies derived from,
arising out of, or relating to, (i) any violation of the FCRA
by RELS, its employees or agents, (ii) improper publishing or
disclosure of information contained in a report obtained through
the Licensed Software by its employees or agents or (iii) any
breach of any representation, warranty or covenant of RELS
hereunder.
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e)
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Mutual
Indemnification. Both parties shall defend, indemnify and hold
harmless the other, together with its officers, directors,
employees, agents, parent, subsidiaries and other affiliates, from
and against any and all damages, costs, liability, and expense
whatsoever (including attorneys’ fees and related
disbursements) incurred by reason of (i) any failure by a
breaching party to perform any covenant or agreement set forth
herein; (ii) injury to or death of any person or any damage to
or loss of property which is due to the negligence and/or willful
acts of the breaching party; or (iii) any breach by the
breaching party of any representation, warranty, covenant or
agreement under this Agreement; provided, however, that
Credco’s maximum indemnification of RELS in connection with
this Agreement, whether for breach of contract, tort or otherwise,
shall not exceed $250,000.00 in the aggregate. The existence of
multiple claims shall not enlarge the limit of Credco’s
indemnification hereunder.
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f)
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Adverse Action
warranty – RELS warrants that, when it obtains Merged Reports
or any other product or service through the Licensed Software for
resale to RELS CUSTOMERS, RELS will instruct RELS CUSTOMERS not to
use Credco’s name, logo, and address or telephone number on
any disclosures to the consumer, including, but not limited to, any
adverse action notice under FCRA. “Adverse action” has
the same meaning as the definition of that term under the FCRA. The
adverse action notice provided by RELS CUSTOMERS under the FCRA
shall include the name, address and telephone number of
RELS.
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8)
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Limitations of Liability
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In no event will Credco be liable
for any lost profits, or any consequential or incidental damages
alleged to be incurred or actually incurred by RELS, RELS CUSTOMERS
or anyone claiming through RELS or RELS CUSTOMERS even if Credco
has been advised of the possibility of damages. The cumulative
liability of Credco to RELS, RELS CUSTOMERS or anyone claiming
through them for any and all claims relating to the Licensed
Software and Equipment or any information furnished hereunder by
Credco, in contract, tort or otherwise, shall be limited to
$250,000.00 in the aggregate, unless caused by Credco’s gross
negligence or willful misconduct, in which case Credco’s
liability for such gross negligence or willful misconduct will be
limited to the amounts paid by RELS to Credco for the three
(3) months immediately preceding the occurrence giving rise to
such claim hereunder. The existence of multiple claims shall not
enlarge the limit of Credco’s liability hereunder. CREDCO
MAKES NO OTHER WARRANTIES, EITHER EXPRESS OR IMPLIED, UNDER THIS
AGREEMENT, AND HEREBY DISCLAIMS ALL
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IMPLIED WARRANTIES, INCLUDING ANY
WARRANTIES REGARDING MERCHANTABILITY, USAGE OF TRADE OR FITNESS FOR
A PARTICULAR PURPOSE. TO THE MAXIMUM EXTENT ALLOWED BY APPLICABLE
LAW, CREDCO SHALL NOT BE LIABLE TO RELS FOR ANY INDIRECT, SPECIAL,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES OR LOST PROFITS.
RELS acknowledges that by entering
into this Agreement, it is not acquiring any right, title or
interest in the source code relating to the Licensed Software
except for the right to use it as provided in this Agreement. The
source code relating to the Licensed Software is a trade secret of
Credco and is not generally known to the public or to other persons
and RELS agrees to not disclose to any third person or entity said
information.
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10)
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Proprietary Protection
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Credco has sole and exclusive
ownership of all rights, title and interest in and to the Licensed
Software, all copies thereof, and all modifications and
enhancements thereto subject only to the right and license
expressly granted to RELS herein. This Agreement does not provide
RELS with title or ownership of the Licensed Software, but only a
right to use the Licensed Software as provided herein.
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11)
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Independent Contractor
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The relationship of Credco to RELS
hereunder shall be that of Licensor-Licensee and Credco shall be an
independent contractor. Consequently, neither party nor any of its
employees or agents shall have any authority to act for or on
behalf of the other party or to bind the other party without its
express approval in writing. Neither party nor any of its employees
shall be considered employees of the other and shall not have
employee status for any purpose including without limitation,
worker’s compensation or any employee benefit plan applicable
to either party’s employees generally. Each party shall be
responsible for payment of all taxes including Federal, State and
local taxes arising out of its own activities in connection with
this Agreement including social security tax, unemployment
insurance tax, and any other taxes or business license fees that
may be applicable to its employees or agents.
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12)
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Trade
Secret Information
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RELS acknowledges and agrees that
the Licensed Software constitutes a trade secret belonging to
Credco as the term trade secret is utilized under the provisions of
the Uniform Trade Secret Act, California Civil Code
Section 3426 et. Seq. (the “Credco Confidential
Information”).
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13)
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Ownership
and Confidentiality.
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a)
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Confidential Information. Both
parties hereto shall keep confidential, and will cause its
employees to keep confidential, all Confidential Information, as
defined below, obtained from the other party (the “Disclosing
Party”). The parties also agree that all information related
to the Agreement is presumed to be Confidential Information unless
the Disclosing Party indicates in writing that the information is
not confidential or proprietary. Both parties acknowledge that, in
the course of its relationship with the other that it and its
employees will acquire or have access to information of various
kinds concerning the other party’s business, as well as the
businesses of its affiliates. Both
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parties acknowledge that all
information disclosed by the Disclosing Party to the other party,
its employees and/or agents ( the “Recipient”), for the
purposes of the Agreement(s), or which comes to the attention of
Recipient, its employees, during the course of such Agreement(s),
is confidential in nature, constitutes a valuable asset of
Disclosing Party , is proprietary to the Disclosing Party, and is
properly the subject of protection. Both parties also acknowledge
that Rels has a responsibility to its customers to keep
customers’ records strictly confidential and proprietary.
Both parties further acknowledge that the Disclos
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