Referral Partner Membership Program
Terms and Conditions
These Terms and Conditions (“Terms and Conditions”) are incorporated into and made a part of the Referral Partner Membership Program Agreement (“Agreement” or “Membership Agreement”) by and between ARF Financial, LLC, a California limited liability company (“ARF”) and the referral partner (“Member”) named in the Agreement.
1. Definitions. Capitalized terms used in the Agreement which are not otherwise defined in the Agreement and used herein shall have the meaning ascribed to them as follows:
“Advance” or “Additional Advance” means the Loan or additional Loan provided to a Borrower or Affiliated Borrowing Group. Each Advance has its own terms and amortization schedule and the Loan Amount of each Advance or Additional Advance will be used to determine the Membership Benefits provided for herein.
“Affiliated Borrowing Group” means all loans to any group of borrowing entities that share common ownership or guarantors.
“Agreement” or “Member Agreement” means the Referral Partner Membership Program Agreement entered into between Member and ARF and includes these Terms and Conditions.
“Annual Renewal Fee” shall mean $1000 for CEO’s Circle Members and $500 for Leadership Circle Members, except as provided herein. The Annual Renewal Fee shall be due in on each renewal of the Term of this Agreement. The Annual Renewal Fee shall be due January 1, 2023 and each year thereafter on renewal of the Term. The Annual Renewal Fee is nonrefundable in the event the Agreement is terminated by Member or as a result of Member’s material default of the terms of this Agreement.
“Associate Member” means a Member that has entered into an Associate Member Agreement. An Associate Member who joins as either a CEO’s Circle Associate Member or a Leadership Circle Associate Member is considered a COI Member of Member if they have entered into the Associate Member Agreement referencing Member as their COI Member.
“Associate Member Agreement” means a Referral Partner Associate Membership Program Agreement entered into between ARF and an Associate Member.
“ARF Rep” means the ARF Sales Representative that has been designated and assigned to Member in accordance with the Agreement and these Terms and Conditions.
“Borrower(s)” or “Merchant(s)” means a Referral that has a Loan funded under this Agreement.
“Cash Out” means the amount of funds provided to a Borrower for a Loan less the loan proceeds used to pay off an existing Loan.
“CEO’s Circle Member” means the Member that has joined the CEO’s Circle Member Program and has entered into this Agreement as a CEO’s Circle Member.
“CEO’s Circle Associate Member” means an Associate Member that has entered into an Associate Member Agreement and has joined the CEO’s Circle Associate Member Program.
“Co-Branded Direct Mail” shall mean a one page marketing “slick” in either a post card or letter format which will have ARF’s and Member’s logo and information which is prepared by, approved and provided to Member as a Marketing Service by ARF. The Co-Branded Direct Mail will describe ARF’s lending programs which a prospective customer may obtain through Member’s Referral. The Co-Branded Direct Mail will be mailed to the Leads assigned to Member by ARF on a monthly basis as provided herein.
“COI” means the “Circle of Influence” Member Programs established under the Agreement and these Terms and Conditions.
“COI Override Fee” means the fee which will be earned by a CEO’s Circle Member or a Leadership Circle Member for Referrals on Loans made by such Member’s COI Network who are either CEO’s Circle Members or Leadership Circle Members as set forth in the Agreement or CEO’s Circle Associate Members or Leadership Circle Associate Members under an Associate Member Agreement. No COI Override Fee will be earned for Loans funded for Referrals from COI Members who are Founding Circle Members. COI Override Fees are only paid on Renewals for a term of 3 years from the initial Borrower Loan.
“COI Member Agreement” means a Member Agreement or an Associate Member Agreement that has been entered into by a COI Member of Member and such COI Member has joined the Member’s COI Network at any Membership level.
“COI Member” means a referral partner that is exclusively recruited by Member, has joined as a COI Member and has signed a COI Member Agreement designating Member as its COI Network Leader.
“COI Network” means all COI Members of a COI Network Leader who are in “good standing” as a COI Member (i.e. have paid and are current on their Membership Fees, as applicable, and are in compliance with the terms of their COI Member Agreement). Member’s COI Network only include COI Members who Member has recruited to Member’s COI Network and who have joined as a Member and signed a COI Member Agreement referencing Member as the COI Network Leader and have paid the Network Fee and the Membership Fees and are in good standing. COI Members of Member may have their own COI Network and be an COI Network Leader. Member shall receive no Membership Benefits associated with such COI Member’s COI Network.
“COI Network Leader” is the Member that is referenced in a Validated COI Member Agreement as the COI Network Leader to such COI Member.
“COR” means the “Circle of Rewards” fees and bonuses paid under the Member Benefits established under this Agreement and these Terms and Conditions.
“COR Performance Bonus” means a volume incentive measured on a calendar year basis of $5,000 per $500,000 in Loans originated as Referrals from a Member up to a total of $2,500,000 or an aggregate COR Performance Bonus of $25,000. The COR Performance Bonus period commences on the Validation Date and resets on January 1 of each year during the term of this Agreement. Referrals included in the COR Performance Bonus are only Referrals directly made by Member and do not include Referrals made by Member’s COI Network.
“COR Network Bonus” means the sum of $5,000 for every 50 COI Members who have entered into COI Member Agreements listing Member as their COI Network Leader and who have been Validated by ARF and are active and in good standing in either (i) the CEO’s Circle Member Program or the Leadership Circle Member Program, (ii) or the CEO’s Circle Associate Member Program or the Leadership Circle Associate Member Program for Associate Members. If any COI Members are not in good standing (i.e. are current on their Membership Fees and are in compliance with the terms of their COI Member Agreement), they shall not be counted for purposes of the COR Network Bonus. COI Members who have joined Member’s COI Network as a Founding Circle Member after January 1, 2022, shall not be counted towards the COR Network Bonus .
“Fee Cap” means the limit on the amount of Referral Fees and Residual Fees paid to Member in connection with a Loan(s) referred by Member to an Affiliated Borrowing Group. The “Fee Cap” shall be $36,000 for CEO’s Circle Members, $31,500 for Leadership Circle Members, and $13,500 for Founding Circle Members.
“Founding Circle Member” means the Member that has entered into this Agreement as a Founding Circle Member.
“Leadership Circle Associate Member” means a Member that has entered into an Associate Member Agreement as a Leadership Circle Associate Member.
“Leadership Circle Member” means the Member that has entered into this Agreement as a Leadership Circle Member.
“Lead(s)” means the information relating to a prospective borrower that has been acquired by ARF which may include but not be limited to the business name, address, phone number, owners name, time in business and sales information. Lead(s) assigned to Member pursuant to the applicable Member Program will be exclusive to Member for purposes of developing Referrals under the Agreement.
“Lender(s)” has the meaning as set forth in the Agreement.
“Lending Services” has the meaning as set forth in the Agreement.
“Loan” means a loan funded to a Borrower or Affiliated Borrowing Group, including a Renewal, either directly by ARF or an affiliate of ARF or through ARF’s Lending Services for Loans made by ARF’s partner Banks, based upon a Referral made by Member after the Validation Date.
“Loan Amount” means the principal amount of a Loan made to a Borrower or Affiliated Borrowing Group but in case of an Advance or a Renewal, only the Cash Out portion is included for purposes of determining the Membership Benefits.
“Loan Products” means the specific types of Loans offered by ARF and in connection with its Lending Services.
“Marketing Services” means collectively the Leads, Member Landing Page, Member URL, Member Application Registration Page, Co-Branded Direct Mail and Product Flyers which are applicable to the Membership Benefits which Member has elected to participate in under the Agreement. As provided in Section 4(d) below, Leads and Co-Branded Direct Mail are being discontinued from the Marketing Services as of January 1, 2022.
“Member Application Registration Page” means the ARF loan application web page that will be “linked” to the Member via either the Member URL or the Member Landing Page for all Referrals who complete the loan application/registration from such web page.
“Member Benefits” or “Membership Benefits” means collectively the Referral Fees, the Residual Fees, the COI Override Fee, COR Network Bonus, Share of COI Network Fee, COR Performance Bonus and Marketing Services which Member will receive for being a CEO’s Circle Member or Leadership Circle Member. If Member fails to pay the Membership Fees within 10 days of their due date or has been notified by ARF that it is no longer in compliance with the terms of the Agreement, Member shall no longer be entitled to the applicable Membership Benefits and shall instead participate as a Founding Circle Member for all Membership Benefits and Marketing Services. If Member’s non-compliance is as a result of a material breach of this Agreement, Member may be terminated in which case Member shall receive no future Membership Benefits, including but not limited to Residual Fees.
“Member Fee(s)” or “Membership Fee(s)” means collectively, the Network Fee and the Annual Renewal Fee required to be paid by Member in exchange for the Membership Benefits and Marketing Services associated with the applicable Member Program which Member has elected in the Agreement. As provided in Section 4(d) herein, the Monthly Membership Fee is discontinued. For the purpose of determining if a COI Member of Member is in good standing and counted as a COI Member, the “Member Fee(s)” or “Membership Fee(s)” also refers to the Network Fee and the Annual Renewal Fee as described in the Associate Member Agreement.
“Member Landing Page” shall mean a unique web page which will be “co-branded” to Member and ARF and which may be utilized by Member Referrals to register as a “merchant” and apply for a Loan. Prospective merchants who register through the Member Landing Page and apply for a loan will be considered to be Member Referrals subject to the qualification requirements set forth in the Agreement. The Member Landing Page will be owned by ARF and be on a standard template that will contain Members general information, tradename and trademarks but any further customization shall be approved by ARF at its sole discretion.
“Member URL” shall mean a unique “URL” providing an identifier link to ARF’s merchant and loan application portal which will identify the merchant as a Member Referral after the merchant completes the registration and application for a Loan.
“Member Program” means either the CEO’s Circle Member Program, the Leadership Circle Member Program or the Founding Circle Member Program which Member has joined and is applicable to the Member pursuant to the terms of the Agreement and these Terms and Conditions.
“Merchant Agreement” means the loan agreement entered into with a Borrower and any amendments thereto covering Additional Advances and Renewals.
“Monthly Fee” or “Monthly Membership Fee” shall mean the sum set forth in the Agreement for the applicable Membership agreed to by the Member, i.e. $100 per month for CEO’s Circle Members and $50 per month for Leadership Circle Members. The first Monthly Fee is due on the first day after the first full month following the Effective Date of the Agreement and each month thereafter during the term and any extended term. For example, if the Validation Date of an Agreement is May 15, then the first Monthly Fee will be due on July 1. The Monthly Fee will either be debited from Member’s Bank Account or charged to Member’s Credit Card Account as authorized and provided in the Agreement. In accordance with Section 4(d) below, the Monthly Membership Fee is discontinued as of January 1, 2022.
“Network Fee” shall mean a one-time Membership Fee to be paid by Member for participation as either a CEO’s Circle Member or the Leadership Circle Member which is due upon execution of the Agreement in the amount set forth in the Agreement for the applicable Member Program agreed to by the Member, i.e. $1,000 for CEO’s Circle Members and $500 for Leadership Circle Members. The Network Fee will either be debited from Member’s Bank Account or charged to Member’s Credit Card Account as authorized and provided in the Agreement. The Network Fee is nonrefundable in the event that this Agreement is terminated by Member or due to a material default by Member and is fully earned when paid to ARF.
“Product Flyers” shall mean a one page marketing slick approved by ARF that will be Co-Branded with ARF and CEO’s Circle Members and provided to Member to support its marketing efforts under this Agreement.
“Referral” has the meaning as defined in Section 3 below.
“Referral Fee” means the applicable percentage of Loan Amount which Member will receive based upon the applicable Membership Benefits which Member has elected to participate in under this Agreement based upon Referrals made by Member which result in funded Loans as more particularly described in these Terms and Conditions.
“Renewals” has the meaning as defined in Section 6 below.
“Residual Fee” means the applicable percentage of Loan Amount which Member will receive based upon the applicable Membership Benefits which Member has elected to participate in under this Agreement based upon Renewals of Loans funded for Referrals made by Member which result in funded Loans as more particularly described in these Terms and Conditions. Residual Fees are only paid on Renewals for a term of 3 years from the initial Borrower Loan.
“RNCO” means an amendment to the Borrower Loan at the request of the Borrower that involves modification or extension of the payment terms where no additional “cash out” is being paid directly to the Borrower in connection with such amendment.
“Share of COI Network Fee” means 50% of the Network Fee paid by a COI Member who is in Member’s COI Network. Member will receive its Share of COI Network Fee paid to ARF on the 15th day of the month following the month of such COI Member’s becoming a COI Member and payment of the initial Network Fee. Notwithstanding anything contained herein to the contrary, if the COI Member has an agreement with ARF to pay a discounted Network Fee based upon such COI Member’s affiliation with another membership group or otherwise, the Share of COI Network Fee for such COI Member shall be 0%.
“Term” and “Initial Term” shall have the meaning set forth in Section 11 of the Terms and Conditions.
“Validation” or “Validated” shall mean ARF’s approval of Member or a COI Member as an “Member” under an applicable Member Program in its sole and complete discretion based upon such Member providing all required information in the Agreement and ARF validating the same as being accurate and payment of all applicable Network Fees and confirmation that a Member is not already a Member or is in another Member’s COI Network. ARF may perform public records background checks on prospective Members to determine their business and personal reputation and may reject or terminate the Membership of any Member in the event that the Member’s personal or business reputation is not in keeping with ARF’s standards or the Member has committed or been accused of fraudulent, dishonest or criminal conduct in ARF’s sole and complete discretion.
“Validation Date” shall mean that date that ARF completes the Validation and executes this Agreement as set forth herein.
2. Membership Benefits Not Applicable to Referrals Made Prior to this Agreement.
The Agreement supersedes and amends any previous referral partner agreement entered into between ARF and Member. The applicable Membership Benefits set forth in this Agreement (including but not limited to the Referral Fees and Residual Fees) are only applicable to Referrals of new Borrowers made after the Validation Date and shall not apply to Borrowers or Affiliated Borrowing Groups that were previously referred by Member under a previous referral agreement with ARF. All Referrals of Borrowers or Affiliated Borrowing Groups under a prior referral agreement will be treated as Founding Circle Member Referrals for determination of the Membership Benefits.
3. Marketing of Loans; Lending Services; Referral’s To ARF.
Member agrees to work with the ARF representative that ARF designated from time to time in promoting and marketing Loans to be made by either ARF or Lenders through ARF’s Lending Services. Such promotion and marketing shall consist of informing the prospective Borrower of the availability of Loans, including marketing to the Leads provided to Member herein and through use of the Marketing Services applicable to the Member Program which Member has elected. In connection therewith, Member may provide to a prospective Borrower any brochures or advertising material which ARF has provided to Member for such purpose, including the Co-Branded Direct Mail. If a prospective Borrower, or Affiliated Borrowing Group, indicates interest in a Loan and Loan Products (i.e. it has a need for funding within 90 days) and requests that it be contacted by an ARF Rep, Member agrees to provide to ARF, through its designated ARF Rep, the name, address, email address and phone number of the prospective Borrower via email or by phone to the designated ARF Rep for such purpose or such referral can be made and attributed to Member through the prospective Borrower’s registration with ARF via the Member URL, Member Landing Page or the Member Application Registration Page (“Referral”). A “Referral” shall not be attributed to Member as a “Referral” until a completed registration and loan application is made by the Merchant with Member as the source. Member acknowledges that this “first in time” requirement is necessary as prospective Borrowers, or Affiliated Borrowing Groups, may be working with other Members and/or ARF Reps concurrently or may come to ARF through prospective Borrower’s web searches and other ARF marketing efforts. ARF will use commercially reasonable efforts to track Referrals through its website and merchant portal for proper attribution, however, ARF’s determination of such “attribution” for a Referral from a Member shall be final and binding on the Member. Member shall not make any representations to the prospective Borrower as to the likelihood of approval for a Loan, the amount of financing or any prospective loan rates or terms other than as approved by ARF in writing. Member acknowledges that in certain states, if Member provides to a prospective Borrower a verbal or written quote, it is obligated to provide additional disclosures relating to the cost and terms of the financing. Therefore, any specific quote relating to ARF’s Loan Products must be made by ARF directly to the prospective Borrower. Member shall not accept or take any application for a Loan from such prospective Merchant borrower or any other information for such purpose from the prospective Merchant borrower other than the contact information as referenced herein. Member has no authority to bind ARF or any Lender in connection with its marketing and promotion services contemplated herein. Upon Validation of the Agreement, Member will be assigned an ARF Rep to work with directly to discuss prospective Referrals. If Member has been introduced to ARF by an ARF Rep as listed in the Agreement, the ARF Rep will be Member’s designated “ARF Rep” for purposes of this Agreement. ARF may change the designated ARF Rep at any time in its sole discretion. Member shall, along with its agents and employees, conduct itself in a professional manner consistent with first class industry standards, at all times in representing ARF, its Loan Products and Lending Services. Any Member that has been accused of or committed an act of fraud, dishonesty or criminal conduct may be terminated as a Member by ARF immediately in its sole and complete discretion.
4. Marketing Services; Leads; Right of First Offer for Lending Services.
ARF shall provide to Member the Marketing Services corresponding to the applicable Member Program which Member is entitled to receive from ARF subject to the terms hereof.
(a) Leads. ARF shall provide to Member on a monthly basis (commencing in the month that the first Monthly Fee payment is due) the number of unique Leads which Member is entitled to under the applicable Member Program. The Leads will be in business categories which ARF has approved for Lending Services, however, ARF does not otherwise warrant the accuracy or completeness of any Lead which ARF has acquired internally or through third party vendors or the likelihood that the Lead will result in a Referral or closed Loan. ARF will provide Member with all information it has on such Leads by providing Member with a monthly Lead list. The Leads Member receives under this Agreement are cumulative for the length of time that Member remains in good standing in the Member Program. ARF will “direct mail” on a monthly basis on ARF and Member’s behalf the Co-Branded Direct Mail to Member’s Leads. Member is encouraged to exhibit sound marketing practices by “calling behind” the Leads at its discretion. If a Lead is determined to be not valid (i.e. it contains materially incorrect information or the Lead is no longer in business), Member shall promptly notify ARF and ARF will replace such Lead(s) with substitute Lead(s) for the next monthly direct mailing. Leads will generally be mailed by the 10th day of each month but ARF is not required to complete the mailing by any particular day of the month. Member acknowledges that it is receiving a material marketing benefit through the Leads in that the Co-Branded Direct Mail cost incurred by ARF, on a cumulative basis, will exceed the Membership Fees paid by Member during the term of the Agreement. Member may elect to “opt out” from receiving the Leads and the Co-Branded Direct Mail upon not less than thirty (30) days written notice to ARF but Member must continue to pay the Membership Fees, including the Monthly Fee in order to receive the other Membership Benefits attributed to the Member Program they have elected. Effective as of January 1, 2022, no further Leads are being provided to Member as provided in Section 4(d) below. This provision shall continue to govern Leads provided prior to January 1, 2022.
(b) Use of Leads; ARF Right of First Refusal. Member covenants and agrees that all Leads will be used by Member on an initially exclusive basis only for the purpose set forth in this Agreement for the purpose of marketing ARF’s lending programs and Lending Services. The Leads are the property of ARF and may not be resold or used by Member for any other purpose except as permitted under this Agreement. The Leads shall be maintained by Member as “confidential.” Member shall utilize the Leads initially to market ARF’s Lending Services and products and Member agrees that Member will provide ARF with the right of first refusal for unsecured working capital loans and will not utilize the Leads for any competitive products to ARF such as “merchant cash advance” or unsecured working capital loans and products similar to ARF’s Loan Products and Lending Services. This means that the Member must submit the Lead as a Referral to ARF FIRST, and ARF must “decline” the Referral, before offering the Lead any other product or service or introducing the Lead to any ARF competitor. Member may offer the Lead financial services and products which are not competitive with ARF such as commercial real estate loans, SBA small business loans or equipment lease financing. If Member violates the terms of this provision, ARF may elect to terminate Member as a Member and terminate Members participation in the applicable Program in which case Member will receive no future Membership Benefits including but not limited to Residual Fees that may be earned on Referrals made prior to termination. ARF may from time to time audit Leads to ensure Member’s compliance with these obligations. As Member “calls behind” Leads, Member will make note of “do not call” responses and report those Leads to ARF so that ARF can enter them as “do not call” in its database. It is Members’ responsibility to comply with the Telephone Communications Privacy Act with respect to all Lead “call behinds” on Co-Branded Direct Mail and other marketing and Member shall indemnify and hold ARF harmless with respect to any violations. Effective as of January 1, 2022, no further Leads are being provided to Member as provided in Section 4(d) below. This provision shall continue to govern Leads provided prior to January 1, 2022.
(c) Other Marketing Services. ARF shall provide to Member the Member URL, Member Landing Page, Member Application Registration Page, the Co-Branded Direct Mail and the Product Flyers based upon the Program level which Member has elected. The Co-Branded Direct Mail and Product Flyers shall also be provided to Member in digital form for Member to distribute via email or other medium at its discretion. Effective as of January 1, 2022, ARF’s obligation to provide Co-Branded Direct Mail and Leads is discontinued and terminated as provided in Section 4(d) below.
(d) Discontinuation of Monthly Membership Fees, Leads and Co-Branded Direct Mail, Annual Renewal Fee. Effective as of January 1, 2022, ARF will no longer provide the Leads and Co-Branded Direct Mail and the Monthly Membership Fees required to be paid by CEO’s Circle Members and Leadership Circle Members shall be discontinued and are not required to be paid by such Members to remain in good standing in the applicable Membership Programs. The Initial Term of the Membership Agreement for such Members is extended to December 31, 2022 and no Membership Fees shall be due and payable prior to renewal of the Membership Agreement for an extended term. The CEO’s Circle Members and Leadership Circle Members shall continue to receive all other Membership Benefits through the initial Term as extended, except for the Leads and Co-Branded Direct Mail. The Annual Renewal Fee shall be due on January 1, 2023 and each year thereafter upon renewal of the Term. If Member has previously entered into an addendum to the Agreement which provided for a discount of the Network Fee based upon Member being an affiliate of a professional training program or other group, the Annual Renewal Fee for such Member shall be one-half of the Annual Renewal Fee set forth in this Agreement.
5. Membership Fees; COI Network.
If Member has elected to join a Member Program that requires Membership Fees (i.e. CEO’s Circle Member Program and Leadership Circle Member Program), Member acknowledges that it is making a commitment to pay the Membership Fees on a timely basis. In consideration for continuation of the Membership Benefits for each renewal Term, Member will make timely payment of the Annual Renewal Fee. For purposes of determining the Membership Benefits, employees or subagents of Member or a COI Member are not considered to be in a Member’s COI Network unless they separately sign a COI Member Agreement and pay the applicable Network Fees associated with the Member Program selected. After the Initial Term, if Member elects not to continue at an elevated level by paying its Annual Renewal Fee, Member shall continue as a Founding Circle Member, and Member shall no longer receive a COI Override Fee, Share of COI Network Fee, COR Performance Bonus and its Referral Fees, Residual Fees and Marketing Services shall be reduced to the Founding Circle Member level. If Member fails to pay the Annual Renewal Fee in a timely manner upon each renewal of the Term of this Agreement, then Member’s Membership Benefits shall be reduced to the Founding Circle Membership Benefits including but not limited to all future Referral Fees and Residual Fees after the date of nonpayment. Except as provided above, Member will receive the Referral Fees and Residual Fees earned corresponding to the applicable Member Program as provided in the Agreement and these Terms and Conditions. Member will be given 10 calendar days (from the date such payment was due) to cure a non-payment before the reduction of Membership level goes into effect. However, Member may be “reinstated” to their prior Member Program level if within 30 calendar days of the date their payment was due, Member pays to ARF an amount equal to 25% of its Annual Renewal Fee as a “Reinstatement Fee” along with any past due Annual Renewal Fee, its status and Membership Benefits will be restored in full for the balance of the applicable Term. So long as Member remains in good standing as either a CEO’s Circle Member or a Leadership Circle Member, Member will be entitled to receive the COI Override Fee, Share of COI Network Fee, COR Network Bonus, and COR Performance Bonus earned for COI Members that have been recruited by Member in the Member’s COI Network. If a Member “opts out” of either the CEO’s Circle Member Program or the Leadership Circle Member Program at the end of the Initial Term or any time thereafter or fails to pay its Annual Renewal Fee when due (and is not reinstated as provided above), then Member shall become a Founding Circle Member and receive only the Founding Circle Member Benefits going forward for all purposes, including but not limited to having all Referral Fees and Residual Fees for prior Referrals paid at the Founding Circle Member Benefits level. If Member then elects to rejoin as a CEO’s Circle Member or a Leadership Circle Member, only new Referrals and new COI Members added (after the date of Validation of the new Agreement) will be counted for determination of the Member Benefits under the new Agreement.
6. Referral Fees; Residual Fees and COI Override Fees; Fee Caps per Affiliated Borrowing Group; Flex Pay and IO Flex Pay Loans.
(a) The Referral Fee will be paid (i) based upon the Loan Amount of the initial Loan made and (ii) the Cash Out portion of all Additional Advances, including line of credit draws, renewals, or re-financings (collectively, “Renewals”) that are made to the referred Merchant for a period of three (3) years from the date of the initial Loan advance (hereinafter “Residual Fees”). No Residual Fees (or COI Override Fee associated with such Renewal to the COI Network Leader) shall be due after three (3) years from the date of the initial Advance to the referred Merchant. The Residual Fees shall be subject to the same qualification requirements as those that apply to Referral Fees as set forth herein and in Section 9 below. The Referral Fee or the Residual Fee shall be paid based upon the Loan Amount for a new Loan or Cash Out portion of an Advance or a Renewal made to an “Affiliated Borrowing Group.” The Cash Out portion of each Loan or Advance shall determine the applicable Referral Fee or Residual Fee. “Affiliated Borrowing Group” means all loans to any group of borrowing entities that share common ownership or guarantors.
(b) The Membership Benefits (i.e. Referral Fees and Residual Fees) for IO Flex Pay Loans of $50,000 or more are as follows: (i) for CEO’s Circle Members, 3% on Loan funding and 3% on “Rollover” to a fully amortizing loan, (ii) for Leadership Circle Members, 3% on Loan funding and 2% on “Rollover” to a fully amortizing loan. The Membership Benefits (i.e. Referral Fees and Residual Fees) for IO Flex Pay Loans of less than $50,000 are as follows: (i) for CEO’s Circle Members, 3% on Loan funding and 1% on “Rollover” to a fully amortizing loan, (ii) for Leadership Circle Members, 3% on Loan funding and 1% on “Rollover” to a fully amortizing loan. For example, for a CEO’s Circle Member Referral of a $100,000 Loan on a 20/98 Week IO Flex Pay Loan (20 Week Initial Term of Interest Only Payments and 98 additional Weeks Extended Term of amortizing payments), if the principal is not paid in Week 20 of the Initial Term, the Member will earn 3% on Loan funding and 3% upon “roll-over” of the Loan to the Extended Term.
(c) The Membership Benefits (i.e. Referral Fees and Residual Fees) for Flex Pay Loans with an initial term of 39 Weeks or more are as follows: (i) for CEO’s Circle Members, 6% on Loan funding of $50,000 or more, 4% for Loan funding of less than $50,000, (ii) for Leadership Circle Members, 5% on Loan funding of $50,000 or more, 4% of Loan funding of less than $50,000. The Membership Benefits (i.e. Referral Fees and Residual Fees) for Flex Pay Loans with an initial term of less than 39 Weeks are as follows: (i) for CEO’s Circle Members (a) for Loan funding of $50,000 or more, 3% upon Funding, 3% upon “rollover” to the Extended Term, and (b) for Loan funding of less than $50,000, 3% upon Funding, 1% upon “rollover” to the Extended Term, (ii) for Leadership Circle Members (a) for Loan funding of $50,000 or more, 3% upon Funding, 2% upon “rollover” to the Extended Term, and (b) for Loan funding of less than $50,000, 3% upon Funding, 1% upon “rollover” to the Extended Term. For example, for a Leadership Circle Member Referral of a $100,000 Loan amount on a 26/52 Week Flex Pay Loan (26 Week Initial Term and 26 additional Weeks for the Extended Term), if the principal is not paid in Week 26 of the Initial Term, the Member will earn 3% on Loan funding and 2% upon “roll-over” of the Loan to the Extended Term.
(d) Notwithstanding the above, the Referral Fee or Residual Fee per Loan or Additional Advance (or cash out portion of a renewal or refinance) shall be capped and shall not exceed the applicable Fee Cap associated with the then applicable Member Program in which Member is participating and maintains during the Term. The applicable Fee Cap as set forth in the Agreement relates to aggregate loans or advances made to an Affiliated Borrowing Group funded at that time or within 90 days of the first advance or loan to any entity that is part of the Affiliated Borrowing Group; [e.g. if a loan is funded that is referred by a CEO’s Circle Member for $400,000 to a borrowing entity and a CEO’s Circle Member earns a 6% Referral Fee (6% of $400,000, or $24,000) for such loan, if an additional $300,000 loan is funded to another borrowing entity that is part of the Affiliated Borrowing Group of the first borrowing entity within 90 days of the first Loan, the additional Referral Fee due shall be $12,000 (6% of $300,000 or $18,000 will be capped at $12,000 due to the aggregate cap of $36,000 for the Affiliated Borrowing Group ($24,000 for the first Loan plus $12,000 for the second Loan)]. The applicable Fee Cap on Referral Fees or Residual Fees to an Affiliated Borrowing Group shall reset 90 days after the first Loan to such Affiliated Borrowing Group and the Member shall be eligible to earn a Referral Fee or Residual Fee from a new Loan or Renewal from the same Affiliated Borrowing Group so long as the Loan meets the qualification requirements of this Agreement, but subject to a new aggregate applicable Fee Cap with a new 90 day period commencing on the date of the first New Loan, or Renewal made to an Affiliated Borrowing Group after the expiration of the prior cap as set forth herein. ARF reserves the right to waive the fee cap in any instance in its sole and complete discretion.
(e) For Loans, Advances or Renewals funded by the fifteenth (15th) day of the month, the applicable Referral Fee or Residual Fee earned will be paid by the last day of the same month. For Loans, Advances or Renewals funded after the fifteenth (15th) day of the month, the applicable Referral Fee or Residual Fee will be paid to Member within fifteen (15) calendar days of the month following the month in which the Loan (Advance or Renewal) funding occurs. The COI Override Fee, Share of COI Network Fee, COR Network Bonus and COR Performance Bonus will be paid by the fifteenth (15th) day of the month following the month in which such fees or bonuses are earned. Notwithstanding anything contained in the Agreement to the contrary, the COI Override Fee will be paid “in full” for Flex Pay and IO Flex Pay Loans on the 15th day of the month following Loan funding and will not be split. If Member has provided banking information for ACH payment, payment shall be made by ACH credit to the Member’s bank account. If no bank information has been provided, then payment shall be made by regular U.S. mail by corporate check. A completed Loan, Advance or Renewal shall be a Loan which has been approved by either ARF or the Lender on such terms and conditions, including amount, as ARF or the Lender shall approve in either ARF or the Lender’s sole and complete discretion, all Loan documentation shall have been completed to Lender’s and/or ARF’s satisfaction and executed by either ARF or the Lender and the Borrower and the Loan shall have been funded to the Borrower. No Lender shall have any liability to Member for any payment or compensation due hereunder and Member shall look solely to ARF for such payment.
7. ARF Sales Contact; Underwriting Process.
After receipt by ARF of Member’s completed Referral, the ARF Rep shall promptly make a sales call to the prospective Merchant borrower. The ARF Rep will make follow up calls as it deems appropriate within its customary practice and will use commercially reasonable and diligent efforts to assist the Prospective Borrower through the loan application and underwriting process of the Lender. If ARF is able to obtain a loan application from the prospective Borrower, there is no guarantee that the prospective Borrower will be approved for a Loan by ARF or the Lender, or otherwise complete the underwriting and loan closing process. ARF shall have the right in its sole discretion to identify an alternate ARF Rep to work with Member on referrals during the term of this Agreement.
8. Volume Incentive.
In addition to the COR Performance Bonus, ARF may from time to time announce “Volume Incentive(s”) or “Bonus Fees” to active Members from time to time in ARF’s sole discretion. Such Volume Incentives may be implemented, modified, amended or rescinded at any time in ARF’s sole discretion upon written notification provided to Member as provided herein which shall apply to all eligible referrals made after the date of the notification.
9. Qualification for Referral Compensation and Exclusions.
In order for a Loan transaction to qualify for a Referral Fee or Residual Fee or to be counted towards any other Membership Benefit, including but not limited to COI Override Fees, COR Performance Bonus, the referral must meet the following requirements: (i) the referred prospective borrower or Affiliated Borrower Group, including any guarantors cannot be a current customer of ARF or its Lenders or have been a customer of ARF or its Lenders within the 12 month period prior to the referral, (ii) the prospective borrower or Affiliated Borrower Group or any of its guarantors, cannot have submitted a UMCA (credit application) to ARF or been referred to ARF within the previous 120 days through any other source, (iii) the prospective Borrower or Affiliated Borrowing Group cannot be covered by another referral partner agreement entitling such referral partner to compensation in connection with same (i.e. residual compensation due to another referral partner or Member for up to 36 months), and (iv) Member shall have entered into the Agreement and the Agreement shall have been Validated at the time of the Referral. In the event that the Referral does not meet such criteria, Member shall be promptly notified by ARF, that the Referral does not qualify and the reasons therefore. In addition, no fee shall be paid or earned or credit given to any Membership Benefit, including but not limited to COI Override Fees, COR Performance Bonus, Referral Fees or Residual Fees, if any of the following conditions exist by the 15th day of the month following the funding of the Loan or the rollover to the Extended Term of an IO Loan or an IO Flex Pay Loan: (i) the Merchant misses any payment or an event of default occurs under the Merchant Agreement; (ii) the Merchant places a stop payment or revokes authorization on its automatic debit authorization; (iii) the Merchant’s bank account becomes frozen (iv) the Merchant closes their bank account; (v) the Merchant requests a RNCO; (vi) the Merchant pays off the Loan or indicates its intention to pay off the Loan by requesting an Early Payoff; (vii) the Merchant has a history of delinquent loan payments; or (viii) there is any change of ownership of the Merchant or Borrowing Entity. In order for Member to qualify for compensation under this Agreement, neither Member or any of its employees, officers or agents (a) shall be related, by blood or marriage to the ARF Rep or any current ARF employee or to an owner, manager or officer of the referred Merchant or its Affiliated Borrower Group, (b) shall have engaged in or have been accused of fraud, misrepresentation, dishonesty or deceptive practices in any civil or criminal case or proceeding, has committed a crime, or it otherwise becomes known to ARF that Member has engaged in such practices, or (c) Member shall otherwise be in compliance with its obligations, representations and warranties contained in this Agreement. Member shall not charge or accept any fee or other form of compensation from a Merchant in connection with the referral by Member of such Merchant to ARF. Member warrants and represents that its sole and exclusive form of compensation shall be limited to the Membership Benefits paid by ARF as contemplated herein. Member further represents and warrants that it was the sole source of the referral and that there shall be no compensation or fee sharing or other financial or business relationship between Member, the ARF Rep, or any third party, it being agreed and understood that any such collusive actions or any breach of any obligation, warranty or representation shall violate the terms of this Agreement and void any obligation on behalf of ARF to pay compensation and ARF shall have the right to recoup any Membership Benefit paid to Member in connection with such collusive conduct or breach. Member shall hold ARF harmless for any claim for compensation or fee payable to any employee, independent contractor or third party which Member has dealt with in connection with the referral of the Merchant. Prior to payment of the Membership Benefit, ARF may audit the referral transaction to determine that the terms of compensation have been satisfied.
The payment of all Membership Benefit fees and bonuses shall be made by ACH debit to the Member account based upon the information provided by the Member in this Agreement, unless another method of payment is agreed to by ARF and Member in writing. Member agrees that the nature of its services and fee compensation hereunder is that of an independent contractor and not as an employee. ARF shall provide to Member a bi-monthly report of Loans, Advances and Renewals made from Member Referrals which will include the pertinent merchant loan information and the aggregate volume on a Month-to-Date and Year-to-Date basis and Loans and Renewals relating to Member’s COI Network (without disclosing confidential information relating to the COI Member’s Referrals), but ARF shall not be obligated to provide any reporting if there are no Loans that have been funded and are outstanding from Member Referrals or it COI Network in that calendar year.
As to CEO’s Circle Members and Leadership Circle Members, the “Initial Term” of this Agreement shall commence on the Validation Date and end on December 31, 2022. As to Founding Circle Members, the initial term of this Agreement shall be the one (1) year anniversary of the Validation Date. The initial term shall extend automatically for successive one (1) year terms (extended “Term”) unless either party has provided written notice of its election not to extend the term of this Agreement prior to the effective date of such automatic extensions. This Agreement may be terminated by not less than thirty (30) calendar days prior written notice given by any party. The termination of this Agreement by Member shall result in the reduction of the Residual Fees to the level due to the Founding Circle Members for the remaining term during which such Residual Fees are required to be paid. Termination of this Agreement by ARF “for cause” due to Member’s breach of a material covenant of this Agreement shall result in cancellation of all future Residual Fees. Except for termination by ARF for cause, the fees payable hereunder shall also be payable by ARF to Member for all referrals received by ARF from Member prior to the termination of this Agreement for all completed Loans within the same month of termination as provided above and for Residual Fees for a period of three (3) years from the date of the initial Loan advance to a Merchant as provided herein.
This Agreement is deemed to be entered into in the State of Florida and governed by the laws of the State of Florida. Member consents to the jurisdiction of the courts of the County of Broward or Dade, State of Florida or the federal courts of district in which ARF’s principal office is located in Florida for the resolution of any or all disputes or claims arising out of and/or related to this Agreement.
13. Contact Information.
Member agrees to notify ARF of any changes in its contact information. Member hereby authorizes and consents to being contacted by mobile phone, text or email by ARF or its representatives at the Member’s contact information as provided above or hereinafter provided by Member.
14. Proprietary Information; Confidentiality.
Member acknowledges and agrees that ARF has expended great time and effort in developing its Lending Services and Loan Products. ARF now owns and will develop, compile and own certain proprietary techniques, trade secrets, and confidential information which have great value in its business and which ARF takes measures to protect from unauthorized use or disclosure (collectively, ARF Proprietary Information). ARF will be disclosing ARF Proprietary Information to Member during Member’s performance under this Agreement. ARF Proprietary Information includes not only information disclosed by ARF but also information developed or learned by Member during Member’s performance. ARF Proprietary Information is broadly defined and includes all information which has or could have commercial value or other utility in the business in which ARF is engaged or contemplates engaging or the unauthorized disclosure of which could be detrimental to the interests of ARF whether or not such information is identified by ARF. By way of example and without limitation, ARF Proprietary Information includes all customer lists, Lead lists, agent lists, data, printed and written material, application forms, contracts and other information furnished by ARF to Member. Member’s use of ARF Proprietary Information is limited to the purpose of performing Member’s obligations to ARF during the term of this Agreement. Member shall not disclose any ARF Proprietary Information to any other person or entity. Member’s obligations under this Section shall survive termination of this Agreement and for a period of three (3) years. Member agrees that upon the expiration or termination of this Agreement, all of ARF’s Proprietary Information in Member’s possession will be returned to ARF within thirty (30) days of such expiration or termination. In the event that Member becomes legally compelled to disclose any information, Member will provide ARF with prompt written notice so that ARF may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Agreement. Member is cognizant and understands that ARF could be irreparably harmed or sustain damages for which monetary remedies are insufficient if ARF Proprietary Information is misused or disclosed in violation of this Agreement and ARF may seek injunctive or other equitable relief in connection therewith. Member shall be responsible for all costs including attorney fees and court costs relating to the enforcement of this Section.
15. Compliance with Laws.
Member shall, at its own expense, comply with all applicable laws, regulations, ordinances, rules, and orders of governmental authorities, including, without limitation, compliance with the Telephone Consumer Protection Act and all federal, state and local laws relating to advertising, marketing, and sales.
16. Trademarks; Trade Names.
During the term of this Agreement, Member shall have a limited, revocable, non-exclusive and non-assignable right to advertise Lending Services using the trademarks, service marks, logos, designs and trade names that ARF may adopt from time to time (collectively, the “ARF Trademarks”) solely in connection with Member’s performance under this Agreement. Nothing herein shall grant Member any right, title, or interest in the ARF Trademarks other than the limited right set forth in this Section. The use of the ARF’s Trademarks by Member shall first be submitted to ARF for approval (which shall not be unreasonably withheld) of design, color, and other details or shall be exact copies of those used by ARF and in conformity with ARF’s guidelines provided to Member. ARF shall have a limited, revocable, non-exclusive and non-assignable right to use of Member’s trademarks, service marks, logos, designs, trade names and likeness for purpose of performing the Marketing Services as provided herein.
17. Material Default.
Member’s election or failure to pay the Membership Fees as set forth herein, shall not constitute a material default under this Agreement but shall result in the loss of Member’s Membership Benefits except that Member shall continue to be entitled to the Membership Benefits of a Founding Circle Member. A “material default” of the Agreement and Terms and Conditions shall include but not be limited to a breach by Member of Sections 3, 9, 14, 15 and 16 contained herein. The occurrence of a material default shall not be subject to notice and cure and in such event, ARF may elect to immediately terminate this Agreement by written notice to Member and Member shall no longer be entitled to receive any Membership Benefits, including without limitation, any Referral Fees or Residual Fees, or COI Network fees. ARF shall also have the right to pursue any claim or remedy for damages caused as a result of such breach as permitted by law.
18. General Provisions.
(a) Member shall not assign in whole or in part its rights or obligations under this Agreement without the express written consent of ARF. This Agreement shall be binding upon and shall inure to the benefit of each party’s successors and permitted assigns.
(b) The Agreement including the Terms and Conditions, embodies the entire agreement and understanding of the parties hereto with respect to the subject matter hereof and supersedes any and all prior agreements, arrangements and understandings relating to the matters provided for herein. Except for changes to the Terms and Conditions by ARF as provided in the Agreement, no alteration, waiver, amendment, change or supplement hereto shall be binding or effective unless the same is set forth in writing signed by a duly authorized representative of each party.
(c) For the convenience of the parties, any number of counterparts of this Agreement may be executed by the parties hereto. Each such counterpart shall be, and shall be deemed to be, an original instrument, and all such counterparts taken together shall constitute one and the same agreement. Notices permitted or required under this Agreement may be given by overnight courier (and shall be deemed delivered one day after they are sent) or by email (and shall be deemed delivered when sent) at the physical and email address of Member and ARF listed in the Agreement.
(d) Each person executing this Agreement on behalf of a party represents that it has the legal capacity to enter into this Agreement on behalf of such party and upon its execution hereof, this Agreement is a legally enforceable and binding obligation of such party. The execution of the Agreement shall constitute agreement and acceptance of these Terms and Conditions which are incorporated into the Agreement in full and without the need for separate signature or execution of these Terms and Conditions.