in respect of CBA branded products BETWEEN <insert Intermediary head group name> <Insert Head group ABN> AND Commonwealth Bank of Australia (ABN 48 123 123 124) Effective 13 January 2014 Schedule A Products, Services and Commission Part 1: Products This Agreement applies to the following Commonwealth Bank or CommSec branded ( CBA branded ) products: Home Loan Products 1.1 Standard Variable Rate Home Loan (Including 1 Year Guaranteed Rate, 12 month Discounted Variable Rate and under Mortgage Advantage (MAV) conditions) 1.2 Standard Variable Rate Investment Home Loan (Including 1 Year Guaranteed Rate, 12 month Discounted Variable Rate and under Mortgage Advantage (MAV) conditions) 1.3 No Fee Variable Home Loan 1.4 No Fee Variable Investment Home Loan 1.5 Rate Saver Home Loan (Including 3 Year Special Rate Saver) 1.6 Rate Saver Investment Home Loan (Including 3 Year Special Rate Saver) 1.7 Fixed Rate Home Loan (including Mortgage Advantage (MAV) conditions) Intermediary Agreement - effective 1 January 2015 Page 1
1.8 Fixed Rate Investment Home Loan (including Mortgage Advantage (MAV) conditions) 1.9 Viridian Line of Credit Residential Equity Rate (including Mortgage Advantage (MAV) conditions) 1.10 Equity Unlock Loan for Seniors* *Note: Available only to those Nominees that maintain current SEQUAL accreditation Additional CBA branded Home Loan Products for Top Ups See Part 7 Commission Additional Borrowings via Top- Ups (clause 7.4) 1.11 Economiser Home Loan (Including 3 year Special Economiser Home Loan) 1.12 Economiser Investment Home Loan (including 3 year Special Economiser Investment Home Loan) 1.13 Viridian Line of Credit- Residential Equity Rate CONNECT REFFERAL PROGRAM CONNECT Cash Fulfilment Product Suite 1.14 Smart Access Account 1.15 Smart Access Overdraft Account 1.16 Smart Access Debit MasterCard Account 1.17 Complete Access Account (including Everyday Offset Facility) 1.18 Complete Access Overdraft Account 1.19 Complete Access Debit MasterCard Account 1.20 All MasterCard Credit Card types CONNECT Cash Referral Product Suite 1.21 Loan Protection 1.22 Personal Loans 1.23 Cash Investment Account 1.24 General Insurance (Home Insurance & Car Insurance) 1.25 Risk Insurance 1.26 CommSec Margin Loans 1.27 Funds Under Management 1.28 Term Deposits 1.29 Business Transaction Account 1.30 Business Online Saver Intermediary Agreement - effective 1 January 2015 Page 2
1.31 NetBank Saver Account 1.32 GoalSaver Account This Agreement does not apply in relation to any services performed by you pursuant to any other agreement in respect of Bankwest branded products. Product Releases 1.33 From time to time we may vary, remove or add Products or services you or your Nominees are authorised to refer to us under this Agreement. If we do so, we may by written notice or email notification to you, vary, remove or add the terms of this Agreement, including remuneration or other entitlements in respect of those products. Intermediary Agreement - effective 1 January 2015 Page 3
Part 2: Categories of Services The following services are to be provided in relation to the Products: Sales Completion Services 2.1 Personally interview the potential customer. 2.2 Ensure the potential customer accurately completed the relevant Application Forms. 2.3 Insert the Intermediary identifying number on application form. 2.4 Provide to us all relevant information in support of the customer's application for the Product/s in the format required by us or as agreed between us from time to time including:- (b) (c) (d) (e) (f) evidence of employment, income and assets including pay slips, group certificates, tax returns and historical financial statements; current year budget and forward projections; Property Valuations where in existence; other requirements for particular loans (e.g. Construction loans); appropriate "re-finance documentation", for re-finance loans, or other loans where a portion of the advance will re-finance other debts and any information and documents required for or in connection with the Client Identification Procedure. For identification, income and savings documentation only, original documents must be sighted. Legible copies of these documents (either as hardcopy paper or electronic imaged) are to be marked with "Originals Sighted" and dated. These copies are to be retained by you and are to be made available to us upon request. If the Client Identification Procedure requires you to retain information or originals or copies of documents, when required by us, you must provide us with copies of any such information or documents. All documents are to be forwarded to the nominated office of the Bank. 2.5 If we have given you written authorisation to do so, you may print our completed loan contract and security documents when we notify you that these are ready for acceptance by a customer, provided that you: (b) only use a printer that we have expressly approved, in writing, for this purpose; and comply with all Procedures relevant to the printing, handling and delivery of such documents. 2.6 In the case of loan Products, liaise between the client and us through our settlement processes and ensure our settlement requirements, including Home and Building Insurance (if applicable), have been satisfied, in order to facilitate an efficient settlement process. 2.7 Except as set out in Schedule A Part 7- Additional borrowings via "Top Ups" and in Schedule A Part 8 -Trail on additional borrowings via "Top ups" and /or changes to the home loan product type (Product Switch), we may not pay commission in respect of an application for a loan, an increase in an existing loan, including Top Ups, or other product, if: you fail to do any of the matters referred to in clauses 2.1 to 2.6 (inclusive), Intermediary Agreement - effective 1 January 2015 Page 4
(b) (c) the application is not submitted by you through the Third Party Banking Channel or is approved and/or processed by any area of the Bank not related to Commonwealth Bank, Third Party Banking; or any other part of the work referred to in paragraphs 2.4 and 2.6 in respect of the application has been undertaken or performed by other areas of our network, otherwise than for clarifying or advising on how those services should be performed by you or for sales completion or loan settlement purposes. Customer Care Repayment Alert Program (RAP) services 2.8 When providing Customer Care Repayment Alert Program (RAP) services you and your Nominees must comply with all of the terms and conditions for the RAP. These are set out in Parts 2 and 4 of Schedule B to this Agreement. 2.9 Providing RAP services requires you or your Nominees to receive Personal Information relating to customer payment arrears. You and your Nominees agree to treat the Personal Information you receive for the RAP confidentially, and to use the information prudently, responsibly and solely to provide credit management assistance to those customers who may require it. Intermediary Agreement - effective 1 January 2015 Page 5
Part 3: Commissions 3.1 Intermediary Commission Models Table A - Intermediary Commission Models Model 1. (Default) Model 2. Model 3. You select a Commission Plan (see Table B), which then applies to all Nominees Each Nominee selects their own Commission Plan (see Table B) You select the Nominees (Authorised Nominees) who can select their own Commission Plan (b) You can also select a Commission Plan for your Nominee(s) (see Table B) Terms applicable to all Intermediary Commission Models 3.2 You may choose any one of our three Intermediary Commission Models. 3.3 If you don t choose an Intermediary Commission Model, Model 1 (Default) applies. 3.4 Once you have chosen an Intermediary Commission Model (or if the Default model applies as you didn t choose an Intermediary Commission Model), you may not change your Intermediary Commission Model without our consent. Intermediary Agreement - effective 1 January 2015 Page 6
Commission Plans Table B - Commission Plans Loan Type Calculations Commission Rates Plan A (Standard) Base Upfront Commission Home Loans and Lines of Credit Home Loans Base Upfront Lines of Credit Base Upfront On New Money loan amount On New Money Credit Limit (GST Exclusive) Plan B 0.50% 0.45% 0.375% 0.3375% Commission Allowances (see Part 4) will be added to the above Base Upfront Commissions resulting in the Total Upfront Commission payable for each Commission Plan. Trail Commission (p.a) Home Loans and Lines of Credit Year 1 Trail Commission Year 2 Trail Commission Year 3 Trail Commission Year 4 + Trail Commission Balance Outstanding as at the end of the relevant month (see clause 3.14) Commission - Equity Unlock Loan for Seniors 0.15% pa 0.10% pa 0.15% pa 0.15% pa 0.15% pa 0.20% pa 0.20% pa 0.25% pa Equity Unlock Loan for Seniors Under $20,000 Nil Equity Unlock Loan for Seniors Equity Unlock Loan for Seniors $20,000 - $39,999.99 Flat Rate Upfront Commission of $500 (Not eligible for Trail Commission) $40,000 and over Flat Rate Upfront Commission of $1,000 (Not eligible for Trail Commission) Intermediary Agreement - effective 1 January 2015 Page 7
3.5 You, or where applicable a Nominee or Authorised Nominee, may select either Commission Plan. 3.6 If you, or where applicable a Nominee or Authorised Nominee, don t choose a Commission Plan, Plan A (Standard) applies and will continue to apply until a Commission Plan is chosen. 3.7 Once a Commission Plan has been chosen it can only be changed after 6 months from the commencement date of that plan. 3.8 Once a Commission Plan has been in effect for 6 months, you, or where applicable a Nominee or Authorised Nominee, may request a change to another Commission Plan, which will come into effect as follows: (b) Where we process the change request on or prior to the 20th of a month, the new Commission Plan applies to new fundings from the 1st of the next calendar month. Where we process it after the 20th of a month, the new Commission Plan applies to new fundings from the 1st of the second following calendar month. 3.9 Changes may be advised through CommBroker or such other method we advise you. General Terms applicable to Commissions 3.10 We pay Commissions on New Money that you or a Nominee submits to us through our Third Party Banking Channel. 3.11 We may reduce the Total Upfront Commission rate where the New Money equals or exceeds $3,000,000.00. 3.12 We may reduce the Total Upfront Commission rate and the Trail Commission where the loan interest rate approved is less than the advertised interest rate (including any advertised discounted or guaranteed interest rate) for that home loan product and/or we have agreed to waive all or part of our standard fees and charges. 3.13 We will not pay any Total Upfront Commission on any New Money for an Equity Unlock Loan for Seniors if the loan is increased within 12 months of the previous funding date where we have paid you Commission on the previous loan. 3.14 For the purpose of calculating Trail Commission, the Balance Outstanding is: (b) the net balance of the home loan account (including any additional advances made under a Top Up or Product Switch) as at the end of each month, less the credit balance as at the end of that month of any Mortgage Interest Savings Account (MISA) and/or Everyday Offset Facility which is linked to the home loan on which trail is being paid. Intermediary Agreement - effective 1 January 2015 Page 8
3.15 Trail Commission will not be paid to you on: (b) (c) (d) (e) (f) loans in arrears 60 days or greater; loans or facilities in excess of their limit; loans that are refinanced under or transferred to another Commonwealth Bank Business Unit as a result of a customer initiated request; loans that are refinanced or switched to a different product type by another intermediary group or the nominee of another intermediary group loans that are repaid; loans that are refinanced by any external lender or party; or Equity Unlock Loan for Seniors. 3.16 Should those loan accounts that did not receive trail due to above conditions 3.15 and 3.15(b) be in order, prior to the end of the respective trailer month, Trail Commission will recommence at the next date for payment of Trail Commission. There will be no "backdating" of Trail Commission covering the period that trail was not received, for these loans. 3.17 We may change any of the terms of this Part 3, including Commission rates and Clawback, by giving you 28 days notice. Except as otherwise provided in this Agreement, Trail Commission Rate changes will apply only prospectively, that is to loans funded on or after the date the change taking effect. 3.18 You must be registered and remain registered for GST purposes. 3.19 Unless otherwise noted, all commission amounts shown are GST exclusive. (To calculate GST multiply the GST exclusive rate by 10%). Intermediary Agreement - effective 1 January 2015 Page 9
4 Part 4: Commission Allowances Table C - Submission Quality and Conversion Ratio Allowances 4.1 You may also be eligible to receive an additional upfront commission payment (allowance) as outlined below in relation to Banking Products: Allowance Allowance applies when Allowance Rates (GST Exclusive) Submission Quality Allowance Conversion Allowance the ratio of loan applications received without any errors to total applications received (Errorless Ratio) is less than 80% Errorless Ratio is equal to or greater than 80% and less than 90% Errorless Ratio is equal to or greater than 90% the ratio of loans that have settled compared to applications lodged (Less Pre-Approval applications) (Conversion Ratio) is less than 75% The Conversion Ratio is equal to or greater than 75% and less than 80% The Conversion Ratio is equal to or greater than 80% Nil Additional Upfront commission payment of 0.025% of the total "New Money" loan amount or 75% of 0.025% on the "New Money" credit limit for Viridian Line of Credit. Additional Upfront commission payment of 0.050% of the total "New Money" loan amount or 75% of 0.050% on the "New Money" credit limit for Viridian Line of Credit. Nil Additional Upfront commission payment of 0.050% of the total "New Money" loan amount or 75% of 0.050% on the "New Money" credit limit for Viridian Line of Credit. Additional Upfront commission payment of 0.10% of the total "New Money" loan amount or 75% of 0.10% on the "New Money" credit limit for Viridian Line of Credit. Intermediary Agreement - effective 1 January 2015 Page 10
Conditions relating to Commission Allowances 4.2 We pay Commission Allowances quarterly. We review the data for each calendar quarter and pay the Commission Allowances no later than the beginning of the 2nd month after the end of the quarter. 4.3 Where the total volume of New Money from Applications is less than $5 million in a particular month, we reserve the right not to pay any Commission Allowances for that month (and the quarterly Commission Allowance will be determined as if there had been no activity for that month). 4.4 Commission Allowances will be added to the Base Upfront of the respective Commission Rate Plans (as shown in Table B above) resulting in the Total Upfront Commission payable for each Commission Rate Plan. 4.5 We may change any of the terms of this Part 4 by giving you 28 days notice. Intermediary Agreement - effective 1 January 2015 Page 11
5 Part 5: CONNECT Cash Fulfillment Products CONNECT Cash Fulfillment Products commission payable Product Commission (GST Exclusive) Smart Access/Complete Access Streamline or Debit MasterCard accounts including any overdraft All MasterCard Credit Card types $50.00 $15.00 Conditions relating to Fulfilment Services Commission 5.1 Fulfilment Services Commission on Smart Access/Complete Access Streamline or Debit MasterCard accounts only applies where the Customer elects to have home loan repayments made from the account. 5.2 Fulfilment Services Commission on MasterCard credit card accounts only applies if the MasterCard credit card is activated by the Customer. 5.3 To qualify for a Fulfilment Services Commission, you must satisfactorily complete the Third Party Banking Home Loan Privacy Consent and Supplementary Products Application 002-829 form. 5.4 We may change any of the terms of this Part 5 by giving you 14 days notice. Intermediary Agreement - effective 1 January 2015 Page 12
6 Part 6: CONNECT Referral Program Table D - CONNECT Cash Referral Program Commission payable Product Referral Services Commission (GST Inclusive) Loan Protection $110.00 General Insurance (Home Insurance and Car Insurance) $38.50 Risk Insurance Up to 17.5% of the first year s premium for Personal Risk Products Personal Loans $32.00 Cash Investment Account Up to $100.00 Business Transaction Account Up to $100.00 Business Online Saver, Netbank Saver Account, Goalsaver Account CommSec Margin Loans Funds Under Management Term Deposit provided that a minimum of $500 in total deposits is made to the account within 28 days of opening Up to $100.00 Loan Limit up to $500,000 = $150.00 Loan Limit greater than $500,000 = $250.00 0.1% of the total amount invested Minimum Term 3 Months $50,000 to $249,999 = $50.00 $250.000 to $999,999= $100.00 $1,000,000+ = $200.00 6.1 You are automatically registered with us to participate in the CONNECT Referral Program which will also allow your Nominees to participate in this Program. Your Nominees continued registration and entitlement to any commission are subject to you remaining a registered participant of this Program. 6.2 You and/or your Nominees are only entitled to any benefits in relation to this Program when: the correct broker identifying" number is provided; and Intermediary Agreement - effective 1 January 2015 Page 13
(b) the person you or your Nominees have referred to us accepts the products set out in Table D above and those products are established. 6.3 You and/or any of your Nominees will not be entitled to any commission if the referral for a particular customer was made first by any other area of the Bank. 6.4 We may change any of the terms of this Part 6 by giving you 14 days notice. Intermediary Agreement - effective 1 January 2015 Page 14
7 Part 7: Payment of Commission 7.1 When is Commission paid? Commission will be calculated and payable in arrears as a single amount in accordance with the tables and conditions below Table E - Commission Payments Commission type Total Upfront Commission How often is it paid? Fortnightly Trail Commission Monthly Fulfilment Services Referral Services Commission Fortnightly Monthly When is it paid? Within 7 days of the fortnightly scheduled payment date immediately following the scheduled calculation fortnight in which the loan was disbursed or line of credit was established Within 7 days of the fortnightly scheduled payment date immediately following the scheduled calculation fortnight in which the last day of the month falls Within 7 days of the fortnightly scheduled payment date immediately following the scheduled calculation fortnight in which the loan was disbursed or line of credit was established Within 7 days of the fortnightly scheduled payment date immediately following the scheduled calculation fortnight in which the last day of the month falls What period is it calculated for? Scheduled calculation fortnight Calendar month Scheduled calculation fortnight Calendar month Intermediary Agreement - effective 1 January 2015 Page 15
Intermediary Agreement - effective 1 January 2015 Page 16
Other terms applicable to the payment of Commissions 7.2 We will review the arrangement at least twelve monthly and in addition to our other rights have the right to alter the commission structure if your average monthly settlements for the previous twelve months, in respect of the Products fall below $5,000,000. 7.3 The current Trail Commission structure on the existing loan portfolio will remain subject to the terms and conditions applicable to Trail Commission set out below or elsewhere in this Agreement, including Schedule B Part 3 Termination and Suspension of Intermediary Agreement. 7.4 Where we have approved a loan as a result of a loan application or established a product as a result of a referral from you or any Nominee, that contained fraudulent documentation and/or materially false information, then you will refund to us the commission and/or benefits paid to you and you will not be entitled to any further commission in respect of that loan and/or product, regardless of whether or not you were aware that any document was fraudulent or any information was false. 7.5 Ordinarily, any refund due to us will be taken into account by deducting the refund from future commission paid to you by us or other members of the Bank under other arrangements they have with you; otherwise, it will be payable on 14 days notice from us or time agreed by both parties. 7.6 We may suspend, pending completion of our investigations, payment of trailing commissions on: (b) all loans introduced by a particular Nominee if we reasonably suspect that Nominee has acted dishonestly or fraudulently in relation to any matter under this Agreement; or in relation to loans that we identify contain fraudulent or misleading information. Intermediary Agreement - effective 1 January 2015 Page 17
We may also require you to refund to us all commission paid to date, in respect to those loans that have been identified to have contained fraudulent or misleading information. 7.7 We may suspend, pending completion of our investigations, payment of commission or any other benefits where we have suspended you or any of your Nominees pursuant to Schedule B Parts 3 or 4. 7.8 At the conclusion of our investigations we will either immediately terminate this Agreement if entitled to do so or lift the suspension. If we lift the suspension, we are not liable for any losses or claims you may have incurred, nor are we liable to compensate you for any loss of potential commission earnings. 7.9 If at any time you or the applicable Nominee are not appointed as a credit representative or licensed in accordance with clause 1.3 of Schedule B Part 1, we may suspend payment of commission. 7.10 If there is a complaint against you or any of your Nominees and you have failed to satisfactorily resolve the complaint, we will not pay you any commission, including trail commission and bonus payments, and you will refund to us commission paid in respect of, or calculated by reference to, that customer s loan, in the following circumstances: (b) (c) claim is made by a customer against us, including claims made through court proceedings, our internal complaint handling scheme and any approved External Dispute Resolution Scheme; the claim arises from the misconduct of, or breach of this Agreement by you or any of your Nominees; and we are required, or agree (acting reasonably), to pay the customer, or to release the customer from liability to us, as a result of such claim, but your liability is limited to any liability, damage, loss, cost and expense (including without limitation expenses and costs in investigating or managing any matter and legal costs on a solicitor and own client basis) sustained or reasonably incurred by us. After recovery by us of any liability, damage, loss, cost and expense (not based on future or potential earnings) we suffer or incur, we will resume payment of trailing commission unless the Agreement has been terminated. Any refund due to us will be deducted from future commission paid to you by us; otherwise, it will be payable on 5 days notice from us. This clause is in addition to any other of our rights if you breach this Agreement. 7.11 Where we have suffered any liability, damage, loss, cost and/or expense (not based on future or potential earnings) as a result of the breach of this Agreement by you or a Nominee we may offset it against any commission or benefit payable to you and cease paying you commission or benefits or both until that commission, benefits or both have been fully offset against that liability, damage, loss, cost and expense. 7.12 You will not receive Commission: where you submit the application for the loan or Top Up through a channel other than the Third Party Banking Channel or the application is approved by any area of the Bank other than the Third Party Banking Channel; Intermediary Agreement - effective 1 January 2015 Page 18
(b) (c) if any part of the initial sales process or referral services was undertaken or performed by any other areas of the Bank (other than clarifying or advising how you should perform those services or for sales completion or loan settlement purposes); or for Top Ups, if you were not the effective cause of the provision of additional money. Intermediary Agreement - effective 1 January 2015 Page 19
8 Part 8: Entitlement to Commission on Top Ups 8.1 Original Loan was introduced by your Nominee and the Top Up is also introduced by one of your Nominees. Where: (b) A Nominee (as your delegate) introduces a CBA branded loan or line of credit; and later the same Nominee or another of your Nominees introduces an increase in the amount of credit or credit limit of that loan, then; (i) (ii) (iii) total Upfront Commission will be paid on the Top Up amount (New Money), in accordance with the Commission Plan (Table B) at the time of the Top Up, aligned to your Nominee who introduced the Top Up; subject to other clauses in this Agreement relating to Trail Commission, Trail Commission will apply; and any Upfront commission and Trail Commission paid to you will reflect the Broker Code of your Nominee who introduced the increase in the amount of credit or credit limit. 8.2 Original Loan was introduced by a Nominee of another Intermediary Group or directly by the Bank however the Top Up is now introduced via one of your Nominees Where: (b) we have a CBA branded loan or line of credit with a Customer (either originated by another aggregator or directly by the Bank); and later one of your Nominees (as your delegate) introduces an increase in the amount of credit or credit limit of that loan: (i) (ii) (iii) total Upfront Commission will be paid on the Top Up amount (New Money), in accordance with the Commission Plan (Table B) at the time of the Top Up, aligned to your Nominee who introduced the Top Up; subject to other clauses in this Agreement relating to Trail Commission, Trail Commission will apply; and any Upfront commission and Trail Commission paid to you will reflect the Broker Code of your Nominee who introduced the increase in the amount of credit or credit limit. 8.3 Original Loan was introduced by one of your Nominees however the Top Up was introduced directly by the Bank Subject to any other clause in this Agreement, where: one of your Nominees (as your delegate) introduces a CBA branded loan or line of credit; and Intermediary Agreement - effective 1 January 2015 Page 20
(b) later the Customer applies for an increase in the amount of credit or credit limit of that loan or line of credit directly with the Bank: (i) (ii) (iii) we will not pay any Total Upfront Commission for the increase in the amount of credit or credit limit; subject to other clauses in this Agreement relating to Trail Commission, Trail Commission will apply; and any Trail Commission paid to you will reflect the Broker Code of your Nominee who introduced the original loan or credit limit. 8.4 Original Loan was introduced by one of your Nominees however the Top Up is now introduced via a Nominee of another Intermediary Group. Where: (b) one of your Nominees (as your delegate) introduces a CBA branded loan or line of credit; and later another Nominee of another Intermediary Group (as a delegate of the another Intermediary) introduces an increase in the amount of credit or credit limit of that loan: (i) (ii) we will not pay any Total Upfront Commission for the increase in the amount of credit or credit limit; and notwithstanding any other provision of this Agreement, we will cease paying you any Trail Commission. 8.5 When a Top Up occurs, if Trail Commission is payable, it is payable at the same Trail Commission rate (and is subject to any remaining Trail Qualifying Period) that applied to that existing Banking Product immediately before the Top Up. Intermediary Agreement - effective 1 January 2015 Page 21
9 Part 9: Entitlement to Commission on Product Switches 9.1 Product Switches introduced by one of your Nominees on loans also initially introduced by one of your Nominees. Where: (b) one of your Nominees (as your delegate) introduces a CBA branded loan or line of credit; and later the same Nominee or another of your Nominees introduces a Product Switch in relation that Banking Product: (i) (ii) (iii) (iv) we will not pay any Total Upfront Commission for the new Banking Product unless New Money is also introduced; we will cease paying Trail Commission in relation to the former Banking Product; subject to other clauses in this Agreement relating to Trail Commission, Trail Commission will apply to the new Banking Product from the date of the product switch; and any Trail Commission paid to you will reflect the Broker Code of your Nominee who introduced the new Banking Product. 9.2 Product Switches introduced by a Nominee of another Intermediary Group on loans initially introduced by one of your Nominees. Where: (b) one of your Nominees (as your delegate) introduces a CBA branded loan or line of credit; and later a Nominee of another Intermediary Group (as a delegate of the another Intermediary Group) introduces a Product Switch in relation to that Banking Product, notwithstanding any other provision of this Agreement, we will cease paying you Trail Commission in relation to the former Banking Product. 9.3 Product Switch introduced by one of your Nominees on loans you did not initially introduce. Where: (b) we have a CBA branded loan or line of credit with a Customer (either originated by a Nominee of another Intermediary Group or directly by the Bank); and later one of your Nominees (as your delegate) introduces a Product Switch in relation to that Banking Product: Intermediary Agreement - effective 1 January 2015 Page 22
(i) (ii) (iii) we will not pay any Total Upfront Commission for the new Banking Product unless New Money is also introduced; we will cease paying Trail Commission in relation to the former Banking Product subject to other clauses in this Agreement relating to Trail Commission, Trail Commission will apply to the new Banking Product from the date of the product switch; and any Trail Commission paid to you will reflect the Broker Code of your Nominee who introduced the new Banking Product. 9.4 Product Switch introduced by CBA on loans one of your Nominees initially introduced Where: (b) one of your Nominees (as your delegate) introduces a CBA branded loan or line of credit; and later the Customer applies for a Product Switch in relation to that Banking Product directly with the Bank: (i) (ii) (iii) (iv) We will not pay any Total Upfront Commission for the new Banking Product unless New Money is also introduced; We will cease paying Trail Commission in relation to the former Banking Product; Subject to other clauses in this Agreement relating to Trail Commission, Trail Commission will apply to the new Banking Product from the date of the Product Switch; and Any Trail Commission paid to you will reflect the Broker Code of your Nominee who introduced the new Banking Product. 9.5 When a Product Switch occurs, if Trail Commission is payable, it is payable at the same Trail Commission rate (and is subject to any remaining Trail Qualifying Period) that applied to that existing Banking Product immediately before the Product Switch. Intermediary Agreement - effective 1 January 2015 Page 23
10 Part 10: Productivity and Partnership Program (PPP) Bonus 10.1 We may pay you, in addition to the existing commission payment/s a PPP Bonus. The amount of any PPP Bonus, the manner in which it will be paid and any conditions to which it may be subject will be determined by us and we will notify you of any changes each year. In determining your PPP Bonus, we take into account a number of factors including: (b) whether performance targets are satisfied; how many loans introduced by you were in arrears for 60 days or more. 10.2 The following apply to PPP Bonuses: (b) (c) performance targets in respect of a year will be established after consulting with you and will be communicated to you in advance; a PPP Bonus may be paid in one or more instalments in the course of the year in which it is determined; and you must apply at least 50% of any PPB Bonus amount: (i) (ii) by paying such amounts to your Nominees; or applying such amounts to support sponsorship, training and development of your Nominees. Intermediary Agreement - effective 1 January 2015 Page 24
11 Part 11: Commission Clawback 11.1 If: Banking Products which are refinanced or repaid in full (b) we pay you Total Upfront Commission in relation to any Banking Product; and the Banking Product in respect of which that commission was paid is refinanced or repaid in full, you must refund us an amount equal to the relevant Percentage of Total Upfront Commission set out below. Circumstances of repayment Refinanced or repaid Period 0 months up to and including 12 months from the date the loan was first disbursed 12 months up to and including 18 months from the date the loan was first disbursed Greater than 18 months from the date the loan was first disbursed Percentage of Total Upfront Commission to be clawed back 100% 50% 0% 11.2 Exceptions Where the refinance is by another CBA business unit, we may at our absolute discretion, apply the following provisions: Circumstances of repayment Refinance by another CBA business unit Period 0 months up to and including 6 months Greater than 6 months up to and including 12 months Percentage of Total Upfront Commission to be clawed back 100% 50% Greater than 12 months 0% Intermediary Agreement - effective 1 January 2015 Page 25
(b) Clawback will not apply where the customer experiences hardship, you provide assistance under the Repayment Alert Program and this leads us to refinance or restructure the loan. Partial Repayments 11.3 If: (b) we pay you Total Upfront Commission in relation to any Banking Product which is secured by a mortgage over residential property/ies; and within 12 months of the first disbursal, the loan or line of credit, in respect of which commission was paid, is partially repaid due to the proceeds from a property sale, you must refund us a proportion of the commission paid to you, being the same proportion that the repayment amount relates to the loan amount/credit limit on which we paid commission (subject to any deduction for amounts refinanced and amounts we did not pay commission on). 11.4 Any refunds you owe us under this Part 11 will be deducted from future commission paid to you. If there are no future commissions payable, you must pay us any refund amount within 5 days after we require payment. Intermediary Agreement - effective 1 January 2015 Page 26
Schedule B Terms and Conditions Part 1: You must not: Scope of Authority and Services 1.1 act on our behalf or hold yourself out as representing us for any purpose or gain except as authorised by this Agreement and for the avoidance of doubt, any authorisation under this Agreement in relation to the Products does not apply to any BankWest branded product or service; 1.2 enter into contractual relations on our behalf or hold out or represent to any person that we have or will give our approval to any Product unless we have given you written authority to do so; 1.3 submit applications for Products or perform the Services until you have provided us with copies of all relevant licences required to be held by you or any Nominee including without limitation, evidence that you have an Australian Credit Licences (ACL) under the National Consumer Credit Protection Act (NCCP Act) or evidence of appointment as a credit representative of a company which is related body corporate to you which holds ACL, and dealers licences and/or investment advisers licences (where applicable); 1.4 allow a Nominee to submit applications for Products or perform the Services unless they are a NCCP Compliant Nominee; 1.5 subject to schedule B clause 2.41 become involved (except as authorised by us) in a dispute or negotiations between us and our customers but where you are involved you must co-operate with us to the best of your ability should any legal action or claim arise from any claim brought by or against us in connection with the Services; 1.6 submit applications for Products or perform the Services or allow a Nominee to do so if you or, where applicable, any Nominee has ceased to be approved by us; 1.7 unless agreed by us, amend any promotional or advertising materials or brochures provided by us or give any advice or information about a Product which is different from current Product Material or the Procedures; 1.8 copy or amend any of our Systems (including any software or computer programme), Policies, Procedures or Product Materials, or allow any third party (including, without limitation, any related entity) to do so or use them without our written consent; 1.9 submit applications for Products or perform the Services until we authorise you to do so and then only after you and your employees and Nominees have satisfied and continue to satisfy all of our initial and ongoing requirements and training (including any training relating to Client Identification Procedures); 1.10 present multiple loan applications, via electronic lodgement or other means, of any application initially presented to us for consideration, to any other lender, mortgage provider, or financial institution, whilst we are in the process of considering the application, except where you have been advised that the application has been declined, or, where a period of greater than 48 hours has lapsed from the time you received acknowledgment of that application and no decision has been provided, or if you, your Nominee or the customer requests that the application be withdrawn from the Commonwealth Bank; Intermediary Agreement - effective 1 January 2015 Page 27
1.11 obtain any benefit by way of fees, charges or any other monetary value or obtain any other means of benefit or incentive from any other party or the potential customer, in relation to referrals introduced to us, through the CONNECT Cross Sell Program; 1.12 provide any financial product advice or financial service, within the meaning of Chapter 7 of the Corporations Act 2001, as amended from time to time in respect of a Product in Schedule A - Part 1 - Products; 1.13 disclose or allow your Nominees to disclose, any information that we may provide to you concerning: (b) (c) (d) Services changes to our products, policies or interest rates; sales performance; market position; or any other matter which is designated, or might reasonably be considered, as commercially sensitive or confidential, to any other person, including a parent company or other related entity, unless you have first obtained our express written permission for the particular disclosure. 1.14 In respect of each application for a Product you must ensure completion (and where necessary collection) by you as our agent in accordance with our Procedures of: customer identification, Tax File Number disclosure, Privacy Protection of Information forms and any Bank Account Opening Application. 1.15 Where we have suffered any claim, liability, damage, loss, cost and expense including, without limitation, expenses and costs in investigating or managing any matter and legal costs on a solicitor and own client basis (not based on future or potential earnings) as a result of any contractual breaches due to delays caused by your or your Nominees errors and/or omissions, we may offset any such claim, liability, damage, loss, cost and/or expense against any commission or benefit payable by us to you and we may cease paying you commission or benefits or both until that commission, benefits or both have been fully offset against that claim, liability, damage, loss, cost and/or expense. 1.16 You agree to maintain a continuous client relationship including client maintenance and service and customer retention, addressing general product enquiries on those products offered by us. 1.17 You agree to manage the ongoing relationship with any customers to whom you sell MAV, which includes keeping in regular contact with these customers to ensure the minimum portfolio balance requirements are maintained. 1.18 When requested by us, contact and service loan customers whose fixed interest rate periods, and/or discounted rate periods, are about to expire, to ascertain the customer's intentions regarding future conduct of their facilities with a view to maximising customer retention. (NB. In accordance with Schedule B General Obligations clause 2.6, you may only use the information we provide you to perform the Services on our behalf). 1.19 Prior to the anniversary of each MAV Portfolio Agreement contact and service relevant loan customers to establish whether the customer will meet the required threshold and the customer's intentions regarding future conduct of their facilities with a view to maximising customer retention. (NB. In accordance with Schedule B General Obligation s clause 2.6, you may only use any information we provide you to perform the Services on our behalf). Intermediary Agreement - effective 1 January 2015 Page 28
1.20 Notwithstanding anything to the contrary in this Agreement, the Services provided by the Intermediary shall not include the provision of any financial service within the meaning of Chapter 7 of the Corporations Act 2001, as amended from time to time. To avoid doubt, conduct is not the provision of a financial service if it is done in the course of work ordinarily done by clerks or cashiers. 1.21 Where you use or rely on a Nominee or contractor to fulfil any obligation or requirement under this Agreement, and this Agreement allows you to do so, that obligation or requirement will be satisfied where you take reasonable steps to ensure that the Nominee or contractor satisfies that obligation or requirement. Where you have an obligation or requirement to ensure that a Nominee does, or refrains from doing, anything, that obligation or requirement will be satisfied if you take reasonable steps to ensure that the Nominee or contractor does, or refrains from doing, that thing. Intermediary Agreement - effective 1 January 2015 Page 29
Part 2: General Obligations You must: 2.1 comply with each of the following requirements and where the requirement relates to your Nominee or contractor, you must take reasonable steps to ensure that your Nominee or contractor complies with the requirement (to the extent that it is relevant). 2.2 ensure your nominees must be: a) a director or employee of yours; or b) a credit representative of yours; or c) a credit representative of a company which is a related body corporate to you which holds an ACL; or d) a credit licensee; or e) a director or employee of a corporate credit licensee who which aggregates through you; or f) a credit representative of another Nominee of yours who is also a credit licensee; or g) a credit representative of a corporate credit licensee which aggregates through you; 2.3 disclose to any person for whom you or your Nominees act as intermediary or adviser that you or your Nominees will receive a commission from us and comply with any laws which oblige you to disclose further details of such commission; 2.4 if you charge, or may charge, a customer a fee for submitting a loan application to us (whether a brokerage fee or application fee or any other type of fee), also obtain a written acknowledgment signed by each customer acknowledging that such a fee will, or may be, payable to you by that customer; 2.5 immediately inform us if you suspect that any customer or Nominee may not be the person they claim to be, or may be involved in or connected with any criminal, illegal or terrorist activity, or may intend to use the loan or their position in connection with any such activity or for the purposes of money laundering or terrorism financing; 2.6 ensure you meet the Data Security Requirements: 2.6.1 Where you hold any information relating to a customer or potential customer which is no longer necessary for the performance of the Services, you will destroy such information or return to us as directed. 2.6.2 Despite any other provision of this Agreement, nothing prevents you from: (b) using Personal Information which you have collected for your own purposes provided you have first obtained any necessary consent from, and made any necessary disclosure to, those customers; disclose information regarding the relationship between you and us and the income derived under this Agreement to: (i) (ii) explain the relationship between you and us, to customers and potential customers; facilitate a sale or proposed sale of the trailing commission, the Intermediary's business, or shares in the Intermediary, or any similar activity; Intermediary Agreement - effective 1 January 2015 Page 30
2.7 comply with: (b) (c) (d) (e) (iii) (iv) abide by the law, an order of the court, or by the binding requirements of a stock exchange; disclose to the Intermediary s legal or accounting advisers for the purposes of obtaining advice, or to auditors for audit purposes. all applicable laws, licences and relevant codes of conduct or practice, (including, without limitation, the Mortgage Broker Code of Conduct -see Annexure), applicable to you; all our lending policies and Procedures as determined by us from time to time; and all prudent and generally acceptable banking and financial services industry practices in the performance of the Services; and without limiting the above, Do Not Call Register Act 2006 (Cth) and take all reasonable steps to ensure that your employees and Nominees, comply with that Act; and without limiting the above, Part 6 (Industry codes and Industry standards) of the Telecommunications Act 1997 (Cth) in relation to telemarketing activities (as that term is defined in that Act); 2.8 attend and arrange for each Nominee to attend such training as we may require in connection with the Services, Procedures, Systems and Products from time to time; 2.9 act honestly in your dealings with customers and represent fairly and accurately the terms and conditions of any Product; 2.10 promote our reputation and our Products and neither you or any of your Nominees may engage in any conduct which may adversely affect our good name or business reputation, provided that this clause does not prevent or restrict you from offering products of our competitors (including loan, credit card and savings products); 2.11 remain responsible, at your expense, for your Nominees, servants, agents, employees and contractors whilst carrying out the Services. This includes claims for injuries, loss, damage or compensation and payment of all taxes (including GST, FBT and PAYE) payable in connection with your business or employees, or those of any Nominee; 2.12 maintain accurate details including business, mail and email addresses and contact phone numbers, for all Nominees accredited by us, and immediately advise us of any changes to such details; 2.13 immediately inform us when a Nominee has resigned or when their employment has been terminated. You must also inform us if termination of employment of that Nominee was a result of misconduct or fraudulent activity; 2.14 Immediately inform us when you become aware that a Nominee has ceased to be a NCCP Compliant Nominee; 2.15 where you have advised us that the Nominee has been dismissed due to misconduct or fraudulent activity, we will immediately withdraw our approval of that Nominee and suspend subsequent trail payments in relation to those loans and/or any entitlement to benefits in relation to referrals you or your Nominees referred to us, that have been identified to contain fraudulent or misleading information in accordance with Schedule A clause 11.6 of Terms applicable to payment of all commissions. Furthermore, we reserve the right to suspend all subsequent trail payments in Intermediary Agreement - effective 1 January 2015 Page 31
relation to that Nominee s total loan portfolio pending investigation of that Nominee s loans. We may also require you to refund to us all commission paid to date, in respect to those loans or referrals, that have been identified to have contained fraudulent or misleading information; 2.16 maintain professional indemnity insurance that meets, as a minimum, the following criteria : a) The Insurer must be an Authorised Insurer under Section 12 of the Insurance Act 1973 or by virtue of determinations made by Australia Prudential Regulation Authority (APRA) under items 4 and 5 of Schedule 2 of the General Insurance Reform Act 2001 or the Insurer must be Lloyd s of London. Please note that where the Insurer is shown as Lloyd s of London and others this may not be acceptable as others may not be Authorised Insurers as detailed above, also known as unauthorised foreign insurers. b) The Insurer must maintain a credit rating, as provided by Standard & Poors, of A as an absolute minimum. c) The limit and/or sum insured must not be less than: Total Annual Gross Fundings/Settlements Minimum Insured Amount Up to and including $200,000,000 $2,000,000 Greater than $200,000,000 $5,000,000 d) The limit and/or sum insured will be determined by us and we may vary this from time to time. e) Where your indemnity insurance policy extends to insure any agents, nominees, sub-agents and/or consultants such persons and/or companies must be named as an Insured under the policy. f) The indemnity insurance policy must be in a form approved by us. You must provide us with the following documentation, within 30 days of our request: (i) (ii) a copy of your entire indemnity insurance policy - this includes the Wording, Schedule and any endorsements/alterations attached thereto; and a Certificate of Currency from either the Insurer or the Authorised Underwriting Agent. A Certificate from any other person, company, agent or broker is not acceptable; 2.17 maintain membership of an Approved Industry Association and ensure that any Nominee is and remains a member or associated member of that Approved Industry Association; 2.18 maintain membership of an External Dispute Resolution Scheme (EDRS) approved by the Australian Securities and Investments Commission (ASIC) and by us ( Approved EDR Scheme ) and ensure that any Nominee is and remains a member of the Approved EDR Scheme and must comply with any finding or recommendation made under the Approved EDR Scheme; 2.19 make use of our systems as provided to you from time to time in the performance of the Services, including electronic means such as "faxstream", CommBroker Site functions, including Loan Tracking and Electronic Lodgement (COLA) Applications (or any other Home Loan Electronic Lodgement Application approved by us, if Systems are available for this purpose; 2.20 promptly forward to us all completed applications, associated documents (with your identifying number inserted) and money received and in any event within 48 hours of receipt; Intermediary Agreement - effective 1 January 2015 Page 32