EXHIBIT 10.12
PROCESSING SERVICES AGREEMENT
BETWEEN
VITAL PROCESSING SERVICES L.L.C.
and
NOVA INFORMATION SYSTEMS, INC. DATED
July 1, 1998
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VITAL PROCESSING SERVICES AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into this ______
day of ____________ by and between VITAL PROCESSING SERVICES L.L.C. ("VITAL"),
of Tempe, Arizona, and NOVA INFORMATION SYSTEMS,, INC. ("NOVA"), of Atlanta,
Georgia, and is effective July 1, 1998.
PREAMBLE
The terms and provisions of this Agreement provide for the utilization
by NOVA of the VITAL System for card and merchant authorization services as
described in Exhibit "A" hereto and for merchant accounting and clearing
services as described in Exhibit "B" hereto and in the VITAL Manuals. Merchant
authorization services and merchant accounting and clearing services are
hereinafter referred to as "Merchant Services". To provide for the use of the
Merchant Services by NOVA and in consideration of the terms and provisions
specified in this Agreement, the parties hereto agree as follows:
1. SERVICES PROVIDED BY VITAL
1.1 VITAL will make available to NOVA Merchant Services some or all of
which NOVA presently agrees to use, and others of which VITAL offers to NOVA for
its future use. NOVA shall from time to time designate which of the Merchant
Services described herein and in the Manuals it elects to use.
1.2 In performing the Merchant Services contemplated under this
Agreement, and in the selection and use of facilities, equipment. machines and
personnel required for such performance, and in the custody and safekeeping of
materials furnished to VITAL by, or acquired by VITAL on behalf of NOVA in
connection therewith, VITAL shall exercise ordinary care and diligence, subject
to the limitations set forth in this paragraph. The parties recognize that there
are no universally accepted industry standards which are commonly accepted as a
standard of ordinary care and diligence for the performance of the Merchant
Services. Accordingly, NOVA agrees that VITAL shall be deemed to be exercising
ordinary care and diligence in the performance of the services required of VITAL
under this Agreement if VITAL follows the procedures and practices set forth in
the Manuals, as such Manuals may be revised from time to time. NOVA will be
provided copies of all revisions made from time to time to the Manuals.
1.3 VITAL will provide, upon the written request of NOVA, such
personnel to assist in the conversion or start-up of NOVA's accounts for the
merchant accounting and clearing services and for such other purposes within the
scope of this Agreement (i.e. Training) as may be deemed desirable by NOVA on an
out-of-pocket expense basis for a period of one hundred and twenty (120) days
commencing seventy-five (75) days prior to and ending forty-five (45) days
following the conversion or start-up date. Before the beginning and after the
end of such period, VITAL will furnish personnel for such assistance, additional
training and consultation at its then current per diem or hourly charged basis
for such services, plus reasonable out-of-pocket expenses. For purposes of
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this paragraph, out-of-pocket expenses shall be construed to include, but not be
limited to, travel, lodging, ground transportation, meals and related expenses.
1.4 VITAL agrees to provide or make available the Merchant
Services in accordance with the performance standards set forth in Exhibit "C".
1.5 VITAL will use best efforts to meet reasonable implementation
dates for acquisitions/conversions as required by NOVA.
1.6 VITAL will supply information and back-up documentation for
derivation of costs and time estimates for custom-code projects.
(a) VITAL will supply documented plans for tests,
encompassing all aspects of the projects to assure, to the best of their
ability, smooth implementation for custom-code projects and/or system
enhancements. The purpose is to minimize the impact to NOVA operations and
minimize utilization of NOVA resources to resolve VITAL major production
problems and expenses incurred due to VITAL implementations.
(b) NOVA will provide VITAL with written documentation on all
custom-code requests including requirements and test plans in an adequate time
frame prior to requested implementation date. VITAL will provide to NOVA
cost/time estimates in a reasonable time period after VITAL has received
complete requirements documentation from NOVA.
1.7 VITAL agrees to retain insurance on its properly for the
replacement value of such property and to retain general liability insurance in
an amount not less than $20,000,000.00 and errors and omissions insurance that
covers VITAL'S errors and omissions in its performance under this Agreement in
an amount not less than $5,000,000.00 and providing for, among other things.:
(a) Coverage for any and all amounts necessary to replace
magnetic tapes and reconstruct information stored on such magnetic tapes or any
other medium whatsoever or other evidence of any transactions received by VITAL
and required to be maintained by VITAL pursuant to this Agreement;
(b) Coverage for additional expenses incurred by VITAL which
are required to allow VITAL to continue processing and servicing in accordance
with this Agreement and in accordance with VITAL'S past custom and practice: and
(c) Coverage for any and all amounts necessary to replace all
processing units, computer consoles or other computer hardware of VITAL used in
connection with the processing activities of VITAL under this Agreement.
1.8 Throughout the term of this Agreement, VITAL agrees to
maintain and retain: (1) adequate backup of all of its software in the form of
the offsite storage of its
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source and object codes as well as all documentation necessary to reconstruct
the software; (2) offsite storage for each of NOVA'S data files used in
connection with processing services provided by VITAL under this Agreement; (3)
a backup power supply system to guard against electrical outages; and (4)
adequate backup for on-line communications, provided that NOVA maintains an
appropriate modem for such on-line communications as specified by VITAL.
1.9 Concepts. ideas, know-how, techniques, software, including,
but not limited to, programs, program listings and programming tools and
documentation. including, but not limited to, manuals, techniques, reports and
drawings developed by VITAL and used by VITAL to fulfill its obligations under
this Agreement shall be the sole and exclusive property of VITAL even if NOVA
assisted VITAL in the development or modification of such properly, and NOVA
shall have no interest whatsoever in and to such property. Notwithstanding the
foregoing, in such event NOVA has paid VITAL for the development of any such
properly, NOVA shall be given a fully paid perpetual license in such properly
for its use and the use of its customers unless VITAL sets forth in writing what
other rights NOVA shall have in such properly before the development thereof.
1.10 Vital agrees to pay NOVA a signing bonus of $175,000 as an
inducement to enter into this Agreement for Merchant Services.
Further, VITAL covenants and agrees to maintain and retain
throughout the term of this Agreement commercially reasonable offsite disaster
recovery capabilities which permit VITAL to recover from a disaster and continue
providing the Merchant Services required under this Agreement. VITAL agrees to
test the operation and effectiveness of its disaster recovery plan on a periodic
basis to ensure its effectiveness in providing disaster recovery capability.
2. OBLIGATIONS OF NOVA
2.1 Insofar as the performance of Merchant Services under this
Agreement by VITAL requires data, documents information or materials of any
nature to be furnished, in whole or in part, by NOVA or NOVA'S employees, agents
or other representatives, or which requires other services to be performed by
NOVA or NOVA'S employees, agents or other representatives, NOVA hereby agrees to
furnish or cause its employees, agents or other representatives to furnish, all
such data, documents, information and materials, and to perform all such
services within such time or times, and in such form or manner as is necessary
in order to enable VITAL to perform Merchant Services hereunder in a timely
manner.
2.2 NOVA agrees during the term of this Agreement to maintain a
correspondent demand deposit account ("clearing account") with Columbus Bank and
Trust Company, Columbus, Georgia, and agrees to adhere to the current
obligations as required by Columbus Bank and Trust Company.
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2.3 NOVA agrees that during the term of this Agreement, VITAL
will be the exclusive provider of merchant accounting and clearing services as
described in Exhibit "B" hereto except for the following:
a) Any existing merchant accounting and clearing services not
being provided on the effective date of this Agreement including but not limited
to the Mellon portfolio.
b) Merchant accounting and clearing services that NOVA is
contractually obligated to process on another processor resulting from a
purchase of a portfolio or a joint venture entered into by NOVA or another
similar transaction after the effective date of this Agreement
c) Merchant accounting and clearing services provided by a
proprietary system developed or purchased by NOVA.
2.4 Preferred POS Network. NOVA agrees that the VITAL POS System
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will be the preferred outsource POS network for NOVA.
3. PRICES FOR VITAL SERVICES
3.1 (a) VITAL's fees for Merchant Services provided hereunder are
set forth in Exhibit "A" and Exhibit "B". VITAL will invoice NOVA for the fees
and expenses incurred in connection with the Services provided to NOVA as of the
end, of each calendar month. Such invoice shall indicate type of service, number
of transactions and other relevant information. NOVA shall designate a NOVA bank
account (hereinafter referred to as "the designated account") with respect to
which VITAL shall have the authority to debit the account for the fees and
expenses. VITAL shall debit NOVA's designated account the full amount of the
fees and charges shown on the invoice fifteen (15) days after the date of the
invoice; provided, however, that in the event that NOVA has provided VITAL with
written notice as to any disputed fees and/or charges, VITAL shall not debit
NOVA's designated account for the disputed amount until such time as the dispute
has been resolved to both parties' satisfaction. VITAL may modify its billing
procedures upon ninety (90) days notice to NOVA. Any modification to these
procedures will not shorten the period of time that the fees and charges are
payable.
(b) It is understood and agreed between the parties hereto
that the fees provided for in this Agreement are exclusive of any and all
applicable taxes or assessments, whether designated as sales taxes, use taxes,
ad valorem taxes, properly taxes or by some other name or designation, and
including any interest or penalties thereon, which may be levied upon or
assessed by any governmental or taxing jurisdiction in connection with the
performance of services hereunder for NOVA or the provision to NOVA of any
equipment necessary for the performance of services hereunder for NOVA, and
exclusive of any expenses which expenses, by the express terms hereof, are to be
paid by NOVA; provided, however, that NOVA shall not be
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required to pay or reimburse VITAL for net income or excess profit taxes or
other taxes measured by the net income of VITAL or any personal property taxes
levied upon the value of any goods or materials prior to delivery of such goods
or materials to NOVA. VITAL shall provide written notice to NOVA in the event
any such tax, assessment or expense is due and owing. In the event of the
payment of or for any such tax, assessment or expense by VITAL for NOVA, NOVA
shall in turn pay VITAL for such items.
3.2 The agreed upon fees stated in Exhibit "B" shall be guaranteed for
the entire initial term of this Agreement VITAL shall have the right to change
any of the fees specified in Exhibit "H" at the end of said period or at any
time and at all times subsequent thereto, provided that such increase shall be
no more than 8% of the fees in effect and that VITAL shall give NOVA not less
than sixty (60) days advance written notice, and each such change shall become
effective after such sixty (60) day period and each such change shall be
guaranteed by VITAL to remain at that level for a period of at least one year
from the effective date thereof.
3.3 Any other provision herein to the contrary notwithstanding, the
fees paid by NOVA for the Merchant Services provided herein may be increased to
directly offset any increase in rates charged by any communication common
carriers. VITAL shall give NOVA ninety (90) days written notice of any such
increase or the amount of notice that VITAL receives of such increase if such
notice to VITAL is less than ninety (90) days. Any such increase payable by NOVA
shall become effective on the same day as the increase in rates charged by the
communications common carrier becomes effective.
3.4 Any other provision herein to the contrary notwithstanding, the
fees to be paid by NOVA may be increased if any change in applicable law or the
rules, regulations or operating procedures of either VISA, MasterCard, other
supported plans, or any applicable federal or state governmental agency or
regulatory authority results in such cost increase. VITAL shall give NOVA ninety
(90) days written notice of any such increase or the amount of notice that VITAL
receives of such increase if such notice to VITAL is less than ninety (90) days.
Any such increase payable by NOVA shall become effective on the same day as the
change in such law, rules, regulations or operating procedures resulting in such
increase becoming effective.
3.5 NOVA agrees to provide VITAL with at least one hundred and eighty
(180) days prior written notice of any conversion from VITAL to another
processor.
4. TERM OF THE AGREEMENT
4.1 The initial term of this Agreement shall begin on July 1, 1998,
and shall continue in full force and effect for a period of three (3) years from
such date ("initial term").
4.2 Upon the expiration of the initial term of this Agreement, this
Agreement shall be automatically renewed for an indefinite number of consecutive
one (1) year terms thereafter unless either party gives the other party one
hundred eighty (180) days
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written notice of its intent for this Agreement not to renew or until and unless
terminated as provided in Section 4 hereinbelow.
4.3 During the initial term of this Agreement, or any subsequent term
of this Agreement. NOVA may terminate this Agreement without cause by giving
VITAL at least one hundred and eighty (180) days written notice. In the event
NOVA elects to terminate this Agreement prior to the end of the initial term
pursuant to this paragraph 4.3, NOVA shall pay VITAL, at the time notification
is given to VITAL, a termination fee of three hundred thousand dollars
($300,000):
4.4 If the period of time to deconvert after the notice of termination
exceeds the one hundred eighty (180) days provided for in Paragraph 4.2, the
service will thereafter be provided by VITAL on a month-to-month basis with no
minimums and pricing VITAL'S standard pricing, but in no event will such
month-to-month relationship go beyond twelve (12) months of the termination date
unless agreed to by VITAL in writing. The standard pricing may be raised by
VITAL 10% at the end of the initial six (6) months of the month-to-month and 10%
every six (6) months thereafter with no notice to NOVA.
4.5 VITAL may terminate this Agreement in the event NOVA fails to make
or to adequately and timely provide for the payment of fees and expenses due
hereunder, but only if VITAL gives NOVA written notice of such failure and NOVA
fails to remedy such failure within thirty (30) days after its receipt of said
notice. Upon the expiration of the thirty (30) day period provided for above,
VITAL may terminate this Agreement by giving NOVA written notice, which
termination shall be effective immediately. If such failure to pay is remedied
by NOVA within such thirty (30) day period, then this Agreement shall continue
as though no such notice had been given.
4.6 If either party fails to observe, keep or perform any term or
condition of this Agreement, except for the performance standards in Exhibit "C"
required to be observed, kept or performed by that party, the other party, in
addition to any other rights and remedies it may have, shall have the right to
terminate this Agreement without paying a termination fee; provided, however,
that the party seeking to terminate the Agreement gives the other party a
written notice of such failure claimed to be a breach of terms and conditions of
this Agreement, and the party receiving said notice fails to remedy the breach
within thirty (30) days after its receipt of said notice. If the breach is not
remedied by the defaulting party within the thirty (30) day period provided for
above, the non-defaulting party may terminate this Agreement by giving the
defaulting party written notice effective immediately. If the breach is remedied
by the defaulting party within such thirty (30) day period, then this Agreement
shall continue as though no such notice had been given. If VITAL terminates the
Agreement pursuant to Paragraph 4.5 and 4.6, VITAL may terminate all services
provided pursuant to the Agreement.
4.7 Termination of this Agreement shall not terminate NOVA's
obligations to pay VITAL fees for all services performed and expenses incurred
under the Agreement prior to the discontinuance of performance of Merchant
Services by VITAL hereunder.
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4.8 Upon termination, unless such termination is pursuant to Paragraph
4.5 or 4.6, VITAL shall cooperate with NOVA in transferring processing promptly
and smoothly to any other processor designated by NOVA and VITAL shall make
available to such processor all information VITAL possesses regarding NOVA's
customers and accounts in such form as NOVA may reasonably request, together
with adequate instructions concerning the format and means of accessing NOVA's
data. If NOVA elects to terminate for any reason other than nonperformance of
VITAL, NOVA shall pay VITAL the deconversion fee listed in Exhibit "B" and shall
pay VITAL at VITAL's current per diem or hourly charged rates for all services
provide by VITAL at NOVA's request and with NOVA's approval in connection with
such deconversion, and NOVA shall pay VITAL for all expenses actually incurred
by VITAL in connection therewith, including costs of magnetic tapes, disks,
punch cards or other storage devices or media transferred by VITAL. In such an
event, NOVA shall also pay VITAL for any and all supplies and forms which bear
NOVA's name or other identifying xxxx or logo and were acquired by VITAL for
NOVA's benefit which, as a result of such termination and deconversion, shall
not be used by VITAL to provide services to NOVA hereunder, including but not
limited to, supplies and forms, such as periodic statements, which would have
been provided by VITAL to NOVA without additional charge or expense if VITAL had
continued to provide services to NOVA hereunder. Any payments to be made by NOVA
to VITAL under this paragraph shall be made within thirty (30) days of the
receipt by NOVA of in invoice from VITAL including such fees and expenses.
5. CONFIDENTIAL INFORMATION
5.1 All information of a business nature relating to NOVA's
assets, liabilities, credit programs, customers or other business affairs
disclosed to VITAL by NOVA or disclosed in connection with this Agreement is
confidential. VITAL shall not, without the express written consent of NOVA,
disclose, or permit access to any such information by any person, firm or
corporation.
VITAL shall cause its officers, employees and agents to take
such action as shall be necessary, or advisable to preserve and protect the
confidentiality of such information. This shall not prohibit VITAL from
disclosing such information to persons required to have access thereto for the
performance of this Agreement; provided. however, that VITAL shall inform such
persons of the confidential nature of such information, and such persons shall
agree to be bound by the provisions of this Section 5 and not to use or disclose
such information to any other person. All such information, including records
created therefrom by VITAL, shall remain the property of NOVA, and VITAL shall
provide such information to NOVA or to another party upon NOVA's request.
Immediately upon (i) the written or verbal request of NOVA or (ii) the
termination of this Agreement for any reason, VITAL shall promptly return to
NOVA all copies of such confidential information and shall destroy all copies of
any analyses, compilations, studies or other documents prepared by it or for its
use containing or reflecting, or developed with respect to, any such
confidential information.
5.2 NOVA agrees to hold confidential and to use only in
connection with the
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services provided under this Agreement all information furnished to NOVA by
VITAL including, but not limited to, VITAL system design, programming
techniques, training materials or other unique techniques.
5.3 The parties agree that the terms and conditions of this Agreement,
including the fees for Merchant Services provided hereunder which are set forth
in Exhibit "A" and Exhibit "B" hereto, are confidential. Neither party shall,
without the express prior written consent of the other party, disclose such
terms and conditions (including fees) to any other unaffiliated person, firm or
corporation.
5.4 VITAL and NOVA's obligations and agreements under this paragraph
shall not apply to any information supplied that:
(a) was known to either party prior to the disclosure by the
other, or
(b) is or becomes generally available to the public other
than by breach of this Agreement,
(c) otherwise becomes lawfully available on a nonconfidential
basis from a third party who is not under an obligation of confidence to either
party, or
(d) is independently developed by either party without the
use of information provided by the other party.
5.5 It is understood and agreed by the parties hereto that the
performance of said services are subject to audit and/or examination by
authorized representatives of NOVA, VITAL, auditors of either party and/or other
appropriate federal or state regulatory agencies, and that either party is and
shall be authorized to submit or furnish to any such representative or
regulatory agency reports, information, assurances or other data as may be
required or requested by them under applicable laws and regulations; provided,
however, that the party that is subject to such request or requirement shall
provide the other party with prompt prior written notice of such request or
requirement so that the other party may seek a protective order or other
appropriate remedy and/or waive compliance with the terms of this Section 5. In
the event that such protective order or remedy is nor obtained, or that the
other party waives compliance with the provisions hereof, the party that is
subject to such request or requirement agrees to furnish only that portion of
the confidential information which they are advised by written opinion of
counsel is legally required to be disclosed and to exercise best efforts to
obtain assurances that confidential treatment will be accorded such confidential
information.
5.6 The parties agree that the provisions of this Section 5 shall
survive the termination of this Agreement for three (3) years after the date of
said termination.
6. NETWORK CONFIGURATION
6.1 NOVA and NOVA merchants will access VITAL's system utilizing data
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communication protocols, transaction formulas and devices certified by VITAL.
6.2 NOVA and/or NOVA merchants will be responsible for the
installation, servicing and maintenance of equipment at NOVA or it's merchant's
facilities, and will be responsible for the connection of those devices to the
network in compliance with VITAL's requirements.
6.3 VITAL reserves the right to change all or part of the protocols
and the network configuration used by VITAL in providing the Merchant Services,
provided that if any change in the network configuration would require NOVA or
its merchants to change data communication protocols or communication networks,
VITAL will provide NOVA with one hundred eighty (180) days written notice.
7. AUDIT PROCEDURE
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7.1 VITAL acknowledges that its performance of the Services for NOVA
hereunder is subject to audit or examination by the authorized representatives
of NOVA, NOVA's auditors, federal bank examiners and other federal and state
regulatory agencies. If VITAL is given written notice at least thirty (30) days
in advance of a requested audit or examination, VITAL will allow such auditors
or examiners access to VITAL's place of business during normal business hours
and furnish such auditors or examiners with such information, data and reports
related to the Services provided hereunder as is reasonably requested by them.
NOVA will pay VITAL on a time and materials basis, at VITAL's then standard
rates, for VITAL's compliance with any such audit or examination by authorized
representatives or auditors of NOVA. If the request for an audit or examination
concerning NOVA'S business does not originate from NOVA, VITAL will notify NOVA
in writing of such request (which notice will include a copy of such request)
and shall comply only upon NOVA's written verification of its obligation to pay
VITAL as required hereby in connection with such audit or examination.
Notwithstanding anything in this Section 7 to the contrary, VITAL will not be
required, in connection with any such audit or examination, to furnish, or
provide access to, any information that is not directly related to NOVA's
business or the Services provided hereunder.
7.2 In the event the findings of any such audit or examination require
any changes or revisions to VITAL's operations, NOVA shall have the right to
request that any such changes be made and VITAL shall cooperate with NOVA to
make such requested changes, on such schedule as may be acceptable to both VITAL
and NOVA. The costs of making changes requested or required by NOVA or its
authorized representatives or auditors shall be born by NOVA.
8. COMPLIANCE WITH OPERATING RULES AND REGULATIONS
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8.1 VITAL and NOVA will be responsible for knowing and conforming in
their respective capacities to the bylaws, rules, regulations and other
requirements established by Visa, MasterCard, Discover, American Express, Diners
Club, Carte
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Xxxxxxx, JCB, ETC Scan check authorization service, debit network and other like
entities that apply to the provision of Services hereunder. Each party will be
responsible for its own costs of complying therewith.
8.2 Neither VITAL nor NOVA will be responsible for failure of the other
party, the other party's merchants, or the employees and subcontractors thereof,
to comply with any of the rules or regulations referred to in Section 8.1.
8.3 For the purposes of compliance with the Visa or the MasterCard
operating regulations, NOVA appoints VITAL as its agent to use the Visa or the
MasterCard data processing and communication system, and agrees to register
VITAL as such agent pursuant to such regulations. To the extent any other credit
card association, or credit card issuing company, at any time requires a similar
agent designation and registration, NOVA will so designate and register VITAL in
respect to NOVA's transactions.
9. INDEMNIFICATION
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9.1 NOVA agrees to indemnify and hold VITAL harmless from and against
any and all loss, liability, cost, damage and expense (including reasonable
legal and accounting fees and expenses) to which VITAL may be subjected or which
it may incur in connection with any claims which arise from or out of or as the
result of (i) NOVA's breach of this Agreement; (ii) performance by NOVA of its
duties and obligations under this Agreement; or (iii) the act, negligence or
willful misconduct of NOVA. Unless such claim is the result of the act,
negligence or willful misconduct of VITAL, NOVA shall bear all risk of loss of
items, records, data and materials, including magnetic tapes, during transit
from NOVA to VITAL's location (or that of its agents or subcontractors) or from
NOVA's location to VITAL.
9.2 Year 2000 Indemnification. VITAL shall be liable to and shall
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indemnify and hold NOVA harmless from and against any and all loss, liability,
cost, damage or expense (including reasonable legal and accounting fees and
expenses) incurred by NOVA resulting from the inability of THE VITAL SYSTEM to
accurately calculate, compare and sequence date data involving the years 1999,
2000 and later dates provided that NOVA utilizes THE VITAL SYSTEM in accordance
with the Manuals or other written operating materials provided to NOVA. Further,
in the event that THE VITAL SYSTEM fails to accurately calculate, compare and
sequence date data involving the years 1999, 2000 and a later date, and the
failure has a material and adverse impact on NOVA, NOVA shall have the right to
terminate this Agreement in accordance with Section 4.6 above, provided the
failure does not result from NOVA's use of THE VITAL SYSTEM in a manner
inconsistent with the Manuals or other written operating instructions provided
to NOVA.
9.3 NOVA shall indemnify and hold VITAL harmless from and against any
and all loss, liability, cost, damage and expense (including reasonable legal
and accounting fees and expenses) or claims in respect thereof asserted against
VITAL by third parties and arising out of information provided to VITAL by NOVA,
or by officers,
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employees and agents of NOVA, or arising out of the use of such information when
furnished by VITAL to NOVA, to merchants affiliated with NOVA, to other third
persons at NOVA'S request, or to officers, employees and agents of NOVA, unless
such loss, damage or expense arises out of the act, negligence or willful
misconduct of VITAL.
9.4 VITAL shall be liable to and shall indemnify and hold NOVA and the
applicable clearing bank(s) harmless from and against any and all loss,
liability, cost, damage and expense (including reasonable legal and accounting
fees and expenses) to which NOVA or the applicable clearing bank(s) may be
subjected or which they may incur in connection with any claims which arise from
or out of or as the result of (i) VITAL's breach of this Agreement; (ii)
performance by VITAL of its duties and obligations under this Agreement; or
(iii) the act, negligence or willful misconduct of VITAL.
9.5 Notwithstanding any other provision hereof, VITAL shall not be
liable for failure to provide Services if such failure is due to any cause or
condition beyond the reasonable control of VITAL or of any applicable
subcontractors or permitted outsources. Such causes or conditions shall include,
but shall not be limited to, acts of God or of the public enemy, acts of the
Government in either its sovereign or contractual capacity, fires, floods,
epidemics, quarantine restrictions, strikes and freight embargoes.
9.6 VITAL shall be entitled to rely upon and use, without
verification, any and all information, data and instructions at any time
submitted to VITAL by NOVA or by Visa and/or MasterCard and having to do with
NOVA or its accounts, and VITAL shall have no responsibility or liability
whatsoever for the accuracy or inaccuracy thereof, for the wording or text
authored or submitted by NOVA to VITAL for the mailers or periodic statements to
be furnished by VITAL or for other purposes, for the wording or text appearing
on any forms, bankcards or other materials furnished by NOVA to VITAL or for
whether or not such information, data, instruction, wording or text complies
with applicable laws and regulations; provided, however, that in the case of
information, data or instructions received from NOVA, VITAL has received such
information, data or instructions from an employee of NOVA previously identified
by an officer of NOVA as authorized to communicate such information, data or
instructions.
9.7 NOVA agrees to randomly check all output information produced by
VITAL, including but not limited to, statements and interchange qualification
level to determine if such information is correct, and will promptly report any
errors discovered therein to VITAL. In no event shall VITAL be liable with
respect to any loss, liability, cost, damage or expense caused by VITAL's
failure to perform under this Section 9.6 but not reported by NOVA to VITAL
within ninety (90) days of when such failure to perform is known or should have
been known to NOVA.
9.8 In no event shall VITAL be liable with respect to any loss,
liability, cost damage or expense arising out of a claim by NOVA or by third
parties in connection with the data, computations and services provided and/or
performed by VITAL hereunder to
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the extent of such data, computations and/or services as to which claim arises
were provided and/or performed in accordance with: (i) NOVA's written
requirements and/or instructions in such regard, including, but not limited to,
NOVA's memoranda, data entry instructions or computer field instructions; or
(ii) NOVA's written concurrence that such data, computations and services
provided or performed or to be provided or performed comply with NOVA's
previously communicated requirements and/or instructions in such regard.
9.9 IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY SPECIAL,
INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, INCLUDING BUT NOT LIMITED TO,
LOST PROFITS, EVEN IF SUCH PARTY KNEW OF THE POSSIBILITY OF SUCH DAMAGES.
THE EXPRESS PROVISIONS HEREOF ARE IN LIEU OF ALL OTHER WARRANTIES,
WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATIONS,
THE WARRANTY OF MERCHANTABILITY AND THE WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE.
9.10 The total liability of VITAL hereunder to NOVA or to any party
claiming by, through or under NOVA, shall be limited, for all claims asserted
during the period from the effective date hereof to the first anniversary of the
effective date, to the aggregate amount of fees for the three most recent
monthly billing amounts prior to the occurrence resulting in the claim and for
claims asserted during subsequent one year periods beginning on the first
anniversary of the date hereof, to the aggregate of the fees for the three most
recent monthly billing amounts prior to the occurrence resulting in the claim.
10. NOTICES
10.1 Any written notice required or permitted to be given by NOVA to
VITAL hereunder shall be addressed to:
VITAL PROCESSING SERVICES L.L.C.
Attention: General Counsel
0000 Xxxxx Xxxxx Xxxx
Xxxxx, XX 00000
(000) 000-0000 TEL
(000) 000-0000 FAX
and any written notice required, or permitted to be given by VITAL to NOVA under
this Agreement shall be addressed to:
NOVA INFORMATION SYSTEMS, INC.
Attention: Xxxxxx Xxxxxxxxxxx
Xxx Xxxxxxxxx Xxxxxxx, Xxx. 000
Xxxxxxx, XX 00000
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(000) 000-0000 TEL
(000) 000-0000 FAX
10.2 All written notices provided for hereunder shall be delivered in
person or shall be sent by courier or by certified mail with a return receipt
requested and shall be effective when delivered or when deposited in the United
States Post Office, postage prepaid and addressed as provided above. The parties
to this Agreement, by notice in writing, may designate another address or office
to which notices shall be given pursuant to this Agreement.
11. DEFAULT
11.1 A party shall be deemed to be in default under this Agreement:
(a) If its obligations with respect to confidential information
provided in Article 5 are breached and such breach is not cured within sixty
(60) days or notice thereof, except that if the failure is one that by its
nature cannot be cured in sixty (60) days, the breaching party must make
reasonable efforts to minimize the breach and to prevent the recipient of the
confidential information from using same;
(b) If it files a voluntary petition for reorganization under
the Bankruptcy Code, or if a petition for such a reorganization is filed against
it by a third party and is not dismissed within ninety (90) days.
11.2 If a party is in default hereunder, the other party may terminate
this Agreement, effective upon written notice to the party in default. The
non-defaulting party shall have the right to receive payment of any amounts
owing to it at the time of termination.
12. AGENCY
------
12.1 Neither party has the authority to make any statement,
representation, warranty or other commitment on behalf of the other, and this
Agreement does not create any agency, employment, partnership, joint venture or
similar relationship between the parties.
13. ASSIGNMENT
----------
13.1 This Agreement shall not be assignable in whole or in part by
NOVA or VITAL without the other party's prior written consent, except that NOVA
shall have the right to assign this Agreement to a parent, affiliate or
subsidiary without the written consent of VITAL, but NOVA agrees to provide
VITAL with notice of such assignment. VITAL may, however, without NOVA's prior
written consent, subcontract with other entities with respect to the provision
of Merchant Services hereunder, but no such subcontracts shall alter NOVA's
rights against VITAL under this Agreement or VITAL's obligations hereunder.
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14. REPRESENTATION
14.1 Each party to this Agreement hereby represents and warrants to
the other that it has the full right, power and authority to enter into and
perform this Agreement in accordance with all of the terms, provisions,
covenants and conditions hereof and that the execution and delivery of this
Agreement has been duly authorized by proper corporate action.
15. EXCLUSIVE REMEDY
----------------
15.1 Any delay, waiver or omission by NOVA or VITAL to exercise any
right or power arising from any breach or default of the other party in any of
the terms, provisions or covenants of this Agreement shall not be construed to
be a waiver by VITAL or NOVA of any subsequent breach or default of the same or
other terms, provisions or covenants on the part of the other party.
16. BINDING NATURE
--------------
16.1 This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their representatives and their respective
successors and assigns.
17. ENTIRE AGREEMENT
----------------
17.1 This Agreement constitutes the entire agreement between the
parties hereto relating to the subject matter hereof, and all prior
negotiations, agreements and understandings, whether oral or written, are
superseded hereby. No modification or amendment to this Agreement shall be
effective unless and until set forth in writing and signed by both parties
hereto.
18. GOVERNING LAW
-------------
18.1 This Agreement, its validity, construction and effect, will be
governed by and interpreted under the laws of the State of Georgia, without
giving effect to the provisions thereof regarding conflicts of laws.
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IN WITNESS WHEREOF each of the parties has caused this Agreement to be
executed on its behalf by its duly authorized officers as of the day, month and
year first above written.
VITAL PROCESSING SERVICES, L.L.C.
By: [SIGNATURE APPEARS HERE]
-------------------------------
Title: EVP
----------------------------
NOVA INFORMATION SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
-----------------------------
Title: Chief Information Officer
---------------------------
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