EXHIBIT 10.1
JOINT MARKETING AND SERVICING AGREEMENT
BETWEEN
FIRST HAWAIIAN BANK AND THE PATHWAYS GROUP, INC.
FOR
KEIKI CARD FEASIBILITY DEMONSTRATION
WHEREAS, The Pathways Group, Inc. (hereinafter "Pathways"), a Delaware
Corporation located at 00000 XX 000xx Xxxxxx, Xxxxxxxxxxx, XX 00000, has
developed certain proprietary methods of (1) programming smart cards and smart
card terminals for secure transactions and (2) processing smart card
transactions; and
WHEREAS, Pathways is the owner of a branded smart card, the Keiki Card; and
WHEREAS, First Hawaiian Bank (hereinafter "Bank"), a Hawaii Corporation located
at 000 Xxxxxx Xxxxxx, Xxxxxxxx, XX 00000 wishes to offer its customers a secure
smart card transaction system for retail purchases; and
WHEREAS, Pathways and Bank wish to cooperate in a feasibility demonstration in
which (1) Bank customers would receive Keiki Cards to which they could add cash
value; (2) selected retail merchants would receive Keiki Card Terminals
programmed to make sales transactions with Keiki Cards; (3) Pathways would
provide processing services; and (4) Bank would be the funds holders (which
feasibility demonstration shall hereinafter be referred to as the
"Demonstration");
NOW THEREFORE, Pathways and Bank agree as follows:
1. Pathways and Bank will select appropriate Bank branches for the
Demonstration.
2. Pathways and Bank will jointly solicit merchants to accept the Keiki Card.
3. Pathways will loan Bank for the duration of the Demonstration, at no cost,
appropriate hardware (including Keiki Card Terminals), software and
documentation to allow Bank employees in selected branches to issue and add
value to Keiki Cards.
4. Pathways will loan Keiki Card Terminals to participating merchants for the
duration of the Demonstration, at no cost.
5. Pathways will sell Keiki Cards to Bank at $4.25 per card; Bank will resell
to its customers at $5.00 per card.
6. Pathways will retain ownership of all hardware, software and documentation,
including the intellectual property embodied therein, but will license Bank
to use them in furtherance of the Demonstration.
7. Pathways will retain ownership of the intellectual property embodied in the
Keiki Cards, but will license Bank and card holders to use it in
furtherance of the Demonstration.
8. Card holder agreements will contain intellectual property ownership and
licensing provisions, including a prohibition of reverse engineering, the
substance of which shall be acceptable to both Pathways and Bank.
9. Bank will not reverse engineer or permit third parties to reverse engineer
the hardware or software.
10. Pathways will process the Keiki Card transactions through the Pathways
Smart Card System at no cost to Bank.
11. Pathways will provide training for Bank personnel at no cost to Bank.
12. Bank will provide space for Pathways hardware, including Keiki Card
Terminals, at the selected Bank branches at no cost to Pathways.
13. Bank will provide personnel to operate the Keiki Card Terminals at no cost
to Pathways.
14. The Demonstration shall run for 90 days, beginning when Bank and Pathways
through their joint efforts have established a sufficient base of
participating merchants.
15. In the event of any losses or liabilities arising from the Demonstration,
Pathways and Bank shall apportion the costs or damages according to their
respective degree of responsibility for the losses or liabilities. If the
parties are unable to agree on apportionment, or if they have any other
disputes arising from the Demonstration, they shall submit their dispute to
binding arbitration in conformance with Hawaii Revised Statutes Chapter
658. If the parties are unable to agree on an arbitrator, they shall apply
to the appropriate Hawaii court to appoint an arbitrator. Judgment on the
award rendered by the arbitrator may be entered in any court having
jurisdiction thereof.
16. On successful completion of the Demonstration, the parties may negotiate a
mutually acceptable long-term agreement to provide: (1) for Bank to market
the Keiki Card to its customers; (2) for Bank and participating merchants
to buy or lease all hardware necessary for the operation of the Keiki Card
system including but not limited to equipment previously loaned by
Pathways; (3) for Bank and participating merchants to receive licenses to
use the software necessary for operation of the Keiki Card system; and
(4) for Pathways to provide the related processing services through the
Pathways Smart Card System.
17. This Agreement will be construed pursuant to and controlled by Hawaii law.
Dated this 19th day of February, 1998
THE PATHWAYS GROUP, INC. FIRST HAWAIIAN BANK
By: /s/ XXXXX X. XXXX, XX By: /s/ XXXXXX X. XXXXXX
----------------------------- -----------------------------
Xxxxx X. Xxxx XX Xxxxxx X. Xxxxxx
President & CEO Vice Chairman of Retail Banking
Group
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