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EXHIBIT 10.9
PROCESSING SERVICES AGREEMENT
THIS PROCESSING SERVICES AGREEMENT is entered into this 17th day of
April, 2000, by and between MAVERICK INTERNATIONAL PROCESSING SERVICES, INC., a
wholly owned subsidiary of CardSystems Solutions, Inc.. ("Processor"), with its
principal place of business at 0000 X. Xxxxxxxx, Xxxxxx, Xxxxxxx 00000 and
SOLUTIONS AMERICA, INC. ("Company"), a Delaware corporation with its principal
place of business at 000 Xxxxxxxxx Xxxxxx, Xxxxxx Xxxx, XX 00000.
RECITALS
Processor provides total transaction processing services to financial
institutions and other entities within the electronic payments industry and has
developed certain software programs, procedures related to such services.
Company provides services for internet-based transactions to web
merchants and has relationships with financial institutions that acquire such
transactions for collection on behalf of Company.
Company wishes to obtain transaction and other data processing and
related services from Processor for The Bank of Nevis (hereinafter, the
"Acquirer").
NOW THEREFORE, in consideration of the premises and mutual promises
contained herein and for other good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
SECTION 1. SERVICES.
1.1 Jurisdiction for Services. Services to be performed under the terms of this
Agreement shall apply only to those transactions originating at merchants of
Acquirer. All transactions shall be in United States Dollars.
1.2 Company will obtain a completed Exhibit A from Acquirer to authorize
Processor to submit payment transactions for collection under the Acquirer's
membership license with Visa. Processor shall be entitled to rely on such
authorization in providing any services under this Agreement to Company. Company
acknowledges that the implementation of the BIN is subject to approval of and
timeframes set by Visa and agrees that it will obtain all the paperwork required
by Visa for such implementation.
1.3 Transaction Authorization and Data Xxxxxxx.Xxxxxxx will transmit payment
transactions for authorization by card issuers by communications methods
currently available with Processor and with software and hardware that has been
certified to Processor's StrongBox(TM) authorization system. Company will bear
the expense for transmission by means that are not included in Processor's
current communications methods. Processor will obtain authorization responses
using BASE I and BankNet file formats through a Visa Access Point ("VAP") and
MasterCard Interface Processor ("MIP") maintained by Processor and will provide
Company with authorization responses returned via the VAP and MIP. Transaction
data transmitted to Processor will be captured by the StrongBox(TM) system. Once
during each business day transaction data will be prepared in file formats
suitable for export to an external clearing and settlement system designated by
Company or will be submitted directly to Visa and MasterCard on behalf of any
financial institution providing such authorization in Exhibit A. At Company's
option, other card types for which Processor is certified to provide
authorization and capture services for all merchants will be accepted by the
StrongBox(TM)
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system and transmitted to the appropriate card companies in formats and at such
times as have been agreed to between Processor and the applicable card
companies.
1.4 Interchange Clearing and Settlement Processing. Processor will fully format
captured transaction data records, as required by the respective Card
Associations for transactions relating to international processing requirements,
from its authorization systems or received from other processing vendors and
will transmit such records into the Card Associations' respective systems at
such times as are determined by Processor and the respective associations but in
any event no less than once daily to each association. Processor shall obligate
itself to meet the cut-off deadlines for transmission of data for each Card
Association on a daily basis. Company will be provided with reporting of cleared
transactions, rejects, retrievals and other items received in interchange
settlement records, including net amounts to be paid to Company's account by
each Card Association. Processor shall have no responsibility for payment to
merchants beyond providing Company with reports regarding the total number of
transactions and US Dollars submitted by each merchant for settlement and
clearing.
1.5 Company shall be responsible for back-up and other protection against loss,
damage or destruction of data received from Processor, and Processor shall have
no obligation or liability with respect thereto. Processor shall be responsible
for back-up and other protection of all data received from Company or its
merchants or agents and from the Card Associations but shall have no duty or
responsibility to provide such data to Company except as required by ordinary
processing practices or by specific terms of this Agreement.
1.6 Portfolio Management Services. At Company's election, Processor will provide
one or more of the following portfolio support services, which will be more
specifically described in Processor's client services operations manuals:
(a) Exceptions Management. Full retrieval and chargeback processing as
set forth in the Card Associations' rules and regulations, including the entry
of debit and credit items for adjustment and collection from Company's customers
into the settlement processing systems of Visa and MasterCard. Company will
provide Processor with written procedures for charging merchants and
resubmitting any dispute items.
(b) Account Activation. Account data entry and setup on authorization
and settlement systems and activation of approved accounts pursuant to Company's
written instructions.
(c) Risk Management. Production and distribution of daily transaction
reporting for review and disposition by Company.
(d) Customer Service. Processor will provide direct support to Company
during business hours, Pacific Standard Time to receive inquiries, perform
related research services and provide written responses to inquiries that are
not capable of phone resolution.
(e) Other Services. Processor may perform such other services for or on
behalf of Company as the parties may agree from time to time in writing.
1.7 Communication Services. At Company's request and expense, Processor will
provide communications lines between Processor's facilities and one or more
sites designated by Company and appropriate server links and related services
for the purpose of providing Company with access to its merchant data and for
communications between computer systems, including computer servers, located at
Company or at the facilities of any merchant of Company.
SECTION 2. PROCESSOR PROGRAM LICENSE
Processor hereby grants to Company a non-exclusive and non-transferable
license to use any proprietary products of Processor that may be required in
connection with the performance of this
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Agreement. This license, regardless of product covered hereby, shall terminate
immediately upon termination of this Agreement whether for cause or otherwise.
In the event Company obtains any portion of PurchasePoint(TM) (Processor's
proprietary suite of internet-enabled applications), a separate written grant of
license shall be required prior to delivery of PurchasePoint(TM).
SECTION 3. PAYMENT FOR SERVICES
3.1 Fees payable by Company for transaction processing and related services are
set forth on Schedule A. Fees for services that are to be performed by Processor
at Company's option are set forth on Schedule B.
3.2 Prior to initiation of services, Company shall provide Processor with a
completed Exhibit B which contains the routing number of a commercial checking
account maintained by Company with a financial institution that is a member of
the United States Federal Reserve's Automated Clearing House ("ACH") system (the
"Account') and hereby authorizes Processor to debit the Account for any fees
payable to Processor and for all adjustments and debits that are made in the
ordinary course of business. A statement or advice of debit will be provided no
less than ten (10) days prior to such debit. In the event Company disagrees with
any amount included in the invoice, Processor shall be provided written notice
of the same within five (5) business days from receipt of the invoice and shall,
nonetheless, be prepared to pay all undisputed amounts within 10 days of receipt
of the invoice. The parties will act in good faith to revolve any dispute within
twenty (20) days following notice from Company, but in any event, such dispute
shall not prevent timely payment of any subsequent invoices for which no dispute
is raised. Company shall at all times maintain sufficient balances in the
Account to cover all fees, payments, adjustments and processing entries which
will be made pursuant to and during the term of this Agreement and for a minimum
of sixty (60) days after termination of services and any de-conversion period
agreed to by the parties. Company shall be liable to Processor for expenses of
collection of its fees including its reasonable attorney's fees and court costs.
Late payments shall incur a fee calculated as interest of 10% per annum or
highest rate permitted by law, whichever is less, during the period in which any
undisputed amount remains unpaid.
SECTION 4 TERM; TERMINATION; EFFECT OF TERMINATION.
4.1 Term: This Agreement is effective from the date hereof and shall continue
for a term of two (2) years (the "Initial Term"). Thereafter, this Agreement
shall be automatically renewed for consecutive two (2) year periods (a "Renewal
Term") unless either party gives the other written notice of non-renewal at
least one hundred and eighty (180) days prior to the expiration date of the
then-current term.
4.2 Termination:
(a) Processor shall have the right to terminate this Agreement upon
fifteen (15) days written notice for:
(i) Failure by Company to remit payment for undisputed fees
within five (5) business days from the date of any demand by Processor for prior
failure of Company to pay any invoice for undisputed fees as set forth in
Section 3 or if Processor has had the right to give second notice and make
demand for payment more than three (3) times in any twelve-month period, whether
or not such notice actually given.
(ii) Any violation of material rules relating to Acquirer's
membership in either Card Association, of which the applicable card association
has provided notice to Processor of Company's suspension if such notice results
in any suspension of more than fifteen (15) consecutive days or for more than
any twenty (20) days in 12-month period.
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(b) Company shall have the right to terminate this Agreement:
(i) Upon completion of any then-current term for which Company
has provided proper notice of non-renewal under subsection 4.1.
(ii) For breach by Processor of any material provision of this
Agreement and failure to cure such breach within fifteen (15) days of written
notice specifying the cause thereof.
(iii) Notwithstanding the provisions of Section 8.10(b) below,
immediately, in the event Processor is unable to perform services set forth in
Sections 1.3 and 1.4 for a period in excess of two (2) consecutive calendar
days.
4.3 Effect of Termination.
(a) Immediately upon termination by either party, whether by expiration
or otherwise, Processor's obligation to provide services hereunder shall
immediately cease, and any unpaid amounts due and owing by Company shall become
immediately due and payable. The foregoing notwithstanding, Processor will
continue to provide services for a reasonable period necessary to convert
Company's accounts to another processor of Company's choice, provided Company is
not in breach of any obligation to pay fees to Processor as set hereto set
forth.
(b) Payment for any services rendered or any other obligation of
liability owing at the time of termination or which becomes owing under this
Agreement whether or not such obligations arise prior to or after the
termination date shall not be affected by termination of this Agreement.
(c) Processor will provide all reasonable assistance to transfer
Company's accounts to another payment processor; provided, however, all costs of
transfer shall be at Company's sole expense based upon Processor's then current
rates for de-conversion of accounts.
SECTION 5 INDEMNIFICATION; LIMITATION OF DAMAGES
5.1 Processor's cumulative liability for any loss or damage, direct or indirect,
for any cause whatsoever (including, but not limited to those arising out of or
related to this Agreement) with respect to claims relating to events in any one
12-month period following the effective date of this Agreement shall not, under
any circumstances, exceed the lesser of:
(a) Two Hundred Thousand Dollars ($200,000); or
(b) The amount of Processing Fees paid to Processor pursuant to this
Agreement for services performed in the immediately preceding 12-month period,
and in the case of the first 12-month period of the Agreement, any minimum
processing fees specified for year one in Schedule A.
5.2 Processor shall not be liable to Company, to merchants of Company or to any
other party for fraudulent or unauthorized transactions submitted by Company or
its agents or merchants howsoever and wheresoever originated.
5.3 Processor shall not be liable for selection and operation of any
point-of-sale devices or software by Company or its agents and merchants or for
loss of data in transit between Company's agents and merchants and Processor or
between Processor and acquirers and issuers except for any losses directly
attributable to loss of transactions from the point at which Processor has
received such transactions and prior to a successful transmission of the
transactions into the Visa and MasterCard interchange systems or to gross
negligence, willful misconduct or fraudulent misconduct by Processor or its
officers or employees. Processor will use its best efforts to contract with
third parties for the products and services on which it is dependent, including,
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but not limited to, communications carriers, voice authorization providers,
equipment manufacturers and their associated hardware and software providers,
whether owned or licensed, however, Processor shall not be liable to Company for
damages, loss, costs or liabilities suffered or incurred by Company or its
merchants attributable to the fault or negligence of any such third party or
parties. In the event of loss of interchange processing data, Processor will use
its best efforts to re-create and provide the lost data to the appropriate card
association or card under company or to Company, as the case may be, within a
reasonable time.
5.4 IN NO EVENT SHALL EITHER PARTY BE RESPONSIBLE TO THE OTHER FOR SPECIAL,
INCIDENTAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES ARISING FROM OR AS A
RESULT OF ANY BREACH OF THIS AGREEMENT.
SECTION 6. PROPRIETARY AND CONFIDENTIAL INFORMATION.
6.1 The parties acknowledge that in the performance of the terms of this
Agreement, each may be entrusted with information which the other deems to be
Confidential Information, whether prepared or owned by the party deeming such
information confidential, or otherwise coming into that party's possession or
control, from any third party who deems it confidential or proprietary.
Therefore, each party agrees to keep all information confidential belonging to
the other party confidential and will not disclose any Confidential Information
to any person except that either party may disclose:
(a) Information to its employees and representatives, to the extent
required to perform this Agreement;
(b) Any portion of the Information that was or becomes generally
available to the public other than as a result of a disclosure by the party not
claiming ownership of confidential information;
(c) Information required to be disclosed by the any state or federal
bank regulatory agency or any card association having jurisdiction over the
subject matter of this Agreement or by court order or pursuant to governmental
process; and
(d) Information for which the party claiming ownership of confidential
information provides written consent for disclosure.
6.2 For purposes of this Agreement, the term "Confidential Information" shall
mean the following:
(a) Any information, know-how, data process, technique, design, drawing,
program, formula or test data, work-in-progress, engineering, manufacturing,
marketing, financial, sales supplier, customer, employee, investor or business
information, whether in oral, written, graphic, electronic or other form; or any
other information or a business nature to the extent not disclosed to or
generally known by those persons engaged in business similar to that conducted
by the party claiming confidentiality (other than by the act or acts of an
employee not authorized by the party claiming confidentiality to disclose such
information), including, but not limited to, confidential sales or marketing
information, actual or anticipated research and development endeavors, customer
lists, customer usages and requirements, financial data, products, technology,
equipment, data processing procedures and techniques and any other secret
business plans or activities of either party, its parents, affiliates or
subsidiaries, or information from any third party which was disclosed to the
party claiming confidentiality; or
(b) Any trade secret and any patentable and/or copyrightable subject
matter, including, but not limited to, ideas, inventions, processes, formulae,
methods, refinements, source code and listings, enhancements, specifications,
user manuals, screen displays and formats, computer and software documentation,
software performance results, data and data formats, protocols, network
configurations and the like which are conceived, developed, created or owned by
the party claiming confidentiality; all confidential or secret letters,
memoranda, summaries, notes and any other documents or data in any form or
recorded on any medium pertaining to either party or its respective business.
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6.3 Failure to xxxx any of the trade secrets of Confidential Information as
"Confidential" shall not affect its status as trade secrets or Confidential
Information under this Agreement.
6.4 Company acknowledges that all software programs, software systems designs or
architectures, plans, documents, know-how and data bases provided by Processor
(the "Processor Systems") are, and shall remain, the property of Processor or
any third party licensor providing software for Processor's use and shall
include any modifications to the Processor System made specifically at Company's
request and cost. Further, use of the Processor System does not grant to Company
any proprietary or license rights to the system or any part thereof except as
may be specifically set forth in this Agreement.
Likewise, Processor acknowledges that all merchant records, merchant
data, including transaction data, and any other information acquired by
Processor from Company and its employees, agents and merchants are, and shall
remain the property of Company.
6.5 The provisions of this Section 6 shall survive any expiration or termination
of this Agreement.
SECTION 7. WARRANTIES AND REPRESENTATIONS.
7.1 Year 2000. Processor represents, warrants, and agrees in favor of Company
that (i) all present and future computer and data-processing hardware, firmware,
software, microcode, and related items used by Processor (Data Equipment) shall
be Year 2000 Compliant in that the Data Equipment shall accurately handle the
input, output, storage, retrieval, manipulation, and calculation of all
chronological date and time information whether such dates and times are prior
to, coincident with, or after January 1, 2000, provided that systems other than
Processor's Data Equipment properly exchange date and time information with the
Data Equipment, (ii) Processor has assessed and will continue to assess, using
competent and experienced personnel, its Data Equipment with respect to Year
2000 Compliance, (iii) Processor will from time to time at the request of
Company provide Company with copies of all tests, reports, and assessments
performed by or on behalf of Processor with respect to Year 2000 Compliance of
its Data Equipment, (iv) Processor shall periodically inquire of its key vendors
and service providers whether they are Year 2000 Compliant, (v) with respect to
date and time information that is ambiguous in that it is susceptible of more
than one interpretation or unique value, the Data Equipment shall handle such
ambiguous data in a pre-defined way so that an operator of the Data Equipment
shall be notified of such ambiguous data and such ambiguous data shall not be
processed as a valid date and time value, and (vi) Processor shall immediately
notify Company in writing of any failure by Processor or its key vendors and
service providers to be Year 2000 Compliant.
7.2 Third Party Components. Processor represents and Company acknowledges that
(i) Processor's processing systems and software may contain software and
hardware components that are either owned by a third party or in the public
domain, and (ii) that Processor has no proprietary interest in such software or
hardware, and as such, cannot grant to Company a license to use such software or
hardware and any related documentation. Processor represents and warrants that
it has the necessary licenses and/or permissions to utilize such hardware and
software for performance of this Agreement. MAVERICK MAKES NO WARRANTIES OR
REPRESENTATION AS TO SUCH THIRD PARTY SOFTWARE OR HARDWARE (INCLUDING
INFRINGEMENT) AND FURTHER DISCLAIMS ANY AND ALL LIABILITY FOR ANY LOSSES OR
DAMAGES THAT MAY RESULT FROM THE USE THEREOF EXCEPT AS MAY BE OTHERWISE SET
FORTH IN THIS AGREEMENT.
7.3 DISCLAIMER OF IMPLIED WARRANTIES. EXCEPT FOR THOSE WARRANTIES SET FORTH IN
THIS AGREEMENT, MAVERICK MAKES NO WARRANTIES REGARDING THE USE, OPERATION OR
PERFORMANCE OR NON-PERFORMANCE OF SOFTWARE AND SYSTEMS UTILIZED FOR THIS
AGREEMENT, WHETHER EXPRESS OR IMPLIED, AND MAVERICK
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EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES OR MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
SECTION 8. GENERAL PROVISIONS.
8.1 Disclosure.
(a) Each party shall promptly notify the other of any claim, demand,
action, suit or proceeding, facts or circumstances, or the prospect or threat of
the same, which might materially and adversely affect either party's ability to
perform its obligations pursuant to this Agreement.
(b) Processor warrants and represents to Company that there are no
pending or threatened claims, suits, actions, or legal, administrative,
arbitration, or other proceedings or government investigations against
Processor, shareholders, affiliates, officers, directors or employees that have
not been previously disclosed in writing to Company, and which might materially
and adversely affect the financial condition of Processor or its ability to
perform its obligations under this Agreement.
8.2 Financial Reporting. Processor agrees to provide Company annually within one
hundred and twenty (120) days of the end of Processor's fiscal year a copy of
its true, correct and complete financial statements for such fiscal year
prepared in accordance with generally accepted accounting principles by an
independent certified public accountant acceptable to Company. Processor agrees
to furnish such other financial information as Company may request from time to
time. Processor agrees to submit to any examination that may be required by any
Regulatory Authority.
8.3 Assignment. Neither party may assign this Agreement or any of its rights and
obligations herein to any third party without the prior written consent of the
other party which consent shall not be unreasonably withheld. The foregoing
shall not include any assignment to a parent, affiliate or subsidiary of the
assigning party.
8.4 Amendment; Waiver. This Agreement, any of the schedules and exhibits
referred to herein and any of the provisions hereof or thereof shall not be
amended, modified or waived in any fashion except by an instrument in writing
signed by the parties hereto. No delay on the part of any party hereto in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party hereto of any right,
power or privilege hereunder operate as a waiver of any other right, power or
privilege hereunder, nor shall any single or partial exercise of any right,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder.
8.5 Notice. All notices, demands and other communications hereunder shall be in
writing and shall be delivered in person or deposited in the United States mail,
certified or registered, with return receipt requested, or sent by reputable
overnight delivery service as follows:
(a) If to Processor: Xxxx X. Xxxxxxxxx
President, Electronic Delivery Systems
CardSystems, Inc.
0000 X. Xxxxxxxx
Xxxxxx, XX 00000
with a copy to: Xxxxx X. Xxxx, VP and General Counsel
CardSystems, Inc.
(at above address)
(b) If to Company: Xxxxx X. Xxxxxxx
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Chairman,
Xxxxxxx Xxxxxx
Senior Vice President, Financial Services
Solutions America, Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx Xxxx, XX 00000
with a copy to: Xxxxxxx Xxxxx
Xxxxxxxxx, Klusker Flields Claman &
Machtinger LLP
1900 Ave. of the Stars, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
The persons or addresses to which mailings or deliveries shall be made
or facsimiles sent may be changed from time to time by notice given pursuant to
the provisions of this subsection 8.5.
Any notice, demand or other communication given pursuant to the
provisions of this subsection 8.5 shall be deemed to have been given on the date
actually delivered or five days following the date deposited in the United
States mail, properly addressed, postage prepaid, as the case may be.
8.6 Relationship of Parties. Nothing contained in this Agreement or any other
schedule or exhibit hereto shall be construed as constituting a partnership,
joint venture or agency between Processor and Company. The parties are
independent parties to an agreement and shall be deemed independent contractors
for all purposes.
8.7 Choice of Law, Jurisdiction and Venue. The validity of this Agreement, the
construction of its terms and the determination of the rights and duties of the
parties hereto shall be governed by and construed in accordance with the laws of
the State of Arizona, United States of America, applicable to contracts made and
to be performed wholly within the State of Arizona. Company hereby submits to
the jurisdictions of the United States of America and the State of Arizona for
the purposes of any action maintained hereon and agrees that venue for any such
action shall be in United States Federal Courts located in the County of Pima,
State of Arizona.
8.8 Headings; Severability. The headings contained in this Agreement are for
convenience of reference only and do not form a part of this Agreement. If any
provision of this Agreement, or the application or any such provision to any
person or circumstance, shall be held invalid by a court of competent
jurisdiction, the remainder of this Agreement, or the application of such
provision to persons or circumstances other than those as to which it is held
invalid, shall not be affected thereby.
8.9 Attorney Fees. In the event of any litigation or arbitration between the
parties hereto respecting or arising out of this Agreement, the prevailing party
in such action and any appeals therefrom shall be entitled to recover reasonable
legal fees, whether or not such litigation or arbitration proceeds to final
judgment or determination.
8.10 Force Majeure.
(a) Neither party shall be liable to the other by reason of any failure
in the performance of this Agreement to the extent such failure arises beyond
the control of that party. Such causes may include but are not limited to acts
of God, acts of civil or military authority, fires, strikes, unavailabilty of
energy resources, delay in transportation, riots or war. In the event of any
such occurrence, the disable party shall thereafter endeavor to perform its
obligations as promptly as possible. The disabled party shall promptly
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and in writing advise the other party if it is unable to perform due to any such
event, the expected duration or such inability to perform and of any
developments (or changes therein) that appear likely to affect the ability of
that party to perform any of its obligations hereunder in whole or in part.
(b) In the event either party or any of its designated agents is
disabled and is unable to perform any material obligation hereunder in whole or
in part in excess of ten (10) consecutive business days, and in the absence of a
commercially reasonably recovery plan, the other party shall be entitled to
immediately terminate this Agreement.
8.11 Counterparts. This Agreement may be executed in one or more counterparts
and by different parties in separate counterparts, with the same effect as if
all parties hereto had signed the same documents. All counterparts so executed
and delivered shall be deemed to be an original, shall be construed together and
shall constitute one agreement.
8.12 Integrated Agreement. This Agreement, the exhibits hereto and all other
documents and instruments delivered in accordance with the terms hereof
constitute the entire understanding and agreement among the parties hereto with
respect to the subject matter hereof, and there are no agreements,
understandings, restrictions, representations or warranties among the parties
other than those set forth herein or herein provided for.
8.13 Equal Employment Opportunity. Processor will provide equal employment
opportunities to any employee or applicant and will not discriminate against any
person because of race, color, religion, sex, national origin, disability, age
or veteran status as set forth in applicable federal and state laws and
regulations.
IN WITNESS WHEREOF, the parties hereof have caused this Agreement to be
executed by their duly authorized officers as of the effective date hereof.
MAVERICK INTERNATIONAL SOLUTIONS AMERICA, INC.
PROCESSING SERVICES, INC.
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Xxxx X. Xxxxxxxxx Xxxxx X. Xxxxxxx
President, EDS Chairman
Date Date
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