EXHIBIT 14.12
Draft 7-12-04
PRIVATE BRAND SALES AGREEMENT
This PRIVATE BRAND SALES AGREEMENT (this "Agreement") is made and entered into
as of June 151 2004 (the "Effective Date") by and between Secure Cash Network,
Inc., a Texas corporation ("SQM")1 whose principal business address is 00000
Xxxxxx'x Xxxx Xx., Xxxxx 000,Xxx Xxxxxxxxx, XX 00000, and Xxxxxx Beaumont, Inc.,
a Florida corporation (hereinafter "MB"), whose principal business address is
0000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxx, XX 00000.
RECITALS
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A. SCN, through a network of affiliate banking and processing
relationships (the "SCN Prepaid Network"), distributes at the wholesale level
and services prepaid stored value cards (collectively, the "Cards") issued by
First Federal Bank of Roswell, NA. (the "Issuing Bank") that are then sold at
various domestic retailers to consumers (collectively, the "Cardholders") and
B. MB provides a secure paint of sale system ("P05") for processing the
sale of prepaid products and manages distribution of prepaid products at various
retail locations ("MB Dealer Locations") of various retailers or retail networks
that have relationships with MB ("Ms. Dealers") and
C. MB also desires to sell Xxxxxx Beaumont Private Brand Cards ("MB
Cards"), in addition to Pronto Banco branded Cards of SCN, and SCN is willing to
grant to MB certain rights to market, promote and sell such MB Cards at and from
its MB Dealer Locations in exchange for certain compensation, under the terms
and conditions set forth in this Agreement.
NOW, THEREFORE, based on the foregoing and the mutual and dependent
promises contained herein, the parties hereto agree as follows:
1. APPOINTMENT OF MB AS DISTRIBUTOR
1.1 APPOINTMENT. Subject to the limitations set forth below, SCN hereby
grants to MB the exclusive rights, with respect to the MB Dealers and MB Dealer
Locations set forth on SCHEDULE B attached hereto, and the programs identified
on Schedule D attached hereto (the "Programs"), to distribute, market, promote,
and sell the MB Cards as a member of the SCN Prepaid Network utilizing the MB
POS under the terms and conditions specified in this Agreement. SCHEDULES B AND
D attached hereto describe the relationship of MB to the MB Dealers or the
Programs, and MB's plans to promote and sell the MB Cards to such MB Dealers. If
MB is unable to sell any of the MB Cards to any of such MB Dealers or Programs
for a period of three months from the date hereof, or for any continuous
three-month period during the term of this Agreement, then MB's rights as to
such MB Dealer or Program shall become non-exclusive.
1.2 ADDITION OR DELETION OF MB DEALER LOCATIONS OR MB DEALERS. Within
ten (10) days of the end of each calendar month, MB shall provide SCN with a
listing of all new MB Dealer Locations that will offer the MB Cards added during
the previous month, and SCN shall have the right to reject MB's sale of MB Cards
at any such additional MB Dealer Locations using its commercially reasonable
judgment. Unless rejected by SCN, all such MB Dealer Locations shall be deemed
incorporated into SCHEDULE B. If SCN reasonably determines that a particular MB
Dealer Location has violated any of the material terms of this Agreement, then
SCN may direct MB in writing to refrain from accepting customer orders from that
MB Dealer Location. New MB Dealers may only be added with the prior written
consent of SCN.
1.3 MB DUTIES AS DISTRIBUTOR. As a member of the SCN Prepaid Network,
MB hereby agrees to permit MB Cards to be reloaded at any MB Dealer Location,
and any MB Cards sold by MB shall be reloadable at any SCN Prepaid Network
location. MB further consents to SCN identifying, on its website, all MB Dealer
Locations as members of the SCN Prepaid Network. MB shall encourage the Dealer
Locations to sell, market and promote the MB Cards to their customers.
1.4 LIMITED AGENCY; REGULATORY AND OTHER INSPECTIONS. SCN hereby
appoints MB as its sales representative with the authority to sell MB Cards and
to engage in money transmission on behalf of SCN. For the sole purpose of
selling MB Cards, MB shall be deemed an agent of SCN. Neither SCN nor MB may
authorize sub-representatives except in compliance with applicable requirements
of the Issuing Bank and VISA U.S.A. ("VISA"). SCN and MB may be subject to
supervision, examination and regulation as provided by applicable federal and
state law and regulations, as well as the requirements of the Issuing Bank and
VISA U.S.A. MB hereby consents to inspections by federal and state authorities
of its books and records relating to SCN and the Issuing Bank. MB is under a
duty to act only as authorized under this Agreement, and if MB exceeds such
authority, this Agreement may be terminated and MB may be subject to
disciplinary action by federal and state authorities.
2. GENERAL REQUIREMENTS FOR PROMOTION OF THE CARDS
2.1 DISPLAYS. MB will feature and enable the purchase of the MB Cards at
the MB Dealer Locations and such other methods of sale (excluding telemarketing)
as set forth on SCHEDULE B attached hereto, as well as certain additional MB
Dealer Locations and methods that MB may serve in the future, as mutually agreed
upon by the Parties in accordance with Section 1.2 above. All MB Dealer
Locations may have as many displays as MB deems necessary and appropriate. MB
agrees that all marketing materials developed by it or otherwise containing
SCN's, STAR's, Pulse's and/or VISA's tradename, trademarks or other intellectual
property rights must be approved in writing by SCN prior to use. FAILURE TO
COMPLY WITH THIS PROVISION WILL BE DEEMED A MATERIAL BREACH OF THE AGREEMENT AND
MAY BE GROUNDS FOR TERMINATION.
2.2 PRINTING AND LOCATIONS. The marketing materials for the MB Cards
may be customized to meet MB's requirements for merchandise carried in the MB
Dealer Locations, pending compliance with existing SCM Agreements and prior
written approval granted by SCN for such materials.
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2.3 SUPPLIES. MB will be responsible for payment of any custom
marketing materials, equipment, supplies and the like developed by it and used
in connection with the sale of the MB Cards at MB Dealer Locations.
2.4 PROMOTIONAL ACTIVITIES. MB will promote the MB Cards in MB Dealer
Locations and Internet programs via traditional means, as applicable, subject to
prior written approval of such promotional activities by SCM.
2.5 COVENANTS. Each Party covenants that it will: (a) conduct business
in a manner that reflects favorably at all times on the MB Cards and the good
name, goodwill and reputation of the other Party; (b) avoid deceptive,
misleading or unethical practices that are or might be detrimental to the other
Party or the MB Cards; (c) make no false or misleading representations with
regard to the other Party or the MB Cards; (d) not publish or employ, or
cooperate in the publication or employment of, any misleading or deceptive
advertising material with regard to the other Party or the MB Cards; and (e)
make no representations, warranties or guarantees with respect to the MB Cards
that are inconsistent with literature distributed or approved by SCN or VISA(R).
2.6 MB's Obligations. During the term of this Agreement, MB shall
perform as follows:
2.6.1 MB shall seek SCM's prior approval of all Programs to be
submitted to the MB Dealers, which approval shall not be unreasonably withheld,
prior to obligating itself to provide such Programs to MB Dealers.
2.6.2 MB shall market the its services to its MB Dealers in an
ethical and professional manner and deliver to SCM a duly executed copy of the
Program Request Form for each Program to be implemented and managed by SCN
hereunder.
2.6.3 MB shall not supply, or knowingly allow any MB Dealer to
supply, any Intellectual Property that contains profane graphics or text on the
Program Website nor shall such Program Website advertise for adult
entertainment, escort services or other products and services that are
prohibited by SCN nor click through to websites that feature or otherwise
contain adult entertainment, escort services or other products and services that
are prohibited by SCN.
2.6.4 MB, with SCN's assistance, if requested, shall design
the MB Card to be provided to each MB Dealer and any card mailers, promotional
inserts and card mailing envelopes (THE "RELATED MAILING PIECES") for mailing
the MB Cards to such MB Dealers. MB shall design the MB Card and the Related
Mailing Pieces using the standard design and materials all in accordance with
the Visa Regulations, which design and materials must be approved by SCM, Visa,
the Issuing Bank, Star and Pulse; provided that SCM shall assist MB to obtain
from Visa the requisite approvals for the design of the MB Card. MB shall permit
SCN to brand all MB Cards on the front or reverse side, at SCN's discretion,
with the SCM logos and trademarks. MB shall also permit SCN to brand all MB
Cards on the reverse side with the toll-free number and the name of the Issuing
Bank At MB's option, MB may design and create the Related Mailing Pieces using
custom materials selected by MB at MB's sole cost and EXPENSE; PROVIDED,
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HOWEVER, that MB shall pay any incremental increase in costs for production in
advance to SCN. All promotional inserts shall be provided by MB at its sole cost
and expense and shall be subject to the prior written approval of SCN, which
approval shall not be unreasonably withheld.
2.6.5 MB shall be solely responsible for any and all costs
incurred by it in performing its obligations hereunder.
2.6.6 MB shall execute and deliver to SCN a copy of the signed
Program Request Form for each Program to be implemented and managed by SCM for
MB, on behalf of a MB Dealer;
2.6.7 MB shall be responsible for (I) billing and collecting
from its MB Dealers all amounts due for any SCN Services utilized by such MB
Dealers pursuant to a Program and shall bear the loss of any uncollectible
amounts (except for any uncollectible amounts that arise out of or as a result
of any act, omission, breach or failure to perform by SCN) and (U) deducting any
applicable federal, state or local use, exise, gross receipts, sales and
privilege taxes, duties, fees or similar liabilities (other than general income
or property tax) from revenues received as a result of its resale of the MB
Cards and shall pay the same to the appropriate authorities.
2.6.8 Upon receipt by MB and the MB Dealer of the Cardholder's
account details in writing from SCN, MB shall cause the MB Dealer to promptly
notify the Cardholders by email or by other mutually agreeable means of the
establishment of an Account.
2.6.9 MB shall, or cause the MB Dealer to agree to, make
available to SCN any and all necessary technical, operational and design
resources from within MB Dealer's organization in order to assist SCN in the
successful performance of this Agreement, including the implementation of the
appropriate technical development and establish links to and/or from the
Program's website as necessary and appropriate.
2.6.10 MB shall make each MB Dealer aware of any rights and
obligations that are applicable to such MB Dealer under this Agreement with
respect to a Program implemented by SCN for such MB Dealer.
3. REVENUE; CONSUMER FEES
3.1 New MB Cards. The Manufacturer's Suggested Retail Price ("MSRP")
for new MB Cards will be determined by MB; provided, however, that SCN shall
have the absolute discretion to reject the pricing requested by MB for the MSRP
and any transaction and other fees for the MB Cards.
3.2 Reloads of Existing MB Cards. The MSRP for the reloading of
existing MB Cards by MB Dealer Location consumers is $4.95 but is subject to
adjustment based on market conditions in MB's sole and absolute discretion;
provided, however, that SCN shall have the absolute discretion to reject the
pricing requested by MB for the reloads and any transaction and other fees for
the MB Cards. The price actually charged by MB Dealer Locations as a reload fee
(the "Reload Fee") will be added to the load value of each reload transaction at
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the time of such reload transaction. In order to ensure compliance with consumer
protection, usury and other similar laws, MB must obtain the prior written
consent of SCN before any MB Dealer Location may increase the Reload Fee to an
amount greater than the MSRP set by SCN from time to time for the reload of
existing MB Cards.
3.3 Fees to Cardholders, MB may charge Cardholders certain fees, which
are assessed against the MB Card's balance as such fees are accrued; provided,
however, that SCN shall have the absolute discretion to reject the pricing
requested by MB for such fees for the MB Cards. Such fees will be fully
disclosed to the consumer by MB and SCN in accordance with applicable laws,
These fees are assessed outside of, and are not governed by, this Agreement. SCN
will handle all consumer complaints arising out of its fee assessments outside
of this Agreement and, further, MB will indemnify SCN for claims, if damages and
consequences related to the fees assessed by MB to those consumers who purchase
MB Cards at MB Dealer Locations.
3.4 REFUNDS. SCN shall be responsible for providing refunds to
Cardholders consisting of the load amount plus any Retail Fee or Reload Fee paid
by the Cardholder. In the event SCN provides such a Cardholder refund, SCN shall
have the right to receive a credit from MB for MB's proportionate share of the
Retail Fee, Reload Fee or any other fees for any such refunds.
4. COLLECTION; COMMISSIONS PAYABLE TO MS
4.1 COMMISSIONS. As full and complete compensation to MB for all of
MB's efforts on SCM's behalf, SCN will pay MB the sums set forth on Schedule C
attached hereto. Such commissions shall be paid to MB during the Term of this
Agreement and for 6 months thereafter for the respective Cardholders which
continue to purchase, and pay for, SCM products, services and programs at MB
Dealer Locations. All Payments shall cease in the event this contract is
terminated for cause, as defined in Section 9.2 below.
4.2 PAYMENTS. Commission Payments to MB will be paid in United States
dollars and may be paid by check or ACH transfer, in the discretion of SCN. The
checks will be mailed to the address specified by MB pursuant to Section 14
below or shall be deposited directly if requested in writing by MS. Such
payment, if full and complete, to MB shall fully discharge SCM's obligations to
MB and any parties assisting MB including any MB Dealers. As between SCM and MB,
MB will be solely responsible for any compensation due to any parties assisting
MB including compensation paid to MB Dealers. Payments will be made no later
than thirty (30) days after the end of the calendar month in which SCM has
received payment of any revenue derived from Cardholders which MB originated and
served.
4.3 OFFSETS. SCM shall never be liable for a commission unless and
until it has received in full an irrevocable fund payment from MB on behalf of
Cardholder in the full amount of the load value of such Cardholder's Card. In
the event SCN takes a loss on any Cardholder account or pays commission on an
account for which these conditions have not been met or later are classified as
unmet because of a loss of funds, SCM has the right to offset such loss, or
commission, 100% against future commissions owed to MB.
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5. SON RESPONSIBILITIES
5.1 GENERAL. SCN agrees that it will: (a) be responsible for compliance
with all laws relating to the provision of MB Cards; (b) use commercially
reasonable efforts to maintain its relationship with the Issuing Bank and VISA
to ensure the program's continued operation; (c) not charge the Reserve Funds
(as defined in Section 6.1 below) for any fees assessed to Cardholders outside
of this Agreement; and (d) act to ensure that each legitimate and verified
consumer who purchases a MB Card from a MB Dealer Location receives credit for
the amounts loaded onto the MB Card at the MB Dealer Location and shall have the
right to utilize those amounts subject to the terms and conditions of the
Cardholder Agreement between the Issuing Bank and the Cardholder.
5.2 FRAUD RECOVERY. In the event that MB discovers that a MB Card was
loaded or reloaded in a fraudulent manner due consumer or employee fraud, MB may
communicate to SCN via fax, phone or overnight mail information about such
fraudulent transaction and SCM will use commercially reasonable efforts to
attempt to deactivate the affected MB Card, recover funds loaded to such MB Card
and refund such recovered funds to MB. The parties agree that time is of the
essence in such a situation, and that should such a request for fraud recovery
occur after the perpetrator of the fraud has spent the funds in question1 SCN
will have no ability and no obligation to refund or recover such funds. SCN will
cooperate fully with MB personnel in an effort to locate and prosecute the
perpetrator of such fraud.
5.3 RECORDS AND INSPECTION. MB and SCN shall keep accurate records of
transactions relating to the MB Card sales and reloads. Upon the request of
either Party, the other Party shall verify any records maintained by it in
connection with the sale or reload of MB Cards by affidavit and shall permit the
requesting Party and its duly authorized representatives to examine and inspect
the responding Party's records relating to such transactions during said Party's
normal business hours.
6. RESERVE REQUIREMENTS AND SETTLEMENT PROCEDURES
6.1 RESERVE FUNDS. MB acknowledges and agrees that the Issuing Bank is
the distributor of funds to Cardholders in accordance with various Cardholder
Agreements between the Issuing Bank and the Cardholders, MB further acknowledges
and agrees that MB Dealer Locations receive money from Cardholders for the
express purpose of having such funds loaded or reloaded to the MB Cards
(collectively, the "CARDHOLDER FUNDS"). MB further acknowledges that the MB
Dealer Locations will pay MB the Cardholder Funds on a schedule agreed to
between MB and each such Dealer Location. MB agrees that it will deposit and
hold in trust on behalf of, and for the sole benefit of Cardholders, any and all
funds paid to it by such MB Dealer Locations that were received by each such MB
Dealer Location as Cardholder Funds. The Cardholder Funds will not be used for
or deposited by MB in connection with any MB operating or general-purpose
account or otherwise treated as MB property. Notwithstanding anything to the
contrary contained herein, MB agrees that it shall be liable to SCN and the
Issuing Bank for all load and reload values, Retail Fees and Reload Fees
associated with MB Cards obtained at MB Dealer Locations, even if the MB Dealer
Locations fail to forward such funds to MB. The Cardholder Funds shall be and
remain the sole property of Cardholders during and after the time the Cardholder
Funds are paid to each MB Dealer Location and will not be deemed the property
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of, or an asset of, MB. Furthermore, MB agrees that Cardholder Funds will not be
subject to creditors (whether secured or unsecured) of MB or its affiliates,
whether in connection with any bankruptcy proceeding filed by or against MB, its
affiliates or otherwise. MB shall take any reasonable action necessary or
appropriate, including instructing its counsel, the courts and any other third
parties, to accomplish the immediate release to SCN of all Cardholder Funds,
current or future, and remove such Cardholder Funds from inclusion in any MB
bankruptcy proceeding, MB xxxx provide the Issuing Bank with the funds necessary
to cover the costs of all loads and reloads made to MB Cards at MB Dealer
Locations, plus SCN's portion of the Retail Fee and Reload Fee, in advance of
such loads and reloads being made and MB Cards being sold (THE "RESERVE FUNDS").
In no case shall MB be responsible nor shall the Reserve Account (as defined
below) be charged or debited funds for loads not conducted at MB Dealer
Locations. The Reserve Funds will be kept in an account at the Issuing Bank (THE
"GOOD FUNDS ACCOUNT"). Only SCN and Issuing Bank will have withdrawal access to
the Reserve Funds. The Issuing Bank will access that portion of the
Reserve Funds to cover all value loaded or reloaded by Cardholders to MB Cards
to move such Reserve Funds to a pooled reserve account (the "Issuing Bank
Reserve Account") maintained by the Issuing Bank which may only be accessed by
the Issuing Bank. SCN will access the Reserve Funds in the Good Funds Account
for SCN's portion of the Retail Fees and Reload Fees. The minimum Reserve Funds
balance will initially be equal to the greater of either (a) an estimate of the
value to be loaded and reloaded to the MB Cards sold at the MB Dealer Locations
over two weeks or (b) $10000. SCN will adjust the minimum Reserve Funds balance
requirement each seven days to the GREATER of either (a) the last fourteen days
of cumulative load and reload value or (b) the average daily load and reload
value for the previous month multiplied by fourteen. MB will have until the
close of the next business day to send to the Issuing Bank via ACH these
additional Reserve Funds after request has been made by SCN via written letter,
email or fax to the attention of the Chief Financial Officer of MB, who is
currently Xxx Xxxxx. The formula for the funding of the Good Funds Account by MB
is as follows:
o Upon execution of this Agreement by both parties, MB will fund the
non-interest bearing Good Funds Account with the minimum balance of $10,000.
o Each Wednesday and Friday, MB will send via ACH into the Good Funds Account
the previous two day's cumulative value loaded and reloaded to the MB Cards,
plus SCN's portion of the Retail Fees and Reload Fees associated with the sale
of the MB Cards or the reload of the MB Cards on such day. Each Monday, MB will
send via ACH into the Good Funds Account the previous Friday, Saturday and
Sunday's cumulative value loaded and reloaded to the MB Cards, plus SCN's
portion of the Retail Fees and Reload Fees associated with the sale of the MB
Cards or the reload of the MB Cards on such days. If the day of the
regularly-scheduled ACH to the Good Funds Account falls on a bank holiday, MB
will send via ACH into the Good Funds Account the cumulative value loaded and
reloaded to all MB Cards sold or reloaded since the date of the last ACH to the
Good Funds Account, plus SCN's portion of the Retail Fees and Reload Fees
associated with such Card sales and reloads, on the next business day following
the holiday.
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o Each business day SCN will instruct the Issuing Bank to transfer funds from
the Good Funds Account to the Issuing Bank Reserve Account. The total amount of
funds transferred will be based on the value loaded and reloaded to the MB Cards
since the last transfer.
6.2 RESERVE FUNDS REPLENISHMENT. Each week, upon the written request of
SCN, MB will send to SCN via ACH into the Good Funds Account an amount equal to
the cumulative value loaded and reloaded to the MB Cards during the last
fourteen days (or average day's load and reload amount multiplied by fourteen)
as described above, less the balance already on deposit at that time. This total
will be the new minimum Reserve Funds balance requirement in effect until the
next weekly adjustment.
6.3 RESERVE FUNDS SHORTFALL. Should the cumulative load value for loads
and reloads made at any given time bring the Reserve Funds balance below 50% of
the required minimum Reserve Funds balance in effect at that time, SCN will
contact a MB-designated emergency contact as provided by MB to request that
replacement funds be wired to SCN by MB in an amount equal to the additional
money needed to bring the Reserve Funds balance back to the minimum balance in
effect at that time. Should MB fail to wire these additional funds before the
close of business on the following business day, or if the Reserve Funds balance
should fall below 30% of the required minimum Reserve Funds balance in effect at
that time, then SCN will contact MB to instruct MB to immediately halt the
loading of new MB Cards and reloads of existing MB Cards at MB Dealer Locations
and SCN will also be free to pursue any other rights and remedies provided under
this Agreement (including emergency suspension of this Agreement in accordance
with Section 9.5 herein), at law or in equity, that it deems necessary and
appropriate.
6.4 RESERVE FUNDS REFUNDS. MB will be entitled to a refund of the
remaining balance of the Reserve Funds ninety (90) days from the termination of
MB Card sales, If MB Card sales were never commenced pursuant to Section 9.6,
any payments made toSCN shall be refunded within ten (10) days of termination of
this Agreement.
6.5 Chargeback Funds. MB shall be fully responsible for any losses due
to fraud and overdrafts related to the MB Cards or any other misuse of the MB
Cards. To protect SCN against losses due to fraud and overdrafts related to the
MB Cards or any other misuse of the MB Cards, during the Term of this Agreement,
MB agrees to fund an additional amount (the "Chargeback Funds'1) into the Good
Funds Account. The initial amount of the Chargeback Funds shall be equal to the
greater of two percent (2%) of the initial funding deposits, $2,000, or such
greater amount required by the Issuing Bank. Within 45 days of the commencement
of the initial Program established under this Agreement and thereafter, the
minimum balance required of the Chargeback Funds shall be equal to two percent
(2%) of the total Loads under the MB Cards in the immediately preceding month
(THE "MINIMUM CHARGEBACK FUNDS BALANCE"). If the balance of the Chargeback Funds
falls below the Minimum Chargeback Funds Balance, MB shall deposit funds with
SCN sufficient to increase the amount of the Chargeback Funds to maintain such
Minimum Chargeback Funds Balance. If the Minimum Chargeback Funds Balance is not
so maintained, SCN reserves the right to stop allowing MB Cards to be issued or
to take such other action as it deems appropriate. From time to time, the
parties will analyze this requirement to ensure that it is accurately tied to
actual and potential losses.
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7. INTELLECTUAL PROPERTY
7.1 INTELLECTUAL PROPERTY OWNERSHIP. Each party shall retain all right,
title and interest, including all copyrights, patent rights, and rights in
trademarks, service marks, logos and commercial symbols as well as all other
intellectual property nghts as listed on Schedule A attached hereto and
incorporated herein by reference, and all goodwill associated therewith
(collectively, "INTELLECTUAL PROPERTY"). Neither party shall acquire any
interest in the other party's Intellectual Property or any other products,
services or materials, or any copies or portions thereof, provided by such party
pursuant to this Agreement, and any commercial use of the Intellectual Property
other than pursuant to this Agreement is strictly prohibited.
7.2 LICENSE OF TRADEMARKS. No Intellectual Property owned by either
Party or licensed to either Party by any third party may be used or reproduced
by the other Party in any manner, shape or form without the prior written
permission of the Party owning the Intellectual Property rights.
7.3 RESERVATION OF RIGHTS IN TRADEMARKS. All rights not expressly
granted herein with respect to either Party's Intellectual Property are reserved
to that Party. Nothing contained herein shall limit either Party's right to
license its Intellectual Property to any third party. It is expressly understood
and agreed that, as between the Parties, that each Party's Intellectual Property
and all right, title and interest therein are and shall remain the sole and
exclusive property of the Party initially owning said Intellectual Property.
8. WARRANTIES AND DISCLAIMER
8.1 NO CONFLICT Each party represents and warrants to the other party
that it is under no current obligation or restriction, nor will it knowingly
assume any such obligation or restriction that does or would in any way
interfere or conflict with, or that does or would present a conflict of
interest, concerning the performance to be rendered hereunder or the rights and
licenses granted herein.
8.2 INTELLECTUAL PROPERTY WARRANTY. Each party represents and warrants
to the other that it has full and sufficient right, title and authority to grant
the rights and/or licenses granted to the other under this Agreement.
9. TERM AND TERMINATION
9.1 TERM. The initial term of this Agreement shall commence on the
Effective Date and shall continue in full force and effect until the third
anniversary of the Effective Date (the "INITIAL TERM"). This Agreement shall
automatically thereafter renew for additional twelve (12) month terms, unless
written notice of termination is sent to the non-canceling party in accordance
with the Notice provisions of this Agreement at least 90 days prior to
expiration of the Initial Term or any subsequent term.
9.2 TERMINATION. If either Party materially breaches any term or
condition of this Agreement and fails to cure such breach within thirty (30)
days after receiving written notice of the breach, the non-breaching Party may
terminate this Agreement on written notice at any time following the end of such
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thirty (30) day cure period. This Agreement shall terminate immediately upon
notice if either Party (a) becomes insolvent (i.e., becomes unable to pay its
debts in the ordinary course of business as they come due); (b) makes an
assignment for the benefit of creditors; Cc) commences, or has commenced against
it, a proceeding under any bankruptcy, insolvency or debtor's relief law; (d)
has a receiver appointed over ft; or (e) has ceased its ongoing business
operations. In any event, SCN will be fully responsible to continue to fund any
and all Card sales and reloads that are processed after this Agreement's
termination. Sections 4, 5, 6, 9, 10, 11, 12, and 13 will survive termination or
expiration of this Agreement for any reason.
9.3 SECTION 365(N) OF BANKRUPTCY CODE. All rights and licenses granted
under or pursuant to this Agreement by either Party to the other Party are, and
shall otherwise be deemed to be, for purposes of Section 365(n) of the United
States Bankruptcy Code, 11 U.S.C. Section 101, et seq. (the "BANKRUPTCY CODE'),
licenses of rights to "intellectual property" as defined under Section 101(56)
of the Bankruptcy Code. The Parties agree that each Party as licensee of such
rights and licenses shall retain and may fully exercise all of their respective
rights and elections under the Bankruptcy Code, provided such licensee party
abides by the terms of this Agreement.
9.4 EFFECT OF TERMINATION. Upon termination or expiration of this
Agreement (i) any licenses granted hereunder shall terminate; (ii) each Party
shall return to the other all copies of any Confidential Information (as defined
below), and all documents, content or other materials provided to such party by
the other hereunder; (Hi) MB shall immediately cease the sale of all MB Cards in
its possession and shall immediately cease all use of the Intellectual Property
of SCN; (iv) all payments of fees then due shall-be paid upon such termination;
and (v) each Party's rights and obligations with respect to fees payable
hereunder, in accordance with Section 4 of this Agreement, and such other
provisions that by their nature are intended to survive termination, shall
survive the termination of this Agreement.
9.5 EMERGENCY SUSPENSION. Upon fax or written notice to MB by SCN, MB
agrees to immediately (within 24 hours1 or, if the day of such notice falls on a
Saturday, Sunday or a holiday, on MB's next business day) halt the sale and/or
reload of MB Cards within all MB Dealer Locations selling or reloading the MB
Cards or of Internet programs. MB represents that it owns the technology
necessary, or has the contractual ability through a third party, to halt sales
and reloads of MB Cards at all MB Dealer Locations without regard to whether the
MB Dealer Locations are cooperative in halting such sales or reloads. Reasons
for invoking an "emergency suspension" may include (a) a regulatory change; (b)
the need to protect or preserve property; (c) the failure to fund any shortfall
of the Reserve Funds in accordance with Section 6.3 herein, or (d) any other
reason, determined by SCN using commercially reasonable judgment, that
constitutes an immediate need to halt Card sales and reloads. In the event of
such emergency suspension, SCN and MB will have fifteen (15) days from the date
of such emergency termination notice to mutually decide whether to resume Card
sales and/or reloads. If the parties fail to mutually agree to resume Card sales
and/or reloads during this 15-day period, this Agreement shall be terminated
solely with respect to those MB Dealer Locations at which Card sales and reloads
were suspended on the earlier of either (a) the date upon which one or both
parties determine(s) that Card sales and/or reloads shall not be resumed at such
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MB Dealer Locations or (b) the close of business on the lS' day following the
date of the emergency suspension notice. MB will provide SCN with the name and
24- hour contact information of an emergency MB contact with the authority and
ability to immediately halt all Card sales and reloads at MB Dealer Locations.
9.6 ASSOCIATION AND BANK APPROVAL. All facets of this Agreement are
subject to approval by VISA and the Issuing Bank. Should VISA or the Issuing
Bank not approve the program for whatever reason, or once approved, rescind such
prior granted approval, then this Agreement will terminate subject to the
provisions of Section 9.4 herein.
10. INDEMNIFICATION
Each party (the "INDEMNIFYING PARTY") shall indemnify, defend and hold harmless
the other party (the "INDEMNIFIED PARTY") from any and all damages, liabilities,
costs and expenses (including reasonable attorneys' fees) incurred by the
Indemnified Party arising out of any claim related to the promotion, sale or
funding of the Card: (1) alleging that the Indemnifying Party has infringed any
patent, copyright, trademark or trade right secret of a third party; (2)
alleging any breach of any representation or warranty of the Indemnifying Party
contained in this Agreement and any Schedule hereto; (3) with respect to any
claim by a consumer or regulating authority with respect to any fees or charges
assessed by SCN to those consumers who purchase MB Cards at MB Dealer Locations;
or (4) in connection with the performance of any act, any failure to act or the
commission of any criminal act by any of its employees or agents in connection
with the promotion, sale or funding of the Card. The Indemnifying Party's
obligations under this Section 10 are expressly conditioned upon the Indemnified
Party promptly notifying the Indemnifying Party in writing of any such claim and
promptly tendering the control and the defense and settlement of any such claim
to the Indemnifying Party at Indemnifying Party's expense and with Indemnifying
Party's choice of counsel. Each Indemnified Party shall cooperate with the
Indemnifying Party, at the Indemnifying Party's expense, in defending or
settling such claim. Notwithstanding the foregoing, the Indemnified Party may
join in the defense of such action with counsel of its choice at its own
expense.
11. DISPUTE RESOLUTION, WAIVER OF RIGHT TO TRIAL BY JURY
11.1 ANY litigation, claim, dispute, suit, action, controversy,
proceeding or otherwise (a "claim") arising out of or relating in any way to
this Agreement, except claims related to Confidential Information (as defined
below)1 will be:
(a) FIRST, submitted to non-binding mediation before (i) a
mutually agreeable mediation service or mediator or (ii) Judicial Arbitration
and Mediation Service if no agreement can be reached on a mediator or mediation
organization. On election by any party, arbitration and/or any other remedy
allowed by this Agreement may proceed forward at the same time as mediation, In
the mediation, each party shall be represented by an individual authorized to
make binding commitments on its behalf and may be represented by counsel. In
addition, each party may, with permission of the mediator, bring such additional
persons as are needed to respond to questions, contribute information and/or
participate in the negotiations. The mediator shall be disqualified as a
witness, consultant, expert or counsel for any party with respect to the dispute
and any related matters.
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(b) SECOND, if neither party desires mediation (or if such
mediation is not successful in resolving such claim), submitted to and finally
resolved by binding arbitration before and in accordance with the arbitration
rules of the American Arbitration Association for complex cases (providing for
full discovery to the Parties) or similar alternate disputes resolution services
(also providing full discovery to the Parties) mutually agreed upon by the
Parties. In each case, the parties to any mediationlarbitration will execute
appropriate confidentiality agreements, excepting only such public disclosures
and filings required by law.
11.2 Any mediation/arbitration will be exclusively conducted in
Xxxxxxxxxx County, Texas, to facilitate participation of important individuals
and availability of documents to the resolution of the matter. Except as
expressly provided below, the parties to any mediation or arbitration will bear
their own costs, including attorney's fees. The parties to the dispute shall
share the fees and expenses of the mediator(s), arbitrator(s), mediation
organization and/or arbitration organization equally, Any claim will be
resolved, and any mediation/arbitration will be conducted, on an individual
basis only and not on a class-wide, multiple plaintiff or similar basis. On
request of any party to a claim, a court reporter will provided to record the
proceedings but the party so requesting will bear the fees and charges incurred
in connection therewith and the Parties contributing to such reporting costs
shall be the only ones to receive a transcript of the proceedings. The
arbitrator will be required to issue a written award, specifying the facts found
and the law applied. The arbitrator may award or otherwise provide for temporary
restraining orders, preliminary injunctions, injunctions, attachments, claim and
delivery proceedings, temporary protective orders, receiverships and other
pre-judgment, equitable and/or interim relief as appropriate pending final
resolution by binding arbitration of a claim, as well as in connection with any
such final resolution, and may issue summary orders disposing of all or part of
a claim at any point Each participant must submit or file any compulsory
counterclaim (as defined by the applicable rule under the Federal Rules of Civil
Procedure) within the same proceeding as the claim to which it relates or be
forever barred. Any offers, discussions, negotiations, mediations or otherwise
in connection with possible resolution of any claim may not be introduced for
any purpose in any arbitration proceeding, court proceeding or otherwise.
11.3 Judgment on any preliminary or final arbitration award may be
entered 1ff any court having jurisdiction and will be binding, final and
appealable.
11.4 Each party knowingly WAIVES ALL RIGHTS TO TRIAL BY A COURT OR JURY
to resolve any claims arising out of or in any way relating to this Agreement
(other than claims related to Confidential Information), understanding that
arbitration may be less formal, may use different rules of procedure and
evidence and that appeal of arbitration awards is generally less available.
12. DAMAGES AND INJUNCTIVE RELIEF
12.1 LIMITATION ON DAMAGES. The parties to this Agreement each waive
any right to recover, and any rights to make claims for, punitive, exemplary,
multiple, pain-and-suffering, mental distress, incidental, indirect,
consequential, special, and/or similar damages under any theory whatsoever, even
if the party from whom such damages are sought is aware of the possibility of
such damages. SCN's maximum liability to MB shall be limited to an amount equal
12
to the net Retail Fees and Reload Fees paid from MB Dealer Locations to SCN
during the 180 day period prior to SCN's receipt of written notice of the
alleged breach, and MB's maximum liability will be limited to an amount equal to
the net Retail Fees and Reload Fees paid from MB Dealer Locations to SCN during
the 180 day period prior to MB'S receipt of written notice of the alleged
breach, plus any funds held in the Good Funds Account or required hereunder to
be transmitted to the Good Funds Account. The parties have agreed on this
limitation in recognition of the fact that the calculation of any actual damages
would be exceedingly difficult and subject to speculation and possible abuse and
that the foregoing compromises benefit both parties equally. THE LIMITATION OF
LIABILITY SET FORTH IN THIS SECTION 12.1 SHALL NOT APPLY TO ANY FAILURE BY MB TO
TRANSMIT CARDHOLDER FUNDS TO SCN AS SET FORTH IN THIS AGREEMENT.
12.2 INJUNCTIVE RELIEF. The parties agree that in the event of a breach
of Section 13 below, the disclosing party could suffer irreparable harm for
which monetary damages would be inadequate, and therefore, in addition to any
other remedy that the disclosing party might have at law or in equity,
injunctive relief may be appropriate. Neither Party will be required to post a
bond in order to obtain any injunctive or other equitable relief and that a
Party's only remedy if an injunction or other equitable relief is entered
against it will be to obtain dissolution of such injunction or other order.
13. CONFIDENTIALITY
13.1 CONFIDENTIAL INFORMATION. Each party acknowledges and agrees that,
in the course of this Agreement and the parties' relationship, it may be given
access to or otherwise obtain such information of the other party as such other
party reasonably considers confidential or proprietary ("CONFIDENTIAL
INFORMATION"). Without limitation of the foregoing, all unique and original
ideas, concepts, marketing plans, research results, business plans, Intellectual
Property, and this Agreement, shall be considered Confidential Information.
13.2 EXCEPTIONS. The obligations set forth herein shall not apply to
the extent that information: (i) is now in, or subsequently enters through no
fault of the receiving party, the public domain; (H) is known to the receiving
party without restriction, prior to receipt from the disclosing party; (Hi) is
received from any third party reasonably known by such receiving party to have a
legal right to transmit such information, and not under any obligation to keep
such information confidential; (iv) is independently developed by the receiving
party's employees or agents provided that the receiving party can show that
those same employees or agents had no access to the Confidential Information
received hereunder; or (v) is required to be disclosed under applicable law or
in a judicial or other governmental investigation or proceeding, provided the
disclosing party has been given prior notice and opportunity to contest the need
for such disclosure or to seek a protective order therefore.
13.3 USE OF CONFIDENTIAL INFORMATION. Each party hereby agrees to hold
the other party's Confidential Information in strict confidence, and shall not
disclose such Confidential Information, or any part thereof, to any third-party,
except those of its officers, employees, consultants, or professional advisors
on a need to know basis in order for the receiving party to perform its
13
obligations hereunder, provided that such officers, employees, consultants, or
professional advisors shall, prior to any disclosure, have expressly agreed to
be bound to confidentiality obligations no less strict than those described
herein. Each party shall remain solely responsible to the other party for the
conduct of its employees and agents with respect to the Confidential
Information.
14. MISCELLANEOUS
14.1 ASSIGNMENT. Neither party may assign this Agreement or any rights
or obligations hereunder, whether by operation of law or otherwise, without the
prior written consent of the other party. However, no consent shall be required
for either party to assign this Agreement, along with such party's rights and
obligations hereunder, in connection with the merger, consolidation or
acquisition of such party or the sale of all or substantially all of its assets.
Any attempted assignment in violation of this Section 14.1 shall be void.
14.2 NOTICES. Any notices and other communications required or
permitted under this Agreement shall be effective if in written form and
delivered personally or sent by fax, Federal Express or other generally
recognized overnight carrier or by First Class U.S. Mail, with postage prepaid,
addressed to the parties at the addresses set forth on the signature page to
this Agreement. Unless otherwise specified herein, such notices or other
communications shall be deemed effective (and to have been received) (a) on the
date delivered, if delivered personally; (b) one (1) business day after being
sent, if sent by Federal Express or other generally recognized overnight
carrier; (c) one (1) business day after being sent, if sent by fax with
confirmation of good transmission and receipt; or (d) three (3) business days
after being deposited in the U.S. Mail, First Class, with postage prepaid. Each
of the parties hereto shall be entitled to specify another address for receiving
notices by giving notice thereof to the other party as set forth herein.
14.3 RELATIONSHIP OF THE PARTIES. Other than the limited agency set
forth in Section 1.2 of this Agreement, SCN and MB are independent parties, and
nothing contained in this Agreement shall be deemed or construed to create the
relationship of principal and agent or of partnership or joint venture, and
neither party shall hold itself out as an agent, legal representative, partner,
subsidiary, joint venturer, servant or employee of the other. Neither party nor
any officer or employee thereof shall, in any event, have any right collectively
or individually to bind the other party, to make any representations or
warranties, to accept service of process, to receive notice, or to perform any
act or thing on behalf of the other party, except as authorized in writing by
such other party in its sole discretion.
14.4 FORCE MAJEURE. Neither party shall be liable for any delay or
failure in its performance of any of the acts required by this Agreement when
such delay or failure arises from circumstances beyond the control and without
the fault or negligence of such party. Such causes may include, without
limitation, acts of God, acts of local, state or national governments or public
agencies, acts of public enemies, acts of civil or military authority, labor
disputes, material or component shortages, embargoes, rationing, quarantines,
blockades, sabotage, utility or communication failures or delays, earthquakes,
fire, flood, epidemics, riots or strikes. The time for performance of any act
delayed by any such event may be postponed for a period equal to the period of
such delay.
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14.5 TIME. Time is of the essence of this Agreement with respect to
each and every provision of this Agreement in which time is a factor.
14.6 CUMULATIVE REMEDIES. Unless expressly set forth herein to the
contrary, all remedies set forth herein are cumulative and are in addition to
any and all remedies provided either party at law or in equity.
14.7 WAIVER AND MODIFICATION. No purported waiver by either party of
any provision of this Agreement or of any breach thereof shall be deemed to be a
waiver of such provision or of any subsequent breach of the same or any other
provision hereof, nor shall either party's continued dealing with the other
party following a breach of any provisions hereof be deemed to be a waiver of
such or any other breach. No change in, modification of, or addition, amendment
or supplement to this Agreement shall be valid unless set forth in writing and
signed by each of the parties hereto.
14.8 SUCCESSORS. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
permitted assigns.
14.9 APPLICABLE LAW. This Agreement and the rights and obligations of
the parties hereunder shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Texas, without regard to the conflict
of laws provisions thereof.
14.10 ENTIRE AGREEMENT This Agreement, inclusive of all schedules
attached hereto, sets forth the entire agreement between the parties hereto, and
supersedes all prior agreements or understandings between the parties pertaining
to the subject mailer hereof.
14.11 SEVERABILITY. If any provision of this Agreement (or any portion
thereof) is determined to be invalid or unenforceable, the remaining provisions
of this Agreement shall remain in full force and effect and shall be binding on
the parties hereto and enforceable in accordance with their terms, as though the
invalid or unenforceable provision (or portion thereof) was not contained in
this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and first year above written.
SECURE CASH NETWORK, INC. XXXXXX BEAUMONT, INC.
A Texas corporation A Florida corporation
By:____________________________ By: ______________________________
Xxxx Xxxx , CEO Xxxxx Xxxxxx CEO
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SCHEDULE A
TRADEMARKS
SCN
---
Secure Cash
Secure Cash Network
Secure Cash Payday
Pronto Banco
Paga Rapido
The Gold Key Logo
Gold Key Network
Gold Key Center
"Look for the Gold Key"
XXXXXX BEAUMONT, INC.
---------------------
Xxxxxx Beaumont Money Card
Xxxxxx Beaumont ATM Card
Xxxxxx Beaumont Payroll Card
Xxxxxx Beaumont Stored Value
Xxxxxx Beaumont Debit Card
Xxxxxx Beaumont Load Network
EVault
Evault Storage
Aqui & Alla
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Schedule B
EXCLUSIVE MB DEALERS AND MB DEALER LOCATIONS
MB Dealer and MB Dealer
Locations
Relationship To MB
Plan for Selling MB Cards
All Mexico Express stores and locations
FTD Florist locations
PostalNet Locations
Radial Comercio USA locations
Tornado Bus Company
El Conejo Bus Lines Inc.
Radio Shack
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Schedule C
PURCHASE PRICE SCHEDULE
The following commissions are payable to MB during the Term of this Agreement
and for 6 months thereafter for the respective Cardholders which continue to
purchase, and pay for, MB or SCN products, services and programs at MB Dealer
Locations. These commissions shall be payable only it MB continues to service
the MB Dealer Locations including personal contact for the purpose of explaining
the SCN products, training the employees of MB Dealer Locations in the
implementation of the SCN products and continuing personal contact with MB
Dealer Locations and its employees in order to promote the use of the SCN
products. In the event MB shall not perform the described services, each item of
the following commission schedule may be reduced in order that SCM can cover the
cost of performing those services itself or obtaining a third party to do so. MB
shall only be entitled to commissions if all other terms and conditions of the
Agreement are met. MB shall solely determine the amount (if any) of the
commission earned to be paid to the participating MB Dealer Locations.
COMMISSION STRUCTURE
CARDHOLDER SERVICE SCHEDULE
Cardholder
Retail Fees
MB Buy Rate
MB Commissions
Cardholder Packet
2 ATM Debit cards Retail Pkg (Purchased bulk, gty >5,000)(1)
Visa Logo Hologram (pkg and ship)
1A2._.
LoadlRe-Ioad
Activation Fee (2)
$0.50 (3)
Load/Re-load Retail charge (2)
$0.50 (3)
Card to card Transfer (2)
$0.50 (3)
Ad-I LoadiLcad Failure (2)
$0.50 (3)
Batch Load (plus $5.00 processing fee per batch by Bank) (2)
$0.50 (3)
Monthly Maintenance
Maintenance card (MB Card) (2)
$1.00 (3)
ATM within united States
ATM Withdrawal (2)
$1.05 (3)
ATM Withdrawal Decline or Balance Inquiry (2)
$0.75 (3)
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ATM outside United States
ATM Withdrawal (2)
$3.00 (3)
ATM Withdrawal Decline or Balance Inquiry (2)
$0.75 (3)
POS Purchase within the United States
POS Purchase (2)
$0.35 (3)
P05 Purchase Decline (2)
$0.50 (3)
P05 Purchase outside the United States
P05 Purchase (2)
$0.50 (3)
P05 Purchase Decline or Balance InquIry (2)
$0.65 (3)
Other Fees
Xxxx Payment TBD
Account Liquidation Fee $15.00
$15.00 $0.00
Returned Check Fee (ACH) $24.00
$24.00 $0.00
Overdraft Fee $24.00
$24.00 $0.00
Inactivity Feelmo after 90 days $5.00
$5.00 $0.00
(1) -- MB is responsible for the all of the cost of printing, production and
distribution of cards, cardholder agreements, pin cards, mailers, etc.
(2) -- Cardholder Fees to be established by MB for MB Cards in accordance to
this Agreement.
(3) -- Commission are calculated by subtracting the MB Buy Rate column from the
Cardholder Retail Fees column SCN may modify commissions from time-to-time upon
30-days written notice to MB to reflect changes in third party costs for
processing and reporting by SCN.
(4) -- Xxxxxx Beaumont Private Brand Sales Agmt v3f 18
19
Schedule D
EXCLUSIVE PROGRAMS
Programs
Relationship to MB
Plan for Selling MB Cards
Royal Card and orAmi Golan
Blackstone
USXP Capital, or Neauve' Riche/ Xxxxx Xxxxxx
MagicCash Card (Xxxxx Xxxxxxx)
4hV
Xxxxxx Beaumont Private Brand Sales Agmt v3f 19
20
