EXHIBIT 10.2
FEC LIMITED
Ecommerce Merchant Agreement
THIS AGREEMENT is made on the o day of November 1999.
BETWEEN:
FEC Limited, a company incorporated under the laws of Bermuda
whose registered office is at Xxxxxx Xxxxx, 00 Xxxxxxxxxx Xxxxxx,
Xxxxxxxx XX00, Xxxxxxx ("XXX") and The Peoples Telephone Company
Limited, a company incorporated under the laws of Hong Kong SAR
whose registered office is at 8/F Manhattan Centre, 8 Xxxx Xxxxxx
Road, Xxxx Xxxxx, Kowloon, Hong Kong. ("Merchant")
RECITALS:
A. FEC is an agent duly authorised by Bank of Bermuda Limited, a member of
MasterCard International Inc. and Visa International, to process
MasterCard and Visa Card payments for the purchase of goods and services,
including over the Internet and made by Cardholders.
B. The Merchant wishes to utilise FEC's services and FEC wishes to provide
such services, subject to the terms and conditions set out in this
Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual
covenants and Agreements set out in this Agreement, the parties, and agree as
follows:
1. Definitions And Interpretation
1.1 Wherever used in this Agreement, the following terms have the meanings
set out below:
(a) "Agreement" means this agreement as amended by the parties from
time to time in writing;
(b) "Bank" means the Bank of Bermuda Limited;
(c) "Business Day" means every day except Saturday, Sunday and any
other day on which principal commercial banks are not open for
business, and unless otherwise expressly provided in this
Agreement, in the countries in which the subject Card Sale is
effected;
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(d) "Card" means a credit card issued by a Card Association or any of
their duly authorised licensees and such other cards as FEC may
agree to process from time to time pursuant to Clause 3.3;
(e) "Card Associations" means MasterCard International Inc. or Visa
International;
(f) "Cardholder" means a customer of the Merchant effecting a Card
Sale;
(g) "Card Sales" means purchases of goods and/or services from the
Merchant effected by means of a Card and processed by FEC pursuant
to the provisions of this Agreement and "Card Sale" means any one
such transaction;
(h) "Charge Back" means any Card Sale transaction effected hereunder
which is disputed by a Cardholder and where notice of such dispute
has been given to the Bank or bank issuing the subject Card;
(i) "Credit" has the meaning given to that term in Clause 7.1;
(j) "Merchant Account" means the account established by FEC on behalf
of the Merchant pursuant to the provisions of Clause 4.1;
(k) "Restricted Services" means products or services that constitute,
relate to or are ancillary to, in whole or in part:
(i) pornographic or illicit material or activities of any type;
(ii) escort services;
(iii) gambling operations, including "virtual casinos";
(iv) ticket factoring;
(v) pyramid selling;
(vi) goods, products, services or distributions prohibited by
applicable law or under the rules, regulations or
directives of any Card Association; or
(vii) goods, products, services or distributions of any class or
type, whether or not similar to those specified above,
which are designated from time to time by FEC (in its sole
discretion) as being subject to this definition and notice
thereof being given to the Merchant, provided that no such
designation or notice is required for any particular Sale
to be subject to this definition; and
(l) "Total Sale Price" means the gross amount of any particular Card
Sale without discount, set-off or other adjustment.
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2. Use of FEC Services
2.1 The Merchant agrees to use the Card processing services provided by FEC
with respect to Card Sale transactions made over the Internet and FEC
agrees to provide such services, on and subject to the terms and
conditions set out in this Agreement.
2.2 In consideration of clause 2.1, the Merchant agrees to pay the following:
(a) To pay the discount fee provided for in clause 4.1.
(b) To pay a US$ 0.50 transaction fee per transaction where a credit
card not belonging to a Card Association is used.
2.3 FEC agrees to waive the cost of the HK$100,000 website design and
development fee it normally charges to its customers as consideration for
the Merchant entering into this Agreement.
3. Honouring Cards
3.1 In effecting Card Sales, the Merchant will honour properly tendered Cards
and will not discriminate between Cardholders and cash customers or
between Cardholders of different Cards. The Merchant will sell Merchant's
goods and/or services at its regular cash prices, including any special
sales price then in effect, without service or carrying charges of any
kind and will make no special charge (including what is commonly known as
a "surcharge") or extract any special agreement, condition or security
from a Cardholder and without otherwise requiring any Cardholder to pay
any part of the discount charged by the Merchant hereunder and will not
refuse to exchange, return, or adjust merchandise purchased if any such
exchange, return or adjustment is permitted to cash customers.
3.2 All Card Sales processed by FEC with respect to the Merchant will
represent obligations of Cardholders in amounts set forth therein for
merchandise sold or services rendered only, and shall not include or
involve any element of credit for any other purpose.
3.3 FEC shall have the right, upon notice to the Merchant, to accept such
other credit and debit and similar cards from such other Card issuers as
it may designate from time to time.
4. Merchants Account - Depositing Card Sales
4.1 Subject to the terms and conditions of this Agreement FEC will cause to
be credited to an account maintained by FEC with the Bank with respect to
the Merchant (the "Merchant Account") the Total Sale Price thereof and
deduct a percentage of such Total Sale Price at the time of such deposit,
such percentage to be advised by FEC to the Merchant. Such percentage may
be amended, from time to time, upon 15 days written notice to the
Merchant. The percentage to be deducted from the Total Sale price shall
be that percentage which is in effect at the time of the Card Sale. The
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percentage to be deducted from the Total Sale price will be at least as
favourable as any rate FEC gives to any other merchant providing an equal
or greater volume for the preceding three months. FEC may require the
Merchant to open or maintain a current or other account with or procure
any other service of the Bank, which is advisable or essential to the
operation of the applicable card plan, from the Bank or its subsidiaries.
4.2 FEC agrees to credit the amount aforementioned in clause 4.1 above to the
Merchant Account within three Business Days in Bermuda.
4.3 Except as set forth in Clause 8, the Bank on behalf of FEC shall have the
sole right to receive payments on Card Sales processed by FEC. The
Merchant agrees not to xxx or to make any collections thereon, except as
may be specifically authorised by FEC in writing. In the event of such
authorisation, the Merchant agrees to hold all collections, if any, in
trust for FEC and to deliver it in kind immediately upon receipt. All
electronic and digital records, electronic sales drafts, electronic
credit vouchers, electronic acknowledgements and other supporting records
as may be required from time to time by the Bank with respect to Cards
Sales should be provided to the Bank on behalf of FEC by the Merchant in
accordance with the rules of the Card Association applicable to the Card
utilised in the transaction.
4.4 All Card Sales are subject to final audit and review by FEC and the Bank,
and the Merchant agrees that in the case of any inaccuracies, FEC may
charge or credit the Merchant's Merchant Account, without notice, for any
deficiencies or overages, as the case may be. The preparation and
delivery of Card Sales to the Bank on behalf of FEC by the Merchant shall
constitute an endorsement to FEC and the Bank by the Merchant of each
Card Sale for processing.
5. Authorising Card Sales
5.1 The Merchant, in making a Card Sale, will:
(a) contact FEC or its authorised agent(s) for authorisation for the
amount of such sale and authorisation number (Authorisation
Number);
(b) complete the transaction only after receiving the necessary
authorisation: and
(c) not effect a Card Sale transaction when only a part of the
consideration due is paid through the use of a Card unless the
reminder at the time of sale is paid either in cash or by cheque.
6. Unqualified Sales
6.1 The Merchant shall be liable to FEC for any Card Sale and FEC shall also
have the right at any time to charge the Merchant or the Merchant's
Merchant Account therefor, without notice, in any situation relating to
Card Sale or the Merchant's obligations under this Agreement where:
(a) the Card is invalid;
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(b) the Card appears on the Bank's current invalid Card list at the
time the transaction was consummated;
(c) merchandise is returned or services are disputed by Cardholder
whether or not a credit transaction is issued or delivered to the
Bank;
(d) the Card Sale is alleged to have been accepted or requested
improperly or without authority;
(e) the Cardholder disputes the sale, quality or delivery of
merchandise or the performance or quality of services rendered as
set forth on the Card Sale accepted by such Card holder or
authorised user;
(f) the Card Sale was drawn by, or depository credit given to, the
Merchant in circumstances constituting a breach of any term,
condition, representation, warranty, or duty of the Merchant
hereunder;
(g) the extension of credit for merchandise sold or services performed
was in violation of law or rules or regulations of any
governmental agency, local or otherwise; or
(h) the Card Sales relates in whole or in part to Restricted Services.
7. Credits
7.1 If any merchandise which is the subject matter of any Card Sale hereunder
is returned or price adjustment allowed or the purchaser is not the
person whose name appears as Cardholder, the Merchant will process a
credit ("Credit") in accordance with the requirements of the Bank or FEC.
These requirements may change from time to time.
8. Collections
8.1 The Bank on behalf of FEC has sole right to receive payments on Card
Sales effected under this Agreement unless charged back to the Merchant.
The Merchant will not accept any such payments and hereby assigns to FEC
all its right, title and interest in and to all Card Sales.
9. Displays And Equipment
9.1 The Merchant will adequately exhibit such advertising displays, including
digital or electronic displays, as FEC or the Bank may provide for
advising the public that Cards will be honoured by the Merchant. The
Merchant will not display any other advertising materials that identify
or make use of the service xxxx of the Card Associations' names unless
approved by FEC or the Bank.
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10. Representations And Warranties
10.1 As to each Card Sale the Merchant delivers to the Bank on behalf of FEC
and the transaction it evidences, the Merchant will be deemed to
represent and warrant to FEC that, to the best of the Merchant's
knowledge:
(a) it represents a bona fide sale of only merchandise or services in
the ordinary course of business for the Total Sale Price;
(b) the Merchant has performed it's obligations to the Cardholder in
connection with the transaction evidenced thereby;
(c) it is, in all respects, as required by and in compliance with this
Agreement, and all laws, rules and regulations, governing the
same, including that the subject Card Sale is not with respect to
prohibited activities or Restricted Services;
(d) the Merchant has no knowledge or notice that would impair or
affect the validity of the sale or the enforceability or
collection thereof as against the named Cardholder.
11. Prohibited Activities and Restricted Services
11.1 The Merchant will not engage in any money laundering activities or any
other illegal activities or the sale of Restricted Services.
11.2 The Merchant hereby covenants and agrees to indemnify and save harmless
FEC from and against any loss or damage suffered by FEC, the Bank or any
of their respective employees, officers and directors and their
respective successors and assigns as a result of any breach of,
non-compliance the provisions of Clause 11.1 by the Merchant, including,
without limitation, all costs and expenses (including legal fees incurred
in connection with any such loss or damage).
12. General
12.1 The Merchant will:
(a) observe and comply with the applicable rules, regulations codes
and promulgated procedures as FEC, the Bank or Card Associations
may prescribe for credit, debit and similar card sales, from time
to time. The Merchant acknowledges and agrees that all such rules,
regulations, codes and procedures shall be deemed to form a part
of this Agreement and are incorporated herein by reference;
(b) preserve all digital, electronic and other records pertaining to
Card Sales and Credits as may be required by the Bank or FEC for
two (2) years from the date thereof and permit FEC or the Bank to
examine and verify such records at any reasonable time;
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(c) execute and file such statement and notices as FEC or the Bank may
request to preserve or protect their respective interests
hereunder;
(d) agree to indemnify and save harmless FEC, the Bank and their
respective employees, officers and directors and their respective
successors and assigns against all actions, causes of action,
proceedings, liability, claims, damages and costs whatsoever
(including without limitation legal costs and expenses),
interposed by any party or persons by way of action, claim, suit,
defence, dispute, offset, cross-claim or counterclaim, that may
now or at any future time directly or indirectly arise relating to
any Card Sales processed by FEC or the Bank as a result of a
failure to pass on the Merchant's electronic file transmission of
any Card Sale to FEC or the Bank or out of the processing of Card
Sales, provided that such claim, damage or other liability is not
attributable to any gross negligence or wilful misconduct on the
part of FEC;
(e) subject to Clause 8, waive notice of default or non-payment,
protest or notice of protest, demand for payment and any demand or
notice in connection with any Card Sale, or this Agreement, and
consents to all extensions or compromises given any Cardholder and
the Merchant agrees that such does not affect any liability of the
Merchant hereunder; and
(e) not license or purport to license any sub-merchants or
sub-licensees with respect to the services provided by FEC
hereunder.
12.2 FEC and the Merchant each acknowledge that they may acquire information
about the business, operations, customers and financial condition of the
other and the Bank and that this information and the terms of this
Agreement are confidential ("Confidential Information"). FEC and the
Merchant each agree that they shall not disclose Confidential Information
about the other party or the customers of the other party to any third
party without obtaining prior written consent. Confidential Information
does not include information in the public domain or otherwise publicly
disseminated. Confidential Information may be disclosed by the Bank or
FEC concerning the Merchant pursuant to the request or requirement of the
Card Associations, any governmental agency, applicable Stock Exchange,
Securities Commission or similar statutory or regulatory authority,
pursuant to a court or administrative subpoena, order or other such legal
process or requirement of law, or in defence of any claims or causes of
action asserted against it.
13. Charge Back
13.1 In the event of a Charge Back or other financial adjustment to a Merchant
Account, then FEC or the Bank will so notify the Merchant and permit the
Merchant an opportunity to satisfy or otherwise provide security for such
Charge Back or financial adjustment within five (5) banking days of
Merchant's receipt of such notice. If the Merchant fails to satisfy or
otherwise provide security for such Charge Back or financial adjustment
within the allotted time, then the Bank on behalf of FEC may debit any
reserve accounts maintained with the Bank on behalf of the Merchant.
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14. Termination - Term of Agreement
14.1 This Agreement shall become effective when signed by both parties and
shall remain in full force and effect for seven years unless until
terminated pursuant to the provisions of this Article.
14.2 The Merchant may at any time, upon 60 days written notice to FEC
terminate this Agreement without cause provided that the Merchant pays to
FEC US$500,000 to purchase the hardware and software from FEC, such
hardware and software which was purchased and/or developed by FEC for the
Merchant and which is necessary for the Merchant to provide Card
processing or Electronic Xxxx Payment or Electronic Xxxx Presentment
services.
14.3 Without prejudice to any other rights or remedies it may have (whether
under this Agreement or at law), either party may terminate this
Agreement immediately by serving written notice on the other party if:
(a) the other party commits a breach of any material obligation under
this Agreement and, in the case of a remediable breach, fails to
remedy the breach after receiving 30 days written notice to do so;
or
(b) the other party becomes Insolvent
14.4 In Clause 14.3, "Insolvent" means the appointment of, or the application
to a court for the appointment of, a liquidator, provisional liquidator,
receiver or manager to either party, the entering into a scheme of
arrangement or composition with or for the benefits of either party's
creditors generally, any re-organisation, moratorium or other
administration involving the creditors or any class of the creditors of
either party, a resolution or proposed resolution to wind up either
party, or either party becoming unable to pay its debts, or being deemed
to have become unable to pay its debts, as and when they fall due.
14.5 This Agreement shall automatically terminate in the event that FEC's
Master Merchant Agreement with the Bank expires without being immediately
renewed or is terminated for any reason. In addition, FEC may terminate
this Agreement without notice if it comes to the attention of FEC that
the Merchant is engaging in any money laundering activities or any other
illegal activities or the sale of Restricted Services.
14.6 Termination of this Agreement shall not relieve either party of any
liability either arising prior to termination or for breach of this
Agreement or as may otherwise be established.
15. Force Majeure
15.1 Neither party shall be in breach of this Agreement or liable to the other
with respect to any complete or partial failure performance by its duties
or obligations under this Agreement occasion by any act of God, fire,
active government or state, war, civil commotion, insurrection, embargo,
or other cause beyond the control of either party. For greater certainty,
the provisions of this clause shall apply to FEC and FEC shall
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have no responsibility with respect to or arising out of any disruption
of its processing services (save where such disruption arises solely as a
result of the gross negligence or wilful misconduct of FEC). If either
party is unable to perform its duties and obligations under this
Agreement as a direct result of the effect of one or more of any such
causes the operation of this Agreement shall be suspended during the
period (and only during the period) during which such cause continues to
have effect.
16. Terms Relating to Intellectual Property
16.1 Nothing in this Agreement grants either party any rights in or under the
intellectual property (whether trademarks, copyrights, patterns, know-how
or otherwise) of the other party and neither party shall use the
intellectual property of the other party without prior written consent,
such consent to be subject to such terms and conditions as the party
granting such consent may require. No use by one party under this
Agreement of the other's intellectual property shall confer upon the
first party any rights in or under such intellectual property. All rights
connected with or rising out of such use accrue to the owner of the
intellectual property in question.
16.2 Each party agrees that it shall fully indemnify the other party against
all liabilities, costs, charges and expenses (including legal expenses)
arising out of all actions, claims, demands and proceedings brought
against that party (including without limitation claims of infringement
brought by third parties) arising out of or connected its use of the
first party's intellectual property if such use was approved according to
Clause 16.2.
17. General Contract Provisions
17.1 All notices, requests, demands or other communications required or
permitted to be given by one party to another under this Agreement must
be given in writing by personal delivery, or by registered mail, postage
prepaid, addressed to the other party or parties at the address set out
on the first page (and, in the case of FEC, with a copy to be provided to
First Ecommerce Asia Limited, 000, Xxxxxx Xxxxxxxx, 0 Xxxxx'x Xxxx,
Xxxxxxx Xxxx Xxxx) or at such party or parties' other address if changed
by notice given in accordance with this Clause or Clause 17.2. Such
notices, requests, demands or other communications will be deemed to have
been received when delivered if delivered personally (unless the date of
delivery is not a Business Day or is delivered or sent after 5:00 p.m.,
(Bermuda Time) in which case the notice, request, demand or other
communication shall be deemed to have been received on the next following
Business Day) and, if mailed, will be deemed to have received on the
seventh (7th) Business Day after the mailing thereof. During any
interruption in regular postal service, all notices, requests, demands or
other communications must be delivered personally or sent by facsimile
transmission.
17.2 Notwithstanding Clause 17.1, all notices, requests, demands or other
communications required or permitted to be given by one party to another
party under this Agreement may be sent to the receiving party's facsimile
number as notified by such party to the other in accordance with either
clause 17.1 or this clause. Notices, requests, demands or other
communications sent by facsimile transmission will be deemed to have been
received when transmitted (provided that the transmission is confirmed by
the
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transmission report) unless the date of delivery is not a Business Day or
the transmission is sent after 5:00 p.m. (Bermuda Time), in which case
the notice, request, demand or other communication shall be deemed to
have been received on the next Business Day.
17.3 Time is of the essence of this Agreement and of every part hereof.
17.4 This Agreement is governed by and shall be construed in accordance with
the laws of Bermuda.
17.5 This Agreement constitutes the entire Agreement between the parties with
respect to the matters herein and its execution has not been induced by,
nor do any of the parties rely upon or regard as material, any
representations, warranties, conditions, promises, Agreements or
statements whatsoever not incorporated herein and made a part hereof.
17.6 Other than as specifically provided for herein, this Agreement may not be
amended, altered or qualified except by a memorandum in writing signed by
all of the parties.
17.7 If any article, clause or any portion of any section of this Agreement is
determined to be unenforceable or invalid by order, decree or judgement
of any court having jurisdiction, or is or becomes unenforceable or
invalid by virtue of any duly promulgated law, rule or regulation, the
remainder of this Agreement will be construed as if the article, clause
or portion of a section had not been inserted.
17.8 FEC shall have the right, on written notice to the Merchant, to assign
this Agreement or all or any portion of its rights hereunder to a wholly
owned subsidiary of First Xxxx.xxx, Inc. Subject to the foregoing,
neither FEC nor the Merchant shall have the right to assign this
Agreement or its rights hereunder without the prior written consent of
the other party.
17.9 This Agreement is binding upon and shall enure to the benefit of the
parties and their respective successors and permitted assigns.
ACCEPTED AND AGREED TO BY: ACCEPTED AND AGREED TO BY:
FEC LIMITED THE PEOPLES TELEPHONE
COMPANY LIMITED
__________________________________ _________________________________
Authorised Signature Authorised Signature
Name: ____________________________ Name: ___________________________
Title: ___________________________ Title: __________________________
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