TICKET ISSUER AGREEMENT
This Ticket Issuer Agreement ("Agreement") is entered into as of January 21,
2004 ("Effective Date"), by and between Utix Group, Inc., a Delaware
corporation, whose address is 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx
00000 ("Ticket Issuer") and Discover Financial Services, Inc. ("DFS"), a
Delaware Corporation, whose address is 0000 Xxxx Xxxx: Xxxx, Xxxxxxxxxx,
Xxxxxxxx 00000.
RECITALS
A. Ticket Issuer will design, produce, market, and make available Tickets
to various individuals.
B. Ticket Issuer may offer Tickets, directly or through Clients, to
consumers for sale via websites and through other distribution channels,
as approved by DFS.
C. DFS operates a Network that will allow Ticketholders to purchase an
experience from participating Merchants using Tickets issued by Ticket
Issuer.
D. Merchants will comply with Network Operating Regulations and will
Authorize and Settle according to their contracts.
E. Purchase value or sales are based on the amounts allocated to the
Ticket, pursuant to the following terms governing the creation and use
of these Tickets.
F. Ticketholders shall be able to use the Tickets to purchase an Experience
at Merchants honoring Discover Cards. Ticketholders shall not have the
ability to make cash withdrawals.
1.0 DEFINITIONS
The following definitions apply to the terms outlined within this Agreement and
shall have the following meanings:
a. ACCOUNT NUMBER means the unique 16-digit number assigned by Ticket
Issuer to a Ticket, as derived from the BIN.
b. AGENT means a Person approved and/or certified by DFS that will perform
specified functions on behalf of Ticket Issuer.
c. AGREEMENT means this "Ticket Issuer Agreement" between the Ticket Issuer
and DFS and shall include any attachments, appendices, schedules,
addenda, and amendments thereto.
d AUTHORIZATION OR AUTHORIZE means the process whereby Ticket Issuer, by
itself, or through one or more Agents (Including, without limitation,
DFS, in the course of performing stand-in Authorization functions as
described in Section 4.0 of the Operating Regulations), determines
whether to approve or decline a Card Sale.
e. BIN means the range of Account Numbers allocated to Ticket Issuer by
DFS.
f. CLIENT means a Person with whom Ticket Issuer has entered into an
agreement to provide Tickets to certain groups of specified individuals,
retailers or for a particular marketing program.
g. CLIENT PROGRAM means each separate and discrete marketing or other
PROGRAM that Ticket Issuer has agreed to provide in connection with a
Client. As used in this definition, a separate and discrete program is
one that requires DFS to complete more than an inconsequential amount of
additional operations, systems or other work in order to allow the
program to operate on the Network.
h. DISCOVER/NOVUS ACCEPTANCE XXXX means the logo designated in the
Technical Specifications Manual under Graphic Guidelines that indicates
that a Card may be accepted at participating venues.
i. EXPERIENCE means an activity in which a Ticket holder engages that is
provided by a business with which Ticket Issuer has contracted.
j. GOVERNMENTAL REQUIREMENTS means any local, state or federal laws, as
they may be in effect from time to time, that are applicable to the
Program.
k. ISSUER OPERATING REGULATIONS shall mean the operating regulations set
forth as Exhibit A hereto that describe certain of Ticket Issuer's
duties and obligations with which it must comply in order to issue
Tickets that may be used in the Network.
1. MERCHANT means a party who has entered into a Merchant Services
Agreement and/or a Cash Advance Participation Agreement with Discover
Financial Services, Inc., that provides the terms and conditions
governing the acceptance and Settlement of Card Transactions between DFS
and Such Merchant.
m. NETWORK means the Discover/NOVUS Network of Merchants.
n. PERSON means any individual human being, or any individual created at
law, including without limitation, a partnership, limited liability
company, government agency or corporation.
o. PROCESSOR means a certified processor of Card and Ticket Transactions on
the Discover/NOVUS Network, including, without limitation,
Authorizations and the appropriate response to be sent to the Merchant.
p. PROGRAM means the plan, described in this Agreement and the Operating
Regulations, pursuant to which Ticket Issuer shall; (i) issue Tickets to
Ticketholders; and (ii) use the services offered by Discover Financial
Services, Inc. to facilitate the Authorization and Settlement of Card
Transactions.
q. RESERVE ACCOUNT shall have the meaning given that term in Section
2.2.f.
r. RESERVE ACCOUNT AGREEMENT means the agreement entered into between
Ticket Issuer, DFS and Xxxxxx Xxxxxxx, which the Reserve Account will be
established with respect to the terms of the Reserve Account.
x. XXXXXX means the act of making a Settlement payment.
t. SETTLEMENT means respectively, (i) for DFS, amounts DFS is required to
pay Merchants for Ticket Transactions, and (ii) for Ticket Issuer, an
amount payable by Ticket Issuer to DFS for Ticket Transactions, as more
fully described in this Agreement and Section 7.0 of the Operating
Regulations.
u. START-UP DATE means the date on which both the Processor and the Network
are ready to and capable of accepting and processing transactions
bearing the BIN numbers assigned to Ticket Issuer.
v. STORED VALUE ACCOUNT shall have the meaning given to that term in
Section 2.2.f.
w. Technical Specifications Manual means the document incorporated by
reference into this Agreement as Exhibit B that contains technical
specifications applicable to the Program.
x. TICKET means either a stored-value (i) plastic card displaying the
Discover/NOVUS Acceptance Xxxx, or (ii) Card Account (e.g., a virtual
card) that may be used for purchases in situations in which the
Cardholder is not physically present at a Merchant's retail location.
Tickets must be produced by an authorized production facility, and must
comply with the specifications of the Technical Specifications Manual.
y. TICKET SALE means a Card Transaction by a Cardholder that is the
purchase of goods or services.
z. TICKETHOLDER means an adult (i.e., person at least 18 years of age) who
has purchased a Ticket issued by Ticket Issuer, or any person who is
designated by the Ticketholder as an authorized user of a Ticket.
aa. TICKET TRANSACTION means a transaction involving a Ticket, including.
without limitation, any of the following, a Ticket Sale, a Credit,
return, a Chargeback, or an Adjustment, as such terms are defined herein
or in the Issuer Operating Regulations.
2.0 PROVISION OF SERVICES
2.1 RESPONSIBILITIES OF DFS.
2.1.a DFS shall provide Ticketholders with point of sale access to Merchants
pursuant to current contractual arrangements with such Merchants. DFS
does not guaranty that all Merchants will accept Tickets, or that
Merchants will accept all Ticket Transactions. In order to be used in
the Network, Tickets must have the capability to communicate with a
Processor for its Authorization and Settlement services.
2.1.b For each Ticket Sale, DFS will be responsible for Settlement of the
amount of such Ticket Sale to the Merchant pursuant to the terms of DFS'
Merchant Services Agreement with the Merchant.
2.1.c DFS will submit to Ticket Issuer or Ticket Issuer's Agent a Settlement
transmittal file (in the form and format specified in the Technical
Specifications Manual) in order for Ticket Issuer to pay DFS for Ticket
Transactions.
2.1.d DFS grants Ticket Issuer a non-exclusive, non-transferable license to
use Account Numbers that DFS assigns to it for the Program under this
Agreement. DFS will assign a unique BIN for Ticket Issuer's Program, and
the numbers in the assigned BIN shall be used only for Tickets issued
under this Agreement. The initial BIN assigned by DFS to Ticket Issuer
shall be sufficient to accommodate the cumulative number of account
numbers set forth in Schedule 7.1 (pricing and fees) to this Agreement.
DFS will release to Ticket Issuer subsets of the numbers in the BIN as
needed to accommodate the scope of Client Programs about which Ticket
Issuer has advised DFS pursuant to the terms of THIS AGREEMENT. Once the
INITIAL BIN assignment is EXHAUSTED, AN ADDITIONAL ALLOCATION MAY BE
GRANTED TO TICKET ISSUER AT THE DISCRETION OF DFS.
2.1.e DFS will provide Ticket Issuer with a copy of Technical Specifications
Manual that contains the graphic specifications for the display of the
Discover/NOVUS Acceptance Xxxx and usage of such xxxx on the Ticket.
Ticket Issuer will submit to DFS for review copies of all art,
packaging, and advertising and marketing materials related to Tickets
that incorporate the Discover/NOVUS Acceptance Xxxx or any other
references to DFS, and DFS will review all such art, packaging, and
advertising and marketing materials provided by Ticket Issuer within ten
(10) Business Days of receipt, provided that DFS must receive from
Ticket Issuer and approve all art, packaging, and advertising and
marketing materials prior to Ticket Issuer using such materials for any
Tickets.
2.1.f DFS will certify a Processor that is able to provide processing to
issuers within the Network. Only certified Processors may process
transactions on the Discover/NOVUS Network.
2.1.g DFS will provide Ticket Issuer with information, in the form of DFS
invoice reports, with respect to the transaction fees, license fees, and
revenue share accrued and owed to DFS by Ticket Issuer for each month by
the twentieth (20th) day of the next succeeding month.
2.1.h DFS will provide notification and documentation to Merchants regarding
disputes, ticket retrieval and Chargeback requests. Ticket Issuer may
not contact Merchants with respect to DFS issue, such as any disputes
relating to DFS, ticket retrievals relating to DFS or Chargeback
relating to DFS.
2.1.i DFS will administer the dispute process, determine the application of
Chargeback, and provide the Ticket Issuer notification of the resolution
disputes, in accordance with the Operating Regulations and Technical
Specifications Manual.
2.1.j DFS shall route Ticket Transaction data to the Processor in the manner
specified in the Operating Regulations and Technical Specifications
Manual.
2.11 DFS agrees that it will not attempt to convert any of Ticket Issuer's
Clients to an "Open" environment stored value card program operated by
DFS once Ticket Issuer has entered into an agreement with such Client,
and notified DFS of its relationship with the Client.
2.2. RESPONSIBILITIES OF TICKET ISSUER.
2.2.a Ticket Issuer will issue Tickets within a designated BIN range assigned
by DFS. Ticket Issuer must obtain DFS' prior approval of any Clients
with whom Ticket Issuer desires to create a Client Program, such
approval not to be unreasonably withheld, delayed or conditioned,
subject to the approval guidelines of DFS. Schedule 2.2 (a) sets forth a
list of unacceptable Merchant categories. Ticket Issuer may distribute
Tickets pursuant to the terms of a Client Program, and shall also be
permitted to distribute Tickets directly through its website and retail
locations. Ticket Issuer is responsible for overall creative
development, design and marketing of Tickets, including creative
development of Tickets and related marketing and sales materials. Ticket
Issuer agrees that the design of Tickets must comply with the
specifications outlined in THE TECHNICAL SPECIFICATIONS MANUAL. TICKET
ISSUER MUST PROVIDE all MARKETING MATERIALS AND Ticket designs to DFS
for approval of any portions thereof that make reference to the
Discover/NOVUS Acceptance Xxxx or any other references to DFS prior to
print or distribution.
2.2.13 Tickets issued by Ticket Issuer may not be used at ATMs or for any other
form of cash withdrawal. Tickets may be active when sent to a corporate
client, or may be activated at a retail Client. Tickets may be loaded
with value via the toll-free number or website operated by WildCard.
Ticketholders will be able to obtain status and expiration information
only via IVR and Web. Ticket Issuer remains liable for all sales using
active tickets that have not been purchased and delivered to a corporate
client or retail client.
2.2.c Ticket Issuer agrees to comply with the Operating Regulations and the
Technical Specifications Manual. DFS may change the Operating
Regulations or Technical Specifications Manual from time to time by
sending written notice to Ticket Issuer ninety (90) days in advance.
However, certain changes to the Operating Regulations may become
effective immediately for security reasons. If there is any conflict
between this Agreement and the Operating Regulations or Technical
Specifications Manual, the terms of this Agreement will govern.
2.2.d Ticket Issuer may designate or utilize subcontractors or Agents, as
provided in the Operating Regulations to perform its obligations under
the Agreement, provided that Ticket Issuer has first advised DFS and
received DFS' approval of any such subcontractor or Agent. Any Agent or
third party used or designated by Ticket Issuer to perform services
shall be deemed an Agent of Ticket Issuer for all such purposes and not
DFS' Agent. Ticket Issuer shall be solely responsible for the payment of
such subcontractors or Agents.
22e The Processor will approve or decline Ticket Sales based on the funds
value available for the Ticket or Account being offered for use at a
Merchant, and will respond with appropriate codes as sit forth in the
Technical Specifications Manual. The Ticket Issuer must pay DFS the
amounts identified in the daily Settlement file via Fed wire or any
other payment method approved by DFS to the account and by not later
than the time specified by DFS.
2.2.f Ticket Issuer shall be responsible for obtaining the funds that
represent the stored value of each Ticket that it issues to a Ticket
holder, and Ticket Issuer shall hold such funds in an account at a
reputable financial institution (the "Stored Value Account"). Such
amount may change from tune
to time depending upon the level of value of all activated Tickets.
Ticket Issuer will maintain accurate records of the value balances on
each Ticket. Ticket Issuer will also maintain funds in a reserve account
("Reserve Account") at a Xxxxxx Xxxxxxx institution agreed upon with DFS
in an amount specified in Exhibit A. The Reserve Account must be funded
by not later than three (3) days prior to the date of the first shipment
of Tickets under this Agreement. Ticket Issuer shall not have access to
the Reserve Account, except as permitted pursuant to the terms of the
Reserve Account Agreement, and shall not remove funds from the Stored
Value Account, except through the actions of the Processor or financial
institution holding the Stored Value Account to pay DFS any amounts
Ticket Issuer owes DFS. Ticket Issuer grants DFS a right to offset
amounts from the Reserve Account and Stored Value Account for the
purposes set forth in Section 4 .0 for amounts owed by Ticket Issuer to
DFS.
2.2.g Ticket Issuer will maintain all funds received to establish the value of
Tickets in a segregated account at a Xxxxxx Xxxxxxx financial
institution, and shall hold such funds pending issuance of an
Authorization for an expenditure of such funds and Ticket Issuer's
Settlement obligation to DFS for such funds that have been the subject
of a Ticket Sale. Ticket Issuer will remain responsible for Settlement
to DFS until all amounts have been paid to DFS.
2.2.h Ticket Issuer will be responsible for providing all customer service to
Ticketholders with respect to Tickets. Ticket Issuer shall provide
Ticketholder terms and conditions with each Ticket that is sold or
distributed to a Ticketholder, and such Ticketholder terms and
conditions shall disclose all rules, terms, limitations and conditions
of use of the Ticket to the Ticketholder, including any mandated by
Governmental Requirements. Ticket Issuer shall also provide a toll-free
telephone number and/or INTERNET SITE ACCESS to enable the Ticketholder
to obtain customer service and to complete ORDINARY SERVICE FUNCTIONS
SUCH AS CHECKING TICKET balance, LAST TRANSACTIONS, ETC. IN ALL cases,
Ticket Issuer will insure that it provides an appropriate level of
security for all such inquiries and customer service issues. Ticket
Issuer will provide customer service availability for not less than
fourteen (14) hours per day, and will deliver such customer service
using service standards at least equal to those being provided by others
in the industry.
2.2.1 Ticket Issuer will respond to any Ticketholder inquiries or disputed
transactions in accordance with the procedures specified in the
Operating Regulations and Technical Specifications Manual, and Ticket
Issuer shall adhere to any final DFS' decision with respect to a
resolution of a Ticketholder dispute even though such decision may
require payment of amounts by Ticket Issuer, provided that the required
payment shall not exceed the amount of the disputed transaction.
2.2.j Ticket Issuer will electronically submit a Client Program Plan
Description in the form of Schedule 2.2 (j) for each Client Program that
will use the BIN assigned to Ticket Issuer
2.2.k Ticket Issuer agrees that from the Effective Date until the earliest to
occur of (a) January 22, 2006, (b) the termination date of this
Agreement or (c) the date on which DFS fails to remain current in all of
its payments obligations, subject to any cure provisions contained in
this Agreement, to Ticket Issuer under this Agreement, including without
limitation DFS' payment obligations to Ticket Issuer under Section 2.4
below, Ticket Issuer will work exclusively with DFS, and not with any
other bank, financial institution or card or ticket processor or issuer,
with respect to Tickets that may be used for an Experience; it being
agreed that for purposes of this Section 2.2.k, "Tickets" excludes
tickets lacking electronically or magnetically stored values (informally
known as "manual tickets").
2.2.1 Ticket Issuer shall HAVE ENTERED INTO AGREEMENTS WITH businesses that
are Discover Card Merchants to participate in its Tickets for
Experiences program.
2.3 TICKET ISSUER USE OF A PROCESSOR
2.3.a If Ticket Issuer elects to utilize the services of a Processor, Ticket
Issuer must designate the Processor where indicated on Exhibit A, and
the Processor must be approved by DFS, enter into an agreement with DFS
and must be tested and certified that it complies with the applicable
provisions of the Operating Regulations and the Technical Specifications
Manual.
2.3.b Ticket Issuer may elect to have a Processor perform additional services
such as, Ticket personalization/production, IVR support (with not more
than an eight second response time), call center support (at least 14
hours per day), and web development, and the like. The specific services
to be provided by the Processor must be set forth where designated on
Exhibit A.
2.4 Obligations of DFS to Arrange Ticket Purchases
2.4.a During the first year that this Agreement is in effect DFS agrees to
arrange the purchase by DFS or its Affiliates of at least $200,000
(based on ticket retail value) of Tickets. During the second year that
this Agreement is IN EFFECT, DFS AGREES TO ARRANGE THE PURCHASE BY DFS
OR ITS AFFILIATES of at least $300,000 (based on ticket retail value) of
Tickets. The Tickets shall be sold to DFS for $40 for golf ($49.95
retail) and $60 ($69.95 retail) for spa. DFS's obligation in this
Section 2.4 (a) shall only continue for so long that Ticket Issuer is
not in default hereunder, subject to any cure provisions contained in
this Agreement, remains in business and continues to sell tickets.
3.0 WARRANTIES
3.1. Ticket Issuer warrants to DFS that:
3.1.a It is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware, and has its principal
office in the Commonwealth of Massachusetts;
3.1.b It has the corporate and legal authority and power to enter into this
Agreement and to perform its obligations under the Program as outlined
in this Agreement:
3.1.c That all financial statements of Ticket Issuer furnished to DFS are
accurate in all material respects and fairly represent, in a11 material
respects, the financial condition of Ticket Issuer, including contingent
liabilities of every type, which financial condition has not changed
materially or adversely as of the date of this employment:
3.1.d To the knowledge of the officers of Ticket Issuer, it owns, has
licensed. or otherwise has the right to use any trademarks, service
marks, patents or other intellectual property that are necessary for it
to use in order to operate the Program and any Client Program, and, to
the knowledge of the officers of Ticket Issuer, any such use will not
infringe upon the rights of any third party;
3.1.e It operates its business in a safe and sound manner, and adheres to all
applicable Governmental Requirements.
3.1.f It is not the subject of any litigation, infringement, or enforcement
action by any Person or governmental body, which, if determined
adversely to Ticket Issuer, would have a material adverse effect on the
business, financial condition or operations of Ticket Issuer; and
3.1.g It has obtained all material licenses; consents or permissions needed
from any applicable governing authority to perform its duties set forth
in this Agreement.
3.1.h EXCEPT FOR WARRANTIES EXPRESSLY MADE IN THIS AGREEMENT, TICKET ISSUER
MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED. TO DFS OR TO
ANY OTHER PERSON, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES
REGARDING THE MERCHANTABILITY, SUITABILITY, ORIGINALITY, QUALITY,
FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT OR OTHERWISE
(IRRESPECTIVE OF ANY PREVIOUS COURSE OF DEALINGS BETWEEN THE PARTIES OR
CUSTOM OR USAGE OF TRADE), OR RESULTS TO BE DERIVED FROM THE USE OF ANY
SOFTWARE, SERVICES, HARDWARE OR OTHER MATERIALS PROVIDED UNDER THIS
AGREEMENT.
3.2 DFS warrants to Ticket Issuer that:
3.2.a It is a corporation duly organized and validly existing under the laws
of Delaware, and has its principal office in the State of Illinois;
3.2.b It has the corporate and legal authority and power to enter into this
Agreement and perform its obligations under the Program as outlined in
this Agreement and the Operating Regulations;
3.2.c To the knowledge of the officers of DFS, it owns or has the right to
use, and to authorize the limited use by of, the trademarks, service
marks or other intellectual property that is necessary for it and the
Ticket Issuer to use in order to operate the Program; and
3.2.d It operates its business in a safe and sound manner, and adheres to all
applicable Governmental Requirements.
4.0 TERM AND TERMINATION
4.1 This Agreement shall commence on the Effective Date and shall remain in
force for a period of two (2) years thereafter ("Initial Term"). After
the Initial Term, this Agreement shall automatically renew for
subsequent terms of one year each (each a "Subsequent Term") unless
earlier terminated by one of the parties as set forth below.
4.2 This Agreement may be terminated:
4.2.a By either party, immediately upon notice to the other party in the event
that the other party shall be wound up or dissolved; become insolvent;
suffer a material, adverse change in its financial condition, or
repeatedly fail to pay its debts as they come due: make an assignment
for the benefit of creditors; file a voluntary petition in bankruptcy or
for reorganization or be adjudicated as bankrupt or insolvent; or have a
liquidator or trustee appointed over its affairs and such appointment
shall not have been terminated and discharged within thirty (30) days;
or
4.2.b By DFS upon two (2) business days' notice to Ticket Issuer in any case
where Ticket Issuer is not maintaining the agreed upon amount in the
Reserve Account or Stored Value Account, or Ticket Issuer has failed to
pay Settlement when due (unless with respect to the initial time this
event occurs, but not for any subsequent occurrence, in first case,
within the two (2) business day notice period, Ticket Issuer deposits
sufficient funds in the Reserve Account or Stored Value Account to
achieve the agreed upon amount, or in second case, within the two (2)
business day notice period, Ticket Issuer fully pays Settlement); or
4.2.c By either party upon thirty (30) days' prior written notice to the other
party in the event of any material breach of this Agreement by such
other party; provided, however, that, if, the defaulting party has
promptly commenced to cure the default and if after the defaulting
party's reasonable efforts such default could not be cured within such
30-day period, the defaulting party may make a request to the
non-defaulting party by the end of such 30-day period that the time to
cure a default be extended, and if the non-defaulting party agrees, such
agreement not to be unreasonably withheld, delayed or conditioned, the
time to cure such default shall be extended up to 60 additional days
from the end of such 30-day period, provided that the defaulting party
continues to use its reasonable efforts to cure such default during the
extended period; or
4.2.d By either party, upon written notice provided not less than six (6)
months prior to the expiration of the Initial Term or of any Subsequent
Term.
4.2.e If either party reasonably concludes that this Agreement cannot be
performed without violating applicable Governmental Requirements, or if
the application of such Governmental Requirements impose material,
additional and reasonably unavoidable costs to be incurred by TICKET
ISSUER, the parties will negotiate IN GOOD FAITH TO MODIFY THIS
AGREEMENT TO THE EXTENT NECESSARY TO ensure that the parties will be in
full compliance with all applicable laws and regulations. If the parties
cannot agree to any required changes, either party may, by giving
written notice to the other party, terminate this Agreement as of a date
specified in such notice. IN ADDITION, IF ANY governmental authority or
third party initiates any action asserting that actions by PARTIES UNDER
this Agreement violates any laws or regulations, either party may, by
GIVING WRITTEN NOTICE, terminate this Agreement as of a date specified
in such notice.
4.3 Upon termination of this Agreement, DFS may offset funds from the
Reserve Account or Stored Value Account to pay for any amounts that are
owed to DFS by Ticket Issuer, and may continue to offset from the
Reserve Account or Stored Value Account for any amounts owed to it for
the period that extends until 90 days after the expiration date of the
last Ticket issued by Ticket Issuer (provided, however, upon termination
of this Agreement, if permitted under its agreement with Ticketholders,
Ticket Issuer may terminate all Tickets issued by Ticket Issuer upon 60
days notice to the Ticketholders). Upon payment to DFS of all amounts
owed to it, DFS will immediately release any remaining amounts held in
the Reserve Account and will immediately instruct the bank or Processor
to release any remaining value in the Stored Value Account. DFS will
provide Ticket Issuer with an accounting of any amounts withdrawn front
the Reserve Account.
4.4 Upon termination or suspension of this Agreement, Ticket Issuer will
immediately cease to issue or sell additional Tickets. Ticket Issuer
will continue to perform its appropriate functions for closing out the
existing value on all Tickets for 90 days after the expiration date of
the last Ticket issued by Ticket Issuer, or termination of all Tickets
outstanding, whichever is earlier.
4.5 If Ticket Issuer fails to pay any Settlement amount when due, or does
not maintain agreed upon balances in the Reserve Account or Stored Value
Account, in addition to DFS' rights set forth in Section 4.2.b, DFS may
immediately suspend this Agreement and may notify Ticket Issuer to
suspend issuance or activation of additional Tickets. In such event,
after DFS has provided notice to Ticket Issuer, Ticket Issuer shall make
an immediate transfer by Fed wire of the funds owed DFS or of the
shortfall of funds into the Reserve Account or Stored Value Account.
Provided that DFS has complied with Section 7.1.C of the Ticket Issuer
Operating Regulations, for each day
that Ticket Issuer fails to pay Settlement in full to DFS, Ticket Issuer
shall pay as liquidated damages to DFS an amount equal to 10% of the
amount that Ticket Issuer has failed to pay, up to a maximum often (10)
days. If Ticket Issuer has failed to pay DFS all amounts owed to it by
the tenth day after Ticket Issuer has received notice of its failure to
pay- DFS, the Agreement shall be terminated in accordance with Section
4.2.b.
5.0 CONFIDENTIALITY
5.1. In the course of fulfilling their respective duties under this
Agreement, DFS and Ticket Issuer may each disclose or communicate to the
other party information and data that it deems as confidential or
proprietary to it ("Confidential Information"). The term "Confidential
Information" shall include, without limitation, all information and
materials pertaining to the Network, Merchants, Discover Card
Cardmembers. Client. Cardholders, technology, trade secrets, "know-how,"
products, facilities, processes, operations, suppliers, marketing
objectives and plans, pricing AND OTHER INFORMATION PERTAINING TO THE
business affairs of DFS AND Ticket Issuer and their respective
affiliates and subsidiaries. The term "Confidential Information" also
includes the existence of and the terms of this Agreement and each of
the Exhibits, Schedules and Appendices that are a part thereof and any
material that is clearly designated by DFS OR TICKET Issuer as
"Confidential." The term "Confidential Information" shall include
information or data that is in oral, written or other visual form, or
recorded on tape, electronic or other media. The term "Confidential
Information" shall exclude (a) information in the public domain or
information that becomes available to the general public without
restriction through no wrongful act or omission of the receiving party,
(b) information received from a third party having a right to transfer
such information, (c) information that is independently developed by the
receiving party without reference to Confidential Information of the
other party; or (d) information that is known by the receiving party or
its affiliates or subsidiaries prior to disclosure by the disclosing
party. Confidential Information disclosed by DFS shall be known as "DFS
Confidential Information" and Confidential Information owned by Ticket
Issuer shall be known as "Ticket Issuer Confidential Information."
5.2. Ticket Issuer agrees that DFS Confidential Information shall be used by
Ticket Issuer only to perform its obligations under this Agreement. DFS
Confidential Information received by Ticket Issuer shall be kept
confidential and shall not be disclosed, directly), or indirectly, to
any third party unless DFS consents in writing to such disclosure, and
then only upon the prior execution of a confidentiality agreement
containing terms substantially similar to those in this Section 5.0 by
the third party to whom Ticket Issuer desires to disclose such
information. Ticket Issuer further acknowledges that the information
contained in Appendix A to Schedule 7.1 is highly confidential and may
be disseminated only to Ticket Issuer's Chief Executive Officer and
Chief Financial Officer.
5.3 DFS agrees that Ticket Issuer Confidential Information shall be used by
DFS only to perform its Obligations under this Agreement. Ticket Issuer
Confidential Information received by DFS shall be kept confidential and
shall not be disclosed, directly or indirectly, to any third party
unless Ticket Issuer consents in writing to such disclosure, and then
only upon the prior execution of a confidentiality agreement containing
terms substantially similar to those in this Section 5.0 by the third
party to whom DFS desires to disclose such information. DFS further
agrees not to use Client or Cardholder information or lists obtained
pursuant to this Agreement to attempt to solicit Clients for a product
that is similar to that being offered by Ticket Issuer under the
Program, or to solicit Cardholders for direct sales of DFS' own gift
card products. Notwithstanding the previous language, nothing herein is
intended, or shall be deemed, to limit or prohibit DFS from maintaining
in any way its usual and ordinary relationships with Merchants and
Discover Card
Cardholders or to offer Merchants or Discover Card Cardmembers the
ability to purchase any product or service, including gift or cash cards
offered by DFS or other parties.
5.4. Notwithstanding the above restrictions, DFS or Ticket Issuer may
disclose Confidential Information if either DFS or Ticket Issuer
receives a subpoena or order of a court or an agency or government
authority of competent jurisdiction which is binding on the receiving
party, and which compels the disclosure of Confidential Information,
provided that to the extent permitted by law, the receiving party will
immediately notify the disclosing party of the receipt of a subpoena or
order so as to permit the disclosing party to contest any such subpoena
or order. To the extent required by law or specific circumstances,
either party may disclose this Agreement to its regulators, examiners,
auditors, directors and counsel; (b) to proposed investors and financing
sources, excluding any that are Competitors, and their advisors, unless
the other party hereto has agreed in writing to such disclosure, or in
connection with a merger or acquisition or proposed merger or
acquisition, or the like; provided such parties are advised in writing
of the obligations of confidentiality required by this Agreement and
agree to be bound by them. DFS acknowledges that this Agreement may be
sufficiently material to Ticket Issuer so as to require disclosure in
SEC filings as part of Ticket Issuer's public company reporting
obligations, and Ticket Issuer will inform DFS of this requirement and
will seek DFS' approval of the language of such disclosure.
5.5. The provisions of this Section 5.0 shall survive termination of this
Agreement.
6.0 RESPONSIBILITIES AND INDEMNIFICATION
6.1 DFS shall indemnify and hold Ticket Issuer, its affiliates, subsidiaries
and their respective officers, directors, employees and representatives
harmless from any and all claims made or threatened by any third party
and all related losses, damages, claims, settlements and liabilities,
including without limitation, any outside attorneys' fees and court
costs reasonably incurred by an indemnified party (excluding indirect,
consequential, punitive, special or exemplary damages) arising as a
result of or in connection with the following:
6.l.a Any intentionally wrongful or negligent act or omission of DFS, its
affiliates or subsidiaries, and their respective officers, directors,
employees, agents or third party service providers thereof in connection
with the performance of the duties and obligations of DFS under this
Agreement;
6.l.b Any failure by DFS to comply with any term of this Agreement, or any
breach of any warranty or representation made by DFS in this Agreement;
and
6.1.c Any failure by DFS to comply with its obligations under any and all
laws, rules and regulations applicable to DFS' obligations under this
Agreement.
6.2 Ticket Issuer shall indemnify and hold DFS, its affiliates, subsidiaries
and their respective officers, directors, employees and representatives
harmless from any and all claims made of threatened by any third party
and all related losses, damages, claims, settlements and liabilities.
including without limitation, any outside attorneys' fees and court
costs reasonably incurred by an indemnified party (excluding indirect,
consequential, punitive, special or exemplary damages) arising as a
result of or in connection with the following:
6.2.a Any intentionally wrongful or negligent act or omission of Ticket
Issuer, its affiliates or subsidiaries, and their respective officers,
directors, employees, agents or third party service
providers thereof in connection with the performance of the duties and
obligations of Ticket Issuer under this Agreement;
6.2.b Any failure by Ticket Issuer to comply with any term of this Agreement,
or any breach of any warranty or representation made by Ticket Issuer in
this Agreement, and
6.2.c Any failure by Ticket Issuer to comply with its obligations under any
and all laws, rules and regulations applicable to Ticket Issuer's
obligations under this Agreement.
6.3 Additionally, each party indemnifies and holds the other harmless from
any loss, damages, claims, liabilities or expenses (including reasonable
attorney's fees) to which they may be subject arising out of the
interface of their respective systems as it may relate to this Agreement
or the services to be provided hereunder.
6.4 If either party desires to obtain indemnity from the other party
hereunder, it shall notify the other party, as soon as practicable, of
the claims) to be indemnified against and shall permit the other party
to assume and maintain the defense thereof with counsel selected by the
indemnifying party. The indemnified party agrees to provide any
reasonable assistance requested by the indemnifying party in order to
defend an indemnified claim.
6.5 The provisions of this Section 6.0 shall survive termination of this
Agreement.
7.0 FINANCIAL REQUIREMENTS
7.1 DFS shall prepare and send to Ticket Issuer an invoice each month for
all amounts of fees and other charges due by Ticket Issuer or DFS under
this Agreement, as calculated pursuant to the Pricing and Fee Schedule
attached hereto as Schedule 7.1. Ticket Issuer or DFS agrees to pay all
undisputed charges set forth on the invoice in full within thirty (30)
days of the date of the invoice, unless otherwise provided in Schedule
7.1
7.2 If Ticket Issuer disputes any amounts on any invoice and such dispute
cannot be resolved promptly through good faith discussions between the
parties, Ticket Issuer shall pay the amounts due under this Agreement
less the disputed amount, and the parties shall diligently proceed to
resolve such disputed amount. An amount will be considered disputed in
good faith if (i) Ticket Issuer delivers a written statement to DFS,
(ii) such written statement represents that the amount in dispute has
been determined after due investigation of the facts and that such
disputed amount has been determined in good faith, and (iii) all other
amounts due from Ticket Issuer that are not in dispute have been paid in
accordance with the terms of this Agreement.
7.3 Ticket Issuer will maintain a Reserve Account as set forth in Section
2.2.f. Interest earned from the Reserve Account will be paid to Ticket
Issuer quarterly.
7.4 Ticket Issuer will maintain the specified amount of funds in the Stored
Value Account in accordance with the formula set forth in Exhibit A and
(ticket Issuer's Processor shall use such funds to pay Settlement to DFS
for all Ticket Transactions. Ticket Issuer shall not have direct access
to the Stored Value Account. Only the Processor or the financial
institution may remove funds in the Stored Value Account to pay amounts
owed to DFS or to return to Ticket Issuer amounts in excess of the
balance required in Exhibit A. Ticket Issuer shall cause Processor to
provide to DFS with a daily report showing the total number of Tickets
activated and the total dollar amount of value having been activated for
use on the issued Tickets. DFS will monitor and review the Stored Value
Account on a daily basis to determine Ticket Issuer's compliance with
the requirements of this Agreement. DFS will consider moving to a
quarterly review of the Stored Value Account upon demonstration by
Ticket Issuer of six months of maintaining required balances in the
Stored Value Account.
7.5 Ticket Issuer and DFS will keep true and accurate books of accounts and
records concerning this Agreement and all Program requirements in
accordance with sound accounting practices, employing standards,
procedures and forms in conformity with generally accepted accounting
principles in the United States. Ticket Issuer will provide periodic
reports to DFS regarding the number of Card Accounts, the dollar amount
of outstanding balances on Tickets and Ticket accounts, and such other
information that DFS may reasonably request from time to time.
7.6 Ticket Issuer and DFS agree to arrange a mutually acceptable time to
review financial arrangements. financial stability, and Program results.
7.7 Ticket Issuer will immediately provide DFS with any information
regarding fraudulent activity with respect to Ticket Transactions,
distribution, delivery/storage or any fraudulent activity that could
jeopardize the integrity of the Network, the Discover brand or the
Discover/NOVUS Acceptance Xxxx image. Each situation will be discussed
and appropriate resolution or modifications will be determined.
Resolution may result in changes impacting current procedures and will
be discussed to determine mutually agreeable timeframe for
implementation. DFS will immediately provide Ticket Issuer with any
information regarding fraudulent activity with respect to Picket
Transactions, distribution, delivery/storage or any fraudulent activity
that could reasonably be expected to jeopardize Ticket Issuer's business
or operations of which DFS becomes aware.
7.8 Ticket Issuer may assess fees and other charges when it collects funds
from Clients or Ticketholders for the issuance or sage of the ticket.
These fees and other charges must be charged and collected in accordance
with applicable federal and state regulations, and must be disclosed to
Ticketholders prior to sale, activation or initial use of the Tickets.
7.9 Ticket Issuer will be responsible for paying the amount of any Ticket
Sale for which a Merchant has properly utilized Authorization
procedures, including downtime and stand-in procedures outlined in
Section 4 of the DFS Merchant Operating Regulations, or as further
defined in the Merchant Services Agreement between DFS and the Merchant.
However, if the amount of a Ticket Sale properly processed by the
Merchant is greater than the available balance on the Card, Ticket
Issuer will pay one-half of the difference between the amount of the
Card Sale and the amount of the value remaining of the Ticket. If the
Ticket Sale is not properly Authorized, the Ticket Issuer may request a
chargeback to the Merchant using procedures outlined in the Ticket
Issuer Operating Regulations.
8.0 INTELLECTUAL PROPERTY OWNERSHIP
8.1 Each of the parties will retain all rights of ownership in the
respective property that they own as of the date of this agreement or
developed by that party or its agents thereafter including, without
limitation, patent rights, licenses, copyrights, service marks and
trademarks in the software and systems each party operates as of the
date of this Agreement, or that it develops or has developed for the
purposes or administering the Program, providing services, or otherwise.
8.2 DFS shall continue to own all rights with respect to anything related to
the Network, the Merchants and Discover Card Cardmembers, including,
without limitation, all data and information related thereto or derived
there from.
8.3 Ticket Issuer will own all Client information and lists and Ticketholder
information and lists that it develops specifically for the purposes of
this Program.
9.0 LIMITED AUTHORIZATION FOR DISCOVER/NOVUS ACCEPTANCE XXXX USAGE.
9.1 DFS grants Ticket Issuer the non-exclusive right to use the
Discover/NOVUS Acceptance Xxxx for the limited purpose only of placing
such Xxxx on Cards/Tickets to indicate that Cards/Tickets may be used
within the Network. Ticket Issuer must follow the guidelines for use of
the Discover/NOVUS Acceptance Xxxx set forth in the Operating
Regulations and the Technical Specifications Manual. Ticket Issuer shall
not use the Discover/NOVUS Acceptance Xxxx, any registered trademarks,
logos or name of DFS or any DFS affiliate company, or any other
proprietary designations of DFS on any materials without first
submitting all such materials to DFS and obtaining DFS' prior written
consent.
10.0 GENERAL
10.1 Neither party may assign this Agreement without the express written
consent of the other party.
10.2 This Agreement may not be amended, modified or changed in any way except
by a written instrument executed by an authorized representative of each
party.
10.3 The parties to this Agreement shall be deemed to be independent
contractors. Nothing in this Agreement shall be construed as making the
parties agents, employees, joint ventures, or partners.
10.4 Ticket Issuer and DFS will each comply in all material respects with all
Governmental Requirements that apply, respectively, to each of them for
all applicable jurisdictions in which the Program will operate.
10.5 Neither party hereto shall be held responsible for any delay or failure
in performance hereunder caused in whole or in part by fire, strike,
flood, embargo, labor dispute, act of sabotage, riot, accident, delay of
carrier or supplier, voluntary or mandatory compliance with any
governmental act, regulation or request, act of God or by public enemy,
or any third party act or omission or other cause beyond such party's
control. If any such contingency shall occur, this Agreement shall be
deemed extended by the length of time such contingency continues. The
parties shall use their best reasonable efforts to minimize the
consequences of a force majeure event.
10.6 If any provision of this Agreement is held to be illegal, unenforceable
or invalid, no other provision of this Agreement shall be affected
thereby, and the remaining provisions of this Agreement shall be
construed and reformed and shall continue with the same effect as if
such illegal, unenforceable or invalid provision was not a part hereof.
10.7 Any waiver (express or implied) by either party of any default or breach
of this Agreement shall not constitute a waiver of any other or
Subsequent default or breach.
10.8 The headings and captions contained in this Agreement shall not be
considered to be a part hereof for purposes of interpreting or applying
this Agreement, but arc for convenience only.
10.9 This Agreement may be executed in counterparts, each of which will be
deemed an original and both of which together will constitute one
instrument.
10.10 In the event of any conflict or inconsistency between the terms of this
Agreement and those of the Operating Regulations or Technical
Specifications Manual, the terms of this Agreement shall govern.
10.11 This Agreement shall be governed by and construed in accordance with the
laws of the State of Illinois, excluding its choice of law principles.
The parties shall make all reasonable attempts to amicably resolve any
disagreements arising out of this Agreement or from a breach thereof
("Disputes"). All Disputes that the parties are unable to amicably
resolve shall be resolved exclusively in the Federal or State Courts
located in Boston, Massachusetts, if initiated by Ticket Issuer, or in
Chicago, Illinois, if initiated by DFS. Each party hereby consents to
personal jurisdiction in the foregoing courts.
10.12 Either party may request an audit of the records of the other party that
pertain to performance of the other party's duties under this Agreement,
provided that (i) only one audit of a party shall be permitted during
any year of this Agreement, (ii) the requesting party must provide not
less than 30 days prior notice of the requested audit, (iii) the audit
may only be performed during normal business hours and may not disrupt
the ordinary operations of the party being audited, (iv) the audit must
be performed by an independent third party that executes a
confidentiality agreement with terms substantially similar to the terms
contained in Section 5.0 hereof, (v) the cost of the audit shall be
borne by the party requesting the audit.
10.13 All notices required or provided for in this Agreement shall be in
writing and delivered by hand or by overnight courier, or sent first
class mail and notices shall be addressed as follows:
If to DFS:
Discover Financial Services, Inc.
000 Xxxx-Xxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xxx Xxxxxx, RW2 3A
Copy to:
Discover Financial Services, Inc.
0000 Xxxx-Xxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: General Counsel
If to Ticket Issuer:
Utix Group, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
Copy to:
Xxxxx Xxxxxx LLP
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
10.14 IN NO EVENT SHALL EITHER PARTY BE LIABLE UNDER ANY CONTRACT, NEGLIGENCE,
STRICT LIABILITY OR OTHER THEORY FOR ANY CONSEQUENTIAL, SPECIAL,
EXEMPLARY, PUNITIVE, INCIDENTAL OR INDIRECT DAMAGES, INCLUDING. WITHOUT
LIMITATION, LOSS OF PROFITS OR GOODWILL, WITH RESPECT TO ANY SUBJECT
MATTER OF THIS AGREEMENT.
10.15 There are no third party beneficiaries of this Agreement.
With the intention to be bound by the terms of this Agreement, the parties have
executed this Agreement by causing their respective authorized representatives
sign where indicated below.
DISCOVER FINANCIAL SERVICES, INC. UTIS GROUP, INC.
By: /S/ Xxxxxx X. Xxxxxx By: /S/ Xxxxxxx X. Xxxx
Name: Xxxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxx
Title: Vice President Title: Pres & CEO
TICKET ISSUER--PROFILE
EXHIBIT A
Ticket Issuer: UTIX GROUP, INC.
Initial BIN Assignment: 6011 9900
Date of First Ticket Issued (Startup): XXXXX XX, 2004
Designated Processor: WILDCARD SYSTEMS, INC.
Processor will perform the following tasks:
Provide a positive or declined Authorization to Merchants
through the Network
Maintain data regarding Ticket and Ticket account balances
Settle funds daily with DFS for Card Transactions
Obtain funds from Ticket Issuer account
Report monthly as provided in this Agreement and the agreement
between DFS and Processor Ticket personalization/production
IVR support Call center support/customer service
Dispute processing
Web development
Processor will hold Authorization for _______days
Ticket Issuer understands that Merchants have 90 days to Settle on
Authorized transactions
Printer of Tickets: CPI.
Address ______________________, Colorado
Phone/Contact____________________
Tickets to be packaged and stored at:
Bank Information
Reserve Account funds held at:_____ Discover Bank____________________
Amount in Reserve Acct. $250,000.00
Acct #__________________________________________________
Stored Value Account Funds held at: Five Star Bank
% against active funds _100%,
Acct #__________________________________________________
Processor to collect funds from account held at Five Star Bank
Acct #__________________________________________________
Schedule 2.2 (j)
DISCOVER PRODUCT APPLICATION FORM
(OPEN ENVIRONMENT)
--------------------- ------------------ ---------------------- ----------------
Requested By: Date Submitted
--------------------- ------------------ ---------------------- ----------------
Discover Sign Off: Date Approved:
--------------------- ------------------ ---------------------- ----------------
TICKET ISSUER
---------------------------------------- ---------------------------------------
Ticket Issuer
---------------------------------------- ---------------------------------------
Processor
---------------------------------------- ---------------------------------------
---------------------------------------- ---------------------------------------
Client
---------------------------------------- ---------------------------------------
Client Branding: Front [_] Back [_]
---------------------------------------- ---------------------------------------
Client Location:
---------------------------------------- ---------------------------------------
Discover/NOVUS Front [_] Back [_] None [_]
Acceptance Marks:
---------------------------------------- ---------------------------------------
Purpose of Program:
---------------------------------------- ---------------------------------------
Will Client Fund Yes [_] No [_]
Ticket
Anticipated Average
Ticket
---------------------------------------- ---------------------------------------
Ticket Activation
Method:
---------------------------------------- ---------------------------------------
Ticket
Storage Distribution
Method
Type of Program Gift, Cash, Stored Client Payroll
Value - Direct to Promotion to Employee (requires
Consumer [_] Consumer [_] Incentive [_] ATM) [_]
--------------------------------------------------------------------------------
Insurance Claim Personal Spending Medical Teen [_] Other
(requires ATM) [_] [_] Account [_]
--------------------------------------------------------------------------------
Sales Channel
Distribution
--------------------------------------------------------------------------------
Anticipated Volume: Total for Program Annual
--------------------------------------------------------------------------------
Gate Program
to Begin:
--------------------------------------------------------------------------------
Date Program
to End:
(if applicable)
--------------------------------------------------------------------------------
Ticket Expiration Dynamic Months from Static
--------------------------------------------------------------------------------
---------------------------------------- ---------------------------------------
---------------------------------------- ---------------------------------------
Marketing Plan
---------------------------------------- ---------------------------------------
PROGRAM FUNCTIONALITY
--------------------------------------------------------------------------------
ATM for Cash: [_]
---------------------------------- ---------------------------- ----------------
Cardholder Statement:[_] When (cycle) Type
---------------------------------- ---------------------------- ----------------
Customer SerVIce:[_] Type of
---------------------------------- ---------------------------------------------
Other Program Functionality[_] Describe
---------------------------------- ---------------------------------------------
FUND MANAGEMENT
--------------------------------------------------------------------------------
Funds Held By:
--------------------------------------------------------------------------------
Funds Held Until:
-------------------- -------------------------------- --------------------------
Funds Load Type: Pre-Loaded [_] Pre-Load Values
-------------------- -------------------------------- --------------------------
Single One Time Load [_] Where & How
-------------------- -------------------------------- --------------------------
Re-Loadable [_] How
-------------------- -------------------------------- --------------------------
Ticket Value Minimum Limits Maximum Limits
Limits:
--------------------------------------------------------------------------------
1.
2. DISCLOSURES*
------------------------------- ------------------------------------------------
Insurance: Yes [_] No [_]
------------------------------- ------------------------------------------------
Miscellaneous Program
Specifics:
------------------------------- ------------------------------------------------
Discover Waiver
Requests
------------------------------- ------------------------------------------------
MCC Exclusion Requests:
------------------------------- ------------------------------------------------
Exclusive MCC (Filter) - _
------------------------------- ------------------------------------------------
2.1.1.1 FOR DISCOVER USE ONLY
-------------------------- --------------------------------- -------------------
Program Checklist IIN Assigned [_] Comments
-------------------------- --------------------------------- -------------------
Review Plastics [_] Comments
-------------------------- --------------------------------- -------------------
Review Marketing Material [_] Comments
-------------------------- --------------------------------- -------------------
Schedule 2.2(a)
* Discover/NOVUS Network generally will approve Product Application requests for
most categories, with the following exceptions:
o Collection Agencies/Debt Consolidation
o Credit Reporting Cleansing Services
o Internet Gambling
o Travel and Non-Travel Related Telemarketing Prize Packages (business
offering prizes for the purchase of a product or service)
o Any activity or service deemed to be illegal by state and/or federal
authorities (i.e. prostitution)
o Tobacco related products and services.
Alcoholic Beverage companies and related products and services may be
approved by DNN.
SCHEDULE 7.1
PRICING AND FEES
1. SET-UP FEES
A. Ticket Issuer Set-Up Fee. Ticket Issuer shall pay DFS a one-time fee to
set up its Program with DFS in the amount of $10,000.
2. CLIENT PROGRAM FEES
A. Ticket Issuer shall pay DFS a New Client Program fee for the first
Program year of each new approved Client Program in the amount of
$7,000.
B. For each Program year after the first year of a Client Program, Ticket
Issuer shall pay a Client Program fee, per each Client Program, of
$4,000.
3. ACCOUNT NUMBER LICENSE FEES
A. Ticket Issuer shall pay DFS an Account Number license fee as Tickets are
issued for each Client Program, determined by the cumulative number of
Account Numbers licensed to and issued by Ticket Issuer under each
Client Program. Account Numbers will be released only in increments of
10,000.
# Of Cumulative Tickets Issued Fee per Ticket
10,000 - 50,000 50.15
50,001 - 100,000 $0.15
100,001 - 500,000 50.15
500,001 - 1,000,000 50.15
1,000,001 - 5,000,000 $0.14
5,000,001 - 10,000,000 50.13
10,000,001 - 50,000,000 50.12
4. TRANSACTION PRICING
A. Ticket Issuer shall pay DFS a fee based on the number of Ticket
transactions processed by Discovcr/NOVUS Network. The amount of this fee
is calculated monthly and is cumulative for a given calendar year.
# Cum. Transactions Routed Fee Per Ticket
to 250,000 $0.075
250,001 to 500,000 50.070
500,001 to 750,000 $0.065
750,001 to 1,000,000 $0.060
1,000,001 to 5,000,000 50.055
5,000,001 to 25,000,000 $0.050
25,000,001 to 100,000,000 $0.050
over 100,000,001 50.045
5. MISCELLANEOUS FEES AND COSTS
A. Micro-transactions (defined as transactions under $5.00) shall be
permitted for up to 2% of the total Card Sale transactions (by number of
transactions, not dollar volume) per month for each separate Client
Program. When the number of Micro-transactions reaches 2%, for each
Micro transaction thereafter, Ticket Issuer shall be charged $.075 per
transaction.
B. Ticket Issuer will be responsible for paying any amounts due pursuant to
the provisions of Section 7.9 of the Agreement.
C. DFS will consider requests from Ticket Issuer to provide the following
additional services at the additional fees set forth below:
(1) DFS will consider creation of new reports that are not part of
the current Stored Value report package outlined in Technical
Specifications Manual at an agreed-upon cost, to be determined
according to the requested report.
(2) Any research requested by Ticket Issuer that requires work by
DFS in excess of 3 hours shall be billed to Ticket Issuer at $85
an hour.
(3) Any changes to the Program requested by Ticket Issuer that
require systems or other technology work to be performed shall
be first estimated by the DFS Business Technology Group, and
shall be billed at $150 an hour after and to the extent that DFS
obtains Ticket Issuer's prior written approval of such work.
6. REVENUE SHARE
DFS will pay to Ticket Issuer an amount calculated by multiplying 1.39%
of the net dollar volume of Card Sales transactions by the appropriate
percentage amount set forth below:
NUMBER OF TICKETS
ISSUED IN A CONTRACT
YEAR:
1 to 1,000,000 30%
1,000,001 to 2.000.000 40%
above 2,000,000 50%
The amount of the Revenue share may be netted from any amounts that Ticket
Issuer owes to DFS, or will he paid directly to Ticket Issuer if the Revenue
Share owed to Ticket Issuer exceeds the amounts Ticket Issuer owes to DFS.
