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Exhibit 10(gg)
CONFIDENTIAL TREATMENT - Asterisked material has been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
MARKETING AGREEMENT
THIS MARKETING AGREEMENT (the "Agreement") by and between Chopper
Corporation, a Delaware corporation, and First Data Corporation, a Delaware
corporation, is made this ___ day of , ____.
BACKGROUND
WHEREAS, FDC, Chopper and certain other Persons are parties to an
Agreement and Plan of Merger and Contribution Agreement, dated as of February
15, 2000 (the "Merger Agreement"), and upon the consummation of the transactions
contemplated by the Merger Agreement, including the contribution of the Tank
Entities (as defined in the Merger Agreement) to Chopper pursuant to the Tank
Contributions (as defined in the Merger Agreement), Chopper and FDC desire to
begin a long term relationship through which the parties, INTER ALIA, leverage
their existing assets and relationships to provide products and services to each
other and to cross market and cross promote each other's products and services,
all upon the terms and conditions set forth herein; and
WHEREAS, FDC has previously entered into a covenant not to compete with
the Tank Entities and Chopper and FDC desire to amend, restate and confirm FDC's
pre-existing covenant not to compete with the Tank Entities.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. Definitions. For the purposes of this Agreement, the following terms
shall have the definitions indicated below, and shall be equally
applicable to the singular and plural forms. Any agreement (including
this Agreement) referred to herein shall mean such agreement as
amended, supplemented and modified from time to time to the extent
permitted by the applicable provisions thereof. When a reference is
made in this Agreement to an article, section, schedule or exhibit,
such reference shall be to an article, section, schedule or exhibit of
this Agreement unless otherwise indicated. Whenever the words
"include," "includes," or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation."
1.1 "AAA" shall have the meaning set forth in Exhibit 13.9(a).
1.2 "Active Consumer" shall mean, with respect to an Aggregation Service
Company, a Consumer who pays at least one Household Xxxx during the
applicable calendar month using such Aggregation Service Company;
provided, however, that such Consumer shall not be considered an Active
Consumer in any calendar month if the sole Household Xxxx paid by the
Consumer during the applicable month is a Household Xxxx paid to an
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Affiliate of the Aggregation Service Company (such excluded Consumer
being an "Excepted Consumer").
1.3 "Affiliate" of a Person shall mean any corporation, partnership, joint
venture, limited liability company or other entity in which such Person
(a) Beneficially Owns, directly or indirectly, 50% or more of the
outstanding voting securities or equity interests, only so long as such
Beneficial Ownership continues, (b) is a general partner, only so long
as such Person remains a general partner or (c) is a managing member,
only so long as such Person remains a managing member.
1.4 "Agreement" shall have the meaning set forth in the first paragraph of
this Agreement.
1.5 "Aggregation Service Company" shall have the meaning set forth in
Section 3.1.
1.6 "Alliance" shall mean any venture (in any form, including in corporate,
partnership or limited liability company form) or contractual alliance
now or hereafter entered into between FDC (or any of its Affiliates)
and one or more third parties pursuant to which the third party
venturer has the contractual or other legal right to block major
business and/or corporate actions by such venture.
1.7 "Beneficially Own" shall have the meaning set forth in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended, except that a Person
shall be deemed to "Beneficially Own" all securities that such Person
has a right to acquire, whether such right is exercisable immediately
or only after the passage of time (and without any additional
condition) (and such ownership may be referred to herein as "Beneficial
Ownership").
1.8 "Xxxx" shall mean a xxxx presented to a Consumer for products sold,
leased, rented or licensed or services rendered.
1.9 "Xxxx Presentment and Payment Service" shall mean an Interactive
Service by which the user is presented with a xxxx for goods or
services together with a means to pay or order payment of that xxxx.
1.10 "Change of Control" shall mean any of the following with respect to
Chopper: (a) the acquisition either directly or indirectly, by any
third Person of the Beneficial Ownership of more than thirty percent
(30%) of the capital stock regularly entitled to vote on all matters
subject to stockholder vote (the foregoing shall not include a
transaction in which a holding company is used and the stockholders of
the original company own at least 70% of the stock of the holding
company after such transaction); (b) any merger, consolidation or other
business combination or transaction whereby the stockholders of Chopper
immediately prior to the effective date of such merger, consolidation
or other business combination or transaction cease to own at least
seventy percent (70%) of the capital stock of the surviving entity (or
its 100% controlling parent) regularly entitled to vote on all matters
subject to stockholder vote following such merger, consolidation or
other business combination or transaction; or (c) the transfer to any
Person who is not a party to
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this Agreement of all or substantially all of the assets of Chopper or
any of its Affiliates, as applicable.
1.11 "Chopper" shall mean Chopper Corporation, a Delaware corporation, and
its permitted successors and permitted assigns.
1.12 "Chopper Indemnified Persons" shall have the meaning set forth in
Section 9.2.
1.13 "Client" means clients of FDC and its Affiliates and other third
Persons, excluding the Top Billers.
1.14 "Chopper Patents" shall mean any and all patents that Chopper or any
of its Affiliates has rights to assert during the term of this
Agreement.
1.15 "Confidential Information" shall have the meaning set forth in
Section 7.1.
1.16 "Consumer" shall have the meaning set forth in Section 3.1.
1.17 "DDA" shall mean a demand deposit account with a financial
institution.
1.18 "Dispute" shall mean any and all disputes, controversies and claims
between the parties arising from or in connection with this Agreement
or the relationship of the parties under this Agreement, whether based
on contract, tort, common law, equity, statute, regulation, order or
otherwise.
1.19 "Effective Date" shall mean the date of the consummation of the
transactions contemplated by the Merger Agreement.
1.20 "Existing Alliance" shall mean an Alliance of FDC or any of its
Affiliates existing on the date hereof.
1.21 "Expense Savings" shall mean the savings realized or achieved by
Chopper and its Affiliates (i) that result from its use of FDC's or its
Affiliates' products and services and (ii) that result from its use of
products and services used or resold by FDC or its Affiliates and
provided by third party vendors or suppliers, which products or
services are purchased by, through or through arrangements made by, FDC
or its Affiliates. It being understood that notwithstanding the
foregoing, Expense Savings include any relative reduction in costs
associated with payment processing, customer service and exemption
processing/handling.
1.22 "Fees" shall have the meaning set forth in Section 3.2(a).
1.23 "Fifth Year Monthly Minimum" shall have the meaning set forth in
Section 3.2(e).
1.24 "First Year Minimum" shall have the meaning set forth in
Section 3.2(a).
1.25 "Fourth Year Monthly Minimum" shall have the meaning set forth in
Section 3.2(d).
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1.26 "FDC" shall mean First Data Corporation, a Delaware corporation, and
its permitted successors and permitted assigns.
1.27 "FDC Business Services" shall have the meaning set forth in
Section 3.1.
1.28 "FDC Indemnified Persons" shall have the meaning set forth in
Section 9.1.
1.29 "Future Alliance" shall mean an Alliance of FDC or any of its
Affiliates entered into after the date hereof.
1.30 "Household Bills" shall have the meaning set forth in Section 3.1.
1.31 "Infringement Claims" shall have the meaning set forth in
Section 9.1(a).
1.32 "Integrated Interactive Xxxx Payment System" shall have the meaning
set forth in Section 3.1.
1.33 "Interactive Service" means a service accessed with electronic devices
(whether now known or hereafter developed) that devices allow the user
to view information and respond with additional information. Such
devices include, without limitation, computers, personal digital
assistants, "screen" telephones, and Internet-enabled televisions.
1.34 "Internet Site" means a Uniform Resource Locator (URL), or group of
URLs which are designed to be perceived by the user as being operated
by, or on behalf of, a single commercial business entity.
1.35 "Losses" shall have the meaning set forth in Section 9.1 .
1.36 "Losses and Expenses" shall have the meaning set forth in
Section 10.1.
1.37 "Merchant Acquiring Services" shall mean the provision of any of the
following services or products, directly or indirectly, to merchants in
respect of Transaction Cards: (i) the authorization and capture of
transactions, (ii) the submission of such transactions for interchange
settlement or other settlement, (iii) the preparation of statements or
reports based on such transactions, chargebacks and other exception
items (including by electronic access), (iv) the provision of customer
service or other back office services in respect of any of such
transactions, (v) the sale, lease or rental of point of sale (POS)
hardware relating to any of the foregoing and (vi) clearing and
settlement services.
1.38 "Merger Agreement" shall have the meaning set forth in the second
paragraph of this Agreement.
1.39 "Minimums" shall mean the First Year Minimum, Second Year Monthly
Minimum, Third Year Monthly Minimum, Fourth Year Monthly Minimum or
Fifth Year Monthly Minimum, as the case may be.
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1.40 "Monthly Consumer Xxxx Payment Ratio" shall mean, with respect to any
Aggregation Service Company in a calendar month, an amount equal to (A)
the total number of Household Bills paid by FDC and its Affiliates for
such Aggregation Service Company excluding any Household Bills paid for
Excepted Consumers, utilizing an Integrated Interactive Xxxx Payment
System owned or operated by FDC or its Affiliates, using an Interactive
Service during the applicable calendar month; divided by (B) the
aggregate number of Active Consumers for such Aggregation Service
Company during the applicable calendar month. For purposes of
calculating the total number of Household Bills paid by FDC and its
Affiliates, all of a Consumer's Household Bills paid in a single
payment to a Single Payee shall count as a single Household Xxxx.
1.41 "Pay Anyone Service" shall mean an Interactive Service through which
the user may make payment(s) from the user's DDA to any other Person
without the need for the electronic presentment of a xxxx in connection
with such payment, where the user enters the payment instructions
including payment amount, source account, date of payment, payee,
account number of payee (if any), and the Interactive Service accepts
and completes the payment per the instructions.
1.42 "Payment Processing" shall mean the processing of any method a Person
may now or hereafter use to pay an obligation, including Transaction
Card, electronic check, Internet check, paper check, EFT, Automated
Clearinghouse or wallet technology.
1.43 "Payee" shall have the meaning set forth in Section 3.1.
1.44 "Person" shall mean an individual, partnership, corporation, limited
liability company, trust, joint stock company, association, joint
venture, or any other entity or organization, including a government or
political subdivision or any agency or instrumentality thereof.
1.45 "Restricted Activity" shall have the meaning set forth in Section 3.1.
1.46 "Revenue Shortage" shall mean the amount by which the First Year
Minimum, Second Year Monthly Minimum, Third Year Monthly Minimum,
Fourth Year Monthly Minimum or Fifth Year Monthly Minimum (as
applicable) is greater than the sum of the Fees and Expense Savings
during the applicable monthly or twelve (12) month period.
1.47 "Second Year Monthly Minimum" shall have the meaning set forth in
Section 3.2(b).
1.48 "Specified Processors" shall mean those entities identified in
Schedule 1.48 and their Affiliates and their respective successors
and assigns.
1.49 "Sponsor" shall have the meaning set forth in Section 3.1.
1.50 "Statement" shall mean a statement of account presented to a Consumer
containing information about the Consumer's account.
1.51 "Term" shall have the meaning set forth in Section 5.
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1.52 "Third Year Monthly Minimum" shall have the meaning set forth in
Section 3.2(c).
1.53 "Top Billers" shall mean each of the entities set forth in
Schedule 1.37.
1.54 "Voting Stock" shall mean securities of a Person having the ordinary
power to vote in the election of members of the board of directors or
board of managers or equivalent governing body.
2. Chopper Obligations. As of the Effective Date and during the Term:
2.1 Payment Processing.
(a) Chopper shall use and shall cause its Affiliates to use FDC and
its Affiliates to provide all Payment Processing used by Chopper
and its Affiliates; provided, however, that neither Chopper nor
any of its Affiliates shall be required to use FDC and its
Affiliates to provide Payment Processing if, in the reasonable
business judgment of Chopper, Chopper or its Affiliates, as
applicable, can obtain substantially similar Payment Processing
on substantially the same terms offered by FDC and its Affiliates
at an overall economic cost that is less than the overall
economic cost FDC and its Affiliates offered to provide the same
to Chopper and its Affiliates; provided, however, that
"reasonable business judgment" may take into consideration the
fact that FDC or its Affiliates offers a directly competing
product or service offered by Chopper or any of its Affiliates
and the use of FDC's or its Affiliates' product or service by
Chopper or its Affiliates would either (i) allow FDC or its
Affiliates to achieve substantial competitive benefits due to
increased volume or (ii) provide FDC or its Affiliates with
proprietary technology of Chopper and its Affiliates that
provides FDC or its Affiliates with a substantial competitive
advantage.
(b) Notwithstanding Section 2.1(a), if Chopper or any of its
Affiliates are able to obtain from a third Person substantially
similar Payment Processing on substantially the same terms
offered by FDC or its Affiliates at an overall economic cost that
is less than the overall economic cost that FDC and its
Affiliates offered to provide such Payment Processing to Chopper
and its Affiliates, Chopper shall permit and shall cause its
Affiliates to permit FDC and its Affiliates to provide such
Payment Processing to Chopper and its Affiliates on overall terms
that are at least as favorable as those offered by such third
Person, in which case Chopper or its Affiliate, as applicable,
shall obtain such services from FDC and its Affiliates.
(c) FDC and its Affiliates shall offer to provide to Chopper and its
Affiliates, in connection with the services Chopper is then
offering to Aggregation Service Companies, Payment Processing of
the type FDC and its Affiliates is then offering generally in the
marketplace. In determining the price, level of service and other
specific terms of the Payment Processing to be offered to Chopper
and its Affiliates, FDC shall take into account (i) its then
current equity interest in
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Chopper, (ii) the anticipated volumes, any exclusivity
arrangements and minimum revenue commitments either of the
parties or their respective Affiliates are bound by, the
marketing commitments involved and (iii) the terms and conditions
of the current form of customer contract. If either Chopper or
its Affiliates chooses to purchase such Payment Processing from
FDC or its Affiliates, it shall execute FDC's current form of
customer contract with appropriate terms and conditions.
(d) To facilitate the provision of Payment Processing by FDC and its
Affiliates to Chopper and its Affiliates, within 60 days
following the Effective Date, and thereafter as FDC may
reasonably request (but at least annually), Chopper and its
Affiliates shall provide FDC and its Affiliates with such
information as FDC may reasonably request relating to the then
current and anticipated use of Payment Processing by Chopper and
its Affiliates, including the specific terms of existing
third-party contracts relating to Payment Processing (subject to
any existing confidentiality requirements).
(e) If Chopper shall breach this Section 2.1, the parties agree that
FDC shall be entitled to 200% of any lost profits of FDC and its
Affiliates.
2.2 Official Check. When commercially reasonable, Chopper and its
Affiliates shall use FDC's product commonly known as Official Check in
connection with the Pay Anyone Service. In connection therewith,
Chopper shall enter into a customary processing agreement relating to
the use of the Official Check product. For purposes of this Section
2.2, it shall be deemed commercially reasonable for Chopper and its
Affiliates to use FDC's product commonly known as Official Check when,
in the reasonable business judgement of Chopper, services of equal or
superior quality as compared to the offerings of third Persons may be
thereby obtained at an equal or lesser overall economic cost from FDC
or its Affiliates than such third Person; provided, however, that
"reasonable business judgment" may take into consideration the fact
that FDC or its Affiliates offers a directly competing product or
service offered by Chopper or any of its Affiliates and the use of
FDC's or its Affiliates' product or service by Chopper or its
Affiliates would either (i) allow FDC or its Affiliates to achieve
substantial competitive benefits due to increased volume or (ii)
provide FDC or its Affiliates with proprietary technology of Chopper
and its Affiliates that provides FDC or its Affiliates with a
substantial competitive advantage.
2.3 Covenant Not to Xxx For Chopper Patents. Chopper hereby covenants not
to xxx or otherwise bring or assert any claim against FDC or any of its
Affiliates that any service or product offered by FDC or any of its
Affiliates infringe any Chopper Patent which is based upon or utilizes
any intellectual property constituting works derivative of intellectual
property licensed pursuant to the [Technology and Intellectual Property
License Agreements], dated the date hereof, between FDC and Chopper and
Missile and Chopper.
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3. FDC Obligations. As of the Effective Date and during the Term (except
as provided in Section 3.1):
3.1 Noncompete.
(a) Subject to the exceptions set forth below, FDC agrees that,
subject to Section 6, beginning on the Effective Date and for
a period ending on the fifth anniversary of the Effective
Date, (1) in no month will the Monthly Consumer Xxxx Payment
Ratio of any Aggregation Service Company (including an
Aggregation Service Company owned or operated by FDC), to
which FDC or its Affiliates provides an Integrated Interactive
Xxxx Payment System using an Interactive Service anywhere in
the world, exceed three (the "Restricted Activity") or (2)
neither FDC or its Affiliates shall acquire the Voting Stock
of any Person conducting Restricted Activities.
(b) An "Integrated Interactive Xxxx Payment System" is a
combination of applications, databases and processing
infrastructure which together, coupled with connectivity,
provide the necessary intelligence to receive and convert
Consumer payment instructions for online xxxx payments into
credits (to a Payee DDA), debits (from a Consumer DDA) and
exceptions, and which can be amended and corrected on a
transaction-by-transaction basis as exceptions are processed
and remediated. In order to be an Integrated Interactive Xxxx
Payment System, the system also must have all of the following
features:
(1) A database utilized by FDC or its Affiliates in
connection with an Integrated Interactive Xxxx
Payment System that contains files with information
regarding Sponsors. A "Sponsor" is a financial
institution, personal financial management software
provider, or internet site operator which offers
electronic xxxx delivery and payment, or xxxx
payment, electronically to its customers or patrons.
A Sponsor file is consulted to determine
connectivity, communications windows, or business
rules influencing debit method with respect to a
Sponsor.
(2) A database utilized by FDC or its Affiliates in
connection with an Integrated Interactive Xxxx
Payment System that contains a database of files with
information regarding Payees. A "Payee" is the
receiver of payments, including both funds and
remittance information. A Payee file must contain all
of the following fields: (i) name; (ii) telephone
numbers; (iii) preferred remittance method; (iv) bank
account information; and (v) risk-related
information.
(3) A database utilized by FDC or its Affiliates in
connection with an Integrated Interactive Xxxx
Payment System that contains files with information
regarding Consumers. A "Consumer" is an individual
person (and shall not include small businesses, sole
proprietorships, partnerships, corporations, limited
liability companies, or other such entities) that is
the
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holder of one or more bank accounts from which bills
are to be paid through the system. A Consumer file must
contain all of the following fields: (i) name; (ii)
address; (iii) unique alphanumeric identifier; (iv)
bank account information; and (v) Payee files,
including account numbers.
(4) A system for recognizing disparities or anomalies in
Payee account information submitted by and automatically
makes appropriate corrections or changes;
(5) A system for programmatically choosing a method of
debit, among Automated Clearing House debit, or
paper draft on the Consumer's account, through an
arrangement with a Sponsor, and not as a result of
choice by the Consumer, to obtain good funds, or
other debit method, influenced by business rules and
information contained in Sponsor, Payee, or Consumer
files;
(6) A system for programmatically choosing a method of
credit, including both funds transfer and remittance
information transmission among Automated Clearinghouse,
e-Pay, RPS, Direct Send, Managed or Unmanaged paper
check, paper draft, or other method, depending upon
information contained in Consumer, Sponsor, or Payee
files;
(7) A system for determining the format of and formatting
remittance information in a manner consistent with
information contained in Payee files; and
(8) A system for updating information contained in Payee,
Sponsor, and Consumer files as a result of a payment
which is initially rejected or returned, and
reprocessing the payment.
The parties recognize that activities that include one or
more, but not all, of the foregoing components do not constitute an
Integrated Interactive Xxxx Payment System, and that the provision of
all the components set forth in (1) through (8) are required in order
for a system to be considered an Integrated Interactive Xxxx Payment
System.
(c) "Household Bills" are defined as only those bills which have
customarily been received at home by a Consumer through the
United States Postal Service which seek payment for services or
goods which have been provided in the past, or will be provided
in the future, usually as part of an ongoing relationship between
the Payee and the Consumer, or, as in the case of a credit card
statement, as part of a credit relationship established in the
past. Examples of Household Bills are utility bills, credit card
bills, insurance bills, loan payments, magazine or newspaper
subscriptions, and recurring home delivery of milk, bottled
water, or other products or services such as gardening, home
maintenance, or snow removal. Household Bills do not include
requests for payment made in connection with a
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non-recurring purchase of goods or services, such as purchases
made over the Internet, through mail order or telephone order,
nor do they include requests for payment which are made at a
location which is open to the general public or which is a place
of public accommodation. The term Household Bills does not
include payments made to an individual from an individual other
than in furtherance of a regularly-conducted business, trade, or
profession by either of them (Person-to-Person Payments).
(d) An "Aggregation Service Company" is an entity which itself
provides to Consumers, or through an intermediary provides to
Consumers, a service whereby electronic bills presented by more
than three Single Payees may be accessed and paid at a single
Internet Site, or through personal financial management client
software used principally for accounting, investing, budgeting,
maintaining or monitoring a Consumer's personal finances, with a
single authentication procedure. An entity which provides an
Internet Site which provides hyperlinks to multiple Internet
Sites or URLs each operated by, hosted by, or established for, a
Single Payee shall not be considered to be an Aggregation Service
Company provided that payment is effectuated through the same
initiation method and process as would be applied to payments
effectuated on behalf of users who access the hyperlinked
Internet Site or URL directly; provided, however, that solely
with respect to hyperlinked URLs, such hyperlinked URLs do not
appear to the Consumer to be under the same sponsor. A "Single
Payee" is a business entity which (a) controls, is controlled by,
or under common control of the entity represented at the site or
(b) payees which voluntarily (or pursuant to governmental
requirement) combine in a single Xxxx or Statement, Bills or
Statements from one or more sources that are to be discharged by
a single payment (e.g., a phone xxxx or credit card xxxx). FDC
and its Affiliates shall be free to offer electronic billing and
Payment Processing through Internet Sites and URLs offering
billing from, or payment to, a Single Payee.
(e) Notwithstanding the foregoing, nothing herein shall be
construed as to prohibit FDC from offering
business-to-business Payment Processing, or person-to-person
Payment Processing whether through an Integrated Interactive
Xxxx Payment System or otherwise.
(f) FDC and its Affiliates may conduct Restricted Activities,
provided, that:
(1) FDC and its Affiliates limit the gross revenues derived
solely from all such Restricted Activities to
$50,000,000 per calendar year;
(2) Except as provided in Sections (h)(4), (h)(5),
(h)(6) and (h)(13), FDC pays to Chopper 25% of all
gross revenues derived solely from the Restricted
Activities, which payment shall be counted as Fees
for purposes of Section 3.2; provided, however, that
the maximum amount of any such payments which can be
counted as Fees in any calendar year
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cannot exceed 50% of the sum of the Minimums required
to be generated for such year; and
(3) FDC gives notice to Chopper and Chopper as soon as
practicable after signing an agreement to engage in
such activities.
(g) Under no circumstances, however, shall FDC agree to construct
or cause to be constructed, or operate, an Integrated
Interactive Xxxx Payment System for [*].
(h) Nothing contained herein shall be interpreted to prohibit:
(1) the development, sale, or licensing of stand-alone
tools, productivity applications and/or client or
server platforms, that can be used to facilitate
aggregation by client software of Bills, Statements
or payments;
(2) providing electronic Bills or Statements to any Person;
(3) owning (i) not in excess of 20% in the aggregate of the
Voting Stock of any Person (including a Person engaged
in a Restricted Activity, but excluding any Existing
Alliance or Future Alliance covered in Section
3.1(h)(6) or (h)(13)); or (ii) owning Voting Stock of
Chopper; provided, however, that, with respect to
clause (i), if the investment represents in excess of
10% of the Voting Stock of any such Person, then an
amount equal to (A) FDC's or its Affiliates' percentage
of Voting Stock, multiplied by (B) the gross revenues
derived solely from the Restricted Activities of such
investment, shall be included in gross revenues for
purposes of clause (f)(1) of Section 3.1 (but none of
such gross revenues shall be counted for purposes of
calculating gross revenues for purposes of clause
(f)(2) of Section 3.1);
(4) acquiring, and following such acquisition, actively
engaging in, any business that has a subsidiary,
division, group, franchise or segment that is engaged
in any Restricted Activity ("Competing Unit"), so long
as on the date of such acquisition, not more than the
lesser of 20% or $50,000,000 of the annual consolidated
revenues of such business are derived solely from
Restricted Activities; provided, however, that if FDC
or any of its Affiliates acquire a Competing Unit, then
the gross revenues derived solely from the Restricted
Activities conducted by the Competing Unit shall be
included in gross revenues for purposes of clause (f)
of Section 3.1; provided, further, that if FDC or its
Affiliates agree to divest of such Competing Unit in
the manner set forth in clause (h)(5) of Section 3.1,
then only 15% of the gross revenues derived solely from
the Restricted Activities of the Competing Unit shall
be included in gross revenues for purposes of clause
(f)(2) of Section 3.1 for so long as FDC and its
* Portions have been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
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Affiliates are complying with clause (h)(5) of Section
3.1 (but none of such gross revenues shall be counted
for purposes of calculating gross revenues for purposes
of clause (f)(1) of Section 3.1);
(5) acquiring and, following such acquisition, actively
engaging in, any business that has a Competing Unit if
on the date of such purchase more than the lesser of
20% or $50,000,000 of the consolidated revenues of such
business are derived from a Restricted Activity so long
as such business divests itself of the Competing Unit
promptly after the date of such acquisition, and in no
case greater than two years, accompanied by public
announcement of the requirement to divest, so that on
the date of such divestiture not more than the lesser
of 20% or $50,000,000 of the consolidated revenues of
such business are derived from Restricted Activities;
provided, however, that with respect to any purchase
intended to be treated for federal income tax purposes
as a tax-free reorganization, no such divestiture shall
be required until, in the reasonable opinion of FDC,
such divestiture would no longer endanger the treatment
for federal income tax purposes of such acquisition as
a tax-free reorganization; provided, further, that for
so long as FDC or any of its Affiliates holds a
Competing Unit it is required to divest, then 15% of
the gross revenues derived solely from the Restricted
Activities conducted by the Competing Unit shall be
included in gross revenues for purposes of clause
(f)(2) of Section 3.1 (but none of such gross revenues
shall be counted for purposes of calculating gross
revenues for purposes of clause (f)(1) of Section 3.1).
(6) engaging in a Future Alliance, provided, that, subject
to any applicable fiduciary obligation, FDC shall, and
shall cause its Affiliates to, vote against, not
support and oppose any proposal on the part of any
Future Alliance to (A) acquire or invest in the Voting
Stock of a business performing Restricted Activities,
or (B) otherwise enter into a contract, arrangement or
understanding with a Person engaged in Restricted
Activities to engage in Restricted Activities, which,
in the case of the Restricted Activities referred to in
(A) and (B), FDC would be prohibited from engaging in
pursuant to this Section 3.1 during the applicable
non-compete period; provided, however, that 15% of
FDC's allocable share (which allocable share shall
equal FDC's percentage ownership interest in the Future
Alliance) of the gross revenues derived solely from the
Restricted Activities conducted by such Alliance shall
be included in gross revenues for purposes of clause
(f)(2) of Section 3.1 (but none of such gross revenues
shall be included for purposes of calculating gross
revenues for purposes of clause (f)(1) of Section 3.1);
(7) performing any services pursuant to this Agreement or
any other agreement entered into in connection with the
performance of this Agreement;
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(8) providing a service or product where the electronic
payment and presentment system is an ancillary feature
of an electronic merchandising business offered,
operated or supported by FDC or any of its Affiliates
(e.g., an on-line shopping mall, etc.); provided that
FDC or its Affiliates provide such payment and/or
presentment services to purchasers only with respect to
the services or products offered by such electronic
merchandising business;
(9) providing a service or product whereby payment and/or
presentment can only be made at a physical location
which is open to the general public or a place of
public accommodation (e.g., grocery stores, check
cashing locations or the post office);
(10) providing a service or product for payment or
presentment of taxes and fees to government entities;
(11) providing an Interactive Service which is designed and
marketed to provide for the last minute or emergency
payment of Bills or Statements;
(12) providing a payment gateway using proprietary software
that enables the transmission of payment transaction
information via the Internet for a Payee conducting
business on the Internet or through mail
order-telephone order, thereby allowing the Payee to
process transactions electronically;
(13) providing any service which FDC or its Affiliates is
contractually obligated to provide to an Existing
Alliance; provided, however, that 15% of FDC's
allocable share (which allocable share shall equal
FDC's percentage ownership interest in the Existing
Alliance) of the gross revenues derived solely from the
Restricted Activities conducted by such Alliance shall
be included in gross revenues for purposes of clause
(f)(2) of Section 3.1 (but none of such gross revenues
shall be included for purposes of calculating gross
revenues for purposes of clause (f)(1) of Section 3.1);
(14) providing an Integrated Interactive Xxxx Payment System
that involves an interchange system (not created
specifically for the aggregation and payment of
Household Bills) of any kind to effectuate payment; and
(15) providing payment related services in connection with
an electronic wallet or password management product or
service, including interfaces to any client software.
Except as specifically set forth in this clause (h), none of
the gross revenues generated from activities described in
clauses (1) through (15) above shall be
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counted as gross revenues from Restricted Activities for
purposes of clause (f) of Section 3.1.
(i) Nothing in this Agreement, including without limitation, this
Section 3.1, shall be construed to prohibit FDC or any Affiliate
of FDC from providing any FDC Business Services, including
through Interactive Service, and none of the FDC Business
Services shall be construed to constitute Restricted Activities.
"FDC Business Services" means providing any of the following
services (including any services supportive or ancillary to
Restricted Activities):
(1) issuing or processing of debit card, credit card, bank card,
payment card, electronic benefit payment card, smart card,
stored value card or other similar card (including an
electronic equivalent) ("Transaction Cards") transactions
and related products, services and systems, loan processing
services and line-of-credit services;
(2) issuing, origination, reconciliation, payment, processing,
clearing, verification, guarantee, scoring or collection of
any check (including electronic versions thereof), credit,
debit and draft transactions, ATM transactions, Automated
Clearinghouse transactions, electronic funds transfer
transactions, Transaction Card transactions and recurring
payment transactions, including any payment transaction
branded by VISA, MasterCard, Discover, NOVUS, American
Express or regional EFT network;
(3) providing processing and other services in connection with
electronic and/or paper xxxx, invoice, statement or notice
presentment and payment services;
(4) official checks and money orders services;
(5) money transfer services as presently constituted (including
Western Union and Xxxxxxx Valuta);
(6) remittance processing, tax payment, payment instrument
services and cash management services;
(7) in store and other off-site retail location facility
installments and related consulting services;
(8) list services (including sale, licensing and list rental),
database marketing services (including housing, storing,
sorting, maintaining, enhancing and updating data), data
processing services (including provision of merge/purge,
address hygiene and data append services) and database
information services (including provision of market
segmentation, consumer profiling, modeling and demographic
information services);
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(9) preparation and mailing (or other form of delivery,
including electronic delivery) of bills, invoices,
statements or notices;
(10) messaging services, including the preparation, printing,
facsimile or electronic transmission and/or mailing of
letters or other communications and the preparation and
telephonic delivery of pre-recorded voice messages;
(11) automated voice response and call center services;
(12) telephone check drafting, Automated Clearinghouse
origination or electronic funds transfer services whether
originated or authorized over or through a telephone, the
Internet or web-based connection (including through a
virtual POS or other payment authorization interface) and
the enrollment, authorization and confirmation services
provided in connection therewith;
(13) provision (whether by batch or transactional) of credit and
collection services, analytic modeling and metric products
or services (including various "scoring" products and
services) relating to payment transactions (including by
check and Transaction Card), credit worthiness,
householding, profitability, customer services, collection
effectiveness, retention, fraud, bankruptcy, settlement,
payment and related services, transaction, account or
performance and the provision of credit reports and other
credit bureau services, account screening services and other
credit reporting applications and check and Transaction Card
acceptance, guarantee, scoring and collection services;
(14) any activities seeking collection of amounts owed by a
debtor, including telephone calls and written and other
communications to a debtor;
(15) processing of debit or credit transactions for deposit
accounts;
(16) employment screening, customer acquisition and address
management services; and
(17) Merchant Acquiring Services and services offered to
merchants, including in connection with the establishment of
Internet-based commerce.
(j) Nothing in this Section 3.1 shall prohibit the incidental or
occasional use of any product or service offered or sold by
FDC or any of its Affiliates for use in a Restricted Activity
provided such product or service has not been designed or
marketed for the purpose of engaging in a Restricted Activity.
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3.2 Minimum Revenues.
(a) If the fees (excluding installation fees) paid to Chopper and its
Affiliates by FDC and its Affiliates (the "Fees") and Expense
Savings during the first full twelve (12) calendar months after
the Effective Date is less than $6,000,000 (the "First Year
Minimum"), then within thirty (30) days after the end of such
twelve (12) calendar month period, FDC shall pay to Chopper the
difference between the First Year Minimum and the total of the
Fees and Expense Savings during such twelve (12) calendar month
period.
(b) If the Fees and Expense Savings during any of the twelve (12)
full calendar months after the first anniversary of the Effective
Date is less than $750,000 (the "Second Year Monthly Minimum"),
then within thirty (30) days after the end of any month in which
there is a Revenue Shortage, FDC shall pay to Chopper the
difference between the Second Year Monthly Minimum and the total
of the Fees and Expense Savings during such month.
(c) If the Fees and Expense Savings during any of the twelve (12)
full calendar months after the second anniversary of the
Effective Date is less than $1,000,000 (the "Third Year Monthly
Minimum"), then within thirty (30) days after the end of any
month in which there is a Revenue Shortage, FDC shall pay to
Chopper the difference between the Third Year Monthly Minimum and
the total of the Fees and Expense Savings during such month.
(d) If the Fees and Expense Savings during any of the twelve (12)
full calendar months after the third anniversary of the Effective
Date is less than $1,250,000 (the "Fourth Year Monthly Minimum"),
then within thirty (30) days after the end of any month in which
there is a Revenue Shortage, FDC shall pay to Chopper the
difference between the Fourth Year Monthly Minimum and the total
of the Fees and Expense Savings during such month.
(e) If the Fees and Expense Savings during any of the twelve (12)
full calendar months after the fourth anniversary of the
Effective Date is less than $1,500,000 (the "Fifth Year Monthly
Minimum"), then within thirty (30) days after the end of any
month in which there is a Revenue Shortage, FDC shall pay to
Chopper the difference between the Fifth Year Monthly Minimum and
the total of the Fees and Expense Savings during such month.
(f) Any fees (excluding installation fees) paid to Chopper or any of
its Affiliates received from billers (other than Top Billers) (i)
that FDC or any of its Affiliates resells any services or
products of Chopper or its Affiliates to, (ii) that FDC or any of
its Affiliates has referred or introduced to Chopper or any of
its Affiliates or (iii) that FDC or its Affiliates actively
market Chopper's services or products to, shall be counted as
"Fees" for purposes of this Section 3.2. In addition, any fees
(excluding installation fees) received, directly or indirectly,
by Chopper or its
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Affiliates from consumer transactions occurring on any
Internet site owned, maintained or hosted by FDC or any of
its Affiliates shall be counted as "Fees" for purposes of
this Section 3.2. Chopper shall promptly (but in any event
no longer than fifteen (15) days after each month end)
provide FDC with any such information reasonably necessary
for FDC to calculate the Fee's generated by Persons that are
not Affiliates of FDC.
3.3 Notwithstanding Section 3.2, FDC shall be under no obligation to meet
any monthly minimum identified in Section 3.2 to the extent and only to
the extent that:
(a) Chopper or any of its Affiliates fails to make available any Xxxx
Presentment and Payment Service, Pay Anyone Service or Payment
Processing service;
(b) the means by which Chopper or any of its Affiliates makes
available any Xxxx Presentment and Payment Service, Pay Anyone
Service or Payment Processing service are unavailable due to
technical failure or otherwise;
(c) Chopper changes the nature of its business in a material way so
as to have a material adverse effect on FDC's and its Affiliates'
ability to meet the monthly payment minimums set forth in Section
3.2; or
(d) Chopper or any of its Affiliates takes any action that materially
interferes with FDC or its Affiliates ability to commercially
exploit any Xxxx Presentment and Payment Service, Pay Anyone
Service or Payment Processing service of Chopper and its
Affiliates.
3.4 Pay Anyone. When commercially reasonable, and if FDC or any of its
Affiliates chooses to offer a Pay Anyone Service of such kind, FDC and
its Affiliates shall use Chopper's Pay Anyone Service, subject to such
terms and conditions as the parties may agree. For purposes of this
Section 3.5, it shall be deemed commercially reasonable for FDC and its
Affiliates to use Chopper's Pay Anyone Service when, in the reasonable
business judgment of FDC, services of equal or superior quality as
compared to a third Person may thereby be obtained at an equal or
lesser overall economic cost from Chopper then from such third Person.
3.5 CSP. Nothing herein shall restrict FDC or its Affiliates from hosting a
site providing or offering Pay Anyone and/or Xxxx Presentment and
Payment Services of a third party via distribution or transmission of
computer software and/or informational content of such third party,
where such hosting activities are generally conducted for other parties
and the fee or consideration arrangements therefore are arms' length
transactions of the type generally made; provided, however, that if the
site is hosted by and for FDC or any of its Affiliates, FDC and its
Affiliates will be required to comply with the other provisions of this
Agreement; provided, further, that FDC or its Affiliates will not host
a site for a third Person offering an FDC branded Pay Anyone or Xxxx
Presentment and Payment product or service which would otherwise
violate the terms of this Agreement. As used herein, "hosting" means
the transmission or publication of another's products or services,
which
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may be accomplished through use of the hosting party's equipment and
facilities, where the hosting party does not create or control the
hosted products or services, but rather is acting as a transmitter or
publisher of such products or services.
3.6 Xxxx Service Provider. If FDC or any of its Affiliates acts as a xxxx
service provider for a specific Payee, FDC and its Affiliates will use
its reasonable commercial efforts, determined in the sole judgment of
FDC, to encourage such Payee to make available its Household Bills
through the Xxxx Presentment and Payment System operated by Chopper and
any of its Affiliates, provided that (1) such Payee has entered into a
contract with Chopper or a reseller (including FDC) agreeing to make
available Household Bills on the Xxxx Presentment and Payment System
operated by Chopper and any of its Affiliates and (2) such Payee or
Chopper agrees to pay all costs and expenses (including installation
fees) associated with the presentment of any Household Bills on the
Xxxx Presentment and Payment System operated by Chopper or its
Affiliates.
4. Chopper and FDC Joint Obligations.
4.1 Development. Whenever commercially reasonable, Chopper and FDC shall
cooperate with each other in developing electronic invoicing and
payment services and products for clients and prospective clients of
FDC and its Affiliates. Any such joint development shall only be
undertaken after execution of a written joint development agreement.
The parties must agree in writing prior to commencing any joint
development work. All such cooperation is on a non-exclusive basis for
both parties, unless otherwise agreed upon in writing for a particular
project.
4.2 Expense Savings. Within sixty (60) days after the Effective Date,
Chopper and FDC shall determine an appropriate mechanism to calculate
the Expense Savings. Notwithstanding the foregoing sentence, commencing
on the first full calendar month after the Effective Date and ending
sixty full calendar months later, Chopper shall deliver to FDC, not
less than fifteen (15) days after the end of each calendar month, a
detailed statement calculating the Fees and Expense Savings for the
most recently completed calendar month.
4.3 Reseller Agreement.
(a) Contemporaneously with the execution of this Agreement, the
parties shall enter into a non-exclusive reseller agreement
substantially in the form attached hereto as Schedule 4.3(a)
relating to the resale by FDC and its Affiliates of the Xxxx
Presentment and Payment Service, Pay Anyone Service and Payment
Processing Service of Chopper and its Affiliates to Clients.
(b) Pricing. The initial pricing structure for the Xxxx Presentment
and Payment Service, Pay Anyone Service or Payment Processing
Service of Chopper and its Affiliates to be resold by FDC and its
Affiliates are set forth in Schedule 4.3(b). At least sixty (60)
days prior to the commencement of any renewal of this Agreement,
the parties shall in good faith renegotiate the pricing
structure, and
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such structure shall replace the structure then set forth on any
Schedule 4.3(b). Chopper represents and warrants that the pricing
for the Xxxx Presentment and Payment Service, Pay Anyone Service
or Payment Processing Service to be resold by FDC are at least as
favorable as the terms granted by Chopper or any of its
Affiliates to any other Person. If Chopper or any of its
Affiliates enters into any subsequent or renewal agreement with
any other Person during the Term that provides for pricing more
favorable than the pricing provided to FDC, FDC shall be deemed
to receive the more favorable terms. Chopper shall notify FDC
promptly of the existence of such more favorable pricing or
benefits and FDC shall have the right to receive the same
immediately. [note: the pricing schedule may be folded into the
reseller agreement to be executed by the parties.]
(c) Consumer Pricing. If FDC or any of its Affiliates offers any of
the Xxxx Presentment and Payment Service, Pay Anyone Service or
Payment Processing Service provided by Chopper or its Affiliates
to consumers, Chopper shall offer to provide FDC and its
Affiliates such Xxxx Presentment and Payment Service, Pay Anyone
Service or Payment Processing Service on at least as favorable
terms as those provided by Chopper or any its Affiliates to any
Person reselling or receiving a comparable service. In
determining the price, level of service and other terms of the
Xxxx Presentment and Payment Service, Pay Anyone Service or
Payment Processing Service to be provided to FDC and its
Affiliates, Chopper shall take into account (i) the anticipated
volumes, (ii) the service support levels to be provided, (iii)
the marketing commitments involved and (iv) any exclusivity
arrangements and minimum revenue commitments either of the
parties or their respective Affiliates are bound by.
5. Term. This Agreement shall be effective on the Effective Date and
shall continue for a period of five (5) years (the "Term"), unless
earlier terminated as set forth herein or otherwise extended by
agreement of the parties.
6. Termination.
6.1 Change of Control. FDC may immediately terminate this Agreement if
Chopper or any of its Affiliates enters into a transaction with a
Specified Processor or any of its Affiliates which results in the
Specified Processor or any of its Affiliates acquiring Chopper in
connection with a Change of Control (a "Chopper Acquisition");
provided, however, that in the event FDC elects to terminate this
Agreement pursuant to this Section 6.1, then FDC shall be required to
pay promptly 50% of the sum of all future Minimums payable pursuant to
Section 3.2. Notwithstanding the foregoing, in the event of a Chopper
Acquisition, Section 3.1 shall immediately terminate.
6.2 Acquisition. FDC may terminate this Agreement if Chopper or any of its
Affiliates enters into a transaction with a Specified Processor or any
of its Affiliates that results in Chopper or any of its Affiliates
owning fifty percent (50%) or more of the Voting Stock of the Specified
Processor or fifty percent (50%) or more of the consolidated assets of
the Specified Processor (any such transactions being a "Specified
Processor Acquisition");
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provided, however, that in the event FDC elects to terminate this
Agreement pursuant to this Section 6.2, then FDC shall be required to
pay promptly 50% of the sum of all future Minimums payable pursuant to
Section 3.1. Notwithstanding the foregoing, in the event of a
Specified Processor Acquisition, Section 3.1 shall immediately
terminate.
6.3 Consequences. The following provisions shall survive the termination of
this Agreement: Sections 7, 8, 9, 10, 11, and 13, and any payment
obligations set forth in Section 3.2 arising prior to the effective
date of any such termination.
7. Confidentiality.
7.1 Definition of Confidential Information. "Confidential Information"
shall mean any information or materials that could reasonably be
considered confidential and disclosed by either party in any form or
medium and whether or not designated either orally, visually or in
writing as confidential (or like designation) at the time of
disclosure, including any data or information that is competitively
sensitive material, and not generally known to the public, including
products, planning information, marketing strategies, plans, finance,
operations, customer relationships, customer profiles, sales estimates,
business plans, and internal performance results relating to the past,
present or future business activities of a party, their respective
Affiliates and the customers, clients and suppliers of any of the
foregoing, and the nature and terms of this Agreement.
7.2 Non-Disclosure Obligation. Each party to this Agreement shall:
(a) safeguard the confidentiality of the disclosing party's
Confidential Information, exercising at least the same degree of
care as it would with its own Confidential Information of a
similar nature, but never less than reasonable care;
(b) hold in confidence, and not disclose or reveal to any Person, any
Confidential Information disclosed under this Agreement without
the clear and express prior written consent of a duly authorized
representative of the disclosing party; and
(c) not use or disclose any of the Confidential Information for any
purpose at any time, other than for the limited purpose of
performance under this Agreement; and
(d) upon the expiration or termination of this Agreement for any
reason, promptly return to the disclosing party all Confidential
Information (and any copies thereof) in its possession.
7.3 Exclusions. Notwithstanding the foregoing Section 7.2, the parties'
obligations respecting confidentiality shall not apply to any
particular information of a party that the other party can demonstrate:
(a) was, at the time of disclosure to it, in the public domain;
(b) after disclosure to it, is published or otherwise becomes part of
the public domain through no fault of the receiving party and no
known fault of the third party;
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(c) was in the possession of the receiving party at the time of
disclosure to it without being subject to another confidentiality
agreement;
(d) was received after disclosure to it from a third party who had a
lawful right to disclose such information to it;
(e) was independently developed by the receiving party without
reference to Confidential Information of the furnishing party;
(f) was required to be disclosed to any regulatory body having
jurisdiction over FDC or Chopper or any of their respective
clients; or
(g) that disclosure is necessary by reason of legal, accounting or
regulatory requirements beyond the reasonable control of the
receiving party.
7.4 In the case of any disclosure pursuant to Section 7.3(f) or 7.3(g), to
the extent practicable, the disclosing party shall give prior notice to
the other party of the required disclosure and shall use commercially
reasonable efforts to obtain a protective order or an appropriate
confidentiality agreement covering such disclosure. If such a
protective order is obtained, such information shall continue to be
deemed to be Confidential Information.
7.5 Irreparable Harm. Each party acknowledges that if it breaches (or
threatens to breach) its obligations under this Section 7, the other
party will suffer immediate and irreparable harm, it being acknowledged
that legal remedies are inadequate. Accordingly, if a court of
competent jurisdiction should find that a party has breached (or
threatened to breach) any such obligations, such party shall not oppose
the entry of an appropriate order compelling performance by such party
and restraining it from any further breaches (or threatened breaches).
8. Representations, Warranties and Covenants.
8.1 By Chopper. Chopper represents, warrants and covenants to FDC as
follows:
(a) Chopper is a corporation, duly organized, validly existing and in
good standing under the laws of the State of Delaware;
(b) Chopper has full power and authority to execute, deliver and
perform this Agreement;
(c) this Agreement has been duly authorized, executed and delivered
by Chopper and is the legal, valid and binding obligation of
Chopper in accordance with its terms; and
(d) Chopper shall perform all of its obligations set forth herein in
a professional and workmanlike manner in accordance with the
highest applicable industry standards.
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8.2 By FDC. FDC represents, warrants and covenants to Chopper as follows:
(a) FDC is a corporation, duly organized, validly existing and in
good standing under the laws of the State of Delaware;
(b) FDC has full power and authority to execute, deliver and perform
this Agreement;
(c) this Agreement has been duly authorized, executed and delivered
by FDC and is the legal, valid and binding obligation of FDC in
accordance with its terms; and
(d) FDC shall perform all of its obligations set forth herein in a
professional and workmanlike manner in accordance with the
highest applicable industry standards.
9. Indemnification.
9.1 By Chopper. Chopper shall indemnify, defend and hold FDC, its
Affiliates and their respective directors, officers, employees and
agents (collectively, the "FDC Indemnified Persons") harmless from and
against and in respect of any and all claims, demands, losses, costs,
expenses, obligations, liabilities, damages, recoveries and
deficiencies, including interest, penalties, court costs and attorneys'
fees (collectively, "Losses"), that any FDC Indemnified Person shall
incur or suffer, that arise, result from, or relate to:
(a) any infringement, misappropriation or violation of any issued
United States patent or any copyright, trade secret or other
intellectual property rights (collectively, "Infringement
Claims") asserted by any third Person against any FDC Indemnified
Person relating to the services or products provided by Chopper
or its Affiliates pursuant to this Agreement; and
(b) any claim by any third Person relating to the services or
products provided by Chopper or its Affiliates pursuant to this
Agreement, unless, and to the extent that, such claim arises, or
is attributable to, the negligence, breach of contract, or
unlawful act of FDC or its Affiliates.
9.2 By FDC. FDC shall indemnify, defend and hold Chopper, its Affiliates
and their respective directors, officers, employees and agents
(collectively, the "Chopper Indemnified Persons") harmless from and
against and in respect of any and all Losses that any of Chopper
Indemnified Persons shall incur or suffer, that arise, result from, or
relate to:
(a) any Infringement Claim asserted by any third Person against any
Chopper Indemnified Person relating to the services or products
provided by FDC to Chopper or its Affiliates pursuant to this
Agreement; and
(b) any claim by any third Person relating to the services or
products provided by FDC and its Affiliates pursuant to this
Agreement, unless, and to the extent that,
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such claim arises, or is attributable to, the negligence, breach
of contract, or unlawful act of Chopper or its Affiliates.
9.3 Third Party. If any indemnifiable claim by a third Person is made
against any indemnified Person, such indemnified Person shall promptly
provide written notice, as applicable, to Chopper or FDC of such claim;
provided that the failure to give such notice shall not affect any
rights of such indemnified Person hereunder except to the extent
Chopper or FDC, as applicable, is materially prejudiced by such failure
to give notice. By delivering written notice to such indemnified Person
within 15 days after receipt of such indemnified Person's notice,
Chopper, or FDC may, as applicable, or upon written request of such
indemnified Person shall, assume the defense and/or settlement of such
claim at its sole expense through counsel reasonably satisfactory to
such indemnified Person, provided that:
(a) Chopper or FDC, as applicable, shall not permit any lien,
encumbrance or other adverse charge upon any asset of such
indemnified Person;
(b) Chopper or FDC, as applicable, shall permit such indemnified
Person to participate in such settlement or defense through
counsel selected by such indemnified Person at such indemnified
Person's expense; and
(c) Chopper or FDC, as applicable, shall agree to promptly reimburse
such indemnified Person for the full amount of its liability
after final determination to the claimant provided such liability
is indemnifiable under Section 9.
(d) If Chopper or FDC, as applicable, shall not have employed counsel
to defend such claim or if such indemnified Person shall have
reasonably concluded (with the written advice of counsel) that
the position of such indemnified Person and Chopper or FDC, as
applicable, may be in conflict, Chopper or FDC, as applicable,
shall not have the right to direct the defense of any such claim
on behalf of such indemnified Person and the reasonable legal and
other expenses incurred by such indemnified Person shall be borne
by Chopper or FDC, as applicable. No settlement of a claim that
involves a remedy other than the payment of money by Chopper or
FDC, as applicable, shall be entered into by Chopper or FDC, as
applicable, without the prior written consent of the indemnified
Party, which consent shall not be unreasonably withheld or
delayed.
10. Limitation of Liability.
10.1 A party's liability to the other party or any other Person for damages,
injuries, losses, costs or expenses of any kind, however caused, based
on or arising from or in connection with this Agreement, any
termination hereof, the subject matter hereof, the performance (or
non-performance) of any service or obligation hereunder, whether
arising in contract or tort (including as a result of negligence or
strict liability), and whether or not such party shall have been
informed, or might have anticipated the possibility of any such damage,
loss, cost or expense (collectively, "Losses and Expenses"), shall be
limited to the direct
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damages actually incurred by such party or Person and consequential
damages and lost profits incurred by either party to the extent
provided for pursuant to Section 11; provided that the aggregate
amount required to be paid by a party hereto for all such Losses and
Expenses shall not exceed $100,000,000. The foregoing limitations
shall not apply to:
(a) payment obligations of the parties; or
(b) a breach of Section 7.
10.2 Mitigation. Each party shall use reasonable efforts to mitigate
damages for which the other party is responsible.
10.3 Limitation of Actions . Neither party may assert any cause of action
against the other party (other than third party claims) under this
Agreement that accrued more than one (1) year prior to:
(a) the filing of a suit (unless arbitration proceedings based on the
same factual allegation of facts were commenced within one year
of the accrual of such cause of action); or
(b) the commencement of arbitration proceedings alleging such cause
of action.
10.4 Express Allocation of Risks. The parties expressly acknowledge that the
limitations contained in this Agreement represent the express agreement
of the parties with respect to the allocation of risks between the
parties. The parties acknowledge that but for the limitations contained
in this Agreement, the parties would not have entered into this
Agreement.
11. Exclusion of Damages. NOTWITHSTANDING ANY OTHER PROVISION TO THE
CONTRARY SET FORTH IN THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY,
ANY OF THEIR AFFILIATES OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES OR AGENTS BE LIABLE UNDER ANY THEORY OF TORT, CONTRACT,
STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY LOST
PROFITS, EXEMPLARY, PUNITIVE, SPECIAL, INCIDENTAL, INDIRECT OR
CONSEQUENTIAL DAMAGES, EACH OF WHICH IS HEREBY EXCLUDED BY AGREEMENT OF
THE PARTIES REGARDLESS OF WHETHER OR NOT EITHER PARTY OR ANY OTHER SUCH
ENTITY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
NOTWITHSTANDING THE FOREGOING, RECOVERY MAY BE MADE OF: (I) LOST PROFIT
AND CONSEQUENTIAL DAMAGES INCURRED BY EITHER PARTY AS A RESULT OF A
BREACH OF SECTION 7; AND (II) LOST PROFITS ONLY FOR
BREACHES OF SECTIONS 2.1 AND 3.1.
12. Compliance with Laws. Each party shall comply with all applicable laws
and regulations in its performance under this Agreement and have
obtained all permits or licenses or registrations required to perform
hereunder.
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13. Miscellaneous Terms.
13.1 Further Assurances. Each party hereto agrees to cooperate with the
other party, at such other party's request and at such other party's
expense, to execute any and all documents or instruments, or to obtain
any consents, in order to assign, transfer, perfect, record, maintain,
enforce or otherwise carry out the intent of the terms of this
Agreement.
13.2 Delays and Omissions. Except with respect to Section 10.2, no delay or
omission to exercise any right, power or remedy accruing to a party
upon any breach or default of a party under this Agreement shall impair
any such right, power or remedy of any such party nor shall it be
construed to be a waiver of any such breach or default, or an
acquiescence therein, or of any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any
kind or character on the part of any such holder of any provisions or
conditions of this Agreement must be made in writing and shall be
effective only to the extent specifically set forth in such writing.
All remedies, under this Agreement shall be cumulative and not
alternative.
13.3 Amendments. Except as otherwise expressly provided herein, the
provisions of this Agreement may be amended only by a writing signed
by the parties hereto.
13.4 Successors and Assigns. Except as otherwise expressly provided herein,
all covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto shall bind and inure to the benefit
of the respective successors and permitted assigns of the parties
hereto, whether so expressed or not.
13.5 Final Agreement. This Agreement, together with those documents which
are schedules and exhibits hereto, constitute the final agreement of
the parties concerning the matters referred to herein and therein, and
supersedes all prior and contemporaneous agreements and understandings
concerning the matters referred to herein and therein.
13.6 Severability. Whenever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of this Agreement.
13.7 Descriptive Heading. The descriptive headings of this Agreement are
inserted for convenience of reference only and do not constitute a
part of this Agreement.
13.8 Notices. Any notices required, desired or permitted to be given
hereunder, shall be delivered personally or sent by overnight courier
to the following addresses (or to such other address as each party may
specify in a notice given hereunder) or transmitted by facsimile
transmission (with such transmission promptly confirmed by writing
delivered personally or by overnight courier) and shall be deemed to
have been received on the day
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of personal delivery, one business day after delivery to the overnight
courier service or, in the case of facsimile transmission, when
confirmation of such facsimile is received other than by automatic
means:
If to FDC:
First Data Corporation
0000 Xxx Xxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Chairman
Facsimile: (000) 000-0000
with a copy to:
First Data Corporation
0000 Xxx Xxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with an additional copy to:
Sidley & Austin
Bank Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
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If to Chopper:
Chopper Corporation
0000 X. Xxxxx Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Email: xxxxxx@xxxxxxxxx.xxx
with a copy to:
Chopper Corporation
0000 X. Xxxxx Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Email: xxxxxxxx@xxxxxxxxx.xxx
with an additional copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
0000 Xxxxxxxx Xxx.
Xxxxx 000
Xxxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
Xxxxxxx Xxxxxxxxx
Facsimile: (000) 000-0000
13.9 Dispute Resolution.
(a) In the event of a Dispute, the parties shall resolve the same in
accordance with the terms set forth in Exhibit 13.9(a).
(b) Notwithstanding anything to the contrary set forth herein,
neither party shall be required to submit any dispute or
disagreement regarding the interpretation of any provision of
this Agreement, the performance by either party of such party's
obligations under this Agreement or a default hereunder to the
mechanisms set forth in Section 13.9(a), if such submission would
solely be seeking equitable relief. Any such judicial proceeding
seeking equitable relief shall be brought only in a federal or
state court located in Delaware.
(c) Except as necessary in a court proceeding to enforce the
arbitration provision in Section 13.9(a) or to confirm, vacate,
modify or correct an award rendered
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thereunder, neither a party nor an arbitrator may disclose the
existence, content, or results of any arbitration held pursuant
to Section 13.9(a) without the prior written consent of all
parties to this Agreement. In any judicial proceeding brought
pursuant to Section 13.9(a) or 13.9(b), each party shall seek
orders from the court that would seal or otherwise protect the
confidentiality of the judicial and arbitration proceedings to
the maximum extent possible.
13.10 Governing Law. THE VALIDITY, MEANING AND EFFECT OF THIS AGREEMENT SHALL
BE DETERMINED IN ACCORDANCE WITH THE LAWS OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN THAT STATE.
13.11 Execution in Counterparts. This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be
deemed an original, and such counterparts together shall constitute one
instrument.
13.12 Assignment and Change of Control. This Agreement may not be assigned or
transferred by either party without the other party's prior written
consent, which consent shall not be unreasonably withheld or delayed,
except that, subject to Sections 6.1 and 6.2, this Agreement may be
assigned by operation of law pursuant to a merger or consolidation.
13.13 Independent Contractor. The relationship of the parties shall be
solely that of independent contractor and not that of a joint venture,
partnership, or any other joint relationship.
13.14 Press Release; Public Announcements. Neither party or their respective
Affiliates shall make any reference to the other party or its
Affiliates directly or indirectly in any press release or public
announcement without such other party's prior written consent, which
consent shall not be unreasonably withheld or delayed.
13.15 Audits. (a) Audits of FDC. Chopper may cause an audit to be made, at
Chopper's expense, of FDC's applicable records in order to verify the
performance of any provision contained herein. Any such audit shall be
conducted only by a third party independent certified public accountant
(other than on a contingency fee basis) after prior written notice to
FDC, and shall be conducted during regular business hours at FDC's
offices and in such a manner as not to interfere with FDC's normal
business activities. In no event shall an audit be made hereunder more
frequently than once annually. The results of any such audit shall be
subject to the nondisclosure obligations set forth in this Agreement.
In the event that Chopper makes any claim against FDC with respect to
such audit, Chopper hereby agrees to make available to FDC, upon
request, the detailed results of the audit as prepared for Chopper by
its accountant.
(b) Audits of Chopper. FDC may cause an audit to be made, at FDC's
expense, of Chopper's applicable records in order to verify the
performance of any provision contained herein. Any such audit shall be
conducted only by a third party independent certified public accountant
(other than on a contingency fee basis) after prior written
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notice to Chopper, and shall be conducted during regular business
hours at Chopper's offices and in such a manner as not to interfere
with Chopper's normal business activities. In no event shall the
audits be made hereunder more frequently than once annually. The
results of any such audit shall be subject to the nondisclosure
obligations set forth in this Agreement. In the event that FDC makes
any claim against Chopper with respect to such audit, FDC hereby
agrees to make available to Chopper, upon request, the detailed
results of the audit as prepared for FDC by its accountant.
[REMAINDER LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
CHOPPER CORPORATION
By:
----------------------------------------------
Name:
Title:
FIRST DATA CORPORATION
By:
----------------------------------------------
Name:
Title:
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EXHIBIT 13.9(a)
---------------
DISPUTE RESOLUTION PROCEDURES
Any controversy or claim arising out of or relating to this Agreement,
or the breach thereof, except claims for equitable relief, shall be settled by
arbitration in the State of Delaware The arbitration shall be administered by
the American Arbitration Association ("AAA") in accordance with its Commercial
Arbitration Rules, and shall be heard by a panel of three (3) arbitrators
selected in accordance with these Rules. After a demand for arbitration is made,
each party may conduct two (2) party and two (2) non-party depositions and may
further request discovery through up to thirty (30) document requests, twenty
(20) written interrogatories, and ten (10) requests for admission, and/or such
other further discovery as permitted by the arbitration panel upon request and
for good cause shown. The arbitrators may awarded damages, except the
arbitrators will have no authority to award punitive or other damages not
measured by the prevailing party's actual damages unless required by statute.
Each party shall be responsible for its own costs and expenses, except that the
arbitrators' compensation shall be taxed against the losing party. Judgment on
the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. Any judicial proceeding to enforce these Dispute
Resolution Procedures or to confirm, vacate, modify or correct an award rendered
hereunder, shall be brought in a federal or state court located in the State of
Delaware.
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