EXHIBIT 10.8
AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered this 18th day of March,
1998, by and between Paymentech Merchant Services, Inc., formerly known as First
USA Merchant Services, Inc. ("Paymentech"), and BankFirst ("BankFirst").
WITNESSETH:
WHEREAS, Paymentech performed credit card processing services for
Electronic Communications Corporation ("ECC") and/or BankFirst and its merchant
customers for a period through March 6, 1998; and
WHEREAS, on November 24, 1997, BankFirst filed a lawsuit in the Chancery
Court for Xxxxxx County, Tennessee, against ECC and Xxxxx Xxxxxxx, bearing Case
No. 00-00-000 (the "Lawsuit"), and on December 29, 1997, BankFirst filed an
Amended Verified Complaint in the Lawsuit joining Paymentech as a Defendant; and
WHEREAS, Paymentech has filed a Counterclaim against BankFirst and a
Cross-Claim against ECC in the Lawsuit; and
WHEREAS, while performing processing services for BankFirst, Paymentech
mistakenly overpaid BankFirst the total sum of $4,395,835.90, as more
particularly shown on Exhibit 1 attached hereto, and those overpayments were
reported by BankFirst to First USA; and
WHEREAS, the Amended Verified Complaint alleges that based on an interim
accounting, through November 28, 1997, Paymentech made unauthorized and
unreported deductions from wire transfers to BankFirst in the aggregate amount
of $544,393; and the Counterclaim filed by paymentech alleges that in performing
processing services, Paymentech inadvertently overpaid BankFirst the total sum
of $3,967,907.77 (now adjusted to $3,967,887.77); and
WHEREAS, BankFirst acknowledges that it received overpayments from
Paymentech, as reported by BankFirst to Paymentech, and is willing to repay that
portion of the overpayments net of certain amounts as herein specified to
Paymentech pending the resolution of the Lawsuit based upon the terms and
provisions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
agreements of the parties set forth below, it is agreed as follows:
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1. Immediately upon the execution of this Agreement, BankFirst shall pay
Paymentech, by wire transfer, the total sum of $3,088,245.01. The amount to be
wire transferred represents the total amount of the overpayments as certified by
Paymentech and as set forth on Exhibit 1 in the amount of $4,395,835.90, less a
wire transfer which was returned by BankFirst on January 7, 1998 in the amount
of $427,948.13, less net debits in the total amount of $253,957.78 sent by
Paymentech to BankFirst on December 30, 1997, and December 31, 1997, less fees
reported by Paymentech to have been collected by Paymentech and owed to
BankFirst as of January 31, 1998 in the amount of $81,291.98, and less the total
sum of $544,393.00 which is the amount of the alleged unauthorized wire
transfers as set forth in Exhibit I to the Amended Verified Complaint.
2. In order to induce BankFirst to make the wire transfer described in
paragraph 1 above, Paymentech hereby makes the following certifications to
BankFirst:
(a) The overpayments reflected in Exhibit 1 attached hereto were
wire transferred to BankFirst in error. These wire transfers were duplicate
payments of amounts already paid to BankFirst or its merchants and, as such, the
amounts wired in error do not rightfully belong to BankFirst.
(b) The Automated Clearing House ("ACH") debits reflected on Exhibit
2 attached hereto were sent to BankFirst by Paymentech in order to recoup a
portion of the amounts wired in error, and the debits as indicated on attached
Exhibit 2 were not accepted by BankFirst thereby reversing the indicated debits.
The only debits which have reached funds of BankFirst are in the net aggregate
amount of $253,957.78, as set forth in Exhibit 2. No other debits have been
initiated by Paymentech to collect any of the overpayments, and there have been
no other charges made against any accounts or funds of BankFirst to collect any
of the overpayments.
3. BankFirst acknowledges that the funds being retained by BankFirst in
the amount of $544,393.00 are being retained only as an exercise of BankFirst's
claimed setoff rights against amounts claimed in the Lawsuit. If the final
judgment in the Lawsuit is not in favor of BankFirst against Paymentech, or if
such judgment is less than the amount being retained by BankFirst, upon the
judgment becoming final, BankFirst will immediately return all funds being
retained by it, with any interest and other amounts as may be awarded by the
Court to Paymentech. Also, by retaining $544,393, BankFirst does not waive any
right to amend the Amended Verified Complaint to seek a recovery against
Paymentech in a higher amount. Likewise, Paymentech does not waive any right to
amend its Counterclaim to assert any claim not resolved in this Agreement.
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4. The parties acknowledge that there will be additional bank account
debits sent by Paymentech to BankFirst related to the processing of BankFirst's
merchants' transactions, especially relating to the merchant's chargebacks and
discount fees. Therefore, the receipt by BankFirst of such debits in the
ordinary course of business will be considered an exception to the
certifications set forth in paragraph 2 above. However, this Agreement does not
preclude or otherwise affect any right of BankFirst or its merchant customers to
contest chargebacks. Furthermore, this Agreement does not address processing
fees charged by Paymentech for the months of February and March, 1998, or
thereafter, and Paymentech's collection of fees for that period from BankFirst's
merchants and any resulting amounts owed by one party to the other.
5. Paymentech has given BankFirst credit for net debits in the amount of
$253,957.78, which were sent by Paymentech to BankFirst via ACH. BankFirst
agrees that it will take no action to return these debits to Paymentech since
BankFirst has been given credit for the full amount of the original net debits.
6. Paymentech agrees that it will not process any further ACH debits to
BankFirst, except for those contemplated by paragraph 4 above.
7. Paymentech hereby releases BankFirst from any claims associated with
the overpayments (except as to the retained funds in the amount of $544,393.00),
including any interest on such overpayments, and Paymentech's Counterclaim
against BankFirst will be amended to reduce the claim from $3,967,907.77 to
$544,393.00; provided, however, such release shall not be construed to release
any claim by Paymentech for prejudgment interest on the funds being retained by
BankFirst, nor shall it operate as a release of any other claims asserted (or
which may hereafter be asserted consistent with this Agreement) by Paymentech in
its Counterclaim in the Lawsuit. BankFirst hereby releases Paymentech from any
claims associated with BankFirst's retention of $81,291.98 from the overpayment
amount, as referenced in paragraph 1 above.
8. Net ACH transfers from Paymentech to BankFirst in the amount of
$98,356.53 on November 26, 1997 and $320,259.49 on November 28, 1997, resulted
in the issuance of duplicate credits to BankFirst's merchant customers.
BankFirst subsequently reversed the second credit to all affected merchants and
as of the date of this Agreement no merchants have asserted a claim against
BankFirst for such action. Paymentech agrees to indemnify and hold BankFirst
harmless from any losses and expenses from any claims asserted against BankFirst
by its merchants resulting from the reversal of the above-described credits.
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9. This Agreement may only be amended in writing. Any disputes concerning
the interpretation of this Agreement or the parties' rights and responsibilities
hereunder shall be resolved in the Lawsuit. This Agreement may be executed on
facsimile copies hereof and by signatures appearing in the facsimile copies.
Each party represents that the person signing this Agreement has been duly
authorized to do so by any and all required corporate action of such party.
10. The initial WHEREAS provision of this Agreement is not intended to
affect or in any manner waive the position of Paymentech as stated in its
Answer, Counterclaim and Cross-Claim in the Lawsuit as to the person or entity
to which it was providing credit card processing services.
IN WITNESS WHEREOF, the parties have executed this Agreement by their duly
authorized representatives on the day and date first written above.
BANKFIRST
BY: /s/ Xxxxx Xxxxx
--------------------------
ITS: Sr. V. P.
PAYMENTECH MERCHANT
SERVICES, INC.
BY: /s/ Xxxxx X. Xxxxxxx
--------------------------
ITS: Sr. Director
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Exhibit 1
-------------------------------------------------------------
Date Wires Sent
---- ----------
1-Dec 2,621.64
3-Dec 467,218.71
3-Dec 737,204.45
4-Dec 125,313.90
5-Dec 128,815.25
8-Dec 103,389.68
9-Dec 140,286.21
10-Dec 439,165.45
11-Dec 126,634.98
12-Dec 104,476.07
15-Dec 111,591.70
16-Dec 121,309.49
17-Dec 389,952.17
18-Dec 98,558.65
19-Dec 107,276.49
22-Dec 82,281.58
23-Dec 90,070.48
24-Dec 328,782.66
26-Dec 111,382.30
29-Dec 89,083.52
30-Dec 82,472.41
31-Dec 427,948.13
4,395,835.90
Returned wire 1-7-98 (427,948.13) 3,967,887.77
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Exhibit 2
-------------------------------------------------------------
Returned by
Bank
Debits Credits as of 3/16/98
------ ------- -------------
127,658.18 (1,383.96)
128,187.63 (502.07)
192,243.54 (109.38) x
194,923.41 (1,860.13) x
30,817.08 (1,066.92) x
19,812.14 (17.53) x
20,580.30 x
17,919.73 (527.64) x
29,336.44 (10.88) x
7,813.63 (4,036.85) x
11,023.70 x
5,457.62 x
6,326.42 (250.70) x
22,552.85 (218.58) x
3,087.82 (44.00) x
3,672.65 (188.56) x
2,160.11 (69.13) x
12,453.03 (54.25) x
1,058.64 (441.56) x
3,935.90 (45.00) x
914.15 (531.60) x
439.22 (29.85) x
5,844.33 x
260.76 (249.09) x
175.68 x
1238.04 (288.66) x
1,839.08 (147.74) x
3,735.08 x
1,063.30 (67.50) x
120.00 (29.07) x
(29.73) x
200.00 (503.38), x
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Page 1
Exhibit 2
-------------------------------------------------------------
Returned by
Bank
Debits Credits as of 3/16/98
------ ------- -------------
3,066.25 x
(93.86) x
2,171.90 x
380.63 (30.00)** x
(104.64) x
7,717.48 (540.34) x
200.00 x
79.25 (577.46) x
431.91 (258.30) x
1,957.82 (799.56) x
(851.11) x
793.13 (1,086.24) x
(2,119.07) x
(100.00) x
(95.00) x
(369.78) x
(209.78) x
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**Credit not returned
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