Exhibit 10.10
MEMBER SERVICE PROVIDER SALES AND SERVICE
CREDIT CARD PROCESSING AGREEMENT
THIS MEMBER SERVICE PROVIDER CREDIT CARD PROCESSING AGREEMENT (this
"Agreement") is made and entered into this 28th day of January, 2000, by and
among NOVA Information Systems, Inc., a Georgia corporation with its principal
place of business at Xxx Xxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, XX 00000
("NOVA"), IMPERIAL BANK, a principal member of VISA U.S.A. Inc. and MasterCard
International Incorporated and a bank chartered under the laws of the State of
California with its business at 0000 Xxxxxxxxx Xxxxx Xxxxxxxxx, Xxxxxxx Xxxxx,
XX 00000 ("Member"), and Integrated Merchant Services, Inc. with its principal
place of business at 000 Xxxx Xxxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxx Xxxxx, Xxxxxxx
00000 ("MSP").
PURPOSE OF AGREEMENT: The purpose of this agreement is to set forth the
terms and conditions under which MSP shall refer to NOVA and Member prospective
merchants meeting the qualifications of NOVA and Member for the purpose of
providing to such merchants credit card and debit card processing services, and
to set forth the referral fees NOVA and Member shall, from time to time, pay to
MSP for such referrals and other services, as described herein.
NOW, THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable consideration, the receipt and sufficiency of which
hereby is acknowledged and intending to be legally bound hereby, MSP, NOVA and
Member agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
A. "Acceptable Merchant" shall mean a merchant who does not
perform the services or sales described in the Prohibited
Merchants section of Schedule A, and who is acceptable to NOVA
and Member, as determined in their sole discretion, based upon
a credit review of the merchant.
B. "Assessment Fee" shall mean the fee that is collected from a
Referred Merchant on behalf of the Credit Card issuer for a
Transaction.
C. "Cardholder" shall mean (i) the person in whose name a Credit
Card has been issued, and shall also mean (ii) any person who
possesses and uses a Credit Card and who purports to be the
person in whose name the Credit Card was issued or whose
signature appears on the Credit Card as an authorized user.
D. "Cause" shall mean the occurrence of any one or more of the
following: (i) any failure by MSP to comply in all material
respects with the provisions of this Agreement; (ii) any
material failure by MSP to follow the credit policies and
procedures established by NOVA and Member from time to time,
(iii) any failure by MSP to comply with the Rules and all
applicable laws and regulatory requirements, whether Federal
or state, (iv) any intentional misrepresentation by an
employee, officer or director of MSP in connection with the
referral of a prospective merchant or an application by a
prospective merchant for services
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hereunder; (v) any failure by MSP to advise NOVA and Member of
adverse or material changes in any Merchant's financial
condition of which MSP becomes aware during the Merchant's
association with NOVA and Member; (vi) the financial
insolvency or bankruptcy of MSP; (vii) the occurrence of any
event or any action by MSP which NOVA or Member determine in
good faith to constitute unsound business practices or which
might impose a risk of financial loss to NOVA or Member; and
(viii) any failure by MSP to provide appropriate sales agent
support (including without limitation merchant application
review, site inspection, monthly reporting, terminal support,
commission payment, etc.).
E. "Chargeback" shall mean a Transaction charged back by a
Cardholder pursuant to the Rules.
F. "Credit-Card" shall mean a (i) VISA card or other card bearing
the symbol(s) of VISA U.S.A. Inc. or VISA International Inc.
(including VISA Gold cards) or (ii) a MasterCard(R) card or
other card bearing the symbol(s) of MasterCard International
Incorporated (including MasterCard Gold cards).
G. "Credit Card Associations" shall mean VISA U.S.A. Inc., VISA
International Inc., MasterCard International Incorporated and
any successor organization or association.
H. "Interchange Fee" shall mean the charge levied and collected
in accordance with the Rules with respect to Credit Card
transactions.
I. "MasterCard" shall mean MasterCard International Incorporated
(a Delaware corporation).
J. "Member" shall mean Imperial Bank (or a successor financial
institution and principal member of VISA and MasterCard to
whom the rights and obligations of Member hereunder may be
assigned by Imperial Bank).
K. "Merchant Agreement" shall mean a written contractual
agreement (in a form approved by NOVA and Member and
unaltered) executed among NOVA, Member and a Referred
Merchant, as referenced in Section 2.D hereof, for services
related to Credit Cards and Transactions. The form of Merchant
Agreement may be changed by NOVA and Member in their sole
discretion.
L. "Merchant Services" shall mean the credit card and debit card
processing services offered or provided by NOVA and Member (or
their designees) pursuant to Merchant Agreements.
M. "Merchant Operating Account" shall mean a deposit account
maintained by a Referred Merchant at a FDIC-insured financial
institution which is acceptable to NOVA and Member and is a
member of Automated Clearing House ("ACH").
N. "Referred Merchant" shall mean any seller of goods, services,
or both, referred to NOVA and Member by MSP, and which is a
party to a Merchant Agreement. During the term and subject to
the provisions of this Agreement, MSP shall provide to all
Referred Merchants the services described in Section 2. H
below.
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O. "Rules" shall mean the bylaws, rules, regulations and
procedures issued by a Credit Card Association or other card
issuer/licensor similar to MasterCard or VISA, as such bylaws,
rules, regulations and procedures may be amended or
supplemented from time to time.
P. "Sales Draft" shall mean a charge form or draft evidencing the
purchase by a Cardholder of goods or services at a Referred
Merchant location, by use of a Credit Card.
Q. "Transaction" shall mean the purchase or credit by a
Cardholder of goods or services at a Referred Merchant's
location, by use of a Credit Card.
R. "VISA" shall mean VISA U.S.A. Inc. (a Delaware corporation).
2. MERCHANTS AND MERCHANT AGREEMENTS.
A. Recruitment of Merchants. In accordance with the policies and
procedures set forth on Schedule A hereto, MSP shall use its
best efforts to locate, investigate and refer merchants MSP
believes to be likely candidates for Credit Card processing
relationships with NOVA and Member. MSP will market the
Merchant Services offered by NOVA and Member at its own
expense, in accordance with all Rules relating to third party
service providers and in accordance with all policies and
procedures of Member and NOVA (including without limitation
the pricing terms for Referred Merchants) as such policies and
procedures may be amended from time to time. Merchants
referred to NOVA and Member by MSP which enter into a Merchant
Agreement will have a direct business relationship with NOVA
and Member, and will be subject to the terms of the applicable
Merchant Agreement entered into by and among NOVA, Member and
Merchant. MSP shall not be a party to any Merchant Agreement
and MSP shall have no additional obligations imposed upon it
by any Merchant Agreement.
B. Trademarks and Logos. MSP will not use the name, trademarks,
service marks or logos of NOVA or Member without the express
prior written consent of such party. MSP acknowledges and
agrees that MasterCard and VISA are the sole and exclusive
owners of these respective trademarks and service marks, and
that MSP will not contest the ownership of such marks.
Additionally, MSP will use the VISA and MasterCard trademarks
and service marks only in accordance with the Rules and after
prior written approval of NOVA and Member (and the Credit Card
Associations, if required). MSP acknowledges and agrees that
the Credit Card Associations may at any time immediately and
without advance notice prohibit MSP from using the marks of
the Credit Card Association for any reason. Member must be
prominently identified by name and city on any program
materials describing the Merchant Services. MSP shall have no
authority to permit use of the VISA or MasterCard program
marks by any third party. Any solicitation material used by
MSP must clearly disclose that the merchant agreement is by
and among NOVA, Member and the individual merchant.
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C. Approval of Merchants. Member, or NOVA acting as its agent,
shall review all applications submitted by prospective
merchants referred by MSP. Member and NOVA each reserve the
right in their sole discretion to refuse to sign a Merchant
Agreement with any merchant referred by MSP.
D. Merchant Agreements. Merchant Agreements shall be on forms
provided by NOVA and Member and shall define the terms upon
which NOVA and Member will provide Merchant Services to
Merchant.
E. Merchant Reserves. Upon request MSP will assist NOVA and
Member in coordinating the implementation of such safeguards
as NOVA or Member determine is prudent or necessary to create
or require, with respect to any Referred Merchant, reserves,
holdbacks, deposits or other safeguards against merchant
losses. Without limitation as to additional or different
safeguards, NOVA or Member may require a Referred Merchant to
pay up to 100% of the funds deposited by a Referred Merchant
for up to six months or more.
F. Services Provided by NOVA. NOVA shall provide the following
services on behalf of Member, to MSP and the Referred
Merchants:
i. Network Authorization 24 x 7 x 365 toll-free Network
Help Desk;
ii. Merchant Enrollment Service, including new merchant
set-up and administration of credit policy;
iii. Chargeback and Retrieval Processing;
iv. Collections and Fraud Monitoring Service, and
v. Merchant Settlement Service, including Referred Merchant
statement processing and ACH file preparation (provided,
however, Member shall be responsible for effecting all
settlements of Transactions).
G. Optional Services Provided by NOVA. Upon the written election
of MSP, NOVA shall also provide and charge for (in accordance
with Schedule B) any one or more of the following services to
the Referred Merchants:
i. Referred Merchant Set-Up Service, including new merchant
set-up kit, telephone training and re-programming
assistance;
ii. Equipment Repair Service, including emergency swap-outs
and deployment and repair service;
iii. Merchant Supply Fulfillment Service and equipment
fulfillment service;
iv. 24 x 7 x 365 Customer Support including full Point of
Sale ("POS") Help Desk and Settlement Support;
v. Training Support, including MSP sales representative
training, product and service overviews and competitive
selling tips; and
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vi. Collateral and Marketing Materials, including merchant
user guides, newsletters, product brochures and
equipment templates.
H. Services Provided by MSP. In addition to the duties of MSP
described elsewhere in this Agreement, MSP shall provide the
following services on behalf of NOVA and Member to the
Referred Merchants:
i. Training. MSP shall provide to each Referred Merchant
necessary training in the procedures and Rules
applicable to the acceptance of Credit Cards, the
operation of terminal equipment and the use of NOVA
products and services. MSP shall initially train the
Referred Merchants, including, when appropriate,
distribution of a merchant set-up kit. MSP shall also
train new employees of the Referred Merchant as
necessary, at the discretion of the MSP, including
method of training; provided, however, that regardless
of the method of training employed by MSP, such training
shall comply with the provisions of this Agreement.
ii. Merchant Support. MSP shall provide reasonable ongoing
support to ensure Referred Merchants are continually
apprised of their customer service requirements and to
remedy any customer service problems encountered by such
Referred Merchants. MSP shall supervise such personnel
it may engage as employees or agents in activities
hereunder. The responsibility for all such personnel
shall be that of MSP only, including the responsibility
of assuring full compliance by all such personnel with
the terms and provisions of this Agreement.
I. Excluded Types of Merchants. MSP agrees that neither MSP nor
any of its affiliates, subsidiaries, or agents will actively
solicit any NOVA or Member merchant, or any merchant of a NOVA
subsidiary, affiliate, agent or customer for the purpose,
directly or indirectly, of providing or receiving Merchant
Services. MSP also agrees to follow the guidelines set forth
on Schedule A with respect to soliciting and referring
merchants. If MSP has any uncertainty as to whether a
particular merchant is covered by these restrictions or by
Schedule A, MSP will discuss the matter in good faith with
NOVA prior to proposing that such merchant enter into a
Merchant Agreement with NOVA and Member.
J. Adverse Information. During the term of this Agreement MSP
agrees to notify NOVA and Member promptly in writing if MSP
becomes aware of any information about the insolvency or
bankruptcy (voluntary or involuntary) or change in ownership
or business of any Referred Merchant, or if MSP becomes aware
of any other significant adverse information about
noncompliance with the Rules by a Referred Merchant, or any
information indicating that any Referred Merchant's acceptance
of Credit Cards is other than the bona fide sale of products
or services by such Referred Merchant.
K. Advertising/Sales Materials. All advertising and/or sales
materials used by MSP shall be in compliance with the Rules.
NOVA and Member shall give MSP notice of any noncompliance
that comes to the attention of such party.
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L. Information. MSP shall distribute to its sales
representatives, in a timely fashion, changes in operating
mode, and Rules received from NOVA or Member, that would
affect the manner in which the Merchant Services are marketed
by such representatives. MSP shall keep accurate records with
respect to Referred Merchants' inquiries, orders, transactions
and contacts which MSP makes pursuant to this Agreement. On
behalf of NOVA and Member, MSP will request and use reasonable
efforts to obtain and provide latest fiscal year business
balance sheet and profit and loss statement on Referred
Merchants and personal financial statements on principals, if
requested by NOVA or Member.
3. COMPLIANCE WITH RULES.
A. Registration. In connection with the services provided by MSP
under this Agreement, MSP has registered and executed all
applicable documents and agreements with VISA and MasterCard
and is in full compliance with the Rules. MSP further agrees
to the following:
i. maintain its registration with VISA and MasterCard and
fully comply with the terms of any documents and
agreements executed therewith;
ii. comply with all reporting requirements of MasterCard and
VISA;
iii. promptly give written notice to NOVA and Member of the
identity and location of all sales locations of MSP. MSP
acknowledges and agrees it may not delegate any of its
rights or obligations hereunder to any other person or
entity, except pursuant to a valid assignment complying
with the requirements set forth in section 9 below; and
iv. provide NOVA and Member with annual financial statements
(i.e., balance sheet and income statements), endorsed by
a duly authorized individual or principal owner of MSP
certifying the accuracy of the data contained therein,
by May 1 of each year.
B. Compliance with MasterCard Rules. In accordance with the
MasterCard Rules regarding member service providers, MSP
acknowledges and agrees as follows:
i. MSP understands and agrees to comply in all respects
with the MasterCard Rules (including without limitation
the Rules regarding member service providers);
ii. MSP acknowledges and agrees that MasterCard has the
right to enforce any provision of the MasterCard Rules
and to prohibit any conduct by MSP that creates a risk
of injury to MasterCard or that may adversely affect the
integrity of MasterCard's systems, information or both.
MSP agrees to refrain from taking any action that would
have the effect of interfering with or preventing an
exercise of such right by MasterCard; and
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iii. in the event of any inconsistency between any provision
of this Agreement and the MasterCard Rules, the
MasterCard Rules will be afforded precedence and shall
apply.
4. COMPENSATION TO MSP.
A. Processing Rates and Fees. NOVA, acting on its own behalf and
as Member's agent, shall pay to MSP as full consideration and
compensation for the performance of all MSP's duties and
obligations under this Agreement, any Referred Merchant
discount revenues and/or fees collected in excess of NOVA's
fees and other charges as set forth on Schedule B
(hereinafter, "Compensation"). Such Compensation shall be made
within thirty (30) days following the end of each month;
provided, however, NOVA shall use its best efforts to make
such payments within fifteen (15) days following the end of
each month. (For example, Compensation payable to MSP for
Referred Merchant revenues collected for March Transactions
shall be paid to MSP by April 30, but NOVA will attempt to pay
such revenues by April 15).
B. Pass-Through of Certain Fees. NOVA and Member reserve the
right to pass through to MSP certain fees or penalties imposed
by any Credit Card Association as a result of the activities,
acts or omissions of MSP. Additionally, MSP agrees to pay
promptly any fees or penalties imposed by the Credit Card
Associations with respect to MSP's registration as a service
provider for Member. MSP acknowledges that NOVA and Member, in
their discretion and in accordance with the terms of the
Merchant Agreements, may pass through to Referred Merchants
any fees or expenses related to implementing changes to
software/hardware requirements deemed necessary by the Credit
Card Associations or other service providers.
C. Period of Compensation. Payment of Compensation to MSP with
respect to a Referred Merchant shall terminate immediately
upon the termination of the respective Merchant Agreement. In
the event that this Agreement is terminated prior to the
termination of any Merchant Agreement, NOVA shall continue to
pay Compensation to MSP with respect to such Referred
Merchants for so long as the respective Merchant Agreement
continues in effect, except as otherwise set forth under this
Agreement.
D. Termination of Compensation. MSP's right to receive
Compensation under this Agreement shall terminate immediately
in the event that NOVA or Member terminates this Agreement in
accordance with Section 8(A). In addition, MSP's right to
receive Compensation under this Agreement shall terminate
immediately in the event that, during the term of this
Agreement (including any extensions or renewals hereof),
following the termination of this Agreement or during the term
of any Service Agreement (as defined herein) between NOVA and
MSP entered into pursuant to Section 9(A) of this Agreement,
MSP or any of its subsidiaries, affiliates, or agents,
directly or indirectly, solicits or contacts any Referred
Merchant, for the purpose, directly or indirectly, of
providing or receiving Merchant Services, or otherwise
encourages a Referred Merchant to terminate a Merchant
Agreement with NOVA and Member.
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5. DUE CARE AND LIABILITY.
MSP hereby agrees to indemnify and hold NOVA, Member, the Credit
Card Associations, the Referred Merchants and the members of the
Credit Card Associations harmless from and against any claim,
demand, loss, financial or otherwise, damage, liability or cost
(including reasonable legal fees and expenses), caused by or in any
way arising from: (i) any failure by MSP to fully comply with the
Rules and all other rules, regulations, policies and procedures of
NOVA, Member, MasterCard, VISA and any other similar Credit Card
licensor; (ii) any breach or default by MSP of this Agreement or any
other agreement between MSP and (a) NOVA, (b) Member or (c) any
Referred merchant; (iii) any negligent or wrongful act of MSP in
performing or failing to perform the obligations hereunder; or (iv)
any termination of this Agreement pursuant to Section 8 hereunder.
The obligations of MSP hereunder are not intended to cover typical
credit losses (including chargebacks) incurred by NOVA or Member as
a result of Referred Merchants' refusal or inability to pay, unless
such credit losses are incurred by NOVA or Member as a result of any
act or omission of MSP described in (i) - (iv) above. NOVA hereby
agrees to indemnify and hold MSP harmless from and against any
claim, demand, loss, financial or otherwise, damage, liability or
cost (including reasonable legal fees and expenses), resulting
primarily from the gross negligence or willful misconduct of NOVA in
performing its obligations hereunder.
6. GENERAL.
A. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia.
B. Entire Agreement. All Schedules and Exhibits attached to this
Agreement and the Rules are hereby made a part of this
Agreement for all purposes. This Agreement represents the
entire understanding among NOVA, MSP and Member with respect
to the matters contained herein and, except as otherwise
provided in this Agreement, it may be amended only by an
instrument in writing signed by each of the parties hereto.
C. No Partnership or Agency. Nothing in this Agreement shall be
deemed to constitute a partnership or joint venture between
the parties hereto or be deemed to constitute MSP as an agent
for NOVA or Member for any purpose whatsoever. MSP is an
independent contractor and not an employee of NOVA or Member.
D. Third Party Rights. This Agreement is solely for the benefit
of the parties hereto and nothing herein, express or implied.
shall be deemed to be for the benefit of any third party or
create any third party rights or standing to xxx.
E. Notices. Any notice required or permitted under this Agreement
shall be in writing and may be delivered by personal service
or by U.S. certified mail, return receipt requested and
postage prepaid. to the addresses of the parties set forth
below, or such other addresses as may be provided by written
notice to the other parties in accordance with the terms of
this notice provisions. Any such notice shall be effective
upon the earlier of (i) five days after deposit in the mail
properly addressed and postage prepaid or (ii) actual receipt.
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If to NOVA: NOVA Information Systems, Inc
Xxx Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: President & Chief Operating Officer
Facsimile No.: (000) 000-0000
With a copy to: General Counsel
(which shall not at same address
constitute notice)
If to Member: Imperial Bank
0000 Xxxxxxxxx Xxxxx Xxxxxxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
With a copy to: _________________________________
_________________________________
_________________________________
Attention:_______________________
If to MSP: Integrated Merchant Services, Inc.
000 Xxxx Xxxxxxxx Xxxxxx 0xx Xxxxx
Xxxxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
With a copy to: INTR
000 Xxxx Xxxxxxxx Xxxxxx 0xx Xxxxx
Xxxxxx Xxxxx, XX 00000
Attention: Xxxxxxx Xxxxx
F. Dispute Resolution. Any controversy, dispute or claim arising
out of, or in connection with this Agreement must be settled
by final and binding arbitration to be held in Atlanta,
Georgia in accordance with the rules of the American
Arbitration Association ("AAA"), as may be amended from time
to time (the "AAA Rules"). Judgment upon award rendered by the
arbitrators may be entered in any court: (i) having
jurisdiction thereof, (ii) having jurisdiction over the party
against whom enforcement thereof is sought, or (iii) having
jurisdiction over any such party's assets. The procedures and
law applicable during the arbitration of any controversy,
dispute or claim will be both the AAA Rules and the internal
substantive laws of the State of Georgia (excluding, and
without regard to, its or any other jurisdiction's rules
concerning any conflict of laws). In any arbitration pursuant
to this Agreement, the award of decision must be rendered by
at least a majority of the members of an arbitration panel
consisting of three (3) members, one of whom will be appointed
by each of the parties hereto. All arbitrators must be persons
who are not employees, agents or former employees or agents of
any party. In the event that any of the parties hereto fails
to appoint an arbitrator
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within thirty (30) days after submission of the dispute to
arbitration, such arbitrator will be appointed by the AAA in
accordance with the AAA Rules.
G. Force Majeure. Neither party shall be liable to the other for
any failure or delay in its performance of this Agreement in
accordance with its terms if such failure or delay arises out
of causes beyond the control and without the fault or
negligence of such party.
H. Waiver. Any waiver or delay by any party hereto in asserting
or exercising any right, shall not constitute a waiver of any
further or other rights of said party. If any part of this
Agreement shall be held to be invalid, illegal or
unenforceable, the validity, legality or enforceability of the
remainder of the Agreement shall not in any way be affected or
impaired thereby.
I. Attorney's Fees. In the event any party hereto is determined,
in connection with a final and binding arbitration pursuant to
Section 6.F above, to have breached this Agreement, then the
non-defaulting party shall be entitled to recover expenses
incurred in enforcing the provisions of this Agreement,
including reasonable attorneys' fees and costs.
J. Severability. If any provision of this Agreement is found
illegal, invalid or unenforceable, such finding will not
affect any other provision hereunder. This Agreement shall be
deemed modified to the extent necessary to render enforceable
the provisions hereunder, and to comply with the Rules.
7. TERM OF AGREEMENT. The term of this Agreement shall be for a period
of three (3) years commencing from the date of this Agreement.
Thereafter, this Agreement shall renew automatically for additional
successive one-year terms, unless any party hereto provides the
other parties written notice of intent not to renew this Agreement
at least ninety (90) days prior to the expiration of the then
current term. The terms of this Agreement shall remain in force with
respect to all Transactions processed hereunder and all Chargebacks,
fees and liabilities relative thereto.
8. TERMINATION.
A. Termination for Cause. Any party hereto may terminate this
Agreement upon a material breach or default hereunder by
another party if such default is not cured within (30) days of
receipt of written notice thereof from the non-breaching
party. NOVA or Member may also terminate this Agreement at any
time for Cause. This Agreement shall terminate automatically
upon the occurrence of either of the following: (i) the
termination of Member's MasterCard and VISA licenses and
membership; (ii) the termination of the NOVA/Member Agreement
(provided, NOVA will attempt to give MSP at least sixty (60)
days notice prior to termination), or (iii) the termination by
MasterCard or VISA of MSP's registration as a third party
service provider for Member.
B. Other Termination. NOVA or Member may, at its option,
terminate this Agreement immediately without notice to MSP in
the event of any one of the following events:
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i. the filing of a bankruptcy petition, insolvency,
inability to meet its debts (in the ordinary course of
business) or dissolution of MSP;
ii. MSP making an assignment by MSP for the benefit of its
creditors or an offer of settlement or extension to its
creditors generally;
iii. the appointment of a trustee, conservator, receiver or
similar fiduciary for MSP or for substantially all of
MSP's assets; or
iv. the occurrence of any material adverse change in the
nature or conduct of the business of MSP as carried on
at the date hereof.
C. Certain Post-Termination Rights. In the event of termination
of this Agreement, NOVA and Member shall have the right, in
addition to the other rights and remedies under this Agreement
and at law and in equity, to exercise a right of set-off
against Compensation or any other monies otherwise due to MSP
under this Agreement, for any amounts due to NOVA or Member
under this Agreement, and, in the event of termination of this
Agreement for cause, any damages suffered by NOVA or Member
hereunder and at law, then owing or which may thereafter
become owing. No termination of this Agreement shall affect
any Merchant Agreement that is in effect as of the time of
termination. After termination, MSP agrees to cooperate in all
reasonable respects with NOVA and Member throughout the
remaining term of each Merchant Agreement. MSP agrees that
neither MSP nor its affiliates, subsidiaries, or agents will,
directly or indirectly, solicit or contact any Referred
Merchant, for the purpose, directly or indirectly, of
providing or receiving Merchant Services, or otherwise
encourage any Referred Merchant to terminate a Merchant
Agreement in force with NOVA or Member for any reason after
the termination of this Agreement. Sections 4, 5, 6, 8.C, 10,
11, and 12 shall survive termination of this Agreement.
9. OPTION.
A. Service Agreement. NOVA shall have the option, in its sole
discretion, to offer to enter into a servicing only agreement
("Service Agreement") with MSP following termination of this
Agreement in order to enable MSP to continue servicing the
Referred Merchants and receive fees for such servicing
responsibilities. MSP shall have the right to decline any such
offer by NOVA to enter into a Service Agreement. Should NOVA
elect to exercise such option, NOVA and MSP shall negotiate in
good faith as to the terms and conditions of said Service
Agreement.
B. Compensation Buy-Out. NOVA shall have the option, in its sole
discretion, to offer to make a one-time payment to MSP to buy
out MSP's rights to receive Compensation for a Referred
Merchant or group of Referred Merchants under this Agreement
(the "Residual Buy-Out Payment"). NOVA may exercise such
option at any time during the term of this Agreement or
following termination of this Agreement. MSP shall have the
right to decline any such offer by NOVA to make a Residual
Buy-Out Payment.
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In the event that NOVA exercises such option, NOVA shall, in
its sole discretion, determine the amount of the Residual
Buy-Out Payment. Generally the Residual Buy-Out Payment will
fall within the range of twelve (12) to twenty-four (24) times
the average monthly Compensation based upon NOVA's review of a
number of factors including, but not limited to, the number
and type of Referred Merchants, the number of Transactions and
the average ticket amount for each Referred Merchant for the
preceding twelve (12) month period, the volume for each
Referred Merchant for the preceding twelve (12) month period;
the number of years the Referred Merchant(s) has processed
with NOVA; and any periods of inactivity the Referred
Merchant(s) has experienced during certain months of the year.
MSP acknowledges and agrees that this list of factors is not
exclusive and that the determination to buy out MSP's rights
to receive Compensation for a Referred Merchant or group of
Referred Merchants, as well as the determination of the
Residual Buy-Out Payment, are within NOVA's sole discretion.
C. Non-Solicitation Agreement. NOVA's entering into a Service
Agreement or making a Residual Buy-Out Payment to MSP pursuant
to this Section are contingent upon MSP entering into a
non-solicitation agreement ("Non-Solicitation Agreement") with
NOVA that shall provide that, for a period of five (5) years
from the date of execution of the Non-Solicitation Agreement
neither MSP nor any of its affiliates, subsidiaries, or agents
shall, directly or indirectly, solicit or contact any Referred
Merchant, for the purpose, directly or indirectly, of
providing or receiving Merchant Services.
10. ASSIGNMENT. This Agreement shall inure to the benefit of and be
binding upon the parties and their respective successors and
assigns. Notwithstanding the foregoing sentence, however, this
Agreement may not be assigned by MSP without the prior written
consent of NOVA and Member, and the receipt of all required consents
from the Credit Card Associations.
11. CONFIDENTIALITY. MSP, NOVA and Member each agree that it will retain
in strictest confidence all information and data belonging to or
relating to the business of the other parties to this Agreement,
which is designated confidential by the party to which such
information or data belongs or relates (including without limitation
the terms of this Agreement and information related to Referred
Merchants), and that each party will safeguard such information and
data by using the same degree of care and discretion that it uses
with its own data that such party regards as confidential.
12. NON-SOLICITATION.
A. Referred Merchants. During the term of this Agreement
(including any extensions or renewals hereof), following the
termination of this Agreement, and during the term of any
Service Agreement between NOVA and MSP entered into pursuant
to Section 9(A) of this Agreement, neither MSP nor its
affiliates, subsidiaries, or agents shall, directly or
indirectly, solicit or contact any Referred Merchant, for the
purpose, directly or indirectly, of providing or receiving
Merchant Services, or otherwise encourage a Referred Merchant
to terminate a Merchant Agreement with NOVA and Member.
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B. Employees. During the term of this Agreement (including any
extensions or renewals hereof), and during the term of any
Service Agreement between NOVA and MSP entered into pursuant
to Section 9(A) of this Agreement, MSP shall not solicit or
make any offer of employment at MSP to any employee of NOVA
without the prior written consent of NOVA.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers.
Accepted this 28 day of January, 2000 MSP: Integrated Merchant Services, Inc.
By: /s/
------------------------------
Title: President
Date: 1/28/00
Accepted this __ day of _______, 2000 NOVA INFORMATION SYSTEMS, INC.
By: /s/
------------------------------
Title:
Date: 2/22/00
Accepted this __ day of _______, 2000 IMPERIAL BANK
By: /s/
------------------------------
Title: VP
Date: 3/3/00
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