SECOND AMENDMENT TO SERVICE AGREEMENT
Exhibit 10.6
SECOND AMENDMENT TO SERVICE AGREEMENT
This Second Amendment to Service Agreement (this “Amendment”) is made and entered into as of this
27th day of November, 2002 between First Data Merchant Services Corporation (“FDMS”) and
iPayment, Inc., formerly known as iPayment Holdings, Inc. (“Customer”).
RECITALS
A. Customer and FDMS have previously entered into a Service Agreement dated as of
July 1, 2002, as amended by an amendment dated October 25, 2002 (the “Service Agreement”).
B. Pursuant to Section 12.14 of the Service Agreement. Customer and FDMS now desire
to amend the Service Agreement as set forth herein.
C. Unless otherwise amended herein, the remaining terms of the Service
Agreement shall remain the same.
AGREEMENT
In consideration of the foregoing, Customer and FDMS hereby agree as follows:
1. The terms of this Amendment will be effective as of July 1, 2002.
2. Article. 4. Section 4.4 of the Service Agreement is hereby amended in its entirety to
read as follows:
“4.4 Minimum Authorization Commitment. In Processing Year 1, Customer
will submit to FDMS for processing authorization inquiries (which are identified in Exhibit “B”
and currently billed as items number 300, 305, 317, 318, 1101, 1102, 6601, 6602, 6603, 6604,
6605, 6606, 6607, 6611, 6621 and 6624 (which numbers may change during the Term of this
Agreement), and collectively referred to as the “Authorizations”) in an amount equal to
thirty-two million (32,000,000) Authorizations (the “Year 1 Minimum Authorizations”). In
Processing Year 2, Customer will submit to FDMS for processing at least thirty-six million eight
hundred thousand (36,800,000) Authorizations (the “Year 2 Minimum Authorizations”). In
Processing Year 3, Customer will submit to FDMS for processing at least forty-one million six
hundred thousand (41,600,000) Authorizations (the “Year 3 Minimum Authorizations”). In
Processing Year 4, Customer will submit to FDMS for processing at least forty-six million four
hundred thousand (46,400,000) Authorizations (the “Year 4 Minimum Authorizations”). In each
Processing Year after Processing Year 4, Customer will submit to FDMS for processing
Authorizations at least equal to one hundred percent (100%) of the actual Authorizations
submitted during the immediately preceding Processing Year (the “Minimum Authorizations”). FDMS
shall calculate the total Authorizations submitted by Customer during each Processing Year (the
“Total Annual
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Authorizations”) within ninety (90) days after the end of each Processing Year and will, after
ten (10) days written notice to Customer, draw upon Customer’s account pursuant to Section 4.5 of
this Agreement for the dollar amount, if any, equal to the product of (i) the amount by which the
Year 1 Minimum Authorizations, Year 2 Minimum Authorizations, Year 3 Minimum Authorizations, Year 4
Minimum Authorizations or the Minimum Authorizations, as applicable, for the Processing Year exceed
the Total Annual Authorizations for the Processing Year, multiplied
by (ii) * ($*).
For the avoidance of doubt and based on economic assumptions material to each party underlying this
transaction, Customer and FDMS expressly agree that Customer shall submit to FDMS Authorizations
each Processing Year in an amount at least equal to the Year 1 Minimum Authorizations, Year 2
Minimum Authorizations, Year 3 Minimum Authorizations, Year 4 Minimum Authorizations or the Minimum
Authorizations, as applicable, until this Agreement is terminated by Customer solely pursuant to
the provisions of Section 9.2 of this Agreement or until FDMS terminates this Agreement and invokes
compensatory payments pursuant to Section 9.4 of this Agreement. Further, and for the avoidance of
doubt, that parties agree that in order for an authorization inquiry submitted to FDMS to be
counted in the total number of Authorizations for purposes of this Agreement, FDMS must also
perform core merchant settlement services with respect to the Transaction so authorized, including
Interchange Settlement and Merchant statementing.”
3. Capitalized terms used but not otherwise defined in this Amendment will have the
meanings set forth in the Service Agreement.
4. In the event of a conflict between this Amendment and the Service Agreement as it
relates to the subject matter hereof, the terms of this Amendment will control. Otherwise, Unless
otherwise amended herein, all terms and conditions of the Service Agreement will remain in full
force and effect and likewise apply to this Amendment.
The parties have executed this Amendment as of the date first above written.
FIRST DATA MERCHANT SERVICES CORPORATION
BY:
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/s/ Xxxxxxx Xxxxxx
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Name:
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Xxxxxxx Xxxxxx | |||
Title:
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Vice President | |||
| iPAYMENT, INC. | ||||
By:
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/s/ Xxxxxx Xxxxxxx
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|||
Name:
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Xxxxxx Xxxxxxx | |||
Title:
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COO | |||
| * | Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC. |
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