MARKETING AND SALES ALLIANCE AGREEMENT
EXHIBIT
10.16
EXECUTION
COPY
THIS
MARKETING AND SALES ALLIANCE AGREEMENT
(this
"Agreement") is made, entered into, and effective as of this 29th
day of
December, 2005 by and among TIB
BANK,
a bank
chartered under the laws of the State of Florida (the "Bank"), TIB
FINANCIAL CORP.,
a
Florida corporation and the sole shareholder of the Bank ("Parent") (for
purposes of Article III and Article VII only, but only to the extent that
Article VII relates to a breach of Parent's obligations under Article III),
and
NOVA
INFORMATION SYSTEMS, INC.,
a
Georgia corporation (“NOVA”)
BACKGROUND
AND PURPOSE
A. The
Bank
has sold to NOVA all of the Bank's merchant bankcard transaction processing
assets pursuant to that certain Merchant Asset Purchase Agreement dated as
of
even date herewith by and among the Bank and NOVA (the "Purchase
Agreement").
B. The
Bank
and NOVA now desire to enter into, in connection with the Purchase Agreement,
a
mutually beneficial marketing relationship, as set forth herein.
THE
AGREEMENT
NOW,
THEREFORE,
for and
in consideration of the mutual covenants and agreements herein contained, and
other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE
I
DEFINITIONS
1.1 Certain
Defined Terms.
For
purposes of this Agreement, the following capitalized terms shall have the
following meanings:
“AuxiIiary
Documents” has
the
meaning set forth in Section 2.1 (a) hereof.
“Cash
Advance” has
the
meaning set forth in Section 3.1 hereof.
“Confidential
Information” has
the
meaning set forth in Section 2.8 hereof.
“Credit
Card” means
(i)
a VISA card or other card bearing the symbol(s) of VISA U.S.A, Inc. or VISA
International, Inc., or (ii) a MasterCard card or other card bearing the
symbol(s) of MasterCard International Incorporated, or (iii) any card bearing
the symbols of any other Credit Card Association.
“Credit
Card Associations” means
(i)
VISA U.S.A., Inc., (ii) VISA International, Inc., (ill) MasterCard International
Incorporated, or (iv) any other Credit Card-sponsoring organization or
association that hereafter contracts with the Bank to settle Merchant sales
transactions effected with its Credit Cards, and any successor organization
or
association to any of the foregoing.
“Credit
Loss” means
any
loss, including but not limited to a chargeback, resulting from or attributable
to the failure by a Merchant to pay amounts owed by it under a Merchant
Agreement.
"Debit
Card" means
a
card with a magnetic stripe bearing the symbol(s) of one or more EFT Networks
or
Credit Card Associations which enables the holder to pay for goods or services
by authorizing an electronic debit to the cardholder's designated deposit
account.
“Dues
and Assessments” mean
fees
charged by the Payment Networks and retained by the Payment Networks to fund
their operations. The fees consist of a percentage of the total sales
transaction as set by each Payment Network.
"EFT
Network" means
Star.
"Financial
Transaction Device" or "FTD" means
any
Credit Card, Debit Card or any other financial transaction device, such as
a
stored value card, electronic card "smart" card, electronic check or other
evolutionary financial transaction device used for the purpose of obtaining
credit or debiting consumer accounts that is now or hereafter effected through
transactions with merchants.
"Flat
Fee" has
the
meaning set forth in Section 2.3(a) hereof.
"Initial
Term" has
the
meaning set forth in Section 5.1 hereof.
"Interchange" means
the
fee charged by the Payment Networks and remitted by the
Payment
Networks to the card-issuing members. The fee typically consists of a percentage
of the total sales transaction plus a per item fee, each as set by each Payment
Network. The fee can vary based on the type of merchant, method of authorization
and other criteria stipulated by each Payment Network.
"Involuntary
Bankruptcy Proceeding" with
respect to a Person means that a case or other proceeding shall be commenced
against the person or any subsidiary of such Person in any court of competent
jurisdiction, or through any regulatory agency or body, seeking (i) relief
under
the Bankruptcy Code of 1978, as amended, or other federal bankruptcy laws (as
now or hereafter in effect) or under any other applicable laws, domestic or
foreign, relating to bankruptcy, insolvency, reorganization, winding up, or
composition or adjustment of debts, or (ii) the appointment of a trustee,
receiver, custodian, liquidator or the like of such Person, or of all or any
substantial part of the assets, domestic or foreign, of such Person, or any
other similar conservatorship or receivership proceeding instituted or
administered by any regulatory agency or body.
"Licensed
Marks" has
the
meaning set forth in Section 2.5 hereof
"Member" means
a
financial institution (including, if and to the extent permitted by the Payment
Network Regulations, NOVA) that is a principal, sponsoring, affiliate, or other
member of the Payment Networks and, with respect to any Merchant or Referred.
Merchant, means the member of the Payment Networks that is a party to the
Merchant Agreement with respect to such Merchant or Referred Merchant, as may
be
designated from time to time
by
NOVA pursuant to Section
2.4 hereof.
"Merchant
Agreement" means
an
agreement between (i) NOVA and/or the Bank (and a Member), and (ii) a merchant,
pursuant to which
the
merchant undertakes to honor Financial Transaction Devices, and includes,
without limitation, all merchant agreements sold assigned, conveyed and
transferred to NOVA by the Bank pursuant to the
Purchase Agreement.
"Merchant
Discount" means
the
fee charged to Referred
Merchants for the authorization, processing and settlement of Credit Card and
Debit Card transactions. The fee typically consists of a percentage of the
total
sales transaction volume of a Referred Merchant, as such percentage is agreed,
plus a per item fee. The fee can vary based on the type of Referred Merchant,
method of authorization and other criteria stipulated by NOVA.
"Merchant
Bankcard Services" means
FTD
processing services and other related products and services, as provided by
(or
similar to
the
services provided by) NOVA and its subsidiaries and affiliates from time to
time.
"Net
Sales Revenue"
means,
with respect to any Referred Merchant and with respect to any
given
period of time, the Merchant Discount plus
Other
Fee
Revenue attributable to sales
transactions by such Referred Merchant in which a customer utilizes a Credit
Card or Debit Card, less
Credit
Losses, Interchange, Dues and Assessments and rebates, residuals or adjustments
due to third parties that are attributable to such
Referred Merchant; provided,
in
no event
will Net Sales Revenue be deemed to include
revenue attributable to Equipment.
“New
Merchant
Account Royalty” has
the
meaning set forth in Section 2.3(a) hereof.
“Other
Fee Revenue” means
revenue from the following fees to be included in the calculation of Net Sales
Revenue: (i) monthly statement fee; (ii) monthly minimum fee; (iii)
authorization fees (including American Express, Diners, Discover and JCB);
(iv)
debit transaction fees; (v) application fees; and (vi) chargeback fees;
provided,
in no
event will Other Fee Revenue be deemed to include revenue attributable
to Equipment.
"Parent
Entity" means
any
of Parent, the Bank, and their respective affiliates and subsidiaries in
existence from time to time.
"Payment
Network" means
any
Credit Card Association, EFT Network or any other organization or association
that issues or sponsors a Financial Transaction Device.
"Payment
Network Regulations" means,
collectively, the rules and regulations promulgated by the Credit Card
Associations, the EFT Networks or any other Payment Networks, as
applicable.
"Person" means
any
of a natural person, corporation, partnership, firm, association, limited
liability company, trust, estate or other entity of any kind.
“Referred
Merchant” means
a
merchant referred to NOVA by the Bank pursuant to, and during the term of this
Agreement (including any extensions and renewals hereof) that, as a result
of
such referral, enters into a Merchant Agreement with NOVA and the
Member.
"Requirements
of Law" means
with respect to any person, (a) any law (including common law), ordinance,
judgment, order, decree, injunction, permit, statute, treaty, rule or
regulation, regulatory bulletin or guidance, regulatory examination, order
or
recommendation, or determination of (or agreement with) an arbitrator or a
governmental authority (including any financial services authority), applicable
to such person, and (b) the applicable bylaws, rules, regulations, documentation
and manuals promulgated or adopted by a Credit Card Association as amended
or
supplemented in accordance therewith from time to time, and that (c) with
respect to both (a) and (b) above is applicable to the Merchant Bankcard
Business, and the performance by the parties of their obligations
hereunder.
"Underwriting
Guidelines" has
the
meaning set forth in Section 2.1 (b) hereof.
"Voluntary
Bankruptcy Proceeding" with
respect to any Person means that the Person or any subsidiary of such Person
shall (i) commence a voluntary case under the Bankruptcy Code of 1978, as
amended, or other federal bankruptcy laws (as now or hereafter in effect),
(ii)
file a petition seeking to take advantage of any other applicable laws, domestic
or foreign, relating to bankruptcy, insolvency, reorganization, winding up,
or
composition or adjustment of debts, or any other similar conservatorship or
receivership proceeding instituted or administered by any regulatory agency
or
body, (iii) consent to or fail to contest, in a timely and appropriate manner,
any petition filed against it in an involuntary case under such bankruptcy
laws
or other applicable laws or consent to an Involuntary Bankruptcy Proceeding,
(iv) apply for or consent to, or fail to contest in a timely and appropriate
manner, the appointment of or the taking of possession by, a trustee, receiver,
custodian, liquidator or similar entity of such Person or of all or any
substantial part of its assets, domestic or foreign, (v) admit in writing its
inability to pay its debts as they become due, (vi) make a general assignment
for the benefit of creditors, (vii) make a conveyance fraudulent as to creditors
under any applicable law, or (viii) take any corporate action for the purpose
of
effecting any of the foregoing.
1.2 Other
Definitional Provisions.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to such terms in the Purchase Agreement. Singular terms shall
include the plural, and vice versa, unless the context otherwise requires.
The
words "hereof," "herein" and "hereunder" and words of similar import when used
in this Agreement shall refer to this Agreement and not to any particular
provision of this Agreement, and Section and Schedule references are to this
Agreement, unless otherwise specified. The term "including" shall mean
"including without limitation."
ARTICLE
II
MARKETING
RELATIONSIDP; MERCHANT REFERRALS
2.1 Marketing;
Referral of Merchants to NOV A.
(a) The
Bank
will actively, and through the use of all reasonable efforts, cooperate with
NOVA, exclusively, in marketing Merchant Bankcard Services to merchants and
prospective merchants (including the customers of the Bank). Such marketing
services and assistance shall includes, without limitation, the distribution
by
the Bank of promotional and informational materials and supplies relating to
the
Merchant Bankcard Services conducted by NOVA and such other services and
assistance as may reasonably be requested by NOVA. NOVA will provide the Bank
access to all merchant applications and merchant agreements to be used in
connection with the Merchant Bankcard Services, including supplies for cash
advances to be effected by the Bank. The Bank covenants and agrees that it
will
only use and provide to merchants the applications and merchant agreements,
and
advertising, marketing, promotional and other related materials (collectively,
"Auxiliary Documents"), supplied by or at the direction of: or approved in
writing in advance, by NOV A. From time to time NOVA and the Bank shall, upon
mutual agreement and at a reasonable cost to be borne by NOVA, develop enhanced
promotional services, such as the provision of sales or marketing personnel
or
employee incentives for the Bank to undertake on behalf of NOVA. Further, the
Bank shall provide to NOVA such office space at the Bank's locations as
reasonably requested by NOVA, and as agreed by the Bank
(b) During
the term of this Agreement, and subject to the historical and reasonably
anticipated future needs and performance of the portfolio governed and generated
hereunder, NOVA will, at its expense, dedicate one (l) full-time sales employee
(the "Sales Representative") to the development of its Merchant Bankcard
Services business (as applicable) with the Bank and the Bank’s customers. The
name and office location of the initial Sales Representative is set forth on
Schedule
2.1(b) hereto.
(c) The
Bank
agrees to refer exclusively to NOVA any merchants, financial institutions,
independent sales organizations, or other associations, institutions,
organizations, entities, or other Persons that inquire about, request, or
otherwise evidence an interest, to the Bank's knowledge, in Merchant Bankcard
Services.. All such referrals shall be communicated to NOVA by the Bank in
a
manner to be mutually agreed upon by the parties hereto. Upon any such merchant
referral, NOVA shall process such referral and corresponding merchant
application in accordance with its practices and procedures, and otherwise
in
accordance with the credit policy, risk and underwriting guidelines then in
effect for each of NOVA and the Member (collectively, the "Underwriting
Guidelines"). If the referred merchant meets the Underwriting Guidelines, or
if
NOVA otherwise desires, then NOVA may attempt, in its sole discretion, to enter
into a Merchant Agreement, and arrange for the Member to enter into a Merchant
Agreement, with such merchant providing for the performance of such Merchant
Bankcard Services by NOVA.
(d) For
the
purposes of this Section 2.1, the defined term "Bank" shall include the Bank
and
any other Parent Entities that now or in the future provide banking
services.
2.2 Subsidies/Credit
Enhancements.
(a) If
the
Bank refers to NOVA a merchant who desires to receive Merchant Bankcard Services
and meets the Underwriting Guidelines, but such referred merchant is unwilling
to offer discount revenue at a rate NOVA would otherwise require, then the
Bank
shall have the right (exercisable in its sole discretion), but not the
obligation, to offer to subsidize such discount revenue by payment to NOVA
of
such amounts as NOVA may require. The Bank must agree to any such subsidy in
writing in the form and upon such terms as are acceptable to NOVA; provided,
however, that in no event shall NOVA or the Member be obligated to enter into
a
Merchant Agreement with any referred merchant with respect to whom the Bank
has
offered such a subsidy.
(b) In
the
event NOVA or the Member declines to enter into a Merchant Agreement with any
referred merchant in accordance with Section 2.1 (c), the Bank shall have the
right (exercisable in its sole discretion), but not the obligation, to offer
to
NOVA and the Member such assurances and guarantees (including indemnification
and/or credit enhancements), as may be requested by NOVA or the Member,
providing neither NOVA nor the Member will incur or suffer any losses associated
with the acceptance of such referred merchant; provided, however, that in no
event shall NOVA or the Member be obligated to enter into a Merchant Agreement
with any referred merchant with respect to whom the Bank has offered such
assurances or guarantees.
2.3 Payment
of Royalties and Flat Fees.
(a) During
the term of this Agreement (including any extensions or renewals hereof), and
with respect to each Referred Merchant, NOVA shall pay to the Bank a royalty
of
ten percent (10%) of the Net Sales Revenue processed through NOVA's network
by
such Referred Merchant (the "New Merchant Account Royalty"), plus a flat,
one-time fee of Fifty and No/l00 Dollars ($50.00) for each Referred Merchant
(the "Flat Fee").
(b) The
New
Merchant Account Royalty and the Flat Fee shall be calculated on a calendar
quarter basis and shall be paid, in arrears, within forty five (45) days of
the
end of each calendar quarter with respect to which the New Merchant Account
Royalty or Flat Fee is due hereunder.
2.4 Ownership
of Merchant Agreements.
Each of
NOVA and the Bank acknowledges and agrees that any merchant that is a party
to a
Merchant Agreement does and. shall have a direct business relationship with
NOVA. Subject to the Payment Network Regulations, and notwithstanding the Bank
being a party to any such Merchant Agreement, or anything to the contrary in
any
Merchant Agreement, NOVA does and shall own, administer and control the Merchant
Agreements and the relationship created thereby (such control shall include,
without limitation, decisions regarding the continuance, amendment, assignment
or termination of such Merchant Agreement). The Bank acknowledges and agrees
that, with respect to any Merchant Agreement to which the Bank is a party,
the
Bank shall, upon the request of NOVA in NOVA's sole discretion, and with respect
to any Merchant or Referred Merchant designated by NOVA, assign to NOVA and
the
Member all of the
Bank's rights and obligations with respect to the Merchant Agreement relating
to
such Merchant or Referred Merchant. Upon any such request, the Bank agrees
to
execute all instruments and documents as may reasonably be requested by NOVA
in
order to effectuate the assignment of such
rights and obligations. The Bank also agrees that NOVA may designate,
redesignate, or substitute any financial institution to serve as the Member
with
respect to any merchant that is a party to a Merchant Agreement and the
sponsorship of the
Bank's activity hereunder. The Bank agrees to take such steps as may be
reasonably be requested by NOVA to effect -any such change in the
Member.
2.5 Use
of Bank's Licensed Marks.
The
Bank hereby grants to NOVA a limited, non-exclusive, non-transferable,
royalty-free license, during the term of this Agreement (including any
extensions and renewals hereof), to use the Bank's name and other trademarks
and
service marks identified on Schedule
2.5 attached
hereto (the "Licensed Marks") on FTD transaction slips, in merchant agreements.,
and in such other Auxiliary Documents furnished to merchants or to prospective
merchants to the extent: (i) required by applicable provisions of the Payment
Network Regulations; and (ii) as reasonably requested by NOVA. Notwithstanding
the foregoing, the Bank shall, at all times, have the right to approve the
use
of the Licensed Marks, such approval not to be unreasonably withheld or delayed.
Notwithstanding any termination of such license, the parties acknowledge that
they shall not be obligated to recall or retrieve any information, media or
document previously distributed on behalf of the Merchant Bankcard Business
conducted hereunder.
2.6 Servicing
and Monitoring of Merchant Bank Card Accounts.
The
parties hereto agree that all merchant bank card accounts of Merchants and
Referred Merchants shall be serviced as follows:
(a) Subject
always to the Requirements of Law, each Referred Merchant and Merchant shall
maintain a designated deposit account or accounts at the Bank or another
depository institution approved .by NOVA and the Member. The Member shall be
permitted access to any funds in such account to the extent funds are: needed
to
fund fees, assessments, charge-backs, returned items or any .other obligations
of a Referred Merchant or Merchant to NOVA, the Member, the Payment Networks,
or
any FTD issuing bank or account holder.
(b) To
the
best of its
ability and at all times in compliance with the Requirements of Law, the Bank
shall use all reasonable efforts to assist NOVA in its efforts to monitor the
business activities and deposit accounts of Referred Merchants and Merchants
and
shall notify NOVA immediately of any information of which the Bank becomes
aware
and which would lead a prudent businessperson to believe or suspect that a
Referred Merchant or Merchant is experiencing financial difficulty or engaging
in improper conduct or violating the roles, regulations or procedures of the
Payment Networks, NOVA or the Member. The Bank shall comply with all reasonable
requests of NOVA and the Member to conduct investigations, supply information
or
perform any other act or thing relating to investigating Merchant or Referred
Merchant activities and condition.
2.7 Payment
Network Licensing.
The
Bank shall, to the extent required by the rules and regulations of the Payment
Networks, obtain and maintain such memberships or licenses with the Payment
Networks during the term of this Agreement (including any extensions and
renewals hereof) as are necessary for NOVA and the Bank to fully perform their
obligations hereunder. The Bank hereby covenants and agrees to comply in all
respects with the rules and regulations promulgated by the Payment Networks
necessary for the Bank to perform its obligations hereunder.
2.8 Confidentiality
.
(a) NOVA
and
the Bank acknowledge that, in the performance of the obligations of each of
NOV
A and the Bank under this Agreement, each of the parties will be in possession
of confidential and proprietary information of the other parties and of
Merchants and Referred Merchants, including customer lists and customer
information, customer account numbers and account documentation, the status
of
any account, pricing information, computer access codes, instruction and/or
procedural manuals, business and financial plans, the Operative Documents,
and
any other data or information in the possession of NOVA and the Bank which
is
competitively sensitive and not generally known to the public ("Confidential
Information"). NOVA and the Bank also acknowledge that each of the parties
has
an obligation to protect and maintain the confidentiality of such Confidential
Information. Each of NOV A and Bank agree to use all reasonable efforts to
maintain the confidentiality of such Confidential Information and to not
disclose such Confidential Information for any purpose other than to the extent
necessary for the performance of the obligations contemplated under this
Agreement, the Merchant Agreements, and the Merchant Bankcard Services conducted
in connection herewith and therewith. Each party shall use all reasonable
efforts to inform its employees, agents, representatives and independent
contractors of the confidential nature of the Confidential Information and
to
cause them to comply with the terms of this Section 2.8. Notwithstanding the
foregoing, the Bank and NOVA acknowledge and agree that the restrictions
contained in this Section 2.8 shall not apply to any disclosures of such
Confidential Information by NOVA or the Bank, as applicable, in connection
with,
or as may be required relating to. (a) the provision by NOVA of Merchant
Bankcard Services under this Agreement or the other Operative Documents, or
otherwise in connection with NOVA's or the Bank's performance of their
respective obligations hereunder or thereunder, (b) such disclosure as may
be
required by applicable law or regulation or Payment Network Regulations, (c)
such disclosure as is contained in or required to prepare any financial
statements (including the notes thereto), (d) appropriate or necessary
disclosure to banking authorities
or regulators, including as may result from NOVA's status as an affiliate of
U.S. Bancorp or another bank, or (e) disclosure to U.S. Bancorp's Corporate
and
Compliance Units. Notwithstanding any provision of this Agreement, NOVA shall
not divulge, directly or indirectly or through U.S. Bancorp or any of its
affiliates, successors or assigns, any confidential information of the Bank,
including information related to the Merchant Business, to U.S. Bank, N.A.
which, in any manner, can be used for the purpose of soliciting customers of
the
Bank for any services other than the Merchant Bankcard Services. The covenants
contained in this Section 2.8 shall survive for the duration of this Agreement
and a period of three (3) years after the termination or expiration
hereof.
(b) If
NOVA
or the Bank breaches its duties under this Section 2.8, the parties agree that
the nonbreaching party will suffer irreparable harm and the total amount of
monetary damages therefor will be impossible to calculate and will therefore
be
an inadequate remedy. Accordingly, the parties agree that the nonbreaching
party
shall be entitled to temporary and permanent injunctive relief against the
breaching party, its employees, agents, representatives, or independent
contractors, and other rights and remedies to which any of them may be entitled
at law, in equity and under this Agreement.
2.9
Non-Competition
Agreement.
The
parties hereto acknowledge and agree that in connection with the Purchase
Agreement and this Agreement, the parties have entered into the Non-Competition
Agreement of even date herewith.
ARTICLE
III
BANK
TRANSACTIONS
3.1 Acquisitions
by and of the Bank.
(a) The
Bank
(for purposes of this Article III, the defined term "Bank" shall be deemed
to
include any Parent Entity, as the context may require), and NOVA understand
and
agree that the Bank and/or other Parent Entities may, from time to time,
consummate transactions with other financial institutions or other persons
or
entities (a "Third Party"), through stock or asset acquisition, merger,
consolidation, or otherwise (each a "Transaction"), where such Third Party
(i)
owns a merchant portfolio, and/or (ii) owns bank branches that may be used
as a
marketing/distribution channel for Merchant Bankcard Services, and/or (iii)
otherwise engages in Merchant Bankcard Services (each a "Merchant Bankcard
Portfolio").
(b) For
purposes of this Article III, any independent, unrelated and unaffiliated Third
Party that acquires the Bank in a Change of Control, or acquires all or
substantially all of the assets of the Bank (the "Acquirer"), shall be entitled
to continue to operate the Acquirer's Merchant Bankcard Portfolio as it existed
immediately prior to its acquisition of the Bank and in the ordinary course
of
business, so long as such operation is not under or in connection with the
Bank's branches, name or brand (or otherwise in violation of Section 2.2 of
the
Non-Competition Agreement) and does not materially interfere with the benefit
of
the bargain received by NOVA hereunder. Further, such acts by the Acquirer
shall
not in and of themselves be deemed a breach of Article II hereofor of Section
2.2 of the Non-Competition Agreement. In the event that the Bank or the Acquirer
decide to sell the Acquirer's Merchant Bankcard Portfolio, then NOVA shall
receive written notice of such sale and an opportunity to bid on such Merchant
Bankcard Portfolio.
3.2 NOVA's
Right to Purchase.
(a) Without
prejudice to Section 3.l(b) above, in the event that the Bank consummates a
Transaction with a Third Party that owns or operates a Merchant Bankcard
Portfolio, the Bank shall:
(i)
provide
written notice of such Transaction as soon as circumstances and Requirements
of
Law allow (and in no event later than promptly after the first public
announcement of such Transaction;
(ii) undertake
exclusive negotiations, with respect to the value of the acquired Merchant
Bankcard Portfolio, the consideration proposed to be paid for such Merchant
Bankcard Portfolio, and the proposed timing of its purchase by NOVA. This period
of exclusive negotiation shall end not sooner than ninety (90) days following
NOVA's receipt of the notice required by Section 3.2(a);
(iii) with
NOVA, use commercially reasonable efforts to negotiate in good faith a
mutually-agreed sales price and other terms and conditions for the purchase
by
NOVA of such Merchant Bankcard Portfolio, evidenced by a definitive purchase
agreement setting forth final terms of such purchase. The Bank and NOVA shall
also consider, among other things, whether the Bank would be obligated to make
any material payments to terminate any agreements with any existing Merchant
Bankcard Services processor for the newly acquired Merchant Bankcard
Portfolio.
(b)
In-
the
event that NOV A does not purchase the Merchant Bankcard Portfolio, or an
agreement can not be reached after good faith negotiations, then the Bank shall
be free to either operate the Merchant Bankcard Portfolio or otherwise dispose
of it; provided,
however,
that in
the event the Bank determines to sell such Merchant Bankcard Portfolio, the
sale
shall be to an independent, unrelated and unaffiliated third party pursuant
to a
bidding and sales process in which NOVA shall be entitled to participate and,
provided that the sales price shall not be less than the fair market value
of
such Merchant Bankcard Portfolio, as established by an independent third party
appraiser recognized and skilled in valuing businesses engaged in the Merchant
Bankcard Services business.
3.3 No
Violation of the Non-Competition Agreement.:
For so
long as the Bank complies with the provisions of this Article III, the operation
in the ordinary course of business of the Merchant Bankcard Services business
by
the Bank relating solely to an acquired Merchant Bankcard Portfolio shall not
in
and of itself be deemed in breach of Article II hereof or Section 2.2 of the
Non-Competition Agreement.
ARTICLE
IV
CASH
ADVANCES
4.1 Cash
Advance Procedure.
During
the term of this Agreement (including any extensions or renewals hereof), the
Bank will continue to make advances of cash ("Cash Advances") to holders of
Financial Transaction Devices in accordance with the Payment Networks
Regulations and NOVA's procedures, and shall cause all records of such Cash
Advances to be delivered to NOVA in accordance with such terms and conditions
as
NOVA may reasonably request, the Payment Network Regulations and NOVA's
procedures, and shall otherwise fulfill its obligations pursuant to this Section
4.1. During the term of this Agreement (including any extensions or renewals
hereof), the Bank shall use NOVA and the Member as the exclusive processor
of
Cash Advances made by the Bank.
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES
5.1 Representations
and Warranties of the Bank.
The
Bank represents and warrants to NOVA as follows:
(a) The
Bank
is a duly organized state-chartered bank, validly existing and in good standing
under the laws of the State of Florida. The Bank has full power and authority
to
carry on its business as it is now being conducted and to own and operate its
properties and assets.
(b) The
Bank
has all requisite power and authority to enter into, adopt and perform all
of
its obligations under this Agreement. The execution, adoption and delivery
of
this Agreement have been duly and validly authorized by all necessary corporate
action on the part of the Bank, and upon execution "and delivery by the other"
parties hereto, this Agreement will constitute a legal, valid and binding
obligation of the Bank, enforceable against the Bank in accordance with its
terms.
c) Neither
the execution and delivery by the Bank of this Agreement nor the performance
of
this Agreement by the Bank will violate any applicable law, rule or regulation.
The performance of this Agreement by the Bank will not violate the Bank's
charter or by-laws, or any contract or other instrument to which it is a
party or
by
which it is bound and will not violate any outstanding judgment, order,
injunction, law, rule or regulation to which it is subject.
(d) There
are
no actions, suits, claims, governmental investigations or proceedings
instituted, pending or, to the knowledge of the Bank, threatened against the.
Bank or against any asset, interest or right of the Bank, that would, if
determined adversely to the Bank, have a material adverse effect on the Bank
or
would materially adversely affect the ability of the Bank to perform its
obligations under this Agreement.
5.2 Representations
and Warranties of NOVA.
NOVA
represents and warrants to the Bank as follows:
(a) NOVA
is a
duly organized corporation, validly .existing and- in good standing under the
laws of the State of Georgia. NOVA has full power and authority to carry on
its
business as it is now being conducted and to own and operate its properties
and
assets.
(b) NOVA
has
all requisite power and authority to enter into, adopt and perform all of its
obligations under this Agreement. The execution, adoption and delivery of this
Agreement have been duly and validly authorized by all necessary corporate
action on the part of NOVA, and upon execution and delivery by the other parties
hereto, this Agreement will constitute a legal, valid and binding obligation
of
NOVA, enforceable against it in accordance with its terms.
(c) Neither
the execution and delivery by NOVA of this Agreement nor the performance of
this
Agreement by NOVA will violate any applicable law, rule or regulation. The
performance of this Agreement by NOVA will not violate NOVA's articles of
incorporation or by-laws, or any contract or other instrument to which it is
a
party or by which it is bound and will not violate any outstanding judgment,
order, injunction, law, rule or regulation to which it is subject.
(d) There
are
no actions, suits, claims, governmental investigations or proceedings
instituted, pending or, to the knowledge of NOVA, threatened against NOVA or
against any asset, interest or right of NOVA, that would, if determined
adversely to NOVA, have a material adverse effect on NOVA or would materially
adversely affect the ability of NOVA to perform its obligations under this
Agreement.
ARTICLE
VI
TERM
AND TERMINATION
6.1 Term.
The
term of this Agreement shall extend for an initial term of ten (10) years from
the date hereof (the "Initial Term"), and shall thereafter be automatically
extended for consecutive two-year renewal terms, provided that neither the
Bank
nor NOVA gives written notice to the other of its intent not to renew not less
than one hundred eighty (180) days prior to the expiration of the Initial Term
or any renewal term.
6.2 Termination
by NOVA. In
the
event that:
(a) the
Bank
defaults in the performance of any of its material obligations under this
Agreement, and fails to cure such default within forty-five (4) days after
written notice (which notice indicates that NOVA may terminate this Agreement
pursuant to this Section 6.2(a) if such default is not cured as provided herein)
and demand for cure by NOVA; provided, however,
if,
upon receipt of such written notice, the Bank promptly commences and diligently
pursues the cure to completion as soon as reasonably possible, then such 30-day
period shall be extended for the period or-time which is reasonably necessary
to
cure the default, but in no event more than three months after such written
notice; provided,
further,
that in
the event such default remains uncured after the passage of the time period
specified herein, that a second notice shall have been sent to the chief
executive officer of the Bank notifying such officer of such uncured default
and
stating that NOVA intends to terminate the Agreement pursuant to this Section
6.2(a) within ten (10) days thereafter unless the default is cured within ten
(10) days of the Bank’s receipt of such notice; and provided.
Further,
that in
the event the Bank disputes that fact (or the fact that the default is a default
of a “material obligation”), then the provisions of Section 8.13 shall have been
complied with and any such dispute resolved as provided therein; or
(b) any
material amount due and payable to NOVA by the Bank under this Agreement is
not
paid within twenty (20) days after the Bank receives written notice (which
notice indicates that NOVA may terminate this Agreement pursuant to this Section
6.2(b) if such non-payment is not cured as provided herein) of such non-payment,
and demand for cure; provided, however,
that in
the event such non-payment remains uncured after the passage of the time period
specified herein, that a second notice shall have been sent to the chief
executive officer of the Bank notifying such officer of such uncured non-payment
and stating that NOVA intends to terminate the Agreement pursuant to this
Section 6.2(b) within ten (10) days thereafter unless the default is cured
within ten (10) days of the Bank's receipt of such notice; and provided,
further,
that in
the event the Bank disputes that fact (or the fact that such non-payment is
of a
"material" amount), then the provisions of Section 8.13 shall have been complied
with and any such dispute resolved as provided therein; or
(c) there
occurs a Voluntary Bankruptcy Proceeding or an Involuntary Bankruptcy Proceeding
with respect to the Bank;
then,
in
any such case, NOVA, at its option, may terminate this Agreement immediately
upon written notice to the Bank
6.3 Termination
by the Bank.
In the
event that:
(a) NOVA
defaults in the performance of any of its material obligations under this
Agreement and fails to cure such default within forty-five (45) days after
written notice (which notice indicates that the Bank may terminate this
Agreement pursuant to this Section 6.3(a) if such default is not cured as
provided herein) and demand for cure by the Bank; provided,
however,
if, upon
receipt of such written notice, NOVA promptly commences and diligently pursues
the cure to completion as soon as reasonably possible, then such 30-day period
shall be extended for the period of time which is reasonably necessary to cure
the default, but in no event more than three months after such written notice;
provided, further,
that in
the event such default remains uncured after the passage of the time period
specified herein, that a second notice shall have been sent to the chief
executive officer of NOVA notifying such officer of such uncured default and
stating that the Bank intends to terminate the Agreement pursuant to this
Section 6.3(a) within ten (10) days thereafter unless the default is cured
within ten (l0)days of NOVA's receipt of such notice; and provided, further,
that in
the event NOVA disputes that fact (or the fact that the default is a default
of
a "material obligation"), then the provisions of Section 8.13 shall have been
complied with and any such dispute resolved as provided therein; or
(b) any
material amount due and payable to the Bank by NOVA under this Agreement is
not
paid within twenty (20) days after NOVA receives written notice (which notice
indicates that the Bank may terminate this Agreement pursuant to this Section
6.3(b) if such non-payment is not cured as provided herein) of such non-payment,
and demand for cure; provided, however,
that in
the event such non-payment remains uncured after the passage of the
time
period specified herein, that a second notice sha1l have been sent to the chief
executive officer or chief operating officer of NOVA notifying such officer
of such
uncured non-payment and stating that the Bank intends to terminate the Agreement
pursuant to this Section 6.3(b) within ten days thereafter
unless the default is cured within ten (10) days of
NOVA's
receipt of such notice; and provided, further,
that in
the NOVA disputes that fact (or the fact that such non-payment is of a
"material" amount), then the provisions of Section
8.13 shall have been complied with and any such dispute resolved as provided
therein; or
(c) there
occurs a Voluntary Bankruptcy Proceeding or an Involuntary Bankruptcy Proceeding
with respect to NOVA;
then,
in
any such case, the Bank, at its option, may terminate this Agreement immediately
upon written notice to NOVA.
6.4 Effect
of Termination.
(a) Upon
termination or expiration of this Agreement, (i) NOVA shall pay to the Bank
any
New Merchant Account Royalties, Flat Fees and reimbursements for expenses then
accrued and properly payable under this Agreement, (ii) the Bank will return
to
NOVA all materials in their possession provided by NOVA or the Member, (iii)
NOVA shall return to the Bank all materials in its possession provided
by the
Bank
(which in no event shall include any of the
Assets Sold), and shall discontinue all uses of the
Licensed Marks, (iv) NOVA and the Member shall retain all right, title and
interest in and to the Merchant Agreements and the Bank shall have no interest
in such Merchant Agreements, and (v) if a merchant that is party to a Merchant
Agreement maintains with the Bank a demand deposit account, the Member shall
retain the right to charge such account pursuant to the terms of the
applicable Merchant Agreement
(b) Notwithstanding
the exercise by any party of its rights under this Article V, no termination
of this
Agreement shall relieve any of the
parties hereto of its liability for the payment or performance of any obligation
accrued prior to the effective date of such termination (including any
indemnification obligation arising hereunder, whether or not notice of such
indemnification claim has been given before such termination).
(c) Notwithstanding
the expiration or termination of this Agreement by any party hereto pursuant
to
this Article VI or otherwise, the Bank shall cooperate with NOVA and shall
promptly execute any and all documents and instruments reasonably requested
by
NOVA in order to effectuate an orderly transition of (i) the Merchant Bankcard
Services provided to any Merchant or Referred Merchant, and (ii) any Member
responsibilities held by the Bank in connection herewith or therewith (as
contemplated by Section 2.4 hereof).
ARTICLE
VII
INDEMNIFICATION
7.1 Indemnification
by the Bank.
The
Bank shall, and the Bank and Parent with respect to Article III only shall
jointly and severally, indemnify, defend, and hold harmless NOVA, its
affiliates, their respective successors and assigns, and their respective
officers, directors, employees, and agents from any liability, damage,
diminution in value, loss, cost, claim or expense, including reasonable
attorneys' and accountants' fees and expenses that result from or arise out
of:
(i) the breach or inaccuracy of any of the Bank's representations or warranties
in this Agreement; (ii) the breach of any of the Bank’s or Parent's covenants or
agreements in this Agreement; or (iii) any violations of law or governmental
rules or regulations, or Payment Network Regulations by the Bank in performing
their respective obligations in connection with this Agreement.
7.2 Indemnification
by NOVA.
NOVA
shall indemnify, defend, and hold harmless the Bank, its affiliates, their
respective successors and assigns, and their respective officers, directors,
employees and agents from any liability, damage, diminution in value, loss,
cost, claim or expense, including reasonable attorneys' and accountants' fees
and expenses that result from or arise out of: (i) the breach or inaccuracy
of
any of NOVA's representations or warranties in this Agreement; (ii) the breach
of any of NOVA's covenants or agreements in this Agreement; or (iii) any
violations of law or governmental rules or regulations, or Payment Network
Regulations by NOVA in performing its obligations in connection with this
Agreement.
ARTICLE
VIII
MISCELLANEOUS
8.1 Expenses.
Except
as otherwise specifically provided in this Agreement, each party shall pay
its
own costs and expenses in connection with this Agreement and the transactions
contemplated hereby, including all attorneys' fees, accounting fees and other
costs and expenses.
8.2 Notices
and Payments.
Except
as otherwise specified herein, all notices, demands and other communications
hereunder shall be in writing and shall be delivered (i) in person, (ii) by
United States mail, certified or registered, with return receipt requested,
or
(iii)by national overnight courier service, as follows:
|
If
to the Bank:
|
TIB
Bank
00000
Xxxxxxxx-Xxxxxxx
Xxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx
X. Xxxxxxx,
Executive
Vice President and COO
|
|
|
If
to Parent:
|
000
0xx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx,
Xxxxxxx 00000
Attention:
Xxxxxx
X. Xxxx
CEO
|
|
|
with
a copy
(which
shall not constitute notice) to:
|
Xxxx
X. Xxxxxx & Associates
0000
Xxxxxxx Xxxx
Xxxxxx,
Xxxxxxx 00000
|
|
If
to NOVA, to:
|
NOVA
Information Systems, Inc.
Xxx
Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxx 00000
Attention: Xxxxx
X. Xxxxxx, Esq
General
Counsel
|
|
|
with
a copy to:
(which
shall not constitute notice) to:
|
NOVA
Information Systems, Inc.
Xxx
Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxx 00000
Attention: Xxxxxx
X. X’Xxxx
Senior
Vice President
|
|
|
with
a copy to:
(which
shall not constitute notice)
|
XxXxxxx
Xxxx & Xxxxxxxx XXX
XxxXxxxx
Xxxxx, Xxxxx 0000
000
Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx,
Xxxxxxx 00000
Attention: Xxxxxxx
X. Balloon, Esq.
|
The
persons or addresses to which mailings or deliveries shall be made may be
changed from time to time by notice given pursuant to the provisions of this
Section 8.2. Any notice, demand or other communication given pursuant to the
provisions of this Section 8.2 shall be deemed .to have been given on the date
actually delivered against proof of receipt therefor.
8.3 Third-Party
Beneficiaries.
The
parties to this Agreement do not intend this Agreement to benefit or create
any
right or cause of action in or on behalf of any Person other than the Bank,
NOVA
and the Member.
8.4 Independent
Contractors.
Nothing
contained in this Agreement shall be construed as creating or constituting
a
partnership, joint venture or agency among the parties to this Agreement.
Rather, the parties shall be deemed independent contractors with respect to
each
other for all purposes.
8.5 Successors
and Assigns.
All
terms and provisions of this Agreement shall be binding upon and shall inure
to
the benefit of the parties hereto and their respective successors and permitted
assigns. This Agreement and the rights, privileges, duties; and obligations
of
the parties hereto may not be assigned or delegated by any party without the
prior written consent of the other party; provided, however, that such consent
shall not be required (a) for the assignment by any party of its rights and
privileges hereunder to a Person controlling, con1rolled by or under common
control with such party (it being understood that no such assignment shall
relieve the assigning party of its duties or obligations hereunder), or (b)
for
the assignment and delegation by any party of its rights, privileges, duties
and
obligations hereunder to any Person into or with which the assigning party
shall
merge or consolidate or to which the assigning party shall sell all or
substantially all of its assets, provided that upon request of the non-assigning
party the assignee shall formally agree in writing to assume all the rights
and
obligations of the assigning party created hereby.
8.6 Amendments
and Waivers.
This
Agreement, any of the instruments referred to herein and any of the provisions
hereof or thereof shall not be amended, modified or waived in any fashion except
by an instrument in writing signed by the parties hereto. The waiver by a party
of any breach of this Agreement by another party shall not operate or be
construed as the waiver of the same or another breach on a subsequent occasion,
nor shall any delay in exercising any right, power or privilege hereunder
constitute a waiver thereof.
8.7 Severability
of Provisions.
If any
provision of this Agreement, or the application of any such provision to any
Person or circumstance, is invalid or unenforceable, the remainder of this
Agreement, or the application of such provision to Persons or circumstances
other than those as to which it is invalid or unenforceable, shall not be
affected by such invalidity or unenforceability.
8.8 Counterparts;
Delivery.
This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one instrument. The parties acknowledge that delivery
of executed counterparts of this Agreement may be effected by a facsimile
transmission or other comparable means, with an original document to be
delivered promptly thereafter via overnight courier.
8.9 Governing
Law.
This
Agreement is made and entered into under the laws of the State of Georgia,
and
the laws of that State applicable to agreements made and to be performed
entirely thereunder (without giving effect to the principles of conflicts of
laws thereof) shall govern the validity and interpretation hereof and the
performance by the parties hereto of their respective duties and obligations
hereunder.
8.10 Section
Headings.
The
headings of Sections contained in this Agreement are for convenience of
reference only and do not form a part of this Agreement.
8.11 Entire
Agreement.
The
making, execution and delivery of this Agreement by the parties hereto have
been
induced by no representations, statements, warranties or agreements other than
those expressed herein and in the Purchase Agreement. This Agreement, the
Purchase Agreement, the Non-Competition Agreement and the other written
instruments specifically referred to herein and therein, embody the entire
understanding of the parties and supersede in their entirety all prior
communication, correspondence, and instruments, and there are no further or
other agreements or understandings, written or oral in effect between the
parties relating to the subject matter hereof.
8.12 Publicity.
The
timing and content of any and all public statements, announcements or other
publicity concerning the transactions contemplated herein shall be mutually
agreed upon by the Bank and NOVA, which agreement shall not be unreasonably
withheld.
8.13 Dispute
Resolution.
With
the exception of an action to enforce the covenants of Sections 2.4, 2.8 and
Article III hereof, which may be brought in any court of competent jurisdiction,
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 then current Commercial Arbitration
Rules of the American Arbitration Association ("AAA") as may be amended from
time to time (the "AAA Rules"). Judgment upon an 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 such party's assets. The award shall be
rendered by a panel of three (3) arbitrators, who shall be selected in
accordance with the AAA Rules.
8.14 Force
Majeure.
Notwithstanding any provision to the contrary contained herein, no party hereto
shall have any liability to any other party hereto for any failure or deficiency
in performance of obligations hereunder occurring by reason of force
majeure,
meaning
factors reasonably beyond the control of the party obligated to perform,
including war, conditions or events of nature, civil disturbances, work
stoppages, failures of telephone lines and equipment, power failures or
fires.
8.15 Survival.
The
provisions of Sections 2.4, 2.8, and Articles VII and VIII shall survive the
termination of this Agreement.
(Signatures
on
next
page)
IN
WITNESS WHEREOF,
the
parties hereto have duly executed and delivered this Marketing and Sales
Alliance Agreement as of
the
date
first written above.
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“Bank”:
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||||
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TIB
BANK
|
||||
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By:
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Name:
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|||
|
Title:
|
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|
|
||||
|
“Parent”:
|
||||
|
TIB
FINANCIAL CORP., FOR PURPOSES OF ARTICLE III AND ARTICLE VII, BUT
ONLY TO
THE EXTENT THAT ARTICLE VII RELATES TO A BREACH OF PARENT'S OBLIGATIONS
UNDER ARTICLE III
|
||||
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By:
|
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Name:
|
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|
Title:
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“NOVA”:
|
||||
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NOVA
INFORMATION SYSTEM, INC
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By:
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Name:
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Title:
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