Service Agreement [Amendment No. 1] - First Data Merchant Services Corp. and iPayment Inc.
FIRST AMENDMENT
TO
SERVICE AGREEMENT
This First Amendment to Service Agreement dated as of October 25, 2002
(the "Effective Date") is between First Data Merchant Services Corporation
("FDMS") and iPayment, Inc., formerly known as iPayment Holdings, Inc.
("Customer"), and hereby amends the Service Agreement entered into between FDMS
and Customer dated as of July 1, 2002 (the "Agreement").
RECITALS
WHEREAS, the parties entered into the Agreement in order to govern the
relationship of the parties with respect to credit card settlement transactions
and sponsorship; and
WHEREAS, pursuant to Section 12.14 of the Agreement, the parties wish to
amend section 9.2(b) of the Agreement extending the date that Customer has to
terminate the Agreement from October 26, 2002 until November 30, 2002; and
WHEREAS, the parties wish to amend certain other sections of the Agreement
to reflect the change in Section 9.2(b); and
WHEREAS, since the date of the Agreement, iPayment Holdings, Inc., a
Tennessee corporation, has become iPayment, Inc., a Delaware corporation; and
WHEREAS, the parties wish that the remaining terms of the Agreement remain
the same.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, the parties agree to amend the Agreement as follows:
1. Article 4, Section 4.1(b) shall be amended in its entirety to read as
follows:
(b) In order for Customer to evaluate the Processing Fees to be charged
under this Agreement effective October 1, 2002 as contemplated by Sections
4.1(a) and 9.2(b) herein, FDMS will prepare and provide to Customer two
separate invoices for the Services provided during the months of July,
August, September and October 2002. One invoice will show the amount of
processing fees actually due and owing from Customer and billed under the
BHAC Agreement, the Humboldt Agreement and the Merchant Processing Services
portions of the FNP Agreement, and the other invoice will show the
Processing Fees that would have been due and owing from Customer if they
had been billed under this Agreement. FDMS will deliver the invoices for
October 2002 on or before November 21, 2002.
2. Article 9, Section 9.2(b) shall be amended in its entirety to read as
follows:
(b) Notwithstanding anything contained herein, the parties agree that
Customer will have the right, on or before November 30, 2002, to provide
written notice to FDMS of its election to terminate this Agreement if
Customer, in good faith, is not satisfied with the Processing Fees under
this Agreement and to revert to each of the existing BHAC Service
Agreement, Humboldt Agreement and FNP Agreement. Upon Customer's election
to terminate this Agreement and revert to the BHAC Service Agreement,
Humboldt Agreement and FNP Agreement, Customer agrees to return to FDMS any
sign-up bonus
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or other compensation received by Customer specifically in exchange for
entering into this Agreement, including the sign-up bonus described in
Section 2.6. During such period ending November 30, 2002, the Affiliates of
Customer, which were deemed Affiliates as of July 1, 2002, shall not,
directly or indirectly, solicit, encourage, engage or participate in any
discussions or negotiations with any other person or entity, including
providing any information, with respect to any agreement for services
similar to the Services being provided by FDMS under this Agreement,
excluding discussions related to acquisitions by Customer of Merchant
Accounts.
3. Article 12, Section 12.16 shall be amended in its entirety to read as
follows:
Unless Customer makes the election to terminate this Agreement as provided
in Section 9.2(b), the BHAC Service Agreement, the Humboldt Agreement and
the Merchant Processing Services portions of the FNP Agreement are hereby
terminated effective as of December 1, 2002.
4. As hereby amended and supplemented, the Agreement shall remain in full
force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to the
Agreement as of the Effective Date above:
FIRST DATA MERCHANT SERVICES CORPORATION
By: /s/ Rick Learim
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Name: Rick Learim
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Title: Vice President
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iPAYMENT, INC. (a Delaware corporation)
(Formerly known as iPayment Holding, Inc.)
By: /s/ Joseph Jorling
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Name: Joseph Jorling
-------------------------------------
Title: C.O.O.
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