Service Agreement - First Data Resources Inc. and Internet Access Financial Corp.
EXECUTION COPY
SERVICE AGREEMENT
DATED DECEMBER 22, 1997
BETWEEN
FIRST DATA RESOURCES INC.
AND
INTERNET ACCESS FINANCIAL CORPORATION
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TABLE OF CONTENTS
Article 1
Definitions ............................................................. 1
1.1 "AAA" ............................................................ 1
1.2 "Acquirer" ....................................................... 1
1.3 "Affiliate" ...................................................... 1
1.4 "Agreement" ...................................................... 1
1.5 "Alternative" .................................................... 2
1.6 "Arbitration Demand" ............................................. 2
1.7 "Arbitration Panel" .............................................. 2
1.8 "Basic Qualifications" ........................................... 2
1.9 "Business Continuity Plan" ....................................... 2
1.10 "Cardholder" ..................................................... 2
1.11 "Cardholder Account" ............................................. 2
1.12 "cc:Mail Software" ............................................... 2
1.13 "Core Processing Services" ....................................... 2
1.14 "Customer's Agent Bank" .......................................... 2
1.15 "Customer's Accounts" ............................................ 2
1.16 "Customer's Issuer Affiliate" .................................... 2
1.17 "Customer's Proprietary Information" ............................. 2
1.18 "Customer's Transaction Card Affiliates" ......................... 2
1.19 "Customer's Transaction Card Affiliate Agreement" ................ 2
1.20 "Daily Amount" ................................................... 2
1.21 "Deconversion" ................................................... 3
1.22 "Dispute" ........................................................ 3
1.23 "Disputing Party" ................................................ 3
1.24 "Entity" ......................................................... 3
1.25 "Failed Guideline" ............................................... 3
1.26 "Failed Month" ................................................... 3
1.27 "FDR's Proprietary Information" .................................. 3
1.28 "FDR System" ..................................................... 3
1.29 "FDR Settlement Rules" ........................................... 3
1.30 "Growth Credit" .................................................. 3
1.31 "Indemnified Party" .............................................. 3
1.32 "Indemnifying Party" ............................................. 3
1.33 "InfoSight Software" ............................................. 3
1.34 "Insolvency Event" ............................................... 3
1.35 "Interchange" .................................................... 4
1.36 "Interchange Settlement" ......................................... 4
1.37 "Issuer" ......................................................... 4
1.38 "Liquidated Damages" ............................................. 4
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1.39 "MasterCard" ..................................................... 4
1.40 "Merchant" ....................................................... 4
1.41 "Merchant Account" ............................................... 4
1.42 "Minimum Processing Fees" ........................................ 4
1.43 "Net Settlement Amount" .......................................... 4
1.44 "Non-Core Processing Services" ................................... 4
1.45 "Non-Performance" ................................................ 5
1.46 "Notice" ......................................................... 5
1.47 "Old Year" ....................................................... 5
1.48 "Original Term" .................................................. 5
1.49 "Performance Guidelines" ......................................... 5
1.50 "Processing Fees" ................................................ 5
1.51 "Processing Year" ................................................ 5
1.52 "Processing Year 1" .............................................. 5
1.53 "Recovery 1 Software" ............................................ 5
1.54 "Renewal Term" ................................................... 5
1.55 "Scheduled Start-Up Date" ........................................ 5
1.56 "Settlement Account" ............................................. 5
1.57 "Settlement Late Payment Fee" .................................... 5
1.58 "Settlement System" .............................................. 5
1.59 "Signing Bonus" .................................................. 5
1.60 "Special Fees" ................................................... 5
1.61 "Start-Up" ....................................................... 5
1.62 "Term" ........................................................... 5
1.63 "Total Annual Processing Fees" ................................... 6
1.64 "Transaction Card" ............................................... 6
1.65 "Transaction Card Ticket" ........................................ 6
1.66 "VISA" ........................................................... 6
1.67 "Year 1 Minimum Processing Feel" ................................. 6
1.68 "Year 2000 Compliant" ............................................ 6
Article 2
Services ................................................................ 6
2.1 Basic Services ................................................... 6
2.2 Communication Links .............................................. 6
2.3 Ancillary Services ............................................... 7
2.4 Start-Up ......................................................... 7
2.5 Compliance With Laws ............................................. 7
2.6 Performance Guidelines .......................................... 10
2.7 Failed Performance .............................................. 10
2.8 Sole Remedy ..................................................... 10
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Article 3
Exclusivity and Execution by Affiliates ................................ 11
3.1 Sole and Exclusive Provider ..................................... 11
3.2 Execution of Agreement by Customer's Affiliates ................. 11
Article 4
Payment for Services ................................................... 12
4.1 Fees and Charges ................................................ 12
Article 5
Indemnification ........................................................ 13
5.1 Customer's Indemnification ...................................... 13
5.2 FDR's Indemnification ........................................... 13
5.3 Notification .................................................... 13
5.4 Claims Period ................................................... 14
Article 6
Limitation of Liability ................................................ 14
6.1 Limitation on Liability ......................................... 14
6.2 No Special Damages .............................................. 15
Article 7
Disclaimer of Warranties ............................................... 15
Article 8
Term of Agreement ...................................................... 15
Article 9
Termination ............................................................ 15
9.1 Termination by FDR .............................................. 15
9.2 Termination by Customer ......................................... 16
9.3 Effect of Termination ........................................... 17
9.4 Payments Upon Termination ....................................... 18
9.5 Liquidated Damages .............................................. 18
Article 10
Confidential Nature of Data ............................................ 19
10.1 Customer's Proprietary Information .............................. 19
10.2 FDR's Proprietary Information ................................... 19
10.3 Confidentiality of Agreement .................................... 19
10.4 Confidentiality ................................................. 20
10.5 Release of Information .......................................... 20
10.6 Exclusions ...................................................... 20
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10.7 Remedy ............................................................ 21
Article 11
Representations ........................................................ 21
11.1 Presentations ................................................... 21
11.2 Customer's Representations ...................................... 22
11.3 Financial Information ........................................... 23
Article 12
Transaction Settlement ................................................. 23
12.1 Interchange Settlement Account .................................. 23
12.2 Transfer of Funds ............................................... 23
12.3 Daily Amount .................................................... 24
12.4 Failure to Transfer ............................................. 24
12.5 Settlement Late Payment Fee ..................................... 24
12.6 No Independent Obligation ....................................... 25
12.7 Violation of Rules .............................................. 25
12.8 Reliance on Other Parties ....................................... 25
12.9 Compliance with Instructions .................................... 25
12.10 Restrictions on Setoff .......................................... 26
12.11 Trailing Activity ............................................... 26
Article 13
General ................................................................ 26
13.1 Assignment ...................................................... 26
13.2 Relationship of Parties ......................................... 26
13.3 Business Continuity Plan ........................................ 27
13.4 State Law ....................................................... 27
13.5 Notice .......................................................... 27
13.6 Headings ........................................................ 28
13.7 Waiver .......................................................... 28
13.8 Force Majeure and Restricted Performance ........................ 28
13.9 Severability .................................................... 29
13.10 Audit ........................................................... 29
13.11 Risk of Loss .................................................... 29
13.12 Equal Employment Opportunity .................................... 29
13.13 Informal Dispute Resolution ..................................... 29
13.14 Arbitration ..................................................... 30
13.15 Judicial Procedure .............................................. 32
13.16 Federal Arbitration Act ......................................... 32
13.17 Insurance ....................................................... 32
13.18 Entire Agreement ................................................ 32
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EXHIBITS
Exhibit Title
------- -----
A Services
B Payment and Term
C Customer Transaction Card Affiliate Agreement
D Performance Guidelines
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SERVICE AGREEMENT
This Service Agreement dated as of December 22,1997, is between Internet
Access Financial Corporation, 595 Market Street, Suite 2250, San Francisco,
California 94105 ("Customer") and First Data Resources Inc., 7302 Pacific
Street, Omaha, Nebraska 68114 ("FDR").
RECITALS
A. Customer and Customer's Transaction Card Affiliates desire to
obtain data processing and other related services from FDR in connection with
their respective Transaction Card businesses.
B. FDR is willing to perform data processing and other related
services for the Transaction Card businesses in accordance with the terms and
conditions of this Agreement, including the acknowledgment of Customer and
Customer's Transaction Card Affiliates that FDR is acting solely as an agent in
performing the settlement functions and that FDR has no obligation to supply or
advance funds for settlement purposes.
In consideration of the foregoing premises and of the mutual covenants
and conditions hereinafter set forth, the parties hereto, intending to be
legally bound, agree as follows:
ARTICLE I
DEFINITIONS
The following definitions apply to the terms set forth below when used
in this Agreement:
1.1 "AAA" is defined in Section 13.14(a) of this Agreement.
1.2 "Acquirer" means an Entity which has an arrangement with a
Merchant to obtain Transaction Card Tickets from the Merchant and present the
Transaction Card Tickets through an Interchange to an Issuer.
1.3 "Affiliate" means, with respect to Customer, any Entity which,
directly or indirectly, owns or controls, is owned or controlled by, or is under
common ownership or common control with Customer. As used herein, "control"
means the power to direct the management or affairs of an Entity and "ownership"
means the beneficial ownership of 50% or more of the equity securities of the
Entity.
1.4 "Agreement" shall mean this Service Agreement as amended from
time to time including any Exhibits attached hereto from time to time and the
executed Affiliate Agreements, if any.
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1.5 "Alternative" is defined in Section 2.5(f) of this Agreement.
1.6 "Arbitration Demand" is defined in Section 13.14(b) of this
Agreement.
1.7 "Arbitration Panel" is defined in Section 13.14(b) of this
Agreement.
1.8 "Basic Qualifications" is defined in Section 13.14(b) of this
Agreement.
1.9 "Business Continuity Plan" is defined in Section 13.3 of this
Agreement.
1.10 "Cardholder" means an individual or Entity which has a
Cardholder Account with an Issuer.
1.11 "Cardholder Account" means an arrangement between an individual
or an Entity and an Issuer which provides that the Entity may use one or more
Transaction Cards issued by the Issuer.
1.12 "cc:Mail Software" is defined in Section III - B of Exhibit "A"
to this Agreement.
1.13 "Core Processing Services" is defined in Section 3.1 of this
Agreement.
1.14 "Customer's Agent Bank" means an Entity which at any time during
the Term of this Agreement has an arrangement with Customer or an Affiliate of
Customer which (a) permits the Entity to act as an Issuer or an Acquirer and
obtain services related to the activities from either or both of Customer or one
or more of Customer's Affiliates, or (b) provides that an Entity may act as an
Issuer or Acquirer in conjunction with Customer or one or more of Customer's
Affiliates.
1.15 "Customer's Accounts" means the Cardholder Accounts and Merchant
Accounts of Customer or any of Customer's Transaction Card Affiliates.
1.16 "Customer's Issuer Affiliate" means an Affiliate of Customer
that acts as an Issuer (either alone or in conjunction with one of Customer's
Agent Banks) at any time during the Term.
1.17 "Customer's Proprietary Information" is defined in Section 10.1
of this Agreement.
1.18 "Customer's Transaction Card Affiliates" means any and all of
Customer's Issuer Affiliates and Customer's Agent Banks.
1.19 "Customer's Transaction Card Affiliate Agreement" shall mean an
agreement substantially in the form of Exhibit "C" which is executed by
Customer's Issuer Affiliates.
1.20 "Daily Amount" is defined in Section 12.2 of this Agreement.
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1.21 "Deconversion" means the removal of information concerning
Customer's Accounts from the FDR System.
1.22 "Dispute" is defined in Section 13.13 of this Agreement.
1.23 "Disputing Party" is defined in Section 13.14(a) of this
Agreement.
1.24 "Entity" means a corporation, partnership, sole proprietorship,
joint venture, or other form of organization.
1.25 "Failed Guideline" is defined in Section 2.7(a) of this
Agreement.
1.26 "Failed Month" is defined in Section 2.7(b) of this Agreement.
1.27 FDR's Proprietary Information" is defined in Section 10.2 of
this Agreement.
1.28 "FDR System" means the computer equipment, computer software and
related equipment and documentation used at any time and from time to time by
FDR to provide the services contemplated by this Agreement.
1.29 "FDR Settlement Rules" means the policies, rules and procedures
adopted by FDR from time to time and in effect from time to time to provide for
the payment of amounts due as the result of Interchange Settlement.
1.30 "Growth Credit" is defined in Section I-h of Exhibit "B" to this
Agreement.
1.31 "Indemnified Party" is defined in Section 5.3 of this Agreement.
1.32 "Indemnifying Party" is defined in Section 5.3 of this
Agreement.
1.33 "InfoSight Software" is defined in Section III - A of Exhibit
"A" to this Agreement.
1.34 "Insolvency Event" occurs, with respect to any party, when such
party:
(i) is dissolved, becomes insolvent, generally fails
to pay or admits in writing its inability generally to pay its
debts as they become due;
(ii) makes a general assignment, arrangement, or
composition agreement with or for the benefit of its creditors;
or
(iii) files a petition in bankruptcy or institutes any
action under federal or state law for the relief of debtors or
seeks or consents to the appointment of an administrator,
receiver, custodian, or similar official for the wind up of its
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business (or has such a petition or action filed against it and
such petition action or appointment is not dismissed or stayed
within thirty (30) days).
1.35 "Interchange" means the contracts, agreements, rules,
regulations and procedures governing the relationships between, or the actions
in accordance with the contracts, agreements, rules, regulations and procedures
by, any two or more Entities in connection with the Interchange Settlement.
1.36 "Interchange Settlement" means the process by which FDR, on
behalf of either or both of Customer or Customer's Transaction Card Affiliates,
(a) initiates payment for MasterCard and VISA Transaction Card Tickets presented
by Acquirers to Customer and Customer's Transaction Card Affiliates, (b)
receives payment for MasterCard and VISA Transaction Card Tickets presented by
Customer and Customer's Transaction Card Affiliates to Issuers, and (c) remits
and receives payments for chargebacks and other Interchange fees and expenses of
or payable by Customer or Customer's Transaction Card Affiliates.
1.37 "Issuer" means an Entity that has a Cardholder Account with a
Cardholder.
1.38 "Liquidated Damages" is defined in Section 9.5 of this
Agreement.
1.39 "MasterCard" means MasterCard International Incorporated or its
successors or assigns.
1.40 "Merchant" means an Entity that has the right to acquire or
otherwise acquires a Transaction Card Ticket as payment for goods, services, or
otherwise.
1.41 "Merchant Account" means an arrangement between an Acquirer and
a Merchant which permits a Merchant to present Transaction Card Tickets to the
Acquirer for payment through the Interchange. It is understood and agreed that
any Merchant Accounts of Customer hereunder shall be considered Processing
Merchants (i.e. - branch bank locations performing Merchant related transactions
such as authorizations, cash advances, etc.).
1.42 "Minimum Processing Fees" is defined in Section I-d of Exhibit
"B" to this Agreement.
1.43 "Net Settlement Amount" means the net dollar amount for each
business day of FDR of all (a) transactions processed for Customer and
Customer's Transaction Card Affiliates for the day determined in accordance with
the applicable rules of MasterCard, VISA and the FDR Settlement Rules, (b)
Interchange fees and expenses relating to Customer and Customer's Transaction
Card Affiliates, and (c) account expenses including overdraft charges, activity
charges, wire transfer fees and other charges relating to Customer and
Customer's Transaction Card Affiliates.
1.44 "Non-Core Processing Services" is defined in Section 3.1 of this
Agreement.
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1.45 "Non-Performance" is defined in Section 2.7(a) of this
Agreement.
1.46 "Notice" is defined in Section 2.5(f) of this Agreement.
1.47 "Old Year" is defined in Section I-a of Exhibit "B" to this
Agreement.
1.48 "Original Term" is defined in Section III-a of Exhibit "B" to
this Agreement.
1.49 "Performance Guidelines" is defined in Section 2.6 of this
Agreement.
1.50 "Processing Fees" means all fees and charges incurred (prior to
any Growth Credit for which Customer qualifies pursuant to Exhibit "B", Section
I-h) for services performed at the prices set forth in Exhibit "B", as adjusted
from time to time consistent with this Agreement, with the exception of Special
Fees and specifically excluding all charges for taxes and interest.
1.51 "Processing Year" is defined in Section III-a of Exhibit "B" to
this Agreement.
1.52 "Processing Year 1" is defined in Section III-a of Exhibit "B"
to this Agreement.
1.53 "Recovery 1 Software" is defined in Section III-H of Exhibit "A"
to this Agreement.
1.54 "Renewal Term" is defined in Section III-b of Exhibit "B" to
this Agreement.
1.55 "Scheduled Start-Up Date" is defined in Section 2.4 of this
Agreement.
1.56 "Settlement Account" is defined in Section 12.1 of this
Agreement.
1.57 "Settlement Late Payment Fee" is defined in Section 12.5 of this
Agreement.
1.58 "Settlement System" is defined in Section 12.1 of this
Agreement.
1.59 "Signing Bonus" is defined in Section I-g of Exhibit "B" to this
Agreement.
1.60 "Special Fees" means the tariff line rates, WATS lines rates,
data circuit charges or any other rates charged to FDR by a communications
common carrier, postage, courier and any other similar charges and methods of
reimbursement described in Exhibit "B".
1.61 "Start-Up" means the preparation of the FDR System for the entry
of Customer's and Customer's Transaction Card Affiliates' data relating to
Customer's Accounts.
1.62 "Term" means the Original Term together with any Renewal Term or
any other extension of this Agreement.
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1.63 "Total Annual Processing Fees" is defined in Section I-d of
Exhibit "B" to this Agreement.
1.64 "Transaction Card" means a payment card issued pursuant to a
license from MasterCard, VISA or any other card issuing organization for which
FDR currently provides service support. This shall include any credit card,
debit card or any small business account card, purchasing account card or
corporate travel and expense account card ("Commercial Card") program offered by
Customer.
1.65 "Transaction Card Ticket" means a record (whether paper,
magnetic, electronic or otherwise) which is created to evidence the use of a
Transaction Card as payment for goods, services, cash advances or otherwise or
for a credit or refund or otherwise.
1.66 "VISA" means, individually or collectively, as appropriate, VISA
U.S.A. Inc. or VISA INTERNATIONAL or either of their successors or assigns.
1.67 "Year 1 Minimum Processing Fee" is defined in Section I-d of
Exhibit "B" to this Agreement.
1.68 "Year 2000 Compliant" is defined in Section 11.1(d) of this
Agreement.
ARTICLE 2
SERVICES
2.1 BASIC SERVICES. FDR shall make available to and perform for
Customer and Customer's Transaction Card Affiliates the services described in
Exhibit "A" which are applicable to their respective Issuer and Acquirer
businesses or as specifically provided in Exhibit "A". Exhibit "A" and any
document or service referred to as Exhibit "A" shall be subject to revision by
FDR from time to time during the Term of this Agreement to reflect changes and
improvements to the FDR System or the services provided by FDR and offered
generally to FDR customers and to reflect any changes and improvements in the
specific services provided to Customer and Customer's Transaction Card
Affiliates; provided, however, that: (i) FDR shall not effect any change to the
FDR System which would eliminate or materially degrade the services provided by
FDR under this Agreement unless such change is required by the MasterCard or
VISA rules or regulations or applicable federal or state statutes, laws or
regulations applicable to FDR or its customers and (ii) FDR shall not increase
the fees set forth in Exhibit "B" (except as provided for in Exhibit "B",
Section 1, Paragraph (a)) pursuant to this Section 2.1.
2.2 COMMUNICATION LINKS. FDR from time to time shall install,
provide or cause to be installed or provided the means for communicating data
from its facilities or equipment to the facilities or equipment of Customer,
Customer's Transaction Card Affiliates and third parties designated by Customer
as FDR determines is desirable to perform this Agreement. The method
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of transmission and the media employed will be determined by FDR taking into
consideration relevant factors such as traffic type, inbound and outbound
message sizes, traffic loading distribution, and the equipment or devices which
are or may be used.
2.3 ANCILLARY SERVICES. The ancillary services to be provided by FDR
or made available to Customer and Customer's Transaction Card Affiliates are set
forth in Exhibit "A".
2.4 START-UP.
(a) FDR will provide, subject to any applicable approvals of
VISA or MasterCard, for completion of the Start-Up on or before December
18, 1997, or at an earlier or later date as may be mutually agreed upon
by FDR and Customer (the "Scheduled Start-Up Date"). To the extent that
FDR and Customer mutually agree, the Scheduled Start-Up Date may be
modified from time to time prior to Start-Up. FDR will use all
reasonable resources, including the assignment of adequate personnel to
assure timely performance of those functions required of FDR under the
Start-Up so as to enable Start-Up to be completed on or by the Scheduled
Start-Up Date.
(b) Customer will (i) use all reasonable resources,
including the assignment of adequate personnel to assure timely
performance of those functions required of Customer under the Start-Up,
and (ii) comply with any directions of FDR given thereunder so as to
enable Start-Up to be completed on or before the Scheduled Start-Up
Date.
(c) Except as otherwise provided herein, each party shall be
responsible for and pay all costs and expenses incurred by it in
connection with the Start-Up.
2.5 COMPLIANCE WITH LAWS.
(a) Prior to the Scheduled Start-Up Date, Customer will
review the parameter settings and options within the FDR System, as
described in the User Manuals set forth in Exhibit "A", Section 1, and
determine that FDR's System provides such features and options, which
will, if properly selected by or on behalf of Customer, allow Customer
and Customer's Transaction Card Affiliates to comply with all applicable
federal and state laws and contractual agreements of Customer and
Customer's Transaction Card Affiliates. To the extent that Customer
notifies FDR of any change in federal and state law, subject to the
limitations set forth below, FDR agrees to develop reasonable
enhancements to the FDR System responsive to the identified change in
federal and state law as specifically requested by Customer. The
obligation of FDR set forth in the previous sentence is subject to the
following limitations:
(i) the change in federal and state law is generally
applicable to a significant portion of FDR's client base and
does not relate solely to a requirement or preference of
Customer or Customer's Transaction Card Affiliates;
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(ii) the responsive enhancement requested by Customer
is consistent with the response requested by the majority of the
affected client base (Customer acknowledges that in many
instances, responsive enhancements will be mediated by certain
client advisory groups maintained by FDR and agrees that
development of an enhancement approved by such client advisory
groups as responsive to the change in law shall satisfy FDR's
obligations under this subsection (a));
(iii) FDR shall have a reasonable time from the date
Customer notifies FDR of the change in law and specifies the
requested enhancement in which to design, code, test and
implement the enhancement (in the determination of
reasonableness, the extent and impact of the change in law on
the FDR client base, the relative importance of other
enhancements, the complexity of the enhancement, and related
issues of impact and resource allocation shall be considered and
the effective date of the change in law shall not be
determinative); and
(iv) the responsive enhancement requested by Customer
does not impose a burden on FDR (or the FDR System) to determine
the facts not available on the FDR System, to make legal
interpretations or conclusions, or to in any way shift
Customer's and Customer's Transaction Card Affiliates'
compliance responsibility to FDR.
(b) Customer acknowledges and agrees that it is solely
responsible for monitoring legal developments applicable to the
operation of its business and Transaction Card operations, interpreting
applicable state and federal laws, determining the requirements for
compliance with all applicable state and federal laws, and maintaining
an ongoing compliance program. Consequently, Customer agrees that FDR
has no responsibility to monitor or interpret laws applicable to
Customer's or Customer's Transaction Card Affiliates' business, to
monitor or review the terms and conditions of Customer's or Customer's
Transaction Card Affiliates' Transaction Card programs or Customer's
selection of system options and programming, or to assure that
Customer's selection of any system option or programming (either alone
or acting in conjunction with other system options and programming
selected by Customer) is consistent with laws applicable to Customer and
Customer's Transaction Card Affiliates or the terms and conditions of
Customer's or Customer's Transaction Card Affiliates' credit agreements
with, or disclosure to, its Cardholders. FDR shall use its reasonable
best efforts to give Customer timely notice by bulletin, notice, or
other method, of all changes to the FDR System which are being made to
comply with any known changes in federal, state or card association
laws, rules, or regulations.
(c) FDR shall be entitled to rely upon and use, without
verification, any and all information, data and instructions any time
submitted to FDR by Customer having to do with
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Customer or Customer's Accounts, and FDR shall have no responsibility or
liability whatsoever for (i) the accuracy or inaccuracy thereof, (ii)
the wording or text authored or submitted by Customer to FDR, for
materials to be prepared or for other purposes, (iii) the wording or
text appearing on any forms, Transaction Cards or other materials
furnished by Customer to FDR, or (iv) any noncompliance of such
information, data, instruction, wording or text with applicable laws,
rules or regulations.
(d) If any change in the services provided by FDR hereunder
is required by the applicable operating rules of VISA and MasterCard
relating to the business of Customer, FDR shall notify Customer of such
modifications or changes and make modifications or changes, as necessary
to, (i) the FDR System and/or (ii) the manner and methods used to
provide the services hereunder as soon as practicable after FDR has been
notified of such required changes by VISA or MasterCard. In the event
such changes cannot reasonably be implemented, FDR shall provide
customer with reasonable alternatives to allow Customer to comply with
such requirements. Any such change or alternative required by the
applicable operating rules of VISA and MasterCard shall be made at FDR's
sole expense.
(e) If any enhancement developed by FDR pursuant to Section
2.5(a) is required by federal law, such enhancement shall be developed
by FDR at FDR's expense; provided, however, if any change in federal law
is not generally applicable to a significant portion of FDR's client
base, based on the number of Cardholder Accounts on file of such
clients, or if such change relates solely to a requirement or preference
of Customer, then subject to the provisions of Section 2.5(a)(iii) and
(iv), FDR will develop the requested enhancement at Customer's expense
or at the equal expense of Customer and any other FDR customers subject
to such federal law as appropriate. If any enhancement developed by FDR
pursuant to Section 2.5(a) is required by state law and is not generally
applicable to a significant portion of FDR's client base, based on the
number of Cardholder Accounts on file of such clients, or if such change
relates solely to a requirement or preference of Customer, then such
enhancement shall be developed subject to the provisions of Section
2.5(a)(iii) and (iv) by FDR at the expense of Customer or at the equal
expense of Customer and any other FDR customers subject to such state
law as appropriate.
(f) If Customer, in its reasonable determination, concludes
that any enhancement which FDR developed pursuant to the notification
from Customer regarding the change in federal or state law does not
allow Customer to be in compliance with the applicable federal or state
law, then Customer shall notify FDR in writing (the "Notice"). The
Notice shall specify in reasonable detail Customer's basis for its
position together with all information regarding the requirements which
Customer reasonably needs to be in compliance with the federal or state
law. After receipt of the Notice, FDR shall provide Customer with any
alternative enhancements which FDR can reasonably propose based on the
Notice from Customer (the "Alternative"). If Customer, in its reasonable
determination, concludes that the Alternative does not allow Customer to
be in compliance with the applicable federal or state law, then Customer
may elect to terminate this Agreement; provided, however, that this
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termination option is exercised within sixty (60) days after Customer
receives the Alternative, and provided that such termination shall
become effective on a date specified by Customer, which date shall not
be later than nine (9) months after Customer's delivery to FDR of a
written notice of its intention to so terminate this Agreement. Other
than payment to FDR of the unamortized portion of the Signing Bonus as
specified in Section 9.4 of this Agreement, Customer shall not be
responsible for any other termination fees, including costs of
Deconversion, if this Agreement is terminated pursuant to this Section
2.5(f).
2.6 PERFORMANCE GUIDELINES. While this Agreement is in effect, FDR
shall at all times maintain the necessary telephone lines, computer capacity and
staff necessary to provide service in accordance with the list of performance
guidelines set forth in Exhibit "D" as such list may, from time to time, be
amended by the parties (the "Performance Guidelines"). By the twentieth (20th)
day of each calendar month, FDR agrees to provide Customer with a monthly report
setting forth the Performance Guidelines and its performance during the just
concluded calendar month in connection with those services which Customer used
during the calendar month.
2.7 FAILED PERFORMANCE.
(a) During any calendar month, each failure to achieve a
Performance Guideline shall constitute a "Failed Guideline". If FDR,
during any six (6) consecutive calendar months, fails to achieve the
same Performance Guideline, then such failure shall constitute "Non
Performance" and the sole and exclusive provisions of Section 3.1 of
this Agreement shall not apply for such Failed Guideline for the
remainder of the Tenn.
(b) In addition to the provisions of paragraph (a) of this
Section 2.7, if FDR fails to achieve five (5) or more Performance
Guidelines in any one calendar month, then such month shall be
considered to be a "Failed Month" for purposes of this Section 2.7 (b).
If FDR experiences three (3) consecutive Failed Months, then FDR shall
provide Customer with a credit equal to two percent (2%) of the
Processing Fees paid during the third such Failed Month. If FDR
experiences four (4) consecutive Failed Months, then FDR shall provide
Customer with a credit equal to 3% of the Processing Fees paid during
the fourth such Failed Month. If FDR experiences five (5) consecutive
Failed Months, then FDR shall provide Customer with a credit equal to
four percent (4%) of the Processing Fees paid during the fifth such
Failed Month. If FDR experiences six (6) consecutive Failed Months, then
Customer, at its election, may terminate this Agreement; provided,
however, that this termination option is exercised within sixty (60)
days after Customer receives notice of FDR's sixth Failed Month, and
provided that such termination shall become effective on a date
specified by Customer, which date shall be not later than nine (9)
months after Customer's delivery to FDR of a written notice of its
intention to so terminate this Agreement.
2.8 SOLE REMEDY. Customer hereby agrees that due to the difficulty
of determining and calculating its damages upon FDR's failure to perform in
accordance with the Performance Guidelines, the remedies, as set forth in
Sections 2.7(a), and 2.7 (b) are its sole and exclusive
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remedies for such failures and that Customer hereby elects to waive any and all
other remedies to which Customer may be entitled under this Agreement, at law or
in equity, based on the failure of FDR to perform in accordance with the
Performance Standards; provided, however, that nothing in this Section 2.7 shall
be construed as a waiver of any of Customer's rights under any other provision
of this Agreement which are not based on the failure of FDR to perform in
accordance with the Performance Guidelines.
ARTICLE 3
EXCLUSIVITY AND EXECUTION BY AFFILIATION
3.1 SOLE AND EXCLUSIVE PROVIDER. During the Term of this Agreement,
FDR shall be the sole and exclusive third party provider to Customer and
Customer's Transaction Card Affiliates of all services set forth in Exhibit "A"
of this Agreement which are not preceded by an * ("Core Processing Services").
Neither Customer nor Customer's Transaction Card Affiliate shall agree with any
third party to have such third party perform or provide any of the Core
Processing Services. Those services set forth in Exhibit "A" which are preceded
by an * shall be known as "Non-Core Processing Services". Customer and/or
Customer's Transaction Card Affiliate may perform or provide, or have a third
party perform or provide, any of the Non-Core Processing Services for themselves
or for each other. If Customer, after the effective date of this Agreement,
elects to discontinue use of any or all of the Cardholder Support Services
described in Section III G of Exhibit "A", then Customer shall provide FDR with
written notice of such discontinuance at least ninety (90) days prior thereto.
Such notice may not be given prior to February 28, 1998.
3.2 EXECUTION OF AGREEMENT BY CUSTOMER'S AFFILIATES. Subject to the
terms and conditions of Exhibit "C", each of Customer's Issuer Affiliates shall
be or become a party to this Agreement and each has executed a Customer
Transaction Card Affiliate Agreement or shall execute Customer Transaction Card
Affiliate Agreement when it becomes a Customer Issuer Affiliate. Customer and
each of Customer's Issuer Affiliates, in addition to the terms of Customer
Transaction Card Affiliate Agreement, covenant and represent the following:
(a) Customer shall have full authority to represent
Customer's Issuer Affiliate and to act fully on Customer's Issuer
Affiliate's behalf in connection with this Agreement and the Customer
Transaction Card Affiliate Agreement including the negotiating with FDR
of any amendments, extensions or revisions of this Agreement or the
Customer Transaction Card Affiliate Agreement, the asserting,
negotiating and resolving any controversy, dispute or claim under this
Agreement or the Customer Transaction Card Affiliate Agreement and the
execution or delivery of any documents.
(b) If Customer shall fail to pay any amounts due under this
Agreement (and payment of such amounts by Customer's Transaction Card
Affiliates are not specifically excluded in the Customer Transaction
Card Affiliate Agreement), including but not limited to any Processing
Fees, Special Fees, or other fees, taxes, interest payments, charges, or
amounts due or payable by Customer, Customer's Issuer Affiliate shall
pay FDR on demand
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the portion of the amounts due from Customer to FDR for services
performed by FDR for or on behalf of Customer's Issuer Affiliate, as
determined by FDR, which approximates the percentage that the Processing
Fees relating to processing for Customer's Issuer Affiliate are of the
total Processing Fees under this Agreement.
ARTICLE 4
PAYMENT FOR SERVICES
4.1 FEES AND CHARGES.
(a) The initial Processing Fees for the services to be
performed under this Agreement are set forth in Exhibit "B". Exhibit "B"
also contains initial prices to be charged or methods for computing
charges by FDR for Special Fees such as but not limited to
reimbursements, assessments and pass through fees. If FDR commences to
offer any new services or products to its customers after the execution
of this Agreement and Customer or Customer's Transaction Card Affiliates
use any such service or product, then FDR shall provide and Customer and
Customer's Transaction Card Affiliates shall receive any such service or
product at FDR's then current fees and charges, as such fees and charges
may be increased pursuant to Exhibit "B", Section I.
(b) Six (6) months following the execution of this
Agreement, and annually thereafter, the parties may review the prices
charged by FDR for Core Processing Services. If either party determines,
in the exercise of its reasonable business judgement, that pricing for
Core Processing Services does not properly reflect (i) in the case of
FDR, FDR's ability to recover the cost of delivering such Core
Processing Services, or (ii) in the case of Customer, the price that
Customer would pay for similar services from an unaffiliated third party
(considering factors such as, but not limited to, the mix of services,
volumes associated therewith, service levels, features, functionality,
contractual terms and quality of any such similar services) then the
parties may agree to negotiate, in good faith, an appropriate revision
to the prices charged for Core Processing Services.
(c) Within sixty (60) days following the Start-Up Date, FDR
and Customer will review the method of computing charges for the
Cardholder Support Services set forth in Section III-G of Exhibit "A" to
this Agreement. If Customer and FDR determine, in the exercise of their
reasonable business judgement, that each party would benefit by
computing charges for the Cardholder Support Services on a talk-time or
other basis, rather than per active account basis, then the parties
agree to amend this Agreement to reflect such alternative method of
computing charges. If the parties are unable to agree on an alternative
method for computing charges for the Cardholder Support Services, then
the current pricing structure shall remain in effect.
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ARTICLE 5
INDEMNIFICATION
5.1 CUSTOMER'S INDEMNIFICATION. Customer and Customer's Transaction
Card Affiliates shall indemnify and hold harmless FDR and its directors,
officers, employees, agents and affiliates from and against any and all claims,
liabilities, losses and damages (including reasonable attorney fees, expert
witness fees, expenses and costs of settlement) arising out of or with respect
to this Agreement, to the extent that the claim, liability, loss or damage is
caused by, relates to or arises out of:
(a) The negligence of Customer or any of Customer's
Transaction Card Affiliates;
(b) The breach by Customer or any of Customer's Transaction
Card Affiliates of any promises or covenants of Customer or Customer's
Transaction Card Affiliates set forth in Article 12 of this Agreement,
including but not limited to any amount which FDR may be called upon to
pay under the applicable rules of VISA or MasterCard with respect to any
Interchange obligations of Customer or Customer's Transaction Card
Affiliates following the failure of FDR to receive any Daily Amount; or
(c) FDR's payment of fees and charges relating to Customer's
Accounts pursuant to Section 12.11, Trailing Activity.
Customer and Customer's Transaction Card Affiliates shall not have any
obligation to indemnify FDR against any claim, liability, loss or damage FDR or
its directors, officers, employees, agents or affiliates may suffer arising
solely out of FDR's negligent performance of any of the services provided under
this Agreement.
5.2 FDR's INDEMNIFICATION. FDR shall indemnify Customer and
Customer's Transaction Card Affiliates, and their respective directors,
officers, employees and agents from and against any and all claims, liabilities,
losses or damages (including reasonable attorney fees, expert witness fees,
expenses and costs of settlement) arising out of or with respect to FDR's
negligent performance of any of the services provided under this Agreement,
provided that FDR's obligation to indemnify Customer and Customer's Transaction
Card Affiliates and their respective directors, officers, employees and agents,
shall be limited to:
(a) The actual cost to FDR of reprocessing to correct the
negligent performance; and
(b) The additional out-of-pocket expenses incurred by
Customer and Customer's Transaction Card Affiliates as a direct result
of the negligent performance.
5.3 NOTIFICATION. In the event a claim, suit or proceeding by a
third party for which indemnification may be available under this Agreement is
made or filed against a party or any Entity,
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the party against which the claim, suit or proceeding is made (the "Indemnified
Party"), shall promptly notify the other party (the "Indemnifying Party") in
writing of the claim, suit or proceeding. The Indemnifying Party, within thirty
(30) days, or such shorter period as is required to avoid any prejudice in the
claim, suit or proceeding, after the notice, may elect to defend, compromise, or
settle the third party claim, suit or proceeding at its expense. In any third
party claim, suit or proceeding which the Indemnifying Party has elected to
defend, compromise or settle, the Indemnifying Party shall not after the
election be responsible for the expenses, including counsel fees, of the
Indemnified Party but the Indemnified Party may participate therein and retain
counsel at its own expense. In any third party claim, suit or proceeding the
defense of which the Indemnifying Party shall have assumed, the Indemnified
Party will not consent to the entry of any judgment or enter into any settlement
with respect to the matter without the consent of the Indemnifying Party and the
Indemnifying Party will not consent to the entry of any judgment or enter into
any settlement affecting the Indemnified Party to the extent that the judgment
or settlement involves more than the payment of money without the written
consent of the Indemnified Party. The Indemnified Party shall provide to the
Indemnifying Party all information, assistance and authority reasonably
requested in order to evaluate any third party claim, suit or proceeding and
effect any defense, compromise or settlement.
5.4 CLAIMS PERIOD. Any claim for indemnification under this
Agreement must be made prior to the earlier of:
(a) One year after the party claiming indemnification
becomes aware of the event for which indemnification is claimed, or
(b) One year after the earlier of the termination of this
Agreement or the expiration of the Term of this Agreement.
ARTICLE 6
LIMITATION OF LIABILITY
6.1 LIMITATION ON LIABILITY.
(a) Except as provided in Section 6.1(b), FDR's cumulative
liability for any loss or damage, direct or indirect, for any cause
whatsoever (including, but not limited to those arising out of or
related to this Agreement) with respect to claims relating to events in
any one Processing Year shall not under any circumstances exceed the
amount of the Processing Fees paid to FDR pursuant to this Agreement for
services performed in the immediately preceding twelve (12) month
period, and in the case of the Processing Year 1, the Year 1 Minimum
Processing Fees specified in Section I of Exhibit "B".
(b) Notwithstanding the limitation of liability provided for
in Section 6.1(a), in the event that FDR's liability in connection
with this Agreement arises out of the gross negligence or wilful
misconduct of FDR with respect to those obligations of FDR contained
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in Section 2.5 of this Agreement, then FDR's liability in connection
with this Agreement shall not exceed two (2) times the amount of
Processing Fees paid to FDR for services performed in the immediately
preceding twelve (12) month period, and, in the case of Processing Year
1, the Year 1 Minimum Processing Fees specified in Section I of Exhibit
"B".
6.2 NO SPECIAL DAMAGES. IN NO EVENT SHALL FDR OR CUSTOMER BE LIABLE
UNDER ANY THEORY OF TORT, CONTRACT, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE
THEORY FOR ANY LOST PROFITS, EXEMPLARY, PUNITIVE, SPECIAL, INCIDENTAL, INDIRECT
OR CONSEQUENTIAL DAMAGES, EACH OF WHICH IS HEREBY EXCLUDED BY AGREEMENT OF THE
PARTIES REGARDLESS OF WHETHER OR NOT FDR OR CUSTOMER HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
ARTICLE 7
DISCLAIMER OF WARRANTIES
FDR SPECIFICALLY DISCLAIMS ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED
ARISING OUT OF OR RELATED TO THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
NONINFRINGEMENT, EACH OF WHICH IS HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES.
FDR, CUSTOMER AND CUSTOMER'S TRANSACTION CARD AFFILIATES HEREBY AGREE THAT FDR'S
OBLIGATIONS TO CUSTOMER AND CUSTOMER'S TRANSACTION CARD AFFILIATES ARE RELATED
TO FDR PROVIDING SERVICES, THAT THIS AGREEMENT IS A SERVICE AGREEMENT FOR
PURPOSES OF THE UNIFORM COMMERCIAL CODE AND THEREFORE THE PROVISIONS OF THE
UNIFORM COMMERCIAL CODE SHALL NOT APPLY TO THIS AGREEMENT.
ARTICLE 8
TERM OF AGREEMENT
8.1 TERM AND RENEWALS. This Agreement is effective from the date
hereof and shall extend for the Original Term and Renewal Term(s) set forth in
Exhibit "B", Section III.
ARTICLE 9
TERMINATION
9.1 TERMINATION BY FDR. Despite anything to the contrary herein
contained, FDR, at its option, may terminate this Agreement under the following
circumstances:
(a) If Customer fails to establish the account required by
Section I-b of Exhibit "B" within three (3) business days after written
notice to Customer of its failure to establish the account or within
thirty (30) business days after written notice to Customer of its
failure thereafter to maintain the account during the Term of this
Agreement;
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(b) If FDR is unable to receive payment from Customer
because sufficient funds are not available in the account established
pursuant to Section I-b of Exhibit "B" and Customer, within thirty (30)
business days after written notice to Customer, fails to provide and
maintain sufficient funds in the account to permit FDR to receive full
payment from the account or within ten (10) business days after written
notice to Customer if FDR has given notice more than three times in any
twelve month period;
(c) Immediately without notice upon the termination of
Customer's membership in VISA or MasterCard or either of their
successors in interest, or if FDR has the right to give notice to
MasterCard or VISA under Section 12.4 whether or not the notice is
given;
(d) Immediately, without notice, with respect to any of
Customer's Transaction Card Affiliates upon termination of such
Transaction Card Affiliates' membership in VISA or MasterCard or either
of their successors in interest, or if FDR has the right to give notice
to MasterCard or VISA under Section 12.4 with respect to such
Transaction Card Affiliate, whether or not notice is given.
(e) If Customer fails to pay any Daily Amount when required
under Article 12 of this Agreement and does not cure the failure within
two (2) business days after written notice to Customer of the failure or
within one (1) business day after written notice to Customer if FDR has
given notice of a failure to pay more than three times in any twelve
month period;
(f) If Customer, without explanation, fails to pay any
amount due under this Agreement which does not give rise to the right to
terminate under any other provision of this Section 9.1 within thirty
(30) business days after written notice to Customer of its failure to
pay the amount;
(g) Upon twenty-four (24) hours notice by FDR if FDR has
terminated Interchange Settlement of transactions on behalf of Customer
or Customer's Transaction Card Affiliates pursuant to Section 12.7 for
more than ten (10) consecutive days or for more than twenty (20) days in
any Processing Year;
(h) If any Insolvency Event occurs with respect to Customer.
The rights of FDR to terminate under this Section 9.1 are cumulative and the
existence of the right under any provision or subsection is not exclusive of the
right under any other provision or subsection.
9.2 TERMINATION BY CUSTOMER. Despite anything to the contrary herein
contained, Customer, at its option, may terminate this Agreement under the
following circumstances:
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(a) Immediately, without notice to FDR, in the event any
Insolvency Event occurs with respect to FDR.
(b) With advance written notice if directed to terminate
this Agreement by the Federal Deposit Insurance Corporation, the Office
of the Comptroller of the Currency, the Federal Financial Institutions
Examination Council, the Office of Thrift Supervision and, with respect
to Customer's Transaction Card Affiliate, regulatory banking authorities
of the State of California.
(c) If FDR shall fail to perform or observe any of the
material terms, covenants and conditions to be performed hereunder so
that Customer, considering FDR's performance as a whole, is not
receiving the services for which it contracted and such failure
materially jeopardizes Customer's ability to operate its business and
continues unremedied for a period of sixty (60) days after written
notice from Customer to FDR specifying the failure and demanding that
the same be remedied; or
(d) As provided in Sections 2.5(f) or 2.7(b).
9.3 EFFECT OF TERMINATION. Upon the termination of this Agreement,
FDR shall have no further obligation to provide services to Customer or
Customer's Transaction Card Affiliates and all outstanding unpaid amounts due
and owing to FDR under the terms of this Agreement shall become immediately due
and payable. The termination of this Agreement shall not affect the following:
(a) The obligation of Customer to pay for services rendered
or any other obligation or liability owing or which becomes owing under
this Agreement whether the obligations arise prior to or after the date
of termination including the obligations to make the payments provided
in Sections 9.4, 9.5, 12.1 and Section I of Exhibit "B";
(b) The obligations set forth in this Agreement in
connection with the InfoSight Software, the cc:Mail Software, the
Recovery 1 Software and the HNC Software;
(c) The provisions of Article 5 or any other indemnification
obligations of either party;
(d) The provisions of Article 6;
(e) The provisions of Article 7; and
(f) The provisions of Article 10 or any other
confidentiality obligations of either party.
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9.4 PAYMENTS UPON TERMINATION. Despite anything in this Agreement to
the contrary, if FDR terminates this Agreement in accordance with the provisions
of Section 9.1 (other than as provided for in Section 9.1(d)) at any time prior
to the expiration of the Term, Customer shall pay to FDR upon the termination,
and prior to Deconversion, an amount equal to the sum of:
(a) Minimum Processing Fees, as set forth in Section I-d of
Exhibit "B", for the Processing Year in which the termination occurs
(after crediting Customer for any Processing Fees paid for services
provided in the Processing Year); and
(b) Liquidated Damages calculated as set forth
in Section 9.5.
In addition, in the event that this Agreement is terminated, for any reason,
prior to the conclusion of the Original Term, Customer hereby agrees to pay FDR
an amount equal to the Signing Bonus; provided, that such amount shall be
reduced by an amount equal to one-sixtieth (1/60) of the Signing Bonus for each
whole calendar month of the Original Term which has elapsed prior to the
effective date of such termination.
9.5 LIQUIDATED DAMAGES. The prices for services under this Agreement
were determined by mutual agreement based upon certain assumed volumes of
processing activity and the length of the Term of this Agreement. Customer
acknowledges that without the certainty of revenue from the Year 1 Minimum
Processing Fees and the Minimum Processing Fees provided in Section I of Exhibit
"B", FDR would have been unwilling to provide processing services at the prices
set forth in this Agreement. The parties agree it would be difficult or
impossible to ascertain FDR's actual damages for a termination or other breach
of this Agreement by Customer resulting in a termination of this Agreement
before the end of the Term. The parties further agree that an amount equal to
the sum of the present values of the payment in each full Processing Year which
remains during the Term of this Agreement in an amount equal to thirty five
percent (35%) of the Year 1 Minimum Processing Fee or Minimum Processing Fees,
as applicable, for the Processing Year in which termination occurs (the
"Liquidated Damages") is a reasonable estimation of the actual damages which FDR
would suffer if FDR were to fail to receive the processing business for the full
Term. In determining the present value of the amount, an interest rate equal to
the three (3) month Treasury Bill Rate, as quoted by The Wall Street Journal for
the date on which termination occurs, or if not available on the date of
termination, as soon thereafter as the next edition of The Wall Street Journal
is published, shall be assumed and the payments shall be assumed to be made on
the first day of each Processing Year. Each party acknowledges and agrees, after
taking into account the terms of this Agreement and all relevant circumstances
at the date hereof, that the Liquidated Damages payable under this Section 9.5
represents a reasonable and genuine pre-estimate of the damages which would be
suffered by FDR in the event of early termination of this Agreement and does not
constitute a penalty. Despite the foregoing, nothing in this Agreement shall
limit FDR's right to recover from Customer or Customer's Transaction Card
Affiliates (a) any amounts advanced by FDR on behalf of Customer or Customer's
Transaction Card Affiliates for Interchange Settlement, (b) any amounts for
which Customer or Customer's Transaction Card Affiliates are liable other than
for Processing Fees, or
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(c) any payment under any provision for indemnification under this Agreement.
Nothing in this Agreement shall limit the right of any party to this Agreement
to seek injunctive relief, to the extent available, in respect of breaches of
this Agreement.
ARTICLE 10
CONFIDENTIAL NATURE OF DATA
10.1 CUSTOMER'S PROPRIETARY INFORMATION. FDR shall not obtain any
proprietary rights in any proprietary or confidential information which has been
or at any time after the date of this Agreement is disclosed, directly or
indirectly, to FDR by Customer or any of Customer's Transaction Card Affiliates
("Customer's Proprietary Information"). FDR shall maintain in confidence and
shall not disclose to any third party, except as otherwise provided herein,
Customer's Proprietary Information and FDR agrees that such information will be
used by FDR only to perform services in accordance with this Agreement and for
internal research and development with the intent of improving the Services or
other services to be offered pursuant to this Agreement. FDR agrees to return to
Customer upon the expiration or termination of this Agreement and payment for
Deconversion as provided in Section I of Exhibit "B" and upon written request
from Customer, all or any requested portion of Customer's Proprietary
Information including, but not limited to:
Cardholder Master Files
Merchant Master Files
Agent Bank Master Files
Cardholder Revolving Transaction Files
CIS Memo Files
Authorizations, posted transactions, statement files, and all
other data relating to Customer's Accounts
10.2 FDR'S PROPRIETARY INFORMATION. Neither Customer nor Customer's
Transaction Card Affiliates shall obtain any proprietary rights in any
proprietary or confidential information which has been or at any time after the
date of this Agreement is disclosed, directly or indirectly, to Customer or any
of Customer's Transaction Card Affiliates by FDR, including without limitation,
any data or information that is a trade secret or competitively sensitive
material, FDR's user manuals, screen displays and formats, FDR's computer
software and documentation, software performance results, flow charts and other
specifications (whether or not electronically stored), data and data formats
(collectively, "FDR's Proprietary Information") whether any of the materials are
developed or purchased specifically for performance of this Agreement or
otherwise. Customer agrees to, and shall cause its Affiliates to, return to FDR
all of FDR's Proprietary Information upon the expiration or termination of this
Agreement.
10.3 CONFIDENTIALITY OF AGREEMENT. Except as required by law,
Customer shall keep confidential and not disclose, and shall cause its
Affiliates and their respective directors, officers, employees, representatives,
agents and independent contractors to keep confidential and not
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disclose, any of the terms and conditions of this Agreement to any third party
without the prior written consent of FDR.
10.4 CONFIDENTIALITY. FDR, Customer and Customer's Transaction Card
Affiliates agree to maintain Customer's Proprietary Information and FDR's
Proprietary Information, respectively, in strict confidence. Without limiting
the generality of the foregoing, FDR, Customer and Customer's Transaction Card
Affiliates each agree:
(a) Not to disclose or permit any other person or Entity
access to Customer's Proprietary Information or FDR's Proprietary
Information, as appropriate, except that the disclosure or access shall
be permitted to an employee, officer, director, agent, representative,
external or internal auditors or independent contractor of the party
requiring access to the same in the course of his or her employment or
services;
(b) To ensure that its employees, officers, directors,
agents, representatives and independent contractors are advised of the
confidential nature of Customer's Proprietary Information and FDR's
Proprietary Information, as appropriate, and are precluded from taking
any action prohibited under this Article 10, provided that in any event
Customer and FDR shall each be liable for any breach of this Article 10
by their respective employees, officers, directors, agents,
representatives and independent contractors;
(c) Not to alter or remove any identification, copyright or
proprietary rights notice which indicates the ownership of any part of
Customer's Proprietary Information or FDR's Proprietary Information, as
appropriate; and
(d) To notify the other promptly and in writing of the
circumstances surrounding any possession, use or knowledge of Customer's
Proprietary Information or FDR's Proprietary Information, as
appropriate, at any location or by any Entity other than those
authorized by this Agreement.
10.5 RELEASE OF INFORMATION. Despite the foregoing, Customer agrees
that Customer's Proprietary Information may be made available to VISA,
MasterCard or to supervisory or regulatory authorities of Customer or Customer's
Transaction Card Affiliates upon the written request of the Entity and notice to
Customer.
10.6 EXCLUSIONS. Nothing in this Article 10 shall restrict either
party with respect to information or data identical or similar to that contained
in Customer's Proprietary Information or FDR's Proprietary Information, as
appropriate, but which:
(a) That party rightfully possessed before it received the
information from the other as evidenced by written documentation;
(b) Subsequently becomes publicly available through no fault
of that party;
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(c) Is subsequently furnished rightfully to that party by a
third party (no Affiliate of Customer shall be considered to be a third
party) not known to be under restrictions on use or disclosure;
(d) Is independently developed by an employee, agent or
contractor of such party; or
(e) Is required to be disclosed by law, regulation or court
order, provided that the disclosing party will exercise reasonable
efforts to notify the other party prior to disclosure.
10.7 REMEDY. In the event of any breach of this Article 10, the
parties agree that the non-breaching party will suffer irreparable harm and the
total amount of monetary damages for any injury to the non-breaching party from
any violation of this Article 10 will be impossible to calculate and will
therefore be an inadequate remedy. Accordingly, the parties agree that the
non-breaching party shall be entitled to temporary and permanent injunctive
relief against the breaching party, its employees, officers, directors, agents,
representatives or independent contractors, and the other rights and remedies to
which the non-breaching party may be entitled to at law, in equity and under
this Agreement for any violation of this Article 10. The provisions of this
Article 10 shall survive the expiration or termination of this Agreement.
ARTICLE 11
REPRESENTATIONS
11.1 FDR'S REPRESENTATIONS. FDR represents and warrants that:
(a) It is a corporation validly organized and existing under
the laws of the State of Delaware;
(b) It has full power and authority under its organizational
documents and the laws of the State of Delaware to execute and deliver
this Agreement and to perform its obligations hereunder;
(c) It has by proper action duly authorized the execution
and delivery of this Agreement and when validly executed and delivered
this Agreement shall constitute a legal, valid and binding Agreement of
FDR enforceable in accordance with its terms; and
(d) The execution and delivery of this Agreement and the
consummation of the transaction herein contemplated does not conflict in
any material respect with or constitute a material breach or material
default under its organizational documents or under the terms and
conditions of any documents, agreements or other writings to which it is
a party.
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(e) FDR represents and warrants that the Services shall be
Year 2000 Compliant by December 31, 1999. "Year 2000 Compliant" means
that, for mission-critical applications:
(i) date data from at least 1900 through 2049 will
process without error or interruption due solely to the change
in century, in any level of computer hardware, software or
services FDR provides, including, but not limited to, microcode,
firmware, system and application programs, files, databases and
computer services;
(ii) there will be no loss of any functionality of
the Services due solely to the change in century, with respect
to the introduction, processing or output of records containing
dates falling on or after January 1, 2000;
(iii) On and after January 1, 2000, Services that FDR
provides will continue to be interoperable, in the same manner
as they are prior to January 1, 2000, with software and hardware
which may deliver records to, receive records from or interact
with the Services in the course of processing data, provided
that such other software and hardware uses a century windowing
or interpretive approach (with a pivot year of 50).
(f) The Services design shall accommodate, at a minimum, all
of the following: (i) date data century recognition; (ii) calculations
which accommodate same- and multi-century formulas and date values; and
(iii) implied century on input/output of data.
11.2 CUSTOMER'S REPRESENTATIONS. Customer represents and warrants
that:
(a) It is a corporation validly organized and existing under
the laws of the California;
(b) It has full power and authority under its organizational
documents and the laws of the California to execute and deliver this
Agreement and to perform its obligations hereunder;
(c) It has by proper action duly authorized the execution
and delivery of this Agreement and when validly executed and delivered
this Agreement shall constitute a legal, valid and binding agreement of
Customer enforceable in accordance with its terms; and
(d) The execution and delivery of this Agreement and the
consummation of the transaction herein contemplated does not conflict in
any material respect with or constitute
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a material breach or material default under its organizational documents
or under the terms and conditions of any documents, agreements or other
writings to which it is a party.
(e) Customer represents and warrants that any hardware or
software provided by Customer or its vendors which is intended to
deliver records to, receive records from or interact with the Services
is Year 2000 Compliant as defined in this Section.
(f) Customer agrees to cooperate fully, and to ensure that
its vendors cooperate fully, with FDR to ensure the interoperability of
the Services with hardware and software of the Customer or its vendors.
FDR shall have the right, at its discretion, to reject any data file
which it in good faith believes will interfere with the ability of the
Services to be Year 2000 Compliant.
11.3 FINANCIAL INFORMATION. In 1998, Customer shall, on quarterly
basis, provide FDR with current copies of Customer's Balance Sheet and Income
Statements in order to allow FDR to monitor Customer's financial status. In the
event that Customer, in the reasonable opinion of FDR, is unable to pay its
debts in the ordinary course of business or as they become due, or in the
reasonable opinion of FDR Customer is unable to perform its obligations under
this Agreement, then the parties agree to negotiate, in good faith, can
amendment to or a revision of this Agreement to reflect Customer's changed
financial status. All information provided under this Section 11.3 shall be
Customer's Proprietary Information and shall be subject to the provisions of
Article 10 of this Agreement.
ARTICLE 12
TRANSACTION SETTLEMENT
12.1 INTERCHANGE SETTLEMENT ACCOUNT. In order for FDR to provide its
services to Customer and Customer's Transaction Card Affiliates pursuant to this
Agreement, it is necessary for FDR to handle and settle Interchange Settlement
for Customer and Customer's Transaction Card Affiliates through the
international Interchange networks of MasterCard and VISA. It shall be the
responsibility of Customer and Customer's Transaction Card Affiliates to provide
ICA and BIN numbers from MasterCard and VISA, respectively, for use by FDR in
the settlement of transactions for Customer and Customer's Transaction Card
Affiliates. Customer and Customer's Transaction Card Affiliates understand that
FDR handles the Interchange Settlement with MasterCard and VISA for its clients
including Customer and Customer's Transaction Card Affiliates on a net
settlement basis (the "Settlement System"). To facilitate the Settlement System,
FDR has established, will establish or will direct Customer to establish and may
in the future establish or direct Customer to establish one or more interchange
settlement Central Clearing Accounts (collectively the "Settlement Account") at
one or more banks.
12.2 TRANSFER OF FUNDS. FDR shall calculate and inform Customer on
each business day of the amount of funds to be transferred (the "Daily Amount")
as the result of (a) current transaction processing, and (b) funding required
for incoming transactions of Customer and
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Customer's Transaction Card Affiliates. If the Daily Amount is negative,
Customer must transfer to the Settlement Account, by the close of business of
the Federal Reserve System in New York, an amount equal to the Daily Amount. If
the Daily Amount is positive, FDR will transfer to Customer, or will cause
MasterCard or VISA to transfer to Customer, immediately available funds equal to
the Daily Amount prior to the close of business of the Federal Reserve System in
New York on such date.
12.3 DAILY AMOUNT. The Daily Amount shall equal:
(a) The Net Settlement Amount for Customer and Customer's
Transaction Card Affiliates, plus
(b) The amount necessary to fund incoming Interchange
transactions not yet processed, determined in accordance with the FDR
Settlement Rules, minus
(c) The amount previously advanced by Customer with respect
to prior incoming Interchange transactions for which processing is
complete.
12.4 FAILURE TO TRANSFER. In the event of the failure of Customer on
any business day when required by the terms of this Agreement or the FDR
Settlement Rules, to transfer the Daily Amount to the Settlement Account, FDR
may refuse, after two (2) business days' written notice to Customer and without
incurring any liability to Customer or Customer's Transaction Card Affiliates,
to act as Customer's agent in discharging any VISA or MasterCard Interchange
obligations of Customer and Customer's Transaction Card Affiliates and shall
have the right to immediately notify MasterCard and VISA that it will no longer
cause the MasterCard or VISA Interchange obligations of Customer and Customer's
Transaction Card Affiliates to be discharged. In addition to the foregoing, FDR
may take such actions with respect to Customer's and Customer's Transaction Card
Affiliate's obligations under the Settlement System as FDR deems reasonable to
protect FDR or its customers from any loss arising from Customer's non-payment
of the Daily Amount. If Customer, within two (2) business days after written
notice from FDR pays FDR the Daily Amount which Customer had failed to transfer
to the Settlement Account together with late payment fees as set forth in
Section 12.5 of this Agreement, then FDR shall continue to act as Customer's
agent in discharging Customer's VISA or MasterCard Interchange Settlement
obligations.
12.5 SETTLEMENT LATE PAYMENT FEE. In addition to any other provisions
in this Agreement, in the event of Customer's failure to transfer or make
available the Daily Amount for any business day, Customer shall pay to FDR a
late payment fee (the "Settlement Late Payment Fee") which shall be equal to the
amount Customer and Customer's Transaction Card Affiliates would have been
required to pay as a late payment fee under MasterCard and VISA rules. The
amount shall be calculated in accordance with the rules and shall continue to
accrue until FDR shall have received the Daily Amount from Customer. Settlement
Late Payment Fees shall be
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paid to FDR based upon the rules even though FDR may have elected to make
settlement with MasterCard or VISA in a timely manner on behalf of Customer and
Customer's Transaction Card Affiliates. If FDR has received funds from VISA
and/or MasterCard as a result of Interchange Settlement on behalf of Customer or
Customer's Transaction Card Affiliates and fails to make available the Daily
Amount to Customer, FDR shall pay to Customer a late payment fee based on the
Daily Amount calculated in the same manner as the Settlement Late Payment Fee.
12.6 NO INDEPENDENT OBLIGATION. The obligation of FDR to discharge
any VISA or MasterCard Interchange obligations of Customer or Customer's
Transaction Card Affiliates shall be solely as an agent of Customer and
Customer's Transaction Card Affiliates in accordance with the terms and
provisions of this Agreement and the FDR Settlement Rules. FDR shall have no
independent obligation with respect to the discharge of the Interchange
obligations of Customer or Customer's Transaction Card Affiliates.
12.7 VIOLATION OF RULES. In the event that MasterCard or VISA shall
notify FDR of any violation of the rules and regulations of MasterCard or VISA,
relating to Customer or Customer's Transaction Card Affiliates or transactions
processed for Customer or Customer's Transaction Card Affiliates, FDR shall have
the right, without liability to Customer or Customer's Transaction Card
Affiliates, to terminate Interchange Settlement of transactions on behalf of
Customer and Customer's Transaction Card Affiliates under this Agreement until
the time as FDR shall have been notified by MasterCard or VISA that the
violation has been corrected.
12.8 RELIANCE ON OTHER PARTIES. Customer acknowledges that
performance of Interchange Settlement involves the settlement of certain of
Customer's and Customer's Transaction Card Affiliates' transactions jointly and
on a combined net basis with the settlement of transactions of other customers
of FDR. Accordingly, the payment or receipt by FDR of settlement monies on
behalf of Customer and Customer's Transaction Card Affiliates may be dependent
on equivalent payments or receipts being received or made by or for other
customers of FDR and in respect of transactions involving Transaction Cards
issued by such other customers. FDR and Customer will cooperate and use all
reasonable resources to identify the reason for any settlement failure and shall
attempt to work to its resolution.
12.9 COMPLIANCE WITH INSTRUCTIONS. FDR shall be entitled without
further inquiry to execute or otherwise act upon (a) instructions or information
or purported instructions or information received through the MasterCard and
VISA payment systems and instructions or information, or (b) purported
instructions or information received in accordance with the MasterCard and VISA
rules or settlement manuals otherwise than through the payment systems or in
accordance with the FDR Settlement Rules notwithstanding that it may afterwards
be discovered that the instructions or information were not genuine or were not
initiated by Customer or Customer's Transaction Card Affiliates. Such execution
or action shall constitute a good discharge to FDR, and FDR shall not be liable
for any liability, damage, expense, claim or loss (including loss of business,
loss of profit or exemplary, punitive, special, indirect or consequential
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damages of any kind) whatsoever arising in whatever manner, directly or
indirectly, from or as a result of the execution or action.
12.10 RESTRICTIONS ON SETOFF. Customer and Customer's Transaction Card
Affiliates agree to discharge their Interchange Settlement obligations to FDR
under this Article 12 in full and on first written demand waiving any defense,
setoff or right of counterclaim (without prejudice to the ability of Customer or
Customer's Transaction Card Affiliates to pursue these independently) and
notwithstanding any act or omission or alleged act or omission or any
insufficiency or deficiency that there is or has been or that may be alleged in
the performance by FDR of its obligations under this Agreement or otherwise. FDR
agrees, however, that it shall not setoff against any payment to be made by it
to Customer or Customer's Transaction Card Affiliates or on their behalf
pursuant to this Article 12 any amount due and payable by Customer or Customer's
Transaction Card Affiliates to FDR (without prejudice to the ability of FDR to
pursue these independently) other than amounts due and payable by Customer or
Customer's Transaction Card Affiliates or on their behalf to FDR pursuant to
this Article 12.
12.11 TRAILING ACTIVITY. If Customer terminates this Agreement or if
Customer or any of Customer's Transaction Card Affiliates ceases to obtain
processing services from FDR under this Agreement in a manner which results in
fees or charges relating to Customer's Accounts continuing to be included as a
part of FDR's net settlement with MasterCard or VISA, FDR may obtain daily
payment from the Settlement Account established under Section 12.1 or, if the
Settlement Account no longer exists, Customer will provide FDR immediately upon
notice with access to an account of Customer's funds, not requiring signature,
which FDR may draw upon in order to receive payment for such fees and charges.
FDR will provide Customer with documentation for all fees and charges paid on
behalf of Customer.
ARTICLE 13
GENERAL
13.1 ASSIGNMENT. Except as otherwise provided herein, the rights and
obligations of Customer and Customer's Transaction Card Affiliates, on the one
hand, and FDR on the other hand, under this Agreement are personal and not
assignable by either party, either voluntarily or by operation of law, without
the prior written consent of the other party, which consent shall not be
unreasonably withheld. Subject to the foregoing, all provisions contained in
this Agreement shall extend to and be binding upon the parties hereto or their
respective successors and permitted assigns.
13.2 RELATIONSHIP OF PARTIES. Nothing contained in this Agreement
shall be deemed or construed by the parties, or by any third party, to create
the relationship of partnership or joint venture between the parties hereto, it
being understood and agreed that neither the method of computing compensation
nor any other provision contained herein shall be deemed to create any
relationship between the parties hereto other than the relationship of
independent parties contracting for services and, for purposes of Interchange
Settlement only, the relationship of
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principal and agent as set forth in Section 12.6. Neither Customer or FDR has,
and shall not hold itself out as having, any authority to enter into any
contract or create any obligation or liability on behalf of, in the name of, or
binding upon the other except as specifically provided in connection with the
Interchange Settlement.
13.3 BUSINESS CONTINUITY PLAN. FDR has created a business continuity
plan (the "Business Continuity Plan"). FDR shall provide Customer with a written
summary of such Business Continuity Plan upon the written request of Customer.
Despite the foregoing, FDR reserves the right to change such Business Continuity
Plan from time to time during the Term of this Agreement. At any time, upon
Customer's request, FDR shall explain all changes made to the Business
Continuity Plan. Any such change shall not degrade the quality of the Business
Continuity Plan in a manner which has a material, adverse impact on the services
provided hereunder. FDR will undertake and make certain revisions to its
Business Continuity Plan which will meet or exceed regulatory agency contingency
planning criteria. FDR's Business Continuity Plan includes a time frame schedule
for recovering critical business functions.
13.4 STATE LAW. Except as provided for in Section 13.16, this
Agreement shall be governed by the laws of the State of New York as to all
matters including validity, construction, effect, performance and remedies
without giving effect to the principles of choice of law thereof. For purposes
of any suit, action or proceeding Customer agrees that any process to be served
in connection therewith shall, if delivered, sent or mailed in accordance with
Section 13.5, constitute good, proper and sufficient service thereof.
13.5 NOTICE. All notices which either party may be required or desire
to give to the other party shall be in writing and shall be given by personal
service, telecopy, registered mail or certified mail (or its equivalent), or
overnight courier to the other party at its respective address or telecopy
telephone number set forth below. Mailed notices and notices by overnight
courier shall be deemed to be given upon actual receipt by the party to be
notified. Notices delivered by telecopy shall be confirmed in writing by
overnight courier and shall be deemed to be given upon actual receipt by the
party to be notified.
If to FDR:
First Data Resources Inc.
10825 Farnam Drive
Omaha, Nebraska 68154
Attn: President
Telecopy Number: 402-222-7334
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With a copy to:
First Data Resources Inc.
10825 Farnam Drive
Omaha, Nebraska 68154
Attn: Counsel
Telecopy Number: 402-222-7700
If to Customer:
Internet Access Financial Corporation
595 Market Street
Suite 2250
San Francisco, California 94105
A party may change its address or addresses set forth above by giving the other
party notice of the change in accordance with the provisions of this section. In
the event FDR provides notice hereunder to Customer of any default by Customer
in the performance of the provisions of this Agreement, which default could
result in the termination of this Agreement, FDR may, at its option, deliver a
copy of the notice to any of Customer's Transaction Card Affiliates receiving
services under this Agreement.
13.6 HEADINGS. The section headings in this Agreement are solely for
convenience and shall not be considered in its interpretation. The recitals set
forth on the first page of this Agreement are incorporated into the body of the
Agreement. The Exhibits referred to throughout this Agreement are attached to
this Agreement and are incorporated into this Agreement. Unless the context
clearly indicates, words used in the singular include the plural, words in the
plural include the singular and the word "including" means "including but not
limited to".
13.7 WAIVER. The failure of either party at any time to require
performance by the other party of any provision of this Agreement shall not
affect in any way the full right to require the performance at any subsequent
time. The waiver by either party of a breach of any provision of this Agreement
shall not be taken or held to be a waiver of the provision itself. Any course of
performance shall not be deemed to amend or limit any provision of this
Agreement.
13.8 FORCE MAJEURE AND RESTRICTED PERFORMANCE. If performance by
either FDR or Customer of any service or obligation under this Agreement,
including Start-Up or Deconversion, is prevented, restricted, delayed or
interfered with by reason of labor disputes, strikes, acts of God, floods,
lightning, severe weather, shortages of materials, rationing, utility or
communication failures, failure of MasterCard or VISA, failure or delay in
receiving electronic data, earthquakes, war, revolution, civil commotion, acts
of public enemies, blockade, embargo, or any law, order, proclamation,
regulation, ordinance, demand or requirement having legal effect of any
government or any judicial authority or representative of any such government,
or any other act or omission whatsoever, whether similar or dissimilar to those
referred to in this clause, which are beyond the reasonable control of either
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FDR or Customer, as the case may be, then either FDR or Customer, as the case
may be shall be excused from the performance to the extent of the prevention,
restriction, delay or interference. As a condition to continuing to perform
embossing services for card issuing members of VISA U.S.A. Inc., FDR was
required to enter into a VISA Card Personalization Agreement dated May 1, 1993,
(the "VISA Agreement"). Under certain circumstances VISA is permitted, pursuant
to the VISA Agreement, to temporarily or permanently prevent or restrict FDR's
right to perform embossing services for card issuing members of VISA U.S.A. Inc.
Customer and Customer's Transaction Card Affiliates hereby agree that if, as a
result of VISA exercising its rights under the VISA Agreement, FDR is prevented
or restricted by VISA from performing embossing services for Customer or
Customer's Transaction Card Affiliates, then FDR shall be excused from the
performance of such embossing services to the extent of such prevention or
restriction by VISA.
13.9 SEVERABILITY. If any provision of this Agreement is held invalid
or unenforceable for any reason, the invalidity shall not affect the validity of
the remaining provisions of this Agreement, and the parties shall substitute for
the invalid provisions a valid provision which most closely approximates the
intent and economic effect of the invalid provision.
13.10 AUDIT. From time to time during the Term of this Agreement, FDR
will allow a third party, selected by FDR, to perform an audit of the electronic
data processing environment maintained by FDR to provide the services
contemplated under this Agreement. FDR shall provide Customer or Customer's
Transaction Card Affiliate with a copy of the results of the audit if Customer
or Customer's Transaction Card Affiliate request a copy in writing.
13.11 RISK OF LOSS. Customer shall be responsible for any and all risk
of loss to any tangible item (a) provided by FDR for Customer (including without
limitation statements and embossed cards) upon the delivery of such items to the
U.S. Postal Service or such other courier as Customer may select, and (b)
provided by Customer to FDR until actual receipt of such items by FDR. It is
expressly understood that the U.S. Postal Service and any courier selected by
Customer are the agents of Customer and not FDR.
13.12 EQUAL EMPLOYMENT OPPORTUNITY. FDR will not discriminate against
any employee or applicant for employment because of race, color, religion, sex,
national origin, disability, age or veteran status as ordered by the Secretary
of Labor pursuant to Section 202 of Executive Order 11246, Section 503 of the
Rehabilitation Act of 1973, and Section 402 of the Vietnam Era Veterans
Readjustment Assistance Act of 1974.
13.13 INFORMAL DISPUTE RESOLUTION. Any controversy or claim between
FDR, on the one hand, and Customer on the other hand, arising from or in
connection with this Agreement or the relationship of the parties under this
Agreement whether based on contract, tort, common law, equity, statute,
regulation, order or otherwise, ("Dispute") shall be resolved as follows:
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(a) Upon written request of either FDR, on the one hand, or
Customer, on the other hand, the parties will appoint a designated
representative whose task it will be to meet for the purpose of
endeavoring to resolve such Dispute.
(b) The designated representatives shall meet as often as
the parties reasonably deem necessary to discuss the problem in an
effort to resolve the Dispute without the necessity of any formal
proceeding.
(c) Formal proceedings for the resolution of a Dispute may
not be commenced until the earlier of:
(i) the designated representatives concluding in
good faith that amicable resolution through
continued negotiation of the matter does not
appear likely; or
(ii) the expiration of the thirty (30) day period
immediately following the initial request to
negotiate the Dispute;
provided, however, that this Section 13.13 will not be construed to prevent a
party from instituting formal proceedings earlier to avoid the expiration of any
applicable limitations period, to preserve a superior position with respect to
other creditors or to seek temporary or preliminary injunctive relief pursuant
to Section 10.7.
13.14 ARBITRATION.
(a) If the parties are unable to resolve any Dispute as
contemplated by Section 13.13, such Dispute shall be submitted to
mandatory and binding arbitration at the election of either FDR, on the
one hand, and Customer, on the other hand (the "Disputing Party").
Except as otherwise provided in this Section 13.14, the arbitration
shall be pursuant to the Commercial Arbitration Rules of the American
Arbitration Association (the "AAA").
(b) To initiate the arbitration, the Disputing Party shall
notify the other party in writing (the "Arbitration Demand"), which
shall (i) describe in reasonable detail the nature of the Dispute, (ii)
state the amount of the claim, (iii) specify the requested relief and
(iv) name an arbitrator who (A) has been licensed to practice law in the
U.S. for at least ten years, (B) is not then an employee of Customer or
FDR or an employee of an Affiliate of either Customer or FDR, and (C) is
experienced in representing clients in connection with commercial
agreements (the "Basic Qualifications"). Within fifteen (15) days after
the other party's receipt of the Arbitration Demand, such other party
shall file, and serve on the Disputing Party, a written statement (i)
answering the claims set forth in the Arbitration Demand and including
any affirmative defenses of such party; (ii) asserting any counterclaim,
which shall (A) describe in reasonable detail the nature of the Dispute
relating to the counterclaim, (B) state the amount of the counterclaim,
and (C) sped the
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requested relief; and (iii) naming a second arbitrator satisfying the
Basic Qualifications. Promptly, but in any event within fifteen (15)
days thereafter, the two arbitrators so named will select a third
neutral arbitrator from a list provided by the AAA of potential
arbitrators who satisfy the Basic Qualifications and who have no past or
present relationships with the parties or their counsel, except as
otherwise disclosed in writing to and approved by the parties. The
arbitration will be heard by a panel of the three arbitrators so chosen
(the "Arbitration Panel"), with the third arbitrator so chosen serving
as the chairperson of the Arbitration Panel. Decisions of a majority of
the members of the Arbitration Panel shall be determinative.
(c) The arbitration hearing shall be held in such neutral
location as the parties may mutually agree. The Arbitration Panel is
specifically authorized to render partial or full summary judgment as
provided for in the Federal Rules of Civil Procedure. In the event
summary judgment or partial summary judgment is granted, the
non-prevailing party may not raise as a basis for a motion to vacate an
award that the Arbitration Panel failed or refused to consider evidence
bearing on the dismissed claim(s) or issue(s). The Federal Rules of
Evidence shall apply to the arbitration hearing. The party bringing a
particular claim or asserting an affirmative defense will have the
burden of proof with respect thereto. The arbitration proceedings and
all testimony, filings, documents and information relating to or
presented during the arbitration proceedings shall be deemed to be
information subject to the confidentiality provisions of this Agreement.
The Arbitration Panel will have no power or authority, under the
Commercial Arbitration Rules of the AAA or otherwise, to relieve the
parties from their agreement hereunder to arbitrate or otherwise to
amend or disregard any provision of this Agreement, including, without
limitation, the provisions of this Section 13.14.
(d) Should an arbitrator refuse or be unable to proceed with
arbitration proceedings as called for by this Section 13.14, the
arbitrator shall be replaced by the party who selected such arbitrator,
or if such arbitrator was selected by the two party appointed
arbitrators, by such two party-appointed arbitrators selecting a new
third arbitrator in accordance with Section 13.14(b). Each such
replacement arbitrator shall satisfy the Basic Qualifications. If an
arbitrator is replaced pursuant to this Section 13.14(d) after the
arbitration hearing has commence, then a rehearing shall take place in
accordance with the provisions of this Section 13.14 and the Commercial
Arbitration Rules of the AAA.
(e) At the time of granting or denying a motion for summary
judgment as provided for in (c) and within fifteen (15) days after the
closing of the arbitration hearing, the Arbitration Panel shall prepare
and distribute to the parties a writing setting forth the Arbitration
Panel's finding of facts and conclusions of law relating to the Dispute,
including the reasons for the giving or denial of any award. The
findings and conclusions and the award, if any, shall be deemed to be
information subject to the confidentiality provisions of this Agreement.
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(f) The Arbitration Panel is instructed to schedule promptly
all discovery and other procedural steps and otherwise to assume case
management initiative and control to effect an efficient and expeditious
resolution of the Dispute. The Arbitration Panel is authorized to issue
monetary sanctions against either party if, upon a showing of good
cause, such party is unreasonably delaying the proceeding.
(g) Any award rendered by the Arbitration Panel will be
final, conclusive and binding upon the parties and any judgment hereon
may be entered and enforced in any court of competent jurisdiction.
(h) Each party will bear a pro rata share of all fees, costs
and expenses of the arbitrators, and notwithstanding any law to the
contrary, each party will bear all the fees, costs and expenses of its
own attorneys, experts and witnesses; provided, however, that in
connection with any judicial proceeding to compel arbitration pursuant
to this Agreement or to confirm, vacate or enforce any award rendered by
the Arbitration Panel, the prevailing party in such a proceeding will be
entitled to recover reasonable attorneys' fees and expenses incurred in
connection with such proceeding, in addition to any other relief to
which it may be entitled.
13.15 JUDICIAL PROCEDURE. Nothing in Sections 13.13 or 13.14 shall be
construed to prevent any party from seeking from a court a temporary restraining
order or other temporary or preliminary relief pending final resolution of a
Dispute pursuant to Section 13.13 or 13.14.
13.16 FEDERAL ARBITRATION ACT. The parties acknowledge and agree that
performance of the obligations under this contract necessitates the use of
instrumentalities of interstate commerce and, notwithstanding other general
choice of law provisions in this Agreement, the parties agree that the Federal
Arbitration Act shall govern and control with respect to relevant provisions of
Sections 13.13 and 13.14.
13.17 INSURANCE. FDR agrees that during the Term of this Agreement it
will obtain and maintain commercially reasonable levels of insurance covering
various types of liabilities, including but not limited to comprehensive crime
and employee fidelity bond coverage, which FDR, in its reasonable business
judgment, determines is appropriate to cover the potential exposure that FDR and
its customers could experience. FDR shall provide certificates or other suitable
evidence of such insurance upon Customer's request; provided, however, that FDR,
at its sole election, shall be permitted to make any modification, change,
reduction or increase in the types of coverage or the amount of coverage which
FDR, in its reasonable judgment, determines is appropriate. The certificates of
evidence of insurance shall provide that the insurance carrier will use
reasonable efforts to endeavor to provide Customer with written notice when FDR
or the insurance carrier makes any changes in the types or levels of insurance
maintained by FDR.
13.18 ENTIRE AGREEMENT. This Agreement, including Exhibits and the
executed Affiliate Agreements, if any, sets forth all of the promises,
agreements, conditions and understandings
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between the parties respecting the subject matter hereof and supersedes all
negotiations, conversations, discussions, correspondence, memorandums and
agreements between the parties concerning the subject matter. This Agreement may
not be modified except by a writing signed by authorized representatives of both
parties to this Agreement. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties to this agreement have caused it to be
executed by their duly authorize officers as of the day and year first written
above.
FIRST DATA RESOURCES INC.
By: /s/ JOHN THIELEN
-------------------------------------------
Name: JOHN THIELEN
-----------------------------------------
Title: SENIOR VICE PRESIDENT
----------------------------------------
INTERNET ACCESS FINANCIAL CORPORATION
By: /s/ JEREMY LENT
-------------------------------------------
Name: JEREMY LENT
-----------------------------------------
Title: CHIEF EXECUTIVE OFFICER
----------------------------------------
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EXHIBIT "A"
SERVICES
I. THE FOLLOWING DOCUMENTS SPECIFICALLY DESCRIBE THE SERVICES REFERRED TO IN
SECTION II:
User Manuals:
Adjustments
Application Controls
Applications
Authorizations
Authorization Only
Cardholder Account Maintenance
Cardholder Billing
Cardholder New Accounts
Cardholder Non-Monetary Transactions
Cardholder Plastics
Cardholder Select
Cardholder System Features
Chargeback Message Codes
Chargebacks
Client-Defined Screens
Collections
Company Cards
Credit
Customer Inquiry Management System
Customer Inquiry System
Equasion Correspondence
Monetary Entry
PIN Management
Plastics Related Formats
Product Control File
Product Control File Utilities
Reference Manual
Reports Management System
Retrievals
Security
Settlement
Strategy Management
System Administration
System Overview
<PAGE> 41
Customer bulletins issued by FDR
II. SERVICES
A. FDR will provide Customer with an on-line terminal facility (not
the terminals themselves), on-line access to Transaction Card
processing software, adequate computer time and other mechanical
Transaction Card services as more specifically described in the
documents referred to in Section I.
B. Reports will be made available to Customer in accordance with FDR's
Reports Management System (RMS): (i) on hardcopy which shall be
express mailed (overnight delivery) to Customer from FDR, (ii) via
remote job entry (RJE) or Network Data Mover (NDM) transmission
from FDR, (iii) on-line from FDR, (iv) via Microfiche and/or (v) on
CD-ROM disk, based upon Customer's needs. Other pertinent documents
shall also be made available to Customer on hardcopy.
C. Issuer's Clearinghouse Services (ICS): The system whereby FDR
processes and submits to the Issuer's Clearinghouse Service (ICS),
on behalf of Customer, information concerning potential and
existing Cardholders in accordance with the operating regulations
of MasterCard and VISA. Inquiries into FDR's ICS on-line files
utilizing FDR's ICS on-line transactions by an employee of Customer
via Customers's CRT terminals will be counted as a non-monetary
transaction. Anything in this Agreement to the contrary
notwithstanding, it is understood and agreed that FDR's sole
responsibility under the ICS services is to provide electronic data
processing services to Customer in connection with Customer's use
of the ICS. FDR shall not be responsible for and assumes no
responsibility for: (i) any damages, losses or liabilities
whatsoever arising out of the use by Customer of the ICS data
bases, including any liability or obligation of Customer arising
out of or related to its compliance with the Fair Credit Reporting
Act or any other applicable federal, state or local law or
ordinance; (ii) the accuracy of any information supplied by
Customer to the ICS or for any verification of such information
based upon reports provided to Customer through the ICS; and (iii)
Customer's compliance with the operating regulations of MasterCard
and VISA with respect to the ICS service. IN ADDITION, CUSTOMER
UNDERSTANDS THAT FDR DISCLAIMS ALL WARRANTIES WITH RESPECT TO THE
USE AND OPERATION OF THE ICS, BOTH EXPRESS AND IMPLIED, INCLUDING
BUT NOT LIMITED TO ANY IMPLIED WARRANTY OF MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE.
D. FDR shall provide Customer and Customer's Transaction Card
Affiliates with PC Remote Access Services as described in Section
III of this Exhibit "A". In order for Customer and Customer's
Transaction Card Affiliates to have access to the PC Remote Access
Services, Customer and Customer's Transaction Card Affiliates
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<PAGE> 42
shall be responsible, at their expense, for all computer equipment
and PC software at Customer's and Customer's Transaction Card
Affiliates' locations necessary to so access the services, as such
hardware and software requirements are specified by FDR. All
communication charges associated with accessing the FDR computers
and equipment used to provide the PC Remote Access Services shall
be paid by Customer.
E. Specific Services are defined in Section IV.
III. ANCILLARY SERVICES
A. InfoSight Services FDR agrees to update on a monthly basis certain
selected fields of the master files of Customer. Such files may be selected at
the system and/or system principal level of the FDR System. FDR agrees to
provide Customer with dial-up access to such files each business day of each
week. The hours of access during such business days shall be 7:00 a.m. to 7:00
p.m. Central Standard or Central Daylight Time, as appropriate. FDR agrees to
provide customer service support to Customer in its use of such services
provided by FDR. The amount and type of customer service support shall be that
which FDR determines is reasonably necessary in its exercise of good faith
business judgment. In order for Customer and Customer's Transaction Card
Affiliates to obtain InfoSight Services as described in this section, FDR shall
permit Customer and Customer's Transaction Card Affiliates to access Customer's
data base pursuant to the use of certain software which FDR licensed from Oracle
Corporation ("Oracle") pursuant to a Software License and Services Agreement
dated November 20, 1992 (the "InfoSight Software").
(1) Customer and Customer's Transaction Card Affiliates represent
and warrant to FDR that each will permit the InfoSight
Services to be utilized or accessed in its internal business
only by its own personnel. Customer and Customer's Transaction
Card Affiliates shall not copy the InfoSight Software.
Customer and Customer's Transaction Card Affiliates will not
reverse assemble or reverse compile the InfoSight Software
program, nor transfer, sublicense, rent, lease or assign the
InfoSight Software.
(2) The provisions set forth in this section only grant Customer
and Customer's Transaction Card Affiliates the right to use
the InfoSight Software and do not grant any rights of
ownership to Customer or Customer's Transaction Card
Affiliates. Customer and Customer's Transaction Card
Affiliates shall not publish any results of any benchmark
tests run on the InfoSight Software.
(3) If FDR's right to license the use of the InfoSight Software to
Customer and Customer's Transaction Card Affiliates is
terminated because the InfoSight Software infringes upon the
copyright, patent, or other proprietary rights
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of any party or for any other reason, FDR shall have the right
to terminate the provision of the InfoSight Services upon
thirty (30) days notice to Customer and Customer's Transaction
Card Affiliates, or such shorter period of notice as coincides
with the termination of FDR's right to license the use of the
InfoSight Software, and FDR shall have no further liability to
Customer and Customer's Transaction Card Affiliates with
respect to the terminated services.
(4) Within thirty (30) days after the termination of this
Agreement, or the earlier termination of Customer's and
Customer's Transaction Card Affiliates' license to use the
InfoSight Software, Customer and Customer's Transaction Card
Affiliates shall deliver to FDR all copies of the
documentation, together with all separate informational
materials provided with respect to the InfoSight Services or
the InfoSight Software, in Customer's or Customer's
Transaction Card Affiliates' possession, custody or control
or, at Customer's or Customer's Transaction Card Affiliates'
discretion, shall destroy the same, as directed by FDR.
(5) Customer and Customer's Transaction Card Affiliates agree to
indemnify and hold harmless Oracle, its subsidiaries,
Affiliates, officers, directors, employees and agents from and
against any and all claims, demands, liability, loss, cost,
damage or expense, including attorneys' fees and costs of
settlement, resulting from or arising out of (i) the failure
of Customer or Customer's Transaction Card Affiliates to
observe any covenant or condition set forth in this section,
(ii) the violation by Customer or Customer's Transaction Card
Affiliates of any applicable statute, law or regulation
associated with the InfoSight Software, or (iii) Customer's or
Customer's Transaction Card Affiliates' use of the InfoSight
Services in a manner not provided for in this section.
(6) Customer and Customer's Transaction Card Affiliates
acknowledge that the InfoSight Software product is subject to
restrictions and controls imposed under the U.S. Export
Administration Act. Customer and Customer's Transaction Card
Affiliates each certify that neither the InfoSight Software
nor any direct product thereof is being or will be acquired,
shipped, transferred or reexported, directly or indirectly,
into any country prohibited under the Act.
(7) NEITHER FDR NOR ORACLE MAKES ANY WARRANTIES, WHETHER ORAL OR
WRITTEN, EXPRESS OR IMPLIED, WITH RESPECT TO THE PRODUCTS OR
SERVICES TO BE PROVIDED HEREUNDER, INCLUDING WITHOUT
LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
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PARTICULAR PURPOSE. ORACLE DOES NOT WARRANT THAT THE FUNCTIONS
CONTAINED IN THE INFOSIGHT SOFTWARE WILL MEET CUSTOMER'S OR
CUSTOMER'S TRANSACTION CARD AFFILIATES' REQUIREMENTS OR THAT
THE OPERATION OF THE INFOSIGHT SOFTWARE WILL BE ERROR FREE, OR
THAT DEFECTS IN THE SOFTWARE WILL BE CORRECTED. IN NO EVENT
WILL CUSTOMER OR CUSTOMER'S TRANSACTION CARD AFFILIATES HAVE
ANY CAUSE OF ACTION AGAINST ORACLE, NOR WILL ORACLE BE LIABLE
TO CUSTOMER OR CUSTOMER'S TRANSACTION CARD AFFILIATES FOR ANY
LOSSES, DAMAGES OR ANY ECONOMIC CONSEQUENTIAL DAMAGES
(INCLUDING LOST PROFITS OR SAVINGS), INCIDENTAL DAMAGES OR
PUNITIVE DAMAGES INCURRED OR SUFFERED BY CUSTOMER OR
CUSTOMER'S TRANSACTION CARD AFFILIATES EVEN IF ORACLE IS
INFORMED OF THEIR POSSIBILITY.
B. FDR LinkUp Services FDR agrees to provide to Customer and Customer's
Transaction Card Affiliates electronic mail services consisting of a system
whereby Customer or Customer's Transaction Card Affiliates may create, edit,
transmit, store and retrieve data, in the form of textual messages and binary
files, utilizing Customer's telephone communication lines to FDR and certain
data storage facilities residing on Customer's computer equipment ("Mailboxes").
FDR shall assign to Customer a number of Mailboxes, which may be increased or
decreased by Customer at any time following at least thirty (30) days written
notice to FDR, provided that Customer shall be required to maintain at least one
(1) Mailbox at all times. In order for Customer and Customer's Transaction Card
Affiliates to obtain FDR LinkUp Services as described in this section, FDR shall
distribute to Customer and Customer's Transaction Card Affiliates cc:Mail
Software and related documentation (collectively, the "cc:Mail Software").
(1) Customer and Customer's Transaction Card Affiliates represent
and warrant to FDR that each will permit the FDR LinkUp
Services to be utilized or accessed in its internal business
only by its own personnel. Each copy of the cc:Mail Software
provided to Customer and Customer's Transaction Card
Affiliates may be used by Customer or Customer's Transaction
Card Affiliate on a single computer only, and in no event may
Customer or Customer's Transaction Card Affiliates install any
cc:Mail product given to Customer or Customer's Transaction
Card Affiliates by FDR on a network server. Neither Customer
nor Customer's Transaction Card Affiliates shall copy the
cc:Mail Software except that Customer and Customer's
Transaction Card Affiliates may make archival copies of the
cc:Mail Software for the sole purpose of having a backup copy.
Customer and Customer's Transaction Card Affiliates each agree
that it will not reverse assemble or reverse compile the
cc:Mail Software program, nor transfer, sublicense, rent,
lease or assign the cc:Mail Software. The
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cc:Mail Software is owned by cc:Mail, Inc., a division of
Lotus Development Corporation ("Lotus") and is protected by
United States copyright laws and international treaty
provisions.
(2) Customer and Customer's Transaction Card Affiliates shall be
responsible, at their expense, for all computer equipment at
Customer's or Customer's Transaction Card Affiliates'
locations necessary to use the cc:Mail Software. All
communication charges associated with accessing the FDR
computers and equipment used to provide FDR LinkUp Services
shall be paid by Customer.
(3) If FDR's right to distribute the cc:Mail Software is
terminated because the software infringes upon the copyright,
patent, or other proprietary rights of any party or for any
other reason, FDR shall have the right to terminate the
provision of FDR LinkUp Services upon thirty (30) days notice
to Customer, or such shorter period of notice as coincides
with the termination of FDR's right to distribute the
software, and FDR shall have no further liability to Customer
or Customer's Transaction Card Affiliates with respect to the
terminated services.
(4) Within thirty (30) days after the termination of this
Agreement, or the earlier termination of Customer's and
Customer's Transaction Card Affiliates' right to use the
cc:Mail Software, Customer and Customer's Transaction Card
Affiliates shall deliver to FDR all copies of the relevant
software and associated documentation, together with all
separate informational materials provided with respect to the
services or the software, in their possession, custody or
control or shall destroy the same, as directed by FDR. In
addition, an officer of Customer shall certify in writing to
FDR that use of the relevant software has been discontinued
and all items have been returned or destroyed as required in
this section.
(5) Customer and Customer's Transaction Card Affiliates agree to
indemnify and hold harmless Lotus, its subsidiaries,
affiliates, officers, directors, employees and agents from and
against any and all claims, demands, liability, loss, cost,
damage or expense, including attorneys' fees and costs of
settlement, resulting from or arising out of (i) the failure
of Customer or Customer's Transaction Card Affiliates to
observe any covenant or condition set forth in this Section,
(ii) the violation by Customer or Customer's Transaction Card
Affiliates of any applicable statute, law or regulation, or
(iii) Customer's or Customer's Transaction Card Affiliates'
use of the FDR LinkUp Services.
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(6) Customer and Customer's Transaction Card Affiliates
acknowledge that the cc:Mail Software product is subject to
restrictions and controls imposed under the U.S. Export
Administration Act. Customer and Customer's Transaction Card
Affiliates certify that neither the cc:Mail Software nor any
direct product thereof is being or will be acquired, shipped,
transferred or reexported, directly or indirectly, into any
country prohibited under the Act. RESTRICTED RIGHTS LEGEND.
Use, duplication or disclosure by the U.S. Government is
subject to restrictions as set forth in subparagraph
(c)(1)(ii) of the Rights in Technical Data and Computer
Software clause at DFARS 52.227-7013. cc:Mail, Inc., 2141
Landings Drive, Mountain View, CA 94043.
(7) NEITHER FDR NOR LOTUS MAKES ANY WARRANTIES, WHETHER ORAL OR
WRITTEN, EXPRESS OR IMPLIED, WITH RESPECT TO THE PRODUCTS OR
SERVICES TO BE PROVIDED HEREUNDER, INCLUDING WITHOUT
LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. LOTUS DOES NOT WARRANT THAT THE FUNCTIONS
CONTAINED IN THE CC:MAIL SOFTWARE WILL MEET CUSTOMER'S OR
CUSTOMER'S TRANSACTION CARD AFFILIATES' REQUIREMENTS OR THAT
THE OPERATION OF THE SOFTWARE WILL BE ERROR FREE, OR THAT
DEFECTS IN THE SOFTWARE WILL BE CORRECTED. IN NO EVENT WILL
CUSTOMER OR CUSTOMER'S TRANSACTION CARD AFFILIATES HAVE ANY
CAUSE OF ACTION AGAINST LOTUS, NOR WILL LOTUS BE LIABLE TO
CUSTOMER OR CUSTOMER'S TRANSACTION CARD AFFILIATES FOR ANY
LOSSES, DAMAGES OR ANY ECONOMIC CONSEQUENTIAL DAMAGES
(INCLUDING LOST PROFITS OR SAVINGS), INCIDENTAL DAMAGES OR
PUNITIVE DAMAGES INCURRED OR SUFFERED BY CUSTOMER OR
CUSTOMER'S TRANSACTION CARD AFFILIATES EVEN IF LOTUS IS
INFORMED OF THEIR POSSIBILITY.
C. Equasion APS Services FDR shall make available to and perform for
Customer and Customer's Transaction Card Affiliates Application Processing
Services and On-Line Credit Bureau Report Request Services using the Equasion(R)
Automated Credit Application Processing System/Bureau Link(R) ("Equasion APS")
in accordance with the description of services set forth in Section IV of this
Exhibit "A". Customer shall indemnify and hold harmless FDR and its employees
from and against all claims, damages, losses and expenses arising out of FDR's
performance of Application Processing Services and On-Line Credit Bureau Report
Request Services under this Agreement, to the extent that such claim, damage,
loss or expense is caused by any error, omission or negligence of Customer,
employees of Customer or of any other persons or Entities who are directly or
indirectly associated with Customer or who directly or
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indirectly participate with Customer in connection with its operations of a
Transaction Card program as Affiliates, Agent Banks or otherwise. Customer shall
have no obligation to indemnify FDR against any liability, loss or damage FDR
might suffer arising solely out of FDR's negligent performance of Application
Processing Services and On-Line Credit Bureau Report Request Services called for
by this Agreement. FDR will use due diligence in processing the application
materials received from Customer, and the performance by FDR of the Application
Processing Services and the On-Line Credit Bureau Report Request Services called
for in this Agreement shall be consistent with industry standards. Customer
acknowledges that the supplier of Equasion APS to FDR is a third party
beneficiary to this Agreement. Equasion is a registered trademark of First Data
Resources Inc. Bureau Link is a registered trademark of American Management
Systems, Incorporated.
D. Recovery 1 Services In order for Customer and Customer's Transaction
Card Affiliates to obtain Recovery 1 Services as described in this Exhibit "A",
FDR shall permit Customer to access FDR's data base and to use the Recovery 1
Shared Services System software and all human readable user documentation
including additions, updates, revisions, corrections and modifications to the
foregoing delivered to Customer or Customer's Transaction Card Affiliates from
time to time (collectively, the "Recovery 1 Software") in accordance with the
terms and conditions contained herein.
(1) Customer and Customer's Transaction Card Affiliates represent
and warrant to FDR that the Recovery 1 Software will be
accessed and utilized only in conjunction with their
respective internal businesses and only by their own
personnel. Neither Customer nor Customer's Transaction Card
Affiliates shall copy, decompile, reverse compile or reverse
assemble the Recovery 1 Software nor transfer, sublicense,
rent, lease or assign the same. The provisions set forth in
this section only grant to Customer and Customer's Transaction
Card Affiliates a right to use the Recovery I Software and in
no way grant or convey any rights of ownership.
(2) If FDR's right to license the use of the Recovery 1 Software
to Customer and Customer's Transaction Card Affiliates is
terminated because the Recovery I Software infringes upon the
copyright, patent or other proprietary rights of any party or
for any other reason, FDR shall have the right to terminate
the provision of Recovery 1 Services and Customer's and
Customer's Transaction Card Affiliates' license to the
Recovery 1 Software upon thirty (30) days' written notice and
FDR shall have no further liability to Customer or Customer's
Transaction Card Affiliates with respect to such Services or
Software.
(3) Within thirty (30) days after the termination of this
Agreement, or the earlier termination of Customer's license to
use the Recovery I Software, Customer shall deliver to FDR all
copies of the documentation, together
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with all separate informational materials provided with
respect to the Recovery 1 Services or the Recovery 1 Software,
in Customer's possession, custody or control or, at Customer's
discretion, shall destroy the same, as directed by FDR. In
addition, an officer of Customer shall certify in writing to
FDR that, to the best of its knowledge, use of the Recovery 1
Software has been discontinued and all items have been
returned or destroyed as required in this section.
(4) Customer agrees to indemnify and hold harmless FDR, its
subsidiaries, Affiliates, officers, directors, employees and
agents from and against any and all claims, demands,
liability, loss, cost, damage or expense, including attorneys'
fees and costs of settlement, resulting from or arising out of
(i) the failure of Customer or Customer's Transaction Card
Affiliates to observe any covenant or condition set forth in
this section, (ii) the violation by Customer or Customer's
Transaction Card Affiliates of any applicable statute, law or
regulation associated with the Recovery 1 Software, or (iii)
Customer's or Customer's Transaction Card Affiliates' use of
the Recovery 1 Services or the Recovery 1 Software in a manner
not provided for in this section.
(5) Customer acknowledges that the Recovery 1 Software product is
subject to restrictions and controls imposed under the U.S.
Export Administration Act. Customer certifies that neither the
Recovery 1 Software nor any direct product thereof is being or
will be acquired, shipped, transferred or reexported, directly
or indirectly, into any country prohibited under the Act.
(6) FDR MAKES NO WARRANTIES, WHETHER ORAL OR WRITTEN, EXPRESS OR
IMPLIED, WITH RESPECT TO THE PRODUCTS OR SERVICES TO BE
PROVIDED UNDER THIS SECTION, INCLUDING WITHOUT LIMITATION, ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. FDR DOES NOT WARRANT THAT THE FUNCTIONS CONTAINED IN
THE RECOVERY 1 SOFTWARE WILL MEET CUSTOMER'S OR CUSTOMER'S
TRANSACTION CARD AFFILIATES' REQUIREMENTS OR THAT THE
OPERATION OF THE RECOVERY 1 SOFTWARE WILL BE ERROR FREE, OR
THAT DEFECTS IN THE SOFTWARE WILL BE CORRECTED. IN NO EVENT
WILL CUSTOMER OR CUSTOMER'S TRANSACTION CARD AFFILIATES HAVE
ANY CAUSE OF ACTION AGAINST FDR, NOR WILL FDR BE LIABLE TO
CUSTOMER OR CUSTOMER'S TRANSACTION CARD AFFILIATES FOR ANY
LOSSES, DAMAGES OR ANY ECONOMIC. CONSEQUENTIAL DAMAGES
(INCLUDING LOST PROFITS OR
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SAVINGS), INCIDENTAL DAMAGES OR PUNITIVE DAMAGES INCURRED OR
SUFFERED BY CUSTOMER OR CUSTOMER'S TRANSACTION CARD AFFILIATES
IN CONNECTION WITH THE RECOVERY 1 SERVICES OR SOFTWARE EVEN IF
FDR IS INFORMED OF THEIR POSSIBILITY.
E. FRAUD MANAGEMENT/FRAUD DETECTION (FALCON) SERVICES FDR shall provide
Customer and Customer's Transaction Card Affiliates (hereinafter referred to as
"Customer") with Credit Card Fraud Management/Fraud Detection Services in
conjunction with HNC, Inc., and its Falcon(TM) software (hereinafter referred to
as the "HNC Software"), which services shall consist of those services set forth
in this section.
(1) FDR shall provide Customer with Credit Card Fraud
Management/Fraud Detection Services by utilizing the output of
the Falcon Neural Engine computational model (designed to
detect credit card fraud) which encompasses or contains the
Falcon Credit neural network-based system, as such same
software is licensed to FDR by HNC and is commonly known as
the Falcon Credit Card Fraud Detection Model (hereinafter
referred to as the 'Credit Card Output Access') solely for the
purpose of assisting Customer in detecting possible fraudulent
transaction account activity on the credit card accounts of
Customer and for no other purpose. Except as expressly
provided in this section, no right or license under any
patent, copyright, trade secret, trademark or other
intellectual property of FDR or other person is granted or is
to be inferred from this section. Customer agrees that FDR's
providing of Credit Card Fraud Management/Fraud Detection
Services does not confer upon Customer any license in or to
the Credit Card Computational Model.
(2) The parties acknowledge that the HNC Software, from which the
Credit Card Output Access is generated, is licensed to FDR
pursuant to a license agreement (the "HNC License Agreement").
FDR shall use commercially reasonable efforts to extend or
renew the initial or any renewal terms, as the case may be, of
the HNC License Agreement and if the HNC License Agreement
expires or is terminated, FDR shall promptly notify Customer
of such termination or expiration. FDR shall use commercially
reasonable efforts to substitute for HNC one or more software
vendors from whom FDR shall license, on commercially
reasonable terms, one or more software packages that will
generate output access that provides, in all material
respects, the utility and performance provided by the Credit
Card Output Access generated by the HNC Software.
(3) FDR and Customer shall mutually establish a fraud detection
strategy designed to fulfill Customer's fraud detection
requirements. Customer's
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fraud detection strategy shall be summarized in an
authorization report which shall set forth the variables and
computational parameters which reflect such fraud detection
strategy (the "Strategy Approval Form"). Customer will provide
a single point of contact, prior to beginning of service, to
establish start-up requirements. Customer shall notify FDR in
writing of the contact's identity. Customer's contact person
will be authorized to build and approve the fraud detection
strategy, to determine the fraud score criteria, to approve
product control file changes and to approve the Strategy
Approval Form. FDR shall assist Customer in the establishment
of the processing parameters designed to effectively implement
Customer's fraud detection strategy. Customer shall be solely
responsible for approving the processing parameters set forth
in the Strategy Approval Form, and shall verify that such
parameters effectively satisfy the requirements of Customer's
fraud detection strategy. FDR shall construct, or cause to be
constructed, a computational process which reasonably conforms
to Customer's Strategy Approval Form. In no event, however,
shall FDR be liable to any person for any damages caused by
either the HNC Software, any deficiency in the construction of
the processing parameters or any deficiency in the content of
the approved Strategy Approval Form. Furthermore, Customer
shall be responsible for the accuracy of all Customer data and
fraud control data provided to FDR. If Customer desires to
alter its fraud detection strategy, Customer shall notify FDR
in writing at least 30 days before such changes are to become
effective. Customer shall submit to FDR a modified Strategy
Approval Form setting forth the processing parameter changes
desired.
(4) Together with HNC, FDR will provide Customer with the
following Credit Card Call Processing Services:
(a) FDR will utilize its Fraud Detection WorkCenter, using
the HNC Software, to monitor authorizations queued as a
result of the fraud detection criteria and/or fraud
score.
(b) FDR will initiate outbound telephone calls to the
Cardholders of Customer who have had authorization
activity on their account and appear in a Fraud
Detection WorkCenter Queue Group.
(c) FDR will make up to four attempts to reach the
Cardholder within a 48-hour period. All attempts will be
made within the hours of 8:00 a.m. and 9:00 p.m.
(Central Time Zone).
(d) FDR will attempt all home and business telephone numbers
as provided by Customer's Cardholder masterfile.
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(e) If FDR is unable to contact the Cardholder, a message
for the Cardholder to contact FDR at a to-be-provided
800 number will be delivered to the Cardholder's home
message machine and/or to responsible adults.
(f) When the FDR call results in contact with the
Cardholder, and the Cardholder validates the
authorization activity, FDR will record an on-line
account memo (to the Customer Inquiry System) indicating
the results of the call.
(g) When the FDR call results in contact with the Cardholder
and the Cardholder is unable to validate the activity,
FDR will initiate a Lost/Stolen Report and place a block
on the account. (Standard fees apply for the Lost/Stolen
Report.) FDR will record an on-line account memo (to the
Customer Inquiry System) indicating the results of the
call.
(h) If FDR encounters activity which appears
uncharacteristic or unusual for a Cardholder Account and
FDR is unable to contact successfully the Cardholder,
then FDR may place a block on the Cardholder Account to
prevent further authorization approvals until either the
Cardholder or Customer successfully verifies the
activity. On a daily basis, FDR will fax to Customer a
list of accounts which have been blocked because of
uncharacteristic or unusual account activity. The
account will remain blocked until Customer instructs FDR
in writing via fax to remove such block.
(i) Upon the request of Customer, FDR may at its option,
provide additional services, including the following:
telephone number look-ups, inbound call processing after
the 48-hour period, fraud control services, customized
reporting, etc. These services would be provided at an
additional cost to Customer.
(j) At least annually, HNC shall analyze two separate
month-end reports within the 12-month period being
analyzed produced by the HNC Software that measure the
effectiveness of Customer's existing algorithms,
provided that Customer has over 200,000 Gross Active
Credit Card Accounts. HNC shall then provide Customer
with a written analysis of the reports interpreting the
performance of the existing algorithms and strategies
and written recommendations for changes or updates to
such algorithms or strategies to improve their
performance, provided that Customer promptly provides
HNC with the two necessary month-end reports.
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(k) At Customer's request, HNC shall provide Customer with
up to five hours per month, for the first six months
following the date of commencement of Fraud
Management/Fraud Detection Services (the "Falcon Start
Date"), and three hours per month thereafter, of
strategy design assistance over the telephone at no
additional charge, provided that Customer has over
200,000 Gross Active Credit Card Accounts as of the
Falcon Start Date. This service will include
recommendations on fraud strategy design and results
interpretation. If such service exceeds the hours
permitted for that particular month, HNC will be
entitled to charge Customer for such services. HNC and
Customer shall independently negotiate the terms and
costs of such additional assistance. Customer will be
entitled to on-site strategy design assistance at an
additional charge; provided, however, that Customer will
receive credit against such additional charge for any
unused telephone strategy design assistance it was
eligible to receive from HNC in that month under this
paragraph at the same rate charged for additional
telephone strategy design assistance.
(l) Upon request by Customer, HNC or FDR may, at its option,
provide the following to Customer: custom system
installation, additional training, and fraud user
interface licensing. HNC shall provide the following to
Customer upon request: fraud strategy consulting and
custom fraud models. Customer will contract directly
with HNC for these services, which will be provided at
an additional cost to Customer.
(m) HNC has established a Fraud Control Consortium whereby
users of Credit Card Output Access contribute data for
use by HNC to study fraud patterns, which enables HNC to
improve fraud detection methods. If Customer chooses to
join such Consortium, Customer shall provide data to the
Fraud Control Consortium as required and requested by
HNC within 30 days after the Falcon Start Date and on a
calendar quarterly basis thereafter. If Customer does
not wish to join the Fraud Control Consortium, HNC, upon
request of Customer shall construct a custom fraud model
for Customer, as an additional service, at a cost agreed
upon among FDR, Customer and HNC. Customer acknowledges
that FDR will employ the HNC Software using the Fraud
Control Consortium algorithms to produce Credit Card
Output Access for Customer only if Customer contributes
data to the Fraud Control Consortium.
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(5) Notwithstanding any other Provisions of this Agreement, either
party may terminate the Credit Card Fraud Management/Fraud
Detection Services hereunder upon 30 days written notice to
the other party.
*F. CREDIT PERFORMANCE SERVICES FDR will make available to Customer and
Customer's Transaction Card Affiliates the following Credit Performance
Services:
(1) Credit Performance Services shall consist of those services
described both in this section. FDR shall supply all
equipment, facilities, and personnel necessary to provide the
Credit Performance Services.
(2) In the event FDR determines that performance of Credit
Performance Services in accordance with the terms of this
section in any jurisdiction requires licensing by such
jurisdiction, FDR shall, with notice to Customer, cause the
Credit Performance Services to be performed by an entity which
meets the requirements of such jurisdiction, unless otherwise
directed by Customer to cease performing Credit Performance
Services in such jurisdiction. If no such entity is available
to provide such Services in accordance with the terms of this
Agreement, FDR shall advise Customer, and FDR shall have no
further obligation to provide or cause to be provided the
Credit Performance Services in such jurisdictions.
(3) In order to assist FDR with its performance of the Credit
Performance Services, Customer hereby agrees:
(i) to notify FDR, on a monthly basis, regarding those
Cardholder Accounts On File for which Customer elects to
have FDR perform Credit Performance Services;
(ii) to approve all payment plans and receive all payments
from the Cardholder Accounts On File;
(iii) to make all decisions, in its sole discretion, as to if
and when any Cardholder Accounts On File are to be
turned over to a collection agency;
(iv) that FDR is hereby authorized to contact the Cardholder
Accounts On File, whether in writing or verbally, in
Customer's clients' names;
(v) that FDR is acting as an agent of Customer in providing
the Credit Performance Services; and
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(vi) to establish all parameters regarding the content and
timing of all telephone and letter contact which FDR
will initiate on Customer's behalf with the Cardholder
Accounts On File.
*G. CARDHOLDER SUPPORT SERVICES During the Cardholder Support Services
Terrm (as defined in this section G), FDR will make available to Customer and
Customer's Transaction Card Affiliates the following Cardholder Support
Services.
(1) CUSTOMER SERVICE-CARDHOLDER/BANK
Telephone Customer Service: Includes toll-free 800 number for
direct Cardholder interface for general account inquiries and
problem resolution twenty-four (24) hours per day, seven (7)
days per week. FDR will answer incoming automated call
distribution (ACD) telephone inquiries from Cardholders (in
addition, Voice Response Unit ('VRU') information shall be
provided 24 hours per day, 7 days per week);
Mail Customer Service: Resolution of written inquiries,
notices, and posting of non-monetary changes.
Account Maintenance: Data entry of new account information and
monetary and non-monetary changes.
Exception Item Handling: Research and resolution of unposted
charges, or other maintenance transactions.
(2) DISPUTE/CHARGEBACK CORRESPONDENCE SERVICES (8:00 A.M. THROUGH
5:00 P.M., CTZ, MONDAY THROUGH FRIDAY (EXCLUDING FDR
HOLIDAYS))
FDR shall, for all such inquiries relating cardholder accounts
provided that FDR has access to appropriate backup for such
resolution, provide resolution of customer service inquiries
received via written correspondence, including answering
incoming correspondence from Cardholders of Customer and from
Customer's own personnel via referral of written
correspondence. FDR shall provide on behalf of Customer
Cardholder initiated chargeback processing for disputes
(excluding those items relating to collections and/or fraud
activity), as more specifically defined below.
(a) Dispute/Chargeback Processing: FDR will respond to
incoming mail and phone inquiries regarding charges
posted to Customer's Cardholder Accounts that are not
recognizable to the Cardholder, duplicate charges, or
for which the Cardholder disputes the quality of goods
or services received, non-receipt of goods or services,
or
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otherwise asserts a claim of a billing error. FDR will
provide research of inquiries in accordance with
Regulation Z and MasterCard and VIA rules and
regulations, perform sales draft retrieval requests and
respond to the Cardholders in accordance with the
Procedures Manual (as defined below).
(b) Dispute Processing: FDR will process incoming mail and
phone inquiries, research the inquiries, and fulfill
sales draft retrieval requests, if necessary, and
respond to Cardholder in accordance with the Procedures
Manual.
(c) Dispute Processing (Operational Losses): In the event an
incoming dispute is in an amount less than $30.00, FDR
will work the dispute and write it off in accordance
with the Procedures Manual.
(d) Chargeback Processing (Outgoing): FDR will initiate
outgoing chargebacks in accordance with Regulation Z and
MasterCard and VISA rules, regulations and timeframes.
(e) Chargeback Processing (Representment - Operational
Losses): In the event an incoming chargeback is in an
amount LESS than $45.00, FDR will write it off in
accordance with the Procedures Manual.
(f) Chargeback Processing (Representment - Post Charge to
Cardholder): In the event FDR determines that a disputed
charge is the Cardholder's responsibility, FDR will post
the charges to the Cardholder Account and send a letter
of explanation to the Cardholder, in accordance with the
Procedures Manual.
(g) Chargeback Processing (Representment - Incoming): FDR
will work such chargebacks in accordance with MasterCard
rules and regulations.
(h) Pre-Arbitration Processing: FDR will research and take
action in accordance with MasterCard and VISA rules and
regulations.
(i) Pre-Arbitration Processing (Operational Losses): In the
event an incoming pre-arbitration is in an amount less
than $50.00, FDR will write it off in accordance with
the Procedures Manual.
(j) Pre-Arbitration Processing (Post to Cardholder Account):
If FDR determines that the incoming pre-arbitration is
the Cardholder responsibility, FDR will post the
transaction back to the Cardholder
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Account and send letter of explanation to the
Cardholder, in accordance with the Procedures Manual.
(k) Arbitration Filing: FDR will research and take action in
accordance with Regulation Z and MasterCard and VISA
rules and regulations.
(1) Pre-Compliance Processing: FDR will research and take
action in accordance with Regulation Z and MasterCard
and VISA rules and regulations.
(m) Pre-Compliance Processing (Operational Losses): In the
event an incoming pre-compliance is in an amount less
than $50.00, FDR will work the pre-compliance and write
it off in accordance with the Procedures Manual.
(n) Pre-Compliance Processing (Post to Cardholder Account):
If FDR determines that the incoming pre-compliance is
the Cardholder responsibility, FDR will post the
transaction back to the Cardholder Account and send
letter of explanation to the Cardholder, in accordance
with the Procedures Manual.
(o) Compliance Filing: FDR will research and take action in
accordance with Regulation Z and MasterCard and VISA
rules and regulations.
(p) Collection Letters (Outgoing good faith letter): FDR
will research and send a letter to the acquiring bank to
attempt resolution on Cardholder's behalf in the event
no recourse is available to the Cardholder under
Regulation Z, MasterCard and VISA rules and regulations.
(q) Collection Letters (Incoming from acquiring banks): FDR
will research and attempt to resolve the item by
contacting the Cardholder on behalf of the acquiring
bank. FDR will work with acquiring banks and comply with
acquiring bank's collection policy as published in the
VISA BIN and MasterCard Information Manuals.
(r) File Transfer to Fraud: FDR will re-route fraud
inquiries to Customer's Fraud Department when inquiries
are received in the Chargeback/Dispute Processing
Department.
(s) File Transfer to Customer Service: FDR will re-route
non-dispute inquiries to Customer's Customer Service
Department when inquiries are received in the
Chargeback/Dispute Processing Department.
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(t) Change to Arbitration: FDR will revise a dispute
inquiries status when a dispute or representment of a
dispute results in a prearbitration case.
(u) Change to Compliance: FDR will revise a dispute
inquiries status when a dispute or representment of A
dispute results in a compliance case.
(v) Change to Good Faith: FDR will change a dispute from
'dispute' status to 'good faith' status if it is
discovered the dispute has no recourse available through
Regulation E or MasterCard rules and regulations."
(3) CREDIT SERVICES
FDR will perform or handle the following credit related services on
behalf of Customer from 8:00 a.m. through 5:00 p.m., CTZ, Monday
through Friday, excluding FDR Holidays. For the purpose of this
Section G, FDR Holidays shall mean New Years Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
(a) Inbound/Outbound Servicing via Telephone or Written
Correspondence: FDR will place outbound calls to applicants to
verify application information as requested by Customer.
Additionally, FDR will answer inbound calls from applicants
inquiring about application status and other general credit
inquiries. FDR will provide resolution of written inquiries
received from applicants.
(4) CREDIT ENHANCED SERVICES
FDR will perform the following services on behalf of Customer from
8:00 a.m. through 5:00 p.m., CTZ, Monday through Friday, excluding
FDR Holidays:
(a) FDR will receive transmission of application data from
Customer and provide services to include application loading
into A system that interfaces with the Equasion APS System
("EAPS") which will perform a fraud prescreen check, enter DC
activity code known fraud files, apply approval code and
account set-up code. FDR will transmit a response file back to
Customer for handling.
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(b) FDR will process balance transfer requests in connection with
the Services. The processing of such requests shall include
the preparation and transmission of the balance transfers to a
third party vendor.
(5) TECHNICAL SYSTEMS SUPPORT SERVICES
Set-up: Consists of creating, programming, testing and implementing
program requirements including but not limited to VRU Configuration,
Reports, Mail Tapes, and as mutually agreed upon by Customer and
FDR.
Transaction Routing: Transaction routing within the FDR processing
system of monetary entries, non-monetary entries and applications
that does or doses not require a decision.
Reporting: Client requested reports.
Facsimile Support: Facsimile communication both to and from the
client.
File Processing: File manipulation to include receipt from or
creation and transmission to client.
Programming: Programming support for client requested changes after
initial set-up.
Data Lines/Modems: Installation of client requested data
communication lines and modems.
Quality Call Monitoring: Remote call monitoring by Customer at
location specified by Customer.
Record Filming: Microfilming/imaging of paper records.
(5) During the Cardholder Support Services Term, Customer will provide
FDR with access to Customer's credit card related Cardholder
Accounts as required for FDR to provide the Cardholder Support
Services. Customer will also provide training of FDR personnel with
respect to Customer's Cardholder customer service policies and
procedures sufficient to enable FDR to perform the Cardholder
Support Services. Training will be provided at FDR's Bankcard
Program Services facility at Customer's expense prior to the
commencement of the Cardholder Support Services Term. Customer shall
be responsible and pay for all travel expenses incurred by either
party in connection with such training. In addition, Customer will
designate a
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manager to serve as the interface between Customer and FDR and to
coordinate communication and implementation of customer service
policies to be applied by FDR in connection with the Cardholder
Support Services.
(6) FDR shall provide Customer with the Cardholder Support Services for
a period of twelve (12) months (herein referred to as the
"Cardholder Support Services Term"). The date of commencement of the
Cardholder Support Services shall be mutually agreed upon by the
parties. Upon the conclusion of the initial term, FDR shall continue
to provide the Cardholder Support Services to Customer in six (6)
month increments, unless and until either party gives to the other
party written notice of its desire to terminate FDR's performance of
the Cardholder Support Services. Termination shall be effective
ninety (90) days after receipt of such written notice.
(7) A Policies and Procedures Manual shall be mutually agreed upon by
Customer and FDR on or before sixty (60) days after the date of
execution of this Amendment to Service Agreement with respect to the
Cardholder Support Services, to be known as: Customer Service,
Credit and Chargeback/Dispute Processing (the "Procedures Manual").
Should a mutual agreement with respect to the Procedures Manual not
be reached by the parties on or before sixty (60) days after the
date of execution of this Amendment to Service Agreement, then a
dispute resolution process shall be initiated, as defined in
Sections 13.13 and 13.14 of the Service Agreement. FDR and Customer
agree to review the Procedures Manual periodically and, if necessary
or appropriate, to revise or update the Procedures Manual as
mutually agreed. FDR will implement mutually agreed upon changes to
the Procedures Manual within agreed upon time frames, and, if no
agreement on time frames is reached, within thirty (30) days.
(8) Customer shall provide at least sixty (60) days notice to FDR of the
formatted volumes of incoming cardholder calls and applications.
IV. DEFINITIONS:
ACCD Downloaded
Account Each selected Cardholder Account of Customer
which is transmitted to Customer, or any other
third party acting on Customer's behalf, for
collection purposes in connection with Customer's
Automated Customer Calling Device (ACCD).
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Account-Level Processing
(ALP) - Cardholder
Pricing Account on
File Each account of a Cardholder of Customer using
Account-Level Processing that remains on
Customer's masterfile on the last processing day
of the calendar month as defined on the CD-121
Ledger Activity Report or the equivalent report.
ALP Services-Cardholder Pricing allow Customer
the ability to set, change and monitor pricing
parameters (including but not limited to annual
percentage rate, penalty fees, minimum payment
calculations and annual charges) on a Cardholder
Account automatically at the level of the
individual Account based upon decision tables
built by Customer.
Application Processing
Services An on-line system supporting the data entry,
credit investigation, credit analysis,
decisioning, documentation and booking of credit
applications on the FDR System. Services include
automated credit scoring and credit limit
assignment.
APS Relationship Account
Storage Each storage of a record of Customer depository
accounts on the FDR System. Upon entry of
application data, a search of the deposit file is
executed with matches reported to allow
identification of an existing consumer
relationship. Resulting matches can be queued by
the system for verification.
Auto PIN Change Each call made by a Cardholder of Customer
requesting a change to the Personal
Identification Number (PIN) associated with the
Cardholder's Transaction Card by the use of a
touch-tone telephone.
Automatic Chargeback Each automatic initiation of a chargeback by the
FDR System based upon predefined parameters for
transactions involving an expired account
plastic, an account listed in the Combined
Warning Bulletin, or an account which exceeds
presentment parameters.
Automatic Rush Embossing Each rush servicing of a Customer request for a
Cardholder embossed plastic and/or PIN/Post
Mailers through use of on-line rush program on
the FDR System.
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*Balance Consolidation An online system for the production, processing
and management of balance transfer checks,
including authorization and posting of checks,
creation of a check data file, transmission of
the check data file to a third-party vendor
selected by FDR for printing and mailing of
checks and related letters and inserts and
product management through production of online
balance consolidation reports and generation of a
CIS Memo entry for each balance consolidation
request. The third party vendor selected by FDR
for check print and mail services may be an
Affiliate of FDR. At Customer's option,
reconciliation services and an Official Check
product may be provided through a separate
agreement between Customer and Integrated Payment
Systems (IPS), an Affiliate of FDR.
Reconciliation services include payment of cashed
items, reconciling issues to paids, researching
and processing exception items, processing stop
payments, and microfilming, storage and retrieval
of paid items. Official Checks are centralized
teller checks that receive next-day availability.
If such services are obtained through contract
with IPS, third-party print and mail services
also will be provided through the IPS contract.
FDR shall not be responsible for nonperformance,
negligent performance or default by IPS or its
third-party vendor under such separate written
agreement, or for providing such services in the
event the agreement with IPS expires or is
terminated.
Braille Embossing Each plastic card for which FDR has embossed
Braille characters on the front of the plastic.
Card Activation-ANI Call Each automatic initiation of an on-line
transaction in conjunction with an Automatic
Number Identification (ANI) process via an audio
response unit (ARU), changing the status of a
Cardholder Account associated with certain newly
issued or reissued plastics (as determined by
Customer), from "inactive" (under certain
parameters) to "active" for transaction
authorization purposes.
Card Activation-ARU
Call-FDR Each initiation of an on-line transaction by the
confirmation of Customer requested data captured
from Customer's Cardholder, via an audio response
unit (ARU), changing the status of a Cardholder
Account associated with certain newly issued or
reissued plastics (as determined by Customer),
from "inactive" (under certain parameters) to
"active" for transaction authorization purposes.
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Card Activation-Customer
Processed Each entry of an on-line transaction by Customer
to change the status of a Cardholder Account
associated with certain newly issued or reissued
plastics (as determined by Customer), from
"inactive" (under certain parameters) to "active"
for transaction authorization purposes.
Card Activation-Voice
Call-FDR Each entry of an on-line transaction by FDR, on
behalf of Customer, in conjunction with the
confirmation of Customer requested data obtained
from the Customer's Cardholder via a voice call,
changing the status of a Cardholder Account
associated with certain newly issued or reissued
plastics (as determined by Customer), from
"inactive" (under certain parameters) to "active"
for transaction authorization purposes.
Card Activation Labeling
-General Use Each affixation of a sticker to each embossed
plastic in a Customer Cardholder embossing run;
generic sticker included at no additional charge.
Card Activation Labeling
-Selective Use Each affixation of a sticker to each embossed
plastic selectively identified by Customer;
generic sticker included at no additional charge.
Card Carrier Printing The printing of Customer's Cardholder information
on a Customer-specified card carrier form.
Cardholder Account
on File Each account of a Cardholder of Customer
(including but not limited to charged off,
authorization only and debit accounts) that
remains on Customer's master file at FDR on the
last processing day of the calendar month as
defined on the CD-121 Ledger Activity Report or
the equivalent report.
Cardholder Annual
Activity Summary Each annual summarization of activity associated
with a Transaction Card issued by Customer.
Cardholder Annual Activity
Summary Detail Storage Each Cardholder Account for which annual activity
summary detail is stored in an electronic format.
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Cardholder Authorization
Inquiry Each instance in which the Cardholder
records of Customer are accessed for an
authorization, including but not limited to
personal identification number (PIN)
verification and Cardholder address
verification services, or when the
authorization request is switched to
Customer's location to access the off-site
Cardholder masterfile of Customer.
Cardholder Hot Call Fraud
Referral Each authorization attempt on a Cardholder
Account of Customer statused lost/stolen or
Code 10 authorization transaction where
FDR's Fraud Management Voice Operations
conducts an identification process,
instructs the Merchant on the
authorization's disposition and attempts
recovery of the Transaction Card if the Card
is identified as Lost/Stolen. Additionally,
FDR may instruct the Merchant to recover the
Transaction Card and, at Customer's option
based upon predefined criteria, FDR shall
dispatch the police to Merchant location.
Cardholder Hot Call
Referral Each authorization requiring intervention
because Customer has requested recovery of
the account plastic or positive
identification in order to complete the
authorization transaction.
Cardholder Monetary
Transaction Each posting of a monetary transactio to
Customer's Cardholder Accounts, including but
not limited to sales, returns, cash advances,
payments, reversals, adjustments and annual
charges.
Cardholder Non-Monetary/
On-line Transaction Each entry of non-monetary information
subsequently posted or unposted to a
Cardholder masterfile of Customer, or an
inquiry into the computer records of
Customer and its Cardholders (potential and
existing) by the use of a terminal, through
an ATM, or by tape.
Cardholder Notice Each brief notification to a Cardholder of
Customer prepared by FDR's computer at the
request of Customer based upon Customer's
Product Control File or a CRT entry request
made by an employee of Customer, including
but not limited to delinquency notices,
delinquency statements, overlimit notices and
first activity notices. This service includes
any preparation required for delivery.
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Cardholder Selected PIN
(SMR/SMC) Transaction Each transaction generated in connection with a
Cardholder Account of Customer for which Customer
enters an on-line transaction into the FDR System
from a Solicitation Mailer Response (SMR) screen
or Solicitation Mailer call (SMC) through
Customer's ARU system, to generate a Personal
Identification Number (PIN) which has been
selected by the Cardholder in connection with the
Cardholder Account.
Cardholder Statement Each periodic summarization of activity (whether
printed or otherwise) associated with a
Transaction Card issued by Customer or Customer's
Transaction Card Affiliates, including but not
limited to single statements, dual statements,
and reprints of information from a CIS Statement
currently stored on-line on the FDR System.
Service includes statement messaging on original
statements and preparation required for delivery.
Cardholder Statement Insert Each inserting of advertising or other item of
information not contained on a Cardholder
Statement into an envelope containing a
Cardholder Statement: inserts required by state
or federal law do not apply.
Cardholder Statement Mail
Preparation Each Cardholder Statement which is prepared by
FDR on behalf of Customer for first class mailing
via the United States Postal Service.
Cardholder Support Services The credit, customer service, chargeback
processing and other related services performed
by FDR on behalf of Customer.
Carrier Insert/Meter/Mail Each inserting of a prefolded card carrier,
containing merged Cardholder plastic, into #10
window envelope: a standard envelope is included.
CD-ROM Services The storage, on Compact Disc-Read Only memory
("CD-ROM"), of statements and reports for
purposes of record retention, accessing and
archival purposes. Customer, at its option, may
elect to utilize the CD-ROM Services, Microfiche
Services and/or On-Line Report Services for the
same items. Notwithstanding anything in this
Agreement to the contrary, Customer is
responsible for determining the acceptance of the
CD-ROM Services under state and Federal
regulations, including but not
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limited to obligations to retain information for
a specified period of time, signature
verification and the admissibility of documents
into evidence. It is Customer's responsibility to
keep written or microform records, if such are
required under state and Federal regulations
because of the limited acceptance or
admissibility of the CD-ROM Services or the
technology to be used under this Agreement to
provide the CD-ROM Services.
Check Order Service Daily or monthly downloading of Cardholder data,
via transmission or magnetic tape, to a third
party vendor selected by Customer for the
production of certain items for Cardholders of
Customer including but not limited to convenience
checks and check re-orders based upon an on-line
request made by an employee of Customer or
automatically generated by the FDR System on
behalf of Customer.
CIMS FDR's Customer Inquiry Management System (CIMS)
is an online system which provides the means to
log, assign and track Customer Inquiries. Under
CIMS, a Customer Inquiry shall mean a request for
information received from a customer of Customer
either by mail, phone, walk-in or some other
medium. A Workcase is the basic work unit within
CIMS; it represents a Customer Inquiry. Workcase
Option with Variables ("WOV") Services shall also
be available under CIMS at Customer's option.
CIMS Log-Only Workcase Each Workcase that is entered into CIMS by
Customer for internal reporting purposes only; no
follow-up is required by Customer's personnel.
CIMS Regular Workcase Each Workcase that, for whatever reason, requires
review, task completion and/or follow-up by
Customer's personnel in order to resolve a
Customer Inquiry.
CIMS Regular Workcase
Action Each (i) task which is performed in the
resolution of a Regular Workcase or (ii) brief
communication that contains directive, advisory
or informative matter stored within an Action
Workcase that is entered by Customer's personnel.
CIMS WOV Workcase Each optional Workcase that sends variable
information to a file for downloading to
Customer. Actions may be used to establish the
specific grouping of variables that will be
downloaded to Customer.
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CIS FDR's Customer Inquiry System (CIS) is an on-line
system for storing and accessing Statement,
Detail or Memo information regarding a Cardholder
Account.
CIS Detail Each item of information regarding transactions
that have posted or will post to a Cardholder
Statement such as charges, payments, credits and
authorizations not aged off the Cardholder's
FILE, Cardholder payment history, and real-time
authorizations.
CIS Memo Each summary item, not individually exceeding 65
positions, that is stored with the Customer's
Cardholder Account information and is accessible
by Customer via Customer's CRT terminals.
CIS Statement Each set of statement and detail information
regarding Customer's Cardholder Accounts that is
stored on the FDR system and accessible by
Customer via Customer's CRT terminals. CIS
Statement information includes the information
set forth on a Cardholder Statement such as, but
not limited to, the name, address, account
number, statement date, payment date, cycle days,
annual percentage rates, and monthly periodic
rates.
Company Card Report
Mail Preparation Each set of reports prepared by FDR for mailing
to a company designated by Customer in connection
with company card services. For purposes of this
Agreement, a set of reports shall mean all
reports of a single company which are placed in a
single envelope for mailing.
*Credit Performance
Services The delinquent/overlimit account billing,
skiptracing and related services performed by FDR
on behalf of Customer.
Custom Forms Purchased Any paper materials (including but not limited to
inserts, forms and agreements) ordered and
purchased by FDR on behalf of Customer in
connection with the Cardholder Statement and
Insert services set forth in this Agreement.
CVV/CVC Verification
Generation Each value calculated and generated in connection
with a Transaction Card pursuant to VISA's Card
Verification Value (CVV) or MasterCard's Card
Validation Code (CVC) directives.
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DES PIN Generation Each Data Encryption System (DES) Personal
Identification Number (PIN) created by the FDR
System in connection with a plastic card produced
by FDR on behalf of Customer.
Embossing Set-Up Each change of the type of card, card carrier,
insert and/or envelope during an input processing
run.
Emergency Card or Cash
Replacement Services The capture and processing of information by
FDR's Fraud Management Voice Operations in the
performance of emergency cash authorization
services or for coordinating the creation and
delivery of a replacement card(s) for Customer's
Cardholder.
Enterprise Presentation
Cardholder Statement Each Cardholder Statement produced by FDR on
behalf of Customer utilizing the Enterprise
Presentation feature. Enterprise Presentation is
the system which allows Customer the flexibility
to electronically arrange the statement form
(including payment coupon placement), create and
place logos and graphics and select from numerous
font types and sizes on the Cardholder Statement.
Customer understands and agrees that Enterprise
Presentation Cardholder Statement data may only
be stored for archival use on CD-ROM and
Microfiche.
FDR LinkUp Services The set-up and monthly service charges associated
with the mailboxes utilized by Customer to
receive and send electronic mail from and to FDR.
Fraud Management/Fraud
Detection Services -
Actioned Credit Card
Account Any credit card account routed to the FDR Fraud
Detection WorkCenter queue group that results in
any one or more of the following activities in a
single 48-hour period: outgoing/incoming
Cardholder phone calls with a maximum of 4
attempts within any single 48-hour period, CIS
Memos, Letter generation or account statusing.
Fraud Management/Fraud
Detection Services -
Monthly Gross Active
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Credit Card Account Each credit card Cardholder Account that had a
balance or any monetary posting for the month
billed, as determined by FDR for Customer, as
reduced by any 'Z'-Charge Off accounts.
High Coercivity Each plastic Transaction Card which is encoded
using a high coercivity magnetic stripe.
Hot Stamp Plates/
Logos Purchased Each magnesium plate or logo ordered by FDR on
Customer's behalf.
InfoSight Services The set-up, on-line access, file load and other
management information services performed by FDR
on behalf of Customer.
Interface Services -
Magnetic Tape Handling Each receipt of data by FDR from Customer or a
third party designated by Customer or each
forwarding of data to Customer or a third party
designated by Customer from FDR via mailed or
courier delivered magnetic media including, but
not limited to, diskettes and magnetic tapes.
Interface Services -
RJE/NDM Each receipt of data by FDR from Customer or a
third party designated by Customer or each
forwarding of data to Customer or a third party
designated by Customer from FDR via a central
processing unit to central processing unit
transmission using Remote Job Entry or Network
Data Mover (RJE or NDM).
Interface Services - Tape
to Tape Each receipt of data by FDR from Customer or a
third party designated by Customer or each
forwarding of data to Customer or a third party
designated by Customer from FDR via a central
processing unit to central processing unit
transmission using a tape to tape interface.
IRS Home Equity Form
1098 Each Internal Revenue Service (IRS) Form 1098
prepared by FDR's computer, in accordance with
the Customer's Product Control File settings or
terminal entry made by Customer, printed and
mailed to Customer's Cardholder. Service includes
creation of a tape for Customer's reporting of
Cardholder information to the IRS.
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Issuer Chargeback Each return of a Ticket and receipt of the amount
thereof from an Issuer to an Acquirer as provided
for in the then- current MasterCard and VISA
international rules and regulations, or
applicable domestic regulations. Issuer
Chargebacks subsequently reversed by the Acquirer
will be forwarded by FDR to Customer for
resolution via the On-Line Direct Sell Chargeback
System.
*Letter Each letter prepared by FDR's computer, in
accordance with Customer's Product Control File
settings or CRT entry requests made by employees
of Customer. Each such Letter shall have online
composition and editorial features and options
including signatures, logos, multiple type faces
and additional page letter generation. Service
includes any preparation required for delivery.
*Letter - Additional Page Each printed output on the reverse side of a
Letter (duplex printing) or each side of each
sheet of 8 1/2" by 11" 24 lb. bond stock
accompanying a Letter.
*Letter - Certified Mail
Handling Each Letter, with or without Letter Insert, which
is handled separately from Customer's first class
mailings to provide certified delivery of said
item. This does not include postage.
*Letter - Group Samples Each individual or set of Letters prepared by
FDR's computer, in accordance with Customer's
Product Control File settings or CRT entry
requests made by employees of Customer, which is
printed and mailed to Customer in a draft format
for Customer's review and approval.
*Letter - Insert Each inserting of advertising or other item of
information not contained on a Letter, including
but not limited to generic reply envelopes, into
a windowed envelope containing a Letter.
*Letter - Priority Mailing Each Letter, with or without Letter Insert, which
is handled separately from Customer's first class
mailings to provide next day delivery of said
item.
*Letter - Set-up, Revision
or Deletion Each addition, deletion or change, performed by
FDR on behalf of Customer, of a Customer's Letter
format or inputs including but not limited to
digitized signatures and logos of Customer.
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Lost/Stolen Account
Management and
investigation Investigative services relating to Customer's
Cardholder lost or stolen accounts including but
not limited to lost/stolen account research;
fraudulent activity investigation; Cardholder
interviews; manual adjustments, chargebacks, and
retrievals; and fraud and counterfeit reporting.
Lost/Stolen Account
Processing Automatic actions, relating to the processing of
a Cardholder's Account statused as lost or
stolen, required to prompt Customer
fraud/security representatives, record the
representatives directive(s) and request that a
Cardholder Account number be listed in the
appropriate Combined Warning Bulletin;
automatically report the cardholder's Account
number to Visa and MasterCard's Authorization
Exception System, if applicable; systematically,
based upon Customer's pre-defined parameters,
initiate the set-up of a new Cardholder Account;
reconcile transactions posted but not yet
statemented at the time of the Cardholder's
reporting, including but limited to the transfer
of valid transactions to the Cardholder's
replacement account and identification and
recording of non-valid transactions as
fraudulent; automatically request approved
reissue of account plastic(s) and suspend reissue
of account(s) not approved for review by
Customer; and automatically update the
Cardholder's phone number in the Cardholder
masterfile from the lost/stolen report.
Lost/Stolen Account
Transaction Management
System Each transaction posting to a Cardholder Account
of Customer statused as lost or stolen which is
automatically identified and reported to an
on-line work queue from which Customer may
initiate on-line transactions to produce a
transaction adjustment, a chargeback, or a ticket
retrieval request; issue an affidavit of fraud or
forgery to Customer's Cardholder; and/or report a
fraudulent transaction to Visa or MasterCard.
Lost/Stolen Report - FDR
Entered Each report of a lost or stolen Transaction Card
from the Cardholder of Customer which is
processed by FDR's Fraud Management Voice
Operations. Reports entered on-line immediately
change the external status and block
authorization
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requests on the Cardholder Account. Service
includes lost/stolen reports received via collect
call, telegram and telex.
Merchant Account on File Each account of a Merchant of Customer that
remains on Customer's masterfile at FDR on the
last processing day of the calendar month as
defined on the MM-101 Merchant Profitability
report or an equivalent.
Merchant Ticket -
Remote/Tape Entered Each Ticket from Customer's Merchant that is
transacted by a Cardholder from any Bank
Identification Number (BIN), Interbank Card
Association (ICA) or other Transaction Card
system identification number, and entered
remotely from Customer's terminal(s) or via
magnetic tape or tape transmission to FDR by
Customer or a third party acting on Customer's
behalf.
Microfiche Each page of microfiche provided to Customer by
FDR. Service includes any preparation required
for delivery.
Non-Standard Job Run Each scheduled daily, weekly or monthly
production of a data set on behalf of Customer
that is in addition to the standard data outputs
produced by the FDR System.
On-Line Access and
Retrieval System
(OARS) Services Each page of Reports Management System (RMS)
reports which is stored by FDR for on-line
viewing and printing by Customer's personnel.
Storage of data by FDR shall be for a period of
sixty (60) days. Customer, at its option, may
elect to utilize any or all of the OARS Services,
CD-ROM Services and/or Microfiche Services for
the same RMS reports. Notwithstanding anything in
this Agreement to the contrary, Customer is
responsible for determining the acceptance of the
OARS Services and the technology to be used under
this Agreement to provide the OARS Services under
state and Federal regulations, including but not
limited to signature verification and the
admissibility of documents into evidence. It is
Customer's responsibility to keep written or
microform records, if such are required under
state and Federal regulations because of the
limited acceptance or admissibility of the OARS
Services or the technology to be used under this
Agreement to provide the OARS Services.
A-32
<PAGE> 72
On-Line Credit Bureau
Report Request The transmission or receipt of credit application
or existing account information via video display
terminals at Customer's location to any of the
principal credit bureaus presently interfaced to
FDR with which Customer has established a written
relationship that is in effect at all times
during the term of this Agreement in order to
determine the credit worthiness of an
applicant/account. Anything in this Agreement to
the contrary notwithstanding, in the event that
Customer's relationship(s) with all of the
principal credit bureaus supported pursuant to
this Agreement should be terminated at any time
during the term of this Agreement, then FDR's
obligation to provide Credit Bureau Report
Requests shall automatically be terminated,
without penalty or financial obligation of any
type or kind to FDR, on the effective date of the
termination of Customer's relationship(s) with
such principal credit bureaus.
PCS Remote Access Service Product by which Customer and Customer's
Transaction Card Affiliates may access the FDR
System via a personal computer at Customer's or
the Affiliate's office in order to allow
employees of Customer or the Affiliate to perform
certain terminal functions, including but not
limited to the accessing of Cardholder or
Merchant Account data, the entry of information
concerning Customer's Accounts and the
uploading/downloading of data regarding
Customer's Accounts.
Plasticard Photocard Services (1" x 1" and 2" x 2")
Photo Transfer The affixation of a digitized photographic image
to a plastic Transaction Card.
Photo/Signature
Scanning and
Digitization The process by which FDR (i) scans a photograph
or signature, (ii) cleans/crops the photograph or
signature and (iii) stores such photograph or
signature as a digitized image on a data base for
up to five (5) years.
Photo Image
Handling and
Merge The handling and merging of images with
corresponding data to create an output file.
A-33
<PAGE> 73
Customer and FDR hereby agree that all
photographs sent to FDR by Customer for use by
FDR in the performance of the Plasticard
Photocard Services set forth in this Agreement
shall, prior to delivery to FDR, be reviewed by
Customer for content. Customer acknowledges and
agrees that, with respect to the issuance of
Photocards; to its Cardholders, FDR has no
responsibility and assumes no responsibility
whatsoever for the content of any such
photographs, and that Customer is solely
responsible for interpreting applicable state and
federal laws (including but not limited to laws
governing obscenity, privacy, proprietary
information ownership rights and
copyright/trademark infringement), monitoring
applicable legal developments, determining the
requirements for compliance with all applicable
state and federal laws, and maintaining an
ongoing compliance program in connection with
such services.
PIN/Post Mailer Processing Each Personal Identification Number (PIN), and
associated PIN notice form, or mail verification
form (POST Mailer), related to Customer's
Cardholder. Service includes any preparation
required for delivery including generic PIN form.
PIN/Post Mailer
Production Edits The edit functions performed on a PIN/Post
Mailer before printing. The service includes
Mailer method changes, Mailer address changes,
Mailer mail date changes and Mailer deletions.
PINpoint Inquiry Each transaction selection (more than one
selection may be made during a call) made by a
Cardholder of Customer which accesses the
Cardholder's account records for selected
information by the use of a touch-tone telephone.
Plastic to Carrier
Match/Merge The electronic scanning of the account number on
Customer's card carrier and the account number on
the magnetic stripe (OCR line optional) of
Customer's plastics. Upon verification of match,
insert from 1-4 matched plastic cards into
carrier as per control line specifications and
then burst, trim and fold carrier.
Plasticard Agent/Strategy
Inserting Set-Up Each set-up due to a change in Customer's
Plasticard Insert at the agent/strategy level.
Plasticard Bulk Packaging -
A-34
<PAGE> 74
Basic Sort The separation from the production run of
accounts from individual systems, principals,
agents or grouping of zip codes through the use
of designated mail codes.
Plasticard Expedited
Turnaround Accelerated mailing of all of Customer's daily
issue plastics.
Plasticard Forms Purchased Each item of paper material ordered by FDR on
behalf of Customer including but not limited to
card carriers, inserts and envelopes.
Plasticard Hot Stamping Each plastic card of Customer's Cardholders whose
image is heatpressed from a magnesium plate made
by FDR with camera-ready art furnished by
Customer.
Plasticard Indent Printing Each plastic card of Customer's Cardholders that
FDR has used impact printing on its back.
Plasticard Inserting The inserting of each accompanying
piece of materials into a #10 windowed envelope
along with a pre-folded card carrier containing a
merged Cardholder plastic. Excludes inserts
required by state or Federal law. Customer
supplies inserts.
Plasticard Job Processing Each scheduled daily receipt of a Customer's
off-line Cardholder Account information,
including logging onto the system and setting up
control reports for each input.
Plasticard Mail Assembly The matching of like carriers into one or more
packages.
Plasticard Mail Handling Mail preparation and handling fees associated
with non-first class mailings of Customer's
Cardholder and Merchant plastics.
Plasticard Mail Integration The mixture by FDR of a mail item containing an
embossed plastic with several other types of
mailing items prior to their delivery to the
United States Postal Service for mailing.
Anything in this Agreement to the contrary
notwithstanding, Customer understands and agrees
that, with respect to any embossed plastics for
which FDR provides Plasticard Mail Integration
Services, the normal turnaround for the mailing
of such embossed plastics shall, for purposes of
this Agreement, be delayed by one (1) business
day.
A-35
<PAGE> 75
Plasticard Manual Rush
Emboss - 2 Day Rush servicing (between 24 and 96 hours) of
Customer request for an embossed Cardholder
plastic and/or PIN/POST Mailer received from
hardcopy, fax or mail, reports or requests.
Includes manual embossing, carrier printing, hand
inserting and other services required to prepare
the plastic for delivery, and applies to any
piece handled separately from Customer's Standard
Embossing services.
Plasticard Manual Rush
Emboss - Same Day Rush servicing of Customer request for an
embossed Cardholder plastic received from
hardcopy, fax or mail, reports or requests where
FDR mails or delivers the plastic to a courier
during the same day of the Customer's request.
Includes manual embossing, carrier printing, hand
inserting and other services required to prepare
the plastic for delivery, and applies to any
plastic piece handled separately from Customer's
Standard Embossing services.
Plasticard On-Line Same
Day Rush Each embossed Cardholder plastic where FDR mails
or delivers the plastic to a courier during the
same day of Customer's request via an on-line
screen (requests must be received by 2:00 p.m.
Central Time). This service includes standard
embossing, carrier printing, inserting and other
services required to prepare the plastic for
delivery.
Plasticard Purging Each removal of a card package and/or printed
PIN/POST Mailer from the delivery/mail stream
prior to delivery to Customer or Customer's
Cardholder.
Plastics Purchased Each item of plastic stock ordered by FDR on
behalf of Customer.
Postal Credit Processing Fee The charge associated with providing any postage
discount generating services for Customer's first
class mailings each month.
Potential Chargeback
Queue Each recording and display in an on-line work
queue of transactions posting to a Cardholder
Account of Customer that exceed a Merchant's
floor-limit and cannot be matched to an
authorization record.
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<PAGE> 76
Promotional Letter Services The services performed by FDR in connection with
letters prepared by FDR at the request of
Customer for mailing to Cardholders (or
Merchants) of Customer for promotional purposes.
Recovery 1 Services An on-line system which provides Customer with
the means to perform Transaction Card recovery
services on Customer's charged-off Cardholder
Accounts. Customer shall have on-line access to
certain software and services on the FDR System
which will allow Customer to perform various
collection related functions with respect to such
Accounts.
Referral Queue Each recording and display in an on-line work
queue of a Cardholder Authorization Referral to
which a Merchant has failed to respond.
Return Account Processing
Service The processing of mailed plastics returned by the
United States Postal Service due to undeliverable
address. Each such plastic shall be destroyed by
FDR and reported to Customer.
Returned Account Plastics
Immediately Delivered
(RAPID) For each undeliverable Transaction Card, FDR will
research and attempt to reroute to the
Cardholder's new address. FDR will also enter the
address change on the Cardholder masterfile.
Returned Transaction Cards of Cardholders for
which no new address is available, and those
which Customer elects not to reroute, shall be
destroyed.
RMS Report - Hardcopy Each FDR Reports Management System (RMS) report
provided to Customer by FDR via hardcopy. Service
includes any preparation required for delivery.
RMS Reports - On-Line
View Each FDR Reports Management System (RMS) report
provided to Customer by FDR via the FDR on-line
system.
RMS Reports - RJE/NDM Each FDR Reports Management System (RMS) report
provided to Customer by FDR via remote job entry
(RJE) or Network Data Mover (NDM).
A-37
<PAGE> 77
Standard Embossing
Services Each plastic card for which FDR has mechanically
raised personalized characters prepared at the
request of Customer based upon Customer's Product
Control File or a CRT entry request made by an
employee of Customer, or in response to a receipt
of a magnetic tape or transmission from Customer
of embossing files in a format defined by FDR.
Includes up to three lines of alphanumeric font
and one line of OCR font on a ".030" plastic, the
recording and verifying of data on the
Transaction Card's magnetic stripe, and tipping
the plastic through the placement of a
contrasting color plastic film on the raised
embossed characters
Transaction Level Processing
(TLP) Promotional
Balance on File The monthly charge for each promotional purchase
balance, associated with a Cardholder Account of
Customer (several promotional purchase balances
may exist at the same time for the same
Cardholder Account), which remains on the FDR
System on the last processing day of the calendar
month, as defined on the CD-121 Ledger Activity
Report or the equivalent report (e.g. - the
CD-621 Report).
Transaction Level Rewards
(TLR) Only Transaction Each Cardholder initiated transaction (as
indicated on the CD-864 Report or its
equivalent), specifically targeted by transaction
and Cardholder decision tables, and passed to the
FDR rewards system for processing (transactions
which have already been posted to a TLP
Promotional Balance on File are excluded).
Multiple targeted transactions may post to a
single Cardholder Account in any one month.
Ultragraphics - Front Side Each logo placed on the front of Customer's
Transaction Cards through the use of a thermal
image process.
Ultragraphics - Back Side Each logo placed on the back of Customer's
Transaction Cards through the use of a thermal
image process.
Vault Storage The inventory and storage of plastics procured
through a source other than FDR.
A-38
<PAGE> 78
EXHIBIT "B"
PAYMENT AND TERM
I. PAYMENT
a. PRICE INCREASES. FDR may increase the fees and charges set forth in
this Exhibit "B" by notice to Customer, as follows:
Processing Fees. For each Processing Year during the Term of this
Agreement after Processing Year 1, FDR may increase the Processing
Fees which were in effect for the immediately preceding Processing
Year (the "Old Year") by an amount not to exceed a percentage of the
Processing Fees which were in effect for the Old Year. The percentage
to be used for the applicable Processing Year shall be equal to sixty
percent (60%) of the percentage change in the Consumer Price Index
("CPI") during a period described below; provided, however, that in no
event shall such increase be less than 0%. For purposes of this
paragraph, the CPI shall be the index compiled by the United States
Department of Labor's Bureau of Labor Statistics, Consumer Price Index
for All Urban Consumers (CPI-U) having a base of 100 in 1982-84, using
that portion of the index which appears under the caption "Other Goods
and Services." The percentage change in the CPI shall be calculated,
and notification given to Customer ninety (90) days in advance of the
effective date of said increase, by comparing the CPI using a twelve
(12) month period ending three (3) months prior to notification to
Customer and expressing the increase in said CPI through the twelve
(12) month period as a percentage.
Special Fees. If, at any time while this Agreement is in effect, the
charges are increased or decreased to FDR for items which are included
in the Special Fees including tariff line rates, WATS lines rates,
data circuit charges or other rates charged to FDR by any
communications common carrier, The United States Postal Service, any
courier or other provider of similar services, or if FDR obtains
communication or other services included in the Special Fees by
another method resulting in an increase or decrease in the charges to
FDR for the items or if additional services are added which are to be
included in the Special Fees, FDR shall increase or decrease, as
appropriate and by an equal amount the amount of the Special Fees
Customer is then paying FDR for the items under this Agreement
effective on the effective date of the increase or decrease to FDR or
add the amount for the additional services effective on the beginning
date of the additional service.
Forms Costs. If, at any time while this Agreement is in effect, the
prices charged to FDR for forms associated with first class mailing
should be increased by FDR's then current forms vendor(s), then FDR
shall have the right to increase, by an equal amount, the prices
charged to Customer in this Exhibit "B" which are impacted by such
increase in forms costs, including but not limited to Cardholder and
Merchant Statements, Letters and Notices. Any such increase shall be
effective on the effective date of the increase to FDR.
<PAGE> 79
b. METHOD OF PAYMENT.
(i) To facilitate the payment of Processing Fees, Special Fees,
Liquidated Damages and any other fee, tax, interest payment, charge or
amount due or payable to FDR under this Agreement, FDR will provide
Customer with an invoice setting forth, with reasonable detail, the
number of items processed, the appropriate unit prices, the total fees
associated with such items and any other supporting detail reasonably
required by Customer. Customer shall pay FDR the undisputed portion of
the invoice within ten (10) days of receipt via wire transfer or ACH
transmission from Customer.
c. INTEREST. If FDR is unable to obtain payment of Processing Fees,
Special Fees Liquidated Damages or any other fee, tax, interest
payment, charge or amount due or payable to FDR under this Agreement
at the time provided for payment under this Agreement, the unpaid
amount of any Processing Fees, Special Fees, Liquidated Damages or
other fee, tax, interest payment, charge or amount shall bear interest
at the rate equal to ten percent (10%) per annum, from the date on
which payment should have been available until the date on which FDR
receives the payment.
d. MINIMUM FEES.
(i) In Processing Year 1, Customer will require and Customer shall pay
to FDR for processing services sufficient to generate aggregate
Processing Fees at least equal to [*] ("Year 1 Minimum Processing
Fee"). In each Processing Year after Processing Year 1, Customer will
require and shall pay to FDR for processing services sufficient to
generate aggregate Processing Fees at least equal to the following
amounts for the following Processing Years (the "Minimum Processing
Fees"):
Processing Year Minimum Processing Fees
--------------- -----------------------
2 [*]
3 [*]
4 [*]
5 and each
subsequent Processing Year [*]
FDR shall calculate the total Processing Fees paid by Customer in
respect of services performed during each Processing Year (the "Total
Annual Processing Fees") 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 paragraph b above
for the amount, if any, by which the Year 1 Minimum Processing Fees or
the Minimum Processing Fees, as applicable, for the Processing Year
exceed the Total Annual Processing Fees for the Processing Year.
(ii) In addition to the provisions of paragraph (i) above, in each
calendar month during which FDR provides Customer with the
Cardholder/Bank Customer Support Services as set forth in Exhibit "A",
Section III-G, Customer will, solely with respect to fees paid in
connection with such
An asterisk (*) indicates that certain information has been omitted from this
agreement pursuant to a request for confidential treatment and has been filed
separately with the Securities and Exchange Commission.
B-2
<PAGE> 80
Cardholder/Bank Customer Support Services, require and pay to FDR for
Cardholder/Bank Customer Support Services sufficient to generate
aggregate Processing Fees at least equal to the following:
December, 1997 No Minimum
January, 1998 [*]
February, 1998 [*]
March 1998 and each [*]
month thereafter
e. BILLING DISPUTE RESOLUTION. In the event that Customer should,
following any payment to FDR pursuant to paragraph (b) above, dispute
the accuracy of the volumes, transaction types or prices associated
with all or any portion of an amount (as indicated on the appropriate
invoice) drawn from Customer's account in accordance with the
provisions of paragraph (b) above (hereinafter referred to as the
"Disputed Amount"), then Customer shall promptly, but in any case not
later than sixty (60) days following the date of such invoice, notify
FDR's Accounts Receivable Department of the nature of such dispute
(hereinafter referred to as an "Inquiry"). FDR will make a reasonable
effort to resolve such dispute and to reimburse such amount to
Customer promptly. However, if the dispute is not resolved within five
(5) business days following FDR's receipt of Customer's Inquiry, then
FDR shall temporarily refund to Customer, by the method set forth in
paragraph (b) above, the Disputed Amount until such time as a complete
resolution of such dispute is effected. Within sixty (60) days
following the date on which FDR receives Customer's Inquiry, FDR shall
completely resolve such dispute. FDR agrees to review and consider any
bona fide dispute of an invoiced amount the notice of which is
submitted by Customer more than sixty (60) days following the date of
the applicable invoice; provided, however, that in no event shall FDR
be required to reimburse Customer for the Disputed Amount in
connection with such a dispute prior to the complete resolution of
such dispute.
f. DECONVERSION. Upon the expiration or termination of this Agreement for
any reason other than those set forth in Section 9.2, Customer shall
pay FDR, at FDR's then current rates, for each activity completed by
FDR in order to accomplish the Deconversion and for all costs,
including postage or shipping, of complying with Section 10.1. FDR
shall pay costs of Deconversion if Customer terminates this Agreement
pursuant to Section 9.2.
g. SIGNING BONUS. As soon as practical following the latter to occur of
(i) the execution of this Agreement by Customer and FDR or (ii) the
date on which Customer first issues Transaction Cards to be serviced
by FDR hereunder, FDR agrees to pay to Customer a signing bonus of
[*] (the "Signing Bonus").
h. GROWTH CREDIT. Upon the conclusion of each Processing Year during the
Term of this Agreement, FDR shall calculate the Total Annual
Processing Fees paid to FDR by Customer during the Processing Year.
If, during a Processing Year, the Total Annual Processing Fees paid to
FDR by Customer exceeds the Year 1 Minimum Processing Fee or Minimum
Processing Fees (whichever is applicable) for the Processing Year by
an amount equal to or greater than twenty percent (20%) of
An asterisk (*) indicates that certain information has been omitted from this
agreement pursuant to a request for confidential treatment and has been filed
separately with the Securities and Exchange Commission.
B-3
<PAGE> 81
the Year 1 Minimum Processing Fee or Minimum Processing Fees
(whichever is applicable) for the Processing Year, then Customer shall
be entitled to a "Growth Credit" for such Processing Year. The amount
of the Growth Credit to be paid to Customer by FDR hereunder for a
qualifying Processing Year shall be equal to (i) the Total Annual
Processing Fees paid to FDR by Customer during the qualifying
Processing Year, multiplied by (ii) the applicable percentage from the
schedule below (the "Percentage of Credit") based upon the percentage
by which the Total Annual Processing Fees for the qualifying
Processing Year exceeds the Year 1 Minimum Processing Fee or the
Minimum Processing Fees (whichever is applicable) for the qualifying
Processing Year (the "Percentage In Excess Of Minimum").
Percentage In
Excess Of Minimum Percentage of Credit
----------------- --------------------
0% - 19.99% 0
20.00% - 39.99% 1%
40.00% - 59.99% 2%
60.00% - 79.99% 3%
80.00% - 99.99% 4%
100.00% - over 5%
Any Growth Credit for which Customer qualifies pursuant to this
Exhibit "B", Section I-h shall be paid to Customer by FDR within
ninety (90) days following the conclusion of the qualifying Processing
Year in the form of a credit against Processing Fees due FDR by
Customer pursuant to this Agreement (or, in the event of the
termination or expiration of this Agreement, any applicable Growth
Credit shall be paid via wire transfer from the account of FDR to the
account of Customer.
i. PRICE RENEGOTIATION. If, in any Processing Year during the Term of
this Agreement, the volume of Customer's Cardholder Accounts on File
for any month exceeds [*] then Customer may, following such month,
request that Customer and FDR renegotiate the prices set forth in this
Agreement based upon such volume of Cardholder Accounts on File. In
such event, FDR agrees to negotiate in good faith with Customer based
upon such request of Customer, provided, however, that if the parties
are unable to mutually agree upon new pricing hereunder, the prices
set forth in this Agreement shall continue in effect.
II. TAXES
a. PAYMENT OF TAXES. Customer shall, in addition to the other amounts
payable under this Agreement, pay all taxes, federal, state or
otherwise, or duties, imposts, fees or charges, however designated,
which are levied or imposed by any governmental authority by reason of
the sale or license of any services, communication equipment, software
or other goods and products covered by this Agreement except for
income taxes payable by FDR on amounts earned by FDR. Without limiting
the foregoing, Customer shall promptly pay to FDR an amount equal to
any items actually paid or required to be collected or paid by FDR.
An asterisk (*) indicates that certain information has been omitted from this
agreement pursuant to a request for confidential treatment and has been filed
separately with the Securities and Exchange Commission.
B-4
<PAGE> 82
b. CALCULATION OF TAXES. Customer hereby authorizes FDR to calculate the
total amount of sales taxes due by Customer or Customer's Transaction
Card Affiliates from the monies due FDR and remit the amount of sales
taxes to the appropriate taxing authority on behalf of Customer and
Customer's Transaction Card Affiliates. FDR's remittance of the sales
taxes on behalf of Customer and Customer's Transaction Card Affiliates
shall be computed by FDR on the information available to FDR. In the
event of the under or over calculation of any sales taxes, Customer
shall be responsible for any additional monies due including any
penalties or interest and for collecting any refunds due to Customer
and Customer's Transaction Card Affiliates from the appropriate taxing
authority.
c. TAX INFORMATION. Prior to FDR making the sales tax remittance on
behalf of Customer and Customer's Transaction Card Affiliates provided
in paragraph a above, Customer agrees to supply FDR with any and all
current information necessary for FDR to compute and remit the taxes,
including any tax exempt certificate, any tax exempt claim letter, or
evidence satisfactory to FDR authenticating the exemption.
III. TERM
a. TERM. This Agreement is effective from the date hereof and shall
extend for five (5) Processing Years (the "Original Term"). The first
Processing Year ("Processing Year 1") shall commence on the first day
of the month following the Scheduled Start-Up Date and continue
through the last day of twelve (12) calendar months thereafter. Each
subsequent Processing Year shall mean a twelve (12) month period
commencing on the expiration of the preceding Processing Year.
b. RENEWAL. After the Original Term, this Agreement shall automatically
be renewed for consecutive periods of two (2) Processing Years each (a
"Renewal Term") unless either party gives the other party written
notice at least nine (9) months prior to the termination date of the
Original Term or then current Renewal Term that the Agreement will not
be renewed.
IV. REIMBURSEMENTS AND ASSESSMENTS
a. The communications data circuit, including the reoccurring service
charge, service termination fees and required modem(s) (data sets) at
Customer's location(s) and FDR, terminal(s) and any other directly
associated expenses, shall be at Customer's expense. The data circuit
cost will be no greater than that associated with a point-to-point
digital data circuit(s) based on the tariffs of FDR's primary carrier.
One time costs related to the installation of the circuit, as
specified by such tariffs, will also be paid by Customer. The actual
circuit speed and ensuing cost will be determined by Customer's
communications requirements.
b. Customer shall be responsible for and billed directly for any
MasterCard, VISA or other Transaction Card dues, fees and assessments.
Customer shall reimburse FDR for Base Access Fees incurred by FDR on
behalf of Customer. (IN - 3513)
B-5
<PAGE> 83
c. Customer shall pay all courier expenses associated with the
transportation of reports and documents from Customer to FDR and from
FDR to Customer.
d. FDR agrees to act as an agent on behalf of Customer and Customer shall
reimburse FDR for the purchase on Customer's behalf of the postage
required to mail Cardholder Statements, Merchant Statements,
collection notices, letters and other materials mailed by FDR on
behalf of Customer and Customer's Transaction Card Affiliates. The
amount reimbursed by Customer to FDR for postage while this Agreement
is in effect will be: (i) the then current first class postage rate
for mailings not qualifying for the pre-sorted rebate or (ii) based
upon the monthly rate of mailings of the particular location of FDR
from which the mailings were sent that qualify for the discount
pre-sorted rate and the number of mailings sent on behalf of Customer
from that location during the month, the then current discount
pre-sorted postage rate (currently $___). (IN - 7401, 7671)
e. For any standard services performed by FDR on behalf of Customer in
connection with the Start-Up of present computer Cardholder records
for Customer on the FDR System, there shall be no charge to Customer;
provided, that Customer shall pay FDR at FDR's then current standard
rates for any customized computer programming and related services
performed by FDR on behalf of Customer in connection with such
Start-Up.
f. For each Reward processed by FDR, Customer shall reimburse FDR for the
amount of the Reward payment to the Merchant, plus any additional fees
or charges to which FDR is entitled under applicable MasterCard and
VISA rules and regulations in connection with the processing of such
Reward. A Reward shall mean each monetary payment made to a Merchant
for the recovery of a statused Transaction Card of Customer, which
payment is processed by FDR in accordance with the reward schedule
established by MasterCard and VISA for card pick-up. At the time of
the execution of this Agreement, the amount of such reimbursement is
$15.00 per card. (IN - 7915)
g. Customer shall reimburse FDR for special service set-up/certification
fees and charges, training fees and programming fees including but not
limited to the set up/training charges associated with FDR's Customer
Inquiry Management System (CIMS) Services, PIN Management System
Services, Extended CIS Services, Application Processing Services, PC
Remote Access Services, Account-Level Processing (ALP) Services,
Online Access and Retrieval System (OARS) Services, Acquiring Debit
Services, Transaction Level Processing (TLP)/Transaction Level Rewards
(TLR) Services, ANI Card Activation Services, Commercial Card
Services, Promotional Letter Services, Fraud Management/Fraud
Detection Services (Scoring and Strategy Start-Up and Call
Processing), Auto PIN Change Services, KnowledgeSight Services and
other services requiring special programming or training. Prices for
such services shall be provided by FDR upon Customer's request. At the
time of the execution of this Agreement, FDR's current price for
computer programming is $150.00 per programmer hour.
h. Customer shall reimburse FDR for destroyed forms, product service
selects, network control requests, equipment sales, supplies and
documentation manuals.
B-6
<PAGE> 84
V. SERVICE FEES
a. CARDHOLDER FEES
IN ITEM Per Item Charge
---- ---- ---------------
7204 Cardholder Account on File $ .0193 /month/account
7260 Account-Level Processing (ALP) - Cardholder
Pricing Account on File .0075 /month/account
on ALP
2836 Transaction Level Processing (TLP) Promotional
Balance on File (monthly) .0720 /promotional balance
7330 Transaction Level Rewards (TLR) Only Transaction .0225 /transaction
7205 Cardholder Statement .1124 /statement
7240 Cardholder Statement Mail Preparation .0850 /statement
7206 Cardholder Statement Insert .0075 /insert
Enterprise Presentation Cardholder Statement (in addition
to the current Cardholder Statement fees)
-Option 1 (Simplex)
7196 For the first printed page .0100
7198 For each subsequent page .0180 /page
-Option 2 (Simplex)
7196 For the first printed page .0100
7198 For each subsequent page .0180 /page
-Option 3 (Duplex)
7196 For the first physical page (front and back) .0100
7198 For each subsequent physical page (front and back) .0180 /page
7207 Letter .1077 /letter
Letter Optional Services:
7208 -Letter Insert .0075 /insert
7209 -Letter Additional Pages .0796 /item
7210 -Letter Priority Mailing .1294 /item
7211 -Letter Certified Mail Handling 1.4925 /item
7212 -Letter Group Samples .0796 /item
7213 -Letter Set-Up, Revision or Deletion
(1/2 hour minimum) 31.2500 /half hour
7214 Cardholder Notice .0600 /item
7242 Promotional Letter .1200 /letter
7215 Cardholder Monetary Transaction .0174 /item
7216 Cardholder Non-Monetary/Online Transaction .0089 /transaction
7311 CIS Statement .0100 /statement stored
B-7
<PAGE> 85
7312 CIS Detail Included per month
7219 CIS Memo Included
7232 CIMS Regular Workcase .0500 /workcase
7233 CIMS WOV Workcase .1100 /workcase
7234 CIMS Log-Only Workcase .0398 /workcase
7255 CIMS Regular Workcase Action .0118 /item
7220 Application Processing Services (APS) .5277 /application entered
7221 APS Relationship Account Storage .0030 /depository account
7222 On-Line Credit Bureau Report Request .2292 /request
3510 Cardholder Authorization Inquiry .0089 /inquiry
7217 Issuer Chargeback .9452 /chargeback
7226 PINpoint Inquiry .2985 /inquiry
7227 Cardholder Annual Activity Summary .2400 /summary
7228 Cardholder Annual Activity Summary Detail Storage .0050 /account
7230 Company Card Report Mail Preparation .3300 /set of reports
7231 IRS Home Equity Form (1098) .9452 /form
7236 ACCD Downloaded Account .0073 /account
7237 Check Order Service .0600 /account
Balance Consolidation Services:
- Creation of check data file and tape
transmission to vendor Quote /check
7258 Auto PIN Change .7900 /call
7262 Cardholder Selected PIN (SMR/SMC) Transaction .1500 /transaction
7600 Embossing Set Up 2.9850 /series of like plastics
7601 Standard Embossing Services .2583 /plastic embossed
7602 Card Carrier Printing Included /carrier
7603 Plastic to Carrier Match/Merge Included /plastic
7604 Carrier Insert/Meter/Mail Included /carrier
7605 Vault Storage .0149 /plastic levied upon
receipt of shipment
7606 Plasticard Mail Handling 1.3444 account plus postage
7608 PIN/Post Mailer Processing .0643 /account
7670 PIN/Post Mailer Production Edits .2500 /edit
7663 DES PIN Generation .0200 /DES PIN generated
7609 Plasticard Manual Rush Emboss - Same Day 10.000 /account
7610 Plasticard Manual Rush Emboss - Two Day 6.6500 /account
7611 Automatic Rush Embossing 9.9500 /account
7640 Plasticard Expedited Turnaround .3900 /plastic
7678 Plasticard On-Line Same Day Rush 9.9500 /plastic
7612 Hot Stamp Plates/Logos Purchased Quote
7613 Plasticard Hot Stamping included
B-8
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7614 Ultragraphics -Front Side .0697 /plastic
7639 Ultragraphics -Back Side .0697 /plastic
7615 Plasticard Purging 2.4875 /account
7616 Plasticard Inserting .0200 /insert
7617 Plasticard Mail Integration .0465 /item
7618 Plasticard Job Processing 24.8750 /tape
7619 Plasticard Agent/Strategy Inserting Set-Up 4.4775 /set up
7620 Plasticard Indent Printing .0100 /plastic
7621 Braille Embossing 4.0000 /plastic
7622 Card Activation Labeling-General Use .0457 /plastic
7623 Card Activation Labeling-Selective Use .0550 /plastic
7624 CVV/CVC Generation Verification /calculated value
7625 Plasticard Bulk Packaging - Basic Sort .1616 /account
7686 High Coercivity included
Plasticard. Photocard Services (1" x 1 and 2" x 2"):
7664 -Photo Transfer (1" x 1") 1.2000 /plastic
7667 -Photo Transfer (2" x 2") .6000 /plastic
7665 -Photo/Signature Scanning and Digitization (1" x 1") 2.1500 /plastic
7668 -Photo Scanning and Digitization (2" x 2") 2.1500 /plastic
7666 -Photo Image Handling and Merge (1 " x 1 ") .4300 /plastic
7666 -Photo Image Handling and Merge (2" x 2") .8500 /plastic
7626 Plasticard Mail Assembly .3896 /item
7627 Plasticard Purchased Quote
7628 Plastics Purchased Quote
7900 Lost/Stolen Account Processing .4516 /account processed
7901 Lost/Stolen Report - FDR Entered 4.8250 /report
7902 Cardholder Hot Call Referral 4.4775 /referral
7904 Cardholder Hot Call Fraud Referral 7.8454 /referral
7905 Emergency Card or Cash Replacement Services .0025 /account on file
7906 Returned Account Plastics Immediately
Delivered (RAPID) 2.3880 /plastic
Return Account Processing Service 1.4000 /account
7907 Automatic Chargeback 1.7500 /chargeback initiated
7908 Lost/Stolen Account Management and Investigation 20.0000 /accounts reported
lost or stolen
7909 Lost/Stolen Account Transaction Management System .3000 /transaction
7910 Potential Chargeback Queue .0258 /account in queue
per day
7911 Referral Queue .0597 /account in queue
per day
7912 Card Activation-Voice Call-FDR .2440 /transaction
7913 Card Activation-ARU Call-FDR .5075 /transaction
7923 Card Activation-ANI Call-FDR .3800 /transaction
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7914 Card Activation Customer Processed .0600 /transaction
7285 Recovery 1 Monthly Residence Fee (per
charged off account on file upon the
conclusion of a calendar month)
First 5,000 accounts .4000 /account
Next 20,000 accounts (5,001-25,000) .1800 /account
Next 25,000 accounts (25,001-50,000) .0900 /account
Next 50,000 accounts (50,001-100,000) .0700 /account
Next 100,000 accounts (100,001-200,000) .0500 /account
Over 200,000 accounts .0400 /account
7286 Recovery 1 Financial Transaction Fee .0900 /transaction
7287 Recovery 1 Note on File .0010 /note
7288 Recovery 1 Save Executed Quote /run
Fraud Management/Fraud Detection Service Fee (monthly)
Number of Monthly Gross Active
Credit Card Accounts for the Month
0 - 599,999 .0514
600,000 - 999,999 .0479
1,000,000 - 1,999,999 .0459
2,000,000 - 2,999,999 .0439
3,000,000 - 4,999,999 .0419
5,000,000 - above .0409 /monthly gross active
credit card account
Fraud Management/Fraud Detection Call Processing Services 2.8258 /actioned credit card
account
Credit Performance Service Fees:
7295 -Monthly Service Fee per Account in
1 - 59 Day Queue 4.5000 /account
7296 -Monthly Service Fee per Account in
60+ Day Queue 13.5000 /account
7297 -Inbound Delinquent Billing Call 3.0000 /call accepted
7298 -Skiptracing per Account 11.2500 /account
Cardholder Support Service Fees:
-Cardholder/Bank Customer Service (subject
to the Call Volume factors set forth below)
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Number of Customer's Credit Price Per Credit Card
Card Related Active Cardholder Related Active Cardholder
Accounts on File Upon the Account on File Upon the
Conclusion of a Calendar Month Conclusion of the Calendar Month
------------------------------ --------------------------------
0 - 50,000 1.05
50,001 - 100,000 .80
100,001 - 150,000 0.70
150,001 - 200,000 0.60
200,001 - 300,000 0.57
300,001 - 450,000 0.55
450,001 - 500,000 0.53
500,001 - Over 0.50
For purposes of the pricing above, Active Accounts on File shall mean
those of Customer's Cardholder Accounts on File which are defined as
"Gross Active Accounts" on the CD-121 Ledger Activity Report or its
equivalent.
The prices above for Cardholder/Bank Customer Services are based upon
a Monthly Call Volume (as determined herein) of between 0% and 10%.
For each whole Monthly Call Volume percentage in excess of 10% during
a month, the price per Active Cardholder Account on File from the grid
above shall be increased by $.03. For purposes of this paragraph, the
Monthly Call Volume shall be equal to (i) the total number of
representative calls answered by FDR on behalf of Customer during the
calendar month, divided by (ii) the number of Active Cardholder
Accounts on File upon the conclusion of the calendar month, with the
resulting quotient expressed as a percentage.
-Dispute/Chargeback Correspondence Services 30.0000 /new dispute
-Credit Services
General Credit Written Inquiries 5.4000 /item
Inbound General Credit Telephonic Inquiries 1.1000 /talk minute
*Outbound Applicant Verification Calls 28.0000 /staffed hour
-Credit Enhanced Services
Approved Application .6500 /application
Declined Application .1500 /application
-Technical Systems Support Services
One-Time Set-up Fee (including but not limited
to programming, scripting, VRU setup,
report setup and mail tape setup) 150.0000 /hour
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Non-Decision Transaction Routing .0750 /transaction
Decision Transaction Routing .3000 /transaction
Reports .1000 /page
Facsimile 1.0000 /page
Balance Transfer .4500 /request plus
third party fee
File Creation
- Transmission 50.0000 /file
- Tape 75.0000 /file
Miscellaneous Programming 150.0000 /hour
Data Lines/Modems (Buyer requested) At Cost
** Quality Call Monitoring 6 hours per calendar month/
no charge
Record Filming .0500 /frame
After the effective date of this Agreement, Customer shall be
responsible for any other fees and costs incurred by FDR in connection
with the performance of the Cardholder Support Services, including but
not limited to preparation of training and documentation manuals used
by FDR to provide the Cardholder Support Services on behalf of
Customer, voice and data circuit charges, voice usage charges, voice
feature charges, data voice and voice feature charges, data voice and
vocal feature installation/deinstallation charges, materials,
supplies, postage, courier fees, and travel requested by Customer. The
Cardholder Support Service Fees payable hereunder are based on the
specific services FDR has agreed to provide under Exhibit "A", Section
G of this Agreement. Any services required by Customer in addition to,
or different from, those specified in Exhibit "A", Section G will be
provided at FDR's then current rates for such services.
Fees incurred by FDR for initial training of newly hired customer
service representatives ("CSRs") who will provide Cardholder Support
Services will be passed-through to Customer at cost. Additional
training fees incurred by FDR due to required additions to staff due
to anticipated higher call volume will be passed-through to Customer
at the rate of $15.00 per training hour per CSR. Training fees
incurred by FDR for newly hired FDR employees required due to staff
attrition will be absorbed by FDR and will not be passed-through to
Customer.
* Minimum of one full time employee. FDR and Customer shall review
and adjust pricing, if appropriate, after three (3) months.
** Upon the availability of call recording, FDR and Customer shall
mutually agree on alternative pricing for call recorded
monitoring.
b. NON-SPECIFIC FEES
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<PAGE> 90
IN ITEM Per Item Charge
---- ---- ---------------
7402 Non-Standard Job Run (including Master Files) 50.0000 /data set
7403 RMS Reports-Hardcopy .0400 /page
7404 RMS Reports-RJE/NDM .0183 /page
7405 RMS Reports-On-Line View .0156 /page
Microfiche:
0246 -First Copy .8507 /page
0248 -Each Additional Copy .1483 /page
7413 Online Access and Retrieval System (OARS) Services .0119 /page
4352 CD-ROM Service Pages .0126 /page
7411 Interface Services-RJE/NDM 3.3800 /transmission
7412 Interface Services-Tape to Tape 3.3800 /transmission
7408 Interface Services-Magnetic Tape Handling 25.0000 /tape
7407 PC Remote Access Service (500 minute
per month minimum per user i.d. number)
Total Minutes of Usage
During a Calendar Month
-----------------------
500 - 750 .2400
751 - 1,250 .2100
1,251 - 1,500 .1900
1,501 - over .1800 /minute
7637 Custom Forms Purchased Quote
InfoSight Services Quoted Upon Request
4320 FDR Link-Up One-Time Start-Up Fee 100.0000 /mailbox
4321 FDR Link-Up Monthly Service Fee 15.0000 /mailbox
4435 Postal Credit Processing Fee .0249 /item
KnowledgeSight Service Fees:
N/A -Data Warehouse Fee .0060 /100 data elements
stored in the data
warehouse per month
N/A -Data Warehouse Load Fee .0050 /100 data elements
loaded to the data
warehouse per month
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N/A -Historical Retention Fee Warehouse
per month
.0010 /1,000 data elements
retained per month
d. For purposes of the billing of RMS Reports: (i) if Customer's standard
(or default) setting for a particular report is "0", then all pages of
RMS On-Line View, RMS Hardcopy and RMS RJE of such report provided by
FDR to Customer shall be billed to Customer at the prices above, or
(ii) if Customer's standard (or default) setting for a particular
report is a value other than "0", then each page of the RMS On-Line
View of such report provided by FDR to Customer shall be at no charge
and each page of RMS Hardcopy and RMS RJE of such report shall be
billed to Customer at the prices above.
e. FDR will generate embossing information based upon Customer's Product
Control File (or, at Customer's option, receive embossing information
via tape from Customer), use such information to prepare the embossed
plastic and mail the embossed plastic on behalf of Customer to its
Cardholder at the Cardholder's then current address.
f In the event that Customer elects to utilize the Recovery 1 Services
set forth in paragraph a above, then Customer hereby agrees to
continue to utilize such services for a period of not less than twelve
(12) months following the commencement date of such services.
g. For the uploading or downloading of information to or from the FDR
System via the PC Remote Access Services, Customer shall, in addition
to charges set forth above, pay FDR $6.50 for each instance in which
information is made available by FDR for downloading to Customer upon
cycle completion and each upload made by Customer to the FDR System.
h. Customer shall, by initialing the appropriate blank below, indicate
which of the Enterprise Presentation Cardholder Statement service
pricing options (as set forth in paragraph a above) Customer elects to
utilize commencing on the commencement date of such services:
Option 1______________
Option 2______________
Option 3______________
Customer may, at its election during the remaining Term of this
Agreement, switch from the pricing option then currently being
utilized by Customer for Enterprise Presentation
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Cardholder Statement services to another pricing option from the
selections above (subject to any applicable price escalators set forth
in this Agreement). Any such switch in pricing options shall be for a
period of one (1) calendar year effective on January 1, and Customer
agrees to give FDR written notice, on or before September 1 of the
preceding calendar year, of its intention to effect such a switch.
There shall be no charge to Customer for the first such switch in
pricing options. For each such switch in pricing options requested by
Customer in excess of one (1), Customer shall pay FDR, upon receipt of
FDR's written invoice, the amount of $15,000.00.
i. If, during any calendar month, Customer requests that FDR provide
Summary CD-ROM Bundles, then Customer shall pay FDR $475.00 for each
such Summary CD-ROM Bundle. For each duplicate copy of a CD-ROM
Bundle, Customer shall pay FDR $75.00. For any computer programming or
any other technical services performed by FDR on behalf of Customer in
connection with the CD-ROM Services performed by FDR on behalf of
Customer, Customer shall pay FDR at FDR's then current standard rates
for such services. Such rates shall be provided to Customer by FDR
upon request. A CD-ROM Bundle, for purposes of the statements on
CD-ROM Services, consists of three (3) copies, one for Customer, one
for archive and one for Customer's customer service representative. A
CD-ROM Bundle, for purposes of the reports on CD-ROM Services,
consists of two (2) copies, one for Customer, and one for archive. A
Summary CD-ROM Bundle summarizes previously produced CD-ROM Bundles.
Customer shall provide at its expense the minimum personal computer
configuration set forth below:
386/486 Processor with Hard Drive (486 preferred)
8 MB RAM (12 MB preferred)
3.1 Windows
Mouse
14" VGA Color Monitor (SVGA preferred)
CD-ROM Drive (double speed)
Laser Printer
VI. Certain services performed by FDR on behalf of Customer shall be included
in the overall pricing set forth in this Exhibit "B" and shall be provided
to Customer at no additional charge. Such items are set identified by the
word "Included" in this Exhibit "B".
VII. Commencing on the effective date of this Agreement, Customer shall pay FDR
for each annual volume-sensitive service ("Service") at the rate indicated
by "**". Upon the expiration of each Processing Year, FDR shall calculate
the actual volume of each item of Service during such Processing Year and
then determine the appropriate price per item of each Service. Based upon
such calculation, FDR shall then calculate the total amount of processing
fees owed by Customer to FDR during such Processing Year. If, during any
Processing Year, Customer shall have paid FDR more or less than the amount
owed to FDR based upon the above calculations, then FDR shall issue a
credit to Customer for any amounts due Customer under this Section or
invoice Customer
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<PAGE> 93
for any amounts due FDR, as appropriate. The fees charged for each
item of Service during each subsequent Processing Year shall be based
upon the previous Processing Year's volumes.
VIII. For purposes of this Exhibit "B": (i) "IN" means the item number for such
service or product and (ii) "Quote" means this Agreement does not
contemplate the use of this service or product, but FDR shall, on the
request of the Customer, provide a price for such service or product.
IX. For any services performed by FDR at Customer's direction which are
neither set forth in this Exhibit nor covered by a separate agreement,
Customer shall pay FDR for such services at FDR!s then current standard
rates.
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EXHIBIT "C"
CUSTOMER TRANSACTION CARD AFFILIATE AGREEMENT
This Customer Transaction Card Affiliate Agreement (the "Agreement") is
entered into this ____ day of ________, 1997, (the "Effective Date") among First
Data Resources Inc., 7302 Pacific Street, Omaha, Nebraska ("FDR") Internet
Access Financial Corporation, 595 Market Street, Suite 2250, San Francisco,
California ("Customer") and Customer's Transaction Card Affiliate, Heritage
Bank, of Commerce, 150 Almaden Boulevard, San Jose, California ("Affiliate").
WHEREAS, FDR and Customer have entered into a Service Agreement (the
"Service Agreement") setting forth certain ongoing rights, duties and
obligations relating to the origination and servicing of Transaction Card
accounts; and
WHEREAS, Customer and Affiliate have entered into a Customer Credit
Card Program Agreement (the "Heritage Agreement") whereby Customer has agreed to
originate and service Transaction Card accounts for the benefit of Affiliate,
with account processing to be provided by FDR; and
WHEREAS, in order to extend to Affiliate certain of the benefits of the
Service Agreement, it is necessary that Affiliate become bound by certain of
the obligations of the Service Agreement, including but not limited to the
payment obligations with respect to transaction settlements and account
processing.
NOW, THEREFORE, the parties agree as follows:
1. Affiliate acknowledges receipt of a copy of the Service Agreement
including but not limited to all Exhibits and attachments thereto. With respect
to Customer Accounts of Affiliate, arising out of the "Heritage Agreement"
Affiliate agrees to be bound by all of the terms and conditions of the Service
Agreement, including the payment obligations arising under Exhibit B. Affiliate
shall not be responsible for any obligations set forth in the Service Agreement
which expressly belong to Customer, and not of Affiliate, including, without
limitation, the payment obligations relating to Minimum Processing Fees and
Liquidated Damages. This Agreement shall remain in effect until the earlier of:
(a) expiration or termination of the Service Agreement, or (b) Affiliate no
longer being associated with Customer.
2. Affiliate specifically agrees to comply with the rules, procedures,
manuals and instructions of MasterCard, VISA, FDR and Customer as applicable to
Affiliate and as in effect from time to time.
3. Customer shall act as the agent of Affiliate and have full authority
to represent Affiliate and to act fully on Affiliate's behalf in connection with
the Service Agreement and/or this
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Customer Transaction Card Affiliate Agreement, including the negotiating with
FDR of any amendments, extensions of the term or revisions of the Service
Agreement and/or this Customer Transaction Card Affiliate Agreement, the
asserting, negotiating and resolving of any controversy, dispute or claim under
the Service Agreement and/or this Customer Transaction Card Affiliate Agreement
and the execution or delivery of any documents; provided, however, that Customer
shall give prompt notice to Affiliate of any amendment to the Service Agreement
or this Customer Transaction Card Affiliate Agreement pursuant to Section 11,
below.
4. Affiliate agrees that, with respect to Customer Accounts of
Affiliate and except as otherwise set forth in this Customer Transaction Card
Affiliate Agreement, Affiliate and Customer shall be severally liable to FDR for
all other obligations of Affiliate which are to be paid by Customer pursuant to
the Service Agreement. If Customer shall fail to pay any amounts due under the
Service Agreement, including but not limited to any Processing Fees, the Daily
Amount (if applicable), or other fees, taxes, interest payments, charges or
amounts due or payable by Customer with respect to accounts owned by Affiliate,
Affiliate shall pay FDR on demand the portion of the amounts due from Customer
to FDR for services performed by FDR for or on behalf of Affiliate, as
reasonably determined by FDR, which equals the percentage that the Processing
Fees for the period relating to processing for Affiliate are of the total
Processing Fees due under the Service Agreement for such period.
5. This Customer Transaction Card Affiliate Agreement is being executed
for the benefit of FDR and that FDR has relied upon the existence of this
Customer Transaction Card Affiliate Agreement and the terms and conditions
contained in it in electing to enter into the Service Agreement and FDR would
not have elected to execute the Service Agreement in the absence of the
existence of this Customer Transaction Card Affiliate Agreement.
6. In all circumstances in which Affiliate shares responsibility of any
of Customer's obligations under the Service Agreement, Affiliate:
(a) agrees that separate action or actions may be brought against
Affiliate, whether action is brought against Customer or
whether Customer is joined in any such action or actions;
(b) authorizes FDR, without notice or demand and without
affecting Affiliate's liability hereunder, from time to time,
to (a) take and hold security for the performance of
Customer's obligations and exchange, enforce, waive and
release any such security, (b) apply any such security and
direct the order or manner of sale thereof (whether by
judicial or nonjudicial sale or otherwise as FDR in its
discretion may determine), and (c) release or substitute any
one or more of any endorsers or guarantors of such
obligations;
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(c) waives any right to require FDR to (a) proceed against
Customer, (b) proceed against or exhaust any security held
from Customer, or (c) pursue any other remedy in FDR's power
whatsoever; and
(d) waives any defense arising by reason of any disability or
other defense of Customer or by reason of the cessation from
any cause whatsoever or the liability of Customer.
7. Upon any termination of this Customer Transaction Card Affiliate
Agreement, Affiliate agrees to open or to leave open for 6 months following such
termination an account through which Customer and/or FDR can draw drafts or ACH
for reimbursement of lingering charges incurred on behalf of Affiliate.
8. This Customer Transaction Card Affiliate Agreement, and all rights
and obligations of the parties with respect to matters in connection herewith,
arising hereunder or related hereto, shall be governed by and construed in
accordance with the laws of the State of New York, and any claim, suit or
proceeding shall be subject to the provisions of Section 13.4 of the Service
Agreement.
9. Affiliate acknowledges and agrees that it may not transfer or assign
its rights under this Customer Transaction Card Affiliate Agreement without the
prior written consent of FDR as provided in Section 13.1 of the Service
Agreement.
10. Each capitalized term used in this Customer Transaction Card
Affiliate Agreement and not defined herein shall have the definition provided
for such term in the Service Agreement.
11. Any notice to Affiliate shall be given by Customer and shall be
given as provided for in Section 13.5 of the Service Agreement, and shall be
given to the following address:
Affiliate:______________________________________________
Address:________________________________________________
________________________________________________
Attention:______________________________________________
Telecopy Number:________________________________________
Any notice to FDR shall be given as provided in Section 13.5 of the Service
Agreement. A party may change its address or addresses set forth above by giving
the other party notice of the change in accordance with the provision of this
section. In the event FDR provides notice hereunder to Customer of any default
by Customer in the performance of the provisions of the Customer Transaction
Card Affiliate Agreement, which default could result in the termination of this
Customer Transaction Card Affiliate Agreement, FDR will deliver a copy of the
notice to Affiliate receiving services under this Customer Transaction Card
Affiliate Agreement.
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12. This Customer Transaction Card Affiliate Agreement, along with the
Service Agreement, as such may be amended from time to time, sets forth the
entire understanding of the parties with respect to the subject matter hereof
and supersedes all prior agreements or understandings among the parties with
respect to the subject matter hereof. This Customer Transaction Card Affiliate
Agreement may not be amended except in a writing signed by an authorized officer
or representative of each of the parties hereto. This Customer Transaction Card
Affiliate Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
13. Despite anything to the contrary in the Service Agreement, or this
Customer Transaction Card Affiliate Agreement, FDR, at its option, may terminate
this Customer Transaction Card Affiliate Agreement under the following
circumstances:
(a) Immediately, without notice, upon the termination of
Affiliate's membership in VISA and MasterCard or both of their
successors in interest, if after such termination, Affiliate does not
maintain a status that permits FDR to continue to perform its services
on behalf of Affiliate;
(b) If Affiliate fails to pay any Daily Amount when required
under Section 14 of this Customer Transaction Card Affiliate Agreement
(if applicable) and does not cure the failure within four (4) hours
after written notice to Customer of the failure or immediately without
notice if FDR has the right more than three times in any twelve month
period to give notice under this Section 13 whether or not the notice
is given; and
(c) Upon twenty-four (24) hours notice by FDR if FDR has
terminated Interchange Settlement of transactions on behalf of
Affiliate pursuant to Section 14 (if applicable) for more than ten (10)
consecutive days or for more than twenty (20) days in any Processing
Year.
14. Interchange Settlement
(a) In order for FDR to provide its settlement services to
Affiliate pursuant to this Agreement, it is necessary for FDR
to handle and settle Interchange Settlement for Affiliate
through the international Interchange networks of MasterCard
and VISA. It shall be the responsibility of Affiliate to
provide ICA and BIN numbers from MasterCard and VISA,
respectively, for use by FDR in the settlement of
transactions for Affiliate. Affiliate understands that FDR
handles the Interchange Settlement with MasterCard and VISA
for its clients including Affiliate on a net settlement basis
(the "Settlement System"). To facilitate the Settlement
System, FDR has established, will establish or will direct
Affiliate to establish and may in the future establish or
direct Affiliate to establish one or more interchange
settlement Central
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Clearing Accounts (collectively the "Settlement Account") at
one or more banks.
(b) FDR shall calculate and FDR or Customer shall inform
Affiliate on each business day of the amount of funds to be
transferred (the "Daily Amount") as the result of (i) current
transaction processing, and (ii) funding required for
incoming transactions of Affiliate. If the Daily Amount is
negative, Affiliate must transfer to the Settlement Account
immediately available funds in an amount equal to the Daily
Amount or have available in the Settlement Account, prior to
noon, Central Time Zone, on the business day, funds in an
amount equal to the Daily Amount. If the Daily Amount is
positive, FDR will transfer to Affiliate, or will cause
MasterCard or VISA to transfer to Affiliate, immediately
available funds equal to the Daily Amount prior to the close
of business of the Federal Reserve System in New York on such
date.
(c) The Daily Amount shall equal:
(i) The Net Settlement Amount for Affiliate, plus
(ii) The amount necessary to fund incoming Interchange
transactions not yet processed, determined in accordance with
the FDR Settlement Rules, minus
(iii) The amount previously advanced by Affiliate with
respect to prior incoming Interchange transactions for which
processing is complete.
(d) In the event of the failure of Affiliate on any business day
when required by the terms of this Agreement or the FDR
Settlement Rules, to transfer the Daily Amount to the
Settlement Account, or to make available the Daily Amount in
the Settlement Account for FDR to draw upon, as applicable,
FDR may refuse, without incurring any liability to Affiliate,
to act as Affiliate's agent in discharging any VISA or
MasterCard Interchange obligations of Affiliate and shall
have the right to immediately notify MasterCard and VISA that
it will no longer cause the MasterCard or VISA Interchange
obligations of Affiliate to be discharged. In addition to the
foregoing, FDR may take such actions with respect to
Affiliate's obligations under the Settlement System as FDR
deems reasonable to protect FDR or its customers from any
loss arising from Affiliate's non-payment of the Daily
Amount. If Affiliate, within two (2) business days after
written notice from FDR pays FDR the Daily Amount which
Affiliate had failed to transfer to the Settlement Account
together with late payment fees as set forth in Section 14(e)
of this Affiliate Agreement, then FDR shall continue to act
as
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Affiliate's agent in discharging Affiliate's VISA or
MasterCard Interchange Settlement obligations.
(e) In addition to any other provisions in this Agreement, in the
event of Affiliate's failure to transfer or make available
the Daily Amount for any business day, Affiliate shall pay to
FDR a late payment fee (the "Settlement Late Payment Fee")
which shall be equal to the amount Affiliate would have been
required to pay as a late payment fee under MasterCard and
VISA rules. The amount shall be calculated in accordance with
the rules and shall continue to accrue until FDR shall have
received the Daily Amount from Affiliate. Settlement Late
Payment Fees shall be paid to FDR based upon the rules even
though FDR may have elected to make settlement with
MasterCard or VISA in a timely manner on behalf of Affiliate.
If FDR has received funds from VISA and/or MasterCard as a
result of Interchange Settlement on behalf of Affiliate and
fails to make available the Daily Amount to Affiliate, FDR
shall pay to Affiliate a late payment fee based on the Daily
Amount calculated in the same manner as the Settlement Late
Payment Fee.
(f) The obligation of FDR to discharge any VISA or MasterCard
Interchange obligations of Affiliate shall be solely as an
agent of Affiliate in accordance with the terms and
provisions of this Agreement and the FDR Settlement Rules.
FDR shall have no independent obligation with respect to the
discharge of the Interchange obligations of Affiliate.
(g) In the event that MasterCard or VISA shall notify FDR of any
violation of the rules and regulations of MasterCard or VISA,
relating to Affiliate or transactions processed for
Affiliate, FDR shall have the right, without liability to
Affiliate, to terminate Interchange Settlement of
transactions on behalf of Affiliate under this Agreement
until the time as FDR shall have been notified by MasterCard
or VISA that the violation has been corrected.
(h) Affiliate acknowledges that performance of Interchange
Settlement involves the settlement of certain of Affiliate's
transactions jointly and on a combined net basis with the
settlement of transactions of other customers of FDR.
Accordingly, the payment or receipt by FDR of settlement
monies on behalf of Affiliate may be dependent on equivalent
payments or receipts being received or made by or for other
customers of FDR and in respect of transactions involving
Transaction Cards issued by such other customers. FDR and
Affiliate will cooperate and use all reasonable resources to
identify the reason for any settlement failure and shall
attempt to work to its resolution.
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(i) FDR shall be entitled without further inquiry to execute or
otherwise act upon (i) instructions or information or
purported instructions or information received through the
MasterCard and VISA payment systems and instructions or
information, or (ii) purported instructions or information
received in accordance with the MasterCard and VISA rules or
settlement manuals otherwise than through the payment systems
or in accordance with the FDR Settlement Rules
notwithstanding that it may afterwards be discovered that the
instructions or information were not genuine or were not
initiated by Affiliate. Such execution or action shall
constitute a good discharge to FDR, and FDR shall not be
liable for any liability, damage, expense, claim or loss
(including loss of business, loss of profit or exemplary,
punitive, special, indirect or consequential damages of any
kind) whatsoever arising in whatever manner, directly or
indirectly, from or as a result of the execution or action.
(j) Affiliate agrees to discharge their Interchange Settlement
obligations to FDR under this Section 14 in full and on first
written demand waiving any defense, setoff or right of
counterclaim (without prejudice to the ability of Affiliate
to pursue these independently) and notwithstanding any act or
omission or alleged act or omission or any insufficiency or
deficiency that there is or has been or that may be alleged
in the performance by FDR of its obligations under this
Agreement or otherwise. FDR agrees, however, that it shall
not setoff against any payment to be made by it to Affiliate
or on their behalf pursuant to this Section 14 any amount due
and payable by Affiliate to FDR (without prejudice to the
ability of FDR to pursue these independently) other than
amounts due and payable by Affiliate or on their behalf to
FDR pursuant to this Section 14.
(k) If Affiliate terminates this Agreement or if Affiliate ceases
to obtain processing services from FDR under this Agreement
in a manner which results in fees or charges relating to
Affiliate's Accounts continuing to be included as a part of
FDR's net settlement with MasterCard or VISA, FDR may obtain
daily payment from the Settlement Account established under
Section 14(a) or Affiliate will provide FDR immediately upon
notice with access to an account of Affiliate's funds, not
requiring signature, which FDR may draw upon in order to
receive payment for such fees and charges. FDR will provide
Affiliate with documentation for all fees and charges paid on
behalf of Affiliate.
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IN WITNESS WHEREOF, the parties to this Agreement have caused it to be
executed by their duly authorized signature as of the day and year first written
above.
HERITAGE BANK OF COMMERCE
--------------------------------------
Name of Affiliate:
By: /s/ KEN SILVEIRA
-----------------------------------
Name: Ken Silveira
---------------------------------
Title: E.V.P
---------------------------------
Date: 12/22/97
---------------------------------
INTERNET ACCESS FINANCIAL CORPORATION
By: /s/ JEREMY LENT
-----------------------------------
Name: Jeremy Lent
---------------------------------
Title: CHIEF EXECUTIVE OFFICER
---------------------------------
Date: 12/22/97
---------------------------------
ACCEPTED AND AGREED TO:
FIRST DATA RESOURCES INC.
By: /s/ JOHN THIELEN
-----------------------------------
Name: JOHN THIELEN
---------------------------------
Title: SENIOR VICE PRESIDENT
---------------------------------
Date: 12/22/97
---------------------------------
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EXHIBIT "D"
PERFORMANCE GUIDELINES
1. AUTHORIZATION SYSTEM AVAILABILITY - ISSUER
The issuer authorization on-line will be available via primary or
backup to respond to cardholder authorization inquiries 24 hours per
day, 7 days per week for 99% of the total minutes in the month.
2. EMBOSSING ORDERS -- NEW ACCOUNTS PLASTICS
Cardholder embossing orders entered electronically will be mailed
within three business days following cycle for 95% of each month's
volume and within five business days following cycle for 100% of each
month's volume. Plastic holds and plastic destruction requests by
Customer are excluded from this standard.
3. EMBOSSING ORDERS -- REISSUED ACCOUNTS
Cardholder reissued account plastics produced as a result of FDR's
monthly reissue programs will be mailed ten days prior to the last day
of the month for 100% of each month's volume. Plastic holds and
plastic destruction requests by Customer are excluded from this
standard.
4. LETTERS -- CARDHOLDER
Cardholder letters will be mailed by the end of the third business day
following input for 100% of each month's volume.
5. ON-LINE AVAILABILITY
The production on-line system will be available for inquiry 98.5% of
the time during the hours of 7 a.m. Central Time Zone (CTZ) to 11 p.m.
CTZ, seven days per week. This excludes CIS files on Sunday unless
Customer signs up for 24-hour CIS.
6. ON-LINE SYSTEM UPDATED
The production on-line system will be updated and current for monetary
and non-monetary entry by 7 a.m. CTZ each processing day for 90% of
that month's processing days. This includes the "common" on-line
files.
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<PAGE> 103
7. POSTINGS, MONETARY/NON-MONETARY
Monetary and/or non-monetary files received in the Omaha Data Center
by 5 p.m. CTZ will be processed in that night's production processing
cycle for 90% of the production cycles for the month and by the next
night's production processing cycle for 100% of the production cycles
for the month.
8. REPORTS -- DAILY ON-LINE
On-line reports are made available by the end of the fifth business
day following cycle.
9. REPORTS -- MONTHLY ON-LINE
On-line reports are made available by the end of the fifth business
day following cycle.
10. SETTLEMENT SCREENS
The final settlement wire transfer figure will be available to the
client by 12 p.m. CTZ 90% of the time and by 12:30 p.m. CTZ 100% of
the time.
11. STATEMENTS -- CARDHOLDER
Cardholder statements will be mailed by the end of the third business
day following cycle for 80% of each month's volume and by the end of
the fifth business day following cycle for 100% of each month's
volume.
D-2