EXHIBIT 10(a)
MERCHANT SERVICES BANKCARD AGREEMENT
NORWEGIAN CRUISE LINE LIMITED NORWEGIAN CRUISE LINE: ORIENT LINES
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Customer's Legal Name Doing Business As
0000 XXXXXXXXX XXXXXX XXXXX XXXXX XX 00000
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Street Address City State Zip Code
OTHER 00-0000000
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Specify Whether Customer is a Federal Taxpayer Identification Number
Corporation, Partnership Sole
Proprietorship, Non-Profit or
Other Type of Entity
LAMARR COOLER 000-000-0000
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Recipient For Notices Under Facsimile Number
Paragraph 24.5
This Merchant Services Bankcard Agreement ("Agreement") is among the CUSTOMER
identified above, JPMORGAN CHASE BANK ("BANK") and CHASE MERCHANT SERVICES
L.L.C., ("CMS") (BANK and CMS are collectively referred to as "SERVICERS").
BANK, as a member of Visa U.S.A., Inc. ("VISA") and MasterCard International
Incorporated ("MasterCard"), is responsible for its VISA and MasterCard bankcard
programs and has authorized CMS or its members pursuant to a separate agreement
(the "Agency Agreement") to act as an agent of and in conjunction with BANK in
performing authorization, processing and settlement services for merchants
participating in BANK's MasterCard and VISA bankcard programs, in performing the
additional services with respect to other cards as specified on the schedules to
this Agreement and in taking related actions. CMS is acting in such capacity by
executing and performing this Agreement. As between themselves, the respective
rights and obligations of CMS and BANK shall be governed by the Agency Agreement
and Association Rules.
In consideration of the mutual covenants and agreements set forth herein and
other good and valid consideration, the receipt and sufficiency of which are
hereby acknowledged, SERVICERS and CUSTOMER agree as follows:
1. DEFINITIONS. As used in this Agreement, capitalized terms will have the
meaning set forth in Annex 1.
2. SERVICES.
2.1 During the term of the Agreement, CUSTOMER shall use SERVICERS
as its exclusive provider of all Services for CUSTOMER, except
for CUSTOMER's Card transactions for on-board purchases for
goods or services on its Orient Lines.
2.2 Subject to Association Rules, Services may be performed by CMS
or BANK as they may determine.
3. ACCEPTANCE OF CARDS.
3.1 CUSTOMER will accept any Card properly tendered, without
imposing any special conditions not required or allowed by
Association Rules. CUSTOMER will assess no special charge or
extract any special agreement, condition (including any
minimum or maximum transaction amounts) or security from a
Cardholder in connection with any Card transaction. CUSTOMER
shall not post signs indicating that CUSTOMER will refuse to
honor Card transactions below or above a specified amount.
CUSTOMER shall not engage in acceptance practices or
procedures that discriminate against or discourage the offered
use of any particular Card accepted by CUSTOMER except for
special promotions offered in conjunction with an Association,
provided such promotion does not otherwise violate any other
Association's rules:
3.2 CUSTOMER will check each Card used during transaction for
validity in accordance with the terms of this Agreement, the
Operating Guide and the applicable Association Rules. If the
Cardholder is not present at the point-of-sale, CUSTOMER shall
be responsible for identifying the Cardholder. CUSTOMER will
not honor a Card that appears or CUSTOMER otherwise has reason
to believe to be invalid or expired.
3.3 All Transaction Records and Credit Transactions must include
(i) the transaction date; (ii) a brief description of the
goods or services sold, returned or cancelled; (iii) the price
of the goods or services, including applicable taxes, or
amount of any credit or adjustment; (iv) the Cardholder name;
(v) CUSTOMER's name in a manner recognizable to Cardholders;
(vi) CUSTOMER's address; (vii) a customer service telephone
number; (viii) any applicable terms and conditions of the
sale; (ix) exact date any free trials end and (x) any other
information which the applicable Association may require.
4. OPERATING GUIDE; ASSOCIATION RULES.
CUSTOMER acknowledges that it has received the Operating Guide, the
terms of which are incorporated into this Agreement. CUSTOMER shall
follow the procedures in the Operating Guide in connection with each
Card transaction and comply with all applicable Association Rules. From
time to time, SERVICERS may change the Operating Guide, in whole or in
part, and other operating procedures, by providing CUSTOMER with at
least 30 days' prior written notice of the change. However, in the
event of changes in the Association Rules or for security reasons,
certain change in procedures may become effective on shorter notice. If
there is any conflict between the terms of this Agreement and the
Operating Guide, the terms of this Agreement will govern, unless the
conflict is directly related to a change in the Operating Guide which
specifically addresses a procedure or requirement detailed in this
Agreement.
5. AUTHORIZATION.
5.1 CUSTOMER shall be responsible for obtaining Authorization in
advance for each Card transaction. The Authorization number
provided by SERVICERS shall be recorded in the appropriate
place on the Transaction Record. If Authorization is declined,
CUSTOMER shall not complete the Card transaction.
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5.2 CUSTOMER acknowledges that Authorization, (i) indicates only
the availability of credit at the time of Authorization; (ii)
does not warrant that the person presenting the Card is the
rightful Cardholder; and (iii) is not an unconditional promise
or guarantee by SERVICERS that any Card transaction will not
be subject to Chargeback.
6. INTERNET, TELEPHONE AND MAIL ORDERS.
6.1 For each internet, telephone or mail order, an Authorization
must be obtained, regardless of the face amount, and CUSTOMER
must complete the Transaction Record as described in the
Operating Guide. CUSTOMER assumes all responsibility for
identification of the Cardholder and the validity of the Card
information for internet, telephone and mail orders. For
internet, telephone and mail order Card transactions where
merchandise is to be shipped or delivered to or for the
Cardholder, the shipping date shall not be more than seven
calendar days after the Authorization is obtained, and any
shipping costs not included in the Authorization amount must
not exceed 15% of the amount authorized.
6.2 An installment payment option may be offered if all terms are
clearly disclosed, each installment is authorized, the first
installment is not submitted for settlement until the
merchandise is shipped, and subsequent installments are
submitted no more frequently than monthly.
6.3 CUSTOMER's web site must contain a complete description of the
goods or services offered, returned merchandise and refund
policy, customer service contact information (including an
email address or telephone number), known export or legal
restrictions, and CUSTOMER's delivery policy.
6.4 For internet transactions, copies of Transaction Records may
be delivered to Cardholder's in electronic or paper format.
CUSTOMER may not transmit Cardholder account numbers to
Cardholders for internet transactions.
6.5 CUSTOMER agrees to follow the VISA Cardholders Information
Security Guidelines (presently available online at VISA's
website XXX.XXXX.XXX) as well as any other security guidelines
or requirements established by any applicable Association or
by SERVICERS. Should SERVICERS or any Association require an
audit of CUSTOMER's security practices, CUSTOMER shall
cooperate in such audit and shall reimburse SERVICERS or the
applicable Association for the cost of such audit.
7. MULTIPLE TRANSACTION RECORDS AND PARTIAL CONSIDERATION.
Except as specifically set forth in the Operating Guide or Association
Rules, CUSTOMER shall list all items of goods and services purchased
during each Card transaction and the total amount thereof on a single
Transaction Record.
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8. PREAUTHORIZED ORDERS AND RECURRING SALES.
8.1 If CUSTOMER is authorized to accept Preauthorized Orders or
Recurring Sales (such as for insurance premiums,
subscriptions, membership fees, tuition, utility charges or
preauthorized health care payments), Authorization for each
such Card transaction, regardless of the amount, must be
obtained and CUSTOMER must write "Recurring Transaction" (for
Visa and other non-MasterCard Card transaction) or "PO" (for
MasterCard Card transactions) as applicable, on the
Transaction Record in lieu of the Cardholder's signature.
8.2 A Preauthorized Order or Recurring Sale may not include
partial payments made to CUSTOMER for goods or services
purchased in a single transaction. In no event may any finance
charges be imposed on any periodic payments in connection with
Preauthorized Order or Recurring Sale.
8.3 CUSTOMER may not accept a Preauthorized Order or Recurring
Sale from a Cardholder unless the Cardholder completes and
delivers to CUSTOMER a written request (and, when applicable,
a written renewal request) identifying (i) the goods or
services to be charged to the Cardholder's account (ii) the
amount of the preauthorized or recurring charges (unless such
charges are for variable amounts), (iii) the frequency of the
preauthorized or recurring charges and (iv) the duration of
time for which the Cardholder's permission is granted. If
CUSTOMER accepts any Preauthorized Orders or Recurring Sales
for variable amounts, CUSTOMER must comply with the
supplemental provisions set forth in the applicable Schedules.
8.4 The Cardholder's written request (including any written
renewal request) must (i) be retained for the duration of the
preauthorized or recurring charges; (ii) be provided in
response to SERVICERS' or a Card issuing bank's request for
original documentation; and (iii) not be used after receiving
notice of cancellation.
9. CARDHOLDER REFUNDS AND CREDITS.
9.1 If a Cardholder returns goods or cancels services purchased
from CUSTOMER with a Card, or CUSTOMER allows any other price
adjustment after a sale has been completed and a refund or
adjustment is due to the, CUSTOMER may not return cash to the
Cardholder but will instead prepare a Credit Transaction and
process each such refund or adjustment, as specified in the
Operation Guide and Association Rules. CUSTOMER will give the
Card Holder a copy of the completed Credit Transaction.
9.2 If CUSTOMER establishes a policy limiting refunds or
acceptance of returned merchandise (E.G., no refund, exchange
only, in-store credit only, or special conditions), CUSTOMER
must adequately disclose such policy on each Transaction
Record.
9.3 CUSTOMER may not accept money from a Cardholder for the
purpose of preparing and depositing a Credit Transaction that
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will effect a deposit to the Cardholder's account. CUSTOMER
must not process a Credit Transaction without having completed
a previous offsetting Card transaction with the same
Cardholder. Under no circumstances may CUSTOMER require
Cardholder to waive the Cardholder's right to dispute a Card
transaction with the Card issuing bank.
9.4 CUSTOMER is responsible for funding all Credit Transactions
submitted by CUSTOMER to SERVICERS. CUSTOMER is responsible
for maintaining adequate security with respect to any credit
card terminals, computer equipment or other equipment utilized
to submit Credit Transactions and is responsible for the
actions of all of CUSTOMER's employees, agents or other
persons who access such equipment. SERVICERS undertake no
responsibility to CUSTOMER to monitor or review Credit
Transactions submitted via CUSTOMER's account.
10. PRESENTMENT OF CREDIT TRANSACTIONS.
10.1 CUSTOMER shall electronically deliver to SERVICERS Transaction
Records for all Card transactions to be processed and settled
hereunder. All Transaction Records must be submitted within
applicable Association time frames (including any time frames
required for CUSTOMER to qualify for specified interchange
rates) but in no event later than the third banking day after
completing Card transactions (unless CUSTOMER is entitled to
any special extension of these deadlines).
10.2 If CUSTOMER utilizes a third party to transmit Transaction
Records to SERVICERS, then CUSTOMER is responsible to assure
that such third party properly transmits such Transaction
Records according to current specifications established by
SERVICERS.
11. SETTLEMENT OF CARD TRANSACTIONS.
11.1 SERVICERS will only be required to settle CUSTOMER's Card
transactions for Cards specified in the Schedules. SERVICERS
will initiate a transfer of the applicable settlement funds to
CUSTOMER after presentment of Transaction Records pursuant to
Section 10 by wire transfer, ACH transfer or other agreed upon
method of such applicable settlement funds to the Settlement
Account. Settlement by wire generally occurs on the following
banking day after SERVICERS process the applicable Card
transactions.
11.2 All settlements to CUSTOMER for VISA and MasterCard Card
transactions will be based upon gross sales, less Credit
Transactions, adjustments, applicable discount fees when due,
Chargebacks, and any other amounts then due from CUSTOMER to
SERVICERS.
11.3 All credits to CUSTOMER's Settlement Account or other payments
to CUSTOMER are provisional and are subject to, among other
things, SERVICERS' final audit, Chargebacks, fees and fines
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imposed by the Associations. CUSTOMER agrees that SERVICERS
may debit or credit CUSTOMER's Settlement Account for any
deficiencies, overages, fees and pending Chargebacks, or may
deduct such amounts from settlement due to CUSTOMER.
11.4 SERVICERS will not be liable for any delays in receipt of
funds or errors in debit and credit entries caused by third
parties including but not limited to any Association or
CUSTOMER's financial institution. In addition to any other
remedies available to SERVICERS under this Agreement, CUSTOMER
agrees that should any of the events set forth in Paragraph
19.3 occur and not be cured within any applicable cure period,
SERVICERS may, upon at least 24 hours' advance written notice,
change processing or payment terms to suspend credits or other
payments of any and all funds, money and amounts now due or
hereafter to become due to CUSTOMER from SERVICERS pursuant to
the terms of this Agreement, until SERVICERS have had
reasonable opportunity to investigate and discuss such event
with CUSTOMER. In cases of fraud or similar cause, no prior
notice shall be required, but SERVICERS shall notify CUSTOMER
in writing within three business days after effectuating a
suspension of credits or other payments, which notice shall
state SERVICERS' reason for the belief that such fraud or
similar cause exists.
12. FEES; ADJUSTMENTS; COLLECTION OF AMOUNTS DUE.
12.1 SERVICERS shall charge CUSTOMER a fee for the Services, which
shall be calculated and payable pursuant to the Schedules and
any additional pricing supplements. Any fees expressed as a
percentage of CUSTOMER's Card transactions shall be calculated
based on the gross amount of such transactions. CUSTOMER
acknowledges that the fees stated herein are based upon the
qualification of CUSTOMER's transactions for certain reduced
interchange fees as set by the applicable Association. If
CUSTOMER's Card transactions fail to qualify for the reduced
interchange fees, SERVICERS shall process such Card
transactions at the applicable interchange fees as set by the
applicable Association.
12.2 The fees for SERVICERS set forth in the Schedules and any
additional pricing supplement, and based upon assumptions
associated with the anticipated annual volume, average
transaction size and CUSTOMER's method of doing business. If
during any six month period the actual volume or average
transaction size are 20% less than expected or if CUSTOMER
significantly alters its method of doing business, SERVICERS
may adjust CUSTOMER's discount fee and transaction fees.
12.3 The fees for Services may be adjusted to reflect increases by
Associations in interchange, assessments or other Association
fees or to pass through increases charged by third parties for
on-line communications and similar items. SERVICERS shall
notify CUSTOMER of all such adjustments. All such adjustments
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shall be CUSTOMER's responsibility to pay and shall become
effective upon the date any such change is implemented by the
applicable Association or other third party.
12.4 In addition to the regular Chargeback fees, set forth on the
Schedules, CUSTOMER agrees to pay SERVICERS any fines imposed
on SERVICERS by any Association, resulting from Chargebacks
and any other fees or fines imposed by an Association with
respect to acts or omissions of CUSTOMER.
12.5 If CUSTOMER's Chargeback Percentage for any line of business
exceeds an Association's industry chargeback percentage,
CUSTOMER shall, in addition to the regular Chargeback fees due
to SERVICERS and any applicable Chargeback handling fees or
fines imposed by the applicable Association, pay SERVICERS the
excessive Chargeback fee shown on the Schedules for all
Chargebacks occurring in such month in such line(s) of
business. Each industry chargeback percentage is subject to
change from time to time by the Associations.
12.6 If CUSTOMER believes any adjustments should be made with
respect to CUSTOMER's Settlement Account for any amounts due
to or due from SERVICERS, CUSTOMER must notify SERVICERS in
writing within 45 days after any debit or credit is or should
have been effected. If CUSTOMER notifies SERVICERS after such
time period, SERVICERS may, in their discretion, assist
CUSTOMER, at CUSTOMER's expense, in investigating whether any
adjustments are appropriate and whether any amounts are due to
or from other parties, but SERVICERS shall not have any
obligation to investigate or effect any such adjustments.
13. CHARGEBACKS.
CUSTOMER shall be responsible for all Chargeback and associated amounts
related to Card transactions settled by SERVICERS when Associations
Rules provide for a Chargeback.
14. REPRESENTATIONS; WARRANTIES; LIMITATIONS ON LIABILITY; EXCLUSION OF
CONSEQUENTIAL DAMAGES.
14.1 Without limiting any other warranties hereunder, CUSTOMER
represents and warrants as to each Card transaction submitted
by CUSTOMER under this Agreement that:
(i) the Card transaction represents a bona fide
sale/rental of merchandise or services not previously
submitted;
(ii) the Card transaction represents an obligation of the
Cardholder for the amount of the Card transaction;
(iii) the amount charged for the Card transaction is not
subject to any dispute, setoff, or counterclaim;
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(iv) the Card transaction amount is only for the
merchandise or services (including taxes, but without
any surcharge) sold or rented and, except for any
delayed delivery or advance deposit Card transactions
expressly authorized by this Agreement, the
merchandise or service was actually delivered to or
performed for the person entering into the Card
transaction simultaneously upon CUSTOMER's accepting
and submitting the Card transaction for processing;
(v) the Card transaction does not represent the
refinancing of an existing obligation that has been
deemed uncollectible or collection of a dishonored
check;
(vi) CUSTOMER has no knowledge or notice of any fact,
circumstances or defense which would indicate that
the Card transaction was fraudulent or not authorized
by the Cardholder or which would otherwise impair the
validity or collectibility of the Cardholder's
obligation arising from such Card transaction or
relieve the Cardholder from liability with respect
thereto;
(vii) any Credit Transaction submitted to SERVICERS
represents a refund or adjustment to a Card
transaction previously submitted;
(viii) the Card transaction is not related in any respect to
any gambling or gambling related activity or
transactions;
(ix) the Card transaction submitted to SERVICERS was
entered into by CUSTOMER and the Cardholder; and
(x) the Card transaction was made in accordance with the
terms of this Agreement, Association Rules and the
Operating Guide.
14.2 THIS AGREEMENT IS A SERVICE AGREEMENT, AND EXCEPT AS EXPRESSLY
PROVIDED IN THIS AGREEMENT, SERVICERS DISCLAIM ALL OTHER
REPRESENTATIONS OR WARRANTEES, EXPRESS OR IMPLIED, MADE TO
CUSTOMER OR ANY OTHER PERSON, INCLUDING WITHOUT LIMITATION,
ANY WARRANTIES REGARDING QUALITY, SUITABILITY,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE
(REGARDLESS OF ANY COURSE OF DEALING, CUSTOM OR USAGE OF
TRADE) OF ANY SERVICES OR ANY GOODS PROVIDED INCIDENTAL TO THE
SERVICES PROVIDED UNDER THIS AGREEMENT.
14.3 NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN
NO EVENT SHALL ANY PARTY, THEIR RESPECTIVE AFFILIATES OR ANY
OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR
SUBCONTRACTORS, BE LIABLE UNDER ANY THEORY OF TORT, CONTRACT,
STRICT LIABILITY OR OTHER LEGAL THEORY FOR LOST PROFITS, LOST
REVENUES, LOST BUSINESS OPPORTUNITIES, EXEMPLARY, PUNITIVE,
SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, EACH
OF WHICH IS HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES,
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REGARDLESS OF WHETHER SUCH DAMAGES WERE FORESEEABLE OR WHETHER
ANY PARTY OR ANY ENTITY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES.
14.4 NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY,
SERVICERS' CUMULATIVE LIABILITY FOR ALL LOSSES, CLAIMS, SUITS,
CONTROVERSIES, BREACHES, OR DAMAGES FOR ANY CAUSE WHATSOEVER
(INCLUDING, BUT NOT LIMITED TO, THOSE ARISING OUT OF OR
RELATED TO THIS AGREEMENT) AND REGARDLESS OF THE FORM OF
ACTION OR LEGAL THEORY SHALL NOT EXCEED: (I) $500,000; OR (II)
THE AMOUNT OF FEES RECEIVED BY SERVICERS PURSUANT TO THE
AGREEMENT FOR SERVICES PERFORMED IN THE IMMEDIATELY PRECEDING
12 MONTHS, WHICHEVER IS GREATER.
15. RETENTION OF RECORDS.
15.1 CUSTOMER shall retain legible copies of Transaction Records
and Credit Transaction vouchers for a period of at least
eighteen (18) months from the date of each such transaction.
15.2 Unless the Schedules provide that SERVICERS are responsible
for retaining records of CUSTOMER's Card transaction data AND
CUSTOMER has actually delivered to SERVICERS the applicable
Card transaction data containing all required information in
legible and suitable form for imaging or electronic capture
and storage (as applicable), CUSTOMER shall be responsible for
the retrieval of all Transaction Records and Credit
Transactions requested by SERVICERS in accordance with the
terms of this Agreement.
16. CASH PAYMENTS BY AND CASH DISBURSEMENTS TO CARDHOLDERS.
CUSTOMER shall not accept any direct payments from Cardholders for
charges of merchandise or services which have been included on a
Transaction Record, it being the right of the Card issuing bank to
receive such payments. Taxes on Card transactions must be included in
the amount charged and may not be collected by CUSTOMER in cash.
CUSTOMER shall not make any cash disbursements to a Cardholder as part
of a Card transaction except to the extent expressly authorized by the
Schedules or Association Rules.
17. CONFIDENTIALITY.
17.1 Unless CUSTOMER obtains consents from each applicable
Association, SERVICERS, Card issuing bank and Cardholder,
CUSTOMER shall not disclose, sell or disseminate any
information obtained solely as a result of Cardholder's use of
Cards to purchase goods or services from CUSTOMER (including
the names, addresses and Card account numbers of Cardholders)
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except for purposes of authorizing, completing and settling
Card transactions and resolving any chargebacks, retrieval
requests or similar issues involving Card transactions, other
than pursuant to a court or governmental agency request,
subpoena or order. CUSTOMER shall use proper controls for and
shall limit access to, and shall render unreadable prior to
discarding, all records containing Cardholder account numbers
and Card imprints.
17.2 CUSTOMER acknowledges that it obtains no ownership rights in
any information relating to and derived from Card
transactions. Cardholder account numbers, personal information
and other Card transaction information, including any
databases containing such information, may not be sold or
disclosed to a third party as an asset upon a bankruptcy,
insolvency or failure of CUSTOMER's business. Upon a
bankruptcy, insolvency or failure of CUSTOMER's business all
Card transaction information must be returned to SERVICERS or
acceptable proof of the destruction of all Card transaction
information must be provided to SERVICERS.
17.3 For the sake of clarification, nothing in this Section 17
shall restrict CUSTOMER's use of information gathered in the
normal course of CUSTOMER's business (excluding Card account
numbers).
17.4 SERVICERS agree not to use name, trademarks, service marks,
trade names or logos of CUSTOMER in any press release or
marketing publication or advertisement without CUSTOMER's
prior written consent.
18. ASSIGNMENT.
18.1 Any transfer or assignment of this Agreement by CUSTOMER, by
operation of law or otherwise, is voidable by SERVICERS
without SERVICERS' prior written consent, which consent shall
not be unreasonably withheld. In the event of such transfer or
assignment, the party to whom the Agreement was transferred or
assigned shall be bound to the terms and conditions of this
Agreement to the same extent as if SERVICERS and such assignee
or transferee, as the case may be, entered into an agreement
identical to this Agreement on the effective date of such
transfer or assignment. Furthermore, CUSTOMER shall indemnify
and hold SERVICERS harmless from all liabilities, Chargebacks,
expenses, costs, fees and fines arising in connection with
such transferees or assignees, as the case may be, submission
of Card transactions to SERVICERS for processing. For purposes
of this Agreement, any transfer of voting control of CUSTOMER
or its parents shall be considered an assignment or transfer
hereof.
18.2 Upon notice to CUSTOMER, another VISA and MasterCard member
may be substituted for BANK under whose sponsorship this
Agreement is performed and for whom CMS is acting as agent
hereunder. Upon substitution, such other VISA and MasterCard
member shall be responsible for all obligations required of
BANK, including without limitation, full responsibility for
its bankcard program and such other obligations as may be
expressly required by applicable Association Rules. Subject to
Association Rules, SERVICERS may assign or transfer this
Agreement and their rights and obligations hereunder and may
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delegate their duties hereunder, in whole or in part, to any
third party, whether in connection with a change in
sponsorship, as set forth in the preceding sentence, or
otherwise, without notice to or consent of CUSTOMER.
18.3 Except as provided in the following sentence, this Agreement
shall be binding upon successors and assigns and shall inure
to the benefit of the parties and their respective permitted
successors and assigns. No assignee for the benefit of
creditors, custodian, receiver, trustee in bankruptcy, debtor
in possession, sheriff or any other officer of a court, or
other person charged with taking custody of a party's assets
or business, shall have any right to continue or to assume or
to assign this Agreement.
19. TERM; EVENTS OF DEFAULT.
19.1 This Agreement and the applicable Schedules shall become
effective upon the date this Agreement and the applicable
Schedules are signed by BANK, which shall in all instances be
on or after the date(s) CUSTOMER and CMS sign this Agreement
and the applicable Schedules and CUSTOMER will be advised of
the effective date by SERVICERS.
19.2 The initial term of this Agreement shall commence and shall
continue in force for five (5) years after it becomes
effective. This Agreement shall renew for successive one-year
periods unless a party terminates this Agreement by notice to
all other parties, in writing, at least 90 days prior to the
expiration of the term or renewal term, as the case may be.
19.3 If any of the following events shall occur (each an "Event of
Default"):
(i) a material adverse change in the business, financial
condition, business procedures, products or services
of CUSTOMER; or
(ii) any assignment in violation of Section 18 of this
Agreement; or
(iii) a sale of all or a substantial portion of CUSTOMER's
assets; or
(iv) fraudulent or suspected fraudulent Card sales by
CUSTOMER, excessive Chargebacks (in excess of 1.0% of
dollar or transaction volume); or
(v) any representation or warranty in this Agreement is
breached in any material respect or was or is
incorrect in any material respect when made or deemed
to be made; or
(vi) the default in any material respect in the
performance or observance of any term, covenant,
condition or agreement contained in this Agreement,
including, without limitation, the establishment or
maintenance of funds in a Reserve Account, as
detailed in Paragraph 20;
(vii) CUSTOMER shall default in any material respect in the
performance or observance of any term, covenant or
condition contained in any agreement with any
affiliate of SERVICERS, including, but not limited
to, any agreement governing check guarantee or check
verification services; or
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(viii) a case or other proceeding shall be commenced by or
against CUSTOMER or SERVICERS, in any court of
competent jurisdiction seeking relief under the
Bankruptcy Code or under any other laws, domestic or
foreign, relating to bankruptcy, insolvency, winding
up or adjustments of debts, the appointment of a
trustee, receiver, custodian, liquidator or the like
or CUSTOMER or SERVICERS, or of all or any
substantial part of the assets, domestic or foreign,
of CUSTOMER or SERVICERS, and such case or proceeding
shall continue undismissed or unstayed for a period
of 60 consecutive days, or an order granting the
relief requested in such case or proceeding against
CUSTOMER or SERVICERS (including, but not limited to,
an order for relief under the Bankruptcy Code) shall
be entered; or
(ix) the independent certified accountants retained by
CUSTOMER shall refuse to deliver an unqualified
opinion with respect to the annual financial
statements of CUSTOMER and its consolidated
subsidiaries; or
(x) CUSTOMER shall indicate that any association endorses
its products or Services;
then upon the occurrence of (i) an Event of Default specified
in subparagraphs (iv) or (viii) above, the non-defaulting
party may consider this Agreement to be terminated
immediately, without notice, and all amounts payable hereunder
by CUSTOMER to SERVICERS shall be immediately due and payable
in full without demand or other notice of any kind, all of
which are expressly waived by CUSTOMER, and (2) an Event of
default specified in subparagraphs (v) or (vi) above, this
Agreement may be terminated by the non-defaulting party by
giving not less than 30 days' notice and cure period to the
other parties, and upon such notice and failure to cure, all
amounts payable hereunder by CUSTOMER or SERVICERS shall be
due and payable on demand 2) any other Event of Default, this
Agreement may be terminated by the non-defaulting party by
giving not less than 10 days' notice and cure period to the
other parties, and upon such notice and failure to cure, all
amounts payable hereunder by CUSTOMER to SERVICERS shall be
due and payable on demand.
19.4 If any Event of Default shall have occurred and be continuing,
the parties may, in their sole discretion, exercise all of
their rights and remedies under applicable law, including,
without limitation, SERVICERS' rights under Section 20.
19.5 This Agreement also may be terminated by SERVICERS prior to
the then-current expiration date upon at least 90 days'
advance written notice, if CUSTOMER's Card transactions fail
to conform to the average transaction size or the volume is
20% less than as set forth in the Schedules.
19.6 If this Agreement is terminated for cause (as "cause" is
defined by Association Rules), CUSTOMER acknowledges that
SERVICERS may be required to report CUSTOMER's business name
and the names and other identification of its principals to
the Combined Terminated Merchant File maintained by VISA and
MasterCard. CUSTOMER expressly agrees and consents to such
reporting in the event CUSTOMER is terminated for any reason
12
specified as cause by VISA or MasterCard. Furthermore,
CUSTOMER agrees to waive and hold SERVICERS harmless from and
against, any and all claims which CUSTOMER may have as a
result of such reporting.
19.7 The provisions governing processing and settlement of Card
transactions, all related adjustments, frees and other amounts
due from CUSTOMER and the resolution of any related
chargebacks, disputes or other issues involving Card
transactions will continue to apply even after termination of
this Agreement, until all Card transactions made prior to such
termination are settled or resolved.
19.8 After termination of this Agreement for any reason whatsoever,
CUSTOMER shall continue to bear total responsibility for all
Chargebacks, fees, credits and adjustments resulting from Card
transactions processed pursuant to this Agreement and all
other amounts then due or which thereafter may become due to
SERVICERS under this Agreement or which may be due to
SERVICERS before or after such termination to either SERVICERS
or any of SERVICERS' affiliates for any related equipment or
related services.
20. RESERVE ACCOUNT; SECURITY INTEREST.
20.1 CUSTOMER expressly authorizes SERVICERS to establish a Reserve
Account pursuant to the terms and conditions set forth in this
Section 20. The initial amount of the Reserve Account will be
generated as follows:
CUSTOMER shall provide SERVICERS with a $100,000,000 letter of
credit in form, substance and issued by a financial
institution or institutions acceptable to SERVICERS
("Collateral Letter of Credit") prior to the initial
submission of Card transactions for processing. The financial
institutions issuing the Collateral Letter(s) of Credit musts
have ratings of no less than A3 and A- as assigned by Xxxxx'x
and S&P respectively and the amount of the letter(s) of credit
may not represent more than 10% of the issuing institution's
capital base. Beginning 30 days after the submission of the
first Card transactions of processing, SERVICERS will begin
retaining 50% of the proceeds related to all Card transactions
until the total value of the Reserve Account, including the
Collateral Letter of Credit equals $125,000,000. The total
amount maintained in the Reserve Account (Collateral Letter of
Credit and cash inclusive) will then be adjusted on a monthly
basis to equal the greater of:
(a) 100% of the Unfulfilled Ticket Liability
("UTL") as of the most recent monthly
reporting period;
(b) the UTL projected for the end of the current
calendar month; or
(c) SERVICERS' reasonable estimate of UTL if
CUSTOMER has not provided SERVICERS with any
of the UTL reports outlined in 21.1(b) or
(c), or if SERVICERS reasonably believe that
13
the information in the report does not
accurately reflect the amount of SERVICERS'
potential advance ticket liability.
Increases in the Reserve Account may be generated (at
CUSTOMER's option) via:
(i) the submission of cash by CUSTOMER to
SERVICERS or
(ii) the provision of additional letters of
credit, up to a maximum of 90% of the total
amount of the required Reserve Account (all
letters of credit are subject to the same
requirements as the Collateral Letter of
Credit); or
(iii) the retention by SERVICERS of the proceeds
from Card transactions.
Increases in the Reserve Account as described in clauses (i)
or (ii) above must be provided within three (3) days following
notice from SERVICERS to CUSTOMER. SERVICERS may effect an
increase in the Reserve Account in the manner described in
clause (iii) above if SERVICERS have not otherwise received
all amounts which are to be deposited in the Reserve Account
within such three (3) day notice period and will be effected
through the retention of 100% of proceeds of Card transactions
and shall continue until the Reserve Account or any shortfall
is fully funded.
On a monthly basis, calculations will be made as outlined
above and corresponding adjustments (increases or decreases),
if necessary, will be made to the Reserve Account in the form
and timeframes outlined above. Any increases or reductions in
the Reserve Account balance shall be rounded to the nearest
$100,000. In the case that a decrease in the Reserve Account
is warranted, SERVICERS will return any appropriate moneys
maintained in the Reserve Account to CUSTOMER by the 10th day
of the month or within 5 days of SERVICERS' receipt of the UTL
reports referenced in subsection 21.1(b) and (c) of this
Agreement.
Notwithstanding the foregoing, the minimum Reserve Account
requirement will be $125,000,000.
Notwithstanding anything to the contrary in this Agreement,
SERVICERS will perform ongoing assessments of the financial
institution(s) which has (have) issued any of the letter(s) of
credit offered as collateral. If SERVICERS, in their sole
discretion, feel that any of the issuing institutions is no
longer acceptable, SERVICERS may require that the letter of
credit issued by that institution be replaced in whole or in
part with a letter of credit issued by a financial institution
acceptable to SERVICERS or be replaced in whole or in part
with cash collateral.
20.2 Notwithstanding anything outlined in Section 20.1 of this
Agreement, SERVICERS may, in their discretion, adjust the
amount required to be maintained in the Reserve Account and
14
how said amounts are generated or calculated. Any decision to
alter the amount of the Reserve Account will be based upon (a)
CUSTOMER's processing history and any changes to the
anticipated risk of loss to SERVICERS or (b) any changes to
CUSTOMER's financial condition, sales practices, Card
processing history or fulfillment practices. Any increase to
the amount of the Reserve Account from that which is outlined
in Section 20.1 shall be fully funded upon three days notice
to CUSTOMER, or in instances of fraud or an Event of Default,
reserve account funding may be immediate. Such Reserve Account
may be funded by all or any combination of the following: (i)
one or more debits to CUSTOMER's Settlement Account or any
other accounts held by BANK or any of its affiliates; (ii) one
or more deductions or offsets to any payments otherwise due to
CUSTOMER; (iii) CUSTOMER's delivery to SERVICERS of a letter
of credit; or (iv) if SERVICERS so agree, CUSTOMER's pledge to
SERVICERS of a freely transferable and negotiable certificate
of deposit. Any such letter of credit or certificate of
deposit shall be issued or established by a financial
institution acceptable to SERVICERS and shall be in a form
satisfactory to SERVICERS. In the event of termination of this
Agreement by either CUSTOMER or SERVICERS, an immediate
Reserve Account may be established without notice in the
manner provided above. Any Reserve Account will be held by
BANK for the greater of ten months after termination of this
Agreement or for such longer period of time as its consistent
with BANK's liability for Card transactions in accordance with
Association Rules. CUSTOMER's funds held in a reserve account
may be held in a commingled Reserve Account for the reserve
funds of BANK's customers, without involvement by an
independent escrow agent. Any cash balances maintained in the
Reserve Account will yield interest at the Federal Funds rate,
as stated from time to time in the Wall Street Journal, less
1.0%.
20.3 If CUSTOMER's funds in the Reserve Account are not sufficient
to cover the Chargebacks, adjustments, fees and other charges
due from CUSTOMER, or if the funds in the Reserve Account have
been released, CUSTOMER agrees to promptly pay SERVICERS such
sums upon request. In the event of a failure by CUSTOMER to
fund the Reserve Account, SERVICERS may fund such Reserve
Account in the manner set forth in subsection 20.2, above.
20.4 To secure CUSTOMER's obligations to SERVICERS and their
affiliates under this Agreement and any other agreement for
the provision of related equipment or related services,
CUSTOMER grants to SERVICERS a lien and security interest in
and to any of CUSTOMER's funds pertaining to the Card
transactions contemplated by this Agreement which may be in
the possession of SERVICERS. Any such funds, money or amounts
may be commingled with other funds of SERVICERS, or, in the
case of any funds held pursuant to the foregoing paragraphs,
with any other funds of other customers of SERVICERS. In
addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such
rights, SERVICERS are hereby authorized by CUSTOMER at any
time and from time to time, without notice or demand to
CUSTOMER or to any other person (any such notice and demand
being hereby expressly waived), to set off, recoup and to
appropriate and to apply any and all such funds against and on
15
account of CUSTOMER's obligations to SERVICERS and their
affiliates under this Agreement and any other agreement with
SERVICERS or any of SERVICERS' affiliates for any related
equipment or related services (including any check guarantee
and check verification services), whether such obligations are
liquidated, unliquidated, fixed, contingent, matured or
unmatured. CUSTOMER agrees to duly execute and deliver to
SERVICERS such instruments and documents as SERVICERS may
reasonably request to perfect and confirm the lien, security
interest, right of set off, recoupment and subordination set
forth in this Agreement.
20.5 (a) In the event that CUSTOMER feels that it has recognized a
material improvement in its credit profile, CUSTOMER may
request that SERVICERS review the Reserve Account for
consideration of a reduction in the required balance. The
determination as to whether to reduce the required reserve
balance will be made in SERVICERS' sole discretion and
SERVICERS will be under no obligation to make any such
reduction. If, following review, SERVICERS decide not to
reduce the required balance of the Reserve Account, CUSTOMER
may terminate this Agreement with 90 days' written notice to
SERVICERS. Such notice of termination, however, shall not
relieve CUSTOMER of any of its obligations under this
Agreement including, but not limited to, the funding of any
additional reserve balances required by SERVICERS.
(b) Notwithstanding any terms or obligations herein, if any
third party bank or entity offers to provide comparable
authorization, processing and settlement services to CUSTOMER
during the term of this Agreement and such offer includes a
provision relating to the collateral and reserve requirements
which is materially favorable (a reduction of 20% or more) to
that of SERVICERS at that point in time, CUSTOMER shall have
the right to provide evidence of such collateral terms to
SERVICERS and to terminate this Agreement upon at 90 days
written notice to SERVICERS. Notwithstanding the foregoing,
upon receipt of any such notice from CUSTOMER and in lieu of
termination of this Agreement, SERVICERS may elect to amend
the terms of this Agreement and provide CUSTOMER with the more
favorable reserve requirements. If SERVICERS do, indeed, elect
to take such action, this Agreement will remain in force. In
the event SERVICERS elect not to amend the terms of this
Agreement, this Agreement will affectively terminate 90 days
following SERVICERS' receipt of the original notice of
termination. Such termination, however, shall not relieve
CUSTOMER of any of its obligations under this Agreement
including, but not limited to, the funding of any additional
reserve balances required by SERVICERS.
Notwithstanding any of the foregoing in this Section 20.3,
CUSTOMER may exercise its rights under subsections 20.3(a) and
20.3(b) no more frequently than once in any twelve month
period.
16
21. FINANCIAL AND OTHER INFORMATION.
21.1 CUSTOMER agrees to provide SERVICERS with the following:
(a) monthly financial statements of CUSTOMER within 30 days of
the end of each month, quarterly financial statements of
CUSTOMER within 45 days after the end of each fiscal quarter
and annual audited financial statements within 90 days after
the end of each fiscal year. Such financial statements shall
be prepared in accordance with generally accepted accounting
principles.
(b) on a monthly basis within 3 (three) business days
following the conclusion of each month, a written
quantification of the then current outstanding UTL, certified
by CUSTOMER's CFO and in form satisfactory to SERVICERS
(c) on a monthly basis within 3 (three) business days
following the conclusion of each month, projections, broken
down by month, of UTL for the following 12 month period
(d) an annual cash flow, P&L (income statement) and balance
sheet forecast broken down by month
(e) such other financial information that SERVICERS may
reasonably request.
CUSTOMER also shall provide such other information concerning
the nature and methods of CUSTOMER's business and CUSTOMER's
compliance with the terms and provisions of this Agreement as
SERVICERS may reasonably request. CUSTOMER authorizes
SERVICERS to obtain from third parties financial and credit
information relating to CUSTOMER in connection with SERVICERS'
determination whether to execute this Agreement and SERVICERS'
continuing evaluation of the financial and credit status of
CUSTOMER . Upon request, CUSTOMER shall provide to SERVICERS
or their representatives reasonable access to CUSTOMER's
facilities and records for the purpose of performing any
inspection and/or copying of CUSTOMER's books and/or related
to Card transactions processed pursuant to this Agreement.
21.2 CUSTOMER will provide SERVICERS with written notice of
CUSTOMER's intent to liquidate, substantially change the basic
nature of its business, transfer or sell any substantial part
(25% or more in value) of its total assets, or if CUSTOMER or
its parent is not a corporation whose shares are listed on a
national securities exchange or on the over-the-counter
market, change the control or ownership of CUSTOMER or its
parent, 30 days prior to such liquidation, change, transfer or
sale taking place. CUSTOMER will also notify SERVICERS of any
judgment, writ, warrant of attachment, execution or levy
against any substantial part (25% or more in value) of
CUSTOMER's total assets not later than three days after
CUSTOMER obtains knowledge of any such judgment, writ, warrant
of attachment, execution or levy.
17
22. INDEMNIFICATION.
22.1 Subject to the limitations set forth in Section 14 of this
Agreement, CUSTOMER agrees to indemnify and hold harmless
SERVICERS from and against all losses, liabilities, damages
and expenses resulting from any breach of any warranty,
covenant or agreement or any misrepresentation by CUSTOMER
under this Agreement, or arising out of any gross negligence
or willful misconduct of CUSTOMER or its employees, in
connection with CUSTOMER's Card transactions or otherwise
arising from CUSTOMER's provision of goods and services to
Cardholders.
22.2 Subject to the limitations set forth in Section 14 of this
Agreement, SERVICERS agree to indemnify and hold harmless
CUSTOMER from and against all losses, liabilities, damages and
expenses resulting from any breach of any warranty, covenant
or agreement or any misrepresentations by SERVICERS under this
Agreement or arising out of the gross negligence or willful
misconduct of SERVICERS or their employees in connection with
this Agreement.
23. LIQUIDATED DAMAGES.
23.1 The parties further agree and acknowledges that, in addition
to any remedies contained herein or otherwise available under
applicable law and, notwithstanding anything to the contrary
elsewhere in this Agreement, if (a) CUSTOMER breaches this
Agreement by improperly terminating it prior to the expiration
of the applicable term of the Agreement, or (b) this Agreement
is terminated prior to the expiration of the applicable term
of the Agreement in accordance with, and due to, an Event of
Default by CUSTOMER specified in subsection 19.3 (ii) - (vii)
and (x), then SERVICERS will suffer a substantial injury that
is difficult or impossible to accurate estimate. Accordingly
in an effort to liquidate in advance the sum that should
represent the damages which would actually be sustained by
SERVICERS as the result of such a termination, the parties
have agreed that the amount calculated in the manner specified
below is a reasonable pre-estimate of SERVICERS' probable
loss, which shall be paid to SERVICERS as liquidated damages
in the event of any such termination. Any recovery pursuant to
this Section 23 shall in no way limit SERVICERS' right to
receive any payments due from CUSTOMER pursuant to Section 13.
Such liquidated damages shall be paid to SERVICERS within 15
days after CUSTOMER's receipt of SERVICERS' calculation of the
amount due. The liquidated damages amount shall equal 80% of
the product of (i) the average net monthly fees, as determined
in accordance with subsection 23.2, and (ii) the number of
months, including any pro rata portion of a month, then
remaining in the initial term or any renewal term, as
applicable.
23.2 The average net monthly fees shall equal one-twelfth of the
gross fees payable pursuant to the Schedules, less applicable
interchange fees and assessments due pursuant to this
Agreement, during the 12 months immediately preceding the date
18
on which (i) SERVICERS receive notice from CUSTOMER of its
intention to terminate this Agreement early, or (ii) SERVICERS
learn of CUSTOMER's early termination in violation of this
Agreement, or (iii) this Agreement is terminated early
pursuant to subsection 19.3 (whichever produces the higher
amount); provided, however, if the Agreement has been in place
less than 12 months, the estimated average net monthly fees
shall equal the aggregate gross fees paid hereunder by
CUSTOMER , divided by the number of months the Agreement was
effective.
24. MISCELLANEOUS.
24.1 No party shall be liable for any default or delay in the
performance of its obligations under this Agreement if and to
the extent such default or delay is caused, directly or
indirectly, by (i) fire, flood, elements of nature or other
acts of God; (ii) any outbreak or escalation of hostilities,
war, riots or civil disorders in any country; (iii) any act or
omission of the other party or any government authority; (iv)
any labor disputes (whether or not employees' demands are
reasonable or within the party's power to satisfy); or (v) the
nonperformance by a third party for any similar cause beyond
the reasonable control of such party, including without
limitation, failures or fluctuations in telecommunications or
other equipment. In any such event, the non-performing party
shall be excused from any further performance and observance
of the obligations so affected only for as long as such
circumstances prevail and such party continues to use
commercially reasonable efforts to recommence performance or
observance as soon as practicable.
24.2 This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (without
regard to its choice of law provisions). In performing its
obligations under this Agreement, each party agrees to comply
with all laws and regulations applicable to it. SERVICERS AND
CUSTOMER IRREVOCABLY WAIVE ANY AND ALL RIGHTS THEY MAY HAVE TO
A TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING ANY CLAIM
RELATING TO OR ARISING UNDER THIS AGREEMENT.
24.3 CUSTOMER shall be liable for any and all attorney's fees,
collection costs and other costs and expenses paid or incurred
by SERVICERS in the enforcement hereof, or in collecting any
amount due from CUSTOMER to SERVICERS hereunder or resulting
from any breach by CUSTOMER of any of the terms or conditions
of this Agreement.
24.4 Following receipt of any requests to perform or provide any
system enhancements, custom reports, or related service
enhancements that are different from or in addition to the
system, services and reports SERVICERS otherwise agree to
provide to CUSTOMER (collectively, "System Enhancements"), and
prior to providing the requested System Enhancements,
SERVICERS shall provide CUSTOMER with a description of the
System Enhancements to be made, together with an estimate of
19
SERVICERS' fee for providing such System Enhancements. If
CUSTOMER thereafter instructs SERVICERS to make such System
Enhancements, SERVICERS shall do so, and CUSTOMER shall pay
the additional fees charged by SERVICERS for such System
Enhancements.
24.5 Except as otherwise specifically provided, all notices and
other communications required or permitted hereunder (other
than those involving normal operational matters relating to
the processing of Card transactions) shall be in writing,
shall be sent by mail, courier, facsimile or email (facsimile
and email notices shall be confirmed in writing by courier),
if to CUSTOMER at its address appearing at the beginning on
this Agreement, and if to SERVICERS at 000 Xxxxx Xxxxxx Xxxx,
Xxxxxxxx, Xxx Xxxx 00000, Facsimile (000) 000-0000, Attention:
Executive Vice President Operations, with a copy to Attention:
General Counsel's Office at 0000 X.X. 000xx Xxxxxx, Xxxxx
Xxxxxxx, Xxxxxxx 00000, Facsimile: (000) 000-0000, and shall
be deemed to have been given (i) if sent by mail or courier,
when received and (ii) if sent by facsimile machine, when the
courier confirmation copy is actually received. Notice given
in any other manner shall be effective when actually received.
24.6 The headings contained in this Agreement are for convenience
of reference only and shall not in any way affect the meaning
or construction of any provision of this Agreement.
24.7 The parties intend every provision of this Agreement to be
severable. If any part of this Agreement is not enforceable,
the remaining provisions shall remain valid and enforceable.
If a court of competent jurisdiction determines that any term
or provision contained herein is illegal or invalid for any
reason, the illegality or invalidity shall not affect the
validity of the remainder of this Agreement. In such case, the
parties shall in good faith modify or substitute such
provision consistent with the original intent of the parties.
Without limiting the generality of this paragraph, if a court
determines that any remedy stated in this Agreement has failed
of its essential purpose, then all other provisions of this
Agreement, including the limitations on liability and
exclusion of damages, shall remain fully effective.
24.8 This agreement, along with any Schedules and the Operating
Guide, constitutes the entire agreement between the parties
with respect to the subject matter, supersedes any previous
agreements and understandings and, except as provided in other
Sections of this Agreement, the Schedules or the Operating
Guide, can be changed only by a written agreement signed by
all parties. A party's waiver of a breach of any term or
condition of this Agreement shall not be deemed a waiver of
any subsequent breach of the same or another term or
condition.
24.9 The parties acknowledge that the VISA and MasterCard
Association Rules give VISA and MasterCard certain rights to
require termination or modification of this Agreement with
respect to transactions involving VISA and MasterCard Cards
and the VISA and MasterCard Card system and to investigate
CUSTOMER. The parties also acknowledge that issuers of other
Cards, for which SERVICERS perform services on behalf of
CUSTOMER, may have similar rights under their applicable
Association Rules with respect to this Agreement's
applicability to transactions involving such other Cards.
20
The parties hereto have caused this Agreement to be executed by their
duly authorized officers. THIS AGREEMENT IS NOT BINDING UPON SERVICERS UNTIL
SIGNED BY SERVICERS.
NORWEGIAN CRUISE LINE LTD XX XXXXXX XXXXX BANK
----------------------------------------- ------------------------------------
(CUSTOMER) ("BANK")
By: /s/ LAMARR COOLER By: /s/ XXXXXX XXXXXX
-------------------------------------- ---------------------------------
Name: LAMARR COOLER Name: XXXXXX XXXXXX
---------------------------------- -----------------------------
(Please Print or Type) (Please Print or Type)
Title: EXECUTIVE VICE PRESIDENT Title: Credit Director, FDMS
--------------------------------- Attorney in Fact for
Chase Manhattan Bank
----------------------------
Date: MARCH 14, 2003 Date: 3/27/03
---------------------------------- -----------------------------
CHASE MERCHANT SERVICES L.L.C.
----------------------------------------- CERTIFIED TO BE A TRUE AND
("CMS") CORRECT COPY OF THE ORIGINAL [stamp]
[illegible signature]
By: /s/ XXXXXXXX XXXXXX ----------------------------
----------------------------------
Name: XXXXXXXX XXXXXX
----------------------------------
(Please Print or Type)
Title: CHIEF FINANCIAL OFFICER,
CHASE MERCHANT SERVICE, LLC
Date: 4/2/03
----------------------------------
21
ANNEX 1
The following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):
1.1 "ASSOCIATION" means any entity formed to administer and
promote Cards, including VISA and MasterCard, and any other
entity as specified on the Schedules to this Agreement.
1.2 "ASSOCIATION RULES" mean the rules, regulations, releases,
interpretations and other requirements (whether contractual or
otherwise) imposed or adopted by any Association.
1.3 "AUTHORIZATION" means the process by which CUSTOMER
electronically accesses SERVICERS' computerized system, unless
such system is inoperable or otherwise not accessible to
CUSTOMER, in which case CUSTOMER shall utilize the designated
toll-free telephone number, to obtain credit approval from the
Card issuing bank before completion of the Card transaction.
1.4 "BANKRUPTCY CODE" means title 11 of the United States Code, as
amended from time to time.
1.5 "BUSINESS DAY" means a day (other than Saturday or Sunday) on
which SERVICERS are generally open for business.
1.6 "CARD" means a valid credit card or valid off-line debit card
bearing the service xxxx of VISA or MasterCard and, to the
extent the Schedules so provide, a valid card issued by any
other Associations specified on such Schedules.
1.7 "CARDHOLDER" means the individual whose name is embossed on
the Card and any authorized user of such Card.
1.8 "CHARGEBACK" means the procedure by which a Transaction Record
or other indicia of a Card transaction (or disputed portion
thereof) is returned to Bank or the Card issuing bank, for
failing to comply with Association Rules, the liability of
which is the CUSTOMER's responsibility.
1.9 "CREDIT TRANSACTION" means the evidence of a refund or price
adjustment by CUSTOMER to a Cardholder's account in connection
with a prior purchase by such Cardholder using a Card,
regardless of whether the form of such evidence is in paper,
electronic or otherwise.
1.10 "CUSTOMER'S CHARGEBACK PERCENTAGE" means the actual monthly
percentage calculated by dividing CUSTOMER's total monthly
VISA and MasterCard Chargeback items in any line of business
by the number of CUSTOMER's total monthly VISA and MasterCard
transactions in such line of business.
1.11 "OPERATING GUIDE" means the then-current manual prepared by
SERVICERS, containing operational procedures, instructions and
other directives relating to Card transactions.
1.12 "PREAUTHORIZED ORDER" means a Cardholder's written
authorization to make one or more future charges to such
Cardholder's MasterCard Card account in connection with the
purchase of goods or services which are delivered or performed
periodically.
1.13 "RECURRING SALE" means a Cardholder's written authorization to
make one or more future charges to such Cardholder's VISA or
other non-MasterCard Card account in connection with the
purchase of goods or services which are delivered or performed
periodically.
1.14 "RESERVE ACCOUNT" means a fund established and managed by
SERVICERS to protect against actual or contingent liability
arising from Chargebacks, adjustments, fees and other charges
due to or incurred by SERVICERS.
1.15 "SCHEDULES" means the attachments, addenda and other
documents, including revisions thereto, which may be
incorporated into and made part of this Agreement.
1.16 "SERVICES" means the activities undertaken by SERVICERS to
authorize, process and settle all United States Dollar
denominated VISA and MasterCard Card transactions undertaken
by Cardholders at CUSTOMER's location(s) in the United States,
and all other activities necessary for SERVICERS to perform
the functions specified on the Schedules for all other Cards
covered by this Agreement.
1.17 "SETTLEMENT ACCOUNT" means an account at a financial
institution designated by CUSTOMER as the account to be
debited and credited by SERVICERS for Card transactions, fees,
Chargebacks and other amounts due hereunder or in connection
herewith (i.e., fines, penalties, attorneys' fees, etc.).
1.18 "TRANSACTION RECORD" means evidence of a purchase of goods or
services by a Cardholder from CUSTOMER using a Card,
regardless of whether the form of such evidence is in paper,
electronic or otherwise, all of which must conform to
Association Rules.
1.19 "UNFULFILLED TICKET LIABILITY" means, as of any date, the
value of any goods and/or services processed hereunder by
CUSTOMER with respect to VISA or MasterCard, as the case may
be, in advance of fulfillment.
1.20 "S&P" means Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc., or any successor thereto.
1.21 "MOODY'S" means Xxxxx'x Investor Services, Inc., or any
successor thereto.
2
SCHEDULE A
1. BANKCARD FEES:
a) The daily Bankcard processing fees and Interchange levels are
as follows:
RESERVATIONS: Visa CPS Hotel/Preferred -1.76%
MasterCard/TIPS -1.772%
ON-BOARD: Visa CPS Hotel/Preferred -1.729%
MasterCard/Merit 3 -1.54%
Pricing is based upon the following criteria:
Bankcard Volume Average Ticket
--------------- --------------
Reservations: $480,000,000 $1,058.00
On-Board: $183,000,000 $600.00
b) In addition to the Bankcard Processing Fee identified above,
each Visa and MasterCard transaction submitted by Customer
will be subject to the applicable Visa and MasterCard
interchange fees and assessments in effect: The interchange
fees, assessments and qualifying criteria set forth in
Attachment I annexed hereto may be changed from time to time
as mandated by the Associations. If any MasterCard or Visa
transaction(s) fail to qualify for the interchange levels
stated above in this Agreement, Customer will be billed for
the difference between the rate set forth and the higher rate,
plus an additional fee of .01% for said non-qualified
transactions.
2. FEES FOR SERVICES:
LEASED LINE: Servicers will provide a frame
connection from its data center to
Customer's data center. The one-time fee
and monthly line charges have not yet
been determined and will be paid by
Customer.
QUICK PRO SOFTWARE: $500.00 one time fee and $60.00 a year
software maintenance fee.
VOICE AUTHORIZATION: The following fees will be charged for
voice authorization services: VRU $.45
per authorization; Voice: $.75 per
authorization.
CHARGEBACK PROCESSING: An excessive Chargeback handling fee
will be charged in addition to any fee
or fine imposed by Visa or MasterCard.
In the event the Chargeback percentage
of sales exceeds .01% annually, Customer
will be charged a Chargeback Processing
Fee of $10.00 per Chargeback that
exceeds the .01% level.
The fee set forth in this Section 2 may be adjusted without notice to reflect
increases or decreases in applicable sale or telecommunication taxes as levied
by federal, state or local authorities.
3. ADDITIONAL SERVICES:
It is understood and agreed that Bank shall have no liability whatsoever
regarding the processing, authorization or any other service provided by CMS in
connection with cards bearing the servicemark of organizations other than the
Visa or MasterCard associations.
The additional services to be provided by CMS hereunder shall be in accordance
with the terms set forth in the Attachments annexed hereto:
Attachment I Interchange fees and criteria
Attachment II T&E Other Card Services
Attachment III Reservation Service
Attachment IV Advance Lodging/Resort Deposit
Attachment V Priorities/Express Checkout
4. PAYMENT PLAN
Payment Method is: Wire $5.00 per wire
All payments to Customer for purchases by CMS and Bank of valid Debt shall be by
Fedwire (bankwire) or through the Automated Clearing House (ACH) and shall
normally be electronically transmitted directly to the demand deposit account
indicated below, or any successor account designated to receive provisional
funding of Customer's Card sales pursuant to the Bankcard Agreement ("Settlement
Account"). Neither Bank or CMS can guarantee the timeliness with which any
payment may be credited by Customer's depository institution ("Depository").
Customer hereby authorizes Bank and CMS to access information from the
Settlement Account and to initiate credit and/or debt entries by Fedwire
(bankwire) or ACH transfer and to authorize Depository to block or to initiate,
if necessary, reversing entries and adjustments for any original entries made to
the Settlement Account and to authorize Depository to provide such access and to
credit and/or debit or to block the same to such account. This authorization is
without respect to the source of any funds in the Settlement Account, is
irrevocable and coupled with an interest. This authority extends to any
equipment rental or purchase agreements which may exist between CMS and Customer
2
as well as to any fees and assessments and Chargeback amounts of whatever kind
or nature due to CMS and Bank under the Bankcard Agreement. This authority is to
remain in full force and effect at all times unless and until CMS and Bank have
consented to its termination in such time and in such manner as to afford CMS
and Bank and Depository a reasonable opportunity to act on it. In addition,
Customer understands and agrees that CMS shall charge Customer ten dollars
($10.00) for each ACH which cannot be processed, and all subsequent funding may
be suspended until Customer either (i) notifies CMS that ACHs can be processed;
or (ii) a new Electronic Funding Agreement is signed by Customer. In order to
insure transactions are properly handled, a copy of a blank, voided check must
be attached. Customer's bank must be able to process or accept electronic
transfers either via ACH and/or Fedwire (bankwire) which transfers are processed
utilizing the Federal Reserve System.
-------------------------------------------------------------------------------
Name of bank Address of bank
-------------------------------------------------------------------------------
Demand deposit number ("Settlement Account") Transit/ABA number
NORWEGIAN CRUISE LINE LIMITED CHASE MERCHANT SERVICES, L.L.C. ("CMS")
("CUSTOMER")
By: /S/LAMARR COOLER By: /s/ XXXXXXXX XXXXXX
--------------------------------- ----------------------------------
Title: Executive Vice President Title: Chief Financial Officer
Date: March 14, 2003 Chase Merchant Service, LLC
Date: April 2, 2003
CHASE MANHATTAN BANK ("BANK")
By: /s/ XXXXXX XXXXXX
----------------------------------
Title: Credit Director, FDMS
Attorney in Fact for
Chase Manhattan Bank
Date: March 22, 2003
3
ATTACHMENT II TO SCHEDULE A
T&E - OTHER CARD SERVICES
This Attachment II to Schedule A supplements the Merchant Bankcard Agreement
(the "Agreement") to which it is attached and sets forth the terms applicable to
CMS' provision of the specified services for the Card transactions issued by the
entities set forth below:
OPTIONAL:
American Express [X] JCB [X]
Diners Club [X] Discover ("Novus") [X]
The Card issuing entities selected above are collectively referred to as
("Issuer") unless otherwise specified in this Attachment II.
1. FEES: AUTHORIZATION
-------------
(Per Transaction)
American Express $.05
Diners $.05
Discover $.05
JCB $.05
SETTLEMENT SERVICES
-------------------
(Per Transaction)
JCB 2.50% of face amount of transaction
Diners 2.75% of face amount of transaction
2. GENERAL: Customer understands and acknowledges that CMS' sole responsibility
with respect to ISSUER Card transactions shall be to provide the services
specified in this Attachment.
In the event Customer has a separate Issuer Agreement with a respective Issuer,
all Chargeback and financial obligations including but not limited to fees and
issues related thereto shall be governed by the terms of such Issuer Agreement.
Notwithstanding the foregoing, in the event CMS is providing settlement services
for Diners Club and/or JCB transactions, CMS shall be responsible for providing
such services pursuant to the terms of the Agreement. Customer shall comply with
all terms and conditions of the Issuer Agreement and the applicable rules,
regulations, interpretations and other requirements of the respective Issuer and
shall not seek authorization for or submit for processing or settlement
hereunder any Issuer Card transactions at anytime when Customer does not have in
effect a valid Issuer Agreement with such Issuer. Customer agrees to notify CMS
immediately upon the termination of any Issuer Agreement to which it is a party.
Upon such termination, CMS shall have no further obligations hereunder to
provide any services to Customer with respect to any transactions involving such
Issuer Cards.
In the event Customer does not have a separate Issuer Agreement with a
respective Issuer, the Issuer Card services to be provided hereunder shall be in
accordance with the terms of the Agreement and this Attachment.
3. ISSUER CONSENTS:
Customer shall be responsible for obtaining any operational consents required of
Issuer to comply with procedures or practices contemplated by both Customer and
CMS under this Agreement.
4. AUTHORIZATION SERVICES ONLY:
In the event CMS is providing authorization services for Issuer Card
transactions as specified herein, Customer shall seek such authorization from
CMS pursuant to the applicable Issuer Agreement or in the absence thereof, the
applicable section of the Agreement. Unless CMS is providing processing services
for Issuer Card transactions as specified in this Attachment, Customer shall be
responsible for processing and submitting directly to the applicable Issuer for
settlement of such Card transactions.
5. PROCESSING AND SUBMISSION TO ISSUERS:
In the event CMS is providing processing services for Issuer Card transactions
as specified herein, Customer shall submit to CMS for processing all of
Customer's Issuer Card transactions and CMS shall process such transactions and
transmit them electronically to the applicable Issuer with a summary of such
Card transactions.
1. SETTLEMENT SERVICES:
In the event CMS is providing settlement services for Diners Club and/or JCB
transactions as specified herein, all provisions of the Agreement shall apply to
Customer's Diners Club and/or JCB transactions. Following receipt of applicable
settlement funds from Diners Club and/or JCB, CMS will initiate a transfer of
settlement funds pursuant to the terms set forth in the Agreement and applicable
Schedules and/or Attachments.
(a) Diners Club. If settlement services are provided for Diners Club
("Diners") transactions:
i. Customer shall retain Diners sales drafts and Diners credit
vouchers for a period of at least 90 days from the date of the
Diners transaction, and Customer shall retain microfilm or
legible copies of Diners sales drafts and Diners credit
vouchers for a period of at least seven years following the
date of transaction.
ii. Customer shall not accept a Card embossed "for local use only"
outside the territory in which it was issued; and
iii. Customer shall not accept a co-branded Card unless Customer
has a specific contractual agreement authorizing Customer to
do so.
2
(b) JCB. If settlement services are provided by CMS for JCB
transactions:
I. Customer shall retain original JCB sales drafts and JCB credit
vouchers for a period of at least 120 days from the date of
the JCB Card transaction and Customer shall retain microfilm
or legible copies of JCB sales drafts and JCB credit vouchers
for a period of at least three years following the date of the
transaction.
II. For purposes of CMS' Chargeback liability with respect to JCB
transactions, an authorization obtained on a transaction does
not override any Chargeback reason which may apply to the
item.
III. If Customer processes JCB Card transaction data
electronically, Customer's account number must be included in
the JCB Card transaction data transmitted to CMS, in addition
to the other information required by the Agreement to be
included in each sales draft or credit voucher.
IV. The procedures and requirements contained in the applicable
Attachments if Customer is a lodging merchant and accepts JCB
Cards to reserve accommodations, subject to the right of JCB
Cardholders to cancel reservations at resort establishments
until 4:00 p.m. on the scheduled arrival date, notwithstanding
any earlier deadline established for Visa and MasterCard
Cardholders.
V. By contracting for JCB settlement services, Customer
authorizes JCB to publish its name, address and telephone
number in JCB solicitation materials.
CMS does not warrant or bear responsibility for the performance of any Issuer in
any way.
NORWEGIAN CRUISE LINE LIMITED CHASE MERCHANT SERVICES, L.L.C.
("CUSTOMER") ("CMS")
D/B/A:
By: /s/ Lamarr Cooler By: /s/ Xxxxxxxx Xxxxxx
----------------------------------- ------------------------------
Title: Executive Vice President Title: Chief Financial Officer
----------------------------------- Chase Manhattan Service LLC
---------------------------
Date: March 14, 2003 Date: 4/2/03
----------------------------------- ---------------------------
CHASE MANHATTAN BANK ("BANK")
By: /s/ Xxxxxx Xxxxxx
-----------------------------
Title: Credit Director, FDDS
Attorney in Fact for
Chase Manhattan Bank
--------------------------
Date: 3/27/03
---------------------------
3
US INTERCHANGE RATES
--------------------------------------- ------------------------------------------- ----------------------------------------------
TYPE MASTERCARD VISA
--------------------------------------- ------------------------------------------- ----------------------------------------------
CURRENT NEW CURRENT NEW
04/02 10/02 04/02 10/02
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
MERIT III 1.38% + $.10 1.38% + $.10 Credit 1.38% + $.05 Credit 1.37% + $.10
CPS/RETAIL Check/Electron Check/Electron
1.25% + $.10 1.25% + $.10
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
KEY ENTRY 1.80% + $.10 1.80% + $.10
CPS RETAIL 2 1.80% + $.10 1.80% + $.10
EMERGING MARKET 1.43% + $.05 1.43% + $.05
MCC ONLY
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
SERVICE INDUSTRY (SIIP) 1.15% + $.05 1.15% + $.05 N/A N/A
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
MERIT I 1.90% + $.10 1.90% + $.10 N/A N/A
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
CPS/HOTEL & CAR RENTAL N/A N/A 1.58% + $.10 1.58% + $.10
CARD PRESENT
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
TIPS 1.58% + $.10 1.58% + $.10 1.58% + $.10 1.58% + $.10
CPS/HOTEL & CAR RENTAL
CARD NOT PRESENT
CPS/PASSENGER TRANSPORT 1.70% + $.10(1) 1.70% + $.10 1.70 + $.05 1.70 + $.05
PASSENGER TRANSPORT
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
CPS/AUTOMATED FUEL N/A N/A 1.50% + $.05 1.50% + $.05
DISPENSERS
CONVENIENCE PURCHASE 1.80%(2) 1.80% N/A N/A
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
CPS/CARD NOT PRESENT N/A N/A 1.80% + $.10 1.80% + $.10
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
CPS/ACCOUNT FUNDING N/A N/A N/A 2.00% + $.10
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
CPS/ELECTRONIC COMMERCE N/A N/A N/A 1.80% + $.10
(BASIC)
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
CPS/ELECTRONIC COMMERCE N/A N/A N/A 1.80% + $.10
(PREFERRED)
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
WAREHOUSE 1.10% 1.10% N/A N/A
SUPERMARKET 1.15% 1.15% Credit 1.20% Credit 1.20%
Check/Electron = $.40 Check/Electron = $.40
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
EPS/QPS 1.90% + $.10 1.90% + $.10 2.00% + $.02 2.00% + $.02
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
ELECTRONIC INTERCHANGE N/A N/A 2.00% + $.10 2.00% + $.10
REIMBURSEMENT FEE (EIRF)
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
STANDARD 2.54% + $.10 2.54% + $.10 2.30% + $.10 2.30% + $.10
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
MC MERCHANT UCAF N/A 1.91% + $.10 N/A N/A
(US LOCATION)
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
MC FULL UCAF N/A 2.01% + $.10 N/A N/A
(US LOCATION)
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
SIGNATURE CD. ELECTRONIC N/A N/A 2.10% + $.10 2.10% + $.10
SIGNATURE CD. STANDARD 2.35% + $.10 2.35% + $.10
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
WORLD MASTER CARD T&F 2.20% + $.10 2.20% + $.10 N/A N/A
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
GSA PURCH. CD. LG. TICKET N/A N/A .95% + $35 .95% + $35
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
PURCH CARD COMMERCIAL N/A N/A .95% + $35 .95% + $35
EMERGING MARKET LARGE TICKET
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
CORPORATE FACE TO FACE 1.38 + $.10 1.38 + $.10 N/A N/A
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
CORPORATE DATA RATE I 2.35% + $.10 2.35% + $.10 N/A N/A
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
CORPORATE DATA RATE II 1.75% 1.75% N/A N/A
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
CORPORATE DATA RATE III 1.50% 1.50% N/A N/A
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
CORPORATE LARGE TICKET .85% + $40 .85% + $40 N/A N/A
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
CORPORATE T&E 1 2.30% 2.30% 2.10% + $.10 2.10% + $.10
CORPORATE T&E 2 2.05% + $.10 2.05% + $.10
CORPORATE ELECTRONIC
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
CORPORATE STANDARD 2.54% + $.10 2.54% + $.10 2.35% + $.10 2.30% + $.10
--------------------------------------- --------------------- --------------------- ----------------------- ----------------------
Note: Standard Interchange requires processing in 30 calendar days. Merit I,
EIRF, Data Rate I, II & III require processing in 3 days. Corporate
T&E requires processing in 9 days. All other Interchange levels require
processing in 2 days.
(1) Effective 4/9/00 for Airline and Passenger Railway
(2) Effective 6/9/00 for Fast Food, Convenience Stores, Petroleum and Movie
Theater MCCs
(3) Applies to GSA Purchase Cd 31 no. #72600-472699 and 648600-448699 only.
Transaction greater than US$5,000.
(4) Applies to Visa Business to Business MCC Merchants only.
[NORWEGIAN XXXXX LINE LOGO]
CONSENT TO ASSIGNMENT
March 26, 2004
JPMorgan Chase Bank
Chase Merchant Services, L.L.C.
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Executive Vice President Operations
RE: Consent to Assignment
To Whom It May Concern:
Reference is made to that certain Merchant Services Bankcard Agreement
dated April 2, 2003 ("Agreement") by and among Norwegian Cruise Line Limited
("Customer"), JPMorgan Chase Bank ("Bank") and Chase Merchant Services L.L.C.
("CMS").
Please be advised that starting in late 2003, Customer undertook a
reorganization of the Norwegian Cruise Line and Orient Lines business within the
Star Cruises Group, which we refer to as the "Reorganization". The
Reorganization entailed certain corporate changes including the incorporation of
NCL Corporation, Ltd. ("NCLC") in December 2003, a wholly owned subsidiary of
Star Cruises Limited. NCLC was formed as part of the Reorganization. The
Reorganization is intended to increase the financial self-sufficiency of the
business, allowing NCLC to raise general corporate and ship-specific financing,
and to facilitate the renewal of NCLC's fleet as newly-built ships are placed
into service as older ships are phased out.
The closing of this Reorganization will occur on or about March 26,
2004. Pursuant to Section 18.1 of the Agreement, this Reorganization is
considered an assignment of the Agreement and requires the consent of Bank and
CMS. As such, the prior written consent of Bank and CMS to the assignment of the
Agreement from Customer to NCLC is hereby being requested. Customer and NCLC
acknowledge that in accordance with the requirements of Section 20.1 of the
Agreement, CMS is the beneficiary under that certain Letter of Credit issued by
DnB NOR Bank ASA (DnB) (formerly, Den Norske Bank), number DnBs/2003/135, in
the amount of USD20,000,000.00 and that certain Standby Documentary Credit
issued by The HongKong and Shanghai Banking Corporation Limited (HSBC) number
SDCHKH252020 in the amount of USD80,000,000.00 (collectively, the "Collateral
Letters of Credit"). CMS and Bank's consent to the Reorganization is conditioned
upon and shall not become effective until CMS receives original amendments to
the Collateral Letters of Credit, from DnB and HSBC, respectively, reflecting
that
the Collateral Letters of Credit are issued for the account of NCLC, in lieu of
and substituting Customer, as the applicant. Upon receipt of such original
amendments in a form acceptable to CMS, NCLC shall be substituted as the
Customer under the Agreement and shall be bound to the terms and conditions of
the Agreement and responsible for all obligations of Customer thereunder.
Please indicate your consent to the foregoing by signing in the space
provided below and returning it to me. Please contact me if you have any
questions.
Very truly yours,
NORWEGIAN CRUISE LINE LIMITED
By: /s/ Xxxxxx X. Cooler
--------------------------------------------
Xxxxxx X. Cooler
Executive Vice President & Chief Financial
Officer
NCL CORPORATION, LTD.
By: /s/ Xxxxxx X. Cooler
----------------------------------------------
Xxxxxx X. Cooler
Executive Vice President & Chief Financial
Officer
Accepted and Agreed to as of this 30 of March 2004:
JPMORGAN CHASE BANK
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------
Credit Officer, FDMS
Attorney in Fact for
Chase Manhattan Bank
Date: 3/31/04
----------------------------
CHASE MERCHANT SERVICES L.L.C.
By: /s/ Xxxxxxxx Xxxxxx
-------------------------------
Chief Financial Officer
Chase Merchant Service, LLC
Date: 3/30/04
----------------------------
cc: Attn: General Counsel's Xxxxxx
0000 X.X. 000xx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
2
