e-SMART PROCESSING AGREEMENT (SCD)
THIS AGREEMENT is made October 10th, 2001 (the "Effective Date")
BETWEEN:
e-SMART DIRECT SERVICES INC., a company incorporated under the laws of the
Province of Ontario, with its registered office currently at ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
("e-Smart")
OF THE FIRST PART
- and 624665 BC LTD. a company incorporated under the laws of the Province of
British Columbia, with its registered office currently at ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
("Channel")
OF THE SECOND PART
WHEREAS e-Smart is a member of the Interac Association ("Interac") and other
domestic and international organizations with the general mandate of
facilitating the provision of financial services, including such organizations
known as Cirrus System Inc. (collectively the "Affiliated Networks");
AND WHEREAS Interac currently governs a shared cash dispensing service in Canada
(the "SCD Service") which enables the holder of an eligible card who enters a
valid PIN at a computer terminal (individually the "ATM" and collectively the
"ATMs") to be given on-line, real-time access to such holder's account at a
Financial Institution in order to, among other things, obtain cash from such
account in accordance with the procedures and standards established by Interac
(the "Interac Regulations");
AND WHEREAS as an Interac member, e-Smart is classified as a Direct Connector
Non-Financial Institution and the Board of Directors of Interac has authorized
e-Smart to perform the function of an Acquirer, so that ft may acquire and
transmit data as part of the SCD Service;
AND WHEREAS the owner, lessor or agent of certain ATMs, the Channel has
requested e-Smart in its capacity as a Direct Connector Non-Financial
Institution, and e-Smart has agreed, to function as the Channel's Connection
Service Processor and to perform connection data processing, settlement and
other services, facilities, resources and tasks as expressly set out herein;
NOW THEREFORE in consideration of the mutual covenants and agreements contained
in this Agreement and for other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged by each party), the parties agree
as follows:
Article 1 --- Interpretation
1.0 Definitions Where used in this Agreement or in any amendments hereto or in
any communication required or permitted to be given hereunder, the following
terms shall have the following meanings, respectively, unless there is something
inconsistent in the subject matter or context therein, and other capitalized
terms herein shall have the same meaning ascribed to them under the Interac
Regulations, as may be applicable:
(a) "Agreement" shall mean this e-Smart Processing Agreement together with all
schedules, attachments and other agreements now or hereafter annexed hereto
or incorporated herein by reference as it or they may be amended,
supplemented, replaced, re-stated or otherwise modified, from time to time;
(b) "Breaching Party" has the meaning set out in Section 9.3, below;
(c) "Business Day" shall mean any day, other than a Saturday, Sunday or any
other day on which the chartered banks located in the City of Etobicoke, in
the Province of Ontario are not open for business during normal banking
hours;
(d) "Channel Switch" shall mean the computer-based system of hardware,
software, telecommunication and data processing facilities and resources
operated by or for the Channel, from time to time, during the continuance
of this Agreement which system, among other things, interprets and routes a
transaction as part of the SCD Service between the appropriate Financial
Institution and ATM for authorization;
(I) to which the e-Smart Switch is connected; and
(ii) which meets the requirements set out in the e-Smart Manual;
(e) "Claiming Party" has the meaning set out in Section 9.3, below;
(f) "Confidential Information" has the meaning set out in Section 9.0, below;
(g) "Eligible ATMs" shall mean and refer to the ATMs referred and pursuant to
Subsection 2.1 (a), below, which total number shall at all times be no less
than 50% of the greatest number of ATMs connected to the Financial Service
during the continuance of this Agreement, failing which the Channel shall
be deemed to be in material breach of this Agreement;
(h) "e-Smart Manual" means this Agreement, the written manuals, reports,
statements or other series of written directives wherein, among other
things, e-Smart sets forth obligations, standards and procedures
(collectively the "rules"), at any time or from time to time, relating to
the operation and administration of ATMs owned or leased and operated or
controlled by a Person other than e-Smart (including, but not limited to,
the Channel) which require the services of e-Smart to be connected to the
SCD Service, which rules may incorporate by reference, to the extent
applicable, the Interac Regulations and the rules of the Affiliated
Networks;
(i) "e-Smart Services" means any and all of the services, facilities,
resources, and tasks set out in this Agreement including but not limited to
the services set out in Section 2.1, below, and such other services,
facilities, resources and tasks as are necessarily incidental thereto,
which are to be provided and performed by e-Smart hereunder;
(j) "e-Smart Switch" means the computer-based system of hardware, software,
telecommunication and data processing facilities and resources used, owned
and/or controlled by e-Smart, from time to time, acting as the Processor
which, among other things, interprets and routes a transaction as part of
the SCD Service to the appropriate Financial Institution for authorization;
(k) "e-Smart Transaction Processing Suite" means the current version of certain
computer software owned and licensed by TNS (which company is authorized by
e-Smart to use the "e-Smart" trade ▇▇▇▇), comprising modules, programs and
systems which are generally intended and designed to operate and administer
the connection of ATMs to the SCD Service and to facilitate the completion
of related transactions, as may be settled and executed in writing between
the Parties under a separate licensing agreement pursuant to Subsection
3.0(b)(ii), below;
(l) "Financial Institution" shall mean any domestic or international chartered
bank, trust company, credit union, caisse populaire or other qualified
public or private organization engaged, directly or indirectly, in
providing SCD Services for the purposes set out in or necessarily
incidental to this Agreement;
(m) "Intellectual Property" has the meaning set out in Section 12.0, below;
(n) "Parties" means e-Smart and the Channel, collectively, and "Party" means
either one of them as the context requires;
(o) "Person" means any individual, corporation, partnership, joint venture,
trustee or trust, government or agency thereof, unincorporated association,
or other entity and pronouns have a similar extended meaning;
(p) "Processor" shall mean e-Smart as the Channel's Connection Service
Processor using an eligible Financial Institution as a Settlement Agent to
perform, in whole or in part, the e-Smart Services in accordance with the
Interac Regulations and the e-Smart Manual;
(q) "Settlement Account" means the banking account which the Channel opens with
an eligible Financial Institution which shall be maintained at all times by
the Channel for the purposes of settlement of all funds transferred between
members of Interac for the account of the Channel by reason of the exchange
of Messages in the SCD Service, pursuant to Subsection 3.0(d), below;
(r) "Settlement Agent" shall mean the eligible Financial Institution as may be
designated and used by e-Smart, from time to time and, initially, to be
Scotiabank, in order to settle financial obligations in accordance with the
procedures and standards established by the Canadian Payment Association
for the automated clearing settlement service in Canada; and
(s) "TNS" means TNS Smart Network Inc., a company incorporated under the laws
of the Province of Ontario affiliated with e-Smart and a member of Interac
classified as an Indirect Connector and authorized by the Board of
Directors of Interac to perform the function of an Acquirer.
1.1 Gender and Number In this Agreement, words importing the singular include
the plural and vice versa, and words importing gender include all genders.
1.2 Entire Agreement and Amendments This Agreement constitutes the entire
agreement between the parties relating to the subject matter of this Agreement
and supersedes all prior agreements, memoranda, understandings, negotiations and
discussions, whether oral or written, and there are no warranties,
representations or other agreements between the parties in connection with the
subject matter of this Agreement, other than as set out in this Agreement. No
amendment to this Agreement, and no waiver of any provision of this Agreement,
will be binding on any party unless executed and delivered by such party, in
writing.
1.3 Article and Section Headings Article and Section headings contained in this
Agreement are included solely for convenience of reference only, are not
intended to be full or accurate descriptions of the content of any Article or
Section, and will not be considered part of this Agreement.
1.4 Applicable Law This Agreement will be governed by and construed in
accordance with the laws of the Province of Ontario and the Federal laws of
Canada applicable in the Province of Ontario, and will be treated, in all
respects, as an Ontario contract, Each party to this Agreement irrevocably
attorns to and submits to the jurisdiction of the Courts of Ontario relating to
any matter arising under this Agreement.
1.5 Currency Unless expressly stated to the contrary herein, all dollar amounts
referred to in this Agreement are in Canadian funds.
Article 2 --- e-Smart Services
2.0 e-Smart Appointment Subject to the terms and conditions herein, the Channel
hereby appoints and authorizes e-Smart, on a non-exclusive basis, to act as its
Processor using the Settlement Account, and e-Smart hereby accepts such
appointment and authorization.
2.1 e-Smart Obligations During the continuance of this Agreement, and subject at
all times to the terms and conditions of the the Interac Regulations and e-Smart
Manual and the Affiliated Networks, e-Smart hereby covenants, undertakes and
agrees to:
(a) perform or cause to be performed all services for the Channel to be
connected to the SCD Service pursuant to Subsection 3.0(b), below, and to
perform all services that may be necessary or required for e-Smart to
function as the Channel's Processor (including but not limited to complying
with the Interac Regulations and maintaining its membership in good
standing with Interac); PROVIDED that such services shall be performed or
caused to be performed by e-Smart only for the Eligible ATMs as may be
prescribed in writing by the Channel, at any time or from time to time;
(b) use its best efforts to ensure that the e-Smart Switch is operating seven
(7) calendar days a week, twenty-four (24) hours a day; SUBJECT to any
outage scheduled by e-Smart, acting reasonably, upon prior written notice
to the Channel), or an intervening event contemplated by the provisions of
Section 9.7, below;
(c) deliver certain settlement, monitoring, transaction and other statements or
reports by electronic means to the Channel for the Eligible ATMs in a
timely manner, as described in the e-Smart Manual; PROVIDED that the
Channel shall at all times inspect each report and notify e-Smart of any
inaccurate or incorrect statements therein within five (5) Business Days
after the date of its receipt, failing which such report shall
automatically be deemed to be approved by the Channel on an as-is basis,
without further notice or recourse; and
(d) establish and maintain certain Internet look-ups, retrieval facilities, web
hosting, e-commerce and other services or facilities on behalf of the
Channel, as more particularly described in the e-Smart Manual.
Article 3 --- Channel Obligations
3.0 Covenants and Undertakings During the continuance of this Agreement, and
subject at all times to the terms and conditions of the e-Smart Manual and the
Interac Regulations, the Channel hereby covenants, undertakes and agrees to:
(a) at all times ensure that the Channel Switch and the Eligible ATMs using the
Channel Switch are operating seven (7) calendar days a week, twenty-four
(24) hours a day, SUBJECT to scheduled outages and other circumstances
prescribed in the e-Smart Manual, by way of:
(i) retaining TNS or a Person other than TNS, at the Channel's sole cost
and expense, to act in the capacity of a service bureau for the
performance of switching services in the acquisition and transmission
of all electronic and non-electronic connection data associated with
transactions conducted by the Channel and the Eligible ATMs using the
SCD Service, or
(ii) using the e-Smart Transaction Processing Suite as an authorized
non-exclusive licensee of TNS, at the Channel's sole cost and expense,
in order for the Channel to act in the capacity of an Indirect
Connector for the performance of the switching services set forth
under Subsection 3.0(b)(i); above;
so that e-Smart may function as the Channel's Processor. The Channel
intends that the Channel Switch shall be operated, initially, in the
manner prescribed in Subsection 3.O(a)(i), above;
(b) maintain a Settlement Account in good standing to facilitate the settlement
of any and all transactions so that e-Smart may function as the Channel's
Processor, and for the payment of all related fees, charges and other
monies payable herein; PROVIDED that e-Smart, solely, shall be authorized
by the Channel to electronically credit the Settlement Account and to
electronically debit the Settlement Account in accordance with the separate
authorization to be completed by the Channel upon execution and delivery of
this Agreement in the form attached hereto as Schedule "A"; PROVIDED
FURTHER that the Channel shall promptly notify e-Smart at all times of any
errors or inconsistencies in such settlement of transactions or such
payment of fees, charges and other monies in connection with the Settlement
Account;
(c) cause a direct routing to e-Smart of the electronic messages for any and
all transactions using the SCD Service herein (including but not limited to
such messages required by e-Smart acting as the Channels' Processor);
(d) display or cause to be displayed e-Smart's trade marks, trade names or logo
designs on each of the Eligible ATMs, in a reasonably conspicuous manner,
for marketing and information purposes only, subject at all material times
to the provisions of Article 12, below; and
(e) comply with all lawful, reasonable instructions and advice or quality
control directions which may be established and delivered by e-Smart and/or
Interac and/or the Affiliated Networks, if any, at any time or from time to
time, in connection with the Settlement Account, as may be applicable
(including but not limited to any and all operating manuals or procedures);
PROVIDED that unless otherwise agreed between the parties, acting
reasonably, the Channel shall have five (5) Business Days from the date of
receipt of such instructions or directions to comply with them. For
clarity, the Channel agrees to strictly comply with any and all back items
and trace-back requirements as may be directed by e-Smart and/or Interac
and/or the Affiliated Networks, if any.
Article 4 --- Fees
4.0 Fees Payable by Channel The Channel hereby covenants and agrees to pay to
e--Smart and/or hereby authorizes e-Smart, as may be applicable, to collect all
fees and charges together with any applicable sales, excise or other tax levied
upon any of the e-Smart Services (excluding any taxes based on the net income of
e-Smart or other taxes levied directly against e-Smart, which taxes shall be
paid by e-Smart in accordance with the fees and charges set out in Schedule "B"
attached hereto (collectively the "Fees")
4.1 Billing Unless expressly stated to the contrary in this Agreement, the Fees
shall be payable by the Channel in arrears and to obtain payment therefore,
e-Smart may at its option either:
(a) debit the Fees from the Settlement Account; or
(b) deliver an invoice for the Fees to the Channel, in which event the Channel
shall remit such payment to e-Smart forthwith upon receipt of such invoice;
or
(c) deduct the amount of the Fees or any part thereof from, or set-off and
apply the amount of the Fees or any part thereof against, any amounts or
payments due to e-Smart from the Channel under any separate agreement,
document or instrument entered into between the Parties;
and if the Channel fails to pay any of the Fees or other amounts of any nature
payable by it hereunder on the date therefore, as aforesaid, the Channel shall
pay interest on such overdue amount in the same currency as such overdue amount
is payable before and after demand, default and judgment until actual payment in
full at a rate per annum equal to eighteen per cent (18.00%) calculated on a
three hundred and sixty-five (365) day year and payable daily in arrears, with
interest on overdue interest at the same interest rate.
Article 5 --- Testing and Implementation
5.0 Testing Schedule Subject to the terms and conditions of this Agreement, the
Parties shall forthwith after the Effective Date designate their respective
project managers who will meet and draw up formal implementation and testing
schedules, for the completion of all proprietary and common activities that must
be undertaken to provide necessary systems connection and interface between the
computer systems, to implement and process the transaction contemplated by this
Agreement to commence on a specified date to be mutually agreed upon between the
Parties.
5.1 Performance Testing Prior to the specified commencement date to implement
and process the transaction contemplated by this Agreement as referred to in
Section 5.0, above, e-Smart shall first, in co-operation with the Channel,
perform a test configuration task and verification procedure (the "Performance
Test") in order to adequately determine whether the test configuration performs
in accordance with the performance specifications prescribed in the e-Smart
Manual and/or the Interac Regulations, as determined by e-Smart in its sole
discretion, in connection with the performance of the e-Smart Services. The
Performance Test shall be successfully completed on the date e-Smart has
determined, in its sole discretion, that the test configuration meets the said
performance specifications, and any such determination by e-Smart shall be
conclusive and shall be binding upon the Channel.
Article 6 --- e-Smart Manual
6.0 General The Channel hereby agrees to be bound by and comply with the e-Smart
Manual, unless specifically exempted therefrom in writing by e-Smart; PROVIDED
that all rules, regulations, directives, policies, guidelines, requirements and
other matters set out in the e-Smart Manual shall allow reasonable time, subject
to the exigencies of the circumstances (all as determined by e-Smart, in its
sole discretion), for the Channel to comply with same.
6.1 Changes It is agreed that any and all changes to the e-Smart Manual will be
effective on the tenth (10th) day after notice of the change has been sent by
e-Smart to the Channel.
Article 7 --- Switches and ATMs
7.0 Changes The Channel shall at all times, at its sole cost and expense, ensure
the compatibility of the software and communications protocol of the Channel
Switch with the e-Smart Switch, all as prescribed in the e-Smart Manual. It is
acknowledged and agreed that e-Smart shall be entitled to select, use or change
all of its facilities, equipment, programs or procedures used to perform its
obligations under this Agreement, such changes to be made as determined by
e-Smart, in its sole discretion. e-Smart shall, subject to the exigencies of the
circumstances (all as determined by e-Smart, in its sole discretion), provide
the Channel with at least sixty (60) days prior written notice of any changes
which would require corresponding changes by the Channel.
7.1 Proprietary Responsibilities For greater certainty, it is acknowledged and
agreed that e-Smart shall not, at any time or in any way or in any manner
whatsoever, be liable for, or be responsible for, maintaining. servicing,
upgrading, operating or managing:
(a) any of the Eligible ATMs using the Channel Switch; or
(b) any of the proprietary elements of any of the Eligible ATMs using the
Channel Switch. Such proprietary elements may include the Channel Switch,
communication facilities and other computer hardware or software, all of
which constitute the Channel's proprietary network.
7.2 Communications The Channel shall be responsible for all costs and expenses
of installing, leasing and maintaining a communications transmission facility to
provide communications between the Channel Switch and/or any of the Eligible
ATMs and the e-Smart Switch, all as prescribed in the e-Smart Manual.
Article 8 --- Audit
8.0 General e-Smart shall have the right, at any time upon written demand made
by e-Smart to the Channel, to inspect those computer facilities and operations
which are involved in any part of the Channel Switch. Qualified third party
consultants as chosen by e-Smart, in its sole discretion, will be employed by
e-Smart for the purpose of any such inspection. The Channel shall have the
right, as a condition of such inspection, to require any such consultant to
execute a form of confidentiality agreement as the Channel may reasonably
require. The cost of any such inspection shall be shared equally between the
Channel and e-Smart, and any such consultant so employed will be required to
create written reports which are accessible only to e-Smart and to the Channel.
Article 9 --- Term and Termination
9.0 Term This Agreement shall be effective and shall continue in full force and
effect for a term of three (3) years as of and from the Effective Date (the
"Term"), unless and until terminated pursuant to the terms and conditions of
this Agreement.
9.1 Termination (Implementation or Changes) In the event that:
(a) the Channel fails to complete the matters relating to its computer systems
as contemplated in and pursuant to the testing contemplated by Article 5,
above, e-Smart, as its sole and exclusively remedy, shall have the right to
notify the Channel of its intention to terminate this Agreement. whereupon
this Agreement shall terminate immediately without any further notice,
liability or obligation whatsoever on the part of either e-Smart or the
Channel. It is understood and agreed that e-Smart shall not refund any Fees
(as defined under Article 4, above) upon such termination pursuant to this
Subsection 9.1(a);
(b) any changes to the subject matter contemplated in Section 7.0, above, would
have a material adverse impact upon the Channel's operations or require a
material investment in new facilities, equipment or programs, then the
Channel's sole and exclusive remedy shall be the right to terminate this
Agreement effective upon at least ninety (90) days prior written notice to
e-Smart.
9.2 Termination (Without Cause) Either Party may terminate this Agreement by
delivering to the other Party at least three (3) months prior written notice of
termination. The Parties agree that this Agreement shall not be terminable
without cause upon reasonable notice, except as may be specifically provided in
this Section 9.2.
9.3 Termination (Non-Monetary Default) Except as otherwise set forth in and
subject to Sections 9.4 and 96, below, in the event that either Party believes,
as determined in its sole discretion, that there has been a material breach of
this Agreement by the other Party (the "Breaching Party"), such Party (the
"Claiming Party") must notify the Breaching Party in writing specifying in
reasonable detail the nature of the breach within thirty (30) days of learning
of said breach. The Breaching Party shall have ninety (90) days (or longer if
the Parties agree in writing) in which to remedy the breach. If such a breach
has not been remedied to the satisfaction of the Claiming Party by the end of
the 90-day remedy period (or such longer remedy period if the Parties agree in
writing), the Claiming Party shall have the right to issue formal written notice
of termination to the Breaching Party, such termination to take place no sooner
than the fifth (5th) Business Day following the expiration of such 90-day or
longer period.
9.4 Termination (Monetary Default) In the event that either Party should default
~n the payment of any sum or amount due hereunder and such default is not
remedied within two (2) Business Days after written notice thereof is given by
the non-defaulting Party to the defaulting Party, such non-defaulting Party may,
at its option and without further notice, immediately terminate this Agreement
without prejudice to any other remedies which ft may have by reason of default.
9.5 Termination (Insolvency) In that event that either Party shall:
(a) admit in writing its inability to pay its debts generally as they become
due or generally fail or cease to pay its debts generally as they mature or
become due;
(b) cease or threaten to cease to carry on its business or commit or threaten
to commit any act of bankruptcy;
(c) make or agree to make an assignment, disposition or conveyance, whether by
sale or otherwise, of all its assets (or a substantial portion thereof) in
bulk;
(d) have or suffer a judgment, order, decree, execution, writ, warrant,
sequestration, extent or any other similar process made, issued, entered
and/or enforceable against, or a distress, execution or analogous process
levied or enforceable upon, all or any substantial part of its property or
assets which is not removed. stayed, set aside, denied or set aside;
(e) consent to or suffer the appointment of a trustee, trustee in bankruptcy,
liquidator, receiver, receiver and manager, custodian, curator, sequester
or other official with similar powers in respect of it or all or any
substantial part of its property or assets, which appointment is not
stayed, removed, set aside, denied, vacated or released within thirty (30)
days after the date thereof or after any stay is removed, vacated, denied
or set aside;
(f) have any proceeding instituted or commenced against it to adjudicate it a
bankrupt or insolvent, or to petition it into bankruptcy, or to seek
liquidation, winding-up, reorganization or arrangement, relief from or
composition of its debts, under any applicable legislation now or in the
future, including without limitation under the Companies' Creditors
Arrangement Act (Canada), Bankruptcy and Insolvency Act (Canada) or the
Winding-Up Act (Canada) or any other bankruptcy, insolvency or analogous
laws; or
(g) take any action in respect of its dissolution, winding up or liquidation,
or institute any proceedings to be adjudicated a bankrupt or insolvent, or
consent to, approve or authorize the institution of bankruptcy or
insolvency proceedings against it, of file any petition or proposal to take
advantage of any act of insolvency, or take any action, make any proposal
or file or present any petition (or consent to the filing of presentment of
such petition), answer or consent seeking liquidation, winding-up,
reorganization, arrangement or relief from or composition of its debts
under any applicable legislation now or in the future, including without
limitation under the Companies' Creditors Arrangement Act (Canada),
Bankruptcy and Insolvency Act (Canada) or the Winding-Up Act (Canada) or
any other bankruptcy, insolvency or analogous laws, or make any assignment
in bankruptcy or make any other assignment for the benefit of creditors, or
take any corporate action in furtherance of any of the aforesaid purposes;
then the other Party shall have the right, subject to applicable laws, to
terminate this Agreement immediately and/or take other reasonable actions it
considers necessary or desirable, including without limitation, establishing
reserves, withholding payments or funds due or available to or on behalf of such
other Party.
9.6 Termination In the event that the Channel:
(a) ceases to be an Acquirer;
then e-Smart shall have the right, subject to applicable laws, to terminate this
Agreement immediately and/or take other reasonable action it considers necessary
or desirable, including but not limited to, establishing reserves, withholding
payments or funds due or available to or on behalf of the Channel.
9.7 Termination (Excusable Delay) The dates and times by which and within which
the Channel or e-Smart is required to render performance under this Agreement
(other than dates and times for payment of money) shall be postponed
automatically to the extent and for the period of time that the Channel or
e-Smart, as the case may be, is prevented from any such performance by reason of
any cause not reasonably within that Party's control (including, but not limited
to, acts of God, acts of war, not, fire, flood or other disaster, acts of
government, acts of Interac or the Associated Networks, strike, lock-out,
communication line or power failures); PROVIDED that the Party thus prevented
from rendering performance notifies the other Party immediately in writing and
in detail of the commencement and nature of such cause; PROVIDED FURTHER that
such Party uses its best efforts to render performance in a timely manner
utilizing to such end all resources reasonably required in the circumstances,
including but not limited to obtaining supplies or services from other sources,
if same are reasonably available;
PROVIDED that notwithstanding the foregoing, if any such period of postponement
exceeds thirty (30) days, then the Party not prevented from rendering
performance under this Agreement shall have the right to terminate this
Agreement upon at least ninety (90) days prior written notice to the Party
prevented from rendering performance under this Agreement during such time that
such Party is unable or has not rendered performance under this Agreement.
9.8 Effect of Termination In the event:
(a) during any period after which notice of termination has been given by
either Party and prior to the termination of this Agreement, except as
otherwise provided herein, each of e-Smart and the Channel shall continue
to fulfill its respective obligations hereunder, unless otherwise
prohibited by law;
(b) of the expiration or termination of this Agreement, the Channel shall
perform any such acts and execute and deliver any such documents reasonably
required to give effect to the expiration or the termination of this
Agreement in accordance with any written request of e-Smart and/or Interac;
(c) of the expiration or termination of this Agreement, e-Smart shall perform
such acts and execute and deliver any such documents reasonably required to
give effect to the expiration or the termination of this Agreement in
accordance with any written request of the Channel and/or Interac;
PROVIDED that notwithstanding the expiration or termination of this Agreement
for any reason:
(i) all monetary and non-monetary obligations of the Parties under this
Agreement owing and/or to be performed or discharged prior to the date
of expiration or termination, shall survive such expiration or
termination;
(ii) the provisions of Subsections 9.8(b) and 9.8(c), above, and Article
11, below, shall survive any expiration or termination of this
Agreement, together with any other provision of this Agreement which
by its nature should reasonably survive such expiration or
termination; and
(iii)the provisions of Artic3e 10, below, shall survive any expiration or
termination of this Agreement with respect to events occurring at or
prior to such expiration or termination or matters which survive
expiration or termination; and
(iv) the provisions of Section 12.3, below, shall app3y in full force and
effect upon such expiration or termination
Article 10 --- Indemnification
10.0 By Channel Subject to Section 10.2, below, the Channel shall indemnify and
hold e-Smart, its officers, directors, employees, agents, legal counsel and
other representatives harmless, from and against any losses, directly or
indirectly resulting from, arising out of or incurred or suffered in connection
with, in any way or in any manner whatsoever;
(a) any intentional, wrongful or negligent act or omission of the Channel or of
its officers, directors, employees, agents, legal counsel and other
representatives in the performance of any of the duties and obligations of
the Channels under this Agreement;
(b) any misrepresentation by, or breach of any warranty of, the Channel
contained in this Agreement;
(c) any default by the Channel under, or any breach or contravention by the
Channel of, any agreement, covenant, term or provision of this Agreement;
and
(d) the enforcement of this Agreement or any provision hereof as a result of any
of the matters set out in Subsections 10.0(a), 10.0(b) or 10.0(c), above.
10.1 By e-Smart Subject to Section 10.2, below, e-Smart shall indemnify and hold
the Channel, its officers, directors, employees, agents, legal counsel and other
representatives, harmless from and against any Losses, directly or indirectly
resulting from, arising out of or incurred or suffered in connection with, in
any way or in any matter whatsoever;
(a) any misrepresentation by, or breach of any warranty of e-Smart contained in
this Agreement;
(b) the enforcement of this Agreement or any provision hereof as a result of
any of the matters set out in Subsection 10.1(a), above.
10.2 Limitation of Liability In no event shall:
(a) either Party be liable to the other, in any way or in any manner
whatsoever, for any indirect, incidental, special, consequential or
punitive damages, including but not limited to lost profits, lost business
revenue, failure to realize expected savings, or other commercial or
economic loss of any kind, as a consequence of any breach, default or
contravention by such Party of, or any failure by such Party to satisfy
and/or perform, any term of provision of this Agreement, whether or not
such Party knew or had reason to know that such damages may be incurred;
(b) either Party be liable to the other, in any way or in any manner
whatsoever, for any direct, indirect, incidental, special, consequential or
punitive damages incurred by any person not a party to this Agreement
arising out of any default under or any breach or contravention of any
agreement, covenant, term of provision of this Agreement; or
(c) e-Smart be liable to the Channel, in any way or in any manner whatsoever,
for any loss directly or indirectly resulting from, arising out of or
incurred or suffered in connection with, in any way or in any manner
whatsoever, any default by e-Smart under, or any breach or contravention by
e-Smart of, any agreement, covenant, term or provision of this Agreement or
e-Smart's failure to perform, or default in the performance of, any of its
obligations, liabilities or responsibilities set forth in this Agreement
including but not limited to e-Smart's failure to provide any of the
e-Smart Services;
PROVIDED that the provisions of Subsection 10.2(a), above, shall apply with
respect to any claim, suit, demand or action by either Party irrespective of the
nature of the cause underlying the same, including without limitation,
negligence or misrepresentation, except that such provision shall not apply to
claims for personal injury or damage to real property or tangible personal
property caused by the negligence or willful acts or omissions of the Party, its
officers, directors, employees, agents, legal counsel and other representatives
or to claims for the payment of amounts expressed to be owing under this
Agreement; and provided further that neither Party shall have a claim for any
reduction in any fee or charge payable hereunder by reason of the Eligible ATMs,
the Channel Switch or any part thereof failing to function at any time during
the Term; and provided further that no action, regardless of form, pursuant to
this Agreement may be brought by either Party more than one (1) year after the
cause of action has occurred.
10.3 Indemnification Notice Each Party shall promptly notify the other Party of
any claim, demand, suit, action or threat of action of which that Party becomes
aware (except with respect to a threat of suit or action either Party might
institute against the other Party) which may give rise to a right of
indemnification pursuant to this Agreement. The indemnifying Party will be
entitled to participate in the settlement or defense thereof and, if the
indemnifying Party elects, to take over and control the settlement of defense
thereof with counsel satisfactory to the indemnified Party. In any case, the
indemnifying Party and the indemnified Party shall cooperate (at no cost to the
indemnified Party) in the settlement or defense of any such claim, demand, suit
or proceeding.
Article 11 --- Restrictive Covenants
11.0 Confidentiality: Non-Disclosure and Defined Terms For the purpose of this
Article 11, "Recipient" means the Party receiving Confidential Information and
"Discloser" means the Party disclosing Confidential Information. Each Recipient
acknowledges that all material and information which has or will come into its
possession or knowledge of each in connection with this Agreement or the
performance hereof, consists of confidential and proprietary data (the
"Confidential Information"), the disclosure of which to or use by third parties
may be damaging (including but not limited to all matters relating to the
e-Smart Switch or the Channel Switch, all trade secrets, all technological
developments, all customers or clients and all information relating to the
business and affairs of each Party). The Recipient therefore agrees to hold such
material and information in strictest confidence, not to make use thereof other
than for the performance of this Agreement, to release it only to directors,
officers, employees, agents, or contractors requiring such information (i.e. on
a "need to know" basis), and not to release or disclose it, and to use
reasonable efforts to cause such directors, officers, employees, agents and
contractors not to release or disclose it to any third party.
11.1 Ownership All Confidential Information furnished by the Discloser to the
Recipient under or pursuant to this Agreement is and shall remain the exclusive
property of the Discloser.
11.2 Exceptions The obligations of the Recipient with respect to any particular
portion of Confidential Information shall terminate or shall not attach, as the
case may be. when any of the following occurs:
(a) it was in the public domain at the time of the Discloser's communication
thereof to the Recipient:
(b) it entered the public domain through no fault of the Recipient subsequent
to the time of the Discloser's communication thereof to the Recipient;
(c) it was in the Recipient's possession free of any obligation of confidence
at the time of the Discloser's communication thereof to the Recipient;
(d) it was independently developed by the Recipient; or
(e) its disclosure is legally compelled.
11.3 Remedies The Parties agree that the Confidential Information is valuable
property and that that any violation of the provisions of this Article 11 would
cause the parties irreparable injury for which they would have no adequate
remedy at law, and that, in addition to any other remedies which a Party may
have against the other Party, it shall be entitled to injunctive relief against
such violation.
Article 12 --- Intellectual Property
12.0 Proprietary Rights and Defined Terms For the purposes of Subsection 3.0(e),
above, and this Article 12, e-Smart hereby represents and warrants that it is
the sole and beneficial owner of any and all identification, design
characteristics, trade marks, trade names, patents and any other intellectual
property rights associated directly with e-Smart (whether or not developed by
e-Smart, now or at any time used or registered in the name of e-Smart (the
"Intellectual Property"). The Channel shall have the right, subject to the terms
and conditions of this Agreement, to use the Intellectual Property in connection
with the Eligible ATMs.
12.1 Acknowledgements The Channel acknowledges that e-Smart is the sole and
beneficial owner of any goodwill which the Channel may acquire from the use of
the Intellectual Property, which will vest in and become the absolute property
of e-Smart both during the continuance of this Agreement and thereafter.
Further, the Channel covenants and agrees that it will not challenge the
validity of ownership of the Intellectual Property or related goodwill.
12.2 Authorized Usage The Channel agrees, with respect to the Intellectual
Property, to comply with all written instructions issued by e-Smart, acting
reasonably, relating to the form and manner in which the Intellectual Property
shall be used, and to discontinue immediately, upon notice from e-Smart, any
practice relating to the use of the Intellectual Property, which in the opinion
of e-Smart, acting reasonably, would or might adversely affect the rights or
interests of e-Smart.
12.3 Termination Provisions Upon the expiry or other termination of this
Agreement, however caused, any authorization granted to the Channel to use the
Intellectual Property shall automatically cease, without further notice, and the
Channel shall immediately cease and desist from all usage of the Intellectual
Property, remove any display or use of the Intellectual Property on or around
the Eligible ATMs, and destroy any copies of such Intellectual Property which
the Channel is using or has in its possession or control. Within five (5)
Business Days after such expiry or termination, the Channel shall deliver to
e-Smart a written certification executed by an officer of the Channel that it
has fully complied with the provisions of this Section 12.3.
Article 13 --- General
13.0 Exclusivity This Agreement and the rights granted hereunder by the Channel
to e-Smart are non-exclusive. Nothing in this Agreement shall prevent the
Channel from engaging or retaining any other Person to provide any of the
services which are identical or similar to any of the e-Smart Services. This
Agreement and the rights granted hereunder by e-Smart to the Channel are
non-exclusive. Nothing in this Agreement shall prevent e-Smart from engaging in
or offering to any other Person to provide any of the services or arrangements
which are identical or similar to those set forth herein.
13.1 Binding Nature This Agreement shall be binding on the Parties and their
successors and permitted assigns, but neither Party may assign this Agreement
without the prior written consent of the other Party.
13.2 Notices. All notices, orders, directives, requests or other written
communications required or permitted to be given or sent pursuant to this
Agreement, shall be deemed given if sent by facsimile, mailed by Canadian Postal
Service, registered or certified, return receipt requested, postage prepaid, and
addressed to each Party at the address first given above. A Party may at any
time change its address or facsimile number for notification purposes by
delivering, as aforesaid, a notice setting forth the new address or number, and
the date on which the new address or number shall first be effective.
13.3 Waiver This Agreement shall not be deemed or construed to be modified,
amended, rescinded, canceled or waived, in whole or in part, except by written
amendment signed by the Parties.
13.4 Severability If any portion of this Agreement is declared or found to be
illegal, unenforceable or void, then both Parties shall be relieved of all
obligations arising under such provision, but if the remainder of this Agreement
shall not be affected by such declaration or finding, then each provision not so
affected shall be enforced to the fullest extent permitted by law.
13.5 Relationship of Parties e-Smart is, in furnishing and performing the
e-Smart Services, an independent contractor. e-Smart does not undertake by this
Agreement or otherwise to perform any obligation of the Channel, whether
regulatory or contractual. e-Smart has the sole right and obligation to
supervise, manage, contract, direct, procure, perform or cause to be performed,
all work to be performed by e-Smart pursuant to the e-Smart Services, unless
otherwise expressly provided to the contrary herein.
13.6 Time of Essence Time shall be of the essence of this Agreement.
13.7 Further Acts Each Party shall execute such further and other assurances,
instruments and documents and do all such other things and acts which shall be
necessary or desirable for carrying out the purpose and intent of this
Agreement.
IN WITNESS WHEREOF the Parties have signed this Agreement.
e-SMART DIRECT SERVICES INC.
Date: October 10, 2001
per: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ A.S.O.
▇▇▇▇▇▇ ▇▇▇▇▇, Pres. & CEO
I have the authority to bind the corporation.
624665 BC LTD.
Date: October 10, 2001
per: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
A.S.O.
I have the authority to bind the corporation.
▇▇▇▇▇▇ ▇▇▇▇▇
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