EXHIBIT 10.6
ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT (this "Agreement") is made and entered into
this 16th day of April, 1997, by and between FIRST USA MERCHANT SERVICES, INC.,
a Nevada corporation with its principal place of business at 0000 Xxx Xxxxxx,
0xx Xxxxx, Xxxxxx, Xxxxx 00000 ("First USA") and ELECTRONIC CARD ACCEPTANCE
CORPORATION, a Virginia corporation with its principal place of business at 0000
Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000 ("Company").
WHEREAS, Company has agreed to assign, sell, transfer and convey to
First USA, and First USA has agreed to purchase from Company, all of Company's
rights with respect to payments and fees related to certain merchant accounts,
under that certain Independent Sales Organization Marketing Agreement dated
August 16, 1996 (the "ISO Agreement"); and
WHEREAS, the parties desire to terminate the ISO Agreement and
First USA desires to purchase any and all rights of the Company under the ISO
Agreement as well as in and to certain merchant accounts, upon the terms and
conditions provided herein;
NOW, THEREFORE, in consideration of the mutual promises contained
herein, First USA and Company hereby agree as follows:
1. TERMINATION OF ISO AGREEMENT. The parties hereby agree that except
with respect to the surviving sections specifically referenced herein, the ISO
Agreement is hereby terminated. The parties hereby agree that all provisions of
the ISO Agreement are hereby terminated except that Sections 5, 6 and 7, 10(C)
and 12 shall survive termination of the ISO Agreement.
2. PURCHASE OF RIGHTS UNDER MERCHANT ACCOUNTS. Company hereby sells,
assigns, transfers and conveys to First USA, and First USA hereby purchases for
the consideration set forth herein and receives from Company, free and clear of
any and all Liens, any and all rights, title, interests and claims of the
Company under the ISO Agreement and with respect to all merchant accounts
solicited or referred by the Company pursuant to the ISO Agreement, including
without limitation any and all fees, discount rates, commissions, and other fees
with respect to such merchant accounts (such merchants are referred to herein as
the "Merchants," and such accounts are referred to herein as the "Merchant
Accounts"). A list of each of the Merchants and Merchant Accounts is contained
in Schedule A hereto. For purposes of this Agreement, "Liens" shall include all
liens, debts, options, pledges, security interests, rights of first refusal,
claims, commitments, encumbrances, or any other restrictions, liabilities or
charges of every nature, kind and description whatsoever.
3. NO LIABILITIES. First USA is not hereby assuming or agreeing to pay,
discharge or otherwise be responsible for any debt, liability, commitment,
undertaking or any other obligation of Company, whether known or unknown,
absolute or contingent or otherwise.
4. CONSIDERATION. The maximum consideration (the "Purchase Price") to
be paid by First USA to Company for the transaction described herein is
$3,700,000, of which $500,000 is hereby paid to and receipt is acknowledged by
the Company. The Company shall, within ninety (90) days from the date hereof,
use its best efforts to deliver executed contracts with all Merchants, in a form
agreed to by First USA, to First USA. At such time First USA shall pay the
Company a proportionate amount of the Purchase Price relative to the number of
executed Merchant contracts delivered (i.e., if executed contracts for 100% of
the Merchants are delivered, First USA shall pay $3.2 million to the Company; if
75% of Merchant contracts are delivered. First USA shall pay $2.275 million to
the Company).
5. REPRESENTATIONS, WARRANTIES AND COVENANTS. Company hereby
represents, warrants and covenants to First USA, as of the date hereof and the
Effective Date, as follows:
(a) The execution, delivery and performance of this Agreement by
Company has been duly authorized and approved by all necessary corporate or
other action, and this Agreement is legally binding on and enforceable against
Company in accordance with its terms. The execution and delivery of this
Agreement does not violate the provisions of Company's articles of incorporation
or bylaws, each as amended to the date hereof, or any judgment, decree,
mortgage, agreement, law, indenture or other instrument applicable to Company.
No notice to, filing with, authorization of, exemption by, or consent or
approval of any third person is necessary for the consummation by Company of the
transactions contemplated by this Agreement, or for the performance of Company's
obligations hereunder.
(b) Company has fully performed its services under the ISO
Agreement with respect to each Merchant and Merchant Account. There is no
action, suit, proceeding, claim or investigation pending or, to the best of
Company's knowledge, threatened, by any Merchant with against or with respect to
the Company. All of the Merchants are listed on Schedule A attached hereto and
constitute all of the merchants referred by Company to First USA pursuant to the
ISO Agreement. Company is not a party to, and has not entered into, any
agreements, understandings or arrangements with any of the Merchants.
(c) Company is not aware of any information necessary to enable a
prospective purchaser to make an informed investment decision to purchase the
interests to the ISO Agreement and the Merchants and Merchant Accounts described
herein, which has not been expressly disclosed in writing, nor of any fact which
materially adversely affects the business, operations, properties, prospects or
conditions, financial or otherwise, of the Merchants and Merchant Accounts which
has not been disclosed in writing to First USA.
(d) This Agreement conveys all rights, title and interests, free
and clear of all Liens, of Company in the ISO Agreement and in the Merchant
Accounts.
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6. MISCELLANEOUS.
(a) Amendment and Waiver. This Agreement may not be amended except
by an instrument in writing signed on behalf of each of the parties hereto.
(b) Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered or mailed, registered or certified mail, postage
prepaid, as follows:
If to First USA: First USA Merchant Services, Inc.
0000 Xxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxxx,
Group Executive
with a copy to: First USA Paymentech, Inc.
0000 Xxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Taken,
General Counsel
If to Company: Electronic Card Acceptance Corporation
000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: ___________________
(c) Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Texas.
(d) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(e) Severability. If any term or condition of this Agreement
should be held invalid by a court, arbitrator or tribunal of competent
jurisdiction in any respect, such invalidity shall not affect the validity of
any other term or condition hereof. If any terms or condition of this Agreement
should be held to be unreasonable as to time, scope or otherwise by such a
court, arbitrator or tribunal, it shall be construed by limiting or reducing it
to the minimum extent so as to be enforceable under then applicable law. The
parties hereto acknowledge that they would have executed this Agreement with any
such invalid term or condition excluded or with any such unreasonable term so
limited or reduced.
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(f) Indemnification. The Company shall indemnify First USA for all
costs, damages, expenses and liabilities relating to or arising from (i)
transactions of Merchants occurring on or prior to the Effective Date and (ii)
any claims or rights of any third parties in or to the Merchant Accounts.
IN WITNESS WHEREOF, the undersigned parties hereto have duly executed
this Amendment as of the date first above written.
FIRST USA MERCHANT SERVICES, INC. ELECTRONIC CARD ACCEPTANCE
CORPORATION
By: /s/ Xxxxx X. Xxxxxx By: /s/ X. X. Xxxxx
Name: Xxxxx X. Xxxxxx Name: X. X. Xxxxx
Title: Group Manager Title: Chairman
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