EXHIBIT 10.25
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED (BASED UPON A REQUEST FOR
CONFIDENTIAL TREATMENT) AND HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2.
SERVICE AGREEMENT
(ValueStar)
THIS SERVICE AGREEMENT (this "Agreement") is entered into and shall be
effective as of June 1st, 2000 (the "Effective Date"), by and between: (i)
GOLDEN RETRIEVER SYSTEMS, L.L.C., a Delaware limited liability company ("GRS");
(ii) and VALUESTAR CORPORATION, a California corporation with offices at 000
00xx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx, 00000.
Background
GRS has developed and owns certain proprietary computer software and
related documentation and procedures (collectively, the "Software") which
enables GRS to receive transactional and other data from payment card processors
and other financial institutions and create and deliver reports, files,
databases and related services to GRS' customers and other designated
recipients. ValueStar owns and operates the ValueStar Program (the "Program")
which offers participating "Members" the ability to take advantage of merchant
discounts and/or rewards by utilizing "Registered Cards" to purchase goods and
services from participating "Merchants." On the terms and subject to the
conditions set forth in this Agreement, ValueStar desires to purchase from GRS
and GRS desires to furnish to ValueStar, certain "Services" described in this
Agreement for the administration of the Program.
Agreement
1. TERM. The term of this Agreement (the "Term") shall commence on the
Effective Date and shall continue until terminated in accordance with Paragraph
5, below.
2. SERVICES. On the terms and subject to the conditions set forth in
this Agreement, GRS will make the information, data base management, reporting
and ACH services (collectively, the "Services") described on Addendum "A" to
this Agreement available to ValueStar, its Members, Merchants and others that
may be designated from time to time by ValueStar.
3. APPLICATION SYSTEM. All Services provided by GRS to ValueStar
pursuant to this Agreement will be provided by and/or through ValueStar's
Application System (defined below).
4. PAYMENT. As payment for the Services provided by GRS pursuant to
this Agreement, ValueStar agrees to pay GRS the development and service fees
(collectively, the "Fees") at the times and in the amounts listed on Addendum
"B" to this Agreement.
5. TERMINATION. The Minimum Term of this Agreement (the "Minimum Term")
shall be one (1) year following the "System Start Date" (defined below). After
the expiration of the Minimum Term, the Term of this Agreement shall
automatically renew for successive one (1) year periods ("Renewal Term(s)")
unless terminated by either party in accordance with the following sentence.
Upon the expiration of the Minimum Term or, if applicable, each successive
Renewal Term, either party may terminate this Agreement for any reason by
providing written notice of termination to the other party at least one hundred
and eighty (180) days prior to the expiration of the Term then in effect.
Notwithstanding the foregoing: (i) GRS may immediately terminate this Agreement
and/or cease providing Services if ValueStar fails to pay all or any portion of
the Fees in accordance with Addendum "B" after receiving written notice of
default and a fifteen (15) day opportunity to cure; and (ii)
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either party may immediately terminate this Agreement and/or cease providing
Services in the event of a breach of any material term, warranty, condition or
covenant (including the failure, by GRS, to provide any of the Services
(described below) by the other party which remains uncured after thirty (30)
days' written notice to defaulting other party.
6. GENERAL TERMS AND CONDITIONS. The General Terms and Conditions
listed on Addendum "C" to this Agreement are an integral part of this Agreement
and shall be binding on ValueStar and GRS as if fully set forth in this
Paragraph 6.
Executed as of the Effective Date by:
GRS:
GOLDEN RETRIEVER SYSTEMS, L.L.C., a
Delaware limited liability company
By: /s/ Xxxxx Xxxxxx
Its: President
-------------------------------
ValueStar:
VALUESTAR, a California Corporation
By: /s/ Xxxxx Xxxx
Its: Chief Operating Officer
-------------------------------
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ADDENDUM "A"
GENERAL OBLIGATIONS AND DESCRIPTION OF SERVICES
1. Application System. In connection with providing the Services, GRS
will, at GRS' expense, construct, install, operate, service and maintain an
application system for ValueStar's exclusive use during the Term (the
"Application System"). The Application System will be located at GRS' main
operating facility in Chandler, Arizona. The Application System will be custom
configured for ValueStar and capable of providing all of the Services described
in this Agreement. The Application System's configuration shall include:
a. Primary Application Server. The Primary Application Server
processes raw transaction data, builds historical and
application databases, generates reports and provides log
printing.
b. Transaction Inquiry Server. The Transaction Inquiry Server
services report inquiries, stores historical data and controls
report printing tasks.
x. Xxxxxx Retriever(TM) Proprietary Software. The Golden
Retriever Proprietary Software will manage, control and
coordinate all information processing, data distribution and
reporting functions.
d. Miscellaneous. The Application System will also include all
third-party software (the "Third-Party Software") and hardware
required to support the Services as well as the appropriate
number of dedicated inbound and outbound phone lines as
determined by GRS and ValueStar from time to time during the
Term.
2. Initial Test and System Start Dates. Subject to ValueStar providing
(or arranging for the delivery) to GRS of all necessary transactional data, data
base uploads and other information required to deliver the Services in a timely
manner, within ***** days following the approval of design specification (the
"Development Period"), GRS and ValueStar will commence a comprehensive test
("Initial Test") of the Application System in order to confirm that the
Application System is properly programmed and configured to provide the Services
in the manner required by the Specification and this Agreement based on Phase I
functionality. The date that the Initial Test is completed in all material
respects (as signified by the mutual written acknowledgment of ValueStar and
GRS) will be the "System Start Date." GRS and ValueStar will utilize their
mutual best efforts to ensure that the System Start Date occurs by *****.
3. Data Base Maintenance. During the Term, ValueStar will create and
update and GRS will maintain the following Data Bases with respect to the
Program:
a. Member Profile Database. On or before the expiration of the
Development Period, using an initial file upload from ValueStar, GRS will
establish a data base of all Members initially participating in the Program (the
"Member Data Base"). The Member Data Base will be either updated or completely
refreshed by ValueStar daily or weekly using a mutually acceptable electronic
(Internet FTP) file delivery protocol. The Member Data Base will contain the
information reasonably required by GRS to deliver the Services all as more
specifically set-forth in the Specification.
* PORTIONS OF THIS EXHIBIT DENOTED HEREIN BY ***** HAVE BEEN OMITTED (BASED UPON
A REQUEST FOR CONFIDENTIAL TREATMENT) AND HAVE BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2.
-3-
b. Participating Merchant Database. On or before the
expiration of the Development Period, using an initial file upload from
ValueStar, GRS will establish a data base of all Merchants initially
participating in the Program (the "Merchant Data Base"). The Merchant Data Base
will be either updated or completely refreshed by ValueStar daily or weekly
using a mutually acceptable electronic (Internet FTP) file delivery protocol.
The Merchant Data Base will contain the information reasonably required by GRS
to deliver the Services all as more specifically set-forth in the Specification.
c. Program Database. On or before the expiration of the
Development Period, using an initial file upload from ValueStar, GRS will
establish a data base of Program information that will include the fields
required to calculate the amount the merchant is to be debited and the amount to
be credited to the member. The Program Data Base will either be updated or
completely refreshed by ValueStar daily or weekly using a mutually acceptable
electronic (Internet FTP) file delivery protocol. The Program Data Base will
contain the information reasonably required by GRS to deliver the Services all
as more specifically set-forth in the Specification.
d. Member Sponsor Database. On or before the expiration of the
Development Period, using an initial file upload from ValueStar, GRS will
establish a data base of Member Sponsor information that will include the fields
required to rebate specific member sponsors. The Member Sponsor Data Base will
either be updated or completely refreshed by ValueStar daily or weekly using a
mutually acceptable electronic (Internet FTP) file delivery protocol. The Member
Sponsor Data Base will contain the information reasonably required by GRS to
deliver the Services all as more specifically set-forth in the Specification.
4. Processing and Reporting Services. During the Term, GRS will provide
the following Services to ValueStar and ValueStar will provide the following
support to GRS:
a. Basic Transaction Processing. Each processing day during
the Term, GRS will provide the following Basic Transaction Processing Services:
(i) ValueStar Bulk Transaction Processing. GRS will
download raw transaction files from processors, banks, ISO (Independent Sales
Organizations) and/or directly from Merchants as designated by ValueStar from
time to time during the Term (the "ValueStar Transaction Files"). The ValueStar
Transaction Files will be limited to files used by GRS exclusively for ValueStar
and may include raw transaction data for Merchants participating in the Program
(as well as non-participating merchants) who are not otherwise included in GRS'
in-house transaction files. GRS will scan the ValueStar Transaction Files and
segregate all transactions relating to Merchants participating in the Program.
The resulting transactions will then be formatted and loaded to the Transaction
Information Retrieval System "TIRS" Data Base for further "PQT Processing" as
defined below.
b. Potentially Qualified Transaction ("PQT") Processing. Each
processing day during the term, GRS will provide PQT Transaction Processing
Services to ValueStar. PQT Processing will include the comparison of all Member
registered payment cards against the TIRS Data Base. All Member transactions at
participating Merchants will then be loaded into a separate, Potentially
Qualified Transaction ("PQT") Data Base, for delivery to ValueStar in accordance
with the Specification. The PQT database will include an account number assigned
by ValueStar to each Members transaction rather than the actual Members credit
card number.
c. Administrative Reporting. As required by the Specification,
GRS will provide ValueStar with periodic administrative/management data bases
and reports.
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XXXXXXXX "X"
FEE SCHEDULE
1. Initial Service Fee.
a. Basic Service. The Initial Service Fee for this Agreement
will *****. The Initial Service Fee will be paid as follows: (i) ***** paid (in
full) in connection with the Specification; (ii) ***** per month payable at the
end of months 1, 2 and 3 (with month one being the Effective Date) and the
balance of ***** due and payable upon the System Start Date. Subject to GRS
performing or tendering performance of its obligations under Paragraph 4 of
Addendum "A" of this Agreement, the Initial Service Fee shall be deemed earned
when paid and ValueStar shall not be entitled to a refund of all or any portion
of the Initial Service Fee.
2. Monthly Service Fees. Each month commencing with the System Start
Date, ValueStar shall pay GRS the following monthly fees:
a. Basic Service Fee: The Basic Service Fee will be *****.
b. Bulk Transaction Processing. Bulk Transaction Processing
Fees will be at ***** per MID per month and subject to a ***** monthly cap. The
Bulk Transaction Processing Fees are for loading transaction files into the GRS
TIRS database. The transaction files can be from acquiring institutions,
processors or direct send merchants. The fee covers all MID's contained in each
of these transaction files
c. Basic Transaction Processing. Scanning all inbound
transactions loaded to the GRS TIRS database for merchants that are registered
to ValueStar. Each tier is calculated then added to the next tier up to the
monthly cap.
Transaction Ranges Cost Per Transaction
------------------ --------------------
***** *****
***** *****
***** *****
d. PQT/AQT Processing. Identifies potentially qualified
transactions (PQT) for Members that are registered in the ValueStar program. The
PQT/AQT Processing shall also apply the specific "program(s)" if any, to the
transaction to award a rebate to the Member, assign fees to ValueStar, merchant
sponsor or member sponsor. In doing so, the PQT is turned into a Actual
Qualified Transaction (AQT).
Transaction Ranges Cost Per Transaction
------------------ --------------------
***** *****
***** *****
***** *****
***** *****
***** *****
***** *****
* PORTIONS OF THIS EXHIBIT DENOTED HEREIN BY ***** HAVE BEEN OMITTED (BASED UPON
A REQUEST FOR CONFIDENTIAL TREATMENT) AND HAVE BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2.
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3. Technical Support, Programming and Product Development. If requested
by ValueStar, GRS' hourly fees for Additional Services including programming,
product development and technical support are as follows:
o Technical Support ***** per hour
o Programmer ***** per hour
o Senior Programmer/Analyst ***** per hour
GRS shall provide customer service and technical support to
ValueStar in connection with the Services during GRS' normal customer service
hours which are currently 6:00 a.m. to 6:00 p.m. (MST) Monday - Friday and 9:00
a.m. to 4:00 p.m. (MST) Saturday, Sunday and holidays. In all cases, GRS shall
respond to ValueStar's customer services inquiries within twenty-four (24
hours).
4. Intentionally Omitted.
5. Pass-through Fees. All incremental communication costs and expenses
incurred by GRS in connection with retrieving data from ValueStar or other
designated sources (long distance phone charges and other charges approved by
ValueStar in writing) as well as Bank ACH Fees, overnight courier expenses, and
reasonable travel, meals and lodging will be invoiced to and paid by ValueStar
on a monthly basis.
6. Monthly Minimum Billing. Should the totals of the Monthly Basic
Service Fee, Bulk Transaction Processing Fees, Basic Transaction Processing Fees
and PQT/AQT Processing Fees be not equal to or greater than the monthly minimum
then the monthly minimum billing would be billed. Commencing with the System
Start Date, the monthly minimum billing under this Agreement will be ***** plus
any Pass-through Fees as listed above.
7. Fee Adjustment. Subject to a ***** annual cap (or the most recent
increase in the U.S. All Urban Consumer Price Index, whichever is less) and GRS
providing ValueStar with one hundred twenty (120) days prior written notice, GRS
reserves the right to adjust any Fees to reflect current market pricing
annually, during any Renewal Term.
8. Payment. All Services provided pursuant to this Agreement will be
invoiced and paid for on a monthly basis. All invoices shall be due in full
within thirty (30) days from the statement date. All past due payments will bear
interest at the rate of one and one-half percent (1 1/2%) per month.
* PORTIONS OF THIS EXHIBIT DENOTED HEREIN BY ***** HAVE BEEN OMITTED (BASED UPON
A REQUEST FOR CONFIDENTIAL TREATMENT) AND HAVE BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2.
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ADDENDUM "C"
GENERAL TERMS AND CONDITIONS
1. Defined Terms. Capitalized terms not otherwise defined in this
Addendum "C" shall have the meanings ascribed to them elsewhere in the
Agreement.
2. Binding Effect. The following General Terms and Conditions
constitute an integral part of this Agreement and shall be binding upon GRS and
ValueStar.
3. GRS Warranty, Indemnification and Liability Limitation.
(a) GRS Warranty. GRS represents and warrants to ValueStar
that GRS owns and has the right to use the Software and has obtained all
appropriate licenses to the Third-Party Software in connection with providing
the Services to ValueStar. GRS further warrants that the Application System
will, subject to normal maintenance and repair requirements, be capable of
providing all Services in accordance with this Agreement If the System fails to
perform in accordance with this Agreement, GRS shall undertake to promptly
repair the System at no cost to ValueStar within 15 days.
(b) GRS Indemnification. GRS shall, at its expense, defend and
hold ValueStar harmless from any action to the extent such action is based on a
claim that the Software infringes a United States patent, trademark, copyright
or trade secret and GRS shall indemnify ValueStar for all damages, liabilities
and costs directly related to such an infringement claim. ValueStar shall give
GRS prompt written notice of any indemnifiable action or claim and GRS shall
have primary control of the defense, negotiation, compromise or settlement of
such claim and ValueStar shall cooperate in the defense of such claim(s) at GRS'
expense. In the case of an infringement or alleged infringement, GRS shall
further have the right at its expense to: (i) procure the right to continue
using the infringing item; or (ii) replace or modify the product or service so
that it becomes non-infringing. The preceding provisions of this Paragraph 3(b)
describe GRS' entire liability with respect to infringements of any trademarks,
copyrights or trade secrets by the Software or any related documentation.
(c) WARRANTY DISCLAIMERS. EXCEPT FOR THE EXPRESS WARRANTY SET
FORTH IN PARAGRAPH 3(a) ABOVE, GRS MAKES NO WARRANTIES TO VALUESTAR OR ANY OTHER
PARTY REGARDING THE SERVICES AND THE APPLICATION SYSTEM AND HEREBY DISCLAIMS ANY
AND ALL IMPLIED WARRANTIES INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. WITHOUT LIMITING THE
FOREGOING, GRS DOES NOT MAKE AND DISCLAIMS ANY WARRANTY THAT THE SERVICES WILL
SATISFY VALUESTAR'S BUSINESS REQUIREMENTS OR ENSURE THAT VALUESTAR OR ANY OTHER
PARTY WILL NOT INCUR LIABILITY OR LOSS IN CONNECTION WITH ANY CREDIT/DEBIT OR
PAYMENT CARD TRANSACTIONS.
(d) Limitation of Liability. Notwithstanding any other
provision of this Agreement, GRS and ValueStar expressly covenant and agree that
(except for GRS' indemnification liability described in Paragraph 3(b) of this
Addendum "B" and GRS' intentional acts) in no event will GRS' maximum aggregate
liability for any loss, injury or damages, whether based in contract, warranty,
tort, strict product liability or on any other basis, exceed one hundred percent
(100%) of the total Fees paid by ValueStar to GRS with respect to this
Agreement. The provisions of this Paragraph 3(d) allocate the risk of a failure
or defect of the Software or any product or Service provided by GRS pursuant to
this Agreement or any other agreement between or among ValueStar and GRS and are
an essential element of the Agreement between GRS and ValueStar. GRS and
ValueStar acknowledge and agree that the provisions of this Paragraph 3(d) are
the product and result of arms-length negotiation in a commercial setting by
sophisticated business concerns of equal bargaining strength and position. GRS
and ValueStar acknowledge and agree that the Services provided in accordance
with this Agreement shall be limited to obtaining, receiving and accurately
processing and reformatting data relating to payment card transactions and
providing information and reports to ValueStar and ValueStar's Customers
(defined below). The Services provided pursuant to this Agreement shall not
include any analysis or evaluation of the information or reports which shall be
the sole and exclusive responsibility of ValueStar. Notwithstanding the
foregoing, neither party shall have liability for any failure or delay resulting
from any governmental action, fire, flood, insurrection, earthquake, power
failure, riot, explosion, embargo, strike (whether legal or illegal), labor or
material shortage, transportation interruption of any kind, work slowdown or any
other action beyond the control of the affected party effecting production or
delivery of the Services in any manner (collectively, a "force majuere").
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4. Exclusive Agreement. GRS and ValueStar acknowledge and agree that
all or portions of the Services and the information and reports generated with
respect to the Services will be provided directly or otherwise made available to
or used by ValueStar's designated parties and customers (Members and Merchants)
(collectively, "ValueStar's Customers"). Notwithstanding the foregoing: (i)
nothing contained in this Agreement may be construed by any party as creating or
evidencing a contractual relationship between GRS and any of ValueStar's
Customers nor shall any of ValueStar's Customers be third party beneficiaries to
this Agreement; and (ii) ValueStar shall be and remain solely and exclusively
responsible for the payment of all Fees under this Agreement.
5. Title. ValueStar shall have sole ownership of, and title to, the
Member Data Base, the Merchant Data Base, the PQT Databases and all
administrative reports prepared by GRS and furnished to ValueStar, its
designees, Members and Merchants pursuant to this Agreement (collectively, the
"ValueStar Data"). GRS shall, at all times, maintain sole and complete ownership
of the Software and the Application System and nothing contained in this
Agreement shall be construed as creating a license or any other rights on the
part of ValueStar or any of ValueStar's Customers in or to the Software or the
Application System. With respect to any raw transactional data feeds that GRS
receives from processors or acquiring institutions on behalf of ValueStar, the
ownership and control of that data shall be subject to separate contractual
agreements that may exist from time to time between or among GRS, ValueStar and
the processors and/or acquiring institution. GRS will use the ValueStar Data for
the exclusive purpose of providing the Services to ValueStar.
6. Use of Data, Privacy and Misuse. Both parties recognize that both
(a) the laws and regulations affecting "privacy" on the internet and (b)
government and consumer attitudes about such issues are in a continual state of
evolution. As a result, although both parties believe that the present agreement
is in compliance with all laws, rules and regulations, each party agrees to
cooperate in good faith to modify this agreement as is necessary to meet revised
interpretations of current law (as well as modifications of current law) and the
intent of this agreement and comply with all then current and applicable law,
rules, and regulations. If a change reasonably necessary to comply with the then
current laws, rules and regulations (or interpretations thereof), is not made
within 60 days of ValueStar's request, or if such change would have a material
adverse effect on ValueStar's operation, cost of supplying data, or other
benefit ValueStar could reasonably anticipate from this agreement, then
ValueStar may terminate the agreement effective as of the date the change should
have been made in order to cause the agreement to comply with applicable law and
interpretation.Each party acknowledges that the other has expended substantial
time, effort and funds to compile its, programming, software, database and other
information (collectively "Database") and that all information contained in such
Database is and will continue to be the exclusive property of the party
maintaining it. Nothing contained in this Agreement shall be deemed to convey to
the other, any third party processor or other party any right, title or
interest, including any patent, copyright or other proprietary right, in or to
the Database or any part thereof beyond that which is specifically granted
herein, and then only subject to the restrictions contained herein. Except as
specifically provided herein, neither party will use, or permit its employees,
agents, contractors or subcontractors to use, the Database, trademarks, service
marks, logos, names, or any other proprietary designations of the other or its
affiliates, whether registered or unregistered, without the other's prior
written consent. Neither party shall reverse engineer any of the Database.
Neither Party shall divulge the criteria used for any program to any person,
except employees and agents who have a need to know such criteria. Each party
will retain all right, title and interest in and to its trademarks, service
marks and trade names worldwide, including any goodwill associated therewith,
subject to the limited licenses granted to the other hereunder, and neither
party shall take any action that is inconsistent with the other's ownership
thereof. Each party hereby grants to the other a non-exclusive, limited license
to use its trademarks, service marks or trade names only as specifically
described in this Agreement. All such use shall be in accordance with each
party's reasonable policies regarding advertising and trademark usage as
established from time to time. Upon the expiration or termination of this
Agreement, each party will cease using the Database, trademarks, service marks
and/or trade names of the other. Each party is aware of the privacy policies of
the other, as they are, from time to time, displayed on the party's webpage, and
agrees to abide by them as to the Database as if the other party's privacy
policy was their own.
7. ValueStar Obligations. During the Term of this Agreement, and as a
prerequisite to GRS' obligation to provide Services, ValueStar shall provide GRS
(or ensure that GRS has access to) all payment card transactional information,
service criteria or informational data of ValueStar, its Merchants and Members
(as set-forth in the Specification) reasonably required by GRS to provide the
Services including, but not limited to, the ValueStar Transaction Files.
ValueStar shall indemnify, defend and hold GRS harmless for, from and against
any claim made against GRS by any of ValueStar's Customers with respect to or
arising out of the Services rendered pursuant to this Agreement. Subject to
ValueStar's obligation to make the minimum monthly payments described in
Paragraph 6 of Addendum "B", ValueStar shall have no obligation to use the
Application System.
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8. Entire Agreement; Modification. This Agreement represents the entire
agreement of the parties with respect to the subject matter of this Agreement
and supersedes all other agreements, whether written or oral and any
representations made by either of the parties to the other. This Agreement may
not be changed, modified or rescinded except in writing, signed by both parties
to this Agreement. Notwithstanding the foregoing, the parties acknowledge and
agree that Confidentiality Agreement between GRS and ValueStar dated May 22,
2000, shall remain in full force and effect after the execution of this
Agreement and the ValueStar Data shall become Confidential Information for all
purposes under the referenced Confidentiality Agreement.
9. Rights to Source Code. In the event GRS (or any successor in
interest to GRS with respect to the Application System) ceases or discontinues
operations or, without cause, refuses to provide the Services to ValueStar as
required by this Agreement or this Agreement is terminated by ValueStar as a
result of a material breach by GRS, ValueStar will, subject to the restrictions
on use, duplication and dissemination set forth in this Agreement, be entitled
to immediately receive the source code for the Software and any other supporting
documentation relating the Application System reasonably required by ValueStar
to continue to operate a similar system. For the purpose of this Paragraph 9,
the term "source code" will mean a human readable program for the most current
release(s) of the Software utilized by GRS in connection with providing the
Services, including all updates and enhancements delivered during the Term. Any
time during the Term, ValueStar shall have the option to establish an escrow to
hold the source code subject to appropriate terms and conditions reasonably
agreed to by both parties. All costs and expenses associated with the
establishment of the escrow, including, without limitation, any escrow fees and
any additional fees or expense incurred by GRS in connection with creating or
maintaining source code within the escrow shall be born exclusively by
ValueStar.
10. Intentionally Omitted.
11. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the laws of the substantive laws of the State of Arizona. If
suit is brought or an attorney is retained by either party to this Agreement to
enforce the terms of this Agreement, the prevailing party shall be entitled to
recover, in addition to any other remedy, reimbursement for actual reasonable
attorney's fees, court costs, reasonable costs of investigation and other
reasonable related expenses incurred in connection with such action. The parties
consent and agree to submit to the venue and jurisdiction of the United States
District Court for the District of Arizona. Except as specifically provided
below, this Agreement and the rights of ValueStar under this Agreement shall not
be assignable (directly or indirectly) except with the written consent of GRS
not unreasonably withheld. Notwithstanding the prior sentence, ValueStar may,
upon providing written notice of such assignment to GRS, assign its rights and
obligations under this Agreement to a separate entity if it also transfers its
entire ownership of and responsibility for the Program to the same entity. GRS
may, upon providing written notice of such assignment to ValueStar, assign its
rights under this Agreement to a successor entity that, by purchase, merger or
otherwise, takes over and assumes responsibility for GRS' entire bank card
information and processing business including GRS' obligations under this
Agreement.
12. Performance Standards. Except as otherwise specified in this
Agreement, GRS will deliver all Services required under this Agreement within
twenty four (24) hours of receiving all required data inputs.
13. Records. GRS shall keep complete and accurate records relating to
the Fees charged to ValueStar in connection with this Agreement for a period of
two (2) years following the applicable billing period(s). ValueStar shall have
the right, at its own cost and expense, to audit GRS' billing records from time
to time during the Term, but no more than once every six (6) months (the
"ValueStar Audit"). Any ValueStar Audit will be conducted by a Certified Public
Accountant in a manner so as not to unreasonably interfere with GRS' normal
day-to-day business operations and upon at least ten (10) business days' prior
notice. If any ValueStar Audit demonstrates that GRS overcharged ValueStar by
more than five percent (5%) during the audit period, GRS shall, within
forty-five (45) days following the conclusion of the audit, reimburse ValueStar
for the full amount overcharged, together with the reasonable costs of such
audit. If less than 5%, GRS will reimburse the overpayment amount.
14. Mutual Representations and Warranties. ValueStar and GRS represent
and Warrant to each other that: (i) each party shall operate in compliance with
all applicable laws and regulations, except where failure to do so would have no
material affect on the other party; (ii) each party is a corporation/limited
liability company duly organized, validly existing and in good standing under
the laws of the State of its formation; (iii) each party has full power and
authority to enter into this Agreement and to perform the obligations imposed by
this Agreement; (iv) each party has obtained all permits, licenses and other
governmental authorizations and approvals required to perform its obligations
under this Agreement; (v) this Agreement has been duly and validly executed and
delivered and constitutes a legal, valid and binding obligation, enforceable in
accordance with its terms; (vi) the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not, with or without the giving of notice, the lapse of time, or
both, conflict with or violate (A) any provisions of law, rule or regulation,
(B) any order, judgement or decree applicable or binding upon assets or
properties,
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(C) any provision of the by-laws or certificate of formation, or (D) any
agreement or other instrument applicable or binding upon assets or properties;
(vii) no consent, approval or authorization of, or exemption by, or filing with,
any governmental authority or any third party is required to be obtained or made
in connection with the execution, delivery or performance of this Agreement or
the taking of any other action contemplated by this Agreement; (viii) there is
no pending or, to the best of each parties' knowledge, threatened claim, action
or proceeding against it with respect to the execution, delivery or consummation
of this Agreement or with respect to its trademarks, and, to the best of its
knowledge, there is no basis for such claim, action or proceeding.
15. Contract Disclosure. GRS is specifically denied permission to
disclose that ValueStar is a client or that ValueStar in any way uses GRS'
services. Without limiting the foregoing, GRS may not include ValueStar's name,
logo, trademark or description of the ValueStar business or business model in
any (i) GRS client reference list, (ii) GRS press release, (iii) discussion with
members of the press, and (iv) discussion with persons outside GRS. The
foregoing notwithstanding, (a) GRS may, pursuant to court order, disclose the
relationship if the disclosure is in response to a valid order by a court or
other governmental body, is otherwise required by law, or is necessary to
establish the rights of either party under this Agreement; and (b) GRS may
disclose the relationship with the prior written consent of ValueStar, given by
the CEO, President, Chairman of the Board, or General Counsel of ValueStar,
which consent may be withheld in ValueStar's sole discretion.
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