MEMBER SERVICE PROVIDER SALES AND SERVICE
CREDIT CARD PROCESSING AGREEMENT
THIS MEMBER SERVICE PROVIDER CREDIT CARD PROCESSING AGREEMENT (this
"Agreement') is made and entered into 1 day of January, 1997. by and among NOVA
Information Systems, Inc.,. a Georgia corporation with its principal place of
business at Xxx Xxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, ("NOVA!'),
REGIONS BANK, a principal member of VISA U.S.A.,, Inc., and Mastercard
International Incorporated and a bank chartered under the laws of the State of
Alabama with its principal place of business at 00 Xxxxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxxxx 00000, ("Member") and U.S. Wireless Data, Inc. a Colorado
corporation with its principal place of business at 0000 Xxxxxxx Xxx., Xxxx
Xxxxxx, XX 94941("MSP").
PURPOSE OF AGREEMENT; The purpose of this agreement is to set forth the
terms and conditions under which MSP shall refer to NOVA and Member prospective
merchants meeting the qualifications of NOVA and Member for the purpose of
providing to such merchants credit card processing services, and to set forth
the referral fees NOVA and Member shall, from time to time. pay to MSP for such
referrals and other services, as described herein.
NOW, THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable consideration, the receipt and sufficiency of which
hereby is acknowledged and intending to be legally bound hereby, MSP, NOVA and
Member agree as follows;
DEFINITIONS As used in this Agreement, 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):
A. "Acceptable merchant' shall mm a merchant who does not performing
the services or sales described in Schedule A-Exhibit 1, and who is
acceptable to NOVA 'and Member, as determined in their sole
discretion, based upon a credit card of the merchant.
B. "Assessment Fee' shall mean the fee that is collected from a
Referred Merchant on behalf of the Credit Card issuer for a
Transaction-
C. "Cardholder, shall mean (i) the person in whose name a Credit Card
has been issued, and shall also mean (ii) any person who possesses and
uses a Credit Card and who purports to be the person in whose name the
Credit Card was issued or whose signature appears on the Credit Card
as an authorized user,
D. "Cause" shall mean the occurrence of any one or more of the
following- (i) any failure by MSP to comply in all material respects
with the provisions of this Agreement; (ii) any failure by MSP to
follow the credit policies and procedures established by NOVA and
Member from time to time; (iii) any failure by MSP to comply with the
Rules and all applicable laws and regulatory requirements, whether
Federal or state, (iv) any intentional misrepresentation by an
employee, officer or director of MSP in connection with the referral
of a prospective merchant or an application by a prospective merchant
for services hereunder', (v) any failure by MSP to advise NOVA and
Member of adverse or material changes in any Merchant's financial
condition of which MSP becomes aware during the Merchant's association
with NOVA. and member; (vi) the financial insolvency or bankruptcy of
MSP; (vii) the occurrence of any event or any action by MSP which NOVA
or Member determine in good faith to constitute unsound business
practices or which might impose a risk of financial loss to NOVA or
Member; and (viii) any failure by MSP to provide appropriate sales
agent support (including without limitation merchant application
review, site inspection, monthly reporting, terminal support,
commission payment, etc.),
E. "Chargeback" shall mean a Transaction charged back by a Cardholder
pursuant to the Rules.
F. "Credit-Card" shall mean a (i) VISA card or other card bearing the
symbol(s) of VISA U.S.A. Inc. or VISA International Inc. (including
VISA Gold cards) or (ii) a MasterCard card or other card bearing the
symbol(s) of MasterCard International Incorporated (including
MasterCard Gold cards).
G. "Credit Card Associations" shall mean VISA U.S.A. Inc., VISA
International Inc., MasterCard International Incorporated and any
successor organization or association.
H. "Interchange Fee" shall mean the charge levied and collected in
accordance with the Rules with respect to Credit Card transactions.
I. "MasterCard" shall mean MasterCard International, Incorporated (a
Delaware corporation).
J. "Member" shall mean Regions Bank (or a successor financial
institution and principal member of VISA and MasterCard to whom the
rights and obligations of Member hereunder may be assigned by Regions
Bank).
K. "Merchant Agreement" shall mean a written contractual agreement (in
a form approved by NOVA and Member and unaltered) executed among NOVA,
Member and a Referred Merchant, as referenced in Section 2.D hereof,
for services related to Credit Cards and Transactions. The initial
form of Merchant Agreement shall be the form attached hereto as
Exhibit 1; provided, however, the form of Merchant Agreement may be
changed by NOVA and Member in their sole discretion.
L. "Merchant Services" shall mean the credit card processing services
offered or provided by NOVA and Member (or their designees) pursuant
to Merchant Agreements.
M. "Merchant Operating Account" shall mean a deposit account
maintained by a Referred Merchant at a FDIC-insured financial
institution which is acceptable to NOVA and Member and is a member of
Automated Clearing House ("ACH")').
N. "Referred Merchant" shall mean any seller of goods, services, or
both, referred to NOVA and Member by MSP, and which is a party to a
Merchant Agreement. During the term and subject to the provisions of
this Agreement, MSP shall provide to all Referred Merchants the
services described in Section 2. H below.
0. "Rules" shall mean the bylaws, rules, regulations and procedures
issued by a Credit Card Association or other card issuer/licensor
similar to MasterCard or VISA, as such bylaws, rules, regulations and
procedures may be amended or supplemented from time to time.
P. "Sales Draft" shall mean a charge form or draft evidencing the
purchase by a Cardholder of goods or services at a Referred Merchant
location, by use of a Credit Card.
Q. "Transaction" shall mean the purchase or credit by a Cardholder of
goods or services at a Referred Merchant's location, by use of a
Credit Card.
R. "VISA" shall mean VISA U.S.A. Inc. (a Delaware corporation).
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2. MERCHANTS AND MERCHANT AGREEMENTS
A. Recruitment of Merchants. In accordance with the policies and
procedures set forth on Schedule ------------------------ A
hereto, MSP shall use its best efforts to locate, investigate and
refer merchants MSP believes to be likely candidates for Credit
Card processing relationships with NOVA and Member. MSP will
market the Merchant Services offered by NOVA and Member at its
own expense, in accordance with all Rules relating to third party
service providers and in accordance with all policies and
procedures of Member and NOVA (including without limitation the
pricing terms for Referred Merchants) as such policies and
procedures may be amended from time to time. Merchants referred
to NOVA and Member by MSP which enter into a Merchant Agreement
will have a direct business relationship with NOVA and Member,
and will be subject to the terms of the applicable Merchant
Agreement entered into by and among NOVA, Member and Merchant.
MSP shall not be a @ to any Merchant Agreement and MSP shall have
no additional obligations imposed upon it by any Merchant
Agreement.
B. Trademarks and Logos. MSP will not use the name, trademarks,
service marks or logos of NOVA or -------------------- Member
without the express prior written consent of such party. MSP
acknowledges and agrees that MasterCard and VISA are the sole and
exclusive owners of these respective trademarks and service
marks, and that MSP will not contest the ownership of such marks.
Additionally, MSP will use the VISA and MasterCard trademarks and
service marks only in accordance with the Rules and after prior
written approval of NOVA and Member (and the Credit Card
Associations, if required). MSP acknowledges and agrees that the
Credit Card Associations may at any time immediately and without
advance notice prohibit MSP from using the marks of the Credit
Card Association for any reason. Member must be prominently
identified by name and city on any program materials describing
the Merchant Services. MSP shall have no authority to permit use
of the VISA or MasterCard program marks by any third party. Any
solicitation material used by MSP must clearly disclose that the
merchant agreement is by and among NOVA, Member and the
individual merchant.
C. Approval of Merchants. Member, or NOVA acting as its agent, shall
review all applications submitted by prospective merchants
referred by MSP. Member and NOVA each reserve the right in their
sole discretion to refuse to sign a Merchant Agreement with any
merchant referred by MSP.
D. Merchant Agreements. Merchant Agreements shall be on forms
provided by NOVA and Member and shall define the terms upon which
NOVA and Member will provide Merchant Services to Merchant.
E. Merchant Reserves. Upon request MSP will assist NOVA and Member
in coordinating the implementation of such safeguards as NOVA or
Member determine is prudent or necessary to create or require,
with respect to any Referred Merchant, reserves, holdbacks,
deposits or other safeguards against merchant losses. Without
limitation as to additional or different safeguards, NOVA or
Member may require a Referred Merchant to pay up to 100% of the
funds deposited by a Referred Merchant for up to six months or
more.
F. Services Provided by NOVA. NOVA shall provide the following
services on behalf of Member, to MSP and the Referred Merchants:
i. NOVA Network Authorization 24 x 7 x 365 toll-free Network
Help Desk;
ii. Merchant Enrollment Service, including new merchant
set-up and administration of credit policy;
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iii. Chargeback and Retrieval Processing;
iv. Collections and Fraud Monitoring Service; and
v. Merchant Settlement Service, including Referred Merchant
statement processing and ACH file preparation (provided,
however, Member shall be responsible for effecting all
settlements of Transactions).
G. Optional Services Provided by NOVA. Upon the written election of MSP, NOVA
shall also provide and charge for (in accordance with Schedule B) any one or
more of the following services to the Referred Merchants:
i. Referred Merchant Set-Up Service, including new merchant
set-up kit, telephone training and re-programming
assistance;
ii. Equipment Repair Service, including emergency swap-outs
and deployment and repair service;
iii. Merchant Supply Fulfillment Service and equipment
fulfillment service;
iv. 24 x 7 x 365 Customer Support, including full Point of
Sale ("POS") Help Desk and Settlement Support;
V. Training Support, including MSP sales representative
training, product and service overviews and competitive
selling tips; and
vi. Collateral and Marketing Materials, including merchant
user guides, newsletters, product brochures and equipment
templates.
H. Services Provided by MSP. In addition to the duties of MSP described
elsewhere in this Agreement, MSP shall provide the following services
on behalf of NOVA and Member to the Referred Merchants:
Training. MSP shall provide to each Referred Merchant necessary training in the
procedures and Rules applicable to the acceptance of Credit Cards, the operation
of terminal equipment and the use of NOVA products and services. MSP shall
initially train the Referred Merchants, including, when appropriate,
distribution of a merchant set-up kit. MSP shall also train new employees of the
Referred Merchant as necessary.
ii. Merchant Support. MSP shall provide reasonable ongoing support to
ensure Referred Merchants are continually apprised of their customer
service requirements and to remedy any customer service problems
encountered by such Referred Merchants. MSP shall supervise such personnel
it may engage as employees or agents in activities hereunder. The
responsibility for all such personnel it may be that of MSP only, including
the responsibility of assuring full compliance by all such personnel with
the terms and provisions of this Agreement.
I. Excluded Types of Merchants. MSP agrees that it or its designee
will not market the Merchant Services to any existing NOVA or Member
merchant, any existing merchant of a NOVA agent or any customer of
NOVA. MSP also agrees to follow the guidelines set forth on Schedule A
with respect to soliciting and referring merchants. If MSP has any
uncertainty as to whether a particular merchant is covered by these
restrictions or by
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Schedule A, MSP will discuss the matter in good faith with NOVA prior
to proposing that such Merchant enter into a Merchant Agreement with
NOVA and Member.
J. Adverse Information. During the term of this Agreement, MSP agrees to
notify NOVA and Member promptly in writing if MSP becomes aware of any
information about the insolvency or bankruptcy (voluntary or
involuntary) or change in ownership or business of any Referred
Merchant, or if MSP becomes aware of any other significant adverse
information about noncompliance with the Rules by a Referred Merchant,
or any information indicating that any Referred Merchant's acceptance
of Credit Cards is other than the bona fide sale of products or
services by such Referred Merchant.
K. Advertising/Sales Materials. All advertising and/or sales materials
used by MSP shall be in compliance with the Rules. NOVA and Member
shall give MSP notice of any noncompliance that comes to the attention
of such party.
L. Information. MSP shall distribute to its sales representatives, in a
timely fashion, changes ----------- in operating mode, and Rules
received from NOVA or Member, that would affect the manner in which
the Merchant Services are marketed by such representatives. MSP shall
keep accurate records with respect to Referred Merchants' inquiries,
orders, transactions and contacts which MSP makes pursuant to this
Agreement. On behalf of NOVA and Member, MSP will request and use
reasonable efforts to obtain and provide latest fiscal year business
balance sheet and profit and loss statement on Referred Merchants and
personal financial statements on principals, if requested by NOVA or
Member.
3. COMPLIANCE WITH RULES
A. Registration. In connection with the services provided by MSP
under this Agreement, MSP has registered and executed all
applicable documents and agreements with VISA and MasterCard
and is in full compliance with the Rules. MSP further agrees
to the following:
i. maintain its registration with VISA and MasterCard and
fully comply with the terms of any documents and agreements
executed therewith;
ii. comply with all reporting requirements of MasterCard and
VISA; and
iii. promptly give written notice to NOVA and Member of the
identity and location of all sales locations of MSP. MSP
acknowledges and agrees it may not delegate any of its
rights or obligations hereunder to any other person or
entity, except pursuant to a valid assignment complying with
the requirements set forth in Section 9 below
B. Compliance with MasterCard Rules. In accordance with the
MasterCard Rules regarding member service providers, MSP
acknowledges and agrees as follows:
i. MSP understands and agrees to comply in all respects with
the MasterCard Rules (including without limitation the Rules
regarding member service providers);
ii. MSP acknowledges and agrees that MasterCard has the
right to enforce any provision of the MasterCard Rules and
to prohibit any conduct by MSP that creates a risk of injury
to MasterCard or that may adversely affect the integrity of
MasterCard's systems, information or both. MSP agrees to
refrain from taking any action that would have the effect of
interfering with or preventing an exercise of such right by
MasterCard; and
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in the event of any inconsistency between any provision of
this Agreement and the MasterCard Rules, the MasterCard
Rules will be afforded precedence and shall apply.
4. CONDENSATION TO MSP
A. Processing Rates and Fees. NOVA, acting on its own behalf and as
Member's agent, shall pay to ----------------- MSP as fall
consideration and compensation for the performance of all MSP's
duties and obligations under this Agreement, any Referred
Merchant discount revenues and/or fees collected in excess of
NOVA's fees and other charges as set forth on Schedule B. Such
payments shall be made within thirty (30) days following the end
of each month; provided, however, NOVA shall use its best efforts
to make such payments within fifteen (15) days following the end
of each month. For example, amounts payable to MSP for Referred
Merchant revenues collected for March Transactions shall be paid
to MSP by April 30, but NOVA will attempt to pay such revenues by
April 15).
B. Pass-Through of Certain Fees. NOVA and Member reserve the right
to pass through to MSP certain ----------------------------- fees
or penalties imposed by any Credit Card Association as a result
of the activities, acts or omissions of MSP. Additionally, MSP
agrees to pay promptly any fees or penalties imposed by the
Credit Card Associations with respect to MSP's registration as a
service provider for Member. MSP acknowledges that NOVA and
Member, in their discretion and in accordance with the terms of
the Merchant Agreements, may pass through to Referred Merchants
any fees or expenses related to implementing changes to
software/hardware requirements deemed necessary by the Credit
Card Associations or other service providers.
5. DUE CARE AND LIABILITY
MSP hereby agrees to indemnify and hold NOVA, Member, the Credit Card
Associations, the Referred Merchants and the members of the Credit Card
Associations harmless from and against any claim, demand, loss, financial or
otherwise, damage, liability or cost (including reasonable legal fees and
expenses), caused by or in any way arising from: (i) any failure by MSP to fully
comply with the Rules and all other rules, regulations, policies and procedures
of NOVA, Member, MasterCard, VISA and any other similar Credit Card licensor;
(ii) any breach or default by MSP of this Agreement or any other agreement
between MSP and (a) NOVA, (b) Member or (c) any Referred merchant; (iii) any
negligent or wrongful act of MSP in performing or failing to perform the
obligations hereunder; or (iv) any termination of this Agreement pursuant to
Section 8 hereunder. The obligations of MSP hereunder are not intended to cover
typical credit losses (including chargebacks) incurred by NOVA or Member as a
result of Referred Merchants' refusal or inability to pay, unless such credit
losses are incurred by NOVA or Member as a result of any act or omission or MSP
described in (i) - (iv) above.
6. GENERAL
A. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Georgia.
B. Entire Agreement. All Schedules and Exhibits attached to this
Agreement and the Rules arc hereby made a part of this Agreement
for all purposes. This Agreement represents the entire
understanding among NOVA, MSP and Member with respect to the
matters contained herein and, except as otherwise provided in
this Agreement, it may be amended only by an instrument in
writing signed by each of the parties hereto.
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C. No Partnership or Agency. Nothing in this Agreement shall be
deemed to constitute a partnership or joint venture between the
parties hereto or be deemed to constitute MSP as an agent for
NOVA or Member for any purpose whatsoever. MSP is an independent
contractor and not an employee of NOVA or Member.
D. Third Party Rights. This Agreement is solely for the benefit of
the parties hereto and nothing herein, express or implied, shall
be deemed to be for the benefit of any third party or create any
third party rights or standing to xxx.
E. Notices. Any notice required or permitted under this Agreement
shall be in writing and may be delivered by personal service
or by U.S. certified mail, return receipt requested and
postage prepaid, to the addresses of the parties set forth
below, or such other addresses as may be provided by written
notice to the other parties in accordance with the terms of
this notice provisions. Any such notice shall be effective
upon the earlier of (i) five days after deposit in the mail
properly addressed and postage prepaid, or (ii) actual
receipt.
If to NOVA: NOVA Information Systems, Inc.
Xxx Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn.: Xxxxx X. Xxxxx, Chief Financial Officer
Facsimile No.: (000) 000-0000
With a copy to: NOVA Information Systems, Inc.
Xxx Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn.: Xxxxx X. Xxxxxx, General Counsel
Facsimile No.: (000) 000-0000
If to Member: Regions Bank
00 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
With a copy to: Xxxxxxx, Cnnn & Xxxxx
0 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Esquire
If to MSP: U.S. Wireless Data, Inc. 0000 Xxxxxxx Xxx.
XXXX Xxxxxx, XX 00000
Attention: Xxx X. Xxxxxxxxx
F. Dispute Resolution. Any controversy, dispute or claim arising out
of, or in connection with ------------------- this Agreement must
be settled by final and binding arbitration to be held in
Atlanta, Georgia in accordance with the miles of the American
Arbitration Association ("AAA"), as may be amended from time to
time (the "AAA Rules"). Judgment upon award rendered by the
arbitrators may be entered in any court: (i) having jurisdiction
thereof, (ii) having jurisdiction over the party against whom
enforcement thereof is sought,- or (iii) having jurisdiction over
any such party's assets. The procedures and law applicable during
the arbitration of any controversy, dispute or claim will be both
the AAA Rules and the internal substantive laws of the State of
Georgia (excluding, and without regard to, its or any other
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jurisdiction's rules concerning any conflict of laws). In any
arbitration pursuant to this Agreement, the award of decision
must be rendered by at least a majority of the members of an
arbitration panel consisting of three (3) members, one of whom
will be appointed by each of the parties hereto. All arbitrators
must be persons who are not employees, agents or former employees
or agents of any party. In the event that any of the parties
hereto fails to appoint an arbitrator within thirty (30) days
after submission of the dispute to arbitration, such arbitrator
will be appointed by the AAA in accordance with the AAA Rules.
G. Force Majeure. Neither party shall be liable to the other for
any failure or delay in its performance of this Agreement in
accordance with its terms if such failure or delay arises out
of causes beyond the control and without the fault or
negligence of such party.
H. Waiver. Any waiver or delay by any party hereto in asserting
or exercising any right, shall not constitute a waiver of any
further or other rights of said party. If any part of this
Agreement shall be held to be invalid, illegal or
unenforceable, the validity, legality or enforceability of the
remainder of the Agreement shall not in any way be affected or
impaired thereby.
1. Attorney's Fees. In the event any party hereto is determined,
in connection with a final and binding arbitration pursuant to
Section 6.F above, to have breached this Agreement, then the
non-defaulting party shall be entitled to recover expenses
incurred in enforcing the provisions of this Agreement,
including reasonable attorneys' fees and costs.
J. Severability, If any provision of this Agreement is found
illegal, invalid or unenforceable, such finding will not
affect any other provision hereunder. This Agreement shall be
deemed modified to the extent necessary to render enforceable
the provisions hereunder, and to comply with the Rules.
7. TERM OF AGREEMENT The term of this Agreement shall be for a period of
three (3) years commencing from the date of this Agreement. Thereafter,
this Agreement shall renew automatically for additional successive
one-year terms, unless any party hereto provides the other parties
written notice of intent not to renew this Agreement at least ninety
(90) days prior to the expiration of the then current term. The terms
of this Agreement shall remain in force with respect to all
Transactions processed hereunder and all Chargebacks, fees and
liabilities relative thereto.
8. TERMINATION
A. Termination for Cause. Any party hereto may terminate this
Agreement upon a material default ----------- hereunder by
another party if such default is not cured within (30) days of
receipt of written notice thereof from the non-breaching party.
NOVA or Member may also terminate this Agreement at any time for
Cause. This Agreement shall terminate automatically upon the
occurrence of either of the following: (i) the termination of
Member's MasterCard and VISA licenses and membership; (ii) the
termination of the NOVA/Member Agreement (provided, NOVA will
attempt to give, MSP at least sixty (60) days notice prior to
termination); or (iii) the termination by MasterCard or VISA of
MSP's registration as a third party service provider for Member.
B. Other Termination. NOVA or Member may, at its option,
terminate this Agreement immediately without notice to MSP in
the event of any one of the following events:
i. the filing of a bankruptcy petition, insolvency,
inability to meet its debts (in the ordinary course of
business) or dissolution of MSP;
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ii. MSP making an assignment by MSP for the benefit of its
creditors or an offer of settlement or extension to its
creditors generally;
iii, the appointment of a trustee, conservator, receiver or
similar fiduciary for MSP or for substantially all of MSP's
assets;
the ace of any material adverse change in ft nature or
conduct of the business of MSP as carried on at the date
hereof-, or
V. failure by MSP to perform its obligations under this
Agreement.
Certain Post-Termination Rights. In the event of
termination of this Agreement, NOVA and Member shall
have the right in addition to the other rights and
remedies under this Agreement and at law and in equity,
to exercise a right of set-off such funds payments
otherwise due to MSP pursuant to Section 4. A., for any
amounts due to NOVA or Member hereunder pursuant to
Section 4.B., and, in the event of termination of this
Agreement for cause, any damages suffered by NOVA or
Member hereunder and at law, then owing or which may
thereafter become owing. No termination of this
Agreement shall affect any Merchant Agreement that is
in effect as of the time of termination, After
termination, MSP agrees to cooperate in all reasonable
respects with NOVA and Member throughout the remaining
term of each Merchant Agreement, MSP agrees not to
solicit or encourage any Referred Merchant to terminate
a Merchant Agreement in force with NOVA or Member for
any man after the termination of this Agreement.
Sections 5, 6.F, 9,C and 10 shall survive termination
of @ Agreement.
Upon T@ of MSP, NOVA shall offer to enter into a
servicing only agreement following the termination of
this Agreement to enable MSP to continue servicing the
Referred Merchants and receiving fees for such
servicing responsibilities, provided this Agreement has
not been terminated for cause by NOVA or Member.
9. ASSIGNMENT This Agreement shall inure to the benefit of and be
binding upon the parties and their respective successors and
assigns. Notwithstanding the foregoing sentence, however, this
Agreement may not be assigned by MSP without the prior written
consent of NOVA and Member, and the receipt of all required
consents from the Credit Card Associations.
10, CONFIDENTIALITY - MSP, NOVA and Member each agree that it will @
in strictest confidence all information and data belonging to or
relating to the business of the other parties to this Agreement,
which is designated confidential by the @ to which such
information or data belongs or relates (including without
rotation the terms of this Agreement and information related to
Referred Merchants), and that each party will safeguard such
information and data by using the same degree of cm and
discretion that it uses with its own data that such party regard
as confidential.
Credit Card Processing Agreement
Schedule A - Credit Policy
--------------------------
INTRODUCTION
The following documentation represents the current NOVA and Member new merchant
Credit Policy. These guidelines are intended to govern the circumstances under
which new merchant applications will be approved or declined.
APPLICATION APPROVAL
The following represents the minimum review requirements for new merchant
applications generated by MSP and its representatives. These are minimum
requirements and additional information may be requested by NOVA and Member. Any
changes or exceptions to the following guidelines must be approved by NOVA and
Member. Every new merchant application submitted for approval by MSP must
include or comply with the following requirements:
The type of business on the merchant application must not appear on the
"Prohibited Products" or "Prohibited Methods of Selling" categories of the
"Restricted Merchant List" (See Exhibit 1). Certain @s of businesses that
appear in the "Restricted Business List" category of the "Restricted
Merchant List" may be considered for approval when Additional Documentation
Required for Exceptional Merchants as listed below is provided.
The new merchant application must be completed, including: type of
business; officer/owner information including ownership structure;
VISA/MasterCard volumes and average ticket; signatures of the
officers/owncrs; site survey; percentage of the Mail Order/Telephone Order
("MO/TO") volume.
A properly executed,, unaltered NOVA/Member Merchant Processing Agreement.
Execution of the Agreement should be witnessed by an authorized
representative of MSP.
A properly executed receipt for Referral Merchant funds, if applicable.
A completed debit/credit authorization form signed by an authorized
officer/owner of the merchant, together with voided check with the complete
transit and routing and demand deposit account numbers attached.
Completed site survey report which designates the correct type of business
and inventory sufficient to support the projected VISA/MasterCard sales.
The site survey report must be signed by a MSP representative or an
independent third party inspection service acceptable to NOVA.
Adequate personal information to allow NOVA and Member to perform a credit
review. A negative credit review (for example, prior or outstanding tax
liens, judgments, collection accounts, multiple slow pay accounts, etc.) or
lack of personal credit may result in the application being declined. NOTE:
At least two of the following credit bureaus must be used to provide credit
information: CBI Equifax; TRW; TransUnion; Dun & Bradstreet Report;
Acceptable Combined Terminated Merchant File inquiry.
One month current merchant statements from previous processor.
Credit Card Processing Agreement
Schedule A - Credit Policy (continued)
In cases where the disposition of the merchant application is not apparent
based on the above information, the following information may be required
by NOVA/Member:
- Audited Financial Statements,
- Corporate Tax Returns;
- Personal Tax Returns (Principals);
- Copy of Printed Sales Material;
- Copy of Return Policy;
- Copy of Articles of Incorporation or Business License;
- Detailed description of how merchant conducts business relative
to deliveries, deposits and telephone sales;
- Six months of most recent VISA/MasterCard processing statements OR
six months of most recent business checking statements.
Derogatory Background Information:
- In general, payments now current that were past due will not be
questioned unless they are the norm for the report
- In general, payments past due of 30-60 days will not hold up the
application unless they exceed $500 or are the non-n for the report
- Proof of satisfaction will be requested for any outstanding judgment or
lien over $500
- Further explanation and possibly proof of satisfaction will be requested
for any legal item with a dollar amount attached in excess of $500
- Any charge off in excess of $500 will be viewed as a substantially
derogative piece of the overall report
- Any single negative item in excess of $1,000 will be viewed as seriously
derogative
- Foreclosure and repossessions are considered seriously derogative
Exceptional Merchants Include the Following:
- Merchants processing greater than 25% MO/TO
- Merchant processing Out of Home Sales
- Merchants with bankcard volume greater than $2.5 million annually
- Merchants with type of business appearing in "Restricted Business List"
category of "Restricted Merchant List"
The following Additional Documentation will be required in order for
Exceptional Merchants to be considered for approval:
- Most recent audited Balance Sheet & Income Statement OR 2 years of
corporate tax returns (personal if business in not incorporated)
- Copy of [] Business Certification, OR [I Business License, OR [] Articles
of Incorporation
- Detailed description of how merchant conducts business relative to
deliveries, deposits and telephone sales
- 6 months of recent processing statements OR, if processor statements not
available, 6 months most recent checking account statements
- 2 photographs of merchant location: Outside displaying signage and Inside
displaying inventory
Credit Card Processing Agreement
Schedule A - Credit Policy (continued)
SCHEDULE A
Exhibit I
Restricted Merchant List
Restricted Business List
Apartment Houses
Auctions
Bail Bond Service
Bars/Tavems (not serving food)
Car Rental Agencies
Card Rooms
Cellular Telephone Companies
Charitable Organizations
Check Cashing Institutions
Collection Agencies
Companion or Escort Services
Computer Hardware and Software
Cooperative Consumer Discount Groups
Credit Restoration/Repair Agencies
Dating Services
Employment Agencies
Gambling Establishments
General Contractors/Home Improvement/ Home Repairs
Health Spas/Clubs (except country clubs)
Income Tax Services
Insurance Agencies
Lawyers/Law Finns Engaged in Bankruptcy
Limousine or Taxi Service
Long Distance Providers (blocks of phone time)
Mall Kiosks
Massage Parlors
Modeling Agencies/Star Search
Monthly recurring billing by MO/TO
Professional Billing Services
Resort Land Promotions
Restune Preparers
Restricted Business List (con't)
Sexual Encounter Firms
Software Vendors
Sports Forecasting
Talent Booking Agencies
Third Party Hotel Reservation Services
Towing Services
Travel Agencies/Clubs
Used Car Lots/Sales
Prohibited Products
Drug Paraphernalia
Investment Opportunities
Lotteries or Raffles
Pawn Shops
Phone Cards
Pomographic/Adult Materials
Real Estate Services
Time Share Condo Sales
Water Purification
Prohibited Methods of Selling
Door to Door
Flea Markets
Membership Type Business @d/Multi Level Sales Sales Out of Home
Neighborhood Party Type Sales Future Services
This list is not meant to be all inclusive and applications for businesses not
on this list may be declined for of business.
SCHIEDULE B
(Confidentially for this page of this document has been requested pursuant to
Commission rule 24b-2. The omitted material has been filed separately with the
Commission.)
