CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY U.S. WIRELESS DATA, INC. FOR
CERTAIN INFORMATION CONTAINED IN SCHEDULE A TO THIS AGREEMENT
MERCHANT MARKETING AND SERVICES AGREEMENT
This Merchant Marketing and Services Agreement (the "Agreement"), dated
March 9, 1998, is by and between National Bank of Commerce ("Bank") and U.S.
Wireless Data, Inc.
("ISO/MSP").
WITNESSETH
WHEREAS, In connection with Bank's membership in the Visa U.S.A., Inc.
and MasterCard International Incorporated bank card associations, Bank processes
bank card transactions on behalf of certain retail merchants that accept credit
and debit cards in payment for customer purchases; and
WHEREAS, ISO/MSP is engaged in the business of providing bank card
merchant services including merchant solicitation and related sales and
services, to financial institutions;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants, agreements and conditions herein contained, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. DEFINITIONS.
1.01. "ACH" means the Automated Clearing House maintained by the Federal
Reserve System.
1.02. "Bank Card" means a credit card or debit card issued by a member of
the Card Associations (as defined below) and bearing their respective trade
names, trademarks and/or trade symbols.
1.03. "Business Day" means any day on which Bank conducts substantially all
of its business, excluding Saturdays, Sundays and Bank holidays.
1.04. "Card Association(s)" means Visa U.S.A., Inc. or MasterCard
International, Inc.
1.05. "Charge-Back" means the amount of any previously accepted Bank Card
sales Transaction that, in accordance with Card Association Rules, the Bank Card
issuer reimburses to the Cardholder's bank card account and returns to Bank.
1.06. "Merchant" means each business or entity solicited by ISO/MSP,
approved by Bank and with which Bank enters into a Merchant Agreement (as
defined below) as a result of such solicitation.
1.07. "Merchant Agreement" means any agreement in effect by and between
Bank and a business or entity that has been solicited by ISO/MSP under this
Agreement.
1.08. "Merchant Fees" means the fee charged to Merchant by Bank, as
provided in each Merchant Agreement.
1.09. "Merchant Services" means the operations, policies and procedures
established by Bank for the solicitation, approval, processing, clearing and
settlement of Bank Card Transactions for Merchants.
1.10. "Program" means Bank's business plan for furnishing the Merchant
Services to Merchants.
1.11. "Residual Account" means a commercial account maintained by ISO/MSP
with Bank in ISO/MSP's name as described in Section 5 of this Agreement.
1.12. "Transaction" means each sale of, or credit for, merchandise or
services of a Merchant for which a customer makes payment through the use of a
Bank Card.
2. AGREEMENT.
2.1. ISO/MSP agrees to actively, and through the use of all reasonable
efforts, market the Program to prospective Merchants (including but not limited
to the customers of Bank) and to provide other Program-related services to the
Merchants on behalf of Bank, as provided in this Agreement.
2.2. The validity and enforceability of this Agreement are contingent upon
both (i) ISO/MSP's being accepted for registration as an Independent Service
Provider or Member Service Provider by the Card Associations, and (ii) the
acceptance of this Agreement by both Card Associations.
3. OBLIGATIONS OF ISO/MSP.
3.1. Merchant Accounts. ISO/MSP will use its best efforts to solicit
prospective Merchants to become Merchants under the Program and to promote
on-going Merchant participation in the Program. ISO/MSP shall submit all
marketing materials and all marketing strategies it plans to use for such
solicitations to Bank for prior approval, which shall not be unreasonably
withheld. All such prospective Merchants' acceptance into the Program shall be
subject to approval by Bank in accordance with the Programs's underwriting
criteria.
3.2. Merchant Services. ISO/MSP shall obtain all information and complete
all documents required by Bank for each prospective Merchant, including the
negotiation and execution by each Merchant of a Merchant Sales Agreement
acceptable to Bank. After submission to and acceptance by Bank of all such
required information and documents, Bank shall notify ISO/MSP whether or not
each prospective Merchant has been accepted to participate in the
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Program. Within 10 days of ISO/MSP's receipt of notice that Bank has accepted a
prospective Merchant to participate in the Program, ISO/MSP shall provide the
Merchant with point-of-sale access, including set-up and maintenance of
electronic terminal hardware and other equipment at each Merchant location, to
an authorization and data capture network that is connected to the Card
Association's interchange networks. ISO/MSP shall provide customer service to
each Merchant, including training, supplies, Program information and other
services relating to the Program.
3.3. Card Association Compliance. ISO/MSP understands and agrees to comply
with all applicable rules and regulations of the Card Associations, particularly
those applicable to Service Providers. ISO/MSP further agrees to comply with all
federal, state and local laws and regulations governing the transactions
contemplated in this Agreement.
3.4. Access to Records. ISO/MSP shall, prior to the date of this Agreement,
provide Bank with copies of ISO/MSP's audited financial statements. During
normal business hours for the term of this Agreement, ISO/MSP shall allow Bank
access to ISO/MSP's records with respect to the Merchants, the Program and any
other matters, financial or otherwise, relating to this Agreement.
4. OBLIGATIONS OF BANK.
4.1. Accounting Functions. Bank shall perform financial and accounting
functions relating to the clearing and settlement of Bank Card Transactions and
other services provided under this Agreement. Such functions include, but are
not limited to, disbursement of Merchants' funds via ACH, collecting Merchant
Fees and crediting ISO/MSP's Residual Account for its portion thereof, payment
of card Associations' fees and assessments, and payment of any Service Provider
charges.
4.4. Documents; Access to Data. Bank shall provide ISO/MSP with all
documents and other materials necessary or appropriate for a Merchant's
participation in the program. Bank shall ensure that ISO/MSP has access to all
documentation necessary for ISO/MSP to perform its obligations under this
Agreement.
4.5. Dispute Notification. Bank shall promptly inform ISO/MSP of (i) any
Merchant inquiries or disputes concerning services provided by ISO/MSP or its
Service Providers, or (ii) of any communication between Bank or the Card
Associations relating to such services.
4.6. Personnel. During the term of this Agreement, Bank shall maintain
sufficient personnel to perform the services contemplated under this Agreement
on a timely basis.
4.7. Training. Bank shall provide ISO/MSP's employees with training in
Bank's underwriting standards.
4.8. Reports. Bank shall provide ISO/MSP a monthly report containing an
accounting summary of Bank Card activities of the Merchants during the previous
month.
5. ESTABLISHMENT AND OPERATION OF ACCOUNTS.
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Prior to the implementation of this Agreement, ISO/MSP shall establish
the Residual Account(s), which shall consist of one or more commercial checking
accounts at Bank in the name of ISO/MSP, for settlement of residuals and
charge-backs, if any, and to hold funds representing any reserve required by
Bank.
6. MERCHANT FEES.
With respect to each Merchant Agreement presented or assigned by
ISO/MSP to Bank and accepted by Bank under the terms of this Agreement, Bank
shall charge each Merchant a Merchant Fee equal to a fixed percentage of the
total dollar amount of the Merchant's daily Transactions, plus other applicable
fees, in accordance with the Merchant Agreement. Bank shall collect the Merchant
Fees from each Merchant, and shall credit ISO/MSP's Residual Account with the
total amount of Merchant Fees collected, after deducting the per-transaction and
applicable one-time and per-occurrence fees indicated on Schedule A and any
Charge- Backs. ISO/MSP's portion of the Merchant Fee shall be calculated and
credited to the Residual Account within 10 Business Days following the close of
business each calendar month. Bank's obligation to ISO/MSP under this Paragraph
6 shall not be the subject of any ownership or security interest, lien, set-off,
recoupment, charge equity, or other encumbrance with respect to any funds held
by, for or at Bank either directly or through any other financial institution.
7. TERM.
7.1. This Agreement shall have an initial term of three (3) years from the
effective date hereof and shall automatically renew for successive one (1) year
terms unless either party gives the other party prior written notice of
non-renewal at least ninety (90) days prior to the end of the initial term or
any renewal term.
7.2. Notwithstanding the foregoing, this Agreement may be terminated as
follows:
(a) Immediately and automatically upon the deregistration of
ISO/MSP by either Card Association;
(b) By Bank, with sixty (60) days prior written notice, to
ISO/MSP upon a material breach by ISO/MSP of any Card Association
rule or regulation with respect to the Program or this Agreement;
(c) By Bank, with sixty (60) days prior written notice, upon the
occurrence of either of the following:
(i) Termination of Bank's status as a licensed processing
bank by either Card Association; and
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(ii) Termination of the Program by Bank.
(d) By either party, automatically, if the other party ceases to
conduct business in the ordinary course, admits its insolvency,
makes an assignment for the benefit of creditors, or becomes a
party to any judicial or administrative proceeding in bankruptcy,
receivership or reorganization.
(e) By either party, immediately, if the other party fails to
correct a material breach of this Agreement within thirty (30)
days of receipt by the breaching party of written notice from the
non-breaching party specifying the nature of the breach.
8. RIGHTS UPON TERMINATION.
The rights and responsibilities of the parties hereto with respect to
Transactions entered into prior to termination shall not be affected by the
termination of this Agreement. The parties hereto agree to cooperate with each
other following termination to ensure an orderly transition for any Merchants
that are to receive Merchant Services from another Card Association member
following termination.
9. MISCELLANEOUS.
9.01. Expenses. Both parties agree to be responsible for their own
respective expenses associated with the transactions contemplated under this
Agreement.
9.02. Assignment. Neither party may assign this Agreement without prior
written approval by either party which will not be unreasonably withheld;
provided, however, that either party may assign this Agreement to any entity
that controls, is controlled by or under common control with such party.
9.03. Waivers. Either party may waive any of the provisions set forth
herein by doing so in writing by a duly authorized representative.
9.04. Notices. Any notice under this Agreement shall be in writing and
delivered personally, by facsimile transmission or by registered or certified
mail, postage prepaid, as follows:
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(a) If to Bank: Xxxxx X. Xxxxxxx
President
National Bank of Commerce
Xxx Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000; and
Xxxxxxx X. Xxxxx
Senior Vice President and General Counsel
Xxx Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
(b) If to ISO/MSP:
, and
9.05. Entire Agreement. This Agreement supersedes any and all prior oral or
written agreements and contains the entire agreement of the parties relating to
this matter. This Agreement may only be amended by a written agreement signed by
all of the parties hereto.
9.06. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Tennessee applicable to agreements made
and entirely to be performed within such state but in accordance with any
applicable federal laws and regulations.
9.07. Severability. Should any provision in this Agreement be held to be
invalid, illegal, or unenforceable, the validity, legality, and enforceability
of the remaining provisions hereof shall not be affected or impaired thereby.
9.08. Counterparts. This Agreement may be executed in two or more
counterparts, each of which taken together shall constitute one instrument.
9.09. Creditors' Rights. The enforceability of this Agreement may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws effecting the enforcement of creditors' rights generally.
9.10. Binding Effect. This Agreement shall inure to the benefit of and be
binding upon
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ISO/MSP and NBC and their respective successors and assigns.
9.11. No Delay or Waiver. Neither any delay on the part of a party in
exercising any right hereunder, nor any failure to exercise the same shall
operate as a waiver of such right; nor in any event shall any modification or
waiver of the provisions hereof be effective unless in writing signed by the
party granting the waiver, nor shall any such waiver be applicable except in the
specific instance for which it is given.
9.12. Exhibits. All of the Exhibits to this Agreement are hereby
incorporated into and made a part of this Agreement as if set forth fully
herein.
9.13. Headings. The section and other headings contained in this Agreement
are for reference purposes only and shall not affect the interpretation of this
Agreement.
9.14. Further Assurances. The parties agree that upon request, they shall
do such further acts and deeds, and shall execute, acknowledge, deliver and
record such other documents and instruments, as may be reasonably necessary from
time to time to evidence, confirm or carry out the intent and purposes of this
Agreement.
9.15. Arbitration. Any and all disputes or disagreements arising between
the parties pertaining to or relating in any manner to this Agreement, including
any breach of this Agreement are to be decided by arbitration in accordance with
the rules of the American Arbitration Association. The parties agree to be bound
by the majority decision of the arbitrators. The arbitration proceeding shall
take place in Memphis, Tennessee, unless another location is mutually agreed to
by the parties. Three arbitrators shall be selected for the arbitration panel.
One arbitrator shall be selected by each party. The third arbitrator shall be
selected by the arbitrators named by each party. The costs and expenses of the
third arbitrator shall be shared equally by the parties. Each party shall be
responsible for its own costs and expenses in arbitrating the dispute. The award
of the arbitrators shall be final and a judgment on the award may be entered in
any court having jurisdiction. This provision shall survive the termination of
this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
BANK:
NATIONAL BANK OF COMMERCE
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name:
Title: President of Merchant Services
ISO/MSP:
By: /s/ Xxxx Xxxxx
---------------
Name:
Title: CEO
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SCHEDULE A (Pricing)
Interchange Pass Through, Card Association Assessment + # (All Transaction
Types)
Transactions Monthly
1-500,000 - $#
500,000-1,000,000 - $#
1,000,00 + - $#
Account on File - $# Monthly Retrieval Requests - $# Chargebacks - $#
Performance Provision
Per Transaction Rate From Day One Will Be Charged At The # Transaction Rate
($.#). Six Months From Execution Of This Agreement, If the # Per Month
Transaction Level Is Not Attained, All Transactions Retroactive to Day One Will
Be Charged At the Appropriate Per Transaction Rate.
Interchange and Assessment Increases
Interchange and Assessment Service Fees set by the Bank Card Associations can
and do change periodically. Bank will notify ISO/MSP in writing thirty (30) days
prior to any effective date of such change.
# CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY U.S. WIRELESS
DATA, INC. FOR THIS PORTION OF THIS DOCUMENT PURSUANT TO
COMMISSION RULES 24b-2 AND/OR 406. THE OMITTED MATERIAL HAS BEEN
FILED SEPARATELY WITH THE COMMISSION.
March 09, 1998
RE: Residual Rights: Merchant Marketing and Services Agreement dated March 09,
1998 (the "ISO/MSP Agreement"), between National Bank of Commerce ("Bank") and
U.S. Wireless Data, Inc., its employees, independent contractors or agents
("ISO/MSP")
Xxxx Xxxxx
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Dear Xxxx,
Please consider this letter a confirmation of our agreement concerning the
equity and residual rights of Bank and ISO/MSP with respect to each business or
entity ("Merchant"), solicited by ISO/MSP, approved by Bank and with which Bank
has entered into an agreement ("the Merchant Agreement") to provide processing
and settlement of credit and debit card transactions for the Merchant ("Merchant
Services"), all in accordance with the ISO/MSP Agreement. This letter is
intended as an addendum to the Merchant Marketing and Services Agreement (the
"Merchant Agreement").
1. Equity Rights. ISO/MSP and Bank will each have an undivided
one-half (1/2) equity interest in the portfolio of Merchants
for whom Bank provides Merchant Services as a result of
ISO/MSP's marketing efforts or Merchants that ISO/MSP is
otherwise responsible for bringing into the Bank's Merchant
Services program ("the Equity Merchants"). Bank will not,
however, share with ISO/MSP its equity interest in Merchants
to which Bank is currently providing Merchant Services, but
that are solicited by ISO/MSP and enter into a mew Merchant
Agreement due to ISO/MSP's more advantageous technological
capabilities (the "Non-Equity Merchant(s)"). ISO/MSP will,
however continue to receive payments of residuals, in
accordance with Paragraph 6 of the ISO/MSP Agreement, on
each such Non-Equity Merchant as long as Bank continues to
provide Merchant Services, on a continuous basis, to such
Non-Equity Merchant through ISO/MSP's technology.
2. Liability for Non-Payment. ISO/MSP will reimburse Bank for
fifty percent (50%) of any fees or charges owed to Bank by
any Merchant jointly owned by Bank and USWD, under a
Merchant Agreement, that remains unpaid for 60 days,
including any Merchant's liability to Bank for fraud,
Charge-backs, adjustments, fees, and any and all other
amounts owing by a Merchant to Bank. ISO/MSP will be liable
for one hundred percent (100%) of all such unpaid fees or
charges resulting from the fraud of ISO/MSP collusion
between ISO/MSP and a Merchant, or ISO/MSP's intentional
falsification of information provided to
Bank. The amount of such ISO/MSP liability is not limited to
any reserve amount Bank may require ISO/MSP to maintain.
3. Service Providers. ISO/MSP will not enter into any agreement
with a Service Provider to provide services with respect to
this Agreement without the prior written consent of Bank
with the exception of established transaction processors.
4. Sale of Merchants. In the event of a proposed sale of the
Equity Merchant portfolio of Bank by either party, the
selling party will notify the non-selling party of the terms
of the proposed sale. The non-selling party will have the
option, exercisable within thirty (30) days of its receipt
of such notice, to purchase the selling partner's one-half
interest in the Equity Merchant Portfolio at a price equal
to one-half the proposed buyer's offering price. If the
non-selling party does not exercise such option, the selling
party may proceed with the proposed sale. At the closing of
such sale of the Equity Merchant portfolio, the selling
party and the non-selling party will each receive one-half
of the purchase price.
5. Transfer of Merchants. Upon termination of the ISO/MSP
Agreement for any reason other than pursuant to Paragraph
7.2(a) of the ISO/MSP Agreement, ISO/MSP will have the right
to transfer the Equity Merchants to another Card Association
Member for receipt of Merchant Services upon payment to Bank
of one-half of the equity value of the Equity Merchant
portfolio. Bank will cooperate with ISO/MSP in such transfer
by legally transferring all Equity Merchant's Merchant
Agreements to the Card Association member designated by
ISO/MSP, or, if such assignment is not practicable, Bank
will terminate all such Merchant Agreements as provided
therein, to allow the designated member to enter into new
agreements with the Equity Merchants. ISO/MSP will reimburse
Bank for out-of-pocket expenses incurred by Bank with
respect to such assignment or termination.
If the foregoing accurately reflects our agreement concerning the matters
discussed herein, please so indicate by signing each duplicate original of this
letter in the space provided below and returning the original to us.
Agreed To and Accepted: NATIONAL BANK OF COMMERCE
By: /s/ Xxxx Xxxxx By: /s/ Xxxxxxx X. Xxxxxx
--------------- ----------------------
Date: 3/13/98
