Exhibit 10.3
MARKETING ALLIANCE AGREEMENT
MARKETING ALLIANCE AGREEMENT dated as of March 20, 2001 among CANADIAN
IMPERIAL BANK OF COMMERCE, a bank formed under the laws of Canada (the "Bank"),
and NATIONAL DATA PAYMENT SYSTEMS, INC., a New York corporation ("NDPS"), GLOBAL
PAYMENTS CANADA INC. an Ontario corporation ("GPI CANADA") and GLOBAL PAYMENTS
INC. a Georgia corporation ("GLOBAL PAYMENTS") as the guarantor of NDPS' and GPI
Canada's obligations hereunder, as described on the last page of this Agreement.
WHEREAS, the Bank and NDPS (and National Data Corporation and Global
Payments as the guarantors of NDPS' obligations) entered into an Asset Purchase
Agreement dated November 9, 2000 (the "ASSET PURCHASE AGREEMENT"), pursuant to
which the Bank agreed to sell to NDPS the Assets Sold (as defined therein);
WHEREAS, the parties have each agreed to undertake or cause to be
undertaken certain activities with respect to the Merchant Business;
WHEREAS, it was a condition to the consummation of the transactions
provided for in the Asset Purchase Agreement that the Bank and NDPS enter into
this Marketing Alliance Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants contained herein, the Bank and NDPS agree as follows:
SECTION 1. DEFINITIONS AND INTERPRETATION
SECTION 1.1 CERTAIN DEFINED TERMS. For purposes of this Agreement, the
following terms shall have the following meanings:
"ACCOUNT FEES" has the meaning set forth in Section 5.2.
"ADVISORS" means, with respect to a Person, the Person's employees,
agents, professional advisors and consultants and "ADVISOR" means any one of
them.
"AFFILIATES" means, with respect to the Person specified, a Person that
Controls or is Controlled by, or is under common Control with, the Person
specified.
"AGGREGATE TRANSACTION VOLUME" has the meaning set forth in Section
8.3(e).
"AMICUS" has the meaning set forth in Section 8.3(b).
"ARBITRATION" has the meaning set forth in Section 22.5.
"ARBITRATION ACT" has the meaning set forth in Section 22.5.
"ASSET PURCHASE AGREEMENT" has the meaning set forth in the Recitals.
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"ASSIGNED MERCHANT AGREEMENTS" means the Existing Merchant Agreements (but
not the Excluded Merchant Agreements).
"ASSOCIATION RULES" means the rules and regulations established from time
to time by a Credit Card Association or Network Organization.
"BANK DATA" means all data and information, including, but not limited to,
personal information, account balance information, facts, records, business data
tapes and documents, relating to the Bank's businesses (other than the Merchant
Business or information which has otherwise been disclosed by a Merchant or a
customer to NDPS and/or GPI Canada directly or is available in the public
domain).
"BANK DEFAULT" has the meaning set forth in Section 14.2.
"BANK MARKS" means the Bank's trade name and trade-marks specifically
identified in the Trademark Licence Agreement.
"BANK SERVICE LOCATION" means any location where the Bank performs Bank
Services.
"BANK SERVICES" means the services to be provided by, and all other
obligations of, the Bank expressly provided for in this Agreement in fulfilment
of obligations under the Merchant Agreements, including the Transition Services
for so long as, and to the extent that, they are provided under the Transition
Agreement.
"BANK'S U.S. ICAS/BINS" has the meaning set forth in Section 8.3(b).
"BIN" means a Bank Identification Number used in connection with Credit
Card Transactions, as described in greater detail in the applicable Association
Rules.
"BIN REPORTING" has the meaning set forth in Section 8.2.
"BUSINESS DAY" means any day excluding Saturday, Sunday and any day on
which banking institutions located in Toronto, Ontario, St. Louis, Missouri or
Atlanta, Georgia are authorized by law or other governmental action to be
closed.
"BUSINESS RECOVERY PLANS" means, as the case may be, NDPS' and/or GPI
Canada's business recovery procedures with respect to the Merchant Business to
be implemented by NDPS and GPI Canada pursuant to the conditions imposed by the
Office of the Superintendent of Financial Institutions in its conditional order
permitting NDPS to process data relating to the Merchant Business from a
location outside Canada, and under the Transition Agreement, such procedures may
be updated and modified from time to time in accordance with the terms of this
Agreement, and the Bank's business recovery procedures with respect to the Bank
Services, as such procedures may be modified from time to time in accordance
with the terms of this Agreement.
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"CANADIAN FINANCIAL INSTITUTION" has the meaning set forth in the Asset
Purchase Agreement.
"CARD TRANSACTIONS" means Credit Card Transactions and Debit Card
Transactions.
"CHAIR" has the meaning ascribed thereto in Section 22.5.
"CHARGEBACK" has the meaning, with respect to VISA, specified in the VISA
Rules and, with respect to any other Credit Card Association or Network
Organization, has the meaning given to the equivalent term under the applicable
Association Rules.
"CIBC SYSTEM" has the meaning set forth in Section 10.5.
"CLEARING SYSTEM RULES" means, for a Clearing System, the rules and
regulations established from time to time relating to the use and operation of
the Clearing System.
"CLEARING SYSTEM" means the relevant payment system, such as the Canadian
Payments Association, used to effect payments for Card Transactions.
"CLIENT RELATIONS REPRESENTATIVE" has the meaning set forth in Section
15.1.
"COMMERCIALLY REASONABLE EFFORTS" means the efforts that a prudent person
who desires to complete a transaction or other action would use in similar
circumstances to ensure that a closing or other result occurs as expeditiously
as possible without the necessity of assuming any material obligations or paying
any material amounts to an unrelated third party.
"CONTROL" exists when a Person owns beneficially, directly or indirectly,
more than 50% of another Person's outstanding voting securities or where a
Person has the ability to elect a majority of the directors of another Person;
"CREDIT CARD" means a credit card or Off-Line Debit Card bearing the
symbol of a Credit Card Association which is accepted by a Merchant pursuant to
the terms of a Merchant Agreement, and in respect of which Credit Card
Transactions are cleared and settled through the Credit Card Interchange System.
"CREDIT CARD ASSOCIATIONS" means VISA U.S.A., Inc., VISA Canada Inc.,
the Canadian MasterCard entity, if any, MasterCard USA, Inc., Visa
International, Inc., MasterCard International, Inc. or any other association
that the parties may agree upon from time to time and any successor
organization or association of any of them.
"CREDIT CARD CLEARING DATE" means the date the Credit Card Association
receives the information relating to a Card Transaction from NDPS or its
Merchant Accounting Processor.
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"CREDIT CARD INTERCHANGE SYSTEM" means a system of clearing and settling
Credit Card Transactions established by a Credit Card Association.
"CREDIT CARD TRANSACTION" means an electronic or documentary transaction
involving a Merchant pursuant to which the method of payment is by Credit Card.
"CREDIT CARD TRANSACTION RECORDS" means the electronic or documentary
files relating to Credit Card Transactions.
"CREDIT FACILITY" has the meaning set forth in the Asset Purchase
Agreement.
"CREDIT LOSS" means a loss resulting from the failure by a Merchant to pay
amounts owed by it under a Merchant Agreement, other than amounts owed by reason
of a Chargeback.
"DEBIT CARD" means an on-line debit card, bearing the symbol of a Network
Organization, which is accepted by a Merchant pursuant to the terms of a
Merchant Agreement and in respect of which Debit Card Transactions are cleared
and settled through the Bank in accordance with the procedures established by
the applicable Network Organization.
"DEBIT CARD TRANSACTION" means an electronic transaction involving a
Merchant pursuant to which the method of payment is by Debit Card.
"DEBT CARD TRANSACTION RECORDS" means the electronic or documentary files
relating to a Debit Card Transaction.
"DISPUTE" has the meaning set forth in Section 22.1.
"EFT" means an electronic funds transfer.
"EMERGENCY" has the meaning set forth in Section 2.7.
"EXCLUDED MERCHANT AGREEMENTS" has the meaning given to such term in the
Asset Purchase Agreement.
"EXISTING MERCHANT AGREEMENT" means an agreement, whether oral or written,
dated before the date of this agreement and in effect on the date hereof between
the Bank and a merchant pursuant to which the Merchant undertakes to honour
Cards, to deposit Card Transaction records with the Bank and to settle with the
Bank for Card Transactions with the Bank and the Bank agrees to provide such
other related services as may be set forth in such agreement and a merchant
member agreement, an instant payment service agreement, a terminal authorization
and draft deposit service agreement, an instant payment merchant agreement, a
guaranteed reservation service agreement, a merchant
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tape deposit service agreement, a telephone and mail order agreement, a merchant
agreement acceptance form, and applications for merchant service.
"FORCE MAJEURE EVENT" has the meaning set forth in Section 12.2.
"FOREIGN INTERCHANGE AMOUNT" has the meaning set forth in Section 7.3(a).
"FOREIGN INTERCHANGE NOTICE" has the meaning set forth in Section 7.3(c).
"FOREIGN TRANSACTIONS" has the meaning set forth in Section 7.3(a).
"GOVERNMENTAL ENTITY" means (i) any multinational, federal, provincial,
state, municipal, local or other governmental or public department, central
bank, court, commission, board, bureau, agency or instrumentality, whether
domestic or foreign (ii) any subdivision or authority of any of the foregoing,
or (iii) any quasi-governmental or private body exercising any regulatory,
expropriation or taxing authority under or for the account of any of the above.
"ICA" means the identification or account number used by a member of a
Credit Card Association in connection with certain Credit Card Transactions, as
described in greater detail in the applicable Association Rules.
"INDEMNITEE" has the meaning set forth in Section 20.1.
"INDEMNITOR" has the meaning set forth in Section 20.1.
"INDEPENDENT SALES ORGANIZATION" means a non-Affiliated sales organization
that may refer merchants to NDPS in connection with the Merchant Business.
"INTERAC" means Interac Association.
"INTERCHANGE FEE" means a fee payable to the applicable Credit Card
Association (part of which is payable to the applicable Credit Card issuer) in
respect of a Credit Card Transaction.
"INITIATING PARTY" has the meaning set forth in Section 22.2.
"ISSUING ACCOUNT" means an account maintained by the Bank for the purposes
of clearing Credit Card Transactions in respect of which the cardholder making
the transaction uses a Credit Card issued by the Bank and the Merchant maintains
a Merchant Depository Account at the Bank.
"JOINT DIRECTOR COMMITTEE" means a committee comprised of two directors of
Global Payments nominated by the Bank (or if the Bank has not nominated two
directors, then the members of the Bank on the Committee shall be the remaining
director if any, of
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Global Payments, and an officer or officers of the Bank designated by the Bank)
and two directors of Global Payments Inc. designated by NDPS.
"KEY ACCOUNTS" has the meaning set forth in Section 2.7.
"KEY ACCOUNT NOTICE" has the meaning set forth in Section 2.7.
"LAWS" means all applicable laws including all statutes, codes,
ordinances, decrees, rules, regulations, municipal by-laws, judicial or arbitral
or administrative or ministerial or departmental or regulatory judgments,
orders, decisions, ruling or awards, guidelines, standards, policies and
procedures enacted by a regulatory body or pursuant to statutory authority or
requirement and general principles of common and civil law and equity, binding
on the Person referred to in the context in which the word is used.
"LEGAL CHANGE" has the meaning set forth is Section 9.2.
"LOSSES" has the meaning set forth in Section 20.1.
"MASTERCARD" means, as applicable, the Canadian MasterCard entity, if
any, MasterCard International, Inc., MasterCard USA, Inc. and their
respective successor organizations.
"MASTERCARD CARD" means a Credit Card bearing the symbol of MasterCard,
Credit Card Transactions in respect of which are cleared and settled through the
MasterCard Credit Card Interchange System.
"MASTERCARD RULES" means the rules and regulations established by
MasterCard.
"MERCHANT" means any Person (other than the Bank or NDPS and/or GPI
Canada) that is a party to a Merchant Agreement.
"MERCHANT ACCOUNTING PROCESSOR" means a processor designated by NDPS from
time to time to perform data processing relating to Credit Card Transactions.
"MERCHANT AGREEMENTS" means the Assigned Merchant Agreements and the
New Merchant Agreements.
"MERCHANT BUSINESS" has the meaning set forth in the Asset Purchase
Agreement.
"MERCHANT DEPOSITORY ACCOUNT" means a current account maintained by a
Merchant with the Bank or another financial institution for the purposes of
receiving funds in connection with Card Transactions and making payments of
amounts owing by the Merchant under the applicable Merchant Agreement.
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"MERCHANT PROCESSING SERVICES" means the products and services offered as
part of the Merchant Business.
"MERCHANT'S EDGE PROGRAM" means the program between the Bank and National
Bank of Canada (or any other Canadian MasterCard issuer) in association with the
trade-mark "Merchant's Edge" under which Merchants may receive same day value
and next Business Day access to deposits for their VISA and MasterCard sales.
"NDPS ACCOUNT" has the meaning set forth in Section 5.1(c).
"NDPS DEFAULT" has the meaning set forth in Section 14.3.
"NDPS DATA" shall mean all information relating to the business of NDPS
and its Affiliates including, without limitation, the Merchant Business
(including, without limitation, information regarding the identity of the
Merchants as customers of the Merchant Business, rate information, services
provided to Merchants and processing volumes) and the Assets Sold (as defined in
the Asset Purchase Agreement) (other than information which has otherwise been
disclosed by a Merchant or a customer to the Bank directly or is available in
the public domain).
"NDPS SERVICES" means (i) all services to be provided to Merchants by, and
all other obligations of, the Bank under or in respect of the Assigned Merchant
Agreements except for the Transition Services (only for so long as and to the
extent that they are to be provided under the Transition Agreement) and except
for the Bank Services, (ii) all services to be provided by, and all other
obligations of, NDPS and/or GPI Canada under the New Merchant Agreements, and
(iii) the services and obligations of NDPS and/or GPI Canada expressly provided
for in this Agreement.
"NDPS SERVICE LOCATION" means any location where NDPS and/or GPI Canada
performs any NDPS Services.
"NDPS USER'S FEE" has the meaning set forth in Section 8.3(e).
"NETWORK ORGANIZATION" means the Interac Association or any legal
successor organization.
"NEW MERCHANT AGREEMENTS" has the meaning set forth in Section 2.5(a)
"OFF-LINE DEBIT CARD" means a payment card bearing the name of a Credit
Card Association which is settled through the Credit Card Interchange System but
the charges are debited from the cardholder's account by the issuer rather than
being billed pursuant to a monthly statement.
"ON US CASH ADVANCES" has the meaning set forth in Section 4.1(h).
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"OPERATIVE DOCUMENTS" means, collectively, the Asset Purchase Agreement,
the Stock Purchase Agreement, this Agreement, the Transition Agreement, the
Trademark Licence Agreement, the Investor Rights Agreement, the Credit Facility
and the General Conveyance Agreement (all as referred to in the Asset Purchase
Agreement).
"ORDINARY COURSE" means, with respect to an action taken by a Person in
respect of a business, that such action is consistent with the past practices of
the Person and is taken in the ordinary course of operations of the Person
relating to that business.
"ORIGINATE" means the transmission of a file to a Clearing System for the
purposes of effecting an EFT.
"PAPER PROCESSING VENDOR" means the entity that NDPS designates to receive
documentary records relating to Card Transactions and that is responsible for
entering the relevant information concerning such transactions into an
electronic format.
"PERSON" means a natural person, partnership, limited liability
partnership, corporation, joint stock company, trust, unincorporated
association, joint venture or other entity or Governmental Entity.
"PRIVACY POLICIES AND PROCEDURES" means the privacy policies and
procedures attached as SCHEDULE 11.6, as such procedures may from time to time
be modified by the Bank, acting reasonably.
"RESERVE ACCOUNT" has the meaning set forth in Section 7.1(c).
"SECURITY POLICIES AND PROCEDURES" means the security policies and
procedures
of NDPS set out on SCHEDULE 10.3(A), and of the Bank set out on SCHEDULE10.3(B),
relating to the Merchant Business, as such policies may be modified from time to
time in accordance with the provisions hereof.
"SERVICE LEVELS" means the services levels in respect of the Services set
forth in SCHEDULE 3.
"SERVICE LOCATIONS" means, collectively, the Bank Service Locations and
the NDPS Service Locations.
"SERVICES" means, collectively, the NDPS Services and the Bank Services.
"SETTLEMENT" means the settlement of funds through a Credit Card
Interchange System or Network Organization.
"SETTLEMENT ACCOUNTS" has the meaning set forth in Section 5.1(a).
"SHORTFALL" means any shortfall in funds in the applicable Settlement
Account in respect of the Bank's reimbursement rights described in Sections
4.1(f) and 4.2(e).
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"STATEMENT OF DISPUTE" has the meaning set forth in Section 22.5.
"SUBSIDIARY" has the meaning given to such term in the Business
Corporations Act (Ontario).
"TERRITORY" means the United States (and all of its territories) and
Canada.
"THIRD PARTY ASSIGNEE" has the means set forth in Section 2.2(b).
"TRADEMARK LICENCE AGREEMENT" means the trademark licence agreement dated
the date hereof between the Bank, NDPS and GPI Canada.
"TRANSITION AGREEMENT" means the agreement dated the date hereof between
the Bank, NDPS, GPI Canada and Global Payments (as the guarantors of NDPS' and
GPI Canada's obligations thereunder) by which the Bank is required to provide
certain services in support of the Merchant Business during the Transition
Period.
"TRANSITION PERIOD" has the meaning set forth in the Transition Agreement.
"U.S. BINS AGREEMENT" has the meaning set forth in Section 8.3(b).
"VISA" means, as applicable, VISA U.S.A., Inc., VISA Canada Inc. or
Visa International, Inc. or any successor organization of any of them.
"VISA CARD" means a Credit Card bearing the symbol of VISA, Credit Card
Transactions in respect of which are cleared and settled through the VISA Credit
Card Interchange System.
"VISA RULES" means the applicable rules and regulations established from
time to time by VISA.
SECTION 1.2 HEADINGS AND TABLE OF CONTENTS. The division of this Agreement
into Sections, the insertion of headings and the provision of a table of
contents are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement.
SECTION 1.3 NUMBER AND GENDER. Unless the context requires otherwise, words
importing the singular include the plural and vice versa and words importing
gender include all genders.
SECTION 1.4 PERFORMANCE ON BUSINESS DAYS. Except as expressly provided for
herein, if any payment is required to be made or other action is required to be
taken pursuant to this Agreement on a day which is not a Business Day, then such
payment or action shall be made or taken on the next Business Day.
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SECTION 1.5 REFERENCES. Any reference in this Agreement to any Law, Association
Rule or Clearing System Rule shall, unless otherwise expressly stated, be deemed
to be a reference to such Law, Association Rule or Clearing System Rule as
amended, restated or re-enacted from time to time.
SECTION 1.6 SECTION AND SCHEDULE REFERENCES. Unless the context requires
otherwise, references in this Agreement to Sections or Schedules are to Sections
or Schedules of this Agreement. The Schedules to this Agreement form part of
this Agreement and are as follows:
SCHEDULES
Schedule 2.5 New Merchant Agreements
Schedule 2.7 - Key Accounts
Schedule 3 - Service Levels
Schedule 7.2 - Chargebacks and Credit Losses on Certain Accounts
Schedule 10.3(a) - NDPS Security Policies and Procedures
Schedule 10.3(b) - Bank Security Policies and Procedures
Schedule 11.6 - Bank Privacy Policies and Procedures
Schedule 15 - Initial Client Relations Representatives
SECTION 1.7 PARTIES. GPI Canada is a party to this Agreement for the purposes of
exercising such rights and fulfilling such obligations that relate to the
performance of the business of acquiring and leasing point-of-sale terminals to
Merchants and acting as an independent sales organization to the extent that
such activities relate to the conduct of the Merchant Business, and all
references to "NDPS and/or GPI Canada" herein shall be interpreted to mean the
relevant party as the context requires, provided that NDPS guarantees the
obligations of GPI Canada in accordance with the provisions of the last page of
this Agreement.
SECTION 2. MERCHANT AGREEMENTS
SECTION 2.1 ASSIGNED MERCHANT AGREEMENTS. The parties acknowledge that pursuant
to Section 2.1(a) of the Asset Purchase Agreement, the Bank has effected an
equitable assignment to NDPS of all of the Bank's rights under the Assigned
Merchant Agreements (it being further acknowledged that the Bank is continuing
as a party to the Assigned Merchant Agreements). Notwithstanding the foregoing,
the parties acknowledge that NDPS has the absolute right, by giving notice to
the applicable Merchants, to cause the equitable assignment described above to
be converted into a legal assignment of such rights. The parties also confirm
their intention that NDPS' and GPI Canada's covenant in Section 3.1 to provide
the NDPS Services will result in NDPS and/or GPI Canada assuming and performing
all of the Bank's obligations under the Assigned Merchant Agreements (except for
the Bank Services) without affecting the Bank's contractual obligations to
Merchants pursuant to the Assigned Merchant Agreements.
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SECTION 2.2 FURTHER ASSIGNMENT OF RIGHTS UNDER MERCHANT AGREEMENTS DURING THE
TERM.
(a) Subject to Section 2.2(b), and separate and apart from NDPS' right to
cause the equitable assignment of the Bank's rights under the Assigned
Merchant Agreements to be converted into a legal assignment of such
rights as described in Section 2.1, the Bank hereby grants to NDPS an
irrevocable right to require the Bank, during the term of this
Agreement, on notice from NDPS, to assign to NDPS or to any other
Person all but not less than all of the Bank's interest in some or all
of the Merchant Agreements in effect on the effective date of the
notice and all of the obligations of the Bank thereunder. Neither the
Bank nor NDPS makes any representation or warranty as to the legal
effect of such assignment and neither party shall have liability to the
other for any Losses incurred by the other party as a result of the
assignment, including any Losses resulting from a termination of any
Merchant Agreements by Merchants.
(b) The assignment referred to in Section 2.2(a) shall be subject to the
following conditions:
(i) an assignee other than NDPS or an Affiliate of NDPS (a "THIRD
PARTY ASSIGNEE") shall not be permitted to use the Bank Marks
without the written consent of the Bank;
(ii) the Bank shall have the right to cause NDPS or such Third Party
Assignee to notify each affected Merchant that the Bank is no
longer a party to such Merchant Agreements and to cause NDPS or
such Third Party Assignee to convert such Merchants from the
Bank's ICA/BINs, unless NDPS has caused the Bank to assign the
ICA/BINs to such Third Party Assignee or other designee pursuant
to Section 8.3(b);
(iii) if the Bank elects to pursue its right under clause (ii), upon
the effective date of the assignment, NDPS and the Bank agree
that, (A) as between the Bank and such Third Party Assignee, the
Bank shall have no further obligations or liabilities in respect
of the Merchant Agreements (including to provide any Bank
Services) and (B) NDPS or such Third Party Assignee and NDPS
shall be deemed to have assumed and agreed thereafter to pay and
discharge when due, and to indemnify and hold the Bank harmless
with respect to, all such obligations and liabilities except for
any obligations and liabilities of the Bank that relate to
events (including sales transactions) occurring up to the
effective time of such assignment or arising out of claims
against the Bank by any party other than NDPS, any Affiliate of
NDPS or any Third Party Assignee, who challenges the legal
validity of any such assignment.
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SECTION 2.3 FURTHER ASSIGNMENT OF RIGHTS UNDER ASSIGNED MERCHANT AGREEMENTS UPON
THE EXPIRY OF THE TERM.
(a) Subject to Section 2.3(c), upon the expiry or termination of this
Agreement, the Bank shall be deemed to have assigned to NDPS, and NDPS
shall be deemed to have assumed, without any further action required by
either of them, all but not less than all of the Bank's continuing
interest (including all of the Bank's obligations and liabilities) in
the Assigned Merchant Agreements in effect on the expiry or termination
date.
(b) Neither the Bank nor NDPS makes any representation or warranty as to
the legal effect of an assignment under Section 2.3(a) and neither
party shall have liability to the other for any Losses incurred by the
other party as a result of the assignment, including any Losses
resulting from a termination of any Merchant Agreements by Merchants.
(c) Upon the effective date of the assignment, as between the Bank and
NDPS, (i) the Bank shall have no further obligations or liabilities in
respect of the Merchant Agreements (including to provide any Bank
Services), (ii) NDPS shall notify each Merchant that the Bank is no
longer a party to the Merchant Agreements, and NDPS shall be deemed to
have assumed and agreed thereafter to pay and discharge when due, and
to hold the Bank harmless with respect to, all such obligations and
liabilities except for any obligations and liabilities of the Bank that
relate to events (including sales transactions) occurring up to the
effective time of such assignment or arising out of claims against the
Bank by any Person (other than NDPS ) who challenges the legal validity
of any such assignment.
SECTION 2.4 TERMINATION, MODIFICATION OF ASSIGNED MERCHANT AGREEMENTS. Subject
to the provisions of Section 2.7 with respect to the Key Accounts, NDPS shall
have the right to require the Bank to terminate or modify any of the Assigned
Merchant Agreements (including but not limited to the increase of fees or
discounts charged to Merchants) to the extent permissible thereunder in a manner
consistent with the Ordinary Course of NDPS' and/or GPI Canada's business,
provided that no modification to an Assigned Merchant Agreement may be effected
without the prior written consent of the Bank if the modification would
reasonably be expected to materially adversely affect the Bank's obligations
thereunder (which are not being performed or assumed by NDPS and/or GPI Canada),
or risks or costs arising therefrom, including with respect to Transition
Services or Bank Services. Subject to the provisions of Section 2.7, NDPS and/or
GPI Canada has the right to compel the Bank to be a party of legal proceedings
involving merchants under Assigned Merchant Agreements.
SECTION 2.5 NEW THREE PARTY MERCHANT AGREEMENTS.
(a) The parties agree to use their Commercially Reasonable Efforts to
attempt to enter into new written agreements with Merchants (to replace
any
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Assigned Merchant Agreement) substantially in the form attached as
SCHEDULE 2.5 pursuant to which each of NDPS and the Bank shall be
contracting parties with Merchants and shall be jointly and severally
obligated to perform the services thereunder (the "NEW MERCHANT
AGREEMENTS") within (i) three years from the date hereof as to
Merchants listed on SCHEDULE 7.2, and (ii) five years from the date
hereof as to Merchants other than those listed on SCHEDULE 7.2.
Notwithstanding the form of SCHEDULE 2.5, NDPS and/or GPI Canada agrees
to act diligently and in a commercially reasonable manner in
negotiating a New Merchant Agreement with the Merchants listed on
SCHEDULE 7.2. The parties acknowledge that, as to Merchants other than
those Merchants listed on SCHEDULE 7.2, NDPS and/or GPI Canada shall be
deemed to have used Commercially Reasonable Efforts if it mails a new
form of agreement to such Merchants without regard to the effectiveness
of such actions. In addition, all Merchant Agreements for new Merchants
from and after the Closing shall be substantially in the form of the
New Merchant Agreements. The parties agree that services under New
Merchant Agreements shall be performed for Merchants in accordance with
the provisions of this Agreement, namely, the Bank shall perform the
Bank Services and NDPS and/or GPI Canada shall perform the NDPS
Services. The parties agree that the process of converting to New
Merchant Agreements from the Assigned Merchant Agreements shall
commence with the Merchants listed on SCHEDULE 7.2.
(b) If NDPS desires the Bank to assign any rights it may have under any of
the Merchant Agreements by virtue of the fact that the Bank remains a
party to such contracts solely to comply with the Association Rules (if
applicable), the Bank shall enter into an assignment agreement with an
assignee designated by NDPS within a reasonable time after request
whereby such assignee shall assume all of the Bank's obligations and
liabilities under such Merchant Agreements as to transactions with a
Credit Card Clearing Date occurring after the effective date of such
assignment.
(c) The parties acknowledge that NDPS and GPI Canada intend to operate all
aspects of the Merchant Business in Canada relating to the sale and/or
leasing of point-of-sale terminals and related equipment and services
through GPI Canada, and in connection therewith, NDPS has transferred
to GPI Canada all of its rights and interests in all point-of-sale
related assets purchased from the Bank pursuant to the Asset Purchase
Agreement. Accordingly, the parties acknowledge that GPI Canada will
enter into separate agreements with Merchants relating to the sale
and/or leasing of point-of-sale terminals and related
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equipment and services. The Parties agree that, subject to the
provisions of the Trademark Licence Agreement, (in consideration for
GPI being permitted to provide any of the NDPS Services), GPI Canada
shall use the Bank Marks in connection with the sale and/or leasing of
point-of-sale terminals and related equipment and services for
Merchants. GPI Canada shall ensure that the point-of-sale terminal sale
or lease agreements entered into after the Closing Date contain a
provision requiring the Merchant to remove the Bank Marks from all
equipment used by Merchants that cease to be a party to a Merchant
Agreement.
SECTION 2.6 POWER OF ATTORNEY. The Bank hereby grants GPI Canada a continuing
power of attorney to execute New Merchant Agreements from time to time on behalf
of the Bank provided such New Merchant Agreements are substantially in the form
of the agreement attached as SCHEDULE 2.5, as amended by NDPS from time to time
with the prior written approval of the Bank, such approval not to be
unreasonably withheld.
SECTION 2.7 KEY ACCOUNTS. Attached hereto as SCHEDULE 2.7 is a list of Merchants
that the parties acknowledge are significant relationship customers of the Bank
(the "KEY ACCOUNTS"). If NDPS and/or GPI Canada desire to cause a Merchant
Agreement that relates to a Key Account to be terminated or modified in a
material respect or to commence or threaten legal proceedings against a Key
Account, NDPS and/or GPI Canada shall first give notice to the Bank's Client
Relations Representative of its intention to do so (a "KEY ACCOUNT NOTICE"),
which notice shall include a description of NDPS' and/or GPI Canada's proposed
course of action and the reasons therefor. A Key Account Notice indicating that
NDPS and/or GPI Canada desire either to terminate a Key Account because it
reasonably believes that a continuation of the Merchant Agreement may result in
losses to NDPS and/or GPI Canada as a result of uncollected Chargebacks or
Credit Losses or that NDPS and/or GPI Canada intends to seek injunctive relief
against the Key Account shall be considered an "EMERGENCY". The Bank must
respond to an Emergency on the same Business Day as the Key Account Notice is
delivered, if the Key Account Notice is delivered by 12:00 p.m., or the next
Business Day, if delivered after 12:00 p.m. If the Key Account Notice does not
relate to an Emergency, the Bank shall have five (5) Business Days after
delivery of the Key Account Notice to respond. If the Bank responds to NDPS
and/or GPI Canada within the applicable response time that it wishes to become
involved in the proposed action involving a Key Account with a view to avoiding
or preventing the proposed termination or legal proceeding or otherwise
addressing the issues set forth in the Key Account Notice, or the Bank and NDPS
and/or GPI Canada shall negotiate in good faith to ensure that a mutually
agreeable solution is reached as soon as reasonably possible. In the event that
(i) the Bank does not respond to the Key Account Notice within the applicable
response time, or (ii) the parties are unable to agree upon a solution (A) on
the same Business Day, in the case of an Emergency (or the next Business Day, if
the Key Account Notice is delivered after 12:00 p.m.), or (B) within five (5)
Business Days after the Bank has responded to any other Key Account Notice, NDPS
and/or GPI Canada shall be permitted to proceed with the course of action
proposed in the Key Account Notice. Notwithstanding the provisions of this
Section 2.7, NDPS and/or GPI Canada agrees that it shall not cause a Merchant
Agreement in respect of a Key Account to be modified in respect of fees charged
to such Merchants for a period of six months from the date of this Agreement.
14
SECTION 3. SERVICES
SECTION 3.1 NDPS SERVICES. During the term of this Agreement NDPS and/or GPI
Canada shall furnish the NDPS Services in respect of all Merchant Agreements and
shall use its Commercially Reasonable Efforts to meet the applicable Service
Levels.
SECTION 3.2 BANK SERVICES. During the term of this Agreement the Bank shall
furnish the Bank Services in respect of all Merchant Agreements and shall use
its Commercially Reasonable Efforts to meet the applicable Service Levels.
SECTION 3.3 LICENCES AND PERMITS. Each party shall be responsible for ensuring
compliance with all applicable Laws, Association Rules and Clearing System
Rules, including any service levels established thereunder, and obtaining and
complying with the terms and conditions of all licences and permits required by
Law, Association Rules and Clearing System Rules with respect to the Services to
be performed by it or by third parties on its behalf and shall pay all fees,
costs and expenses and assume all other obligations associated therewith. NDPS
and/or GPI Canada shall be responsible for and shall pay all fines and penalties
arising from non-compliance by NDPS and/or GPI Canada with any Merchant
Agreement, Laws, Association Rules or Clearing System Rules or third party
requirements in respect of its delivery of the NDPS Services. Neither NDPS nor
GPI Canada shall be responsible for any licences, memberships, sponsorships or
permits required to be obtained and/or maintained by the Bank or for any related
fees required or incurred in connection with the performance by the Bank of the
Bank Services for greater certainty, the Bank shall pay all assessment and
membership fees of VISA. The Bank shall be responsible for and shall pay all
fines and penalties arising from non-compliance by the Bank with any Merchant
Agreement, Laws, Association Rules or Clearing System Rules or third party
requirements in respect of its delivery of the Bank Services. The parties
acknowledge that the Bank shall not be responsible for any licences or permits
or related fees required to be obtained and/or maintained by NDPS and/or GPI
Canada.
SECTION 4. DEPOSIT AND SETTLEMENT PROCEDURES
SECTION 4.1 ACCEPTANCE, DELIVERY, AND SETTLEMENT OF CREDIT CARD TRANSACTION
RECORDS.
(a) NDPS shall accept Credit Card Transaction Records from Merchants in
electronic form and shall transmit to the Bank in the Ordinary Course
of NDPS' business summary information of the amounts to be posted to
the accounts of those Merchants whose Merchant Depository Accounts are
maintained with the Bank and the amounts to be included on the file to
be sent through the applicable Clearing System with respect to those
Merchants whose Merchant Depository Accounts are maintained with other
financial institutions.
(b) The Bank shall accept Credit Card Transaction Records from Merchants in
documentary form at branches of the Bank and shall cause such
15
transactions to be sent to the Paper Processing Vendor in the Ordinary
Course of the Bank's business. NDPS shall use Commercially Reasonable
Efforts to ensure that, once the Paper Processing Vendor has entered
the relevant information from the Credit Card Transaction Records in
documentary form into an electronic format, the Paper Processing Vendor
transmits such transaction records to NDPS, and such records shall be
Processed by NDPS in the Ordinary Course of NDPS' business.
(c) For the duration of the Transition Period, for transactions which are
made by cardholders who have been issued Credit Cards by the Bank, the
Bank shall credit funds from the Issuing Account (rather than the
applicable Settlement Account) to the applicable Merchant Depository
Accounts maintained at the Bank by Merchants in respect of Credit Card
Transactions in the Ordinary Course of the Bank's business and such
transactions shall not be processed through the Credit Card Interchange
System. NDPS agrees to pay the Bank any out-of-pocket costs incurred by
the Bank as a result of the processing of Credit Card Transactions
pursuant to this Section 4.1(c). The Bank shall ensure that the Issuing
Account has adequate funds each day to settle the aforementioned "on
us" transactions processed that same day;
(d) Except as provided in Section 4.1(c), the Bank shall credit funds from
the applicable Settlement Account or as otherwise provided by NDPS
pursuant to the Credit Facility to the Merchant Depository Accounts
maintained with it by Merchants in respect of Credit Card Transactions
in the Ordinary Course of the Bank's business.
(e) Upon the receipt of the information described in Section 4.1(a), the
Bank shall, in the Ordinary Course of the Bank's business, Originate
and transmit to the applicable Clearing System a file specifying the
amounts of funds from the applicable Settlement Account or as otherwise
provided by NDPS pursuant to the Credit Facility to be credited to
Merchants whose Merchant Depository Accounts are maintained with other
financial institutions. If permitted by the applicable Laws,
Association Rules and Clearing System Rules, and upon the request of
NDPS, the Bank shall use Commercially Reasonable Efforts to offer NDPS
all reasonable assistance to enable NDPS to itself Originate Card
Transactions and perform EFT through the applicable Clearing System,
including but not limited to, serving as the Originating financial
institution for such transactions. In such event, NDPS agrees to comply
with all applicable Laws, Association Rules and Clearing System Rules.
(f) The parties acknowledge that, from time to time, there may be
insufficient funds in the applicable Settlement Account to allow the
Bank to credit Merchants' accounts pursuant to Sections 4.1(d) and (e).
In such event, the amount of the Shortfall shall be deemed as having
been drawn down
16
by NDPS on the date of the Shortfall under the terms of the Credit
Facility.
(g) The parties acknowledge that the Assets Sold (as defined in the Asset
Purchase Agreement) include certain point-of-sale terminals and related
equipment and software located in the Bank's branches, and that, for a
period of six (6) months from the Closing Date, the Bank shall not be
required to pay any rent or other payments to NDPS or GPI Canada in
respect of such terminals and related equipment and software. After the
six (6) month period, management of each of the relevant Bank branches
shall have the option of either entering into terminal rental
agreements with GPI Canada at a monthly rate of $20.00 per terminal per
month or returning such point-of-sale terminals and related equipment
and software to GPI Canada.
(h) The parties acknowledge that the Bank currently processes certain cash
advances at its branches for cardholders using Credit Cards issued by
the Bank, that such transactions are processed using the point-of-sale
terminals described in the preceding paragraph (the "ON US CASH
ADVANCES"), that such transactions are not processed through the Credit
Card Interchange System, and that no revenue is attributed to the
Merchant Business in respect of On Us Cash Advances. The parties
acknowledge that the On Us Cash Advances shall continue to be processed
on the basis described in the preceding sentence until the earlier of
the end of the Transition Period and the date upon which the BINs used
by the Bank in connection with the Merchant Business have been
segregated from the BINs used by the Bank in connection with the Bank's
Credit Card issuing business. The Parties further acknowledge that
nothing in this Section 4.1(h) impacts upon the revenues attributed to
the Merchant Business in connection with cash advances processed at the
Bank's branches for cardholders using Credit Cards issued by any Person
other than the Bank.
17
SECTION 4.2 ACCEPTANCE, DELIVERY, AND SETTLEMENT OF DEBIT CARD TRANSACTION
RECORDS.
(a) NDPS shall accept Debit Card Transaction Records from Merchants in
electronic form and shall process and transmit to the Bank in the
Ordinary Course of NDPS' business summary information in the form
customarily used or required by the applicable Network Organization
including information as to the amounts to be posted to the accounts of
those Merchants whose Merchant Depositary Accounts are maintained with
the Bank.
(b) The Bank shall credit funds from the applicable Settlement Account, or
as otherwise provided by NDPS pursuant to the Credit Facility, to the
Merchant Depository Accounts maintained with it by Merchants in respect
of Debit Card Transactions in the Ordinary Course of the Bank's
business.
(c) Upon the receipt of the information described in Section 4.2(a), and at
the request of NDPS, the Bank shall Originate and transmit a file to
the applicable Clearing System to enable a reconciliation of the
amounts of funds from the applicable Settlement Account or as otherwise
provided by NDPS pursuant to the Credit Facility to be credited to
Merchants whose Merchant Depository Accounts are maintained with other
financial institutions. If permitted by applicable Laws, Association
Rules and Clearing System Rules, and upon the request of NDPS, the Bank
shall use Commercially Reasonable Efforts to offer NDPS all reasonable
assistance to enable NDPS to itself Originate Card Transactions and to
perform EFT through the applicable Clearing System, including without
limitation, serving as the Originating financial institution for such
transactions. In such event, NDPS agrees to comply with all applicable
Laws, Association Rules and Clearing System Rules.
(d) The Bank shall accept the Debit Card Transaction Records referred to in
paragraph (a) for Settlement in the Ordinary Course of the Bank's
business as the "Settlement Agent", as such term is defined in the
Interac rules, and upon the request of NDPS, shall serve as the "Direct
Connector", as such term is defined in the Interac rules.
(e) The parties acknowledge that, from time to time, there may be
insufficient funds in the applicable Settlement Account to allow the
Bank to credit Merchants' accounts pursuant to Section 4.2(b). In such
event, the amount of the Shortfall shall be deemed as having been drawn
by NDPS on the date of the Shortfall under the terms of the Credit
Facility or, if a drawdown cannot occur, then such amount shall be
repaid to the Bank by NDPS promptly upon receipt of notice thereof.
18
SECTION 4.3 ACCEPTANCE, DELIVERY AND SETTLEMENT OF MERCHANT'S EDGE CARD
TRANSACTIONS.
(a) NDPS shall accept MasterCard and American Express Card Transaction
Records in electronic form from Merchants participating in the
Merchant's Edge Program and shall transmit to the Bank in the Ordinary
Course of NDPS' business summary information of the amounts to be
posted to the accounts of those Merchants whose Merchant Depository
Accounts are maintained with the Bank and shall transmit to either
American Express or National Bank, as applicable, the transaction
information necessary for it to settle the transactions.
(b) The Bank agrees to credit funds from the applicable Settlement Account
or as otherwise provided by NDPS pursuant to the Credit Facility to the
Merchant Depository Accounts maintained with it by Merchants in the
Ordinary Course of the Bank's business.
(c) The Bank shall transfer funds from the applicable current account
maintained by either National Bank or American Express at the Bank to
the applicable Settlement Account in connection with the funds credited
pursuant to Section 4.3(b).
(d) In addition to the foregoing, the parties agree to comply with the
agreement between NDPS, the Bank and National Bank of Canada and the
agreement between NDPS, the Bank and American Express to be entered
into with relevant Merchants in respect of the Merchant's Edge Program.
SECTION 4.4 AMENDMENTS. The parties acknowledge that the procedures set out in
Section 4 may be amended by NDPS from time to time provided that such amended
procedures are in accordance with applicable Laws, Association Rules and
Clearing System Rules and the Merchant Agreements and provided further that (i)
the Service Levels set out in SCHEDULE 3 are maintained in all material respects
(subject to amendment of such Service Levels in accordance with the provisions
of this Agreement) and (ii) there is no material adverse impact on the Bank's
cost of providing Bank Services or Transition Services.
SECTION 5. PAYMENTS AND ACCOUNTS; CLEARING ARRANGEMENTS
SECTION 5.1 General.
(a) The Bank shall maintain internal, segregated settlement accounts (the
"SETTLEMENT ACCOUNTS"), the sole purpose of which shall be for the Bank
to receive funds from the Credit Card Interchange Systems and Network
Organizations, as the case may be, in connection with the Merchant
Business. The Bank shall make the appropriate arrangements and grant
any necessary consents required from the Bank in order to permit NDPS
to determine the current balance of each Settlement Account at any time
and
19
by the means best able to provide NDPS and/or GPI Canada with the most
current balance available, including, without limitation and if
available, by direct electronic review by NDPS and/or GPI Canada.
(b) The Bank shall provide NDPS and/or GPI Canada a monthly statement of
withdrawals and deposits for each Settlement Account.
(c) The Bank shall on each Business Day after the transfers referred to in
Sections 4.1(d), 4.2(b) and 4.3(b) have been effected, pay any
remaining amounts in the Settlement Accounts to an account designated
by NDPS (the "NDPS ACCOUNT").
(d) The parties agree that, without the express written consent of both the
Bank and NDPS, neither NDPS nor the Bank shall, except as provided
herein, be entitled to, or to make any withdrawals or take any other
action with respect to, the Settlement Accounts.
SECTION 5.2 WITHDRAWAL OF ACCOUNT FEES FROM MERCHANT DEPOSITORY ACCOUNTS. On a
monthly basis, or more frequently as determined by NDPS, NDPS shall direct the
Bank to withdraw funds from each Merchant Depository Account maintained with the
Bank in respect of service fees owed by the related Merchant pursuant to the
applicable Merchant Agreement and to Originate and transmit to the applicable
Clearing System a file that contains the service fees owed by the Merchant whose
Merchant Depository Account is maintained with financial institutions other than
the Bank (collectively, the "ACCOUNT Fees"). NDPS and/or GPI Canada shall, on
each Business Day, direct the Bank to withdraw funds from each Merchant
Depository Account in the amount of any applicable Chargebacks. The Bank shall
cause the Account Fees and Chargebacks, if any, to be deposited into the NDPS
Account.
SECTION 5.3 SETTLEMENT ACCOUNTS. The parties agree that the Settlement Accounts
shall be in the name of the Bank to comply with Association Rules concerning the
use by NDPS of the Bank's BIN numbers, as set forth in this Agreement.
SECTION 6. EXCLUSIVITY AND MARKETING
SECTION 6.1 REFERRAL OF POTENTIAL MERCHANTS.
(a) The Bank shall, and shall cause its Subsidiaries or any other Person
under its Control to, refer only to NDPS and/or GPI Canada any Person
in the Territory who expresses interest in obtaining, referring or
utilizing Merchant Processing Services, and neither the Bank nor any of
its Subsidiaries, nor any other Person under its Control, shall solicit
any such Person on their own behalf or on behalf of any Person other
than NDPS and/or GPI Canada for Merchant Processing Services.
(b) NDPS and/or GPI Canada shall pay the Bank an amount to be agreed upon
from time to time by NDPS and/or GPI Canada and the Bank, acting
reasonably, for each merchant that enters into a fully executed
Merchant
20
Agreement and that is referred to NDPS and/or GPI Canada by a branch of
the Bank.
(c) If NDPS and/or GPI Canada do not wish to enter into a Merchant
Agreement with a potential merchant customer referred to NDPS and/or
GPI Canada by the Bank, NDPS and/or GPI Canada shall notify the Bank as
soon as reasonably practicable and, upon receipt of such notice, the
Bank may request that NDPS and/or GPI Canada accept such merchant in
exchange for the Bank's agreement to subsidize or otherwise contribute
or provide rights of indemnity with respect to the Merchant Agreement.
If NDPS and/or GPI Canada and the Bank agree upon the terms and
conditions of such agreement, NDPS and/or GPI Canada shall accept such
merchant subject to such arrangement.
(d) If NDPS and/or GPI Canada do not wish to enter into a Merchant
Agreement with a potential merchant customer referred to NDPS and/or
GPI Canada by the Bank (and the Bank and NDPS and/or GPI Canada do not
agree upon the subsidy or other contribution arrangements as described
in Section 6.1(c)), or if, in the opinion of NDPS and/or GPI Canada,
NDPS and/or GPI Canada do not have the capability of serving the
prospective customer, NDPS and/or GPI Canada may refer such prospective
customer to a third party selected by NDPS and/or GPI Canada that is
acceptable to the Bank, acting reasonably.
(e) In the event that the third party declines to enter into a merchant
agreement or NDPS and/or GPI Canada does not refer a prospective
customer to a third party pursuant to Section 6.1(d), then NDPS and/or
GPI Canada shall so notify the Bank and the Bank shall have the
opportunity to refer the merchant to another Person.
SECTION 6.2 MERCHANT DEPOSITORY ACCOUNTS During the term of the Agreement, NDPS
and/or GPI Canada shall use Commercially Reasonable Efforts to encourage new
merchant customers to whom the Merchant Business is advertised or branded in
association with the Bank Marks to open Merchant Depository Accounts with the
Bank. During the term of this Agreement NDPS shall not to solicit or encourage
Merchants who maintain their Merchant Depository Accounts with the Bank to
transfer such accounts to any other financial institution.
SECTION 6.3 NEW PRODUCTS AND SERVICES. NDPS and the Bank agree to work together
in the development, distribution and marketing of emerging payment solutions.
SECTION 7. CHARGE-BACKS, CREDIT LOSSES AND RISK MANAGEMENT
SECTION 7.1 CHARGEBACKS AND CREDIT LOSSES.
(a) Except as set forth in Section 7.2 and as otherwise provided in the
Asset Purchase Agreement or the Transition Agreement, NDPS shall be
21
responsible for, and reimburse the Bank in respect of, all unpaid
Chargebacks and Credit Losses and costs of collection, if any, with
respect to transactions with Merchants with a sales date occurring on
or after the Effective Time under the Asset Purchase Agreement unless
the Chargeback or Credit Loss results from the failure by the Bank to
perform its obligations under this Agreement or the Transition
Agreement.
(b) NDPS shall process Chargebacks and Credit Losses relating to the
Merchant Agreements in an expeditious manner in the Ordinary Course of
its business.
(c) In the event NDPS, acting reasonably, deems it prudent to establish a
reserve (a "RESERVE ACCOUNT") for a Merchant whose Merchant Depository
Account is maintained by the Bank, the Bank shall, if and to the extent
permitted by the account agreement with the Merchant and by applicable
Law, within four (4) hours of the request by NDPS, debit the amount of
the reserve specifically requested by NDPS or place a freeze on
withdrawals by the Merchant from the Merchant Depository Account. In
the event the Merchant is a Key Account, the request from NDPS shall be
considered a Key Account Notice relating to an Emergency and shall be
dealt with in accordance with Section 2.7. The establishment of a
Reserve Account or a freeze on a Merchant Depository Account shall not
result in or constitute a waiver or limitation of any rights of set off
or other rights which the Bank may have against a Merchant or in
respect of the Merchant Depository Accounts in connection with other
obligations of any of the Merchants to the Bank.
SECTION 7.2 PAYMENT FOR CHARGEBACKS AND CREDIT LOSSES. In respect of each twelve
month period commencing after the Effective Date, the Bank agrees to pay NDPS
the amount, if any, by which the aggregate of all unpaid Chargebacks and Credit
Losses applicable to any Merchant listed on SCHEDULE 7.2 arising out of sales
transactions occurring during such twelve month period exceeds an amount equal
to twice the value of unpaid Chargebacks and Credit Losses experienced by the
Bank and attributable to such Merchant during the one year period ending October
31, 1999. The obligation of the Bank in the preceding sentence shall survive
until the earliest to occur of (a) three years from the Effective Date of this
Agreement and (b) the later of (i) the termination of the Transition Period and,
(ii) the date on which such Merchant has entered into a New Merchant Agreement,
and (c) the date on which NDPS assigns its interest under the applicable
Assigned Merchant Agreement to a third party other than an Affiliate. NDPS shall
notify the Bank within a reasonable time after experiencing uncollected
Chargebacks and Credit Losses in respect of any such Merchant and to exercise
its Commercially Reasonable Efforts to collect all such amounts. NDPS shall act
diligently and in a commercially reasonable manner in negotiating a New Merchant
Agreement with any of the Merchants listed on SCHEDULE 7.2. As soon as NDPS
becomes aware that it has a right to payment from the Bank under this Section
7.2 in respect of a Merchant, it shall forthwith notify the Bank and the Bank
shall have no obligation to pay any amounts under this Section 7.2 that relate
to the sales transactions with the Merchant occurring
22
after the date that NDPS could terminate the relevant Merchant Agreement in
accordance with its terms once the Bank has been notified of its indemnification
obligation set out in this Section 7.2 in respect of the Merchant. NDPS and the
Bank agree that: (i) some of the Merchants listed on SCHEDULE 7.2 are Merchants
for whom the applicable Merchant Agreement applies to the Merchant and to
business divisions or Affiliates of the Merchant, (ii) all such divisions and
Affiliates are aggregated (together with the Merchant) for purposes of SCHEDULE
7.2, and (iii) for each such Merchant, no claim by NDPS for payment under this
Section 7.2 may be made unless the total of all unpaid Chargebacks and Credit
Losses for the relevant one-year period referred to above exceeds twice the
value of unpaid Chargebacks and Credit Losses for the one year period ending
October 31, 1999 calculated in respect of the Merchant on an aggregate basis and
not on a division-by-division or Affiliate-by-Affiliate basis.
SECTION 7.3 FOREIGN INTERCHANGE.
(a) The parties acknowledge that, as part of the Merchant Business, the
Bank has acquired VISA Credit Card Transactions outside of Canada for
the payment of goods or services provided by a Merchant that is a party
to an Existing Merchant Agreement ("FOREIGN Transactions"). If NDPS
continues to acquire Foreign Transactions from and after the date
hereof, the Bank shall pay to NDPS in respect of each Foreign
Transaction an amount (the "FOREIGN INTERCHANGE AMOUNT"), if any, equal
to the difference between:
(i) the Interchange Fee payable on the Foreign Transaction in
accordance with the applicable VISA Rules; and
(ii) an amount calculated on the same basis (but applying the
Interchange Fee in effect at the time of calculation) that the
Bank was using to calculate the Interchange Fee payable to VISA
prior to November 1, 2000 for the same Foreign Transaction,
subject to a maximum payment per Foreign Transaction equal to the payment
that would be required based on the applicable Interchange Fees in effect
on the date hereof.
(b) Any Foreign Interchange Amounts calculated from time to time to be
payable by the Bank to NDPS under Section 7.3(a) shall be paid (i) only
for the duration of the current term, excluding renewal terms, of the
applicable Existing Merchant Agreement, and (ii) only if and to the
extent the pricing provisions of the applicable Existing Merchant
Agreement cannot be amended during the current term to eliminate the
Foreign Interchange Amount.
(c) NDPS shall deliver a notice (a "FOREIGN INTERCHANGE NOTICE") to the
Bank on or after the last day of each calendar month specifying the
23
aggregate Foreign Interchange Amounts payable by the Bank for such
calendar month and setting forth a calculation thereof. The Bank shall
have the right to review the relevant books and records of NDPS to
confirm the accuracy of NDPS's calculation of the Foreign Interchange
Amounts. The Bank shall pay the Foreign Interchange Amounts within 10
Business Days of receipt of the Foreign Interchange Notice.
(d) NDPS agrees to co-operate and render all commercially reasonable
assistance to the Bank in connection with any proceedings or
negotiations between the Bank and VISA with respect to the
interpretation and application of the VISA Association Rules to Foreign
Transactions.
(e) If, as a result of the proceedings or negotiations referred to in
paragraph (c), the Bank is successful in obtaining a reduced
Interchange Fee for Foreign Transactions and Purchaser receives a
reimbursement for Foreign Transactions in respect of which the Bank has
paid Foreign Interchange Amounts, then NDPS shall in turn pay to the
Bank the amount of the reimbursement (to a maximum equal to the Foreign
Interchange Amounts paid for such Foreign Transactions).
SECTION 8. MEMBERSHIP IN CREDIT CARD ASSOCIATIONS AND NETWORK ORGANIZATIONS
SECTION 8.1 VISA AND INTERAC MEMBERSHIP BY BANK. During the term of the
Agreement, the Bank shall remain a member of VISA and Interac in Canada and a
member of VISA and MasterCard in the United States through an Affiliate and to
carry out its obligations as a member thereof in the Ordinary Course.
SECTION 8.2 COMPLIANCE WITH VISA AND INTERAC REQUIREMENTS BY NDPS.
During the term of the Agreement, NDPS and/or GPI Canada shall cooperate with
the Bank in connection with NDPS and/or GPI Canada and/or the Bank obtaining and
maintaining any approvals from Credit Card Associations, Network Organizations
and Clearing Systems as are required in connection with the performance by NDPS
and/or GPI Canada of the NDPS Services. After the date that the Bank's BINs and
ICAs have been segregated as described in the Asset Purchase Agreement, NDPS
shall undertake all reporting, audit, compliance and related procedures ("BIN
REPORTING") required by the applicable Association Rules with respect to the use
of BINs and ICAs in Canada and the United States, whether such BIN Reporting is
required to be done on a regular basis or on an ad hoc basis pursuant to a
request by the relevant Card Association or any Governmental Entity. Prior to
the date that the Bank's BINs and ICAs have been segregated as described above,
the Bank shall be responsible for all required BIN Reporting.
SECTION 8.3 PROCESSING AND CLEARING ARRANGEMENTS.
(a) During the term of this Agreement, the Bank will maintain distinct VISA
BIN numbers adequate for use in clearing all of the Credit Card
24
Transactions of NDPS' Merchant Business in Canada. In consideration for
the Bank's performance of its obligations in the preceding sentence,
NDPS will reimburse the Bank for all out-of-pocket costs payable to
VISA and incurred by the Bank or any of its Affiliates in connection
with the maintenance and operation of the Canadian BINs for NDPS'
Merchant Business in Canada.
(b) Promptly after the date hereof, the Bank and NDPS will in good faith
negotiate the terms and conditions of an agreement (the "U.S. BINS
AGREEMENT") pursuant to which, the Bank will cause a U.S. Affiliate of
the Bank ("AMICUS") to maintain distinct VISA and MasterCard BIN and
ICA numbers adequate for use in clearing of all the Credit Card
Transactions of NDPS' Merchant Business in the United States (the
"BANK'S U.S. ICAS/BINS"). Among other things, the U.S. BINs Agreement
will contain a provision by which Amicus will agree to be bound by the
provisions of Section 8.3(j).
(c) The U.S. BINs Agreement will terminate if: (i) this Marketing Alliance
Agreement is terminated in accordance with its terms; or (ii) there is
a change in Laws or Association Rules which would adversely impact the
Bank's ability to continue to provide the Bank's U.S. ICAs/BINs for use
by NDPS' Merchant Business; or (iii) the Bank within its sole
discretion elects to terminate its banking businesses in the United
States to an extent that would make the Bank no longer eligible to
maintain the Bank's U.S. ICAs/BINs under the applicable Association
Rules.
(d) If the Bank desires to terminate the U.S. BINs Agreement pursuant to
clause (ii) or (iii) of the preceding Section 8.3(c), the Bank will
give NDPS 365 days' prior written notice, unless a shorter notice
period is required in order for the Bank to comply with applicable
Laws.
(e) The U.S. BINs Agreement will provide that NDPS will pay to Amicus a
quarterly fee (the "NDPS USER'S FEE") based on a percentage of the
dollar amount of all Credit Card Transactions of NDPS' Merchant
Business in the United States (the "AGGREGATE TRANSACTION VOLUME")
cleared through the Bank's U.S. ICAs/BINs in such quarter. Amicus and
NDPS will negotiate annually the NDPS User's Fee in respect of the
ensuing twelve months and such NDPS User's Fee will be on a basis
consistent with the rates charged by other United States financial
institutions for making their ICAs/BINs available to arm's-length
parties having a credit rating and portfolio quality comparable to
NDPS's credit rating and the portfolio quality in respect of NDPS'
Merchant Business in the United States.
(f) To facilitate the negotiation of the NDPS User's Fee and for monitoring
purposes, NDPS will provide to Amicus and the Bank, in such reasonable
detail and frequency as the Bank may from time to time request,
25
information concerning each Merchant's transaction volume and credit
worthiness.
(g) The Bank will reimburse NDPS for each payment of the NDPS User's Fee
within 30 days of receipt by Amicus of the NDPS User's Fee; provided
that the obligation of the Bank under this Section 8.3(g) shall
terminate on the earlier of:
(i) the effective date of an assignment by Amicus of the Bank's U.S.
ICAs/BINs pursuant to Section 8.3(j); and
(ii) 365 days after the earlier of
(A) the date Amicus ceases to be a Subsidiary of the Bank, and
(B) the date the Bank gives NDPS notice that Amicus will cease to
be a Subsidiary of the Bank, as long as Amicus does in fact
cease to be a Subsidiary.
(h) NDPS will (i) reimburse the Bank and Amicus for all out-of-pocket costs
payable to VISA and MasterCard incurred by the Bank or any of its
Affiliates in connection with the maintenance and operation of the U.S.
ICAs/BINs for use by NDPS, (ii) be responsible for the cost of all
funding requirements applicable to the Merchant Business being
processed through the Bank's U.S. ICAs/BINs, (iii) reimburse the Bank
for any increase in the costs incurred by the Bank or any of its
Affiliates that are attributable to any incremental capital commitments
or allocations that are required to be set aside by the Bank or any of
its Affiliates as a result of maintaining and operating the Bank's U.S.
ICAs/BINs for NDPS' Merchant Business in the United States (which costs
will be consistent with any charges or rates charged by the Bank
internally for the capital allocated by the Bank to its own divisions
and business units) and (iv) be responsible for the performance of all
reporting, monitoring and other similar obligations under applicable
Laws and Association Rules, consistent with market practice and as may
be reasonably requested by the Bank from time to time, provided that,
in each case, the amount of the NDPS User's Fee received by Amicus will
be credited towards the amounts otherwise payable by NDPS pursuant to
the preceding clauses (i) through (iv) and, notwithstanding clause
(iii), the Bank will first be required to use Commercially Reasonable
Efforts to guarantee or provide similar support in respect of the
obligations of Amicus pursuant to the U.S. BINs Agreement, if the Bank
is permitted or required to do so by applicable Laws and Association
Rules, before it will be entitled to reimbursement from NDPS in respect
of the capital costs incurred in connection with such US BINs and ICAs.
26
(i) If, at any time during the term of this Agreement, the Bank is
permitted under the applicable Association Rules to obtain a MasterCard
BIN number or an ICA number for use in Canada, the Bank will, upon
notice from NDPS, use Commercially Reasonable Efforts to obtain a
MasterCard BIN number or ICA number for use by NDPS in the Merchant
Business in accordance with this Agreement. If, at any time during the
term of this Agreement, the Bank or any of its Affiliates is permitted
under the applicable Association Rules to obtain a BIN number or an ICA
number for use in any other jurisdiction, the Bank will, upon notice
from NDPS, use Commercially Reasonable Efforts to obtain such BIN
number or ICA number for use by NDPS in the Merchant Business in
accordance with all provisions of this Agreement. If, during the term
of this Agreement, there is a change of Control of NDPS or Global
Payments, the parties will negotiate in good faith with a view to
settling the commercial terms upon which NDPS will be permitted to
continue to use the Bank's BINs and ICAs in connection with the
Merchant Business. In the event that the parties are unable to reach
agreement within twelve months from such change of Control, the Bank
will have the right to terminate the use of the Bank's BINs and ICAs by
NDPS and its Affiliates upon 120 days notice, which notice can be given
at any time after such change of Control.
(j) If NDPS desires the Bank (or the applicable Affiliate) to assign any or
all of the ICA and/or BIN numbers used in connection with the Merchant
Business, the Bank will (or will compel the applicable Affiliate),
subject to applicable Laws and Association Rules and upon reasonable
notice from NDPS, enter into an assignment agreement, in a form
acceptable to the Bank acting reasonably, with an assignee designated
by NDPS within a reasonable time after receipt of such notice, whereby
such assignee will assume all of the Bank's (or the applicable
Affiliate's) obligations and liabilities under the Bank's (or the
applicable Affiliate's) agreement with the Credit Card Association
issuing the ICA and/or BIN numbers as to transactions with a Credit
Card Clearing Date occurring after the effective date of such
assignment. Prior to the effective date of the assignment, the parties
will in good faith determine the amendments, if any, that are required
to this Agreement as a result of the assignment.
(k) Subject to the terms of applicable Association Rules, NDPS may from
time to time request that the Bank (or the applicable Affiliate) become
the assignee of any ICA or BIN number that NDPS is then using for
processing transactions and/or to become a party to the underlying
merchant agreements whose Credit Card volumes are being processed under
such ICA/BIN. Upon the request of NDPS, the Bank (or the applicable
Affiliate) will enter into an assignment agreement, in a form
acceptable to the Bank acting reasonably, in respect of such numbers
from the then current owner of such ICA/BIN number and/or agree to
become a party to the underlying merchant agreements whose Credit Card
Transactions are being processed under such numbers it being agreed
that
27
neither the Bank nor any Affiliate of the Bank will have any
liabilities or obligations under the assigned merchant agreements or in
respect of such assigned BINs or ICAs other than as required to comply
with applicable Association Rules. Any such assignment will be
effective only as to transactions with a Credit Card Clearing Date
occurring after the effective date of such assignment. Upon the
assignment becoming effective, the assigned merchant agreements will be
considered to be New Merchant Agreements for purposes of this
Agreement.
SECTION 8.4 SPONSORSHIP. Upon the request of NDPS and/or GPI Canada, and subject
to the applicable Association Rules, the Bank agrees to use its Commercially
Reasonable Efforts to sponsor NDPS and/or GPI Canada any of its Affiliates and
any of the Independent Sales Organizations NDPS utilizes in connection with the
Merchant Business as required by the Credit Card Associations and Network
Organizations, provided that NDPS and/or GPI Canada shall reimburse the Bank in
respect of any out-of-pocket costs incurred by the Bank in respect of such
sponsorship.
SECTION 9. SERVICE LEVELS AND AMENDMENTS
SECTION 9.1 COMPLAINTS. NDPS and/or GPI Canada shall implement customer
complaint policies and procedures consistent with the Ordinary Course of its
business to deal with complaints concerning the NDPS Services.
SECTION 9.2 CHANGES IN LAW. ETC. The parties shall identify and assess the
impact on the Services of a change in applicable Laws, Association Rules or
Clearing System Rules that relate to the Services (a "LEGAL CHANGE"). If NDPS
and/or GPI Canada or the Bank becomes aware of an impending or actual Legal
Change, it shall notify the other of such Legal Change and provide an assessment
of its impact. The parties shall in good faith attempt to agree upon any
required modifications to the Services required as a result of a Legal Change.
While a party is making any agreed upon modifications resulting from a Legal
Change, it shall use Commercially Reasonable Efforts to continue to provide the
Services to be provided by it at the specified Service Levels. If, however, such
Legal Change prevents the party from meeting the Service Levels, the party shall
use its Commercially Reasonable Efforts to arrange a reasonable solution which
gives effect to the intent of this Agreement as closely as practicable and that
delivers Service in the most commercially reasonable manner in the
circumstances. If such Legal Change materially affects a party's cost of
providing Services, NDPS and/or GPI Canada and the Bank shall in good faith
negotiate an adjustment of the applicable Service Levels in accordance with
Section 9.3.
SECTION 9.3 PROBLEM NOTIFICATION. The Bank or NDPS and/or GPI Canada, shall
notify the other party in the event either the Bank or NDPS and/or GPI Canada as
the case may be becomes aware of an event, occurrence, error, defect or
malfunction materially affecting the ability of NDPS and/or GPI Canada or the
Bank to perform the Services. Failure by any party to give any notice pursuant
to this Section 9.3 relating to a problem relating to the other party shall not
relieve the other party of any liability
28
hereunder. If more than one problem arises or occurs at one time, the parties
shall mutually agree upon the order of priority in which the problems are to be
addressed and resolved.
SECTION 9.4 ROOT-CAUSE ANALYSIS AND RESOLUTION. Each of NDPS and/or GPI Canada
and the Bank shall, promptly after:
(a) any material failure of either party to provide any of the Services in
accordance with this Agreement; or
(b) a party's repeated failure to provide any of the Services in accordance
with this Agreement;
and in any event within three (3) days of receipt of a notice from a party to
the other in respect thereof, commence an analysis to identify the cause of such
failure; and as soon as commercially reasonable thereafter provide a report
detailing the cause of, and procedure for correcting, such failure. In addition,
the party responsible for the provision of the Service shall deliver to the
other party within a commercially reasonable time a corrective action plan that
addresses actions to be taken in an effort to try to avoid a recurrence of such
failure.
SECTION 10. SERVICE LOCATIONS AND SECURITY
SECTION 10.1 RIGHTS OF ACCESS TO NDPS SERVICE LOCATIONS. Subject to the
confidentiality requirements in this Agreement or as otherwise agreed to by NDPS
and/or GPI Canada and the Bank, the Bank and its Advisors shall be permitted
access to any NDPS Service Location during the normal operating hours for such
NDPS Service Location and in accordance with any reasonable security procedures
in effect at the time of such access; provided, however, that the Bank and its
Advisors shall, except in emergency situations, make reasonable accommodation
for the need of NDPS and/or GPI Canada to run its business unimpeded,
particularly at busy times of the year.
SECTION 10.2 NDPS SERVICE LOCATIONS. NDPS and/or GPI Canada agree that it shall
not provide any of the NDPS Services from a location outside of Canada or the
United States without obtaining all required approvals from applicable
Governmental Entities.
SECTION 10.3 SECURITY PROCEDURES. As part of the NDPS Services, NDPS and/or GPI
Canada shall implement, maintain and enforce the NDPS Security Policies and
Procedures. As part of the Bank Services, the Bank shall implement, maintain and
enforce the Bank Security Policies and Procedures.
SECTION 10.4 UNAUTHORIZED ACCESS OR COPYING. The Bank shall be given prompt
notice following NDPS and/or GPI Canada becoming aware of any unauthorized
copying of, or access to, the Bank Data, or any part thereof, such notice to be
in the form of a reasonably detailed incident report.
29
SECTION 10.5 DATA SECURITY. To the extent that NDPS and/or GPI Canada has,
pursuant to this Agreement, the right to gain access to or use any computer
system operated by the Bank or by an Affiliate of the Bank (a "CIBC SYSTEM"),
NDPS and/or GPI Canada acknowledges, agrees and covenants that:
(a) except as expressly otherwise provided in this Agreement or any of the
other Operative Documents, NDPS and/or GPI Canada shall have no right
or title to, interest in or ownership of, any CIBC System or any
component or portion thereof;
(b) except as expressly otherwise provided in this Agreement or any of the
other Operative Documents, NDPS and/or GPI Canada shall neither permit
nor enable anyone other than its employees or Advisors to access or use
any CIBC System or any component or portion thereof;
(c) except as expressly otherwise provided in this Agreement or any of the
other Operative Documents, NDPS and/or GPI Canada shall not, and shall
not facilitate or assist others to, gain access to or use any CIBC
System or any component thereof;
(d) NDPS and/or GPI Canada shall not, and shall not facilitate or assist
others to, reverse compile or disassemble any object code version of
any software application or program in the CIBC System;
(e) NDPS and/or GPI Canada shall not make any untrue or unsubstantiated
claim or representation as to the ownership of, or act as the owner of,
any CIBC System or any component or portion thereof;
(f) NDPS and/or GPI Canada shall not, and shall not facilitate or assist
others to, gain access to or attempt to gain access through any CIBC
System in respect of which NDPS and/or GPI Canada has, under this
Agreement or any other Operative Agreement, a right of access, to any
other CIBC System or component or portion thereof which NDPS and/or GPI
Canada do not, under this Agreement or any other Operative Agreement
have the right to access; and
(g) except as may otherwise be provided in this Agreement or any of the
other Operative Documents, NDPS and/or GPI Canada shall not, nor shall
it facilitate or assist others to, perform any act that is inconsistent
with or in violation of this Agreement, or that may jeopardize the
rights of the Bank, its Affiliates or any third party licensors, in the
CIBC System.
SECTION 10.6 RIGHTS OF ACCESS TO BANK SERVICE LOCATIONS.
(a) Subject to the confidentiality requirements in this Agreement or as
otherwise agreed to by the parties, each of NDPS and/or GPI Canada and
their Advisors shall be permitted access, for purposes of the Merchant
Business, to any Bank Service Location during the normal operating
hours
30
for such Bank Service Location and in accordance with any reasonable
security procedures in effect at the time of such access; provided,
however, that each of NDPS and/or GPI Canada and their Advisors shall,
except in emergencies, make reasonable accommodation for the need of
the Bank to run its business unimpeded, particularly at busy times of
the year.
(b) The Bank agrees to use its Commercially Reasonable Efforts to assist
NDPS and to request Intria Items Inc. and Intria-HP Corporation to
assist in the migration from the Bank's platform (the "BANK PLATFORM")
using Intria Items Inc. and Intria-HP Corporation, on which Card
Transactions are processed, to a platform owned and operated by NDPS or
its Affiliate including, without limitation, granting reasonable access
to such Bank Platform, and disclosing such information related to the
configuration, functionality and application programming interfaces of
the Bank Platform as are reasonably required by NDPS to achieve such
migration; provided, however, that such assistance, access and
disclosure is subject to:
(i) the Bank's reasonable security and privacy policies and
procedures;
(ii) any obligations of confidentiality or like restrictions imposed
upon the Bank under any agreements to which the Bank is a party.
(c) If, in connection with such migration, NDPS and/or GPI Canada requests
Intria Items Inc. or Intria-HP Corporation to perform services NDPS
and/or GPI Canada shall pay the reasonable costs of Intria Items Inc.
or Intria-HP Corporation incurred in connection with such assistance,
access and disclosure, provided that NDPS and/or GPI Canada has agreed
in advance to pay such costs.
SECTION 10.7 UNAUTHORIZED ACCESS OR COPYING. The Bank shall give NDPS and/or GPI
Canada prompt notice of the Bank becoming aware of any unauthorized copying of,
or access to, the NDPS Data, or any part thereof, such notice to be in the form
of a reasonably detailed incident report.
SECTION 10.8 CO-OPERATION WITH SPECIAL INVESTIGATIONS. NDPS and/or GPI Canada
and the Bank shall each provide reasonable co-operation and assistance to the
other and their respective Advisors with respect to any investigation of a
security breach or alleged breach at an NDPS Service Location or a Bank Service
Location.
SECTION 11. REPORTS AND DATA
SECTION 11.1 NDPS REPORTS. As part of the NDPS Services, NDPS shall provide to
the Bank such reports as the Bank and NDPS and/or GPI Canada may mutually agree
upon from time to time. The reasonable costs of such reports shall be borne by
the Bank
31
except for reports provided which are generated in the Ordinary Course of NDPS's
and/or GPI Canada's business without additional costs or undue burden.
SECTION 11.2 BANK REPORTS. As part of the Bank Services, the Bank shall provide
to NDPS and/or GPI Canada such reports as the Bank and NDPS and/or GPI Canada
may mutually agree upon from time to time. The reasonable costs of such
reporting shall be borne by NDPS and/or GPI Canada except for reports which are
generated in the Ordinary Course of the Bank's business without additional costs
or undue burden.
SECTION 11.3 OWNERSHIP OF THE BANK DATA. Notwithstanding NDPS' and/or GPI
Canada's use of the Bank Data in connection with providing the NDPS Services,
the Bank Data is and shall remain the property of the Bank or its customers, as
applicable. The Bank Data shall not be:
(a) used in any way, directly or indirectly, by NDPS and/or GPI Canada or
their Advisors other than to the extent necessary in connection with
the Merchant Business and to provide the NDPS Services;
(b) disclosed (other than pursuant to this Agreement) sold, assigned,
leased or otherwise provided to third parties; or
(c) commercially exploited in any way, directly or indirectly, by or on
behalf of NDPS and/or GPI Canada or their Advisors.
SECTION 11.4 ACCESS TO THE BANK DATA. Notwithstanding NDPS' and/or GPI Canada's
use of the Bank Data in connection with providing the NDPS Services, at all
times during the term of this Agreement, NDPS and/or GPI Canada shall, subject
to Section 10, provide the Bank with unrestricted access to the Bank Data used
in connection with the Services.
SECTION 11.5 RETURN OF BANK DATA. NDPS and/or GPI Canada shall at:
(a) the request of the Bank, at any time; and
(b) upon the termination of this Agreement;
promptly return to the Bank the Bank Data in its then current format or formats
or in such format or formats and on the media reasonably requested by the Bank
and mutually agreed upon by the parties, or such portion of it as has been
requested by the Bank. For greater certainty, the parties acknowledge that any
material costs incurred by NDPS in connection with the transfer of the Bank Data
from those existing formats or media to those requested by the Bank shall be
borne by the Bank. For greater certainty, the Bank agrees that it shall not
request a return of the Bank Data in a manner which shall cause a material
change in the Services or request a return of the Bank Data if doing so would
otherwise restrict NDPS' and/or GPI Canada's ability to perform the NDPS
Services under this Agreement or the conduct of the Merchant Business. Following
such return, at the Bank's written direction, and upon payment by the Bank of
the costs thereof, NDPS and/or GPI Canada shall remove from its databases, erase
or destroy any the Bank Data
32
remaining in NDPS' and/or GPI Canada's possession, or such portion of it as the
Bank may direct. NDPS shall be relieved of its obligations to provide those
Services which require the availability of the Bank Data which have been
returned to the Bank or destroyed by NDPS in accordance with this Section 11.
SECTION 11.6 PRIVACY. The parties agree to comply with all of the requirements
of the Privacy Policies and Procedures in connection with the Assigned Merchant
Agreements and all applicable privacy Laws, Association Rules and Clearing
System Rules in connection with the provision of the Services.
SECTION 11.7 OWNERSHIP OF NDPS DATA. Notwithstanding the Bank's access to the
NDPS Data in connection with providing the Bank Services, the NDPS Data is and
shall remain the property of NDPS and/or GPI Canada or its customers, as
applicable. The NDPS Data shall not be:
(a) used, in any way, directly or indirectly, by the Bank or its Advisors
other than to the extent necessary in connection with providing the
Bank Services;
(b) disclosed (other than pursuant to this Agreement) sold, assigned,
leased or otherwise provided to third parties; or
(c) commercially exploited in any way, directly or indirectly, by or on
behalf of the Bank or its Advisors.
SECTION 11.8 ACCESS TO NDPS DATA. Notwithstanding the Bank's potential access to
NDPS Data in connection with providing the Bank Services, at all times during
the term of this Agreement the Bank shall, subject to Section 10, provide NDPS
and/or GPI Canada with unrestricted access to NDPS Data used in connection with
the Services.
SECTION 11.9 RETURN OF NDPS DATA. The Bank shall at:
(a) the request of NDPS and/or GPI Canada, at any time; and
(b) upon the termination of this Agreement;
promptly return to the Bank the Bank Data in its then current format or formats
or in such format or formats and on the media reasonably requested by NDPS
and/or GPI Canada and mutually agreed upon by the parties, or such portion of it
as has been requested by NDPS. For greater certainty, the parties acknowledge
that any material costs incurred by the Bank in connection with the transfer of
NDPS Data from those existing formats or media to those requested by NDPS and/or
GPI Canada shall be borne by NDPS and/or GPI Canada. For greater certainty, NDPS
agrees that it shall not request a return of NDPS Data in a manner which shall
cause a material change in the Services or return the NDPS Data if doing so
would otherwise materially restrict the Bank's ability to perform the Bank
Services under this Agreement. Following such return, at NDPS' and/or GPI Canada
written direction, and upon payment by NDPS and/or GPI Canada of the costs
thereof, the Bank shall remove from its databases, erase or destroy any NDPS
Data
33
remaining in the Bank's possession, or such portion of it as NDPS and/or GPI
Canada may direct. The Bank shall be relieved of its obligations to provide
those Services which require the availability of NDPS Data which have been
returned to NDPS and/or GPI Canada or destroyed by the Bank in accordance with
this Section 11.
SECTION 11.10 DATA MINING. The Bank and NDPS and/or GPI Canada agree to work
together in good faith to establish each party's rights to collect, use and
distribute the information contained in payment transactions having regard to
(i) all applicable Laws;
(ii) all contractual obligations of either the Bank of NDPS and/or GPI
Canada to any other Persons; and
(iii) the cost of collecting or gaining access to all such information.
SECTION 12. BUSINESS RECOVERY
SECTION 12.1 BUSINESS RECOVERY PLAN. NDPS and/or GPI Canada and the Bank shall:
(a) maintain their respective Business Recovery Plans in accordance with
their terms;
(b) periodically update and test the operability of their Business Recovery
Plans;
(c) provide the other party with written copies of Business Recovery Plan
promptly following any amendment;
(d) on a periodic basis, certify to the other party that the certifying
party's applicable Business Recovery Plan has been successfully tested;
(e) implement their respective Business Recovery Plans in accordance with
the applicable terms;
(f) consult with the other party regarding the priority to be given to the
Services upon the occurrence of an event that triggers any obligation
under either party's Business Recovery Plan; and
(g) not amend their respective Business Recovery Plan that may materially
affect the Merchant Business without the prior written consent of the
other party, such consent not to be unreasonably withheld.
SECTION 12.2 FORCE MAJEURE. Neither NDPS and/or GPI Canada nor the Bank shall be
liable for a failure or delay in the performance of its obligations pursuant to
this Agreement, including the failure or delay in respect of providing the
Services if, and to the extent, and only for so long as such failure or delay is
caused, directly or indirectly,
34
by fire, flood, earthquake, elements of nature or acts of God, acts of war,
terrorism, riots, civil disorders, rebellions, strikes, lock outs or labour or
supply disruptions or revolutions or any other similar causes beyond the
reasonable control of such party (each, a "FORCE MAJEURE EVENT") provided NDPS
and/or GPI Canada or the Bank, as the case may be, continues to use Commercially
Reasonable Efforts to recommence performance whenever and to whatever extent
possible without delay. If a Force Majeure Event occurs, NDPS and/or GPI Canada
or the Bank, as the case may be, shall:
(a) promptly notify the Bank or NDPS and/or GPI Canada, as the case may be,
by telephone (to be confirmed in writing within five (5) days of the
inception of such delay) of the occurrence of a Force Majeure Event;
and
(b) describe in reasonable detail the circumstances causing the Force
Majeure Event.
SECTION 13. AUDITS, REGULATORY EXAMINATIONS AND COMPLIANCE
SECTION 13.1 AUDITS AND INSPECTIONS. Upon notice, each party shall provide such
internal auditors, external auditors, and inspectors, as the inspecting party or
any Governmental Entity having jurisdiction over NDPS and/or GPI Canada or the
Bank, as applicable, may designate, with access, as requested, to the Service
Locations for the purpose of performing audits or inspections of the NDPS
Services or the Bank Services. Each party shall provide such auditors and
inspectors any assistance that they may reasonably require, at the expense of
the requesting party. If any audit by an auditor designated by a party or a
Governmental Entity or Credit Card Association, or Network Organization having
jurisdiction over the Bank or NDPS and/or GPI Canada, as applicable, results in
a party being notified that it is not in compliance with applicable Laws,
Association Rules or Clearing System Rules the party shall, within the period of
time specified by such auditor or regulatory authority, use Commercially
Reasonable Efforts to comply with such audit or regulatory authority.
SECTION 14. TERM AND TERMINATION OF AGREEMENT
SECTION 14.1 TERM OF AGREEMENT. Unless otherwise terminated by mutual agreement
of the parties or by operation of the provisions set out herein, this Agreement
shall remain in full force and effect for an initial term of ten (10) years from
the date hereof and shall be automatically extended for successive one (1) year
periods on the same terms and conditions expressed herein, or as may be amended,
unless either party gives the other party written notice of termination at least
two hundred and seventy (270) days prior to the expiration of the initial term
or any extensions or renewals thereof. In the event the Bank and NDPS and/or GPI
Canada are unable to reach agreement on a renewal hereof or in the event of
termination in accordance with this Section, the Bank and NDPS and/or GPI Canada
agree to work together to accomplish an orderly disengagement and termination of
their relationship. Except as specifically set forth above, this Agreement may
only be terminated as a result of a Bank Default as set forth
35
in Section 14.2 or as a result of an NDPS Default set forth in Section 14.3 and
then only in accordance with the provisions of Section 14.4.
SECTION 14.2 BANK'S DEFAULT. In the event that:
(a) the Bank defaults in the performance of any of the Bank Services
hereunder where the same Service Level is not achieved in a material
way for two consecutive months under this Agreement and a corrective
action plan has not been developed during the 30-day period after
written notice and demand for cure has been given by NDPS and/or GPI
Canada to the Bank (except that such period shall be extended to the
extent there shall be in effect any event which shall be deemed a Force
Majeure Event);
(b) notwithstanding any Force Majeure Event, the Bank fails to debit or
credit the Merchant Depository Accounts in accordance with Sections
4.1(c) or (d), 4.2(b) or 4.3(b) for three (3) Business Days, fails to
transmit the file to the applicable Clearing System as required by
Section 4.1(e) or 4.2(c) for three (3) consecutive Business Days, fails
to debit the Merchant Deposit Accounts in accordance with Section 5.2
within three (3) Business Days of the required date or fails to settle
with Interac in accordance with Section 4.2(d) for three (3) Business
Days or fails to ensure that the Issuing Account is adequately funded
to meet the obligations set forth in Section 4.1(c), and such default
is not cured within three (3) Business Days after written notice and
demand for cure has been given by NDPS to the Bank (unless such failure
is the result of a breach by NDPS and/or GPI Canada of its obligations
under this Agreement); or the Bank is adjudged or declared bankrupt or
insolvent or makes an assignment for the benefit of creditors, or
petitions or applies to any tribunal for the appointment of a receiver,
custodian, trustee, or similar officer for it or for any part of its
property, or commences any proceedings relating to it under any
reorganization, arrangement, readjustment of debt, dissolution or
liquidation Law or statute of any jurisdiction whether now or hereafter
in effect, or by any act indicates its consent to, approval of, or
acquiescence in, any such proceeding for it or for any part of its
property, or a receiver, liquidator, assignee, custodian, trustee or
similar official is appointed for the Bank, or any of the Bank's
property,
(c) then, in any such case the Bank shall be considered to have committed a
Bank Default under this Agreement.
SECTION 14.3 NDPS' AND/OR GPI CANADA'S DEFAULT. In the event that:
(a) NDPS and/or GPI Canada defaults in the performance of any of the NDPS
Services hereunder where the relevant Service Level is not achieved in
a material way for two consecutive months under this Agreement and a
corrective action plan has not been developed during the 30-day period
36
after written notice and demand for cure has been given by the Bank to
NDPS and/or GPI Canada committed a Bank Default (except that such
period shall be extended to the extent there shall be in effect any
event which shall be deemed a Force Majeure Event);
(b) notwithstanding any Force Majeure Event, NDPS and/or GPI Canada fails
to process and transmit or cease to be processed and transmitted
information to the Bank in accordance with Sections 4.1(a), 4.2(a) and
4.3(a) for three (3) consecutive Business Days and such default is not
cured within three (3) Business Days after written notice and demand
for cure has been given by the Bank to NDPS and/or GPI Canada (unless
such failure is due to a breach of the Bank's obligations under this
Agreement); or
(c) NDPS and/or GPI Canada is adjudged or declared bankrupt or insolvent or
makes an assignment for the benefit of creditors, or petitions or
applies to any tribunal for the appointment of a receiver, custodian,
trustee, or similar officer for it or for any part of its property, or
commences any proceedings relating to it under any reorganization,
arrangement, readjustment of debt, dissolution or liquidation Law or
statute of any jurisdiction whether now or hereafter in effect, or by
any act indicates its consent to, approval of, or acquiescence in, any
such proceeding for it or for any part of its property, or a receiver,
liquidator, assignee, custodian, trustee or similar official is
appointed for NDPS and/or GPI Canada, or any of NDPS' and/or GPI
Canada's property,
then, in any such case, NDPS and/or GPI Canada shall be considered to have
committed an NDPS Default under this Agreement.
SECTION 14.4 TERMINATION PERIOD. In the event this Agreement is to be terminated
as a result of a Bank Default under Section 14.2 or a NDPS Default under Section
14.3 of this Agreement, the parties agree that the term of this Agreement shall
automatically extend on the same terms and conditions as expressed herein for a
transition period of up to two hundred and seventy (270) days during which the
parties shall work together and use their Commercially Reasonable Efforts to
cause an orderly transition of the Merchant Business.
SECTION 14.5 TERMINATION OF USE OF BANK MARKS. NDPS and/or GPI Canada shall, in
accordance with Section 8.1 of the Trademark Licence Agreement, cease to use the
Bank Marks upon commencement of the 270-day period in Section 14.4 and shall
comply with the provisions of the Trademark Licence Agreement.
SECTION 15. DESIGNATION OF RESPONSIBLE PERSONNEL
SECTION 15.1 CLIENT RELATIONS REPRESENTATIVE. Each of the Bank and NDPS and/or
GPI Canada agree that it will from time to time designate one or more officers
or employees (the "CLIENT RELATIONS REPRESENTATIVE") who will be responsible for
all
37
communications with the other party relating to the subject matter of this
Agreement. The initial Client Relations Representatives of the Bank and NDPS
and/or GPI Canada are set forth in SCHEDULE 15 hereto.
SECTION 16. CHANGE OF CONTROL/ASSIGNMENT
SECTION 16.1 CHANGE OF CONTROL/ASSIGNMENT.
(a) The obligations of the Bank under Sections 6.1 and 6.3 of this
Agreement shall terminate at the Bank's sole discretion, upon (A) an
assignment of this Agreement by NDPS to any Person other than an
Affiliate thereof without the written consent of the Bank; or (B) a
change of Control of NDPS or Global Payments; or (C) an assignment by
NDPS or an Affiliate thereof of Merchant Agreements representing all or
substantially all of the volume of Card Transactions of the Merchant
Business at that time.
(b) The rights of NDPS and its Affiliates to use the Bank's BINs and ICAs
in accordance with the provisions of this Agreement shall terminate, at
the Bank's sole discretion, upon (A) an assignment of this Agreement by
NDPS to any Person other than an Affiliate thereof without the written
consent of the Bank; (B) a change of Control of NDPS or Global
Payments; or (C) an assignment by NDPS or an Affiliate thereof of
Merchant Agreements representing all or substantially all of the volume
of Card Transactions of the Merchant Business at that time, such that
NDPS, Global Payments or the Merchant Business, as the case may be, is
Controlled by a Canadian Financial Institution.
SECTION 17. MARKETING
SECTION 17.1 ANNUAL MARKETING PLAN. The parties agree to enter into a mutually
agreeable marketing plan and to review such plan on an annual basis.
SECTION 18. CREDIT POLICY
SECTION 18.1 APPROVAL OF MERCHANT QUALIFICATION CRITERIA. The Bank has approved
NDPS' current policies with respect to merchant qualification criteria. NDPS
agrees to adhere to such merchant qualification criteria. If NDPS makes a change
to such criteria, it shall notify the Bank and the Bank shall have five (5)
Business Days to object to such new criteria. If the Bank does not object in
writing within such time period, such new criteria shall be deemed to be
accepted by the Bank. Any objections by the Bank shall be dealt with in
accordance with Section 22.
SECTION 19. TERMINALS
SECTION 19.1 INVENTORY LEVELS. GPI Canada will use Commercially Reasonable
Efforts to maintain the inventory levels of terminals for use in the Merchant
Business at levels sufficient for the continuation of the Merchant Business in
the Ordinary Course.
38
SECTION 20. INDEMNIFICATION/LIMITATION OF LIABILITY AND PROCEDURES FOR CLAIMS
SECTION 20.1 INDEMNIFICATION.
(a) Subject to the terms of this Agreement, the Bank shall indemnify NDPS
and/or GPI Canada and hold NDPS and/or GPI Canada harmless from any
liability, loss, cost or expense, including reasonable attorneys' fees
and expenses ("LOSSES") suffered by it or its Affiliates that shall
result from or arise out of (i) the breach by the Bank of this
Agreement, or (ii) the Bank's violation of applicable Laws, Association
Rules and Clearing System Rules, or (iii) the negligence or intentional
wrongdoing of the Bank; provided further that if both the Bank and NDPS
and/or GPI Canada are jointly sued by a third party and both are deemed
to be liable as joint tortfeasors, then the allocation of loss between
NDPS and/or GPI Canada and the Bank shall be determined by the court.
(b) Subject to the terms of this Agreement, NDPS and/or GPI Canada shall
indemnify the Bank and hold the Bank harmless from any Losses suffered
by it or its Affiliates that shall result from or arise out of (i) the
breach by NDPS and/or GPI Canada of this Agreement, or (ii) NDPS'
and/or GPI Canada's violation of applicable Laws, Association Rules and
Clearing System Rules, or (iii) the negligence or intentional
wrongdoing of NDPS and/or GPI Canada; provided further that if both the
Bank and NDPS and/or GPI Canada are jointly sued by a third party and
both are deemed to be liable as joint tortfeasors, then the allocation
of loss between NDPS and/or GPI Canada and the Bank shall be as
determined by the court.
(c) In case any claim is made or any suit or action is commenced against
either party by a third party in respect of which indemnification may
be sought under this Section 20.1, the party to be indemnified
("INDEMNITEE") shall promptly give the indemnifying party
("INDEMNITOR") notice thereof and the Indemnitor shall be entitled to
conduct the defense thereof with counsel reasonably acceptable to the
Indemnitee or to participate in the defense thereof, at the
Indemnitor's expense. If the Indemnitor elects to conduct any such
defense, the Indemnitee shall be entitled to participate in such
defense at the Indemnitee's expense. The Indemnitor may (but need not)
conduct or participate in the defense of any such claim, suit or
action, but the Indemnitor shall promptly notify the Indemnitee if the
Indemnitor shall not desire to conduct or participate in the defense of
any such claim, suit or action. The Indemnitee may at any time notify
the Indemnitor of its intention to settle or compromise any claim, suit
or action against the Indemnitee in respect of which payments may be
sought by the Indemnitee hereunder (and the defense of which the
Indemnitor has not previously elected to conduct or participate in),
and the Indemnitee may settle or compromise any such claim, suit or
action unless the Indemnitor
39
notifies the Indemnitee in writing (within ten days after the
Indemnitee has given the Indemnitor written notice of its intention to
settle or compromise) that the Indemnitor reasonably objects to such
settlement or compromise or intends to conduct the defense of such
claim, suit or action. Any such settlement or compromise of or any
final judgment or decree entered on or in any claim, suit or action
that the Indemnitee has agreed to or defended or participated in the
defense of in accordance herewith shall be deemed to have been
consented to by, and shall be binding upon, the Indemnitor as fully as
if the Indemnitor had assumed the defense thereof and a final judgment
or decree had been entered in such suit or action, or with regard to
such claim, by a court of competent jurisdiction for the amount of such
settlement, compromise, judgment or decree.
(d) In case any direct claim in made in respect of which indemnification
may be sought under this Section 20.1, the Indemnitee shall promptly
give notice to the Indemnitor, which shall specify the factual basis
for the claim and the amount of such claim. The Indemnitor shall have
sixty (60) days from receipt of notice of the claim within which to
make such investigation of the claim as the Indemnitor considers
necessary or desirable. For the purpose of such investigation, the
Indemnitee shall make available to the Indemnitor reasonable
documentation to substantiate the claim, together with all such other
information as the Indemnitor may reasonably request. If both parties
agree at or before the expiration of such time period (or any mutually
agreed upon extension thereof) to the validity and amount of such
claim, the Indemnitor shall immediately pay to the Indemnitee the full
agreed upon amount of the claim, but failing such agreement the matter
shall be referred to the dispute resolution procedures set out in this
Agreement.
SECTION 20.2 LIMITATION OF LIABILITY.
(a) Neither NDPS (and/or GPI Canada) nor the Bank shall be liable for
failure to provide the NDPS Services or the Bank Services,
respectively, if such failure is due to any Force Majeure Event
affecting the party not performing, or affecting one of their
subcontractors provided that the party hereto affected by such Force
Majeure Event cause or condition uses Commercially Reasonable Efforts
to resume performing its obligations hereunder as soon as practicable.
Neither NDPS and/or GPI Canada nor the Bank shall have any liability
for losses, expenses or damages, ordinary, special or consequential of
the other party resulting directly or indirectly from such causes or
conditions.
(b) NDPS and/or GPI Canada agrees to provide the NDPS Services in a prompt
and efficient manner and to use Commercially Reasonable Efforts to
comply with the Service Levels set forth on Schedule 3; however,
failure to comply with the Service Levels shall not be considered a
default condition unless the provisions of Section 14.3(a) regarding
the default
40
conditions have been satisfied. NDPS and/or GPI Canada make no
warranties or representations regarding the NDPS Services except as
specifically stated in this Agreement. NDPS and/or GPI Canada shall use
due care in performing all NDPS Services hereunder and in complying
with all Association Rules, Network Organization rules or Clearing
System Rules, including, but not limited to, those concerning the
processing of Chargebacks and Credit Losses, dispute resolutions, and
arbitration. NDPS and/or GPI Canada shall not be responsible in any
manner for errors or failures of any Person other than those of NDPS
and/or GPI Canada, any Affiliate of NDPS and/or GPI Canada or any
Merchant Accounting Processor or Independent Sales Organization
designated by NDPS. THIS WARRANTY IS EXCLUSIVE AND IS IN LIEU OF ALL
OTHER WARRANTIES, AND THE BANK HEREBY WAIVES ALL OTHER WARRANTIES,
EXPRESS, IMPLIED, OR STATUTORY INCLUDING, BUT NOT LIMITED TO, ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR USE FOR A PARTICULAR
PURPOSE. Should there be any failure in performance or errors or
omissions, NDPS and/or GPI Canada shall use Commercially Reasonable
Efforts to correct such failure in performance or errors or omissions.
Except as the result of a third party claim subject to Section 20.1(a),
in no event shall NDPS and/or GPI Canada be liable to the Bank or other
third parties for special, indirect, or consequential damages, even if
NDPS and/or GPI Canada has been advised of the possibility of such
damage.
(c) The Bank agrees to provide the Bank Services in a prompt and efficient
manner and to use Commercially Reasonable Efforts to comply with the
Service Levels set forth on SCHEDULE 3; however, failure to comply with
the Service Levels shall not be considered a default condition unless
the provisions of Section 14.2(a) regarding the default conditions have
been satisfied. The Bank makes no warranties or representations
regarding the Bank Services except as specifically stated in this
Agreement. The Bank shall use due care in performing all the Bank
Services hereunder and in complying with all Association Rules, Network
Organization rules or Clearing System Rules, including but not limited
to those concerning membership and its sponsorship of NDPS and/or GPI
Canada. The Bank shall not be responsible in any manner for errors or
failures of any Person other than those of the Bank or any Affiliate of
the Bank. THIS WARRANTY IS EXCLUSIVE AND IS IN LIEU OF ALL OTHER
WARRANTIES, AND NDPS HEREBY WAIVES ALL OTHER WARRANTIES, EXPRESS,
IMPLIED, OR STATUTORY INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR USE FOR A PARTICULAR PURPOSE. Should
there be any failure in performance or errors or omissions, the Bank
shall use Commercially Reasonable Efforts to correct such failure in
performance or errors or omissions. Except as the result of a third
party claim subject to Section 20.1(b), in no event shall Bank be
41
liable to NDPS and/or GPI Canada or any third parties for any special,
indirect, or consequential damages, even if the Bank has been advised
of the possibility of such damage.
SECTION 20.3 RECOVERY. If, at any time, either the Bank or NDPS and/or GPI
Canada has received damages from the other party and recovers funds, payments,
or costs from a third party relating to the liability in respect of which such
damages were paid, the amounts so recovered (less the costs of recovery and
amounts previously paid to the other party in respect of the Loss) shall be
remitted to such other party up to the amounts previously paid by such party.
SECTION 20.4 NOTICE OF DEFAULT. Each party all promptly notify the other party
if a default or event of default with respect to it has occurred hereunder.
SECTION 20.5 NOTICE OF LITIGATION. Each party shall promptly give notice to the
other party of any material claims, proceedings, disputes (including labour
disputes), changes or litigation likely or impending which may have a material
effect on the fulfilment of any of the terms hereof by it (whether or not any
such claim, change, proceeding, dispute or litigation is covered by insurance)
of which it is aware. It shall provide the other party with all information
reasonably requested, from time to time, concerning the status of such claims,
proceedings, changes, disputes, litigation or developments.
SECTION 21. REMEDIES
SECTION 21.1 REMEDIES OF THE BANK. Upon the occurrence of an NDPS Default under
this Agreement, after attempting to resolve the matter pursuant to the dispute
resolution provisions set out in this Agreement, the Bank may do any or all of
the following as the Bank, in its sole and absolute discretion, shall determine:
(a) the Bank may terminate this Agreement in accordance with the provisions
hereof, in which case all of the Bank's rights and obligations under
the Merchant Agreements shall automatically be assigned and assumed
absolutely by NDPS and/or GPI Canada at the commencement of the 270-day
period in Section 14.4 and NDPS and/or GPI Canada shall notify
Merchants that the Bank is no longer engaged in the provision of
services in connection with the Merchant Business;
(b) the Bank may bring any proceedings in the nature of specific
performance, injunction, or other equitable remedy in any instance, it
being acknowledged that damages at Law may be an inadequate remedy for
a default of the confidentiality provisions of this Agreement
applicable to NDPS and/or GPI Canada under this Agreement;
(c) subject to the limitations contained herein, the Bank may bring any
action at Law as may be necessary or advisable in order to recover
damages and costs; and/or
42
(d) the Bank may exercise any of its other rights and remedies provided for
hereunder or otherwise available to it, including a waiver of any NDPS
Default;
SECTION 21.2 REMEDIES OF NDPS AND/OR GPI CANADA. Upon the occurrence of a Bank
Default under this Agreement, after attempting to resolve the matter pursuant to
the dispute resolution provisions set out in this Agreement, NDPS may do any or
all of the following as NDPS, in its sole and absolute discretion, shall
determine:
(a) NDPS may terminate this Agreement in accordance with the provisions
hereof, in which case all of the rights and obligations under the
Merchant Agreements shall automatically be assigned and assumed by NDPS
and/or GPI Canada at the commencement of the 270-day period in Section
14.4 and NDPS and/or GPI Canada shall notify Merchants that the Bank is
no longer engaged in the provision of services in connection with the
Merchant Business;
(b) NDPS may bring any proceedings in the nature of specific performance,
injunction or other equitable remedy, it being acknowledged that
damages at Law may be an inadequate remedy for a default of the
confidentiality provisions of this Agreement applicable to the Bank
under this Agreement;
(c) subject to the limitations contained herein, NDPS and/or GPI Canada may
bring any action at Law as may be necessary or advisable in order to
recover damages and costs; and/or
(d) NDPS may exercise any of its other rights and remedies provided for
hereunder or otherwise available to it, including a waiver of any Bank
Default.
SECTION 21.3 NON-EXCLUSIVE REMEDIES. The non-defaulting party may, in its sole
discretion, exercise any right or recourse and/or proceed by any action, suit,
remedy or proceeding against the defaulting party authorized hereunder or
permitted by Law and may proceed to exercise any and all rights hereunder and no
remedy for the enforcement of the rights of the non-defaulting party shall be
exclusive of any other rights or remedies provided hereunder or at Law or in
equity or be dependent upon any such right or remedy and any one or more of such
rights or remedies may from time to time be exercised independently or in
combination. All such rights shall be subject to the limitation of liability
contained herein.
SECTION 21.4 EQUITABLE REMEDIES. The defaulting party agrees that the
non-defaulting party's entitlement to seek equitable relief includes such
injunction or injunctions as may be required to prevent breaches or further
breaches of any of the provisions hereof, and specific enforcement of such
provisions by an action instituted in any court having jurisdiction.
43
SECTION 22. DISPUTE RESOLUTION
SECTION 22.1 INITIAL DISPUTE RESOLUTION. If any dispute, claim, question or
difference (a "DISPUTE") arises out of or in relation to this Agreement, the
Bank or NDPS and/or GPI Canada shall contact the other party's Client Relations
Representative. The parties' respective Client Relations Representatives shall
meet and use their Commercially Reasonable Efforts to negotiate with each other
in good faith and understanding of their mutual interests, to reach a just and
equitable resolution to the Dispute within ten (10) Business Days of such
referral.
SECTION 22.2 RESOLUTION BY COMMITTEE. If the Dispute cannot be resolved through
the process set out in Section 22.1, the Dispute shall be referred by the party
who initially raised the complaint (the "INITIATING PARTY") to a committee
comprised the Chief Executive Officer of NDPS, and a senior officer designated
by the Bank. Such committee members shall use their Commercially Reasonable
Efforts and negotiate in good faith and understanding of the parties' mutual
interests, to reach a just and equitable resolution to the Dispute within ten
(10) Business Days of such referral.
SECTION 22.3 RESOLUTION BY JOINT DIRECTOR COMMITTEE. If the Dispute cannot be
resolved through the process set out in Section 22.2, the Dispute shall be
referred by the Initiating Party to the Joint Director Committee. The Joint
Director Committee shall meet and use its best efforts and negotiate with each
other in good faith and understanding of the Parties mutual interests to reach a
just and equitable resolution to the Dispute within ten (10) Business Days of
such referral.
SECTION 22.4 ARBITRATION. If a Dispute is not resolved pursuant to Section 22.3,
NDPS and/or GPI Canada and the Bank agree, but shall not be obligated, within
sixty (60) days after the completion of the procedures set forth in Section
22.3, as appropriate, upon notice, to submit the Dispute to formal binding
Arbitration in accordance with Section 22.5. If at any time a party commences
litigation regarding such Dispute, no Arbitration may subsequently be commenced
by the other Party regarding such Dispute without the consent of the parties
involved in the litigation.
SECTION 22.5 ARBITRATION PROCESS. If the parties agree to formal binding
Arbitration the following procedures shall apply.
(a) The Arbitration shall be held before a panel of three (3) arbitrators
(the "ARBITRATION"). Any party may serve a notice on the other party
setting out a statement of dispute, controversy or claim and the facts
relating or giving rise thereto, in reasonable detail (the "STATEMENT
OF DISPUTE"), and the name of the arbitrator selected by it.
(b) Within thirty (30) days after receipt of such notice, the receiving
party shall respond to the notice by agreeing or commenting on the
Statement of Dispute, as the case may be, and by naming its arbitrator.
44
(c) The two arbitrators named by the parties shall select the third
arbitrator within ten (10) days after agreeing on or commenting on the
Statement of Dispute.
(d) The third arbitrator will chair the Arbitration panel (the "Chair").
The Chair may, upon agreement of each of the members of the Arbitration
panel, act as sole arbitrator in respect of procedural matters
including scheduling, production of documents and giving directions.
(e) Save as otherwise provided by this Section 22.5, the Arbitration shall
be governed by the provisions of the Arbitration Act, S.O. 1991, C.17
(the "ARBITRATION ACT"); provided, however, that the Arbitration may be
administered by any organization agreed upon by the parties and that
the parties by agreement, may choose to be governed by the rules of
such administering organization. The parties expressly agree that the
provisions of the International Commercial Arbitration Act (Ontario)
shall not apply to any Arbitration between them. The arbitrators may
not amend or disregard any provision of this Section 22.5 without the
consent of the parties.
(f) The arbitrators selected to act hereunder shall be qualified by
profession or occupation to decide the matter in dispute.
(g) Submission of Written Statements.
(i) Within fifteen (15) days of notice to the parties of the
appointment of the third arbitrator, each of the parties shall
submit written statements to the Chair setting out in sufficient
detail the facts and any contentions of Law on which it relies, or
the facts and any contentions of Law on which the other party
relies that it disputes, and the relief such party claims, if any.
Each party shall have ten (10) days from the date on which the
written statements were received to reply to the written statement
submitted by the other party.
(ii) After submission of all the statements, the arbitrators may
give directions for documentary production and
disclosure/discovery of each party's case, and for further conduct
of the Arbitration bearing in mind the desirability of having cost
effective and expeditious dispute resolution on the merits of the
case. In the absence of agreement between the parties on
production and discovery procedures within thirty (30) days of the
last day for delivery of the written statements and replies
described in Section 8.05(g)(i), Rules 30, 31, 32, 34 and 35 of
the Ontario Rules of Civil Procedure regarding production and
discovery will apply to the Arbitration, excepting that the
arbitrators shall exercise any powers or fulfil any duties set out
in those Rules that
45
would otherwise (in an action) be exercised or fulfilled by the
court or a judge.
(iii) The arbitrators may, upon application by any party, modify or
extend any time limit contained in this Section 22.5, including
any time limit in the above rules.
(h) Confidentiality. Save and except as may be necessary in the course of
the enforcement of an Arbitration award, the Arbitration process and
all Persons participating therein shall be subject to the
confidentiality provisions as set out in this Agreement. The
arbitrators and all other Persons (not already bound by the
confidentiality provisions of this Agreement) participating in the
Arbitration shall execute an undertaking to be bound by the
confidentiality provisions set out in this Agreement. For greater
certainty, the parties agree that the Arbitration shall proceed in the
event that any other Person refuses to sign a confidentiality
undertaking or agreement.
(i) Meetings and Hearings.
(i) Meetings and hearings of the Arbitration shall take place in
Toronto or in such other place as the parties shall agree upon in
writing and such meetings and hearings shall be conducted in the
English language unless otherwise agreed by such parties and the
arbitrators. Subject to the foregoing, the arbitrators may at any
time fix the date, time and place of meetings and hearings in the
Arbitration, and will give all the Parties adequate notice
thereof. Subject to any adjournments which the arbitrators allow,
the final hearing will be continued on successive Business Days
until it is concluded.
(ii) All meetings and hearings will be in private unless the parties
otherwise agree.
(iii) Any party may be represented at any meetings or hearings by legal
counsel.
(iv) At the Arbitration, each party may examine and re-examine its own
witnesses and may cross-examine the other party's witness.
(j) The Decision.
(i) The arbitrators will make and send a decision in writing to the
parties within thirty (30) Business Days after the conclusion of
all hearings referred to in Section 22.5(i) unless that time
period is extended for a fixed period by the arbitrators on
written notice to each party because of illness or other cause
beyond the arbitrators'
46
control and, unless the parties otherwise agree, will set out
reasons for decision in the decision.
(ii) The decision of the majority of the arbitrators shall be deemed
to be the decision of the Arbitration panel. Where there is no
majority decision, the decision of the Chair shall be the
decision of the Arbitration panel.
(iii) Except as provided in the Arbitration Act and as otherwise
required by Law, the decision of the arbitrators shall be final
and binding on the parties and shall not be subject to any appeal
or review procedure, provided that the arbitrators have followed
the rules and procedures provided herein in good faith and have
proceeded in accordance with the principles of natural justice.
SECTION 23. MISCELLANEOUS
SECTION 23.1 AMENDMENTS, ETC. No amendment or waiver of any provision of this
agreement, and no consent to any departure by the Bank or NDPS and/or GPI Canada
herefrom, shall be effective unless the same shall be in writing and signed by
each party sought to be bound thereby, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
SECTION 23.2 NOTICES. All notices required hereunder shall be delivered to the
following names and addresses:
(a) If to the Bank, to: Canadian Imperial Bank of Commerce
c/o CIBC World Markets Inc.
161 Bay Street, BCE Place,7th Floor
Toronto, Ontario M5J 2J8
Attn: Executive Vice President, Card Products,
Collections and Merchant Card Services
Facsimile: (416) 784-6868
with a copy to:
Canadian Imperial Bank of Commerce
Legal and Compliance Division
199 Bay Street, 15th Floor
Commerce Court West
Toronto, Ontario M5L 1A2
Attn: General Counsel
Facsimile: (416) 304-2860
and to: Blakes, Cassels & Graydon LLP
199 Bay Street, 28th Floor
Commerce Court West
Toronto, Ontario M5L 1A9
47
Attn: Managing Partner
Facsimile: (416) 863-2653
(b) If to NDPS, Global Payments
or GPI Canada to: Global Payments Inc.
#4 Corporate Square
Atlanta, Georgia 30329-2010
Attn.: Office of the Corporate Secretary
Facsimile: (404) 728-2990
The persons or addresses to which mailings or deliveries shall be made may be
changed from time to time by notice given pursuant to the provisions of this
Section 23.2. Any notice, demand or other communication given pursuant to the
provisions of this Section 23.2. shall be deemed to have been given on the date
actually delivered or five days following the date deposited in the mail,
properly addressed, postage prepaid, as the case may be.
SECTION 23.3 NO WAIVER; REMEDIES. No failure by the Bank or NDPS and/or GPI
Canada to exercise, and no delay in exercising, any right under this Agreement
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right under this Agreement preclude any other or further exercise thereof or
the exercise of any other right. The remedies provided in this Agreement are
cumulative and not exclusive of any remedies provided by Law.
SECTION 23.4 THIRD-PARTY BENEFICIARIES. Neither party to this Agreement intends
this Agreement to benefit or create any right or cause of action in or on behalf
of any Person other than the Bank and NDPS and/or GPI Canada and permitted
successors and assigns.
SECTION 23.5 ASSIGNMENT.
(a) This Agreement shall be binding upon and inure to the successors and
permitted assigns. This Agreement and all rights, privileges, duties
and obligations of the parties hereto may not be assigned by any party
without the prior written consent of the other party; provided,
however, that no such consent shall be required (i) for the assignment
by any party of its rights and privileges hereunder to an Affiliate of
either party or (ii) for the assignment and delegation by any party of
its rights, privileges, duties and obligations hereunder to any Person
into or with which the assigning party shall merge or consolidate or to
which the assigning party shall sell all or substantially all its
assets.
(b) The consent of a party to any assignment by the other party shall not
(i) relieve that party of any of its obligations under this Agreement;
or (ii) constitute the other party's consent to further assignment.
48
SECTION 23.6 GOVERNING LAW, ATTORNMENT This Agreement shall be governed by, and
construed in accordance with, the laws of the Province of Ontario and the laws
of Canada applicable therein.
SECTION 23.7 ENTIRE AGREEMENT. This Agreement embodies the entire understanding
of the parties with respect to the subject matter hereof, and there are no
further or other agreements or understandings, written or oral, in effect
between the parties relating to the subject matter of this Agreement.
SECTION 23.8 INDEPENDENT CONTRACTOR. Except as expressly provided herein,
nothing herein contained shall be construed as constituting a partnership or
joint venture between NDPS and/or GPI Canada and the Bank and each party
specifically disclaims any liability for the conduct, performance of services or
failure to act of the other party. Except as specifically described in this
Agreement, each party intends that it shall be considered an independent
contractor of the other for the services performed by it under this Agreement.
SECTION 23.9 SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
Law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable Law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement. In such an event
the parties shall use good faith efforts to re-negotiate any such provision in
an effort to retain the spirit and intent of the original provision.
SECTION 23.10 EXECUTION IN COUNTERPARTS. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
SECTION 23.11 CONFIDENTIALITY. During the term of this Agreement and for a
period of five (5) years thereafter, the Bank, its Affiliates, and their
employees, agents and representatives shall treat the NDPS Data as confidential
and will not use or disclose such information to third parties except as
required by Law, as needed in connection with any lawsuit, claim, litigation or
other proceeding or in connection with tax or regulatory matters, and except to
the extent that such information (other than information relating to the
Merchant Business or the Assets Sold as defined in the Asset Purchase Agreement)
was otherwise known to the Bank prior to disclosure by NDPS and/or GPI Canada or
already in the public domain (or subsequently entering the public domain other
than as a result of the breach of the Bank's obligations under this Section).
During the term of this Agreement and for a period of five (5) years thereafter,
NDPS, its Affiliates, and their employees, agents and representatives shall
treat the Bank Data as confidential and will not disclose such information to
third parties except as required by Law, as needed in connection with any
lawsuit, claim, litigation or other proceeding or in connection with tax or
regulatory matters, and except to the extent that such information was otherwise
known to NDPS and/or GPI Canada prior to disclosure by the Bank or already in
the
49
public domain (or subsequently entering the public domain other than as a
result of the breach of NDPS' and/or GPI Canada's obligations under this
Section).
SECTION 23.12 JOINT ANNOUNCEMENT; CONFIDENTIALITY. The Bank and NDPS agree not
to publicly disclose the transactions contemplated by this Agreement, provided,
however, that promptly after the date hereof, after prior consultation with each
other as to the substance and form of the public disclosure, the Bank and NDPS
and/or GPI Canada shall make individual announcements or a joint announcement
concerning the execution of this Agreement. Any subsequent press releases or
public announcements regarding this Agreement and the processing relationship
created thereby shall be approved by both parties prior to such public
disclosure or announcement.
SECTION 23.13 WAIVER OF JURY TRIAL. The Bank and NDPS and/or GPI Canada agree
that any suit, action, or proceedings, brought or instituted by either party
hereto which in any way relates, directly or indirectly, to this Agreement or
any event, transaction, or occurrence arising out of or in any way connected
with this Agreement or the dealings of the parties with respect thereto, shall
be tried only by a court and not by a jury. THE BANK AND NDPS HEREBY EXPRESSLY
WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION, OR PROCEEDING. The
Bank and NDPS and/or GPI Canada acknowledge and agree that this provision is a
specific and material aspect of this Agreement between the parties and that
neither party would enter into this Agreement if this provision were not part
thereof.
50
SECTION 23.14 TIME OF ESSENCE. Time is of the essence of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
CANADIAN IMPERIAL BANK OF COMMERCE
By: /s/ Christine Croucher
---------------------------------------
Name: Christine Croucher
Title:
By: /s/ David A. Caldwell
---------------------------------------
Name: David A. Caldwell
Title:
NATIONAL DATA PAYMENT SYSTEMS, INC., ON ITS OWN
BEHALF AND AS GUARANTOR OF THE OBLIGATIONS OF
GLOBAL CANADA
By: /s/ Suellyn P. Tornay
---------------------------------------
Name: Suellyn P. Tornay
Title: General Counsel
GLOBAL PAYMENTS CANADA INC.
By: /s/ Suellyn P. Tornay
---------------------------------------
Name: Suellyn P. Tornay
Title: General Counsel
The obligations of National Data Payment Systems, Inc. and Global Payments
Canada Inc. hereunder are hereby guaranteed by GLOBAL PAYMENTS INC.
GLOBAL PAYMENTS INC.
By: /s/ Suellyn P. Tornay
---------------------------------------
Name: Suellyn P. Tornay
Title: General Counsel
51
SCHEDULE 2.5
NEW MERCHANT AGREEMENTS
To be mutually agreed upon by the parties.
52
SCHEDULE 2.7
KEY ACCOUNTS
To be mutually agreed upon by the parties.
53
SCHEDULE 3
SERVICE LEVELS
To be mutually agreed upon by the parties.
54
SCHEDULE 7.2
CHARGEBACKS AND CREDIT LOSSES ON CERTAIN ACCOUNTS
To be mutually agreed upon by the parties.
55
SCHEDULE 10.3(A)
NDPS SECURITY POLICIES AND PROCEDURES
To be mutually agreed upon by the parties.
56
SCHEDULE 10.3(B)
BANK SECURITY POLICIES AND PROCEDURES
To be mutually agreed upon by the parties.
57
SCHEDULE 11.6
BANK PRIVACY POLICIES AND PROCEDURES
To be mutually agreed upon by the parties.
58
SCHEDULE 15
INITIAL CLIENT RELATIONS REPRESENTATIVE
To be mutually agreed upon by the parties.
59
SECTION 1. DEFINITIONS AND INTREPRETATION...................................1
SECTION 1.1 Certain Defined Terms............................................1
SECTION 1.2 Headings and Table of Contents...................................9
SECTION 1.3 Number and Gender................................................9
SECTION 1.4 Performance on Business Days.....................................9
SECTION 1.5 References......................................................10
SECTION 1.6 Section and Schedule References.................................10
SECTION 1.7 Parties.........................................................10
SECTION 2. MERCHANT AGREEMENTS.............................................10
SECTION 2.1 Assigned Merchant Agreements....................................10
SECTION 2.2 Further Assignment of Rights Under Merchant Agreements
During the Term.................................................11
SECTION 2.3 Further Assignment of Rights Under Assigned Merchant
Agreements Upon the Expiry of the Term..........................12
SECTION 2.4 Termination, Modification of Assigned Merchant Agreements.......12
SECTION 2.5 New Three Party Merchant Agreements.............................12
SECTION 2.6 Power of Attorney...............................................14
SECTION 2.7 Key Accounts....................................................14
SECTION 3. SERVICES........................................................15
SECTION 3.1 NDPS Services...................................................15
SECTION 3.2 Bank Services...................................................15
SECTION 3.3 Licences and Permits............................................15
SECTION 4. DEPOSIT AND SETTLEMENT PROCEDURES...............................15
SECTION 4.1 Acceptance, Delivery, and Settlement of Credit Card
Transaction Records.............................................15
SECTION 4.2 Acceptance, Delivery, and Settlement of Debit Card
Transaction Records.............................................18
SECTION 4.3 Acceptance, Delivery and Settlement of Merchant's Edge Card
Transactions....................................................19
SECTION 4.4 Amendments......................................................19
section 5. PAYMENTS AND ACCOUNTS; CLEARING ARRANGEMENTS....................19
SECTION 5.1 General.........................................................19
SECTION 5.2 Withdrawal of Account Fees from Merchant Depository Accounts....20
SECTION 5.3 Settlement Accounts.............................................20
SECTION 6. EXCLUSIVITY AND MARKETING.......................................20
SECTION 6.1 Referral of Potential Merchants.................................20
SECTION 6.2 Merchant Depository Accounts....................................21
SECTION 6.3 New Products and Services.......................................21
SECTION 7. CHARGE-BACKS, CREDIT LOSSES AND RISK MANAGEMENT.................21
SECTION 7.1 Chargebacks and Credit Losses...................................21
SECTION 7.2 Payment for Chargebacks and Credit Losses.......................22
SECTION 7.3 Foreign Interchange.............................................23
SECTION 8. MEMBERSHIP IN CREDIT CARD ASSOCIATIONS AND NETWORK
ORGANIZATIONS...................................................24
SECTION 8.1 VISA and Interac Membership by Bank.............................24
SECTION 8.2 Compliance with VISA and Interac Requirements by NDPS...........24
SECTION 8.3 Processing and Clearing Arrangements............................24
SECTION 8.4 Sponsorship.....................................................28
SECTION 9. SERVICE LEVELS AND AMENDMENTS...................................28
SECTION 9.1 Complaints......................................................28
SECTION 9.2 Changes in Law. etc.............................................28
SECTION 9.3 Problem Notification............................................28
SECTION 9.4 Root-Cause Analysis and Resolution..............................29
SECTION 10. SERVICE LOCATIONS AND SECURITY..................................29
SECTION 10.1 Rights of Access to NDPS Service Locations....................29
SECTION 10.2 NDPS Service Locations........................................29
SECTION 10.3 Security Procedures...........................................29
SECTION 10.4 Unauthorized Access or Copying................................29
SECTION 10.5 Data Security.................................................30
SECTION 10.6 Rights of Access to Bank Service Locations....................30
SECTION 10.7 Unauthorized Access or Copying................................31
SECTION 10.8 Co-operation with Special Investigations......................31
SECTION 11. REPORTS AND DATA................................................31
SECTION 11.1 NDPS Reports..................................................31
SECTION 11.2 Bank Reports..................................................32
SECTION 11.3 Ownership of the Bank Data....................................32
SECTION 11.4 Access to the Bank Data.......................................32
SECTION 11.5 Return of Bank Data...........................................32
SECTION 11.6 Privacy.......................................................33
SECTION 11.7 Ownership of NDPS Data........................................33
SECTION 11.8 Access to NDPS Data...........................................33
SECTION 11.9 Return of NDPS Data...........................................33
SECTION 11.10 Data Mining...................................................34
SECTION 12. BUSINESS RECOVERY...............................................34
SECTION 12.1 Business Recovery Plan........................................34
SECTION 12.2 Force Majeure.................................................34
section 13. AUDITS, REGULATORY EXAMINATIONS AND COMPLIANCE..................35
SECTION 13.1 Audits and Inspections........................................35
SECTION 14. TERM AND TERMINATION OF AGREEMENT...............................35
SECTION 14.1 Term of Agreement.............................................35
SECTION 14.2 Bank's Default................................................36
SECTION 14.3 NDPS' and/or GPI Canada's Default.............................36
SECTION 14.4 Termination Period............................................37
SECTION 14.5 Termination of Use of Bank Marks..............................37
SECTION 15. DESIGNATION OF RESPONSIBLE PERSONNEL............................37
SECTION 15.1 Client Relations Representative...............................37
SECTION 16. Change of control/assignment....................................38
SECTION 16.1 Change of Control/Assignment..................................38
SECTION 17. MARKETING.......................................................38
SECTION 17.1 Annual Marketing Plan.........................................38
SECTION 18. CREDIT POLICY...................................................38
SECTION 18.1 Approval of Merchant Qualification Criteria...................38
SECTION 19. TERMINALS.......................................................38
SECTION 19.1 Inventory Levels..............................................38
SECTION 20. INDEMNIFICATION/LIMITATION OF LIABILITY AND PROCEDURES FOR
CLAIMS..........................................................39
SECTION 20.1 Indemnification...............................................39
SECTION 20.2 Limitation of Liability.......................................40
SECTION 20.3 Recovery......................................................42
SECTION 20.4 Notice of Default.............................................42
SECTION 20.5 Notice of Litigation..........................................42
SECTION 21. REMEDIES........................................................42
SECTION 21.1 Remedies of the Bank..........................................42
SECTION 21.2 Remedies of NDPS and/or GPI Canada............................43
SECTION 21.3 Non-Exclusive Remedies........................................43
SECTION 21.4 Equitable Remedies............................................43
SECTION 22. DISPUTE RESOLUTION..............................................44
SECTION 22.1 Initial Dispute Resolution....................................44
SECTION 22.2 Resolution by Committee.......................................44
SECTION 22.3 Resolution by Joint Director Committee........................44
SECTION 22.4 Arbitration...................................................44
SECTION 22.5 Arbitration Process...........................................44
SECTION 23. MISCELLANEOUS...................................................47
SECTION 23.1 Amendments, Etc...............................................47
SECTION 23.2 Notices.......................................................47
SECTION 23.3 No Waiver; Remedies...........................................48
SECTION 23.4 Third-Party Beneficiaries.....................................48
SECTION 23.5 Assignment....................................................48
SECTION 23.6 Governing Law, Attornment.....................................49
SECTION 23.7 Entire Agreement..............................................49
SECTION 23.8 Independent Contractor........................................49
SECTION 23.9 Severability..................................................49
SECTION 23.10 Execution in Counterparts.....................................49
SECTION 23.11 Confidentiality...............................................49
SECTION 23.12 Joint Announcement; Confidentiality...........................50
SECTION 23.13 Waiver of Jury Trial..........................................50
SECTION 23.14 Time of Essence...............................................51