EXHIBIT 10.27
STRATEGIC DEVELOPMENT, MARKETING AND SERVICES AGREEMENT
THIS STRATEGIC DEVELOPMENT, MARKETING AND SERVICES AGREEMENT (this
"Agreement") by and between First Data Merchant Services Corporation, a Florida
corporation ("FDMS"), and ValueStar, Inc., a California corporation
("ValueStar"), is made this 29th day of September, 2000 (the "Effective Date").
WHEREAS, ValueStar provides a merchant rating service, a merchant
benefits service and a cardholder benefits service (collectively, the "ValueStar
System" or "ValueStar Benefits");
WHEREAS, FDMS is in the business of providing certain payment
processing services for credit and debit card transactions for merchants through
its Channels;
WHEREAS, FDMS is in the process of enhancing a system proprietary to
FDMS that will allow FDMS to match credit card numbers registered with ValueStar
with transactions at merchants registered with ValueStar paid for with the
registered credit card numbers (the "FDMS System"); and
WHEREAS, ValueStar is in the process of enhancing a system proprietary
to ValueStar that creates customer surveys, provides benefits that stimulate
customer survey responses and tabulates and posts rating results (the "ValueStar
System");
NOW, THEREFORE, in consideration of the foregoing, the parties hereto
hereby agree as follows:
1. Definitions. The following capitalized words shall have the following
meanings when used herein.
a) "Affiliate" shall mean any entity which, directly or indirectly, owns
or controls, is owned or is controlled by or is under common ownership
or con trol with FDMS, and includes Alliances.
b) "Alliance" shall mean any venture (in any form, including in corporate,
partnership or limited liability company form) or contractual alliance
now or hereafter entered into between FDMS (or any of its Affiliates)
and one or more third parties for the provision of any bankcard or
other credit card processing services pursuant to an arrangement
whereby FDMS or its Affiliate shares the economic benefit of ownership
of merchant contracts through profit sharing, revenue sharing, a
royalty interest, or otherwise.
c) "Channel" shall mean an Alliance or FDMS Bank that has relationships
with FDMS Merchants.
d) "Channel Participation Agreement" shall mean an agreement between FDMS
and a Channel pursuant to which such Channel agrees to market the
Program to its respective FDMS Merchants pursuant to a Merchant
Participation Agreement, and shall be substantially in the form to be
attached hereto as Exhibit A and approved by ValueStar, which approval
will not be unreasonably withheld. The parties acknowledge and agree
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that a Channel Participation Agreement may be in the form of an
addendum to the extent FDMS or an Affiliate already has a master
services or alliance agreement with such Channel. "Confidential
Information" shall have the meaning set forth in Section 17 of this
Agreement.
e) "Consumer Registration Terms" shall mean those certain terms and
conditions that a Registered Consumer must access and agree to prior to
participating in the Program.
f) "FDMS Bank" shall mean a bank and/or other third party and their
authorized agents/members with whom FDMS and/or an Affiliate has
entered into an agreement under which FDMS or its Affiliate provides
bankcard issuing services and/or a bank or other third party or their
authorized agents/members with whom FDMS or an Affiliate has entered
into an agreement to provide certain bankcard processing services.
g) "FDMS Merchant" shall mean a merchant that has entered into an
agreement with FDMS and/or a Channel under which FDMS or such Channel
provides the Payment Processing Services or other services to such
merchant.
h) "FDMS System" shall mean the FDMS proprietary software and systems that
allow FDMS to tag and/or identify ValueStar Transactions, and shall
include all technology, software, hardware and all other components
comprising the FDMS System, and all enhancements and modifications
thereto.
i) "Matching Services" shall mean the services provided by FDMS and the
FDMS System hereunder that allows FDMS to identify ValueStar
Transactions,
j) "Participating Issuer" shall mean a bankcard issuer which has signed an
agreement with ValueStar to offer the Program to its cardholders and to
enable them to become Registered Consumers.
k) "Payment Processing Services" shall mean the services FDMS and its
Channels provide to FDMS Merchants, including but not limited to
authorization, data capture, processing, settlement and reconciliation
of credit and debit card transactions.
l) "Program" shall mean the service offering, including the Matching
Services, and related services that the parties will provide to FDMS
Merchants, consumers, and third parties, through use of the ValueStar
System and the FDMS System as more fully described in Exhibit B.
m) "Registered Consumer" shall mean a consumer / cardholder that registers
its credit card number in order to be eligible for ValueStar Benefits
and has agreed to participate in the Program or a cardholder that has
been registered by a Participating Issuer or that has directly
registered with ValueStar.
n) "Registered Consumer Information" shall mean the information that a
Registered Consumer provides to ValueStar with respect to such
Registered Consumer.
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o) "Registered Credit Card Number " shall mean those numbers provided by
ValueStar to FDMS of Registered Consumers.
p) "Registered Participating Merchant" shall mean an FDMS Merchant that
was registered for the ValueStar Services while the FDMS Merchant's
Channel was party to a Channel Participation Agreement.
q) "Registered Merchant Participation Agreement" shall mean an agreement
between ValueStar and an FDMS Merchant pursuant to which such FDMS
Merchant agrees to participate in the Program pursuant to standard
terms and conditions where a Channel Participation Agreement does exist
between FDMS and the Channel. No Registered Merchant Participation
Agreement shall be effective until approved by ValueStar, which
approval shall not be unreasonably withheld.
r) "Transaction Data" shall mean *****.
s) "ValueStar Transactions" shall mean transactions that a Registered
Consumer initiates at an FDMS Merchant location using a Registered
Credit Card Number that match a Registered Participating Merchant.
2) Term. The Agreement shall commence on the Effective Date and continue for a
term of five (5) years (the "Initial Term") subject to the termination
provisions set forth herein. After the Initial Term the Agreement will
renew for additional terms of two (2) years each unless either party
provides the other one hundred twenty (120) days written notice of its
intent not to renew prior to the end of the then-current term.
3) Pre-Launch Obligations. The parties anticipate that the Program will be
commercially available and operable on ***** or such other date as the
parties may mutually agree upon (the "Launch Date"). In order to achieve
the Launch Date, the parties have prepared a Task Plan attached to this
Agreement as Exhibit B. The Task Plan sets forth the tasks each party plans
to complete between the Effective Date and the Launch Date. Each party will
use commercially reasonable efforts to meet the time frames and obligations
set forth in the Task Plan.
4) Development. The Task Plan sets forth each party's specific obligations to
modify or enhance the FDMS System in order to meet the Launch Date and
provide a commercially viable Program.
PORTIONS OF THIS EXHIBIT DENOTED HEREIN BY ***** HAVE BEEN OMMITTED
(BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT) AND HAVE BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2.
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a) FDMS will use commercially reasonable and good faith efforts to
undertake reasonable development efforts required to meet the Launch
Date, which shall be *****. FDMS has attached hereto a preliminary
estimate of the funding required for such development. FDMS will begin
development only after ValueStar approves such estimate, provided that
such approval will not be unreasonably withheld. FDMS shall invoice
ValueStar on a monthly basis for development work conducted during the
prior month. In the event any such invoice is not paid in full by
ValueStar within 30 days from receipt of the invoice, FDMS shall cease
its development efforts until all outstanding amounts are received,
which ValueStar acknowledges may affect the Launch Date. FDMS will
notify ValueStar in the event, during such development,*****. All
development by FDMS under this Section shall be considered part of the
FDMS System and shall be proprietary to FDMS. If by operation of law
any of such development, including the intellectual property rights
incorporated therein, is not owned in its entirety by FDMS
automatically upon creation thereof, then ValueStar shall assign to
FDMS the specific work product that results from such development.
b) FDMS acknowledges that ValueStar will undertake development of the
ValueStar System, software modules or other technological improvements
("ValueStar Improvements") to its software and/or hardware, based in
part on proprietary technical specifications provided by FDMS to help
integrate the ValueStar program and ValueStar Benefits with information
supplied to or by FDMS. FDMS acknowledges and agrees that, as between
FDMS and ValueStar, any software or hardware developed and used by
ValueStar shall remain the exclusive property of ValueStar and that
ValueStar will retain all right, title and interest therein during the
term of this Agreement and thereafter. Notwithstanding the foregoing,
nothing herein shall give ValueStar any right, title or interest in any
information, including technical specifications, proprietary to FDMS.
Except for technical specifications proprietary to FDMS, copyright to
all of the source code, object code and any other embodiment of any
ValueStar improvement belongs to and shall remain with ValueStar.
c) Other Enhancements. Either party may propose in writing an enhancement
to the Program (technical or otherwise), including but not limited to
making the Program available on FDMS' Omaha platform, that requires the
participation and cooperation of the other party. The party receiving
such proposal shall consider the proposal in good faith, and if it
believes, in its reasonable discretion, that the proposal is
beneficial, the parties will enter into an amendment to this Agreement
setting forth the terms of the development of such enhancement. Unless
otherwise agreed to in writing by the parties, all such additional
development shall be*****. Neither party shall be obligated to propose
such enhancement or to elect to proceed to develop such enhancement,
and if the parties do not agree to develop the enhancement the party
proposing the enhancement may develop the enhancement independently
with no obligation to account to or obtain the participation of the
other party.
PORTIONS OF THIS EXHIBIT DENOTED HEREIN BY ***** HAVE BEEN OMMITTED
(BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT) AND HAVE BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2.
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d) Exclusive Rights. Any developments, modifications, derivatives, or
enhancements to the FDMS System made under Section 4 whether or not
they are ***** shall be owned by FDMS but shall not be used for service
rating other than through ValueStar for a period of five (5) years from
the date such development is completed and commercially available. This
exclusivity shall not apply *****.
5) Program Implementation. The parties acknowledge that the Program requires
each party to undertake certain obligations and to cooperate with the other
as reasonably requested Exhibit B, which is incorporated herein by
reference, outlines the parties' specific responsibilities with respect to
each component of the Program.
6) Marketing. FDMS and ValueStar shall each market and promote the Program.
FDMS will use commercially reasonable efforts to market the Program to its
Channels pursuant to a Channel Participation Agreement, under which a
Channel will market the Program to the applicable FDMS Merchants pursuant
to the terms of the Merchant Participation Agreement and refer such FDMS
Merchants to ValueStar. ValueStar shall provide such assistance, support
and cooperation to FDMS as may be reasonably requested in such marketing
activities. The Channels, at their discretion, will determine whether to
participate in the Program. FDMS, at its own expense, will develop, in
conjunction with ValueStar marketing, appropriate materials for merchant
and Channel distribution. Internal marketing will include periodic
teleconference with participating Channels, Product Days, sales sheets etc.
a) Marketing Materials. ValueStar shall develop marketing materials and
related designs for the Program as may be required to enable FDMS to
sufficiently perform under this Section (the "Marketing Materials") in
marketing and promoting the Program to the Channels and for the
Channels to utilize in promoting the Program to Merchants. ValueStar
may retain the services of an advertising agency to provide such
design, materials and assistance as necessary. FDMS or its
participating Channels will bear the cost of copying and/or customizing
the Marketing Materials for use by the participating Channels in
marketing to FDMS Merchants. ValueStar shall provide reasonable
assistance to the participating Channels to enroll the FDMS Merchants.
b) Channel Access. Except as otherwise set forth in Section 7(b),
ValueStar will not initiate a sales call to a Channel without obtaining
the prior consent of FDMS, and FDMS may, in its sole discretion,
require that it participate in any sales call made to a Channel. In the
event ValueStar identifies a Channel to whom FDMS has not marketed the
Program, ValueStar may request cooperation and assistance from FDMS and
FDMS shall provide such reasonable cooperation and assistance in order
to introduce such Channel to the Program.
PORTIONS OF THIS EXHIBIT DENOTED HEREIN BY ***** HAVE BEEN OMMITTED
(BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT) AND HAVE BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2.
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c) Co-Op Dollars. *****
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d. Related Promotions. *****
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7) Exclusivity. *****
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8) Costs/Fees/Commissions. Except as otherwise described in this Agreement,
the costs, fees and commissions due under this Agreement are set forth in
Exhibit E, attached hereto.
9) Reports. During the term of the Agreement ValueStar will generate certain
monthly reports related to the Program, the Channels and the FDMS Merchants
as FDMS may reasonably request. In addition, FDMS will generate certain
ValueStar Transaction reports in the form set forth in Exhibit D and
provide them to ValueStar on a daily basis beginning the first day after
the Launch Date. Such reports shall be considered to be Confidential
Information and neither party shall share such reports or the content of
such reports with a third party (other than the Participating Issuers,
Channels or FDMS Merchants) without the prior written consent of the other
party. Aggregate transaction reports which do not contain personally
identifiable information may be provided to ValueStar partners that are
receiving a transaction fee on specific transaction types.
10) FDMS Matching Fee. In consideration for FDMS's provision of Matching
Services, ValueStar shall owe FDMS a Matching Fee as set forth in Exhibit E
for each ValueStar Transaction.
11) ValueStar Merchant Qualification. Only ValueStar will determine the
criteria and award of the ValueStar brand to merchants. FDMS and its
Partners are not responsible for evaluating a merchant based on the
ValueStar criteria. Acceptance of a merchant for ValueStar branding will be
the sole responsibility of ValueStar.
a) ValueStar shall be responsible for providing all customer service
relating to the Program to merchants and consumers. Notwithstanding the
foregoing, FDMS shall cooperate with ValueStar in investigating and
resolving issues relating to the matching (or mismatching) of data. All
other issues relating to the Program, including but not limited to
status inquiries, billing issues and other Registered Consumer and
Registered Participant Merchant disputes will be the sole
responsibility of ValueStar to investigate and resolve. Additionally,
ValueStar shall be required to reimburse an FDMS Channel in the event
that the Channel is charged for customer service support provided by
FDMS related to the Program.
12) Payments. *****
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13) Referrals . *****
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PORTIONS OF THIS EXHIBIT DENOTED HEREIN BY ***** HAVE BEEN OMMITTED
(BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT) AND HAVE BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2.
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14) Non-Solicitation Obligation. Except as expressly provided herein, ValueStar
(i) shall not knowingly solicit any FDMS Merchants for services similar to
or competitive with the Payment Processing Services and/or the Program; and
(ii) shall not engage or retain a third party to solicit the FDMS Merchants
pursuant to the foregoing prohibitions. FDMS (i) shall neither utilize
ValueStar's Confidential Information to solicit nor systematically target
any of ValueStar's Registered Participating Merchants for services similar
to or competitive with the ValueStar System and/or the Program; and (ii)
shall not engage or retain a third party to solicit the ValueStar
Registered Participating Merchants pursuant to the foregoing prohibitions;
ValueStar's and FDMS' obligations under this paragraph shall be referred to
hereinafter as the "Non-Solicitation Obligations".
15) Registered Credit Card Numbers, Registered Participating Merchants and Use
of Transaction Data.
a) ValueStar shall provide FDMS with an initial list of Registered Credit
Card Numbers and Registered Participating Merchants that shall be
updated on a daily basis. ValueStar represents and warrants to FDMS
that all credit card numbers it provides to FDMS under this section are
Registered Credit Card Numbers and that all merchant names it provides
to FDMS under this Section are Registered Participating Merchants.
b) Transaction Data shall not be accessed or used by FDMS or ValueStar for
any purpose without the prior express authorization of each Registered
Consumer (or Participating Issuer) to whom it relates and in any event
shall be accessed or used by ValueStar solely for purposes of the
Program as described in this Agreement. Each Channel Participation
Agreement and Merchant Participation Agreement shall include an
authorization by such Channel and FDMS Merchant, respectively, to allow
FDMS and ValueStar to access and use the Transaction Data for the
purposes contemplated by the Program. Notwithstanding the foregoing,
FDMS and/or its Channel owns all data collected or accessed through use
of the FDMS System, including but not limited to the Transaction Data.
Except for access to and use of the Transaction Data for the purposes
of carrying out the Program as expressly provided herein, ValueStar
will not use, disclose or sell any Transaction Data without the
authorizations described above, and without FDMS' prior written
consent, which FDMS may elect not to give in its sole discretion.
16) Privacy Policy. ValueStar shall draft a privacy policy related to the
Program and the use of Registered Consumer Information (the "Program
Privacy Policy"), which in no event shall be less stringent than FDMS'
privacy policy as it may be changed from time to time and which shall have
received written approval from FDMS. In addition, any site at which a
consumer registers his information shall include a prominent privacy policy
that complies with all applicable law and is no less stringent than the
Program Privacy Policy. The Consumer Registration Terms shall include
clear, prominent authorization by the Registered Consumer allowing the
applicable Program provider the right to use and/or disclose (i) Registered
Consumer Information for the purposes of providing the Program to such
Registered Consumer and providing the Matching Services; and (ii) certain
aggregate Registered Consumer Information to third parties for the purposes
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of providing information to such third parties related to the effectiveness
of the Program. The Consumer Registration Terms shall also include a means
by which a Registered Consumer may cease participation in the Program and
remove its Registered Consumer Information from the ValueStar System. The
Consumer Registration Terms, and any changes to them, shall be subject to
review and approval by FDMS. The parties acknowledge and agree that the
Program shall be expressly designed to comply with all applicable laws and
regulations related to privacy and each party shall take all steps
necessary to comply with such laws and abide by the terms of the Program
Privacy Policy and the Consumer Registration Terms. In no event shall
either party violate the Consumer Registration Terms as it relates to
privacy, and a breach of the Consumer Registration Terms shall be a
material breach of this Agreement as well.
17) Confidential Information.
(a) Each party (the "Disclosing Party") may from time to time during the
term of this Agreement disclose to the other party (the "Receiving
Party") certain non-public information regarding the Disclosing Party's
business ("Confidential Information"). Confidential Information shall
also include: any data or information that is competitively sensitive
material and not generally known to the public, including but not
limited to, products, planning information, marketing strategies,
finance, operations, customer relationships, customer profiles, sales
estimates, business plans and internal performance results relating to
the past, present or future business activities of FDMS or ValueStar or
any of their affiliated companies and the customers, clients and
suppliers of any of the foregoing, including in the case of FDMS, the
Alliances; any scientific or technical information, design, process,
procedure, formula or improvement that is commercially valuable and
secret in the sense that its confidentiality affords FDMS or ValueStar
a competitive advantage over its competitors; all confidential or
proprietary concepts, documentation, reports, data, specifications,
computer software, source code, object code, flow charts, databases,
inventions, information and trade secrets, whether or not patentable or
copyrightable; all documents, inventions, substances, engineering and
laboratory notebooks, drawings, diagrams, computer programs and data,
specifications, bills of material, equipment, prototypes and models,
and any other tangible manifestation (including data in computer or
other digital format) of the foregoing which now exist or come into the
control or possession of the party; and Registered Consumer and
Merchant information. Additionally, Transaction Data shall be
considered Confidential Information of FDMS. Information shall not be
considered Confidential Information to the extent, but only to the
extent, that such information is: (i) already known to the receiving
party free of any restriction at the time it is obtained; (ii)
subsequently learned from an independent third party free of any
restriction and without breach of this Agreement; (iii) or becomes
publicly available through no wrongful act of the receiving party; (iv)
independently developed by the receiving party without reference to any
Confidential Information of the other; or (v) required to be disclosed
by law.
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(b) The party receiving the Confidential Information shall: (i) maintain it
in confidence, except to the extent necessary to carry out the purposes
of this Agreement, in which event written confidentiality restrictions
shall be imposed upon the parties to whom such disclosures are made;
(ii) use at least the same degree of care in maintaining its secrecy as
it uses in maintaining the secrecy of its own Confidential Information,
but in no event less than a reasonable degree of care; and (iii) return
all copies, notes, packages, diagrams, computer memory media and all
other materials containing any portion of the Confidential Information
to the disclosing party upon its request, unless such Confidential
Information is necessary to continue to perform obligations pursuant to
this Agreement. The specific terms of this Agreement, but not the
general relationship of the parties or that the parties have entered
into an agreement, shall be considered Confidential Information.
18) No Implied Licenses. Except as expressly provided herein, no grant or
conveyance under any of FDMS' or ValueStar's respective intellectual
property rights is hereby given or intended, including, but not limited to,
any license whether by implication, estoppel, or otherwise.
19) Termination. Either party may at its option immediately terminate this
Agreement by giving written notice thereof to the other party in the event
of the occurrence of any of the following:
a) If the other party becomes insolvent, or a petition in bankruptcy is
filed, or any similar relief is filed by or against the other party, or
a receiver is appointed with respect to any of the assets of the other
party, or a liquidation proceeding is commenced by or against the other
party; or
b) A material breach by the other party of Section 17 (Confidentiality),
Section 15 (Registered Credit Card Numbers, Registered Participating
Merchants and Use of Transaction Data), or Section 16 (Privacy Policy),
- unless such breach is not willful or intentional (with respect to the
officers or management of the breaching party) and the breaching party
(i) immediately takes action to cause such breach to cease and (ii) can
provide to the non-breaching party satisfactory evidence (in the
reasonable determination of the non-breaching party) of the breaching
party's plan to ensure that a similar breach will not recur, provided
that in the event of a second breach under this Section that is not
willful or intentional within any consecutive six month period, the
non-breaching party may terminate immediately; or
c) Failure to correct or cure any material breach by the other party of
this Agreement within ninety (90) calendar days after receipt by the
other party of a written notice from such party specifying such breach,
provided that the breaching party is obligated to commence a cure as
soon as practicable after receiving notice thereof. Provided, however,
that the decision to terminate must be exercised and communicated to
the other party within 90 days after receipt of information
establishing the right to terminate or 180 days after receipt of
information establishing the right to terminate for breaches of
Sections 12 (Payments), 15 (Registered Credit Card Numbers, Registered
Participating Merchants and Use of Transaction Data), 16 (Privacy
Policy), or 17 - (Confidentiality), or the right to terminate for that
occurrence (but not future occurrences) is waived.
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20) Ownership. FDMS owns all rights in or to the FDMS System, as well as all
enhancements to the foregoing (together, the "FDMS Property"). ValueStar
owns all rights in or to the ValueStar Benefits Program and ValueStar
System, as well as all enhancements to the foregoing (together, the
"ValueStar Property")
21) General Indemnification. Each party shall indemnify and hold harmless the
other, its shareholders, officers, directors and employees, from and
against any losses or damages incurred by the other party, including
reasonable attorney fees, as a result of third party claims related to (a)
such party's breach of any representation or warranty contained herein; (b)
such party's performance under this Agreement or any agreement between such
party and a third party under which such party provides its respective
System and/or services, except to the extent such loss or claim is due to
the gross negligence or willful misconduct of the other party; and (c)
disclosure or use of Transaction Data or Registered Consumer Information.
The indemnity obligations of both parties under this Section are contingent
upon the party seeking indemnity (i) giving prompt written notice to the
indemnifying party of any such claim, (ii) allowing the indemnifying party
to control the defense and settlement of such claim, and (iii) reasonably
co-operating with the indemnifying party in the defense and settlement of
such claim.
22) Limitation of Liability. Except for liability for breach of Sections 12
(Payments), 15 (Registered Credit Card Numbers, Registered Participating
Merchants and Use of Transaction Data), 16 (Privacy Policy), or 17
(Confidentiality), the cumulative aggregate liability of either party for
all losses, claims, suits, controversies, breaches or damages for any cause
whatsoever and regardless of the form of action or legal theory, shall be
limited to the actual direct out of pocket expenses that are reasonably
incurred by either party and shall not exceed *****.
23) Exclusion. EXCEPT FOR LIABILITY FOR BREACH OF SECTION 15 (Registered Credit
Card Numbers, Registered Participating Merchants and USE OF TRANSACTION
DATA), SECTION 16 (PRIVACY POLICY), OR SECTION 17 (CONFIDENTIALITY), IN NO
EVENT SHALL EITHER PARTY TO THIS AGREEMENT OR ANY OF ITS DIRECTORS,
OFFICERS, OR EMPLOYEES BE LIABLE UNDER ANY THEORY OF TORT, CONTRACT, STRICT
LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR LOST PROFITS, EXEMPLARY,
PUNITIVE, SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL DAMAGES OR THE LIKE,
EACH OF WHICH IS HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES REGARDLESS OF
WHETHER SUCH DAMAGES WERE FORESEEABLE OR WHETHER EITHER PARTY OR ANY ENTITY
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
PORTIONS OF THIS EXHIBIT DENOTED HEREIN BY ***** HAVE BEEN OMMITTED
(BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT) AND HAVE BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2.
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24) Audit Rights. Each party shall have the right to retain an independent
third party to audit copies of all relevant books and records of the other
no more than one time in any twelve month period for the sole purpose of
verifying the accuracy of calculations made under this Agreement with
respect to fees payable hereunder. The auditing party shall bear the cost
of such audit, provided that in the event the audit reveals an error in the
auditing party's favor in excess of $5,000, then the audited party shall
bear the cost of the audit. In the event the audit reveals a shortfall in
any amount, the party owing such shortfall shall promptly pay it.
25) Dispute Resolution. Each party agrees that, unless otherwise required in
order to comply with deadlines under the law, it will not file action or
institute legal proceedings with respect to any dispute, controversy, or
claim arising out of, relating to, or in connection with, this Agreement,
until: (i) it has given the other party written notice of its grievance;
(ii) the other party has failed to provide a prompt and effective remedy;
(iii) it has requested senior executives for both parties to meet and
discuss the matter in order to consider informal and amicable means of
resolution; and (iv) either such meeting failed to occur within thirty (30)
days after such request or the meeting did not produce a mutually
satisfactory resolution of the matter. The foregoing provision shall not
apply to the extent a party requires an equitable remedy and time is of the
essence.
26) Press Release. Neither party shall make a press release or other statement
to the general public regarding this Agreement or the parties' relationship
without first obtaining the prior written approval of such release or
statement from the other party. Notwithstanding the foregoing, it is the
parties' intent to issue a mutually agreed-upon press release within 30
days of the Effective Date in which the parties describe the Program and
its launch.
27) Required Disclosure. Notwithstanding anything contained in this Agreement
to the contrary, if either party, or any of its employees, shall be under a
legal obligation in any administrative, governmental or judicial
circumstance involuntarily to disclose any Confidential Information of the
other, it shall give the party that owns such Confidential Information (the
"Disclosing Party") prompt notice thereof so that the Disclosing Party may
seek an appropriate protective order. If the Disclosing Party is
unsuccessful in obtaining such protective order, and if the party receiving
such Confidential Information (the "Receiving Party") or any such employee
would, in the opinion of its counsel, be held in contempt or suffer other
censure or penalty for failure to disclose, disclosure pursuant to the
order or decree of an administrative, governmental or judicial authority
with jurisdiction over such party may be made by the Receiving Party or its
employees without liability hereunder.
28) Non-Exclusive. Except as expressly provided herein, nothing in this
Agreement will prohibit or restrict either party from entering into a
similar arrangement with a third party and/or from developing on its own a
product or service similar to the ValueStar System or the FDMS System,
subject to the terms of Section 16 (Confidentiality).
29) Compliance with Law. Each party will comply with all applicable laws and
regulations of governmental bodies or agencies in connection with its
performance under this Agreement.
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30) Relationship of the Parties. The parties are acting as independent
contractors and not as partners or in the capacity of any type of joint
venture.
31) Force Majeure. Neither party shall be in default if failure to perform any
obligation hereunder, except for any obligation to make payment, is caused
solely by supervening conditions beyond that party's control, including
acts of God, civil commotion, and strikes.
32) Entire Agreement. This Agreement and the exhibits hereto constitute the
entire agreement between the parties hereto and there are no
representations, warranties, covenants or obligations except as set forth
herein. This Agreement supersedes all prior or contemporaneous agreements,
understandings, negotiations and discussions, written or oral, of the
parties hereto, relating to any transaction contemplated by this Agreement.
Nothing in this Agreement is intended or shall be construed to confer upon
or to give any person other than the parties hereto any rights or remedies
under or by reason of this Agreement.
33) Assignment. Neither party shall assign any interest in this Agreement
without the prior written consent of an authorized executive officer of the
other, provided that FDMS may assign this Agreement to an Affiliate (not
including Alliances) without ValueStar's prior consent.
34) Governing Law. The rights and obligations of the parties under this
Agreement shall be governed by law of the State of New York, without regard
to that state's choice of law provisions.
35) Survival. The following provision shall survive termination of this
Agreement: Sections 4(d) Exclusive Rights, 14 (Non-Solicitation
Obligation), 15 (Registered Credit Card Numbers, Registered Participating
Merchants and Use of Transaction Data), 16 (Privacy Policy), 17
(Confidential Information), 18 (No Implied License), 20 (Ownership), 21
(General Indemnification), 22 (Limitation of Liability), 23 (Exclusion),
and 25 (Dispute Resolution).
36) Waiver. Any failure of either party to enforce, at any time or for any
period of time, any of the provisions of this Agreement shall not be
construed as a waiver of the right of that party to enforce such provisions
unless said waiver is in writing, and signed by an authorized executive
officer.
37) Notices. Any notice required or permitted to be given under this Agreement
shall be sent in writing, by prepaid, certified, return receipt requested,
first-class air mail to the respective party at the address below, or to
such other address as each party may hereafter specify in writing to the
other.
If to ValueStar: Jim Stein, Chief Executive Officer
ValueStar, Inc.
360 22nd Street
Oakland, California 94612
Fax: (510) 808-1400
13
with a copy to: Roger Metzler, General Counsel
ValueStar, Inc.
360 22nd Street
Oakland, California 94612
Fax: (510) 808-1400
If to FDMS:
with a copy to: General Counsel
First Data Merchant Services Corp.
12500 East Belford Avenue, Suite M16-S
Englewood, Colorado 80112
Fax: (720) 332-0033
All such notices shall be deemed to have been given upon receipt.
38) Severability of Provisions. Each provision of this Agreement shall be
considered severable and if for any reason any provision or provisions
herein are determined to be invalid or contrary to any existing or future
law, such invalidity shall not impair the operation of this Agreement or
affect those portions of this Agreement which are valid.
39) Enumerations and Headings. The enumerations and headings contained in this
Agreement are for convenience of reference only and are not intended to
have any substantive significance in interpreting this Agreement.
IN WITNESS WHEREOF, and intending to be legally bound, the undersigned
parties have duly executed this Agreement on the Effective Date.
FIRST DATA MERCHANT SERVICES CORPORATION
By: /s/ Steven L. VanFleet
---------------------------
Name: Steven L. VanFleet
Title: Senior Vice President
VALUESTAR INCORPORATED
By: /s/ Jim Stein
---------------------------
Name: Jim Stein
Title: Chief Executive Officer
14
EXHIBIT A
FORM OF CHANNEL PARTICIPATION AGREEMENT
*****
PORTIONS OF THIS EXHIBIT DENOTED HEREIN BY ***** HAVE BEEN OMMITTED
(BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT) AND HAVE BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2.
15
EXHIBIT B
DESCRIPTION OF PROGRAM AND PARTIES' OBLIGATIONS
ValueStar has created a local rating system for local service and professional
companies called ValueStar Ratings or ValueStar Real-Time Ratings and a benefits
program for consumers and businesses called ValueStar Benefits.
ValueStar Ratings currently consist of a rating methodology that entails rating
local brick and mortar service companies on credentials and customer
satisfaction and assigning one of three ValueStar Ratings brands based on the
amount of information ValueStar has verified on each company and a comparison of
that information to ValueStar Ratings standards.
Companies that earn the ValueStar Verified or ValueStar Top-Rated rating brands
are invited to become ValueStar Authorized. To qualify for the ValueStar
Authorized, the company must agree to participate in ValueStar's Real-Time
Ratings, to maintain high customer satisfaction, to maintain high customer
satisfaction, to follow ValueStar's comlint resolution process and to pay
ValueStar a fee.
ValueStar Benefits are provided either directly to consumers that join or
through credit card issuing banks that add the ValueStar Benefits to their card
offering. Members are called ValueStar Rating Partners and are encouraged to
purchase from and rate ValueStar Authorized companies. Rating Partners receive
free access to ValueStar Ratings and other ValueStar Buying content, ValueStar
Rating Points (redeemable for products, charitable donations, services and
travel), complaint resolution services and a money-back satisfaction program (up
to $500).
Roles/Responsibilities
The table below highlights examples of various responsibilities between FDMS and
ValueStar.
Value Star
A) Will provide the ValueStar Benefits and Program to Registered
Participating Merchants and Registered Consumers.
B) Marketing:
- Will provide marketing materials and develop/implement market
awareness for the ValueStar brand.
- Establish internet presence with Program descriptions and
explanations.
C) Funding/Commissions: *****
PORTIONS OF THIS EXHIBIT DENOTED HEREIN BY ***** HAVE BEEN OMMITTED
(BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT) AND HAVE BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2.
16
FDMS
A) Marketing:
- Wiil provide marketing materials and develop/implement market
awareness for the ValueStar brand to its Partner/Client base.
- FDMS will provide leads for the ValueStar proposition through
the exisiting sales and other client contact channels.
B) Funding/Commissions:
*****
PORTIONS OF THIS EXHIBIT DENOTED HEREIN BY ***** HAVE BEEN OMMITTED
(BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT) AND HAVE BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2.
EXHIBIT C
TASK PLAN
*****
PORTIONS OF THIS EXHIBIT DENOTED HEREIN BY ***** HAVE BEEN OMMITTED
(BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT) AND HAVE BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2.
17
EXHIBIT D
REPORT DETAIL
*****
PORTIONS OF THIS EXHIBIT DENOTED HEREIN BY ***** HAVE BEEN OMMITTED
(BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT) AND HAVE BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2.
18
EXHIBIT E
FEES / Commissions
*****
PORTIONS OF THIS EXHIBIT DENOTED HEREIN BY ***** HAVE BEEN OMMITTED
(BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT) AND HAVE BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2.
19