EXHIBIT 99.4
MASTER REFERRAL AGREEMENT
This Master Referral Agreement (this "AGREEMENT") is made and
entered into as of the 12th day of July, 2004 to be effective as of the
Effective Time (as defined in the Merger Agreement (as defined herein)) by and
between Bank of America, N.A., a national banking association with its principal
office located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("BUYER"), and National City Corporation, a Delaware corporation with its
principal office located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
("NCC").
WHEREAS, concurrently with the execution of this Agreement, Bank of
America Corporation, a Delaware corporation ("PARENT"), Monarch Acquisition,
Inc. ("MONARCH"), an Ohio corporation and wholly owned indirect subsidiary of
Parent, and National Processing, Inc., an Ohio corporation ("NPI"), are entering
into an Agreement and Plan of Merger (the "MERGER AGREEMENT"), pursuant to which
Monarch is merging into NPI and NPI is becoming an indirect wholly owned
subsidiary of Parent as further described therein; and
WHEREAS, BUYER is in the business of providing services to merchants and
banks consisting of the authorization, processing and settlement of transactions
initiated by customers of such merchants and banks through the use of charge
cards ("MERCHANT SERVICES"); and
WHEREAS, NCC is a financial holding company which now owns or has a
controlling interest in, and in the future will own or have a controlling
interest in, various commercial banks or insured depository institutions
(individually a "BANK" and collectively the "BANKS") which could avail
themselves, and whose business customers or merchants could avail themselves, of
BUYER's Merchant Services; and
WHEREAS, BUYER and NCC desire to enter into a business arrangement which
will facilitate and encourage the use of BUYER's Merchant Services by the Banks
and business customers of the Banks.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein, and for other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
1. MARKETING AGREEMENTS. As soon as practicable after the date this Agreement
is fully executed, but in no event later than the Effective Time, NCC shall
cause each of the Banks which it owns as of the Effective Time to enter into a
Marketing and Cash Advance Agreement ("MARKETING AGREEMENT") with BUYER in a
form substantially similar to the form of Marketing Agreement attached hereto as
Exhibit A. Schedule 1, attached to this Agreement, lists the Banks owned by NCC
as of the date this Agreement is fully executed and will be amended by NCC from
time to time during the term of this Agreement as NCC's ownership of Banks
changes. NCC will provide BUYER with written notice of any change to Schedule 1
within sixty (60) days following such a change. If and as NCC acquires
additional Banks during the term of this Agreement, NCC shall cause each such
Bank to enter into a Marketing Agreement with BUYER. As allowed by the Rules (as
defined in the Marketing Agreement), BUYER
agrees to enter into Marketing Agreements with any NCC affiliate in
substantially the same form as Exhibit A. NCC agrees that in no event shall NCC
allow an affiliate to enter into a contractual arrangement to refer customers to
a provider of Merchant Services other than BUYER.
2. NEW FUNCTIONALITY. Prior to BUYER's rollout of any new functionality of
Merchant Services or equipment, BUYER shall provide NCC with notice of the same
and the opportunity to determine and select, with BUYER's approval, those
Merchants (as such term is defined in the Marketing Agreement) who would be best
suited for testing and rollout of such new functionality or equipment.
3. PRIOR COMMITMENTS. NCC represents and warrants to BUYER that, as of the
date this Agreement is fully executed, neither NCC nor its Banks has any
contractual arrangements to refer customers to a provider of Merchant Services
("PREVIOUS MERCHANT AGREEMENTS"), except as set forth on Schedule 3 attached
hereto. If any Bank has as of the Effective Time (or, with respect to Banks
hereafter acquired by NCC, then has) a Previous Merchant Agreement with a party
other than BUYER, then NCC shall not be obligated to cause such Bank to enter
into a Marketing Agreement with BUYER during the term of such Previous Merchant
Agreement except as provided in this Section 3. In the event the Bank can
terminate the Previous Merchant Agreement without Penalty, Bank will do so and
will enter into a Marketing Agreement as provided herein. For the purposes of
this Section 3, the term "PENALTY" includes all financial penalties, including,
but not limited to, early termination penalties and Reduction in the Spread paid
to Bank, as provided in the Previous Merchant Agreement and as disclosed to
BUYER by NCC. "REDUCTION IN THE SPREAD" means a decrease in or loss of the fees
paid for Spread under a Marketing Agreement with BUYER in comparison with the
fees paid for Spread under the Previous Merchant Agreement for merchants under
the Previous Merchant Agreement, and excludes any Reduction in the Spread as it
relates to future customer referrals. In the event the Bank cannot terminate the
Previous Merchant Agreement without Penalty, NCC will provide a notice to BUYER
stating the specific amounts and effects of the Penalties involved in
terminating the Previous Merchant Agreement, such notice to include the next
natural termination date of such agreement without Penalty. In such event, BUYER
may choose within sixty (60) days following BUYER's receipt of such notice to
pay the Penalty, make other arrangements or both with the result that Bank will
not suffer a Penalty in terminating its Previous Merchant Agreement. BUYER'S
offer to make such a payment or offer such other terms shall be in BUYER'S sole
discretion. In the event BUYER determines to make such an offer, NCC shall
direct Bank to cooperate with BUYER in terminating such Pervious Merchant
Agreement. In any event, NCC will direct each Bank to exercise its first
opportunity to terminate any Previous Merchant Agreement without Penalty. Upon
termination or expiration of a Previous Merchant Agreement, NCC shall direct a
Bank to enter into a Marketing Agreement with BUYER. Notwithstanding the
foregoing, the parties agree that all Banks subject to Previous Merchant
Agreements with National Processing Company, LLC or its subsidiaries will be
released from their obligations under such agreements as of the Effective Time,
provided each such Bank has entered into a Marketing Agreement with BUYER as of
the Effective Time.
4. MERGERS OF BANKS. In the event of a merger or consolidation of two or more
Banks, or the consolidation of branches owned or formerly owned by different
Banks, NCC shall be entitled to exercise its discretion, in good faith, in
determining which, if any, branches remain
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subject to a Previous Merchant Agreement. NCC agrees to consult with BUYER, upon
BUYER's request, in the process of making such determination. NCC shall notify
BUYER of any such determination, and BUYER shall be bound thereby; provided,
however, the provisions of Section 3 above relating to the termination or
buy-out of such Previous Merchant Agreement shall apply with respect to any such
branch. In no event will NCC, following the date this Agreement is fully
executed merge any of its Banks into an entity with a Previous Merchant
Agreement if, as a result of such merger, the Bankcard Transaction Sales Volume
from Banks to BUYER decreases by more than five percent (5%) in the aggregate.
5. FEES. Fees payable by BUYER to NCC pursuant to this Agreement are set
forth in Exhibit B attached hereto.
6. TERMS, TERMINATION AND EFFECTS OF TERMINATION.
(a) The initial term of this Agreement shall commence at the Effective
Time and shall continue for a period of ten (10) Years unless sooner terminated
pursuant to the terms of this Agreement. Upon the expiration of such initial
term, this Agreement shall automatically renew for successive two-Year terms
unless terminated by either party upon written notice to the other party at
least one (1) Year prior to the expiration of the initial term or any renewal
term. Termination pursuant to this paragraph 6(a) shall be effective upon
expiration of the then-current term. Following the termination of this Agreement
pursuant to this Section 6(a), BUYER's sole payment obligation pursuant to this
Agreement shall be to continue to pay NCC the Standard Spread set forth on
Exhibit B.
(b) This Agreement may be terminated by the non-breaching party at any
time for the breaching party's Breach of this Agreement. The non-breaching party
shall provide written notice of such Breach (the "BREACH NOTICE") to the
breaching party. Termination pursuant to this Section 6(b) shall become
effective on the later of one hundred (120) days following the date of the
breaching party's receipt of the Breach Notice or the termination date specified
in the Breach Notice. As used herein, "BREACH" means the occurrence, during the
term of this Agreement, of any of the following events that are not cured within
thirty (30) days following the breaching party's receipt of the Breach Notice:
(i) A party has materially violated any material provision of this
Agreement; (ii) any material information which a party provided was false,
incomplete or misleading when received; (iii) a party is unwilling to
perform fully its obligations under this Agreement or any applicable laws;
(iv) a party has willfully failed to promptly perform or discharge any
material obligation under this Agreement; (v) any of a party's
representations or warranties related to this Agreement was materially
untrue or inaccurate when given; or (vi) a petition in bankruptcy has been
filed by or against a party, a party is generally unable to pay its debts
as they become due or a party is placed in receivership.
If this Agreement is terminated by BUYER due to NCC's Breach for the events
defined in Sections 6(b)(i) through 6(b)(v), inclusive, BUYER's obligations to
pay the Standard Spread and/or the Reduced Spread set forth on Exhibit B shall
terminate on the effective termination
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date of this Agreement. In addition, prior to or on the effective date of
termination of this Agreement by BUYER due to NCC's Breach for the events
defined in Sections 6(b)(i) through 6(b)(v), inclusive, NCC shall pay BUYER, in
a lump sum payment, the Termination Fee set forth on Exhibit B that corresponds
to the Year in which the effective termination date of this Agreement falls.
If this Agreement is terminated by BUYER due to NCC's Breach for the event
defined in Section 6(b)(vi), BUYER's sole payment obligation pursuant to this
Agreement following this termination of this Agreement shall be to continue to
pay NCC the Standard Spread set forth on Exhibit B.
If this Agreement is terminated by NCC pursuant to this Section 6(b), BUYER's
sole payment obligation pursuant to this Agreement following the termination of
this Agreement pursuant to this Section 6(b) shall be to continue to pay the
Standard Spread set forth on Exhibit B.
(c) If NCC undergoes a Change in Control, then, NCC may terminate this
Agreement as set forth herein. For NCC's termination pursuant to this Section
6(c) to be effective, NCC must provide BUYER with written notice (i) of its
election to exercise its termination right under this Section 6(c) within one
hundred eighty (180) days of a Change of Control, and (ii) of the effective
termination date of this Agreement, which shall be the later of the date which
is (x) one hundred twenty (120) days after BUYER's receipt of such notice, (y)
the termination date set forth in such notice or (z) the third (3rd) anniversary
of the Effective Time. BUYER's sole payment obligation pursuant to this
Agreement following such effective termination date pursuant to this Section
6(c) shall be to continue to pay the Standard Spread set forth on Exhibit B. In
addition, prior to or on the effective date of termination of this Agreement
pursuant to this Section 6(c), NCC shall pay BUYER, in a lump sum payment, the
Termination Fee set forth on Exhibit B that corresponds to the Year in which the
effective termination date of this Agreement falls.
As used herein, "CHANGE IN CONTROL" means the occurrence during the term
of this Agreement of either of the following events:
(i) NCC is merged, consolidated or reorganized into or with
another corporation or other legal person, and as a result of such merger,
consolidation or reorganization less than fifty percent of the combined
voting power of the then-outstanding securities of such resulting
corporation or person immediately after such transaction are held in the
aggregate by the holders of voting stock of NCC immediately prior to such
transaction; or
(ii) NCC sells or otherwise transfers all or substantially all of
its assets to another corporation or other legal person; or
(iii) NCC makes a filing with the Securities and Exchange Commission
announcing a specific intended Change in Control as described in clauses
(i) or (ii) above.
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(d) This Agreement may be terminated for convenience by NCC any time after
the third Year of this Agreement, for any reason or for no reason, by written
notice to the BUYER. Termination pursuant to this Section 6(d) shall become
effective on the later of ninety (90) days from the date of delivery of such
notice or the termination date specified in such notice.
If NCC terminates this Agreement pursuant to this Section 6(d), BUYER's
obligations to pay the Standard Spread and/or the Reduced Spread will terminate
on the effective date of termination of this Agreement. Lastly, prior to or on
the effective date of termination of this Agreement pursuant to this Section
6(d), NCC shall pay BUYER, in a lump sum payment, the Termination Fee set forth
on Exhibit B that corresponds to the Year in which the effective termination
date of this Agreement falls.
(e) If BUYER acquires any entity that has a contractual arrangement with
another party that conflicts with the transactions contemplated by this
Agreement, then BUYER may terminate this Agreement as set forth herein. For
BUYER's termination pursuant to this Section 6(e) to be effective, BUYER must
provide NCC with written notice (i) of its election to exercise its termination
right under this Section 6(e) within one hundred eighty (180) days of BUYER's
acquisition of any entity that has a contractual arrangement with another party
that conflicts with the transactions contemplated by this Agreement, and (ii) of
the effective termination date of this Agreement, which shall be the later of
the date which is (x) one hundred twenty (120) days after NCC's receipt of such
notice or (y) the termination date set forth in such notice.
If BUYER terminates this Agreement pursuant to this Section 6(e), BUYER's
sole payment obligation pursuant to this Agreement following the effective date
of termination of this Agreement shall be to pay to NCC: (i) the continuing
Standard Spread; (ii) any actual, reasonable and direct damages NCC may suffer
as a result of such termination (in no event shall BUYER be responsible for
incidental, indirect, special, exemplary or consequential damages, even if the
parties knew about the possibility of these damages and if the parties are
unable to agree upon the actual and reasonable damages to NCC, the parties shall
follow the dispute resolution procedure set forth in Section 13); and (iii) in a
lump sum payment, One Million Dollars ($1,000,000) prior to or on the effective
termination date of this Agreement in consideration of NCC's immeasurable and
incidental costs associated with BUYER's early termination of this Agreement.
The parties hereto agree that the lump sum payment referred to in the preceding
sentence represents liquidated damages and does not constitute a penalty.
(f) Upon termination of this Agreement by (i) BUYER due to NCC's Breach
for the events defined in Sections 6(b)(i) through 6(b)(v), inclusive, (ii) NCC
in accordance with Section 6(c) or (iii) NCC in accordance with Section 6(d),
NCC, together with its respective affiliates, covenants and agrees that they
will not, directly or indirectly, on behalf of themselves or any person or
entity, contact, divert, take away or solicit, for the purpose of providing
Merchant Services thereto in the United States, for a period of two (2) years
after the effective date of the termination of this Agreement, any Merchant who
has been referred to BUYER pursuant to this Agreement or a Marketing Agreement.
(g) The parties agree that the rates for fees under this Agreement were
determined by mutual agreement based upon certain minimum requirements of
processing activity and the
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length of the initial term of this Agreement. NCC acknowledges that without the
certainty of the revenue during the initial term of this Agreement, BUYER would
have been unwilling to provide the Referral Incentive Fees, the Standard Spread
and the Reduced Spread as set forth on Exhibit B. The parties agree that it
would be difficult or impossible to ascertain the amount of or to prove BUYER's
actual damages in the event of a termination of this Agreement before the
expiration of the initial term. In addition the parties agree that the payment
of the Termination Fee by NCC pursuant to termination of this Agreement by (i)
BUYER as set forth in Section 6(b), (ii) NCC as set forth in Section 6(c), and
(iii) NCC as set forth in Section 6(d) is the true intention of the parties and
is not unconscionable, unreasonable or disproportionate to the actual damages
BUYER would suffer in the event of a termination of this Agreement before the
expiration of the initial term. The parties further agree the Termination Fee
set forth on Exhibit B is a reasonable estimation of the actual damages BUYER
would suffer if this Agreement were terminated in any given Year of the initial
term of this Agreement. The parties acknowledge and agree, after taking into
account the terms of this Agreement, that the Termination Fee set forth on
Exhibit B is liquidated damages that represents a reasonable and genuine
estimate of the actual damages BUYER would suffer in the event of early
termination of this Agreement and does not constitute a penalty.
(h) Except as otherwise set forth herein, upon the effective termination
date of this Agreement or the expiration date of this Agreement, BUYER's payment
obligations set forth on Exhibit B shall cease.
7. AMENDMENTS. No provision of this Agreement may be amended, modified or
waived except by a written agreement signed by BUYER and NCC.
8. WAIVER. No term or provision of this Agreement shall be deemed waived and
no breach excused unless such waiver or consent shall be in writing and signed
by the party claimed to have waived or consented. Any consent by any party to,
or waiver of, a breach by the other party, whether express or implied, shall not
constitute a consent to, waiver of or excuse for any different or subsequent
breach.
9. ASSIGNMENT. Neither party may assign this Agreement without the prior
written consent of the other party, which consent shall not be unreasonably
withheld, delayed or conditioned; provided, however, either party may assign
this Agreement to a parent, subsidiary or other affiliate without the consent of
the other party. Any assignment in violation of this Section 9 shall be null and
void. This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto, and their respective successors and permitted assigns.
10. INDEMNIFICATION AND REIMBURSEMENT.
(a) Indemnification by NCC. NCC shall indemnify, defend and hold harmless
BUYER and its officers, directors, employees and permitted assigns from and
against any loss, liability, action, proceeding, damage, fine, penalty or
expense (including administrative costs and expenses, attorneys' fees and costs
of defense) suffered or incurred by any of them as a result of (i) any action or
inaction taken by NCC in breach of this Agreement, (ii) any warranty or
representation made by NCC to BUYER being false or misleading, (iii) any
representation or
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warranty made by NCC to any third person other than as specifically authorized
by this Agreement or (iv) any failure by NCC to comply with the Rules (as
defined in the Marketing Agreement) or any applicable rules, regulations, orders
or requirements of any regulatory authority.
(b) Indemnification by BUYER. BUYER shall indemnify, defend and hold
harmless NCC and its officers, directors, employees and permitted assigns from
and against any loss, liability, action, proceeding, damage, fine, penalty or
expense (including administrative costs and expenses, attorneys' fees and costs
of defense) suffered or incurred by any of them as a result of (i) any action or
inaction taken by BUYER in breach of this Agreement, (ii) any warranty or
representation made by BUYER to NCC being false or misleading, (iii) any
representation or warranty made by BUYER to any third person other than as
specifically authorized by this Agreement or (iv) any failure by BUYER to comply
with the Rules or any applicable rules, regulations, orders or requirements of
any regulatory authority.
11. NOTICES. Except as otherwise provided in this Agreement, any notice or
other communication hereunder must be given in writing and either (a) delivered
in person or by courier service, (b) transmitted by facsimile, provided, that
any notice so given is also sent for delivery as provided in clause (a), or
mailed as provided in clause (c), or (c) mailed by certified or registered mail,
postage prepaid, as follows:
If to BUYER, to:
Bank of America, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy to:
Bank of America
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇, Assistant General Counsel
with a copy (which shall not constitute notice) to:
▇▇▇▇▇ Mulliss & Wicker, PLLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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If to NCC:
National City Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy (which shall not constitute notice) to:
▇▇▇▇▇ Day
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
or to such other address or to such other person as any party shall have last
designated by such written notice to the other parties. Each such notice or
other communication shall be effective (i) if given by facsimile, when
transmitted to the applicable number so specified in this Section 11 and oral
confirmation of its receipt is received, or (ii) if given by any other means,
when actually received at such address.
12. SEVERABILITY. The invalidity of any Section or subsection hereof shall not
affect the validity of any other Section or subsection hereof.
13. DISPUTES. Any disputes arising under this Agreement shall be elevated by
both parties to at least a level of Senior Vice President.
14. ARBITRATION AND WAIVER OF JURY TRIAL. In the event any dispute is not
resolved in accordance pursuant to Section 13 above, any claim or controversy
("CLAIM") between the parties, whether arising in contract or tort or by statute
including, but not limited to, Claims resulting from or relating to this
Agreement shall, upon the request of either party, be resolved by binding
arbitration in accordance with the Federal Arbitration Act (Title 9, US Code).
Arbitration proceedings will be conducted in accordance with the applicable
rules for the arbitration of disputes of JAMS or any successor thereof. The
arbitration will be conducted in Cleveland, Ohio or Louisville, Kentucky. The
arbitration hearing will commence within 90 days of the demand for arbitration
and close within 90 days of commencement, and any award, which may include legal
fees, shall be issued (with a brief written statement of the reasons therefore)
within 30 days of the close of the hearing. Any dispute concerning whether a
Claim is arbitrable or barred by the statute of limitations will be
determination by the arbitrator. This arbitration provision is not intended to
limit the right of any party to exercise self-help remedies, to seek and obtain
interim or provisional relief of any kind or to initiate judicial or
non-judicial foreclosure against any real or personal property collateral. By
agreeing to binding arbitration, the parties irrevocably and voluntarily waive
any right they may have to a trial by jury in respect of any
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Claim. Furthermore, if for any reason a Claim is not arbitrated, the parties
irrevocably and voluntarily agree to waive any right to a trial by jury in
respect of such Claim.
15. COUNTERPARTS. This Agreement may be executed by NCC and BUYER in one or
more counterparts, and each of which when so executed shall be an original but
all such counterparts shall constitute one and the same instrument.
16. PUBLICITY. BUYER and NCC each shall consult with the other and will not,
without obtaining the prior written consent of the other, issue any press
releases relating to this Agreement or the transactions contemplated by this
Agreement.
17. CONFIDENTIAL INFORMATION. Each party will treat as strictly confidential
the terms of this Agreement and all information concerning the other party's
marketing plans, marketing data, pricing and related material with the party
received in connection with this Agreement (collectively, the "CONFIDENTIAL
INFORMATION"). Each party will ensure that any agent whom such party employs or
retains to work with Confidential Information will adhere to this restriction of
non-disclosure. Notwithstanding the foregoing, Confidential Information does not
include any information that (i) has become generally available in the public
domain other than through a disclosure by a party to this Agreement that is
prohibited by this Section 17 or (ii) is shown to have been received by a party
to this Agreement from a person or entity that is (A) related to the other party
to this Agreement or (B) under a restriction against divulging Confidential
Information. Each party to this Agreement will promptly notify the other party
if it receives a subpoena or other legal process concerning the other party's
Confidential Information and will cooperate at the sole cost and expense of the
party seeking protection of Confidential Information in the reasonable efforts
by such party to contest any such subpoena or other legal process; provided,
however, that cooperation shall not include taking any action that unreasonably
interferes with the operation of such party's business in the ordinary course.
18. SURVIVAL. Sections 10, 14, 16 and 17, and any other Sections that by their
operative nature extend beyond the term of this Agreement shall survive any
termination of this Agreement.
19. AGREEMENT CONDITIONED UPON CLOSING OF MERGER AGREEMENT. If the Merger
Agreement is terminated pursuant to its terms, this Agreement shall
automatically terminate as of the effective termination date of the Merger
Agreement.
20. COMPLIANCE WITH LAWS AND RULES. Both parties agree to comply with all
laws, regulations and the Rules (as defined in the Marketing Agreement). In the
event that any laws, regulations or the Rules are modified such that some or all
of the activities contemplated by this Agreement are prohibited, then the
parties will negotiate in good faith to make any amendments to the Agreement or
to enter into a new Agreement to provide the continued future cooperative
relationship of BUYER and NCC on terms as similar as possible to those
contemplated by this Agreement, provided that no party will be obligated to
agree to any terms that are unreasonable or unduly burdensome to it.
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21. ENTIRE AGREEMENT, BINDING EFFECT; GOVERNING LAW. This Agreement embodies
the entire understanding and agreement of the parties with respect to the
subject matter hereof. This Agreement shall be binding upon and shall inure only
to the benefit of the parties hereto and their respective successors and
permitted assigns. Nothing in this Agreement, express or implied, is intended to
confer or shall be deemed to confer upon any persons or entities not parties to
this Agreement any rights or remedies under or by reason of this Agreement. This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of Ohio, without giving effect to any provision regarding
conflicts of laws.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Agreement.
__________________________________ __________________________________
BANK OF AMERICA, N.A. NATIONAL CITY CORPORATION
"BUYER" "NCC"
By: /s/ ▇▇▇▇-▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
_______________________________ ________________________________
Name: ▇▇▇▇-▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President Title: Executive Vice President
Date: July 12, 2004 Date: July 12, 2004
MASTER REFERRAL AGREEMENT
Signature Page 1 of 1
Schedule 1
To Master Referral Agreement
Between Bank of America, N.A. and National City Corporation
Dated July 12, 2004
All Banks owned by NCC or in which NCC has a controlling interest as of
the date of execution of the Master Referral Agreement by NCC and BUYER:
National City Bank of Southern Indiana
National City Bank of Indiana
National City Bank of Kentucky
National City Bank of Pennsylvania
National City Bank
National City Bank of the Midwest
The Provident Bank
The Madison Bank & Trust Company
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Schedule 3
To Master Referral Agreement
Between Bank of America, N.A. and National City Corporation
Dated July 12, 2004
Agreement between The Provident Bank and Nova.
Bank Merchant Referral and Servicing Agreement, dated August 28, 2002, by and
among Allegiant Bank and RPSI, Inc. d/b/a Retriever Payment System and First
National Bank of Omaha, as amended
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Exhibit A
To Master Referral Agreement
Between Bank of America, N.A. and National City Corporation
Dated July 12, 2004
MARKETING AND CASH ADVANCE AGREEMENT
THIS MARKETING AND CASH ADVANCE AGREEMENT (this "AGREEMENT") is made and entered
into as of the 12th day of July, 2004 to be effective upon the earlier of the
Effective Time (as defined in the Merger Agreement (as defined herein)) or the
date hereof, by and between Bank of America, N.A., a national banking
association with its principal office located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("BUYER"), National City Bank
_______________________, a national banking association with its principal
office at _________________________________ ("NATIONAL CITY") and National City
Corporation, a Delaware corporation with its principal office located at ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ("NCC").
WHEREAS, Bank of America Corporation, a Delaware corporation ("PARENT"),
Monarch Acquisition, Inc. ("MONARCH"), an Ohio corporation and wholly owned
indirect subsidiary of Parent, and National Processing, Inc., an Ohio
corporation ("NPI"), have entered into an Agreement and Plan of Merger, dated
July 12, 2004 (the "MERGER AGREEMENT"), pursuant to which Monarch is merging
into NPI and NPI is becoming an indirect wholly owned subsidiary of Parent as
further described therein; and
WHEREAS, the execution and delivery of this Agreement by the parties
hereto is a condition to the closing of the transactions set forth in the Merger
Agreement; and
WHEREAS, this Agreement is entered into pursuant to a certain Master
Referral Agreement (the "MASTER REFERRAL AGREEMENT") between BUYER and NCC dated
July 12, 2004; and
WHEREAS, BUYER is a principal member of the MasterCard International, Inc.
("MASTERCARD") and VISA U.S.A., Inc. ("VISA") interchange systems (collectively
or individually referred to as "INTERCHANGE SYSTEMS" or "INTERCHANGE SYSTEM")
and NATIONAL CITY desires to become an Affiliate Member (as hereinafter defined)
of the Interchange Systems; and
WHEREAS, the purposes of this Agreement are (i) to set forth the terms and
conditions governing NATIONAL CITY's participation in the Interchange Systems as
an Affiliate Member, (ii) to allow NATIONAL CITY to make cash advances to
MasterCard and VISA Cardholders (as hereinafter defined) and/or (iii) to allow
NATIONAL CITY to act as a source for Merchant Agreements (as hereinafter
defined) on behalf of BUYER (items (i), (ii) and (iii) collectively referred to
as "AUTHORIZED ACTIVITIES"); and
WHEREAS, except as otherwise provided in the Master Referral Agreement, or
unless otherwise specifically agreed to in writing by BUYER and NATIONAL CITY,
NATIONAL CITY shall encourage its customers to enter into Merchant Agreements or
otherwise refer customers to BUYER on an exclusive basis.
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NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, and for other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties herto agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the terms defined in the
recitals above shall have the meanings set forth therein and the following
terms shall have the meanings set forth below:
a) "AFFILIATE MEMBER" means a financial institution or other entity that
participates, or proposes to participate, indirectly through an associate
member or principal member in the card activities of the Interchange
Systems.
b) "BANK ACCOUNT" has the meaning given to such term in Section 5 of this
Agreement.
c) "BANKCARD" means a valid credit card or debit card issued by a member
of either Interchange System and bearing its respective trade names,
trademarks and/or trade symbols.
d) "CARDHOLDER" means the person or entity whose name is embossed on the
face of the Bankcard or any person or entity who is a duly authorized user
of the Bankcard or the account established in connection with the
Bankcard.
e) "CASH ADVANCE" means a transaction between NATIONAL CITY and Cardholder
in which a Cardholder obtains cash in person at NATIONAL CITY's facility.
f) "CASH ADVANCE SLIP" means an electronic record of a Cash Advance that
NATIONAL CITY presents to BUYER for processing through the Interchange
Systems.
g) "LARGE MERCHANT" means a Merchant (i) with greater than $50,000,000
Bankcard Transaction Sales Volume per year, (ii) with greater than
1,000,000 Bankcard transactions per year or (iii) with greater than
$100,000,000 in net revenue for its total business.
h) "MARKS" has the meaning given to such term in Section 9 of this
Agreement.
i) "MERCHANT" means any (i) customer referred to BUYER by NATIONAL CITY
that has been accepted by BUYER under this Agreement and that has entered
into a Merchant Agreement with BUYER, (ii) customer that is a party to a
merchant agreement with NPC as of the Effective Time of the Merger
Agreement, and (iii) customer deemed to be a NATIONAL CITY Merchant
pursuant to Section 3(a) below.
j) "MERCHANT AGREEMENT" means the written agreement entered into between
BUYER and Merchant pertaining to the processing, clearing and settlement
by BUYER of Merchant's Bankcard transactions through the Interchange
Systems.
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k) "MERCHANT SERVICES" means the business of providing services to
merchants and banks consisting of the authorization, processing and
settlement of transactions initiated by customers of such merchants and
banks through the use of charge cards.
l) "NPC" means National Processing Company, LLC and it subsidiaries.
m) "REFERRAL" means a customer, excluding any merchant of BUYER, (i) with
whom NATIONAL CITY has had contact about accepting Bankcards at such
customer's business locations, and (ii) who has expressed an interest in
accepting Bankcards at such customer's business locations.
n) "REFERRAL NOTICE" has the meaning set forth in Section 3(a) below.
o) "REFERRAL NOTICE PERIOD" has the meaning set forth in Section 3(a)
below.
p) "RULES" means all bylaws, rules, operational regulations, procedures
and guidelines promulgated by the Interchange Systems, and all other
applicable rules, regulations and requirements of services, programs,
providers, banks, institutions, organizations, associations and networks
which govern or otherwise affect any services or systems provided by
NATIONAL CITY, and all state and federal laws, rules and regulations which
govern or otherwise affect the activities of NATIONAL CITY, as any or all
the foregoing may be amended and in effect from time to time.
q) "SHAREHOLDER AGREEMENT" means that certain Shareholders Agreement dated
July 12, 2004 by and between Parent and NCC.
2. OBLIGATIONS OF NATIONAL CITY.
a) Referrals. NATIONAL CITY shall provide to BUYER the names of NATIONAL
CITY's Referrals in writing, by telephone or fax, or via the Internet,
directed to a person and/or address specified by BUYER. BUYER or its
designated representatives shall perform follow-up marketing as to such
Referrals by means of sales calls in an attempt to secure Merchant
Agreements with such Referrals.
b) Solicitations. NATIONAL CITY may solicit new customers who wish to
accept Bankcards at such customer's business locations and attempt to
secure Merchant Agreements with such new customers on behalf of BUYER by
means of direct sales calls from NATIONAL CITY's own sales
representatives.
c) Marketing. NATIONAL CITY shall incorporate BUYER's merchant services
program within NATIONAL CITY's marketing and promotional material
available at NATIONAL CITY locations (e.g., small business services
information "Take One" racks) and in special marketing events aimed at
businesses and commercial customers (e.g., "sales blitzes").
d) Incentives. NATIONAL CITY shall provide financial incentives to its
retail employees to promote Referrals to BUYER. The financial incentives
shall be in a manner consistent
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with or better than the normal incentives that are provided by NATIONAL
CITY to its retail employees who promote merchant services customers as of
the Effective Time of the Merger Agreement.
e) Training. NATIONAL CITY shall provide sales representatives of BUYER
access to NATIONAL CITY's retail employees, at mutually agreed-upon times
at NATIONAL CITY's premises, to educate and train NATIONAL CITY's retail
employees regarding BUYER's merchant services program.
3. OBLIGATIONS OF BUYER.
a) Accept Referrals. BUYER shall accept notice of Referrals from NATIONAL
CITY in writing, by telephone or fax, or via the Internet, directed to a
person and/or address specified by BUYER (a "REFERRAL NOTICE"). Once BUYER
receives a Referral Notice from NATIONAL CITY, BUYER agrees to use
reasonable efforts to refrain from soliciting Merchant Services business
from such Referral for the fourteen (14) day period following BUYER's
receipt of the Referral Notice (the "REFERRAL NOTICE PERIOD").
Notwithstanding the foregoing, in the event BUYER enters into an agreement
for Merchant Services with a customer, and (i) such customer is later
deemed to be a Referral, (ii) BUYER received a Referral Notice for such
customer prior to BUYER's receipt of either an application for Merchant
Services from such customer (due to solicitation of such customer from
BUYER's employee) or an executed Merchant Agreement from such customer
(due to solicitation of such customer from BUYER's employee), and (iii)
the Merchant Agreement with such customer was fully executed during the
Referral Notice Period, then such resulting Merchant Agreement and account
for such customer will be considered a NATIONAL CITY Merchant for purposes
of the payment of fees calculated based on Approved Applications and
Bankcard Transaction Sales Volume. Notwithstanding the foregoing, BUYER
has no duty to refrain from soliciting a Large Merchant and no resulting
agreement or account between Large Merchant and BUYER will be considered a
NATIONAL CITY Merchant for any purposes.
b) Follow Up. BUYER shall utilize its sales resources to follow up on all
Referrals from NATIONAL CITY within two (2) business days after receiving
such a Referral Notice, with the intent of entering into Merchant
Agreements with all qualified customers. In addition, BUYER shall use
reasonable efforts to enter into Merchant Agreements with all qualified
customers within the Referral Notice Period.
c) Training. BUYER shall provide sales representatives, at mutually
agreed-upon times at NATIONAL CITY's premises, to educate and train
NATIONAL CITY's retail employees regarding BUYER's Merchant Services
program.
d) Marketing. As reasonably requested by NATIONAL CITY, BUYER shall
provide sales representatives to participate in NATIONAL CITY's marketing
promotions (e.g., "sales blitzes").
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e) Merchant Agreement. In accordance with the Rules, BUYER shall enter
into Merchant Agreements with all Referrals who desire to do so and who
meet BUYER's underwriting and pricing criteria. As between BUYER and
NATIONAL CITY, BUYER shall assume all potential chargeback liability and
other liability associated with each Merchant and Merchant Agreement;
provided, however, on a "case-by-case" basis, NATIONAL CITY may agree to
assume some or all such liability as an inducement to BUYER to enter into
a Merchant Agreement with a Referral who fails to meet BUYER's
underwriting criteria. Notwithstanding the foregoing, BUYER shall have the
absolute right to refuse to enter into a Merchant Agreement with a
Referral whose business falls within one of the industry types listed on
Schedule 3(e) attached hereto (which BUYER may amend from time to time
with notice to NATIONAL CITY) whether or not BUYER has previously entered
into a Merchant Agreement with any customer whose business falls within
one of the industry types listed on Schedule 3(e) provided that BUYER
applies its right to refuse a Referral in a consistent manner throughout
BUYER's Merchant Services business.
f) Materials. BUYER shall provide NATIONAL CITY at all times sufficient
quantities of materials reasonably required to refer customers to BUYER
(e.g., merchant applications) and shall provide to Merchants all materials
reasonably necessary for them to participate in BUYER's Merchant Services
program (e.g., training guides and reference materials).
g) Turnkey Solution. BUYER shall provide to Merchants all aspects of a
turnkey Merchant Services solution (e.g., terminal support, transaction
processing and settlement, customer service, activity reporting and
chargeback processing).
h) Lead Tracking. BUYER shall maintain and make accessible to NATIONAL
CITY, via the Internet, a formal lead tracking mechanism to report on
NATIONAL CITY's Referral activity and results thereof.
i) Staffing. BUYER shall designate an "NCC Program Manager" as a ready
point of contact for NATIONAL CITY to communicate with BUYER. BUYER shall
provide a dedicated, adequately-staffed sales force assigned by BUYER to
maximize the number of Referrals that enter into Merchant Agreements. The
BUYER's sales coverage, i.e. the ability to generate Referrals and
complete sales, shall be in a manner consistent with or better than that
provided by NPC to NATIONAL CITY as of the Effective Time of the Merger
Agreement.
j) Service Quality. BUYER shall provide Merchant Services to Merchants in
a manner and at a quality level consistent with or better than that
provided to any other segment of BUYER's regional portfolio, but in no
event at a quality level below that provided by NPC to approved merchants
referred to NPC by subsidiary banks of NCC prior to the Effective Time of
the Merger Agreement.
k) Merchant Pricing. BUYER shall provide Merchant Services and equipment
to Merchants, excluding Large Merchants, at pricing rates that are
comparable to those offered to similar merchants by BUYER in similar
industries, sizes and locations. BUYER
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agrees that it will not attempt to offer a Merchant, excluding Large
Merchants, lower pricing than that which a Merchant receives under this
Agreement.
l) Functionality. BUYER shall assure that the functionality of Merchant
Services and equipment made available to Merchants shall be equal to the
best functionality made available by BUYER to any comparable merchant in
any segment of BUYER's regional portfolio.
m) Branding. To the extent permitted by the Rules, laws and regulations,
BUYER shall brand all applications to be used by NATIONAL CITY in
referring customers to BUYER, and all Merchant Agreements, equipment
decals, Merchant statements and correspondence to Merchants as "National
City Merchant Services," utilizing the "National City" name and logo as
reasonably specified by NCC. BUYER shall provide a dedicated customer
service line, for use by Merchants and NATIONAL CITY's retail employees,
on which calls are answered as "National City Merchant Services." BUYER's
representatives who call on Referrals shall present themselves as
representing "National City Merchant Services."
n) Confidentiality. BUYER shall maintain the confidentiality of the
database of Referrals and Merchants within BUYER's Merchant Services
division and shall refrain forever from using it for any purpose
whatsoever except for providing Merchant Services. This provision shall
survive termination of this Agreement. Notwithstanding the foregoing,
BUYER may continue its solicitation of business in the normal course
including but not limited to (i) accepting referrals from its affiliates
who initiated contact with any Merchant, (ii) soliciting Merchants from
lists developed by third parties and (iii) soliciting Merchants who are
members of associations or organizations with which BUYER has a marketing
agreement. BUYER has no duty to compare and delete names of prospective
Merchants from affiliate referrals, lists compiled by third parties,
association membership lists or organization membership lists on the basis
that such prospective Merchant's name appears on the NATIONAL CITY
database of Merchants.
4. FEES PAYABLE BY BUYER TO NATIONAL CITY. BUYER agrees to pay to NCC on
behalf of NATIONAL CITY, and NATIONAL CITY agrees to accept payment from
NCC in accordance with such terms and conditions as are specified on
Exhibit B to the Master Referral Agreement, as the same may be amended
from time to time. BUYER shall provide to NCC on a monthly basis in
writing, or via electronic communication with confirmation of return
receipt, on behalf of NATIONAL CITY, supporting documentation by which NCC
may distribute such amounts or fees to NATIONAL CITY. NCC agrees to pay
NATIONAL CITY the amount required to be paid based upon the Information
(as defined in the Master Referral Agreement) provided by BUYER. NATIONAL
CITY agrees to accept NCC's payment as payment in full of any monies owed
by BUYER to NATIONAL CITY. In the event NATIONAL CITY believes NCC's
payments are erroneous and such amounts do not reflect the amount paid by
BUYER to NCC on behalf of NATIONAL CITY, NATIONAL CITY agrees that its
sole recourse is against NCC.
5. BANK ACCOUNT. NATIONAL CITY shall establish and maintain during the term
of this Agreement a demand deposit account ("BANK ACCOUNT") with any bank
(including
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NATIONAL CITY) that is a direct or indirect participant in the Federal
Reserve Automated Clearing House system. NATIONAL CITY shall be solely
liable for all fees and costs associated with the Bank Account and for all
overdrafts, regardless of cause. In the event NATIONAL CITY wishes to
change the Bank Account in any way, NATIONAL CITY shall first notify BUYER
of such change. NATIONAL CITY shall not close, restrict, deny access to or
change the Bank Account in any way without the prior written approval of
BUYER. NATIONAL CITY hereby authorizes BUYER (i) to collect any amount
payable by NATIONAL CITY to BUYER under this Agreement by making an
appropriate debit to the Bank Account, (ii) to pay any amount payable to
NATIONAL CITY under this Agreement by making an appropriate credit to the
Bank Account and (iii) to make entries to the Bank Account for adjustments
to any of the foregoing. NATIONAL CITY hereby appoints BUYER as NATIONAL
CITY's agent and attorney-in-fact to take such action on its behalf, or in
turn authorize others to take such action on its behalf, as shall be
necessary for purposes of establishment and execution of the process to
cause debit and credit entries to the Bank Account in accordance with the
terms of this Agreement, including any reversal or adjustments to original
entries made to the Bank Account. NATIONAL CITY shall strive to maintain a
credit balance in the Bank Account in an amount sufficient to cover
chargebacks from Cash Advances and under Merchant Agreements as to which
NATIONAL CITY has specifically assumed liability for losses and any fees
or other amounts due to BUYER by NATIONAL CITY under the terms of this
Agreement. If at any time funds in the Bank Account are not sufficient to
cover the chargebacks, adjustment, fees and other amounts due from
NATIONAL CITY hereunder, NATIONAL CITY shall promptly pay BUYER any and
all such sums upon request.
6. CASH ADVANCES.
a) Compliance with Rules. NATIONAL CITY hereby acknowledges receipt and
understanding of the Rules and shall fully comply with all applicable
Rules when making a Cash Advance.
b) Transmission of Cash Advances. NATIONAL CITY shall electronically
transmit each Cash Advance Slip to BUYER not later than the bank business
day following the date of such Cash Advance.
c) Acceptance and Payment. BUYER shall accept all Cash Advance Slips that
comply with the terms of this Agreement and the Rules. BUYER shall pay
NATIONAL CITY, or cause NATIONAL CITY to be paid, the total face amount of
each Cash Advance Slip properly received by BUYER. NATIONAL CITY
understands and agrees that the acceptance of a Cash Advance Slip by BUYER
and the making of an appropriate credit to the Bank Account shall
constitute full payment to NATIONAL CITY for such Cash Advance. After such
an appropriate credit to the Bank Account is made, NATIONAL CITY shall not
make any claim against or receive payment from any person with respect to
the same Cash Advance, except for that amount of any chargeback related to
such Cash Advance for which NATIONAL CITY is liable under this Agreement
and has repaid BUYER.
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d) Obligations of BUYER. BUYER shall be responsible for all processing and
accounting functions relating to the clearing and settlement of Cash
Advances.
e) BUYER Compensation. BUYER shall not charge NATIONAL CITY for Cash
Advance transactions; however, BUYER shall retain all interchange income
generated from Cash Advances originated by NATIONAL CITY.
7. ADJUSTMENTS. All debits and credits covered by this Agreement shall be
subject to audit and final checking by BUYER, and adjustments may be made
for any inaccuracies discovered.
8. BOOKS AND RECORDS. NATIONAL CITY shall preserve its records of each Cash
Advance made by NATIONAL CITY for a period of at least three (3) years
from the date of such Cash Advance. Representatives of BUYER may, during
normal business hours and upon reasonable notice, examine and make copies
of such records during such three-year period.
9. PROMOTIONAL MATERIALS. All use of promotional materials, trade names,
trademarks, service marks and logo types associated with the Interchange
Systems ("MARKS") shall be governed in accordance with regulations
relating to NATIONAL CITY's participation as an Affiliate Member of the
Interchange Systems. NATIONAL CITY acknowledges and agrees that MasterCard
and VISA are the owners of their respective Marks and that no right, title
or interest in such Marks is being conveyed to NATIONAL CITY.
10. LIABILITY.
a) NATIONAL CITY assumes all liability for chargebacks that are incurred
in connection with Cash Advances made by NATIONAL CITY.
b) NATIONAL CITY assumes no liability for chargebacks or other losses
which occur under Merchant Agreements approved by BUYER; provided,
however, that NATIONAL CITY assumes all liability for chargebacks and
losses (i) that were caused by the gross negligence or willful misconduct
of NATIONAL CITY, its agents, officers, directors, employees, or
affiliates or (ii) to the extent to which NATIONAL CITY has assumed in
writing full or partial liability for approval of the Merchant account
related to such chargebacks or losses.
11. NATIONAL CITY COOPERATION WITH MERCHANT COLLECTION. In the event BUYER
seeks to collect amounts due BUYER from a Merchant, NATIONAL CITY agrees
to cooperate with BUYER to the extent such cooperation is permitted by
applicable law, the Rules, NATIONAL CITY's contractual relationship with
the Merchant and any written policies of NATIONAL CITY and provided that
such cooperation will not unduly interfere with the ordinary course
operation of the business of NATIONAL CITY.
12. TERM AND TERMINATION. The term of this Agreement shall commence as set
forth in the Preamble above and be coterminous with the Master Referral
Agreement.
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13. RELATIONSHIP OF THE PARTIES.
a) This Agreement does not create a principal and agent relationship
between the parties hereto and neither party to this Agreement shall be
considered to be the agent or legal representative of the other. NATIONAL
CITY is not authorized to make any warranty or representation on behalf of
BUYER except as specifically authorized by this Agreement. It is expressly
understood that NATIONAL CITY and BUYER are in all respects independent
parties to this Agreement. NATIONAL CITY agrees that it will not represent
to any person that it is the agent of BUYER.
b) NATIONAL CITY acknowledges that, as between NATIONAL CITY and BUYER,
BUYER owns the relationships with the Merchants with respect to the
services provided under each Merchant Agreement.
14. ADDITIONAL TERMS.
a) Sponsorship. BUYER shall sponsor NATIONAL CITY for membership in
MasterCard and VISA in a membership category that permits NATIONAL CITY to
perform the Authorized Activities. NATIONAL CITY shall be solely
responsible for all dues, assessments, costs, expenses, fees and fines
associated with its membership as an Affiliate Member or termination of
its membership as an Affiliate Member in MasterCard and VISA and shall
reimburse BUYER for any such charges paid by BUYER in connection with such
membership.
b) Compliance with Rules. NATIONAL CITY shall fully comply with all
applicable Rules. If there is any inconsistency between the Rules and the
terms of this Agreement, the Rules shall control. This Agreement shall be
deemed to be automatically amended to reflect any change in any applicable
Rule.
c) Compliance with 12 Code of Federal Regulations (CFR) Part 40. The
parties hereto agree that they shall not disclose or use any "nonpublic
personal information", as defined by 12 CFR 40.3(n)(1), which any party
has provided to any other party, other than to carry out the purposes for
which the information was disclosed, including use under an exception in
12 CFR 40.14 or 40.15 in the ordinary course of business to carry out
those purposes.
d) Information Security. The parties hereto agree to maintain appropriate
security measures to safeguard "nonpublic personal information," in
accordance with the Information Security Regulations, as defined by 12 CFR
30, including but not limited to the following: (i) access controls on
nonpublic personal information systems, including controls to authenticate
and permit access only to authorized individuals and controls to prevent
employees from providing nonpublic personal information to unauthorized
individuals who may seek to obtain this information through fraudulent
means; (ii) access restrictions at physical locations containing nonpublic
personal information, such as buildings, computer facilities, and records
storage facilities to permit access only to authorized individuals; (iii)
encryption of electronic nonpublic personal information, including while
in transit or in storage on networks or systems to which unauthorized
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individuals may have access; (iv) procedures designed to ensure that
nonpublic personal information system modifications are consistent with
the information security measures; (v) dual control procedures,
segregation of duties, and employee background checks for employees with
responsibilities for or access to nonpublic personal information; (vi)
monitoring systems and procedures to detect actual and attempted attacks
on or intrusions into nonpublic personal information systems; (vii)
response programs that specify actions to be taken when the parties detect
unauthorized access to nonpublic personal information systems, including
immediate reports to the parties hereto; (viii) measures to protect
against destruction, loss or damage of nonpublic personal information due
to potential environmental hazards, such as fire and water damage or
technological failures; (ix) training staff to implement the information
security measures; (x) regular testing of key controls, systems and
procedures of the information security measures by independent third
parties or staff independent of those that develop or maintain the
security measures; and (xi) reporting of the results of its audits,
summaries of test results, and other evaluations of information security
systems and procedures.
15. AMENDMENTS. No provision of this Agreement may be amended, modified or
waived except by a written agreement signed by BUYER and NATIONAL CITY.
16. WAIVER. No term or provision of this Agreement shall be deemed waived and
no breach excused unless such waiver or consent shall be in writing and
signed by the party claimed to have waived or consented. Any consent by
any party to, or waiver of, a breach by the other party, whether express
or implied, shall not constitute a consent to, waiver of or excuse for any
different or subsequent breach.
17. ASSIGNMENT. Neither party may assign this Agreement without the prior
written consent of the other party, which consent shall not be
unreasonably withheld, delayed or conditioned. Notwithstanding the
foregoing, BUYER may assign this Agreement to a parent, subsidiary or
other affiliate without the consent of NATIONAL CITY and NATIONAL CITY,
subject to the provisions of Section 1 of the Master Referral Agreement,
may assign this Agreement to a parent, subsidiary or other affiliate
without the consent of BUYER. Any assignment in violation of this Section
17 shall be null and void. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
18. INDEMNIFICATION AND REIMBURSEMENT.
a) Indemnification by NATIONAL CITY. NATIONAL CITY shall indemnify, defend
and hold harmless BUYER and its officers, directors, employees and
permitted assigns from and against any loss, liability, action,
proceeding, damage, fine, penalty or expense (including administrative
costs and expenses, attorneys' fees and costs of defense) suffered or
incurred by any of them as a result of (i) any action or inaction taken by
NATIONAL CITY in breach of this Agreement, (ii) any warranty or
representation made by NATIONAL CITY to BUYER being false or misleading,
(iii) any representation or warranty made by NATIONAL CITY to any third
person other than as specifically authorized by this Agreement or (iv) any
failure by NATIONAL CITY to comply with the
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Rules or any applicable rules, regulations, orders or requirements of any
regulatory authority.
b) Indemnification by BUYER. BUYER shall indemnify, defend and hold
harmless NATIONAL CITY and its officers, directors, employees and
permitted assigns from and against any loss, liability, action,
proceeding, damage, fine, penalty or expense (including administrative
costs and expenses, attorneys' fees and costs of defense) suffered or
incurred by any of them as a result of (i) any action or inaction taken by
BUYER in breach of this Agreement, (ii) any warranty or representation
made by BUYER to NATIONAL CITY being false or misleading, (iii) any
representation or warranty made by BUYER to any third person other than as
specifically authorized by this Agreement or (iv) any failure by BUYER to
comply with the Rules or any applicable rules, regulations, orders or
requirements of any regulatory authority.
19. NOTICES. Except as otherwise provided in this Agreement, any notice or
other communication hereunder must be given in writing and either (a)
delivered in person or by courier service, (b) transmitted by facsimile,
provided, that any notice so given is also sent for delivery as provided
in clause (a), or mailed as provided in clause (c), or (c) mailed by
certified or registered mail, postage prepaid, as follows:
If to BUYER, to:
Bank of America, N.A.
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Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy to:
Bank of America
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Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇, Assistant General Counsel
with a copy (which shall not constitute notice) to:
▇▇▇▇▇ Mulliss & Wicker, PLLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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If to NCC:
National City Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy (which shall not constitute notice) to:
▇▇▇▇▇ Day
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
If to NATIONAL CITY:
_______________________________
_______________________________
_______________________________
Telecopy No.:_________________
Attention:____________________
with a copy (which shall not constitute notice) to:
_______________________________
_______________________________
_______________________________
Telecopy No.:_________________
Attention:____________________
or to such other address or to such other person as any party shall have
last designated by such written notice to the other parties. Each such
notice or other communication shall be effective (i) if given by
facsimile, when transmitted to the applicable number so specified in this
Section 19 and oral confirmation of its receipt is received, or (ii) if
given by any other means, when actually received at such address.
20. SEVERABILITY. The invalidity of any Section or subsection hereof shall not
affect the validity of any other Section or subsection hereof.
21. DISPUTES. Any disputes arising under this Agreement shall be elevated by
both parties to at least a level of Senior Vice President before a party
resorts to litigation.
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22. ARBITRATION AND WAIVER OF JURY TRIAL. In the event any dispute is not
resolved in accordance pursuant to Section 21 above, any claim or
controversy ("CLAIM") between the parties, whether arising in contract or
tort or by statute including, but not limited to, Claims resulting from or
relating to this Agreement shall, upon the request of either party, be
resolved by binding arbitration in accordance with the Federal Arbitration
Act (Title 9, US Code). Arbitration proceedings will be conducted in
accordance with the applicable rules for the arbitration of disputes of
JAMS or any successor thereof. The arbitration will be conducted in
Cleveland, Ohio or Louisville, Kentucky. The arbitration hearing will
commence within 90 days of the demand for arbitration and close within 90
days of commencement, and any award, which may include legal fees, shall
be issued (with a brief written statement of the reasons therefore) within
30 days of the close of the hearing. Any dispute concerning whether a
Claim is arbitrable or barred by the statute of limitations will be
determination by the arbitrator. This arbitration provision is not
intended to limit the right of any party to exercise self-help remedies,
to seek and obtain interim or provisional relief of any kind or to
initiate judicial or non-judicial foreclosure against any real or personal
property collateral. By agreeing to binding arbitration, the parties
irrevocably and voluntarily waive any right they may have to a trial by
jury in respect of any Claim. Furthermore, if for any reason a Claim is
not arbitrated, the parties irrevocably and voluntarily agree to waive any
right to a trial by jury in respect of such Claim.
23. COUNTERPARTS. This Agreement may be executed by BUYER and NATIONAL CITY in
one or more counterparts, and each of which when so executed shall be an
original but all such counterparts shall constitute one and the same
instrument.
24. PUBLICITY. BUYER and NATIONAL CITY each shall consult with the other and
will not, without obtaining the prior written consent of the other, issue
any press releases relating to this Agreement or the transactions
contemplated by this Agreement.
25. CONFIDENTIAL INFORMATION. Each party will treat as strictly confidential
the terms of this Agreement and all information concerning the other
party's marketing plans, marketing data, pricing and related material with
the party received in connection with this Agreement (collectively, the
"CONFIDENTIAL INFORMATION"). Each party will ensure that any agent whom
such party employs or retains to work with Confidential Information will
adhere to this restriction of non-disclosure. Notwithstanding the
foregoing, Confidential Information does not include any information that
(i) has become generally available in the public domain other than through
a disclosure by a party to this Agreement that is prohibited by this
Section 25 or (ii) is shown to have been received by a party to this
Agreement from a person or entity that is (A) related to the other party
to this Agreement or (B) under a restriction against divulging
Confidential Information. Each party to this Agreement will promptly
notify the other party if it receives a subpoena or other legal process
concerning the other party's Confidential Information and will cooperate
at the sole cost and expense of the party seeking protection of
Confidential Information in the reasonable efforts by such party to
contest any such subpoena or other legal process; provided, however, that
cooperation shall not include taking any action that unreasonably
interferes with the operation of such party's business in the ordinary
course.
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26. SURVIVAL. Sections 3(n), 8, 10, 11, 18, 22, 24 and 25 and any other
Sections that by their operative nature extend beyond the term of this
Agreement shall survive any termination of this Agreement.
27. AGREEMENT CONDITIONED UPON CLOSING OF MERGER AGREEMENT. If the Merger
Agreement is terminated pursuant to its terms, this Agreement shall
automatically terminate as of the effective termination date of the Merger
Agreement.
28. COMPLIANCE WITH LAWS AND RULES. All parties agree to comply with all laws,
regulations and the Rules. In the event that any laws, regulations or the
Rules are modified such that some or all of the activities contemplated by
this Agreement are prohibited, then the parties will negotiate in good
faith to make any amendments to the Agreement or to enter into a new
Agreement to provide the continued future cooperative relationship of
BUYER, NCC and NATIONAL CITY on terms as similar as possible to those
contemplated by this Agreement, provided that no party will be obligated
to agree to any terms that are unreasonable or unduly burdensome to it.
29. ENTIRE AGREEMENT, BINDING EFFECT; GOVERNING LAW. This Agreement embodies
the entire understanding and agreement of the parties with respect to the
subject matter hereof. This Agreement shall be binding upon and shall
inure only to the benefit of the parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement, express or
implied, is intended to confer or shall be deemed to confer upon any
persons or entities not parties to this Agreement any rights or remedies
under or by reason of this Agreement. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of Ohio,
without giving effect to any provision regarding conflicts of laws. In the
event of any conflict between the terms of this Agreement, including any
exhibits or schedules attached hereto, and Section 9 of the Shareholders
Agreement, the provisions of Section 9 of the Shareholders Agreement shall
control.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Agreement.
__________________________________
BANK OF AMERICA, N.A.
"BUYER"
By:_______________________________
Name:_____________________________
Title:____________________________
Date:_____________________________
NATIONAL CITY ____________________
"NATIONAL CITY"
By:_______________________________
Name:_____________________________
Title:____________________________
Date:_____________________________
NATIONAL CITY CORPORATION
"NCC"
By:_______________________________
Name:_____________________________
Title:____________________________
Date:_____________________________
MARKETING AND CASH ADVANCE AGREEMENT
Signature Page 1 of 1
Schedule 3(e)
To Marketing and Cash Advance Agreement
Between BUYER, NCC and NATIONAL CITY
Category C-New Definition Bulletin 3-2002
High Risk
Adult entertainment
Auction or subscription services
Bail and bond payment agencies
Cash advances or scrip issuing agencies
Collection agencies
Consulting services
Coupon book or prepaid telephone cards sales or service
Door-to-door sales
Furniture stores in business for less than two years
Infomercials
Introduction, dating, and escort services
Investment services
Mail/telephone order, e-commerce businesses selling:
Vitamins, nutritional supplements, diet programs
Water purification
Computer hardware and software
Personal counseling or horoscopes
Medical equipment
Electronics
Sporting equipment
Pharmacy
Multi-level marketing
Telemarketing
Travel agencies
Airlines and cruise lines
Elective medical services
Insurance sales or brokers
Ineligible Merchants. These can be placed into Category C on a case by case
basis.
Business trusts
Any applicant who provides false or misleading application information
Any merchant or site that provides Internet gambling or is linked to
such activities
Any business that accepts credit cards at locations outside of the
United States and its territories (except airlines and cruise lines)
Any business specifically excluded by Visa(R) USA or MasterCard(R)
International rules and regulations
1
Exhibit B
To Master Referral Agreement
Between Bank of America, N.A. and National City Corporation
Dated July 12, 2004
1. REFERRAL INCENTIVE FEE. BUYER shall pay to NCC the Referral Incentive Fee on
or before the 20th calendar day of each month based upon the number of Approved
Applications for the preceding calendar month. The "REFERRAL INCENTIVE FEE" is
the fee generated each month per Approved Application as more fully described
below. "APPROVED APPLICATION" is defined as a Merchant Agreement executed
between a Merchant and BUYER. NCC agrees to pay each Bank its appropriate share,
as determined solely by NCC, of the Referral Incentive Fee based on the
Information provided by BUYER. "INFORMATION" is defined as each Bank's monthly
Bankcard Transaction Sales Volume and each Bank's monthly number of Approved
Applications. BUYER will provide each Bank's Information to NCC on a monthly
basis before the 20th calendar day of each month.
The Referral Incentive Fee will be paid according to the tiers set forth
below and is not cumulative. By way of example, in the event the Banks'
aggregate Approved Applications for a calendar month is 800, the amount of the
Referral Incentive Fee will be $19,500 and paid by BUYER to NCC on the 20th day
of the subsequent calendar month.
NUMBER OF APPROVED APPLICATIONS EACH MONTHLY REFERRAL INCENTIVE FEE PER
CALENDAR MONTH APPROVED APPLICATION
-------------- --------------------
The first 450 $ 0
The next 300 $55
The next 250 $60
The next 250 $65
The next 250 $70
The next 250 $75
The next 250 $80
Any additional $85
2. STANDARD SPREAD AND REDUCED SPREAD. BUYER shall pay to NCC the Standard
Spread or the Reduced Spread on or before the 20th calendar day of each month.
"STANDARD SPREAD" is defined as the fee BUYER will pay to NCC, as more fully
described below, which is equal to the percentage of the Spread when NCC reaches
or exceeds the Minimum Threshold for different Bankcard Transaction Sales
Volume. "SPREAD" means the total recurring fees received from a Merchant,
including, but not limited to, additional card transaction processing fees, EBT
processing fees, electronic check processing fees and prepaid card processing
fees, but excluding interchange, equipment fees, assessments and any other
non-recurring fees. For each month, the "MINIMUM THRESHOLD" will be deemed to
have been met if (i) there are 400 Approved Applications in such calendar month
from Banks that are subject to a Marketing Agreement, and (ii) the average of
Approved Applications in the immediately preceding four-months is equal to
1
or greater than 450. For purposes of subsection (ii) of the definition of
Minimum Threshold, during the first four (4) months following the Effective
Time, Approved Applications shall include any Merchant Agreement referred by NCC
and executed between a Merchant and National Processing Company, LLC or any of
its subsidiaries during the immediately preceding four (4) month period
including any applicable months prior to the Effective Time. "REDUCED SPREAD" is
defined as the fee BUYER will pay to NCC, as more fully described below, which
is equal to the percentage of the Spread, as set forth below, when NCC does not
meet the Minimum Threshold for different Bankcard Transaction Sales Volume. The
Standard Spread and the Reduced Spread are mutually exclusive, not cumulative
and are paid according to the tiers set forth below.
BUYER will pay to NCC either a Standard Spread or a Reduced Spread calculated
using the aggregate Bankcard Transaction Sales Volume of Merchants referred by
all Banks to BUYER during the immediately preceding twelve-month period.
Notwithstanding the foregoing, for Banks that enter into this Marketing
Agreement as of the Effective Time or during the twelve (12) month period
following the Effective Time, the calculation during the first twelve (12)
months of this Agreement will use the aggregate number of Bankcard Transaction
Sales Volume of merchants referred by all Banks to National Processing Company,
LLC and any of its subsidiaries during the preceding twelve (12) months prior to
the Effective Time. NCC agrees to pay each Bank its appropriate share, as
determined solely by NCC, of the Standard Spread or Reduced Spread, as
applicable, based on the Information provided by BUYER. BUYER will provide each
Bank's Bankcard Transaction Sales Volume to NCC on a monthly basis before the
20th calendar day of each month.
"BANKCARD TRANSACTION SALES VOLUME" means the dollar amount of Bankcard Sales
Records less returns, refunds or exchanges that are received from Merchants and
processed by BUYER during a calendar month.
"BANKCARD SALES RECORDS" means all documents used to evidence the sale of goods
or services or both through the use of Bankcards.
"BANKCARD" means a valid credit card or debit card issued by a member of either
Interchange System (as such term is defined in the Marketing Agreement) and
bearing its respective trade names, trademarks and/or trade symbols.
Bankcard Transaction Sales Volume in Billions
Greater than Less than or = Standard Spread Reduced Spread
$ 0 $2.5 10% of Spread 8.0% of Spread
$2.5 $4.0 12% of Spread 9.6% of Spread
$4.0 + 15% of Spread 12.0% of Spread
3. TERMINATION FEE. NCC shall pay BUYER the applicable "TERMINATION FEE" set
forth below in accordance with the terms of the Agreement. "YEAR" is defined as
the twelve consecutive month period beginning at the Effective Time of this
Agreement.
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Year 1 $200 Million
Year 2 $160 Million
Year 3 $140 Million
Year 4 $115 Million
Year 5 $110 Million
Year 6 $100 Million
Year 7 $ 80 Million
Year 8 $ 60 Million
Year 9 $ 40 Million
Year 10 $ 20 Million
4. The Standard Spread and Reduced Spread shall be payable on the entire
portfolio of all Merchants (as defined in the Marketing Agreement) referred
pursuant to each Marketing Agreement for so long as any such Merchant continues
to process merchant sales through BUYER.
5. On a case-by-case basis, BUYER and any Bank, with NCC's prior written
approval, a copy of which shall be provided to BUYER, may negotiate a lower
Standard Spread for a Merchant in order to obtain a lower processing fee for a
particular Merchant.
6. During the fifth (5th) Year of the initial term of this Agreement, BUYER or
NCC may initiate a benchmarking review (a "BENCHMARKING REVIEW") of the
competitiveness of the Referral Incentive Fee, the Standard Spread and the
Reduced Spread to determine what changes, if any, are necessary to continue or
to restore the competitiveness of such fees. Such Benchmarking Review will cover
all aspects of such fees, including, but not limited to, such topics as volume,
minimums, services, regions and types of merchants. A senior manager from each
of BUYER and NCC shall design and oversee the Benchmarking Review and, if they
are unable to agree upon the fees to continue or to restore such competitiveness
by the end of the sixth (6th) month of the fifth (5th) Year of the term of this
Agreement, they shall (i) select an independent consultant who is an expert in
credit card processing to perform the Benchmarking Review, (ii) agree on
specific instructions to be provided to such consultant, (iii) provide the
consultant with a list of established providers of credit card transaction
processing services that represent appropriate points of comparison with the
services provided by BUYER under this Agreement, and (iv) determine the
estimated maximum cost of the Benchmarking Review. BUYER and NCC shall each pay
fifty percent (50%) of the third-party costs of the Benchmarking Review
(including without limitation, the fees and expenses of the consultant). Upon
acceptance of the findings of the Benchmarking Review by the senior manager of
each of BUYER and NCC, the findings of the Benchmarking Review shall be applied
prospectively to the remainder of the term of the Agreement. If the senior
managers of each of BUYER and NCC fail to agree upon the findings of the
Benchmarking Review, such dispute will be resolved as provided in Section 14 of
the Agreement.
7. If NCC disputes the accuracy of the Information provided by BUYER to NCC, the
parties will follow the dispute resolution procedure set forth in Section 13 of
the Agreement.
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