EXHIBIT 10.4
COMDATA PAYMENT SERVICES
FUNDS DISTRIBUTION AGREEMENT
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THIS AGREEMENT, dated as of the 9th day of July, 1999 (the "Agreement"), is
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made and entered into by and between COMDATA NETWORK, INC., d/b/a COMDATA
CORPORATION(R), a Maryland corporation ("Comdata"), and Pinnacle Business
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Management. Inc. (the "Client").
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W I T N E S S E T H:
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WHEREAS, Comdata, through its Payment Services Business Unit, has
developed, offers and operates a funds distribution service, known as Express
Cash, as described more fully herein (the "Service"), which may be used by
companies, like the Client, to distribute funds to persons entitled to such
funds, including distribution of wages or salaries, expense reimbursement funds
or distribution of other funds as may be identified by the Client and accepted
by Comdata;
WHEREAS, companies, such as the Client, using Comdata's Express Cash funds
distribution service will distribute Comdata's proprietary Comchek(R) card
(individually, a "Card") to certain of its employees or other persons identified
by the Client as being entitled to any such funds (individually, a "Cardholder")
and Comdata, in accordance with instructions received from the Client, will load
the appropriate amount of funds to each individual Card which funds may then be
accessed or used by such Cardholder through designated automated teller machines
(individually, an "ATM"), at merchants participating in certain point-of-sale
debit network(s), by the issuance of a Comchek(R) draft or other methods
approved by Comdata and/or the Client; and
WHEREAS, the Client desires to subscribe to the Service and Comdata desires
to make the Service available to the Client and those Cardholders identified
from time to time by the Client, in accordance with and subject to the terms and
conditions of this Agreement;
NOW, THEREFORE, for and in consideration of the mutual covenants and
premises set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Client and Comdata
hereby agree as follows:
1. Statement of Service. (a) Subject to the terms and conditions
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hereof, Comdata shall make the Service available to the Client and those
Cardholders identified to Comdata by the Client pursuant to which the Client may
periodically transfer funds owed or otherwise due to such Cardholders by loading
such funds to a Cardholder's Comchek(R) Card. Thereafter, each such Cardholder
may access or use the funds available on his or her individual Card through
designated ATMs, at merchants participating in certain point-of-sale debit
networks, by the issuance of a Comchek(R) draft or other methods or services
approved by Comdata and/or the Client and selected by each such Cardholder.
(b) The Client agrees to transfer, in immediately available funds, the
aggregate amount of funds to be loaded onto Cards to Comdata's designated bank
account in accordance with the terms set forth on Exhibit B in order to make
such funds available for access or use by each Cardholder designated by the
Client. Each such transfer of funds by the Client shall be accompanied by
information, in form and substance determined by Comdata (which may include
electronic file(s) or data feeds), identifying each such Cardholder to receive
access to such funds and the amount of funds to be allocated to each such
Cardholder. Failure of the Client to timely transfer such funds to Comdata as
set forth in Exhibit B or provide any such information required by Comdata to
effect the Service may cause the Service to be unavailable to Cardholders
designated by the Client at such time(s) otherwise requested.
(c) The Client acknowledges and agrees that funds transferred to
Comdata in connection with the Service will, in turn, be deposited and held in a
non-interest bearing trust account (as to the Client and Cardholders) located at
First American National Bank, Nashville, Tennessee, or such other bank or
financial institution designated from time to time by Comdata (the "Bank"), as
trustee, pursuant to a trust agreement existing between Comdata and the Bank for
the benefit of each Cardholder. Comdata and/or the Bank will cause funds
transfers to be made from funds assigned to each Cardholder in the Comdata
account or trust account, as applicable and appropriate, in accordance with
instructions received from each Cardholder by use of the Card (e.g., withdrawal
instructions received from the use of the Card at an ATM or purchase
instructions received from a point-of-sale network). Comdata and/or the Bank, as
applicable, is requested and authorized to make such funds transfers from each
such Cardholder's funds in accordance with any such instructions and to pay the
principal amount of any such transactions, including any fees associated
therewith, to the appropriate party or parties.
(d) The Client is responsible for causing each such Cardholder desiring
to utilize the Service to become familiar with the terms and conditions for use
of the Service as set forth in Exhibit A. attached hereto and fully incorporated
herein by this reference (the "Cardholder Agreement"). Among other provisions,
the Cardholder Agreement is the Cardholder's express consent to, and
authorization for, the Client to pay wages or other amounts otherwise due to any
such Cardholder from the Client through the Service and in the manner
established by the Service as the same may exist from time to time.
(e) The Client acknowledges and agrees that the Service is a funds
distribution service only. In the event that the Service is utilized by the
Client for distribution of wages or payroll funds due to its employees, the
Client acknowledges and agrees that the Client is solely responsible for
compliance with all applicable federal, state and local laws, rules and
regulations relating to payroll, compensation and employment matters, including,
without limitation, as applicable (i) proper withholding, and timely remittance
of, any and all taxes related thereto (e.g., local, state and federal income,
payroll or social security taxes) and (ii) delivery of pay stubs and similar
payroll information to Cardholder employees (e.g., deduction(s) made from any
payroll payment).
2. Cards. Comdata shall furnish Cards to the Client for distribution
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to, and use by, Cardholders designated by the Client who desire to utilize the
Service.
3. Fees. Current fees for use of the Service by the Client and
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Cardholders are set forth in Exhibit B, attached hereto and fully incorporated
herein by this reference. The Client agrees to promptly pay any amounts due from
it to Comdata in accordance with the terms of this Agreement, including Exhibit
B. Failure to make any such payments in accordance with this Agreement shall be
deemed a breach of this Agreement, in which case Comdata may immediately
terminate this Agreement. Any payments made by check shall not be deemed to have
been made until such check is honored upon presentment for payment at the
Client's bank. Comdata may change the fees set forth in Exhibit B upon thirty
(30) days prior written notice to the Client.
4. Security. If requested by Comdata, the Client shall provide Comdata
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with security for the performance when due of its obligations set forth herein.
Comdata may suspend the Service until such time as any such security is received
by Comdata in form and substance acceptable to Comdata in its discretion and as
may further be set forth on Exhibit B.
5, Responsibility for Cards, Security Information, Etc. The Client accepts
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full responsibility for the use of all Cards, passwords, personal identification
numbers (individually, a "PIN") or other security codes and procedures while any
such Cards or information are in the possession and control of the Client. The
Client shall notify Comdata immediately by telephone of any lost, misplaced or
stolen Cards, PINs, passwords or other security codes and procedures and shall
be fully responsible for the unauthorized or fraudulent use thereof until such
time as Comdata has received such notification from the Client, provided that
any such misuse is not attributable to an error, act or omission of Comdata.
6. Term and Termination. The term of this Agreement shall commence as
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of the date first set forth above and shall continue thereafter until the second
(2nd) anniversary of such date. Thereafter, this Agreement shall automatically
renew for consecutive, successive terms of one (1) year each, unless and until
one party hereto provides the other party hereto written notice of non-renewal
ninety (90) days prior to the end of the then existing term. Notwithstanding the
foregoing or any other provision herein to the contrary. Comdata shall have the
right to immediately terminate this Agreement by oral or written notice if the
Client should (a) fail to make any payment(s) due hereunder; (b) fail to
maintain a satisfactory credit relationship with Comdata; or (c) fail to perform
any other obligation required to be performed by the Client pursuant to this
Agreement. The Client's obligation to pay for the Service, and any transaction
or other fees associated therewith, which are incurred before the effective date
of termination of this Agreement shall survive such termination, and the
Client's obligation to pay late charges hereunder shall survive such termination
regardless of whether such late charges were incurred before the effective date
of termination.
7. Disputed Matters. The Client must notify Comdata of any dispute
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relating to any invoice, billing or similar matter within sixty (60) days from
the date of any such invoice, billing or similar matter or the billing item
shall be deemed undisputed and accepted by the Client.
8. Transaction Data. The Client acknowledges and agrees that all
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transaction information, including, without limitation, Card numbers, Client's
rates and fees and data gathered at the point-of-sale by Comdata, whether
electronically or by voice, is the property of Comdata. The Client shall be
entitled to use any such information only for its internal business purposes and
shall not divulge the same to any other person, firm or corporation without the
prior written consent of Comdata.
9. Warranties; Limitation of Liability. COMDATA MAKES NO WARRANTIES,
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WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO ANY SERVICES, PRODUCTS OR EQUIPMENT
PROVIDED HEREUNDER. INCLUDING. WITHOUT LIMITATION. ANY WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. COMDATA'S SOLE
RESPONSIBILITY TO THE CLIENT AND THE CARDHOLDERS SHALL BE TO MAKE THE SERVICE
AVAILABLE IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT. IN NO EVENT SHALL
COMDATA BE LIABLE TO THE CLIENT, ANY CARDHOLDER OR ANY OTHER FIRM OR PERSON FOR
CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES, EVEN IF COMDATA HAD
PRIOR KNOWLEDGE OF THE POSSIBILITY OF SAME.
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10. Equipment Usage Limitations. In the event that Comdata furnishes
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any equipment or supplies to the Client hereunder, the Client shall use any such
equipment or supplies solely in connection with the Service and shall allow no
other parties to utilize such equipment or supplies without prior written
authorization from Comdata.
11. Indemnification. (a) Each party hereto shall indemnify and hold the
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other party hereto, its directors. officers, agents, employees, contractors and
representatives harmless from and against all claims, liabilities, causes of
action, demands and expenses (including attorneys' fees, court costs and
disbursements) by reason of, based upon, relating to or arising out of, a breach
of any of the covenants, agreements, representations or warranties contained in
this Agreement, or attributable to the negligent or willful errors, acts or
omissions of such indemnifying party, its agents, officers, employees or
representatives. The party to be indemnified hereunder shall promptly notify the
indemnifying party of any claim, demand, suit or proceeding with respect to
which it seeks indemnification and the indemnifying party shall at all times
have the right to defend, settle or compromise such claim, demand, suit or
proceeding with counsel of its own choosing and in such manner as it may deem
advisable.
(b) Without limiting the generality of Section 11(a) above, the Client
agrees to indemnify and hold Comdata (and its affiliates) harmless from any and
all liabilities (including interest and penalties) which are or may be imposed
on Comdata (or any of its affiliates) pursuant to wage, payroll, compensation or
other employment laws, including, without limitation, Section 3505 of the
Internal Revenue Code of 1986, as amended (or any successor provision thereto or
any comparable provision of any state, local or foreign tax law) or otherwise in
respect of any and all federal, state, local and foreign taxes required to be
deducted and withheld from the wages or other compensation of the employees of
the Client (or any of its affiliates). The Client's obligations under this
Section 11(b) shall survive the termination or expiration of this Agreement.
regardless of whether any such liabilities arise before or after the effective
date of any such termination or expiration.
12. Force Majeure. Neither party hereto shall be liable for any failure
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to perform due to acts of God, acts of government or ATM, point-of-sale or other
debit card regulatory bodies which significantly inhibit or prohibit the Service
contemplated hereby, wars, fires, floods, explosions, natural catastrophes,
civil disturbances, strikes, riots, unusually severe weather (such as
tornadoes), or failures or fluctuations in electrical power, heat, light, air
conditioning, computer, or telecommunications services or equipment ("Force
Majeure"). In such event, the performance of such party's obligations shall be
suspended during the period of existence of such cause and the period reasonably
required thereafter to resume the performance of the obligation. The parties
shall use their best reasonable efforts to minimize the consequences of Force
Majeure.
13. Certain Further Assurances; Certain Information. (a) Upon request,
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the Client agrees to promptly complete and deliver such further documents as
necessary or appropriate and as Comdata may reasonably request related to
providing the Service. In the event that such further document(s) is not
promptly received, Comdata may thereafter terminate this Agreement.
(b) The Client shall, if requested, provide Comdata with written
certification (signed by an appropriate officer of the Client) from time to time
to the effect that the Client is in full compliance with its obligations under
all federal, state, local and foreign tax laws relating to withholding and
payment of payroll taxes with respect to its employees (and the employees of its
affiliates), as well as such other information relating to payroll taxes of the
Client (and its affiliates) as may be requested by Comdata. In addition, the
Client shall provide Comdata with its financial statements to the extent
requested by Comdata from time to time.
14. Notice of Breach; Right to Cure. In the event of a breach of, or
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default under, this Agreement by either party, the non-defaulting party shall
provide the defaulting party with written notice of the nature of the breach or
default. Unless otherwise provided to the contrary herein, the defaulting party
shall have thirty (30) days from the date of any such notice to cure such breach
or default. In the event any such breach or default is not cured or waived
within such thirty (30) day period, the non-defaulting party may thereafter
terminate this Agreement upon fifteen (15) days prior written notice to the
defaulting party.
15. Confidentiality. Comdata and the Client agree and covenant to each
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other that they shall not, during the performance of this Agreement or at any
time after the termination or expiration hereof, use or disclose to any third
party other than during the proper performance of their duties hereunder, the
terms of this Agreement, or any of the procedures, practices or confidential
dealings of the other party hereto. The provisions of this Section shall not
apply to disclosures required by law.
16. Notices. All notices called for herein shall be given in writing
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and sent by U.S. mail, by facsimile, by hand delivery or by overnight courier,
directed as follows: (a) if to Comdata to: Comdata Network. Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Attention: Senior Vice President and General
Manager, Payment Services Division: and (b) if to the Client to the address set
forth on Exhibit B.
17. Governing Law; Forum Selection. This Agreement shall be construed
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in accordance with the laws of the State of Tennessee. Any action to enforce or
interpret this Agreement shall be brought in the appropriate judicial forum in
▇▇▇▇▇▇▇▇▇▇ County. Tennessee (or the appropriate federal court for the Middle
District of Tennessee), and the parties hereby consent to such jurisdiction and
venue and waive any objections thereto.
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18. Attorneys' Fees. In the event any action or proceeding is brought
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to interpret or enforce this Agreement, the prevailing party in such action or
proceeding shall be entitled to recover its attorneys' fees (including costs and
expenses), in addition to any other relief to which it may be entitled.
19. Assignment. This Agreement shall be binding upon the parties and
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their respective successors and assigns. The Client may not transfer or assign
this Agreement without the prior written consent of Comdata.
20. Waiver. Failure to insist upon strict compliance with any of the
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terms or conditions of this Agreement shall not be deemed a waiver of such term
or condition, nor shall any waiver or relinquishment of any right or power
hereunder at any time or times be deemed a subsequent waiver or relinquishment o
such right or power.
21. Original; Facsimile Copy. The Client shall return the originally
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executed copy of this Agreement to Comdata as soon as possible. Notwithstanding
the foregoing, the Client and Comdata acknowledge and agree that an executed
facsimile copy of this Agreement is sufficient to evidence this Agreement and
the effectiveness hereof.
22. Entire Agreement, This Agreement constitutes the entire agreement
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between the parties with respect to the subject matter hereof, and supersedes
all prior or contemporaneous agreements and understandings regarding the subject
matter hereof, whether written or verbal. This Agreement may be modified or
amended only in writing signed by the parties hereto.
IN WITNESS WHEREOF, the Client and Comdata, through their respective duly
authorized and acting representatives, have executed and delivered this
Agreement to be effective as of the date first set forth above.
COMDATA NETWORK, INC. Pinnacle Business Management. Inc.
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d/b/a COMDATA CORPORATION(R) Printed or Typed Name of the Client
By: /s/ ▇▇▇▇▇ Monord By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: VP of Credit Title: Vice President
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