DEBIT CARD SPONSORSHIP AGREEMENT
EXHIBIT
10.1
This
Debit Card Sponsorship Agreement (“Agreement”), dated as of February 1, 2006, is
by and between Ready
Credit Corporation,
(“Company”), a Nevada corporation located at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and Palm
Desert National Bank
(“Bank”), a national bank located at ▇▇-▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇.
RECITALS
WHEREAS,
Company
has developed and
is
the sole owner of a stored value debit card program (“the Program”);
that
incorporates the use of
a self
service kiosk to dispense instant issue stored value prepaid debit cards
as
approved by the network, and also offers personalized stored value prepaid
debit
cards, including upgrade of initial issuance stored value prepaid debit cardsby
means including the Web, telephone and mail.
WHEREAS,
Bank is
a member of various Networks for the purposes of issuing prepaid or stored
value
debit cards; and
WHEREAS,
Bank is
willing to provide and the rights and privileges that follow from sponsorship
to
Company for the purposes of issuing the Company’s stored value debit card.
NOW,
THEREFORE,
in
consideration of the premises and mutual covenants set forth herein, and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Company and Bank, intending to be legally bound, hereby agree
as
follows:
AGREEMENT
ARTICLE
I
- DEFINITIONS
SECTION
1 - Definitions
Except
as
otherwise specifically indicated, the following terms shall have the following
meanings in this Agreement (such meanings to be equally applicable to both
the
singular and plural forms of the terms defined):
ACH
means
the Automated Clearinghouse network, governed by the rules of the National
Automated Clearinghouse Association (“NACHA”).
BIN
means
Bank Identification Number and is a number assigned to Bank by
System.
Business
Plan
means
the document attached as Exhibit
Card
Product or Card
means
the various debit cards issued within the Program as the Company shall request
and Bank shall approve now and in the future, pursuant to the Operating Rules
of
the Networks.
Card
Account Income
means
all revenue received from a Cardholder as disclosed in the Cardholder Agreement
and other fees as specified from time to time.
Cardholder
means
the person who is issued or accepts a Card pursuant to the Program.
Cardholder
Agreement
means
the agreement between the Bank and Cardholder governing the terms and use of
a
Card which shall be executed by Bank and Cardholder prior to the issuance of
a
Card by Bank and/or prior to Company’s request that a Card be issued to any such
Cardholder
Graphic
Standards
mean all
standards, policies, and other requirements adopted by a System from time to
time with respect to use of its Marks.
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1
Issuer
means a
Member Bank that issues Cards.
Item
means a
transaction that is processed between between parties through the System and
its
members or through the Processor, the Bank and the Company, including purchases,
cash withdrawals, disputes and refunds.
▇▇▇▇
means
the service marks, trademarks and copyrights of a System and Bank, including
but
not limited to, the names and other distinctive marks or logos, which identify
a
System, and Bank.
Membership
means
the membership in a System and licensing rights thereto obtained by
Bank.
Operating
Rules
means
the operating rules and regulations adopted and written by the System, NACHA,
as
the case may be, as the same may from time to time be amended, modified, or
supplemented.
Processing
Services
means
those services, which are reasonably required or necessary to Issue a Card
and/or process a transaction in accordance with the Rules of a System. Such
services shall include but not be limited to: account set-up and maintenance,
chargeback processing and compliance, Card design, Card production, Card
issuance, transaction processing, Settlement, System access, Cardholder dispute
resolution, customer service, System compliance, regulatory compliance, security
and fraud control, collections, and activity reporting.
Processor
means
the third party whom Company may retain to perform Processing Services under
this Agreement.
Program
means the total concept of the Company’sproject inclusive of Buisness Plan,
whereby
Cardholders will be issued cards for payroll or other funds distribution and
which is subject to this Agreement and the business contemplated
hereunder.
Program
Materials
means
all materials and methods of marketing used by Company in connection with this
agreement, including without limitation, advertisements, brochures, telephone
scripts, applications, Cardholder Agreements, and similar
materials.
Program
Revenues
mean all
Interchange Fee and other Fees and revenues generated by or accruing under
a
Card marketed and governed by this Agreement.
Regulatory
Authority
means,
as the context requires and as they may have jurisdiction over one or more
parties to this Agreement, any System; any state Department of Financial
Institutions, the Federal Deposit Insurance Corporation; The Office of the
Comptroller of the Currency; the Office of Thrift Supervision, the Federal
Reserve Board, and any federal or state agency having jurisdiction over the
Bank, Company, Merchants or Cardholders.
Rules
mean the
by-laws ,
operating rules and regulations adopted by any System or the National Automated
Clearing House Association, Bank’s procedures and standards, applicable federal
and state laws, and any regulations and guidance from any Regulatory Authority,
as the same may from time to time be amended, modified, or
supplemented.
Settlement
means
the movement of funds between the Bank, Processor and System in accordance
to
the Bank’s policies and procedures and System Rules and subject to the terms of
this Agreement.
System
means,
at Bank’s sole discretion, Visa, Pulse, Star, and
any
other Card network authorization, routing, processing or funds transfer
system
for transmitting Items and Settlement thereof.
ARTICLE
2 - DUTIES OF COMPANY
| SECTION 2.1 |
Marketing
|
Company
shall, from time to time
as
determined in Company’s discretion and/or commercial reasonable efforts in
accordance with Network Rules,
promote
and market
a Card
Product to their
customers. Company is solely responsible for all costs and expenses associated
with marketing of any Card or Program under this Agreement. Company
shall obtain Bank’s prior written approval for any marketing materials bearing
Bank's name or any System ▇▇▇▇ or name before distribution or broadcast of
such
materials and Company shall ensure that all marketing materials comply with
the
Rules.
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| SECTION 2.2 |
Scope
of Agreement
|
Company
agrees that the scope of this Agreement shall be limited to the Program as
that
term is defined provided
by the Company with the Application. Bank’s obligation to provide to
Company
any
services, sponsorship or otherwise, outside the scope of the Program and/or
other than as required by this Agreement must be agreed to in writing executed
by both Company and Bank. Company may receive any such services outside the
scope of this Agreement from any third party if its receipt of such services
does not interfere and/or limit Bank’s ability or right to provide the services
provided for in this Agreement.
| SECTION 2.3 |
Additional
Offerings
|
(a) Company
may develop materials and/or product offerings or may send additional
solicitations to Cardholders ("Additional Offerings") without Bank’s approval
provided that such Additional Offerings do not include Bank’s name or any System
▇▇▇▇. Additional Offerings which utilize Bank’s name or any System ▇▇▇▇ shall
require Bank’s prior written approval, which approval shall not be unreasonably
withheld. Company shall supply to Bank in writing all details, terms and
conditions of any proposed Additional Offerings which contain Bank’s name or any
System ▇▇▇▇ before the distribution of such Additional Offerings, and Bank
shall
have the right to and must approve any such Additional Offering before its
distribution.
(b) All
income and expense for materials, product offerings, or Additional Offerings
will be the income and expense of the Company.
| SECTION 2.4 |
Printing
of Cards and Cardholder
Agreements
|
All
Cards
and Cardholder Agreements shall identify the Bank as the Issuer and include
any
such names or Marks as may be required to conform to Graphic Standards and
Rules
or other laws and Regulations. Prior to the issuance of any such materials,
the
Bank must approve in advance in writing any such materials, including but
not
limited to the Cards and the Cardholder Agreements, Applications and Statements
which shall be developed by solely and exclusively by the
Company.
| SECTION 2.5 |
Program
Pricing
|
(a) Company
shall be solely responsible for ensuring that all charges and fees to be paid
by
applicants to become Cardholders shall be those charges that comply with all
applicable State and Federal laws, Rules and Regulations. All charges and fees
assessed by Company shall be given by Company to Bank in advance and Bank shall
have the option, but no obligation, to prohibit or limit such charges and fees
if such fees violate an applicable State or Federal Law, Rule, or Regulation.
In
accordance with Network rules and regulations, and applicable state and federal
laws, Bank shall notify Company as soon as possible for any suspected, alledged
or noticed compliance issues. The
charges and fees paid by Cardholders shall be disclosed in the Cardholder
Agreement and Applications given to the Cardholder by Company and Bank at the
time the account is opened and when the Card is received.
(b) Company
may modify pricing by giving written notice of the proposed modification
or
addition to the Bank. Company acknowledges and agrees that it shall be solely
responsible for ensuring that any such modification or addition complies
with
the Operating Rules and the Rules and Regulations, which govern Cards and/or
Demand
Deposit Accounts.
Bank
shall have the option, but not the obligation, to object to a pricing
modification if such modification violates an applicable State or Federal
Law,
Rule, or Regulation.
| SECTION 2.6 |
Establishment
of Cardholder Accounts
|
Company
shall be responsible for accepting and processing Cardholder applications
in
accordance with the Rules and based on criteria, terms, and conditions used
by
Company that shall at all times comply with the Rules. The Company, when
requested by the Bank, will provide reports indicating compliance with the
established criteria.
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| SECTION 2.7 |
Third
Party Services
|
Company
shall perform or cause to be performed Processing Services for the Program
and
related activities. Company shall cause all such Processing Services to be
performed in accordance with the Operating Rules. Company may employ or contract
for such services with third parties. In such an event, Company shall obtain
a
signed Confidentiality Agreement containing confidentiality provisions
comparable to those contained in this Agreement from all such third parties,
which shall be applicable to the third parties and their directors, officers,
employees or agents. Company shall obtain Bank's prior written approval,
which
shall not be unreasonably withheld
before
retaining any third party to provide services for the benefit of or in
connection with the Program as directly related to Bank issuance of cards.
The
Bank’s approval of any third party shall not in any way relieve the Company of
its duties and obligations under this Agreement, nor shall such approval
constitute a representation or warranty by the Bank that the services to be
performed or products to be furnished by a third party will be performed as
agreed or represented.
| SECTION 2.8 |
Deposit
and Reserve Accounts
|
A
non-interest bearing
account
designated “Deposit Account” (“Deposit Account”) shall be established by the
Company and controlled by Bank as a custodial account for the total of all
Cardholder accounts.
(a)
On
each
business day during the term of this Agreement, the applicable System will
debit
or credit the Deposit Account for the net funds required for Settlement with
System for purchases and ATM withdrawals made by Cardholders offset by the
(i)
funds received from System for merchandise returned by Cardholders; and (ii)
any
other credits received from System that are due to Cardholder on such business
day.
(b)
On
each
business day during the term of this Agreement, Company shall credit the Deposit
Account for the following items: (i) funds received from Company for deposit
to
the Cardholder’s Card account by 3:00 p.m. Central time the previous day; and
(ii) any other credits due to Cardholder and payable by Company.
(c)
Company
represents and warrants that the Deposit Account will be at all times funded
by
Company in an amount that is no less than 100% of the total amount of the
current day’s balances of Cardholder Accounts, subject to the Company’s next
business day crediting of the Deposit Account for deposits to Cardholders’ Card
account. The Company, without prior written approval from the Bank, shall not
withdraw funds from the Deposit Account, provided that, upon termination of
this
Agreement, Bank shall return any remaining funds in the Deposit Account in
accordance with the terms of this Agreement.
(d)
A
non-interest
bearing
account designated “Reserve Account” shall be established by the Company and
controlled by Bank as an account for potential losses for overlimits, fraud,
and
losses due to disputes or embezzlement. Account shall be funded based on a
rolling monthly amount of total of previous months overlimits, fraud, and losses
due to disputes or embezzlement.
(e)
Company
shall, on a daily basis, cause to be provided to Bank a written report which
report shall show the total of funds and/or credits due from Company to
Cardholders, the previous day’s balance of Cardholder Accounts and the current
day’s balances of Cardholder Accounts. Such written report shall also contain
any other information reasonably requested by Bank from time to time that
Company can readily produce.
| SECTION 2.9 |
Customer
Service Standards
|
Company
shall develop and be responsible for customer
service
standards for servicing that are designed to promote customer satisfaction
and
to promote the preservation and growth of the customer base.
Bank
may,
but shall not be required to monitor or at any time audit or otherwise review
compliance with standards to ensure required levels be maintained. The Bank
may
request additional reasonable
customer
service standards; if the Bank receives any guidance, complaints or comments
from any Regulatory Authority or System or is required to do so by any Operating
Rules or Rules, the Company will have thirty (30) days to comply or
initiate reasonable steps to effectuate such compliance
with a
written request from the Bank.
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| SECTION 2.10 |
Access
to Program Documents and
Information
|
Bank
shall at all times have reasonable access to all information and documents
it
requires to comply, as applicable, with all applicable laws, Regulations,
Operating Rules and Rules concerning the Program which the Company may acquire
or which may be in the control and possession of Company, including but not
limited to information and documents in the possession of any third party
providing Processing Services or otherwise performing any of Company’s
obligations hereunder, which information and documents include but are not
limited to applications for Cards, information concerning Program revenues,
information concerning transactions and agreements affecting the management
and
administration of the Program.
Company
shall provide Bank with copies of any and all of the following documents and
information, to the extent same exist: applications; advertisements;
disclosures; terms and conditions; Company’s policies and procedures promulgated
in connection with this Agreement; and any other documentation, processing
information or customer service information which the Bank may reasonably
request (hereinafter referred to as “Documentation and Processing”). If Bank, in
its sole discretion, determines that such Documentation and Processing fails
to
comply with any law, Regulations or guidance of a Regulatory Authority then
Bank
may request appropriate changes be made to such Documentation and Processing,
and Company will use its best efforts to accomplish such changes as soon as
practicable in good faith in accordance with Bank and Regulator
standards,
and Bank
determines in good faith that it has a legal or regulatory risk, such risk
to be
provided in writing to Company, then Bank may terminate this Agreement upon
thirty (30) days written notice, without penalty.
| SECTION 2.11 |
Sponsorship
Certification and Administrative
Fees
|
Bank
shall complete all registration requirements as required by each applicable
System or Network of which the Bank has agreed to become a member after
obtaining from Company any corresponding agreements and/or commitments in
writing from Company and/or entity(ies) providing Processing Services or any
other service in connection with the Program. Company shall pay all applicable
fees and expenses of each applicable System as imposed on Bank because of its
sponsorship or registration of Company, and as required to maintain the Program.
Company
and Bank shall use reasonable commercial efforts to deliver to the other, within
thirty (30) business days of receipt, a copy of all notices or correspondence
(other than confidential information it receives from any System relating
specifically to the Program. Company acknowledges and agrees that it is
responsible for any and all obligations and compliance related to the operations
of the Program which are imposed upon Bank whether by a System, Regulatory
Authority, or any Operating Rules and Rules and Company further agrees that
it
will take all steps necessary to ensure that its operations are in compliance
promptly after its receipt of notice thereof from Bank. Bank agrees that it
will
cooperate with Company to ensure such compliance.
| SECTION 2.12 |
Liability
of Company for System and Regulatory Claims.
|
Company
shall be liable to Bank for any and all liabilities and every loss, claim,
demand, and cause of action (including, without limitation the cost of
litigation and reasonable attorneys' fees) suffered or incurred by Bank as
a
result of or arising out of the Company’s failure to comply with any provision
of this Agreement, the Operating Rules, Rules, applicable laws or Regulations
except to the extent such non-compliance is as a result of Bank’s wrongful acts
or omissions, provided that Bank provides Company with prompt notice of any
such
loss, claim, demand, or cause of action and permits Company the option to
defend
such claim or cause of action. Further, Bank may not settle any claim or
cause
of action for which it will seek indemnification from Company without Company’s
prior written approval.
Should
Bank be assessed any fees by any System or Regulatory Authority in connection
with this Agreement, Bank shall notify the Company of such amounts ten (10)
days
prior to the Bank settling these expenses by setting off, drafting or wire
transferring from one or more of the accounts for the amounts due except for
those amounts identified as the responsibility of the Bank.
| SECTION 2.13 |
Insurance
|
Company
acknowledges its obligation to obtain appropriate General Liability insurance
coverage equal to at least One Million Dollars ($1,000,000) for each
occurrence
and
Company will provide Bank with Certificates of Insurance evidencing proof of
such policies. Company’s policies shall contain an endorsement providing that
written notice shall be given to Bank at least thirty (30) days prior to
termination, cancellation or reduction of coverage in the policy. The policy
shall also include Bank and its directors, officers, employees and agents as
additional insureds with respect to the work or operations done in connection
with this Agreement. Coverage will include the processing provided by the
Company and/or any third parties Company chooses to process, maintain, emboss
or
distribute cards.
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|
SECTION
2.14
|
Reports
|
Company
will advise Bank of all Cardholder complaints or allegations of
erroneous or unauthorized transactions, to the extent Company has received
notice of such complaint or allegation, for each calendar month within ten
(10)
business days after the end of each calendar month. Company
will respond to Bank within ten (10) business days of notice from Bank with
respect to any complaint received by Bank from a Cardholder. Such advisement
shall in no way be deemed or interpreted to relieve Company or Bank of any
of
its respective responsibilities under this Agreement.
Company
will also provide to the Bank any other information requested by Bank as may
be
required, from time to time by regulatory authorities, to ensure that safe
and
sound business practices are being followed concerning processing, merchant
settlement and income to the Bank.
| SECTION 2.15 |
Contingency
Plans
|
Company
shall have a viable and tested contingency plan in effect and hereby warrants
that any third party performing any
of
its duties hereunder has represented to Company that it has a viable and tested
contingency plan in effect. The plan shall provide for short-term recovery
of
data for processing, reasonable security, confidentiality of customer data
and
reasonable period for full recovery in relation to the volume and importance
of
the application to the Company’s operations and duties under this
Agreement.
| SECTION 2.16 |
Error
Resolution
|
Company
agrees to resolve, in accordance with the applicable Rules and Operating
Rules
all alleged errors or unauthorized transactions with respect to any transactions
performed or attempted to be performed in accordance with or under this
Agreement. In particular, Company agrees, upon notification by Bank of a
complaint or allegation, to obtain any and all documentation or data required
to
resolve the matter, fully investigate the allegations, advise Bank of the
results of the investigation and provide an audit trail of information pertinent
to the matter, all within any required timeframes required by the Operating
Rules but in no event later than ten (10) business days after Bank has provided
Company with notice of the complaint or allegations..
| SECTION 2.17 |
Records
|
Company
agrees that it will keep, or require third parties to keep, current and accurate
records regarding transactions processed by the Company (or any third party
whom
Company retains) or for the Bank in accordance with System Rules, Operating
Rules, and specifications with respect to services performed pursuant to this
Agreement. Company agrees that, to the extent permitted by law, it will keep
and
disclose all documentation and statements required by any applicable laws,
Regulations, Operating Rules, and Rules.
| SECTION2.18 |
Security
|
Company
agrees that it will allow only authorized personnel to have access to any
systems available pursuant to this Agreement and will require personal and
workstation identification for all transactions it enters or processes.
It
further agrees to establish and comply with all security procedures and systems
needed to protect all confidential cardholder information and
cards.
| SECTION 2.19 |
Back-Up
of Data
|
To
the
extent Bank will depend upon any data communications systems provided by
Company, Merchant or Cardholder, the Company will require appropriate daily
back-up of such data, so that in the event the data communications systems
fails, Company or Bank or its designee, at the Bank’s discretion, will be able
to continue processing applications and transactions. Company will provide
Bank
with copies of such back-up plans upon Bank’s reasonable request.
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| SECTION 2.20 |
Independent
Processor
|
Company
has selected a system approved
or registered Card processor,
if such
registration is required, to process Card transactions and provide Processing
Services for the Program. Company shall pay for all processing costs for
accounts processed under this agreement. Company will not change the Processor
without advance written notification to Bank.
| SECTION 2.21 |
Account
Data
|
Company
shall provide to Bank any data and/or other information required to reconcile
accounts or substantiate information concerning deposits, returns, chargebacks,
fees, or amounts settled or as required by any Regulatory Authority.
Company
shall make such data and other information available to the Bank at the sole
cost and expense of the Company. Whenever an error or unauthorized transaction
is alleged to have occurred, Company shall use its best efforts to obtain all
documentation related to the transaction within ten (10) business days of
receiving a request for such information from the Bank.
ARTICLE
3 - BANK COMPENSATION
| SECTION 3.1 |
Compensation
to the Bank
|
For
its
services under this Agreement, Company shall compensate Bank for such services
in accordance with the provisions of Schedule B attached
hereto.
ARTICLE
4 - REPRESENTATIONS AND WARRANTIES OF THE COMPANY
| SECTION 4.1 |
The
Company represents and warrants to the Bank as
follows:
|
(a) This
Agreement is valid, binding, and enforceable against the Company in accordance
with its terms.
(b) The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Nevada
and is authorized to do business in each state in which the nature of the
Company's activities makes such authorization necessary.
(c) The
Company has the full power and authority to execute and deliver this Agreement
and to perform all its obligations under this Agreement. The provisions of
this
Agreement and the performance by the Company of its obligations under this
Agreement are not in conflict with the Company's Articles of Incorporation,
bylaws or any other agreement, contract, lease or obligation to which the
Company is a party or by which it is bound.
(d) Neither
the Company nor any principal of the Company has been subject to any of the
following:
|
(i)
|
Criminal
conviction (except minor traffic offenses and other ▇▇▇▇▇
offenses);
|
| (ii) |
Bankruptcy
filing or petition;
|
| (iii) |
Federal
or state tax lien;
|
|
(iv)
|
Administrative
or enforcement proceedings commenced by the Securities and Exchange
Commission, any state securities Regulatory Authority, Federal Trade
Commission, federal or state bank regulator, or any other state or
federal
regulatory agency; or
|
|
(v)
|
Restraining
order, decree, injunction, or judgment in any proceeding or lawsuit,
alleging fraud or deceptive practice on the part of the Company or
any
principal thereof.
|
(e) For
this
subparagraph, the word "principal" shall include any officer or director owning
ten percent (10%) or more of the Company, and any person actively participating
in the control of the Company's business.
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(f) The
Company will provide to the Bank the most recent audited financial statements.
Company agrees to provide audited financial statements on an annual basis,
as
soon as possible, and in any event within ninety (90) days after the end of
the
Company’s fiscal year, and interim quarterly financial statements if requested.
(g) Annual
Federal Tax Return will be sent to Bank within fourteen (14) days after filing
for Company and any principals ;
(h) As
soon
as possible, and in any event within ninety (90) days after the end of the
Company’s fiscal year it will provide the Bank with a copy of most recent Form
10-K filed with the U.S. Securities and Exchange Commission, if applicable.
(i) It
will
comply with the Operating Rules, Rules and any laws, Regulations, guidance,
orders or rules issued by the Regulatory Authorities that relate to the cards,
matters and transactions contemplated by this Agreement and shall cause all
third parties performing any of its respective obligations hereunder to comply
with all of the foregoing, as may be applicable.
(j) The
Company is familiar with and able to fully comply with (i) the Rules and
Operating Rules, as applicable; and (ii) the applicable federal laws and
Regulations and the laws and Regulations in the states in which the Company
does
or may do business, including, without limitation, those laws, Rules and
Regulations governing the Program and card services.
ARTICLE
5 - DUTIES OF BANK
| SECTION 5.1 |
Background
Investigation of Company
|
Bank
may
conduct, at its expense, reasonable investigation as it may from time to time
believe appropriate, and Company shall cooperate with Bank in connection
therewith. Company consents, on an ongoing basis, to Bank’s obtaining any
consumer credit report or other investigative documentation on Company, which
Bank deems relevant for any purpose, related to this Agreement.
| SECTION 5.2 |
Membership
in System
|
Bank
represents that it is a member of Visa U.S.A., Star, Pulse and other Systems
as
may be appropriate, and in good standing and will promptly notify Company in
writing of any changes to Bank’s standing with the aforementioned
organizations.
| SECTION 5.3 |
Notices
|
Bank
shall deliver to Company a copy of all notices or correspondence that it
receives from the System, or any other third party, relating specifically to
Bank's sponsorship of Company, within thirty (30) business days of receipt
of
such notice or correspondence unless legally or contractually prohibited from
doing so, or unless the information is of a confidential nature.
| SECTION 5.4 |
Settlement
|
Bank
will
settle funds with various Networks that Company and Bank have agreed to utilize
for acceptance of the card issued under this program.
ARTICLE
6 - EXPENSES
| SECTION 6.1 |
Expenses
of Bank
|
Bank
shall be solely responsible for the following expenses:
(a) Bank's
own internal costs and expenses incurred in connection with maintaining the
Deposit Account(s) and, except as may be otherwise agreed herein, its own
internal monitoring of the Program, including all legal expenses.
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8
(b) All
annual Membership fees relating to Bank's general licenses with and general
Membership in any System utilized by the Bank in connection with the Program,
and any fines and penalties, or portion thereof, assessed by any such System
or
any Regulatory Authority due to Bank's negligence, fraud or willful misconduct,
excluding any fines or penalties caused by Company or its officers, directors,
employees or agents.
(c) Such
other services and expenses that Bank may deem necessary or appropriate for
the
Program and which are not the obligation of Company hereunder.
| SECTION 6.2 |
Expenses
of Company
|
Company
shall be solely responsible for payment to Bank or on Bank’s behalf, to the
extent Bank incurs such charges, for expenses associated with the Program,
including but not limited to the following:
(a) All
fees,
penalties, assessments, expenses, etc. payable to any System for any current
or
future registration of Company, except to the extent such penalties or
assessments are due to the acts or omissions of Bank.
(b) All
System fees associated with BINs assigned to Bank for Company, including but
not
limited to transaction and volume fees, quarterly operating certificate or
quarterly Membership fees related to the Program or pursuant to any Agreement
between Bank and System.
(c) All
fines
and penalties assessed by any System or any Regulatory Authority (other than
Bank) due to Company’s actions or the actions of any third party retained by
Company.
(d) Any
losses sustained from any Card or Account for any reason, except to the extent
such loss was caused by Bank’s negligence or willful misconduct.
Company
also agrees that it is solely responsible for the following expenses that
Company will incur:
(e) Advertising
and other expenses associated with the marketing incurred by Company, any party
under its control or any party for which it is providing services, not including
Bank.
(f) All
expenses associated with establishing and maintaining any accounts with, or
receiving services from, any financial institution providing
Settlement;
(g) Costs
incurred by any Processor or by Company or any part under its control or any
party for which it is providing services for any account
processing.
(h) Expenses
associated with manufacturing, embossing, and mailing Cards, which are incurred
by Company and are associated with BINs assigned to Bank for
Company.
(i) All
other
amounts incurred in connection with customer service, balance inquiries, 800
numbers, automated response unit (ARU) programming, chargebacks, fraud and/or
administration of the Program, as provided in this Agreement (except those
specifically made the responsibility of Bank pursuant to Section
6.1).
(j) All
fees
and charges set out in Section 3.1.
ARTICLE
7 - LIMITATION OF LIABILITY
| SECTION 7.1 |
Limitation
on Liability
|
Other
than stated herein and subject to Section 7.2 herein, Bank shall not be liable
for any loss or damage, direct or indirect, for any cause whatsoever,
(including, but not limited to, those arising out of or related to this
Agreement) with respect to any claim or allegation made by any Cardholder,
third
party, or Company, including but not limited to an allegation of an erroneous
or
unauthorized transfer or transaction, provided that Bank will be liable for
any
losses associated with Bank’s gross negligence or intentional misconduct with
respect to the funds in the Deposit Account.
Page
9
| SECTION 7.2 |
No
Special Damages
|
In
no
event shall Bank or Company be liable under any theory of tort, contract, strict
liability or other legal or equitable theory for any lost profits, exemplary,
punitive, special, incidental, indirect or consequential damages, each of which
is hereby excluded by agreement of the parties regardless of whether or not
Bank
or Company has been advised of the possibility of such damages. This section
7.2
should not be construed to limit the liabilities and obligations of the parties
under section.
| SECTION 7.3 |
Disclaimer
of Warranties
|
Bank’s
and Company’s express warranties in this agreement are its only warranties and
Bank and Company specifically disclaim all other warranties of any kind, express
or implied, arising out of or related to this Agreement, including without
limitation, any warranty of merchantability or fitness for a particular purpose
or non-infringement. Bank’s and Company’s liability to each other hereunder
shall in no event exceed an amount equal to actual monetary damages incurred
by
Company and/or Bank, as applicable.
ARTICLE
8 - TERM OF AGREEMENT
| SECTION 8.1 |
Term
|
This
Agreement is effective from the date hereof and shall extend for five (5) years
(the "Original Term").
| SECTION 8.2 |
Renewal
|
After
the
Original Term, this Agreement shall automatically be renewed for consecutive
periods of two (2) years (each a "Renewal Term") unless either party gives
the
other party written notice at least one hundred eighty (180) days prior to
the
termination date of the Original Term or the then-current Renewal Term that
the
Agreement will not be renewed.
Notwithstanding
the first paragraph of this Section 8.2, Bank agrees that Company may terminate
this Agreement without cause at any time. Company agrees that its decision
to
terminate without cause, i.e.,
not a
termination for cause pursuant to Section 8.3, prior to the expiration of the
term will result in administrative costs and fees to the Bank and therefore
agrees to pay a cancellation fee, in addition to other damages, in the following
amounts:
|
(a)
|
During
first year
|
$10,000.00
|
|
(b)
|
During
second year
|
$5,000.00
|
|
(c)
|
During
third year
|
$2,500.00
|
|
(d)
|
During
fourth year
|
$1,500.00
|
|
(e)
|
During
fifth year
|
$1,500.00
|
|
(f)
|
During
any renewal period
|
$1,500.00
|
Company
furthermore agrees such cancellation fee will be paid immediately upon written
notice of termination.
| SECTION 8.3 |
Termination
|
(a) Either
Bank or Company shall have the right, subject to the requirements of Section
8.4
below, to terminate this Agreement upon written notice to the other party upon
occurrence of one or more of the following events:
|
(i)
|
Any
material breach, so long as the breach is not due to the negligence,
fraud
or willful misconduct of the terminating party, but only if the failure
continues without appropriate cure steps as agreed by the
parties
for a period of;
|
(a) thirty
(30) days after the non-performing party receives written notice from the other
party specifying the breach in the case of a failure not involving the payment
of money, or
Page
10
(b) ten
(10)
days after the non-performing party receives written notice from the other
party
specifying the breach in the case of a failure to pay any amount then due
hereunder, or
(c) immediately,
in connection with intentional
misconduct with respect to the Deposit Account.
|
(i)
|
The
gross negligence, fraud, or willful misconduct of the other party.
Such
termination shall be effective immediately upon giving written notice
of
termination for such cause to the other
party.
|
| (ii) |
The
other party;
|
|
(a)
|
voluntarily
commencing any proceeding or filing any petition seeking relief under
Title 11 of the United States Code or any other Federal, state or
foreign
Bankruptcy, insolvency, liquidation or similar law,
or
|
| (b) |
applying
for or consenting to the appointment of a receiver, trustee, custodian,
sequestrator or similar official for such party or for a substantial
part
of its property or assets, or
|
| (c) |
making
a general assignment for the benefit of creditors, or
|
| (d) |
taking
corporate action for the purpose of effecting any of the
foregoing.
|
|
(iii)
|
The
commencement of an involuntary proceeding or the filing of an involuntary
proceeding or the filing of an involuntary petition in a court of
competent jurisdiction seeking;
|
|
(a)
|
relief
in respect of the other party, or of a substantial part of its property
or
assets under Title 11 of the United States Code or any other Federal,
state or foreign bankruptcy, insolvency, receivership or similar
law,
or
|
|
(b)
|
the
appointment of a receiver, trustee, custodian, sequestrator or similar
office for the other party or for a substantial part of its property
or
assets, or
|
|
(c)
|
the
winding up or liquidation of the other party, if such proceeding
or
petition shall continue undismissed for sixty (60) days or an order
or
decree approving or ordering any of the foregoing shall continue
unstayed
and in effect for sixty (60) days.
|
|
(v)
|
Upon
any change to or enactment of any law or regulation which would have
a
material adverse effect upon Bank, Company, or the
Program.
|
|
(vi)
|
Failure
of the Bank to maintain its System
Memberships.
|
|
(vii)
|
Any
uncured material default by the Company with respect to its obligations
to
comply with the Rules or Operating
Rules.
|
|
(viii)
|
If
a Regulatory Authority or a System demands that this Agreement be
terminated or modified in a materially adverse
manner.
|
|
(ix)
|
If,
upon review of the regulatory authorities governing this Agreement,
Company determines in its sole discretion that such regulatory authorities
either prohibit the operation of the Program or would cause the operation
of the Program to adversely affect Company’s business
operations.
|
(b) Bank
may
terminate, limit production, or restrict access to any Cardholder under this
Agreement by giving thirty (30) days advance written notice to the Company;
however, if Bank at any time determines
that continued operation under this Agreement may adversely affect the Bank’s
safety and soundness or if the Bank has knowledge of or
evidence
of fraud, the Bank can terminate the Agreement immediately.
Page
11
|
SECTION
8.4
|
Survival
of Payments and Survival of Obligations upon
Termination
|
Upon
notice of termination and/or cancellation of this Agreement at any time for
any
reason, including pursuant to Section 8.3, and at the Bank’s written request,
Company shall promptly provide notice of cancellation of the Program to all
affected Cardholders processed through BINs assigned to the Bank and shall
take
appropriate action to cause all Cards to be cancelled or reissued
and if
applicable, money on deposit with the Bank to be refunded to the Cardholders.
Additionally, upon the effective date of termination of this Agreement, Company
will discontinue all use of the Bank’s name and Marks and the name and Marks of
any System. At the Bank’s option and upon written notice to Company, this
Agreement shall continue in full force and Bank shall continue to provide the
services currently then being provided until such time as all Cards are so
cancelled or reissued,
but in
no event exceeding ninety (90) days
from
notice of cancellation and/or termination. If such termination is made by Bank
pursuant to Section 8.3(a), Bank, in addition to any other rights and/or
remedies it may have at law and/or at equity, will have the option to withhold
and pay directly expenses that it has incurred from any of the accounts,
including Settlement, Bank fees, System expenses and chargebacks or any other
charges, fees or costs.
Upon
termination of this Agreement and cancellation of the Program, Bank shall,
upon
Company’s request, provide Company with reasonable transition assistance so that
Company may transition the Program to another financial institution.
| SECTION 8.5 |
Disposition
of the Deposit and Reserve
Accounts
|
Upon
the
termination of this Agreement for any reason including but not limited to the
termination and/or expiration of this Agreement at the end of the Initial Term
or any Renewal Term, this Agreement shall remain in full force and effect with
respect to all provisions regarding the Deposit or Reserve Accounts and
Company’s obligations and duties with regard to resolving any alleged errors or
unauthorized transactions. However, an amount representing total alleged errors
or unauthorized transactions at termination and for 90 days subsequent to
termination will be required to be deposited in a suspense account held by
Bank,
provided that Bank shall release to the Company all funds in the suspense upon
the earlier of 90 days following termination or the resolution of all
outstanding alleged errors or unauthorized transactions. The balance of the
Deposit and Reserve Accounts shall remain with and be equal to the total of
the
outstanding balance for all issued cards and Reserve Amounts, pursuant to this
Agreement, provided that Bank shall return funds in the Deposit Account to
Company upon the transfer of the issued cards to a new financial institution
in
an amount equal to the outstanding balance on the issued cards that are
transferred. In addition, notwithstanding the foregoing, upon termination of
this Agreement, Bank shall promptly return to Company an amount equal to the
funds in the Deposit Account less the outstanding balance on the issued cards.
The Bank may, in its sole discretion, place a hold on all such funds and/or
disburse such funds in accordance with this Agreement and the Rules, provided
that Bank exercises its discretion in good faith.
| SECTION 8.6 |
Chargebacks,
Disputed, or Erroneous
Transactions
|
In
the
event of termination or expiration, this Agreement shall remain in full force
and effect with respect to all provisions regarding chargebacks, disputed,
erroneous transactions, and allegedly erroneous or unauthorized transactions.
Company shall continue to process and service those accounts in dispute or
with
account liability under this Agreement. After Company has paid Bank in full
for
any items and allegedly erroneous
or unauthorized transactions, accounts that become loss accounts shall be
Company's property and shall be assigned, transferred and conveyed by Bank
to
Company or Company’s designee, unless such losses are due to Bank’s negligence
or intentional misconduct.
| SECTION 8.7 |
Return
of Materials
|
Each
party agrees that upon termination of this Agreement and the request of the
other party, it will send certification of its destruction of, or deliver to
the
other party, all written and tangible material in its possession which
incorporates any Confidential Information belonging to the other party, or
otherwise relates to the other party’s businesses, except that information which
must be retained as required by Regulatory Authority or System to comply with
retention guidelines.
Page
12
ARTICLE
9 - CONFIDENTIALITY
| SECTION 9.1 |
Confidential
Information
|
Under
this Agreement, the parties will be disclosing to each other certain
confidential and proprietary information including customer lists, customer
data, business plans, software, data, prototypes, documentation, customer
information, and other business and/or technical information (the
“Information”). The Information may be disclosed in either oral or written
form.
The
receiving party shall hold the Information in confidence and shall prevent
the
disclosure of the Information, unless it is in accordance with the terms of
this
Agreement. The receiving party shall use the Information only for the purpose
of
fulfilling its obligations under the Agreement; shall reproduce the Information
only to the extent necessary for such purpose; shall restrict disclosure of
the
Information to its employees and agents with a need to know; and shall advise
such employees and agents of the nondisclosure obligation assumed herein. Other
than as expressly permitted by this Agreement, the receiving party shall not
disclose Information to any third party without prior written approval of the
other party.
The
above
restrictions on the use or disclosure of Information shall not apply to any
Information:
|
(a)
|
which,
as established by the receiving party’s written records, is independently
developed by the receiving party or its affiliated company or lawfully
received free of restriction from another source having the right
to so
furnish such Information;
|
|
(b)
|
after
it has become generally available to the public without breach of
this
Agreement or any other agreement to which Company is a party;
|
|
(c)
|
which
the disclosing party agrees in writing is free of such restrictions;
or
|
|
(d)
|
was
in the receiving party’s possession as of the date of this
Agreement
|
Information
may be disclosed where a party is legally required to disclose such information,
including pursuant to a governmental or judicial order, provided that the
receiving party notifies the disclosing party of the pending disclosure prior
to
such disclosure, unless the disclosing party is legally or contractually
prohibited from doing so. Information
may also be released to the Processor to the extent necessary and required
to
process transactions and service Cardholder’s accounts as required pursuant to
the Rules and Regulations.
All
Information shall remain the property of the disclosing party and shall be
returned upon written request or upon the receiving party’s determination that
it no longer has a need for such Information.
The
parties acknowledge that in the event either party breaches the terms of this
Section 9.1, the non-breaching party shall be entitled to injunctive relief
in
addition to any other remedies that may be available to it at law or under
the
terms of the Agreement.
| SECTION9.2 |
Access
|
Unless
prohibited by applicable law, Company shall provide to Bank full access to
all
account information in whatever available form or medium necessary for Bank
to
perform its obligations hereunder and agrees to cooperate fully and promptly
with any reasonable request from a Regulatory Agency or Bank’s auditors or
compliance personnel to obtain any records, including inspection at Company’s
premises or the of premises any third party, which are related in any way to
this Agreement or Company’s ability to comply with its terms, provided that Bank
shall bear its own costs in connection with any such request.
ARTICLE
10 - GENERAL PROVISIONS
| SECTION 10.1 |
Indemnification
|
(a) Company
covenants and agrees to indemnify and hold Bank, its parent or affiliates,
and
their respective officers, directors, employees, agents and permitted assigns
harmless, against any
losses or expenses arising out of this Agreement including but in no way limited
to those arising from any legal action, claim, demand or proceedings brought
against any of them as a direct result of; (1) any negligence, fraud or willful
misconduct by Company, its officers, directors, employees, agents, merchants
or
Cardholders or their officers, directors, employees or agents; (2) any action
or
omission of Company or its officers, directors, employees or agents or action
or
omission by Cardholders or merchants or their banks which violates any law,
Regulation or Rule;
(3) any
claim relating to obligations owed to or by Company or any third party retained
by it;
(4)
actions taken by Bank in accordance with or in good faith reliance upon
information or instructions provided by Company or by its agents;
(5)
Company’s or its agents failure to comply with any federal,
state, or local laws or Regulations, the Operating Rules or Rules; (6) the
acts
of omissions of the Processor;
(7) the
breach of this Agreement by Company; and (9) any breach of the agreement between
Company and Processor.
This
provision shall not apply to the extent such claim is the direct result of
any
negligence,
fraud, willful misconduct or material breach by Bank or to the extent the Bank
is obligated to provide indemnity under sub paragraph (b) below.
Page
13
(b) Bank
covenants and agrees to indemnify and hold Company, its parent or affiliates,
and their respective officers, directors, employees, agents and permitted
assigns, harmless against any losses or expenses arising from any legal action,
claim, demand or proceedings brought against any of them to the extent they
are
the direct result of Bank’s (or its officers, directors, employees, or agents’)
breach
of
this Agreement, negligence,
fraud or
willful misconduct,
or
failure to comply with the Operating Rules, Rules, applicable laws or
Regulations. This provision shall not apply to the extent such claim arises
out
of any gross negligence, fraud, willful misconduct, or breach by Company
or its
officers, directors employees or agents or to the extent the Company
is
obligated to provide indemnity under sub paragraph (a) above.
(c) If
any
claim or demand is asserted against any party or parties (individually or
collectively, the “Indemnified Party”) by any person who is not a party to this
Agreement in respect of which the Indemnified Party may be entitled to
indemnification under the provisions of subsections (a) or (b) above, written
notice of such claim or demand shall promptly be given to any party or parties
(individually or collectively, the “Indemnifying Party”) from whom
indemnification may be sought. The Indemnifying Party shall have the right,
by
notifying the Indemnified Party within ten (10) business days of its receipt
of
the notice of the claim or demand, to assume the entire control (subject to
the
right of the Indemnified Party to Participate at the Indemnified Party’s expense
and with counsel of the Indemnified Party’s choice) of the defense, compromise
or settlement of the matter, including, at the Indemnifying Party’s expense,
employment of counsel of the Indemnifying Party’s choice. If the Indemnifying
Party gives notice to any Indemnified Party that the Indemnifying Party will
assume control of the defense, compromise or settlement of the matter the
Indemnifying Party will be deemed to have waived all defenses to the claims
for
indemnification by the Indemnified Party with respect to that matter. Any
damages to the assets or business of the Indemnified Party caused by a failure
of the Indemnifying Party to defend shall be included in the damages for which
the Indemnifying Party shall be obligated to indemnify the Indemnified
Party.
| SECTION 10.2 |
Arbitration
|
In
the
event of any dispute between Bank and Company relating to this Agreement, or
their performance hereunder, Bank and Company agree that such dispute shall
be
resolved by means of binding arbitration in accordance with the commercial
arbitration rules of the American Arbitration Association (the “AAA”), subject
to any modifications contained in this Agreement, and judgment upon the award
rendered by the arbitrator(s) may be entered in any court of competent
jurisdiction. The arbitration decision shall be binding upon the Bank and
Company. The arbitrator(s) shall be limited to awarding compensatory damages
and
shall have no authority to award punitive, exemplary or similar type damages.
The dispute shall be determined by one (1) arbitrator, except that if the
dispute involves an amount in excess of One Million Dollars ($1,000,000)
(exclusive of interest and costs), three (3) arbitrators shall be appointed
to
decide by majority vote unless the parties agree otherwise. The arbitrator(s)
shall be selected from panels maintained by the AAA unless the parties agree
otherwise.
The
determination of the arbitrator shall be binding upon the parties and judgment
upon the award rendered may be entered in any court having jurisdiction thereof.
The arbitrator(s) shall base the award on the applicable law judicial precedent,
which would apply if the Dispute were decided by a United States District Court
Judge sitting in California. The award shall be in writing and include the
findings of fact and conclusions of law upon which it is based unless the
parties agree otherwise. Notwithstanding the foregoing, no party shall be
prevented from seeking injunctive relief from a court of competent jurisdiction
in order to enforce this Agreement. Depositions may be taken and other discovery
may be obtained during such arbitration proceedings to the same extent
authorized in civil judicial proceedings. The arbitrator(s) will resolve any
discovery disputes. The arbitrator(s) and counsel of record will have the power
of subpoena process as provided by law. Arbitration fees payable to the
arbitrator in advance of an award shall be paid equally by the parties to the
dispute. The arbitrator(s) shall award recovery of all costs and fees (including
reasonable attorneys’ fees, administrative fees, arbitrator fees, costs and
expenses) to the prevailing party. The arbitrator(s) may also grant provisional
or ancillary remedies including, without limitation, injunctive relief,
attachment or the appointment of a receiver, either during the pendency of
the
arbitration proceeding or as part of the arbitration award. The arbitration
shall be governed by the substantive laws of the State of California without
regard to conflicts of law rules. The arbitration proceedings shall be conducted
in Palm Desert, California, unless the parties agree otherwise.
Page
14
| SECTION 10.3 |
Disclosure
|
(a) Each
party shall promptly notify the other of any action, suit, proceeding, facts
and
circumstances, and the threat of reasonable prospect of same, which might give
rise to any indemnification hereunder or which might materially and adversely
affect either party's ability to perform this Agreement.
(b) Each
party represents and warrants to the other that it has no knowledge of any
pending or threatened suit, action, arbitration or other proceedings of a legal,
administrative or regulatory nature, or any governmental investigation, against
it or any of its affiliates or any officer, director, or employee which has
not
been previously disclosed in writing and which would materially and adversely
affect its financial condition, or its ability to perform this
Agreement.
| SECTION 10.4 |
Legal
Compliance
|
Company
represents and warrants that it is familiar with the requirements of all
applicable laws, regulations Operating Rules and Rules, including but not
limited to federal and state consumer protection laws and agrees that it shall
be solely responsible for complying and causing all third parties to
comply
with all such laws and Regulations and all other applicable laws and Regulations
relating to its activities under this Agreement, now and in the future. Nothing
in this Section 10.4 shall relieve Company of its obligations under this
Agreement including, without limitation, the requirements of Section
2.
Without
limiting the generality of the foregoing and other terms and conditions herein,
Company’s obligations under this Agreement, including without limitation, its
responsibility for all legal compliance, shall in no way be affected, altered
and/or waived in the event Bank performs, exercises or fails to exercise, any
right, obligation, option, or otherwise, to provide instruction, guidance,
or
recommendations of any kind, and/or review, any aspect of the Program.
| SECTION 10.5 |
Legal
Authority
|
Company
and Bank each represents and warrants to the other that it is a corporation
duly
organized and validly existing as of the date of this Agreement, that all
consents and approvals necessary for this Agreement to be valid and binding
on
it have been obtained, and that fulfillment of its obligations pursuant to
this
Agreement does not conflict with any provision of any state or Federal law
applicable to it or any other contract to which it is a party.
| SECTION 10.6 |
Force
Majeure
|
Neither
party shall be liable for any failure or delay on its part to perform, and
shall
be excused from performing any of its non-monetary obligations hereunder if
such
failure, delay or non-performance results in whole or in part from any cause
beyond the absolute control of the party, including without limitation, any
act
of God, act of war, riot, earthquake, fire, explosion, natural disaster,
flooding, embargo, sabotage, government law, ordinance, rule, regulation, order
or actions. Either party desiring to rely upon any of the foregoing as an excuse
for failure, default or delay in performance shall, when the cause arises,
give
to the other party prompt notice in writing of the facts which constitute such
cause; and, when the cause ceases to exist, give prompt notice thereof to the
other party. This Section 10.6 shall in no way limit the right of either party
to this Agreement to make any claim against third parties for any damages
suffered due to said cause. If any performance under this Agreement is postponed
or extended for longer than sixty (60) calendar days Bank or Company may, by
written notice, terminate the Agreement immediately.
| SECTION 10.7 |
Relationship
of Parties
|
Bank
and
Company agree they are independent contractors to each other in performing
their
respective obligations hereunder. Nothing in this Agreement or in the working
relationship being established and developed hereunder shall be deemed or is
intended to be deemed, nor shall it cause, Bank and Company to be treated as
partners, joint ventures, or otherwise as joint associates for
profit.
Page
15
| SECTION 10.8 |
Regulatory
Examinations and Financial
Information
|
Company
agrees to submit to and cooperate fully and promptly with any examination that
may be required by any Regulatory Authority, Bank auditors or Bank’s compliance
personnel. Company shall also promptly provide to Bank any information, which
may be reasonably required by any Regulatory Authority or Bank’s auditors or
compliance personnel in connection with their audit or review of Bank or the
Program. Company shall promptly furnish Bank, at Company's expense, with
financial statements. Company shall also promptly provide such other information
as Bank may from time to time request with respect to the financial condition
of
Company and such other information as Bank may from time to time request with
respect to third parties retained by Company.
Bank
may
require based on risk or suspected risk an annual operational audit of Company’s
operations to be performed by the bank or a third party as designated by
the
Bank. All of expenses associated with the performance of such an operational
audit shall be the sole responsibility of the Company.
| SECTION 10.9 |
Governing
Law
|
This
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of California. The parties hereby consent to service
of
process, personal jurisdiction, and venue in the state and federal courts in
Palm Desert, California or Riverside County, California.
| SECTION 10.10 |
Severability
|
In
the
event that any part of this Agreement is ruled by a court, Regulatory Authority
(other than Bank), or other public or private tribunal of competent jurisdiction
to be invalid or unenforceable, such provision shall be deemed to have been
omitted from this Agreement. The remainder of this Agreement shall remain in
full force and effect, and shall be modified to any extent necessary to give
such force and effect to the remaining provisions, but only to such
extent.
| SECTION 10.11 |
Survival
|
All
representations and warranties and terms of this Agreement herein shall survive
any termination or expiration of this Agreement
| SECTION 10.12 |
Successors
and Third Parties
|
Except
as
limited by Section 10.13, this Agreement and the rights and obligations
hereunder shall bind, and inure to the benefit of the parties and their
successors and permitted assigns.
| SECTION 10.13 |
Assignments
|
The
rights and obligations of the Company and Bank under this Agreement are personal
and are not assignable either voluntarily or by operational law, without prior
written consent from the Bank, provided that Company may transfer, assign,
or
dispose of its rights or obligations under this Agreement without Bank’s consent
to a parent, affiliate, or subsidiary, or to any successor as a result of any
merger, consolidation, or other corporate reorganization of
such
party or any sale of all of substantially all of the stock or assets of such
party.
| SECTION 10.14 |
Notices
|
All
notices, requests, financial statements and approvals required by this Agreement
shall be in writing and shall be deemed to have been duly given as follows:
(i)
upon receipt if personally delivered; or (ii) upon deposit in the mail, if
sent
by certified or registered mail, postage prepaid, return receipt requested,
or
by overnight carrier, addressed as indicated below, or at such other address
of
which the notifying party hereafter receives notice in conformity with this
section.
|
To
Bank:
|
Palm
Desert National Bank
|
To
Company:
|
Ready
Credit Corporation
|
|
▇▇-▇▇▇
▇▇ ▇▇▇▇▇
|
|
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
|
|
|
▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
|
|
▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
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Attention:
▇▇▇ ▇▇▇▇▇▇
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Attention:
▇▇▇ ▇▇▇▇▇
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▇▇▇-▇▇▇-▇▇▇▇;
Fax: ▇▇▇-▇▇▇-▇▇▇▇
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▇▇▇-▇▇▇-▇▇▇▇;
Fax: ▇▇▇-▇▇▇-▇▇▇▇
|
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Email:
▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
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Email:
▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
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Page
16
|
SECTION
10.15
|
Waivers
|
Neither
party shall be deemed to have waived any of its rights, powers, or remedies
hereunder except in writing signed by an authorized agent or representative
of
the party to be charged. Either party may, by an instrument in writing, waive
compliance by the other party with any term or provision of this Agreement
on
the part of the other party to be performed or complied with. The waiver by
either party of a breach of any term or provision of this Agreement shall not
be
construed as a waiver of any subsequent breach.
Notwithstanding
the generality of the foregoing, and for illustrative purposes only, Bank and
Company shall not be deemed to have waived any of their respective rights as
a
result of any course of dealing or by its exercise or non-exercise of any right
of approval or recommendation or supply of information, including without
limitation, in the event that Bank has the right to review or approve any aspect
of the Program and declines and/or does not for any reason exercise or opt
to
exercise that right.
| SECTION 10.16 |
Entire
Agreement; Amendments
|
This
Agreement constitutes the entire Agreement between the parties and supersedes
all prior Agreements, understandings, and arrangements, oral or written, between
the parties with respect to the subject matter hereof. This Agreement may not
be
modified or amended except by an instrument or instruments in writing signed
by
the party against whom enforcement of any such modification or amendment is
sought.
| SECTION 10.17 |
Counterparts
|
This
Agreement may be executed and delivered by the parties in counterpart, each
of
which shall be deemed an original and both of which together shall constitute
the same instrument.
| SECTION 10.18 |
Exclusivity
|
This
program is exclusive to the Bank, to the extent that the Bank’s Capital to
Deposit ratio remains
within compliance guidelines, in which case bank will relinquish right of
exclusivity. Other programs issued by the Company
may be
presented to the Bank and Bank has first right of refusal to accept program.
IN
WITNESS WHEREOF,
this
Agreement is executed by the parties as of the date and year first above
written.
|
February
2, 2006
Date
|
PALM DESERT NATIONAL BANK
By: ▇▇▇ ▇▇▇▇▇
Name and Title: Chief Executive
Officer
|
|
February
2, 2005
Date
|
“COMPANY”
By: ▇▇▇▇▇ ▇▇▇▇▇▇
Name and Title: Senior Vice President,
Administration
|
Page
17
SCHEDULE
B
BANK
FEES AND CHARGES
SET-
UP FEES
|
One-time
program set-up fee:
|
$5,000.00
|
ANNUAL
FEES
Any
System Sponsorship Fees (passed through from networks):
|
a.
|
$5,000
Visa ISO registration ($2,500 annual
renewal)
|
|
b.
|
$100
STAR Marketing Service Organization
fee
|
|
c.
|
Any
other Network fees
|
CARD
FEES
|
Monthly
card maintenance fee:
|
$0.08
|
per
card 1-10,000
cards
|
|||
|
$0.07
|
per
card 10,001-25,000
|
||||
|
$0.06
|
per
card 25,001-50,000
|
||||
|
$0.05
|
per
card 50,001-100,000
|
||||
|
$0.04
|
per
card 100,001+
|
||||
|
Completed
transaction fee*:
|
$0.08
|
per
trans 1-100,000
|
|||
|
$0.07
|
per
trans 100,001-250,000
|
||||
|
$0.06
|
per
trans 250,001-500,000
|
||||
|
$0.05
|
per
trans 500,001-2,000,000
|
||||
|
$0.04
|
per
trans 2,000,000+
|
||||
|
|
|||||
|
Revenue
share on interchange (to RCC):
|
40%
|
1-10,000
cards
|
||
|
50%
|
10,001-50,000
cards
|
|||
|
60%
|
50,001+
cards
|
|||
*
Completed transactions include: loads, signature POS (settled), debit POS,
and
debit ATM.
Page
18
SCHEDULE C
ACCOUNT
FUNDS FLOW
(Attached)
Page
19