Exhibit 10.24
FIRST AMENDMENT TO SERVICE AGREEMENT
     This First Amendment to Service Agreement (this “Amendment”) is made and
entered into as of this 9th day of October, 2009 between First Data Merchant
Services Corporation (“FDMS”) and iPayment, Inc. (“Customer”) and amends that
certain Service Agreement by and between FDMS and Customer dated December 27,
2004, as amended (the “Service Agreement”). Except as supplemented or amended by
this Amendment, the provisions of the Service Agreement shall continue in full
force and effect, and if there shall be any conflict between the provisions of
this Amendment and the Service Agreement, the terms of this Amendment shall
control. Each capitalized term used but not defined herein shall have the
meaning assigned in the Service Agreement.
     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is acknowledged by the parties, FDMS and Customer hereby
agree as follows:
1. Except as otherwise specifically set forth herein, the terms of this
Amendment will be effective as of August 1, 2009.
2. The following shall be added as a new Section 3.4(e) of the Service
Agreement:
“(e) The parties agree that the terms and conditions of this Section 3.4 shall
cease on December 31, 2011.”
3. The following shall be added to the end of Section 4.4 of the Service
Agreement:
“Customer shall not be required to generate the Minimum Processing Fees after
the Processing Year that ends December 31, 2011.”
4. The following shall be added as a new Section 4.9 of the Service Agreement:
“4.9 Amount Payable to Customer. FDMS agrees to pay Customer, on a monthly basis
by the 10th day of each month for the previous month, the amount specified in
Section VI of Exhibit B for all Merchants. FDMS shall advise Customer in
writing, on a monthly basis, of the amount to which Customer is entitled under
this Section and will credit Customer’s bank account established pursuant to
Section 4.5 (Method of Payment) for that amount. FDMS shall provide the required
detail prior to billing/charging the Customer any amounts. Furthermore, FDMS
shall have only seventy five (75) days from the end of any processing month to
provide the required detail for any such items on Exhibit B to Customer or any
such fees shall be waived forever. All payments made pursuant to this Section
will be deemed final and not subject to further review or dispute by either
party after seventy-five (75) days after the date such amount is paid/billed or
should have been paid/billed to Customer. For example, August activity will be
paid by September 10 and both parties have until December 15 to dispute the
payment amount.”
5. Section 8.1 of the Service Agreement is hereby deleted in its entirety and
replaced with the following:
“8.1 Term. This Agreement is effective from January 1, 2005 and shall extend
through December 31, 2014 (the “Original Term”). Processing Year 1 of the Term
shall commence on January 1, 2005 and continue through December 31, 2005. For
purposes of this Agreement, a “Processing Year” means each twelve (12) month
period commencing on the first day of January

 

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and ending on the last day of the following December. The term described herein
shall not apply to Sections 3.4 and 4.4, which shall have their own specific
terms”
6. The following shall be added as a new subsection (g) to Section I of
Exhibit B to the Service Agreement:
“(g) Customer acknowledges that Merchants reside in a shared BIN and ICA. In
addition to Customer’s obligations set forth in subsection (a), Customer shall
reimburse FDMS for Card Association rates, fees and expenses associated with the
shared BIN and ICA (“Shared BIN/ICA Fees”) as described herein. Shared BIN/ICA
Fees imposed on FDMS that contain no merchant level detail are classified in the
attached Schedule G titled “Association Compliance Rate Changes Effective
July 2009” as either “Direct Pass Thru” or “Allocation”. Customer shall
reimburse FDMS for Shared BIN/ICA Fees that are Direct Pass Thru based upon the
direct fees incurred by Customer, but only to the extent that FDMS provides
clearly detailed information that is ascertainable to the Customer regarding
such fees. Customer shall reimburse FDMS for Shared BIN/ICA Fees that are
Allocation based upon the Customer’s share of the net settlement transactions
flowing through the shared BIN and ICA that incurred the fee, but only to the
extent that FDMS provides clearly detailed information that is ascertainable to
the Customer regarding such fees. The attached Schedule G titled “Association
Compliance Rate Changes Effective July 2009” sets forth the Shared BIN/ICA Fees
as of July 2009, which schedule may be updated time to time by FDMS as new
rates, fees and expenses are imposed or changed by the Card Associations. Any
such changes to Schedule G will be communicated by FDMS to Customer, via a
client alert or similar mechanism, as soon as commercially practicable.
Notwithstanding, any such fees shall be actual pass-thru fees set by the
Associations. Furthermore, FDMS shall provide Customer with ample notice and
time regarding such fees so that Customer has the opportunity to pass such fees
through to Customer’s Merchants.”
7. The following shall be added as a new Section V of Exhibit B to the Service
Agreement:
     *
 

*   Omitted pursuant to a confidential treatment request. The confidential
portion has been filed separately with the SEC.

 

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8.   The following shall be added as a new Section VI of Exhibit B to the
Service Agreement:

“VI. Amount Payable to Customer.
Each month, FDMS agrees to pay Customer an amount calculated using (i) the
methodology modeled in the attached Schedule VI, a close report titled “First
Data Merchant Services iPayment, Inc. FDMS Sale II Monthly Statement
(August 2009)”; and (ii) the amounts described in subsection (g) to Section I of
this Exhibit B, which shall replace the tab entitled Ex Manual Summry Interim in
the attached Schedule VI.”
9. The following shall be added as a new Section F of Exhibit A to the Service
Agreement:
     *
10. This Amendment may be executed in two or more counterparts, each of which
shall be deemed an original, and taken together they shall be considered one
agreement.
     IN WITNESS WHEREOF, the parties have each caused this Amendment to be
executed by their duly authorized officers as of date listed above.

                  First Data Merchant Services Corporation       iPayment, Inc.
 
               
By:
  /s/ Stephanie Lusher
 
      By:   /s/ Carl Grimstad
 
Printed Name: Stephanie Lusher       Printed Name: Carl Grimstad
Title:
  SVP       Title:   President

 

*   Omitted pursuant to a confidential treatment request. The confidential
portion has been filed separately with the SEC.

 

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SCHEDULE 1
Eligible Fees
Eligible Services
*
Non-Eligible Services
*
 

*   Omitted pursuant to a confidential treatment request. The confidential
portion has been filed separately with the SEC.

 

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SCHEDULE G
Association Compliance Rate Changes Effective July 2009
[attach]

 

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SCHEDULE VI
First Data Merchant Services iPayment, Inc. FDMS Sale II Monthly Statement
(August 2009)
[attach close report]