E-PAY MASTER AGREEMENT

Exhibit 10.1

 

This E-Pay Master Agreement (“Agreement”) is made and entered into as of the
31st day of January 2017 (“Effective Date”), by and between the Office of the
Illinois State Treasurer ("Treasurer") and JetPay Payment Services, FL, LLC
(“Contractor").

 

WHEREAS, pursuant to 15 ILCS 505/17 the Treasurer offers any unit of State or
local government an electronic payment program (“E-Pay”) that allows individuals
to make payments via credit card (“End-User”);

 

WHEREAS, the Treasurer issued a Request for Proposals Electronic Payment
Processing Services 370-300-16-002 on June 15, 2016; and

 

WHEREAS, the Contractor’s proposal was selected by the Treasurer via a
competitive procurement process to provide the services set forth in the RFP,
and the Contractor has agreed to provide such services.

 

NOW, THEREFORE, in consideration of the above stated recitals, the mutual
promises, covenants, representations and conditions contained herein, the
parties agree as follows:

 

1.TERM

 

The term of this Agreement shall be six (6) years, unless terminated in
accordance with the terms of this Agreement. The Treasurer may, with the consent
of Contractor, elect to extend this Agreement for additional periods, not to
exceed a total term of ten (10) years, including the initial six (6) years.

 

2.SERVICES

The Contractor shall perform the following services (collectively, the
“Services”):

2.1Electronic Processing Services

 

A.Accept all of the major card brands, namely Visa, MasterCard, Discover and
American Express, and E-checks for any unit of State or local government that
executes a Participant specific agreement to participate in E-Pay
(“Participant”); using one or more of the following methods:

 

1.Processing transactions that are integrated with CSI JetPay, the Contractor’s
proprietary hosted platform solution (such solution, the “Platform,” and the
transactions, the “Platform Transactions”). Platform Transactions may be
integrated with the Platform via the following methods:

 

a.An integration provided by the Treasurer;

 

b.An integration provided by the Participant; and

 

c.An integration developed by the Contractor for a specific Participant.

 

 

 

  

2.Processing transactions via point-of-sale (“POS”) equipment, Interactive Voice
Response (“IVR”), and/or the internet that do not integrate with the Platform
(collectively, the “Non-Platform Transactions).

 

B.Permit any Participant to absorb (such Participant, an “Absorbing
Participant”) or pass through (such Participant, a “Passing Participant”)
processing fees;

 

C.Provide enrollment capabilities, including online application and electronic
signature functionality, that allow the Treasurer to review enrollments for
quality control purposes prior to set-up of a Participant by the Contractor;

 

D.Provide the Treasurer direct access to Contractor’s enrollment and reporting
portals;

 

E.Continue to advance the Services, based on new technology, security, industry
trends, and industry and legal mandates;

 

F.Sell or rent to Participants in accordance with the Cost Schedule, attached
hereto as Exhibit A, all equipment and items necessary for POS service,
including, but not limited to the following: Card swipe/E-check terminals/check
scanners, Euro, MasterCard and Visa (“EMV”) capable terminals, printers, debit
pin pads, and mobile terminals in each case as set forth on the Supported
Devices List, attached hereto as Exhibit B (the “Supported Devices”); near-field
communication (where applicable); virtual terminals; swivels/stands; terminal
paper/supplies; equipment instruction manuals; equipment warranty information;
and window/counter displays that show card brand and device type acceptance. In
addition, Contractor shall perform the following:

 

1.Provide free software updates for all Supported Devices; and

 

2.Exchange each existing E-Pay EMV swipe device (each an “Eligible Exchange
Terminal”) with a Supported Device, chosen by the Absorbing Participant, in
accordance with the limitations set forth in this Agreement for all existing
Absorbing Participants as of the Effective Date (collectively, the “EMV Exchange
Program”). Contractor shall exchange an Absorbing Participant’s Eligible
Exchange Terminal by giving the Absorbing Participant a purchase credit that is
equal to the purchase price listed in the Cost Schedule for such Eligible
Exchange Terminal or the equivalent thereto, regardless of the equipment’s age
(“Purchase Credit”). The Absorbing Participant may use the Purchase Credit to
exchange its Eligible Exchange Terminal for a Supported Device of equal or
greater value. In the event that the Absorbing Participant selects a Supported
Device that is of greater value than the Purchase Credit, then the Participant
shall pay the Contractor the difference. Notwithstanding the foregoing, all
Absorbing Participants’ existing E-Pay EMV swipe devices are presumed eligible
for the EMV Exchange Program, subject to Contractor’s ability to reasonably and
in good faith request documentation from Participant to determine eligibility.

 

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G.Manage POS equipment implementation. If required by the Payment Card Industry
(“PCI”), Contractor shall use PCI certified Qualified Integrator and Reseller
(“QIR”) staff to implement POS equipment;

 

H.Provide Participants the ability to void or reverse any transaction;

 

I.All Platform Transactions shall provide individual check-out pages per
merchant ID and limit PCI scope for supported transactions to the lowest level
possible for e-commerce;

 

J.Provide an Application Program Interface (“API”), which provides the ability
for the Treasurer and Participants to integrate mobile payment applications;

 

K.Receive and respond to all retrievals and chargebacks on behalf of all
Participants. The Contractor shall only reach out to Participants regarding
retrievals and chargebacks if documentation is needed to resolve the claim and
only debit the Participant if the chargeback claim is lost;

 

  L. Provide the Treasurer a Qualified Security Assessor’s (“QSA”) assessment of
Contractor’s encryption solution(s) within six (6) months after the Effective
Date. In the event that the Contractor updates or materially alters its
encryption solution(s), the Contractor shall provide the Treasurer a new QSA
that that reflects such updates or alterations;

 

M.Initiate the process to provide a PCI certified encryption solution(s) within
ninety (90) days of notification or knowledge that five (5) or more of the
Recognized Visa Processors offers the same. In the event of the foregoing, the
Contractor shall use best efforts to provide a PCI certified encryption
solution(s) in a commercially reasonable timeframe. In the event that the
Contractor obtains PCI certification for its encryption solution(s), the
Contractor shall provide the Treasurer a copy of such certification promptly
after receipt. As used herein, the term “Recognized Visa Processor” means the
Visa processors listed on Exhibit C; and

 

N.Provide Participants a lifetime warranty, which includes full replacement, for
all Supported Devices Contractor sells, exchanges, or rents to Participants.

 

2.2Settlement Services

 

A.Originate settlement for all payments by End-Users to Participants on or
before 12:00am CT for transactions that occurred on the prior business day with
funding to the appropriate settlement account within 2 business days;

 

B.For Absorbing Participants, settle fees on a monthly basis in accordance with
the Cost Schedule and the most up-to-date Visa, MasterCard, Discover, and
American Express and any other future or alternate card types (collectively, the
“Card Brands”) interchange rates, dues, assessments, and any other pass through
fees from the Card Brands (collectively, the “Interchange Fees”). For applicable
Passing Participants, the Contractor shall settle fees on a monthly basis in
accordance with the Cost Schedule;

 

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C.Send settlement files to the Treasurer’s settlement custodial bank’s
(“Settlement Bank”) in a standard banking format, approved by the Treasurer.
Such settlement files must provide the addenda information necessary for the
Treasurer to reconcile funds with the State ledger;

 

D.Allow Participants to elect to be invoiced for applicable costs and fees;

 

E.Reimburse Participants for any banking fees and/or loss of interest that are
incurred due to Contractor’s or its subcontractor’s error in the clearing and
settlement of any credit card and e-check payments; and

 

F.Reimburse Settlement Bank Participants for the Settlement Bank’s monthly
Account Maintenance fee, via a monthly credit to the Participant’s Settlement
Bank account.

 

2.3Reporting Services

 

A.All E-Pay reports shall abide by the following requirements:

 

1.Exportable in the following file formats: .csv; .xml; .pdf; .html; .xls; and
.tab;

 

2.Retained by the Contractor for seven (7) years from the report’s creation
date;

 

3.Customizable by the Treasurer and Participant, based upon the data collected
during the transaction;

 

4.Accessible by the Treasurer, regardless of whether it is created for or
transmitted to a Participant or End-User;

 

5.Correctable, in the event of an error, and includes a disclaimer that the
report has been corrected for audit purposes; and

 

6.Can be sent daily by email.

 

B.Provide Participants the following types of reports:

 

1.Sole Source Reports: reports shall provide a summary as well as
transaction-specific details for all payments made by every card type or source
of payment through every payment processing channel the Participant utilizes;

 

2.Customizable Reports: reports that can be customized by the Participant and
delivered via email, FTP, online reporting tool, and/or any other agreed upon
method;

 

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3.Origination and Settlement Reports: reports shall provide a summary, as well
as transaction-specific details for all deposits, including credit card/E-check
settlements, returns, and chargeback activity

 

4.Payment Transaction Qualifying Report: monthly reports that allow an Absorbing
Participant to track summarized transactions by Interchange Fee category; and

 

5.Retrieval and Chargeback Reports: reports shall list all retrieval requests
and chargebacks related to their processing. This shall include original
retrieval and chargeback documentation initiated by the End-User and/or the
credit card issuer.

 

C.Provide End-Users the following:

 

1.A confirmation number at the end of an approved telephone payment. If the
payment is declined, provide a message that indicates the cause for the decline;

 

2.A confirmation number for an approved internet payment. If the payment is
declined, provide a message that indicates the cause for the decline;

 

3.An email that is immediately sent to an End-User for internet payments,
indicating whether his/her payment has been approved or declined. Cardholder
information and data regarding the charge shall be included in the email for
receipt purposes;

 

4.Notification of any returned E-check for internet and POS payments; and

 

5.A receipt for any POS Platform Transaction by email, if elected by the
End-User.

 

D.Provide the Treasurer the following types of reports:

 

1.Sole Source Transactional Reports – Reports shall list all payments made by
every card type or source of payment through every payment processing channel.
Contractor shall make these reports available by merchant identification number
(“MID”), Participant hierarchy, payment channel, routing number, absorbing or
passing fee, and card brand;

 

2.Sole Source Merchant Setup Reports – Reports shall list all
Contractor-provided and externally procured POS equipment and third-party
integrations. Contractor shall make these reports available by MID, Participant
hierarchy, payment channel, routing number, and card brand;

 

3.Monthly End-User Reports – Reports shall include the following: the names of
all End-Users that used Platform Transactions who do not opt-out of receiving
marketing materials, all such End-Users’ phone numbers, zip codes, and all such
End-Users’ email addresses.

 

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4.Performance Reports – The Monthly performance reports in this Section 2.3D.4
shall be sent to the Treasurer on the 10th of the month with information
regarding the preceding month. Monthly, calendar year end, and fiscal year end
performance reports shall include, but are not limited to, the following:

 

a.Total E-Pay and by Participant transaction volume by payment channel and
payment type;

 

b.Total E-Pay and by Participant revenue generated for the Treasurer from
processing Services;

 

c.Total number of retrievals/chargebacks for E-Pay and by each Participant;

 

d.Total number of Participant enrollments and closures;

 

e.IVR call volume;

 

f.Number of enrollment requests received;

 

g.Average enrollment timeframe;

 

h.Number of closure requests received;

 

i.Average closure timeframe;

 

j.Number of change of information requests received;

 

k.Average change of information implementation timeframe;

 

l.Number of Service outages;

 

m.Average length of Service outage;

 

n.Number of funding delays;

 

o.Average impact amount caused by funding delays;

 

p.Average time between issue acknowledgement and resolution; and

 

q.Any other data requested by the Treasurer.

 

5.Participants’ Retrieval and Chargeback Reports – reports shall list all
retrieval requests and chargebacks related to their processing. This shall
include original retrieval and chargeback documentation initiated by the
End-User and/or the credit card issuer; and

 

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6.Enrollment Report – report that details all E-Pay enrollments, including any
MID updates for processing, funding, settlement, unauthorized use of an E-Pay
enrollment MID.

 

E.Provide each Participant an accurate 1099K for reporting purposes and file the
Participants’ accurate 1099K with the Internal Revenue Service (“IRS”) by the
due date;

 

F.Maintains and reports, no less than thirty (30) days before its PCI compliance
deadline, its PCI compliance to the Treasurer;

 

G.Provide the Treasurer the information and supporting documentation requested
by the Treasurer, Participants, and Participants’ third-party E-Pay integration
service providers necessary in connection with their respective annual PCI
assessments, including a detailed listing of the Services Contractor provides
E-Pay and their associated PCI scope.

 

2.4Customer Service

 

A.Provide a team, based in Springfield, IL, to provide customer service to the
Treasurer (“Customer Service Team”). Within the Customer Service Team, a minimum
of two (2) of Contractor’s employees shall be fully dedicated to E-Pay, one (1)
of whom shall be a project manager, who is available to the Treasurer 24-hours a
day, 7-days a week, 365-days a year. The Customer Service Team shall be able to
provide assistance on the following topics:

 

1.Technical support, including, but not limited to, third-party integration,
equipment, websites, and testing;

 

2.E-Pay enrollment;

 

3.E-Pay marketing;

 

4.Customer service for Participants and End-Users, as requested by the
Treasurer;

 

5.Operational communications; and

 

6.Accounting for the funding and settlement of E-Pay transactions.

 

B.Report to the Treasurer any change in its personnel that could potentially
impact the Treasurer;

 

C.Provide the Treasurer the ability to log into the Contractor’s Customer
Relationship Management (“CRM”) system and have “view” access for ticketing and
resolution of Participant and/or End-User issues;

 

D.Provide for Participants’ use, a toll-free phone number that is available
24-hours a day, 7-days a week, 365-days a year and an email address for customer
service (collectively, “Customer Service”). The Contractor shall use
commercially reasonable efforts to resolve all Customer Service issues within
48-hours. Customer Service shall cover the following topics:

 

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1.Equipment/software installment and troubleshooting;

 

2.Phone scripts;

 

3.Maintenance of direct integration;

 

4.Participants’ reports;

 

5.Accounting for the funding and settlement of E-Pay transactions; and

 

6.Reconciliation and chargeback/dispute resolution.

 

E.Staff the Participant’s toll-free number with an Illinois-based call center
(“Illinois Help Desk”), subject to the approval of the Treasurer. With some
exceptions, all calls shall go to the Illinois Help Desk. The Illinois Help Desk
shall use a warm transfer to elevate any Participants that require additional
expertise, depending upon the issue, to the Treasurer or another call center
(“Elevated Help Desk”) (the Illinois Help Desk and Elevated Help Desk shall
collectively be, the “Help Desks”). The Elevated Help Desk may be staffed
anywhere in the United States of America. The Treasurer may identify specific
Participants who shall have direct access to the Elevated Help Desk. The
Contractor shall sufficiently staff the Help Desks from 8:00 am through 5:00 pm
(“Business Hours”), provide the staff with sufficient training regarding E-Pay
and the Services to assist Participants, and have at least one (1) supervisory
employee available to provide Participants assistance during Business Hours. The
Help Desks may utilize a voice mail service in lieu of live agents outside of
the Business Hours.

 

2.5Meetings and Training

 

A.Provide the Treasurer the following types of training:

 

1.Annual on-site training and materials that cover the Services, E-Pay
enrollment procedures, applicable industry requirements, and maintenance of
Services;

 

2.Timely information about material industry, regulatory, or technological
trends which are specifically relevant to the Services; and

 

3.Telephone or online training on E-Pay related topics and various electronic
payment industry related informational topics, as requested by the Treasurer.

 

B.Conduct on-site quarterly planning meetings in Springfield, Illinois to review
and make recommendations on the structure, organization, and strategies for
E-Pay. During such meetings, the Contractor shall provide the following:

 

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1.Summary of E-Pay performance, as detailed in the monthly performance reports;

 

2.Reports on the performance of the Help Desks, based at a minimum on the Help
Desk Performance Standards;

 

3.Training on any new industry products, legal mandates, updates, trends, or
industry requirements; and

 

4.Summary of Contractor’s provision of the Services and recommendations for
changes, if any, to the Services and/or the manner in which the Contractor
provides the Services, given the then current environment and a discussion on
the risks and benefits of any such recommendations.

 

C.Conduct an end of year in-person annual review of the Services and E-Pay
processes and provide best practice recommendations;

 

D.Conduct annual business review meetings with key Participants and the
Treasurer, as requested by the Treasurer;

 

E.Provide the Treasurer a project manager to assist in planning and execution of
a conversion plan. The conversion plan shall include the following:

 

1.A project charter that outlines the objectives for enrollment, quality
control, development, testing, integration, and communications;

 

2.A project schedule that provides key milestones;

 

3.A risk management plan, including proposed risk responses;

 

4.A list of the conversion team members and each member’s role and
responsibilities; and

 

5.A table that lists each Participant’s new MID and its old MID.

 

2.6Marketing

 

A.Assist the Treasurer in its E-Pay marketing efforts by providing expertise via
Contractor’s internal resources regarding best practices in targeting any unit
of State or local government that is not enrolled in E-Pay (“Eligible Entity”)
and growing existing relationships;

 

B.Analyze Participants’ databases to identify usage trends and marketing
opportunities; and

 

C.Facilitate a marketing segmentation analysis to better target Participants
and/or Eligible Entities. The Treasurer shall encourage Participants to
integrate with the Platform;

 

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D.Provide the Treasurer advertising and communications expertise regarding
design, creation, and dissemination of effective marketing campaigns to Eligible
Entities; and

 

E.Assist the Treasurer in the creative design of E-Pay marketing materials,
including, but no limited to, logo, websites, and flyers.

 

3.COMPENSATION AND FEES

 

3.1Participants

 

The Contractor shall charge Participants for the applicable Services in
accordance with the Cost Schedule. Notwithstanding the foregoing, the Contractor
shall charge select Participants, determined by the parties, a lower Service Fee
(“High Volume Pricing”). High Volume Pricing shall be determined by the
Contractor on a case-by-case basis by examining factors including, but not
limited to, the Participant’s End-User profile, Card Brand mix, minimum/maximum
transaction amount, the average transaction amount, and the type of payments.
High Volume Pricing is expected to range from one (1) to five (5) basis points.
The parties may mutually agree to provide additional discounts to Participants
who receive High Volume Pricing.

 

3.2Treasurer

 

The Contractor shall provide the Treasurer the following:

 

A.A monthly monetary contribution for the Treasurer to use to administer E-Pay,
and provide Participants PCI compliance services (“Administrative Fee”). The
Administrative Fee shall equal the product of ten (10) basis points multiplied
by the monthly processing volumes (excluding transaction fees) of cards
processed for all Participants but shall not exceed the product of twenty (20)
basis points multiplied by the monthly volume (excluding transaction fees) of
cards processed for Passing Participants;

 

B.Beginning October 1, 2017, a monthly fee for the Treasurer to use to market
E-Pay (“Marketing Fee”). The Marketing Fee shall equal $4166.67 per month and is
payable by the last day of the next calendar month; and

 

C.As of the Effective Date, the Settlement Bank’s monthly Account Maintenance
fee is $10. In the event that such fee is lowered, the Contractor shall provide
the Treasurer on a monthly basis the difference between $10 and the lowered fee
for each Participant that uses the Settlement Bank (e.g., if the Settlement
Bank’s fee is lowered to $8, the Contractor shall provide the Treasurer $2/mos.
per Settlement Bank Participant). The Contractor shall receive no compensation
from the Treasurer pursuant to this Agreement.

 

3.3EMV Exchange Program

 

Pursuant to Section 2.1.F.2 of this Agreement, the Contractor shall exchange
Eligible Exchange Terminals as follows:

 

A.Eligible Exchange Terminals that have been used by an Absorbing Participant
for less than one (1) year shall be exchanged at no cost to the Treasurer or the
Participant;

 

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B.Eligible Exchange Terminals that have been used by an Absorbing Participant
for one (1) year but less than two (2) years shall be exchanged with 25% of the
Purchase Credit to be paid by the Treasurer and 75% by the Contractor;

 

C.Eligible Exchange Terminals that have been used by an Absorbing Participant
for two (2) years but less than three (3) years shall be exchanged with 50% of
the Purchase Credit paid by the Treasurer and 50% by the Contractor; and

 

D.Eligible Exchange Terminals that have been used by an Absorbing Participant
for three (3) years or more shall be exchanged with 75% of the Purchase Credit
paid by the Treasurer and 25% by the Contractor.

 

The Contractor shall deduct the Treasurer’s share of the Purchase Credit, set
forth in this Section 3.3, by deducting such costs from the Administrative Fee.

 

4.REVIEW

 

The Treasurer may conduct periodic performance reviews of the Contractor, during
which its compliance with all aspects of this Agreement will be reviewed and
assessed.

 

The Treasurer shall evaluate the Customer Service Team’s performance, based on
the Customer Service Team Performance Standards, attached hereto as Exhibit D.
The Help Desks shall be evaluated, based on the Help Desk Performance Standards,
attached hereto as Exhibit E. In the event that Contractor obtains or develops
any additional method of measuring Illinois Help Desk and/or Elevated Help Desk
performance (e.g., software that calculates call wait time or call abandonment
rate), the Contractor shall give the Treasurer notice of such acquisition or
development, and the parties shall work in good faith to develop mutually
agreeable performance standards that relate to the method of measurement. The
Treasurer shall evaluate the Contractor’s electronic payment processing Services
based on the Electronic Processing Services Performance Standards, attached
hereto as Exhibit F.

 

If Contractor fails to provide Services in accordance with the applicable
performance standards, the Treasurer shall have a discussion with the Project
Manager or equivalent thereto, and Contractor shall: (a) promptly investigate
and report on the causes of such failure; (b) provide a root cause analysis as
soon as commercially practicable; and (c) take commercially reasonable actions
to prevent any recurrence of such failure. In the event that the Treasurer is
dissatisfied with the Contractor’s provision of the Services, the Treasurer
shall discuss its concerns with the Project Manager or equivalent thereto.
Should the Contractor continue to fail to meet the performance standards or fail
to address the concerns raised by the Treasurer (collectively, the “Problems”)
within thirty (30) days after the discussion with the Project Manager, the
Treasurer may request a meeting with the Contractor’s Chief Operating Officer
(“COO”) to discuss the Problems and agree upon a resolution to the Problems and
a timeframe for such resolution. If the Problems are not resolved within fifteen
(15) days after the meeting with the COO or the timeframe agreed upon by the
parties at the meeting with the COO, then the Treasurer may request a meeting
with the Chief Executive Officer to discuss the Problems and agree upon a
resolution to the Problems, a timeframe for such resolution, and penalties (if
any) should the Problems fail to be resolved within the timeframe.

 

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5.TERMINATION

 

5.1Termination without Cause

 

The Treasurer may elect to terminate this Agreement at any time upon thirty (30)
calendar days’ notice. Upon termination, the Treasurer will pay for work
satisfactorily completed prior to the date of termination as determined in a
reasonable manner.

 

5.2Termination for Cause

 

Prior to terminating this Agreement for cause for the reasons set forth below,
the non-breaching party shall issue a written warning that outlines the remedial
action necessary to bring the breaching party into conformance with this
Agreement.  If such remedial action is not completed to the satisfaction of the
non-breaching party within thirty (30) business days, a second written warning
may be issued.  If satisfactory action is not taken by the breaching party
within five (5) business days of the date of the second written warning, this
Agreement may be cancelled and the breaching party may recover any and all
damages involved, including, without limitation, with respect to the Treasurer,
damages involved with the transition to a new vendor including incidental and
consequential damages.  Failure by a party to issue a warning or cancel this
Agreement does not waive any of such party’s rights to issue subsequent
warnings.

 

In addition, the Treasurer reserves the right to reduce the fee paid to
Contractor as compensation for Services pursuant to this Agreement, if any,
during any period Contractor fails to perform with reasonable care any of its
obligations under this Agreement.

 

A.Notwithstanding any language to the contrary, this Agreement may be terminated
by the Treasurer for cause under any of the following circumstances:

 

1.Contractor fails to furnish a satisfactory performance within the time
specified;

 

2.Contractor fails to perform any provision of this Agreement, or so fails to
make progress as to endanger performance of this Agreement in accordance with
its terms;

 

3.Any Services are rejected and are not promptly corrected by Contractor, or
repeatedly rejected even though Contractor offers to correct Services promptly;

 

4.There is sufficient evidence to show that fraud, collusion, conspiracy, or
other unlawful means obtained this Agreement;

 

5.Contractor is guilty of misrepresentation in connection with another contract
for services to the State;

 

6.Contractor is adjudged bankrupt or enters into a general assignment for the
benefit of their creditors or receivership due to insolvency;

 

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7.Contractor disregards laws and ordinances, rules, or instructions of a
contracting officer or acts in violation of any provision of this Agreement or
this part, or this Agreement conflicts with any statutory or constitutional
provision of the State of Illinois or of the United States; or

 

8.Any other breach of contract or other unlawful act by Contractor occurs.

 

B.Notwithstanding any language to the contrary, this Agreement may be terminated
by the Contractor for cause under any of the following circumstances:

 

1.Treasurer disregards laws and ordinances, rules, or acts in violation of any
provision of this Agreement or this part, or this Agreement conflicts with any
statutory or constitutional provision of the State of Illinois or of the United
States; or

 

2.Any other material breach of contract or other unlawful act by Treasurer
occurs.

 

6.WORK PRODUCT

 

6.1Ownership of Work Product.

 

Except as otherwise agreed to in writing, all work product including, but not
limited to, documents, reports, data, information, and ideas specially produced,
developed or designed by the Contractor under this Agreement for the Treasurer,
whether preliminary or final, will become and remain the property of the
Treasurer, including any copyright or service marks Contractor develops on
behalf of the Treasurer. The Treasurer shall have the right to use all such work
product without restriction or limitation and without further compensation to
Contractor.

 

6.2Return of Work Product.

 

Within thirty (30) days after expiration or termination of this Agreement, the
Contractor shall deliver to Treasurer, or to a third party, if so instructed by
the Treasurer, all work product in Contractor’s possession in the performance of
this Agreement. If requested by the Treasurer, the Contractor shall certify in
writing that all such work product has been delivered to the Treasurer.

 

7.SUBCONTRACTING

 

The Contractor may not utilize the services of a subcontractor for amounts that
exceed $50,000 to fulfill its obligations under this Agreement without prior
approval of the Treasurer. Subcontractors will be required to complete the State
Certifications and Disclosure Forms.

 

8.State Furnished Property

 

Contractor shall be responsible for the security, protection, and timely return
of all property furnished by the Treasurer or any of its vendors, if any,
including but not limited to, research materials, documents, data, photographs,
drawings, or plans.

 

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9.INDEMNIFICATION AND LIABILITY

 

9.1Indemnification

 

Contractor shall indemnify and hold the Treasurer harmless from and against any
and all third-party claims, including but not limited to, attorneys’ fees and
losses due to breach of the Agreement, the negligent acts or omissions or
willful misconduct of Contractor, its employees, or agents. Contractor has a
duty to select, with due diligence, all other entities that shall be necessary
to implement the Agreement. Contractor shall establish and enforce reasonable
procedures to assure the Treasurer of the performance by all other entities of
the services necessary to implement this Agreement.

 

9.2Liability

 

The Treasurer assumes no liability for the acts or omissions of the Contractor.
This liability rests solely with the Contractor. The Contractor shall be liable
to the Treasurer for actual and compensatory damages that are available to the
Treasurer in law or remedies in equity.

 

9.3Limitation of Liability

 

EXCEPT AS PROVIDED IN SECTIONS 5 AND 9, INCLUDING ANY SUBSECTIONS THERETO, OF
THIS AGREEMENT, NEITHER PARTY WILL BE LIABLE, TO THE EXTENT PERMITTED BY LAW,
FOR ANY LOSS OF BUSINESS, LOSS OF USE OR OF DATA, INTERRUPTION OF BUSINESS, LOST
PROFITS OR GOODWILL, OR OTHER INDIRECT, SPECIAL, INCIDENTAL, EXEMPLARY OR
CONSEQUENTIAL DAMAGES OF ANY KIND ARISING OUT OF THIS AGREEMENT, EVEN IF IT HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS, AND NOTWITHSTANDING ANY FAILURE OF
ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. With the exception of Sections 5 and 9,
including any subsections thereto, of this Agreement, under no circumstances
shall either party’s total and aggregate liability of all kinds arising out of
or related to this Agreement, regardless of the forum and regardless of whether
any action or claim is based on contract, tort or otherwise, exceed at any point
$6,000,000. The foregoing limitation in this Section is cumulative, with all
payments for claims or damages being aggregated to determine satisfaction of the
limit, and the existence of one or more claims will not enlarge that limit. Each
Party acknowledges that, to the extent permitted by law, these limitations will
apply notwithstanding any failure of essential purpose of any limited remedy.

 

10.NON-COMPETE

 

Throughout the term of this Agreement, Contractor shall not enter into any new
contracts to provide any of the Services with any unit of State or local
government in Illinois. Throughout the term of this Agreement and for one (1)
year afterwards, Contractor shall not solicit any unit of State or local
government in Illinois or enter into a contract with a current or former
Participant to provide the Services. Notwithstanding the foregoing, the
Treasurer may grant a waiver, permitting the Contractor to enter into a contract
with a current or former Participant, if the Contractor provides the Participant
pricing that is a minimum of ten (10) basis points higher than the pricing the
Participant would receive with E-Pay pursuant to this Agreement. In the event
that Contractor has an existing contract to provide any of the Services with a
unit of State or local government in Illinois at the time this Agreement is
executed, Contractor shall provide the Treasurer a list of such contracts and
the names of the units of State or local government that are parties to such
contracts attached hereto as Exhibit G (“Exempt List”). Notwithstanding anything
to the contrary in this Section, Contractor may extend existing contracts and
enter into new contracts with any unit of State or local government in Illinois
that is on the Exempt List.

 

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11.INDEPENDENT STATUS

 

The Contractor is an independent contractor to the Treasurer. This Agreement
does not create the relationship of agent, servant, employee, partnership, joint
venture, or association between Contractor and the Treasurer. Neither the
Contractor nor any persons employed by the Contractor may represent themselves
as employees of the Treasurer or the State of Illinois.

 

12.LAWS OF ILLINOIS

 

This Agreement shall be governed by and construed according to the laws of the
State of Illinois, without regard to conflicts of law principles. Any action by
Contractor against the Treasurer can only be brought in the Illinois Court of
Claims.

 

13.DISASTER RECOVERY AND BACKUP FACILITIES

 

Contractor shall prepare and test a plan for recovery of financial transactions
and related information in the event of a disaster or system failure. 
Contractor shall furnish a copy of the plan, test results, and the results of
the annual audit of the disaster recovery plan to the Treasurer.

 

14.NOTICES

 

All notices required under the terms of this Agreement shall be in writing and
shall be deemed effective upon receipt when delivered personally, sent by
facsimile or e-mail, or seven (7) business days after being sent by registered
or certified mail, postage prepaid, return receipt requested at the address
listed below, or at such other address or to such other parties as may be
specified in writing by the parties hereto:

 

If to the Treasurer: If to Contractor: Johanna Perez Christopher F. Battel
Director of E-Pay and Illinois Funds Chief Operating Officer Operations JetPay
Payment Services, FL, LLC Office of the Illinois State Treasurer 316 S. Baylen
Street, Suite 590 100 West Randolph St., Suite 15-600 Pensacola, FL 32502
Chicago, IL 60601 chris.battel@jetpay.com jperez@illinoistreasurer.gov

 

16.CONFIDENTIALITY

 

This Section shall survive the termination of this Agreement.

 

16.1 Confidential Information

 

Each party shall be prohibited from using or disclosing information received in
the course of fulfilling its obligations pursuant to the Agreement
(“Confidential Information”), except in the performance of its internal
responsibilities and normal functions. Confidential Information includes all
information but the following: (a) information already known or independently
developed by the recipient; (b) information required to be released by law; (c)
information in the public domain through no wrongful act of the recipient; and
(d) information received by the recipient from a third party who was free to
disclose it. In addition, Contractor must clearly mark all of its Confidential
Information with “CONFIDENTIAL INFORMATION” in order for it to be deemed
Confidential Information.

 

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16.2Use of Confidential Information by Employees and Agents of Contractor.

 

The requirement of confidentiality under this Agreement also applies to the
employees and agents of the Contractor and Treasurer. Each party shall use its
best efforts to ensure that its employees and agents adhere to the
confidentiality requirements set forth herein. Use by and disclosure to
employees and agents of Confidential Information to the extent necessary to
carry out the terms and purposes of this Agreement is acceptable.

 

16.3Protection of Confidential Information.

 

The Contractor represents, warrants, and covenants that it has implemented and
will maintain an information security program reasonably designed to protect
Confidential Information, including customer information, which program includes
administrative, technical, and physical safeguards to ensure the security and
confidentiality of all customer information, to protect against anticipated
threats or hazards to the security or integrity of such customer information,
and to protect against unauthorized access to or use of such customer
information.

 

16.4Privacy Policy

 

Contractor will comply with any applicable federal or state laws or regulations,
as well, to the extent commercially reasonable, any privacy policy developed by
the Treasurer. Contractor further agrees to establish, maintain, and comply with
a privacy policy with respect to the Services that meets the requirements of
applicable law.

 

16.5Program Lists

 

The Contractor specifically agrees that it shall not, and shall cause its
subcontractors and affiliates not to, sell, provide, or otherwise disclose
information from, any E-Pay and/or Participant list to any third party, unless
otherwise directed to or approved by the Treasurer or required by applicable
law.

 

17.RIGHT TO AUDIT BOOKS AND RECORDS

 

The Contractor and any subcontractor shall maintain, for a minimum of five (5)
years after the termination of this Agreement, adequate books, records,
communications, and supporting documents related to this Agreement in each case
to the extent necessary to support amounts charged to the Treasurer pursuant to
this Agreement. These documents shall be available for review and audit by the
Treasurer and the Illinois State Auditor General. The Contractor agrees to
cooperate fully with any audit conducted by the Auditor General or the Treasurer
and to provide full access to all relevant materials. Failure to maintain the
books, records, and supporting documents required by this section shall
establish a presumption in favor of the Treasurer for the recovery of any funds
paid by the Treasurer under the underlying agreement for which adequate books,
records, and supporting documentation are not available to support their
purported disbursement.

 

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18.ACCESS TO INFORMATION

 

Upon request, the Contractor shall provide the Treasurer access to all files,
records, participant email addresses, documents, and data pertaining to E-Pay
that are in its possession and control regardless of how that information is
stored.  The information shall be provided in a form acceptable to the
Treasurer.

 

During the term of this Agreement, the Contractor shall retain copies of each
Participant’s contracts and the documents related to each Participant’s
application, enrollment, and maintenance (collectively, the “Participant
Documents”). Notwithstanding the foregoing, in the event that a Participant
terminates E-Pay during the term of this Agreement, the Contractor shall retain
such Participant’s Participant Documents until the earlier of a) three (3) years
after the Participant’s termination of E-Pay or b) the termination date of this
Agreement. Upon termination of this Agreement, the Contractor shall
electronically transfer to the Treasurer all of the Participant Documents in a
format to be requested by the Treasurer.

 

19.MOST FAVORABLE TERMS

 

If more favorable terms are granted by the Contractor to any similarly sized
(i.e., processing amount, number of Participants, or number of MIDs) E-Pay
provider in a contemporaneous agreement under the same or similar financial
terms and circumstances for comparable services or to an entity on the Exempt
List, the more favorable terms will be applicable under this Agreement.

 

20.ASSIGNMENT

 

Each term and provision of this Agreement is binding and enforceable against and
inures to the benefit of any successors of the Treasurer and any successors of
Contractor, but neither this Agreement nor any of the rights, interests, or
obligations is assignable without the prior written consent of the other party.
Any attempt by Contractor to transfer or assign any rights or obligations
related to the provision of the Services, except to an affiliate or in
connection with or to any successor in interest by acquisition, merger,
operation of law, or otherwise, without the prior written consent of the
Treasurer, shall render this Agreement voidable by the Treasurer. The Treasurer
may unilaterally bind any successor of the provider to the terms and conditions
of any Agreement between the parties.

 

21.INTERNAL CONTROLS

 

If applicable, the Contractor shall annually provide the Treasurer with a copy
of the Annual Report or Form 10-K of its parent holding company and its most
recent SSAE 16 report, which will include the attestation of the company’s
independent registered accounting firm, regarding the company’s internal control
over financial reporting.

 

22.DISCLOSURES/STATE CERTIFICATIONS

 

This Agreement incorporates Contractor’s fully executed Disclosures and State
Certifications, a copy of which is attached hereto as Exhibit H.

 

23.WAIVER; Interpretation

 

Waiver of breach of any provision of this Agreement on any occasion will not be
deemed a waiver of that provision or of any other provision on any other
occasion, nor will such waiver affect the right of either party to terminate
this Agreement. If any provision in this Agreement is held to be invalid or
unenforceable for any reason, such provision will, to the extent of such
invalidity or unenforceability, be severed, but without in any way affecting the
remainder of such provision or any other clause in this Agreement, and the
provision will be replaced with a provision which, to the extent permitted by
applicable law, achieves the purposes intended by the invalid or unenforceable
provision.

 

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24.Execution in Counterparts

 

This Agreement may be executed simultaneously in two or more counterparts, each
of which shall be deemed an original, but all of which shall constitute one and
the same instrument. The parties agree that a fax or electronically transmitted
valid and authorized original signature shall be deemed an original provided the
original copies are promptly delivered.

 

25.ENTIRE AGREEMENT

 

Any exhibits attached hereto are hereby incorporated herein. This Agreement,
including any exhibits, contains the entire agreement of the parties. This
Agreement may be changed only by a written agreement signed by both parties.

 

[Signatures on the next page.]

 

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IN WITNESS WHEREOF, the parties have caused this E-Pay Master Agreement to be
executed by their duly authorized officers as of the date first above written.

  

OFFICE OF THE ILLINOIS STATE TREASURER   JETPAY PAYMENT SERVICES, FL, LLC      
/s/ Michael W. Frerichs    /s/ Diane Faro Michael W. Frerichs   Diane Faro
Treasurer   Chief Executive Officer

 

By: /s/ Jay Rowell     Jay Rowell, Deputy Treasurer or     Justin Cajindos,
Chief of Staff  

 

Date: 1/31/17   Date: 1/31/17

 

/s/ Rodrigo Garcia     Rodrigo Garcia     Chief Financial Officer    

 

Date: 1/31/17  

 

  Reviewed for Legal Sufficiency

 

  Chief Procurement Officer

 

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Exhibit A

 

Cost Schedule

 

Passing Participant Processing Fees       Processing Fee Use E-Pay's Settlement
Bank 2.25% minimum of $1.00 * Use Participant's Own Settlement Bank 2.3% minimum
of $1.00 * *Processing Fee includes the cost of any Supported Device, selected
by the Participant, which shall be provided based upon Participant volume:  $1 =
1 Supported Device and any additional Supported Device per $300,000 in
processing volume.  Notwithstanding the foregoing, the Contractor reserves the
right to offer Participants free Supported Devices, regardless of processing
volume.

 

Absorbing Participant Fees       Fees with no Supported Device (Participant
purchases or rents) Fees with Free Supported Device** Use E-Pay's Settlement
Bank Cost* plus 3 basis points and $0.03 per transaction Cost* plus 8 basis
points and $0.03 per transaction Use Participant's Own Settlement Bank Cost*
plus 3 basis points and $0.03 per transaction. $15/mos. Cost* plus 8 basis
points and $0.03 per transaction.  $15/mos. *Cost = interchange rates, dues,
assessments, and any other pass through fees from the Card
Brands.  **Participants may pick any Supported Device.  Contractor shall provide
Supported Devices based upon the Participant's volume:  $1 = 1 Suppported Device
and any additional Supported Device per $300,000 in processing
volume.  Notwithstanding the foregoing, the Contractor reserves the right to
offer Participants free Supported Devices, regardless of processing volume.

 

E-Checks       Passing Participant Absorbing Participant E-check $0.50 per
transaction $0.08 per transaction E-check with Verification $0.75 per
transaction $0.33 per transaction

 

Chargeback and Return Fees       Fee Chargeback fee when EMV device utilized
$5.00 per chargeback, fee paid by Participant Chargeback fee when non-EMV device
utilized $15.00 per chargeback, fee paid by Participant E-check return fee
$30.00 charged to End-User

 

Supported Devices       Purchase Monthly Rental Fee EMV swipe devices     Pax
S300 $300 $15 Pax S500 $300 $15 Verifone VX520 $300 $15 Verifone VX520 with
VX805 $500 $25 Verifone VX680 $500 $25 Check scanner $400 per device $15 per
device POS kiosk $500 per device $15 per device

 

 

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Exhibit B

 

Supported Devices List

 

1.Pax S300;

 

2.Pax S500;

 

3.Verifone VX520;

 

4.Verifone VX520 with VX805;

 

5.Verifone VX680;

 

6.Check scanner; and

 

7.POS kiosk.

 

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Exhibit C

 

Recognized Visa Processors

 

1.Chase Paymentech;

 

2.Elavon;

 

3.First American Payment Systems;

 

4.First Data;

 

5.Global Payments;

 

6.Merchant e-Solutions;

 

7.Moneris;

 

8.TSYS;

 

9.Vantiv; and

 

10.WorldPay (North America).

 

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Exhibit D

 

Customer Service Team Performance Standards

 

The following are the performance standards for the Customer Service Team:

 

1.The Customer Service Team shall respond to the Treasurer’s phone calls within
one (1) business day;

 

2.Respond to the Treasurer’s e-mails within two (2) business days of receipt of
the e-mail;

 

3.Provide notification of planned system maintenance a minimum of three (3)
business days prior to maintenance;

 

4.Provide merchant IDs and enrollment verification documentation within three
(3) business days of application approval;

 

5.Provide the Treasurer electronically, in a format to be requested by the
Treasurer, the Participant Documents for a Participant at the time of its
enrollment;

 

6.Acknowledge Contractor’s Service errors and respond within four (4) hours of
notification;

 

7.Remediate known errors related to payment processing and use best efforts to
remediate such errors within twenty-four (24) hours of notification; and

 

8.Provide the Treasurer a formal impact statement and list of affected
Participants within two (2) business days of error resolution.

 

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Exhibit E

 

Help Desk Performance Standards

 

In addition to the other performance standards in this Agreement, the following
are the performance standards for the Help Desks:

 

1.During Business Hours, the Help Desks shall resolve 95% of issues presented by
Participant phone calls within twenty-four (24) hours of receipt; and

 

2.During Business Hours, the Help Desks shall resolve 98% of issues presented by
Participant phone calls within forty-eight (48) hours of receipt.

 

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Exhibit F

 

Electronic Processing Services Performance Standards

The following are the electronic payment processing performance standards for
the Contractor:

 

1.Implement at least 95% of all new enrollments accurately (i.e., no trouble
shooting needed);

 

2.Implement at least 95% of all change of information requests accurately (i.e.,
no trouble shooting needed);

 

3.Bring Services live for each Participant within one (1) business day of a n
go-live date that is mutually agreed upon by the parties and the Participant;

 

4.Maintain 99.9% uptime on all Services;

 

5.Fund all payments within three (3) business days; and

 

6.Take the following steps in response to Service interruptions:

 

a.Communicate any Service disruptions to the Treasurer and Participants,
including the manner in which the disruption will be remedied and a projected
timeframe for its resolution, a maximum of twelve (12) hours after the
disruption.

 

b.Remediate known errors related to payment processing and use best efforts to
remediate such errors within twenty-four (24) hours of notification;

 

c.Provide Participants a formal impact statement within two (2) business days of
error resolution; and

 

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Exhibit G

 

Exempt List

 

1.Lake Egypt Water & Wastewater District;

 

2.Village of Olympia Fields;

 

3.Village of Richton Park;

 

4.Village of Westmont;

 

5.Lake County Public Works;

 

6.City Water, Light and Power; and

 

8.City of Springfield.

 

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