Exhibit 10.54
[***] — Indicates confidential information. Confidential Treatment requested.
Portion omitted filed separately with the Securities and Exchange Commission.
AMERICAN STATE BANK
SPONSORSHIP AGREEMENT
This American State Bank Sponsorship Agreement (“Agreement”) is made to be
effective as of this 11th day of February, 2011 (the “Effective Date”) by and
between Global Cash Access, Inc., a Delaware corporation with its principal
place of business located at 3525 E. Post Road, Suite 120, Las Vegas, NV 89120
(“Company”), and American State Bank a Bank organized under the laws of the
State of Texas with its principal place of business located at 1401 Ave Q,
Lubbock, Texas (“Bank”) (the Company and the Bank are herein referred to
individually as a “Party” and together as the “Parties”).
RECITALS
WHEREAS, Company and certain of its Affiliates provide Payment Services to their
respective Customers predominantly at gaming establishments and certain other
Third Parties as set forth herein;
WHEREAS, in order for Company and its Affiliates to provide such Payment
Services and to authorize the Terminals that are used in connection with such
Payment Services to be connected to the Networks, Company and/or the relevant
Terminals must be sponsored by a Network member;
WHEREAS, Company warrants that it is ineligible to become a member of, or to
participate in, the Networks;
WHEREAS, each of the Networks permits entities which are not eligible for
membership to connect Terminals to their respective systems, provided a Network
member agrees to assume certain sponsorship responsibilities to the Network in
connection with the sponsored Terminals and the Payments Services; and
WHEREAS, the Bank is a member of various Networks or has agreed to become a
member of the Networks for the purpose of sponsoring the Company, its Affiliates
and/or the Terminals, as applicable, to enable the Company to connect Terminals
to the Networks;
NOW, THEREFORE, in consideration of the mutual covenants and premises set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:
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 applicable equally to
both the singular and plural forms of the terms defined):

1.1   “Acquirer” means a Member who accepts Transactions and sends them to a
Network for processing.

1.2   “ACH” means an automated clearinghouse system operated by a Federal
Reserve Bank.

1.3   “Affiliate” means, with respect to either Party, a Person which directly
or indirectly owns or controls, is owned or controlled by, or is under common
ownership with Company or the Bank, as applicable.

1.4   “Agent” means any contractor, including an ISO, TPS, ESO or Processor
engaged by the Bank to provide services or to act on its behalf in connection
with a Terminal operated under this Agreement.

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1.5   “Application” means the written application to sponsor Company and its
Affiliates as an ISO in a format as required by Bank which is submitted by
Company to Bank and which, among other topics, provides names, addresses,
telephone numbers, financial information and other information regarding the
Company and its executive officers, directors any other necessary Persons
affiliated with Company.

1.6   “ATM Operator” means a Person other than the Bank that owns an ATM or the
cash placed in the ATM and that is provided Network access by an Independent
Sales Organization (ISO) that is registered as an Agent by the Bank and more
fully defined by Plus System, Inc. Bylaws and Operating Regulations, Appendix A:
Definitions. Dated January 15, 2010.

1.7   “ATM Operator Agreement” means the written agreement between the ATM
Operator and the Bank which among other things addresses the functions to be
performed by the ATM Operator and which must require that the ATM Operator
comply at all times with the Rules and Regulations.

1.8   “ATM Services” means transaction acquiring technology and processing
services provided through contractual agreements held by the Company.

1.9   “Automated Teller Machine” or “ATM” means any electronic device that meets
Network requirements and when activated by a Card, is capable of initiating and
performing an ATM Transaction.

1.10   “ATM Transactions” means any of the following functions attempted by a
Cardholder at a Terminal:

  (a)   “Withdrawal” means the dispensing of cash or cash equivalent by a
Terminal to a Cardholder from a Cardholder’s depository account;

  (b)   “Inquiry” means an inquiry by a Cardholder as to the balance of the
Cardholder’s account;

  (c)   “Decline” means the attempted transaction was declined due to a variety
of reasons including but not limited to; incorrect account or PIN number, Card
not valid, insufficient funds, or the machine or Processor is down;

  (d)   “Transfer” means a Cardholder transfers funds from one of the
Cardholder’s accounts to another account of that Cardholder;

  (e)   Any Transaction that has been approved by a Network and Bank that is a
modification, enhancement or substantially similar to any of the transactions
set forth in subsections (a)-(d) of this Section 1.9, including, without
limitation, dispensing of cash equivalents such as any ticket or other similar
disbursement that has been approved by a Network as part of Company’s QuikTicket
service; or

  (f)   “Quasi Cash” as defined in 1.48.

1.11   “Authorization” means the electronic confirmation from the financial
institution that issued the Card.

1.12   “Bank Group” has the meaning given that term in Section 6.1(c).

1.13   “By-Laws and Operating Rules” mean the By-Laws, Operating Rules and
Operating Regulations of the Networks, as amended from time to time.

1.14   “Card” means a credit card, debit card, bank card or other card issued by
an Issuer who is a Member of a Network and which provides access through the use
of a Terminal to one or more accounts with the Issuer.

1.15   “Cardholder” means (i) the Person who maintains or is authorized to
access an account by the use of a Card (and if such account is maintained in the
name, or may be accessed by, more than one Person, all of such persons), and
(ii) uses a Card to originate a Transaction with the account.

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1.16   “Chargeback” means an electronic debit to a Settlement initiated by a
Cardholder dispute.

1.17   “Company Group” has the meaning given that term in Section 6.1(e).

1.18   “Customer” means a Person to which the Company or its Affiliates provides
Payment Services (other than ATM Services) and that may have one or more
Terminals located on its premises which participate in the Networks and with
respect to which the Bank provides sponsorship services pursuant to this
Agreement.

1.19   “Designated Processor” means a Processor that is certified by a Network
and has direct connectivity to the Network and the Parties acknowledge that TSYS
Acquiring Solutions, LLC is a Designated Processor as of the Effective Date. The
Designated Processor under this Agreement for all Processing Services may vary
and may not be changed without the prior written consent of both Bank and
Company, and Bank’s consent shall not be unreasonably be withheld.

1.20   “Encryption and Support Organization” or “ESO” means an entity that is
(i) loading software into a Terminal, (ii) loading or injecting encryption keys
into Terminals, or (iii) help desk support which includes re-programming of
Terminal software.

1.21   “Fees” mean the Switch Fee and Interchange Fee as established from time
to time by the Networks and the Surcharge Fee allowed by the Networks.

1.22   “Gaming Activity” means the placing of a bet or wager in accordance with
applicable federal, state, tribal or local laws or regulations, either on the
gaming floor of a Gaming Establishment, via the Internet or any other legally
permissible communications medium.

1.23   “Gaming Establishment” means traditional land-based casinos or gaming
establishments that operate on Native American land, riverboats and cruise
ships, or at restaurants or bars, pari-mutuel wagering facilities and card rooms
and any future gaming venues.

1.24   “Independent Sales Organizations” or “ISO” means a Person or entity that
is registered/sponsored with respect to a Network by a member of such Network to
deploy and/or service Terminals which are used to conduct Transactions across
such Network.

1.25   “Information” is defined in Section 6.2.

1.26   “Issuer” means a member of a Network, including Bank, who issues a Card
to a Cardholder for use in performing Transactions.

1.27   “Item” means the electronic messages that communicate and effects a
Transaction between an Issuer and its Cardholder through the use of a Terminal.

1.28   “Interchange” means the exchange of clearing records between Members of
the Networks.

1.29   “Interchange Fee” means the fees paid between the Acquirer and the Issuer
for Transactions as established by the Networks from time to time.

1.30   “Mark” means the service marks and trademarks of Networks and Bank,
including, but not limited to, the name and any other distinctive marks or logos
which identify the Network or Bank.

1.31   “Membership or Member” means the membership in Networks and licensing
rights thereto, obtained by financial institutions.

1.32   “Merchant Casino” means a Customer that advances the cash and initiates
the Settlement of the Quasi Cash Transaction pursuant to the Authorization.

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1.33   “Merchant Casino Fraud” means the wrongful act or omission of the
Merchant Casino including wrongful acts and omissions of anyone acting for and
on behalf of the Merchant Casino which results in a loss, claim or expense by
Bank related to or arising out of the Quasi Cash Transactions authorized by this
Agreement. The term Merchant Casino Fraud specifically includes a violation of
Rules or Regulations such as violations of Reg E or of the USA Patriot Act and
any illegal activity, unauthorized transactions, or misuse or abuse of the Quasi
Cash Transaction, including fraud.

1.34   “Negotiable Instrument” means a receipt, document or instrument (whether
in written or electronic form) such as a check or money order, which is used for
purposes of completing a Quasi Cash Transactions in accordance with the Rules.

1.35   “Network” means MasterCard, Visa, Cirrus, Plus, Pulse, NYCE, STAR and
other electronic fund transfer systems for transmitting Items and other
electronic messages and settling Transactions between Participants and includes,
but is not limited to, a Switch, Terminals, Cards, related computer hardware and
software, telecommunications facilities and equipment, Rules, technical
specifications, logos, and Marks.

1.36   “Participant” means the parties involved in transmitting the Items and
settling the Transactions, including the Issuer, Acquirer, Processor and
Network.

1.37   “Payment Services” means (i) deployment, operating and/or ownership of
Terminals, and/or (ii) acquiring, processing, and/or authorizing Transactions on
behalf of Customers, and/or (iii) providing similar or related electronic
payment services that requires sponsorship into one or more Networks.

1.38   “PCI-DSS” means Payment Card Industry Data Security Standards endorsed by
MasterCard and Visa as audit criteria for SDP (Site Data Protection) and CISP
(Cardholder Information Security Program).

1.39   “Person” means any individual, partnership, corporation, limited
liability company, trust or other entity.

1.40   “Personal Information” means information of or about a Person that is
“non-public personal information” under 15 U.S.C. Section 6809(4) and in the
Regulations which correspond thereto that have been adopted by the relevant
regulatory authorities.

1.41   “PIN” means the confidential personal identification number used by a
Cardholder to authenticate the use of a Card to initiate certain types of
Transactions.

1.42   “PIN Security and Encryption Keys Review” means a review which is
conducted from time to time to determine if the Company is following the
policies and procedures established by the Bank and by the Networks to ensure
security and control is maintained in any access device that manages cardholder
PINs and encryption keys.

1.43   “POS Device” “POS Kiosk” means a Network compliant Card Authorization
device capable of transmitting encrypted Cardholder information to the
Card-issuing bank for the purpose of obtaining approval for a requested amount
to be distributed to the Cardholder by a Customer.

1.44   “Privacy Regulations” mean Title V of the Graham-Leach-Bliley Act 15 USC
Section 6801 et seq and the Privacy Regulations adopted by the relevant
Regulatory Authorities.

1.45   “Processor” means an entity that provides Processing Services for
Transactions covered under this Agreement as a Designated Processor or as a
Third Party Processor.

1.46   “Processing Services” means those services which are necessary and
required to accept or originate a Transaction to or from a Network in accordance
with the Rules, including without limitation, Transaction processing,
Settlement, Network access, and support.

1.47   “Quasi Cash Processor” means the entity designated by Company and
acceptable to Bank, to perform the withdrawal or deposit of funds from the
accounts of the Cardholders at Visa, and MasterCard member financial
institutions in conjunction with Quasi Cash Transactions and the transmission of
such funds to the person or entities entitled thereto.

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1.48   “Quasi Cash Transaction” means a Transaction whereby the Cardholder uses
a Card at a Terminal, POS Kiosk or directly with the cashier at the Merchant
Casino to obtain an Authorization and then uses the Authorization to permit a
Merchant Casino to generate a Negotiable Instrument that may be cashed, followed
by Settlement of the Transaction per the Rules of MasterCard, Visa or any
Network where the Bank is a Member and allows such Quasi Cash Transactions.

1.49   “Regulations” mean the federal and state statutes and regulations,
including Regulation E and Regulation Z, and the policies and pronouncements of
any Regulatory Authority, as the same may be amended or supplemented from time
to time which are applicable to this Agreement and the Transactions and/or other
activities under this Agreement.

1.50   “Regulatory Authority” means, as the context requires, the Office of the
Comptroller of Currency, the Federal Deposit Insurance Corporation, the Federal
Reserve Board, Texas State Banking Department and any other federal or state
agency having jurisdiction over Bank.

1.51   “Rules” means the Operating Rules, Regulations, By-Laws and other written
documents which are adopted and amended from time to time by the Networks and
which set forth the rights and obligations of Members and other Participants and
which otherwise govern the processing of the Items and settling of the
Transactions by the Networks.

1.52   “Settlement” means the movement and reconciliation of funds between the
Participants that result in the withdrawal or deposit of funds from the account
of the Cardholder with the Issuer.

1.53   “Surcharge Fee” means a fee deducted from a Cardholders account by an
Acquirer or Acquirer Processor for a Transaction initiated at a Terminal.

1.54   “Switch” means the routing of the electronic information generated by a
Transaction through the Network systems.

1.55   “Terminal” means an ATM, POS Device or other machine with the capability
to accept Cards for the purpose of dispensing cash, or engaging in other types
of transactions agreed to in writing by the Parties and in compliance with all
applicable Rules.

1.56   “TG-3” (reclassified as a Technical Report, TR-39) means Technical
Guideline, 3rd version of the ANSI.X9 Financial Industry Standards PIN and
Security Review to manage key components.

1.57   “Third Party” means a Third Party Sales Representative, Encryption
Service Organization (ESO), Third Party Processor, Third Party Servicer,
merchant, investor, or any other Person or entity (other than Company) who
places, sells, invests in, provides locations, provides maintenance services,
encryption services and/or cash services, audits or otherwise receives income by
reason of any Terminal operated under this Agreement.

1.58   “Third Party Processor” or “TPP” means an entity other than Company who
provides Processing Services for Transactions under this Agreement and does not
have direct connection to Networks that require such TPP Agreements.

1.59   “Third Party Servicer” or “TPS” means an entity that is not a Member of a
Network but provides services related to the deployment of Terminals under this
Agreement such as: transaction processing, data capture, other administrative
functions such as chargeback processing, risk security reporting and customer
service.

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1.60   “Third Party Sales Representative (TPSR)” means each Person or entity not
directly employed by the Company that acts as a sales representative for and on
behalf of the Company in the marketing, sale and placement of Terminals for the
conduct of Terminal Transactions under this Agreement.

1.61   “Transaction(s)” means one or more transactions that are initiated by a
Cardholder through the use of a Card at a Terminal, or such other transaction
types approved by the Parties in writing, including but not limited to, cash
withdrawals or disbursements, balance inquiries, or transactions involving the
sale of a Negotiable Instrument in accordance with applicable Rules and
Regulations.

ARTICLE II — DUTIES OF COMPANY
SECTION 2.1 — Merchant Agreement
Concurrent with the execution of this Agreement, the Parties have executed a
Merchant Card Processing Agreement in substantially the form attached hereto as
Exhibit 1(the “Merchant Agreement”). If any Network changes or clarifies rules
concerning any requirement that the Bank enter into an agreement in a form
identical or similar to the Merchant Agreement directly with any Customer,
Company and the Bank will work together in good faith to cause such Customer to
enter into all required agreements and otherwise comply with such Rule changes
or clarifications.
SECTION 2.2 — Deployment of Terminals
Company, Cash Systems, Inc., a wholly owned subsidiary of Company and any other
approved Affiliates of Company may install and deploy Terminals in retail and
other business establishments. Except with respect to Terminals that are subject
to ATM Services, the contract for the placement of any Terminal(s) deployed
under this Agreement must be in the name of the Company or such approved
Affiliate of Company. Except with respect to Terminals that are subject to ATM
Services, the Company (or such approved Affiliate of Company) may not contract
with any Third Party to place Terminals subject to this Agreement under any
other name but the name of Company or such Approved Affiliate. The Company will
provide or cause to be provided to the Bank at the end of each quarter an
electronic file containing specified data required by each Network on each
Terminal in operation.
SECTION 2.3 — Equipment Ownership
Company covenants, represents and warrants to Bank that during the continuation
of this Agreement:
(a) That an ATM Operator Agreement (in a form mutually agreed upon by Bank and
Company) will exist in full force and effect at all times with each Person who
owns, operates or leases an ATM or owns the cash placed in an ATM deployed under
this Agreement; provided that Bank acknowledges and agrees with respect to those
existing Customers who do not have an ATM Operator Agreement in place as of the
Effective Date, the Parties will mutually agree upon a remediation plan with
respect to such affected Customers with the understanding that the Networks
could override such remediation plan. The following is applicable to each ATM
Operator Agreement:

  •   Company shall monitor ATM Operators and ensure each are in compliance with
all of the terms and provisions of the ATM Operator Agreement;

  •   Company shall notify Bank promptly upon acquiring knowledge of (i) each
potential or threatened claim or liability against Bank by any Person whatsoever
based upon or arising out of an ATM Operator Agreement; and (ii) each suspected,
threatened or possible violation of any Rule or Regulation by an ATM Operator.

(b) That it will maintain or obtain (and furnish to Bank upon request) each ATM
Operator Agreement and all due diligence information that is required from time
to time by the Bank, each Network and each Regulatory Authority for each ATM
Operator.
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(c) That it will not activate any newly installed ATMs before all of the
conditions and requirements of the preceding subsections 2.3(a), and (b) have
been satisfied.
(d) Company agrees to notify Bank promptly if any sponsored ATM has a change in
ownership.
SECTION 2.4 — Terminal Installation, Operation, Maintenance and Repair
(a) Company is responsible for installation, maintenance and repair of each
Terminal including electrical, and for communication line hook-up in compliance
with the equipment manufacturer specifications and, the Rules and Regulations
including signage at each location. Company shall be responsible for the
security of all Information and Personal Information, including security
compliance by all Third Parties including those who provide cash services and
maintenance services to the Terminals.
(b) Company agrees to comply with all applicable Rules with respect to
Cardholder account information, including those Rules relating to the storage,
access and use of such Cardholder account information.
(c) Company agrees to conduct all activities in compliance with the Rules and
Regulations applicable to it and to follow Company policies and procedures that
have been implemented at all times during the continuation of this Agreement as
required by such Rules and Regulations.
(d) Company will complete an on-site inspection of each ATM that is newly
installed to ensure the ATM is located in the type of facility as disclosed on
the database report and the business has the proper licenses and permits to
operate the ATM in the city, county and state, where it is located.
SECTION 2.5 — Network Registration
Company shall complete:
(a) The ISO Application in a form mutually agreed upon by Bank and Company and
provide Bank with all information as reasonably required by the Bank and
Networks during the continuation of this Agreement.
(b) Registration requirements during the continuation of this Agreement with any
Network in which Bank is a member. Company shall be solely responsible for all
Network registration costs that may be incurred during the continuation of this
Agreement.
SECTION 2.6 — Compliance
Company shall remain in compliance with all Rules of each applicable Network and
the Regulations of any federal or state authority having jurisdictions over the
Bank, including federal and state consumer protection laws and the Bank’s
interpretation of same whether provided for in this Agreement or specifically
communicated to the Company in another format. Company is solely responsible for
causing all Third Parties that Company has engaged to facilitate or provide any
component of the Payment Services on behalf of Company to comply with same.
Company shall timely provide to the Bank the following information during the
continuation of this Agreement:
(a) Notification of new Terminal installations quarterly including all
applicable information required pursuant to Section 2.1 and such additional
ownership and collateral documentation, as requested.
(b) Annually, as of the anniversary date of this Agreement or as otherwise
agreed to by the Parties and as the Networks may require from time to time, a
PIN Security and Encryption Review and any back up documentation as may be
required to assure the Bank and the Networks of full compliance by Company with
the Rules and Regulations.
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(c) Bank has underwriting guidelines for its ISO sponsorship program which may
be updated and modified from time to time, and Company must remain in compliance
with these guidelines as follows:

  i.   Financial Information - As soon as possible or in any event within ninety
(90) days after each December 31 (or at the end of the Company’s calendar year)
during the term of the Agreement, Company will provide Bank, at Bank’s request,
with a copy of the consolidated quarterly and/or annual financial statements of
Global Cash Access Holdings, Inc. (“Holdings”), as applicable. Notwithstanding
the above, should the Bank request additional financial information concerning
the Company, the Company will comply with such a request within thirty (30)
business days of receipt of such request or such other time period as agreed
upon by the Parties.

  ii.   Insurance — Company will obtain and maintain insurance coverage
covering; errors and omissions, commercial liability and employee dishonesty,
fidelity and crime coverage for all Company employees, officers, and agents,
with a minimum of $1,000,000 each and every claim and in the aggregate.
Company’s insurer must have a Best’s rating of A or better. Any adverse material
change in the policy or cancellation must be promptly reported to Bank. Upon
request of the Bank, Company shall provide a Certificate of Insurance,
evidencing the foregoing insurance coverage requirements.

  iii.   Annual Review — Bank may annually conduct a review of Company
information in this Section 2.6(c) and Company will cooperate with Bank in
performing such annual review. Company will be charged an annual review due
diligence fee of $250.00 each year.

  iv.   MCC Codes — Company will be aware of and utilize correct merchant MCC
for Quasi Cash and other terminal transactions and all Network rules concerning
Quasi Cash processing and settlement of Interchange.

(d) If required by any Network, Regulatory Authority or Bank, an on site review
may be scheduled at the expense of the Company, such expense will include all
out-of-pocket expenses incurred including fees and expenses for auditors,
accountants, consultants and other bank representatives, plus reasonable and
customary travel and hotel expenses incurred by Bank employees for the duration
of the review.
Company will have sixty (60) days or such other time period as agreed upon by
the Parties to respond to the on site review after receiving the Bank’s report.
The response will include the action the Company will take to rectify any “out
of compliance” or exception items and the estimated time required to remedy such
items.
(e) 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, recommendations or review of any kind to Company.
SECTION 2.7 — Limited Authority of Company/Use of Terminals
(a) Bank has herein agreed to register or sponsor Company as an ISO for the sole
purpose of enabling Company to deploy Terminals for the conduct of Terminal
Transactions across the Networks. Company agrees to limit the use of the
Terminals to the specific functions which are included within the definition of
ATM Transactions.
(b) Notwithstanding the ISO registration, Company shall have no authority to act
for or on behalf of Bank in any way or manner except for fulfilling the Network
requirements for being a sponsored ISO, including the execution of the ATM
Operator Agreements for and on behalf of Bank as more particularly described in
Section 2.2(a). In all other respects and in dealing with all other Persons and
entities, this Agreement shall be construed whereby, (1) Bank has no
relationship with nor interest in Company, it’s business, the Terminals or the
Terminal activities of Company, (2) Company has no relationship with nor
interest in Bank, its business, its Terminals, or its Terminal activities, and
(3) Company shall not be an Agent for Bank and shall have no authority to
obligate Bank to any Person or entity nor to otherwise act for and on behalf of
Bank in any way or manner.
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(c) Company is not registered or sponsored by Bank as a Processor. Except with
respect to ATM Services, Company is not authorized to provide and shall not
provide any Processing Services for Transactions which are conducted at the
Terminals. Company shall not conduct Transactions, nor allow Transactions to be
conducted at an Terminal except when the Processing Services are being provided
by a Processor who is fully approved by and in good standing with Bank and with
each Network. Company shall notify Bank in advance of each Processor it plans to
use and will authorize the Processor to release Company’s Terminal information
to Bank.
(d) The relationship between Company and Bank shall be and at all times remain
an independent contractor, and nothing herein contained shall be construed or
inferred to create the relationship of employer and employee, partnership, joint
venture partner, agency, consultant or any other relationship between Bank and
Company.
SECTION 2.8 — Company Warranties, Representations and Disclosures
In addition to the representations and warranties of Company elsewhere herein,
Company warrants and represents to Bank that during the continuation of this
Agreement:
(a) This Agreement is valid, binding, and enforceable against the Company in
accordance with its terms, except as otherwise provided by law or equity.
(b) The Company is a Delaware corporation, validly existing and in good standing
under the laws of the State of Delaware and is authorized to do business in each
state in which the nature of the Company’s activities makes such authorization
necessary, except where the failure to be so licensed or qualified would not
have a material adverse effect on its ability to fulfill its obligations under
this Agreement.
(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
organizational documents or any other agreement, contract, lease or obligation
to which the Company is a party or by which it is bound.
(d) Except as disclosed by Global Cash Access Holdings, Inc. in any public
filing or report with the Securities and Exchange Commission (“SEC Filings”) or
as otherwise disclosed in writing by the Company to Bank, Company has not been
subject to any of the following:

  i.   Criminal felony conviction;

  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, or any other state or federal Regulatory Authority; or

  v.   Pleading, restraining order, decree, injunction, or judgment in any
proceeding or lawsuit, alleging fraud, deceptive practice or criminal felony
action on the part of the Company.

(e) There is not pending, or to the knowledge of the Company, threatened against
the Company nor any executive officer or director of Company, any litigation or
proceeding, judicial, tax or administrative, the outcome of which could
reasonably be expected to have a material adverse effect on the continuing
operations of the Company.
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SECTION 2.9 — Use of Bank’s Mark/Network Mark
Company shall not use Bank’s Mark or a Network’s Mark for any reason or use or
refer to Bank or any Network in any advertisements, sales, presentation, or
marketing materials, except as provided in Section 2.11 without the prior
written consent of Bank. Company may accurately describe its relationship with
Bank in response to questions and in its dealings with the processor, location
owners and operators, and merchants.
SECTION 2.10 — Covenants of Company
Company covenants and agrees with Bank that during the continuation of this
Agreement:
(a) It will comply at all times with all Rules and Regulations applicable to the
Payment Services and Company’s obligations under this Agreement;
(b) It will promptly give written notice to Bank of any materially adverse
change in the business, properties, assets, operations or conditions, financial
or otherwise, of the Company, and the pending or threat of litigation involving
the sum of $1,000,000.00 or more, and of all tax deficiencies involving a sum in
excess of $1,000,000 and of all pending or threatened criminal felony actions
against the Company or any of its executive officers or directors of which the
Company is aware of; provided Company shall be deemed to have provided notice
under this Section 2.10(b) with respect to any matter that has been disclosed in
any SEC Filings;
(c) Terminals deployed under this Agreement have not been altered or subjected
to unauthorized modifications or tampering and at all times will be in
compliance all Rules, Regulations and Network standards;
(d) It will use the Terminals only for Transactions approved in this Agreement;
and
(e) Scrip Terminals will be activated and operated only in compliance with the
Rules of each Network where the Company is sponsored. All Networks that sponsor
Scrip Terminals require proper Transaction identifiers to enable the
Processor/Network to properly charge Interchange Fees. Incorrect activation,
programming changes, or any other attempt on the part of the Company to
fraudulently receive fees will result in (i) full repayment of all fees
collected, from the date the Scrip Terminal was activated, and (ii) possible
fines from the Networks, and (iii) shall be deemed a breach of this Agreement.
SECTION 2.11 — Advertising Material
Bank shall have the right to approve or disapprove, in its sole discretion, in
advance any advertising material bearing Bank’s mark or Bank’s name before the
use or distribution of any such material. TPSRs may not advertise, including but
not limited to web sites, brochures, business cards, or Terminal signage under
any business name other than Company, nor otherwise reference the Bank or any
Network in any materials.
SECTION 2.12 — Release of Information/Processors
By signing this Agreement, Company hereby gives consent and authorization to all
Processors now or hereafter utilized by the Company to release any and all
Terminal information that is required by the Bank, or by any Network where the
Bank is a member. Bank hereby gives notice to Company that any Terminal
sponsored under this Agreement may be terminated by Bank for failure to provide
information required by Bank to complete due diligence on merchant locations.
SECTION 2.13 Intentionally Omitted
SECTION 2.14 Intentionally Omitted
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SECTION 2.15 — Third Party Services
Company is solely responsible for the marketing, placement, installation,
deployment, operation, servicing, testing, auditing and maintenance of the
Terminals which are operated under this Agreement. All such activities are to be
performed by Company in accordance with the Rules and Regulations, in accordance
with this Agreement. Company may contract with Third Parties to act for and on
its behalf in fulfilling its obligations under this Agreement, and in such
event:
(a) Company shall register in advance with the Bank all Third Parties (with
appropriate contact information and description of the work to be performed),
including, but not limited to, each Third Party Processor (TPP), Third Party
Servicer (TPS) and Encryption Service Organization (ESO), and upon request,
provide copies of all Third Party contracts and provide such other due diligence
as Bank or any of the Networks may request.
(b) If any Network has any concerns or issues with respect the Company’s use of
any Third Party or of the activities being provided by the Third Party, Bank and
Company shall work in good faith to remediate such objections or issues, and if
after such remediation efforts such Network still has concerns or issues, then
Company shall transition the affected services being provided by such Third
Party to a new Third Party.
(c) The Bank’s approval of any Third Party shall not in any way relieve the
Company of its duties and obligations under this Agreement. The Third Party
shall be deemed to be Company’s agent, acting for and on behalf of Company.
Company shall be fully responsible for all of the acts and omissions of such
Third Party.
(d) Company shall use only W2 employees of the Company to sell and place
Terminals unless a Third Party Sales Representative (TPSR) Agreement has been
presented for each active Third Party. Third Party Sales Representatives may
sell and place Terminals only as sales representatives of Company, using
agreements provided by the Company. Any other use of a TPSR is not in compliance
with Network Rules, will be unauthorized and will not result in sponsorship for
any unauthorized Terminals so deployed.
In any event, Company shall retain only such Third Parties as have agreed in
writing to representations and warranties set forth in Section 2.8 hereof (or
substantially similar representations and warranties), agree to keep
confidential any confidential information of the Company, including without
limitation, any Cardholder information, maintain insurance of a type and
requirement set forth in Section 2.6(c) hereof, and otherwise comply with all of
the requirements herein imposed or which may at that time be imposed by
applicable Rules or Regulations.
SECTION 2.16 — Quasi Cash Transactions
(a) With respect to a Quasi Cash Transaction, each Merchant Casino is authorized
to advance the cash to the Cardholder in accordance with applicable Rules and
Regulations.
(b) Company shall review, approve and agrees to maintain in compliance with all
Rules and Regulations, all agreements, forms, documentation, procedures and
Cardholder information with respect to all Merchant Casinos utilizing Quasi Cash
Transactions. Bank reserves the right to reject a prospective Merchant Casino,
or to terminate an existing Merchant Casino; provided that prior to any such
rejection or termination the Bank shall consult with Company to determine if
there are any remediation measures that can be taken to address the Bank’s or
the Network’s issues or concerns.
(c) Company shall have the right to discontinue conducting Quasi Cash
Transactions for any specific Merchant Casino and will provide Bank with notice
of any such action. Such notice shall not negate Company’s reimbursement
obligation to the Bank for the wrongful acts and omission which occurred prior
to the date the Merchant Casino was terminated.
(d) Company is responsible for any fine, demand, Chargeback, or dispute made by
any Cardholder due to any loss to include but not limited to any duplicate
debits, errors, late Settlement or errors in ACH processing.
(e) Bank will be notified promptly upon any report or notification that Company
has terminated its relationship with any Merchant Casino as a result of such
Merchant Casino’s insolvency, or as a result of any bankruptcy proceeding.
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(f) Company agrees to freeze, halt and delay the right of a Merchant Casino to
participate in a Quasi Cash Transaction upon the request of Bank if Bank
reasonably suspects Merchant Casino Fraud with respect to Quasi Cash
Transactions originating at such Merchant Casino; provided that prior to any
freeze, halt or delay, Bank shall consult with Company to determine if there are
any less severe remediation measures that can be taken to address Bank’s or any
Networks’ issues or concerns.
(g) Company shall coordinate and monitor the Authorization, Settlement,
Chargeback processing, audit and other activities performed by Company and each
third party involved in the Quasi Cash Transaction. Exception reports will be
provided to Bank on a monthly basis. With respect to each Merchant Casino,
Company will maintain a log of Chargebacks, adjustments, and consumer complaints
by date received and will also record the date that the Chargeback, adjustment
or consumer complaint was resolved and provide a monthly line item report to
Bank.
(h) Customer Service — Company shall monitor the Quasi Cash Processor and assure
that Company shall provide either itself or through a third party service
provider, customer service to Merchant Casinos seven (7) days a week,
twenty-four (24) hours a day subject to scheduled maintenance downtimes. This
customer service activity shall be available to Merchant Casinos and Cardholders
via a toll free line for the purpose of responding to Merchant Casinos or
Cardholder inquiries regarding Quasi Cash Transactions, equipment operation and
repair services or as otherwise approved by the Bank.
SECTION 2.17 Settlement
Settlement of Quasi Cash Transactions, Chargebacks, and adjustments will be
completed utilizing another bank of Company’s choice.
SECTION 2.18 — Reserve Account
To the extent Company has established a Settlement account with Bank, Company
shall establish a Reserve Account at Bank; provided that Bank acknowledges that
the Company has not established such a Settlement account with Bank as of the
Effective Date. The Reserve Account shall be under the control of Bank and Bank
shall have a first and prior security interest in said account to secure the
payment of all amounts owing to Bank by Company including reserve on daily
Settlement, Chargebacks, Merchant Casino suspected fraud losses and indemnity
obligation, Quasi Cash Processor errors to include presentment of duplicate or
delayed transactions, as well as all other exposures, losses, expenses and
liabilities of Bank, including contingent liabilities related to or arising out
of Quasi Cash Transactions and MasterCard, and Visa quarterly Settlement Fees
(if any) (collectively “Quasi Cash Claims”).
The Reserve Account shall be funded as follows, with an initial deposit of
$10,000 and;
(a) The average of one (1) day of clearings or funds sufficient to pay issued
money orders or checks cleared each banking day including money orders or checks
issued or written by Company on Saturdays, Sundays, and banking holidays, which
will clear the next banking day.
(b) Chargebacks: Shall be funded based on a rolling amount of 3 times the total
of three months of losses. Loss, as it applies here, is defined as any
Chargeback or dispute that has been settled in favor of the Cardholder or that
is over three (3) months old from the date of the first presentment.
(c) MasterCard, Visa, or other Network Quarterly Assessments and/or Fees (if
any) shall be funded with an amount equal to the previous assessment charged to
the Bank for Quasi Cash Transactions processed for Company.
(d) Any other fines, fees, fraud or loss that is submitted to the Bank that is
not otherwise delineated in 2.18. (a.) to (c.) may be added to this Section 2.18
and the Reserve Account may be increased accordingly.
Company acknowledges and agrees that Bank shall control the Reserve Account.
Reserve Account shall not be terminated until such time as the Bank has
determined that all risk to Bank and exposure to Bank for liabilities and
obligations related to or arising out of this Addendum and the Sponsorship
Agreement and the Transactions contemplated by this Addendum and the Sponsorship
Agreement have been fully released, paid or cleared. Bank acknowledges and
agrees that remaining funds will be returned to Company three (3) months after
the end or the contract term less any outstanding obligations, Chargebacks,
pending fines or penalties.
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Company agrees to contribute to the Reserve Account in such amounts and at such
times as requested by Bank from time to time. Notwithstanding this Agreement,
Bank may, in its reasonable discretion or as requested by any governmental
entity having supervisory authority over Bank, adjust Reserve Account
requirements from time to time as necessary.
Company shall reimburse Bank for losses actually incurred as a result of any
loss, charge, fee or fine irrespective of the Reserve Account. Should Company
fail to reimburse Bank, Bank may charge such amounts against Company’s Reserve
Accounts and Company shall immediately fund Reserve Account.
SECTION 2.19- Security
With respect to any suspected Cardholder fraud, Company will perform security
exception monitoring on a daily basis in accordance with parameters established
by Company and using reports generated by Company and the Quasi Cash Processor.
Company has established policy and procedures to only deploy Terminals to a
Merchant Casino that maintains a current license from the applicable gaming
regulatory authority. Such security procedures, monitoring and reporting shall
be undertaken for the purpose of evaluating and identifying locations with
significant increases in average daily, weekly and/or monthly deposits,
significant variations in average tickets amounts, significant variations in
non-magnetic card entry activity, and any other subsequently identified
categories (in form and content as mutually agreed upon by Company and Bank).
Company agrees to notify Bank promptly upon receipt of any adverse information
indicating possible Merchant Casino Fraud.
Company agrees to investigate and research any Merchant Casino for which Bank or
Company has received any adverse information indicating possible Merchant Casino
Fraud or has identified questionable or suspicious Quasi Cash Transactions.
Company agrees to provide a security report (in a form and content as mutually
agreed upon by Company and Bank) to Bank promptly but no later than five
(5) days after receipt of notification of questionable activity.
ARTICLE III — DUTIES OF BANK
SECTION 3.1 — Membership in the Networks and Maintenance of Licenses, Permits
and Approvals
Bank shall maintain its membership in the Networks in good standing and shall
abide by all the Rules and Regulations applicable to the Bank at all times
during the term or continuation of this Agreement. Bank shall maintain all
necessary licenses, permits and approvals from all jurisdictions (applicable to
U.S. Membership) necessary for it to provide the sponsorship services
contemplated by this Agreement.
SECTION 3.2 — Terminal Sponsorship
Bank shall sponsor the Company, the Company’s approved Affiliates and each
Terminal deployed by Company or such Affiliates for Transactions and ATM
Services which are conducted in accordance with this Agreement with each Network
in which Bank holds a membership. To the extent ASB engages any Third Party to
carry out any of its obligations under this Agreement, ASB shall be fully
responsible for all of the acts and omissions of any such Third Party. Bank
shall maintain dedicated BINs and ICAs solely for Company and its Affiliates
with respect to the sponsorship services being provided under this Agreement.
SECTION 3.3 — Ancillary Services and Excluded Services
At the request of Company, Bank shall facilitate discussions and the provision
of information to the Networks with respect to obtaining required approvals of
new products and services of Company as well as any other issues or information
that Company reasonably believes is beneficial to the business objectives of
Company. Bank shall be under no obligation to provide services beyond those
services agreed to in this Agreement.
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SECTION 3.4 — Representations and Warranties of Bank
Bank warrants and represents to Company that during the continuation of this
Agreement:
(a) This Agreement is valid, binding, and enforceable against the Bank in
accordance with its terms, except as otherwise provided by law or equity.
(b) The Bank is a Texas state bank, validly existing and in good standing under
the laws of the State of Texas and is authorized to do business in each state in
which the nature of the Bank’s activities makes such authorization necessary,
except where the failure to be so licensed or qualified would not have a
material adverse effect on its ability to fulfill its obligations under this
Agreement.
(c) The Bank 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 Bank of its obligations
under this Agreement are not in conflict with the Bank’s organizational
documents or any other agreement, contract, lease or obligation to which the
Bank is a party or by which it is bound.
ARTICLE IV — COMPENSATION, FEES AND EXPENSES
SECTION 4.1 — Obligations by Costs and Expenses
Company shall be responsible for all costs and expenses associated with this
Agreement including, but not limited to:
(a) Purchase of Terminals;
(b) Deployment, Installation and maintenance of Terminals, including
compensation, fees and expenses for TPSR’s;
(c) Federal and State Registration Fees;
(d) Network Application and Registration Fees;
(e) Costs of any due diligence, background investigation, credit reports, OFAC
inquiry, ATM Operator Agreement and applications and/or on-site inspection
required by the Networks or by the Bank’s Regulatory Authority. This due
diligence may include the Company’s principal place of business, any Terminal
location, any TPSR, TPP or other Third Party used by the Company;
(f) Processor, ESO, TPS, TPP fees and charges including out of pocket costs of
Bank’s due diligence, Network registration, on-site inspections, cost of any
audits, or reviews, or losses Bank may have in connection with sponsorship or
registration of any Third Party providing services in connection with the
deployment by Company of Terminals under this Agreement;
(g) Network Switch Fees;
(h) Program Marketing and Advertising (including signage);
(i) Cash Servicing;
(j) Processing Services;
(k) Cardholder Customer Service (including transaction disputes);
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(l) Network penalties and fines assessed against Bank that arise out of the
deployment of one or more Terminals under this Agreement unless the penalties
and fines are primarily and directly attributable to wrongful acts or omissions
of Bank; and
(m) Reimbursement to Bank for any expenses it incurs on behalf of the Company or
by reason of activities by the Company, including any direct expenses for
Terminal, system, interchange, quarterly operating fees for Merchant Transaction
volume or processor audits required by any Network.
SECTION 4.2 — Interchange & Surcharge Fee and Notices
Bank Interchange Income and Surcharge Income related to this Agreement will be
the income of the Company and distributed according to each individual
Processor/ISO Agreement.
The amount of any Surcharge Fee shall be prominently displayed on each ATM and
shall state that such a fee is being charged.
Each ATM will display a notice as per PLUS or other Network, Rules or as may be
required by Regulations, providing the name of the Bank, as the sponsor bank,
and Bank will use its best efforts to provide Company with all required ATM
signage, disclosure and notice requirements of the Networks, the Rules and each
applicable state. When applicable, each ATM will also display a notice as per
state requirements, providing the name of the bank that is providing such state
sponsorship.
SECTION 4.3 — Sponsorship Fees, Miscellaneous Fees and Other Costs
For sponsorship and services rendered under this Agreement, the Company shall
pay Bank a Transaction fee set forth and in accordance with Schedule A which is
incorporated herein. For the purpose of calculating such Transaction fee, Bank
will include all Transactions and declines.
(a) Minimum processing fee will be charged (prorated) from the date Bank is
first notified Transactions are being processed under the Bank membership from
any Network.
(b) Bank reserves the right to recover, at a later time, amounts either not
billed or not properly billed, and Company reserves the right to recover, at a
later time, amounts billed in error by Bank as a result of Banks error, provided
that Bank, Company shall have no rights pursuant to this Section 4.3. In the
event that such billing error occurred more than twelve (12) months prior to the
date of discovery.
(c) Upon termination or expiration of this Agreement, the Company shall have no
further rights as a sponsored ISO but Bank shall continue to be entitled to all
amounts owed to it which may have accrued prior to the termination or expiration
of this Agreement.
ARTICLE V — TERM OF AGREEMENT; TERMINATION
SECTION 5.1 — Term
The initial term of this Agreement shall be five (5) years, commencing on the
date this Agreement is executed, and shall renew automatically for continuous
one (1) year periods, unless prior to the expiration of the initial five
(5) year term or any renewal period either party gives the other not less than
one hundred and eighty (180) days written notice of its election not to renew or
extend this Agreement. Upon the termination or expiration of this Agreement,
Bank shall provide reasonable transition assistance services to Company in order
to facilitate the transfer of sponsorship services to another provider of such
services, including, without limitation, executing all necessary documents to
transfer the dedicated BINs and ICAs of Company to another provider of such
services.
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SECTION 5.2 — Additional Rights to Terminate
(a) In addition to all other remedies at law or in equity, either party shall
have the right to terminate this Agreement, without affecting any rights or
obligations under any other contracts or agreements, upon occurrence of one or
more of the following events of default:

  i.   Failure of either party to observe or perform that party’s obligations to
the other hereunder, as long as the failure or nonperformance is not due to the
actions of the terminating party and such failure remains uncured for a period
of sixty days after written receipt of written notice from the other Party; or

  ii.   The breach of any material warranty or representation herein that is not
capable of being cured.

(b) In addition to all other remedies at law or in equity, Bank shall have the
right to terminate this Agreement without further obligations or penalty,
immediately by giving written notice to Company if:

  i.   Its membership in a Network is terminated but only with respect to the
sponsorship services as it relates to the affected Network; or

  ii.   Any Regulatory or Network Authority over Bank that requires, requests or
recommends discontinuance of this Agreement (provided that Bank and Company
shall discuss in good faith if there are any remedial measures or steps that can
be taken to address the issues or concerns that are the basis for any order,
request or recommendation for discontinuance of this Agreement); or

  iii.   Bank determines that Bank’s continued performance under the terms of
this Agreement would constitute an unsafe or unsound banking practice, and Bank
so certifies to Company in writing.

(c) In addition to all other remedies at law or in equity, Company shall have
the right to terminate this Agreement without further obligations or penalty, by
giving written notice to Bank if Company reasonably determines that this
Agreement could cause Company to lose any gaming license or other material
license that is necessary for the operation of Company’s business.
SECTION 5.3 — Liquidated Damages
The Parties agree that the pricing under this Agreement was determined by mutual
agreement based upon certain assumed volumes of processing activity and the
length of the term of this Agreement.
The Parties further agree that it would be difficult or impossible to ascertain
Bank’s actual damages for a termination not as a result of a breach by Bank or
other breach of this Agreement by Company resulting in a termination of this
Agreement before the end of the initial term or renewal period term of this
Agreement. The Parties further agree the Bank is entitled to:
(a) All fees earned but not paid prior to the date of termination,
(b) All costs and expenses incurred by Bank as a result of such default,
including all reasonable attorney’s fees which may be incurred,
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(c) An amount equal to the number of months remaining in the term multiplied by
an average monthly fee to Bank (whereby the average monthly fee is calculated by
Bank by selecting and averaging any three (3) consecutive months in the term)
and dividing by a factor of two (2) (“Liquidated Damages”). Company agrees this
is a reasonable estimation of the actual damages Bank would suffer if Bank did
not receive the expected benefits to be derived from this Agreement for the term
of this Agreement. Company furthermore agrees such Liquidated Damages will be
paid within fifteen calendar days of the effective date of termination.
Each Party acknowledges and agrees, after taking into account the terms of this
Agreement and all relevant circumstances at the date hereof, that the Liquidated
Damages payable under this Section represents a reasonable and genuine
pre-estimate of the damages which would be suffered by Bank in the event of
early termination of this Agreement and does not constitute a penalty. Company
agrees that payment of Liquidated Damages does not relieve the Company of any
obligations set forth in Article 6.
ARTICLE VI — GENERAL PROVISIONS
SECTION 6.1 — Waivers/Indemnification
(a) Bank shall not be liable to Company or any other Person or entity for any
loss, cost, damage, claim, demand, cause of action or expense (including,
without limitation, the cost of investigating any claim, the cost of litigation
and attorneys’ fees, whether or not legal proceedings are instituted), or any
compensatory, punitive, special, incidental or consequential damages (including
loss of profits) (collectively “Damages”), as a result of, arising out of or
caused by the negligence or the wrongful act of the Cardholder, Company, any
Third Party engaged by Company or Participant in the deployment of the Terminals
or in the processing of any Transactions attempted or conducted at such
Terminals, including all Terminal Transactions, except where the Damages are due
to the negligence or willful misconduct of Bank or as a result of a breach by
Bank of any provision of this Agreement. Company hereby releases Bank from all
such Damages and agrees to indemnify and hold harmless Bank from and against all
such Damages. Bank hereby disclaims any and all warranties with respect to the
operation of the Network and Processor systems and the services to be provided
by a Network or Processor under and in connection with the Terminal Transactions
contemplated by this Agreement, whether express or implied, including, without
limitation, any implied warranty of merchantability or fitness for a particular
purpose.
(b) Company shall immediately reimburse Bank, upon demand, for all charges,
fees, fines or penalties assessed upon Bank by any Network, Processor,
Regulatory Authority Issuer or other Participant in connection with Transactions
processed under this Agreement and Bank shall have the right to settle these
items by deducting or setting off same against any and all Transaction fees of
Company.
(c) Company hereby agrees to indemnify and hold Bank and all Affiliates of Bank,
and their respective officers, directors, employees and agents and their
respective heirs, executors, successors and assigns, (“Bank Group”) harmless
from and against any and all liability, obligation, loss, cost, claim, demand,
penalty, judgment, cause of action and expense of any kind or nature whatsoever
(collectively “Claims”) (including, without limitation, the cost of
investigating any claim, the cost of litigation, amounts paid in settlement, and
attorneys’ fees which may be incurred), imposed on, incurred by or asserted
against any one or more of The Bank Group arising from, attributable to, or in
connection with, (i) acts or omissions of Company or of any Third Party under
this Agreement including those related to the deployment of Terminals and all
Transactions and Terminal Transactions contemplated by this Agreement, (ii) any
negligence or other wrongful act or omission of the Company Group (hereinafter
defined), (iii) actions taken or omitted by Bank in accordance with or in good
faith reliance on information or instructions provided by Company, (iv) any
breach by Company of this Agreement, including, without limitation, failure to
maintain any required insurance coverage, (v) acts and omissions of all other
parties involved in a Transaction, an Terminal Transaction or in the deployment
of Terminals under this Agreement, including any Cardholder, Third Party,
Processor or Network, and (vi) failure by Company or any other Person to comply
with all applicable Rules and Regulations. It is the understanding and agreement
of the parties to this Agreement that Bank, having only undertaken to act as
sponsor for Company to the Networks, shall not be liable for any acts or
omissions on the part of Company and shall not be responsible for any losses or
damages incurred by or caused by the Company or any Person authorized to act for
and on behalf of Company.
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(d) The obligations of Company to indemnify the Bank Group from Claims as
described in the foregoing Section 6.1(c) and the obligations of Company to
provide reimbursement as described in the foregoing Section 6.1(b) are
(i) secured by the security agreement granted to Bank in the accounts and
deposits as described in Section 2.18, (ii) secured by all deposit accounts of
Company at Bank and (iii) subject to being settled by deduction and offset
against all amounts owing by Bank to Company.
(e) Bank hereby agrees to indemnify and hold Company and its affiliates, and its
or their respective officers, directors, employees and agents and their
respective heirs, legal representatives, successors and assigns (“Company
Group”), harmless from and against any and all Claims including reasonable
attorneys fees which is the result of the negligence or willful misconduct of a
member of the Bank Group and as a result of any breach by Bank of this
Agreement.
(f) Notwithstanding the foregoing provisions of this Section 6.1, Company is not
obligated to indemnify Bank (and Bank is not obligated to indemnify Company) to
the extent the Claims result from the negligence or other wrongful acts or
omissions of financial institutions contracted by Bank to provide state
sponsorship for ATM placement (in states that prohibit placement of ATMs by
financial institutions that do not have a bank charter in that state).
(g) Each Party shall promptly notify the other of all Claims or threat of Claims
of which that Party becomes aware (except with respect to a threat of suit one
party might institute against the other) which may give rise to a right of
indemnification pursuant to this Agreement.
(h) If any indemnification claim is asserted against a Party pursuant to this
Section 6.1, such indemnifying Party shall have the right to assume the entire
control and defense, including at its expense, the engagement and selection of
counsel. In any third party claim, suit or proceeding, in which the indemnifying
Party has assumed such defense, the indemnified Party shall not consent to the
entry of a judgment or enter into any settlement with respect to the matter
without the consent of the indemnifying Party and the indemnifying Party will
not consent to the entry of any judgment or enter into any settlement affecting
the indemnified Party to the extent that the judgment or settlement involves
more than the payment of money without the written consent of the indemnified
Party.
SECTION 6.2 — Confidentiality; General
Under this Agreement, the parties will be disclosing to each other certain
confidential and proprietary information including customer lists, Personal
Information, customer data, business plans, software, data, prototypes,
documentation, Cardholder account 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.
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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. Information may also be released to the Company 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.
To the extent transactions and information under this Agreement are subject to
the Privacy Regulations, Company shall use Personal Information only as
necessary to carry out its obligations hereunder and shall not disclose Personal
Information to any third party except as permitted by the Privacy Regulations.
Company shall be responsible for maintaining compliance with all Privacy
Regulations.
The parties acknowledge that in the event either party breaches the terms of
this Section, 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.
Bank acknowledges that Holdings may be required to disclose all or a portion of
the terms and conditions of this Agreement in one or more filings with the
Securities and Exchange Commission and may be required to file this Agreement as
an exhibit to one or more such filings,
The Confidentiality provisions of this section shall survive the termination of
this Agreement.
SECTION 6.3 — Governing Law
This Agreement shall be governed by, interpreted, and construed in accordance
with the laws of the State of Texas, without regard to the choice or conflicts
of laws principles of any jurisdiction.
SECTION 6.4 — Severability
In the event that any part of this Agreement is adjudicated by any court of
competent jurisdiction to be invalid or unenforceable, then this Agreement shall
be automatically modified to eliminate that part which is affected thereby. The
remainder of this Agreement shall remain in full force and effect.
SECTION 6.5 — Acknowledgment of Regulatory and other Constraints
The parties hereto acknowledge that Bank and Company are subject to the rules,
regulations, orders and requirements which may be imposed by any Regulatory
Authority (“Regulatory Requirements”). The Parties expressly agree that in the
event of conflict between the terms and conditions of this Agreement and any
Regulatory Requirements, the Regulatory Requirements shall control and the
Parties shall negotiate in good faith any necessary amendments to this Agreement
to ensure compliance with the Regulatory Requirements.
SECTION 6.6 — Waiver of Right to Trial by Jury.
Company and Bank hereby agree not to elect a trial by jury of any issue triable
of right by jury, and waive any right to trial by jury fully to extent that any
such right shall now or hereafter exist with regard to this Agreement, or any
claim, counterclaim or other action arising in connection thereto. This waiver
of right to trial by jury is given knowingly and voluntarily by Company and
Bank, and is intended to encompass individually each instance and each issue as
to which the right to a trial by jury would otherwise accrue. Company and Bank
are each hereby authorized to file a copy of this paragraph in any proceeding as
conclusive evidence of this waiver by Company and Bank.
Initial
____Bank ____Company

 

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SECTION 6.7 — Binding Effect
Unless otherwise expressly noted, this Agreement and the rights and obligations
created hereunder shall be binding upon and inure solely to the benefit of the
parties hereto and their respective permitted successors and permitted assigns,
and no other Person or entity shall acquire or have any right under or by virtue
of this Agreement. Furthermore, unless otherwise expressly noted, nothing herein
shall be implied, or is intended to be construed to confer upon or give any
rights or remedies to any third parties (including but not limited to third
party beneficiaries) under or because of this Agreement to any persons, firm, or
corporation.
SECTION 6.8 — 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 or sent by facsimile transmission upon confirmation
of delivery as follows:

         
If to Bank to:
  American State Bank   If to Company to:
 
  1401 Avenue Q   Global Cash Access, Inc.
 
  Lubbock, TX 79408   3525 E. Post Road, Suite 120
 
  Facsimile: (806) 472-3555   Las Vegas, NV 89120
 
  Attn: Michael Epps   Facsimile: (702) 262-5039
 
      Attn: General Counsel
 
       
Copy to:
  McWhorter Cobb and Johnson    
 
  1722 Broadway    
 
  Lubbock, Texas 79401    
 
  Facsimile: (806) 762-8014    
 
  Attn: Jack P. Driskill    

SECTION 6.9 — Further Assurances
Each Party shall, at the request of the other from time to time, execute and
deliver such other instruments, documents and/or certificates, as may be
reasonably necessary to further evidence, perfect, maintain, effectuate, or
defend any and all of the respective rights and obligations of the parties
hereunder, including performance of this Agreement. In the event that such
further assurance is not forthcoming within a reasonable time of the date of any
such request, the other Party hereto may take all appropriate action to protect
its rights and obligations hereunder.
SECTION 6.10 — Entire Agreement
This Agreement constitutes the entire agreement and understanding of the Parties
hereto with respect to the subject matter hereof and supersedes and terminates
all other prior commitments, arrangements, or understandings, both oral and
written, between the Parties with respect to the same subject matter.
SECTION 6.11 — Amendment
This Agreement may not be modified, changed, or amended except by an instrument
in writing executed by each of the Parties hereto.
SECTION 6.12 — Counterparts
This Agreement may be executed and delivered in any number of counterparts, and
by different individuals on separate counterparts (provided each such individual
has the authority to enter into agreements and bind his or her respective
party), each of which counterparts, taken together, shall constitute but one and
the same instrument.
Initial
____Bank ____Company

 

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SECTION 6.13 — Forum Selection
To the maximum extent permitted by applicable law, each Party to this Agreement
hereby irrevocably agrees that any legal action or proceeding arising out of or
concerning this Agreement or any agreements to Transactions contemplated hereby,
including tort claims, may be brought only in the courts of the State of Texas
or of the United States of America for the District of Texas, Dallas Division
and hereby expressly submits to the personal jurisdiction and the venue of those
courts for the purposes thereof and expressly waives any claim of improper venue
and any claim that those courts are an inconvenient forum. To the maximum extent
permitted by applicable law, each Party hereby irrevocably consents to the
service of process by the mailing of copies thereof by registered or certified
mail, postage prepaid, to the address referenced in Section 6.8 hereof, and to
that service becoming effective five (5) days after that mailing.
SECTION 6.14 — Attorneys’ Fees
If any action at law, or in equity, or any arbitration is necessary to enforce
the terms of this Agreement, the substantially prevailing party shall be
entitled to reasonable attorneys’ fees, costs and expenses in addition to any
other relief to which such prevailing party may be entitled. Bank is entitled to
all reasonable attorneys’ fees and other expenses incurred by reason of a
judicially determined default of Company.
SECTION 6.15 — Headings
The descriptive headings of this Agreement have been inserted for convenience
only and shall not be deemed to limit or otherwise affect the construction of
any provision hereof.
SECTION 6.16 — Waiver
None of the provisions of this Agreement shall be deemed to have been waived by
any act or acquiescence on the part of either Party, their agents or employees,
and may be waived only by instruments in writing signed by an authorized officer
of the respective Party. No waiver of any provision or of the same provision on
any occasion shall operate as a waiver on another occasion.
SECTION 6.17 — Assignment
Neither party may assign this Agreement without the prior written consent of the
other party, which consent shall not be unreasonably withheld; provided,
however, the Bank shall be automatically permitted to assign this Agreement to
an affiliate or successor entity upon written notice to Company provided that
such assignee of Bank is capable of performing the duties and obligations of
Bank hereunder and Bank remains principally responsible for the acts and
omissions of such assignee.
SECTION 6.18 — Agreement Applies to Specific Terminals/Approval of Processor
(a) Notice of Proposed Processor. Company shall provide Bank with not less than
thirty (30) days advance written notice of its intent to use or change a
Designated Processor or a TPP on a Terminal by Terminal basis.
(b) Individual Terminals Approved. The deployment of Terminals under this
Agreement shall occur on an individual Terminal basis. In other words, Bank does
not become the sponsor of Transactions conducted on a particular Terminal until
such time as Bank has approved the Processor, completed due diligence and
notified the Networks of Bank’s intent to sponsor the Terminal with the
Processor and the Processor has changed the bank identifier numbers in the
Terminal transactional record for transactions conducted at such Terminal, to
reflect Bank as the sponsor.
(c) Company or Affiliate as Processor. If Company is providing its own
Processing Services or if an Affiliate of Company is the Processor, the Company
or Affiliate, as applicable, shall also execute the Third Party Processor
(TPP) Registration Agreement with Bank as well as the Company or Affiliate as
Processor Addendum thereto which adds additional duties and obligations on the
Processor.
Initial
____Bank ____Company

 

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Executed to be effective as of the date and year first above written.

            AMERICAN STATE BANK
      By:   /s/ Jamie Bigley         Name and Title: Jamie Bigley, VP       
Date: 2-11-11        GLOBAL CASH ACCESS, INC.
      By:   /s/ Scott Betts         Name and Title: Scott Betts, CEO/President 
     
Date: 2-8-11   

Initial
____Bank ____Company

 

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SCHEDULE A
Fees
Fees Required

  A.   Application Fee, Due Diligence, On-site Inspection, Pin Security Review,
Implementation — [***]

  B.   Minimum Monthly Fee — [***]

  C.   Transaction Fees — [***] times all transactions

  D.   Network Fees for ISO Registration (required with application)

  i.   __STAR — [***] Registration Fee*, [***] Annual Fee

  ii.   __PULSE — [***] Registration Fee, [***] Annual Fee

  iii.   __Visa/Interlink/Plus — [***] Registration Fee*, [***] each bank

  iv.   __MasterCard/Maestro/Cirrus — [***] Registration Fee, [***] Annual Fee
each bank

  v.   __NYCE — Registration fee waved — [***] monthly fee

  vi.   __Shazam — No registration fee

  vii.   __AFFN — No registration fee — Check with your processor for any other
fees and charges.

  viii.   __ACCEL/Exchange — Registration Fee Various

*     Mandatory Class Requirement   Note:     It is the ISOs responsibility to
check with their appropriate processor(s) for any processor registration cost
that may exist.

  E.   Any State or City ATM Fees

  F.   Annual Due Diligence Fee [***], and on site inspection expenses