Document:

exv10w12

Exhibit
10.12

FIFTH AMENDMENT TO SERVICE AGREEMENT

     This Fifth Amendment to Service Agreement (this “Amendment”) is made and
entered into as of this 11th day of July, 2005 between First Data Merchant
Services Corporation (“FDMS”) and iPayment, Inc., formerly known as iPayment Holdings, Inc.
(“Customer”).

RECITALS

     A. Customer and FDMS have previously entered into a Service Agreement dated as of
July 1, 2002, as amended (the “Service Agreement”).

     B. Customer and FDMS now desire to amend the Service Agreement as set forth herein.

AGREEMENT

     In consideration of the foregoing, Customer and FDMS hereby agree
as follows:

     1. The terms of this Amendment will be effective as of April 1, 2005.

     2. Article 2 of the Service Agreement is hereby amended by the addition of the
following:

     “2.8 Portfolio Conversion; *

          (a) Customer and Customer’s Affiliate, On-Line Data Corp., have Acquired certain Non-FDMS
Portfolios from Card Payment Solutions and First Merchant Bankcard Services, respectively (the
“Existing CPS Portfolio” and the “Existing FMBS Portfolio,” respectively). Customer has elected to
and will convert the Existing CPS Portfolio and the Existing FMBS Portfolio to the FDMS System for
processing pursuant to the terms of and under this Agreement. The parties will expeditiously and
in good faith convert the Existing CPS Portfolio and the Existing FMBS Portfolio to the FDMS
System no later than October 1, 2005. Each party will be responsible for its own costs and
expenses in connection with the conversions.

For the avoidance of doubt, the parties acknowledge and agree that any new Merchant Accounts
sourced and established after the initial conversion of the Existing CPS Portfolio and the
Existing FMBS Portfolio by Card Payment Solutions or On-Line Data Corp. with respect to each such
portfolio, respectively, shall be known as the “New CPS Portfolio” and the “New FMBS Portfolio,”
respectively. Any customization of the FDMS System relating to the Existing CPS Portfolio, the
Existing FMBS Portfolio, the New CPS Portfolio or the New FMBS Portfolio shall remain solely the
property of FDMS, and Customer shall acquire no right, claim, or interest in the FDMS System or
any such customization

 

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

 

 

          (b) All Merchant Accounts in the Existing CPS Portfolio, the Existing
FMBS Portfolio, the New CPS Portfolio and the New FMBS Portfolio will be
set up and reside under the following principal bank and system numbers:

     On-Line Data Corp.:

     System *  —  principal bank numbers * through *

     Card Payment Solutions:

     System *  —  principal bank number *

     System *  —  principal bank number *

     System *  —  principal bank numbers *  —  *

No other Merchant Accounts of Customer will reside under the above
system and principal bank numbers. Merchant Accounts initially set up by
Customer under any system and principal bank numbers other than those set
forth above may not be moved to the above system and principal bank
numbers.

          (c) The prices charged to Customer for the services performed by FDMS
with
respect to Customer’s Existing CPS Portfolio, Existing FMBS Portfolio,
New CPS Portfolio and
New FMBS Portfolio operations shall be the same as for Customer’s other
Merchant Transaction
Card operations with the exception of those prices labeled as “Existing
CPS Portfolio,” “Existing
FMBS Portfolio,” “New CPS Portfolio,” or “New FMBS Portfolio” in Exhibit
“B.”

          (d) Upon the conclusion of each month during the Term of this Agreement,
FDMS shall calculate the total monthly Processing Fees paid to FDMS by
Customer hereunder
during such month solely with respect to the Existing CPS Portfolio, the
Existing FMBS Portfolio,
the New CPS Portfolio and the New FMBS Portfolio (“Total Monthly CPS
Portfolio and FMBS
Portfolio Processing Fees”). *

          (e) The parties acknowledge and agree that the provisions of Section
3.2(a) will
not be applicable to the Existing CPS Portfolio, the Existing FMBS
Portfolio, the New CPS Portfolio
or the New FMBS Portfolio.”

 

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

 

 

     3. Section II of Exhibit “B” to the Service
Agreement, Item 3514-External Authorization Processing, is hereby amended
to read as follows: *

     4. Capitalized terms used but not otherwise defined in this
Amendment will have the
meanings set forth in the Service Agreement.

     5. In the event of a conflict between this Amendment and the Service
Agreement as it
relates to the subject matter hereof, the terms of this Amendment
will control. Otherwise, all terms
and conditions of the Service Agreement will remain in full force
and effect and likewise apply to
this Amendment.

          The parties have executed this Amendment as of the date first above written.

	 	 	 	 	 

	FIRST DATA MERCHANT SERVICES CORPORATION	 	 
	 
	 	 	 	 
	By:

	 	/s/ Rick Learch
 

	 	 
	Name: Rick Learch	 	 
	Title: VP	 	 
	 
	 	 	 	 
	iPAYMENT, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Joseph Jorling
 

	 	 
	Name: Joseph Jorling	 	 
	Title: C.O.O.	 	 

 

			
	*	 	Omitted pursuant to a confidential treatment request. The confidential portion has been filed
separately with the SEC.exv10w13

Exhibit
10.13

Execution Copy

SIXTH AMENDMENT TO SERVICE AGREEMENT

     This Sixth Amendment to Service Agreement (this “Amendment”) is made and entered into
as of this 31st day of August, 2006 between First Data Merchant Services
Corporation (“FDMS”) and iPayment, Inc., formerly known as iPayment Holdings, Inc.
(“Customer”).

Article I.

RECITALS

     A. Customer and FDMS have previously entered into a Service Agreement dated as of July 1,
2002, as previously amended (the “Service Agreement”).

     B. FDMS, through one or more of its Affiliates, is in the business of providing gift card
programs for Merchants (“Gift Card Services”).

     C. Customer desires to market and promote Gift Card Services to Merchants pursuant to the
terms and conditions of this Amendment.

     D. Customer and FDMS now desire to amend the Service Agreement as set forth herein.

AGREEMENT

FDMS and Customer hereby agree as follows:

1. Effective Date. The terms of this Amendment are effective as of August 1, 2006
(“Effective Date”).

2. Rights and Obligations of Customer.

     (a) Customer shall, at its own expense, use reasonable efforts to, on a non-exclusive basis,
market and promote Gift Card Services to Merchants that have a Merchant Account with Customer that
is processed pursuant to the Service Agreement. For each such Merchant that desires Gift Card
Services and for which Customer desires to provide such services, Customer shall (a) complete a
Merchant Gift Card Set-up Form (“Set-up Form”), as provided by, and as may be updated by, FDMS from
time to time, and submit the completed Set-up Form to FDMS in the manner designated by FDMS, and
(b) enter into an agreement with each Merchant for Gift Card processing. A sample form of terms and
conditions for such agreement is set forth in Exhibit C “Sample Terms and Conditions for Merchant
Gift Card Processing Agreement.”

     (b) Customer promptly shall notify FDMS in writing when a Merchant adds any Designated
Location.

     (c) Customer or its Merchants are responsible for any settlement of funds among Designated
Locations. Customer or its Merchants are solely responsible for obtaining, operating and
maintaining at its or their expense Gift Card Equipment.

     (d) Customer acknowledges and agrees that it and its Merchants are solely responsible for
interpreting all laws and regulations applicable to Gift Card Services and Programs, monitoring
changes in such laws and regulations, and for determining the requirements for compliance with, and
complying with, such laws and regulations.

     (e) Customer shall cause each Merchant to obtain a valid Authorization for each Gift Card
transaction in advance of such transaction and to only accept such Gift Card for payment of the
amount

 

 

authorized, if any, in the applicable Authorization. “Authorization” means the receipt by the
merchant of a host-generated authorization code that specifies approval of the transaction request
for a particular Gift Card and the transaction amount approved.

     (f) Customer shall ensure and shall cause its Merchants to ensure that data transmitted by
Customer or a Merchant for processing by FDMS is accurate.

     (g) All publicity and solicitation materials pertaining to Gift Card Services prepared by
Customer or any of its Merchants containing the trademarks, service marks, trade names or logos of
FDMS or any of its Affiliates shall be subject to FDMS’s prior written approval, which approval
shall be provided within ten business days of FDMS’s receipt of Customer’s or Merchant’s written
request and shall not be unreasonably withheld.

     (h) Nothing in this Amendment shall prohibit Customer from directly or indirectly
either itself or through a third party, offering or promoting any non-FDMS gift card program to
Merchants

3. Rights and Obligations of FDMS.

     (a) FDMS agrees to provide Gift Card Services described in Exhibit A to each Merchant with
which Customer enters into a Gift Card processing agreement and for which Customer submits a
complete and accurate Set-up Form to FDMS in the manner directed by FDMS. Notwithstanding the
foregoing, FDMS may immediately upon written notice discontinue providing Gift Card Services to
Customer or any Merchant if FDMS reasonably believes that Customer’s or such Merchant’s operation
or use of the Gift Card Services or a Program, as applicable, violates a law or regulation, or is
unauthorized.

     (b) Customer acknowledges and agrees that FDMS may have some or all of its obligations under
this Amendment performed by one or more of its Affiliates and subcontractors. FDMS retains the
right to subcontract its obligations under this Amendment, although notwithstanding
any such subcontract, FDMS shall remain primarily responsible for performance of the Services.

     (c) If the functionality of the Gift Card Services changes or if FDMS determines revisions to
this Amendment are reasonably necessary to protect FDMS’s Proprietary Information or to comply with
applicable laws, regulations, or court orders, FDMS may amend this Amendment by providing Customer
with prior written notice of such amendment.

4. Fees and Payment.

     (a) Customer shall pay FDMS fees for Gift Card Services as set forth in Exhibit B to this
Amendment and any related Special Fees. FDMS may modify the fees set forth in Exhibit B no more
than once each Processing Year upon one hundred (100) days’ prior written notice to Customer.
Customer shall not be required to purchase any minimum amount of Gift Card Services during any
month of the Term.

     (b) Customer is solely responsible for setting fees to Merchants for Gift Card Services and
supplying such fees to FDMS. Customer assumes all risk of nonpayment of any fees by any Merchant
for any Gift Card Services requested by a Merchant or by Customer on behalf of a Merchant and such
fees shall be due and payable by Customer regardless of whether Customer ultimately receives
payment from a Merchant.

     (c) Customer authorizes FDMS to, each month during the Term:

2

 

          (i) prepare Merchant statements for Gift Card Services received by Merchants during the prior
month using the rates provided to FDMS by Customer by the first day of such month, mail such
statements to Merchants, and, subject to the following sentence, collect payments from Merchants
via ACH on behalf of Customer for amounts due to Customer with respect to the Gift Card Services
one month in arrears. If any such ACH is rejected, FDMS will notify Customer and Customer will be
responsible for pursuing collection of amounts due from Merchant. Unless Customer directs FDMS in
writing to terminate such Merchant’s Gift Card Services, FDMS will continue to provide Gift Card
Services to any such Merchant and to invoice Customer for the corresponding fees pursuant to this
Section 4.

          (ii) remit to Customer an amount equal to the aggregate of such amounts collected from
Merchants on behalf of Customer less the aggregate amount owed to FDMS by Customer for Gift Card
Services received by Customer from FDMS under this Amendment.

5. Term and Termination.

     This Amendment will terminate upon the termination or expiration of the Agreement; provided,
however, that either party may terminate this Amendment at any time upon 90 days prior written
notice; further provided, however that if it will take Customer more than 90 days to convert any
Merchant(s) receiving Gift Card Services under this Amendment to another provider, FDMS may only
terminate this Amendment at the end of such conversion period (not to exceed 180 days) and FDMS
and Customer will use commercially reasonable efforts to support the timely conversion of any such
Merchants.

6. Indemnification. In addition to its obligations under the Service Agreement

     (a) Customer shall indemnify and hold harmless FDMS, its directors, officers, employees,
agents, subcontractors and Affiliates from and against any and all third party claims, losses,
liabilities, damages and expenses, including reasonable attorneys’ fees, (collectively “Claims”) to
the extent that any such Claim is caused by or arises out of (i) actual or alleged infringement of
any patent, copyright, trademark, trade secret or other proprietary right of any person arising in
connection with the use of artwork, designs, specifications or concepts provided by a Merchant in
the production of Gift Cards or related products for such Merchant, or (ii) any security breach in
or intrusion into the Database caused by Customer or one of its Merchants, or Customer’s or its
Merchants’ agents or third party service providers.

     (b) FDMS shall indemnify and hold harmless Customer and its directors, officers, employees,
agents, subcontractors and Affiliates from and against any and all third party Claims to the extent
that any such Claim is caused by or arises out of (i) any error in the Database, unless the error
is caused by incorrect information provided by Customer or a Merchant or by FDMS’s compliance with
Customer’s or Merchant’s instructions or (ii) any security breach in or intrusion into the Database
to the extent it is not caused by Customer or one of its Merchants, or Customer’s or its Merchants’
agents or third party service providers.

7. Limitation of Liability.

     (a) In the case of Gift Cards ordered through FDMS, FDMS shall have no risk of loss upon
delivery of such Gift Cards to Merchant as determined by the proof of delivery. FDMS shall have
no liability with respect to Gift Cards obtained by Merchant from a third party.

     (b) FDMS shall be entitled to rely upon and use any and all information and instructions
provided by Customer or its Merchants for use in performing the Gift Card Services, and FDMS and
its

3

 

agents and subcontractors shall have no liability whatsoever for any noncompliance of such
information or instructions with laws or regulations.

     (c) Merchant and Customer are responsible for accessing and comparing the reports supplied by
FDMS to their own records and Customer is responsible for promptly notifying FDMS of any necessary
adjustments to Gift Card accounts. FDMS will make adjustments to Gift Card accounts pursuant to
Customer’s instructions, and FDMS and its agents and subcontractors shall have no liability for any
errors to Gift Card accounts that result from such adjustments unless such errors are made by FDMS.

     (d) Except to the extent caused directly by FDMS’s failure to perform the Gift Card Services
as set forth in this Amendment, FDMS shall have no liability for any actual or alleged loss or
theft of, alteration or damage to, or fraudulent, improper or unauthorized use of any Gift Card,
Gift Card Number, PIN or Gift Card Equipment, for fraudulently obtained Authorizations, for a
Merchant’s failure to obtain an authorization, for any dispute between Merchant and any Gift Card
Holder, including, without limitation, any dispute regarding the goods or services purchased using
a Gift Card or the payment of any amounts owed or alleged to be owed by one or more such persons to
any other such persons, or Customer’s or its Merchants settlement of funds among Designated
Locations.

     (e) In addition to the limitations set forth in this Amendment and in Section 6 of the Service
Agreement,

          (i) each of Customer’s and FDMS’s cumulative liability for all losses, claims, suits,
controversies, breaches or damages (“Claims”) arising out of or related to Gift Card Services,
regardless of the form or action or legal theory, shall not exceed total revenue received by FDMS
from Customer for Gift Card Services under this Amendment over the preceding twelve (12) months,
or, if this Amendment has been in effect for less than twelve (12) months, average monthly revenue
received by FDMS from Customer for Gift Card Services under this Amendment for such period
multiplied by twelve (12);

          (ii) provided, however, that the limits set forth in Section 7(e)(i) above shall not apply to
Claims relating to Customer’s breach of its obligations under Sections 2(d), 4(a) and 4(b) above,
Customer’s indemnification obligations under Section 6(a) above, FDMS’s indemnification obligations
under Section 6(b) above or FDMS’s breach of its obligations under Section 2.3(c) of the Agreement,
and shall not shall not be construed to limit the payment obligations of Customer or FDMS, as
applicable, with respect to (i) acts of gross negligence or willful misconduct by either Customer
or FDMS, (ii) breaches by either Customer or FDMS of their obligations under Article 10 of the
Agreement.

8. Definitions.

     (a) As used in this Amendment, the following terms have the definitions set forth in Exhibit
C: “ACH,” “Database,” “Designated Location,” “Gift Card,” “Gift Card Data,” “Gift Card Equipment,”
“Gift Card Holder,” “Gift Card Number,” “PIN” and “Program.”

     (b) Capitalized terms used but not otherwise defined in this Amendment will have the
meanings set forth in the Service Agreement.

4

 

     9. Entire Agreement.

     This Amendment, together with the Service Agreement and all exhibits attached hereto,
constitutes the entire agreement between the parties regarding the subject matter hereof and
supersedes all prior and contemporaneous agreements and understandings. In the event of a conflict
between this Amendment and the Agreement as it relates to the subject matter hereof, the terms of
this Amendment shall control. Otherwise, all terms and conditions of the Agreement shall likewise
apply to this Amendment.

     IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first set forth
above.

	 	 	 	 	 

	FIRST DATA MERCHANT SERVICES CORPORATION.	 	 
	 
	 	 	 	 
	By: 

Name:

	 	/s/ Rick Learch
 

Rick Learch
	 	 
	Title:

	 	VP	 	 
	 
	 	 	 	 
	iPAYMENT, INC.	 	 
	 
	By: 

Name:

	 	/s/ Joseph Jorling
 

Joseph Jorling
	 	 
	Title:

	 	C.O.O.	 	 

5

 

EXHIBIT A

GIFT CARD SERVICES

Subject to the terms of this Amendment and during its term, FDMS agrees to provide the
following services to each Merchant with which Customer contracts to provide Gift Card Services
and for which Customer submits a complete and accurate Set-up Form to FDMS in the manner directed
by FDMS:

     a. arrange for the production of Gift Cards and services related thereto for the Merchant’s
Program in accordance with the specifications set forth on the Set-Up Form or as mutually agreed by
the parties in writing.

     b. in the case of Gift Cards ordered through FDMS, ensure such Gift Cards conform with the
specifications set forth on the Set-Up Form or as mutually agreed by the parties in writing and are
delivered to the Merchant location specified on the Set-Up Form or as mutually agreed by the
parties in writing via courier and proof of delivery, including time of delivery, full delivery
address, and the name and signature of the person who accepted the shipment, is obtained.

     c. establish and maintain individual accounts on the Database for each Gift Card issued under
a Merchant’s Program. FDMS reserves the right to schedule, from time to time, interruptions of the
Gift Card Services for Database maintenance activities. To the extent possible, such interruptions
will be scheduled to minimize impact to Customer and its Merchants.

     d. provide the Merchant with the capability to process transactions with Gift Cards through
Gift Card Equipment at Merchant’s Designated Locations.

     e. authorize or decline Gift Card transactions transmitted by Merchants from Designated
Locations based on a comparison of the proposed transaction amount and the current account balance
of the designated Gift Card.

     f. during times designated by FDMS, provide a help desk staffed with live operators who will
provide support to a Merchant related to its Program.

     g. provide an IVR number for Merchants and Gift Card Holders to obtain Gift Card balances.

     h. retain the Merchant’s Gift Card Data on the Database until the earlier of termination of
the Merchant’s Program or this Amendment.

     i. provide Gift Card transaction reports accessible via a designated Internet site. FDMS
may, in its discretion, provide additional or custom reports or report formats, as may be
requested by Customer from time to time, and the Exception Development Fee will apply.

     j. retain the Gift Card Data for each Gift Card on the Database for a period of twenty-four
(24) months following the date that an account balance reaches zero. Thereafter, FDMS may remove
the Gift Card Data from the Database and archive such Gift Card Data in any manner it deems
reasonable. Notwithstanding the foregoing: (a) During the first twelve (12) months following the
expiration or termination of any Merchant Agreement, FDMS will compile a data report of such
Merchant’s Gift Card Data stored in the Database in FDMS’s standard format within ninety (90) days
of such Merchant’s written request for such report and the Database Information Transfer Fee shall
apply. FDMS shall have no obligation to Customer or such Merchant with respect to such Merchant’s
Gift Card Data following delivery to of this report to Merchant, (b) Provided, however, that,
within ninety (90) days after

6

 

termination of this Amendment, FDMS will compile a data report of each Merchant’s Gift Card Data
stored in the Database in FDMS’s standard format and the Database Information Transfer Fee shall
apply. FDMS shall have no obligation to Customer or any Merchant with respect to Customer’s or any
Merchant’s Gift Card Data following delivery of this report to Customer.

     k. produce and mail monthly billing statements for Gift Card Services to the Merchant
and collect related fees from Merchants on behalf of Customer at rates established by Customer

7

 

EXHIBIT B

FEES

*

 

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

8

 

EXHIBIT C

SAMPLE TERMS AND CONDITIONS FOR

MERCHANT GIFT CARD PROCESSING AGREEMENT

This Gift Card Processing Agreement (this “Agreement”) is by and between [INSERT COMPANY NAME], a                     
corporation, having offices located                                         ,                                    
     ,                     
(“Company”), and the merchant whose name and address are shown on the last page of this
Agreement (“Merchant”). This Agreement shall be effective as of the date executed by
Merchant (the “Effective Date”).

1. Definitions. Capitalized terms used herein shall have the meanings given to such terms
as set forth in this Section 1 or as defined elsewhere in this Agreement.

a. “ACH” means the Automated Clearing House system.

b. “Affiliate” means, with respect to either party, any entity that controls, is controlled by or
is under common control with such party.

c. “Database” means the database on which Gift Card Data for each Gift Card issued under the
Program is maintained.

d. “Designated Location” means any store or other place of business (including a direct
marketing program or Internet site), located in the U.S.A., that Merchant has provided written
notice of to Company and at or through which Merchant issues Gift Cards and/or processes
transactions using Gift Cards issued under the Program. Designated Locations include any help desk
or IVR through which transactions are processed under the Program.

e. “Gift Card” means an encoded device that accesses Gift Card Data maintained in the Database.

f. “Gift Card Data” means the current value and record of transactions corresponding to each Gift
Card issued under the Program.

g. “Gift Card Equipment” means any POS Terminal, software or other similar telecommunications
equipment that has been programmed and certified to Company’s specifications in order to
transmit Gift Card Data and process online transactions under the Program.

h. “Gift Card Number” means the identifying number of a Gift Card.

i. “Gift Card Production Company” means a company selected and retained
by Company or Merchant to produce Gift Cards and provide related products
or services for the Program.

j. “Gift Card Holder” means any person in possession of or that uses a Gift
Card.

k. “IVR” means an automated interactive voice response system accessed via
a toll-free telephone number.

l. “PIN” means a personal identification number.

m. “POS Terminal” means an electronic point-of-sale terminal placed in a
Designated Location which is connected to Company’s system via telephone
lines and is designed to swipe Gift Cards.

n. “Program” means Merchant’s program pursuant to which Merchant issues
Gift Cards to Gift Card Holders and Company provides the Services to
enable such Gift Card Holders to use such Gift Cards to purchase goods and
services at Designated Locations.

o. “Services” means the services provided by Company in connection with
the Program as further described in this Agreement.

2. Services. Company agrees to provide the Services set forth below in connection with the
Program.

a. Company will arrange for the production of all Gift Cards and all other services related thereto
by the Gift Card Production Company for the Program in accordance with the specifications and fees
set forth on the Gift Card Application and Set-up Form (the “Gift Card Set-up Form”), which is
incorporated by reference herein.

b. Company
shall establish and maintain Gift Card Data on the Database.

c. Company shall provide Merchant with the capability to process selected transactions under the
Program through Gift Card Equipment at Designated Locations.

d. Upon receipt of transaction information from a Designated Location by the Database, Company will
compare the proposed transaction amount with the account balance maintained on the Database
corresponding to the Gift Card or Gift Card Number that was presented at the Designated Location.
If the account balance is greater than or equal to the amount of the
proposed transaction, Company
will authorize the transaction. If the account balance is less than the amount of the proposed
transaction, Company will decline the
transaction. If Merchant’s Gift Card Equipment supports “split tender,” and the account balance is
less than the amount of the proposed transaction, Company will authorize the transaction for the
amount of the account balance, and return a message and/or receipt to the Gift Card Equipment
showing the remaining amount of the transaction to be collected by Merchant. Merchant understands
and agrees that an authorization by Company indicates only the availability of sufficient value on
a Gift Card account at the time of authorization and does not warrant that the person presenting
the Gift Card or Gift Card Number is authorized to use such Gift Card or Gift Card Number.

e. Company shall provide an IVR, twenty-four (24) hours per day, seven (7) days per week, through
which Merchant and Gift Card Holders may obtain Gift Card balances.

f. Company shall provide a Gift Card product support help desk through which Merchant may process
selected transactions under the Program. Support is currently available Monday through Friday,
8:00 a.m. to 8:00 p.m. EST (excluding holidays). The hours and days of support are subject to
change at any time; provided that (i) Company will provide advance notice of any change in the
hours and days; and (ii) the total number of hours shall not be less than 40 in any regular work
week (excluding holidays).

g. Company will provide Merchant with Gift Card transaction reports, accessible by Merchant through
a designated Internet site. Company will maintain reports on the Internet site for Merchant’s use
for a period of sixty (60) days. Company may, in its discretion, provide additional or custom
reports or report formats, as may be requested by Merchant from time to time, at a fee to be
determined by Company.

h. Merchant will at all times own all right, title and interest in and to all Gift Card Data
generated under the Program. During the Term, Company will retain the Gift Card Data for each Gift
Card on the Database for a period of twenty-four (24) months following the date that the account
balance reaches zero. Thereafter, during the Term, Company may remove the Gift Card Data from the
Database and archive such Gift Card Data in any manner determined by Company in its reasonable
business judgment. Notwithstanding the foregoing, within ninety (90) days of Merchant’s written
request, during the first twelve (12) months following the expiration or termination of this
Agreement, Company will compile a data report of the Gift Card Data stored in the Database, in
Company’s standard format, at a fee to be determined by the Company. Company shall have no
obligations with respect to Merchant’s Gift Card Data following delivery to Merchant.

3. Responsibilities of Merchant. The responsibilities of Merchant are set forth below and elsewhere
in this Agreement.

a. Merchant will accept for processing any transaction initiated by one of its customers using a
Gift Card pursuant to the Services without discrimination with regard to the customer who initiated
the transaction or the Gift Card Equipment at which the transaction was initiated. Gift Cards may
only be used to purchase goods or services of Merchant. Gift Cards shall not be exchangeable for
cash except where required by law.

b. Merchant will maintain all transaction records and other records required by law or regulation
to be maintained in connection with the operation of the Gift Card Equipment or the Program.
Merchant will download and store any all Gift Card transaction reports for future reference. In
the event that Merchant needs a report for a period past sixty (60) days, Company may provide such
requested report to Merchant at a fee to be determined by the Company.

c. Merchant will make its personnel and records available to Company, its agents and
subcontractors, all within such time and in such forms or manner as may be reasonably necessary to
enable Company to perform the Services promptly and in an efficient manner.

12

 

d. Merchant shall be responsible, at its sole cost and expense, for the sale and other distribution
of Gift Cards to Gift Card Holders and for any marketing or advertising of the Program.

e. Merchant shall obtain, operate and maintain, at its sole cost and expense, all Gift Card
Equipment required to enable Merchant to electronically transmit Gift Card Data in accordance with
Company’s specifications from all Designated Locations to the Database.

f. Merchant is solely responsible for obtaining authorization in advance of each transaction.
Merchant is solely responsible for any losses it may incur in conducting transactions when an
authorization is not obtained, including, without limitation, transactions conducted when the
Database or the Gift Card Equipment is not in service. Merchant assumes all risk of erroneous or
fraudulently obtained authorizations, unless such erroneous or fraudulently obtained
authorization is caused directly by Company. Merchant understands and agrees that
an authorization by Company only indicates the availability of sufficient value on a Gift Card
account at the time of authorization and does not warrant that the person presenting the Gift Card
or Gift Card Number is authorized to use such Gift Card or Gift Card Number. Merchant is
responsible for the accuracy of all data transmitted by it for processing by Company.

g. Merchant shall be responsible for accessing and comparing the reports supplied by Company to its
own records and promptly notifying Company of any necessary adjustments to Gift Card accounts.
Merchant acknowledges that Company will make adjustments to Gift Card accounts pursuant to
Merchant’s instructions, and Company and its agents and subcontractors shall have no liability for
any errors to Gift Card accounts that are made in accordance with Merchant’s instructions.

h. Merchant shall comply with all laws and regulations applicable to the Program. Merchant
acknowledges and agrees that it is solely responsible for interpreting all laws and regulations
applicable to the Program, for monitoring changes in laws and regulations applicable to the
Program, and for determining the requirements for compliance with laws and regulations applicable
to the Program. Company shall be entitled to rely upon and use any and all information and
instructions provided by Merchant for use in performing the Services, and Company and its agents
and subcontractors shall have no liability whatsoever for any noncompliance of such information or
instructions with laws or regulations.

i. As between Merchant and Company, Merchant shall bear all risk related to the loss or theft of,
alteration or damage to, or fraudulent, improper or unauthorized use of any Gift Card, Gift Card
Number or PIN: (i) in the case of Gift Cards ordered through Company, upon delivery of such Gift
Cards to Merchant or Merchant’s Designated Location, as applicable, and (ii) in the case of Gift
Cards obtained by Merchant from a third party or Gift Cards which Merchant requests to be
delivered in a pre-activated state, whether such loss occurs before or after delivery of such Gift
Cards to Merchant or Merchant’s Designated Location.

j. Company and Merchant agree that during the Term: (i) Company will be the sole and exclusive
provider of the Services to Merchant; and (ii) Merchant will not directly or indirectly either
itself or through a third party, offer or promote any other proprietary, closed network, online
Gift Card or similar access device.

k. Merchant is responsible for any settlement of funds among Designated Locations.

l. Merchant acknowledges and understand that the scope of Services provided for under this
Agreement relate solely to Gift Cards and the Program, and that Company’s agreement to provide
such Services does not entitle or qualify Merchant to receive any other type of services,
including other card processing services, such as credit card processing services.

4. Fees and Payment.

a. Merchant shall pay Company the fees set forth on Gift Card Set-up Form. Merchant shall also be
responsible for the payment of any taxes imposed by any applicable governmental authority in
connection with any products or services covered by this Agreement (other than those taxes based
solely on the net income of Company). All fees for the Services shall be paid via an ACH transfer
of funds from a bank account designated by Merchant. To authorize the ACH transfers. Merchant
agrees to execute the ACH authorization on the Gift Card Set-up Form. In the event that fees
cannot be collected from Merchant as set forth above, Company reserves and may exercise all other
rights to collect any fees due. All fees not paid within thirty (30) days of the date of Company’s
merchant statement setting forth
such fees shall incur interest at the rate equal to the lesser of (i) ten percent (10%) per annum,
or (ii) the maximum rate permitted by applicable law from the date on which payment should have
been made until the date on which Company receives the payment.

b. Company may increase rates from time to time to the extent necessary to pass though increases in
the costs of the underlying goods and services used or provided by Company in connection with the
provision of Services. Any such adjustments shall become effective upon written notice to Merchant.

c. Company may also increase rates for any other reason upon 30 days written notice to Merchant.

5. Term and Termination.

a. This Agreement shall begin upon the Effective Date and shall continue until terminated as
provided herein (the “Term”).

b. This Agreement may be terminated at any time: (i) by either party with (30) days prior written
notice; (ii) by Company if Merchant fails to pay any amount due within ten (10) business days
after written notice to Merchant of its failure to pay such amount; (iii) by Company upon written
notice to Merchant in the event that Merchant’s operation of the Program results in a violation of
law or regulation (by Merchant or Company); (iv) by Merchant if Company increases its rates under
Section 4(c) above and Merchant provides thirty (30) days written notice of termination within
thirty (30) days of receiving notice of said increase; or (v) by either party upon written notice
to the other after the filing by the other of any petition in bankruptcy or for reorganization or
debt consolidation under the federal bankruptcy laws or under any comparable law, or upon the
other party’s making of an assignment of its assets for the benefit of creditors, or upon the
application of the other party for the appointment of a receiver or trustee of its assets.

c. Termination of this Agreement shall not affect Merchant’s obligation to pay for services
rendered or obligations due and owing under this Agreement prior to termination.

d. The provisions of Sections 3(f), (g), (h), (i), and (k), and Sections 4, 5(c),
6, 7, 8, 11 and 12 hereof shall survive any termination of this Agreement. Any other provisions of
this Agreement which are to be performed after termination or expiration to effectuate their intent
shall survive termination of this Agreement.

6. Confidential Information.

a. For the purposes of this Agreement, the term “Confidential Information” means any data or
information obtained by one party hereto (“Recipient”) regarding the other party (“Discloser”) or
their respective businesses that is not generally known to the public, including, without
limitation: (i) information about the products, services, operations, procedures, customers,
suppliers, sales, pricing, business plans and marketing strategies of Discloser, its Affiliates and
the customers, Merchants and suppliers of any of them; (ii) any scientific or technical
information, design, process, procedure, formula, or improvement that is commercially valuable and
secret in the sense that its confidentiality affords Discloser a competitive advantage
over its competitors; (iii) all confidential or proprietary concepts, documentation, reports,
data, specifications, computer software, source code, object code, flow charts, databases,
inventions, know-how, show-how and trade secrets, whether or not patentable or copyrightable; and
(iv) the terms of this Agreement, including any schedules, addenda, amendments or
other attachments hereto.

b. Confidential Information of Discloser shall be used by Recipient only to exercise its rights and
to perform its obligations under this Agreement. Recipient shall receive the Confidential
Information of Discloser in confidence and not disclose the Confidential Information to any
third party, except as may be agreed upon in writing by Discloser. Recipient shall safeguard all
Confidential Information of Discloser using a reasonable degree of care, but not less than that
degree of care used by it in safeguarding its own similar information or material. Upon request
by Discloser or upon termination of this Agreement, Recipient shall return to Discloser or destroy
all Confidential Information of Discloser in its possession or control.

c. The obligations of confidentiality and restrictions on use in this Section shall not apply to
any Confidential Information that: (i) was in the public domain prior to the date of this Agreement
or subsequently came into the public domain through no fault of Recipient; (ii) was received from a
third party free of any obligation of confidence of Recipient to the third party and which third
party, to Recipient’s knowledge, was not under an obligation to keep the information confidential;
(iii) was already in Recipient’s possession prior to receipt from Discloser; (iv) is required to be
disclosed by law,

 

 

regulation or court order after giving Discloser as much advance notice as practical of the
possibility of disclosure; or (v) is subsequently and independently developed by Recipient’s
employees, consultants, agents or subcontractors without use of or reference to the Discloser’s
Confidential Information.

d. Except as specifically provided for herein, this Agreement does not confer any right, license,
interest or title in, to or under the Confidential Information of Discloser to Recipient. Except as
specifically provided for herein, no license is hereby granted to Recipient under any
patent, trademark, copyright, trade secret or other proprietary rights of Discloser.

e. Recipient acknowledges that breach of the restrictions on use or disclosure of any Confidential
Information of Discloser would result in immediate and irreparable harm to Discloser, and money
damages would be inadequate to compensate for that harm. Discloser shall be entitled to equitable
relief, in addition to all other available remedies, to redress any breach.

7. Indemnification.

a. Merchant shall indemnify and hold harmless Company, its directors, officers, employees, agents,
subcontractors and Affiliates from and against any and all third party claims, losses, liabilities,
damages and expenses, including reasonable attorneys’ fees, (collectively “Claims”) to the extent
that any such Claim is caused by or arises out of: (i) any failure of Merchant to comply with any
law or regulation applicable to the Program; (ii) any dispute between Merchant and any Gift Card
Holder, including, without limitation, any dispute regarding the goods or services purchased using
a Gift Card or the payment of any amounts owed or alleged to be owed by one or more such persons to
any other such persons; (iii) any instructions or procedures that Merchant may provide to Company
in connection with the Program and Company’s compliance therewith; (iv) any actual or alleged loss
or theft of, alteration or damage to, or fraudulent, improper or unauthorized use of any Gift
Card, Gift Card Number or PIN; (v) use or operation of Gift Card Equipment by Merchant; and (vi)
any Claim or action against Company for actual or alleged infringement of any patent, copyright,
trademark, trade secret or other proprietary right of any person arising in connection with the
production of Gift Cards or related products for Merchant using artwork, designs, specifications
or concepts provided by Merchant.

b. Company shall indemnify and hold harmless Merchant and its directors, officers, employees,
agents, subcontractors and Affiliates from and against any and all third party Claims to the extent
that any such Claim is caused by or arises out of: (i) any failure of Company to comply with any
law or regulation applicable to Company’s business as a service provider; or (ii) any error in the
Database, unless the error is caused by incorrect information submitted by Merchant or is otherwise
made in accordance with Merchant’s instructions.

8. Limitation of Liability; Disclaimer of Warranties.

a. NOTWITHSTANDING ANY PROVISION IN THIS AGREEMENT TO THE CONTRARY, THE CUMULATIVE AGGREGATE
LIABILITY OF COMPANY, ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SUBCONTRACTORS AND
AFFILIATES FOR ANY LOSSES, CLAIMS, SUITS, CONTROVERSIES, BREACHES, OR DAMAGES ARISING OUT OF
RELATED TO THIS AGREEMENT FOR ANY CAUSE WHATSOEVER AND REGARDLESS OF THE FORM OF
ACTION OR LEGAL THEORY, SHALL BE LIMITED TO THE ACTUAL DIRECT DAMAGES SUFFERED BY MERCHANT
AND, IN ANY EVENT, SHALL NOT EXCEED ONE HUNDRED THOUSAND DOLLARS ($100,000).

b. IN NO EVENT SHALL EITHER PARTY, THEIR AFFILIATES, OR ANY OF THEIR OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, SUBCONTRACTORS BE LIABLE FOR LOST PROFITS, LOST BUSINESS
OPPORTUNITIES, LOST REVENUES, EXEMPLARY, PUNITIVE, SPECIAL, INCIDENTAL,
INDIRECT OR CONSEQUENTIAL DAMAGES, EACH OF WHICH IS HEREBY EXCLUDED BY
AGREEMENT OF THE PARTIES REGARDLESS OF WHETHER SUCH DAMAGES WERE FORESEEABLE OR WHETHER EITHER
PARTY OR ANY ENTITY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

c. THIS AGREEMENT IS A SERVICE AGREEMENT, AND EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT, COMPANY DISCLAIMS ALL OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, ANY
WARRANTIES REGARDING QUALITY, SUITABILITY, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OR
NONINFRINGEMENT (IRRESPECTIVE OF ANY COURSE OF DEALING, CUSTOM OR USAGE OF TRADE)
OF ANY SERVICES OR ANY GOODS PROVIDED INCIDENTAL TO THE SERVICES PROVIDED UNDER THIS AGREEMENT.

9. Publicity. Neither Company nor Merchant shall release or publish news releases, public
announcements or other publicity relating to this Agreement or to the transactions contemplated by
it without the prior review and written approval of the other party; provided, however, that either
party may make such disclosures as are required by legal, accounting or regulatory
requirements after making reasonable efforts in the circumstances to consult in advance with the
other party. Notwithstanding the foregoing, Merchant agrees that Company may refer to Merchant as
a customer of Company and include the name of Merchant in its customer lists, including any
customer list posted on Company’s Internet site(s) or the Internet site(s) of a Company Affiliate.

10. Force Majeure. Neither party shall be liable for any default or delay in the performance of its
obligations under this Agreement if and to the extent such default or delay is caused, directly or
indirectly, by fire, flood, elements of nature or other acts of God, any outbreak or escalation of
hostilities, war, riots or civil disorders, utility or telecommunications failures or fluctuations,
or any other cause, whether similar or dissimilar to those referenced above, beyond the reasonable
control of such party. In any such event, the nonperforming party shall be excused from any
further performance and observance of the obligations so affected only for as long as
such circumstances prevail and such party continues to use commercially reasonable
efforts to recommence performance or observance as soon as practicable. Notwithstanding the
foregoing, in no event shall a delay or failure to pay any fees due under this Agreement in a
timely manner be excused by force majeure, regardless of the reason for such failure.

11. Patents, Copyrights, Intellectual Property, etc.

a. Merchant shall have no interest whatsoever, including copyright interests, franchise interests,
license interests, patents rights, property rights or other interest in the Services provided
hereunder. These provisions are not to be construed as granting to Merchant any patent rights or
license in any patent, which may be obtained in respect of the Services. Artwork created by
Company, on behalf of Merchant, remains the property of Company. Merchant retains ownership of any
artwork supplied to Company.

12. General.

a. All notices hereunder shall be in writing and shall be deemed given when personally delivered,
or when sent by facsimile transmission with receipt confirmed, one day after being sent by a
reputable overnight courier, or three business days after being mailed by certified mail, return
receipt requested, in each case directed: (a) if to Merchant, to the address shown above its
signature; (b) if to Company, to                                                             ,
Attention:                                         ; or (c) to such other
address for each party as is specified by such party in a notice given to the other party.

b. The parties agree that they are acting hereunder as independent contractors and that
nothing contained in this Agreement shall be deemed or construed by the parties hereto, or any
third party, to create the relationship of agency, partnership or joint venture between the
parties. No party to this Agreement has, and shall not hold itself out as having, any authority to
enter into any contract or create any obligation or liability on behalf of, in the name of, or
binding upon the other parties.

c. Merchant may not assign its rights or delegate its obligations under this Agreement without
Company’s prior written consent, which consent shall not be unreasonably withheld. Any assignment
in violation of this Section shall be null and void. All provisions contained in this Agreement
shall extend to and be binding upon the parties hereto or their respective successors and
permitted assigns.

d. Company may subcontract with one or more Affiliates or third parties to provide any service or
services required to be provided by Company hereunder, provided that no such use of
subcontractors shall relieve Company of its obligations under this Agreement.

e. This Agreement constitutes the complete and exclusive statement of the agreement between the
parties, and supersedes and merges all prior proposals and all other agreements, whether oral or
written, between the parties relating

 

 

to the subject matter hereof. Any documents of Merchant or Company referring to such party’s terms
and conditions, such as vendor manuals, codes of conduct, requests for proposals, purchase orders
or invoices that are not expressly contained or incorporated herein, or are contrary to the terms
and conditions contained herein, shall not be binding upon the parties.

f. No change, modification, or waiver of any term or condition of the Agreement shall be valid
unless in writing signed by each party. A party’s waiver of a breach of any term or condition in
the Agreement shall not be deemed a waiver of any subsequent breach of the same or another term or
condition.

g. The parties intend every provision of this Agreement to be severable. If a court of competent
jurisdiction determines that any term or provision is illegal or invalid for any reason, the
illegality or invalidity shall not affect the validity of the remainder of this Agreement.

h. This Agreement is entered into solely for the benefit of Company and Merchant, and shall not
confer any rights upon any person not expressly a party to this Agreement.

i. The laws of the State of Colorado, excluding its rules on conflicts of laws, shall govern the
interpretation, validity, and enforcement of this Agreement. Any litigation arising out of or
related to this Agreement shall be commenced
and maintained exclusively in the state or federal courts sitting in the city and county of Denver
and the State of Colorado. COMPANY AND MERCHANT HEREBY AGREE THAT GENERAL CONTRACT LAW SHALL GOVERN
THIS AGREEMENT, AND EXCEPT TO THE EXTENT PROHIBITED BY APPLICABLE LAW, THE UNIFORM COMPUTER
INFORMATION TRANSACTIONS ACT AS ADOPTED IN ANY FORM IN ANY STATE SHALL NOT APPLY TO THIS AGREEMENT.

j. COMPANY AND MERCHANT IRREVOCABLY WAIVE ANY AND ALL RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN
ANY JUDICIAL PROCEEDING INVOLVING ANY CLAIM RELATING TO THIS AGREEMENT.

k. COMPANY AND MERCHANT HEREBY IRREVOCABLY WAIVE PERSONAL SERVICE OF PROCESS AND CONSENT THAT
SERVICE OF PROCESS UPON IT MAY BE MADE BY CERTIFIED MAIL OR FACSIMILE, IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 12(a).

BY SIGNING BELOW, THE PARTIES ACKNOWLEDGE THAT THEY HAVE READ, UNDERSTAND AND AGREE TO
ALL OF THE TERMS AND CONDITION CONTAINED HEREIN, INCLUDING ALL TERMS AND CONDITIONS
INCORPORATED BY REFERENCE.

	 	 	 	 	 	 	 	 	 	 	 

	Merchant

	 	 	 	Name:
	 	[COMPANY]	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Address:

	 	 
	 	 	 	Signature:
	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	City/State/Zip:

	 	 	 	 	 	Printed Name:
	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Signature:

	 	 	 	 	 	Title:
	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Printed Name:

	 	 	 	 	 	Date:
	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:

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