Document:

exv10w14

Exhibit
10.14

SEVENTH AMENDMENT TO SERVICE AGREEMENT

     This Seventh Amendment to Service Agreement (this “Amendment”) is made and entered into as of
this 29th day of September, 2006 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 by amendments dated October 25, 2002,
November 27, 2002, January 8, 2004, May
25, 2004 and July 11, 2005 (the “Service Agreement”).

     B. Customer, as successor in interest to 1st Merchant Bank Card, and Concord
Payment Services, Inc. successor in interest to BUYPASS Corporation and an Affiliate of FDMS, are
parties to that certain Participation Agreement dated as of April 13, 1998 (the “1st
Merchant Participation Agreement”). The parties now desire to terminate the 1st Merchant
Participation Agreement and to incorporate the services provided thereunder into the Service
Agreement.

     C. Customer, as successor in interest to creditcard.com, and Concord Payment Services, Inc.
successor in interest to BUYPASS Corporation and an Affiliate of FDMS, are parties to that certain
Participation Agreement dated as of March 22, 1999 (the “creditcard.com Participation Agreement”).
The parties now desire to terminate the creditcard.com Participation Agreement and to incorporate
the services provided thereunder into the Service Agreement.

     D. Customer and FDMS, along with FDMS’s sponsoring bank partner (“Bank”), agree to negotiate
expeditiously and in good faith a Sponsorship Agreement pursuant to which Bank will provide
Customer with sponsorship and Clearing Bank services related to the solicitation of merchants and
processing and settlement of Transaction Card Transactions for certain of Customer’s Accounts
processed under the terms and conditions of this Agreement (the “Sponsorship Agreement”). The
parties acknowledge and agree that the execution of the Sponsorship Agreement is an element of the
bargain between the parties, and that FDMS would not be entering into this Amendment and offering
the prices contained herein without knowing that it would also be entering into the Sponsorship
Agreement.

     E. 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. Except as otherwise specifically set forth herein or in Exhibit B attached hereto, the
terms of this Amendment will be effective as of July 1, 2006.

     2. Section 2.2 of the Service Agreement is hereby deleted in its entirety and replaced with
the following:

Page 1

 

          2.2 Communication Links.

          (a) FDMS periodically shall install or provide the means for communicating data from
its facilities or equipment to Customer’s or Customer’s designated third parties’
facilities or equipment, subject to FDMS’s acceptance and qualification of each such third
party and such third party’s execution of and compliance with a third party service
provider agreement in a form acceptable to FDMS. Any interface between any such third party
and the FDMS System will be developed and established at its or Customer’s sole cost and
expense. The method of transmission and the media employed will be determined by FDMS
taking into consideration relevant factors such as traffic type, inbound and outbound
message sizes, traffic loading distribution, and the equipment or devices that are or may
be used.

          (b) If Customer desires to interface with the FDMS System to directly transmit to or
receive cardholder data from FDMS for any purpose other than reviewing reports or
processing chargebacks, Customer acknowledges that it first must comply with FDMS’s
then-current requirements for third party processors, including execution of FDMS’s third
party processor agreement.

     3. Section 2.3 of the Service Agreement is hereby deleted in its entirety and replaced with
the following:

          2.3 Compliance With Law.

          (a) Customer is subject to a variety of federal, state and local laws, regulations and
judicial and administrative decisions and interpretations applicable to its Transaction
Card business, including, but not limited to, OFAC regulations, as amended or promulgated
from time to time (“Legal Requirements”). FDMS shall cooperate with Customer in resolving
issues relating to Customer’s compliance with the Legal Requirements in accordance with the
terms of this Agreement, including this Section 2.3.

                    (i) Customer is solely responsible for (i) monitoring and interpreting the Legal
Requirements, (ii) determining the particular actions, disclosures, formulas, calculations
and procedures required for compliance with the Legal Requirements (whether to be performed
by FDMS or by Customer) and (iii) maintaining an ongoing program for compliance with the
Legal Requirements. In addition, Customer is solely responsible for reviewing and selecting
the parameter settings and programming features and options within the FDMS System that
will apply to Customer’s Transaction Card programs, and for determining that its selection
of such settings, features and options is consistent with the Legal Requirements and with
the terms and conditions of Customer’s Accounts. In making such determinations, Customer
may rely on the written description of such settings, features and options in the User
Manuals, customer bulletins and other system documentation provided by FDMS to Customer.

                    (ii) As promptly as possible after it first obtains knowledge thereof, Customer shall
disclose to FDMS any violation of a Legal Requirement with respect to or related to a
Transaction processed pursuant to this Agreement where such violation

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could reasonably result in FDMS’s violation of a FDMS Legal Requirement and
shall take such remedial or other actions as may be required or prudent under the
circumstances.

               (b) FDMS is solely responsible for compliance with all laws, regulations and judicial
and administrative decisions applicable to FDMS as a third party provider of data
processing services, including, but not limited to, OF AC regulations, as amended or
promulgated from time to time (“FDMS Legal Requirements”). FDMS will not be responsible for
any violation by Customer of a Legal Requirement to the extent such violation occurs as a
result of performance by FDMS of the Services in accordance with the FDMS Legal
Requirements, instructions of Customer or written procedures provided by or approved by
Customer. Customer shall cooperate with FDMS in resolving issues relating to FDMS’
compliance with the FDMS Legal Requirements in accordance with the terms of this Agreement,
including this Section 2.3.

                    (i) As promptly as possible after it first obtains knowledge thereof, FDMS shall
disclose to Customer any violation of a FDMS Legal Requirement with respect to or related
to a Transaction processed pursuant to this Agreement where such violation could reasonably
result in Customer’s violation of a Legal Requirement and shall take such remedial or other
actions as may be required or prudent under the circumstances.

                    (ii) Customer acknowledges and agrees that FDMS shall have no obligation to provide
processing services to Customer or any of its Merchants or to process any Transactions in
violation of any FDMS Legal Requirement. If FDMS withholds processing services pursuant to
this Section 2.3(b)(iii), FDMS will give prompt notice of such to Customer.

               (c) Subject to the terms of Article 10, FDMS and Customer shall cooperate with each
other in providing information or records in connection with examinations, requests or
proceedings of each other’s regulatory authorities.

     4. Section 3.2 of the Service Agreement is hereby deleted in its entirety and of no further
force and effect.

     5. Section 4.1 of the Service Agreement is hereby deleted in its entirety and replaced with
the following:

     4.1 Processing Fees. Customer shall pay FDMS the Processing Fees set forth in
Exhibit B to this Agreement. All invoices and items billed will be deemed final and not
subject to further review or dispute by either party after seventy-five (75) days after the
date such item is billed or should have been billed to Customer. Customer will not be
liable for any Processing Fees or other fees unless such fees are set forth in this
Agreement (including Exhibit B), an amendment to this Agreement, a separate agreement or
other tangible documentation (including email) whereby the parties agree to the pricing for
any new services or products.

     6. Section 4.4 of the Service Agreement is hereby deleted in its entirety and of no further
force and effect.

Page 3

 

     7. Section 6.1 of the Service Agreement is hereby deleted in its entirety and replaced
with the following:

          6.1 Limitation on Liability.

          (a) Each of Customer’s and FDMS’s cumulative liability for any loss or damage, direct
or indirect, for any cause whatsoever (including, but not limited to, those arising out of
or related to this Agreement) with respect to claims (whether third party claims, indemnity
claims or otherwise) relating to events in anyone Processing Year shall not under any
circumstances exceed the amount of the Processing Fees paid to FDMS by Customer pursuant to
this Agreement for Services performed during the immediately preceding twelve (12) full
months; provided, however, that FDMS’s cumulative liability under Section 11.1(b)(ii) and
Customer’s cumulative liability under Section 11.2(b)(iii) relating to events in anyone
Processing Year shall not exceed three (3) times the amount of Processing Fees paid to FDMS
by Customer pursuant to this Agreement for Services performed during the immediately
preceding twelve (12) full months.

          (b) The monetary limits provided for in Section 6.1(a) 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 or (iii) Processing Fees,
Special Fees, or any other fee, tax, interest or other amount due and owing by Customer
under this Agreement.

     8. Section 8.1 of the Service Agreement is hereby deleted in its entirety and replaced with
the following:

     8.1 Term. This Agreement is effective from the date hereof and shall extend
for eight (8) Processing Years through June 30, 2010 (the “Original Term”). Processing Year
1 of the Term shall commence on July 1, 2002 and continue through June 30, 2003. For
purposes of this Agreement, a “Processing Year” means each twelve (12) month period
commencing on the first day of July and ending on the last day of following June.

     9. Section 9.1 of the Service Agreement is hereby amended by the addition of the following new
subsection (h):

          (h) if Customer breaches any material representations, warranties, obligations, or
covenants in this Agreement and fails to cure such breach within sixty (60) calendar days
after written notice of the breach is provided to Customer by FDMS; provided however, that
if Customer is attempting in good faith to cure such breach within said sixty (60) day cure
period but the nature of the breach prevents a cure within sixty (60) days, then Customer
shall be allotted an additional number of days to cure, provided the total number of days
of the cure period shall be no greater than one hundred twenty (120) days.

     10. Section 9.2 of the Service Agreement is hereby amended by the addition of the following
new subsection (a)(vi):

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          (vi) if FDMS breaches any material representations, warranties, obligations, or
covenants in this Agreement and fails to cure such breach within sixty (60) calendar days
after written notice of the breach is provided to FDMS by Customer; provided however, that
if FDMS is attempting in good faith to cure such breach within said sixty (60) day cure
period but the nature of the breach prevents a cure within sixty (60) days, then FDMS shall
be allotted an additional number of days to cure, provided the total number of days of the
cure period shall be no greater than one hundred twenty (120) days; provided further,
however, that if a breach relates to issues that would require system changes to cure, the
initial sixty day period shall be automatically extended by one calendar day for each
calendar day during such sixty (60) day period (or the applicable extended period) during
which there is a “freeze” on changes to the FDMS System, if any.

     11. Section 9 .2(b) of the Service Agreement is hereby deleted in its entirety and of no
further force and effect.

     12. Section 9.4 of the Service Agreement is hereby deleted in its entirety and of no further
force and effect.

     13. Sections 11.1 and 11.2 of the Service Agreement are hereby deleted in their entirety and
replaced with the following:

          11.1 FDMS’s Representation.

          (a) FDMS represents and warrants that the execution and delivery of this Agreement and
the consummation of the transaction herein contemplated does not conflict in any material
respect with or constitute a material breach or material default under the terms and
conditions of any documents, agreements or other writings to which it is a party.

          (b) Data Security Requirements Compliance.

               (i) FDMS represents and warrants that it is, arid during the Term of this Agreement
will remain, in compliance with all applicable material Data Security Requirements at its
expense.

               (ii) In addition to the obligations set forth in Exhibit E of this Agreement, FDMS
shall indemnify and hold Customer harmless from and against any and all liabilities,
claims, suits, damages, losses, costs and expenses, including any fines, penalties,
reasonable attorney fees and costs of settlement, whether third party claims, indemnity
claims or otherwise (“collectively, “Claims”) to the extent that the Claim is caused by,
relates to or arises out of (1) any security breach in or intrusion into FDMS’s computer
system, or (2) the actual loss or theft of any of Customer’s information or records
containing Cardholder or Transaction Card data or any bank account information of a payee
or payor that is generated or stored by, or on behalf of, FDMS. FDMS shall not have any
liability for any Claim to the extent such Claim is caused by, relates to or arises out of
any security breach in the computer system of Customer, Customer’s Merchants, or Customer’s
or its Merchants’ agents or third party service providers, or the actual loss or theft of
any information or records containing

Page 5  

 

Cardholder or Transaction Card data or any bank account information of a payee or
payor that is generated or stored by, or on behalf of, Customer, Customer’s Merchants, or
Customer’s or its Merchants’ agents or third party service providers.

               (iii) As promptly as possible after it first obtains knowledge thereof, FDMS shall notify
Customer of any security breach or data compromise of its computer system that directly impacts
cardholder data with respect to Customer’s Accounts. As promptly as possible after it first
obtains knowledge thereof, FDMS shall notify Customer of any suspected or actual loss or theft of
any information or records relating to Customer’s Accounts containing Cardholder or Transaction
Card data or any bank account information of a payee or payor that is generated or stored by, or
on behalf of, FDMS.

          11.2 Customer’s Representations.

          (a) Customer represents and warrants that the execution and delivery of this Agreement and the
consummation of the transaction herein contemplated does not conflict in any material respect with
or constitute a material breach or material default under the terms and conditions of any
documents, agreements or other writings to which it is a party.

          (b) Data Security Requirements Compliance.

               (i) Customer represents and warrants that it is, and during the Term of this Agreement will
remain, in compliance with all applicable material Data Security Requirements at its expense.

               (ii) Without liability, FDMS has the right to withhold Services, in whole or in part, and
immediately suspend connectivity to the FDMS System with respect to Customer, any of Customer’s
Merchants, or any of Customer’s or its Merchants’ agents or third party service providers if
Customer, such Merchant, or such agent or third party service provider, as applicable, is not in
compliance with all applicable Data Security Requirements until Customer, such Merchant, or such
agent and third party service provider, as applicable, is in compliance with all applicable Data
Security Requirements. If FDMS withholds Services or suspends connectivity pursuant to this Section
11.2(b)(ii), FDMS will give prompt notice of such to Customer.

               (iii) In addition to the obligations set forth in Exhibit E of this Agreement,
Customer shall indemnify and hold FDMS harmless from and against any and all Claims to the extent
that the Claim is caused by, relates to or arises out of (1) any security breach in or intrusion
into Customer’s computer system, or (2) the actual loss or theft of any of its information or
records containing Cardholder or Transaction Card data or any bank account information of a payee
or payor that is generated or stored by, or on behalf of, Customer.

               (iv) As promptly as possible after it first obtains knowledge thereof, Customer shall notify
FDMS of any security breach or data compromise of Customer’s computer system or the computer system
of any of its Merchants or any of

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Customer’s or its Merchants’ agents or third party service providers. As promptly as
possible after it first obtains knowledge thereof, Customer shall notify FDMS of any
suspected or actual loss or theft of any information or records containing Cardholder or
Transaction Card data or any bank account information of a payee or payor that is generated
or stored by, or on behalf of, Customer, any of its Merchants, or any of Customer’s or its
Merchants’ agents or third party service providers.

     14. The addresses set forth in Section 12.3 of the Service Agreement are hereby deleted in
their entirety and replaced with the following:

	 	 	 

	First Data Merchant

	 	First Data Merchant
	Services Corporation

	 	Services Corporation
	6902 Pine Street, PS-11

	 	6200 S. Quebec Street, Suite 260A
	Omaha, NE 68106

	 	Greenwood Village, Colorado 80111
	Attn: Vice President - FSP

	 	Attn: General Counsel
	Telecopy Number:

	 	Telecopy Number: 303-967-5216
	 
	 	 
	If to Customer:

	 	With a copy to:
	 
	 	 
	iPayment, Inc.

	 	iPayment, Inc.
	40 Burton Hills Blvd, Suite 415

	 	26707 West Agoura Hills Road, Suite 100
	Nashville, TN 37215

	 	Calabasas, CA 91302
	Attn: Afshin Yazdian

	 	Attn: Joe Jorling
	Telecopy Number:

	 	Telecopy Number:

     15. The Service Agreement is hereby amended by the addition of a new Section 12.17 to
read as follows:

     12.17 Rights to Customer’s Accounts. For the avoidance of doubt, the parties
acknowledge and agree that FDMS has no legal or equitable interest in Customer’s Accounts
under the terms of this Agreement, and that Customer shall have the sole and absolute right
to convert and transfer any Merchants to other processors.

     16. Exhibit A to the Service Agreement is hereby amended by the addition of a new subsection
IV, as set forth in Attachment A hereto.

     17. Section II of Exhibit B to the Service Agreement is hereby deleted in its entirety and
replaced with the new Section II of Exhibit B attached hereto.

     18. Exhibit C to the Service Agreement is hereby amended by the addition of the following new
definitions:

     “Card or Electronic Payment Association” means (i) Visa, MasterCard and any other
association or card issuer having proprietary rights to and clearing and oversight
responsibilities with respect to any credit or debit card used to effect Transactions and
includes any debit card network utilized to authorize and settle any debit card used to
effect Transactions and (ii) NACHA and any other association or entity having oversight

Page 7

 

responsibilities with respect to electronic payments.

     “CISP” means Visa’s Cardholder Information Security Program, as may be amended from
time to time.

     “Data Security Requirements” means the Payment Card Industry Data Security Standard
developed by MasterCard and Visa, CISP, SDP and other similar requirements that apply to
entities that transmit, process or store Cardholder, Transaction Card or bank account
information, as may be promulgated or amended by a Card or Electronic Payment Association
or any local, state or federal legislative, judicial or administrative authority from time
to time.

     “OFAC” means the United States Department of the Treasury Office of Foreign Assets
Control.

     “SDP” means the MasterCard Site Data Protection Program, as may be amended from time
to time.

     19. Customer and FDMS will use reasonable efforts to convert any acquired merchant portfolios
after July 1, 2006 from a third party processor to the FDMS System; provided, however, that
Customer will not be required to attempt to convert any such merchants if the merchant utilizes a
front-end product solution not supported by FDMS or if the acquired channel refuses to board
accounts on the FDMS System, or if the conversion of such merchants would not make economic or
strategic business sense to the Customer.

     20. The following amendments to the Service Agreement are herby null and void and of no
further force and effect: (i) the Third Amendment to Service Agreement dated as of January 8, 2004;
and (ii) the Fifth Amendment to Service Agreement dated as of July 11, 2005.

     21. The following agreements are herby terminated without penalty to any party and are of no
further force and effect: (i) the 1st Merchant Participation Agreement; and (ii) the
creditcard.com Participation Agreement.

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

     23. In the event of a conflict between this Amendment and the Service Agreement as it relates
to the subject matter of this Amendment, 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.

Page 8

 

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

FIRST DATA MERCHANT SERVICES CORPORATION

	 	 	 	 	 

	By: 

Name:

	 	/s/ Rick Learch
 

Rick Learch
	 	 
	Title:

	 	VP	 	 
	 
	 	 	 	 
	iPAYMENT, INC.
	 	 
	 
	 	 	 	 
	By: 

Name:

	 	/s/ Greg Daily
 

Greg Daily
	 	 
	Title:

	 	CEO	 	 

Page 9 

 

ATTACHMENT A

CONCORD SERVICES

IV. Concord Services

     1. Definitions. Capitalized terms used but not otherwise defined in this
Section will have the meanings set forth in Exhibit C. The following definitions apply
to the terms set forth below:

          (a) “Buypass Transaction” means each instance during which Concord has electronic contact with
a point of sale device of a Merchant of Customer for the purpose of processing a transaction,
credit or refund.

          (b) “Concord” shall mean Concord EFS, Inc. and any entity which, directly or indirectly, owns
or controls, or is owned or controlled by, or is under common ownership or common control with,
Concord EFS, Inc.

          (c) “Concord’s Proprietary Information” shall have the meaning set forth in Section 7 hereof.

          (d) “Concord Services” include Buypass services, ClientLine Services, PINless Debit
Transaction services and EFSnet Web Payment Services, as each is defined in this Section IV.

          (e) “Concord System” means the computer equipment, computer software, and related equipment
and documentation used at any time and from time to time to provide the Concord Services and
includes the “Buypass” (or “Atlanta”) platform.

          (f) “Concord System Specifications” shall mean the specifications, manuals, technical and
operating data and operating standards adopted, amended or supplemented and published from time to
time by Concord with respect to the Concord System.

          (g) “Network” means any debit card network utilized to authorize and settle any debit card
used to effect Transactions and includes STAR, NYCE and Pulse debit card networks and such
additional debit card networks that FDMS or Concord may add in their sole discretion.

     2. Buypass services. FDMS, either directly or through its Affiliates, including
Concord, or other third party service providers, shall make available to Customer and certain of
its Merchants as agreed upon by the parties data processing services on the “Buypass” platform. In
exchange for such services, Customer will pay the fees set forth in Exhibit B in the manner set
forth in this Section IV. Buypass Transaction detail is only available through
ClientLine® Services.

     3. ClientLine Services. Concord has developed a product that allows Customer to access
certain databases of Buypass Transaction information maintained by Concord and communicate certain
instructions to Concord using an Internet connection to access a Concord internal web page
(“ClientLine®
Services”). FDMS, either directly or through its Affiliates, including
Concord, or other third party service providers, shall make available to Customer, and Customer
shall access, ClientLine® Services in the manner described and
in accordance with the terms and conditions set forth below. The specific features and functions
available through ClientLine® Services are detailed in ClientLine® Services
documentation that will be provided to Customer by FDMS or Concord, as may be promulgated, amended
or supplemented by FDMS or Concord from time to time (the “Documentation”). As referenced herein,
such features and functions include, among other things,

Attachment A, Page 1 

 

(i) access to information regarding Buypass Transactions, (ii) access to other
proprietary information of Concord (“Concord Proprietary Information”), (iii) the ability to
communicate certain instructions to FDMS or Concord as specifically provided in the Documentation
(“Communications Interface”), (iv) access to and creation of Buypass Transaction related reports
(“Reporting Features”), and (v) generation of Buypass Transaction related statements. Customer
acknowledges and agrees that only the Reporting Features of the ClientLine® Services are
currently available to Customer and any additional features and functionality of the
ClientLine® Services that are made available by FDMS to Customer will be subject to
additional terms, conditions and fees mutually agreed to by the parties in writing.

     (a) Equipment. Customer shall be solely responsible, at its expense, for the acquisition,
repair and maintenance of all equipment and software necessary for it to utilize
ClientLine® Services (the “Equipment”), including without limitation a personal
computer, modem, and telecommunications and web browser software. All such Equipment must comply
with all specifications and requirements set forth in the Documentation from time to time. Customer
acknowledges that for ClientLine® Services to function properly, and to enable Customer
to fully use ClientLine® Services, Customer must maintain the Equipment and keep it in
good working order and repair, including by timely installing software upgrades or modifications.

     (b) License. All right, title and interest in and to ClientLine® Services and the
Communications Interface and Concord Proprietary Information available through the
ClientLine® Services, including without limitation all copyrights or renewals thereof,
are and shall remain exclusively owned by Concord. Until ClientLine® Services are
terminated as set forth in this Section IV, FDMS grants to Customer (i) a nonexclusive right to
access and use ClientLine® Services and the Concord Proprietary Information available
through the ClientLine® Services, and (ii) a limited, nonexclusive, revocable,
sublicense to access and use the Communications Interface, for the purposes contemplated by and
subject to the terms, conditions and limitations contained in this Paragraph and the Documentation.

     (c) License Limitations. ClientLine® Services and the Communications Interface and
Concord Proprietary Information available through the ClientLine Services are provided for the sole
use of Customer and its officers, employees or agents authorized to use ClientLine®
Services in accordance with this Paragraph. If, in utilizing ClientLine® Services,
Customer receives any confidential information of any third party, including any
Transaction-related information of any third party other than Customer or its Merchants, or any
non-public personal financial information of any consumer, or any of Concord Proprietary
Information to which it is not entitled, Customer shall notify FDMS immediately and shall not use,
copy or disclose such information to any third party.

     (d) Fees. In exchange for the ClientLine ® Services, Customer shall pay the
ClientLine ® Services the fees set forth in Exhibit B in the manner set forth in this
Section IV.

     (e) Support Services. FDMS or Concord shall provide support services to assist Customer with
procedural questions relating to ClientLine® Services through the use of a toll-free
telephone number.

     (f) Changes and Improvements. FDMS and Concord reserve the right to supplement, modify or
delete: (i) the content or format of ClientLine® Services; (ii) any data or other
information available through ClientLine® Services; and (iii) any feature, procedure,
technique or documentation with respect to ClientLine® Services or use of
ClientLine® Services by Customer. A list of the information available through
ClientLine® Services. as well as significant changes in ClientLine® Services
affecting customers generally, shall be published from time to time by Concord and made available
to Customer.

     (g) Protection and Security of ClientLine® Services. Customer must complete the
Security Access Request Form set forth in Schedule 1, as such form may be amended or supplemented
by FDMS from

Attachment A, Page 2 

 

time to time, and submit such form to FDMS. Upon FDMS’s approval of such form, FDMS
will issue Customer an identification code and password so it may access the ClientLine®
Services (“Access Codes”). Access Codes are the property of Concord and Customer shall not disclose
the Access Codes to anyone except upon direction from an authorized employee of Concord. Customer
acknowledges and agrees that Customer solely is responsible for ensuring that (i) Access Codes are
distributed only to Customer’s designated officers, employees and agents who are authorized by
Customer to utilize ClientLine® Services, (ii) Customer’s officers, employees and agents
protect the confidentiality of the Access Codes and of information obtained through use of the
Access Codes, (iii) Customer’s officers, employees and agents use the Access Codes and
ClientLine® Services only for their intended purposes, and (iv) Concord is immediately
notified of the termination of any of Customer’s officer’s, employee’s or agent’s authority to
utilize an Access Code. Customer shall instruct each of its officers, employees and agents to
utilize the degree of care in protecting the secrecy of the Access Codes and the Concord
Proprietary Information that Customer uses to protect its most sensitive commercial information,
but in no event less than a commercially reasonable degree of care, and Customer shall take such
additional steps as may be necessary to monitor and enforce the confidential treatment of Access
Codes and the Concord Proprietary Information. Until the ClientLine® Services are
terminated as set forth in this Section IV, Customer shall maintain security systems sufficient to
protect Concord’s Proprietary Information, the Communications Interface, Customer’s databases and
all other confidential information contained in or accessed by Customer via ClientLine®
Services and shall ensure that all Cardholder and Buypass Transaction data is protected by Customer
behind firewalls or on servers inaccessible to third parties. Customer shall immediately notify
Concord in writing upon the occurrence of a breach of its security obligations set forth in this
Section.

     (h) Communications Interface. Customer represents and covenants to FDMS and Concord that all
information transmitted to Concord through the Communications Interface will be transmitted in
accordance with the Documentation and accurate and complete and Concord shall be entitled to rely
upon any and all such information or instructions received under a Customer Access Code as a duly
authorized direction of Customer unless Concord has received a written notice of revocation of
authority for such Access Code in accordance with the requirements set forth in this Paragraph and
the Documentation. Neither FDMS nor Concord shall have any liability whatsoever arising out of any
instructions communicated to Concord via the Communications Interface, including without limitation
any and all errors or omissions made by Customer with respect to such instructions.

     (i) Confidentiality. Concord acknowledges that, Customer, in its use of
ClientLine® Services, may disclose to Concord certain non-public personal financial
information relating to Cardholders. Accordingly, Customer agrees to hold and use any and all such
Cardholder information in confidence, and not to disclose, reveal, copy, sell, transfer, assign or
distribute any part or parts of it, in any form, to any person or entity, or permit any of its
employees, agents, or representatives to do so, except as expressly permitted or required by law.
Customer represents and covenants that, pursuant to an agreement between Customer and each
Merchant whose Buypass Transaction information is contained in the Customer databases and obtained
via ClientLine® Services pursuant to this Section, Customer has been duly authorized to
obtain such Buypass Transaction information, and, in the event any Merchant revokes the
aforementioned authorization, Customer shall no longer obtain the Buypass Transaction information
of the applicable Merchant.

     (j) Indemnification. In addition to its indemnification obligations under Article 6 of the
Agreement and as otherwise stated in this Section IV, Customer shall indemnify, defend and hold
harmless each of Concord and FDMS and each of their respective directors, officers, employees,
agents, successors and assigns from and against any and all claims, demands, damages, costs,
expenses (including reasonable attorneys’ fees), losses and liabilities arising out of all claims
and actions brought or made by any third party (including Merchants) relating in any way to the
misuse of an Access Code, or the wrongful

Attachment A, Page 3 

 

disclosure or use of information obtained through the ClientLine® Services, by Customer or any of
its employees or agents or the Equipment under their control.

     4. PINless Debit Transactions Services. FDMS, either directly or through its
Affiliates, including Concord, or other third party service providers, shall make available to
Customer and its Merchants, and Customer and its Merchants shall access, PINless debit Transaction
services in the manner described and in accordance with the terms and conditions set forth below.
Customer desires to access the Networks for the purposes of processing certain Buypass Transactions
on behalf of its Merchants without receiving PIN validation (“Pinless Debit Transactions,” also
known as “Debit Bill Payment Transactions”) and FDMS desires to provide Pinless Debit Transaction
services as may be permitted by the Network rules. Customer acknowledges that under no
circumstances will FDMS or Concord have any liability for Pinless Debit Transactions services and
any associated fees, penalties or charges should payment of any Pinless Debit Transaction be
rejected for any reason. Prior to and during FDMS’ s provision of the Pinless Debit Transaction
services contemplated hereunder, Customer and its Merchants and Indirect Processors (as such term
is defined in Debit Network rules) shall be subject to and shall comply with the requirements of
the Networks, including without limitation, execution and completion of certain documentation and
agreements as required by the Networks; at any time that Customer or any of its Merchants or
Indirect Processors are not in compliance with such requirements, FDMS or Concord may terminate
Pinless Debit Transaction services with respect to Customer or such Merchant or Indirect Processor.
FDMS or Concord may delete any Network upon prior written notice to Customer and in accordance with
Network rules. All Pinless Debit Transactions processed hereunder shall be billed at
the rates set forth in Exhibit B, plus any applicable Transaction and Third Party Fees, in the
manner set forth in this Section IV.

     5. EFSnet
Web Payment Services. FDMS, either directly or through its Affiliates, including
Concord, or other third party service providers, shall make available to Customer and its
Merchants, and Customer and its Merchants shall access, the Internet gateway interface (“EFSnet”)
for use with certain Concord-certified point of sale equipment (“Equipment”) for the purposes of
processing, via the Internet, certain e-commerce payment transactions and other electronic payment
transactions initiated at the point of sale (the “EFSnet Web Payment Services”) in the manner
described and in accordance with the terms and conditions set forth below. In exchange for such
services, Customer will pay the fees set forth in Exhibit B in the manner set forth in the
Agreement.

          (a) General Customer Requirements. In order to access the EFSnet Web Payment Services,
Customer shall:

               (1) Successfully complete testing of the integration of Customer’s system with the EFSnet
system and the integration of the system of each of the following that will access the EFSnet
system through Customer: Merchants and third party processors (collectively the “Customer
Parties”). Customer must receive written certification from Concord of the completion of each test
with respect to Customer Parties;

               (2) Until the EFSnet Web Payment Services are terminated as set forth in this Section IV,
ensure that Customer and Customer Parties are in compliance with the EFSnet Specifications (as
defined in Section 5 below) and the EFSnet interface specifications located at
www.concordefsnet.com, as promulgated, supplemented or amended from time to time;

               (3) Obtain and maintain, and cause Customer Parties to obtain and maintain, at their sole cost
and expense, an Internet connection;

               (4) Obtain, or cause Customer Parties to obtain, an authorization of each Buypass Transaction
processed hereunder by Customer Parties, in accordance with the terms of the Agreement,

Attachment A, Page 4 

 

including this Section IV.

               (5) Regardless of whether the Transaction Card is or is not present at the point of sale,
cause Customer Parties to follow and comply with the policies and procedures established by Concord
and provided to Customer from time to time for the acceptance of such Cards.

               (6) Cause its Customer Parties to maintain the confidentiality and security of the store ID
and store key issued to such Customer Party by Customer, and notify Concord immediately of any
disclosure or unauthorized use of the store ID or store key of which the Customer or a Customer
Party becomes aware.

               (7) Cooperate with Concord and Networks and provide such information as is requested by
Concord and Networks to fulfill any Network requirements.

          (b) EFSnet Specifications Compliance. Customer shall review and comply with, and shall cause
Customer Parties to review and comply with the EFSnet Interface Specification, the EFSnet Resource
Guide located at www.concordefsnet.com, and the EFSnet transaction processing information located
at http://www.concordefsnet.com/Support/FaqFraudRisk.asp., as each may be amended, supplemented or
relocated by Concord or FDMS from time to time (collectively, the “EFSnet Specifications).

          (c) Card Not Present Transactions Via the Internet. With respect to Internet Transactions
originated through EFSnet, unless otherwise directed by Concord or FDMS:

               (1) Customer shall cause Merchants to complete the sales draft without the Cardholder’s
signature or an imprint but with the Cardholder’s name, billing address, card number, expiration
date of the Card, a description of the merchandise or service and the date and amount of all
charges, including taxes.

               (2) Customer shall cause Merchants to obtain information to perform address verification
services and obtain and provide other information as Concord may reasonably require.

               (3) Customer shall cause each Merchant, which engages in Internet Transactions to complete and
deliver to Concord in the manner instructed by FDMS or Concord an EFSnet Web Payment Services
profile, as promulgated, amended or supplemented by Concord or FDMS from time to time and delivered
to Customer.

               (4) Customer agrees and acknowledges that Merchants may authorize but shall not settle sales
prior to delivery of the product or service. All Internet Transactions will be settled by Concord
into a depository institution in the United States.

               (5) Customer shall cause Merchants’ web sites to contain at least the following information:
(i) complete description of the goods or services offered; (i) returned merchandise and refund
policy; (iii) customer service contact, including electronic mail address and/or telephone number;
(iv) transaction currency (U.S. dollars only); and (v) export or legal restrictions.

               (6) Customer shall cause Customer Parties to process Internet Transactions only (i) if the
Transactions have been encrypted by Concord or by a third party vendor acceptable to Concord and
(ii) Cardholder data is protected by the Customer Party behind firewalls or on servers inaccessible
to third parties. Encryption is not a guarantee of payment to Merchants.

               (7) If applicable based upon the manner in which a Merchant’s account is set-up, Customer
agrees and acknowledges that Internet Transactions initiated by Customer Parties are authorized and
settled through separate bank identification numbers or Interbank Card Association (collectively
“BIN/ICA”)

Attachment A, Page 5 

 

numbers and interchanges and Customer acknowledges that Concord will be unable to combine
deposits of Internet Transactions and non-Internet Transactions.

     (d) Chargebacks. Customer agrees and acknowledges that Internet Transactions are subject to a
higher incidence of chargebacks and, as with other Transactions, receiving an authorization and
following procedures and complying with applicable requirements will not relieve Customer or
Customer Parties of liability for chargebacks nor for any liability associated with the fraudulent
use of data obtained off of Customer’s or a Customer Party’s website or Transaction processing
system.

     (e) Fees. All Buypass Transactions initiated via the EFSnet Gateway shall be billed at the
Buypass Transaction rates set forth in Exhibit B, plus any applicable Transaction fees and Third
Party Fees.

     (f) Indemnity. In addition to its indemnification obligations under Article VI of the
Agreement and as otherwise stated in this Section IV, Customer shall indemnify and hold FDMS and
Concord and each of their officers, directors, employees, shareholders and subsidiaries, from any
and all loss, cost, expense, claim, damage and liability (including attorneys’ fees and costs) paid
or incurred by any one or more of them, arising from, caused by, or attributable to, any of the
following, except to the extent due to the gross negligence or willful misconduct of FDMS or
Concord:

          (1) Any action FDMS or Concord takes in accordance with or in reliance upon information or
instructions provided by Customer or Customer Parties, including instructions regarding the routing
of Transactions;

          (2) Customer’s or Customer Parties’ transmission to FDMS or Concord of any inaccurate
information; or

          (3) Unauthorized
access to FDMS’s or Concord’s systems utilized to process, route and
authorize Buypass Transactions from a point within Customer’s or a Customer Party’s control.

     6. Payment
of Fees for Concord Services.

     (a) Customer shall at all times be responsible for payment of all fees and charges due to FDMS
as outlined in Exhibit B.

     (b) Customer shall adhere to Concord’s Merchant Debit Card Adjustment Processing
Procedures set forth in Schedule 2.

     7. Third
Party Beneficiary. Concord is a third party beneficiary under the Agreement and this
Section IV.

	V.	 	Special Services for Transaction Solutions and Petroleum
Card Services
	 
	 	 	With respect to the Merchant Accounts processing on the “Stratus” platform that were
originally sourced under (i) the ISO Services and Marketing Agreement dated as of April 17,
2002 by and between Transaction Solutions, LLC and Concord
Transaction Services, LLC, and (ii) the Processing Service Agreement dated as of April 16, 2001 by and between Petroleum
Card Services, Inc. and CTS Holdings, LLC, FDMS, through its affiliates, will continue to
perform all services currently being performed with respect to such Merchant Accounts as of
the date of execution of this Amendment.

Attachment A, Page 6 

 

     Schedule 1 — User Security Access Request Form for ClientLine Services

INSTRUCTIONS: Please complete one Payment Services Security Access Request Form per user. You
may photocopy this form as necessary.

USER INFORMATION: o New User           o Upgrade / Modify User           o Delete User

	 	 	 	 	 	 	 	 	 

	USER LAST NAME:

	 	 	 	First Name:
	 	 	 	Middle Initial: ___

VALIDATION PHRASE OR WORD: (This field is used as additional identification for the User when
calling support. The phrase must be at least 5 and no more than 20 characters. DO NOT USE SSN):

      

SET-UP: (Complete the information below to indicate how User will be set up (i.e., Chain,
Subchain or Merchant ID). SELECT ONLY ONE OF THESE CATEGORIES.)

	 	 	 	 	 

	Chain (Association) ID                                         

	 	MID# & location number:	 	 
	 

	 	 

	Sub-Chain (Division) Code                                         

	 	Agency/Sales # (if applicable)	 	 
	 

	 	 	 	 

	 	 	 	 	 

	MERCHANT NAME:
	 	 	 	 
	Street Address Line 1

	 	 

	Street Address Line 2:

	 	 

	 

	 	 

	 	 	 	 	 	 	 	 	 	 	 

	City:

	 	 	 	State:
	 	 	 	ZIP:	 	 
	 

	 	 
	 	 	 	 
	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 

	Phone: (  )

	 	 	 	FAX: (  )
	 	 	 	E-Mail Address: 	 	
	 

	 	 
	 	 	 	 	 	 	 

	 	 	 	 	 	 	 

	Account Manager (if applicable) 

	 	 	 	Number of locations 	 	 
	 
	 
	 	 	 

PRODUCTS REQUIRED: This User requires access to the following products:

For Web-Based ClientLine: Select Product Option 1, 2, & 3 **ONLY**

	 	 	 	 	 
	Product Option # 1 o	 	Product Option #2 o	 	Product Option #3 o
	Settlement-Based Reporting

	 	Operational Management
	 	BuyView
	o Reporting

	 	o Customer Service — CMS
	 	o Atlanta Transaction History
	o Charge Backs/Retrievals

	 	o Contract Support
	 	o Atlanta Terminal Totals
	o Statements

	 	o Atlanta Debit/EBT Adjustments
	 	o Atlanta Merchant Setup
	o Rate Analysis

	 	o Terminal Deployment — CDS Web
	 	o Atlanta Fleet Setup

	 	 	 	Product Option #4 o
	 
	 	*	 	Requires a VPN login

Merchant Enrollment — AMA*

o New ISO

 – Installation & Training

o Existing ISO

	 	 	 	 	 	 	 

	User Manager/Supervisor Signature:

	 	 	 	Date:	 	 
	 

	 	 
	 	 	 	 

          (Forms cannot be processed without the proper signature.)

User Manager/Supervisor Printed Name                                                                
                 

	 	 	 	 	 

	 

	 	DO NOT WRITE BELOW THIS LINE	 	 
	 

	 	 	 	 

	 	 	 	 	 	 	 	 	 

	Completed by:

	 	 	 	 	 	Date:	 	 
	 	 	 	 	 	 	 
	Client Support Manager:	 	 	 	Date:	 	 
	 

	 	 	 	 
	 	 	 	 
	Data Security Memphis:	 	 	 	Date:	 	 
	 

	 	 	 	 
	 	 	 	 
	Data Security Wilmington:	 	 	 	Date:	 	 
	 

	 	 	 	 
	 	 	 	 

Attachment A, Page 7 

 

Schedule 2

MERCHANT DEBIT CARD ADJUSTMENT PROCESSING PROCEDURES

The Merchant debit Card adjustment processing procedures set forth in this Schedule 2, as may
be amended or supplemented by FDMS from time to time (“Adjustment Procedures”), are intended to
clarify the obligations of FDMS and Concord in processing, and of Customer and Customer’s Merchants
in submitting and processing, adjustments (including Customer or Merchant initiated chargebacks,
representments and other comparable error resolution processes) arising from Buypass Transactions
processed by Concord under this Section IV, through Networks (“Adjustments”). The Adjustment
Procedures contain deadlines for completion of Adjustment processing tasks. Failure to timely
process Adjustments may affect the fees and charges incurred by Customer or a Merchant for
Adjustments and may result in the loss of substantive Adjustment rights. Customer acknowledges and
agrees to the following terms and conditions under which Adjustments will be processed.

FEES FOR ADJUSTMENTS

For each debit Adjustment initiated by Customer or its Merchants, Customer will pay the Debit
Adjustment Fee set forth in Schedule 2 to this Section IV and all related Network fees.

TIMING OF ADJUSTMENTS; CONSEQUENCES OF DELAY

Each Network has a deadline after which (a) higher Adjustment fees may be incurred or (b)
Adjustments will no longer be accepted for processing. Adjustments must be provided to Concord by
Customer (or its Merchants) at least seven (7) Business Days before the applicable Network deadline
(“Concord Deadline”) on the correct Concord adjustment form with all fields on this form completed
correctly. If Customer (or its Merchants) completes any field on a Concord adjustment form
incorrectly, the form will be returned to Customer and Customer (or its Merchant) must correctly
complete and resubmit the form to Concord before the Concord Deadline. Concord will not be
responsible for any Adjustment that is not provided to Concord in the correct format before the
Concord Deadline and any increase in Network fees associated with such Adjustment regardless of the
original reason for the Adjustment.

The Adjustment Procedures are based on Network requirements for Adjustments and therefore subject
to change if these requirements change. All time frames for Adjustments are measured from, and
include, the date the transaction is initiated at the point of sale, unless otherwise indicated. If
Customer participates in more than one Network, Customer and its Merchants should consider
processing all Adjustments in accordance with the shortest applicable deadline imposed by these
Networks in order to ensure compliance with all Network deadlines. In no event, shall Concord be
responsible for any increase in Adjustment costs, related Network fees or the loss of any of
Customer’s or a Merchant’s substantive adjustment rights if Customer fails to comply with the
Concord Deadline.

Attachment A, Page 8 

 

EXHIBIT B

PRICING

*

 

			
	*	 	Omitted pursuant to a confidential treatment request. The confidential portion has been filed
separately with the SEC.exv10w18

Exhibit
10.18

FIRST DATA POS VALUE EXCHANGESM AMENDMENT

TO SERVICE AGREEMENT

     This First Data POS Value Exchange SM Amendment to Service Agreement, by
and between First Data Merchant Services Corporation (“FDMS”), and iPayment, Inc., formerly
known as iPayment Holdings, Inc. (“Customer”) (this “Amendment”) is made and entered into this
12th day of July, 2007.

RECITALS

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

     B. FDMS desires for Customer to resell and distribute the First Data POS Value Exchange
SM product and related equipment and installation and support services subject to
the terms and conditions set forth in the Service Agreement and this Amendment.

     C. Customer desires to resell and distribute such products and services subject pursuant
to the terms and conditions of the Service Agreement and this Amendment.

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

AGREEMENT

          1. The terms of this Amendment are effective as of July 1st, 2007.

          2. Exhibit B to the Service Agreement is hereby amended by adding the following First Data
POS Value Exchange SM Pricing Schedule at the conclusion of Section II of Exhibit B:

First Data POS Value Exchange SM Pricing Schedule

	 	 	 	 	 
	Item	 	Supplier, Description	 	Price
	HP rp5000 Base Unit (HP Reseller Model DR081AV)	 	 
	Processor
	 	Intel® CeleronTM 2.5 GHz	 	 
	Hard Drive
	 	80 GB	 	 
	Memory
	 	512 MB	 	 
	Optical Drive
	 	48X CD-ROM	 	 
	Modem – Internal
	 	56K Internal Modem	 	 
	Network Interface
	 	Intel Pro 100/VM NIC	 	 
	Graphics
	 	Intel Extreme	 	 
	Input/Output Ports
	 	6 USB, 4 serial, 1 parallel, 1 VGA, Line Out, 2 PS/2, 1 RF-45	 	 
	Peripherals	 	 
	Monitor
	 	HP152 LCD flat screen with touch capability	 	Included
	Scanner
	 	HP USB bar code scanner with stand	 	Included
	Receipt Printer 1
	 	HP thermal receipt printer	 	Included
	Cash drawer
	 	HP cash drawer	 	Included
	Key Board
	 	HP USB POS keyboard w/ integrated mouse	 	Included
	Mag stripe reader
	 	HP USB mini mag stripe reader	 	Included
	PIN pad cables
	 	Non-powered cables	 	Included
	Printer Paper
	 	1roll	 	Included
	Cable
	 	6 Ft. USB AB Cable USBA to USBB Gold	 	Included

1

 

	 	 	 	 	 
	Item	 	Supplier, Description	 	Price
	Software	 	 
	Operating system
	 	Microsoft® Windows® XP Professional	 	Included
	POS
	 	Microsoft Point of Sale V 2.0	 	Included
	AntiVirus
	 	Microsoft OneCare 1 year or equivalent antivirus	 	Included
	Training
	 	Microsoft Getting Started, Best Practices, Tutorial	 	Included
	First Data Provided	 	 
	PIN pad
	 	Ingenico i3010	 	Included
	PIN Key Injection
	 	Buypass DUKPT	 	Included
	Services
	 	 	 	 
	Integration
	 	IngramMicro Load, test, pack, shipping	 	Included
	Installation
	 	IMSN 1 hour installation	 	Included
	Warranty
	 	HP 3 year warranty on all HP items	 	Included
	Training
	 	Nurol 1 Hour Getting Started Telephone Training	 	Included
	Support
	 	FDMS Level 1 support	 	Included
	 
	 	TOTAL BUNDLE A FEE (includes HP rp5000 Base Unit and all “Included” items)	 	$ *
	 
	 	TOTAL BUNDLE  B  FEE  (includes   Bundle A except for substitution of check reader printer for thermal receipt printer)	 	$ *
	Optional Items (these items may only be purchased at the time of the initial purchase of Bundle A or Bundle B)
	Wireless Scanner
	 	Metrologic Wireless scanner w/ bluetooth MK9535	 	$ *
	Customer Display
	 	Logic black pole display USB port powered PD3900UP-BK	 	$ *
	Barcode Printer
	 	Zebra Thermal bar code printer LP2824-21100-0001	 	$ *
	Cash Drawer
	 	HP Cash drawer – extra till insert -A370293	 	$ *

          3. Section III of Exhibit A to the Service Agreement is hereby amended by
adding the
following paragraph K:

“K. First Data POS Value Exchange SM Terms and Conditions

Customer acknowledges and agrees to comply with the terms and conditions in this
Paragraph with respect to Customer’s resale and distribution of the First Data
POS Value Exchange SM product and related equipment (“POSVX
Product”), the Software, and related installation and support services
(collectively, “POSVX Products and Services”) to Merchants. For purposes of this
Paragraph, the “Software” means all operating system and software used in, for
or in connection with the POSVX Products and Services that accompanies or is
pre-loaded on the POSVX Products, and all APM. “APM” means all materials
associated with the POSVX Products and Services, including, but not limited to,
the customer manual, recovery media, external media, written instructions,
documentation and machine executable code.

	A.	 	FDMS OBLIGATIONS
	 
	 	 	FDMS will make available to and perform for Customer the POSVX Products and
Services. Unless otherwise agreed to by the parties in writing, FDMS will
provide the POSVX Products and Services only in the United States and only
for Customer to resell and distribute (and not to use, copy, display or
modify) within the United States. The parties understand and agree that FDMS
will provide some or all of the POSVX Products and Services through the use
of subcontractors. FDMS may modify the POSVX Products and Services in its
discretion to substitute functional equivalents. FDMS represents and
warrants that it has all rights, licenses and sublicenses necessary to
appoint resellers and distributors of the POSVX Products and Services
perform its obligations with respect to the POSVX Products and Services as
set forth in this Paragraph.

 

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

2

 

	B.	 	CUSTOMER OBLIGATIONS
	 
	 	 	FDMS hereby appoints Customer as a nonexclusive reseller and distributor of the POSVX Products
and Services to its end-user Merchants under the terms and conditions set forth herein.
Customer will make no representations, warranties or promises of indemnification to Merchants
with respect to POSVX Products and Services beyond those, if any, expressly permitted by FDMS
herein. Customer shall not open any original POSVX Product packaging or use any POSVX Product
or the Software and shall ensure that all APM included in any original POSVX Product packaging,
including the Software licenses, shall remain in such original packaging for the sole use of
the end-user Merchant. For the avoidance of doubt, the parties understand and agree that FDMS
shall not be liable to Customer, and Customer shall ensure that its Merchants agree that FDMS
shall not be liable to such Merchants, for any claims related to Customer’s or Merchant’s
operation of POSVX Products or the Software including, but not limited to, claims related to
actions taken by Merchant or its representatives in loading additional software onto a POSVX
Product or using such software, or using a POSVX Product or the Software to access the
Internet.
	 
	 	 	On-site Requirements
	 
	 	 	Customer shall ensure the following requirements are met for each of its Merchant locations
prior to
and during the POSVX Product installation appointments for such locations, including the
following:

	 	•	 	Each applicable point of sale (“POS”) retail counter is prepared for
the POSVX Product in accordance with the minimum dimensions for each component
identified in the launch kit provided by FDMS to Customer
	 
	 	•	 	Each applicable POS retail counter has grommet hole drilled if CPU box
below the counter as may be further specified in the identified in the launch kit
	 
	 	•	 	Each applicable POS retail counter has valid, working IP connectivity to Internet
	 
	 	•	 	Network cable in place between stations if multi-lane
	 
	 	•	 	Specified power to each applicable POS retail counter that meets the
specifications in the launch kit
	 
	 	•	 	Product boxes within short distance from each applicable POS retail counter

	 	 	In addition, Customer shall ensure that each of its Merchants shall comply with the following
during Product installation:

	 	•	 	Access to POS retail counter with no interruptions by Merchant’s staff or customers
	 
	 	•	 	Merchant store manager available for scheduling of installation
services and sign-off upon completion of installation

	C.	 	PRICES
	 
	 	 	Customer shall pay to FDMS the fees and charges for the POSVX Products and Services as set
forth in Exhibit B. FDMS may increase, change or add to any of the fees for POSVX Products and
Services, including those described herein and any added by later amendment, upon at least
thirty (30) days advance written notice to Customer.
	 
	D.	 	TERM
	 
	 	 	Notwithstanding anything in this Agreement to the contrary, FDMS’ obligation to provide the
POSVX Products and Services to Customer will terminate automatically without penalty to FDMS
upon the earlier of: (i) the termination or expiration of this Agreement or (ii) the occurrence
of any event causing FDMS to cease providing the POSVX Products and Services to Customer. In
addition, either party may immediately terminate this Paragraph upon written notice if the
other party fails to cure a material breach of the terms and conditions set forth in this
paragraph within thirty (30) days

3

 

	 	 	after receipt of written notice detailing such breach. Upon termination of the POSVX
Products and Services, all rights, licenses and sublicenses granted to Customer under this
Paragraph, whether real or implied, will immediately terminate but any rights license, or
sublicenses granted to Merchants in any APM will remain in full force and effect subject to the
terms contained in the applicable APM received by Merchants.
	 
	E.	 	TAXES
	 
	 	 	Customer shall pay all taxes and similar charges, however designated, which are imposed by any
governmental authority by reason of FDMS’ fulfillment of its obligations under this Paragraph
except for income taxes payable by FDMS on amounts earned by FDMS or property taxes payable by
FDMS on property owned by FDMS. Without limiting the foregoing, Customer shall promptly pay
FDMS for any amounts actually paid or required to be collected or paid by FDMS.
	 
	F.	 	WARRANTIES; WARRANTY DISCLAIMERS.
	 
	 	 	Warranties, if any, for POSVX Products or the Software originate from the third party provider
or manufacturer of such products or software (“Vendor”) and, if warranties are made to FDMS,
FDMS shall assign any such warranties where assignable. Materials or documents, if any, setting
forth warranty terms, conditions, exceptions, exclusions and disclaimers will be contained
within the POSVX Product packaging shipped from the Vendor or on the Vendor’s web site. FDMS
does not make or provide any warranty with respect to POSVX Products and Services provided under
this Paragraph, including the Software or hardware, and specifically disclaims all other
warranties of any kind, express or implied, including warranties of merchantability, fitness for
a particular purpose or noninfringement, arising out of or related to the POSVX Products and
Services or this Paragraph, which are hereby excluded by agreement of the parties.
	 
	G.	 	SOFTWARE
	 
	 	 	FDMS hereby grants to Customer a non-exclusive, non-transferable limited right to distribute to
its Merchants the Software solely in connection with Customer’s resale and distribution of the
POSVX Products to such Merchants. Customer acknowledges that the Software is owned and
copyrighted by third party suppliers, including Hewlett-Packard Co. (“HP”) and Microsoft Corp.
(“Microsoft”), and nothing in this Paragraph confers any title or ownership of the Software to
Customer or its Merchants or shall be construed as a sale of any rights in the Software to
Customer or its Merchants. Customer acknowledges that the only right Customer obtains to the
Software is the right to distribute the Software in accordance with the terms of this Paragraph
and that Customer will not remove, omit or alter any label or copyright on or in the Software
or POSVX Product. Customer agrees that it shall not modify, disassemble, or decompile the
Software.
	 
	 	 	Customer will deliver to its Merchants, as applicable, the Microsoft Certificate of
Authenticity (“COA”) and APM together with each POSVX Product, in the POSVX Product’s original
packaging, and will not quote a separate price for the Software. Customer agrees to provide
reasonable assistance to FDMS in any investigation of an incident where Customer or any party
within the Customer’s distribution channels delivers the COA and APM separate from the POSVX
Product or quotes a separate price for the Microsoft operating system, the Microsoft
application software, or both. Customer shall take all commercially reasonable steps to follow
notice of any kind provided by FDMS, Microsoft or HP regarding any Microsoft products.
	 
	 	 	Customer acknowledges and agrees that if Customer does not comply with the terms of this
Paragraph, including the foregoing, FDMS may immediately terminate this Paragraph without
further obligation to provide the POSVX Products and Services to Customer. Notwithstanding
anything else to the contrary herein or elsewhere, Customer shall indemnify FDMS for all
damages and from all

4

 

	 	 	costs, including reasonable attorney’s fees, relating to claims by HP, Microsoft or other
third parties relating to Customer’s unauthorized distribution of HP, Microsoft or other third
party Vendors’ products or software only as specifically related to the sale of the POSVX
Products by the Customer as outlined herein. Customer shall defend, indemnify and hold
harmless FDMS from any claim by a third party arising out of Customer’s breach of its
obligations under this Paragraph.
	 
	H.	 	MARKETING
	 
	 	 	Customer shall not use the name, trademarks, logos, service marks or trade names of FDMS or
any Vendors in connection with any press release, representation, solicitation, advertising,
promotion, or sales or marketing publication without prior full disclosure to and written
permission from FDMS. Customer acknowledges and agrees that it shall not distribute to its
employees, agents, independent contractors, or Merchants any marketing related materials which
directly or indirectly reference a Vendor without FDMS’ prior written consent, which will be
given by FDMS in its sole discretion.
	 
	I.	 	INDEPENDENT CONTRACTORS.
	 
	 	 	The parties are acting hereunder as independent contractors in the making and performance of
their respective obligations under this Paragraph, and are not, and shall not be construed to
be, an employee, agent, or servant of each other or any Vendor or to create a partnership,
joint venture or agency of any kind.”

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

          5. This Amendment, together with 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 Service Agreement as it relates to the subject matter hereof, the terms of this Amendment
shall control. Otherwise, all terms and conditions of the Service Agreement shall likewise apply
to this Amendment.

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

	 	 	 	 	 	 	 

	iPayment, Inc.	 	First Data Merchant Services Corporation
	 
	 	 	 	 	 	 
	By:

	 	/s/ Joseph Jorling
	 	By:
	 	/s/ Rick Learch
	 

	 	 
	 	 	 	 
	Name:

	 	Joseph Jorling
	 	Name:
	 	Rick Learch
	Title:

	 	C.O.O.
	 	Title:
	 	SVP
	Date:

	 	7/20/2007
	 	Date:
	 	7/12/07

5

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