SYSTEM DEVELOPMENT AND SERVICES AGREEMENT

 

 

                              DATED     May 1, 2004

                              ---------------------

 

 

 

                                DFS OKINAWA K.K.

 

                                       AND

 

                               ASIA PAYMENTS, INC.

 

 

 

                  ____________________________________________

 

 

                             SYSTEM DEVELOPMENT AND

                               SERVICES AGREEMENT

 

                  ____________________________________________

 

 

 

 

                           Asia Payment Systems, Inc.

                              800 5th Avenue #4100

                                Seattle, WA 98104

 

Tel: 1-206-447-1379                                          Fax: 1-206-470-1150

<PAGE>

THIS  AGREEMENT  is  made  as  of  May  1,  2004  ("Effective  Date")

 

BETWEEN:

 

(1)  DFS  OKINAWA  K.K.  a  Japanese  corporation  ("DFS");  and

 

(2)  ASIA  PAYMENTS,  INC.,  a  Delaware  corporation  with its principal office

     located  at  704  N.  King  Street  Suite  500, Wilmington, Delaware, U.S.A

     ("API").

 

WHEREAS:

 

(A)  API  is  in  the  business  of  developing  computer  system  and  software

     applications  enabling  acceptance  and  settlement  of credit card payment

     transactions;  and

 

(B)  DFS and API desire to enter into a business relationship pursuant to which,

     among  other  things,  API  will  develop  a  system  according  to  DFS

     specifications  and guidelines to authenticate credit card payment by DFS's

     customers  (and  the  customers  of  certain  DFS  affiliates),  as  more

     particularly  described  in  Schedule  1  ("the  System").

 

NOW THEREFORE, in consideration of the mutual covenants and conditions contained

herein,  the  parties  agree  as  follows:

 

1.   DEVELOPMENT  OF  SYSTEM

 

1.1  Immediately  after the Effective Date, both parties shall negotiate in good

     faith  and  use  commercial  best  efforts  to  perform  their  respective

     obligations  under  this  Agreement.

 

1.2  All  System development works to be undertaken by API will be substantially

     completed  so  as to permit commercial operation according to the features,

     operating  and  other  performance  parameters  of  the  System  as  may be

     reasonably  necessary  or  agreed  between  API  and  DFS  ("System

     Specifications")  not later than 1 July, 2004 or other date mutually agreed

     by the parties (the "Service Commencement Date"). The System Specifications

     shall  include,  but  not  be  limited,  to  those  specified in Schedule 2

     attached  hereto.

 

1.2  From  time  to  time  as  appropriate  in  the  course  of  the development

     activities to be undertaken pursuant to this Agreement, each of API and DFS

     shall  provide  the  other  party  (and  their  nominees)  with  additional

     technical  or  other  information  to the extent the other party reasonably

     deems  necessary  for  such other party to perform obligations expressed or

     contemplated  hereunder,  or  such other obligations as may be ancillary or

     incidental  to  express  obligations.

 

1.3  Unless otherwise specified herein, each party shall bear any and all of its

     own  costs  and  expenses incurred in connection with its obligations under

     this  Agreement  or  at  law.

 

 

                           Asia Payment Systems, Inc.

                              800 5th Avenue #4100

                                Seattle, WA 98104

 

Tel: 1-206-447-1379                                          Fax: 1-206-470-1150

<PAGE>

2.   SETTLEMENT  SERVICES

 

2.1  Immediately  following: (a) the completion of the System in accordance with

     the  System  Specifications; and (b) the acceptance of the System following

     user  testing,  API  shall  make available to DFS the settlement service as

     described  in  Part  I  of  Schedule  3  for the duration of this Agreement

     ("Settlement  Services").

 

2.2  The  availability  of  Authorisation  and  Sales  Capture  applications (as

     described  in  Schedule  1) of the Settlement Services for DFS's use shall,

     during  any  calendar  month, be not less than 98% of the time (based on 24

                                                    ---

     hours  per  calendar  day) ("Service Level Commitment"), save for scheduled

     maintenance  or  scheduled  downtime  ("Maintenance"), or failure of any of

     DFS's  equipment  that  is  not  due to any intentional or negligent act or

     omission.  Any  Maintenance  must  be  agreed in writing by DFS and API, at

     least  fourteen  calendar  days prior to the contemplated event and DFS may

     not  unreasonably condition, delay or withhold agreement. For the avoidance

     of  doubt  any  Maintenance  must  be  carried  out and completed using all

     reasonable  haste.  For  the  purposes of this Agreement, the Service Level

     Commitment  shall be incontrovertibly deemed to be a material obligation of

     API  under  this  Agreement.

 

2.3  Subject  to  API performing its obligations under this Agreement, DFS shall

     pay  API  the  service  fees  as  described  in  Part  II of Schedule 3. In

     addition,  unless  otherwise  specified  in Schedule 3, DFS will, within 15

     calendar  days  of  receiving  an  invoice,  pay  or  reimburse  API  for:

 

     (a)  reasonable  travel  expenses  incurred  by  API's  personnel;

 

     (b)  reasonable  out  of pocket expenses incurred by API's personnel whilst

          travelling;  and

 

     (c)  all  sales  taxes,  value  added  taxes  and goods and services taxes,

 

     provided API obtains DFS's prior written approval for all individual travel

     expenses  exceeding US$2000 and individual out of pocket expenses exceeding

     US$150,  the  relevant  expenses  or  taxes  are  incurred  by  API and its

     personnel  in  good  faith  in the course of API performing its obligations

     under  this  Agreement, and that original documentary evidence, reasonably

     satisfactory to  DFS, is provided with any corresponding invoice that API

     may  be  entitled  to  issue  from  time  to  time.

 

3.   INTELLECTUAL  PROPERTY  RIGHTS

 

     (a)  All  intellectual  property  and  related  rights  in and to technical

          information  of  either  party which is provided to the other party in

          the  course  of the development of the System or its portion hereunder

          shall  continue  to  belong  to  such  providing  party.

 

     (b)  Each  party  ("First  Party") shall indemnify and hold the other party

          ("Second  Party")  harmless  from: any (i) claims by; and (ii) damages

          awarded  to,  a  third  party  where  that  third

 

 

                           Asia Payment Systems, Inc.

                              800 5th Avenue #4100

                                Seattle, WA 98104

 

Tel: 1-206-447-1379                                          Fax: 1-206-470-1150

<PAGE>

     party's  intellectual  property rights have been infringed by reason of any

     act,  omission  or  breach  of  the First Party, and all costs and expenses

     reasonably  incurred  by  the  Second  Party.

 

4.   GENERAL

 

4.1  Confidentiality

 

     (a)  Confidential  Information.  "Confidential  Information"  means  any

          confidential  technical  data,  trade  secret,  know-how  or  other

          confidential  information disclosed by any party hereunder in writing,

          orally,  or  by  drawing  or  other  form  which must be marked by the

          disclosing  party  as  "Confidential"  or  "Proprietary".  If  such

          information is disclosed orally, or through demonstration, in order to

          be deemed Confidential Information, it must be specifically designated

          as  being  of  a  confidential  nature  at  the time of disclosure and

          reduced  in  writing  and  delivered to the receiving party within ten

          calendar  days  of  such  disclosure.

 

     (b)  Exclusions.  Notwithstanding  the  foregoing, Confidential Information

          shall  not  include  information  which:

 

          (i)  is  known  to  the  receiving  party at the time of disclosure or

               becomes  known  to  the  receiving  party  without breach of this

               Agreement;

 

          (ii) is  or  become  publicly  known  through  no  wrongful act of the

               receiving  party  or  any  subsidiary  of  the  receiving  party;

 

          (iii) is rightfully received from a third party without restriction on

               disclosure;

 

          (iv) is  independently  developed by the receiving party or any of its

               subsidiary;

 

          (v)  is  furnished  to any third party by the disclosing party without

               restriction  on  its  disclosure;

 

          (vi) is  approved  for  release  upon  a  prior written consent of the

               disclosing  party;

 

          (vii) is  disclosed  pursuant  to  judicial  order,  requirement  of a

               governmental  agency  or  by  operation  of  law.

 

     (c)  Nondisclosure.  The  receiving  party agrees that it will not disclose

          any  Confidential  Information  to  any  third  party and will not use

          Confidential Information of the disclosing party for any purpose other

          than  for  the  perform