WHEREAS, FDCC (formerly named AT&T Interactive Services, Inc.), while conducting business as a subsidiary of Triac Corporation, was admitted as a Partner to the Partnership; and

 

WHEREAS, in connection with FDCC’s admission to the Partnership (i) the Partnership transferred to FDR certain of the Partnership’s Intellectual Property Rights (as hereinafter defined) as described in Exhibit A hereto, and (ii) immediately after such admission, FDR granted to the Partnership certain non-exclusive licenses with respect to all of such Intellectual Property Rights on the terms and conditions contained in a certain Joint Venture Agreement by and among, FDRIT, American Express, FDCC, American Telephone and Telegraph Company, a New York corporation (“AT&T”) and the Partnership dated August, 2 1989 (the “Joint Venture Agreement”); and

 

WHEREAS, each of SY Holdings and CI Holdings desires to be admitted as Partners of the Partnership; and

 

WHEREAS, the parties have agreed that in connection with SY Holding’s admission to the Partnership, SY Holdings shall contribute all of its membership interest in PayPoint Electronic Payment Systems, LLC, a Delaware limited liability company (“PayPoint”) to the Partnership pursuant to a certain Contribution Agreement by and among SY Holdings and the Partnership dated August 20, 2002 (the “Contribution Agreement”); and

 

WHEREAS, SY Holdings desires to contribute a 44.4% interest in the Partnership to CI Holdings; and

 

2

 

WHEREAS, the parties hereby desire to provide for the contribution of PayPoint to the Partnership, the admissions of SY Holdings and CI Holdings as Partners of the Partnership and the amendment and restatement of the Joint Venture Agreement to specify the rights and obligations of the Partners following such contribution and admissions and to change the name of the Partnership from Call Interactive to First Data Voice Services;

 

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein, the parties hereby acknowledge and agree as follows:

 

A.            Admissions of SY Holdings and CI Holdings .  In consideration of its Capital Contribution described in Section 8.1 below and its covenants contained herein, SY Holdings shall be admitted as a Partner of the Partnership.  In consideration of the contribution by SY Holdings of a 44.4% interest in the Partnership to CI Holdings specified in the Recitals above and its covenants contained herein, CI Holdings shall be admitted as a Partner of the Partnership.  Each of SY Holdings and CI Holdings hereby adopts and agrees to be jointly liable with FDCC and FDRIT for the performance of the Partnership’s debts, obligations and liabilities.

 

B.            Consent of FDCC and FDRIT .  FDCC and FDRIT hereby approve and consent to the admissions of SY Holdings and CI Holdings to the Partnership on the terms and conditions set forth herein.  The Partnership shall not dissolve or terminate as a result of such admissions but its business shall continue without interruption and without any break in continuity.  Upon each of SY Holdings and CI Holdings execution of this Agreement, SY Holdings contribution of the Capital Contribution specified in Section 8.1 below and SY

 

3

 

Holdings contribution of a 44.4% interest in the Partnership specified in the Recitals above, each of SY Holdings and CI Holdings are hereby admitted to the Partnership as Partners.

 

C.            Transfer .  Upon admission of SY Holdings to the Partnership, SY Holdings shall contribute to the Partnership all of its membership interest in PayPoint.  The Partners will cause the Partnership to forthwith execute and deliver such additional documents or instruments as may be necessary or appropriate to contribute PayPoint to the Partnership.  The Partners agree that for purposes of Capital Account maintenance the value attributed to PayPoint is $250,000,000.  Upon admission of CI Holdings to the Partnership, the Partners agree that for purposes of Capital Account maintenance the value attributed to CI Holdings’s Capital Account is $250,000,000.

 

D.            Amendment and Restatement of the Joint Venture Agreement .  FDCC, FDRIT, SY Holdings and CI Holdings hereby amend and restate the Joint Venture Agreement to read in its entirety as follows:

 

1.             Certain Definitions .

 

In addition to the other terms defined elsewhere herein, as used herein, unless the context otherwise requires, the following terms shall have the respective meanings set forth below:

 

1.1           “Adjusted Capital Account Deficit” shall mean, with respect to any Partner, the deficit balance, if any, in such Partner’s Capital Account as of the end of the relevant fiscal year, after giving effect to the following adjustments:

 

4

 

(a)           Credit to such Capital Account any amounts which such Partner is obligated to restore pursuant to any provision of this Agreement or is deemed to be obligated to restore pursuant to Section 1.704-1(b) (2) (ii)  (c)  of the Regulations (as defined in Section 1.9);

 

(b)           Debit to such Capital Account the items described in Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6) of  the Regulations.

 

The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall be interpreted consistently therewith.

 

1.2           “Affiliate” shall mean, with respect to any Person, any Person that directly or indirectly through one or more intermediaries has the power to control or is controlled by or under common control with the specified Person.

 

1.3           “Arbitration” shall mean, in connection with any determination of a reasonable royalty under any license proposed to be granted pursuant to this Agreement, that the amount of such royalty shall be a fair market value royalty, as determined by a panel of three nationally recognized intellectual property appraisers, none of whom shall be affiliated with any Partner or the Partnership, one selected by the contemplated licensor, one selected by the contemplated licensee and the third selected by the first two.

 

1.4           “Board” shall mean the Board of Directors described in Section 13 hereof.

 

1.5           “Business Day” shall mean a day other than a Saturday or Sunday or other day on which banks are authorized to close in the City of New York.

 

5

 

1.6           “Business Plan” shall mean the Partnership’s business plan as adopted or amended by the Board from time to time.

 

1.7           “Capital Account”, when used with respect to any Partner, shall mean the Capital Account maintained for such Partner in accordance with the following provisions:

 

(a)           To each Partner’s Capital Account there shall be credited such Partner’s Capital Contributions, such Partner’s distributive share of Profits and any items in the nature of income or gain which are specially allocated pursuant to Sections 9.3 and 9.4 hereof, and the amount of any Partnership liabilities assumed by such Partner or which are secured by any property distributed to such Partner;

 

(b)           To each Partner’s Capital Account there shall be debited the amount of cash and the Gross Asset Value of any property distributed to such Partner pursuant to any provision of this Agreement, such Partner’s distributive shares of Losses (as defined in Section 1.30) and any items in the nature of expenses or losses which are specially allocated, and the amount of any liability of such Partner assumed by the Partner assumed by the Partnership of which are secured by any property contributed by such Partner to the Partnership.

 

(c)           In the event any interest in the Partnership is transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent that it relates to the transferred interest.

 

(d)           In determining the amount of any liability for purposes of Sections 1.7(a) and 1.7(b) hereof, there shall be taken into account the provisions of Code Section 752(c) and any other applicable provisions of the Code and Regulations.

 

6

 

(e)           The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with such Regulations.  In the event the Board shall determine that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto (including, without limitation, debits or credits relating to liabilities which are secured by contributed or distributed property or which are assumed by the Partnership or one or more of the Partners), are computed in order to comply with such Regulations, the Board may make such modification, provided that it is not likely to have a material effect on the amounts distributable to any Partner pursuant to Section 14 hereof upon the dissolution of the Partnership.  The Board also shall make any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Regulations Section 1.704-1(b).

 

1.8           “Capital Contributions” shall mean, with respect to any Partner, the amount of money and the initial Gross Asset Value of any property (other than money) contributed to the Partnership with respect to the Partnership Interest held by such Partner pursuant to the terms of this Agreement.

 

1.9           “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time (or any corresponding provisions of succeeding law), and “Regulations” shall mean the Treasury Regulations promulgated under the Code.

 

1.10         “Computer II Orders” shall mean (i)  Amendment of Section 64.702 of the Commission’s Rules and Regulations (Second Computer Inquiry) , 77 FCC 2d 384, recon., 84 FCC 2d 50 (1980), further recon., 88 FCC 2d 512 (1981), aff’d sub nom., Computer &

 

7

 

Communications Indus. Ass’n v. FCC , 693 F.2d 198 (D.C. Cir. 1982), cert. denied, 103 S.Ct. 2107 (1983), as supplemented by American Telephone and Telegraph Company:  Provision of Basic Services Via Resale by Separate Subsidiary , FCC Docket No. 83-1375, Report and Order adopted June 11, 1984 and (ii) 47 CFR § 64.702, as any of the foregoing in clause (i) or (ii) may be hereinafter amended, modified or supplemented.  “Computer III Orders” shall mean (i)  Amendment of Section 64.702 of the Commission’s Rules and Regulations (Third Computer Inquiry), 104 FCC 2d 958 (1986), as modified on reconsideration by Amendment of Section 64.702 of the Commission’s Rules and Regulations (Third Computer Inquiry Memorandum Opinion and Order on Reconsideration , FCC Docket No. 85-229, FCC No. 87-102 (released May 22, 1987) and as supplemented by Amendment of Section 64.702 of the Commission’s Rules and Regulations (Third Computer Inquiry) Supplemental Notice of Proposed Rulemaking , FCC Docket No. 85-229, Phase II, FCC No. 86-253 (released June, 1986) and Amendment of Section 64,702 of the Commission’s Rules and Regulations (Third Computer Inquiry) Report and Order , FCC Docket No. 85-229, Phase II, FCC No. 87-103 (released May 22, 1987) and (ii) 47 CFR § 64.702, as any of the foregoing in clauses (i) or (ii) may be hereinafter amended, modified or supplemented.

 

1.11         “Confidential Information” shall mean all oral, written and/or tangible information disclosed by the Partnership or a Partner to the receiving party which is confidential, proprietary and/or not generally available to the public, including, but not limited to, information relating in whole or in part to the Partnership’s present and future products, services, business plans and strategies, marketing ideas and concepts, especially with respect to unannounced products and services, present and future product plans, pricing, volume estimates,

 

8

 

financial data, product enhancement information, business plans, marketing plans, sales strategies, customer information (including customers’ applications and environments), market testing information, development plans, specifications, customer requirements, configurations, designs, plans, drawings, apparatus, sketches, software, hardware, data, prototypes, connecting requirements or other technical and business information.  Confidential Information shall also include “Customer Proprietary Network Information” as that term is construed by Federal Communications Commission policies and decisions.  Confidential Information provided by a disclosing party shall remain the property of the disclosing party.

 

1.12         “Deductions and Losses” shall mean, for each fiscal year or other period, an amount equal to the sum of all items of deduction or loss allowable to the Partnership for such fiscal year or other period as computed for federal income tax purposes except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes, items of deduction or loss attributable to such asset shall be computed based upon such Gross Asset value in accordance with the concepts set forth in Section 1.15, and further, except that any expenditures of the Partnership described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses pursuant to Section 1.30 shall be included in such Deductions and Losses.

 

1.13         “Depreciation” shall mean, for each fiscal year or other period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to an asset for such year or other period, except that if the Gross Asset Value of an asset differs from its basis for federal income tax purposes at the beginning of such year or other

 

9

 

period, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation/amortization or other cost recovery deduction for such year or other period bears to such beginning adjusted tax basis; provided, however, that if the federal income tax depreciation, amortization or other cost recovery deduction for such year is zero because the asset has a zero tax basis, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Board.

 

1.14         “Fair Market Value” of a Partnership Interest shall mean (a) the price at which the assets and business of the Partnership, net of all liabilities, would change hands as a going concern, in an arm’s length transaction between a willing buyer and a willing seller, each having reasonable knowledge of the relevant facts and neither being under any compulsion to act with respect to such prospective sale multiplied by (b) that percentage portion of the Partnership Interest which is to be sold or transferred.  “Fair Market Value” of specified assets shall mean the price at which such assets and business, net of all liabilities, would change hands as a going concern, in an arms-length transaction between a willing buyer and a willing seller, each having reasonable knowledge of the relevant facts and neither being under any compulsion to act with respect to such prospective sale.

 

1.15         “Gross Asset Value” shall mean, with respect to any asset, such asset’s adjusted basis for federal income-tax purposes except as follows:

 

(a)           The initial Gross Asset Value of any asset contributed by a Partner to the Partnership shall be the gross fair market value of such asset, as determined by the contributing Partner and the Partnership;

 

10

 

(b)           The Gross Asset Values of all Partnership assets shall be adjusted to equal their respective gross fair market values, as determined by the Board, as of the following times:  (i) the acquisition of an additional interest in the Partnership by any new or existing Partner in exchange for more than a de minimis Capital Contribution; (ii) the distribution by the Partnership to a Partner of more than a de minimis amount of property as consideration for an interest in the Partnership if the Board reasonably determines that such adjustment is necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership; and (iii) the liquidation of the Partnership within the meaning of Regulations Section 1.704-1(b)(2)(ii) (g) ;

 

(c)           The Gross Asset Value of any Partnership asset distributed to any Partner shall be the gross fair market value of such asset on the date of distribution;

 

(d)           The Gross Asset Values of Partnership assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) and Sections 9.3 and 9.4 hereof; provided, however, that Gross Asset Values shall not be adjusted pursuant to this Section 1.15(d) to the extent the Board determines that an adjustment pursuant to Section 1.15(b) is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this Section 1.15(d);

 

(e)           If the Gross Asset Value of an asset has been determined or adjusted pursuant to Section 1.15(a), 1.15(b) or 1.15(d) hereof, such Gross Asset Value shall

 

11

 

thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses; and

 

(f)            For purposes of allocating Gross Asset Values with respect to Partnership assets, the Board shall make such allocations for all purposes under this Agreement.

 

1.16         “Income and Gain” shall mean, for each fiscal year or other period, an amount equal to the sum of all items of gross income or gain recognized by the Partnership for such fiscal year or other period as computed for federal income tax purposes except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes, items of income or gain attributable to such asset shall be computed based upon such Gross Asset Value in accordance with the concepts set forth in Section 1.15, except that any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to Section 1.30 shall be added to such Income and Gain.

 

1.17         “Intellectual Property Rights” shall include:

 

(a)           All inventions, discoveries and patentable subject matter and all patent rights and all rights, title and interests in all letters patent and applications for letters patent, industrial models, industrial designs, petty patents, patents of importation, utility models, certificates of invention and other government issued or granted indicia of invention ownership including any reissue, division, continuation or continuation-in-part applications throughout the world; and

 

(b)           All rights, title and interest in all trade secrets and trade secret rights arising under the common law, state law, federal law and laws of foreign countries; and

 

12

 

(c)           All mask works and mask work rights including mask work registration rights and mask work registrations throughout the world; and

 

(d)           All writings, works and copyrightable subject matter and all copyright rights, and all other literary property and author rights whether or not copyrightable; and all rights, title and interest in all copyrights, copyright registrations, certificates of copyright and copyrighted interests throughout the world; and

 

(e)           All rights, title and interests in all know-how and show-how throughout the world whether or not protectable by patent, copyright or trade secret law, or as a registered mask work; and

 

(f)            All trademarks and trademark rights including trademark registration rights arising under the common law, state law, federal law and laws of foreign countries; all rights, title and interests in all trademarks, trademark registrations and trademark interests throughout the world; and all goodwill; and

 

(g)           All rights under that certain Service Agreement between the Partnership and Franklin V. Barger, Jr. dated June 19, 1989 relating to the acquisition of a certain patent.

 

1.18         “Licenses” shall mean those certain non-exclusive licenses in substantially the forms attached hereto as Exhibit A-1 granted from FDR to the Partnership.

 

1.19         “Net Cash From Operations” shall mean the gross cash proceeds from Partnership operations less the portion thereof used to pay or establish reserves for all Partnership expenses, debt payments, capital improvements, replacements and contingencies, all

 

13

 

as determined by the Board.  “Net Cash From Operations” shall not be reduced by depreciation, amortization, cost recovery deductions or similar allowances.

 

1.20         “Net Cash From Sales or Financings” shall mean the net cash proceeds from all sales and other dispositions (other than in the ordinary course of business) and all financings of the Partnership, less any portion thereof used to pay expenses or establish reserves, all as determined by the Board.  Such net cash proceeds shall also be reduced by repayments of debt principal, which, by its terms, is required to be paid upon such sale or financing, whether or not secured by the Partnership property being sold or refinanced.  “Net Cash From Sales or Financings” shall include all principal and interest payments with respect to any note or other obligation received by the Partnership in connection with sales and other dispositions (other than in the ordinary course of business) of Partnership property.

 

1.21         “Nonrecourse Deductions” shall have the meaning set forth in Section 1.704-2(b)(1)  of the Regulations.  The amount of Nonrecourse Deductions for a Partnership fiscal year shall equal the net increase, if any, in the amount of the Partnership Minimum Gain during that fiscal year, determined according to the provisions of Section 1.704-2(d)  of the Regulations.

 

1.22         “Partner Nonrecourse Debt” shall have the meaning set forth in Regulations Section 1.704-2(b)(4) .

 

1.23         “Partner Nonrecourse Deductions” shall have the meaning set forth in Regulations Section 1.704-2(c) .

 

1.24         “Partners” shall mean CI Holdings, FDCC , FDRIT, and SY Holdings.  “Partner” means any one of the Partners.

 

14

 

1.25         “Partnership” shall mean the general partnership existing pursuant to this Amended and Restated Agreement and the Persons continuing the business of the Partnership in the event of dissolution as herein provided.

 

1.26         “Partnership Interest” shall mean any interest of a Partner in the Partnership, including the right of such Partner to benefits to which it may be entitled under, and the obligations of such Partner to comply with, all the terms and provisions of this Agreement.  “Percentage Interest” shall mean 44.4% in the case of CI Holdings, 11.1% in the case of SY Holdings, and 22.25% in the cases of both FDCC and FDRIT, reduced by the amount, if any, of the Partnership Interest transferred to transferees.

 

1.27         “Partnership Minimum Gain” shall have the meaning set forth in Section 1. 704-2(b) (2)  of the Regulations .

 

1.28         “Person” shall mean any individual, corporation, partnership, firm, joint venture, association, trust, joint-stock company, unincorporated organization or other entity.

 

1.29         “Personnel” shall mean the directors, officers, employees (other than strictly clerical or secretarial employees), partners, representatives and advisors of a Person and its Affiliates.

 

1.30         “Profits” and “Losses” shall mean, for each fiscal year or other period, an amount equal to the Partnership’s taxable income or loss for such year or period, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:

 

15

 

 

1.31         “Representative” shall mean any individual designated by a Partner to act on behalf of such Partner in accordance with the terms of this Agreement, and the term “Representatives” shall mean any two or more individuals so designated.

 

2.             Formation .

 

The Partnership was formed as of May 19, 1988.  The Partnership shall be governed by the Partnership Law of the State Of Delaware.  The Partnership Interests of the Partners are, and shall be, subject to all of the terms and conditions of this Agreement.

 

3.             Name .

 

The business of the Partnership shall be conducted under the firm name of “First Data Voice Services,” or such other name or names as the Partners shall hereafter from time to time determine.  The firm name and any trade or service names, marks, emblems, or logos owned by the Partnership shall be the exclusive property of the Partnership and no Partner shall have any right to use, and each Partner agrees not to use, any of said names, marks, emblems or logos other than on behalf of the Partnership.

 

4.             Term .

 

The Partnership commenced as of May 19, 1988, and shall continue in perpetuity until terminated as herein provided.

 

5.             Principal Offices .

 

The principal office of the business of the Partnership shall be at Omaha, Nebraska, or at such other or additional place or places as the Board shall from time to time determine.

 

17

 

6.             Purpose .

 

The purpose and scope of the business of the Partnership is to own, operate, develop and exploit one or more services (the “Services”) which will permit businesses and consumers to utilize telephones to communicate with computer equipment in order to permit business-to-consumer and business-to-business interactive applications requiring voice and data communications data processing and data base services; provided, however, that such purpose and scope does not include activities which would violate the restrictions on program content set forth in the Premium Billing Agreement between AT&T and the Partnership effective March 13, 1989.  The Services shall utilize a network of telephone lines associated with automated voice processing equipment capable of operating in an interactive environment (a “System”).  The Partnership shall initially conduct its business in the United States; however, worldwide exploitation of the Services and System, whether by the Partnership directly or through licenses, joint ventures or other arrangements is within the scope of the Partnership’s business.  The Partnership shall also conduct its business through PayPoint and conducting such business, whether by the Partnership directly or through licenses, joint ventures or other arrangements, is within the scope of the Partnership’s business.

 

7.             Other Business Activities of Partners .

 

Provided that the actions of a Partner or its Affiliates do not constitute a breach of the provisions of this Agreement, any Partner or any Affiliate thereof, alone or in combination with others, may, without any duty to the Partnership or the other Partners or any Affiliate thereof, and without incurring any liability or obligation to the Partnership or the other Partners or any Affiliate thereof, engage in any activities or businesses, whether or not competitive with the business activities of the Partnership, and neither the Partnership nor any

 

18

 

Partner or any Affiliate thereof shall have any right to the disclosure of information in respect thereof, to participate therein or to derive any income or profits therefrom.  It is acknowledged that any Partner or any Affiliate thereof may develop, market, or provide services or products to or for Persons that are competitors or customers or potential customers of the Partnership or under circumstances that are otherwise competitive with the business activities of the Partnership and may learn of business opportunities for the provision of a product or service similar to any provided by the Partnership otherwise than from the Partnership in connection with such activities.

 

8.             Capital Contributions; Loans .

 

8.1           Initial Capitalization .  FDRIT and FDCC have heretofore made certain Capital Contributions to the Partnership.  SY Holdings shall contribute all of its membership interest in PayPoint to the Partnership.  The contribution of PayPoint to the capital of the Partnership shall be treated as a contribution by SY Holdings in the amount of $250,000,000.  SY Holdings shall contribute a 44.4% interest in the Partnership to CI Holdings.  After the contribution of  a 44.4% interest in the Partnership by SY Holdings to CI Holdings, CI Holdings shall be treated as having made a contribution to the capital of the Partnership in the amount of $200,000,000.

 

8.2           Additional Capital Contributions .

 

(a)           In addition to the Capital Contribution described in Section 8.1, CI Holdings, FDCC , FDRIT, and SY Holdings may, from time to time, make such additional Capital Contributions, in amounts in proportion to their Percentage Interests, in cash, as shall be

 

19

 

specified by the Board in accordance with the provisions of the Partnership’s budget and business plan approved by the Board.

 

8.3           Loans to Partnership .  To the extent the funds of the Partnership shall be inadequate from time to time, the Partnership shall attempt to obtain