Innovative Merchant Agreement
|
This Agreement ("Agreement") is entered into by and between the Merchant ("Merchant"), the Member FDIC insured Bank identified in the Merchant Application and/or Agreement ("Bank"), and Innovative Merchant Solutions, LLC., ("IMS"), an Independent Sales Organization and Merchant Services Provider for Bank, with headquarters in Calabasas, California. Any guarantor entering into this Agreement whether by executing this Agreement or by acknowledging consent by electronic means is also a party as a continuing guarantor pursuant to paragraph 4.03. To the maximum degree permitted by law and by the rules and regulations of MasterCard International, Inc., ("MasterCard") Visa U.S.A., Inc. ("VISA") JCB, International ("JCB") and Discover® Network ("Discover Network"), it is the intention of the parties that the rights of Bank set forth in this Agreement or arising from this Agreement, may be exercised by IMS. This Agreement shall not be effective until the Merchant's Application, which incorporates this Agreement by reference, is approved by Bank and IMS. The signature hereon constitutes only an offer made on behalf of, and is contingent upon, approval by Bank and IMS. By entering into this Agreement, Merchant agrees to comply with and be subject to, all MasterCard, VISA, Discover Network and JCB Discover Network rules and regulations as they may exist from time to time, including, but not limited to, chargeback procedures and the resolution of any disputes relating thereto. Copies of the rules are located at www.innovativeagreement.com. Any violation of MasterCard, VISA, JCB or Discover Network rules and regulations by Merchant shall constitute a breach of this Agreement and may, at the option of Bank and IMS, be grounds for terminating this Agreement. ARTICLE I - DEFINITIONS 1.01 "Account" means a Bank account maintained by Merchant as set forth in Section 5.19 for the crediting of collected funds and the debiting of fees and charges under the terms of this Agreement. 1.02 "ACH" means the Automated Clearing House paperless entry system operated by the Federal Reserve. 1.03 "Agreement" means these Terms & Conditions, the Merchant Business Application, the Rules, the ACH Authorization and any supplementary documents indicated herein, as amended from time to time. 1.04 "Authorization" means a computerized function or a direct phone call to a designated number to examine individual Transactions to obtain credit approval from the Card Issuer. 1.05 "AVS" (Address Verification System) this allows verification of the cardholder's Zip code and billing address while requesting authorizations for transactions or during a request for address verification only. 1.06 "Card" means (i) a valid credit card in the form issued under license from MasterCard, Visa, Visa International, Inc., JCB ("Bank Card"), (ii) any Payment Network such as Discover Network, or (iii) any other valid credit card accepted by Merchant by agreement with IMS and Bank. 1.07 "Card Association" means MasterCard, Visa, Discover Network, JCB or any other Card Issuers that provide Cards that are accepted by Merchant by agreement with IMS and its Bank. 1.08 "Cardholder" means the person whose name is embossed upon the face of the Card. 1.09 "Card Issuer" means the financial institution or company which has provided a Card to a Cardholder. 1.10 "Chargeback" means the procedure by which and the value of, a Sales Draft (or disputed portion thereof) is returned to Bank by a Card Issuer. 1.11 "Credit Voucher" means a document executed by a Merchant evidencing any refund or price adjustment credited to a Cardholder account. 1.12 "Discover Network" means the payment network known as Discover Network. 1.13 "Imprint" means (i) an impression on a Sales Draft manually obtained from a Card through the use of an imprinter, or (ii) the electronic equivalent obtained by swiping a Card through a terminal and electronically printing a Sales Draft. 1.14 "JCB" means JCB, International. 1.15 "MasterCard" means MasterCard International, Incorporated. 1.16 "Password" means unique alphanumeric access code provided to access information, software, database, and other content owned or licensed by IMS. 1.17 "Payment Card Industry Data Security Standard, or "PCI DSS" means the set of security standards that the Merchant must adhere to in regard to cardholder data. 1.18 "Payment Network" means the procedures and systems used to settle process and certain financial transactions, such as Discover Network. 1.19 "Retrieval" means a Card Issuer's or Card Holder's request of the Transaction receipt. 1.20 "Rules" means the rules and regulations of any Card Association or Payment Network, as amended from time to time. 1.21 "Sales Draft" means the paper form, approved in advance by IMS, whether such form is electronically or manually imprinted, evidencing a sale Transaction. 1.22 "Transaction" means any retail sale of goods and services, or credit for such, from Merchant for which the customer makes payment through the use of any Card and which is presented to Bank for collection. 1.23 "Visa" means Visa U.S.A., Inc. or Visa International, Inc. 1.24 "Voice Authorization" means a direct phone call to a designated number to obtain credit approval on a Transaction.
ARTICLE II - CARD ACCEPTANCE (a) Merchant will accept without discrimination, all valid Cards properly presented by Cardholders for payment for goods or services. (b) Merchant shall not establish minimum or maximum amounts for Card sales as a condition for accepting any Card. (c) Merchant shall not require any Cardholder to pay any part of any discount or charge imposed upon Merchant by this Agreement, whether through any increase in price or otherwise require a customer presenting a Card to pay any charge as a condition of sale that is not also required from a customer paying cash However, Merchant may offer discounts to customers for cash purchases. (d) Merchant shall not accept a Card as payment (other than for a mail order, telephone order, or preauthorized sale to the extent permitted under this Agreement), if the person seeking to use the Card does not present the Card to permit Merchant to examine it and obtain an imprint or otherwise use the physical Card to complete the Transaction. (a) Merchant will prominently display the promotional materials provided by IMS and its Bank in its place(s) of business. Use of promotional materials and use of any trade name, trademark, service mark or logo type ("Marks") associated with Card(s) shall be limited to informing the public that Card(s) will be accepted at Merchant's place(s) of business. Merchant's use of promotional materials and Marks is subject to the direction of IMS and its Bank. (b) Merchant may use promotional materials and Marks during the term of this Agreement and shall immediately cease their use and return any inventory to IMS and its Bank upon termination of this Agreement. (c) Merchant shall not use any promotional materials or Marks associated with Visa, MasterCard, Discover Network or JCB in any way which implies that Visa, MasterCard, Discover Network or JCB endorses any goods or services other than Card services. 2.03 Card Acceptance. When accepting a Card, Merchant will follow the steps provided by IMS and its Bank for accepting Cards and will: (a) Determine in good faith and to the best of its ability that the Card is valid on its face. (b) Obtain Authorization before completing any Transaction. Where Authorization is obtained, Merchant will be deemed to warrant the true identity of the customer as the Cardholder. (c) Obtain an Imprint of the Card unless the Sales Draft is electronically generated from a swiped transaction or is the result of an Internet, mail, phone or preauthorized order. (d) If your terminal is unable to read the magnetic stripe on the card, you will obtain an imprint of the card and the cardholder's signature on the imprinted draft before processing the sales draft. (e) Enter a description of the goods or services sold and the price thereof (including any applicable taxes). (f) Obtain the Cardholder's signature on the Sales Draft and compare that signature to the signature on the Card. (g) Deliver a true and completed copy of the Sales Draft to the Cardholder at the time of delivery of the goods or performance of the services, or if the Sales Draft is prepared by a point-of-sale terminal, at the time of the sale. (h) Offer the Sales Draft to IMS' Bank for purchase according to the Bank's procedures and the terms of this Agreement. (i) Legibly reproduce without alteration of the original transaction receipt, the Cardholder's name, account number, expiration date and the Merchant's name and place of business if that information is not legibly imprinted on the Sales Draft. Also, for MasterCard transactions, Merchant will legibly reproduce the name of the Card Issuer as it appears on the face of the Card. (j) Merchant is responsible for the actions of its employees and ensuring that its employees comply with all terms of this Agreement. (a) Merchant will obtain an Authorization for all Card sales. If Merchant cannot, for any reason, obtain an electronic Authorization, Merchant will request a Voice Authorization from the designated authorization center, and will legibly print the authorization number on the Sales Draft. Voice authorizations will be charged at a rate of $0.95 each. Voice authorization requests which require the assistance of a live operator will be charged $1.75 per occurrence. Referral authorizations are charged at a rate of $2.00 each. (b) Merchant shall not obtain or attempt to obtain an Authorization unless Merchant intends to submit a Transaction for the authorized amount. (c) Merchant will not divide a single Transaction between two or more Sales Drafts. (d) Merchant acknowledges that an Authorization provides only that the Cardholder account has sufficient credit available to cover the amount of the current sale, that an Authorization is not a guarantee for payment, and that an Authorization will not waive any provision of this Agreement or otherwise validate a fraudulent transaction or a transaction involving the use of an expired Card. MERCHANT IS FULLY LIABLE FOR ALL CHARGEBACKS. (e) Merchant will not attempt to obtain Authorization on an expired Card. Transactions will be deemed invalid on Cards that are expired, whether or not Authorization has been obtained. Upon Merchant's request, IMS will provide access to authorization and/or data capture services for American Express transactions. Merchant must enter into a separate merchant agreement with American Express. Neither IMS nor Member is responsible for funding such transactions. Further, IMS may notify you that American Express or other cards ("Additional Cards") may be accepted by you. If Merchant does not decline this offer in writing, IMS will forward certain information, including but not limited to your Merchant Account number, to the Additional Card Issuer. The terms of this Agreement will apply to Additional Card transactions. IMS will notify Merchant orally and/or in writing of the fees applicable to Additional Card transactions. Merchant's acceptance of Additional Cards and transmission of Additional Card transactions to IMS will constitute Merchant's agreement to the terms of this Agreement with regard to Additional Cards. 2.06 Retention and Retrieval of Cards. (a) Merchant shall use its best efforts, by reasonable and peaceful means, to retain or recover a Card when receiving such instructions upon making a request for Authorization. (b) The obligation of Merchant imposed by this section to retain or recover a Card does not authorize a breach of the peace or any injury to persons or property and Merchant will hold IMS and its Bank harmless from any claim arising from any injury to person or property, or other breach of the peace in connection with the retention or recovery of a Card. 2.07 Personal Information. Merchant as a condition of sale may not impose a requirement on Cardholders to provide any personal information as a condition for honoring Cards unless such information is required to provide delivery of goods or services or Merchant has reason to believe the identity of the person presenting the Card may be different than that of the Cardholder. 2.08 Multiple Transaction Records: Partial Consideration. Merchant shall not prepare more than one Sales Draft for a single sale or for a single item but shall include all items or goods and services purchased in a single Transaction in the total amount on a single Sales Draft except: (i) for purchases in separate departments of a multiple department store; (ii) for installment payment; or (iii) for delayed or amended charges governed by rules for travel and entertainment merchants and transactions. 2.09 Telephone Orders "TO", Mail Orders "MO", Preauthorized Orders "PO" and Installment Orders "IO". (a) Unless Merchant has been approved by IMS or its Bank to accept Internet, mail and phone orders, Merchant warrants that it is a walk-in trade business, located in a retail business place. If Merchant is found to be accepting mail orders, telephone orders, or Internet Transactions without such consent, this Agreement will be immediately terminated and the value of all Sales Drafts collected from the first day of processing may be charged back to Merchant and all funds therefrom shall be held pursuant to Section 3. (b) If authorized to accept payment by Internet, mail, phone or pre- authorized order, the Sales Draft may be completed without the Cardholder's signature or an imprint, but in such case Merchant shall create a Sales Draft containing Cardholder account number, expiration date, transaction date, an authorization number, the sale amount and the letters "MO", "TO", "PO", or "IO" as appropriate. In addition, the Merchant's business name, city and state must be included. Receiving an Authorization shall not relieve the Merchant of liability for Chargeback on any Transaction for which the Merchant did not obtain an imprint and the Cardholders signature. (c) For Approved MO, TO, PO, and IO Merchants, AVS is recommended and in some cases required. AVS is not a guarantee for payment, and the use of AVS will not waive any provision of this Agreement or otherwise validate a fraudulent transaction. (d) Unless approved in writing by IMS and acknowledged by Bank, Merchant shall not process sales prior to delivery of product or service. If the product is being shipped, the customer must be given the shipping date of the product once the sale is processed. Violation could result in immediate termination of this Agreement. (e) Merchant must not accept credit card sales via "electronic mail" over the Internet. 2.10 Lodging and Vehicle Rental Transactions. (a) Merchant must estimate and obtain Authorization for the amount of the Transaction based upon the Cardholder's intended length of stay or rental. Additional Authorization must be obtained and recorded for charges actually incurred in excess of the estimated amount. Some lodging Merchants are eligible to participate in Visa's Advanced Deposit Service Program. Merchants participating in this service must adhere to the Advanced Deposit Service Program rules as set forth by Visa. (b) Regardless of the terms and conditions of any written preauthorization form, the Sales Draft amount for any lodging or vehicle rental Transaction shall include only that portion of the sale, including any applicable taxes, evidencing a bona fide rental of personal property by Merchant to the Cardholder and shall not include any consequential charges. Nothing contained herein is intended to restrict Merchant from enforcing the terms and conditions of its preauthorization form through means other than a Card Transaction. 2.11 Returns and Adjustments: Credit Vouchers. (a) Merchant's policy for the exchange or return of goods sold and the adjustment for services rendered shall be established and posted in accordance with the Rules. Merchant agrees to disclose to a Cardholder before a Card sale is made, that if merchandise is returned: (i) no refund, or less than a full refund, will be given; (ii) returned merchandise will only be exchanged for similar merchandise of comparable value; (iii) only a credit toward purchases will be given; or (iv) special conditions or circumstances apply to the sale (e.g., late delivery, charges, or other noncredit terms). (b) Disclosures must be made on all copies of Sales Drafts in letters approximately 1/4" high in close proximity to the space provided for the Cardholder's signature on the sales draft and issued at the time of sale. (c) If Merchant does not make these disclosures, a full refund in the form of a credit to the Cardholder's Card account must be given. Merchant will not refund cash to a Cardholder who paid for the item by Card. (d) Credits must be made to the same Card account number on which the original sale Transaction was processed. (e) If Merchant accepts any goods for return or terminates or cancels any services, in conjunction with each such transaction, Merchant shall have sufficient funds in its account available to IMS and/or its bank to cover the amount of the transaction and any related fees. 2.12 Cash Payments. Merchant shall not receive any payments from a Cardholder for charges included in any Transaction resulting from the use of a Card nor receive any payment from a Cardholder to prepare and present a Transaction for the purpose of affecting a deposit to the Cardholder's Card account. (a) Merchant shall not deposit any Transaction for the purpose of obtaining or providing a cash advance either on Merchant's Card or the Card of any other party. Merchant agrees that any such deposit shall be grounds for immediate termination. (b) Merchant, shall not under any circumstances obtain Authorization for, nor process a sale on any card that Merchant is not authorized to use. Processing Merchant's own card is grounds for immediate termination. 2.14 Duplicate Transactions. Merchant shall not deposit duplicate Transactions. Merchant shall be debited for any duplicate Transactions and shall be liable for any Chargebacks which may result therefrom. 2.15 Deposit of Fraudulent Transactions. Merchant shall not accept or deposit any fraudulent Transaction and may not under any circumstances present for processing or credit, directly or indirectly, a Transaction which originated with any other merchant or any other source. Merchant shall not, under any circumstances, deposit Transactions evidencing sales that were solicited by telemarketers. If Merchant deposits any such transactions, this Agreement may be immediately terminated and IMS and/or its Bank may hold funds and/or demand a Reserve Account pursuant to Section 5.07. In addition, Merchant may be subject to the Card Association and Payment Network reporting requirements set forth in Section 4.02(c). Perpetrators of fraudulent transactions will be referred to law enforcement officials. 2.16 Collection of Pre-Existing Debt. Merchant shall not present any Transaction representing the refinancing of an existing obligation of a Cardholder including, but not limited to obligations (i) previously owed to Merchant, (ii) arising from the dishonor of a Cardholder's personal check, and/or (iii) representing the collection of any other pre-existing indebtedness, including collection of delinquent accounts on behalf of third parties. 2.17 Release of Cardholder Account Information. (a) Merchant will not, under any circumstances, disclose any Cardholder's account number nor any information relating to any Cardholder's account number or any Sales Drafts or Credit Vouchers which may have been imprinted with any Card to any person other than IMS or its Bank, or as required by law. Merchant agrees not to store, distribute, copy or otherwise manipulate card account numbers or PINs that appear, are encoded or are otherwise associated with Cards. All electronic commerce Merchants must provide Cardholders with a secure transaction method, such as Secure Sockets Layer (SSL) or 3-D Secure. Further, Merchant agrees to store any material containing Cardholder account information in a secure manner or destroy such information at the proper time in a fashion that renders the data unreadable, and unrecoverable. Neither Merchant nor any of its agents shall retain or store the full contents of any track on the Magnetic-Stripe, or equivalent data on the Contactless Payment chip, subsequent to Authorization of a Transaction. (b) Merchant confirms that it is, and shall be, in full compliance during the term of this Agreement with all laws, statutes and federal and/or state regulations, as well as the Rules applicable to Merchant, its business and any Transaction, including without limitation to all state and federal consumer credit and consumer protection statutes and regulations, non-disclosure of cardholder information to third parties and transaction documents, and other security procedures adopted by Visa, MasterCard, Discover Network, American Express and/or any other applicable payment network. Merchant hereby certifies that it (and any outside agent that it may utilize to submit transactions to Bank and/or IMS) complies with the PCI Data Security Standards ("PCI") as may be amended, (instituted by Visa, MasterCard and Discover Network). Merchant hereby agrees to pay any fees, fines and penalties that may be assessed by Visa, MasterCard and/or Discover Network as a result of Merchant's noncompliance with the requirements of PCI, or by its failure to accurately validate its compliance. The Merchant should review and/or monitor the requirements at https://www.pcisecuritystandards.org in order to determine its due date of compliance under PCI. The foregoing is an ongoing obligation during the term of this Agreement and as it may be renewed. Merchant acknowledges and understands that Merchant may be prohibited from participating in payment network programs if it is determined that Merchant is non-compliant. The following lists certain current PCI requirements, all of which Merchant shall comply with, if applicable: (i) install and maintain a working network firewall to protect data accessible via the Internet; (ii) do not use vendor-supplied defaults for system passwords and other security parameters; (iii) encrypt stored Cardholder data; (iv) encrypt transmission of Cardholder data sent across open, public networks; (v) use and regularly update anti-virus software; (vi) develop and maintain secure systems and applications; (vii) restrict access to Cardholder data to business "need to know;" (viii) assign a unique ID to each person with computer access to data; (ix) restrict physical access to cardholder information; (x) track and monitor all access to network resources and Cardholder data by unique ID; (xi) regularly test security systems and processes; and (xii) maintain a policy that addresses information security for employees and contractors. Merchant acknowledges that it may be subject to, and IMS and/or Bank retain the right, to conduct an audit performed by them and or any of their designated third party(s) to verify Merchant's compliance with the foregoing security procedures. Merchant is required to contact IMS and/or Bank within twenty-four (24) hours after becoming aware of (i) any suspected or actual data security breach and (ii) any noncompliance by Merchant with the security requirements set forth herein. Merchant shall be responsible, at its own expense, to (i) perform or cause to be performed an independent investigation of any data security breach of Card or Transaction data; (ii) perform or cause to be performed any remedial actions recommended by such investigation; and (iii) cooperate with IMS and/or Bank in the investigation and resolution of any security breach. (c) Merchant must notify IMS of its use of any third party that will have any access to Cardholder data. (d) Credit Card account number, except for the final four digits, must be disguised or suppressed on the Cardholder's copy of the transaction receipt. (e) The credit card's Expiration Date must be disguised or suppressed on the Cardholder's copy of the transaction receipt. 2.18 Compliance with Card Association and Payment Network Rules. Merchant shall comply with the Rules and all bylaws, rules and regulations of any Card Issuer. Merchant shall promptly pay penalties assessed by any Card Association, Payment Network or Card Issuer for failure of Merchant to comply with the Rules or other requirements. To obtain additional information visit www.innovativeagreement.com. (a) Merchant shall provide IMS and its Bank with immediate notice of its intent to: (i) transfer or sell any substantial part of its total assets, or liquidate; (ii) change the basic nature of its business, including selling any products or services not related to its current business; (iii) change ownership or transfer control of its business; (iv) enter into any joint venture, partnership or similar business arrangement whereby any person or entity not a party to this Agreement assumes any interest in Merchant's business; or (v) alter in any way Merchant's approved monthly volume and average ticket. (b) Failure to provide notice as required above may be deemed a material breach and shall be sufficient grounds for termination of this Agreement. Merchant agrees that a failure to disclose such information shall constitute a presumption that Merchant has committed an act of fraud in the event IMS and/or its Bank suffers any financial loss at the hands of a subsequent unreported purchaser or operator of Merchant. If any of the changes listed above should occur, IMS and its Bank shall have the option to re-negotiate the terms of this Agreement or provide immediate notice of termination. (c) Merchant will immediately notify IMS of any Bankruptcy, receivership, insolvency, levy or similar action initiated by or against Merchant or any of its principals. Merchant will include IMS and/or its Bank on the list of creditors filed with the Bankruptcy Court, whether or not a claim exists at the time of filing. IMS will charge an Administrative Fee of $150 to implement legally enforceable requests for payment of Merchant funds to parties other than Merchant, such as tax levies, payments to secured parties or other payment requests of a similar nature. (d) Merchant must notify IMS in writing of any changes to the information in the Merchant Application, including but not limited to: a change to Merchant's financial condition within 3 days, any additional location or new business, the identity of principals and/or owners, the form of business organization, type of goods and services provided, and how sales are completed. Merchant must also notify IMS in writing if Merchant sells or closes its business. Except for a change to the financial condition, all such notices must be received by IMS 7 days before the change. Merchant will provide updated information to IMS upon request. Merchant and or Guarantors agree that they are liable to IMS and its Bank for all losses and expenses incurred by IMS and/or its Bank arising out of Merchant's failure to report changes. IMS may immediately terminate this Agreement upon a change to the information in the Merchant Application, whether such change is independently discovered by IMS or whether IMS is notified of such change by Merchant. (e) Separate notification regarding changes to account information, including those to Account, must be made to outside services used by Merchant including but not limited to American Express, and leasing company. 2.20 Warranties of Merchant. Merchant hereby represents and warrants to IMS and Bank at the time of execution and during the term of this Agreement that: (a) All information contained in the Merchant Application or any other documents delivered to IMS and/or its Bank in connection therewith is true and complete and properly reflects Merchant's business, financial condition and principal partners, owners or officers. (b) Merchant has the power to execute, deliver and perform this Agreement, and this Agreement is duly authorized, and will not violate any provisions of law, or conflict with any other agreement to which Merchant is subject. (c) Merchant has all licenses, if any, required to conduct its business and is qualified to do business in every jurisdiction where it is required to do so. (d) There is no action, suit or proceeding at law or in equity now pending or to Merchant's knowledge, threatened by or against or affecting Merchant which would substantially impair its right to carry on its business as now conducted or adversely affect its financial condition or operations. (e) Each Sales Draft presented to IMS' Bank for collection is genuine and is not the result of any fraudulent transaction or telemarketing sale or is not being deposited on behalf of any business other than Merchant. Further, Merchant warrants that each Sales Draft is the result of a bona fide Card Transaction for the purchase of goods or services by the Cardholder in the total amount stated on the Sales Draft. (f) Merchant has performed or will perform all of its obligations to the Cardholder in connection with the Card Transaction evidenced thereby. (g) Merchant has complied with IMS and its Bank's procedures accepting Cards, and the Card Transaction itself shall not involve any element of credit for any other purposes other than as set forth in this Agreement and shall not be subject to any defense, dispute, offset or counter claim which may be raised by any Cardholder under the Rules, the Consumer Credit Protection Act (15 USC 1601) or other relevant state or federal statutes or regulations. (h) Any Credit Voucher which it issues represents a bona fide refund or adjustment on a Card sale by Merchant with respect to which a Sales Draft has been accepted. (i) Unless Merchant notifies IMS in writing (either on the Merchant Application or otherwise), no other processing relationship exists between Merchant and another Card processing institution, for this, or any other business run or owned by Merchant. 2.21 E-Commerce Address Notification. Merchant must display the address of its permanent establishment on its Website. This address should include the country of domicile and should be located either on the checkout screen used to present the total purchase amount to the Cardholder, or within the sequence of Web pages the cardholder accesses during the checkout process. 2.22 Automatic Payment Plan Card Sales. (a) Unless Merchant has been approved by IMS or its Bank to charge customers via an Automatic Payment Plan, Merchant warrants that goods and services are being provided to cardholders at the time of each transaction. If Merchant is found to be processing transactions via an Automatic Payment Plan, this Agreement will be immediately terminated and the value of all Sales Drafts collected from the first day of processing may be charged back to Merchant and all funds therefrom shall be held pursuant to Section 3. (b) If a Merchant uses the Internet or another electronic process to receive a Cardholder approval of the Automatic Payment Plan, the Merchant must retain all electronic evidence of the Cardholder's approval of the Automatic Payment Plan. The Cardholder's approval, whether written or electronic, must include all of the following information: (i) Cardholder's name, address and Card Number; (ii) Amount of each Automatic Payment Plan Card Sale, unless the amount can vary; (iii) Timing or frequency of payments; (iv) Length of time over which the Cardholder permits the Merchant to bill Automatic Payments to the Card Account; (v) Merchant's Merchant Number; (vi) Card expiration date; (vii) Total amount of Automatic Payments to be billed to Card Account, including taxes and tip(s), if an installation agreement; (viii) A general description of the transaction (ix) Merchant's business name and customer service telephone number that the Cardholder may call to obtain customer assistance from the Merchant or to revoke approval of the Automatic Payment Plan. (x) The first Automatic Payment Plan Card Sale must contain a positive response from the Address Verification System (AVS). If the first payment does not contain this information, all subsequent payments are subject to dispute and chargeback.
ARTICLE III - PRESENTMENT, PAYMENT, CHARGEBACK 3.01 Acceptance. Bank shall accept from Merchant all valid Sales Drafts deposited by Merchant under the terms of this Agreement and shall present the same to the appropriate Card issuers for collection against Cardholder accounts. All presentment and assignment of Sales Drafts, collection therefore and re-assignment or rejection of such Sales Drafts are subject to this Agreement and the Rules. IMS and/or its Bank shall only provisionally credit the value of collected Sales Drafts to Merchant's Account and reserves the right to adjust amounts collected to reflect the value of Chargebacks, fees, penalties, late submission charges, the difference in currency exchange if the Chargeback amount is greater than the original sale, and items for which Bank did not receive final payment. IMS and/or its Bank may refuse to accept any Sales Draft or revoke its prior acceptance of a Sales Draft in the following circumstances: (a) the transaction giving rise to the Sales Draft was not made in compliance with all the terms and conditions of this Agreement; (b) the Cardholder disputes his liability to IMS and/or its Bank for any reason, including but not limited to those Chargeback rights enumerated in the Rules; (c) the transaction giving rise to the Sales Draft was not directly between Merchant and Cardholder, or (d) the transaction is outside the parameters indicated on the Merchant Application. Merchant will pay IMS and/or its Bank, as appropriate, any amount previously credited to Merchant for a Sales Draft not accepted or later revoked by IMS and/or its Bank. 3.02 Endorsement. The presentment of Sales Drafts to Bank for collection and payment is Merchant's agreement to sell and assign its right, title and interest in each Sales Draft completed in conformity with IMS and/or its Bank's acceptance procedures and shall constitute an endorsement by Merchant to IMS and/or its Bank of such Sales Drafts. Merchant hereby authorizes Bank to supply such endorsement on Merchant's behalf. Merchant agrees that this Agreement is a contract of financial accommodation within the meaning of Bankruptcy Code 11 U.S.C. Section 365, as amended from time to time. Merchant acknowledges that its obligation to IMS and/or its Bank for all amounts owed under this Agreement arise out of the same transaction as IMS Bank's obligation to deposit funds to the Account. 3.03 Transmission Method. If Merchant utilizes electronic authorization and/or data capture services, Merchant will enter data related to a sales or credit transaction into a computer terminal or magnetic stripe reading terminal no later than the close of business on the date the transaction is completed. If Merchant provides its own electronic terminal or similar device, such terminals must meet IMS requirements for processing transactions. Information regarding a sales or credit transaction transmitted with a computer or magnetic stripe reading terminal will be transmitted by Merchant to IMS or its Bank in the form IMS from time to time specifies or is required under the Rules. If IMS and/or its Bank requests a copy of a Sales Draft, credit voucher or other transaction evidence, Merchant will provide it within 3 business days following the request. The means of transmission indicated in the Merchant Application shall be the exclusive means utilized by Merchant until Merchant has provided IMS and/or its Bank with at least 30 days prior written notice of Merchant's intention to change the means of such delivery or otherwise to alter in any material respect Merchant's medium of transmission of data to IMS. 3.04 Prohibited Payments. IMS and/or its Bank shall have the sole right to receive payment of any Sales Draft presented by Merchant and paid by IMS' Bank unless and until there is a Chargeback. Unless specifically authorized in writing by IMS and/or its Bank, Merchant shall not make or attempt to make any collections from Cardholders on any Transaction and shall hold any funds or property recovered in trust for IMS and/or its Bank and shall promptly deliver to Bank any payment Merchant receives, in whole or in part of the amount of any accepted Transaction, together with the Cardholder's name and account number and any correspondence accompanying the payment. (a) All Chargebacks are due upon presentation to Merchant's Bank. A failure to pay a Chargeback upon such presentation shall be considered a material breach of this Agreement and Merchant in addition to any other remedies as may be exercised by IMS and/or its Bank shall be charged a late charge of one and one half percent (1.5%) per month or portion thereof, or the highest amount allowable by law, whichever is less, on all unpaid Chargebacks. Merchant and/or Guarantor(s) agree that they are fully liable to IMS and/or its Bank for all Chargebacks, and that IMS and/or its Bank are authorized to offset from incoming transactions and to debit via ACH, the Account, the Reserve Account, or any other account held at any other financial institution in the amount of any Chargeback, including fees and costs. Merchant agrees to accept for Chargeback any sale for which the Cardholder disputes the validity of the sale according to the Rules, or IMS or its Bank determines that Merchant has in any way failed to comply with the Rules or IMS procedures, including but not limited to the following: (i) The Sales Draft is illegible, not signed by the Cardholder or has not been presented to Bank within the required time-frames. (ii) The Sales Draft does not contain the Imprint of a valid unexpired Card. (iii) A valid Authorization number has not been correctly and legibly recorded on the Sales Draft. (iv) The Sales Draft is a duplicate of a prior Transaction or is the result of two or more Transactions generated on one credit card for a single sale. (v) The Cardholder alleges that he or she did not participate in the sale, authorize the use of the Card, receive goods or services purchased, or receive a required credit adjustment, or disputes the quality of the goods or services purchased. (vi) The price of goods or services on the Sales Draft differs from the amount which Merchant presents for payment. (vii) The Transaction results from an Internet, mail, phone or preauthorized order and the Cardholder disputes entering into or authorizing the Transaction or the Transaction has been made on an expired or non-existing account number. (viii) IMS reasonably believes, within its sole discretion that Merchant has violated any provision of this Agreement. (ix) IMS reasonably determines that the transaction record is fraudulent or that the Transaction is not bona fide or is subject to any claim of illegality, cancellation, rescission, avoidance or offset for any reason whatsoever, including without limitation, negligence, fraud or dishonesty on the part of Merchant or Merchant's agents or employees. (x) Merchant fails to provide a Sales Draft or legible copy thereof to IMS and/or its Bank in accordance with this Agreement. Merchant acknowledges that IMS shall have full recourse to chargeback the amount of a Card sale for which the Cardholder disputes that he/she did not authorize the charge if (i) the Imprint of the Card and (ii) the signature of the Cardholder was not obtained by Merchant. (xi) Merchant shall not initiate a Transaction in an attempt to collect a Chargeback. (xii) Guarantors are personally liable for all Chargebacks. In the event Merchant sells its business and a new owner incurs Chargebacks, the original Merchant and all Guarantors will be held personally liable for the Chargebacks and any other liabilities of the new owner(s). In the event the Account is closed or is otherwise unavailable to IMS and/or its Bank for ACH debit, Merchant and/or Guarantors consent to IMS locating additional deposit accounts or assets by using any means available. In this event Merchant and/or Guarantors waive all rights to their privacy in favor of IMS and/or its Bank until such time as all unpaid Chargebacks and fees owed to IMS and/or its Bank have been paid in full. 3.06 Processing Limits. IMS may impose a cap on the dollar amount of Sales Drafts that it will process for Merchant as indicated on the Approved Merchant Application as Merchant's monthly volume or as established by IMS. This limit may be changed by IMS from time to time with or without notice to Merchant. If Merchant exceeds the limit established by this Agreement, IMS may suspend processing, charge over limit fees, hold the funds over the cap and/or return all Sales Drafts evidencing funds over the cap to Merchant. |
|
ARTICLE V – MISCELLANEOUS (a) Merchant acknowledges that IMS and/or its Bank will monitor Merchant's daily deposit activity. The deposit activity must remain consistent to the "approved" monthly volume and average ticket amount approved on the Merchant Application and/or by IMS. If the Merchant should exceed "approved" monthly volume, the Merchant acknowledges that additional documentation could be required. Merchant agrees that IMS may not process volumes over the approved monthly volume, and that Merchant is subject to a 5% fee on all monies processed over the approved monthly volume. Merchant agrees that IMS may, within its sole discretion suspend the disbursement of Merchant's funds for any reasonable period of time required to investigate suspicious or unusual deposit activity. IMS and/or its Bank will make good faith efforts to notify Merchant as promptly as is commercially reasonable. IMS and/or its Bank shall have no liability for any losses, either direct or indirect, which Merchant may attribute to any suspension of funds disbursement. (b) In the event of unusual Transactions that have been "suspended", Merchant agrees that a security processing fee not to exceed 110% of the unusual Transaction(s) may be assessed. (c) If a batch is suspended by IMS, Merchant acknowledges that the consumer's product or service must be delivered just as if the Merchant has been paid. Further, if a batch or a transaction is suspended, Merchant acknowledges that fees associated with the transactions will be charged including security fees. (d) Merchant's presentation to IMS of Excessive Activity will be a breach of the Agreement and a cause for immediate termination of this Agreement. "Excessive Activity" means, during any monthly period and for any one of Merchant's terminal identification numbers or merchant identification numbers, Chargebacks and/or retrieval requests in excess of 1% of the average monthly dollar amount of Transactions or returns in excess of 3% of the average monthly dollar amount of Transactions. Merchant authorizes, upon the occurrence of Excessive Activity, IMS and/or its Bank to take additional actions as either of them may deem necessary, including, but not limited to, suspension of processing privileges or creation or maintenance of a Reserve Account in accordance with this Agreement. 5.02 Password. If Merchant receives a password from IMS to access IMS' database, Merchant will: (i) keep the password confidential; (ii) not allow any other entity or person to use the password or gain access to IMS' database; (iii) be liable for all action taken by any user of the password; and (iv) promptly notify IMS if Merchant believes the confidentiality of IMS' database or its information has been compromised by use of the password. 5.03 Forms. Merchant shall use only such forms or modes of transmission of Sales Drafts and Credit Vouchers as are provided or approved in advance by IMS, and Merchant shall not use forms provided by IMS and/or its Bank other than in connection with Card Transactions without IMS' prior written consent. 5.04 Records. In addition to any records routinely furnished to IMS under this Agreement, Merchant shall preserve a paper or microfilm copy of all actual paper Sales Drafts and Credit Vouchers and if a mail, phone order or preauthorized order is involved, the Cardholder's signed Authorization for the Transaction for at least three (3) years after the date Merchant presents the Transaction. 5.05 Requests for Copies. Within three (3) days of receipt of any written or verbal request by IMS and/or its Bank, Merchant shall provide either the actual paper Sales Draft or a legible copy thereof (in size comparable to the actual Sales Draft) and any other documentary evidence available to Merchant and reasonably requested by IMS and/or its Bank to meet Bank's obligations under law (including its obligations under the Fair Credit Billing Act) or otherwise to respond to questions concerning Cardholder accounts. 5.06 Compliance with Law. Merchant shall comply with all laws applicable to Merchant, Merchant's business and any Card Transaction, including without limitation to all Rules, state and federal consumer credit and consumer protection laws. 5.07 Reserve Account, Recoupment and Set-Off. In addition to the security interest and chargeback rights granted to IMS and/or its Bank by Merchant as set forth within Article 5.07, Article 5.08, and article 5.09 of this Agreement, Merchant hereby authorizes IMS and/or its Bank to establish a Reserve Account, with or without prior notice to Merchant, at any time prior to, or after termination of this Agreement, to ensure the recovery of any liabilities owed them or reasonably anticipated by IMS and/or its Bank in their sole discretion to be owed by Merchant pursuant to this Agreement. Merchant further agrees: (a) Liabilities to be paid from the Reserve Account include, but are not limited to those arising out of actual and/or potential post termination Chargebacks, as well as any and all post-termination fees, charges and expenses due or anticipated to be due IMS and/or its Bank from Merchant. (b) Merchant agrees that if a Reserve Account is established, it shall be in any amount IMS and/or its Bank deems reasonable under the circumstances. The Reserve Account may be funded and/or replenished by IMS and/or its Bank by withholding or withdrawing from, or freezing all or any part of, the Account and/or any other deposit accounts maintained by Merchant and/or Guarantor at any Bank wherever found by any means available. Unless IMS and/or its Bank agree(s) otherwise in writing with Merchant, the Reserve Account shall not bear interest. (c) IMS and/or its Bank may enforce its security interest in the Reserve Account without notice or demand being first made to Merchant. IMS' and/or its Banks right to sums owed it by Merchant pursuant to this Agreement shall in no way be limited by the balance or existence of the Reserve Account. IMS' rights with respect to the Reserve Account, as well as the security interest granted IMS and/or its Bank under this Agreement, shall survive the termination of this Agreement. (d) IMS and/or its Bank may exercise their rights under this Agreement to collect any amounts due to IMS and/or its Bank including, without limitation, rights of set-off and recoupment. Merchant shall have no right to withdraw funds or debit the Reserve Account. (e) It is stipulated and agreed that the funds placed in the Account, or the Reserve Account are trust fund monies held and "earmarked" for the benefit of IMS and/or its Bank as that term has been defined by case law as applied within the United States Bankruptcy Courts. In the event of Bankruptcy proceedings IMS and/or its Bank may exercise their rights under this Agreement to debit the Account or the Reserve Account for amounts due IMS and/or its Bank regardless of the pre-petition or post petition nature of the amount due IMS and/or its Bank. In the event of a Bankruptcy proceeding Merchant also agrees that it will not contest any Motion For Relief From the Automatic Stay which IMS and/or its Bank may file to debit the Account and/or Reserve Account. (f) Funds in the Reserve Account will remain in the Reserve Account for a minimum of 270 days from the date of the oldest transaction in question or the date of termination, whichever is longer. IMS and/or its Bank will have sole control of the Reserve Account. In the event of a Bankruptcy proceeding IMS and/or its Bank do not consent to the assumption of this Agreement. Nevertheless if this Agreement is assumed Merchant agrees that in order to establish assurance of future performance within the meaning of 11 U.S.C. Sec 365, as amended from time to time, Merchant must establish a Reserve Account in an amount satisfactory to IMS and/or its Bank. (g) IMS and/or its Bank have the right of recoupment and set-off. This means that they may offset any outstanding/uncollected amounts owed to them from: (i) any amounts they would otherwise be obligated to deposit into the Account, and (ii) any other amounts merchant may owe Bank and/or IMS under this Agreement or any reporting, or any other agreement. (h) The rights conferred upon IMS and/or its Bank in this Section are not intended to be exclusive of each other or of any other rights and remedies of IMS and/or its Bank under this Agreement, at law or in equity. Rather, each and every right of IMS and/or its Bank at law or in equity will be cumulative and concurrent and in addition to every other right. As provided in California Financial Code Section 952 as it now exists and as it may be amended from time to time, whenever Merchant and/or its Guarantor has a deposit held with any Bank that arose from or is subject to this Agreement, to which, pursuant to this Agreement, Merchant is not entitled, Merchant's entitlement to such deposit shall be as a fiduciary of IMS and/or its Bank until any claim by IMS and/or its Bank against Merchant has been resolved. Merchant agrees that its failure to repay, within five (5) calendar days of notification by IMS and/or its Bank, funds to which Merchant is not entitled to, shall result in a presumption that Merchant intends to misappropriate such funds. Merchant further agrees that in the event IMS and/or its Bank seeks to enforce its rights herein in a court of competent jurisdiction, that any Receivership, Temporary Restraining Order, Preliminary Injunction, Writ of Attachment or Writ of Possession may be issued against Merchant may issue without bond. Merchant and Guarantors acknowledge that all documents submitted in conjunction with this Agreement are being submitted in order to induce a federally insured financial institution to extend them credit and that submission of any false information herein may subject them to criminal prosecution, fine and/or imprisonment. To secure Merchant's performance under this Agreement, including without limitation Merchant's obligations arising out of Chargebacks, Merchant hereby grants pursuant to the California Uniform Commercial Code, to IMS and/or its Bank a security interest in Merchant's electronic terminal, printer, imprinter and imprinter plate. Further, Merchant and/or Guarantor(s) grants to IMS and/or its Bank, a security interest in all Sales Drafts, credit drafts, and in all deposit accounts, regardless of source, wherever found, standing in the name of Merchant and/or Guarantor'(s), including any affiliated companies of Merchant and/or Guarantor, whether established or designated and maintained pursuant to this Agreement or not, as well as in the proceeds of those deposits. In the event of Merchant's default in payment of Chargebacks, Merchant and Guarantor(s) stipulate: (i) that all personal Bank accounts standing in their names shall be subject to this Agreement and ACH debit, and (ii) all ACH debits, whether made against Merchant's Account or a Guarantor's personal account shall bear a commercial account code designation (CCD) for purposes of electronic collection via the ACH system, and (iii) Merchant and/or Guarantor irrevocably consent to IMS and/or its Bank's using any means available to locate such deposit accounts until such time as all amounts due have been paid. IMS and/or its Bank may enforce this security interest as applicable by: (a) Making an immediate debit/charge via the ACH system (code CCD) to any deposit account standing in the name or names of Merchant and/or Guarantor(s), without notice or demand of any kind; and/or interrupting the electronic transmission of funds to any account through the Automated Clearing House (ACH) system; (b) Freezing the entire Account, without notice or demand of any kind, upon IMS and/or its Bank's and IMS' determination that Merchant has breached any term of this Agreement; (c) Taking possession of any or all of Merchant's Sales Drafts, verification and confirmation of Transactions; (d) Taking possession of any and/or all of Merchant's electronic terminals, printers, imprinters and imprinter plates. (e) By placing a receiver within Merchant's place of business without notice or bond to intercept and collect all income derived from Merchant's operations until such time as any indebtedness owed to IMS and/or its Bank arising under this Agreement has been satisfied in full; (f) By obtaining either a writ of attachment or a writ of possession without bond pertaining to Merchant and/or its Guarantor's personal property upon a showing of a presumption that Merchant has committed an act of fraud or is about to misappropriate funds to which it is not entitled. Merchant shall provide any statement or notice that IMS and/or its Bank determines to be necessary to preserve and protect this security interest. Merchant's and/or Guarantor's granting of this security interest in no way limits Merchant's liabilities to IMS and/or its Bank under this Agreement. 5.10 Severability. If any provision of this Agreement is held invalid or unenforceable by any court of final jurisdiction, it is the intent of the parties that all other provisions of this Agreement be construed to remain fully valid enforceable and binding on the parties. (a) Merchant may be using special services or software provided by a third party to assist Merchant in processing transactions, including authorizations and settlements, or accounting functions. Merchant is responsible for insuring compliance with the requirements of any third party in using their products. This includes making sure Merchant has and complies with any software updates. IMS has no responsibility for any transaction until that point in time IMS receives data about the transaction. (b) Merchant will notify IMS immediately if Merchant decides to use electronic authorization or data capture terminals or software provided by any entity other than IMS or its authorized designee ("third party terminals") to process transactions. If Merchant elects to use third party software or terminals, Merchant agrees: (i) the third party providing the software or terminals will be Merchant's agent in the delivery of the Transactions to IMS and/or its Bank via a data processing system or network; and (ii) to assume full responsibility and liability for any failure of that third party to comply with the Rules, this Agreement and any applicable federal and state law, including but not limited to the Fair and Accurate Transactions Act (FACTA) requiring the truncation of credit card receipts. Neither IMS and/or its Bank will be responsible for any losses or additional fees incurred by Merchant as a result of any error by a third party agent or a malfunction in a third party's software or terminal. 5.12 Modifications to Agreement. This Agreement is subject to amendment to conform to the Rules or with IMS' or the Bank's policies. From time to time IMS and/or its Bank may amend any provision of this Agreement, including, without limitation, those relating to the discount rate or to other fees and charges payable by Merchant by mailing written notice to Merchant of the amendment, and the amendment shall become effective unless IMS and/or its Bank receives Merchant's notice of termination of this Agreement within 7 days. Amendments due to changes in either a Card Association's or Payment Network's fees, interchange, assessments, Rules or any law or judicial decision may become effective on such shorter period of time as IMS may specify if necessary to comply with the applicable Rule, law, or decision. 5.13 Supplementary Documents. Reference to "this Agreement" includes any valid schedules, appendices and amendments thereto. 5.14 Limitation of Liability/Indemnity. (a) The liability, if any, of IMS and/or its Bank, under this Agreement whether to Merchant or to any other party, whatever the basis of liability, shall not exceed in the aggregate the difference between (i) the amount of fees paid by Merchant to IMS and/or its Bank during the month in which the Transaction out of which the liability arose occurred, and (ii) assessments, Chargebacks, and any offsets authorized under this Agreement against such fees which arose during such month. In the event more than one month was involved, the aggregate amount of IMS and/or its Bank's liability shall not exceed the lowest amount determined in accord with the foregoing calculation for any one month involved. In no event will IMS and/or its Bank, nor its officers, agents, directors, or employees be liable for any indirect, special, or consequential damages including loss profits, revenues and business opportunities. (b) Merchant hereby agrees to indemnify and hold harmless IMS and/or its Bank and their affiliates, and any employees, agents, representatives, members, or stockholders of any of them, from any claim relating to a dispute between Merchant and a Cardholder, any Sales Draft paid for by Bank as may be made by anyone by way of defense, dispute, offset, counterclaim or affirmative action, or for any damages of, or losses that either IMS and/or its Bank may incur as a result of Merchant's breach of this Agreement. Further, Merchant shall reimburse IMS and/or its Bank, as the case may be, for all expenses and costs, including reasonable attorney's fees, with regard thereto. (c) IMS and/or its Bank will perform all services in accordance with this Agreement. IMS MAKES NO OTHER WARRANTY, EXPRESS OR IMPLIED, REGARDING THE SERVICES, AND NOTHING CONTAINED IN THE AGREEMENT WILL CONSTITUTE SUCH A WARRANTY. IMS DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING THOSE OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT AND TITLE. IMS FURTHER DOES NOT REPRESENT OR WARRANT THAT THE SERVICES WILL ALWAYS BE AVAILABLE, ACCESSIBLE, UNINTERRUPTED, TIMELY, SECURE, ACCURATE, COMPLETE, OR ENTIRELY ERROR-FREE. IMS will not be liable to the other parties for any failure or delay in its performance of this Agreement if such failure or delay arises out of causes beyond the control and without the fault or negligence of IMS. 5.15 Waiver. Failure by Bank or IMS to enforce one or more of the provisions of this Agreement shall not constitute a waiver of the right to enforce the same or other provision in the future. All waivers must be signed by the waiving party. 5.16 Notices. All notices and other communications required or permitted under this Agreement by Merchant to IMS and/or its Bank shall be delivered by Merchant to IMS by overnight carrier or certified mail, postage or other charges prepaid, addressed and transmitted as set forth below. All notices and other communications required or permitted under this Agreement by IMS or its Bank to Merchant shall be delivered by IMS or its Bank to Merchant either by FAX, e-mail, overnight carrier or first class mail, postage or other charges prepaid, addressed and transmitted as set forth below. Notice by FAX or e-mail shall be deemed delivered when transmitted. Notice by mail or overnight carrier shall be deemed delivered on the first business day after mailing or delivery to the carrier. Following are the addresses for the purposes of notices and other communications hereunder, which may be changed by written notice in accordance with this section: a) If to IMS and/or its Bank, addressed and transmitted as follows: b) If to Merchant, at the address provided as the billing address, or the FAX number or e-mail address and to the contact listed on the Merchant Application. 5.17 Choice of Law: Jurisdiction. The parties agree that all performances and transactions under this Agreement will be deemed to have occurred in California and that Merchant's entry into and performance of the Agreement will be deemed to be the transaction of business within the State of California. The parties stipulate that at the option of IMS and/or its Bank, that the exclusive venue for any action between them shall be: (i) at the United States District Court, Central District of California located within the County of Los Angeles in the State of California, or (ii) the Van Nuys Judicial District (Municipal Court) or Northwest District (Superior Court) located within the County of Los Angeles. In the event the United States District Court is chosen as the venue and to the extent that federal law is governed by state law, this Agreement shall be construed in accordance with and governed by California law as applied to contracts that are executed and performed entirely in California. In the event that a state court is chosen, the same standard shall apply. 5.18 Entire Agreement: Assignment. This Agreement, including the Merchant Application, the Schedule of Fees and The Rules, expresses the entire understanding of the parties with respect to its subject matter and except as provided herein, may be modified only in writing executed by all parties. This Agreement may be assigned by IMS, but may not be assigned by Merchant, directly or by operation of law, without the prior written consent of IMS and/or its Bank. If Merchant nevertheless assigns this Agreement without such consent, the Agreement will be binding upon the assignee. If Merchant sells its business and the new owners incur Chargebacks, the original owner and all of the original Guarantors will be held personally liable for all Chargebacks and any other liabilities of the new owners. This Agreement shall be binding upon and inure to the benefit of the parties' respective heirs, and personal representatives for an individual, otherwise its permitted successors and assigns. (a) Merchant will establish and maintain an Account at an ACH receiving depository institution approved by IMS and/or its Bank. Merchant will maintain sufficient funds in the Account to satisfy all obligations, including the fees and Chargebacks contemplated by this Agreement. Merchant irrevocably authorizes IMS and/or its Bank to debit Account for Chargebacks, fees and any other penalties or amounts owed under this Agreement. In the event the Account lacks sufficient funding Merchant and Guarantors authorize IMS and/or its Bank to debit via ACH without notice any Bank account standing in their name(s) or the name of any affiliated entity. Merchant must obtain prior written consent from IMS and/or its Bank to change the Account. If Merchant does obtain such consent, IMS and/or its Bank may immediately terminate the Agreement and may take other action necessary, as determined by them within their sole discretion. (b) IMS and/or its Bank will deposit all Sales Drafts to the Account subject to Section 3.01 of this Agreement. Merchant authorizes IMS and/or its Bank to initiate reversal or adjustment entries and initiate or suspend such entries as may be necessary to grant Merchant conditional credit for any entry. (c) IMS or Bank, in its sole discretion may grant Merchant provisional credit for Transaction amounts in the process of collection, subject to receipt of final payment by IMS and/or its Bank and subject to all Chargebacks and other amounts owed to IMS and/or its Bank under this Agreement. (d) Merchant will promptly examine all statements relating to Account and immediately notify IMS and/or its Bank in writing of any errors. Merchant's written notice must include: (i) Merchant name and Account number, (ii) the dollar amount of the asserted error, (iii) a description of the asserted error, and an explanation of why Merchant believes an error exists and the cause of it, if known. That written notice must be received by IMS within 30 days after Merchant received the periodic statement containing the asserted error. Merchant may not make any claim against IMS and/or its Bank for any loss or expense relating to any asserted error for 60 days immediately following receipt of Merchant's written notice. During that 60 day period, IMS and/or its Bank will be entitled to investigate the asserted error and Merchant will not incur any cost or expense in connection with the asserted error without notifying IMS. (e) Merchant will indemnify and hold harmless IMS and/or its Bank and their affiliates and/or subsidiaries, and any of their officers, directors, agents, members, stockholders or employees, for any action they take against the Account pursuant to this Section. Merchant will also indemnify and hold harmless the institution at which Merchant maintains the Account for acting in accordance with any instruction from IMS and/or its Bank regarding the Account. This section will survive termination of this Agreement. (f) Merchant authorizes IMS and/or its Bank to initiate debit/credit entries to the Account, as the Account may be changed from time to time and to any other account maintained by Merchant at any institution that is a receiving Bank of ACH, all in accordance with this Agreement. In the event Merchant changes the Account, Merchant will notify IMS, and this authorization will apply to the new Account. This authorization will be effective until both: (i) IMS has received written notification from Merchant terminating this authorization, and (ii) all obligations of Merchant to IMS and/or its Bank have been paid in full. Merchant will provide to IMS and its Bank a voided Account check and will fill in the Account numbers on the Merchant's ACH Business Application. 5.20 Credit and Financial Inquiries: Additional Locations: Inspections. (a) Merchant authorizes Bank and IMS to make, at any time during which Merchant owes any obligation to IMS and/or its Bank, any credit inquiries which either may consider necessary to accept or review acceptance of this Agreement or investigate Merchant's deposit or Card acceptance subsequent to acceptance of this Agreement. Such inquiries shall include, but are not limited to, a credit check of the business including its proprietor, principal owners or officers. If requested to do so by Bank or IMS, Merchant shall provide the written consent of any person for which an inquiry has been or is to be made if such person has not executed this Agreement and will provide any financial statements, income tax and business tax returns and other financial information as Bank or IMS may consider necessary to perform initial or periodic reviews of Merchant's financial stability and business practices. (b) Merchant may honor Cards only at locations approved by IMS. Additional locations may be added, subject to IMS' approval. Either Merchant or IMS may delete any location by providing notice as provided in this Agreement. (c) Merchant agrees to permit Bank or IMS at any time from time to time, to inspect locations to confirm that Merchant has or is adhering to the terms of this Agreement and is maintaining the proper facilities, equipment, inventory, records and licenses or permits (where necessary) to conduct its business. However, nothing in this paragraph shall be deemed to waive Merchant's obligation to comply in all respects with the terms of this Agreement. (d) Representatives of IMS and/or its Bank may, during normal business hours, inspect, audit and make copies of Merchant's books, accounts, records and files pertaining to any Card Transaction. 5.21 Marketing of Non-Payment Card Services by IMS. From time to time, IMS may offer to Merchant certain additional products and services which may or may not be related to the processing of credit card Transactions. In the event of such offers, Merchant shall indicate its desire to IMS to decline such offers or be deemed to have accepted the offers and be liable for payment therefore. 5.22 Fees and Other Amounts Owed. (a) Merchant shall pay to IMS and/or its Bank the fees and charges set forth on the attached Schedule of Fees which is incorporated into this Agreement. The Account will be debited through ACH for such amounts and for any other fees, charges or adjustments incurred by Merchant and associated with processing services. Merchant is obligated to pay all taxes and other charges imposed by any governmental authority on the services provided under this Agreement. IMS and/or its Bank shall have the right to change fees, with or without notice, including adding fees for additional services utilized by Merchant. (b) Merchant will immediately pay IMS and/or its Bank any amount incurred by IMS attributable to this Agreement or any other agreement between Merchant and IMS or any subsidiary or affiliate of IMS, including but not limited to equipment fees, Chargebacks, fines imposed by a third party, non-sufficient fund fees and ACH debits that overdraw the Account, Reserve Account, or are otherwise dishonored. Merchant authorizes IMS and/or its Bank to debit via ACH the Account, the Reserve Account any other Account Merchant has with IMS, an affiliate or subsidiary of IMS, its Bank or at any other financial institution for any amount Merchant owes under this Agreement or under any other contract, note, guaranty, or dealing of any kind now existing or later entered into between Merchant and IMS or any subsidiary or affiliate, whether Merchant's obligation is direct, indirect, primary, secondary, fixed, contingent, joint or several. In the event such ACH does not fully reimburse IMS and/or its Bank for the amount owed, Merchant will immediately pay IMS and/or its Bank such amount. 5.23 Signature. Merchant represents and warrants that the person signing, physically and/or by acknowledging consent by electronic means, is duly authorized to bind Merchant to all provisions of this Agreement and that such person is authorized to execute any documents and to take any action on behalf of Merchant which may be required by IMS now or in the future. Merchant will execute a separate Entity Certification if requested to do so by IMS. Further, Merchant, by its signature, upon its first transmission of Transactions, or first payment of fees acknowledges that it has received and understands the terms of this Merchant Agreement. Merchant acknowledges that if Merchant has not entered into this Agreement by executing a copy or by acknowledging consent by electronic means, Merchant agrees that Merchant's first transmission of transactions or first payment of fees to IMS constitutes Merchant's acceptance of this Agreement. 5.24 General. If any provision of this Agreement is illegal, the invalidity of that provision will not affect any of the remaining provisions of this Agreement and will be construed as if the illegal provision is not contained in the Agreement. Merchant is responsible for its employee's actions while in its employ. The parties do not intend to confer any benefits on any person or entity other than Merchant, IMS and/or its Bank. Sections 2.16, 2.17, 2.19, 3.02, 4.02, 4.03 and the entirety of section 5 will survive termination of this Agreement. 5.25 Costs. Merchant will be liable for and will indemnify and reimburse IMS and/or its Bank for all costs paid or incurred by IMS and/or its Bank in the enforcement of this Agreement, including but not limited to attorney's and investigator's fees, or in collecting any amounts due from Merchant or resulting from any breach by Merchant of this Agreement. (a) Merchant is required to verify the terms of any lease agreement by way of a telephone conference call between Merchant, IMS and the leasing company. Each Merchant will have a scheduled appointment date and time to complete this verification. If Merchant does not verify the lease on the scheduled appointment date and time, an IMS representative will make two additional attempts to contact the Merchant and complete the verification. If the lease cannot be successfully verified after these additional attempts, an ACH debit will be made to the Merchant's Account to recover the costs of equipment, shipping and handling. The Merchant may call and reschedule the appointment prior to the initial appointment date and time. The new appointment cannot be set more than 5 business days from the original appointment date. (b) Occasionally to meet specific programming requirements, especially in the case of debit card processing, IMS will be required to swap a Merchant's pre-existing piece of equipment with one provided by IMS. In return for the IMS equipment, Merchant must send to IMS Merchant's existing equipment of same type and function. This swap must be completed within 30 calendar days from the date Merchant receives IMS' equipment or the price of equipment, shipping and handling will be debited from Merchant Account (c) Merchant cannot return equipment after 30 days from the receipt. All equipment returns will be assessed a 20% restocking fee. Updates to this Agreement will be made periodically. It is the Merchant's obligation to obtain and retain a current, complete and correct copy of the Merchant Agreement, and to periodically view the Merchant Agreement at www.innovativeagreement.com to be advised of any changes to the Merchant Agreement. A copy of the Merchant Agreement can also be obtained directly from Bank or IMS, for which a fee may be charged. |
|
ARTICLE VII - DEBIT CARD PROGRAM 7.01 Applicability to This Agreement. In addition to all other provisions of this Merchant Agreement, the provisions of this Article 7 shall apply if Merchant elected to utilize the debit card online network. Bank shall sponsor Merchant for membership in the debit card online network that Merchant has selected. Merchant acknowledges that sponsorship does not guarantee acceptance. IMS shall process and settle Merchant's debit card transactions. Until and unless otherwise authorized by IMS, Merchant shall utilize IMS' compatible terminals, PIN pads or systems capable of processing all Automatic Clearing House (ACH) debit card transactions as well as online debit card transactions. Merchant shall abide by all applicable laws, statutes and regulations in addition to all the rules and regulations of the debit card online network that Merchant has selected. Failure to do so shall subject Merchant, at Bank's or IMS' sole discretion, to immediate termination of this Agreement. Merchant shall be responsible for all paper copies of debit card transactions, in accordance with the applicable debit card network rules. Within one business date of the original transaction, Merchant shall balance each location to the system for each business day that such location is open. Merchant shall be responsible for all telephone message unit costs, if any, as they are incurred by Merchant for any of the services that are provided. Unless specifically noted herein, the responsibility for the installation of and training in the use of terminals shall be with Merchant. Merchant shall be responsible for entering data correctly. If an entry is made incorrectly, IMS shall use its best efforts to assist Merchant in correcting the entry, but cannot guarantee that the effort will be successful. MERCHANT AGREES AND ACKNOWLEDGES THAT NEITHER BANK OR IMS SHALL HAVE LIABILITY, EITHER IN TORT, CONTRACT OR IN COMBINATION THEREOF, FOR CLAIMS ARISING FROM DEBIT CARD TRANSACTIONS EXCEPT IN THE CASE OF GROSS OR WILLFUL MISCONDUCT ON THE PART OF BANK OR IMS. IN NO EVENT SHALL BANK OR IMS BE LIABLE FOR SPECIAL, CONSEQUENTIAL, INDIRECT OR EXEMPLARY DAMAGES, INCLUDING LOST PROFITS, REVENUES AND BUSINESS OPPORTUNITIES. Monthly Access Fee $10.00 Merchant acknowledges that in addition to the Debit Transaction Fee set forth on the Merchant Application, each debit transaction will also be charged the Network Fee on a per transaction and per network basis for the Networks accessed and utilized by the Merchant. These fees are subject to change from time to time to conform with the interchange provisions set forth by the Debit Networks. To review the most recent revision of all Network Fees, please refer to www.innovativemerchant.com. NOTE: All fees and other charges shall be settled monthly through the Automated Clearing house (ACH). (a) Merchant is expressly prohibited from requesting PIN numbers verbally or in writing as a condition of a sale. Merchant may not document or retain PIN numbers in any fashion at any time. (b) POS terminals must be positioned in a way to reasonably secure it from observation. The location of the security cameras should be noted and it must be ensured that the cameras are not able to view the PIN pad. Pin Entry Device (PED) shielding will be considered as one of the possible prevention methods. (c) The operational placement and use of the Tamper Resistant Security Module (TRSM) must be within its intended physical and logical environment. POS terminals designed for indoor use are not suitable for outside use. The modification of TRSMs from their original manufactured specifications must be restrained. |