SUBMERCHANT AGREEMENT: TERMS AND CONDITIONS
This Submerchant Agreement contains the terms and conditions under which Servicer, defined herein below, and/or other third parties will provide payment facilitation services to you that facilitate Submerchant’s acceptance of Cards for goods and services provided to Cardholders (the “Submerchant”) and includes the Merchant Application signed by Submerchant. For the purposes of this Agreement, Democracy Engine, LLC shall be referred to hereinafter as “Payment Facilitator”.
PART ONE: CARD ACCEPTANCE – TERMS AND CONDITIONS APPLICABLE TO SUBMERCHANTS ACCEPTING VISA, DISCOVER, MASTERCARD, AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, UNIONPAY AND ANY OTHER CARD
Subject to the requirements of applicable Card Brand Rules, Payment Facilitator and Bank may allocate their respective duties and obligations between themselves as they deem appropriate at their sole discretion, and Payment Facilitator or Bank may jointly or individually assert or exercise the rights or remedies provided to the Servicer hereunder. For purposes of Part One of this Agreement, Bank and Payment Facilitator are collectively referred to hereinafter as the “Servicer”.
ARTICLE I – DEFINITIONS
1.1 “Account” means a commercial checking or demand deposit account maintained by Submerchant referred to in Section 6.16 for the crediting of collected funds and the debiting of fees and charges under this Agreement.
1.2 “ACH” means the Automated Clearing House paperless entry system controlled by the Federal Reserve Board.
1.3 “Agreement” means the Application Form, these terms and conditions, any supplementary documents referenced herein, and valid schedules and amendments to the foregoing.
1.4 “American Express” means the Cards bearing the Marks of, and Card Brand operated by, American Express Travel Related Services Company, Inc. or its affiliates.
1.5 “Applicable Law” means all federal, state and local statutes, ordinances, laws, regulations and executive, administrative and judicial orders applicable to the Agreement, the transactions or other matters contemplated under the Agreement (including, without limitation, the rules and regulations promulgated by the Office of Foreign Assets Control of the U.S. Department of the Treasury), and all amendments thereto; and with respect to Bank, also guidance by its financial institution regulators.
1.6 “Application Form” or “Merchant Application” or “Submerchant Application” means the Payment Facilitator application form completed by the Submerchant.
1.7 “Authorization” means a computerized function or a direct phone call to a designated number to examine individual Transactions to obtain approval from the Card Issuer to charge the Card for the amount of the sale.
1.8 “Bank” shall mean Wells Fargo Bank, N.A.
1.9 “Bank Rules” means the rules and regulations provided by Bank to Submerchant in writing, as amended from time to time, which are incorporated into this Agreement by reference.
1.10 “Card” means (i) a valid credit card in the form issued under license from Visa U.S.A., Inc. Visa International, Inc., Discover®, MasterCard International, Inc., American Express, or UnionPay; or (ii) any other valid credit card accepted by Submerchant by agreement with Servicer.
1.11 “Card Brand” means Visa U.S.A., Inc., Visa International, Inc., Discover, MasterCard International, Inc., American Express Travel Related Services Company, Inc., China UnionPay Co. Ltd., any affiliate of the foregoing, or any other Card networks that provide Cards accepted by Submerchant pursuant to an agreement with Servicer.
1.12 “Card Brand Rules” means the bylaws, rules, regulations, guidelines, policies, procedures, interpretations and other requirements of the Card Brands.
1.13 “Card Issuer” means the financial institution or company which has provided a Card to a Cardholder.
1.14 “Card Not Present (CNP)” means that an Imprint of the Card is not obtained at the point-of-sale.
1.15 “Cardholder” (sometimes referred to as “Card Member” in certain Card Brand materials) shall mean any person authorized to use the Cards or the accounts established in connection with the Cards.
1.16 “Cardholder Information” means any non-public, sensitive information about a Cardholder, including any combination of Cardholder name plus the Cardholder’s social security number, driver’s license or other identification number or credit or debit card number, or other bank account number.
1.17 “Chargeback” means the procedure by which a Sales Draft (or disputed portion thereof) is returned to Servicer by a Card Issuer because such item does not comply with the applicable Card plan’s operating regulations.
1.18 “Credit Voucher” means a document executed by a Submerchant evidencing any refund or price adjustment relating to Cards to be credited to a Cardholder account.
1.19 “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 capturing Card Data and printing a Sales Draft.
1.20 “Mid or Non-Qualifying Transaction” means any sale Transaction that fails to qualify for lowest interchange rate assigned by the applicable Card Brand for Submerchant’s standard card industry code and which may be charged fees as set forth in Schedule A, as amended from time to time, or as otherwise mutually agreed to by Payment Facilitator and Submerchant.
1.21 “mPOS” means any mobile point of sale, including smartphones, tablets, or any other dedicated wireless devices that perform the functions of a cash register or electronic point of sale terminal.
1.22 “Payment Facilitator Marks” means the names, marks, designs, slogans, signs, acronyms and other insignia (whether registered or unregistered) used or to be used by Payment Facilitator including all variations thereof and amendments thereto from time to time.
1.23 “Public Announcement” means disclosure in a press release reported in the associated press or comparable national news service or in a document publicly filed by Payment Facilitator.
1.24 “Sales Draft” means the paper form, whether electronically or manually imprinted, evidencing a sale Transaction.
1.25 “Service Provider” means any third party providing services involving or relating to (i) access to Cardholder data, transaction data or information related to either Cardholder data or transaction data or (ii) PIN encryption.
1.26 “Transaction” means any sale of products or services, or credit for such, from a Submerchant for which the Cardholder makes payment through the use of any Card and which is presented to Servicer for collection.
1.27 “Voice Authorization” means a direct phone call to a designated number to obtain credit approval on a Transaction from the Card Issuer, whether by voice or voice-activated systems.
ARTICLE II – PAYMENT FACILITATION
2.1 Submerchant Authorization.
Submerchant hereby authorizes Payment Facilitator to facilitate the debiting and crediting of the Account for purposes of (i) depositing funds to Submerchant’s Account, (ii) debiting from Submerchant’s Account any chargebacks, refunds, or reversals, and (iii) debiting any fees or charges owed to Bank and Payment Facilitator. Submerchant shall maintain current Account information with Payment Facilitator at all times. Submerchant’s failure to maintain current Account information may result in funds being misdirected, withheld, or returned to its Cardholders. Payment Facilitator shall in no event be liable for any damages directly or indirectly resulting from incorrect Account information.
2.2 High Volume Submerchants.
Submerchant must immediately notify Payment Facilitator if it has, or in Submerchant’s reasonable opinion will, have greater than $1,000,000 in annual Card sales volume processed hereunder (based upon the date Submerchant’s account is boarded) for any one Card Brand. Further, Submerchant must also immediately notify Payment Facilitator if it has, or in Submerchant’s reasonable opinion will, have greater than $1,000,000 in annual Card sales volume processed hereunder (”$1M Threshold”). If Submerchant reaches or exceeds the $1M Threshold, Submerchant acknowledges that Payment Facilitator will immediately review the account, provided that Submerchant meets Bank’s then-current merchant acceptance criteria, in order to continue submitting transactions for processing.
ARTICLE III – CARD ACCEPTANCE
3.1 Bank Disclosure
Member Bank Information:
Wells Fargo Bank, N.A.
P.O. Box 6079
Concord, CA 94524
Phone (844) 284-6834
The Bank is the only entity approved to extend acceptance of the use of Card Association products by a Merchant or Submerchant.
3.2 Honoring Cards.
(a) Submerchant will accept all valid Cards when properly presented by Cardholders in payment for goods or services, subject to applicable Card Brand Rules requiring Submerchant to elect whether it will accept credit only, debit only or both debit and credit Cards. Submerchant’s election is set forth in the Application Form. Submerchant may not establish minimum or maximum amounts for Card sales as a condition for accepting any Card.
(b) Submerchant may not require any Cardholder to pay as a surcharge any part of any discount or charge imposed upon Submerchant by this Agreement, whether through any increase in price or otherwise require a Cardholder to pay any charge or price as a condition of sale that is not also required from a customer paying cash. Notwithstanding the foregoing sentence, Submerchant may impose a surcharge on certain Card Transactions, but only where permitted by federal law, state law and the Card Brand Rules. Submerchant (and not Servicer) is solely responsible for ensuring that it is permitted by federal law, state law and the Card Brand Rules to impose a surcharge. Submerchant may be required to provide notification to the Card Brands if it imposes a surcharge and hereby authorizes Servicer to provide such notification and furnish any necessary documentation, on Submerchant’s behalf, to the Card Brands.
(c) However, Submerchant may not, by this term, be prevented from offering discounts to Cardholders for cash purchases. Submerchant may not engage in a Transaction (other than a mail, internet, telephone order, or preauthorized sale to the extent permitted under this Agreement) if the person seeking to charge the purchase to his or her Card account does not present the Card to permit Submerchant to compare the signature on the Card to the signature on the Sales Draft and obtain an Imprint or otherwise use the physical Card to complete the Transaction.
Submerchant will prominently display the promotional materials provided by Servicer in its place(s) of business. Submerchant’s use of promotional materials and use of any trade name, trademark, service mark or logo type (“Marks”) associated with a Card is limited to informing the public that the Card will be accepted at Submerchant’s place(s) of business. Submerchant’s use of promotional materials and Marks is subject to the Servicer’s direction. Submerchant may use promotional materials and Marks only during the term of this Agreement and will immediately ease use and return any inventory to Servicer upon termination thereof. Submerchant may not use any promotional materials or Marks associated Visa, American Express, Discover, MasterCard and UnionPay in any way which suggests or implies that either endorses any goods or services other than payment Card services. Submerchant is required to display UnionPay service hotline at Submerchant’s place of business.
3.4 Card Acceptance.
When accepting a Card, Submerchant will follow the steps provided by Servicer 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 from the Card Issuer to charge the Cardholder’s account; (c) unless the Sales Draft is electronically generated or is the result of a mail, internet, phone or preauthorized order, (i) obtain an Imprint of the Card including embossed data from the merchant imprinter plate; and (ii) obtain the Cardholder’s signature on the Sales Draft and compare that signature to the signature on the Card; (d) enter a description of the goods or services sold and the price thereof (including any applicable taxes); (e) deliver a true and completed copy of the Sales Draft to the Cardholder at the time the goods are delivered or services performed, or, if the Sales Draft is prepared by a point-of-sale terminal, at the time of the sale; (f) offer the Sales Draft to Servicer for purchase according to Servicer’s procedures and the terms of this Agreement; and (g) make a Card Imprint, if the Transaction is not based upon a mail, internet, phone or pre-authorized order.
Submerchant will obtain an Authorization for all Card sales. If Submerchant cannot, for any reason, obtain an electronic Authorization through the use of a terminal, Submerchant will request a Voice Authorization from Servicer’s designated authorization center and will legibly print the authorization number on the Sales Draft. Submerchant will not obtain or attempt to obtain authorization from Servicer’s authorization center unless Submerchant intends to submit to Servicer a Transaction for the authorized amount if Authorization for the Transaction is given. Submerchant may not divide a single Transaction between two or more Sales Drafts on a single Card to avoid Authorization limits that may be set by the Card Issuer. The Submerchant shall not use Sales Drafts (paper or electronic), for purposes outside of the scope of the Submerchant Agreement, nor shall a third party not included in the agreement be allowed to use them. Submerchant acknowledges that an Authorization provides only that the Cardholder account has sufficient credit available to cover the amount of the current sale and that an Authorization is not a guarantee that the Transaction will not be subject to dispute or Chargeback and does not warranty the Cardholder’s identity. Submerchant may not attempt to obtain an authorization by successively decreasing the sale amount. Servicer may refuse to purchase or process any Sales Draft presented by Submerchant: (a) unless a proper authorization or approval code has been recorded on the Sales Draft; (b) if Servicer determines that the Sales Draft is or is likely to become uncollectible from the Cardholder to which the transaction would otherwise be charged; or (c) if Servicer has reason to believe that the Sales Draft was prepared in violation of any provision of this Agreement. Submerchant will use, and may not circumvent, fraud identification tools requested by Servicer, including Address Verification System processing and CVV2/CVC2/CID processing, and acknowledges that the use of these tools may prevent Submerchant from accepting certain Cards as payment. Submerchant acknowledges that its use of fraud identification tools may not prevent fraudulent Card usage, and agrees that any fraudulent Transaction may ultimately result in a Chargeback, for which Submerchant retains full liability under this Agreement.
3.6 Retention and Retrieval of Cards
Submerchant will use its best efforts, by reasonable and peaceful means, to retain or recover a Card when receiving such instructions when making a request for Authorization or if Submerchant has reasonable grounds to believe the Card is counterfeit, fraudulent or stolen. Submerchant’s obligations under this section does not authorize a breach of the peace or any injury to persons or property, and Submerchant will hold Servicer 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.
3.7 Multiple Transaction Records; Partial Consideration
Submerchant may not prepare more than one Sales Draft for a single sale or for a single item but will include all items of goods and services purchased in a single Transaction in the total amount on a single Sales Draft except under the following circumstances: (a) for purchases in separate departments of a multiple department store; (b) For partial payment, installment payment, delayed delivery or an advance deposit; or (c) for delayed or amended charges governed by rules for travel and entertainment merchants and Transactions.
3.8 Returns and Adjustments; Credit Vouchers.
Submerchant’s policy for the exchange or return of goods sold will be established and posted in accordance with operating regulations of the applicable Card Brand Rules. Submerchant will disclose, if applicable, to a Cardholder before a Card sale is made, that if merchandise is returned: (a) no refund, or less than a full refund, will be given; (b) returned merchandise will only be exchanged for similar merchandise of comparable value; (c) only a credit toward purchases will be given; or (d) special conditions or circumstances apply to the sale (e.g., late delivery, delivery charges, or other non-credit terms). If Submerchant does not make these disclosures, a full refund in the form of a credit to the Cardholder’s Card account must be given. Disclosures must be made on all copies of Sales Drafts or invoices in letters approximately 1/4″ high in close proximity to the space provided for the Cardholder’s signature or on an invoice issued at the time of the sale or on an invoice being presented for the Cardholder’s signature. Any change in Submerchant’s return or cancellation policy must be submitted in writing to Servicer not less than 14 days prior to the change. Servicer may refuse to process any Sales Draft made subject to a revised return or cancellation policy of which Servicer has not been notified as required herein.
3.9 Cash Payments
Submerchant may not receive any payments from a Cardholder for charges included in any Transaction resulting from the use of any 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.
3.10 Cash Advances; Scrip Purchases
Submerchant may not deposit any Transaction for the purpose of obtaining or providing a cash advance either on Submerchant’s Card or the Card of any other party and may not accept any Card at a scrip terminal, and either action will be grounds for Servicer’s immediate termination of this Agreement.
3.11 Duplicate Transactions.
Submerchant may not deposit duplicate Transactions. Servicer may debit Submerchant for any adjustments for duplicate Transactions and Submerchant is liable for any Chargebacks resulting therefrom.
3.12 Deposit of Fraudulent Transactions
Submerchant may 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 other than Transactions arising from bona fide purchases from Submerchant for the goods and services for which Submerchant has been approved under this Agreement. If Submerchant deposits any prohibited Transaction, Servicer may: (a) immediately terminate this Agreement; (b) withhold funds and demand an escrow as provided in this Agreement; (c) report Submerchant to Visa, American Express, Discover, MasterCard and UnionPay under Section 5.4. Submerchant’s employees’ actions are chargeable to Submerchant under this Agreement.
3.13 Submerchant Violations.
The following actions are prohibited for Submerchant: (i) alteration of the amount on transaction receipts, split transactions, cash out, acceptance of credit cards listed in the card recovery bulletin, excessive usage above the authorized limit, insufficient signature and expiry date checking, refund in cash, late presentment, submitting false transactions to Acquirer, obtaining extra credit from a Card Issuer by using transaction types of pre-authorization, purchase cancellation & purchase cancellation reversal, pre-authorization completion cancellation & pre-authorization completion cancellation reversal etc.
3.14 Collection of Pre-existing Debt.
Submerchant may not prepare and present to Servicer for purchase any Transaction representing the refinancing of an existing Cardholder obligation including, but not limited to, obligations: (a) previously owed to Submerchant; (b) arising from the dishonor of a Cardholder’s personal check or relating to a Chargeback; or (c) representing the collection of any other pre-existing indebtedness, including collection of delinquent accounts on behalf of third parties.
3.15 Data Security/Personal Cardholder Information.
Submerchant may not, as a condition of sale, 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 Submerchant has reason to believe the identity of the person presenting the Card may be different than that of the Cardholder. Submerchant will not, under any circumstances, release, sell or otherwise disclose any Cardholder Information to any person other than Servicer or the applicable Card Brand, except as expressly authorized in writing by the Cardholder, or as required by Applicable Law.
(a) Safeguards. Submerchant will maintain appropriate administrative, technical and physical safeguards for all Cardholder Information. These safeguards will (a) insure the confidentiality of Cardholder Information; (b) protect against any anticipated threats or hazards to the security or integrity of Cardholder Information; (c) protect against unauthorized access to or use of Cardholder Information that could result in substantial harm or inconvenience to any Cardholder; and (d) properly dispose of all Cardholder Information to ensure no unauthorized access to Cardholder Information. Submerchant will maintain all such safeguards applicable to Submerchant or Servicer in accordance with Applicable Law. Submerchants transacting in electronic commerce must: offer Cardholders secure transaction methods such as SSL or 3-D Secure; install and maintain network firewalls; regularly update security patches; restrict and track employee access to all data relating to Cardholders and Card transaction (“Data”); encrypt all stored Data sent over open networks; use only approved or validated payment software applications; establish policies for properly managing use and allocation of passwords; and consistently assess and revise security systems and processes.
(b) Compliance with Card Brand Rules. Submerchant represents, warrants and covenants that it is and will remain throughout the term of this Agreement in compliance with Card Brand Rules related to data security, data integrity and the safeguarding of Cardholder Information including the Payment Card Industry Data Security Standard (“PCI”) (https://www.pcisecuritystandards.org/security_standards/), Visa’s Customer Information Security Program (“CISP”) (http://usa.visa.com/merchants/risk_management/cisp.html), Discover’s Information Security and Compliance (DISC) program (http://www.discovernetwork.com/merchants/data-security/disc.html), MasterCard’s Site Data Protection Program (“SDP”) (http://www.mastercard.com/us/company/en/whatwedo/site_data_protection.html) and the American Express Data Security Requirements (“DSR”) (http://www.americanexpress.com/dsr) in effect, and Submerchant will cause all of its service providers, subcontractors and agents to comply with PCI, SDP, CISP, DSR and DISC requirements at all times. Submerchant will report any non-compliance immediately to Servicer. To accomplish the foregoing, Submerchant will encrypt all debit, credit or stored value card numbers whether in storage, transport or backup and will not store data security codes on its systems, network or software.
(c) Annual Certification. Submerchant will provide an annual certification to Servicer if requested by Servicer (in a form acceptable to Servicer) certifying compliance with the data security provisions of this Agreement, including compliance with applicable Card Brand Rules such as PCI, SDP, CISP, DSR and DISC. Submerchant will provide annual certifications for Submerchant’s service providers, subcontractors and agents.
(d) Information Use Limitations. Submerchant may not sell, disclose, or otherwise make Cardholder Information available, in whole or in part, in a manner not provided for in this Agreement, without Servicer’s prior written consent. Submerchant may, however, disclose Cardholder Information to its service providers, subcontractors and agents who have a need to know such information to provide the Services described in this Agreement, provided that those individuals or entities have assumed confidentiality obligations in accordance with this Agreement, or as may be required by legal process or Applicable Law and have entered into a written agreement with Submerchant containing Submerchant’s and such individuals’ or entities’ agreement to the foregoing data security provisions including compliance with Card Brand Rules.
(e) Response to Unauthorized Access. Submerchant will notify Servicer within 24 hours after it knows of any breach in security resulting in an unauthorized access to Cardholder Information. Submerchant will provide any assistance that Servicer, the issuing bank of any Cardholder, and their regulators and the Card Brands deem necessary to contain and control the incident to prevent further unauthorized access to or use of Cardholder Information. Such assistance may include, but not be limited to, allowing Servicer and Card Brands to use its risk information for normal business practices, preserving records and other evidence and compiling information to enable Servicer and the issuing bank(s) or the Card Brands to investigate the incident and provide assistance and cooperation to: (a) file suspicious activity reports (as applicable); (b) notify their regulators (as applicable); and (c) notify the affected Cardholder (as required). Unless the unauthorized access was due to Servicer’s acts or omissions, Submerchant will bear the cost of notifying affected Cardholder. Servicer has the right to immediately stop all transactions, enforce rectification and terminate the Submerchant Agreement immediately for cause if Submerchant trespasses the transaction security protocol or uses mPOS without Bank’s authorization
(f) Miscellaneous. Submerchant may not make a claim against Servicer or hold Servicer liable for the acts or omissions of other merchants, service providers, Card Brands, financial institutions or others that do not have a written contractual relationship with Servicer or over which Servicer has no control. These provisions supplement, augment and are in addition to obligations of indemnification, audit, confidentiality and other similar provisions contained in this Agreement. This Section 3.15 and each of its subsections will survive this Agreement’s termination. Submerchant may not store in any system or in any manner discretionary Card read data including without limitation CVV2/CVC2/CID data, PIN data, address verification data or any other information prohibited by Card Brand Rules. Submerchant agrees that Provider may disclose to any Card Brand information regarding Submerchant and Submerchant’s Transactions to any Card Brand, and that such Card Brand may use such information to perform its responsibilities in connection with its duties as a Card Brand, promote the Card Brand, perform analytics and create reports, and for any other lawful business purposes, including commercial marketing communications purposes within the parameters of Card Brand Card acceptance, and transactional or relationship communications from a Card Brand. A Card Brand may use the information about Submerchant obtained in this Agreement at the time of setup to screen and/or monitor Submerchant in connection with the Card Brand marketing and administrative purposes. Submerchant agrees it may receive messages from a Card Brand, including important information about Card Brand products, services, and resources available to its business. These messages may be sent to the mailing address, phone numbers, email addresses or fax numbers of Submerchant. Submerchant may be contacted at its wireless telephone number and the communications sent may include autodialed short message service (SMS or “text”) messages or automated or prerecorded calls. Submerchant agrees that it may be sent fax communications.
3.16 Compliance with Card Brand Rules.
Submerchant will comply with and conduct its Card activities in accordance with all applicable Card Brand Rules . Failure to comply with Card Brand Rules may result in Submerchant being terminated for cause and listed on various Card Brand and industry databases, including the Consortium Merchant Negative File (CMNF), the CTMF (Combined Terminated Merchant File) and the Merchant Alert to Control High Risk Merchants file (“MATCH”). Submerchant may not: (a) accept Cardholder payments for previous Card charges incurred at the Submerchant location; (b) establish a minimum or maximum transaction amount as a condition for honoring a Card; (c) require a Cardholder to complete a postcard or similar device that includes the Cardholder’s account number, card expiration date, signature, or any other card account data in plain view when mailed; (d) add any surcharge to transactions; (e) add any tax to transactions, unless Applicable Law expressly requires that Submerchant be permitted to impose a tax (any tax amount, if allowed, must be included in the transaction amount and not collected separately); (f) enter into interchange any transaction receipt for a transaction that was previously charged back to Servicer and subsequently returned to Submerchant, irrespective of Cardholder approval (Submerchant may pursue payment from the Cardholder outside the Card Brand system); (g) accept a card for an unlawful Internet gambling transaction; (h) request or use an account number of any purpose other than as payment for its goods or services; (i) disburse funds in the form of travelers cheques, if the sole purpose is to allow the Cardholder to make a cash purchase of goods or services from Submerchant; (j) disburse funds in the form of cash, unless: (i) Submerchant is a lodging or cruise line merchant disbursing cash to a Cardholder, (ii) Submerchant is dispensing funds in the form of travelers cheques, Cards, or foreign currency, or (iii) Submerchant is participating in the Card Brand cash back service; (k) accept a Card for the purchase or scrip; (l) accept a Card for manual cash disbursement; (m) accept a Card to collect or refinance existing debt that has been deemed uncollectible by the Submerchant providing the associated goods or services; (n) enter into a Transaction that represents collection of a dishonored check. Submerchant will pay all Card Brand fines, fees, penalties and all other assessments or indebtedness levied by Card Brands to Servicer which are attributable, at the Servicer’s discretion, to Submerchant’s Transaction processing or business or (o) charge a convenience fee which does not meet the criteria set by the Card Brand Rules.
3.17 Submerchant’s Business
(a) Submerchant will notify Servicer immediately if it intends to (a) transfer or sell any substantial part of its total assets, or liquidate; (b) change the basic nature of its business, including selling any products or services not related to its current business; (c) change ownership or transfer control of its business; (d) 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 Submerchant’s business; (e) alter in any way Submerchant’s approved monthly volume, average, or maximum ticket; (f) changes its return policies or to another fulfillment house different from those identified in Merchant Application; or (g) changes to its Account. Submerchant will notify Servicer promptly in writing if it becomes subject to any voluntary or involuntary bankruptcy or insolvency petition or proceeding. Submerchant’s failure to provide notice as required above may be deemed a material breach and will be sufficient grounds for termination of Submerchant and for Servicer’s exercise of all its rights and remedies provided by this Agreement. If any change listed above occurs, Servicer may immediately terminate this Agreement.
(b) Before Submerchant engages any Service Provider, Submerchant must provide to Payment Facilitator in writing (a) the Service Provider’s legal name, (b) contact information, and (c) intended function. Submerchant covenants that it will not use, allow the use of, or provide to any Service Provider access to any Cardholder data or Payment Facilitator systems or software until Submerchant receives Payment Facilitator approval and, if required, confirmation of registration of that Service Provider with applicable Card Brands. Submerchant must ensure that its Service Providers: (i) comply with the registration process which can involve site inspections, background investigations, provision of financial statements, and any other information required by a Card Brand in accordance with Section 6.17; and (ii) comply with the periodic and other reporting required by a Card Brand. Submerchant may allow Service Providers access to Cardholder data only for purposes authorized under and in conformance with the Card Brand Rules and Applicable Law. Submerchant is responsible for all costs and expenses associated with review, approval, certification (and recertification as may be required by the Card Brand Rules) and registration of any Service Providers.
(c) Submerchant shall at all times cooperate with Payment Facilitator and Bank and provide such parties with all necessary information and assistance required or requested by them to provide the services in accordance with this Agreement and maintain compliance with the Card Brand Rules and Applicable Law.
3.18 Submerchant’s Warranties
Submerchant represents and covenants that: (a) all information contained in the Merchant Application or any other documents delivered to Servicer in connection therewith is true and complete and properly reflects Submerchant’s business, financial condition and principal partners, owners or officers; (b) Submerchant has power to execute, deliver and perform this Agreement, and this Agreement is duly authorized, and will not violate any provisions of Applicable Law, or conflict with any other agreement to which Submerchant is subject; (c) Submerchant holds 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 Submerchant’s knowledge, threatened by or against or affecting Submerchant 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 Servicer for collection is genuine and is not the result of any fraudulent or prohibited Transaction or is not being deposited on behalf of any business other than Submerchant as authorized by this Agreement; (f) each Sales Draft is the result of a bona fide Card Transaction for the purchase of goods or services from Submerchant by the Cardholder in the total amount stated on the Sales Draft; (g) Submerchant has performed or will perform all of its obligations to the Cardholder in connection with the Card Transaction evidenced thereby; (h) Submerchant has complied with Servicer’s procedures for accepting Cards, and the Card Transaction itself does not involve any element of credit for any other purposes other than as set forth in this Agreement, and is not subject to any defense, dispute, offset or counterclaim which may be raised by any Cardholder under the Card Brands’ rules, the Consumer Credit Protection Act (15 USC §1601) or other relevant state or federal statutes or regulations; and (i) any Credit Voucher which it issues represents a bona fide refund or adjustment on a Card sale by Submerchant with respect to which a Sales Draft has been accepted by Servicer.
ARTICLE IV – PRESENTMENT, PAYMENT, CHARGEBACK
Servicer will accept from Submerchant all Sales Drafts deposited by Submerchant under the terms of this Agreement and will present the same to the appropriate Card Issuers for collection against Cardholder accounts. Submerchant must transmit Sales Drafts and Credit Vouchers to Servicer or its processing vendor on the same or next business day immediately following the day that such Sales Drafts and Credit Vouchers have been originated. All presentment and assignment of Sales Drafts, collection therefor and reassignment or rejection of such Sales Drafts are subject to the terms of this Agreement and regulations of the Card Brand. Servicer will only provisionally credit the value of collected Sales Drafts to Submerchant’s Account and reserves the right to adjust amounts collected to reflect the value of Chargebacks (actual and anticipated), fees, penalties, late submission charges, reserve deposits, negative Sales Draft batch deposits and items for which Servicer did not receive final payment.
By presenting Sales Drafts to Servicer for collection and payment, Submerchant agrees to sell and assign all its right, title and interest in each Sales Draft completed in conformity with Servicer’s acceptance procedures and constitutes an endorsement by Submerchant to Servicer of such Sales Drafts. Servicer may supply such endorsement on Submerchant’s behalf.
4.3 Prohibited Payments.
Servicer may receive payment of any Sales Draft presented by Submerchant and paid by Servicer unless and until there is a Chargeback. Unless specifically unauthorized in writing by Servicer, Submerchant may not collect or attempt to collect any Sales Draft, including Chargebacks, and will hold in trust for Servicer and promptly deliver in kind to Servicer any payment Submerchant 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 payment.
Submerchant will accept for chargeback any sale for which the Cardholder disputes the validity of the sale according to prevailing Card Brand regulations, or a Card Issuer or Servicer determines that Submerchant has in any way failed to comply with Card Brand regulations or Servicer’s procedures in accepting a Card and presenting the resulting Sales Draft to Servicer for purchase. Section 3.3 notwithstanding, Servicer may charge back the amount of a Card sale for which the Cardholder disputes that authorizing the charge if Submerchant failed to obtain the Card Imprint or the Cardholder’s signature. Submerchant may not initiate a sale Transaction in an attempt to collect a Chargeback. Submerchant will pay the current published fees for each Chargeback as listed on Schedule A of the Merchant Application, as amended from time to time, or as otherwise mutually agreed to by Payment Facilitator and Submerchant.
4.5 Reserve Account.
Notwithstanding anything to the contrary in this Agreement, Servicer may establish (without notice to Submerchant) and Submerchant agrees to fund a non-interest bearing reserve account (the “Reserve Account”), or demand other security or raise any discount, transaction or other fees. This account may be established at any time or for any reason. Specific examples might include: (a) Submerchant engages in any charge processing that creates an overcharge to a Cardholder by duplicating charges; (b) any activity designed by Submerchant to circumvent a “call center” message when attempting to process a transaction; (c) Submerchant breaches this Agreement, violates any representation, covenant or warranty herein, violates any applicable Card Brand Rules or Applicable Law; (d) Submerchant’s application is in any way inaccurate or becomes inaccurate subsequent to Servicer’s approval of the application; (e) Submerchant changes its type of business without Servicer’s prior written approval; (f) fraud, Submerchant processes an unauthorized charge, or other action that violates Servicer’s applicable risk management standards or is likely to cause a loss; (g) Submerchant has chargebacks exceeding 1% of the total number of transactions completed by Submerchant in any 30 calendar day period; (h) excessive numbers of requests from consumers or issuing Servicers to retrieve documentation; (i) Submerchant’s financial stability is in question or Submerchant ceases doing business; or (j) Submerchant terminates this Agreement. Once the Reserve Account is established, collected funds will be placed in the Reserve Account. Before releasing funds after this Agreement is terminated, Submerchant will pay any equipment cancellation fees and any outstanding charges, losses or amounts, and Chargebacks for which Submerchant has provided indemnification under this Agreement. Further, Servicer may require Submerchant to deposit additional amounts based upon Submerchant’s processing history and/or anticipated risk of loss to Servicer into the Reserve Account. Once established, unless Servicer determines otherwise at its sole discretion, the Reserve Account will remain in place for 180 days and a reasonable period thereafter during which Cardholder disputes may remain valid under applicable Card Brand Rules. The provisions of this Agreement relating to account debits and credits apply to the Reserve Account and survive this Agreement’s termination until Servicer terminates the Reserve Account. Any balance remaining after chargeback rights have expired and all of Servicer’s other expenses, losses and damages have been paid will be disbursed to Submerchant.
ARTICLE V – TERMINATION AND EFFECT OF TERMINATION
This Agreement will be effective once Servicer accepts it, and unless otherwise terminated in accordance with Section 5.2 below, will continue on a month-to-month basis unless Submerchant provides written notice of non-renewal at least 15 days before the end of the then-current monthly term.
(a) Without Cause. Servicer may terminate this Agreement, without cause, upon 30 days advance written notice to Submerchant. Submerchant may terminate, without prior notice, this Agreement in the three (3) days period following Servicer’s acceptation (the “Cooling Off Period”).
(b) For Cause. Servicer may terminate this Agreement in its sole discretion, effective immediately, upon written or verbal notice, or by closing Submerchant’s point-of-sale terminal, if Servicer reasonably determines that any of the following conditions exists: (i) Submerchant has violated any provision of this Agreement; (ii) there is a material adverse change in Submerchant’s financial condition; (iii) if any case or proceeding is commenced by or against Submerchant under any federal or state law dealing with insolvency, bankruptcy, receivership or other debt relief; (iv) any information which Submerchant provided to Servicer, including Application Form information, was false, incomplete or misleading when received; (v) at any time during the term of this Agreement, Submerchant has had a monthly ratio of Chargebacks to total transactions exceeding Card Brand requirements or 1%, or Chargebacks exceed 3% of any monthly dollar amount of total transactions; (vi) an overdraft in the Account exists for more than three days; (vii) Submerchant or any of Submerchant’s officers or employees has been involved in processing transactions arising from fraudulent or otherwise unauthorized transactions;(viii) Submerchant is or will be unable or unwilling to perform its obligations under this Agreement or Applicable Law; (ix) Submerchant has failed to timely pay Servicer any amount due; (x) Submerchant has failed to promptly perform or discharge any obligation under its Account or the Reserve Account; (xi) any of Submerchant’s representations or warranties made in connection with this Agreement was not true or accurate when given; (xii) Submerchant has defaulted on any agreement it has with the Servicer; (xiii) Servicer is served with legal process seeking to attach or garnish any of Submerchant’s funds or property in Servicer’s possession, and Submerchant does not satisfy or appeal the legal process within 15 days of such service; (xiv) any Card Brand Rules are amended in any way so that the continued existence of this Agreement would cause Servicer to be in breach of those rules; (xv) any guaranty supporting Submerchant’s obligations is revoked, withdrawn, terminated or altered in any way; (xvi) if any circumstances arise regarding Submerchant or its business that create harm or loss of goodwill to any Card Brand; (xvii) termination is necessary to prevent loss to Servicer or Card Issuers; (xviii) Submerchant’s type of business indicated on the Application Form or as conducted by Submerchant could endanger the Servicer’s safety or soundness; (xix) Submerchant’s owner, officer, guarantor, or corporate entity has a separate relation- ship with the Servicer and that relationship is terminated, (xx) Submerchant appears on any Card Brand’s security reporting; or (xxi) Servicer’s security for repayment becomes impaired, (xxii) failure to comply with the Servicer’s requirements repeatedly and refusal to remedy any violations; (xxiii) Submerchant delays the response to inquiries or the fulfillment of retrieval requests deliberately or without good reason; or (xxiv) Submerchant incurs an increased risk due to other activities of the Submerchant.
5.3 Effect of Bankruptcy.
Any account or security held by Servicer will not be subject to any preference, claim or stay by reason of bankruptcy or similar law. The parties expressly agree that the acquisition of Card Transactions hereunder is a financial accommodation and if Submerchant becomes a debtor in any bankruptcy or similar proceeding, this Agreement may not be assumed or enforced by any other person and Servicer will be excused from performance hereunder.
5.4 Effect of Termination.
When termination becomes effective, the parties’ rights and obligations existing under this Agreement survive. If this Agreement is terminated, regardless of cause, Servicer may withhold and discontinue the disbursement for all Cards and other Submerchant Transactions in the process of being collected and deposited. If Submerchant is terminated for cause, Submerchant acknowledges that Servicer may be required to report Submerchant’s business name and the names and other identification of its principals to the MATCH file maintained by Visa, MasterCard American Express and/or the CMNF file maintained by Discover. Submerchant expressly agrees and consents to such reporting if Submerchant is terminated for any reason requiring listing on the MATCH file or CMNF. Submerchant waives and will hold harmless Servicer from any claims that Submerchant may raise as a result of Servicer’s MATCH file reporting, or Discover’s CMNF reporting. Submerchant will also immediately cease requesting Authorizations. If Submerchant obtains any Authorization after termination, the fact that any Authorization was requested or obtained will not reinstate this Agreement. Further, Submerchant will return all Servicer property, forms, or equipment. All obligations for Transactions prior to termination (including payment for Chargebacks and Servicer’s expenses relating to Chargebacks) survive termination. Servicer is not liable to Submerchant for damages (including prospective sales or profits) due to termination. Following termination, Submerchant will upon request provide Servicer with all original and electronic copies of Sales Drafts and Credit Vouchers that have been retained by Submerchant as of the date of termination. Upon termination, any amounts due to Servicer will accelerate and be immediately due and payable, without any notice, declaration or other act whatsoever by Servicer. Servicer shall terminate the acceptance of Cards by Submerchant upon the termination of the Submerchant Agreement.
ARTICLE VI – MISCELLANEOUS
6.1 Account Monitoring
Submerchant acknowledges that Servicer will monitor Submerchant’s daily deposit activity. Servicer may upon reasonable grounds suspend disbursement of Submerchant’s funds for any reasonable period of time required to investigate suspicious or unusual deposit activity. Servicer will make good faith efforts to notify Submerchant promptly following suspension. Servicer is not liable to Submerchant for any loss, either direct or indirect, which Submerchant may attribute to any suspension of funds disbursement.
Submerchant will use only the forms or modes of transmission of Sales Drafts and Credit Vouchers that are provided or approved in advance by Servicer, and Submerchant may not use such forms other than in connection with card transactions.
Submerchant will defend, indemnify and hold Servicer and its officers, directors, members, shareholders, partners, employees, agents, subcontractors and representatives harmless from and against any and all fines, penalties, claims, dam- ages, expenses, liabilities or fees of any nature whatsoever, including attorneys’ fees and costs (“Damages”), asserted against or incurred by Servicer arising out of, relating to or resulting from, either directly or indirectly: (a) a breach of the security of the system safeguarding Cardholder Information resulting in unauthorized access to Cardholder Information; (b) a breach of any representation, warranty or term of this Agreement, including, but not limited to, the data security provisions by Submerchant, or any service provider, subcontractor or agent of Submerchant; (c) the negligence, or willful misconduct of Submerchant in the performance of its obligations under this Agreement, including, but not limited to, the data security provisions; (d) any violation of Applicable Law and Card Brand Rules by Submerchant; and (e) all third party claims arising from the foregoing. Notwithstanding the preceding, Submerchant is not liable to Servicer if Damages are caused by, related to or arise out of Servicer’s negligence, or willful misconduct, or Servicer’s breach of this Agreement. Submerchant will promptly reimburse Servicer for any assessments, fines, fees or penalties imposed by the Card Brand in connection with this Agreement, including the data security provisions, and authorizes Servicer to deduct any such sums from amounts to be cleared and settled with Submerchant.
In addition to any records Submerchant routinely furnishes to Servicer under this Agreement, Submerchant will preserve a copy of actual paper Sales Drafts and Credit Vouchers and any written authorization of the Cardholder for at least two years after the date Submerchant presents the Transaction to Servicer. Submerchant shall bear financial losses incurred due to inappropriate retention or loss of transaction receipts.
6.5 Requests for Copies.
Immediately after Submerchant receives the request by Servicer, Submerchant will provide to Servicer either the original or a legible copy (in a size comparable to the actual Sales Draft) of the paper Sales Draft and any other documentary evidence available to Submerchant that Servicer reasonably requests to meet Servicer’s obligations under law (including its obligations under the Fair Credit Billing Act) or otherwise to respond to questions concerning Cardholder accounts.
6.6 Compliance with Law.
Submerchant will comply with all laws applicable to Submerchant, Submerchant’s business and any Card Transaction, including without limitation all state and federal consumer credit and consumer protection statutes and regulations.
6.7 Fees and Charges.
Submerchant will pay to Servicer the fees and charges set forth in Schedule A, as amended from time to time, or as otherwise mutually agreed to by Payment Facilitator and Submerchant, including any additional charges applied to Transactions that fail to meet Card Brand Rules for the lowest interchange levels. “Cost Plus Surcharge”, as appears in Schedule A, is calculated by adding: (i) the interchange fee; plus (ii) applicable surcharge fees; plus (iii) up to 100 basis points for Card Transactions and 100 basis points for debit/check Card Transactions (as the case may be); plus (iv) access fees, dues and assessments as determined by Servicer.
Where applicable, Submerchant shall also pay the following fees: Voice/ARU Authorization: $0.95 per authorization request; ACH Modifications: $25.00 per event; ACH Return: $25 per return; Operator Assisted Voice Auth.: $2.95 per call; Dispute Resolution Fee: $25; Third Party Helpdesk Calls: $5.00 per call; Unsupported Terminals: $20 per call. Security/Compliance Fee: $139.80 annually, if applicable; Handling Fee: $69 for accounts approved yet inactivated. A monthly minimum of $25 may apply. Pass-through Brand fees include Visa Acquirer Processing fee, Visa Misuse of Auth. fee, Visa International Service Assessment (ISA), Visa Zero Floor Limit fee, Visa International Acquirer fee, MC Acquirer Program Support fee, MC Cross Border fee, and the MC Network Access and Brand Usage (NABU) fee. Account will be debited through ACH or withheld from daily payments to Submerchant for such amounts and for any other fees, charges or adjustments incurred or owed by Submerchant hereunder. Upon 30 days written notice to Submerchant, Servicer may change fees, including adding fees for additional services utilized by Submerchant and/or increasing fees for any adverse change to Submerchant’s risk profile, as reasonably determined by Servicer.
With respect to American Express, in addition to those fees set forth in Schedule A, Submerchant shall pay the following fees where applicable: Technical Specifications of Non-Compliance Fee: 0.75% of the face amount of the Charge; Data Quality Fee: 0.75% of the face amount of the Charge. Data Incident Non-Compliance Fee: refer to DSOP for applicable amounts; Data Security Non-Validation Fee: refer to DSOP for applicable amounts; Existing AXP Merchant Access Fee: 0.3% of the face amount of the Charge; Amex Inbound Fee: 0.40% of the face amount of the Charge; Non-swiped Application-initiated Transaction Fee: 0.30% of the face amount of each non-swiped Charge.
American Express may assess a Data Pass Violation Fee from Submerchant as follows: (i) where charge volume is less than $1,000,000, a fee of $2,500 and warning specifying date of correction shall apply to the first violation and a fee of $5,000 and final notice shall apply to the second violation; (ii) where charge volume is between $1,000,000 and $10,000,000, a fee of $5,000 and warning specifying date of correction shall apply to the first violation and a fee of $10,000 and final notice shall apply to the second violation and; (iii) where charge volume is above $10,000,000, a fee of $25,000 and warning specifying date of correction shall apply to the first violation and a fee of $50,000 and final notice shall apply to the second violation.
American Express may also assess an Excessive Dispute Fee as follows: $5 per dispute charge if the merchant is enrolled in the Immediate Chargeback Program or $15 per disputed Charge if the Submerchant is not enrolled in the Immediate Chargeback Program.
6.8 Security Interest.
To secure payment of Submerchant’s obligations under this Agreement, Submerchant grants to Servicer a security interest in all now existing or hereafter acquired: (a) Transactions, Sales Drafts, Credit Vouchers and other items submitted to Servicer for processing by or for Submerchant; (b) accounts receivable and payment rights relating to or arising from this Agreement, including all amounts due Submerchant (including any rights to receive credits or payments hereunder); (c) accounts including without limitation all deposit accounts maintained with the Servicer or any institution other than Servicer, including the Reserve Account, in the name of or for the benefit of, Submerchant or any guarantor of Submerchant’s obligations under this Agreement; (d) deposits, regardless of source, to Submerchant’s or any guarantor’s accounts with Servicer or any institution other than Servicer, including the Reserve Account; (e) all deposits and all other property and funds deposited by Submerchant or withheld by Servicer, including funds and property withheld as the result of security monitoring; and (f) proceeds of the foregoing. If Servicer reasonably determines that Submerchant has breached any obligation under this Agreement, or that proceeds of Submerchant’s future card sales are unlikely to cover anticipated Chargebacks, credits, fees and adjustments, as reasonably determined by Servicer (whether because this Agreement has been terminated or for any other reason), Servicer may setoff or otherwise exercise its security interest without notice or demand by immediately withdrawing from or freezing any account or otherwise exercising its rights under this Agreement or those rights available under Applicable Law, or in equity. In addition to the collateral pledged above, Servicer may require Submerchant to furnish such other and different security as Servicer deems appropriate in its sole discretion to secure Submerchant’s obligations under this Agreement. Servicer may fully or partially prohibit withdrawal by Submerchant of funds from Submerchant’s deposit accounts maintained with Servicer or financial institutions other than Servicer, pending Servicer’s determination from time to time to exercise its rights as a secured party against such accounts in partial or full payment of Submerchant’s obligations to Servicer. Submerchant will execute any documents and take any actions required to comply with and perfect any security interest under this paragraph, at Submerchant’s cost. Submerchant represents and warrants that no other party has a security interest or lien in any of the collateral pledged above, and Submerchant will obtain Servicer’s written consent before it grants a lien or security interest in that pledged collateral to any other person. Submerchant shall not assign to any third party any payments due to it under this Agreement, and all indebtedness arising from Transactions will be for bona fide sales of goods and services (or both) at its business locations and free of liens, claims, and encumbrances other than ordinary sales taxes; provided, however, that Submerchant may sell and assign future Transaction receivables to Servicer, its affiliated entities and/or any other cash advance funding source that partners with Servicer or its affiliated entities, without consent from any Card Brand. Notwithstanding the foregoing, Servicer prohibits Submerchant from selling or assigning future Transaction receivables to any third party without Servicer’s prior written consent.
6.9 Modifications to Agreement
This Agreement is subject to amendment to conform with Card Brand regulations, as amended from time to time. From time to time Servicer may amend any provision or provisions of this Agreement, including, without limitation, those relating to the discount rate or to other fees and charges payable by Submerchant by sending written notice to Submerchant of the amendment prior to the effective date of the amendment, and the amendment will become effective unless Servicer receives Submerchant’s notice of written termination of this Agreement before such effective date. Amendments required due to changes in either Card Brand’s rules and regulations or any law or judicial decision may become effective on such shorter period of time as Servicer may specify if necessary to comply with the applicable rule, regulation, law or decision. The term of this Agreement shall be automatically extended an additional three years in the event of a price decrease or the introduction of a new product or service used by Submerchant (including any equipment upgrade), effective as of the date such price change is implemented or new product-service accepted by Submerchant.
6.10 Warranty Disclaimer.
SERVICER MAKES NO WARRANTIES REGARDING THE USE, OPERATION OR PERFORMANCE OR NON- PERFORMANCE OF SOFTWARE AND SYSTEMS UTILIZED FOR THIS AGREEMENT, WHETHER EXPRESS OR IMPLIED, AND SERVICER EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
6.11 Limitation of Liability
Servicer’s liability with respect to any Card Transaction may not exceed the amount of the Sales Draft in connection with the Transaction, less any applicable fees and charges. Servicer is not liable at all for any incidental or consequential damages whatsoever. Submerchant waives all claims against Servicer for any loss, claim, demand, penalty, action, delay, cost or expense (including reasonable attorneys’ fees) of any kind unless Submerchant provides written notice to Servicer of the occurrence that gave rise to the alleged liability within 30 days after Submerchant knew or should have known of the occurrence. In addition to what is provided herein, Servicer’s cumulative liability towards Submerchant for any reason whatsoever shall not exceed the amount of fees received by Servicer pursuant to this Agreement, for services performed in the immediately preceding six (6) months.
Submerchant will indemnify and hold Servicer harmless from any claim relating to any Sales Draft paid for by Servicer as may be made by anyone by way of defense, dispute, offset, counterclaim or affirmative action, or for any damages of or losses that Servicer may incur as a result of Submerchant’s breach of this Agreement. Further, Submerchant will reimburse Servicer for all expenses and costs, including attorneys’ fees, with regard thereto.
Servicer’s failure by Servicer to enforce one or more of the provisions of this Agreement will not constitute a waiver of the right to enforce the same or other provision in the future.
6.13 Written Notices.
All written notices and other written communications required or permitted under this Agreement will be deemed delivered immediately when hand-delivered or sent via facsimile or email and the sender obtains a fax or email confirmation receipt, and upon mailing when sent first class mail, postage prepaid, addressed as follows:
(a) If to Servicer: Democracy Engine, LLC, 237 Florida Avenue NW, Washington, DC, 20001, Facsimile: 240-238-9117;
(b) If to Submerchant: At the facsimile number, email address or address provided as the billing address, and to the contact listed on the Submerchant Application.
A written notice shall also be deemed sent and received if notification is given to the Submerchant: (i) through any technological platform offered by Servicer and used by Submerchant to access its account; or (ii) by way of Submerchant billing statement, whether such billing statement is sent via a technological platform or mail.
6.14 Choice of Law; Jurisdiction.
This Agreement shall be governed exclusively by Delaware law, without regard to its choice of law provisions. Submerchant agrees that any legal action or proceeding arising out of or relating to the relationship between Servicer and Submerchant shall be instituted solely in the state or federal courts of the State of Delaware and hereby submits to the jurisdiction of such courts in any such action or proceeding. Submerchant hereby waives releases and agrees not to assert any rights it may have under any foreign law or regulation that would be inconsistent with the terms of this Agreement as governed by Delaware law. Submerchant also waives its right to a trial by jury of any disputes arising from its relationship with Servicer.
6.15 Entire Agreement; Assignability.
This Agreement expresses the entire understanding of the parties with respect to the subject matter hereof and except as provided herein, may be modified only in writing executed by Servicer and Submerchant.
This Agreement may not be assigned by Submerchant, directly or by operation of law, without Servicer’s prior written consent. Servicer may assign this Agreement, without notice to Submerchant. This Agreement will be binding upon and inure to the benefit of the parties’ respective heirs, personal representatives, successors and assigns.
6.16 Settlement; Deposit Account.
(a) Submerchant Settlement. As between Payment Facilitator and Bank, Payment Facilitator is solely responsible for remitting funds to Submerchant. Submerchant’s funds will be processed and transferred to the Account after Payment Facilitator receives funds for such transactions from Bank. Submerchant acknowledges and agrees that any provisional credits made to the Account are subject to Chargebacks and fees. Payment Facilitator is hereby authorized by Submerchant to charge the amount of daily Chargebacks and fees (i) against each day’s Transactions (ii) against the Reserve Account; or (iii) by making an ACH debit against Submerchant’s Account.
(b) Submerchant will at all times maintain an Account at a bank that is a member of the Federal Reserve ACH system. All credits for collected funds and debits for fees, payments and Chargebacks and other amounts for which Submerchant is liable under the terms of this Agreement will be made to the Account. Submerchant may not close or change the Account without written notice to Servicer. Submerchant will be solely liable for all fees and costs associated with the Account and for all overdrafts. Submerchant hereby grants to Servicer a security interest in the Account to the extent of any and all fees, payments and Chargebacks and other amounts due which may arise under this Agreement, and Submerchant will execute any document and obtain any consents or waivers from the bank at which the Account is maintained as requested by Servicer to protect its security interests therein.
6.17 Credit and Financial Inquiries; Additional Locations; Inspections.
Servicer may make, at any time, any credit inquires which it may consider necessary to accept or review acceptance of this Agreement or investigate Submerchant’s deposit or Card acceptance activities subsequent to acceptance of this Agreement. Such inquiries may include, but are not limited to, a credit and/or criminal check of the business including its proprietor, partners, principal owners or shareholders or officers. Upon Servicer’s request, Submerchant will 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 Servicer may consider necessary to perform initial or periodic reviews of Submerchant’s financial stability and business practices. Submerchant may accept Cards only at locations approved by Servicer. Additional locations may be added, subject to Servicer’s approval. Any party to this Agreement may delete any location by providing notice as provided herein. Submerchant will permit Servicer, at any time and from time to time, to inspect locations to confirm that Submerchant has or is adhering to the terms of this Agreement and is maintaining the proper facilities, equipment inventory, records and license or permit (where necessary) to conduct its business. However, nothing in this paragraph may be deemed to waive Submerchant’s obligation to comply in all respects with the terms of this Agreement. Servicer, its internal and external auditors, and its regulators may audit compliance with this Agreement, compliance with Applicable Law in connection with the services, Card acceptance and Transaction processing, and data security provisions, including Card Brand compliance. Submerchant will make available its records maintained and produced under this Agreement, and Submerchant’s facilities will be made accessible, upon notice during normal business hours for examination and audit. Nothing in this section may be construed to require Submerchant to give access to its facilities, personnel or records in a manner that unreasonably interferes with its business operations. Each party will bear its expenses of any audit.
6.18 Marketing of Payment Card Servicer
From time to time, Servicer may offer to Submerchant certain additional products and services which may or may not be related to the processing of credit card Transactions. If such offers are made, Submerchant may decline the offers or be deemed to have accepted the offers and be liable for payment therefor.
6.19 Force Majeure
The parties will be released from liability hereunder if they fail to perform any obligation where the failure occurs by reason of any act of God, fire, flood, storm, earthquake, tidal wave, communications failure, sabotage, war, military operation, terrorism, national emergency, mechanical or electronic breakdown, civil commotion or the order, requisition, request or recommendation of any governmental authority, or either party’s compliance therewith, or governmental regulation or priority, or any other similar cause beyond either party’s reasonable control.
6.20 No Third Party Beneficiary.
No other person or entity may be deemed to be a third party beneficiary of this Agreement.
In the event of any inconsistency between the terms of this Agreement and the Merchant Application, the provisions of the Merchant Application shall prevail.
PART TWO: ADDITIONAL TERMS AND CONDITIONS APPLICABLE ONLY TO SUBMERCHANTS WITH
AMERICAN EXPRESS CARD ACCEPTANCE
B1.1. Submerchant shall be bound by the American Express Merchant Operating Guide: www.americanexpress.com/merchantopguide.
B1.2 With respect to participation in an American Express acceptance program, in the event of a conflict between the terms below and other terms of this Agreement, the terms below shall control.
B1.3 General Terms. Submerchant authorizes Payment Facilitator and/or its affiliates to submit American Express Transactions to, and receive settlement on such Transactions from, American Express or Servicer on behalf of Submerchant.
B1.4 Marketing Message Opt-Out. Submerchant may opt-out of receiving future commercial marketing communications from American Express by contacting Payment Facilitator. Note that Submerchant may continue to receive marketing communications while American Express updates its records to reflect this choice. Opting out of commercial marketing communications will not preclude Submerchant from receiving important transactional or relationship messages from American Express.
B1.5 Conversion to American Express Direct Submerchant. Submerchant acknowledges that it may be converted from American Express Card OptBlue program to a direct relationship with American Express if and when its Transaction volumes exceed the eligibility thresholds for the OptBlue program. If this occurs, upon such conversion, (i) Submerchant will be bound by American Express’ then-current Card Acceptance Agreement; and (ii) American Express will set pricing and other fees payable by Submerchant.
B1.6 American Express as Third Party Beneficiary. Notwithstanding anything in the Agreement to the contrary, American Express shall have third-party beneficiary rights, but not obligations, to the terms of this Agreement applicable to American Express Card acceptance to enforce such terms against Submerchant.
B1.7 American Express Opt-Out. Submerchant may opt out of accepting American Express at any time without directly or indirectly affecting its rights to accept Cards bearing Marks of other Card Brands.
B1.8 Refund Policies. Submerchant’s refund policies for American Express purchases must be at least as favorable as its refund policy for purchase on any other Card Brand, and the refund policy must be disclosed to Cardholders at the time of purchase and in compliance with Law. Submerchant may not bill or attempt to collect from any Cardholder for any American Express Transaction unless a Chargeback has been exercised, Submerchant has fully paid for such Chargeback, and it otherwise has the right to do so.
B1.9 Establishment Closing. If Submerchant closes any of its Establishments, Submerchant must follow these guidelines: (i) notify Payment Facilitator immediately; (ii) policies must be conveyed to the Cardholder prior to completion of the Transaction and printed on the copy of a receipt or Transaction record the Cardholder signs; (iii) if not providing refunds or exchanges, post notices indicating that all sales are final (e.g., at the front doors, by the cash registers, on the Transaction record and on websites and catalogs); (iv) return and cancellation policies must be clearly disclosed at the time of sale; and (v) for Advance Payment Charges or Delayed Delivery Charges, Submerchant must either deliver the goods or services for which Submerchant has already charged the Cardholder or issue credit for any portion of the Transaction for which Submerchant has not delivered the goods or services.
PART THREE: ADDITIONAL TERMS AND CONDITIONS APPLICABLE ONLY TO SUBMERCHANTS WITH UNIONPAY CARD ACCEPTANCE. IN CASE OF CONFLICT OR INCONSISTENCY BETWEEN PART THREE AND OTHER PARTS OF THIS AGREEMENT, PART THREE SHALL PREVAIL.
C1.1 Submerchant undertakes to prominently display the UnionPay acceptance logos at their premises where Card transactions take place.
C1.2 Submerchant agrees to accept all valid UnionPay-branded Cards.
C1.3 Except as permitted by the local regulator or UnionPay and unless an additional surcharge has already been imposed on other Card Brands, the Submerchant shall undertake not to impose an additional surcharge on a UnionPay Cardholder; and shall accept UnionPay Cards at the same price and terms as cash.
C1.4 The Submerchant shall not retain account numbers, PIN and other UnionPay Card transaction data and shall keep confidential all UnionPay Card information. Submerchant shall not provide account information or transaction data to a third party other than Servicer or an institution designated by Servicer.
C1.5 The Submerchant undertakes to be responsible for the storage and maintenance of payment terminals.
C1.6 If Submerchant only accepts UnionPay Cards and does not accept any other Card Brand, then Bank shall not be a party to and shall not be bound by any provisions of this Agreement. Payment Facilitator shall assume all rights and obligations of Bank herein and Bank shall have no liability to Submerchant whatsoever. Submerchant waives any and all rights it may have against Bank.
THE FOLLOWING SERVICES ARE PROVIDED BY PAYMENT FACILITATOR ONLY.
PART FOUR: ADDITIONAL SERVICES AGREEMENT
E-COMMERCE / GATEWAY
D1.1 Services. Payment Facilitator will provide the transactional gateway services and related goods and services (the “Gateway Services”) to Submerchant as set forth in Schedule A of the Application Form. Payment Facilitator and Submerchant shall agree upon the equipment and services to initially be provided under this Agreement and may update and change the goods and services provided to Submerchant by mutual consent.
D1.2 Limited License. Payment Facilitator hereby grants to Submerchant a limited, revocable, worldwide, non-exclusive, non sub-licensable and non-transferable license under intellectual property rights owned or licensed by Payment Facilitator, to use Gateway Services, provided however that:
(a) such license is subject to all obligations and restrictions imposed on Submerchant in this Agreement;
(b) such license extends only to Submerchant’s employees and contractors, but only to the extent that such employees and contractors use the Gateway Services for the sole purpose of collecting payments on behalf of Submerchant, and for no other purpose whatsoever;
(c) such license extends only to Submerchant’s use of Gateway Services solely to perform the functions specified herein and in compliance therewith, and
(d) while exercising such license, Submerchant shall treat the Gateway Services as Payment Facilitator’s Confidential Information under this Agreement.
D1.3 Limitations on Rights Granted. Except as expressly provided to the contrary in this Agreement, Submerchant shall not, and shall not knowingly cause or permit any third party to use or reproduce Gateway Services. Submerchant shall not, and shall not knowingly cause or permit any third party to disassemble, decompile, decrypt, extract, reverse engineer, or prepare a derivative work based upon the Gateway Services, or otherwise apply any procedure or process to Gateway Services in order to ascertain, derive, or appropriate for any reason or purpose, the source code or source listings for the Gateway Services, or any algorithm, process, procedure or other information contained in the Gateway Services. Except as expressly authorized herein, Submerchant may not rent, lease, distribute, assign, sublicense, transfer, modify, alter, or time share the Gateway Services.
D1.4 Trademarks. Subject to the limitations in this Agreement and subject to Payment Facilitator’s prior written approval, Payment Facilitator grants Submerchant the non-exclusive right and license to use Payment Facilitator’s trademarks (the “Trademarks”) during the term of this Agreement solely in conjunction with the use of the Gateway Services. Payment Facilitator grants no rights in the Trademarks or in any other trademark, trade name, service mark, product designation, business name or goodwill of Payment Facilitator, except as licensed hereunder or by separate written agreement of the parties. Submerchant agrees that it will not at any time during and after this Agreement assert or claim any interest in or do anything that may adversely affect the validity of any Trademark or any other trademark, trade name, service mark, product designation, business name or goodwill belonging to or licensed to Payment Facilitator (including, without limitation registering or attempting to register any Trademark or any such other trademark, trade name, service mark or product designation). During the term of this Agreement, Submerchant agrees not to use any trademark, trade name, service mark, product designation or business name likely to create confusion with a trademark, trade name, service mark, product designation or business name of Payment Facilitator, except for the Trademarks expressly licensed hereunder. Upon expiration or termination of this Agreement, Submerchant will immediately cease all display, advertising and use of all of the Trademarks and will not thereafter use, advertise or display any trademark, trade name, service mark, product designation or business name which is, or any part of which is, likely to create confusion with any Trademark or with any trademark, trade name or product designation of Payment Facilitator.
D1.5 Intellectual Property. “Intellectual Property” means all of the following owned by a party hereto: (i) trademarks, service marks (registered and unregistered), trade names, product designations and business names and goodwill associated therewith; (ii) patents, patentable inventions, computer programs, and software; (iii) databases; (iv) trade secrets and the right to limit the use or disclosure thereof; (v) copyrights in all works, including software programs; and (vi) domain names. The rights owned by a party in its Intellectual Property shall be defined, collectively as “Intellectual Property Rights.” Other than the express licenses granted by this Agreement, Payment Facilitator grants no right or license to Submerchant by implication, estoppel or otherwise to the Gateway Services or any Intellectual Property Rights of Payment Facilitator. Each party shall retain all ownership rights, title, and interest in and to its own products and services (including in the case of Payment Facilitator, in the Gateway Services) and all intellectual property rights therein, subject only to the rights and licenses specifically granted herein. Payment Facilitator alone (and not Submerchant) shall have the right, but not the obligation, to pursue trademark, service mark, copyright and patent protection, in its sole discretion, for the Gateway Services and any Intellectual Property Rights incorporated therein. Submerchant will cooperate with Payment Facilitator in pursuing such protection, including without limitation executing and delivering to Payment Facilitator such instruments as may be required to register or perfect Payment Facilitator’s interests in any Intellectual Property Rights and any assignments thereof. Submerchant shall not remove or destroy the proprietary, confidentiality, trademark, service mark, copyright or patent markings or notices placed upon or contained in any materials or documentation received from Payment Facilitator in connection with this Agreement.
D1.6 Submerchants Responsibilities. Submerchant understands and acknowledges that Gateway Services are merely a processing conduit. Payment Facilitator has no control of or responsibility for accepting, processing or filling any orders for purchases by Submerchant’s customers, or for handling any related inquiries. Submerchant shall be fully and solely responsible for verifying the accuracy and completeness of all card transactions submitted and processed via Gateway Services, including determining the appropriate action to be taken for each such transaction (approve, void, reject or decline). Payment Facilitator shall not be liable for any improperly processed transaction or illegal or fraudulent access to Submerchant’s gateway account. Submerchant agrees and acknowledges that it shall be fully and solely responsible for all activities conducted through Gateway Services. Submerchant shall be fully and solely responsible for the content and promotion of its website. Submerchant represents and warrants that it is the owner and/or that it has full right and authority to disseminate all information, data, graphics, text, video, music or other intellectual property which forms part of its Web site, which is provided by Submerchant to persons purchasing goods or services from Submerchant, or which is used by Submerchant in its advertising and promotion.
If Payment Facilitator uses third-party payment processing services providers, other than or in addition to Payment Facilitator, Submerchant shall verify Payment Facilitator’s list of payment processing services providers in order to determine if Payment Facilitator can properly transmit the necessary Card information to Submerchant’s third party providers. Submerchant acknowledges that Payment Facilitator’s list can be modified from time to time and must be verified by Submerchant prior to being set up with Payment Facilitator. Submerchant shall obtain the proper authorization from Submerchant’s other provider and/or settlement bank to be able to use Submerchant’s Account for key entry transactions and transactions being processed over the internet or online. Submerchant shall be responsible for credits, returns, disputes and all costs associated with data transmissions. Submerchant shall obtain accurate Card and ACH transaction information and authorization from its participating customers, and will transmit said information to Payment Facilitator via the internet or service agreed upon by Submerchant and Payment Facilitator.
D1.7 Submerchant Obligations. (1) Submerchant shall provide a valid, working administrative email address on enrolment. Any changes to Submerchant’s account must be made via the administrative email address provided upon enrolment. The security of Submerchant’s account is dependent in part upon Submerchant maintaining the security of such administrative email address. Submerchant shall be fully and solely responsible for any unauthorized changes to Submerchant’s account via this email address. (2) Submerchant will be given an ID code and password to allow Submerchant to have access to Gateway Services. Submerchant shall be fully and solely responsible for the establishment and maintenance of procedures to insure the control and confidentiality of identification codes and passwords and other access procedures (“Codes”). FAILURE TO PROTECT THE CODES MAY ALLOW UNAUTHORIZED PARTIES TO ACCESS THE GATEWAY SERVICES. Submerchant is required to put in place internal procedures to limit such risk, including, but not limited to (a) changing the password at least once every 120 calendar days; (b) keeping every identification code under secure conditions; and (c) not keeping, in any form or in any place, any list of passwords. Submerchant agrees to comply with any access or identification procedures and security protocols established from time to time by Payment Facilitator, and if Submerchant believes that any Code or security procedures has or may have become known by an unauthorized person (whether employed by Submerchant or not), Submerchant shall immediately notify Payment Facilitator by telephone and confirm to Payment Facilitator in writing such oral notification within 24 hours.
D1.8 Authorizations. Submerchant will obtain from each of its participating customers, the required payment information in proper form authorizing automatic debits to customers’ bank accounts to transfer payment amounts to the Account. Submerchant warrants that Submerchant will properly warehouse all authorizations obtained from its participating customers and will provide such authorizations for inspection upon request by Payment Facilitator or any regulatory body governing these types of transactions. Submerchant hereby authorizes Payment Facilitator to debit Submerchant for fees and other charges as set forth in this Agreement.
D1.9 Ownership. The ownership of the tokens created by Payment Facilitator hereunder, if any, shall rest with Payment Facilitator at all times.
D1.10 Migration. The delivery of data to Submerchant by Payment Facilitator further to the expiration or termination of this Agreement shall be made at a cost and terms and conditions to be then agreed upon.
D1.11 Providing Gateway Services. During the term of this Agreement, Payment Facilitator shall provide the Gateway Services and use its commercially reasonable efforts to provide the Gateway Services and maintain them in an uninterrupted and error-free fashion consistent with its practices in effect as of the date of this Agreement. However, the parties acknowledge that the Gateway Services are computer-network based and may be subject to outages and delays. In such an event, Payment Facilitator shall use commercially reasonable efforts to diligently and promptly remedy any and all material interruptions. Payment Facilitator will not be liable in any manner for any interruptions, outages, or other delays relating to the Gateway Services, including any attributed to Payment Facilitator’s vendors. Payment Facilitator may arrange for any portion of the Gateway Services to be provided to Submerchant by any of its parent, affiliate or subsidiary corporations, without any liability of such parent, affiliate or subsidiary to Submerchant.
D1.12 Confidential Information. Submerchant acknowledges that certain confidential and proprietary information of Payment Facilitator may be communicated to it (or its designees) by Payment Facilitator, including without limitation information concerning the Gateway Services and the know-how, technology, techniques, business and marketing plans related thereto (collectively, the “Confidential Information”) all of which are confidential and proprietary to, and trade secrets of Payment Facilitator. Confidential Information does not include information that: (i) is public knowledge at the time of disclosure by Payment Facilitator; (ii) becomes public knowledge or known to Submerchant other than by breach of Submerchant’s obligations under this section or by breach of a third party’s confidentiality obligations to Payment Facilitator; (iii) was known by Submerchant prior to disclosure by Payment Facilitator other than by breach of a third party’s confidentiality obligations to Payment Facilitator; or (iv) is independently developed by Submerchant without reliance on or use of Confidential Information. As a condition to the receipt of the Confidential Information from Payment Facilitator, Submerchant shall: (i) not disclose in any manner, directly or indirectly, to any third party any portion of the Payment Facilitator’s Confidential Information; (ii) not use Payment Facilitator’s Confidential Information in any fashion except to perform its obligations hereunder or with Payment Facilitator’s express prior written consent; (iii) disclose Payment Facilitator’s Confidential Information, in whole or in part, only to its employees and agents who need to have access thereto for Submerchant’s internal business purposes; (iv) take all necessary steps to ensure that its employees and agents are informed of and comply with the confidentiality restrictions contained in this Agreement; and (v) take all necessary precautions to protect the confidentiality of the Confidential Information received hereunder and exercise at least the same degree of care in safeguarding the Confidential Information as it would with its own confidential information, and in no event shall apply less than a reasonable standard of care to prevent disclosure. Submerchant shall promptly notify Payment Facilitator of any unauthorized disclosure or use of the Confidential Information. Submerchant shall cooperate and assist Payment Facilitator in preventing or remedying any such unauthorized use or disclosure.
D1.13 Indemnification. Submerchant shall defend, indemnify, and hold harmless Payment Facilitator and any of its officers, directors, agents and employees, from and against any and all claims, actions, proceedings and suits, and all related liabilities, damages, settlements, penalties, fines, costs or expenses (including reasonable attorneys’ fees and other litigation expenses) incurred by Payment Facilitator, arising out of or relating to (“Claim”): (a) any breach or alleged breach by Submerchant of any representation, warranty, or obligation of Submerchant set forth in this Submerchant Agreement; (b) any damage or loss caused by negligence, fraud, dishonesty or willful misconduct by Submerchant or any of its employees, agents or customers; (c) the reliability, accuracy, or legitimacy of payment data or purchase orders submitted by Submerchant to Payment Facilitator; (d) Card transactions submitted by Submerchant to Payment Facilitator and rejected by Payment Facilitator or Payment Facilitator; (e) claims by Submerchant’s Cardholders, including, without limitation, claims relating to the disclosure of Data; (f) any alleged or actual violation by Submerchant of any Applicable Law; or (g) any fines and/or penalties charged or to be charged to Payment Facilitator by the Card Brands or any other entity. Upon written notice from Payment Facilitator to Submerchant, Submerchant shall immediately undertake the defense of any such Claim, by representatives of Submerchant’s own choosing, subject to Payment Facilitator’s reasonable approval; and/or reimburse Payment Facilitator for any expense or loss arising from or relating to a Claim.
D1.14 Limitation of Liability. MERCHANT AGREES AND ACKNOWLEDGES THAT USE OF GATEWAY SERVICES ARE AT SUBMERCHANT’S SOLE RISK. ANY GATEWAY SERVICES, GOODS OR SOFTWARE PROVIDED HEREUNDER ARE PROVIDED ON AN “AS IS”, “AS AVAILABLE” BASIS, AND PAYMENT FACILITATOR GIVES NO OTHER EXPRESS OR IMPLIED WARRANTIES, REPRESENTATIONS, OR CONDITIONS OF ANY KIND, WHETHER STATUTORY OR OTHERWISE, INCLUDING BUT NOT LIMITED TO: WARRANTIES THAT THE GATEWAY SERVICES WILL BE COMPLETE, ACCURATE, SECURE, TIMELY, AVAILABLE, ACCESSIBLE, UNINTERRUPTED OR ERROR-FREE; IMPLIED WARRANTIES OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY, QUALITY OR FITNESS FOR A PARTICULAR PURPOSE; OR THOSE ARISING BY OPERATION OF LAW, COURSE OF DEALING OR USAGE OF TRADE. SUBMERCHANT UNDERSTANDS AND ACKNOWLEDGES THAT PAYMENT FACILITATOR SHALL NOT BE LIABLE FOR ANY IMPROPERLY PROCESSED OR AUTHORIZED TRANSACTION, OR ILLEGAL OR FRAUDULENT ACCESS TO SUBMERCHANT’S GATEWAY ACCOUNT OR DATA. THIS DISCLAIMER OF WARRANTIES CONSTITUTES AN ESSENTIAL PART OF THIS SUBMERCHANT AGREEMENT. THIS SECTION SHALL SURVIVE THE TERMINATION OF THIS SUBMERCHANT AGREEMENT.
EXCEPT AS OTHERWISE PROVIDED IN THIS SUBMERCHANT AGREEMENT, SUBMERCHANT EXPRESSLY AGREES THAT PAYMENT FACILITATOR SHALL NOT BE LIABLE FOR ANY LOSS (HOWEVER ARISING, INCLUDING NEGLIGENCE), ARISING FROM OR RELATED TO: (A) SUBMERCHANT’S FAILURE TO PROPERLY ACTIVATE, INTEGRATE OR SECURE ITS GATEWAY ACCOUNT; (B) IMPROPER, ILLEGAL, UNAUTHORIZED OR FRAUDULENT TRANSACTIONS PROCESSED THROUGH SUBMERCHANT’S GATEWAY ACCOUNT; (C) DISRUPTION OF SUBMERCHANT SERVICES, SYSTEMS, SERVER OR WEB SITE BY ANY MEANS, INCLUDING WITHOUT LIMITATION, DDOS ATTACKS, SOFTWARE VIRUSES, TROJAN HORSES, WORMS, TIME BOMBS, OR ANY OTHER TECHNOLOGY; (D) ACTIONS OR INACTIONS BY ANY THIRD PARTY, INCLUDING WITHOUT LIMITATION, A MSP OR BANK; OR (E) UNAUTHORIZED ACCESS TO (I) DATA, CARDHOLDER INFORMATION (INCLUDING CREDIT CARD NUMBERS AND OTHER DATA), TRANSACTION DATA OR PERSONAL INFORMATION BELONGING TO PAYMENT FACILITATOR , SUBMERCHANT OR ANY THIRD PARTY OR (II) THE GATEWAY SERVICES, OR ANY SYSTEM OR PROGRAM ASSOCIATED THEREWITH; OR (F) THE LIMITATION OF THE FUNCTIONING OF ANY GATEWAY SERVICES OR SOFTWARE, HARDWARE, OR EQUIPMENT ASSOCIATED THEREWITH. PAYMENT FACILITATOR MAKES NO REPRESENTATION, WARRANTY OR GUARANTEE WHATSOEVER IN RELATION TO THIRD PARTY PRODUCTS OR SERVICES (INCLUDING THOSE OF A MSP). SUBMERCHANT’S USE OF ANY SUCH THIRD PARTY PRODUCTS OR SERVICES IS AT ITS OWN RISK. PAYMENT FACILITATOR ASSUMES NO RESPONSIBILITY AND EXPRESSLY DISCLAIMS ANY LIABILITY FOR CLAIMS OF LOSS AND/OR FRAUD INCURRED RESULTING FROM THE USE OF OR CONCLUSIONS DRAWN FROM ANY THIRD PARTY PRODUCT OR SERVICE, REGARDLESS OF WHETHER OR NOT PAYMENT FACILITATOR IS A RESELLER OF OR REFERRAL AGENT FOR SUCH PRODUCT OR SERVICE.
D1.15 Data Security Compliance. Submerchant shall ensure that any of its agents or subcontractors to whom it provides Cardholder Information received from, created or received by Submerchant on behalf of Payment Facilitator, agrees to the same restrictions and conditions that apply through this Agreement to Submerchant with respect to such information. Upon five (5) business days’ notice or immediately upon any unauthorized access to, use or disclosure of any Cardholder Information, Payment Facilitator may at its discretion, conduct an on-site audit and review of Submerchant’s procedures and systems.
D1.16 Data Accuracy. Submerchant shall provide Payment Facilitator with data necessary for the electronic funds transfer (‘collection data”) in the form and at the times prescribed by Payment Facilitator and shall make periodic checks and updates necessary to cause the collection data to be current and accurate at all times. The format and schedule requirements for delivery of collection data by Submerchant may be changed by Payment Facilitator during the term of this Agreement, and Submerchant shall deliver collection data in conformity with changed requirements set forth from time to time by Payment Facilitator. Submerchant warrants to Payment Facilitator that all data and entries delivered to Payment Facilitator by Submerchant will (a) be correct in form, (b) contain true and accurate information, (c) be fully authorized by its customer, and (d) be timely under the terms and provisions of this Agreement.
D1.17 Use of Data. Payment Facilitator shall have the right to use the data received from Submerchant to help create, develop, operate, deliver, and improve its products, services, content and advertising, and for loss prevention and anti-fraud purposes.
D1.18. Records. Submerchant shall be solely responsible for compiling and retaining records of all transactional information for Submerchant’s records. Except as otherwise provided herein, Payment Facilitator shall not have the obligation to store, retain, report or otherwise provide any copies of or access to any Data collected or processed by Payment Facilitator or any of its suppliers. Submerchant shall be solely responsible for all equipment, hardware and software required to access or use Gateway Services.
D1.19 Fees. Submerchant shall pay to Payment Facilitator the fees listed in Schedule A, as amended from time to time, or as otherwise mutually agreed to by Payment Facilitator and Submerchant,, including all applicable taxes. Payment Facilitator shall issue monthly invoices to Submerchant in arrears. Submerchant agrees to pay Payment Facilitator for the Gateway Services via deduction of all fees and charges due directly from the Account via ACH.
D1.20 Inconsistency. In the event of any inconsistency between the terms of this Part and any other terms and conditions of this Submerchant Agreement, the provisions of this Part shall prevail.
D1.21 Termination. The license to Gateway Services shall immediately terminate upon the earlier of: (i) termination of expiration of this Submerchant Agreement; (ii) termination of the Gateway Services; or (iii) failure of Submerchant to comply with any provisions of this Part. Payment Facilitator may terminate Gateway Services for any reason with or without notice.
PART FIVE: FOREIGN CURRENCY PROCESSING
E1.1 Not Available. All transactions provided by Payment Facilitator must be in United States Dollars (“USD$”).