2005 US Bank - Merchant ServicesA S� ♦ .
I
Merchant Agreement
Mcrcl'tarit N4111G LA QUl'r•lTA
Merchant DBA Name (if diMrent from aboi
Flusin&z.o. Form- ❑ Snlo Pwipririnrship ❑
❑ Assaeiati«n/Fstate/Ttzlst ❑
❑ Urnitcd Liability ❑
Business/Mai ling Address:
Merchant Information
Telephone Number
Federal Tax 1'D Number
State Tax ID Number
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79-179 AHMANSON LN
[-A QUiNTA CA 922� 3
U.S_ Aank National
Merchant ! aymcnt Services
Fl•3W0410
1010 South 7th Srr44t
Minneapolis, MN 55415
(760) 777•9884 Dzpositviy Bank
95-3740431 Designated Account
Transit/ABA
A. Card Acceptance Information Initial I;. Antieil)ttlt'd Qualificarion Level
Annual Sales Volume Average T!' ket Amount ® Rctail Qualified . ❑ UM/Mo,r0*
%liza/MastarCurd S 1,000,000.00 S 300.00 ❑ Lodge/Car Rental Qualified ❑ touch: ron
"
ADirm Marlcctin /l lail Ottledl'r•IcphonC
C. Prucessine Method ElElecuonlc Drall Capture ❑Touch-1, one D. Network ven-dur
E, Fee. Options ,Laver identlylad above. Foos will vary fay ►ror quallyyirg ut Me level irulicxued
1, Merchant Discount Fees Visa Mastel'Card JC13
(a) Discount Rate (%) 1.89 1.89 0.00
(a) Per Item Y'cc (S) $0.25 $0,25
2. Authorization Fees (per Voice Authorization $0•00 Debit Fees $0.00
*Wactronle Check Pmceecing
Anicrican Dinel's LCil • IiCI''*
Elec[ronic Authorisation Visu MasterCard JCl3 Discover Other
F,xpress Club i'cr ltetYl I Rttunit:tl 1tet11S
Other Fees
A0plication fee
$0.00
ACI•l Fce
C.A.R.E. Set tl p Tee
$0100
Chaarrtebtick Fee ( per item)
S15.00
Monthly Minimum Processing
'25.00
$0.00
Internet Seto I"ce
$0.00
Equipment Reprodramming lee
S0,00
C.A.R.E. User Fee
S0.00
f lLornot Monthly Fee
S0,00
Training Fee
$0.00
C.A.R.E. Monthly 171!0
0.00
Statement Fee
$5.00
ECP Net I-'ee 1
$0.00
F. Merchot'nt RepresentattWas and Certilicutions
Thu apolicant merchant ("Merr.hsint") and its repreeentative(c) rdprasent and ov.rtity that: all inron iutiuu viuvidvd and ull statCn1i;111S triatlt: in IRIS
Merchant Agreement and/or Application are true, complete and accurate and agree to notify 1J.S, BAA National Assuciution ("U.S. littnit") of any
iinportnnt changes in the racts sot forth in this Merchant Agreemcrit, Each undersi'= J authorized representative of Aierchanis cordflus by signing below,
tliat representative: 1) is uuthorized to ei,tlt•.r intn this Metrhant Agn4m4nt on buhalf ut' Mvrohant: 2) has rcccirvd and tc;id thi; U,S. dunk Murclwot
'!'erns of Services (the "MTOS" ); 3) ucknowledgvs on behuli•' or Merchant drat the MT0S is hereby incorpuruLud into this Wfuhtuyt Agrecimni by this
rvl�rrnce. Merchant certified that the total perc:enw t:. of its uansacTions which aril Mil ureter, tefeph►)U Order or pre -authorized will be:
01/0 Less than 101/10 X Ovor 10%
It ;iuuupted into the inurchant program by U.S. Bunk, Mert:hant ugrevs to ahidv by the wrnts and canditions sut forth in the MTOS, the Merchant
11roccissing Guide and this Mert:lttlttt AgreefnYcnt ns they may bt; alzlelldesd by U.S. funk frclin lime to time. Murchunt and cash of its represealatives hereby
authorize U.S. B:tnk, prior to U.S. Milk's ac;c;eptunco of this Mert;hant Agrcutnen[ and, if' it is =Ceptod, from 0111e to time th4:rcafwr, to investigatc the
tadivWual and business hiSlory and background of Merchant, each such rcpresi;ntutivo and uny outer officers, purtnurs, proprietors and/or uwnurs of
Merchant, and to obtain credit reports or other background investigation reports on t;uh of them hearing upon financial responsibility or Accvptttbility For
participation in U.S. Bunk's mcrohant prugrums. Merchant and onch of its undersigni:d rcpresentadves .►grNs flint all business rLli:runces, inchidin;? without
IInlltativu WriK5,1nay relegise any and all credit and financial information to U.S. Bank. Mvrchani further agrt;us and ucknawl�cres that any inlortnation
t id ion with tl ar ant Arret:ttlent and ull o cr re!'v;uu 'nl'uri ation may Lkt: supplicd by U.S. Batik to its atlitial".
JUl [N rA1.C.ON1r12
Name
JU •ALCONLtt - FINANCB 1)IRECTOR `1
Name & TitIe Address (home)
J 240 t -#
SSN# late Phone (home.)
Personal Gurrrtuty: To induce and in eonsidaration of U.S, Bank's acceptance of Meruhunt into U.S. Bank's nivrehunt program, the undersigned
Individual Guarantor unconditionally guarantees performance of MON ialtt's obligaticins zuld of all ;tlhoui S due tiro f41 fdiant in cunllrction with
this MerchantAgrvenient and the U.S. Bank Merchant Turms of Serviuc, as tltq way be. amcndod buns time to lime by U.S. Bank. tend in the overil nt
Wrchan['s rlefuutt, Inamdusl Livarunwr hereby waives notices of default and agrcvs to induinnify U.S. Bank against any losses incurred tlwr0y.
individual Guarantor's Signature
rani4-
Daft:
17
�i
THIS MERCHANT MEMBER AGREEMENT (this "Agreement") is entered into by and
between U.S. Bank National Association ("US Bank"), a national banking association with
its principal place of business in Minneapolis, Minnesota, and the Merchant ("Merchant")
named on the Agreement Acceptance/Options Page, which is incorporated herein and made a
part of this Agreement by this reference.
A. Merchant desires to honor, when presented as payment for goods and services by duly
authorized holders thereof ("Cardholders"), the following cards (each of which is
hereinafter referred to individually as a "Card" and collectively as "Cards"):
1) Any Visa® cards conforming to standards established from time to time by
Visa U.S.A.®, Inc. or Visa International(&;
2) Any MasterCard® cards conforming to standards established from time to time
by MasterCard International(&; and
3) Any other cards which U.S. Barak designates in writing as Cards that
Merchant may honor under this Agreement.
B. Merchant desires to offer to U.S. Bank, or to any designated correspondent financial
institution that has entered into an agreement regarding Card transactions with U.S.
Bank ("Correspondent"), for acceptance by U.S. Bank hereunder, evidence of
transactions for which payment was made by Card.
1. MERCHANT PROGRAM
A. Merchant Program Participation. Merchant agrees to participate in U.S. Bank's
�
programs for the acceptance and processing of Card transactions (the Merchant
Program"), to honor Cards and to submit sales transactions and credit voucher
transactions to U.S. Bank for processing, pursuant to the terms of this Agreement. No
strikeover of this preprinted text of this agreement shall be effective.
B. Merchant Processing Guide. Merchants will comply with the Merchant Processing
Guide as established and amended from time to time by U.S. Bank, which is
incorporated herein and made a part of this Agreement by this reference. Any breach
of the Merchant Processing Guide shall constitute a breach of this Agreement.
Further, Merchant will comply with all other Merchant Program rules and regulations
as established and amended from time to time by U.S. Bank and by Visa U.S.A., Inc.,
Visa International, MasterCard International, Inc. and any other national card
association designated by U.S. Bank (collectively, the "National Associations"),
which rules and regulations, together with the Merchant Processing Guide, are
hereinafter referred to as the Operating Regulations and are incorporated herein and
made part of the Agreement by this reference.
C. Fees and Charges. Merchant agrees to pay the Merchant Discount Fees on the
Agreement Acceptance/Options Page and in Section 53 below, and all fees and other
amounts due pursuant to this Agreement. If, at any time after the effective date of
this Agreement, Merchant wishes to add Merchant Program features not selected on
D.
E.
the effective date of this Agreement, Merchant hereby agrees to pay the fees and
charges for such additional features as established by U.S. Bank at the time such
features are provided to Merchant, and this agreement shall be deemed amended to
include any such fees and charges effective upon Merchant's receipt of written notice
of the amount of such fees and charges. U.S. Bank may change the Merchant
Discount Fees or one or more of the other fees and charges set forth or included on
the Agreement Acceptance/Options Page, or in this Agreement, upon thirty (30) days
prior written notice to Merchant. Further, any of such fees and charges or any other
part of this Agreement may be amended by U.S. Bank at any time without notice to
Merchant if such a change is due to National Association rules. Merchant is
responsible to obtain appropriate equipment and supplies needed to participate in the
Merchant Program, which equipment and supplies shall comply with all requirements
of this Agreement. Merchant may obtain such equipment and supplies from U.S.
Bank, if available, at U.S. Bank's then current prices, which prices may be changed
from time to time by U.S. Bank without notice to Merchant. Merchant will further be
responsible for any fees or other charges (such as, without limitation, National
Association excessive handling, compliance or collection fees or other National
Association charges) assessed to or incurred by U.S. Bank in connection with
Merchant's participation hereunder. Merchant will make payment to U.S. Bank at
U.S. Bank's current prices for other services provided by U.S. Bank in connection
with Merchant's participation in the Merchant Program hereunder, such as, without
limitation, programming or training. Fees paid or payable prior to any termination of
this Agreement will not be prorated or refunded.
Display of Marks. Unless other wise notified by U.S. Bank, Merchant shall
adequately display the most current versions of the National Association names,
symbols and/or service marks, as appropriate, and any other marks designated by U.S.
Bank, on promotional materials to inform the public that the Cards associated with
such names and marks will be honored at Merchant's place(s) of business. Merchant's
right to use or display such materials shall continue only so long as this Agreement
remains in effect and such right shall automatically terminate upon notice by either
party of termination of the Agreement.
Qualification Levels. The following qualification levels shall be used to determine
Merchant Discount Fees and Discount Rates for Card Transactions. Merchant will
have a higher Discount Rate and pay higher Merchant Discount Fees for transactions
not qualifying at the indicated qualification level. Please refer to the Agreement
Acceptance/Options Page or Merchant Processing Guide for further detail related to
various qualification rates and levels.
Level 1 Retail Qualified - Card Read. Every Card transaction is authorized and
captured via Electronic Draft Capture Magnetic Stripe Reading Equipment, deposited
the same day as the transaction, is the result of a face-to-face transaction, and is
accompanied by an authorization message.
Level 2 Retail Non -qualified - Customer Industry. Every Card transaction is
authorized and captured via Electronic Draft Capture.
Level 3. Business Card Transactions. All restaurant, hotel or car rental transactions
qualify at level 3 regardless of method of deposit.
Level 4 Touch Tone Sales (ARU transactions). Merchant's Card transactions are
authorized and captured via phone. Original imprinted Sales drafts are retained by
Merchant for 3 years.
2. CARD PROCEDURES
A. Honor All Cards. Merchant shall honor without discrimination all valid Cards when
properly presented by customers as payment for transactions. If Merchant does not
deal with the public at large (for example, if Merchant is a private club), Merchant
shall be deemed in compliance with this subsections 2.A if Merchant honors valid
Cards of those customers who have purchasing privileges with Merchant. If a Card
bears more than one National Association or network trademark, Merchant shall
process the transaction through the National Association or network designated by the
Cardholder.
B. No Minimum or Maximum. Merchant shall not establish minimum or maximum
Card transaction amounts.
C. No Surcharge. Except as permitted for Debit Card Transactions under Sections 10.D
below with regard to Point of Sales Debit Card Transactions, Merchant shall not
impose any surcharge or finance charge on Card transactions, nor shall Merchant
require any Cardholder to pay any part of any Merchant Discount Fee, whether
through any increase in price or otherwise; provided, however, this prohibition shall
not be construed to prohibit discounts for payment in cash.
D. Tax Included.Any tax required to be collected by Merchant must be included in the
Card transaction and not collected separately in cash, unless otherwise required by
law.
E. No Personal Information. Except as otherwise specifically set forth herein or in the
Operating Regulations, or so specifically requested by U.S. Bank, Merchant shall not
require a Cardholder to provide personal information as a condition for honoring a
Card, such as, without limitation, a telephone number, address, or driver's license.
F. Card Examination, Non -Acceptance. Merchant shall examine each Card presented
to determine that the signature on the Sales Draft or Receipt matches the signature on
the reverse of the Card (unless a PIN is used to identify the cardholder pursuant to
section 10.D below), and to determine that the Card is valid, is current, and has not
expired, on the basis of expiration date, earliest use date, and any other terms shown
on or visual attributes of the Card. Merchant shall not honor a Card as payment for a
transaction if such Card has expired, if such Card has not yet become eligible for use,
if such Card is otherwise not valid, or if the signature on the reverse of the Card does
not match the signature on the Sales Draft or Receipt.
G. Card Retrieval. If Merchant is requested by U.S. Bank, an authorization center or a
Card issuer to retrieve a card, if the four printed digits above the embossed account
number on a Visa Card does not match the first four embossed digits, or if Merchant
has reasonable grounds to believe a Card is counterfeit, fraudulent or stolen,
Merchant shall use its best efforts to retain the Card by reasonable and peaceful
means, shall immediately notify U.S. Bank that the card has been retrieved, shall ask
U.S. Bank for further instructions regarding the handling of the retrieved Card and
shall follow such instructions.
3. AUTHORIZATION PROCEIDVRES
A. Authorization Procedures. The maximum total transaction amount for which a
Card may be accepted as payment without specific authorization (the "Floor Limit")
is zero dollars ($0.00). Merchant will not accept a Card as payment for goods or
services without specific authorization from U.S. Bank or an appropriate
authorization center approved by U.S. Bank, and Merchant shall obtain specific
authorization for the total amount of every Card transaction. If Merchant receives a
negative response to an authorization request, or any response other than unqualified
positive authorization, Merchant shall not accept the Card as payment for the
transaction. Merchant shall comply with all authorization procedures set forth in the
Merchant Processing Guide.
B. Regular Authorization. For every Card transaction, Merchant shall contact U.S.
Bank or the appropriate authorization center by telephone or on-line terminal to
obtain specific authorization to honor the Card for the requested transaction.
Merchant shall record the authorization number or approval number on the Sales
Draft in writing (or have such number recorded on the transaction record and
automatically printed on the receipt, if Merchant is using Electronic Draft Capture),
and shall complete the Card transaction only after receiving authorization from U.S.
Bank or the appropriate authorization center as described in section 3.A above.
C. Special Authorizations. Merchant shall obtain specific voice authorization for any
transaction (other than a mail or telephone order) when a Card is not physically
presented to Merchant, and for any transaction that involves (a) a handwritten sales
draft (as defined below) that does not contain the imprint of both the Merchant Plate
and the card; (b) a Sales Draft that is not signed by the Cardholder, except as
permitted under section 4.F below or (c) a Card that does not display the Cardholder's
authorized signature. Voice authorization shall be obtained from U.S. Bank's
designated center by calling the voice authorization number provided from time to
time. When requesting authorization in any such circumstance, Merchant shall give
the specific reason(s) that authorization is requested. In any transaction for which
specific voice authorization is requested. In any transaction for which specific voice
authorization is required, Merchant shall write on the Sales Draft (or record on the
transaction record and have printed on the receipt if Merchant is using Electronic
Draft Capture) the authorization number or approval code given and shall complete
the transaction only after receiving the necessary unqualified positive authorization.
D. Limitations. Authorization of any Card transaction shall not relieve the Merchant of
its obligation to adhere to the provisions of this Agreement relating to the completion
and submission of the Sales Draft or receipt and Card transaction.
MERCHANT ACKNOWLEDGES THAT AN AUTHORIZATION
DOES NOT CONSTITUTE
(a) A WARRANTY THAT THE PERSON PRESENTING THE CARD
IS THE RIGHTFUL CARDHOLDER, NOR
(b) A PROMISE OR GUARANTtE BY U.S. BANK THAT IT WILL PAY OR
ARRANGE FOR PAYMENT TO MERCHANT FOR THE AUTHORIZED
TRANSACTION.
MERCHANT ACKNOWLEDGES THAT AN AUTHORIZATION DOES
NOT PREVENT A SUBSEQUENT CHARGEBACK OF AN AUTHORIZED
TRANSACTION PURSUANT TO THIS AGREEMENT.
4. SALES DRAFT PROCEDURES
A. Sales Draft Procedures. The term "Sales Draft" shall include any paper sales draft
and any paper and electronic records of any Electronic Draft Capture transaction.
The term "Credit Voucher" shall include any such paper credit vouchers and any
electronic records of any credit given electronically. Merchant also shall comply with
all Sales Draft procedures set forth in the Merchant Processing Guide.
B. Liability for Card Transactions. MERCHANT ASSUMES ALL LIABILITY FOR
CARD TRANSACTIONS, INCLUDING WITHOUT LIMITATION TELEPHONE,
MAIL ORDER, RECURRING AND OTHER TRANSACTIONS CONDUCTED
WITHOUT A CARD PHYSICALLY PRESENT, EVEN WHEN
AUTHORIZATION HAS BEEN OBTAINED FROM U.S. BANK OR AN
APPROPRIATE AUTHORIZATIONS CENTER.
C. Forms of Sales Drafts. Merchant shall complete a paper Sales Draft for every card
transaction and shall create an electronic record through proper use of an electronic
terminal pursuant to Section 10.A below. Merchant shall complete a paper Credit
Voucher for every credit given with respect to a Card transaction and shall create an
electronic credit transaction record through proper use of an electronic terminal
pursuant to Section 4.D below. The term "Credit Voucher" shall include any such
paper Credit Vouchers and any paper and electronic records of any credit given
electronically.
D. Contents of Sales Drafts and Credit Vouchers. All Sales Drafts and Credit
Vouchers shall include the Cardholder's name, the Card's account number, the
effective date and expiration date of the Card, the Merchant's name, the Merchant
number, the Merchant's location code, the Merchant's location, city and state, the
authorization number or approval code as required pursuant to Section 3 above, the
total amount of the transaction, a brief description of the merchandise or services
purchased, the transaction date, and the type of account and type of transaction if
applicable.
E. Paper Sales Drafts, Receipts and Credit Vouchers. In addition to the requirements
of Subsection 4.D above, and except as otherwise set forth herein, all paper Sales
Drafts, receipts and paper Credit Vouchers tendered to U.S. Bank or its
Correspondent or generated hereunder, by Merchant, shall conform with the
following requirements: Such paper Sales Drafts and paper Credit Vouchers shall be
on forms obtained from or approved by U.S. Bank, shall bear an imprint of the Card
presented and the Merchant Plate; and shall include the signature of the person
presenting the Card (which must match the Cardholder's signature on the Card), a
description of each item of merchandise sold and each service rendered, and the
i
initials of Merchant or its employees or representative who completed the paper Sales
Draft, receipt or Credit Voucher.
F. Non -Impression Sales Drafts, Mail or Telephone Orders. "Non -Impression Sales
Drafts and Credit Voucher" are defined as those which do not bear the imprint of a
Card, or, in the case of Electronic Draft Capture, those completed without a Card
having been physically presented to Merchant. This includes without limitation,
Sales Drafts and Credit Vouchers that are completed by hand, are typewritten,
computer generated, or completed by other manual or electronic means, in connection
with telephone, mail order, recurring, pre -authorized and all other transactions
completed without a Card having been physically presented to Merchant. A "Non -
Impression Transaction" shall mean a transaction completed without a Card having
been physically presented to Merchant or where a Non -Impression Sales Drafts or
Credit Voucher is submitted to U.S. Bank. Merchant shall not tender to U.S. Bank or
its Correspondent Non -Impression Sales Drafts or Credit Vouchers, for telephone or
mail orders or otherwise, without having first declared in writing to U.S. Bank that is
the Merchant's practice to engage in such types of transactions, or that the Merchant
intends to engage in such types of transactions, and having obtained the prior written
consent of U.S. Bank to Merchant's tender of such telephone or mail order Sales
Drafts or Credit Vouchers, or other Non -Impression Sales Draft and Credit Vouchers.
Each Non -impression Sales Draft and Credit Voucher shall conform with all the
requirements of this Section 4 (except for the requirement for an imprint of the Card)
and shall also include a written indication that the transaction is a mail order,
telephone order, recurring, or other type of Non -Impression Transaction (such as, for
example, a handwritten notation of MO for mail order, or TO for telephone
order.) If a Card is presented but not imprinted, Merchant shall also note on the Non -
Impression Sales Draft the name or trade name of the issuer as shown on the Card.
Merchant acknowledges that without limitation of any other provisions of this
Agreement, mail order, telephone order, recurring and other Non -Impression
Transactions are subject to chargeback for the same causes and in the same manner as
any other type of Card transaction pursuant to this Agreement. Without limitation of
the foregoing, all Non -Impression Sales Drafts are subject to chargeback for lack of
Cardholder Signature.
G. No Payments or Disbursements.
1) Merchant shall not receive any monetary payments from a Cardholder with
respect to charges for goods or services which are included on a Sales Draft
resulting from use of a Card.
2) Cards may not be used to obtain cash from Merchant, and Merchant shall not
disburse cash to a Cardholder in consideration of the Cardholder's payment for
cash by use of a Card.
H. Tender of Sales Drafts and Credit Vouchers.
1) Merchant shall tender Sales Drafts and Credit Vouchers to U.S. Bank or
Correspondent pursuant to the terms of the Agreement. Sales Drafts and
Credit Vouchers shall be tendered to U.S. Bank or Correspondent no later than
two (2) business days after the date of the Card transaction, except that no
Sales Draft shall be tendered to U.S. Bank until the purchased goods or
services are delivered or performed.
I.
J.
2) In the case of Sales Drafts related to partial payment, installment payment,
recurring transaction, advance deposit or delayed delivery sales, Merchant
shall tender a "deposit" sales Draft within three (3) business days after the
Cardholder agrees to the deposit and shall tender subsequent Sales Drafts in
accordance with the Cardholder's written instructions, within three (3)
business days after the goods or services purchased are provided to the
Cardholder.
3) U.S. Bank may refuse to process any Sales Draft or Credit Voucher tendered,
or may delay such processing for any reasonable period of time as U.S. Bank
deems necessary or appropriate, and U.S. Bank shall have no liability to
Merchant for additional charges, higher rates, or any other loss, expense or
damage Merchant may incur directly or indirectly due to any such refusal or
delay.
Refusal to Process. U.S. Bank may refuse to process any Sales Draft or Credit
Voucher tendered, or may delay such processing for any reasonable period of time as
U.S. Bank deems necessary and appropriate, and U.S. Bank shall have no liability to
Merchant for additional charges, higher rates, or any other loss, expense or damage
Merchant may incur directly or indirectly due to any such refusal or delay.
Merchant's Representations and Warranties Regarding Sales Drafts.
1) Bona Fide Obligation. Merchant warrants that all Sales Drafts tendered to
U.S. Bank or its Correspondent by Merchant shall represent bona fide
obligations of a Cardholder in the actual amounts set forth therein for the
purchase price of merchandise sold or charges for services rendered only and
required taxes and shall not involve the use of a Card for any element of
credit for any other purpose such as obtaining cash from Merchant. Without
limitation of the foregoing, Merchant shall not submit a Sales Draft generated
in the absence of a legitimate purchase in order to obtain cash for business
operation.
2) Collectability. Merchant represents that, as of the date any Sales Draft is
tendered to U.S. Bank or Correspondent, Merchant has no knowledge or
notice that would impair the validity of such Sales Draft or its collectability.
3) Delivery of Sales Drafts. Merchant shall be responsible for delivery and/or
transmission of all Sales Drafts and Credit Vouchers to U.S. Bank, and
assumes the risk of loss of any Sales Draft or Credit Voucher, and any related
data, in the course of such delivery or transmission.
4) Endorsement. The delivery by Merchant to U.S. Bank or Correspondent of
Sales Drafts shall constitute an endorsement to U.S. Bank or its
Correspondent by Merchant of each Sales Draft. U.S. Bank or Correspondent
is authorized to place Merchant's endorsement on any such Sales Draft at any
time. Merchant hereby waives notice of default or non-payment, protest or
notice of protest, demand for payment, and any other demands or notices in
connection with this Agreement or any Sales Draft or Credit Voucher.
Merchant hereby consents to extensions of time granted to, or compromises
made with, any Cardholder or other party liable on any sales Draft without
effect upon Merchant's liability thereon or hereunder.
*10
L.
M.
5) No Third Party Paper. MERCHANT WARRANTS AND SPECIFICALLY
AGREES THAT IT WILL NOT ACCEPT FROM ANY THIRD PARTY,
NOR WILL IT TENDtk TO U.S. BANK OR ITS CORRESPONDENT,
ANY THIRD PARTY SALES DRAFT(S) OR CREDIT VOUCHER(S).
WITHOUT LIMITATION OF ANY OTHER PROVISION OF THIS
AGREEMENT, VIOLATION OF THIS SECTION 4.J (5) MAY RESULT IN
IMMEDIATE TERMINATION OF THIS AGREEMENT, AT THE OPTION
OF U.S. BANK. A Third Party is defined as a person, sole proprietor,
partnership, corporation, or other entity which is not a party to this
Agreement. A Third Party Sales Draft or Credit Voucher is defined as any
Sales Draft or Credit Voucher which was not originated as a direct result of an
act or transaction between a Cardholder and Merchant at its stated place(s) of
business.
(6) Further Warranties. Merchant also warrants as follows with respect to any
Sales Draft tendered to U.S. Bank: The transaction and the execution of the
Sales Draft comply with all terms and conditions of this Agreement, and with
all applicable National Association rules; there has been proper application of
the Floor Limit(s) pursuant to this Agreement; the Card transaction is in
compliance with all applicable laws, ordinances, and regulations; the
indebtedness represented by the Sales Draft has not been pledged as collateral
for payment of any indebtedness or obligation of Merchant or of any other
person; the signature on each Sales Draft or receipt is that of the proper
Cardholder; the person presenting the Card is the Cardholder and the
information on the Sales Draft, including without limitation the Cardholder's
account number and Card expiration date, is accurate and correct.
7) Prohibited Presentment. Merchant will not present for processing or entry
into interchange any Sales Draft representing a Card Transaction which had
been previously charged back and subsequently returned to Merchant. This
prohibition is applicable to Card transactions processed with or without the
Cardholder's permission. Merchant will not present for processing any Sales
Draft not originated as a result of a transaction between the Cardholder and
Merchant. Merchant will not directly or indirectly present for processing any
Sales Draft Merchant knows or should know is fraudulent or not authorized by
the Cardholder.
Audit. At any reasonable time, U.S. Bank may audit, examine and verify all
procedures and records of Merchant pertaining to any Credit Voucher or Sales Draft
offered or tendered to U.S. Bank or its correspondent, and except as otherwise set
forth herein or as otherwise agreed in writing by Merchant and U.S. Bank, Merchant
shall preserve such records for a period of three (3) years(s) from the date of such
Credit Voucher or Sales Draft and make such records available or provide such
records to U.S. Bank upon (1) business days prior notice.
Collection of Amounts Due. U.S. Bank shall have the sole right to receive payment
for Sales Drafts accepted by U.S. Bank or its Correspondent. Merchant shall hold all
amounts collected for Sales Drafts, if any, in trust for U.S. Bank and shall deliver the
same in kind immediately upon receipt.
Refunds and Credits.
(1) Merchant shall establish a fair policy and procedures for the exchange and
return of merchandise and shall give a proper credit or refund for each such
return (except as otherwise specifically set forth in this Agreement), and shall
issue a Credit Voucher therefor in accordance with this agreement and the
Merchant Processing Guide. Merchant shall not make any cash refund for a
Card transaction. A Credit Voucher shall be tendered to U.S. Bank within
three (3) business days after its issuance. A Credit Voucher shall be issued
only with respect to a previous bona fide Card transaction, and Merchant
warrants that all Credit Vouchers tendered to U.S. Bank or its Correspondent
by Merchant shall represent bona fide credit given for a previous Card
transaction in the actual amount set forth therein. U.S. Bank shall deduct the
face amount of any Credit Voucher from amounts payable to Merchant
hereunder, or from Merchants Designated Account, at U.S. Bank's demand,
Merchant shall immediately make payment to U.S. Bank in the face amount of
any such Credit Voucher.
2) Merchant may limit acceptance of returned merchandise or stipulate special
circumstances only if Merchant gives proper disclosure to the Cardholder at
the time of the Card transaction. Proper disclosure shall be deemed to
include, without limitation, the words "NO REFUND", "EXCHANGE
ONLY", "IN-STORE CREDIT ONLY", or other explanation of special
circumstances agreed to by the Cardholder, legibly printed on all copies of the
paper Sales Draft or transaction receipt signed by the Cardholder, in letters
approximately 1 /4 inch high in close proximity to the signature line.
Notwithstanding the foregoing, Merchant acknowledges that without
limitation or any other provision of this Agreement, Card transactions limited
under the provisions of this subsection 4.M (2) are subject to chargeback in
the same manner as any other Card transaction pursuant to this Agreement
5. TRANSACTION PROCESSING AND SETTLEMENT PROCEDURES
A. Submission for Processing. Upon receipt of Sales Drafts tendered by Merchant,
U.S. Bank may, subject to the terms of this Agreement and the rules and regulations
of the National Associations, or any other applicable law, rule or regulation, submit
Sales Drafts U.S. Bank deems valid and eligible to the appropriate Card transaction
clearing and processing organization.
B. Merchant Discount Fees. The difference between the face amount of a Sales Draft
and the amount paid to Merchant by U.S. Bank or Correspondent hereunder on
account of such Sales Draft shall constitute the "Merchant Discount Fee." The
percentage rate that may be used to calculate the Merchant Discount Fee is the
"Discount Rate" shown in the schedule of fees and charges set forth on the
Agreement Acceptance/Options Page. The Discount Rate may be adjusted by U.S.
Bank from time to time upon thirty (30) days prior written notice to Merchant, or may
be adjusted at any time by U.S. Bank to reflect changes in qualification levels (as set
forth in this Agreement) or National Association rules or rates. In consideration of
U.S. Bank's or Correspondent's performance hereunder, Merchant will be charged
Merchant Discount Fees and U.S. Bank or Correspondent may deduct or withhold the
Merchant Discount Fees and any other amounts due hereunder from Merchant's
Designated Account, or other account(s), or from the amount of any Sales Draft
submitted hereunder, on a periodic basis. Merchant will receive notice from either
U.S. Bank or Correspondent, indicating the amount of Merchant Discount Fees
charged to Merchant. In addition, the Discount Rate in effect from time to time for
Merchant will be reflected in Merchant's Activity Statement, if such a statement is
requested by Merchant from U.S. Bank. Merchant agrees to the Discount Rate
applied from time to time by U.S. Bank or Correspondent.
C. Payment for Sales Drafts. Subject to the terms of this Agreement, U.S. Bank will
pay Merchant, or arrange for payment to Merchant, in the face amount of each Sales
Draft tendered to U.S. Bank for processing under Section 5.A above, minus any
Merchant Discount Fees and any other amounts payable to U.S. Bank or
Correspondent by Merchant. The Merchant Discount Fees may be withheld from
each Sales Draft or withheld or assessed from Merchant's Designated Account, or
other accounts, or from Sales Drafts submitted hereunder, on a periodic basis, at the
option of U.S. Bank. U.S. Bank or Correspondent may suspend or hold any funds to
be paid to Merchant for any reasonable period of time if deemed necessary by U.S.
Bank or Correspondent, and U.S. Bank or Correspondent may set off any
indebtedness of Merchant to U.S. Bank or Correspondent against any such funds. It
is acknowledged that any payment to Merchant hereunder is provisional and may be
revoked in case of any chargeback under this Agreement, in case of refusal of any
Sales Draft by U.S. Bank, any Card issuer, Card transaction clearing and processing
organization or any Cardholder, or for any other reason if deemed necessary by U.S.
Bank.
D. Adjustments. All payments and figures are subject to final audit and checking by
U.S. Bank or Correspondent. U.S. Bank or Correspondent may charge or credit
Merchant without notice for any error, deficiency or overage, as necessary.
E. Debits and Credits to Merchants. Merchant hereby designates the account
("Designated Account") of merchant identified on the Agreement
Acceptance/Options Page, held at the depository financial institution identified on the
Agreement Acceptance/Options Page ("Depository"), to be charged, debited, assessed
or credited in accordance with the terms of this Agreement. U.S. Bank and
Correspondent are hereby authorized to deduct funds from Merchant's Designated
Account held at Correspondent or at any other bank designated as Merchant's
Depository, in the amount of any indebtedness or obligation of Merchant to U.S.
Bank. Merchant will keep sufficient funds on deposit in such account(s) to cover
such deductions.
F. Post -Termination Rights. Upon any termination of this Agreement for any reason,
U.S. Bank may suspend payment to Merchant of amounts attributable to Sales Drafts
deposited by Merchant for any reasonable length of time, as deemed necessary by
U.S. Bank, to avoid losses due to chargebacks or for any other reason.
6. CHARGEBACKS
U.S. Bank or its Correspondent may charge back to Merchant, and Merchant agrees
to immediately pay to U.S. Bank or Correspondent (by means of debit or set-off
initiated by U.S. Bank or Correspondent, submission of payment by Merchant, or
otherwise, at the sole option of U.S. Bank) the face amount of any Sales Draft, and
U.S. Bank or its Correspondent shall have the right at any time to charge Merchant
for such amounts or deduct such amounts from any funds payable to Merchant, or any
account of Merchant, without notice in any situation relating to such Sales Draft,
where:
A. Merchandise, the purchase of which involved such Sales Draft, is returned to
Merchant, whether or not a Credit Voucher is delivered to U.S. Bank;
B. sales transactions through the use of any particular Card related in whole or in part to
such Sales Draft have not been specifically authorized by U.S. Bank;
C. such Sales Draft is alleged to have been drawn, accepted or endorsed improperly, or
the Card is alleged to have been used without the specific authority of U.S. Bank, or
without the authority of the Cardholder or an authorized user there of;
D. such Sales Draft or the paper receipt delivered in connection with such Sales Draft
does not clearly show the actual date of the transaction, is illegible, does not clearly
show the actual date of the transaction is illegible, does not bear the initials of
Merchant or its employee or representative who completed such Sales Draft or fails to
comply with this Agreement in any other way;
E. the Cardholder or authorized user of the Card disputes participating in the transaction,
disputes any aspect of the transaction or sale, quality, or delivery of merchandise, or
disputes the performance or quality of services covered by any such Sales Draft and
accepted or not accepted by such Cardholder or any authorized user;
F. such Sales Draft was drawn by, or depository credit was given to Merchant in
circumstances constituting a breach of any term, condition, representation, warranty,
or duty or Merchant hereunder;
G. the extension of credit reflected by such Sales Draft, either in whole or in part, was
for cash or for any matter other than the actual purchase price or merchandise sold or
charges for services rendered;
H. such Sales Draft or the paper receipt delivered in connection with such Sales Draft
was not fully completed or was completed improperly;
I. such Sales Draft does not bear the Cardholder's signature;
J. Merchant fails to perform or discharge any obligation or duty imposed on Merchant
hereunder in connection with such Sales Draft;
K. Merchant fails to provide a copy of such Sales Draft or a related Credit Voucher as
required under this Agreement, fails to provide such a copy upon U.S. Bank's request
or fails to provide or make records related to such Sales Draft available for
examination as required under the Agreement;
L. such Sales Draft represents a transaction for which authorization was initially
declined and was subsequently obtained by means of multiple authorization attempts
or other means not permitted hereunder; or
M. such Sale Draft fails to comply with the terms and conditions of this Agreement or
fails to comply with the requirements, rules and regulations of any National
Association.
7. INDEMNIFICATION AND RELEASE, LIMITED LIABILITY
A. Indemnification and Release. Merchant hereby indemnifies and releases U.S. Bank,
its affiliates and Correspondent, and agrees to defend and hold U.S. Bank, its affiliates
and Correspondent harmless, from and against any and all claims, causes of action,
demands, judicial and administrative proceedings, losses, liabilities, damages, costs
and expenses, including without limitation court costs and reasonable fees and expenses
of attorneys and consultants, arising out of or directly or indirectly relating to:
1) Any Sales Draft or Credit Voucher tendered to, processed by, handled by or
refused by U.S. Bank or its Correspondent, whether interposed by way of
defense, dispute, chargeback, offset, counterclaim or otherwise; or
2) any non-compliance by Merchant with this Agreement, applicable laws, or
rules of any National Association; or
3) any dispute, claim or demand by any Cardholder related to a Sales Draft or
Credit Voucher tendered by Merchant, whether or not such dispute, claim or
demand is valid; or
4) any fraud, gross negligence or willful misconduct on the part of Merchant or
Merchant's agent, employee, principal or other person acting for Merchant; or
5) U.S. Bank's provision of services hereunder or Merchant's participation or
activities hereunder.
B. Limited Liability. Except as otherwise specifically set forth in Section 5.0 above,
1) U.S. Bank's sole liability to Merchant hereunder shall be to correct to the
extent reasonably practical any data in which errors have been caused by U.S.
Bank provided that Merchant notifies U.S. Bank of any such error within ten
(10) days after such error occurs. However, the expense to U.S. Bank of
correcting such data shall constitute U.S. Bank's only liability in connection
with any such error.
2) No claim for damages for any performance or failure of performance by U.S.
Bank under this Agreement shall exceed the Merchant Discount Fee amount
and any other fees or charges paid to U.S. Bank in connection with the Card
transaction which is the subject of the alleged failure of performance.
3) U.S. Bank shall have no other liability whatsoever to Merchant, and Merchant
hereby expressly waives any claim against U.S. Bank for indirect, special,
incidental or consequential damages or lost profits or interest. Without
limitation of the foregoing, U.S. Bank shall not be liable to merchant for
delays in data transmission. Merchant acknowledges that any losses
hereunder are commercial in nature.
4) U.S. BANK MAKES NO WARRANTY WHATSOEVER REGARDING
CARD AUTHORIZATIONS, DECLINES OR REFERRAL CODES,
RESPONSES TO REQUESTS FOR AUTHORIZATION, PROCESSING,
SETTLEMENT, OR ANY OTHER SERVICES PROVIDED BY OR ON
BEHALF OF U.S. BANK HEREUNDER, AND U.S. BANK HEREBY
DISCLAIMS ANY AND ALL SUCH WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE, and
U.S. Bank shall have no liability to Merchant or any other person for any loss,
liability or damage arising directly or indirectly in connection herewith.
Without limitation of the foregoing, Merchant acknowledges that U.S. Bank
has no liability of the foregoing. Merchant acknowledges that U.S. Bank has
no liability or responsibility for the actions of any National Association, Card
issuer or Cardholder. Merchant hereby releases U.S. Bank from any liability,
arising directly or indirectly out of U.S. Bank's provision of services
hereunder or Merchant's participation or activities hereunder.
C. Limitation of Liability. U.S. Bank shall have no liability to Merchant arising under
or in connection with this Agreement or any action taken or omitted in connection
herewith except as otherwise, specifically provided herein.
D. Force Majeure. U.S. Bank shall not be liable for delays in processing or other
nonperformance caused by such events as fires, telecommunications failures,
equipment failures, strikes, riots, war, nonperformance of vendors, suppliers,
processors or transmitters of information, acts of God or any other causes over which
U.S. Bank has no control.
8. CONFIDENTIAL INFORMATION
A. Cardholder Account Information. Merchant shall treat all information relating to
any Card, including without limitation Cardholder name and identification
information and account number information in any form, imprinted Sales Drafts,
carbon copies of imprinted Sales Drafts, mailing lists, tapes, or other media, obtained
by reason of any Card transaction or otherwise ("Cardholder Account Information"),
as confidential information belonging to U.S. Bank and shall protect such Cardholder
Account Information from disclosure to any third person, except as expressly
permitted herein. Merchant shall not, without the consent of the Cardholder, sell,
purchase, provide, or exchange Cardholder Account Information to or with any third
person, other than:
1) Merchant's agents, employees and representatives, network providers or Card
processors, for the purpose of assisting Merchant in completing the Card
transaction;
2) U.S. Bank or its Correspondent;
3) the applicable National Association or Card Issuer in compliance with this
Agreement or applicable error resolution procedures; or
4) in accordance with applicable law.
B. Other Confidential Information. Merchant shall treat this Agreement and any and
all related technical specifications, operating rules and other materials regarding the
Merchant Program as confidential information belonging to U.S. Bank and shall
protect such materials from disclosure to any third person, except as expressly
permitted herein.
9. AUTOMATED CLEARING HOUSE SETTLEMENT
A. Merchant will utilize Automated Clearing House or Fedwire settlement procedures
for Card transactions (hereinafter collectively "ACH"), and agrees to do so in
accordance with the following:
1) Merchant will utilize Electronic Draft Capture services pursuant to Section
10.A below.
2) Merchant's Designated Account at Depository will be debited and credited
under the terms of this Section 9.A
3) Merchant hereby authorizes U.S. Bank to initiate credit entries, debit entries
and adjustments to the Designated Account by electronic tape or other
transmission, including without limitation wire transfer, funds transfer, or ACH
transfer, and further authorizes Depository to debit, withdraw and transfer
funds from the Designated Account to U.S. Bank in accordance with any such
debit entry or adjustment (whether or not such funds are specifically related to
any previous credit entry for any Sales Draft) and to credit or deposit funds to
the Designated Account in accordance with any such credit entry.
4) Merchant hereby authorizes U.S. Bank to reverse any credit or debit entry
made to the Designated Account, whether such reversal is made due to a
chargeback, an error, or any other reason.
5) Merchant hereby authorizes Depository to grant U.S. Bank access to any and
all information or records regarding the Designated Account.
6) Merchant hereby authorizes U.S. Bank to direct Depository to hold funds in the
Designated Account or block or restrict Merchant's or others' access to funds in
the Designated Account (whether or not such funds are specifically related to
any previous credit entry for any Sales Draft) in order to protect U.S. Bank's
rights under this Agreement, and directs Depository to immediately comply
with any such direction from U.S. Bank.
7) Merchant hereby authorizes U.S. Bank to initiate debit entries to the
Designated Account in the amount of fees due to any third person for services
performed for Merchant in connection with Merchant's participation in the
Merchant Program ("Third Person Program Fees"), and to make related
adjustments to the Designated Account by electronic tape or other
transmission, including without limitation, wire transfer, funds transfer, or
ACH transfer, and further authorizes Depository to debit, withdraw and
transfer funds from the Designated Account to U.S. Bank for Third Person
Program Fee in accordance with any such debit entry or adjustment.
8) Merchant agrees that U.S. Bank and Depository may act pursuant to any
provision of this Section 9.A without notice to Merchant.
9) Merchant acknowledges that in order for Merchant to receive ACH settlement
under this Section 9.A, Depository must be a member of the Federal Reserve
System and of the National Automated Clearing House Association, and a
blank, voided check for the Designated Account must be submitted to U.S.
Bank.
10) Merchant agrees to notify U.S. Bank of any change of its Depository or
Designated Account in writing at least twenty (20) days prior to the effective
date of such change, in a form acceptable to U.S. Bank.
10. ADDITIONAL SERVICES
A. Electronic Draft Capture and On -Line Authorizations.
Merchant agrees to utilize Electronic Draft Capture (herein "EDC") services pursuant
to this Section 10.A to transmit Sales Drafts and Credit Vouchers for Card transactions
through an electronic terminal in accordance with this Agreement and the Merchant
Processing Guide. Merchant may designate a third person as its agent to deliver to
U.S. Bank or directly to Card Associations card transactions captured at the point of
sale by such agent. If Merchant elects to designate such an agent, Merchant must
provide U.S. Bank prior written notice of such election. Merchant understands and
agrees U.S. Bank is responsible to make payment to Merchant for only those
transaction amounts delivered by such agent to the Card Associations, less amounts
withheld by U.S. Bank pursuant to this Agreement, and Merchant is responsible for
any failure by such agent to comply with any procedures, including without limitation
any such failure that results in a chargeback.
1) Authorize all transactions. Merchant shall obtain specific authorization
through an electronic terminal or telephone from U.S. Bank or an appropriate
authorization center approved by U.S. Bank for every Card transaction.
2) Chargeback. In addition to the provisions of Section 6 above, any Sales Draft
which does not bear an authorization number or approval code generated by
U.S. Bank may be charged back to Merchant.
3) Electronic Tender. Merchant shall tender Sales Drafts and Credit Vouchers to
U.S. Bank directly or through Correspondent by electronic transmission
through the use of a telephone touch-tone key pad or a terminal supported by
and conforming with the requirements of U.S. Bank and according to formats,
rules and procedures established by U.S. Bank from time to time. Except as
otherwise set forth in Section 4.H above, all Sales Drafts and Credit vouchers
shall be tendered to U.S. Bank within two (2) business days after the date of
the Card transaction, except that no Sales Draft shall be tendered until the
purchased goods or services are delivered or performed.
4) Balancing. Balancing and reconcilement of EDC transactions tendered to U.S.
Bank shall be the responsibility of Merchant. All figures are subject to final
audit and checking by U.S. Bank. U.S. Bank may charge or credit Merchant
for any deficiencies or overages, as the case may be.
5) Document Retention. Merchant agrees to retain all original Sales Drafts and
Credit Vouchers for a period of one (1) year from the transaction date. Legible
copies of Sales Drafts and Credit Vouchers must be maintained by Merchant
for a period of seven (7) years from the transaction date, at Merchant's expense.
Merchant further agrees to provide to U.S. Bank, upon verbal or written
request by U.S. Bank, either an original or a copy of any original Sales Draft or
Credit Voucher within one (1) business day after receipt of a request from U.S.
Bank, except as otherwise specified in such request. Merchant agrees that U.S.
Bank may charge Merchant for the face value of the item requested if it is not
received by U.S. Bank within one (1) business day. Further, and in addition to
the other indemnification provisions of this Agreement, Merchant will defend,
indemnify and hold U.S. Bank harmless from and against any and all losses,
liabilities and chargebacks arising out of Merchant's failure to comply with a
request for a Sales Draft or Credit Voucher, including without limitation costs
and expenses of attorneys and consultants.
B. Relay of Authorization and Decline Codes. If U.S. Bank relays authorization,
decline and referral codes for Merchant through an on-line terminal for certain cards
not included as Cards under this Agreement, Merchant agrees to the following with
respect to relay of such authorization, decline and referral codes:
1) Merchant requests that U.S. Bank relay authorization codes to Merchant, upon
Merchant's specific request from time to time, through a terminal compatible
with U.S. Bank's requirements for transactions involving use of the American
Express and/or Diner's Club Cards.
2) Merchant acknowledges that the cards described in Subsection 10.B(1), above
are not Cards covered by this Agreement, that U.S. Bank does not provide
transaction processing services or any other services with respect to such cards
except as specifically set forth therein, and Merchant acknowledges that U.S.
Bank has no involvement with either American Express Corporation or Diner's
Club, nor with the generation of the card authorizations, declines or referral
codes for American Express or Diner's Club cards.
3) U.S. Bank agrees to relay authorization, declines, and referral codes pursuant
hereto; provided that U.S. Bank makes no warranty whatsoever, regarding
American Express or Diner's Club card authorization, decline or referral codes
and shall bear no liability to Merchant or any other person for any damage
arising directly or indirectly in connection therewith. Merchant hereby agrees
to indemnify, defend, and hold U.S. Bank harmless against any loss, liability,
or damage arising directly or indirectly out of this request to relay American
Express or Diner's Club authorizations, declines and referral codes or the
service provided hereunder, including without limitation costs and expenses of
attorneys and consultants.
4) U.S. Bank may at any time and in its sole discretion terminate the service
provided pursuant to this Subsection 10.B. If U.S. Bank terminates such
service, it will attempt to notify Merchant of such termination as promptly as
practicable.
5) Merchant acknowledges that it must receive certification and approval from
American Express Corporation or diner's Club, respectively, in order to accept
American Express or Diner's Club cards.
6) U.S. Bank may charge Merchant an application and certification fee upon
execution hereof which shall be non-refundable. In consideration of U.S.
Bank's provision of services pursuant hereto, Merchant shall pay U.S. Bank a
fee for each authorization, decline or referral code relayed, as these fees shall
be specified from time to time by U.S. Bank.
C. Other Data Capture Services. If U.S. Bank provides certain other data capture
services to Merchant through an on-line terminal for certain cards not included as
Cards under this Agreement, Merchant agrees to the following with respect to such
other data capture services:
1) Merchant requests that U.S. Bank provide data capture services to Merchant
through an on-line terminal compatible to U.S. Bank, for transactions involving
use of American Express, JCB, Diner's Club and/or Discover cards.
2) Merchant acknowledges that the cards described in Subsection 10. C(1), above,
are not Cards covered by this Agreement, that U.S. Bank does not provide
transaction processing services or any other services with respect to such cards
except as specifically set forth herein, and that U.S. Bank has no involvement
with Discover Card Services, Inc.; Sears, Roebuck & Company; Greenwood
Trust Company; JCB International Co. Ltd.; American Express Corporation; or
Diner's Club nor with the generation of authorization, decline or referral codes
for Discover/Novus®, American Express®, Diner's Club® or JCB® cards.
3) U.S. Bank will provide data capture services for Discover Financial Service
card, American Express card, JCB card and/or Diner's Club card transactions
pursuant hereto; provided, that U.S. Bank makes no warranty whatsoever
regarding Discover, American Express, JCB or Diner's club authorizations,
declines or referral codes and shall bear no liability to Merchant or any other
party for any damage arising directly or indirectly in connection therewith or
herewith. Merchant hereby agrees to indemnify, defend, and hold U.S. Bank
and its agent and employees harmless against any loss, liability, or damage
arising directly or indirectly out of this request or the service provided
hereunder, including without limitation the costs and expenses of attorneys and
consultants.
4) U.S. Bank may at any time and in its sole discretion terminate the service
provided pursuant to this Section 10.C. If U.S. Bank terminates such service, it
will attempt to notify Merchant of such termination as promptly as practicable.
5) Merchant acknowledges that it must receive certification and approval from
American Express Corporation, Diner's Club, JCB International Co., Ltd., or
Discover Financial Service Organization, respectively, in order to accept
American Express, Diner's Club, JCB or Discover cards.
6) U.S. Bank may charge Merchant an application and certification fee upon
execution hereof which shall be non-refundable. In consideration of U.S.
Bank's provision of services pursuant hereto, Merchant shall pay U.S. Bank a
fee for each authorization, decline or referral code relayed and for data capture
for each transaction, which fees shall be specified from time to time by U.S.
Bank.
D. Point of Sale Debit Card Services. If U.S. Bank provides point of sale debit card
transaction services to Merchant through an on-line terminal for certain debit cards,
Merchant agrees to the following point -of -sale debit card transaction provisions set
forth in the Merchant Processing Guide and the following:
1) The following debit cards (hereafter collectively "Debit Cards" and
individually a "Debit Card") will be included as cards under this Agreement:
a) InterlinO Cards
b) Maestro® Cards
c) Any other debit cards which U.S. Bank informs Merchant that
Merchant may honor hereunder.
Except as otherwise specifically set forth herein, the terms of this Agreement shall
apply to Debit Card Transactions, and Debit Cards shall be included without limitation
as "Cards" under this Agreement.
2) Additional Definitions: For the purposes of this subsection 1 OD, in addition to
other terms defined in the Agreement, the following terms shall have the
following definitions:
a) "Debit Card Association" shall include Interlink Network, Inc., Maestro
U.S.A., Inc., and any other Debit Card network association designated
as Debit Card Association by U.S. Bank from time to time. The Debit
Card Association shall be included without limitation as "National
Associations" under the Agreement.
b) "Debit Card Rules" shall have the meaning set forth in Section 10.D(3)
below.
c) "Debit Card Transaction" shall include any and all of the transactions
defined in Section 10.D(7) below.
d) "U.S. Bank Debit System" shall mean U.S. Bank's electronic Debit
Card transaction processing system for provision of Debit Card
authorization, data capture and settlement services.
e) "PIN" shall mean a Personal Identification Number
0 "PIN Pad" shall mean a device with an alpha -numeric keyboard which
conforms with the requirements established from time to time by U.S.
Bank and the Debit Card Associations, and through which a Cardholder
may enter a PIN.
g) "POS Device" shall mean a terminal or other point -of -sale device at a
Merchant location which conforms with the terminal requirements
established from time to time by U.S. Bank and the Debit Card
Associations, which incorporates at Track 2 Magnetic Stripe Reader
and which communicates electronically, directly or indirectly, with the
U.S. Bank Debit System.
3) Debit Card Merchant Rules and Guidelines: In the course of its acceptance of
Debit Cards, Merchant shall comply with and be bound by all applicable rules
and operating regulations of the Debit Card Associations, and all rules,
operating regulations and guidelines for Debit Card Transactions issued by
U.S. Bank from time to time, including without limitation all amendments,
charges and revisions made thereto from time to time, all of which are
collectively referred to herein as the "Debit Card Rules" and are incorporated
by this reference as if fully set forth herein. Merchant acknowledges that it has
received and thoroughly examined the applicable rules and operating
regulations of the Debit Card Associations.
4) Surcharge: Merchant is not prohibited hereunder from imposing -a surcharge
on Debit Card Transactions, subject to applicable law and Debit Card Rules.
5) Display of Debit Card Marks: Unless otherwise informed by U.S. Bank,
Merchant shall prominently display the most current versions of the Debit Card
Associations' names, symbols and/or service marks, as appropriate, at or near
the point of sale and may display such marks on promotional materials to
inform the public that such marks on promotional materials to inform the
public that such Debit Cards will be honored at Merchant's place(s) of
business. Merchant's use of each of such marks must comply with the
requirements of each mark's owner. Merchant's right to use or display such
marks shall continue only so long as this Agreement remains in effect and such
right shall automatically terminate upon notice by either party of termination of
this Agreement.
6) Use and Availability of POS Devices and PIN Pads:
a) Merchant shall cause a POS Device and PIN Pad to be readily be
available for the use of all Debit Cardholders at all of Merchant's
business locations where Debit Cards are accepted. Merchant shall take
all reasonable steps to ensure that all POS Devices and PIN Pads
operated at Merchant's business locations function with a minimum or
error, in a reliable manner and in accordance with the standards
established from time to time by U.S. Bank and the Debit Card
Associations.
b) Merchant shall use a POS Device to initiate every Debit Card
Transaction, and Merchant shall require that either the Debit
Cardholder or the Merchant shall insert and "swipe" the Debit Card
through the POS Devise to initiate every Debit Card Transaction,
except as set forth in Subsection IO.D(10) below. No Debit Card
Transaction may be initiated unless the Debit Card is physically
present.
c) Merchant shall require that each Debit Cardholder enter his or her PIN
utilizing a PIN Pad at the point of sale when initiating a Debit Card
Transaction, except as provided in Subsection IO.D(10) below.
Merchant may not require a Debit Cardholder to sign a Sales Draft or
receipt or require any other means of identification unless technical
problems prevent entry of a PIN and the Merchant has elected to use a
paper Sales Draft for the Debit Card Transaction, pursuant to
Subsection 10.D(13) below.
7) Debit Card Transactions.
a) Merchant shall support the following Debit Card Transactions:
(i) Purchases;
(ii) ReversalsNoids;
(iii) Chargebacks;
b) Merchant may also support the following Debit Card Transactions if
supported by the applicable Debit Card Association:
(i) Purchase With Cashback:
(ii) Balance Inquiries;
(ill) Paper Sales Draft transactions;
(iv) Pre -authorization Requests and Pre -authorization Completion
transactions; and
(v) Respresentments (includes Cancellations and Corrections).
c) Merchant may not support a Debit Card Transaction to obtain Scrip
hereunder.
8) Receipt Requirements. At the time of any Debit Card Transaction (other than a
Balance Inquiry or Preauthorization Request), Merchant shall make available
to each Debit Cardholder a electronic receipt containing, at a minimum, the
following information:
a) The amount of the Debit Card Transaction;
b) The date of the Debit Card Transaction;
c) The type of Debit Card Transaction (i.e., payment from primary
account) and, if more than one type of account is accessible by the
Debit Card at the POS device, the type of account (i.e., checking) and,
if more than one account of the same type is accessible by the Debit
Card at the POS Device, the account number;
d) The Debit Card number or another account number or code that
uniquely identifies the Debit Cardholder
e) Merchant's name and location at which the Debit Card Transaction was
initiated; and
f) the Trace number or Authorization Number.
9) ReversalsNoids. Merchant may electronically void or reverse a Debit Card
Transaction only at the same Merchant named on the receipt where the original
Debit Card Transaction was initiated, and only prior to midnight of the
calendar day on which the original Debit Card Transaction was initiated. A
reversal or void requires the following procedures:
a) The Debit Cardholder must re-enter the PIN at the PIN Pad.
b) The Debit Card must be inserted and "swiped" through the POS device.
c) Merchant must transmit the Trace Number or Authorization Number
and the exact dollar amount of the Debit Card Transaction to be
reversed or voided.
10) Pre -authorization Requests. Merchant may initiate Pre -authorization Requests
pursuant to the following procedures:
a) The Debit Cardholder must enter the PIN at the PIN Pad.
b) The Debit Card must be inserted and "swiped" through the POS device.
c) The Pre -Authorization Request must be for a specific dollar amount.
The subsequent Purchase pre -authorized hereunder must be completed
within two (2) hours after the original Pre -Authorization Request.
d) Funds shall not be transferred with respect to a Pre -authorization
Request.
e) In order to complete the subsequent Purchase Pre -authorized hereunder,
Merchant shall transmit a completion message indicating the actual
dollar amount of the Debit Card Transaction, and shall comply with all
requirements of a Purchase Debit Card Transaction, at that time, except
that entry of a PIN and "swiping" of a Debit Card is not required to
complete the subsequent purchase if these steps were properly taken in
order to pre -authorize such purchase hereunder. Such subsequent
Purchase shall not be authorized or completed unless the actual dollar
amount of the Purchase is less than or equal to the amount specified in
the Pre -authorization Request.
f. If Merchant initiates Pre -authorization Requests, it shall support the
processing of Partial Pre -authorizations.
11) Balance Inquiries. Merchant may accommodate Balance Inquiries if the
applicable Debit Card Association and the Debit Card issuer support the
Balance Inquiry Function, pursuant to the following procedures:
a) Balance Inquires may be performed only at Debit Cardholder -operated
POS Devices:
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b) Balance inquiries shall at all times require that the Debit Cardholder
enter the PIN and the PIN pad and insert and "swipe" the debit Card
through the POS Device.
Purchase With Cashback. Merchant may offer Purchase With Cashback
transactions pursuant to the following procedures:
a) For each Purchase with Cashback Merchant shall transmit in its
transaction message the amount of cash given to the Debit Cardholder
(if permitted by the U.S. Bank system);
b) If a request for authorization of a Purchase With Cashback is denied
solely because the cash requested exceeds the Debit Card issuer's limit
on cash withdrawals, Merchant shall inform the Debit Cardholder of the
reason for the denial and that a new Purchase transaction in the amount
of the Purchase alone might be approved.
Technical Problems.
a) If the U.S. Bank Debit System or the electronic interface with any
Debit Card Association is inoperative, Merchant may choose to store
applicable Debit Card Transactions, and shall forward such stored
transactions through the U.S. Bank system as soon as possible, or may
choose to utilize a paper Sales Draft pursuant to Subsection 10.D(13)(b)
below. Merchant shall indemnify, release and hold U.S. Bank harmless
from and against any and all liability or losses arising out of Merchant's
election to store and forward Debit Card Transactions or to utilize paper
Sales Drafts hereunder.
b) If the U.S. Bank Debit System, the POS Device, or the PIN Pad is
inoperative, the electronic interface with any Debit Card Association is
inoperative, or the magnetic stripe on a Debit Card is unreadable, and
Merchant elects not to or is unable to store Debit Card Transactions,
Merchant may choose to utilize a paper Sales Draft to complete the
Debit Card transaction, pursuant to the following procedures:
(i) Merchant shall inform the Debit Cardholder that technical
problems have prevented electronic verification and, as a result,
the Debit Cardholder's signature will be required for
verification;
(ii) The paper Sales Draft must be signed by the person presenting
the Debit Card, and such signature must match the signature on
the reverse of the Debit Card.
(iii) The paper Sales Draft must meet all paper Sales Draft
requirements of the Agreement, except that no Trace Number
shall be required;
(iv) Merchant shall deliver a copy of the paper Sales Draft to the
Debit Cardholder, shall retain a copy pursuant to the terms of
the Agreement, and shall deliver the original paper Sales Draft
to U.S. Bank.
c) Without limitation of any of the terms of this Agreement, Merchant
acknowledges and agrees that any Debit Card Transaction utilizing a
paper Sales Draft or stored and subsequently processed is subject to
chargeback because it was not completed on-line, in addition to any
other chargeback reason, and Merchant agrees to pay U.S. Bank the full
amount of any Debit Card Transaction charged back hereunder.
14) Adjustment. A Debit Card transaction may be adjusted if an error is
discovered during Merchant's end -of -day balancing only by means of a written
request from Merchant to U.S. Bank. The request for adjustment must
reference a settled Debit Card Transaction which is partially or completely
erroneous or a denied Pre -authorized Transaction for which the Pre -
authorization request was approved. The adjustment must be completed within
forty-five (45) calendar days after the date of the original Debit Card
Transaction.
15) Resubmission. Merchant may choose to electronically store and re -submit any
on-line or Store and Forward Interlink Transaction, and electronically resubmit
any Interlink Sales Draft, that is declined due to 1) insufficient funds or 2)
daily activity limits, provided, that Merchant shall indemnify, release and hold
U.S. Bank harmless from and against any and all chargebacks, liability or
losses arising out of Merchant's election to store and resubmit such a declined
Interlink transaction.
11. RESERVE ACCOUNT
A. Reserve Account Requirement. U.S. Bank may at any time upon three (3) business
days' written notice require Merchant to deposit funds in an amount specified by U.S.
Bank with U.S. Bank in a Reserve Account, which shall be maintained thereafter at the
level specified by U.S. Bank and shall serve as a fund available to U.S. Bank to
enforce any and all obligations and liabilities of Merchant to U.S. Bank arising under
this Agreement.
B. Resource to Reserve Account. U.S. Bank may withdraw funds from the Reserve
Account at any time without notice to Merchant in the amount of any obligation or
liability of Merchant to U.S. Bank hereunder.
C. Security Interest. Merchant hereby grants to U.S. Bank a security interest in any
Reserve Account established hereunder and any other deposits, deposit accounts,
instruments, certificates or deposit and other property of Merchant in U.S. Bank's
possession, as security for the performance and payment of Merchant's obligations and
liabilities hereunder.
D. Post -termination Reserve Account Provisions. After termination of this Agreement,
the Reserve Account shall remain at U.S. Bank for at least six (6) months after the date
of such termination, or for a longer period if necessary due to U.S. Bank's risk of
losses related to Merchant's activities hereunder, and U.S. Bank may deposit into and
retain in the Reserve Account any and all amounts deposited to the Designated
Account or any deposit account of Merchant at U.S. Bank. Any amounts remaining in
the Reserve Account when U.S. Bank determines that the Reserve Account may be
closed shall be released to Merchant.
12. ADDITIONAL PROVISIONS AND REPRESENTATIONS
A. Truth of Statements. All statements made by Merchant to U.S. Bank, including
without limitation statements contained in applications, are true and correct.
Merchants shall immediately notify U.S. Bank of any changes to any fact previously
stated to U.S. Bank.
B. Business and Other Financial Information.
1) Merchant agrees to furnish U.S. Bank upon five (5) days notice such financial
statements and information concerning itself or its parent, subsidiary or
affiliated entities as U.S. Bank may from time to time request. Without prior
notice given to Merchant, U.S. Bank or its duly authorized representative may
(a) visit Merchant's business premises and examine that part of the books and
records of Merchant pertaining to Merchant practices regarding Card
transactions, including without limitation Merchant's books and records
concerning all Sales Drafts and Credit Vouchers previously tendered, and/or
(b) obtain reports on Merchant's financial conditions from any third party.
2) Merchant agrees to provide U.S. Bank at least thirty (30) days prior written
notice of (a) its intent to change in any way the basic nature of its business, (b)
any change in the identity of Merchant's principals or managing officers, or (c)
any change in Merchant's ownership structure affecting ten (10%) or more of
Merchant's ownership rights.
3) Merchant agrees to provide U.S. Bank with prompt written notice if Merchant
or any of it parent, subsidiary or affiliates entities is the subject of any
voluntary in involuntary bankruptcy or insolvency petition or proceeding.
4) Merchant and Merchant's representatives signing this Agreement for Merchant
hereby authorize U.S. Bank to investigate their personal and business history
and obtain individual credit bureau reports and information from any other
source which may bear upon their financial responsibility or acceptability for
this Merchant Program.
C. Merchant Plates. Merchant Plates provided by U.S. Bank or its Correspondent to
Merchant shall remain the exclusive property or U.S. Bank or its Correspondent.
Merchant shall use such a Merchant Plate to imprint a Sales Draft for every Card
transaction. Merchant shall use such a Merchant Plate to imprint a Sales Draft for
every Card transaction. Merchant shall return such Merchant Plates in good condition
to U.S. Bank or its Correspondent upon termination of this Agreement.
D. Other Equipment. Merchant shall obtain and maintain all equipment and software
necessary for its participation in the Merchant Program, and Merchant shall ensure that
all such equipment and software conforms with the requirements established from time
to time by U.S. Bank and the National Associations. Merchant will provide adequate
electrical and telephone connections, and install and operate equipment in accordance
with any U.S. Bank guidelines.
E. Other Services. If Merchant receives any services utilized in connection with the
Merchant Program from any third person, such as, without limitation, network
services:
1) Merchant shall ensure that such services and the person providing such
services conform with the requirements established from time to time by U.S.
Bank and the National Associations; and
2) Merchant will release, defend, indemnify and hold U.S. Bank harmless from
and against any damages, costs, liability or expense caused by the action or
inaction of such third party.
F. No Waiver. Failure on the part of U.S. Bank to assert any of its rights or to assert
against Merchant any of Merchant's duties, responsibilities, obligations or liabilities
under this Agreement or the Merchant Processing Guide, on either an occasional or a
continuing basis shall not be construed as a waiver thereof by U.S. Bank, and such
rights, duties, responsibilities, obligations or liabilities may be asserted by U.S. Bank
at any time.
G. Assignment, Successors and Assigns. No interest or right of Merchant under this
Agreement shall be assigned or transferred in any manner by Merchant without the
express written consent of U.S. Bank. U.S. Bank may assign this Agreement at any
time without prior written notice to Merchant. Subject to the foregoing, this
Agreement shall be binding upon and inure to the benefit of the parties and their
successors or assigns. U.S. Bank may, if it so desires, utilize any subcontractor,
designated representative or agent to perform any of its obligations under this
Agreement.
H. Governing Law and Submission to Jurisdiction. This Agreement shall be governed
by and interpreted according to the substantive laws of the State of Minnesota, without
regard to legal principles pertaining to conflict of laws. Merchant hereby submits to
the jurisdiction of State and Federal Courts in Minnesota, and any action arising out of
or related to this Agreement shall, at U.S. Bank's option, be brought in the State of
Minnesota.
I Term and Termination. This Agreement shall become effective upon the date of
acceptance by U.S. Bank, shall have an initial consecutive one (1) year, and shall
automatically renew thereafter for consecutive one (1) year terms until terminated.
Either part may terminate this Agreement at any time upon written notice to the other
party, and U.S. Bank may immediately terminate this Agreement without notice to
Merchant if it believes, in its sole judgment reasonably exercised, that Merchant has
become inactive, that Merchant is in breach of this Agreement or that any fraud or
other emergency has occurred or imminently will occur with respect to Merchant's
activities hereunder. This Agreement shall automatically terminate with respect to
Merchant's acceptance of any type of Card immediately upon termination of U.S.
Bank's membership in the applicable National Association.
J. Survival of Obligations, Rights and Remedies. All obligations, warranties and
liabilities of Merchant, incurred or existing as of the date of any termination of this
Agreement, including without limitation Merchant's obligations with respect to
subsequent chargebacks of Sales Drafts tendered to U.S. Bank prior to such
termination, and Merchant's obligations related to the Reserve Account, shall survive
such termination of this Agreement and shall continue in full force and effect as if
such termination had not occurred.
K. Breach, Damages. In the even that this Agreement is breached by Merchant, in
addition to any remedies provided by the terms of this Agreement or by applicable
law, U.S. Bank shall be entitled to recover any and all costs, damages, and liabilities
which U.S. Bank may incur on account of such breach, including without limitation
reasonable attorneys' fees and expenses, court costs and the fees and expenses of
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consultants incurred in connection with any judicial or arbitration proceedings relating
to such breach.
L. Notices. Unless otherwise expressly stated in this Agreement all notices, reports, and
other documents provided for in this Agreement shall be deemed to have been given or
made when delivered in hand, when delivered by electronic facsimile transmission, or
three (3) days after being sent by the United States mail postage prepaid, addressed to
such party at the address for notices shown on the Agreement Acceptance/Options
Page, or as such address may be changed through written notice to the other party.
M. Relationship of the Parties. Nothing herein shall be deemed to create a partnership,
joint venture or, except as expressly and specifically set forth herein, any agency
relationship between U.S. Bank and Merchant.
N. Severability. If the performance or observance by either party of any provision of this
Agreement is determined to be unlawful or in violation of any federal, state, or local
statute, law, ordinance, regulation or rule, or of the rules of any National Association,
said party shall seek to cure the illegality or violation within thirty (30) days following
the date that such party is first informed of such violation or illegality. If such cure is
not effected within such thirty (30) day period, the illegal or violating provision shall
be null and void, and this Agreement shall remain in full force and effect, and the
parties shall use their best efforts to agree upon a legal and non -violating substitute
provisions that will serve the intent of the parties.
O. Heading. The paragraph headings used in this Agreement are for purposes of
convenience and do not affect the meaning of this Agreement.
P. Exhibits. The Agreement Acceptance/Options Page and the Merchant Processing
Guide, and any exhibits or schedules referenced herein or attached hereto, are hereby
incorporated as a part of this Agreement.
Q. Entire Agreement. This Agreement, together with all materials incorporated herein
by reference and any addenda signed by the parties, sets forth the full and complete
understanding of the parties with respect to Card transactions. This Agreement may
be amended only as specifically set forth herein, by a written amendment signed by
both parties, or by U.S. Bank upon thirty (30) days prior written notice to Merchant
(provided that if Merchant terminates this Agreement within such (30) days, such
amendment shall not apply to Merchant).