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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 Prrtnemhi Cor . oration l p ❑ �+ ❑� M��{ic.tl u�' Legal :1sau4it4►iutt Tux Excmnt organizaiion 0 Govt (he�l/Stiae/Loeal) ❑ lots=t„atiunul �r :uliiat;�i;i 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: 12) 13) 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 N 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).