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MERCHANT CREDIT/DEBIT CARD PROCESSING / ACH CHECK PROCESSING
Terms and Conditions

This Merchant Processing Agreement, in conjunction with all addenda, amendments, revisions and periodic disclosures, hereinafter called "Agreement," is made as of the date below, by and between the undersigned merchant, hereinafter called "Merchant," and HMSBLUE doing business as Merchant Resource Center, and Bank and processors, hereinafter called "MRC."

MRC shall provide Card processing services and ACH check processing to Merchant, as are set forth below, hereinafter called the "Program," and is authorized to act in accordance with applicable MasterCard International ("MasterCard"), VISA ("VISA") and other Card Issuer's rules and regulations. Merchant desires to participate in MRC's Program and to have a merchant processing relationship with MRC. Merchant agrees to utilize MRC as its sole and exclusive provider of Card processing services for the term of this Agreement.

In consideration of the mutual convenants and agreements set forth herein and for other good and valuable consideration, MRC and Merchant agree as follows:

  1. DEFINITIONS
    The terms set forth below and used in this Agreement shall have the following meaning:
    1. "Bank Card" means either (i) an unexpired and unaltered MasterCard card in the form issued by a Bank which is a member of MasterCard International, which bears a distinctive design consisting of overlapping circles, or (ii) an unexpired and unaltered Visa card in the form issued by a Bank which is a member of Visa USA or Visa International, which bears the service marks owned and licensed by VISA USA, which marks include (a) the distinctive Bands Design and (b) the name "VISA".
    2. "Debit Card" means an unexpired and unaltered Point-Of-Sale debit/ATM card, or a dual purpose card used as a debit/ATM card for a particular transaction, in the form issued by a debit/ATM card issuer, which is a member of a MRC supported Point-of-Sale debit/ATM Card network or association, and which bears the distinctive logo of that network or association.
    3. "Travel & Entertainment Card ("T&E")" means an unexpired and unaltered card in the form issued by one of Bank's supported T&E card issuers.
    4. "Card" means an unexpired and unaltered Bank Card and/or Debit Card and/or Travel & Entertainment Card ("Card Issuers"), as are described above.
    5. "Sales Draft" and "Credit Voucher" mean both the paper and electronic formats of the required data elements necessary for a Merchant to consummate a credit card transaction using the MRC's Program. In the event Merchant submits transactions to MRC in a paper format, forms supplied by MRC shall be acceptable. If Merchant elects to provide its own paper forms, such forms must be approved by MRC prior to their use. If Merchant submits transactions generated electronically to MRC, the acceptable electronic format shall be that which is specified by MRC. In either format, the purpose of Sales Drafts and Credit Vouchers shall be for consummating sales or credit/refunds, to be charged or credited to the account of a Cardholder (as defined below), on the basis of a Card properly honored by Merchant pursuant to the terms herein.
    6. "Cardholder" means the person whose name is embossed on the face of the Card, magnetically encoded on the reverse side, and whose signature appears thereon, in the signature panel, as the authorized user.
    7. "Member Bank" means any bank which is a member of either MasterCard International, VISA USA or VISA International.
    8. "Chargebacks" means any credit card transaction returned for debiting to the Merchant's Bank Account, by MRC, because of nonconformity with Federal, State, Local or Card laws, rules and regulations, because of Cardholder dispute or for violation of any term or condition of this Agreement.
    9. "Floor Limit" means that all transactions are subject to a zero dollar ($0.00) floor limit, unless otherwise stated, requiring authorization code requests on all Card sales transactions.
    10. "Merchant" as used in this Agreement refers to any person, firm, partnership, organization or corporation falling within the meanings assigned to the term "Merchant" by any Card Issuer, Card network or Card association. The term Merchant shall include the undersigned.
    11. "Merchant Bank Account" as used in this Agreement refers to a business checking account established by Merchant, at a bank, through which Merchant authorizes MRC to settle all credit card transactions, electronically via the Automated Clearing House ("ACH").
    12. "Retrieval Request" means any request for the original, copy or electronic rendering of any Card Sales Draft or Credit Voucher.
    13. "Laundering" and/or "Factoring" refers to the presentation by Merchant, to MRC, of credit card transactions which originated from a source other than Merchant.


  2. ADVERTISING
    1. Merchant shall display, adequately, any advertising or promotional materials provided or required by MRC, to inform the public which cards will be honored at Merchant's place of business. Such displays, however, are not required if Merchant is prohibited from doing so by government regulation or is expressly exempted by MasterCard or VISA, as applicable.
    2. Merchant will not, without MRC's prior written consent, use the name, marks or logos of MasterCard, VISA, MRC or any other Card Issuer, Card network or Card association, in any advertisement or promotional material. Copies of all such materials, proposed to display such references, will be provided to MRC for approval, prior to producing and distributing such materials. MRC will not unreasonably withhold such approval.
    3. Merchant may display and advertise any other card or credit plan, not expressly referenced herein, and nothing herein is intended to restrict Merchant from so doing.
    4. All advertising media and displays supplied to Merchant, by MRC, are the property of MRC, and upon termination of this Agreement, merchant will return them to MRC.


  3. HONORING CARDS
    1. Merchant shall honor, without discrimination, all valid Cards when properly presented as payment from Cardholders for transactions, and will maintain a policy which will not discriminate among Cardholders seeking to make purchases through the use of a Card.
    2. Merchant shall perform the following:
      1. Check the date on which the Card becomes valid and the date on which it expires. Merchant shall not accept any Card that is not yet valid or that has expired;
      2. Examine all Card security features (such as the holograms, the card number prefixes printed on the face of Visa and MasterCard Cards, the Voided signature panels, embossing formats, etc.) included on the Card for any obvious signs of alterations or fraud;
      3. Examine the signature on each Card. Merchant shall not honor any Card where the signature on the sales draft does not correspond to the signature on the Card;
      4. In those cases when the magnetic stripe on the card is electronically read, the Merchant shall compare the account number embossed on the Card and/or imprinted on the Sales Draft, with the account number electronically read from the magnet stripe on the reverse of the Card by the authenticating point-of-sale ("POS") device via either the device's digital display or the electronically printed sales draft;
      5. Where optional card security features are present, Merchant shall be required to compare the embossed account number on the face of the card with the account number indent printed on the signature panel; and
      6. Merchants shall compare the first four digits of the embossed account number to the four digits printed on the face of the Card. If the printed number is present, but not the same as the first four positions of the embossed Card number, the Merchant should not honor the Card and should recover the Card by reasonable and peaceful means.
    3. Merchant shall not establish minimum or maximum transaction amounts as a condition for honoring Cards.
    4. Merchant shall not impose any surcharge on credit card transactions.
    5. Any tax required to be collected by Merchant must be included in the total transaction amount and not collected separately in cash.
    6. Nothing herein is intended to restrict Merchant from honoring other cards not contained in the Agreement or from entering into any other transaction with a Cardholder.
    7. Merchant shall not accept any Cards not valid outside the country of issuance in other than the country of issue.
    8. Merchant shall not prepare Sales Drafts(s) to refinance an existing obligation of a Cardholder to Merchant, including an obligation arising from the dishonor of a personal check.
    9. Merchant shall not record Cardholders' personal information, such as a home or business telephone number, a home or business address, or a driver's license for identification, on any Sales Drafts, as a condition for honoring Cards, unless such information is required under specific circumstances to complete the transaction, e.g. home delivery of purchase.
    10. The Merchant shall not require a Cardholder, as a condition for honoring the Card, to sign a statement that in any way waives the Cardholder's rights to dispute the transaction with the Card issuer.

  4. ACH CHECK PROCESSING RULES
    The Merchant will comply with the Operating Rules of the National Automated Clearing House Association ("NACHA"), in existence as of the date of this Agreement and as amended from time to time.

  5. BANK ACCOUNT
    Merchant will establish and maintain an account with a bank, capable of accepting Automated Clearing House ("ACH") debits and credits, in order to facilitate settlement of amounts due either party hereunder.

  6. FORMS
    Merchant will use Card processing forms and supplies, such as Sales drafts, Credit Vouchers and printer paper, which have been provided by or approved by MRC. If Merchant uses its own forms or supplies, prior written approval by MRC is required.

  7. USE OF SALES DRAFTS
    Each Card sale made by Merchant will be evidenced by a Sales Draft drawn by Merchant, against the account of the Cardholder, in favor of the Card Issuer, and all such drafts shall be on the appropriate form furnished or approved by MRC.


  8. CREDIT CARD TRANSACTIONS
    1. In effecting a credit card transaction, Merchant will, subject to the provisions of Sections 3, 8, 9, 10, and 11 contained herein this Agreement, complete the Sales Draft or Credit Voucher by:
      1. Using a suitable imprinter, to imprint legibly on each Sales Draft and Credit Voucher, the embossed information from both the Card and from the Merchant's imprinter plate. This requirement does not apply to documents resulting from transactions occurring through an electronic POS device where the account number was electronically read from the Card's magnetic stripe. For transactions completed through the use of a magnetic stripe reading POS device, Merchant shall compare the account number printed on the printer receipt, or displayed on the POS device, to the number embossed on the face of the Card. If the account number on the printer receipt or POS device's display is not the same as on the face of the Card, Merchant shall, if it can do so without a breach of the peace, keep the Card and call the MRC's voice authorization center for further instructions;
      2. Filling in the appropriate spaces thereof showing (a) the date of the sale, (b) the transaction amount, which includes applicable tax for all items purchased in the same transaction, and (c) a brief description of the goods or services in sufficient detail to identify same, unless a Sales Draft if prepared electronically by a POS device;
      3. Requiring the Cardholder to sign the Sales Draft in Merchant's presence;
      4. Obtaining an authorization code prior to consummating each transaction, when required by the established Floor Limit, and evidence receipt of the code by writing the authorization code in the appropriate space on the Sales Draft, unless completed electronically by a POS device;
      5. Completing the transaction only if the signature on the Sales Draft appears to be the same as the authorized signature on the Card. If such identification is uncertain, or if Merchant otherwise questions or has suspicions regarding the validity of the Card, Merchant will contact MRC's voice authorization center for instructions. If is understood that Merchant shall not incur liability with respect to transactions involving forged or unauthorized signatures or counterfeit cards (if prior notice has not been received), provided Merchant has exercised reasonable diligence in determining, to the best of its ability, that the Card was one issued for use by a MRC-supported Card Issuer, that the signature on the Sales Draft appears to be the same as the authorized signature on the Card, and that proper Card acceptance and authorization procedures are adhered to.
      6. Delivering to the Cardholder at the time of the transaction, a true and completed copy of the Sales Draft and/or Credit Voucher. In the case where Merchant generates internal inventory control documents (i.e. invoices, sales orders, integrated cash register receipts, etc.), and such documents contain all of the required elements of a valid Sales Draft such documents may be substituted.
    2. In effecting a Card sale, Merchant will not permit sales through the use of a Card which:
      1. Is not yet in effect, according to the effective dates thereon, if any;
      2. Is an expired Card;
      3. Was declined when an attempt to obtain authorization for the true total sale was made.
    3. Merchant shall not:
      1. Alter the total amount of a Sales Draft after the transaction has been completed and the Sales Draft signed by the Cardholder;
      2. Present Sales Drafts or Credit Vouchers to MRC which it knows, or should have known, to be fraudulent or not authorized by the Cardholder;
      3. Divide a single transaction between two (2) or more Sales Drafts to avoid an authorization code request (as required in Sections 11 and 15 hereof); or
      4. Submit credit card transactions against Merchant's own Card.


  9. SALES DRAFT WITHOUT CARD IMPRINT
    Except in the case of Mail Order, Telephone Order, and Pre-authorized transactions, no sale may be completed if the Cardholder fails to present the Card to the Merchant. Merchant assumes full responsibility for Chargebacks resulting from, but not limited to, Sales Drafts being completed without the Card being present.


  10. MAIL, TELEPHONE AND PREAUTHORIZED ORDER
    In making a Bank Card sale pursuant to a Mail Order (M.O.), Telephone Order (T.O.) or Pre-authorized Order (P.O.), Merchant will:
    1. Complete the Sales Draft as provided in Section 7 of this Agreement, mark it "M.O.", "T.O." or "P.O.", as the case may be, on the signature line of the Sales Draft, obtain the expiration date of the Bank Card for M.O., T.O. or P.O. transactions and transmit the expiration date as part of the request when obtaining the authorization code;
    2. Assume all responsibility for identification of the Cardholder and the validity of the Bank Card information;
    3. Obtain an authorization code from the MRC's voice authorization center prior to completing the Bank credit card transaction;
    4. Not present a Sales Draft to MRC for payment until the goods are delivered or the services provided to the Cardholder;
    5. Assume full responsibility for Chargebacks if the Cardholder refuses to pay for any reason;
    6. Not deliver goods or perform services covered by a pre-authorization after receiving notification that the pre-authorization is canceled, or that the Bank Card covered by the pre-authorization is not to be honored; and
    7. Retain and make available to MRC, upon request, the Cardholder's written request to Merchant for pre-authorization.


  11. ELECTRONIC COMERCE CREDIT CARD TRANSATIONS PROCESSING
    1. If Merchant is participating and/or plans to participate in electronic commerce processing of credit card transactions via the Internet and/or World Wide Web (WWW) Merchant must be in possession of a current addendum for this program.
    2. This addendum must be in place prior to the offering of the program by merchant.


  12. SECURITY INTEREST AND SETOFF RIGHTS
    If Merchant is participating in a type of business that the Card Industry and/or MRC deems "HIGH RISK," MRC may require that a cash reserve account be established as additional security. Merchant irrevocably grants MRC a lien against and security interest in any funds pertaining to the transactions contemplated by this Agreement now in MRC's possession or that may come into MRC's possession, whether due or to become due to Merchant together with the proceeds thereof. In addition to any rights granted under applicable law and not by way of limitation of such rights, Merchant authorizes MRC at any time and from time to time without notice or demand (any such notice and demand being expressly waived) to set off, to appropriate and to apply any and all such funds against and on account of Merchant's obligations under this Agreement and any other agreement with MRC or any of its affiliates for any related services, whether such obligations are liquidated, unliquidated, fixed, contingent, matured or unmatured. Merchant agrees to execute and deliver to MRC such instruments and documents that MRC may reasonably request to perfect and confirm the lien, security interest and right of set off set forth in this Agreement.


  13. RECURRING TRANSACTIONS
    If the Merchant agrees to accept a recurring transaction from a Cardholder for the purchase of goods or services which are delivered or performed periodically, the Cardholder shall complete and deliver to the Merchant a written request for such goods or services to be charged to the Cardholder's account.
    1. The Cardholder's written authorization must be retained for the duration of the recurring charges, and provided in response to any request for a copy of the Sales Draft.
    2. Merchant shall not complete an initial or subsequent recurring transaction after receiving a cancellation notice from the Cardholder.
    3. Merchant shall type or print legibly, on the signature line of the Sales draft for recurring transactions, the words "Recurring Transaction".
    4. The Cardholder's written authorization must include the amount of the transaction, frequency of the charge(s) and the duration of time which Cardholder's authorization is granted.
    5. If the Cardholder elects to renew authorization for recurring transactions, the Cardholder must complete and deliver to Merchant a new written recurring transaction request.


  14. MULTIPLE SALES DRAFTS, AND PARTIAL CONSIDERATION
    1. Merchant shall include all items of goods and services purchased in a single transaction in one total amount on a single Sales Draft; except (i)in case of purchases in separate departments of a multiple department store or; (ii) in a partial payment, delayed delivery or advanced deposit situation described in this section. Merchant shall not effect a transaction when only a part of the amount due is included on a single Sales Draft except:
      1. When the balance of the amount due is paid by the Cardholder at the time of sale in cash or by check, or both; or
      2. When the Cardholder executes two separate Sales Drafts in a delayed delivery sale. In such a case, a deposit is made by completion of one Sales Draft and payment of the balance is tendered by completion of a second Sales Draft, the latter Sales Draft being conditioned upon delivery of merchandise or performance of services. Authorization is required and separate authorization codes assigned for each Sales Draft. Merchant shall note on the Sales Draft the words "deposit" or "Balance", as appropriate. The Sales Draft labeled "Balance" shall not be presented until the goods are delivered or services performed. Merchant agrees not to divide a single sale transaction between two or more Sales Drafts to avoid an authorization code request.
    2. When a single purchase is completed and two or more Sales Drafts are prepared for the purpose of creating separate Cardholder receipt, an authorization code shall be obtained for the amount corresponding to each Sales Draft.
    3. In cases involving multiple Cards or other combination of payment methods accepted for a single purchase, each payment segment shall require separate authorization for the corresponding amount.


  15. RECOVERY OF CARDS
    Merchant will use its best efforts to recover any Card and return it to MRC if:
    1. Merchant is advised by MRC's authorization center to retain it, or
    2. Merchant has reasonable grounds to believe Card is counterfeit, fraudulent or stolen.

    Reasonable and peaceful means only are to be used in retrieving such Cards or counterfeit Cards. Nothing in this section shall be construed to require the Merchant to have a physical confrontation or incur risk of harm in order to recover a Card.

    Many, but not all, Card Issuers offer a reward for the authorized and peaceful retrieval of their Cards. MRC will pay Merchant for any rewards collected from Card Issuers by MRC. MRC will not be responsible for the payment of rewards to Merchant that MRC is unable to collect from Card Issuers.


  16. PRESENTMENT, ACCEPTANCE AND PAYMENT OF SALES DRAFTS
    Merchant shall present each Sales Draft to MRC, either electronically or in paper format, based on the procedures and criteria established by the Card Issuers, at the close of each Merchant business day, except that Merchant shall not present a Sales draft until purchased goods have been shipped or the services have been performed, and Merchant has otherwise performed all of its principal obligations to the Cardholder in connection with the transaction. Merchant may not present to MRC, directly or indirectly, any Sales drafts which were not originated as a result of Cardholders entering into transactions directly with Merchant. Any such activity involving third-party Sales Drafts is considered "Laundering" and/or "Factoring" of Sales Drafts and is expressly prohibited hereunder and under Card Issuers rules.

    Upon Merchant's delivery of valid Sales Drafts to MRC, and subject to any warranties provided by merchant; Chargeback rights of Card Issuers and Cardholders; and the evaluation of any unusual risk associated with any of Merchant's Sale Drafts submitted to MRC for processing, MRC will give Merchant credit for the face amount of such Sales Drafts in a time frame equal to MRC's receipt of credit from Card Issuers. Such credit will be given by crediting the Merchant's Bank Account.

    If, during the daily evaluation of Merchant's prior Sales Draft deposits, MRC has any reason to question or otherwise be suspicious of any of the credit card transactions contained therein, MRC, at its discretion, may delay the crediting of funds to Merchant, for the affected deposits, until such time as MRC can research the nature of its suspicion to MRC's satisfaction. In the event of such an occurrence, MRC will notify Merchant of the delay by either telephone, or if unable to reach Merchant by telephone, by regular mail or facsimile.


  17. CHARGEBACKS
    MRC shall have the right, at any time, to charge to the Merchant's Bank Account, the full amount of any incoming Chargebacks, or other types of returned items, that are deemed valid and proper by any of the Card Issuers, Card associations, Card networks or any other appropriate regulatory agencies, including, but not limited to the following reasons:
    1. The Sales Draft, or any material information on the Sales Draft such as the account number, expiration date of the Card, Merchant description, transaction amount or date, is illegible, inaccurate or incomplete, or is not delivered to MRC within the required time limits;
    2. Except in the case of an M.O., T.O., P.O. or electronic POS transaction, the Sales Draft does not contain the imprint of a Card that was valid, effective and unexpired on the transaction date, or the signature of the Cardholder;
    3. The transaction was one for which a prior authorization code was not obtained, or a valid authorization code is not correctly and legibly printed on the Sales Draft:
    4. The Sales Draft is a duplicate of an item previously submitted to and processed by MRC, or is one of two or more Sales Drafts generated in a single transaction in violation of Section 11;
    5. The Cardholder disputes the execution of the Sales Draft, the sale, delivery, quality or performance of the merchandise or services purchased, or alleges that a credit adjustment was requested and refused, or that a credit adjustment was issued by Merchant but not posted to Cardholder's account;
    6. The price of the merchandise or services shown on the Sales Draft differs from the amount shown on the copy of the Sales Draft delivered to the Cardholder at the time of the transaction;
    7. MRC reasonably determines that Merchant has violated any term, condition, covenant, warranty or other provision of this Agreement in connection with the Sales Draft or the transaction to which it relates; or
    8. MRC reasonably determines that the Sales Draft is fraudulent, or that the related transaction is not a bona fide transaction in Merchant's ordinary course of business, or is subject to any claim or illegality, cancellation, recision, avoidance, or offset for any reason whatsoever, including, without limitation, negligence, fraud or dishonesty on the part of Merchant or Merchant's agents or employees.

    Merchant may not deliver Sales Drafts to MRC which have been returned as Chargebacks to Merchant. Unless basis for the Chargeback has been corrected, and Cardholder acceptance has been obtained.

  18. CHARGEBACK MONITORING PROGRAMS
    In the event that Merchant exceeds a one (1) percent Chargeback to interchange volume ratio in two (2) out of three (3) months for consumer Dispute Chargeback (CDCs) (CDCs are currently identified as those falling within reason codes; 23, 24, 30, 41, 53, 56, 61, 85 and 90), or three (3) percent Chargeback to interchange volume ratio for all incoming Chargebacks, merchant will be defined as a "REVIEW" merchant. On notification of REVIEW merchant status, Merchant will supply MRC with a business plan showing how the reduction of CDCs will occur. In the event that Merchant is unable to reduce CDCs below one (1) percent within 120 days and maintain them at that level for a six (6) month probationary period, MRC or Visa may terminate merchants' agreement to process sales. In this event, Merchant will pay MRC for any fine or charge levied on MRC or Merchant as a result of such classification or notification. The parameters of this section may be amended from time to time, as a result of action by card associations or networks.


  19. AUTHORIZATION
    In any of the following instances, Merchant will obtain an authorization code before completing the transaction and submitting a Sales Draft to MRC and Merchant shall type or print legibly on the Sales Draft the number evidencing the authorization code so obtained:
    1. All credit card transactions require an authorization code. Merchant's Floor Limit is $0 (zero).
    2. a Card is presented to Merchant, but the Sales Draft cannot be imprinted with the Cardholder's embossed Card information or electronically printed with the encoded information from the Card's magnetic stripe. In such an instance, if authorization is received, in addition to all other data elements required for completion of a Sales Draft, Merchant will note on the Sales Draft evidence of ascertaining the Cardholder's true identity. Merchant shall accept full responsibility for Chargebacks on all such Sales Drafts.
    3. The Cardholder presents an unsigned Card to Merchant. Merchant shall request a "Code 10" authorization code indicating a suspicious transaction. If Merchant normally obtains authorization codes through the use of a POS device, the Merchant shall call the MRC's voice authorization center and request a "Code 10" authorization code. Merchant shall request a "Code 10" authorization code when there is substantial belief that the Card may be counterfeit or stolen, or that the transaction is in some manner suspicious. Card Issuers request that their Cardholders sign their Cards upon receipt.
    4. If the signature panel on the Bank Card is blank, in addition to requesting a "Code 10" authorization code, the Merchant must do all of the following:
      1. Review positive identification to determine that the user is the Cardholder. Such identification must consist of a current, official government identification document (such as passport or driver's license) that bears the Cardholder's signature and photograph.
      2. Indicate such positive identification (including any serial number and expiration date) on the Sales Draft; and
      3. Require the Cardholder to sign the signature panel of the Bank Card prior to completing the transaction.
    5. The Transaction involves suspicious or unusual circumstances. The Merchant shall request a "Code 10" authorization code from MRC's voice authorization center. Obtaining an authorization code does not assure that a Sales Draft will not result in a Chargeback to the Merchant.

    Authorization codes must only be obtained from MRC's authorization center. Authorization codes obtained from any other source will in no way provide Merchant with any protection whatsoever.

    If a negative authorization response is received, Merchant shall not retry the authorization code request or attempt additional authorization code requests for lesser dollar amounts.


  20. ACH TRANSACTION APPROVAL
    The Merchant is subject to applicable law when initiating ACH transactions. For consumer debit transactions, the Merchant agrees to obtain, retain, and provide copies of consumer authorizations in compliance with Regulation E. Merchant will initiate no Entry after such authorization has been revoked. The Merchant will retain the original or a copy of each notice and other document required to be given to the customer under the ACH CHECK PROCESSLING RULES for a period of not less than two (2) years, or for six (6) years after termination or revocation of such authorization and will, upon request of Processor, furnish such original or copy to Processor for any purpose authorized by the Rules.


  21. RETURN MERCHANDISE AND ADJUSTEMENTS: CREDIT VOUCHERS
    Merchant shall deliver all Credit Vouchers to MRC, either electronically or in paper format, within one (1) day following date of issue. Merchant shall sign and date each Credit Voucher and include thereon a brief description of the goods returned, services terminated or canceled or refunded or adjustments made, together with the amount of the credit in sufficient detail to identify the transaction. Merchant shall imprint or legibly reproduce on each Credit Voucher, the embossed or encoded information from the Card and from the Merchant's imprinter plate or a POS device. Merchant shall deliver to Cardholder a true and complete copy of the Credit Voucher.

    If Merchant maintains a policy of permitting refunds, exchanges, returns or adjustments for cash customers, Merchant shall maintain the same policy for persons making purchases through use of a Card. Merchant may restrict its refund return policy as to any credit card transaction, provided, that the Merchant discloses its policy at the time of the transaction by printing an appropriate notice (such as "No Refunds or Exchanges") on all copies of Sales Draft, in close proximity to the space provided for the Cardholder's signature, prior to the Cardholder signing the Sales Draft.


  22. ACH REJECTS OR ERRORS
    Merchant will reimburse with good and collected funds any Debit Entry that is rejected or any adjustment memorandum on the date of such rejection or memorandum. If the Merchant discovers that any Entry it has initiated was in error, it must immediately notify MRC. It shall be the responsibility of the Merchant to notify its affected customers of any errors. MRC has the right to reject any Entry if Merchant has failed to comply with any of its payment obligations. The Merchant authorizes MRC to directly charge the Merchant’s Settlement Account for fees, to charge the Merchant’s Settlement account to settle credit entries initiated, and offset any debit entries initiated which are rejected or returned.

  23. DISCLOSURE AND STORAGE OF CARDHOLDER INFORMATION
    Merchant shall not, without the Cardholder's prior written consent, sell, purchase, provide or otherwise disclose Cardholder's account information or other Cardholder personal information to any third party other than Merchant's agents and Card processing organizations for the purpose of assisting Merchant in its business or as required by law.

    Merchant shall store in an area with access limited to select personnel, and prior to discarding, shall destroy in a manner rendering data unreadable, all material containing Cardholder account numbers and Card imprints such as Sales Drafts, Credit Vouchers, and carbons.

  24. CASH PAYMENT / CASH DEPOSIT
    Merchant shall not:
    1. Accept any cash payments from a cardholder for merchandise or services, the total sum of which has been included on a Sales Draft.
    2. Use a Sales Draft to accomplish a cash advance or withdrawal, as such transactions are expressly forbidden.
    3. Accept cash or other instruments from a Cardholder and correspondingly prepare and deposit a Credit Voucher for the purpose of effecting a credit to the Cardholder's Card account.


  25. ACH SETTLEMENT
    Merchant must provide a Settlement Account held by a domestic financial institution, from which all transactions originated for company shall be settled. All credits originated by Merchant must be prefunded by Merchant three (3) business days prior to settlement. All Debit entries originated by Merchant will be credited to Merchant’s Settlement Account four (4) business days following settlement. All returns received for Merchant shall be debited to Merchant’s Settlement Account immediately upon receipt of such returns. MRC is authorized to debit the account named below to collect fees and/or any moneys owed on returned Entries and reserve the right to debit Merchant’s Settlement Account for a period of ninety (90) business days after service termination for the explicit purpose of reclaiming moneys owed Processor for any fees or returns. The Merchant assumes all responsibility for reconciling the Merchant’s Settlement Account and Reserve Account on a regular and timely basis. Any discrepancies must be reported to MRC within thirty (30) days of the alleged error.


  26. SUSPECTED TRANSACTIONS
    In the event that MRC suspects credit card transactions that were submitted to MRC by Merchant for processing and credit to Merchant to be improperly accepted, prepared and/or processed through MRC's depository program, and a potential violation of any of the terms of this Agreement, including all addenda, amendments, revisions and periodic disclosures thereto, MRC may retain Merchant's funds equal to the face amount of the suspected improper transactions, for a period not to exceed 270 days.


  27. GENERAL
    Merchant will:
    1. Preserve all records pertaining to a credit card transaction, Sales Draft or Credit Voucher, as may be required by law, and in no event for less than three (3) years from the transaction date thereof, and permit MRC to examine, verify and copy the same at any reasonable time.
    2. Comply with all requirements of the Consumer Credit Protection Act and other applicable consumer credit laws and regulations, as they pertain to Merchant, and comply with all laws and Card Issuer Rules and regulations applicable to each credit card transaction.
    3. Execute, file, and record such statements, notices and certificates as MRC may reasonably request to preserve and protect its interests.
    4. If Merchant assigns any of its obligations under this Agreement, to any agent, representative or to a consultant of Merchant (including the obligation to deliver Sales Drafts and credit Vouchers within the time limits provided), assume full responsibility for the actions of such agent, representative or consultant.
    5. Notify MRC of any change in the type of business conducted by Merchant involving credit card transactions (i.e. new mail order business / new partnerships / telemarketing sales / change of ownership / change of name).

    Merchant hereby grants MRC a security interest in any Merchant Bank Account to secure all obligations of Merchant to MRC under this Agreement. MRC may enforce security interest without notice or demand. The security interest granted hereunder shall continue, notwithstanding termination of this Agreement and MRC shall at all times be authorized to debit any amounts due hereunder to any Merchant Bank Account.

    Any notice required or permitted to be given hereunder, must be given in writing by depositing such notice with a courier, return receipt requested, to the addresses as shown on the signature page.


  28. AMENDMENT
    This Agreement may be amended by MRC, by written notice to Merchant, not less than ten (10) days prior to the effective date of such amendment, except for service fees, or other fee adjustments which will become effective thirty (30) days after written notice to Merchant, unless Merchant gives MRC written objection thereto, prior to the effective date.


  29. TERM
    This Agreement will have an initial term of 24 months commencing on the date of execution, unless terminated prior, in accordance with the provisions described below. Thereafter, this Agreement will have consecutive renewal terms of one (1) year each unless either party gives written notice to the other of its intent not to renew this Agreement at least sixty (60) days prior to the end of the then current initial or renewal term. At any time during, upon expiration, or termination of the initial term hereof, or any extension, modification or renewal thereof, MRC shall have the right of first refusal to provide Card processing services (or its equivalent) to the Merchant on the same terms and conditions as may be proposed by alternative providers, including but not limited to technological advances and enhanced system functionality.


  30. TERMINATION
    In the event of default by either party, the other party may give written notice of termination of this Agreement to the defaulting party. If the defaulting party has not cured all defaults hereof within thirty (30) days of written notice of said default(s). Notice of default and notice of termination shall be considered to be received when placed with a courier service for delivery to the other party. Upon termination, both parties shall be relieved from all continuing contractual obligations to the other party, except for Merchant's grant to MRC of a security interest in the Merchant Bank Account and excluding Card related liabilities and obligations of either party, pursuant to the rules and regulations of the various Card Issuers. Card associations and Card networks, including but not limited to the right of MRC to continue charging Merchant for valid Chargebacks for the term and to the extent provided for in such rules and regulations. The right of Merchant to process sales as specified in this Agreement and to use advertising displays, authorized promotional materials, Sales Drafts, Credit Vouchers, and other items and materials developed for use in the Card Program, under this Agreement, shall cease upon termination of this Agreement.


  31. MERCHANT INDEMNITY
    1. Indemnification and Release. Merchant hereby indemnifies and releases MRC, and agrees to defend and hold MRC 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 relating to:
      1. Any Sales Draft or Credit Voucher tendered to, processed by, held by, handled by or refused by MRC or its correspondent, whether interposed by way of defense, dispute, Chargeback, offset, counterclaim or otherwise:
      2. Any non-compliance by Merchant with this Agreement, applicable laws, or rules of any Card Issuers or organization; and
      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.
    2. Limitation of Liability
      1. MRC's sole liability to Merchant under this Agreement shall be to correct, to the extent reasonably practicable, any data in which errors have been caused by MRC, provided Merchant notifies MRC of any such error within ten (10) days after such error occurs and the expense to the MRC of correcting such data shall constitute MRC's only responsibility in connection with any such errors.
      2. No claim for damages for any performance or non-performance of services by MRC under this Agreement shall exceed the amount of the fees and charges paid to MRC in connection with the credit card transaction which is the subject of the alleged failure.
      3. MRC shall have no other liability whatsoever to Merchant and Merchant hereby expressly waives any claim for indirect, special, incidental or consequential damages or lost profits or earnings. Without limitation of the foregoing, MRC shall not be liable to Merchant for delays in providing authorization codes or data transmissions. Merchant acknowledges that any claims or losses hereunder are commercial in nature and subject to waiver and release.

    All disputes between Merchant and any Cardholder relating to any credit card transaction, shall be settled directly between Merchant and Cardholder. Merchant shall indemnify and hold harmless MRC, MRC's agents, MRC's processing centers, the Card Acquirers, the Card Issuers, Card associations and Card networks, any claim or suit brought by any Cardholder as to any transaction with Merchant.


  32. ASSIGNMENT
    Merchant may not assign any rights or duties created by this Agreement without MRC's express prior written consent. A transfer of control of majority interest in Merchant's organization shall be deemed to be such an assignment. Such an unauthorized assignment will immediately terminate this Agreement, effective upon MRC's discovery of the assignment. MRC may assign or transfer this Agreement and all rights and duties hereunder at any time.


  33. FEES
    1. Merchant will pay to MRC, the Processing and Transaction Fees defined in Merchant Application Agreement, as stated on page.
    2. Application Processing and Transaction Fees, based on the rates specified in Merchant Application Agreement, Page 2, will be imposed on a monthly basis for the total of Sales Drafts presented by Merchant to MRC, as of the last day of each month. Merchant agrees to pay the Processing and Transaction Fees to MRC and authorizes MRC to charge the amount thereof to the Merchant's Bank Account.
    3. In the event of any increase in MasterCard or VISA Interchange or Assessment Fees or any other fees that are assessed to MRC by any Card Issuer, Card association or Card network, all such increases will be charged to Merchant with a thirty (30) day written notice.
    4. MRC will periodically review Merchant Chargeback activity and reserves the right to either assess additional Chargeback fees or terminate this Agreement when and if Merchant's Chargeback activity exceeds established industry standards for similar Merchants in similar industries.
    5. In the event that Merchant does not process credit card transaction in the manner specified by MRC, referred to as the "Required Method" of processing, MRC may, at its own discretion, charge Merchant the additional Processing and/or Interchange fees associated with those transactions not adhering to the Required Method of processing.


  34. RETRIEVAL OF DOCUMENTS
    1. Merchant shall, upon request of MRC, and for a period of thirty-six (36) months from each transaction date, cause Merchant's records to be searched, and shall provide to MRC the original or a legible photocopy of requested Sales Drafts, if so requested by MRC, to support Merchant's Sales Drafts submitted to MRC and to help defend Merchant against related incoming Chargebacks.
    2. Merchant shall deliver such retrieval documents to MRC within five (5) calendar days of such request. For purposes of defining the time limitation, the day the request should have been received by Merchant, under normal delivery, shall count as the first of the five (5) calendar days.


  35. ACH WARRANTIES
    Merchant represents and warrants that (a) the Merchant has complied with ACH CHECK PROCESSING RULES with respect to each Entry, (b) each Entry shall in no way violate any Federal, State or local stature of regulation pertaining to electronic fund transfers, including the Electronic Fund Transfer Act and Regulation E, and all such other laws and regulations. In the event of any breach of any warranties, the Merchant will indemnify and defend MRC and hold them harmless at Merchant's cost and expense from and against any and all losses, claims, demands, damages, actions, including reasonable attorney's fees, expenses and costs, except for losses solely attributable to the MRC's own gross negligence or willful misconduct.

    MRC shall not otherwise be responsible for any action taken, allowed or omitted by or under this Agreement for anything arising therefrom, or for any liability, loss, claim or damage arising from an act of God, from delay occasioned in transit of data or processed work or from other cause of event beyond their control and make no representations or warranties with respect to the legal effect or sufficiency, under any Federal, State or local statute or regulation or other law, of any forms, documents or other matters provided by Processor from time to time in connection with this Agreement, and disclaims any expressed or implied warranties in connection therewith, including any warranties or fitness for a particular purpose or use and any warranties of merchantability.


  36. FORCE MAJEURE
    MRC shall not be liable in any event for delays in processing or other nonperformance, caused by such events as fires, telecommunications failures, strikes, riots, war, nonperformance of vendors, suppliers, or of third party processors or transmitters of information, acts of God, or any other causes over which MRC has no control.      
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