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MERCHANT SERVICES AGREEMENT

(For Large Merchants)

Dated: July 10, 2014. Any subsequent changes to this Merchant Services Agreement will be dated and can be found and read in the corresponding Merchant Services Agreement on the ProPay website.

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BANK DISCLOSURE

Merchant Services Provider Contact Information:  ProPay, Inc. (“ProPay”); 3400 N. Ashton Blvd., Suite 200, Lehi, UT 84043.  Application Inquiry Phone:  801-341-5300; Customer Service Phone:  866-573-0951.  http://www.propay.com 

Member Bank Information:  Wells Fargo Bank, N.A. (“Bank”); 1200 Montego Way, MAC A0347-023, Walnut Creek, CA 94598.  Phone: 925-746-4167.  

Important Bank Responsibilities:

1.   Bank is the only entity approved to extend acceptance of Card Association (as defined below) products directly to a Merchant.

2.   Bank must be the principal (signer) to the Merchant Services Agreement.  

3.   Bank is responsible for and must provide settlement funds to Merchant. 

4.   Bank is responsible for all funds held in reserve that are derived from settlement.

5.   Bank is responsible for educating Merchants on pertinent Card Association Rules with which Merchants must comply; but this information may be provided to you by ProPay.

Merchant Information:  the sole proprietor or entity receiving the Merchant Services (“Merchant”).

Important Merchant Responsibilities:

1.  Ensure compliance with cardholder data security and storage requirements.

2.  Maintain fraud and chargebacks below Card Association thresholds.

3.  Review and understand the terms of the Merchant Services Agreement.

4.  Comply with Card Association Rules.

The responsibilities listed above do not supersede terms of the Merchant Services Agreement and are provided to ensure the Merchant understands some important obligations of each party and that the Bank is the ultimate authority should the Merchant experience any problems.

You may download “Visa Regulations” from Visa’s website at:  http://corporate.visa.com/about-visa/our-business/operating-regulations.shtml

You may download “MasterCard Regulations” from MasterCard’s website at:  http://www.mastercard.com/us/merchant/support/rules.html

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This Merchant Services Agreement (this “Agreement”) is entered into by and among ProPay, Bank, and Merchant.  This Agreement shall become effective on the date (“Effective Date”) Merchant agreed to the Payment Services Agreement.  The Payment Services Agreement is incorporated into this Agreement by reference.  ProPay, Bank, and Merchant are each a “Party” and are, collectively, the “Parties.

WHEREAS, Bank, as a member of VISA, U.S.A., Inc. (“VISA”) and MasterCard Worldwide (“MasterCard”), provides transaction processing and other services and products in connection with financial services provided by VISA and MasterCard, and ProPay provides transaction processing and other services and products in connection with financial services provided by American Express Company (“American Express”), and Discover Financial Services (“Discover”) (collectively, the “Card Associations”); and

WHEREAS, ProPay, as an agent of Bank, provides payment card processing services; and

WHEREAS, Merchant is engaged in the business of selling goods and services, and desires that Bank and ProPay provide the merchant services (the “Merchant Services”) on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual promises made herein and other valuable consideration, receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

1.  COMPLIANCE WITH ASSOCIATION REGULATIONS.  Each Party: (i) acknowledges that its actions in connection with Transactions are subject, at all times, to the rules, regulations, requirements and guidelines of the Card Associations, as the same may be modified, amended or replaced from time to time (collectively, the “Association Regulations”); (ii) represents and warrants that it is familiar with those portions of the Association Regulations that are relevant to it; and (iii) covenants to take such actions and do such things in connection with or related to each of its Transactions  to ensure (A) that such Transactions are processed and handled in a manner that complies, in full, with the Association Regulations and (B) that it otherwise complies, in full, with the Association Regulations that are relevant to it.  As used in this Agreement, “Transaction(s)” means one or more payment transactions using a Card Association-branded credit, debit or pre-paid card issued by a member of such Card Association with respect to which Merchant desires ProPay and Bank to provide Merchant Services.

2.  INCORPORATION OF ADDITIONAL TERMS AND PROVISIONS. 

  a.  The Parties acknowledge and agree that those provisions, terms and conditions required by any Card Association to be incorporated into or otherwise contained in this Agreement pursuant to the terms of the Association Regulations are hereby incorporated into this Agreement in full, and shall be binding upon the Parties as if set forth in full herein.  Without limiting the generality of the foregoing, the Parties specifically acknowledge and agree that this Agreement is deemed to include the provisions required by: (i) the Visa International Operating Regulations relating to the Merchant Chargeback Monitoring Program, the Merchant Agreement Requirements, and Merchant Card Acceptance, as the same may be amended or replaced from time to time (the “Visa Regulations”); and (ii) Section 5.1 and Sections 5.6 through 5.12 of the MasterCard Rules, as the same may be amended or replaced from time to time (the “MasterCard Rules”).  Copies of the Visa Regulations (http://corporate.visa.com/about-visa/our-business/operating-regulations.shtml) and the MasterCard Rules (http://www.mastercard.com/us/merchant/pdf/BM-Entire_Manual_public.pdf) are available for review online.  In the event of any conflict between the terms of this Agreement and the terms of the Association Regulations, the terms of this Agreement shall prevail.  Merchant: (i) represents and warrants that it has reviewed in full the contents of the Visa Regulations and MasterCard Rules applicable to it (in particular, those sections referenced above); and (ii) covenants that it will, from time to time, review the contents of the Visa Regulations and MasterCard Rules to ensure it remains aware of, and is capable of performing, its duties and obligations under this Agreement.  For purposes of Section 1 and this Section 2, references in the Association Regulations to any type of “Transaction” shall be deemed, as relevant, to be limited to a Transaction under this Agreement.

  b.  In addition to the foregoing, the Parties acknowledge and agree that the terms and provisions of the following policies, documents and agreements (as set forth, at any relevant point in time, at http://www.propay.com/legal-agreements/, as the same may be amended from time to time by ProPay with or without the provision of prior notice to Merchant) are a part of this Agreement and are incorporated into this Agreement by this reference, as if fully set forth herein: (i) the Electronic Funds Transfer Agreement; (ii) the Error Resolution Policy; (iii) the Privacy Policy; (iv) the Electronic Communications Agreement; (v) the Terms of Use; and (vi) the API License Agreement (if relevant).

3.  ACCEPTING CARDS.  Merchant shall accept payment cards (“Cards”) to effect Transactions in accordance with the applicable Association Regulations.  All disputes between Merchant and any cardholder relating to any Transaction shall be resolved between the Merchant and the cardholder.  ProPay bears no financial responsibility for any disputed Transaction.  

4.  TRANSACTIONS; PAYMENTS.

  a.  Obtaining Authorizations and Completing Transactions.  Merchant shall obtain (using equipment meeting specifications determined from time to time by ProPay) an authorization for each Transaction: (i) in accordance with the terms of Appendix A-1, if such Transaction is effected through the provision by ProPay of ProtectPay services (which services are provided through a separate agreement between Merchant and ProPay); or (ii) in accordance with the terms of Appendix A-2, if such Transaction is effected without the provision by ProPay of ProtectPay services.  Merchant shall comply in full (and shall cause each third party or other agent used by Merchant in connection in any way with any Transaction to comply in full) with all Association Regulations (including, without limitation, the Payment Card Industry Data Security Standards (“PCI DSS”) and all applicable federal, state, provincial and local laws, rules, regulations and guidelines, and relevant judicial, regulatory and administrative interpretations and determinations (collectively with the Association Regulations and PCI DSS, “Applicable Law”) in connection with the commencement and completion of, and all other actions associated with, each Transaction, and in connection with the sale or provision of the goods, services or anything else of value upon which the Transaction is based or otherwise in the performance of its obligations hereunder.  In the event the Merchant’s Transactions are not effected through the provision by ProPay of ProtectPay, upon approval of authorization of a Transaction (as ProPay or Bank reasonably shall request), ProPay shall provide the Merchant Services described above to allow Merchant to be paid for such Transaction, as it was authorized and otherwise in accordance with the terms of this Agreement.

  b.  Processing Limits.  Bank and ProPay may, from time to time in their sole discretion, establish (or modify) and impose on Merchant limits regarding: (i) the number of Transactions or aggregate dollar volume of Transactions Merchant may cause to be processed within a defined period of time; and (ii) the maximum dollar amount of any single Transaction.  Without limiting the generality of the foregoing, Bank and ProPay reserve the right to reverse and/or decrease any limit previously established.

  c.  Payment in Connection with Settled Transactions.

    i.  Bank shall credit those funds to which Merchant is entitled in connection with settled Transactions to a non-interest-bearing, aggregated account at Bank in the name of Bank, used by ProPay for the receipt of funds from settled transactions from a group of merchants (including Merchant) (the “ProPay Pool Account”).  The ProPay Pool Account is maintained by Bank for the clearing and settlement of Transactions of all ProPay Merchants, including those to Merchant’s ProPay Account. “ProPay Account” refers to a subaccount of the ProPay Pool Account for tracking Transactions of Merchant.  The balance of Merchant funds in Merchant’s ProPay Account is provided by ProPay to Merchant and can be accessed by Merchant online on ProPay's website.  All amounts owing under this Agreement will remain in the Merchant’s ProPay Account until: (i) such funds are released by Merchant at its discretion, as evidenced on ProPay's web site; or (ii) Merchant informs Bank to release such funds to the Merchant Checking Account designated by Merchant in accordance with the Electronic Funds Transfer Agreement.  Merchant acknowledges that its obligation to ProPay for all amounts owed under this Agreement arise out of the same Transaction as Bank's obligation to place funds in the ProPay Pool Account with respect to Transactions processed pursuant to the terms of this Agreement for Merchant’s ProPay Account.

    ii.  Notwithstanding Section 4(c)(i) above, under no circumstance will ProPay be responsible for processing credits or adjustments related to Transactions not originally processed by ProPay.  All Transactions and deposits are subject to audit and final verification by ProPay, and may be adjusted for inaccuracies.  Merchant acknowledges that all credits provided to Merchant are provisional and subject to chargebacks and adjustments in accordance with the Association Regulations, whether or not a Transaction is charged back by the Card issuer.

    iii.  No interest is paid to Merchant on funds in Merchant’s ProPay Account.  The funds in Merchant’s ProPay Account are eligible for FDIC pass-through insurance up to the maximum amount as defined by applicable FDIC regulations, from time to time.

    iv.  Unless caused by the negligence of ProPay, its employees or agents, Merchant assumes any and all risk of loss and/or damages that arises out of or is the result of any theft, embezzlement or unauthorized use of any funds in Merchant’s ProPay Account or the Merchant Checking Account, and agrees to indemnify and hold ProPay and Bank harmless from any and all claims, demands and causes of action, including attorneys’ fees and costs, that arise out of or are the result of any such theft, embezzlement or unauthorized use.

    v.  Merchant may utilize multiple ProPay Accounts to allow for easier reporting of Transactions to Merchant.  Such additional ProPay Accounts require approval by ProPay and Bank and are subject to the terms of this Agreement.  Merchant is responsible for any additional fees or costs associated with having multiple ProPay Accounts.  These additional ProPay Accounts (i) collectively, count toward underwriting limits for Merchant, as such collective limits are established by Bank or ProPay under the Agreement; and (ii) may only be used by Merchant for Transactions in the ordinary course of its business and in accordance with Applicable Law.

5.  FEES.  Merchant agrees: (i) to pay to ProPay the fees established as consideration for the provision of the Merchant Services, together with any and all taxes and other charges imposed by any governmental authority in connection with the provision of the Merchant Services; (ii) that ProPay may collect payment of such fees and taxes from Merchant directly out of the total dollar amount of any Transaction (“Gross Transaction Proceeds”) received by ProPay in the ProPay Pool Account, or at the option of ProPay, by depositing any Gross Transaction Proceeds received by ProPay in the Merchant’s ProPay Account and then debiting any such fees and taxes from either the Merchant’s ProPay Account or the Merchant Checking Account; and, (iii) that the fees set forth in this Agreement are subject to modification by ProPay providing at least 30 days’ advanced notice to Merchant.

6.  CHARGEBACKS AND DISPUTES.  

  a.  Merchant is liable to ProPay for all Transactions returned by Merchant’s customers to ProPay for whatever reason, otherwise known as “Chargebacks.”  Merchant is liable to ProPay for the total amount of any sale for which the cardholder disputes the validity of the sale.  Merchant will pay ProPay on demand for the amount(s) of all Chargebacks and associated fees.  ProPay shall have the right to charge back any disputed charge, prior to contacting Merchant, if ProPay determines that it has sufficient information to resolve the disputed charge in favor of the cardholder.  Merchant authorizes ProPay to deduct, recoup, or offset from incoming Transactions and to debit Merchant’s ProPay Account and the Reserve Account to recover any Chargeback.  Merchant will cooperate with ProPay in complying with the Association Regulations regarding Chargebacks.  ProPay may suspend accepting Transactions or releasing funds represented by Transactions to Merchant until Merchant reimburses ProPay for all unpaid Chargebacks.  Merchant acknowledges that regardless of its refund or return policy, Chargebacks will be handled in accordance with this Agreement and VISA and MasterCard regulations regarding returns and chargebacks.

  b.  ProPay may refuse to accept any Transaction or revoke its prior acceptance of a Transaction in the following circumstances: (i) the Transaction was not made in compliance with all terms and conditions of this Agreement and the Association Regulations; (ii) the cardholder disputes liability to ProPay for any reason, including but not limited to those Chargeback rights enumerated in Association Regulations; or, (iii) the Transaction was not directly between Merchant and the cardholder.  Merchant will pay ProPay, as appropriate, any amount previously credited to Merchant’s ProPay Account for a Transaction not accepted by ProPay or, where accepted, it is subsequently revoked.

7.  RESERVE ACCOUNT.  

  a.  As a condition of providing the Merchant Services to Merchant, Bank and/or ProPay may require Merchant to: (i) open and maintain with Bank and/or ProPay, at all times during the Term of this Agreement and for a period of not more than 180 days after any termination or expiration of this Agreement (the “Reserve Account Holding Period”), an account (collectively (if more than one account is so created), the “Reserve Account”) in order to provide to Bank and ProPay security (A) in connection with the payment of any amount owed by Merchant hereunder (including, without limitation, under Section 5 or Section 11(a)) and (B) against any costs, losses, assessments, fines, fees, penalties and/or expenses suffered or incurred by Bank or ProPay, or expected or anticipated to be suffered or incurred by Bank or ProPay, absent a payment by or on behalf of Merchant, in any case in connection with or arising out of the provision of Merchant Services to Merchant, any chargeback or return effected in connection with any Transaction or any act or omission by Merchant (collectively, “Merchant-Owed Amounts and Merchant-Caused Losses”); (ii) deposit into and maintain in the Reserve Account, at all times during the Reserve Account Holding Period, an amount reasonably determined from time to time by Bank and/or ProPay, in light of their assessment of actual or potential Merchant-Owed Amounts and Merchant-Caused Losses (the “Reserve Account Funding Amount”).

  b.  Bank or ProPay may, at any time, require that the amount on deposit in the Reserve Account be increased and shall have sole discretion as to the amount thereof from time to time.  Bank and ProPay shall have the right to debit Merchant’s funds in Merchant’s ProPay Account or funds ProPay would be otherwise obligated to pay Merchant in accordance with the terms of this Agreement to establish, increase, or maintain funds in the Reserve Account.

  c.  Bank and ProPay each may, with notice, from time to time, withdraw from the Reserve Account such amount(s) as may be necessary or appropriate: (i) to pay to any third party an amount owed to such third party in connection with any Merchant-Owed Amount or Merchant-Caused Loss; (ii) to reimburse and/or indemnify Bank or ProPay as a result of or in connection with any Merchant-Owed Amount or Merchant-Caused Loss; or (iii) to pay to Bank or ProPay any other amount owed by Merchant to ProPay or Bank under this Agreement or under any other agreement between Merchant and ProPay and/or Bank.

  d.  Immediately following any withdrawal by either Bank or ProPay of any amount from the Reserve Account pursuant to the terms of this Agreement, or any increase of the Reserve Account Funding Amount, Merchant shall, upon notice from ProPay, cause the balance in the Reserve Account to be restored to the then-current Reserve Account Funding Amount.  In addition to the foregoing, Bank and ProPay may take any action that may be necessary or desirable to cause the amount held in the Reserve Account to equal the Reserve Account Funding Amount, including, without limitation, debiting any funds credited to Merchant’s ProPay Account or initiating a debit to the Merchant Checking Account.

  e.  Merchant hereby grants to Bank and ProPay a security interest in any Gross Transaction Proceeds held in the ProPay Pool Account, in Merchant’s ProPay Account and in the Reserve Account, and any and all proceeds of any of the foregoing, to secure the due and punctual performance by Merchant of all of its obligations to Bank and/or ProPay hereunder.  Bank or ProPay may enforce such security interest without notice or demand.  Upon request of Bank or ProPay, Merchant will execute one or more financing statements or other documents to perfect this security interest.  

  f.  Bank and ProPay shall have the right of recoupment and set off.  Merchant hereby acknowledges that Bank and ProPay have the right to offset any outstanding or uncollected amounts owed to Bank or ProPay by Merchant from:  (i) any amounts owed to Merchant that they would otherwise be obligated to deposit into Merchant’s ProPay Account; (ii) any other amounts ProPay may owe Merchant under this Agreement or any other agreement; and (iii) Merchant’s ProPay Account.

8.  DEBITS FROM THE MERCHANT CHECKING ACCOUNT.  Merchant hereby authorizes each of Bank and ProPay to initiate, from time to time and pursuant to the Electronic Funds Transfer Agreement, debits to the Merchant Checking Account in such amounts as may be necessary or appropriate to allow Bank and ProPay to be paid any amount either is owed by Merchant pursuant to the terms of this Agreement in the event Gross Transaction Proceeds or the amounts credited to or on deposit in Merchant’s ProPay Account or the Reserve Account are not sufficient to pay any such amount so owed to Bank or to ProPay.  The foregoing authorization shall remain in full force and effect until the expiration of the Reserve Account Holding Period.  In the event Merchant changes its designated Merchant Checking Account as set forth herein, this authorization will apply to Merchant’s subsequent Merchant Checking Account.

9.  REPRESENTATIONS AND WARRANTIES OF MERCHANT.  Merchant represents and warrants to Bank and to ProPay as follows:

  a.  Merchant is duly organized and in good standing under the laws of the jurisdiction of its organization, and is duly qualified to conduct business in each jurisdiction where failure to do so would have a material adverse effect on its business.

  b. The execution and delivery of this Agreement by Merchant, and the performance by Merchant of its obligations hereunder: (i) are within Merchant’s corporate powers; and (ii) have been duly authorized by all necessary corporate action on the part of Merchant.

  c.  This Agreement, when executed by Merchant, will be executed by a duly authorized officer of Merchant, with authority to execute this Agreement on Merchant’s behalf and will constitute a valid and binding obligation of Merchant, enforceable in accordance with its terms, and does not violate any law, rule or regulation relevant to Merchant or conflict with any other agreement or obligation entered into or assumed by Merchant.

  d.  Merchant is in compliance with all Applicable Law in the operation of its business and in the provision and/or sale of all goods and services that are the subject of each Transaction.

  e.  All of the information provided by Merchant to ProPay and/or Bank in connection with receiving the Merchant Services is true, accurate and complete in all material respects.

  f.  There is no action, suit or proceeding pending or, to Merchant’s knowledge, threatened that, if decided adversely, would impair Merchant’s ability to carry on its business substantially as now conducted or that would materially adversely affect Merchant’s financial condition or operations, or its ability to perform its obligations under this Agreement or pay its debts.  

  g.  Merchant has never been placed on the MasterCard MATCH system or the Combined Terminated Merchant File.

  h. All Transactions are bona fide transactions and no Transaction will involve the use of any payment card for any purpose other than the purchase of goods or services from Merchant or involve the cardholder obtaining cash from Merchant unless allowed by the Association Regulations and agreed to in writing by ProPay.

10.  ADDITIONAL COVENANTS OF MERCHANT.

  a.  Merchant shall immediately notify ProPay if there are any changes to its business, ownership or the nature of its operations that make the representations and warranties or information provided to Bank or ProPay inaccurate, incomplete, incorrect or misleading.  Merchant shall submit Transactions to ProPay and Bank solely for goods and services that fit the description of those goods and services provided by Merchant in applying for the Merchant Services.

  b.  Merchant shall notify Bank and ProPay if it intends to allow any third-party service provider or other agent to have access to cardholder data (as defined by the Visa Regulations), and shall ensure that each such third party complies in full with all Applicable Law in connection with its access to or use of any such cardholder data.

  c.  Merchant shall not present for processing or credit, directly or indirectly, any transaction not originated as a result of a Transaction directly between Merchant and a cardholder or any transaction Merchant knows or should know to be fraudulent or not authorized by the cardholder.  Perpetrators of fraudulent transactions will be referred by ProPay, in its sole discretion, to the appropriate law enforcement agency.  Merchant agrees that Bank or ProPay may, within its discretion, suspend the disbursement of Transaction funds for any reasonable period of time required to investigate suspicious or unusual activity.  ProPay shall have no liability for any losses Merchant may attribute to any suspension of the disbursement of funds.

  d.  Merchant’s refund polices for purchases made, or payment obligations satisfied, with a Card must be at least as favorable as Merchant’s refund policy for purchases made, or payment obligations satisfied, with any other form of payment.  Merchant will disclose its refund policy prior to or at the time of the purchase and in accordance with Applicable Law.

  e.  Merchant shall not at any time conduct its business in any manner that directly violates the High Risk Transactions/Acceptable Use Policy (the “Acceptable Use Policy”) found at http://www.propay.com/legal-agreements/high-risk-acceptable-use-policy/, which is incorporated herein by this reference.  Bank and ProPay reserve the right to revise the Acceptable Use Policy from time to time without providing notice.  Merchant’s presentation to ProPay of High Risk Transactions (as defined in the Acceptable Use Policy) or Transactions that otherwise violate the Acceptable Use Policy may result in any one or more of the following: (i) refusal of an authorization to process Transactions; (ii) suspension of the provision of Merchant Services; and/or (iii) immediate termination of this Agreement.

  f.  Merchant shall cause the Merchant Checking Account to remain open at all times during the Term of this Agreement and during the Reserve Account Holding Period.

  g.  Merchant shall timely reconcile all issues related to the Merchant Services, and shall submit any dispute to ProPay, in writing, no later than sixty (60) days after the date on which any item with respect to which such dispute relates is initially posted to Merchant’s ProPay Account or otherwise appears in any report provided by ProPay or Bank to Merchant.  Merchant will be deemed to have waived any dispute with respect to which it fails to provide to ProPay timely notice, as required by this Section 10(g).

  h. Merchant and its principals shall, as proscribed by ProPay, provide to ProPay annual financial statements, tax returns and other financial, customer and company information as requested from time to time by ProPay or Bank.  ProPay may, in its reasonable discretion, require that Merchant provide to ProPay current financial statements and other information more frequently than annually.

  i.  Merchant hereby authorizes ProPay and Bank to make such inquiries and obtain such information (including, by way of example and without limitation, credit reports from one or more credit bureaus and/or information from one or more customers of Merchant, contact information with respect to which Merchant shall provide to ProPay upon ProPay’s request) regarding Merchant, its principals and its business operations as ProPay or Bank deem necessary or appropriate in connection with the business relationship created by this Agreement.  Merchant also hereby authorizes ProPay and Bank to share any such information with third parties (including, without limitation, the Card Associations, other financial institutions seeking to underwrite Merchant and other entities directly or indirectly involved in providing the Merchant Services).

  j.  Merchant shall direct any and all concerns and/or questions it may have regarding the Merchant Services or any Card Association to ProPay, who shall be responsible for managing any disputed transaction, charge, credit or other Merchant service issue.

  k. Merchant shall ensure that only authorized individuals access Merchant’s ProPay Account, the Merchant Checking Account and the ProPay website to, among other things, effect transfers of funds to and/or from such accounts.  Merchant shall be solely responsible for any loss that arises out of any unauthorized individual gaining access to Merchant’s ProPay Account, Merchant Checking Account or ProPay website using Merchant’s ID number and PIN, and shall indemnify and hold Bank and ProPay harmless from and against any such loss, unless such unauthorized individual gained such access as a result of a breach of security relating to the ProPay website without the participation in any way of Merchant.

11.  INDEMNIFICATION; LIMITATION OF LIABILITY.

  a.  Merchant shall indemnify and hold Bank, ProPay, each relevant Card Association and their respective owners, affiliates, officers, directors or employees (collectively, the “Indemnified Parties”) harmless from and against all claims, demands, losses, damages, liability, actions, costs, judgments, arbitral awards, assessments, fines, fees and expenses (including, without limitation, reasonable attorneys’ fees, expenses, arbitration costs and court costs) suffered or incurred by any Indemnified Party arising out of, related to or in connection with: (i) any breach by Merchant of any of its duties or obligations under this Agreement; (ii) any Transaction or any chargeback, return or credit associated with any Transaction; (iii) any act or omission by Merchant or any of Merchant’s employees or agents in connection with any payment card (including, but not limited to, any fraudulent activity associated with any payment card); (iv) any violation by Merchant of, or any failure by Merchant to comply with, any Applicable Law, including, without limitation, any Association Regulation or the PCI DSS; (v) any liability for any loss, costs or fees incurred by Merchant that are the result of any debit by ProPay from Merchant’s ProPay Account or the Merchant Checking Account; and (vi) any return of any good or any price adjustment or other dispute with, or claim by, a customer (whether or not such dispute or claim is valid).

  b.  EXCEPT AS OTHERWISE SPECIFICALLY SET FORTH IN THIS AGREEMENT, BANK AND PROPAY DISCLAIM ALL REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE MERCHANT SERVICES, INCLUDING WITHOUT LIMITATION, ANY AND ALL WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, QUALITY, SUITABILITY, NON-INFRINGEMENT AND OTHERWISE (REGARDLESS OF ANY COURSE OF DEALING, CUSTOM, OR USAGE OF TRADE), AND REGARDING ANY OTHER SERVICES PROVIDED UNDER THIS AGREEMENT OR ANY GOODS PROVIDED INCIDENTAL TO SUCH SERVICES.  EACH PARTY ACKNOWLEDGES THAT IT HAS NOT ENTERED INTO THIS AGREEMENT IN RELIANCE UPON ANY WARRANTY OR REPRESENTATION EXCEPT THOSE SPECIFICALLY SET FORTH HEREIN.

  c.  UNDER NO CIRCUMSTANCES SHALL BANK’S OR PROPAY’S FINANCIAL RESPONSIBILITY FOR ITS FAILURE TO PERFORM ANY OBLIGATION UNDER THIS AGREEMENT EXCEED THE TOTAL FEES PAID TO PROPAY UNDER THIS AGREEMENT (NET OF CARD ASSOCIATION FEES, THIRD PARTY FEES, INTERCHANGE ASSESSMENTS, AND FINES) FOR THE SIX MONTHS PRIOR TO THE TIME THE LIABILITY ASSOCIATED WITH SUCH FAILURE (OR FAILURES) AROSE.  EXCEPT AS OTHERWISE PROVIDED FOR IN THIS AGREEMENT, IN NO EVENT WILL ANY PARTY, ITS RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, OR AFFILIATES, BE LIABLE FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL, PUNITIVE DAMAGES, LOST PROFITS OR ANY LOSS, THEFT, DISAPPEARANCE, OR DAMAGE TO DATA TRANSMITTED ELECTRONICALLY IN CONNECTION WITH THIS AGREEMENT.

12.  CONFIDENTIAL INFORMATION.

  a.  ProPay’s Obligations.  ProPay shall not disclose information relating to Transactions other than to Bank, other relevant financial institutions, the relevant Card Association(s) and its employees, agents and other third parties that need to know such information in connection with the provision of the Merchant Services or otherwise to allow ProPay to perform its obligations under this Agreement.  ProPay’s obligations under this Section 12(a) shall terminate with respect to any Transaction information that becomes public other than as a result of its disclosure by ProPay.

  b.  Merchant’s Obligations.

    i.  Merchant agrees that the terms of this Agreement, the processes used by ProPay in connection with providing the Merchant Services, all communications concerning the Merchant Services provided by ProPay pursuant to the terms of this Agreement, and all cardholder data are the confidential information of ProPay.  Merchant agrees that neither it nor any of its employees, agents, representatives or independent contractors will sell or disclose any of such information to any person or entity that is not a party to this Agreement without the prior written consent of ProPay.  Merchant shall treat each document provided by ProPay, any financial institution or any Card Association relating to this Agreement as confidential and proprietary, and shall protect such document with the same degree of care as Merchant would protect its own confidential and proprietary information.

    ii.  Except to the extent specifically permitted or required by any applicable Association Regulation or this Agreement, or except as otherwise approved in advance in writing by ProPay, Merchant shall not disclose any information relating to ProPay, any network used to process Transactions, any financial institution or any Transaction to any person or entity other than ProPay or Bank, employees, agents or independent contractors of ProPay or Bank, or those of Merchant’s employees who have a specific need to know such information for a purpose relating Merchant’s obligations in connection a Transaction (such as responding to a cardholder inquiry, resolving a cardholder dispute, or investigating a possible processing error), or as otherwise specifically required by law.

13.  TRADEMARK LICENSES.

  a.  License of ProPay’s Trademarks.  Subject to the terms and conditions contained herein, ProPay hereby grants to Merchant the right to use, reproduce, publish, perform and display the trademarks and logos used by ProPay: (i) on Merchant’s web site in connection with its offering of payment options to its customers; and (ii) in promotional and marketing materials and electronic and printed advertising, publicity, press releases, newsletters and mailings about or related to any of the services offered by ProPay.

  b. License of Merchant’s Trademarks.  Subject to the terms and conditions contained herein, Merchant hereby grants to ProPay and its affiliates the right to use, reproduce, publish, perform and display trademarks and logos used by Merchant: (i) in connection with the development, use, reproduction, modification, adaptation, publication, display and performance of the ProPay services offered and/or accessible through Merchant’s web site; and (ii) in promotional and marketing materials and electronic and printed advertising, publicity, press releases, newsletters and mailings about or related to any of the services offered by ProPay used by Merchant.

  c.  Use of Trademarks.  Each of Merchant and ProPay shall strictly comply with all standards imposed or established by the other from time to time in connection with the use of its trademarks.  In addition, neither Merchant nor ProPay shall create a combination mark consisting of one or more trademarks and/or logos of both Merchant and ProPay.  All uses of the other Party’s trademarks and logos shall inure to the benefit of the Party owning such trademark or logo.  ProPay and Merchant each from time to time may limit, restrict, update or change those trademarks and logos subject to the licenses set forth above by providing written notice to the other Party.

  d.  Trademark Restrictions.  Neither ProPay nor Merchant shall: (i) use any trademark or logo of the other Party except as expressly authorized in this Agreement; (ii) take any action inconsistent with such Party’s ownership of its trademarks or logos or any associated registrations, or attack the validity of any such trademarks or logos; (iii) use any trademark or logo of the other Party in any manner that would indicate it is using such trademark or logo other than as a licensee of the other Party; or (iv) assist any third party do any of the foregoing.

  e.  Use of Card Association Trademarks.  During the Term, Merchant may use the trademarks and logos of the Card Associations solely as permitted by, and solely pursuant to the terms of, the Association Regulations.

14. TERM AND TERMINATION.

  a.  This Agreement will become effective on the Effective Date and will remain in effect for so long as Merchant uses the Merchant Services (the “Term”); provided, however, that any Party may terminate this Agreement by delivering written notice to the other Parties of such termination no later than ninety (90) days prior to the end of the Initial Term or then-current Renewal Term, as the case may be.

  b.  If (i) there is a default by a Party (the “Defaulting Party”) of any representation or warranty it has made, or in the performance of any of its obligations, under this Agreement and such default shall continue for a period of thirty (30) days after receipt of written notice thereof (setting forth in reasonable detail the nature of the default) from any other Party, or (ii) (A) a Party (also referred to as the “Defaulting Party”) makes a general assignment for the benefit of creditors, (B) a receiver for all or substantially all of the property of the Defaulting Party is appointed and not removed within thirty (30) days after such appointment, (C) the Defaulting Party files a petition for bankruptcy or reorganization under the provisions of any applicable bankruptcy laws, or (D) the Defaulting Party declares its insolvency or becomes insolvent, then, in any such case, either of the other Parties (the “Non-Defaulting Party”) shall have the right to terminate this Agreement immediately upon written notice to the Defaulting Party.  In addition to the foregoing, either Non-Defaulting Party may terminate this Agreement immediately upon written notice to the Defaulting Party upon the second default (that is substantially similar to a prior default) by the Defaulting Party of any obligation under this Agreement.

  c.  In addition to the foregoing, either Bank or ProPay may terminate this Agreement, effective immediately, by providing written notice to Merchant under any of the following circumstances (in the event of any conflict between this Section 14(c) and Section 14(b), the terms of this Section 12(c) shall prevail):

    i.  If Merchant has or obtains another merchant account with a financial institution to process transactions effected through the use of payment cards issued by one or more Card Associations and: (A) Merchant fails to provide immediate notice to ProPay of such account; or (B) ProPay does not approve (in its sole discretion) such additional account.

    ii.  Merchant fails to comply with any Association Regulation or otherwise violates any Applicable Law or takes any action that creates harm or loss of goodwill to the Card Associations (as determined by Bank or ProPay, in their sole discretion).

    iii.  Bank or ProPay determines that any change to Merchant’s business, ownership or the nature of its operations reported by Merchant pursuant to Section 10(a) or otherwise discovered by Bank or ProPay creates, in any way, additional risk, or is unacceptable, to Bank or ProPay.

    iv.  If: (i) any Card Association or Bank disapproves of Merchant, and notifies ProPay of such disapproval; (ii) any Card Association requests or requires Bank or ProPay to terminate this Agreement; (iii) Bank requests or requires ProPay to terminate this Agreement; or, (iv) any circumstances arise or events occur, following which Bank or ProPay is required, pursuant to any Association Regulation, to terminate this Agreement.

  d.  Upon any termination of this Agreement:

    i.  All of Bank’s and ProPay’s obligations to process Transactions (other than Transactions submitted for processing prior to the effective date of termination) immediately shall terminate, and Merchant immediately shall cease submitting any requests to ProPay and Bank to process payment card or other transactions.

    ii.  All amounts owed by Merchant to Bank and ProPay shall become immediately due and payable.

    iii.  Bank and ProPay may make any adjustment they determine (in their sole discretion) is appropriate to the Reserve Account Funding Amount, and may take such actions as may be necessary or desirable to cause the amount held in the Reserve Account to equal the Reserve Account Funding Amount (as so adjusted), including, without limitation, debiting any funds credited to Merchant’s ProPay Account or initiating a debit to the Merchant Checking Account. 

    iv.  The obligations of Merchant under this Agreement for Transactions processed by ProPay and Bank and for fees, fines, expenses or other obligations incurred, arising from or relating to acts or omissions that occurred prior to the effective date of termination, shall survive any termination of this Agreement.

    v.  Following the expiration of the Reserve Account Holding Period, ProPay and Bank (if relevant) shall cause the funds remaining in the Reserve Account and/or Merchant’s ProPay Account (if any) to be transferred to Merchant, in accordance with this Agreement and Merchant’s reasonable instructions.

    vi.  If such termination follows or is the result of any failure of Merchant’s business (including, without limitation, any bankruptcy, insolvency or other suspension of Merchant’s business), Merchant agrees that it shall not sell, transfer, or disclose any materials that contain cardholder account numbers, personal information or transaction information to third parties, all of which information Merchant either shall return to Bank or provide acceptable proof of destruction to Bank.

    vii.  ProPay and Merchant each shall terminate all use of the trademarks and/or logos of the other Party under any license granted pursuant to Section 13, and Merchant shall terminate its use of any Card Association trademark or logo, unless it has permission to continue such use pursuant to a separate agreement.

  e.  All payment obligations of the Parties that arose prior to such termination shall survive any termination of this Agreement.  In addition, the terms of Sections 5, 7, 8, 11, 12, 13 and 15, and any other provision of this Agreement that, by its terms, is intended to survive any termination of this Agreement, shall so survive such termination.

15.  MISCELLANEOUS PROVISIONS.

  a.  Notices.  Any notices or other communications required or permitted by this Agreement shall be in writing and shall be delivered either by personal delivery, by a nationally recognized overnight courier service, by facsimile, electronic mail or other electronic means, by first class mail or by certified or registered mail, return receipt requested, addressed as set forth above or to such other address as any Party shall have designated to the others by written notice given in the manner set forth above.  Notices and approvals required under this Agreement shall be deemed given: one day after sent, if sent by overnight courier; when delivered and receipted for, if hand delivered; when received, if sent by facsimile, electronic mail or other electronic means or by first class mail; or when receipted for (or upon the date of attempted delivery where delivery is refused or unclaimed), if sent by certified or registered mail, return receipt requested.

  b.  Assignment and Transfer.  This Agreement may be assigned by Bank or by ProPay (with the consent of Bank), but shall not be assigned by Merchant, directly or by operation of law, without the prior written consent of ProPay.  Any attempted assignment in contravention of this Section 15(b) shall be null and void.

  c.  Waiver.  Except as set forth in Section 10(g), no Party hereto shall be deemed to have waived any of its rights, powers or remedies hereunder unless such waiver is made in writing, signed by such Party.  Upon any such waiver of a past default, such default shall cease to exist.  No such waiver shall extend to any subsequent or other default or impair any right relating thereto except to the extent expressly so waived.  No waiver of any provision of this Agreement shall be deemed nor shall constitute a waiver of any other provision of this Agreement, whether or not similar, and no waiver shall constitute a continuing waiver.  No course of dealing among the Parties, and no delay or forbearance in exercising any right hereunder, shall imply or otherwise operate as a waiver of any right of a Party. 

  d.  Relationship of Parties.  The Parties intend that this Agreement shall be considered a contractual relationship.  ProPay and the Merchant and do not intend that this Agreement shall result in the creation of a joint venture, general partnership or any similar form of organization or agency relationship.

  e.  Execution.  This Agreement shall become effective as of the Effective Date.  Merchant expressly accepts the terms of this Agreement by any of the following methods: (i) by clicking “accept,” “agree,” or similar action in an online form referring to this Agreement; (ii) by signing, whether manually or electronically, an application or agreement referring to this Agreement; or (iii) after receiving notice from ProPay that Merchant is subject to this Agreement based on processing thresholds, by (A) submitting a Card Transaction to ProPay for processing, or (B) failing to notify ProPay within 10 days that Merchant does not accept this Agreement.  If Merchant does not agree to the terms and conditions of this Agreement, Merchant must not use the Merchant Services.

  f.  Further Assurances.  The Parties agree that, upon request, they each shall do such further acts and deeds, and shall provide, execute, acknowledge, deliver and/or record such books and records and such other documents and instruments as may be reasonably requested by any other Party or necessary or appropriate from time to time to effectuate, evidence, confirm or carry out the intent and purposes of this Agreement or to confirm compliance by a Party to the terms and conditions of this Agreement.

  g.  Severability.  If any one or more of the provisions contained in this Agreement shall in any jurisdiction be held or determined by a court having jurisdiction to be invalid, illegal or unenforceable for any reason, such provision shall be deemed modified so as to be enforceable to the maximum extent permitted by law consistent with the intent of the Parties as herein expressed, and such invalidity shall not affect the remaining provisions of this Agreement, which shall continue in full force and effect.

  h.  No Remedies Exclusive.  No right or remedy granted pursuant to the terms of this Agreement shall be deemed to be exclusive of any other right or remedy granted herein or any other right or remedy now or hereafter available at law or equity.  All rights and remedies granted pursuant to the terms of this Agreement, and all rights and remedies now or hereafter available at law or equity, shall be deemed to be cumulative and not alternative, and may be exercised concurrently, independently or successively.

  i.  Governing Law; Jurisdiction.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF UTAH, EXCLUSIVE OF ITS RULES REGARDING CONFLICTS OF LAWS.  The Parties further agree that all performances due and transactions undertaken pursuant to this Agreement shall be deemed to be due or have occurred in the City of Lehi, Utah County, State of Utah, and that the entry into and performance hereof by Merchant shall be conclusively deemed to be the transaction of business within the State of Utah.  In the event of any disputes under this Agreement, Merchant and all Guarantors hereby consent to and will be subject to the exclusive jurisdiction of the courts of the State of Utah, Salt Lake County.  In the event any controversy or claim between or among the Parties, their agents, employees, representatives, or affiliates shall arise in any judicial or legal proceeding, each Party hereby waives its right to trial by jury of such controversy or claim.  In addition, any Party may elect to have all decisions of fact and law determined by a referee appointed by the court in accordance with applicable state reference procedures.  Judgment upon any award rendered shall be entered in the court in which any such reference proceeding was commenced.

  j.  No Third Party Beneficiaries.  This Agreement is for the exclusive benefit of the Parties, and no other person or entity, including any affiliate or creditor of any Party, shall have any right or claim against any Party by reason of this Agreement or shall be entitled to enforce any provision of this Agreement against any Party.

  k.  Entire Agreement.  This Agreement and the attachments hereto or referenced herein constitute the entire agreement among the Parties, and supersede all prior oral and written negotiations among the Parties, with respect to the subject matter hereof.  Each Party acknowledges that it has not entered into this Agreement in reliance upon any representation or warranty other than those specifically set forth herein.

  l.  Headings.  The headings listed after each section number in this Agreement are inserted for convenience only, do not constitute a part of this Agreement and are not to be considered in connection with the interpretation or enforcement of this Agreement.

  m.  Force Majeure.  No Party shall be liable for failing to perform, or for any delay in performing, its obligations under this Agreement when such failure or delay is due to force majeure, provided the Party claiming the existence of force majeure gives notice to the other Parties within fourteen (14) days of the commencement or continuance of the circumstances that constitute such force majeure.  The term “force majeure” shall include any cause or contingency beyond the control of the Party concerned.  No Party shall be relieved from performing any pending obligations under the Agreement when the existence of force majeure has been eliminated or terminated.

  n.  Review of Books and Records.  ProPay and Bank shall have the right, at its cost and expense and by providing not less than thirty (30) days’ prior written notice to Merchant, to review those books and records of Merchant that pertain to the performance by Merchant of its obligations under this Agreement, for the purpose of confirming or assessing compliance with the terms and conditions of this Agreement.  Any such review shall be conducted during normal business hours at a place reasonably designated by Merchant.

  o.  Amendment.  This Agreement may be amended, modified, or revised at any time by ProPay without notice.  While ProPay may notify Merchant as the Agreement is modified, it is Merchant’s sole responsibility to review and maintain familiarity with the Agreement, and Merchant is bound by any changes.  The amendments to this Agreement will become effective and binding upon Merchant when the amendments are published to ProPay’s website (www.propay.com).  In the event Merchant does not agree to the aforementioned amendments and does not wish to be bound the terms and conditions thereto, Merchant shall provide written notice to ProPay.  If Merchant does not agree to the terms of the amendment, Merchant’s account will be terminated and closed.  Notwithstanding the foregoing, any fee or rate increase imposed on ProPay by one or more of the Associations, a sponsor bank, a payment processor, or a service provider may be passed on to Merchant and shall be effective upon the date of the receipt of notice of such increase by Merchant without giving rise to the right to terminate.

  p.  Costs and Expenses.  The prevailing party shall reimburse, upon demand, the defaulting party for all costs and expenses, including attorneys’ fees, expended or incurred by the prevailing party in any arbitration, mediation, judicial reference, legal action, or otherwise in connection with: (i) the negotiation, preparation, amendment, interpretation or enforcement of this Agreement; (ii) collecting any sum owed to the prevailing party hereunder; (iii) any proceeding for declaratory relief, any counterclaim to any proceeding, or any appeal; or (iv) the protection, preservation or enforcement by the prevailing party of any right hereunder. 

 

APPENDIX A-1

MERCHANT SERVICES WITH PROTECTPAY

1. Cardholder Identification.  When a Merchant utilizes the ProtectPay API it is recommended that the Merchant identify the Cardholder accepting payment for goods or services.  Also, as part of the Cardholder identification process, when the Merchant uses the ProtectPay PMI or SPI, ProPay will provide a means to collect and utilize the expiration date, and Zip Code or Postal Code from the Cardholder's billing address.  It is also highly recommended that Merchant obtain the CVV2, CVC2 or CID information, as applicable, from each Card.  However, Merchants must never store this value permanently.  “Cardholder” means a person possessing a Card and purporting to be the person in whose name the Card is issued.  

2. AUTHORIZATION

2.1 Authorization Required for Transactions.  In the event that the expiration date is not stored in ProtectPay, the Merchant must obtain the Card expiration date and forward it to ProPay as part of the authorization request.  A Merchant shall not submit an authorization on behalf of any third party.

2.2 Effect.  Authorizations are not a guarantee of acceptance or payment of a Transaction and do not waive any provision of the Merchant Services Agreement or otherwise validate a fraudulent transaction or a transaction involving the use of an expired Card.  ProPay may, in its sole discretion, refuse to authorize any Transaction.  Neither ProPay, nor agents acting on its behalf will be responsible if authorization for a Transaction is not given.

3. PRESENTMENT OF SALES TRANSMITTALS

3.1 Delivery and Retention of Sales Transmittals.  Merchant will retain a Merchant copy of the Transaction or credit memorandum for at least 25 months following the date of completion of the Transaction (or such longer period as the Association Regulations may require).  When a Merchant retains this information, Merchant must do so in accordance with the applicable Association Regulations, security and confidentiality requirements as referenced in the Merchant Services Agreement.

3.2 Electronic Transmission.  Merchant will enter at the ProPay web site, or transmit via API to ProPay, the data necessary to settle a transaction no later than 72 hours from the date the Merchant initiates the Transaction.  Upon request by ProPay, information regarding a sales or credit Transaction transmitted with a computer or magnetic stripe reading terminal will be transmitted by the Merchant to ProPay or its agent in the form ProPay from time to time specifies, or as required under Association Regulations.  If ProPay requests a copy of a Sales Transmittal, Merchant’s record of return or refund to be credited to cardholder’s account (“Credit Voucher”) or other Transaction evidence, the Merchant will provide it within three (3) business days following the receipt of the request.  Merchant acknowledges that ProPay shall have Chargeback rights with respect to any Transaction or Credit Voucher for which the Merchant fails to provide such documents within such time period.

4. Provisional Credit.  Under no circumstance will ProPay be responsible for processing credits or adjustments related to Transactions not originally processed by ProPay.  All Transactions and deposits are subject to audit and final verification by ProPay, and may be adjusted for inaccuracies.  Merchant acknowledges that all credits provided to Merchant are provisional and subject to Chargebacks and adjustments in accordance with the Association Regulations, whether or not a transaction is charged back by the Card issuer.

5. Reprocessing.  Notwithstanding any authorization or request from a customer, Merchant will not reenter or reprocess any Transaction that has been charged back by a customer to the Merchant.

6.  Double Billing.  Any double billing by a Merchant (attempting authorization on a Card twice for the same Transaction) shall be a breach of this Agreement and may be cause for immediate termination of this agreement.

 

APPENDIX A-2

MERCHANT SERVICES WITHOUT PROTECTPAY

1. Cardholder Identification.  Merchant will identify the cardholder when accepting payment for products sold or services rendered.  As part of the cardholder identification process, Merchant will obtain the expiration date, and ZIP Code or Postal Code from the cardholder's billing address.  It is also highly recommended that Merchant obtain the CVV2, CVC2 or CID information, as applicable, from each Card.  However, the Merchant shall not store this element permanently.  Merchant will not honor any Card if: (a) the Card has expired; or, (b) the account number embossed on the Card is listed on a current Electronic Warning Bulletin file.

2. AUTHORIZATION

2.1 Authorization Required for all Transactions.  Merchant will obtain authorization via ProPay's web site, touch-tone phone system, Application Program Interface (“API”) or other method acceptable to ProPay prior to completing any Transaction.  Merchant will follow any instructions received during the authorization process.  Upon receipt of authorization, Merchant may consummate only the Transaction authorized and must note on the Merchant’s record of cardholder purchase the authorization number.  Where authorization is obtained, Merchant will be deemed to warrant the true identity of the customer as the cardholder.  Transactions will be deemed invalid on Cards that are expired, whether or not an authorization has been obtained.  Merchant must obtain the Card expiration date and forward it as part of the authorization request.  Merchant shall not submit an authorization on behalf of any third party.

2.2 Effect.  Authorizations are not a guarantee of acceptance or payment of a Transaction and do not waive any provision of the Merchant Services Agreement or otherwise validate a fraudulent transaction or a transaction involving the use of an expired Card.  ProPay may, in its sole discretion, refuse to authorize any Transaction.  Neither ProPay, nor agents acting on its behalf will be responsible if authorization for a Transaction is not given.

3. PRESENTMENT OF SALES TRANSMITTALS

3.1 Forms.  Merchant will transmit to ProPay necessary information to document each Transaction.  Each Transaction will contain: (a) Merchant name and account identifier; (b) the Card expiration date; and, (c) the total amount of the sale (including any applicable taxes) or credit transaction.  ProPay may also require addition information, such as: (a) ZIP Code of customer’s billing address; (b) CVV2 code or the equivalent; (c) a brief description of the goods or services involved; (d) the transaction authorization number; and, (e) if applicable, adjacent to the signature line, a notation that all sales are final.

3.2 Delivery and Retention of Transactions.  Merchant will retain the merchant copy of the Transaction or credit memorandum for at least 25 months following the date the Merchant initiates the Transaction.  When Merchant retains this information, Merchant must do so in accordance with the applicable Association Regulations, security and confidentiality requirements as referenced in the Merchant Services Agreement.

3.3 Electronic Transmission.  Merchant will enter at the ProPay web site, or transmit via API to ProPay, the data related to a Transaction no later than 72 hours from the date the Merchant initiates the Transaction.  Information regarding a sales or credit Transaction transmitted with a computer or magnetic stripe reading terminal will be transmitted by Merchant to ProPay or its agent in the form ProPay from time to time specifies, or as required under Association Regulations.  If ProPay requests a copy of a Transaction, Merchant’s record of return or refund to be credited to cardholder’s account (“Credit Voucher”) or other Transaction evidence, Merchant will provide it within three (3) business days following the request.  Merchant acknowledges that ProPay shall have Chargeback rights with respect to any Transaction or Credit Voucher for which Merchant fails to provide such documents within such time period.

4. Provisional Credit.  Under no circumstance will ProPay be responsible for processing credits or adjustments related to Transactions not originally processed by ProPay.  All Transactions and deposits are subject to audit and final verification by ProPay, and may be adjusted for inaccuracies.  Merchant acknowledges that all credits provided to Merchant are provisional and subject to Chargebacks and adjustments in accordance with the Association Regulations, whether or not a transaction is charged back by the Card issuer.

5. Reprocessing.  Notwithstanding any authorization or request from a customer, Merchant will not reenter or reprocess any Transaction that has been charged back by a customer to the Merchant.

6.  Double Billing.  Any double billing by a Merchant (attempting authorization on a Card twice for the same Transaction) shall be a breach of this Agreement and may be cause for immediate termination of this agreement.

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