Terms And Conditions

This Merchant Processing Application and Agreement is entered into by and among Processor, Bank and You and shall have an “Effective Date” as of the earlier of (i) the date You are first assigned a Merchant Identification Number by Processor and/or Bank or (ii) the first date that Processor provides You with one or more card processing Services. The Bank is a principal member of Mastercard International Inc. (“Mastercard”) and Visa USA, Inc. (“Visa”). Processor participates in programs affiliated with the Card Networks. This Agreement contains the terms and conditions under which Processor and Bank will provide card processing Services. Processor will not accept any unilateral alterations of or strike-outs to this Agreement and, if made, any such unilateral alterations or strike-outs shall not apply or be valid. PLEASE READ THIS AGREEMENT CAREFULLY, PAYING PARTICULAR ATTENTION TO THE FOLLOWING SECTIONS WHICH CONTAIN IMPORTANT TERMS: (1) SECTION 7K, WHICH REQUIRES YOU TO PROVIDE PROCESSOR WITH WRITTEN NOTIFICATION OF ANY OBJECTIONS, CLAIMS OR DISPUTES RELATING TO ANY FEES, CHARGES, EXPENSES, DEDUCTIONS, SETOFFS, AMOUNTS PAID OR AMOUNTS DUE WITHIN 60 DAYS; (2) SECTION 9A, WHICH AUTHORIZES PROCESSOR TO DEBIT YOUR ACCOUNT FUNDS OWED TO IT; (3) SECTION 12, WHICH CONTAINS LIMITATIONS OF OUR LIABILITY TO YOU AND WARRANTY DISCLAIMERS; (4) SECTION 16E.iv, RELATING TO TERMINATION FEES; AND (5) SECTION 19, WHICH REQUIRES MANDATORY ARBITRATION OF CLAIMS UNLESS YOU OPT-OUT WITHIN 30-DAYS FROM THE EFFECTIVE DATE AND ALSO PROHIBITS CLASS ACTIONS.

1. Definitions. The following definitions shall apply throughout this Agreement:
   1. “Agreement” refers to these Terms and Conditions, along with any schedules or addenda hereto, including, without limitation, the related Application submitted by You.
   2. “AMEX” and “American Express” refer to American Express Travel Related Services Company Inc. and its parents, subsidiaries, related companies, and affiliates.
   3. “Application” refers to the merchant processing application and agreement You submitted to Processor and that is accepted by Processor.
   4. “Authorization” refers to approval by, or on behalf of, the Issuer to validate or approve a transaction. Authorization does not guaranty that a transaction is not fraudulent or will not be charged back.
   5. “AVS” refers to an address verification service. An AVS match does not guarantee that a transaction is valid.
   6. “Bank” refers to Oriental Bank, a Puerto Rico commercial bank, or any other Member Bank that sponsors Processor and is an assignee or successor in interest to Oriental Bank.
   7. “Batch” refers to a single submission to Processor of a group of transactions for settlement.
   8. “Card” and “Cards” refer to Credit Cards and Debit Cards, both individually and collectively.
   9. “Card Networks” refers to Mastercard, VISA, AMEX, and the Other Networks, both individually and collectively.
   10. “Card Network Fees” refers to the specific fees, assessments or charges imposed by each Card Network to either the Bank or Processor (including, without limitation, assessment and dues or surcharges), other than Interchange, with respect to: (a) any Card transactions submitted by You to such Card Network and/or (b) your right or ability to accept any such Card Network’s Cards, in each case, whether on a fixed, per item, transaction or volume basis. From time to time, Processor will publish a current list of applicable Card Network Fees at www.dynamicspayments.com/cardfees, provided, however, that the failure by Processor to include or itemize any Card Network Fee in any such published lists shall not relieve You of your obligation to pay/reimburse Bank or Processor in accordance with Section 11.A of this Agreement.
   11. “Card Not Present” transaction refers to a transaction that occurs when: (a) the Card is not present at the point-of-sale, including, without limitation, Internet, mail order, and telephone order sales or (b) the Card is present at the point-of-sale but no impression of the Card is obtained on the Sales Record (either manually by utilizing an imprinter or the electronic equivalent by swiping a Card through, capturing Card data and printing a Sales Record).
   12. “Cardholder” refers to the person or entity whose name is embossed on a Card and has authority to use that Card, as well as any other authorized user of such Card.
   13. “Cardholder Data” has the meaning assigned to such term in Section 3B of this Agreement.
   14. “Chargeback” refers to a Card transaction (or portion thereof) that is returned to Processor or Bank by the Issuer for any reason. “Chargeback” includes reversals and disputes under the Visa Rules.
   15. “Credit Card” is a card bearing a valid organizational Mark of VISA, Mastercard, AMEX or any Other Networks and authorizing the Cardholder to buy goods or services on credit. To the extent permitted by this Agreement, “Credit Card” also refers to a valid device authorizing the Cardholder to buy goods or services on credit and issued by any Card Network specified on this Agreement.
   16. “Credit Receipt” shall mean any documentation necessary to reflect a credit granted to a Cardholder.
   17. “Data Security Regulations” refers to, both individually and collectively, the Payment Card Industry Data Security Standard (“PCI-DSS”) and any other similar program mandated by a Card Network.
   18. “Debit Card” is a card or other valid device issued to pay for goods and services that solely accesses or is otherwise primarily associated with a Cardholder’s asset account, such as a demand deposit account or savings account, and includes stored value cards. A Debit Card can be either a Non-PIN Debit Card or PIN Debit Card. A Non-PIN Debit Card is a Debit Card which is processed without the benefit of a PIN. A PIN Debit Card is a Debit Card used at a merchant location by means of a Cardholder-entered PIN in the merchant PIN pad. PIN Debit Cards bear the marks of ATM networks (such as NYCE, Star).
   19. “Dispute” and “Disputes” for the purpose of this Agreement shall be broadly interpreted to include any claims, disputes, disagreements or controversies that You, Bank and/or Processor (or any subset thereof), had, have, or may in the future have against each other, whether based in contract, tort or on a statute or regulation or any other legal theory, including, without limitation, all claims, disputes, disagreements, or controversies arising out of or in any way related to (i) this Agreement; (ii) the Operating Regulations or Data Security Regulations; (iii) any transaction processed by or with the assistance of Processor or Bank; (iv) any fee, charge, cost, expense, chargeback, setoff, deduction, payment, or payment relating to or arising out of this Agreement; (iv) any product or service offered by Processor; (v) the Merchant Account or Reserve Account; (vi) any action or inaction by Processor or Bank relating to or arising out of this Agreement; (vii) any advertisement, statement, representation, marketing or sales efforts by Processor; (viii) whether a claim is subject to arbitration; or (ix) any aspect of the relationship between You and Processor. For the avoidance of doubt, Disputes, under this Agreement, are not limited to “Disputes” as defined under the Visa Rules and Regulations.
   20. “Factoring” refers to the submission of authorization requests and/or Sales Drafts by a merchant for Card sales or cash advances transacted by another business. Factoring is prohibited.
   21. “Interchange” refers to any fee established, charged, or received by a Card Network and payable by a merchant or an acquirer for the purpose of compensating an Issuer for its involvement in a Card transaction, which fees are generally published by the Card Networks.
   22. “Issuer” refers to the financial institution or Card Network which has issued a Card to a person or entity.
   23. “Law” and “Laws” refer to all applicable international, federal, state (including Puerto Rico and other U.S. territories), and local laws, statutes, regulations, and ordinances, including, without limitation, all requirements of the US Patriot Act and all other similar laws.
   24. “Mark” or “Marks” refer to the names, logos, emblems, brands, service marks, trademarks, trade names, or other proprietary designations.
   25. “Mastercard” refers to Mastercard International, Inc. and its parents, subsidiaries, affiliates, and related companies.
   26. “Merchant” and “You” refer to the person or entity that executes this Agreement and is to receive Services pursuant to this Agreement.
   27. “Merchant Account” has the meaning assigned to such term in Section 9A of this Agreement.
   28. “Operating Regulations” refers to all the certificates of incorporation, by-laws, operating regulations and any other rules, policies, practices, protocols, instructions, directives, or procedures of the Card Networks, including, without limitation, manuals, guides, rules, regulations, and bulletins, as amended from time to time. You may review copies of the Operating Regulations for Visa and Mastercard at respectively, https://usa.visa.com/content/dam/VCOM/download/about-visa/visa-rules-public.pdf; https://www.mastercard.us/content/dam/mccom/global/documents/mastercard-rules.pdf and/or through each entity’s website.
   29. “Other Networks” refers to any other card or similar network supported by Processor, including, without limitation, debit networks.
   30. “Processor” refers to Dynamics Payments LLC, along with its parents, subsidiaries, predecessors, successors, assigns, affiliates, and related companies.
   31. “Processor Assessment” referred to the “Processor Assessment” amount set forth in Section 7 of the Application.
   32. “Personally Identifiable Information” is information whose confidentiality is protected pursuant to the Operating Regulations or applicable Law.
   33. “POS Device” shall mean a card reading terminal, mobile device, computer, software, gateway or other similar device or software used for the purpose of gathering and transmitting data related to Card transactions.
   34. “Rates & Fees” has the meaning assigned to such term in Section 11A of this Agreement, and includes all fees, costs, and charges provided for in or required or arising under this Agreement.
   35. “Reserve Account” has the meaning assigned to such term in Section 10B of this Agreement.
   36. “Rules” refers to the rules promulgated or mandated by Processor and Bank regarding the processing of Card transactions, both individually and collectively.
   37. “Sales Draft” refers to paper or electronic evidence of a purchase, rental or lease of goods or services by a Cardholder from, and other payments to, Merchant using a Card. It includes preauthorization orders and recurring transactions (unless the context requires otherwise). The Sales Draft must conform to the terms of this Agreement, as well as all Rules, Laws, and Operating Regulations.
   38. “Services” refers to the services Processor and Bank will provide, either directly or through a third-party service provider, to You pursuant to this Agreement relating to the authorization, processing and settlement of Visa, Mastercard, AMEX and Other Network transactions undertaken by Cardholders at your location(s), and all other activities necessary for Processor and Bank to perform the functions required by this Agreement.
   39. “VISA” refers to Visa USA, Inc. and its parents, subsidiaries, affiliates, and related companies.
2. Rules, Regulations and Laws.
   1. Regulations. You hereby agree to comply with the Operating Regulations. You acknowledge and agree that You are solely responsible for obtaining copies of the Operating Regulations. You agree that You will take all steps necessary to review the Operating Regulations and to ensure that You and your employees are knowledgeable of and up to date on the applicable Operating Regulations, including, without limitation, reviewing all information available on the Card Network websites. You agree that You assume the risk of complying with all of the Operating Regulations, regardless of whether You have possession of or have reviewed the Operating Regulations. While this Agreement may provide You with guidelines or principles for a sound Card program, You agree to consult with the Operating Regulations for complete information and to ensure full compliance with them.
   2. Laws. You hereby agree to comply with all Laws.
   3. Rules. You hereby agree to comply with the Rules. Subject to Section 20I below, both the Processor and Bank shall be permitted, in their sole and absolute discretion, to amend the Rules from time to time. If the Rules are amended, this Agreement will automatically be amended to conform to and incorporate herein the revised Rules.
   4. Incorporation of Operating Regulations, Rules and Laws. The Operating Regulations, Rules, and Laws are incorporated in this Agreement as if fully set forth herein.
   5. Precedence. In the event of a conflict between the terms and conditions of this Agreement (including, without limitation, the Rules), on the one hand, and the Operating Regulations, on the other hand, the provisions of the Operating Regulations shall take precedence. If any of the terms and conditions of this Agreement are found to conflict with the Operating Regulations, such conflicting terms and conditions are subject to reasonable amendment by Processor to address such conflict upon written notice to You and, notwithstanding anything in this Agreement to the contrary, such amendment shall become effective upon such amendment.
3. Data Security. THE FOLLOWING IS IMPORTANT INFORMATION REGARDING THE PROTECTION OF CARDHOLDER DATA AND OTHER DATA. PLEASE REVIEW CAREFULLY AS FAILURE TO COMPLY CAN RESULT IN SUBSTANTIAL FINES, LIABILITIES FOR UNAUTHORIZED DISCLOSURE, AND/OR TERMINATION OF THIS AGREEMENT.
   1. Compliance; Incorporation of Data Security Regulations. You agree to comply with all Data Security Regulations. The Data Security Regulations are incorporated in this Agreement as if fully set forth herein.
   2. Cardholder Data. You shall not sell, purchase, provide, or exchange with any third party any Cardholder names, addresses, account numbers, track-2 data, EMV data, chip data, security verification codes, expiration dates, Personally Identifiable Information or any other Cardholder information (“Cardholder Data”); provided, however, that You may provide Cardholder Data to the Card Networks for the purpose of completing a lawful sales transaction. You agree that under no circumstances will You or your employees, representatives, third-party vendors, or agents store Cardholder Data in violation of the Operating Regulations, Data Security Regulations, Rules or Laws. You agree that You, your employees, agents, representatives and third-party vendors will not retain Cardholder Data after completion of the authorization process.
   3. Use of Cardholder Data. You agree that Cardholder Data may only be used for assisting in completing a lawful Card transaction, for fraud control services, for loyalty programs, or as specifically agreed to by Card Networks or as required by Law.
   4. Reporting Cardholder Data Compromises. In the event of, or if You suspect there may be, a breach, intrusion of, theft, or any other unauthorized access to or exposure of Cardholder Data stored at your location or stored for You by any person or entity (whether known or suspected, a “Security Breach”), You shall notify Processor in writing as soon as possible (but in no event any later than 24 hours after learning of the Security Breach) in the manner required in Data Security Regulations. You further agree to provide the Card Networks, the Bank, Processor and their respective designees full access to your premises, facilities, computer hardware and software (including, without limitation, all computers, servers, and cloud-based storage, wherever located), and all pertinent records to conduct a thorough review of your compliance with the Data Security Regulations. You shall fully and timely cooperate with any such reviews or investigations.
   5. Investigation. In the event of a Security Breach, if requested, You shall, at your own expense, (i) perform or cause to be performed an independent investigation, including a forensic analysis performed by a certified forensic vendor acceptable to us; (ii) provide a copy of the certified forensic vendor’s final report regarding the incident to us (and we shall be permitted to provide it to the Card Networks); (iii) perform or cause to be performed any remedial actions recommended by such audit; and (iv) fully cooperate with Processor in the investigation. Notwithstanding anything in this Section, if required by a Card Network, Processor will engage a forensic vendor approved by a Card Network at your expense. You must cooperate with the forensic vendor so that it may immediately conduct an examination of your equipment, records, policies, procedures, and protocols, and provide a report to Processor.
   6. Backup Systems. You warrant and represent that You currently maintain, and will continue to maintain, commercially reasonable business continuity procedures and systems to ensure security of Cardholder Data in the event of a disruption, disaster, or other failure of Processor’s or Merchant’s primary data systems.
   7. Compliance with Data Security Regulations Post-Termination. You and your successors and assigns shall continue to comply with the Data Security Regulations after termination of this Agreement.
   8. Compliance with Data Security Regulations does not Prevent Liability. You agree that compliance with the Data Security Regulations does not relieve You of financial or other responsibility for any loss, injury, harm or damage that may result from a Security Breach. You acknowledge and agree that You are solely liable for any damage or injury caused by any Security Breach. Additionally, no damages, compensation or claim shall be payable by Processor or Bank for inconvenience, loss of business or annoyance arising from a Security Breach or any investigation, audit or required notification to third parties that may result from such Security Breach.
   9. PCI Compliance. You agree to take all steps and perform all acts required by the data security vendor (“DSV”) retained by Processor or Bank necessary to validate your full compliance with the Data Security Regulations. Compliance with the requirements of the program established by the DSV will require at least the accurate completion of a self-assessment questionnaire and may require, at Processor’s or Bank’s sole discretion, a vulnerability scan, penetration test and/or the satisfaction of other requirements imposed by the Operating Regulations or the Data Security Regulations. Under certain circumstances, as set forth in the Data Security Regulations, you may be required to re-validate your compliance. If re-validation becomes necessary, You agree that You will, at your expense, take all steps deemed necessary by the DSV to re-validate your compliance with the Data Security Regulations. In return for, among other things, the services performed by the DSV, You agree to pay to Processor the PCI Compliance Fee contained in the fee schedule that is part of this Agreement.
   10. PCI Non-Compliance Fee. In the event that You do not fully and timely comply with the PCI-DSS requirements, Processor shall be entitled to impose and collect from You a PCI non-compliance fee in the amount set forth in the Application as the “PCI Non-Compliance” fee until such time as You are in full compliance with the PCI requirements. You are required to pay the entire PCI non-compliance fee if you are not in compliance for any period of time during a calendar month.
4. Honoring Cards.
   1. Card Acceptance. You will honor, without discrimination and in accordance with the Rules and Operating Regulations, any Card, as indicated on the Application, properly tendered by a Cardholder, without imposing any conditions that are prohibited by Laws, the Rules or the Operating Regulations. You acknowledge that if you accept Cards bearing the Visa or Mastercard logo, the Visa and Mastercard Operating Regulations require You to accept any Cards issued by non-U.S. members. You shall not do any of the following: (a) add any tax to a transaction, unless applicable Laws expressly require(s) Merchant to impose a tax, and in such event the tax amount must be included in the transaction amount and not collected separately; (b) request or use an account number for any purpose other than as payment for goods or services, except as permitted by the Operating Regulations or Laws; (c) disburse funds in the form of travelers checks, if the sole purpose is to allow Cardholder to make a cash purchase of goods or services from You; (d) permit a Cardholder to purchase travelers checks, or any other similar item, if the sole purpose is to allow the Cardholder to make a cash purchase of goods or services from You; (e) accept a Card to collect or refinance an existing debt that had been deemed uncollectible or if the funds are being provided to or sent to a collection agency; (f) enter into interchange a transaction that represents collection of a dishonored check; (g) require a Cardholder to waive his/her rights to dispute a transaction as a condition of sale; (h) accept Cardholder payments for previous Card charges incurred at the Merchant location; (i) submit for payment into interchange any transaction that may in the sole discretion of a Card Network damage the goodwill of such Card Network or reflect negatively on a Card Network’s brands; (j) enter into interchange any transaction receipt for a transaction that was previously charged back to Bank and subsequently returned to Merchant, irrespective of Cardholder approval; (k) accept a Card for the purchase of Scrip; (l) accept a Visa Electron Card or a Visa Travel Money Card for manual cash disbursement; or (m) accept a Card for any reason prohibited by the Laws, the Rules, or the Operating Regulations. Merchant may establish a minimum sale amount as a condition for honoring Cards, provided that the minimum transaction amount does not differentiate between Card Networks and/or issuers and the minimum transaction amount does not exceed the applicable amount established by the Operating Regulations or applicable Laws. Unless otherwise set forth below or otherwise allowed by applicable Laws or the Operating Regulations, Merchant may not establish a maximum sale amount as a condition for honoring Cards.
   2. Cardholder Identification. You will identify the Cardholder and check the expiration date and signature on each Card. You will not honor any Card if: (i) the Card has expired; (ii) the signature on the Sales Draft does not correspond with the signature on the Card; (iii) the account number embossed on the Card does not match the account number on the Card’s magnetic stripe or EMV chip; (iv) the account number embossed on the Card is listed on a current Electronic Warning Bulletin file; (v) the security features on the Card for the applicable Card Network are either not present or incorrect or (vi) doing so would violate any Rule, Law or one or more Operating Regulations. Unless permitted under the Operating Regulations, Laws and Rules, you will not require a Cardholder to provide personal information, such as a home or business telephone number, a home or business address, or a driver’s license number, as a condition for honoring a Card. You shall not require a Cardholder to complete a postcard or similar device that includes the Cardholder’s account number, Card expiration date, signature, or any other Card account data in plain view when mailed. You shall not request the Card Verification Value 2 (CVV2) data on any paper order form.
   3. Card Recovery. You will use your reasonable, best efforts to recover any Card: (i) if the printed four digits above the embossed account number, on Visa Cards only, do not match the first four digits of the embossed account number; (ii) if You are advised by Bank (or its designee), the issuer of the Card, or the designated voice authorization center to retain it; (iii) if You have reasonable grounds to believe the Card is counterfeit, fraudulent, or stolen, or use of the Card has not been authorized by the Cardholder; (iv) the embossed account number, indented printed account number, and/or encoded account number, on Mastercard Cards only, do not agree; or (v) the Card does not have a Visa or Mastercard hologram or other designated Mark on the Card face. All Card recovery must occur reasonably lawfully and in accordance with the Operating Regulations, Laws and Rules.
   4. Surcharges. You will not add any amount to the posted/published price of goods or services You offer as a condition of paying with a Card, unless permitted by the Operating Regulations or Laws. This paragraph does not prohibit You from offering a discount to induce a person to pay by cash, check, or similar means rather than by using a Card, so long as such discounts are permitted by the Operating Regulations and Law.
   5. Return Policy. You will properly disclose to the Cardholder in writing, at the time of the Card transaction and in accordance with the Operating Regulations, Laws and Rules, your return policy and any limitation You have on accepting returned merchandise.
   6. No Claim Against Cardholder. You will not have any claim against, or right to receive payment from, a Cardholder unless Processor or Bank refuses to accept the Sales Draft or revokes its prior acceptance of the Sales Draft (after receipt of a chargeback or otherwise). You will not accept any payments from a Cardholder relating to previous charges for merchandise or services included in a Sales Draft, and if You receive such payments, You promptly will remit them to Processor. You may not reimburse a Cardholder in cash or check for any Card transaction.
   7. Disputes with Cardholders. All Disputes between You and any Cardholder, relating to any Card transaction, will be settled between You and the Cardholder. Neither Bank nor Processor bears any responsibility, liability, duties or obligations for such transactions or disputes.
   8. Employee/Agent/Vendor Actions. You are solely responsible for your employees, agents, vendors, and representatives’ actions while in your employ or when they are taking actions for or on your behalf.
   9. Responsibility for Transactions. You will ensure that the Cardholder is easily able to understand that You are responsible for the transaction, including, without limitation, delivery of the goods or provision of the services that are the subject of the transaction, and for customer service and dispute resolution, all in accordance with the terms applicable to the transaction. You will not deposit a transaction until the transaction is completed or the merchandise or services are shipped or provided, unless the Cardholder has paid a partial or full prepayment. You will only operate and accept transactions in the United States.
   10. Cash Advances. Merchant shall not make cash advances on credit cards to Cardholders without the prior written consent of Processor and Bank.
5. Authorization.
   1. Required on All Transactions. You will obtain a prior authorization via electronic terminal, gateway, mobile device or other similar device before completing any transaction. You will follow any instructions received during the authorization process. Upon receipt of authorization, You shall consummate only the transaction authorized and must note on the Sales Draft the authorization number. Where authorization is obtained, You will be deemed to warrant and represent that you have taken necessary steps to confirm the identity of the customer and that that the customer presenting the Card is the Cardholder. If you receive a negative response to your request for authorization, You shall not complete the sale and You may be requested to recover the Card. Transactions will be deemed invalid on, and You shall not process or accept, Cards that are expired, whether or not an Authorization has been obtained. For electronic commerce transactions, You must attempt to obtain the Card expiration date and forward it as part of the authorization request.
   2. Effect/Liability. AN AUTHORIZATION ONLY INDICATES THE AVAILABILITY OF A CARDHOLDER’S CREDIT AT THE TIME OF THE TRANSACTION. IT DOES NOT WARRANT, REPRESENT OR GUARANTEE THAT THE PERSON PRESENTING THE CARD IS THE RIGHTFUL CARDHOLDER, THE CHARGE IS IN FACT VALID OR BONA FIDE, NOR IS IT A PROMISE OR GUARANTEE THAT YOU WILL BE PAID FOR THE CHARGE AND NOT BE SUBJECT TO A CHARGEBACK. FOR THAT REASON, AN AUTHORIZATION WILL NOT WAIVE ANY PROVISION OF THIS AGREEMENT OR VALIDATE A FRAUDULENT TRANSACTION OR A TRANSACTION INVOLVING THE USE OF AN EXPIRED CARD. Notwithstanding any authorization You may receive, You are and remain fully liable for all chargebacks. Through this Agreement, You acknowledge and agree that you are fully liable for all claims, causes of action, liabilities, injuries and damages arising out of or relating to any chargebacks.
   3. Unreadable Magnetic Stripes EMV Chips and/or Manually Keyed Transactions. If You authorize and present Card transactions electronically and your terminal is unable to read the magnetic stripe or EMV chip on the Card, You will obtain an imprint of the Card and the Cardholder’s signature on the imprinted draft before presenting the Sales Draft to Bank and Processor for processing.
6. Presentment of Sales Drafts.
   1. Forms. You will use a Sales Draft or other form approved by the Bank and Processor to document each Card transaction. Each Sales Draft will be legibly imprinted with the: (i) Merchant’s name and account number; (ii) no more than the last four digits of the Card number and shall not include the expiration date; (iii) date of the transaction; (iv) brief description of the goods or services involved; (v) transaction authorization number; (vi) total amount of the sale (including applicable taxes) or credit transaction; and (vii) if applicable, adjacent to the signature line, a credit policy notation that all sales are final and/or that the order will take a period of time, if applicable. You agree to comply with all Fair and Accurate Credit Transactions Act (“FACTA”) requirements, and You shall be fully and solely liable for any claims, causes of action liabilities, damage or injury arising out of or relating to any inaction or action You take that constitutes or causes, directly or indirectly, any breach or violation of the FACTA.
   2. Signatures. If required by the Rules, the Laws or Operating Regulations, Sales Drafts must be signed by the Cardholder.
   3. Delivery and Retention of Sales Drafts. You will deliver a complete and legible copy of the Sales Draft or Credit Receipt or receipt, to the extent required by the Operating Regulations or Law, to the Cardholder at the time of the transaction. You will retain the “merchant copy” of the Sales Draft or credit memorandum in a secure and limited access area for the periods set forth in the Operating Regulations for the applicable Card Network.
   4. Electronic Transmission. If You utilize electronic authorization and/or data capture services, You will enter the data related to a sales or credit transaction into a computer, electronic point of sale terminal or magnetic stripe/EMV chip reading terminal no later than the close of business on the date the transaction is completed and You will Batch Out your system or terminal every day. “Batch Out” is the process in which all transactions are totaled and settled on each system or terminal and transmitted to Processor or its designated agent. In all cases You must present the record within 3 business days of the transaction (2 business days for Electronic Cards). You will be charged and agree to pay a batch fee for Batch Outs and for batch inquiries. If You provide your own electronic terminal or similar device, or You lease a terminal from a third party, such terminals must meet Processor’s requirements for processing transactions. Information regarding a sales or credit transaction transmitted with a computer or magnetic stripe/EMV chip reading terminal will be transmitted by You to Processor, Bank or its agent in the form Processor specifies or as required under the Laws or Operating Regulations. If Processor or Bank requests a copy of a Sales Draft, credit voucher, or other transaction evidence, You will provide it within 24 hours following the request. Processor will not be obligated to settle transactions that are not properly batched out by You.
7. Merchant Responsibilities.
   1. Exclusivity. During the term of this Agreement, You shall use Processor as your exclusive provider of the Services provided for herein, including, without limitation, the transmission, authorization, and settlement of your customer’s Card transactions.
   2. Deposit of Sales Drafts. You agree that this Agreement is a contract of financial accommodation within the meaning of, and as defined in, the Bankruptcy Code, 11 U.S.C. § 365, as amended from time to time. Subject to this Section 7, and the other terms and conditions of this Agreement, Bank will deposit into the Merchant Account (defined in Section 9A below) all Sales Drafts, whether evidenced in writing or by electronic means, that comply with the terms of this Agreement and the Operating Regulations and will provide You with provisional credit for such Sales Drafts (less any credits, adjustments and chargebacks). You acknowledge and agree that your obligations to Processor and Bank for all amounts owed under this Agreement arise out of the same transaction as Bank’s obligation to deposit funds to the Merchant Account. Notwithstanding the previous sentence, under no circumstances will Processor or Bank be in any way responsible or liable for processing credits or adjustments related to original sales transactions not processed by Processor or Bank. All Sales Drafts and deposits are subject to audit and final checking by Bank and Processor and may be adjusted for inaccuracies. You acknowledge and agree that all credits provided to You are provisional and subject to Chargebacks and other adjustments in accordance with the Operating Regulations, Rules and this Agreement. Bank and Processor may elect to grant conditional credit for individual or groups of any Sales Drafts. Final credit for those conditional Sales Drafts will be granted within Processor or Bank’s sole and absolute discretion.
   3. Chargebacks. You are solely and fully liable to Processor and Bank for all transactions returned to Processor and Bank for whatever reason, including without limitation Chargebacks. YOU ARE SOLELY AND FULLY LIABLE FOR ANY CLAIMS, CAUSES OF ACTION LIABILITIES, DAMAGES OR HARM CAUSED BY ANY CHARGEBACKS. You will pay Processor and Bank on demand the amount, value and costs arising out of or relating to all Chargebacks, including, without limitation, any sale for which the Cardholder disputes the validity of the sale. You authorize Processor and Bank to offset, setoff and/or deduct from any funds owed to you the full amount of all Chargebacks. You further authorize Processor and Bank to offset, setoff, and/or deduct from incoming transactions and to debit the Merchant Account, the Reserve Account, or any other account held at Bank or at another financial institution the amount of all Chargebacks and all fees, fines and penalties arising out of or relating to any Chargebacks. You will fully cooperate with Processor and Bank in complying with the Rules, Operating Regulations and Laws regarding Chargebacks. Guarantors are personally liable for the full amount of all Chargebacks and all fees, fines and penalties arising out of or relating to any Chargebacks. You are obligated to promptly monitor any and all Chargeback related notices and reports provided by Processor. You acknowledge and understand that your failure to respond to a Chargeback within the applicable deadline may result in a forfeiture of any right You may have had to contest the Chargeback. You are subject to Chargebacks on sales for at least 180 days following the sale transaction.
   4. Excessive Activity. Excessive Activity by you shall constitute a breach of this Agreement and cause for immediate termination of this Agreement with cause and without prior notice or an opportunity to cure. “Excessive Activity” means, during any monthly period and for any one of your terminal identification numbers or merchant identification numbers or all of your merchant identification numbers in the aggregate, Chargebacks and/or retrieval requests in excess of 1% of your average monthly Card transactions or returns in excess of 3% of the average monthly dollar amount of Sales Drafts. You authorize, upon the occurrence of Excessive Activity, Processor and Bank to take additional actions, as either of them may deem warranted in their sole and absolute discretion, to address or remedy Chargebacks, to prevent future Chargebacks, and/or to minimize the harm arising out of or relating to the chargebacks, including, but not limited to, suspension of processing privileges, creation or maintenance of a Reserve Account in accordance with this Agreement, or increase of funds or percentage of funds required in a Reserve Account.
   5. Credits. i. Credit Memoranda. You will issue a Credit Receipt instead of making a cash advance or providing a check, disbursement or refund on any Card transaction. Processor and/or Bank will debit the Merchant Account for the total face amount of each credit memorandum submitted to Processor. You will not submit to Processor or Bank a credit relating to any Sales Draft not originally submitted to Processor and Bank, nor will You submit a credit that exceeds the amount of the original Sales Draft. You cannot submit or process a credit transaction that does not correspond to a previous transaction on the original Sales Draft. Full refunds must be made for the exact dollar amount of the original transaction, including tax, handling charges, etc. You are solely responsible for paying all refunds submitted to Processor on your merchant account. Processor assumes no responsibility, duty or obligation for verifying any credits or refunds. Do not process a credit transaction after a Chargeback is received. Credits issued after a Chargeback has been received may not be recoverable and You are financially responsible for both the credit and the Chargeback in that situation. YOU ARE SOLELY RESPONSIBLE FOR SECURING YOUR TERMINALS AND TO INSTITUTE APPROPRIATE CONTROLS TO PREVENT EMPLOYEES AND OTHERS FROM SUBMITTING CREDITS THAT DO NOT REFLECT BONA FIDE RETURNS OR REIMBURSEMENTS FOR TRANSACTIONS. You will, within the time period specified by Law or the Operating Regulations, whichever is shorter, provide Processor with a credit memorandum or credit statement for every return of goods or forgiveness of debt for services that was the subject of a Card transaction. ii. Revocation of Credit. Processor or Bank may refuse to accept any Sales Draft or revoke the prior acceptance of a Sales Draft in at least the following circumstances: (a) the transaction giving rise to the Sales Draft was not made in compliance with all terms and conditions of this Agreement, the Rules, the Laws, and/or the Operating Regulations; (b) the Processor or Bank receives notification that the Cardholder disputes his or her liability to Merchant for any reason including, but not limited to, those Chargeback rights enumerated in the Operating Regulations; or (c) the transaction giving rise to the Sales Draft was not directly between You and the Cardholder. You acknowledge and agree that You are not entitled to retain, and will pay Bank and Processor, as appropriate, any amount previously credited to You for a Sales Draft not accepted by Processor or, where provisionally accepted, that is subsequently revoked.
   6. Reprocessing. Notwithstanding any authorization or request from the Cardholder or customer, You will not re-enter or reprocess any Card transaction that has been the subject of a Chargeback. In the event that You re-enter or reprocess any Card transaction that was the subject of a Chargeback, You are solely responsible for all claims, causes of action, liabilities, and damages arising out of or relating to that transaction. Further, such action constitutes a breach of this Agreement and may, in the sole discretion of Processor and/or Bank, result in the immediate termination of this Agreement for cause.
   7. Fraud, Debt Collection, and Factoring. You will not present for processing or credit, directly or indirectly, any transaction not originated as a Card transaction directly between You and a Cardholder or any transaction You know or reasonably should have known to be fraudulent or not authorized by the Cardholder. You will not deposit Sales Drafts evidencing sales that were solicited by telemarketers. You will not submit an authorization request or Sales Draft for a Card transaction by another business. If You submit a Sales Draft on behalf of another person or entity, You will suffer all losses associated with the dispute of any such Sales Draft or related transaction and submitting such a transaction shall entitle Processor and/or Bank, in their sole discretion, to terminate this Agreement for cause. Perpetrators of fraudulent transactions will be referred to law enforcement officials. You will not sell or disclose to third parties Cardholder Data other than in the course of performing your obligations under this Agreement. You will not deposit any Sales Draft representing the refinancing of an existing obligation of a Cardholder. You will not deposit any Sales Draft relating to the collection of debt that has been deemed uncollectable. You agree that Processor may, within its sole discretion, suspend the disbursement of Sales Draft funds for any reasonable period of time required to investigate suspicious or unusual deposit activity. Processor and Bank will have no liability for any claims, causes of action, liabilities or losses arising out of or relating to any suspension of funds disbursement pursuant to this Section or any other provision of this Agreement.
   8. Agreement Information and Tax ID Numbers. You agree, represent and warrant that all information regarding You and your business provided in this Agreement, including, without limitation, your tax identification number (“TIN”), is true and correct. You further agree, represent and warrant that if, in the future, there is any material change in the information You or Your business provided in this Agreement, You will inform Processor in writing within ten (10) business days of the material change. Furthermore, You represent that the TIN provided in the Agreement is the same TIN You use to file your tax returns. In the event that You change your TIN, You agree to inform Processor and Bank in writing regarding any new TIN you use to file your tax returns within ten (10) business days. You acknowledge that Processor and/or Bank may be obligated to provide certain information about You to government entities, including without limitation your entity name, DBAs, TIN, processing volume and principals’ social security number. You herby authorize and consent to Processor and Bank providing any information that You provide to us to any governmental agency that requests it. You further agree to release Processor and Bank from any claims, liability, damages and losses, including penalties and fines and attorneys’ fees, that arise out of or relate to the information You provided in the Agreement (including without limitation your TIN) being incorrect or not complying with your representations. Furthermore, Processor shall be entitled to collect a fee from You in the amount of $29.95 each time Processor determines that the current TIN You provided Processor is not valid. In addition, Merchant agrees and understands it may be subject to back-up withholding requirements as provided in the Internal Revenue Code of the United States and related regulations.
   9. Merchant Financials. Upon receipt of a request from Processor or Bank, You, at your own expense, will provide quarterly and/or annual audited financial statements prepared in accordance with generally accepted accounting principles and such other financial information as Processor or Bank may reasonably request. Such information shall be provided as soon as possible following the request, but in no event more than thirty (30) days following such request.
   10. “Know-Your-Customer” and Sanctions. You will comply with our “know-your-customer” requests, policies and procedures, including, without limitation, cooperating and providing information requested by the Processor or Bank to facilitate compliance with the rules and regulations promulgated by the Office of Foreign Assets Control of the US Department of the Treasury. You further acknowledge and agree that you will not use your Merchant Account and/or the Services for transactions involving any person or entity listed on the U.S. Department of Treasury, Office of Foreign Assets Control, Specially Designated Nationals and Blocked Persons List (available at www.treas.gov/ofac) or the U.S. Department of State’s Terrorist Exclusion List (available at www.state.gov), or for the processing and acceptance of transactions in certain jurisdictions pursuant to 31 CFR Part 500 et seq. and other laws enforced by the Office of Foreign Assets Control (“OFAC”) or in connection with illegal activity of any kind.
   11. Review of Statements. You agree to promptly review all statements, receipts, billing statements, bank statements, invoices and other documents containing fees, charges, Chargebacks, expenses, costs, amounts due, amounts payable or amounts held in reserve (together, “Invoices”) prepared by or for Processor and/or Bank and made available to you, whether in electronic or hard copy form, including, without limitation, Invoices available on the internet or provided pursuant to Processor’s on-line reporting tools. You agree to carefully review all Invoices to identify any potential, claimed, or actual incorrect, erroneous, inapplicable, excessive, inaccurate, or otherwise improper fees, costs, expenses, charges, costs, deductions, offsets, setoffs, amounts held or amounts paid (individually and collectively, “Errors”). Within sixty (60) days of any Invoice being made available to You, whether in hard copy or electronically, You shall inform Processor, in writing, of any Error, including, but not limited to, any objection to or dispute regarding the propriety, amount, applicability, validity, excessiveness, accuracy, or appropriateness of any fee, cost, expense, charge, Chargeback, setoff, deduction, offset, amount held, or amount paid. YOU ACKNOWLEDGE, STIPULATE, AND AGREE THAT ANY OBJECTION TO, DISPUTE ABOUT, OR CLAIM RELATING TO ANY FEE, COST, EXPENSE, CHARGE, CHARGEBACK, SETOFF, DEDUCTION, OFFSET, AMOUNT HELD, OR AMOUNT PAID, IS FULLY AND FINALLY RELEASED AND WAIVED UNLESS PROCESSOR RECEIVES THE OBJECTION, DISPUTE OR CLAIM, IN WRITING, WITHIN SIXTY (60) DAYS FROM THE DATE THE INVOICE IS MADE AVAILABLE TO YOU, EITHER IN HARD COPY OR ELECTRONIC FORM. THE OBJECTION, DISPUTE OR CLAIM MUST BE IN WRITING AND SHOULD BE SENT TO: DIRECTOR OF OPERATIONS, DYNAMICS PAYMENTS LLC, 3100 CARR 199 STE. 101, SAN JUAN, PR 00926, [email protected].
   12. Optional Services. Processor may offer and You may elect to use services from third parties that are related to the Services provided by Processor or Bank to You pursuant to this Agreement (“Optional Services”). Even though Processor may collect the fees related to the Optional Services, You acknowledge and agree that You will use these Optional Services at your own risk and neither Processor nor Bank shall have liability for the failure of the third parties who provide the Optional Services, provide some or all of those Optional Services or the failure of the Optional Services to perform as contemplated by You. Processor and/or Bank shall have no obligation to provide the Optional Services and that the provision of any Optional Services is subject to the availability of the Optional Services from the third party actually providing such Optional Services. The Optional Services may require that You agree to additional terms and conditions or that You enter into an agreement directly with the vendor providing such services. Without limiting any of the foregoing provisions, if You elect to use any form of wireless service in connection with Card Transactions then You agree that Processor and/or Bank are not responsible, and will not be liable, for (a) verifying wireless service coverage for You, (b) any loss of coverage in any particular area, (c) for termination of your wireless coverage, (d) the continued use of your equipment as a wireless terminal if your wireless coverage is terminated or suffers a loss of coverage; or (e) any other losses, damages or injuries arising out of or relating to the use, loss or termination of wireless service. Neither Processor nor Bank make any warranties, representations or guarantees regarding the Optional Services, and shall not be liable for any claims, causes of action, liabilities, or damages arising out of or relating to the Optional Services.
   13. Your Agents. In the event that You use a third party to perform any of your obligations under this Agreement or You use a third party to perform services that arise out of, interact with, or relate to any of the services performed by Processor, Bank or their agents under this Agreement, then You agree that You will be solely responsible for the actions of such third party as though You had performed those acts yourself. Furthermore, You agree to cause each such third party to comply with all requirements of this Agreement, the Rules, Operating Regulations, Data Security Regulations, and Laws, including, without limitation, all requirements related to due diligence, registration and/or certification and to be responsible for all costs and expenses related thereto. You agree to be solely and fully responsible for all claims, causes of action, liabilities, losses or damages suffered by Processor, Bank or any third party arising out of or relating to actions of any such third party and agree to indemnify Processor and Bank, pursuant to Section 12B, for the acts of such third party.
   14. Disclosure of Merchant Location. You shall prominently and clearly disclose to the Cardholder that You are the merchant at all points of the interaction and provide the Cardholder your location (physical address) so that the Cardholder can easily distinguish You from any other party, such as a supplier of products or services. The Merchant name and location, as disclosed to the Cardholder, must be the same as provided in authorization and clearing transaction messages.
8. Other Types of Transactions.
   1. Mail Order. You may not solicit or accept Card Not Present transactions, including email, internet, or telephone orders (also known as “MOTO”) without prior written consent from Processor. Card Not Present and MOTO orders completed without prior written consent of Processor constitute a breach of this Agreement and may result, in the sole discretion of Processor and/or Bank, in the immediate termination for cause of this Agreement, in addition to any other remedies available under the Operating Regulations, Laws and Rules. You may be required to use an address verification service (“AVS”) on Card Not Present and MOTO transactions. AVS is not a guarantee of payment and the use of AVS will not waive any provision of this Agreement, validate a fraudulent transaction, or otherwise relieve You in any way from any claim, cause of action or injury arising out of or relating to a Card Not Present or MOTO transaction. You will obtain the expiration date and CVV2 number of the Card for a Card Not Present or MOTO transaction and submit the expiration date when obtaining authorization of the Card transaction. For Card Not Present and MOTO transactions, You will type or legibly print or electronically enter on the signature line of the Sales Draft the following applicable words or letters: “telephone order” or “TO” or “mail order” or “MO.” No Sales Draft shall be submitted for processing prior to the shipping of the product or the provision of the services purchased by the Cardholder. You acknowledge and agree that MOTO and other Card Not Present transactions have a substantially higher risk of Chargeback. You agree to be solely responsible for any claims, causes of action, liabilities or damages arising out of or relating to a MOTO transaction or other Card Not Present transaction.
   2. Recurring Transactions. For recurring transactions, You must obtain a written approval from the Cardholder, which specifies at least the following information: Cardholder’s name, address, account number, expiration date, the transaction amounts, the timing or frequency of the recurring charge, and the duration of time for which the Cardholder’s authorization is granted. You will not complete any recurring transaction after receiving: (i) a cancellation notice from the Cardholder; (ii) notice from Processor that authority to accept recurring transactions has been revoked; or (iii) a response that the Card is not to be honored.
   3. Multiple Sales Drafts. You will include a description and total amount of goods and services purchased in a single sales transaction on a single Sales Draft or transaction record unless: (i) partial payment is entered on the Sales Draft or transaction record and the balance of the transaction amount is paid in cash or by check at the time of transaction; or (ii) a Sales Draft represents an advance deposit in a Card transaction completed in accordance with this Agreement and the Operating Regulations.
   4. Partial Completion. i. Prior Consent. You will not accept for payment by Card any amount representing a deposit or partial payment for goods or services to be delivered in the future without the prior written consent of Processor. The acceptance of a Card for payment or partial payment of goods or services to be delivered in the future without prior written consent will be deemed to be a breach of this Agreement and cause for immediate termination of this Agreement for cause by Processor and/or Bank, in addition to any other remedies available under this Agreement, the Rules, the Laws or Operating Regulations. ii. Acceptance. If You have obtained prior written consent from Processor, then You will complete such Card transactions in accordance with the terms set forth in this Agreement, the Operating Regulations, and the Laws. Cardholders must execute one Sales Draft upon making a deposit with a Card and a second Sales Draft upon paying the balance. You will note on the Sales Draft, among other things, the words “deposit” or “balance” as appropriate. You will not deposit the Sales Draft labeled “balance” until the goods have been delivered to Cardholder or You have fully performed the services.
   5. Special Terms. If you limit refunds or exchanges, or impose other specific conditions for Card sales, You must provide proper disclosure to the Cardholder at the time of the transaction in accordance with applicable Laws. If applicable, the words “No Exchange. No Refund” or other applicable words must be clearly printed (in ¼” letters) on the Sales Draft near or above the Cardholder’s signature. NOTE: Making the disclosures required by this Section or any other Section of this Agreement does not eliminate your liability for Chargebacks or for any violations of the Laws (including consumer protection laws), Rules or Organization Regulations.
   6. Lodging. If you are a lodging merchant, please review the Operating Regulations carefully to ensure that you are complying with all rules applicable to such merchants. For example, You must provide the Cardholder with written confirmation of a guaranteed reservation, with such confirmation containing at least the following information: Cardholder’s name, Card number (truncated per applicable Laws and Operating Regulations), reservation confirmation number, anticipated arrival date and length of stay, and the cancellation policy. You are solely responsible for ensuring that You are in full compliance with all Laws, Rules and Operating Regulations applicable to lodging merchants.
   7. Future Delivery. You will not present any Sales Draft or other memorandum to Processor for processing (whether by electronic means or otherwise) that relates to the sale of goods or services for future delivery (including without limitation deposits) without prior written authorization from Processor. If Processor has given such written consent, You represent and warrant to Processor that You will not rely on any proceeds or credit resulting from such transactions to purchase or furnish goods or services. You will maintain sufficient working capital to provide for the delivery of goods or services at the agreed upon future date, independent of any credit or proceeds resulting from Sales Drafts or other memoranda taken in connection with future delivery transactions.
   8. Deposits of Principals. Your owners, partners, officers, and employees, and any guarantor of this Agreement, are prohibited from submitting Sales Drafts transacted on their own personal Cards, other than transactions arising from bona fide purchases of goods or services in the ordinary course of your business.
   9. Internet and ACH Transactions. i. Internet. You must receive written consent from Processor to process transactions using the internet (“Internet Transactions”). If you obtain such written consent, You shall not process Internet Transactions unless the transactions have been encrypted by a third-party vendor acceptable to Processor, in Processor’s sole and absolute discretion. If You submit Internet Transactions without Processor’s written consent or through a third-party vendor not acceptable to Processor, then Processor may immediately terminate this Agreement for cause. If You have indicated on the Application that You will be submitting Internet Transactions, You acknowledge that You have received and fully reviewed a copy of the PCI-DSS and other manuals related to the Data Security Regulations. You agree that You are, and will remain, fully compliant with the Data Security Regulations, including but not limited to undertaking the required annual or quarterly self-assessments, Web infrastructure scans or penetration tests, as appropriate. All Internet transactions must comply with all applicable Data Security Regulations. You agree that Internet Transactions are high risk and subject to a higher incidence of Chargebacks. You are solely and fully liable for all Chargebacks and claims, causes of action, liabilities, and losses arising out of or relating to Internet Transactions, whether or not: (i) Internet Transactions have been encrypted; or (ii) You have obtained written consent from Processor to engage in such transactions. Encryption is not a guarantee of payment and will not waive any provision of this Agreement, otherwise validate a fraudulent transaction, or otherwise reduce, impact or eliminate your liability under this Agreement. You must offer Cardholders a secure transaction method, such as Secure Sockets Layer (SSL) or 3-D Secure or any other PCI compliant encryption standard. All communication costs related to Internet Transactions will be your sole responsibility. You agree that Processor will not manage the Internet telecommunications link, and that it is your sole responsibility to manage that link. Other than a terminal help desk, You also understand and agree that Processor does not have a seven day per week, 24-hour operation. All Internet Transactions will be settled by Bank into a depository institution of the United States in U.S. currency. Use of software or hardware that has connectivity to the Internet or any external network that interacts in any way with the services provided by Processor or Bank under this Agreement poses an increased risk and Merchant assumes all liability and shall be solely liable for all claims, causes of action, liabilities and losses resulting from the use of such software or hardware. ii. Requirements. For goods to be shipped on Electronic Commerce (“EC”) transactions, You must obtain written authorization up to seven (7) calendar days prior to the shipment date. You need not obtain a second authorization if the Sales Draft amount is within 15% of the authorized amount, provided that the additional amount represents shipping costs. Further, your Web site must contain all of the following information: (a) complete description of the goods or services offered; (b) returned merchandise and refund policy; (c) customer service contact, including electronic mail address and/or telephone number; (d) transaction currency (e.g., U.S. or Canadian dollars); (e) if known, export or legal restrictions; (f) consumer data privacy policy; (g) your security method for transmission of payment data; (h) all accepted card brand logos in full color; (i) the address of your permanent establishment and your country of domicile on the same screen view as the checkout screen used to present the total purchase amount, or within the sequence of Web pages the Cardholder accesses during the checkout process; and (j) your delivery policy. If You store cardholder account numbers, expiration dates, and other personal cardholder data in a database, You must follow the Operating Regulations, Data Security Regulations, Laws and Rules, including, without limitation, all PCI-DSS requirements relating to securing such data. You agree to defend, hold harmless, indemnify and reimburse Processor and Bank immediately for any claims, causes of action, liabilities, losses, assessments and/or fines arising out of or relating to any breach of this Section 8.
   10. Amex OptBlue. If you have selected the Processor’s Amex OptBlue Program in the Application, You must comply with the additional terms and conditions set forth in Exhibit 1 to this Agreement. Unless Processor agrees in writing to the contrary, it will not provide You with access to authorization and/or data capture services directly from Amex.
   11. Nonbankcard Services. From time to time, Processor may offer You certain additional products and services which may or may not be related to the processing of Card transactions. If you wish to decline the offer, You will inform Processor in writing of your desire to decline the product or service within the time period Processor indicated in the offer. Your failure to decline the offer in writing within the prescribed time period shall constitute acceptance of the offer and You will be liable to Processor for all products or services provided in connection with, arising out of, or relating to the offer.
9. Merchant Account; Settlement.
   1. Establishment and Authority. You will establish and maintain with Bank (or with an ACH- receiving depository institution acceptable to Bank) one or more commercial checking account(s) to facilitate payment for Card transactions (collectively, the “Merchant Account”). The Merchant Account must accept electronic payment, debit, or credit transfer processed through the Automated Clearing House service conducted by the Federal Reserve. You will maintain sufficient funds in the Merchant Account to accommodate all transactions contemplated by this Agreement, including, but not limited to, fees, fines, and Chargebacks. You irrevocably authorize Processor to (i) access the Merchant Account; (ii) deduct, offset, setoff, electronically debit or otherwise remove funds from the Merchant Account for Chargebacks or any fees, fines or penalties relating to Chargebacks in accordance with this Agreement or the Operating Regulations; (iii) deduct, offset, setoff, electronically debit or otherwise remove funds from the Merchant Account to pay, reimburse, or cover any funds owed to Processor or Bank, including, without limitation, funds owed for any fees, charges, penalties, Chargebacks, costs, or expenses, duty to defend, or indemnification obligations; and (iv) deduct, offset, setoff, electronically debit or otherwise remove funds from the Merchant Account to pay, reimburse, or cover any funds owed to Processor or Bank for any duty to defend or indemnification obligations owed under this Agreement. You also authorize vendors or agents of Processor or Bank to deduct, offset, setoff, debit or otherwise remove funds from the Merchant Account as appropriate or permitted under this Agreement. The authority provided under this Section 9 will remain in effect for two years after termination of this Agreement, whether or not You have notified Processor of a change to the Merchant Account. You must obtain prior written consent from Processor to change a Merchant Account. If You change the Merchant Account without Processor’s prior written consent, Processor may immediately terminate the Agreement for cause and may take any other action it deems reasonably necessary, in its sole discretion, to protect itself and Bank.
   2. Deposits. Processor and Bank will only settle transactions completed in accordance with the terms and conditions of this Agreement. Processor or Bank has the right to delay, suspend or withhold, within their sole and absolute discretion, crediting the Merchant Account with funds evidenced by submitted Sales Drafts. You authorize Processor to initiate reversal or adjustment entries and initiate, terminate or suspend such entries as may be reasonably necessary to grant You conditional credit for any entry. Processor or Bank will make deposits to the Merchant Account pursuant to this Agreement and the ACH Authorization. By executing this Agreement, You authorize and appoint Processor and Bank to act as your agent to collect Card transaction amounts from the Card issuing financial institution. As the collecting agent, Processor or Bank, in its sole discretion, may grant You provisional credit for transaction amounts, in the process of collection, subject to receipt of final payment by Processor or Bank, and subject to all Chargebacks, returns, fees, and fines.
   3. ACH Authorization. By executing this Agreement, You authorize Processor and Bank to initiate debit/credit entries to the Merchant Account, the Reserve Account, or any other account maintained by You at any institution that is a receiving member of ACH, all in accordance with this Agreement (the “ACH Authorization”). This authorization will remain in effect after termination of this Agreement and until all of your obligations to Processor and Bank have been paid in full. In the event You change the Merchant Account, within ten (10) business days of the change You will notify Processor in writing of the change, provide Processor with your new Merchant Account information, and this authorization will apply to the new Merchant Account. In connection with the foregoing:
      1. You agree to be bound by the terms of the operating rules of the National Automated Clearing House Association, as amended from time to time.
      2. You waive any claims for loss or damage arising out of any charges or debits to the Merchant Account. Processor shall be entitled to collect a fee from You in the amount of $25 for each returned ACH Transaction for lack of funds or for any other reason not attributable to the gross negligence or willful misconduct of Processor.
      3. You acknowledge and agree that neither Bank nor Processor will be liable for any delays in receipt of funds or errors in debit and credit entries attributable to You or any other person. You further acknowledge and agree that transfers to and from the Merchant Account shall be based on the account number and routing number supplied by You. Neither Processor or Bank is responsible for detecting errors in any Merchant Account information you provide, including the account numbers and routing numbers, even if any of those numbers do not correspond to the actual account or financial institution identified by name.
10. Security Interest, Reserve Account, Recoupment, and Set-Off.
    1. Security Interest. This Agreement constitutes a security agreement under the Uniform Commercial Code. By executing this Agreement, You grant to Bank and Processor a security interest in and first priority lien upon: (i) all funds at any time in the Merchant Account, regardless of the source of such funds; (ii) all funds at any time in the Reserve Account (as defined below), regardless of the source of such funds; (iii) present and future Sales Drafts; and (iv) any amount which may be due to You under, arising out of, or relating to this Agreement, including, without limitation, all rights to receive any payments or credits under this Agreement (collectively, the “Secured Assets”). You agree to provide other security to Processor and Bank upon request. You authorize Processor and/or Bank to file a financing statement in all applicable jurisdictions necessary to perfect the security interest in the Secured Assets. You represent and warrant that no other person or entity has a security interest in the Secured Assets. This security interest and liens will secure all of your obligations under this Agreement and any other agreements now existing or later entered into between You, on the one hand, and Processor, or Bank, on the other hand, including, but not limited to, your obligation to pay any amount due to Processor or Bank. This security interest may be invoked, levied upon, or exercised by Processor or Bank without notice or demand of any kind by, among other things, Processor or Bank making an immediate withdrawal or freezing of the Secured Assets or by the withdrawal, debit or removal of funds. Further, with respect to the Secured Assets, Processor and Bank will have all rights afforded under the Uniform Commercial Code, any other applicable law and equity. You shall obtain from Processor and Bank written consent prior to granting a security interest of any kind in the Secured Assets to a third party. You agree that this is a contract of recoupment, and neither Processor nor Bank are required to file a motion for relief, or otherwise seek relief, from a bankruptcy action automatic stay to realize, obtain, levy, debit or otherwise take ownership or possession of any of the Secured Assets. Nevertheless, You covenant, warrant and agree not to contest or object to any motion for relief from the automatic stay filed by Processor or Bank.
    2. Reserve Account. i. Establishment. If requested by Processor or Bank, You will deposit into a non-interest-bearing deposit account designated by Processor or Bank (“Reserve Account”) funds sufficient to satisfy your current and reasonably estimated future obligations to Processor or Bank. Processor or Bank may establish a Reserve Account by depositing proceeds of your sales transactions into a Reserve Account if it determines in good faith that a reserve is warranted to ensure the interests of Processor or Bank are adequately secured and/or protected, including, but not limited to, a determination that (i) transactions are outside the risk parameters indicated by You in this Agreement; (ii) there has been a change in your business or transactions that raises concerns regarding your ability to pay Processor or Bank all amounts due or potentially due in the future; (iii) you breached this Agreement, the Laws or the Operating Regulations; or (iv) there has been Excessive Activity. By executing this Agreement, You also authorize Processor and Bank to (i) debit the Merchant Account, (ii) establish the Reserve Account or (iii) deposit funds into the Reserve Account. You also authorize Processor and Bank to deposit funds into the Reserve Account that Processor or Bank would otherwise be obligated to pay You if Processor or Bank determines such action is reasonably necessary to protect one or both of their interests, with such authorization including, without limitation, the right to debit funds from the Merchant Account and deposit them into the Reserve Account. You shall not be entitled to interest on any funds held in the Reserve Account. Rather, Processor shall be entitled to all interest generated by or paid to the Reserve Account. ii. Authorizations. Processor or Bank may in its sole discretion, and without notice to You, apply, debit, deduct, offset, or otherwise remove any amounts in the Reserve Account to reduce or satisfy any amounts You owe under this Agreement or under any other agreement between You and Processor or Bank. iii. Funds. Unless You obtain Processor’s prior written consent, You shall not debit, transfer, spend, use, dispose of, pledge, encumber, hypothecate, or otherwise grant any third party an interest in, the Funds in the Reserve Account until at least 270 days following termination of this Agreement. This 270-day period shall have no bearing on your liabilities, duties or obligations to Processor in the event of a breach of this Agreement; that is, it is simply a time period during which the funds in the Reserve Account will be held. Processor or Bank will have sole control of and over the Reserve Account and the funds contained therein. Processor shall be entitled to collect from Merchant, as either a debit to your Merchant Account or charge against funds held in your Reserve Account, fees necessary to cover all fees, costs, and expenses arising out of or relating to the establishment, maintenance and administration of your Reserve Account.
    3. Recoupment and Set-Off. To the extent not already permitted by applicable Law, You authorize Processor and Bank to have the right of recoupment and set-off. This means that Processor and Bank may recoup and set off from any amounts that are due and owing from You to Processor or Bank from: (i) any amounts Processor or Bank would otherwise be obligated to deposit into the Merchant Account, and (ii) any other amounts Processor or Bank may owe you under this Agreement or any other agreement. You acknowledge that in the event of a bankruptcy proceeding, in order for You to provide adequate protection under Bankruptcy Code §362 to Processor, You must create and maintain the Reserve Account as required by Processor, and Processor and Bank have the right to offset against the Reserve Account for any and all obligations which You may owe to Processor and Bank, without regard to whether the obligations relate to Sales Drafts initiated or created before or after the filing of the bankruptcy petition.
    4. Remedies Cumulative. The rights and remedies conferred upon Processor and Bank in this Agreement are not intended to be, and shall not be, exclusive of each other. Rather, each and every right of Processor or Bank under this Agreement, at law or equity, will be cumulative and concurrent and in addition to every other right.
    5. Further Assurances. You agree to execute and deliver to Processor and Bank such instruments and documents as either Processor or Bank reasonably request to perfect the lien, security interest, and right of recoupment and set-off granted or contemplated by this Agreement.
11. Rates & Fees and Other Services.
    1. Rates & Fees. You will pay Processor all fees, costs and charges in accordance with the rates and fees set forth and provided for in this Agreement, including, without limitation, the Application and all schedules, addenda, and amendments and exhibits hereto or thereto (“Rates & Fees”). Such Rates & Fees will be calculated and electronically debited from the Merchant Account once each business day or each month, as solely determined by Processor, for the previous business day’s or monthly activity, or will be netted out from the funds due You under this Agreement. You agree that all Rates & Fees are considered accurate and final unless You dispute them in accordance with the provisions of this Agreement, including Section 7K. If You have any questions, concerns or uncertainty about any Rates & Fees, You are required to raise those questions, concerns or uncertainties with Processor in accordance with the requirements of Section 7K above. If You fail to do so, You fully and finally waive and release any claims, causes of action or damages incurred, arising out of, or relating to any Rates & Fees. For the avoidance of doubt:
       1. Tiered Pricing. In the event You select “Tiered Pricing” in the Application, You agree to pay to Processor, in return for the services provided hereunder, (a) the Processor Assessment, plus (b) the Card Networks Fees, plus (c) all other Rates & Fees that are not contained within subparagraphs (a) – (b) above. The determination of “Qualifying” and “Non-Qualifying” in Tiered Pricing shall be determined by Processor, in its sole discretion.
       2. Interchange Plus Pricing. In the event that You select “Interchange Plus Pricing” in the Application, You agree to pay, and will pay, to Processor, in return for the services provided hereunder, (a) the Processor Assessment, plus (b) Interchange, plus (c) the Card Network Fees, plus (d) all other Rates & Fees that are not contained within subparagraphs (a) – (c) above.
    2. Change in Your Business. The Rates & Fees are based upon, among other things, assumptions regarding the anticipated annual volume and average transaction size of your business, as well as the anticipated number of chargebacks. In the event that the actual volume, transaction size, number of chargebacks differs from any information in the Application, including the information contained in the Application, or any other information provided by you is inaccurate, notwithstanding anything to the contrary in this Agreement, Processor shall have the right, in its sole and absolute discretion and, to adjust the Rates & Fees without prior notice.
    3. Other Amounts Owed. You will immediately pay Processor or Bank (i) any losses incurred by Processor or Bank attributable to, arising out of, or relating to this Agreement, including, but not limited to Chargebacks, fines and penalties imposed by any Card Network, all non-sufficient fund fees, and/or ACH debits that overdraw the Merchant Account, the Reserve Account, or any other account You have at Bank or at any other financial institution or (ii) for any amount You owe Processor or Bank under this Agreement or under any other contract, note, guaranty, instrument or dealing of any kind now existing or later entered into between You, on the one hand, and Processor or Bank, on the other hand. This Section applies whether your obligation is direct, indirect, primary, secondary, fixed, contingent, joint, or several. In the event such ACH does not fully reimburse Processor or Bank for the amount owed, the outstanding balance shall be immediately due and payable, and You will immediately pay Processor or Bank such amount.
    4. Rate or Fee Amendments. Processor or Bank, at its sole and absolute discretion, may amend, add to or modify, the Rates & Fees from time to time and upon 30 days’ notice, which notice shall be delivered via mail to the billing address on file for you with Processor or via email transmission. Such notice may be sent separately or may be included as part of or sent with your monthly statement which shall be sent either by mail or made available in Your portal. You may terminate this Agreement without further cause or penalty by notifying us that you are terminating this Agreement prior to the effective date of the amendment of the Rate & Fees. If You choose to do so, You must notify Processor that you are terminating for this reason so that Processor can may waive any early termination fee that might otherwise apply. If You, however, submit a transaction to Processor after the effective date of the amendment of the Rates & Fees, You will be deemed to have accepted the amended Rates & Fees, and to consent to the amended Rates & Fees through termination of this Agreement. Further, notwithstanding anything to the contrary in this Section or Agreement, Processor is entitled to immediately pass through to You any increases to Interchange or Card Network Fees imposed by Visa, Mastercard, AMEX, Other Card Networks or any fee increases by telecommunication vendors without giving You the right to terminate this Agreement or reject those fee increases. No notice will be provided to You with respect to changes to Interchange, Card Network Fees or fees charged by telecommunication vendors that are passed through to you by Processor.
    5. Taxes. You are also obligated to pay all taxes and other charges imposed by any governmental authority on the Services. All consideration under this Agreement is exclusive of any sales, transfer, value-added, goods or services tax or similar gross receipts-based tax (including any such taxes that are required to be withheld, but excluding all other taxes based upon or calculated by reference to net income) imposed against or on the Services (“Sales Taxes”), and such Sales Taxes will be added to the consideration where applicable. If Processor or Bank is required to pay any of taxes or other charges, including interest, fines or penalties, owed by You, the amount paid by Processor or Bank on behalf of You shall become immediately due and payable by You and Processor or Bank shall be entitled to recover such amount from You immediately after payment thereof.
    6. Chargeback Fee. You agree that Processor or Bank will assess the Chargeback fee set forth in the Application as the “Chargeback Fee (Per Chargeback)” fee for each Chargeback. Furthermore, you authorize and consent to Processor or Bank assessing You and requiring You to pay or reimburse Processor or Bank for paying any fines imposed by Card Network plus a fee for processing such fine as may be required by Processor or Bank at its sole discretion.
    7. Authorization and Capture Fees. All authorization fees will be charged for each transaction that You attempt to authorize. All capture fees will be charged for each transaction that You transmit to Processor for settlement. If You are being billed a combined fee for both the authorization and capture of a transaction, the authorization and capture must be submitted as a single transaction, otherwise the authorization and the capture will each be charged separately. You are responsible for utilizing software or services that will correctly submit these transactions to achieve the combined billing.
    8. Annual Renewal. You agree that Processor will charge and is entitled to collect from You a nonrefundable annual renewal fee each year in the month set forth in the Application, or in such month as otherwise designated in the Rates & Fees, in the amount set forth in the Rates & Fees.
    9. UCC Fee. In the event that Processor receives a notice from a secured creditor of yours requesting that funds due to You under this Agreement be paid to the secured creditor or held pending further instruction from the secured creditor, You agree to pay Processor a fee in the amount of Five Hundred and Ninety-Nine Dollars ($599.00) to cover at least some of the time, costs and expenses incurred by Processor in handling such notice. Such fee shall be in addition to any other fees due to Processor under this Agreement and in addition to any amounts that are payable to such secured creditor.
12. Application, Indemnification, Limitation of Liability.
    1. Application. You represent and warrant to Processor and Bank that all information in the Application You submitted to Processor, which is incorporated into this Agreement by reference, is correct and complete. You must notify Processor in writing of any changes of information in the Application, including but not limited to: any additional location or new business, the identity of principals and/or owners, the form of business organization (i.e., sole proprietorship, partnership), type of goods and services provided and how sales are completed (i.e., by telephone, by mail, in person at your place of business). The notice must be received by Processor or Bank within ten (10) business days of the change. You will provide updated information to Processor or Bank within a reasonable time upon request. You are solely liable to Processor and Bank for all claims, causes of action, liabilities, losses and expenses incurred by Processor or Bank arising out of or relating to your failure to report changes. Processor and Bank retain the right to review your processing activity to confirm that You are processing transactions as stated in the Application, and to re-price or terminate its services based on changes to the facts stated in the Application.
    2. Indemnification. You agree to defend, indemnify and hold harmless Processor, the Bank and the Card Networks from and against any and all claims, damages, liabilities, fines, penalties and expenses, including, without limitation, attorneys’ fees and litigation/arbitration costs, arising out of or relating to (a) any act or omission by You or your employees, agents, representatives, subcontractors, or vendors including but not limited to, any intentional, negligent, fraudulent or deceptive acts or omissions; (b) any breach by you of the terms of this Agreement; (c) any fine or penalty imposed upon Processor or Bank by any third party related to any act or omission by you in connection with, arising out of, or relating to any Card transaction; (d) any violation by You, your employees, agents, subcontractors, or vendors of any applicable Laws, Operating Regulations, Data Security Regulations or Rules; and (e) any use of Optional Services by You.
    3. Limitation of Liability. The aggregate liability of Processor and Bank under this Agreement, whether to You or any other party, whatever the basis of the liability (including, without limitation, tort, contractual, statutory, regulatory, or otherwise), will not exceed in the aggregate ten times the difference between: (i) the amount of Rates & Fees Processor received from You during the month in which the transaction out of which the liability arose and (ii) assessments, Chargebacks, Interchange, Card Network fees and offsets against such fees which arose during that month. If more than one month is involved, the aggregate amount of Processor and Bank’s liability will not exceed the lowest amount determined in accordance with the previous sentence for any one month involved. IN NO EVENT WILL PROCESSOR, BANK, OR THEIR AGENTS, OFFICERS, DIRECTORS, OR EMPLOYEES BE LIABLE FOR LOSS OF PROFITS, INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES.
    4. Force Majeure. No party shall be liable for any default or delay in the performance of its obligations under this Agreement if and to the extent such default or delay is caused, directly or indirectly, by (i) fire, flood, earthquake, elements of nature or other acts of God; any terrorist attacks or outbreak or escalation of hostilities, war, riots or civil disorders in any country; (iii) any act or omission of the other party or any governmental authority; (iv) any labor disputes (whether or not employees’ demands are reasonable or within the party’s power to satisfy); or (v) the nonperformance by a person or entity for any similar cause beyond the reasonable control of such party, including without limitation, failures or fluctuations in telecommunications or other equipment. In any such event, the non- performing party shall be excused from any further performance and observance of the obligations so affected only for as long as such circumstances prevail, and such party continues to use commercially reasonable efforts to recommence performance or observance as soon as practicable. Notwithstanding anything to the contrary, in this Section or Agreement, your failure to receive payment or funds from a person or entity shall not excuse the performance of your obligations to Bank and/or Processor under this Agreement.
    5. DISCLAIMER OF WARRANTIES. EXCEPT AS EXPRESSLY PROVIDED FOR IN THIS AGREEMENT, NEITHER PROCESSOR NOR BANK MAKE ANY REPRESENTATION OR WARRANTY, STATUTORY OR IMPLIED, TO YOU OR TO ANY OTHER PERSON OR ENTITY. PROCESSOR AND BANK EXPRESSLY DISCLAIM, AND ARE NOT PROVIDING, ANY EXPRESS OR IMPLIED WARRANTY OF ANY KIND, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES REGARDING MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
13. Representation, Warranties and Covenants. You represent and warrant to Processor and Bank the following (which shall apply and remain true both at the time of execution and throughout the term of this Agreement):
    1. Information. All information contained on the Application, or any other document submitted to Processor or Bank by You, or on your behalf, is true and complete and properly reflects the business, financial condition, and the principal partners, owners or officers of Merchant. You are not engaged or affiliated with any business, products or methods of selling other than those set forth in the Application.
    2. Corporate Power. You and the person signing this Agreement have the authority to execute and perform this Agreement. This Agreement will not violate any Law or conflict with any other agreement to which You are subject.
    3. No Litigation. There is no action, suit, or proceeding pending, or to your knowledge threatened, which, if decided adversely, would impair your ability to carry on your business as it is now conducted, or which would adversely affect your financial condition or operations.
    4. Transactions. In addition to all other warranties and representations contained within this Agreement, the Laws, the Rules, and the Operating Regulations, with respect to each transaction and Sales Draft You submit to Processor, You warrant and represent that: ( i ) the transaction is bona fide, permissible under the Laws, the Rules and the Operating Regulations; (ii) the transaction involves the use of a Card for the purchase of goods or services from You and does not involve Cardholder obtaining cash from You unless allowed by the Operating Regulations and agreed to in writing by Processor; (iii) the amount charged for each Card transaction is not subject to any dispute, setoff or counterclaim; (iv) each Card transaction is only for respective merchandise or services (including taxes, but without any surcharge) sold, leased, or rented by You pursuant to your business as indicated on the Application and, except for any delayed delivery or advance deposit Card transactions expressly authorized by this Agreement, that merchandise or service was actually delivered to or performed for the Cardholder entering into that Card transaction simultaneously upon your accepting and submitting that Card transaction for processing; (v) You have no knowledge or notice of any fact or circumstance which would indicate that such Card transaction is fraudulent or not authorized by the Cardholder; and (vi) the transaction is made in accordance with this Agreement, the Rules, Laws, and Operating Regulations.
    5. Rule Compliance. You have complied with and will continue to comply with the Operating Regulations, Data Security Regulations, Laws and Rules.
    6. Business. You will not engage in or be affiliated with any business, products or methods of selling other than those set forth in the Application, without the prior written consent of Processor.
14. Audit, Financial Information and Personal Guarantors
    1. Audit. You authorize Processor, Bank and Card Networks to audit your records to confirm compliance with all of your obligations under the Agreement. You will obtain and submit a copy of an audit of your business within ten (10) days of any request by Processor, Bank or Card Networks.
    2. Financial Information. You and the personal guarantors authorize and consent to Processor and Bank making any credit inquiries regarding You or the guarantors that Processor or Bank consider reasonably necessary to review the acceptance and continuation of this Agreement. You and guarantors also authorize and consent to any person or credit reporting agency to compile information to answer those credit inquiries and to furnish that information to Processor and/or Bank.
    3. OFAC; USA PATRIOT ACT. You and the personal guarantors acknowledge that Bank is required by federal law to inquire with the Office of Foreign Asset Control (OFAC) of the U.S. Treasury Department if You, your principal owner(s), proprietor(s), officer(s) or the personal guarantor(s) are present on any lists maintained by OFAC. You and the personal guarantors authorize and consent Processor and Bank to obtain, verify, and record information that verifies the identity of such persons and entities and inquire whether any such persons or entities are present on any lists maintained by OFAC.
    4. Change of Control. You will give Processor written notice at least 60 days before: (a) You sell all or substantially all of your assets or (b) a person or entity becomes a beneficial owner with more than 25 percent of the combined voting power of your ownership interests or acquires voting control. You will provide Processor with information requested about a major asset sale or ownership change.
15. Third Parties.
    1. Services. You may be using special services or software provided by a third party to assist You in processing transactions, including authorizations and settlements, or accounting functions. You are solely responsible for assuring compliance with the requirements of any third party in accessing or using their products. This includes making sure You comply with any software updates. To the extent Processor and Bank have any responsibility for any transaction, that liability does not begin until the point in time Processor and Bank receive data about the transaction.
    2. Use of Terminals Provided by Others. You will notify Processor within three (3) business days if You decide to use electronic authorization or data capture terminals provided by any entity other than Processor or its authorized designee (third party terminals) to process transactions, including, without limitation, leasing a terminal from a third party. If you elect to use third party terminals, you agree (i) the third party providing the terminals will be your agent in the delivery of card transactions to Processor and Bank; and (ii) to assume full and sole responsibility and liability of any failure of that third party to comply with the Data Security Standards, Rules, Operating Regulations, Laws or this Agreement. Processor and Bank will not be responsible for any claims, causes of action, liabilities, losses or additional fees incurred by You or any third party arising out of or relating to any use, error, mistake, delay, or malfunction of a third-party terminal.
16. Terms and Termination.
    1. Term. The Agreement will become effective on the earlier of (i) the date Processor or Bank approve and assign You a Merchant Identification Number or (ii) the date Processor processes a transaction for You (“Effective Date”). By processing a transaction with, assisted by, or through Processor, You are agreeing to the terms and conditions of this Agreement. The Agreement will remain in effect for a period of 48 months (“Initial Term”) and, unless prohibited by applicable Law, will automatically renew for successive 24-month terms (“Renewal Term”), or such shorter period as provided by applicable Law, unless terminated as set forth below. You shall maintain a copy of this Agreement on file at your place of business.
    2. Termination. i. Without Cause. The Agreement may be terminated by either party to be effective at the end of the Initial Term or Renewal Term by giving written notice of the intention not to renew at least 90 days before the end of the then current term. This Agreement may be terminated immediately upon the request of any of the Card Networks’ request. Further, this Agreement may be terminated at any time with 30 days’ prior notice by Processor or Bank. ii. With Cause. The appropriate party or any of the Card Networks may terminate this Agreement immediately upon the occurrence of an Event of Default, defined below. Notice of a with cause termination must be provided in writing. Termination will be effective on the date specified by the notice. If this Agreement is terminated by Processor or Bank for any of the reasons set forth in this Section 16, Processor or Bank shall have no liability to You and You will not be entitled to any alleged or actual damages arising out of or relating to the termination.
    3. Events of Default. The following will constitute an event of default:
       1. Adverse Change. Any of Processor or Bank determine, in their respective good faith reasonable discretion, that there is a reasonable basis to conclude that (i) your financial condition has materially adversely changed; (ii) You cannot satisfy all of your duties and obligations under this Agreement, including, without limitation, your ability to pay all required Rates & Fees; (iii) your activities are not consistent with this Agreement, the Law, the Operating Regulations, Data Security Regulations or the Rules; or (iv) any events or circumstances significantly increase the risk to the Processor or Bank or creates harm or loss of goodwill to Processor or Bank.
       2. Security Impairment. Any guaranty, including any personal guaranty, supporting your obligations under this Agreement is revoked, withdrawn, or terminated or if Bank’s or Processor’s security for repayment becomes impaired for any reason.
       3. Garnishment. Your Merchant Account, Reserve Account, or any of your property in the possession of Processor and/or Bank, is garnished, levied upon or attached.
       4. Asset Assignment. You assign your assets generally for the benefit of creditors.
       5. Bankruptcy. A proceeding is commenced by or against You under any bankruptcy, insolvency or similar law seeking an order to adjudicate You bankrupt or insolvent or other relief with respect to You or your debts or seek appointment of a receiver or similar official for You or any substantial part of your assets.
       6. Breach. A party fails to perform a material obligation of this Agreement, and such failure continues for a period of 30 days after the breaching party receives notice of the breach.
       7. False Representation. Any representation and warranty is or becomes false or misleading in any material respect as of the date made or becomes false or misleading at any time during the term of this Agreement.
       8. Fraud. Processor or Bank reasonably determine that fraud has occurred or is occurring.
       9. Excessive Activity. There has been one Excessive Activity, as that term is defined in Section 7D.
       10. Prohibited Activity. You: (a) engage in fraudulent activity, (b) present transaction receipts that do not result from an act between you and a Cardholder (laundering), (c) enter into a this Agreement with a new name with the intent to circumvent the Law, Operating Regulations, Data Security Regulations or Rules, (d) engage in activity that causes Processor or Bank to violate the Law, Operating Regulations, Data Security Regulations or Rules, (e) engage in activity that results in one or more Card Networks prohibiting You from participating in the Card Network program, (f) exceed chargeback thresholds as provided by the Rules, (g) enter illegal or brand-damaging transaction activity into the payment system, (h) engage in any activity that may result in undue economic hardship or damage to the goodwill of Processor, Bank, and/or any Card Network, or (i) take any action or inaction that breaches or violates this Agreement, the Law, the Operating Regulations, Data Security Regulations or the Rules.
    4. Action Upon an Event of Default. Upon the occurrence of an Event of Default, Processor and Bank may take any or all of the following actions: (i) suspend processing privileges and terminate this Agreement; (ii) create a Reserve Account; and/or (iii) any other reasonable action deemed reasonably necessary by Processor and/or Bank to protect their interests or the interests of the Card Network or any consumer.
    5. Action Upon Termination.
       1. Terminated Merchant File/Reporting. You acknowledge and agree that Processor is required to report your business name and the name of Merchant’s principals to Visa, Mastercard and, if applicable, Other Networks when Merchant is terminated due to certain reasons listed in the Operating Regulations. You acknowledge and agree that neither Processor nor Bank shall be liable to You for any claims, causes of action, liabilities or damages arising out of or relating to Processor or Bank reporting You or your actions/inactions to any Card Network or proper governmental authority. You waive, and hold harmless Processor and Bank for, all claims and liabilities that may occur as a result of Processor and/or Bank complying with its reporting obligations under the Operating Regulations or the Laws.
       2. Merchant Account. All of Your obligations regarding accepted Sales Drafts will survive termination of this Agreement. You must maintain in the Merchant Account and the Reserve Account enough funds to cover all chargebacks, deposit charges, refunds and fees incurred by You for a reasonable time, which shall be no less than 270 days, unless otherwise agreed in writing by Processor and Bank. You authorize Processor to hold all funds due to You at the time of termination for at least 270 days and to apply those funds to satisfy your obligations under this Agreement. You authorize Processor and Bank to charge the Merchant Account, Reserve Account, or any other account maintained under this Agreement, for all such amounts. If the amounts available in the Merchant Account and Reserve Account are not adequate to satisfy your obligations to Processor or Bank, You will pay Processor and Bank the amount you owe upon demand, together with all costs and expenses incurred to collect the amount, including reasonable attorneys’ fees, costs and expenses and arbitrator fees, costs and expenses.
       3. Equipment. Within 14 business days of the date of termination, You must return, at your sole expense, all equipment owned by Processor, including equipment loaned to You by Processor. Further, within 14 business days of termination You shall pay Processor any amounts You owe Processor for equipment costs. In the event that You do not return equipment in accordance with this section, You shall be obligated to pay Processor, in addition to any applicable Early Termination fee set forth below, $525 for each piece of equipment that is not returned. You hereby authorize Processor to debit your Merchant Account and/or Reserve Account for any such amounts due or to invoice You for such amounts, in which case payments shall be due 10 days after the date of the invoice.
       4. Early Termination. If You terminate this Agreement before the end of the Initial Term, You shall be required to pay an early termination fee as liquidated damages (the “Termination Fee”) if so stated in the Application, unless prohibited by applicable Law. The Termination Fee shall be the amount, if any, stated in the Application at its Section 9 titled “Account Fees,” or if such amount exceeds the maximum amount allowed by applicable Law, then an amount equal to such maximum amount allowed by applicable Law. Provided, however, that if this Agreement is terminated by Processor and/or Bank as a result of Your violation of the Operating Regulations or applicable Law, the Termination Fee shall be $1500. If you terminate this Agreement during any succeeding Renewal Terms You will not be charged a termination fee. You will also not be charged a termination fee in the event you terminate this Agreement in a timely manner in accordance Section 11D and 20I of this Agreement. You agree that the Termination Fee is not a penalty; the damages for early termination being difficult or impossible to determine in advance and that such amounts are a reasonable pre-estimate of Processor’s anticipated loss or other financial harm caused by early termination.
17. Use of Trademarks and Confidentiality.
    1. Use of Trademarks. You agree and represent that: (i) your use of Visa, Mastercard and any Other Network marks will fully comply with the Operating Regulations; (ii) your use of Visa, Mastercard or any other Card Network’s promotional material will not indicate directly or indirectly, that Visa, Mastercard, Discover Network or any Other Network endorses any goods or services other than their own; and (iii) You will not refer to Visa, Mastercard, or any Other Network indicating eligibility for your products or services. If You have requested signage for the purpose of indicating acceptance of Debit Cards, You must display such signage in accordance with the applicable Operating Regulations. All point of sale displays or websites must, if required by the applicable Card Network, include either appropriate Card Network marks to indicate acceptance of Debit and Other Cards or Card Network approved signage to indicate acceptance of the limited acceptance category You have selected. You agree to comply, and will comply, with all requirements regarding marks, advertising and signage set forth in the applicable Operating Regulations for each Card Network. Your use of Card Network Marks will terminate effective with the termination of this Agreement or upon notification by the Card Network to discontinue such use or display. You acknowledge that your use or display of any Mark does not give you any ownership or interest in the Mark.
    2. Confidentiality.
       1. Cardholder Information. You will not disclose to any third party any Cardholders’ account information or other personal information except to an agent of yours assisting in completing a Card transaction that has agreed with You to be subject to the same confidentiality provisions herein applicable to You, or as required by the Operating Regulations or Laws. You must keep all material systems and media containing account, Cardholder, or transaction information (physical or electronic, including, but not limited to account numbers, card imprints, Sales Drafts, TIDs and other Personally Identifiable Information) in a secure manner, to prevent access by or disclosure to anyone other than Your authorized personnel. You must destroy in a manner that will render the data unreadable all such media that You no longer deem necessary or appropriate to store (except for Sales Drafts maintained in accordance with this Agreement, the Operating Regulations, Laws and Rules). Further, You must take all steps reasonably necessary to ensure Cardholder Data is not disclosed or otherwise misused. You will comply with all Laws, Data Security Regulations and the Operating Regulations with respect to ensuring the security of Cardholders’ account information.
       2. Prohibition. You will not use for your own purposes, will not disclose to any third party, and will retain in strictest confidence all non-public information and data belonging to or relating to the business of Processor and Bank (including without limitation the terms of this Agreement), and will safeguard such information and data by using the same degree of care that You use to protect your own confidential information. Non-public information shall refer to information that is not generally available to the public. If You have requested BIN information, and Processor and/or Bank elects in their sole discretion to provide such information to You, unless otherwise provided by laws, You must only use this BIN information for product identification purposes at the point of sale, and not disclose this proprietary and confidential BIN information to any third party without prior written permission from Processor, Bank, and, if applicable, the Card Networks.
       3. Transfer. In the event of a failure of your business, including bankruptcy, insolvency, or other suspension of business operations, You must not sell, transfer, or disclose any materials that contain Cardholder Data or other Card transaction information to third parties. You must either return this information to Processor or provide acceptable proof of destruction of this information to Processor.
       4. Return to Processor. All promotional materials, advertising displays, emblems, Sales Drafts, credit memoranda and other forms supplied to You by Processor and/or Bank and not purchased by you or consumed in use will remain the property of Processor and will be immediately returned to Processor upon termination of this Agreement. You will be fully and solely liable for any and all claims, causes of action, liabilities, and losses suffered or incurred by Processor or Bank arising out of or relating to your failure to return or destroy such materials following termination.
       5. Passwords. If you received or receive a password from Processor to access a Processor database, gateway, terminal or other similar device or software, You will: (i) keep the password confidential; (ii) not allow any other entity or person to use the password to gain access to the Processor database, gateway, terminal or other similar device or software; (iii) be solely liable for all action taken by any user of the password; and (iv) notify Processor in writing if you believe the confidentiality of the database, gateway, terminal or other similar device or software, or your information was compromised by using the password (with such notice being provided as soon as possible but in no event later than two (2) business days after You obtain such belief). You will also keep your merchant identification number confidential and maintain it in a secure location and You will not use it for any other purpose other than as authorized by Processor, Bank or the applicable Card Network.
18. PIN Based Debit
    1. Honoring PIN-Debit Cards. You shall not require Cardholders to provide personal information (such as telephone number or address) as a condition for honoring a PIN-Debit Card, unless required by the Laws, Rules or Operating Regulations. You may not require or request the Cardholder’s signature or any other means of verifying the Cardholder’s identity. Merchant shall place the PIN entry device in an area accessible by all Cardholders and that will reasonably prevent others, including your employees, from observing the PIN.
    2. PIN-Debit Card Sales Drafts.
       1. Procedures. You shall deliver to the Cardholder at the time of a sale a true and completed copy of the Sales Draft evidencing a sale involving use of a PIN- Debit Card (“PIN-Debit Sales Draft”). The PIN-Debit Sales Draft must comply with the Operating Regulations and Laws. The following information must be included on the PIN-Debit Sales Draft: (i) the PIN-Debit Card account number; (ii) your DBA name; (iii) your city and state; (iv) the amount of sale; and (v) the sale date. A PIN-Debit Sales Draft shall be made available to the Cardholder at each terminal. You may not require or request the Cardholder to provide or disclose their PIN in any oral or written manner to You or Your employees. You shall not impose any fee or charge for a PIN-Debit Card transaction without the prior written consent of Processor or Bank.
       2. Reversal. A sale may be reversed or voided electronically, but only if such reversal/void is entered prior to midnight of the calendar day on which the sale was initiated. To effect reversal or void, Cardholder must re-enter the PIN, the magnetic stripe reader or EMV chip reader must read the card, and You must transmit the trace number and the exact dollar amount of the sale to be reversed or voided. Any reversal or void by You must be initiated with You.
       3. Returns. All returns shall be processed in accordance with your normal procedures except that You or Cardholder shall not attempt to reverse a previously approved transaction unless otherwise permitted in accordance with the applicable Card Network’s Operating Regulations. Any sale known by You to be erroneous should be canceled and re-billed in the Cardholder’s presence.
       4. Balance Inquiry. Balance inquiries may be performed only by the Cardholder at a Cardholder- operated terminal and shall at all times require the Cardholder to enter the PIN and use the magnetic stripe reader or EMV chip reader.
    3. Distribution and Storage of Information. You shall store all such PIN-Debit Sales Drafts in accordance with applicable Operating Regulations Rules and Laws. You shall destroy or make unreadable all material containing Cardholder account numbers. There are no voice authorizations for PIN-Debit Card transactions and no manually imprinted PIN-Debit Sales Drafts. Merchant may not store Cardholder’s PIN in any manner.
    4. Promotional Materials. You will adequately display promotional materials to inform the public that PIN- Debit Cards will be honored by Merchant.
    5. Equipment. You shall take all necessary steps to ensure all POS Devices and PIN entry devices operated in all locations:
       1. are placed in an area accessible to all Cardholders;
       2. are available for use whenever Merchant is open for business;
       3. will function with minimal error, meeting all applicable technical specifications and security regulations, Laws, Operating Regulations, and industry standards;
       4. will require the Cardholder to enter the Cardholder’s PIN at or near the checkout location when initiating a POS transaction; and
       5. when PINs are used in conjunction with any store and forward transaction or resubmission You must insure they are encrypted and stored within a tamper- resistant security module and if your authorization system is capable of store and forward, it must comply with the applicable Operating Regulations regarding this function. Processor, Bank, Card Networks and Card issuers shall not be liable for any losses suffered by You or any third party arising from or relating to the use of the store and forward function. A PIN must never be logged in any form as a function of software either in the clear or encrypted.
    6. Supply of Information. Merchant must submit all information requested by Processor, Bank or any Card Network including, but not limited to, lists and mailing addresses of terminals. You shall not sell, purchase, provide, or exchange account number information in any form, including, but not limited to, transaction receipts, carbon copies of transaction receipts, mailing lists, or tapes to any third party other than to your agents for the purpose of assisting You in your business, or to the Card Networks, Processor or Bank or pursuant to a government request.
    7. Left PIN-Debit Cards. PIN-Debit Cards that are inadvertently left at your location must be held under dual control during the time they are retained. PIN- Debit Cards inadvertently left at your location shall be returned to the Cardholder by You only under the following conditions: (A) the Card was inadvertently left by the Cardholder at an on premise location, (B) the Cardholder requests the Card within 1 business day, and (C) the Cardholder provides 2 forms of current identification, at least 1 of which is a photo identification. If the Cardholder has not requested the Card within 1 business day, the Card shall be destroyed by cutting it in half through the stripe.
19. DISPUTE RESOLUTION (READ THIS SECTION CAREFULLY AS IT IMPACTS YOUR LEGAL RIGHTS)
    1. MANDATORY ARBITRATION: UNLESS YOU CHOOSE TO OPT OUT PURSUANT TO SECTION 19A.VII BELOW OF THE MANDATORY ARBITRATION PROVISION IN THIS SECTION 19A (THE “ARBITRATION PROVISION”), YOU, PROCESSOR AND BANK AGREE THAT ANY AND ALL DISPUTES SHALL BE RESOLVED EXCLUSIVELY THROUGH FINAL AND BINDING ARBITRATION, AND NOT BY A COURT OR JURY; PROVIDED, HOWEVER, THAT YOU, PROCESSOR OR BANK MAY ASSERT CLAIMS DIRECTLY IN PUERTO RICO STATE COURTS IF THE CLAIMS ARE ELIGIBLE FOR ADJUDICATION PURSUANT TO RULE 60 OF THE PUERTO RICO CIVIL PROCEDURE RULES (“RULE 60”) AND SO LONG AS THE MATTER REMAINS SUBJECT TO SUMMARY PROCEEDINGS UNDER RULE 60 AND PROCEEDS ONLY ON AN INDIVIDUAL (NOT CLASS OR REPRESENTATIVE) BASIS. THIS MANDATORY ARBITRATION PROVISION APPLIES TO ANY AND ALL DISPUTES, WHETHER BETWEEN YOU, PROCESSOR, AND BANK OR ANY SUBSET OF THOSE ENTITIES. THE TERM “DISPUTE” SHALL BE DEFINED AS SET FORTH IN PARAGRAPH 1(R) AND THUS INCLUDES ALL DISPUTES BETWEEN THE PARTIES, LEGAL AND OTHERWISE, NOT JUST DISPUTES AS DEFINED BY VISA.
       1. You, Processor and Bank each waive the right to a trial by jury and any right to have a Dispute heard in court. Instead, You, Processor and Bank agree to have all Disputes resolved by a neutral third-party arbitrator. In arbitration, Disputes are resolved by an arbitrator instead of a judge or jury, discovery is more limited than in court, and the arbitrator’s decision is subject to limited review by courts. The arbitrator’s award can be confirmed in any court of competent jurisdiction.
       2. IF ANY OF YOU, PROCESSOR AND BANK INTENDS TO SEEK ARBITRATION UNDER THIS AGREEMENT, THE PARTY SEEKING ARBITRATION MUST FIRST NOTIFY THE OTHER PARTY OF THE DISPUTE IN WRITING AT LEAST 60 DAYS IN ADVANCE OF INITIATING THE ARBITRATION. NOTICE TO PROCESSOR SHOULD BE SENT TO: 100 CARR. 199 STE. 101, SAN JUAN, PR 00926, ATTENTION: GENERAL COUNSEL. THE NOTICE MUST INCLUDE ENOUGH INFORMATION TO ALLOW US TO IDENTIFY YOUR MERCHANT ACCOUNT AS WELL AS TO ASSESS AND ATTEMPT TO RESOLVE YOUR CLAIM, INCLUDING YOUR NAME, THE CORRESPONDING MERCHANT IDENTIFICATION NUMBERS, A DESCRIPTION OF THE CLAIM, THE SPECIFIC FACTS SUPPORTING THE CLAIM, THE DAMAGES YOU CLAIM TO HAVE SUFFERED AND THE RELIEF YOU ARE SEEKING. THE NOTICE REQUIREMENT IS DESIGNED TO ALLOW PROCESSOR OR BANK TO MAKE A FAIR, FACT-BASED OFFER OF SETTLEMENT IF IT CHOOSES TO DO SO. YOU CANNOT PROCEED TO ARBITRATION UNLESS YOU PROVIDE THIS INFORMATION. YOU MAY CHOOSE TO BE REPRESENTED BY AN ATTORNEY OR OTHER PERSON AS PART OF THIS PROCESS, BUT IF YOU DO YOU MUST SUBMIT A LETTER AUTHORIZING US TO DISCUSS YOUR DISPUTE AND ACCOUNT INFORMATION WITH THIS ATTORNEY OR OTHER PERSON. THE SUFFICIENCY OF THIS NOTICE IS AN ISSUE TO BE DECIDED BY A COURT PRIOR TO THE FILING OF ANY DEMAND FOR ARBITRATION. IF YOU HAVE PROVIDED THIS INFORMATION AND WE ARE UNABLE TO RESOLVE OUR DISPUTE WITHIN 60 DAYS, EITHER PARTY MAY THEN PROCEED TO FILE A CLAIM FOR ARBITRATION.
       3. The arbitration shall be conducted by a single arbitrator, whose award may not exceed, in form or amount, the relief allowed by applicable Law. The arbitrator shall have at least ten (10) years’ experience in commercial litigation. The arbitrator shall issue his/her final award in a written and reasoned decision to be provided to each party to the arbitration. In his/her decision, the arbitrator shall award the prevailing party its reasonable attorneys’ fees and expenses, as well as all arbitration fees, costs and expenses; provided, however, that neither Processor nor Bank shall be entitled to recover attorneys’ fees or expenses in an arbitration brought by You if the amount of damages sought, exclusive of attorneys’ fees and costs and arbitration fees and costs, is under $25,000, provided, however, that if the arbitrator finds that either the substance of your claim or the relief sought in the arbitration demand is frivolous or brought for an improper purpose (as measured by the standards set forth in Federal Rule of Civil Procedure 11(b)), then the payment of all such fees will be governed by the Arbitration Rules. The arbitrator shall not have the authority to award punitive, exemplary, consequential, special or incidental damages, including, without limitation, lost profits or lost business value.
       4. Unless the parties to the arbitration mutually agree to a different location in writing, all arbitrations under this Agreement shall be conducted in San Juan, Puerto Rico, provided, however, that if: (a) the business address that appears in your Application is located in the United States Virgin Islands and (b) the matter of controversy, exclusive of attorneys’ fees and costs and arbitration fees and costs, is under $75,000, then the arbitration shall be conducted in the island of Saint Thomas, United States Virgin Islands. The arbitration shall be conducted by the American Arbitration Association (“AAA”). The AAA’s Commercial Arbitration Rules (“Arbitration Rules”) shall apply. The Arbitration Rules are available at www.adr.org. A form for initiating arbitration is available at www.adr.org.
       5. Any discovery sought in connection with arbitration must be expressly approved by the arbitrator only upon a showing of need by the party seeking discovery. All aspects of the arbitration shall be treated as confidential. The parties to the arbitration and the arbitrator may disclose the existence, content, or result of the arbitration only as expressly provided by the Arbitration Rules. The parties to the arbitration shall maintain the confidential nature of the arbitration proceeding and the award, including the hearing, except as may be necessary to prepare for or conduct the arbitration hearing on the merits, or except as may be necessary in connection with a judicial challenge to an award or its enforcement, or unless otherwise required by law or judicial decision. Accordingly, the parties to the arbitration acknowledge and agree that a violation or threatened violation of this nondisclosure covenant will cause irreparable injury to the other party and that, in addition to any other remedies that may be available, in law, in equity, or otherwise, the non-breaching Party shall be entitled to obtain injunctive relief against the threatened breach of this covenant or the continuation of any such breach by the other party.
       6. This arbitration provision is entered into pursuant to the Federal Arbitration Act (“FAA”), which shall govern its interpretation and enforcement. To the extent any issues arise as to which the FAA does not apply or govern, this “Dispute Resolution” section and all substantive claims shall be governed by and interpreted according to the laws of the Commonwealth of Puerto Rico, without regard to principles of conflicts of law. The arbitrator shall decide all issues of interpretation, scope, and application of this “Dispute Resolution” section and the arbitration provision, with the exception of deciding whether the Arbitration Class Action Waiver in Section 19A.vii is valid or enforceable. Any question regarding the validity or enforceability of Paragraph 19A.i shall be resolved by a state or federal court located in San Juan, Puerto Rico, which You, Processor and Bank agree shall be the sole and exclusive jurisdiction for any such question to be resolved (and for which You, Bank and Processor consent to the Court’s jurisdiction and waive any right to challenge jurisdiction or venue). This Dispute Resolution section shall survive termination of this Agreement. The agreement to arbitrate is intended to be broadly interpreted.
       7. OPT OUT OF MANDATORY ARBITRATION PROVISION: AGREEING TO THIS ARBITRATION PROVISION IS NOT A MANDATORY CONDITION FOR THE SERVICES OR YOUR CONTRACTUAL RELATIONSHIP WITH PROCESSOR AND BANK UNDER THIS AGREEMENT. IF YOU DO NOT WANT TO BE SUBJECT TO THE ARBITRATION PROVISION OF THIS SECTION 19A, YOU MAY OPT OUT OF THE ARBITRATION PROVISION AS SET FORTH HERE. TO DO SO, WITHIN THIRTY (30) DAYS OF THE EFFECTIVE DATE (THE “OPT OUT DEADLINE”), YOU MUST SEND AN EMAIL TO [email protected] STATING YOUR INTENT TO OPT OUT OF THIS ARBITRATION PROVISION, AS WELL AS YOUR NAME AND THE MERCHANT IDENTIFICATION NUMBER ASSIGNED TO YOU PURSUANT TO THIS AGREEMENT. ANY OPT-OUT RECEIVED AFTER THE OPT-OUT DEADLINE WILL NOT BE VALID AND YOU WILL BE REQUIRED TO PURSUE ANY DISPUTE IN ARBITRATION AS SET FORTH IN THIS SECTION 19A. YOUR DECISION TO OPT OUT OF THIS ARBITRATION PROVISION DOES NOT AFFECT ANY OBLIGATION YOU HAVE TO ARBITRATE DISPUTES PURSUANT TO ANY OTHER AGREEMENT YOU HAVE WITH PROCESSOR, BANK OR ANY OF THEIR RESPECTIVE AFFILIATES.
       8. ARBITRATION CLASS ACTION WAIVER: You, Processor and Bank agree that arbitration shall proceed solely on an individual basis and that any Dispute shall not be arbitrated as a class action, shall not be consolidated with the claims of any other party, and shall not be arbitrated on a consolidated, representative, or private attorney general basis. The award or decision in the arbitration will not have any preclusive effect as to issues or claims involved in any proceeding between Processor and anyone who is not a named party to the arbitration. The arbitrator may award relief only in favor of the individual party seeking relief and only to the extent necessary to provide relief warranted by that party’s individual claim. The arbitrator’s award, if any, shall not apply to any person or entity that is not a party to the arbitration. Any questions regarding the enforceability of this Section 19A shall be decided by a court and not the arbitrator. If any portion of this Section 19A is deemed invalid or unenforceable, then the entire arbitration provision in Section 19 (other than this sentence and Section 19B) shall be null and void and not apply. In no case shall arbitration proceed on a class basis.
    2. NON-ARBITRATION CLASS ACTION WAIVER: If for any reason any Dispute proceeds in court rather than arbitration, the Dispute shall proceed solely on an individual, non-class, non-representative basis. In any Dispute that proceeds in court, neither You, Bank, nor Processor may be a class representative or class member or otherwise participate in any class, consolidated, representative, or private attorney general matter. If for any reason any Dispute proceeds in court rather than arbitration, You, Bank and Processor agree that the sole and exclusive jurisdiction shall be a state or federal court located in San Juan, Puerto Rico (and You, Bank and Processor consent to the Court’s jurisdiction and waive any right to challenge jurisdiction or venue). Moreover, in such event, You and Processor nevertheless each waive the right to a trial by jury and any right to have a Dispute heard in waive all rights to jury trial in any such action, proceeding or counterclaim.
    3. If an arbitrator or court determines that any part of this Dispute Resolution section other than Section 19A is invalid or unenforceable, the other parts of this Dispute Resolution section shall apply. Notwithstanding anything to the contrary in the prior sentence, in all cases, Section 19B shall remain in effect, valid, and enforceable.
20. General Provisions.
    1. Entire Agreement. This Agreement, including the completed Application, the Data Security Regulations, Rules, Laws, Operating Regulations, and any amendment or supplement to this Agreement made in accordance with the procedures set forth in Section 20I. below, all of which are incorporated into this Agreement, constitute the entire agreement between the parties, and all prior or other agreements or representations, written or oral, are terminated and superseded by this Agreement.
    2. Governing Law. This Agreement will be governed by the laws of the Commonwealth of Puerto Rico. The parties agree that all performances and transactions under this Agreement will be deemed to have occurred in Puerto Rico and that Merchant’s entry into and performance of this Agreement will be deemed to be the transaction of business within the Commonwealth of Puerto Rico. Subject to the provision of Section 19, all suits by either party shall be instituted exclusively in the state or federal courts located in San Juan, Puerto Rico. YOU HEREBY SUBMIT TO THE JURISDICTION AND VENUE OF THE COURTS OF THE COMMONWEALTH OF PUERTO RICO OR IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO, UNLESS PROHIBITED BY APPLICABLE LAW.
    3. Construction. The headings used in this Agreement are inserted for convenience only and will not affect the interpretation of any provision. The language used will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any party.
    4. Assignability. This Agreement may be assigned by Processor but may not be assigned by Bank or Merchant directly or by operation of law, without the prior written consent of Processor. If You nevertheless assign this Agreement without the consent of Processor, the Agreement will be binding on the assignee and Processor shall be permitted to terminate this Agreement with cause.
    5. Third Party Beneficiaries. The affiliates of Processor and any person or entity Processor uses in providing the Services are third party beneficiaries of this Agreement and each of them may enforce its provisions as it was a party hereto. Except as provided in this Agreement, nothing in this Agreement is intended to confer upon any person or entity any rights or remedies, and the parties do not intend for any persons or entities to be third-party beneficiaries of this Agreement.
    6. Notices. Any written notice under this Agreement shall be sent to Processor by certified mail addressed to: 3100 Carr. 199 Ste. 101, San Juan, PR 00926, Attention: Director of Operations with a copy to 100 Carr. 199 Ste. 101, San Juan, PR 00926, Attention: General Counsel. All notices to other parties shall be addressed to the last address shown on the records of the sender.
    7. Bankruptcy. You will immediately notify Bank and Processor of any bankruptcy, receivership, insolvency, or similar action or proceeding initiated by or against the Merchant. You will include Bank and Processor on the list and matrix of creditors as filed with the bankruptcy court, whether or not a claim may exist at the time of filing, and failure to do so will be cause for immediate termination or any other action available to Processor under applicable Law. You acknowledge that this Agreement constitutes an executory contract to make a loan or extend other debt financing or financial accommodations to or for the benefit of You, and, as such, cannot be assumed or assigned in the event of your bankruptcy.
    8. Data Use and Privacy.
       1. Data Use and Privacy. You agree that Processor or Bank may disclose to the Card Networks information regarding You and your transactions with the related Card Network, and that the Processor, Bank or such Card Network may use such information to perform their respective responsibilities in connection with any transactions, promote the Processor, Bank or Card Network, perform analytics and create reports, and for any other lawful business purposes, including commercial marketing communications purposes, and for important transactional or relationship communications from the Processor, Bank or Card Network. For more information please refer to Processor’s data use and privacy policy which is available at https://dynamicspayments.com/en/privacy-policy/, and the Bank’s use and privacy policy which is available at https://orientalbank.com/en/privacy-policy/.
       2. Customer Contact. You also authorize Bank and Processor to contact your customers or their card issuing bank if they determine that such contact is necessary to find out information about any Card transaction between You and the customer.
    9. Amendments. Processor may propose amendments or additions to this Agreement. Processor will inform You of a proposed change in a periodic statement or other written notice, including notice contained within your billing statement, invoice or any notice sent electronically, including notices posted in Your portal. For purposes of this section, an electronic or “click-wrap” notice intended to modify or amend this Agreement and which You check “I Accept” or “I Agree” or otherwise accept through an electronic process, shall constitute Notice as required herein. You may choose not to accept the requirements of any such amendments or additions by terminating the Agreement within thirty (30) days of receiving notice. If You choose to do so, You must notify Processor that you are terminating for this reason so that Processor can may waive any early termination fee that might otherwise apply. You will be deemed to have agreed to the change if You present one or more transactions to Processor thirty (30) days following the mailing of the notice. This Section 20I does not apply to conforming changes to comply with the Operating Rules or fee changes, which are governed by Section 2E and Section 11B and D above, respectively.
    10. E-SIGN CONSENT AGREEMENT.
        1. Consent. By signing the Application, You consent and agree that:
           1. Bank and/or Processor can provide disclosures required by Law and other information about your legal rights and duties to You electronically.
           2. Where required or requested, your electronic signature (via “click-through” or other method) on agreements and documents relating to the Services has the same effect as if You signed them in ink.
           3. Bank and/or Processor can send all communications, billing statements, amendments to this Agreement, notices, and other disclosures or information regarding the Services (collectively defined as “Disclosures”) to You electronically (i) via e-mail, (ii) by access to a web site that Processor designates in an e-mail notice it sends to You at the time the information is available, or (iii) to the extent permissible by Law, by access to a website that Processor will generally designate in advance for such purpose.
           4. If You want a paper copy, You can print a copy of the Disclosure or download the information for your records.
           5. This consent applies to all future Disclosures sent to You in connection with the Services, the Agreement, or your use of the Services.
        2. Legal Effect. By consenting, You agree that electronic Disclosures have the same meaning and effect as if Processor or Bank, as applicable, provided paper Disclosures to You. When Processor sends You an email or other electronic notification alerting You that the Disclosure is available electronically and makes it available online, that shall have the same meaning and effect as if Processor or Bank provided a paper Disclosure to You, whether or not You choose to view or print or download the Disclosure.
    11. Paperless Delivery of Tax Documents. Please read this disclosure about how Processor will provide certain documents (“Tax Documents”) that Processor is required by the Internal Revenue Service, the Puerto Rico Department of Treasury or any other applicable tax authority to send to You in connection with the Services. A Tax Document provides important information You need to complete your tax returns. Tax Documents include, without limitation, IRS Form 1099-K, PR Form 480.6G and corrections to Tax Documents. By executing this Agreement, You are consenting in the affirmative that Processor may, at its discretion, send Tax Documents to You electronically, i.e., delivered by way of an email or through a web interface, where you can download Tax Documents (the “Consent”), and acknowledging that You are able to access Tax Documents. You also agree that:
        1. Hardware and Software Requirements: Your computer system meets the hardware and software requirements to access, print, download and save a copy of Tax Documents. To access Tax Documents electronically, You must have Adobe Acrobat Reader installed on your computer. If You do not, this can be downloaded for free at http://get.adobe.com/reader/. You also need to have Internet access that supports the use of a browser. You need hardware as necessary to support this software and browser. Additionally, and in order to keep copies for your records, You will need to have access to a printer or have the ability to download information.
        2. Updating Information: You will promptly notify Processor of any change in your e-mail address. You may do this by email or by calling Processor. If an email is undeliverable due to an incorrect or inoperable email address, Processor will resend such information via U.S. Postal Service.
        3. Withdrawal of Consent: You may withdraw your Consent by writing (either electronically or on paper) to the person or department whose name, mailing address, telephone number and email address is listed in the section entitled “Notice” below or through a web interface. You must state your intent to withdraw your Consent, as well as your name and the merchant identification number assigned to you pursuant to this Agreement. Withdrawal of Consent to paperless delivery is prospective only. Any withdrawal ensures that future Tax Documents will be delivered to You as a paper document but does not apply to any document that has already been furnished to You electronically. Processor may take up to 10 business days after receipt to process your request.
        4. Paper Tax Documents: If you do not specifically consent to the electronic delivery of Tax Documents You will continue to receive paper copies of all required Tax Documents. In addition to consenting to and obtaining electronic copies, you may request additional paper copies of your Tax Documents by contacting Processor. Requesting a paper copy of your Tax Documents will not be considered a withdrawal of your consent for paperless delivery as you must formally withdraw consent to begin regularly receiving a paper copy of your future Tax Documents, as outlined above.
        5. Duration and Termination: Your Consent will apply to Tax Documents for every year following the date of the Consent until it is withdrawn in accordance with the Withdrawal of Consent terms set forth above. Paperless Tax Documents provided to You will remain available electronically for at least one year after the date such documents are made available to You electronically. Processor reserves the right to stop or modify the paperless delivery of your Tax Documents at any time by providing You with written notice at the email or address on file with Processor at the time notice is sent.
    12. Severability and Waiver. Except as expressly set forth in the Dispute Resolution Section, in the event that any provision or part of this Agreement, or the application of any such provision or part to any person or entity or set of circumstances, is for any reason determined to be invalid, unlawful, void or unenforceable to any extent, the remainder of this Agreement, and the application of such provision or part to persons, entities or circumstances other than those as to which it is determined to be invalid, unlawful, void or unenforceable, will not be impaired or otherwise affected and will continue to be valid and enforceable to the fullest extent permitted by applicable Law. Neither the failure nor delay by Processor or Bank to exercise, or the partial exercise of, any right under this Agreement will operate as a waiver or estoppel of such right, nor shall it amend this Agreement. All waivers must be signed by Processor.
    13. Independent Contractors. Processor, Bank, and Merchant and certain of the sales and marketing offices will be deemed independent contractors and none will be considered agent, joint venture, or partner of the other.
    14. Survival. Sections 1, 2, 3.F, 3.G, 3.H, 7.A., 7.B., 7.C, 7.G, 7.J, 7.K, 7.L, 7.M, 9, 10, 11, 12, 13, 14, 15, 17, 18, 19 and 20 will survive termination of this Agreement.
    15. Bank Contact. Merchant may contact Bank at the following address and telephone number: Oriental Bank, P.O. Box 195115, San Juan, PR 00919; Telephone 1-866-622-6801.