This Merchant Transaction Processing Agreement (together with its addenda, attachments, and schedules shall be hereinafter known as the "AGREEMENT"), is by and among the parties in the Merchant Application (the “PARTIES”).  The AGREEMENT shall become effective as set out in the signature block of the Merchant Application.

MERCHANT consents to receiving electronically rather than in paper form all notices, disclosures and other documents ("DOCUMENTS") which are to be provided to MERCHANT under this AGREEMENT. MERCHANT will be notified that a DOCUMENT is available at A&B's web site with a link to that specific page of the web site containing the DOCUMENT.  MERCHANT agrees that such notification will be sent to MERCHANT at the e-mail address provided as part of the Merchant Application.  Any DOCUMENT sent to MERCHANT electronically will be maintained on the website for not less than six (6) months from the date of its posting on the web site.  MERCHANT understands and acknowledges that access to the Internet, email and the worldwide web are required for MERCHANT to access a DOCUMENT electronically and MERCHANT confirms that MERCHANT has such access. MERCHANT understands that there are costs related to access DOCUMENTS electronically and MERCHANT agrees that MERCHANT is responsible for these related access costs.  Without advance notice to MERCHANT and at any time, electronic DOCUMENTS may no longer be sent to MERCHANT.

  1. WHEREAS, A&B is a Member of VISA, Inc. (“VISA”) and MasterCard International, Inc. (“MASTERCARD”), and provides transaction processing and other services and products (“SERVICES”) in relation to financial service cards issued by VISA, MASTERCARD, and other financial service card organizations, including ATM/Debit networks (together herein known as “CARD(S)”); VISA, MASTERCARD, ATM/Debit Networks, and the other financial service card organizations shall be collectively known as “CARD BRANDS”;
  2. WHEREAS, MERCHANT, in furtherance of its business operations, wishes to accept CARDS and have A&B process the resulting transactions (“SALES”) pursuant to the terms and conditions set out below. For purposes of this AGREEMENT, ATM/Debit transactions shall mean those transactions processed on an ATM/Debit network (“NETWORK(S)”) in an on-line real time environment requiring the entry of a personal identification number (“PIN”);
  3. WHEREAS, MERCHANT may desire to be sponsored as a participant in certain NETWORKS, under the terms of the rules and regulations of each such NETWORK;
  4. WHEREAS, CARD BRANDS and A&B each have adopted rules and regulations relating to all aspects of SALES and SERVICES. Such rules and regulations, as amended from time to time, are incorporated herein by this reference and shall be referred to as the “RULES”; and
  5. WHEREAS, MERCHANT understands that this is an agreement for transaction processing and that the DISCOUNT (as defined herein) for the SERVICES is calculated based on certain factors, including without limitation, the term of this AGREEMENT, the number of transactions processed, the business type, the type of goods and/or services sold, and the method of processing.
  6. WHEREAS, all applicable ADDENDA are attached hereto and are made a part of this AGREEMENT.

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

MERCHANT agrees to indemnify and hold harmless A&B, SPONSORS, and CARD BRANDS, including the CARD BRANDS’ contractors, from and against any claims, demands, or judgments, made or recovered against it, arising out of any misrepresentation or breach by MERCHANT of the terms of this AGREEMENT or arising from any act or omission by MERCHANT which violates any LAWS, the RULES, or the rights of another person or otherwise injures any third party.  A&B, SPONSORS, or the CARD BRANDS may defend on its own any such claims or demands or request MERCHANT to take up such defense.  In either event MERCHANT will further indemnify A&B, SPONSORS, and the CARD BRANDS for reasonable attorney fees or any other necessary expenses incurred by A&B by reason of such defense.

A&B is allowed to take decisions for our customers merchant service processor, due to the fact that the equipment is handled by the company as long as the contract is still standing. At the same time, customers are not allowed to make decisions for a processor that isn’t decided by A&B.



1.1 As a result of MERCHANT submitting SALES for processing to A&BA&B will process such SALES and credit or debit MERCHANT’s DESIGNATED ACCOUNT (as defined herein) with the resulting financial proceeds of such SALES, provided, however, that no payment for SALES will take place unless and until A&B has received payment for such SALES from the CARD BRANDS.  In addition, when a disputed transaction (“CHARGEBACK”) occurs, MERCHANT agrees to provide all requested information to A&B and A&B agrees to forward such information to the CARD BRANDS in accordance with the RULES and the CARD BRANDS’ dispute resolution guidelines.  A&B is not responsible for the outcome of any CHARGEBACK.

1.2 The CARDS designated herein will be processed under the terms and conditions of the AGREEMENT as long as A&B is contractually permitted to offer such SERVICES by the respective CARD BRANDS.

1.3 On an exclusive basis, MERCHANT agrees to submit all SALES for processing from CARDS accepted in MERCHANT’s business as described in the Merchant Application to A&B in accordance with the RULES and pursuant to the terms of this AGREEMENT.

1.4 MERCHANT and A&B agree to abide by the RULES, a summary of which is attached hereto as the CARD BRAND RULES and the ATM/DEBIT NETWORK RULES.  The attached summaries are incorporated into the collective definition of the RULES.  A&B and CARD BRANDS may from time to time amend the RULES or operating procedures related to SALES and SERVICES.  MERCHANT has been supplied with a summary of the RULES and by signing AGREEMENT, acknowledges that it has reviewed them.  MERCHANT agrees to comply with all applicable state, federal and local laws, rules and regulations (“LAWS”). MERCHANT agrees to assist A&B in complying in a complete and timely manner with all LAWS and RULES now or hereafter applicable to any SALE or this AGREEMENT. MERCHANT will execute and deliver to A&B all such instruments that A&B may from time to time deem necessary. It is MERCHANT’s responsibility to know all applicable LAWS and the RULES that apply to MERCHANT’s acceptance of CARDS and to ensure that MERCHANT’s equipment complies with all LAWS and RULES.  MERCHANT agrees to indemnify, defend, and hold A&B harmless from and against any loss, cost or damage (including reasonable legal fees and court costs) incurred as a result of MERCHANT’s failure to comply with applicable LAWS or RULES.

1.5 MERCHANT agrees that it will not use for its own purposes, will not disclose to any third party, and will retain in strictest confidence all information and data belonging to or relating to the business of A&B, including but not limited to the terms of this AGREEMENT, and will safeguard such information and data by using a reasonable degree of care but in no event less than the same degree of care that MERCHANT uses to protect its own confidential information.


1.6 Security Standards.

  1. MERCHANT agrees it will not disclose to any third party any cardholder account information or other personal information except to their agent assisting in completing a card transaction, or as required by LAWS or RULES. MERCHANT must not request or use cardholder account number information for any purpose that MERCHANT knows or should have known to be fraudulent or in violation of the RULES, or for any purpose that the cardholder did not authorize, except to MERCHANT’s agent assisting in completing a card transaction, or as required by law. MERCHANT must keep all systems and media containing account, cardholder or transaction information (physical or electronic, including but not limited to account numbers, card imprints, and terminal identification numbers) in a secure manner, to prevent access by or disclosure to anyone other than MERCHANT’s authorized personnel.  MERCHANT must destroy, in a manner that will render the data unreadable, all such media that MERCHANT no longer deems necessary or appropriate to store (except for Sales Drafts maintained in accordance with this AGREEMENT, LAWS or RULES).  Further, MERCHANT must take all steps reasonably necessary to ensure cardholder information is not disclosed or otherwise misused.  MERCHANT may not retain or store magnetic stripe, CVV2 or CVC2 data after authorization.  MERCHANT must not store, and must ensure that all of MERCHANT’s third party providers that have access to cardholder data do not store, magnetic stripe, CVV2 or CVC2 data after a transaction.
  2. If MERCHANT uses any third parties who will have access to cardholder data (“Merchant Provider(s)”), or any third party payment application(s) or software, MERCHANT must notify A&B of the identity of the Merchant Provider(s) and/or the name and version of the payment application(s) or software. In addition, MERCHANT must: (1) only allow the Merchant Providers access to the cardholder data for purposes that are authorized by the RULES, (2) have proper security measures in place for the protection of cardholder data, (3) ensure that Merchant Providers have proper security measures in place for the protection of cardholder data, (4) comply with and assure that Merchant Providers comply with the Payment Card Industry (“PCI”) Data Security Standard, as amended from time to time, which may be referred to as the Visa Cardholder Information Security Program (“CISP”) (found at http://www.visa.com) and the MasterCard Site Data Protection Program (“SDP”) (found at http://www.mastercard.com) and (5) have written agreements with Merchant Providers requiring the compliance set forth herein.  MERCHANT will immediately notify A&B of any suspected or confirmed loss or theft of any transaction information, including any loss or theft from a Merchant Provider.  MERCHANT is responsible for demonstrating MERCHANT’s and Merchant Providers’ compliance with the CISP, SDP, DISC, DSOP, and PCI programs, and providing reasonable access to MERCHANT’s locations and ensuring Merchant Providers provide reasonable access to their locations to verify MERCHANT’s and Merchant Providers’ ability to prevent future security violations.  Any fees, fines or penalties resulting from non-compliance will be passed through to MERCHANT.  MERCHANT agrees to indemnify A&B and the CARD BRANDS against all costs, expenses, damages and/or losses resulting from any breach of security, or loss or theft of information.
  3. In addition, in the event of a suspected or confirmed loss or theft of information, MERCHANT agrees, at MERCHANT’s cost, to provide all information requested by A&B, a CARD BRAND, other financial institutions, or local, state or federal officials in connection with such event and to cooperate in any ensuing investigation. Any information provided in response to such investigation will (as between MERCHANT and A&B) be considered A&B’s confidential information.  MERCHANT agrees that A&B may release to the CARD BRANDS, other financial institutions and/or regulatory, local, state or federal officials, any information MERCHANT provides to A&B in connection with a suspected or confirmed loss or theft of transaction information.  The requirements of this provision apply to cardholder data regardless of the medium in which the information is contained and regardless of whether MERCHANT processes transactions via Internet, mail, phone, face-to-face or any other method.  Additional information regarding data security may be found at the CARD BRANDS’ websites

1.7 Submission by MERCHANT of SALES or participation in SERVICES at any time after seven (7) days from the date of distribution of or publication by the CARD BRANDS of amended RULES to MERCHANT shall be evidence that MERCHANT was provided with and/or received access to the amended RULES and has agreed to abide by them. 1.8 If MERCHANT is a healthcare provider or other entity covered by the Health Insurance Portability and Accountability Act of 1996, as amended, and the supporting regulations under 45 C.F.R. Part 160 and 164, as amended, MERCHANT agrees it will not provide BANK with Protected Healthcare Information (as defined in such act).


2.1 MERCHANT agrees that it will comply with all Card Acceptance Procedures in the RULES for each SALE, including, but not limited to the following:

  1. MERCHANT agrees that it will obtain and record a valid positive authorization for all SALES in accordance with the RULES before submitting them to A&B for processing;
  2. MERCHANT must be able to prove, by evidence of a terminal capture of the magnetic stripe or a signed SALES DRAFT (as defined in the RULES) showing imprint of the CARD, that the CARD was present at the time of SALE, unless specifically set up for Card Not Present transactions; and C. Failure to read the magnetic stripe on the card may result in a DISCOUNT rate tier downgrade or a CHARGEBACK. 2.2 A&B and/or third party banks with which A&B has a relationship are members of certain NETWORKS and are willing to sponsor MERCHANT as a participant in such NETWORKS (“SPONSOR”) as set forth in the Merchant Application. Additional NETWORKS may be available from time to time. A&B does not warrant the continuing availability of any NETWORK.  MERCHANT agrees to pay A&B the then current FEES for any NETWORK added or deleted after the effective date of this AGREEMENT.   MERCHANT hereby delegates to A&B the authority to decide to which NETWORK a given debit transaction will be routed. 2.3 MERCHANT agrees to accept valid CARDS of each of the selected NETWORKS and any minimums, maximums or surcharges imposed by MERCHANT will be in accordance with the NETWORKS, RULES and LAWS.  MERCHANT agrees to comply with Federal Regulation E and the rules, procedures, fees, assessments, penalties, and other obligations of each NETWORK, as from time to time are in effect. 2.4 A&B may provide MERCHANT access through MERCHANT’s terminals to the NETWORKS as set forth herein.

2.5 MERCHANT must Batch Out each POS terminal every day. Failure to Batch Out daily will delay the deposit of funds. “Batch Out” is the process by which MERCHANT totals and settles all transactions, on each POS terminal, which occurred before midnight (12:00 a.m.) and transmits the information to BANK. In all cases, MERCHANT must present the record within three (3) business days after the transaction date, unless otherwise permitted by the RULES.  Transactions contained in an untimely Batch Out may incur higher rates, be refused, be held for a one hundred eighty (180) day period, or become subject to a CHARGEBACK.  MERCHANT is responsible for re-submitting a Batch Out or a sales ticket if the POS terminal fails to properly Batch Out or if sales ticket data does not process through the normal payment cycle.  A&B is not liable to MERCHANT for higher rates or for amounts A&B did not collect, including but not limited to amounts collected by third party service providers.



3.1 MERCHANT agrees to pay A&B the fees as set forth in the Merchant Application and all other sums owed to A&B for SALES and SERVICES as set forth in this AGREEMENT as amended from time to time (“FEES”).  FEES include but are not limited to all CHARGEBACKS.  MERCHANT agrees that it is jointly and severally liable for all FEES, charges, and other sums owed to A&B by any affiliated entities of MERCHANT.

3.2 As set out in the Merchant Application and the Rate Descriptions, discount (“DISCOUNT”) is a FEE charged as a percentage of gross SALES submitted by MERCHANT, which generally includes “Processing,” “Authorizations,” “Assessments,” and “Interchange.”  Assessments and Interchange are the standard fees that the CARD BRANDS charge for the clearing of SALES transactions and are subject to change by the CARD BRANDS.  A&B has no direct control over these fees.  Any adjustment in Interchange and Assessments by the CARD BRANDS may result in an adjustment to MERCHANT’s DISCOUNT.   A&B will notify MERCHANT in writing of any change in FEES caused by action of CARD BRANDS prior to any such change becoming effective.  If permitted by the CARD BRANDS, notice to MERCHANT of any change in FEES caused by CARD BRANDS may be less than thirty (30) days.

3.3 DISCOUNT is quoted by BANK based on the information supplied by MERCHANT as set forth in the Merchant Application.  MERCHANT agrees that the FEES are based on the term of this AGREEMENT, the method of processing, and the information set forth in the Merchant Application.  MERCHANT agrees that such information is a material fact in the calculation of the DISCOUNT and other FEES.  MERCHANT agrees that if such information is shown to be incorrect or if such information changes, BANK may amend FEES on less than thirty (30) days notice as set out herein and/or add FEES on less than thirty (30) days notice to reflect such change, unless prohibited by the CARD BRANDS.  MERCHANT agrees to pay such amended and/or additional FEES.

3.4 MERCHANT agrees that FEES not listed in the AGREEMENT will be charged at A&B’s current rate.

3.5 The FEES may be amended by A&B on thirty (30) days written notice to MERCHANT unless provided otherwise herein.

3.6 MERCHANT agrees to pay A&B for CHARGEBACKS related to SALES or SERVICES.  MERCHANT understands that A&B is in no way financially responsible for CHARGEBACKS.  Failure to comply with the RULES will increase MERCHANT’s exposure to CHARGEBACKS.  MERCHANT’s obligation to pay CHARGEBACKS shall survive the termination or expiration of AGREEMENT.

3.7 If the CARD BRANDS or a regulatory body governing A&B should levy a fine or penalty or assess a charge to A&B as a result of MERCHANT’s SALES or SERVICES or CHARGEBACK activity, MERCHANT agrees to pay such fines, penalties, or charges, and any administrative fees associated with same.

3.8 MERCHANT shall establish a designated account at the institution of its choice (“DESIGNATED ACCOUNT”) for the credit and debit of sums between the PARTIES.  MERCHANT, pursuant to the Funds Transfer Instructions set out herein, authorizes A&B to make deposits and withdrawals from the DESIGNATED ACCOUNT.  MERCHANT hereby grants to A&B a security interest and lien upon the DESIGNATED ACCOUNT to secure all of MERCHANT’s (or any related entity under MERCHANT’s control) obligations to A&B under this AGREEMENT.  If required by A&B, MERCHANT agrees to cooperate with A&B and the depository bank maintaining the DESIGNATED ACCOUNT to cause a Control Agreement to be executed with respect to the DESIGNATED ACCOUNT.  MERCHANT agrees to maintain a balance in the DESIGNATED ACCOUNT in an amount specified by A&B and MERCHANT agrees to deposit funds into the DESIGNATED ACCOUNT so that the minimum balance required by A&B is maintained.  If this AGREEMENT is terminated for any reason, the DESIGNATED ACCOUNT shall be maintained for a period of one hundred eighty (180) days, plus the period of any warranty or guarantee on goods and/or services sold by MERCHANT and processed as SALES, from the date of the last SALE processed by MERCHANT under AGREEMENT.  A&B may recoup and debit from the DESIGNATED ACCOUNT all non-VISA and non-MASTERCARD related FEES and other obligations due to A&B under this AGREEMENT or any other agreement MERCHANT or MERCHANT’s related entities have with BANK without prior notice to MERCHANT.  A&B may recoup and debit from the DESIGNATED ACCOUNT all FEES and other obligations due to A&B under this AGREEMENT or any other agreement MERCHANT or MERCHANT’s related entities have with A&B without prior notice to MERCHANT. After all obligations of MERCHANT under this AGREEMENT are satisfied in full, the balance in the DESIGNATED ACCOUNT, if any, shall be paid to MERCHANT.  MERCHANT agrees to indemnify and hold harmless all financial institutions from any loss or claim incurred for acting on instructions from A&B with respect to the DESIGNATED ACCOUNT.  MERCHANT agrees not to pledge or assign the DESIGNATED ACCOUNT, any proceeds of it or any other amounts due A&B under this AGREEMENT to any person or entity and MERCHANT shall continually maintain the DESIGNATED ACCOUNT free from all liens and encumbrances.  In the event a RESERVE ACCOUNT, as defined below, is established, MERCHANT authorizes A&B to make withdrawals from the DESIGNATED ACCOUNT to replenish the RESERVE ACCOUNT as necessary.

3.9 MERCHANT agrees to provide A&B with a deposit in the amount of money required by A&B (“RESERVE ACCOUNT”), if determined necessary by A&B:  (i) at the time this AGREEMENT is executed; (ii)  if in the opinion of A&B, information received or discovered about MERCHANT reflects an adverse change in status; (iii) in the event that any information requested by A&B is not received; (iv) upon the notice of termination or expiration of the AGREEMENT; or (v) at any time during the term of this AGREEMENT.  A&B may withhold the payment for SALES in an amount reasonably determined by A&B as necessary to secure payment by MERCHANT of all FEES and other obligations under this AGREEMENT and the amounts so withheld shall be deposited into the RESERVE ACCOUNT.  If there is not enough money retained to cover the anticipated FEES, A&B may require MERCHANT to remit additional funds.  The RESERVE ACCOUNT shall be maintained in a bank account with A&B in the name of A&B and under the sole control of A&B, and MERCHANT grants to A&B a security interest and lien upon the RESERVE ACCOUNT to secure all of MERCHANT’s obligations to A&B under this AGREEMENT.  If this AGREEMENT is terminated for any reason, the RESERVE ACCOUNT shall be maintained for a period of one hundred eighty (180) days, plus the period of any warranty or guarantee on goods and/or services sold by MERCHANT and processed as SALES, from the date of the last SALE processed by MERCHANT under AGREEMENT, or for such longer period if determined necessary by A&B in their reasonable discretion to protect A&B from future risk of loss.  A&B may recoup and debit from the RESERVE ACCOUNT all FEES and other obligations due to A&B under this AGREEMENT without prior notice to MERCHANT.   After all obligations of MERCHANT under this AGREEMENT are satisfied in full, the balance in the RESERVE ACCOUNT, if any, shall be paid to MERCHANT.

3.10 A&B agrees to pay MERCHANT for SALES less FEES owed to A&B by MERCHANT.  A&B shall recoup and deduct FEES from incoming transactions or recoup and debit the same from MERCHANT’s DESIGNATED ACCOUNT or the RESERVE ACCOUNT.   MERCHANT agrees that A&B has the right to deduct these FEES at any time including on a daily basis if necessary.  A&B is not obligated to pay MERCHANT or credit the DESIGNATED ACCOUNT for any SALES transmitted or delivered to A&B after MERCHANT becomes insolvent, ceases to do business, or dissolves.

3.11 A&B has the right of recoupment and set-off.  This means that A&B may recoup and offset any outstanding or uncollected amounts owed to A&B under this AGREEMENT from: (i) any amounts A&B would otherwise be obligated to deposit into the DESIGNATED ACCOUNT, and (ii) any other amounts A&B may owe MERCHANT under this AGREEMENT or any other agreement.

3.12 If MERCHANT does not pay any sums due within thirty (30) days from date of notice, A&B will charge, and MERCHANT agrees to pay, a late fee of one and one-half percent (1.5%) per month on the balance outstanding or the highest amount allowed by law.

3.13 If MERCHANT breaches AGREEMENT or if A&B identifies suspicious or irregular activity related to SALES or SERVICES, A&B may refuse to process SALES or to provide SERVICES and/or may hold funds pending the cure of such breach or resolution of such activity.

3.14 If A&B takes any action against MERCHANT to collect any FEES or monies due to A&B from MERCHANT, MERCHANT agrees to pay all costs of collection, including but not limited to, attorney fees, to the extent allowed by law.

3.15 If MERCHANT is a participant in a A&B third party program including, but not limited to, Agent A&B and/or CARD BRAND programs, and MERCHANT subsequently leaves such third party, A&B may amend the FEES or terminate the AGREEMENT



4.1 The initial term of this AGREEMENT shall be for three (4) years (“INITIAL TERM”) commencing on the date this AGREEMENT is approved by A&B or approved and uploaded by A&B’s Risk Department.

4.2 At the expiration of the INITIAL TERM, this AGREEMENT will automatically renew for successive two (2) year periods (“RENEWAL TERM”) unless terminated as set out below.

4.3  In order to protect the CARD BRANDS and A&B, A&B may terminate this AGREEMENT effective immediately for any of the following reasons:

  1. insolvency, receivership, voluntary or involuntary bankruptcy, assignment of any of MERCHANT’s assets for the benefit of MERCHANT’s property creditors, or if any part of MERCHANT’s property is or becomes subject to any levy, seizure, assignment or sale for or by any creditor or governmental agency without being released within thirty (30) days thereafter;
  2. if MERCHANT fails to pay any FEES when due;
  3. if MERCHANT has misrepresented or omitted any material information provided to A&B;
  4. if MERCHANT is in breach of the AGREEMENT or the RULES;
  5. if MERCHANT, after A&B’s request, fails to send copies of SALES DRAFTS to A&B;
  6. if MERCHANT submits for processing SALES that were not originated as a result of a direct SALE transaction between a cardholder and MERCHANT in the normal course of business (“LAUNDERING”);
  7. if the number of CHARGEBACKS experienced by MERCHANT in any one (1) month exceeds one percent (1%) of the number of SALES in that or any prior month;
  8. in the event of a material change of MERCHANT’s business as described in the Merchant Application (“BUSINESS”);
  9. in the event the CARD BRANDS identify MERCHANT, its principal, or associated parties under any program designed to monitor merchants, or MERCHANT creates circumstances that cause harm or loss of goodwill to A&B or the VISA system;
  10. if MERCHANT is inactive for ninety (90) days and is not a seasonal MERCHANT; or
  11. in the event that Guarantor (if designated) gives notice of its intention to withdraw the Guaranty.

4.4 Effect of Termination of the AGREEMENT:

  1. In the event that this AGREEMENT is terminated by A&B for cause, A&B may be required to report the name and address of MERCHANT and MERCHANT’s principals to the CARD BRANDS for inclusion on the Terminated Merchant File and in other programs that monitor merchants. In the event that this AGREEMENT is terminated for cause and MERCHANT is obligated to A&B for sums due and the principals of MERCHANT are liable for such debts, a negative credit report may be submitted to a credit-reporting agency.
  2. MERCHANT hereby releases, indemnifies and holds A&B and the CARD BRANDS harmless to the fullest extent permitted by applicable law for any loss or damage it may incur as a result of reporting MERCHANT or its principals to a credit reporting agency hereunder or as a consequence of MERCHANT or its principals being placed by A&B or its Agents on the CARD BRANDS’ merchant monitoring lists.



5.1 In the event of a bankruptcy filing by MERCHANT, A&B reserves the right to suspend or discontinue processing SALES or providing SERVICES.  Upon filing voluntary or involuntary bankruptcy proceedings by or against MERCHANT, MERCHANT must notify A&B in writing within five (5) days.  Notification must be sent by certified mail to A&B at the address for NOTICES set out herein.

5.2 Credits to MERCHANT’s DESIGNATED ACCOUNT and other payments to MERCHANT are provisional.  The PARTIES acknowledge the AGREEMENT is an agreement whereby A&B is extending financial accommodations to MERCHANT within the meaning of 11 U.S.C.§ 365(c)(2) of the Bankruptcy Code as amended from time to time.  The right of MERCHANT to receive any amounts due or to become due from A&B is expressly subject and subordinate to the CHARGEBACKS, recoupment, setoff, lien, and security interest rights of A&B under this AGREEMENT without regard to whether such CHARGEBACKS, recoupment, setoff, lien, and/or security interest rights are being applied to claims that are liquidated, unliquidated, fixed, contingent, matured, or unmatured.



6.1 MERCHANT agrees to comply with all requests for information and documentation regarding SALES and the CARDS utilized in processing such SALES or SERVICES under AGREEMENT within the time period stated by A&B in its request.

6.2 USA PATRIOT ACT REQUIREMENTS.  To help the government fight the funding of terrorism and money laundering activities, the USA PATRIOT Act requires all financial institutions to obtain, verify, and record information that identifies each person (including business entities) who opens an account.  What this means:  When MERCHANT opens an account, A&B will ask for the applicant’s name, physical address, date of birth, taxpayer identification number, and other information that will allow A&B to identify the applicant.  A&B may also ask to see the applicant’s driver’s license or other identifying documents.  A&B will advise MERCHANT if additional information is required.

6.3 Upon A&B’s request, MERCHANT shall provide A&B with current financial statements in a format acceptable to A&B.

6.4 MERCHANT, its signing officer/owner/partner/principal, and any Personal Guarantor authorize A&B, or its agents or assigns, to make, from time to time, any business and personal credit and other inquiries A&B onsiders necessary to review the acceptance and continuation of this AGREEMENT. MERCHANT authorizes parties contacted by A&B or any of its affiliates, in relation to this AGREEMENT, to release the credit information requested by A&B or any affiliate.  By executing this AGREEMENT, MERCHANT, its signing officer/owner/partner/principal and any Personal Guarantor acknowledge that A&B has a legitimate business need for the information contained in any personal credit report that may be obtained in connection with this AGREEMENT, and that this AGREEMENT is a business transaction that was initiated by the MERCHANT and/or any Personal Guarantor identified in the Merchant Application.-


7.1 MERCHANT agrees that it will not materially change its BUSINESS or the method in which it markets or sells the goods and services of BUSINESS without informing A&B in advance of such change.  A&B will only process SALES from the BUSINESS as defined in the AGREEMENT.

7.2 If actual monthly SALES volume substantially exceeds the projected annual SALES volume as provided in the Merchant Application and pro-rated to one month, A&B may, at its option, do one or more of the following:  (i) refuse to process SALES in excess of such sum; (ii) process such SALES and retain the proceeds of such SALES until the next month and release such sums to MERCHANT at that time counting this volume as SALES volume for that month; (iii) terminate this AGREEMENT; and/or (iv) amend this AGREEMENT in a way as to ensure that A&B has security for the increased volume.  Such rights of termination and retention of funds are in addition to those already provided for herein.

7.3 In the event of failure, including bankruptcy, insolvency, or other suspension of business operations by MERCHANT, MERCHANT shall not sell, transfer, or disclose any materials that contain cardholder account numbers, personal information, or other CARD BRAND transaction information to third parties.  Upon request from A&B, MERCHANT shall either (i) provide this information or (ii) provide acceptable proof of destruction of this information.



8.1 If MERCHANT accepts SALES through its web site or through a system integrator, MERCHANT shall at all times maintain and be responsible for the security of the transmission of data relating to the processing of SALES associated with this AGREEMENT.  MERCHANT shall be responsible for obtaining and maintaining web site security, for the encryption of all data, and for any and all storage of data.  MERCHANT shall display on its web site its: (i) consumer data privacy policy and (ii) security method for transmission of payment data.  An e-commerce MERCHANT must display the address of its “permanent establishment” on its web site along with MERCHANT’s country of domicile, either: a) on the same screen view as the checkout screen used to present the total purchase amount; or b) within the sequence of web pages the cardholder accesses during the checkout process.

8.2 MERCHANT shall be responsible for obtaining and contracting with any third party service provider(s), payment engine(s), payment gateway(s), and any other Internet service provider(s) and/or system integrator(s).  MERCHANT shall ensure that said third parties appropriately format and transmit SALES to A&B in accordance with the then current RULES and requirements of A&B and CARD BRANDS.  If MERCHANT is using a third party’s terminal or software application, (i.e. dial terminal or equivalent sales capture solution), and the third party is providing the customer service, then such third party is a separate entity and is not an agent of A&B.  MERCHANT understands the AGREEMENT is between A&B and MERCHANT.  Disputes involving a third party shall be dealt with independently from A&B.  If disputes are unresolved and relate to SERVICES provided under the AGREEMENT, MERCHANT shall notify A&B at the address set out in the AGREEMENT.  MERCHANT must pay A&B regardless of any disputes it has with any third party.  If MERCHANT elects to use the terminal or software of third party providers to capture and transmit SALES to A&B, MERCHANT must disclose the relationship to A&B and MERCHANT assumes full responsibility and liability for such third party provider’s failure to comply with the RULES.  The third party provider may be the source for information regarding SALES, authorizations and CHARGEBACKS that may be needed by A&B.  Certain CHARGEBACKS require authorization information to reverse.  MERCHANT is responsible for obtaining this information from such third party provider.  A&B is not liable for SALES that it did not receive. MERCHANT understands that in the event MERCHANT rents A&B terminals, the communications vendor is not responsible for losses arising from the SALES processed using the vendor's service.

8.3 MERCHANT agrees that A&B is not responsible for any services or equipment provided by any third party with which MERCHANT has contracted.  MERCHANT agrees that A&B is not responsible for and is not able to provide customer service for the point of sale (“POS”) devices installed by and/or operated by any third party with which MERCHANT has contracted.  MERCHANT should contact the third party for service of this equipment.  MERCHANT shall not allow any third party to install, remove, or modify any terminal software application of A&B without the express written consent of A&B.  MERCHANT agrees A&B can only process SALES received by A&B, and any third party is responsible for ensuring SALES are formatted and transmitted to BANK in accordance with the then current requirements of A&B and CARD BRANDS.  A&B may increase FEES if a third party presents SALES transactions not in accordance with the then current CARD BRANDS’ requirements.  MERCHANT assumes full responsibility and liability for DISCOUNT rate tier downgrades caused by any third party.  MERCHANT assumes full responsibility and liability for third party providers’ failure to comply with the RULES.  MERCHANT is responsible for obtaining from the third party provider any information needed by A&B.

8.4 MERCHANT shall assume full liability and shall indemnify and hold A&B and CARD BRANDS harmless for:  (i) the actions and/or inactions of any third party with which MERCHANT has contracted or (ii) the failure of any third party with which MERCHANT has contracted to comply with the LAWS or RULES



9.1 MERCHANT’s rights and remedies hereunder are exclusive and in lieu of all other rights and remedies.  A&B shall not otherwise be liable for any error, omission, delay, computer virus, loss of data or records or disclosure of confidential information which may occur as a result of, or in any way be connected with, the rendering of SERVICES hereunder.  A&B shall not be liable for any services or products of third parties.  In any event, A&B’s liability to MERCHANT, whether arising in contract, tort (including, without limitation, negligence and strict liability) or otherwise, shall not exceed the lesser of the direct loss to MERCHANT or an amount equal to the processing portion of the DISCOUNT paid to A&B by MERCHANT in the month prior to the incident giving rise to liability. In no event shall A&B, the CARD BRANDS, or the CARD BRANDS’ contractors be liable for losses, damages, or liabilities whether in contract, tort (including negligence), strict liability or under any other theory incurred by MERCHANT, MERCHANT’s customers, or any other person or entity arising under this AGREEMENT.  IN NO EVENT SHALL A&B, THE CARD BRANDS, OR THE CARD BRANDS’ CONTRACTORS BE LIABLE FOR SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL OR EXEMPLARY DAMAGES OR FOR ANY INTERRUPTION OR LOSS OF USE, DATA, VIRUSES, BUSINESS OR PROFITS, WHETHER OR NOT SUCH LOSSES OR DAMAGES WERE FORESEEABLE OR A&B WAS ADVISED OF THE POSSIBILITY THEREOF AND REGARDLESS OF WHETHER ANY LIMITED REMEDY HEREIN FAILS OF ITS ESSENTIAL PURPOSE.



10.1 MERCHANT understands that A&B merely provides processing services for SALES or SERVICES and is neither a partner in MERCHANT’s business operations nor a guarantor of the receipt by MERCHANT of the proceeds of SALES or SERVICES.  Furthermore, A&B does not guarantee that SALES or SERVICES will not be subject to CHARGEBACKS.

10.2 MERCHANT warrants there is no action, suit or proceeding pending or to MERCHANT’s knowledge threatened, which, if decided adversely, would impair MERCHANT’s ability to carry on MERCHANT’s business substantially as now conducted or which would adversely affect MERCHANT’s financial condition or operations.  MERCHANT warrants that it, or its principals or sales agents have not been terminated from depositing SALES with any other member of the CARD BRANDS, have never been placed on the MasterCard MATCH system, or on the Combined Terminated Merchant File except as disclosed in writing to A&B.

10.3 MERCHANT warrants that at the time of depositing SALES for processing:  (i) it has the right to assign such SALES to A&B and does by this reference assign all its rights, title, and interest to payment for such SALES to A&B so that A&B may process SALES under the AGREEMENT; (ii) it has no knowledge of any fact that would impair the collectability of the SALES; and (iii) that the SALES represent a valid obligation of the cardholder:  (a) in the amount indicated; (b) for merchandise sold and delivered or services rendered to the cardholder by the MERCHANT; and (c) it does not involve any element of credit for any other purpose.

10.4 MERCHANT agrees to indemnify and hold harmless A&B, SPONSORS, and CARD BRANDS, including the CARD BRANDS’ contractors, from and against any claims, demands, or judgments, made or recovered against it, arising out of any misrepresentation or breach by MERCHANT of the terms of this AGREEMENT or arising from any act or omission by MERCHANT which violates any LAWS, the RULES, or the rights of another person or otherwise injures any third party.  A&B, SPONSORS, or the CARD BRANDS may defend on its own any such claims or demands or request MERCHANT to take up such defense.  In either event MERCHANT will further indemnify A&B, SPONSORS, and the CARD BRANDS for reasonable attorney fees or any other necessary expenses incurred by A&B by reason of such defense.

10.5 MERCHANT shall be solely responsible for losses and CHARGEBACKS incurred as a result of, or arising out of, any fraud including LAUNDERING, negligence, or willful misconduct on the part of MERCHANT, or MERCHANT’s employee(s) or agent(s).

10.6 MERCHANT is responsible for any electronic virus or viruses that may be encountered and is responsible for routinely scanning its computers and diskettes using a reliable virus product to detect and remove any viruses found.




11.2 Force Majeure.  A&B is not liable or responsible for any failure or delay in performance caused by any Act of God, strikes, flood, fire, war, public enemy, electrical or equipment failure, failures by third parties, or other events beyond its control.

11.3 Entire Agreement.  This AGREEMENT constitutes the entire understandings of the PARTIES as to the subject matter contained herein and supersedes all prior contracts, agreements, and negotiations between the PARTIES whether verbal or written.

11.4  Costs.  Neither PARTY shall be responsible for the costs incurred by the other in negotiating or implementing this AGREEMENT.

11.5  Survival.  The obligations of all PARTIES incurred prior to the effective date of termination of this AGREEMENT will survive the termination of this AGREEMENT. If any portion of the AGREEMENT is held invalid or unenforceable for any reason, it is agreed that any invalidity or unenforceability will not affect the remainder of the same and the remaining provisions will remain in full force and effect.  The PARTIES agree that the Court of competent jurisdiction may modify any objectionable provision of the AGREEMENT so as to render it valid, reasonable and enforceable.

11.6 Amendment.  This AGREEMENT may be amended or modified by A&B effective upon thirty (30) days written notice.  Any alteration or strikeover in the text of this pre-printed AGREEMENT will have no binding effect and will not be deemed to amend this AGREEMENT.

11.7 Authority.  By signing the AGREEMENT, each PARTY represents that it has the full legal power and authority to enter into performance obligations under this AGREEMENT.  Each PARTY represents that the entering into of this AGREEMENT has been duly authorized; the signer is a duly authorized signatory; this AGREEMENT constitutes a legal, valid, and binding obligation of each PARTY; and that this AGREEMENT is enforceable against each PARTY in accordance with its terms.

11.8 Taxes.  MERCHANT agrees to pay all federal, state, and local sales, use, property and excise taxes, including penalties and interest, which may be assessed in connection with the services and related products provided under this AGREEMENT. The FEES set forth in the AGREEMENT are exclusive of any and all applicable taxes or assessments, whether designated as sales taxes, use taxes, ad valorem taxes, GST/HST taxes, VAT taxes or by some other name or designation, and including any interest or penalties thereon, which may be levied or assessed by any governmental or taxing jurisdiction in connection with the performance of services or provision of materials to MERCHANT by A&B. In the event of the payment of or for any such tax, assessment or expense by A&B, MERCHANT shall in turn pay A&B for such items.

11.9 Disclosure of Merchant Identification Number (“MID”).  For security reasons, MERCHANT must disclose its MID thereby authorizing A&B to make changes to its account.  A&B may request from MERCHANT additional information to further verify MERCHANT’s identity. A&B may assume that the person disclosing the MID has the authority to make changes to MERCHANT’s account.  MERCHANT authorizes A&B to share information regarding the MERCHANT’s account with the person disclosing the MID.  MERCHANT is responsible and liable for changes made after disclosure of its MID.  MERCHANT is responsible for insuring its MID is kept confidential.

11.10 Information.  MERCHANT authorizes A&B to release and use MERCHANT’s information, in connection with offering or providing business products and services, to third parties that provide services to A&B or MERCHANT or to any third party that requests and has a reason to know such information, including but not limited to the CARD BRANDS, and any third-party having regulatory control over the PARTIES.

11.11 Counterparts/Facsimile.  This AGREEMENT may be executed and delivered in any number of counterparts, each of which shall be an original but all of which together shall constitute one and the same instrument.  Any photocopy, facsimile, electronic or other copies shall have the same effect for all purposes as an ink-signed original.  MERCHANT hereby authorizes A&B  and its affiliates to send facsimiles to the MERCHANT’s facsimile number set forth in this AGREEMENT.

11.12 Monitoring.  MERCHANT understands and agrees that any telephone conversation between MERCHANT and A&B may be monitored and recorded.

11.13  Binding Agreement.  This AGREEMENT shall not become a binding AGREEMENT between the PARTIES until (1) it is approved by A&B; and (2) A&B has received a negative response to its inquiry of the CARD BRANDS’ programs designed to monitor merchants.  The commencement of transaction processing under this AGREEMENT shall constitute A&B’s approval and its signature to this AGREEMENT.

11.14 Products and Services.  A&B may from time to time add products and/or services to the SERVICES.  At MERCHANT’s request, A&B may provide such additional products and/or services to MERCHANT at A&B’s then current rate.  MERCHANT agrees to abide by all parameters set by A&B for such products and/or services as set out in any product specification or documentation as amended from time to time.  MERCHANT is responsible for any coding and testing, if necessary, for such products and/or services.  A&B has made reasonable efforts to secure information and abides by the CARD BRANDS’ security guidelines but A&B does not guarantee security.  MERCHANT is responsible for protecting access to any passwords or user identification numbers.  Access to and use of password protected areas of any products and/or services are restricted to authorized users only.  It is the MERCHANT’s obligation to notify A&B  immediately if its passwords or user identification numbers have been lost or stolen or if there has been unauthorized access.  A&B shall at all times retain all title to and ownership of the products and SERVICES.  MERCHANT agrees not to, directly or indirectly, modify, reverse engineer, decompile, disassemble or derive source code from the products and SERVICES.  Any PARTY may terminate a product and/or service at any time upon thirty (30) days written notice to the other without terminating the AGREEMENT.

11.15 Communication.  MERCHANT authorizes A&B and its affiliates to communicate with, solicit and/or market to MERCHANT via regular mail, telephone, e-mail and facsimile in connection with the provision of goods or services by A&B, its affiliates, or any third party that A&B shares, transfers, exchanges, discloses or provides information with or to pursuant this AGREEMENT and will hold A&B, its affiliates and such third parties harmless against any and all claims pursuant to the federal CAN-SPAM ACT of 2003, the Telephone Consumer Protection Act and any and all other state or federal laws relating to transmissions or solicitations by any of the methods described above.

11.16 Disclosure.  The CARD BRANDS require that the following be disclosed to MERCHANT:  (i) if applicable, A&B is in control of Independent Sales Organization’s (“ISO”) and/or Member Service Provider’s (“MSP”) performance under this AGREEMENT; (ii) A&B must pre-approve all FEES; (iii) the AGREEMENT may not be amended without A&B’s express written consent; (iv) if applicable, ISO and/or MSP may not have access to MERCHANT’s funds; and (v) A&B may not waive the foregoing requirements. FUNDS