Ordinance No. 10,779ORDINANCE NO. 10,779
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS, AUTHORIZING THE CITY MANAGER TO NEGOTIATE AND
EXECUTE AN AGREEMENT FOR MERCHANT CARD PROCESSING
SERVICE; MAKING OTHER PROVISIONS RELATED THERETO; AND
PROVIDING FOR THE EFFECTIVE DATE THEREOF.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS:
Section 1: That the City Council of the City of Baytown, Texas, hereby authorizes the
City Manager to negotiate and execute an agreement for merchant card processing service under
terms and conditions deemed acceptable to the City Attorney and the City Manager.
Section 2: This ordinance shall take effect immediately from and after its passage by the
City Council of the City of Baytown.
INTRODUCED, READ and PASSED by the affirmative vote oft!
of Baytown this the 13 day of December, 2007.
SJEPT
i City Council of the City
. DONCARLOS, Mayor
APPROVED AS TO FORM:
4nNACIO/RAMIREZ, SR., 0^/Attorney
R:\Karcn\l-iles\Cily CouncihOnlinaiiccsY2007\Dccciiibcr 13\AuthorizcNcgoliationofCredilCardContracl.doc
CHASE Cp"".
Paymentech
SELECT MERCHANT PAYMENT CARD PROCESSING AGREEMENT
(GOVERNMENT ENTITY)
THIS SELECT MERCHANT PAYMENT CARD PROCESSING AGREEMENT(the"Agreement)is dated as of the Effective Date,among Paymentech,LLC,a Delav/are limited liability
company("Paymentech","we",or"us"),JPMorgan Chase Bank,N.A.,a national banking association("Member"),and City of Baytown,a vrtech'- L* ... t•>< _("Merchant",
"you",or"your").
WHEREAS Member is a member of several Payment Brands and,through Member,Paymentech is authorized to process the Transactions listed on Schedule A;and
WHEREAS Merchant wishes to accept Payment Instruments from its customers for the sale or lease of goods or services offered by Merchant;
ACCORDINGLY,in consideration of the mutual promises made and the mutual benefits to be derived from this Agreement,Paymentech,Member,and Merchant agree to the
following terms and conditions intending to be legally bound:
1. MERCHANT'S AccEPrANCE of PAYMENT INsrRUMENTS.
1.1 Exclusivity. You will tender to us Transaction Data generated from all your Transactions via electronic data transmission according to our formats and procedures. You will not use
the services of any bank,corporation,entity,or person other than Paymentech for authorization or processing of Transactions throughout the term of this Agreement,except for your
divisions,products,or business lines specified in your account application or for which we otherwise agree in writing not to process.If a future processing solution(s)requires the use of a
bank,corporation,entity or person other than Paymentech because Paymentech cannot support the processing of such processing solution(s),then the exclusivity requirements of this
Section 1.1 shall not be applicable to such processing solutions..
1.2 Certain Payment Acceptance Policies. Each Payment Transaction and Conveyed Transaction must be evidenced by a single Transaction Data record completed with(i)the
transaction date; (11)a brief description of the goods or services sold,returned,or cancelled; (III)the price of the goods or services or amount of any credit or adjustment;(iv)the
Customer name;(v)your name in a manner recognizable to Customers;(vi)your address;(vii)any applicable terms and conditions of the sale;and(viii)any other information which the
applicable Payment Brand may require. You shall not impose any surcharge or finance charge on the Transaction or otherwise require the Customer to pay the fees payable by you under
this Agreement if prohibited by the applicable Payment Brand. You shall not engage in any practice that unfavorably discriminates against or provides unequal treatment of the use of any
Payment Brand over any other Payment Brand. You shall not set a dollar amount above or below which you refuse to honor otherwise valid Payment Instruments in violation of Payment
Brand Rules. With respect to any Payment Transaction or Conveyed Transaction for which a Payment Instrument is not physically presented,such as in any on-line,mail,telephone,or
pre-authorized transaction,you must(i)have notified us on your application or otherwise in writing of your intention to conduct such Transactions and secured our agreement to accept
them and(ii)have procedures in place to ensure that each Transaction is made to a purchaser who actually is the Customer or an authorized user of the Payment Instrument.
Notwithstanding the foregoing,you acknowledge that under certain Payment Brand Rules,you cannot rebut a Chargeback where the Customer disputes making the purchase without an
electronic record(for example,"swiping",or"tapping"a Payment Instrument)or physical imprint of the Payment Instrument.
1.3 Operating Guide;Payment Brand Rules.You agree to comply with the operating guide attached to this Agreement,as amended from time to time("Operating Guide'),and all
Payment Brand Rules as may be applicable to you and in effect from time to time as published(on a website or otherwise)by any Payment Brand or of which you have been otherwise
informed,and such other procedures as we may from time to time prescribe for the creation or transmission of Transaction Data. We may modify and supplement the Operating Guide in
order to comply with requirements imposed by the Payment Brand Rules. You acknowledge that you have received a copy of the Operating Guide at or prior to your execution of this
Agreement,and that you can also view the Operating Guide on-line at the Chase Paymentech Solutions Internet website,www.chasepaymentech.com/solmersupcen.do.
1.4 Requirements for Payment Transactions. As to all Payment Transactions and Conveyed Transactions you tender to us for processing,you represent and warrant that,to the best
of your knowledge:
(1)The Transaction Data represents payment or refund of payment,for the bona fide sale or lease of the goods,services,or both.
(2)The Transaction Data represents an obligation of the Customer for the amount of the Transaction.
(3)The Transaction Data does not involve any element of credit for payment of a previously dishonored Payment Instrument or for any other purpose except payment fora current
transaction and,except in the case of approved installment or pre-payment plans,the goods have been shipped or services actually rendered to the Customer.
(4)The Transaction Data is free from any material alteration not authorized by the Customer.
(5)The amount charged for the Transaction is not subject to any dispute,setoff,or counterclaim.
(6)Neither you nor your employee has advanced any cash to the Customer(except as authorized by the Payment Brand Rules)or to yourself or to any of your representatives,agents,
or employees in connection with the Transaction,nor have you accepted payment for effecting credits to a Customer.
(7)The goods or services related to each Transaction are your sole property and you are free to sell them.
(8)You have made no representations or agreements for the issuance of refunds except as it states in your return/cancellation policy,which has been previously submitted to us in
writing as provided in Section 3.
(9)Any credit transaction submitted to us represents a refund or adjustment to a Transaction previously submitted.
(10)You have no knowledge or notice of information that would lead you to believe that the enforceability or collectibilrty of the subject Transaction Data is in any manner impaired.
The Transaction Data is in compliance with all applicable laws,ordinances,and regulations.You have originated the Transaction Data in compliance with this Agreement and any applicable
Payment Brand Rules.
2. AIEmogumioNs.
2.1 Obtaining Authorizations.You are required to obtain authorization/approval codes through Paymentech,in accordance with this Agreement,for all Payment Transactions. You
acknowledge that authorization/approval code of a Payment Transaction indicates only that credit is available for the Payment Transaction at the time the authorization is given,and it
does not constitute a representation from us or from a Payment Brand that a particular Transaction is in fact a valid or undisputed transaction entered into by the actual Customer or an
authorized user of the Payment Instrument.
2.2 Lack of Authorization. We reserve the right to refuse to process any Transaction Data presented by you(i)unless a proper authorization/approval code is recorded,(ii)if we
reasonably determine that the Transaction Data is or will become uncollectible from the Customer to which the transaction would otherwise be charged,or(III)if we determine that the
Transaction Data was prepared in violation of any provision of this Agreement.
3. REFUNDS AND AD]usTMENTS.
3.1 Disclosure of Refund Policy. You are required to maintain a policy with regard to the return/cancellation of merchandise or services and adjustment of Transactions.You are
required to disclose your return/cancellation policy to us on your application. Your return/cancellation policy must also be disclosed to your customers.
3.2 Changes to Policy. Any change in your return/cancellation policy must be submitted to us,in writing,not less than 14 days prior to the effective date of such change. We reserve
the right to refuse to process any Transaction Data made subject to a revised retum/cancellation policy of which we have not been notified in advance.
3.3 Procedure for Refunds/Adjustments. If you allow a price adjustment in accordance with your refund policy and in compliance with Section 3.1 above and Payment Brand Rules,
return of merchandise,or cancellation of services in connection with a Payment Transaction,you will prepare and deliver to us Transaction Data reflecting such refund/adjustment within 3
days of receiving the Customer's request for such refund/adjustment. The amount of the refund/adjustment cannot exceed the amount shown as the total on the original Transaction Data
except by the exact amount required to reimburse the Customer for postage that the Customer paid to return merchandise. You are not allowed to accept cash or any other payment or
consideration from a Customer in return for preparing a refund to be deposited to the Customer's account;nor may you give cash refunds to a Customer in connection with a Payment
Transaction,unless permitted or required by law.
4. SETTLEMENT,
4.1 Submission of Transaction Data. In order to be eligible to receive a more favorable interchange rate,you are required to transmit your Transaction Data to us no later than the
next business day immediately following the day that such Transaction Data is originated. For debit card transactions that are credits to a Customer's account,you agree to transmit such
Transaction Data to us within 24 hours of receiving the authorization for such Transaction. Unless otherwise indicated on Schedule A,you will be solely responsible for all communication
expenses required to facilitate the transmission of Transaction Data.
4.2 Merchant's Settlement Account. In order to receive funds from Paymentech,you must maintain a Settlement Account at a bank that is a member of the Automated Clearing
House("ACH)system and the Federal Reserve wire system. During the term of this Agreement,and thereafter until we notify you that all monies due from you under this Agreement
have been paid in full,you agree not to close your Settlement Account without giving us at least 5 days'prior written notice and substituting another Settlement Account. You are solely
liable for all fees and costs associated with your Settiement Account and for all overdrafts. You authorize Paymentech to initiate electronic credit and debit entries and adjustments to your
Settlement Account at any time without regard to the source of any monies in the Settlement Account. This authority will remain in full force and effect until we notify your bank that all
monies due from you under this Agreement have been paid in full. We will not be liable for any delays in receipt of funds or errors in Settlement Account entries caused by third parties,
including but not limited to delays or errors by the Payment Brands or your bank.
4.3 Conveyed Transactions. To the extent that you submit any Conveyed Transactions for processing by Paymentech and you do not have a valid agreement in effect with the
applicable Payment Brand,you hereby authorize us,at our option,to submit such transaction to the applicable Payment Brand,and to share with the applicable Payment Brand such
information from your Merchant Application as may be required in order to approve your acceptance of such Payment Brand's method(s)of payment.Subject to such approval,you agree
to the applicable Payment Brand's standard terms and conditions with respect to such method(s)of payment. Upon your transmission of such Conveyed Transactions to us,we will
forward the Conveyed Transaction to the appropriate Payment Brand. Payment of the proceeds due you will be governed by whatever agreement you have with that Payment Brand,and
we do not bear any responsibility for their performance. If your agreement with a Payment Brand requires the Payment Brand's consent for us to perform the services contemplated by
this Agreement,you are responsible for obtaining that consent.
4.4 Transfer of Settlement Funds.For all Payment Transactions,we will process your Transaction Data to facilitate the funds transfer between the various Payment Brands and you.
Promptly after we receive credit for such Transaction Data,we will provide provisional credit to the Settlement Account for the proceeds.The proceeds payable to you shall be equal to the
amounts received by us in respect of your Transaction Data minus the sum of the following: all fees,charges,and discounts set forth in Schedule A,all adjustments and Chargebacks,all
equipment charges(if any),all Customer refunds,returns and adjustments,all Reserve Account amounts,and any fees,charges,fines,assessments,penalties,or other liabilities that may
be imposed on us or the Member from time to time by the Payment Brands and all related costs and expenses incurred by us. You agree that such fees,charges,discounts,adjustments,
and all other amounts are due and payable by you at the time the related services are rendered to you;that all Reserve Account amounts are due and payable by you upon our request;
and that the related Chargebacks,Customer refunds,and adjustments,fees,charges,fines,assessments,penalties,and all other liabilities are due and payable by you when we receive
notice thereof from the Payment Brands or otherwise pursuant to Section 4 herein. In the event we do not deduct such amounts from the proceeds payable to you,you agree to pay all
such amounts to us. Alternatively,at our option,we may debit the Settlement Account for such amounts. Also,you agree to reimburse Paymentech,Member,the Payment Brands,
affiliates,officers,directors,employees,agents and sponsoring banks from any losses,liabilities,and damages of any and every kind(including,without limitation,our costs,expenses,
and reasonable attorneys'fees)arising out of any claim,complaint,or Chargeback(i)made or claimed by a Customer with respect to any Transaction Data submitted by you,(ii)caused
by your noncompliance with this Agreement,the Operating Guide,or the Payment Brand Rules,including any breach of a representation or warranty made by you,or(ill)resulting from
any voluntary or involuntary bankruptcy or insolvency proceeding by or against you. The obligation provided for in this Section does not ap
ply to any claim or complaint to the extent it is
caused by Paymentech's own negligence or willful misconduct.
4.5 Negative Amounts.To the extent the proceeds from Payment Transactions do not represent sufficient credits or the Settlement Account does not have a sufficient balance to pay
amounts due or reasonably anticipated to become due under this Agreement,we may pursue one or more of the following options: (i)demand and receive immediate payment for such
amounts;(ii)debit your Settlement Account for the amount of the negative balance;(ill)withhold your settlement payments until all amounts are pail;(iv)delay presentation of your
refunds until you make a payment to us of a sufficient amount to cover the negative balance;and(v)pursue any remedies we may have at law or in equity. Furthermore,if the amount
represented by your Transaction Data in any days negative due to refunds or credits being submitted by you in excess of your proceeds from Transactions,you are required to provide us
with sufficient funds prior to the submission of the Transaction Data so as to prevent the occurrence of a negative balance.
4.6 Delinquency/Merchant Fraud. If:(1)there Is a material,adverse change in your financial condition or your payment record with creditors; (11)you are in material default of this
Agreement;(ill)you change your billing practice in relation to shipment of merchandise or fulfillment of service or change refund procedures currently in place,and you fail to notify us in
advance; (N)you are receiving excessive Chargebacks(as defined in Section 7.2 below);(v)you significantly alter the nature of your business or product lines;or(vi)we have reasonable
grounds to believe that we may be or become liable to third parties for the provisional credit extended to you or that you may be liable to your Customers,Payment Instrument issuing
banks or the Payment Brands,or(vii)we have reasonable grounds to believe that we may be subject to any additional liabilities,including,without limitation,any fiches,fees,or penalties
assessed against us by any of the Payment Brands,arising out of or relating to your Payment Transactions,your Chargebacks,or your failure to comply with this Agreement,any of the
Payment Brand Rules,the Operating Guide,or the Security Guidelines(as defined in Section 12),we may temporarily suspend or delay payments to you during our investigation of the
issue and/or designate an amount of funds that we must maintain in order to protect us against the risk of,among other things,existing,potential,or anticipated Chargebacks and to
satisfy your other obligations under this Agreement(such funds being hereinafter referred to as the"Reserve Account"),which may be funded in the same manner as provided for negative
balances in Section 4.5. The Reserve Account will contain sufficient funds to cover any unbilled processing costs plus our estimated exposure based on reasonable criteria for Chargebacks,
returns,unshipped merchandise and/or unfulfilled services,and all additional liabilities anticipated under this Agreement. We may(but are not required to)apply funds in the Reserve
Account toward,and set off any funds that would otherwise be payable to you against,time satisfaction of any amounts which are or become due from you pursuant to this Agreement.The
Reserve Account will not bear interest,and you will have no right or interest in the funds in the Reserve Account;provided,however,that upon satisfaction of all of your obligations under
this Agreement,we will pay to you any funds then remaining in the Reserve Account. Any funds in the Reserve Account may be commingled with other funds,and need not be maintained
in a separate account. Effective upon our establishment of a Reserve Account,you irrevocably grant to us a security interest in any interest you may now have or later acquire in any and
all funds,together with the proceeds thereof,that may at any time be in our possession and would otherwise be payable to you pursuant to the terms of this Agreement.You agree to
execute and deliver to us such instruments and documents(including,without limitation,security agreements and releases)approved by your legal counsel,which approval shall not be
unreasonably denied,that we may reasonably request(I)to perfect and confirm the security interest and right of setoff set forth in this Agreement;and(ii)in connection with any return of
Reserve Account funds.
S. AccGuNnNG.We will supply a detailed statement reflecting the activity for your merchant acmunt(s)by online-aocess(or otherwise if agreed to by both parties). We will not be
responsible for any error that you do not bring to our attention within 45 days from the date of such statement.
6. $ .
6.1 Records. You agree to store original documentation of each Transaction for at least one year from the date of such Transaction,and to retain copies of all Transaction Data for at
least 18 months from the date of such Transaction. You may not charge a fee to your Customers for the creation or storage of such copies.
6.2 Response to Retrieval Requests.We will send you any Retrieval Request that we cannot satisfy with the information we have on file concerning any Transaction. In response,you
must provide us,in writing by certified or overnight mail or by confirmed fax(or by other means as agreed to by Paymentech),the resolution of your investigation of such Retrieval
Request and include legible copies of any documentation required by time Retrieval Request within 7 business days after we send it to you(or such shorter time as the Payment Brand Rules
may require). You acknowledge that your failure to fulfill a Retrieval Request in accordance with Payment Brand Rules may result in an irreversible Chargeback.
7. CHARGEBAcKs.
7.1 Chargeback Reasons.You may receive a Chargeback from a Customer or Payment Brand for a number of reasons under the Payment Brand Rules. The following are some of the
most common reasons for Chargebacks:
(1)Your failure to issue a refund to a Customer upon the return or non-delivery of goods or services.
(2)An authorization/approval code was required and not obtained.
(3)The Transaction Data is prepared incorrectly or fraudulently.
(4)We did not receive your response to a Retrieval Request within 7 business days or any shorter time period required by the Payment Brand Rules.
(5)The Customer disputes the Transaction or the authenticity of the signature on the Transaction Data or Payment Instrument,or claims that the Transaction is subject to a set-off,
defense,or counterclaim.
(6)The Customer refuses to make payment for a Transaction because in the Customer's good faith opinion,a claim or complaint has not been resolved,or has been resolved in an
unsatisfactory manner.
(7)The credit or debit card comprising the Payment Instrument was rot actually presented at the time of the Payment Transaction or you failed to obtain an electronic record or
physical imprint of such Payment Instrument, and the Customer denies making the purchase. The Merchant acknowledges that, under these circumstances, the fact that an
authorization/approval code was obtained does not mean that a particular Transaction is a valid or undisputed transaction entered into by the actual Customer or an authorized user of the
Payment Instrument.
7.2 Excessive Chargebacks.If we determine that you are receiving an excessive amount of Chargebacks,as defined by the Payment Brands from time to time,in addition to our other
remedies under this Agreement we may take the following actions:(i)review your internal procedures relating to acceptance of Payment Instruments and notify you of new procedures
you should adopt in order to avoid future Chargebacks;(id)notify you of a new rate we will charge you to process your Chargebacks;(ill)collect from you(pursuant to Section 4.6)an
amount reasonably determined by us to be sufficient to cover anticipated Chargebacks and all related fees,e)(p uses,and fines;or(iv)terminate the Agreement with written notice of
termination. You also agree to pay any and all Payment Brand fees and fines assessed against you,Paymentech,and/or Member relating to your violation of this Agreement,the
Operating Guide,or the Payment Brand Rules with respect to your Transactions or with respect to excessive Chargebacks under this Section.
7.3 Claims of Customers.You have full liability if any Transaction,for which we have given your Settlement Account provisional credit,is the subject of a Chargeback. Subsequently,
you are allowed to resubmit applicable Transaction Data for a second presentation,but only in accordance with Payment Brand Rules.To the extent that we have paid or may be called
upon to pay a Chargebeck,refund or adjustment for or on the account of a Customer and you do not reimburse us as provided for In this Agreement,then for the purpose of our obtaining
reimbursement of such sums paid or anticipated to be paid,we have all of the rights and remedies of such Customer under applicable federal,state,or local laws and you authorize us to
assert any and all such claims in our own name for and on behalf of any such Customer individually or all such Customers as a class.
S. DISPLAY of PAYMENT BRAND MARKS. Merchant is prohibited from using the Payment Brand Marks,as defined below(sometimes referred to herein as"Marks"),other than as
expressly authorized in writing by us. Payment Brand Marks mean the brands,emblems,trademarks and/or logos that identify a Payment Brand. Additionally,Merchant shall not use the
Payment Brand Marks other than to display decals,sgnage,advertising and other forms depicting the Marks that are provided to Merchant by us or pursuant to this Agreement or
otherwise approved in advance in writing by us. Merchant may use the Marks only to promote the services covered by the Marks by using them on decals,indoor and outdoor signs,
advertising materials and marketing materials;provided,that all such uses by Merchant must approved by us in writing.Merchant shall not use the Marks in such a way that Customers
could believe that the products or services offered by Merchant are sponsored or guaranteed by the owners of the Marks. Merchant recognizes that it has no ownership rights in the
Marks. Merchant shall not assign to any third party the rights to use the Marks. Merchant's sublicense to use the Marks terminates simultaneously with the termination of this Agreement.
9. Em.
9.1 Schedule A.You agree to pay us for our services as set forth in Schedule A in accordance with this Agreement.Unless otherwise expressly stated in Schedule A,your pricing is
based on all Transactions qualifying under the Payment Brand Rules for the lowest Payment Brand interchange rates. For Transactions that do not qualify for the best rate,the Payment
Brands may dictate that the Transaction is subject to a"downgrade",which will result in us charging you a higher rate than the qualified rate shown on Schedule A. Fees payable under
this Agreement that contain a fraction of a cent will be rounded up to the next full cent.
9.2 Price Changes.You acknowledge that your pricing is based on your annual volume of Transactions,method of processing,type of business,and interchange qualification criteria as
represented to us in your Application and restated on Schedule A. To the extent your actual volumes,method,type,and criteria differ from this information,we may modify the pricing on
Schedule A with 30 days'prior written notice. In addition,by giving written notice to you we may change our fees,charges,and discounts resulting from (i)changes in Payment Brand
fees (such as interchange,assessments,and other charges);(ii)changes in pricing by any third party provider of a product or service used by you;or(III)fees which are added by a
Payment Brand or card issuer. Such new prices will be applicable to you as of the effective date established by the Payment Brand or third party provider.
10. TERMINATION.
10.1 Term. This Agreement takes effect on the earlier of(1)our acceptance hereof(as evidenced by the execution of the Agreement by us)or(ii)the date we process your first
Transaction,and has an initial term expiring one year from that date. Unless otherwise terminated by either party as provided in this Agreement,the Agreement will automatically extend
for successive one-year terms;provided that Merchant shall have the right to provide notice of non-renewal in writing no less than 60 days prior to r the expiration date.Paymentech may
give notice of non-renewal of this Agreement in writing no more than 60 days and no less than 30 days prior to any expiration date. Any processing services provided after an expiration
date shall otherwise be in accordance with the terms of this Agreement.
10.2 Termination for Cause. If our services provided under this Agreement fail to conform to generally accepted standards for such services in the payment processing industry,your
sole remedy for such failure shall be that upon notice from you specifying the failure of performance,we will rectify such failure of performance. If we do not rectify our failure of
performance within 30 days after receipt of notification,you may terminate this Agreement upon 30 days'written notice to us,except that no cure period is allowed for termination based
on fraud or any voluntary or involuntary bankruptcy or insolvency proceedings against us.You may also terminate this Agreement without penalty if(i)Payment Brand Rules are materially
amended so that Merchant can no longer maintain compliance with such Rules or(ii)we increase our processing fees(not including increases for third party fees or costs or Payment
Brands'fees or assessments)so that the increased fees result in Merchants processing costs to be greater than amounts designated for such processing services as stated in and restricted
by Merchants official city budget. If you terminate the Agreement prior to the expiration of the term other than as a result of our material breach of this Agreement, in order to
compensate us for our lost revenue,you agree to pay as liquidated damages the lesser of (a)an amount equal to the fees(net of Payment Brand interchange,assessments,and fines)
that Paymentech would have received during the months remaining in the term of the Agreement based upon your representations contained in your Application and Schedule A,or(b)if
we have at such time been processing all of your Transaction Data for at least 6 consecutive months,an amount calculated by multiplying the average monthly fees(net of Payment Brand
interchange,assessments and fines)from the immediately preceding 6 months by the number of months remaining in the term of the Agreement. Such amount will be funded,to the
extent possible,according to the same methods for collecting amounts due under Section 4.5 of this Agreement. We may terminate this Agreement at any time upon written notice to you
as a result of any of the following events: (I)any noncompliance with this Agreement,the Payment Brand Rules,or the Operating Guide,which is not cured within 30 days of our notice to
you,except as otherwise provided in this Agreement and except that no cure period is allowed for termination based on Merchant fraud or failure to fund a Reserve Account;(di)any
voluntary or involuntary bankruptcy or insolvency proceeding involving you;(III)Paymentech deems you to be financially insecure; (Iv)you or any person owning or controlling your
business is or becomes listed in the MATCH file(Member Alert to Control High-Risk Merchants)maintained by Visa and MasterCard or any Payment Brand notifies us that it is no longer
willing to accept your Transaction Data;or(v)for a period of more than 60 consecutive days,you do not transmit Transaction Data to us.
10.3 Account Activity After Termination. Termination does not affect either parry's respective rights and obligations under this Agreement as to Transaction Data submitted before
termination. If you submit Transaction Data to us after the date of termination,we may,at our discretion,process such Transaction Data in accordance with the terms of this Agreement.
Upon notice of termination of this Agreement,we may estimate the aggregate dollar amount of Chargebadks and other obligations,liabilities and expenses that we reasonably anticipate
subsequent to termination,and you agree to immediately deposit such amount,or we may withhold such amount from your credits,in order to establish a Reserve Account pursuant to
and governed by the terns and conditions of this Agreement.
11. INDEMNIFICATION.We agree to indemnify,hold harmless and defend you and your affiliates,officers,directors,employees,
and agents from any losses, liabilities, and damages of any and every kind (including, without limitation, your costs,
expenses, and reasonable attorneys'fees)arising out of any Customer complaint or Chargeback related to(i)any failure by
us to properly safeguard the Customer's account information, (11)our failure to deliver funds processed by us in accordance
with Section 4.4 herein (which relates to payments due from us for Transaction Data),or(iii)any voluntary or involuntary
bankruptcy or insolvency proceeding by or against us. This indemnification does not apply to any claim or complaint relating
to your failure to resolve a payment dispute concerning merchandise or services sold by you or your negligence or willful
misconduct. It is the expressed intention of the parties hereto that the indemnity provided for in this paragraph is an
indemnity by us to indemnify and protect you, your affiliates, officers, directors, employees, and/or agents from the
consequences of our actions as outlined in the previous sentence, whether the same be in contract, tort, or otherwise,
whether the same be the sole or concurring cause of the resulting claim, loss, liability, damage cause of action, suit or
liability. This indemnification does not apply to any claim or complaint relating to your failure to resolve a payment dispute
concerning merchandise or services sold by you or your negligence or willful misconduct. In the event that any action or
proceeding is brought against you, your affiliates, officers, directors, employees, and/or agents to which it has been
determined that this indemnification applies,we agree to defend the action or proceeding by legal counsel acceptable to you,
which acceptance shall not be unreasonably withheld.The indemnification provided under this Section 11 shall survive the
expiration or earlier termination of this Agreement.
12. No DlsaosuRE or CusmmER INroRMATIoN. You will exercise reasonable care to prevent disclosure or use of Customer information,other than(1)to your agents and contractors for
the purpose of assisting you in completing a Payment Transaction,(ii)to the applicable Payment Brand,or(III)as specifically required by law.You are prohibited from storing CVV2 or
CVC2,magnetic stripe track data,and AVS and PIN data. You will store all media containing Permitted Customer Information(as of the date of this Agreement Permitted Customer
Infomwtion is limited to the Customer's name,the Payment Instruments account number,and the Payment Instruments expiration date,if any)in an unreadable format and in an area
limited to selected personnel on a"need to know"basis only. Prior to discarding any material containing Customer Information,you will destroy it in a manner rendering the Permitted
Customer Information unreadable. If at any time you determine that Customer Information has been compromised,you will notify us immediately and assist us in providing notification to
the proper parties,as we deem necessary. Merchant information may be shared by us with our affiliates and with the Payment Brands subject to the provisions of this Agreement and
Payment Brand Rules. You agree to comply with all security standards and guidelines that may be published from time to time by any Payment Brand,including,without limitation,the
Payment Card Industry Data Security Standards("PCIDSS"),the Visa Cardholder Information Security Program("CISP"),and the MasterCard Site Data Protection program. All Service
Providers you use must be recognized by Visa as CISP compliant service providers and all payment applications you use must be recognized by VISA as compliant with the Payment
Application Best Practices("PABP"). You understand that failure to comply with the Payment Brand Rules,including PCIDSS,CISP,SDP or other Security Guidelines,or the compromise of
any Customer account information,may result in assessments,fines,and/or penalties by the Payment Brands,and you agree to reimburse us immediately for any assessment,fine,or
penalty imposed on us or the Member due to any such event or your breach of this Section and any related loss,cost or expense incurred by us. You further agree to(I)exercise
reasonable due diligence to ensure that all of your Service Providers,agents,business partners,contractors,and subcontractors maintain compliance with the Security Guidelines and(ii)
provide us upon our request with the assessment of your compliance with Security Guidelines as required by the Payment Brands. If any Payment Brand requires an audit of you or any of
your Service Providers,agents,business partners,contractors,or subcontractors due to a data security compromise event or suspected event,you agree to cooperate with such audit and
agree to pay for all costs and expenses related to such audit,including all of our costs relating to such audit,including attorneys fees
13.INFORMATION AsouT MERcHANr's BursINEss.
13.1 Additional Financial Information.You agree to furnish to us within five days of our request your most recently prepared financial statements and credit information.
13.2 Other Information. With prior notice and during your normal business hours,our duly authorized representatives may visit your business premises and may examine only that
part of your books and records that pertain to your Transaction Data. You agree to provide us at least 30 days'prior written notice of your intent to change your product line or services,
or your trade name,or the manner in which you accept Payment Instruments. If we reasonably determine such a charge is material to our relationship with you,we may refuse to
process Transaction Data made subsequent to the change. You agree to provide us with prompt written notice if you are the subject of any voluntary or involuntary bankruptcy or
insolvency petition or proceeding.
14.Disc AIMER.'LIMITATION of DAMAGES. Subject to Section 5,we will,at our own expense,correct any data in and to the extent that such errors have been caused by us or by
malfunctions of our intellectual property or machines. Under no circumstances will Paymentech's financial responsibility for our failure of performance under this Agreement exceed the
total fees paid to us under this Agreement(net of Payment Brand fees,interchange,assessments and fines)for the 6 months prior to the time the liability arose.EXCEPT AS OTHERWISE
PROVIDED FOR IN THIS AGREEMENT,IN NO EVENT WILL ANY PARTY,ITS RESPECTIVE DIRECTORS,OFFICERS,EMPLOYEES,OR AFFILIATES,BE LIABLE FOR SPECIAL,INCIDENTAL,
CONSEQUENTIAL,OR PUNITIVE DAMAGES OR ANY LOSS,THEFT,DISAPPEARANCE,OR DAMAGE TO DATA TRANSMITTED ELECTRONICALLY IN CONNECTION WITH THIS AGREEMENT.
WHILE ALL PARTIES ACKNOWLEDGE THAT THIS IS AN AGREEMENT FOR SERVICES TO WHICH THE UNIFORM COMMERCIAL CODE DOES NOT APPLY,PAYMENTECH
AND MEMBER HEREBY DISCLAIM ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, MADE TO MERCHANT OR ANY OTHER PERSON, REGARDING QUALITY,
SUITABILITY,MERCHANTABILITY,FITNESS FOR A PARTICULAR PURPOSE,OR OTHERWISE(REGARDLESS OF ANY COURSE OF DEALING,CUSTOM,OR USAGE OF
TRADE)OF ANY SERVICES PROVIDED UNDER THIS AGREEMENT OR ANY GOODS PROVIDED INCIDENTAL TO SUCH SERVICES.
15.MISCELLANEOUS
ANEOUS,
15.1 Application and Credit Check. You represent and warrant that statements made on your Application for this Agreement are true as of the date of your execution of this
Agreement. Your signature on this Agreement authorizes us to perform any credit check deemed necessary with respect to Merchant.
15.2 Section Headings. The section headings of this Agreement are for convenience only and do not define,limit,or describe the scope or intent of this Agreement.
15.3 Assignment.We cannot assign this Agreement without your prior written consent,except that we may assign this Agreement to an entity qualified under Payment Brand Rules to
perform our obligations under this Agreement.You cannot assign or transfer your rights or delegate your responsibilities under this Agreement without our prior written consent.
15.4 Parties. This Agreement binds you and us and our respective heirs,representatives,successors(including those by merger and acquisition),and permitted assigns.You represent
and warrant that your execution of and performance under this Agreement(I)in no way breaches,contravenes,violates,or in any manner conflicts with any of your other legal obligations,
including,without limitation,your organizational documents or any agreement between you and any third party or affiliated entity;(ii)has been duly authorized by all necessary action and
does rat require any consent or other action by or in respect of any thud party;and(iii)that the person signing this Agreement on your behalf is duly authorized to do so. In providing services to
you,we will not be acting in the capacity of your agent,partner,or pint venturer;we are acting solely as an independent contractor.
15.5 SeverabildtV. Should any provision of this Agreement be determined to be invalid or unenforceable under any law,rule,or regulation,including any Payment Brand Rule,such
determination will not affect the validity or enforceability of any other provision of this Agreement.
15.6 Waivers. No term or condition of this Agreement may be waived except pursuant to a written waiver executed by the party against whom such waiver is sought to be enforced.
15.7 Entire Agreement.The Payment Brand Rules,Operating Guide,Application,and all schedules and attachments to this Agreement are made a part of this Agreement for all
purposes. This Agreement represents the entire understanding between Merchant and Paymentech with respect to the matters contained herein. This Agreement shall prevail over the
terms of any agreement governing the Settlement Account. In the event that any of the terns and conditions of this Agreement contradict or conflict with the terms and conditions of
Merchant's previously submitted Request for Proposal("RFP')or Paymentech's previously submitted response to the RFP,the terms and conditions of this Agreement shall control.
15.8 Notices. Except as otherwise provided in this Agreement,all notices must be given in writing and either hand delivered,faxed,mailed first class,postage prepaid,or sent via
overnight currier(and will be deemed to be given when so delivered or mailed)to the addresses set forth below or to such other address as either party may from time to time specify to
the other party in writing.
15.9 Governing Law;Venue. This Agreement will be governed by and construed in accordance with the laws of the State of Texas without reference to conflict of law provisions. Any
action,proceeding,litigation,or mediation relating to or arising from this Agreement must be brought exclusively in Harris County, Texas.
15.10 Force Majeure.Neither party will be liable for delays in processing or other nonperformance caused by such events as fires,telecommunications failures,utility failures,power
failures,equipment failures, labor strife,riots,war,terrorist attack,nonperformance of our vendors or suppliers,acts of God,or other causes over which the respective party has no
reasonable control,except that nothing in this Section 15.11 will affect or excuse your liabilities and obligations for Chargebacks,refunds,or unfulfilled products and services.
16. SuRvr feL• The provisions of Sections 4.2,4.4,4.5,4.6,7,10.3,11,14,15.11,and 17 shall survive the termination of this Agreement.
17. DEFiNmorks.
17.1 "Appllcatfod'is a statement of your financial condition,a description of the characteristics of your business or organization,and related information you have previously or
concurrently submitted to us to induce us to enter into this Agreement with you and that has induced us to process your Transactions under the terms and conditions of this Agreement.
17.2"ChargedatlP is a reversal of a Transaction you previously presented to Paymentech pursuant to Payment Brand Rules.
17.3"Conveyed Transact iorf is any Payment Transaction conveyed to a Payment Brand for settlement by such Payment Brand directly to Merchant.
17.4"C7vstomer"is the person or entity to whom a Payment Instrument is issued or who is otherwise authorized to use a Payment Instrument.
17.5"CkrsWnw Informadod'is personal information related to a Customer or a Customer's Payment Instrument that is obtained by a Merchant as part of a Transaction. Such
information could shall include a Customer's name,address,plane number,date of birth,Payment Instrument account number and expiration date,PIN data,CVV2 or CVC2 data,and any
additional data that is read,scanned,or otherwise obtained from the Payment Instrument,whether printed thereon,or magnetically,electronically or otherwise stored thereon.
17.6"Efi'ective Date means the date this Agreement takes effect pursuant to Section 10.1.
17.7"PlexCac1W means a stored value and/or loyalty card or account,the transactions of which are processed exclusively by Paymentech,that is issued by Merchant(or a group of
merchants,of which Merchant is a member)to a Customer for use only to make purchases from Merchant or other members of such group. A FlexCache account consists of an account
funded by a Customer either through a payment to the Merchant or another member of such group;by the return of goods initially purchased with such account;or by the Merchant or
another member of such group in the case of a promotion or the rewarding of the Customer via a loyalty program.
17.8"Payment Brand'is any payment meted provider whose payment method is accepted by Paymentech for processing,including,but not limited to,Visa,U.S.A.,Inc.,MasterCard
Intemational,Inc.,Discover Financial Services,LLC and other credit and debit card providers,debit network providers,FlexCache and other stored value and loyalty program providers.
17.9"Payment Brand Rufaf are the bylaws,rules,and regulations,as they exist from time to time,of the Payment Brands.
17.10"Payment Instument'is an account,or evidence of an account,authorized and established between a Customer and a Payment Brand,or representatives or members of a
Payment Brand that you accept from Customers. Payment Instruments include,but are not limited to,credit and debit cards,stored value cards,loyalty cards,electronic gift cards,
authorized account or access numbers,paper certificates,credit accounts and the like.
17.11"Payment Transaction'is a transaction conducted between a Customer and Merchant utilizing a Payment Instrument in which consideration is exchanged between the Customer
and Merchant.
17.12"Retfeva/Request'is a request for information by a Customer or Payment Brand relating to a claim or complaint concerning a Transaction.
17.13"Service Provider'is any party that processes,stores or transmits Customer Information on your behalf.
17.14"Stored Value Transactfon'is a Payment Transaction utilizing a Payment Instrument issued by or on the behalf of a Merchant in which a Customer receives value from the
Merchant in exchange for mnskderation from the Customer.
carp is a Stored Value Transaction,a Conveyed Transaction and/or a Payment Transaction.
Data"is the written or electronic record of a Transaction.
A,. Agreed and AooEpta2! Agreed and Accepted by:
V: BAYTO PAYME CH,LLC for I f and on behalf of 1PMORGAN CHASE BANK,N.A.
+� B rued signs r U �a /) A , �� By
,} a 2-0 A00 - U I�/ Print N
4 cxk
Date 2401 V(J ✓1 ■ai-� Title
Address Address
City,State Zip Date
To Be Completed By Paymentech,LLC
Your Merchant Agreement Contract Number is:
Your Merchant Processing Identification Number Will Be Provided At Time of Processing Set Up