MERCHANT SERVICES TERMS AND CONDITIONS

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MERCHANT SERVICES
TERMS AND CONDITIONS
a. Description of Services - ACHD shall use information
1. DEFINITIONS. provided by Merchant to send Merchant's ACH
Unless otherwise defined herein or in Appendix A Transactions to the ACH Network. For Debit Entries,
attached hereto, all capitalized terms used in these ACHD shall first send a debit transaction through its ODFI
Terms and Conditions have the meaning assigned to to the ACH Network which is then forwarded to the
those terms in the current rules and regulations of the Receiver’s account. All funds collected on behalf of the
National Automated Clearing House Association Merchant will be transmitted to a custodial account
("NACHA"). located with ACHD’s ODFI. After any applicable hold time,
ACHD will submit to the end-of-day settlement process
2. SERVICES, USE, LICENSE. any items that have not been returned or rejected. For
ACH Direct, Inc. (“ACHD”) and its affiliates provide Credit Entries, ACHD will submit all Credit Entries to the
verification, customer identification and Automated end-of-day settlement process. ACHD shall then schedule
Clearing House (“ACH”) services (the "Services") to these items to be sent through its ODFI to the ACH
ACHD’s customers (“Merchant(s)”) engaged in the Network which is then forwarded to the Receiver’s
business of selling goods or services. Subject to these account after the expiration of any applicable hold time.
Terms and Conditions, ACHD hereby grants to Merchant a b. Accepting ACH Transactions - ACHD shall accept
non-exclusive and nontransferable license to access and Transactions on a 24-hour basis. Transactions received
use ACHD’s products and services contracted for under after the designated cut-off time will be included in the
these Terms and Conditions and Merchant hereby accepts next day's processing. ACHD is responsible only for
such license and agrees to utilize and access the selected processing Transactions that are received by ACHD in the
Services in accordance with the practices and procedures proper format, pre-approved by ACHD and on a timely
established by ACHD. Merchant may use the Services (a) basis.
for its own internal business purposes and operations, c. Modifying ACH Transactions - At Merchant's
and/or (b) as a service provided to its customers, unless request, ACHD will make reasonable efforts to reverse,
otherwise notified by ACHD. No license or right to use, modify, or delete an entry after it has been submitted by
reproduce, translate, rearrange, modify, enhance, Merchant prior to being submitted to the ACH Network.
display, sell, lease, sublicense or otherwise distribute, All requests must be made in writing, signed by an
transfer or dispose of any of ACHD’s Proprietary Property, individual pre-authorized by Merchant to make such
as defined in Section 3 below, in whole or in part, is requests and faxed or delivered to ACHD. Merchant
granted except as expressly provided by these Terms and agrees that ACHD will not be held responsible for any
Conditions. Neither Merchant nor any of its affiliates shall losses, directly or indirectly, incurred by Merchant or
reverse engineer, decompile or disassemble the other third parties as a result of ACHD's failure to
Proprietary Property. Additionally, nothing in these Terms accomplish the requested modification or deletion before
and Conditions shall be construed to provide Merchant the Transaction has been submitted to the ACH Network.
with a license of any third-party proprietary information Further, Merchant acknowledges that once a Transaction
or property. is submitted to the ACH Network, it cannot be modified
or deleted.
3. OWNERSHIP d. Rejecting or Returning ACH Transactions - ACHD
All computer programs, trademarks, service marks, may delay or reject any Transaction without prior
patents, copyrights, trade secrets, know-how, and other notification to Merchant for any reason permitted or
proprietary rights in or related to ACHD’s products and required under the Rules or Regulations or if, ACHD has
services (the “Proprietary Property”), are and will remain reason to believe such Transaction is fraudulent or
the sole and exclusive property of ACHD, whether or not improperly authorized. ACHD shall have no liability to
specifically recognized or perfected under applicable law. Merchant by reason of the rejection of any such Entry.
ACHD shall own all rights, title and interest, including all ACHD shall make available to Merchant details related to
intellectual property rights, in and to any improvements the receipt of any returned or rejected Entries from the
to the existing ACHD products or services and/or any new ACH Network and shall credit or charge such Entries to
programs, upgrades, modifications or enhancements the end-of-day settlement process. Unless Merchant
developed by ACHD in connection with rendering any receives notification that an entry has been returned or
services to Merchant (or any of its affiliates), even when rejected, Merchant should consider the item as paid.
refinements and improvements result from Merchant’s ACHD may, but shall have no obligation to retransmit a
request. To the extent, if any, that ownership in such returned or rejected Transaction.
refinements and improvements does not automatically e. Processing Limits - ACHD may impose a cap on the
vest in ACHD by virtue of Merchant’s agreement to these dollar amount of Transactions it will process for
Terms and Conditions or otherwise, Merchant hereby Merchant. These limits may be changed by ACHD from
transfers and assigns (and, if applicable, shall cause its time to time, upon notice to Merchant. If Merchant
affiliates to transfer and assign) to ACHD all rights, title, exceeds the established limits, ACHD may temporarily
and interest which Merchant or any of its affiliates may suspend Transaction processing or temporarily hold the
have in and to such refinements and improvements. All funds that are in excess of the established limits.
reference to any of ACHD’s service marks, trademarks, f. Holding of Funds - The standard hold time of
patents or copyrights, or those of ACHD’s partners or Merchant’s funds for Debit and Credit Entries is four (4)
vendors, shall be made in compliance with the Business Banking Days. Merchant may request a
requirements, including updates periodic updates thereto, reduction of hold time on Debit and/or Credit Entries by
as provided at submitting the applicable form provided by ACHD and
http://www.achdirect.com/resources/trademark.asp. supporting documents. ACHD may require separate
security safeguards from Merchant to support such a
4. ACH PROCESSING SERVICES. reduction but is under no obligation to grant Merchant’s
request. Should ACHD observe any irregular Transaction
Version 04.09.03 1
or fraudulent activity by Merchant, or as required by law, Application, an additional $0.29 batch settlement fee
ACHD reserves the right to place a longer hold time shall be charged for each Settlement Entry.
without prior written notice to Merchant. i. Discount Fees - Should ACHD determine that a
g. Security Deposit - ACHD may require a security
Discount Fee is required, Merchant shall be provided
deposit or "Reserve Account" to process transactions for
Merchant. The Reserve Account shall be used by ACHD notice in writing of the amount, which may be revised
to offset any returned items, charge-backs or other based on periodic review of Merchant’s transaction
Merchant obligations to ACHD that ACHD is unable to history, volumes, amounts and return ratios resulting in
collect from Merchant’s Settlement account or other termination of the discount fee or imposition of a greater
means as prescribed herein. Should ACHD determine that or lesser discount fee amount. Any such discount fee
a Reserve Deposit is required, Merchant shall be provided collected under the terms hereunder will be debited
notice in writing of the amount, which may be revised
directly from Merchant’s settlement account as an offset
based on periodic review of Merchant’s transaction
volumes, amounts and return ratios resulting in a greater of Merchant’s daily funding.
or lesser deposit amount. The Reserve Account may be j. Receiver Authorization. Merchant shall obtain
funded, at ACHD’s sole discretion, through any or all of authorization from Receiver prior to requesting a debit
the following: and/or credit to Receiver's account. Merchant shall retain
(a) Direct payment by Merchant - At the request of proof of Receiver's authorization for a period of two (2)
ACHD, Merchant will deposit funds in the Reserve years from the termination or revocation of the
Account; (b) The proceeds of transactions processed on authorization or for the appropriate period designated by
Merchant’s behalf; or (c) The transfer by ACHD into the any applicable Rules or Regulations and shall provide
Reserve Account of funds withdrawn from Merchant’s such proof of authorization to ACHD or its ODFI upon
Settlement Account or any other accounts, including request. If Merchant fails to provide such proof within
certificates of deposit, maintained by Merchant or five (5) Business Banking Days, ACHD may impose a fine
Merchant’s guarantor, if any, with any designated of up to $100 per occurrence. Merchant shall cease
depositary or other financial institution. Merchant and initiating Transactions to a Receiver immediately upon
Merchant’s guarantor hereby grants ACHD a security receipt of any actual or constructive notice of that
interest in all said accounts and authorizes ACHD to make Receiver's termination or revocation of authority.
such withdrawals at such times and in such amounts as Merchant may re-initiate Transactions to a Receiver only
may be necessary under this Agreement. Merchant and upon receiving new authorization from Receiver.
Merchant’s guarantor hereby instruct said financial k. ACH Chargebacks. Merchant will be charged a
institutions to honor any requests made by ACHD under chargeback fee on a per occurrence basis, for every ACH
the terms of this provision. Merchant and Merchant’s Chargeback (defined in Appendix A) posted to Merchant’s
guarantor will hold harmless the financial institutions and account. Additionally, ACHD will regularly monitor
indemnify them for any claims or losses they may suffer Merchant’s chargebacks. Using limits established by
as a result of honoring withdrawal requests from ACHD. NACHA as a standard for review, ACHD reserves the right
The Reserve funds shall be held by ACHD for a minimum to suspend and/or terminate Merchant’s access to the
of ninety (90) calendar days beyond the date of the last Services should Merchant’s chargeback ratio exceed
item processed by ACHD on Merchant's behalf. In the allowable limits in any given calendar month. ACHD will
event ACHD has reason to believe that (1) Merchant has make reasonable efforts to provide Merchant with notice
acted in a fraudulent manner; or (2) Merchant has not and a time to cure its excessive chargebacks prior to
obtained proper authorization for a transaction; or (3) suspending or terminating Merchant’s access to the
Merchant will not be able to meet its obligations to Services. In compliance with the Rules, Merchant
ACHD; or (4) that ACHD is at risk of incurring additional authorizes ACHD to provide to ODFI and NACHA
expenses due to Merchant’s actions, ACHD may extend Merchant’s company and contact information as well as
the hold on Merchant’s Reserve funds up to two (2) years transaction details should Merchant’s ACH chargeback
from the last transaction activity date or the maximum ratio exceed the allowable limits in any given calendar
time allowed by law. The Reserve Deposit will then be month. Merchant acknowledges ACHD’s right to
returned to Merchant less any fees and/or any other reimbursement of any chargebacks or returns that post
amounts owed to ACHD. to Merchant’s account that ACHD is unable, for any
h. Settlement and Finality – At the close of each reason, to debit from Merchant’s bank account.
Business Banking Day, ACHD will calculate Merchant’s l. Ceasing Activities. Merchant shall cease initiating
Transactions immediately upon receipt of any actual or
Settlement Amount, including all applicable debits,
constructive notice of Receiver's termination or
credits, fees and adjustments. In the event the sum total revocation of authority. Additionally, Merchant shall not
of the Settlement Amount is a non-zero value, ACHD will re-submit any Transaction unless it is returned for
initiate a Settlement Entry to Merchant’s Settlement insufficient funds (R01) or uncollected funds (R09) or
Account. Positive totals will result in a Credit Entry to unless a new authorization is obtained from Receiver.
Merchant’s Settlement Account; negative totals will result
in a Debit Entry to Merchant’s Settlement Account. In 5. ACCOUNT VERIFICATION SERVICES.
If utilizing ACHD’s verification and authentication services
the event that a Debit Entry to Merchant’s Settlement
(“Verification Services”), Merchant will submit a
Account is returned for any reason, all Credit Entries verification transaction inquiry to ACHD. ACHD will then
initiated by Merchant may be cancelled or reversed at process the transaction and provide Merchant the results
ACHD’s discretion. In addition to the fees outlined on the of the verification inquiry.

Version 04.09.05 2
a. Types of Verification Services. Depending on the against various national databases of consumer
services Merchant has registered for, as well as the level information records. ACHD will then provide the results of
of participation by the account holder’s financial its investigation to Merchant.
institution, the transaction may be processed through a. Permissible Uses. Merchant agrees it will ONLY use
one or more of the following types of verification: this service to effectuate one or more of the following, in
1) ATMVerify® Level I – Verify whether or not accordance with the Gramm-Leach-Bliley Act and 16 CFR
the account number inquired upon is in good standing as Part 313:
of the time of the inquiry, and whether or not sufficient 1) To protect against or prevent actual or
funds exist within the specified account to cover the potential fraud; unauthorized transactions,
amount specified as part of the verification transaction. claims, or other liability.
2) ATMVerify® Level II – Verify the current 2) For required institutional risk control or for
status of the banking account as of the last reported resolving consumer disputes or inquiries.
Business Banking Day, as reported by the participating 3) To persons holding a legal or beneficial
financial institution. interest relating to the consumer.
3) NCNVerify™ – Verify whether or not the 4) To persons acting in a fiduciary or
account number inquired upon is currently listed in one representative capacity on behalf of the consumer.
or more national databases of check writers. 5) To comply with Federal, State or local laws,
b. DISCLAIMER. None of ACHD’s Verification Services rules and other applicable legal requirements.
can verify that the name provided by Merchant as the 6) As necessary to effect, administer, or enforce
account holder matches the actual owner of the account a transaction that a consumer requests or authorizes.
number submitted by Merchant. b. Prohibited Business Activities. Merchant confirms
c. PERMISSIBLE USES. IN ADDITION TO COMPLIANCE that it is NOT involved in any of the following business
WITH FAIR CREDIT REPORTING ACT REQUIREMENTS AS activities:
REFERRED TO IN APPENDIX B ATTACHED HERETO, 1) Investigative companies including private
MERCHANT SHALL USE THE VERIFICATION SERVICES investigators and detective agencies except
ONLY IN CONNECTION WITH PAYMENTS PRESENTED TO those licensed for – and exclusively practicing,
MERCHANT BY ITS CUSTOMERS IN EXCHANGE FOR investigative work for employment purposes.
GOODS OR SERVICES. MERCHANT SHALL NOT RESELL 2) Bail bond companies.
THE DATA OR THE ATMVERIFY® SERVICE TO THIRD 3) Dating Services.
PARTIES. 4) Internet people locator services to locate lost
d. No Retention of Data. Merchant acknowledges and loves, friends, family members, or for personal
agrees that it shall not retain, store, compile or reasons, such as dating.
aggregate the results of verification inquiries received 5) Adoption search firms.
from ACHD except as required by applicable law or to 6) Diet centers.
perform its obligations under this Agreement. 7) Credit clinics; credit repair companies; and
e. Representation by Merchant. Each request for data credit counseling firms.
through the Verification Services shall constitute a 8) Media agencies; news agencies; and
representation, warranty and certification by Merchant journalists.
that the data (i) shall be used and disclosed only in 9) Businesses operating out of a residence
accordance with the terms of the Agreement, and in except as provided by ACHD policy.
accordance with any applicable Rules or laws; (ii) shall be 10) Any fraudulent or illegal activity, such as
used solely for the intended use as stated by Merchant on identity theft, harassment, stalking.
the application and that use is in compliance with the 11) Any company or individual who is known to
permissible uses under the FCRA and U.S. Code sections have been involved in credit fraud, or other
listed in these Terms and Conditions and attached unethical business practices.
Appendices; (iii) Merchant will follow proper procedures
for adverse action notification to its customers, as 7. RECEIVING REPORTS AND TRANSACTION FILES.
provided in Appendix B to the Terms and Conditions Merchant is responsible for communicating with ACHD's
attached hereto; and (iv) Merchant acknowledges it has Host Processing System to receive daily reports and/or
implemented security measures to prohibit the transaction files. ACHD is under no obligation to transmit
unauthorized access to the information provided. this data to Merchant.
f. Audit. Merchant agrees to cooperate fully with ACHD
in conducting a review of Merchant’s use of the 8. AUTHORIZATION. Merchant authorizes ACHD to
Verification Services to verify that Merchant is using the allow PaySimple full administrative access to any and all
services in compliance with this Agreement. Merchant Accounts that Merchant maintains with ACHD,
g. Immediate Termination. ACHD reserves the right to including (if applicable) originating transactions and
immediately terminate Merchant’s access to the receiving the corresponding results on Merchant’s behalf
Verification Services should ACHD have reason to believe and/or receiving daily activity and periodic transaction
that Merchant is using the Verification Services for a reports.
purpose other than a permissible use.
9. PAYMENT AND RIGHT TO OFFSET.
6. CUSTOMER IDENTIFICATION SERVICES. ACHD shall have the right to offset against any amount
If utilizing ACHD's ID Verify Services, Merchant will payable by ACHD to Merchant under any provision of
submit a request to ACHD for verification of consumer these Terms and Conditions, any amounts owed ACHD by
information. ACHD will use its best efforts to verify the Merchant, including chargebacks or returns posted to
information provided by comparing that information Merchant’s account, or any damages sustained by ACHD

Version 04.09.05 3
as a result of Merchant's violation, breach or non- Confidential Information or disclose, in whole or in part,
performance of its obligations under these Terms and the Confidential Information to any individual or entity,
Conditions. In the event the funds in Merchant's except to those of Merchant’s employees or affiliates who
designated account are insufficient to cover Merchant's require access for Merchant’s authorized use of the
obligations, Merchant agrees to submit payment of products or services and agree to comply with the use
amounts owing to ACHD upon demand and through and nondisclosure restrictions applicable to the
alternative means. Unless otherwise agreed upon, ACHD Confidential Information. This Section will not apply to
may debit any alternative account maintained by Confidential Information that (i) was already available to
Merchant for the amounts due and owing without further the public at the time of disclosure, (ii) becomes
notice to or approval from Merchant. generally known to the public after disclosure to the
other party, through no fault of the other party, or (iii) is
10. TAXES. disclosed under force of law, governmental regulation or
Merchant is solely responsible for payment of any taxes court order. Merchant acknowledges that any
(including sales or use taxes, transfer taxes, excise unauthorized use or disclosure by it or any of its affiliates
taxes, intangible taxes, property taxes, and similar taxes of the Confidential Information may cause irreparable
and duties) resulting from Merchant’s acceptance of the damage to ACHD. As such, if ACHD becomes aware of
license granted hereunder and use of ACHD’s products Merchant’s breach or threatened breach of this Section
and services, excluding, however, any taxes payable by 13, ACHD may suspend any and all rights granted to
ACHD as a result of income earned by ACHD hereunder. Merchant under these Terms and Conditions and shall be
Merchant shall reimburse ACHD should ACHD be charged entitled to injunctive relief, without the need of posting a
for any tax obligation of Merchant. Merchant shall hold bond, in addition to all legal or equitable relief that may
ACHD harmless from all claims and liability arising from be available to ACHD.
Merchant’s failure to report or pay such taxes.
15. REPRESENTATIONS AND WARRANTIES.
11. NSF FEE REBATE PROGRAM. a. ACHD’s Representations and Warranties. ACHD
Merchant may request that ACHD collect the NSF fee, represents and warrants to Merchant that:
allowable under the laws of Merchant's domiciliary state, 1) ACHD’s agreement to perform the Services
from a designated Receiver upon any return of an ACH hereunder does not violate any agreement or obligation
transaction from that Receiver either for Insufficient between ACHD and any third party.
Funds (NSF) or Uncollected Funds. ACHD shall rebate 2) To the best of ACHD’s knowledge, none of the
Merchant a percentage of any such funds collected from products or services being provided to Merchant will
Receiver. infringe on any copyright, patent, trade secret or other
proprietary right held by any third party.
12. INVESTIGATIVE REPORT. 3) To the best of ACHD’s knowledge, none of its
Merchant is on notice that an investigative or Consumer products or services violates any international, federal,
Report may be made in connection with the application. state, or local law or regulation.
Merchant authorizes ACHD or any Credit Bureau or any 4) When executed and delivered by ACHD, the
Credit Reporting Agency employed by ACHD or any of its agreement with Merchant will constitute the legal, valid,
agents to investigate the references given or any other and binding obligation of ACHD, enforceable in
statements or data obtained from Merchant, or any of its accordance with its terms.
principals, in connection with the application or for the b. Merchant’s Representations and Warranties.
purpose of obtaining services from ACHD. Subsequent Merchant understands and agrees that ACHD’s ODFI is a
Consumer Reports and inquiries may be required or used third party beneficiary of Merchant’s representations and
in conjunction with an update, renewal or extension of warranties herein. Merchant represents and warrants to
the application. ACHD that:
1) Merchant’s agreement to license ACHD’s
13. VOLUME AND FINANCIAL RE-EVALUATION. products and services and to engage ACHD to perform
ACHD reserves the right to re-evaluate Merchant's the Services hereunder does not violate any agreement
financial position at its own discretion throughout the or obligation between Merchant and any third party.
course of ACHD's business relationship with Merchant. 2) To the best of Merchant’s knowledge, neither
Such re-evaluation may result in modification of the fee any information delivered by Merchant to ACHD in
structure, reserve amount, applicable discount fees or support of the application and these Terms and
termination of the agreement between Merchant and Conditions nor Merchant's performance of its obligations
ACHD in accordance with these Terms and Conditions. hereunder will infringe on any copyright, patent, trade
secret or other proprietary right held by any third party.
14. CONFIDENTIALITY 3) None of the activities for which Merchant has
Merchant acknowledges that the products, services and engaged the services of ACHD shall violate any
information relating to ACHD’s products and services international, federal, state, or local law or regulation.
(including without limitation these Terms and Conditions) Neither Merchant nor any of its affiliates will use the
contain confidential and proprietary information ACHD products and/or services for (i) any unlawful,
developed by, acquired by, or licensed to ACHD (the fraudulent, libelous, defamatory, threatening, abusive or
“Confidential Information”). Merchant will take (and will otherwise objectionable usage of any kind, including
cause its affiliates to take) all reasonable precautions without limitation any transmissions constituting or
necessary to safeguard the confidentiality of the encouraging conduct that would constitute a criminal
Confidential Information. Neither Merchant nor any of its offense, give rise to civil liability or otherwise violate any
affiliates will make any unauthorized use of the

Version 04.09.05 4
local, state, national or foreign law, including without the Agreement. This guaranty shall not be discharged or
limitation the U.S. export control laws and regulations. otherwise affected by any waiver, indulgence,
4) When executed and delivered by Merchant, compromise, settlement, extension of credit, or variation
the agreement with ACHD will constitute the legal, valid, of terms of the Agreement, unless specifically discharged
and binding obligation of Merchant, enforceable in or amended. Guarantor understands further that his/her
accordance with its terms. obligations are independent of Merchant's obligations.
5) If applicable, Merchant represents and Guarantor understands that he/she has no right to
warrants that with respect to all ACH Transactions enforce a remedy which ACHD now has or may later have
originated by ACHD on behalf of Merchant that (i) each as against Merchant nor to participate in security now or
Receiver has authorized the debiting and/or crediting of later held by ACHD. Guarantor agrees to waive any
its account (ii) each Transaction is for an amount agreed notice of acceptance of this guaranty, notice of
by the Receiver and (iii) each Transaction is in all other nonpayment or nonperformance of any provision of the
respects properly authorized (iv) Merchant shall provide Agreement by Merchant, and all other notices or
proof of authorization for any Transaction to ACHD upon demands regarding the Agreement. Guarantor does
request within five (5) Business Banking Days. agree to promptly provide to ACHD any information
reasonably requested by ACHD from time to time
16. INDEMNIFICATION. concerning his/her financial condition(s), business
Each party bears all responsibility for its own employees' history, business relationships, and employment
actions while in that party’s employ. Each party shall information.
indemnify and hold harmless the other party and its
officers, directors, employees, and agents, from and 18. LEGAL AND REGULATORY COMPLIANCE.
against any and all claims, demands, actions, losses, Each party is solely responsible for ensuring that its
damages, liabilities, expenses, expenditures, and costs policies and procedures meet the requirements of the
including but not limited to attorneys' fees and other Rules and Regulations, including Merchant’s requirements
costs of defense, including settlement costs, that relate under the Rules provisions for self-auditing. ACHD bears
to or result from any material breach of this Agreement. no responsibility for any lack of compliance with these
Merchant shall indemnify and hold harmless ACHD and its Rules and Regulations by Merchant and directs Merchant
officers, directors, employees, and agents from and to seek the counsel of outside legal assistance should
against any and all claims, demands actions, losses, Merchant have questions or concerns regarding
damages, liabilities, expenses, expenditures, and costs compliance with such. Merchant agrees not to initiate
including but not limited to attorneys’ fees and other entries that violate the laws of the United States,
costs of defense, including settlement costs, that relate including but not limited to, sanctions enforced by the
to or result from (i) any material breach of Merchant’s Office of Foreign Assets Control (OFAC). It is Merchant’s
representations and warranties contained herein, (ii) any responsibility to obtain information regarding OFAC
alleged violation by Merchant of any applicable law, Rule enforced sanctions. Merchant may obtain further
or Regulation, or (iii) any action of Merchant, it's agents information from the OFAC Compliance Hotline at (800)
or employees in connection with any Transaction subject 540-OFAC.
to these Terms and Conditions. Further Merchant
acknowledges that ACHD may rely solely on identifying 19. RULES AND REGULATIONS VIOLATIONS.
numbers provided by Merchant to determine the bank Merchant shall reimburse ACHD for any fines or loss of
and account in question for each Transaction even if the funds imposed on ACHD for any violation of the Rules or
numbers identify a bank or account holder that differs Regulations by Merchant. ACHD shall provide Merchant
from the one Merchant has identified by name. Merchant written notice of any such fine. In the event Merchant
shall indemnify ACHD for any losses, liabilities, costs or fails to comply with this remedy within thirty (30) days’
expenses ACHD or any third party suffers or incurs as a of notice, Merchant shall be assessed a fee of $100.00
result of an incorrect account or other identification. All per item in violation of the Rules or Regulations, in
disputes between Merchant and its Receiver(s) relating to addition to any fees imposed by NACHA, ODFI or any
any Transaction will be settled by and between Merchant other governmental or legal authority. Assessment of
and Receiver. All disputes between Merchant and a third such additional fee will in no way limit ACHD’s right to
party related to the processing of a credit card pursue action under Section 4j above, or to obtain other
transaction, unless directly caused by ACHD’s remedies available under applicable law.
PaymentsGateway, will be settled by and between
Merchant and the credit card processor or other third 20. LIMITS OF LIABILITY.
party. Merchant agrees that ACHD bears no responsibility a. Errors of Others - ACHD shall not be held responsible
or involvement in any such dispute. for errors, acts or failures to act of others, including, and
among other entities, banks, communications carriers or
17. PERSONAL GUARANTY clearing houses through which Transactions may be
The signatory below (the “Guarantor”) is a principal of originated or through which ACHD may receive or
Merchant or other third party, and hereby personally transmit information, and no such entity shall be deemed
guarantees to ACHD, its successors and assigns, the full, an agent of ACHD.
prompt, and complete performance of Merchant and all of b. Damages Waiver – Neither party shall be liable to
Merchant’s obligations under the Merchant Services the other or any third party for any special,
Application and Agreement (the “Agreement”), including consequential, incidental or punitive damages of any kind
but not limited to all monetary obligations arising out of or nature incurred in relation to these Terms and
Merchant’s performance or non-performance under the Conditions, whether or not (i) any claim for these
Agreement, whether arising before or after termination of damages is based on tort or contract; or (ii) the other

Version 04.09.05 5
party knew or should have known the likelihood of such ACHD’s PaymentsGateway in violation of any Federal,
damages occurring under the circumstances. Neither State or foreign law, including but not limited to,
party shall assert any such claim against the other party copyrighted material, material legally judged to be
or its subsidiaries or affiliated companies or their threatening, obscene, or material protected by trade
respective officers, directors, or employees. ACHD’s secret laws. ACHD reserves the right to use all means
maximum liability hereunder for any claims whatsoever necessary to monitor Merchant’s actions in the event of a
shall not exceed the total amount of all fees paid by real or perceived security breach. Merchant agrees that
Merchant to ACHD during the three-month period ACHD, at its discretion, may remove objectionable
preceding the origination of the claim giving rise to materials residing on ACHDs servers. ACHD shall use its
liability. No claim may be brought by Merchant or any of discretion to define what constitutes objectionable
its affiliates more than one (1) year after the accrual of material. ACHD reserves the right to terminate Services
the claim. The limitations of liability contained in this to Merchant should ACHD deem Merchant’s use of the
section shall apply without regard to whether other Services are for an unlawful purpose. In the event of
provisions of the Terms and Conditions have been such an occurrence, ACHD shall make reasonable efforts
breached or have proven ineffective. to notify Merchant prior to taking any such action, but is
c. ODFI Liability - Merchant understands and agrees not required to do so.
that ACHD has full and exclusive power to provide ODFI b. Proper Usage. Merchant agrees to comply with the
with directions on Merchant’s behalf. ODFI has no liability reasonable and acceptable use policies, rules,
whatsoever for ACHD’s acts, omissions or representations regulations, terms and conditions of any networks
and is not responsible for any loss caused by ACHD. accessed by Merchant through ACHD’s Services. ACHD
ACHD is not an agent of ODFI and has no authority to act reserves the right to deny access to, or close any
or make commitments on behalf of ODFI. ODFI will not account(s) which, in ACHD’s opinion, is (are) causing or
be monitoring ACHD’s transactions in respect of may cause, harm to or negatively affect an ACHD server
Merchant’s funds. All Merchant complaints and claims or the server of a third party. In the event of such an
arising out of these Terms and Conditions shall be made occurrence, ACHD shall make reasonable efforts to notify
solely to ACHD. IN NO EVENT SHALL ODFI BE LIABLE Merchant prior to taking any such action, but is not
FOR ANY SPECIAL, INCIDENTAL, INDIRECT, required to do so.
CONSEQUENTIAL OR EXEMPLARY DAMAGES, NOR SHALL
ODFI HAVE LIABILITY IN ANY EVENT IN EXCESS OF THE 24. DISCLAIMER OF WARRANTIES.
FEES IT RECEIVES FOR HANDLING MERCHANT’S Except as otherwise specifically provided herein, ACHD’s
TRANSACTIONS. Merchant agrees that these limitations products and services are provided hereunder “As Is”
are reasonable given the fact that no compensation is without warranty of any kind. Except as otherwise
being paid to ODFI by Merchant. specifically provided herein, to the maximum extent
permitted by law, ACHD expressly disclaims any and all
21. NOTICE OF ERRONEOUS OR UNAUTHORIZED warranties, conditions, representations, and guarantees
TRANSFERS with respect to the ACHD products and services, whether
Merchant shall regularly and promptly review all express or implied, arising by law, custom, prior oral or
Transactions and other communications from ACHD and written statements, or otherwise, including without
shall immediately notify ACHD upon discovery of any and limitation, any warranty of merchantability, fitness for a
all discrepancies between Merchant's records and those particular purpose or non-infringement. No
provided by ACHD, the ODFI or Merchant's bank, or with representation or other affirmation of fact, including,
respect to any transfer that Merchant believes was made without limitation, statements regarding capacity,
without proper authorization. Upon notification by suitability for use or performance of the ACHD products
Merchant, ACHD will use its best efforts to reverse the or services, whether made by employees of ACHD or
Transaction notified of. However, Merchant acknowledges otherwise, which is not contained in these Terms and
that the Transaction may have progressed beyond Conditions, shall be deemed to be a warranty by ACHD
ACHD's ability to control by the time of such notice and for any purpose, or give rise to any liability of ACHD
under such circumstances, Merchant accepts full whatsoever.
responsibility for all losses, liabilities, costs or expenses
Merchant, ACHD or any third party suffers or incurs as a 25. FORCE MAJEURE.
result of ACHD's inability to reverse the transaction. Neither party shall be liable for, or be considered in
breach of or default under these Terms and Conditions on
22. ACHD SERVICE POLICY. account of any delay or failure to perform its obligations
Merchant acknowledges and understands that ACHD does hereunder as a result of any causes or conditions that are
not warrant that the Services will be uninterrupted or beyond such party's reasonable control and that such
error free and that ACHD may occasionally experience party is unable to overcome through the exercise of
delays or outages due to disruptions that are not within commercially reasonable diligence. If any force majeure
ACHD’s control. Any such interruption shall not be event occurs, the affected party shall give prompt written
considered a breach of these Terms and Conditions by notice to the other party and shall use all commercially
ACHD. ACHD shall use its best efforts to remedy any such reasonable efforts to minimize the impact of the event.
interruption in service as quickly as possible.
26. TERM AND TERMINATION.
23. USAGE. These Terms and Conditions shall be month to month and
a. Use Restricted to Lawful Purpose. Merchant agrees either party may immediately terminate the Agreement
to use the Services solely for lawful purposes. Merchant without prior notice. Upon the effective date of
agrees that it will not transmit any material through termination of the Agreement, Merchant's rights

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hereunder to use the Services shall cease, but Merchant's other supporting documentation, constitute the entire
obligations in connection with any transaction processed understanding of the parties, and revoke and supersede
by ACHD on behalf of Merchant (whether before or after all prior agreements between the parties and are
such termination) shall survive termination. Promptly intended as a final expression of their agreement. The
upon termination of these Terms and Conditions for any Agreement may be executed in two or more
reason, Merchant shall return or destroy, as requested by counterparts, each of which shall be deemed an original
ACHD, all materials pertaining to the Services, including and all of which together shall constitute one instrument.
all copies thereof. 32. MERCHANT AUTHORIZATION.
27. AMENDMENT OR MODIFICATION OF TERMS. The Agreement becomes effective when signed by an
Unless otherwise provided for in these Terms and authorized representative(s) of Merchant and ACHD.
Conditions, ACHD reserves the right to amend the terms Further, Merchant agrees to notify ACHD of any
of its agreement with Merchant upon at least ten (10) important changes in the information provided in the
days written notice to Merchant. Merchant's continued application or any attachments thereto. Merchant
use of the Services after receipt of such notice shall acknowledges notification that all payments by check will
indicate Merchant's acceptance of the new terms. These be converted to an ACH payment and electronically
Terms and Conditions are subject to such modifications, deposited to ACHD’s bank account. If any payment is
changes, and additions as may be required, or deemed to returned unpaid Merchant authorizes ACHD to
be required by ACHD, by reason of any applicable Rule or electronically debit the item and an additional $25.00
Regulation. processing fee from Merchant’s account provided in the
28. ASSIGNMENT. application or supporting documentation. Upon signing
The rights granted under these Terms and Conditions are and submitting the Merchant Application, Merchant’s
and shall be personal to Merchant and shall not be authorized representative certifies the following: 1)
assigned by any act of Merchant or by operation of law, Merchant has received a copy of these Terms &
without the prior consent of ACHD, which shall not be Conditions and agrees to be bound by all terms and
unreasonably withheld. Any attempt on the part of conditions contained herein and as may be modified or
Merchant to sub-license or assign to third parties its amended in compliance with those terms; 2) Merchant
rights or obligations hereunder without such consent shall understands that IF MERCHANT SUBMITS A
constitute a material breach of its agreement with ACHD TRANSACTION TO ACHD HEREUNDER, MERCHANT WILL
and grounds for termination of the Agreement. ACHD BE DEEMED TO HAVE ACCEPTED THE MERCHANT
may assign its rights and obligations under these Terms SERVICES TERMS & CONDITIONS; 3) All information
and Conditions without the approval of Merchant, but provided in the submitted application and supporting
shall provide notice of such assignment to Merchant. documents is true and accurate; 4) Merchant authorizes
29. NOTICE. ACHD to debit and/or credit the account(s) listed in the
Any notice required to be given by either party application, or other accounts maintained by Merchant,
hereunder, excluding notice of changes in fees, shall be for any amounts owed in accordance with these Terms
in writing and delivered personally to the other and Conditions; 5) Merchant authorizes ACHD to order a
designated party, or sent by any commercially credit report on Merchant and/or any affiliate that is
reasonable means of receipted delivery, addressed, to listed on the application or in any supporting document;
that party at the address most recently provided in 6) Merchant will use the Verification and/or
writing. Either party may change the address to which Authentication Services provided by ACHD for a purpose
notice is to be sent by written notice to the other under that is permissible under section 604(a) of the Fair Credit
any provision of this paragraph. Reporting Act and that Merchant will follow proper
30. LEGAL FEES. procedures for adverse action notification to its
In the event of any dispute arising out of or related to customers, as provided in Appendix B to these Terms and
these Terms and Conditions, the prevailing party shall be Conditions.
entitled to recover its reasonable attorney's fees, court 33. ELECTRONIC SIGNATURES.
costs and collection expenses in addition to any other Under the Electronic Signatures in Global and National
recovery. Commerce Act (E-Sign), this Merchant Services
31. GENERAL PROVISIONS. Agreement and all electronically executed documents
The agreement between the parties hereto shall be related hereto are legally binding in the same manner as
binding on the parties only upon execution of the are hard copy documents executed by hand signature
Agreement by an authorized representative of both when (1) your electronic signature is associated with the
parties. The Agreement shall be governed by and Merchant Services Agreement and related documents,
construed in accordance with the internal laws of the (2) you consent and intend to be bound by the Merchant
state of Texas, and the parties consent to the jurisdiction Services Agreement and related documents, and (3) the
and venue of the federal and state courts sitting in Collin Merchant Services Agreement is delivered in an electronic
County, Texas. No waiver by either party of any default record capable of retention by the recipient at the time of
shall be deemed as a waiver of prior or subsequent receipt (i.e., print or otherwise store the electronic
default of the same or other provisions of these Terms record). This Merchant Services Agreement and all
and Conditions. Should any term, clause or provision related electronic documents shall be governed by the
hereof be found invalid or unenforceable by a court of provisions of E-Sign.
competent jurisdiction, such invalidity shall not affect the
validity or operation of any other term, clause or
provision and such invalid term, clause or provision shall
be construed to most closely reflect the original intent of
the parties. These Terms and Conditions, along with any

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APPENDIX A
DEFINITIONS

Account Maintenance - A fee assessed to a Merchant Originator – A Merchant who has contracted with ACHD
for changing the settlement bank account from the to initiate ACH entries, on their behalf, to the ACH
existing bank account to a different bank account. This Network.
fee covers the costs associated with verifying the new
account. RDFI - Receiving Depository Financial Institution is the
financial institution that receives the ACH Transactions
ACH Network - Automated Clearing House Network is a from the ODFI through the ACH Network and posts these
batch processing, store-and-forward system that Transactions to the accounts of Receivers (defined
accumulates and distributes ACH transactions that are below).
received from ODFI (defined below) and are forwarded to
the specified RDFI (defined below) according to the Recall - Similar to a Reversal (see below) but used for
specific schedules established by the participants. recovery of a transaction beyond the four banking day
timeframe.
ACH Transactions – All Entries, including but not limited
to Debit and Credit Entries (defined below) that are Receivers – An organization or individual consumer that
transmitted through the ACH Network. has authorized Merchant to initiate an ACH Transaction to
an account they maintain with a financial institution
Affiliate – a business entity effectively controlling or (RDFI).
controlled by another or associated with others under
common ownership or control. Regulations - All federal, state and local regulations that
govern Internet business, consumer information, credit
ACH Chargeback – Any ACH item which is returned card transactions and Transactions (as defined below),
designated with the following return codes: R05, R07, including but not limited to the FCRA, federal Regulation
R10, R29 and R51. E and Title 31 of the Code of Federal Regulations Part
210, Gramm-Leach-Bliley Act, and Driver’s Privacy
Business Banking Day - Monday through Friday Protection Act.
excluding banking holidays.
Returned Entries - Any Transaction returned or rejected
Credit Entry – An ACH Transaction that is intended to by ACHD, ODFI or RDFI.
deposit funds into a Receiver’s (defined below) account
which has been withdrawn from Merchant’s Settlement Reversal - A request made to the RDFI within four days
Account (defined below). of effective entry date for return of a duplicate or
erroneous entry that has already been introduced into
Debit Entry – An ACH Transaction that is intended to the ACH system.
withdraw funds from a Receiver’s account for deposit into
Merchant’s Settlement Account (defined below). Settlement Account – An account established and
maintained by Merchant with a financial institution
Excessive Returns - Any merchant with more than the through which the deposit of funds for Debit Entries and
defined percentage of returns in a single billing cycle the extractions of funds for Credit Entries are made.
(calendar month), will be assessed an additional fee per
returned item. Settlement Entry – a Debit or Credit Entry to
Merchant’s Settlement Account which corresponds to the
NACHA - National Automated Clearing House Association net amount owed Merchant by ACHD at the end of each
responsible for establishing, revising and enforcing the Business Banking Day.
Operating Rules for the ACH Network.
Transactions – Any transfer of data or information from
Operating Rules (the “Rules”) - the operational rules Merchant to ACHD in a format pre-approved by ACHD,
established by NACHA which govern all transactions and including but not limited to ACH Transactions, Debit
parties utilizing the ACH Network. Entries, Credit Entries, Verification Entries and
Authentication Entries.
ODFI - Originating Depository Financial Institution is the
financial institution that receives ACH Transactions from WSUPP - Written Statement Under Penalty of Perjury - A
Merchant through ACHD and then forwards these written statement obtained by the RDFI from the
Transactions (defined below) to the ACH Network. consumer prior to initiating a return for an entry that the
consumer claims is unauthorized, ineligible or improper
or for which the authorization has been revoked.

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APPENDIX B
FAIR CREDIT REPORTING ACT REQUIREMENTS

1. The following is a list of permissible uses for the data received through ACH Direct’s Verification and
Authentication Services (the “Services”) in accordance with section 604(a) of the Fair Credit Reporting Act
(“FCRA”):
1) In response to a court order or Federal grand jury;
2) In accordance with the written instructions of the consumer to whom the information relates;
3) In connection with a credit transaction involving the consumer on whom the information is to be furnished and
involving the extension of credit to, or review or collection of an account of, the consumer;
4) For employment purposes;
5) In connection with the underwriting of insurance involving the consumer;
6) To determine the consumer's eligibility for a license or other benefit granted by a governmental instrumentality
required by law to consider an applicant's financial responsibility or status;
7) As a potential investor or servicer, or current insurer, in connection with a valuation of, or an assessment of the
credit or prepayment risks associated with, an existing credit obligation;
8) Otherwise having a legitimate business need for the information, including:
a) in connection with a business transaction that is initiated by the consumer;
b) to review an account to determine whether the consumer continues to meet the terms of the account.
9) For use by state and local officials in connection with the determination of child support payments, modifications
or enforcement thereof.

2. Representations by Merchant. Each request for data through the Services shall constitute a representation, warranty and
certification by Merchant that the data (a) shall be used and disclosed only in accordance with the provisions of the Terms
and Conditions and this Appendix B, and in accordance with any applicable
Rules or laws; and (b) shall be used solely for the intended use as provided in the application. ACHD reserves the right to
immediately terminate Merchant’s access to the Services should ACHD have reason to believe that Merchant is using the
Services for a purpose other than a permissible use as provided for in Section 5 and 6 of the Terms and Conditions and this
Appendix B. Merchant acknowledges it has implemented security measures to prohibit the unauthorized access to the
information provided.

3. In compliance with FCRA requirements, Merchant is hereby instructed to provide to any and all customers whose
payments are declined by Merchant based upon information received from ACHD, a means through which the customer may
investigate and challenge non-acceptance of the payment. Merchant shall provide a notice of such procedure to its declined
customers in writing, in a form substantially similar to the following:

“We regret to inform you that we were unable to accept your payment based on
financial account information received from the below named company:

ACH Direct, Inc.
500 W. Bethany Drive, Suite 200
Allen, Texas 75013
866-290-5400, Option 1 or ask for Customer Service – Verification Services

You have the right to be told the nature of the financial account information that was
provided by this company upon making a written request to the company at the
contact information provided above within sixty (60) days of receipt of this notification. “

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