MERCHANT BANK CARD AGREEMENT
FIRST CHARTER BANK N.A.
THIS AGREEMENT ("Agreement") is made by and between First Charter Bank, N.A.
("Bank") and the undersigned merchant ("Merchant").
DEFINITIONS: For purposes of this Agreement, the following definitions shall
apply: (a) "Merchant Services": the services provided to Merchant by Bank under
this Agreement; (b) "Application": the document titled Merchant Bank Card
Application, executed and delivered to Bank by Merchant, upon which Merchant's
acceptability for Merchant Services was evaluated; (c) "Card": an unexpired Visa
or MasterCard credit card; (d) "Cardholder": the individual whose name is
embossed on a Card; (e) "Sales Draft": Merchant's record of Cardholder purchase;
(f) "Credit Voucher": Merchant's record of return or refund to be credited to
Cardholder's account; (g) "Card Issuing Bank": the bank or other financial
institution that issued the card to the cardholder; (h) "Authorization": coded
approval number provided by Card Issuing Bank confirming that transaction amount
is within Cardholder's spending limit and Card has not been report lost or
stolen, and thereby authorizing Merchant to honor Card; (i) "Terminal": an
electronic device utilized to obtain Authorizations and facilitate the capture,
reconciliation and transmission of Card data; (j) "Merchant Account(s)": the
deposit account(s) of Merchant designated for use by Bank in conjunction with
Merchant Services including any Reserve Account as defined below; (k) "Visa" and
"MC": Visa U.S.A. and MasterCard International; (l) "ACH": the Federal Reserve
Bank's Automated Clearing House network.
WHEREAS: Bank is a member of Visa and MC provides Merchant Services to
businesses accepting Cards.
WHEREAS: Merchant is engaged in the business of providing merchandise, services
or both and desires that Bank provide Merchant Services to Merchant on the terms
and conditions set forth herein.
NOW, THEREFORE: in consideration of the above and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
1. HONORING CARDS: Merchant shall honor without discrimination any valid Card
when properly presented as payment by a Cardholder in connection with the
provisions of goods or services or both by Merchant to Cardholder. Merchant
will not establish minimum or maximum sale amounts as a condition for honoring
cards or impose any surcharge on Card transactions. Discounts for payments in
cash are permitted.
2. PERMITTED TRANSACTIONS: "Permitted Transactions" shall be deemed to mean
those Card transactions by Merchant only for the type of business activity
described on the Application and only where all products and services transacted
with a Cardholder and processed under this Agreement shall have been provided in
full by Merchant at the time of the transaction (except upon prior written
approval of Bank). Merchant is prohibited from submitting to Bank any Sales
Drafts or Credit Vouchers for any transaction that are not Permitted
Transactions, including but not limited to, cash advances in any amount to a
Cardholder, a Card transaction for which a principal of Merchant is also the
Cardholder, or any transaction which Merchant knew or should have known to be
fraudulent or not authorized by the Cardholder.
3. AUTHORIZATION: Prior to honoring any Card, Merchant agrees to obtain a
single Authorization for the total amount of the transaction. Terminal shall be
used as the primary method for obtaining Authorizations. Voice Authorization
services are for use only (a) upon receiving such instruction in response to an
Authorization request, or (b) during Terminal down-time periods. Unauthorized
use of voice Authorization services may result in additional charges for such
use being assessed to Merchant. Card information shall be entered into Terminal
by physically sliding the Card's magnetically encoded strip through the
Terminal's Card reader. Merchant may utilize the Terminal's keypad to input
Card information only in the following instances: (a) the magnetic strip on Card
is damaged and therefore unreadable by Terminal; or (b) the Terminal's card
reader is inoperative, in which case Merchant shall immediately advise Bank.
Merchant shall make an imprint of Card and record all authorization and
applicable reference numbers on Sales Draft to facilitate the timely and
accurate retrieval of documentation as requested by Bank.
NOTE: An authorization is NOT A GUARANTEE AGAINST IMMUNITY FROM CHARGEBACKS (see
Paragraph 11.) OR ASSURANCE OF PAYMENT. Authorization merely signifies that at
the time the Authorization is obtained, the Card has not been reported as stolen
to the Card Issuing Bank and that there is sufficient account credit to
accommodate the transaction, absent chargeback privileges. The Merchant and, if
applicable, any guarantor(s) remain financially responsible for all resulting
chargebacks on transaction processed.
4. CARDHOLDER IDENTIFICATION: Merchant shall compare Cardholder's signature on
the Sales Draft to the signature that appears on Card's signature panel. In the
event the two signatures do not bear a reasonable resemblance, Merchant will not
honor the Card.
MERCHANT BANK CARD AGREEMENT
5. DRAFT CAPTURE AND TRANSMISSION: If Merchant utilizes Merchant Services
whereby, at the time of Authorization, Card and transaction data are stored in
Terminal's memory thereby requiring Merchant to initiate a subsequent deposit
transmission, Merchant shall (a) initiate such deposit transmissions to Bank's
designated processing center on a daily basis; and (b) prior to such deposit
transmissions, Merchant shall reconcile Card and transaction data, thereby
correcting erroneous data prior to transmission. Merchants utilizing Merchant
Services whereby Card and transaction data is stored at the host computer at the
time of Authorization shall reconcile Card and transaction data and transmit any
corrections no later than one day following the original transaction date.
6. DOCUMENTING A CARD TRANSACTION: To document each Card transaction, a Sales
Draft or Credit Voucher on a form approved by Bank shall be completed by
Merchant, and a copy delivered to Cardholder. Each such form shall be legibly
imprinted with (a) Merchant's name and number, (b) the information embossed on
the Card, (c) the date of the transaction, (d) a brief description of the goods
or services comprising the transaction, (e) the total amount of the sale or
credit (including any applicable taxes), and (f) the signature of the
Cardholder. For each transaction where the Terminal's keypad is used to enter
the Card number, Merchant must make a legible imprint of the information
embossed on the Card. In the event the required information does not legibly
imprint on the form, Merchant must legibly print at least the following
information on the form; (1) Cardholder's name; (2) Card number; (3) expiration
dates; and (4) the name (or trade style) of the Card Issuing Bank. For each
non-imprint transaction, whether or not an Authorization is obtained, Merchant
shall be deemed to warrant to Bank the Cardholder's identity as an authorized
user of the Card. Merchant hereby acknowledges that Merchant's failure to
properly document Card transactions may result in penalties being assessed to
Bank by Visa and/or MC. Merchant hereby accepts responsibility for and
authorizes Bank to debit Merchant Account for penalties assessed to Bank due to
merchant's failure to properly document Card transactions.
7. MULTIPLE SALES DRAFTS: Merchant must include on a single Sales Draft the
entire amount of each transaction unless: (a) Cardholder is paying a portion of
the total amount in cash or by check; or (b) Merchant has written authorization
from Bank to accept a deposit for products or services to be provided at a later
date. In such instance, Merchant shall note on the Sales Drafts the words
"deposit" or "balance" as appropriate, and shall not transmit the "balance"
Sales Draft to Bank until all the goods are delivered and/or all the services
are performed.
8. RETURNED MERCHANDISE: Merchant will establish a fair policy for the return
of merchandise, and will initiate credit for all such returns by issuance of
Credit Vouchers to Cardholders. On the same day a Credit Voucher is issued,
Merchant will process such credit for inclusion in Merchant's daily transmission
of Card transactions. At Bank's option and in its sole discretion, Bank may
reject Credit Vouchers and require Merchant to advise Cardholders to obtain
credits through a chargeback request. Merchant may restrict its refund or
return policy if Merchant discloses such restriction at the time of sale by
printing a notice, such as "no refunds or exchanges" in letters at least one
fourth of an inch in height, on all copies of the Sales Draft prior to obtaining
Cardholder's signature on the Sales Draft. No cash refunds may be given on any
item originally charged to a Card, except with the prior written consent of
Bank.
9. STORAGE AND RETRIEVAL OF TRANSACTION RECORDS: Merchant must retain original
transaction documents (Sales Drafts, Credit Vouchers, etc.) for a minimum of
three years from the transaction dates. Such documents shall be stored in a
manner permitting retrieval and submission of legible copies to Bank on the same
day that Merchant receives a request for such documentation from Bank. Since a
Card Issuing Bank may, over a period of time, request duplicate copies of the
same Sales Draft, Merchant must retain at least one legible copy of each Card
transaction. Merchant acknowledges that such duplicate requests are beyond
Bank's control. Merchant will insure that Bank possesses a current listing of
retrieval contacts at each Merchant location where Sales Drafts are being
stored.
10. ON-GOING RESPONSIBILITY: In instances where Merchant acquires a business
currently processing with Bank, Merchant agrees to assume responsibility for
previous owner's liabilities, fees, billing, chargebacks and other obligations
to Bank under the previous owner's agreement with Bank.
11. CHARGEBACKS: Merchant will accept the liability for all claims against
Merchant resulting from; (a) failure of Merchant to provide Bank with a legible
copy of Sales Draft or Card imprint, and/or failure of Merchant to meet
retrieval deadlines set under the rules and regulations of Visa and MC; (b) the
exercise of chargeback rights by a Cardholder, Card Issuing Bank or other
intermediary pursuant to applicable law, rule,
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MERCHANT BANK CARD AGREEMENT
regulation, Visa or MC regulations, or agreements, or (c) Card transaction(s)
not made in compliance with all terms and conditions of this Agreement, as well
as all applicable laws, rule or regulations. Merchant irrevocable authorizes
Bank, without prior notice, to directly debit Merchant Account for any
chargebacks. Merchant will reimburse Bank immediately for any shortfall that
occurs as a result of such chargebacks. If Merchant has the right to dispute a
chargeback, Merchant shall submit all documentation regarding such dispute to
Bank within fifteen days of receipt of the chargeback from Bank. Merchant
agrees that failure to dispute a chargeback within such period shall constitute
a waiver of all rights of Merchant to dispute the chargeback. Merchant is
prohibited from re-depositing Sales Drafts that have been previously charged
back. This prohibition applies whether or not Merchant has obtained
Cardholder's consent to re-deposit such Sales Drafts.
12. USE OF VISA AND MC PROGRAM MARKS: Merchant shall adequately display the
appropriate Visa or MC program marks on promotional materials to inform the
public which Cards will be honored at the Merchant's place of business.
Merchant's use of such program marks shall fully comply with specifications
contained in applicable Visa or MC operating regulations, and shall not indicate
directly or indirectly that Visa, MC or any other organization endorses
Merchant's products or services. Upon termination of this Agreement, Merchant
shall promptly return to Bank any equipment or materials provided by Bank
pursuant to this Agreement.
13. NO FACTORING/LAUNDERING OF SALES DRAFTS: Merchant shall not transmit to Bank
any Sales Draft or Credit Voucher which does not arise from a Permitted
Transaction and which is not the result of a legitimate business transaction
directly and solely between Cardholder and Merchant. In particular, Merchant is
aware of and shall comply with federal law regarding the prohibition on
laundering of Sales Drafts. Merchant hereby accepts full financial
responsibility for any transactions involving a third party and further agrees
to allow the entire amount of such third party transactions to remain on deposit
at Bank in a non-interest bearing account for a reasonable time but not less
than one hundred eighty (180) days from the transaction posting dates. If not
already on deposit in Merchant Account, Merchant will deposit this amount to an
account designated by Bank immediately upon demand by Bank.
14. CARD RECOVERY: Merchant shall use its best efforts, by reasonable and
peaceful means, to recover any Card when: (a) Merchant is advised to recover
Card in response to an Authorization request or (b) Merchant has reasonable
grounds to believe that the Card is counterfeit, fraudulent or stolen. Merchant
shall take no actions to recover a Card that results in a breach of the peace.
15. ACCESS TO MERCHANT ACCOUNT: For use in conjunction with Merchant Services.
Merchant shall maintain the Merchant Account initially identified in paragraph
42 and as subsequently required by Bank pursuant to this Agreement. Merchant
authorizes Bank to initiate credits and debits to, and freeze or setoff funds in
any Merchant account in order to facilitate the settlement of Sales Drafts,
Credit Vouchers, chargebacks, adjustments, fees, charges, etc. pursuant to the
terms of this Agreement. This authorization shall remain in effect following
the termination of this Agreement by either party for a reasonable time but not
less than one hundred and eighty (180) business days from the date of last
activity relating to Merchant, including but not limited to any Chargebacks.
16. SETTLEMENT: Bank shall pay to Merchant the total face amount of all Sales
Drafts transmitted by Merchant less the sum of Merchant's: (a) applicable
Discount Fees, (b) chargebacks, (c) Credit Vouchers, and, (d) any adjustments
allowed by this Agreement. Merchant acknowledges that all credits to Merchant
Account are provisional and subject to chargeback.
17. AVAILABILITY OF FUNDS: Merchant must transmit Card transactions by 11:59
P.M. CST to allow Bank to process those transactions and post those funds to
Merchant Account at Bank on the second banking day following (but not including)
the day of Merchant's transmission to Bank. Should Merchant be authorized by
Bank to maintain Merchant Account at a bank other than Bank, funds will be
posted to such Merchant Account on the third banking day following (but not
including) the day of Merchant's transmission to Bank. Withdrawals may not be
negotiated against funds until credit is posted to Merchant Account.
18. AMENDMENTS: Bank may amend this Agreement at any time if it deems itself at
risk. Otherwise, Bank will give Merchant written notice thirty (30) days prior
to the effective date of any amendment. Amendments become effective unless
Merchant terminates this Agreement before such effective date.
19. LAWS. RULES AND REGULATIONS: Merchant agrees to comply with all existing
and future regulations issued by Visa or MC regarding Card transactions, all of
which regulations are expressly incorporated herein
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MERCHANT BANK CARD AGREEMENT
by reference and made a part of this Agreement. Merchant further agrees to
comply with all applicable state or federal laws, rules or regulations relating
to Merchant's business, the use of Cards, and Merchant's transactions with
Cardholders and Bank. Merchant assumes full and sole responsibility for
obtaining, reviewing, implementing, and complying with all such laws, rules,
regulations, and VISA and MC regulations.
20. WARRANTY OF APPLICATION; NOTICE OF MATERIAL CHANGES: In connection with this
Agreement, Merchant has executed and delivered an Application to Bank
containing, among other things, information describing the nature of Merchant's
business and the individuals who are the principal owners of Merchant. Merchant
warrants to Bank that all information and statements contained in such
Application are true, correct and complete. Merchant further agrees to notify
Bank promptly in writing of any and all changes which may occur from time to
time regarding any information contained in such Application, including but not
limited to, the identity of principal owners, type of goods and services
provided, and how sales are completed (i.e. by telephone, mail order or in
person at the Merchant's place of business). Merchant shall also notify Bank in
writing immediately of (a) any material adverse changes in the financial or
business condition of Merchant or Merchant's principals and (b) any pending or
threatened claims, litigation, investigation, governmental proceeding, or
assessments against Merchant or Merchant's principals. In addition to any other
rights or remedies, Bank may immediately and without notice cease all processing
for Merchant, freeze all Merchant Accounts, and/or terminate this Agreement,
based upon the information reported by Merchant or discovered by Bank. Bank may
impose a monthly administration fee on such frozen accounts.
21. TERMINATED MERCHANT FILE: Merchant acknowledges that Bank is required to
report the business name of the Merchant and the names and identification of its
principals to the Visa and MC Combined Terminated Merchant File when a Merchant
is terminated due to, but not limited to, reasons such as fraud, counterfeit
paper, unauthorized transactions, excessive chargebacks or highly suspect
activity. Merchant expressly agrees and consents to all such reporting by Bank.
22. TERMINATION OF AGREEMENT; REMEDIES: This Agreement may be terminated by
either party without cause upon thirty (30) days' prior written notice to the
other, such termination to become effective on the date specified by such
notice. In addition, upon any breach by Merchant in any representation,
warranty, covenant, promise or term of this Agreement, Bank may immediately and
without notice do any or all of the following: (a) suspend all processing for
Merchant, (b) freeze all funds in all deposit accounts of Merchant, (c)
foreclose on Bank's security interest as defined below, (d) terminate this
Agreement, and (e) initiate litigation to enforce Bank's rights under this
Agreement and under applicable law. All obligations of Merchant and any
guarantors under this Agreement shall survive any termination of this Agreement.
Merchant specifically agrees to maintain on deposit at Bank for a reasonable
time but not less than 180 business days following the date of last activity
relating to Merchant, including but not limited to any chargebacks, an amount
sufficient, in Bank's sole and absolute discretion, to cover all chargebacks,
Fees and Charges, attorney's fees, or other costs that may be charged against or
incurred by Bank as a result of Card transactions by Merchant. In addition,
Merchant irrevocably authorizes Bank to freeze all funds in all Merchant
Accounts and other deposit accounts of Merchant at Bank and to retain any other
collateral Bank may have for a reasonable time but not less than 180 business
days following the date of last activity relating to Merchant, including but not
limited to any chargebacks. No usage of Merchant Services by Merchant for a
sixty day period may be considered, by Bank, as Merchant's voluntary termination
of this Agreement. Merchant is then subject to requalification for continuation
of Merchant Services.
23. PARAGRAPH HEADINGS: All paragraph headings contained herein are for
descriptive purposes only.
24. CONFIDENTIALITY: Merchant will not disclose Cardholder information to third
parties, other than Bank's or Merchant's agents for the purposes of assisting
Merchant in completing a Card transaction, or as specifically required by law.
Merchant, in an area limited to select personnel, and prior to discarding, shall
destroy in a manner rendering data unreadable all material containing Card
numbers.
25. NOTICES: Any notice required or permitted hereunder shall be in writing and
shall be deemed given three (3) business days after deposit in the United States
mail, and one (1) business day after deposit for overnight delivery with an
appropriate delivery service such as Federal Express or similar courier, postage
prepaid, addressed to the respective parties at the addresses set forth below,
or at such other address as the receiving party may have provided by notice to
the other.
26. ASSIGNABILITY: Merchant may not, voluntarily or involuntarily, assign any
rights or delegate any duties arising under this Agreement without the prior
written consent of Bank. Merchant also acknowledges that
4
MERCHANT BANK CARD AGREEMENT
Bank may sell, assign or otherwise transfer this Agreement to any financial
institution that Bank, at its sole discretion, deems appropriate. Merchant
agrees that a primary purpose of this Agreement is to provide Merchant with
funds as a result of Card transactions based on Sales Drafts submitted to Bank
by Merchant. The funds provided by Bank to Merchant are provisional only and
subject to chargeback rights of Cardholders, among other things. Bank is not
purchasing Sales Drafts or giving final credit or settlement to Merchant upon
the processing of Sales Drafts. Merchant therefore agrees that this Agreement
is primarily an agreement to provide financial accommodations to Merchant
within the meaning of Section 365 of the U.S. Bankruptcy Code and that this
Agreement may not be assumed by any party in a bankruptcy proceeding affecting
Merchant whether by Merchant as a debtor in possession or by any bankruptcy
trustee.
27. ATTORNEY'S FEES: Merchant shall be liable for and shall indemnify and
reimburse Bank for any and all attorney's fees and other costs and expenses paid
or incurred by Bank in the enforcement hereof, or in collecting any amounts due
from Merchant to Bank or resulting from any breach by Merchant of any of the
terms or conditions of this Agreement.
28. NO WAIVER OF RIGHTS: No delay or omission on the part of Bank in exercising
any of its rights or remedies shall operate as a waiver, estoppel or other
preclusion against the exercise of such rights or remedies at any time. A
waiver of any right or remedies by Bank on any one occasion shall not serve as a
waiver for any subsequent or prior occasions. All waivers must be in writing.
29. RIGHT TO INFORMATION/AUDIT: From time to time, Bank may (a) obtain credit
information on Merchant from other (such as lenders and credit reporting
agencies): (b) furnish information on Bank's experience with Merchant to others
seeking such information, (c) require Merchant, Merchant's principals, and any
guarantors to submit financial statements, tax returns, and related information
to Bank in form and content satisfactory to Bank, and (d) examine and verify, at
any reasonable time, all the records of Merchant pertaining to Sales Drafts and
Credit Vouchers transmitted to and processed by Bank. Merchant shall make the
originals of all such records available to Bank upon request and shall provide
Bank with complete, legible, and accurate copies of all such records upon
request. Merchant shall be responsible for all costs and fees of Bank incurred
in connection with such audit.
30. JURISDICTION; CHOICE OF LAW; VENUE: This Agreement will be governed by and
interpreted in accordance with the laws of the State of California and, to the
extent applicable, the laws of the United States of America. The parties agree
that all performances due and transactions undertaken pursuant to this Agreement
shall be deemed to be due or have occurred in Beverly Hills, California, and
that the entry into and performance hereof by Merchant shall be conclusively
deemed to be the transaction of business within the State of California. Any
litigation or arbitration between the parties shall occur exclusively in the
County of Los Angeles, California. Merchant and any guarantors hereby consent
to the full personal jurisdiction of any state or federal court in California
and agree that, in addition to any other lawful method, service of process may
be effected by depositing pleadings in the U.S. mail, certified mail, postage
prepaid, and addressed to Merchant or guarantors at their respective addresses
as set forth in the Application or any other address of which Bank has been
notified in writing.
31. ENTIRE AGREEMENT: This Agreement, together with Merchant's Application,
constitutes a fully integrated agreement and the entire Agreement between the
parties with respect to its subject matter. All prior or contemporaneous
agreements, understandings or representations are merged herein.
32. RECURRING TRANSACTIONS: For any recurring transactions, Merchant must obtain
a written request from Cardholder for such goods and services to be charged to
the Cardholder's account, which written request must specify the transaction
amounts to be charged to the Cardholder's account, the frequency of the
recurring charge and the duration of time during which such charges may be made.
Merchant shall not complete any recurring transaction after receiving a
cancellation notice from the Cardholder, the Bank, or a response to an
Authorization request which indicates that the Card is not to be honored.
Merchant shall type or legibly print the words "Recurring Transaction" on the
signature line of the Sales Draft.
33. NON-MAGNETIC TRANSACTIONS: Any transaction where the Card number is not
obtained by passing the Card's magnetic strip through the Card reader of a
Terminal is hereby considered a non-magnetic transaction. Merchant shall not
solicit or accept non-magnetic transactions without prior written permission
from Bank, and then only for such products/services, solicited in such manner
and in such amounts as allowed in Bank's written authorization. When so
authorized, non-magnetic transactions must be directly between the Cardholder
and Merchant. Unless specifically authorized in Bank's written authorization,
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MERCHANT BANK CARD AGREEMENT
Merchant shall not utilize the services of any third party in soliciting or
accepting orders. Telephone orders are permitted only upon prior written
authorization of Bank and only to the extent that the contact is initiated by
the Cardholder. Merchant expressly agrees that in all cases, the complete
shipment of goods and/or provision of services to Cardholder will be no later
than the next business days following the date on which the Sales Draft was
transmitted to Bank to process for deposit to Merchant Account.
34. RESERVE ACCOUNT: As a condition of continued processing and in Bank's sole
and absolute discretion, Bank may require Merchant to fund and maintain a
separate deposit account ("Reserve Account") with Bank which Merchant agrees
shall not be used for its operating funds. Contributions to the Reserve Account
shall be made as set forth in the reserve acknowledgment, but in no event shall
the balance of the Reserve Account fall below the Minimum Reserve Balance as
defined in the Reserve Addendum attached hereto and incorporated herein. Upon
demand by Bank, Merchant shall immediately deposit sufficient funds to the
Reserve Account to maintain the Minimum Reserve Balance and shall continue to
contribute funds to the Reserve Account as a percentage of processed Sales
Drafts as defined in the Reserve Addendum. Merchant's obligation to maintain
the Reserve Account with Bank shall survive the termination of this Agreement
for a reasonable time but not less than one hundred eighty (180) business days
following the date of last activity relating to Merchant, including but not
limited to any chargebacks.
35. SECURITY INTEREST: Merchant hereby grants Bank a security interest in all
present and future (a) Merchant Accounts (whether at Bank or another financial
institution), (b) deposit accounts of Merchant at Bank, whether or not expressly
designated as Merchant Accounts, and (c) additions, deposits, income, interest,
dividends, and proceeds relating to all such Merchant Accounts and deposit
accounts. This security interest is given to secure all present and future
obligations of Merchant to Bank. Bank may enforce such security interest
without notice or demand. Merchant hereby irrevocably appoints Bank as its
attorney in fact to sign, file, record, give, send, or receive any security
agreements, financing statements, notices, or other documents in the name of
Merchant or Bank to create, perfect, collect, enforce, or maintain the security
interest granted herein. A copy of this Agreement may be used as a financing
statement.
36. FEES AND CHARGES: In consideration of Merchant Services provided by Bank,
Merchant agrees to pay the Fees and Charges detailed in Addendum A attached
hereto and incorporated herein and as amended from time to time by Bank. The
Base Discount Fee percentage is applied to the total amount of Sales Drafts
processed and is collected daily prior to deposit of funds to Merchant Account.
All other fees and charges are collected monthly. Incremental Discount Fees are
charged as applicable for businesses and/or transactions not qualified for the
lowest Visa/MC clearing rates. The Transaction Fee is charged for each
transmission initiated from Merchant's Terminal to Bank. The Installation Fee
is a one-time fee for programming of Merchant's equipment. The ACH fee is
charged monthly, or for any part thereof, for utilization of the Federal
Reserve's Automated Clearing House network to access Merchant Account. The
Statement Fee is charged monthly. Merchant acknowledges that the sum of Base
Discount Fees, Incremental Discount Fees, Transaction Fees and ACH fees for each
Merchant location is subject to a Minimum Monthly Billing, initially identified
in Addendum A attached hereto and incorporated herein, during each billing
cycle. In the event that a Merchant location does not reach the required
Minimum Monthly Billing amount, such location shall be assessed a Minimum
Processing Fee equal to the difference between the actual billing for that
location and the Minimum Monthly Billing amount. Other fees such as supplies
orders, shipping charges, Terminal lease or rental payments, etc. will be
assessed to Merchant as incurred. From time to time as set forth in this
Agreement relating to amendments, Bank may add, delete, or change Fees and
Charges or the terms relating thereto. Unless otherwise agreed, in writing,
Fees and Charges are collected by Bank via electronic debit from Merchant
Account. Merchant is fully responsible for payment of all Fees and Charges
whether or not sufficient funds are available in the Merchant Account to pay
such Fees and Charges. Merchant is responsible for detecting and notifying Bank
of errors in the assessment of fees and charges within sixty days of such
erroneous assessment.
37. CONTINUING GUARANTY: The undersigned hereby unconditionally guarantees the
payment and performance of all of the obligations of "Merchant" to "Bank",
whether now existing or hereafter arising under the Merchant Agreement and any
modifications, extensions, renewals, replacements, or other agreements relating
thereto. The undersigned hereby waives notice of and gives advance consent to
(i) the acceptance of this Continuing Guaranty, (ii) the release, discharge, or
incapacity of Merchant or any obligor, co-maker, guarantor, or surety, (iii) the
modification, extension, renewal, increase, or decrease in any of the
obligations
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MERCHANT BANK CARD AGREEMENT
arising under the Fee Agreement or other guaranty, (iv) acceptance,
release, substitution, sale, or abandonment of any collateral securing the
obligations of Merchant or any obligor, co-maker, guarantor, or surety, (v) any
adverse change in the financial or other condition of Merchant or any obligor,
co-maker, guarantor, or surety, (vi) the extension, maintenance, or increase of
any credit granted by Bank to Merchant. The undersigned waives any right to
require Bank to first proceed against Merchant, any other person, or any
collateral before proceeding against the undersigned. The undersigned shall
bear the sole responsibility for remaining informed about the financial and
other condition of Merchant and about the balance and status of Merchant's
account with Bank. This Continuing Guaranty shall be binding on and shall inure
to the benefit of the successors, assigns, and personal representatives of the
undersigned and Bank. If any action is taken to enforce this Continuing
Guaranty, the prevailing party shall be entitled to recover all of its costs in
connection therewith, including actual attorney's fees. This Continuing
Guaranty may only be revoked in a writing delivered to Bank. Revocation shall
be effective three (3) business days after receipt by Bank of written notice of
revocation. Revocation shall not affect the liability of the undersigned for
all obligations of Merchant as they shall exist on the effective date of
revocation and any renewals, extensions, replacements, or modifications relating
thereto. If any of the obligations guaranteed hereby are or become secured by
real property, the undersigned waives any defenses or remedies arising from the
antideficiency or one form of action doctrines under California law. In
addition to and not in derogation of any of the waivers by the undersigned
contained herein, the undersigned agrees to the following waiver as set forth in
section 2856(b) of the California Civil Code: "Guarantor waives all right and
defenses arising out of an election of remedies by Creditor, even though that
election of remedies, such as a nonjudicial foreclosure with respect to security
for a guaranteed obligation, has destroyed Guarantor's rights of subrogation and
reimbursement against Borrower by Creditor by the operation of Section 580d of
the Code of Civil Procedure or otherwise." Any litigation or arbitration
relating to this Continuing Guaranty shall occur exclusively in the County of
Los Angeles, California. The undersigned consents to the full personal
jurisdiction of any state or federal court in California. California law shall
apply to all aspects of this Continuing Guaranty without regard to any rules on
conflicts of law."
38. ENTIRE UNDERSTANDING: This Agreement contains the entire understanding of
the parties hereto relating to the subject matter contained herein and
supersedes all prior and collateral agreements, understandings, engagements and
negotiations of the parties. Each party acknowledges that no representations,
inducements, promises, or agreements, oral or written, with reference to the
subject matter hereof have been made other than as expressly set forth herein.
This Agreement cannot be changed, rescinded or terminated orally.
39. REMEDIES CUMULATIVE: The rights and remedies of Bank arising hereunder shall
be cumulative to all other rights and remedies arising under any other agreement
or by operation of law. Bank may exercise any or all of its rights and remedies
concurrently or in any order determined in its sole discretion.
40. INDEMNITY: Merchant shall indemnify, hold harmless, and defend Bank from and
against any and all claims, demands, actions, causes of action, suits,
controversies, losses, attorney's fees, costs, expenses, obligations,
liabilities, damages, settlement, judgments, and executions whatsoever, which
may arise, result from, relate to, or be connected with this Agreement, Card
transactions, or any other aspect of Merchant's relationship with Bank. At
Bank's sole option, Bank may choose its own legal counsel in connection
herewith.
41. SEVERABILITY: If any provision of this Agreement, as applied to any party or
to any circumstance, shall be found by a court to be void, invalid or
unenforceable, the same shall in no way affect any other provision of this
Agreement, the application of any such provision in any other circumstance, or
the validity or enforceability of this Agreement.
7
MEMBER BANK:
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SALES REPRESENTATIVE # SALE OFFICE # DATE APPLICATION SENT
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FIRST CHARTER BANK N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇-▇▇▇-▇▇▇-▇▇▇▇
MERCHANT BANK CARD APPLICATION
BUSINESS INFORMATION
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LEGAL BUSINESS OR CORPORATE NAME: "DOING BUSINESS AS" NAME:
FlashNet Communications, Inc. FlashNet Communications, Inc.
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STOREFRONT ADDRESS: CITY: STATE: ZIP:
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇. ▇▇. ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
-----------------------------------------------------------------------------------------------------------------------------------
BILLING ADDRESS: CITY: STATE: ZIP
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇. ▇▇. ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
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TYPE OF BUSINESS (BE SPECIFIC): BUSINESS MAIL ORDER % PHONE ORDER % OTHER NON-MAG %
Internet Access HOURS 10% 90%
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NO. OF LOCATIONS AGE OF BUSINESS DATE BUSINESS ACQUIRED FEDERAL TAX I.D. NUMBER: BUSINESS TELEPHONE NO.:
1 3 YEARS Nov. 95 75-2614852-7 (▇▇▇) ▇▇▇-▇▇▇▇
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CONTACT PERSON: TITLE PHONE NUMBER: FAX NUMBER:
▇▇▇▇ ▇▇▇▇▇ CFO (▇▇▇) ▇▇▇-▇▇▇▇ Ext. ▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
-----------------------------------------------------------------------------------------------------------------------------------
MONTHLY BANK CARD VOLUME: AVERAGE TICKET TYPE OF OWNERSHIP (CIRCLE ONE) LLC LLP
$ 1,400,000.00 $ 135.00 SOLE PROPRIETOR PARTNERSHIP CORPORATION
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EXISTING BANK NAME: ACCOUNT NUMBER:
Summit National Bank ▇▇▇-▇▇▇-▇ and ▇▇▇-▇▇▇-▇
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STREET ADDRESS: CITY: STATE: ZIP:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
-----------------------------------------------------------------------------------------------------------------------------------
CONTACT: PHONE NUMBER: FAX NUMBER:
▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇ ( )
-----------------------------------------------------------------------------------------------------------------------------------
OWNER AND/OR OFFICER INFORMATION
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PRESIDENT'S OR OWNER'S NAME: TITLE: % EQUITY OWNERSHIP: SOCIAL SECURITY NO.: DOB/AGE:
1. ▇▇▇▇▇ ▇▇▇▇▇▇ President 15.75%
-----------------------------------------------------------------------------------------------------------------------------------
RESIDENCE ADDRESS: CITY: STATE: ZIP: HOW LONG? / / OWN
/ / RENT
-----------------------------------------------------------------------------------------------------------------------------------
HOME PHONE: PREVIOUS ADDRESS (IF AT CURRENT ADDRESS LESS THAN 3 YEARS)
( )
-----------------------------------------------------------------------------------------------------------------------------------
SECOND OFFICER OR CO-OWNER: TITLE: % EQUITY OWNERSHIP: SOCIAL SECURITY NO.: DOB/AGE:
2. ▇▇▇▇ ▇. ▇▇▇▇▇ CFO 0%
-----------------------------------------------------------------------------------------------------------------------------------
RESIDENCE ADDRESS: CITY: STATE: ZIP: HOW LONG? / / OWN
/ / RENT
-----------------------------------------------------------------------------------------------------------------------------------
HOME PHONE: PREVIOUS ADDRESS (IF AT CURRENT ADDRESS LESS THAN 3 YEARS)
( )
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AUTHORIZING RESOLUTION
(MUST BE COMPLETED BY ALL CORPORATIONS, PARTNERSHIPS, LLCS AND LLPS)
-----------------------------------------------------------------------------------------------------------------------------------
It was resolved that any one of the Officer(s) identified in #1 and #2 above, have the authority to execute the Merchant
Processing Agreement, open and close deposit accounts, and execute any security or other agreements, documents or instruments
related thereto, if required with First Charter Bank N.A., on behalf of the Corporation, Partnership, LLC or LLP.
Date adopted by the Board of directors:
--------------------------
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President: Print name:
----------------------------------------------- -----------------------------------------------
Secretary: Print name:
----------------------------------------------- -----------------------------------------------
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MERCHANT SITE SURVEY
-----------------------------------------------------------------------------------------------------------------------------------
Type of Building / / Shopping Center / / Office Building / / Residence / / Retail Storefront /X/ Other Separate Buildings
(Photos Required)
Area Zoned: /X/ Commercial / / Industrial / / Residential Square Footage / / 0-250 / / 250-500 / / 500-2,000 /X/ 2,000+
IS THE TYPE AND AMOUNT OF INVENTORY AT THE SITE CONSISTENT WITH THE TYPE OF BUSINESS AND PROJECTED SALES VOLUME? /X/ YES / / NO
If no, explain.
Most Recent 3 Month's Processing Statements Attached: /X/ YES / / NO Accepted Bankcards Before: /X/ YES / / NO
Overall comments by Inspector:____________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________
Please submit at least 2 site photos. Photos must include storefront name and address and inventory.
I hereby certify that I personally visited the above Storefront Address, and that the information contained in this Merchant Site
Survey is correct.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇ 6-25-98
-------------------------- --------------------------- -----------------------
Representative's Signature Representative (Print Name) Date
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-----------------------------------------------------------------------------------------------------------------------------------
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FIRST CHARTER BANK N.A.
MERCHANT BANK CARD AGREEMENT
(CONTINUED)
MERCHANT ACCOUNT: / / OPEN SINGLE MERCHANT DDA /X/ VOIDED CHECK ATTACHED FOR ACH DEPOSIT
-----------------------------------------------------------------------------------------------------------------------------------
MAIL OR TELEPHONE ORDER SALES (COMPLETE IF ANY PORTION OF YOUR SALES ARE GENERATED THROUGH MAIL/TELEPHONE ORDER.)
-----------------------------------------------------------------------------------------------------------------------------------
PERCENT OF ANNUAL MC/VISA SALES GENERATED THROUGH MAIL ORDER 10 % TELEPHONE ORDER 90 % POS % TOTAL = 100%
------ ------ ----
NUMBER OF DAYS TO PREPARE SHIPMENT FOR DELIVERY TO CUSTOMER FROM DATE OF ORDER 1
-------
PERCENT OF CUSTOMER ORDERS DELIVERED IN 0-7 DAYS 100% 8-14 DAYS 15-30 DAYS % MORE THAN 30 DAYS % = 100%
-------- ----- ----- -----
MC/VISA SALES ARE DEPOSITED (CHECK ONE) / / AT DATE OF ORDER /X/ AT DATE OF DELIVERY / / OTHER
NAME OF FULFILLMENT HOUSE (IF ANY) N/A DELIVERY TIME FRAME N/A
----------------------- --------------------------------------
STREET ▇▇▇▇▇▇▇ ▇/▇ ▇▇▇▇ ▇/▇ ▇▇▇▇▇ ▇/▇ ▇▇▇ ▇/▇
----------------------------------- ----------------------- --------- ---------------------
NAMES OF SHIPPING SERVICE USED N/A DELIVERY TIME FRAME N/A
------------------------------------------- --------------------------------
STREET ▇▇▇▇▇▇▇ ▇/▇ ▇▇▇▇ ▇/▇ ▇▇▇▇▇ ▇/▇ ▇▇▇ ▇/▇
----------------------------------- ----------------------- --------- ---------------------
HOW DO YOU ADVERTISE FOR YOUR MAIL/TELEPHONE ORDER SALES? (CHECK AS APPROPRIATE) / / CATALOG /X/ DIRECT MAIL-LETTER/BROCHURE
/X/ TELEVISION/RADIO
/ / TELEPHONE/TELEMARKETING / / NEWSPAPER/MAGAZINE (SPECIFY NAMES) ▇▇▇▇ Boards
-------------------------------------------------------
NOTE: CURRENT COPIES OF THE ABOVE MATERIALS MUST BE ATTACHED.
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REFUND POLICY
-----------------------------------------------------------------------------------------------------------------------------------
DO YOU HAVE A REFUND POLICY FOR YOUR MASTERCARD/VISA SALES? /X/ YES / / NO
CHECK THE APPLICABLE REFUND POLICY / / CASH / / EXCHANGE / / STORE CREDIT /X/ MASTERCARD/VISA CREDIT
IF MC/VISA CREDIT, WITHIN HOW MANY DAYS DO YOU DEPOSIT CREDIT TRANSACTIONS? 0-3 DAYS X 4-7 DAYS 8-14 DAYS OVER 14 DAYS
--- --- --- ---
-----------------------------------------------------------------------------------------------------------------------------------
IF THE MERCHANT HAS PREVIOUSLY ACCEPTED CREDIT CARDS, THE LAST 3 MONTHS MERCHANT STATEMENTS MUST BE PROVIDED
-----------------------------------------------------------------------------------------------------------------------------------
CURRENT CREDIT CARD PROCESSING BANK, IF APPLICABLE
BANK OR PROCESSOR NAME Summit National Bank PHONE # (▇▇▇) ▇▇▇-▇▇▇▇
------------------------------------------------------- ------------------------------------
CITY/STATE/ZIP Ft. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------------------------------------------------------------------------------
REASON FOR CHANGING BANK OR PROCESSOR Lower Rates
---------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
BUSINESS CREDIT REFERENCES
-----------------------------------------------------------------------------------------------------------------------------------
(1) NAME MFS DataNet, Inc. PHONE (▇▇▇) ▇▇▇-▇▇▇▇
------------------------------------------------------------------- --------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
ADDRESS ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, #▇▇▇▇ ▇▇▇▇/▇▇▇▇▇/▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------- -----------------------------
CONTACT ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ACCOUNT # N/A
------------------------------------------------------------------- ----------------------------------
(2) NAME ▇.▇. ▇▇▇▇ Telephone PHONE (▇▇▇) ▇▇▇-▇▇▇▇
------------------------------------------------------------------- --------------------------------------
ADDRESS ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇/▇▇▇▇▇/▇▇▇ ▇▇. ▇▇▇▇▇, ▇▇
------------------------------------------------------------------- -----------------------------
CONTACT Tolli Lane ACCOUNT # N/A
------------------------------------------------------------------- ----------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
MERCHANT NAME: FlashNet Communications, Inc.
-----------------------------
FIRST CHARTER BANK N.A.
ATTN: ASSISTANT VICE PRESIDENT - BANK CARD DIVISION ADDRESS: ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
-----------------------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ CITY, ST. ZIP: Ft. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-----------------------------
CUSTOMER SERVICE: ▇-▇▇▇-▇▇▇-▇▇▇▇
BANKCARD DIVISION: ▇-▇▇▇-▇▇▇-▇▇▇▇ "The undersigned merchant certifies, subject
to criminal penalties for false
certification, that all the information set
forth in this Application is true and
correct. The undersigned authorizes Bank
and or its Agents to investigate the
references, obtain credit bureau
information, and to obtain statements from
persons or companies names in this Merchant
Application and Agreement."
BY: SIGNATURE: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------------------------------- ----------------------------------
TITLE: NAME (PRINT): ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------------------------- -------------------------------
DATE: TITLE: CFO DATE: 6/29/98
------------------------------------------------------------------ ------------- ---------------
******** NOTICE ******* DO NOT SIGN THIS AGREEMENT WITHOUT READING IT IN TOTAL ******* NOTICE *******
ANY ALTERATION, STRIKEOVER, MODIFICATION OR ADDENDA TO THE PREPRINTED TEXT OR LINE ENTRIES OF THIS MERCHANT BANK CARD AGREEMENT
SHALL BE OF NO EFFECT WHATSOEVER, AND AT BANK'S SOLE DISCRETION, MAY RENDER THIS AGREEMENT INVALID.
GUARANTOR: (DO NOT SIGN WITHOUT READING PARAGRAPH 37)
GUARANTOR SIGNATURE: DATE:
-------------------------------------------------- ---------------------------------------
GUARANTOR SIGNATURE: DATE:
-------------------------------------------------- ---------------------------------------