RECITALS WHEREAS, Loyal Patron (LP) IS ENGAGED IN THE BUSINESS OF PROVIDING Marketing Services, Mobile Coupon and Marketing, Gift Card, Loyalty Card, PREPAID REWARD AND/OR PROMOTION SYSTEMS AND CARD TRANSACTION SERVICES FOR PARTICIPATING MERCHANTS UNDER THE PROGRAM HEREIN DESCRIBED; WHEREAS THE MERCHANT (MERCHANT) DESIRES TO HAVE LP PERFORM CARD PROCESSING SERVICES FOR GIFT/LOYALTY SERVICES AND PROMOTIONS SERVICES; NOW THEREFORE, IN CONSIDERATION OF THE FOREGOING RECITALS, AND OF THE MUTUAL PROMISES HEREINAFTER SET FORTH, LP AND THE MERCHANT HEREBY AGREE AS FOLLOWS.
- Services to be provided by LP - Subject to the terms and conditions set forth in this Agreement, LP hereby agrees to perform the following services for the benefit of the Merchant LP shall provide for the electronic processing of Card transactions (Gift/Loyalty) and purchases made by customers of the Merchant who holds approved cards (“Approved Cards”). LP shall electronically confirm that the card presented by the cardholder (“Cardholder”) is an active account on the LP electronic gift/loyalty processing system (“Card System”) in which there is sufficient funds that can be reserved or removed to pay for Cardholder’s purchase. Merchant must use individual care and discretion to verify the identity of Cardholder; LP shall process electronic point of sale transactions for the Merchant, consisting of Card System services, LP shall provide for the electronic debiting of the Cardholder’s account when said Cardholder has made a purchase and electronic crediting of the Cardholders account when value is added to the Cardholders account; LP shall maintain an accessible electronic record of transactions as described above for a period of 60 days. The services to be rendered by LP in accordance with this section shall be referred to herein as the (“Services”); and LP will supply to and accept from the Merchant all information and data reasonably required from time to time in connection with the Services.
- Merchant Duties- Subject to all terms and conditions set forth in this Agreement, the Merchant agrees; The Merchant will accept for processing by LP any transaction initiated by a customer utilizing Approved Cards without discrimination with regard to the customer who initiated the transaction or the point-of-sale terminal at which a transaction was initiated (“The LIFT System”); The Merchant will supply to LP all information and data reasonably required from time to time by LP to perform the Services, including the location of POS terminals and Cardholder data and content as may be agreed upon the parties from time to time and within such time or times as may be reasonably necessary to perform the Services promptly and in a proficient manner; The Merchant will maintain all transaction records and other records required by law or regulation to maintain in connection with the operation of the electronic point of sale processors (Card Terminals”); The Merchant will obtain, operate, and maintain at its own expense the Card Terminal; The Merchant will be responsible for the accuracy and adequacy of all data transmitted by it or on it’s behalf for processing by or storage of information on LP’ Card System; The Merchant will maintain sufficient “back-up” information and data to reconstruct any information or data loss due to any system malfunction; The Merchant will comply with all Federal and State laws and regulations relating to financial transactions, if applicable; The Merchant will make both personal and LP records available to LP to perform the Services promptly and in a proficient manner; Notwithstanding anything contained in this Agreement to the contrary; the Merchant’s relationship with LP shall be exclusive, and Merchant shall be obligated to have LP perform Card processing services on its behalf.
- Use of Name and Logo – Merchant authorizes the use of Merchant’s name, logo, trademark, service marks or copyrights of Merchant or its affiliates in any advertising, promotional or instructional materials provided by or for LP.
- Fee Collection - In consideration for the performance of the Services provided by LP, the Merchant agrees to pay to LP the fees and other charges set forth in Sections C,D & E of the Marketing Suite Service made a part hereof. The fees and charges will be collected by LP through a direct debit of the Merchants bank account via the Automated Clearing House (ACH) on a monthly basis. The Merchant also authorizes LP to ACH the Merchant’s bank account for any card re-order(s).
- Rejects - The Merchant will maintain an account at an ACH receiving depository institution (“Account”) approved by LP. Merchant must maintain sufficient funds in the Account to satisfy all obligations, including the fees set forth in this Agreement. Should an ACH reject occur, the Merchant agrees to pay LP a $25.00 per payment item rejected.
- Additional Account – In the event the Account is closed or otherwise unavailable to LP, Merchant and/or Guarantors consent to LP locating additional deposit Accounts or assets by using any means available. In this event the Merchant and/or Guarantors waive all rights to their privacy in favor of LP until such time as all outstanding liabilities and fees owed to LP have been paid in full.
- Responsibility for Taxes and Expenses - The Merchant understands and agrees to be responsible for the payment of all Federal, State, and local taxes (and any amounts legally levied instead of taxes), exclusive of taxes based upon LP’ net income, arising out of or incidental to its participation in this Agreement as well as all other expenses, fees, and charges.
- No Surcharge – The Merchant acknowledges and agrees increased fees, surcharges, or any other premium payments will not be charged to any of Merchant’s customers for Card Transactions, the use of the POS Terminals or the operation of the system unless such surcharges are permitted by the applicable law or regulation.
- Security Interests – All personal bank Accounts standing in Merchant’s and/or Guarantor’s name shall be subject to this Application/Agreement and ACH debit, and all ACH debits, whether made against Merchant’s Account or a Guarantor’s Account shall bear a commercial account code designation (CCD) for the purposes of electronic collection via the ACH system and Merchant and/or Guarantor irrevocably consent to LP using any means available to locate such deposit Accounts until such time as all amounts due have been paid. LP may enforce this security interest as applicable by: making an immediate debit/charge via the ACH system (code CCD) to any deposit Account standing in the name or names of the Merchant and/or Guarantor(s), without notice or demand of any kind; and/or interrupting the electronic transmission of funds to any Account through the ACH system; Freezing the entire Account, without notice or demand of any kind, upon LP’ determination that Merchant had breached any term of this Agreement; By placing a receiver within Merchant’s operations until such time as indebtedness owed to LP arising under this Agreement has been satisfied in full; Obtaining a writ of attachment or a writ of possession without bond pertaining to Merchant and/or its Guarantor’s personal property upon a showing of a presumption that Merchant has committed an act of fraud or is about to misappropriate funds to which it is not entitled. Merchant shall provide any statement or notice that LP determines to be necessary to preserve and protect this security interest. Merchants and/or Guarantor’s granting of this security interest in no way limits Merchant’s liabilities to LP under this Agreement.
- Qualification - only to those merchants that have selected Guardian in the Marketing Suite Service Agreement; who are an active customer of LP; and are not in default under the Marketing Suite Service Agreement. Please note that LP reserves the right to change the terms and conditions of the Guardian Program upon 20 days written notice. The Guardian benefits, for those merchants who have elected coverage and are in good standing under the terms and conditions of the Marketing Suite Service Agreement are as follows:
- Replacement Terminals - Terminals: If your terminal is defective, we will, limited to one terminal per twelve calendar months, replace it with a new or refurbished one at no charge other than shipping and handling. Guardian does not cover terminals that are damaged, abused or in any way mishandled. It applies only to a terminal that is defective as a result of manufacturing error. If your terminal is defective, simply call our customer service desk to order your replacement terminal. They will issue you a return authorization number “RMA” and we will then ship you your replacement terminal along with a return address label and your RMA number and will only charge your merchant account for shipping and handling. Upon receipt of your replacement terminal, you must, within seven calendar days of receiving the replacement terminal, ship us back your defective terminal with the RMA number clearly marked on the box. If we do not receive your defective terminal within 14 calendar days of your receipt of a replacement terminal, or, if the terminal you sent to us is not defective, but is damaged, abused or mishandled, then you hereby acknowledge and agree that you have irrevocably purchased the replacement terminal for $895.00 which is then immediately due and payable to LP. You hereby irrevocably authorize LP, as one method of securing your payment, to debit your merchant bank account as payment in full for the replacement terminal and or the shipping and handling fees.
- Terminal Paper - As a subscriber to Guardian, upon request we will ship to you, twice per year, a full case of terminal paper at no charge to you other than shipping and handling. You hereby irrevocably authorize LP, as one method of securing your payment, to debit your merchant bank account as payment in full for the shipping and handling.
- Cancelling Guardian - may cancel Guardian upon 30 days written notice. Your written notice must be received by LP via certified or overnight mail to be effective.
- Initial Term - the Agreement will commence on the date Marketing Suite Service(s) ARE PURCHASED and shall have an initial term of 30 days. The Agreement shall automatically renew for an additional term of 30 days unless either party has notified the other in writing, at least thirty (30) days prior to the expiration of the initial term or any such renewal term, that it does not wish to renew this Agreement.
- Underwriting – In accordance with underwriting standards and practice, LP reserves the right and Merchant consents that LP may conduct inquiries as to the creditworthiness of Merchant.
- Reserve – LP may impose a cap on the dollar amount of outstanding liabilities. This limit may be changed from time to time with or without notice. Should Merchant exceed the limit established by LP, LP may suspend processing, establish a Reserve Account, or take other actions as deemed necessary by LP to guarantee the repayment of Outstanding Liabilities. This decision may be based in whole or in part on creditworthiness as determined from credit reports received from credit reporting agencies as well as any other information that will assist us in our decision.
- Termination by LP – The Merchant understands and agrees that this Agreement and Merchants participation in the Card System may be terminated for “good cause” by LP. For purposes of this section “good cause” shall mean: A material breach of this Agreement by the Merchant; Failure to pay any fees, charges, or other amounts owed by the Merchant to LP in accordance with this Agreement; A determination by LP that all Merchant transactions have ceased and therefore the relationship between Merchant and LP has ceased. The violation of any law or regulation applicable to the Merchant that has as adverse effect upon the operation of Card System. A determination by LP that Merchants continued participation in the Card System may be considered financially detrimental to either Merchant or LP. This decision may be based in whole or in part on creditworthiness as determined from credit reports received from credit reporting agencies as well as any other information that will assist us in our decision.
- Termination by Merchant - LP understands that the Agreement may be terminated by the Merchant with a 30 day written notice.
- Responsibilities upon Termination – Upon any termination by the Merchant prior to the initial term specified in Section 4.1, the Merchant shall be liable for and shall pay an early termination fee equal to the total monthly pricing specified in Veracity SMARTCARD agreement multiplied by the number of remaining months left in the initial term.
System Down Time
- The Merchant hereby agrees that in the event that the LP system is down and not able to verify transactions, LP will not continue to process transactions. The Merchant accepts sole responsibility in the event that any transactions are authorized by the customer without LP’ knowledge. Such will be the sole responsibility of the Merchant, and the Merchant will indemnify and hold harmless LP from and against any and all damages, loss, liability, consequential damage, expense, claim or obligation arising in connection herewith.
- This agreement is subject to amendment to conform with regulations of the Card System as it pertains to the processing of Gift/Loyalty transactions. From time to time, upon twenty (20) days written notice, LP may amend any portion of this Agreement, including, without limitation, those relating to fees and charges payable by Merchant.
Indemnification and Limitation of Liability
- Non-Disclosure of Customer Information- the Merchant and LP understand that neither party shall sell or disclose any data or information relating to a merchants card program, and all efforts shall be made to secure acquired data in the interests of the merchant, customer, and LP.
- Indemnification by Merchant The Merchant hereby agrees to indemnify and hold LP harmless, and their affiliates and subsidiaries, agents and employees from any claim relating to a dispute between Merchant and Cardholder, as may be made by anyone by way of defense, dispute, off-set, counterclaim or affirmative action, or for any damages of, or losses LP, and their affiliates and subsidiaries, agents and employees my incur as a result of Merchant’s breach of this Agreement. Further, Merchant shall reimburse LP, for all expenses including attorney’s fees with regard thereto.
- Limitation of Liability Notwithstanding anything in this Agreement to the contrary, in no event shall LP, and their affiliates or directors, officers, employees, agents or subcontractors, be liable under any theory of tort, contract, strict liability or other legal theory for lost profits, lost revenues, lost business opportunities, exemplary punitive, special, incidental, indirect or consequential damages, each of which is hereby excluded by Agreement of the parties, regardless of whether such damages were foreseeable or whether any party or any entity has been advised of the possibility of such damages. Notwithstanding anything in this Agreement to the contrary, LP cumulative liability for all losses, claim suits, controversies, breaches or damages for any cause whatsoever (including, but not limited to, those arising out of or related to this Agreement) and regardless of this form of action or legal theory shall not exceed the average of three months revenue derived from transaction fees, less all costs incurred by LP, which were received by LP from this Merchant or such lesser time if this Agreement has been in effect for less than three months.
Compliance with Applicable Law and Regulations
- This Agreement is subject to, and the parties agree to comply with all laws of duty authorized governments and authorities relating to the use of communication lines leased from domestic, international and foreign carriers to transmit information. It is understood and agreed by the parties that the performance of the Services hereunder may be subject to examination by authorized representatives of Federal and State governmental agencies and LP is authorized to furnish any such agency reports, information and other data as may be required under applicable laws, rules and any other activities Merchant my deem appropriate in response.
- Additional rules, policies, procedures, restrictions and laws will apply to those Gift/Loyalty cards activated through the use of, or purchased by, a bankcard. Each of these provisions have been outlined in a separate bankcard Agreement with your bankcard service provider (“Acquirer”), but should be considered as relevant and applicable in relation to Gift/Loyalty transactions processed through the Card System
- Both the Merchant and LP understand and agree that both parties shall be responsible for their own compliance with all Federal, State, and local laws , rules and regulations that are applicable with respect to this Agreement, including without limitation to, statutes, regulations and judicial decisions relating to the establishment and sharing of the POS Terminals, consumer protection, antitrust and franchise laws and shall hold the other party harmless against any and all liability or expense related thereto.
- It is understood and agreed by the parties hereto that the performance of the Services is or might be subject to regulation examination by authorized representatives of Federal and State regulatory agencies, and that LP is authorized to submit or furnish any agency such reports, information, assurances or other data as may be required by them under applicable laws and regulations, provided LP provides Merchant with reasonable advance notice of such action and an opportunity to object or take any other actions Merchant may deem appropriate in response. The Merchant and LP will notify each other upon receipt of such requests so that each party may have an opportunity to object or take other actions, whichever that party deems appropriate in response.
- The individual executing this Agreement on behalf of Merchant in Section G , regardless of capacity or title as a primary inducement to LP to enter into this Agreement with Merchant, jointly and severally, unconditionally and irrevocably, guarantee the continuing full and faithful performance and payment by Merchant of each of its duties and obligations to LP pursuant to this Agreement, as it now exists or is amended from time to time. Guarantor(s) understands further that LP may proceed directly against Guarantor(s) without first exhausting its remedies against any other person or entity responsible therefore to it or any security held by LP or Merchant. This guarantee will not be discharged or affected by the death of the undersigned, will bind all heirs, administrators, representatives and assigns and may be enforced by or for the benefit of any successor of LP. Guarantor(s) understand that the inducement to LP to enter into this Agreement is consideration for this guaranty, and that this guaranty remains in full force and effect even if the Guarantor(s) receives no additional benefit from the guaranty.
- This Agreement, including all matters incorporated by references herein, constitutes the entire Agreement between parties and supersedes all previous negotiations, commitments and writings.
- Failure by LP to enforce one or more of the provisions of this Agreement shall not constitute a waiver of the right to enforce the same provision in the future. All waivers must be signed by the waiving party.
- This Agreement shall not be assigned by merchant without prior written consent of LP and any assignment without such consent shall be void.
- The titles and headings preceding the text of the paragraphs of this Agreement have been inserted solely as a convenience of reference and shall neither constitute a part of this Agreement nor affect its meaning, interpretation or effect.
- If any provision of this Agreement is held invalid or unenforceable by any court of financial jurisdiction, it is the intent of the parties that all other provisions of this Agreement be construed to remain fully valid, and enforceable on the parties.
Choice of Law: Jurisdiction
- The parties stipulate that the exclusive venue for any action between them shall be in Los Angeles County, State of California. This Agreement shall be construed in accordance with and governed by California law as applied to contracts that are executed and performed entirely in California.
- LP may not be held liable for failure to perform due to any contingency beyond its reasonable control such as acts of God, acts of Government, war or other hostility, civil disorder, weather, fire, power failure, labor dispute, like causes and any other similar to different contingency.