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Merchant Services AgreementTerms and ConditionsThis Merchant Services Agreement (this “Agreement”) is entered intobetween BMO Harris Bank N.A. (“Member Bank”), Vantiv Payments,Inc., as Member Bank’s processor/member service provider for Visa and MasterCard , as acquirer for Discover and as participant salesentity for American Express under the American Express OptBlue Program (the “OptBlue Program”) (“Processor”), and the undersignedMerchant (“Merchant”) in consideration of mutual promises. Processorand Member Bank are collectively referred to as “Bank” and may jointlyor individually assert or exercise any rights or remedies provided to Bankhereunder. Processor and Member Bank reserve the right to allocateBank’s duties and obligations amongst themselves, as they deemappropriate in their sole discretion, subject to Section 22 of thisAgreement. Bank and Merchant are independent parties contracting forservices and neither is an agent, partner or joint venture of the other.IntroductionMerchant is engaged in the business of providing goods and/or servicesto customers at location(s) owned or leased and operated by Merchant.Merchant desires to accept those credit and/or debit cards (“Cards”)indicated on the Schedule of Rates and Fees bearing the name and logoof the Visa , MasterCard , American Express or Discover credit cardassociations or the issuer of any other Card of any association or network(collectively, the “Card Associations”) that Bank authorizes Merchant toaccept for processing under this Agreement as a means of payment forthose goods and/or services sold by Merchant. Bank is engaged in thebusiness of providing, for a fee, electronic debit and credit cardauthorization, processing, data capture, clearing and settlement services.For purposes of this Agreement, the term “transaction” is meant toinclude any Card, debit, ACH, EFT or other electronic transaction asapplicable in the context of this Agreement. Merchant agrees to honor allvalid Cards it elects to accept pursuant to this Agreement, withoutdiscrimination, and to submit at the close of each business day all salesand credits for Card transactions, and all necessary information for allother types of transactions, as applicable (“Items”) exclusively to Bank,Processor or their applicable vendor(s), which applicable party or partiesshall acquire or process with full recourse to Merchant, according to theterms of this Agreement. For purposes of this Agreement (includingwithout limitation, the Schedule of Rates and Fees), “Debit Card” means(i) a Discover, Visa or MasterCard card that accesses a consumer’s assetaccount within 14 days after purchase, including, but not limited to, storedvalue, prepaid, payroll, EBT, gift, and Visa consumer check cards, and (ii)all cards issued by a non U.S. bank.1. Operating ManualMerchant will receive and agrees to read and review an OperatingManual and any other Attachments received from Bank. TheseAttachments and the Operating Manual (as amended, modified orsupplemented from time to time) form a part of this Agreement and areincorporated herein by reference as set forth in full. Bank and Merchantagree to the terms and conditions in the then–current Operating Manual.For example, the Operating Manual contains a description of Itemssubject to chargeback, certain promises and responsibilities of Merchantand other terms and conditions related to the processing of Cardtransactions, such as terms and conditions related to Merchantexamining all Cards, obtaining authorization (for example, by “swiping”each Card) and authorization numbers for all Card transactions, andhandling special situations (such as cardholder identification, saleswithout Cards, recovery of Cards upon request, returns and credits, andrecurring transactions). Submission of Card transactions to Bank forprocessing constitutes Merchant’s agreement to the terms and conditionsof this Agreement and the Operating Manual and Attachments.Transactions for any non-face to face transaction (e.g., Internet, mail,telephone and preauthorized orders) are subject to special requirements,including those specified in the Operating Manual. Merchant may not impose minimum or maximum amounts for Card transactions or imposesurcharges for any Card transaction that are not imposed generally to itscustomers for non-Card transactions.2. Processing, Settlement and Other ServicesUnless agreed by Bank in writing, Card transactions will be processedand settled through Card Association networks via electronicauthorization and data capture methods. Additional Merchant locationsrequire Bank approval, must be owned or leased and operated byMerchant under Merchant’s same name and must conduct the samebusiness. Unless otherwise agreed in advance by Bank, Merchant willbalance and settle each terminal every business day. Transactions at oneMerchant location may not be processed through a terminal at anotherMerchant location. Merchant agrees not to process transactions of otherentities, persons or merchants. Merchant must be equipped with properlyinstalled and programmed terminals or other equipment capable of transmitting, receiving and communicating Card transaction data to Bank. IfMerchant provides any software or equipment or utilizes third partysystem vendors, Merchant is solely responsible for all aspects ofcompatibility, installation, operation, security and systems integrationsthat will comply with the Operating Regulations and Bank’s processingrequirements. If required, Merchant has directly entered into a separateagreement with any Card Association(s) which allows Merchant to acceptand process Card transactions. For all Card transactions (including DebitCards, travel vouchers or lodging reservation service), the terms andconditions of all rules and regulations of the Card Associations (the“Operating Regulations”) and the Operating Manual apply. Merchantagrees to all of the terms and conditions contained in the then currentOperating Regulations and the then current Operating Manual, including,without limitation, prohibited transactions as described in the Card Acceptance section of the Operating Manual. Merchant obtains no rights inamounts settled between Bank and Card Associations unless and untilBank transfers amounts to Merchant.3. Advertising and PromotionUnless waived by a Card Association or Bank, Merchant agrees toadequately display the most current Card emblems, decals and othermaterials to inform the public that Card(s) that Merchant elects to acceptpursuant to this Agreement will be honoured as required by the OperatingRegulations. Merchant shall only indicate that Cards are accepted andshall not indicate that any Card Association endorses Merchant’smerchandise or services. While this Agreement is in effect, Merchantshall make no other use of the emblems or marks of any CardAssociation or Bank without Bank’s prior written consent. Any use ofthese emblems or marks shall be in compliance with the requirements ofthe Operating Regulations and the specifications of the CardAssociations and/or Bank. Merchant shall immediately discontinue use ofall such marks, emblems or names upon (a) direction of Bank or anyCard Association or (b) termination of this Agreement. If Merchant hasrequested signage for the purpose of indicating their acceptance of DebitCards, Merchant must display such signage for a minimum of threemonths.4. Accounts(a) Settlement Account. Merchant agrees to designate and maintain anaccount (the “Settlement Account”) that accepts automated clearinghouse (“ACH”) transfers (which does not have to be a separate account,but may be a general or commingled account) with a balance of availablefunds sufficient to accommodate Merchant’s obligations under thisAgreement, either with Member Bank, or at an institution acceptable toBank. If there are not sufficient available funds in the Settlement Accountto cover Merchant’s obligations hereunder, Bank may make deductionsfrom payments due Merchant from Card transactions without notice.Merchant agrees to promptly pay Bank on demand for all amounts owedunder this Agreement.Page 1 of 7VPI - Terms and Conditions (4.2017) vantiv
(b) Reserve Account. At any time and for any reason (including, withoutlimitation, notice of termination or actual termination of this Agreement,unauthorized transactions, cessation of business, insolvency, excessiveChargebacks, suspected or actual fraud, or competing claims regardingfunds generated via Merchant’s processing activities), Bank may requireMerchant to establish a reserve account, increase the funding amount ofan existing reserve account, or provide other security to pay Chargebackamounts and other amounts due or anticipated to become due hereunderto Bank (the “Reserve Account”). Bank shall notify Merchant either orallyor in writing of the establishment or increased funding of the ReserveAccount, except in the event of (a) notice of termination or actualtermination of this Agreement, (b) unauthorized transactions, (c)cessation of business, (d) suspected or actual breach or default, orcessation of processing under this Agreement. If notice is required, Bankmay notify Merchant either before or after the establishment or increasedfunding of the Reserve Account, but not later than three (3) businessdays after the establishment or increased funding of the ReserveAccount. Merchant agrees to deposit and maintain in such non-interestbearing accounts, at Bank’s sole discretion, either (a) with Member Bank(which Member Bank may commingle with other funds) or (b) at afinancial institution designated by Bank, such additional funds or othersecurity as Bank may require. Bank shall specify in its notice, in Bank’ssole discretion, the amounts to be funded and the timing forestablishment or increased funding of such Reserve Account; provided,Bank may require that such Reserve Account be funded (whether initiallyor due to increased funding requirements) immediately (including, withoutlimitation, in instances of unauthorized transactions, suspected or actualfraud or termination for cause). Bank may without notice also fund theReserve Account (whether initially or due to increased fundingrequirements) with deductions from payments due Merchant from Cardtransactions or by a charge against the Settlement Account or any otheravailable account of Merchant, including, without limitation, amounts inaccounts at affiliated institutions. Bank will hold or be entitled to hold thefunds in the Reserve Account until such time as Bank is satisfied thatMerchant has no further obligations to Bank under this Agreement.Merchant’s failure to fund the Reserve Account (whether initially or due toincreased funding requirements) may result in immediate termination ofthis Agreement at Bank’s sole discretion.5. Provisions Applicable to All Accountsstatements will be deemed to have been accepted as accurate byMerchant. Any account is subject to review, verification, acceptance andaudit by Bank. Bank may return Items to Merchant for correction.(b) Merchant hereby grants to Bank a lien and security interest in all ofMerchant’s right, title and interest in or to any of the following assets orproperties: (i) the Settlement Account, (ii) the Reserve Account, (iii) allItems (including future Items), (iv) any rights to receive credits orpayments under this Agreement and (v) all deposits and other property ofMerchant that Bank or its affiliates possess or maintain (including allproceeds of the foregoing). Merchant shall execute, acknowledge ordeliver any documents or take any actions Bank may from time to timerequest to better assure, preserve, protect, perfect, maintain or enforcethis security interest. To the extent permitted by law, Merchant irrevocablyauthorizes Bank to file any financing statements (at Merchant’s expense)in any relevant jurisdiction or any other documents or instruments relatedto this security interest. Bank shall also be the beneficiary of anyinsurance, surety bond or similar indemnity or guaranty (whethervoluntary or required by law) of Merchant or for the benefit of Merchant’scustomers, and Merchant hereby assigns to Bank the rights to makeclaims or receive the benefits thereof with respect to Card transactionshereunder. Merchant represents and warrants that (i) Merchant has goodand valid rights and title to the property described herein, (ii) Merchanthas full power and authority to grant to Bank the security interestpursuant hereto and to execute, deliver and perform its obligations inaccordance with the terms of this Agreement, without the consent orapproval of any other person or entity, (iii) no other person or entity has asecurity interest or lien in any of the property described herein and (iv)this security interest is a first lien security interest and secures Merchant’sobligations to Bank under this Agreement. Bank shall have all rights of asecured party and Merchant must obtain the prior written consent of Bankbefore granting any subsequent security interest or lien in the propertydescribed herein. Merchant agrees that it is Merchant’s intent that theseaccounts and secured property shall to the extent allowed by applicablelaw not be subject to any preference, claim, or stay by reason of anybankruptcy or insolvency law. Merchant agrees to act consistently withthe understanding that said accounts and secured property under thisAgreement are free of all such preferences, claims or stays by reason ofand as allowed by any such law.6. Chargebacks(a) This Agreement and Merchant authorize Bank to initiate and makedeposits and withdrawals from the Settlement Account, the ReserveAccount and any account to which Bank has access which may betransmitted electronically or accessed through ACH, or to delay or placeholds on any amounts in such accounts in order to protect any of Bank’srights and to obtain payment of any amount due Bank under thisAgreement, including, without limitation, fees, charges and discountrates, without any further notice or demand. Merchant agrees that anydepository bank shall comply with instructions originated by Bankdirecting dispositions of the funds in those accounts without any furtherconsent required by Merchant unless required by applicable law. Ifrequired, Merchant authorizes Bank to enter into any agreement with anydepository institution for this purpose, including on behalf of Merchant, toeffect the security interest granted to Bank below. Merchant agrees toenter into any such agreement. Merchant will confirm to any institutionholding any account of Merchant the existence of this authorization anddirect it to comply with Bank’s directions. Merchant will not change anysuch confirmation or direction without Bank’s prior written consent. Anysuch confirmation, direction or authorization will remain in effect for atleast 180 days after termination of this Agreement or, in Bank’sdiscretion, longer to process trailing activity. Bank may, without notice,delay or stop making payments to Merchant or setoff, retain or otherwisehold (or direct Merchant's financial institution to place a hold on) anyfunds (i) to protect itself against losses, Chargebacks, any amounts dueor to become due under this Agreement, (ii) based on Merchant’sfinancial condition or (iii) in the event Merchant submits transactions thatare not authorized or do not conform to this Agreement, the OperatingManual, the Operating Regulations or applicable law, includingtransactions subject to verification by any Card Association or cardholder.Merchant agrees that Bank shall not be liable for any losses, either director indirect, due to holding of funds, suspension of processing, terminationof this Agreement or any dishonour of any Item by a financial institution orMerchant’s depository bank as a result of these actions. Merchant agreesto promptly notify Bank of any discrepancy within thirty (30) days ofreceipt of any statement regarding Merchant’s accounts, or suchBank shall have the right, at any time and without notice, to chargebackto Merchant the full amount of any Item designated by Bank or a CardAssociation or Card issuing bank or which fails to meet the requirementsof this Agreement, the Operating Manual, the Operating Regulations orapplicable law (“Chargeback”) and to deduct, divert, withdraw or setoffthe full amount of any such Chargeback from (a) payments due Merchantfrom Card transactions, (b) the Settlement Account, (c) the ReserveAccount or (d) any other account or amounts due Merchant. Merchantagrees to be liable for and pay Bank for all Chargebacks. Merchantagrees to pay (a) the full amount of any Chargeback, including any fine orfee associated therewith and (b) the costs and expenses of Bank(including, without limitation, administrative charges, investigations,retrieval and legal fees and costs) related to any Item subject to (i) legalprocess (including reproduction of records), (ii) a bankruptcy orinsolvency proceeding or (iii) Chargeback. If Bank or any CardAssociation determines or suspects any Item to be questionable, suchItem is subject to Chargeback. Bank shall retain any discount or feerelated to a Chargeback transaction. Disputes relating to Chargebacksshall be governed by the Operating Regulations, including Merchant’sobligation to provide required documentation. If any of the CardAssociations assess a fine in connection with Merchant’s activities,including, without limitation, due to Chargebacks or credits/returns thatexceed the industry standards or constitute excessive Chargebacksunder the Operating Manual or Operating Regulations, Merchant shall beobligated to pay such fine, plus any other applicable charges. In addition,Merchant agrees to pay any fines or other amounts imposed by any CardAssociation for its activities, including without limitation, Chargebacks.Merchant agrees to obtain authorization for all Card transactions. AnyCard transaction not properly authorized is made with full recourse toMerchant. Merchant acknowledges and agrees that authorization for aCard transaction (i) indicates only the availability of credit at the time ofthe authorization, (ii) does not warrant that the person presenting theCard is the rightful cardholder, (iii) is not an unconditional guaranty ofpayment to Merchant and (iv) does not guaranty that any CardPage 2 of 7VPI - Terms and Conditions (4.2017) vantiv
transaction will not be subject to Chargeback. Merchant shall not submita transaction that is an attempt to collect a Chargeback or whichrepresents the financing of an existing obligation to Merchant, including adishonoured check.7. Merchant IndemnityIn addition to any other indemnities in this Agreement (including, withoutlimitation, the Operating Manual) or in the Operating Regulations,Merchant agrees to indemnify, defend and hold Bank and Bank’s parentcompanies, subsidiaries and affiliates (including, without limitation, therespective officers, directors, employees, attorneys, shareholders,representatives and agents of all of the foregoing) harmless from andagainst any and all liabilities, judgments, arbitration awards, settlements,actions, suits, claims, demands, losses, damages, costs (including, butnot limited to, court costs and out of pocket costs and expenses),expenses of any and every type, litigation expenses, and attorneys’ fees,including, but not limited to, attorneys’ fees incurred in any and every typeof suit, proceeding, or action, including but not limited to, bankruptcyproceedings, in connection with, by virtue of, or arising from, eitherdirectly or indirectly: (a) an Item that does not conform to therequirements of this Agreement, the Operating Manual, the OperatingRegulations or applicable laws; (b) any Card transaction or any act oromission of Merchant in connection with a cardholder; (c) Merchant’sbreach or default or an alleged breach or default of or under any term,covenant, condition, representation, warranty, obligation, undertaking,promise or agreement contained in this Agreement (including theOperat
Agreement. Bank and Merchant are independent parties contracting for services and neither is an agent, partner or joint venture of the other. Introduction Merchant is engaged in the business of providing goods and/or services to customers
