Payment Services Agreement

This (“Agreement”) governs the agreement between the company (“Merchant”) named on any ACH processing Application (“Application”) to which these Terms and Conditions are attached and ACHQ, Inc., a Florida company with its principal place of business at 1990 Main St Suite 750, Sarasota, FL 34236 (“ACHQ”). Merchant agrees to be bound by the terms of this Agreement as stated herein. Each of the individuals signing this Agreement and the Application represents and warrants that he or she has the full power and authority to bind the party (Merchant) identified above his or her name.

1.0 Service

1.1 ACH Processing

ACHQ and Merchant have contracted for ACHQ to provide Automated Clearing House (“ACH”) services as a Third Party Processor of ACH transactions. These transactions will be placed through a financial institution used by ACHQ who will be acting as the Originating Depository Financial Institution (“ODFI”). Merchant shall act as the Originator. ACHQ will debit funds (“Debit Entry”) for the purpose of collecting Automatic Payments from the accounts of the Merchant's customers (“Receivers”) and/or credit funds (“Credit Entry”) for the purpose of paying the Merchant's accounts receivable in accordance with the terms of this Agreement, the Operating Rules (“Rules”) of the National Automated Clearing House Association (“NACHA”), and applicable federal, state and local laws or regulations governing ACH transactions (collectively, “Regulations”). The terms and conditions of this Agreement do not limit Merchant's obligation to comply with the Rules and Regulations. “Entry” or “Entries” shall mean either an ACH Credit Entry or an ACH Debit Entry.

1.2 Account and Authorization

Merchant shall, at all times, maintain an account at a bank that is a member of the Federal Reserve ACH System (“Account”). Merchant expressly authorizes ACHQ to debit and/or credit the Account designated by Merchant according to the terms of this Agreement. Merchant further authorizes ACHQ to process electronic funds transfers as a Third Party Processor through the Account designated by Merchant. Merchant represents and warrants that it shall, at all times, maintain a sufficient balance in the Account to cover all obligations owed to ACHQ, including, but not limited to, all Entries originated by Merchant, returned Entries, chargebacks, fees, fines, and all other obligations owed to ACHQ and Merchant authorizes ACHQ to debit its Account for all amounts owed to ACHQ. Merchant shall bear all risk of loss, without warranty or recourse to ACHQ for the amount of any transaction, or other amounts due ACHQ (including ACHQ's actual costs and expenses) due to ACH returns of any kind, whether for customer chargebacks or unauthorized returns, insufficient funds, administrative or corporate returns, or any other type of returns. Merchant acknowledges and expressly agrees that this authorization applies with the same force and effect to any new bank account information for Merchant that ACHQ obtains at a future date, regardless of the timing, reason or manner in which ACHQ obtains information about other bank account(s) for Merchant (including, but not limited to, bank account(s) that Merchant identifies to ACHQ or bank account(s) for Merchant that ACHQ identifies through its own lawful research or investigation), and Merchant expressly agrees that ACHQ may debit any such account held by, or on behalf of Merchant, in order to satisfy any of Merchant's obligations to ACHQ. Merchant shall provide new Account information to ACHQ, in writing, at least 10 days prior to closing or changing the Account designated in this Agreement. This authorization shall survive the termination of this Agreement and shall continue in perpetuity until all of Merchant's obligations to ACHQ are paid in full, including, but not limited to, those obligations described in this Agreement.

1.3 Cancellation

Either party may cancel this Agreement with 60 days' written notice to the other party, subject to the terms and limitations set forth in the TERM AND TERMINATION paragraph of this Agreement. ACHQ may also immediately cancel this Agreement and immediately suspend all processing for Merchant without providing advance written notice to Merchant: (1) upon the request of ACHQ'S ODFI or any regulatory agency, regardless of the reason for the request; (2) if ACHQ, its ODFI or any regulatory agency believes that Merchant has breached this Agreement, has breached any representations and warranties made in this Agreement, is violating or has previously violated any applicable Rules or Regulations and/or has initiated any unauthorized Entries; or (3) if ACHQ is unable to process transactions for Merchant for any reason that is out of ACHQ'S control or ACHQ no longer has the ability to process transactions for Merchant.

1.4 Consumer Credit Inquiries

A credit report may be made in connection with this Application and Agreement. Merchant and the individuals signing this Agreement on behalf of the Merchant, including any Guarantors, authorize ACHQ, or any credit bureau or any credit reporting agency employed by ACHQ or any agents of ACHQ to investigate the references provided or any other statements or data obtained from the Merchant, or any of the above principals, for the purpose of this Application and Agreement. Merchant also authorizes ACHQ to obtain additional credit reports regarding Merchant on an annual basis, unless ACHQ, in its sole and absolute discretion, determines that it is necessary for ACHQ to periodically obtain Merchant's credit report on a more than annual basis, in which case Merchant authorizes ACHQ to obtain such additional credit reports. Notwithstanding anything in this paragraph, Merchant authorizes ACHQ to obtain a credit report regarding Merchant if Merchant requests increased processing amounts or parameters, or if Merchant originates sporadic transactional volume.

2.0 Merchant Responsibilities

2.1 Authorization

Merchant agrees to obtain authorization from Receivers pursuant to the requirements of the Rules and applicable Regulations prior to debiting and/or crediting Receivers' accounts. Merchant will maintain copies of the authorizations for a period of 2 years from the termination or revocation of the authorization.

2.2 Authentication

Merchant agrees that ACHQ may adjust processing fees and/or add authentication services without prior notice if Merchant experiences a return rate outside the NACHA return thresholds, as determined by ACHQ in its sole and absolute discretion, or if ACHQ deems the authentication process Merchant subscribes to is not adequate for standards determined by ACHQ. ACHQ at its sole and absolute discretion will determine the standards of authentication and the rate of return acceptable for Merchant. Nothing herein limits the Merchant's obligation to comply with the Rules and all applicable Regulations.

2.3 Representations Regarding Authorization

Merchant represents and warrants with respect to all Entries originated by Merchant and processed by ACHQ for Merchant that (1) each Receiver has authorized the debiting and or crediting of its account, (2) each Entry is for an amount agreed to by the Receiver, and (3) each Entry is in all other respects properly authorized. In addition to all other indemnity obligations contained elsewhere in this Agreement, Merchant agrees to defend, indemnify, and hold harmless ACHQ for any claims, losses, liabilities, costs, or expenses suffered or incurred (including attorneys' fees and costs) relating to, arising out of, or involving any breach of these representations and warranties or unauthorized Entries. These representations and warranties by Merchant shall survive termination of the Agreement. Merchant acknowledges and agrees that, from time to time, another person or entity may submit or modify transactions on behalf of the Merchant, including, without limitation, owners, principals, employees, officers, accountants or other designated third parties. Such a person or entity is referred to herein as a “Merchant Administrator.” Merchant expressly agrees that ACHQ is also considered Merchant Administrator. Merchant agrees that all actions of a Merchant Administrator will be deemed to be actions by Merchant under this Agreement, and Merchant accepts full responsibility and liability for any and all acts and/or omissions of a Merchant Administrator, including, but not limited to, acts of negligence (whether active, passive, or gross negligence) and intentional or fraudulent acts.

2.4 Identifying Numbers

Merchant understands and agrees that ACHQ may rely solely on identifying numbers provided by Merchant to determine the bank and account of a Receiver even if the numbers identify a bank or account holder different from the one identified by Merchant. In addition to all other indemnity obligations contained elsewhere in this Agreement, Merchant shall defend, indemnify, and hold harmless ACHQ for any claims, losses, liabilities, costs, or expenses suffered or incurred (including attorneys' fees and costs) as a result of an incorrect account or other identification.

2.6 Regulatory Compliance

Merchant bears the final responsibility to ensure that Merchant's policies and procedures meet the requirements of the ACH Rules and all applicable Regulations. Merchant is encouraged to consult counsel regarding compliance with the Rules and Regulations whenever there is any doubt about compliance. Merchant represents and warrants that all Entries originated by Merchant and processed by ACHQ for Merchant comply with all applicable Rules and Regulations, including without limitation the following Regulations: 1) FTC Act (15 U.S.C. §§ 41, et seq.); 2) TSR (16 C.F.R. 310, et seq.); 3) Electronic Fund Transfer Act (15 U.S.C. §§ 1601, et seq.) and Regulation E (12 C.F.R 205, et seq.), if applicable; 4) Uniform Commercial Code Article 4-A, if applicable; 5) Federal Reserve Board Regulation J, if applicable; 6) the rules and sanctions laws of the Office of Foreign Assets and Control (“OFAC”); 7) Unlawful Internet Gambling Enforcement Act (31 U.S.C. §§ 5361, et seq.) and accompanying regulations (12 C.F.R. 233; 31 C.F.R. 132); 8) PACT Act (15 U.S.C. §§ 376, et seq.), Jenkins Act (15 U.S.C. §§ 375, et seq.) and accompanying regulations; and 9) all applicable state laws and regulations. Merchant further represents and warrants that it shall not originate any Entries that constitute (i) improper telemarketing in violation of the TSR or other applicable Regulations or Rules; (ii) sales or marketing of advance-fee credit cards in violation of the TSR or other applicable Regulations or Rules; (iii) restricted Internet gambling transactions; and/or (iv) unlawful Internet tobacco sales. Merchant represents and warrants that it will not transmit any Entries that violate the laws of the United States or any state or locality in which ACHQ or Merchant does business. These representations and warranties by Merchant shall survive termination of this Agreement.

2.7 Tax Name and ID

Merchant shall provide to ACHQ its correct and accurate tax filing name and tax identification number for the U.S. Internal Revenue Service (“IRS”).

2.9 Recordkeeping Requirements

Merchant shall keep all records of verifiable customer payment authorizations for a period of two (2) years from the date an authorization is terminated or revoked. Merchant agrees to provide copies of such documents or records to ACHQ immediately upon written request from ACHQ.

2.10 Notice of Erroneous Unauthorized Transfer

Merchant agrees to promptly and regularly review all Entries and other communication received from ACHQ and to immediately notify ACHQ if there are any discrepancies between Merchant's records and those provided by ACHQ, the ODFI or Merchant's bank, or with respect to any transfer not authorized by Merchant. If Merchant fails to notify ACHQ within 7 days of the date ACHQ e-mails, mails, or otherwise provides a statement of account or other report of activity to Merchant, then Merchant will be solely responsible for all losses or other costs associated with any erroneous or unauthorized transfer.

2.11 Indemnity

In addition to all other indemnity obligations contained elsewhere in this Agreement, Merchant agrees to defend, indemnify and hold harmless ACHQ and its ODFI, including all of their directors, officers, employees and affiliates, from and against any and all claims, losses, liabilities, costs or expenses suffered or incurred (including attorneys' fees and costs) relating to, arising out of or involving any breach of the representations and warranties made by Merchant in this Agreement, the failure of Merchant or a Merchant Administrator to comply with the terms of the Agreement, the failure of Merchant or a Merchant Administrator to comply with the Rules, or any and all other applicable laws or Regulations, or by reason of ACHQ providing the services set forth in this Agreement.

3.0 ACHQ Responsibilities

3.1 Accepting Transactions

ACHQ will only be responsible for processing Entries that have arrived at its premises in proper format and on a timely basis. ACHQ will advise Merchant of any applicable cut-off time. Merchant does not have the right to cancel or amend any entry after submission to the ACH Network.

3.2 Originating Transactions

ACHQ will use the information provided by Merchant to originate Entries to the ACH Network. Merchant acknowledges and agrees that ACHQ may reject Entries for any reason permitted or required by the Rules or applicable Regulations. Merchant also acknowledges and agrees that Entries or files may be rejected which exceed the threshold parameters identified and set for Merchant.

3.3 Returned Entries and NOCs

ACHQ will apply returned Entries to Merchant's Account when they are received. As described elsewhere in this Agreement, if Merchant does not have funds available in its designated Account sufficient to cover all returned Entries, Merchant acknowledges and agrees that ACHQ will debit any other bank account identified by Merchant to ACHQ.

3.4 Settlements and Finality

Merchant's account will settle in accordance with the funding schedule set for Merchant. The standard settlement cycle date is the second business day from the effective Entry date. If any Entry is returned beyond the settlement date, ACHQ will, at ACHQ's sole and absolute discretion, either apply the debit to the current day's settlement, or debit the Merchant's account for the amount of the returned Entry.

3.5 No Warranty

Merchant acknowledges and agrees that neither ACHQ nor its ODFI has control over the conditions under which Merchant uses the payment processing system and does and cannot warrant the results obtained by such use. ACHQ DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, RELATING TO THE PROCESSING AND/OR ACHQ'S SERVICES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES AGAINST INFRINGEMENT OF THIRD-PARTY RIGHTS OR THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

3.6 Limits of Liability

ACHQ will be responsible for the performance of ACH services as a Third Party Processor in accordance with the terms of this Agreement and the Rules and applicable Regulations. ACHQ will not accept responsibility for errors, acts, or failure to act by others, including but not limited to, banks, communication providers, common carriers, or clearing houses through which Entries may be passed and or originated.

4.0 Additional Terms and Conditions

4.1 Fees and Payment

Notice of any changes to the existing fee structure as stated in this Agreement (including new or increased fees) will be made in writing to Merchant within 30 days of such changes or any new fees becoming effective. Merchant has the right to cancel the Agreement in writing at that time. Continued use of the services provided by ACHQ after notice of fee changes is provided to Merchant shall constitute Merchant's agreement to any new or changed fees.

Return Fees. If Merchant returns a transaction initiated by ACHQ and the transaction is in accordance with this Agreement, Merchant will be charged a $35.00 return fee per occurrence.

Chargeback and High Return Rate Fees. If, at the time Merchant is billed for chargebacks, Merchant's High Risk or Unauthorized Return Rate exceeds 0.5% using a NACHA approved method of calculation, a high-risk surcharge of $15.00 will be added to each chargeback received during that billing period and an additional 1.0% discount rate will be added to Merchant's Account, to be charged retroactively for the previous 30 days.

Attorneys' Fees. If Merchant becomes obligated to pay ACHQ's attorneys' fees pursuant to any provision in of this Agreement, such fees shall include in-house counsel fees at the rate of $400 per hour, as well as the actual hourly rate for outside counsel.

4.4 Governing Law and Venue

This Agreement, all questions related to the Agreement's validity, interpretation, performance, execution and inducement, and all claims related to, arising under, or involving in any way this Agreement, the services by ACHQ, or Merchant's business relationship with ACHQ are governed by, and shall be construed under, the laws of the State of Florida without regard for the principles and conflicts of law. All such claims shall exclusively be adjudicated in a State or Federal Court located in Sarasota County, FL, which the parties agree has exclusive personal jurisdiction over them and is the proper venue.

4.5 Jury Trial Waiver

ACHQ AND MERCHANT BOTH IRREVOCABLY WAIVE A TRIAL BY JURY UNDER BOTH STATE AND FEDERAL LAW IN ANY ACTION, LAWSUIT, OR DISPUTE ARISING OUT OF, OR RELATING TO, THIS AGREEMENT, ACHQ'S SERVICES, OR THE TRANSACTIONS RELATING TO SUBJECT MATTER OF THIS AGREEMENT.

4.6 Agreement Modification

ACHQ may modify the terms and conditions of this Agreement upon sixty (60) days' written notice. Use of services after any such modification will evidence acceptance of the modification(s).

4.7 Notices

Each notice required by this Agreement shall be in writing and will be effective when sent unless notice is provided by First Class Mail, return receipt requested, which shall be effective when received. To ACHQ: by First Class Mail, return receipt requested to 1990 Main St, Suite 750, Sarasota, FL 34236; or by email to support@achq.com with a copy to compliance@achq.com.

4.9 Term and Termination

This Agreement is effective from the date hereof and shall continue for a term of one (1) year. Thereafter, this Agreement shall be automatically renewed for consecutive one (1) year periods unless either party gives the other written notice of non-renewal at least 60 days prior to the expiration date of the current term.

4.10 Damage Waiver

ACHQ will not be liable to Merchant for any special, consequential, indirect, or punitive damages whether or not: (1) any claim for these damages is based on tort or contract law, or (2) either party knew or should have known the likelihood of these damages in any situation.

4.11 Reserve Account

For Merchants where Reserve Accounts are required Merchant acknowledges and agrees that its Reserve Account may be commingled with reserve funds held for other merchants. This amount will remain in the Reserve Account for a period of 2 years following the last debit, credit, or return Entry initiated on the Merchant Account.

4.13 Audit Requirements

ACHQ and its ODFI shall have the right to audit Merchant concerning its compliance with the Rules and applicable Regulations.

4.14 Customer Service

Merchant agrees to maintain, support and staff a customer service line with a U.S. domiciled telephone number during normal U.S. business hours.

4.15 Non-Solicitation

Merchant agrees that, without ACHQ's prior written consent, it will not, for a period of (1) year from the date this agreement is terminated, directly or indirectly solicit for employment, or employ any person who is now employed by ACHQ.

4.16 Entire Agreement

This Agreement makes up the entire Agreement between the parties concerning ACH services and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions whether oral or written of the parties.

5.0 Personal Guaranty

To endure and in consideration of ACHQ's acceptance of the Merchant Application and this Agreement, the undersigned absolutely and unconditionally guarantees to ACHQ full and prompt payment and performance when due of each any every condition and obligation of Merchant under this Application and Agreement, including all exhibits and amendments thereto. The undersigned guarantor(s) further acknowledges and agrees to pay all expenses of collection on this guaranty, including reasonable attorneys' fees incurred by reason of the default of the Merchant or the default of the guarantor(s).

6.0 Third-Party Sender Customer/Originator Acknowledgment

Merchant confirms and agrees that it has authorized ACHQ (“TPS”) to act as Merchant's agent in processing ACH Entries for Merchant, and that TPS will establish one or more clearing accounts with, and submit ACH Entries on behalf of the at an originating depository financial institution (“ODFI”). Merchant: (i) assumes the responsibilities of and makes the warranties of an Originator under the Operating Rules of the National Automated Clearing House Association (the “Rules”) and agrees to reimburse ODFI for returns, reversals, adjustments, reclamations, and warranty claims and responsibilities related to Merchant's ACH Entries; (ii) agrees to comply with the Rules; (iii) agrees to comply with all applicable state and federal laws, rules and regulations; and (iv) acknowledges that ACH Entries may not be initiated that violate the laws of the United States.

Notice with Respect to Non-Consumer ACH Wholesale Credit Transactions and UCC Article 4A

(1) Merchant Entries may be transmitted through the Automated Clearing House; (2) The rights and obligations of the Originator with respect to such payments shall be construed in accordance with and governed by the laws of the State of Florida unless it has been otherwise agreed that the law of some other state shall govern; (3) Credit given by a Receiving Depository Financial Institution (RDFI) with respect to an Automated Clearing House (ACH) credit entry is provisional until the RDFI receives final settlement for such entry through a Federal Reserve Bank or as otherwise provided for under Article 4A; and (4) If a RDFI does not receive such final settlement or payment, you are hereby notified and agree that the RDFI is entitled to a refund from the Receiver the amount of the credit to the Receiver's account, and the party making payment via such entry (i.e. the originator of the entry) shall not be deemed to have paid the amount of such entry.