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Exhibit 10.7
MERCHANT TRANSACTION PROCESSING
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AGREEMENT
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Associate: Chain: MID#: DDA#: MCC Code: Date Rec'd
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AGREEMENT
By their execution hereof, the undersigned PARTIES hereby agree to the terms,
conditions, and provisions of the documents, agreements, and rules which are
included herein, which shall become effective as provided. All of the documents
contained are called the "AGREEMENT."
The following documents are attached hereto:
Processing Terms.......................................... pp. 1 - 7
Terminal Rental Agreement (included: / / Y / / N)........ pp. 8 - 9
Guarantee................................................. pp. 10
Rules..................................................... pp. 11 - 20
The following documents are included herein and are located in the inside front
cover of this packet:
Merchant Application
Funds Transfer Instructions
Schedule of Applicable Fees
POS Information
Purchasing Card Information
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BY ITS EXECUTION HEREOF, MERCHANT ACKNOWLEDGES RECEIPT OF THE DOCUMENTS LISTED
ON THIS PAGE. ALL INFORMATION CONTAINED ON THIS APPLICATION WAS COMPLETED OR
SUPPLIED BY ALL CONTRACTING PARTIES. MERCHANT ACCEPTS ALL CONTRACTUAL ASPECTS
OF THE AGREEMENT. MERCHANT UNDERSTANDS THAT THIS AGREEMENT SHALL NOT TAKE EFFECT
UNTIL SIGNED BY FIRST NATIONAL BANK OF OMAHA.
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IN WITNESS WHEREOF THE PARTIES HERETO HAVE CAUSED THIS AGREEMENT TO BE EXECUTED
BY THEIR DULY AUTHORIZED REPRESENTATIVES EFFECTIVE ON THE DATE SIGNED BY FNBO.
MERCHANT: CyberGold, Inc. FIRST NATIONAL BANK OF OMAHA
Signature: /s/ MARY K. GLAESER Signature: /s/ FIRST NATIONAL BANK OF OMAHA
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Name: /s/ Mary K. Glaeser Name: FIRST NATIONAL BANK OF OMAHA
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Date: 6/17/97 Date: 9/12/97
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THE UNDERSIGNED AGREES TO THE TERMS OF THE UNDERSIGNED AGREES TO THE
THE TERMINAL RENTAL AGREEMENT: TERMS OF THE GUARANTEE.
SPC, INC. GUARANTOR: /S/ A. NATHANIEL GOLDHABER
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Signature: By: A. Nathaniel Goldhaber
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Name: Social Security or Tax ID: ###-##-####
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Date: Address: 261 Stonewall Road
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City: Berkeley
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State: CA Zip Code: 94705
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PROCESSING TERMS
This AGREEMENT shall become effective on the date executed by a duly authorized
representative of FNBO. FNBO and MERCHANT shall be collectively known as the
"PARTIES."
A. WHEREAS FNBO is a Member of VISA U.S.A., Inc. ("VISA") and MasterCard
International, Inc. ("MASTERCARD") and provides transaction processing
and other services, ("SERVICES"), in relation to financial services
cards ("CARDS") issued by VISA, MASTERCARD and other financial service
card organizations, including debit point of sale networks ("DEBIT POS
NETWORKS"). VISA, MASTERCARD, DEBIT POS NETWORKS, and the other
financial service card organizations shall be collectively known as
"ASSOCIATIONS;"
B. WHEREAS MERCHANT, in furtherance of its business operations, wishes to
accept debit and credit CARDS issued by the ASSOCIATIONS and have FNBO
process the resulting transactions ("SALES") pursuant to the terms and
conditions set out below. For purposes of this AGREEMENT, debit
transactions, ("DEBIT"), shall mean those transactions processed on a
DEBIT POS NETWORK, in an on-line real time environment requiring the
entry of a personal identification number, ("PIN");
C. WHEREAS MERCHANT desires to be sponsored as a participant in certain
DEBIT POS NETWORKS, under the terms of the rules and regulations of
each such DEBIT POS NETWORK;
D. WHEREAS ASSOCIATIONS and FNBO each have adopted rules and regulations
relating to all aspects of SALES processing. Such rules and
regulations, as amended from time to time, are incorporated by this
reference herein and shall be referred to as the "RULES."
E. WHEREAS MERCHANT understands that this is an agreement for transaction
processing and that the fees for the services herein are calculated
based on the term of this AGREEMENT, the number of transactions
processed, and the method of processing.
NOW THEREFORE, in consideration of the mutual promises made herein and other
valuable consideration, receipt and sufficiency of which are hereby
acknowledged, the PARTIES do hereby agree as follows:
1. GENERAL:
1.1 The CARDS designated herein will be processed under the terms and
conditions of AGREEMENT as long as FNBO is contractually permitted to offer
such SERVICES by the respective ASSOCIATIONS.
1.2 MERCHANT agrees to submit all SALES from CARDS accepted in MERCHANT's
business as defined in the Application, under Business Profile and
Assumptions, for processing, ("BUSINESS"), to FNBO in accordance with the
RULES and pursuant to the terms of this AGREEMENT.
1.3 MERCHANT agrees that this AGREEMENT is confidential and will not disclose
it to any third party without the prior written consent of FNBO.
1.4 MERCHANT and FNBO agree to abide by the RULES. FNBO and ASSOCIATIONS may
from time to time amend the RULES or operating procedures related to SALES
and SERVICES to be effective upon thirty (30) days written notice to
MERCHANT.
1.5 MERCHANT has been supplied with the RULES and by signing AGREEMENT,
acknowledges that it has received and understands them.
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1.6 Submission by MERCHANT of SALES at any time after seven (7) days from the
date of distribution of amended RULES to MERCHANT's address for
processing statements, shall be evidence that MERCHANT has received the
amended RULES and has agreed to abide by them.
2. SPECIFIC OPERATING PROCEDURES:
2.1 MERCHANT agrees that it will comply with all CARD Acceptance Procedures
in RULES for each SALE, including, but not limited to the following:
2.1.1 MERCHANT agrees that it will obtain and record a valid positive
authorization for all SALES in accordance with the RULES before
submitting them to FNBO for processing; and
2.1.2 MERCHANT must be able to prove, by evidence of a terminal capture
of a magnetic stripe or signed sales draft showing imprint of the
CARD, that the CARD was present at the time of SALE, unless
specifically set up for Mail Order and Telephone Order ("MO/TO")
transactions.
2.2 MERCHANT may participate in such DEBIT POS NETWORKS as are set forth in
the Schedule Of Applicable Fees. Additional DEBIT POS NETWORKS may be
available from time to time. FNBO does not warrant the continuing
availability of any DEBIT POS NETWORK.
2.3 MERCHANT agrees to accept valid CARDS of each of the DEBIT POS NETWORKS
selected without discrimination and will not impose purchase minimums,
maximums, or surcharges, unless specifically allowed by the DEBIT POS
NETWORKS. MERCHANT agrees to comply with the rules, regulations,
procedures, fees, assessments, penalties, and other obligations of each
DEBIT POS NETWORK, as from time to time are in effect.
2.4 FNBO may provide MERCHANT access through MERCHANT's terminals to the
DEBIT POS NETWORKS if agreed to by MERCHANT herein.
2.5 MERCHANT realizes that there are no voice authorizations for DEBIT
transactions.
3. PAYMENT OF SUMS DUE:
3.1. MERCHANT agrees to pay FNBO the fees as set out in the Schedule of
Applicable Fees and other sums owed to FNBO, including but not limited to
all disputed transactions ("CHARGEBACKS"), (collectively "FEES") for
SERVICES as set forth in this AGREEMENT as amended from time to time.
3.2 As set our in the Schedule of Applicable Fees, discount ("DISCOUNT") is a
transaction charge for SALES submitted by MERCHANT and generally includes
"Processing," "Authorizations," "Assessments," and "Interchange."
Assessments and Interchange are the standard fees that the ASSOCIATIONS
charge for the clearing of SALES transactions and are subject to change
by the ASSOCIATIONS; FNBO has no direct control over these fees. Any
adjustment in Interchange and Assessments by the ASSOCIATIONS may result
in an adjustment in the DISCOUNT charged to MERCHANT. FNBO will notify
MERCHANT of any change in FEES caused by action of ASSOCIATIONS, in
writing, prior to any such change becoming effective. Notice to MERCHANT
of any change in FEES caused by ASSOCIATIONS may be less than thirty (30)
days.
3.3 DISCOUNT is quoted by FNBO based on the information supplied by MERCHANT
in the Application under the Business Profile and Assumptions,
("ASSUMPTIONS"). MERCHANT agrees that the FEES are based on the term of
this AGREEMENT, the ASSUMPTIONS, and the method of processing. MERCHANT
agrees that the ASSUMPTIONS are material facts in the calculation of the
DISCOUNT and other FEES. MERCHANT agrees that if the ASSUMPTIONS are
shown to be incorrect, FNBO may amend FEES as set out herein to reflect
such change. MERCHANT agrees to pay such amended FEES.
3.4 The FEES may be amended by FNBO on thirty (30) days written notice to
MERCHANT unless provided otherwise herein.
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3.5 MERCHANT understands that FNBO is in no way financially responsible for
CHARGEBACKS. Failure to comply with the RULES will increase MERCHANT's
exposure to CHARGEBACKS. MERCHANT's obligation to pay chargebacks shall
survive the termination or expiration of AGREEMENT.
3.6 In the event that ASSOCIATIONS should levy a fine or penalty or assess a
charge to FNBO as a result of MERCHANT's SALES or CHARGEBACK activity,
MERCHANT agrees to pay such fines, penalties, or charges, and any
administrative fees associated with such fines, penalties, or charges.
3.7 MERCHANT shall establish a designated account ("DESIGNATED ACCOUNT") for
the credit and debit of sums between the PARTIES. MERCHANT agrees to
maintain a positive balance in the DESIGNATED ACCOUNT and to deposit
funds so that the balance required by FNBO is maintained. If AGREEMENT is
terminated for any reason, the DESIGNATED ACCOUNT shall be maintained for
a minimum period of six months in order to secure the obligations of
MERCHANT hereunder unless otherwise agreed in writing by the PARTIES
hereto.
3.8 FNBO agrees to pay MERCHANT for SALES less FEES owed to FNBO by
MERCHANT. FNBO shall deduct FEES from income transactions or debit the
same from MERCHANT's DESIGNATED ACCOUNT.
3.9 In the event that FNBO invoices MERCHANT for any FEES and MERCHANT does
not pay such sums within thirty (30) days from date of receipt of
invoice, FNBO will charge, and MERCHANT agrees to pay, a late fee of one
and one-half percent (1.5%) on the balance outstanding on the unpaid
invoices accruing on a monthly basis.
3.10 If MERCHANT breaches AGREEMENT or if FNBO identifies suspicious or
irregular activity related to SALES, FNBO may refuse to process SALES
and/or may hold funds pending the cure of such breach or resolution of
such activity.
3.11 Electronic Authorizations are the number of authorizations requested per
month which exceed one hundred percent (100%) (unless a different
authorization percentage is provided for in the ASSUMPTIONS) of the
number of VISA and MASTERCARD SALES transactions processed in that month.
In the event MERCHANT pays the per item authorization fee this section
does not apply.
3.12 Voice Authorizations are the number of Voice Authorizations requested per
month of the number of VISA and MASTERCARD transactions processed in that
month.
3.13 Voice Assisted Class are considered to be any call to the Voice
Authorization Center for any reason other than a Voice Authorization.
3.14 In the event AGREEMENT is terminated early for any reason other than set
out in paragraph 5.1, 5.2.1, 5.2.2, MERCHANT agrees to pay FNBO a
liquidated damages sum ("LIQUIDATED DAMAGES") to be determined by
computing the number of months remaining from the effective date of
termination to the end of the current term of this AGREEMENT and
multiplying that number by fifty-five dollars ($55.00). MERCHANT and FNBO
agree that the damages suffered by FNBO as a result of such early
termination would be extremely difficult to calculate with precision. For
that reason, the PARTIES agree that the LIQUIDATED DAMAGES should be
computed as set forth above.
3.15 MERCHANT agrees that LIQUIDATED DAMAGES shall also be due to FNBO if
MERCHANT discontinues submitting SALES for processing during the term of
AGREEMENT.
3.16 In the event of a termination of this AGREEMENT, MERCHANT shall pay FNBO
all costs of deconversion, including but not limited to, costs of
communication and attorney's fees of FNBO's counsel.
3.17 In the event FNBO takes any action against MERCHANT to collect any FEES
or monies due FNBO from MERCHANT, MERCHANT agrees to pay all costs of
collection, including but not limited to, attorney's fees, to the extent
allowed by law.
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4. TERM OF AGREEMENT:
4.1 The initial term of this AGREEMENT shall be for the term of three (3)
years (the "INITIAL TERM") commencing on the date this AGREEMENT is
executed by an authorized agent of FNBO.
4.2 At the expiration of the INITIAL TERM, this AGREEMENT will automatically
renew for successive one (1) year periods ("RENEWAL TERM") unless
terminated as set out below.
5. TERMINATION OF AGREEMENT:
5.1 This AGREEMENT, except for any included terminal rental agreement, may
be terminated by FNBO at any time effective upon thirty (30) days written
notice.
5.2 This AGREEMENT may be terminated by MERCHANT as follows:
5.2.1 Upon FNBO's default of any material obligation to MERCHANT
thereunder and the failure of FNBO to cure such default within
thirty (30) days after written notice of such default; or
5.2.2 Upon written notice of non-renewal at least thirty (30) days prior
to the commencement of any RENEWAL TERM; or
5.2.3 On thirty (30) days written notice of termination accompanied by
payment to FNBO of the LIQUIDATED DAMAGES due at that time.
5.3 In order to protect the ASSOCIATIONS and FNBO, FNBO may terminate this
AGREEMENT effective immediately for any of the following reasons:
5.3.1 In the event of insolvency, receivership or voluntary or
involuntary bankruptcy; or in the event of an assignment of any of
MERCHANT's assets for the benefit of MERCHANT's property creditors,
or in the event that any part of MERCHANT's property is or becomes
subject to any levy, seizure, assignment or sale for or by any
creditor or governmental agency without being released within
thirty (30) days thereafter; or
5.3.2 If MERCHANT fails to pay any FEES when due; or
5.3.3 If MERCHANT has misrepresented or omitted any material information
provided to FNBO; or
5.3.4 If MERCHANT is in breach of the RULES; or
5.3.5 If MERCHANT, after FNBO's request, fails to send copies of SALES
drafts to FNBO; or
5.3.6 If MERCHANT submits for processing SALES that were not originated
as a result of a direct SALE transaction between a cardholder and
MERCHANT in the normal course of business ("LAUNDERING"); or
5.3.7 If the number of CHARGEBACKS experienced by MERCHANT in any one
month exceed one percent (1%) of the number of SALES in that or any
prior month; or
5.3.9 In the event of a material change of BUSINESS; or
5.3.10 In the event that MERCHANT, its principal, or associated parties,
is identified by the ASSOCIATIONS under any program designed to
monitor merchants; or
5.3.11 If MERCHANT is inactive for ninety (90) days and is not a seasonal
MERCHANT; or
5.3.12 In the event that Guarantor (if designated) shall give notice of
its intention to withdraw the Guarantee.
5.4. Upon the notice of termination or expiration of the AGREEMENT, FNBO is
entitled to retain sufficient funds to cover anticipated FEES. In the
event that there is not enough money retained to cover the anticipated
FEES, FNBO may require MERCHANT to deposit sufficient funds. This sum will
be retained by FNBO for a period of one hundred eighty (180) days, plus
the period of any warranty or guarantee on goods and/or services sold by
MERCHANT and processed as SALES, from the date of the last SALE processed
by MERCHANT under AGREEMENT. FEES due to FNBO received during this period
will be
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debited from this sum. At the end of the period defined above FNBO will
release to MERCHANT the balance of the sums retained, net of any FEES that
are then being processed or disputed.
6. BANKRUPTCY:
6.1 It is not the intention of the PARTIES that FNBO remain obligated to
continue processing SALES in the event of a Bankruptcy filing by MERCHANT.
Upon filing voluntary or involuntary bankruptcy proceedings by or against
MERCHANT, MERCHANT must notify FNBO in writing within five (5) days.
Notification must be sent by certified mail to FNBO at the address for
NOTICES set out herein.
6.2 Credits to MERCHANT's DESIGNATED ACCOUNT and other payments to MERCHANT
are provisional and the PARTIES agree that AGREEMENT is a contract whereby
FNBO is extending financial accommodations to MERCHANT within the meaning
of Section 365 of the Bankruptcy Code as amended from time to time. The
right or MERCHANT to receive any amounts due or to become due from FNBO is
expressly subject and subordinate to the CHARGEBACKS, setoff, lien, and
security interest rights of FNBO under this AGREEMENT without regard to
whether such CHARGEBACKS, setoff, lien, and/or security interest rights
are being applied to claims that are liquidated, unliquidated, fixed,
contingent, matured, or unmatured.
7. INFORMATION AND DOCUMENTATION:
7.1 MERCHANT agrees to comply with all requests for information and
documentation regarding SALES and CARDS processed under AGREEMENT within
the time period stated by FNBO in its request.
7.2 Upon FNBO's request MERCHANT shall provide FNBO with current financial
statements in a format acceptable to FNBO.
7.3 MERCHANT understands that credit reports of principal(s) of MERCHANT will
be requested and authorizes the same, on behalf of itself and those
parties. MERCHANT authorizes parties contacted by FNBO, or any of its
affiliates, in relation to this AGREEMENT to release the credit
information requested by FNBO or any affiliate.
7.4 If the opinion of FNBO, information received or discovered about MERCHANT
reflects an adverse change in status, or in the event that any information
requested by FNBO is not received, FNBO may withhold the payment for SALES
or require a reserve of funds be deposited in an account at FNBO with the
deposit established to cover MERCHANT's obligations under AGREEMENT.
7.5 MERCHANT is supplied with monthly reports by FNBO regarding MERCHANT's
SALES activity. It is MERCHANT's sole responsibility to report any error
or discrepancies detected by MERCHANT in writing to FNBO within ninety
(90) days following the end of the monthly reporting period. After such
period, MERCHANT will be deemed to have accepted the monthly reports as
delivered.
8. PROCESSING RESTRICTIONS:
8.1 MERCHANT understands that FNBO is not responsible for and is not able to
provide customer service for the POS devices installed by and/or operated
by any Third Party with which MERCHANT has contracted. MERCHANT should
contact the Third Party for service in respect of this equipment. MERCHANT
shall not allow any Third Party to install, remove, or modify any terminal
software application at MERCHANT's location without the express written
consent of FNBO. MERCHANT understands and agrees that FNBO can only
process SALES that are received by FNBO, and that any Third Party is
responsible for ensuring that the SALES are formatted and transmitted to
FNBO in accordance with the then current FNBO and ASSOCIATIONS'
requirements. MERCHANT also understands and agrees that in the event that
a Third Party presents SALES transactions that are not in accordance with
the then current ASSOCIATIONS' requirements that the FEES charged to
MERCHANT by FNBO may increase.
8.2 MERCHANT agrees that it will not materially change its BUSINESS or the
method in which it markets or sells the goods and services of BUSINESS
without informing FNBO. FNBO may only process SALES from BUSINESS as
defined in the Application.
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8.3 In the event actual monthly SALES volume substantially exceeds the
projected annual SALES volume as provided in the ASSUMPTIONS and pro-rated
to one month, FNBO may, at its option, either refuse to process SALES in
excess of such sum and/or process such SALES and retain the proceeds of
such SALES until the next month and release such sums to MERCHANT at that
time (and count this volume as SALES volume for that month) and/or
terminate AGREEMENT; and/or amend this AGREEMENT in a way to ensure that
FNBO has security for the increased volume. Such rights of termination and
retention of funds are in addition to those already provided for herein.
9 WARRANTIES AND INDEMNITIES:
9.1 MERCHANT understands that FNBO merely provides processing services for
SALES and is neither a partner in MERCHANT's business operations nor a
guarantor of the receipt by MERCHANT of the proceeds of SALES.
Furthermore, FNBO does not guarantee that SALES will not be subject to
CHARGEBACKS.
9.2 MERCHANT warrants that it has not been terminated form depositing SALES
with any other member of the ASSOCIATIONS.
9.3 MERCHANT warrants that at the time of depositing SALES for processing (i)
it has the right to assign such SALES to FNBO and does by this reference
assign all its rights, title, and interest to payment for such SALES to
FNBO so that FNBO may process SALES under AGREEMENT; (ii) it has no
knowledge of any fact that would impair the collectability of the SALES;
and (iii) that the SALES represent a valid obligation of the cardholder in
the amount indicated for merchandise sold and delivered or services
rendered to the cardholder by the MERCHANT only and does not involve any
element of credit for any other purpose.
9.4 MERCHANT agrees to indemnify and hold harmless FNBO from and against any
claims, demands, or judgments, made or recovered against it and arising
out of any breach by MERCHANT of the terms of this AGREEMENT or arising
from any act or omission by MERCHANT which violates any applicable
federal, state, or local laws, regulations, or the RULES. FNBO may defend
on its own any such claims or demands or request MERCHANT to take up such
defense. In either event MERCHANT will further indemnify FNBO for
reasonable attorneys' fees or any other necessary expenses incurred by
FNBO by reason of such defense.
9.5 MERCHANT shall be solely responsible for losses and CHARGEBACKS, incurred
as a result of, or arising out of any fraud including LAUNDERING,
negligence, or willful misconduct on the part of MERCHANT, or one or more
of MERCHANT's employees or agents.
10. NOTICES:
10.1 All notices required under this AGREEMENT shall be written notices
effective, unless otherwise stated in AGREEMENT, upon the earlier of
actual receipt thereof or the third (3rd) business day following such
notices being deposited postage prepaid in the United States Postal System.
10.2 All notices shall be sent to the following addresses:
10.3 If to FNBO or SPC:
First National Bank of Omaha.
One First National Center
16th & Dodge Street
P.O. Box 2196
Omaha, NE 68102
Attention: Merchant Legal and Compliance
10.4 If to MERCHANT: At the address set out in the Application or such
alternative address as designated in writing by MERCHANT.
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10.5 Either PARTY may designate alternate addresses by giving the other
fourteen (14) days written notice of the change in address.
11. MISCELLANEOUS:
11.1 FNBO, may from time to time, delegate duties under AGREEMENT without
giving notice to MERCHANT, provided, however, that FNBO will remain
liable to MERCHANT for any obligations existing under AGREEMENT.
Except as expressly provided in AGREEMENT, MERCHANT may not assign its
rights or delegate its responsibilities under this AGREEMENT without
the prior written consent of FNBO.
11.2 This AGREEMENT and the guarantee contained herein shall be governed by
and construed in accordance with the laws of the State of Nebraska.
The PARTIES also agree that in the event of any dispute regarding this
AGREEMENT, the courts of the State of Nebraska shall have and be
vested with personal jurisdiction over the PARTIES.
11.3 No delay or failure by either PARTY to exercise any right under
AGREEMENT, and no partial or single exercise of that right, shall
constitute a waiver of that right or any other right, unless expressly
provided for in AGREEMENT.
11.4 FNBO is not liable or responsible for any failure or delay in
performance caused by any Act of God, strikes, flood, fire, war,
public enemy, electrical or equipment failure, failures by third
PARTIES, or other events beyond its control.
11.5 This AGREEMENT constitutes the entire understandings of the PARTIES
and supersedes all prior contracts, agreements, and negotiations
between the PARTIES whether verbal or written.
11.6 FNBO shall not be responsible for the costs incurred by MERCHANT in
negotiating or implementing this AGREEMENT.
11.7 The obligations of all PARTIES incurred prior to the effective date of
termination of AGREEMENT will survive the termination of AGREEMENT. In
the event that any portion of AGREEMENT is held invalid or
unenforceable for any reason, it is agreed that any invalidity or
unenforceability will not affect the remainder of the same and the
remaining provisions will remain in full force and effect. The PARTIES
agree that any Court of competent jurisdiction may modify any
objectionable provision of the AGREEMENT so as to render it valid,
reasonable and enforceable.
11.8 This AGREEMENT may be amended or modified by FNBO effective upon
thirty (30) days written notice.
11.9 By signing the AGREEMENT, MERCHANT represents that it has the full
legal power and authority to enter into performance obligations under
AGREEMENT. MERCHANT also represents that the entering into of this
AGREEMENT has been duly authorized by MERCHANT, that the signer is a
duly authorized signatory for the MERCHANT and that this AGREEMENT
constitutes a legal, valid, and binding obligation of MERCHANT and is
enforceable against MERCHANT in accordance with its terms.
11.10 FNBO agrees not to use any information supplied by MERCHANT in the
Purchasing Card Information which is required for acceptance of
purchasing cards, in its decision as to whether to accept MERCHANT for
processing. MERCHANT agrees to hold FNBO harmless from any and all
claims relating to the collection, processing, dissemination, and use
or misuse of the information contained in the Purchasing Card
Information. MERCHANT acknowledges that the information from the
Purchasing Card Information will be sent to MERCHANT's corporate
customers who pay with a purchasing card. MERCHANT agrees that FNBO is
not responsible for any actions or omissions of others regarding this
information.
11.11 This AGREEMENT shall not become a binding AGREEMENT between the
PARTIES until (i) it is signed by an authorized Agent of FNBO; and
(ii) FNBO has received a negative response to its inquiry of the
ASSOCIATIONS' programs designed to monitor merchants.
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TERMINAL RENTAL AGREEMENT
If the first page of this AGREEMENT is executed by the PARTIES the following
hereby applies. This Terminal Rental Agreement, ("RENTAL AGREEMENT"), by and
between SPC, Inc. d/b/a First of Omaha Merchant Processing, a Nebraska
Corporation ("SPC") and MERCHANT shall become effective on the date executed by
a duly authorized representative of SPC.
1. SPC agrees to rent to MERCHANT and MERCHANT agrees to rent from SPC the
equipment described in the attached POS Information form ("EQUIPMENT") for
a term of three (3) years and shall automatically renew for additional one
(1) year terms. Following the initial term either PARTY may terminate by
providing 30 days written notice of termination to the PARTY.
2. MERCHANT agrees to pay SPC a monthly RENTAL FEE for the EQUIPMENT which
will be debited monthly from the MERCHANT's DESIGNATED ACCOUNT established
under the RENTAL AGREEMENT.
3. MERCHANT agrees to pay the fee set out in the POS Information per month as
rental for the EQUIPMENT.
4. The PARTIES hereto agree to each of the terms and conditions forth herein
and acknowledge that such provisions are binding upon each of them, their
successors, heirs and assigns.
5. MERCHANT understands that a telephone jack and other equipment may be
required for its phone system to be compatible with EQUIPMENT at MERCHANTS
expenses.
6. Upon expiration of the rental of the EQUIPMENT, MERCHANT agrees to remove
the EQUIPMENT from its locations and deliver it to SPC at MERCHANTS cost in
the same condition as when the EQUIPMENT was installed, normal wear and
tear excepted. The PARTIES agree that the EQUIPMENT is and will remain
personal property of SPC.
7. MERCHANT hereby assumes the entire risk of loss, damage or destruction of
the EQUIPMENT from any cause whatsoever during the term of the rental,
until the delivery of the EQUIPMENT to SPC. In the event of damage to or
loss of EQUIPMENT, MERCHANT shall at the option of SPC either repair
EQUIPMENT at MERCHANT's expense or pay SPC the cost of replacing the same
at the current replacement cost.
8. MERCHANT hereby grants to SPC the right, during normal business hours, to
enter any location under MERCHANT's control for the purpose of inspecting,
repairing, or replacing EQUIPMENT.
9. MERCHANT shall and does hereby agree to indemnify and hold SPC, its agents,
employees, successors and assigns harmless from any and all liability,
damages or loss (including attorney fees and costs) arising out of the
ownership, selection, possession, leasing or renting, operation (regardless
of where, how and by whom operated), control, use, condition (included but
not limited to, latent and other defects, whether or not discoverable by
SPC) maintenance, delivery and return of the EQUIPMENT. This
indemnification and the obligations contained herein shall survive
termination or expiration of RENTAL AGREEMENT.
10. MERCHANT shall keep EQUIPMENT insured against all risks for not less than
replacement costs of EQUIPMENT, naming SPC as an additional insured as its
interest may appear. All such insurance shall be in form and with companies
acceptable to, and approved in writing by SPC.
11. In the event of termination of this rental, SPC shall have the right to
enter onto MERCHANT's locations for the purpose of recovering EQUIPMENT.
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12. MERCHANT is not authorized to make any alterations, repairs or changes
including programming changes to EQUIPMENT. Any personal property attached
to EQUIPMENT shall become part of the EQUIPMENT.
13. SPC has no liability whatsoever for any indirect, special or consequential
damages, such as, but not limited to, loss of anticipated profits, or
other economic loss in connection with any use of EQUIPMENT or services
provided by SPC pursuant to this or any other agreement. SPC is not
responsible for any loss or damages whatsoever sustained by MERCHANT
arising as a result of any acts of God, strikes, flood, weather, shortages
of parts or supplies or other events beyond its reasonable control.
14. SPC will provide maintenance service to EQUIPMENT during the term of the
RENTAL. MERCHANT shall not allow any other person or entity to maintain or
tamper with EQUIPMENT without the express written consent of SPC.
15. MERCHANT has examined EQUIPMENT and relies on no warranties or
representations of SPC as to the quantity or nature of EQUIPMENT. SPC makes
no warranty express or implied as to the merchantability or fitness for any
particular purpose of EQUIPMENT.
16. Except as expressly provided herein, MERCHANT may not assign its rights or
delegate its responsibilities under this RENTAL AGREEMENT without the prior
written consent of SPC, which will not be unreasonably withheld.
17. This RENTAL AGREEMENT shall be governed by and construed in accordance with
the laws of the State of Nebraska. The PARTIES further agree that in the
event of any dispute regarding this RENTAL AGREEMENT, the courts of the
State of Nebraska shall have and be vested with personal jurisdiction over
the PARTIES to this RENTAL AGREEMENT.
18. No delay or failure by either PARTY to exercise any right under RENTAL
AGREEMENT, and no partial or single exercise of that right, shall
constitute a waiver of fact or any other right, unless expressly provided
herein.
19. This RENTAL AGREEMENT constitutes the entire understandings of the PARTIES
and supersedes all prior contracts, agreements and negotiations whether
oral or written. This RENTAL AGREEMENT includes any and all Addenda and
Exhibits attached and/or referenced hereto.
20. SPC shall not be responsible for the costs incurred by MERCHANT for
negotiating or implementing this RENTAL AGREEMENT.
21. The obligations of all PARTIES hereto incurred prior to the effective date
of termination of RENTAL AGREEMENT shall survive the termination of RENTAL
AGREEMENT.
22. In the event that any portion of RENTAL AGREEMENT shall be held invalid
or unenforceable for any reason, it is agreed that any invalidity or
unenforceability shall not affect the remainder of the same and the
remaining provisions shall remain full force and effect, and any court of
competent jurisdiction may so modify any objectionable provision of the
same so as to render it valid, reasonable and enforceable.
23. This RENTAL AGREEMENT may only be amended or modified by a subsequent
written agreement by and between the PARTIES hereto.
24. MERCHANT hereby represents that the entering into of this RENTAL AGREEMENT
has been duly authorized by MERCHANT and that this RENTAL AGREEMENT
constitutes a legal, valid and binding obligation of MERCHANT, and is
enforceable against MERCHANT in accordance with its terms.
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GUARANTEE
For value received, and in consideration of the mutual undertakings contained in
this AGREEMENT, the undersigned, ("GUARANTOR"), being interested in the business
and success of MERCHANT and to induce FNBO to enter into AGREEMENT, does hereby
absolutely and unconditionally guarantee the full and faithful performance and
prompt payment by MERCHANT of all its obligations to FNBO, together with all
costs, expenses and attorney's fees incurred by FNBO in connection with any
actions, inaction's, or defaults of MERCHANT. The liability of GUARANTOR shall
not be effected by any settlement, modification, release, waiver, discharge or
variation of terms of any obligation of MERCHANT, of GUARANTOR, or any other
person or by any failure of FNBO to exercise or enforce any of its rights
against MERCHANT. GUARANTOR hereby waives notice of acceptance of guarantee,
notice of demand, prosecution of collection, all exemption and homestead laws
and all setoffs and counterclaims. The GUARANTOR waives any right to require
FNBO to proceed against other persons or MERCHANT or to require MERCHANT to
comply with AGREEMENT. This is a guarantee of payment and not of collection.
This is a continuing guarantee and shall remain in effect until one
hundred-eighty (180) days after receipt by FNBO of written notice by GUARANTOR
terminating or modifying the same. The GUARANTOR agrees to provide on FNBO's
request financial statements and/or tax returns to verify ability to guarantee
the MERCHANT's liabilities under AGREEMENT. The termination of AGREEMENT or
guarantee shall not release GUARANTOR from liability with respect to any
obligations incurred prior to the effective date of termination. No termination
of guarantee shall be effected by the dissolution of GUARANTOR, by any change in
legal status of GUARANTOR or any change in the relationship between MERCHANT and
GUARANTOR. Guarantee shall bind and inure to the benefit of the personal
representatives, heirs, administrators, successors and assigns of GUARANTOR and
FNBO.
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THE RULES
CARD ACCEPTANCE PROCEDURES
1. HONOR ALL CARDS
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1.1 MERCHANT shall honor all CARDS issued by an ASSOCIATION when presented
in accordance with these RULES for the purchase of goods or services by
an authorized holder of CARD or in a request for credit following such
a transaction.
1.2 MERCHANT shall not establish minimum or maximum SALE amounts as a
condition for honoring CARDS.
1.3 MERCHANT shall not impose any surcharge on SALES. Any tax required to
be collected by the MERCHANT must be included in the total transaction
amount.
2. SALES TRANSACTIONS
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2.1 No SALE may be completed if cardholder (the duly authorized holder and
user of CARD) fails to present his CARD to MERCHANT at time of SALE,
except in the case of MAIL ORDER ("MO") or TELEPHONE ORDER ("TO") where
permitted by FNBO.
2.2 MERCHANT must date each sales draft, resulting from the use of a CARD
("SALES DRAFT") with the transaction date and should include thereon a
brief description of the merchandise and/or services sold and the price
thereof (including any applicable taxes) in detail sufficient to
identify the SALE.
2.3 MERCHANT MUST IMPRINT THE CARD, UNLESS SUCCESSFULLY READ BY A MAGNETIC
STRIPE CARD READER/TERMINAL, with printer attached. Failure to obtain a
signed and imprinted SALES DRAFT when a transaction is not captured by
swiping through a magnetic stripe reader (this includes transactions
that are key entered on such a terminal) will expose MERCHANT to a
CHARGEBACK on such a transaction regardless of the authorization that
may or may not be received.
2.4 MERCHANT shall require cardholder to sign the SALES DRAFT. The risk of
CHARGEBACK or SALE dispute is far higher on a transaction when the CARD
and the cardholder are not present at the SALE location at the time of
the SALE.
2.5 Unless specifically permitted by FNBO, goods and services purchased
must be delivered to cardholder at time of SALE.
2.6 MERCHANT shall not require cardholders to provide personal information
(such as telephone number or address) as a condition for honoring a
CARD SALE unless required by the RULES.
3. SECURITY FEATURES
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3.1 MERCHANT is required to examine one or more card security features
prior to completing a SALE. In all cases, MERCHANT will complete a SALE
only if the signature on the SALES DRAFT appears to be the same as the
signature on the CARD, and the person presenting the CARD resembles the
person depicted in the picture on the CARD, if any and that the
appropriate VISA or MASTERCARD hologram is present on CARD. MERCHANT
must also check the valid dates on the CARD to ensure that CARD is
valid and has not expired.
3.2 Specific CARD Security features:
A. VISA
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(1) The "DOVE" hologram should appear to fly when tilted.
(2) All VISA account numbers begin with a "4" and can be 13
or 16 digits long.
(3) Check that the first four digits of the embossed account
number matches the four digits printed above the account
number of the CARD.
(4) Be sure the signature panel has not been tampered with.
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(5) The "V" to the right of the expiration date will be
included with a second letter either "CV", "GV", "PV", or
"BV". The "V" should be a special letter (a "Flying V",
not a normal "V".)
B. MASTERCARD
(1) The "World" hologram should appear as two separate spheres
when tilted.
(2) All MASTERCARD account numbers begin with "51" through "55"
and are 16 digits long.
(3) Be sure that the signature panel has not been tampered with.
3.3 When the CARD is "Mag-stripe read" by an Electronic Cash Register ("ECR")
or Electronic Draft Capture ("EDC") terminal, MERCHANT must check the
CARD account number on the terminal (if displayed) against the account
number embossed on the CARD or follow such other security check as is
mandated by FNBO from time to time. If the CARD is read with a terminal
that displays the CARD number and the receipt is printed, MERCHANT shall
verify that the account number displayed on the terminal and the printed
card numbers on the receipt match the embossed numbers on the face of the
CARD. In the event that they do not match the SALE must not be completed.
Failure to follow these checks and procedures will expose MERCHANT to
chargebacks.
3.4 In the event that terminal is programmed to require MERCHANT to key the
last four (or more) digits of each CARD used for a SALE, and the terminal
indicates that the numbers keyed are not the same as those present on the
card, the SALE must not be completed.
3.5 In order to protect the integrity of the ASSOCIATIONS' systems, FNBO
reserves the right to hold funds settled by MERCHANT in the event of a
breach of AGREEMENT, irregular SALES activity, or receipt of detrimental
financial information.
4. AUTHORIZATION
4.1 On all SALES, MERCHANT shall request an authorization for the total amount
of the SALE and shall record the positive authorization response code on
the SALES DRAFT prior to completing the SALE. If MERCHANT receives a
negative authorization response, MERCHANT may not complete the SALE and may
be requested to recover the CARD, if MERCHANT can do so by reasonable
peaceful means. If MERCHANT does not recover the CARD, MERCHANT should
notify VOICE AUTHORIZATION CENTER and ask for further instructions.
4.2 MERCHANT may not, after receiving a negative response or decline on an
authorization attempt, split the SALE amount into multiple transactions in
order to obtain a valid authorization for each one, so that the separate
transactions total the original amount of the SALE.
4.3 In the event that an unsigned CARD is presented at the point of sale,
MERCHANT must request that cardholder provide proof of identification and
sign the card before completing the SALE. Identifying details of the
identification provided must be placed on the SALES DRAFT unless prohibited
by local law. In the event that the cardholder refuses to do so, the SALE
must not be completed. If the SALE is completed, MERCHANT must write the
account number and expiration date on the SALES DRAFT.
4.4 In any of the following cases, MERCHANT shall obtain authorization from
the VOICE AUTHORIZATION CENTER designated or approved by FNBO before
completing a SALES transaction:
A. Paper MERCHANTS whose SALES exceeds MERCHANT's floor limit as
established by FNBO, or amended from time to time;
B. An unsigned CARD is presented;
C. MERCHANT believes the CARD may be counterfeit or stolen or that the
SALE is in some other manner suspicious or unusual; in this situation
MERCHANT should proceed only through voice authorization procedures
and MERCHANT should state to the voice authorization clerk, "This is a
Code 10" and await further instruction.
D. In any other circumstances hereinafter established by FNBO or stated
in the RULES and/or AGREEMENT.
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4.5 If permitted in writing by FNBO, a retail store that accepts an infrequent
telephone order transaction should authorize using the above
authorization acceptance procedures. The floor limit for MO/TO
authorization is zero. In such cases the authorization DOES NOT protect
the MERCHANT from CHARGEBACKS where the cardholder disputes that the CARD
use was authorized.
4.6 MERCHANT shall indicate to the authorization center the reason for the
authorization request in any case except where the sole reason for the
request is that the SALE exceeds the MERCHANT's floor limit.
4.7 When MERCHANT requests and receives a positive authorization code,
MERCHANT shall enter such code onto the SALES DRAFT. In the event that a
negative response is obtained, the MERCHANT shall not complete the SALE
and shall, if instructed, attempt to pick up CARD (by reasonable and
peaceful means) and if successful, inform FNBO of the fact.
5. SALES DRAFT - DISTRIBUTION AND STORAGE OF INFORMATION
5.1 MERCHANT shall deliver to the cardholder at the time of a SALE a true and
completed copy of the SALES DRAFT, or suitable receipt, evidencing a
SALE involving use of CARD.
5.2 The following information must be included on the SALES DRAFT: CARD
account number; MERCHANT's DBA name; MERCHANT's city and state; amount of
SALE; SALE date and CARD expiration date.
5.3 MERCHANT shall not disclose a cardholder's account information or any
other personal information to third parties other than to MERCHANT's
agents for the purpose of completing the transaction or as specifically
required by law or by the RULES.
5.4 MERCHANT shall store in a limited access area for at least one (1) year
after the date of SALES all SALES DRAFTS and transaction records and
MERCHANT shall make and retain for at least three (3) years the original
or legible microfilm copies of both sides of all SALES DRAFTS and
transaction records. Prior to discarding, MERCHANT shall destroy or make
unreadable all material containing cardholder account numbers, card
imprints such as SALES DRAFTS and credit vouchers, vehicle leasing
agreements, and carbons.
6. RECOVERY OF CARDS
6.1 MERCHANT shall use his best effort to recover any CARD, by reasonable and
peaceful means, if:
A. The account number thereon is listed on a Electronic Exception File;
B. The printed four digits above the embossed account number do not match
the first four digits of the account number (VISA);
C. MERCHANT is advised to do so by the authorization center; or
D. MERCHANT has reasonable grounds to believe such CARD is counterfeit,
fraudulent, or stolen.
6.2 This obligation upon MERCHANT in no way authorizes a breach of the peace
or any injury to persons or property, and MERCHANT will hold FNBO
harmless from any claim arising from any injury to person or property or
other breach of peace.
7. MULTIPLE SALES AND SALES DRAFTS AND PARTIAL CONSIDERATION
7.1 Generally, all SALES accomplished at the same time should be included on
one SALES DRAFT.
7.2 MERCHANT shall not effect a SALE when only part of the account due is
included on the single SALES DRAFT except:
A. When the balance of the amount due is paid by the cardholder at the
time of the SALE in cash, by check with another CARD, or any
combination thereof; or
B. When the cardholder executes two separate SALES DRAFT in a delayed
delivery transaction, whereby a deposit is made by completion of one
SALES DRAFT and payment of the balance is
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tendered by completion of a second SALES DRAFT, conditioned upon
delivery of merchandise or performance of services. If the total
amount of both SALES DRAFTS exceeds the floor limit, authorization
must be obtained.
7.3 The use of multiple different CARDS for one purchase is permissible as
long as an individual SALE and SALES DRAFT is used for each CARD. The use
of multiple SALES on one CARD for one purchase is not permitted (this is
done to bring the value of each SALE below the authorization threshold of
the CARD Issuer). In the event that this is done the SALE may be reversed.
8. RETURNED MERCHANDISE AND ADJUSTMENTS
8.1 In the event that any merchandise, that was the subject of a SALE is
accepted for return or any services terminated or canceled, or any price
adjustment allowed by MERCHANT, the MERCHANT shall not make any cash
refund to the cardholder, but shall deliver promptly to FNBO a credit
voucher evidencing such refund or adjustments on the same CARD as the
original SALE was processed. The refund or adjustment indicated on the
credit voucher may not exceed the original SALE amount.
8.2 MERCHANT may limit its acceptance of returned merchandise or establish a
policy to make price adjustments for any SALE provided proper disclosure
is made and purchased goods and service are delivered to the cardholder at
the time of the SALE.
8.3 Proper disclosure by MERCHANT shall only be determined to have been given
at the time of the SALE if cardholder is present at the time of SALE and
words such as "NO REFUND", "EXCHANGE ONLY", or "IN STORE CREDIT ONLY" are
printed in large letters on all copies of the SALES DRAFT prior to
obtaining the cardholder's signature on the SALES DRAFT. MERCHANT may
stipulate other special circumstances or terms of the SALE on the SALES
DRAFT.
8.4 For each credit or return transaction, MERCHANT must be able to provide
FNBO with evidence of the original purchase if requested.
9. CASH TRANSACTION
9.1 MERCHANT shall not receive any payments from a cardholder with respect to
charges for merchandise or services which are included on the SALES DRAFT
resulting from the use of a CARD, nor shall MERCHANT receive money from a
cardholder and subsequently prepare a credit voucher for purpose of
affecting a deposit to the cardholder's account.
9.2 Cash disbursement by MERCHANT to a cardholder is not permitted. MERCHANT
shall not make any cash advance to an employee or principal of MERCHANT, or
family member of the same, who is a cardholder.
9.3 MERCHANT will not accept SALES from cardholders related to the business
where the primary purpose of the transaction is for the provision of
working capital to said business and not the purchase of goods and/or
services from the business.
10. RECURRING TRANSACTIONS AND QUASI CASH TRANSACTIONS
10.1 MERCHANT will not accept recurring SALE transactions where the delivery,
provision of or billing is performed on a periodic basis ("RECURRING
TRANSACTIONS") without the express written consent of FNBO.
10.2 MERCHANT shall not accept SALES for processing that are classified as
"Quasi-Cash Transactions" including, but not limited to, the sale of
Casino Gaming chips, money orders, opening deposits on financial or other
accounts, wire transfer money orders, or the issuance of Scrip.
10.3 No MERCHANT shall use accept a CARD or use a VISA and MASTERCARD
processing terminal to issue "scrip" exchangeable for cash or products or
services as a result of a SALE.
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11. PROMOTIONAL MATERIALS
11.1 MERCHANT will adequately display promotional materials provided by FNBO
to inform the public that CARDS will be honored by MERCHANT.
11.2 All uses by MERCHANT of decals, signs, printed and broadcast materials
and other promotional materials must be in conformity with the
requirements of ASSOCIATIONS.
11.3 MERCHANT may use promotional materials only to indicate that CARDS are
accepted for payment and shall not indicate, directly or indirectly, that
MERCHANT has received endorsement of any goods or services other than the
CARDS' services.
11.4 MERCHANT may not refer to the CARDS in stating eligibility for its
products, services, or membership.
12. RULES SPECIFIC TO CARDS OTHER THAN VISA AND MASTERCARD
12.1 In the event that AGREEMENT provides for the acceptance of CARDS other
than VISA and MASTERCARD, the following regulations apply specifically to
these CARDS in addition to the regulations set out above.
13. SPECIFIC CARD REGULATIONS
13.1 MERCHANT is required to comply with the specific regulations as set out
in its agreements with ASSOCIATIONS other than VISA and/or MASTERCARD
with regard to the acceptance of cards issued by such ASSOCIATIONS.
CHARGEBACKS
14. GENERAL
14.1 MERCHANT has agreed to pay FNBO for each CHARGEBACK and any ASSOCIATION
fees, fines or charges imposed on MERCHANT or FNBO associated therewith.
Such reimbursement will be accomplished by the debit of the sum(s)
involved from the MERCHANT's DEPOSITORY ACCOUNT.
14.2 Failure to comply with the RULES will reduce FNBO's ability to reverse
CHARGEBACKS and increase the likelihood of MERCHANT receiving a
CHARGEBACK.
14.3 MERCHANT may be subject to a CHARGEBACK on SALES for a minimum period of
180 days from the date the SALE was entered into the ASSOCIATION's
processing system.
14.4 FNBO agrees to mail all CHARGEBACK documentation to MERCHANT promptly to
MERCHANT's address shown on CONTRACT. MERCHANT agrees to respond promptly
to all CHARGEBACKS. If FNBO elects, at its discretion, to take action on
CHARGEBACKS after the MASTERCARD or VISA time limits have expired, such
action shall be done at additional cost.
14.5 MERCHANT agrees that it will not re-deposit SALES that have been
previously charged back and not represented. This restriction applies
whether or not the cardholder consents to such activity.
15. CHARGEBACK REASONS
15.1 The summary of reasons for CHARGEBACKS includes, but is not limited to,
an invalid CARD account number submitted by MERCHANT, or any one of the
following cardholder complaints:
A. Neither the cardholder nor a person authorized by the cardholder
received the goods or services requested;
B. The cardholder received the good or services but disputes the quality;
C. The cardholder never received credit for a returned item or a
canceled order;
D. The cardholder was charged incorrectly;
E. The amount of the SALE exceeded the Floor Limit and authorization was
not requested and obtained, or was denied;
F. The SALE was authorized but not for the correct amount;
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G. The authorization code provided is invalid;
H. The CARD was expired at the time of the SALE or had not reached its
effective date;
I. The SALES DRAFT was not signed. An exception will be made for Mail
Order and Telephone Order SALES where authorized;
J. The CARD issuer has information that a MERCHANT fraud has occurred;
K. The CARD account number and the amount of SALE is missing from SALES
DRAFT or is illegible;
L. The SALES DRAFT bears the imprint of a CARD which to MASTERCARD or
VISA, is a counterfeit CARD, as defined in their regulations, but
which is not embossed in accordance with the standards set forth in
the VISA and MASTERCARD regulations and the SALE was not authorized.
16. CHARGEBACK MONITORING PROGRAMS
16.1 In the event that MERCHANT exceeds a one (1) percent CHARGEBACK to
interchange ratio in two months out of three for Consumer Dispute
CHARGEBACKS ("CDCS") or a two and three-quarters (2.75) percent
CHARGEBACK to interchange ratio for all incoming chargebacks, MERCHANT
will be defined as a "REVIEW-MERCHANT". On notification of Review
Merchant status MERCHANT will supply FNBO with a business plan as to how
to reduce the amount of CDCs in the event that MERCHANT is unable to
reduce CDCs below one (1) percent within 120 days and maintain them at
that level for a six (6) month probationary period FNBO or VISA may
terminate MERCHANT's agreement to process SALES. In this event MERCHANT
will pay FNBO for any fine or charge levied on FNBO or MERCHANT as a
result of such classification or notification. The parameters of this
section may be amended from time to time as a result of action by
ASSOCIATIONS.
17. OTHER ASSOCIATION MONITORING PROGRAMS
17.1 In the event that MERCHANT is identified by certain ASSOCIATION
monitoring programs, the ability FNBO to reverse CHARGEBACKS can be
severely restricted.
17.2 Under normal procedures, if a MERCHANT is able to show that it complied
with the CARD ACCEPTANCE PROCEDURES by producing evidence (a SALES DRAFT)
that the CARD was present at the time of SALE and that the evidence bears
the signature of the cardholder, MERCHANT may not be liable for a SALE
that was made with a Lost, Stolen or Counterfeit CARD.
17.3 Certain Monitoring Programs review the number of Lost, Stolen and
Counterfeit CARDS accepted by MERCHANT in its normal course of business
as well as the percentage of CARDS used for SALES that were not read
electronically by terminals or ECRs. The purpose of these Programs is to
reduce the use of Lost, Stolen and Counterfeit CARDS.
17.4 In the event that MERCHANT is identified under these PROGRAMS as
exceeding the acceptable threshold value of such CARDS, MERCHANT may
become liable for CHARGEBACKS and SALES on Lost, Stolen, or Counterfeit
CARDS regardless of the CARD ACCEPTANCE PROCEDURES followed, and AGREEMENT
may be terminated on notice by FNBO.
UNIQUE BUSINESS REQUIREMENTS
18. MAIL ORDER AND TELEPHONE ORDER MERCHANTS
18.1 MERCHANTS may not accept MO/TO SALES unless AGREEMENT specifically refers
to MO/TO SALES in the description of BUSINESS. If this is not the case,
MERCHANT should contact FNBO if they wish to accept MO/TO SALES and
provide descriptions of product types and marketing methods. FNBO
reserves the right to refuse MERCHANT permission to accept MO/TO SALES.
18.2 In the event that MERCHANT is specifically authorized to accept MO/TO
SALES by FNBO, no SALE shall be submitted for processing with FNBO prior
to shipping of the product purchased to the cardholder, unless
specifically authorized in AGREEMENT.
18.3 MO/TO SALES do not require that the cardholder's signature be on the
SALES DRAFT. MERCHANT is required to obtain the Valid Dates for each CARD
used for a SALE. The Expiration Date must be submitted as part of the
Authorization Inquiry.
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18.4 In the event that MERCHANT supplies goods and/or services under a
Pre-Authorized Order, it shall not charge a cardholder for goods after
receiving notice from a cardholder that that the authorization is
canceled. In the absence of such data, the following substitute data shall
be inserted: for VISA "1111" and MASTERCARD "1099".
18.5 The receipt of a valid Authorization does not protect MERCHANT from
CHARGEBACKS on SALES for the Unauthorized Purchaser reason code. The
supply of shipping documents indicating the address the goods were shipped
to and a signature of an individual (even cardholder) will not normally be
sufficient to reverse an Unauthorized Purchaser reason code.
18.6 MO/TO MERCHANTS are encouraged to investigate the CHARGEBACK protection
attributes of the various Address Verification Services available from the
ASSOCIATIONS.
19. VEHICLE RENTAL AUTHORIZATION PROCEDURES
19.1 A special authorization procedure is available for the use of the MERCHANT
if MERCHANT estimates the transaction amount based upon cardholder's
intended rental length at time of rental, the applicable rental rate, tax,
and/or mileage rates. Such estimated transaction amount shall not include
ancillary charges representing amounts to cover potential vehicle damages
or insurance deductibles when cardholder waives insurance at time of
rental.
19.2 MERCHANT shall record on the SALES DRAFT the date, amount, and all
authorization approvals obtained.
19.3 MERCHANT shall disclose such amount authorized to cardholder at the time
of rental.
19.4 Subsequent Authorization:
A. If no authorization was obtained at time of rental and MERCHANT,
based upon cardholder's actual charges later estimates the
transaction amount will exceed the applicable floor limit, MERCHANT
may obtain an authorization approval code for the new estimated
amount.
B. MERCHANT may obtain authorization for additional amounts (not
cumulative of previous amounts) at any time on or between the vehicle
rental check-out date and check-in date, as necessary. MERCHANT may
not seek authorization for, nor charge to cardholder charges for
traffic violations, parking tickets, or other related items.
Additional authorization is not necessary if the sales transaction
does not exceed the applicable floor limit or 115 percent of the sum
of the authorized amounts.
20. PAPER PROCESSING MERCHANTS
20.1 Paper Processing MERCHANTS shall authorize by using the established Floor
Limits. Any MERCHANT that wishes to accept a sales transaction under the
established Floor Limits, and which is not authorized, is liable for the
resulting CHARGEBACKS from those CARD numbers listed on the Electronic
Exception File.
20.2 In the case of a MERCHANT depositing paper drafts, such drafts shall be
deposited with FNBO within five (5) days of the transaction or SALE date.
21. EXPRESS PAYMENT SERVICES ("EPS/QPS")
21.1 Any "Fast Food", motion picture theater, or parking lot merchant that
wishes to participate in the VISA or MASTERCARD EPS/QPS program must first
be in possession of a signed EPS/QPS Addendum with FNBO.
21.2 This Addendum must be in place prior to the offering of the program.
22. LODGING MERCHANTS
22.1 Hotel Management Companies are responsible for all CHARGEBACKS and FEES
for hotels managed at the time of the SALE.
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22.2 VISA Hotel Services: Any MERCHANT that participates or wishes to
participate in any of the VISA Hotel Services (the "Services"), namely the
Advanced Lodging Deposit Service, the Priority Check Out Service, or the
Cash Disbursement Service must be in possession of a current VISA Hotel
Service addendum to their AGREEMENT. This Addendum covers all the
contractual and operational requirements to implement the Services and
must be in place before the offering of the Services by MERCHANT to
cardholders.
22.3 VISA Reservation Service: Any MERCHANT which accepts CARDS to guarantee
reservations must do so in accordance with the following requirements:
A. MERCHANT must accept all VISA CARDS.
B. MERCHANT must inform the cardholder that accommodations will be held
until check out time the following day unless canceled by 6:00 pm
MERCHANT's time, on the scheduled arrival date. If a MERCHANT
requires a cancellation time prior to 6:00 pm MERCHANT's time, on
the scheduled arrival date, the cancellation date and time may vary
but must not exceed 72 hours prior to the scheduled arrival date and
the cardholder must be informed of this time when making the
reservation. If, in such a situation, a reservation is made within
72 hours of scheduled arrival, the cancellation time of 6:00 pm
MERCHANT's time on the scheduled arrival date applies.
C. MERCHANT will obtain the cardholder's account number, expiration
date, and name embossed on the CARD. MERCHANT must confirm this
information by reciting it back to the cardholder. Advise the
cardholder that if he has not checked in by checkout time the
following day after his scheduled arrival date and the reservation
was not properly canceled, the cardholder will be billed for one
night's lodging plus applicable taxes.
D. MERCHANT must quote to cardholder the following information: i) rate
of reserved accommodation; ii) MERCHANT name and address; and iii)
Confirmation Code (advising that it be retained). If requested, the
MERCHANT will provide the above information in written form along
with the provisions of the VISA reservation services relating to the
cardholder's obligations related to the accommodation reserved.
E. If cardholder complies with the cancellation procedures above,
MERCHANT must accept all cancellation requests and provide
cardholder with a cancellation code and advise that it must be
retained in order to protect cardholder's rights in case of dispute.
If requested, MERCHANT must provide cardholder with written
confirmation of all this information including the CARD information.
F. If cardholder does not claim accommodation that has been reserved
under these procedures or canceled prior to the specified
cancellation time, the room(s) must be held available in accordance
with the reservation. If the cardholder does not cancel the
reservation or check in within the prescribed time, MERCHANT will
deposit a SALES DRAFT for one night's lodging plus applicable tax,
indicating the cardholder's account number, expiration date, and
name embossed on the CARD and the words "NO SHOW" on the cardholder
signature line. MERCHANT should then follow the required
authorization procedures for hotel transactions.
G. If accommodations that were guaranteed under this service are
unavailable, MERCHANT must provide cardholder with: i) at least
comparable accommodations for one night at another establishment;
ii) provide transportation to the location of the alternative
establishment; and iii) if requested, provide cardholder with a
three (3) minute telephone call and forward all messages and calls
to the location of the alternate establishment. These services shall
be provided at no cost to cardholder.
H. If a CHARGEBACK occurs and involves a dispute between the Lodging
MERCHANT and the cardholder over cancellation of reservations or
advance deposits, FNBO may request resolution of the dispute by VISA
or MASTERCARD. If the dispute is resolved successfully, FNBO will
charge the MERCHANT, and the MERCHANT agrees to pay FNBO a
"Resolution Fee."
23. PRE-AUTHORIZED HEALTH CARE TRANSACTIONS
23.1 Any MERCHANT that participates in the VISA Pre-authorized Health Care
Program must be in possession of a current Addendum for this program.
23.2 This Addendum must be in place prior to the offering of the Program by
MERCHANT.
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24. VISA SUPERMARKET PROGRAM
24.1 Any MERCHANT that wishes to participate in the VISA Supermarket Incentives
Program must be in possession of the FNBO current addendum for this
program.
24.2 This addendum must be in place prior to the offering of the Program by
MERCHANT.
25. ELECTRON CARD PROGRAM
25.1 At its option, a MERCHANT may accept Electron Cards. If a MERCHANT chooses
to accept Electron Cards, it must accept all Electron Cards when properly
presented. In addition, the MERCHANT must:
A. Display the Electron symbol;
B. Obtain authorization;
C. Use a Point of Transaction Terminal for authorization and data
capture; such Point of Transaction device must print a receipt;
D. Accept Electron Cards only for "face to face" transactions in which
both the CARD and cardholder are present; and
E. Process all transaction resulting from CARDS bearing an Electron
symbol as Electron transactions and be subject to all VISA
International Operating Regulations governing the Electron Program.
OPERATIONAL REQUIREMENTS
26. MERCHANT NAME AND ADDRESS
26.1 All forms submitted to FNBO must bear both the corporate and "Doing
Business As" ("DBA") name.
26.2 FNBO expects to sign all corporate entities with the signature of a
corporate officer.
26.3 MERCHANT will inform FNBO immediately of any change in:
A. Corporate or "DBA" name and location address
B. The information contained on MERCHANT's imprinter plates
27. IMPRINTERS
27.1 All MERCHANTS must be in possession of a working imprinter, supply of
blank sales drafts and an accurate imprinter plate showing their DBA name,
city, state, and FNBO merchant number. In the event that MERCHANT is not
in possession of the above equipment, MERCHANT must contact FNBO to obtain
such equipment.
27.2 Failure to be in possession of the equipment and supplies listed above
will seriously increase MERCHANT's liability for CHARGEBACKS where
transactions cannot be mag-stripe read by a terminal and, as a result, are
key entered and a signed imprinted SALES DRAFT not completed.
28. INCORPORATION
28.1 FNBO and MERCHANT are parties to an agreement for the processing of SALES
("AGREEMENT") into which these RULES (as amended from time to time) have
been incorporated by reference. The capitalized terms in AGREEMENT will
have the same meaning in RULES.
29. USE OF NON-FNBO TERMINALS AND/OR SOFTWARE
29.1 If MERCHANT elects to use the terminal of AMEX or Discover or other third
party providers of software (such as a POS or Accounting System Vendors)
to capture and transmit VISA and MASTERCARD SALES to FNBO, MERCHANT
assumes full responsibility and liability for third party providers
failure to comply with the RULES. The third party provider is the source
for information regarding authorizations and CHARGEBACKS that may be
needed by FNBO. Certain CHARGEBACKS require authorization information to
reverse. MERCHANT is responsible to obtain this information from third
party provider. FNBO is not liable for SALES that were not received by it.
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30. COMMUNICATION VENDORS
30.1 MERCHANT understands that in the event FNBO terminals are used by
MERCHANT, the communications vendor is not responsible for losses
arising from the transactions processed using the vendor's service.
31. EFFECT OF TERMINATION OF PROCESSING AGREEMENT
31.1 In the event that AGREEMENT is terminated by FNBO for cause, FNBO is
required by ASSOCIATIONS to file the name and address of MERCHANT and
MERCHANT's principals on the "Combined Terminated Merchant File."
31.2 In the event that AGREEMENT is terminated for cause and MERCHANT is
obligated to MERCHANT for sums due and the principals of MERCHANT are
liable for such debts, a negative credit report may be submitted to a
credit reporting agency.
32. MEMBER SERVICE PROVIDER SERVICES
32.1 If MERCHANT is using a Member Service Provider's terminal, (i.e. dial
terminal or equivalent sales capture device), and the Member Service
Provider is providing the customer service, then such Member Service
Provider is a separate entity and is not an agent of FNBO.
32.2 MERCHANT agrees that FNBO's obligation to pay MERCHANT for SALES
captured by use of non-FNBO terminals is limited to the amount, less
DISCOUNT, received by FNBO from the Member Service Provider.
32.3 Any problems or complaints regarding such should be reported in writing
to Member Service Provider Coordinator, First National Bank of Omaha,
P.O. Box 3190 Omaha, Nebraska 68102-0190.
32.4 MERCHANT shall understand the AGREEMENT is between FNBO and MERCHANT.
Issues involving Member Service Provider shall be dealt with independent
of FNBO. In the event that issues are unresolved and relate to services
provided under the AGREEMENT, FNBO should be notified. Failure to pay
FNBO due to issues with Member Service Provider is not permitted.
33. SUBMISSION OF ALL SALES
33.1 In order to ensure that there is no duplicate processing of SALES by
multiple processors, MERCHANT agrees to submit all SALES from the
BUSINESS originating within the United States of America to FNBO under
AGREEMENT.
33.2 Subsequent Amendments to these RULES:
A. The AGREEMENT provides that MERCHANT will comply with the terms of
RULES as if they were specific terms of AGREEMENT set out therein.
Due to changes in the processing industry and the requirements of the
ASSOCIATIONS and FNBO, the RULES are amended from time to time and
amendments to these RULES are distributed to MERCHANT at the address
currently on record for the distribution of statements.
B. Submission of SALES at any time after seven (7) days from the date of
distribution of RULES to MERCHANT's Address for processing
statements, shall be evidence that MERCHANT has received the amended
RULES and has agreed to abide by them.
34. MERCHANT STATEMENTS
34.1 MERCHANT will receive periodic statements reflecting activity on its
account. MERCHANT agrees to examine and reconcile its MERCHANT statement
and notify FNBO of any error or discrepancy. Unless MERCHANT provides
written notice to FNBO of any error or discrepancy within ninety (90)
days of the statement date, the statement shall be deemed correct for
all purposes and FNBO shall not be liable for any error or discrepancy
reflected thereon. No legal proceedings or action may thereafter be
brought against FNBO to recover for any error or discrepancy.
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FIRST AMENDMENT TO THE MERCHANT TRANSACTION PROCESSING AGREEMENT
THIS Amendment ("AMENDMENT"), by and between FIRST NATIONAL BANK OF OMAHA
("FNBO"), a national banking association with principal offices at One First
National Center, Omaha, Nebraska, and CyberGold, Inc., ("MERCHANT"), a
California corporation with offices at 2921 Adeline St., Berkeley, Calif.
94703, shall become effective on the date executed by a duly authorized
representative of FNBO. FNBO and MERCHANT shall be collectively known hereafter
as the "PARTIES."
WHEREAS, FNBO and MERCHANT are parties to a Merchant Transaction Processing
Agreement, ("AGREEMENT"), of certain date under which FNBO provides processing
and other services regarding credit card sales transactions, ("SALES"), subject
to the terms and conditions more fully set out in AGREEMENT.
WHEREAS MERCHANT desires to have FNBO participate in the Pilot test ("PILOT")
of Visa card usage by MERCHANT for payments to MERCHANT's customers residing in
the United States for viewing commercial messages transmitted over the Internet
and for related activities as described in MERCHANT's program ("PROGRAM") which
is attached as Exhibit 1 to this AMENDMENT, and incorporated herein by this
reference.
1. GENERAL:
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1.1 Capitalized terms which are not defined herein shall have the same
meaning as when defined in the AGREEMENT.
1.2 MERCHANT agrees to operate in accordance with Exhibit 1 which describes
the procedures used for the PROGRAM. If any deviation is made to the
PROGRAM, MERCHANT must notify FNBO in writing at least sixty (60) days
before the implementation to ensure that the change does not materially
change any Visa procedure.
1.3 MERCHANT understands that special conditions will apply to the PILOT
including the processing arrangements necessary to avoid VisaNet and
Visa issuers systems changes.
1.4 MERCHANT agrees that the PILOT will include the following products: Visa
Check Card and Visa Credit Card. All Visa commercial cards and all
non-U.S. Visa products will be excluded.
1.5 MERCHANT shall use the personal data provided by the cardholder during
the registration process only for the purpose of providing the PROGRAM.
MERCHANT shall obtain the cardholder's consent for any other
disclosures of cardholder data.
1.6 MERCHANT agrees to comply with all applicable laws and regulations.
2. PAYMENT OF SUMS DUE:
- ----------------------------
2.1 MERCHANT shall deposit transactions with FNBO on a daily basis.
MERCHANT agrees that under no conditions will transactions be created
more than thirty (30) days after the initial cardholder's use in a
given period; nor will such transactions pass through VisaNet more than
thirty-five (35) days after the initial cardholder's use in a given
period.
2.2 MERCHANT and FNBO shall establish one (1) designated account,
("DESIGNATED ACCOUNTS"), for the credit and debit of sums between the
PARTIES. MERCHANT agrees to maintain a minimum amount of ________ in
each account and if the total amount in any account becomes less than
this sum, FNBO may debit another account or MERCHANT may deposit funds
so that the balance required by FNBO is maintained. If this AGREEMENT
is terminated for any reason, MERCHANT agrees to maintain these
accounts for a period of six (6) months in order to secure the
obligation of MERCHANT hereunder unless otherwise agreed in writing by
the PARTIES.
2.3 MERCHANT agrees to pay FNBO the FEES set out in Exhibit 2, attached
hereto and incorporated herein by this reference. FNBO shall deduct
FEES from incoming transactions or debit the same from MERCHANT's
DESIGNATED ACCOUNT.
2.4 During the PILOT, MERCHANT shall (i) create a separate transaction for
any individual payment of twenty dollars ($20.00) or more and (ii) be
allowed to aggregate small value transactions until either twenty
dollars ($20.00) has been accumulated or thirty (30) days have passed
since the initial cardholder's use in a given period. When the dollar
amount or time limit has been reached, MERCHANT will create a
transaction for deposit with FNBO.
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2.5 MERCHANT agrees that no one cardholder shall receive more than one hundred
dollars ($100.00) per month in one Visa account during the PILOT, in order
to control fraud.
2.6 MERCHANT shall offer Visa cardholders a transfer of money into their
accounts. MERCHANT shall not accept Visa cards for purchases or allow
transfers from cardholders' accounts.
2.7 MERCHANT understands that credit card issuers may apply the credit to the
outstanding balance and MERCHANT shall offer only to transfer money into
the account and not to the cardholder. MERCHANT must make appropriate
disclosures to the cardholders.
2.8 If an Issuer returns a transaction to FNBO, MERCHANT is liable for any cost
and must resolve the disposition of the transactions directly with its
customers.
2.9 MERCHANT agrees that it is liable for all FEES, costs, fines, penalties,
charges, and or any administrative or legal fees and costs associated with
the PROGRAM or the PILOT.
3. TERM AND TERMINATION:
3.1 The PILOT shall commence on such date as the PARTIES agree upon in writing
and will terminate after twelve(12) full months of operation unless
terminated sooner in accordance with this AGREEMENT. At the end of PILOT,
FNBO will review the results to determine whether to allow the PROGRAM to
continue. FNBO has no obligation to continue the PROGRAM.
3.2 FNBO may terminate this PILOT on thirty (30) days notice.
3.3 MERCHANT understands that Visa may terminate this PILOT on thirty (30) days
notice in the event Visa determines, in its sole discretion, that
cardholder disputes and service events occur with greater than acceptable
frequency. If the PILOT is terminated by Visa, FNBO is not obligated to
continue with the PILOT.
3.4 MERCHANT agrees to a two (2) year exclusive arrangement with VISA, U.S.A.,
for the purpose of accepting the appropriate VISA products. This exclusive
agreement means that MERCHANT will not accept any card associated with
Mastercard, American Express, and Discover products in MERCHANT's PROGRAM.
If Visa cancels the use of VISA products, this exclusive arrangement is
terminated automatically.
4. OPERATING CONSIDERATIONS:
4.1 MERCHANT agrees to monitor performance and provide volume statistics for
such things as customer service visits to the MERCHANT web site and
telephone calls to the 800 number customer service desk.
4.2 MERCHANT shall use the best industry practices for the security of its
procedures and the interface with the Visa system. This includes but is not
limited to the registration process, protection of MERCHANT transactions on
the Internet, and database protection. MERCHANT must use a separate
procedure from the standard MERCHANT Internet registration process to
obtain the cardholder's account number and expiration date in order to
protect the Visa account number. MERCHANT shall have this procedure
approved by Visa. MERCHANT shall use the best industry practices to protect
the database of Visa account numbers from both internal and external
compromise. MERCHANT agrees that all appropriate industry and account
procedure controls will be in place at all times.
4.3 MERCHANT may use the VisaNet authorization system or Visa's address
verification service without additional cost.
4.4 MERCHANT must inform cardholders in a conspicuous manner that all disputes
are to be resolved by MERCHANT, either through its web site or toll-free
number, and not by the issuer.
4.5 MERCHANT shall monitor activity by Visa cardholders and report the results
to FNBO on a monthly basis, including but not limited to, customer service
hits on the Internet site and 1(800) service calls.
4.6 MERCHANT agrees to use its best efforts to implement the Secure Electronic
Transactions ("SET") procedures on the Internet in a timely manner once
they are available for general use.
4.7 MERCHANT agrees to establish a hyperlink to a Visa site to assist Visa,
U.S.A., in downline loading software to first time Visa cardholders who are
registering for PROGRAM and who do not have a digital signature.
4.8 MERCHANT agrees to work with Visa, U.S.A., in defining appropriate
procedures and make its best effort to assist Visa in the registration
process for Internet merchants.
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4.9 MERCHANT will supply Visa, U.S.A., with a copy of its registration template
so that Visa U.S.A. may evaluate the overlap between SET cardholder
registration data requirements and MERCHANT's registration data
requirements.
5. OTHER CONSIDERATIONS:
5.1 MERCHANT agrees that all marketing information, including but not limited
to press or news releases dealing with AGREEMENT or the PROGRAM must be
approved by FNBO prior to the release of any such information.
5.2 Under normal business conditions, MERCHANT will be able to inform the
public that it accepts the agreed-upon Visa products. MERCHANT agrees that
no expressed or implied endorsement by Visa or FNBO of MERCHANT or its
PROGRAM can be claimed or implied. Nothing in this AGREEMENT grants
MERCHANT the right to use the Visa marks without the express written
consent of Visa, U.S.A. Nothing in this AGREEMENT grants MERCHANT the right
to use the FNBO trademarks without the express written consent of FNBO.
Upon termination of this AGREEMENT, MERCHANT shall immediately cease use of
all Visa or FNBO marks.
5.3 This AMENDMENT and AGREEMENT constitutes the entire understandings of the
PARTIES and supersedes all prior contracts, agreements, and negotiations
between the PARTIES whether verbal or written, as to the matter contained
herein.
IN WITNESS WHEREOF, the PARTIES hereto have caused this AGREEMENT to be
executed by their duly authorized officers, effective as of the date executed
by FNBO.
First National Bank of Omaha CyberGold Inc.
By: /s/ First National Bank of Omaha By: /s/ A. NATHANIEL GOLDHABER
------------------------------------- ---------------------------------
Print Name: First National Bank of Omaha Print Name: A. NATHANIEL GOLDHABER
----------------------------- -------------------------
Title: Executive Vice President Title: President
---------------------------------- ------------------------------
Date: July 21, 1997
-----------------------------------
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EXHIBIT 1
The PROGRAM description
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THE CYBERGOLD PROGRAM
- --------------------------------------------------------------------------------
CyberGold is an Internet direct marketing product that allows advertisers
to draw consumers to their content by paying them directly for their active
attention on the Internet.
CyberGold can offer Visa cardholders a bonus - the opportunity to earn cash
on the Internet, transfer it to their Visa card and spend it.
THE CONSUMER CYBERGOLD EXPERIENCE
1) Consumers are alerted to a CyberGold reward opportunity by seeing a
CyberGold coin symbol; initially only on another Internet site and
eventually on our CyberGold site where consumers will go to view ads
presented to them based on their demographic profiles as well. The
coins direct consumers' attention to the advertisers content/message.
2) Consumers read and then demonstrate their understanding of the
advertiser's message by completing an attention test and interacting
with content/message. This could include their answering questions on
the content, playing an interactive game or completing a survey. They
could also receive an instant rebate for buying on-line. On
successful completion they are eligible to receive their reward.
3) First time users of the system are directed to the CyberGold Web site
(if they're not already there) to register. They choose a login name
and password. They then enter identity information including their
name, email and home address and phone number. Once this step is
complete, their CyberGold reward is automatically deposited in their
CyberGold account.
4) Once consumers have registered, they have access to their CyberGold
account on the CyberGold site through their login name and password.
Their account aggregates payments from multiple advertisers and
opportunities. Consumers can get item-level details of all CyberGold
transactions at the CyberGold site.
5) Consumers can transfer monies from their CyberGold account; today to
their bank account, into a CyberCash wallet or donate to charity.
Tomorrow they will be able to transfer to their Visa account.
CYBERGOLD/VISA TRANSFERS
o Transactions between CyberGold and Visa will be transmitted through a
secure channel that will meet 100% of Visa's requirements.
o Consumers can be given the option of entering their Visa account
number every time they request a transfer or leaving it "in Trust"
with CyberGold in which event it will be secured as bank account
numbers and passwords are currently secured.
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o Consumers can be limited to crediting their Visa account either by a
minimum dollar amount or time frame or both as selected by Visa; for
example, once per month or with a $20 minimum.
SECURITY
o All financial transactions between the consumer and CyberGold are
encrypted using SSL and DES technology.
o CyberGold's financial databases are protected through triple firewalls,
Sybase stored procedure database security and encoded account numbers.
o All reports, printed or electronic, have sensitive information removed
automatically before they are created.
o The Databases are physically secure in a locked facility with 24 hour
security.
o All backup tapes are subject to the same security applicable to computers
containing the information.
o All financial transactions are separately logged and tracked.
SYSTEM PERFORMANCE:
o High volume: The system is architected to handle 300 transactions per
second with an essentially unlimited number of user accounts. CyberGold
is projected to handle $4 million in payments in 1997, over $20 million
in 1998 and over $100 million by the year 2000.
o Scalability: CyberGold currently features multiple, redundant high
performance UNIX servers for handling transactions. The architecture is
fully scaleable - performance can be ramped up merely by adding
additional hardware.
CUSTOMER SERVICE AND AUDITS
o Customer service: Consumers can contact CyberGold 24 hours a day through
CyberGold's on line Customer Service System which is based on Lotus
Notes. Credits to cardmember's accounts list www.cybergold.com as the
merchant to remind consumers to contact CyberGold's web site where they
will be able to review item-level detail to determine for themselves the
state of their account and the amount of the Visa transfer. All account
inquires are handled through CyberGold's centralized customer service
database.
o Auditing: Auditing procedures are reviewed by Arthur Andersen & Co.
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EXHIBIT 2
FEES
MERCHANT agrees to pay FNBO the following:
1. DISCOUNT Rate: [***]* % + $[***]* per item.
2. Monthly Minimum fee: $[***]* for first two months
(begins when FNBO receives first $[***]* for next two months
transaction from MERCHANT) $[***]* for next two months
$[***]* for next two months
$[***]* for next two months
$[***]* per month thereafter
3. Service/Programming fee: $[***]*, one time fee
4. Chargeback fee: $[***]* per chargeback
5. Rejected Item fee: $[***]* per rejected item at Visa
6. Retrieval fee: $[***]* per ticket retrieval request
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* Confidential Treatment Requested. Confidential portion has been filed
with the Securities and Exchange Commission.