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Home My WebLink About15 - Amendment to PSA for Printing, Mailing and Online Presentment and Authorization to Execute Documents for Credit-Card Pass-Through FeesQ �EwPpRT CITY OF s NEWPORT BEACH `q44:09 City Council Staff Report April 29, 2025 Agenda Item No. 15 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Jason AI -Imam, Finance Director/Treasurer - 949-644-3126, jalimam@newportbeachca.gov PREPARED BY: Jessica Kan, Revenue Manager - 949-644-3153, jkan@newportbeachca.gov TITLE: Amendment No. One to the Professional Services Agreement with Infosend, Inc. for Printing, Mailing and Online Presentment and Authorization to Execute Documents for Credit -Card Pass -Through Fees Staff recommends an amendment to the existing contract with Infosend, Inc. to increase the contract's not -to -exceed amount by $182,000 to accommodate the additional printing and mailing costs resulting from the City of Newport Beach's transition from bi-monthly to monthly utility billing. Additionally, staff is seeking authorization for the city manager and/or her designee to execute necessary documents with merchant services providers to implement pass -through credit card fees for utility payments. RECOMMENDATIONS: a) Determine this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly; b) Approve Amendment No. One to the Professional Services Agreement with Infosend, Inc. for Document Printing, Mailing Services and Online Presentment; and c) Authorize the City Manager and/or her designee to execute documents with the merchant service providers to implement pass -through credit card fees for utility payments. DISCUSSION: For more than 10 years, the City has contracted with InfoSend for printing, mailing, email invoicing, online presentment, and payment services for utility bills and other City services. Currently, the City bills for water, sewer, business licenses, alarms, and other services. The majority of these billings are for utilities, covering approximately 26,000 accounts. 15-1 Amendment No. One to the Agreement with Infosend, Inc. for Printing, Mailing and Online Presentment and Authorization to execute documents for credit-card pass -through fees April 29, 2025 Page 2 Historically, these accounts were billed bi-monthly, with half of the accounts billed each month. With the transition to monthly billing, the number of utility invoices processed will increase to 26,000 every month. The City's current agreement with InfoSend, approved by the City Council for a not -to -exceed amount of $703,300, was based on a bi-monthly billing cycle. Due to the transition to monthly billing, additional costs for printing, mailing and online presentment services are necessary. Staff recommends increasing the not -to -exceed contract amount by $182,000, bringing the total to $885,300 for the remaining term of the contract, which expires on December 31, 2025. Additionally, the City plans to implement pass -through credit card fees for utility payments. This initiative would allow the City to recover the costs of processing credit card payments by passing the fees directly to those customers who pay by credit card. Staff is requesting City Council authorization for the city manager and/or her designee to execute the necessary documents with merchant services providers to facilitate this process. For utility payments, merchant services are primarily provided by PACE, i3 Verticals, and J.P. Morgan Chase. FISCAL IMPACT - The $182,000 increase in the not -to -exceed contract amount will cover additional costs for printing, mailing and online presentment through December 2025, resulting from the transition from bi-monthly to monthly billing. Funding for the transition to monthly billing was included in the FY 2024-25 Adopted Budget; therefore, no budget amendment is required. The contract is primarily funded by the General Fund and the Water Fund, with the majority of utility billing costs paid from the Water Fund. Additionally, the implementation of pass -through credit card fees for utility payments will result in cost savings. These savings will be credited to the respective funds that were originally charged the fees, with the majority credited to the Water Fund. For example, in FY 2024-25, the City budgeted $500,000 for credit card fees in the Water Fund. With the new pass -through model, these funds will now become savings to the Water Fund. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. 15-2 Amendment No. One to the Agreement with Infosend, Inc. for Printing, Mailing and Online Presentment and Authorization to execute documents for credit-card pass -through fees April 29, 2025 Page 3 NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENTS: Attachment A — Amendment No. One Attachment B — i3 Verticals Application for Merchant Account and Agreement Attachment C — PACE Merchant Account and Agreement — Credit Card Services 15-3 Attachment A Amendment No. One to Professional Services Agreement with Infosend, Inc. for Document Printing, Mailing Services and Online Presentment 15-4 AMENDMENT NO. ONE TO PROFESSIONAL SERVICES AGREEMENT WITH INFOSEND, INC. FOR DOCUMENT PRINTING, MAILING SERVICES AND ONLINE PRESENTMENT THIS AMENDMENT NO. ONE TO PROFESSIONAL SERVICES AGREEMENT ("Amendment No. One") is made and entered into as of this 29th day of April, 2025 ("Effective Date"), by and between the CITY OF NEWPORT BEACH, a California municipal corporation and charter city ("City"), and INFOSEND, INC., a California corporation ("Consultant"), whose address is 4240 E. La Palma Ave, Anaheim, CA 92807, and is made with reference to the following: RECITALS A. On January 1, 2020, City and Consultant entered into a Professional Services Agreement (Contract No. C-8614-1) ("Agreement") to provide document printing, mailing services and online presentment of municipal billing statements and other documents ("Project"). B. The parties desire to enter into this Amendment No. One to update the Consultant's designated project manager and to increase the total compensation. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: 1. COMPENSATION TO CONSULTANT Section 4.1 of the Agreement is amended in its entirety and replaced with the following: "City shall pay Consultant for the Services on a time and expense not -to - exceed basis in accordance with the provisions of this Section and the Schedule of Billing Rates attached hereto as Exhibit B and incorporated herein by reference. Consultant's compensation for all Work performed in accordance with this Agreement, including all reimbursable items and subconsultant fees, shall not exceed Eight Hundred Eighty Five Thousand Three Hundred Dollars and 00/100 ($885,300.00), without prior written authorization from City. No billing rate changes shall be made during the term of this Agreement without the prior written approval of City." The total amended compensation reflects Consultant's additional compensation for additional Services to be performed in accordance with this Amendment No. One, including all reimbursable items and subconsultant fees, in an amount not to exceed One Hundred Eighty Two Thousand Dollars and 00/100 ($182,000.00). 2. PROJECT MANAGER Section 5.1 of the Agreement is amended in its entirety and replaced with the following: "Consultant shall designate a Project Manager, who shall coordinate all phases of the Project. This Project Manager shall be available to City at all reasonable times during the Agreement term. Consultant has designated Kelly Law to be its Project Manager. Consultant shall not remove or reassign the Project Manager without the prior 15-5 written consent of City. City's approval shall not be unreasonably withheld with respect to the removal or assignment." 3. INTEGRATED CONTRACT Except as expressly modified herein, all other provisions, terms, and covenants set forth in the Agreement shall remain unchanged and shall be in full force and effect. [SIGNATURES ON NEXT PAGE] Infosend, Inc. - Page 2 15-6 IN WITNESS WHEREOF, the parties have caused this Amendment No. One to be executed on the dates written below. APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Date: S{6gq z 5 B y : �---� _— Aaron C. Harp City Attorney ATTEST: Date: CITY OF NEWPORT BEACH, a California municipal corporation Date: an Joe Stapleton Mayor CONSULTANT: INFOSEND, INC., a California corporation Date: By: Leilani i. Brown Mahmood Rezai City Clerk Chief Executive Officer Date: By: Rusteen Rezai Chief Financial Officer [END OF SIGNATURES] Infosend, inc. Page 3 15-7 Attachment B i3 Verticals Application for Merchant Account and Agreement ACH/Check Services 15-8 3 VERTICALS APPLICATION•'M ERCHANT ACCOUNT AND AGREEMENT Bankcard Merchant # ISO Name ISO # Agent Name Pace Payment Systems I nfoSend MERCHANT•' ` • Business LEGAL Name City of Newport Beach Tax ID # (required, 9 digits) 95-6000751 Business DBA Name (if different from legal name) Company Website LIRL www.newportbeachca.gov Business DBA Physical Address 100 Civic Center Drive Business Mailing Address 100 Civic Center Drive DBA City, State and Zip Code Newport Beach, CA 92660 Mailing City, State and Zip Code Newport Beach, CA 92660 Business Phone 949-644-3143 Business Fax 949-644-3073 Contact Person Jessica Kan Title Revenue Manager Email jkan@newportbeachca.gov Alternate Contact Person Meg Walsh Title Fiscal Specialist Email mwalsh@newportbeachca.gov Type of Ownership: Government Total Time in Business Years Months Time in Business at This Location Years Months CONTROLLING ` ` ' Name Title Residential Address City, State, & ZIP Code Phone Social Security Number (SSN) Date of Birth (MM/DD/YYYY) CHECK INFORMATION Average Check/ACH Amount: $ 229.26 Average Number of Checks/ACH Monthly: 9,000 Maximum Check/ACH Amount Requested: $ 30,000.00 Estimated Monthly Check/ACH Volume: $ 2,500,000.00 PRODUCT I•' ` • 1. Describe the products) or service(s) being sold: 2. Describe how check/ACH services are to be used (if different than above): 3. How are products delivered? 4. Describe merchant's return / refund policy: 5. Describe advertising/sales/marketing procedures: ❑ Inbound customer calls ❑ Outbound customer calls ❑ Print Advertisements ❑ Point of Sale (Face -to -Face) ❑ Other: ❑ Internet Advertisements ❑ Website ❑ Direct Mail ❑ Tv TRANSACTION DESCRIPTOR Company Name (as it should appear on consumer Bank Statement) Company Phone (as it should appear on consumer Bank Statement) City of Newport Beach 949-644-3141 ❑N Completed Application Voided Check or Bank Letter ❑■ CHECKS — BY—WEB(WEB) ❑■ Bill Pay (existing customers) ❑ E-Commerce $ .35 Transaction ($0 - $9999.99) NA % Discount Rate $ NA Batch $ 35 Transaction ($10,000+) $ 3.50 Return $ NA Reversal FEE TYPE FEE TYPE $ NA Monthly Service Fee $ NA Monthly Network Compliance Fee $ NA Monthly Paya Services Virtual Terminal Fee $ NA Termination Fee (for administrative processing) 73 Eglin Pkwy NE, Suite 301, Fort Walton Beach, FL 32548 Application for Merchant Account —Check and ACH Processing Rev. 01232019 Page 1 of 8 PLEASE NOTE: The complete Merchant Agreement includes this Application and the Terms and Conditions on six (6) additional pages. 15-9 CUSTOMER•• • •D How is the customer's consent to electronically debit their account captured? Check the box and complete fields for all applicable programs selected: Web Authorization ("Checks -by -Web"— WEB) ❑ Customer provides electronic signature M Customer logs in using a username / password Merchant's website meets minimum encryption or security session requirements? (Minimum 128-bit RC4 encryption) 0 Yes ❑ No Are any transactions to be initiated from a website other than the main company website supplied on page 1? ® Yes ❑ No If yes, list other URL(s): (Important: Merchant is required to post any point of sale consumer notice provided by processor) TRANSACTION SUBMISSION 1. Transactions will be submitted via: Internet Gateway Merchant will create code to interface with processor API to transmit transaction data. Certified Web Service Gateway Merchant will use a certified web gateway. (see certified web gateway list): Gateway: InfoSend File Transmission Merchant will create text file and transmit to processor via FTP. Not available for Guarantee services. Applicable file formats include comma delimited, tab delimited or NACHA standard file. 2. On NSF returns, processor automatically resubmits transaction: �/ Yes (standard) I lNo (optional — not available for Guarantee services) 3. Please provide merchant's technical contact's information so we may contact them to provide gateway or file specs, coordinate a test file, etc. Required if selecting transaction submission methods of Internet Gateway or File Transmission. Name: InfoSend Email Address: ebppsupport@infosend.com Phone: ADDITIONAL ADDITIONAL PERSONS AUTHORIZED TO RECEIVE ONLINE REPORTING OR TRANSACTION INITIATION ACCESS Please Drovide first and last name and clearlv indicate what each Derson listed should be elven access to (Attach a separate Daee if necessarv.l: Name: Access Type: ❑ Transaction Reporting Only ❑ Transaction Initiation Only (if using processor VT) ❑ Both Name: Access Type: ❑ Transaction Reporting Only ❑ Transaction Initiation Only (if using processor VT) ❑ Both Name: Access Type: ❑ Transaction Reporting Only ❑ Transaction Initiation Only (if using processor VT) ❑ Both Name: Access Type: ❑ Transaction Reporting Only ® Transaction Initiation Only (if using processor VT) ❑ Both ACH AUTHORIZATION ACH Debit/Credit Authorization: Merchant hereby authorizes Paya-EFT in accordance with this Agreement to initiate debit/credit entries to Merchant's checking account, as indicated per the attached copy of a voided check from same. The authority is to remain in full force and effect until (a) One hundred and twenty (120) days after Paya-EFT has received written notification from Merchant of its termination in such a manner as to afford Paya-EFT reasonable opportunity to act on it, and (b) all obligations of Merchant to Paya-EFT that have arisen under this agreement have been paid in full. Bank Name: Depository: Merchant's batch activity will be put into this account. Routing #: Account #: Fees: Merchant's monthly fees/ necessary charges will be taken from this account. Routing#: Account#: MERCHANT ACCEPTANCE By signing below, I the undersigned, acknowledge and agree that the POS Conversion, Paper Guarantee, Check 21+ Remote Check Deposit, Checks -By -Phone, Checks -By -Web, and ACH Debit/Credit services ("Services") provided pursuant to this merchant application ("Application") are provided by Paya EFT, Inc. ("Paya-EFT"). I further represent to Paya-EFT that I have read the terms and conditions ("T&Cs") attached to this Application and that I am authorized to sign and accept the T&Cs on behalf of the entity listed below ("Merchant"). I acknowledge and agree that the Merchant desires to use the Services in accordance with the T&Cs and that the T&Cs together with this Application, if accepted by Paya-EFT, create a legal agreement between the Paya-EFT and the Merchant ("Agreement") separate and distinct from any other services offered in connection with the Paya-EFT Services. On behalf of the Merchant I will ensure that the T&Cs are reviewed and agree that they will be binding on the Merchant upon the use of the Paya-EFT account issued to the Merchant. I certify to Paya-EFT that the information provided in this Application is true, complete and accurate. I authorize Paya-EFT to verify the information on this Application and consent to the collection, use and disclosure of personal information about me for this purpose. I consent to the sharing of credit information about me or the Merchant with credit reporting agencies or credit bureaus as well as entities the Merchant purports to have a financial relationship and to use of third party databases to obtain or verify information about the Merchant and its financial condition. MERCHANT MUST SUBMIT A VOIDED CHECK WITH THIS AGREEMENT MERCHANT AGREED AND ACCEPTED: I have read and agree to the Terms of this Agreement. Authorized Merchant Signature I Printed Name Title Dated I OFFICIAL PAYA EFT USE ONLY Authorized Paya EFT Signature Printed Name Title Dated X Not valid unless approved and signed by authorized officer of Paya EFT Application for Merchant Account — Check and ACH Processing Rev. 01232019 Page 2 of 8 PLEASE NOTE: The complete Merchant Agreement includes this Application and the Terms and Conditions on six (6) additional pages. 15-10 Merchant Rights and Responsibilities p=e Payment systems A. These are the terms and conditions ("T&Cs") referenced in the merchant agreement application ("Application"). These T&Cs, together with the Application, form the agreement ("Agreement') between Paya EFT, Inc. ("Paya-EFT") and the merchant who submitted the executed Application ("MERCHANT"). MERCHANT desires to use the services pursuant to the terms of this Agreement and the rules of the National Automated Clearing House Association (the "Rules"), and Paya-EFT is willing to provide the services subject to the terms and conditions set forth in this Agreement. B. Unless otherwise defined herein, capitalized terms shall have the meanings provided in the Rules. The term "Entries" shall have the meaning provided in the Rules and shall also mean the data, which is transmitted by the MERCHANT to Paya-EFT to prepare such Entries for processing. AGREEMENT 1. MERCHANT'S AUTHORITY. MERCHANT specifically warrants to Paya-EFT that MERCHANT has taken all necessary legal action and has authority to enter into this Agreement with Paya- EFT. It further warrants that the person(s) signing for and on behalf of MERCHANT is specifically authorized and directed to do so by MERCHANT. MERCHANT acknowledges that this Agreement constitutes the legal, valid and binding obligation of MERCHANT, enforceable in accordance with its terms. The attached Schedules for the POS Guarantee Conversion, POS Conversion, QSP, Check 21+ Remote Check Deposit, Checks -By -Phone, Checks -By -Web, ACH Debit, Checks -By -Phone, and Paper Guarantee services are hereby incorporated into these T&C's to the extent Merchant selects such services in the Application. These T&Cs are only applicable to the Paper Guarantee services to the extent set forth in Sections 23 -43 and the Paper Guarantee Schedule attached hereto. 2. INTENTIONALLY DELETED. 3. MERCHANT's PUBLIC DISCLOSURE RESPONSIBILITIES. Paya-EFT shall provide signage to be displayed at the point of purchase (POP) or payment collection site, which informs customers of the applicable (i) MERCHANT'S use of Paya-EFT Electronic Check Processing Service; or (ii) electronic debit for the amount of any state allowable NSF or recovery fee as stated in Section 3 of the Check 21+ Remote Check Deposit Addendum. MERCHANT agrees to display these materials in the best visible and unhindered location so as to inform the public of, if applicable, such electronic debit entry or that MERCHANT will honor electronic check and ACH processing services (as applicable) provided by Paya-EFT. From time to time, Paya-EFT may disseminate (i) changes to rules governing the Services; and (ii) educational and promotional materials to MERCHANT for MERCHANT to distribute to customers. MERCHANT further agrees to immediately (i) remove and properly dispose of Paya-EFT's stale promotional materials and to display the most current materials upon receipt of such from Paya-EFT; and (ii) comply with such rule changes. MERCHANT will discontinue the use of all of Paya-EFT's promotional materials and properly remove said materials upon receipt of written notification of suspension or termination of this Agreement. In the event Merchants' account is reinstated by Paya-EFT after suspension, MERCHANT shall redisplay appropriate materials upon receipt of written verification of resumption of service by Paya-EFT. 4. RESTRICTIONS ON USE OF PROMOTIONAL MATERIALS AND REPRESENTATIONS CONCERNING Pava-EFT's SERVICES. MERCHANT shall make no use of Paya-EFT's promotional materials, marks, or software, other than as set forth in paragraph 3 above, without Paya-EFT'S prior written consent. In no way shall the MERCHANT indicate that Paya-EFT's services are an endorsement of the MERCHANT, its business or its business practices. In the event of termination, MERCHANT immediately shall properly discard all software related to Paya- EFT services at MERCHANT's expense. 5. SURCHARGES AND TAXES. MERCHANT shall not impose any illegal surcharge on any processed ACH, Remote Check Deposit (Check 21 Plus) processed check, or electronically processed check transaction. MERCHANT shall collect all required taxes at time of sale. All required taxes must be included in the total transaction amount at the time such is submitted for authorization by Paya-EFT and must be reflected in the face amount of the check or ACH Debit (if applicable). In any event, MERCHANT shall not collect any required taxes separately in cash, or otherwise. MERCHANT is responsible for paying all taxes collected to the appropriate authorities in a timely manner. 6. USE OF EQUIPMENT. MERCHANT agrees to utilize only equipment and software (including payment gateways) approved by Paya-EFT for the electronic processing of checks and ACH Debits and in a format and medium of transmission acceptable to Paya-EFT. 7. NETTING OF TRANSACTIONS. MERCHANT acknowledges that all transactions between Paya-EFT and MERCHANT under this Agreement, except assessment of fees, shall be treated as a single transaction for purposes of daily settlement between MERCHANT and Paya-EFT. The Settlement period varies depending on the Service. Chargebacks may be deducted from net settlement or may be debited from MERCHANT's account if no pending credits are available to offset the chargeback. 8. PAYMENT. MERCHANT acknowledges that this Agreement provides for the provisional settlement of MERCHANT'S transactions, subject to certain terms and conditions, fees, credit transactions, contingent claims for chargebacks, adjustments and final settlement including but not limited to those enumerated herein. All payments to MERCHANT for Legitimate and authorized transactions shall be made by Paya-EFT through the ACH and shall normally be electronically transmitted directly to MERCHANT'S designated account. However, Paya-EFT cannot guarantee the timeliness with which any payment may be credited by MERCHANT'S bank. MERCHANT understands that due to the nature of the ACH and the electronic networks involved and the fact that not all banks belong to an ACH, payment to MERCHANT can be delayed. In such cases, MERCHANT agrees to work with Paya-EFT to help resolve any problems in crediting MERCHANT'S designated account. In the event that a payment is rejected by MERCHANT'S bank or fails to arrive within seven (7) banking days from the date of settlement due to problems beyond Paya-EFT'S control, Paya-EFT may periodically wire transfer all funds due MERCHANT until the problem is corrected, at MERCHANT'S EXPENSE. All payments to MERCHANT shall be made after first deducting therefrom any discount fee, transaction fee, credit, chargeback, reserve or other fee or charge for which MERCHANT is responsible pursuant to this Agreement. Said charges and fees shall be deducted from incoming transactions or may be debited against MERCHANT'S designated Account at Paya-EFT's sole discretion, without any further notice or demand. 9. AUTHORIZATION TO ACCESS MERCHANT's ACCOUNT. MERCHANT hereby authorizes Paya-EFT to initiate debit and credit entries to MERCHANT'S designated account. MERCHANT's authorization shall continue in effect for at least 120 days after termination of this Agreement, or for a longer period as determined necessary by Paya-EFT in the exercise of its sole discretion in order to properly terminate business. Unless a reserve or delay is placed on the MERCHANT'S account, Paya-EFT will generally transmit settlement to MERCHANT's bank within 7 business days. In cases where MERCHANT has been approved by Paya-EFT in advance to initiate credit entries, the debit to MERCHANT's account will be initiated first and the credit to the customer may be held until MERCHANT's debit clears, generally within 6 banking days or for a longer period as determined necessary by Paya-EFT to insure the funds have cleared MERCHANT's account. With respect to the Services, (i) settlement shall consist of a 7 banking day net settlement unless approved in advance by Paya-EFT in writing settlement shall consist of a 7 banking day net settlement unless approved in advance by Paya-EFT in writing; and (ii) No MERCHANT or customer is authorized to initiate a customer credit Entry, except where the Entry is the result of a reversal of a previous WEB debit Entry. Returns received after a transaction has been settled may be offset and deducted from current outstanding funds due to MERCHANT, or returns may be charged back to MERCHANT's account at Paya-EFT's discretion. MERCHANT specifically authorizes Paya-EFT to debit MERCHANT's account via Automated Clearing House (ACH) transfer for any previously funded transaction that is returned, and MERCHANT warrants to Paya-EFT that MERCHANT will maintain a sufficient balance to cover return entries and to promptly notify Paya-EFT of any changes to MERCHANT's accounts. In addition, Paya-EFT may require additional monetary sums for the reserve account from MERCHANT, and Paya-EFT reserves the right to hold additional monies as necessary to reduce any risk associated with the daily processing of checks, as requested by MERCHANT. In the event of processing termination, Paya- EFT may hold outstanding funds due to MERCHANT for up to one -hundred -twenty (120) days from the transaction date if Paya-EFT determines that the return history reasonably justifies the holding of funds. Paya-EFT may hold back certain amounts where Paya-EFT is investigating a transaction for breach of warranty or transactional requirements by MERCHANT or for other reasons. Paya-EFT shall monitor MERCHANT's transactional activity and MERCHANT agrees that Paya-EFT may delay funds for a reasonable period to investigate account activity. Paya-EFT will attempt to notify MERCHANT of any investigation, but Paya-EFT shall have no liability to MERCHANT or any other party, for any such actions taken by Paya-EFT. MERCHANT agrees that Paya-EFT may hold, setoff or retain funds to protect against amounts owed Paya-EFT or based on MERCHANT's transaction history and/or MERCHANTS' financial condition. Paya-EFT will not be liable for any dishonor of any item as a result of actions taken hereunder. Any account is subject to review, verification, audit and acceptance by Paya-EFT. Paya-EFT may return any item to MERCHANT for correction or proper processing. 10. RETURNS AND CREDITS. MERCHANT shall maintain a fair policy permitting refunds, exchanges, returns and adjustments. During the tern of this Agreement, MERCHANT shall be responsible for making all cash, check, or ACH Debit refunds to customer after a transaction has been batched out for settlement. Unless MERCHANT has been approved by Paya-EFT in advance to initiate credit entries for a lesser amount than the original check, electronic check, or ACH Debit entry, MERCHANT must initiate a credit receipt for the same amount as the original check or debit entry to effect voids, which occur the same day as the day of authorization and prior to batching out. As applicable, MERCHANT must use the POP equipment, approved Paya- EFT software, or ACH Debit Software to transmit the credit. MERCHANT shall obtain proper written authorization from the Customer whose name is used in the transaction or printed on the face of the check or the customer's authorized representative prior to crediting Customer's account. Except for Checks -By -Web, the customer or its authorized representative shall sign the completed credit receipt and a copy of the credit receipt shall be delivered to the customer at the time of each cancellation of a transaction. Each void, debit, and credit entry shall constitute a separate transaction for which a processing fee will apply. If it becomes necessary for a reversal of a transaction to be initiated, MERCHANT shall request in writing to Paya-EFT to initiate such reversal. MERCHANT shall give Paya-EFT enough information to create such reversal. A fee of no more than twenty-five dollars for each transaction reversal may be charged by Paya-EFT. If. WARRANTIES BY MERCHANT. MERCHANT warrants and agrees to fully comply with all federal, state, and local laws, rules and regulations, as amended from time to time, including those with respect to consumer protection. MERCHANT also warrants not to change the nature of its business as indicated on the Application attached hereto and submitted herewith or to modify the ownership of the business without the prior written consent of Paya-EFT. With each transaction presented to Paya-EFT by MERCHANT for authorization, MERCHANT specifically warrants and represents that: (a) each customer has authorized the debiting or crediting of its checking account, that each debit or credit is for an amount agreed to by the customer; (b) each debit or credit Application for Merchant Account— Check and ACH Processing REV 06252018 Page 3 of 8 PLEASE NOTE: The complete Merchant Agreement includes these Terms and Conditions and the Application on two (2) additional pages. 15-11 entry was authorized by the person named on the checking account or the authorized representative or agent of such person; (c) the sales receipt or other proof of purchase is valid in form and has been completed in accordance with all applicable laws and all of the provisions set forth in this Agreement; (d) the total amount of each sales receipt or other proof of purchase evidences all goods and services purchased in a single transaction (No splitting check transactions to multiple checks as applicable); (e) MERCHANT has delivered the goods or completed the services identified in the authorized sales receipt; (f) each sales draft and check represents a bona fide direct sales transaction between the MERCHANT and the person presenting the check or ACH Debit in the MERCHANT'S ordinary course of business and that the amount of the sales draft or check evidences the customer's total indebtedness for the transaction involved; (g) the person presenting the check or ACH Debit has no claim, defense, right of offset, or dispute against MERCHANT in connection with the purchase of the goods or services and MERCHANT will provide adequate services to the person presenting the check or ACH Debit and will honor all warranties applicable thereto; and (h) all of MERCHANT'S business locations engage in the business activity listed on the face of this Agreement. 12. CHARGEBACKS AND RETURNS. PAYA-EFT and third -party bank partners will monitor MERCHANT for adherence to established maximum acceptable return rate thresholds as established by the Rules which are as follows: Overall return rate level of 15% or less, Administrative return (R02, R03, R04) rate level of 3% or less, and an Unauthorized return (R05, R07, R10, R29, or R51) rate level of 0.5% or less. MERCHANT shall bear all risk of loss, without warranty or recourse to Paya-EFT for the amount of any transaction, applicable fees, or other amounts due Paya-EFT (including Paya-EFT's actual costs and expenses) due to or caused by chargebacks and returns of any kind, whether for customer chargebacks, insufficient funds returns, administrative or corporate returns, or any other type of returns, except as set forth in this Agreement and the Paya-EFT POS GUARANTEE CONVERSION, ACH DEBIT GUARANTEE, Checks -By -Phone Guarantee, and Remote Deposit Capture (Check 21 Plus) with Guarantee Schedules below (provided that MERCHANT has purchased and Paya-EFT agreed to provide Guarantee services). Paya-EFT shall have the right to debit MERCHANT'S incoming transactions, designated account or any other funds of MERCHANT in Paya-EFT's direct or indirect control by reason of Paya-EFT's security interest granted to Paya-EFT by MERCHANT hereunder, and to chargeback such transactions to MERCHANT including, but not limited to any of the following situations: (a) where goods have been returned or service canceled by the person submitting the applicable check or ACH Debit for electronic processing or Remote Deposit Capture (Check 21 Plus) processing and that person has requested a credit draft and such credit draft was not processed by MERCHANT; (b) where the sales draft or purchaser breaches any representation, warranty or covenant or failed to meet the requirements of this Agreement, or applicable law, or has not been authorized in advance by the authorization center as required hereunder; (c) where the transaction is for a type of goods or services sold other than as disclosed in the MERCHANT application or approved in advance by Paya-EFT or the amount shown on the sales receipt or proof of purchase differs from the copy given to the customer; (d) where a customer contends or disputes in writing to Paya-EFT, or the customer's financial institution named on the check or ACH Debit that: (1) Goods or services were not received; or (2) Goods or services received do not conform to the description on the sales receipt or proof of purchase; or (3) Goods or services were defective or the customer has a claim, dispute or defense to payment related to the transaction; or (4) The dispute reflects a claim or defense authorized by a relevant statute or regulation, (e) where a check authorization document or recording, proof of purchase, or credit receipt was not received by Paya-EFT as required herein or is subject to indemnification charged back by the customer's financial institution; (f) where the transaction was generated through the use of an account that was not valid (As in, but not limited to, R03,R04 return codes)or effective (As in, but not limited to, R02 return code) on the transaction date or which was made on an altered, fraudulent, or counterfeit check authorization document, recording, or ACH debit or of which MERCHANT had notice not to honor and failed to reject the transaction or if MERCHANT disregarded any denial of authorization; (g) where the check results in a R29 return (Unauthorized ACH entry to Corporate Account) and any collection efforts are not successful; (h) where no signature or electronic acceptance of the transaction appears on the sales check authorization document (as applicable) or proof of purchase (or the proof of purchase does not contain the information from the ACH Debit), where customer did not authorize via recorded oral authorization, or if MERCHANT failed to obtain specific authorization in advance from Paya-EFT to complete the transaction and/or a valid authorization number was not on the sales receipt or proof of purchase and/or the customer has certified in writing to Paya-EFT or his financial institution that no authorized user made or authorized the transaction; (i) where security procedures were not followed; 0) where the customer's financial institution or Paya-EFT has information that MERCHANT fraud occurred at the time of the transaction(s), or the transaction is not a sale by MERCHANT whether or not such transaction(s) was authorized by the customer; (k) in any other situation where the check authorization or proof of purchase was executed or a credit was given to MERCHANT in circumstances constituting a breach of any representation or warranty of MERCHANT or in violation of applicable law or where MERCHANT has not provided documents or resolved a customer dispute whether or not a transaction is charged back; (1) an Entry was charged back and represented whether or not the customer knows or consents to this representment. If, with respect to any one of MERCHANT'S outlets, the amount of or number of any counterfeit or fraud incidents becomes excessive, in the sole determination of Paya-EFT; (m) MERCHANT does not provide Paya-EFT with a copy of the signed authorization receipt or recorded oral authorization within forty-eight (48) hours from the time of Paya-EFT's request. MERCHANT may be charged back for all transactions, this Agreement may be terminated immediately without notice, and MERCHANT'S funds, including but not limited to those in incoming transactions and in MERCHANT'S designated account, shall be held pursuant to the provisions herein. Paya-EFT shall retain any discount or fee related to a chargeback transaction. MERCHANT agrees that Paya- EFT will assess up to twenty-five dollars for each chargeback, or such increased or additional charges as may be established by Paya-EFT from time to time. Additionally, Paya-EFT shall have the same rights to debit MERCHANT's account for transactions returned or not honored for any reason, including but not limited to insufficient funds, administrative or corporate returns, or any other kind of returned transaction. If MERCHANT has requested the Paya-EFT GUARANTEE service, and Paya-EFT has accepted the application for Guarantee service, certain transactions are guaranteed, as listed in this Agreement, including the Paya-EFT POS GUARANTEE CONVERSION Remote Check Deposit (Check 21 Plus) with Guarantee, Checks -By -Phone Guarantee, or ACH DEBIT GUARANTEE Schedules below. 13. CHARGEBACK AND RETURNS RESERVE ACCOUNT. Notwithstanding any other language to the contrary contained in this Agreement, Paya-EFT reserves the right to establish, without notice to MERCHANT, and MERCHANT agrees to fund a non -interest bearing Chargeback and Return Reserve Account, or demand other security and/or to raise any discount fee or transaction fee hereunder, upon Paya-EFT's reasonable determination of the occurrence of any of the following: (a) MERCHANT engages in any processing of charges which create an overcharge to the customer by duplication of charges; (b) Failure by MERCHANT to fully disclose the true nature or percentage of its (i) actual or intended telephone and/or mail order business; and (if) actual or expected losses due to insufficient funds transactions, fraud, theft or deceit on the part of its customers, or due to administrative chargebacks/returns, or chargebacks or rejections by customers; (c) Failure by MERCHANT to fully disclose the true nature of its business to Paya-EFT to permit a fully informed decision as to the suitability of MERCHANT for processing through Paya-EFT; (d) Failure by MERCHANT to fully disclose the true ownership of MERCHANT'S business entity or evidence of fraud; (e) Processing by MERCHANT of unauthorized charges or any other action which violates applicable risk management standards of Paya-EFT or is likely to cause loss; (f) Any misrepresentation made by MERCHANT in completion of the MERCHANT Application or breach of any other covenant, warranty, or representation contained in this Agreement or applicable law including a change of type of business without prior written approval by Paya-EFT; (g) MERCHANT has chargebacks or returns of any kind which exceed 1% of the total number of transactions completed or dollars processed for Checks -By -Web Services by MERCHANT in any thirty (30) calendar day period; (h) Excessive number of requests from customers or issuing banks for retrieval of documentation; (i) MERCHANT'S financial stability is in question or MERCHANT ceases doing business; or 0) Upon notice of or termination of this Agreement. After payment or adequate provision for payment is made by Paya-EFT, for all obligations on the part of MERCHANT to Paya-EFT under this Agreement, MERCHANT may request Paya-EFT to disburse to MERCHANT any funds remaining in the Chargeback and Return Reserve Account unless otherwise agreed to by Paya-EFT. Such funds will not be disbursed to MERCHANT until the end of one hundred twenty (120) days after termination of this Agreement or ninety (90) days from the date of the last chargeback or return activity, whichever is later, unless Paya-EFT in its sole discretion has reason to believe that customer chargeback rights may be longer than such period of time or that loss is otherwise likely, in which event Paya-EFT will notify MERCHANT of such fact and Paya-EFT will set the date when funds shall be released. No monies held in the Chargeback and Return Reserve Account shall bear interest. Provisions applicable to the designated account are also applicable to this account. 14. COLLECTIONS. MERCHANT acknowledges and agrees that when collection services are required, Paya-EFT may utilize an appropriately licensed third party to perform such collection services. MERCHANT further authorizes Paya-EFT to continue collection efforts for MERCHANT. If collections are unsuccessful after sixty (60) days, Paya-EFT shall discontinue collections and be absolved of all responsibility. 15. INTENTIONALLY DELETED. 16. MERCHANT PAYMENT OBLIGATIONS. Merchant shall pay SPS-EFT the fees and charges for the Services rendered hereunder in accordance with the Fees and Charges as set forth in the Application. MERCHANT must promptly notify Paya-EFT in writing of any dispute regarding fees under this Agreement. MERCHANT'S written notice must include: (i) MERCHANT name and account number; and (ii) the dollar amount and description of the disputed fees. Such written notice must be received by Paya-EFT no later than ninety (90) days after the disputed fees have been paid by MERCHANT or charged to MERCHANT'S account by Paya-EFT. MERCHANT'S failure to so notify Paya-EFT will waive and bar the dispute. If applicable, for the purpose of billing a Mobile Image shall consist of the front -and -back of a check; any other image capture shall be billed as a separate image regardless of whether or not multiple images are of a single document. 17. ASSIGNMENT OF CHECKS AND ACH DEBITS. As of the date of this Agreement and by subscribing to Paya-EFT services, MERCHANT shall be deemed to have assigned to Paya-EFT, without recourse, all of MERCHANT's right, title and interest in any and all ACH Debits return fees and checks, including any rights to treble or punitive damages permitted under applicable law. MERCHANT shall execute and deliver endorsements, instruments, and papers and shall do whatever is necessary under the laws of any applicable jurisdictions to secure and defend Paya- EFT's rights and shall do nothing to prejudice those rights. MERCHANT shall cooperate with Paya-EFT in pursuing Paya-EFT's rights, including suing or prosecution of the customer under all applicable laws. 18. COMPLIANCE AND DISCLOSURE OF INFORMATION. MERCHANT agrees to comply with all applicable state or federal laws, rules and regulations affecting the use of checks, drafts and ACH transactions, including but not limited to rules and procedural guidelines established by the Federal Trade Commission ("FTC") and Regulation E. (Reg. E). MERCHANT is solely responsible for any and all losses incurred by MERCHANT or Paya-EFT in the event MERCHANT initiates any transaction prohibited by Regulation E Rules or other rules or laws of the United States of America ("USA") or in breach of this Agreement. MERCHANT shall provide such information and certifications as Paya-EFT may reasonably require from time to time to determine MERCHANT'S compliance with the terms and conditions of this Agreement and applicable law. MERCHANT further agrees to produce and make available for inspection by Paya-EFT or its officers, agents, attorneys, accountants, or representatives, such books and records of MERCHANT as Paya-EFT may deem reasonably necessary to be adequately informed of the business and financial condition of MERCHANT, or the ability of MERCHANT to observe or perform its obligations to Paya-EFT pursuant to this Agreement. MERCHANT further agrees to provide to Paya-EFT from time to time such information including, but not limited to, credit reports, personal and/or business financial statements, income tax returns, or other such information as Paya- EFT may request. MERCHANT grants to Paya-EFT continuing authority to conduct credit checks and background investigations and inquiries concerning MERCHANT and MERCHANT'S owner(s) including, but not limited to, character and business references and the financial condition of MERCHANT and MERCHANT'S owner(s). MERCHANT expressly authorizes Paya-EFT Application for Merchant Account— Check and ACH Processing REV 06252018 Page 4 of 8 PLEASE NOTE: The complete Merchant Agreement includes these Terms and Conditions and the Application on two (2) additional pages. 15-12 or its agents, attorneys, accountants, and representatives to provide and receive such information from any and all third parties directly, without further consent or authorization on the part of MERCHANT. Paya-EFT may share with others its credit, sales and other information. MERCHANT will not transfer, sell, or merge or liquidate its business or assets or otherwise transfer control of its business, change its ownership in any amount or respect, engage in any joint venture partnership or similar business arrangement, change its basic nature or method of business, types of products sold or engage in sales by phone or mail order without providing notice to Paya-EFT and provide Paya-EFT with the opportunity to terminate this Agreement. 19. COMPLIANCE WITH THE RULES AND APPLICABLE LAW. MERCHANT's rights and obligations with respect to any Entry are governed by the NACHA Rules ("the Rules"), this Agreement and applicable law. The Merchant agrees to comply with and be bound by "the Rules". MERCHANT agrees to comply with applicable state and federal law or regulation and Merchant warrants that it will not transmit any Entry that violates the laws of the United States, including, without limitation, regulations of the Office of Foreign Asset Control (OFAC). 20. DATA RETENTION. MERCHANT shall retain all records related to authorization, including all sales and credit receipts and authorizations for a period of no less than two years following the date of the transaction, or two years from authorization revocation if applicable. According to Paya-EFT'S current Paya-EFT policies, MERCHANT shall, as applicable, stamp or mark "ACH processed" and hand the check back to the check writer and retain for a period of 2 years all ACH Debits received from customers. If check is handed back to check writer, ACH authorization form is handed back to consumer, or recorded oral authorization is lost then MERCHANT acknowledges that Paya-EFT will not be able to provide any check collection services beyond the third electronic presentment of the check. Failure to provide the signed authorization receipt, form, or recorded oral authorization to Paya-EFT will result in cessation of collection efforts, and Paya-EFT will be entitled to immediately debit MERCHANT'S account for any previously processed and returned transactions. 21. ADDITIONAL MERCHANT REPRESENTATIONS. MERCHANT agrees to permit Paya-EFT to audit MERCHANT upon reasonable notice. MERCHANT agrees that any outstanding amount(s) owed to Paya-EFT shall be subject to a 1.5% finance charge monthly. Any outstanding sums will be sent to an outside collection agency and charged the maximum amount of civil, legal, and collection fees/charges as is allowed by law. MERCHANT will not disclose and will keep confidential the terms and conditions of this Agreement. 22. ADDITIONAL PAYA-EFT RESPONSIBILITIES. Paya-EFT will accept, as applicable, entries via check reader hardware, MERCHANT's payment gateway, double sided check images from a Paya-EFT approved check imager/software vehicle, ACH Debit software, and Checks -By -Phone Gateway on a 24-hour per day basis. Paya-EFT is only responsible for processing entries that have arrived at its premises in a proper format and on a timely basis. Paya-EFT will use information provided by MERCHANT to originate its entries in the applicable Remote Check Deposit (Check 21 Plus) network or ACH. MERCHANT understands and agrees that Paya-EFT may reject MERCHANT's entries for any reason permitted in this Agreement and/or if acceptance of such entry would cause Paya-EFT to potentially violate any federal, state or local law, rule statute, or regulation, including without limitation any Federal Reserve or other regulatory risk control program. At MERCHANT's written request, Paya-EFT will make reasonable efforts to reverse or delete an entry, but will under no circumstance be liable for the failure to comply with such request. 23. LIMITATION OF LIABILITY AND MERCHANT'S WAIVER OF DAMAGES. Paya-EFT shall be responsible for performance of the ACH and Remote Check Deposit (Check 21 Plus) services as a third -party, provider in accordance with the terms of this Agreement. Paya-EFT shall not be responsible for any other person's or entity's errors, acts, omissions, failures to act, negligence or intentional conduct, including without limitation entities such as Paya-EFT's communication carrier or clearing houses, and no such entity shall be deemed to be a representative or an agent of Paya-EFT. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR SPECIAL DAMAGES WHICH EITHER MAY INCUR AS A RESULT OF ENTERING INTO THIS AGREEMENT. 24. FORCE MAJEURE. Paya-EFT shall not be responsible for delays, nonperformance, damages, lost profits or other losses caused directly or indirectly by any Act of God, including, without limitation, fires, earthquakes, tornadoes, hurricanes, wars, labor disputes, communication failures, legal constraints, power outages, data transmission loss or failure, incorrect data transmission or any other event outside the direct control of Paya-EFT. 25. CONFIDENTIALITY. MERCHANT further warrants and agrees that it shall not sell, purchase, provide, or exchange checking account information in the form of sales drafts, mailing lists, tapes, or any other media obtained by reason of a transaction or otherwise, to any third party other than to Paya-EFT, MERCHANT'S agents approved by Paya-EFT for the purpose of assisting MERCHANT in its business to Paya-EFT, the financial institution named on the check, or pursuant to lawful government demand without the account holder's explicit written consent. All media containing checking account numbers must be stored in an area limited to selected personnel until discarding and must be destroyed prior to or in connection with discarding in a manner that will render the data unreadable. CONFIDENTIALITY AND CALIFORNIA PUBLIC RECORDS ACT. Paya-EFT acknowledges that MERCHANT is a California goverment entity subject to the California Public Records Act (Gov. Code, §7920.000 et seq.). Paya-EFT acknowledges that Paya-EFT may submit information to MERCHANT that Paya-EFT considers to be confidential, proprietary, or trade secret information. Only such information clearly designated in writing as "confidential" shall be deemed "Confidential Information." Upon request or demand of any third person or entity ("Requestor") for the production, inspection, and/or copying of Confidential Information, MERCHANT shall notify Paya-EFT that such request has been made. Paya-EFT shall be solely responsible for taking whatever legal steps are necessary to protect Confidential Information and to prevent its release to the Requestor. Without limiting MERCHANT's right to disclose Confidential Information as may be required by law, if Paya-EFT takes no such action after receiving the foregoing notice from MERCHANT, MERCHANT shall be permitted to release information it deems subject to disclosure. 26. INDEMNIFICATION. MERCHANT agrees to indemnify Paya-EFT for any cost, expense, and damage, lost profit and/or attorneys' fees in connection with (i) any breach of its obligations or representations in this Agreement; (ii) a dispute between MERCHANT and a consumer regarding the action or inaction of MERCHANT; (iii) any dispute between MERCHANT and a MERCHANT Customer with respect to the alleged or actual failure by MERCHANT to process a transaction as requested by such customer or to MERCHANT's failure to provide data security, and (iv) MERCHANT's failure to comply with any of the provisions of this Agreement and applicable laws, Rules and/or regulations. Subject to the provisions hereof, Paya-EFT shall assume the defense of, indemnify and hold harmless Merchant and its officers, agents, employees, and volunteers (collectively "Indemnitees") from and against any claim, loss, damage, injury (including, without limitation, injury to or death of an employee of Paya-EFT or its sub -consultants) and liability of every kind, nature and description (including without limitation, incidental damages, court costs, attorney's fees, and costs of investigation) that directly arise from: (1) the services performed by Paya-EFT under this Agreement, or (2) any act or omission of Paya-EFT (collectively "Liabilities"), except if such Liabilities are caused in part by the negligence of any indemnitee. Paya-EFT assumes no liability for the sole negligence or willful misconduct of Indemnitees. Paya-EFT's indemnification obligations for claims involving "Professional Liability" (claims involving acts, error, or omissions in the rendering of professional services) and "Economic Loss Only" (claims involving economic loss which are not connected with bodily injury or physical damage to property) shall be limited to the proportionate extent of Merchant's negligence or other breach of duty, and limited by the fees that Paya-EFT has received for the prior six (6) months from Merchant. 27. SECURITY INTEREST. (a) This Agreement is a security agreement under the Uniform Commercial Code. MERCHANT grants to Paya-EFT a security interest in and lien upon: (i) the account designated by MERCHANT for settlement and all funds at any time in such account, whatever the source of such funds, (ii) the Charge -back and Return Reserve Account (as defined above) and all funds at any time in the Chargeback and Return Reserve Account, whatever the source of such funds, (iii) all MERCHANT's rights relating to this Agreement including, without limitation, all rights to receive any payments or credits under this Agreement; and (iv) all MERCHANT deposit accounts now owned or hereafter acquired and the proceeds of all of the foregoing (collectively, the "Secured Assets"). Upon request of Paya-EFT, MERCHANT will execute one or more financing statements or other documents to evidence this security interest. MERCHANT authorizes Paya- EFT and appoints Paya-EFT its attorney in fact to sign its name to any financing statement used for the perfection of any security interest or lien granted in this Agreement. These security interests and liens will secure all of MERCHANT's obligations under this Agreement and any other agreements between MERCHANT and Paya-EFT including, but not limited to, MERCHANT's obligation to pay any amounts due to Paya-EFT. With respect to such security interests and liens, Paya-EFT will have all rights afforded under the Uniform Commercial Code, any other applicable law and in equity. Paya-EFT may exercise its rights under this Agreement to collect any amounts due to Paya-EFT including, without limitation, rights of set-off and recoupment. 28. IRS REPORTING AND WITHHOLDINGS. Section 605OW of the Internal Revenue Code ("Code") requires payment providers and third party payment networks, such as Paya-EFT, to report payment settlement amounts to the Internal Revenue Service ("IRS") for each merchant processing through Paya-EFT. Merchant shall verify its identity by providing Paya-EFT with a Tax Identification Number ("TIN") such as a Social Security Number (SSN) or Employer Identification Number (EIN) for each Merchant Account. In the event Merchant fails to provide its TIN, Paya-EFT will place a restriction on Merchant's Account and may restrict the receipt of funds into Merchant's Account, or withhold a percentage of payments deposited into Merchant's Account in order to satisfy the backup withholding requirements of the IRS. Paya-EFT may charge up to $25.00 annually for associated administrative costs. 29. NON -WAIVER. Neither the failure nor any delay on the part of Paya-EFT to exercise any right, remedy, power or privilege hereunder shall operate as a waiver thereof or give rise to an estoppel nor be construed as an agreement to modify the terms of this Agreement, nor shall any single or partial exercise of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver by a party hereunder shall be effective unless it is in writing and signed by the party making such waiver, and then such waiver shall apply only to the extent specifically stated in such writing. 30. ASSIGNMENT. MERCHANT may not assign or transfer any rights under this Agreement unless and until it receives the prior written approval of Paya-EFT. Paya-EFT may freely assign this inghaemndt, its rights, benefits and duties hereunder. 33. �E%�N9i�EIOAFPSii; Yalta tokWikobgtaumaeumdaoSifiitedgilaml edilu�auihbgens6aiauarktigei8�tc}dadlyoM}e1I kI11�H¢un3alearilis�dst�pp14�1deumBotoiportFv9y h0)sdgW &tepRotivatFcP4W- F lirimd'dat�uq lini»aAi�Imrthl rlldiavnuntiHEo Buhs�ip u B,-&h (Aiadditts 1Mcmtbff'eeQhlmldil% immudiatcliaent da&wft1hiio AqptwMhRI%kA-:FT reserves the right at all times to unilaterally change all or part thereof, or any other terms of this Agreement upon written notice to MERCHANT. 34. Uf0NT1 1 AARTDEhiF&emem may be executed in one or more counterparts, each of which shall be deemed to be an original, such counterparts to constitute but one and the same Application for Merchant Account— Check and ACH Processing REV 06252018 Page 5 of 8 PLEASE NOTE: The complete Merchant Agreement includes these Terms and Conditions and the Application on two (2) additional pages. 15-13 35. ENTIRE AGREEMENT. This Agreement, including the attached Schedules, together with the Account Agreement, is the complete and exclusive statement of the agreement between Paya-EFT and the MERCHANT with respect to the subject matter hereof and supersedes any prior agreement(s) between Paya-EFT and the MERCHANT with respect to the subject matter. In the event of any inconsistency between the terms of this Agreement and the Account Agreement, the terms of this Agreement shall govern. In the event the performance of the services provided herein in accordance with the terms of this Agreement would result in a violation of any present or future statute, regulation or government policy to which Paya-EFT, the Originating Depository Financial Institution (ODFI) or MERCHANT is subject, and which governs or affects transactions contemplated by this Agreement, then this Agreement shall be deemed amended to the extent necessary to comply with such statute, regulation or policy and Paya-EFT, the ODFI and MERCHANT shall incur no liability as a result of such changes except as provided in the following paragraph. 36. AMENDMENTS. As stated in paragraph 35, Paya-EFT, the ODFI or MERCHANT may amend operations or processing procedures in order to conform to and comply with any changes in the Rules or applicable Federal or State Regulations. The changes would be, without limitation, those relating to any cut-off time and the close of any business day. Such amendments to operations or procedures shall become effective upon receipt of written notice to the other party, as provided for herein, or upon such date as may be provided in the Rules or applicable law or regulation referenced in the written notice, whichever is earlier in time. Use of the ACH or Remote Check Deposit (Check 21 Plus) services after any such changes shall constitute acceptance of the changes by the parties. Further, Paya-EFT may, from time to time, amend any provision of this Agreement, including, without limitation, those relating to the fees and charges payable by MERCHANT by mailing written notice to MERCHANT of the amendment, and the amendment shall become effective unless Paya-EFT receives MERCHANT's notice of termination of this Agreement within 7 days. Amendments due to changes in the Rules or any law or judicial decision may become effective on such shorter period of time as Paya-EFT may specify if necessary to comply with the applicable Rule, law or decision. No other amendments or modifications to this Agreement will be effective unless such changes are reduced to writing and are signed by the duly authorized party or parties to this Agreement and such Amendments are incorporated into and made a part of this document. 37. BINDING AGREEMENT; BENEFIT This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, successors and assigns. This Agreement is not for the benefit of any other person or entity and no other person or entity shall have any right against Paya-EFT. 38. INTENTIONALLY DELETED. 39. CHOICE OF LAW, VENUE & JURISDICTION. Notwithstanding any language to the contrary, all issues related to the electronic processing of checks and ACH Debits under the terms of this Agreement shall be determined in accordance with the NACHA Rules, Federal Trade Commission and Regulation E Rules, and laws of the United States of America and the State of California as it applies to contracts. In the event of a conflict between the Rules and applicable local, state or federal law, the Rules shall prevail unless otherwise prohibited by law. To the extent that an issue arises which is not covered by the Rules, this Agreement shall be governed by and construed in accordance with California law and it is expressly agreed that venue and jurisdiction for all such matters shall lie exclusively in California. MERCHANT acknowledges that this Agreement was formed in Florida, upon its acceptance by Paya-EFT. 40. SEVERABILITY. If any provision of the Agreement is held to be illegal, invalid, or unenforceable, in whole or in part, by court decision, statute, or rule (or otherwise would go in if you wanted to include arbitration) such holding shall not affect any other provisions of this Agreement. All other provisions or parts thereof shall remain in full force and effect and this Agreement shall, in such circumstances, be deemed modified to the extent necessary to render enforceable the provision hereof. 41. HEADINGS. The headings in this Agreement are used for referenced purposes only. They shall not be deemed as part of this Agreement and shall not affect its interpretation. 42. EFFECTIVE DATE. This Agreement shall be effective only upon acceptance by Paya-EFT. 43. IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed by their duly authorized officers. Application for Merchant Account— Check and ACH Processing REV 06252018 Page 6 of 8 PLEASE NOTE: The complete Merchant Agreement includes these Terms and Conditions and the Application on two (2) additional pages. 15-14 Checks -By -Web Schedule These Terms are only applicable to processing web -initiated transactions which are "Web" Entries as defined by the Rules ("Checks -By -Web Service") utilizing the end -customer's Checking account data. MERCHANT is required to provide its own Intemet payment gateway or utilize a third party Internet payment gateway which must be approved by Paya-EFT in advance. Any Paya-EFT products and associated software specifically designed for such transactions will be utilized by MERCHANT when required by Paya-EFT, and such software will either be hosted and maintained by Paya-EFT, or alternatively, provided directly to MERCHANT for installation on MERCHANT equipment. In all cases where Paya-EFT hosts software for MERCHANT, the various terms and conditions referenced below regarding disclosure, transaction and processing requirements and all other requirements imposed by either regulatory agency, law, Paya-EFT, or otherwise shall have full force and effect. 1. CHECKS -BY -WEB PROGRAM. THIS PROGRAM OFFERS NO GUARANTEE FOR ENTRIES THAT ARE RETURNED UNPAID AND MERCHANT SHALL BE LIABLE FOR 100% OF ALL LOSSES ARISING FROM RETURNED ENTRIES. MERCHANT must utilize a Paya-EFT-approved payment gateway, software, and approved method of electronic file transmission to use the Checks -By -Web program. MERCHANT must submit a file for testing purposes prior to using the Checks -By -Web Service if MERCHANT utilizes electronic file transmission. MERCHANTS who utilize electronic file transmission will not receive the benefit of any pre -verification services to determine if the CUSTOMER's account or driver's license is flagged by the national negative database for unpaid items, which may result in higher returns or chargebacks to MERCHANT's account. Refer to Software Requirements section. Paya- EFT functions solely as the processor and assumes no liability in the performance of MERCHANT's payment gateway or other related hardware/software. Paya-EFT may, at its option provide certain pre -verification services prior to processing an Entry; such services are at Paya- EFT's discretion and shall in no way create a guarantee from Paya-EFT or obligation on Paya-EFT's part to verify the consumer identity and validity of a submitted Entry. 2. ACH COLLECTION. MERCHANT authorizes Paya-EFT to re -present all return items forwarded to Paya-EFT and to originate an electronic Entry for the amount of any allowable recovery fee. Paya-EFT shall have sixty (60) days from the date of receipt of return ACH transaction item to complete its re -presentment process. If this Agreement is terminated for any reason, Paya- EFT will retain the right to complete the electronic re -presentment process for all return ACH Transaction items forwarded to Paya-EFT prior to termination. 3. UNACCEPTABLE TRANSACTIONS. In addition to the restrictions set out above and in any event, the following transactions are unacceptable for electronic processing. MERCHANT agrees not to submit any of the following transactions to Paya-EFT for electronic processing; (a) MERCHANT shall not electronically process any electronic checks drawn on any depository institution that is not federally insured or part of the ACH network, (b) MERCHANT shall not electronically process any electronic checks drawn on the business or personal checking account of MERCHANT or any of its agents or employees, (c) MERCHANT shall not submit an electronic check for goods or services that are not provided to the customer, (d) MERCHANT shall not submit an electronic check which is altered by the MERCHANT in any way. MERCHANT's submission of any of the above transactions for electronic processing may subject the MERCHANT to immediate suspension or termination, and all funds of MERCHANT, including those in MERCHANT'S account, may be placed on hold or charged back to MERCHANT. 4. SOFTWARE. MERCHANT shall utilize a payment gateway (shopping cart) that Paya-EFT has previously authorized for processing all electronic check transactions. (a) MERCHANT is responsible for all telecommunication fees and charges, including but not limited to telephone fees, associated with and related to the use of the payment gateway and/or any related software costs/expenses. (b) MERCHANT shall maintain all hardware/software necessary for electronic check processing, including necessary file servers, payment gateway, and computer telecommunications equipment in good working order at MERCHANT's sole expense. (c) MERCHANT shall advise Paya-EFT immediately in the event of a security breach or breakdown of related equipment, electronic check software problems, and/or any other system failure. (d) MERCHANT acknowledges that Paya-EFT is not responsible for any related Internet or computer and telecommunications equipment used by the MERCHANT. MERCHANT also acknowledges that Paya-EFT solely functions as the processor and assumes no liability in the performance of MERCHANT's payment gateway. In this regard, Paya-EFT shall not be responsible for any unauthorized tampering or altering to software specifically installed by Paya-EFT on the part the MERCHANT or MERCHANT's agent. Paya-EFT's approval of equipment and/or software, including without limitation payment gateway software, does not constitute an express or implied warranty, representation or endorsement of such equipment and MERCHANT accepts responsibility for selection and compliance with the Rules of such equipment and/or software. In the event of a security breach of MERCHANT'S records or payment gateway, MERCHANT is required to notify Paya-EFT immediately of such a breach, and to provide as much information as may be required to allow Paya-EFT to act accordingly to protect Paya-EFT's legal rights and responsibilities. MERCHANT further agrees to immediately remove and properly dispose of Paya-EFT's previous version releases of any related software and to utilize the most current software version releases upon receipt of such from Paya-EFT. In the event of termination, MERCHANT shall immediately and unconditionally remove all software related to Paya-EFT services at MERCHANT's expense. 5. DATA RETENTION: VERIFICATION AND SECURITY REQUIREMENTS. Merchant agrees to complete all transactions in accordance with the provisions of this Agreement, the Rules and such rules of operation as may be established by Paya-EFT from time to time. Merchant shall retain data on file adequate to permit remaking of Entries for seven (7) banking days following the date of their transmittal by Paya-EFT as provided herein, and shall provide such data to Paya-EFT upon its request. MERCHANT shall retain all records related to authorization including all sales and credit receipts and authorizations for a period of no less than two years following the date of the transaction or no less than two years following MERCHANT's receipt of a customer's payment authorization revocation. Merchant represents and warrants that it shall ensure that the financial information it receives is protected by security practices and procedures that include (i) physical security to protect against theft, tampering or damage, (ii) personnel and access controls to protect against unauthorized access and use, (iii) network security to ensure secure capture, storage and distribution, (iv) at least 128-bit RC4 encryption technology, (v) commercially reasonable fraud detection systems, (vi) procedures to verify routing numbers and authenticate consumer identity, and procedures to establish credit -worthiness and exposure limits for its customers, and (vii) MERCHANT's payment gateway must clearly notify the customer that they are initiating an ACH debit authorization and MERCHANT's authorized payment gateway shall obtain a customer authorization in the form of an electronically signed ACH authorization or similarly authenticated (unique security code or PIN) in accordance with the Rules that clearly demonstrates the customer's assent to authorization for each transaction submitted for electronic processing. Merchants are required to retain the original authorization or copy of the original authorization in its original form that can be reproduced upon request. NACHA does not accept proof of an authorization as being a listing of the information captured at time of authorization. The following minimum information must be included in the authorization record: consumer IP address of origination, consumer name , consumer address, transaction amount, transaction effective date, consumer e-mail address (optional; industry recommended best practice), website where payment was accepted , signifying whether authorization is for a single or recurring/multiple debits, and debit schedule if recurring/multiple, consumer banking information, statement of how the consumer's identity was authenticated. Additionally, Merchant's website must provide the consumer with a phone number for inquiries or authorization revocation. Merchant agrees that it shall conduct or have conducted annual audits to ensure that the financial information it obtains from its customers is protected by security practices and procedures that include, at a minimum level, the practices set forth in (i) through (iii), hereinabove. MERCHANT or MERCHANT'S 3rd party software provider shall cooperate with Paya-EFT to test MERCHANT's Internet payment gateway and for any ongoing support issues. In all cases, CUSTOMER will provide check information via Internet and MERCHANT's payment gateway. Merchant must obtain the customer's authorization in accordance with the Rules that clearly demonstrates the customer's assent to authorization prior to initiating the ACH debit. In addition, if customer is providing recurring payment authorization, customer must be notified with the method to revoke its authorization. All items, goods and services purchased in a single transaction shall be included in the total amount on a single ACH authorization receipt and all entries must contain the correct customer bank routing, account, and check numbers, MERCHANT's correct name and telephone number; the date of the transaction, the total cash price of the sale (including all applicable state, federal or local surcharges and taxes) or the amount to be charged if a partial payment is made in cash or by credit card or the amount to be charged as the remaining balance owing after the deposit has been made, Customer's personal information including but not limited to CUSTOMER's full name, address, telephone number, driver's license state and number, and a disclosure statement that CUSTOMER understands he/she is authorizing MERCHANT to process an ACH debit entry to the CUSTOMER's account and that if the ACH debit entry is returned unpaid, a fee of $25.00 or as allowable by law may be charged to CUSTOMER's account. After customer authenticates the entry, MERCHANT's payment gateway must prompt the consumer to print the authorization and to retain a copy and no transaction may be altered after Paya-EFT authorizes acceptance of the ACH transaction. MERCHANT may not resubmit the transaction electronically or deposit the original source document by any means, once Paya-EFT authorizes a transaction. Failure to comply with the above requirements will, in addition to other penalties, subject MERCHANT to chargebacks or withholding of funds and may be grounds for immediate suspension/termination of services. MERCHANT ACKNOWLEDGES AND UNDERSTANDS THAT IT IS A FEDERAL VIOLATION TO PROCESS DEBIT REQUESTS AGAINST A CONSUMER BANK ACCOUNT WITHOUT ACCOUNT HOLDER'S EXPRESSED AUTHORITY. MERCHANT HEREBY ACKNOWLEDGE RECEIPT OF PROPER NOTICE THAT THE USE OF ANY COUNTERFEIT, FICTITIOUS, LOST, STOLEN, OR FRAUDULENTLY OBTAINED DEBIT INSTRUMENT TO UNLAWFULLY INITIATE A DEBIT TRANSACTION IS PUNISHABLE BY A MAXIMUM OF A $10,000 FINE PER INSTANCE UP TO A $500,000 MONTHLY FINE, IMPRISONMENT FOR A TERM OF TEN YEARS, OR BOTH. IT IS SPECIFICALLY UNDERSTOOD BY MERCHANT THAT ANY TRANSACTION EVENT INITIATED AS AN UNAUTHORIZED MANUAL ENTRY OR DEPOSIT BY MERCHANT AFTER MERCHANT HAS RECEIVED APPROVAL FOR ELECTRONIC DEPOSIT OF ACH TRANSACTION (S) OR IS INTENDED FOR ELECTRONIC DEPOSIT SHALL BE INTERPRETED AS AN UNLAWFUL DEBIT TRANSACTION PURSUANT TO THIS NOTICE. IN THE EVENT OF SUCH A VIOLATION, MERCHANT AGREES AND WARRANTS TO HOLD Paya-EFT AND ALL OF ITS ASSIGNS AND ASSOCIATES HARMLESS AND REIMBURSE Paya-EFT FOR THE TRANSACTION (S) WITHIN 24 HOURS OF SAID OCCURRENCE. IF MERCHANT REFUSES OR IS UNABLE TO REIMBURSE Paya-EFT FOR ANY SUCH OCCURRENCE, IT IS EXPRESSLY STATED AND UNDERSTOOD THAT THE MERCHANT IS IN DIRECT VIOLATION OF THIS AGREEMENT AND FEDERAL LAW, AND Paya-EFT WILL PURSUE ALL LEGAL, CIVIL, AND COLLECTION REMEDIES AS ARE POSSIBLE UNDER LAW AS REMEDY. 6. CUSTOMER's AUTHORIZATION INITIATES DEBIT ENTRY. MERCHANT acknowledges that the customer's authorization allows MERCHANT to instruct Paya-EFT to initiate an ELECTRONIC ACH TRANSACTION DEBIT ENTRY ("ENTRY") for MERCHANT against customer. It further permits Paya-EFT to reinitiate an ENTRY where the original ENTRY is returned and to assess a collection fee against CUSTOMER. All such collection fees shall be the sole property of Paya-EFT. Paya-EFT shall be entitled to multiple re -presentments and to assess a transaction fee as set forth on the Application against MERCHANT for each re -presentment. If an electronic check is returned unpaid after each re -presentment, Paya-EFT shall be entitled to debit the MERCHANT'S account for the amount of the electronic check. 7. RESTRICTIONS ON ACCEPTANCE OF ELECTRONIC CHECKS FOR ELECTRONIC PROCESSING. From time to time, Paya-EFT shall establish necessary security and identification procedures for presentment of checks for electronic processing pursuant to the Rules and applicable law. MERCHANT agrees to comply with such procedures and to accept such "properly presented" checks for electronic processing. Paya-EFT may establish minimum and maximum amount limitations on electronic checks presented for electronic processing by MERCHANT Application for Merchant Account— Check and ACH Processing REV 06252018 Page 7 of 8 PLEASE NOTE: The complete Merchant Agreement includes these Terms and Conditions and the Application on two (2) additional pages. 15-15 And MERCHANT shall not accept or attempt to process electronic checks in excess of the maximum limitations established by Paya-EFT. In no event will Paya-EFT accept or will MERCHANT attempt to process an electronic Checks -By -Web greater than: (i) $2,500 for MERCHANTS that have been identified as "Existing Relationship" (i.e. Bill Payment) Clients on the Application and (ii) $500 for all other MERCHANTS unless otherwise approved in writing by Paya-EFT. Paya-EFT shall also establish the number of electronic checks that may be submitted on a daily basis by any customer for electronic processing. MERCHANT agrees to provide Paya-EFT with any and all information needed to establish such limitations. MERCHANT further agrees to inform Paya-EFT immediately of any changes in business activities, rules or regulations, which may affect these limitations. MERCHANT further agrees to abide by these limitations as a condition for Paya-EFT to electronically process any checks. 8. AUTHORIZATION RETRIEVAL REQUESTS. Whereby a financial institution, regulatory or law enforcement agency, or similar authority has demanded from Paya-EFT proof of valid consumer authorization, in accordance with NACHA Rules, MERCHANT shall provide said proof of authorization to Paya-EFT within (2) business days. In the event that MERCHANT cannot provide the appropriate consumer authorization, and Paya-EFT suffers a penalty enforced by NACHA, Paya-EFT shall have the right to offset such penalty and charge MERCHANT a minimum of ($1000 per instance and up to a maximum of $100,000 per month until the problem is resolved. 9. DAILY SETTLEMENT OF TRANSACTIONS. `Batch out" shall mean that MERCHANT transmits all of the transactions to Paya-EFT by midnight (12:00 am) on the day Paya-EFT authorizes the sale. In addition, any transactions contained in an untimely batch out may be refused or become subject to chargeback or held until after a sixty-day period for consumer chargebacks by Paya-EFT. If so requested by Paya-EFT, all documentation related to the customer's Internet ACH Authorization, including but not limited to customer's telephone number and billing and shipping address, must be faxed and received by Paya-EFT within 48 hours from the request date. MERCHANT acknowledges that failure to batch out on a timely basis may be grounds for suspension or termination at Paya-EFT's sole discretion. Paya-EFT reserves the right to hold additional monies as necessary to reduce any risk associated with daily processing of electronic checks. Paya-EFT may, in its sole discretion and to insure against, place a hold on funds due to MERCHANT in settlement of transactions in order to insure against potential losses. Paya-EFT will then provide a net deposit to MERCHANT after a period of time acceptable to Paya-EFT (usually 90 days from transaction processing date). In addition, MERCHANT understands that a failure to batch out will delay funds being deposited into MERCHANTS' account. MERCHANT also acknowledges that Paya-EFT may apply a $25.00 fee for each Paya- EFT-assigned terminal ID number daily on which MERCHANT fails to transmit a timely batch out. 10. ELECTRONIC CHECK PROCESSING. Paya-EFT shall not be responsible for the settlement of any Checks -By -Web for which Paya-EFT has not received transactions Entries from MERCHANT for processing within twenty-four hours of the initial transaction date of the transaction. MERCHANT shall be required to submit all documentation related to the transactions to Paya-EFT at Paya-EFT's request. MERCHANT shall make its books and records available to Paya-EFT in order to verify compliance with this agreement and in order to verify any information in an Entry. 11. ELECTRONIC CHECKS FOR WHICH MERCHANT WILL NOT BE FUNDED FOR UNDER CHECKS -BY -WEB. In addition to the provisions set forth in this Agreement and notwithstanding any other provisions to the contrary, Paya-EFT shall have no obligation to reimburse MERCHANT for ACH transactions that are: (a) Not honored by the customer's financial institution because of the customer's instructions to "stop payment" on the original source document or electronic check; (b) Fraudulent, whether MERCHANT, its employees or agents are involved, either as a principal or as an accessory, in the issuance; (c) Accepted by MERCHANT or its employees with advance knowledge of the likelihood of its being dishonored even though authorized by Paya-EFT; (d) Lost, stolen, altered or counterfeit, and Paya-EFT has reason to believe that MERCHANT failed to use reasonable care in verifying the customer's identity; (e) Given as a substitute for a previously accepted check, whether or not the check was authorized by Company or, any check upon which MERCHANT has accepted full or partial payment; (f) One of multiple checks presented to MERCHANT in a single transaction for electronic processing; (g) For goods, if the goods are subsequently returned by customer or repossessed by MERCHANT or lien holder, within 65 days of date of purchase; (h) Not honored by the customer's financial institution because of the failure of, the closing of, or government - imposed restrictions on withdrawals from the financial institution; (i) Checks for which Paya-EFT previously denied authorization; 0) Not in compliance with this Agreement and not processed in accordance with the ACH transaction processing provisions of this Agreement; (k) Incorrect Routing and Account Number data Entry; (1) Unable to locate account or invalid account number returns or unauthorized corporate account returns. 12. PROVISIONAL SETTLEMENTS. MERCHANT acknowledges that all settlements between Paya-EFT and MERCHANT are provisional and are subject to the customer's rights to dispute the charges against the customer's account. 13. ADDITIONAL MERCHANT REPRESENTATIONS AND WARRANTIES. MERCHANT also represents and warrants that: (i) the description of type and nature of MERCHANT'S business in the Application is complete and accurate and will remain so during the term of this Agreement the Application has been signed by a principle of MERCHANT and that if there is a change in control of MERCHANT that MERCHANT will not submit Entries under this Agreement without Paya- EFT's prior written consent; (ii) in the event of a security breach of MERCHANT's records or payment gateway, MERCHANT will notify Paya-EFT immediately of such a breach and to provide as much information as may be required to allow Paya-EFT to act accordingly to protect Paya-EFT's legal rights and responsibilities and those of consumers affected by the breach; (iii) MERCHANT has not submitted Electronic checks drawn from its personal or business checking accounts on the MERCHANT's electronic check payment gateway; (iv) MERCHANT has used only the name and address contained in the Application on all its sales drafts; (v) MERCHANT has not submitted duplicates of any transaction; and (v) the banking information submitted to Paya-EFT for processing has not been altered by MERCHANT. Application for Merchant Account— Check and ACH Processing REV 06252018 Page 8 of 8 PLEASE NOTE: The complete Merchant Agreement includes these Terms and Conditions and the Application on two (2) additional pages. 15-16 Attachment C Pace Merchant Agreement 15-17 New Signer ❑ New Acct [Z] Addt'I Dept Unit Code Sales Agent Partner MCC Assoc IChain # For purposes of this application, "Processor" or "PACE" is Pace Payment Systems, Inc, located at 25129 The Old Rd Ste 222, Stevenson Ranch, CA 91381 and can be contacted at (888) 690-7555. Additional information can be found on the Pace website, www.pacepayment.com. "Merchant Bank" or "Member Bank" is Synovus Bank, d/b/a Columbus Bank and Trust Company, located at 1125 First Avenue, Columbus, GA, 31901, (706) 649-4900. Processor is a registered ISO/MSP of Columbus Bank and Trust Company. BUSINESS INFORMATION Merchant's DBA Name I Outlet Name (If Different From Legal Name) Merchant Legal Name (As It Appears On Tax Return) City of Newport Beach DBA Address (No PO Boxes) Mailing Address (If Different From DBA) 100 Civic Center Drive 100 Civic Center Drive DBA City I State I Zip Mailing City I State I Zip (If Different From DBA) Newport Beach, CA 92660 Newport Beach, CA 92660 Telephone Number Customer Service Number Business Description (949) 644-3141 1(949) 644-3141 Government Contact Name Website Meg Walsh www.newportbeachca.gov Email Fax Number Federal Tax ID: (as shown on your income tax return) mwalsh@newportbeachca.gov (949) 644-3073 1 95-6000751 Does Your Business Currently Yes No ® Average Ticket High Ticket Annual Volume % In Person I Online Accept Credit Cards? $ 199.44 $ 20,000.00 $ 20,000,000.00 2 1 98 Amex Acceptance YES O NO Amex Marketing YES ® NO O TYPE OF OWNERSHIP Amex Acceptance <$1,000,000.00 YES NO OState Government Agency ® Federal Government Agency O Public Utility ® Public School AUTHORIZED NAME TITLE Note: Privacy policy including with respect to the collection and use of social security numbers can be found at www.pacepayment.com BANK INFORMATION Name of Financial Institution Routing Number Account Number Type of Acccount Use this account for*(Select all that apply) 1* Chase • Checking O Debits O Deposits Savings 2** Checking ® Debits ® Deposits Savings *If nothing indicated, Financial Institution #1 will be used for all ACH activity. **AUTHORIZATION FOR AUTOMATIC FUNDS TRANSFER (ACH): The Merchant Bank (defined on page 1) is authorized to initiate or transmit automatic debit and/or credit entries and/or check entries to the account identified above and in the provided voided check (if applicable) relating to the above account (**) for all services contemplated under this Agreement. Said authority is granted to Merchant Bank's Processor and their agents. FEE SCHEDULE: DISCOVER3. VISA I MASTERCARD I SERVICE FEE Transaction Range Tier 1 Tier 2 Tier 3 Visa I MC I Disc Service Fee Rate 1 2.85% Rate 2 Rate 3 Amex Service Fee Rate 1 2.85% Rate 2 Rate 3 ACH Payment Service Fee Rate 1 Rate 2 Rate 3 ABSORBED• Visa I MC I Other PIN Debit AMEX AMEX Mid AMEX Non Disc Debit Rate: F u Qual ual ProcessingTransaction *Transaction Fee applies to all Authorized Credit Rate: Rate Fee* Requests on All Card Brands : Visa I MC I Disc I AmEx OTHER MONTHLY Internet Set Up Internet Monthly Gateway Monthly Fee Gateway Per Item Monthly Maintenance Fee Regulatory Compliance PCI Insurance Chargeback Fee Retrieval Fee Monthly Minimum 20.00 PASS THROUGH PRICING ADDENDUM -**THIS SECTION ONLY APPLIES IF COST PLUS PRICING IS CHECKED- DOES NOT APPLY WITH SERVICE FEE OR FLAT RATE PRICING Cross border international transaction assessments/program support, MC network access/brand usage (NABU), MC Acquiring License Fee, MC Account Status Inquiry Services (ASIS), Visa US Acquirer Processing Fee (APF), Visa Zero Floor Limit, Visa Misuse of the Authorization System, Visa Fixed Acquiring Network Fee (FANF), Visa Debit Integrity, Visa Auth & Settlement, Acquirer File Transaction Fee, MC Processing Integrity, I/C Acquirer Fee, Discover Data Usage, American Express Access and Processor fees may apply. Further Visa/MC/AMEX/DISC/Pay Pal mandated fees, including association Kilobyte Fees, may also apply. Batch Close Fee: All batch closing and batch inquiries are considered "transactions" and will be billed at the same rate as Visa/MC/AMEX/DISC/PayPal Trans Fees unless specified. AMEX discount rate is determined by business type. **If applying for Interchange plus, fees quoted are in addition to Processor interchange, fees, dues and assessments. Monthly Minimum Discount: Applies to Discount Rate & captured transaction fees.**Transactions that do not meet Interchange Qualifications are subject up to a 1.00% Surcharge. Merchant's Signature: Name of Authorized Signer (Print) Title Date X Pace Payment Systems is a registered ISO of Synovus Bank, DBA Columbus Bank & Trust ©2019 All Rights Reserved Rev. 09/19 SYN-ISD6_PQ8 I I Please check this box if you are applying for processing services for additional merchant locations. If the additional locations are under common ownership with the Merchant named herein (are the same legal entity with the same legal name) and have the same federal tax identification number and same authorized signatory, please submit the Additional Merchant Addendum as Exhibit A with this application. Please note that all additional locations, along with the Primary location, will be subject to and governed by the terms and conditions of this application and the Merchant Card Processing Agreement referenced in and included with this application. If the additional locations are not under common ownership or have varying tax identification numbers or authorized signatories, you will be required to submit a separate Application for Merchant Card Processing per location. Number of locations? If you are affiliated with an existing account, please provide existing Merchant ID#: Synovus Bank - 1125 First Avenue - Columbus, GA 31901 (706)649-4900 Important Member Bank Responsibilities 1. A Visa Member is the only entity approved to extend acceptance of Visa products directlyto a Merchant. 2. A Visa Member must be a principal partytothe Merchant Card Processing Agreement. 3. The Visa Member is responsiblefor and must provide settlement funds to the Merchant. 4. The Visa Member is responsiblefor all funds held in reserve that are derived from settlement. 5. The Visa Memberis responsible for educating Merchants on any Visa Rules with which Merchants must comply during the course of operation. Important Merchant Responsibilities 1. Ensure compliance with cardholderdatasecurity and storage requirements. 2. Maintain fraud and chargebacks below thresholds. 3. Review and understand the terms of the Merchant Processing Agreement. Download a copy from Pace's website at: https://www.pacepayment.com/terms-conditions 4. Comply with Visa Rules. The responsibilities listed above do not supersede the terms of the Merchant Card Processing Agreement and are provided to ensure the Merchant understands some important obligations of each party and that the Visa Member (Acquirer) is the ultimate authority should the Merchant experience any problems. Agreement Signature: By signing below, each of the Merchant and Guarantor(s) and each individual signing below as an Authorized Signer of Merchant (1) certifies that all information and documents submitted with this Application are true and complete; (2) authorizes Merchant Bank, Processor and their respective agents to verify any of the information given, including credit references, and to obtain business credit reports, including requesting reports from consumer reporting agencies on persons signing below as an Authorized Signer Merchant (if such person asks Merchant Bank or Processor whether or not a consumer report was requested, Merchant Bank or Processor will tell such person, and if Merchant Bank or Processor received a report, Merchant Bank or Processor will give such person the name and address of the agency that furnished it); (3) acknowledges receipt of the Merchant Card Processing Agreement ("Agreement") including the Continuing Guaranty ("Guaranty") contained within the Agreement, and of the CNP Addendum, Special Services Addendum and the Merchant Use and Disclosure of BIN Information Addendum (each, an "Addendum"), that can be reviewed and downloaded from https://www.pacepayment.com/terms-conditions, each of which documents is incorporated herein by this reference, and agrees to be bound by and perform in accordance with all provisions, terms and conditions of the Agreement, the Guaranty, and each such Addendum; (4) agrees to be bound by and perform in accordance with all terms, conditions and provisions of any Merchant Card Processing Agreement between any Merchant Affiliate of Merchant and Processor and its agents and Merchant Bank ("Merchant Affiliate Agreement"), regardless of whether such Merchant Affiliate Agreement currently exists or is executed, amended or supplemented at some future date; (5) agrees that Processor and its agents and Merchant Bank may rely upon copies or facsimiles of this Application bearing Merchant's and ignatures, or on copies or facsimiles of other documents bearing Merchant's signatures, and that any such copies or facsimiles shall be treated for all purposes as originals of the Application or other document; and (6) certifies that Merchant does not and will not provide, offer or facilitate gambling services, including offering or facilitating internet gambling services, or establishing quasi -cash, credits or monetary value of any type that may be used to conduct gambling. Without limiting the generality of the foregoing, each individual signing below as an Authorized Signer of Merchant certifies that (i) he/she is identified above, either as tan Authorized Signer of Merchant, and (ii) he/she is authorized to open accounts for Merchant at financial institutions, and (iii) all information provided about the Merchant legal entity is complete and correct, and (iv) to the best of his/her knowledge. The undersigned acknowledge that Processor (and not Merchant Bank) will settle your American Express, JCB, and Diners transactions and (a) Merchant will receive one consolidated statement from Processor that will reflect Merchant's Visa, MasterCard, American Express, and Discover transactions;(b)Merchant's American Express settlement funds will be paid at the same time and in the same manner as Merchant's Visa, MasterCard, and Discover settlement; and (c) Merchant will not have a direct relationship with American Express and the terms set forth in the MPA for American Express transactions will apply. By signing below, Merchant agrees to be bound by the American Express merchant requirements contained in the Operating Guide and for any other lawful business purposes, including commercial marketing communications purposes within the parameters of AMERICAN EXPRESS CARD ACCEPTANCE, and important transactional or relationship communications from AMERICAN EXPRESS. AMERICAN EXPRESS may use the information about MERCHANT obtained in the AGREEMENT at the time of setup to screen and/or monitor MERCHANT in connection with AMERICAN EXPRESS marketing and administrative purposes. MERCHANT agrees it may receive messages from AMERICAN EXPRESS, including important information about AMERICAN EXPRESS products, services, and resources available to its business. These messages may be sent to the mailing address, phone numbers, email addresses or fax numbers of MERCHANT. MERCHANT may be contacted at its wireless telephone number and the communications sent may include autodialed short message service (SMS or "text") messages or automated or prerecorded calls. MERCHANT agrees that it may be sent fax communications. MERCHANT may opt -out of receiving future commercial marketing communications from AMERICAN EXPRESS by not checking the "Yes" checkbox on page 1 above, or may opt out at any time by contacting Processor. Note that MERCHANT may continue to receive marketing communications while AMERICAN EXPRESS updates its records to reflect this choice. Opting out of commercial marketing communications will not preclude MERCHANT from receiving important transactional or relationship messages from AMERICAN EXPRESS. TSYS Acquiring Solutions, LLC, 1601 Dodge Street, Omaha, NE 68102, is Merchant's acquirer for American Express, or will convey American Express sales on Merchant's behalf. IRS Certification: Each individual signing below as an Authorized Signer of Merchant, under penalties of perjury, certifies that (1) the Merchant's taxpayer identification number shown on this form is the Merchant's correct taxpayer identification number; and (2) the Merchant is not subject to backup withholding because (a) the Merchant is exempt from backup withholding, or (b) the Merchant has not been notified by the Internal Revenue Service (IRS) that it is subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified the Merchant that it is no longer subject to backup withholding; and (3) the Merchant identified is a U.S. citizen or other U.S. person as defined in the IRS Form W-9 instructions. (Certification Instructions: You must cross out and initial item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. IRS Form W-9 instructions are available from Processor upon request.) Merchant's Signature: Name of Authorized Signer (Print) Title Date X Signing for Processor: Name (Print) Title Date Signing for Member: Name (Print) Name of Member: Date Synovus Bank, DBA Columbus Bank & Trust Pace Payment Systems is a registered ISO of Synovus Bank, DBA Columbus Bank & Trust ©2019 All Rights Reserved Rev.09/19 SYN-ISO-A-PACE 15-19