2015-84 PAYMENT PROCESSING AGREEMENT
This Payment Processing Agreement("Agreement"),including all exhibits and addendums hereto, is
made by an between Forte Payment Systems, Inc.("Forte") a California corporation and
cvlia Clam i)r# ("Agency").
Forte and its affiliates provide payment processing services including Credit Card,Debit Card and
Automated Clearing House("ACH")processing services(the"Services")selected by the Agency who
provides services to,or otherwise has a business relationship with, individuals and other entities
("Constituents").
1. Definitions.
Account: Bank Account or Card Account.
Account Holder: The owner of the Card or Bank Account to which a Transaction may apply.
Business Day:Any day other than Saturday,Sunday or Federal Holidays.
Card: Credit Card or Debit Card.
Chargeback: The procedure by which an Account Holder attempts to reverse the funding of a
Transaction by contactmg the Account Issuer to which the Transaction was performed.
Issuer: The bank or financial institution which issued the Account to the Constituent.
Downgrade: Any transaction that fails to qualify for the best level of Interchange qualification.
Payment Associations: MasterCard,Visa,Discover,American Express,NACHA and any
applicable debit card networks.
Payment Processor: An entity which processes electronic financial transactions, including but
not limited to ACH,Credit Card,Debit Card, into the appropriate network for each type of
payment,on behalf of merchants.
Rule: Operating Rules which are established by the applicable Payment Associations.
Regulation: Any applicable Local,State and Federal Law.
Settlement Account:A checking or savings account at a financial institution designated by
Agency as the account to be debited and credited by FORTE or Processor for any amounts owed
as a result of any applicable Transactions.
Transaction: Electronic request submitted to FORTE to affect a Constituent's Account.
Validation Code: The 3 or 4 digit security code printed on the signature panel of most Cards or
on the top right of American Express Cards.
2. Use License.
Subject to the terms and conditions of this Agreement,FORTE hereby grants to Agency a non-
exclusive and non-transferable license to access and use FORTE's products and services
contracted for and Agency hereby accepts such license and agrees to utilize and access the
Services in accordance with the practices and procedures established by FORTE. Agency may
use the Services(a)for its own internal business purposes and operations,and/or(b)as a service
provided to its Constituents,unless otherwise notified by FORTE. No license or right to use,
reproduce,translate,rearrange,modify,enhance,display,sell, lease,sublicense or otherwise
distribute,transfer or dispose of any of FORTE's Proprietary Property,as defined in Section 2
below,in whole or in part,is granted except as expressly provided by this Agreement. Neither
Agency nor any of its affiliates shall reverse engineer,decompile or disassemble the Proprietary
Property. Additionally,nothing in this Agreement shall be construed to provide Agency with a
license of any third-party proprietary information or property.
3. Ownership.
All computer programs,trademarks,service marks,patents,copyrights,trade secrets,know-how,
and other proprietary rights in or related to FORTE's products and services(the"Proprietary
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Property"),are and will remain the sole and exclusive property of FORTE,whether or not
specifically recognized or perfected under applicable law. FORTE shall own all rights,title and
interest, including all intellectual property rights,in and to any improvements to the existing
FORTE products or services and/or any new programs,upgrades,modifications or enhancements
developed by FORTE in connection with rendering any services to Agency(or any of its
affiliates),even when refmements and improvements result from Agency's request. To the
extent,if any,that ownership in such refinements and improvements does not automatically vest
in FORTE by virtue of this Agreement or otherwise,Agency hereby expressly transfers and
assigns(and,if applicable,shall cause its affiliates to transfer and assign)to FORTE all rights,
title,and interest which Agency or any of its affiliates may have in and to such refmements and
improvements.
4. Confidentiality.
Agency acknowledges that the products,services and information relating to FORTE's products
and services(including without limitation these Terms and Conditions)contain confidential and
proprietary information developed by,acquired by,or licensed to FORTE(the"Confidential
Information"). Agency will take(and will cause its affiliates to take)all reasonable precautions
necessary to safeguard the confidentiality of the Confidential Information.Neither Agency nor
any of its affiliates will make any unauthorized use of the Confidential Information or disclose,in
whole or in part,the Confidential Information to any individual or entity,except to those of
Agency's employees or affiliates who require access for Agency's authorized use of the products
or services and agree to comply with the use and nondisclosure restrictions applicable to the
Confidential Information. This Section will not apply to Confidential Information that(i)was
already available to the public at the time of disclosure,(ii)becomes generally known to the
public after disclosure to the other party,through no fault of the other party,or(iii)is disclosed
under force of law,governmental regulation or court order. Agency acknowledges that any
unauthorized use or disclosure by it or any of its affiliates of the Confidential Information may
cause irreparable damage to FORTE. As such,if FORTE becomes aware of Agency's breach or
threatened breach of this Section,FORTE may suspend any and all rights granted to Agency
under these Terms and Conditions and shall be entitled to injunctive relief,without the need of
posting a bond,in addition to all legal or equitable relief that may be available to FORTE.
5. Term and Termination
5.1 Term. This Agreement shall become effective upon the date this Agreement is executed by
both parties and shall have an initial term of three(3)years. Thereafter,this Agreement will
automatically renew for additional one(1)year terms unless either party provides written
notice of its intent to terminate the Agreement no later than 90 days prior to the end of any
term.
5.2 Exclusivity.
During the term of this Agreement,Agency shall use FORTE as its exclusive provider of all
Services.
5.3 Termination. In the event of a material breach of this Agreement by one party and failure to
cure within thirty(30)days of receipt of written notice of the breach,the other party may
terminate by providing written notice of termination. Additionally,FORTE may
immediately terminate this Agreement without prior notice in the event that(i)there is a
material adverse change to Agency or its financial condition; or(ii)Agency experiences
excessive chargebacks;or(iii)Agency experiences an actual or suspected data security
breach;or(iv)Agency violates any applicable Law,Rule or Regulation; or(v)termination is
deemed necessary by FORTE to comply with any applicable Law, Rule or Regulation.
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6. Transaction Processing
6.1 Accepting Transactions.FORTE shall process Credit Card,Debit Card and ACH
Transactions on the Agency's behalf on a 24-hour basis.Transactions which are received
before the daily designated cut-off time will be originated for settlement through the
corresponding Payment Network. Transactions which are received after the designated cut-
off time will be included in the next business day's settlement processing.
6.1.1 Sale Transactions. All Transactions sent to FORTE utilizing the"Sale"method will
automatically be captured for settlement in time for the next designated cut-off time.
6.1.2 Auth/Capture Transactions. If Agency opts to utilize an"Authorize"method
rather than a"Sale"method for a Transaction,then it will be the responsibility of
Agency to submit a corresponding"Capture"Transaction within 48 hours of the
authorization in order to complete the Transaction process for settlement.
Transactions which are not captured within 48 hours of Authorization are untimely
and may be rejected by FORTE.
6.2 Transaction Format. FORTE is responsible only for processing Transactions which are
received and approved by FORTE in the proper format,as established by FORTE.
6.2.1 Card Not Present Transactions. For card-based transactions in which the card is
not present,Agency must obtain and include as part of the authorization request the 3
or 4 digit Validation Code and cardholder's billing address information.
6.3 Agency Account. In order to provide transaction processing services,FORTE may need to
establish one or more Agency Accounts on Agency's behalf or require Agency to establish a
Agency Account with a provider pre-approved by FORTE.
6.4 Limited-Acceptance Agency. If appropriately indicated on Agency's application attached
hereto,Agency may be a limited-acceptance Agency,which means that Agency has elected
to accept only certain Visa and MasterCard card types(i.e.,consumer credit,consumer debit,
and commercial cards)and must display appropriate signage to indicate the same. ACHD
and its associated credit card Acquirer,Vantiv LLC("Acquirer")have no obligation other
than those expressly provided under the Operating Regulations and applicable law as they
may relate to limited acceptance.Agency,and not ACRD or Acquirer,will be solely
responsible for the implementation of its decision for limited acceptance, including but not
limited to policing the card type(s)accepted at the point of sale.
6.5 Bona Fide Sales. Agency shall only complete sales transactions produced as the direct result
of bona fide sales made by Agency to cardholders,and is expressly prohibited from
processing,factoring, laundering,offering,and/or presenting sales transactions which are
produced as a result of sales made by any person or entity other than Agency,or for purposes
related to financing terrorist activities.
6.6 Setting Limits on Transaction Amount. Agency may set a minimum transaction amount to
accept a card that provides access to a credit account,under the following conditions: i)the
minimum transaction amount does not differentiate between card issuers;ii)the minimum
transaction amount does not differentiate between MasterCard,Visa,or any other acceptance
brand;and iii)the minimum transaction amount does not exceed ten dollars(or any higher
amount established by the Federal Reserve). Agency may set a maximum transaction amount
to accept a card that provides access to a credit account,under the following conditions:
Agency is a i)department,agency or instrumentality of the U.S.government;ii)corporation
owned or controlled by the U.S.government;or iii)Agency whose primary business is
reflected by one of the following MCCs: 8220, 8244, 8249—Schools,Trade or Vocational;
and the maximum transaction amount does not differentiate between MasterCard,Visa,or
any other acceptance brand.
6.7 Modifying Transactions.Agency shall regularly and promptly review all Transactions and
shall immediately notify FORTE upon discovery of any and all discrepancies between
Agency's records,FORTE and Agency's bank,or with respect to any Transaction that
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Agency believes was made erroneously or without proper authorization. At Agency's
request,FORTE will make reasonable efforts to reverse,modify,void or delete a Transaction
after it has been submitted for settlement. All requests must be made in writing(electronic
mail will be deemed as"in writing"for these purposes),signed or sent by an individual pre-
authorized by Agency to make such requests and delivered to FQRTE. Agency agrees that
FORTE will not be held responsible for any losses,directly or indirectly, incurred by Agency
or other third parties as a result of FORTE's inability to accomplish the request before the
Transaction has been processed through the applicable Payment Network.
6.8 Delay or Rejection of Transactions. FORTE may delay or reject any Transaction without
prior notification to Agency which is improperly formatted,is untimely,is missing
information which may cause it to downgrade or if FORTE has reason to believe such
Transaction is fraudulent or improperly authorized or for any reason permitted or required
under the Rules or Regulations. FORTE shall have no liability to Agency by reason of the
rejection of any such Transaction.
6.9 Returned Items. FORTE shall make available to Agency details related to the receipt of any
Transaction that is returned unpaid or Transaction which is charged back and shall credit or
charge such returned item to Agency's Settlement Account.
6.10 Chargebacks. Agency acknowledges and agrees that it is bound by the Rules and
Regulations of the Payment Associations with respect to any Chargeback. Agency
understands that obtaining an authorization for any sale shall not constitute a guarantee of
payment,and such sales can be returned or charged back to Agency like any other item
hereunder. In the event a Transaction is charged back for any reason,the amount of such
Transaction will be deducted from Agency's designated settlement account or any payment
due to Agency.
6.11 Excessive Chargebacks. Using limits established by Associations as a standard for
review,FORTE reserves the right to suspend and/or terminate Agency's access to the
Services should Agency's chargeback ratio exceed allowable limits in any given period.
FORTE will make reasonable efforts to provide Agency with notice and a time to cure its
excessive chargebacks prior to suspending or terminating Agency's access to the Services.
Agency acknowledges and expressly authorizes FORTE, in compliance with Payment
Association Rules and Regulations,to provide to the Payment Associations and applicable
regulatory bodies,Agency's name and contact information as well as transaction details
should Agency's chargeback ratio exceed the allowable limits in any given period.
6.12 Resubmitting Transactions. Agency shall not re-submit any Transaction unless it is
returned as(i)Insufficient funds(R01);or(ii)Uncollected funds(R09);or(iii)unless a new
authorization is obtained from Constituent.
6.13 Settlement. Settlement of Agency's funds for Transactions, less any Chargebacks or
Returns,to Agency's designated settlement account will occur within 72 hours of Origination
excluding weekends and US federal banking holidays. Settlement of Transactions will occur
via electronic funds transfer over the ACH Network Upon receipt of Agency's sales data for
card transactions through ACHD's Services,Acquirer will process Agency's sales data to
facilitate the funds transfer between the various Associations and Agency. After Acquirer
receives credit for such sales data,Acquirer will fund Agency,either directly to the Agency-
Owned Designated Account or through ACHD to an account designated by ACHD("ACHD
Designated Account"),at Acquirer's sole option,for such card transactions. Agency agrees
that the deposit of funds to the ACHD Designated Account shall discharge Acquirer of its
settlement obligation to Agency,and that any dispute regarding the receipt or amount of
settlement shall be between ACHD and Agency.Acquirer will debit the ACHD Designated
Account for funds owed to Acquirer as a result of the Services provided hereunder,unless a
Agency-owned account is otherwise designated below. Further,if a cardholder disputes a
transaction, if a transaction is charged back for any reason,or if ACHD or Acquirer
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reasonably believe a transaction is unauthorized or otherwise unacceptable,the amount of
such transaction may be charged back and debited from Agency if settled to Agency-owned
account or debited from the ACID Designated Account if settled to that account.
6.14 Reporting. FORTE will make daily Origination and Deposit reports available to Agency
on a 24/7 basis through the FORTE Internet-based Payments Gateway platform.
7. Transaction Authorization
7.1 Constituent Authorization.Agency shall obtain authorization from Constituent prior to
requesting a Transaction to Constituent's account.
7.2 Retention. Agency shall retain proof of Constituent's authorization for a period of not less
than two(2)years for standard transactions and for a period of five(5)years for health-
related transactions from the authorization date or revocation of authorization date and shall
provide such proof of authorization to FORTE upon request within five(5)business days of
the request.
7.3 Revoked Authorization.Agency shall cease initiating Transactions to a Constituent's
account immediately upon receipt of any actual or constructive notice of that Constituent's
termination or revocation of authority. Agency may re-initiate Transactions to a
Constituent's account only upon receiving new authorization from Constituent.
8. Agency Prohibitions. Agency must not i)require a cardholder to complete a postcard or similar
device that includes the cardholder's account number,card expiration date,signature,or any other
card account data in plain view when mailed, ii)add any tax to transactions,unless applicable law
expressly requires that a Agency impose a tax(any tax amount, if allowed,must be included in
the transaction amount and not collected separately),iii)request or use an account number for any
purpose other than as payment for its goods or services, iv)disburse funds in the form of travelers
checks if the sole purpose is to allow the cardholder to make a cash purchase of goods or services
from Agency,v)disburse funds in the form of cash unless Agency is dispensing funds in the form
of travelers checks,TravelMoney cards,or foreign currency(in such case,the transaction amount
is limited to the value of the travelers checks,TravelMoney cards,or foreign currency,plus any
commission or fee charged by the Agency),or Agency is participating in a cash back service,vi)
submit any transaction receipt for a transaction that was previously charged back to the acquirer
and subsequently returned to Agency, irrespective of cardholder approval,vii)accept a Visa
consumer credit card or commercial Visa product issued by a U.S. issuer to collect or refinance
an existing debt,viii)accept a card to collect or refinance an existing debit that has been deemed
uncollectable by Agency,or ix)submit a transaction that represents collection of a dishonored
check.Agency further agrees that,under no circumstance,will Agency store cardholder data in
violation of the Laws or the Operating Regulations including but not limited to the storage of
track-2 data.Neither Agency nor its Agent shall retain or store magnetic-stripe data subsequent to
the authorization of a sales transaction.
9. ACH Settlement Authorization. Agency authorizes FORTE to electronically debit and credit
Agency's designated bank account(s)for any amounts owed to or by Agency in accordance to the
terms of this Agreement.
10. Constituent Disputes.
All disputes between Agency and its Constituent(s)relating to any Transaction processed under
this Agreement will be settled by and between Agency and Constituent. Agency agrees that
FORTE bears no responsibility or involvement in any such dispute.
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11. Compliance with Laws,Rules and Regulations.
In performing its duties under this Agreement,each party agrees to comply with all applicable
Rules,Regulations and Laws. Agency agrees to cooperate and provide information requested by
FORTE to facilitate FORTE's compliance with any applicable Law,Rule or Regulation.
Additionally,Agency shall reimburse FORTE for any fines or loss of funds imposed on FORTE
or any costs incurred by FORTE for any violation of the Rules,Regulations or Laws by Agency.
Without limiting the foregoing,Agency agrees that it will fully comply with any and all
confidentiality and security requirements of the USA Patriot Act(or similar law,rule or
regulation),VISA,MasterCard,Discover,and/or Payment Associations, including but not limited
to the Payment Card Industry Data Security Standard,the VISA Cardholder Information Security
Program,the MasterCard Site Data Protection Program,and any other program or requirement
that may be published and/or mandated by the Associations.
12. Pricing and Payment.
12.1 FORTE will provide the Services in accordance with the pricing fee schedule(s)attached
hereto as Appendix A. Pricing schedules which utilize an Absorbed Fee Model will be
billed to the Agency monthly in arrears and will automatically be debited from Agency's
designated account via ACH Debit. Pricing schedules which utilize a Service Fee Model
will result in a processing fee being charged to the Constituent in the form of a non-
refundable service fee which is either(i)added to;or(ii)charged as a separate transaction to
the Constituent at the time of payment.
12.2 Pricing schedules which utilize a flat service fee model are calculated based on historical
or estimated transactional amount activity by Agency. In the event that experiential
transaction activity varies significantly from the historical or estimated amounts,FORTE
shall have the right to adjust the service fee in accordance to the experiential transaction
activity.
12.3 FORTE's pricing is subject to the underlying fees established by the Payment
Associations and its service providers. As such,in the event FORTE experiences an increase
in cost for any processing services utilized by Agency during any term of this Agreement,
FORTE will pass through the increases with no additional markup to Agency. FORTE will
provide Agency a minimum of thirty(30)days notice of any change or adjustment in fees.
13. Indemnification.
Each party bears all responsibility for its own employees'actions while in its employ.Each party
shall indemnify and hold the other party harmless from and against any and all claims,demands,
actions, losses,damages,liabilities,expenses,expenditures,and costs including but not limited to
attorneys'fees and other costs of defense,including settlement costs,that relate to or result from
(i)any material breach of this Agreement,including but not limited to a breach of the party's
representations and warranties contained herein;or(ii)any alleged violation by the party of any
applicable Law,Rule or Regulation.
14. Limits of Liability.
14.1 Neither party shall be liable to the other party or to any third party for any special,
consequential, incidental or punitive damages of any kind or nature incurred in relation to
this Agreement. FORTE's maximum liability hereunder for any claims whatsoever shall not
exceed the greater of(i)$50,000;or(ii)the total amount of all fees paid by Agency to
FORTE during the three(3)month period preceding the origination of the claim giving rise
to liability. The limitations of liability contained in this section shall apply without regard to
whether other provisions of the Agreement have been breached or have proven ineffective.
14.2 FORTE shall not be held responsible for errors,acts or failures to act of others,including,
and among other entities,banks,other processors,communications carriers or clearing
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houses through which Transactions may be originated or through which FORTE may receive
or transmit information,and no such entity shall be deemed an agent of FORTE.
15. Representations and Warranties.
15.1 FQRTE's Representations and Warranties.
15.1.1 FORTE represents and warrants to Agency that FORTE's agreement to provide its
products and services to Agency and to perform the Services hereunder does not
violate any agreement or obligation between FORTE and any third party.
15.1.2 To the best of FORTE's knowledge,no performance of its obligations hereunder will
infringe on any copyright,patent,trade secret or other proprietary right held by any
third party.
15.1.3 When executed and delivered by FORTE,the agreement with Agency will constitute
the legal,valid,and binding obligation of FORTE,enforceable in accordance with its
terms.
15.2 Agency's Representations and Warranties.
15.2.1 Agency's agreement to license FORTE's products and services and to engage
FORTE to perform the Services hereunder does not violate any agreement or
obligation between Agency and any third party.
15.2.2 To the best of Agency's knowledge,neither any information delivered by Agency to
Forte in support of this Agreement nor Agency's performance of its obligations
hereunder will infringe on any copyright,patent,trade secret or other proprietary
right held by any third party.
15.2.3 None of the activities for which Agency has engaged the services of Forte shall
violate any international,federal,state,or local law or regulation,including but not
limited to laws relating to consumer non-public financial information.
15.2.4 When executed and delivered by Agency,the agreement with Forte will constitute
the legal,valid,and binding obligation of Agency,enforceable in accordance with its
terms.
16. Service Policy.
Except as otherwise specifically provided herein,Forte's products and services are provided
hereunder"As Is"without warranty of any kind. Agency acknowledges and understands that
Forte does not warrant that the Services will be uninterrupted or error free and that Forte may
occasionally experience delays or outages due to disruptions that are not within Forte's control.
Any such interruption shall not be considered a breach of this Agreement by Forte. Forte shall
use its best efforts to remedy any such interruption in service as quickly as possible.
17. Force Majeure.
Neither party shall be liable for,or be considered in breach of or default under the Agreement on
account of any delay or failure to perform its obligations hereunder as a result of any causes or
conditions that are beyond such party's reasonable control and that such party is unable to
overcome through the exercise of commercially reasonable diligence.If any force majeure event
occurs,the affected party shall give prompt written notice to the other party and shall use all
commercially reasonable efforts to minimize the impact of the event.
18. Assignment.
The rights granted under this Agreement shall not be assigned by either party without the prior
written consent of the other party,which shall not be unreasonably withheld.
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19. Choice of Law and Venue.
This Agreement shall be governed by and construed in accordance with the internal laws of the
state in which the party being sued is domiciled.
20. Amendment.
Except as otherwise provided for herein,the terms and conditions of this Agreement shall not be
modified or amended except in writing,signed by the parties hereto and specifically referring to
this Agreement.
21. Publicity.
Neither party shall use the other party's name,logo or service marks in conjunction with a press
release or advertisement without first obtaining written approval.
22. Notice.
Any notice required to be given by either party hereunder,shall be in writing and delivered
personally to the other designated party,or sent by any commercially reasonable means of
receipted delivery,addressed,to that party at the address most recently provided in writing.
Either party may change the address to which notice is to be sent by written notice to the other
under any provision of this paragraph.
Notices to Forte: Notices to Agency:
Forte Payment Systems C;A 0-c- GI PtI. 0 r�
500 W.Bethany (pi 1n). t-(6,n4r0Se S4.
Suite#200 CVe.t - et 4'1 34{1 it
Allen,TX 75013
Attn: General Counsel t r*v t : :roe C/A"•2414_
23. Headings.
The headings contained in this Agreement are for convenience of reference only and shall not
affect the meaning of any provision of this Agreement.
24. Severability.
Should any term,clause or provision herein be found invalid or unenforceable by a court of
competent junsdiction,such invalidity shall not affect the validity or operation of any other term,
clause or provision and such invalid term,clause or provision shall be construed to most closely
reflect the original intent of the parties.
25. Entire Agreement;Waiver;Counterparts.
This Agreement constitute the entire understanding of the parties,and revoke and supersede all
prior agreements between the parties and are intended as a final expression of their agreement.
Either party's waiver of any breach of any provision of this Agreement shall not be deemed a
waiver of any subsequent breach of same or other provision. This Agreement may be executed in
two or more counterparts,each of which shall be deemed an original and all of which together
shall constitute one instrument.
[SIGNATURES ON SEPARATE PAGE]
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IN WITNESS WHEREOF,the undersigned,being duly authorized thereto by their respective
organizations,have executed this Agreement as of the date set forth below.
Forte Paym ste s,In . Agency:
By: By:
Name: Charles E. Patrick, Ill Name: 3a 1/10v
Title: Chief Technology Officer Title: 1C/•c4A /,f //41949
Date: 09/16/15 Date: c/1 fr
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