Terms and Conditions

In consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Virtual Check and Merchant, intending to be legally bound, do hereby agree as follows.

1. Laws & Rules 2. Merchant Duties 3. Service Access 4. Security 5. Errors & Cancellations 6. Reserve 7. Account Reconciliation 8. Update Notice 9. Financial Information 10. Fees & Charges 11. ACH Services 12. Authorizations 13. Originator 14. Warranties & Indemnity 15. Transmittal of Entries 16. Transaction Settlement 17. Entry Errors & Amendments 18. Error Detection 19. Returns & Chargebacks 20. Delay / Failure to Transfer 21. Data Retention 22. Rejection of Entries 23. Credit Card Gateway 24. General Warranties 25. No Warranties 26. Limitation of Liability 27. Indemnification 28. Confidentiality 29. Arbitration 30. Termination 31. General Provisions 37. Electronic Signatures

Laws, Rules, and Procedures

Merchant acknowledges receipt of and agrees to comply with all Virtual Check rules and procedures pertaining to Virtual Check provided services (Virtual Check Procedures). The Virtual Check Procedures may be amended from time to time by Virtual Check, and Merchant agrees to be bound by such amendments.

Merchant further agrees to comply with, and be bound by, all applicable state or federal laws, rules, regulations, orders, guidelines, operating circulars and pronouncements, affecting checks (Checks) (as that term is defined in Federal Reserve Board Regulation CC (Reg CC)) and drafts, credit card, and Automated Clearing House (ACH) transactions, including, but not limited to, all rules and procedural guidelines established by the Federal Trade Commission (FTC), the Board of Governors of the Federal Reserve, National Check Exchange (NCE), Small Value Payments Company (SVPCo), Viewpointe, Endpoint Exchange, the National Automated Clearing House Association (NACHA), Electronic Check Clearing House Organization (ECCHO) and any other clearinghouse or other organization in which Virtual Check's bank is a member or to which rules Virtual Check's bank has agreed to be bound. These rules and regulations (collectively the Rules) and laws are incorporated herein by reference. In the event of conflict between the terms of this Agreement and the Rules, the Rules will control.

It is Merchant's responsibility to ensure that the transactions it engages in under Virtual Check provided services comply with U.S. law, including, but not limited to, sanctions enforced by the Office of Foreign Assets Control (OFAC). Information may be obtained directly from the OFAC Compliance Hotline at (800) 540-OFAC. Restricted transactions as defined in Federal Reserve Regulation GG are prohibited from being processed through Virtual Check provided services or relationship. Virtual Check will charge Merchant with any fines incurred as a result of non-compliance by Merchant and Merchant agrees to fully reimburse and/or indemnify Virtual Check for such charges or fines.

Merchant Duties

Merchant agrees to establish and maintain one or more accounts with a financial institution to facilitate payment of available funds from the deposit made by Merchant (Depository Account). Merchant will provide Virtual Check the Depository Account information as part of the Merchant set-up process by completing the Merchant Application (Merchant Application). If Merchant changes the Depository Account, Merchant agrees to provide one week's advance written notice to Virtual Check regarding such change. Any Merchant obligations and authorizations as to the former Depository Account shall continue forward to the new Depository Account.

Access to Virtual Check Provided Services

Merchant acknowledges that it is solely responsible for obtaining and maintaining at its own expense, all hardware and software needed to access Virtual Check provided services. Virtual Check is not responsible for, and Merchant hereby releases Virtual Check from any and all claims or damages resulting from, or related to, any computer virus or related problems that may be associated with using electronic mail or the Internet as well as failures of or interruptions in any electrical, telephone or Internet services.

All right, title and interest in and to (a) any and all computer programs, including source codes and all updates, upgrades, fixes and enhancements thereto (collectively, Software), (b) the Virtual Check Procedures and (c) any and all user guides, instructions and other documentation provided to Merchant in connection with Virtual Check provided services (collectively, the Documentation) shall be, and remain, the property of Virtual Check or any third party software provider, as applicable. Unless otherwise expressly authorized, Merchant may not copy, reproduce, reverse engineer, reverse compile, or create derivative works of the Software or Documentation in any form.

Security

(a) Virtual Check may provide Merchant with, or require Merchant to establish, a User ID and passwords and other procedures (collectively, Security Procedures) to access Virtual Check provided services. Merchant agrees to, at all times, (i) safeguard the confidentiality and security of the Virtual Check Procedures and Security Procedures, and (ii) notify Virtual Check immediately if Merchant has any reason to believe the security or confidentiality required by this provision has been or may be breached. Merchant is solely responsible for providing for and maintaining the physical, electronic, procedural, administrative, and technical security of data and systems in Merchant's possession or under Merchant's control.

(b) Merchant agrees to educate its Authorized Merchant Representatives, agents, and employees as to the risks of fraud and to train such persons to avoid such risks. Merchant agrees that Virtual Check is not responsible for any losses, injuries, or harm incurred by Merchant as a result of any electronic, e-mail, or internet fraud.

(c) In the event of a breach of the Security Procedure, Merchant agrees to assist Virtual Check in determining the manner and source of the breach, including providing Virtual Check access to Merchant's hard drive, storage media and devices, systems and any other equipment or device that was used in breach of the Security Procedure. Failure of Merchant to assist Virtual Check shall be an admission by Merchant that the breach of the Security Procedure was caused by a person who obtained access to transmitting facilities of Merchant or who obtained information facilitating the breach from Merchant and not from a source controlled by Virtual Check.

Errors, Cancellations and Amendments to Transactions

Merchant shall notify Virtual Check immediately of any transaction Merchant discovers it has initiated or authorized in error. Virtual Check shall use its best efforts to act on a request by Merchant to cancel or amend a transaction prior to transmitting it to the ACH, Check, or credit card system, but shall have no liability if such cancellation is not effected. Merchant shall reimburse Virtual Check for any expenses, losses, or damages Virtual Check may incur in effecting or attempting to affect Merchant's request for the reversal of a transaction.

Reserve

In the event Virtual Check, at its discretion, requires Merchant to maintain a reserve with Virtual Check, Merchant agrees to execute a Reserve Account Addendum in order to continue using Virtual Check provided services. The reserve shall be in an amount determined solely by Virtual Check and agreed upon by Merchant in the Reserve Account Addendum. Merchant grants Virtual Check a security interest in any monies in reserve to enable Virtual Check to enforce any obligation owed by Merchant under this Agreement without notice or demand to Merchant.

Account Reconciliation

Merchant is responsible for detecting and reporting to Virtual Check any discrepancy between Merchant's records and the records that Virtual Check provides to Merchant via Virtual Check reporting. If Merchant does not detect and notify Virtual Check of such a discrepancy within 10 days of transmitting the file to Virtual Check, then such transactions shall be considered correct, and Merchant shall be precluded from asserting such error or discrepancy against Virtual Check.

Update Notice

Merchant shall provide written notice to Virtual Check of any changes to the information previously provided by Merchant to Virtual Check, including, but not limited to, any additional locations, any change in business, any new business, the identity of principals and/or owners, the form of business organization, type of goods and services provided and method of conducting sales. Such notice must be received by Virtual Check within five Business Days of the change. Merchant shall provide any additional information requested by Virtual Check within five days of such request.

Virtual Check retains the right to: (a) review Merchant's Checks, files, and ACH Entries, return items, and business activities from time to time to confirm Merchant is conducting business as stated by Merchant at the time of the execution of this Agreement and (b) re-price or terminate Virtual Check provided services based on changes to information previously provided to Virtual Check by Merchant.

Financial Information

Virtual Check may from time to time request information from Merchant in order to evaluate a continuation of Virtual Check provided services and/or adjustment of any limits set by this Agreement. Merchant agrees to provide the requested financial information immediately upon request by Virtual Check, in the form required by Virtual Check. Merchant authorizes Virtual Check to investigate or reinvestigate at any time any information provided by Merchant in connection with this Agreement or Virtual Check provided services and to request reports from credit bureaus and reporting agencies for such purpose.

If Merchant refuses to provide the requested financial information, or if Virtual Check concludes, in its sole discretion, that the credit risk of Merchant is unacceptable, or if Merchant refuses to give Virtual Check access to Merchant's premises, Virtual Check may terminate Virtual Check provided services according to the provisions hereof.

Fees and Charges

Merchant agrees to pay to Virtual Check the fees and charges set forth in the Merchant Application or provided from time to time hereafter to Merchant, and all such other fees and charges as may be agreed upon from time to time by Merchant and Virtual Check. Virtual Check will initiate ACH debit Entries to Merchant's Fee Account to collect the fees and charges for services provided. Should Merchant fail or refuse to pay any charges under this Agreement, Merchant agrees to pay all collection costs (including reasonable attorney's fees) which may be incurred by Virtual Check.

Virtual Check shall have the right to increase or decrease charges imposed for Virtual Check provided services and will notify Merchant of the changes. Merchant's use of Virtual Check provided services after changes have been made shall constitute Merchant's agreement to the same. In addition to Virtual Check provided services fees, Merchant agrees to pay all taxes, tariffs and assessments levied or imposed by any government agency in connection with Virtual Check provided services, this Agreement, and/or the software or equipment made available to Merchant (excluding any income tax payable by Virtual Check).

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ACH Terms and Conditions

Sections 11–22 govern ACH processing services provided by Virtual Check.

ACH Services

Merchant desires Virtual Check to provide ACH processing services as part of Virtual Check provided services as a Third Party Sender of transactions on behalf of Merchant. These ACH transactions (Entries or Entry) will be processed pursuant to the terms of this Agreement, the operating rules of NACHA, and the applicable state and federal laws and regulations governing ACH transactions.

Authorizations

(a)

MERCHANT WILL OBTAIN AUTHORIZATION FOR EACH ENTRY PRIOR TO DEBITING AND/OR CREDITING A CUSTOMER'S ("RECEIVER'S") ACCOUNT AND SHALL MAINTAIN RECORDS OF THE AUTHORIZATION NECESSARY TO RESOLVE DISPUTES FOR TWO YEARS.

Proper authorizations must be in written or oral format. Written authorizations include any agreements between Merchant and its customer and or any electronic signature that includes but is not limited to a digital signature or security code. Oral authorizations must be either (i) a tape recording of the oral authorization, or (ii) provide the customer with a written notice confirming the oral authorization prior to the Settlement Date of the Entry. Merchant must maintain authorizations for a period of two years after the transaction.

(b) Merchant will utilize commercially reasonable methods to establish the identity of the Receiver, and hereby warrants to Virtual Check that each such Receiver has authorized Merchant to submit ACH Entries to its account for settlement of transactions to which Receiver has agreed.

(c) As required by the Rules, Merchant must use commercially reasonable procedures to verify that routing numbers are valid for all Entries.

(d) Merchant must conduct an annual audit to ensure that the financial information it obtains from Receiver is protected by security practices and procedures that include adequate levels of (i) physical security to protect against theft, (ii) personnel and access controls, and (iii) network security.

Originator

Merchant hereby agrees that Merchant is the Originator, as that term is defined in the Rules, of the ACH Entries and hereby assumes all of the obligations and responsibilities of an Originator. Merchant shall establish policies and procedures to ensure that Merchant is in compliance with the Rules at all times. Merchant agrees that Virtual Check or the Originating Depository Financial Institution may audit Merchant's ACH activities.

Merchant Representations and Warranties; Indemnity

With respect to each and every Entry transmitted by Merchant, Merchant represents and warrants to Virtual Check and agrees that (a) each person shown as the Receiver on an Entry received by Virtual Check from Merchant has authorized the initiation of such Entry and the crediting or debiting of its account in the amount and on the Effective Entry Date shown on such Entry, (b) such authorization is operative at the time of transmittal or crediting or debiting by Virtual Check as provided herein, (c) Entries transmitted to Virtual Check by Merchant are limited to those types of credit and debit Entries set forth in the Merchant Application, (d) Merchant shall perform its obligations under this Agreement in accordance with all applicable laws, regulations, and orders, including, but not limited to, the sanctions laws administered by OFAC and FinCEN, and (e) Merchant shall be bound by and comply with the provision of the Rules making payment of an Entry by the RDFI to the Receiver provisional until receipt by the RDFI of final settlement for such Entry.

Merchant shall indemnify Virtual Check against any loss, liability or expense (including attorney's fees and costs) resulting from or arising out of any breach of any of the foregoing warranties, representations, or agreements.

Transmittal of Entries by Merchant

Merchant or Authorized Merchant Representative(s) shall initiate the debit or credit Entries hereunder on a Business Day. For the purposes of this Agreement, Business Day means Monday through Friday, excluding federal banking holidays. Merchant shall transmit or deliver Entries to Virtual Check in computer readable form in compliance with the formatting and other requirements set forth in the NACHA file specifications or as otherwise specified by Virtual Check.

Merchant shall have the sole responsibility for the accuracy of the data transmitted to Virtual Check including, but not limited to, the amount of the transaction, the bank routing number and the account number of the Receiver. Merchant acknowledges and agrees that if an inconsistency between a Receiver's name and account number exists, the transaction will be initiated based upon the account number even if it identifies a person different from the named Receiver. Entries must be received by Virtual Check before the Virtual Check cut-off time (Cut-Off) set forth in the Virtual Check Procedures. Entries received after the Cut-Off shall be deemed to have been received on the next Business Day. Virtual Check will have no obligation to process Entries or batches that exceed the limits set.

Transaction Settlement

(a) Virtual Check and its affiliates shall establish an account with a financial institution selected by Virtual Check and its affiliates and will hold the funds represented by the debit and credit Entries transmitted by Merchant until all preliminary return transactions have cleared and then the funds shall be transferred, via an ACH Credit, to either the Merchant's Depository Account or the Receiver's account, as applicable.

(b)

In the event Merchant wishes to initiate a credit Entry, Merchant shall either:

(i) authorize Virtual Check and its affiliates to debit Merchant's Depository Account upfront in an amount authorized by Merchant that would allow Merchant to originate multiple credit Entries up to the amount of the funds debited; or

(ii) authorize Virtual Check and its affiliates to debit Merchant's Depository Account for the amount of a specific credit Entry only.

(c) For all Entries, the settlement amount paid to Merchant shall be net of any returned Entries. If any debit Entry is returned to Virtual Check and the settlement amount is not sufficient to accommodate the returned Entry, Virtual Check and its affiliates will debit Merchant's Depository Account for the amount of the returned Entry plus fees and costs incurred. Virtual Check and its affiliates reserve the right to extend the hold period on Merchant's funds should any questionable activity occur, or if Merchant's return rate increases enough to warrant a longer hold period as required by law or the Rules. Merchant further covenants and agrees that it shall not revoke or rescind authorization for the debit Entries by Virtual Check and its affiliates to Merchant's Depository Account.

Errors, Cancellations and Amendments to Entries

Merchant shall notify Virtual Check and its affiliates immediately of any Entry Merchant discovers it has initiated or authorized in error. Merchant shall have no right to cancel or amend any Entry after its receipt by Virtual Check and its affiliates. However, Virtual Check and its affiliates may, at its option, accept a cancellation or amendment by Merchant. Merchant shall notify the Receiver of any reversing entry initiated to correct any Entry it has initiated in error. The notification to the Receiver must include the reason for the reversal and be made no later than the Settlement Date of the reversing entry.

If Virtual Check and its affiliates accepts a cancellation or amendment of an Entry, Merchant hereby agrees to indemnify, defend all claims and hold Virtual Check and its affiliates harmless from any loss, damages, or expenses, including but not limited to attorneys' fees, incurred by Virtual Check and its affiliates as the result of its acceptance of the cancellation or amendment.

Error Detection

Virtual Check and its affiliates has no obligation to discover and shall not be liable to Merchant for errors made by Merchant, including but not limited to errors made in identifying the Receiver, or an Intermediary or Receiving Depository Financial Institution (RDFI) or for errors in the amount of an Entry. Virtual Check and its affiliates shall likewise have no duty to discover and shall not be liable for duplicate Entries issued by Merchant.

Notwithstanding the foregoing, if Merchant discovers that any Entry it has initiated was in error, it shall notify Virtual Check and its affiliates of such error. If such notice is received no later than four hours prior to the ACH cutoff time, Virtual Check and its affiliates will utilize reasonable efforts to initiate an adjusting entry within the time limits provided by the Rules. In the event that Merchant makes an error or issues a duplicate Entry, Merchant shall indemnify, defend all claims, and hold Virtual Check and its affiliates harmless from any loss, damages, or expenses, including but not limited to attorney's fees, incurred by Virtual Check and its affiliates as result of the error or issuance of duplicate Entries.

Returned/Rejected and Chargeback Items

Merchant acknowledges that it is solely responsible for any and all returned or rejected items. Merchant hereby authorizes Virtual Check and its affiliates to deduct the amount of any returned or rejected item and any associated processing fees from the balance of funds currently due to Merchant. In the event there are not sufficient funds currently held by Virtual Check and its affiliates on Merchant's behalf, Merchant further authorizes Virtual Check and its affiliates to debit the Depository Account or any other deposit account maintained by Merchant, as necessary, to recover any funds for returned or rejected debit transactions.

If a cardholder disputes any transaction, if a transaction is charged back for any reason by the card issuing institution, or if Virtual Check has any reason to believe an indebtedness previously purchased is questionable, not genuine, or is otherwise unacceptable, the amount of such indebtedness may be charged back and deducted from any payment due to Merchant or may be charged against any of Merchant's accounts or the Reserve Account. Merchant understands that obtaining an authorization for any sale shall not constitute a guarantee of payment, and such sales slips can be returned or charged back to Merchant like any other item hereunder.

Delay or Failure to Transfer Funds

Virtual Check and its affiliates shall not be liable to Merchant or Receiver for any damages of any kind for any delay in payment, including special, consequential, punitive, or indirect loss or damage. Virtual Check and its affiliates shall not be liable or responsible to Merchant for any delay or failure to transfer any amount hereunder for any reason including but not limited to rules, regulations, or policies of the Federal Reserve Board which place an aggregate limit on the amount Bank can transfer from time to time during any banking day. In no event shall Virtual Check and its affiliates be liable to Merchant for attorney's fees incurred by Merchant in any action brought by Merchant under this Agreement.

Data Retention

Merchant shall retain data on file adequate to permit remaking of Entries for 10 days following the date of their transmittal by Virtual Check and its affiliates as provided herein, and shall provide such data to Virtual Check and its affiliates upon its request. Without limiting the generality of the foregoing provisions, Merchant specifically agrees to be bound by and comply with all applicable provisions of the Rules regarding the retention of documents or any record, including, without limitation, Merchant's responsibilities to retain all items, source documents, and records of authorization in accordance with the Rules.

Rejection of Entries

Virtual Check and its affiliates may reject any transaction or file of transactions which does not comply with the requirements of this Agreement and may reject any transaction if Merchant is not otherwise in compliance with the terms of the Agreement. Virtual Check and its affiliates has no obligation to notify Merchant of the rejection of an Entry but Virtual Check may do so at its option. Virtual Check and its affiliates shall have no liability to Merchant for rejection of an Entry nor for any failure to notify Merchant of the rejection of an Entry. In the event any transactions are rejected by the ODFI or Virtual Check and its affiliates for any reason whatsoever, it shall be the responsibility of Merchant to remake such Entries. Merchant shall retain and provide Virtual Check and its affiliates, upon request, all information necessary to remake any Entry or file of Entries within 10 business days after the Settlement date.

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Card Processing Services

Sections 23–36 govern credit and debit card processing services.

Credit Card Gateway

Merchant desires Virtual Check to forward credit card transactions to Merchant's credit card processor. Merchant acknowledges and agrees that Virtual Check's sole responsibility under this Agreement to Merchant as it relates to credit card transactions is that Virtual Check shall send credit card transactions transmitted by Merchant to Merchant's credit card processor. Virtual Check shall not perform any type of edit or review of the credit card transactions and shall transmit them to Merchant's credit card processor in the same format and condition as the transactions were received from Merchant. Virtual Check will not settle for any credit card transactions received from Merchant and will not process any credit card transactions refused or returned by Merchant's credit card processor.

Merchant will incur SEPARATE charges from Merchant's credit card processor for the servicing of its credit card merchant account as documented in the agreement between Merchant and Merchant's credit card processor. Merchant understands that Virtual Check is not a party to that Agreement, and that the rates, fees, and charges associated with its merchant account are strictly between Merchant and Merchant's credit card processor.

23.1 Certain Merchant Responsibilities

23.1.1 Merchant agrees to participate, and to cause third parties acting as Merchant's agent (Agents), to participate, in the Associations in compliance with, and subject to, the by-laws, operating regulations and/or all other rules, policies and procedures of the Associations (collectively Operating Regulations). Merchant also agrees to comply with all applicable state, federal, and local laws, rules, and regulations (Laws). Without limiting the foregoing, Merchant agrees that it will fully comply with any and all confidentiality and security requirements of the USA Patriot Act, VISA, MasterCard, Discover, and/or Other Networks, including but not limited to the Payment Card Industry Data Security Standard, the VISA Cardholder Information Security Program, and the MasterCard Site Data Protection Program.

23.1.2 If appropriately indicated on Merchant's application, Merchant may be a limited acceptance Merchant, which means that Merchant 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. Merchant, and not Virtual Check 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.

23.1.3 Merchant shall only complete sales transactions produced as the direct result of bona fide sales made by Merchant 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 Merchant, or for purposes related to financing terrorist activities.

23.1.4 Merchant may set a minimum transaction amount to accept a card that provides access to a credit account, provided the minimum transaction amount does not differentiate between card issuers or acceptance brands and does not exceed ten dollars (or any higher amount established by the Federal Reserve). Maximum transaction amount limits apply only to U.S. government entities and educational institutions (MCCs: 8220, 8244, 8249).

23.2 Merchant Prohibitions

Merchant must not: (i) require a cardholder to complete a postcard or similar device that includes cardholder account data in plain view when mailed; (ii) add any tax to transactions unless applicable law expressly requires it; (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; (v) disburse funds in the form of cash unless participating in a cash back service; (vi) submit any transaction receipt for a transaction that was previously charged back and subsequently returned to Merchant; (vii) accept a Visa consumer credit card 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 Merchant; or (ix) submit a transaction that represents collection of a dishonored check. Neither Merchant nor its Agent shall retain or store magnetic-stripe data subsequent to the authorization of a sales transaction.

23.3 Settlement

Upon receipt of Merchant's sales data for card transactions through Virtual Check's Services, Acquirer will process Merchant's sales data to facilitate the funds transfer between the various Associations and Merchant. After Acquirer receives credit for such sales data, Acquirer will fund Merchant, either directly to the Merchant-Owned Designated Account or through Virtual Check to an account designated by Virtual Check (Virtual Check Designated Account), at Acquirer's sole option, for such card transactions. Merchant agrees that the deposit of funds to the Virtual Check Designated Account shall discharge Acquirer of its settlement obligation to Merchant, and that any dispute regarding the receipt or amount of settlement shall be between Virtual Check and Merchant.

33. Card Brand Graduation Process

Once you reach $100K in annual Visa Volume or $1MM in annual MasterCard volume, you will be considered a "direct merchant" of Acquirer, in accordance with Payment Brand regulations. Merchant may be converted from the American Express Program to a direct Card acceptance relationship with American Express if and when Merchant has either (i) greater than $1,000,000 in Charge Volume in a rolling twelve (12) month prior or (ii) greater than $1,000,000 in Charge Volume in any three (3) consecutive months (High CV Merchant).

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General Terms and Conditions

Sections 24–37 govern the general rights, obligations, and legal framework of this Agreement.

Merchant General Warranties

Merchant represents, warrants and covenants the following to Virtual Check:

(a) Information. All information provided by Merchant to Virtual Check is true, complete and accurate and properly reflects the business, financial condition and principal partners, owners or officers, of Merchant. Merchant is not engaged in, or affiliated with, any businesses, products or methods of selling other than those disclosed by Merchant to Virtual Check.

(b)

Authority and Legality.

(i)Merchant is authorized to enter into, and perform its obligations under, this Agreement;

(ii)the person signing this Agreement on behalf of Merchant is duly authorized to execute this Agreement;

(iii)this Agreement is valid and enforceable against Merchant in accordance with its terms; and

(iv)the entry into, and performance of, this Agreement by Merchant will not violate any law, or conflict with any other agreement, to which Merchant is subject.

(c) No Litigation. There is no action, suit or proceeding pending or, to Merchant's knowledge, threatened which, if decided adversely, would impair Merchant's ability to carry on its business substantially as now conducted or which would adversely affect Merchant's financial condition or operations.

(d) Rule Compliance. Merchant conducts its business, and submits Checks, Entries, and files in compliance with this Agreement, the Virtual Check Procedures, the laws of the United States and other applicable law and the Rules.

(e) Loss Recovery. Merchant agrees to undertake reasonable efforts to cooperate, as permitted by applicable law, in performing loss recovery efforts in connection with any actions Virtual Check or the Originating Depository Financial Institution may be obligated to defend or elect to pursue against a third party.

No Warranties

MERCHANT ACKNOWLEDGES AND AGREES THAT MERCHANT'S USE OF VIRTUAL CHECK PROVIDED SERVICES SHALL BE AT MERCHANT'S SOLE RISK, AND THAT VIRTUAL CHECK PROVIDED SERVICES IS PROVIDED BY VIRTUAL CHECK ON AN "AS IS" BASIS. VIRTUAL CHECK MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, IN LAW OR IN FACT, TO MERCHANT OR TO ANY OTHER PERSON, AS TO VIRTUAL CHECK PROVIDED SERVICES OR ANY ASPECT THEREOF, INCLUDING (WITHOUT LIMITATION) ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT, AND VIRTUAL CHECK HEREBY DISCLAIMS ANY AND ALL OF THE SAME. MERCHANT AGREES THAT NO ORAL OR WRITTEN ADVICE OR REPRESENTATION OBTAINED FROM ANY VIRTUAL CHECK EMPLOYEE OR REPRESENTATIVE SHALL CREATE A WARRANTY OR REPRESENTATION FOR PURPOSES OF THIS AGREEMENT.

Limitation of Liability

TO THE FULLEST EXTENT PERMITTED BY LAW, VIRTUAL CHECK'S AND ITS CONTRACTORS', SUPPLIERS' AND RESELLERS' TOTAL LIABILITY TO MERCHANT AND ANY THIRD PARTIES UNDER THIS AGREEMENT WILL BE LIMITED TO THE PAYMENTS MADE BY MERCHANT DURING THE PREVIOUS 12 MONTHS FOR VIRTUAL CHECK PROVIDED SERVICES. IN NO EVENT WILL VIRTUAL CHECK, ITS CONTRACTORS', SUPPLIERS' OR RESELLERS BE LIABLE TO MERCHANT FOR ANY INDIRECT, SPECIAL, INCIDENTAL, EXEMPLARY PUNITIVE, TREBLE OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOSS OF BUSINESS, REVENUE, PROFITS, GOODWILL, USE, DATA, OR OTHER ECONOMIC ADVANTAGE), WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), PRODUCT LIABILITY, OR OTHERWISE, AND WHETHER OR NOT VIRTUAL CHECK HAS PREVIOUSLY BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. NO CLAIM ARISING OUT OF THIS AGREEMENT, REGARDLESS OF FORM, MAY BE BROUGHT MORE THAN THE SHORTER OF TWO YEARS OR THE MINIMUM PERIOD ALLOWED BY LAW AFTER THE CAUSE OF ACTION HAS OCCURRED.

Indemnification and Liability; Third Party Claims

Merchant hereby agrees to indemnify Virtual Check and each of its parents, subsidiaries and affiliates and their respective officers, directors, employees, members, partners, agents, insurers and attorneys (each an Indemnified Party and, collectively, the Indemnified Parties) for, and holds each of the Indemnified Parties harmless from and against, all actions, causes of action, claims, damages, liabilities and expenses (including reasonable attorneys' fees and or collection fees) of any nature or kind arising out of, or related to, this Agreement, including all actions arising out of, related to or resulting from: (a) Merchant's (i) failure to report required changes, (ii) transmission of incorrect data to Virtual Check, (iii) failure to maintain compliance with the Rules, (iv) depositing a Prohibited Check or an electronic representation of a substitute check; (b) Virtual Check's provision of Virtual Check provided services, or Virtual Check's action or inaction in accordance with instructions received from any person reasonably believed by Virtual Check to be an authorized representative of Merchant; (c) Merchant's breach of any of Merchant's representations, warranties, covenants or other agreements or responsibilities under this Agreement; and/or (d) Merchant's breach or violation of any Rules; provided, however, Merchant is not obligated to indemnify Virtual Check for any damages solely and proximately caused by Virtual Check's gross negligence or willful misconduct.

Confidential Information and Proprietary Right in Data

All information of a business nature relating to the assets, liabilities or other business affairs disclosed to Virtual Check by Merchant in connection with this Agreement is confidential. Except when allowed by applicable law, Virtual Check shall not disclose or permit access to any such information by any person, firm or corporation. Virtual Check shall take such action as shall be reasonably necessary to preserve and protect the confidentiality of such information.

Merchant agrees to hold confidential, and to use only in connection with Virtual Check provided services, all information furnished to Merchant by Virtual Check or by third parties from whom Virtual Check has secured the right to use in support of Virtual Check provided services, including, but not limited to, Virtual Check's product and service pricing structure, system design, programming techniques or other unique techniques. In addition, should Merchant at any time receive or acquire any information relating to another Virtual Check customer, Merchant shall promptly return such information to Virtual Check and not reveal such information to any other party.

Virtual Check's and Merchant's obligations and agreements under this paragraph shall not apply to any information supplied that was known to either party prior to the disclosure by the other, is or becomes generally available to the public other than by breach of this Agreement, or otherwise becomes lawfully available on a non-confidential basis from a third party who is not under an obligation of confidence to either party. This clause shall survive the termination of the Agreement.

Arbitration and Waiver of Jury Trial

Merchant and Virtual Check agree that the transactions contemplated in this Agreement involve "commerce" under the Federal Arbitration Act (FAA).

EVERY CONTROVERSY OR CLAIM BETWEEN MERCHANT AND ANY INDEMNIFIED PARTY ARISING OUT OF, OR IN ANY WAY RELATED TO OR RESULTING FROM, THIS AGREEMENT, VIRTUAL CHECK PROVIDED SERVICES OR ANY OTHER SERVICES PROVIDED BY VIRTUAL CHECK, WHETHER BASED IN CONTRACT, TORT OR ANY OTHER LEGAL THEORY, INCLUDING CLAIMS OF FRAUD, SUPPRESSION, MISREPRESENTATION AND FRAUD IN THE INDUCEMENT, WILL BE RESOLVED BY BINDING ARBITRATION UNDER THE FAA. IF A CLAIM IS SUBMITTED TO ARBITRATION, (A) MERCHANT WILL NOT HAVE THE RIGHT TO GO TO COURT OR TO HAVE A JURY TRIAL; (B) MERCHANT WILL NOT HAVE THE RIGHT TO ENGAGE IN PRE-ARBITRATION DISCOVERY EXCEPT AS PROVIDED IN THE ARBITRATION RULES; (C) MERCHANT WILL NOT HAVE THE RIGHT TO HAVE ANY CLAIM ARBITRATED AS A CLASS ACTION; AND (D) THE ARBITRATOR'S DECISION WILL BE FINAL AND BINDING WITH LIMITED RIGHTS TO APPEAL.

The arbitration will be administered by the American Arbitration Association (AAA) under its Commercial Arbitration Rules. This agreement to arbitrate disputes will survive the termination of this Agreement.

Termination

This Agreement shall remain in full force and effect from the date hereof until such time as this Agreement is terminated by either party as hereinafter provided:

(a) This Agreement may be terminated at any time by either party following 30 days' prior written notice.

(b) Either party shall have the right to terminate this Agreement immediately by giving written notice to the other if such other party: (i) ceases to conduct its business in the ordinary sense, (ii) has any substantial part of its property become subject to any levy, seizure, assignment or application for sale for, or by, any creditor or government agency, (iii) is a party to an acquisition or (iv) in the reasonable judgment of the party seeking termination, experiences an adverse change in its financial condition or business which impairs the ability of such party to perform its obligations under this Agreement, (v) fails to perform its obligations under this Agreement or defaults under any other agreement between the parties, (vi) makes any warranty or representation which proves to be false or misleading.

(c) Notwithstanding the foregoing, Virtual Check may immediately terminate this Agreement without notice if, in Virtual Check's sole discretion, Virtual Check determines that Merchant has abused Virtual Check provided services, violated the Rules, regulations, or laws, or Virtual Check believes that it will suffer a loss or other damage if the Agreement is not terminated. Virtual Check's election to terminate this Agreement is in addition to any and all other remedies that may be available to Virtual Check and will not affect any obligations Merchant may have to Virtual Check.

General Provisions

(a)Attorneys' Fees. In the event of any arbitration or other adversarial proceeding between the parties concerning this Agreement, if Virtual Check is the prevailing party Virtual Check shall be entitled to recover its reasonable attorneys' fees, collection fees and other costs in addition to any other relief to which it may be entitled.

(b)Successors. This Agreement and all the terms and provisions herein shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and assigns.

(c)Assignment. No right or interest hereby conferred shall be assignable without the prior written consent of the other party, and any assignment made without such consent shall be null and void; provided, however that Virtual Check may assign this Agreement or any part of it to any of Virtual Check's affiliates or to a successor of Virtual Check by merger or acquisition upon written notice to Merchant.

(d)Amendments. Virtual Check may amend the terms of this Agreement at any time, in its sole discretion, by giving notice to Merchant. Merchant's continued use of Virtual Check provided services shall constitute Merchant's agreement to such amendments. No amendments requested by Merchant shall be effective unless received, and agreed to in writing, by Virtual Check.

(e)No Third Party Beneficiaries. This Agreement shall not be construed to confer any rights or remedies upon any person not a party to this Agreement, whether as a third party beneficiary or otherwise, against Merchant or Virtual Check, their respective successors, assigns and affiliates.

(f)Captions and Headings. The captions and headings contained in this Agreement are for convenience of reference only and shall not be used to limit the applicability or meaning of any provisions of this Agreement.

(g)Entire Agreement. Merchant agrees that this Agreement is the entire statement of the terms and conditions which apply to the subject matter hereof. This Agreement supersedes any prior agreements between the parties relating to Virtual Check provided services.

(h)No Waiver. No delay or omission in the exercise by either party of any right or remedy under this Agreement shall impair any such right or remedy or be construed to be a waiver thereof.

(i)Severability. If any provision of this Agreement is held to be unenforceable, the other provisions shall not be affected, unless it can be reasonably assumed that the parties would not have made the agreement without such provision.

(j)Construction. This Agreement is an agreement between parties who are experienced in sophisticated and complex matters similar to the transactions contemplated by this Agreement, is entered into by both parties in reliance upon the economic and legal bargains contained herein, and shall be interpreted and construed in a fair and impartial manner, without regard to such factors as the party which prepared the instrument or drafted any provision thereof, the relative bargaining powers of the parties or the domicile of any party.

(k)Survival. Virtual Check and Merchant agree that Sections 1, 10, 14, 17, 18, 24, 25, 36, 38, 39, 40, 41, 42, 43, 45(a), 45(e), 45(g), and 45(l) shall survive the termination of this Agreement.

(l)Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Utah, without reference to its conflict of laws provisions, and applicable federal law.

(m)Relationship of Parties. Merchant hereby agrees that Virtual Check shall each be independent contractors in the performance of their obligations under this Agreement, and nothing contained herein shall be deemed to constitute either party as the agent, representative or franchisee of the other party, or both parties as joint venturers or partners for any purpose.

(n)Notices. Any notice required or permitted to be sent under this Agreement shall be delivered by hand, by overnight courier, by facsimile, or by registered mail, return receipt requested, to the address of the parties first set forth in this Agreement or to such other address of the parties designated in writing in accordance with this subsection.

(o)Force Majeure. Except for the obligation to make payments, nonperformance by either party will be suspended to the extent it is rendered impossible due to force majeure or other causes beyond such party's reasonable control and without such party's negligent or willful misconduct.

(p)Merchant understands and accepts that Virtual Check and its affiliates are not responsible for the success or failure of Merchant's business, or the success or failure of Merchant's on-line site.

Electronic Signatures

Under the Electronic Signatures in Global and National Commerce Act (E-Sign), this Merchant Services Agreement and all electronically executed documents related hereto are legally binding in the same manner as are hard copy documents executed by hand signature when:

(1)your electronic signature is associated with the Merchant Services Agreement and related documents,

(2)you consent and intend to be bound by the Merchant Services Agreement and related documents, and

(3)the Merchant Services Agreement is delivered in an electronic record capable of retention by the recipient at the time of receipt (i.e., print or otherwise store the electronic record).

This Merchant Services Agreement and all related electronic documents shall be governed by the provisions of E-Sign.