Client Service Terms and Conditions


PART I. DEFINITIONS

1.1 In this Agreement:

(a) “Chargeback” means a transaction to the debit of PacNet, initiated by a PacNet Bank, a Cardscheme, or any customer, by virtue of which a Credit Card, Giro or Direct Debit Payment is reversed and PacNet falls liable to the PacNet Bank, with resulting liability of the Company to PacNet;

(b) “Cheque” means a Cheque given by a Customer payable to any name, person, legal entity or promotional name relating to the purchase price of goods sold or services rendered by the Company to the Customer and which Cheque is purchased by PacNet;

(c) “Company” means

(i) the Company as described above under the title “Contracting Parties” and any other name or designation under which the Company carries on business in any jurisdiction, and in particular, those trade names set forth in Schedule A attached hereto; and/or
(ii) any other PacNet client selling goods or services marketed, sold or resold by the Company where the Company knows or reasonably ought to know, that the same goods and services formerly or presently sold or rendered by PacNet’s other client(s), are now sold or re-sold by the Company or vice versa;

(d) “Credit Card Payment” means a Credit or Debit Card number given to the Company by a Customer for processing in respect of the purchase price of goods sold or services rendered by the Company;

(e) “Customer” means

(i) a person at arm’s length to the Company who purchases goods or services marketed, sold or re sold by the Company and who executes and delivers a Cheque, or who authorizes a Credit Card or Direct Debit Payment, or who initiates a Giro Payment, as consideration therefore, or
(iii) a person at arm’s length to the Company who purchases goods or services marketed, sold or re-sold by any entity referred to in paragraph 1.1(c)(ii) above;

(f) “Direct Debit Payment” means a payment taken by PacNet by the Direct Debit mechanism or scheme applicable in the country of execution on the basis of an account number and/or mandate given to the Company by a Customer for processing of such payment in respect of the purchase price of goods sold or services rendered by the Company;

(g) “Electronic Payment” means any or all Credit Card Payments, Giro Credit Payments or Direct Debit Payments;

(h) “Giro Credit Payment” means a Giro Credit, deposit of funds or electronic transfer of funds in favour of PacNet acting on behalf of the Company by a Customer for processing in respect of the purchase price of goods sold or services rendered by the Company, and directed to a Bank Account operated by PacNet for the receipt of such payments from the Company’s customers;

(i) “Merchant Account” means any or all account(s) opened or operated by PacNet with any PacNet Bank for the benefit of PacNet and/or the Company;

(j) “Net Credit Card Payment” means the Credit Card Payment less the Processing Commission;

(k) “Net Direct Debit Payment” means the Direct Debit Payment less the Processing Commission;

(l) “Net Giro Credit Payment” means the Giro Credit Payment less the Processing Commission;

(m) “PacNet Bank” means such bank or financial institution at which PacNet deposits Cheques for clearance in accordance with its services contemplated under this Agreement, or such bank or financial institution at which PacNet processes Credit Card Payments for clearance in accordance with its services contemplated under this Agreement; or such bank or financial institution at which PacNet processes Direct Debit or accepts Giro Payments in accordance with its services contemplated under this agreement.

(n) “PacNet” means PacNet Services Ltd. of Vancouver, British Columbia, Canada; however, in the event that all or any part of the processing of Cheques requested by the Company is carried out by PacNet Services (Europe) Ltd. of Shannon, Republic of Ireland, “PacNet” will also include and be construed as meaning PacNet Services (Europe) Ltd., and in such event this contract will have full force and effect as if it were a contract between the Company and PacNet Services (Europe) Ltd.

(o) “PCI Data Security Standard” means payment card industry data security requirements to ensure the security of all Credit Card Payment data and Credit Card holder information processed under this Agreement as outlined in Schedule “B”.

(p) “Promotion” means a particular advertising campaign which solicits orders from Customers for goods or services provided by the Company in its name or under a name listed in Schedule A of this Agreement and recorded in PacNet’s RAVEN data base; or any invoice, solicitation, invitation to treat, or other request for funds directed to a Customer in respect of goods or services provided by the Company;

PART II. PACNET TO PURCHASE CHEQUES

2.1 The Company may from time to time request PacNet to purchase Cheques from the Company. No Cheques will be purchased under this Agreement unless PacNet has seen, reviewed and specifically approved the Promotion and promotional items to which they relate. PacNet reserves the right to refuse to purchase Cheques for Promotions which do not appear on Schedule A and are not recorded on PacNet’s RAVEN data base. All Cheques submitted for purchase by the Company to PacNet under this Agreement may be approved or rejected for purchase by PacNet at its sole discretion. Where PacNet declines to purchase a Cheque, it will so notify the Company within a reasonable time.

CHEQUE REQUIREMENTS

2.2 All Cheques submitted to the Company for purchase under this Agreement will be signed by the Customer and have been made payable to the Company or to the Company’s order. At the time of submission of a Cheque for purchase under this Agreement, PacNet will be at liberty to exercise its rights under the power of attorney granted under the provisions hereof.

2.3 Any delivery of Cheques to PacNet will be to either its offices in Vancouver, British Columbia, Canada, or Shannon, Republic of Ireland at the sole expense and risk of the Company.

2.4 In the event that the Company wishes PacNet to purchase Cheques or process Credit Card, Giro or Direct Debit Payments under this Agreement for Promotions not listed on Schedule A, the Company must submit the new Promotion and promotional items to which they relate for PacNet’s review and approval and all Promotions must be recorded in PacNet’s RAVEN data base.

CHEQUE PURCHASE PRICE

2.5 The purchase price for a Cheque submitted for purchase under this Agreement will be the face amount of the Cheque less a discount as indicated in Schedule “C” of this agreement or other amount to be agreed upon in writing by the parties from time to time (the “Purchase Price”). Upon physical delivery of the Cheques to PacNet’s office and the signed written receipt for such delivery by PacNet, the parties confirm that title to the Cheques in the particular delivery will thereby be transferred, assigned and vested in PacNet free and clear of any liens, charges, encumbrances or equities whatsoever. All risk of loss in respect of any Cheque prior to delivery to the offices of PacNet and issuance of a signed written receipt for such delivery by PacNet will be for the sole account of the Company.

2.6 The Company will include a written statement with each delivery of Cheques to the offices of PacNet itemizing the contents thereof. PacNet will confirm to the Company its receipt of each delivery of Cheques by facsimile transmission or e-mail within 24 hours following such receipt of delivery and advise of any discrepancy between the enclosed statement of the Company with the Cheques so delivered. In the event no written statement is enclosed by the Company with a delivery of Cheques, the confirmation of the receipt of delivery by PacNet to the Company will be and be deemed to be conclusive and binding on the parties as to the contents of such delivery.

2.7 Notwithstanding any other provision of this Agreement, PacNet may withhold an agreed percentage as listed in Schedule “C” of the Purchase Price until the sum total of such amounts approximates no less than the gross value of two (2) average months of total amount of Purchase Price for Cheques processed (“Payment Holdback”). The Payment Holdback may be used by PacNet to satisfy any claims whatsoever made by a Customer. If all or part of the Payment Holdback is used to satisfy claims by Customers, then PacNet may continue to withhold the agreed percentage of the total of each Purchase Price or at its sole discretion increase the Payment Holdback percentage until the Payment Holdback is replenished to its prior level or to a level satisfactory to PacNet, at its complete discretion.

PART III. PACNET TO PROCESS VARIOUS ELECTRONIC PAYMENTS

CREDIT CARD PAYMENTS

3.1 The Company may from time to time request PacNet to process Credit Card Payments for the Company. No Credit Card Payments will be processed under this Agreement unless PacNet has seen, reviewed and specifically approved the Promotion and promotional items to which they relate. PacNet reserves the right to refuse to process Credit Card Payments for Promotions which do not appear on Schedule “A” and are not recorded on PacNet’s RAVEN data base. All Credit Card Payments submitted for processing by the Company to PacNet under this Agreement may be approved or rejected for processing by PacNet at its sole discretion. Where PacNet declines to process a Credit Card Payment, it will notify the Company.

CREDIT CARD REQUIREMENTS

3.2 All Credit Card Payments submitted for processing under this Agreement will be authorized by the Customer. At the time of submitting a Credit Card Payment for processing under this Agreement:

(a) the Company will authorize PacNet to accept such payment in accordance with such words, form and direction as may be acceptable from time to time to the PacNet Bank; or

(b) PacNet will be at liberty to exercise its rights under the power of attorney granted under the provisions hereof.

3.3 The Company will deliver to the offices of PacNet details of Credit Card Payments itemizing the credit card number, expiry date and the amount of the transaction in the format specified by PacNet and to the electronic address or via the electronic means provided, at the sole expense of the Company. PacNet will not accept any liability for the loss or misuse of electronic data which is transmitted to PacNet by electronic means and which is not encrypted using encryption software. After the electronic data is received and acknowledged by PacNet, PacNet will be responsible for the security of the electronic data.

CREDIT CARD PROCESSING COMMISSION

3.4 The processing commission for a Credit Card Payment will be as listed in Schedule “C” (the “Processing Commission”), subject if applicable to the minimum commission per batch as listed in Schedule “C”. Card Payments submitted via the RAVEN Online Terminal or via a web site interfacing with the RAVEN processing system will not be subject to a minimum commission. All risk of loss in respect of any Credit Card Payment will be for the sole account of the Company.

3.5 Notwithstanding any other provision of this Agreement, PacNet may withhold the percentage stated in Schedule “C” hereto of a Credit Card Payment until the sum total of such amounts is equal to a “Holdback Cap” established by PacNet (“Payment Holdback”). Without limiting the generality of the foregoing, the “Holdback Cap” will normally be equal to the value of all Credit Card Payments processed in the highest two calendar months of the preceding Calendar Year. The Payment Holdback may be used by PacNet to satisfy any claims whatsoever made by a Customer. If all or part of the Payment Holdback is used to satisfy claims by Customers, then PacNet may continue to withhold One Hundred (100) per cent of the total of each Credit Card Payment or at its sole discretion increase the Payment Holdback percentage until the Payment Holdback is replenished to its prior level or to a level satisfactory to PacNet, at its complete discretion.

GIRO CREDIT PAYMENTS

4.1 The Company may from time to time request PacNet to process Giro Credit Payments for the Company. All Giro Credit Payments submitted for processing by the Company to PacNet under this Agreement may be approved or rejected for processing by PacNet at its sole discretion. Where PacNet declines to process a Giro Credit Payment, it will so notify the Company.

GIRO CREDIT REQUIREMENTS

4.2 All Giro Credit Payments submitted for processing under this Agreement will be authorized by the Customer. At the time of submitting a Giro Credit Payment for processing under this Agreement:

(a) the Company will authorize PacNet to accept such payment in accordance with such words, form and direction as may be acceptable from time to time to the PacNet Bank; or

(b) PacNet will be at liberty to exercise its rights under the power of attorney granted under the provisions hereof.

4.3 The Company will arrange for its customers to make Giro Credit Payments directly to the account(s) of PacNet, and provide to PacNet sufficient identifying information to allow matching of incoming payments to the Company.

GIRO CREDIT PROCESSING COMMISSION

4.4 The processing commission for a Giro Credit Payment submitted for processing under this Agreement will be as stated in Schedule “C” (the “Processing Commission”).

4.5 A set-up fee per account per country applies, as listed in Schedule “C”.

4.6. A monitoring fee of €50.00 per account will be charged monthly in addition to the commission. However, in the case where the total commission fee on an account is exceeding €500.00 in any Calendar Month the monitoring fee will be waived.

4.7 A monthly invoice may be presented by PacNet to the Company for services rendered under this agreement, and it will be paid by wire transfer within 10 days of receipt. In the event of non-payment of the invoice, PacNet may deduct a sum equal to the invoice amount from any payment of Giro Credit funds to the Company.

DIRECT DEBIT PAYMENTS

5.1 The Company may from time to time request PacNet to process Direct Debit Payments for the Company. All Direct Debit Payments submitted for processing by the Company to PacNet under this Agreement may be approved or rejected for processing by PacNet at its sole discretion. Where PacNet declines to process a Direct Debit Payment, it will so notify the Company.

DIRECT DEBIT REQUIREMENTS

5.2 All Direct Debit payments submitted for processing under this Agreement will be authorized by the Customer. At the time of submitting a Direct Debit Payment for processing under this Agreement:

(a) the Company will authorize PacNet to accept such payment in accordance with such words, form and direction as may be acceptable from time to time to the PacNet Bank; or

(b) PacNet will be at liberty to exercise its rights under the power of attorney granted under the provisions hereof.

5.3 The Company will deliver to the offices of PacNet details of Direct Debit Payments itemizing the Direct Debit customer, bank account location and number, and bank code, and the amount of the transaction. PacNet will not accept any liability for the loss or misuse of electronic data which is transmitted to PacNet by electronic means and which is not encrypted using encryption software. After the electronic data is received and acknowledged by PacNet, PacNet will be responsible for the security of the electronic data.

5.4 The processing commission for a Direct Debit Payment submitted for processing under this Agreement will be as detailed in Schedule “C” (the “Processing Commission”), subject always to a minimum commission per batch, per currency, as listed in Schedule “C” of this agreement.

5.5 Notwithstanding any other provision of this Agreement, PacNet may withhold the percentage of each Direct Debit transaction referred to in Schedule “C” for the period referred to in Schedule “C”, until the sum total of such amounts approximates no less than the gross value of two (2) average months of approved Direct Debit transactions (“Payment Holdback”). The Payment Holdback may be used by PacNet to satisfy any claims whatsoever made by a Customer. If all or part of the Payment Holdback is used to satisfy claims by Customers, then PacNet may continue withhold One Hundred (100) per cent of the total of each Direct Debit Payment or at its absolute discretion increase the Payment Holdback percentage until the Payment Holdback is replenished.

PART IV. SETTLEMENTS

6.1 Unless otherwise agreed to by the parties, payment of the Purchase Price for Cheques, Net Credit Card, Giro or Direct Debit Payments, will be made by PacNet depositing an amount equal to the Purchase Price to a designated account, such payment to be made within a reasonable time following the date on which PacNet receives delivery of any Cheque or settlement of any Electronic Payment transaction and does not decline to purchase, return or reject the Cheque or Electronic Payment.

6.2 Notwithstanding any other provision of this Agreement, if a Customer disputes the terms of a Promotion or demands the return of the Cheque given by the Customer to the Company, or disputes the validity of any Credit Card, Giro Credit or Direct Debit Payment, and if PacNet has knowledge of such dispute, PacNet may withhold from the Payment to the Company, the amount of the Cheque or Electronic Payment in dispute until such time as the dispute is resolved and the amount, in the sole opinion of PacNet, becomes payable to the Company.

6.3 If PacNet returns a Cheque, Credit Card Payment, Giro Credit Payment or Direct Debit Payment to a Customer, PacNet may deduct such return from the funds due to the Company.

6.4 If at any time a Cheque, Credit Card Payment, Giro Credit Payment or Direct Payment is processed for the Company relating to Promotions other than those Promotions approved by PacNet, then PacNet in its entire discretion may, without notice to the Company, cancel any Merchant Account for the Company and any and all Payment Holdbacks will be forfeited to PacNet with no right of recovery by the Company.

6.5 All payments by PacNet to the Company will be in the same currency as that in which each Cheque or Electronic Payment is received by PacNet. In the event the Company wishes payment to be in a currency other than that of the original transaction, the exchange rate in respect of the currency denomination of any such payment will be determined by reference to the prevailing exchange rate established from time to time by PacNet. 6.6 In the event that the Company ceases processing payments pursuant to the terms of this Agreement or if, for any reason, this Agreement terminates, PacNet will continue to retain any Payment Holdback for a period of six (6) months from the date of the receipt by PacNet of the last transaction of any type. During this period, PacNet will use the Payment Holdback to satisfy any claims by a Customer and, at the end of the six month period, will pay the balance of the Payment Holdback, if any, to the Company.

PART V. POWER OF ATTORNEY, PROMISE OF INDEMNITY, VARIOUS UNDERTAKINGS

7.1 For so long as this Agreement continues, the Company hereby irre>

(a) any Cheque purchased by PacNet under this Agreement, in favour of PacNet;

(b) all instruments or other documents that PacNet may consider necessary or advisable in order to perfect PacNet’s title in any Cheque, and PacNet may apply any endorsement to any Cheque or instrument relating to a Cheque in order to obtain payment therefore; and

(c) all instruments or other documents that PacNet may consider necessary or advisable in order to process any Credit Card, Giro or Direct Debit Payment, and PacNet may supply any information with respect to any Credit Card, Giro or Direct Debit Payment in order to process such payment.

7.2 The Company will, upon demand, indemnify and save harmless PacNet from and against any and all claims, demands, damages, debts actions, suits, proceedings, losses, liabilities, credit card industry fines and reporting fees, banking fees, banking penalties, bank interest charges, government fines and penalties, losses, costs, disbursements, legal fees (as charged by a lawyer to his/her own client), accountants’ fees, court costs, arbitration proceedings costs, travel costs and other expenses incidental to any of the foregoing, including all losses and expenses, including lost management and employee time, relating to PacNet’s inability to conduct business with any PacNet Bank (collectively “the Claims”), as a result of, or arising directly or indirectly from, or in connection with or relating to any of the following:

(a) any misrepresentation, breach of warranty or non-fulfilment of any promise on the part of the Company under this Agreement;

(b) any breach by the Company of any term of this Agreement;

(c) PacNet performing any and all of its obligations, duties or services under this Agreement, or,

(d) any and all Claims whatsoever made by a Customer who is dissatisfied with any matter pertaining to a Cheque, Credit Card, Giro or Direct Debit Payment or the goods or services offered in the Promotion, including, without limiting the generality of the foregoing, all Customer Chargebacks and related Customer Chargeback banking charges.

7.3 PacNet may deduct such amounts to compensate PacNet for the Claims, arising or resulting from or relating, any and all matters outlined in paragraph 7.2(a) to (d), from funds belonging to the Company and held by PacNet.

COMPANY’S REPRESENTATIONS, WARRANTIES AND PROMISES

7.4 At the time of delivering a Cheque for purchase or a Credit Card, Giro or Direct Debit Payment for processing to PacNet under this Agreement, the Company will be deemed to have represented and warranted that:

(a) the Cheque or Credit Card, Giro or Direct Debit Payment represents a bona fide transaction;

(b) the Company knows of no reason why the Cheque does not appear to have been validly executed and delivered by the Customer who is purported to have signed it, or why the Credit Card, Giro or Direct Debit Payment does not appear to have been validly authorized by the Customer who is purported to have authorized it;

(c) the Customer who signed the Cheque or who authorized the Credit Card, Giro or Direct Debit Payment was of full age and capacity;

(d) the Customer who signed the Cheque or who authorized the Credit Card, Giro or Direct Debit Payment is not entitled to any right of set-off or counterclaim against the Company;

(e) the Company is not a party to any agreement under the terms of which the Company is prohibited or restricted from entering into any of the obligations assumed, liabilities imposed or restrictions accepted by the Company under this Agreement;

(f) the Company is duly incorporated, organized and validly subsisting under the laws of the jurisdiction of its incorporation, is not a reporting or public company, has all requisite powers, capacities, licences and permits under legislation governing its affairs and the other laws applicable to it, and under its articles of incorporation, bylaws and governing resolutions to:

(i) own, negotiate or transfer each Cheque or Credit Card, Giro or Direct Debit Payment;

(ii) carry on all business in which the Company is engaged;

(iii) enter into, exercise its rights and perform and comply with its obligations under this Agreement, and all actions, conditions and things have been done, taken or fulfilled with respect thereto, that are required by law, contract or otherwise;

(g) no encumbrance, charge or lien whatsoever, equitable or otherwise, exists against any Cheque or Credit Card, Giro or Direct Debit Payment to which this Agreement applies;

(h) no litigation, arbitration or administrative proceeding is current or pending, so far as the Company is aware, in respect of the Company which appears likely to have a materially adverse effect on the Company;

(i) prior to the date of this Agreement, the Company disclosed to PacNet every factor or matter known to the Company including all material information regarding the nature of the Company’s business that the Company knew or ought to have known would influence a reasonably prudent person in its decision of whether or not to enter into this Agreement;

(j) the business carried on by the Company is a legitimate, lawful business and the Company is not engaged in any conduct or transactions which may be considered unlawful in any jurisdiction in which the Company conducts business; and

7.5 The Company promises that as long as this Agreement is outstanding:

(a) it will perform all contractual and legal obligations of the Company to a Customer and refrain from permitting any right of set-off or counterclaim to arise in favour of the Customer;

(b) it will ensure that the representations and warranties given in Paragraph 7.1 hereof remain true throughout the term of this Agreement;

(c) it will observe and conform to all laws and all valid requirements of any governmental authority with respect to its business, the Cheques, the Credit Card, Giro or Direct Debit Payment and all promises, terms and contracts upon or under which the Cheques or Credit Card, Giro or Direct Debit Payment are issued;

(d) it will refrain from rescinding, terminating or varying any contract relating to a Cheque or Credit Card, Giro or Direct Debit Payment except with the prior written consent of PacNet; and

(e) it will implement and/or maintain a PCI Data Security Standard throughout the term of this Agreement.

NON-DISCLOSURE

7.6 PacNet promises that subject to the provisions of Paragraph 7.7 hereof, neither it nor any of its employees will disclose, transfer, duplicate, reproduce or retain any of the Customer information noted on a Cheque or Credit Card, Giro or Direct Debit Payment, nor will PacNet knowingly permit any third party to do so, other than in respect of a Cheque or Credit Card, Giro or Direct Debit Payment which has not been honoured by the PacNet Bank.

7.7 Notwithstanding any of the provisions of this Paragraph 7.6, PacNet may disclose Customer information and any other information in the possession of PacNet pertaining to either a Customer or the Company when requested by any government authority, including any federal, provincial, state, municipal or city representative, provided such disclosure complies with Privacy Legislation and the Company agrees that it shall have no claim of any nature against PacNet arising from such disclosure. For certainty, PacNet may disclose any information known to PacNet or any director, officer of employee of PacNet with respect to the Company or a Customer immediately upon the request of any individual or agency that is or appears to be (such appearance to be in the absolute discretion of PacNet) investigating allegedly unlawful activity.

RECOURSE

8.1 Every Cheque purchased and Credit Card, Giro or Direct Debit Payment processed by PacNet under this Agreement will be purchased on a full recourse basis, and the Company hereby agrees that it will indemnify and save PacNet harmless, upon demand, from and against any and all damages, loss charges, and/or costs incurred due to the failure of the Customer liable under a Cheque to make payment in respect thereof. The Company further agrees that it will indemnify and save PacNet harmless, upon demand, from and against any loss, charges, and all damages and/or costs incurred in connection with a Credit Card, Giro or Direct Debit Payment processed under this Agreement.

8.2 Where a Cheque purchased by PacNet under this Agreement is not honoured upon presentment, for whatever reason, then upon re-endorsing a Cheque to which this paragraph applies, in favour of the Company and sending that Cheque to the Company, or where a Credit Card, Giro or Direct Debit Payment processed by PacNet under this Agreement is not honoured, for whatever reason:

(a) set-off the unpaid amount of the Cheque or unpaid or returned amount of the Credit Card, Giro or Direct Debit Payment against any sums owing by PacNet to the Company in which event, the Company will be deemed to have made a repayment in respect of the repurchase of the Cheque or the repurchase of the Credit Card, Giro or Direct Debit Payment; or

(b) invoice and bill the Company for the unpaid amount of the Cheque or Credit Card, Giro or Direct Debit Payment, such invoice being payable from the time at which it was sent by PacNet to the Company.

8.3 PacNet may, at its sole discretion, return the full amount of any Cheque or Credit Card, Giro or Direct Debit Payment authorized by a Customer to a Customer where the Customer is dissatisfied for any reason with the product or service or if the Customer claims that the product or service for which such payment has been authorized was not provided by the Company.

PART VI. GENERAL PROVISIONS

NOTICE

9.1 Any notice, instruction or document required to be given or served by this Agreement or by law will be in writing and may be given personally or by facsimile or by prepaid courier or by prepaid registered mail to the intended recipient at its address or facsimile number as set out in this Agreement and either party may by notice given in accordance with this paragraph change its address for the purposes of this paragraph.

9.2 Any notice will be deemed (in the absence of evidence of prior receipt) to have been received by the intended recipient the same day if personally served, the next business day if sent by facsimile, the fourth business day next following where sent by courier and on the seventh business day next following where sent by registered mail.

9.3 Unless PacNet is specifically advised in writing to the contrary, all business correspondence and returned Cheques shall be sent to the Company by ordinary mail at the address specified under the heading “Contracting Parties” in the signed service Agreement.

ARBITRATION

10.1 All disputes, losses, or claims brought by the Company arising out of or in connection with this Agreement, or in respect of any defined legal relationships associated therewith or derived therefrom will be referred to and finally resolved under the (Canadian) Commercial Arbitration Act or the International Commercial Arbitration Act, whichever is applicable.

10.2 The case will be administered by the Rules under the Acts.

10.3 The place of arbitration will be in Vancouver, British Columbia, Canada.

10.4 Notwithstanding Paragraphs 10.1 to 10.3, PacNet, in its sole discretion, may commence an action to pursue all disputes, losses, or Claims under this Agreement against the Company, however arising, in:

(i) British Columbia, Canada; and/or,br> (ii) any jurisdiction or court convenient to PacNet where the Company may have assets and the Company hereby consents to have the action heard in any jurisdiction and court where the Company’s assets may be found.

10.5 Any action brought by PacNet under this paragraph will be governed by and interpreted in accordance with the laws of British Columbia.

EVENTS OF DEFAULT

11.1 The following are acts or events of default upon which the respective rights of the parties hereunder will terminate:

(a) where any formal or informal proceeding for the dissolution of, liquidation of, or winding up of the affairs of either party is instituted by or against either party, or where a resolution is passed or any other act undertaken for the winding up of either party;

(b) where the Company ceases or threatens to cease to carry on the business;

(c) where a receiver, manager or trustee is appointed in respect of either party, by a court or arbitral body of competent jurisdiction, or under an agreement;

(d) where either party is adjudged bankrupt or becomes insolvent, or a petition in bankruptcy is filed against either party and that party does not immediately contest that bankruptcy in good faith, or where either party makes an assignment for the general benefit of creditors or applies for relief of any type in any jurisdiction in respect of the alleged insolvency or bankruptcy of the party;

(e) where any statement, representation or warranty made in connection with this Agreement as an inducement to PacNet to enter into this Agreement was false or misleading in any material respect at the time of its making, or where any material fact which ought to have been disclosed in the statement, representation or warranty was not disclosed, or where the Company fails to inform PacNet forthwith of any such material fact; or

(f) where a Credit Card, Giro or Direct Debit Payment is processed for the Company relating to Promotions other than those Promotions approved by PacNet.

11.2 Where either party is in breach of any representation, warranty or promise under this Agreement that party will not be in default unless it fails or refuses to remedy the breach within 30 days of the other party so demanding.

11.3 No waiver or consent by a party of or to any breach or default by any other party will be effective unless evidenced in writing, executed and delivered by the party so waiving or consenting and no waiver or consent effectively given as aforesaid will serve to operate as a waiver of or consent to any further or other breach or default in relation to the same or any other provision of this Agreement.

GENERAL

12.1 This Agreement contains the entire agreement between the parties hereto in respect of the transactions contemplated hereby and supersedes and replaces all previous written and oral agreements among the parties with respect to the subject matter hereof. The parties agree there are no implied terms or conditions that are not expressly contained in this Agreement.

12.2 This Agreement will not be deemed to be or interpreted as having been amended as a result of any oral communication between the parties or as a result of any practice between the parties hereto, but all amendments to this Agreement will be in writing and will be executed by both parties hereto, provided that any such amendment may be executed in counterpart.

12.3 This Agreement will enure to the benefit of and be binding upon the parties hereto and their respective successors and administrators.

12.4 This Agreement is personal to the Company and no right or obligation by the Company under this Agreement may be assigned by the Company without the written consent of PacNet, which consent may be arbitrarily withheld.

12.5 This Agreement may be executed in one or more counterparts and by facsimile transmission, each of which so executed will constitute an original and all of which together will constitute and be interpreted as if the executing parties hereto had executed one and the same Agreement.

12.6 Neither party shall be responsible to the other for non-performance or delay in performance (other than payment of money) occasioned by any cause beyond its control including, without limitation, acts or omissions of the other party, acts of civil or military authority, strikes, lockouts, embargoes, insurrections or Acts of God. If any such delay occurs, any applicable time period shall be automatically extended for a period equal to the time lost provided that the party affected gives the other party prompt notice of such delay and makes reasonable efforts to correct the reason for the delay.

12.7 This Agreement may be terminated at any time by either party on written notice to the other party, which notice will be effective from the time of its receipt, but no such termination will affect the rights of the parties hereto with respect to any Cheque purchased under this Agreement prior to the time of termination.

12.8 In this Agreement, a word defined in or importing the singular number has the same meaning when used in the plural number, and vice versa, and words importing gender will include all genders, and words importing persons will include individuals, corporations, partnerships, associations, trusts, unincorporated organizations, societies, governmental bodies and other legal or business entities.

12.9 Schedules “A” to “C” to be appended to this Agreement are contractual terms and have the same force and effect as if they were written as a terms contained within the text of this Agreement.

SCHEDULE A

Schedule A will list all “payee names” “trading-as” names, doing business as names (DBAs) and merchant account descriptors (MIDs) to be covered in this agreement.

SCHEDULE B

Payment Card Industry Data Security Standard (PCI).

A. If the Company stores cardholder account numbers, expiration dates, and other personal cardholder data in a database, the Company must follow Visa and MasterCard guidelines on securing such data, in addition to applicable data protection laws.

B. The Company confirms that it will ensure that it is fully compliant with the PCI standard, as applicable to the Company’s business. Furthermore, that it will meet all costs associated with achieving compliance and is solely responsible for any fines, costs or charges arising from not being compliant or data held by it being used for fraudulent or unauthorised purposes.

These security requirements apply to all “system components”, which is defined as any network components, server, or application included in, or connected to, the cardholder data environment. Network components, include, but are not limited to, firewall, switches, routers, wireless access points, network appliances, and other security appliances. Servers include, but are not limited to, Web, database, authentications, Domain Name Service (DNS), mail, proxy, and Network Time Protocol (NTP). Applications include all purchased and custom applications, including internal and external (Web) applications.

The following 12 Requirements comprise the Payment Card Industry Data Security Standard:

Build and Maintain a Secure Network

1. Install and Maintain a firewall configuration to protect data

2. Do not use vendor-supplied defaults for system passwords and other security parameters

Protect Cardholder Data

3. Protect Stored Data

4. Encrypt transmission of cardholder data and sensitive information across public networks

Maintain a Vulnerability Management Program

5. Use and regularly update anti-virus software

6. Develop and maintain secure systems and applications

Implement Strong Access Control Measures

7. Restrict access to data by business need-to-know

8. Assign a unique ID to each person with computer access

9. Restrict physical access to cardholder data

Regularly Monitor and Test Network

10. Track and monitor all access to network resources and cardholder data

11. Regularly test security systems and processes

Maintain an Information Security Policy

12. Maintain a policy that address information security

SCHEDULE C

Cheque Processing Commission Rate: To be quoted upon application

Credit Card Processing Commission Rate: To be quoted upon application

Credit Card Holdback Percentage: To be quoted upon application

Giro Credit Commission Rate: To be quoted upon application

Direct Debit Commission Rate: To be quoted upon application

Direct Debit Holdback Rate: To be quoted upon application

Customer initiated refund administration fee: $10.00
(Refers to any refund issued by PacNet as a result of a payment dispute raised directly by a Customer)