means including posting to a password- protected website), subject to the terms of this Agreement.
8. Settlement Account. Unless Bank is otherwise instructed in writing, Customer unconditionally authorizes, empowers, and directs Bank ( and authorizes and directs Bank to communicate with any financial instituti on maintaining the Settlement Account as necessary ) to: (i) debit the Settlement Account on the settlement date indicated on the Confirmati on for the full amount of each transaction effected under this Section VI .A (including all fees and charges payable hereunder), notwithstandi ng that such debit may cause the Settlement Account to be overdrawn; and (ii ) credit the Settlement Account with interest payments, principal payments , maturity payments or other payments received in respect of transactions effected under this Agreement. Customer hereby represents and warrants that instruction from any Authorized User is sufficient to authorize Bank to debit or credit the Settlement Account. If the Settlement Account i s not held by Bank, Customer confirms to Bank that it has authorized the financial institution maintaining the Settlement Account to accept debi t and credit entries to the Settlement Account and that no such authorization will be cancelled except with prior notice to Bank and in sufficient time and i n such manner as to allow the financial institution maintaining the Settlem ent Account and Bank a reasonable opportunity to act on such terminati on without disruption of any transactions or services under this Agreem ent .
Customer acknowledges that ACH payments to a Settlement Account not held by Bank are subject to ACH processing timelines, which may involv e a delay in available funds.
9. Delivery. Through the instructions of an Authorized User, Custom er shall specify the account to which any securities purchased hereunder are to be delivered. If such account is maintained by the Safekeepi ng Department of Bank, the securities will be held in accordance with t h is Agreement . If such account is maintained by an institution other than Bank, Bank’s responsibility for ensuring delivery shall be limited to accurately conveying the instructions for the appropriate delivery acc ount to the depository, agent or issuer of the securities, as applicable for the particular type of securities. Bank will issue no certificate, passbook , or any other evidence of any deposit except for the Confirmation.
10. Interest. All securities, Money Center deposits, and certificates of deposit purchased by Customer or held by Customer under this Agreement shall earn interest on the principal balance from the date of deposit or settlement date, as applicable, computed at the rate and i n the manner established by Bank from time to time for the given product . Any interest due will be credited monthly unless otherwise agreed to by Customer and Bank . No interest shall accrue on the date of withdraw al.
Bank reserves the right to change t he applicable interest rate on variabl e rate products (including those products whose underlying interest rate i s not managed by Bank) at any time. Such interest rate may be set at zer o or an interest rate less than zero. If the interest rate, or the index or other referenced rate upon which the interest rate is based, is at any time less than zero percent, Customer agrees to pay Bank all amounts of the negative interest or fees that Bank imposes as compensation for the less- than-zero interest rate. Bank will not provide notice of rate changes, but Customer may call the Money Center Department to obtain current r ate information. Bank shall notify Customer of the applicable interest rate and maturity term for the product opened under this Agreement at the time that the request for such product is made.
11. Fixed Investment Periods. Customer acknowledges that certai n products held by Bank under this Agreement have fixed investment periods, and agrees that such products will be held by Customer until their maturity dates or through their commitment dates. Customer agrees that if it withdraws part or all of such product before such date, Bank shall be entitled to impose a penalty (including by debiting the Settlement Acc ount for such amounts) in accordance with the terms of such product or the fee schedule provided to Customer , as applicable, and that the principal amount of such product may be reduced to the extent necessary to cov er such penalty if available funds are not otherwise provided by Customer.
12. Repurchase Transactions. Customer shall not effect any securiti es transactions under this Agreement in the expectation of entering into a repurchase transaction with Bank as counterparty unless Customer shal l first have executed and delivered to Bank a written master repurchas e agreement, in form and substance satisfactory to Bank, governing s uc h transactions. In any such transaction, where Bank is to hold securities as collateral or as the subject of a transaction, such securities will be held by the Safekeeping Department of Bank subject to the terms of this Agreement, unless Customer is otherwise notified. To the extent of any inconsistency between the terms of any such agreement and the term s of this Agreement, the terms of such other agreement shall control.
13. Fees and Expenses. Customer shall pay to Bank such fees in respect of the services provided under this Agreement, as disclosed to Custom er on the current fee schedule (which fee schedule may be amended fr om time to time by Bank). If the fee schedule is amended, the amended fees will apply to any Safekept Securities being held at that time, and to any securities transactions effected on the day such amendment becom es effective. Customer agrees to pay, and agrees and acknowledges that Bank may debit the Settlement Account for any fees and other amounts owing by Customer to Bank under this Agreement, or exercise an offs et for such amounts against any funds of Customer on deposit with Bank , or against any interest, principal or other incom e received or to be received by Bank on behalf of Customer, whether or not in respect of Safek ept Securities. In addition, Customer agrees to reimburse Bank for its commercially reasonable out ‐of‐pocket expenses for providing the services hereunder, including, but not limited to the reasonable fees and expenses of outside counsel if retained by Bank in its discretion in connection with this Section VI . If Customer fails to pay Bank any s um s due under this Section VI within thirty (30) days after the same ar e due (whether or not a late notice is sent to Customer by Bank), Bank may terminate this Agreement and return any Safekept Securities to Custom er at Customer’s expense, and to avail itself of any other remedy it may hav e in law or in equity.
14. Service Termination; Account Closure. Subject to Section VI.A.11 ("Fixed Investment Periods") , Customer may terminate the Service(s) described in this Section VI or close its Money Center investment acc ount at any time upon prior notice to Bank. Bank may terminate the Service( s ) described in this Section VI or close Customer's Money Center investm ent account at any time without prior notice to Customer . If any Servic e described in this Section VI is terminated or Customer's Money Center investment account is closed for any reason, Customer will continue to be responsible for any obligation incurred by Customer prior to terminati on or closure and for the fees and costs, if any, payable under this Agreement with respect to delivery of Customer's sec urities (including Safek ept Securities) or funds held by Bank to Customer or to another financi al institution.
15. Notices. Except for oral instructions to Bank from Authorized Us er s or from Bank to Authorized Users, all notices, disclosures and communications (including Confirmations) under this Section VI shal l be in writing and delivered by mail, fax, email or other electronic means as provided for in this Agreement. Notices, disclosures and communicati ons (including Confirmations) shall be deemed delivered upon transmissi on of the same by mail, fax, email or other electronic means as provided for in this Agreement, or on the third (3
rd
) Business Day after deposit of the s am e
in the United States mail, postage prepaid, and addressed to the maili ng address provided by Customer. All written confirmations, notices , instructions, or other communications from Customer to Bank shall be sent to following address ( which may be amended from time to time by Bank upon notice to Customer ):
For securities transactions:
U.S. Bank National Association
Money Center Department
800 Nicollet Mall, BC‐MN‐H18T
Minneapolis, MN 55402
Fax: (866) 904-7067
Email: [email protected]
For safekeeping services:
U.S. Bank National Association
Safekeeping Department
800 Nicollet Mall, BC‐MN‐H18R
Minneapolis, MN 55402
Fax: (612) 303‐0202
Email: [email protected]
16. Terms and Conditions of Electronic Delivery. All notices, disclosures and communications (including Confirmations and other
account information) from Bank may be delivered to Customer by electronic means (including, without limitation posting to a password- protected website) to the extent Customer elects to receive suc h information through electronic means, subject to the Terms and Conditi ons of Electronic Delivery set forth in Section VI .B below. Customer agr ees that sending information in this manner will constitute good and effecti v e delivery of the information to Customer, regardless of whether Customer actually accesses the website or other electronic medium containi ng the information.
17. No Investment or Tax Advice. Customer acknowledges that B a nk’s role is ministerial in nature and that Bank will not provide supervision, recommendations , or advice to Customer in connection with the investment, purchase, sale, retention, or other disposition of any securiti es or Money Center deposits, or the advisability or suitability of any produc t or transaction. Customer is responsible for evaluating the risks associated with such decisions. Customer acknowledges Bank is not an investm ent adviser, has no investment discretion, and will merely carry out instructions as directed by Customer. Bank’s ability to determine interes t rates on securities or M oney Center deposits shall not be deemed to be discretion or advice. Customer further acknowledges that Bank will not provide advice to Customer regarding the tax implications associated w i th the investment, purchase, sale, retention, or other disposition of any securities or Money Center deposits .
18. ERISA. If assets of an employee benefit plan subject to the Empl oy ee Retirement Income Security Act of 1974, as amended (“ERISA”), ar e intended to be deposited, invested or used by Customer in a transacti on under this Section VI .A, Customer shall notify Bank prior to effecting such deposit, investment or transaction and will provide Bank with su ch additional information as Bank may reasonably request. Customer represents and warrants to Bank that any deposi t, investment, or transaction pursuant to this Section VI .A shall not result in a " prohibi ted transaction" under ERISA or shall otherwise be exempt under ERISA, and Customer further agrees to indemnify and hold Bank harmless from any loss or claim arising therefrom.
19. No Representation or Warranty. Customer acknowledges and agrees that Bank makes no representation or warranty, express or impli ed, with respect to the validity, enforceability, collectability or investment quality of any securities bought or sold hereunder , or any deposits made or terminated hereunder .
20. Records; Account Statements; Taxes. Bank will maintain recor ds of Customer's account and provide customer with a Confirmation for transactions in accordance with this Section VI.A and per iodic account statements. Bank will also send to Customer such notices and repor ts as are required by law. Customer acknowledges and agrees that it is Customer's obligation to prepare and file all required tax returns and to pay all taxes due on any income that Bank collects for Customer.
21. Set Off. Bank has the right to apply funds in Customer's Money Center investment account or Settlement Account to any debt Customer ow es Bank. A debt includes any fees, overdrafts, debts that now exist and debts that Customer may incur in the future, or Customer 's obligations under a guaranty. When Bank sets off a debt Customer owes Bank, Bank reduc es the funds in the Money Center investment account or Settlement Acc ount by the amount of the debt. Bank is not required to give Customer any notice before exercisi ng its right of setoff. Customer agrees to hold Bank harmless from any claim arising as the result of Bank's enforcement of i ts right of setoff against Customer's Money Center investment account or Settlement Account. This right of setoff is in addition to any security interest that Bank might have in Customer's Money Center investment account or Settlement Account.
22. Legal Process. Legal process includes any levy, garnishment or attachment, tax levy or withholding order, injunction, restraining order , subpoena, search warrant, government agency request for informati on, forfeiture or seizure, or any other legal process relating to Customer' s Money Center investment account or Settlement Account. Bank may accept and act on any legal process Bank believ es to be valid, whether the process is served in person, by mail, by electronic notification, or at a banking location. If Bank incurs any fees or expenses (including attorney s ' fees and expenses) due to responding to legal process related to Customer's M oney Center investment account or Settlement Account, Bank may, in its sole discretion, charge these costs to any other depos i t account Customer maintains with Bank. All legal process is subject to Bank's rights of setoff and security interest in Customer 's Money Center investment account and/or Settlement Account.
B. TERMS AND CONDITIONS OF ELECTRONIC DELIVERY
The following sets forth the terms and conditions of use of Bank’ s electronic delivery and notification service (the “Electronic Delivery Service”) in connection with account(s) with Bank's Money Center Department or Safekeeping Department.
The Electroni c Delivery Service described in this Section VI .B shall constitute an Internet Service as defined in Section III of this Agreem ent and shall be subject to the terms set forth therein, as well as any other agreements between Customer and Bank and any applic able laws or regulations. If there is a conflict between the terms and conditions set for th in this Section VI .B and the terms and conditions of any other secti on of this Agreement or any other agreement between Customer and Bank as they relate to the Electronic Delivery Service, the terms and conditions set forth herein will control.
1. Electronic Delivery of Account Communications . Customer may elect to receive Account Communications (defined below) related to Customer's account(s) electronically. All Account Communications wil l be delivered electronically by posting to Bank’s password- protected webs i te designated for Customer’s account(s) or, at Bank’s election, delivered v i a electronic mail to the email address provided by Customer to Bank . “Account Communications” include, without limitation, all current and future account statements, C onfirmations, security notices, maturity notices, prospectuses, offering and disclosure documents, sharehol der communications (such as quarterly, semi -annual and annual reports , proxy statements, etc.), regulatory communications and other informati on, documents, data, notices and records regarding Customer’s account( s ) with Bank. Bank may, from time to time, designate additional Acc ount Communications that are then eli gible for electronic delivery through the Electronic Delivery Service, the delivery of which will then be subjec t to these terms and conditions. From time to time, Bank may add to, modify or delete any feature of the Electronic Delivery Service or Account Communications eligible for delivery through the Electronic Delivery Service at its sole discretion. Customer acknowledges and agrees that by being enrolled in the Electronic Delivery Service, Customer will no longer receive Account Communications by mai l that is otherwise available for delivery as part of the Electronic Delivery Service.
2. Accessing Account Communications. Bank will notify Customer via email when Account Communications are posted. Bank may also prov i de, in its sole and absolute disc retion, Account Communications directly v i a email. Customer may access all Account Communications for at leas t thirty (30) days from the date of initial posting. Customer acknowledges and agrees that all Account Communications will be deemed to consti tute good and effective delivery to Customer upon posting, regardless of whether Customer actually or timely receives or accesses the Account Information, or if Account Communications are delivered directly to Customer via email, when so delivered.
3. Changes in Delivery Method. Customer must notify Bank if it wishes to discontinue use of the Electronic Delivery Service. Following Bank ’ s receipt of such notice and after Bank has a reasonable opportunity to ac t on such notice, Customer will thereafter begin to receive Account Communications via U.S. mail beginning with Customer's next statement cycle and/or mailed Confirmation.
4. Reporting Unauthorized Transactions or Erroneous Statements.
Customer agrees to promptly and carefully review all Account Communications as and when delivered and notify Bank in accordanc e with this Agreement if Customer objects to any of the information provided.
5. Third- Party Services. Customer acknowledges and agrees that Customer's access to the Electronic Delivery Ser vice and Customer' s receipt of email notifications when Account Communications are pos ted may be delayed or prevented by factors affecting Customer’s or Bank ’ s Internet or telephone service provider(s) or other similar entit ies (“Third- Party Service Provid ers”). Bank makes no representations or warranti es whatsoever with regard to the products and services offered by such Thir d- Party Service Providers and shall not be liable for any loss caused, i n whole or in part, by a Third-Party Service Provider.
6. International Use. Bank makes no representations or warranties that any content or use of the Electronic Delivery Service is appropriate, legal or available in locations outside the United States . Customer acknowledges and agrees that accessing the Electro nic Delivery Services from territories where its contents or use is illegal and is prohibited by Bank. If Customer accesses the Electronic Delivery Service from locati ons outside the United States, Customer does so at its own risk. Customer is responsibl e for compliance with local laws.
7. Proprietary Rights; Materials; Trademarks. All content included or available through the Electronic Delivery Service (other than Customer ’ s account information), such as advertisements, test s, graphics, logos , button i cons, images, audio clips and software, is the property of Bank and/or third parties and is protected by copyrights, trademarks or other intellectual property rights. The compilation (meaning the collection, arrangement and assembly) of all content on the Electronic Delivery Service is the exclusive property of Bank and/or its licensors and is protected by copyrights or other intellectual property rights. The trademarks, logos and service marks displayed on the Electronic Deliver y Service (collectively, “T rademarks”) are the registered and unregister ed Trademarks of Bank or third parties. Under no circumstances may Customer use, copy, alter, modify or change these Trademarks. Nothing contained on the Electronic Delivery Service should be construed as granting by implication or otherwise any license or right to use any Trademark without the express written permission of Bank or the thir d party that has rights to such Trademark, as the case may be.
U.S. Bank Services Terms and Conditions Supplement
Account Validation Service
This U.S. Bank Services Terms and Conditions Supplement and the Exhibits attached hereto (this “Supplement”) amends and forms a part of the U.S. Bank Master Services Agreement and the U.S. Bank Services Terms and Conditions (collectively, the “Agreement”)..
WHEREAS, Bank offers the Account Validation Service (“the Service”) (as defined in Section 1 below);
WHEREAS, Customer desires to use the Service, pursuant to the terms and conditions set forth in this Supplement;
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which is acknowledged, Bank and Customer (individually a “Party” and collectively the “Parties ”) hereby agree as follows:
1. Definitions.
1.1 “Account Validation Service” or “the Service” means account status or Item information, identity-to-account matching performed to confirm an account owner or authorized user , or both by inquiring against account owner data maintained by Early Warning LLC (“Early Warning”) in one or more databases.
1.2 “Applicable Laws” means all federal, state and local laws, and the regulations and gui delines promulgated thereunder, applicable to the marketing, promotion, offering for sale, sale, provision, creation, delivery, transmission and use of the Service, including without limitation any applicable provisions of the Fair Credit Reporting Act of 1970, 15 U.S.C. Section 1681 et. seq. (the “FCRA”), the Fair and Accurate Credit Transaction Act of 2003, Pub. L. 108-159, 111 Stat. 1952, and the Gramm- Leach-Bliley Act (including similar state laws and regulations to each of the foregoing) in each case as amended from time to time.
1.3 “Contributor” means an entity that transmits certain specific data elements to Early Warning.
1.4 “Detailed Response” means Response Data that is in the same or substantially the same form as the data received by Bank from EWS.
1.5 “Item” means either: (a) a physical check; (b) an image replacement document (IRD); (c) MICR line information; (d) an automated clearinghouse entry; or (e) an item as defined in the Uniform Commercial Code.
1.6 “Processor” means a Customer who provides Translated Responses to its own customer users that are the end users of the Translated Responses.
1.7 “Response Data” means information transmitted by Early Warning to Bank and provided by Bank to Customer in the form of a Detailed Response or a Translated Res ponse in response to an inquiry by Customer.
1.8 “Translated Response” means Response Data that is in a form which indicates a risk level, as determined by Bank, such as by high/medium/low, or green/ yellow/red, or accept/decline.
2. Service Implementation.
2.1 Customer agrees to complete a customer application which Bank will review and submit to Early Warning. By submitting the application, Customer agrees that if Customer elects to receive Detailed Responses, instead of receiving only Translat ed Responses, Customer will participate in any Bank or Early Warning initial and on-going risk assessment processes.
2.2 Customer shall transmit all inquiries for the Service to Bank in accordance with the formatting and specification requirements established by Bank.
2.3 For each inquiry properly transmitted to Bank, Bank will transmit Response Data either as a Detailed Response or Translated Response, as request by Customer and agreed to by Bank , to Customer.
3. Use of the Service and Response Data.
3.1 Customer is solely responsible for the accuracy of the inquiry data it submits and for its use of Response Data.
3.2 Except as permitted in Section 5, Customer shall not (a) distribute, transmit, disseminate, or disclose, in any form or by any means, any part of the Response Data to any person or entity other than to the individual that is the subject of the Response Data in connection with disclosures required to be made under Applicable Laws, (b) allow any third party to access the Response Data, (c) sell, resell, sublicense, or otherwise transfer any part of the Response Data to any other person or entity, or (d) merge, aggregate or compile Response Data into any other database for use in connection with future inquiries .
3.3 Customer shall not retain or store Response Data except to the extent necessary to comply with Applicable Laws . For as long as Response Data remains in Customer’s possession, Customer shall be responsible for the continuing protection of such Response Data in compliance with the requirements of Section 4.5 of this Supplement. Customer shall not store Response Data outside of the United States without prior written approval from Bank and Early Warning.
3.4 If Customer uses such Response Data to take adverse action against a consumer, such consumer must be referred by Customer to Early Warning for handling disputes concerning the completeness or accuracy of any item of information contained within the Response Data and for disclosure of each consumer reporting agency that was used to provide information in the Response Data. Customer shall comply with all applicable pr ovisions of the FCRA and any state equivalent in handling such disputes and making such disclosures.
3.5 Customer shall not knowingly permit any of its directors, officers, employees, contractors, subcontractors, attorneys, auditors and accountants, to access the Service if the person has been convicted of a crime in connection with: (a) a dishonest act, breach of trust, or money laundering, or has agreed to enter into a pretrial diversion or similar program in connection with a prosecution for such offense, as described in Section 19 of the Federal Deposit Insurance Act, 12 U.S.C. § 1829(a); or (b) a felony.
3.6 Customer may access the Service solely for use by Customer as set forth and permitted in this Supplement. Customer shall only use the Response Data for an authorized use pursuant to Exhibit A. The Response Data is time- sensitive and only intended to be used in connection with the specific inquiry for which it was requested.
3.7 Customer acknowledges and agrees that Early Warning is not an agent of Bank. Bank makes no representation or warranty, including, but not limited to, the accuracy, completeness, timeliness or usefulness, of Response Data, and Bank assumes no liability with respect to such. Bank provides Translated Responses as an indicator of the potential risk associated with data received from Early Warning, however no Translated Response shall be interpreted by Customer as indicating no risk and Bank makes no such guarantee. Customer uses Response Data at its own risk and Cus tomer agrees that Bank shall have no liability with respect to Response Data.
3.8 Customer shall comply with all applicable provisions of the FCRA and any state equivalent applicable to persons who procure consumer reports. For purposes of the Service, Customer agrees that Bank is not a credit reporting agency.
3.9 Customer acknowledges receipt of the notices attached hereto as Exhibit C, which describes certain obligations of (a) furnishers of information to consumer reporting agencies, and (b) users of consumer reports and, to the extent applicable, agrees to comply with such obligations.
3.10 Customer shall not refuse or decline an Item based solely on the following Response Data: No Information; No Known Information; Not Located; Non-DDA; Broker Check; Credit Card Check; Home Equity Check; or Line of Credit Check or other materially similar responses.
3.11 Customer certifies that it will only use Response Data for a legitimate business need in connection with a business transaction that was initiated by the consumer that is the subject of the Response Data. If Customer desires to use Response Data for any other permissible purpose under the FCRA , Customer must first get approval from Bank and EWS, and such approval may be withheld at Bank’s and EWS’s sole discretion.
Early Warning Terms of Use.
4.1 Early Warning shall have the right, during normal business hours, and not more than once per calendar year, upon reasonable advance notice, to review Customer’s relevant processes and procedures to verify Customer ’s compliance with the terms of this Supplement and/or Exhibit A. This includes a review of inquiries processed and related transactions or transaction decisions.
4.2 Upon request by Customer, Early Warning shall provide to Customer a copy of its most recent Annual Risk Report (ARR), as well as any updated ARRs upon request from Customer.
4.3 If, in addition to the information provided by Early Warning as described in S ection 4.2 above, Customer requires to conduct an on-site audit of Early Warning’s information security program outside of Early Warning’s regularly scheduled consolidated on- site audit periods (which are free to Customer), then a daily fee shall be assessed to Customer for the on-site audit. Any on-site audits (i.e. outside of the regularly scheduled consolidated on- site audit periods) shall not begin until the daily fee for each, as applicable, has been agreed upon by the P arties and Early Warning. Fees related to these on-site audits will be billed to Customer separately from fees for the Service. However, any on- site audit that is triggered by a regulatory requirement or a court order will not result in a daily fee as set forth herein.
4.4 If, in addition to the information provided by Early Warning as described in Section 4 .3 above, Customer requires that Early Warning complete a questionnaire regarding Early Warn ing’s information security program, then a fee shall be assessed to Customer for the questionnaire, s agreed upon by the Parties and Early Warning . Any completion of a questionnaire in this instance shall not begin until the fee for each, if applicable, has been agreed upon by the Parties and Early Warning. Fees related to the completion of questionnaires by Early Warning will be billed to Customer separately from fees for the Service.
4.5 In the event of a breach in security resulting in actual or suspected loss of or unauthorized access to Response Data, Customer shall: (a) immediately notify Early Warning by calling (877) 275- 7774, Option 4 and notify U.S. Bank by contacting its relationship manager ; (b) conduct a forensics examination to determine to what extent Response Data w ere compromised; (c) provide to Early Warning and U.S. Bank , in writing, details concerning the breach, including: (i) nature and impact of the breach, (ii) assessment of immediate risk due to the breach, (iii) corrective actions already taken, and (iv) corrective actions to be taken; (d) cooperate with Early Warning, U.S. Bank and any affected Inquirers, Contributors , regulators or law enforcement to assist in regaining possession of the Response Data and in preventing its further unauthorized use and to notify affected consumers if required by Applicable Law; and (e) take measures to restore and enhance its security policies and procedures to avoid further breaches.
4.6 Early Warning or Bank may suspend the Service upon notice to Customer if Customer does not comply with the requirements of this Supplement or if Early Warning or Bank is unable to verify Customer’s compliance with the requirements of this Supplement to Early Warning’s or Bank’s reasonable satisfaction.
4.7 Early Warning is a third- party beneficiary of this Supplement and Early Warning retains the right to enforce the terms of this Supplement against Customer.
4.8 Early Warning shall have no liability arising out this Supplement, including, without limitation, any duties or obligations (contractual, at law or otherwise) owed by Bank to Customer or by Customer to Bank.
4.9 If Customer receives notice, from any source that Customer, any individual or entity that holds a controlling interest in Customer, any member of Customer's board of directors or equivalent governing body, any officer or manager of Customer, or any other employee of Customer who has access to Response Data or has decision-making authority on how the Service is used or marketed, is the subject of an investigation or other action by any Federal, state or local governmental, administrative or regulatory body, Customer will immediately notify Bank and Early Warning of such investigation or other action. Upon such notification, Bank or Early Warning may, in their sole discretion, cease providing responses comprised in whole or in part of Response Data or providing the Service to Customer.
4.10 Customer authorizes Early Warning to use data submitted in an inquiry for the purpose of: (a) preparing statistical reports and conducting data analytics, parsing routines, data modeling, and other analyses to test and evaluate Early Warning’s services; (b) developing and providing new services or enhancements to existing services; and (c) developing and providing services to third parties engaged in the business of offering identity theft protection services to consumers, provided that no personally identifiable inf ormation shall be returned to any such third parties. The reports and results of the analyses described in clause (a) may be provided to other parties , provided that such reports and analyses do not identify specific data with respect to any party.
4.11 Additional terms only applicable to receivers of Detailed Responses.
4.11.1 Early Warning shall have the right, during normal business hours, upon reasonable advance notice, and not more than once per calendar year, to conduct an on-site audit of Customers’ information security program and related policies, controls, processes and procedures. In addition, Customer shall complete a Shared Assessment Significant Information Gathering (SIG) Questionnaire or provide to Early Warning, upon request, a copy of its most recent third party data processing audit or review (e.g., SOC2-Type I I, ISAE 3402, SSAE 16 or equivalent based upon American Institute of Certified Public Accountants (AICPA) standards , Acceptable Use Procedures (AUP), etc.) as conducted by its external auditors related to the Service or Bank Services, as applicable. The ri ght of on- site audit will only be exercised if there is a reasonable belief that sensitive data associated with detailed responses is being misused.
4.11.2 Customer shall maintain a written information security program that contains administrative, technical and physical safeguards designed to: (a) ensure the security and confidentiality of Response Data; (b) protect against any anticipated threats or hazards to the security or integrity of Response Data; (c) protect against unauthorized access to or use of such Response Data that could result in substantial harm or inconvenience to any customer of Customer or subject of an inquiry; (d) limit access, use and disclosure of Response Data as expressly permitted by this Supplement; (e) ensure the proper disposal of Response Data, (f) ensure the encryption of Response Data at rest using a current industry acceptable encryption method (e.g., AES-256 or stronger encryption) and; (g) comply with Applicable Law. Customer’s information security program must be designed to: (i) meet the objectives of the Interagency Guidelines Establishing Information Security Standards promulgated by the federal banking agencies as amended from time to time, and; (ii) include control objectives that meet applicable industry standards such as ISO 27002, FFIEC, OCC, PCI, or NIST. Customer will promptly notify Bank and Early Warning of any modification to Customer’s information security program.
5. Customer Acting as a Processor.
If Customer acts as a Processor, it agrees to the following additional terms:
5.1 Customer will assign each of its end-user customers (“Clients”) that receives any response that is comprised of Response Data a unique identification number (“Client ID”). Additionally, if inquiries are transmitted for multiple divisions or affiliates of such Clients, Customer will assign each such division and/or affiliate a unique Client ID in all i nquiries transmitted for such User.
Customer shall not use any Client ID in any inquiry that is made for a User, any of its divisions or its affiliates, other than the User, applicable division or affiliate for which such Client ID is assigned. Early Warning or Bank will define how the various Client ID fields are required to be populated during the implementation phase.
5.2 Customer shall transmit to its Clients only a Translated Response and shall not transmit Detailed Responses to its Clients . Customer shall prohibit any of its Clients that receives Translated Responses from selling, reselling, sublicensing, or otherwise transferring any part of such response to any other person or entity, unless approved in writing by Bank and Early Warning.
5.3 Early Warning or Bank may suspend or terminate the provision of Response Data to Customer upon notice to Customer if Customer does not comply with the requirements of Sections 5.4 and 5.5 or if Bank or Early Warning is unable to verify Customer's compliance to Bank’s or Early Warning's reasonable satisfaction.
5.4 If Customer receives notice, from any source, that (a) a User that receives any Translated Response; (b) any individual or entity that holds a controlling interest in such User ; (c) any member of the User's board of directors or equivalent governing body; (d) any officer or manager of such User; or (e) any other employee that has access to Translated Responses or has decision-making authority on how the Service is used or marketed (each of the foregoing, a "Regulated Party"), is the subject of an investigation or other action by any Federal, state or local governmental, administrative or regulatory body, Customer will immediately notify Bank and Early Warning of such investigation or other action. Early Warning and Bank, in their sole discretion, may require that Customer cease providing Translated Responses to that User. Not more than five (5) days following Customer's receipt of Early Warning's or Bank’s notification to cease providing such responses to the User, Customer will provide Early Warning and Bank with written certification that it (a) has ceased providing, (b) does not currently provide, and (c) will not provide in the future Translated Responses to the User that is subject to, or is controlled by a Regulated Party that is subject to, the investigation or action.
5.5 Customer will establish and maintain procedures for assessing its Clients that rec eive any Translated Responses. Such procedures shall meet or exceed the m inimum requirements for User vetting attached hereto as Exhibit B, which may be modified by Early Warning or Bank upon notice to Customer (the "Vetting Requirements"). In addition to any other audit rights o f Early Warning and Bank described in this Supplement or another agreement , Early Warning and Bank shall have the right, once per calendar year, to review Customer's vetting procedures and evidence of such User assessments completed by Customer. In addition to the foregoing annual audit rights, Customer agrees that if Early Warning or Bank reasonably believes that Customer is not complying with the Vetting Requirements, Early Warning and Bank shall have the right to inspect Customer's records and procedures related to Customer's obligations under this Section during normal working hours, and in a manner as to minimize interference with Customer's normal business activities.
5.6 Customer agrees that Early Warning and Bank shall have the right to approve any of Customer’s Clients for which Customer acts as a Processor.
6. Indemnification. Customer agrees to indemnify, hold harmless and defend Bank, its directors, officers, and employees, and its agents and successors, from and against any and all claims made by any third party and all related losses, expenses, damages, costs and liabilities, including reasonable attorneys' fees and expenses incurred in the investigation or defense (“Damages”), to the extent such Damages arise out of or relate to the following: ( a) any breach of any representation, warranty, or covenant of this Supplement by Customer; (b) any errors in Customer’s transmission of data or inquiries; or (c) Customer’s use of the Response Data.
7. Termination. In addition to the termination rights provided to Bank in the Agreement, Bank may terminate or suspend the Service immediately if any Response Data provided to Customer is used or disclosed by Customer: ( a) contrary to this Supplement ; (b) in violation of any Applicable Law pertaining to the use of the Service; or (c) Customer experiences any incident that jeopardizes the security of any Response Data in its possession.
CUSTOMER APPROVAL – AUTHORIZED SIGNER
CUSTOMER
Signature:
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Name:
Title:
Date: Click or tap to enter a date.
For U.S. Bank Internal Use Only
Client Integration: Authorized signer is listed on TM Contract/Appendix B Yes Date: Verified by:
Exhibit A
Authorized Uses of the Service
1. Authorized Uses of Response Data. Customer shall use the Service and Response Data subject to the terms and conditions of the Supplement, and solely for the purposes described below.
1.1.1 To validate the existence and status of an account and the associated Response Data in determining whether to accept or decline an Item as payment for goods or services;
1.1.2 As a factor in verifying, authorizing or guaranteeing a payment;
1.1.3 To cash an Item or provide cash back from a deposit or payment;
1.1.4 To decide whether to forward an Item for collection or represent it electronically; or
1.1.5 To determine whether to allow the account or application to be enrolled for use in connection with future transactions by validating that the account exists and/or is in good standing
1.1.6 To determine whether to accept or decline an Item as payment for goods or services by validating that the consumer presenting such Item is an authorized accountholder, user, or signatory of the account on which the Item is drawn;
1.1.7 To determine whether to accept or decline an Item as payment for goods or services by validating that the company name associated with such Item is the company name of the account on which such Item is drawn;
1.1.8 To determine whether to accept or decline an Item as funding for an account by validating that the consumer is an authorized accountholder, user, or signatory of the account used or to be used in connection with the funding;
1.1.9 To determine whether to transfer funds by validating that the consumer is an authorized accountholder, user, or signatory of the account used or to be used in connection with the transfer of funds;
1.1.10 To determine whether to allow the account to be enrolled for use in the connection with future transactions by validating that: (a) the consumer is an authorized accountholder, user, or signatory of the account; or (b) the company name is associated with the account.
1.2 For Customers that are regulated entities providing banking, insurance and/or investment products and services, the following are additional authorized uses of Response Data:
1.2.1.1 To determine whether to accept or decline an Item for payment of a credit card, line of credit or loan (including personal and small business loans and lines of credit, auto loans, home mortgages, home equity loans and lines of credit and student loans);
1.2.1.2 To delay or restrict the open to buy decision;
1.2.1.3 To validate the existence and status of a recipient account of an outbound payment transaction and the associated Response Data in determining whether to transfer funds to such recipient account;
1.2.1.4 To determine, as part of a fraud investigation resulting from a consumer filing an unauthorized transaction claim, whether the account exists and/or is in good standing; and
1.2.1.5 If the Customer determines that further investigation is necessary to mitigate risk based upon any of the following Response Data: Closed for Cause, Closed for Cause/Purged; Closed; Closed/Purged; Pending or Recently
Closed; Post No Debits; Account Overdraft Status; Return Account; or Stop Payment, or other materially similar responses.
1.2.1.6 Customer may also use Response Data for the following purposes:
1.2.1.6.1. As a factor in determining whether to close an existing account for a consumer or company;
1.2.1.6.2. As a factor in determining whether to monitor an existing account for a consumer or company; and
1.2.1.6.3. As a factor in determining whether to restrict or change existing account privileges for a consumer or company (including, but not limited to: (a) reducing the credit line for the account; (b) restricting account access; and/or (c) modifying account debit/withdrawal limits).
1.2.1.6.4. To determine, as part of a fraud investigation resulting from a consumer filing an unauthorized transaction claim, whether the consumer is an authorized accountholder, user, or signatory of an account used in connection with the transfer of funds; and
1.2.1.6.5. To determine whether to process a check order by validating that: (a) the consumer is an authorized accountholder, user or signatory of the account; or (b) the company name is associated with the account; and (c) the address is associated with the account.
1.3 For Customers that are local, state or federal government agencies or their contractors, Response Data may be used only as follows; provided, however, such Customer may not refuse or decline a consumer or a company transaction or request based solely on such Response Data:
1.3.1.1 To determine if information provided by an individual or a company meets the National Institute of Standards and Technology (NIST) Level 2 and/or Level 3 identification and authentication requirements;
1.3.1.2 To validate the existence and status of an account and the associated Response Data, in determining whether to accept or decline an Item as payment for goods or services; and
1.3.1.3 To determine whether to allow the account or application to be enrolled for use in connection with future transactions by validating that the account exists and/or is in good standing.
1.3.1.4 To direct requests for account verifications to account holding organizations or entities;
1.3.1.5 To determine whether to transfer funds by validating that the consumer is an authorized accountholder, user, or signatory of the account used or to be used in connection with the transfer of funds; and
1.3.1.6 To determine whether to allow the account to be enrolled for use in connection with future transactions by validating that: (a) the consumer is an authorized accountholder, used or signatory of the account; or (b) the company name is associated with the account.
Exhibit B
Minimum Vetting Standards for Clients of Customer as Processors All Clients of a Customer as Processor (where applicable) that receive a response to an inquiry where such response is comprised of or derived from, in whole or in part, Response Data provided by Early Warning must be vett ed by Customer as Processor, at a minimum, to meet the requirements herein and in accordance with the procedures outlined below. For the purposes of these vetting requirements, User includes the parent company, affiliates and any DBA entity.
Customer as Processor must maintain:
1. Written procedures for User vetting that meet the minimum requirements outlined in this Exhibit B- under the section below titled “Minimum Vetting Requirements”.
2. Such written procedures must include a process for all of the following:
a. Completing each of the minimum requirements;
b. Ensuring Clients are not implemented to receive any response to an inquiry that is comprised of or derived from, in whole or in part, of Response Data prior to completion and clearance of the vetting process;
c. Timely review of all existing Clients;
d. Listing and/or documenting the vetting history for each User including dates and findings; e. Escalation of any negative information found or any information that cannot be verified; i. Must include a review by CEO or equivalent C-level employee of the Customer as Processor’s team and documentation of the results.
ii. Any approval of User following review under 2.e.i. must include a detailed justification. f. Storage and review of hard copies and/or electronic copies of all evidence to support the vetting process for each requirement; and
g. Providing required information and/or documentation to Early Warning as part of an audit or review to support Customer as Processor’s vetting process.
New Customers:
Each new User must be vetted and pass each of the vetting requirements prior to the User receiving any response to an inquiry that is comprised of or derived from, in whole or in part, of Response Data and must be vetted annually thereafter.
Existing Customers:
Each existing User as of the date of the agreement to receive Response Data, receiving any response to an inquiry that is comprised of or derived from, in whole or in part, Response Data must be vetted within twelve (12) months of execution of the a greement, and annually thereafter, not to exceed twelve (12) months since the last vetting of the User.
Minimum Vetting Requirements:
1. Have a complete and documented understanding of the User’s business model and transaction process flow.
2. Confirm User has: a) a legitimate business need for a response to an inquiry where such response is comprised of or derived from, in whole or in part, Response Data provided by Early Warning; and b) permissible purpose for procurement of a consumer report in accordance with Section 604 of the Fair Credit Reporting Act (FCRA).
3. Verify that the type of business, products and/or services offered, and contact information that the User provided on the application or questionnaire coincides with information on the User website and is verified through other public resources.
4. Verify whether the address provided is a commercial or residential building by performing an onsite visit or appropriate Internet searches.
5. Verify the address and telephone number provided on the application is accurate by utilizing Internet searches such as Google, telephone white pages, Hoovers, Reference USA, etc., or request supporting documentation such as a copy of a current lease and/or telephone bill in the User ’s name.
6. Verify the User is active and in good standing in its state of incorporation or state of licensing by searching the state’s website (e.g., Secretary of State or State Corporation Division) or obtain a certificate of good standing.
7. Verify whether the User is the subject of an FTC or CFPB action or case by searching the FTC and CFPB websites for the business name and the names of all owners, principals, officers and directors.
8. Conduct an OFAC search for the business name and the names of all owners, principals, officers and directors.
9. Conduct a Better Business Bureau search for the business name.
10. Conduct Internet searches such as a Google search for the business name and the names of all owners, principals, officers and directors for any negative information.
11. Conduct a s earch of the State Attorney General’s website in the User ’s state of incorporation and state(s) of licensing to verify whether the business and/or any owner, principal, officer or director is subject to state action or cases.
12. Document and implement a process for handling items that cannot be verified or validated or where negative information is found, including without limitation the escalation procedures described in this Exhibit B.
13. Maintain a User specific checklist (signed and dated) indicating each of the verification steps were completed, document all findings and keep copies of all associated back up documentation.
14. Each prospect or new User must be vetted and pass the vetting criteria prior to the implementation of the User.
15. All existing Clients must be vetted and pass the vetting criteria on, at least, an annual basis, not to exceed twelve (12) months since the last vetting of the User was completed.
Note: Non- U.S. customers must go through a similar vetting process to meet the minimum vetting requirements and must be verified with the appropriate agencies of the country in which the company is doing business. Customer is responsible for compliance with any privacy laws, export laws and any other applicable laws and regulations relating to the transmission of data from and/or to such countries.
Customer is further responsible for ensuring that its employees, agents, contractors, customers, and any other individuals or entities it exposes to responses comprised of or derived from, in whole or in part, Response Data provided by Early Warning are not on any U.S. Restricted Party Lists 1 and not from U.S.
sanctioned destinations2.
1 “U.S. Restricted Party Lists” include Denied Persons Lists, the Unverified List, the Entity List, the Specially Designated Nationals List, the Debarred List, and the Nonproliferation Sanctions administered by the U.S. Department of Commerce, U.S. Department of Treasury, and U.S. Department of State.
2 “U.S. sanctioned destinations” means entities and individuals who are incorporated in or nationals of countries upon which the U.S. Department of Commerce and the U.S. Department of Treasury have placed trade restrictions.
Exhibit C
All users of consumer reports must comply with all applicable regulations. Information about applicable regulations currently in effect can be found at the Consumer Financial Protection Bureau’s website, www.consumerfinance.gov/learnmore.
NOTICE TO USERS OF CONSUMER REPORTS:
OBLIGATIONS OF USERS UNDER THE FCRA
The Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681–1681y, requires that this notice be provided to inform users of consumer reports of their legal obligations. State law may impose additional requirements. The text of the FCRA is set forth in full at the Consumer Financial Protection Bureau’s (CFPB) website at www.consumerfinance.gov/learnmore . At the end of this document is a list of United States Code citations for the FCRA. Other information about user duties is also available at the CFPB’s website.
Users must consult the relevant provisions of the FCRA for details about their oblig ations under the FCRA.
The first section of this summary sets forth the responsibilities imposed by the FCRA on all users of consumer reports. The subsequent sections discuss the duties of users of reports that contain specific types of information, or that are used for certain purposes, and the legal consequences of violations. If you are a furnisher of information to a consumer reporting agency (CRA), you have additional obligations and will receive a separate notice from the CRA describing your duties as a furnisher.
I. OBLIGATIONS OF ALL USERS OF CONSUMER REPORTS
A. Users Must Have a Permissible Purpose
Congress has limited the use of consumer reports to protect consumers’ privacy. All users must have a permissible purpose under the FCRA to obtain a consumer report. Section 604 contains a list of the permissible purposes under the law. These are:
• As ordered by a court or a federal grand jury subpoena. Section 604(a)(1) • As instructed by the consumer in writing. Section 604(a)(2) • For the extension of credit as a result of an application from a consumer, or the review or collection of a consumer’s account. Section 604(a)(3)(A) • For employment purposes, including hiring and promotion decisions, where the consumer has given written permission. Sections 604(a)(3)(B) and 604(b) • For the underwriting of insurance as a result of an application from a consumer. Sectio n 604(a)(3)(C)
• When there is a legitimate business need, in connection with a business transaction that is initiated by the consumer. Section 604(a)(3)(F)(i)
• To review a consumer’s account to determine whether the consumer continues to meet the terms of the account. Section 604(a)(3)(F)(ii)
• To determine a consumer’s eligibility for a license or other benefit granted by a governmental instrumentality required by law to consider an applicant’s financial responsibility or status.
Section 604(a)(3)(D)
• For use by a potential investor or servicer, or current insurer, in a valuation or assessment of the credit or prepayment risks associated with an existing credit obli gation. Section 604(a)(3)(E)
• For use by state and local officials in connection with the determination of child support payments, or modifications and enforcement thereof. Sections 604(a)(4) and 604(a)(5) In addition, creditors and insurers may obtain certain consumer report information for the purpose of making “prescreened” unsolicited offers of credit or insurance. Section 604(c). The particular obligations of users of “prescreened” information are described in Section VII below.
B. Users Must Provide Certifications
Section 604(f) prohibits any person from obtaining a consumer report from a consumer reporting agency (CRA) unless the person has certified to the CRA the permissible purpose(s) for which th e report is being obtained and certifies that the report will not be used for any other purpose.
C. Users Must Notify Consumers When Adverse Actions Are Taken The term “adverse action” is defined very broadly by Section 603. “Adverse actions” include all business, credit, and employment actions affecting consumers that can be considered to have a negative impact as defined by Section 603(k) of the FCRA —such as denying or canceling credit or insurance, or denying employment or promotion. No adverse action occurs in a credit transaction where the creditor makes a counteroffer that is accepted by the consumer.
1. Adverse Actions Based on Information Obtained From a CRA If a user takes any type of adverse action as defined by the FCRA that is based at least in part on information contained in a consumer report, Section 615(a) requires the user to notify the consumer. The notification may be done in writing, orally, or by electronic means. It must include the following:
• The name, address, and telephone number of the CRA (including a toll-free telephone number, if it is a nationwide CRA) that provided the report.
• A statement that the CRA did not make the adverse decision and is not able to explain why the decision was made.
• A statement setting forth the consumer’s right to obtain a free disclosure of the consumer’s file from the CRA if the consumer makes a request within 60 days. • A statement setting forth the consumer’s right to dispute directly with the CRA the accuracy or completeness of any information provided by the CRA.
2. Adverse Actions Based on Information Obtained From Third Parties Who Are Not Consumer Reporting Agencies
If a person denies (or increases the charge for) credit for personal, family, or household purposes based either wholly or partly upon information from a person other than a CRA, and the information is the type of consumer information covered by the FCRA, Section 615(b)(1) requires that the user clearly and accurately disclose to the consumer his or her right to be told the nature of the information that was relied upon if the consumer makes a written request within 60 days of notification. The user must provide the disclosure within a reasonable period of time following the consumer’s written request.
3. Adverse Actions Based on Information Obtained From Affiliates If a person takes an adverse action involving insurance, employment, or a credit transaction initiated by the consumer, based on information of the type covered by the FCRA, and this information was obtained from an entity affiliated with the user of the information by common ownership or control, Section 615(b)(2) requires the user to notify the consumer of the adverse action. The notice must inform the consumer that he or she may obtain a disclosure of the nature of the information relied upon by making a written request within 60 days of receiving the adverse action notice. If the consumer makes such a request, the user must disclose the nature of the information not later than 30 days after receiving the request. If consumer report information is shared among affiliates and then used for an adverse action, the user must make an adverse action disclosure as set forth in I.C.1 above.
D. Users Have Obligations When Fraud and Active Duty Military Alerts Are in Files When a consumer has placed a fraud alert, including one relating to identity theft, or an active duty military alert with a nationwide consumer reporting agency as defined in Section 603(p) and resellers, Section 605A(h) imposes limitations on users of the reports obtained from the consumer reporting agency in certain circumstances, including the establishment of a new credit plan and the issuance of additional credit cards. For initial fraud alerts and active duty alerts, the user must have reasonable policies and procedures in place to form a belief that the user knows the identity of the applicant or contact the consumer
at a telephone number specified by the consumer; in the case of extended fraud alerts, the user must contact the consumer in accordance with the contact information provided in the consumer’s alert.
E. Users Have Obligations When Notified of an Address Discrepancy Section 605(h) requires nationwide CRAs, as defined in Section 603(p), to notify users that request reports when the address for a consumer provided by the user in requesting the report is substantially different from the address in the consumer’s file. W hen this occurs, users must comply with regulations specifying the procedures to be followed. Federal regulations are available at http://www.consumerfinance.gov/learnmore.
F. Users Have Obligations When Disposing of Records
Section 628 requires that all users of consumer report information have in place procedures to properly dispose of records containing this information. Federal regulations have been issued that cover disposal.
II. CREDITORS MUST MAKE ADDITIONAL DISCLOSURES
If a person uses a consumer report in connection with an application for, or a grant, extension, or provision of, credit to a consumer on material terms that are materially less favorable than the most favorable terms available to a substantial proportion of consumers from or through that person, based in whole or in part on a consumer report, the person must provide a risk-based pricing notice to the consumer in accordance with regulations prescribed by the CFPB.
Section 609(g) requires a disclosure by all persons that make or arrange loans secured by residential real property (one to four units) and that use credit scores. These persons must provide credit scores and other information about credit scores to applicants, including the disclosure set forth in Section 609(g)(1)(D) (’’Notice to the Home Loan Applicant’’).
III. OBLIGATIONS OF USERS WHEN CONSUMER REPORTS ARE OBTAINED FOR EMPLOYMENT
PURPOSES
A. Employment Other Than in the Trucking Industry
If information from a CRA is used for employment purposes, the user has specific duties, which are set forth in Section 604(b) of the FCRA. The user must:
• Make a clear and conspicuous written disclosure to the consumer before the report is obtained, in a document that consists solely of the disclosure, that a consumer report may be obtained. • Obtain from the consumer prior written authorization. Authorization to access reports during the term of employment may be obtained at the time of employment. • Certify to the CRA that the above steps have been followed, that the information being obtained will not be used in violation of any federal or state equal opportunity law or regulation, and that, if any adverse action is to be taken based on the consumer rep ort, a copy of the report and a summary of the consumer’s rights will be provided to the consumer. • Before taking an adverse action, the user must provide a copy of the report to the consumer as well as the summary of consumer’s rights. (The user should receive this summary from the CRA.) A Section 615(a) adverse action notice should be sent after the adverse action is taken.
An adverse action notice also is required in employment situations if credit information (other than transactions and experience data) obtained from an affiliate is used to deny employment. Section 615(b)(2) The procedures for investigative consumer reports and employee misconduct investigations are set forth below.
B. Employment in the Trucking Industry
Special rules apply for truck drivers where the only interaction between the consumer and the potential employer is by mail, telephone, or computer. In this case, the consumer may provide consent
orally or electronically, and an adverse action may be made orally, in writing, or electr onically. The consumer may obtain a copy of any report relied upon by the trucking company by contacting the company.
IV. OBLIGATIONS WHEN INVESTIGATIVE CONSUMER REPORTS ARE USED Investigative consumer reports are a special type of consumer report in which information about a consumer’s character, general reputation, personal characteristics, and mode of living is obtained through personal interviews by an entity or person that is a consumer reporting agency. Consumers who are the subjects of such reports are given special rights under the FCRA. If a user intends to obtain an investigative consumer report, Section 606 requires the following:
• The user must disclose to the consumer that an investigative consumer report may be obtained.
This must be done in a written disclosure that is mailed, or otherwise delivered, to the consumer at some time before or not later than three days after the date on which the report was first requested. The disclosure must include a statement informing the consumer of his or her right to request additional disclosures of the nature and scope of the investigation as described below, and the summary of consumer rights required by Section 609 of the FCRA. (The summary of consumer rights will be provided by the CRA that conducts the investigation.) • The user must certify to the CRA that the disclosures set forth above have been made and that the user will make the disclosure described below.
• Upon the written request of a consumer made within a reasonable period of time after the disclosures required above, the user must make a complete disclosure of the nature and scope of the investigation. This must be made in a written statement that is mailed, or otherwise delivered, to the consumer no later than five days after the date on whi ch the request was received from the consumer or the report was first requested, whichever is later in time.
V. SPECIAL PROCEDURES FOR EMPLOYEE INVESTIGATIONS
Section 603(x) provides special procedures for investigations of suspected misconduct by an employee or for compliance with federal, state or local laws and regulations or the rules of a self-regulatory organization, and compliance with written policies of the employer. These investigations are not treated as consumer reports so long as the employer or its agent complies with the procedures set forth in Section 603(x), and a summary describing the nature and scope of the inquiry is made to the employee if an adverse action is taken based on the investigation.
VI. OBLIGATIONS OF USERS OF MEDICAL INFORMATION
Section 604(g) limits the use of medical information obtained from consumer reporting agencies (other than payment information that appears in a coded form that does not identify the medical provider).
If the information is to be used for an insurance transaction, the consumer must give consent to the user of the report or the information must be coded. If the report is to be used for employment purposes - or in connection with a credit transaction (except as provided in federal regulations) - the consumer must provide specific written consent and the medical information must be relevant. Any user who receives medical information shall not disclose the information to any other person (except where necessary to carry out the purpose for which the information was disclosed, or as permitted by statute, regulation, or order).
VII. OBLIGATIONS OF USERS OF ‘‘PRESCREENED’’ LISTS
The FCRA permits creditors and insurers to obtain limited consumer report information for use in connection with unsolicited offers of credit or insurance under certain circumstances. Sections 603(l), 604(c), 604(e), and 615(d). This practice is known as ‘‘prescreening’’ and typically involves obtaining from a CRA a list of consumers who meet certain pre- established criteria. If any person intends to use prescreened lists, that person must (1) before the offer is made, establish the criteria that will be relied upon to make the offer and to grant credit or insurance, and (2) maintain such criteria on file for a three- year period beginning on the date on which the offer is made to each consumer. In addition, any user must provide with each written solicitation a clear and conspicuous statement that:
• Information contained in a consumer’s CRA file was used in connection with the transaction.
• The consumer received the offer because he or she satisfied the criteria for credit worthiness or insurability used to screen for the offer.
• Credit or insurance may not be extended if, after the consumer responds, it is determined that the consumer does not meet the criteria used for screening or any applicable criteria bearing on credit worthiness or insurability, or the consumer does not furnish required collateral. • The consumer may prohibit the use of information in his or her file in connectio n with future prescreened offers of credit or insurance by contacting the notification system established by the CRA that provided the report. The statement must include the address and toll -free telephone number of the appropriate notification system.
In addition, the CFPB has established the format, type size, and manner of the disclosure required by Section 615(d), with which users must comply. The relevant regulation is 12 CFR 1022.54.
VIII. OBLIGATIONS OF RESELLERS
A. Disclosure and Certification Requirements
Section 607(e) requires any person who obtains a consumer report for resale to take the following steps:
• Disclose the identity of the end-user to the source CRA. • Identify to the source CRA each permissible purpose for which the report will be furnished to the end-user.
• Establish and follow reasonable procedures to ensure that reports are resold only for permissible purposes, including procedures to obtain:
(1) the identity of all end-users;
(2) certifications from all users of each purpose for which reports will be used; and (3) certifications that reports will not be used for any purpose other than the purpose(s) specified to the reseller. Resellers must make reasonable efforts to verify this information before selling the report.
B. Reinvestigations by Resellers
Under Section 611(f), if a consumer disputes the accuracy or completeness of information in a report prepared by a reseller, the reseller must determine whether this is a result of an action or omission on its part, and, if so, correct or delete the information. If not, the reseller must send the dispute to the source CRA for reinvestigation. When any CRA notifies the reseller of the results of an investigation, the reseller must immediately convey the information to the consumer.
C. Fraud Alerts and Resellers
Section 605A(f) requires resellers who receive fraud alerts or active duty alerts from another consumer reporting agency to include these in their reports.
IX. LIABILITY FOR VIOLATIONS OF THE FCRA
Failure to comply with the FCRA can result in state government or federal government enforcement actions, as well as private lawsuits. Sections 616, 617, and 621. In addition, any person who knowingly and willfully obtains a consumer report under false pretenses may face criminal prosecution. Section 619.
The CFPB’s website, www.consumerfinance.gov/learnmore, has more information about the FCRA, including publications for businesses and the full text of the FCRA.
Citations for FCRA sections in the U.S. Code, 15 U.S.C. § 1681 et seq.:
Section 602 15 U.S.C. 1681
Section 603 15 U.S.C. 1681a
Section 604 15 U.S.C. 1681b
Section 605 15 U.S.C. 1681c
Section 605A 15 U.S.C. 1681cA
Section 605B 15 U.S.C. 1681cB
Section 606 15 U.S.C. 1681d
Section 607 15 U.S.C. 1681e
Section 608 15 U.S.C. 1681f
Section 609 15 U.S.C. 1681g
Section 610 15 U.S.C. 1681h
Section 611 15 U.S.C. 1681i
Section 6l2 15 U.S.C. 1681j
Section 613 15 U.S.C. 1681k
Section 614 15 U.S.C. 1681l
Section 615 15 U.S.C. 1681m
Section 616 15 U.S.C. 1681n
Section 617 15 U.S.C. 1681o
Section 618 15 U.S.C. 1681p
Section 619 15 U.S.C. 1681q
Section 620 15 U.S.C. 1681r
Section 62l 15 U.S.C. 1681s
Section 622 15 U.S.C. 1681s-1
Section 623 15 U.S.C. 1681s-2
Section 624 15 U.S.C. 1681t
Section 625 15 U.S.C. 1681u
Section 626 15 U.S.C. 1681v
Section 627 15 U.S.C. 1681w
Section 628 15 U.S.C. 1681x
Section 629 15 U.S.C. 1681y
NOTICE TO USERS OF CONSUMER REPORTS UNDER
CALIFORNIA CONSUMER CREDIT REPORTING AGENCIES ACT
CIVIL CODE SECTION 1785.20-1785.22
The California Consumer Credit Reporting Agencies Act (Civil Code Sections 1785.1 – 1785.36) requires that this notice be provided to inform users of consumer reports of their responsibilities under Sections 1785.20-1785.22 of the California Civil Code.
Sections 1785.20-1785.22 impose the following duties upon users of consumer reports:
1785.20. (a) If any person takes any adverse action with respect to any consumer, and the adverse action is based, in whole or in part, on any information contained in a consumer credit report, that person shall do all of the following:
(1) Provide written notice of the adverse action to the consumer. (2) Provide the consumer with the name, address, and telephone number of the consumer credit reporting agency which furnished the report to the person.
(3) Provide a statement that the credit grantor's decision to take adverse action was based in whole or in part upon information contained in a consumer credit report. (4) Provide the consumer with a written notice of the following rights of the consumer:
(A) The right of the consumer to obtain within 60 days a free copy of the consumer's consumer credit report from the consumer credit reporting agency identified pursuant to paragraph (2) and from any other consumer credit reporting agency which compiles and maintains files on consumers on a nationwide basis. (B) The right of the consumer under Section 1785.16 to dispute the accuracy or completeness of any information in a consumer credit report furnished by the consumer credit reporting agency. (b) Whenever credit or insurance for personal, family, or household purposes involving a consumer is denied or the charge for such credit is increased either wholly or in part because of information obtained from a person other than a consumer credit reporting agency bearing upon consumer's credit worthiness or credit standing, the user of that informati on shall, within a reasonable period of time, and upon the consumer's written request for the reasons for that adverse action received within 60 days after learning of the adverse action, disclose the nature and substance of the information to the consumer. The user of the information shall clearly and accurately disclose to the consumer his or her right to make such a written request at the time the adverse action is communicated to the consumer. (c) No person shall be held liable for any violation of this section if he or she shows by a preponderance of the evidence that at the time of the alleged violation he or she maintained reasonable procedures to assure compliance with this section.
(d) Nothing in this chapter shall excuse compliance with the requirements of Section 1787.2. 1785.20.1. (a) Except as provided in subdivision (b), any person who uses a consumer credit report in connection with any credit transaction not initiated by the consumer and which consists of a firm offer of credit shall provide with any solicitation made to the consumer a clear and conspicuous statement as to all of the following:
(1) Information contained in the consumer's prequalifying report was used in connection with the transaction.
(2) The consumer received the offer of credit, because the consumer satisfied the criteria for creditworthiness under which the consumer was selected for the offer. (3) Where applicable, the credit may not be extended if, after the consumer responds to the offer, the consumer does not meet the criteria used to select the consumer for the offer. (4) The consumer has a right to prohibit use of information contained in the consumer's file with any consumer credit reporting agency in connection with any credit transaction that is not init iated by the
consumer. The consumer may exercise this right by notifying the notification system or joint notification system established under subdivision (d) or (e) of Section 1785.11. b) Subdivision (a) does not apply to any person using a prequalifying report if all of the following conditions are met:
(1) The person using the prequalifying report is affiliated by common ownership or common corporate control with the person who procured the report.
(2) The person who procures the prequalifying r eport from the consumer credit reporting agency clearly and conspicuously discloses to the consumer to whom the report relates, before the prequalifying report is provided to the person who uses the report, that the prequalifying report might be provided t o, and used by, persons affiliated in the manner specified in paragraph (1) with the person that procured the report. (3) The consumer consents in writing to this provision and use of the prequalifying report. (c) No person shall be denied credit on the basis of the consumer's refusal to provide consent pursuant to paragraph (3) of subdivision (b), unless that consent is necessary for the extension of credit, related to that transaction, by an affiliate.
1785.20.2. Any person who makes or arranges loans and who uses a consumer credit score as defined in Section 1785.15.1 in connection with an application initiated or sought by a consumer for a closed end loan or establishment of an open end loan for a consumer purpose that is secured by one to four units of residential real property shall provide the following to the consumer as soon as reasonably practicable:
(a) A copy of the information identified in subdivision (a) of Section 1785.15.1 that was obtained from a credit reporting agency or was developed and used by the user of the information. In addition to the information provided to it by a third party that provided the credit score or scores, a lender is only required to provide the notice contained in subdivision (d).
(b) If a person who is subject to this section uses an automated underwriting system to underwrite a loan, that person may satisfy the obligation to provide a credit score by disclosing a credit score and associated key factors supplied by a consumer credi t reporting agency. However, if a numerical credit score is generated by an automated underwriting system used by an enterprise, and that score is disclosed to the person, it shall be disclosed to the consumer consistent with subdivision (c). For purposes of this subdivision, the term "enterprise" shall have the meaning provided in paragraph (6) of Section 4502 of Title 12 of the United States Code.
(c) A person subject to the provisions of this section who uses a credit score other than a credit score provided by a consumer reporting agency may satisfy the obligation to provide a credit score by disclosing a credit score and associated key factors supplied by a consumer credit reporting agency. (d) A copy of the following notice, which shall include the name, address, and telephone number of each credit bureau providing a credit score that was used:
NOTICE TO THE HOME LOAN APPLICANT
In connection with your application for a home loan, the lender must disclose to you the score that a credit bureau distributed to users and the lender used in connection with your home loan, and the key factors affecting your credit scores.
The credit score is a computer generated summary calculated at the time of the request and based on information a credit bureau or lender has on file. The scores are based on data about your credit history and payment patterns. Credit scores are important because they are used to assist the lender in determining whether you will obtain a loan. They may also be used to determine what interest rate you may be offered on the mortgage. Credit scores can change over time, depending on your conduct, how your credit history and payment patterns change, and how credit scoring technologies change.
Because the score is based on informati on in your credit history, it is very important that you review the credit-related information that is being furnished to make sure it is accurate. Credit records may vary from one company to another.
If you have questions about your credit score or the credit information that is furnished to you, contact the credit bureau at the address and telephone number provided with this notice, or contact the lender, if the lender developed or generated the credit score. The credit bureau plays no part in the decision to take any action on the loan application and is unable to provide you with specific reasons for the decision on a loan application.
If you have questions concerning the terms of the loan, contact the lender. (e) This section shall not require any person to do the following:
(1) Explain the information provided pursuant to Section 1785.15.1. (2) Disclose any information other than a credit score or key factor, as defined in Section 1785.15.1. (3) Disclose any credit score or related information obtained by the user after a loan has closed. (4) Provide more than one disclosure per loan transaction. (5) Provide the disclosure required by this section when another person has made the disclosure to the consumer for that loan transaction.
(f) Any person's obligation pursuant to this section shall be limited solely to providing a copy of the information that was received from the consumer credit reporting agency. No person has liability under this section for the content of that informati on or for the omission of any information within the report provided by the consumer credit reporting agency.
(g) As used in this section, the term "person" does not include an "enterprise" as defined in paragraph (6) of Section 4502 of Title 12 of the United States Code.
1785.20.3. (a) Any person who uses a consumer credit report in connection with the approval of credit based on an application for an extension of credit, and who discovers that the consumer's first and last name, address, or social security number, on the credit application does not match, within a reasonable degree of certainty, the consumer's first and last name, address or addresses, or social security number listed, if any, on the consumer credit report, shall take reasonable steps to verify the accuracy of the consumer's first and last name, address, or social security number provided on the application to confirm that the extension of credit is not the result of identity theft, as defined in Section 1798.92. (b) Any person who uses a consumer credit report in connection with the approval of credit based on an application for an extension of credit, and who has received notification pursuant to subdivision (k) of Section 1785.16 that the applicant has been a victim of identity theft, as defined in Section 1798.92, may not lend money or extend credit without taking reasonable steps to verify the consumer's identity and confirm that the application for an extension of credit is not the result of identity theft. (c) Any consumer who s uffers damages as a result of a violation of this section by any person may bring an action in a court of appropriate jurisdiction against that person to recover actual damages, court costs, attorney's fees, and punitive damages of not more than thirty thousand dollars ($30,000) for each violation, as the court deems proper.
(d) As used in this section, "identity theft" has the meaning given in subdivision (b) of Section 1798.92. (e) For the purposes of this section, "extension of credit" does not include an increase in an existing open- end credit plan, as defined in Regulation Z of the Federal Reserve System (12 C.F.R. 226.2), or any change to or review of an existing credit account.
(f) If a consumer provides initial written notice to a creditor that he or she is a victim of identity theft, as defined in subdivision (d) of Section 1798.92, the creditor shall provide written notice to the consumer of his or her rights under subdivision (k) of Section 1785.16. (g) The provisions of subdivisions (k) and (l) of Section 1785.16 do not apply to a consumer credit reporting agency that acts only as a reseller of credit information by assembling and merging information contained in the database of another consumer credit reporting agency or the databases of multiple consumer credit reporting agencies, and does not maintain a permanent database of credit information from which new credit reports are produced.
(h) This section does not apply if one of the addresses at issue is a United States Army or Air Force post office address or a United States Fleet post office address. 1785.20.5. (a) Prior to requesting a consumer credit report for employment purposes, the user of the report shall provide written notice to the person involved. The notice shall inform the person that a report will be used and the source of the report, and shall contain a box that the person may check off to receive a copy of the credit report. If the consumer indicates that he or she wishes to receive a copy of the report, the user shall request that a copy be provided to the person when the user requests its copy from the credit reporting agency. The report to the user and to the subject person shall be provided contemporaneously and at no charge to the subject person.
(b) Whenever employment involving a consumer is denied either wholly or partly because of information contained in a consumer credit report from a consumer credit reporting agency, the user of the consumer credit report shall so advise the consumer against whom the adverse action has been taken and supply the name and address or addresses of the consumer credit reporting agency making the report. No person shall be held liable for any violation of this section if he or she shows by a preponderance of the evidence that, at the time of the alleged violation, he or she maintained reasonable procedures to assure compliance with this section.
1785.21. (a) A user in its discretion may notify the consumer that upon request the user may contact the consumer reporting agency and request that the consumer reporting agency investigate the current status of an item or items of information contained in the consumer report if the consumer disputes the completeness or accuracy of an item or items of information as provided to the user. (b) The consumer credit reporting agency may require identification from the user to ensure the validity of the request and, in that regard, may require that the request be put in writing with proper identification. (c) In the event that any such request is made and identification given in the form or manner demanded by the consumer credit reporting agency, such agency shall review the file of the consumer and report the current status of the disputed information to the user and the consumer by the most expeditious means possible.
(d) No user who furnishes information pursuant to this section shall be liable to any person for furnishing such information.
1785.22. (a) A person may not procure a consumer credit report for the purpose of reselling the report or any information therein unless the person discloses to the consumer credit reporting agency which issues the report the identity of the ultimate end user and each permissible purpose for which the report is furnished to the end user of the consumer credit report or information therein. (b) A person that procures a consumer credit report for the purpose of reselling the report or any information therein shall do all of the following:
(1) Establish and comply with reasonable procedures designed to ensure that the consumer credit report or information is resold by the person only for a purpose for which the report may be furnished under this title. These procedures shall include all of the following:
(A) Identification of each prospective user of the resold consumer credit report or information. (B) Certification of each purpose for which the consumer credit report or information will be used. (C) Certification that the consumer credit report or information will be used for no other purpose. (2) Before reselling the consumer credit report or information, the person shall make reasonable efforts to verify the identities and certifications made under paragraph (1).
All furnishers subject to the Federal Trade Commission's jurisdiction must comply with all applicable regulations, including regulations
promulgated after this notice was prescribed in 2004. Information about applicable regulations currently in effect can be found at the Commission's Web site, www.ftc.gov/credit.
Furnishers who are not subject to the Commission's jurisdiction should consult with their regulators to discern any relevant regulations.
NOTICE TO FURNISHERS OF INFORMATION: OBLIGATIONS OF FURNISHERS UNDER THE FCRA The federal Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681-1681y, imposes responsibilities on all persons who furnish information to consumer reporting agencies (CRAs). These responsibilities are found in Section 623 of the FCRA, 15 U.S.C. 1681s-2. State law may impose additional requirements on furnishers. All furnishers of information to CRAs should become familiar with the applicable laws and may want to consult with their counsel to ensure that they are in compliance. The text of the FCRA is set forth in full at the Web- site of the Federal Trade Commission (FTC): www.ftc.gov/credit. A list of the sections of the FCRA cross referenced to the U.S. Code is at the end of this document.
Section 623 imposes the following duties upon furnishers:
ACCURACY GUIDELINES
The banking and credit union regulators and the FTC will promulgate guidelines and regulations dealing with the accuracy of information provided to CRAs by furnishers. The regulations and guidelines issued by the FTC will be available at www.ftc.gov/credit when they are issued. Section 623(e).
GENERAL PROHIBITION ON REPORTING INACCURATE INFORMATION The FCRA prohibits information furnishers from providing information to a CRA that they know or have reasonable cause to believe is inaccurate. However, the furnisher is not subject to this general prohibition if it clearly and conspicuously specifies an address to which consumers may write to notify the furnisher that certain information is inaccurate. Sections 623(a)(1)(A) and (a)(1)(C).
DUTY TO CORRECT AND UPDATE INFORMATION
If at any time a person who regularly and in the ordinary course of business furnishes information to one or more CRAs determines that the information provided is not complete or accurate, the furnisher must promptly provide complete and accurate information to the CRA. In addition, the furnisher must notify all CRAs that received the information of any corrections, and must thereafter report only the complete and accurate information. Section 623(a)(2).
DUTIES AFTER NOTICE OF DISPUTE FROM CONSUMER
If a consumer notifies a furnisher, at an address specified for the furnisher for such notices, that specific information is inaccurate, and the information is, in fact, inaccurate, the furnisher must thereafter report the correct information to CRAs. Section 623(a)(1)(B).
If a consumer notifies a furnisher that the consumer disputes the completeness or accuracy of any information reported by the furnisher, the furnisher may not subsequently report that information to a CRA without providing notice of the dispute. Section 623(a) (3).
The federal banking and credit union regulators and the FTC will issue regulations that will identify when an information furnisher must investigate a dispute made directly to the furnisher by a consumer. Once these regulations are issued, furnishers must comply with them and complete an investigation within 30 days (or 45 days, if the consumer later provides relevant additional information) unless the dispute is frivolous or irrelevant or comes from a "credit repair organization." The FTC regulations will be available at www.ftc.gov/credit. Section 623(a)(8).
DUTIES AFTER NOTICE OF DISPUTE FROM CONSUMER REPORTING AGENCY If a CRA notifies a furnisher that a consumer disputes the completeness or accuracy of information provided by the furnisher, the furnisher has a duty to follow certain procedures. The furnisher must:
1. Conduct an investigation and review all relevant information provided by the CRA, including information given to the CRA by the consumer. Sections 623(b)(1)(A) and (b)(1)(B).
2. Report the results to the CRA that referred the dispute, and, if the investigation establishes that the information was, in fact, incomplete or inaccurate, report the results to all CRAs to which the furnisher provided the information that compile and maintain files on a nationwide basis. Section 623(b)(1)(C) and (b)(1)(D)3. Complete the above steps within 30 days from the date the CRA receives the dispute (or 45 days, if the consumer later provides relevant additional information to the CRA). Section 623(b)(2).
3. Complete the above steps within 30 days from the date the CRA receives the dispute (or 45 days, if the consumer later provides relevant additional information to the CRA). Section 623(b)(2).
4. Promptly modify or delete the information, or block its reporting. Section 623(b)(1)(E).
DUTY TO REPORT VOLUNTARY CLOSING OF CREDIT ACCOUNTS
If a consumer voluntarily closes a credit account, any person who regularly and in the ordinary course of business furnishes information to one or more CRAs must report this fact when it provides information to CRAs for the time period in which the account was closed. Section 623(a)(4).
DUTY TO REPORT DATES OF DELINQUENCIES
If a furnisher reports information concerning a delinquent account placed for collection, charged to profit or loss, or subject to any similar action, the furnisher must, within 90 days after reporting the information, provide the CRA with the month and the year of the commencement of the delinquency that immediately preceded the action, so that the agency will know how long to keep the information in the consumer's file.
Section 623(a)(5).
Any person, such as a debt collector, that has acquired or is responsible for collecting delinquent accounts and that reports information to CRAs may comply with the requirements of Section 623(a)(5) (until there is a consumer dispute) by reporting the same delinquency date previously reported by the creditor. If the creditor did not report this date, they may comply with the FCRA by establishing reasonable procedures to obtain and report delinquency dates, or, if a delinquency date cannot be reasonably obtained, by following reasonable procedures to ensure that the date reported precedes the date when the account was placed for collection, charged to profit or loss, or subjected to any similar action. Section 623(a)(5).
DUTIES OF FINANCIAL INSTITUTIONS WHEN REPORTING NEGATIVE INFORMATION Financial institutions that furnish information to "nationwide" consumer reporting agencies, as defined in Section 603(p), must notify consumers in writing if they may furnish or have furnished negative information to a CRA. Section 623(a)(7). The Federal Reserve Board has prescribed model disclosures, 12 CFR Part 222, App. B.
DUTIES WHEN FURNISHING MEDICAL INFORMATION
A furnisher whose primary business is providing medical services, products, or devices (and such furnisher's agents or assignees) is a medical information furnisher for the purposes of the FCRA and must notify all CRAs to which it reports of this fact. Section 623(a)(9). This notice will enable CRAs to comply with their duties under Section 604(g) when reporting medical information.
DUTIES WHEN ID THEFT OCCURS
All furnishers must have in place reasonable procedures to respond to notifications from CRAs that information furnished is the result of identity theft, and to prevent refurnishing the information in the future.
A furnisher may not furnish information that a consumer has identified as resulting from identity theft unless the furnisher subsequently knows or is informed by the consumer that the information is correct. Section 623(a)(6). If a furnisher learns that it has furnished inaccurate information due to identity theft, it must notify each consumer reporting agency of the correct information and must thereafter report only complete and accurate in- formation. Section 623(a)(2). When any furnisher of information is notified pursuant to the procedures set forth in Section 605B that a debt has resulted from identity theft, the furnisher may not sell, transfer, or place for collection the debt except in certain limited circumstances. Section 615(f).
The FTC's Web site, www.ftc.gov/credit, has more information about the FCRA, including publications for businesses and the full text of the FCRA.
Good people.
Great experience.
Payments power.
Financial Proposal for a
CAL-Card Program
PRESENTED TO
City of Roseville
Nick Rosas
Accounting Manager
SUBMITTED BY
Leslie Massey
Vice President
August 25, 2022
RFP # 10-026
Financial proposal
U.S. Bank proposes that City of Roseville (the City) participate in the NASPO ValuePoint program, a competitively bid and awarded consortium program for commercial card services available to political subdivisions in the State of California. This program has an established footing among many States and their political subdivisions and allows for participation by those entities that assume all responsibility and liability for their performance under the terms and conditions of the program. Each entity must be credit - qualified on its own and must sign a document developed by U.S. Bank for participation. The NASPO ValuePoint program offers the following incentives based on the projections provided by the City . If these projections are inaccurate, we reserve the right to revisit this offer.
We offer the City the CAL-Card program, which is a U.S. Bank Purchasing Card and Virtual Pay program offered in California through the NASPO ValuePoint public-funded agencies. The combined spend volume of the entire NASPO consortium
results in significant financial benefits for all members.
The program allows the City to take advantage of a contract that has already been negotiated, saving valuable time for efficient implementation and training. The CAL-Card program offers a simplified quarterly rebate program and superior customer service. the City will also have a reliable financial partner in U.S. Bank—stable and strong in any economic environment.
Aspects of the program include:
Billing options
We offer central or decentralized billing options. You may elect for each department to receive a managing account statement with charges for its department charges, or a central account with combined billing of all charges for all accounts across the City. We allow our commercial card clients to choose between monthly or biweekly billing cycles and provide multiple statement delivery options to integrate with your data management needs.
Billing cycles
We offer 19 cycle dates, from the 6th through the 25th day of each month (exclusive of the 19th of each month). If the billing cycle date chosen falls on a Saturday, Sunday or holiday, the data is cycled at the end of the next business day.
Payment terms
Payment is due within 45 days of the statement date.
We offer a full spectrum of automated remittance options to take the burden out of the payment process.
We recommend electronic payment (central pay system) and payment-in-full policies, offering you the greatest efficiency and simplicity. The type of payment may be split within the City .
City of Roseville
Additional incentive and pricing provisions
The following provisions apply separately to each program in which organizations participate:
Incentives are paid less credit losses, such as write offs. Fraud losses are absorbed by U.S. Bank. Incentives are to be paid quarterly.
Please refer to the Local Agency Subscription Agreement attached to this proposal for additional information regarding the participation of the City in the State of California, Department of General Services Participation Addendum.
Components for calculation
Our pricing proposal uses two components to calculate incentives:
Quarterly Sales Volume Incentive—A volume incentive based on the City’s quarterly spend. Quarterly Speed of Payment Incentive—A client held day1 incentive based on the City’s payment performance.
Volume incentive
The volume incentive is determined by the table below.
1 Client held days are the number of days from the day U.S. Bank funds a charge transaction to the day payment for that transaction is posted, inclusive of the beginning and ending days, minus 15.
City of Roseville
Prompt payment incentive
The prompt payment incentive is determined by the table below.
City of Roseville
Discount interchange programs
Current discount interchange includes large ticket transactions, merchant-specific negotiated rates with the card branded associations, transactions made in a foreign jurisdiction and merchant discounts for providing Level III data. We offer the City the following incentive on your discount interchange transactions:
City of Roseville
Proposed fees
Below are our proposed fees for the City’s program:
Purchasing Card and Virtual Pay
Feature Fee
Annual Card Fee No Fee
Non-Sufficient Funds Fee $15.00 per occurrence
Cash Advance 2% ($2.00 minimum)
Logo Embossing Fee; a two-week delay may occur with card issuance and implementation
No Fee
Delinquency Fee:
Not Paid by Due Date on entire past due amount
Not Paid by each subsequent Billing Cycle on the entire past due amount Minimum Late Fee
1%
2.5%
$2.00
Travel Accident Insurance Fee. Common Carrier Travel Accident Insurance for Corporate Travel and/or One Cards is provided at no charge with a benefit amount of two hundred fifty thousand U.S. Dollars ($250,000.00). Entity and/or Participant must notify U.S. Bank of the use of Central Billing Accounts for booking of travel to ensure appropriate insurance coverage is in place.
No Fee
Foreign Transaction Fee, all Products. Fee applies to transactions taking place outside the United States not in U.S. dollars. U.S. Bank reserves the right to raise fee with sixty (60) days prior written notice to Entity.
1%
City of Roseville
Confidentiality; Disclosures
U.S. Bank appreciates the opportunity to review the Request for Proposal (RFP) for City of Roseville’s purchasing card and Virtual Pay program. We have attached a copy of the NASPO ValuePoint Agreement for your review and consideration. Please note that the agreement offers the following benefits:
It is specifically tailored for the financial services and solutions offered in this proposal. It contains terms and conditions designed to promote compliance with federal and state laws and regulations such as the USA PATRIOT Act, FCRA, BSA/AML, etc.
It provides U.S. Bank with the ability to offer more favorable economic incentives due to efficiencies gained in the contracting process and the administration of the program.
If the RFP results in a contract award to U.S. Bank, we propose that the NASPO ValuePoint Agreement govern this relationship.
Accordingly, please note that we do not agree to be bound by any of the terms and conditions contained in the RFP unless and until such terms are incorporated into a final written agreement between the parties. This proposal represents the basis for a proposed business relationship and is not a contract for services. The incentive and fees provided in this proposal are predicated on the State of California’s ongoing participation in the NASPO ValuePoint Agreement led by the State of Washington. Please note that the current NASPO ValuePoint Agreement is effective January 1, 2021 through December 31, 2025. All pricing elements, including incentives, are subject to final credit approval by U.S. Bank, and are subject to change if credit is conditional upon collateral pledge, pre-payment or guarantor.
The documents provided in this proposal contain proprietary and confidential information of U.S. Bancorp and its affiliates and shall not be duplicated, used, or disclosed, in whole or in part, for any purpose other than to evaluate this proposal.
U.S. Bancorp, its affiliates and subsidiaries retain ownership of the information contained in these documents. Any disclosure, publication or dissemination of the information by the recipient is prohibited without the prior written cons ent of U.S. Bank. If this proposal is subject to disclosure under a Freedom of Information Act, Sunshine Act or other applicable law, we request that these documents be afforded protection from disclosure to the maximum extent permissible under law as proprietary and confidential information.
Finally, please note that U.S. Bank National Association offers commercial card payment products in its own name and on behalf of its correspondent bank partners under the assumed name of Elan Financial Services (Elan). Please be advised that Elan, at the request of one or more of its partner banks, may submit separate responses to the RFP. /0/1/2/3/4/5/6/2/7/4/8/9/i255
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RESERVED
Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
Exhibit A: Scope of Work
The Department of General Services (DGS), Procurement Division (PD), hereinafter referred to as the “State” or “DGS-PD” is establishing master agreements with multiple providers of Electronic Payment Acceptance Services for State Agencies and Local Users (defined as any city and/or county, district, or other local governmental body or corporation, including the California State Universities (CSU) and University of California (UC) systems, K-12 schools and community colleges empowered to expend public funds), hereinafter collectively referred to as “Authorized Users”. Authorized Users may contract with any master agreement provider.
1. SCOPE
a. The State and Elavon, Inc. (hereinafter referred to as the “Contractor”), hereby agree that the Contractor will provide Electronic Payment Acceptance Services to Authorized Users in accordance with the terms and conditions of this Master Service Agreement (“MSA” or “Agreement”).
b. Prior to rendering services, Authorized Users and Contractor must execute a separate Subsidiary Agreement that incorporates all of the terms of this MSA by reference and may contain additional specific terms and conditions, none of which may alter, rescind, or be in conflict with the terms and conditions of this MSA (per Exhibit A, Section 14). c. Contractor agrees to honor all Subsidiary Agreements made prior to MSA expiration or termination at the same rates, terms and conditions.
d. All Subsidiary Agreements issued against this MSA must be fulfilled/completed in their entirety within twelve (12) months following the MSA end date. e. The State, during the term of this MSA, may negotiate additional agreements, categories and/or services.
2. AGREEMENT TERM
The term of this MSA is for a five (5) year period. DGS reserves the right to extend this Agreement for two additional two (2) year periods, with a maximum cumulative term of nine (9) years. The start and end date will be noted on the attached Std. 213 Standard Agreement (the “Effective” term).
3. CONTRACT ADMINISTRATORS
The State and MSA Contractor have assigned Contract Administrators as single points of contact for all inquiries, contract related issues and for problem resolution. The Contract Administrators and their contact information will be listed in the subsequent MSA User Instructions issued after award. Should a Contract Administrator change, each party will notify the other in writing no later than ten (10) business days after the date of such change, without amendment to this agreement.
a. Contractor must provide the name, address, telephone number, and e-mail address of the individual directly responsible for managing this Agreement on behalf of the Contractor to the State’s designated Contract Administrator. b. Contractor must provide the State with at least one (1) replacement candidate that will meet or exceed the experience and skill level of the Contract Administrator being replaced.
Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
i) The State shall not compensate the Contractor for any time or effort required to prepare the new Contract Administrator for work on the project. ii) The State may request that Contractor replace an assigned Contract Administrator at any time. The Contractor will use its best efforts to provide a replacement candidate that meets or exceeds the experience and skill level of the Contract Administrator being replaced within a time frame mutually agreed upon by the Contractor and the State.
4. GENERAL OVERVIEW OF SERVICES
Contractor shall provide electronic payment acceptance and processing services in the following categories:
a. Credit and Debit Card Processing (Category 1)
5. MINIMUM SERVICE LEVEL AGREEMENTS
Contractor shall provide electronic payment acceptance and processing services as follows:
a. General Service Level Agreements (All Categories)
Contractor will:
i) Allow for batch processing of transactions. Initiate funding for Credit, Debit, and PIN-Based Card transactions as follows:
Transaction Day Initiate Funding to Authorized User’s
Account Via ACH1/
Monday Tuesday
Tuesday Wednesday
Wednesday Thursday
Thursday Friday
Friday Monday
Saturday Monday
Sunday Monday
1/ Includes Contractor’s authorization to send funds from Contractor’s bank to Authorized User’s bank account.
ii) Contractor shall settle in gross daily and process chargebacks and adjustments by invoicing the Authorized User.
iii) Provide to each Authorized User access to detailed statements and online reporting tools that provide sufficient information for each Authorized User to reconcile deposits and adjustments made to the Authorized User’s designated bank account(s).
iv) Provide customer support twenty-four (24) hours per day, three hundred sixty-five (365) days per year.
v) Maintain industry standard data privacy controls sufficient to meet the requirements of the applicable security standards and California State Privacy statutes and Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
regulations (defined in Exhibit A, Section 17). Contractor is fully responsible for all administrative and financial obligations that arise from any security breach caused by the Contractor.
vi) Provide Gateway services or equivalent.
vii) Annually, make Contractor’s SSAE 18 SOC1 Type II information available for review on Contractor’s premises upon Authorized User’s thirty (30) days written notice. Authorized User’s review shall take place during Contractor’s normal business hours upon the signing of Contractor’s confidentiality agreement.
Authorized User’s review does not include copying of such documents. viii)Upon request by the Authorized User, assign to Authorized User one or more identification numbers or passwords for Authorized User’s use in obtaining the Card Services. Once such identification number(s) or password(s) have been delivered to Authorized Agency by Contractor, the use and confidentiality of such numbers and/or passwords shall be the sole responsibility of Authorized User. b. Credit and Debit Card Processing (Service Category 1) Contractor will:
i) Process for the Authorized User: MasterCard, Visa, American Express, Discover, Debit Cards, and Purchasing Cards in accordance with the operating rules of each of the named associations and under applicable law. Including but not limited to:
1. Bank Cards – VISA/MasterCard/AMEX/Discover – Cardholder Present
2. Bank Cards – VISA/MasterCard/AMEX/Discover – Cardholder Not Present
3. Signature Debit Cards – VISA/MasterCard – Cardholder Present
4. Signature Debit Cards – VISA/MasterCard – Cardholder Not Present
5. PIN Based Debit Cards
6. Digital Wallets
ii) Provide Convenience/Service Fee services.
iii) Provide continuous service by maintaining Contractor’s system functionality at a minimum 99.9% of the time (excluding maintenance downtime), measured on a monthly basis. Contractor must provide advanced written notice for scheduled maintenance and maintenance should occur during Authorized User’s non- business hours.
1. Service shall be available twenty-four (24) hours per day, three hundred sixty- five (365) days per year (excluding maintenance downtime).
2. If service’s monthly availability averages less than 99.9% (excluding maintenance downtime), the Authorized User shall be entitled to recover damages, apply credits or use other contractual remedies as set forth in the Subsidiary Agreement. (Exhibit A, Section 24)
3. Contractor shall provide advance written notice to the State Contract Administrator and Authorized Users of any major upgrades or changes that will affect the service availability.
iv) Provide Authorization and Settlement functions on behalf of Authorized User.
Authorizations must be completed in real time with response times of no more than 2-12 seconds. Response time is measured from the time Contractor receives a transaction authorization request to the time Contractor provides a transaction Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
authorization response to Authorized User, excluding time dependent upon third parties and delays caused by failures or delays in third party’s systems. v) Deliver, at a minimum, the following standard reports:
1. Deposit Summary
2. Transaction Reports
3. Convenience/services fees, if applicable
4. Statements
5. Interchange
6. Adjustments
7. Chargebacks
8. Authorizations
9. Duplicate Transmissions
Frequency of reporting and additional reports to be determined within the Authorized User Subsidiary Agreements.
vi) Process Chargebacks, upon receipt, on behalf of Authorized User. If additional information is required from the Authorized User to process the chargeback, Contractor must notify the Authorized User within twenty-four (24) to forty-eight (48) hours of receipt. The Contractor is authorized to protest any chargeback on behalf of the Authorized User. Chargebacks and adjustments will be invoiced to the Authorized Users.
vii) Process voids, cancels, returns, reversals and retrievals. viii)Control for duplicate transactions.
ix) Remain Payment Card Industry (PCI) compliant and P2PE certified throughout the term of the Agreement.
6. DEMONSTRATIONS
Contractor agrees to conduct demonstrations at the request of the State and/or an Authorized User, prior to implementation of an electronic payment acceptance program during the term of the Agreement.
7. TRAINING
Contractor shall provide telephone and/or web-based training for each Authorized User as stated in the Subsidiary Agreement. Implementation training must be completed within 30 calendar days after system set-up. Training will be provided at no additional cost including any travel related expenses.
Training material and equipment shall be provided by the Contractor at the Contractor's expense. Contractor shall ensure that sufficient material is provided to all attendees.
Contractor shall provide a link to the most recent version of the Contractor's Operating Guide. The Operating Guide and Contractor’s website includes, at a minimum, but not limited to the following:
• Step by Step Instructions
• Support Services
• Quick Reference Guide
• FAQ’s and answers
Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
Contractor must provide twenty-four (24) hours per day, three hundred sixty-five (365) days per year, web-based access to Contractor’s Operating Guide.
Trainer provided by contractor shall be knowledgeable in the subject matter, equipment and training materials. Contractor will customize training sessions for an Authorized User upon request.
8. CUSTOMER SERVICE AND SUPPORT
Contractor must provide knowledgeable customer service personnel for the services provided. Contractor shall provide the contact information for problem resolution and inquiries in the Subsidiary Agreement with each Authorized User. Most inquiries regarding the direct reconciliation of an Authorized User’s payment transactions, the transfer to the bank account or any other payment transactions involving the Contractor shall be addressed and/or resolved by the Contractor within three (3) business days from the date of the original inquiry. Most other problems and inquiries will be addressed within five (5) business days from the date of the original contact. If Contractor is unable to resolve issues within the timelines stated above, Contractor will work with the Authorized User to establish mutual resolution timeframes and project timelines. Contractor’s customer service representatives shall accurately and timely:
• Research and resolve concerns and provide immediate follow-up status/resolution. • Resolve problems related to daily settlements and deposit variances. • Coordinate and resolve complex reporting issues.
• Answer incoming telephone calls, e-mails, faxes, and letters. • Log all problems/resolutions so that recurring problems can be tracked, reported and corrected.
Contractors must provide, at the Authorized Users request, copies of any data file transmission that occurred within the required records retention period specified in this Agreement (See Exhibit A, Section 9) and have that data file available to them within forty-eight (48) hours after original request. Any data file requests that cannot be fulfilled in that time frame will require Contractor and Authorized User to agree upon a reasonable time frame for such requests.
Contractor shall provide a technical liaison (live operator) available twenty-four (24) hours a day, three hundred sixty-five (365) days a year for immediate response to data/technical needs such as, but not limited to, general inquiries, point-of-sale and other payment channel assistance. Upon request, Contractor shall provide a written/electronic status report including a problem statement, proposed solution, and estimated time of problem resolution. Contractor’s staff must be fully versed in electronic payment systems and fully capable of resolving any issues immediately.
9. RETENTION OF RECORDS
Contractor must retain all transactional data for a period of at least eighteen (18) consecutive months from the initial transaction date. Transactional data/records must be made available, upon request, to Authorized Users within forty-eight (48) hours after original request. Any data file requests that cannot be fulfilled in that time frame will require Contractor and Authorized User to agree upon a reasonable time frame for such requests.
Authorized User should retain legible copies of Sales Drafts and Credit Vouchers for a period of at least eighteen (18) months from the initial transaction date to be able to Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
respond to customer disputes. Authorized User must submit to Servicers a legible copy of a Sales Draft or Credit Voucher within ten (10) days of a request by Servicers, or longer period of time as may be allowed by the Association.
10. PROGRAM WEBSITE
Contractor shall provide and regularly update a secure website for use by Authorized Users of this Agreement. The website will include at a minimum, the following information:
• Link to the Contractor’s Merchant Operating Guide.
• Links to industry related rules and regulations as described in this Agreement. • Customer Service and Support telephone number.
• FAQs
• Link to report database (Exhibit A, Section 5 (a)(iii))
11. REPORTING REQUIREMENTS
a. Each quarter, the Contractor shall submit a Quarterly Usage/Activity Report to the DGS Contract Administrator via email or other delivery method specified by the State.
The report shall summarize the Contractor’s MSA contract activity for each Authorized User, and it shall be provided to the DGS Contract Administrator by the thirtieth (30th) working day following the ending of the quarter’s reporting period. A report is required every quarter, even if the Contractor has no activity during the reporting period. b. DGS will provide a quarterly reporting template to awardees upon award. c. Contractor must report State Authorized Users and Local Authorized Users on separate quarterly reports.
d. The Quarterly Usage/Activity Report will summarize the Contractor’s MSA contract activity by payment category for each Authorized User and will contain the following information:
• Authorized User Name (department, agency, etc.)
• Authorized User’s Merchant Number
• Dollar Volume by card type (Amex, Discover, Visa, MC, Debit) and/or payment solution
• Number of settled transactions by card type and/or payment solution • Fees paid by payment solution and type (interchange, processor, convenience fees, other)
• Convenience/Service Fees as applicable
• Equipment and software sales reports, upon request
• Any other reporting as requested by DGS
e. Contractor shall email reports (in Microsoft Excel format or compatible) to the State Contract Administrator (referenced in User Instructions) and [email protected] .
f. The DGS Contract Administrator reserves the right to modify this report and require the Contractor to provide additional information available to the Contractor during the course of this Agreement at no additional cost.
12. AUTHORIZED USERS
a. Pursuant to Government Code §1
1 0 0 0, State of California government agencies
include every state office, officer, department, division, bureau, board, and commission.
Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
b. For the purposes of this Agreement, local government agencies include any city and/or county, district, or other local governmental body or corporation, including the California State Universities (CSU) and University of California (UC) systems, K-12 schools and community colleges empowered to expend public funds. c. State agencies are required to adhere to DGS contract and procurement policy and procedures. For informational purposes only, see the following link for the State of California Agency List (exclude any local government agencies described above):
https://www.ca.gov/agenciesall
d. Local government agency use of this MSA is optional. Local government agencies may execute a contract under this MSA using the standard form Std. 213 or appropriate equivalent contract form, and any specific documents established prior to award that affect the Subsidiary Agreement. Upon execution of the contract form they shall become Authorized Users and the provision of services by the Contractor to such Authorized Users will be governed by the terms of this MSA. e. However, the Contractor has authorization to negotiate with local government agency Authorized Users for the provisions cited below. These include but are not limited to:
• Invoicing and Payment Provisions (including debiting for chargebacks, assessments and other items)
• Governing Law, Jurisdiction
• Local Authorized User’s additional specific terms and conditions • Convenience/Service Fees
13. AUTHORIZATION TO RENDER SERVICES
Unless otherwise provided in this Agreement, Contractor may not decline a State of California government agency’s request to utilize services offered under this Agreement.
14. SUBSIDIARY AGREEMENTS
Contractor and a State of California government agency or a local government agency (as applicable) must execute a separate Subsidiary Agreement that incorporates all of the terms of this MSA by reference and may contain additional agency specific terms and conditions, none of which may alter, rescind, or be in conflict with the terms and conditions of this MSA.
The Subsidiary Agreement shall consist of a Std. 213 form, or the appropriate equivalent contract form for local government agency Authorized Users and shall describe the particular requirements of the Authorized User, usually reflected in a detailed scope of work. State Agency Authorized User’s Subsidiary Agreements shall be processed in accordance with State contracting laws, policy, and procedures.
15. ENTIRE AGREEMENT & AMENDMENTS
This MSA Agreement includes the Std. 213 form, Exhibits A-I and any additional provisions or Exhibits or attachments specific to the Contractor and/or services; documents incorporated by reference, and mutually approved amendments.
16. ORDER OF PRECEDENCE
The following order of precedence shall apply:
Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
a. All federal, state, local laws and regulations
b. Exhibit C: Terms and Conditions (As Modified)
c. Exhibit C.1: General Provisions – Information Technology (As Modified) d. Exhibit G: Definitions
e. Exhibit A: Scope of Work
f. Exhibit A.1: Selected Services
g. Exhibit B: Budget Detail and Payment Provisions
h. Exhibit D: Insurance Requirements
i. Exhibit E: Fees and Costs
j. Exhibit F: Equipment and Software
k. Exhibit E.1: Service Pricing
l. Exhibit E.2: Equipment and Software Pricing
m. Exhibit E.3: Equipment Specifications
n. Exhibit H: Special Terms and Conditions
o. Exhibit I: Mass Transit Terms
p. Exhibit H.1: Authorized User Set Up Form
q. Payment Network Regulations
17. SECURITY, PRIVACY AND DISCLOSURE
The parties acknowledge that this Agreement is subject to the California Public Records Act (Govt. Code section 6 2 5 0 et seq.), California Government Code sections 6 1 6 4 and 1 1 0 1 9.9; and California Civil Code section 1 7 9 8 et seq.
Authorized Users agree not to disclose Cardholder account numbers and/or Card Identification Numbers (“CIDs”) unless required by law or other legal process, or for internal State purposes, or as required to use the services under the Agreement.
Contractor agrees it will not use the names, addresses, and any other personally identifying information of State, city, county, school, or other public employees for any purpose not directly related to this Agreement.
18. REGULATORY AUTHORITIES (Industry Related Rules and Regulations) Contractor warrants and certifies that prior to, and in the performance of this Agreement, it will acquire, maintain, and remain in compliance with all mandatory regulatory approvals with respect to its performance under this Agreement required by any applicable governmental agency having jurisdiction over Contractor. If such regulatory approvals are not obtained by Contractor prior to the performance of this Agreement, this Agreement shall be of no force or effect.
19. LICENSES AND PERMITS
Contractor shall be responsible for obtaining and maintaining at its expense all applicable licenses, registrations, permits, and certifications applicable to its performance under this Agreement during the entire term of this Agreement required by federal law, the State of California, and local jurisdictions in California.
20. SUBCONTRACTORS
Nothing contained in this Agreement or otherwise, shall create any contractual relation between the State and any subcontractors, and no subcontractor shall relieve the Contractor of its responsibilities and obligations hereunder. The Contractor agrees to be Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
fully responsible to the State for the acts and omissions of its subcontractors and of persons either directly or indirectly employed by any of the subcontractors as it is for the acts and omissions of persons directly employed by the Contractor. The Contractor’s obligation to pay its subcontractors is an independent obligation from the Authorized User’s obligation to make payments to the Contractor. As a result, the Authorized User shall have no obligation to pay or to enforce the payment of any moneys to any subcontractor.
21. PHASE IN & PHASE OUT TRANSITION SERVICES
Prior to the end of this Agreement’s contract term, or if this Agreement is terminated by the State, Contractor agrees to assist in transitioning the services provided under this Agreement within a period of time, not to exceed one hundred eighty (180) day calendar period. Transition assistance will include but is not limited to: continue transaction processing until date agreed upon, resolve any outstanding chargeback disputes, remit final statement and invoice for all transactions through close of business on the final processing date. Contractor shall cooperate with any new contractor(s) and State staff in effectuating an orderly transition.
22. DISPUTE RESOLUTION
Contractor shall direct questions regarding the Subsidiary Agreement to the Authorized User. Decisions rendered by the Chief Executive Officer, or designated representative, of the Authorized User are considered final. Upon request, DGS-PD may provide a forum for discussion, at which time a DGS-PD representative shall be available to provide information regarding the State of California’s policies and procedures. If agreement cannot be reached, either party may assert its rights and remedies within a court of competent jurisdiction.
23. NOTICES
All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed given if delivered (a) personally, (b) via facsimile, electronic mail or overnight express service (except that notices of termination or default given by facsimile or electronic mail must also be sent via overnight express service or certified mail) or (c) by certified or registered mail, postage prepaid, return receipt requested, in each case, to the addresses, facsimile numbers and/or electronic mail addresses set forth below. The parties hereto may change their street addresses, facsimile numbers and electronic mail addresses for purposes of this Agreement by notifying the other party in the manner specified in this section.
24. LIQUIDATED DAMAGES
The Authorized User’s Director or his/her designee may assess compensating damages against the vendor for losses incurred by the Authorized User as a direct result of errors caused by the negligence or willful misconduct of the vendor or subcontractor(s) that cause or contribute to the delay in collecting revenue. If invoked, damages will be assessed based upon the dollar value of the loss, the elapsed time before correction of the error and the Pooled Money Investment Account (PMIA) Daily Rate for the date the loss occurred as published by the California State Treasurer’s Office. Contractor’s liability for damages shall not exceed an amount equal to the annual fees paid or payable to Contractor under the affected Subsidiary Agreement (excluding interchange fees). If Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
twelve (12) consecutive months of fees are not available for this calculation, Contractor will use the highest available months fees multiplied by twelve (12) to identify the anticipated annual fees. For purposes of this Agreement, ‘errors’ do not include any action taken, or any failure to act, pursuant to an instruction from the State or an Authorized User.
25. PROPRIETARY RIGHTS AND PERMITTED USES
a. Contractor may not issue any press release about this Agreement or the State without the other party’s prior written consent.
b. Contractor will provide all Credit Card Association marks, logos, stickers and marketing materials, as well as any other forms of display required by the Associations’.
c. An Authorized User may use and display the Associations’ marks, and shall display such Marks in accordance with the standards for use established by the Associations.
The Authorized User’s right to use all such Marks will terminate upon termination of the Agreement or upon notice by an Association to discontinue such use, and the Authorized User must thereafter promptly return any materials displaying the Marks.
The Authorized User’s use of promotional materials provided by the Associations will not indicate, directly or indirectly, that such Associations endorse any goods or services other than their own and the Authorized User may not refer to any Associations in stating eligibility for its products or services.
26. FEDERAL DEBARMENT
The Federal Department of Labor requires that State agencies which are expending Federal funds of $25,000 or more, have in the contract file, a certification by the Contractor that it has not been debarred or suspended from doing business with the Federal Government. Each Contractor must provide this documentation upon request.
27. FORCE MAJEURE
Except for defaults of subcontractors at any tier, the Contractor shall not be liable for any excess costs if the failure to perform the Contract arises from causes beyond the control and without the fault or negligence of the Contractor. Examples of such causes include, but are not limited to:
a. Acts of God or of the public enemy, and
b. Acts of the federal or state government in either its sovereign or contractual capacity.
If the failure to perform is caused by the default of a subcontractor at any tier, and if the cause of the default is beyond the control of both the Contractor and subcontractor, and without the fault or negligence of either, the Contractor shall not be liable for any excess costs for failure to perform.
28. RIGHT TO TERMINATE
a. The State may terminate the Agreement and any Authorized User may terminate its respective Subsidiary Agreement for cause upon a reasonable and good faith determination that the Contractor failed to perform the requirements of this Agreement at the time and in the manner herein provided in Section (b) below. However, Authorized Users will provide a Cure Period, rather than immediate termination, if a breach involves meeting a service level agreement identified in Exhibit A, Section 5. Nonetheless, the Department of General Services
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State and Authorized Users reserve the right to terminate for cause without providing additional Cure Periods if a service level issue for which a Cure Period has previously been provided recurs.
b. In the event of a breach, the State or Authorized User will send the Contractor a notice specifying the breach and providing the Contractor an opportunity to cure the breach within a period of time no less than thirty (30) days “Cure Period”. If the breach is not cured within the Cure Period, the State or Authorized User has the right to terminate the Agreement upon thirty (30) days notice to the Contractor. c. The State may terminate the Agreement without cause upon sixty (60) days advance written notice to the Contractor. Authorized Users may terminate their respective Subsidiary Agreements without cause upon sixty (60) days advance written notice to the Contractor. In the event of a termination without cause, Contractor shall not be responsible for any costs to the State or an Authorized User associated with such termination and any sum due the Contractor under this Agreement (which sum due to the Contractor shall include, but not be limited to, fees as set forth in this Agreement) for Charges up to the date of a termination shall be paid to the Contractor including any Chargebacks, fees, fines or penalties owed by the State or Authorized User after termination, which shall be paid within forty-five (45) days of presentment of a non- disputed invoice, in accordance with Exhibit B, Section 3. d. After receipt of a notice of termination by the State, or an Authorized User, and except as otherwise directed by the State or Authorized User, Contractor shall:
i. Stop work as specified in the notice of termination. ii. Place no further subcontracts for materials, services, or facilities, except as necessary to complete the continuing portion of the Agreement. iii. Terminate all subcontracts to the extent they relate to the work terminated.
After receipt of a notice of termination and prior to the contract termination effective date, Contractor agrees to diligently proceed without interruption in the performance of this Agreement. Contractor’s failure to diligently proceed in accordance with this Agreement shall be considered a material breach of this Agreement.
29. NEWS RELEASES
Unless otherwise exempted, news releases, endorsements, advertising, and social media content pertaining to this Contract shall not be made without prior written approval of the Department of General Services.
30. CONTRACTOR’S ADMINISTRATIVE FEE
The Contractor is required to pay a fee to DGS-PD based on the number of settled transactions processed. The fee is paid quarterly and is calculated as equal to $0.01 (1 cent) for each transaction processed per quarter under this Agreement.
This Administrative Fee shall not be invoiced or charged to the ordering agency or customer. Payment by the Contractor shall be made quarterly to DGS-PD irrespective of payment status of Subsidiary Agreements.
Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
Failure to submit correct reports and payments on a timely basis shall constitute grounds for default of this Agreement pursuant to Exhibit A, Section 28(b). Payments are due for the reporting period by the thirtieth (30th) calendar day following the ending of the quarter. (Note: If the due date is on a Saturday or Sunday, the due date will be the Monday following.)
Payment may be made in the form of an electronic payment using the PD LPA Payment Portal or by submitting a check payable to the State of California, Department of General Services. Along with each payment, a Usage Report, filtered in Excel as prescribed in Exhibit A, Section 11 “Reporting Requirements,” shall be submitted to the State Contract Administrator.
To submit fees through the PD LPA Payment Portal, users must register on the DGS-PD LPA Payment Portal (
https://www.dgs.ca.gov/PD/Services/Page-Content/Procurement- Division-Services-List-Folder/Access-LPA-Payment-Portal).
Administrative Fee payments made by check shall be submitted to the following address:
Department of General Services
Procurement Division
Attn: MAPS Payment Processing
707 Third Street, 2nd Floor
West Sacramento, CA 95605
Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
Exhibit A.1: Selected Services
The table below contains the services selected by the Authorized User within their Subsidiary Agreement #____________________. By selecting one or more of the services, the Authorized User is agreeing to be bound by the terms and conditions of the MSA 5-22-70-22-01.
Description
☐ Credit and Debit Card Processing
☐ Convenience/Service Fees
☐ Exhibit I: Mass Transit Services
Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
Exhibit B: Budget Detail and Payment Provisions
1. INVOICING AND PAYMENT
a. Authorized Users will open a Demand Deposit Account (DDA) at an approved State financial institution that participates in the Automated Clearing House of the Federal Reserve System (ACH) to accept electronic payments via ACH under this MSA. For California State Authorized users this DDA must be a Zero Balance Account (ZBA). b. Each Authorized User must provide the Contractor with the name, bank deposit account and A
B A (bank routing) numbers of the financial institution where such Authorized User’s DDA is established. Further, Authorized User must notify Contractor of any changes to its financial institution, account, or ACH information over the course of the agreement. Each Authorized User must also notify its financial institution that the Contractor has access to make deposits to the designated DDA. Contractor does not have authority to debit any amounts from the Authorized User’s DDA. c. Contractor shall settle the total amount for charges gross daily, net of refunds and reversals. Processing fees, chargebacks and adjustments will be invoiced to the Authorized Users. Contractor will not charge processing fees that are higher than or any additional fees other than those specified in Exhibit E.1: Service Pricing which cover all services provided by this MSA including electronic payment acceptance services, user guides, reports, and customer service.
d. If Authorized Users choose to assess a convenience and/or service fee, Authorized User acknowledges that all fees collected will be settled to a DDA established by the Contractor or Service Provider. Contractor or Service Provider will charge the convenience and/or service fee as a separate charge from the transaction amount, if applicable in accordance with Exhibit E, Section 4. All amounts owed to the Contractor for services provided in the Subsidiary Agreement will be deducted from the convenience and/or service fees collected by the Contractor or charged to the Service Provider, as applicable. Authorized Users remain responsible for Chargebacks. e. Contractor shall initiate payment to each Authorized User’s DDA in accordance with the schedule noted in Exhibit A, Section 5 (a)(i). If the payment transmittal date falls on a day that Contractor’s bank is not open for processing payments, Contractor will initiate payment the next available business day. Funds due to State Authorized Users shall never be held in Contractor’s account or any other account not specifically authorized by an Authorized User. Contractor will not be responsible for any obligations, damages, or liabilities in excess of the amount of the applicable debit, credit, or adjustment to an Authorized User’s DDA in the event that the Authorized User’s financial institution does not honor any such item or improperly applies it to such Authorized User’s account.
f. Each Authorized User shall provide billing information (mailing address, contact person, etc.) as part of its individual Subsidiary Agreement (defined in Exhibit A Section 14) executed with Contractor.
g. Invoices shall be submitted in arrears to each State Authorized User on Contractor’s letterhead within fifteen (15) days of the end of each month and in accordance with the Prompt Payment Act. The invoice shall include:
• The Subsidiary Agreement Number between the Authorized User and the Contractor.
• Authorized User Name.
Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
• Authorized User Merchant Number.
• Time period covered.
• Work completed for the period shall be identified (detailed statement of services rendered) as specified in the individual Authorized User’s Subsidiary Agreement. • Contact information for billing comments or inquiries such as a telephone number, fax number, and address.
h. Chargeback invoices shall be submitted to each State Authorized User on Contractor’s letterhead within forty-eight (48) hours of the final chargeback dispute decision. The invoice shall include:
• The Subsidiary Agreement Number between the Authorized User and the Contractor.
• Chargeback information.
• Date
• Transaction amount
• Cardholder information
• Dispute Reason
• Authorized User Name.
• Authorized User Merchant Number.
• Contact information for billing comments or inquiries such as a telephone number, fax number, and address
i. Upon receipt of invoices and subsequent approval by the Authorized User’s designated representative(s), the Authorized User will pay the Contractor for any invoice or chargeback invoice.
j. Contractor shall indicate Chargebacks and adjustments (including Credits) to Authorized Users in statements and reports as required pursuant to Exhibit A, Section
5.b.v.
k. The State does not accept liability of Local Authorized Users (cities, counties, local governments, political subdivisions etc.).
2. BUDGET CONTINGENCY CLAUSE
a. It is mutually agreed that if the Budget Act of the current year and/or any subsequent years covered under the Authorized User’s Subsidiary Agreement does not appropriate sufficient funds for the program contemplated thereunder, the Authorized User’s Subsidiary Agreement shall be of no further force and effect after the Authorized User provides written notice to Contractor. In this event, the State shall have no liability to pay any funds whatsoever to Contractor or to furnish any other consideration under the Subsidiary Agreement.
b. For State Authorized Users, if funding for any fiscal year is reduced or deleted by the Budget Act for purposes of the Authorized User’s programs, the Authorized Users shall have the option to either (i) cancel Authorized User’s Subsidiary Agreement with no liability occurring to the State by providing Contractor immediate written notice or (ii) offer an agreement amendment to Contractor to reflect the reduced amount. c. In the event an Authorized User’s Subsidiary Agreement is terminated pursuant to this Exhibit B, Section 2, such Authorized User shall be responsible for payment of all amounts owed to Contractor related to transactions processed up until the effective Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
date of termination and for all items received post-termination that relate to transactions processed prior to termination.
3. PROMPT PAYMENT CLAUSE
Payment will be made in accordance with, and within the time specified in, Government Code Chapter 4.5, commencing with Section 927.
4. CONTRACTOR OVERPAYMENTS
a. If the Authorized User determines that an overpayment has been made to the Contractor, the Authorized User will seek recovery immediately upon discovery of the overpayment by calling the contractor service center to request a refund of the overpayment amount. The Contractor shall have up to five (5) business days to verify overpayments. The Contractor will initiate deposit of verified overpayments to the Authorized User’s ZBA the next available business day.
b. If Contractor discovers they have received an overpayment, contractor must notify the Authorized user and refund or deposit the overpayment immediately.
Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
Exhibit C: Terms and Conditions (As Modified)
1. APPROVAL: This Agreement is of no force or effect until signed by both parties and approved by the Department of General Services, if required. Contractor may not commence performance until such approval has been obtained.
2. AMENDMENT: No amendment or variation of the terms of this Agreement shall be valid unless made in writing, signed by the parties and approved as required. No oral understanding or Agreement not incorporated in the Agreement is binding on any of the parties.
3. ASSIGNMENT: This Agreement is not assignable by either party, either in whole or in part, without the consent of the other party in the form of a formal written amendment.
4. AUDIT: Contractor agrees that the awarding department, the Department of General Services, the Bureau of State Audits, or their designated representative shall have the right to review and to copy any records and supporting documentation pertaining to the performance of this Agreement. Contractor agrees to maintain such records for possible audit for a minimum of three (3) years after final payment, unless a longer period of records retention is stipulated. Contractor agrees to allow the auditor(s) access to such records during normal business hours and to allow interviews of any employees who might reasonably have information related to such records. Further, Contractor agrees to include a similar right of the State to audit records and interview staff in any subcontract related to performance of this Agreement. (Gov. Code §8546.7, Pub. Contract Code §10115 et seq., CCR Title 2, Section 1896).
5. INDEMNIFICATION: Contractor agrees to indemnify, defend and save harmless the State, its officers, agents and employees: (a) from any and all claims and losses caused by the negligence or willful misconduct in the performance of this Agreement by Contractor, its subcontractors, suppliers, laborers, and any other person, firm or corporation engaged by Contractor to furnish or supply work services, materials, or supplies in connection with the performance of this Agreement, and (b) from any and all claims and losses accruing or resulting to any person, firm or corporation who may be injured or damaged by Contractor’s negligence or willful misconduct in the performance of this Agreement.
6. DISPUTES: Contract and the State shall continue with the responsibilities under this Agreement during any dispute.
7. TERMINATION FOR CAUSE: See Exhibit A, Section 28.
8. INDEPENDENT CONTRACTOR: Contractor, and the agents and employees of Contractor, in the performance of this Agreement, shall act in an independent capacity and not as officers or employees or agents of the State.
9. RECYCLING CERTIFICATION: The Contractor shall certify in writing under penalty of perjury, the minimum, if not exact, percentage of post-consumer material as defined in the Public Contract Code Section 12200, in products, materials, goods, or supplies offered or sold to the State regardless of whether the product meets the requirements of Public Contract Code Section 12209. With respect to printer or duplication cartridges that comply with the requirements of Section 12156(e), the certification required by this subdivision shall specify that the cartridges so comply (Pub. Contract Code §12205).
10. NON-DISCRIMINATION CLAUSE: During the performance of this Agreement, Contractor and its subcontractors shall not deny the contract’s benefits to any person on the basis of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status, nor shall they Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
discriminate unlawfully against any employee or applicant for employment because of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status. Contractor shall insure that the evaluation and treatment of employees and applicants for employment are free of such discrimination. Contractor and subcontractors shall comply with the provisions of the Fair Employment and Housing Act (Gov. Code §12900 et seq.), the regulations promulgated thereunder (Cal. Code Regs., tit. 2, §11000 et seq.), the provisions of Article
9.5, Chapter 1, Part 1, Division 3, Title 2 of the Government Code (Gov. Code §§11135- 11139.5), and the regulations or standards adopted by the awarding state agency to implement such article. Contractor shall permit access by representatives of the Department of Fair Employment and Housing and the awarding state agency upon reasonable notice at any time during the normal business hours, but in no case less than 24 hours’ notice, to such of its books, records, accounts, and all other sources of information and its facilities as said Department or Agency shall require to ascertain compliance with this clause. Contractor and its subcontractors shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement. (See Cal. Code Regs., tit. 2, §11105.)
Contractor shall include the nondiscrimination and compliance provisions of this clause in all subcontracts to perform work under the Agreement.
11. CERTIFICATION CLAUSES: The CONTRACTOR CERTIFICATION CLAUSES contained in the document CCC 04/2017 are hereby incorporated by reference and made a part of this Agreement by this reference as if attached hereto.
12. TIMELINESS: Time is of the essence in this Agreement.
13. COMPENSATION: The consideration to be paid Contractor, as provided herein, shall be in compensation for all of Contractor's expenses incurred in the performance hereof, including travel, per diem, and taxes, unless otherwise expressly so provided.
14. GOVERNING LAW: This contract is governed by and shall be interpreted in accordance with the laws of the State of California.
15. ANTITRUST CLAIMS: The Contractor by signing this agreement hereby certifies that if these services or goods are obtained by means of a competitive bid, the Contractor shall comply with the requirements of the Government Codes Sections set out below. a. The Government Code Chapter on Antitrust claims contains the following definitions:
1. "Public purchase" means a purchase by means of competitive bids of goods, services, or materials by the State or any of its political subdivisions or public agencies on whose behalf the Attorney General may bring an action pursuant to subdivision (c) of Section 16750 of the Business and Professions Code.
2. "Public purchasing body" means the State or the subdivision or agency making a public purchase. Government Code Section 4550.
b. In submitting a bid to a public purchasing body, the bidder offers and agrees that if the bid is accepted, it will assign to the purchasing body all rights, title, and interest in and Department of General Services
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to all causes of action it may have under Section 4 of the Clayton Act (15 U.S.C. Sec. 15) or under the Cartwright Act (Chapter 2 (commencing with Section 16700) of Part 2 of Division 7 of the Business and Professions Code), arising from purchases of goods, materials, or services by the bidder for sale to the purchasing body pursuant to the bid.
Such assignment shall be made and become effective at the time the purchasing body tenders final payment to the bidder. Government Code Section 4552. c. If an awarding body or public purchasing body receives, either through judgment or settlement, a monetary recovery for a cause of action assigned under this chapter, the assignor shall be entitled to receive reimbursement for actual legal costs incurred and may, upon demand, recover from the public body any portion of the recovery, including treble damages, attributable to overcharges that were paid by the assignor but were not paid by the public body as part of the bid price, less the expenses incurred in obtaining that portion of the recovery. Government Code Section 4553. d. Upon demand in writing by the assignor, the assignee shall, within one year from such demand, reassign the cause of action assigned under this part if the assignor has been or may have been injured by the violation of law for which the cause of action arose and (a) the assignee has not been injured thereby, or (b) the assignee declines to file a court action for the cause of action. See Government Code Section 4554.
16. CHILD SUPPORT COMPLIANCE ACT: For any Agreement in excess of $100,000, the contractor acknowledges in accordance with Public Contract Code 7110, that:
a. The contractor recognizes the importance of child and family support obligations and shall fully comply with all applicable state and federal laws relating to child and family support enforcement, including, but not limited to, disclosure of information and compliance with earnings assignment orders, as provided in Chapter 8 (commencing with section 5200) of Part 5 of Division 9 of the Family Code; and b. The contractor, to the best of its knowledge is fully complying with the earnings assignment orders of all employees and is providing the names of all new employees to the New Hire Registry maintained by the California Employment Development Department.
17. UNENFORCEABLE PROVISION: In the event that any provision of this Agreement is unenforceable or held to be unenforceable, then the parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby.
18. PRIORITY HIRING CONSIDERATIONS: If this Contract includes services in excess of $200,000, the Contractor shall give priority consideration in filling vacancies in positions funded by the Contract to qualified recipients of aid under Welfare and Institutions Code Section 11200 in accordance with Pub. Contract Code §10353.
19. SMALL BUSINESS PARTICIPATION AND DVBE PARTICIPATION REPORTING REQUIREMENTS:
a. If for this Contract Contractor made a commitment to achieve small business participation, then Contractor must within 60 days of receiving final payment under this Contract (or within such other time period as may be specified elsewhere in this Contract) report to the awarding department the actual percentage of small business participation that was achieved. (Govt. Code § 14841.)
b. If for this Contract Contractor made a commitment to achieve disabled veteran business enterprise (DVBE) participation, then Cont ractor must within 60 days of receiving final payment under this Contract (or within such other time period as may be specified elsewhere in this Contract) certify in a report to the awarding department:
(1) the total amount the prime Contractor received under the Contract; (2) the name Department of General Services
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and address of the DVBE(s) that participated in the performance of the Contract; (3) the amount each DVBE received from the prime Contractor; (4) that all payments under the Contract have been made to the DVBE; and (5) the a ctual percentage of DVBE participation that was achieved. A person or entity that knowingly provides false information shall be subject to a civil penalty for each violation. (Mil. & Vets.
Code § 999.5(d); Govt. Code § 14841.)
20. LOSS LEADER: If this contract involves the furnishing of equipment, materials, or supplies then the following statement is incorporated: It is unlawful for any person engaged in business within this state to sell or use any article or product as a “loss leader” as defined in Section 17030 of the Business and Professions Code. (PCC 10344(e)).
Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
Exhibit C.1: General Provisions – Information Technology (As Modified) The following definitions apply to Exhibit C.1. All other capitalized terms shall have their meanings set forth in Exhibit G.
1. DEFINITIONS: Unless otherwise specified in the Statement of Work, the following terms shall be given the meaning shown, unless context requires otherwise. a) “Application Program” means a computer program which is intended to be executed for the purpose of performing useful work for the user of the information being processed. Application programs are developed or otherwise acquired by the user of the Hardware/Software system, but they may be supplied by the Contractor. b) “Attachment” means a mechanical, electrical, or electronic interconnection to the Contractor-supplied Machine or System of Equipment, manufactured by other than the original Equipment manufacturer that is not connected by the Contractor. c) “Business entity” means any individual, business, partnership, joint venture, corporation, S-corporation, limited liability company, sole proprietorship, joint stock company, consortium, or other private legal entity recognized by statute. d) “Commercial Hardware” means Hardware developed or regularly used that: (i) has been sold, leased, or licensed to the general public; (ii) has been offered for sale, lease, or license to the general public; (iii) has not been offered, sold, leased, or licensed to the public but will be available for commercial sale, lease, or license in time to satisfy the delivery requirements of this Contract; or (iv) satisfies a criterion expressed in (i), (ii), or (iii) above and would require only minor modifications to meet the requirements of this Contract.
e) “Commercial Software” means Software developed or regularly used that: (i) has been sold, leased, or licensed to the general public; (ii) has been offered for sale, lease, or license to the general public; (ii i) has not been offered, sold, leased, or licensed to the public but will be available for commercial sale, lease, or license in time to satisfy the delivery requirements of this Contract; or (iv) satisfies a criterion expressed in (i), (ii), or (iii) above and would require only minor modifications to meet the requirements of this Contract.
f) “Contract” means this Contract or A greement (including any purchase order), by whatever name known or in whatever format used.
g) “Contractor” means the Business Entity wi th whom the State enters into this Contract. Contractor shall be synonymous with “supplier”, “vendor” or other similar term.
h) “Data Processing System (System)” means the total complement of Contractor - furnished Machines, including one or more central proces sors (or instruction processors), Operating Software which are acquired to operate as an integrated group.
i) “Deliverables” means Goods, Software, Information Technology, telecommunications technology, Hardware, and other items (e.g. reports) to be delivered pursuant to this Contract, including any such items furnished incident to the provision of services.
j) “Designated CPU(s)” means for each product, if applicable, the central processing unit of the computers or the server unit, including any associated peripheral units. If Department of General Services
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no specific “Designated CPU(s)” are specified on the Contract, the term shall mean any and all CPUs located at the site specified therein. k) “Documentation” means manuals and other printed materials necessary or useful to the State in its use or maintenance of the Equipment or Software provided hereunder. Manuals and other printed materials customized for the State hereunder constitute Work Product if such materials are required by the Statement of Work. l) “Equipment” is an all-inclusive term which refers either to individual Machines or to a complete Data Processing System or Subsystem, including its Hardware and Operating Software (if any).
m) “Goods” means all types of tangible personal property, including but not limited to materials, supplies, and Equipment (including computer and telecommunications Equipment).
n) “Hardware” usually refers to computer Equipment and is contrasted with Software.
See also Equipment.
o) “Installation Date” means the date specified in the Statement of Work by which the Contractor must have the ordered Equipment ready (certified) for use by the State. p) “Information Technology” includes, but is not limited to, all electronic technology systems and services, automated information handling, System design and analysis, conversion of data, computer programming, information storage and retrieval, telecommunications which include voice, video, and data communications, requisite System controls, simulation, electronic commerce, and all related interactions between people and Machines.
q) “Machine” means an individual unit of Data Processing System or Subsystem, separately identified by a type and/or model number, comprised of but not limited to mechanical, electro- mechanical, and electronic parts, microcode, and special features installed thereon and including any necessary Software, e.g., central processing unit, memory module, tape unit, card reader, etc. r) “Programming Aids” means Contractor -supplied programs and routines executable on the Contractor’s Equipment which assists a programmer in the development of applications including language processors, sorts, communications modules, data base management systems, and utility routines (tape-to-disk routines, disk-to-print routines, etc.).
s) “Program Product” means programs, routines, subrouti nes, and related items which are proprietary to the Contractor and which are licensed to the State for its use, usually on the basis of separately stated charges and appropriate contractual provisions.
t) “Software” means an all -inclusive term which refers to any computer programs, routines, or subroutines supplied by the Contractor, including Operating Software, Programming Aids, Application Programs, and Program Products. u) “State” means the government of the State of California, its employees and authorized representatives, including without limitation any department, agency, any Department of General Services
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Authorized User participating in the MSA, or other unit of the government of the State of California.
v) “System” means the complete collection of Hardware, Software and services as described in this Contract, integrated and functioning together, and performing in accordance with this Contract.
w) “U.S. Intellectual Property Rights” means intellectual property rights enforceable in the United States of America, including without limitation rights in trade secrets, copyrights, and U.S. patents.
2. SEVERABILITY: See MSA Exhibit C, Section 17.
3. COMPLIANCE WITH STATUTES AND REGULATIONS:
a) The State and the Contractor warrants and certifies that in the performance of this Contract, it will comply with all applicable statutes, rules, regulations and orders of the United States and the State of California. The Contractor agrees to indemnify the State against any loss, cost, damage or liability by reason of the Contractors violation of this provision.
b) The State will notify the Contractor of any such claim in writing and tender the defense thereof within a reasonable time; and
c) The Contractor will have sole control of the defense of any action on such claim and all negotiations for its settlement or compromise; provided that (i) when substantial principles of government or public law are involved, when litigation might create precedent affecting future State operations or liability, or when involvement of the State is otherwise mandated by law, the State may participate in such action at its own expense with respect to attorneys’ fees and costs (but not liability); (ii) where a settlement would impose liability on the State, affect principles of California government or public law, or impact the authority of the State, the Department of General Services will have the right to approve or disapprove any settlement or compromise, which approval will not unreasonably be withheld or delayed and (iii) the State will reasonably cooperate in the defense and in any related settlement negotiations.
d) If this Contract is in excess of $554,000, it is subject to the requirements of the World Trade Organization (WTO) Government Procurement Agreement (GPA). e) To the extent that this Contract falls within the scope of Government Code Section 11135, the Contractor hereby agrees to respond to and resolve any complaint brought to its attention, regarding accessibility of its products or services.
4. CONTRACTOR’S POWER AND AUTHORITY: See MSA Exhibit C, Section 5.
5. WAIVER OF RIGHTS: Any action or inaction by the State or the failure of the State on any occasion, to enforce any right or provision of the Contract, shall not be construed to be a waiver by the State of its rights hereunder and shall not prevent the State from enforcing such provision or right on any future occasion. The rights and remedies of the State herein are cumulative and are in addition to any other rights or remedies that the State may have at law or in equity.
6. DELIVERY: The Contractor shall strictly adhere to the delivery and completion schedules specified in this Contract. Time, if stated as a number of days, shall mean calendar days unless otherwise specified. The quantities specified herein are the only quantities required. If the Contractor delivers in excess of the quantities specified herein, the State shall not be required to make any payment for the excess Deliverables, and Department of General Services
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may return them to Contractor at the Contractor’s expense or utilize any other rights available to the State at law or in equity.
7. INSPECTION, ACCEPTANCE AND REJECTION: See Exhibit F, Sections 4(e) and (f).
8. SAMPLES:
a) Samples of items may be required by the State for inspection and specification testing and must be furnished free of expense to the State. The samples furnished must be identical in all respects to the products bid and/or specified in the Contract. b) Samples, if not destroyed by tests, may, upon request made at the time the sample is furnished, be returned at the Contractor’s expense.
9. WARRANTY:
a) Unless otherwise specified in the Statement of Work, the warranties in this subsection a) begin upon delivery of the goods or services in question and end one (1) year thereafter. The Contractor warrants that (i) Deliverables and services furnished hereunder will substantially conform to the requirements of this Contract (including without limitation all descriptions, specifications, and drawings identified in the Statement of Work), and (ii) the Deliverables will be free from material defects in materials and workmanship. Where the parties have agreed to design specifications (such as a Detailed Design Document) and incorporated the same or equivalent in the Statement of Work directly or by reference, the Contractor will warrant that it’s Deliverables provide all material functionality required thereby. In addition to the other warranties set forth herein, where the Contract calls for delivery of Commercial Software, the Contractor warrants that such Software will perform in accordance with its license and accompanying Documentation. The State’s approval of designs or specifications furnished by Contractor shall not relieve the Contractor of its obligations under this warranty.
b) The Contractor warrants that Deliverables furnished hereunder (i) will be free, at the time of delivery, of harmful code (i.e. computer viruses, worms, trap doors, time bombs, disabling code, or any similar malicious mechanism designed to interfere with the intended operation of, or cause damage to, computers, data, or Software); and (ii) will not infringe or violate any U.S. Intellectual Property Right. Without limiting the generality of the foregoing, if the State believes that harmful code may be present in any Commercial Software delivered hereunder, the Contractor will, upon the State’s request, provide a new or clean install of the Software. c) Unless otherwise specified in the Statement of Work:
i. The Contractor does not warrant that any Software provided hereunder is error- free or that it will run without immaterial interruption. ii. The Contractor does not warrant and will have no responsibility for a claim to the extent that it arises directly from (A) a modification made by the State, unless such modification is approved or directed by the Contractor in writing, (B) use of Software in combination with or on products other than as specified by the Contractor, or (C) misuse by the State.
iii. Where the Contractor resells Commercial Hardware or Commercial Software it purchased from a third party, Contractor, to the extent it is legally able to do so, will pass through any such third party warranties to the State and will reasonably cooperate in enforcing them. Such warranty pass-through will not relieve the Contractor from Contractor’s warranty obligations set forth above.
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d) All warranties, including special warranties specified elsewhere herein, shall inure to the State, its successors, assigns, customer agencies, and governmental users of the Deliverables or services.
e) Except as may be specifically provided in the Statement of Work or elsewhere in this Contract, for any breach of the warranties provided in this Section, the State’s exclusive remedy and the Contractor’s sole obligation will be limited to:
i. re-performance, repair, or replacement of the nonconforming Deliverable (including without limitation an infringing Deliverable) or service; or ii. should the State in its sole discretion consent, refund of all amounts paid by the State for the nonconforming Deliverable or service and payment to the State of any additional amounts necessary to equal the State’s Cost to Cover. “Cost to Cover” means the cost, properly mitigated, of procuring Deliverables or services of equivalent capability, function, and performance. The payment obligation in subsection (e)(ii) above will not exceed the limits on the Contractor’s liability set forth in Exhibit A, Section 24.
f) EXCEPT FOR THE EXPRESS WARRANTIES SPECIFIED IN THIS SECTION, THE
CONTRACTOR MAKES NO WARRANTIES EITHER EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
10. SAFETY AND ACCIDENT PREVENTION: In performing work under this Contract on State premises, the Contractor shall conform to any specific safety requirements contained in the Contract or as required by law or regulation. The Contractor shall take any additional precautions as the State may reasonably require for safety and accident prevention purposes. Any violation of such rules and requirements, unless promptly corrected, shall be grounds for termination of this Contract in accordance with the default provisions hereof.
11. RIGHTS AND REMEDIES OF STATE FOR DEFAULT:
a) In the event any Deliverables furnished or services provided by the Contractor in the performance of the Contract should fail to conform to the requirements herein, or to the sample submitted by the Contractor, the State may reject the same, and it shall become the duty of the Contractor to reclaim and remove the item promptly or to correct the performance of services, without expense to the State, and immediately replace all such rejected items with others conforming to the Contract. b) In addition to any other rights and remedies the State may have, the State may require the Contractor, at Contractor’s expense, to ship Deliverables via air freight or expedited routing to avoid or minimize actual or potential delay if the delay is the fault of the Contractor.
c) In the event of the termination of the Contract, either in whole or in part, by reason of default or breach by the Contractor, any loss or damage sustained by the State in procuring any items which the Contractor agreed to supply shall be borne and paid for by the Contractor (but subject to the clause set forth in Exhibit A, Section 24). d) The State reserves the right to offset the reasonable cost of all damages caused to the State against any outstanding invoices or amounts owed to the Contractor or to make a claim against the Contractor therefore subject to Exhibit A, Section 24.
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12. TAXES: Unless otherwise required by law, the State of California is exempt from Federal excise taxes. The State will only pay for any State or local sales or use taxes on the services rendered or Goods supplied to the State pursuant to this Contract.
13. CONFIDENTIALITY OF DATA: All financial statistical, personal, technical and other data and information relating to the State’s operation which are designated confidential by the state and made available to the Contractor in order to carry out this Contract, or which become available to the Contractor in carrying out this Contract, shall be protected by the Contractor from unauthorized use and disclosure through the observance of the same or more effective procedural requirements as are applicable to the State. The identification of all such confidential data and information as well as the State's procedural requirements for protection of such data and information from unauthorized use and disclosure shall be provided by the State in writing to the Contractor. If the methods and procedures employed by the Contractor for the protection of the Contractor's data and information are deemed by the State to be adequate for the protection of the State's confidential information, such methods and procedures may be used, with the written consent of the State, to carry out the intent of this paragraph. The Contractor shall not be required under the provisions of this paragraph to keep confidential any data or information which is or becomes publicly available, is already rightfully in the Contractor's possession without obligation of confidentiality, is independently developed by the Contractor outside the scope of this Contract, or is rightfully obtained from third parties.
14. PROTECTION OF PROPRIETARY SOFTWARE AND OTHER PROPRIETARY DATA:
a) Subject to the California Public Records Act, the State agrees that all material appropriately marked or identified in writing as proprietary, and furnished hereunder are provided for the State’s exclusive use for the purposes of this Contract only. b) The State will ensure, prior to disposing of any media, that any licensed materials contained thereon have been erased or otherwise destroyed. c) The State agrees that it will take appropriate action by instruction, agreement or otherwise with its employees or other persons permitted access to licensed software and other proprietary data to satisfy its obligations in this Contract with respect to use, copying, modification, protection and security of proprietary software and other proprietary data.
15. RIGHT TO COPY OR MODIFY:
a) Any Software Product provided by the Contractor in machine-readable form may be copied, in whole or in part, in printed or machine-readable form for use by the State with the designated CPU, to perform one-time benchmark tests, for archival or emergency restart purposes, to replace a worn copy, to understand the contents of such machine- readable material, or to modify the Software Product as provided below; provided, however, that no more than the number of printed copies and machine-readable copies as specified in the Statement of Work will be in existence under this Contract at any time without prior written consent of the Contractor. Such consent shall not be unreasonably withheld by the Contractor. The original, and any copies of the Software Product, in whole or in part, which are made hereunder shall be the property of the Contractor.
b) The State may modify any non-personal computer Software Product, in machine- readable form, for its own use and merge it into other program material. Any portion of the Software Product included in any merged program material shall be used only Department of General Services
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on the designated CPUs and shall be subject to the terms and conditions of the Contract.
16. ENCRYPTION/CPU ID AUTHORIZATION CODES:
a) When Encryption/CPU Identification (ID) authorization codes are required to operate the Software Products, the Contractor will provide all codes to the State with delivery of the Software.
b) In case of inoperative CPU, the Contractor will provide a temporary encryption/CPU ID authorization code to the State for use on a temporarily authorized CPU until the designated CPU is returned to operation.
c) When changes in designated CPUs occur, the State will notify the Contractor via telephone and/or facsimile/e-mail of such change. Upon receipt of such notice, the Contractor will issue via telephone and/or facsimile/e-mail to the State within 24 hours, a temporary encryption ID authorization code for use on the newly designated CPU until such time as permanent code is assigned.
17. PATENT, COPYRIGHT AND TRADE SECRET INDEMNITY:
a) Contractor will indemnify, defend, and save harmless the State, its officers, agents, and employees, from any and all third party claims, costs (including without limitation reasonable attorneys’ fees), and losses for infringement or violation of any U.S.
Intellectual Property Right by any product or service provided hereunder. With respect to claims arising from computer Hardware or Software manufactured by a third party and sold by Contractor as a reseller, Contractor will pass through to the State such indemnity rights as it receives from such third party (“Third Party Obligation”) and will cooperate in enforcing them; provided that if the third party manufacturer fails to honor the Third Party Obligation, Contractor will provide the State with indemnity protection equal to that called for by the Third Party Obligation, but in no event greater than that called for in the first sentence of this Section). The provisions of the preceding sentence apply only to third party computer Hardware or Software sold as a distinct unit and accepted by the State.
Unless a Third Party Obligation provides otherwise, the defense and payment obligations set forth in this Section will be conditional upon the following:
i. The State will notify the Contractor of any such claim in writing and tender the defense thereof within a reasonable time; and
ii. The Contractor will have sole control of the defense of any action on such claim and all negotiations for its settlement or compromise; provided that (a) when substantial principles of government or public law are involved, when litigation might create precedent affecting future State operations or liability, or when involvement of the State is otherwise mandated by law, the State may participate in such action at its own expense with respect to attorneys’ fees and costs (but not liability); (b) where a settlement would impose liability on the State, affect principles of California government or public law, or impact the authority of the State, the Department of General Services will have the right to approve or disapprove any settlement or compromise which approval will not unreasonably be withheld or delayed; and (c) the State will reasonably cooperate in the defense and in any related settlement negotiations.
b) Should the Deliverables, or the operation thereof, become, or in the Contractor’s opinion are likely to become, the subject of a claim of infringement or violation of a U.S. Intellectual Property Right, the State shall permit the Contractor, at its option Department of General Services
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and expense, either to procure for the State the right to continue using the Deliverables, or to replace or modify the same so that they become non-infringing. If none of these options can reasonably be taken, or if the use of such Deliverables by the State shall be prevented by injunction the Contractor agrees to take back such Deliverables and make every reasonable effort to assist the State in procuring substitute Deliverables. If, in the sole opinion of the State, the return of such infringing Deliverables makes the retention of other Deliverables acquired from the Contractor under this Contract impractical, the State shall then have the option of terminating such Contracts, or applicable portions thereof, without penalty or termination charge. The Contractor agrees to take back such Deliverables and refund any sums the State has paid the Contractor less any reasonable amount for use or damage.
c) The Contractor shall have no liability to the State under any provision of this clause with respect to any claim of patent, copyright or trade secret infringement which is based upon:
i. The operation of Equipment furnished by the Contractor under the control of any Operating Software other than, or in addition to, the current version of Contractor- supplied Operating Software; or
ii. The modification initiated by the State, or a third party at the State’s direction, of any Deliverable furnished hereunder; or
iii. The combination or utilization of Software furnished hereunder with non- contractor supplied Software.
d) The Contractor certifies that it has appropriate systems and controls in place to ensure that State funds will not be used in the performance of this Contract for the acquisition, operation or maintenance of computer Software in violation of copyright laws.
18. COVENANT AGAINST GRATUITIES: The Contractor warrants that no gratuities (in the form of entertainment, gifts, or otherwise) were offered or given by the Contractor, or any agent or representative of the Contractor, to any officer or employee of the State with a view toward securing the Contract or securing favorable treatment with respect to any determinations concerning the performance of the Contract. For breach or violation of this warranty, the State shall have the right to terminate the Contract, either in whole or in part, and any loss or damage sustained by the State in procuring on the open market any items which the Contractor agreed to supply shall be borne and paid for by the Contractor. The rights and remedies of the State provided in this clause shall not be exclusive and are in addition to any other rights and remedies provided by law or in equity.
19. NATIONAL LABOR RELATIONS BOARD CERTIFICATION: See MSA Exhibit C, Section 11.
20. FOUR DIGIT DATE COMPLIANCE: Contractor warrants that it will provide only Four- Digit Date Compliant (as defined below) Deliverables and/or services to the State. “Four Digit Date Compliant” Deliverables and services can accurately process, calculate, compare, and sequence date data, including without limitation date data arising out of or relating to leap years and changes in centuries. This warranty and representation is subject to the warranty terms and conditions of this Contract and does not limit the generality of warranty obligations set forth elsewhere herein.
21. ELECTRONIC WASTE RECYCLING ACT OF 2003: The Contractor certifies that it complies with the applicable requirements of the Electronic Waste Recycling Act of Department of General Services
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2003, Chapter 8.5, Part 3 of Division 30, commencing with Section 42460 of the Public Resources Code. The Contractor shall maintain documentation and provide reasonable access to its records and documents that evidence compliance.
22. USE TAX COLLECTION: In accordance with PCC Section 10295.1, the Contractor certifies that it complies with the requirements of Section 7101 of the Revenue and Taxation Code. Contractor further certifies that it will immediately advise the State of any change in its retailer’s seller’s permit or certification of registration or applicable affiliate’s seller’s permit or certificate of registration as described in subdivision (a) of PCC Section 10295.1.
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Exhibit D: Insurance Requirements
1. PROOF OF INSURANCE
Contractor shall provide proof of insurance, in the form of a certificate to the Authorized User. Insurance companies must be acceptable to DGS, Office of Risk Management (ORIM). If self-insured, review of financial information may be required.
2. GENERAL PROVISIONS APPLYING TO ALL POLICIES
a. Coverage Term – Coverage needs to be in force for the complete term of the contract. If insurance expires during the term of the contract, a new certificate must be received by the State prior to the expiration of this insurance. Any new insurance must still comply with the original terms of the contract.
b. Policy Cancellation or Termination & Notice of Non-Renewal – Contractor is responsible to notify the State within five business days before the effective date of any cancellation, non-renewal, or material change that affects required insurance coverage rendering Contractor in breach of the contract. In the event Contractor fails to keep in effect at all times the specified insurance coverage, the State may, in addition to any other remedies it may have, terminate this Contract upon the occurrence of such event, subject to the provisions of this Contract. c. Deductible – Contractor is responsible for any deductible or self-insured retention contained within their insurance program.
d. Primary Clause – The general liability insurance contained in this contract shall be primary, and not excess or contributory, to any other insurance carried by the State. e. Insurance Carrier Required Rating – All insurance companies must carry an AM Best rating of note less than A- (minus) financial category VII. If the Contractor is self- insured for a portion or all of its insurance, and public reports are not readily available, review of financial information may be required upon request. f. Endorsements – Any required endorsements requested by the State must be physically attached to all requested certificates of insurance and not substituted by referring to such coverage on the certificate of insurance. g. Inadequate Insurance – Inadequate or lack of insurance does not negate the contractor obligations under the contract.
h. Available Coverages/Limits - All coverage and limits available to the contractor shall also be available and applicable to the State.
i. Subcontractors - In the case of Contractor utilization of subcontractors to complete the contracted scope of work, Contractor shall include all subcontractors as insured’s under Contractor and insurance or supply evidence of insurance to The State equal to policies, coverages and limits required of Contractor. The State has the right to accept lower limits appropriate for the services being subcontracted.
3. COMMERCIAL GENERAL LIABILITY
Contractor shall maintain, at Contractor’s expense, and keep in effect during the term of this Contract, Commercial General Liability Insurance covering bodily injury, and property damage. This insurance shall include personal and advertising injury liability, products, completed operations, and contractual liability coverage. Coverage shall be written on an occurrence basis in an amount not be less than $1,000,000 per occurrence. Annual aggregate limit shall not be less than $2,000,000. The State of California, its officers, Department of General Services
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agents, and employees are to be covered as additional insureds with respect to liability arising out of work or operations.
4. AUTO LIABILITY
By signing this Agreement, the Contractor certifies that the Contractor and any employees, subcontractors or servants possess valid automobile coverage in accordance with California Vehicle Code Sections 1 6 4 5 0 to 1 6 4 5 7, inclusive. The State reserves the right to request proof at any time.
5. WORKERS’ COMPENSATION AND EMPLOYER’S LIABILITY
Workers’ Compensation insurance as required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with limit of no less than $1,000,000 per accident for bodily injury or disease. Policy shall be endorsed to include waiver of subrogation in favor of State of California.
6. PROFESSIONAL LIABILITY
Contractor shall maintain, at Contractor’s expense, and keep in effect during the term of this Contract, Professional Liability Insurance covering any damages caused by an error, omission or any negligent acts including third party losses, related to the services to be provided under this contract by the Contractor and Contractor’s subcontractors, agents, officers and employees in an amount of not less than $1,000,000 per occurrence, incident or claim. Annual aggregate limit shall not be less than $2,000,000.
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Exhibit E: Fees and Costs
1. FEES AND COSTS
The fees and costs based on pricing provided in Exhibit E.1: Service Pricing and Exhibit E.2: Equipment and Software Pricing will be invoiced in accordance with Exhibit B. The amounts deposited into Authorized User’s Demand Deposit Account (DDA) will be gross receipts and net of refunds and reversals.
2. VISA AND MASTERCARD INTERCHANGE ASSESSMENT RATES
The Visa and MasterCard interchange assessment pricing specified is subject to fluctuations. These rates are outside of the control of the State of California and the Contractor. Both increases and decreases in these rates are to be passed on to the Authorized Users of this Agreement in the form of changes in the official interchange assessment rates from VISA and MasterCard by the Contractor. Contractor will send, as promptly as possible, to each Authorized User, or designee, and to the DGS Contract Administrator, notices documenting all pricing adjustments resulting from the official changes in interchange assessment rates. The following sites provide the most up-to-date interchange assessment rates as they occur.
• MasterCard Interchange Rates
:
http://www.mastercard.com/us/merchant/support/interchange_rates.html • Visa Interchange Rates:
https://usa.visa.com/support/small-business/regulations-fees.html
3. EQUIPMENT PRICING
Upon request, Contractor will provide equipment and software pricing and specification sheets on an annual basis in the format and delivery method specified by DGS. Once these prices are negotiated and approved by DGS, this information will be posted along with the respective contracts on the State’s Procurement Portal (Cal eProcure). Posting of price lists allows the Authorized Users access to both service and equipment/software pricing so Authorized Users can conduct a complete cost analysis based on their organization’s individual requirements. Authorized Users may negotiate pricing lower than the maximum pricing listed on the Contractor’s Price Sheet.
Price declines shall be effective immediately upon any public notification of the decline. All prices quoted shall be firm fixed maximum for the initial price list period. However, should a price decline be announced by the Contractor after contract award, and prior to an Authorized User utilizing the services, then the Contractor shall use the reduced pricing.
4. CONVENIENCE/SERVICE FEES
a. Authorized Users, at their discretion, may elect to have the Contractor or Service Provider charge a convenience and/or service fee to the cardholder (paying parties) to offset the processing fees charged to the Authorized User. Assessment of the convenience and/or service fee occurs at the time of the transaction. Use of Convenience and/or service fees should be addressed by each Authorized User in their individual Subsidiary Agreement.
The convenience and/or service fee to be charged to Cardholders for transactions processed will be mutually agreed upon by Contractor or Service Provider and Authorized User. If the Authorized User is using the Contractor for convenience and/or Department of General Services
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service fees, the amount of the convenience and/or service fee may be adjusted in the Subsidiary Agreement, at any time, upon the mutual agreement of Contractor and the Authorized User. Contractor shall not charge Authorized User a fee in consideration for processing the convenience and/or service fee. Any amendment to the convenience and/or service fee assessed by the Contractor must be agreed upon by the Authorized User and Contractor.
Convenience and/or service fees are subject to the constraints of the card associations, card companies, Merchant Category Codes (MCC), business requirements of Authorized Users and, in some instances, by State regulations and/or laws. In general, card payments, and specific card brands, may not be disadvantaged at the point-of-sale relative to other payment.
State and Local Use:
• May only be charged by Authorized Users in certain fee programs based on Association Rules, Merchant Category Code (MCC) and the business requirements of Authorized Users.
• Must be paid to and managed by the Contractor, or if requested by the Authorized User and approved by Contractor, paid to and managed by a Service Provider retained by the Authorized User (pursuant to Exhibit H, Section 14). If Authorized User chooses to use a Service Provider, Authorized User acknowledges that all fees will be settled into a DDA established by the Service Provider, and Contractor will charge the Service Provider for all fees due and owing for such Convenience/Service Fee transactions. Notwithstanding the foregoing, Authorized User shall be fully liable for any Contractor’s fees provided for in this Agreement. • Convenience and/or service fee and underlying transaction must be submitted and processed as two separate transactions.
• Authorized Users who qualify for the American Express Public Sector Program (outlined in Chapter 34 of the Operating Guide) may elect to participate in the program, provided that the Authorized Users also participate in the Government/Public Institution Service Fees (GPISF) (outlined in Chapter 14 of the Operating Guide).
Local Use Only:
• May be paid to or managed by the Authorized User, Contractor, or Service Provider (as outlined above).
• Convenience and/or service fee and underlying transaction may be combined into a single transaction, if allowed by local user.
b. Contractor providing convenience and/or service fee services agrees to all of the following:
• Contractor must provide option to assess or not assess a convenience fee. • Support convenience and/or service fee policies and variations in convenience fees at the individual Authorized User level while remaining in compliance with credit and debit card Association regulations.
• Support convenience and/or service fee assessment with each type of payment channel provided within this contract (IVR, point of sale, internet, etc.). • Separate the Convenience and/or service fee from any payment that is owed by a Cardholder to Authorized User and paid through a payment transaction. Separate Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
Convenience and/or service fees from other fees when invoicing the Authorized User.
• Provide Authorized User access to reports detailing all processed transactions. • Provide Cardholder the opportunity to make payments to the Authorized User by credit card through both an interactive telephone voice response system (“IVR”) and Internet interface.
• On behalf of Authorized User, collect and process Authorized User Payments from Cardholders using the American Express Card, MasterCard, VISA, and Discover Card.
• Provide Authorized User payment transactions to the appropriate card organizations through Contractor and Contractor shall settle the Authorized User’s payments to the Authorized User’s designated bank account. Contractor shall retain all convenience and/or service fees collected by it hereunder after paying all fees owed in connection with payment transactions to the appropriate parties. • Confirm the dollar amount of all cardholder’s authorized payments and the corresponding convenience and/or service fees to be charged to Cardholder and obtain the Cardholder’s approval (electronic or otherwise) of such charges prior to initiating credit authorizations.
• Provide cardholder with electronic confirmation of card transactions. • Electronically transmit all card transactions to all parties involved, in real time as the transactions occur.
• Arrange for a unique line merchant description for the Authorized payment that references the name of Authorized User and arrange for a separate unique line merchant description for the convenience and/or service fee that references Contractor and the nature of the fee.
• Upon request by the Authorized User, assign to Authorized User one or more identification numbers or passwords for Authorized User’s use in obtaining the card services. Once such identification number(s) or password(s) have been delivered to Authorized User by Contractor, the use and confidentiality of such numbers and/or passwords shall be the sole responsibility of Authorized User.
Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
Exhibit E.1: Service Pricing
Category 1: Credit and Debit Card Service Pricing (Tier Pricing based on Transactions) Pricing for all Authorized Users during the first year of this Agreement is Tier 1 identified in the table below. Future MSA pricing will be determined using the methodology identified below in Pricing Disclosure.
Service Pricing:
Services Unit
Tier 1
# of
Transactions
Range:
1-125,000,000
Tier 2
# of
Transactions
Range:
125,000,001-
150,000,000
Tier 3
# of
Transactions
Range:
150,000,001-
175,000,000
Tier 4
# of
Transactions
Range:
175,000,001-
200,000,000
Tier 5
# of
Transactions
Range:
200,000,001+
Authorization Fee Per Transaction $0.025 $0.024 $0.023 $0.022 $0.02 AMEX Authorization
Fee
(Pass Through
Cost Per
Transaction)
$0.025 $0.024 $0.023 $0.022 $0.02
Chargeback Fee Per Transaction $5.00 $5.00 $5.00 $5.00 $5.00 Voice Authorization Per Transaction $0.75 $0.75 $0.75 $0.75 $0.75 Cybersource Gateway
& Processing (Transit
Only)
Per Transaction $0.03 $0.03 $0.03 $0.03 $0.03
Foreign Network Fee
(IP SSL) Per Transaction $0.03 $0.03 $0.03 $0.03 $0.03
Converge
Tokenization Per Transaction $0.05 $0.04 $0.03 $0.02 $0.01 Pricing Disclosure
Category 1: Credit and Debit Card Service Pricing (Tier Pricing based on Transactions) Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
Beginning on the Agreement Effective Date, all Authorized Users collectively under the MSA will be assigned to Tier 1, as identified on Exhibit E.1 - Service Pricing. The Transactions included in the Transaction count are the aggregate number of all Visa, MasterCard, Discover, and debit transactions processed by Contractor for all Authorized Users. Once annually, one (1) month prior to the anniversary date, Contractor will review the combined Authorized Users’ Transaction count data for the prior twelve (12) months and, upon the first day of the month following the annual anniversary date, will apply the applicable pricing tier to all Authorized Users. The State will issue an amendment, reflecting the effective Tier.
American Express counts are not included in determining the tiers, however, their pricing will be adjusted and mirror that of the Visa, MasterCard, Discover and debit transactions.
Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
Exhibit E.2: Equipment and Software Pricing
Equipment Pricing:
Equipment Type
(Terminals, POS, Pin Pads, Printers,
Imprinter)
Description
Elavon
Product
Code
MSRP Unit Price
(1-49) Unit Price (50+)
1. Smart Terminals/POS
Talech Moby M120 Smart terminal MB120 $621.00 $589.95 $558.90 Poynt 5 Wi-Fi Smart terminal PYT5 $308.00 $292.60 $277.20 Newland 910 Smart terminal N910 $539.00 $512.05 $485.10
2. Pin Pads
Ingenico Desk 1500 Pin Pad D150 $189.00 $179.55 $170.10 Ingenico Link 2500 Pin Pad L250 $189.00 $179.55 $170.10 Ingenico Lane 3000 Pin Pad LAN300 $259.00 $246.05 $233.10 Ingenico Lane 5000 Pin Pad LAN500 $399.00 $369.05 $259.10
3. Terminal (Desktop)
Ingenico Desk 3500 Terminal D350 $229.99 $218.49 $206.99 Ingenico Desk 5000 Terminal D500 $431.00 $406.45 $387.90
4. Wireless Terminals
Ingenico Move 5000 4G1 Wireless Terminal M500U $499.00 $474.05 $449.10 SIM Card SIM Card 250SC $10.00 $10.00 $10.00
Monthly Wireless Fee Monthly Wireless
Access Fee
$20.00 $20.00 $20.00
Ingenico Move 5000 Bluetooth Bluetooth M500B $499.00 $474.05 $449.10 Ingenico Move 5000 with Charging Base Bluetooth and 4G M500BTP $606.00 $575.70 $545.40
5. Printers
Star 300 (Bluetooth) SM300 $343.00 $309.00 $309.00
Star 230i Bluetooth SM230 $332.00 $299.00 $299.00
Star 654 (USB) SP364 $325.00 $308.75 $292.50
Star 143 (LAN) SP143 $325.00 $308.75 $292.50
Imprinters IMPR $21.00 $21.00 $21.00
1 Note: Wireless Terminal requires SIM Card and Monthly Wireless Fee Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
Software Pricing:
Software Description MSRP Unit Price (1-49) Unit Price (50+) Monthly Fee Gateways Gateways Licensing $199.00 $149.00 $149.00 $5.00
Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
Exhibit E.3: Equipment Specifications
1. Smart Terminals/POS
Specification Talech Moby M120 Poynt 5 Wi-Fi Newland 910 Picture:
Elavon Product
Code:
MB120 PYT5 N910
Brand/Model
Number:
Ingenico: PMT-808-
08862B
P0501 N7G-G77DXE0000
Description: Tablet POS provides
enterprise-class
features, including
Corning® Gorilla®
Glass with a
capacitive
touchscreen, a long
battery life (7,000
mAh) and seamless
high-volume
payment acceptance
capabilities.
Wireless, handheld
smart terminal
designed for a fast,
easy, and delightful
mobile checkout
experience.
Customizable and
scalable, offering
easy integration
with many existing
POS systems.
State-of-the-art smart
POS. Everything
you need to process
payments through
different methods
and dramatically
simplify the whole
payment process.
Color: Black Black Gray
Dimensions: 350 x 207 x 18.5 mm
12” (Screen size)
76.3 mm x 154.0 mm
x 25.4 mm
190mm (L) x 81mm
(W) x 54.9mm (H)
Weight: 1130g (tablet without
POS)
201.6g 440g including
battery
Connector: WiFi
Bluetooth
WiFi
Bluetooth
WiFi
Bluetooth
Additional Feature:
Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
2. Pin Pads
Specification Ingenico Desk
1500
Ingenico Link
2500
Ingenico Lane
3000
Ingenico Lane
5000
Picture:
Elavon Product
Code:
D150 L250 LAN300 LAN500
Brand/Model
Number:
Ingenico:
PPD34311368C
Ingenico:
PMF30910412A
Ingenico:
PRD30310878B
Ingenico:
PRB32611578I
Description: The compact
Desk/1500 fits
easily on any
counter, with
options for
either a
mounted or
unmounted
terminal to suit
the available
desktop
space.
Featuring a
pocket-sized,
light weight and
robust design
the Link/2500
is the perfect
business
acceptance
point for mobile
solutions.
Designed for
retail usage, the
Lane/3000 is
featured
with a heavy-duty
magstripe and
smartcard
readers
optimized to
boost transaction
speeds. Its very
large
dedicated
contactless card
reader zone
speeds up
checkout times
for customers.
With its compact
and
robust design, it
integrates into
any retail
environment.
Conceived for
intensive retail
usage, the
Lane/5000
features a
durable
signature -
capacitive
screen, heavy-
duty magstripe
and smartcard
readers
optimized for
transaction
speed.
Color: Black Black Black Black
Dimensions: 7.08x3.26x1.69'' 5.07 x 2.75 x
0.67''
3.26’’ x 7.08’’ x
1.69 7.4’’ x 4.3’’ x
1.9’’
Weight: 8.95 oz 5.46 oz 8.89 oz 12.3 oz
Connector: • USB • USB Type C • USB
• Serial
• USB
• Serial
Additional
Feature:
Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
3. Terminals (Desktop)
Specification Ingenico Desk
3500
Ingenico Desk
5000
Picture:
Elavon Product
Code:
D350 D500
Brand/Model
Number:
Ingenico:
PCD30010305R
Ingenico:
DES500-
USELA04A
Description: Featuring intuitive
card readers and
applications
menu, it provides
a seamless
payment
experience.
The responsive
keypad improves
PIN entry
combined with the
advanced outer
casing make the
Desk/5000 very
robust, to suit with
the most
demanding
situations.
Color: Black Black
Dimensions: 7.3x2.6x3.2x2.6'' 7.3x2.6x3.2x2.6''
Weight: 12 oz 12 oz
Connector: • USB
• Serial
• USB
• Power Supply
Additional
Feature:
Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
4. Wireless Terminals
Specification Ingenico Move
5000 4G
Ingenico Move
5000 Bluetooth
Ingenico Move
4G & Bluetooth
with Charging
Base
Picture:
Elavon Product
Code:
M500U M500B M500BTP
Brand/Model
Number:
Ingenico:
PWB32011420R
Ingenico
PWB32011466R
Ingenico
Description: Designed for both
indoor and
outdoor use, the
Move/5000 4G is
the perfect
business
companion
for hospitality,
retail and small
merchants,
creating a
seamless mobile
shopping
experience.
Designed for both
indoor and
outdoor use, the
Move/5000
Bluetooth is the
perfect business
companion
for hospitality,
retail and small
merchants,
creating a
seamless mobile
shopping
experience.
Ingenico Move
5000 with
Charging Base.
Power supply and
Terminal.
Connectivity to
Bluetooth,
Ethernet, phone,
and 4G. Great for
an additional
charging area
where social
distancing is in
place.
Color: Black Black Black
Dimensions: 6.6x3.1x2.2" 6.6x3.1x2.2" 6.7x3.2 1 x 2.3”
Weight: 11 oz 11 oz 13oz
Connector: • USB
• Power Supply
• USB
• Power Supply
8. USB, IP,
Bluetooth,
& 4G
9. Power
Supply
Additional
Feature:
Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
5. Printers
Specification Star 300
Bluetooth
Star 230i
Bluetooth
Star 654 (USB) Star 143 (LAN)
Picture:
Elavon
Product Code:
SM300 SM230 SP364 SP143
Brand/Model
Number:
Star:
39634010-
SMT300I-
DB50
Star:
39632110-
SMS230I-
UB40
Star:
39449670-
TSP654IIU-24
Star: 39464910-
TSP143IIILAN
Description: Bluetooth
Receipt and
Label printer
with Auto-
Reconnect
A compact,
lightweight,
high-speed
two inch
Bluetooth
and USB
portable
printer.
Direct Thermal
Kiosk, Tablet
POS and
Traditional
POS Receipt
Printers.
Software-driven
thermal POS
receipt printer to
provide an immediate
plug & play application.
Color: Gray / Black Dark Gray Dark Gray or Ultra
White
Dimensions: 120 x 130.5 x
58.3 120 x
132.2 x 58.3
1.7 x 3.1 x
4.5”
142 x 203.5 x
132
142 x 204 x 132mm
Weight: 442g 7.65oz 1.60kg 1.68kg
Connector:
Additional
Feature:
Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
Exhibit F: Equipment and Software
1. EQUIPMENT & SOFTWARE
Each Authorized User is responsible for defining its equipment and software needs, desired operating objectives, and desired operating environment under this MSA.
Authorized Users will work with their designated Contractor to determine the appropriate equipment and software needs to meet their specific business and system requirements.
When purchasing or disposing of equipment, State Authorized Users must adhere to all applicable state laws, regulations, policies, best practices, and purchasing authority requirements, California Codes, Code of Regulations, State Administrative Manual, Management Memos, State Contracting Manual and Purchasing Authority Manual.
2. GENERAL STATEMENT OF WORK
Contractor shall provide all Point of Sale (POS) equipment and software as needed to implement new or upgrade current system in terms of functionality and technical architecture at the rates provided in Exhibit E.2: Equipment and Software Pricing. All references to software herein are to software provided by Contractor hereunder, and not to third party software acquired or used by an Authorized User. a. Newly Manufactured Goods
All purchased equipment, including components and accessories, under this MSA shall be newly manufactured equipment. Used or reconditioned equipment is prohibited except as a replacement provided at no cost and only after the one-year warranty period has expired.
b. POS Equipment Implementation Plans
Contractor staff will map, migrate, test and clean-up the essential data required for the POS System to function; complete training of Authorized User’s staff; and other tasks necessary for use of the POS System by the Authorized User. The Implementation Plan for the POS equipment will address discovery1, installation instructions, training, testing and certification.
Contractor shall coordinate with Authorized Users to develop an implementation schedule to determine that Authorized Users have all the appropriate supplies, space, and time required for the discovery, installation, training, and testing. c. Service Provider Back-end System Software
Contractor must successfully integrate the POS equipment between Authorized User’s internal system and their affected locations.
d. POS System Architecture Software Requirements
At no additional cost to the Authorized User, Contractor shall:
• Provide new versions, upgrades, modifications and enhancements of Software. • Make necessary modifications, adjustments, and repairs to keep the software operating without interruptions, to correct latent deficiencies with respect to the
1 Method used to clearly understand and document the technology, business issues, and resources required to successfully implement all or part of an electronic payment acceptance system.
Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
software specifications, and to comply with applicable federal laws and regulations.
Contractor must provide advanced written notice of scheduled interruptions or maintenance to Authorized Users and maintenance should occur during Authorized User’s non-business hours. The software must be available at a minimum of 99.9% of the time (excluding maintenance downtime).
• Provide software modifications for operation with the infrastructure for the term of the contract.
• Provide new versions of the software to keep the Authorized User abreast of the Contractor’s current software product. Notification of major software releases and a summary of system enhancements or revisions will be provided with new software releases. Documentation must describe, in a user-friendly manner, what the Authorized User needs to know to understand each level on which the software operates.
• Provide modifications and enhancements that (1) will be delivered installed or installable, on the Authorized User’s system, (2) must operate without program interruptions and (3) must provide the functions as required by the specifications and as described by documentation supplied by the Contractor. e. POS Equipment Authentication Software
The Contractor shall provide the software necessary for authentication and initialization so that the device is recognized by the Authorized User’s system. The software must be pre-loaded to the device, allowing the device to initialize to the back end.
f. Integrated Front-end POS System Work Stations
• The Contractor shall develop an Integrated Front-end POS System Work Stations and Peripherals plan that documents interchangeability, re-configuration of latest revisions or versions, and delivery requirements for spares. • All equipment and software shall be configured to the latest revision or version. • All equipment and software shall be interchangeable with their corresponding device.
g. POS Replacement Plan
The Contractor shall work with Authorized Users to develop a Scheduled Replacement Plan that documents what equipment gets replaced, when it gets replaced, the logistics of removal and installation, and the required testing. After initial warranty period, under the scheduled replacement plan, Authorized Users shall have the option of replacing equipment with an identical unit at the lower of the market price at time of replacement or with a compatible yet more capable unit at the current market price, if such a unit exists. The cost of replacement after initial warranty period and after the equipment meets the minimum service life, shall be borne by the Authorized User under a scheduled replacement plan.
h. Maintenance and Repair Support
The Contractor must provide maintenance and repair support twenty-four (24) hours per day, 365 days per year to assist the Authorized User in optimizing its POS equipment. The Contractor shall provide a wide range of services from telephone to on-site support, equipment exchange according to the Authorized User’s equipment type, and enable efficient problem resolution with experienced on-site and remote technical support. On-site technical support is dependent upon the Authorized User’s Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
Subsidiary Agreement and upon mutual agreement between the Authorized User and Contractor.
The Contractor shall have repair policies and procedures in place to prevent illegal activity during the repair process. All parts, equipment, and firmware must be up-to- date and readily available. In addition, only authorized components may be used. i. Warranty
The Contractor (not the manufacturer) shall provide a one-year warranty for all equipment/software newly purchased from the Contractor. The Contractor’s obligation shall be to repair or replace the defective product during the warranty period at no charge to the Authorized User. The cost of replaced devices during the one-year warranty period shall be borne by the Contractor. Such repair or replacement will be rendered by the Contractor or by one of its authorized repair depots. Cost for shipment of said products to the Contractor shall be paid by the Contractor. The Contractor will then ship the repaired/replaced product to the Authorized User, at no cost to the Authorized User. Repaired products will be warranted for the remainder of the original one-year warranty period from the date of original retail purchase. Equipment replaced with new equipment will start a new one-year warranty period at the time of installation.
The Contractor may replace the defective product (or any part thereof) with any product that is substantially equivalent (or superior) in all material respects to the defective product.
j. Exchange Services
The Contractor will provide exchange support Monday through Friday from 8:00 a.m. through 5:00 p.m. PST. Contractor will ship replacement the same day support call is received and schedule next day delivery to the Authorized User. If call is received after 3:00 p.m. PST, replacement is shipped the following business day. Shipping and return of equipment shall be provided at no additional cost to the Authorized User. k. Delivery
All prices offered shall be F.O.B. destination, freight prepaid by the Contractor, to the ordering agency’s final receiving point. Responsibility and liability for loss or damage for all orders shall remain with the Contractor until final inspection and acceptance, when all responsibility shall pass to the ordering agency, except the responsibility for latent defects, fraud, and the warranty obligations.
Deliveries are to be made to the location specified on the individual order, which may include but is not limited to, inside buildings, high-rise office buildings, and receiving docks.
Delivery of ordered product shall be completed within thirty (30) calendar days (or sooner) after receipt of an order, unless otherwise agreed to by the ordering agency.
Since receiving hours for each ordering agency will vary by facility, it will be the Contractor’s responsibility to check with each facility for their specific delivery hours before delivery occurs.
Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
The Contractor must notify the ordering agency within forty-eight (48) hours of scheduled delivery time if delivery cannot be made within the time frame specified on the order.
3. SECURITY STANDARDS
All equipment and software must meet the following security standards as applicable: PCI Compliance, POS Compliance Security, P2PE certified, POS Physical Security, POS Decommissioning Security, and POS Deployment, Repair and Tracking Security. a. POS Compliance Security
• The Contractor shall adhere to applicable PCI standards and procedures to ensure the following:
• The POS device has been tested and it is an approved Tamper-Resistant Security Module (TRSM) (approved as a TRSM by the network or PCI standards company). • The device has been inspected for tampering before the encryption keys are injected.
• At a minimum a D
U K P T or Triple D E S key that was created under the principles of dual control and split knowledge has been injected into the device before Personal Identification Numbers (PINs) are entered. (Dual Control means that at least two authorized individuals are required to work in partnership to carry out an activity, such as generating, storing, or loading the clear text components of a key. Split Knowledge means that no single individual knows, or has access to, a whole entity, be it all the clear-text components of a key, or the combination of a safe where key components are stored.) Asymmetric cryptography is recommended. • Each device will have unique keys.
b. POS Physical Security
Contractors shall adhere to security measures during storage, servicing and shipping to ensure that the POS machine is properly managed and protected in a way that addresses and manages risks of attacks against it. These security measures manage and protect against theft and illegal modification. These measures shall also protect the cardholder’s PIN entry privacy. POS devices should be inventoried and placed in secured, locked and monitored areas.
c. POS Deployment, Repair and Tracking Security
The Contractor shall ensure that applicable PCI standards and procedures will cover terminal inventory and tracking controls during all phases of its lifecycle:
• the manufacturing phase; while in transit and testing; the key injection process and the installation commissioning process; operation (Authorized User phase); and • when offline - storage, repair or inactivity periods. d. POS Decommissioning Security
Contractor shall provide training and technical support to enable Authorized Users to “Zero” POS devices due for decommissioning, if such decommissioning is possible with the equipment chosen. Decommissioned POS devices have their cryptographic keys safely removed when the terminal is de-installed and the device is then “zeroized” with no remaining encryption keys or data contained within them. Certain equipment may need to be returned to Contractor for decommissioning at the Authorized User’s cost.
Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
4. OTHER PROVISIONS
a. Buy Back Program
The Contractor shall offer Authorized Users a large-scale buyback and upgrade program, providing for the return marketable equipment towards purchase discounts or upgrade to newer technology, on a case-by-case basis.
b. Recycling
Contractor will issue call tags for returned and/or swapped equipment for the State.
Equipment will be returned to Contractor’s designated facility at the cost of the contractor and will be processed pursuant to the recycle/disposal laws applicable to the location of the Contractor’s facility.
c. Equipment Recall
Contractor will notify Authorized Users if a purchased item is affected by a product recall. Contractor will provide instructions on how to return or replace the equipment at no additional cost to the Authorized User.
d. Substitutions
Substitution of contracted deliverables require advanced written consent of the Authorized User.
e. Inspection
All deliverables may be subject to final inspection, test and acceptance by the Authorized User at destination, notwithstanding any payment or inspection at source. f. Damaged and Defective Items
Contractor will provide credit and/or replacement for freight-damaged or defective items at no charge within forty-eight (48) business hours, or as agreed upon by Authorized User, after the Authorized User provides notification. This also includes incorrect products shipped or an order entry error by the Contractor’s customer service representative. The Contractor cannot require the Authorized User to deal directly with the manufacturer. Additionally, the Contractor shall provide the Authorized User with a prepaid and self-addressed label for the return of the item.
Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
Exhibit G: Definitions
Term Definition
1. Adjustments A debit or credit to a Cardholder or Authorized User account to correct a transaction error.
2. Affiliate Any entity that controls, is controlled by, or is under common control of a party, including its subsidiaries.
3. Agreement The Master Service Agreement (“MSA”) which includes the Std. 213 form, all Exhibits and all mutually agreed upon
amendments thereto.
4. Associations or
Payment Networks
Any:
(a) Credit Card Association (defined as (i) Visa.; (ii) MasterCard; (iii) American Express;
(iv) Discover Network; and any successor organization or association to any of the foregoing);
(b) E F T Network (defined as (i) Interlink Network Inc., Maestro U.S.A., Inc., STAR Networks, Inc., NYCE
Payments Network, LLC, PULSE Network LLC,
ACCEL/Exchange Network, Alaska Option Services
Corporation, Armed Forces Financial Network, Credit
Union 24, Inc., NETS, Inc., and SHAZAM, Inc.; and any
successor organization or association to any of the
foregoing);
(c) ECS Association (defined as Visa (in its operation of the Visa POS Check Service),
N A C H A and any regional ACH association or network,
the Federal Reserve (in its processing of ACH entries or Demand Drafts or other legal replacements or substitutes for a Paper Check, including under the Check Clearing
for the 21st Century Act or under applicable provisions of the Uniform Commercial Code; and any successor
organization or association to any of the foregoing)
5. Association Rules or
Payment Networks
Rules (or Payment
Network Regulations)
The rules, regulations, releases, interpretations and other requirements (whether contractual or otherwise) imposed or adopted by Associations designated in this Agreement.
6. Authorization The process by which the Authorized User requests approval of a transaction from the issuer by electronically accessing Contractor’s computerized system, unless such system is inoperable or otherwise not accessible, in which case the Authorized User shall utilize the designated toll-free telephone number, to obtain credit approval from the Card issuing bank before completion of the Card transaction.
7. Authorized User (i) State of California government agencies that participate in this MSA (“State Authorized Users”), and (ii) Local government agencies that participate in this MSA (“Local Authorized Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
Term Definition
Users”), as further defined in Exhibit A, Section 1 or 12 of the MSA.
8. Authorized User
Resources
All equipment, communications devices, databases, services, systems and other resources that Authorized User maintains or operates in Authorized User’s or its third party hosting provider’s locations and which enable Authorized User to access and use the Services.
9. Automated Clearing
House (ACH)
The funds transfer system governed by the rules of NACHA.
ACH allows financial institutions to clear interbank entries electronically.
10. Bank An institution offering financial services, such as the safekeeping of money, conversion of domestic into and from foreign currencies, lending of money at interest, and
acceptance of bills of exchange.
11. Bankruptcy
Proceeding
With respect to an entity, (i) that the entity or any subsidiary of such entity will: (a) commence a voluntary case under the Bankruptcy Code of 1978, as amended, or other federal
bankruptcy laws (as now or hereafter in effect); (b) file or be subject to a petition seeking to take advantage of any other applicable state or federal laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding up or
composition or adjustment of debts or any other similar conservatorship or receivership proceeding instituted or administered by any regulatory agency or body; (c) consent to or fail to contest, in a timely and appropriate manner, any petition filed against it in an involuntary case under such bankruptcy laws or other applicable laws; (d) apply for or consent to, or fail to contest in a timely and appropriate manner, the appointment of, or the taking of possession by, a trustee, receiver, custodian, liquidator, or similar entity of such entity or of all or any substantial part of its assets, domestic or foreign; (e) admit in writing its inability to pay its debts as they become due; (f) make a general assignment for the benefit of creditors; (g) make a conveyance fraudulent as to creditors under any applicable state or federal laws; or (h) take any action for the purpose of effecting any of the foregoing; or (ii) that a case or other proceeding will be commenced against the entity or any subsidiary of such entity in any court of competent jurisdiction, or through any regulatory agency or body, seeking: (x) relief under the Bankruptcy Code of 1978, as amended, or other federal bankruptcy laws (as now or hereafter in effect) or under any other applicable laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding up or
composition, or adjustment of debts; or (y) the appointment of a trustee, receiver, custodian, liquidator or the like of such entity or of all or any substantial part of the assets, domestic or foreign, of such entity or any other similar conservatorship or Department of General Services
Electronic Payment Acceptance Services (EPAY)
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Term Definition
receivership proceeding instituted or administered by any regulatory agency or body.
12. Batch A grouping of transactions captured by the Authorized User and submitted to their Acquirer for settlement and funding. A batch is usually an entire day’s activity.
13. Business Day A day (other than Saturday or Sunday) on which Banks are generally open for business.
14. Cancels When an Authorized User stops a transaction before the transaction has been sent to the processor through a
settlement.
15. Card Brands (i) Visa; (ii) Mastercard; (iii) American Express Travel Related Services Company, Inc.; (iv) Discover Network; (v) Diners Club International Ltd.; (vi) JCB International Co., Ltd.; (vii) China UnionPay Co., Ltd; and (viii) any other organization or association that hereafter contracts with Contractor to authorize, capture, and settle Transactions effected with Credit Cards issued or sponsored by such organization or association, and any successor organization or association to any of the foregoing.
16. Card Not Present The processing environment where the Payment Device is not physically presented to Authorized User by the Cardholder as the form of payment at the time of the Transaction.
17. Card or Payment
Device
As any device or method used for the purpose of obtaining credit or debiting a designated account including a credit card (associated with a revolving line of credit), debit card (associated with an electronic debit to the Cardholder’s account), and any other financial transaction device or method, including an Electronic Gift Card (special stored value card), check (whether converted into electronic form or used as a source document for an electronic fund transfer), electronic benefits transfer card, stored value card, “smart” card, or other device created to be used for the purpose of obtaining credit or debiting a designated account, that is now or hereafter effected through Charges with Authorized Users.
18. Cardholder The individual whose name appears on the Card or in whose name a Card has been issued, and any person who purports to be an authorized user of such Card.
19. Cardholder Data The meaning is stated in the Payment Card Industry (PCI) Data Security Standard (DSS) and Payment Application Data
Security Standard (PA-DSS) Glossary of Terms, Abbreviations, and Acronyms.
20. Charge See Transaction definition.
21. Chargeback The procedure by which the funds from a Sales Draft or other indicia of a Card transaction (or disputed portion thereof) are returned to the cardholder by the issuing bank. The Payment Network will debit the Servicers the chargeback amount to Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
Term Definition
make the issuer whole. The Servicers in turn will recoup the chargeback amount from the Authorized User.
22. Contractor Elavon, or its affiliates providing services hereunder.
23. Convenience Fee A fee assessed to the Cardholder for an added convenience of the use of a payment card in a transaction in accordance with the Payment Networks Rules.
24. Credit Card A card or device bearing the symbol of any Card Brand and associated with a revolving line of credit that can be used to purchase goods and services from Authorized User or to pay an amount due to Authorized User.
25. Credit Voucher The evidence of a refund or price adjustment by the State or Authorized User to a Cardholder's Card account in connection with a prior purchase by such Cardholder using a Card,
regardless of whether the form of such evidence is in paper, electronic, or otherwise.
26. Customer A client of Authorized User who elects to conduct a payment Transaction with Authorized User through presentation of a Payment Device (including a Cardholder).
27. Data Breach Unauthorized access to, use, disclosure or exfiltration of any Cardholder Data or Transaction Information provided by
Authorized User and received by Contractor in connection with Authorized User’s use of the Services under the Agreement.
28. Debit Card A card or device bearing the symbols of one or more EFT Networks or Card Brands, which may be used to purchase
goods and services from Authorized User or to pay an amount due to Authorized User by an electronic debit to the
Cardholder’s designated deposit account. A “Debit Card” includes (i) a card or device that bears the symbol of a Card Brand and may be used to conduct signature-based, offline debit Transactions; and (ii) a card or device that bears the symbol of an EFT Network and can be used to conduct PIN- based, online debit Transactions.
29. Demand Deposit
Account (DDA)
The commercial checking account at an ACH participating financial institution designated by Authorized User to facilitate payment for Transactions, Chargebacks, returns, adjustments, fees, fines, penalties, assessments and charges from the Payment Networks, and other payments due under the
Agreement.
30. Discover DFS Services LLC
31. Discover Network The payment network operated and maintained by Discover.
32. EFT Networks (i) Interlink Network Inc., Maestro U.S.A., Inc., STAR Networks, Inc., NYCE Payments Network, LLC, PULSE Network LLC,
ACCEL/Exchange Network, Alaska Option Services
Corporation, Armed Forces Financial Network, Credit Union 24, Inc., NETS, Inc., and SHAZAM, Inc.; and (ii) any other
organization or association that hereafter authorizes Contractor Department of General Services
Electronic Payment Acceptance Services (EPAY)
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Term Definition
or a third party designated by Authorized User to authorize, capture, and settle Transactions effected with Debit Cards, and any successor organization or association to any of the foregoing.
33. Elavon Data Breach A Data Breach that (i) originated within data operating systems controlled by Elavon, (ii) occurred due to a breach of the Agreement by Elavon, (iii) was not attributable to any act or omission of Authorized User or its Service Providers, and (iv) does not relate to any Authorized User provided data in user defined fields not required by Elavon or used to perform the Services.
34. Elavon Materials The specifications, documentation, application programing interfaces (APIs) and other interfaces, nonpublic or proprietary data import routines, sample code and materials provided to Authorized User to enable Authorized User to perform its obligations or exercise its rights under the Agreement, including integration to the Services.
35. Electronic Gift Card
(EGC)
A special stored value card provided by or on behalf of Authorized User that is redeemable for merchandise, services or other Transactions.
36. Equipment Purchased Equipment and other devices, equipment and hardware provided to Authorized User under the Agreement.
37. Excessive Activity The occurrence, during any monthly period, of Chargebacks or Retrieval Requests in excess of 1% of the gross dollar amount of Authorized User’s Transactions or returns in excess of 2.5% of the gross dollar amount of Authorized User’s Transactions.
38. Gateway The transfer of information between a payment portal (such as a website, mobile phone or interactive voice response service) and the Front-End Processor or acquiring bank.
39. Gateway Services The hosted gateway services provided by Contractor, as further described in the Operating Guide.
40. Government/Public
Institution Service
Fees (GPISF)
The fee charged by Elavon or Authorized User, at Authorized User’s election, to Customers conducting Eligible Transactions (as defined in the Operating Guide) where Authorized User is operating in an eligible MCC. GPISF include fees referred to as a “service fee”, where the fee is processed as a separate Transaction from the underlying purchase or payment
Transaction.
41. Intellectual Property
Rights
Worldwide patents, trade secrets, copyrights, trademarks, service marks, trade names, and all other intellectual property rights and proprietary rights, including all rights or causes of action for infringement or misappropriation of any of the foregoing.
42. Issuer The financial institution or other entity that issued the Credit Card or Debit Card to the Cardholder.
Department of General Services
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Term Definition
43. Laws All applicable local, state, and federal statutes, regulations, ordinances, rules, and other binding law in effect from time to time.
44. Local Governmental
Agency
Any city and/or county, district, or other local governmental body or corporation, including the California State Universities (CSU) and University of California (UC) systems, K-12 schools and community colleges empowered to expend public funds).
45. Marks Names, logos, service marks, trademarks, trade names, taglines, or other proprietary designations belonging to the Associations.
46. Mastercard MasterCard International Incorporated
47. Operating Guide Contractor’s Operating Guide (formerly the “Merchant Operating Guide” or “MOG”), located at www.mypaymentsinsider.com and https://www.merchantconnect.com/CWRWeb/pdf/MOG_Eng.pdf
(or such other website that Contractor may specify), that prescribes rules and procedures governing Transactions and Authorized User’s use of the Services.
48. Payment Device Any device or method used for the purpose of obtaining credit or debiting a designated account including a Credit Card, Debit Card, and any other financial transaction device or method to be used for the purpose of obtaining credit or debiting a designated account.
49. Payment Gateway See Gateway definition.
50. Payment Network Any Card Brand, EFT Network, ECS Association or automated clearing house association, governmental agency or authority, and any other entity or association that issues or sponsors a Payment Device or PayPal Payment Device (as defined in the Operating Guide) or operates a network on which a Payment Device is processed.
51. Payment Network
Regulations
See Association Rules or Payment Networks Rules (or
Payment Network Regulations) definition.
52. PCI-DSS The Payment Card Industry Data Security Standards.
53. Point to point
encryption (P2PE)
A solution that allows enterprises to create secure
communication links between devices or components within those devices that prevent intermediate devices from having exposure to sensitive information that is transiting the network.
54. POS Device A terminal, software or other point-of-sale device at an Authorized User location that conforms to the requirements established from time to time by Contractor and the applicable Payment Network.
55. Processing Services Services other than Gateway Services.
56. Purchased Equipment The devices, equipment and hardware purchased by Authorized User from Contractor under the terms of the
Agreement.
Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
Term Definition
57. Retrieval A request that occurs when a Cardholder requests more information about a transaction or a legible copy of the signed Sales Draft or Transaction Receipt.
58. Return or Reversal A financial transaction used to negate or cancel a transaction.
59. Sales Draft or
Transaction Receipt
Evidence of a purchase of goods or services by a Cardholder from the Authorized User using a Card, regardless of whether the form of such evidence is in paper, electronic or otherwise, all of which must conform to Association Rules.
60. Security Programs The PCI-DSS, including the Cardholder Information Security Program (CISP) of Visa, the Site Data Protection Program (SDP) of Mastercard, the Data Security DISC Program and the PCI-DSS regulations of Discover Network, and the security programs of any other Payment Network, and any modifications to, or replacements of, such programs that may occur from time to time.
61. Service Provider Any entity that stores, processes, transmits or accesses Cardholder Data or Transaction Information on behalf of Authorized User or that provides software to Authorized User for transaction processing, storage, or transmission, except to the extent such services are performed by the entity in its capacity as a third-party contractor of Contractor performing Contractor’s obligations under the Agreement. Contractor third- party contractors are not Service Providers.
62. Services The services Contractor provides to Authorized User pursuant to the Agreement.
63. Settlement The process of submitting transactions to a Contractor for processing, and the subsequent transferring funds for sales and credits between Contractors and Issuers, including the final debiting of a Cardholder's account and crediting an Authorized User’s account.
64. Settlement Account or
ZBA or DDA
An account at a financial institution designated by the Authorized User as the account to be credited by Servicers for Card transactions, and other amounts due hereunder.
65. Servicers Collectively Contractor and Bank.
66. State Governmental
Agency
Any State of California governmental agency, department, bureau, board or commission within the Executive and Non- Executive Branches of California State Government.
• State Judicial Branch: Justices, officers, and employees of the Supreme Court of California, the Courts of Appeal, the Judicial Council of California and the State BAR of
California.
• State Legislative Branch: Members of the State Senate, Members of the State Assembly, and Legislative staff
members.
67. Subsidiary Agreement The Authorized User’s duly executed Std. 213, or appropriate equivalent contract form for Local Authorized Users, and any Department of General Services
Electronic Payment Acceptance Services (EPAY)
Agreement Number 5-22-70-22-01
Term Definition
attachments or amendments thereto, describing the selected MSA services and any particular requirements of the Authorized User.
68. Substitutions The action of replacing something with another thing.
69. Transaction Any action between Authorized User and a Cardholder or Payment Network that results in transmission of Cardholder Data or Transaction Information (e.g. payment, purchase, refund, return, chargeback, authorization request, settlement submission, transaction inquiry, decryption, conversion to and from tokens).
70. Transaction
Information
Any data or information resulting from a Transaction.
Transaction Information includes payment processing-related transactional information that may be collected or stored by Contractor, including the price paid for products or services, date, time, approval, unique transaction number, store identifier, and Customer bank information relating to a Transaction.
71. United States The United States of America.
72. Updates All updates, revisions, patches, fixes, new releases, and other improvements or changes to any Services provided to
Authorized User under the Agreement.
73. Users Authorized User’s employees or contractors designated by Authorized User to access and use the Services.
74. Visa Visa U.S.A., Inc.
75. Voids A transaction that is canceled after it has been authorized but before it has been settled.
Department of General Services
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Exhibit H: Special Terms and Conditions
1. SERVICES AGREEMENT
The Agreement governs Authorized User’s receipt and use of the Services selected by Authorized Users in the Subsidiary Agreement or Set Up Form.
2. OPERATING GUIDE
In addition to the terms of the Agreement, Authorized User will comply with the Operating Guide (https://www.merchantconnect.com/CWRWeb/pdf/MOG_Eng.pdf) applicable to each selected Service. Contractor may change the Operating Guide by providing the State’s Contract Administrator with at least thirty (30) days prior written notice of the change. However, in the event of changes in the Association Rules or due to security reasons, certain changes in Card procedures may become effective on shorter notice. If Contractor changes their Operating Guide during the term of the Agreement, and such changes are not mandated by an Association or governing body of rules or guidelines, the change will be subject to review and approval by the State and Authorized User within sixty (60) days of receipt of change notice. Failure of the State or Authorized Users to object, and continuation of Card acceptance hereunder, will constitute the State’s and Authorized Users’ acceptance of the new Operating Guide.
The State and/or any Authorized User may provide notice to terminate for convenience as provided in Exhibit A, Section 28, if any changes to Operating Guide and/or Association Rules are unacceptable. While it is intended that the Operating Guide will supplement this Exhibit H, if there is any conflict between the terms of this Agreement and the Operating Guide, the terms of this Agreement will govern.
Terms in the Operating Guide which conflict with this Agreement, California laws, and regulations will not apply. Furthermore, the State and Authorized Users shall not be bound by any terms and conditions in the Operating Guide or “click-through” terms and conditions that provide for (i) arbitration, (ii) the indemnification of any party, (iii) the governing law or venue requirements, (iv) the waiver of any applicable statute of limitations period, (v) that incorporate any terms or conditions by reference, or (vi) any term or condition that conflicts with the terms and conditions of this Agreement.
3. AUTHORIZED USER AFFILIATES
Authorized User Affiliates may use the Services so long as they comply with all restrictions, obligations, and requirements imposed on Authorized Users.
4. TERMINATION
a. Right to Terminate:
Contractor has the right to send the Authorized User a notice specifying the default in the following sections (i) - (iv) and providing the Authorized User an opportunity to cure the breach within a period of time no less than thirty (30) days (Cure Period). If the breach is not cured within the Cure Period, then Contractor has the right to terminate the Subsidiary Agreement by notice to the Authorized User, with termination to be effective no less than thirty (30) days following the end of the Cure Period.
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i. Excessive Activity;
ii. The acceptance of Card Not Present or Convenience Fee Transactions without inclusion in the Subsidiary Agreement or an amendment to the Subsidiary Agreement;
iii. Authorized User has failed to pay Contractor an undisputed amount owed to Contractor under the Subsidiary Agreement (in which case, the Cure Period shall be extended to sixty (60) days);
iv. Authorized User failed to perform a material obligation under the Agreement. b. Contractor may terminate the Subsidiary Agreement immediately in writing if any of the following occur:
i. The levy, garnishment or attachment of the DDA, or any of Local Authorized User’s property in Contractor’s possession;
ii. Any change, not approved by Contractor, that constitutes a material change in the types of goods or services Contractor sells or in the methods by which Contractor sells them, or any change that results in Authorized User’s violation of Contractor’s underwriting policy;
iii. Any Payment Network or application of Payment Network Regulations requires Contractor to terminate the Agreement or cease processing Transactions for an Authorized User;
iv. Assignment of the Subsidiary Agreement without Contractor’s written consent; v. The commencement of a Bankruptcy Proceeding by or against the Authorized User;
vi. Any representation by the Authorized User in Exhibit H, Section 12 is false or misleading in any material respect as of the date made or becomes false or misleading in any material respect at any time during the Term of the Subsidiary Agreement.
vii. The occurrence of a Data Incident as described in Exhibit H, Section 16(e).
5. ACCOUNT CLOSING
a. Authorized User acknowledges that closing Authorized User’s account with Contractor may take up to thirty (30) calendar days following Contractor’s receipt of written notice of account closing.
b. All obligations of a party regarding Transactions serviced prior to termination will survive termination.
6. USERS; ACCESS; SECURITY OF PASSWORDS AND USER IDs
a. Authorized User will be responsible for the distribution of all passwords and user IDs issued to any User and for maintaining the confidentiality and security of User’s passwords and user IDs. Authorized User will ensure that the access granted to each User to the Services is limited to only the access and information necessary for the User to perform his or her job functions on behalf of Authorized User. Authorized User will ensure that all Users will be trained and qualified to access and use the Services in accordance with the terms of the Agreement and the Operating Guide.
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Authorized User is responsible for its Users’ compliance with the terms of the Agreement, the Operating Guide, and for all use of any user ID and password other than by Contractor or Contractor’s third-party contractors or use by third-parties of user IDs and passwords obtained by such third parties from Contractor or Contractor’s third-party contractors.
b. Authorized User will not, and will ensure that its Users do not:
i. Access or use the Services for any purposes other than for its own internal business purposes (except as authorized by Contractor) as disclosed to Contractor in writing;
ii. modify, reverse engineer, disassemble or decompile any part of the Services or Elavon Materials;
iii. knowingly transmit any data that contains software viruses, time bombs, worms, Trojan horses, spyware, disabling devices, malicious code, or other harmful or deleterious computer code, files or programs to or through the Services; provided, that Authorized User will use commercially reasonable measures (at least industry standard) to screen for the foregoing;
iv. interfere with or disrupt the servers or networks connected to or providing the Services;
v. remove, change or obliterate the copyright, trademark or other proprietary protection legends or notices that appear in connection with access to and use of the Services or any Elavon Materials; or
vi. re-sell, republish, download, frame or transmit the Services or Elavon Materials, including in order to act as a consultant for any third party or, unless otherwise permitted under the Agreement, as a service bureau, outsourcing or application service provider for any third parties, or otherwise allow any third party to use or access the Services.
c. Authorized User is responsible for changing the user IDs and passwords of its Users if it believes that any of those user IDs or passwords have been stolen or might otherwise be misused and for disabling any User’s IDs and passwords promptly upon the termination of employment of such User or the cessation of such User’s need to access the Services. Authorized User will promptly notify Contractor if Authorized User believes the Services or Contractor’s databases have been compromised by use of a user ID or password associated with the Services.
7. FEES
a. Compensation: Authorized User will compensate Contractor for all fees and other amounts due for the Services and Equipment in accordance with the Contract Exhibits B and E.
b. Other Amount Owed: To the extent not prohibited by law, Authorized User will be responsible for any fines, penalties, assessments, or charges by the Payment Networks (including all fines, penalties, assessments, or charges by the Payment Networks as a result of an Authorized User’s violation of Payment Network Regulations), attributable to the Agreement (other than those directly attributable to Contractor’s acts or omissions).
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c. Taxes: If a Local Authorized User is a tax-exempt entity, Local Authorized User will provide Contractor with an appropriate certificate of tax exemption. If no certificate is provided, the Local Authorized User will pay all taxes and other charges imposed by any governmental authority on the Services and Equipment provided under the Agreement.
d. Demand Deposit Account: Authorized User will establish and maintain one (1) or more DDAs to facilitate payment to Contractor in accordance with Exhibit B, Section
1. Contractor has the right to rely on written instructions submitted by Authorized User requesting changes to the DDA. If Authorized User changes the DDA, the ACH authorizations established under this Subsidiary Agreement will apply to the new account, and Authorized User will provide Contractor such information regarding the new DDA as Contractor deems necessary to effect debits from or credits to the DDA as provided under the Subsidiary Agreement. It may take Contractor up to ten (10) business days after Contractor’s receipt of a written notice from Authorized User to reflect in Contractor’s system any change to Authorized User’s DDA.
8. MODIFICATIONS AND DISCONTINUANCE OF SERVICES
Contractor may modify the Services or particular components of the Services from time to time and will use commercially reasonable efforts to notify Authorized User of any material modifications. If Contractor ceases to make a Service selected by Authorized User generally available to its merchant customers (a “Discontinued Service”), Contractor may cease providing such Discontinued Service to Authorized User upon one hundred eighty (180) days’ advance written notice. Contractor will negotiate an amendment to the MSA to incorporate the modification or discontinuance of services. If new terms that materially conflict with or supplement existing terms are necessary for operation, Contractor will deliver such new terms to the State to negotiate an amendment to the MSA incorporating said terms.
9. COMPLIANCE WITH LAWS AND PAYMENT NETWORK REGULATIONS a. General: Contractor and Authorized User will comply with all Laws and Payment Network Regulations applicable to the selected Services. b. Office of Foreign Assets Control Compliance: Authorized User acknowledges that Contractor is an entity governed by the Laws of the United States of America and as such, cannot provide any products or services to Authorized User or its Customers that contravene the Laws of the United States of America, including the Laws promulgated by OFAC or the United States Department of the Treasury or any successor thereto.
c. Export Laws Compliance: Authorized User will comply with all United States export Laws governing the export and re-export of hardware, software or technology applicable to the Services and Equipment, including United States Department of State International Traffic In Arms Regulations (ITAR), United States Foreign Corrupt Practices Act, United States Commerce Department’s Export Administration Regulations, OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and Laws promulgated by OFAC or the United States Department of the Treasury or any successor thereto. Authorized User will not, and will not request Contractor to, export, directly or indirectly, any technical data pursuant to the Subsidiary Agreement or any product using any such data to any country for which the United States Government or any agency thereof at the time of Department of General Services
Electronic Payment Acceptance Services (EPAY)
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export requires an export license or other governmental approval without first obtaining such license or approval.
d. Customer Identification: To help the United States Government fight the funding of terrorism and money laundering activities, federal law requires financial institutions and their affiliates to obtain, verify, and record information that identifies each person who opens an account. Accordingly, Authorized User will provide certain information and identifying documents requested by Contractor to allow Contractor to identify Authorized User.
10. CONFIDENTIALITY; DATA SECURITY AND USE
a. Data Security and Use:
i. Security Programs Compliance: Contractor and Authorized User will each comply with the applicable requirements of the Security Programs. ii. PCI-DSS Attestation: Authorized User may review Contractor’s current PCI-DSS compliance status on the Payment Network websites as available. Contractor will undergo an annual assessment of its compliance with the Security Programs and, if applicable to the Services provided under the Agreement, the Payment Application Data Security Standards. If Authorized User requires additional information, Contractor will work with Authorized User to provide information as mutually agreed to by both parties.
iii. Elavon Data Breach: If an Elavon Data Breach occurs, then Contractor will comply with all Laws and Payment Network Regulations with respect to such Elavon Data Breach, including providing the required reporting and forensic audits to the Payment Networks, and, unless prohibited by law enforcement or the Payment Networks, will inform Authorized User of such Elavon Data Breach.
Contractor will not pass-through or require Authorized User to be liable to Contractor for any fees, fines, penalties, assessments, or charges levied against Contractor by the Payment Networks in connection with an Elavon Data Breach.
Unless otherwise required or directed under Law, the Payment Network Regulations, or a Payment Network, Contractor will not (i) contact or inform any Customer of whose data may have been the subject of an Elavon Data Breach of the occurrence of the Elavon Data Breach, or (ii) publicly disclose that information provided by Authorized User to Contractor was the subject in any part of an Elavon Data Breach. If Contractor is legally obligated or the Payment Network Regulations or Payment Networks require Contractor to contact Customers as part of an Elavon Data Breach, Contractor will limit the notices to such Customers to those required by the legal obligation, the Payment Network Regulations, or the Payment Networks, or as approved by Authorized User.
iv. Cardholder Data and Transaction Information:
a) Contractor and Authorized User will ensure the security of Cardholder Data and Transaction Information in accordance with all Laws and Payment Network Regulations. Contractor and Authorized User will retain Cardholder Data and Transaction Information for the duration required by Laws and the Payment Network Regulations and thereafter will destroy, in a manner that will render the information unreadable, all such information that is no longer necessary or appropriate to maintain for ordinary business purposes.
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b) Authorized User will not disclose Cardholder Data to any third party, except to a Service Provider, unless required by Laws or the Payment Network Regulations. Authorized User will not retain or store magnetic stripe or CVV2/CVC2/CID data after authorization for any purpose. After authorization, Authorized User will retain only the Customer account number, name, and card expiration date if Authorized User has a reasonable business purpose to retain such information and is otherwise in compliance with the Agreement. If there is a failure or other suspension of Authorized User’s business operations, including any Bankruptcy Proceeding, Authorized User will not sell, transfer, or disclose Cardholder Data to third parties, and Authorized User will (a) return this information to Contractor, or (b) provide acceptable proof of destruction of this information to Contractor.
c) Contractor acknowledges that Authorized User may collect information about Authorized User’s Customers as part of an Authorized User sales transaction (e.g., price paid, time, store identifier, SKU information) regardless of the Customer’s payment type and not in connection with the Services, and that the Agreement does not restrict Authorized User’s retention, use or disclosure of such information even though some of that information may overlap with elements of Transaction Information.
d) Unless otherwise prohibited by Law, any applicable regulations, Payment Network Regulations, Payment Networks, or PCI DSS, Cardholder Data, Transaction Information, and information regarding Authorized User, its principals, or Affiliates, or that Contractor otherwise obtains in connection with the Agreement may be:
1) Used by Contractor and its Affiliates, third-party contractors, agents, and referral partners (a) to provide the Services and related functions to Authorized User and to respond to any further application for Services, (b) for administrative purposes and to maintain Authorized User’s account pursuant to the Agreement, and (c) for Contractor’s internal fraud and compliance monitoring;
2) Disclosed and shared by Contractor for reporting purposes to credit rating agencies and to the financial institution where the DDA is maintained; 3) Used to enhance or improve Contractor’s products or services generally; 4) Used or disclosed by Contractor in the course of any sale, reorganization or other change to Contractor’s business, subject to appropriate confidentiality agreements;
5) Collected, used and disclosed by Contractor as required by Laws (e.g., for tax reporting or in response to a subpoena); and
6) Retained for such periods of time as Contractor requires to perform its obligations and exercise its rights under the Agreement.
Contractor may prepare, use, and share with third parties, aggregated, non- personally identifiable information derived from Transaction Information (so long as such information cannot be identified to Authorized User) that is Department of General Services
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