Thank you for your IAMS Merchant Services Application. Please review and confirm the contract by replying to this e-mail after entering the information immediately below into the spaces indicated by the [****] groups. ----------------START CONTRACT-------------- I have reviewed and agree to the contract terms and conditions set out below. [****]name, [****]company if applicable, [****]position or job title, IAMS CONTRACT READ AND AGREED TO ON [****]date, IAMS CONTRACT BETWEEN #session.name#, IAMS Applicant (Applicant) and ImagineNation Inc (Company). SENT VIA E-MAIL ON #DateFormat(Now(), 'mm/dd/yy')# In consideration of subscription fees and activity charges, the Company agrees to represent the Applicant to facilitate the processing of credit card payment on Applicant orders. This service will be provided only upon acceptance by the Company of the IAMS application and receipt of an e-mailed copy of this contract confirming the acceptance by the Applicant of the terms and conditions set forth below. THE COMPANY AGREES TO: 1) Process Applicant sales paid for by credit card. 2) Enter a record of said sales with credit card transaction results into an order log table specific to the Applicant. 3) Make available to the Applicant on-line, said transaction results. 4) Send to the Applicant an e-mailed purchase order for each transaction. 5) Send to the customer an e-mail confirmation of each transaction. 6) Pay the Applicant on or about the 10th day of each month following said transactions all successfully captured sales amounts net of returns, activity fees, and applicable chargebacks. 7) Make a best efforts attempt to successfully refute, on behalf of Applicant, customer chargeback requests as set out below. THE APPLICANT AGREES TO: 1) Maintain the Applicant account in good standing by adhering to contract terms and conditions. 2) Pay the Company the then current fees and charges as set out below. 3) Accept the decision of the Company in cases where-in a return of payment (a chargeback) is requested by the customer, in compliance with the credit card processing network and issuing bank policy. 4) Authorize the Company to offset a deficiency in the Applicant account, resulting from any customer returns or chargebacks, by charging the Applicant credit card of record the amount of the return or chargeback plus any applicable fees. 5) Apply their best efforts to insure that any credit card charge for goods and services is a valid use of customer's card and to ship ordered items in a timely manner or notify the Company and the customer of shipments that will be delayed for over 20 days and to respond to customer enquiries regarding orders in a timely manner to avoid potential chargeback requests. 6) Enter the then current shipping date for each order into the Applicant order log only upon actual shipment or optionally enter an expected shipping date. 7) Provide the customer with notification that the Company is their authorized credit card billing representative and that the Company name will appear on their credit card statement. CHARGEBACKS A chargeback is a request by a customer for a refund of a payment made through their credit card against a specific order. Reasons for chargeback requests comprise but are not limited to: goods not received, goods not as advertised, goods not merchantable, and unauthorized charge to credit card. When a customer makes a chargeback request, the funds are immediately deducted from the Company merchant account and a chargeback notice sent to the Company. The Company will make a best effort to refute chargeback claims based on the timely receipt of information as requested by the Company from the Applicant. If the claim is not successfully refuted, the amount of the refund will be deducted from the Applicant account along with the applicable chargeback fee. A "goods not received" claim cannot be successfully refuted without a proof of delivery signed by the customer. All merchants are cautioned to pay particular attention to this condition and be aware of the risks of shipping merchandise without getting a signed receipt. SUBSCRIPTION FEES AND ACTIVITY CHARGES All fees and charges are subject to change without prior notice. Any changes adverse to Applicant will not be applied on the Applicant account without providing Applicant with notice 30 or more days in advance of the automatic renewal of services as set out below. AMOUNT RESTRICTIONS For the protection of the Company and the Applicant the Company will impose an upper limit on the US dollar amount of of any single credit card transaction or any sequence of transactions originating from the same customer or using the same credit card number. Said limit will be set higher than stated by the Applicant as a typical transaction amount. The applicant can impose their own per transaction limit up to and including the Company limit when configuring the Applicant account. The Applicant can request a change in the Company limit and can reset their own limit at any time. HOLDBACKS The Company may determine to hold back a reasonable portion of the funds due in Applicant account if the Company finds a requirement to cover potential refunds, charges against Applicant account, or other liabilities due the Company. The Company can, at its discretion, hold back funds for up to 180 days from the time of a funds capture to cover potential liabilities from certain transactions using credit cards issued outside the United States. The Company will hold back funds derived from fraudulent or illegal transactions whether by Applicant or the Applicant's customer. PURCHASE RESTRICTIONS The Applicant may not make purchases from themselves using the IAMS service or from any other entity that would benefit Applicant as a way of transferring funds from one Applicant account to another. A live testing of the Applicant account on a few transactions is an exception. HOLD HARMLESS The Applicant agrees to hold the Company harmless from any litigation, customer complaints, failed deliveries, copyright infringements, patent infringements, or other acts of commission or omission arising from Applicant activities. The Applicant further agrees that the Company cannot be held liable for any Applicant losses that may result from this IAMS service or the failure there-of. BILLING and CANCELLATION The IAMS Merchant Services can be cancelled by the Applicant upon a 30 day notice in advance of the next regular billing period. Billing for the IAMS subscription is made at 91 day intervals beginning with the activation of the Applicant account. Renewal of service is automatic upon successful billing of Applicants credit card of record unless a timely cancellation request has been made. No pro rata returns will be made for early termination. Upon cancellation, the Company reserves the right to withhold any Applicant account balance for up to 180 days as a contingency against possible customer returns or chargebacks. DURATION, MODIFICATION, TERMINATION Terms and conditions of this contract as applied to Applicant will survive the cancellation of services by either the Company or the Applicant. Any changes to a provision of this contract will not affect any other provision. The Company reserves the right to terminate Applicant IAMS services without notice upon substantive violation of any of the terms and conditions contained here-in or any other activity that the Company deems detrimental to maintaining a good credit history with Company Merchant Bank(s). The Applicant agrees that the Company will be the final arbiter in determining substantive violations and detrimental activities. Any non-action by the Company for an Applicant activity in violation of this contract is not grounds for subsequent non-termination and does not affect the terms and conditions set forth here-in. GOVERNING LAWS ImagineNation Inc is a Delaware Corporation. Applicable laws of the State of Delaware will apply in any disputes arising between the Company and the Applicant. FEES and CHARGES ---------- SUBSCRIPTION FEES and ACTIVITY CHARGES (Effective as of May 10, 2006) IAMS Merchant Services: SUBSCRIPTION FEE: US$18.00/month billed in advance in 91 day increments to the Applicant's credit card of record. ACTIVITY CHARGES: Accrued by calendar month based on the settlement date (captured date) and accounted on or about the 10th of each following month. DISCOUNT CHARGE on SUCCESSFUL SALES: 7.5% DISCOUNT CHARGE on SUCCESSFUL RETURNS: 0.0% PER TRANSACTION CHARGE: US$0.55 (A transaction is a successful sale or return.) CHARGEBACK FEE: US$25.00 per incident without regard to validity of customer's claim. (NOTE: A chargeback can be offset by the Company by charging the amount to the Applicant's credit card of record where sufficient funds are not available in Applicant's IAMS account to cover the amount plus the fee.) ------------------END CONTRACT-------------- We look forward to a successful relation and appreciate your patronage. IAMS Staff Team....ImagineNation