ACH Automatic Payment Collection Agreement Terms of Service

This ACH Automatic Payment Collection Agreement (“Agreement”) is entered into between Jonas Fitness Inc. and Client.

This Automatic Payment Collection Agreement (“Agreement”) is entered into between Jonas Fitness Inc. and Client as of the date Jonas Fitness Inc. has by its signature below indicated acceptance hereof.

1. Agency. Client appoints Jonas Fitness Inc. as its exclusive agent for the collection of monthly or other periodic charges (“Periodic Payments”) from all of those persons (“Consumers”) who have agreed to make such Periodic Payments during the Initial Term (as defined in Section 13 here) of this Agreement and any subsequent Renewal Term (as defined in Section 13 herein).
2. Collection. Jonas Fitness Inc. accepts the appointment and agrees that on the agreed upon date(s) of each calendar month (or the next banking day if the agreed upon date(s) fall on non-banking days during the term of this Agreement), Jonas Fitness Inc. will submit to various networks, including, but not limited to, the Automated Clearing House and the Federal Reserve System with data in the form required for the electronic debiting of Periodic Payments from Consumers’ bank deposits and a deposit on the next banking day of those Periodic Payments to Client’s bank deposit account.
3. Authorization. Client will obtain from each participating Consumer necessary information in proper form authorizing automatic entries to such Consumer’s bank account to transfer Periodic Payment amounts to Client’s bank deposit account. Client will indemnify and hold Jonas Fitness Inc. and its directors, officers, agents, employees, affiliates subsidiaries, and successors in interest harmless from and against all claims, damages, losses, penalties, and expenses (including without limitation attorneys’ fees), resulting from or related to Client’s failure to obtain such authorizations. Client hereby authorizes Jonas Fitness Inc. to make direct deposits of Periodic Payments and to debit for fees and other charges as set forth herein and on the attached Fee Addendum.
4. Collection Data. Client shall provide Jonas Fitness Inc. with data necessary for the electronic funds transfer (“Collection Data”) in the form and at the times prescribed by Jonas Fitness Inc. and shall make periodic checks and updates necessary to cause the Collection Data to be current and accurate at all times. The format and schedule requirements for delivery of Collection Data by Client may be changed by Jonas Fitness Inc. during the term of this Agreement, and Client shall deliver Collection Data in conformity with changed requirements set forth from time to time by Jonas Fitness Inc. . By delivering such data to Jonas Fitness Inc., Client shall be presumed to have approved and warranted the accuracy of its contents. Client warrants to Jonas Fitness Inc.  that all data and entries delivered to Jonas Fitness Inc.  by Client will (a) be in correct form, (b) contain true and accurate information, (c) be fully submitted by the Consumer, and (d) be timely under the terms and provisions of this Agreement.
5. Fees. For the services performed by Jonas Fitness Inc., Client will pay the fees as detailed on the attached Fee Addendum. Client pays any applicable sales tax. The Minimum Monthly Transaction Fee is calculated as the average monthly fee for Periodic Payments calculated over the first full three months of the Agreement. The Client acknowledges and agrees that after the first full three month of the Agreement, Jonas Fitness Inc. will invoice Client for and Client will pay, in addition to any other non-periodic fees payable, a fee that is the greater of (i) the fee for the Periodic Payments for that month and (ii) the Minimum Monthly Transaction Fee.
6. Changes in Fee Schedule. Charges for the services may be changed by Jonas Fitness Inc. at any time upon thirty (30) days prior written notice to Client.
7. Payment of Fees. Jonas Fitness Inc. will deduct automatically all fees and other charges described in paragraph 5 hereof from the Periodic Payments to be deposited in Client’s Authorized Account, and Client hereby authorizes Jonas Fitness Inc. to deposit all Periodic Payments less all such deductions in Client’s Authorized Account. Should the Periodic Payments be inadequate to cover the fees due Jonas Fitness Inc. pursuant to the Fee Addendum, Client authorizes Jonas Fitness Inc. to electronically debit Client’s Authorized Account for the balance due. Client agrees to execute and deliver to Jonas Fitness Inc. all bank authorizations and other documents necessary for Jonas Fitness Inc. to affect the automatic transfer of Periodic Payment collection or to affect the electronic debit discussed in the preceding sentence. Jonas Fitness Inc. acknowledges that the Authorized Persons are the only persons authorized by Client to change the Authorized Account information.
8. Settlement. Client accepts full financial responsibility for the amount of any debit entries returned unpaid to Jonas Fitness Inc., irrespective of the reason for the return. In settlement of each debit entry returned unpaid, Client authorizes Jonas Fitness Inc. to debit Client’s Authorized Account on the day the return is received by Jonas Fitness Inc.  or thereafter, and Client warrants that it shall, at all times, maintain a sufficient balance in such account to cover returned debit entries. Client will pay to Jonas Fitness Inc. the amount of any returned debit entry which for any reason cannot, in part or in whole, be debited against Client’s Authorized Account. Jonas Fitness Inc. may require Client to maintain a balance with Jonas Fitness Inc. to cover returns.
9. Warranties and Limitations of Liability. Jonas Fitness Inc. warrants that it will exercise reasonable care in the performance of its obligations under the Agreement. JONAS FITNESS INC. MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE SERVICES PROVIDED HEREUNDER. Because of the extreme difficulty of fixing actual damages for any failure of Jonas Fitness Inc. to perform its obligations hereunder, or from any failure of Jonas Fitness Inc. to perform any obligations imposed by law, the parties agree that Jonas Fitness Inc.’s liability hereunder, if any, shall be limited to liquidated damages in the amount of the Minimum Processing Fees (refer to Paragraph 5), or the total amount of the Transaction Fees (refer to Paragraph 5), paid for the two (2) calendar months immediately preceding the month in which the event occurred which gave rise to the damages. The provisions of this paragraph apply even though the loss or damage, irrespective of cause or origin, results, directly or indirectly, from either performance or non-performance of obligations imposed by this Agreement. IN NO EVENT WILL JONAS FITNESS INC. BE RESPONSIBLE FOR (A) ANY INCIDENTAL OR CONSEQUENTIAL LOSSES RESULTING FROM THE PERFORMANCE OR NON-PERFORMANCE OF ANY OF JONAS FITNESS INC.’S DUTIES HEREUNDER, OR (B) FOR ANY LOSS OR DAMAGE TO CLIENT DIRECT OR CONSEQUENTIAL ARISING OUT OF OR IN ANY WAY RELATED TO ACTS OR OMISSIONS OF THIRD PARTIES INCLUDING, BUT NOT LIMITED TO: VARIOUS COURIER SERVICES, THE FEDERAL RESERVE BANK OF CLEVELAND-COLUMBUS OFFICE, THAT BANK WITH WHICH THE CLIENT DEALS OR THE EMPLOYEES OR AGENTS OF SUCH BANK OR ANY FINANCIAL INSTITUTION WHICH RECEIVES OR ORIGINATES ENTRIES OR PAYS ELECTRONIC DEBITS PAYMENTS FROM CONSUMER ACCOUNTS.
10. Compliance with Law and Indemnification.
    
    1. Client shall be solely responsible for compliance with all laws and regulations whether federal, state or local, as well as any federal or regional automated clearing house rules applicable to automatic and electronic transfers of funds, including, without limitation, laws, regulations and rules governing correct authorizations by Consumers, disclosures and notices required in connection with electronic funds transfers, and all necessary waivers and releases.
    2. Any forms provided by Jonas Fitness Inc. to Client for use in connection with the Collection Data, authorizations, waivers, and notifications herein described will be provided solely for the convenience of Jonas Fitness Inc. and Client, and Jonas Fitness Inc. makes no representation or warranty that any such form provided is sufficient or otherwise in compliance with applicable federal, state, or local legal requirements or rules. Jonas Fitness Inc. shall have no liability to Client for failure of any such forms to comply with such requirements or rules. All such forms will be returned to Jonas Fitness Inc. and not used by Client after termination of this Agreement.
    3. Client will indemnify and hold harmless Jonas Fitness Inc. and Jonas Fitness Inc. ‘s processing financial institution from any and all claims, lawsuits, demands, damages, costs or other expenses, including, but not limited to, attorney fees resulting from or in any way related to: (i) Client’s breach of any warranty contained herein or arising by operation of law, (ii) any act or omission of Client or Client’s employees or agents, (iii) any act by any Consumer or Consumer’s employees or agents, or (iv) Client’s failure to comply with any applicable law, regulation or rule, provided, however, that this indemnification shall not apply to any loss caused to Jonas Fitness Inc.  by failure of the forms provided by Jonas Fitness Inc.  to comply with law, if such forms have been properly used by Client in accordance with Jonas Fitness Inc.’s directions.
11. Delays and Excuse from Performance. Jonas Fitness Inc. shall not be liable for any delay or other failure of performance caused by factors beyond the reasonable control of Jonas Fitness Inc., such as, but not limited to: strikes, insurrection, war, fire, lack of energy, acts of God, mechanical or electrical breakdown, governmental acts or regulations, computer malfunction or acts of third parties as described in paragraph 8. If, after the date of this Agreement, any law, regulation, or ordinance, whether federal, state, or local, becomes effective which substantially alters the ability of Jonas Fitness Inc. to perform its services hereunder, Jonas Fitness Inc. shall have the right to terminate this Agreement under thirty (30) days written notice to Client.
12. Marketing Materials and Use of Jonas Fitness Inc. Marks. Client shall have the right to use such marketing materials containing the Jonas Fitness Inc. name, service mark, symbols and logos associated therewith (“Jonas Fitness Inc. Marks”) as may be supplied by Jonas Fitness Inc. from time to time. Client will use the Jonas Fitness Inc. Marks only in a manner and form approved by Jonas Fitness Inc. and solely in connection with solicitation of Consumer participation in the automatic payment collection services to be provided hereunder. All title and interest in and to the Jonas Fitness Inc. Marks remain with Jonas Fitness Inc.  Services, and upon termination of this Agreement for any reason, Client shall have no further right to the use of the Jonas Fitness Inc. Marks, shall immediately cease all use and display thereof, and shall return to Jonas Fitness Inc. all Marketing materials provided by Jonas Fitness Inc. and then in Client’s possession.
13. Term and Termination. The initial term of this agreement shall be the same as, and coterminous with, the term of the Master Services Agreement (MSA).  beginning on the date of the first collection and after the initial term (the “Initial Term”) it will automatically renewed for one (1) year on the anniversary date each year unless terminated according to the terms of this Section 13 (each, a “Renewal Term”). The Client understands that Jonas Fitness Inc. has undertaken significant implementation and investment costs which are amortized over the term of this Agreement. In consideration of these costs and the pricing structure offered in the Fee Addendum, the Client agrees to pay liquidated damages to Jonas Fitness Inc. if the Client elects early termination of this Agreement at any point during the Initial Term or any subsequent Renewal Term. The Agreement will be deemed to have been terminated early if the required termination notice is not given in the Initial Term or during any Renewal Term. The liquidated damages for early termination will be the average monthly fee calculated over the 12 months prior to the early termination (or if the agreement is terminated before the completion of the Initial Term or any subsequent Renewal Term, the average monthly fee calculated over the actual number of months until the date of termination) multiplied by the remaining number of months of the current term. These liquidated damages are due and payable in a lump sum on the date of cancellation of the Agreement. The Agreement shall be automatically renewed unless Client gives Jonas Fitness Inc. written notice of its intention not to renew at least sixty days (60) days prior to the last day of the then current term, in which event the effective date of the termination shall be such last day. Additionally, Jonas Fitness Inc. may terminate this Agreement at any time upon thirty (30) days written notice to the Client. Also, either party shall have the right to terminate this Agreement, effective immediately, if either party is in default of any obligation under this Agreement and the default continues for fifteen (15) days following written notice from other party, or if either party is declared bankrupt, files a petition under any bankruptcy laws, has a receiver appointed for all or substantially all of its property, or makes an assignment of all or substantially all of its assets for its creditors. Upon termination, all rights and obligations hereunder shall cease except Client’s obligations to pay: (a) the applicable fees for any services performed by Jonas Fitness Inc. prior to the effective date of termination; (b) all amounts due under any other agreement between Jonas Fitness Inc. and Client; and, (c) for any items returned subsequent to the effective date of termination. To cover returned items under (a) and/or (b) of this paragraph, Jonas Fitness Inc. shall be entitled to hold from Client’s final deposit an amount Jonas Fitness Inc. considers to be adequate. Jonas Fitness Inc. shall forward to Client return item verification as these items are received.
14. Disclaimer of Third Party Rights. The rights and obligations created by this Agreement apply solely to the parties hereto, subject only to the indemnity provision applicable to Jonas Fitness Inc. originating depository financial institution. Neither Jonas Fitness Inc. nor Client intend that any third party shall (a) benefit from the performance of the duties described herein, or (b) acquire any cause of action or other claim against either party for non-performance of those duties.
15. Entire Agreement. This Agreement and the accompanying schedules constitutes the entire agreement between the parties relating to the specific subject matter hereof, and no modification of this Agreement shall be binding on Jonas Fitness Inc. unless such modification is in writing and signed by an authorized representative of Jonas Fitness Inc.
16. Notices. Any notice required or allowed to be given under this Agreement shall be addressed to the other party at the address set forth above or to such other address as either party may instruct the other party in writing.
17. Unenforceable Terms. If any provision of this Agreement is held invalid, illegal or unenforceable, this Agreement will be interpreted as if such provision, to the extent the same has been held invalid, illegal or unenforceable, had never been contained herein.
18. Assignability. This Agreement is not assignable by Client without first receiving the prior written consent of Jonas Fitness Inc.
19. Applicable Laws. This Agreement shall be construed in accordance with the laws of the State of New York without regard to choice of law principles.