SURGEPAYS, LLC INDEPENDENT SALES ORGANIZATION MASTER SERVICES AGREEMENT
This Independent Sales Organization Master Services Agreement ("Agreement"), between Independent
Sales Organization (hereinafter "ISO") having its principal place of business at and SurgePays, LLC ( "Company"), is entered for the purpose of establishing a Master Services Agreement to govern the parties' relationship ("Parties" when used herein shall collectively refer to ISO and Company). The Effective Date is 2024-04-19 ("Effective Date). The Agreement (and all associated addenda) ("Agreement") supersedes any and all prior oral or written agreements (including purchase orders) entered into prior to the Effective Date between the parties pertaining to the matters addressed herein.
With the intent of being legally bound, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:
TERMS
1. Appointment. On a nonexclusive basis, Company hereby designates and appoints the ISO as an independent sales organization of Company under this Agreement, and ISO hereby accepts such appointment to be an ISO of Company during the term and in accordance with the terms of this and all related agreements. Company authorizes ISO, in such capacity, to take such action on its behalf under the provisions of this Agreement and to exercise such powers and perform such duties as are expressly delegated by the terms of this Agreement.
2. Independent Contractor. The relationship of the parties under this agreement is that of an independent contractor, the ISO, and the company hiring the contractor, Company. In all matters relating to this agreement each party hereto shall be solely responsible for the acts of its employees and agents, and employees or agents of one party shall not be considered employees or agents of the other party. Except as otherwise provided herein, no party shall have any right, power, or authority to create any obligation, express or implied, on behalf of any other party. Nothing in this agreement is intended to create or constitute a joint venture, partnership, agency, trust, employment, or other association of any kind between the parties or persons referred to herein.
3. Term. The term of this Agreement shall be for twenty-four (24) months beginning on the Effective Date. It shall automatically renew for a successive, one year term, unless either party gives written notice to terminate the Agreement at least one month prior to the end of the current term. Such Notification shall be submitted in writing via certified or overnight mail service or via electronic mail whereby recipient provides sender acknowledgement of receipt.
4. Termination. Notwithstanding anything in this Agreement, Company may terminate this Agreement with or without cause for any or no reason at any time during the term of this Agreement. Such termination may take place with or without notice to ISO (including any of the
ISO's Agents or employees). ISO hereby waives notice of any termination of this Agreement or associated addenda.
5. Issuance of Unique ISO Agent ID and Account Access. Once ISO has completed and submitted all essential paperwork and documentation to the satisfaction of Company,
Company shall provide ISO with a unique ISO Agent ID ("Agent ID"), which shall enable ISO to access Company's electronic payment, processing and provisioning system (the "Company POS System") for the purpose of establishing an ISO Account ("ISO Account") within the Company's POS System. ISO shall be responsible for maintaining the confidentiality of the Agent ID as well as ISO's user-name and password. ISO shall be solely responsible for any and all activity undertaken under the ISO Agent ID Account.
6. ISO Duties
a. Retail Locations. As an ISO of Company, ISO shall cause potential retail locations to sign a Company Merchant Agreement ("Merchant Agreement") with Company. Any retail location that ISO causes to fully contract with Company shall hereinafter be referred to as a "Merchant Retail Location," provided that ISO is recognized as the "Acquiring ISO" on such retail location's Merchant Agreement when such Merchant Agreement is countersigned and approved by Company. Company hereby retains in its sole but reasonable discretion the authority to approve, disapprove or terminate any proposed or then active Merchant Retail Location for any reason whatsoever, and/or require a deposit for bad debt reserves for any Merchant Retail Location to conduct or continue conducting business on the Company POS System.
i. ISO shall only use the Company Merchant Agreement that has been designated by Company and that is current at the time it is presented to a Prospective Merchant.
ii. All Company Merchant Agreement's (whether partially or fully completed), Merchant accounts, and all related records are owned by Company and may not be transferred, assigned, sold or exchanged, in whole or in part, by ISO. Violation will result full civil and criminal penalties as allowed by law.
iii.
The rates and fees charged to the Merchant Retail Location pursuant to the Merchant Agreement may be recommended by ISO, but in all cases shall be subject to final review and approval by Company in its sole discretion.
b. Acquiring ISO. ISO shall be responsible for:
i. Submitting Merchant Agreements to Company for Company approval and countersignature,
ii. creating and maintaining individual accounts in the Company POS System for each Merchant Retail Location,
iii. monitoring any outstanding balances of Merchant Retail Locations,
iv. implementing Company's advertising strategies and overseeing the distribution of promotional materials provided by Company,
v. providing any needed assistance to Company and/or Merchant Retail Locations including but not limited to servicing, merchandising, resolving account issues, and collecting outstanding and unpaid balances.
c. ISO's failure to fulfill its obligations hereunder in a diligent manner and its subsequent failure to materially and in good faith improve its performance within seven (7) calendar days of being notified of such poor performance shall be deemed a material breach of ISO's obligations hereunder.
d. It is the ISO's sole responsibility to include their Account Name and ISO Agent ID number on each fully executed and comprehensive Merchant Agreement submitted and accepted by Company in order to receive commission.
e. The ISO, and any employee, agent, representative of the ISO, is NOT permitted to speak to any representative of the media or any journalist about the Company, Company
policies, or the ISO's policies or practices in relation to Company. Failure to comply with this policy is grounds for immediate termination of this Agreement and any associated Agreements with Company. The determination of whether this policy has been violated shall rest in the sole discretion of Company.
7. Compensation and Payment Procedures. Merchant Retail Locations shall purchase Products and Services directly from Company using the Company POS System and any other means permitted by Company. "Products and Services" for the purposes hereof shall include any product or service purchased by Merchant Retail Location from Company for the purposes of reselling such to an end consumer or user ("End User"), including but not limited to electronically
transmitted personal identification numbers ("PINs") and physical products provided by Company in any form. The ISO, Merchant Retail Location, and Company acknowledge and agree that Company in its sole and reasonable discretion shall have the right to terminate or restrict the ability of any Merchant Retail Location from purchasing any Company Product or Service with or without cause or prior notice at any time.
a. PINS: Unless otherwise noted herein or in a separate writing by Company, ISO shall receive a commission for any PIN validly sold to a Merchant Retail Location which shall be based upon the difference between the ISO's discount rate ("ISO's Buy Rate") and the Merchant Retail Location's Discount Rate ("Retail Buy Rate").
i. Notwithstanding the foregoing, Company shall be permitted to change the Retail Buy Rates of any Merchant Retail Location at any time at its sole but reasonable discretion for any reason.
ii. Company shall be responsible for setting ISO Buy Rates; however all such ISO Buy Rates are subject to change by Company in its sole and absolute discretion at any time with or without notice.
b. Transaction Fee Based Electronic Products: Certain electronic and/or PIN based Products or Services shall be provided to Merchant Retail Locations and/or ISO for which Company shall compensate ISO and/or Merchant Retail Locations based upon a
"transaction fee" model rather than based upon the method described in Section 7a above. In such an event Company shall indicate that a set fee per transaction for sales of a given Product shall be provided. It is hereby agreed that the compensation methodology for any Product provided by Company hereunder may be altered such that a transaction fee based compensation may be used rather than a margin based compensation. It is agreed that Company shall establish the compensation methodology and rates payable for ISOs and/or Merchants Retail Locations for all such Products in its sole and reasonable discretion without notice.
c. Other Products and Services: Company may procure, provide and/or acquire the rights to distribute other products or services that it is not currently providing to ISO ("New Products"). In such event, Company may, in its sole discretion offer ISO and/or Merchant Retail Locations the right to distribute and resell such New Products to End Users under the terms hereof by notifying ISO and/or Merchant Retail Locations with all sale information related to the New Products including but not limited to product descriptions, compensation, and more. A New Product includes but is not limited to, any Product or Service offered by Company for the purposes of resale to End Users, if such Product at the time of introduction is not then offered in its exact same form by Company to ISO or a given Merchant Retail Location, notwithstanding the fact that Company may have offered such or a similar product to ISO or Merchant Retail Locations at any other point in time prior to such introduction.
d. Collections and Bad Debt: Company shall hold the ISO solely responsible for collecting all amounts owed from Merchant Retail Locations for all Products and Services purchased hereunder if Merchant Retail Location enters into a collection and bad debt circumstance; a result of an ACH return due to monies owed and not available per the ACH agreement with Merchant Retail Location. In the event that any bad debt is caused or facilitated by any dishonest act or willful misconduct of the ISO or any affiliate or agent of the ISO or whereby the Merchant Retail Location does not make owed monies available to reimburse bad debt within 10 days of bad debt origination date, then ISO shall be responsible for the entire bad debt resulting therefrom. Additionally, in such event Company shall be permitted to terminate this Agreement for Cause and seek any remedy available in law or equity.
i. ISO shall be obligated to share one hundred percent (100%) ("ISO Share") of any and all bad debt of Merchant Retail Locations that conduct business under the Company Merchant Agreement. Company may offset ISO's portion of Bad Debt from any amounts owed ISO by Company during the term of the Agreement. Merchant Retail Location Bad Debt shall include any monies owed Company by any Merchant Retail Location that are not paid when due and/or are deemed uncollectible by Company at any time. Bad Debt shall also include any costs incurred by Company in seeking to collect outstanding Merchant Retail Location debts.
e. Commissions: Commissions shall only become payable and accrue, for the duration of this Agreement, when a Product or Service has been validly sold and valid payment for such product has been received by Company. ISO will receive commissions only for those orders that are completed in accordance with this Agreement, any other associated Addenda, the Company terms and conditions, and state and federal law.
f. Commission Schedule and Rates: ISO agrees to adhere to the most up to date and current commission schedule and rates Company has approved. This schedule and rates may change at any time without notice to ISO. Company reserves the right to change commission rates, schedules, payments, or withhold payments at any time as business conditions warrant at its sole discretion and without notice to ISO. The ISO hereby waives notice of any changes to the commission rates, schedules, payments, or withheld payments. Company shall not be responsible for the payment of any commissions to any ISO agent, employee, or other related party. Company may demand repayment of any and all commissions paid to ISO for any order not in compliance with this Agreement, any other associated Addenda, the Company terms and conditions, and or state and federal law. Such repayment right is reserved by Company at its sole discretion. Company shall not be obligated to remit commissions for any Product or Service sold if Company has not or has been unable to collect payment. Company shall use commercially reasonable efforts to issue commissions to ISOs on a weekly basis.
g. Commission Held Reserve: Company shall be permitted to offset any amounts due to Company from ISO Commissions for any cause including but not limited to any Service Fees, Bad Debt Fees or other fees provided herein, or established by Company. Such amounts may be offset at any time at the sole discretion of Company. All Commission payments due to ISO shall be paid in no less than four (4) weeks in arrears. Upon the termination of this Agreement and if found that no financial obligation is owed to Company, Company shall pay in full any monies held in reserve. If any amount is due to Company by ISO, Company may retain any Commissions held in reserve and set it off against all amounts due to Company by ISO. ISO hereby grants Company any and all such right to retain and apply Commissions to any financial obligation owed to Company.
8. Disputes. In the event of a dispute between ISO and Company relating to sales or commissions, the Company POS System shall be the determining authority. If written notice of any dispute, error or discrepancy is not submitted to Company within seven (7) days of the transaction date such lapse of time shall act as a waiver of ISO's right to contest such dispute, error or discrepancy.
9. Branding. ISO acknowledges and agrees that "SurgePays, LLC" is a wholly owned mark of Company and constitutes copyrights and intellectual property of Company. Nothing in this Agreement, including any actions or inactions by the ISO or any affiliates of the ISO, shall in any way be interpreted to construe or convey any rights to such marks or any Company intellectual property upon the ISO or any other party. ISO's right to use the trademark, tradename and
tradedress "SurgePays, LLC" is limited to:
a. that which is required in order to perform ISO's duties under this Agreement and
b. that which is specifically provided for in this Agreement.
ISO acknowledges and agrees that ISO will not use or claim any right to use any of these the trademarks, tradenames or tradedresses outside of this Agreement or in any form upon termination, expiration of this Agreement, or if requested during this Agreement. ISO agrees that failure to fully comply with this section shall constitute a material breach under this Agreement and, in addition to any other remedies available to Company, such a breach shall give rise to Company's right to terminate this Agreement.
10. Equipment, Materials, and Intellectual Property. The following shall remain the property of Company and shall at all times be subject to the ultimate control of Company, even if delivered to the ISO or any ISO Agent: all terminals, handsets, equipment, products, records, inventory, designs, tents, posters, banners, and field marketing materials ("equipment and materials") and all intellectual property provided to the ISO in connection with this Agreement, including (but not limited to) Company's logo or other trademarks. ISO assumes all risks of damage to or loss of any Company equipment and materials while ISO has possession (either actual possession or constructive possession). Constructive possession includes, but is not limited to, the period of time that equipment and materials (including all returned equipment) travel through the channels of the mail or delivery service back to the possession of Company. If the ISO purchases insurance from the mail or delivery service and due to loss or damage of the equipment and materials the ISO receives compensation from the insurance policy, Company is entitled to such insurance payouts. Company shall retain title and a security interest in all equipment and materials belonging to Company. The provision of the equipment and materials and the opportunity to earn commissions under this Agreement provide sufficient consideration for such security interest. ISO will lose all
rights with respect to the equipment and materials if ISO does not abide by the terms and conditions of this Agreement. Company reserves, among other secured creditor rights, the right of filing a financing statement concerning the consignment inventory and the right of self-
help repossession of the consignment inventory in case of default. Inventory audit actions by Company may be done without advanced notice to ISO. ISO hereby waives notice of any inventory audit actions done by Company.
11. Company POS System Intellectual Property. ISO agrees that Company owns all rights, title, and interest in and to the Company POS System software, and any other technology or property provided by Company and used by ISO or any Third Party Processor to access the Company POS System, including all intellectual property rights therein. In addition, Company maintains ownership of all point of sale marketing materials including banners, posters, window stickers etc. as well as POS terminal equipment. All such property of Company shall be returned within 10 days of expiration of this agreement.
a. Restrictions on Use. ISO acknowledges that Company POS System software, its structure, organization and source code constitute valuable trade secrets of Company. Accordingly, ISO agrees that it will not, and will not permit any third party, to:
i. access to the Company POS System other than the parties authorized under this Agreement; ii. modify, create derivative works of, adapt, alter or translate the
Company POS
System;
iii. sublicense, lease, rent, loan, distribute, provide access to, or otherwise transfer the any aspect of the Company POS System to any third party not authorized under this Agreement;
iv. reverse engineer, decompile, disassemble, or otherwise derive or determine or attempt to derive or determine the source code (or the underlying ideas, algorithms, structure or organization) of any aspect of the Company POS System; or
v. copy, install or use the Company POS System except as expressly permitted in this Agreement.
12. No Implied Licenses. There are no implied licenses under this Agreement, and any rights not expressly granted to ISO hereunder are reserved by Company. ISO is not granted any patent license under this Agreement. ISO further agrees that its rights to use the Company POS System are provided solely by this Agreement and are limited by the terms and conditions of this Agreement.
13. Credit Check Authorization. ISO authorizes Company to obtain personal and company credit reports from credit bureaus and verify information provided in this Agreement. ISO also represents that ISO is not a party to any agreement that would prevent ISO from doing business with Company or its affiliates and/or partners.
14. Indemnification. ISO agrees to indemnify, defend and hold harmless Company against any and all claims, fines, forfeitures, liabilities, lawsuits, damages, losses, judgments, costs, fees and expenses incurred by Company, including but not limited to, reasonable attorney's fees under this agreement, to the full extent that such arise from any fraudulent activity or willful misconduct on the part of the ISO including any employee, agent or affiliate of ISO.
15. Warranties.
a. General Warranty: Company and ISO warrant that it has full right, power, and authority to enter into this Agreement and to perform its obligations and duties under this Agreement, and that the performance of such obligations and duties hereunder does not and will not conflict with or result in a breach of any other agreements of such party or any judgment, order, or decree by which such party is bound.
b. Warranty Disclaimer: THE COMPANY POS SYSTEM AND ANY PRODUCT OR SERVICE SOLD USING THE COMPANY POS SYSTEM ARE PROVIDED "AS IS," WITHOUT ANY WARRANTIES OF ANY KIND WHETHER EXPRESS OR IMPLIED, OR BASED ON STATUTE, TORT OR ANY OTHER THEORY OF LAW. COMPANY EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, AND NON-INFRINGEMENT OF THIRD PARTY RIGHTS. ISO ACKNOW LEDGES AND AGREES THAT COMPANY MAKES NO REPRESENTATIONS AS TO THE REASONABLENESS, APPROPRIATENESS, QUALITY OR FUNCTIONALITY OF PRODUCTS OR SERVICES PROVIDED BY COMPANY THROUGH THE COMPANY POS SYSTEM. ANY PRODUCT OR SERVICE PROVIDED BY COMPANY TO ISO OR ANY PARTY AFFILIATED W ITH DISTRIBUTION IS ON AN "AS IS" BASIS AND SUBJECT TO THE TERMS AND CONDITIONS IMPOSED
BY SUCH PRODUCT'S RESPECTIVE CARRIER OR PROVIDER AS W ELL AS THE ABILITY OF SUCH CARRIER OR PROVIDER TO FULFILL SUCH TERMS AND
CONDITIONS. IN NO EVENT SHALL COMPANY BE HELD LIABLE FOR THE QUALIT Y, THE TERMS OR CONDITIONS, OR THE FAILURE OF ANY CARRIER OR PROVIDER TO FULFILL THE OBLIGATIONS OF ANY PRODUCT OR SERVICE SUPPLIED THROUGH THE COMPANY POS SYSTEM.
c. Limitation of Liability: IN NO EVENT SHALL COMPANY BE LIABLE TO ISO OR
ANY PARTY FOR ANY SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES OF ANY KIND INCLUDING THOSE RESULTING FROM INTERRUPTION OF USE, LOSS OR CORRUPTION OF DATA, VIRUSES, OR LOST PROFITS, ARISING FROM OR RELATED TO THIS AGREEMENT OR THE COMPANY POS SYSTEM WHETHER OR NOT THE PARTY SUFFERING LOSSES HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
d. Restricted Warranties. ISO will not make any warranties or representations to any Merchant Retail Locations or any other party concerning the Company POS System and the Company Software. ISO shall further indemnify and hold harmless Company for
i. any warranties or representations ISO makes on behalf of Company to any party, whether such warranties or representations are express or implied, and
ii. any liability or obligation of ISO created by any relationship or agreement(s) between ISO and any Merchant Retail Locations whether such liability is based in contract, tort, or any other theory of law.
Company will not make any warranties or representations to any Merchant Retail Locations or to any third parties on behalf of the ISO unless such warranties concern specific obligations under this Agreement. Company shall indemnify and hold harmless ISO for any warranties or representations Company makes on behalf of ISO to Merchant Retail Locations in contravention of this Agreement.
16. Confidentiality. ISO and Company agree to keep the terms and conditions of this Agreement confidential. For the duration of this Agreement and for six months following its termination, ISO agrees that it shall not target, solicit, or enter into negotiations with any Company affiliated Merchant Retail Location, Company affiliated ISO or other party that is known by ISO to already be affiliated with Company (whether such affiliation was the result of ISO's efforts or otherwise) for the purpose of inducing such party to:
a. sever its existing affiliation with Company, or
b. sell or distribute a product or service that competes with any Company Product or Service.
Additionally, for such period, ISO shall not offer for sale or resale to any Company affiliated Merchant Retail Location, any electronic product or service supplied by any other party that is competitive to a Product or Service provided by Company. It is expressly acknowledged and agreed by ISO that the failure to strictly comply with this provision shall constitute an incurable material breach of this Agreement, and, in addition to any other rights or remedies available to Company pursuant to this Agreement or applicable law, such actions shall give rise to an immediate right of Company to terminate this Agreement.
17. Insurance. At all times, ISO shall maintain and cause its subcontractors to maintain, through a reputable carrier licensed to do business, general liability insurance and workers compensation insurance. ISO shall provide to Company with satisfactory proof of insurance upon execution of this Agreement. ISO shall immediately notify and provide satisfactory proof to Company in writing of any lapse, cancellation, or modification of insurance coverage herein. ISO shall be required to maintain their own independent general liability insurance. Qualified ISO may, at its discretion, elect not to maintain workers compensation insurance. If qualified ISO elects this option, and this option is available to them at the discretion and approval of Company, ISO must complete the state specific approved Affidavit of Exempt Status form.
18. Entire Agreement. This Agreement contains the entire agreement of the parties with respect to the subject matter of this Agreement and there are no other promises or conditions in any other agreement, whether oral or written. This Agreement supersedes any prior written or oral agreements between the parties with respect to the subject matter of this agreement.
19. Severability. If any provision of this Agreement shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. If a court finds that any provision of this Agreement is invalid or unenforceable, but that by limiting such provision it would become valid or enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited. The terms of this Agreement shall control over any conflicting terms in any referenced agreement or document.
20. Cumulative Rights. Any specific right or remedy provided in this Agreement will not be exclusive but will be cumulative of all other rights and remedies.
21. Compliance with Laws. Each party shall comply in all respects with all applicable legal requirements governing the duties, obligations, and business practices of that party and shall obtain any permits or licenses necessary for its operations. Neither party shall take any action in violation of any applicable legal requirement that could result in liability being imposed on the other party.
22. Applicable Law and Arbitration. This Agreement will be governed by the laws of Nevada without regard to its choice of law provisions. All disputes arising out of or in connection with this Agreement shall be finally resolved through arbitration under the administration of Federal Arbitration, Inc. and in accordance with its Rules for Arbitration.
23. Amendments and Waiver. Any amendments to or waiver of any provision of this Agreement must be in writing and signed by both parties. Failure of either party to insist on strict compliance with any of the terms, covenants, and conditions of this agreement shall not be deemed a waiver of such terms, covenants, and conditions, or of any similar right or power hereunder at any subsequent time.
24. Assignment or Transfer. Company may assign or transfer this Agreement. ISO may not assign or transfer (directly or indirectly) this Agreement without prior written consent from Company, which may be withheld at the discretion of Company.