TRADING RULES AND REGULATIONS

Effective Date: 03/07/06

 

    The following Trading Rules and Regulations of The Trade Exchange, LLC (hereinafter called “TTE”) form part of and are included in the Trade Account Application and Agreement that each Client has signed with TTE.

 

1.   NATURE OF PARTIES.

      TTE acts as a clearinghouse for corporations, partnerships, and sole proprietors (hereinafter called “Client”) to trade or barter a portion of their goods and/or services with other Clients of TTE through the use of an identification card issued by TTE (hereinafter referred to as “I.D. Card”).

       TTE is a third party record-keeper. It debits and credits Trade Dollars generated on transactions between Clients and is not an issuer of credit except as specified under provisions of any agreement pertaining to obtaining Trade Dollar loans or extended lines of credit from the TTE System. Furthermore, TTE, acting solely as a clearinghouse, does not make any representations or warranties, either expressed or implied, as to the fitness, quality, timely delivery or merchantability of any goods or services purchased through the TTE System, nor shall it be responsible to any Client for any problems which arise with respect to the sale of such goods or services. Client agrees that their business name and form as denoted on the Trade Account Application and Agreement they have signed with TTE is a legal entity for which Client is responsible. Should Client change either the name or the form of their business, Client agrees to notify TTE of such change. In the event that Client does not notify TTE, Client agrees that they will remain the responsible party to this agreement and will continue to be responsible for and abide by all TTE Trading Rules and Regulations under their new business name or business form.

 

2.   NATURE OF TRADE DOLLARS.

      A Trade Dollar is an accounting unit used to record the value of trades determined by the selling Client. Ownership of Trade Dollars denotes the right to receive goods or services available from businesses who are Clients of TTE. Trade Dollars may only be used in the manner and for the purpose set forth in these Rules and Regulations. They are not considered legal tender, securities, or commodities. They may not be redeemed for cash. TTE disclaims responsibility for the negotiability of Trade Dollars or for the availability of goods or services from any source. Clients are advised that transactions involving Trade Dollars are generally treated as taxable events for federal, state and local tax purposes. Further, that TTE is required by federal law to annually report all trade sales of its Clients to the IRS. Clients monthly statement from TTE qualifies as a substitute 1099-B. Clients should consult with their tax advisors for appropriate tax treatment.

 

3.   DIRECTORY.

      A Goods & Services Directory listing the products and services offered for trade by TTE Clients will be published at least once each year. Clients are encouraged to trade at 100%, but may trade using a blend of cash and Trade Dollars. The trade percentage at which a Client wishes to sell will be listed in the Directory and must represent the minimum percentage that the Client will accept in Trade Dollars. Client has the sole discretion as to what products and/or services they will trade. However, Client agrees not to decrease the minimum trade percentage; not to substantially change product/service availability, or make any other relative changes during the “life span” of the current Directory in which they are listed. Clients will be notified thirty (30) days prior to the deadline for changes in subsequent directories. If no notification of changes are received from a Client by the  deadline, the  Client’s current listings will automatically be renewed with Client agreeing to trade under the same terms listed in the previous directory.

 

4.      ADVERTISING

      Unless otherwise stipulated in writing between the parties to  this Agreement, Client authorizes TTE to notify and advertise the availability of Client’s products or services to the other TTE Clients through and by whatever means TTE deems appropriate.

 

5.   AVAILABLE PRODUCTS.

      TTE shall use its best efforts to solicit new businesses having products or services to satisfy the needs of all Clients. Neither TTE nor the TTE System is responsible if a Client cannot find specific products or services to buy from other Clients. Also, TTE is not responsible if Client does not develop any sales through the TTE System.

 

6.      ADVERTISING MEDIA POLICY

      Client understands and agrees that in the case of advertising media, TTE does not require any existing cash contracts to be converted to trade nor will TTE require that media Clients accept trade contracts with Client if they have been a cash advertiser within the previous six (6) months of the date of Client’s application with TTE. Further, when an advertising media Client opens an account with TTE, they are not required to convert any existing cash contracts to trade nor accept any new trade contracts from any TTE Client who has been a cash advertiser with them within the previous six (6) months of the date of their application with TTE.         

 7.  SALES PROCEDURES.

      Client making a sale must submit a copy of the trade slip to TTE within ninety (90) days of each sale or  seller’s account will be not be credited for the sale. Seller must charge the appropriate sales and excise taxes and include all other charges pertinent to the sale on the sales slip. All transactions are subject to final audit and verification by TTE. In case of inaccuracies, TTE may debit or credit Client’ s account, without notice, as a result of such error. All transactions in excess of $50.00 must be approved by TTE at the time of the sale and have an authorization number issued. TTE requires that both the cash and trade portions be reported on each transaction. TTE reserves the right to refuse to issue an authorization number approving a transaction under any of the following circumstances:

    a) Buyer does not have sufficient Trade Dollars to make such purchases.

    b) Buyer has outstanding cash fees that are over thirty (30) days past due.

    c) Buyer’s ID card is on the Do Not Honor List.

    d) The transaction is disputed by either party and written notice of such dispute has been received by TTE.

    e) If either party fails to conform to the required procedures set forth in these Trading Rules and Regulations .

    f) If seller fails to call TTE for an authorization number for any sale in excess of $50.00 at the time of the sale.

    g) If seller submits a trade slip to TTE without a buyer’s signature.

      It is acknowledged, understood and agreed to by Client that should Client fail to honor and accept purchases from other cardholding Clients utilizing a valid I.D. Card pursuant to and in accordance with the terms of these Trading Rules and Regulations, Client shall be deemed to be in material breach of these Trading Rules. Client acknowledges that damages will accrue to TTE in the business relationship between TTE and the Client whose I.D. Card was not honored. In such event, TTE shall have the right, in its sole discretion, to terminate such Client’s account.

 

8.   PRICING.

      All products and services offered for sale by TTE Clients to other TTE Clients are to be offered at their normal prevailing cash price. It should be noted that discounted products, closeouts, sale items, and the like are NOT normally made available on a trade basis. Also, some Clients will only trade at their normal retail price. All selling Clients shall treat buying Clients with the same respect as they would a cash customer. TTE Clients need not identify themselves as a trade Client before making a purchase or obtaining a price quote. In fact TTE discourages it. However, before any sale is consummated, the selling Client MUST verify that the buyers I.D. Card is valid. Seller agrees to complete the trade sales slip including both the trade portion and the cash portion, if any, of each sale. The seller, at their option, may trade at a higher trade percentage than they normally require. However, in no case shall they accept a lower trade percentage unless specifically authorized in advance by TTE. TTE reserves the right to inquire into written complaints of overpricing by a Client. Violations may result in immediate adjustment to the transactions involved and/or the termination of violator’s account .

 

9.      PURCHASING PROCEDURES.

      Client making a purchase shall present a valid I.D. Card to Seller and sign the trade sales slip. In the event that cash is required with the purchase, Client shall pay such cash at the time of the purchase or make other arrangements that are satisfactory with the Seller. Client shall be solely responsible for making any such arrangements.

  a) Travel Purchases: Client may request accommodations outside Maine and TTE will do its best to provide such accommodations through its affiliated offices. Client understands that there are no guarantees that the requested accommodations can be made available. Trading outside Maine is a privilege extended to Clients through working relationships TTE has developed with other exchanges. However, once lodging, airline, restaurant, rental car, limousine or any other reservations are placed and confirmed, the reservations then cannot be changed or cancelled from confirmed request. Therefore it is imperative that Clients have their travel plans set prior to placing a request.

 

10.          TRADE DOLLAR LOANS.

      The right to extend trade dollar loans shall remain exclusively that of the Clients of TTE. However, Client agrees to delegate to TTE the power to grant such trade dollar loans to any Client on terms and conditions consistent with Client’s credit worthiness and ability to repay. Client understands and acknowledges that the exercise of this power shall be at the sole discretion of TTE management with regard to principle, interest, terms and conditions, lending policy, and other particulars. TTE is under no obligation to grant trade dollar loans at any time. TTE will use its best efforts to ensure timely repayment of principle and interest, appropriate collateralization, and perfection of its security interest in all loans. A Client that makes purchases in excess of their established line of credit agrees to sell their product or service at 100% trade until such excess is cured. At TTE’s option, Client may be billed in cash for the excess purchases. TTE shall establish a Trade Dollar Reserve Fund account, with a minimum balance as determined by TTE from time to time, into which all interest on said trade dollar loans will be placed. This reserve fund account shall remain the exclusive property of the Clients of TTE and be maintained by TTE. Client agrees to the use of the Reserve Fund Account, in part, to offset any losses realized from said trade dollar loans. Regardless of the extent to which trade dollar loans are granted, Client agrees to deposit a monthly amount of ten (10) trade dollars into the fund, when needed, to maintain the prescribed minimum balance. In the event that Client chooses to terminate their account, and Client has made deposits into the Reserve Fund (other than interest paid on trade dollar loans) for each of the previous twelve (12) months, a pro-rata share of that portion of the Reserve Fund Account which exceeds the minimum balance as determined by TTE will be re-deposited into Client’s trade account to be used at Client’s discretion.

 

11.          TTE  BORROWING.

    From time to time, in order to ensure an adequate supply of Trade Dollars in the system, and to meet the operational requirements of TTE, TTE may spend more Trade Dollars than is its current earnings. Such practice constitutes a form of borrowing from the Clients, which will be kept within judicious limits, (not to exceed a total of two [2] years expenses of TTE). Any such borrowing shall be repaid in equal annual installments over a period not to exceed five[5] years, will be recorded showing both principle and interest due on the books of the exchange, and will be collateralized by granting Clients a security interest in specific property of TTE, now owned or hereafter acquired, tangible or intangible, real or personal, including but not limited to inventory, equipment, chattel papers, contract rights and accounts receivable, and in all proceeds and all additions and accessions of said property; and TTE will further warrant that it is the sole owner of the specified collateral and that it is free of any lien, security interest, encumbrance, or claim, and it will defend the collateral against the claims and demands of all persons; and that TTE  will  record the amount of indebtedness, including principle and interest, with the International Reciprocal Trade Association pursuant to their Rules and Regulations.

 

12.       ADDITIONAL SECURITY INTEREST.

      Client grants TTE a security interest in all Trade Dollars to be credited to Client’s account for the amount of all unpaid cash fees. If Client becomes insolvent or bankrupt, all cash fees shall be due and payable in full. Upon filing for Petition under Chapter 7, 11, or 13 of the Bankruptcy Code, or an Assignment for the Benefit of creditors, no trade purchases shall be allowed until all cash fees due TTE have been paid in full. If the Petition under Chapter 7 of the Bankruptcy Code is filed by or against Client, or if the plan filed pursuant to either Chapter 11 or 13 does not provide for the full payment of all cash fees due TTE, TTE shall have the option in lieu of filing as a creditor, of treating the Trade Dollar balance equal in value to the amount of cash fees owing, and terminating the account; provided, however, that if TTE does receive all of its cash fees in full within 120 days of such filing, TTE shall return the Trade Dollars to Clients account.

 

13.          FEES.

      All fees including initial set-up fees, maintenance fees, service fees and other charges rendered to the Client by TTE are in payment for services rendered in processing Client into the TTE System, maintaining records and facilitating the Clients’ use of the TTE System. Client agrees to pay TTE the full amount of such fees within 10 days of the date of their monthly statement; otherwise, TTE shall charge Client interest on the outstanding balance at a rate of 1.5% interest per month (18% per year). If a Client is in arrears for any cash fees beyond thirty [30] days, Client agrees to waive all rights to the usage of their trading account and grants TTE the right to hold any such balance so long as said cash fees remain outstanding. TTE reserves the right to change the cash service fees, annual maintenance fees and all other fees from time to time. Client will receive thirty (30) days written notification of any such changes. Client also grants TTE the right to charge the following fees:

    1. Photocopies of statements will be made at a charge of 1.00 Trade Dollar per copy. Photocopies of invoices will be made at a charge of .50 Trade Dollars per copy.

    2. If a Client’s account has had no activity (no sales and no purchases) for a consecutive period of twelve (12) months, TTE reserves the right to close the computer account by placing the positive trade balance into an escrow (holding) account and removing the Client from the mailing list and The Directory of Goods and Services.  Should the Client want to re-open the account, a fee of $50.00 cash will be charged to do so.

    3. A Travel Reservation fee of $25.00 or 10% of total trip in cash, whichever is less will be charged for each incident of trade for reservations outside the State of Maine. There shall be a cancellation charge imposed by TTE if a reservation is made but not used or cancelled within ten (10) days of the reservation. In the event of such non-use or cancellation, there may also be an additional cancellation charge imposed by the affiliated Exchange in whose area the reservation was made. A major credit card number is required in order to book any reservation at a hotel or car rental agency.

    4. An interest fee of 1.5% per month in Trade Dollars will be  charged on any deficit trade balance account. Such interest payments shall be placed into a Trade Dollar Reserve Fund which shall remain the property of the members of TTE.

    5. A  $5.00 trade fee for each trade slip that  has to be returned for insufficient funds.

    6.  A $25.00 cash fee for any check that is returned for NSF (non sufficient funds) or any other reason.

     7. Clients requesting to open a second account will be charged the annual maintenance fee in effect at that time. No Initial fees will be charged however, a $50.00 cash setup fee will be charged for the second and any additional accounts.

 

 

14.       STATEMENT DISCREPANCIES.

      Client must report any discrepancies on their monthly statement to TTE within twenty(20) days of receipt; otherwise Client’s statement will be deemed correct.

 

15.          DIRECT TRADES.

      Direct trades between Clients to avoid service fees are prohibited.

 

16.          I.D. CARDS.

      TTE I.D. Cards issued to Client shall remain the property of TTE and must be returned upon request to TTE.

 

17.       COMMITMENTS AND REPRESENTATIONS

      TTE is only responsible for commitments and representations made in writing by a duly authorized officer. Broker, agent, or employees of TTE have no right to bind TTE to any obligation or representation whatsoever without such written authorization.

 

18.       LIABILITY FOR TRADE DOLLARS.

      Client acknowledges that Trade Dollars in the TTE System (positive balances) are the liabilities of the clients who have spent more than their earnings (negative balances); that there is a creditor/debtor relationship between such clients, and that trade transactions incur the normal business risks associated with any credit transaction. Trade Dollars are the liabilities of Clients who owe the TTE System, and not of TTE which is solely liable for its own indebtedness.

 

19.       TRANSFER OF ACCOUNT.

      Client agrees not to transfer or sell their account written permission of TTE.

 

20.       RESERVED ACCOUNTS.

      Clients are advised that TTE and its principals and employees are compensated in whole or in part in Trade Dollars and consequently, some accounts are primarily or solely for the use of TTE, its principals or employees.

 

21.       SUSPENSION.

      TTE reserves the right, at its sole discretion, to suspend the trading privileges of any Client who is in violation of any Local, State, or Federal law; who engages in overpricing, direct trades, reporting only the trade portion of transactions or otherwise breaches these Rules or the Application and Agreement; or has cash fees due TTE which are more than thirty (30) days past due. In the latter case, the trading privileges of the Client shall be reinstated immediately upon  payment of such past due fees. TTE shall have the right, at its sole discretion, of settling such past due fees that are over sixty (60) days in arrears by charging up to three (3) times the cash due in Trade Dollars. A Client so penalized may reverse any such transaction by making the cash payment within forty-five (45) days of such penalty.

 

22.       TERMINATION.

      Either party may terminate this Agreement upon five (5) days written notice to the other party. TTE reserves the right, at its sole discretion, to terminate the account of any Client for violation of any one of these Trading Rules and Regulations or for cause. In the event of such termination, any and all cash fees that are due or will become due shall be paid immediately upon such termination and no initial fees, service fees, maintenance fees or any other fees will be refunded. TTE may, in addition to any other rights it may have, do one or more of the following:

    a) Suspend trading privileges if trade balance in Client’s account is positive (sales exceed purchases) until such time as any outstanding cash fees are paid in full. Thereafter, Client shall have ninety (90) days to spend the balance of their trade dollars for goods and/or services offered by other TTE Clients. At the end of the 90 day period, the account will be closed and the remainder of the balance, if any, shall revert to the control of TTE.

    b) Suspend trading privileges if trade balance in Client’s account is negative (purchases exceed sales), and make demand that Client immediately pay the full amount of such deficit in cash or acceptable product or services.

    c) TTE may demand the return of the Client’s I.D. Card.

    d) TTE may notify all other trade Clients of such termination of Client’s account

 

23.          RIGHT TO AMEND.

      TTE reserves the right to amend these Trading Rules and Regulations. TTE shall give ten (10) days written notice of any such changes. Acceptance thereof by Client will be affected, whether in writing or, by failure to give TTE written objection thereto, within such ten (l0) days time. Further, use of the I.D. Card shall connote acceptance of the changes and the then current Trading Rules and Regulations.

24.       ENFORCEMENT

      Each and every term and provision contained in these Trading Rules & Regulations is severable from every other term and provision therein. If any such item or provision should be judged invalid, illegal or unenforceable it shall not effect the validity, legality or enforceability of the remainder of any other term or provision of these Trading Rules and Regulations. The remainder shall remain valid, legal, enforceable and in full force and effect. In the event that legal action must be taken by TTE against a Client to enforce any provision of these Trading Rules and Regulations, TTE shall be entitled to recover attorney’s fees, costs and simple interest at the rate of 18% per year from the date of default until payment.

 

25.       DISSOLUTION.

      In the event that the TTE System terminates or otherwise ceases to do business, all Clients in a negative Trade Dollar position will pay amounts they owe, in cash (one Trade Dollar being equal and equivalent to one dollar in U.S. currency), into a fund. The fund, less expenses, will be distributed pro rata to all Clients who are in a positive Trade Dollar position. Thus, all Clients in a positive position will receive cash for their Trade Dollars to the extent that the fund permits. TTE shall not be liable to any Clients for cash or Trade Dollars beyond the distribution of such funds as aforesaid.

 

26.          VENUE.

      The Trade Exchange is a Maine corporation with its principal place of business in Portland, Maine. These Trading Rules and Regulations and any and all agreements or understandings between Clients and TTE shall be construed in accordance with the laws of the State of Maine.

 

By signing below, client has read and acknowledges the above Rules and Regulations.

 

 

Signature of Client:________________________________________________Date:____________

 

Signature of Witness:______________________________________________Date:____________

 

 

Agreement to Fees:

 

The applicant hereby applies for a trade account with The Trade Exchange for the privilege of trading goods and services with other TTE clients. If accepted, the applicant understands that TTE will charge a fee of 12% in Cash on all sales generated through TTE (both cash and trade portions if applicable).  The applicant is also aware of the monthly maintenance fee of $10 trade and $10 cash. This fee will be billed monthly starting on the first anniversary month of your acceptance. If sales exceed $5000 within a calendar year, the $10 cash fee will be waived for the following year. The undersigned acknowledges receiving a copy of this agreement. Upon acceptance of this application,  this constitutes as an agreement between the parties, enforceable in a court of law, and the applicant becomes a client of TTE. Client and all persons authorized by client to hold or otherwise use a TTE card, agree to abide by the Trading Rules and Regulations published in the Directory of Goods and Services.

           

 

 

Gaurantee of Payment of debts and liabilities to The Trade Exchange, LLC.

 

1.DEBTS AND LIABILITIES GUARANTEE: I/we guarantee all existing and future debts and liabilities of the debtor to TTE and any member thereof, both principal and interest, direct and indirect, current and contingent. This guarantee also covers TTE’s expenses (including reasonable attorneys fees) in collecting money owed from the Debtor after default.

2. NATURE OF GUARANTEE:  This guarantee requires me to pay to TTE ALL present and future debts and liabilities of the debtor. If they are not paid on time of if the Debtor otherwise default in the terms of any obligation to TTE, TTE may require me to pay even though it had not made any attempts to collect from the Debtor or anyone else. TTE is not required to dispose of any property held or assigned as security for the obligations of the Debtor before enforcing this guarantee against me.

3. NOTICES: No notice or demands of any kind, to or from any person, are required before TTE may enforce this guarantee. With respect to debts payable on demand, TTE may demand payment at anytime.

4. CHANGES TO GUARANTEE: The terms of this guarantee cannot be changed unless I and TTE agree to such changes in writing.