Third-Party Ach Service Provider Agreement

 

By using Amarillo National Bank’s ACH services, Service Provider and Originator accept all terms and conditions of this Agreement.  PLEASE READ IT CAREFULLY. You should also review Amarillo National Bank’s Terms and Conditions, which are incorporated herein by reference.  ACCEPTANCE OF THIS AGREEMENT AND ANY OTHER APPLICABLE TERMS AND CONDITIONS IS CONDITION PRECEDENT TO USE OF THE SERVICES.

This Agreement is madeby and between any Third-Party Service Provider (as defined herein and hereafter known as “Service Provider”), and Amarillo National Bank, 410 S. Taylor St., Amarillo, Texas 79101, including any branch (hereafter known as “Bank”).  Service Provider shall be solely responsible for assuring appropriate contracts and authorization with Service Provider’s customers, including without limitation such customers’ compliance with the NACHA Rules (“NACHA Rules”) (hereafter known as “Originator”).  

Bank has been requested to permit the Service Provider, on its behalf and as an Originator’s agent, to initiate electronic signals for paperless debit Entries and credit Entries through Bank to accounts maintained at Bank and in other depository financial institutions by means of the Automated Clearing House (the "ACH") in accordance with the rules of the National Automated Clearing House Association ("NACHA").  Service Provider acknowledges that Originator is the Originator and that the Service Provider is a Third-Party Service Provider as the terms Originator and Third-Party Service Provider are defined in the NACHA Rules.  By using Bank’s Services (as defined herein), Service Provider hereby agrees to be bound by the terms of this Third-Party Service Provider Agreement (“Agreement”) and Bank hereby offers and Service Provider agrees to use Bank’s ACH services (“Services”).   The business banking terms and Automated Clearing House (“ACH”) Service Agreement are hereby incorporated by reference and made a part hereof.  In the event of inconsistency between a provision of this Agreement, the business banking terms, Article 4A of the Uniform Commercial Code as in effect in the state of Texas (the "UCC"), the provisions of this Agreement shall prevail. Terms not otherwise defined in this Agreement shall have the meaning ascribed to those terms in the NACHA Rules. 

Therefore, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Bank and Service Provider, intending to be legally bound, do hereby agree as follows:

AGREEMENT

    1. COMPLIANCE WITH RULES AND LAWS. Service Provider acknowledges it has obtained or has access to a copy of the NACHA Rules.  The NACHA Rules may be purchased online at www.nacha.org under the publications tab.  Service Provider agrees to comply with and be subject to the NACHA Rules in existence at the date of this Agreement, and any amendments to these NACHA Rules made from time to time.  It shall be the responsibility of the Originator and Service Provider that the origination of ACH transactions complies with U.S. law, including but not limited to sanctions enforced by the Office of Foreign Assets Control (“OFAC”).  It shall further be the responsibility of the Originator and Service Provider to obtain information regarding such OFAC enforced sanctions.  (This information may be obtained directly from the OFAC Compliance Hotline at 800) 540-OFAC or from the OFAC’s home page site at www.ustreas.gov/ofac.)  Service Provider agrees that the performance of any action by Bank to debit or credit an account or transfer funds otherwise required by the NACHA Rules is excused from the performance of such action to the extent that the action is inconsistent with United States law, including the obligations of Bank under OFAC or any program administered by the United States Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”).  Service Provider agrees generally and warrants to Bank that all actions by Service Provider contemplated by this Agreement, including the preparation, transmittal, and settlement of Entries and payment orders, shall comply in all material respects with United States laws, regulations, regulatory guidelines and guidance, and official commentaries, including without limitation all such regulations, guidelines, and commentaries issued by the Board of Governors of the Federal Reserve and the Federal Financial Institutions Examination Council (“FFIEC”).  Bank will charge the Originator with any fines or penalties imposed by OFAC, NACHA or any organization, which are incurred because of non-compliance by the Originator or Service Provider and the Service Provider agrees to fully reimburse and/or indemnify Bank for such charges or fines.  To the extent required by the NACHA Rules, Service Provider shall conduct, or have conducted, an audit of its compliance with the NACHA Rules in accordance with Appendix Eight of the NACHA Rules. The specific duties of the Originator and the Service Provider provided in the following paragraphs of this Agreement in no way limit the foregoing.  The duties of the Originator and the Service Provider set forth in the following paragraphs of this Agreement in no way limit the requirement of complying with the NACHA Rules.
    2. CREDIT APPROVAL.  In utilizing the Automated Clearing House Network in performance of this Agreement, Bank must make certain warranties on behalf of Originator.  Bank is charged with assuring the financial soundness of Originator to make the intended Entries.  Bank must approve all ACH Agreements and may request financial information relating to an Originator and/or a separate credit agreement.  Bank shall also be authorized to obtain a credit report(s) as may be necessary from time to time.  Bank may also assign a limit representing the maximum aggregate dollar amount of Entries that may be initiated by an Originator each day (“ACH Exposure Limit”).  Originator and Service Provider acknowledge that the ACH Exposure Limit is solely for the protection of Bank and its assets.  Originator and Service Provider understand that daily requests for Entries exceeding this amount are honored solely at the sole discretion of Bank.  Requests not honored would be communicated to the Service Provider, Originator, or the Originator’s designated representative.
    3. SECURITY INTEREST.  To secure the payment and performance of Originator’s obligations set forth herein, Originator grants to Bank a security interest in and pledges and assigns to Bank all of Originator’s right, title, and interest in the following described property, whether now owned or hereafter existing or acquired and wherever located:  (a) All monies, instruments, savings, checking and other accounts of Originator (excluding IRA, Keogh, trust accounts and other accounts subject to tax penalties if so assigned) that are now or in the future in Bank’s custody or control; (b) any other collateral described in any security instrument securing the obligations of Originator to Bank under this Agreement or any other obligation of Originator to Bank; and (c) all proceeds and products of the property as well as any replacements, accessions, substitutions, and additions to any of the above.
    4. DESIGNATION OF ADMINISTRATOR.  In order to originate ACH Entries, Originator must designate at least one Administrator. Administrator(s) shall be responsible for designating “Users” who Originator authorizes to issue Entries on its behalf.  Service Provider shall be designated as a User. For the purposes of this Agreement, the term User shall also include the Administrator.  Bank shall be entitled to rely on the designations made by the Originator’s Administrator(s) and shall not be responsible for matching the names of the Originator Users designated by the Administrator(s) to names or titles listed in Originator’s banking resolutions. Originator and Service Provider agree that any such online Entries shall comply with Bank’s Security Procedures, which are subject to change without notice to Originator or Service Provider.  Although Bank is only required to act upon the instructions of the User(s), Bank may, in its sole discretion, execute debit or credit Entries initiated by any individuals authorized by Originator or Service Provider to sign checks on Originator accounts. The signature cards establishing the authorized signatories for Originator deposit accounts are hereby incorporated by reference and made a part hereof.
    5. TRANSMISSION OF ENTRIES BY ORIGINATOR. Users or Service Provider shall initiate debit or credit Entries hereunder on behalf of and selected by Originator in Schedule A hereunder. Neither Originator nor Service Provider shall initiate an Acknowledgement Entry.  Bank shall be entitled to deem any person having knowledge of any Security Procedure, defined below in Section 7 of this Agreement and permitted to initiate Entries under this Agreement, to be a User. Originator, Servicer Provider, or Users shall transmit or deliver Entries to Bank in computer readable form to the location(s) specified by Bank and in compliance with the formatting and other requirements set forth in the NACHA file specifications or as otherwise specified by Bank. Entries shall be transmitted to Bank's designated location not later than the time and the number of days prior to the Effective Date specified in the Processing Schedule attached hereto and made a part hereof as Schedule B.  For the purposes of this Agreement, "Business Day” means Monday through Friday, excluding certain federal holidays as shown on Bank’s Bank Holiday Schedule. Entries received after the cut off time shall be deemed to have been received on the next Business Day. The total dollar amount of Entries transmitted by Originator or Service Provider to Bank on any one Business Day shall not exceed the limit set forth in in the NACHA Rules or as subsequently requested by Originator and approved by Bank.  Originator or Service Provider may not reinitiate Entries except as prescribed by the NACHA Rules.
      "Entry Settlement Limit" means the maximum aggregate amount of In-Process Entries permitted to be outstanding at any time, which amount is set forth herein and may be modified from time to time by Bank in its sole and absolute discretion.  "In-Process Entries" means the aggregate dollar amount of all credit or debit Entries initiated by Originator or Service Provider and in process on any date for which settlement has not occurred with respect to credit Entries, or the applicable period for the return of items has not expired with respect to debit Entries."Overlimit Entry" means an Entry the amount of which would cause the aggregate amount of In-Process Entries to exceed the Entry Settlement Limit.  Originator and Service Provider agree that Bank will not process an Overlimit Entry.  Bank will suspend any Overlimit Entry submitted by Originator and Service Provider and may, following its receipt of an Overlimit Entry; suspend all In-Process Entries.  Originator and Service Provider acknowledge that any Overlimit Entry or other In-Process Entries suspended by Bank will not settle on their scheduled Settlement Date.  If Originator and Service Provider wish to initiate an Entry that would cause the amount of In-Process Entries to exceed the Entry Settlement Limit, Originator and Service Provider may submit to Bank its request to initiate an Entry that otherwise would be an Overlimit Entry.  Originator and Service Provider must submit its request at least two (2) banking days prior to the date on which Originator and Service Provider wish to initiate the Entry that otherwise would be an Overlimit Entry.  Bank may require from Originator and Service Provider financial or other information in connection with Bank's consideration of the request.  Bank may grant or deny Originator and Service Provider’s request at its sole discretion.  In addition to the foregoing, Bank generally reserves the right to limit the nature and amount of the preauthorized debit/credit Entries processed under this Agreement or to refuse to process any debit/credit Entries under this Agreement if, in Bank's sole judgment (i) there is reasonable cause to believe that any Entry will be returned or will not settle in the ordinary course of the transaction for any reason, (ii) to do otherwise would violate any limit set by the applicable clearing house association or any governmental authority or agency to control payment system risk, or (iii) a preauthorized credit Entry or the return of a preauthorized debit Entry would create an overdraft of Originator and Service Provider’s Accounts.  If any of the foregoing actions are taken by Bank with respect to a particular preauthorized debit/credit Entry, Bank will notify Originator or Service Provider as promptly as practicable, but in no event, later than two (2) banking days after its decision.  Originator and Service Provider may not reinitiate entries except as prescribed by the NACHA Rules.
    6. THIRD-PARTY SERVICE PROVIDER.  Originator (i) agrees that Service Provider is acting as Originator’s agent in the delivery of Files to Bank, and (ii) agrees to assume full responsibility and liability for any failure of Service Provider to comply with the laws of the United States, the NACHA Rules and this Agreement.  Bank will not be liable for any losses or additional costs incurred by Originator as a result of any error by Service Provider or a malfunction of equipment provided by Service Provider.  Originator is solely responsible for maintaining compliance with the requirements of Service Provider, including obtaining any software updates.  Bank’s sole responsibility shall be to enter Bank approved transactions into the ACH Operator and Bank shall not have any responsibility for any File handled by Service Provider until that point in time when Bank accepts and approves a File from Service Provider for processing.  The terms and conditions governing the relationship between Originator and the Service Provider shall be governed by a separate agreement between Originator and Service Provider (“Service Provider Agreement”).  Originator and Service Provider hereby represent and warrant that they have reviewed, understood and accept this Agreement and the Service Provider Agreement, which is hereby incorporated by reference and made a part hereof.  All of Originator’s obligations and responsibilities under this Agreement will apply to the Service Provider, and the Service Provider Agreement must so provide.  At Bank’s request, Originator and/or Service Provider will provide to Bank a true and exact copy of the Service Provider Agreement. Notwithstanding the foregoing, Originator hereby authorizes Bank to accept any File submitted by the Service Provider even if the Service Provider has not been designated as a User or if the Service Provider has not executed the Service Provider Agreement.  ORIGINATOR HEREBY INDEMNIFIES AND HOLDS BANK HARMLESS FOR ANY LOSSES, DAMAGES, FINES, ASSESSMENTS, COSTS AND EXPENSES INCURRED OR SUFFERED BY BANK OR ANY OTHER PERSON AS A RESULT OF OR ARISING FROM ORIGINATOR’S USE OF SERVICE PROVIDER, INCLUDING FINES OR ASSESSMENTS INCURRED UNDER OR PURSUANT TO THE RULES AND ATTORNEYS' FEES.
    7. SECURITY PROCEDURES.
      1. The Originator and Service Provider shall comply with the “Security Procedures” described in Schedule C attached hereto and made a part hereof, and Originator and Service Provider acknowledge and agree that the Security Procedures, including (without limitation) any code, password, personal identification number, user identification technology, token, certificate, or other element, means, or method of authentication or identification used in connection with a Security Procedure (“Security Devices”) used in connection therewith, constitute commercially reasonable security procedures under applicable law for the initiation of ACH Entries.  Originator authorizes Bank to follow any and all instructions entered and transactions initiated using applicable Security Procedures unless and until Originator and Service Provider have notified Bank, according to notification procedures prescribed by Bank, that the Security Procedures or any Security Device has been stolen, compromised, or otherwise become known to persons other than User and until Bank has had a reasonable opportunity to act upon such notice. Originator and Service Provider agree that the initiation of a transaction using applicable Security Procedures constitutes sufficient authorization for Bank to execute such transaction notwithstanding any particular signature requirements identified on any signature card or other documents relating to Originator’s deposit account maintained with Bank, and Originator agrees and intends that the submission of transaction orders and instructions using the Security Procedures shall be considered the same as Originator’s written signature in authorizing Bank to execute such transaction.  Originator and Service Provider acknowledge and agree that Originator and Service Provider shall be bound by any and all Entries initiated through the use of such Security Procedures, whether authorized or unauthorized, and by any and all transactions and activity otherwise initiated by Originator Authorized Representatives, to the fullest extent allowed by law.  Originator and Service Provider further acknowledge and agree that the Security Procedures are not designed to detect error in the transmission or content of communications or Entries initiated by Originator and Service Provider and that Originator and Service Provider bear the sole responsibility for detecting and preventing such error. 
      2. Originator and Service Provider agree to keep all Security Procedures and Security Devices protected, secure, and strictly confidential and to provide or make available the same only to User.  Originator and Service Provider agree to instruct each User not to disclose or provide any Security Procedures or Security Devices to any unauthorized person.  Upon the request of Bank, Originator shall designate a system administrator to whom Bank may distribute Security Devices and with whom Bank may otherwise communicate regarding Security Procedures.  Originator’s system administrator shall have responsibility to distribute Security Devices to User(s) and to ensure the proper implementation and use of the Security Procedures by User(s).  Where Originator has the ability to change or modify a Security Device from time to time (e.g., a password or PIN), Originator agrees to change Security Devices frequently in order to ensure the security of the Security Device.  Originator and Service Provider agree to notify Bank immediately, according to notification procedures prescribed by Bank, if Originator or Service Provider believe that any Security Procedures or Security Device has been stolen, compromised, or otherwise become known to persons other than User or if Originator or Service Provider believe that any ACH transaction or activity is unauthorized or in error.  In the event of any actual or threatened breach of security, Bank may issue Originator and Service Provider a new Security Device or establish new Security Procedures as soon as reasonably practicable, but Bank shall not be liable to Originator or any third party for any delay in taking such actions. 
      3. Originator and Service Provider agree to notify Bank immediately, according to notification procedures prescribed by Bank, if the authority of any Administrator shall change or be revoked.  Originator and Service Provider shall recover and return to Bank any Security Devices in the possession of any User whose authority to have the Security Device has been revoked. 
      4. Bank reserves the right to modify, amend, supplement, or cancel any or all Security Procedures, and/or to cancel or replace any Security Device, at any time and from time to time in Bank’s sole discretion.  Bank will endeavor to give Originator and Service Provider reasonable notice of any change in Security Procedures; provided that Bank may make any change in Security Procedures without advance notice to Originator and Service Provider if Bank, in its judgment and discretion, believes such change to be necessary or desirable to protect the security of Bank’s systems and assets.  Originator’s and Service Provider’s implementation and use of any changed Security Procedures after any change in Security Procedures shall constitute Originator’s and Service Provider’s agreement to the change and Originator’s and Service Provider’s agreement that the applicable Security Procedures, as changed, are commercially reasonable and adequate for the purposes intended. 
    8. PHYSICAL AND ELECTRONIC SECURITY. 
      1. Originator and Service Provider are responsible for providing for and maintaining the physical, electronic, procedural, administrative, and technical security of data and systems in Originator’s or Service Provider’s possession or under Originator’s or Service Provider’s control.  Without limiting the generality of the foregoing, Originator and Service Provider specifically acknowledges and agrees that as part of the foregoing obligation Originator and Service Provider shall comply with the provisions of Section 1.6 of the NACHA Rules, entitled “Security Requirements,” for the safeguarding of Protected Information, as that term is defined in the NACHA Rules.  Bank is not responsible for any computer viruses (including, without limitation, programs commonly referred to as “malware,” “keystroke loggers,” and/or “spyware”), problems or malfunctions resulting from any computer viruses, or any related problems that may be associated with the use of an online system or any ACH Origination services. Any material downloaded or otherwise obtained is obtained at Originator’s or Service Provider’s own discretion and risk, and Bank is not responsible for any damage to Originator’s or Service Provider’s computer or operating systems or for loss of data that results from the download of any such material, whether due to any computer virus or otherwise.  Originator and Service Provider are responsible for maintaining and applying anti-virus software, security patches, firewalls, and other security measures with respect to Originator’s and Service Provider’s operating systems, and for protecting, securing, and backing up any data and information stored in or on Originator’s and Service Provider’s operating systems.   Bank is not responsible for any errors or failures resulting from defects in or malfunctions of any software installed on Originator’s or Service Provider’s operating systems or accessed through an internet connection.
      2. Originator and Service Provider acknowledge and agree that it is their responsibility to protect themselves and to be vigilant against e-mail fraud and other internet frauds and schemes (including, without limitation, fraud commonly referred to as “phishing” and “pharming”).  Originator and Service Provider agree to educate User, agents, and employees as to the risks of such fraud and to train such persons to avoid such risks.  Originator and Service Provider acknowledge that Bank will never contact Originator or Service Provider by e-mail in order to ask for or to verify Account numbers, Security Devices, or any sensitive or confidential information.  In the event Originator or Service Provider receives an e-mail or other electronic communication that Originator or Service Provider believes, or has reason to believe, is fraudulent, Originator and Service Provider agree that neither Originator, Service Provider, nor their User(s), agents, and employees shall respond to the e-mail, provide any information to the e-mail sender, click on any links in the e-mail, or otherwise comply with any instructions in the e-mail.  Originator agrees that Bank is not responsible for any losses, injuries, or harm incurred by Originator as a result of any electronic, e-mail, or internet fraud.
      3. In the event of a breach of the Security Procedure, Originator and Service Provider agree to assist Bank in determining the manner and source of the breach.  Such assistance shall include, but shall not be limited to, providing Bank or Bank’s agent access to Originator’s and Service Provider’s hard drive, storage media and devices, systems and any other equipment or device that was used in breach of the Security Procedure.  Originator and Service Provider further agree to provide to Bank any analysis of such equipment, device, or software or any report of such analysis performed by Originator, Originator’s agents, law enforcement agencies, or any other third party.  Failure of Originator and/or Service Provider to assist Bank shall be an admission by Originator and/or Service Provider that the breach of the Security Procedure was caused by a person who obtained access to transmitting facilities of Originator and/or Service Provider or who obtained information facilitating the breach of the Security Procedure from Originator or Service Provider and not from a source controlled by Bank.
    9. INTERNATIONAL ACH TRANSACTIONS (“IAT”).  Originator shall not initiate any IAT Entries without Bank’s prior approval.  If approved by Bank, the following provisions apply to IAT Entries originated by Originator:
      1. IAT Entries are transmitted by Bank in U.S. dollars and converted to the local currency for receipt in the foreign country at the exchange rate determined by Bank’s processor on the date determined by Bank’s processor.  All risk of fluctuation in the applicable exchange rate is borne by Originator and Originator agrees and acknowledges that Bank shall not be liable to Originator for any loss or charge incurred by Originator as the result of the application of any foreign currency exchange criteria imposed by any institution or agency located outside the United States.
      2. In the event of a returned IAT Entry, consumer payments will be credited to Originator at the originated U.S. dollar amount; corporate payments will be credited to Originator at the exchange rate determined by Bank’s processor at the time of return. 
      3. In the event of an error in an Entry or duplicate Entries, Originator and Service Provider acknowledge and agree that Originator shall be liable for any and all losses caused by and a direct or indirect result from the error or duplicate Entry.
      4. Originator and Service Provider shall originate all International ACH Transactions, as that term is defined in the NACHA Rules, with an IAT SEC code and Originator hereby agrees to abide by all of the NACHA Rules related to IAT Entries.
      5. Originator agrees that in the case of a non-Consumer Account, Originator shall enter into an agreement with the Receiver whereby the Receiver agrees to abide by the NACHA Rules in effect from time to time.
      6. Originator acknowledges that it has reviewed and understands Subsection 2.5.8.6 of the NACHA Rules entitled “Exceptions for Outbound IAT Entries” and Originator understands and agrees that laws, regulations, and rules of the country in which the Receiver is located shall govern the matters listed within that subsection. Originator further acknowledges that Originator understands how such laws, regulations and rules differ from the NACHA Rules.
      7. ORIGINATOR HEREBY INDEMNIFIES BANK FROM AND AGAINST ANY AND ALL RESULTING CLAIMS, DEMANDS, LOSSES, LIABILITIES, OR EXPENSES, INCLUDING ATTORNEYS’ FEES AND COSTS, RESULTING DIRECTLY OR INDIRECTLY FROM ORIGINATOR’S ORIGINATION OF AN IAT ENTRY.
      8. Originator and Service Provider agree and acknowledge that any assistance by Bank does not in any manner obligate Bank for the accuracy or enforceability of the Entry in any country outside the United States. 
      9. Originator bears the risk of any loss caused by any delay, tax, cost, tariff, fee, or other charge incurred on account of the Entry in any country outside the United States.
      10. If the settlement of any IAT Entry involves clearing of the Entry in more than one country outside the United States, Bank shall be permitted to rely upon any advice or instruction received by Bank from the financial institution or financial agency located in the first country outside the United States to which the Entry is directed.
      11. IAT Entries must be authorized as provided in the NACHA Rules.  The form and content of the authorization, including whether such authorization may be oral, electronic, or written, shall be governed by the laws and payment system rules of the receiving country. 
    10. CREDIT AND DEBIT ENTRIES; RECORDS RETENTION. Originator shall obtain an authorization (“Authorization Agreement”) as required by the NACHA Rules from the Receiver whose account will be debited or credited as the result of a debit Entry initiated by Originator.  A sample of a debit and credit Authorization Agreement is attached hereto as Schedule D.  Provider shall retain the Authorization Agreement in original form while it is in effect and the original or a copy of each authorization for two (2) years after termination or revocation of such authorization as stated in the NACHA Rules. Upon request, Originator and/or Service Provider shall furnish the original or a copy of the authorization to any affected Participating Depository Bank, as defined in the NACHA Rules.  The Originator will receive immediately available funds for any electronic debit Entry initiated by it on the Settlement Date applicable thereto. 
      1. The following table shows the proper SEC Codes to use depending on how you obtained the authorization to debit/credit an individual or company’s account
      2. SEC Code Debit / Credit  Authorization Method
        PPD Debit or Credit  Document signed by individual or similarly authenticated
        CCD, CTX Debit or Credit   Document signed or similarly authenticated by Originator*
        WEB Debit or Credit  Via the internet for Debit
        TEL Debit Only Verbal authorization via the telephone. (phone line must be recorded line or notice sent)
        POP Debit Only Check converted to electronic transaction at the Point-of-Purchase.  Signature is required on authorization form
        BOC Debit Only   In-person presented check converted to electronic transaction during back office processing. Notice provided at point of check being tendered and purchaser takes it. 
        ARC  Debit Only Check received via mail/courier and converted to electronic transaction.  Notice on statement for each transaction
        RCK Debit Only  Notice equals authorization
      3. *All transactions from a business account must be CCD or CTX.  Please see the CCD and CTX definition in Schedule A or refer to the NACHA Rules for a detailed explanation.
    11. PROCESSING, TRANSMITTAL AND SETTLEMENT BY Bank. Except as otherwise provided for in this Agreement and if Bank elects to accept Entries, Bank shall:
      1.  (i) use commercially reasonable efforts to comply with the instructions of Originator and Service Provider, (ii) process Entries received from Originator and Service Provider to conform with the file specifications set forth in the NACHA Rules, (iii) transmit such Entries as an Originating Depository Bank to the ACH processor selected by Bank, (iv) settle for such Entries as provided in the NACHA Rules, and (v) in the case of a credit Entry received for credit to an account with Bank ("On-Us Entry"), Bank shall credit the Receiver's account in the amount of such credit Entry on the date ("Effective Date") contained in such credit Entry provided such credit Entry is received by Bank at the time and in the form prescribed by Bank in Section 5. 
      2. transmit such Entries to the ACH processor by the deposit deadline of the ACH processor, provided: (i) such Entries are completely received by Bank’s cut-off time at the location specified by Bank to Originator from time to time; (ii) the Effective Entry Date satisfies the criteria provided by Bank to Originator; and (iii) the ACH processor is open for business on such Business Day.  Originator agrees that the ACH processor selected by Bank shall be considered to have been selected by and designated by Originator. 
    12. RECORDING AND USE OF COMMUNICATIONS.  Originator, Service Provider and Bank agree that all telephone conversations or data transmissions between them or their agents made in connection with this Agreement may be electronically recorded and retained by either party by use of any reasonable means.  Bank shall not be obligated to make such recordings.
    13. PAYMENT FOR CREDIT ENTRIES AND RETURNED DEBIT ENTRIES. Originator and Service Provider agree to pay for all credit Entries issued by Originator, Service Provider, or User(s), or credit Entries otherwise made effective against Originator.  Originator or Service Provider shall make payment at such time on the date of transmittal by Bank of such credit Entries as Bank, in its discretion, may determine, and the amount of each On-Us Entry at such time on the Effective Entry Date of such credit Entry as Bank, in its discretion, may determine. Originator or Service Provider shall pay Bank for the amount of each debit Entry returned by a Receiving Depository Bank or debit Entry dishonored by Bank.  Payment shall be made by Originator or Service Provider to Bank in any manner specified by Bank. Notwithstanding the foregoing, Bank is hereby authorized to charge the designated account(s) ("Authorized Account(s)"), as payment for credit Entries issued by Originator or returned or dishonored debit Entries.  In the event that the Authorized Account(s) does not have sufficient available funds on the Payment Date, Bank is hereby authorized to charge any account maintained by Originator with Bank as payment for credit Entries issued by Originator or returned or dishonored debit Entries.  Originator shall maintain sufficient collected funds in Originator’s account(s) to pay for the credit Entries on the Payment Date. In the event that no Originator account has collected funds sufficient on the {Payment Date to cover the total amount of all Entries to be paid on such Payment Date, Bank shall process the Entries and the total amount of the insufficiency advanced by Bank on behalf of Originator shall be immediately due and payable by Originator to Bank without any further demand from Bank.   If Bank elects to pay Originator’s account in the overdraft on any one or more occasions, it shall not be considered a waiver of Bank’s rights to refuse to do so at any other time nor shall it be an agreement by Bank to pay other items in the overdraft.
      Originator agrees that Bank may require Originator to pre-fund Originator’s Account so that sufficient funds are maintained in Originator’s account on the date that Originator or Service Provider transmit a file containing credit Entries to Bank.  
    14. ON-US ENTRIES.  Except as provided in Section 16, Rejection of Entries, or in the case of an Entry received for credit to an On-Us Entry, Bank shall credit the Receiver’s account in the amount of such Entry on the Effective Entry Date contained in such Entry, provided the requirements set forth in Section 11 (b) (i), (ii), and (iii) are met.  If any of those requirements are not met, Bank shall use reasonable efforts to credit the Receiver’s account in the amount of such Entry no later than the next Business Day following such Effective Entry Date.
    15. RESERVES.  From time to time, Bank shall evaluate Originator’s transaction activity for the purpose of establishing averages for transaction frequency, amount, returns and adjustments.  These evaluations will occur at least annually and may occur more frequently at Bank's discretion. In connection with these evaluations, Bank reserves the right to require Originator to establish reserves with Bank calculated by Bank to cover Originator or Service Provider's obligations to Bank arising from ACH activities under this Agreement.  Reserves may be expressed as a fixed dollar amount or as a "rolling reserve" calculated based on "rolling" averages determined by Bank's periodic evaluations.  The amount of reserves required by Bank, if any, will be communicated directly to Originator or Service Provider from time to time.  Originator agrees to establish reserves as required by Bank within two (2) banking days after receipt of a communication from Bank setting forth the amount of required reserves and the basis of calculation used to determine the amount of reserves.  Bank may suspend ACH processing activity for Originator if Originator fails to establish the required amount of reserves within the time period specified by Bank in its communication to Originator.
    16. REJECTION OF ENTRIES. Originator agrees that Bank has no obligation to accept Entries and therefore may reject any Entry issued by Originator or Service Provider. Bank has no obligation to notify Originator or Service Provider of the rejection of an Entry, but Bank may do so at its option. Bank shall have no liability to Originator for rejection of an Entry and shall not be liable to pay interest to Originator even if the amount of Originator's payment order is fully covered by a withdrawable credit balance in an Authorized Account of Originator or Bank has otherwise received full payment from Originator.
    17. CANCELLATION OR AMENDMENT OF ENTRY BY ORIGINATOR OR SERVICE PROVIDER. Originator and Service Provider shall have no right to cancel or amend any Entry after its receipt by Bank. However, Bank may, at its option, accept a cancellation or amendment by Originator or Service Provider. If Bank accepts a cancellation or amendment of an Entry, Originator or Service Provider must issue the cancellation or amendment in accordance with Bank's Security Procedure and Bank shall use reasonable efforts to act on the request by Originator or Service Provider for cancellation of an Entry prior to transmitting it to the ACH processor or, in the case of an On-Us Entry, prior to crediting a Receiver's account, but Bank shall have no liability if such cancellation is not effected. The Originator or Service Provider shall notify the Receiver of any reversing Entry initiated to correct any Entry it has initiated in error.  The notification to the Receiver must include the reason for the reversal and be made no later than the Settlement Date of the reversing Entry.  IF BANK ACCEPTS A CANCELLATION OR AMENDMENT OF AN ENTRY, ORIGINATOR HEREBY AGREES TO INDEMNIFY, DEFEND ALL CLAIMS AND HOLD BANK HARMLESS FROM ANY LOSS, DAMAGES, OR EXPENSES, INCLUDING BUT NOT LIMITED TO ATTORNEY'S FEES, INCURRED BY BANK AS THE RESULT OF ITS ACCEPTANCE OF THE CANCELLATION OR AMENDMENT.
    18. REVERSALS OF ENTRIES. 
      1. General Procedure. Upon proper and timely request by the Originator or Service Provider, Bank will use reasonable efforts to affect a reversal of an Entry or File. To be "proper and timely," the request must (i) be made within five (5) Business Days of the Effective Entry Date for the Entry or File to be reversed; and (ii) be accompanied by a Reversal/Cancellation Request form and comply with all of the NACHA Rules. In addition, if the Originator or Service Provider requests reversal of a Debit Entry or Debit File, it shall concurrently deposit into the Originator Account an amount equal to that Entry or File.  The Originator or Service Provider shall notify the Receiver of any reversing Entry initiated to correct any Entry it has initiated in error.  The notification to the Receiver must include the reason for the reversal and be made no later than the Settlement Date of the reversing Entry.
      2. No Liability: Reimbursement to Bank. Under no circumstances shall Bank be liable for interest or related losses if the requested reversal of an Entry is not affected. The Originator shall reimburse Bank for any expenses, losses or damages it incurs in effecting or attempting to affect the Originator's or Service Provider’s request for reversal of an Entry.
    19. ERROR DETECTION. Bank has no obligation to discover and shall not be liable to Originator for errors made by Originator or Service Provider, including but not limited to errors made in identifying the Receiver, or an Intermediary or Receiving Depository Financial Institution (“RDFI”) or for errors in the amount of an Entry or for errors in Settlement Dates. Bank shall likewise have no duty to discover and shall not be liable for duplicate Entries issued by Originator or Service Provider.  Notwithstanding the foregoing, if the Originator or Service Provider discovers that any Entry it has initiated was in error, it shall immediately notify Bank of such error.  If such notice is received no later than four (4) hours prior to the ACH receiving deadline, Bank will utilize reasonable efforts to initiate an adjusting Entry or stop payment of any “On-Us” credit Entry within the time limits provided by the NACHA Rules.  IN THE EVENT THAT ORIGINATOR OR SERVICE PROVIDER MAKE AN ERROR OR ISSUE A DUPLICATE ENTRY, ORIGINATOR SHALL INDEMNIFY, DEFEND ALL CLAIMS, AND HOLD BANK HARMLESS FROM ANY LOSS, DAMAGES, OR EXPENSES, INCLUDING BUT NOT LIMITED TO ATTORNEY'S FEES, INCURRED BY BANK AS RESULT OF THE ERROR OR ISSUANCE OF DUPLICATE ENTRIES.
    20. PROHIBITED TRANSACTIONS.  Originator and Service Provider agree not to use or attempt to use the Services (a) to engage in any illegal purpose or activity or to violate any applicable law, rule or regulation, (b) to breach any contract or agreement by which Originator is bound, (c) to engage in any internet or online gambling transaction, whether or not gambling is legal in any applicable jurisdiction, (d) to engage in any activity or business that would result in Originator being or becoming a “money service business” as defined in the Financial Institution Secrecy Act and its implementing regulations, or (e) to engage in any transaction or activity that is not specifically authorized and permitted by this Agreement.  Originator acknowledges and agrees that Bank has no obligation to monitor Originator’s use of the Services for transactions and activity that is impermissible or prohibited under the terms of this Agreement; provided, however, that Bank reserves the right to decline to execute any transaction or activity that Bank believes violates the terms of this Agreement.
    21. PRENOTIFICATION. Originator, at its option, may send prenotification that it intends to initiate an Entry or Entries to a particular account within the time limits prescribed for such notice in the NACHA Rules. Such notice shall be provided to Bank in the format and on the medium provided in the media format section of such NACHA Rules. If Originator or Service Provider receive notice that such prenotification has been rejected by an RDFI within the prescribed period, or that an RDFI will not receive Entries without having first received a copy of the Authorization signed by its customer, Originator or Service Provider will not initiate any corresponding Entries to such accounts until the cause for rejection has been corrected or until providing the RDFI with such authorization within the time limits provided by the NACHA Rules.
    22. NOTICE OF REJECT AND RETURNED ENTRIES AND NOTIFICATIONS OF CHANGE.    Bank shall notify Originator and Service Provider by e-mail, facsimile transmission mail, or other means of the receipt of a returned Entry from the ACH Operator.  Bank shall have no obligation to retransmit a returned Entry to the ACH Operator if Bank complied with the terms of this Agreement with respect to the original Entry.  Originator or Service Provider shall notify the Receiver by phone or electronic transmission of receipt of each return Entry no later than one business day after the business day of receiving such notification from Bank.  
      Bank shall provide Originator or Service Provider all information, as required by the NACHA Rules, with respect to each Notification of Change (“NOC”) Entry or Corrected Notification of Change (“Corrected NOC”) Entry received by Bank relating to Entries transmitted by Originator or Service Provider.  Bank must provide such information to Originator or Service Provider within two (2) banking days of the Settlement Date of each NOC or Corrected NOC Entry.  Originator or Service Provider shall ensure that changes requested by the NOC or Corrected NOC are made within three (3) banking days of Originator's or Service Provider’s receipt of the NOC information from Bank or prior to initiating another Entry to the Receiver's account, whichever is later, or issue a Refused Notification of Change. 
    23. NOTICE OF IMPROPER ENTRIES. Bank shall provide Originator with a periodic statement reflecting the total of each File transmitted by Bank or credited to a Receiver's account maintained with Bank. Originator and Service Provider shall examine the periodic statement and notify Bank of any unauthorized or erroneous Entries within a responsible time, not exceeding thirty (30) days from the date that the periodic statement is made available to Originator. If the Originator fails to deliver such notice, the Originator may not assert against Bank any claim for interest on the amount of the Entries for the period prior to the date that such notice is delivered. If the Originator fails to deliver notice to Bank of any unauthorized or erroneous Entries within one (1) year from Bank's issuance of any advice or statement reflecting such Entries, Originator is precluded from asserting that Bank is not entitled to retain the principal amount of the unauthorized or erroneous debit of Originator's account(s).
    24. PROVISIONAL SETTLEMENT. Originator and Service Provider shall be bound by and comply with the NACHA Rules as in effect from time to time, including without limitation the provision thereof making payment of an Entry by the RDFI to the Receiver provisional until receipt by the RDFI of final settlement for such Entry; and Originator and Service Provider acknowledge that it has received notice of that Rule and or the fact that, if such settlement is not received, the RDFI shall be entitled to a refund from the Receiver of the amount credited and Originator shall not be deemed to have paid the Receiver the amount of the Entry.
    25. IDENTIFICATION OF RECEIVER. If Originator or Service Provider identify the Receiver of the Entry by account number or identifying number, or by name and account number or identifying number, Originator acknowledges that payment of the proceeds of the Entry to the Receiver shall be made by the RDFI, or by Bank in case of an On-Us Entry, on the basis of the identifying or Bank account number even if it identifies a person different from the named Receiver. Originator is liable for and must settle with Bank for any Entry initiated by Originator or Service Provider that identifies the Receiver by account or identifying number or by name and account or identifying number.
    26. ORIGINATOR AND SERVICE PROVIDER REPRESENTATIONS AND WARRANTIES; INDEMNITY.  With respect to each and every Entry transmitted by Originator or Service Provider, Originator and Service Provider represent and warrant to Bank and agree that (a) each person or entity shown as the Receiver on an Entry received by Bank from Originator or Service Provider has authorized the initiation of such Entry and the crediting or debiting of its account in the amount and on the Effective Entry Date shown on such Entry, (b) such authorization is operative at the time of transmittal or crediting or debiting by Bank as provided herein, (c) Entries transmitted to Bank by Originator or Service Provider are limited to those types of credit and debit Entries set forth in Schedule A, (d) Originator and Service Provider shall perform their obligations under this Agreement in accordance with all applicable laws, regulations, and orders, including, but not limited to, the sanctions laws, regulations, and orders administered by OFAC; laws, regulations, and orders administered by FinCEN; and any state laws, regulations, or orders applicable to the providers of ACH payment services, and (e) Originator and Service Provider shall be bound by and comply with the provision of the NACHA Rules (among other provisions of the NACHA Rules) making payment of an Entry by the RDFI to the Receiver provisional until receipt by the RDFI of final settlement for such Entry.  Originator and Service Provider specifically acknowledge that it has received notice of the rule regarding provisional payment and of the fact that, if such settlement is not received, the RDFI shall be entitled to a refund from the Receiver of the amount credited and Originator shall not be deemed to have paid the Receiver the amount of the Entry.  ORIGINATOR SHALL DEFEND, INDEMNIFY, AND HOLD HARMLESS BANK, AND ITS OFFICERS, DIRECTORS, AGENTS, AND EMPLOYEES, FROM AND AGAINST ANY AND ALL ACTIONS, COSTS, CLAIMS, LOSSES, DAMAGES, OR EXPENSES, INCLUDING ATTORNEY'S FEES AND COSTS) RESULTING FROM OR ARISING OUT OF (AA) ANY BREACH OF ANY OF THE FOREGOING WARRANTIES, REPRESENTATIVES, OR AGREEMENTS, REPRESENTATIONS OR WARRANTIES OF THE ORIGINATOR AND SERVICE PROVIDER CONTAINED IN THIS AGREEMENT; OR (BB) ANY ACT OR OMISSION OF THE ORIGINATOR OR ANY OTHER PERSON ACTING ON THE ORIGINATOR'S BEHALF.
    27. ADDITIONAL ORIGINATOR AND SERVICE PROVIDER WARRANTIES FOR SELECTED STANDARD ENTRY CLASSES. NACHA, in its role of ensuring the safety, security, and viability of the ACH network has determined that certain single-use or limited-use consumer authorizations have the potential to increase risk in the ACH system and compromise system effectiveness by increasing the incidence of returned Entries. Therefore, to qualify as an Originator of such Entries Originator and Service Provider hereby warrant to Bank that for each such ACH Entry submitted for processing, Originator and Service Provider have obtained all authorizations from the Receiver as required by the NACHA Rules, by Regulation E or other applicable law, and this Agreement. Originator and Service Provider also make the additional warranties to Bank that Bank makes to each RDFI and ACH Operator under the NACHA Rules for the respective SEC codes for Entries originated by Originator.  ORIGINATOR INDEMNIFIES AND HOLDS BANK HARMLESS FROM ANY LIABILITY ARISING OUT OF ORIGINATOR’S OR SERVICE PROVIDER’S BREACH OF THESE WARRANTIES. 
    28. FINANCIAL INFORMATION AND AUDIT.  Bank may from time to time request information from Originator or Service Provider in order to evaluate a continuation of the Service to be provided by Bank hereunder and/or adjustment of any limits set by this Agreement.  Originator and Service Provider agree to provide the requested financial information immediately upon request by Bank, in the form required by Bank.  Originator and Service Provider authorizes Bank to investigate or reinvestigate at any time any information provided by Originator and Service Provider in connection with this Agreement or the Service. Upon request by Bank, Originator and Service Provider hereby authorizes Bank to enter Originator’s and Service Provider’s business premises for the purpose of ensuring that Originator and Service Provider are in compliance with this Agreement and Originator and Service Provider specifically authorizes Bank to perform an audit of Originator’s and Service Provider’s operational controls, risk management practices, staffing and the need for training and ongoing support, and information technology infrastructure.  Originator and Service Provider hereby acknowledge and agree that Bank shall have the right to mandate specific internal controls at Originator’s and Service Provider’s location(s) and Originator and Service Provider shall comply with any such mandate. In addition, Originator and Service Provider hereby agree to allow Bank to review available reports of independent audits performed at the Originator or Service Provider location related to information technology, the Service and any associated operational processes.  Originator and Service Provider agree that if requested by Bank, Originator or Service Provider will complete a self-assessment of Originator’s and Service Provider’s operations, management, staff, systems, internal controls, training and risk management practices that would otherwise be reviewed by Bank in an audit of Originator or Service Provider. If Originator or Service Provider refuse to provide the requested financial information, or if Bank concludes, in its sole discretion, that the risk of Originator or Service Provider is unacceptable, if Originator or Service Provider violate this Agreement or the NACHA Rules, or if Originator or Service Provider refuse to give Bank access to Originator’s or Service Provider’s premises, Bank may terminate the Service and this Agreement according to the provisions hereof. 
    29. LIMITATION OF LIABILITY.
      1. In the performance of the services required by this Agreement, Bank shall be entitled to rely solely on the information, representations, and warranties provided by Originator AND SERVICE PROVIDER pursuant to this Agreement, and shall not be responsible for the accuracy or completeness thereof.  Bank shall be responsible only for performing the services expressly provided for in this Agreement, and shall be liable only for its gross negligence or willful misconduct in performing those services.  Bank shall not be responsible for Originator's or service provider’s act's or omissions (including, without limitation, the amount, accuracy, timeliness of transmittal or authorization of any Entry received from Originator) or those of any other person, including, without limitation, any Federal Reserve Bank, ACH Operator or transmission or communications facility, any Receiver or RDFI (including, without limitation, the return of any Entry by such Receiver or RDFI), and no such person shall be deemed Bank's agent.  Originator agrees to indemnify Bank against any loss, liability or expense (including attorneys' fees and costs) resulting from or arising out of any claim of any person that Bank is responsible for any act or omission of Originator OR SERVICE PROVIDER or any other person described in this Section 29(a), INCLUDING CLAIMS BY A CONSUMER UNDER CONSUMER FINANCIAL PROTECTION BUREAU REGULATION E.
      2. Bank shall be liable only for Originator's actual damages due to claims arising solely from Bank's obligations to Originator with respect to Entries transmitted pursuant to this Agreement; in no event shall Bank be liable for any consequential, special, incidental, punitive or indirect loss or damage which Originator or service provider may incur or suffer in connection with this Agreement, whether or not the likelihood of such damages was known or contemplated by Bank and regardless of the legal or equitable theory of liability which Originator may assert, including, without limitation, loss or damage from subsequent wrongful dishonor resulting from Bank’s acts or omissions pursuant to this AgreemenT.
      3. Without limiting the generality of the foregoing provisions, Bank shall be excused from failing to act or delay in acting if such failure or delay is caused by legal constraint, interruption of transmission or communication facilities, equipment failure, war, emergency conditions or other circumstances beyond Bank's control.  In addition, Bank shall be excused from failing to transmit or delay in transmitting an Entry if such transmittal would result in Bank’s having exceeded any limitation upon its intra-day net funds position established pursuant to present or future Federal Reserve guidelines or in Bank's reasonable judgment otherwise would violate any provision of any present or future risk control program of the Federal Reserve or any rule or regulation of any other U.S. governmental regulatory authority. 
      4. Subject to the foregoing limitations, Bank's liability for loss of interest resulting from its error or delay shall be calculated by using a rate equal to the average Federal Funds Rate at the Federal Reserve BANK of NEW YORK for the period involved.  At Bank's option, payment of such interest may be made by crediting the Account.
    30. INCONSISTENCY OF NAME AND ACCOUNT NUMBER.  The Originator and Service Provider acknowledge and agree that, if an Entry describes the Receiver inconsistently by name and account number, payment of the Entry transmitted by Bank to the RDFI may be made by the RDFI (or by Bank in the case of an On-Us Entry) on the basis of the account number supplied by the Originator, even if it identifies a person different from the named Receiver, and that the Originator’s obligation to pay the amount of the Entry to Bank is not excused in such circumstances.  Originator is liable for and must settle with Bank for any Entry initiated by Originator or Service Provider that identifies the Receiver by account or identifying number or by name and account or identifying number.
    31. DATA RETENTION. Originator and Service Provider shall retain data on file adequate to permit remaking of Entries for five (5) days following the date of their transmittal by Bank as provided herein and shall provide such data to Bank upon its request.  Without limiting the generality of the foregoing provisions, Originator and Service Provider specifically agree to be bound by and comply with all applicable provisions of the NACHA Rulesregarding the retention of documents or any record, including, without limitation, Originator's and Service Provider’s responsibilities to retain all items, source documents, and records of authorization in accordance with the NACHA Rules.  
    32. FORCE MAJEURE. Originator and Service Provider acknowledge and agree that Bank shall not be responsible or liable for any loss or damage as the result of delays or the failure of Bank to perform any obligation under this agreement caused by acts of God, acts of other parties, acts of civil or military authorities, fires, strikes, floods, changes in laws or regulations, interruption of communication or computer facilities, suspension of payments by another financial institution, war, emergency conditions, or other circumstances beyond the control of Bank.
    33. REIMBURSEMENT. Any reimbursement by Bank for any liability hereunder may be made either directly to Originator or by adjustment of the aggregate ledger and collected balances of Originator's accounts.
    34. INTEREST CALCULATIONS. Any interest payments due by either party pursuant to Article 4A of the Texas Uniform Commercial Code shall be calculated at an annual rate equal to the average Federal Funds rate at the Federal Reserve Bank of New York for the period involved.
    35. NOTICES. All notices to Bank hereunder shall be in writing and sent to Bank at:
      1. Amarillo National Bank
      2. Attn:  ACH Department
      3. 410 S. Taylor St.
      4. Amarillo, Texas 79101  
      5. E-Mail: DigitalBanking@anb.com 
      6. and all notices, confirmation, and advices to Originator shall be sent to Originator at the address previously provided to Bank.  All notices, confirmation, and advices to Service Provider, shall be sent to Service Provider at the address provided to Bank or provided to Originator.  Bank shall have a reasonable time in which to act on any notice addressed to it, which shall be at least two (2) Business Days after receipt. Any notice by Originator or Service Provider to Bank shall for the purposes hereof be hand delivered or mailed by first class mail to Bank and shall be deemed given to Bank on the date Bank actually receives such notice. Any notice, transfer advice, or account statement shall for purposes hereof be deemed transmitted by Bank to Originator or Service Provider if hand delivered to Originator or Service Provider or mailed by first class mail to the mailing address of Originator or Service Provider as previously provided to Bank. The notice address of Bank, Originator, or Service Provider may be amended by providing notice in the manner required herein to the other party hereto of the change in such party's notice address.
    36. ORIGINATOR OR SERVICE PROVIDER AS RECEIVER. If Originator or Service Provider is the Receiver of an Entry or other funds transfer, and Bank does not receive final settlement for any payment made to Originator by Bank, Originator acknowledges and agrees that Originator is obligated to Bank for the amount of the payment order and Bank is authorized to charge Originator's account(s) for any amount paid to Originator. If Bank credits Originator's account for an Entry or other funds transfer naming Originator as the Receiver, such credit Entry to Originator's account is not acceptance of the funds transfer by Bank until one hour after the opening of business on the banking day after the credit Entry is made to the account. Notwithstanding the foregoing, Bank may make funds available to the Originator at an earlier time at Bank's option. Bank has no obligation to notify Originator or Service Provider of receipt of a funds transfer naming Originator as the Receiver even if payment for the funds transfer to Originator is made by credit to Originator's account or the payment order directs payment to an account. Demand by Originator for payment of a payment order for which Bank is obligated to pay Originator must be made in writing and delivered to Bank at the location designated in Section 35.  Issuance of a check by Originator on the account to which payment was made shall not constitute notice under this section.
    37. MEDIA AND RECORDS. All media, Entries, security procedures and related records used by Bank for transactions contemplated by this Agreement shall be and remain Bank's property.  Bank may, at its sole discretion, make available such information upon Originator's request.  Any expenses incurred by Bank in making such information available to Originator shall be paid by Originator.
    38. COOPERATION IN LOSS RECOVERY EFFORTS. In the event of any damages for which Bank, Originator, or Service Provider may be liable to each other or to a third party pursuant to the services provided under this Agreement, Bank, Originator and Service Provider will undertake reasonable efforts to cooperate with each other, as permitted by applicable law, in performing loss recovery efforts and in connection with any actions that the relevant party may be obligated to defend or elects to pursue against a third party. 
    39. DEPOSIT ACCOUNT AGREEMENT. The terms of Originator's deposit account agreement with Bank are hereby incorporated therein by reference. This Agreement shall control over any inconsistent terms contained therein.
    40. PAYMENT FOR SERVICES. Originator agrees to pay Bank for services provided under this Agreement in accordance with Bank’s fees. Bank may change its fees from time to time. Bank may charge the Originator Account, as well as any other account of the Originator with Bank, for any charges or fees due to it.
    41. AMENDMENTS.  Bank may amend this Agreement from time to time without providing written notice to the Originator or Service Provider.  In the event that performance of services under this Agreement would result in a violation of any present or future statute, regulation or governmental policy to which Bank is subject, then this Agreement shall be amended to the extent necessary to comply with such statute, regulation or policy.  Alternatively, Bank may terminate this Agreement if it deems such action necessary or appropriate under the circumstances.  Bank shall have no liability to the Originator or Service Provider as a result of any such violation, amendment or termination.  Any practices or course of dealings between Bank, Originator, or Service Provider, or any procedures or operational alterations used by them, shall not constitute a modification of this Agreement or the NACHA Rules, nor shall they be construed as an amendment to this Agreement or the NACHA Rules.
    42. HEADING. The headings and captions contained in this Agreement are included only for convenience of reference and do not define, limit, explain, or modify this Agreement or its interpretation, construction, or meaning.
    43. SEVERABILITY. The holding of any provision of this Agreement as invalid, illegal, or unenforceable, in whole or in part, shall not affect the other provisions of this Agreement, which shall remain in full force and effect.
    44. WAIVER. No waiver by Bank (whether or not in writing) of any term, condition, or obligation of Originator or Service Provider shall bind Bank to waive that same term, condition, or obligation again, nor shall any other provision, condition, term, or obligation hereof be affected by such waiver.
    45. BINDING EFFECT. This Agreement shall inure to the benefit of and be binding upon the successors, heirs, trustees, and assigns of the parties hereto. This Agreement is not for the benefit of any other person, and no other person shall have any right against Bank, Originator, or Service Provider hereunder.
    46. TERMINATION.  Originator may terminate this Agreement at any time.  Such termination shall be effective on the second (2nd) business day following the day of Bank’s receipt of written notice of such termination or such later date as is specified in that notice.  Bank reserves the right to terminate this Agreement immediately with or without providing notice of such termination to Originator and Service Provider.  Any termination of this Agreement shall not affect any of Bank’s rights and Originator’s or Service Provider’s obligations with respect to Entries initiated by Originator or Service Provider prior to such termination, or the payment obligations of Originator with respect to services performed by Bank prior to termination, or any other obligations that survive termination of this Agreement.
    47. APPENDICES AND EXHIBITS. Appendices and exhibits to this Agreement are incorporated into, and constitute a part of, this Agreement.
    48. EFFECTIVE DATE. This Agreement shall be effective on any date and at any time that either Originator or Service Provider initiates an Entry with Bank.
    49. TRANSFERS AND ASSIGNMENTS. Originator or Service Provider cannot transfer or assign any rights or obligations under this Agreement without Bank's written consent.
    50. ENTIRE AGREEMENT. This Agreement, included incorporated documents, constitutes the entire agreement between the parties for the services described herein and supersedes all previous agreements and understandings between the parties relating to such services.  In the event performance of the services provided herein in accordance with the terms of this Agreement would result in a violation of any present or future statute, regulation or government policy to which Bank is subject, and which governs or affects the transactions contemplated by this Agreement, then this Agreement shall be deemed amended to the extent necessary to comply with such statute, regulation or policy, and Bank shall incur no liability to Originator as a result of such violation or amendment.
    51. NON-ASSIGNMENT.  The Originator may not assign this Agreement or any of the rights or duties hereunder to any person without Bank’s prior written consent.
    52. GOVERNING LAW AND VENUE.  This Agreement shall be construed in accordance with and governed by the laws of the State of Texas, without reference to its conflict of laws provisions, and applicable federal law.  This Agreement, in its entirety, shall be performable in Potter County, Texas.  As part of the consideration for entering into this Agreement, all parties agree that any litigation to construe or enforce the terms or conditions of this Agreement shall be brought solely in the courts of Amarillo, Potter County, Texas.
    53. SAME DAY ENTRIES.  A Credit or Debit Entry with an Effective Entry Date of the date of or a date prior to the date of the transmission of the Entry or File to Bank and received by Bank prior to the applicable cut-off time set forth in Schedule B shall be considered to be a Same Day Entry.  IAT and Entries above (i) the threshold provided in NACHA Rules or (ii) as established by the Bank, in its sole and absolute discretion, are not eligible for Same Day ACH processing.  In addition to any other fees that Customer is obligated to pay Bank, Customer hereby agrees to pay Bank the Same Day Entry fee established by Bank from time to time for Same Day Entries transmitted to Bank by Customer.
    54. ELECTRONIC SIGNATURE.  The parties agree that the electronic acceptance of this Agreement shall be as valid as an original signature of such party and shall be effective to bind such party to this Agreement. The parties agree that any electronically signed document (including this Agreement) shall be deemed (i) to be "written" or "in writing," (ii) to have been signed and (iii) to constitute a record established and maintained in the ordinary course of business and an original written record when printed from electronic files. Such paper copies or "printouts," if introduced as evidence in any judicial, arbitral, mediation or administrative proceeding, will be admissible as between the parties to the same extent and under the same conditions as other original business records created and maintained in documentary form. Neither party shall contest the admissibility of true and accurate copies of electronically signed documents on the basis of the best evidence rule or as not satisfying the business records exception to the hearsay rule. For purposes hereof, "electronic signature" includes acceptance of this Agreement transmitted by electronic means.

USE OF THE BANK’S SERVICES INDICATES COMPLETE ACCEPTANCE OF THE TERMS AND CONDITIONS SET FORTH IN THIS AGREEMENT, AS MAY BE AMENDED FROM TIME TO TIME. THIS AGREEMENT IS PROVIDED IN ELECTRONIC FORM AND BY USING THE BANK’S SERVICES, YOU AGREE TO ACCEPT THIS AGREEMENT IN ELECTRONIC FORM.  PLEASE CAREFULLY READ THIS AGREEMENT AND ONLY ACCEPT IT IF YOU FULLY UNDERSTAND ITS CONSEQUENCES.

 

Schedule A

ORIGINATOR SELECTED

STANDARD ENTRY CLASS CODE

 

As used in the Agreement, the following* are ACH Standard Entry Class Codes (SEC) approved for use by Originator, subject to any specific restrictions on the types of ACH transactions that may be originated, which are at the sole and absolute discretion of Bank:

  • ARC - Accounts Receivable Entry - An ACH debit created from a check received in the U.S. Mail or a drop box location and converted to an ACH debit. (Refer to NACHA Rules regarding items eligible for check conversion).
  • BOC – Back Office Conversion – During back office processing, an ACH debit is created from a check received at the point of check being tendered or received at a “manned” bill payment location for in-person payments.   (Refer to NACHA Rules regarding items eligible for check conversion).
  • CCD – Corporate Credit or Debit – Either a credit or debit where funds are either distributed or consolidated between corporate entities.  May have one addenda record attached (CCD+)
  • CTX - Corporate Trade Exchange –The transfer of funds (debit or credit) within a trading partner relationship in which payments related information is placed in multiple addenda records. (up to 9,999 addenda records).
  • IAT – International ACH Transaction – A debit or credit Entry that is part of a payment transaction involving a financial agency’s office that is not located in the territorial jurisdiction of the United States. (Refer to NACHA Rules for further definitional details)
  • POP - Point-of-Purchase- ACH debit application used by Originators as a method of payment for the in-person purchase of goods or services by receivers (check conversion).  (Refer to NACHA Rules regarding items eligible for check conversion).
  • PPD - Prearranged Payment and Deposit
    • Direct Deposit - The transfer of funds into a consumer's account.  Funds being deposited can represent a variety of products, such as payroll, interest, pension, dividends, etc.
    • Direct Payment - Preauthorized payment is a debit application. This includes recurring bills that do not vary in amount -- insurance premiums, mortgage payments, charitable contributions, and installment loan payments or standing authorizations where the amount does vary, such as utility payments.
  • RCK - Re-presented Check - An ACH debit application used by originators to re-present a consumer check that has been processed through the check collection system and returned because of insufficient or uncollected funds.  (Refer to NACHA Rules regarding items eligible for check conversion).
  • TEL - Telephone-Initiated Entry – This is used for the origination of a single-Entry debit transaction to a consumer’s account pursuant to an oral authorization obtained from the consumer via the telephone.
  • WEB - Consumer debits authorized via the internet or mobile device; or a person-to-person (P2P) credit regardless of initiation method (Single or Recurring Entry). 

  *The above SEC Codes are the most commonly-used and not an all-inclusive list. 

Bank has identified the following ACH transaction restrictions:

 

 

Schedule B

Processing Schedule

 

Delivery of ACH Files:

  • Internet transmissions - The Originator may electronically transmit files to Bank via the Bank’s internet banking system.
  •  Format and content of entries - All files must be submitted in NACHA format. Originator should refer to Appendix Two in the NACHA Rulebook for specific formatting details.
  •  Timing of delivery - Processing Deadline for:
    • Credit Entries
      • Transmission of a File - until 5:30 p.m. Central Time  (Standard or Daylight) two (2) business days prior to the Effective Date1
    • Debit Entries
      • Transmission of a File - until 5:30 p.m. Central Time  (Standard or Daylight) one (1) business day prior to Effective Date1
  • Same Day ACH Credit Entries Only (Effective September 23, 2016)2
    • Transmission of a File - until  9:00 a.m. Central Time  (Standard or Daylight) on or before the Effective Entry Date. 
  • Same Day ACH Debit Entries  (Effective September 15, 2017)2
    • Transmission of a File - until  1:15 p.m. Central Time  (Standard or Daylight) on or before the Effective Entry Date. 


1“Effective Entry Date” must be a Business Day or the file will be processed on the first business day following the effective date.
2Credit or Debit Entries with an Effective Entry Date of the date of or a date prior to the date of the transmission of the File shall be considered to be a Same Day ACH Entry and shall be subject to the Same Day ACH fee.  IAT and Entries above NACHA Rules limits or limits established by the Bank, in its sole and absolute discretion, are not eligible for Same Day ACH processing.

 

 

 

Schedule C

Security Procedures

 

Originator and Service Provider are responsible to strictly establish and to maintain procedures to safeguard against unauthorized transactions. Originator and Service Provider warrant that no individual will be allowed to initiate transfers in the absence of proper supervision and safeguards, and agrees to take reasonable steps to maintain the confidentiality of the security procedures and any passwords, codes, security devices, and related instructions provided by Bank.  If Originator or Service Provider believes or suspects that any such information has been accessed by an unauthorized individual, Originator or Service Provider will verbally notify Bank immediately, followed by written confirmation.  The occurrence of such notification will not affect any transfers made in good faith by Bank prior to the notification and within a reasonable time period to prevent unauthorized transfers.

Originator and Service Provider are subject to the Security requirements established by Bank in the Online Access Agreement and Electronic Funds Transfer Act Disclosure

Data Security:

Limiting access and securely storing ACH data used in the routing and settlement of ACH transactions is a critical data security precaution.  Originator’s ability to limit access to production data can be done through commercially available software products.  Access can be limited to specific programs, user IDs, or read-only or read-and-edit-only access functionality.  Files can also be transmitted between ACH participants using the following data protection methods:  encryption and authentication.

  • Encryption is a process of scrambling data content through hardware or software in order to protect the confidentiality of a file’s contents.  This information should remain encrypted between all parties in the ACH Network using commercially reasonable procedures.
  • Authentication is a process of ensuring that files and data content have not been altered between the Orginator and receiving points.  Like encryption, this can be done using hardware or software to ensure data integrity.   

Originator and Service Provider understand and agree that the authenticity of any ACH File or Entry transmitted to Bank will be verified pursuant to the following security procedures:

Security Procedure:

No.       Description

1.         Limited Access 

2.         Dual Control

3.         Encryption

4          Authentication

5.         Up-to-date Anti-Virus

REJECTED AND ORIGINATOR’S SECURITY PROCEDURES 

Originator may reject the "commercially reasonable Security Procedures" offered by Bank and elect to use Originator's own Security Procedures.  If Originator rejects Bank's Security Procedure, Originator hereby acknowledges that Bank first offered to Originator a "commercially reasonable Security Procedure.”  Bank may, at its option, refuse to accept Originator's Security Procedures, in which case, Bank shall refuse to accept Entries initiated by Originator.

ORIGINATOR SELECTED SECURITY PROCEDURE   

If Originator elects to use Originator's own Security Procedures, Originator acknowledges that Bank has offered to Originator Security Procedures to verify the authenticity of ACH Entries, which Procedures Originator agrees are reasonable in the context of Originator’s operation, requirements and internal procedures. Originator acknowledges that Bank has offered this Service and Originator has elected to send ACH Entries to Bank using Originator’s selected Security Procedure.  Originator acknowledges and understands that selecting Security Procedures other than Bank’s Security Procedures may substantially increase the risk of loss to Originator. ORIGINATOR HEREBY REJECTS AND REFUSES THE SECURITY PROCEDURES OFFERED BY BANK FOR TRANSMISSION OF ACH ENTRIES TO BANK. ORIGINATOR HEREBY AGREES TO BE BOUND BY ANY TRANSFER, WHETHER OR NOT AUTHORIZED, ISSUED IN ORIGINATOR’S NAME AND ACCEPTED BY BANK IN COMPLIANCE WITH ORIGINATOR’S SELECTED SECURITY PROCEDURES.

 

 

Schedule D

Sample ACH Authorization Agreements

Consumer Authorization for Direct Payment via ACH

(ACH Debits)

ACH Debit Authorization Example Form

 

Consumer Authorization for Direct Deposit via ACH

(ACH Credits)

ACH Credit Authorization Example Form

 

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