If you choose to initiate paperless Entries (meaning as provided in the NACHA Rules and meaning the data received from you hereunder from which Bank prepares Entries) to or through Bank to accounts maintained at Bank and/or other financial institutions by means of the Automated Clearing House ("ACH") through which Bank initiates and settles such Entries, you are agreeing to be bound by these additional terms and conditions. The term "Master Agreement" shall mean the Master Agreement for Treasury Management Accounts and Services entered into between the you and the Bank. This Agreement establishes the rules that govern electronic access to the Bank, including the accounts of you and its affiliates and related entities that accept or receive Services.
NACHA Rules. You and Bank shall be bound by and comply with the Operating Rules and guidelines of the National Automated Clearing House Association (“NACHA”), as amended (“NACHA Rules”) in effect from time to time. Capitalized terms used herein but not defined herein shall have the meanings assigned to such terms in the NACHA Rules. Both you and Bank acknowledge that the obligations of each hereunder are subject to the NACHA Rules and that in the event of a conflict between the NACHA Rules and this Agreement, the NACHA Rules shall govern. This Agreement may, however, impose additional obligations upon you not inconsistent with the NACHA Rules. A copy of the NACHA Rules is available at https://www.nacha.org/. In the event you violate any of the applicable NACHA Rules and NACHA imposes a fine on the Bank because of your violation, the Bank may charge the fine to you, and you hereby agree to pay such fine.
Authorizations. You shall obtain a signed authorization from any Receiver authorizing you to initiate ACH Entries and enabling the Receiving Depository Financial Institution ("RDFI") to accept such Entries for charge against or credit to the Receiver's account. The original or a copy of each authorization shall be retained by you for a period as prescribed by the NACHA Rules after the date of termination or revocation of such authorization. All such authorizations shall be procured in accordance with the NACHA Rules, Article 4A of the Texas Business and Commerce Code, and with respect to consumer accounts, Federal Reserve Regulation E. You shall, upon the request of Bank or RDFI, furnish the original or a copy of such authorization.
Additional Security Procedures.
(a) Any Entry shall either be a "credit Entry" or a "debit Entry", as further defined in the NACHA Rules. Prior to or at the same time you deliver a File directly to Bank (other than through a third-party service provider to whom Files are delivered by you for further processing and delivery to Bank, referred to herein as a “Third-Party Provider”), you shall deliver to Bank an Effective Entry Date and a total of all Entries making up the File ("Transmittal Register"). Entries being hand delivered will be presented to ACH Coordinator or designated individual at Bank. You acknowledge that the security procedures set forth herein are commercially reasonable in light of your circumstances and the type and frequency of Entries initiated hereunder. You further acknowledge that the security procedures set forth herein are not designed to detect errors in transmission or duplicate Entries or duplicate Files and no security procedure for the detection of such errors has been agreed upon between you and Bank. If an Entry (or request to cancel an Entry) received by Bank was delivered or authorized by you, you shall be obligated to pay the amount of the Entry as provided herein, whether or not Bank complied with the security procedures with respect to that Entry and whether or not the Entry was erroneous in any respect or that error would have been detected if Bank had complied with such procedures.
(b) You are strictly responsible to establish and maintain the procedures to safeguard against unauthorized transmissions. You 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 security procedures described herein. If you believe or suspect that any such information or instructions have been known or accessed by unauthorized persons, you agree to notify Bank immediately followed by written confirmation. The occurrence of unauthorized access will not affect any transfers made in good faith by Bank prior to receipt of such notification and within a reasonable time period to prevent unauthorized transfers.
(c) Bank shall be entitled to audit the Entries initiated by you, together with all associated documentation and data, to determine your compliance with the NACHA Rules and this Agreement.
Compliance with Security Procedure.
(a) You agree to comply with any and all security procedures and requirements of the Bank. If an Entry (or a request for cancellation or amendment of an Entry) received by Bank purports to have been transmitted or authorized by you, it will be deemed effective as your Entry (or request) and you shall be obligated to pay Bank the amount of such Entry even though the Entry (or request) was not authorized by you, provided Bank accepts the Entry in good faith and acted in compliance with the security procedures set forth herein with respect to such entry. If signature comparison is to be used as a part of that security procedure, Bank shall be deemed to have complied with that part of such procedure if it compares the signature accompanying a file of Entries (or request for cancellation or amendment of an Entry) received with the signature of an authorized representative of you (an "Authorized Representative") and, on the basis of such comparison, believes the signature accompanying such file to be that of such authorized representative.
(b) If an Entry (or request for cancellation or amendment of an Entry) received by Bank was transmitted or authorized by you, you shall pay Bank the amount of the Entry, whether or not Bank complied with the security procedures set forth herein with respect to that Entry and whether or not that Entry was erroneous in any respect or that error would have been detected if Bank had complied with such procedure.
Recording and Use of Communications. You and Bank agree that all telephone conversations or data transmissions between you and Bank or their agents made in connection with this Agreement may be electronically recorded and retained by either party by use of any reasonable means.
Processing, Transmittal and Settlement by the Bank.
(a) Except as provided below in Section 7, (On-Us Entries) and Section 13, (Rejection of Entries), Bank shall (i) process Entries received from you to conform with the file specifications set forth in the NACHA Rules, (ii) transmit such Entries to an Automated Clearing House Operator, (“ACH Operator”), and (iii) settle for such Entries as provided in the NACHA Rules.
(b) Bank shall transmit such Entries to the ACH Operator by the deadlines set forth in Schedule A attached hereto prior to the Effective Entry Date shown in such Entries, provided (i) such Entries contain an Effective Entry Date and are received by Bank on a business day and prior to Bank’s cutoff times as shown on Schedule A attached hereto; and (ii) the ACH Operator is open for business on such business day. For purposes of this Agreement, a "business day" is a day on which Bank is open to the public for carrying on substantially all of its business, other than a Saturday, Sunday, Bank holiday (see Bank Holiday Schedule), or Federal holiday and Entries shall be deemed received by Bank, in the case of transmittal by tape, which the transmission (and compliance with any related security procedure provided for herein) is completed as provided in Schedule A.
(c) If any of the requirements of Section 6(b) are not met, Bank shall use reasonable efforts to transmit such Entries to the ACH Operator by the next deposit deadline of the ACH Operator following that specified in Schedule A, which is a day on which the ACH Operator is open for business.
On-Us Entries.Except as provided below in Section 13, (Rejection of Entries), in the case of an Entry received for credit to an account maintained with Bank (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 requirement set forth in clause (i) of Section 6(b) is met. If such requirement is not met, Bank shall use reasonable efforts to credit the Receiver's account of such Entry no later than the next business day following such Effective Entry Date.
Initiation of Entries. In order to initiate Entries pursuant to this Agreement, you shall furnish Entries on the medium and in the format specified for the type of Entry by the NACHA Rules. Each Entry must be delivered as specified and in accordance with the cutoff times and other requirements stated herein and in Schedule A. Bank may handle Entries and Files delivered by you to Bank, and those it receives from other customer, in any order selected by Bank in its sole discretion, and Bank may use any means or routes which it, in its sole discretion, may consider suitable. Bank shall not be deemed to have accepted any Entries initiated hereunder until it executes such Entries by transmitting the Entries to an ACH Operator and shall not be obligated to provide notice to customer of transmittal of entries to the ACH Operator. If you deliver or transmit Entries to a Third-Party Provider for further processing and delivery to Bank, you must comply with Third-Party Provider's delivery schedule, formats, and security procedures and Third-Party Provider shall be your agent. In the event you do not send Entries in ACH format, Bank will not be liable for errors or timely origination of Entries if you did not deliver conforming Entries in a timely manner to Bank.
Prenotifications. You shall comply with the prenotification procedures prescribed by the NACHA Rules.
Remaking Entries. In the event Entries are rejected by the ACH Operator or Bank for any reason other than Bank's failure to exercise ordinary care, you shall be obligated to remake such Entries. You shall retain and provide to Bank on request all information necessary to remake any File for a reasonable time after the Settlement Date with respect to such Entries.
Returns. You will promptly provide available, fully collected funds to reimburse Bank if any debit Entry is rejected or if any adjustment Entry is received by Bank after Bank has permitted you to withdraw funds in the amount thereof. You shall pay interest to Bank on the amount of any such returned debits or adjustment Entries at the rate specified in the Master Agreement with respect to overdrafts. Bank reserves the right to require you to deposit funds to be held by Bank in one of your accounts or in a separate account held by and pledged to Bank for the purpose of paying for returned Entries or adjustment Entries, in the event that Bank determines, in its sole discretion, that such amount or account is necessary due to a larger than usual amount of returned Entries or adjustment Entries or other adverse conditions with respect to you or Entries initiated by you. Bank shall have no obligation to retransmit a returned Entry and you agree not to reinitiate Entries which have been returned.
Cancellation or Amendment of Entry by Customer. You shall have no right to the cancellation or amendment of any entry after its receipt by Bank. Bank shall use reasonable efforts to act on a request by you for cancellation of an Entry prior to transmitting it to the ACH Operator. Bank shall not be liable for its failure or inability to cancel an Entry. You shall indemnify Bank and hold it harmless from and against any and all claims, demands, liabilities, expenses (including but not limited to reasonable attorney's fees and costs), loss or damage of any nature whatsoever arising directly or indirectly out of Bank's cancellation of any Entry.
Rejection of Entries and Notices of Rejected and Returned Entries. Bank may reject any Entry which does not comply with the Bank’s requirements. Bank may reject any On-Us Entry for any reason for which an Entry may be rejected under the NACHA Rules. An Entry shall not be deemed to be accepted until Bank executes the Entry by transmitting the Entry to an ACH Operator. Any unexecuted Entry for which no notice of rejection is given shall be deemed canceled at the close of the fifth Banking Day after the requested Settlement Date. Bank shall use reasonable means and efforts to notify you of Bank's rejection of any Entry, no later than the business day such Entry would otherwise have been transmitted by Bank to the ACH Operator or, in the case of an On-Us Entry, its Effective Entry Date, provided, however, Bank shall have no liability if it fails to give any such notice. Bank shall use reasonable means and efforts to notify you of any returned Entry received from the ACH Operator no later than one business day after the business day of such receipt, provided however, the Bank shall have no liability if it fails to give any such notice. Notices of rejection or return Entries is deemed effective when given. Bank shall not be liable to you for any delay or failure in executing an Entry unless such delay or failure is proximately caused by Bank's failure to exercise ordinary care and its liability therefore shall be limited to interest payable pursuant to the “Liability” Section below on the amount of any such Entry from the requested Settlement Date until the earlier of (i) the date notice of rejection of such Entry is given by Bank or (ii) the close of the Fifth Banking Day following the Settlement Date.
Use of Identifying Numbers. You acknowledge that, if an Entry describes a Receiver inconsistently by name and account number, payment of the Entry might be made by the RDFI on the basis of the account number even if it identifies a person different from the named Receiver, and that your obligation to pay the amount of the Entry to Bank shall not be excused in such Circumstances.
Limitation on Processing of Entries.
(a) Settlement Date. In the Event you deliver an Entry with a requested Settlement Date either (i) earlier than the date Bank actually receives the Entry or (ii) such that the payment or debit cannot be made by the requested Settlement Date, you authorize Bank to send the Entry to the ACH Operator notwithstanding the stated Settlement Date, and accepts responsibility for any delay in the transfer of funds and for notifying the Receiver of such delay.
(b) Special Instructions. Bank shall not be obligated to comply with any special instructions of you with respect to any Entries delivered to Bank, unless you have obtained the express written agreement of Bank for such special instructions.
(c) Calendar. If you deliver Entries directly to the Bank (other than through a Third-Party Provider), prior to initiating the first Entry hereunder, and on an annual basis thereafter, you shall deliver to Bank a calendar setting forth the dates for delivery of Files to the Bank and the requested Settlement Dates with respect to the Entries contained in a File. Bank may refuse to execute any Entry which is transmitted to Bank at times other than those set forth in said calendar. Bank shall not be liable or responsible for initiating any Entries with respect to which no calendar has been delivered to Bank hereunder or which is a deviation from the calendar which customer provided Bank.
Customer’s Accounts. You shall be requested to maintain an account or accounts at Bank, through which Entries return Entries, and adjustment Entries may be debited or credited. You agree that Bank may debit any of your accounts at Bank for any funds owed to Bank hereunder and shall credit an account designated by you for any amount received by Bank for you with respect to debit Entries or adjustment Entries. Bank shall be entitled to withhold the availability of funds credited to your account hereunder for up to six (6) business days after the Settlement Date for such Entries or Adjustments. Bank shall not be required to provide notice of the crediting or debiting of any account of you at Bank hereunder, other than to provide you with its regular account statement.
Payment for Credit Entries. By the opening of business at Bank on the Settlement Date with respect to each Entry, you shall provide Bank with immediately available, finally collected funds in an amount equal to such credit Entry or group of credit Entries. If such finally collected funds have not been provided to Bank, Bank may, in its discretion, debit any account of you maintained at Bank for the payment of such Entries.
Pre-funding. Bank reserves the right, in its sole discretion, to require either (i) payment in finally collected, immediately available funds for any credit Entry prior to executing such Entry or (ii) that finally collected, immediately available funds be placed in a separate pledged deposit account ("Collateral Account") equal to the amount of any credit Entry prior to executing such Entry. You hereby grant the Bank a security interest in the Collateral Account. In the event that, for any reason, the Collateral Account does not contain sufficient finally collected funds at the time the Bank is prepared to execute the credit Entries, Bank shall not be obligated to execute such Entries until its first regularly scheduled transmission to the ACH Operator after the Collateral Account contains sufficient funds. This Agreement is not a credit agreement and the you shall not be entitled to advance or loan hereunder, despite any prior course of dealing.
Provisional Settlement. You acknowledge that the NACHA Rules provide that payment of an Entry by the RDFI to the Receiver is provisional until receipt by the RDFI of final settlement, and that, if final settlement is not received, the Entry may be reversed, the RDFI shall be entitled to a refund from Receiver of the amount credited, and you will not be deemed to have paid the Receiver the amount of such credit Entry.
Duty to Report. You shall review its regular account statement and any other confirmation of any Entry containing information with respect to such Entry promptly upon receipt, and shall notify Bank immediately as to any unauthorized or erroneous Entry; provided, however, that, to the extent permitted by applicable law, Bank shall not be liable with respect to such Entry, including any liability with respect to interest on the amount of any such Entry, unless you reports any such unauthorized or erroneous Entry within 5 days of receipt of the statement or confirmation containing information with respect thereto, whichever is earlier.
Warranties of Customer. You warrant to Bank and all other parties entitled to the benefit of such warranties pursuant to the NACHA Rules that:
(a) You have complied with the prenotification procedure set forth in the NACHA Rules, including the forwarding of a copy of any authorization agreements requested as a result thereof.
(b) Each Entry initiated is timely and is in accordance with an authorization agreement which you have on hand, executed by the Receiver to whose account the Entry is to be credited or debited.
(c) At the time each Entry is transmitted to the ACH Operator, you do not have actual knowledge of the revocation of any authorizations agreement by the Receiver.
(d) The Entry complies in all other respects with the requirements of the NACHA Rules and applicable laws and is subject to all other warranties required by the NACHA Rules.
(e) You have established and will maintain procedures reasonably adapted to comply with the Electronic Funds Transfer Act and Federal Reserve Regulation E, as they may be amended from time to time.
Breach of Warranties. If you breach any of the foregoing warranties or any provision of this Agreement, you shall indemnify Bank, and all other parties entitled to the benefit thereof pursuant to the NACHA Rules, from and against any and all claims, demands, liabilities, expenses (including reasonable attorneys' fees and costs), loss or damage resulting directly or indirectly from or arising out of any breach of any of the foregoing warranties or this Agreement.
Liability and Limitations on Liability. Subject to the any and all limitations and to the “Operation” Section and the “Duty to Report” Section above, and to the extent permitted by applicable law, Bank's liability with respect to lack of ordinary care in the execution of a credit Entry (including any unauthorized credit Entry) shall be limited to a refund of the amount of such Entry with interest from the Settlement Date of such Entry until the date of the refund, but not to exceed sixty (60) days, or in the event of a delay in payment to (i) the Receiver of an executed credit Entry or (ii) you of an executed debit Entry, due in each case solely to Bank's failure to exercise ordinary care, interest as provided herein on the amount of such Entry from the Settlement Date until the Bank has properly executed the Entry, but not to exceed sixty (60) days. In no event shall Bank be liable to you with respect to an Entry unless you notify Bank of any claim or dispute with respect thereto within one (1) year after you receives its regular account statement containing information relating to such Entry. At Bank's option, any interest compensation payable to you for the loss of use of funds hereunder may take the form of either (a) a direct cash payment of interest calculated at the applicable Federal Funds Rate or (b) an adjustment to your account balance to reflect properly the average balances that would have resulted had no error occurred with a balance earnings credit at the current earnings credit rate established by agreement between you and Bank for such adjusted balances. The applicable Federal Funds rate is the average of the Federal Funds rates published by the Federal Reserve Bank of New York for each of the days for which interest is payable hereunder, divided by 360. The Federal Funds rate for any day on which a published rate is not available is the same as that published for the next preceding date for which there is a published rate.
Account Transfers by Customer. Bank offers ACH services to business customers and correspondent banks to allow for transfers of funds to and from their accounts at Bank and to and from accounts at other banks. The Service will be provided with use of Bank’s ACH software package or through the use of products offered by Bank and be transmitted via the Internet through a virtual private network or secure through connection to ACH Operator allowing complete security of ACH files. You acknowledge that your use of this Service for ACH transactions will be initiated by you based on your input of information creating a file. As such, Bank shall have no responsibility for inaccurate file data or out-of-balance files or errors on files transmitted by you and the indemnities made by you in this Agreement shall apply to this Paragraph. You shall be required to maintain an account with Bank containing collected funds equal to the amount of the file to be transferred in order to use this service.
Account Transfers by Third-Party on Behalf of Customer. Bank offers services that allow third-parties to act as a Service Provider (as defined in the online electronic Third-Party Provider ACH Services, available at Bank’s website and incorporated herein by reference, for you. If you allow a Third-Party Provider to act as a Service Provider on behalf of you as an Originator (as defined in a Third-Party Provider ACH Services), you agree to complete acceptance of the terms and conditions set forth in the Third-Party Provider ACH Services, as may be amended from time to time.
Customer Implementation Schedule. The Bank shall use reasonable efforts to permit processing of the your ACH Entries by the starting date requested, but shall not be obligated to commence processing on such date. The starting date will be subject to successful testing of data formats and file transmission, where applicable, as well as successful transmission of a zero-dollar prenotification transaction to each Receiver at least ten calendar days in advance of the requested starting date as required by the NACHA Rules.
Bank Processing Schedule.
Bank Holiday Schedule. Delays in processing may result if your scheduled Settlement or Delivery Dates coincide with the Bank's holidays (see Bank Holidays) or Saturdays and Sundays.
Delivery and Cutoff Times
|Transaction Type||Delivery Date||Time|
|ACH Credits (Direct Deposit)||Two Days Prior to Settlement Date||4:00 p.m.|
|ACH Debits (Direct Debit)||Two/One Day(s) Prior to Settlement Date||4:00 p.m.|
|ACH Credits (Corp. Disbursement)||One Day Prior to Settlement Date||4:00 p.m.|
|ACH Debits (Corp. Collections)||One Day Prior to Settlement Date||4:00 p.m.|
|Asynchronous Transmissions||Follow Delivery for Transaction Type||4:00 p.m.|
In determining its Delivery Schedule, you should ensure that no Delivery Dates or Settlement Dates fall on a Bank Holiday or Saturday or Sunday.
Authorization to Correct ACH File. You hereby authorize the Bank to make corrections as needed.
Wire Transfers. Subject to all other terms and conditions set forth above, those governing your account and those applicable to Electronic Funds Transfers, including any applicable Fees, you may initiate wire transfers from your account to an account at another financial institution via the Bank’s wire transfer procedures, provided that: (i) all wire transfer requests are received by Bank before 2:00 p.m. on the business day you desire the wire transfer: and (ii) unless otherwise agreed by Bank in advance, the account has sufficient collected funds to pay the requested wire transfer.
Bank shall not be obligated to send wire transfer notices to you, except as may be reflected in your monthly bank statement and except as provided in the Bank’s Services. You shall be solely responsible for verifying the accuracy of the information contained in a wire transfer request. Bank, in its sole discretion and without prior notice to you, may refuse to honor any wire transfer request if honoring the request would overdraw the account or violate the terms of this Agreement or any local, state, or federal law. In the event your account is overdrawn as a result of Bank honoring a wire transfer request, such action shall not be deemed a waiver of Bank’s rights regarding future wire transfer requests, and you agree to replenish the overdrawn account on or before the next business day of Bank.
Additional Governing Law. This Agreement shall be subject to the provisions of all applicable regulations and operating circulars of any Federal Reserve Bank, any other applicable provision of federal or state law, and the NACHA Rules. In complying with Office of Foreign Assets Control regulations, we reserve the right to temporarily suspend processing of a transaction (particularly on international ACH transaction or wire transfer) for greater scrutiny that might result in delayed settlement or availability. Only lawful ACH entries and wire transfers may be originated, and no entry may be originated that violates the laws of the United States.