ACH THIRD-PARTY SENDER SERVICE TERMS
Section 1. THE SERVICE.
These ACH Third-Party Sender Service Terms (the “Service Terms”) set forth the terms under which Customer may
act as a Third-Party Sender to transmit Credit and/or Debit Entries through Bank by means of the Automated
Clearing House Network (“ACH”) (the “Service”). These Service Terms supplement the ACH Origination Service
Terms. The Service is also subject to the General Provisions of the Treasury Management Terms and Conditions
Agreement (the “Agreement”) as if fully incorporated herein and all Applicable Laws. In the event of a conflict
between these Service Terms and other terms in the Agreement, including the ACH Origination Service Terms,
these Service Terms shall control. Unless otherwise defined herein, any capitalized terms shall have the meaning
as set forth in the Agreement or the Nacha Operating Rules and Guidelines (the “Rules”), as applicable. Any
reference to the Agreement herein shall be deemed to include these Service Terms.
Section 2. REGISTRATION OF THIRD-PARTY SENDER; REPRESENTATIONS AND WARRANTIES.
Customer understands that Bank must register Customer as a Third-Party Sender with Nacha and agrees to fully
cooperate in that process. Customer hereby remakes, as a Third-Party Sender, the representations, warranties
and covenants made in the ACH Origination Service Terms. Customer hereby represents, warrants and covenants
that Bank is hereby authorized to originate Entries on behalf of each Originator for which Customer acts as a
Third-Party Sender to the Receivers’ accounts, and hereby makes to Bank all additional representations and
warranties made by a Third-Party Sender to an Originating Depository Financial Institution (“ODFI”) under the
Rules. Furthermore, Customer will provide Bank with the names and pertinent information required by Bank with
respect to any Third-Party Sender for which it transmits Entries through Bank (a “Nested Third-Party Sender”),
before transmitting any such Entries, for the purpose of Bank’s due diligence and registration of the Nested Third-
Party Sender with Nacha.
Section 3. REQUIREMENTS AS TO ORIGINATORS.
(a) Customer agrees that, with respect to any Originator, Customer shall enter into a binding
agreement with each Originator (“ACH Agreement”) that (i) authorizes Bank to originate Entries on behalf of the
Originator to Receivers’ accounts; (ii) restricts Entries by impermissible SEC Codes or otherwise restricts Entries as
set forth in the ACH Origination Service Terms; (iii) the ACH Agreement binds the Originator to comply with the
Rules and contains at least the same provisions as between Bank and Customer, including, without limitation,
authorization requirements, the audit rights of the Bank set forth in the ACH Origination Service Terms, and will
be responsible for verifying the proper authorization and execution of all such agreements, which must be
executed by authorized signers of Originators; (iv) the Originator must agree not to originate Entries that violate
Applicable Laws; (v) includes terms that permit Customer to terminate or suspend the ACH Agreement for any
breach of the Rules or as required for Customer, as Third-Party Sender, to comply with the Rules; and (vi) permits
Customer and Bank to audit the Originator’s compliance with the ACH Agreement and the Rules. The ACH
Agreement must be agreed for use by Bank and satisfy all of the requirements of the Rules prior to use by
Customer; provided, that Bank’s review and agreement shall not be relied upon by Customer as confirmation that
the ACH Agreement complies with Applicable Laws and the Rules.
(b) Prior to executing an ACH Agreement with an Originator, Customer shall have conducted an
investigation appropriate to the degree of risk associated with the Originator and in accordance with Bank’s due
diligence requirements, including, as deemed necessary, physical inspection of the Originator’s premises, and
Originator’s data security and customer identification processes, and Customer shall have verified through such
investigation that the Originator conducts a legal bona fide business operation and has the proper facilities,
equipment, and inventory, and, where necessary, licenses and permits to do business. At the request of Bank,
Customer will provide photographs taken of the Originator’s premises, inventory, or product, and/or a credit
bureau report on principals of the business.
(c) Upon Bank’s request, Customer shall provide Bank with the following information pertaining to
each Originator for which it initiates Entries: name; principal business activity; street address; telephone number;
employer identification number; name and telephone number of the principal; date of the ACH Agreement; and
summary of Customer’s due diligence. Bank shall have the right, in its sole discretion, to refuse to accept Entries
from any such Originators. Customer shall, following periodic requests from Bank, provide to Bank any
information considered to be reasonably necessary to identify each Originator on whose behalf Customer initiates
Entries hereunder within two (2) Business Days of Bank’s request.
(d) At all times, Customer shall be responsible for supervising and overseeing each Originator’s
performance under the applicable ACH Agreement and shall be responsible for their respective compliance with
Applicable Laws, including the Rules.
(e) Customer shall establish, implement and periodically review exposure limits for Originators and
establish policies and procedures to: (i) monitor the Originators’ origination and return activity across multiple
Settlement Dates and require corrective action if Return Rates exceed the requirements of the Rules; and (ii)
enforce restrictions on the types of Entries that may be originated and enforce exposure limits, each as
established by Bank from time to time.
Section 4. TRANSMITTAL OF ENTRIES BY CUSTOMER.
Customer will initiate Entries as provided in the ACH Origination Service Terms. Customer, on behalf of
Originators, authorizes Bank to originate the types of Entries submitted by Customer as a Third-Party Sender on
behalf of an Originator to Receivers’ accounts; provided, where required, such Entries are in compliance with the
formatting and other requirements set forth in the Rules, the ACH Origination Service Terms, the Operational
Instructions and any other documentation provided to Customer by Bank; and Bank agrees to originate and
transmit such Entries in accordance with these Service Terms. For each Entry for which Customer is not the
Originator, Customer represents and warrants that it will not transmit to Bank any Entries that violate the Rules or
Applicable Laws or that are otherwise restricted by Bank, and represents and warrants that the Originator of the
Entry has agreed to assume the responsibilities of an Originator under the Rules and has acknowledged that the
Originator may not initiate Entries that violate the Rules or Applicable Laws.
Section 5. OBLIGATIONS OF CUSTOMER AS A THIRD-PARTY SENDER UNDER THE RULES.
In addition to any other duties, responsibilities, warranties, representations and liabilities under other sections of
the Agreement, for each and every Entry transmitted by Customer as a Third-Party Sender to Bank, Customer
represents and warrants to Bank and agrees that Customer, as a Third-Party Sender, shall: (a) perform all of the
duties, including, but not limited to, the duty to identify Originators; (b) assume all of the responsibilities,
including, but not limited to, the responsibilities of ODFIs and Originators; (c) make all of the warranties, including,
but not limited to, the warranties of ODFIs, the warranty that each Originator has agreed to assume the
responsibilities of an Originator under the Rules and is legally able to do so; (d) assume all of the liabilities,
including, but not limited to, liability for indemnification for failure of an Originator to perform its obligations as
an Originator of Third-Party Sender in accordance with the Rules; and (e) limit the dollar value and types of the
Entries that are transmitted to Bank by Customer as Third-Party Sender as set forth in the Operational
Instructions.
Section 6. LIMITS ON ACH ENTRIES OR FILES.
In addition to the limitations set forth in the Operational Instructions, Bank may place additional limits on the
amount or the type of Credit Entries or Debit Entries that Customer may originate in a file, batch or any single
Entry. Such limit will be communicated by Bank to Customer from time to time and Customer hereby agrees to
communicate any such limitations to each Originator and ensure that all Entries originated by Customer comply
with such limitations. Bank reserves the right to modify limits at its sole discretion.
Section 7. ANNUAL SELF-ASSESSMENT.
Customer must conduct an annual audit of Customer’s compliance with the Rules and an annual self-assessment
as to data security and as to compliance with the Rules and maintain the results for review by Bank for not less
than six (6) years. Customer agrees to provide documentation supporting such audit and self-assessment within
five (5) Business Days of request from Bank.
Section 8. REQUIREMENTS AS TO NESTED THIRD-PARTY SENDERS.
(a) ACH Agreement. If Customer transmits Entries for any Nested Third-Party Sender, Customer must
have an ACH Agreement with the Nested Third-Party Sender that complies with the Rules and includes the
requirements of subsections (a), (b) and (c) of Section 3 of these Service Terms as if the Nested Third-Party Sender
were Customer and Customer were Bank. Such ACH Agreement between Customer and its Nested Third-Party
Sender shall also include the representations and warranties made by Customer in the Agreement, with Bank as
an express beneficiary, and the indemnification of Bank as provided in the Agreement. Further, Customer must
provide the list of such Nested Third-Party Sender’s Originators with the information set forth in Section 2 above
before transmitting Entries for the Nested Third-Party Sender and provide to Bank any information considered to
be reasonably necessary to identify each Originator on whose behalf it initiates Entries within two (2) Business
Days of Bank’s request. At all times, Customer shall be responsible for each Nested Third-Party Sender’s
compliance with the Rules.
(b) Audit Rights. In addition to Bank’s audit rights under the Agreement, Bank reserves the right to
conduct periodic audits and other due diligence of each Nested Third-Party Sender and its Originators in Bank’s
discretion as long as the relationship continues to the same extent that Bank may audit or request information on
Customer and its Originators.
(c) Termination. In addition to Bank’s termination rights under the Agreement, Bank has the right to
terminate or suspend these Service Terms, or any Originator or Nested Third-Party Sender of Customer, for any
breach of the Rules or as required for Bank to comply with the Rules.
Section 9. INDEMNIFICATION.
In addition to all other indemnification obligations under the Agreement, Customer agrees to indemnify, defend
and hold Bank harmless from and against any and all Losses that arise directly or indirectly from use of the Service
by any Originator or Nested Third-Party Sender, including the failure of any Originator or Nested Third-Party
Sender to perform its obligations under Applicable Laws, including the Rules.
Section 10. PAYMENT.
Customer, as a Third-Party Sender, shall maintain sufficient Available Funds in the Accounts to cover its payment
obligations under these Service Terms and agrees to pay Bank for each ACH Transaction originated by Customer
as Third-Party Sender on behalf of any Originator or Nested Third-Party Sender for which Bank is not paid.