ACH Origination Agreement and NACHA Network Rules Adherence

This ACH Origination Agreement (“ACH Agreement”) between you (“Merchant” “you” “your”) and Trice Technologies Inc. (“Trice” “we” “us”) sets forth the terms and conditions of the ACH services provided to the Merchant by Trice (“ACH Services”) which allow the Merchant to initiate credit and debit Entries by means of the Automated Clearing House (“ACH”) network, pursuant to the Operating Rules and Operating Guidelines of the National Automated Clearing House Association (“NACHA”), as updated by NACHA from time to time (“NACHA Rules”). Capitalized terms shall have the definitions ascribed to them in the NACHA Rules. This ACH Agreement extends any prior executed Gateway Services Agreement between Trice Technologies Inc. and the Merchant.

Customer wishes to initiate credit and/or debit Entries through Customer’s accounts maintained at Customer’s depository financial institution and other financial institutions by means of the Automated Clearing House Network (“ACH”) pursuant to the terms of this Agreement and the rules of the National Automated Clearing House Association (“NACHA”) and Trice’s operating rules and procedures for electronic entries, including any exhibits or appendices thereto now in effect, or as may be amended from time to time, (the "Rules"), and Trice is willing to act as Third-Party Sender with respect to such Entries.  This Agreement sets forth the terms and conditions pursuant to which Trice will provide to Customer the ACH Services outlined herein (“Services”).  Customer hereby requests Trice to provide the Service described in this Agreement.  By executing this Agreement and/or using the Services described in this Agreement, Customer accepts and agrees to all terms, conditions, and provisions of this Agreement and agrees that this Agreement sets forth the terms and conditions pursuant to which Trice will provide to Customer the Service outlined herein. Terms not otherwise defined in this Agreement shall have the meaning ascribed to those terms in the Rules.  The term "Entry" shall have the meaning provided in the Rules and shall also mean the data received from Customer hereunder from which Trice initiates each Entry.

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

1. AGREEMENT COMPLIANCE WITH RULES AND LAWS. 

Customer acknowledges it has a copy or has access to a copy of the Rules.  The Rules may also be purchased online at www.nacha.org under the publications tab.  Customer agrees to comply with and be subject to all Rules of NACHA in existence at the date of this Agreement, and any amendments to these Rules made from time to time.  It shall be the sole responsibility of the Customer that the origination of ACH transactions complies with all applicable state and federal U.S. laws with the exception of federal laws related to marijuana (together as "state and/or federal law"), including but is not limited to, sanctions enforced by the Office of Foreign Assets Control (“OFAC”).  It shall further be the sole responsibility of the Customer 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.)  Customer agrees that the performance of any action by Trice to debit or credit an account or transfer funds otherwise required by the Rules is excused from the performance of such action to the extent that the action is inconsistent with state or federal law, including the obligations of Trice under OFAC or any program administered by the United States Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”).  Customer agrees generally and warrants to Trice that all actions by Customer contemplated by this Agreement, including the preparation, transmittal, and settlement of Entries and payment orders, shall comply in all material respects with all applicable state and federal 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”).  Trice will charge the Customer with any fines or penalties imposed by OFAC, NACHA or any organization which are incurred as a result of non-compliance by the Customer and the Customer agrees to fully reimburse and/or indemnify Trice for such charges or fines.   The specific duties of the Customer provided in the following paragraphs of this Agreement in no way limit the foregoing undertaking.  The duties of the Customer set forth in the following paragraphs of this Agreement in no way limit the requirement of complying with the Rules. 

2. AUTHORIZATION. 

Customer authorizes Trice and Trice’s ODFI to Originate Entries on behalf of Customer to Receiver’s accounts

3. UNDERWRITING. 

Customer approval for use of this Service may be subject to underwriting criteria established by Trice from time to time.  If Trice requires application of underwriting criteria to Customer approval for use of this Service, Trice will communicate to Customer the nature and content of that criteria and the information Customer will be required to provide to Trice.  Customer agrees to provide Trice such financial, business, and operating information as Trice may reasonably request in connection with Trice’s underwriting and approval process. 

4. TRANSMISSION OF ENTRIES BY CUSTOMER. 

User(s) shall initiate the debit or credit Entries in Schedule A hereunder on behalf of and selected by Customer and approved by Trice.  User(s) shall transmit Entries to Trice via the Trice portal or API’s. 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 Customer to Trice on any one Business Day shall not exceed the ACH Processing Limit set forth in Customer underwriting process or as subsequently requested by Customer and approved in writing by Trice.  Customer may not reinitiate entries except as prescribed by the Rules.

"Entry Settlement Limit" means the maximum aggregate amount of In-Process Entries permitted to be outstanding at any time, which amount shall be separately communicated to Customer by Trice in writing from time to time.

"In-Process Entries" means the aggregate dollar amount of all credit or debit Entries initiated by Customer 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.

"Over Limit Entry" means an Entry in the amount of which would cause the aggregate amount of In-Process Entries to exceed the Entry Settlement Limit.  Customer agrees that Trice will not process an Over Limit Entry.  Trice will suspend any Over Limit Entry submitted by Customer and may, following its receipt of an Over Limit Entry; suspend all In-Process Entries.  Customer acknowledges that any Over Limit Entry or other In-Process Entries suspended by Trice will not settle on their scheduled Settlement Date.  If Customer wishes to initiate an Entry that would cause the amount of In-Process Entries to exceed the Entry Settlement Limit, Customer may submit to Trice its request to initiate an Entry that otherwise would be an Over Limit Entry.  Customer must submit its request at least 2 banking days prior to the date on which Customer wishes to initiate the Entry that otherwise would be an Over Limit Entry.  Trice may require from Customer financial or other information in connection with Trice’s consideration of the request.  Trice may grant or deny Customer's request at its sole discretion.  In addition to the foregoing, Trice 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 Trice’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, or (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. If any of the foregoing actions are taken by Trice with respect to a particular preauthorized debit/credit Entry, Trice will notify Customer as promptly as practicable, but in no event later than 2 banking days after its decision.  CUSTOMER HEREBY INDEMNIFIES AND HOLDS HARMLESS TRICE FOR ANY LOSSES, DAMAGES, FINES, ASSESSMENTS, COSTS AND EXPENSES INCURRED BY CUSTOMER ARISING FROM ANY SUSPENDED OR UNPROCESSED OVER LIMIT ENTRIES OR ANY IN-PROCESS ENTRIES THAT MAY BE SUSPENDED PURSUANT TO THIS SECTION.

5. INTERNATIONAL ACH TRANSACTIONS (“IAT”).  Customer shall not initiate any IAT Entries without first receiving Trice’s written prior approval and signs an IAT Addendum.

6. CREDIT AND DEBIT ENTRIES; RECORDS RETENTION.  Customer shall obtain an authorization (“Authorization”) as required by the Rules from the person or entity whose account will be debited or credited as the result of a debit or credit Entry initiated by Customer and Customer shall retain the Authorization 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 Rules. Upon request, Customer shall furnish the original or a copy of the authorization to Trice within seven (7) Banking Days. 

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:

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 company’s authorized signer*

WEB

Debit or Credit

Via the Internet for Debit

POS

Debit Only

A debit Entry initiated at an “electronic terminal” as that term is defined in Regulation E, to a consumer’s account to pay an obligation incurred in a point-of-sale transaction or to effect a point-of-sale terminal cash withdrawal.

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.

7. PROCESSING, TRANSMITTAL, AND SETTLEMENT BY TRICE.  Except as otherwise provided for in this Agreement and if Trice elects to accept Entries, Trice shall: 

(a) (i) use commercially reasonable efforts to comply with the instructions of Customer, (ii) process Entries received from Customer to conform with the file specifications set forth in the Rules, (iii) transmit such Entries to Trice’s ODFI, and (iv) settle for such Entries within 2 Banking Days. 

(b) transmit such Entries to Trice’s ODFI by the deposit deadline of the ODFI, provided: (i) such Entries are completely received by Trice’s cut-off time at the location specified by Trice to Customer from time to time; (ii) the Effective Entry Date satisfies the criteria provided by Trice to Customer; and (iii) the ODFI is open for business on such Business Day.  Customer agrees that the ODFI selected by Trice shall be considered to have been selected by and designated by Customer.

8. RESERVES.  

 (a) From time to time, Trice shall evaluate Customer'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 Trice’s discretion.  In connection with these evaluations, Trice reserves the right to require Customer to establish reserves with Trice calculated by Trice to cover Customer's obligations to Trice arising from ACH activities under this Agreement ("Reserves").  Reserves may be expressed as a fixed dollar amount or as a "rolling reserve" calculated based on "rolling" averages determined by Trice’s periodic evaluations.  The amount of reserves required by Trice, if any, will be communicated directly to Customer from time to time.  Customer agrees to establish reserves as required by Trice within 1 Banking Day after receipt of a communication from Trice setting forth the amount of required reserves and the basis of calculation used to determine the amount of reserves.  Trice may suspend ACH processing activity for Customer if Customer fails to establish the required amount of reserves within the time period specified by Trice in its communication to Customer.

(b) Trice is hereby authorized to charge the Reserves as payment for all payments due Trice under this Agreement.

9. REJECTION OF ENTRIES.   Customer agrees that Trice has no obligation to accept Entries and therefore may reject any Entry issued by Customer.  Trice shall notify Customer of the rejection of an Entry within two (2) Banking Days.  Trice shall have no liability to Customer for rejection of an Entry and shall not be liable to pay interest to Customer even if the amount of Customer's payment order is fully covered by a withdrawable credit balance in an Authorized Account of Customer or Trice has otherwise received full payment from Customer.  CUSTOMER HEREBY INDEMNIFIES TRICE FROM AND AGAINST ANY AND ALL RESULTING CLAIMS, DEMANDS, LOSSES, LIABILITIES, OR EXPENSES, INCLUDING ATTORNEYS’ FEES AND COSTS, RESULTING DIRECTLY OR INDIRECTLY FROM FINANCIAL INSTITUTION'S REJECTION OF AN ENTRY.

10. CANCELLATION OR AMENDMENT BY CUSTOMER.   Customer shall have no right to cancel or amend any Entry after its receipt by Trice.  However, Trice may, at its option, accept a cancellation or amendment by Customer.  If Trice accepts a cancellation or amendment of an Entry, Customer must comply with the Security Procedures provided in Section 8 of this Agreement.  If such a request is received by Trice before the affected Entry has been transmitted to the ACH, Trice will use reasonable   efforts to cancel or amend the Entry as requested, but Trice shall have no liability if the cancellation or amendment is not effected.   IF TRICE ACCEPTS A CANCELLATION OR AMENDMENT OF AN ENTRY, CUSTOMER HEREBY AGREES TO INDEMNIFY, DEFEND ALL CLAIMS AND HOLD TRICE HARMLESS FROM ANY LOSS, DAMAGES, OR EXPENSES, INCLUDING BUT NOT LIMITED TO ATTORNEY'S FEES, INCURRED BY TRICE AS THE RESULT OF ITS ACCEPTANCE OF THE CANCELLATION OR AMENDMENT.

11. REVERSALS OF ENTRIES.

(a) General Procedure.  Upon proper and timely request by the Customer, Trice will use reasonable efforts to effect 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; (ii) be made immediately, not to exceed ten (10) hours, upon discovery of the error; and (iii) be accompanied by a Reversal/Cancellation Request form and comply with all of the Rules. In addition, if the Customer requests reversal of a Debit Entry or Debit File, it shall concurrently deposit into the Customer Account an amount equal to that Entry or File.  The Customer must make a reasonable attempt to 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. 

(b)  No Liability: Reimbursement to Trice.  Under no circumstances shall Trice be liable for interest or related losses if the requested reversal of an Entry is not effected.  The Customer shall reimburse Trice for any expenses, losses, or damages it incurs in effecting or attempting to effect the Customer's request for reversal of an Entry.

12. ERROR DETECTION.   Trice has no obligation to discover and shall not be liable to Customer for errors made by Customer, including but not limited to errors made in identifying the Receiver, or an Intermediary or RDFI or for errors in the amount of an Entry or for errors in Settlement Dates.  Trice shall likewise have no duty to discover and shall not be liable for duplicate Entries issued by Customer.  Notwithstanding the foregoing, if the Customer discovers that any Entry it has initiated was in error, it shall notify Trice of such error.  In the event that Customer makes an error or issues a duplicate Entry, Customer shall indemnify, defend all claims, and hold Trice harmless from any loss, damages, or expenses, including but not limited to attorney's fees, incurred by Trice as result of the error or issuance of duplicate Entries.

13. PROHIBITED TRANSACTIONS.  Customer agrees not to use or attempt to use the Services (a) to engage in any illegal purpose or activity or to violate any applicable law with the exception of federal laws related to marijuana, rule or regulation, notwithstanding, (b) to breach any contract or agreement by which Customer is bound, (c) to engage in any internet or online gambling transaction, whether or not gambling is legal in any applicable jurisdiction, or (d) to engage in any transaction or activity that is not specifically authorized and permitted by this Agreement.  Customer acknowledges and agrees that Trice has no obligation to monitor Customer’s use of the Services for transactions and activity that is impermissible or prohibited under the terms of this Agreement; provided, however, that Trice reserves the right to decline to execute any transaction or activity that Trice believes violates the terms of this Agreement.

14. ADDITIONAL CUSTOMER 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, Customer hereby warrants to Trice that for each such ACH Entry submitted for processing, Customer has obtained all authorizations from the Receiver as required by the Rules, by Regulation E or other applicable law, and this Agreement.  Customer also makes the additional warranties to Trice that Trice makes to each RDFI and ACH Operator under the Rules for the respective SEC codes for Entries originated by Customer.  CUSTOMER HEREBY INDEMNIFIES AND HOLDS TRICE HARMLESS FROM ANY LIABILITY ARISING OUT OF CUSTOMER’S BREACH OF THESE WARRANTIES. 

15. INCONSISTENCY OF NAME AND ACCOUNT NUMBER.   The Customer acknowledges and agrees that, if an Entry describes the Receiver inconsistently by name and account number, payment of the Entry Transmitted by Trice’s ODFI to the RDFI may be made by the RDFI on the basis of the account number supplied by the Customer, even if it identifies a person different from the named Receiver, and that the Customer’s obligation to pay the amount of the Entry to  Trice is not excused in such circumstances.  Customer is liable for and must settle with Trice for any Entry initiated by Customer that identifies the Receiver by account or identifying number or by name and account or identifying number. 

16. AMENDMENTS. 

Except as provided in Section 31, Trice may amend this agreement from time to time upon written notice to the Customer.  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 Trice is subject, then this Agreement shall be amended to the extent necessary to comply with such statute, regulation, or policy.  Alternatively, Trice may terminate this Agreement if it deems such action necessary or appropriate under the circumstances.  Trice shall have no liability to the Customer as a result of any such violation, amendment, or termination.  Any practices or course of dealings between Trice and the Customer, or any procedures or operational alterations used by them, shall not constitute a modification of this Agreement or the Rules, nor shall they be construed as an amendment to this Agreement or the Rules.

Schedule A

CUSTOMER SELECTED

STANDARD ENTRY CLASS CODE

As used in the Agreement, the following* are ACH Standard Entry Class Codes (SEC) approved for use by Customer via the Trice portal and/or Trice API’s , subject to any specific restrictions on the types of ACH transactions that may be originated, which are identified by Trice below:

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).

POS – Point-of-Sale - A debit Entry initiated at an “electronic terminal” as that term is defined in Regulation E, to a consumer’s account to pay an obligation incurred in a point-of-sale transaction or to effect a point-of-sale terminal cash withdrawal.

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.

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

Schedule B

Processing Schedule

Delivery of ACH Transactions and Files:

• Transaction Processing

Customer must electronically transmit files to the Trice via the Trice portal and/or Trice API;s.

• File Processing 

Trice will not accept Files for processing on designated Federal Reserve holidays, as well as all Saturdays and Sundays.  Likewise, entries should not have Effective Entry Dates for these days.

• Timing of delivery

Processing Deadline for:

Credit Entries

Transmission of a File –until 2:00 p.m. PT two (2) business days prior to Effective Entry Date

Debit Entries

Transmission of a File –until 2:00 p.m. PT one (1) business day prior to Effective Entry Date1

• Same Day ACH Credit Entries Only

Transmission of a File - until 10:00 a.m. PT on or after the Effective Entry Date. 

Transmission of a File- until 10:00 a.m. PT on or after the Effective Entry Date. 

• Same Day ACH Debit Entries  2

Transmission of a File - until 10:00 a.m. PT on or after the Effective Entry Date. 

Transmission of a File- until 2:00 p.m. PT on or after the Effective Entry Date.