REV02042021

1. CLIENTS’S AUTHORITY. CLIENT specifically warrants to Paya-EFT that CLIENT has taken all necessary legal action and has authority to enter into this Agreement with Paya-EFT. It further warrants that the person(s) signing for and on behalf of CLIENT is specifically authorized and directed to do so by CLIENT. CLIENT acknowledges that this Agreement constitutes the legal, valid and binding obligation of CLIENT, enforceable in accordance with its terms. The attached Schedules for the Checks-By-Web services are hereby incorporated into these T&C’s to the extent Client selects such services in the Amendment.
2. CLIENT’S PUBLIC DISCLOSURE RESPONSIBILITIES. From time to time, Paya-EFT may disseminate (i) changes to rules governing the Services; and (ii) educational and promotional materials to CLIENT for CLIENT to distribute to customers. CLIENT further agrees to immediately (i) remove and properly dispose of Paya-EFT’s stale promotional materials and to display the most current materials upon receipt of such from Paya-EFT; and (ii) comply with such rule changes. CLIENT will discontinue the use of all of Paya-EFT’s promotional materials and properly remove said materials upon receipt of written notification of suspension or termination of this Agreement. In the event Clients’ account is reinstated by Paya-EFT after suspension, CLIENT shall redisplay appropriate materials upon receipt of written verification of resumption of service by Paya-EFT.
3. RESTRICTIONS ON USE OF PROMOTIONAL MATERIALS AND REPRESENTATIONS CONCERNING Paya-EFT’s SERVICES. CLIENT shall make no use of Paya-EFT’s promotional materials, marks, or software, other than as set forth in paragraph 2 above, without Paya-EFT’S prior written consent. In no way shall the CLIENT indicate that Paya- EFT’s services are an endorsement of the CLIENT, its business or its business practices. In the event of termination, CLIENT immediately shall properly discard all software related to Paya-EFT services at CLIENT’s expense.
4. SURCHARGES AND TAXES. CLIENT shall not impose any illegal surcharge on any processed ACH, Remote Check Deposit (Check 21 Plus) processed check, or electronically processed check transaction. CLIENT shall collect all required taxes at time of sale. All required taxes must be included in the total transaction amount at the time such is submitted for authorization by Paya-EFT and must be reflected in the face amount of the check or ACH Debit (if applicable). In any event, CLIENT shall not collect any required taxes separately in cash, or otherwise. CLIENT is responsible for paying all taxes collected to the appropriate authorities in a timely manner.
5. USE OF EQUIPMENT. CLIENT agrees to utilize only equipment and software (including payment gateways) approved by Paya-EFT for the electronic processing of checks and ACH Debits and in a format and medium of transmission acceptable to Paya-EFT.
6. NETTING OF TRANSACTIONS. CLIENT acknowledges that all transactions between Paya-EFT and CLIENT under this Agreement, except assessment of fees, shall be treated as a single transaction for purposes of daily settlement between CLIENT and Paya-EFT. The Settlement period varies depending on the Service. Chargebacks may be deducted from net settlement or may be debited from CLIENT’s account if no pending credits are available to offset the chargeback.
7. PAYMENT. CLIENT acknowledges that this Agreement provides for the provisional settlement of CLIENT’S transactions, subject to certain terms and conditions, fees, credit transactions, contingent claims for chargebacks, adjustments and final settlement including but not limited to those enumerated herein. All payments to CLIENT for legitimate and authorized transactions shall be made by Paya-EFT through the ACH and shall normally be electronically transmitted directly to CLIENT’S designated account. However, Paya-EFT cannot guarantee the timeliness with which any payment may be credited by CLIENT’S bank. CLIENT understands that due to the nature of the ACH and the electronic networks involved and the fact that not all banks belong to an ACH, payment to CLIENT can be delayed. In such cases, CLIENT agrees to work with Paya-EFT to help resolve any problems in crediting CLIENT’S designated account. In the event that a payment is rejected by CLIENT’S bank or fails to arrive within seven (7) banking days from the date of settlement due to problems beyond Paya-EFT’S control, Paya-EFT may periodically wire transfer all funds due CLIENT until the problem is corrected, at CLIENT’S EXPENSE. All payments to CLIENT shall be made after first deducting therefrom any discount fee, transaction fee, credit, chargeback, reserve or other fee or charge for which CLIENT is responsible pursuant to this Agreement. Said charges and fees shall be deducted from incoming transactions or may be debited against CLIENT’S designated Account at Paya-EFT’s sole discretion, without any further notice or demand.
8. AUTHORIZATION TO ACCESS CLIENT’s ACCOUNT. CLIENT hereby authorizes Paya-EFT to initiate debit and credit entries to CLIENT’S designated account. CLIENT’s authorization shall continue in effect for at least 120 days after termination of this Agreement, or for a longer period as determined necessary by Paya-EFT in the exercise of its sole discretion in order to properly terminate business. Unless a reserve or delay is placed on the CLIENT’S account, Paya-EFT will generally transmit settlement to CLIENT’s bank within 7 business days. In cases where CLIENT has been approved by Paya-EFT in advance to initiate credit entries, the debit to CLIENT’s account will be initiated first and the credit to the customer may be held until CLIENT’s debit clears, generally within 6 banking days or for a longer period as determined necessary by Paya-EFT to insure the funds have cleared CLIENT’s account. With respect to the Services, (i) settlement shall consist of a 7 banking day net settlement unless approved in advance by Paya-EFT in writing settlement shall consist of a 7 banking day net settlement unless approved in advance by Paya-EFT in writing; and (ii) No CLIENT or customer is authorized to initiate a customer credit Entry, except where the Entry is the result of a reversal of a previous WEB debit Entry. Returns received after a transaction has been settled may be offset and deducted from current outstanding funds due to CLIENT, or returns may be charged back to CLIENT’s account at Paya-EFT’s discretion. CLIENT specifically authorizes Paya-EFT to debit CLIENT’s account via Automated Clearing House (ACH) transfer for any previously funded transaction that is returned, and CLIENT warrants to Paya-EFT that CLIENT will maintain a sufficient balance to cover return entries and to promptly notify Paya-EFT of any changes to CLIENT’s accounts. In addition, Paya-EFT may require additional monetary sums for the reserve account from CLIENT, and Paya-EFT reserves the right to hold additional monies as necessary to reduce any risk associated with the daily processing of checks, as requested by CLIENT. In the event of processing termination, Paya- EFT may hold outstanding funds due to CLIENT for up to one-hundred-twenty (120) days from the transaction date if Paya-EFT determines that the return history reasonably justifies the holding of funds. Paya-EFT may hold back certain amounts where Paya-EFT is investigating a transaction for breach of warranty or transactional requirements by CLIENT or for other reasons. Paya-EFT shall monitor CLIENT’s transactional activity and CLIENT agrees that Paya-EFT may delay funds for a reasonable period to investigate account activity. Paya-EFT will attempt to notify CLIENT of any investigation, but Paya-EFT shall have no liability to CLIENT or any other party, for any such actions taken by Paya-EFT. CLIENT agrees that Paya-EFT may hold, setoff or retain funds to protect against amounts owed Paya-EFT or based on CLIENT’s transaction history and/or CLIENTS’ financial condition. Paya-EFT will not be liable for any dishonor of any item as a result of actions taken hereunder. Any account is subject to review, verification, audit and acceptance by Paya-EFT. Paya-EFT may return any item to CLIENT for correction or proper processing.
9. RETURNS AND CREDITS. CLIENT shall maintain a fair policy permitting refunds, exchanges, returns and adjustments. During the term of this Agreement, CLIENT shall be responsible for making all cash, check, or ACH Debit refunds to customer after a transaction has been batched out for settlement. Unless CLIENT has been approved by Paya-EFT in advance to initiate credit entries for a lesser amount than the original check, electronic check, or ACH Debit entry, CLIENT must initiate a credit receipt for the same amount as the original check or debit entry to effect voids, which occur the same day as the day of authorization and prior to batching out. As applicable, CLIENT must use the POP equipment, approved Paya-EFT software, or ACH Debit Software to transmit the credit. CLIENT shall obtain proper written authorization from the Customer whose name is used in the transaction or printed on the face of the check or the customer’s authorized representative prior to crediting Customer’s account. Except for Checks-By-Web, the customer or its authorized representative shall sign the completed credit receipt and a copy of the credit receipt shall be delivered to the customer at the time of each cancellation of a transaction. Each void, debit, and credit entry shall constitute a separate transaction for which a processing fee will apply. If it becomes necessary for a reversal of a transaction to be initiated, CLIENT shall request in writing to Paya-EFT to initiate such reversal. CLIENT shall give Paya-EFT enough information to create such reversal.
10. WARRANTIES BY CLIENT. CLIENT warrants and agrees to fully comply with all federal, state, and local laws, rules and regulations, as amended from time to time, including those with respect to consumer protection. CLIENT also warrants not to change the nature of its business as indicated in the TPG Contract or to modify the ownership of the business without the prior written consent of Paya-EFT. With each transaction presented to Paya-EFT by CLIENT for authorization, CLIENT specifically warrants and represents that: (a) each customer has authorized the debiting or crediting of its checking account, that each debit or credit is for an amount agreed to by the customer; (b) each debit or credit entry was authorized by the person named on the checking account or the authorized representative or agent of such person; (c) the sales receipt or other proof of purchase is valid in form and has been completed in accordance with all applicable laws and all of the provisions set forth in this Agreement; (d) the total amount of each sales receipt or other proof of purchase evidences all goods and services purchased in a single transaction (No splitting check transactions to multiple checks as applicable); (e) CLIENT has delivered the goods or completed the services identified in the authorized sales receipt; (f) each sales draft and check represents a bona fide direct sales transaction between the CLIENT and the person presenting the check or ACH Debit in the CLIENT’S ordinary course of business and that the amount of the sales draft or check evidences the customer’s total indebtedness for the transaction involved; (g) the person presenting the check or ACH Debit has no claim, defense, right of offset, or dispute against CLIENT in connection with the purchase of the goods or services and CLIENT will provide adequate services to the person presenting the check or ACH Debit and will honor all warranties applicable thereto; and (h) all of CLIENT’S business locations engage in the business activity listed on the face of this Agreement.
11. CHARGEBACKS AND RETURNS. Paya-EFT and third-party bank partners will monitor CLIENT for adherence to established maximum acceptable return rate thresholds as established by the Rules which are as follows: Overall return rate level of 15% or less, Administrative return (R02, R03, R04) rate level of 3% or less, and an Unauthorized return (R05, R07, R10, R29, or R51) rate level of 0.5% or less. CLIENT shall bear all risk of loss, without warranty or recourse to Paya-EFT for the amount of any transaction, applicable fees, or other amounts due Paya-EFT (including Paya-EFT’s actual costs and expenses) due to or caused by chargebacks and returns of any kind, whether for customer chargebacks, insufficient funds returns, administrative or corporate returns, or any other type of returns. Paya-EFT shall have the right to debit CLIENT’S incoming transactions, designated account or any other funds of CLIENT in Paya-EFT’s direct or indirect control by reason of Paya-EFT’s security interest granted to Paya-EFT by CLIENT hereunder, and to chargeback such transactions to CLIENT including, but not limited to any of the following situations: (a) where goods have been returned or service canceled by the person submitting the applicable check or ACH Debit for electronic processing or Remote Deposit Capture (Check 21 Plus) processing and that person has requested a credit draft and such credit draft was not processed by CLIENT; (b) where the sales draft or purchaser breaches any representation, warranty or covenant or failed to meet the requirements of this Agreement, or applicable law, or has not been authorized in advance by the authorization center as required hereunder; (c) where the transaction is for a type of goods or services sold other than as disclosed in the TPG Contract or approved in advance by Paya-EFT or the amount shown on the sales receipt or proof of purchase differs from the copy given to the customer; (d) where a customer contends or disputes in writing to Paya-EFT, or the customer’s financial institution named on the check or ACH Debit that: (1) Goods or services were not received; or (2) Goods or services received do not conform to the description on the sales receipt or proof of purchase; or (3) Goods or services were defective or the customer has a claim, dispute or defense to payment related to the transaction; or (4) The dispute reflects a claim or defense authorized by a relevant statute or regulation, (e) where a check authorization document or recording, proof of purchase, or credit receipt was not received by Paya-EFT as required herein or is subject to indemnification charged back by the customer’s financial institution; (f) where the transaction was generated through the use of an account that was not valid (As in, but not limited to, R03,R04 return codes)or effective (As in, but not limited to, R02 return code) on the transaction date or which was made on an altered, fraudulent, or counterfeit check authorization document, recording, or ACH debit or of which CLIENT had notice not to honor and failed to reject the transaction or if CLIENT disregarded any denial of authorization; (g) where the check results in a R29 return (Unauthorized ACH entry to Corporate Account) and any collection efforts are not successful; (h) where no signature or electronic acceptance of the transaction appears on the sales check authorization document (as applicable) or proof of purchase (or the proof of purchase does not contain the information from the ACH Debit), where customer did not authorize via recorded oral authorization, or if CLIENT failed to obtain specific authorization in advance from Paya-EFT to complete the transaction and/or a valid authorization number was not on the sales receipt or proof of purchase and/or the customer has certified in writing to Paya- EFT or his financial institution that no authorized user made or authorized the transaction; (i) where security procedures were not followed; (j) where the customer’s financial institution or Paya-EFT has information that CLIENT fraud occurred at the time of the transaction(s), or the transaction is not a sale by CLIENT whether or not such transaction(s) was authorized by the customer; (k) in any other situation where the check authorization or proof of purchase was executed or a credit was given to CLIENT in circumstances constituting a breach of any representation or warranty of CLIENT or in violation of applicable law or where CLIENT has not provided documents or resolved a customer dispute whether or not a transaction is charged back; (l) an Entry was charged back and represented whether or not the customer knows or consents to this representment. If, with respect to any one of CLIENT’S outlets, the amount of or number of any counterfeit or fraud incidents becomes excessive, in the sole determination of Paya-EFT; (m) CLIENT does not provide Paya-EFT with a copy of the signed authorization receipt or recorded oral authorization within forty-eight (48) hours from the time of Paya-EFT’s request. CLIENT may be charged back for all transactions, this Agreement may be terminated immediately without notice, and CLIENT’S funds, including but not limited to those in incoming transactions and in CLIENT’S designated account, shall be held pursuant to the provisions herein. Paya-EFT shall retain any discount or fee related to a chargeback transaction. Additionally, Paya-EFT shall have the same rights to debit CLIENT’s account for transactions returned or not honored for any reason, including but not limited to insufficient funds, administrative or corporate returns, or any other kind of returned transaction. If CLIENT has requested the Paya-EFT GUARANTEE service, and Paya-EFT has accepted the Amendment for Guarantee service, certain transactions are guaranteed, as listed in this Agreement, including the Paya-EFT POS GUARANTEE CONVERSION Remote Check Deposit (Check 21 Plus) with Guarantee, Checks-By-Phone Guarantee, or ACH DEBIT GUARANTEE Schedules below.
12. CHARGEBACK AND RETURNS RESERVE ACCOUNT. Notwithstanding any other language to the contrary contained in this Agreement, Paya-EFT reserves the right to establish, without notice to CLIENT, and CLIENT agrees to fund a non-interest bearing Chargeback and Return Reserve Account, or demand other security and/or to raise any discount fee or transaction fee hereunder, upon Paya-EFT’s reasonable determination of the occurrence of any of the following: (a) CLIENT engages in any processing of charges which create an overcharge to the customer by duplication of charges; (b) Failure by CLIENT to fully disclose the true nature or percentage of its (i) actual or intended telephone and/or mail order business; and (ii) actual or expected losses due to insufficient funds transactions, fraud, theft or deceit on the part of its customers, or due to administrative chargebacks/returns, or chargebacks or rejections by customers; (c) Failure by CLIENT to fully disclose the true nature of its business to Paya-EFT to permit a fully informed decision as to the suitability of CLIENT for processing through Paya-EFT; (d) Failure by CLIENT to fully disclose the true ownership of CLIENT’S business entity or evidence of fraud; (e) Processing by CLIENT of unauthorized charges or any other action which violates applicable risk management standards of Paya-EFT or is likely to cause loss; (f) Any misrepresentation made by CLIENT in completion of the CLIENT TPG Contract or breach of any other covenant, warranty, or representation contained in this Agreement or applicable law including a change of type of business without prior written approval by Paya-EFT; (g) CLIENT has chargebacks or returns of any kind which exceed 1% of the total number of transactions completed or dollars processed for Checks-By-Web Services by CLIENT in any thirty (30) calendar day period; (h) Excessive number of requests from customers or issuing banks for retrieval of documentation; (i) CLIENT’S financial stability is in question or CLIENT ceases doing business; or (j) Upon notice of or termination of this Agreement. After payment or adequate provision for payment is made by Paya-EFT, for all obligations on the part of CLIENT to Paya-EFT under this Agreement, CLIENT may request Paya-EFT to disburse to CLIENT any funds remaining in the Chargeback and Return Reserve Account unless otherwise agreed to by Paya-EFT. Such funds will not be disbursed to CLIENT until the end of one hundred twenty (120) days after termination of this Agreement or ninety (90) days from the date of the last chargeback or return activity, whichever is later, unless Paya-EFT in its sole discretion has reason to believe that customer chargeback rights may be longer than such period of time or that loss is otherwise likely, in which event Paya-EFT will notify CLIENT of such fact and Paya-EFT will set the date when funds shall be released. No monies held in the Chargeback and Return Reserve Account shall bear interest. Provisions applicable to the designated account are also applicable to this account.
13. COLLECTIONS. CLIENT acknowledges and agrees that when collection services are required, Paya-EFT may utilize an appropriately licensed third party to perform such collection services. CLIENT further authorizes Paya-EFT to continue collection efforts for CLIENT. If collections are unsuccessful after sixty (60) days, Paya-EFT shall discontinue collections and be absolved of all responsibility.
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15. CLIENT PAYMENT OBLIGATIONS & CONSUMER CONVENIENCE FEES. CLIENT shall pay Paya-EFT the fees and charges for the Services rendered hereunder in accordance with the Fees and Charges as set forth in the Amendment. CLIENT must promptly notify Paya-EFT in writing of any dispute regarding fees under this Agreement. CLIENT’S written notice must include: (i) CLIENT name and account number; and (ii) the dollar amount and description of the disputed fees. Such written notice must be received by Paya-EFT no later than ninety (90) days after the disputed fees have been paid by CLIENT or charged to CLIENT’S account by Paya-EFT. CLIENT’S failure to so notify Paya-EFT will waive and bar the dispute. If applicable, for the purpose of billing a Mobile Image shall consist of the front-and-back of a check; any other image capture shall be billed as a separate image regardless of whether or not multiple images are of a single document. CLIENT acknowledges that this Agreement may also contemplate a Consumer Convenience Fee Option and CLIENT wishes to participate in the Consumer Convenience Fee Option in which Paya-EFT shall collect a Convenience Fee from the consumer. CLIENT shall be solely responsible for informing its customers of such convenience fee charges and to obtain customer’s authorization, by signature or similarly authenticated, to debit the convenience fee from customer’s bank account via ACH debit. CLIENT’s customer authorization process should take into consideration whether the convenience fee is or is not included in the face amount of the check and for obtaining proper authorization so that the total amount to be deducted (both the sale amount and the fee) are properly authorized by the customer. CLIENT hereby confirms that Convenience fees are acceptable to be added under all applicable laws.
16. ASSIGNMENT OF CHECKS AND ACH DEBITS. As of the date of this Agreement and by subscribing to Paya-EFT services, CLIENT shall be deemed to have assigned to Paya- EFT, without recourse, all of CLIENT’s right, title and interest in any and all ACH Debits return fees and checks, including any rights to treble or punitive damages permitted under applicable law. CLIENT shall execute and deliver endorsements, instruments, and papers and shall do whatever is necessary under the laws of any applicable jurisdictions to secure and defend Paya-EFT’s rights and shall do nothing to prejudice those rights. CLIENT shall cooperate with Paya-EFT in pursuing Paya-EFT’s rights, including suing or prosecution of the customer under all applicable laws.
17. COMPLIANCE AND DISCLOSURE OF INFORMATION. CLIENT agrees to comply with all applicable state or federal laws, rules and regulations affecting the use of checks, drafts and ACH transactions, including but not limited to rules and procedural guidelines established by the Federal Trade Commission (“FTC”) and Regulation E. (Reg. E). CLIENT is solely responsible for any and all losses incurred by CLIENT or Paya-EFT in the event CLIENT initiates any transaction prohibited by Regulation E Rules or other rules or laws of the United States of America (“USA”) or in breach of this Agreement. CLIENT shall provide such information and certifications as Paya-EFT may reasonably require from time to time to determine CLIENT’S compliance with the terms and conditions of this Agreement and applicable law. CLIENT further agrees to produce and make available for inspection by Paya-EFT or its officers, agents, attorneys, accountants, or representatives, such books and records of CLIENT as Paya-EFT may deem reasonably necessary to be adequately informed of the business and financial condition of CLIENT, or the ability of CLIENT to observe or perform its obligations to Paya-EFT pursuant to this Agreement. CLIENT further agrees to provide to Paya-EFT from time to time such information including, but not limited to, credit reports, personal and/or business financial statements, income tax returns, or other such information as Paya-EFT may request. CLIENT grants to Paya-EFT continuing authority to conduct credit checks and background investigations and inquiries concerning CLIENT and CLIENT’S owner(s) including, but not limited to, character and business references and the financial condition of CLIENT and CLIENT’S owner(s). CLIENT expressly authorizes Paya-EFT or its agents, attorneys, accountants, and representatives to provide and receive such information from any and all third parties directly, without further consent or authorization on the part of CLIENT. Paya-EFT may share with others its credit, sales and other information. CLIENT will not transfer, sell, or merge or liquidate its business or assets or otherwise transfer control of its business, change its ownership in any amount or respect, engage in any joint venture partnership or similar business arrangement, change its basic nature or method of business, types of products sold or engage in sales by phone or mail order without providing notice to Paya-EFT and provide Paya-EFT with the opportunity to terminate this Agreement.
18. COMPLIANCE WITH THE RULES AND APPLICABLE LAW. CLIENT’s rights and obligations with respect to any Entry are governed by the NACHA Rules (“the Rules”), this Agreement and applicable law. The CLIENT agrees to comply with and be bound by “the Rules”. CLIENT agrees to comply with applicable state and federal law or regulation and CLIENT warrants that it will not transmit any Entry that violates the laws of the United States, including, without limitation, regulations of the Office of Foreign Asset Control (OFAC).
19. DATA RETENTION. CLIENT shall retain all records related to authorization, including all sales and credit receipts and authorizations for a period of no less than two years following the date of the transaction, or two years from authorization revocation if applicable. Failure to provide the authorization to Paya-EFT will result in cessation of collection efforts, and Paya-EFT will be entitled to immediately debit CLIENT’S account for any previously processed and returned transactions.
20. ADDITIONAL CLIENT REPRESENTATIONS. CLIENT agrees to permit Paya-EFT to audit CLIENT upon reasonable notice. CLIENT agrees that any outstanding amount(s) owed to Paya-EFT shall be subject to a 1.5% finance charge monthly. Any outstanding sums will be sent to an outside collection agency and charged the maximum amount of civil, legal, and collection fees/charges as is allowed by law. CLIENT will not disclose and will keep confidential the terms and conditions of this Agreement.
21. ADDITIONAL PAYA-EFT RESPONSIBILITIES. Paya-EFT will accept, as applicable, entries via check reader hardware, CLIENT’s payment gateway, double sided check images from a Paya-EFT approved check imager/software vehicle, ACH Debit software, and Checks-By-Phone Gateway on a 24-hour per day basis. Paya-EFT is only responsible for processing entries that have arrived at its premises in a proper format and on a timely basis. Paya-EFT will use information provided by CLIENT to originate its entries in the applicable Remote Check Deposit (Check 21 Plus) network or ACH. CLIENT understands and agrees that Paya-EFT may reject CLIENT’s entries for any reason permitted in this Agreement and/or if acceptance of such entry would cause Paya-EFT to potentially violate any federal, state or local law, rule statute, or regulation, including without limitation any Federal Reserve or other regulatory risk control program. At CLIENT’s written request, Paya-EFT will make reasonable efforts to reverse or delete an entry, but will under no circumstance be liable for the failure to comply with such request.
22. LIMITATION OF LIABILITY AND CLIENT’S WAIVER OF DAMAGES. Paya-EFT shall be responsible for performance of the ACH and Remote Check Deposit (Check 21 Plus) services as a third-party provider in accordance with the terms of this Agreement. Paya-EFT shall not be responsible for any other person’s or entity’s errors, acts, omissions, failures to act, negligence or intentional conduct, including without limitation entities such as Paya-EFT’s communication carrier or clearing houses, and no such entity shall be deemed to be a representative or an agent of Paya-EFT. IN NO EVENT SHALL PAYA-EFT BE LIABLE TO CLIENT FOR ANY CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR SPECIAL DAMAGES WHICH CLIENT OR ITS CUSTOMERS, AFFILIATES, PARENT COMPANIES, ASSOCIATES, AGENTS, OFFICERS, DIRECTORS OR EMPLOYEES MAY INCUR OR SUFFER IN CONNECTION WITH THIS AGREEMENT, INCLUDING LOSS OR DAMAGE FROM SUBSEQUENT WRONGFUL DISHONOR RESULTING FROM PAYA-EFT’S ACTS OR OMISSIONS PURSUANT TO THIS AGREEMENT. PAYA-EFT’S LIMIT OF LIABILITY TO CLIENT OR ANY THIRD PARTY FOR ANY CAUSE OF ACTION WHATSOEVER IS limited to the proportionate extent of CLIENT’s negligence or other breach of duty, and limited by the fees that Paya-EFT has received for the prior three (3) months from CLIENT.
23. FORCE MAJEURE. Paya-EFT shall not be responsible for delays, nonperformance, damages, lost profits or other losses caused directly or indirectly by any Act of God, including, without limitation, fires, earthquakes, tornadoes, hurricanes, wars, labor disputes, communication failures, legal constraints, power outages, data transmission loss or failure, incorrect data transmission or any other event outside the direct control of Paya-EFT.
24. CONFIDENTIALITY. Each party acknowledges that all other materials and information disclosed to the other party (“Recipient”) in connection with the performance of this Agreement, including any trade secret, process, technique, algorithm, computer program (source and object code), design, drawing, formula, business plan or test data relating to any research project, work in process, future development, engineering, marketing, servicing, financing, strategic partnership or personnel matter consist of confidential and proprietary data. Each Recipient will hold those materials and that information in strict confidence, and will restrict its use of those materials and that information to the purposes anticipated in this Agreement. If the law or legal process requires Recipient to disclose confidential and proprietary data, Recipient will notify the disclosing party of the request. Thereafter the disclosing party may seek a protective order or waive the confidentiality requirements of this Agreement, provided that Recipient may only disclose the minimum amount of information necessary to comply with the requirement. Recipient will not be obligated to hold confidential any information from the disclosing party which (a) is or becomes publicly known through no act or omission of the Recipient, (b) is received from any person or entity who, to the best of Recipient’s knowledge, or Recipient’s reason to know, has no duty of confidentiality to the disclosing party, (c) was already known to Recipient prior to the disclosure, and that knowledge was evidenced in writing prior to the date of the other party’s disclosure, or (d) is developed by the Recipient without using any of the disclosing party’s information. CLIENT further warrants and agrees that it shall not sell, purchase, provide, or exchange checking account information in the form of sales drafts, mailing lists, tapes, or any other media obtained by reason of a transaction or otherwise, to any third party other than to Paya-EFT, CLIENT’S agents approved by Paya-EFT for the purpose of assisting CLIENT in its business to Paya-EFT, the financial institution named on the check, or pursuant to lawful government demand without the account holder’s explicit written consent. All media containing checking account numbers must be stored in an area limited to selected personnel until discarding and must be destroyed prior to or in connection with discarding in a manner that will render the data unreadable. CLIENT will not disclose and will keep confidential the terms and conditions of this Agreement.
25. CLIENT agrees to indemnify Paya-EFT for any cost, expense, and damage, lost profit and/or attorneys’ fees in connection with (i) any breach of its obligations or representations in this Agreement; (ii) a dispute between CLIENT and a consumer regarding the action or inaction of CLIENT; (iii) any dispute between CLIENT and an CLIENT Customer with respect to the alleged or actual failure by CLIENT to process a transaction as requested by such customer or to CLIENT’s failure to provide data security, and (iv) CLIENT’s failure to comply with any of the provisions of this Agreement and applicable laws, Rules and/or regulations. As set forth in Section 22, in no event shall Paya-EFT’s liability to CLIENT for any matter exceed the total amount of three (3) months of fees paid by CLIENT under this Agreement.
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27. IRS REPORTING AND WITHHOLDINGS. Section 6050W of the Internal Revenue Code (“Code”) requires payment providers and third party payment networks, such as Paya-EFT, to report payment settlement amounts to the Internal Revenue Service (“IRS”) for each CLIENT processing through Paya-EFT. CLIENT shall verify its identity by providing Paya-EFT with a Tax Identification Number (“TIN”) such as a Social Security Number (SSN) or Employer Identification Number (EIN) for each CLIENT Account. In the event CLIENT fails to provide its TIN, Paya-EFT will place a restriction on CLIENT’s Account and may restrict the receipt of funds into CLIENT’s Account, or withhold a percentage of payments deposited into CLIENT’s Account in order to satisfy the backup withholding requirements of the IRS.
28. NON-WAIVER. Neither the failure nor any delay on the part of Paya-EFT to exercise any right, remedy, power or privilege hereunder shall operate as a waiver thereof or give rise to an estoppel nor be construed as an agreement to modify the terms of this Agreement, nor shall any single or partial exercise of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver by a party hereunder shall be effective unless it is in writing and signed by the party making such waiver, and then such waiver shall apply only to the extent specifically stated in such writing.
29. ASSIGNMENT. CLIENT may not assign or transfer any rights under this Agreement unless and until it receives the prior written approval of Paya-EFT. Paya-EFT may freely assign this Agreement, its rights, benefits and duties hereunder.
30. TERMINATION. This Agreement shall continue indefinitely unless and until terminated by either party. CLIENT may terminate this Agreement after three (3) year and thereafter upon sixty (60) days written notice to Paya-EFT of termination. Paya-EFT shall have the right to suspend or terminate this Agreement immediately and without notice to CLIENT.
31. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, such counterparts to constitute but one and the same instrument.
32. SCHEDULE OF FEES. Attached to this Agreement and incorporated herein by reference is a Schedule of Fees, and other terms and conditions in effect on the commencement date of this Agreement. Paya-EFT reserves the right at all times to unilaterally change all or part thereof, or any other terms of this Agreement upon written notice to CLIENT.
33. **INTENTIONALLY DELETED SECTION**
34. ENTIRE AGREEMENT. This Agreement, including the attached Schedules, together with the Account Agreement, is the complete and exclusive statement of the agreement between Paya- EFT and the CLIENT with respect to the subject matter hereof and supersedes any prior agreement(s) between Paya-EFT and the CLIENT with respect to the subject matter. In the event of any inconsistency between the terms of this Agreement and the Account Agreement, the terms of this Agreement shall govern. In the event the 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 Paya-EFT, the Originating Depository Financial Institution (ODFI) or CLIENT is subject, and which governs or affects 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 Paya-EFT, the ODFI and CLIENT shall incur no liability as a result of such changes except as provided in the following paragraph.
35. FUTURE AMENDMENTS. As stated in paragraph 34, Paya-EFT, the ODFI or CLIENT may amend operations or processing procedures in order to conform to and comply with any changes in the Rules or applicable Federal or State Regulations. The changes would be, without limitation, those relating to any cut-off time and the close of any business day. Such future amendments to operations or procedures shall become effective upon receipt of written notice to the other party, as provided for herein, or upon such date as may be provided in the Rules or applicable law or regulation referenced in the written notice, whichever is earlier in time. Use of the ACH or Remote Check Deposit (Check 21 Plus) services after any such changes shall constitute acceptance of the changes by the parties. Further, Paya-EFT may, from time to time, amend any provision of this Agreement, including, without limitation, those relating to the fees and charges payable by CLIENT by mailing written notice to CLIENT of the amendment, and the amendment shall become effective unless Paya-EFT receives CLIENT’s notice of termination of this Agreement within 7 days. Future amendments due to changes in the Rules or any law or judicial decision may become effective on such shorter period of time as Paya-EFT may specify if necessary to comply with the applicable Rule, law or decision. No other future amendments or modifications to this Agreement will be effective unless such changes are reduced to writing and are signed by the duly authorized party or parties to this Agreement and such future amendments are incorporated into and made a part of this document.
36. BINDING AGREEMENT; BENEFIT This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, successors and assigns. This Agreement is not for the benefit of any other person or entity and no other person or entity shall have any right against Paya-EFT.
37. ATTORNEYS’ FEES. In the event that it becomes necessary for Paya-EFT to employ an attorney to enforce, interpret, mediate or arbitrate this Agreement, or collect a debt from CLIENT, Paya-EFT shall be entitled to recover its reasonable attorneys’ fees, costs, and disbursements related to such dispute from CLIENT.
38. CHOICE OF LAW, VENUE & JURISDICTION. Notwithstanding any language to the contrary, all issues related to the electronic processing of checks and ACH Debits under the terms of this Agreement shall be determined in accordance with the NACHA Rules, Federal Trade Commission and Regulation E Rules, and laws of the United States of America and the State of Delaware as it applies to contracts. In the event of a conflict between the Rules and applicable local, state or federal law, the Rules shall prevail unless otherwise prohibited by law. To the extent that an issue arises which is not covered by the Rules, this Agreement shall be governed by and construed in accordance with Delaware law and it is expressly agreed that venue and jurisdiction for all such matters shall lie exclusively in Dover, Delaware. CLIENT acknowledges that this Agreement was formed in Delaware, upon its acceptance by Paya-EFT.
39. SEVERABILITY. If any provision of the Agreement is held to be illegal, invalid, or unenforceable, in whole or in part, by court decision, statute, or rule (or otherwise would go in if you wanted to include arbitration) such holding shall not affect any other provisions of this Agreement. All other provisions or parts thereof shall remain in full force and effect and this Agreement shall, in such circumstances, be deemed modified to the extent necessary to render enforceable the provision hereof.
40. HEADINGS. The headings in this Agreement are used for referenced purposes only. They shall not be deemed as part of this Agreement and shall not affect its interpretation.
41. EFFECTIVE DATE. This Agreement shall be effective only upon acceptance by Paya-EFT.
42. IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed by their duly authorized officers.