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HomeMy WebLinkAboutPhoenix Payment Systems - EPX Electronic Transaction Processing Agreementelectronic payment exchange EPX ELECTRONIC TRANSACTION PROCESSING AGREEMENT This Agreement is made this �V) day of 2012 by and between, City of Gilroy, a California municipal corporation, with an address at 7351 Rosanna-Street, Gilroy, CA 95020 ( "Merchant ") and Phoenix Payment Systems, Inc., a Delaware corporation, (dba Electronic Payment Exchange) with an address at 1201 N. Market Street, Suite 701, Wilmington, DE 19801 ( "EPX "). Merchant wishes to initiate electronic debit transactions through EPX to bank accounts maintained by its customers. EPX will utilize the Automated Clearing House at the United States Federal Reserve ( "Federal Reserve ") in order to provide this service. Now, therefore, in consideration of the promises contained herein, it is agreed as follows: 1. For purposes of this Agreement and the Schedules referred to herein, the following definitions apply unless the context otherwise requires. Capitalized terms used, but not defined, in this Agreement shall have the respective meanings as set forth in the NACHA Operating Rules. A. NACHA — means the National Automated Clearing House Association that establishes the standards, rules and procedures (the "NACHA Operating Rules ") that enable depository financial institutions to exchange payments on a national basis. B. ACH — means Automated Clearing House Network, which is a funds transfer system, governed by the NACHA Operating Rules that provides for the interbank clearing of electronic entries for participating financial institutions. C. Internet (WEB) Initiated Entries — means origination of debit entries (either recurring or single entry) to a consumer's bank account pursuant to Written Authorization that is obtained from the consumer via the Internet. D. Written Authorization — for Internet (WEB) Initiated Entries, means that (1) consumer must be able to read the authorization language displayed on a computer screen or other visual display; (2) Merchant should prompt the consumer to print the authorization and retain a copy; and (3) Merchant must be able to provide the consumer with a hard copy if the authorization is requested. E. Banking Day — means any day on which a participating financial depository institution is open to the public during any part of the day for carrying on substantially all its banking functions. F. Settlement — means a transfer of funds between two parties in cash, or on the books of a mutual depository institution, to complete one or more prior transactions, made subject to final accounting. Settlement for the ACH system usually occurs through the Federal Reserve. G. Settlement Date - means the date on which a transfer of funds with respect to a transaction is reflected on the books of the Federal Reserve. 2. EPX will transmit bank account entries initiated by Merchant to the ACH as provided in the NACHA Operating Rules. Merchant may utilize the EPX BuyerWall technology in the processing of ACH transactions. `BuyerWall" shall mean the EPX patent pending technology that utilizes the EPX hosted front -end applications in conjunction with a unique transaction identifier allowing Merchant to eliminate contact with bank account information during the processing, transmission and storage of ACH data. 3. Merchant and EPX will comply with the NACHA Operating Rules insofar as applicable, and the applicable NACHA Operating Rules are incorporated into this Agreement by reference. EPX agrees to keep Merchant advised of NACHA Operating Rules as they are applied and updated by NACHA. The specific duties of Merchant and EPX provided in the following paragraphs of this Agreement in no way limit the foregoing undertaking. Merchant represents and warrants that it has obtained or will obtain in a timely manner all necessary regulatory approvals, certificates and licenses to provide any services it intends to offer and that it is in compliance with the regulations of the Federal Trade Commission and the Federal Communications Commission and shall comply with all present and future federal, state and local laws and regulations pertaining to Transactions, including, without limitation, the Federal Fair Credit Reporting Act, the Federal Truth -in- Lending Act, the Electronic Fund Transfers Act, the Federal Equal Credit Opportunity Act, as amended, and the Telephone Disclosure and Dispute Resolution Act, as applicable. 4. Merchant shall obtain all Consents and Authorizations (including without limitation Written Authorization for Internet (WEB) Initiated Entries) required under the NACHA Operating Rules and shall retain such Consents and Authorizations for two (2) years after they expire. Merchant shall bear the full liability for, and shall indemnify EPX from, ACH items returned by the consumer whose account was debited whether or not proper Consent and Authorization was obtained. In accordance with NACHA Operating Rules, EPX shall reject return items deemed "untimely" and shall dispute return items at Merchant's request. In no event, however, shall EPX be liable for �, __ Initials Merchant's-ACH return items. 5. Merchant shall transmit each ACH file to EPX, in accordance with EPX's rules and policies, no later than 8:00 P.M., Eastern Time one (1) Banking Day prior to the Settlement Date. Failure to do so may result in a delay in the availability of funds. 6. Upon execution of this Agreement, no initial reserve is required by EPX. For good cause, Merchant may establish at EPX a reserve fund equal to at least Merchant's average four (4) day ACH gross dollar volume. EPX shall maintain the right to review and adjust the reserve requirement based upon the Merchant's actual performance. EPX shall hold this reserve fund to offset returned ACH items and for other liabilities that Merchant may incur under this Agreement. If the amount of returned ACH items exceeds the balance in the refundable fee account, EPX shall fund the excess via the Merchant's operating account. Changes in reserve fund requirements will be determined by EPX according Merchant's ACH gross dollar volume and Merchant's ACH return history; any such changes shall be effective immediately. Notwithstanding the reserve fund, Merchant shall be liable and reimburse EPX for any returned items. The reserve fund shall be funded, maintained and/or replenished by EPX withholding from remittances hereunder. EPX may hold any or all reserve funds for a period of up to one hundred - eighty (180) Banking Days following the termination of this Agreement by either party to offset returned or disputed ACH items or other liabilities under this Agreement. After such period, any amounts remaining in the reserve fund will be promptly returned to Merchant. 7. Merchant represents, warrants and covenants that Merchant will (1) advise EPX in writing of any errors in any ACH transactions submitted hereunder; (2) conduct Merchant's business in an ethical manner, in accordance with this Agreement, all applicable government rules and regulations and the NACHA Operating Rules; and (3) not use, or allow Merchant's employees or agents, to commit any acts of fraud, dishonesty or misrepresentation. Bank and EPX agree to defend through counsel approved by Merchant (which approval shall not be unreasonably withheld), indemnify and hold harmless Merchant, its officers, representatives, agents and employees, against any and all suits, damages, costs, fees, claims, demands, causes of action, losses, liabilities and expenses, including without limitation attorneys' fees, to the extent arising or resulting directly or indirectly from the negligence, recklessness or willful misconduct of Bank or EPX, including their respective assistants, employees or agents. Merchant agrees to defend through counsel approved by Bank and EPX (which approval shall not be unreasonably withheld), indemnify and hold harmless Bank and EPX, their respective officers, representatives, agents and employees, against any and all suits, damages, costs, fees, claims, demands, causes of action, losses, liabilities and expenses, including without limitation attorneys' fees, to the extent arising or resulting directly or indirectly from the negligence, recklessness or willful misconduct of Merchant, including its respective assistants, employees or agents. Merchant will compensate EPX for providing the services referred to herein according to the EPX rate and fee Schedule A. In addition to Schedule A fees, Merchant shall be charged a $50.00 NSF fee when EPX attempts to debit Merchant for any returns, rejects, fines, fees and assessments and such charges are returned to EPX for insufficient funds. EPX shall provide Merchant with thirty (30) days written notification of all rate and fee changes. If such a change occurs, Merchant has the right to terminate this Agreement upon written notice to EPX, provided that EPX receives such written termination notice within thirty (30) days following the date of the increase notice. A copy of the current rate and fee Schedule is attached hereto. 10. A. Either party may terminate this Agreement upon at least thirty (30) days prior written notice to the other party in the event that a party is in material breach of this Agreement (including without limitation payment obligations), and such breach is not cured within such period. EPX may immediately terminate this Agreement, or suspend transmittal hereunder, without notice to Merchant under any of the below listed circumstances: i. In the opinion of EPX there is a substantial negative change in the Merchant's business or financial position which reasonably indicates an impending bankruptcy; ii. Any act of fraud, dishonesty or misrepresentation is committed by Merchant, its employees and/or agents or EPX believes in good faith that Merchant, its employees and/or agents have committed, are committing or are planning to commit any acts of fraud, dishonesty or misrepresentation; iii. Any representation, warranty or application made by Merchant is not true and correct in all material respects; iv. Merchant files a petition, or has a petition filed against it under any bankruptcy or insolvency law, or is otherwise unable to pay its debts as they become due; or Initials d V. Merchant's reason entry codes for unauthorized transactions are equivalent to or exceed NACHA Operating Rules for reason entry codes pertaining to such transaction thresholds; or vi. Merchant is not within the parameters set forth in the EPX Underwriting Terms and Conditions. B. EPX may terminate this Agreement upon at least thirty (30) days prior written notice to Merchant if: Merchant fails to provide its most recent annual audited financial statements to EPX within ten (10) days of EPX's written request. C. Merchant may terminate this Agreement upon at least thirty (30) days prior written notice to EPX if- i. EPX amends Schedule A pursuant to increase the rates, fees or charges Merchant pays herein in excess of 5% in any given contract year, except for increases in Association fees or rates; or ii. Any material amendment or modification to this Agreement made by EPX that adversely affects Merchant in a material respect (excluding material amendments or modifications required due to changes in Association Regulations or applicable federal, state or local law or regulation); D. EPX may selectively terminate one or more of Merchant's approved locations without terminating this entire Agreement. In the event of termination, all obligations of Merchant incurred or existing under this Agreement prior to termination shall survive the termination. E. Notwithstanding the above, if the EPX Merchant Agreement, which is being executed by and between the City of Gilroy, Phoenix Payments Systems, Inc. (dba Electronic Payment Exchange ( "EPX ")), and The Bancorp Bank concurrently with this Agreement, is terminated for any reason by any party, then Merchant may immediately terminate this Agreement by giving written notice to EPX. 11. In the event Merchant incurs any loss due to the mishandling of a particular file by EPX, EPX's liability to Merchant shall be limited to the actual direct damages incurred by it resulting from EPX's negligence or misconduct, and shall in no event exceed the amount represented by the applicable transaction record, less the fees payable to EPX under this Agreement. In addition, EPX, its affiliates and agents shall not be liable for any incidental, consequential, reliance or special damages in any way connected or arising out of this Agreement or the services provided hereunder. EPX HEREBY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. 12. In the event an agent of Merchant delivers any entry or file of entries to EPX, EPX may act in reliance on such entry or file of entries, and it need not inquire of Merchant as to whether the agent is duly authorized. Merchant shall be fully liable for the acts and omissions of its agents hereunder. 13. Merchant shall submit all ACH Transactions for the payment of City utility charges by the City's utility customers that are processed through InfoSend solely to EPX for processing. If Merchant fails to comply with this provision, Merchant agrees to pay EPX, a liquidated damages sum within ten (10) days of the date of non - compliance. The amount shall equal the greater of i. $250; or ii. 80% of the product of: 1. The average net monthly fees; and 2. The number of months, including any pro rata portion of a month, then remaining prior to the date on which Merchant may terminate this Agreement in accordance with it terms. Merchant agrees that the damages suffered as a result of such non - compliance would be extremely difficult to calculate with precision. For that reason, the parties hereto agree that the liquidated damages should be computed as set forth above. Any exceptions to this exclusive arrangement must be approved by EPX in advance in writing. 14. This Agreement shall become effective when signed by all parties however the term shall begin upon commencement of processing activity under this Agreement and shall remain in effect for a term of three (3) years unless sooner terminated in accordance with this Agreement. Merchant shall have the option to renew this Agreement for two (2) successive terms of one (1) year each upon written notice to EPX and Bank at least thirty (30) days prior to the end of the then current term. 15. Unless otherwise agreed to in writing by both parties, any dispute arising out of and/or in the course of the relationship established by this Agreement, or by the Agreement itself, shall be decided in and according to the State where the defendant is physically located, and, the parties hereby submit to said jurisdiction and venue. Initials �'L _ 16. All notices hereunder shall be in writing, in English, and shall be deemed properly given when (1) sent by certified mail, return receipt requested, (2) sent by fax with confirmation of receipt by telephone, or (3) delivered by a nationally recognized overnight delivery service, to the addresses listed herein for the respective parties. A party may change such address by written notice to the other party hereto in accordance with this section at least thirty (30) days prior to the initial use of the revised address. 17. If any provision of this Agreement or any application thereof to any person or circumstance shall be held to be invalid by a court of competent jurisdiction or unenforceable to any extent, the remainder of the Agreement and the application thereof to other persons or circumstances shall not be affected thereby and shall be limited or modified to the minimum extent necessary to be enforceable. 18. This Agreement may not be assigned by either party without the prior written consent of the other party, which consent shall not be unreasonable withheld. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. 19 Any modification of this Agreement or additional obligation assumed by either party in connection with this Agreement shall be binding only if in writing and signed by each party or an authorized representative of each party. This Agreement, together with the Schedules attached hereto, supersedes any other agreement, whether written or oral, that may have been made or entered into by any party (or by any officer or officers of any party) relating to the matters covered herein and constitutes the entire agreement of the parties hereto. 20. All notices, requests, demands or other instruments which may or are required to be given by any party herein shall be in writing and each shall be deemed to have been properly given: i. When served personally on an officer of the party to whom such notice is to be given; ii. Upon expiration of a period of three (3) business days from and after the date of mailing thereof when mailed postage prepaid by registered or certified mail, requesting return receipt; or iii. Upon delivery by a nationally recognized overnight delivery service, addressed as follows: Initials If to EPX: If to Merchant: Electronic Payment Exchange City of Gilroy 1201 N. Market Street Finance Department Suite 701 7351 Rosanna Street Wilmington, DE 19801 Gilroy, CA 95020 IN WITNESS WHEREOF, the parties to this Agreement have caused it to be executed by their duly authorized representatives, with a complete understanding of the contents hereof, on the day and year first set forth hereinabove. Agreed and Accepted: Date: *— J)'2— mod, City A ii istrator Approved As To Form: Z' mda Callon, City Attorney P enlx Payment Systems, Inc. Authorized Representative; Title Date Initials Schedule A Electronic Transaction Processing Agreement ACH Processing Transaction Fee Return /Reject Fee Unauthorized Return Fee EPX Assessment Miscellaneous Fees Monthly Account Maintenance Fee (Per merchant ID) $0.25 $3.50 $15.00 0.00% $15.00 Initials --�L