HomeMy WebLinkAboutResolution - 98-24 RESOLUTION NO. 98- 24
RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF SAN JACINTO, CALIFORNIA AUTHORIZING
AN ORIGINATION AGREEMENT FOR AUTOMATED CLEARING
HOUSE SERVICES WITH
THE BANK OF HEMET
WHEREAS, the City Council has reviewed copies of the proposed Origination Agreement for
Automated Clearing House Origination Services (the "Agreement"), to be entered into by and
between the City and the Bank of Hemet ( "Bank"); and
WHEREAS,the Council has determined that its participation in the Bank's Automated Clearing
IIouse Origination Services ("ACH Origination Services') will be on the terms and conditions
set forth in the Agreement;
NOW, THEREFORE, IT IS HEREBY RESOLVED:
1. It is in the best interest of the City to participate in the ACH Origination Services, such
participation to be on the terms and conditions set forth in the Agreement; and
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2. The Council authorizes and directs an authorized officer of the City, for and on behalf of the
City to negotiate, execute and deliver the Agreement and any renewals or amendments thereof,
with such terms, covenants, and conditions as such officer or officers executing the Agreement
on behalf of the City may approve, such approval to be conclusively evidenced by the execution
and delivery of the Agreement; and
3. The Council has considered the security procedures contemplated by the Agreement, and
Finds that such security procedures are commercially reasonable procedures for verifying that a
Request or other communication purporting to have been issued by the City as originator is in
fact a Request of the City. In reaching this determination, the Council has considered the size,
type and frequency of ACH Origination Services that the City anticipates issuing to the Bank:
and
4. The Council :s aware that the Bank may have available alternative security procedures that my
provide a greater degree of certainty for verification of the authenticity of Entries, and authorizes
and directs an authorized officer of the City to disclose to the Bank the size, type and frequency
of Entries that the City anticipates issuing to the Bank, to review alternative security procedures
available from the Bank, and to consent to and agree to the use of the security procedures set
forth in the Agreement as submitted to the Council only after determining that such procedures
are appropriate for the City, such determination to be conclusively evidenced by the execution
and delivery of the Agreement: and
5_ The Council authorizes and authorized officer in connection with the Agreement (a) to
initiate, cancel, conform or verify the authenticity of instructions to the Bank for ACH t!
Origination Services, whether given orally, electronically, written or by facsimile instructions;
and(b)to designate to one or more persons, authorized to perform any of the foregoing and to
revoke any authorization granted to any such persuns, as he or she deems appropriate; and
6. The Council authorizes an authorized officer in connection with the Agreement to delegate
any of the authorities granted to him or her under this resolution to one or more persons and to
revoke any authorization granted to any such person, as he or she deems appropriate; and
7. The Bank is authorized to act and rely on this resolution until it actually receives written
notice of their amendment or revocation; and
S. As used in this Resolution, the term, `authorized officer of the City" shall mean the following
acting separately:
Title Name Signature Initial
a. Interim Finance Director George H. Kaenel
b. Financial Supervisor Anne M. Hallberg
c. City Manager L. Michael llanava
d. Mayor James L. Smedley f 'i
e. Vice Mayor Deborah M. Cornett
APPROVED AND ADOPTED this 7th day of May, 1998.
Ayes.• Councilmembers Conner , Cornett , nood , I,lilliams F+ Smedley
Noes: None
Abstain:N o n e
Absent: None
ayor
v
ATTEST:
Pamela L. Lee, City Clerk
7
City Clerk f
L,
The Bank of Hemet Origination Agreement
w., FOR AII 1701MATED CLEARING HOUSE SERVICES
Credit Origination
THIS AGREEMENT is made on / 7 19 9.8 among
Ci I.y of San ,Jacinto ("Comparrv"),and The Bank of Hemet and it's
wholly owned subsidiary Banklink Corporation("Bank")-
WHEREAS,Bank is a Participating Depository Bank("Participating Bank")of the Western
Payments Alliance ("WesPay")and may initiate electronic fund transfer entries("Entries")by means of
the Automated CIearing House.
WHEREAS,Company("Originator")desires to initiate Credit Entries through Bank
i."Originating Depository Financial Institution")for deposit of funds to the accounts of Company's
employees,customers and other parties("Receivers")maintained at Bank and other Participating
Institutions("Accounts".). Such Entries may be referred to herein as "Credit Entries."
NOW, THEREFORE,Bank and Company agree as follows.
1. Rules. Company shall comply with the Operating Rules of WesPay and the Operating
Rules of the National Automated Clearing House Association("NACHA")in existence as of the date of
this Agreement and as amended from time to time(herein collectively referred to as the "Rules"). The
terms of this Agreement shall in no way limit Company's obligation of complying with the Rules.
Unless otherwise defined herein,capitalized terms shall have the meanings provided in the Rules. The
term "Entries" shall have the meaning provided in the Mules and shall also mean(i)the data received
from Company hereunder&um which Bank r arcs Entries, and ii for the
P PCP' ( ) purposes of Sections 2.5,
8.3 and 9 d any request from Company for reversal of an Entry.
2. Delivery of Entries to Bank.
2.l Delivery Requirements. Company will be required to complete successfully any
required implementation testing prior to commencement of Entries contemplated by this Agreement. All
Entries shall be delivered by Company to Bank at the location(s)and in compliance with the formatting
and other requirements set forth in Schedule A attached hereto("Delivery Requirements").
Company directs authorized officer(s)of the Company to designate delivery method of Credit Entries
via( X)Sterling ACH Software or( )Other communications software- The total dollar amount of
Entries transmitted by Company to Bank on any one day("exposure limits' shall not exceed amount set
forth on Schedule A without prior approval from Bank.
2.2 Security Procedures. Company and Bank shall comply with Ilse security procedure
requirements described in Schedule B attached hereto("Security Procedures")with respect to Entries
transmitted by Company to Bank.
2.3 Receiver Authorizations and Record Retention. Before the initiation by
Company of the first Entry to a Receiver's Account, Company shall obtain from such Receiver an
authorization to initiate one or more Entries to the Receiver's Account,which authorization shall comply
with the Rules. Each Entry thereafter shall be made pursuant to such authorizatiorL and no Entry shall
\r Octoba 3,1996 1
be initiated by Company after such authorization has been revoked or the arrangement between
Company and such Receiver has terminated. Company shall retain Receiver authorizations for two /
years after they are terminated and other documents related to Entries fora period of two years. l
Compatry shall immediately furnish such authorizations and documents to Bank upon Bank's request.
2.4 Prenotification. Bank may at its sole option require Company to deliver a
prenotification,in a format and in the medium set forth in Schedule A and/or prescribed by the Rules to
Bank to be transmitted to the Participating Institution at which the Receiver's Account is held within the
time limits set forth in the Rules. If Company has received notice that such prenotification has been
rejected within the prescribed period by the Receiving Depository Financial Institution("RDFI"),
Company shall not initiate any corresponding Entry until the cause for refection has been corrected and
another prenotification has been submitted to and accepted by the RDFI in accordance with the Rules.
2.5 Cancellation and Amendment of Entries; Reversals. Company shall have no right
to cancel or amend an Entry after it is delivered to Bank. Bank,however,shall use reasonable efforts to
act on a request by Company for reversal of an Entry file pursuant to the Rules;provided,however,that
Bank shall not be liable for interest or losses if such reversal is not effected. Any request by Company
for reversal of an Entry must comply with the Delivery Requirements and the Security Procedures.
Company shall reimburse Bank for any expenses,losses or damages Bank may incur in effecting or
attempting to effect Company's request for the reversal of an Entry.
3 Processing,Transmittal and Settlement by Bank
3.1 Processing,Transmittal and Settlement. Except as provided in Sections 4,5 and
9, Bank shall(i)process Entries received from Company to conform with the requirements set forth in
this Agreement,(ii)transmit such Entries as an Originating Depository Financial Institution("ODFI")
to an Automated Clearing House processor("ACH")selected by Bank in its sole discretion,and(iii)
settle for such Entries as provided in the Rules.
3.2 Timing. Bank shall transmit such Entries to the ACE by the cut-off of the ACH set
forth in Schedule A attached hereto two business days prior to the Effective Entry Date shown in such
Entries,provided(i)such Entries are received from Company by Bank's related cut-off time set forth in
Schedule A on a business day,(ii)the Effective Entry Date is at least 2 days after Company transmission
day,and(iii)the ACH is open for business on the Company transmission day. For purposes of this
Agreement, a"business day" is a day on which Bank is open to the public for carrying on substantially
all of its business other than a Saturday or Sunday,and Entries shall be deemed received by Bank in the
case of transmittal by electronic transmission,when the transmission(and compliance with any related
Security Procedure) is completed as provided in the Delivery Requirements.
If any of the requirements of clause(i),(ii)or(iii)of the preceding paragraph is not met, Bank shall use
reasonable efforts to transmit such Entries to the ACE by the next deposit deadline of the ACE
following that specified in Schedule A which is a business day and a day on which the ACE is open for
business.
4. On-Us Entries. Except as provided in Section 5,in the case of an On-Us Entry,Bank
shall credit the Receiver's account in the amount of such Entry on the Effective Entry Date contained in
such Entry,provided the requirements set forth in clauses(i)and(ii)of Section 3.2 are met. If either of
those requirements is not met, Bank shall use reasonable efforts to credit the Receiver's account in the
Cklober 2, 1996 2 _
amount of such Entry on the next business day following such Effective Entry Date.
.,� 5. Rejection of Entries. Bank may reject any Entry for any reason or for no reason_ Bank
shall notify Company of such rejection(either electronically,in wriiing,by telephone,or as othernise
agreed to by Bank and Company)no later than the business day after the Effective Entry Date. Bank
shall not be liable to Company for the rejection of any Entn,,for Company's non-receipt of a notice
given to Company,or for the failure to give notice of rejection at an earlier time than that provided for
herein. Bank shall not be required to pay Company interest on a rejected Entry for the period from
rejection of the Entry to Company's receipt of the notice of rejection. If an Entry is returned or rejected
by the ACH solely due to errors by Bank and sufficient data is available to Bank to reprocess the Entry,
Bank shall reprocess the Entry.
6. Notice of Returned Entries. Bank shall notify Company either electronically, in
writing,by telephone,or as otherwise agreed to by Bank and Company of the receipt of an Entry
returned by the ACH no later than one(1) business day after Bank's receipt of the returned Entry, Bank
shall have no obligation to take other action with respect to a returned Entry.
7. Provisional Payment. Company represents to Bank and agrees that it shall be bound by
the provision of the Rules making payment of an Entry by the RDFI to the Receiver provisional until
receipt by the RDFI of final settlement for such Entry, and specifically acknowledges that it has received
notice of that Rule and of the fact that,if such settlement is not received, the RDFI shall be entitled to a
refund from the Receiver of the amount credited and Company shall not be deemed to have paid the
Receiver the amount of the Entry.
8_ Security Procedures; Unauthorized and Authorized Entries; Inconsistent Entries.
8.1 Purpose of Security Procedures. Company agrees that the purpose of the Security
Procedures is to verify the authenticity of Entries trarisnutted to Bank in the name of Company and not
to detect an error in the transmission or content of any Entry, and that no security procedure for the
detection of such errors has been agreed upon by Bank and Company.
8.2 Protection of Security Procedures. Company is strictly responsible to establish
and maintain procedures to safeguard against unauthorized transmissions. Company warrants that no
individual,mil be allowed to initiate transfers in the absence of proper supervision and safeguards,and
agrees to take reasonable steps to maintain the confidentiality of the Security Procedures and of any
passwords,codes,security devices and related instructions provided by Bank in connection with the
Security Procedures. If Company believes or suspects that any such information or instructions are
brown or have been accessed by unauthorized persons, Company shall notify Bank immediately. In
addition, Company will immediately notify Bank that an employee's authority has been revoked
whenever that employee leaves the Company's employ or othenvise is no Longer authorized to submit
Entries on behalf of the Company.
8.3 Unauthorized Entries. An Entry delivered to Bank that purports to have been
transmitted or authorized by Company shall be effective as Company's Entry as provided herein even if
the Entry was not in fact authorized by Company.provided Bank has accepted the Entry in compliance
with the Security Procedures with respect to such Entry.
October 2. 1996 3
9.4 Authorized Entries. If an Entry received by Bank was transmitted or authorized by
Company, it shall be effective as the Company's Entry as provided herein,whether or not Bank complied f
with the Security Procedures with respect to that Entry and whether or not that Entry was erroneous m
any respect or that error would have been detected if Rank had complied with such procedure.
8.5 Inconsistent Entries. Company acknowledges and agrees that(i)if an Entry
describes the Receiver inconsistently by name and account number,payment of the Entry transmitted by
Bank to an RDFI might be made by RDFI(or by Bank in the case of an On-Us Entry) on the basis of the
account number even if it identifies a person different from the named Receiver,and that Company's
obligations to pay the amount of the Entry to Bank is not excused in such circumstances,and(ii)if an
Entry describes the RDFI inconsistently by came and identifying number, payment of the Entry might be
made by RDFI on the basis of the account number even if it identifies an RDFI different from the named
RDFI,and that Company's obligation to pay the amount of the entry to Bank is not excused in such
circumstances.
8.6 Commercially Reasonable Standard. After review of the Entries contemplated
under this Agreement,including those aspects to verify the authenticity of Entries delivered by Company
to Bank.,Company acknowledges and agrees that the Security Procedures as set forth in Schedule B
attached hereto are commercially reasonable and are appropriate for Company's needs and will provide
Company with the degree of protection relative to Company's ability to accept the inherent risk of the
execution by Bank of unauthorized or erroneous instructions received by Bank, as long as Bank acts on
the delivery of Entries in good faith and in a fashion consistent with the other terms of this Agreement.
9. Company Account.
9.1 Payment of Entries. Company shall at all times maintain sufficient available funds
in a deposit account as set forth in Schedule C. Company shall maintain at Bank(the"Company
Account") to pay the amount of all Credit Entries,fees,and other amounts which Company is obligated
to pay Bank under this Agreement. Bank in its sole discretion may require Company to have sufficient
available funds in the Company Account to cover the amount of a Credit Entry prior to Bank's
transmittal of such Entry to an ACH or Bank's crediting of a Receiver's account in the amount of an On-
Us Entry_ In the absence of such a requirement,Company shall be obligated to have such available
funds in the Company Account at such time on the Effective Entry Date with respect to such Entry,or in
the case of an On-Us Entry,the date of crediting the Receiver's account, as Bank,in its discretion,may
determine. Bank may,without prior notice or demand,obtain payment of any amount due and payable
to it under this Agreement by debiting the Company Account,and may credit the Company Account for
any amount to which Company is entitled under this Agreement. If there are insufficient funds available
in the Company Account to pay amounts Company owes Bank under this Agreement,Company shall
pay any amounts due immediately upon demand,and Company agrees that Bank may debit any account
maintained by Company with Bank or that Bank may set off against any amount it owes to Company,in
order to obtain payment of Company's obligations.
9.2 Financial Review. Company further agrees that the Bank at its sole discretion,may
from time to time subject Company to a credit review process which will assist the Bank in determining
whether the single day exposure limits for Credit Entries as set forth in Section 2.1 are appropriate.
Company shall,upon Bank's request,provide to Bank any such information and assistance as Bank may
require to perform any such evaluation. Failure of Company to meet such standards or to provide such
information or assistance when requested shall constitute a breach of this Agreement and shall permit
October 2. 1996 4 -
Bank to terminate Agreement.
9 3 Account Type. Company represents and warrants that the Company Account is, and
during the term of this Agreement will be maintained primarily for commercial,and not personal.family
or household, purposes.
10. Company's Representations.Warranties and Indemnification. Company represents
and warrants that for each Entry Company delivers to Bank that: (i)the Entry is a Credit Entry and
complies with the terms of this Agreement and the Rules;(n)Company has complied with the Rules
with respect to the Entry; (iii)there has not been and shall not later be any breach of any warranty of
Company as an Originator or of Bank as an ODFI under the Rules; (iv)Company has not breached any
warranty contained in this Agreement; and(v)the Entry complies with all local,State and Federal
regulations, including but not limited to the Electronic Fund Transfer Act and Regulation E.
Company shall indemnify Bank against any loss,liability or expense(including attorneys'
fees and expenses)resulting from or arising out of any breach of any of the foregoing representations or
warranties.
Company agrees that it shall be deemed to make and renew each representation and warranh,
made in Section IQ on and as of each day on which it delivers Entries to Bank.
11. Notices and Statements. Bank is not required to and will not provide Company or
Receivers with notice of receipt or Bank's transmittal or crediting of Entries. Entries and other debits
and credits to the Company Account will only be reflected on the periodic statement for the Company
Account. Company shall notify Bank of any unauthorized or erroneous Entries or any other discrepancy
or error on the periodic statement within fourteen(14)calendar days of receipt of the statement,after
1%W which the statement will be conclusively presumed to be correct. If Company fails to notify Bank of any
such discrepancy within one year of receipt of such periodic statement,Company shall be precluded
from asserting such discrepancy against Bank. Bank shall not be liable for any interest or fosses
resulting from Company's failure to give such notice.
12, Liability of Bank; Limitations on Liability.
12.1 Performance of Bank. Bank shall be responsible only for performing the services
it expressly agrees to perform in this Agreement, and shall be liable only far direct damages caused by
its negligence in performing those services. Bank shall not be responsible for any acts or omissions of
Company,including without limitation the amount, accuracy,timeliness of delivery or Receiver
authorization of any Entry received from Company,or any act or omission of any other person, including
without limitation WesPay,any Federal Reserve Bank,any ACH or transmission or communications
facility,any data processor of Company,or any Receiver or RDFI(including without limitation the
return of an Entry by such Receiver or RDFI), and no such person shall be deemed Bank's agent.
12.2 Limit on Damages. In no event shall Bank be liable for any consequential,special.
punitive,or,indirect loss or damage which Company may incur or suffer in connection with this
Agreement,including without limitation loss or damage from subsequent wrongful dishonor resulting
from Barik's acts or omissions in performing its services under this Agreement.
October 2. 1996 5
w
12.3 Force Majeure. Bank shall not be responsible for any failure to act or delay in
acting if such failure is caused by legal constraint,the interruption of transmission or communication r`
facilities,computer malfunction or equipment failure,war,emergency conditions,or other circumstances l
beyond Bank's reasonable control. In addition,Bank shall be excused from failing to transmit or delay
in transmitting an Entry if such transmittal would result in Bank's having violated any provision of any
present or future risk control program of the Federal Reserve or any rule or regulation of any other
governmental regulatory authority.
12A Interest. Subject to the foregoing provisions of this Section 12,any liability which
Bank may have for loss of interest for an error or delay in performing its services hereunder shall be
calculated by using a rate equal to the average Federal Funds rate of the Federal Reserve Bank of New
York for the period involved,less any applicable reserve requirements.
13. Indemnification. Company shall defend,indemnify and hold harmless Bank,and its
officers,directors,agents and employees,from and against any and all actions,costs,claims,losses,
damages or expenses,including attorneys'fees and expenses, resulting from or arising out of(i) any
breach of any of the agreements,representations or warranties of Company contained in this Agreement,
or(ii)any act or omission of Company or any other party acting on Company's behalf,including but not
limited to the parties described in Section 12.1 above.
14. Payment for Bank Services. Company shall pay Bank fees for the services provided
by Bank under this Agreement in accordance with rate schedules published by Bank from time to time.
Such charges do not include,and Company shall be responsible for payment of,any sales,use,or excise,
value added,utility or other similar taxes relating to the services provided for in Company's agreement
between Bank and Company with respect to the Company Account(the"Account Agreement"). Rate
schedules may be changed by Bank upon prior notice to Company.
15. Termination. Bank may terminate this Agreement immediately by notice to Company,
or without notice if Company breaches any of its obligations under this Agreement or the Rules.
Without limiting the generality of the foregoing,this Agreement may be terminated by Bank at any time
by written notice if(i)Company breaches terms of any other agreement with Bank including an
agreement involving the borrowing of money or the extension of credit; (ii)Company liquidates,
dissolves,merges into or consolidates with another entity,or sells,leases or disposes of a substantial
portion of its business or assets;(iii) Company terminates its business,fails generally to pay its debts as
they become due,or admits in writing its inability to pay its debts as they become due,or if any
bankruptcy, reorganization,arrangement,insolvency,dissolution or similar proceeding is instituted with
respect to Company,or if Company makes any assignment for the benefit of creditors or enters into any
composition with creditors or takes any corporate action in furtherance of any of the foregoing;or(iv)
any material adverse change occurs in Company's financial condition or results of operations or ability
to perform its obligations hereunder. Company shall promptly give written notice to Bank of the
occupance of any of the foregoing events.Company may terminate this Agreement at any time upon ten
(10)business days prior notice to Bank. Termination shall not affect any of Bank's rights or Company's
obligations under Sections 2.3, I0, 12, and 13 above or related to Entries initiated by Company prior to
such termination.
16. Severability. In the event that any provision of this Agreement or the application of
any such provision to any person or set of circumstances shall be determined to be invalid,unlawful,
void,or unenforceable to any extent, the remainder of this Agreement,and the application of such {
October 2,1996 6
provision to persons or circumstances other than those to which it is determined to be iuvalid,unlawful,
void or unenforceable,shall not be impaired or otherwise affected and shall continue to be valid and
enforceable:o the fullest extent permitted by law_
IT Confidentiality. Company acknowledges that it will have access to certain confidential
information regarding Bank's execution of Entries,the Security Procedures and the services
contemplated by this Agreement. Company shall not disclose any such confidential information of Bank
and shall use such confidential information only in connection with the transactions contemplated by this
Agreement.
IS. Tapes and Records. All magnetic tapes,Entries, Security Procedures and records used
by Bank for transactions contemplated by this Agreement shall be and remain Bank's property. Bank
may,in its sole discretion,make available such information upon Company's request. Any expenses
incurred by Bank in malting any such information available to Company shall be paid by Company.
19. General Provisions_
19.1 Entire Agreement. This Agreement and the schedules attached hereto constitute
the entire agreement between Bank and Company and supersedes all prior agreements. 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 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 Bank is subject,and which governs or affects the 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 Bank shall incur no liability to Company as a result of such
violation or amendment. No course of dealing between Bank and Company or usage of trade shall
NOW constitute a modification of this Agreement,the Rules or the Security Procedures or constitute an
agreement between Bank and Company regardless of whatever practices or procedures Bank or
Company may use.
19.2 Amendment. Except as provided in Section 14,Bank may amend any part of this
Agreement,including any schedule hereto,from time to time immediately upon notice to Company.
19.3 Instructions and Notices.
W Except as otherwise expressly provided herein, Bank shall not be
required to act upon any notice or instruction received from Company or any other person,or to provide
any notice or advice to Company or any other person with respect to any matter.
(ii) Bank shall be entitled to rely on any oral or written notice,response,
or other communication believed by it to be genuine and to have been provided by an authorized
representative of Company whose name is set forth on Schedule C (each an"Authorized
Representative"), and any such communication shall be deemed to have been provided by such person
on behalf of Company. Company may add or delete any Authorized Representative by written notice
(including Board of Director resolution) to Bank in form acceptable to Bank signed by( )one or( )
two Authorized Representatives other than the one being added or deleted. Such notice shall be effective
on the second business day following the day of Bank's receipt thereof.
�. October 2, !996 7
(iii) Any Entry or other data or information received by Bank from or
transmitted by Bank to the following data processor selected by Company shall be deemed to have been `.
received from or transmitted to Company, and such processor shall be deemed the agent of Company:
N/A . Company may change such processor by
written notice to Bank signed by two Authorized Representatives. Such notice shall be effective on the
second business day following Bank's receipt thereof.
(iv) Except as otherwise provided herein,any notice under this
Agreement must be in writing and delivered by express carrier, faxed or sent by United States registered
or certified mail and,if to Bank,addressed to:
The Bank of Hemet
3715 Sunnyside Drive
Riverside, Ca. 92506
Attn.: Customer Service Manager
and,if to Company, addressed to:
City of San Jacinto
City Manager
201 Fast Main Street
San Jacinto , CA 92583
Telephone #: 949 437-7342
Attn.: L . Micnael hanavan
unless another address is substituted by notice delivered or sent as provided herein.
Notices must comply with any applicable Security Procedures. Except as otherwise expressly provided
herein, any such notice shall be deemed given when received.
19.4 Third Party Vendors. If Company transmits Entries through a third party
Vendor, ("Vendor") is the agent of Company. Bank is not responsible for the acts or omissions of
Vendor,and Company agrees to hold Bank harmless from any losses caused by acts or omissions of
Vendor. Company agrees that the Security Procedure established between Vendor,as Company's agent
and Bank is commercially reasonable. Company shall bear all costs associated with the acquisition and
maintenance of all systems used by Company in connection with the transactions contemplated by this
Agreement,including but not limited to computer hardware and software, transmission lines and
facilities,programming and repair, and Bank makes no representations and undertakes no obligations
with respect to the same.
19.5 Assignment. Company may not assign its interest or rights under this Agreement
without the prior written consent of Bank, and any purported assignment in violation of this section shall
be void.
19.6 Successor and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties'hereto and their respective legal representatives,successors and permitted assigns.
This Agreement is not for the benefit of any other person,and no other person shall have any right
October 2.1996 a �.
against Bank-or Company hereunder.
%MW I9.7 Headings. Headings used in this Agreement are for convenience only and shall not
be deemed a part of this Agreement.
19.8 Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of California, including but not limited to Division 11 of the California
Commercial Code.
I9.9 Counterparts. This Agreement may be signed in counterparts,all of which shall
constitute one agreement.
IN WITNESS WHEREOF,the parties hereto have executed this Agreement as of the date first above
set forth_
City of San Jacintc
1 y
I
By
its Maycr
"COMPANY"
The Bank of Hemet
By
Its Chairman
"Rank"
.w4w October 2,'996 9
SCHEDULE A
DELIVERY REQUIREMENTS
Sterling Satellite User x Non-Sterling Satellite User_
Transmission Frequency, Please circle one: (Company to provide Bank with calendar indicating
specific dates of transmission)
Daily Weekly Bi-Weekly Semi-Monthly Monthly Otlrer
Estimated transmission record volume
ACH Transaction Types
PPD-(Prearranged Payment and Deposit)Used for consumer purpose transactions such as payroll.
Maximum daily exposure limit$100,D00.00 NORMAL PAY DAY
CCD+- (Cash Concentration or Disbursement) Used for funds to be distributed between Corporate
entities such as Federal Tax Payments.
Maximum daily exposure limit S 25,000-00 NORMAL TAX P,4YMENT
Totai daily exposure limit for all transmissions not to exceed$__
Sterling Satellite User
Company will dial Bank at(909) ;:50 GF 11 Bank will dial-back to Company a&e o dsp 'r 7 j 7
Bank cut-off time for transmission to ACH- 6:00 p.m. two business days prior to Effective Entry \--.
Date
Company Cut-off time for transmission to Bank- 2:00 p.m two business days prior to Effective
Entry Date
Non-Sterling Satellite User
Company will dial Bank at(909)
Credit Entries must be delivered to Bank according to NACHA file specifications.
Credit Entries will be delive d using the following communications software and modem:
Communications software Mo type Modem speed
i
Bank cut-off time for transmission to A6H/6:00 p.m, two business days prior to Effective Entry
Date f
Company Cut-off time for transmission"to Bank.-2:00 p.m. two business days prior to Effective
Entry Date
If Company is unable to deliver Credit Entries using Company's selected communications program,
Company may use an alternative file delivery type as a temporary backup provided that,each time
prior to delivery,Company first notifies Bank of the alternative file delivery type,and obtains Bank's
agreement. Bank may impbse additional Security Procedures not listed on Schedule B as part of the
Bank's acceptance of an alternate delivery method.
Initial Date (
l_
October 2,1996 I0
SCHEDULE B
SECURITY PROCEDURES-ALL ACH SERVICE USERS
Company Representations.
( a) The Company is solely responsible for the accurate creation,modification and deletion
Of account ud'orrriation maintained on Company's computer used for Credit Entry
processing. The Company is solely responsible for access by its employees of the data
files maintained on Company's computer and for operator security which enables
employees to access the required communications software to transmit Credit Entries;
(b) Any security,code assigned by Bank to Company is confidential and will be
safeguarded by Company. Company will establish policies and procedures to prevent
disclosure of security codes to unauthorized personnel. Among other things,such
procedures shall instruct employees at Company not to disclose any security code to
any other employee or to display any security code;
(c) No person will be allowed to initiate and if applicable,to confirm a Credit Entry in the
absence of proper supervision and adequate safeguards;
(d) Company will promptly report the dismissal or other termination of any employee who
has received or become aware of any security code,and in any event no later than the
final day of employment of such a person. and
(e) Company will promptly report any breach of confidentiality of any security code and
any suspicion by Company that confidentiality may be or have been breached.
Indemnification. Company shall indemnifv Bank against any loss,liability or expense(including
attorneys' fees and expenses)resulting from or arising out of any breach of the foregoing
representations- Company's indemnification obligation under this Section shall survive termination
of this Agreement. Company further represents to be bound by the commercial reasonableness of the
security procedures.
Changes in Authorized Representatives to Initiate or Confirm. Thu list of Authorized
Representatives to initiate and if applicable, to confirm Credit Entres may be amended only upon
written notice including Board of Directors resolution to Bank in form acceptable to Bank signed by
( )one( )two Authorized Representatives of the Company_ Any change in the list of persons
authorized to initiate and if applicable,to conform Credit Entries shall not be effective until after the
second day following receipt by Bank of the notice of change.
Initial-AJ Date
�, Ouoba 2.1996 1]
SCHEDULE B -CONTINUED
SECURITY PROCEDURES -STERLING SATELLITE USER
Basic Procedure
(a) Company will establish and maintain a list of Authorized Representatives,as set forth on Schedule C to
access the Sterling ACH Software"Software
(b) Company shall designate below an Authorized Representative to act as primary"Security Administrator"
for the Sterling Software. The Secunty Administrator will be responsible for issuing each Authorized
Representative as listed on Schedule Can Operator I.D. and an initial unique Password. The initial unique
Password shall be changed by each Authorized Representative immediately upon gaining access to the
Software, followed by changing the Password a minimum of each 90 days thereafter.
Security Administrator Mary Ann Smith Phone# 6 5 4-7 3 3 7
(c) Bank will assign a unique"Key Password"to Company. The Key Password, which shall be stored on
Company's personal computer,is required for each transmission. The Key Password is encrypted on the
Company's personal computer and an identical Key Password resident on the Bank's computer will
perform an identification and"handshake". Upon passage of the handshake, both the Company and
Bank's communication is disconnected.
(d) The Bank will perform a"dial-back"procedure which requires the Company's communication to respond
to the Bank's message. When the Company's communications responds to the Bank's message,the
identification and handshake is repeated and data exchange commences.
Bank will establish maximum daily exposure limits for ACH data transmission as set forth in Schedule A. If a transmission i
attempted which exceeds the established maximum,Company will receive a message indicating that the dollar limit
established has been exceeded,and contact with Bank must be made prior to attempting resubmission.
Optional Procedures_ The Security Administrator of Company will establish and maintain procedures to safeguard against
unauthorized transmissions. The Software contains access controls and Company may implement one or more of the
following, and must do so by checking where appropriate. If none of the optional procedures are checked, the Company has
choosen the Basic Procedure as a commercially reasonable security procedure.
_Assignment of user levels for access to system _Auto log-off after a period of non-use
—Disable access capability after invalid log-on attempts _Required dual custody for addition of new operators
—Supervisor level approval capability ,Aging period for required Password maintenance
Company Responsibility to Review. Company has considered the Security Procedures contemplated for Sterling Satellite
Users, and finds that such security procedures are commercially reasonable. Company agrees that the purpose of the Security
Procedures is to verify the authenticity of Entries transmitted to Bank in the name of Company and not to detect an error in the
transmission or content of any Entry,and that no security procedure for the detection of such errors has been agreed upon by
Bank and Company. In reaching this determination, the Company has considered the size, type and frequency of Credit
Entries that the Comparry anticipates.
InitiaA Date
October 2,1996 12 -.
SCHEDL-LE B - CONTINUED
SECURITY PROCEDURES - NON-STERLING SATELLITE USER
The Bank shall be entitled to re.-, on anv written notice or other written communication believed by it in good faith to be
%WW ntrinc and to have been signed by the Company's Authorized Representative as set forth on Schedule C. any such
communication shall be deemed to have been signed by such person. The authorization and amount of each Credit Entry
transmitted by Company(or third party vendor,as its agent,if applicable)to Bank shall be verified by Bank using the sectu-ity
procedures listed below.
Basic Procedure
(a) No Credit Entry will be accepted by Bank unless:
(1) initiated by a person whose name appears on the then-current list of Authorized Representatives to
initiate Credit Entries on behalf of Company;
(ii) The Authorized Representative initiating the Credit Entry provides the Bank with the appropriate
signature and correct security code along with verification of totals contained in the transmission by
sending a facsimile to the Bank's ACH Processing Department at(909) 684-0580.
(iii) Bank is able to confrrm the authorization of the Credit Entry with a person whose name appears on
the then-current list of Authorized Representatives to confirm Credit Entries by placing a phone call
to Company at the following designated phone munber ; and
(iv) The Authorized Representative confirming the Credit Entry provides the Bank: with the appropriate
file totals and correct security code.
(b) Unless otherwise specifically agreed to by Bank,rto Authorized Representative may both initiate and
evttfrm a Credit Entry. \
err•
(c) Unless otherwise specifically agreed to by Bank,each Ci t Entry shall be provided at the location and in
conformance with timing requirements as specified by B
(d) I£the Company is unable to supply the Bank with the correct security code or the file totals on the
transmission differ from the file totals supplied on the confirmation faxed to the Bank,or if transmission
exceeds the established daily exposure limits. Bank will treat the transmission as unauthorized and will not
execute the transmission.
.N
Security Codes. Bank,will issue unique security codes to each Authorized Representative that AS the ability to initiate and
to confirm Credit Entries. Bank may issue rep]acemcnt security codes from time to time,which codes shall be effective as of
the date specified by Bank. \
Optional Procedures. Company may choose Sterling Satellite option as a communication and authenticztion system which
may provide Company with a greater degree of certainty for verifying authenticity of Credit Entries transmitted to Bank.
i
Company Responsibitl[y to Review. Company has considered the Security Procedures contemplated for Non-Sterling
Satellite Usots, and finds that such security procedures are commercially reasonable. Company ag7ees that the purpose of the
Security Procedures is to verify the authenticity of Entries transmitted to Bank in the name of Company and not to detect an
error in the transmission or oontent of any Entry, and that no security procedure for the detection of such errors has been
agreed upon by Bank and Company. In reaching this determination_the Companv has considered the sirs, type and frequency
of Credit Entries that the Company anticipates.
"!&tial� Date
lJ October 2.1996 13
SCHEDULE C
AUTHORIZED REPRESENTATIVES AND COMPANY ACCUt1NT
Initiate Credit Entries
The following persons, and no others,are authorized to initiate Credit Entries on behalf of Company.
NAME TITLE S[ TURE _
Maryann SMith Account Clerk II
Georo_e Kaene] Finance tree or- n erir
Anne Hallberg Finance upervisor
Ray ouza ccoun '
p
Confirm Credit Entries(Required for Non-Sterling Satellite Users)
The following persons, and no others, are authorized to confirm the initiation of Credit Entries by
Company,its amount-and such other information as may be=quested by Bank as part of Bank's
confirmation procedures.
NAME TITLE, SIGNATURE
rU 1 rr
Company.account-Company shall at all titres maintain sufficient available funds in the following
account to pay the amount of all Credit Entries, fees, and other amounts which Company is obligated
to pay Bank under this Agreement.
Account 49189354-01
Company shall fund Credit Entries as follows:
K Date of transmission to Bank 1st and 3rd Tuesdays of the month
Effective Entry Date
Irtiti4 Date
October 2,1996 14
SC14EDI'1,E B
SUBLICENSE AGREEMENT- STERLING ACH SOFT%7VARF,
1. General. The Sterling ACH Software Progam and related documentation--Software"
provided by Bank to Company is a program that permits Company to generate electronic
funds transfers for clearing and settlement through the Automated Clearing House(ACH)
network.
2. Ownership and Use. Company acknowledges that the Software program and any
documentation is the original,confidential,valuable and proprietary product of Sterling which
has licensed the Software to Bank with the right to sublicense to Company. Company has
only the right to use the Software consistent with the terms herein. Company has no right of
ownership to the Software and may not transfer,copy,alter,modify,reverse engineer,
reproduce or convey in any manner, in whole or in part,the Software.
3. License- Bank hereby grants to Company a perpetual,non-exclusive and non-assimilable
license for use of the Software program on a single computer, for the purpose of originating
ACH Credit Entries,subject to the terms and conditions set forth in this Agreement.
Company will, at its own cost and expense,obtain,install and,at all time during the utilization
of the Software,maintain in good working order all hardware and equipment necessary for
origination of Entries.
4. Defiveryllnstallation/Acceptance. The Software shall be delivered to Company at
Company's designated site after Bank's execution of this Agreement and Company shall
install the Software on the Company's Hardware at Company's expense. If Company requires
the assistance of Bank in completing such installation, it shall notify Bank and agree to
compensate Bank for its services at the rate communicated by Bank in advance.
5. Training. On-site and off-site training shall be provided as available upon Company's
request,at Bank's rates,plus reasonable travel costs and out-of-pocket expenses for each
Bank employee assigned to do such training. Company agrees to pay for such training upon
receipt of Bank's invoice therefore-
b. Upgrades. Bank agrees to make available to Company such enhancements and improvements
to the Software which Bank elects to obtain from Sterling and generally makes available to
Bank's customers, at Bank's prices then in effect.
7. Copies. Bank shall provide Company with one copy of the Software. Company is authorized
to make one copy of the Software for back up purposes only.
S. Disclaimer of Warranty. No warranties with respect to the Software are made by Bank nor
does it warrant that Software will meet specific requirements of the Company, Ncither Bank
nor Sterling makes any warranty of any kind,either express or implied vv ith respect to the use
of the Software. Bank and Sterling disclaim any and all implied warranties of merchantability
and fitness for a particular purpose.
ouobrr 2,1996 15
SCHEDULE D-CONTINUED
9. Limitation of Liability. In no event shall Bank or Sterling be liable to Company for any
damages including lost profits, lost savings,or other direct, indirect, incidental,special or
consequential damages arising out of the use or inability to use Software,or for any claim by
another party,
19. Assignment and Transfer of Sublicense. Company agrees not to sublicense,assign or
transfer this license or Software without prior written approval from Bank.
IL Termination. The license granted:hereby shall be valid and effective from the date Bank
executes this Agreement and shall continue effective until terminated at any time by either
party,with or without cause,upon written notice to the other party. Immediately upon
termination of this license,Company shall cease making use of the Software and shall return it
to Bank,together with all software copies or reproductions in any form within five(5)
business days of termination. The obligation of Company under Section 2 of this schedule
"Ownership and Use'shall survive the termination of this Agreement.
L
Initiate ? Date
J
October 2.1996 t 6