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Resolution No. 2011-059RESOLUTION NO. 2011-59 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON APPROVING AND AUTHORIZING THE EXECUTION OF AN AGREEMENT WITH EAST WEST BANK FOR PAYROLL RELATED SERVICES WHEREAS, the City of Vernon ("City) wishes to retain the services of a payroll processing company for Automated Clearing House (ACH) payroll services (the "Services"); and WHEREAS, by memo dated March 21, ,2011, the Director of Finance recommends the City enter into an agreement (the "Agreement") with East West Bank setting forth the terms and conditions under which East West Bank will provide the Services; and WHEREAS, the City Council of the City of Vernon has determined that, pursuant to the provisions of subsection (a) of Section 2.27 of the Vernon City Code, it is in the public interest and necessity to enter into the Agreement with East West Bank for payroll related services. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF VERNON AS FOLLOWS: SECTION 1: The City Council of the City of Vernon hereby, finds and determines that the recitals contained hereinabove are true and correct. SECTION 2: The City Council of the City of Vernon hereby approves the Agreement with East West Bank, a copy of which is attached hereto as Exhibit A. SECTION 3: The City Council of the City of Vernon hereby authorizes the Mayor and the Mayor Pro-Tem to execute the Agreement for, and on behalf of, the City of Vernon and the City Clerk, or Deputy City Clerk, is hereby authorized to attest thereto. SECTION 4 The City Council of the City of Vernon hereby authorizes the City Administrator, or his designee, to take whatever actions are deemed necessary or desirable for the purpose of implementing and carrying out the purposes of this resolution and the transactions herein approved or authorized. SECTION 5: The City Council of the City of Vernon hereby directs the City Clerk, or the City Clerk's designee, to send a fully executed Agreement to East West Bank. SECTION 6: The City Clerk of the City of Vernon shall certify to the passage, approval and adoption of this resolution, and the City Clerk of the City of Vernon shall cause this resolution and the City Clerk's certification to be entered in the File of Resolutions of the Council of this City. APPROVED AND ADOPTED this 5th day of April, 2011. ilario Gonzales Name: Title: Mayor / 2 STATE OF CALIFORNIA ) ) ss COUNTY OF LOS ANGELES ) I, Willard G. Yamaguchi, City Clerk of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. 2011-59, was duly passed, approved and adopted by the City Council of the City of Vernon at a regular meeting of the City Council duly held on Tuesday, April 5, 2011, and thereafter was duly signed by the Mayor or Mayor Pro-Tem of the City of Vernon. Executed this day of April, 2011, at Vernon, California. (SEAL) - 3 - EXHIBIT A G EASTWESTBANK ACH ORIGINATOR AGREEMENT This Agreement is dated January , 2011, and is between the CITY OF VERNON ("Company") and EAST WEST BANK ('Bank"). RECITALS A. Company wishes to initiate Entries (PPD / CCD) pursuant to the terms of this Agreement and the rules of the National Automated Clearing House Association (NACHA) and the California Automated Clearing House Association (the "Rules"), and Bank is willing to act as an Originating Depository Financial Institution with respect to such Entries. B. Unless otherwise defined herein, capitalized terms shall have the meanings provided in the Rules. The term "Entries" shall have the meaning provided in the Rules and shall also mean the data received from Company hereunder from which Bank prepares Entries. C. Company acknowledges that the Automated Clearing House system may not be used in violation of, and the Entries originated by Company must comply with, the laws of the United States, including sanction laws administered by the Office of Foreign Asset Controls ("OFAC"). AGREEMENT 1. Transmittal of Entries By Company. Company shall transmit Entries to Bank to the location and in compliance with the formatting and other requirements set forth in Schedule A attached hereto. Additionally, Company agrees that its ability to originate entries under this Agreement is subject to exposure limits in accordance with the Rules and as set fVh j.nOSOch�d�lg A attached hereto. The total dollar amount of Entries transmitted by Company to Bank on any one day shall not exceed $ • 6 . U 2. Security Procedure. Company and Bank shall comply with the security procedure requirements of the businessBridgePlusO program and as described in Schedule B attached hereto with respect to Entries transmitted by Company to Bank 3. Processina. Transmittal and Settlement by Bank. (a). Except as provided in Sections 4 and 5, Bank shall (i) process Entries received from Company to conform with the file specifications set forth in the Rules, (ii) transmit such Entries as an Origination Depository Financial Institution to the Federal Reserve Bank San Francisco - Los Angeles Branch (the "ACH") acting as an Automated Clearing House processor, and (III) settle for such Entries as provided in the Rules. (b) Bank shall transmit such Entries to the ACH by the deadline of the ACH set forth in Schedule C attached two business days prior to the Effective Entry Date shown in such Entries, provided (1) such Entries are received by Bank's related cut-off time set forth in Schedule C on a business day, (ii) the Effective Entry Date is at least two (2) days after such business day, and (III) the ACH is open for business on such business day. For purposes of this Agreement (x) a "business day" is a day on which Bank is open to the public for carrying on substantially all of its business, and (y) 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 provided for herein) is completed as provided in Schedule A. (c) If any of the requirements of clause (1), (ii) or (III) of Section 3(b) is not met, Bank shall use reasonable efforts to transmit such Entries to the ACH by the next deposit deadline of the ACH following that specified in Schedule C which is a business day and a day on which the ACH is open for business. 4. On -Us Entries. Except as provided in Section 5, in the case of an Entry received for debit to an account maintained with Bank (an "Oh -Us Entry"), Bank shall debit the Receiver's account in the amount of such Entry, provided the requirements set forth in clauses (i) and (ii) of Section 3(b) are met. If either of those requirements is not met, Bank shall use reasonable efforts to debit the Receiver's account in the amount of such Entry on the next business day following such Effective Entry Date. 5. Refection of Entries. Bank may reject any Entry, with or without cause, at its sole discretion. Without limiting the foregoing, Bank may reject any entry which does not comply with the requirements of Section 1, or 2, or which contains an Effective Entry Date more than 5 days after the business day such Entry is received by Bank. Bank shall have the right to reject an On -Us Entry for any reason for which an Entry may be returned under the Rules. Bank shall have the right to reject any Entry if Company has failed to comply with its account balance obligations under Section 9. Bank shall notify Company by phone of such rejection no later than the business day such Entry would otherwise have been transmitted by Bank to the ACH or, in the case of an On -Us Entry, its Effective Entry Date. Bank shall have no liability to Company by reason of the rejection of any such Entry or the fact that such notice is not given at an earlier time than that provided for herein. 6. Cancellation or Amendment By Company. Company shall have no right to the cancellation or amendment of any Entry after its receipt by Bank. However, Bank shall use reasonable efforts'to act on a request by Company for cancellation of an Entry prior to transmitting it to the ACH or, in the case of an On -Us Entry, prior to debiting a Receiver's account, provided such request complies with the security procedure set forth in Schedule B for cancellation of Data, but shall have no liability if such cancellation is not effected. 7. Notice Of Returned Entries. Bank shall notify Company by e-mail of the receipt of a returned entry from the ACH no later than one business day after the business day of such receipt. Except for an Entry retransmitted by Company in accordance with the requirements of Section 1, Bank shall have no obligation to retransmit a returned Entry to the ACH if Bank complied with the terms of this Agreement with respect to the original Entry. D EASTWEST BANK 8. Payment. Company shall pay Bank the amount of each Entry transmitted by Bank pursuant to this Agreement at such time on the date of transmittal by Bank of such Entry as Bank, in its discretion, may determine, and the amount of each On -Us Entry at such time on the Effective Entry Date of such Entry as Bank, in its discretion, may determine. 9. The Account. Bank may, without prior notice or demand, obtain payment for an 'Entry transmitted to Bank by Company pursuant to this Agreement by debiting the account(s) of Company identified in Schedule D attached hereto (the "Account"), and shall credit the Account for any amount received by Bank by reason of the return of an Entry transmitted by Bank for which Bank has previously received payment from Company. Such debit shall be made as of the day of such receipt by Bank. Company shall at all times maintain a balance of available funds in the Account sufficient to cover its payment obligations for Entries transmitted pursuant to this Agreement. 10. Account Reconciliation. Entries transmitted by Bank or debited to a Receiver's account maintained with Bank will be reflected on Company's periodic statement issued by Bank with respect to the Account pursuant to the agreement between Bank and Company. Company agrees to notify Bank promptly of any discrepancy between Company's records and the information shown on any such periodic statement. If Company fails to notify Bank of any such discrepancy within thirty (30) days of receipt of a periodic statement containing such information, Company agrees that Bank shall not be liable for any other losses resulting from Company's failure to give such notice or any loss of interest with respect to an Entry shown on such periodic statement. If Company fails to notify Bank of any such discrepancy within one (1) year of receipt of such periodic statement, Company shall be precluded from asserting such discrepancy against Bank. 11. Company Representations and Aareements; Indemnity. Company represents to Bank and agrees that (a) each person shown as the Receiver on an Entry received by Bank from Company has authorized the initiation of such Entry and the debiting and, in the case of the need to correct an error the crediting, of its account in the amount and on the Effective Entry Date shown on such Entry, (b) such authorization is operative at the time of transmittal or debiting by Bank as provided herein, (c) Entries transmitted to Bank by Company are limited to those types of Entries set forth in Section 1, (d) Company shall perform its obligations under this Agreement in accordance with all applicable laws and regulations including but not limited to Regulation E of the Federal Reserve Board and the sanctions laws, regulations and orders administered by OFAC, and (e) Company shall be bound by and comply with the Rules as in effect from time to time, including without limitation the provision thereof making payment of an Entry by the Receiving Depository Financial Institution to the Receiver provisional until receipt by the Receiving Depository Financial Institution 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 Receiving Depository Financial Institution shall be entitled to a refund from the Receiver of the amount debited and Company shall not be deemed to have paid the Receiver the amount of the Entry. Company shall indemnify Bank against any loss, liability or expense (including attorney's fees and expenses) resulting from or arising out of any breach of any of the foregoing representations or agreements. 12. Liability: Limitations On Liabilitv: Indemnitv. (a) Bank shall be responsible only for performing the services expressly provided for in this Agreement, and shall be liable only for its sole negligence and willful misconduct in performing those services. Bank shall not be responsible for Company's acts or omissions (including without limitation the amount, accuracy, timeliness of transmittal or due authorization of any Entry received from Company) or those of any other person, including without limitation any Federal Reserve Bank or transmission or communications facility, any Receiver or Receiving Depository Financial Institution (including without limitation the return of an Entry by such Receiver or Receiving Depository Financial Institution), and no such person shall be deemed Bank's agent. Company agrees to indemnify Bank against any loss, liability or expense (including attorney's fees and expenses) resulting from or arising out of any claim of any person that Bank is responsible for any act or omission of Company. (b) 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 Bank's acts or omissions pursuant to this Agreement. (c) Without limiting the generality of the foregoing provisions, Bank shall be excused from failing to act or delay in acting is such failure or delay is caused by legal constraint, interruption of transmission or communication facilities, equipment failure, ware emergency conditions, civil unrest or other circumstances beyond Bank's 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 exceeded any limitation upon is intra-day net funds position established pursuant to present or future Federal Reserve guidelines or in Bank's otherwise violating any provision of any present or future risk control program of the Federal Reserve or any rule or regulation of any other U.S. governmental regulatory authority. (d) Subject to the foregoing limitations, Bank's liability for loss of interest resulting from its error or delay shall be calculated by using a rate equal to the average Federal Funds rate at the Federal Reserve Bank of New York for the period involved. At Bank's option, payment of such interest may be made by crediting the Account resulting from or arising out of any claim of any person that Bank is responsible for any act or omission of Company or any other person describe in Section 12(a). 13. Compliance With Security Procedure. (a) If an Entry (or request for cancellation or amendment of an Entry) received by Bank purports to have been transmitted or authorized by Company, it will be deemed effective as Company's Entry (or request) and Company shall be obligated to pay Bank the C EASTWESTBANK amount of such Entry as provided herein even though the Entry (or request) was not authorized by Company, provided Bank acted in compliance with the security procedure referred to in Schedule B with respect to such Entry. (b) If an Entry (or request for cancellation or amendment of an Entry) received by Bank was transmitted or authorized by Company, Company shall be obligated to pay the amount of the Entry as provided herein, whether or not Bank complied with the security procedure referred to in Schedule B with respect to that Entry and whether or not that Entry was erroneous in any respect or that error would have been detected if Bank had complied with such procedure. 14. Inconsistency of Name and Account Number. Company acknowledges and agrees that, if an Entry describes the Receiver inconsistently by name and account number, payment of the Entry transmitted by Bank to the Receiving Depository Financial Institution might be made by the Receiving Depository Financial Institution (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 obligation to pay the amount of the Entry to Bank is not excused in such circumstances. 15. Notifications of Chanae. Bank shall notify Company of all notifications of change received by Bank relating to Entries transmitted by Company by mail no later than three (3) business days after receipt thereof. 16. Payment For Services. Company shall pay Bank the charges for the services provided for herein set forth in Schedule E attached hereto. Such charges do not include, _and Company shall be responsible for payment of, any sales, use, excise, value added, utility or other similar taxes relating to the services provided for herein, and any fees or charges provided for in the agreement between Bank and Company with respect to the Account (the "Account Agreement"). 17. Amendments. From time to time Bank may amend any of the terms and conditions contained in this Agreement, including without limitation, any cut-off time, any business day, and any part of Schedules A through E attached hereto. Bank shall provide Company with ninety (90) days prior written notice of such amendments. Such amendments shall become effective upon the 91 s` day after receipt of notice by Company or such later date as may be stated in Bank's notice to Company. 18. Notices, Instructions. Etc. (a) Except as otherwise expressly provided herein, Bank shall act upon any notice or instruction received from Company, and, when required under terms of this Agreement, shall provide notice or advice to Company with respect to any matter. (b) Bank shall be entitled to rely on any written notice or other written communication believed by it in good faith, and after signature comparison, to be genuine and to have been signed by an Authorized Representative. The names and signatures of Authorized Representatives are set forth in Schedule B attached hereto. Company may add or delete any Authorized Representative by written notice to Bank signed by at least two Authorized Representatives other than that being added or deleted. Signature comparison is not a part of security procedures applicable to transmittal of entries, and rather, shall apply only to the provisions for written notice as set forth in this paragraph. Such notice shall be effective on the second business day following the day of Bank's receipt thereof. (c) Except as otherwise expressly provided herein, any written notice or other written communication required or permitted to be given under this Agreement shall be delivered, or sent by -United States registered or certified mail, postage prepaid, or by express carrier, and, if to Bank, addressed to: EAST WEST BANK 9300 Flair Dr. Suite 202 El Monte, CA 91731 ATTN: Deposit & Payment Services and, if to Company, addressed to: CITY OF VERNON 4 i n R SETA FF AVENUE, VERNON. CA 90058 ATTN: RORY BURNETT EMAIL: rburnett@ci.vernon.ca.us unless another address is substituted by notice delivered or sent as provided herein. Except as otherwise expressly provided herein, any such notice shall be deemed given when received. 19. Data Retention. Company shall retain data on file adequate to permit remaking of Entries for thirty (30) days following the date of their transmittal by Bank as provided herein, and shall provide such Data to Bank upon its request. 20. Termination. Company may terminate this Agreement at any time. Such termination shall be effective on the second business day following the day of Bank's receipt of written notice of such termination or such later date as is specified in that notice. Bank (ii 1 EAST'WEsT BANK reserves the right to terminate this Agreement immediately upon providing written notice of such termination to Company. Any termination I of this Agreement shall not affect any of Company's obligations arising prior to such termination. 21. Entire Agreement. This Agreement (including the Schedules attached hereto), together with the Account Agreement, is the complete and exclusive statement of the agreement between Bank and Company with respect to the subject matter hereof and supersedes any prior agreement(s) between Bank and Company with respect to such 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 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. 22. Non -Assignment. Company may not assign this Agreement or any of the rights or duties hereunder to any person without Bank's prior written consent. 23. Bindina 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, and no other person shall have any right against Bank or Company hereunder. 24. Headinas. Headings are used for reference purposes only and shall not be deemed a part of this Agreement. ' 25. Governina Law. This Agreement shall be construed in accordance with and governed by the laws of the State of California. IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed by their duly authorized officers. COMPANY: Signature: East West Bank Signature: —0411� tl Name: HILARIO GONZALES Name: Flora Ling Title: MXYUJK Title: BANK: Date: Date: . .Aar ')-L. 2olt Signature: i Name: WILLIAM M. MCCORMICR Title: MAYOR PRO—TEM Date: ATTEST: i Willard G. Yamaguchi, City Clerk APPROVED AS TO FORM: Willard G. Yamaguchi, Interim City Attorney i D EASTWEST BANK INTERNATIONAL ACH TRANSACTION (IAT) QUESTIONNAIRE To assist your company in determining if your ACH origination transactions are covered by the NACHA Rules governing International ACH Transactions (IATs), please take a few moments to answer the following questions: 1. ACH payment type(s) that your company originates: (check ONE) KI Payments ❑ Collections ❑ Both 2. Is your company a subsidiary of a multi -national company? ❑ Yes 9] No 3. Does your company have foreign subsidiaries? ❑ Yes KI No 4. Does your company buy or sell to organizations or individuals outside the territorial jurisdiction of the United States? ❑ Yes K] No 5. Does your company send payroll, pension or benefit payments via the ACH Network to individuals that have permanent resident addresses outside the territorial jurisdiction of the United States? ❑ Yes FL] No If you answered "YES" to any of the above questions, please answer the following additional questions: 6. Do any of ACH transactions you originate involve funds from an account held at a Bank or other financial agency that is not located in the territorial jurisdiction of the United States? ❑ Yes ❑ No 7. Do any of the ACH transactions you originate involve funds received directly from a Person or make payments directly to a Person who is not located in the territorial jurisdiction of the United States? ❑ Yes ❑ No 8. Does an office of a Bank or other financial agency not located in the territorial jurisdiction of the United States serve as an intermediary in the settlement of any part of an ACH transaction you originate? ❑ Yes ❑ No If you have answered "YES" to any one of the questions 6 through 8, these ACH transactions mav be subject to the special processing requirements for IAT transactions as outlined in the NACHA rules. An East West Bank ACH Specialist will contact you directly to help guide you through this process! IM EASTWESTBANK ACH ORIGINATOR AGREEMENT SCHEDULE A Delivery of Entries Name: CITY OF VERNON Estimated Commencement Date: 5 / 5 / 2 011 Bank procedures include the determination and review of certain exposure limits, which may include but are not limited to (a.) the dollar amount of ACH files; (b.) the frequency of origination of ACH files; and (c.) the consideration of the dollar amount of exposure over multiple settlement dates. The total dollar amount of Entries transmitted by Company to Bank with the same settlement date, whether initiated on any one day or over multiple days, should comply with the total dollar amount of Entries limit defined in section 1.of this Agreement. I. Method of Entry Data Delivery to BANK: ( ) Electronic transmission via payroll processor (X) Business Bridge Plus transmission, ( ) Business Bridge Cash Management Ill. Company shall deliver Entry data to the following: EAST WEST BANK III. Frequency of Origination: ( ) Daily ( ) Weekly (X ) Bi-weekly ( ) Semi -Monthly ( ) Monthly G EASTWEST BANK. ACH ORIGINATOR AGREEMENT SCHEDULE B Page 1 of 2 I. Delivery of Entries - Security Procedure Transactions will be delivered to Bank as specified in Schedule A. Bank Security Procedures: Bank shall be bound by the security obligations set forth in Section 6(c) of the Business Online Banking Terms and Conditions Agreement. Further, in accordance with the security procedure requirements of the businessBridge PIus(D, program, Bank shall maintain all information entered and displayed online on a secure, encrypted database. Bank shall protect information stored in Bank's database with the use of firewalls. Bank shall only make connections with servers authorized to communicate with Bank's database. To authenticate the identity of Customer's authorized users of the businessBridgePlus® program, Bank shall provide Customer's authorized users with password -generating security tokens that produce unique one-time passwords for each authorized user. The security tokens shall generate new unique one-time passwords for each authorized user no less than every sixty (60) seconds. Upon receipt of transactions Bank will further verify the validity of the transactions by: IN Business Bridge Plus transmission- No additional verification will be performed due to security constraints of the Business Bridge Plus system. ❑ Business Bridge Cash Management transmission- No additional verification will be performed due to security constraints of the Business Bridge Cash Management system. 2. Authorized Representatives Authorized Representatives of Customer, and signatures for purposes of notice provided to Bank by Customer (Par. 18) only: B EASTWESTBANK ACH ORIGINATOR AGREEMENT SCHEDULE B Page 2 of 2 Security Procedure II. Cancellation of Data As specified in Section 6 of the Agreement, Company shall have no right to cancel or amend transactions. EAST WEST BANK will attempt to cancel transaction(s) provided; - transactions have not been transmitted to the ACH or debited to the Receivers account, and - written request is received signed by two of the Authorized Representatives specified below: Signature Name/Title Phone R01RV FITTRNF.TT / FINANCE DIRECTOR JOAQUIN LEON / DEPUTY CITY TREASURER III. Modification of Security Procedure and Authorized Representatives The above security procedure may be modified by Bank as required. Any modifications requested by Company must be authorized by two (2) of the above listed Authorized Representatives. D EASTWEST BANK ACH ORIGINATOR AGREEMENT SCHEDULE C Cut-off Times I. Receipt of Entries Deadline ❑ Company or processor will provide entries to Bank by 3 00_pm two (2) business days prior to the effective date in order to be considered eligible for processing. 1 Company or processor will provide entries via Business Bridge Plus transmission to Bank by 3:006m two (2) business days prior to the effective date in order to be considered eligible for processing. ❑ Company or processor will provide entries via Business Bridge Cash Management transmission to Bank by 3:00pm two (2) business days prior to the effective date in order to be considered eligible for processing. II. EAST WEST BANK Processing Deadline - In the case of Non On -Us Entries, Bank will transmit eligible entries to the ACH for processing by 5:00pm two (2) business days prior to the effective date. - In the case of On -Us Entries, Bank will make eligible entries available to Receiver's account on the effective date. - Bank will transmit, or post in the case of On -Us Entries, non eligible entries at the next available deadline. III. ACH Processing Deadlines - ACH will process all entries received at the next available processing window. O EASTWEST BALK ACH ORIGINATOR AGREEMENT SCHEDULE D Account I. Company Account Account number 80362825 (Account) has been specified for the crediting of debits originated on behalf of the Company. Account will be funded with available funds for the total of the payroll file on: ❑ Date file presented to Bank M Effective entry date of the transactions II. Rejected Entries Rejected entries will be debited to the abovementioned Account. D EASTWESTBANK ACH ORIGINATOR AGREEMENT SCHEDULE E Payment of Services I. Method of Payment ❑ Debit Company's Bank Account as specified in Schedule D. 1 Debit to Account Analysis for Company's Bank account number R0367783 each month for the previous month's service (Bank may, within its sole discretion and without prior notice, discontinue this option with respect to Company. In that event, one of the above methods of payment shall be selected by Company.) CITY CLERK'S OFFICE INTEROFFICE MEMORANDUM DATE: April 7, 2011 TO: Rory Burnett, Director of Finance/Cit reasurer FROM: Willard Yamaguchi, City Clerk RE: Resolution No. 2011-59 — A Resolution of the City Council of the City of Vernon Approving and Authorizing the Execution of an Agreement with East West Bank for Payroll Related Services Transmitted herewith is a copy of Resolution No. 2011-59, referenced above, which was approved by City Council on April 5, 2011. Thank you. WY:dj Attachment c: Joaquin Leon Resolution No. 2011-59 Agreement File No. 11-047 Leon, Joaquin From: Leon, Joaquin Sent: Tuesday, April 05, 2011 3:38 PM To: 'Lori Huang (Lori.Huang@eastwestbank.com)' Cc: Burnett, Rory Subject: RE: City of Vernon - ACH Originator Agreement Attachments: ACH Originator Agreement (2011.04.05).PDF Importance: High Dear Lori: Please find attached an executed copy of the City's ACH Originator Agreement. The original signed agreement will be mailed out tomorrow morning. We need to begin training and testing the businessBridgePlus feature as soon as possible. Can we schedule a day next week for training? Sincerely, Joaquin Leon Deputy City Treasurer City of Vernon 4305 Santa Fe Avenue Vernon, CA 90058 (323) 583-8811 Ext. 365 (323) 826-1491 Fax 1 EASTWESTBANK ACH ORIGINATOR AGREEMENT This Agreement is dated Janua4 , 2011, and Is between the CITY OF VERNON ("Company") and EAST WEST BANK ("Bank"). RECITALS A. Company wishes to initiate Entries (PPD / CCD) pursuant to the terms of this Agreement and the rules of the National Automated Clearing House Association (NACHA) and the California Automated Clearing House Association (the "Rules"), and Bank is willing to act as an Originating Depository Financial Institution with respect to such Entries. B. Unless otherwise defined herein, capitalized terms shall have the meanings provided in the Rules. The term "Entries" shall have the meaning provided in the Rules and shall also mean the data received from Company hereunder from which Bank prepares Entries. C. Company acknowledges that the Automated Clearing House system may not be used in violation of, and the Entries originated by Company must comply with, the laws of the United States, including sanction laws administered by the Office of Foreign Asset Controls ("OFAC"). AGREEMENT 1. Transmittal of Entries By Company. Company shall transmit Entries to Bank to the location and in compliance with the formatting and other requirements set forth in Schedule A attached hereto. Additionally, Company agrees that its ability to originate entries under this Agreement is subject to exposure limits in accordance with the Rules and as set firth j ioWhedulg A attached hereto. The total dollar amount of Entries transmitted by Company to Bank on any one day shall not exceed $ 1,u U 2. Security Procedure. Company and Bank shall comply with the security procedure requirements of the businessBridgePluse program and as described in Schedule B attached hereto with respect to Entries transmitted by Company to Bank 3. Processing Transmittal and Settlement by Bank. (a). Except as provided in Sections 4 and 5, Bank shall (i) process Entries received from Company to conform with the file specifications set forth in the Rules, (ii) transmit such Entries as an Origination Depository Financial Institution to the Federal Reserve Bank San Francisco - Los Angeles Branch (the "ACH") acting as an Automated Clearing House processor, and (ill) settle for such Entries as provided in the Rules. (b) Bank shall transmit such Entries to the ACH by the deadline of the ACH set forth in Schedule C attached two business days prior to the Effective Entry Date shown in such Entries, provided (i) such Entries are received by Bank's related cut-off time set forth in Schedule C on a business day, (ii) the Effective Entry Date is at least two (2) days after such business day, and (III) the ACH is open for business on such business day. For purposes of this Agreement (x) a "business day" is a day on which Bank is open to the public for carrying on substantially all of its business, and (y) 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 provided for herein) is completed as provided in Schedule A. (c) If any of the requirements of clause (1), (ii) or (III) of Section 3(b) is not met, Bank shall use reasonable efforts to transmit such Entries to the ACH by the next deposit deadline of the ACH following that specified in Schedule C which is a business day and a day on which the ACH is open for business. 4. On -Us Entries. Except as provided in Section 5, in the case of an Entry received for debit to an account maintained with Bank (an "On -Us Entry"), Bank shall debit the Receiver's account in the amount of such Entry, provided the requirements set forth in clauses (i) and (ii) of Section 3(b) are met. If either of those requirements is not met, Bank shall use reasonable efforts to debit the Receiver's account in the amount of such Entry on the next business day following such Effective Entry Date. 5. Refection of Entries. Bank may reject any Entry, with or without cause, at its sole discretion. Without limiting the foregoing, Bank may reject any entry which does not comply with the requirements of Section 1 or 2, or which contains an Effective Entry Date more than 5 days after the business day such Entry is received by Bank. Bank shall have the right to reject an On -Us Entry for any reason for which an Entry may be returned under the Rules. Bank shall have the right to reject any Entry if Company has failed to comply with its account balance obligations under Section 9. Bank shall notify Company by phone of such rejection no later than the business day such Entry would otherwise have been transmitted by Bank to the ACH or, in the case of an On -Us Entry, its Effective Entry Date. Bank shall have no liability to Company by reason of the rejection of any such Entry or the fact that such notice is not given at an earlier time than that provided for herein. 6. Cancellation or Amendment By Company, Company shall have no right to the cancellation or amendment of any Entry after its receipt by Bank. However, Bank shall use reasonable efforts'to act on a request by Company for cancellation of an Entry prior to transmitting it to the ACH or, in the case of an On -Us Entry, prior to debiting a Receiver's account, provided such request complies with the security procedure set forth in Schedule B for cancellation of Data, but shall have no liabilityif such cancellation is not effected. 7. ,Notice Of Returned Entries. Bank shall notify Company by e-mail of the receipt of a returned entry from the ACH no later than one business day after the business day of such receipt. Except for an Entry retransmitted by Company in accordance with the requirements of Section 1, Bank shall have no obligation to retransmit a returned Entry to the ACH if Bank complied with the terms of this Agreement with respect to the original Entry. iii EASTWEST BANK S. Payment. Company shall pay Bank the amount of each Entry transmitted by Bank pursuant to this Agreement at such time on the date of transmittal by Bank of such Entry as Bank, In Its discretion, may determine, and the amount of each On -Us Entry at such time on the Effective Entry Date of such Entry as Bank, in its discretion, may determine. 9. The Account. Bank may, without prior notice or demand, obtain payment for an Entry transmitted to Bank by Company pursuant to this Agreement by debiting the account(s) of Company identified in Schedule D attached hereto (the "Account"), and shall credit the Account for any amount received by Bank by reason of the return of an Entry transmitted by Bank for which Bank has previously received payment from Company. Such debit shall be made as of the day of such receipt by Bank. Company shall at all times maintain a balance of available funds in the Account sufficient to cover its payment obligations for Entries transmitted pursuant to this Agreement. 10. Account Reconciliation. Entries transmitted by Bank or debited to a Receiver's account maintained with Bank will be reflected on Company's periodic statement issued by Bank with respect to the Account pursuant to the agreement between Bank and Company. Company agrees to notify Bank promptly of any discrepancy between Company's records and the information shown on any such periodic statement. If Company fails to notify Bank of any such discrepancy within thirty (30) days of receipt of a periodic statement containing such information, Company agrees that Bank shall not be liable for any other losses resulting from Company's failure to give such notice or any loss of interest with respect to an Entry shown on such periodic statement. If Company fails to notify Bank of any such discrepancy within one (1) year of receipt of such periodic statement, Company shall be precluded from asserting such discrepancy against Bank. 11. Company Representations and Agreements: Indemnity. Company represents to Bank and agrees that (a) each person shown as the Receiver on an Entry received by Bank from Company has authorized the initiation of such Entry and the debiting and, in the case of the need to correct an error the crediting, of its account in the amount and on the Effective Entry Date shown on such Entry, (b) such authorization is operative at the time of transmittal or debiting by Bank as provided herein, (c) Entries transmitted to Bank by Company are limited to those types of Entries set forth in Section 1, (d) Company shall perform its obligations under this Agreement in accordance with all applicable laws and regulations including but not limited to Regulation E of the Federal Reserve Board and the sanctions laws, regulations and orders administered by OFAC, and (e) Company shall be bound by and comply with the Rules as in effect from time to time, including without limitation the provision thereof making payment of an Entry by the Receiving Depository Financial Institution to the Receiver provisional until receipt by the Receiving Depository Financial Institution 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 Receiving Depository Financial Institution shall be entitled to a refund from the Receiver of the amount debited and Company shall not be deemed to have paid the Receiver the amount of the Entry. Company shall indemnify Bank against any loss, liability or expense (including attorney's fees and expenses) resulting from or arising out of any breach of any of the foregoing representations or agreements. 12. Liability Limitations On Liability Indemnity. (a) Bank shall be responsible only for performing the services expressly provided for in this Agreement, and shall be liable only for its sole negligence and willful misconduct in performing those services. Bank shall not be responsible for Company's acts or omissions (including without limitation the amount, accuracy, timeliness of transmittal or due authorization of any Entry received from Company) or those of any other person, including without limitation any Federal Reserve Bank or transmission or communications facility, any Receiver or Receiving Depository Financial Institution (including without limitation the return of an Entry by such Receiver or Receiving Depository Financial Institution), and no such person shall be deemed Bank's agent. Company agrees to indemnify Bank against any loss, liability or expense (including attorney's fees and expenses) resulting from or arising out of any claim of any person that Bank is responsible for any act or omission of Company. (b) 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 Bank's acts or omissions pursuant to this Agreement.. (c) Without limiting the generality of the foregoing provisions, Bank shall be excused from failing to act or delay in acting is such failure or delay is caused by legal constraint, interruption of transmission or communication facilities, equipment failure, ware emergency conditions, civil unrest or other circumstances beyond Bank's 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 exceeded any limitation upon is intra-day net funds position established pursuant to present or future Federal Reserve guidelines or in Bank's otherwise violating any provision of any present or future risk control program of the Federal Reserve or any rule or regulation of any other U.S. governmental regulatory authority. (d) Subject to the foregoing limitations, Bank's liability for loss of interest resulting from its error or delay shall be calculated by using a rate equal to the average Federal Funds rate at the Federal Reserve Bank of New York for the period involved. At Bank's option, payment of such interest may be made by crediting the Account resulting from or arising out of any claim of any person that Bank is responsible for any act or omission of Company or any other person describe In Section 12(a). 13. Comollance With Security Procedure. (a) If an Entry (or request for cancellation or amendment of an Entry) received by Bank purports to have been transmitted or authorized by Company, it will be deemed effective as Company's Entry (or request) and Company shall be obligated to pay Bank the ®EASTWEST BANK amount of such Entry as provided herein even though the Entry (or request) was not authorized by Company, provided Bank acted in compliance with the security procedure referred to in Schedule B with respect to such Entry. (b) If an Entry (or request for cancellation or amendment of an Entry) received by Bank was transmitted or authorized by Company, Company shall be obligated to pay the amount of the Entry as provided herein, whether or not Bank complied with the security procedure referred to in Schedule B with respect to that Entry and whether or not that Entry was erroneous in any respect or that error would have been detected if Bank had complied with such procedure. 14. Inconsistency of Name and Account Number. Company acknowledges and agrees that, if an Entry describes the Receiver Inconsistently by name and account number, payment of the Entry transmitted by Bank to the Receiving Depository Financial Institution might be made by the Receiving Depository Financial Institution (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 obligation to pay the amount of the Entry to Bank is not excused in such circumstances. 15. Notifications of Chance. Bank shall notify Company of all notifications of change received by Bank relating to Entries transmitted by Company by mail no later than three (3) business days after receipt thereof. 16. Payment For Services. Company shall pay Bank the charges for the services provided for herein set forth in Schedule E attached hereto. Such charges do not include, and Company shall be responsible for payment of, any sales, use, excise, value added, utility or other similar taxes relating to the services provided for herein, and any fees or charges provided for in the agreement between Bank and Company with respect to the Account (the "Account Agreement'). 17. Amendments. From time to time Bank may amend any of the terms and conditions contained In this Agreement, including without limitation, any cut-off time, any business day, and any part of Schedules A through E attached hereto. Bank shall provide Company with ninety (90) days prior written notice of such amendments. Such amendments shall become effective upon the 91 st day after receipt of notice by Company or such later date as may be stated in Bank's notice to Company. 18. Notices. Instructions. Etc. (a) Except as otherwise expressly provided herein, Bank shall act upon any notice or instruction received from Company, and, when required under terms of this Agreement, shall provide notice or advice to Company with respect to any matter. (b) Bank shall be entitled to rely on any written notice or other written communication believed by it in good faith, and after signature comparison, to be genuine and to have been signed by an Authorized Representative. The names and signatures of Authorized Representatives are set forth in Schedule B attached hereto. Company may add or delete any Authorized Representative by written notice to Bank signed by at least two Authorized Representatives other than that being added or deleted. Signature comparison is not a part of security procedures applicable to transmittal of entries, and rather, shall apply only to the provisions for written notice as set forth in this paragraph. Such notice shall be effective on the second business day following the day of Bank's receipt thereof. (c) Except as otherwise expressly provided herein, any written notice or other written communication required or permitted to be given under this Agreement shall be delivered, or sent by•United States registered or certified mail, postage prepaid, or by express carrier, and, if to Bank, addressed to: EAST WEST BANK 9300 Flair Dr. Suite 202 El Monte, CA 91731 ATTN: Deposit & Payment Services and, if to Company, addressed to: CITY OF VERNON 4105 SAWA FF AV MIE VERNON. CA 90058 ATTN: RORY BURNETT EMAIL:rburnett@ci.vernon.ca.us. unless another address Is substituted by notice delivered or sent as provided herein. Except as otherwise expressly provided herein, any such notice shall be deemed given when received. 19. Data Retention. Company shall retain data on file adequate to permit remaking of Entries for thirty (30) days following the date of their transmittal by Bank as provided herein, and shall provide such Data to Bank upon its request. 20. Termination. Company may terminate this Agreement at any time. Such termination shall be effective on the second business day following the day of Bank's receipt of written notice of such termination or such later date as is specified in that notice. Bank "11 EASTWEST BANK reserves the right to terminate this Agreement immediately upon providing written notice of such termination to Company. Any termination of this Agreement shall not affect any of Company's obligations arising prior to such termination. 21. Entire Agreement. This Agreement (including the Schedules attached hereto), together with the Account Agreement, is the complete and exclusive statement of the agreement between Bank and Company with respect to the subject matter hereof and supersedes any prior agreement(s) between Bank and Company with respect to such 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 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. 22. Non -Assignment. Company may not assign this Agreement or any of the rights or duties hereunder to any person without Bank's prior written consent. 23. Bindina 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, and no other person shall have any right against Bank or Company hereunder. 24. Headings. Headings are used for reference purposes only and shall not be deemed a part of this Agreement. 25. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of California. IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed by their duly authorized officers. COMPANY: BANK: East West Bank Signature: / V r ~ �E Signature: Name: HILARIO GONZALES Name: Flora. Ling Title: MAYOR Date: Signature J" Name: WILLIAM M. MCCORMICR Title: MAYOR PRO—TEM Date: ATT/ 1kard G! YanfagTo ii/, Cit/Y ]Clerk Date: "cv, 72 . 'Z.u\k AP,94VED AS TO FII -. Willard G. a chi, terim City Attorney ®EASTWEST BANK INTERNATIONAL ACH TRANSACTION (IAT) QUESTIONNAIRE To assist your company in determining if your ACH origination transactions are covered by the NACHA Rules governing International ACH Transactions (IATs), please take a few moments to answer the following questions: 1. ACH payment type(s) that your company originates: (check ONE) K] Payments ❑ Collections ❑ Both 2. Is your company a subsidiary of a multi -national company? [I Yes : ] No 3. Does your company have foreign subsidiaries? ❑ Yes .k] No 4. Does your company buy or sell to organizations or individuals outside the territorial jurisdiction of the United States? ❑ Yes K] No 5. Does your company send payroll, pension or benefit payments via the ACH Network to individuals that have permanent resident addresses outside the territorial jurisdiction of the United States? ❑ Yes FKJ No If you answered "YES" to any of the above questions, please answer the following additional questions: 6. Do any of ACH transactions you originate involve funds from an account held at a Bank or other financial agency that is not located in the territorial jurisdiction of the United States? ❑ Yes ❑ No Do any of the ACH transactions you originate involve funds received directly from a Person or make payments directly to a Person who is not located in the territorial jurisdiction of the United States? ❑ Yes ❑ No 8. Does an office of a Bank or other financial agency not located in the territorial jurisdiction of the United States serve as an intermediary in the settlement of any part of an ACH transaction you originate? ❑ Yes ❑ No If you have answered "YES" to any one of the questions 6 through 8, these ACH transactions may be subject to the special processing requirements for IAT transactions as outlined in the NACHA rules. An East West Bank ACH Specialistwill contact you directly to help guide you through this process! ®EASTWEST BANK ACH ORIGINATOR AGREEMENT SCHEDULE A Delivery of Entries Name: CITY OF VERNON Estimated Commencement Date: 5 / 5 / 2011 Bank procedures include the determination and review of certain exposure limits, which may include but are not limited to (a.) the dollar amount of ACH files; (b.) the frequency of origination of ACH files; and (c.) the consideration of the dollar amount of exposure over multiple settlement dates. The total dollar amount of Entries transmitted by Company to Bank with the same settlement date, whether initiated on any one day or over multiple days, should comply with the total dollar amount of Entries limit defined in section 1.of this Agreement. 1. Method of Entry Data Delivery to BANK: ( ) Electronic transmission via payroll processor (X) Business Bridge Plus transmission, ( ) Business Bridge Cash Management II. Company shall deliver Entry data to the following: EAST WEST BANK III. Frequency of Origination: ( ) Daily ( ) Weekly (X ) Bi-weekly ( ) Semi -Monthly ( ) Monthly C EASTWEST BANK ACH ORIGINATOR AGREEMENT SCHEDULE B Page 1 of 2 I. Delivery of Entries - Security Procedure Transactions will be delivered to Bank as specified in Schedule A. Bank Security Procedures: Bank shall be bound by the security obligations set forth In Section 6(c) of the Business Online Banking Terms and Conditions Agreement. Further, in accordance with the security procedure requirements of the businessBridgePlus® program, Bank shall maintain all information entered and displayed online on a secure, encrypted database. Bank shall protect information stored in Bank's database with the use of firewalls. Bank shall only make connections with servers authorized to communicate with Bank's database. To authenticate the identity of Customer's authorized users of the businessBridgePluse program, Bank shall provide Customer's authorized users with password -generating security tokens that produce unique one-time passwords for each authorized user. The security tokens shall generate new unique one-time passwords for each authorized user no less than every sixty (60) seconds. Upon receipt of transactions Bank will further verify the validity of the transactions by: [� Business Bridge Plus transmission- No additional verification will be performed due to security constraints of the Business Bridge Plus system. ❑ Business Bridge Cash Management transmission- No additional verification will be performed due to security constraints of the Business Bridge Cash Management system. 2. Authorized Representatives Authorized Representatives of Customer, and signatures for purposes of notice provided to Bank by Customer (Par. 18) only: DEASTWESTBANK ACH ORIGINATOR AGREEMENT SCHEDULE B Page 2of2 Security Procedure IL Cancellation of Data As specified in Section 6 of the Agreement, Company shall have no right to cancel or amend transactions. EAST WEST BANK will attempt to cancel transaction(s) provided; - transactions have not been transmitted to the ACH or debited to the Receivers account, and - written request is received signed by two of the Authorized Representatives specified below: Signature Name/Title Phone RnRY RTTRNRTT IFINANCE DIRECTOR JOAQUIN LEON / DEPUTY CITY TREASURER Ill. Modification of Security Procedure and Authorized Representatives The above security procedure may be modified by Bank as required. Any modifications requested by Company must be authorized by two (2) of the above listed Authorized Representatives. ®i EASTWESTBANK ACH ORIGINATOR AGREEMENT SCHEDULE C Cut-off Times I. Receipt of Entries Deadline ❑ Company or processor will provide entries to Bank by 3:OOr)m two (2) business days prior to the effective date in order to be considered eligible for processing. 7 Company or processor will provide entries via Business Bridge Plus transmission to Bank by 3:OOi)m two (2) business days prior to the effective date in order to be considered eligible for processing. ❑ Company or processor will provide entries via Business Bridge Cash Management transmission to Bank by 3:OOam two (2) business days prior to the effective date in order to be considered eligible for processing. II. EAST WEST BANK Processing Deadline In the case of Non On -Us Entries, Bank will transmit eligible entries to the ACH for processing by 5:OOpm two (2) business days prior to the effective date. In the case of On -Us Entries, Bank will make eligible entries available to Receiver's account on the effective date. - Bank will transmit, or post in the case of On -Us Entries, non eligible entries at the next available deadline. III. ACH Processing Deadlines - ACH will process all entries received at the next available processing window. ( i EASTWESTBANK ACH ORIGINATOR AGREEMENT SCHEDULE D Account I. Company Account Account number 80362825 (Account) has been specified for the crediting of debits originated on behalf of the Company. Account will be funded with available funds for the total of the payroll file on: ❑ Date file presented to Bank 13 Effective entry date of the transactions II. Rejected Entries Rejected entries will be debited to the abovementioned Account. ®i EASTWESTBANK ACH ORIGINATOR AGREEMENT SCHEDULE E Payment of Services I. Method of Payment ❑ Debit Company's Bank Account as specified in Schedule D. 7 Debit to Account Analysis for Company's Bank account number 80362783 each month for the previous month's service (Bank may, within its sole discretion and without prior notice, discontinue this option with respect to Company. In that event, one of the above methods of payment shall be selected by Company.) VZECEIVE MAR 2 3 2011 CITY CLERK'S OFFICE DATE: March 21, 2011 TO: Honorable Mayor and City Council FROM: Rory Burnett, Director of Finance /�q 2� 4 RE: East West Bank - Payroll Bank Account Agreement RECEIVED MAR 2 2 2011 CITY ADMINISTRATION Recommendation: The City Administrator and the Finance Director are hereby recommending that the City's council approve the attached bank agreement with East West Bank for payroll related services. The will begin processing payroll in-house, a saving of approximately $49,000 a year. DATE: March 22, 2011 TO: Mark C. Whitworth, Fire Chief / City Administrator FROM: Rory Burnett, Director of Finance fq 6,4 12n- 1) RE: East West Bank — Payroll Bank Account Agreement Attached is a Staff Report to the City Council recommending their approval of the agreement between the East West Bank and City of Vernon for ACH payroll services. This will bring the City's payroll processing "in-house" and terminate dependency on "outside" service bureaus, ADP. Recommendation: The City Administrator and the Finance Director are hereby recommending that the City's council approve the attached bank agreement with East West Bank for payroll related services. The will begin processing payroll in-house, a saving of approximately $49,000 a year. D EASTWEST BANK ACH ORIGINATOR AGREEMENT This Agreement is dated January _, 2011, and is between the CITY OF VERNON ("Company") and EAST WEST BANK ("Bank"). RECITALS A. Company wishes to initiate Entries (PPD / CCD) pursuant to the terms of this Agreement and the rules of the National Automated Clearing House Association (NACHA) and the California Automated Clearing House Association (the "Rules"), and Bank is willing to act as an Originating Depository Financial Institution with respect to such Entries. B. Unless otherwise defined herein, capitalized terms shall have the meanings provided in the Rules. The term "Entries" shall have the meaning provided in the Rules and shall also mean the data received from Company hereunder from which Bank prepares Entries. C. Company acknowledges that the Automated Clearing House system may not be used in violation of, and the Entries originated by Company must comply with, the laws of the United States, including sanction laws administered by the Office of Foreign Asset Controls ("OFAC"). AGREEMENT 1. Transmittal of Entries By Companv. Company shall transmit Entries to Bank to the location and in compliance with the formatting and other requirements set forth in Schedule A attached hereto. Additionally, Company agrees that its ability to originate entries under this Agreement is subject to exposure limits in accordance with the Rules and as set forth in Schedule A attached hereto. The total dollar amount of Entries transmitted by Company to Bank on any one day shall not exceed $ 2. Security Procedure. Company and Bank shall comply with the security procedure requirements of the businessBridgePluse program and as described in Schedule B attached hereto with respect to Entries transmitted by Company to Bank 3. Processing, Transmittal and Settlement by Bank. (a) Except as provided in Sections 4 and 5, Bank shall (i) process Entries received from Company to conform with the file specifications set forth in the Rules, (ii) transmit such Entries as an Origination Depository Financial Institution to the Federal Reserve Bank San Francisco - Los Angeles Branch (the "ACH") acting as an Automated Clearing House processor, and (iii) settle for such Entries as provided in the Rules. (b) Bank shall transmit such Entries to the ACH by the deadline of the ACH set forth in Schedule C attached two business days prior to the Effective Entry Date shown in such Entries, provided (i) such Entries are received by Bank's related cut-off time set forth in Schedule C on a business day, (ii) the Effective Entry Date is at least two (2) days after such business day, and (iii) the ACH is open for business on such business day. For purposes of this Agreement (x) a "business day" is a day on which Bank is open to the public for carrying on substantially all of its business, and (y) 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 provided for herein) is completed as provided in Schedule A. (c) If any of the requirements of clause (i), (ii) or (iii) of Section 3(b) is not met, Bank shall use reasonable efforts to transmit such Entries to the ACH by the next deposit deadline of the ACH following that specified in Schedule C which is a business day and a day on which the ACH is open for business. 4. On -Us Entries. Except as provided in Section 5, in the case of an Entry received for debit to an account maintained with Bank (an "On -Us Entry"), Bank shall debit the Receiver's account in the amount of such Entry, provided the requirements set forth in clauses (i) and (ii) of Section 3(b) are met. If either of those requirements is not met, Bank shall use reasonable efforts to debit the Receiver's account in the amount of such Entry on the next business day following such Effective Entry Date. 5. Refection of Entries. Bank may reject any Entry, with or without cause, at its sole discretion. Without limiting the foregoing, Bank may reject any entry which does not comply with the requirements of Section 1 or 2, or which contains an Effective Entry Date more than 5 days after the business day such Entry is received by Bank. Bank shall have the right to reject an On -Us Entry for any reason for which an Entry may be returned under the Rules. Bank shall have the right to reject any Entry if Company has failed to comply with its account balance obligations under Section 9. Bank shall notify Company by phone of such rejection no later than the business day such Entry would otherwise have been transmitted by Bank to the ACH or, in the case of an On -Us Entry, its Effective Entry Date. Bank shall have no liability to Company by reason of the rejection of any such Entry or the fact that such notice is not given at an earlier time than that provided for herein. 6. Cancellation or Amendment By Company, Company shall have no right to the cancellation or amendment of any Entry after its receipt by Bank. However, Bank shall use reasonable efforts to act on a request by Company for cancellation of an Entry prior to transmitting it to the ACH or, in the case of an On -Us Entry, prior to debiting a Receiver's account, provided such request complies with the security procedure set forth in Schedule B for cancellation of Data, but shall have no liability if such cancellation is not effected. 7. Notice Of Returned Entries. Bank shall notify Company by e-mail of the receipt of a returned entry from the ACH no later than one business day after the business day of such receipt. Except for an Entry retransmitted by Company in accordance with the requirements of Section 1, Bank shall have no obligation to retransmit a returned Entry to the ACH if Bank complied with the terms of this Agreement with respect to the original Entry. D EASTWEST BANK 8. Payment. Company shall pay Bank the amount of each Entry transmitted by Bank pursuant to this Agreement at such time on the date of transmittal by Bank of such Entry as Bank, in its discretion, may determine, and the amount of each On -Us Entry at such time on the Effective Entry Date of such Entry as Bank, in its discretion, may determine. 9. The Account. Bank may, without prior notice or demand, obtain payment for an Entry transmitted to Bank by Company pursuant to this Agreement by debiting the account(s) of Company identified in Schedule D attached hereto (the "Account"), and shall credit the Account for any amount received by Bank by reason of the return of an Entry transmitted by Bank for which Bank has previously received payment from Company. Such debit shall be made as of the day of such receipt by Bank. Company shall at all times maintain a balance of available funds in the Account sufficient to cover its payment obligations for Entries transmitted pursuant to this Agreement. 10. Account Reconciliation. Entries transmitted by Bank or debited to a Receiver's account maintained with Bank will be reflected on Company's periodic statement issued by Bank with respect to the Account pursuant to the agreement between Bank and Company. Company agrees to notify Bank promptly of any discrepancy between Company's records and the information shown on any such periodic statement. If Company fails to notify Bank of any such discrepancy within thirty (30) days of receipt of a periodic statement containing such information, Company agrees that Bank shall not be liable for any other losses resulting from Company's failure to give such notice or any loss of interest with respect to an Entry shown on such periodic statement. If Company fails to notify Bank of any such discrepancy within one (1) year of receipt of such periodic statement, Company shall be precluded from asserting such discrepancy against Bank. 11. Company Representations and Agreements; Indemnity. Company represents to Bank and agrees that (a) each person shown as the Receiver on an Entry received by Bank from Company has authorized the initiation of such Entry and the debiting and, in the case of the need to correct an error the crediting, of its account in the amount and on the Effective Entry Date shown on such Entry, (b) such authorization is operative at the time of transmittal or debiting by Bank as provided herein, (c) Entries transmitted to Bank by Company are limited to those types of Entries set forth in Section 1, (d) Company shall perform its obligations under this Agreement in accordance with all applicable laws and regulations including but not limited to Regulation E of the Federal Reserve Board and the sanctions laws, regulations and orders administered by OFAC, and (e) Company shall be bound by and comply with the Rules as in effect from time to time, including without limitation the provision thereof making payment of an Entry by the Receiving Depository Financial Institution to the Receiver provisional until receipt by the Receiving Depository Financial Institution 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 Receiving Depository Financial Institution shall be entitled to a refund from the Receiver of the amount debited and Company shall not be deemed to have paid the Receiver the amount of the Entry. Company shall indemnify Bank against any loss, liability or expense (including attorney's fees and expenses) resulting from or arising out of any breach of any of the foregoing representations or agreements. 12. Liability: Limitations On Liabilitv: Indemnitv. (a) Bank shall be responsible only for performing the services expressly provided for in this Agreement, and shall be liable only for its sole negligence and willful misconduct in performing those services. Bank shall not be responsible for Company's acts or omissions (including without limitation the amount, accuracy, timeliness of transmittal or due authorization of any Entry received from Company) or those of any other person, including without limitation any Federal Reserve Bank or transmission or communications facility, any Receiver or Receiving Depository Financial Institution (including without limitation the return of an Entry by such Receiver or Receiving Depository Financial Institution), and no such person shall be deemed Bank's agent. Company agrees to indemnify Bank against any loss, liability or expense (including attorney's fees and expenses) resulting from or arising out of any claim of any person that Bank is responsible for any act or omission of Company. (b) 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 Bank's acts or omissions pursuant to this Agreement. (c) Without limiting the generality of the foregoing provisions, Bank shall be excused from failing to act or delay in acting is such failure or delay is caused by legal constraint, interruption of transmission or communication facilities, equipment failure, ware emergency conditions, civil unrest or other circumstances beyond Bank's 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 exceeded any limitation upon is intra-day net funds position established pursuant to present or future Federal Reserve guidelines or in Bank's otherwise violating any provision of any present or future risk control program of the Federal Reserve or any rule or regulation of any other U.S. governmental regulatory authority. (d) Subject to the foregoing limitations, Bank's liability for loss of interest resulting from its error or delay shall be calculated by using a rate equal to the average Federal Funds rate at the Federal Reserve Bank of New York for the period involved. At Bank's option, payment of such interest may be made by crediting the Account resulting from or arising out of any claim of any person that Bank is responsible for any act or omission of Company or any other person describe in Section 12(a). 13. Compliance With Security Procedure. (a) If an Entry (or request for cancellation or amendment of an Entry) received by Bank purports to have been transmitted or authorized by Company, it will be deemed effective as Company's Entry (or request) and Company shall be obligated to pay Bank the D EASTWEST BANK amount of such Entry as provided herein even though the Entry (or request) was not authorized by Company, provided Bank acted in compliance with the security procedure referred to in Schedule B with respect to such Entry. (b) If an Entry (or request for cancellation or amendment of an Entry) received by Bank was transmitted or authorized by Company, Company shall be obligated to pay the amount of the Entry as provided herein, whether or not Bank complied with the security procedure referred to in Schedule B with respect to that Entry and whether or not that Entry was erroneous in any respect or that error would have been detected if Bank had complied with such procedure. 14. Inconsistency of Name and Account Number. Company acknowledges and agrees that, if an Entry describes the Receiver inconsistently by name and account number, payment of the Entry transmitted by Bank to the Receiving Depository Financial Institution might be made by the Receiving Depository Financial Institution (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 obligation to pay the amount of the Entry to Bank is not excused in such circumstances. 15. Notifications of Change. Bank shall notify Company of all notifications of change received by Bank relating to Entries transmitted by Company by mail no later than three (3) business days after receipt thereof. 16. Payment For Services. Company shall pay Bank the charges for the services provided for herein set forth in Schedule E attached hereto. Such charges do not include, and Company shall be responsible for payment of, any sales, use, excise, value added, utility or other similar taxes relating to the services provided for herein, and any fees or charges provided for in the agreement between Bank and Company with respect to the Account (the "Account Agreement"). 17. Amendments. From time to time Bank may amend any of the terms and conditions contained in this Agreement, including without limitation, any cut-off time, any business day, and any part of Schedules A through E attached hereto. Bank shall provide Company with ninety (90) days prior written notice of such amendments. Such amendments shall become effective upon the 91 s` day after receipt of notice by Company or such later date as may be stated in Bank's notice to Company. 18. Notices, Instructions. Etc. (a) Except as otherwise expressly provided herein, Bank shall act upon any notice or instruction received from Company, and, when required under terms of this Agreement, shall provide notice or advice to Company with respect to any matter. (b) Bank shall be entitled to rely on any written notice or other written communication believed by it in good faith, and after signature comparison, to be genuine and to have been signed by an Authorized Representative. The names and signatures of Authorized Representatives are set forth in Schedule B attached hereto. Company may add or delete any Authorized Representative by written notice to Bank signed by at least two Authorized Representatives other than that being added or deleted. Signature comparison is not a part of security procedures applicable to transmittal of entries, and rather, shall apply only to the provisions for written notice as set forth in this paragraph. Such notice shall be effective on the second business day following the day of Bank's receipt thereof. (c) Except as otherwise expressly provided herein, any written notice or other written communication required or permitted to be given under this Agreement shall be delivered, or sent by United States registered or certified mail, postage prepaid, or by express carrier, and, if to Bank, addressed to: EAST WEST BANK 9300 Flair Dr. Suite 202 El Monte, CA 91731 ATTN: Deposit & Payment Services and, if to Company, addressed to: ATTN: EMAIL: unless another address is substituted by notice delivered or sent as provided herein. Except as otherwise expressly provided herein, any such notice shall be deemed given when received. 19. Data Retention. Company shall retain data on file adequate to permit remaking of Entries for thirty (30) days following the date of their transmittal by Bank as provided herein, and shall provide such Data to Bank upon its request. 20. Termination. Company may terminate this Agreement at any time. Such termination shall be effective on the second business day following the day of Bank's receipt of written notice of such termination or such later date as is specified in that notice. Bank G EASTWESTBANK reserves the right to terminate this Agreement immediately upon providing written notice of such termination to Company. Any termination of this Agreement shall not affect any of Company's obligations arising prior to such termination. 21. Entire Agreement. This Agreement (including the Schedules attached hereto), together with the Account Agreement, is the complete and exclusive statement of the agreement between Bank and Company with respect to the subject matter hereof and supersedes any prior agreement(s) between Bank and Company with respect to such 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 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. 22. Non -Assignment. Company may not assign this Agreement or any of the rights or duties hereunder to any person without Bank's prior written consent. 23. 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, and no other person shall have any right against Bank or Company hereunder. 24. Headings. Headings are used for reference purposes only and shall not be deemed a part of this Agreement. 25. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of California. IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed by their duly authorized officers. COMPANY: Signature: Name: Title: Date: Signature: Name: Title: Date: BANK: East West Bank Signature: Name: Title: Date: D EASTWESTBANK INTERNATIONAL ACH TRANSACTION (IAT) QUESTIONNAIRE To assist your company in determining if your ACH origination transactions are covered by the NACHA Rules governing International ACH Transactions (IATs), please take a few moments to answer the following questions: 1. ACH payment type(s) that your company originates: (check ONE) ❑ Payments ❑ Collections ❑ Both 2. Is your company a subsidiary of a multi -national company? ❑ Yes ❑ No 3. Does your company have foreign subsidiaries? ❑ Yes ❑ No 4. Does your company buy or sell to organizations or individuals outside the territorial jurisdiction of the United States? ❑ Yes ❑ No 5. Does your company send payroll, pension or benefit payments via the ACH Network to individuals that have permanent resident addresses outside the territorial jurisdiction of the United States? ❑ Yes ❑ No If you answered "YES" to any of the above questions, please answer the following additional questions: 6. Do any of ACH transactions you originate involve funds from an account held at a Bank or other financial agency that is not located in the territorial jurisdiction of the United States? ❑ Yes ❑ No 7. Do any of the ACH transactions you originate involve funds received directly from a Person or make payments directly to a Person who is not located in the territorial jurisdiction of the United States? ❑ Yes ❑ No 8. Does an office of a Bank or other financial agency not located in the territorial jurisdiction of the United States serve as an intermediary in the settlement of any part of an ACH transaction you originate? ❑ Yes ❑ No If you have answered "YES" to any one of the questions 6 through 8, these ACH transactions may be subject to the special processing requirements for IAT transactions as outlined in the NACHA rules. An East West Bank ACH Specialistwill contact you directly to help guide you through this process! C EASTWESTBANK ACH ORIGINATOR AGREEMENT SCHEDULE A Delivery of Entries Name: Estimated Commencement Date: Bank procedures include the determination and review of certain exposure limits, which may include but are not limited to (a.) the dollar amount of ACH files; (b.) the frequency of origination of ACH files; and (c.) the consideration of the dollar amount of exposure over multiple settlement dates. The total dollar amount of Entries transmitted by Company to Bank with the same settlement date, whether initiated on any one day or over multiple days, should comply with the total dollar amount of Entries limit defined in section 1.of this Agreement. I. Method of Entry Data Delivery to BANK: ( ) Electronic transmission via payroll processor ( ) Business Bridge Plus transmission ( ) Business Bridge Cash Management II. Company shall deliver Entry data to the following: EAST WEST BANK III. Frequency of Origination: ( ) Daily ( ) Weekly ( ) Bi-weekly ( ) Semi -Monthly ( ) Monthly G EASTWESTBANK ACH ORIGINATOR AGREEMENT SCHEDULE B Page 1 of 2 I. Delivery of Entries - Security Procedure Transactions will be delivered to Bank as specified in Schedule A. Bank Security Procedures: Bank shall be bound by the security obligations set forth in Section 6(c) of the Business Online Banking Terms and Conditions Agreement. Further, in accordance with the security procedure requirements of the businessBridgePlus® program, Bank shall maintain all information entered and displayed online on a secure, encrypted database. Bank shall protect information stored in Bank's database with the use of firewalls. Bank shall only make connections with servers authorized to communicate with Bank's database. To authenticate the identity of Customer's authorized users of the businessBridgePluse program, Bank shall provide Customer's authorized users with password -generating security tokens that produce unique one-time passwords for each authorized user. The security tokens shall generate new unique one-time passwords for each authorized user no less than every sixty (60) seconds. Upon receipt of transactions Bank will further verify the validity of the transactions by: ❑ Business Bridge Plus transmission- No additional verification will be performed due to security constraints of the Business Bridge Plus system. ❑ Business Bridge Cash Management transmission- No additional verification will be performed due to security constraints of the Business Bridge Cash Management system. 2. Authorized Representatives Authorized Representatives of Customer, and signatures for purposes of notice provided to Bank by Customer (Par. 18) only: D EASTWEST BANK ACH ORIGINATOR AGREEMENT SCHEDULE B Page 2 of 2 Security Procedure II. Cancellation of Data As specified in Section 6 of the Agreement, Company shall have no right to cancel or amend transactions. EAST WEST BANK will attempt to cancel transaction(s) provided; transactions have not been transmitted to the ACH or debited to the Receivers account, and written request is received signed by two of the Authorized Representatives specified below: Signature Name/Title Phone III. Modification of Security Procedure and Authorized Representatives The above security procedure may be modified by Bank as required. Any modifications requested by Company must be authorized by two (2) of the above listed Authorized Representatives. C EASTWESTBANK ACH ORIGINATOR AGREEMENT SCHEDULE C Cut-off Times I. Receipt of Entries Deadline ❑ Company or processor will provide entries to Bank by 3:OOpm two (2) business days prior to the effective date in order to be considered eligible for processing. ❑ Company or processor will provide entries via Business Bridge Plus transmission to Bank by 3:OOpm two (2) business days prior to the effective date in order to be considered eligible for processing. ❑ Company or processor will provide entries via Business Bridge Cash Management transmission to Bank by 3:OOpm two (2) business days prior to the effective date in order to be considered eligible for processing. II. EAST WEST BANK Processing Deadline - In the case of Non On -Us Entries, Bank will transmit eligible entries to the ACH for processing by 5:OOpm two (2) business days prior to the effective date. - In the case of On -Us Entries, Bank will make eligible entries available to Receiver's account on the effective date. - Bank will transmit, or post in the case of On -Us Entries, non eligible entries at the next available deadline. III. ACH Processing Deadlines - ACH will process all entries received at the next available processing window. D EASTWEST BANK ACH ORIGINATOR AGREEMENT SCHEDULE D Account I. Company Account Account number (Account) has been specified for the crediting of debits originated on behalf of the Company. Account will be funded with available funds for the total of the payroll file on: ❑ Date file presented to Bank ❑ Effective entry date of the transactions II. Rejected Entries Rejected entries will be debited to the above mention ed.Account. EASTWESTBANK ACH ORIGINATOR AGREEMENT SCHEDULE E Payment of Services I. Method of Payment ❑ Debit Company's Bank Account as specified in Schedule D. ❑ Debit to Account Analysis for Company's Bank account number each month for the previous month's service (Bank may, within its sole discretion and without prior notice, discontinue this option with respect to Company. In that event, one of the above methods of payment shall be selected by Company.)