Merchant Processing Agreement

Last updated: 28th April 2020

Introduction

This Merchant Processing and any terms expressly incorporated herein ("Merchant Processing") apply to any access to, or use of, any service made available by Stronghold. This includes the use of the website stronghold.co and its subdomains (the "Stronghold Site"), any mobile applications or any application programming interface (API) provided by Stronghold relating to Stronghold, and to any other related services provided by Stronghold relating to the Stronghold Site (collectively, the "Stronghold Services").

By clicking on an "I Agree" button, or check box presented with or within these Terms, by E-Sign Consent on the Stronghold Site, API, or any Stronghold partner website or app, or elsewhere, or by using any Stronghold Services, you agree that you have read, understood, and accept all of the terms and conditions contained in this Agreement, as well as Stronghold's Privacy Policy.

Part 1: Automated Clearing House Processing Agreement

This Automated Clearing House Processing Agreement (this “Agreement’) is entered into as of the earlier of (i) the date you, acting on behalf of the entity identified in the application submitted to Processor (the “Client’), request access to the Services or the date the Client submits an application to Stronghold Institution Services LLC (the “Processor”), and (ii) the date Processor approves Client’s use of Services (the “Effective Date”). This Agreement is entered into by and amount Client and Processor. Each may be referred to herein as a “Party” or collectively as “Parties.”

WHEREAS, Processor provides Automated Clearing House (“ACH”) services as a third-party processor to businesses for the purpose of such businesses receiving payments for the sale of their goods or services or otherwise making payments due to other businesses for goods or services (the “Services”);

WHEREAS, Client is in the business of buying and selling goods and services;

WHEREAS, Client desires to engage Processor to provide Client with Services to pay amounts due in connection with Client’s business or to receive payment from Client’s customers for the purchase of goods or services; and

WHEREAS, Processor desires to provide Client with Services subject to the terms herein.

NOW, THEREFORE, in consideration of the mutual covenants and conditions hereinafter set forth, the Parties hereto, intending to be legally bound, agree as follows:

1. Definitions

1.1 Except as otherwise specifically indicated in this Article 1 or elsewhere in this Agreement, capitalized terms used in this Agreement shall have the meanings set forth in the NACHA Rules (as defined below):

• Account means individually and collectively the Client Account and/or Customer Account.
• ACH has the meaning provided in the recitals.
• Agreement has the meaning provided in the preamble.
• Business Day means Monday through Friday, excluding federal banking holidays.
• Client has the meaning provided in the preamble.
• Client Account means a deposit account established by Client at a bank designated by Processor that has the ability to receive ACH Entries from the Federal Reserve or any other ACH Operator for debit and credit to the account.
• Confidential Information means any and all information that is disclosed by one Party to the other Party and that relates to a Party’s business or the Parties’ business relationship hereunder.
• ...

2. The Services

2.1 Processor may enter into relationships with one or more ODFIs to facilitate ACH transactions submitted or requested by Client.

2.2 Subject to the limitations set forth herein and in the Rules, Processor shall: (i) process Entries received from the Client to ensure such Entries conform with the file specifications set forth in the NACHA Rules; and (ii) transmit such Entries to ODFI to then be transferred to an ACH Operator, either directly or via a third-party ACH processor.

3. Responsibilities; Representations, Warranties and Covenants

3.1 Client agrees to be bound by, and comply with, the Rules, as the same may be amended from time to time. Client confirms, for every Entry submitted to Bank, that Client has received authorization from the Customer.

3.2 Notwithstanding anything to the contrary, Client represents and warrants that, with respect to all Entries Processor originates for Client: (i) each Receiver has authorized the debiting and/or crediting of its account and that such authorization contains the information and is in the format required by the Rules and has not been revoked.

4. Compensation

4.1 Client agrees to pay to Processor the fees set forth in a schedule provided to Client at or prior to the date Processor approves Client’s application to use the Services.

5. Compliance, Audit and Reserve Account

5.1 Compliance. Client represents that neither it nor any of its affiliates, officers, employees or agents are listed on any Specially Designated Nationals list of the OFAC.

6. Data Security and Confidentiality

6.1 Unless otherwise agreed to in advance, in writing, by Processor or except as expressly permitted by this Agreement, Client will not, except as required by law or court order, use Confidential Information of the Processor or disclose it to any third party.

7. Indemnification, Disclaimer and Limitation of Liability

7.1 Neither Processor nor ODFI shall be responsible for Client’s acts or omissions.

8. Term and Termination

8.1 This Agreement will take effect on the Effective Date and continue until the first anniversary of the Effective Date (the “Initial Term”) and will renew automatically for successive additional terms of one (1) year each unless Client notifies Processor of non-renewal.

9. Miscellaneous

9.1 Additional Representations and Warranties. Client represents, warrants and covenants to Processor that:

• (i) it is duly organized, validly existing and in good standing as a corporation or other entity as represented herein under the laws and regulations of its jurisdiction of incorporation, organization or chartering;
• ...

10. Security Procedures

Client agrees to comply with the Security Procedures set forth in this Schedule B in transmitting all Entries (including amendments and cancellations) pursuant to this Agreement.