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TREASURY MANAGEMENT SERVICES
TERMS & CONDITIONS
Thank you for choosing Arizona Business Bank Treasury
Management Services. This document provides product
information, disclosures and descriptions of Treasury
Management Services (“Services”) available at Arizona
Business Bank, part of CoBiz Bank. Other documents may
become part of our Agreement depending on the Services
you select. Please read all documents carefully; they will
govern the Services provided to you.
TABLE OF CONTENTS
I. GENERAL. ..................................................................................................................................................... 1
II. INTERNET SERVICES. ................................................................................................................................. 4
III. AUTOMATED CLEARING HOUSE. ............................................................................................................. 4
IV. REMOTE CHECK CONVERSION................................................................................................................ 6
V. WIRE TRANSFER......................................................................................................................................... 7
VI. CASH VAULT............................................................................................................................................... 8
VII. POSITIVE PAY. .......................................................................................................................................... 9
VIII. REVERSE POSITIVE PAY....................................................................................................................... 11
IX. LOCKBOX. ................................................................................................................................................. 11
X. AUTO SWEEP ............................................................................................................................................ 11
XI. COMMERCIAL SWEEP ACCOUNTS. ....................................................................................................... 12
ARIZONA BUSINESS BANK
TREASURY MANAGEMENT SERVICES
TERMS & CONDITIONS
I. GENERAL. E. APPLICABILITY OF REGULATION CC.
Customer may request certain treasury management services of CoBiz The availability of funds in the Accounts will be governed by Regulation
Bank (herein the “Bank”) from time to time which the Bank is willing to CC to the Federal Expedited Funds Availability Act. In the event of any
provide on the terms and conditions of this Agreement, including the conflict between the provisions of Regulation CC and the provisions
Schedules attached hereto which pertain to the various treasury hereof, the provisions of Regulation CC shall be controlling.
management services to be provided by the Bank.
F. BANK RULES AND REGULATIONS.
A. DEFINITIONS. All services to be provided hereunder shall be in accordance with, and
The following terms and references shall have the meanings set forth further subject to, Bank’s then applicable rules and regulations which
below when used in this Agreement or any Schedules attached hereto: apply to the Authorized Accounts and to such further policies and
1. “Agent” or “Authorized Agent” means any director, officer, partner, procedures with regard to the services provided hereunder as may be
employee, representative, affiliate, third-party vendor or any other communicated to Customer from time to time in writing. Any credit given
person acting on behalf of Customer with the actual, implied or to an Authorized Account is agreed to be provisional until Bank receives
apparent authority of Customer. Bank may rely on any grant of final settlement. If Bank does not receive final settlement, it is entitled to
authority until it receives written notice of its revocation and is given reverse the entry.
a reasonable amount of time to act upon such notice.
2. “Authorized User” means any director, officer, partner, employee, G. FEES AND PAYMENTS.
representative, affiliate, third-party vendor or any other person Customer shall pay Bank for the Services provided pursuant to fee
designated by Customer acting on their behalf in reference to a schedules or other pricing information provided by the Bank from time to
specific service offered by Bank and used by Customer. time. Any fees for Services may be amended by Bank at any time. Bank
3. “Authorized Instructions” mean unconditional, immediately may, at its option, include fees arising from this Agreement in an analysis
executable orders to Bank to transfer Available Funds from an statement of Customer’s account relationship, bill Customer, or debit
Authorized Account received by Bank from an Authorized Agent in a Customer’s accounts for the Services rendered during the immediately
manner approved by this Agreement. preceding billing period. Bank may promptly debit Customer’s accounts at
4. “Authorized Accounts” means an account of Customer at Bank Bank in the full amount of any such statement, or bill if the amount shown
which is designated by Customer to be subject to this Agreement. on the statement bill is not paid when due.
5. “Available Funds” mean the positive, unrestricted balances in 1. Bank’s willingness to provide Services to Customer is dependent on
Customer’s Authorized Account(s) which are available for Customer’s financial condition. Customer’s financial condition is
withdrawal by Customer, pursuant to Bank’s policies which are then subject to review by Bank from time to time, and such reviews must
in effect and the provisions and requirements of Regulation CC to be satisfactory to Bank in its sole discretion and opinion. Customer
the Federal Expedited Funds Availability Act in effect from time to shall, upon request, provide to Bank any such information as Bank
time. may require to perform any such review. Customer’s failure to meet
6. “Banking Day” or “Business Day” shall mean that part of any day on such standards or provide such information or assistance when
which Bank is open to the public for carrying on substantially all of requested shall constitute a breach of the Agreement and shall
its banking functions; any reference to time of day shall mean and permit Bank to cease providing Services upon written notice to
refer to Mountain Standard Time or Mountain Daylight Savings Customer.
Time, whichever may be in effect on the day in question.
7. “Cut-off Time” means the time by which Authorized Instructions H. ADDITIONAL SERVICES.
must be received by the Bank to permit Bank to transfer funds on Bank may provide Services that are not specifically included in the
the same Business Day. The Cut-off Time may be changed from Services section of this Agreement. By accepting and using any such
time to time. Service, Customer agrees that the Service will be governed by this
8. “Security Procedures” mean the measures adopted by Bank and the Agreement and any other conditions communicated to Customer by
Company including those described in the schedule, to ensure the Bank. Certain Services included in this Agreement may not be available
authenticity, authority and accuracy of Authorized Instructions. or may not be provided in certain market areas.
B. SERVICES. I. PROPRIETARY INFORMATION
Bank will provide Customer with treasury management services (a Customer acknowledges that this Agreement, and all related
“Service” or “Services”), upon Customer’s and Bank’s execution of the documentation and systems used in providing Services, are the property
Authorizations and Schedules to this Agreement as are required by Bank of Bank. Customer agrees that it shall not acquire any rights or interests
for such Services. therein as a result of its use of the Services and shall keep all of the
Bank’s proprietary information strictly confidential.
C. DESIGNATION OF ACCOUNTS.
Customer will provide Bank with written notice of the Authorized Accounts J. SECURITY PROCEDURES
at Bank or other financial institutions to which Customer wishes the 1. Bank and Customer shall agree to one or more security procedures
Services to apply. Any changes in the designation of Authorized that must be used by Bank and Customer in connection with any
Accounts will be in writing and will provide reasonable prior notice of such Service. Customer agrees to be bound by any payment order,
change to Bank. transaction or service change order that is acted upon by Bank in
accordance with such security procedure. Customer is solely
D. DESIGNATION OF AUTHORIZED AGENTS. responsible for maintaining its own internal security and agrees to
The persons authorized to initiate a Service are designated on the use appropriate caution in selecting any company or individual given
Schedules attached to the Master Authorization. Bank shall be entitled to access to use one or more of the Services. Customer shall not
rely on any written notice or other written communication believed by it in disclose any information regarding the Services that an
good faith to be genuine and to have been signed by the Authorized unauthorized user would find helpful to obtain access to all or part of
Agent and any such communication shall be deemed to have been any Service.
signed by such person. Any changes in the designation of Authorized 2. Customer and Bank represent, warrant and mutually agree that all
Agents will be in writing and will provide reasonable prior notice of such confidential information concerning the other party or parties that
change to Bank. comes into its possession in connection with any of the Services,
including, without limitation, security procedures or any security
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codes, keys, personal identification numbers, digital Customer. Should Customer elect to send or receive Electronic
certificates/signatures or template numbers (“Codes”), will be Transmissions to or from Bank, Customer assumes all risks and
maintained in strictest confidence and shall not be used or divulged Bank shall not be liable for any loss that results from the nonreceipt,
to any other party except as may be necessary or advisable for the disclosure or alteration of any such Electronic Transmission.
due performance of any of the Services or as required by applicable
law. Customer is solely responsible for the procedures to assure the L. COMPUTER EQUIPMENT AND SOFTWARE
internal confidentiality of its own security procedures and codes. If Many Services require the use of computer hardware and software.
Customer or its Agents have reason to believe that any security Customer is solely responsible for maintaining its computer equipment in
procedures or Codes have or may become known by unauthorized good working order, with the necessary compatibility and format to
persons (whether or not employed by Customer), Customer shall interface with Bank’s systems, including, without limitation, the ability to
immediately notify Bank by telephone and confirm such verbal support the Bank’s security measures. Customer agrees to install
notification in writing to Bank within 24 hours. Bank will replace the upgrades and other system enhancements within a reasonable time of
security procedures and Codes in accordance with Bank’s security being requested to do so by Bank. License Agreements for necessary
procedures. Customer shall be solely responsible for funds transfer software shall either be embedded in the software or separately
instructions and other communications initiated before Bank documented. Customer agrees to comply with all applicable software
received Customer’s notice and had a reasonable time to act on license agreements, whether or not such agreements have been
such notice. Bank reserves the right to change any or all of the executed by Customer. Customer has no rights or ownership in any
security procedures or codes by giving verbal or written notice to software provided by or through Bank and shall not transfer, copy, alter,
Customer. modify, reverse engineer, reproduce, or convey in any manner, in whole
3. For some Services, Bank may choose to honor Customer’s request or in part, any such software. Customer shall return all software and user
to give Bank verbal instructions regarding the Services. Customer manuals associated with any software upon request. Bank makes no
agrees Bank may in good faith rely on such verbal instructions that representations or warranties with respect to any equipment or software
purport to come from an authorized Agent of Customer without provided by Bank.
independent verification by Bank. 1. Some Services are provided by Bank through access to a third-party
4. Bank will honor Customer’s transactions and instructions (including network. Such Services are dependent upon the availability of the
adjustments, amendments and cancellations) only when Customer third party network on conditions acceptable to Bank. Bank reserves
has complied with this Agreement and related policies and the right to discontinue the Service or provide the Service through
procedures. Bank will be under no obligation to honor, either in an alternative third-party network and shall have no liability should
whole or in part, any transaction or instruction that: such network become unavailable. Bank does not warrant and shall
a) exceeds Customer’s collected or available funds on deposit not be responsible for Services received by Customer from any
with Bank; third-party network.
b) Bank has reason to believe may not be authorized by
Customer; M. TERMINATION.
c) involves funds subject to a hold, dispute or legal process Either party may terminate this Agreement in its entirety, or any Services
preventing their withdrawal; provided hereunder upon 30 days written notice to the other party. Bank
d) violates any provision of any applicable regulation of the may terminate this Agreement or any Services provided to Customer at
Federal Reserve Bank or any other federal, state or local any time after the commencement of any voluntary or involuntary
regulatory authority; or bankruptcy, dissolution or liquidation by or against Customer, or upon any
e) Bank has reasonable cause not to honor, for the protection of merger or acquisition of Customer into or by any other entity, or upon the
either Bank or Customer. breach by Customer of the terms or conditions of this Agreement or any
5. Customer acknowledges, agrees and consents on behalf of itself other agreement or obligation it has entered into with Bank or any of its
and its agents, that Bank may monitor and record telephone affiliates, or upon any event evidencing to Bank a material deterioration in
conversations at any time without further notice to the parties to the financial status or condition of Customer or that the likelihood that the
such conversations. The decision to record any conversation shall credit risks undertaken by Bank in furnishing Services hereunder may be
be solely in Bank’s discretion, and Bank shall have no liability for materially increased, including, but not limited to, insufficient Available
failing to do so. Funds to pay items presented for payment or other return item risks, or if
6. Customer hereby represents and warrants to Bank that any and all Bank has reasonable cause to believe Customer is engaged in any
transfers and commingling of funds required or permitted by any fraudulent or criminal activity.
Service or requested by Customer, and all other aspects of the
performance hereby by Bank and Customer, have been duly N. BANK LIABILITY.
authorized by all necessary parties, including, without limitation, the Bank shall only be liable to the Customer under this Agreement for its
account holder of each account. gross negligence or willful misconduct in performing Services for
7. If Bank receives an adverse claim against any account, and Bank Customer. Bank shall have no liability or responsibility to Customer with
reasonably believes that it will not be protected if the claim is regard to any other matter, including without limitation, its negligence or
ignored, Customer agrees Bank may place a hold on the affected breach of contract, any act or omission by any clearing house, any other
account or move the disputed funds to a holding account. Any such financial institution, the Federal Reserve Bank, or any other person or
action will remain in place only so long as reasonably necessary to entity. Bank shall have no liability to Customer for any nonperformance,
resolve the claim or employ legal remedies to allow a court to decide damages or losses due to strike, breakdowns, non-functioning of
such claim. Bank shall have no liability for dishonored transactions equipment, incompatible software or hardware, electronic data corruption,
which result from such action, and customer agrees to reimburse or other causes or circumstances beyond Bank’s reasonable control. In
Bank for all costs, including attorney fees, incurred due to such the event Bank shall become liable to Customer for its gross negligence
adverse claim. or willful misconduct, such liability will be limited to actual damages
proved. Bank shall have no liability to Customer for any incidental,
K. ELECTRONIC COMMUNICATIONS consequential or special damages.
1. Customer may elect to send or receive instructions or reports from Customer shall promptly furnish written proof of any loss attributable to a
Bank related to Services via electronic means, including, without Service to Bank in writing and shall provide all reasonable assistance to
limitation, facsimile transmission, voice mail, unsecured e-mail, Bank in recovering the loss. If Customer is reimbursed for any loss by
pager or other telephonic methods (“Electronic Transmission”). Bank, Bank shall be subrogated to all rights of Customer related thereto.
Customer acknowledges that such Electronic Transmissions are an Without limiting the effect of the provisions set forth above, any liability of
inherently unsecure communication method due to the possibility of Bank for a transfer incorrectly made by Bank shall be limited to the
error, delay and observation or receipt by an unauthorized amount of such transfer which is not recovered within a reasonable
personnel. Bank may rely in good faith on Customer’s instructions period of time.
regarding how and to what number or e-mail address Electronic
Transmissions should be sent and may rely on any Electronic O. CUSTOMER LIABILITY.
Transmission that it reasonable believes to have been initiated by
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Customer shall be responsible for compliance with all rules and T. ASSIGNMENT.
regulations of any local, state or federal entity, and with all operating Neither party hereto shall assign or delegate any of its rights or
procedures of Bank which are communicated to Customer to the extent obligations hereunder without the prior written consent of the other party,
the same are applicable to Customer. Customer shall indemnify and hold which consent shall not be unreasonably withheld. However, Bank shall
Bank harmless from and against any and all claims, demands, loss, be permitted without the prior consent of Customer, to assign some or all
liability or expenses (including attorneys’ fees and costs) resulting directly of its obligations hereunder to a processor or servicing agent designated
or indirectly from (a) a breach or on compliance of such rules, regulations by Bank who shall be subject to the terms for provision of the subject
or operating procedures by Customer; (b) the delay of any clearing house Service. This Agreement shall be binding upon and benefit the respective
or any financial institution other than Bank in crediting, or the failure of successors and assigns of Customer and Bank, subject to the provisions
such institution to credit the amount of any transaction; or c) the claims of above.
any third party arising from the Services provided hereunder. Customer
may utilize a courier, armored or otherwise, to deliver or receive banking U. ARBITRATION.
transactions, and in so doing, agrees at all times and in all respects that Any controversy or claim arising out of or relating to this Agreement, or
the (a) courier is the Agent of Customer and not of Bank; (b) Bank makes any Addendum hereto shall be decided by arbitration which shall be
no representation or warranty regarding, and assumes no responsibility conducted, upon the request of either party, before three arbitrators
with respect to, any services performed or promised by courier; and (c) (unless both parties agree upon one arbitrator) designated by the
Customer assumes all risk of loss (including loss or theft by third parties American Arbitration Association (the “AAA”), in accordance with the
or employees of Customer or courier) prior to Bank’s acceptance of terms of the Commercial Rules of the AAA, and, to the maximum extent
deliveries from courier and subsequent to courier’s acceptance of applicable, the Federal Arbitration Act (Title 9 of the United States Code),
deliveries from Bank. Customer agrees it and courier will be responsible or if such Act is not applicable, any substantially equivalent state law. The
for all loss recovery procedures and processes, although Bank will parties further agree that arbitrator(s) will decide which party must bear
undertake reasonable efforts to facilitate loss recovery. In the event the expenses of the arbitration proceedings.
Customer requests Bank to provide Services to a parent company,
subsidiary, affiliate, or other commonly owned Company, Customer V. ATTORNEYS’ FEES.
agrees it shall be jointly and severally liable for such Company’s In the event of any conflict pertaining to the subject matter of this
obligations under this Agreement. Agreement in addition to any remedies provided herein or by applicable
law, the prevailing party shall be entitled to recover all costs and
P. NO IMPLIED WAIVER. expenses incurred by the prevailing party in defending itself or in
No failure by either party to insist upon strict performance of any term or enforcing its rights, including, without limitation, court costs, fees of
obligation in this Agreement, or any Addendum hereto, or to exercise any consultants, and reasonable attorneys’ fees.
right or remedy under this Agreement, or any Addendum hereto, shall
constitute a waiver of any such term, obligation, right or remedy. W. ENTIRE AGREEMENT.
Each party has read this Agreement and agrees to be bound by its terms
Q. BUSINESS RECORDS. and conditions. This Agreement supersedes all prior verbal or written
Customer agrees Bank may share information with affiliates about agreements and now together with its Master Authorization, Addenda,
consumer accounts or Services for regulatory compliance, credit Schedules and Exhibits, constitute the complete agreement between the
decision-making, marketing company products and services, parties with regards to its subject matter and cannot be altered except in
administrative and other banking purposes. writing executed by both parties, or as provided herein.
1. Customer has obtained and shall maintain in its regular business
records and make available to Bank upon reasonable demand, for a X. FURTHER ASSURANCES.
period of seven years after termination of the Service, adequate The parties agree to execute and deliver all additional documents and
documentary evidence of proper authorization from the account give all further assurances reasonably necessary to carry out the intent of
holder of each account, executed by the duly authorized officer(s) of the parties with respect to these Services.
the company. Company further represents and warrants that each
transfer or commingling of funds authorized hereunder is not in Y. EXECUTION AUTHORITY.
violation of any agreement, by law or board resolution of Customer The individual(s) executing the Master Authorization hereby represents
or any of its affiliates or subsidiaries, nor is it in violation of any and warrants that they execute this Agreement as Customer, or they
applicable federal, state, local law, regulation, of any decree, have full right, power and authority to execute this Agreement on behalf
judgment, order of any judicial or administrative authority. Each of Customer and that execution and performance of this Agreement by
representation and warranty contained herein shall be continuing Customer has been authorized by all necessary corporate, membership
and shall be deemed to be repeated upon Bank’s effecting each or partnership, as the case may be.
transfer and commingling of funds authorized hereunder.
Z. CHANGES, SUPPLEMENTS OR AMENDMENTS.
R. SEVERABILITY. These Treasury Management Terms and Conditions may be changed,
Should any provision of this Agreement, or any Addendum hereto, supplemented, or amended from time to time by the Bank. Notification of
contravene any applicable law or regulation of any regulatory agency, or any changes, supplements, or amendments will be provided to Customer
should any provision be held invalid or unenforceable by a court or by posting on the Bank’s website. Customer agrees that these Treasury
regulatory body of competent jurisdiction, then each such provision shall Management Terms and Conditions may be changed, supplemented, or
be void, and all other provisions of this Agreement, or any Addendum amended in this manner. Customer’s failure to object in writing to the
hereto, shall remain in full force and effect. changes, supplements or amendments or Customer’s continued use of
Customer’s Account without written objection will be Customer’s
S. GOVERNING LAW. acceptance of the changes, supplements and amendments. Customer’s
This Agreement shall be construed and enforced in accordance with and rejection of any changes, supplements, or amendments to these Terms
governed by the laws of the State of Arizona, except to the extent the and Conditions would be cause for the Bank to suspend or terminate the
Federal law is controlling or provides greater rights or remedies to Bank. Services provided to Customer.
The “UCC” shall mean the Uniform Commercial Code as adopted and
amended in Arizona. Automated Clearing House services shall also be AA. UNLAWFUL INTERNET GAMBLING NOTICE.
governed by NACHA rules. It shall be the responsibility of Customer to Restricted transactions as defined by Federal Reserve Regulation GG
ensure that each ACH transaction and wire transfer complies with all are prohibited from being processed through this account or relationship.
applicable laws, rules, and regulations. This includes, but is not limited to Restricted transactions generally include, but are not limited to, those in
sanctions enforced by the Office of Foreign Assets Control (OFAC). It which credit, electronic fund transfers, checks, or drafts are knowingly
shall further be the responsibility of Customer to obtain information accepted by gambling businesses in connection with the participation by
regarding such OFAC enforced sanctions (OFAC compliance Hotline 1- others in unlawful Internet gambling.
800-540-OFAC).
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II. INTERNET SERVICES. The following additional terms are defined as follows:
Bank has agreed to provide information reporting systems as defined 1. “ACH” means the Automated Clearing House.
herein to allow Customer to access information and utilize Services over 2. “Entries” mean electronic orders through Bank to transfer funds by
the internet. From time to time, Bank may add additional features or means of the ACH.
Services to its internet services, and those additional features or Services 3. “NACHA” is the National Automated Clearing House Association.
will be governed by the terms of this Agreement, its Schedules, and other 4. “Rules” mean the operating rules of NACHA.
applicable agreements, including account agreements, between Bank 5. “Customer Software” means ACH origination software owned,
and Customer. licensed or maintained by Customer.
A. SERVICES. B. TRANSMISSION OF ENTRIES.
Bank will provide Customer with access to Bank’s information reporting Customer will transmit Entries to Bank at the location, in the manner, and
systems as agreed by Bank and Customer, for customer’s Authorized before the deadlines, all as specified by Bank from time to time. The total
Accounts, subject to the terms and conditions of this Agreement. dollar amount of Entries, and the frequency of the Entries shall not
Information reporting systems permit the Customer to view balances, exceed the Limits imposed by Bank from time to time, and shall not in
transactions, and statements, and to initiate stop payment orders, wire any event exceed the funds available for payment of the Entries in the
transfers, internal transfers, Automatic Clearing House (ACH) Entries, Settlement Accounts. Customer authorizes Bank to transmit all Entries
remote deposits, and such future services as are provided by the Bank. received by Bank from Customer in accordance with this Agreement, and
1. Customer agrees to run antivirus software before transmitting data to credit or debit the entries to the specified Authorized Accounts.
to or through any Web Site. Customer may use any commercially
available, industry recognized Antivirus software of the type that C. SECURITY PROCEDURES.
detects and disinfects viruses automatically, without the need for the Customer shall comply with the Security Procedures established by Bank
Customer to execute virus scanning for each file manually. from time to time, and Bank may reject Entries initiated in violation of the
Customer shall update its antivirus software on a regular basis to Security Procedures. If Bank reasonably complies with the applicable
maintain a commercially reasonable level of security. Security Procedures, Customer shall be responsible for any unauthorized
Entries originating from Customer and shall hold the Bank harmless from
B. SECURITY. such Entries. The persons authorized to act for Customer are designated
Customer acknowledges that the information reporting system provided on the Master Authorization.
by Bank is fully automated, and is not monitored by Bank. Customer
acknowledges the importance of maintaining the various passwords and D. RULES.
security devices in the strictest confidence. Customer is solely Customer has obtained, or has access to, the operating rules of the
responsible for the misuse, theft or misappropriation of passwords. The National Automated Clearing House Association (NACHA), as amended
Authorized Accounts must be owned by the same company or family of and updated from time to time (the “Rules”). Customer agrees to comply
companies, and the signatories to this Agreement must be authorized to with, and be bound by, the Rules. Customer will be responsible to
act for all of the Authorized Accounts, as provided in the Account procure updates and amendments to the Rules and to comply with them
Agreements and any authorizing resolutions. Customer shall not resell, without express notice from Bank. Unless otherwise defined herein,
assign, or otherwise provide for the benefit of a third party any capitalized terms have the same meaning as they have in the Rules. In
information reporting services, and Customer shall not permit any third the event Customer violates any of the applicable ACH Rules and
party to obtain access to the information reporting systems. NACHA imposes a fine on Bank because of Customer’s violation, Bank
may charge the fine to Customer. Customer agrees that Bank has the
C. LIABILITY. right to conduct an audit of Customer’s ACH origination processes and
Bank shall have no responsibility to verify Authorized Instructions procedures to ensure compliance with the Rules.
received through the information reporting system if the Authorized
Instructions are made in compliance with this Agreement. As long as E. ORIGINATION SOFTWARE.
Bank complies with its then applicable Security Procedures, Customer ACH origination software utilized by Customer (Customer Software) is
shall be responsible for unauthorized Entries and Transfer Orders, and owned or maintained by Customer. Customer Software is neither owned
shall hold Bank harmless therefrom. Bank may recognize deviations from nor provided by Bank with the exception of the Pathways™ internet
stated Security Procedures, if Customer has by custom and practice services which will permit Customer to originate independent entries.
routinely ratified Entries or Transfer Orders representing a standard Customer Software must create files that are in NACHA format, and must
deviation from Security Procedures. Bank shall not be liable to Customer conform all entries to the format, content, and specifications contained in
for any losses, damages, claims or causes of action arising from: the Rules.
1. the act or omission of any other receiving bank, beneficiary’s bank, 1. If Customer initiates Entries through a third-party vendor (“Vendor”),
the Federal Reserve or other person or entity in connection with an Vendor is the agent of Customer and not of Bank. Bank is not
electronic entry including a Wire Transfer or ACH Entry initiated by responsible for the acts or omissions of Vendor and Customer
Customer through the information reporting system. agrees to be liable for and hold Bank harmless from, any losses
2. nonperformance due to strikes, mechanical or electronic caused by the acts or omissions of the Customer’s Vendor.
breakdowns or other non-functioning of equipment, impossibility of 2. Customer may request Bank to provide deposit reporting services
performance, or other circumstances beyond Bank’s reasonable based on information provided by the Customer or its designated
control; Agent. Information will be delivered to Bank at the time and location
3. the failure of Customer to maintain its security; established by Bank. Bank has no responsibility for the accuracy of
4. nonperformance, malfunction or incompatibility of Customer’s any information provided by Customer. Customer may initiate credit
hardware or software, or the malfunction of the information reporting or debit Entries to accounts designated by Customer at other
system beyond Bank’s reasonable control; financial institutions.
5. any cause except the gross negligence or willful misconduct of
Bank’s employees. F. BANK OBLIGATIONS.
Subject to the provisions of this Agreement, Bank shall in a timely
manner and in accordance with the Rules, process, transmit, and settle
III. AUTOMATED CLEARING HOUSE.
for the Entries received from Customer.
Customer, upon completion of Bank’s Schedules, and any additional
agreements as required by Bank from time to time, and upon approval
G. WARRANTIES.
thereof by Bank, may initiate Entries through Bank for deposit to, and for
Customer warrants to Bank all warranties Customer is deemed by the
payment from, accounts maintained at Bank, by means of the Automated
Rules to make with respect to Entries originated by Customer. Without
Clearing House (“ACH”) system, and Bank shall act as an Originating
limiting the foregoing, Customer warrants and agrees that:
Depository Financial Institution according to the terms of this Agreement.
1. each Entry is accurate, is timely, has been authorized by the party
whose account will be credited or debited and otherwise complies
A. ADDITIONAL DEFINITIONS.
with the Rules;
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2. each debit entry is for a sum which, on the settlement date with with the terms of this Agreement and the Rules in processing the Entry.
respect to it, will be owing to Customer from the party whose Bank shall remake Entries if the Entry was returned by the ACH operator
account will be debited, is a sum specified by such party to be paid due to mishandling of the Entries by Bank, but only if Customer provides
to Customer, or a correction of a previously transmitted erroneous sufficient information to remake the Entry.
Entry;
3. Customer will comply with the terms of the Electronics Funds N. CHECK CONVERSION.
Transfer Act if applicable, or Uniform Commercial Code Article 4A If Bank has approved Customer’s application for ACH check conversion
(UCC4A) if applicable and shall otherwise perform its obligations services, and upon completion of such additional forms as Bank shall
under this Agreement in accordance with all applicable laws and require, Bank shall accept Entries from Customer, or from a vendor on
regulations; Customer’s behalf, and converted by Customer or by a vendor into ACH
4. Customer will retain the original or a copy of the customer compliant format. Bank will process POP, ARC, and BOC Entries
authorizations for consumer Entries as required by the Rules for a properly created by Customer or by a vendor on Customer’s behalf, from
period of not less than two years after termination or revocation of such check conversion in accordance with the Rules. It is the
such authorization and will, upon request of Bank, furnish such responsibility of Customer to ensure that the Entries which it initiates
original or copy to Bank; and comply with the Rules and all applicable laws, including the requirements
5. Customer shall indemnify Bank against any loss, liability or expense of OFAC. Bank may accept additional SEC codes as applicable to check
(including attorneys’ fees and expenses) resulting from or arising out conversion in the future, and such Entries will be governed by this
of any breach of any of the foregoing warranties or agreements. Agreement. Upon request, Customer and any vendors processing Entries
on Customer’s behalf, shall allow Bank to inspect the compliance and
H. “ON-US” ENTRIES. document retention systems of Customers and the vendor.
“On us” entries are defined as those transactions where the receiving
account is held within Bank. Subject to the provisions of this Agreement, O. INTERNATIONAL PAYMENTS.
Bank will settle On-Us entries in accordance with the Rules, but not An IAT entry is a debit or credit entry, which is part of a Payment
before the Effective Date, as provided herein. The Effective Date shall be Transaction involving a Financial Agency outside of the territorial borders
determined in accordance with Bank policy then in effect. of the United States, which is processed through the domestic ACH
network, pursuant to the Rules, including the rules pertaining to
I. PROVISIONAL CREDIT. International ACH Transactions. The Rules establish SEC code “IAT” for
Customer acknowledges that the Rules make provisional any credit given all International ACH Transactions. Customer agrees to be bound by the
for an Entry until Bank receives final settlement. If Bank does not receive Rules, International ACH Transaction Rules, NACHA Operating
final settlement, it is entitled to reverse the Entry and provide such notice Guidelines, and all other applicable statutes, rules and regulations
as required by the Rules. pertaining to IAT, including all applicable OFAC and FinCEN rules and
regulations. Customer acknowledges that IAT entries require additional
J. SETTLEMENT. mandatory information, according to new formatting requirements, in the
Customer will maintain an account (the “Settlement Account”) with Bank computer record for such entries within an ACH batch file. Customer
at all times during the term of this Agreement. Customer will maintain in expressly agrees to identify and properly initiate all IAT entries. Before
the Settlement Account as of the applicable settlement date Available initiating an IAT entry, Customer agrees to understand and accept the
Funds sufficient to cover all credit Entries initiated by it. Customer rules and requirements of the national payment system of the receiving
authorizes Bank to debit the Settlement Account on the applicable foreign country. Customer assumes the risk of currency fluctuation in all
settlement date in the amount of each credit Entry. Customer will IAT entries originated by Customer. Customer assumes the risk of
maintain in the Settlement Account Available Funds sufficient to cover its rejection of its entries according to the rules of the national payment
Entries. Customer also authorizes Bank, without prior notice, to debit the system of the receiving foreign country. Customer understands that
Settlement Account or any other account of Customer for any amount Entries once transmitted by the Gateway Operator are irrevocable and
payable under this Agreement. When required by Bank, Customer will are not subject to the Rules as they pertain to domestic Receiving
maintain sufficient available funds in the Settlement Account at the time Depository Financial Institutions, and are instead governed by the
Customer initiates an Entry, to pay for the Entry. national payments system of the receiving foreign country.
K. CANCELLATION AND AMENDMENT. P. PERIODIC STATEMENTS.
Customer shall have no right to cancel or amend any Entry after receipt The periodic statement issued by Bank for the Settlement Account will
of the file by Bank. However, Bank shall use reasonable efforts to act on reflect credits and debits as a result of the Entries. If Customer does not
a request by Customer to cancel an Entry before transmitting it to the notify Bank within 60 days after Customer’s periodic statement is
Automated Clearing House or settling an On-Us entry. Bank shall have produced of any discrepancy between Customer’s records and the
no liability if it fails to cancel the Entry. information in the periodic statement, Customer shall be precluded from
Bank may transmit a reversing Entry initiated by Customer to correct an asserting such discrepancy against Bank.
Entry which Customer initiated in error. Customer shall notify the receiver
of any reversing Entry which Customer initiates. Notification to the Q. LIABILITY.
receiver shall include the reason for reversal and shall be made no later 1. Bank shall be responsible only for performing the ACH Services
that the Settlement Date of the reversing Entry. expressly provided for in this Agreement and shall be liable only for
its gross negligence or willful misconduct in performing those
L. REJECTION OF ENTRIES. services. Bank shall not be responsible for the Customer’s acts or
Bank may reject any Entry, including an On-Us entry, if it does not omissions (including without limitation the amount, accuracy,
comply with the Rules, if the format is improper, if it violates the Security timeliness of transmittal or due authorization of any Entry received
Procedures, if there are not sufficient Available Funds, or if Customer is from the Customer) or those of any other person, including without
not otherwise in compliance with the terms of this Agreement. Bank shall limitation any Federal Reserve Financial Institution or transmission
use its best efforts to notify Customer of such rejection no later than the or communications facility, any Receiver or Receiving Depository
business day such entry would otherwise have been transmitted by Bank Financial Institution, and no such person shall be deemed Bank’s
or, in the case of an On-Us entry, its Effective Date. Bank shall have no agent. Customer agrees to indemnify Bank against any loss, liability,
liability to Customer by reason of the rejection of any Entry or the fact that and expense (including reasonable attorney’s fees, costs and
such notice is not given at an earlier time than that provided for herein. expenses) resulting from or arising out of any claim of any person
Bank has no obligation to originate a transaction where authorization has that Bank is responsible for any act or omission of Customer or any
been revoked. other person described in this section.
2. In no event shall Bank be liable for any incidental, consequential,
M. NOTICE OF RETURNED ENTRY. special, punitive, or indirect loss or damage which Customer may
Bank shall use its best efforts to notify Customer of the receipt of a incur or suffer in connection with ACH services including without
returned Entry no later than one business day after its receipt. Bank shall limitation loss or damage from subsequent wrongful dishonor
have no obligation to re-transmit a returned Entry if the Bank complied resulting from Bank’s acts or omissions pursuant to this Agreement.
5
3. Without limiting the generality of the foregoing provisions, Bank shall terms of this Agreement. Bank has no obligation to initiate an Entry if
be excused from failing to act or delay in acting if such failure or authorization has been revoked.
delay is caused by legal constraint, interruption of transmission or
communication facilities, equipment failure, war, emergency D. RECORD RETENTION.
conditions or other circumstances beyond Bank’s control. Customer agrees to keep all written authorizations required by the Rules
4. Subject to the foregoing limitations, Bank’s liability shall be limited to for not less than three years after termination of the authorization.
the extent in which Customer has incurred a direct loss. Bank’s Customer must make the authorizations available upon request to Bank
liability for loss of interest shall be calculated by the average Federal or to the RDFI. Customer agrees to keep the original checks for 10 days,
Funds rate at the Federal Reserve Bank of New York for the period and the checks shall be stamped or franked to show that they have been
involved. converted to electronic images and processed. Customer shall keep
5. Customer shall indemnify Bank for any loss or liability from the electronic images of all converted checks for two years. Originals of all
breach of any of the warranties of an originating bank caused by converted checks shall be destroyed not more than 30 days nor less than
Customer, for any Entries initiated by Customer. 10 days after conversion and processing. Customer shall institute
security procedures to safeguard original checks and the electronic
R. INCONSISTENCY OF NAME AND ACCOUNT NUMBER. images of the checks retained hereunder. Customer shall immediately
Customer acknowledges that, if an Entry describes the receiver notify Bank of any suspected security breaches involving the checks
inconsistently by name and account number, payment of the Entry may converted hereunder, or its images.
be made on the basis of the account number even if it identifies a person
different than he named receiver. E. THIRD PARTY VENDOR.
If Customer initiates Remote Check Conversion services through a third
S. DATA RETENTION. party vendor (“Vendor”), Vendor is the agent of Customer and not of
Customer shall retain data on file adequate to permit remaking of Entries Bank. Bank is not responsible for the acts or omissions of Vendor and
for five business days following the date of their transmittal to Bank as Customer agrees to be liable for and hold Bank harmless from, any
provided herein and shall provide such data to Bank upon its request. losses caused by the acts or omissions of the Vendor. Upon Customer’s
authorization, all Entries, images, data, files and instructions received
IV. REMOTE CHECK CONVERSION. from Vendor will be agreed to have been issues by Customer, and Bank
Customer, upon completion of Bank’s Schedules, and any additional may rely thereon.
agreements, as required by Bank from time to time, and upon approval
thereof by Bank, may convert checks received by Customer into F. CUSTOMER’S COVENANTS.
electronic images for processing by Bank as ACH debit Entries or as The Bank shall make available to the Customer a license to use the
Image Replacement Documents, according to the terms of this software of RDM Corporation to scan, verify, quantify and transmit the
Agreement. The electronic images processed as ACH Entries shall be Electronically Presented Checks to the Bank. Customer agrees that the
subject to the provisions of this Agreement for Automated Clearing House software, known as the “ITMS Client” is licensed to the Bank by RDM and
Transactions. The electronic entries processed as IRDs shall be subject sublicensed to Customer. Customer acknowledges that RDM Corporation
to the provisions of this Agreement, and the Account Agreement. retains ownership of the ITMS Client, as well as all copies of the software
code provided to Customer. Customer agrees:
A. ADDITIONAL DEFINITIONS. 1. Not to reverse engineer, decompile, disassemble, modify, translate,
In addition to the terms defined elsewhere in this Agreement, the create derivative works, or make any attempt to discover the source
following terms are defined as follows: code of any software from which the ITMS Client or System is
1. “Remote Check Conversion” means conversion by Customer of comprised;
checks received by Customer into electronic images and the 2. Not to remove obscure, or alter RDM’s proprietary notices,
creation of electronic files in formats as specified or approved by disclaimers, trademarks, or other proprietary rights.
Bank. 3. Not to copy the ITMS Client, except for archive purposes consistent
2. “IRD” means Image Replacement Document within the meaning of with the licensee’s archive procedures;
the Checks for the 21st Century Act. 4. Not to transfer the ITMS Client to a third party;
3. “Act” means the Checks for the 21st Century Act. 5. Not to export the ITMS Client or underlying technology in
4. “NACHA” means the National Automated Clearing House contravention of applicable U.S. and foreign export laws and
Association. regulations;
5. “Rules” means the Operating Rules of NACHA, as amended from 6. Not to use the ITMS Client other than in connection with the use of
time to time. the Bank’s services which utilize the ITMS host system;
6. “Customer Software” means Remote Check Conversion software 7. Not to disable any part of the ITMS system or circumvent any of its
owned by, licensed to, or maintained by Customer. audit trails or safeguards;
8. To be bound by the limitations of liability set our herein and agrees
B. REMOTE DEPOSITS. that RDM, with respect to the ITMS Client, is a third party beneficiary
As provided herein, Bank will accept from Customer images and of the end user license agreement and that the provisions related to
electronic files representing checks received by Customer, for credit to the ITMS Client are made expressly for the benefit of, and are
the Account, and for debit to the account of the drawer of the checks. enforceable by, RDM.
Bank will process the debits as ACH Entries or as IRD, according to the
Rules, and the instructions or files received from Customer. Customer G. WARRANTIES OF CUSTOMER.
makes the warranties contained herein, in the Act, and in the Rules Customer represents and warrants to the Bank that:
concerning the converted checks, and authorizes Bank to debit the 1. Customer is the holder of all checks or drafts transmitted for deposit
Account for returned, rejected or dishonored debits or items, or for hereunder;
warranty claims made by the Receiver, the RDFI, the drawer, or the 2. Any prior endorsements on the back of the checks or drafts are
drawee bank. genuine and authorized;
3. After imaging, Customer agrees to keep the original checks for at
C. TRANSMISSION OF ENTRIES OR ELECTRONIC FILES. least 10 days, and the checks shall be stamped or franked to show
Customer will transmit Entries or electronic files for IRD processing to that they have been converted to electronic images and processed.
Bank, at the location, in the manner, and before the deadlines, all as Customer shall keep legible electronic images of all converted
specified by Bank. Customer authorizes Bank to transmit all Entries and checks for two years.
process all IRD received by Bank from Customer in accordance with this 4. No checks or drafts whose image is presented for deposit according
Agreement, and to credit the Account therefor. Bank may reject any Entry to the terms hereof will be deposited more than once, either by
or IRD if it does not comply with the Rules (Entry), if the format is additional imaging or by depositing the original check or draft
improper, if it violates the Security Procedures, if there are not sufficient independently of the Electronic Deposit.
available funds (Credit Entry), or if Customer is not in compliance with the 5. Images sent by Customer to Bank for electronic deposit processing
shall be of reasonable commercial clarity as defined from time to
6
time by Bank or by RDM, and any deposit or transmission which
fails to maintain reasonable commercial clarity may be rejected by Customer’s obligation to pay Bank the amount of the funds transfer in the
the Bank. event that the Fedwire message does not identify the same account or
financial institution is not excused in such circumstances. When names
H. ACKNOWLEDGMENT BY CUSTOMER. and numbers are inconsistent, the numbers shall control. With respect to
Customer acknowledges that: incoming wire transfers that do not indicate an account number
1. Customer shall be solely liable for any Electronic Deposit received recognizable to Bank, Bank may return the wire transfer to the sending
by the Bank that is the result of unauthorized use of or access to the financial institution without incurring any liability. Customer does not have
Security Procedures, whether by agents or employees of Customer the right to reverse, adjust, or revoke any Fedwire message after it is
by third parties or otherwise. received by Bank; however, Bank will use reasonable efforts to act on
2. Customer shall only use the RDM software. such a request by Customer to reverse, adjust or revoke such message
3. Bank has obtained a license of the RDM software and has the before Bank has sent the outgoing wire transfer. With respect to an
permission of RDM to sublicense the RDM ITMS Client software to outgoing wire transfer already transmitted by Bank, Bank shall, at
the Customer pursuant to the terms of this Agreement. Bank makes Customer’s request, request the receiving financial institution to return
no warranty or representation concerning the operation, reliability, funds previously transferred. Customer understands and agrees that the
effectiveness or security of the ITMS Client software, except to pass receiving financial institution may or may not comply with any such
through any warranty made by RDM. The Bank makes no request.
representation about the warranties of RDM.
4. All implied warranties are expressly disclaimed by the Bank and by Customer’s authorization for reverse wire requests shall remain in effect
RDM Corporation, and that the implied warranties of merchantability until Customer gives written notice to Bank. Bank will have a reasonable
and fitness for a particular purpose are expressly disclaimed herein. time to act on any written notice received from Customer.
In consideration of Bank’s compliance with this authorization, Customer
V. WIRE TRANSFER. agrees Bank’s treatment of any charge, and Bank’s rights with respect to
Customer desires to enter into an agreement to authorize the Wire it, shall be the same as if the entry were initiated personally by Customer.
Transfer of funds from Authorized Accounts at Bank at such times, and in Bank shall have no liability if any charge is dishonored.
such amounts as Customer may from time to time direct. Bank has
agreed to provide the wire transfer services as set forth herein. C. TIMING.
Unless the Authorized Instructions otherwise direct, Bank shall initiate the
A. DEFINITIONS. Wire Transfer on the Business Day on which the Payment Order is
In addition to the terms defined elsewhere in this Agreement, the received. If the Payment Order is received after the Cut-off Time, Bank
following terms are defined as follows: shall initiate the Wire Transfer on the next Business Day.
1. “Cancellation Order” means an unconditional, immediately D. SECURITY.
executable order to the Bank to cancel a prior payment order, which 1. Customer shall comply with the applicable Security Procedures of
is received by Bank from an Authorized Agent in a manner approved Bank, and Bank may reject Payment Orders which do not conform
by the wire transfer schedule. to the security procedures.
2. “Payment Order” means an unconditional instruction to Bank to 2. Bank shall have no responsibility to verify the Authorized
initiate a Wire Transfer. A Payment Order constitutes “Authorized instructions, if the Authorized Instructions are made in compliance
Instructions” if it orders the wire transfer of Available funds from an with the Security Procedures selected by Customer. However, Bank
Authorized Account by an Authorized Agent in a manner approved may (without being required to do so) obtain additional verification of
by this Agreement. any Authorized Instructions or Cancellation Orders.
3. “Wire Transfer” means an unconditional instruction of Bank through 3. As long as Bank complies with the Security Procedures, Customer
the Federal Reserve System’s “Fedwire” or otherwise to a Receiving shall be responsible for unauthorized Transfer Orders, and shall
Bank to pay, or to cause another bank to pay, a fixed or hold Bank harmless therefrom.
determinable amount of money to a beneficiary, and to be 4. Bank may also recognize deviations from stated Security
reimbursed directly or indirectly by Bank. Procedures, if Company has by custom and practice routinely
4. “Drawdown Request” means a request over the Fedwire to debit an ratified Transfer Orders representing a standard deviation from the
Authorized Account and send the funds to the requesting bank. Security Procedures.
B. WIRE TRANSFER SERVICES. E. DECLINED TRANSACTIONS.
Bank shall issue a Wire Transfer to transfer Available Funds from the Bank may reject a Payment Order if the format of the Authorized
Authorized Accounts in accordance with a Payment Order received by Instructions is improper, if Customer has not complied with the Security
Bank in a form acceptable to Bank. Bank may make such Wire Transfer Procedures, if Bank has a concern about the authenticity, authority and
by any reasonable means, including without limitation, the use of such accuracy of the Payment Order, if there are not sufficient Available
intermediary bank or banks as the Bank deems advisable. Funds, or if Customer is not otherwise in compliance with the terms of
If requested by Customer and agreed to by Bank, Customer may initiate this Agreement. If Bank receives a Cancellation Order that does not
a standing payment order, which is one where Customer pre-programs comply with Security Procedures, Bank may, but shall not be required to,
the beneficiary, the beneficiary’s financial institution, and the accounts to decline to issue the Wire Transfer. Bank has no obligation to originate a
be debited and credited and such information remains constant for Wire Transfer where authorization has been revoked.
subsequent payment orders. Customer shall provide Bank with the
necessary information to execute the standing payment order, including, F. NOTIFICATION.
without limitation, the dollar amount to be transferred or the desired In the event Bank declines to make a Wire Transfer, or in the event Bank
preestablished balance, the frequency of the order and the day of the refuses to honor a Cancellation Order, Bank shall notify Customer before
week or month when the payment order is to be executed. Customer may the Cut-off Time, by telephone call directed to one of the Authorized
terminate a standing payment order at any time upon receipt by Bank of a Agents at the telephone number provided by Customer. If Bank cannot
written notice. reach Customer by telephone after reasonable attempts to do so, Bank
may provide notice by e-mail or fax, and such notice shall be mailed to
If requested by Customer and agreed to by Bank, Customer authorizes Customer on the same Business Day. Bank shall have no obligation to
Bank to debit Customer’s account(s) with Bank upon receipt of a Fedwire notify Customer of Bank’s failure to honor any Payment Order for which
drawdown request, and to send funds to the Requesting Bank. Each Bank has received and honored a Cancellation Order that complies with
transfer will be done on the Business Day Bank receives the incoming the Security Procedures.
request from the Requesting Bank if the request is received within a
reasonable time to determine whether Customer’s Account has sufficient G. CANCELLATION AND AMENDMENT.
available funds and to obtain access to the Federal Reserve network Bank shall cancel a Payment Order upon receipt of a Cancellation Order
prior to the end of business day. that complies with the Security Procedures, provided Bank has not
7
already issued the Wire Transfer. Authorized Instructions may not be 2. Bank may rely on the identifying number of any intermediary or
amended. Authorized Instructions may be cancelled and new Authorized beneficiary’s bank included in Customer’s Transfer Order as proper
Instructions may be issued. In all amendments and cancellations, Bank and conclusive identification of such intermediary or beneficiary’s
shall have a reasonable time to implement the changes to the prior bank, even though Customer’s Transfer Order also identifies such
Payment Order or Cancellation Order, and Bank shall have no liability if intermediary or beneficiary’s bank by name; Customer shall be
the prior orders are executed before Bank can reasonably implement the responsible for any mistake in such number(s) as provided to Bank
amendment or cancellation. and Bank has no duty to verify any identifying number provided by
Customer.
H. CUSTOMER OBLIGATIONS. 3. The beneficiary’s bank may make payment on Customer’s Transfer
Customer shall be liable to Bank for any Wire Transfer executed pursuant Order on the basis of an identifying or bank account number, even if
to Authorized Instructions, whether or not actually authorized by such number identifies a person other than the beneficiary named in
Customer, which is issued in Customer’s name and accepted by Bank in the payment order; Customer shall be responsible for any mistake in
compliance with the Security Procedures. Customer shall indemnify, such number as provided to Bank; and Bank has no duty to verify
defend and hold Bank and its agents and employees harmless from and any identifying or bank account number provided by Customer.
against any and all claims, damages, liabilities, costs, actions and causes
of action including without limitation reasonable attorneys’ fees, arising VI. CASH VAULT.
out of: (a) any default by Customer under this Agreement, (b) Bank’s A. DEFINITIONS.
compliance with Payment Orders Instructions or Cancellation Orders in In addition to the terms elsewhere in this Agreement, the following terms
accordance with the Security Procedures, or (c) any other action or are defined as follows:
inaction of Bank pursuant to this Agreement or in compliance with 1. “Items” mean cash, checks, and negotiable instruments.
applicable law or regulation. 2. “Depository Bag” means a tamper proof bag approved by Bank for
the transfer of Items to Bank for deposit.
I. REFUND. 3. “Designated Agent” means the agent or service designated by
In the event a Payment Order of Bank, issued in acceptance of Customer to transfer the items to Bank for deposit and to Customer
Customer’s Authorized Instructions, is not completed for any reason, after withdrawal from the Authorized Accounts.
Bank shall not be required to refund any funds to Customer until Bank 4. “Withdrawal Order” means an order to Bank to withdraw funds and
has received satisfactory confirmation of cancellation of the Wire deliver them to the Designated Agent for transfer to Customer. A
Transfer. In the case of a refund to Customer, Bank may deduct all Withdrawal Order constitutes “Authorized Instructions” if it orders the
expenses it may have incurred in connection with the uncompleted withdrawal of Available funds from an Authorized Account by an
transfer, including any losses from currency valuations or fluctuations at Authorized Agent in a manner approved by Bank.
the time of the refund.
B. CASH VAULT SERVICES.
J. WARRANTIES OF CUSTOMER. Bank agrees to accept deposits of Items by Customer into the Authorized
1. Customer represents and warrants to Bank that the Authorized Account, which are delivered by the Designated Agent on Banking Days
Instructions to Bank is for and on behalf of Customer, unless and at such locations and times as are designated by Bank to Customer
otherwise stated. from time to time. Bank agrees to permit Customer to withdraw Available
2. Customer will comply with the terms of the Electronics Funds Funds from Authorized Accounts and have the funds delivered to the
Transfer Act if applicable, or Uniform Commercial Code Article 4A Designated Agent for transfer to Customer.
(UCC4A) if applicable and shall otherwise perform its obligations
under this Agreement in accordance with all applicable laws and C. TIMING.
regulations. All Items properly received by Bank in the Depository Bag will be
processed for deposit to the Authorized Account through normal banking
K. L IABILITY OF THE BANK. procedures and will be credited to the Authorized Account on the same
Bank shall not be liable to Customer for any losses, damages, claims or day, if delivered before Bank’s deadline on any Banking Day.
causes of action arising from:
1. Bank’s declining to conduct any funds transfer in accordance with D. SECURITY.
the section of Declined Transaction; 1. The delivery of items and receipt of cash withdrawals shall be done
2. the act or omission of any other receiving bank, beneficiary’s bank, by an Authorized Agent, who shall be identified to the Bank. The use
or other person or entity in connection with a funds transfer initiated of ID codes is optional, but if the Customer elects not to use them,
by Customer and Bank; the Customer shall be responsible for all losses which the ID codes
3. nonperformance due to strikes, mechanical or electronic could have prevented regardless of the conduct of the Bank. At
breakdowns or other non-functioning of equipment, impossibility of some future date the Bank may provide the ID codes and require
performance, or other circumstances beyond Bank’s reasonable that they be used in placing a cash withdrawal order.
control; or 2. If arranged by Customer, the Bank shall verify that a Withdrawal
4. losses experienced in the international transfer of funds. Order is authorized by confirming the identification code that
accompanies the order with the code furnished to the Bank by the
In the event of a mistake in the amount or beneficiary of a Wire Transfer Customer. The Bank may, in its sole discretion, but shall not be
pursuant to Authorized Instructions, which mistake is the result of Bank’s obligated to, verify cash orders by telephone call-back or other
gross negligence or willful misconduct, or a funds transfer that is not verification. The Customer agrees that the identification code
pursuant to Authorized Instructions and that is not authorized or ratified security procedure is commercially reasonable.
by Customer, Bank shall be liable to Customer only for the amount of 3. The Bank shall have no responsibility to verify the Authorized
funds erroneously transferred which is not recovered within a reasonable Instructions, if the Authorized Instructions are made in compliance
period of time. In no event shall Bank be liable for incidental, indirect, with the Security Procedures and this Addendum. However, the
consequential or special damages. Claims for interest compensation are Bank may (without being required to do so) obtain additional
subject to the National Council for Uniform Interest Compensation verification of any Authorized Instructions or Withdrawal Orders.
(NCUIC) for domestic transactions and the U.S. Council of International 4. As long as the Bank complies with the Security Procedures, the
Banking (USCIB) rules for international transactions. Customer shall be responsible for unauthorized Withdrawal Orders,
and shall hold the Bank harmless therefrom.
L. ACKNOWLEDGMENT BY CUSTOMER. 5. The Bank may also recognize deviations from stated Security
Customer acknowledges that: Procedures, if the Company has by custom and practice routinely
1. Customer shall be solely liable for any Authorized Instructions ratified Withdrawal Orders representing a standard deviation from
received by Bank that are the result of unauthorized use of or the Security Procedures.
access to the Security Procedures, whether by agents or employees 6. The Customer assumes all risk of loss which occurs after delivery of
of Customer by third parties or otherwise. the items to the Designated Agent and prior to the Bank’s receipt
thereof. The Bank will have no responsibility whatsoever for
8
Depository Bags or items delivered to, or left with, the Bank at any
locations or during any hours not designated by the Bank. The I. DELIVERY TO DESIGNATED AGENT.
Customer assumes responsibility for loss or confusion from its Prior to delivery of any cash to Customer’s Designated Agent, the Bank
failure to use a proper Depository Bag, and from its failure to sort will require execution by the Designated Agent of a receipt in form and
and label the contents. substance satisfactory to Bank. The Customer agrees that the Bank’s
7. Customer shall be fully responsible for its choice of a Designated count of cash disbursed shall be deemed correct for all purposes. The
Agent, for all acts and omissions of such Designated Agent and for Customer agrees that it fully understands the Bank’s cash count
any contractual relationships it may enter into with such Designated procedures and that the same are adequate and accurate. The Bank
Agents. The Designated Agent will be an agent of, and under the shall have no responsibility other than to make reasonable efforts to
direction of, the Customer and not of the Bank. ascertain the identity of the Designated Agent receiving the Customer’s
8. Customer may designate which Authorized Agent may be contacted cash disbursement and to obtain that Designated Agent’s receipt for said
by the Bank for verification of the type or amount of the contents of a cash. The Bank shall have no responsibility for the handling of such cash
Depository Bag. after receipt thereof by the Designated Agent. The Bank reserves the
right to terminate any cash disbursement at any time in its sole discretion.
E. RECEIPT OF DEPOSIT.
Receipt of the depository bag by the Bank shall not be effective until the
VII. POSITIVE PAY.
Bank makes written receipt therefore on a manifest sheet or other receipt
Customer desires to provide to the Bank from time to time a list of checks
according to the procedures of the Bank. The Bank’s acceptance or
initiated by Customer to enable the Bank to verify by check number and
acknowledgment of such manifest sheet or receipt shall not evidence
amount the checks which the Bank charges to the account of the
Bank verification of the contents of the depository bag or accuracy of the
Customer. The Bank has agreed to verify the checks which it pays
deposit slip. It is specifically agreed that the Bank will not verify the
according to the terms of this Agreement
amount of the deposit contained in the Depository Bag upon the Bank’s
receipt of the depository bag, but that the Bank will later verify the amount
A. STATUTORY DEFINITIONS.
of said deposit in accordance with its normal banking practices.
1. Unless otherwise defined in this Agreement, words or phrases shall
have the meanings set forth in U.C.C. Article 3- “Negotiable
If the deposit is submitted to the Bank, but not in compliance with the
Instruments” and U.C.C. Article 4- “Bank Deposits and Collections.”
requirements of this Addendum, the Bank may reject said deposit and
refuse to process it, or the Bank may, but shall not be obligated to,
B. ADDITIONAL DEFINITIONS.
contact Customer by telephone and attempt to verify the contents of the
In addition to the definitions elsewhere in this Agreement, the terms
Depository Bag before accepting the items for deposit.
below are defined as follows:
F. DEPOSIT PROCESSING.
1. “Check Issue Report” means a list of checks, described by at least
The Bank will attempt to total the cash contained in the depository bag
Check number and amount, drawn by the Customer on an
before it is deposited to the Authorized Account unless circumstances
Authorized Account, provided by the Customer to the Bank by the
require the Bank to credit the Authorized Account before verifying the
terms of this Agreement.
cash. If the Authorized Account is Credited before the cash is verified, the
2. “Exception Check” means a Presented Check that does not match a
Bank will make any necessary cash adjustments the next Banking Day.
check included in a Check Issue Report.
In the event of a discrepancy in the amount of cash counted by the Bank
3. “Exception Check Report” means a list of Exception Checks which is
and that indicated on Customer’s deposit slip, the Bank will follow the
provided by the Bank to the Customer by the terms of this
Customer’s written instructions regarding such variances.
Agreement.
4. “Pay Request” means the instruction of the Customer to the Bank
The Customer agrees that the Bank’s count of cash and other items in
ordering the Bank to pay an Exception Check.
the depository bag shall be deemed correct for all purposes. The
5. “Presented Check” means a check drawn on an Authorized Account
Customer understands the Bank’s procedures for receipt of, totaling and
and presented to the Bank for payment through the check collection
depositing the items and acknowledges that these procedures are
system.
adequate and commercially reasonable. No special handling procedures
6. “Return Request” means the instruction of the Customer to the Bank
for the items will be effective unless agreed to by the Bank in writing.
ordering the Bank not to pay an Exception Check.
1. Pre-encoded Deposits. If Customer chooses to pre-encode its
C. CHECK ISSUE REPORT.
checks or other items for deposit, Customer agrees to comply with
The Customer shall submit a Check Issue Report to the Bank.
the pre-encoded deposit procedures and specifications as may be
established and revised by Bank. Customer shall be responsible for
1. The Check Issue Report shall accurately state the check number
any of its encoding errors. Bank may treat certain deposits as un-
and the exact amount of each check written on each Authorized
encoded deposits if there is an unacceptable rate of encoding
Account since the last Check Issue Report was submitted.
errors.
2. Customer shall send the Check Issue Report to Bank in the format
and medium, by the deadline(s), at scheduled day(s), and at the
G. WITHDRAWAL ORDERS.
place(s) from time to time specified by Bank and agreed to by
Orders for cash withdrawals may be made to the Bank in writing or by
Customer.
telephone. Each Withdrawal Order shall designate the amount of funds
requested and the denominations in which the funds are to be furnished.
D. REPORTING OF EXCEPTION CHECKS.
All cash disbursement requests will be charged directly to the Customer’s
Bank shall compare each Presented Check received by Bank. When
Authorized Account unless special arrangements have been made with
checks are presented for payment and for charge to the Authorized
the Bank. Customers may require their employees to use identification
Account, Bank:
codes which have been previously provided to the Bank. If used, the
1. shall not refuse to pay and charge to the Authorized Account by
Bank will use its best efforts to decline Withdrawal Orders with invalid
reason of this Agreement, each Presented Check that matches by
identification codes. If identification codes are not used by the customer,
check number and amount a check shown in any Check Issue
the customer assumes responsibility for any losses which could have
Report;
been prevented by the use of identification codes.
2. shall provide to the Customer an Exception Check Report that
specifies the check number and amount of any Exception Checks;
H. DECLINED TRANSACTIONS.
and
The Bank may reject a Withdrawal Order if the Authorized Instructions
3. shall send the Exception Check Report to the place(s) specified by
are improper, if Customer has not complied with Security Procedures, if
Customer and in the format and medium, and by the deadline(s),
the Bank has a concern about the authenticity, authority, or accuracy of
from time to time specified by Bank. The initial format, medium,
the Authorized Instructions, if there are not sufficient Available Funds, or
if Customer is not otherwise in compliance with this Agreement.
9
deadlines and place to submit the Exception Check Report are Report if: (a) Customer issued a timely Return Request, or (b)
contained on Exhibit A attached hereto. Customer selected the Return default option and did not issue a
timely Pay Request. In the event that there is wrongful honor:
E. PAYMENT AND DISHONOR OF EXCEPTION CHECKS. a. Bank shall be liable to Customer for the lesser of the amount of
Bank will pay or return Exception Checks in accordance with the default the wrongfully paid Exception Check or Customer’s actual
option selected by Customer for each Authorized Account. damages resulting from Bank’s payment of the Exception
Check.
F. PAY DEFAULT. b. Bank expressly waives any right it may have to assert that
1. This option is selected automatically if Customer makes no selection Customer is liable for the amount of the wrongfully honored
or revokes a selection without making a new default selection. Exception Check on the grounds that the Exception Check was
2. Where Customer has selected the pay default option to apply to an properly payable under U.C.C. section 4-401.
Authorized Account, Bank shall not refuse to pay and charge to the c. Bank retains the right to assert Customer’s failure to exercise
Authorized Account by reason of this Agreement, any Exception reasonable care under U.C.C. sections 3-406(a) and 4-406(c).
Check provided that Customer has not objected to such payment in Bank’s wrongful honor shall however constitute a failure of
a timely Return Request. Bank to have exercised ordinary care under the loss allocation
3. A Return Request shall identify each Exception Check Customer provisions of U.C.C. sections 3-406(b) and 4-406(e).
desires not to pay by the check number and amount and shall d. Bank retains the right to assert the defense that Customer has
instruct Bank to return the Exception Check. sustained no actual damages because Bank’s honor of the
4. The Return Request shall be sent to Bank in the format and Exception Check discharged for value a valid indebtedness to
medium, by the deadline(s), and at the place(s) specified by Bank Customer.
and agreed to by Customer. e. Customer has the duty to mitigate its damages.
5. Bank shall return to the depository bank or presenting party any f. If Bank credits the Authorized Account for a check wrongfully
Exception Check Customer instructs the Bank to return as provided honored, Bank may at its option be subrogated to the rights
above. and claims of Customer to recover the wrongfully paid amount
from the payee or transferee of the check.
G. RETURN DEFAULT.
1. This Option is only selected by an Authorized Agent in writing and J. WRONGFUL DISHONOR.
not revoked by Customer. Except as provided below, it shall constitute wrongful dishonor by Bank if
2. Where Customer has selected the return default option to apply to Bank by reason of this Agreement dishonors a check which was not an
an Authorized Account, Bank shall return to the depository bank or Exception Check, or if Bank by reason of this Agreement dishonors an
to the party presenting the check any Exception Check presented for Exception Check if: (a) Customer issued a timely Pay Request, or (b)
payment on that Account, unless Customer instructs Bank to pay the Customer selected the pay default option and did not issue a Return
check in a timely Pay Request. Request.
3. The Pay Request shall identify each Exception Check that Customer 1. Bank’s liability for wrongful dishonor of an Exception Check shall be
desires to be paid by the check number and amount specified in the limited to the damages for wrongful dishonor recoverable under
Exception Check Report and shall instruct Bank to pay such U.C.C. Articles 3 and 4.
Exception Check. 2. Notwithstanding Section 3.3.1, Bank shall have no liability to
4. The Pay Request shall be sent to Bank in the format and medium, Customer for wrongful dishonor when Bank, acting in good faith,
by the deadline(s), and at the place(s) specified by Bank and agreed returns an Exception Check:
to by Customer. a. that it reasonably believed was not properly payable;
b. if there are insufficient Available Funds on deposit in the
Bank shall not refuse to pay and charge to the Authorized Account by Authorized Account;
reason of this Agreement, any Exception Check that Customer directs c. if required to do so by the service of legal process on Bank or
Bank to pay as provided above. the instructions of regulatory or government authorities or
courts; or o
H. CUSTOMER AND BANK COMMUNICATIONS. d. otherwise in conformance with Bank’s rules, regulations and
Customer or Bank, at its discretion, may each submit to the other party a policies.
revision of any communication provided for under this Agreement. The
revised communication must (a) be sent in its entirety and not in the form K. RIGHTFUL PAYMENT AND DISHONOR.
of a partial amendment to the communication originally sent, (b) identify Except as provided below:
the original communication, and (c) be sent in the format and medium, by 1. If Bank honors an Exception Check in accordance with a Pay
the deadline(s), and at the place(s) established by the receiving party. A Request issued by Customer, such honor shall be rightful, and
properly submitted revised communication serves to revoke and replace Customer waives any right it may have to assert the Exception
the original communication. Check was not properly payable under U.C.C. section 4-401.
1. Bank shall use only Check Issue Reports that comply with this 2. If Bank dishonors an Exception Check in accordance with the return
Agreement and have not been revoked as provided herein in the default option selected by Customer or in accordance with a Return
preparation of Exception Check Reports. Request issued by Customer, the dishonor shall be rightful and
2. Customer shall use only Exception Check Reports that comply with Customer waives any right it may have to assert that the dishonor
this Agreement and have not been revoked as provided herein in the was wrongful under U.C.C. section 4-402.
preparation of Pay Requests and Return Requests. 3. Customer agrees Bank exercises ordinary care whenever it rightfully
3. Bank shall not be obligated to comply with any Pay Request or pays or returns an Exception Check consistent with the provisions of
Return Request received in a format or medium, after a deadline, or the Agreement.
at a place not permitted under this Agreement but may instead treat
such a Pay Request or Return Request as though it had not been L. FAULTY INFORMATION.
received. Bank shall be liable for any actual losses, other than consequential
4. Bank is not responsible for detecting any Customer error contained damages, proximately caused by its honor of a check that was not
in any Check Issue Report, Pay Request or Return request sent by properly payable or its dishonor of a check that was properly payable if
Customer to Bank. the honor or dishonor occurred because Bank, in accordance with the
provisions of section 2 of this Agreement:
I. REMEDIES. 1. Should have shown the check as an Exception Check but failed to
To the extent applicable, the liability provisions of U.C.C. Articles 3 and 4 so; or
shall govern this Agreement, except as modified below. 2. Showed the check on an Exception Check Report but referenced
1. It shall constitute wrongful honor by Bank if Bank pays an Exception the wrong check number unless Bank provided Customer with timely
Check which it failed to list in a timely Exception Check Report, or if correct information, or unless Customer had actual knowledge of the
Bank pays an Exception Check listed in a timely Exception Check error.
10
In no event shall Bank be liable for any incidental, consequential, special, C. ENDORSEMENT.
punitive, or indirect loss or damage which Customer may incur or suffer in Bank shall supply the endorsement to credit the Payment to the account
connection with this Agreement including without limitation loss or of Customer. When required by a subsequent holder, Bank is authorized
damage from subsequent wrongful dishonor resulting from Bank’s acts or to endorse the item in the name of and on behalf of Customer by any of
omissions pursuant to this Agreement. Bank’s authorized employees. In instances where the actual
endorsement of Customer is required, Bank shall forward such items to
Without limiting the generality of the foregoing provisions, Bank shall be Customer as described below.
excused from failing to act or delay in acting if such failure or delay is
caused by legal constraint, interruption of transmission or communication D. DEPOSIT.
facilities, equipment failure, war, emergency conditions or other Bank will create a deposit slip for each Payment or series of Payments
circumstances beyond Bank’s control. received and endorsed by Bank, and Bank will deposit the Payments to
Customer’s Authorized Account
Subject to the foregoing limitations, Bank’s liability shall be limited to the
extent that the Customer has incurred a direct loss. Bank’s liability for E. TIMING.
loss of interest shall be calculated by the average Federal Funds rate at The Payments will be processed on the Banking Day the Payments are
the Federal Reserve Bank of New York for the period involved. received by Bank. The Payments will be processed and forwarded by
To the extent that Customer suffers a loss under the Agreement, Bank Bank for payment through regular banking channels in accordance with
assigns to Customer any claim that the bank would have against a Bank’s then current procedures.
depositary or collecting bank to recover the loss, including any claim of
breach of warranty under U.C.C. sections 4-207, 4-208, and 4-209. F. INSPECTION.
Bank will make its best efforts to inspect each Payment for the name of
M. SECURITY PROCEDURES. payee, signature of maker and the amount. Bank will attempt to deliver to
Customer shall comply with the Security Procedures established by Customer any checks without the signature of maker.
Bank, and Bank may reject Check Issue Reports, Pay Requests or
Return Requests which are provided to Bank in violation of the Security G. FORWARDING.
Procedures. If Bank reasonably complies with the applicable Security Bank shall physically or electronically forward to Customer periodically:
Procedures, Customer shall be responsible for any unauthorized reports 1. any material obtained by Bank other than the Payments and the
or requests originating from Customer and shall hold Bank harmless envelopes containing the Payments;
therefrom. 2. any item which requires the physical endorsement of the Customer;
3. unsigned checks;
VIII. REVERSE POSITIVE PAY 4. any Payments which Bank believes in its sole judgment contain any
1. Customer shall identify all accounts subject to Reverse Positive Pay material alteration or discrepancy; and
(“Account”). When a check is presented for payment against an 5. an image of the Payments and the deposit slip.
Identified Account, Bank shall deliver the account number, check 6. an image of the Mail received with the Payments.
number, and amount of the presented check (the “Paid File”) to
Customer prior to the designated time, on the business day following Physical Lockbox materials shall be sent to Customer through First Class
the day of presentment of the check. U.S. Mail. Alternative physical delivery methods may be selected by
2. Customer shall compare the information provided by Bank with Customer, and the cost of such delivery services shall be the
Customer’s check issuance records. Customer shall notify Bank responsibility of Customer.
prior to the deadline established by Bank of Customer’s decision on
any reported checks that should be dishonored. Bank may rely on H. LIABILITY OF BANK.
any instructions received from Customer that it reasonably believes Bank shall have no liability to Customer for any delay, nonperformance,
to be genuine. Bank is authorized to finally pay any check listed on erroneous information, or mishandling of the Payments absent gross
the Paid File unless Customer instructs Bank to return the item prior negligence or willful misconduct. Bank does not guarantee specific
to the established deadline. Customer shall notify Bank by the receipt or collection of Payments within a specific time frame. Bank
designated deadline if the Paid File has not been received from cannot be responsible for specialized processing of Payments bearing
Bank. Bank will make reasonable efforts to provide the Paid File to restrictive endorsements, postdated Payments, Payments incorrectly
Customer and honor Customer’s instructions. Bank’s failure to provide a drawn or containing incomplete or ambiguous provisions. Such Payments
Paid File will not discharge Customer’s obligation with regard to any item will be processed or rejected according to Bank’s standard operating
that was otherwise properly payable at the time of presentment. procedures unless other procedures are agreed to by Bank and
Customer in writing. Bank does not guarantee the images of the Mail will
be complete or legible. Bank will have no liability for the failure to provide
IX. LOCKBOX. images of all of the Mail, or for the failure to provide images of legible
Customer desires Bank to process payments and credit Customer’s quality. The failure to provide complete or readable images of the Mail
Authorized Accounts for payments received in Customer’s designated shall not go to the essence of the Lockbox services, and shall not be
Lockbox. deemed a material default in the Bank’s agreement to provide Lockbox
services.
A. DEFINITIONS.
In addition to the terms defined elsewhere, the terms below are defined I. RETURNED PAYMENTS.
as follows: If any of the Payments are returned to Bank unpaid after Bank has
1. “Lockbox” means a post office box or zip code for which Bank will forwarded the same for payment and if the Payment can be re-presented,
have unrestricted, exclusive access for the purpose of receiving the Bank has the authority to forward the item for payment a second time
Payments from Customer’s obligators. unless otherwise specified by Customer. If the item is not paid after being
2. “Payments” mean checks, drafts, money orders, or other forwarded for payment the second time, the Payment shall be sent to
instruments evidencing payment which Bank receives from the Customer and the unpaid amount shall be charged back to the Deposit
obligators of the Customer. Account.
3. “Mail” means all letters, cards, Payments, and items delivered to the
Lockbox. J. COMMUNICATION.
Subject to Bank’s then existing capabilities and requirements, and for
B. LOCKBOX SERVICES. such additional fees as Bank’s then existing schedule of fees and
Bank will establish for Customer a Lockbox to which Customer may direct services may provide, Bank will forward the daily deposit totals to
the mailing of Payments from Customer’s obligators. Bank is authorized Customer as indicated on the attached Schedules.
and instructed to open the Mail, remove the contents and deposit the
Payments to the Authorized Accounts.
X. AUTO SWEEP
11
Customer desires to transfer balances between Subordinate Accounts CORPORATION, ARE NOT OBLIGATIONS OF, OR GUARANTEED BY,
and a Master Account in the exact amount necessary to maintain a target THE BANK, THE UNITED STATES GOVERNMENT OR ANY AGENCY
balance in the Subordinate Accounts. OR INSTRUMENTALITY THEREOF, AND ARE SUBJECT TO
1. Customer shall designate a primary demand deposit account as the INVESTMENT RISKS, INCLUDING LOSS OF PRINCIPAL OF THE
“Master Account” and its other accounts with Bank as “Subordinate AMOUNT INVESTED.
Account(s).” Customer authorizes and directs Bank to transfer funds
between the Lead and Subsidiary Accounts to bring the balances of If a Commercial Sweep Account Investment Option has been requested
all Subsidiary Accounts to a designated amount. Notwithstanding and agreed to by Bank, Customer authorizes Bank to transfer funds on a
contrary provisions herein, Customer may draw checks against manual or automated basis to and from the demand deposit account
Subsidiary Accounts provided that the aggregate amount of all such (“DDA”) and investment device designated in the schedule as described
checks does not exceed Customer’s available or collected funds on herein. Funds will be transferred between the accounts so that:
Deposit in the Lead Account, subject to uncollected funds, negative 1. To the extent funds are available in either account, Customer’s DDA
balance or other charges. maintains an average collected balance equal to a pre-established
balance; and (b) any collected funds in the DDA that exceed the
A. DEFINITIONS. Pre-established balance are invested by Bank as directed by
In addition to terms defined elsewhere, the terms below are defined as Customer in accordance with the Specification Sheet. Amounts
follows: invested in money market mutual funds, including investment
2. “Master Account” means an account at Bank owned by Customer income, will be liquidated and credited back to the DDA as needed
and designated to provide or receive internal funds transfers to or so that the average collected balance of Customer’s DDA equals the
from the Subordinate Accounts. Peg Balance. Amounts invested in other investment options,
3. “Subordinate Account” means an account at Bank owned by including interest or other investment income, will be credited back
Customer and designated to be brought periodically to a target to the DDA upon maturity. Bank may limit the amount of excess
balance pursuant to this Addendum. collected funds that it will invest on behalf of Customer on any
particular Business Day. Bank may also impose a maximum
B. TRANSFER SERVICES. redemption amount to bring the DDA to the Pre-established balance
Bank shall transfer funds between the Master Account and the on a particular Business Day.
Subordinate Accounts to adjust the balances in the Subordinate Accounts 2. Bank is authorized to accept verbal instructions, including telephone
as provided in the Schedules attached to this Agreement. If the instructions, from Customer representatives for the transfer of funds
designated balance in the Subordinate Account exceeds the target between Bank and Customer and between Customer’s accounts.
balance, then the excess funds will be debited from that account and Bank may rely on any instructions received from Customer that it
credited to the Master Account. If the balance in the Subordinate Account reasonably believes to be genuine.
is less than the target balance, then the required funds will be debited 3. Bank is authorized to execute as Agent for Customer all certificates
from the Master Account and credited to the Subordinate Account. of ownership and other instruments required by law or by contract.
Bank shall not be accountable for errors in judgment but only for
C. ACCOUNTS. gross negligence or willful misconduct. Bank shall not be required to
Customer designates Master and Subordinate Accounts as provided on comply with any direction of Customer which in Bank’s judgment,
the Schedules attached to this Agreement. may subject it to liability or to defend or prosecute any suit or action
unless indemnified in a manner and amount satisfactory to it.
D. FREQUENCY. 4. Customer may, by written instrument executed by Customer and
Transfers will be made daily. delivered to Bank, terminate this Service and withdraw from the
account the principal and accumulated income upon paying all sums
E. AMOUNT. due to Bank and indemnifying Bank to its satisfaction against
Bank is authorized and directed to transfer funds between the Master liabilities incurred in the administration of the account.
Account and the Subordinate Accounts as frequently as set forth herein 5. If Customer chooses to invest excess funds in Repurchase
or in the Schedules, to bring the Ledger Balance or Collected Balance (as Agreements, Customer agrees to execute the Master Repurchase
selected on the Schedules attached to this Agreement) of the Agreement with Bank, as Bank may require from time to time.
Subordinate Accounts to the value designated on the Schedules attached Customer also agrees that in the event of a bank failure, Customer
to this Agreement. would be an owner of the purchased securities.
6. If Customer chooses to invest excess balances in Money Market
F. CHANGES TO DIRECTIONS. Mutual Fund (MMMF), Customer agrees to execute Money Market
Customer may change these directions at any time by delivering Mutual Fund agreement with Bank, as Bank my require from time to
Authorized Instructions to Bank. Changes to these instructions shall be time. Customer also agrees that in the event of a bank failure, to the
implemented by Bank within a reasonable time after Bank’s receipt of the extent of Customer’s Investment in this fund, they would be a
new Authorized Instructions. secured creditor of the MMMF. Additionally, funds not sent to MMMF
as of the end of the business day on the day of bank failure, would
G. AVAILABLE FUNDS. remain in the deposit account, and would be insured subject to
Customer is responsible for maintaining Available Funds in the Master applicable insurance coverage limits.
Account in an amount to cover checks and other debit items presented to 7. If Customer chooses to invest excess balances in Eurodollar Sweep,
the Subordinate Accounts. If there are insufficient Available Funds in the Customer has been informed and understands that a Eurodollar
Master Account to cover the total amount of checks and other debit items sweep at Bank is an automated overnight investment into a USD
presented to the Subordinate Accounts, Bank may return the checks or account in the Cayman Island Branch of the bank. As such, the
items to the parties who presented them for payment. Federal Reserve requires a minimum deposit of $100,000.
Eurodollar investments receive a lesser preference than U.S.
H. BANK RULES AND REGULATIONS. deposits in a bank liquidation, and may be subject to cross border
All services to be provided hereunder shall be in accordance with, and risk including withdrawal restrictions imposed by the government of
further subject to, Bank’s then applicable rules and regulations which the Cayman Islands. In the event of a bank failure, Customer would
apply to the Authorized Accounts and to such further policies and be an unsecured creditor of the bank.
procedures with regard to the services provided hereunder as may be 8. If a Commercial Sweep Account-Loan Option has been requested
communicated to Customer from time to time in writing. by Customer and agreed to by Bank, Customer authorizes Bank to
transfer funds on a manual or automated basis to and from
Customer’s DDA to a pre-established credit facility (such as a
XI. COMMERCIAL SWEEP ACCOUNTS.
promissory note or revolving line of credit). Funds will be transferred
NOTICE: THE INVESTMENT OPTIONS OFFERED BY BANK UNDER
between the accounts so that Customer’s DDA maintains the pre-
THE COMMERCIAL SWEEP ACCOUNT ARE NOT DEPOSITS, ARE
established balance. Funds will be drawn from Customer’s credit
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
facility if Customer’s DDA falls below the pre-established balance.
12
Funds in excess of the pre-established balance shall be applied to
any outstanding balance on Customer’s credit facility. The
Commercial Sweep Account-Loan Option may be used in
conjunction with the Commercial Sweep Account - Investment
Option. This section is subject to the provisions of this Agreement
and Customer’s credit facility. In the event of a bank failure, funds
transferred to the loan will reduce the outstanding balance, while
funds remaining in the deposit account will be insured under
applicable insurance coverage limits.
13
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