Section 1. THE SERVICE.
These Image Cash Letter Service Terms (the “Service Terms”) set forth the terms under which Customer may electronically transmit Images of Eligible Items (each as defined below) through Customer’s own methods and devices to Bank for processing (the “Service”). The Service is also subject to the General Provisions of the Treasury Management Terms and Conditions Agreement (the “Agreement”) as if fully incorporated herein and all Applicable Laws. In the event of a conflict between these Service Terms and other terms in the Agreement, these Service Terms shall control. Unless otherwise defined herein, any capitalized terms shall have the meaning as set forth in the Agreement. Any reference to the Agreement herein shall be deemed to include these Service Terms.
Section 2. DEFINITIONS.
In addition to the defined terms in the Agreement, the following terms used in these Service Terms shall have the meanings given below:
“Eligible Item” has the meaning given in Section 4.
“File” means, collectively, the Images, MICR Data, amount of the Check(s) and Customer’s Instructions transmitted using the Service.
“Image” means an electronic image of the front and back of a Check.
“MICR Data” means all Magnetic Ink Character Recognition (MICR) line information on a Check.
Section 3. PROCESSING.
(a) Customer Obligations. Customer agrees to follow all of Bank’s present and future requirements and instructions, including Operational Instructions, related to the Service. All Eligible Items transmitted to Bank using the Service must be legible and meet Bank’s processing requirements. Customer is responsible for the quality and accuracy of each Image created, and for insuring that the corresponding MICR Data matches the correct Image and Check. Customer understands that Bank will not review or verify any information or data in the Images, nor will Bank review or have any responsibility for any restrictive endorsements or legends (e.g., “paid in full” or similar) or any similar information on any Image. Customer shall be responsible for communication costs, if any, for the transmission of data and/or the retrieval of data in connection with Customer’s use of the Service.
(b) Cutoff Time. Subject to the terms hereof, any Images received before the Cutoff Time will be processed on the Business Day they are received. If for any reason Bank is unable to process an Image received before the Cutoff Time, Bank will use commercially reasonable efforts to resolve the next Business Day. Any Image received by Bank (i) near the Cutoff Time that requires Bank’s review, (ii) at the Cutoff Time, (iii) after the Cutoff Time, or (iv) on a day that is not a Business Day, will be processed on the next Business Day.
(c) Processing Procedures. Bank shall process the Images (and related deposits of the Checks represented by the Images and MICR Data therein) in accordance with its then-current processing procedures (“Procedures”) and the Operational Instructions. As part of the Procedures, Bank may limit the number of Images or Files, and place limits on single item and aggregate dollar value of Checks, that Customer may transmit as set forth in the Operational Instructions or otherwise communicated by Bank to Customer from time to time. If an Image transmitted to Bank does not comply with Bank’s processing requirements, Bank may in its discretion:
(d) Confirmation. Customer’s successful transmission of a File to Bank for processing will be confirmed by a notice from Bank. Notwithstanding Customer’s receipt of a confirmation notice, Bank shall not be deemed to have received an Image for deposit until Bank has processed it according to the Procedures and these Service Terms.
(e) Funds Availability. Once an Image has been accepted for deposit, the funds from such Image will be available for withdrawal as specified in the Deposit Availability Disclosure in Bank’s Rules Governing Deposit Accounts as it may be amended from time to time, unless a separate funds availability schedule for the Service has been provided to Customer. All accepted deposits remain subject to final payment and the terms of the Rules Governing Deposit Accounts.
(f) Rejected or Returned Checks and Images. Bank can reject any Image or File Customer transmits to Bank for any reason in Bank’s discretion without liability, even after Bank has provided Customer with a confirmation notice. Bank will use reasonable efforts to notify Customer if Bank rejects any Image or File for deposit. Bank will process any returned Eligible Items in accordance with Applicable Law and the Rules Governing Deposit Accounts.
Section 4. ELIGIBLE ITEMS.
The Service can only be used for “Eligible Items,” which are items that:
Customer may not image, transmit or otherwise try to use the Service to deposit Checks or items that are not Eligible Items. The following are not Eligible Items:
Section 5. SECURITY AND CONTROLS.
(a) Customer Review. Each day that Customer submits a File using the Service, Customer will review all input and output, controls, reports, email messages and documentation to ensure the integrity of Files processed by Bank and if any error results or any File is rejected due to incorrect information submitted by Customer, Customer will immediately report such error to Bank. Customer understands that Bank’s ability to make adjustments for errors is limited by Applicable Law. If Bank causes an error or loses any Image, Bank’s sole obligation is to recreate or correct the Image.
(b) Retention Period; Destruction of Original Checks. Customer agrees that once an Image has been confirmed by Bank as having been successfully transmitted through the Service, Customer shall securely store the original Check for a commercially reasonable retention period of at least 30 days, not to exceed 60 days. During the retention period, Customer agrees to take appropriate security measures to ensure that only authorized personnel have access to the original Check, that the information contained on the Check is not disclosed, and that the original Check will not be duplicated, scanned more than once, re-presented, re-deposited or negotiated in any way. Upon request by Bank, Customer will promptly, but in any event within five (5) Business Days, provide to Bank a retained original Check, or a sufficient copy of the front and back thereof, in order to aid in the clearing and collection process, to resolve claims by third parties, or for Bank’s audit or fraud loss prevention purposes. After the retention period expires, Customer shall permanently destroy the original Check in a timely manner by shredding it or by any other commercially reasonable manner. Customer agrees to indemnify Bank for any Losses incurred in connection with Customer’s failure to maintain the security of the original Check or failure to comply with the retention and destruction provisions outlined herein.
(c) Security Procedures. The transmission of Images or other data to Bank using the Security Procedures agreed upon for the Service will be deemed for all purposes to be authorized by Customer. In addition to the Security Procedures, Bank recommends that Customer establish authorities and a system to require separation of duties among Customer’s Users for the Service to mitigate risks of unauthorized Checks or Files submitted to Bank for deposit.
Section 6. REPRESENTATIONS AND WARRANTIES.
(a) Customer represents and warrants to Bank that: (i) it will transmit only Eligible Items to Bank through the Service; (ii) Customer has legal authority to accept for deposit and otherwise negotiate the Checks reflected and submitted in each File (including any Checks payable to payees different from the Customer’s legal name); (iii) any Image Customer transmits to Bank through the Service is a good and accurate image of the original Check that meets the ANSI standards required by Regulation CC, or other applicable standards established by Bank, the Board of Governors of the Federal Reserve System, and any other applicable regulatory agency, clearing house or association; (iv) the control total accompanying each transmission is accurate and equals the sum of the individual Images in the applicable File; (v) none of the items, including Eligible Items, transmitted by Customer to Bank through the Service have been previously submitted or deposited with Bank or any other bank, and no person will subsequently negotiate, transfer, deposit or present any such items or duplicates thereof in any form, including as an ACH transfer or as an image, reproduction, substitute check or remotely-created check; and (vi) Customer will only use the Service from a location in the United States to initiate transactions that comply with Applicable Laws.
(b) Customer agrees that by its use of the Service, Customer is deemed to make to Bank the same representations and warranties and give the same indemnities with respect to the Checks, Images and substitute checks created by Bank as Bank is deemed to make with respect thereto under Applicable Law, the Operating Rules, or otherwise in connection with any systems, associations or clearinghouses involved in the processing thereof. If Bank (including its Service Providers and agents) suffers any Losses arising directly or indirectly from or related to such depository bank indemnity obligation, Customer will indemnify Bank (including its Service Providers and agents) for such Losses.
Section 7. VENDORS.
Customer agrees to notify Bank of each Vendor it intends to use in connection with the Service and provide any other information that Bank at its sole discretion may request about the Vendor. Failure to provide timely notice could result in the rejection of Images or Files by Bank. Bank may at its sole discretion choose not to accept Images or Files from a Vendor identified by Customer. Customer's agreement with the Vendor must include a provision allowing Bank to conduct, upon reasonable notice and during normal business hours, an on-site inspection of the Vendor's premises in order to ensure compliance with the Agreement including these Service Terms. Customer authorizes Bank to communicate with its Vendor in connection with the Service and to treat instructions from the Vendor as if the instructions were directly from Customer, and Bank shall not be liable for acting or refusing to act upon the Vendor’s instructions. Any Software necessary for use of the Service by the Vendor must be maintained by the Vendor, and must meet technical specifications acceptable to Bank, as described herein.
Section 8. AUDIT.
In the event Bank inspects any of the location(s) where Customer or its Vendor uses the Service in connection with an audit of Customer’s compliance with the Agreement, Customer agrees that Bank shall not be liable or responsible to Customer, its Vendor(s) or any other third party for any loss, bodily harm, property damage, claims of the introduction of a virus or other malicious code into Customer Systems, including any which allegedly delay, alter or corrupt Customer’s data, whether related to the transmission of Files or other data to Bank or whether caused by the Software, Bank, Internet service providers, Internet browsers, or other parties providing communication services to or from Bank to Customer.
Section 9. TERMINATION.
Notwithstanding anything contained in the Agreement to the contrary, Bank may suspend or terminate the Service at any time for any reason, including if Bank encounters significant Image quality issues or believes that security has been compromised or other risks are present with respect to Customer’s use of the Service. Bank will make reasonable efforts to provide advance notice and in any event will provide notice if and as required by Applicable Laws.