Remote Deposit Capture Solutions- Services Adendum

The Remote Deposit Capture Solutions – Services Addendum (this “RDC Addendum”) governs Customer’s use of the Remote Deposit Capture Solutions Services provided by Bank. Customer and Bank have previously entered into the Master Treasury Services Agreement. Customer has executed the Implementation Form and wishes to use the Remote Deposit Capture Solutions Services pursuant to the terms of this RDC Addendum. Unless otherwise defined herein, all capitalized terms shall have the meanings set forth in the Master Treasury Management Services Agreement.

1. Service.

Bank agrees to supply the remote deposit service (“Service”) and Bank Equipment/Software (“Equipment”) to the Customer, and both parties agree to abide by the provisions set forth in this RDC Addendum.

2. Term and Termination.

The term of this Service shall commence on the Effective Date and shall continue thereafter until terminated by either party upon 30 days advance written notice to the other party, unless otherwise terminated as provided herein. Bank may terminate this Service upon ten (10) days written notice for Customer’s failure to pay Bank any amount due to Bank under this RDC Addendum, if such breach is not cured within such ten (10) day period. Bank may terminate this Service immediately by giving written notice if Bank discovers any willful misconduct (including bad checks or fraudulent activities) on the part of Customer or any other party with respect to checks or electronic items processed by Customer. Any termination will not affect obligations occurring prior to termination, such as the obligation to process any checks and electronic items, including returned electronic items that were in the process of being transmitted or collected prior to the termination date.

Within thirty (30) days after termination of this Service, each party will return or destroy all copies of the Confidential Information of the other party, and Customer will remove all copies of the Software from designated PC and destroy all Documentation in its possession or under its control. Upon request, each party shall certify in writing that it has returned or destroyed all such copies. Upon termination of this Service, Customer will keep its Account at Bank open until the later of (i) sixty (60) days after the date of termination, or (ii) final payment with respect to all processing fees, and will keep in such Account an amount sufficient to cover any remaining outstanding checks. If any such outstanding checks or returned items exceed the amount in the Account, Customer will pay such excess to Bank upon demand. Customer will also continue to retain checks and forward checks to Bank as provided in this RDC Addendum.

3. Bank’s Responsibilities

(a) Bank will deliver to Customer, or otherwise provide access to, the Equipment.
(b) Bank will provide installation and training support as reasonably required for Customer’s implementation of this Service.
(c) Bank will provide support for the process as reasonably necessary to permit Customer’s processing of checks through this Service. Such support shall include (i) corrections and work around, (ii) such modifications, enhancements and updates as Bank elects to make generally available to its Customers without additional license fees, and (iii) telephone support to Customer during Banks’ regular business hours. The fee for Equipment maintenance is set forth on the Treasury Management Fee Schedule.
(d) Bank will accept for deposit to the designated Customer account (“Account”) digitized images of checks that are transmitted to Bank in compliance with this RDC Addendum. Checks payable from a foreign financial institution are ineligible for this Service. Digitized images shall be deemed received upon successful receipt of the transmission of such images that are complete, usable, and adhere to the data specifications set forth in the documentation. If the digitized images are not complete, are not usable, or do not adhere to such data specifications, the images may not be processed by Bank or its agents, in which event Customer’s deposit will be adjusted and notification will be provided.
(e) Bank will provide Customer an electronic notification of Customer’s transmission of digitized images as outlined in the Documentation.
(f) Customer’s digitized images will be processed after Bank has received Customer’s transmission of the digitized images. Bank will use commercially reasonable efforts to present items for collection. Unless Bank notifies Customer otherwise, all items received before the cut-off time as specified by Bank will be processed and deemed deposited on the day they are received and shall be afforded credit in accordance with the then-current funds availability schedules.
(g) If a payor financial institution returns an item to Bank unpaid, Bank will charge the Account for such returned item, and may either (i) return the item to Customer, or (ii) re-present it to the payor financial institution before returning it to the Customer. Items may be returned as Image Exchange Items, rather than image replacement documents (IRDs), as agreed by the parties. If a payor financial institution or other third party makes a claim against Bank or seeks a re-credit with respect to any electronic item, Bank may provisionally freeze or hold aside a like amount in the Account pending investigation and resolution of the claim.
(h) Bank may immediately suspend the Customer Services or the processing of any electronic item if Bank has reason to believe that there has been a breach in the Security Procedures, fraud involving Customer’s Account, or any uncertainty as to the authorization or accuracy of electronic items. Bank reserves the right at any time to process electronic items on a collection basis.

4. Customer’s Responsibilities.

(a) Customer will maintain an Account at Bank for the receipt of deposits of digitized images of checks, in accordance with applicable Account Agreement.
(b) Customer will install the Software in accordance with the Documentation, and will implement any changes and upgrades to the Software as Bank may require, within thirty (30) days of receipt of such change or upgrade, or within such shorter time frame as Bank may reasonably require in the event such change or upgrade is necessary to comply with statutory or regulatory changes or developments, or to protect the integrity and security of this Service.
(c) Customer may use only Bank-approved Equipment in connection with this Service. Customer, and not Bank, shall be responsible for maintaining all Equipment. Customer will be responsible for maintaining any interface software used in connection with the Equipment. Equipment maintenance is provided through Bank’s process.
(d) Customer will use the Software, including the entering, processing and transmittal of items, in accordance with the Documentation. With limiting the foregoing, Customer will comply with all security procedures described in the Documentation, and will not bypass, override or disable any security mechanisms in the Software.
(e) Customer will inspect and verify the quality of images daily, and ensure the Equipment is clean and operating properly and that check images when scanned are legible for all posting and clearing purposes.
(f) Customer will be responsible for training its employees in the use of this Service and the Equipment.
(g) Customer will (i) disclose to each drawer that (A) the drawer’s check will be converted into a digitized image which will be used for deposit processing by Bank using this Service, and may be presented for payment as an Image Exchange Item, IRD or other electronic item to the payor financial institution, and (B) the check drawer will not receive back the original paper version of the check; and (ii) obtain the check drawer’s agreement thereto. Customer will also provide each check drawer an alternative payment method if the check drawer will not authorize its check to be converted to a digital image for processing through this Service.
(h) Customer will ensure that neither the check, nor any electronic item or other digitized image of the check, will be presented for payment such that an endorser, depositary bank, payor financial institution, or the check drawer will be asked to make a payment twice with respect to the check, including without limitation by placing such restrictive endorsement on checks, or voiding checks, as Bank may reasonably require.
(i) Customer will retain each check for a reasonable period of time, but in no event fewer than fourteen (14) days after such check has been digitized and processed. Customer will promptly provide any retained check (or, if the check is no longer in existence, a sufficient copy of the front and back of the check) to Bank as requested to aid in the clearing and collection process or to resolve claims by third parties with respect to any check. Customer will use a commercially reasonable method approved by Bank to destroy checks after the Customer’s retention period has expired.
In the event of lost, mistaken, incomplete or unusable electronic images, or in the event of claims of fraud, alteration, counterfeit or otherwise, Customer shall cooperate fully with Bank in providing information, including access to such records.

(j) Bank requires the following Security Procedures for this Service:

  • Never leave checks that have been remotely deposited unattended.
  • Track the destruction of checks so that Customer can identify which checks (at least by date deposited) were destroyed on which date.
  • Destroy checks by micro-cut shredding. Never place un-shredded checks in secure destruction containers to be taken away for offsite shredding.
  • Checks should be stored in a locked device, such as a lockable file, safe, etc. (preferably under dual control, so that two persons are required for access).
  • Physical access to Equipment must be restricted to authorized personnel.
  • User Credentials are confidential and should not be disclosed to anyone.

5. Fees.

Customer will pay Bank service fees as set forth in Treasury Management Fee Schedule. Bank reserves the right to change fees from time to time upon thirty (30) days prior written notice. Customer shall be responsible for and pay all sales and other taxes applicable to this RDC Addendum and imposed by any governmental authority, including without limitation any sales, use, and other taxes associated with this Service or Equipment, except income taxes of Bank, including all applicable excise, property, value-added, sales or use, or similar taxes, any withholding taxes, national pension or other welfare taxes, customs, import, export, or other duties, levies, tariffs, taxes, or other similar charges. Bank may charge to the Account all fees and taxes imposed on Bank that are the responsibility of Customer.

6. Other Costs.

Customer will be responsible for all telecommunications-related costs as well as the costs of any equipment or supplies necessary to access the Service. Bank will not be obligated to supply any special equipment (e.g., electrical outlets, telephone outlets, surge protectors, extension cords) necessary to operate any service.

7. Payment.

Fees owed to Bank are automatically deducted from the Account or assessed via account analysis. If not paid within thirty (30) days from date of invoice, Bank may, in its sole discretion, immediately terminate this RDC Addendum and Customer’s access to the service without prior notice. Regardless of whether Bank exercises this termination right, Bank may assess and Customer agrees to pay a finance charge equal to 1.5% per month (18%) per year on all outstanding balances thirty-one (31) days past due. Customer shall be responsible to Bank for all costs incurred by Bank to collect any outstanding balances due Bank, including but not limited to, reasonable attorney’s fees and court costs. The charges applicable to the Service do not include sales, use, excise, or similar taxes. Consequently, in addition to the specified charges, Customer is solely responsible for and agrees to pay amounts equal to any such taxes resulting from this RDC Addendum or any activities hereunder. In the event any dispute arises involving any of the items contained in Bank’s invoice, Customer agrees to promptly notify Bank of said dispute but will not withhold payment. Bank shall investigate such disputed items within fifteen (15) days and promptly notify Customer of the findings of its investigation.

8. Ownership.

Under all circumstances, Customer shall retain ownership of the Equipment used for the Service. Upon termination of this RDC Addendum by either party for any reason, the Equipment shall remain in the possession of the Customer as established by Bank.

9. Deposited Items.

All checks deposited through the remote deposit service will be deposited under the provisions of the current Understanding Your Business Deposit Account, which includes the Terms and Conditions of Your Account and Your Ability to Withdraw Funds. In addition, Customer agrees to follow Automated Clearing House Rules and Regulations and the provisions of The Check Clearing for the 21st Century Act for all checks deposited where applicable. Customer agrees that all checks will not be deposited through the remote deposit service more than once and the original checks will be securely stored then destroyed within forty-five (45) days from the date of deposit unless otherwise agreed to in writing. Customer also agrees to review and validate the accuracy of the check data captured including the amount of the check and the legibility of the check image through the remote deposit service. Customer agrees to only deposit checks drawn on United States financial institutions through the remote deposit service.

10. Warranty.

Bank warrants that, upon delivery, the Equipment provided will conform to Bank’s then current applicable standard. Bank at its own expense, will repair or replace any nonconforming Equipment during the initial ninety (90) days of this RDC Addendum, provided that: (1) the deficiency is attributable solely to Bank and (2) Customer notifies Bank of the alleged deficiency within fifteen (15) days of its occurrence. Bank will not be responsible in any manner for any deficiency caused in whole or in part by inaccurate or otherwise deficient data programs, equipment or communication facilities provided by Customer or third parties other than Bank. Customer shall bear the entire risk of loss, theft, damage or destruction of Equipment from the date of installation until return shipment FOB to Bank. Such loss, theft, damage or destruction of equipment shall not relieve Customer of the obligation to make payments or to comply with any other obligation under This RDC Addendum.
THE FOLLOWING WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

11. Confidentiality.

Customer, its employees, vendors and Customers each recognize, acknowledge, and hereby agree that all information or data provided through the Service will be treated as confidential and proprietary and shall not be used or disclosed, in whole or in part, to any person, firm, corporation, association, or other entity, except as provided for in this RDC Addendum or as required by applicable law.

12. Third Party Services.

Customer acknowledges that, in providing the Service hereunder, Bank may utilize and rely upon certain third-party service providers (“TPSPs”) to provide database storage, database access, switching and other data communications services to Bank. The Customer further acknowledges and agrees that the Customer’s rights under This RDC Addendum shall be solely and exclusively against Bank, and the Customer shall have no right or recourse against any TPSP hereunder whatsoever, and hereby waves any and all such rights of recourse, directly or indirectly, against any TPSP, the state of Maryland and the Federal Deposit Insurance Corporation.
In no event will Bank be liable for any damages caused by the Customer’s failure to perform Customer’s responsibilities, or for any indirect or consequential damages, including, but not limited to, loss of profits or anticipated savings, or for any claim made against Customer by an employer, employee, agent, or any other party.

13. Bank Liability.

Bank will not be liable to Customer for any of the following, unless liability or loss is a result of Bank’ breach of this RDC Addendum or the gross negligence or willful misconduct of Bank or its employees or agents: (i) any damages, costs or other consequences caused by or related to Bank’ actions that are based on information or instructions that Customer provides to Bank; (ii) any unauthorized actions initiated or caused by Customer or its employees or agents; (iii) the failure of third persons or vendors to perform satisfactorily, other than persons to whom Bank has delegated the performance of specific obligations provided in this RDC Addendum; (iv) any refusal of a payor financial institution to pay an electronic item for any reason (other than the breach of contract, negligence or willful misconduct of Bank), including without limitation, that the check or electronic item was allegedly unauthorized, was a counterfeit, had been altered, or had a forged signature; (v) any other party’s lack of access to the Internet or inability to transmit or receive data; (vi) failures or errors on the part of Internet service providers, telecommunications providers or any other party’s own internal systems, or (vii) any stolen and / or compromised private or confidential information; (viii) any of the matters described in Section 9 above
Bank’s liability for errors or omissions with respect to the data transmitted or printed by Bank will be limited to correcting the errors or omissions. Correction will be limited to reprinting and/or representing electronic items to the payor financial institution.
Notwithstanding anything to the contrary in this RDC Addendum, Bank’ aggregate liability to Customer for claims relating to this RDC Addendum, whether for breach, negligence, infringement, in tort or otherwise, for any twelve month period shall be limited to an amount equal to the total fees paid by Customer to Bank for such twelve month period. In no event will Bank be liable for any consequential, indirect, incidental, special or punitive damages, or any lost profits or loss of any opportunity or good will, even if Bank has been advised of the possibility of such damages. Customer acknowledges and agrees that Bank would not enter into this RDC Addendum without the limitations of liability set forth in this section.

14. Exclusion of Warranties.

Bank’s representations, warranties, obligations and liabilities, and Customer’s rights and remedies, set forth in this RDC Addendum are exclusive. Customer waives and releases, and Bank disclaims, any other representations, warranties, obligations, and liabilities, express or implied, arising by law or otherwise, with respect to any and all matters arising under or in connection with this RDC Addendum, including without limitation: (i) any implied warranty of merchantability, fitness for a specific purpose or other implied contractual warranty; and (ii) any implied warranty arising from course of performance, course of dealing, or usage of trade and any other warranty with respect to quality, accuracy or freedom from error. Without limiting the generality of the foregoing, Bank does not warrant that operation of the software will be error-free or uninterrupted.

15. General.

This RDC Addendum is not assignable or transferable by either party without the other party’s written consent.
Customer agrees to use the Equipment in a manner consistent with the terms of this RDC Addendum. Customers are prohibited from using any Equipment
Failure to comply with the terms of this RDC Addendum will constitute grounds for termination of this RDC Addendum and immediate repossession of all Equipment.
All Sections of this RDC Addendum which are intended by their terms to survive termination of this Service will survive any termination of this RDC Addendum.
This RDC Addendum represents the complete and exclusive agreement between the parties with regard to the subject matter hereof and supersedes all prior oral and written communications between the parties. No provision of this RDC Addendum shall be modified unless in writing and signed by an authorized representative of Bank and Customer.
If any provision of this RDC Addendum is held to be unenforceable by a court of competent jurisdiction, the remaining provisions shall continue to be of full force and effect.

16. Acknowledgement.

As a requirement to be considered for approval, Customer must abide by all applicable laws, rules, regulations, operating circulars regarding Remote Deposit Capture. The Bank has permission to investigate the character and credit worthiness of the Customer, and the nature and operation of the Customer, to the same extent as if borrowing an amount equal to the amount of all RDC entries to me made during the month.