Check Positive Pay Service
Agreement
The Customer shall electronically transmit to the Bank, by manual entry or by importing into Cash Management, a file (the "Issue File") which accurately identifies the payee name, check number, exact amount, and issue date of the checks issued by the Customer (each such check referred to herein as an "Item") which are to be presented for payment to the Bank. The parties intend that the Issue File transmitted to the Bank constitutes the signature of the Customer for purposes of determining whether a Presented Check is properly payable. "Presented Check" means a check drawn on an account and presented to the Bank for payment. By transmitting the Issue File, the Customer expressly warrants all Presented Checks which match the information in the Issue File are properly payable. The Customer acknowledges the Bank is not responsible for detecting any Customer error contained in any Check Issue File sent by Customer to the Bank.
Note: Customer shall update the Issue File upon issuance of each Item through Cash Management. If the Bank is unable to process/load the Issue File for any reason, the Customer is notified via the file import status function which the Customer must manually access after file upload. The Customer may modify and re-load the Issue file. It is the Customer’s responsibility to confirm, through Cash Management, that an Issue File has been properly uploaded and confirmed.
Payment of Presented Checks and Reporting of Exception Checks
Except as provided in this Check Positive Pay Service Agreement, the Bank shall pay a Presented Check without further examination only if it matches the payee name, check number, exact amount, and issue date of an Item included in the Issue File (“Matched Check”). A Presented Check which does not match the payee name, check number, exact amount, or issue date of the Item provided in the Issue File will be identified by the Bank as an “Exception Item” subject to further review.
Prior to Customer presentment, Exception Items will be reviewed by the Bank for evidence of MICR encoding errors or misreads. If the Bank determines there has been a MICR encoding error or misread with a Presented Check, the Bank shall correct the error. Following correction, the Exception Item shall be compared to the Item in the Issue File provided by the Customer to determine the validity of the Item.
Each Presented Check which Bank pays in accordance with this Check Positive Pay Service Agreement will be deemed to be properly payable by Customer and any other signatories on the account regardless of the actual signature on such Presented Check. Each Matched Check or other check Customer authorized Bank to pay will be paid without Bank performing any customary (or any other) check verification procedures, and Bank will have no liability whatsoever for paying the Presented Check if its serial number or amount is altered, if it is counterfeit, bears a forged or unauthorized signature or was otherwise not validly issued.
The Customer will be notified of all Exception Items through Cash Management. Each list of Exception Items will list Presented Checks for which: (a) the payee name of the presented check does not match the payee name on the Issued Check File; (b) the Check number on the MICR encoding of the Presented Check does not match the number on the Issued Check File; (c) the Check number on the Presented Check is a duplicate of a Check number on a previously Presented Check; (d) the dollar amount on the encoding of the Presented Check does not match the dollar amount on the Issued Check File; or (e) the Presented Check was previously paid. The Customer agrees and acknowledges the Bank will not review or attempt to match the payee on the check even if the Customer has provided the Bank with the payee information. The Customer has total responsibility for matching the payee on the check as provided by the Customer in the Issue File. Customer shall review the Exception Items and electronically communicate pay or return requests for all exceptions by 3:00 p.m. E.T. Instructions will be given by Customer through Cash Management.
The Bank’s liability to the Customer for any Presented Check erroneously paid by the Bank in breach of this Check Positive Pay Service Agreement (the “Bank’s Wrongful Honor”) shall be limited to the lesser of the amount of the wrongfully paid Presented Check or the Customer’s actual damages resulting from the Bank’s payment of the Presented Check. The Bank shall have no liability for any consequential, resulting, or indirect damages resulting from the Bank’s Wrongful Honor. The Bank retains the right to assert the defense that the Customer has sustained no actual damages because the Bank’s Wrongful Honor discharged for value an indebtedness of the Customer. The Bank also retains the right to assert the Customer’s failure to exercise reasonable promptness or ordinary care under the Uniform Commercial Code (“UCC”) or as set forth in any other agreement between the Customer and the Bank which governs the accounts. Nothing herein shall constitute a waiver or limitation of the rights of the Bank under the UCC.
The Bank’s liability for wrongful dishonor of a Presented Check shall be limited to the damages for wrongful dishonor recoverable under UCC Articles 3 and 4; provided, however, the Bank shall have no liability to the Customer for wrongful dishonor when the Bank, acting in good faith, returns a Presented Check: (i) that it reasonably believed was not properly payable under UCC Section 4-401; (ii) if there are insufficient funds on deposit in the account, (iii) if the Issue File is not transmitted timely or does not contain information sufficient to determine a match, (iv) if required to do so by the service of legal process on the Bank or the instructions of regulatory or government authorities or courts or otherwise by law, or (v) for any other reason available at law or as provided in the account agreements between Bank and Customer. The Customer agrees the Bank exercises ordinary care whenever it pays or returns a Presented Check consistent with the provisions of this Check Positive Pay Service Agreement or the instructions from the Customer contained in an Issue File.
The Bank shall not pay any Presented Check for which the Bank has received from the Customer a “stop payment” order requested consistent with the agreements between the parties governing the accounts.
If a Presented Check is personally presented by an individual over the counter to the Bank during such time the Bank is experiencing an interruption or failure of communications or data processing facilities or systems, emergency conditions, or any other difficulties beyond the control of the Bank, then, notwithstanding any other provision of this Check Positive Pay Service Agreement, Customer authorizes the Bank to pay the Presented Check, even if the Presented Check is an Exception Item (defined below). Additionally, the Bank shall have no obligation to notify the Customer of any such Presented Check.
The Customer agrees and understands the Services apply only to magnetic ink character recognition (“MICR”) encoded paper checks and documents. Therefore, the Services and this Check Positive Pay Service Agreement shall not apply to any electronic funds transfer (“EFT”), Automated Clearing House (“ACH”) transaction, or check which has been converted to an ACH transaction which does not contain a serial number. Accordingly, this Check Positive Pay Service Agreement shall have no effect with respect to any such transactions on the Bank’s or Customer’s respective rights, obligations, duties, or responsibilities under any other agreement between the parties or applicable law or regulation.
The Bank’s substantial compliance with the terms and conditions applicable to the Services will constitute acting in “good faith” and “exercising ordinary care”.
Customer’s Obligations
The Customer shall update the Issue File at any time a new Item is issued which will be the subject of an Issue File. In no event will the Bank be responsible for the contents of an Issue File if the Customer did not upload the Issue File to the Bank by 5:30 p.m. ET on the Business Day prior to the expected date of presentment of Items shown on the Issue File. If not updated and uploaded by this cut-off time, the Bank will have no liability for its refusal to pay a presented Item.
The Bank will notify the Customer of exception items by listing each Item (the “Exception Items”) on Cash Management no later than 7:00 a.m. ET of each Business Day. Upon notification, the Customer shall review the Exception Items and either confirm the validity by submitting a “Pay Request” of the Exception Item (in which case the Bank will pay the Exception Item, provided the Customer responds within the time specified below), or will instruct the Bank to dishonor the Exception Item by submitting a “Return Request”. The Customer agrees any User designated by an Administrative User or a Primary Administrator will respond to the Bank concerning each Exception Item via Cash Management, or if the electronic service is unavailable, then response to the Bank shall be by facsimile transmission signed by the User or by email from a valid email address contained within Cash Management, by 3:00 p.m. Eastern Time on the same Bank Business Day the Bank notifies Customer of the Exception Item. If the Bank does not receive the Customer's response by 3:00 p.m. Eastern Time on the same Bank Business Day that The Bank provides Customer notification of the Exception Item, the Customer authorizes and directs the Bank to dishonor the Exception Item. The Customer agrees that for each Exception Item which Customer has instructed the Bank to pay, or which the Bank has paid in accordance with this Check Positive Pay Service Agreement, the Bank will add such check to the Issue File as an Item.
Notwithstanding the aforementioned provisions, and except as provided in this Check Positive Pay Service Agreement, the Bank will return (without providing Customer notification prior to such return) each Exception Item which is personally presented by an individual over the counter to the Bank for payment.
The Service and this Check Positive Pay Service Agreement shall not apply to any Presented Check which is personally presented by an individual to The Bank during such time the Bank is experiencing an interruption or failure of communications or data processing facilities or systems, emergency conditions, or any other difficulties beyond the control of the Bank affecting the Services. Accordingly, this Check Positive Pay Service Agreement shall have no effect with respect to any such transactions on the Bank's or the Customer's respective rights, obligations, duties, or responsibilities under any other agreement between the parties or applicable law or regulation.
Stop Payment and Return Decisions
The Service will not be used as a substitute for the Bank's stop payment service. The Customer will follow the Bank's standard stop payment procedures if it desires to return a Matching Check or other check which was validly issued. Nothing in this Check Positive Pay Service Agreement will limit the Customer's right to stop payment on any Matching Check or other check or the Bank's right to return any Matching Check or other check the Customer has authorized the Bank to pay in accordance with this Check Positive Pay Service Agreement if the Bank determines in its sole discretion the check is not properly payable for any reason (without the Bank's agreeing to, or being required to, make such determination in any circumstance) or there are insufficient collected and available funds in the account to pay it.
Obligation to Review Account Records
Nothing contained in this Agreement shall discharge Customer’s obligation to timely review and notify Bank of any unauthorized transactions. Customer shall promptly review all account statements when such statements are provided to Customer or otherwise made available. Customer acknowledges that Bank’s liability, if any, for unauthorized transactions shall not be affected by use of this Service.
Limits on Liability
Bank is not responsible for detecting any Customer error contained in any Issued Check, Pay Request, Return Request sent by Customer to Bank.
Except as otherwise stated in this Agreement, Bank will be liable to Customer only for damages directly from Bank’s intentional misconduct or gross negligence in the performance of the Positive Pay Services. Bank will not be responsible for any loss, delay, cost, or liability, which arises, directly and indirectly, in whole or in part, from: (i) Customer’s actions or omissions or those of third parties who are not within the Bank’s immediate and reasonable control; (ii) Customer’s negligence of breach of any agreement with Bank; (iii) any ambiguity, inaccuracy, or omission in any information of instructions provided to Bank; (iv) any error, failure, or delay in the transmission of delivery of data, records due to a breakdown in equipment, computer, or communications facility; (v) accidents, strikes, labor disputes, civil unrest, fire, flood, water damages (e.g. form fire suppression systems), or acts of God; (vi) causes beyond Bank’s reasonable control; (vii) Bank’s inability to confirm to Bank’s satisfaction the authority of any person to act on Customer’s behalf; or (viii) Customer’s failure to provide Bank with the complete and correct data in accordance with this Check Positive Pay Service Agreement and Bank’s Positive Pay Service instructions.
Except for losses caused solely by (but not Bank’s third-party processing agent) the gross negligence or willful misconduct, or aggregate liability to Customer for all claims arising under or related to this Agreement or related to the Positive Pay Services, whether for breach, negligence, infringement, in contract, tort, under statute, or otherwise, shall be limited to an amount equal to the total fees paid by Customer for the Positive Pay Service under the prior six (6) month period. Bank will not be responsible under the circumstances for special, indirect, incidental, punitive, exemplary, or consequential damages which Customer incurs because of Bank’s agents’ actions or omissions, including without limitation, any loss of use or lost business, revenue, profits, opportunity, or good will, even if the Bank is aware of the possibility for such damage.
Customer agrees to cooperate with the Bank in any loss recovery efforts the Bank undertakes to reduce any loss or liability that arises in connection with the Positive Pay Service. Customer acknowledges that Customer’s fees have been established in contemplation of: (i) these limitations on the Bank’s liability; (ii) Customer agrees to review all statements, confirmations, and notifications promptly and notify the Bank immediately of any discrepancies or problems; and (iii) Customer’s agreement to assist the Bank in any loss recovery effect.
DISCLAIMER OF WARRANTY OF LIMITATION OF LIABILITY
BANK MAKES NO WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, IN CONNECTION WITH POSITIVE PAY SERVICE PROVIDED TO CUSTOMER UNDER THIS AGREEMENT. BANK DOES NOT AND CANNOT WARRANT THAT THE POSITIVE PAY SERVICES WILL OPERATE WITHOUT ANY ERRORS, OR THAT ALL POSITIVE PAY SERVICES WILL BE AVAILABLE AND OPERATIONAL AT ALL TIMES. EXCEPT AS SPECIFICALLY PROVIDED TO CUSTOMER IN THIS AGREEMENT, OR OTHERWISE REQUIRED BY LAW, CUSTOMER AGREES THAT BANK’S OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, OR CONTRACTORS ARE NOT LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES UNDER OR BY REASON OF ANY POSITIVE PAY SERVICES PROVIDED UNDER THIS AGREEMENT INCLUDING LOSS OF PROFITS, REVENUE, DATA, OR USE BY CUSTOMER OR ANY THIRD PARTY, WHETHER IN AN ACTION IN CONTRACT OR IN TORT OR BASED ON A WARRANTY. FURTHER, IN NO EVENT SHALL THE LIABILITY OF BANK AND ITS AFFILIATES EXCEED THE AMOUNTS PAID BY CUSTOMER FOR THE SERVICES PROVIDED TO CUSTOMER THROUGH CASH MANAGEMENT. THE PARTIES INTEND THAT AN ISSUED CHECK FILE, WHEN PROVIDED TO BANK, SHALL CONSTITUTE CUSTOMER’S SIGNATURE FOR PURPOSES OF DETERMINING WHETHER A PRESENTED CHECK IS PROPERLY PAYABLE. BY PROVIDING THE ISSUED CHECK FILE TO BANK, CUSTOMER WARRANTS THAT ALL CHECKS THAT MATCH THE INFORMATION IN THE ISSUED FILE ARE PROPERLY PAYABLE.
Termination
Bank may terminate Customer’s use of this Positive Pay Service at any time, with or without cause. Bank may terminate or suspend the Positive Pay Service without prior notice to Customer if: (a) Customer breaches any agreement with the Bank (including but without limitation, any agreements relating to Customer’s account(s) with Bank) or if Bank discovers any willful misconduct by the Customer; or (b) Bank believes there has been a breach in the security of the Positive Pay Service or authorization completeness, or accuracy of the information sent to Bank. Any termination will not affect obligations arising prior to termination, such as the obligation to indemnify Bank. Notwithstanding any termination, this Agreement shall remain in full force and effect as to all Presented Checks that have been presented to Bank prior to the date of termination. Upon termination, if requested by Customer, Bank will provide Customer (or its representative) with an outstanding check report. All provisions of this Agreement that are intended by their terms to survive termination of the Agreement will survive such termination.
Customer and Bank Communications
Customer or Bank, at its discretion, may each submit to the other party a revision to any communication provided for under this Agreement. The revised communication must: (a) be sent in its entirety and not in the form of a partial amendment to the communication originally sent; (b) identify the original communication; and (c) be sent in the format and medium, by the deadline(s) and place(s) established by the receiving party. A properly submitted revised communication serves to revoke the original communication.
Indemnification
Customer will indemnify, defend, and hold Bank harmless against any and all actions, proceedings, liabilities, losses, investigative costs, costs (including attorneys’ fees), and claims, including without limitation, warranty or statutory claims, that result or arising in connection with: (a) Bank’s processing of checks in accordance with this Service Agreement or Bank’s compliance with Customer’s instructions; (b) Customer’s actions or omissions, including Customer’s negligence, willful misconduct, or breach of any warranty or failure to comply with this Agreement; (c) any misuse of the Positive Pay Services by Customer or Customer’s employees or actions; (d) Customer’s failure to comply with applicable state and federal laws and regulations; and (e) actions by third parties, such as an introduction of a virus, that delay, alter, or corrupt the transmission of information to Bank.
Notices
Customer agrees to notify Bank if Customer discovers: (a) any error or discrepancy between Customer’s records and the information Bank provides to Customer about Customer’s account(s) or transactions (e.g., in a statement, confirmation, or electronic report); (b) unauthorized transactions involving Customer’s account; (c) a breach in the confidentiality of the password or other Security Procedures used to provide instructions pursuant to this Agreement or in the Appendix; or (iv) other problems related to the Positive Pay Services. Nothing herein discharges or modifies Customer’s obligations under other agreements with the Bank to timely review and report any errors in Customer’s account statements.
Customer agrees that it will receive any notices from Bank relating to the Positive Pay Services electronically through Cash Management. Any such notice transmitted shall be treated as received twenty-four (24) hours after transmitted to Customer through Cash Management.
Unless otherwise agreed, notices required by this Check Positive Pay Service Agreement must be made in accordance with this Agreement and the Other Agreements. The Bank will provide notices to Customer as set forth in this Agreement and the Other Agreements.
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