MBSA Schedule F – Check Services Terms

CHECK SERVICES

If approved by Bank in connection with a Program, Bank will provide (or Bank’s third-party service provider will provide) Check Services in accordance with the terms set forth in this Schedule F (Check Services) and subject to the terms of this Agreement. Bank will make available to Program Manager, from time to time, its policies, procedures, guidelines and other writings governing the use of the Check Services by Program Manager, as may be amended or supplemented by Bank from time to time (the “Check Services Guide”). Program Manager shall comply with all of its obligations under this Agreement in compliance with terms and conditions set forth in this Schedule F (Check Services), the Check Services Guide and this Agreement. If there is any conflict between the Check Services Guide and this Agreement, the Check Services Guide will control. Program Manager shall ensure all terms herein related or applicable to or otherwise referencing Program Manager (or its Subcontractor) that may be applicable to End User are included in the Bank Services Agreement.

Stop Payment Orders. Program Manager or any End User for whom a Check is issued on behalf may request Bank to stop payment on a Check drawn in connection with such End User’s funds by providing Bank with all information Bank may request. Program Manager understands that unless Bank has received complete and accurate information requested from Program Manager, Bank may be unable to identify the Check for which a stop payment has been requested which will result in the Check being paid. Bank also requires a reasonable amount of time to act on the request. If two or more signatures are required to transact business, Bank may accept any one authorized signature for a stop payment order. Under certain circumstances, current transaction information may not be available, and the Check upon which a stop payment has been requested may already have been paid. If the Check upon which Program Manager or End User has stopped payment has already been paid, Bank will refund the stop payment fee at Program Manager’s request if any fee is charged and collected by Bank. Written stop payment orders expire after six (6) months. Unless stop payment orders are returned in writing, Bank assumes no responsibility if the Check is paid after the expiration of the stop payment order. Program Manager will be charged a fee for initial and returned stop payment orders.

Automated Processing. In accordance with general banking standards, Bank has adopted automated collection and payment systems which rely on information encoded onto each paper Check in magnetic ink. Program Manager agrees (and shall ensure End User agrees) that Bank may disregard all information on any Check (front and back) other than maker’s signature, the amount of the Check, and the information encoded in magnetic ink. Program Manager further agrees (and shall ensure End User agrees) that Bank shall not be deemed to have failed to exercise ordinary care in paying a Check solely because Bank’s procedures do not require Bank to perform a sight examination of Checks with a face amount below a threshold level established by Bank from time to time.

Postdated Checks. If Program Manager or End User draws a post-dated Check, Bank may pay it and charge it against the Deposit of End User or Program Manager, even if it is presented prior to the date of the Check.

Stale Checks. Bank is not obligated to pay a Check presented for payment more than six (6) months after its date (a “Stale Check”). Notwithstanding the foregoing, Program Manager agrees to hold Bank harmless if Bank pays a Stale Check. If Program Manager or End User does not want Bank to pay a Stale Check, Program Manager (or End User through Bank) may place a stop-payment order on the Check.

Restrictive Legends. Bank is not required to honor any restrictive legend placed on Checks Program Manager draws. Examples of restrictive legends placed on Checks are “must be presented within 90 days” or “not valid for more than $1000.00”. Bank is not responsible for any losses, claims, damages, or expenses that result from Program Manager’s or End User’s placement of these or other special instructions on Checks.

Signature on Check. Bank authorizes Program Manager in its capacity as agent of the Bank to place a signature of the Bank on any Check against the Deposits of an End User in connection with the Check Services; provided, however, that Program Manager may only place the signature of the Bank on a Check if (i) Program Manager is in compliance with all terms of this Agreement, (ii) the End User for which any such Check is issued on behalf of has remitted funds to the Bank, (iii) the Check is for an amount no greater than the amount of funds deposited by the End User with Bank, (iv) End User has lawfully authorized the Check; and (v) the issuance of the Check would not result in the Bank extending credit or creating a negative balance. Subject to the terms herein, the signature affixed to any such Check by Program Manager shall be considered affixed and made by Bank.

Checks Presented Over the Counter for Payment by a Non-End User. To the extent permitted by Applicable Law, if a Check is presented over the counter for payment by a Person who is not an End User of the Bank, then Bank may, in its sole discretion, refuse payment of the Check or charge a fee for payment of the Check. Program Manager shall indemnify Bank for any presentment, honoring or refusal to honor such Check.

Adverse Claims. If Bank receives conflicting instructions with respect to a Deposit or Check, or notice of an adverse claim of ownership, right to control, or access to funds deposited with Bank, or notice that the funds of End User may have been obtained through fraudulent or criminal acts, Program Manager and End User agrees that if any such dispute exists, Bank may place a hold on the funds deposited and refuse to honor all withdrawal and transfer requests, including Checks, until all appropriate parties provide Bank with joint specific written instructions with respect to disposition of the funds. Bank is not required to determine whether a dispute has merit. If Bank elects to take any action(s) described herein, Program Manager agrees that Bank shall not be liable to Program Manager or End User for damages of any kind, and Program Manager agrees to pay and reimburse Bank for its reasonable costs and expenses including attorneys’ fees (including Bank’s in-house attorneys) and court costs.

Uncollected Funds and Returning Checks for Insufficient Funds. Bank reserves the right to return and/or refuse to pay any Check or instruction which is presented for payment against uncollected/held funds. Bank may assess a fee against Program Manager for any Check drawing against uncollected funds, whether the Check is paid or returned unpaid, in accordance with Bank’s current schedule of fees and charges. Program Manager shall not issue instructions to have a debit processed against or a Check drawn in connection with an End User’s instructions if such End User has not remitted to Bank an amount equal to the debit or Check requested and Program Manager shall not issue instructions to have a debit processed against or a Check drawn in connection with an End User’s instructions for any amount that exceeds the available Deposits of End User with Bank under the Program. At any time before final payment (as defined in the Uniform Commercial Code) Bank may return any Check, negotiable order of withdrawal, electronic debit, or other item presented for payment against the FBO Account or Deposit Account when there are insufficient available funds on deposit with Bank from End User to pay the Check or if for some other reason the Check is not good or payable.