MBSA Schedule J – Remote Deposit Capture Services Terms

REMOTE DEPOSIT CAPTURE SERVICES

If approved by Bank in connection with a Program, Bank will provide Remote Deposit Capture Services in accordance with the terms set forth in this Schedule J (Remote Deposit Capture 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 Remote Deposit Capture Services by Program Manager, as may be amended or supplemented by Bank from time to time (the “Remote Deposit Capture User Guide”). Program Manager shall comply with all of its obligations under this Agreement in compliance with terms and conditions set forth in this Schedule J (Remote Deposit Capture Services Services), the Remote Deposit Capture User Guide and this Agreement. If there is any conflict between the Remote Deposit User Guide and this Agreement, the Remote Deposit User 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.

General Description of RDC Services. Subject to the terms, provisions and conditions of this Agreement and this Schedule J (Remote Deposit Capture Services), Bank shall provide RDC Services to Bank approved End User in connection with the approved Program, and Program Manager may market such RDC Services to Persons in accordance with the terms of this Agreement and the applicable Program Schedule provided for in Schedule B (Program Schedules) to this Agreement. Pursuant to the RDC Services, an End User may make deposits to such End User’s Deposit Account or to the FBO Account, as applicable, from a home, office or other remote location using a compatible mobile device (camera), computer hardware (scanner), software or web-based application (individually and collectively, the “Device”). Bank is not responsible for providing the Device, and Program Manager shall ensure that any computer hardware (scanner), software or web-based application or other Intellectual Property used in connection with the RDC Services do not infringe on the Intellectual Property of any Person. End Users may use the RDC Services to prepare an accurate electronic picture or replica of the front and back of an Eligible Item (the “Image”) and deliver the Image and associated deposit information to Bank. “Eligible Items” are Checks or other paper items (not a Prohibited Item under this Schedule J (Remote Deposit Capture Services) or item rejected by Bank), payable on demand and drawn on (or payable through) an office of a United States bank, to be converted to Images and deposited into a Deposit Account or FBO Account using the RDC Services. The Image must accurately capture the front and back of the Check to be deposited. After capture of the Images and all other required data and information from each Check, Program Manager will transmit one or more files containing the Images and all other required information pertaining to all Checks (the “File”) from the End User to Bank. Subject to the terms and conditions herein, Bank will process the File(s) in accordance with this Schedule J (Remote Deposit Capture Services) and Bank Policies. Program Manager agrees that Bank shall be the exclusive provider of RDC Services for the applicable Program and that Program Manager will not use (and will cause Subcontractor not to use) the same or similar services of any other party to provide RDC Services for the applicable Program.

Limitations for the RDC Services.

The RDC Services are subject to limits, including daily, weekly and monthly limits on the dollar amounts of Images that End User or Program Manager may transmit or submit and limits on the value of each Eligible Item, which applies to each separate Image. Bank may modify End User limits and add others at any time at Bank’s option. Program Manager agrees to provide Bank with any and all information needed to establish such limitations and shall not accept or attempt to process Checks in excess of the maximum limitations established by Bank.

Program Manager shall prohibit any End User from using the RDC Services if the current balance of the applicable Deposit Account (or the balance of the FBO Account related to End User) is negative, there are restrictions on the Deposit Account (or the balance of the FBO Account related to End User) that prevent the depositing or withdrawing of funds, or there are more than (2) two returned deposited items in the last two (2) statement cycles from End User. Program Manager shall further ensure it does not request Bank to process any Check transaction in the event of the foregoing.

The RDC Services are only available within the United States. Once an Image has been accepted for deposit, Bank is not able to delete or remove the item from the collection process.

Image Requirements.

Program Manager shall only submit to Bank for processing  Files based on the following Eligible Items as source documents, and shall ensure each End User uses only Eligible Items as source documents to that comply with the following: (a) all instruments must be drawn on or payable through a federally insured depository financial institution; (b) no instrument may be a starter Check; (c) each instrument must be machine-readable full-field magnetic ink character recognition (“MICR”) encoded with the bank routing number, account number and check serial number printed on the Check; and (d) each instrument must be for an amount less than or equal to the approved Check limit assigned by Bank.  When Bank receives an Image of a Check transmitted from Program Manager that that has been converted to a digital version of the original Check (a Substitute Check) for subsequent presentment and collection, it shall thereafter be deemed an “item” within the meaning of Articles 3 and 4 of the Uniform Commercial Code.

Each File transmitted by Program Manager to Bank shall contain Images of the front and the back of Checks that are of minimum required size, not too dark, too light, or too bright, and must be legible and scanned and remotely deposited by an End User. The Check MICR information must be machine-readable and MICR “on us” field value must contain valid data. Each Image of each Check shall be of such quality so that the following information (which must be included on the Image) can be clearly read and understood from sight review of the Image:  (i) the amount of the check; (ii) the payee of the Check; (iii) the signature of the drawer of the Check; (iv) the date of the Check; (v) the Check number; (vi) information identifying the drawer and paying bank that is preprinted on the Check; and (vii) all other information placed on the Check prior to the Image being captured (including, but not limited to, any identification (current phone number and driver’s license number) written on the front of the check or any endorsements on the back of the Check).  An Image cannot be missing or incomplete and the Check must be filled out in its entirety for the Check to be processed, and each Check and Image shall contain all proper endorsements. Each Image shall meet all standards of image quality, all requirements necessary to create a Check and must meet all technical requirements of an “electronic item” established by Applicable Law, including Regulation J. Any Check or Image not meeting these minimal requirements or that fails to comply or violates Applicable Law will be ground for immediate suspension or termination of the RDC Services and Program Manager shall indemnify Bank for all losses suffered as a result of or in connection with such failure or violation.

Program Manager shall ensure that each Image or File submitted to Bank is the legal equivalent of the Eligible Item for all purposes, including that Bank qualifies as a holder-in-due-course for the Image under the Uniform Commercial Code, and shall ensure End User consents to such treatment.

Notwithstanding anything to the contrary, Bank reserves the right, in its sole discretion, to reject or deny, for any reason and without liability, the processing of any Check or Image scanned or deposited using the RDC Services even where Bank has provided Program Manager with a confirmation notice. If an Image does not comply with the requirements set forth in this Section (c) (“Image Requirements”) and Bank’s processing requirements, Bank may, in its sole discretion and without liability, process the Image as received for payment, correct the Image or it’s Program Manager data and process the corrected Image for payment, process the deposit for payment in another format as allowed or chargeback (debit) the Deposit Account, FBO Account, Operating Account, Program Account or Reserve Account for the amount of the Image.  In addition, Bank reserves the right to chargeback (or debit) the Deposit Account, FBO Account, Operating Account, Program Account or Reserve Account for the amount of any item, an Image or any paper item or other electronic representation of an item that is rejected by Bank for any reason, including where Bank, in its reasonable determination, the Eligible Item, Image or any paper item has been previously submitted or deposited with Bank or with anyone else or is returned to Bank. This is true even if there has been made any withdrawals against it. Bank shall not be liable for any losses, costs or fees Program Manager or End User may incur as a result of a chargeback of an ineligible item.

Bank may supplement the requirements of this Section (c) (“Image Requirements”) at any time by providing written notice to Program Manager, who will, in turn, notify End Users.

Restricted Images; Prohibited Items.

Program Manager shall not submit Files for a Prohibited Item and shall prohibit End User from remotely depositing a Prohibited Item. “Prohibited Item” means checks and other items that are not considered eligible, including the following: (i) items payable to any person other than the Person that owns the Deposit Account or funds in the FBO Account into which the Check is being deposited; (2) items containing any alteration or erasures, or which Program Manager or End User knows or suspects, or should know or suspect, are fraudulent or otherwise not authorized by the owner of the Deposit Account or funds in the FBO Account on which the item is drawn; (3) items not payable in U.S. currency; (4) items not drawn on a financial institution located in the U.S.; (5) items authorized over the telephone and created remotely; (6) items payable jointly; (7) items that never existed in paper form; (8) items previously converted to a Substitute Check and pre-existing Substitute Checks; (9) items that are dated, post-dated, or more than six (6) months old when transmitted; (10) items that are not legible (as determined by Bank) or do not conform to Section (c) (“Image Requirements”) herein or any standard established by the Board of Governors of the Federal Reserve Board or any other regulatory agency, clearinghouse or association; (11) items payable on sight or payable through drafts; (12) items with any endorsement on the back other than that approved by Bank; (13) items that are drawn or otherwise issued by the U.S. Treasury Department; (14) non-cash items; (15) promissory notes and similar obligations, such as savings bonds; (16) items that have previously been submitted through the RDC Services or through remote deposit capture service offered at any other financial institution; (17) third party checks; (18) checks that have been previously returned as unpaid or uncollected; (19) checks drawn on a bank trust account; (20) Checks that the written and numerical amounts or customer name on the Image does not match; (21) Checks not signed by the payee; (22) Items that are missing processing information (examples: missing or illegible routing numbers or account numbers); (23) any other class of checks or drafts as communicated to Program Manager from time to time; or (24) Checks or items prohibited by Bank Policies or Compliance Policies relating to the RDC Services or otherwise not acceptable under the terms of the Bank Services Agreement, this Schedule J (Remote Deposit Capture Services) or Applicable Law.

In addition to the restrictions set out above and in any event, the following transactions are unacceptable for remote check deposit processing using the RDC Services, which shall also be considered Prohibited Items, and Program Manager agrees not to submit (and shall cause End User not to submit) any of the following transactions to Bank for electronic processing: (a) temporary checks or checks that do not have the customer’s current name, address and phone number pre-printed on its face; (b) any checks drawn on any depository institution that is not federally insured or part of the ACH network; (c) any checks drawn on the personal checking account of Program Manager or any of their respective agents or employees; (d) any third party items for electronic remote check deposit processing or checks made payable to “cash” or “bearer”; I traveler’s check, money order, payroll check, counter check or sight draft; (f) any check dishonored as a result of a “stop payment” order issued by the presenter to Bank; (g) any transaction representing the financing of an existing obligation whether previously owed to Program Manager or End User arising from the dishonor of a check or arising from a credit card, debit card or smart card dispute with Program Manager or End User; (h) in an attempt to collect a debt or financed obligation; (i) was one of multiple instruments or payment methods presented that day; (j) a check written for goods or services that are not concurrently provided to the customer, including any check given for a service contract, gift certificate, a layaway (except for the final payment) or for a similar transaction, or for goods or services provided to a third party; (k) that contains erasures, or which is altered, unless the alteration is initialed by the customer at time of presentation; (l) is likely to be dishonored or appears forged, stolen or otherwise fraudulent; and/or (m) knowingly submit a check on an account which Bank previously denied authorization. Program Manager or their respective agents or employees shall not submit or process (and shall prohibit End Users from submitting) any item with prior knowledge that the item is likely to be dishonored or that the identification used was forged, stolen, or otherwise did not belong to the check writer, or that the transaction for which the item was tendered is illegal, void or invalid. Program Manager’s submission of any of the above transactions for remote deposit check processing may subject the RDC Services to immediate suspension or termination, and all funds of Program Manager or End User, including those in the Deposit Account and FBO Account, may be placed on hold.

In addition to Program Manager’s other indemnification obligations under this Agreement, if Program Manager submits or processes a Prohibited Item, Program Manager agrees to indemnify and reimburse Bank for, and hold Bank harmless from and against, any and all losses, costs and expenses (including reasonable attorney’s fees) Bank may incur as a result of or in connection with the Prohibited Item.

Handling of Original Item and Creating the Image: Program Manager agrees that it shall (and shall cause End User to) only submit Images of the original Eligible Item that is still in the possession of End User. Program Manager shall (and shall cause End User to) follow any and all other procedures and instructions set forth in this Schedule J (Remote Deposit Capture Services), the RDC User Guide, the Bank Services Agreement and this Agreement.

Restrictive Endorsements. Prior to transmitting an image of an item using the RDC Services, Program Manager shall ensure End User’s signature is affixed to the back of the Eligible Item and the End User restrictively endorses any Eligible Item transmitted to Bank as “For remote deposit only at Evolve Bank & Trust” or as otherwise instructed by Bank. Bank is not responsible or liable for any losses, claims, damages or expenses that result from placement of any other special instructions on any Checks submitted or transmitted for deposit by End User related to the RDC Services, and Program Manager shall be responsible for such losses, claims, damages or expenses. Program Manager understands that any message text or other information End User elects to add to the check image transmitted to Bank may cause the depository bank’s endorsement not to be legible which may result in the delayed return of the Check or electronic representation if it is not paid, and, as between Bank and Program Manager, Program Manager shall be responsible for any liability or Losses resulting from such delay. 

Creating the Image. Prior to submitting a File, Program Manager shall accurately create (and shall ensure End User accurately creates) an Image and inputs the correct dollar amount of the check into the Device and shall ensure the MICR data, check number, and name of the maker of the Check are commercially printed on any Check and included in the File. Program Manager also understands that the appearance of the original Check and the use of certain background colors, decorative images, and choices in ink on the original check may affect the ability to produce a readable digital image of the check or the creation of a Substitute Check that meets legal equivalence requirements which may require the original check to be processed for collection, and any such liability or Losses related to the foregoing shall be the responsibility of Program Manager.  Program Manager is responsible for the inspection of and causing its End Users to inspect all Images to ensure the legibility of the Images including without limitation the dollar amount, the signature of the maker of the Eligible Item, and for ensuring that any and all information on the Eligible Item is accurately captured and legible in the resulting Image.

Processing, Transmission of Files and Returns.

Processing.

Bank may attempt to process, collect, present for payment, return or re-present Images in any way in Bank’s discretion, including, as Images under private agreement or clearinghouse rules, as automated ACH entries under NACHA Rules, through a Federal Reserve payment service under Regulation J and Federal Reserve Operating Circulars, as Substitute Checks or as permitted under Applicable Law. Upon Bank’s request, Program Manager shall and shall cause End Users to provide Bank with the Eligible Item from which the Image was created and then collect the original Eligible Item. Without limiting anything herein, Bank may, in its sole discretion, reject, repair, alter, amend, re-format or convert the Image or MICR data submitted in a deposit through the RDC Services in accordance with general check collection practices and industry presentment standards, but Bank has no obligation to do so, and Bank shall not be liable to Program Manager or End User for doing so or failing to do so. If Bank requires that Program Manager or End User comply with certain formatting standards or other guidelines when submitting a File or Image RDC Services and Program Manager and/or End User declines to implement, or comply with such standards or guidelines, Program Manager acknowledges that it shall be liable for any error or loss that results from its processing of such deposits or any delays caused from Bank’s re-formatting or conversion of the deposit prior to processing the deposit. Bank shall have no liability to Program Manager, End User or any other Person in the event that any deposited Check is processed as, or converted by Bank to, an Image or Substitute Check.

Bank is authorized to process transactions hereunder and to disseminate information in accordance with the information Bank receives electronically from Program Manager or End User. Bank shall have no responsibility for erroneous data provided by Program Manager, End User or third-party designee. Program Manager shall bear all losses and liability related to the erroneous data provided in connection with a Check, Image, File data or information that is transmitted to Bank in connection with the RDC Services.

All settlements related to RDC Services are provisional and are subject to the End User’s rights to dispute the debits and/or credits to the applicable FBO Account or Deposit Account or subject to Bank’s right to revoke the same without prior notice in the event one or more of the transactions are rejected or returned to Bank for any reason. Program Manager acknowledges that if for any reason funds are credited to an End User in excess of the amount that the End User is entitled to receive in connection with the Eligible Image, Program Manager shall provide to Bank the excess funds upon demand by Bank. Bank may collect such excess funds by a debit to the applicable FBO Account or Deposit Account initiated by Bank. If for any reason the FBO Account or Deposit Account does not have sufficient funds, then Bank may debit any Program Account or the Reserve Account.

In the event a File or information contained therein cannot, be processed hereunder, Program Manager shall notify Bank in writing (and/or by phone, fax or email). Once notification is received by Bank, Program Manager shall not submit the File for processing without Bank’s written approval.

Program Manager shall permit End User to only scan each Check, Image or File submitted to Bank for processing through no more than one Bank approved Device. Program Manager understands that it is a violation of Applicable Law and this Agreement to process debit requests against an End User’s or Person’s account without the End User’s or Person’s express, written consent and authorization. Program Manager shall be exclusively responsible and liable for any such counterfeit, fictitious, lost, stolen or fraudulently obtained debit instrument. It is also understood by Program Manager that any transaction initiated as an unauthorized entry or deposit is unlawful. In the event of a violation of Applicable Law or the processing of a counterfeit, fictitious, lost, stolen or fraudulently obtained debit instrument or item, Program Manager shall be liable to Bank for any Losses or liability related to or arising out of or in connection with such transaction and shall reimburse Bank for such transaction immediately.

Batch Out and Receipt and Transmission of a File.

Program Manager agrees to “batch out” all deposits by End Users using or in connection with the RDC Services on a daily basis. “Batch Out” shall mean the totaling, settling, or reconciling by Program Manager of all check images processed by midnight (12:00 a.m.) of the day Bank authorizes the transmission of the information contained in the batch submitted to Bank. Program Manager agrees to upload Files based on Images from the Device daily and acknowledges that Bank cannot process the Files where the Images have not been made available to Bank. In addition, for any Image(s) contained in an untimely Batch Out, Bank may refuse, chargeback or hold the batch until after a sixty (60) day period for consumer or customer disputes. Program Manager acknowledges that failure to Batch Out on a timely basis may be grounds for suspension or termination of the RDC Services by Bank in Bank’s sole discretion. Further, Program Manager acknowledges that failure to Batch Out will delay funds being deposited and repeated failure to Batch Out will constitute a breach of this Agreement.

Program Manager shall be solely liable for any File, Image or other information contained therein that is not received by Bank, that is dropped during transmission of any File, Image or other information contained therein, or that is intercepted or altered by an unauthorized third party. Program Manager agrees that Bank shall have no obligation to accept a File or Image if it violates the terms of this Agreement, including any Bank policies related to check processing, and, therefore, may reject any File, Image or other information contained therein submitted by Program Manager. Bank shall have no liability to Program Manager or any Person for the rejection of a File, an Image or other information contained therein or for the failure to notify Program Manager or Person of such rejection.

Upon receipt of a File or Image submitted by Program Manager or End User, Bank may examine such File and Image and other information contained therein to ensure that it complies with the terms of this Schedule J (Remote Deposit Capture Services), the RDC User Guide, the Bank Services Agreement, this Agreement and Applicable Law. If Bank determines that the File and/or Image does not comply with the terms herein, the Bank Services Agreement, this Agreement or Applicable Law or if errors exist in the Images or other information contained in the File, Bank may, in its sole discretion, either reject the File or elect to correct the error and accept and process the corrected File. As a form of correction, Bank may or may cause Program Manager to credit the Deposit Account or FBO Account for the full amount of the deposit and make any necessary adjustments to the Deposit Account or FBO Account to correct the error. If after examination of a File and the Images and other information contained therein, Bank determines that the File, Image or other information contained therein complies with and was processed and transmitted in accordance with this Schedule J (Remote Deposit Capture Services), the RDC User Guide, the Bank Services Agreement, this Agreement and Applicable Law, the File is balanced and the Images meet the requirements of the RDC User Guide and this Agreement, then Bank shall accept the File for deposit to the Deposit Account or FBO Account. Upon acceptance of the File, Bank may notify Program Manager of receipt and acceptance of the File for deposit; provided, however such confirmation and acceptance does not mean the transmission or deposit is error free or complete. Notwithstanding the fact that Bank has accepted a File for deposit, Program Manager shall remain liable to Bank for any inaccuracies, breach of warranties and any other loss sustained by, or claim made against, Bank in relation to any credit made to a Deposit Account or FBO Account.

At the time Program Manager or End User initiates authorization or processing with Bank of any File, including any Check or Image through the use of the RDC Services, Program Manager represents and warrants that: (i) End User has or has authorized Program Manager to endorse all checks and other cash items for collection; (ii) the preparation and presentment of the transaction complies with the terms and conditions set forth in this Schedule J (Remote Deposit Capture Services), the RDC User Guide and this Agreement; (iii) the Image of the Check transmitted to Bank is a sufficient copy that is a true, correct, and an accurate Image that represents all the information on the front and back of the original Check at the time the original Check was truncated so that a Substitute Check created from the Image will satisfy legal equivalence requirements and the Image has not been altered in any manner by any Person; (iv) Program Manager or any third party acting on behalf of Program Manager has reviewed and confirmed that the transmission of MICR line information is identical in all respects to the original Check and that the encoded Check amount is accurate, (v) the original Check, or a paper or electronic representation, has not previously been deposited for collection with any financial institution, and no depositary bank, drawee, drawer, or endorser will be asked to pay a Check that it already has paid, (vi) Program Manager will or will cause End User to retain the original Check, or in the event that Program Manager utilizes the lockbox services of a third party or other similar services that such third party designee will retain the original check, until final settlement of the transaction and for such additional period as may be required in the event of a disputed truncated or Substitute Check, including claims that the Check or electronic representation does not satisfy legal equivalence requirements, so that the original check can be processed for collection, and that Program Manager or its third party designee or End User will take reasonable efforts to safeguard any original Checks until they are destroyed, (vii) Program Manager has no knowledge or notice of information to indicate that the transaction is fraudulent; (viii) that each Check is for an amount agreed to by the End User; (ix) Program Manager nor any of its respective employees or third party designees have submitted Checks drawn from their personal checking accounts; and (x) no transaction submitted for authorization to Bank is with or through a Person other than Program Manager or End User.

Bank shall be conclusively entitled to deem the remote deposit capture transaction authorized and binding upon Program Manager and End User: (i) if the electronic transmission of the Check, Image or File is made by, or Bank reasonably believes the transmission of the Check, Image or File was made by, Program Manager, End User or any of their apparent agents or authorized representatives; (ii) if Program Manager utilizes the services of a third party to facilitate the processing of the Check, Image or File, and Bank reasonably believes that such transaction and transmission by such third party are sent on behalf of Program Manager or End User; (iii) if the Program Manager, End User, or any off their respective affiliates, principals, employees, representatives or agents benefit from the transaction or transmission of such Check, Image of File, whether directly or indirectly; or (iv) the Check, Image or File is transmitted through the application program interface (API) made available by Bank; such API submission to be deemed a commercially reasonable security procedure by the parties, as contemplated by the Uniform Commercial Code.  See Schedule K (Security Procedures) for additional information.

Returned Items.

Program Manager shall obtain End User’s authorization for Bank to represent all items that are returned to Bank and to originate an electronic entry for the amount of any allowable recovery fee. Bank shall present the entry no more than two (2) times. Bank shall be entitled to assess a transaction fee from Program Manager for each representment. If a check is returned unpaid after presentment, Bank shall be entitled to debit any account Program Manager holds with Bank or exercise any other rights it has under this Agreement or under Applicable law.

Bank shall have no liability or obligation regarding any transaction processed at the request of Program Manager or Servicer for any dishonored or returned check transaction, including, if any Check is: (i) not honored by a customer’s financial institution; (ii) fraudulent, whether Program Manager, its Servicers or their respective employees or agents are involved, either as a principal or as an accessory, in the issuance; (iii) lost, stolen, altered or counterfeit; (iv) given as a substitute for a previously accepted Check, whether or not the previous Check was authorized by the maker or, any Check upon which Program Manager or its Servicer has accepted full or partial payment; (v) one of multiple Checks presented in a single transaction; (vi) for goods, if the goods are subsequently returned by customer or repossessed; (vii) previously denied authorization; (viii) related to a transaction for which cash is returned back to a customer; (ix) not in compliance with this Agreement, Bank Policies, Compliance Policies, the Bank Services Agreement or Applicable law and not processed in accordance with this Schedule J (Remote Deposit Capture Services); or (x) illegible or not permitted for deposit, including Checks with incorrect MICR data scans or reads.

Program Manager shall notify End User that if an Eligible Item deposited using the RDC Services is dishonored or otherwise returned to Bank as unpaid, for non-sufficient funds, or for any other reason, including by a clearing agent for any reason (including but not limited to, issues relating to the quality of the Image) and the original Check was destroyed, the original Check will not be returned, and Bank may charge back an Image of the Check and all fees associated with the returned item to the Deposit Account or FBO Account balance associated with the End User. Program Manager understands and shall obtain End User’s consent in order for Bank to process the Image of any replacement of an original Check in the form of an electronic or paper reproduction of the original Check. Unless otherwise instructed by Bank, Program Manager agrees not to (and shall cause End User not to) deposit or submit the original Check if an Image or other debit is charged back to the Deposit Account or FBO Account balance associated with the End User.

If this Agreement is terminated for any reason, Bank will retain the right to complete the representment process for all returned Check items prior to said termination. Any collection fees received by Bank in collecting returned Checks shall be the sole property of Bank.

Maintenance, Retention and Destruction of Original Check.

After the Check is deposited using the RDC Services, Program Manager shall (or shall cause End User to) securely store all original Checks for a minimum of ninety (90) days after the Check has been posted to the Deposit Account(s) or applicable FBO Account (such period is the “Retention Period”). During the Retention Period, Program Manager shall (or shall cause End User to) take appropriate security measures to ensure that: (a) such deposited Checks are stored in a location away from daily processing activity; (b) only authorized individuals or personnel have access to original Checks, (c) the information contained on such Checks shall not be disclosed, (d) such Checks will not be duplicated or scanned more than one time or physically deposited at the Bank after being electronically deposited and I such Checks will not be deposited or negotiated in any form.

Program Manager shall (or shall cause End User to) destroy original Checks upon the expiration of the Retention Period applicable to such Checks. Program Manager will use (and cause End User to use) commercially reasonable methods to destroy original Checks after expiration of the Retention Period. Cross-cut shredding is strongly recommended for Check destruction. Program Manager is responsible and liable for any claims, losses or damages incurred by Bank resulting from or in connection with the destruction of original Checks.

Program Manager will promptly (and cause End User to promptly) (but in all events within forty-eight (48) hours) provide any retained original Check or other information to Bank as requested by Bank to aid in the clearing and collection process or to resolve claims by third parties with respect to any Check or in connection with any deposit using the RDC Services. If the original Check has been destroyed and Bank needs the original Check to process a payment, re-present a Check in order to collect a returned Image or Substitute Check, or resolve a dispute arising from a deposit through the RDC Services, Program Manager shall be responsible for providing (or causing its End User to provide) Bank with a replacement check. However, if the original Check was not retained and not able to be replaced or lost by Program Manager or End User, Bank will not be able to process or re-present the transaction.

Hardware and Software.

Program Manager shall and shall cause End Users to scan each Check through a Bank approved Device to initiate the RDC Services under this Schedule J (Remote Deposit Capture Services), the RDC User Guide, this Agreement and Applicable Law; provided, however, Bank shall not be liable for any Losses related to the Device (it being understood that Program Manager is completely liable for all Losses and obligations associated with a Device). Program Manager shall provide to End User a Device in order to access or otherwise use the RDC Services in compliance with the terms of this Agreement and the Bank Services Agreement. Program Manager shall ensure it has all Intellectual Property rights to a Device and has otherwise obtained all licenses necessary for each End User and Bank (to the extent applicable) to use a Device in connection with the RDC Services, and Program Manager represents and warrants that the Device and any related software used by an End User to access the RDC Services shall not infringe upon the Intellectual Property rights of any Person.  Program Manager shall defend, indemnify and hold Bank Indemnitee Parties harmless for any Losses arising out of or in connection with any claim that the Device or any related Intellectual Property (including any technology to capture or create an image of a Check) infringes or misappropriates the Intellectual Property of any third Party. Upon approval of such Device by Bank, Program Manager shall assign an identification number for each Device. As between Bank and Program Manager, Program Manager is responsible for all telecommunication fees and charges, including but not limited to telephone fees, associated with and related to the use of the software or Device. Program Manager shall maintain (and shall cause End User to maintain) all equipment related to electronic check processing in good working order and shall monitor such equipment for viruses, defects, malfunctions, Device, system or software failures or interruptions at Program Manager’s sole expense. Program Manager shall advise Bank immediately in the event of a breakdown of a Device, software, or of any other system failure. Program Manager acknowledges that Bank is not responsible for any equipment or software problems. Moreover, Bank’s approval of such equipment does not constitute nor express an implied warranty, representation or endorsement of such equipment. Program Manager agrees to utilize only equipment approved by Bank for the processing of Checks and in a format and medium of transmission acceptable to Bank.

Program Manager acknowledges that a Device may not capture all security features (e.g., watermarks) contained in or on the Eligible Item, and that Program Manager shall (or shall cause End User) to manually examine the paper item to determine the authenticity prior to creating an Image. Program Manager assumes all responsibility for any losses resulting in or in connection with any claims based on the security features that do not survive the processing of the Image.

If Bank determines to provide any software or user materials (the “Bank Software”) for use with the RDC Services, Bank may from time to time, make modifications or updates to the Bank Software and Program Manager agrees to (and agrees to cause Servicer to) adopt such updates or modifications as they become available. Any Bank Software shall be subject to a separate software licensing agreement. The Bank Software may only be used to submit transactions to Bank as contemplated herein. Any license of and permission to use the Bank Software is non-exclusive and nontransferable, and it extends only to Program Manager’s or End User’s use for the purpose of processing transactions hereunder in accordance with this Schedule J (Remote Deposit Capture Services), the RDC User Guide and this Agreement. The Bank Software may not be used to process transactions with or through any other party without the express written consent of Bank and may not be exported in contravention of U.S. or foreign export laws.

Fund Availability.

Program Manager agrees that items transmitted using the RDC Services are not subject to the funds availability requirements of Federal Reserve Board Regulation CC, and Program Manager shall notify End User of such exclusion. Bank, in its sole discretion, may make funds available sooner or may extend the hold period based on such factors as credit worthiness, the length and extent of End User’s relationship with Bank, transaction and experience information, risk associated with the item and such other factors as Bank, in its sole discretion, deem relevant. Bank may also delay availability if there is an emergency, such as failure of computer or communications equipment.

Program Manager shall not reflect to any End User that funds are available for use before Bank receives funds for any Check deposited through the RDC Services. Until Program Manager receives confirmation that the funds are made available, Program Manager may not permit End Users to withdraw funds. If Bank pays items or honors other withdrawals before funds are available, Bank may charge a fee for this. If Program Manager successfully transmits an Image to Bank before the cutoff time of 6 PM CT for the Deposit Account or FBO Account on a Business Day, Bank will consider that day to be the day of the deposit. After that time, Bank will consider the deposit to be made on the next Business Day. Even after the item has “cleared,” Bank has made funds available to End User, and End User has withdrawn the funds, Program Manager is still responsible for items deposited that are returned to Bank unpaid and for any other problems involving the End User’s deposit.