HomeMy WebLinkAbout18- City Administrator CITY OF SAN BERN. ' gDINO - REQUEST F R COUNCIL ACTION
FRED WILSON Resolution authorizing agreement
From: Assistant City Administrator Subject: with First Interstate Bank for
Dept: banking services .and deposit of
monies.
Date: February 22 , 19 9 3
Synopsis of Previous Council action:
Recommended motion:
Adopt resolution.
Signature
Contact person:_ Fred Wilson Phone: 5122
Supporting data attached: Ward:
FUNDING REQUIREMENTS: Amount:
Source: (Acct. No.)
(Acct. Description)
Finance:
Council Notes:
75-0262 Agenda Item No. 'J
CITY OF SAN BERN_ ADINO — REQUEST F ..dR COUNCIL ACTION
STAFF REPORT
In November, the City requested bids for banking services from all
the major banks in San Bernardino. Three banks--First Interstate,
Wells Fargo, and Bank of America--submitted proposals. After
having reviewed each proposal, the Banking Services Committee
recommends that Council approve the attached contract and continue
its banking relationship with First Interstate. Committee members
were: Fred Wilson, Assistant City Administrator; Barbara Pachon,
Finance Director; Mary Fifield, Administrative Analyst; Paul
Harmon, Water Department Finance Director; and David Kennedy,
Treasurer.
The committee established a list of criteria, of which price for
services and ability to meet service requirements were most heavily
weighted. The other criteria--understanding of workscope, quality
and responsiveness of proposal, the bidder' s experience with
government accounts, and proposed compensating balances--were
secondary qualifications. Each member completed a rating sheet for
each bank (see attached sample) , and First Interstate ranked
highest with a combined average score of 96 out of 100.
First Interstate submitted the most complete proposal and provided
recommendations that the committee felt would help the City receive
the highest level of service at the most affordable price.
Specifically, First Interstate recommended the following:
* Partial Account Reconcilement to reduce monthly
maintenance costs
* Automated Balance Transaction Reporter to reduce monthly
maintenance costs
* Zero Balance Account system with one base account number
and prefixes to denote subaccounts rather than several
accounts that funnel into a separate Zero Balance Account
* Eliminating some detail items provided by ACTION to avoid
unnecessary charges
* Issue stop payments via ACTION to save costs on that
service
First Interstate was also the lowest priced bidder, and although
service variations and differences in terminology make line item
comparisons difficult, First Interstate had the lowest monthly fee.
The attached cost comparison shows the current monthly fee of
$8, 900. The First Interstate bid price for the same services the
City is using now is $8, 000, a savings of $800. By July, the City
should have the computer capability to implement all of First
Interstate' s cost-savings recommendations to bring the monthly fee
to $6, 800, a savings of $2 , 000. Under the terms of the agreement,
the City is required to maintain a monthly compensating account
balance which will offset the proposed monthly fee. As the
attached cost comparison shows, the other banks could not match
that savings.
'5-0264
In addition to reviewing the proposals, the Committee interviewed
each bank to clarify questions. Importantly, First Interstate was
the only bank to appear at the interview with its local branch
manager. Because the other banks were represented by regional
managers from Los Angeles or other offices and not local branch
managers, Committee members had concerns about the other banks
providing reliable and consistent service at the branch level.
While the process of bidding for banking services did not result in
a change in banks, the committee feels that First Interstate ' s new
contract reflects competitive pricing and a wider range of services
than the City was offered previously. The new contract also
formalizes service requirements while providing the flexibility to
change, add, or delete services as the City' s needs change. The
City will be entering into a three-year proposal with First
Interstate, a different approach to banking services than the City
ha:; taken in the past. By signing a contract with a limited term,
the City has the opportunity to make significant changes as soon as
the contract expires. Previously, because no official contract
existed, neither party could be completely sure of the services
expected or the procedure for changing them.
1
RESOLUTION NO.
2
RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE
3 EXECUTION OF TWO AGREEMENTS WITH FIRST INTERSTATE BANK FOR THE
PROVISION OF BANKING SERVICES TO THE CITY OF SAN BERNARDINO AND THE
4 DEPOSIT OF MONIES.
5
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF
6 SAN BERNARDINO AS FOLLOWS:
7 SECTION 1. The Mayor of the City of San Bernardino is hereby
8 authorized and directed to execute on behalf of said City two
9 agreements with First Interstate Bank for the provision of banking
10 services to the City of San Bernardino, and the deposit of monies,
11 copies of which are attached hereto, marked Exhibits "A" and "B"
12 respectively, and incorporated herein by reference as though set
13 forth at length.
14 SECTION 2. The authorization to execute the above agreements
15 is rescinded if the parties to the agreements fail to execute them
16 within sixty (60) days of the passage of the resolution.
17 I HEREBY CERTIFY that the foregoing resolution was duly
18 adopted by the Mayor and Common Council of the City of San
19 Bernardino at a meeting thereof, held on the day
20 of , 1993 , by the following vote, to wit:
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RESOLUTION OF HE CITY OF SAN BERNARDINO .JTHORIZING THE
EXECUTION OF TWO AGREEMENTS WITH FIRST INTERSTATE BANK FOR
PROVISION OF BANKING SERVICES AND DEPOSIT OF MONIES.
1
2
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4 Councilmembers AYES NAYS ABSTAIN ABSENT
5 ESTRADA
6 REILLY
7 HERNANDEZ
8 MAUDSLEY
9 MINOR
10 POPE-LUDLAM
11 MILLER
12
13
14 City Clerk
15
16 The foregoing resolution is hereby approved this day of
17 , 1993 .
18 W. R. Holcomb, Mayor
19 City of San Bernardino
20 Approved as to form
and legal content:
21 JAMES F. PENMAN
22 City Attorney
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-2-
CITY OF SAN BERNARDINO
AGREEMENT FOR BANKING SERVICES
THIS AGREEMENT, made and entered into this 1st day of March, 1993, by and
between the CITY of San Bernardino, a municipal corporation, hereinafter referred to as
"City" and FIRST INTERSTATE BANK OF CALIFORNIA, hereinafter referred to as
"Bank".
I.
RECITALS
The City is desirous of obtaining the services of Bank to provide certain banking
services to City, and Bank is desirous of providing such services.
II.
SCOPE OF SERVICES
Bank shall provide the services set forth, in its proposal to City dated December 18,
1992, which is attached hereto as Exhibit "A" and said pages of which are for an election
to be made by City, the election shall be made by the City Treasurer of City. The City
Treasurer may also elect to delete any of the services set forth in the above designated
portion of Exhibit "A," subject to the notice requirements contained in the Product
Agreements described below. Bank may provide additional services under the terms of this
Agreement upon the mutual agreement of Bank and City and the approval of the terms and
conditions thereof by the City Council of the City of San Bernardino.
1
III.
PRODUCT AGREEMENTS
Bank shall provide the services set forth in the above designated portion of Exhibit
"A" as more specifically described in the "Cash Management Terms and Conditions",which
is attached hereto as Exhibit "B", to be executed by City concurrently herewith, a copy of
which is attached hereto and incorporated herein by this reference. Any future Bank
services not currently the subject hereof will be reflected by Product Agreements for such
services to be executed by the parties and incorporated herein if not already covered in the
"Cash Management Terms and Conditions." In the event of any inconsistency between the
provisions of this Agreement, the portions of Exhibit"A" incorporated herein and the "Cash
Management Terms and Conditions," the terms of this Agreement and the incorporated
portions of Exhibit "A" shall prevail.
IV.
COMPENSATION
Compensation to Bank for the services provided pursuant to this Agreement shall
be as set forth in the pricing provisions in the attached Exhibit"A", said provisions of which
are incorporated herein by this reference. In the event that services not specified in Exhibit
"A" are requested by City, the fees for such services shall be negotiated at the time they are
added. The Bank shall reserve the right to pass on direct costs associated with Federal and
State Regulations, including Federal Deposit Insurance Corporation charges. Revisions to
the compensation hereunder shall be approved by the City Council of the City of San
Bernardino, subject to Bank's unilateral right to change its fees each July, commencing July
of 1995.
METHOD OF PAYMENT
Bank shall be paid for its services hereunder pursuant to the relevant provisions of
its proposal set forth in Exhibit "A," which provisions are incorporated herein by this
reference.
2
VI.
TERM
This Agreement shall commence on the 1st day of March, 1993 and shall remain and
continue in effect until June 30, 1995.
VII.
EXTENSION
The term of this Agreement may be extended by City's Treasurer and Bank by
agreement in writing with respect to each such extension at least thirty (30) calendar days
prior to the date on which this Agreement or an extension thereof would otherwise have
terminated. The terms and conditions of the agreement as so extended shall be as set forth
herein except that modifications in the compensation designated in Section III - Fee
Schedule may be made effective for the period of any extension as mutually determined by
Bank and the Treasurer of City in writing as a part of the agreement for the extension of
this Agreement, subject to the approval of the City Council of City.
VIII.
TERMINATION
Any other provision herein to the contrary notwithstanding,and in addition to other
methods of termination provided for herein or available under the laws of the State of
California, it is agreed that this Agreement shall terminate.ninety (90) days after written
notice of termination, which may be given by either party to the other party to this
Agreement with or without cause. After the expiration of such ninety(90) day period, Bank
shall immediately cease all services hereunder except as may be specifically approved by the
City. Bank shall be entitled to compensation for all services rendered prior to the
termination and for any services authorized by City thereafter in accordance with the
aforementioned section regarding compensation.
3
IX.
NOTICES
Any notice required to be given hereunder shall be in writing with copies as directed
herein and shall be personally served or given by mail. All notices by mail shall be deemed
to have been given when received by the party to be served. Mail notices are to be sent by
United States mail, certified and postage prepaid, addressed to the party to be served as
follows:
TO CITY: City of San Bernardino
David C. Kennedy, City Treasurer
300 North "D" Street
San Bernardino, CA 92418-0001
TO BANK: First Interstate Bank
Cynthia Siddons, Vice President & Manager
San Bernardino Main Office
290 North "D" Street
San Bernardino, CA 92401
AND
First Interstate Bank
Susan M. Cotton, Vice President & Manager
Government Services Group
5000 Birch Street, Suite 10,000
Newport Beach, CA 92660
Either party may change its address by notifying the other party of the change of
address in writing. Notice shall be deemed communicated when received by the party to
be served if served as provided in this section.
4
X.
ATTORNEYS' FEES
In the event that either party hereto fails to comply with any of the terms of this
Agreement and the other party commences legal proceedings to enforce any of the terms
of this Agreement or to terminate this Agreement, the prevailing party in such suit shall
receive from the other a reasonable sum including attorneys' fees and costs as may be
established by the Court or Jury.
XI.
ASSIGNMENT; SUBCONTRACTS
The experience, knowledge, capability and reputation of Bank, its principals and
employees were a substantial inducement for City to enter into this Agreement. Therefore,
Bank shall not subcontract, assign or otherwise transfer its rights and obligations under this
Agreement without prior written consent of City. Any such subcontractor or assignment
without such consent shall be void and shall, at the option of City, terminate this
Agreement. It is understood and agreed that for any such services provided to City, with
the City's written consent, the full cost of such services are not fixed for any period of time
as are Bank provided services, and will be passed along to the City. Such services include
but are not limited to armored carrier, deposit courier, and messenger service.
XII.
EXTENT OF AGREEMENT
This document, the portions of Exhibit"A" incorporated herein by reference and the
"Cash Management Terms and Conditions" represent the entire integrated Agreement
between City and Bank and supersede all prior negotiations, representations or agreements,
either written or oral. This Agreement and the incorporated portions of Exhibit "A" may
be amended only by written instrument signed by both City and Bank. The "Cash
Management Terms and Conditions" may be amended only as provided therein.
5
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
stated above.
CITY OF SAN BERNARDINO FIRST INTERSTATE BANK
By:
City of San Bernardino Title:
A Municipal Corporation
By:
Title:
ATTEST:
City Clerk of the
City of San Bernardino
APPROVED AS TO FORM AND LEGAL CONTENT:
C' Attorney of the
City of San Bernardino
6
FIRST INTERSTATE BANK CURRENT SCHEDULE
SUMMARY OF SERVICES
Account Services
Full Account Reconciliation $ 2 , 251. 35
Direct Demand Account/Clearing House 3 ,700.90
Cash Vault Services 462 . 96
Money Transfer/Wires 5. 50
Electronic Funds Transfer/ACH EDT 190. 34
Action (Information Reporting) 1, 019. 96
Trust Collateralized Account 987 . 00
Armored Car 243 . 00
$ 8, 861. 01
FIRST INTERSTATE BANK PRO FORMA FEE SCHEDULE
MONTHLY SUMMARY OF SERVICES
SUBMITTED DECEMBER, 1992
Account Services
Full Account Reconciliation $ 2, 591. 65
Direct Demand Account Services/Clearing House 3 ,764 . 57
Cash Vault Services 576. 06
Money Transfer/Wire Service 43 . 00
Electronic Funds Transfer ACH/EDT 106. 90
Zero Balance Accounting 175. 00
Action (Information Reporting) 502 . 72
Trust Collateralized Account -0-
Armored Car 243 . 00
$ 8 , 002 .90
FIRST INTERSTATE BANK PRO-FORMA FEE
SCHEDULE/RECOMMENDATIONS
MONTHLY SUMMARY OF SERVICES
SUBMITTED DECEMBER, 1992
Account Services
Partial Account Reconciliation $ 1, 805. 04
Direct Demand Account Services/Clearing House 3 , 764 . 57
Cash Vault Services 576. 06
Money Transfer/Wires 43 . 00
Electronic Funds Transfer ACH/EDI 106. 90
Zero Balance Accounting 175. 00
Action (Information Reporting) 112 . 72
Trust Collateralized Account -0-
Armored Car 243 . 00
$ 6, 826. 29
BANK OF AMERICA
PROPOSAL - MONTHLY SUMMARY OF SERVICES
DECEMBER, 1992
Account Services
Full Account Reconciliation $ 1, 609 . 63
Direct Demand Account/Clearing House Serv. 6, 410. 61
Cash Vault Services 252 .70
Money Transfer Wires 197 . 00
Electronic Funds Transfer/ACH 223 . 05
BAMTRAC (Information Reporting) 412 . 32
Armored Car Service 357 . 50
$ 9,462 . 81
WELLS FARGO - PRICING PRO-FORMA
SUMMARY OF MONTHLY CHARGES
SUBMITTED DECEMBER, 1992
ACCOUNT SERVICES
Account Reconciliation $2 , 279 . 91
Direct Demand/Clearing House 3 , 597 . 94
Cash Vault Services 3 , 412 . 19
Money Transfers/Wires 102 . 50
Electronic Funds Transfers/ACH, EDT 354 . 26
Zero Balance Account Services 235. 00
Armored Car 357. 50
Setup and Test (one time charge) 100. 00
$ 10, 439. 30
First Interstate Bank
CASH MANAGEMENT SERVICES
TERMS AND CONDITIONS
CUSTOMER ACCEPTANCE
We (the "Customer") have agreed to receive one or more Cash Management Services offered by
First Interstate Bank. We hereby agree that the provision of the Services by First Interstate and its
affiliates shall be governed by, and we acknowledge receipt of, the First Interstate CASH MANAGEMENT
SERVICES TERMS AND CONDITIONS, as such document is amended from time to time.
We have executed signature card(s) and received rules and regulations governing deposit
accounts with respect to our deposit account(s) at First Interstate Bank and one or more of its affiliates, as
required by the Services. The persons named on such signature cards are authorized to give instructions
on behalf of Customer regarding the Services.
CITY OF SAN BERNARDINO
CUSTOMER
By:
Name:
Title:
Date:
CERTIFICATION
I certify that I am the Secretary or Assistant Secretary of the Customer, that the signature of the
person signing above is the genuine and authorized signature of that person and that he/she is
authorized to sign in the capacity indicated.
Signature of Secretary or
Assistant Secretary
Date:
LAD 2002 6/92
First Interstate Bank
CASH MANAGEMENT SERVICES
TERMS AND CONDITIONS
CUSTOMER ACCEPTANCE
We (the "Customer") have agreed to receive one or more Cash Management Services offered by
First Interstate Bank. We hereby agree that the provision of the Services by First Interstate and its
affiliates shall be governed by, and we acknowledge receipt ot, the First Interstate CASH MANAGEMENT
SERVICES TERMS AND CONDITIONS, as such document is amended from time to time.
We have executed signature card(s) and received rules and regulations governing deposit
accounts with respect to our deposit account(s) at First Interstate Bank and one or more of its affiliates, as
required by the Services. The persons named on such signature cards are authorized to give instructions
on behalf of Customer regarding the Services.
CUSTOMER
By:
Name:
Title:
Date:
CERTIFICATION
I certify that I am the Secretary or Assistant Secretary of the Customer, that the signature of the
person signing above is the genuine and authorized signature of that person and that he/she is
authorized to sign in the capacity indicated.
Signature of Secretary or
Assistant Secretary
Date:
LAD 2002 6/92
EXHIBIT "B"
- .lFirst CID 1217
interstate
Bank CONTRACT FOR DEPOSIT OF MONEYS
(Active and Inactive Deposits)
No. Complete All Applicable Blanks
(a) Date: January 31, 1993
(b) Depository's paid-up capital and surplus $ 761,402,136.26
(c) Agent of Depository FIRST INTERSTATE BANK OF CALIFORNIA TRUST DIVISION _J
The undersigned designated as "Treasurer", acting in the official capacity for the Depositor C;ty of
BPrnardinn (herein called Treasurer) and FIRST INTERSTATE BANK
OF CALIFORNIA designated as "Depository" (herein called Depository), agree as follows:
1. Representations. Treasurer proposes to deposit moneys in Treasurer's custody with depository from time to
time. At no time will the amount of deposit exceed the Depository's paid-up capital and surplus. In Treasurer's
judgment this contract is to the public advantage. Depository represents that as of the date hereof, its total paid-up
capital and surplus is not less than the amounts shown at (b) above.
2. Governing Law and Compliance. This contract is entered into pursuant to California Government Code
Section 53649, and the parties will comply in all respects with, and all deposits hereunder shall be governed by,
Title 5, Division 2, Part 1, Chapter 4, Article 2 of the California Government Code (herein called Governing Statute)
and all other provisions of state and federal law and regulations applicable to such deposits.
3. Deposit Receipt. At the time of each deposit, Depository will issue a receipt to Treasurer in form agreed to by
them. The receipt shall state the interest rate to be paid, if any, the maturity of the deposit and the frequency of
interest payment. Each receipt shall be a part of this contract.
4. Interest. If interest is payable on a deposit it shall be paid quarterly, at such rate as Treasurer and Depository
agree upon for the deposit, and computed on a 360-day basis on the average daily balances of the deposit.
5. Maintaining Security - Non-REN and REN Security:
As security for deposits under this contract, Depository, at all times and pursuant to California Government Code
Sections 53656 and 53658, will maintain with the Agent of Depository named at (c) above eligible securities as listed
in subsections (a) through (1) and (n) and (o) of California Government Code Section 53651 (herein called "Non-REN
security") and/or promissory notes secured by first mortgages and first trust deeds upon improved residential
property in California (herein "REN security" ). At all times, when any of Depository's moneys on deposit with
Depository under this contract are secured by Non-REN security, the market value of such security shall be at least
10 percent in excess of the actual total amount of such moneys of Depository, and when any of Depositor's moneys
on deposit with Depository under this contract are secured by REN security, the value of such security shall be at
least 50 percent in excess of the amount of such moneys of Depositor.
6. Waiver of Security. The Treasurer hereby waives security for such portion of any deposits as are insured by
the Federal Deposit Insurance Corporation as provided by California Government Code Section 53653.
7. Depository's Default. If depository fails to pay all or any part of a deposit made and secured by securities
under this contract when ordered to do so in accordance with terms of withdrawal set forth on the deposit receipt,
Treasurer will notify the Administrator in writing, who then will order the necessary securities converted into money
for the benefit of Depositor as provided in California Government Code Section 53665.
DD-2500 1/89
EXHIBIT "B"
First CID 1217
Interstate
Bank
CONTRACT FOR DEPOSIT OF MONEYS
(Active and Inactive Deposits)
No. Complete All Applicable Blanks
(a) Date: January 31, 1993
(b) Depository's paid-up capital and surplus $ 761 ,4u, 1 6 26
(c) Agent of Depository FIRST INTERSTATE BANK OF CALIFORNIA TRUST DIVISION _J
The undersigned designated as "Treasurer", acting in the official capacity for the Depositor M ty of
__. Snn RPrnnrdi nn (herein called Treasurer) and FIRST INTERSTATE BANK
OF CALIFORNIA designated as "Depository" (herein called Depository), agree as follows:
1. Representations. Treasurer proposes to deposit moneys in Treasurer's custody with depository from time to
time. At no time will the amount of deposit exceed the Depository's paid-up capital and surplus. In Treasurer's
judgment this contract is to the public advantage. Depository represents that as of the date hereof, its total paid-up
capital and surplus is not less than the amounts shown at (b) above.
2. Governing Law and Compliance. This contract is entered into pursuant to California Government Code
Section 53649, and the parties will comply in all respects with, and all deposits hereunder shall be governed by,
Title 5, Division 2, Part 1, Chapter 4, Article 2 of the California Government Code (herein called Governing Statute)
and all other provisions of state and federal law and regulations applicable to such deposits.
3. Deposit Receipt. At the time of each deposit, Depository will issue a receipt to Treasurer in form agreed to by
them. The receipt shall state the interest rate to be paid, if any, the maturity of the deposit and the frequency of
interest payment. Each receipt shall be a part of this contract.
4. Interest. If interest is payable on a deposit it shall be paid quarterly, at such rate as Treasurer and Depository
agree upon for the deposit, and computed on a 360-day basis on the average daily balances of the deposit.
5. Maintaining Security - Non-REN and REN Security:
As security for deposits under this contract, Depository, at all times and pursuant to California Government Code
Sections 53656 and 53658, will maintain with the Agent of Depository named at (c) above eligible securities as listed
in subsections (a) through (1) and (n) and (o) of California Government Code Section 53651 (herein called "Non-REN
security") and/or promissory notes secured by first mortgages and first trust deeds upon improved residential
property in California (herein "REN security" ). At all times, when any of Depository's moneys on deposit with
Depository under this contract are secured by Non-REN security, the market value of such security shall be at least
10 percent in excess of the actual total amount of such moneys of Depository, and when any of Depositor's moneys
on deposit with Depository under this contract are secured by REN security, the value of such security shall be at
least 50 percent in excess of the amount of such moneys of Depositor.
6. Waiver of Security. The Treasurer hereby waives security for such portion of any deposits as are insured by
the Federal Deposit Insurance Corporation as provided by California Government Code Section 53653.
7. Depository's Default. If depository fails to pay all or any part of a deposit made and secured by securities
under this contract when ordered to do so in accordance with terms of withdrawal set forth on the deposit receipt.
Treasurer will notify the Administrator in writing, who then will order the necessary securities converted into money
for the benefit of Depositor as provided in California Government Code Section 53665.
DD-2509 1/89
C
First Interstate Bank
CASH MANAGEMENT SERVICES
TERMS AND CONDITIONS
BANK and its affiliated First Interstate Banks ("Affiliates") are wholly-owned subsidiaries of First Interstate
Bancorp. BANK and Affiliates provide a wide range of Cash Management Services (the "Services") to their
customers. The following Terms and Conditions, which include Exhibit A hereto,contain the rules which govern the
Services which may be provided to you (the "CUSTOMER").
In these Terms and Conditions, BANK shall mean the First Interstate Bank providing a particular Service to
CUSTOMER or,if the context so indicates, BANK or any one or more of the Affiliates. BANKs shall mean BANK and
each of the Affiliates which provide Services to CUSTOMER.
Any day on which a majority of BANK's offices are open to the public for substantially all business
functions shall be a "Business Day". Saturdays, Sundays and federal holidays are not Business Days even if a
majority of BANK's offices are, in fact, open. Transactions, deposits, instructions and entries received by BANKS after
established cutoff deadlines may be treated as received on the next Business Day. BANKs may change any cutoff
deadline at any time upon notice to CUSTOMER.
In addition to these Terms and Conditions, the Services provided to CUSTGMER shall be subject to BANKS'
user guides or other Services' processing descriptions or procedures ("User Guides"), BANKs' rules and regulations
governing deposit accounts ("Deposit Agreements") and, if applicab.e, by the provisions of any software license
agreement(s) whether or not executed by CUSTOMER, regulations, any ACH operating rules (specifically including
but not limited to the National Automated Clearing House Association ("NACHA") Operating Rules and Guidelines)
(collectively, the "ACH Rules") and by Article 4A of the Uniform Commercial Code, as enacted in the state of the
BANK which receives a funds transfer instruction. If such State has not enacted Article 4A, then funds transfer
instructions shall be governed by the Official Text of Article 4A, as amended from time to time. Other capitalized
terms shall have the meaning as set forth in these Terms and Conditions or, if applicable, in the NACHA Rules or
Article 4A of the Uniform Commercial Code.
Disclaimer of Information and Warranties. BANKS MAKE NO WARRANTIES, EXPRESS OR IMPLIED, IN
LAW OR IN FACT, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF FITNESS FOR A
PARTICULAR PURPOSE AND OF MERCHANTABILITY, EITHER TO CUSTOMER OR TO ANY OTHER PARTY
WITH RESPECT TO THE SERVICES PROVIDED BY BANKs OR ANY COMPUTER PROGRAMS OR OTHER
SOFTWARE PRODUCTS PROVIDED BY BANKs PURSUANT TO ANY SERVICE.
Submission of Information and Check Samples. BANKs reserve the right to specify and approve the form of
CUSTOMER's checks, drafts or deposit slips. At least fifteen (15) days prior to initiating a new account or Service,
CUSTOMER agrees to provide all information which a BANK may reasonably request, including without limitation,
specifications, signature cards and test tapes, transmissions and documents. A BANK may request, initially and
upon reorder, samples of CUSTOMER's checks, drafts and deposit slips in an amount specified by BANK, for
BANK's inspection to ensure, in BANK's sole determination, that BANK's quality control and processing
specifications with respect to encoding and paperstock are satisfied. In the event that BANK determines that any
sampling or test does not meet its specification requirements, BANK will advise CUSTOMER of this result and
CUSTOMER will not be eligible to obtain Services until such time as a new sampling or test is provided to BANK and
determined by BANK to be satisfactory.
Security Procedures. Where required for any Service, BANKs and CUSTOMER shall agree to one or more security
procedures which must be used by BANKs and CUSTOMER in connection with any communication between
CUSTOMER and BANKs ("Security Procedures").
Proprietary Property. CUSTOMER acknowledges that all computer programs and systems used in providing the
Services and all information relating thereto, constitute proprietary property of BANKs, having great commercial
value to BANKs and CUSTOMER shall not acquire any proprietary interest or rights therein as a result of its use of
the Services.
Confidentiality. CUSTOMER and BANKS represent, warrant and mutually agree that all information concerning
the other party or parties which comes into its possession in connection with any of the Services including software
licensed to CUSTOMER, User Guides, Security Procedures or any security codes, keys, personal identification
numbers or template numbers ("Codes") will be maintained as confidential and shall not be used or divulged to any
other party except as may be necessary or advisable for the due performance of any of the Services or as required by
applicable law. CUSTOMER is solely responsible for the establishment and maintenance of procedures reasonably
adapted to assure the confidentiality of Security Procedures and Codes.
1
If CUSTOMER or its agents have reason to believe that any Security Procedures or Codes have or may have
become known by unauthorized persons (whether or not employed by CUSTOMER), CUSTOMER shall
immediately notify BANK by telephone and agrees to confirm that oral notification in writing to BANK within 24
hours. BANK will replace the Security Procedures and Codes in accordance with BANK's security requirements.
CUSTOMER shall be solely liable for funds transfer instructions and other communications initiated before BANK
has received such notice and has had a reasonable opportunity to act on such notice. BANK reserves the right to
change any or all of the Security Procedures or Codes at any time by giving oral or written notice to CUSTOMER.
Honoring Transactions and Instructions. BANK will honor CUSTOMER's transactions and instructions
(including adjustments and cancellations) only when CUSTOMER has complied with these Terms and Conditions.
BANK will be under no obligation to honor, either in whole or in part, any transaction or instruction that (a) exceeds
CUSTOMER's collected and available funds on deposit with BANK; (b) is not in accordance with any condition
indicated by CUSTOMER and agreed to by BANK; (c) BANK has reason to believe may not be authorized by
CUSTOMER or its customers; (d) involves funds subject to a hold, dispute or legal process preventing their
withdrawal; (e) would violate any provision of any present or future risk control program of the Federal Reserve or
any current or future rule or regulation of any other federal or state regulatory authority; (f) is not in accordance with
any other requirement stated in these Terms and Conditions or any BANK policy, procedure or practice;or, (g) for
the protection of BANK or CUSTOMER, BANK has reasonable cause not to honor.
Erroneous Instructions. If a BANK receives an Entry, funds transfer instruction or other transaction which is
transmitted or authorized by CUSTOMER and is erroneous in any way, CUSTOMER shall be obligated to pay the
amount of such transaction as provided herein whether or not BANK complied with any applicable Security
Procedure.
Confirmation; Account Reconciliation. CUSTOMER agrees to regularly and promptly review and verify all
reports, wire transfer instructions, adjustments, charges, entries and other transactions. CUSTOMER shall
immediately or, in any event, within fourteen (14) calendar days following the day BANK first mails or otherwise
makes available to CUSTOMER BANK's notification ("Review Period"), notify BANK of any error or discrepancy
between CUSTOMER's records and any BANK notice or statement, or any transaction or transfer CUSTOMER
believes was not authorized by it. However, if the law of the state of the BANK providing services does not allow a
Review Period of this duration, then the Review Period shall be the shortest period of time allowed by such state's
laws.
If CUSTOMER fails to notify BANK of such discovery within the Review Period, then in the event of an
erroneous Payment Order, CUSTOMER will be liable for all losses (including any loss of interest) up to the amount
of the Order, which result from CUSTOMER's failure to give BANK such notice or which might have been prevented
by giving BANK such notice, and, in the event of an unauthorized Payment Order, BANK will not be liable for any
loss of interest which results from CUSTOMER's failure to give BANK such notice or which might have been
prevented by giving such notice.
If CUSTOMER fails to notify BANK of any such error or discrepancy within one hundred twenty (120)
calendar days following the day BANK first mails or otherwise makes available to CUSTOMER BANK's notification
("Notification Period"), CUSTOMER shall be precluded from asserting such discrepancy against BANK However, if
the law of the state of the BANK providing services does not allow a Notification Period of this duration, then the
Notification Period shall be the shortest period of time allowed by such state's laws.
Inconsistency of Name and Account Number. If CUSTOMER issues a Payment Order which describes the
person to receive the proceeds of such Payment Order (the "Beneficiary"), the Beneficiary's bank,or an intermediary
bank by name and an account or other identifying number, BANK and subsequent parties to the Payment Order
may act solely on the basis of such number, even though the name and number do not agree and even though the
BANK and subsequent parties know or had reason to know of the inconsistency. In addition, CUSTOMER's
obligation to pay the amount of the Payment Order to BANK is not excused in such circumstances.
Courier Agreements. CUSTOMER may utilize a courier to deliver or receive banking transactions and, in so doing,
CUSTOMER agrees at all times and in all respects (a) courier is the agent of CUSTOMER and not BANKs; (b) BANKs
make no representation or warranty regarding and assume no responsibility with respect to any services performed
or promised by courier; and (c) CUSTOMER assumes all risk of loss (including loss or theft by third parties or
employees of CUSTOMER or courier) prior to BANKs' acceptance of such transactions from courier and subsequent
to courier's acceptance of transactions from BANKs. CUSTOMER agrees that it and courier will be responsible for all
loss recovery procedures and processes, although BANK will undertake reasonable efforts to facilitate loss recovery.
Fees. Unless otherwise agreed in writing, CUSTOMER shall pay each BANK the fees,charges and assessments set
forth for the Services provided in the most current price quoted by each BANK, plus additional fees and expenses for
any extraordinary services. In addition, CUSTOMER shall pay each BANK any taxes levied or based on the fees
charged pursuant to the Services, including state or local privilege, excise or sales taxes based on gross revenue, any
taxes or amounts in lieu thereof paid or payable by BANKS, excluding BANK income taxes, and any assessments
charged BANKs directly as a result of providing the Services.
2
If CUSTOMER obtains account analysis services from BANKS, the amounts due hereunder may be charged
to analysis. If CUSTOMER does not obtain account analysis services or if CUSTOMER's monthly analysis credits are
insufficient to pay the amounts due hereunder, CUSTOMER agrees to pay such amounts directly to BANK upon
demand. BANK may charge CUSTOMER directly for third party expenses incurred on CUSTOMER's behalf.
CUSTOMER agrees that BANKS may debit CUSTOMER's accounts for any and all such fees, expenses, taxes or
assessments.
Limitation of Liability. In addition to limits provided elsewhere, each BANK's liability relating to any Service shall
be limited exclusively to actual proven damages arising directly from its own gross negligence or willful misconduct.
None of the BANKs, individually or severally will, under any circumstances, be liable for any special, incidental,
indirect, consequential or punitive losses or damages whether or not the likelihood of such losses or damages was
known by either party at the time COMPANY first obtains Services from BANK or at the time any instruction or
order is given to a BANK pursuant to any Services. In addition, none of the BANKs shall be liable for any losses or
damages caused, in whole or in part, by the action or inaction of CUSTOMER, or any agent or employee of
CLSTOMER, whether or not such action or inaction constitutes negligence or a breach of these Terms and
Conditions. BANKs shall not be liable for any damage, loss, liability or delay caused by accident, strike,fire,flood,
war, riot, equipment breakdown, electrical or mechanical failure, acts of God or any cause which is reasonably
unavoidable or beyond their reasonable control. CUSTOMER agrees that the fees charged for the performance of the
Services shall be deemed to have been established in contemplation of these limitations on liability.
CUSTOMER acknowledges that the reconstruction of events causing CUSTOMER to sustain damages
becomes difficult and may be inaccurate more than one year following the occurrence of such events. Therefore,
CUSTOMER agrees that any claim, action, suit or proceeding against any BANK for damages resulting in any respect
from its acts or omissions in the performance of the Services must be brought within one year from the date of such
BANK's alleged act or omission. However, if the law of the state of the BANK providing services does not allow
reduction of statute of limitations to one year then all claims, actions, suits or proceedings against such BANK shall be
brought within the shortest period of time which such state's laws allow for agreements limiting periods of time for
the filing of suits.
CUSTOMER agrees to immediately notify each affected BANK of any claim by CUSTOMER, or any claim
that is made to CUSTOMER by a third party, that any act or omission by BANK(s) in connection with any Service
has caused CUSTOMER or such third party to sustain any damages.
Indemnification. CUSTOMER agrees to indemnify, defend and hold the BANKs (and the Controlled Disbursement
Bank, if applicable), individually and collectively, their parent company, affiliates and subsidiaries,directors, officers,
employees and agents harmless from and against any damage, loss or liability of any kind, including without
limitation, reasonable attorney's fees and court costs, which result directly or indirectly, in whole or in part, from the
Services.
Cooperation in Loss Recovery Efforts. In the event of any damages for which BANKs or CUSTOMER may be
liable to any of the others or to a third party pursuant to the Services, BANKs and CUSTOMER will undertake
reasonable efforts to cooperate with each other (as permitted by applicable law) in performing loss recovery efforts
and in connection with any action(s) that the relevant party may be obligated to defend or elect to pursue against a
third party.
Customer's Records. These Terms and Conditions and the performance by BANKS of the Services hereunder
shall not relieve CUSTOMER of any obligation imposed by law or contract regarding the maintenance of records or
from employing adequate audit, accounting and review practices as are customarily followed by similar businesses.
CUSTOMER shall retain and provide to BANK, upon request, all information necessary to remake or reconstruct any
deposit, transmission, file or Entry until ten Business Days following receipt by BANK of the deposit, file,Entry,
transmission, or other order affecting an account.
Third Parties. Provision of certain Services is dependent upon BANK's ability to provide access to third party
networks. In the event any third party network is unavailable or in the event BANK determines, in its discretion,
that it is unable to continue providing any third party network access, BANK may discontinue the related Service or
may provide the Service through an alternate third party network and shall have no liability for the unavailability of
access. BANKs shall not be responsible for services received by CUSTOMER from any third party vendors.
Designation of Accounts Pursuant to the CUSTOMER's purchase of the Services, CUSTOMER will designate
accounts for specific pure( CUSTOMER agrees to provide to BANK in writing the designations required by each
of the Services purchased. :iowever, in the absence of such written designation, the course of dealing between BANK
and CUSTOMER shall take the place of a written designation.
Authority to Combine Funds. CUSTOMER hereby represents and warrants to BANKs that any and all transfers
and commingling of funds required or permitted by any Service, and all other aspects of the performance hereof by
BANK and CUSTOMER, have been duly authorized by all necessary parties including, without limitation, the
account holder of each account, and that CUSTOMER has obtained and shall maintain in its regular business records
and make available to BANK upon reasonable demand, for a period of six years after termination of the Service,
adequate documentary evidence of such authorization from the account holder of each account, executed by the duly
3
authorized officer(s) of each such account holder in accordance with that account holder's corporate by-laws and
board resolutions. CUSTOMER further represents and warrants that each transfer or commingling of funds
authorized hereunder is not in violation of any by-law or board resolution of CUSTOMER or any of its affiliates or
subsidiaries, nor in violation of any applicable federal,state or local statute, ordinance, regulation or rule of law, or of
an-y decree, judgment or order of any judicial or administrative authority. Each representation and warranty
contained herein shall be continuing and shall be deemed to be repeated upon BANK's effecting each transfer and
commingling of funds authorized hereunder.
Financial Review. CUSTOMER is subject to satisfactory financial review by BANK from time to time, at BANK's
sole option and discretion, and in accordance with BANK's established criteria. CUSTOMER shall, upon BANK's
request, provide to BANK any such information and assistance as BANK may require to perform any such
evaluation. Failure of CUSTOMER to meet such standards or to provide such information or assistance when
requested shall constitute a breach of these Terms and Conditions and shall permit BANKs to cease providing
Services.
Services. BANKs may provide Services which are not included in the Services section of these Terms and
Conditions. By accepting any such Service, CUSTOMER agrees that the Service will be governed by these Terms
and Conditions. Certain Services included in these Terms and Conditions are not provided by all BANKs.
Amendment and Termination. BANKs may amend these Terms and Conditions and their User Guides from
time to time by giving written notice to CUSTOMER or by sending a copy of the amended documents to
CUSTOMER's current billing address. In addition, BANK or BANKs may agree to modifications to these Terms and
Conditions; however such modifications shall apply only to those BANKs which agree in writing. Each of the
BANKs or CUSTOMER may terminate Services, or any Service, by giving written notice to the other party.
Governing Law. These Terms and Conditions shall be governed by the laws of the state where BANK's principal
place of business is located. Each Affiliate's performance of any Service shall be governed by the laws of the state
where such Affiliate's principal place of business is located.
Notices. All written notices to a BANK shall be delivered or mailed to CUSTOMER's office of account. Notices sent
to CUSTOMER shall be delivered or mailed to CUSTOMER's current billing address or other known address if
deemed more appropriate by BANK.
Binding Arbitration Program. Upon the request of either CUSTOMER or BANKs (each being referred to as a
"party" and collectively as the "parties"), whether made before or after the institution of any legal proceeding, any
action, dispute, claim, or controversy of any kind (e.g.,whether in contract or in tort, statutory or common law,legal
or equitable) now existing or hereafter arising between the parties in any way arising out of, pertaining to or in
connection with these Terms and Conditions, Deposit Agreements or any related agreements, documents, or
instruments (the "Documents") shall be resolved by binding arbitration in accordance with the terms of this
Arbitration Program. The foregoing matters shall be referred to as a "Dispute." Any party to this Arbitration
Program may, by summary proceedings (e.g., a plea in abatement or motion to stay further proceedings), bring an
action in court to compel arbitration of any Dispute.
All Disputes between the parties shall be resolved by binding arbitration administered by the American
Arbitration Association (the "AAA") in accordance with the terms of this Arbitration Program, the Commercial
Arbitration Rules of the AAA, and, to the maximum extent applicable, the Federal Arbitration Act (Title 9 of the
UnEed States Code). In the event of any inconsistency between this Arbitration Program and such statute and rules,
this Arbitration Program shall control. Judgment upon the award rendered by the arbitrators may be entered in any
court having jurisdiction; provided, however, that nothing contained herein shall be deemed to be a waiver by any
party that is a bank of the protections afforded to it under 12 U.S.C. §91 or similar governing state law.
No provision of, nor the exercise of any rights under, this Arbitration Program shall limit the right of any
party to employ other remedies, including, without limitation, (1) exercising self-help remedies (including setoff
rights) or (2) obtaining provisional or ancillary remedies such as injunctive relief, sequestration, attachment,
garnishment, or the appointment of a receiver from a court having jurisdiction before, during, or after the pendency
of any arbitration. The institution and maintenance of an action for judicial relief or pursuit of provisional or
ancillary remedies or exercise of self-help remedies shall not constitute a waiver of the right of any party, including
the plaintiff, to submit the Dispute to arbitration nor render inapplicable the compulsory arbitration provisions
hereof.
In Disputes involving indebtedness or other monetary obligations, each party agrees that the other party
may proceed against all liable persons, jointly and severally, or against one or more of them, less than all, without
impairing rights against other liable persons. Nor shall a party be required to join the principal obligor or any other
liable persons in any proceeding against a particular person. A party may release or settle with one or more liable
persons as the party deems fit without releasing or impairing rights to proceed against any persons not so released.
4
The arbitrators shall resolve all Disputes in accordance with the applicable substantive law. Arbitrators shall
be licensed practicing attorneys and shall be knowledgeable in the subject matter of the Dispute. With respect to a
Dispute in which the claim or amount in controversy does not exceed$1,000,000, a single arbitrator (who shall have
authority to render a maximum award of$1,000,000, including all damages of any kind and costs,fees and the like)
shall be chosen and shall decide the Dispute. With respect to a Dispute in which the claim or amount in controversy
exceeds $1,000,000,the Dispute shall be decided by a majority vote of three arbitrators. The arbitrators may grant
any :remedy or relief that the arbitrators deem just and equitable and within the scope of the Arbitration Program.
The arbitrators may also grant such ancillary relief as is necessary to make effective the award. In all arbitration
proceedings in which the amount in controversy exceeds $1,000,000 in the aggregate, the arbitrators shall make
specific, written findings of fact and conclusions of law. In all arbitration proceedings in which the amount in
controversy exceeds$1,000,000 in the aggregate,the parties shall have in addition to the limited statutory right to seek
vacation or modification of an award pursuant to applicable law, the right to seek vacation or modification of any
award that is based in whole, or in part on an incorrect or erroneous ruling of law by appeal to an appropriate court
having jurisdiction; provided, however, that any such application for vacation or modification of an award based on
an incorrect ruling of law must be filed in a court having jurisdiction over the Dispute within 15 days from the date
the award is rendered. The arbitrators' findings of fact shall be binding on all parties and shall not be subject to
further review except as otherwise allowed by applicable law.
To the maximum extent practicable, an arbitration proceeding hereunder shall be concluded within 180 days
of the filing of the Dispute with the AAA. Arbitration proceedings hereunder shall be conducted in any city where
the BANK(s) involved in the Dispute conducts business. Arbitrators shall be empowered to impose sanctions and to
take such other actions as the arbitrators deem necessary to the same extent a judge could do pursuant to the Federal
Rules of Civil Procedure, the applicable state rules of civil procedure and other applicable law. This Arbitration
Program constitutes the entire agreement of the parties with respect to its subject matter and supersedes all prior
discci,ssions, arrangements, negotiations, and other communications on dispute resolution. The provisions of this
Arbitration Program shall survive any termination, amendment, or expiration of the Documents. To the extent
permitted by applicable law, the arbitrator shall have the power to award recovery of all costs and fees (including
attorneys' fees, administrative fees, and arbitrators' fees) to the prevailing party. Each party agrees to keep all
Disputes and arbitration proceedings strictly confidential, except for disclosures of information required in the
ordinary course of business of the parties or by applicable law or regulation.
Specific Performance. CUSTOMER agrees that money damages would not be sufficient remedy for any breach of
these Terms and Conditions and that BANKs shall be entitled to specific performance, in addition to any other
remedies at law or in equity, as a remedy for any breach.
Severability. To the extent possible, each provision of these Terms and Conditions shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision shall be held to be invalid, illegal or
unenforceable, such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability,
without rendering invalid, illegal or unenforceable the remainder of any such provision or the remaining provisions
of these Terms and Conditions.
Waiver. A waiver by a BANK or CUSTOMER of any term or provision shall not be construed as a waiver of such
term or provision at any other time, or of any other term or provision or as a waiver by any other BANK.
Assignment. Each BANK may at any time assign or delegate its rights and duties under these Terms and
Conditions to any of its Affiliates which are owned or controlled by such BANKs' parent company(s). Otherwise,
neither BANKs nor CUSTOMER may assign or transfer its rights or obligations hereunder to any other person
without the other parties' prior written consent, which consent shall not be unreasonably withheld. BANKs may at
any time assign or sell their operations facilities which provide the Services.
No Third Party Beneficiaries. No other person or entity shall be deemed to be a third party beneficiary of these
Terms and Conditions.
Telephone Recording. The decision to record any telephone conversation shall be solely within each BANK's
discretion, and no BANK shall have liability for failing to do so. CUSTOMER ACKNOWLEDGES AND AGREES ON
BEHALF OF ITSELF, ITS EMPLOYEES AND ITS AGENTS, THAT BANK MAY MONITOR AND RECORD
TELEPHONE CONVERSATIONS AT ANY TIME WITHOUT FURTHER NOTICE TO THE PARTIES TO SUCH
TELEPHONE CONVERSATIONS.
Headings. The section headings in these Terms and Conditions are intended to be for reference purposes only and
shall in no way modify or restrict any of the terms or provisions hereof.
Entire Agreement. These Terms and Conditions, the User Guides and Deposit Agreements constitute the entire
agreement between the parties and supersede any prior agreements or representations relating to the Services and
may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements.
5
CASH MANAGEMENT SERVICES
TERMS AND CONDITIONS
EXHIBIT A
SERVICES
ACCOUNT RECONCILEMENT SERVICES
BANK shall provide certain reports and statements of account activity to CUSTOMER relating to account
activity over designated time periods in the manner and at the times agreed to by the parties.
Microcomputer Based Reconciliation Services. BANK has obtained a license to use the software, materials and
data ("Software Products") of a microcomputer based reconciliation program. BANK grants CUSTOMER and
CUSTOMER accepts a nonexclusive right and sublicense to use the Software Products provided by BANK pursuant
to these Terms and Conditions.
ACH SERVICES
Customer may transmit automated clearing house (ACH) Entries in accordance with BANK's Security
Procedures and these Terms and Conditions. BANK may process Entries to Receiving Depository Financial
Institutions directly or through any mechanism selected by BANK.
CUSTOMER Representations and Warranties. CUSTOMER represents and warrants to BANK that all Entries
are complete, accurate and authorized, and that it has obtained authorizations from Receivers for Credit and/or Debit
Entries to those Receivers' accounts at participating financial institutions. Receiver authorizations shall expressly
authorize BANK to transmit Debit and Credit Entries to correct erroneous Entries to Receivers' accounts and shall
authorize CUSTOMER to release to BANK all information concerning its Receivers that is required by BANK to
enable it to recover such funds transfers. CUSTOMER shall cease initiating Entries for a Receiver's account(s)
immediately upon CUSTOMER's receiving actual or constructive notice of the termination or revocation of the
Receiver's authorization and BANK shall have no liability for Entries transmitted with respect to such Receivers.
CUSTOMER will retain the original or a copy of each authorization received by CUSTOMER for six years after
termination or revocation of the authorization -and shall provide BANK copies of such authorizations upon BANK's
request.
Entry Limits. The total dollar amount of Entries transmitted by CUSTOMER to BANK under each ACH Service on
any one day shall not exceed the lesser of collected and available balances in CUSTOMER's Account or a daily dollar
limit established by BANK. BANK may specify such a daily dollar limit and CUSTOMER agrees that it will not
exceed that limit without the prior written consent of BANK. CUSTOMER authorizes BANK to charge its accounts
with BANK and other financial institutions in the amount of CUSTOMER's Entries.
Rejected and Returned Entries. In the event an Entry is rejected by BANK for any reason whatsoever, it shall be
the responsibility of CUSTOMER to remake the Entry. In the event an Entry is returned by any ACH Processor for
any reason whatsoever, BANK will submit the Entry back to CUSTOMER for further instructions from CUSTOMER,
if any; however, BANK shall remake such Entry in any case where the return was due to BANK's mishandling and
sufficient data is available to BANK to permit it to remake the Entry. BANK will debit/credit CUSTOMER's Account
for Entries that are returned to BANK Unless the return is caused by BANK's failure to properly execute an Entry,
BANK. has no obligation to credit CUSTOMER's Account with interest on the amount of any returned Entry it has
debited from such Account.
Settlement Date. CUSTOMER will receive funds for any Debit Entry on the Settlement Date,subject to the right of
BANK to make adjustments pursuant to these Terms and Conditions.
Third Party Vendors. If CUSTOMER transmits Entries through a third party vendor ("Vendor"), Vendor is the
agent of CUSTOMER. BANK is not responsible for the acts or omissions of Vendor, and CUSTOMER agrees to hold
BANK harmless from any losses caused by acts or omissions of Vendor. CUSTOMER agrees that the Security
Procedure established between Vendor, as CUSTOMER's agent, and BANK is commercially reasonable.
AUTOMATED STOP PAYMENT SERVICES
Notwithstanding CUSTOMER's receipt of a confirmation, BANK will be afforded a reasonable time of not
less than one full Business Day in which to act on any stop payment order. Unless BANK has otherwise agreed in
writing, any stop payment order placed though the Automated Stop Payment Service will automatically expire six
months from the date of placement if the order is not renewed by CUSTOMER.
6
CASH CONCENTRATION/CASH DISBURSEMENT SERVICES
CUSTOMER authorizes BANK to initiate debit or credit entries to accounts designated by CUSTOMER at
one or more financial institutions. BANK shall initiate the entries either by depository transfer checks or ACH
Entries. CUSTOMER agrees to do such acts as are necessary to authorize other financial institutions to honor such
Depository Transfer Checks or ACH Entries.
CASH ORDERING SERVICES
Settlement for cash orders prepared by BANK will be made by a charge to CUSTOMER's designated
account on the Business Day of delivery to CUSTOMER's agent. BANK may specify a daily cash order limit and
CUSTOMER agrees that it will not exceed that limit without the prior written consent of BANK. Cash orders to be
delivered at a cash vault shall be delivered only to CUSTOMER's armored courier. CUSTOMER will hold coin and
currency shipments in the custody of two or more employees until the contents are verified. Contents must be i
verified by strap on the day of receipt and by piece count within two Business Days of receipt. Discrepancies must
be reported to BANK in accordance with BANK's procedures.
CHECK SAFEKEEPING SERVICES
BANK will safekeep the original of each paid check for an agreed upon period, after which checks may be
disposed of in a manner agreed to by the parties. CUSTOMER may request copies of paid checks in accordance with
BANK's procedures. CUSTOMER agrees that checks retained by BANK shall be deemed received by CUSTOMER
and that BANK shall have no liability for any loss, expense or claim relating to,arising from,or caused by, directly or
indirectly, in whole or in part, any reason of CUSTOMER not receiving original paid items pursuant to this Service.
BANK shall not have responsibility to provide copies of check(s) after five (5) years from posting.
CONTROLLED DISBURSEMENT SERVICES
CUSTOMER shall complete and submit the account application documents provided by BANK to open:
(a) a demand deposit checking account (the "Disbursement Account") at the Controlled Disbursement Bank
specified by BANK ("Disbursing Bank") and (b) an account at BANK (the "Funding Account"). CUSTOMER agrees
to maintain sufficient collected balances in the Funding Account to fund each debit effected by BANK. CUSTOMER
hereby authorizes and directs BANK to act on its behalf and as its agent, as BANK in its sole discretion deems
necessary or advisable, in performing any of the Controlled Disbursement Services and related Services. Without
limiting the foregoing, CUSTOMER expressly authorizes BANK to obtain access, from time to time, to all records of
the Disbursement Account. CUSTOMER hereby authorizes BANK to disclose to Disbursing Bank such information
concerning CUSTOMER's affairs as BANK may deem appropriate.
Report of Incoming Debits. Disbursing Bank shall, on each Business Day, inform BANK of the total aggregate
amount (the "Daily Aggregate Debit") of all checks,net of adjustments, and other charges ("Items") to be posted to
the Disbursement Account. Provided that such information is made available to BANK, BANK shall make this
information available to CUSTOMER each day not later than the time agreed to by the parties. If, for any reason,
Disbursing Bank does not provide BANK with such information, the Daily Aggregate Debit for such day shall be
estimated. For purposes of Controlled Disbursement Services, 'Business Day" shall mean any day on which both
BANK and Disbursing Bank are open to conduct their regular banking businesses at their principal banking offices.
Transfer of Funds to Disbursement Account; Reimbursement Obligation. BANK is hereby authorized to
debit the Funding Account in an amount equal to the actual or estimated Daily Aggregate Debit and to transfer funds
in said amount to Disbursing Bank for credit to the Disbursement Account. BANK is further authorized to transfer,at
any time, sufficient funds from the Funding Account to the Disbursement Account to maintain any minimum
balance which may be established from time to time by CUSTOMER. On the Business Day preceding any day on
which Disbursing Bank will be open to conduct its regular banking business but BANK will be closed, BANK is
hereby authorized to debit the Funding Account in an amount equal to an estimate of the following day's Daily
Aggregate Debit and to transfer funds in said amount to Disbursing Bank for credit to the Disbursement Account.
BANK shall make float adjustments to CUSTOMER for any difference between an estimated and actual Daily
Aggregate Debit.
DaiN Dollar limit. A daily dollar limit (the "Dollar Limit") may be established from time to time by BANK, in
BANK's sole discretion, with respect to the Disbursement Account. Disbursing Bank shall have no obligation to pay
Items in excess of the Dollar Limit and BANK shall have no obligation at any time to fund the Disbursement Account
for amounts in excess of the Dollar Limit. BANK may at any time, either verbally or in writing (but shall not be
deemed obligated to) notify CUSTOMER of any change made by BANK in the Dollar Limit, and CUSTOMER hereby
waives notice and agrees that any such notice shall,for all purposes, be deemed reasonable notice. Establishment of
the Dollar Limit should not be interpreted or construed by CUSTOMER as any commitment or agreement by BANK
to provide any credit or loans to CUSTOMER, nor as an agreement or commitment to debit the Funding Account
when doing so would create a negative collected balance therein.
7
Return of Unpaid Items. BANK reserves the right,in BANK's sole discretion,to instruct Disbursing Bank to return
unpaid any or all Items presented for payment against the Disbursement Account in the event that (a) there are
insufficient collected and available balances on deposit in the Funding Account by the established deadline to fund
the Daily Aggregate Debit, (b) debits cannot be posted because the Disbursement Account is closed or because of any
other condition, or (c) any communications failure or other condition prevents BANK from monitoring
CU`.iTOMER's Dollar limit and/or the Items presented for payment at Disbursing Bank.
Deposits To and Payments From the Disbursement Account. CUSTOMER acknowledges and agrees that (a) it
will not initiate any deposit of funds into the Disbursement Account directly, either by request to Disbursing Bank or
to BANK; (b) BANK and/or Disbursing Bank may refuse to accept any such deposit; and (c) BANKs may not
encash any Item drawn on the Disbursement Account unless: (i) the Item is presented for encashment by a
depositor of such BANK; (ii) the Item is drawn on BANK or, (iii) the Item is properly presented for encashment
pursuant to other arrangements.
Stop Payments Orders. CUSTOMER may issue stop payment orders on Items drawn on the Disbursement
Account in accordance with the terms of BANK's and Disbursing Bank's procedures. BANK's obligations in respect
to such an order shall be limited to conveying such order to the Disbursing Bank reasonably promptly, through such
intermediaries, including Affiliates, as BANK deems appropriate. The Disbursing Bank shall be afforded a
reasonable time of not less than one full Business Day, in which to act on any stop payment order, and BANK or
Disbursing Bank shall not be liable for payment of any item over a stop payment order during such time. Should a
stop payment order be placed on an item which is encashed by the Disbursing Bank, such timeframe shall be
extended to not less than two full Business Days.
DEPOSIT SERVICES
CUSTOMER shall specify account(s) and BANK will designate the applicable branches, BANK cash vault(s)
and BANK processing centers to be used in connection with the Deposit Services. BANK's representatives may
accept shipments containing deposited items from anyone purporting to be an agent of CUSTOMER which have
been prepared and delivered in accordance with BANK's procedures. Only armored couriers may make deposits
directly to a cash vault. BANK will receipt for shipments delivered by CUSTOMER's agent which arrive prior to the
daily deadline established by BANK. BANK's receipt for shipments will not be deemed proof of its receipt of any
contents listed in an inventory which may accompany the shipments. BANK's acceptance of any nonconforming
shipments will not be deemed a waiver of any of its rights. CUSTOMER assumes full responsibility for the
timeliness, accuracy, completeness, form, format and content of any information it furnishes to BANK with respect to
deposited items.
Processing of Deposited Items. Deposited items consisting of coin, currency and food stamps will be
provisionally credited on the Business Day of receipt by BANK provided CUSTOMER's agent arrives before BANK's
established deadline on a Business Day. Deposited items will be forwarded to BANK's processing center and will be
processed as specified in BANK's Deposit Agreement(s) and any applicable availability schedule(s). All deposits
made by CUSTOMER will be subject to verification by BANK within the time frames established by BANK's
procedures, which will be deemed complete and correct for all purposes.
Adjustment of Errors. If shipments are missing or do not contain all deposited items indicated on listing tapes and
deposit slips, BANK will make an adjusting entry to CUSTOMER's account. BANK, at its discretion, may not make
nominal adjustments to accounts to correct errors which either understate or overstate the amount of the deposit.
When an adjusting entry is made for cash shortages/overages on deposited items, BANK will provide to
CUSTOMER an advice of the entry and supporting documents.
ELECTRONIC DATA INTERCHANGE SERVICES
CUSTOMER may originate or receive data transmissions which consist of documents and payment
instructions and which are made in accordance with BANK's processing requirements and Security Procedures.
These Terms and Conditions apply only to the EDI Services provided to CUSTOMER by BANKs. The legal
relationships, and the terms and conditions relating thereto, between CUSTOMER and its trading partners shall be
governed by the terms of the EDI contracts between CUSTOMER and its trading partners and shall not be binding on
BANKs.
FIRST INTERSTATE CASH CONCENTRATOR SERVICES
BANK shall, at CUSTOMER's option: (a) Transfer funds between CUSTOMER's accounts at BANKs on a
daily basis to meet the target balances established on BANK's implementation forms, modified from time to time
upon ten (10) Business Days' written notice from CUSTOMER to BANK BANK's records shall be conclusive, absent
manifest error, as to the target balance in effect at any time for any account. Funds will be transferred each Business
Day to adjust for the previous Business Day's balances; and/or, (b) Provide CUSTOMER with a consolidated
account analysis for CUSTOMER's accounts at BANKs.
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INFORMATION AND TRANSACTION SYSTEM SERVICES
BANK will provide CUSTOMER access to the Information and Transaction System Services (the "System")
and authorize operators in accordance with CUSTOMER's instructions. BANKs will provide CUSTOMER
information regarding its account(s) at BANKs and/or other financial data through the System on a periodic basis.
Balance and related information for CUSTOMER's non-First Interstate account(s) may be made available by other
financial institutions or third party providers which input information into the System. The System also provides
access to other BANK systems which initiate transactions. BANKs will provide CUSTOMER with a System user
guide and a user number. Each CUSTOMER authorized operator will be provided a unique password. BANKs
assume no responsibility for the accuracy or timeliness of the account information and other financial data supplied
by other financial institutions or third party providers.
CUSTOMER Responsibilities. CUSTOMER will provide all equipment (e. g., telephone, terminals, or computer)
anc software necessary to use the System. BANKs shall have no responsibility for any such equipment or software.
CUSTOMER agrees to use the System solely to conduct its business and agrees to limit access to those employees
who require access to the System. CUSTOMER is responsible for providing System instructions to financial
institutions and third party providers who will input account information into the System. CUSTOMER agrees that
BANK will not be liable for any loss or damage arising, directly or indirectly, in whole or in part from (a) any
inaccuracy or incompleteness in the input of an order or instruction by CUSTOMER, (b) any failure by CUSTOMER
to obtain a confirmation of an order or instruction, or (c) any cancellation or attempted cancellation by CUSTOMER
of zn order or instruction.
INVESTMENT SERVICES
BANKs offer Investment Services by which funds in the amounts specified by CUSTOMER shall be
transferred for investment as directed by CUSTOMER Such Services will be implemented by additional agreement.
BANKs make no representation or warranty as to the suitability or safety in respect to any of the investments made
pursuant to these Services or CUSTOMER's choice of any investments. As long as CUSTOMER's funds are invested
in investments as designated by CUSTOMER,the BANK,its parent and its affiliates, employees, officers or directors
will not be liable to CUSTOMER for any reason whatsoever related to the purchase of any investments for
CUSTOMER. Investment funds are not a deposit obligation of the BANK and are not insured by the FDIC.
LOCKBOX SERVICES
CUSTOMER will direct its customers to forward their remittances to the address designated by BANK.
W;K, acting as CUSTOMER's agent, shall have unrestricted and exclusive access to the mail directed to its post
office box. CUSTOMER agrees it must obtain prior approval from BANK for use of its "business reply" mail
envelopes provided to its customers for their remittances and any non-approved envelopes mailed to the BANK-
designated address may be returned to sender. CUSTOMER agrees to notify BANKs thirty (30) calendar days in
advance of any change in CUSTOMER's remittance statements and/or mailing schedule. CUSTOMER agrees to pay
all fees incurred in opening and maintaining the post office box.
Processing of Items. The processing of checks and other deposited items will be accomplished as agreed to by the
parries. BANK will collect mail from the post office at regular intervals each Business Day. BANK will endorse, on
behalf of CUSTOMER,checks and other deposited items that appear to be for deposit to the credit of CUSTOMER
BANK will process the checks and other deposited items and credit the total amount to CUSTOMER's account at
BANK. Unless otherwise agreed to,while CUSTOMER receives the Lockbox Services, all collected funds held in the
account shall be deemed to be CUSTOMER's funds for all purposes (e.g., adjustment, attachment, execution and
other forms of legal process). The crediting and collection of items will be handled under the same terms and
conditions as applied to other commercial deposits. BANK shall provide remittance documentation to CUSTOMER
as agreed to by BANK.
OFFICIAL CHECKS SERVICES
Third party vendors may prepare official BANK checks on behalf of CUSTOMER Prior to release of the
checks to CUSTOMER, CUSTOMER's account will be charged with the total amount of the official checks as reported
to BANK by the vendor. If CUSTOMER places a stop payment order on an official check, the payee(s) of the check
may subsequently be able to enforce payment of the check. In the event such check is finally paid, CUSTOMER's
account will be charged for the item.
PAYABLE IF DESIRED/PAYABLE AT SERVICES
CUSTOMER agrees to maintain a demand deposit account at BANK and BANK is authorized to charge
returned items where collection on such items cannot be made from the primary drawee bank. The balance to be
held in such demand deposit account will be set by agreement between CUSTOMER and BANK. CUSTOMER's
checks will bear the MICR encoding of the primary drawee bank and will normally flow directly to that bank through
regular transit channels. CUSTOMER agrees to inform the primary drawee bank of CUSTOMER's Payable If
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Desired/Payable At arrangement with BANK. CUSTOMER acknowledges that, upon encashment, payee may be
assessed a fee by BANK.
PAYABLE THROUGH DRAFT SERVICES
CUSTOMER shall maintain on deposit in an account with BANK collected and available funds sufficient to
cover drafts drawn under this Service. All drafts shall be provisionally charged to CUSTOMER's account on the
Business Day of receipt by BANK and such charges shall become final and irreversible, except as to drafts which are
dishonored as provided below. If BANK and CUSTOMER agree to other methods of funding the drafts, CUSTOMER
shall be responsible for compensating BANK for any uncollected funds which may occur and BANK may require
suitable approval and the establishment of daily dollar limits.
Declination of Drafts. BANK shall make available to CUSTOMER drafts presented to BANK. The form and
mariner of presentment to CUSTOMER shall be agreed upon by BANK and CUSTOMER. Photocopies of missing
drafts shall be deemed to be the equivalent of the original of such draft for all purposes. CUSTOMER shall notify
BANK, in a form as agreed to by BANK and CUSTOMER, of each draft upon which payment has been declined by
CUSTOMER. Such drafts will be treated as returned items and returned to the payee. If CUSTOMER does not
specifically decline payment of a draft by the applicable deadline, such draft will be finally paid by BANK.
CUSTOMER acknowledges that drafts payable through BANK are considered to be drawn on BANK for purposes of
the expeditious-return and notice-of-nonpayment requirements of subpart C of Regulation CC of the Federal Reserve
Board. If BANK agrees to return a draft following BANK's deadline, CUSTOMER agrees to indemnify and hold
BANK harmless for BANK's failure to return the draft in an expeditious manner as prescribed in Regulation CC.
Examination of Drafts. BANK will examine drafts only to see that the approved form of drafts is utilized and will
take ordinary care to see that the amount of each draft as drawn is accurately posted to CUSTOMER's account.
BANK will not make any attempt to verify signatures, endorsements or restrictive clauses on drafts. BANK will not
examine the dates on which drafts have been drawn for undated, stale or post-dated drafts.
Encashment of Drafts. CUSTOMER authorizes BANK to pay drafts presented to BANK for encashment by payees.
BANK will not be liable for the encashment of any draft which contains, or is purported to contain, a forged signature
of a maker or endorser, or any other unauthorized modification, as long as BANK exercises ordinary care in paying
the draft.
PC ACH SERVICES
BANK grants to CUSTOMER a perpetual, paid up, non-exclusive and non-assignable license to use the PC
ACH program for the purpose of originating ACH Entries. CUSTOMER will, at its own cost and expense, obtain,
install and, at all times during its utilization of this Service, maintain in good working order all hardware and
equipment necessary for the Service. CUSTOMER shall implement, on a regular basis and not less than weekly,
back-up measures to the Services including, without limitation, copying onto diskette each week's current data base
files. In the event of any failure of hardware or software CUSTOMER will deliver to BANK all data necessary for
BANK to perform its obligations in connection with this Service.
Ownership and Use. CUSTOMER acknowledges that the PC ACH program is the original, confidential, valuable
and proprietary product of Politzer & Haney, Inc. which has licensed the program to BANK with the right to sub-
license to CUSTOMER and that CUSTOMER has only the right to use the program consistent with the terms herein.
CUSTOMER has no right of ownership to the program and may not transfer, copy, alter, modify, reverse engineer,
reproduce or convey in any manner, in whole or in part, the program.
PREFERRED DISBURSEMENT/PAYROLL SERVICES
CUSTOMER shall establish separate commercial checking accounts ("Preferred Accounts") for which BANK
will be designated the primary drawee bank and Affiliates shall be designated as alternate drawee banks. The checks
will be imprinted with the legend "First Interstate Preferred Disbursement" or "First Interstate Preferred Payroll", as
appropriate, and shall bear the MICR encoding of BANK CUSTOMER agrees not to draw any check on its Preferred
Disbursement or Payroll Account in excess of BANK's specified limit. Affiliates have agreed to act as alternate
drawee banks and to cash checks drawn upon the Preferred Accounts or to give immediate credit upon deposit to
payees of CUSTOMER's Preferred Accounts upon presentment of proper identification. If BANK, for any reason,
returns an item unpaid which has been processed by an alternate drawee bank and that bank is subsequently unable
to obtain a refund, CUSTOMER agrees that the item may immediately be charged back against any of CUSTOMER's
accounts with BANK without further notice to CUSTOMER
TAX PAYMENT SERVICES
CUSTOMER appoints BANK to act as CUSTOMER's agent for the purpose of preparing and depositing one
or more of the types of tax payments designated by BANK for the benefit of CUSTOMER on the deposit due date.
The amount of the tax payment shall be determined solely by CUSTOMER BANK shall have no duty to determine
or question the correctness of CUSTOMER's calculations. CUSTOMER authorizes BANK to charge its account for the
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amount of each tax payment initiated by CUSTOMER If CUSTOMER fails to maintain sufficient collected and
available funds in its account, BANK may refuse to perform the Tax Payment Service, report any tax, file any tax
form or pay any related tax for CUSTOMER without prior notice to CUSTOMER
Funds Awaiting Distribution. Upon receipt of instructions from CUSTOMER to make a tax payment(s), BANK
shall immediately charge the account for the amount of such payment(s). The funds will be held by BANK as a
deposit liability to CUSTOMER, not in trust. While so held, the funds may be subject to setoff for the indebtedness of
CUSTOMER to BANK, but are not subject to items drawn on the account. CUSTOMER may rescind its payment
instructions and recover funds held for tax payments to a taxing authority by sending a written notice to BANK so
that it is received by BANK on the Business Day prior to the time BANK would otherwise credit the funds or make
thern available to the taxing authority. BANK shall not be liable to CUSTOMER for failing or refusing to stop
payment of taxes if notice is received later than its deadline.
Customer's Duty to Pay Taxes. CUSTOMER assumes the risk of failure to transmit the data accurately in the
format and form specified by BANK and in a timely manner to BANK. Interruption of performance of the Tax
Payment Service for any reason will not relieve CUSTOMER of its obligation to make any tax payment otherwise
contemplated to be made by the Tax Payment Service, nor shall BANK incur any liability respecting CUSTOMER's
failure to make any required tax payment by other means in the event of such interruption. If CUSTOMER initiates
its instructions to make payment after BANK's applicable deadline, BANK shall have no liability for any penalty
imposed by any taxing authority. BANK's record of CUSTOMER's transmission shall be deemed correct and
complete.
WIRE TRANSFER SERVICES
CUSTOMER shall execute and return the appropriate BANK form(s) designating the person(s) authorized
by CUSTOMER to instruct BANK to make wire transfer instructions (which term shall include Payment Orders,
amendments and cancellations) and otherwise to act on behalf of CUSTOMER ("Authorized Representatives").
Processing Wire Transfer Instructions. Wire transfer instructions received prior to BANK's cutoff deadline on a
Business Day which is recognized by the communications facility selected by BANK and the receiving financial
institution will be processed on the same day. Otherwise, BANK may treat the instruction as received on the next
Business Day.
Rejected and Returned Wire Transfers In the event a wire transfer instruction is rejected for any reason, it shall
be the responsibility of CUSTOMER to remake the instruction. BANK shall have no obligation to retransmit a
retur;,.►ed wire transfer if BANK originally executed it in compliance with the provisions of these Terms and
Conditions. BANK will debit or credit CUSTOMER's account for wire transfers returned to BANK Unless the return
is caused by BANK's failure to properly execute a Payment Order, BANK shall have no obligation to credit
CUSTOMER's account with any interest on the amount of any returned wire transfer BANK has debited from
CUSTOMER's account(s).
Incoming Wire Transfers. BANK has the right to reject any incoming wire transfer, including a transfer from
another account with BANK, for any reason. To the extent permitted by law or system rule, credit to CUSTOMER's
account for an incoming wire transfer is provisional until BANK receives final settlement for such transfer. In the
event final settlement is not received, BANK shall be entitled to a refund of the amount provisionally credited.
ZERO BALANCE ACCOUNT SERVICES
CUSTOMER shall designate its primary demand deposit account as the "Master Account" and its other
accounts as "Subsidiary Account(s)". CUSTOMER authorizes and directs BANK to transfer funds between the
Master and Subsidiary Accounts in order to bring the respective balances of the Subsidiary Account(s) to zero or to
such other predetermined balance as of the close of each Business Day. Notwithstanding any provision to the
contrary in CUSTOMER's Deposit Agreement, CUSTOMER may draw checks against Subsidiary Account(s)
provided that the aggregate amount of all such checks shall not exceed CUSTOMER's collected and available funds
on deposit in the Master Account.
LAD 2001 6/92
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