Section 1. THE SERVICE.
These Lockbox Service Terms (the “Service Terms”) set forth how Bank will process Checks, cash and other items payable to Customer (collectively, “Payments”) directed to a Lockbox for deposit to Customer’s Account (the “Service”). The Service is also subject to the General Provisions of the Treasury Management Terms and Conditions Agreement (the “Agreement”) as if fully incorporated herein and all Applicable Laws. In the event of a conflict between these Service Terms and other terms in the Agreement, these Service Terms shall control. Unless otherwise defined herein, any capitalized terms shall have the meaning as set forth in the Agreement. Any reference to the Agreement herein shall be deemed to include these Service Terms.
Section 2. IMPLEMENTATION.
Bank and/or Bank’s Service Provider are hereby authorized on Customer’s behalf to rent the number of post office boxes (“Lockboxes”) as mutually agreed are necessary in order to process Customer’s anticipated volume of Payments. Customer authorizes Bank and its Service Provider to act as Customer’s agent with exclusive and unrestricted access to the Lockbox for the purpose of collecting and processing all Payments and other materials contained in the Lockbox (collectively, “Mail”), to make deposits to Customer’s designated Account, and to act on behalf of Customer in accordance with the applicable Operational Instructions. The term “Bank” may be used interchangeably in these Service Terms to refer to both Bank and its Service Provider when used in relation to the receipt and processing of Mail in the Lockbox and otherwise providing the Service as described herein.
Section 3. SERVICE OPTIONS.
Bank offers different Service options based on the needs of the Customer; including:
Wholesale Lockbox – targeted to Customers that receive a low volume of large-dollar business-to-business payments.
Retail Lockbox – targeted to Customer that receives a high volume of low-dollar consumer-to-business payments.
Wholetail Lockbox – targeted to Customer that needs a combination of Retail and Wholesale Lockbox due to the mixed nature of payments received.
Healthcare Lockbox – Healthcare providers interested in healthcare lockbox services should contact their TM sales representative for information regarding this option, which is offered through an unaffiliated third party provider. Customers who enroll in this option will be required to sign an agreement with the third party provider for the healthcare lockbox services and a separate agreement with Bank governing the transmission of data.
Section 4. PROCESSING AND REPORTING.
(a) Timing. Bank will use commercially reasonable efforts to remove all Mail from the Lockbox on each Business Day in accordance with Bank’s then-current mail collection schedule and as updated by Bank from time to time. Mail shall not be deemed to have been received by Bank until the Business Day it has been received by Bank and made available for processing after being picked up by Bank from the designated mail facility, or as applicable, delivered to Bank at the address Bank specifies. If the Mail is made available to Bank for processing on a day that is not a Business Day or after the Cutoff Time on a Business Day, then the Mail will be deemed to have been received and made available for processing on the next Business Day.
(b) Exception Items; Remittance Materials. Bank may refuse to accept any Mail that it deems inappropriate, such as packages or boxes. All Mail that Bank does not accept for deposit or collection will be returned to Customer without further processing using the method designated in applicable Operational Instructions. In addition, remittance material, correspondence and exception items received in the Lockbox, as applicable, may be processed or returned without processing as indicated in the Operational Instructions.
(c) Acceptable Payees. Payments sent to the Lockbox must be payable to Customer or to a payee whose name Customer has provided to Bank (including reasonable variations thereof, an “Acceptable Payee”). Customer represents and warrants to Bank that Customer is duly authorized to receive all payments payable to each Acceptable Payee and to deposit or process the payments into Customer’s Account. Items received in the Lockbox which are not payable to an Acceptable Payee may not be processed.
(d) Check Handling. Customer understands that, unless otherwise agreed by Bank in the Operational Instructions, Bank processes Checks using automated processing equipment and Bank does not manually inspect any Checks received in the Lockbox. Customer acknowledges that the cost of manual processing would be significant, and Customer does not wish to incur such costs. This means that post-dated, stale-dated, undated and unsigned Checks can be processed and deposited. Customer releases Bank from all liability for processing Checks received in the Lockbox that are not properly payable to Customer or another Acceptable Payee, missing signatures or endorsements, contain restrictive endorsements or have other problems. Any Checks that cannot be processed through Bank’s standard procedures will be considered exception items and will be returned to Customer.
(e) Endorsements. Customer irrevocably makes, constitutes and appoints Bank (and all persons Bank designates for such purpose) as Customer’s true and lawful attorney-in-fact to endorse Customer’s name on any Checks received with the Lockbox endorsement used by Bank.
(f) Foreign Checks. Checks drawn on a bank located outside the United States and/or payable in foreign funds (non-U.S. Dollars), when identified during processing, will either be processed on a collection basis or returned without processing, as indicated in the applicable Operational Instructions. Credit will be posted to Customer’s designated Account only upon receipt of paid collections, less all fees and charges.
(g) Cash Handling. Cash payments received in Mail are subject to Bank’s internal procedures for handling cash payments; provided, that Bank assumes no liability for cash sent through the mail. Bank may process or return without processing any cash payments received through the Lockbox, as indicated in the Operational Instructions. Customer authorizes Bank (or its Service Provider) to convert each cash payment received in the Lockbox to a Check and to either deposit that Check into Customer’s Account or return that Check to Customer, as applicable. The processing of cash received from the Lockbox may require an additional charge. Customer agrees that Bank’s count of cash received in the Lockbox is final and conclusive and Bank will not be liable for any shortage or variance for any reason, whether discovered upon initial processing or thereafter. In no event is Customer entitled to any amount in excess of the correct balance of the deposit, regardless of the basis of the error.
(h) Availability of Funds. Unless Bank has provided Customer a separate funds availability schedule for the Service, Bank will make funds available from the Payments received in the Lockbox in accordance with the Deposit Availability Disclosure in Bank’s Rules Governing Deposit Accounts.
(i) Reporting. If available and elected by Customer, Customer may receive from Bank a data file via File Delivery showing lockbox activity as designated in the applicable Operational Instructions. Images may be available through one or more reporting options or upon request, and Bank may destroy the originals if images are reported to Customer.