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right to collect the full amount owed. Customer assumes all risks of negotiation of such items. (b) Bank's receipt of Customer's mail hereunder shall not make Bank a bailee of the Lockbox Items. With respect to the Lockbox Items that are deposited and become part of the balance in Customer's Designated Account, Bank and Customer will have a debtor -creditor relationship as normally exists between a depository bank and its depositors. If Customer is a governmental entity, Customer agrees that, in performing the Services, Bank is not acting as an agent for the collection of taxes. 3.3 Remittance Transaction Processing. 3.3.1 Transactions processed as part of the Services are comprised of two separate documents: the remittance coupon, stub or invoice (hereinafter "Coupon(s)") and the drawer's payment. High- speed image -enabled devices capture Customer's retail remittance documents, including checks and Coupons. Transactions are captured using image -enabled capture devices that collect both financial and non-financial information. The actual document capture requirements are set forth in the Services' Setup Form(s). 3.3.2 Bank will process transactions with (i) one payment and one Coupon, (ii) multiple payments and/or multiple Coupons, and (iii) one or more payments and no Coupon, as specified in the Services' Setup Form(s). Bank will process remittance transactions as set forth in the Services' Setup Form(s). 3.3.3 To accomplish high-speed automated processing, Bank does not examine checks (including, without limitation, any inspection for missing signatures, dates, payees, or endorsements) except as the parties may otherwise be described in the Services' Setup Form(s). Customer agrees that Bank does not assume any responsibility or liability for its failure to discover and forward to Customer items bearing restrictive legends or endorsements (e.g., "paid in full," "final payment" or words of similar meaning). Bank will use a standard endorsement that will be considered Customer's payee endorsement. 3.3.4 Transaction totals are captured and balanced against individual check totals generated and with the Coupon (if applicable) supplied by Customer's client. Full check MICR line capture is supported during the capture process. Once balanced, transactions are released for deposit processing. 3.3.5 As part of the Services, wholesale payments will be imaged, and such payments may be re -associated with the Coupon (if enclosed), to the extent set forth in the Services' Setup Form(s). 4. Deposit Processing. 4.1 Bank prepares items for deposit into Customer's Designated Account. These deposited items are memo posted throughout the Business Day and reflect the amount of items processed. The credit and collection of these items are subject to the terms and conditions of the Account Agreement. 4.2 Bank reserves the right to not process any item received for deposit if Bank decides not to handle that item. If Bank makes this decision, Bank will forward the item to Customer for further handling. 4.3 Transactions processed after Bank's cut-off time or during a non -Business Day will be credited on the next Business Day, as set forth in the Services' Setup Form(s). 5. Insufficient Funds and Returned Items. 5.1 Bank may deduct the amount of an item deposited to the Designated Account or other Account if Bank receives notice that the item has not been paid and has been returned. Returned items are processed in accordance with the Services' Setup Form(s). Returned items that are not re -deposited, or that have been returned a second time, will be debited from the Designated Account or another Account at Bank, as set forth in the Services' Setup Form(s), even if Bank could have made a claim for reimbursement on the item from the bank on which the item was drawn or from another bank. Bank may charge an item against the Designated Account or other Account even if the charge results in an overdraft. 5.2 Bank may incur losses or expenses due to a delay in returning an unpaid item if the item's endorsement is obscured by other material on the back of the item. If an item is issued with material on the back (for example, a carbon band), Customer agrees to indemnify Bank against any related losses and expenses, including any finance charges, legal fees and court costs incurred in Bank's attempt to receive payment on the item. 6. Remittance Reporting. 6.1 Remittance Package. At the end of each Business Day on which Customer has Lockbox activity, Bank may send a remittance package with contents as selected in the Services' Setup Form(s). 6.2 CD-ROM. Bank may create a CD- ROM of images of processed checks and remittance detail, at Customer's request, on a daily, weekly, or monthly basis. If the documents are unable to be imaged, Bank reserves the right to forego scanning and forward the original documents to Customer. Bank has no liability for illegible images created from a damaged or illegible original document, and such original document will be forwarded to Customer, if requested, assuming that such original has not yet been destroyed. 6.3 Electronic Transmission. 6.3.1 Subject to the terms and conditions of and in accordance with Bank's Appendix for Data Transmission Services, remittance data will be HC 4814-6754-1549 Page 38 oj54 0420