MASTER TREASURY MANAGEMENT SERVICES … Treasury...Version: 20150601MTMSTD Page 1 of 58 MASTER...

Version: 20150601MTMSTD Page 1 of 58

MASTER TREASURY MANAGEMENT SERVICES AGREEMENT – TERMS AND DISCLOSURES

This Master Treasury Management Services Agreement – Terms and Disclosures (these “Terms and Disclosures”) governs the treasury management relationship between Bank SNB, an Oklahoma state banking corporation (the “Bank”) and the customer identified in the Master Treasury Management Services Implementation Agreement (“Customer”). Bank and Customer are sometimes collectively referred to as the “Parties”. By executing the Master Treasury Management Services Implementation Agreement (“Implementation Agreement”) or using the Services (as defined in Section I.A.1 of these Terms and Disclosures), Customer agrees to be bound by the terms of these Terms and Disclosures, the Implementation Agreement, and any Separate Agreements (as defined in Section I.A.3), and any supplement or Amendment to any of the same. Customer also agrees that the deposit accounts to which the Services apply are governed by the General Terms and Conditions and the disclosure entitled “Terms and Conditions of Your Deposit Account” (the “Account Terms”). Except as otherwise provided herein, where any terms and conditions contained in the Implementation Agreement, or the Account Terms conflict with the terms of these Terms and Disclosures, the terms of these Terms and Disclosures control.

I. GENERAL TERMS AND CONDITIONS

The following general terms and conditions apply to all Services provided by Bank to Customer. Terms applicable to a specific Service are as set forth in the respective Service Terms (as defined in Section I.A.2).

A. DEFINITIONS AND TERMS.

1. Services: One or more treasury management services available to Customer under the

Implementation Agreement and the terms and conditions set forth in these Terms and

Disclosures. (Individually a “Service”). The Bank is under no obligation to permit

Customer's use of any Service. The decision to permit Customer's use of any one or

more Service is within the Bank's sole discretion.

2. Service Terms: Terms and conditions contained in these Terms and Disclosures

applicable to a specific Service as set forth in the Implementation Agreement. The

Service Terms for a specific Service only apply to Customer if Customer has requested

the Service, and Bank has agreed to permit Customer's use of the Service.

3. Separate Agreements: Additional or supplemental agreements or addenda to these

Terms and Disclosures, including but not limited to the Implementation Agreement, that

are required by Bank or third party service providers in connection with the provision of

some of the Services. If Customer is permitted to use a Service that requires a Separate

Agreement, Customer's use of such Service will be conditioned on and subject to

Customer's execution of the applicable Separate Agreement(s) and the Implementation

Agreement.

4. Business Day: Unless otherwise provided in these Terms and Disclosures, or any

Separate Agreement, “Business Day” means Mondays through Fridays, other than Bank

holidays and other than days on which the Bank's principal office may be closed for any

reason prior to 4:00 p.m. Central Standard Time.


5. Access Credentials: The combination of user names, log-in IDs, passwords and other

authentication methods created and used by the Treasury Management System

Administrator, and by Authorized Users managed by the Treasury Management System

Administrator, to access and use one or more of the Services.

6. Authorized User: A person authorized by the Treasury Management System

Administrator to access and use one or more of the Services.

7. The Services to be provided by Bank to Customer under the Implementation Agreement,

any Separate Agreement, and these Terms and Disclosures shall be deemed in all

respects to be a financial accommodation under 11 U.S.C. § 365(c)(2).

8. Any person or entity who signs the Implementation Agreement or any Separate

Agreement as agent for Customer also shall be deemed to be “Customer,” or duly

authorized and empowered to act on behalf of Customer, under the Implementation

Agreement, any Separate Agreement, and these Terms and Disclosures for all purposes.

9. The Services to be provided by Bank to Customer under the Implementation Agreement,

any Separate Agreement, and these Terms and Disclosures shall be deemed in all

respects to be a financial accommodation under 11 U.S.C. § 365(c)(2).

10. Any person or entity who signs the Implementation Agreement or any Separate

Agreement as agent for Customer also shall be deemed to be “Customer,” or duly

authorized and empowered to act on behalf of Customer, under the Implementation

Agreement, any Separate Agreement, and these Terms and Disclosures for all purposes.

B. REPRESENTATIONS AND WARRANTIES OF CUSTOMER. Customer hereby represents

and warrants to Bank as follows:

1. If Customer is a business or commercial entity, Customer is duly organized, validly

existing and in good standing under the laws of the state of its organization or

incorporation and is duly qualified or licensed to do business in each jurisdiction in which

the property related to it is owned, leased or operated by Customer or where the nature

of its business makes such qualification necessary;

2. jurisdiction in which the property related to it is owned, leased or operated by Customer

or where the nature of its business makes such qualification necessary;

3. Customer has the power and authority to enter into the Implementation Agreement, to be

bound by these Terms and Disclosures, and to consummate or cause to be

consummated the transactions contemplated hereby;

4. The consummation of the transactions contemplated hereby have been duly and validly

authorized by Customer and no other corporate or other proceeding on the part of

Customer is necessary to authorize the performance of these Terms and Disclosures;

5. Unless the Bank has expressly consented to utilization of the Services for consumer

purposes, the Services will be used for business or commercial purposes only. The

Services will not be used for any unlawful purpose;

6. All data and funds transfer requests whether by wire, ACH or otherwise, comply with U.S.

laws and do not include transmitting funds to, from, or on behalf of any person, business

or country subject to U.S. sanction or which would in any manner violate the laws,

regulations and Presidential Orders of the U.S.

7. Customer is the owner and/or authorized agent on all accounts subject to the

Implementation Agreement and these Terms and Disclosures.


Customer agrees to provide Bank with such documentation as Bank may reasonably request as evidence of the above representations and warranties.

C. MONTHLY STATEMENTS. Unless otherwise provided in these Terms and Disclosures, or in

any Separate Agreement, Bank shall provide Customer with a monthly statement

summarizing the previous month's account activity for Services rendered hereunder.

D. NO IMPLIED REPRESENTATION. NOTWITHSTANDING ANYTHING IN THESE TERMS

AND DISCLOSURES TO THE CONTRARY, CUSTOMER ACKNOWLEDGES AND AGREES

THAT BANK IS MAKING NO REPRESENTATION OR WARRANTY WHATSOEVER,

EXPRESS OR IMPLIED, IN LAW OR IN FACT, INCLUDING BUT NOT LIMITED TO, THE

IMPLIED WARRANTIES OF MERCHANTABILITY AND OF FITNESS FOR A PARTICULAR

PURPOSE, EITHER TO CUSTOMER OR TO ANY THIRD PARTY WITH RESPECT TO THE

SERVICES OR ANY COMPUTER PROGRAMS, EQUIPMENT OR SOFTWARE USED BY

CUSTOMER IN CONNECTION WITH THE SERVICES.

E. LIMITATION OF LIABILITY; INDEMNIFICATION. EXCEPT AS OTHERWISE PROVIDED IN

THESE TERMS AND DISCLOSURES, OR ANY APPLICABLE SEPARATE AGREEMENT,

AND EXCEPT AS OTHERWISE REQUIRED BY APPLICABLE LAW, BANK'S LIABILITY TO

CUSTOMER IS LIMITED TO DAMAGES ARISING DIRECTLY FROM BANK'S

INTENTIONAL MISCONDUCT OR GROSS NEGLIGENCE IN THE PERFORMANCE OF

THE SERVICES. CUSTOMER RELEASES AND AGREES TO HOLD HARMLESS,

DEFEND, AND INDEMNIFY BANK, ITS DIRECTORS, OFFICERS, EMPLOYEES,

AFFILIATES, CONTROLLING PERSONS, AGENTS, REPRESENTATIVES AND

CUSTOMERS AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS FROM AND

AGAINST ANY AND ALL LIABILITIES, DEMANDS, CLAIMS, ACTIONS OR CAUSES OF

ACTION, ASSESSMENTS, LOSSES, DAMAGES, COSTS AND EXPENSES (INCLUDING,

WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES AND EXPENSES) AND ALL

FINES, PENALTIES AND INTEREST THEREON AS A RESULT OR ARISING DIRECTLY

OR INDIRECTLY OUT OF,: (I) BANK'S ACTS OR OMISSIONS IN CONNECTION WITH

PROVIDING THE SERVICES, IF SUCH ACTS OR OMISSIONS ARE IN ACCORDANCE

WITH CUSTOMER'S INSTRUCTIONS, THE TERMS OF THE IMPLEMENTATION

AGREEMENT, OR THESE TERMS AND DISCLOSURES, (II) ANY BREACH OF

CUSTOMER'S REPRESENTATIONS OR WARRANTIES, OR OTHER ACTS OR

OMISSIONS OF CUSTOMER, INCLUDING, WITHOUT LIMITATION, CUSTOMER'S

VIOLATION OF APPLICABLE LAWS OR REGULATIONS; (III) ANY ACTS OR OMISSIONS

OF THIRD PARTIES (INCLUDING, WITHOUT LIMITATION, OTHER FINANCIAL

INSTITUTIONS, ANY FEDERAL RESERVE BANK, AUTOMATED CLEARINGHOUSES,

AND ANY OTHER THIRD PARTY WITH WHICH BANK MAY CONTRACT IN CONNECTION

WITH THE SERVICES TO BE PROVIDED), IF SUCH ACTS OR OMISSIONS ARE IN

ACCORDANCE WITH CUSTOMER'S INSTRUCTIONS, THE TERMS OF THE

IMPLEMENTATION AGREEMENT, OR THESE TERMS AND DISCLOSURES; AND (IV)

ANY ACT OR OMISSION BY CUSTOMER (OR ANY OF CUSTOMER'S DIRECTORS,

OFFICERS, AGENTS, REPRESENTATIVES, EMPLOYEES, AFFILIATES CONTROLLING

PERSONS, AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS) IN CONNECTION

WITH, OR ANY INTENTIONAL OR UNINTENTIONAL FAILURE BY CUSTOMER (OR ANY


OF CUSTOMER'S DIRECTORS, OFFICERS, EMPLOYEES, AFFILIATES, CONTROLLING

PERSONS, AGENTS AND REPRESENTATIVES AND THEIR RESPECTIVE

SUCCESSORS AND ASSIGNS) TO COMPLY WITH, UTILIZE OR FOLLOW,

INFORMATION SECURITY PROCEDURES AND PROTECTIONS, INCLUDING, WITHOUT

LIMITATION, ANY ACT, OMISSION OR FAILURE RELATED TO ACCESS NUMBER(S),

PASSWORD(S), LOG-IN ID(S), SECURITY TOKENS, SECURITY TOKEN SERIAL

NUMBERS, PERSONAL IDENTIFICATION NUMBER(S), PASSCODE(S) AND ACCOUNT

NUMBER(S) ASSIGNED TO CUSTOMER. CUSTOMER AGREES THAT WHEN

APPLICABLE LAW REQUIRES BANK TO EXERCISE ORDINARY CARE, SUBSTANTIAL

COMPLIANCE WITH THE PROCEDURES ESTABLISHED BY BANK SHALL BE DEEMED

TO CONSTITUTE THE EXERCISE OF ORDINARY CARE, AND CUSTOMER AGREES

THAT OCCASIONAL, UNINTENTIONAL DEVIATIONS BY BANK FROM THE

PROCEDURES SET FORTH HEREIN SHALL NOT BE DEEMED A FAILURE TO

EXERCISE ORDINARY CARE AS TO THE TRANSACTIONS WITH RESPECT TO WHICH

ANY SUCH DEVIATIONS OCCUR. Except as otherwise provided by applicable law, in no

event shall either Party be liable to the other Party for any loss of profits, incidental, special,

indirect, exemplary, consequential or punitive damages. Under no circumstances will either

Party be responsible for any delay or failure to act in connection with the Implementation

Agreement and these Terms and Disclosures if the failure or delay is due to circumstances

beyond its control including without limitation: strikes or lockouts; fire or other casualty; risk or

civil commotion; acts of war or terrorism; windstorms, earthquakes, floods or other acts of

God; delay in transportation; government regulation or interferences; interruption or delay in

the Internet, telecommunication or third party services; failure of third party software or

hardware, or inability to obtain raw materials, supplies, or power used in equipment needed

for the provision of the Services. Customer shall promptly examine all reports and statements

of accounts subject to the Implementation Agreement and these Terms and Disclosures and

shall notify Bank immediately in the event of an error or discrepancy. If Customer fails to

notify Bank within thirty (30) days from the date of the statement in which the error or

discrepancy is noted, Bank shall not be liable to Customer for any losses arising from such

error or discrepancy. With respect to any other matter, Customer may not assert a claim

against Bank arising in connection with the Implementation Agreement and these Terms and

Disclosures more than one (1) year after the occurrence of the event which gives rise to such

claim. The rights and obligations of Customer and Bank under this Section I.E shall be in

addition to and not in limitation of the rights and obligations of Customer and Bank under

other sections of these Terms and Disclosures.

F. CORPORATE SOURCE OF STRENGTH. If Customer is a commercial entity, Customer and

Customer’s parent company agree that any liability which it may incur relating to its treasury

management relationship with Bank under the Implementation Agreement, these Terms and

Disclosures, and/or any Separate Agreement, shall also be the legal responsibility of its

parent company (if any). Accordingly, Customer’s parent company shall be legally liable for

any and all of Customer’s indebtedness to Bank arising from its treasury management

relationship with Bank and shall be obligated to provide all necessary financial resources to

Customer to ensure that Customer meets all of its legal and financial responsibilities to Bank.

Bank shall have full legal recourse against parent company for its failure to do so. For


purposes of this section, the term “parent company” is defined as any company that controls,

either directly or indirectly, the Customer.

G. USER ADMINISTRATION. Customer is advised that certain Services may be provided by

way of the Internet using the Bank's on-line Treasury Management System or other software

provided by Bank or its third party service providers. In order to access the Bank's on-line

Treasury Management System and/ or access certain Services, Customer must utilize the

Implementation Agreement to designate a person or persons who will be responsible for

system administration and all access approval rights within Customer's organization (the

“Treasury Management System Administrator”). Customer’s access to Data related to the

software required to obtain the Services shall be governed exclusively by Customer’s

designated Treasury Management System Administrator. A Treasury Management System

Administrator may be designated to one or more Services. This Treasury Management

System Administrator may be granted management and administrative rights including the

right to (1) receive notices from Bank (2) administer the use of designated Services among

Authorized Users, (3) add or remove Authorized Users from time to time to preserve the

security and integrity of its Data, (4) provide such Authorized Users with Access Credentials,

and to determine what rights an Authorized User has with respect to Data and the Services

software, and (4) reset passwords. Bank may rely on the instructions of the Treasury

Management System Administrator designated by Customer. Customer acknowledges and

agrees that Customer is solely responsible for determining the authority and limits for

Authorized Users with access to the Services. Certain features for enhancing the security of

Customer's information are made available to Customer. These include the use of passwords

or log-in IDs and approval levels for the type of task performed. It is Customer's responsibility

to use these features and to protect the confidentiality of passwords and log-in IDs. Customer

agrees to immediately contact Bank if Customer learns of any breach in security, including

without limitation, the loss or theft of any password or log-in ID, or any unauthorized use of

any of Customer's passwords or log-in IDs, and if Customer has reason to believe that the

Access Credentials of the Treasury Management System Administrator(s) or its Authorized

Users have been lost, stolen, used without the proper authorization, or otherwise

compromised. If Customer fails to immediately notify Bank of any breach in security,

Customer agrees that Bank shall not be liable for any losses resulting from Customer's failure

to give such notice. Customer’s access to and use of the software required to obtain the

Services shall be for Customer’s internal business use only and may not be used by

Customer for the benefit of any third party.

H. CUSTOMER'S ACCESS CREDENTIALS. Customer accepts full responsibility for the

confidentiality and security of each Authorized User's Access Credentials. Customer agrees

that its Treasury Management System Administrator will use industry best practices in

creating, assigning, using and storing Access Credentials. Customer agrees that it is solely

responsible for all activities and transactions conducted with the software required to utilize

the Services through the use of Access Credentials or by the Treasury Management System

Administrator(s) or Authorized Users. Customer further agrees to immediately notify Bank if

the Authorized Signer or any Treasury Management System Administrator leaves the

employment of Customer or if their access to the foregoing software should be terminated for


any other reason. Any such notifications shall be sent to the following email address:

[email protected]. Bank shall not be responsible for any loss or liability

suffered by Customer or any third party in the event a person who is not an Authorized User

uses an Authorized User’s Access Credentials.

I. SECURITY. Access to the Bank's on-line Treasury Management System and certain

Services require that Customer receive and transmit data, information, orders and

instructions (including, without limitation, instructions to transfer, transmit, pay or remit funds)

via connection or remote computers over telephone lines. Customer acknowledges that data

including e-mail, electronic communications and confidential financial data and information,

may be accessed by unauthorized third parties when communicating to Bank using the

Internet or other network or dial-up communications facilities, telephone or any other

electronic means. By using the Internet in connection with the Services or to otherwise

communicate with Bank, Customer is assuming the risk that viruses, Trojan horses, worms,

or other harmful components may be transmitted to Customer. Customer agrees to install

and utilize on its system commercially reasonable antivirus and/or similar software or use

other appropriate protections. BANK DOES NOT WARRANT THAT THE SERVICES, ANY

REPORT GENERATED IN CONNECTION WITH THE SERVICES, OR THE SERVERS OR

OTHER PROPERTY THAT ARE USED TO PROVIDE THE SERVICES AND ANY

REPORTS WILL BE FREE OF VIRUSES OR OTHER HARMFUL COMPONENTS. With

respect to Internet access to the Bank's on-line Treasury Management System, Customer

agrees to use software produced by third parties, including, but not limited to “browser”

software that supports a data security protocol compatible with the protocol used by Bank.

Until notified otherwise by Bank, Customer agrees to use software that supports the secure

socket layer (“SSL”) protocol or other protocols accepted by Bank and follow Bank's log-on

procedures that support such protocols. Customer acknowledges that Bank is not

responsible for: (i) notifying Customer of any upgrades, fixes or enhancements to any such

software; or (ii) any compromise of data transmitted across computer networks or

telecommunications facilities, including, but not limited to, the Internet. With the exception of

applications commonly known as web browser software, or other applications formally

approved by Bank in writing, Customer agrees not to use any software, program, application

or any other device to access or log on to Bank's computer systems, web site or proprietary

software or automate the process of obtaining, downloading, transferring or transmitting any

data or information to or from Bank's computer systems, web site or proprietary software. In

the event of any system failure, Bank reserves the right to require additional documentation,

including written authorization via facsimile from the Treasury Management System

Administrator before accepting any order reinstating Customer's access to the Bank's online

Treasury Management System. Customer assumes full responsibility for its selection of,

access to, and use of Services obtained from Bank as indicated in the Implementation

Agreement. Customer shall be solely responsible for educating and supervising its Treasury

Management System Administrator (s) and Authorized Users with respect to the risks of,

vishing, smishing, tabnabbing, tailgating, baiting, keystroke logging and similar social

engineering schemes used to circumvent the proper authentication of Treasury Management

System Administrator or Authorized Users. Customer shall also be responsible for the

confidentiality, maintenance, and use of its financial information, and of any access number


(s), password(s), log-in ID(s), security tokens, security token serial numbers, personal

identification number(s), passcode(s) and account number(s) assigned to Customer. If

Customer requires more than one authorized signer's signature or authorization to conduct

certain transactions related to Customer's account(s) or the Services, this requirement will be

deemed solely for Customer's own purposes. Bank will not be liable to Customer as long as

at least one authorized signer's signature appears on Customer's checks, drafts, instructions,

or orders, or if Bank's records indicate that a transaction, payment or other product use was

made by or on behalf of one authorized signer. This includes situations in which Customer

has provided its access number(s), password(s), log-in ID(s), security tokens, security token

serial numbers, personal identification number(s), passcode(s) and/or account number(s) to

someone else to use. Customer agrees not to hold Bank liable for following Customer's

written orders or instructions (including, without limitation, instructions to transfer, transmit,

pay or remit funds) or for data and information transmitted to Bank by or for Customer,

including, without limitation, orders, instructions, data and information transmitted to Bank

using Bank designated transfer methods and protocols. Customer agrees not to hold Bank

liable for any damages of any kind resulting from Customer's disclosures of its access

number(s), password(s), log-in ID(s), security tokens, security token serial numbers, personal

identification number(s), passcode(s) and/or account number(s) to any person identified or

not identified in the Implementation Agreement. Customer will be responsible for all orders

and instructions (including, without limitation, instructions to transfer, transmit, pay or remit

funds) entered and data and information transmitted through and under Customer's access

number (s), password(s), log-in ID(s), security tokens, security token serial numbers,

personal identification number(s), passcode(s) and/or account number(s), and any orders or

instructions (including, without limitation, instructions to transfer, transmit, pay or remit funds)

so received by Bank will be deemed to have been received from Customer. All data,

information, orders and instructions (including, without limitation, instructions to transfer,

transmit, pay or remit funds) shall be deemed to be made at the time received by Bank and in

the form received. Customer agrees to immediately notify Bank if Customer learns of:

1. any loss or theft of Customer's access number(s), password(s), log-in ID(s), security

tokens, security token serial numbers, personal identification number (s), passcode(s)

and/or account number(s);

2. any unauthorized use of any of Customer's access number(s), password(s), log-in ID(s),

security tokens, security token serial numbers, personal identification number(s),

passcode(s) and/or account number(s), or of the electronic Services or any information;

3. any receipt by Customer of confirmation of an order that Customer did not place, or any

similarly inaccurate or conflicting report or information; or any other breach of security.

J. OUT-OF-BAND AUTHENTICATION AND ONE TIME PINS. In order for Customer to use

certain Services contained herein, Bank may, in its sole discretion, require Customer to

successfully authenticate itself through various Out Of Band Authentication (“OOBA”)

procedures, including but not limited to delivery of a One Time PIN (“OTP”). Delivery of the

OTP may be made in any manner determined by the Bank, including but not limited to by a

phone call, text message, or e-mail. Bank shall make one or more delivery methods

available to Customer, in Bank’s sole discretion. Customer shall choose on or more delivery

methods from those made available by the Bank to the Customer. Customer agrees that it


shall be responsible for and retain complete control over maintaining correct and updated

phone numbers and e-mail addresses for delivery of the OTP. Customer represents that it is

the legal owner or authorized user of the phone or mobile device Customer uses to receive

out-of-band authentication messages and that Customer is authorized to approve the

applicable charges. Customer also represents that all the information Customer provides to

Bank in connection with the Services, including Customer’s email address and phone

number, are accurate, current, and complete, and that Customer has the right to provide such

information to Bank for using the Services. Customer agrees not to misrepresent its identity

or its account information. Customer hereby grants Bank its express consent permitting Bank

to contact Customer as necessary to provide the Services. Such activities may include, but

are not limited to undertaking fraud prevention by sending one-time PINs via text message, e-

mail message, and/or phone call, regardless of the registration of Customer’s phone number

on any state or federal do not call list. Bank is not obligated to use out-of-band authentication

or one time PINs and will not be liable for failure to do so. Bank will not be liable for any

delays or failures in Customer’s receipt of any text messages as delivery is subject to

effective transmission from Customer’s network operator and processing by Customer’s

mobile device. Text message services are provided on an “as is” basis. Data obtained from

Customer in connection with text message out-of-band authentication may include

Customer’s phone number, mobile phone number, Customer’s wireless carrier's name, and

the date, time, and content of Customer’s messages and other information that Customer

may provide. Bank may use this information to contact Customer and to provide Services

under these Terms and Disclosures, and to otherwise operate, develop, and improve the

Services. Customer’s wireless carrier and other service providers may also collect data from

Customer’s text message usage, and their practices are governed by their own policies. Bank

will only use the information Customer provides to the Service to transmit Customer’s text

message or as otherwise described in these Terms and Disclosures. Nonetheless, Bank

reserves the right at all times to disclose any information as necessary to satisfy any law,

regulation, or governmental request, to avoid liability, or to protect Bank’s rights or property.

When Customer completes forms online or otherwise provide Bank information in connection

with the Service, Customer agrees to provide accurate, complete, and true information.

Customer understands and agrees it is still subject to the terms and conditions of any

agreement Customer has with any unaffiliated third-party service providers, including, but not

limited to Customer’s mobile service provider (e.g., AT&T, Verizon, Sprint, T-Mobile, etc.) and

these Terms and Disclosures do not amend or supersede any of those separate third-party

service provider agreements. Customer understands that such Services may provide for fees,

charges, limitations and restrictions which might impact Customer’s use of the Services (e.g.,

data use charges, etc.), and Customer agrees to be solely responsible for all such fees,

charges, limitations and restrictions. Customer should contact its wireless carrier for

information about Customer’s messaging plan. Customer’s wireless carrier may impose

message or charge limitations on Customer’s wireless account that are outside of Bank’s

control. All charges are billed by and payable to Customer’s wireless carrier. Customer

agrees that only Customer’s phone service provider or mobile service provider is responsible

for the performance and operation of its products and services, including Customer’s phone

service, mobile device and the mobile service provider’s own network. Customer agrees to


resolve any problems with its phone service provider or mobile service provider without

involving Bank.

K. THIRD PARTIES. Bank may contract with third party service providers or other parties with

respect to one or more of the Services or the provision of a Service or parts thereof. To the

extent applicable to Customer and made known to Customer, Customer, agrees to comply

with the requirements of the contracts between Bank and such third parties relative to the

Services. Bank may refer Customer to third parties for the provision of products or services

not offered by Bank. Customer acknowledges and agrees that such third parties are not

affiliated with or endorsed by Bank. Customer further agrees that Bank does not guarantee

such products or services and is not liable for the actions or inactions of any such third party.

L. THIRD PARTY NETWORKS. Bank's ability to provide certain Services is dependent upon its

ability to obtain or provide access to third party networks. In the event any third party network

is unavailable, or Bank determines, in its discretion, that it cannot continue providing any third

party network access, Bank may discontinue the related Service or may provide the Service

through an alternate third party network. In such circumstances, Bank will have no liability for

the unavailability of access. Customer expressly agrees that Bank may utilize third party

vendors that are located outside of the United States and, accordingly, Customer’s

information may be transmitted, processed or stored outside of the United States. In no event

will Bank be responsible for any services or equipment that Customer receives from third

party vendors.

M. USER AND TRAINING GUIDES. Bank may provide Customer with User Guides, Training

Guides, or other operating procedures (the “User Guides”) in connection with certain

Services. Customer agrees to: (1) comply with the User Guides that Bank provides to

Customer; and (2) take reasonable steps to protect the confidentiality and security of the

User Guides and any other proprietary property or information that Bank provides to

Customer in connection with the Services.

N. IMPORTANT DISCLAIMER AND INTELLECTUAL PROPERTY NOTICES. Bank endeavors

to provide Customer with the highest quality of treasury management Services available.

However, due to the unpredictable nature of the Internet, occasional inaccessibility to these

products should be expected. Additionally, Bank cannot and does not guarantee the

completeness or accuracy of the information provided herein. Bank reminds Customer that

the Internet lacks inherent security for commercial transactions and therefore Bank cannot

and does not guarantee that downloads from the Bank’s web site or the web site of any of

Bank’s Services will not contain a virus or other destructive device. Additionally, Customer

provides, requests, and receives information from these web sites with the knowledge that

such information can be intercepted and/or viewed by unknown third parties. Bank’s

Services, including software utilization and brand product names, are subject to applicable

trademark, copyright, patent, trade secret, trade dress, service marks and other worldwide

intellectual property rights, and Customer expressly agrees not to infringe upon or violate the

intellectual property rights of their respective owners or other third party rights associated with

the intellectual property rights. Bank reserves the right to terminate Customer’s access to the


Services, in the event Customer infringes on any intellectual property rights of third parties.

Bank also reserves the right to remove any user content or any other material posted by a

user that is alleged to infringe upon the intellectual property rights of others. Features and

services availability are subject to change without notice.

O. DISPUTE RESOLUTION. In the event of any disagreement hereunder, or if conflicting

demands or notices are made upon Bank relating to the Implementation Agreement, any

Separate Agreement or any account subject to these Terms and Disclosures, Bank may, at

its option, refuse to comply with any claims or demands on it or refuse to take any other

action hereunder with regard to the subject matter of the dispute, so long as such dispute

continues; and in any such event, Bank shall not be, nor shall it become, liable to any person

for its failure or refusal to act, and Bank shall be entitled to continue to so refrain from acting

until: (i) the rights of all parties shall have been fully and finally adjudicated; or (ii) all

differences shall have been adjusted and all doubt resolved by agreement among all of the

interested persons. The rights of Bank under this paragraph are cumulative of all other rights

which it may have at law or otherwise.

P. EQUITABLE RELIEF; WAIVER OF JURY TRIAL; ARBITRATION. Customer and the Bank

shall have the right to apply to a court to enjoin any breach of this contract. For such

purpose, Customer and Bank hereby consent to the jurisdiction of Oklahoma state courts and

federal district courts located in Oklahoma County, Oklahoma. Each of Bank and Customer

hereby waive its right to trial by jury in respect of any dispute involving the other party hereto.

Excepting the right of Customer and Bank to seek equitable relief in court, all claims and

matters in question arising out of or related to the Implementation Agreement, these Terms

and Disclosures, or the relationship between Customer and the Bank created by the

Implementation Agreement, whether sounding in contract, tort or otherwise, shall be resolved

by binding, self-administered arbitration pursuant to the Commercial Arbitration Rules of the

American Arbitration Association (“AAA”), and all such proceedings shall be subject to the

Federal Arbitration Act. There shall be three arbitrators. Customer and the Bank shall each

designate an arbitrator, who need not be neutral, within 30 days of the notification of either

party's intent to proceed with arbitration. The two arbitrators so designated shall elect a third

arbitrator. If either Customer or the Bank fails to designate an arbitrator within the time

specified or the two parties' arbitrators fail to designate a third arbitrator within 30 days of

their appointment, the remaining arbitrator(s) shall be appointed by the AAA. The arbitrators

shall decide whether a particular dispute is or is not arbitrable. Customer and the Bank shall

pay for the expenses incurred by its designated arbitrator and the costs of the third, neutral

arbitrator shall be divided between Customer and the Bank. Only damages allowed pursuant

to this contract may be awarded and arbitrators shall have no authority to award punitive or

exemplary damages, Customer and the Bank hereby waiving their right, if any, to recover

punitive or exemplary damages, either in arbitration or in litigation. The arbitration shall take

place in Oklahoma City, Oklahoma. Any party that desires to enforce any arbitration award

granted hereunder may seek enforcement of the arbitration award only in, and such award

shall be enforceable only by, Oklahoma state courts or federal district courts located in

Oklahoma County, Oklahoma.


Q. STOP PAYMENTS. Customer may request to stop payment on any check, draft, or ACH

transaction, and shall hold Bank harmless and indemnify Bank from any expenses or costs in

connection with Bank's refusing payment as instructed. Stop payment orders shall be

governed by, and Customer shall comply with, the applicable provisions of the Oklahoma

Uniform Commercial Code. Bank must receive stop payment orders before it has accepted,

certified, made final payment on or otherwise become accountable for the item or order, and

in time for reasonable action by Bank, and Customer must describe the item or order with

certainty. A stop payment will be effective for six months. Bank will charge a fee for each stop

payment order at agreed upon pricing. A request for a continuation on a stop payment order

is considered a new stop payment order resulting in an additional stop payment fee. The

continuation of a stop payment order must be requested prior to the expiration of the existing

stop payment order. Bank may accept a stop payment order from any authorized signer on

the Account, regardless of who signed the original item or initiated the original order, and

Bank will not be liable for such a stop payment request. A release of the stop payment

request must be made in writing by the person who requested the stop payment. Before

requesting a stop payment, Customer shall (a) determine whether the check, draft, or ACH

transaction or item has been paid, (b) verify for accuracy all data requested by Bank in

connection with the stop payment order, and (c) retain all information regarding stop payment

orders for at least six months from the date of each requested stop payment. A stop payment

request may be communicated to Bank in following ways:

1. Written Request: Customer may make a stop payment request in writing. Customer's

request must be received before 4:00 p.m. Central Standard Time, to be effective the

next Business Day.

2. Oral Request: Customer may also make an oral stop payment request. Bank will mail a

notice of the stop payment request that was placed to Customer. Customer must contact

the Bank within 14 calendars days from the date of the notice if any information in the

notice is incorrect, or if the Customer wishes to withdraw the request.

3. Electronic Request Transmitted via Bank's On-Line Treasury Management System:

Customer may also make a stop payment request through use of the Bank's on-line

Treasury Management System. Stop payment requests made via the Bank's on-line

Treasury Management System shall be considered written stop payment requests. A stop

payment request made on the Bank's on-line Treasury Management System before 4:00

p.m. Central Standard Time, will be effective on the next Business Day it is made.

Regarding checks, Customer may submit a single stop payment request or submit a stop

payment request on a range of checks through the Bank's on-line Treasury Management

System. Regarding ACH transactions, Customer may submit a stop payment request as

a one-time request or as a re-occurring request, and Customer must indicate such when

submitting the stop payment request. If Customer fails to indicate if the stop payment

request is a one-time request or a re-occurring request, the request will be treated as a

one-time request.

R. PAYMENT AND CHARGES. Customer agrees to pay all fees and charges owed to Bank

under the Implementation Agreement, these Terms and Disclosures, the Separate

Agreements, if any, and the Account Terms as such amounts become due. The Bank’s Fees

for Services are reflected at: http://www.banksnb.com/, the Implementation Agreement,


and/or proformas provided by Bank to Customer. Customer acknowledges and agrees that

special or additional services performed by Bank at Customer's request may be subject to

additional terms and fees as Customer and Bank may agree. Customer shall maintain a

balance of collected funds in the various accounts subject to the Implementation Agreement,

these Terms and Disclosures, and any Separate Agreements sufficient to cover its payment

obligations to Bank hereunder, and Bank shall be entitled to debit each respective account for

payment of such charges. If at any time there are insufficient funds in the subject accounts to

pay amounts owed, Bank may, but is not obligated to, notify Customer and provide Customer

a reasonable period of time within which to deposit sufficient funds. If sufficient funds are not

deposited, Bank shall debit the subject accounts, or any other of Customer's accounts

maintained with Bank, into overdraft, and charge Customer an overdraft fee. Customer shall

repay any amounts so debited, including any overdraft fee and other costs of collection,

immediately upon demand. Any amounts debited by Bank which result in an overdraft to any

account subject to the Implementation Agreement, any Separate Agreement, and these

Terms and Disclosures, shall bear interest at eighteen percent (18%) per annum or the

maximum rate permitted by applicable law, whichever rate is lower. Bank shall not be liable

for any damages to Customer resulting from action taken by Bank under this provision. In

addition to any other remedy in law or equity, Bank may suspend or terminate Services if

Customer fails to pay any fees or charges when due, and Customer agrees to hold Bank

harmless and indemnify and defend Bank from and against any claim, damage, loss, liability

and cost arising from such suspension or termination of Services. In addition to the Services

fees, Customer agrees to pay for all taxes, tariffs and assessments levied or imposed by any

government agency in connection with the Services, the Implementation Agreement, any

Separate Agreement, these Terms and Disclosures, and/or the software or equipment used

by Customer (excluding any income tax payable by Bank). Customer is also responsible for

the costs of any communication lines and any data processing charges payable to third

parties.

S. EQUIPMENT. Customer shall be responsible for providing, maintaining, and bearing all costs

of all equipment located on Customer's premises that is necessary for using the Services,

with the exception of the Bank provided remote check capture scanning device(s).

Equipment includes without limitation, telephones, terminals, modems, computers and

computer software. Bank assumes no responsibility for defects or incompatibility of any

computers or software that Customer uses in connection with the Services.

T. SYSTEM REQUIREMENTS. The current system requirements for use and operation of the

various Services can be found at https://www.banksnb.com. Customer understands and

acknowledges that the system requirements may change from time to time without notice by

Bank to Customer and that Customer is responsible for ensuring that they meet the

requirements. Bank is not responsible for delivering a Service if the current system

requirements are not met by Customer.

U. NO INTERNET GAMBLING. The Unlawful Internet Gambling Enforcement Act of 2006

(“UIGEA”) prohibits any person engaged in the business of betting or wagering from

knowingly accepting payments in connection with the participation of another person in


unlawful Internet gambling. Bank does not offer commercial account services to businesses

that engage in Internet gambling activities or that process transactions related to Internet

gambling activities. BANK PROHIBITS CUSTOMER FROM USING ANY ACCOUNT AT THE

BANK TO PROCESS ANY TRANSACTION RELATED TO INTERNET GAMBLING

ACTIVITIES AND RESERVES THE RIGHT TO TERMINATE ALL ACCOUNTS OF

CUSTOMER AT THE BANK, WITHOUT NOTICE, IF CUSTOMER VIOLATES THIS

PROHIBITION.

V. APPLICABLE LAW. This treasury management relationship between Customer and Bank

under the Implementation Agreement, any Separate Agreement and these Terms and

Disclosures shall be governed by and interpreted in accordance with the laws and regulations

of the State of Oklahoma (without regard to conflicts of law principles) and applicable federal

law, rules and regulations.

W. CONFIDENTIAL INFORMATION. The Services constitute Proprietary and Confidential

Information (as such term is defined below) of Bank or Bank's licensors, vendors, or ACH

third party service providers. Customer will not acquire any rights in the Services by virtue of

using such Services or otherwise. Customer shall not (1) make use of the Proprietary and

Confidential Information, or that of Bank's licensors, vendors, or ACH third party service

providers, other than as may be necessary to use a Service and then such use shall be

limited to that purpose for only so long as Customer uses the Service, or (2) disclose, divulge,

distribute, publish, reproduce or transfer Bank's Proprietary and Confidential Information, or

that of its licensors, vendors, or ACH third party service providers except to persons who

require access for Customer's use of the Services, or as required by law. Customer shall

protect the confidentiality of Bank's Proprietary and Confidential Information (using in any

case, not less than the efforts Customer uses to protect its own confidential information and

no less than a reasonable degree of care), and prevent any access to or reproduction,

disclosure or use of any of the Proprietary and Confidential Information. Customer shall not

modify, dissemble, decompile or create any derivative works from the Proprietary and

Confidential Information or create, design, manufacture, offer or sell any products or services

incorporating any Proprietary and Confidential Information. For purposes of the

Implementation Agreement and these Terms and Disclosures, “Proprietary and Confidential

Information” means any and all agreements, documents, data, records and other information

with respect to the Services, including the terms of the Implementation Agreement, any

Separate Agreement, and these Terms and Disclosures, fees charged for the Services, User

Guides, software and software licenses relating to the Services, user identification,

passwords, codes, keys, security devices, policies and procedures, embedded algorithms,

and other similar devices and information relating to the Services. Confidential and

Proprietary Information does not include information relating to the Services which is

generally available and known to the public and its availability was not the result of wrongful

or improper disclosure by Customer. Customer acknowledges that any unauthorized use or

disclosure of any Proprietary and Confidential Information would be likely to cause immediate

and irreparable damage to Bank and its Affiliates that could not be fully remedied by

monetary damages. Therefore, in addition to any other rights Bank may have at law or under

the Implementation Agreement, any Separate Agreement or these Terms and Disclosures,


Customer agrees that Bank may specifically enforce the Implementation Agreement, any

Separate Agreement, and these Terms and Disclosures, and may seek such injunctive or

other equitable relief as may be necessary or appropriate to prevent such unauthorized use

or disclosure of Proprietary and Confidential Information, without the necessity of posting a

bond or proving actual damage by reason of any such breach or threatened breach of the

Implementation Agreement or these Terms and Disclosures.

X. DOCUMENTATION; OBLIGATION TO MAINTAIN RECORDS. Customer agrees to execute,

in a form and content satisfactory to Bank, any and all documentation required by Bank to

obtain and continue to receive Services. Customer also agrees to provide Bank with any and

all information and documentation reasonably requested by Bank to perform its obligations

under the Implementation Agreement, these Terms and Disclosures, and any Separate

Agreements, and to comply with applicable provisions of law or regulation, including without

limitation, the USA PATRIOT Act and its implementing regulations. Information and

documentation requested by Bank may include, without limitation, information regarding

Customer's financial condition, business operations and the nature and capability of

equipment owned and maintained by Customer for the purposes of accessing the Services.

Bank's performance of each Service hereunder is conditioned on Bank's receiving all data

and information it requires, in substance, form and quality and within the time frame required

by Bank or its third party service providers. In the event that required data or information is

not so provided, then (i) Bank will not be bound by any performance or delivery schedules set

forth herein, (ii) Bank may charge additional fees as appropriate, (iii) Bank may return

improper or incomplete information or data, and (iv) any services, reports, or information that

are delivered by Bank will be considered to be complete. Notwithstanding the Bank's

provision of Services hereunder, Customer remains obligated to maintain, in accordance with

applicable law, clearinghouse rules and contracts and agreements, including these Terms

and Disclosures, records, documents, data and information necessary for review and audit by

and reporting to Bank and all other applicable parties.

Y. SEVERABILITY. If any provision of any Separate Agreement or these Terms and Disclosures

is held to be invalid, illegal or unenforceable, such provision shall be deleted and the

remainder of the Separate Agreement and/or these Terms and Disclosures shall be enforced

as if such invalid, illegal, or unenforceable provision had never been contained herein.

Z. TERMINATION. Unless otherwise provided in any specific Service Terms or Separate

Agreement, the Parties may terminate the Implementation Agreement, with or without cause,

at any time with not less than 30 days' prior written notice. The Implementation Agreement

may be terminated immediately by Bank without notice to the Customer: (i) if required by law,

including without limitation, the USA PATRIOT Act; (ii) if Customer fails to comply with the

terms of these Terms and Disclosures; (iii) if Customer fails to pay when due any of the fees

provided for in these Terms and Disclosures, or any other agreement with the Bank; (iv) if

any Customer account subject to the Implementation Agreement or these Terms and

Disclosures is closed for any reason or is made the subject of a levy or garnishment,

attachment or similar process; (v) if any arrangement between Bank and any other entity

required to provide the Services under the Implementation Agreement, any Separate


Agreement, or these Terms and Disclosures, including but not limited to, any Federal

Reserve Bank, is terminated; (vi) a payable item or a credit posting item, as the case may be,

has been returned due to incorrect or incomplete information given by Customer to Bank

regarding the payable item or credit posting item; (vii) an otherwise unauthorized ACH debit

item has been paid or an otherwise unauthorized ACH credit item has been accepted due to

incorrect or incomplete information given by Customer to Bank regarding the item; (viii) there

exists facts or circumstances that support the reasonable conclusion that Bank or Customer

is or may be subject to losses for fraud, other illegal activity, mistake, negligence, or the

communication of erroneous information arising from the actions of Customer or any third

party, including Customer’s employees or agents; may be unable in any respect to comply

with these provisions; (ix) the Customer fails to maintain adequate collected and available

balances to cover all transactions, costs and expenses relating to one or more Service(s); (x)

there is an occurrence of a material change in the Customer’s credit and/or risk analysis

criteria as determined by the Bank in its sole and absolute discretion; (xi) the Bank at any

time determines that the Customer does not meet the Bank’s risk or other qualification

requirements; or (xii) the Customer has selected a particular Service, but Customer has not

used such Service for a period of time deemed to constitute an inactive Service by Bank (in

Bank’s sole discretion). Termination of the Implementation Agreement subject to these Terms

and Disclosures will not affect any obligations or rights of the Parties which accrued prior to

termination. The provisions of Sections I.D, I.E, I.O, I.Q and I.R of these Terms and

Disclosures shall survive said termination.

AA. MODIFICATION/AMENDMENT. Bank shall notify Customer of any material modification or

amendment made to the Implementation Agreement, any Separate Agreement or these

Terms and Disclosures by any means and as soon as practically possible. Notwithstanding

anything herein to the contrary, except as required by law, Bank reserves the right to

increase or decrease any fee(s) for Services at any time without notice to Customer. Bank

may further modify any terms, conditions or operating procedures under the Implementation

Agreement, any Separate Agreement or these Terms and Disclosures without prior notice to

Customer, including any of the Services Terms incorporated herein, where an immediate

change is necessary to maintain or restore the security of Customer's accounts or the funds

transfer system. In the latter case, Bank shall provide Customer with a notice of change in

terms as soon as possible thereafter either by way of tangible or electronic means.

Customer's continued use or receipt of Services shall evidence Customer's acceptance of

such amended terms.

BB. NON WAIVER. Bank's waiver of any breach or failure to enforce any of the terms or

conditions of any Separate Agreement or these Terms and Disclosures at any time shall not

in any way affect, limit or waive Bank's right thereafter to enforce strict compliance with every

term and condition hereof. Customer may be obligated to Bank under certain loan

agreements and related instruments (the “Loan Documents”). Conflicts, if any, between the

provisions of the Loan Documents and the provisions of any Separate Agreement or these

Terms and Disclosures shall be resolved in favor of the Loan Documents.


CC. NOTICE; COMMUNICATIONS. Except as otherwise noted in any Separate Agreement or

these Terms and Disclosures, all notices required or permitted under said documents shall be

in writing and shall be deemed to have been given when delivered by hand, via confirmed

telecopy, or when mailed by United States mail, registered mail or certified mail, return

receipt requested. Notices to Customer may be mailed or delivered to the Customer's

statement, email or mailing address as reflected on the Bank's system of record, may be

posted within the Bank's online Treasury Management System, Third-Party provided

software or any combination of the foregoing notification methods. Notices to Bank must be

mailed or delivered to the following:

Bank SNB Attn: Customer Solution Center P O Box 1988

Stillwater, OK 74076 Either party may change its address for notification purposes by giving the other party prior written notice of the new address and the date upon which the address will become effective. At its option, for quality assurance, training, and confirmation purposes, Bank may monitor and record telephone conversations with its customers, including Customer. Customer agrees that Bank shall have no liability for monitoring or recording, or not monitoring or recording, telephone conversations with Customer.

DD. HEADINGS. Paragraph headings are used for identification purposes only and are not

intended to limit the content thereof.

EE. ENTIRE AGREEMENT. The Implementation Agreement, these Terms and Disclosures, and

any applicable Separate Agreement constitutes the entire agreement between Bank and

Customer as it relates to the rendition of Services and, except as otherwise stated herein and

with the exception of any Loan Documents, supersedes any and all other agreements either

oral or written between the Parties with respect to the subject matter hereof. Customer

acknowledges that it has not relied on any oral representations of any Bank officer, director or

employee in entering into the Implementation Agreement or any Separate Agreement. The

Implementation Agreement, any Separate Agreement and these Terms and Disclosures

incorporate by reference all corporate resolutions, Separate Agreements and Account Terms

with Bank, and any applicable User Guides or operating procedures for the Services

regardless of whether such agreements or other documents have been executed by

Customer.

FF. ASSIGNMENT. Customer may not assign its rights under the Implementation Agreement,

any Separate Agreement or these Terms and Disclosures without the prior written consent of

Bank.

GG. JOINT AND SEVERAL AUTHORITY TO COMBINE FUNDS; REPRESENTATIONS AND

WARRANTIES. If more than one party joints in one or more Services, the contractual

obligations shall be the independent obligations of each party, the obligations hereunder

being joint and several. Further, for purposes of these Terms and Disclosures and


Implementation Agreement, each party is separately defined as Customer. Each party

agrees that there is no expectation of privacy between the entities that have joined in the

Services. Each party hereby represents and warrants to Bank that any and all transfers and

commingling of funds required or permitted by any Services, and all other aspects of the

performance hereof by the parties, have been fully authorized by law and by all necessary

parties, including, without limitations, the account holder of each account and that each

Customer have obtained and shall maintain in Customer’s regular business records and

make available to Bank upon reasonable demand, adequate documentary evidence of such

authorization form the account holder of each account, executed by the duly authorized

officer(s) of each such account holder in accordance with that account holder’s corporate

bylaws and board resolutions. Each representation and warranty contained herein shall be

continuing and shall be deemed to be repeated upon Customer’s use of the Services and

Bank effecting each transfer and commingling of funds.

II. BUSINESS BILL PAY SERVICE TERMS

A. SERVICES. Bank agrees to provide Business Bill Pay Services to Customer with respect to

the accounts that customer has designated on forms provided by the Bank. Bill Payment is a

service provided through the Treasury Management System, by the Bank or an independent

third party, for use of the Bill Pay Service are presented at time of on-line enrollment and

require acceptance before Customer’s bill payment service is activated. These Terms and

Conditions can also be accessed at any time from the Treasury Management System from

the Bill Payment Help menu. Online bill payment is provided to Customer for Customer’s

convenience. The actual payment of such bills may be handled by an independent third

party, and Bank cannot and will not guarantee or be held responsible for the completion and

accuracy of such transactions.

III. AUTOMATED ACCOUNT SWEEP SERVICE TERMS

A. DEFINITIONS. The following words or phrases in this Section shall have the following

meanings:

1. Available Credit. At any time the principal amount available to Customer under the terms of

the Line of Credit, which will at no time exceed the stated principal amount of the Note, less

the principal amount thereof then outstanding.

2. Available Funds. The net funds eligible to be swept from the Sweep Target Account(s) at

the end of a Business Day after taking into account all deposits and checks and other items

drawn on the Account. The funds availability policy of Bank will apply to deposits in the

Sweep Target Account.

3. Destination Account. The account at Bank, as shown in the Implementation Agreement,

that Customer has designated as being covered by the Sweep Service described herein

and on which Customer authorizes Bank to transfer Available Funds, on a daily basis, to or

from a Sweep Target Account in order to achieve the selected sweep of funds. The

Destination Account may be an Interest Bearing Account if the Sweep Service selected is

an Interest Bearing Account Sweep; the Destination Account may be the Line of Credit

Account if the Sweep Service selected is a Commercial Loan Sweep; the Destination

Account may be another account at Bank if the Sweep Service selected is a Zero Balance

or Target Balance Sweep.


4. Loan Documents. The Promissory Note (“Note”) and any business loan agreement,

mortgage, commercial security agreement, or other document or instrument executed in

connection with the note evidencing the Customer’s line of credit provided by Bank as

designated on the Implementation Agreement (“Line of Credit”).

5. Sweep Service. The specific sweep option designated by Customer on the Implementation

Agreement.

6. Sweep Target Account. An account at Bank, as shown on the Implementation Agreement,

which Customer has designated as being covered by the Sweep Service described herein

and on which Customer authorized Bank to transfer out on a daily basis funds in the

amount of any Target Balance Excess, and/or in some Sweep Services to transfer funds in

the amount of any Target Balance Shortfall so that at the opening of each Business Day

the Sweep Target Account will have the Target Balance.

7. Target Balance. The Available Funds balance designated on the Implementation

Agreement that Customer wishes to maintain in the Sweep Target Account and above

which Bank will sweep funds out of the Sweep Target Account and into which Bank may

sweep funds. For the Zero Balance Sweep Service, the Target Balance will be zero.

8. Target Balance Excess. The amount of Available Funds in the Sweep Target Account at

the end of any Business Day in excess of the Target Balance.

9. Target Balance Shortfall. On any Business Day, the amount by which the Available Funds

balance in the Sweep Target Account is less than the Target Balance.

10. Relationship Sweep Available Balance. The combined Available Funds balance

considering all related Sweep Target Account(s) and Available Credit under the terms of a

Line of Credit.

B. SWEEP SERVICES. If Customer has elected to receive Sweep Service, Customer

authorizes Bank and Bank agrees to transfer money from one or more of Customer's

Accounts in accordance with the sweep option(s) designated in the Implementation

Agreement. Bank offers the following Sweep Service options:

1. Zero Balance Account Sweep

2. Revolving Line of Credit Sweep

3. Cash Sweep

4. Insured Deposit Sweep

Sweep Services are automatic and occur on any Business Day after the final posting of items

in Sweep Target Account, with the exception of service charges.

C. ZERO BALANCE ACCOUNT SWEEP. The Zero Balance Sweep Service will transfer on

each Business Day to the Destination Account any Target Balance Surplus from any Sweep

Target Account (for this purpose, referred to as a “Zero Balance Account”) designated by

Customer, and to transfer, on each Business Day, from the Destination Account to the Zero

Balance Account amounts necessary to cover any Target Balance Shortfall in any Zero

Balance Account so that at the beginning of each Business Day, each Zero Balance Account

designated by Customer, will have an Available Funds balance of either zero ($.00) or the

Target Balance, as determined by the Customer.

1. Zero Balance and Destination Accounts. Customer shall make arrangements for there to

be sufficient Available Funds in the Destination Account to cover all items drawn on the


Zero Balance Account presented for payment on the Business Day on which

presentments are made. Items drawn on the Zero Balance Account shall conform to

check specifications provided by Bank to Customer. Issuance of items, which have not

received Bank’s prior approval as to compliance with Bank’s check specifications, may

result in charges for extra processing.

2. Transfers, Credit and Returns. Bank will automatically transfer funds from the

Destination Account to the Zero Balance Account to cover items that are presented for

payment. To the extent that such Available Funds, in the Destination Account, are

insufficient to cover such items, Bank is authorized to transfer Available Funds by

provisional credit to the Zero Balance Account in an amount equal to the total of all

amounts payable on all items, which are presented to Bank. If the Available Funds on

deposit in the Destination Account are insufficient for such purpose, Bank may at its sole

discretion revoke the provisional credit to the Zero Balance Account and return Items

which created such provisional credit unpaid, or Bank may in its sole discretion

provisionally advance the necessary additional funds to the Customer and transfer such

provisional credit in the amount thereof to the Zero Balance Account (any such transfer or

provisional credit shall remain revocable, at all times, by Bank in its sole discretion prior

to midnight of the day following presentment of the items). If Bank should provisionally

advance any funds to Customer, such action shall not establish a course of dealing

between the parties that shall require Bank to provisionally advance any additional funds.

If Customer fails to repay any such provisional advance, Bank shall, without any

requirement of prior notice to Customer, automatically reverse such provisional credit,

initiate a debit in the amount of the original advance to the Zero Balance Account, and

return any or all affected Items unpaid. Bank also may return any Items, which Bank

determines, are not properly payable.

D. REVOLVING LINE OF CREDIT SWEEP

1. Loan Sweep. Bank will sweep funds out of the Sweep Target Account as described

below as provided in the Implementation Agreement.

(i) If there is a Target Balance Excess at the end of a Business Day, Bank will (A) debit

the Sweep Target Account for the amount of any unpaid principal balance under the

Note, up to the amount of the Target Balance Excess, and (B) apply the amount of

the debit to the unpaid balance of the Note.

(ii) In no event will Bank debit the Account pursuant to the Implementation Agreement to

pay any interest that shall accrue under the Note, but this shall not affect Bank’s right

to set-off against the Account any monies due Bank under the Note, including, but

not limited to, principal and interest, and Bank hereby expressly reserves such right

of set-off and any other rights under the Loan Documents.

2. Extension of Credit under Note. Bank will sweep funds back into the Sweep Target

Account as provided in these Terms and Disclosures and Implementation Agreement

according to the following terms and in the following order:

(i) If there is a Target Balance Shortfall, Bank will extend credit to the Customer to the

extent provided in subparagraphs (ii) and (iii) below.

(ii) If the Available Credit at such time equals or exceeds the Target Balance Shortfall,

Bank will (A) extend credit to the Customer by making an advance under the Note in


the amount of the Target Balance Shortfall and (B) credit the amount of the advance

to the Sweep Target Account to eliminate the Target Balance Shortfall, as applicable.

(iii) If the Available Credit at such time is less than the Target Balance Shortfall, Bank will

(A) extend credit to Customer by making an advance under the Note in the amount of

the Available Credit and (B) credit the amount of the advance to the Sweep Target

Account to reduce the Target Balance Shortfall.

3. Advances. All advances under the Note made pursuant to the Terms and Disclosures

and Implementation Agreement shall be evidenced by, bear interest at the rate provided

in and be repaid in accordance with the terms of the Note and shall be secured by any

and all collateral security the Note. In no event shall Bank have any obligation to make

advances under the Note in excess of the Available Credit.

4. Authorizations. Customer authorizes Bank to charge and credit the Account, make

advances and payments on behalf of Customer under the Note in accordance with the

terms these Terms and Disclosures and Implementation Agreement, all without further

notice to or authorization by the Customer or any authorized person, if any, identified in

the Note.

5. Effect on Loan Documents and Other Agreements. The terms of the Loan Documents

are hereby modified to include the terms and provisions of these Terms and Disclosures

and Implementation Agreement, including, without limitation, Section III.E.1. and E.2.

hereof. However, these Terms and Disclosures and Implementation Agreement are not

intended to and shall not be construed to modify or supersede the Loan Documents or

the respective rights and obligations of the Customer and Bank as therein provided or

any other agreements, terms, conditions, rules or regulations of Bank as may be

applicable to the Line of Credit or the Sweep Target Account, including, without limitation,

any requirements relating to minimum balances and service or other charges. In the

event of any conflict between these Terms and Disclosures and Implementation

Agreement and Loan Documents, the Loan Documents will prevail with respect to the

Line of Credit.

E. CASH SWEEP. Under this Sweep Service, Bank will sweep any Target Balance Excess in

the Sweep Target Account on any Business Day in accordance with the Implementation

Agreement to a Destination Account that is an Interest Bearing Deposit Account. Funds will

automatically sweep back to the Sweep Target Account, subject to maximum limitations

established by law.

F. INSURED DEPOSIT SWEEP.

1. Introduction. Under the Insured Deposit Sweep Program ("the Program") any amount

on deposit at Bank that exceeds the target balance agreed upon between Customer and

Bank (“Target Balance”) will be swept to other insured accounts at FDIC member banks.

Customer’s funds will be deposited in money market deposit accounts and/or demand

deposit accounts (together, “DDA”) with those receiving banks (“Receiving Banks” or

“banks”, and Customer’s funds in these banks are hereinafter referred to as “Program”),

subject to the limitations described herein. By selecting the Program, Customer appoints

Bank as its authorized agent pursuant to the Terms and Conditions set forth herein.


Bank will operate the Program with one or more third-party companies. There is no

minimum amount required as an initial or subsequent deposit.

By participating in this Program, Customer can increase the FDIC protection on its

deposit while continuing to process all its transactions with a single bank relationship.

From time to time, Bank will notify Customer of the maximum amount of FDIC insurance

protection available on Customer’s Program Deposits. Such maximum amount will

depend on the number of Receiving Banks in the Program and the number of Receiving

Banks that Customer excludes from holding its Program Deposits, and so may change

from time to time.

CUSTOMER UNDERSTANDS THAT BY ENROLLING IN THE PROGRAM BY

EXECUTING THE CUSTOMER AUTHORIZATION AND AGENCY APPOINTMENT

FORM, CUSTOMER IS INSTRUCTING BANK TO DIRECT THE AMOUNT OF ITS

FUNDS ON DEPOSIT WITH BANK THAT EXCEEDS THE TARGET BALANCE

AGREED UPON BETWEEN BANK AND CUSTOMER TO THE PROGRAM DEPOSITS

AT THE RECEIVING BANKS THROUGH A THIRD-PARTY COMPANY.

CUSTOMER ACKNOWLEDGES THAT IT HAS RECEIVED AND CAREFULLY READ

THESE TERMS AND CONDITIONS AND ANY OTHER APPLICABLE TERMS AND

CONDITIONS, WITH RESPECT TO INTEREST RATES IN CONNECTION WITH

CHOOSING TO ENROLL IN THE PROGRAM. IF CUSTOMER HAS ANY QUESTIONS,

PLEASE CALL BANK.

2. Summary of Terms and Conditions. This section is a summary of certain features of

the Program. It is prepared for Customer’s convenience, and must be read in conjunction

with any applicable terms and conditions.

A Summary of the Program: A third-party company (“Company”) operates the Program,

and Bank acts as Customer’s agent. If Customer chooses to participate, Bank will sweep

any amount on deposit at Bank that exceeds the Target Balance to the Receiving Banks,

with no single bank holding deposits of yours in excess of the FDIC-insured limit, subject

to the limitations described herein. Customer receives interest on its Program Deposits

at the rate established by Bank.

FDIC Insurance: Customer’s funds are deposited into DDA at multiple Receiving Banks

in a manner designed to remain within the $250,000 FDIC insurance for each Receiving

Bank, which in the aggregate increases the amount of FDIC protection available to

Customer. Company allocates Customer’s funds among the Receiving Banks to

maximize FDIC deposit insurance coverage. FDIC coverage is available up to its

standard maximum deposit insurance amount (“SMDIA”), which is $250,000 per legal

category of account ownership at each bank when aggregated with all other deposits

held by Customer in the same bank and in the same legal category of account

ownership.


Company reserves the right to change the banks in the Program and the number of

banks to which Customer’s funds may be directed, providing Customer with more or less

total coverage under the Program, at the discretion of Company from time to time.

Company will notify Bank if it changes the amount of total coverage available to

Customer under the Program.

Company has standing instructions with each bank to ensure that Company maintains

control over Customer’s funds at all times. Company allocates among the Receiving

Banks to maximize FDIC coverage. However, any money that Customer holds outside

the Program at a Receiving Bank will impact Customer’s FDIC coverage as neither

Company, Bank nor any Receiving Bank monitors or takes any responsibility for money

Customer may have at a Receiving Bank outside the Program. Customer is solely

responsible for monitoring this. As such, Customer should review carefully the list of

Receiving Banks provided to Customer upon selection of the Program. In addition, a list

of Receiving Banks holding Customer’s money will be noted on Customer’s monthly

account statement. The list of Receiving Banks may change from time to time, and

Customer may contact Bank directly to obtain the most recent list. Customer has the

right to instruct Bank not to allocate Customer’s money to a particular Receiving Bank.

Access to Funds: Customer will access funds through Customer’s deposit accounts at

Bank. Customer’s account statements will list the names of the Receiving Banks holding

Customer’s money and month-end balance.

Determination of Interest Rates: Customer’s interest rate on funds deposited through the

Program is set by Bank. Customer must contact Bank with any questions about

Customer’s rate.

Company’s Fees: Company earns fees based on the amount of money in the Program,

including Customer’s money.

Risks of the Program: Receiving Banks are permitted to impose a seven-day delay on

any withdrawal request. In the event of a failure of a Receiving Bank, there may be a

time period during which Customer may not be able to access its money. If Customer

has money at a Receiving Bank outside the Program, this will negatively impact the

availability of FDIC insurance for the total amount of Customer’s funds held within and

outside the Program. If Customer’s deposits in a Receiving Bank exceed the then

current SMDIA of such bank, the excess funds are not covered by the FDIC deposit

insurance.

On each business day, Bank will sweep the deposit balances that exceed the Target

Balance, and transfer the funds to the Program on the following business day. Company

will allocate such funds to a number of Receiving Banks to maximize FDIC insurance. As

a result, such funds may be uninsured on the day of the sweep because they remain in

Bank overnight. However, the funds will be insured once they are transferred to the

Program. Similarly, when Customer’s funds are swept to the Program to the extent they


exceed the current SMDIA, they will be uninsured for a limited period of time intraday as

the funds await movement to the Receiving Banks. Company has adopted procedures

and controls to ensure the movement of funds in a timely manner each day and expects

that Customer’s funds will be received by the Receiving Banks by the close of business

each day. However, if contrary circumstances occur and Customer’s funds are not sent

to the Receiving Banks in a timely manner, Customer’s funds could, to the extent they

exceed the current SMDIA, be uninsured until the next business day.

G. FEES AND CHARGES. The charge for the Sweep Service is set for in the Implementation

Agreement, and may be amended from time to time.

H. GARNISHMENTS. In the event a writ of garnishment is served on the Bank targeting funds in

the Sweep Target Account, the Bank shall have the right, in its sole discretion, to: (1) freeze

and/or place a hold on the Sweep Target Account an amount equal to the amount sought by

the garnishor until the writ of garnishment is satisfied; and/or (2) pay the full amount sought

by the writ of garnishment using funds from the Sweep Target Account. The Bank’s exercise

of these remedies shall not waive any other rights Bank may have under these Terms and

Disclosures.

IV. FUNDS TRANSFER SERVICE TERMS

A. PAYMENT ORDER. Customer has requested that Bank provide funds transfer services to

Customer to allow Customer to initiate transactions on Authorized Accounts, as defined

hereafter, through Customer's Authorized Agents, as defined hereafter. Any request by an

Authorized Agent for a transfer of funds, or any amendment or modification to, or cancellation

of, that request, is referred to in these Service Terms as a “Payment Order.” Upon receipt of

documentation deemed satisfactory to Bank in its sole discretion, Customer may permit third

parties to initiate a reverse funds transfer with the effect of debiting Customer's account at

Bank and crediting the third party's account in accordance with the authorized Payment

Order. Customer’s fund transfers shall be subject to the transaction limits contained in the

Implementation Agreement.

B. ACCOUNTS. Customer has designated any and all Accounts (“Accounts”) by use of

Customer's specific Taxpayer ID number(s) with Bank from which Payment Orders may be

initiated. The Taxpayer ID numbers are designated on the Implementation Agreement.

C. AUTHORIZED AGENTS. The term Authorized Agents is broadly defined to include both

persons designated by Customer on a Wire Transfer/Payment Order Agreement to initiate

Payment Orders from Customer’s Authorized Accounts and persons designated by

Customer’s online Treasury Management System Administrator responsible for electronically

designating Authorized Agents to initiate Payment Orders from the Customer’s Authorized

Accounts through Bank’s online Treasury Management System. Customer and/or Customer’s

online Treasury Management System Administrator designations of Authorized Agents shall

control, govern and be binding on Customer and Bank.


D. FUNDS TRANSFER OPTIONS. Customer may initiate Payment Orders on a random, as

needed basis (“Standard Transfer”) and/or may establish a predetermined, preauthorized

schedule of Payment Orders (“Repetitive Transfer”). In the event Customer elects to utilize

the Repetitive Transfer option, Customer may vary the date and amount of the Payment

Order; however, accounts designated to be debited and credited may not vary.

E. SECURITY PROCEDURES. Customer has been advised of and agrees to comply with

Bank's Funds Transfer Security Procedures, as described in Section I.G of these Terms and

Disclosures. The Customer's failure to comply with the Bank's applicable security procedures

shall result in Customer being responsible for any liability, loss or damage resulting from the

failure to comply with the Bank's Security Procedures. The Bank will only accept a funds

transfer request that is being made using the appropriate Security Procedures and codes.

The Security Procedures to initiate Online Wire Transfers are as follows: (i) the customer will

use the appropriate User ID and PIN number (access code); and (ii) a unique PIN number will

be assigned for each Wire initiated either through a template or a one-time transfer through

our Out-of-Band Authentication “OOBA” call; and (iii)the transaction must have Dual-

Authentication – an initiator and approver as provided in the Implementation Agreement.

F. CONFIRMATION ACCOUNT RECONCILIATION. The Bank will send the Customer a receipt

of each executed Wire Transfer request the following business day through the requested

delivery as specified in the Implementation Agreement. The wire debit will also appear on the

periodic Deposit Account statement sent to the customer.

G. FUNDS TRANSFER PROCEDURES. Bank will receive Payment Orders and incoming funds

transfers on Business Days between the hours of 8:00 a.m. and 5:00 p.m. Central Standard

Time, and will send outgoing fund transfers on Business Days between the hours of 8:00

a.m. and 3:00 p.m. Central Standard Time. Bank will use reasonable efforts to execute all

Payment Orders received in accordance with these Service Terms and the terms of the Wire

Agreement, and by the date designated by Customer, provided that such Payment Orders

are received on the days and during the hours of Bank's operations as set forth above. Bank

will not be deemed to have accepted a Payment Order until such Payment Order is actually

executed. For purposes of these Service Terms, a Payment Order is deemed executed once

Bank issues an order intended to initiate the Customer's Payment Order through a funds

transfer system. Bank may use any means and routes that Bank, in its sole discretion, may

consider suitable for the transfer of funds, including but not limited to the Fedwire funds

transfer system for the transfer of domestic funds. If Customer requests, Bank will use

reasonable efforts to notify Customer of incoming funds transfers, but shall have no liability to

Customer of any kind for failure to do so. Bank may reject a Payment Order in the event: (i)

Customer fails to submit the Payment Order in sufficient time to meet the Customer's

requested execution date; (ii) there are insufficient funds in the Authorized Account(s) to

cover the amount of the Payment Order; (iii) the Payment Order contains incomplete

instructions; (iv) Bank is unable to verify to its satisfaction that the Payment Order has been

submitted in accordance with all applicable Security Procedures; or (v) Customer has failed

to meet its obligation for payment of fees and charges owed to Bank under these Terms and

Disclosures and/or the Wire Agreement. In the event a Payment Order is rejected, Bank will


make reasonable efforts to notify Customer by telephone, and if unable to do so, will notify

Customer in writing. If Bank does not receive Customer's corrected Payment Order within

five (5) business days from the date the original Payment Order was initiated, Bank will deem

the Payment Order canceled by Customer. Bank shall not be liable to Customer if any

Payment Order is rejected by Bank in good faith for any of the foregoing reasons. Bank's

liability for failure to execute a Payment Order, if any, shall be limited as set forth in these

Services Terms and the Wire Agreement. Funds from incoming transfers will not be deemed

collected or credited to the Authorized Accounts or other accounts of Customer maintained at

Bank until such time as Bank receives final settlement through the Federal Reserve Bank

funds transfer system, or otherwise receives payment as provided in the Oklahoma

enactment of Article 4A of the Uniform Commercial Code or other applicable law.

H. ACCOUNT-TO-ACCOUNT TRANSFERS. Customer's account to account transfers also

constitute Payment Orders. All Payment Orders initiated by Customer must be initiated in

compliance with Bank's Security Procedures set forth in Section I.G of these Terms and

Disclosures.

V. AUTOMATED CLEARING HOUSE (“ACH”) ORIGINATION SERVICE TERMS

If Customer has requested, and Bank has agreed to permit Customer to initiate electronic credit and/or debit entries by means of the Automated Clearing House Network (the “ACH Services”), Customer agrees to comply with the following:

A. NATIONAL AUTOMATED CLEARING HOUSE ASSOCIATION (“NACHA”) TERMS AND

PROVISIONS. Customer and Bank agree to the following terms and provisions and agree

that capitalized terms not defined herein shall have the meaning ascribed to them in the

NACHA Operating Rules ("Rules").

1. Account or Originator's Account. Any Account maintained at Bank owned by the

Originator which may or may not be used as the Offset Account. Originator shall

designate the respective "Account(s)" and/or Entities on the Originator Setup Request

Form, or another form, provided by Bank.

2. ACH. The ACH Network is a secure, private network that connects banks to one another

by way of the Federal Reserve Board or other ACH operators. This network enables

electronic payments, such as direct deposit to be received and processed.

3. ACH Network. The ACH Network is a highly reliable and efficient nationwide batch-

oriented electronic funds transfer system governed by the Rules which provide for the

interbank clearing of electronic payments for participating depository financial institutions.

The Federal Reserve and Electronic Payments Network act as ACH Operators, central

clearing facilities through which financial institutions transmit or receive ACH Entries.

4. ACH Operator. An ACH Operator is the ACH participant that provides clearing, delivery,

and settlement services for ACH Entries. The primary function of the ACH Operator is to

accept ACH files containing ACH Entries from the ODFI and to sort and distribute such

ACH files to the RDFI. The Federal Reserve Bank acts as the ACH Operator although a

private sector can act as the ACH Operator when it executes an annual agreement with

NACHA binding it to the Rules (except to the extent inconsistent with the policies or


practices of the Federal Reserve Banks) and to other applicable laws. The Federal

Reserve Bank is the ACH Operator for the Bank.

5. ACH Third Party Sender. An entity that has a contractual relationship with an ODFI to

transmit debits or credits to the account of a Receiver on behalf of the Originator.

6. ACH Third Party Service Provider. A contractor or other service provider directly or

indirectly retained by the Originator to initiate any ACH Entry, Batch and/or File to the

Bank or Bank's agent.

7. Balanced Batch. A Balanced Batch results when the Entries (debit and/or credit) within

the ACH Batch equal to the total amount debited or credited to the Offset Account within

the same ACH Batch.

8. Batch. Batch represents one or more ACH Entries that make up a single unit, "Batch".

Each Entry within the Batch will have the same Effective Date and the same payment

type (SEC Code). A Batch is not only characterized by each ACH Entry within the Batch,

but also by the entity initiating the Batch. Chapter VIII, "Mapping" of the Rules provides

complete details with regard to fields that make up a Batch.

9. Business Day. A Business Day is any day that the Bank is open to the public for carrying

on substantially all of its business (Saturday, Sunday and Federal holidays are

nonbusiness days).

10. DDA. A Demand Deposit Account is one and the same as a checking account and

represents a transaction account that is not limited by the number of transactions.

11. Effective Date. The Effective Date is the date the Originator and Receiver wishes the

ACH Entry or Entries to post to the Receiver's account(s). When an Entry or Entries

contains an invalid Effective Date (falls on a non-Business Day or released after the

current Business Day's Cut-Off Time), it will process on the next available processing

day, with a Settlement Date of one to two (1 to 2) Business Days from the process date.

12. Entry or Entries. A debit and/or credit ACH Entry or Entries represent individual

transactions that make up an ACH Batch. ACH Entry or Entries, for purposes of this

Section, shall also represent any ACH data received from the Originator, including, but

not limited to, Prenotifications.

13. File or Files. A File or Files represent one or more ACH Batches as a single unit. When

the Originator utilizes the Bank's Treasury Management System, the Bank receives the

Batch or Batches from the Originator and creates a subsequent File. When the Originator

uploads its Batch or Batches from its core system or via its Third-Party Service Provider,

the Originator and/or Third-Party Service Provider uploads a complete File made up of

one (1) or more Batches to the Bank for processing.

14. File Reversals. A File Reversal (and/or Batch) can only be initiated to correct the initiation

of a File (or Batch) where the majority of the ACH Entries were erroneous or it was a

duplicate File (or Batch), in which a correcting File must be initiated on the same day as

the File Reversal. A reversing ACH Entry is similar to a File Reversal except the

Originator is only reversing an ACH Entry and not an entire File. Chapter IV, "Reversals,

Reclamations, and ODFI Request for Return," of the Rules (Operating Guidelines)

provide details on the requirements of the File Reversal process. Otherwise, once an

ACH Entry or Entries have been introduced into the ACH Network, it cannot be reversed.

15. NOC. A Notification of Change ("NOC") is a non-dollar ACH Entry initiated by the

Receiving Depository Financial Institution ("RDFI") to the ACH Operator for distribution


back to the Originator through the ODFI. Chapter II, "Notifications of Change," of the

Rules (Operating Guidelines) provides details of the NOC process, including, but not

limited to, time requirements. The Originator is required to investigate the incorrect data

and make the correction to the ACH Entry, when applicable, within six Business Days

from receipt of the NOC from the ODFI or prior to initiating the next ACH Entry to the

Receiver, whichever is later.

16. ODFI. The ODFI is the ACH participant (Financial Institution) that has executed a written

agreement with the Originator to transmit ACH Entries, Batches, and/or Files into the

ACH Network on behalf of the Originator. For the purpose of this Section, Bank , is the

ODFI.

17. OFAC. The U.S. Treasury Department's Office of Foreign Assets Control (“OFAC”)

administers economic sanctions and embargo programs that require assets and

transactions be frozen which involve interests of target countries, target nationals, and

other specifically identified companies and individuals. For purposes of OFAC

compliance, these entities are referred to as "Specially Designated National and Blocked

Persons." OFAC maintains and regularly updates a master list ("SDN List") identifying

known "blocked parties." Chapter IV, "OFAC Compliance," of the Rules (Operating

Guidelines) provides details of OFAC requirements. To review the current SDN List or

other OFAC details, visit http://www.treasury.gov.

18. Originator. The Originator is the ACH participant that initiates ACH Entries, Batches,

and/or File into the ACH Network through a relationship with the ODFI. The Originator is

responsible for funding upon submission of the ACH Entry, Batch, and/or File. For

purposes of this Section, the Originator is a corporate entity also known as "Company."

19. Prenotification. A Prenotification (Prenote) is a non-dollar ACH Entry initiated by the

Originator to the RDFI prior to the initiation of the first credit or debit Entry to a Receiver’s

account with the RDFI. A Prenotification notifies the RDFI that an Originator intends to

initiate one or more credit or debit Entries to a Receiver’s account with that RDFI in

accordance with the Receiver’s authorization. Prenotifications are optional, but Bank

strongly recommends use for payroll and other important ACH Entries. When the

Originator chooses to Prenote, the Prenotification must be initiated at least three

Business Days ahead of the first live ACH Entry. Chapter I, "Prenotifications" of the Rules

(Operating Guidelines) provides details of the Prenotification process.

20. Provisional Credit. Provisional Credit is a provision of UCC 4A. A credit may be

considered provisional", provided: (1) an ACH Operating Rule makes such payment

provisional and that the rule requires both the Originator and the Receiver to be given

prior notice of the provisional nature of the payment; and (2) the ODFI, RDFI, and

Receiver have agreed to be bound by the Operating Rule.

21. RDFI. The RDFI is the ACH participant (Financial Institution) that receives the ACH File

from the ODFI through the RDFI's ACH Operator on behalf of the Receiver of which holds

an account with the RDFI.

22. Receiver. The Receiver is the ACH participant that is the final recipient of the ACH Entry

or Entries. A Receiver can be an individual, corporation, or other entity that has

authorized an Originator to initiate a credit and/or debit ACH Entry to an account held at

the RDFI.

http://www.treasury.gov/


23. Return. A Return is any ACH Entry that has been Returned to the Bank on behalf of the

Originator by the RDFI or ACH Operator as unpaid or rejected, respectively, because it

cannot be processed. The course of action required by the Originator to handle the return

is dependent upon the reason of the return, as indicated by the return code. Chapter III,

"Returns, Dishonored Returns, and Contested Dishonored Returns," of the Rules

(Operating Guidelines) provides a current list and definitions of Return Reason Codes,

Dishonored Return Reason Codes, and Contested Dishonored Return Reason Codes.

24. SEC Code or ACH Payment Type or ACH Type. An SEC code is a three-character code

that identifies the specific payment related information relevant to the application. Each

ACH Batch will have one SEC code, which appears within the Company/Batch Header

Record. SEC code stands for "Standard Entry Class" code.

25. Settlement Date. The Settlement Date represents the date on which the actual transfer of

value, or funds, between the ODFI (on behalf of the Originator) and the RDFI (on behalf

of the Receiver) have exchanged ACH transactions. The Originator is required to provide

funding on, or as otherwise provided in accordance with ACH Block and Transaction

Filtering Authorization, on the Settlement Date.

26. Transaction Limits. Customer’s ability to utilize ACH Services shall be subject to the

transaction limits specified and agreed to by Customer in the Implementation Agreement.

B. GENERAL TERMS.

(a) The Originator will initiate electronic credit and/or debit ACH Entries by means of, and as

a participant of, the ACH Network. The Bank agrees to act as the Originating Depository

Financial Institution ("ODFI") with respect to such ACH Entries as a participant in the

ACH Network. The governing body regulating the ACH Network is the NACHA. All

participants of the ACH Network, including the Originator, are required to follow the

guidelines set forth by the Rules.

(b) The Bank is a member of the ACH Network through the regional ACH Association,

Electronic Payments Core of Knowledge ("EPCOR"). EPCOR is a member of NACHA.

The Federal Reserve Bank acts as the ACH Operator for Bank, which facilitates the

exchange and settlement of electronic fund transfers in the ACH Network within the

United States.

(c) The Originator shall obtain, at the Originator's own expense, a copy of the Rules, as

amended (the "Rules"), and may procure any updates and revisions to the Rules from

NACHA, EPCOR or any other regional ACH association. The "Rules" are reviewed for

update on an annual basis. The Rules may be obtained online at www.nacha.org or

www.EPCOR.org.

C. TRANSMITTAL OF ACH ENTRIES BY ORIGINATOR. The Originator agrees to only initiate

credit and/or debit ACH Entries, for those "SEC codes" pre-approved by the Bank. The

Originator agrees to comply with the Rules, as defined herein and as amended by NACHA

from time-to-time, and that the ACH Entries and format of such ACH Entries will comply with

the Rules. The total amount of each ACH "Entry or Entries" and subsequent "Batch" and/or

"File" initiated by the Originator shall not exceed established limits set by the Bank. The

Originator shall initiate an ACH Entry or Entries and the corresponding Batch and/or File to

the Bank in accordance with the procedures and specifications set forth herein. The Bank, in


its sole discretion and in addition to any File transmittal, may require the Originator to fax or

e-mail a ACH Transmittal Letter or provide the transmittal data by other electronic means as

specified by the Bank. If the Bank requests a change be made to an ACH Entry or Entries

within a Batch and/or File including, but not limited to, adding the Originator's phone number

to the "Company Discretionary Data" field within the Company/Batch Header Record, the

Originator agrees to make the change prior to the next initiation of the respective ACH Batch

and/or File. Any ACH Entry, Batch, and/or File that is released after the current Business

Day's Cut-Off Time as set forth in Section V.V., shall be processed on the next available

processing day, with a Settlement Date of one to two (1 to 2) Business Days from the

process date. Prior to the Cut-off Time, as set forth in Section V.V., the Originator must

confirm that each ACH Entry, Batch, and/or File submitted to the Bank has been processed.

The Originator shall deliver each ACH Entry, Batch, and/or File in accordance with the

processing schedule, if the ODFI requests a processing schedule, and as specified in Section

V.V.

D. INCONSISTENCY OF NAME AND ACCOUNT NUMBER. The Originator acknowledges and

agrees that, if an ACH Entry or Entries describes the "Receiver" inconsistently by name and

account number, payment of the ACH Entry or Entries initiated by the Originator may be

accepted by the RDFI (or by the Bank in the case of an On-Us Entry) solely based on the

account number when the account number is a valid account with the RDFI. This provision is

applicable even if the ACH Entry or Entries identifies a person different from the named

Receiver, and that the Originator's obligation to pay the amount of the ACH Entry or Entries

to the Bank is not excused in such circumstances.

E. PAYMENT BY ORIGINATOR FOR ACH ENTRIES. The Originator shall pay the Bank the

amount of each ACH Entry initiated by the Bank pursuant to this Section at such time and on

the "Settlement Date", or as otherwise provided in accordance with the ACH Block and

Transaction Filtering Authorization. The Bank shall determine, in its sole discretion, if, and to

what extent, ACH Block and Transaction Filtering Authorization, shall apply to each ACH

Entry.

F. ORIGINATOR REPRESENTATIONS AND AGREEMENTS; INDEMNITY; ACH DATA

BREACHES; AUDIT RIGHTS; DATA RETENTION.

1. With respect to each and every ACH Entry initiated by the Originator, the Originator

represents and warrants to the Bank and agrees that: (a) each person shown as the

Receiver of an ACH Entry, which may or may not be received by the Bank from the

Originator, has authorized the initiation of such ACH Entry in accordance with the Rules

and the crediting and/or debiting of his, her or its account in the amount and on the

"Effective Date" shown on each ACH Entry; (b) such authorization is operative at both the

time of transmittal and posting by the Bank as provided herein; and (c) the information

the Originator includes in each ACH Entry is accurate and complete. The Originator shall

also ensure all information included in each ACH Company/Batch Header Record is

accurate and complete; in particular, that the information within the "Company Name",

"Company Identification", and "Company Entry Description" fields pertain to the ACH

Entry or Entries being initiated by the Originator.


2. The Originator shall perform its obligations under this Section in accordance with all

applicable United States federal and state laws and regulations and other applicable

laws, regulations, rules and procedures applicable to ACH transactions, including, but not

limited to, the Rules, the Uniform Commercial Code, Article 4A (UCC, Article 4A), and the

sanctions of OFAC (Office of Foreign Assets Control), and all ACH Entries initiated by the

Originator must comply with the foregoing laws, regulations, rules and procedures. No

ACH Entry initiated by the Originator may violate the laws of the United States. The

Originator acknowledges and agrees to consumer protections provided by the Electronic

Funds Transfer Act and its implementing Regulation E, including, but not limited to, error

resolution. Originator shall be bound by and comply with the provision of the Rules,

making a payment of an ACH Entry or Entries by the RDFI to the Receiver provisional

until receipt by the RDFI of final settlement for such ACH Entry or Entries. Originator

specifically acknowledges that it has received notice of the rule regarding provisional

payment and of the fact that, if such settlement is not received, the RDFI shall be entitled

to a refund from the Receiver for the amount credited and Originator shall not be deemed

to have paid the Receiver the amount of the ACH Entry or Entries.. The Originator

expressly authorizes the Bank to disclose the Originator's contact information, including

telephone number, to any RDFI for the purpose of giving the Originator's contact

information to the relevant Receiver.

3. The Originator shall indemnify the Bank against any loss, liability or expense (including

attorneys' fees and expenses) resulting from or arising out of any breach of any of the

foregoing representations or agreements. This indemnification is in addition to any other

indemnification rights that are provided for in this Section.

4. If requested by the Bank, the Originator shall provide the Bank with copies of any

requested documentation within two (2) Business Days from such request. The Originator

shall provide immediately available funds to offset any credit ACH Entries ("Offset

Funds") originated. The Originator shall maintain an "Offset Account" at the Bank for the

purpose of maintaining Offset Funds in an amount sufficient to cover the offset of any

credit ACH Entries, as required by this Section V.B.F.4. The Originator shall not originate

any ACH Entries for, or on behalf of, any other party. Any attempt to originate ACH

Entries for, or on behalf of, any other party shall render such ACH Entries null and void.

Notwithstanding any other provision in this Section, the Bank shall have the absolute right

to place a hold on funds in the Originator's Account, as defined herein, as well as any

other deposit account held by the Originator at the Bank, at any time, in any amount and

for the length of time the Bank deems necessary, in the Bank's sole discretion.

5. ACH Data Breaches. Originator shall adopt and implement, and shall ensure that each of

its Third-Party Service Providers adopts and implements, commercially reasonable

policies, procedures and systems to receive, store, transmit and destroy Consumer-Level

ACH Data (hereafter defined) in a secure manner, to protect against data breaches and

to detect the occurrence of data breaches. In the event of any data breach, Originator

and each of its Third-Party Service Providers shall provide prompt notice of the same to

ODFI's Information Security Officer. If a data breach is known or suspected, Originator

and/or its Third-Party Service Provider immediately shall commence and diligently pursue

an investigation of the circumstances to determine (i) if a data breach has actually

occurred, (ii) the scope of the data breach, including the type and amount of data


affected, (iii) the risk that the affected data will be misused, and (iv) what steps are

necessary to prevent further unauthorized access to Consumer-Level ACH Data.

Originator and/or its Third-Party service Provider shall take all other actions required by

applicable law that such persons are required to take in the event of a breach of

Consumer-Level ACH Data. For purposes of this Section V.F.5., "Consumer-Level ACH

Data" shall have the meaning assigned to it by the Rules.

6. Audit Rights. The Bank reserves the right to audit, inspect, and review ACH Entries

originated by the Originator and Originator's files, records, systems and books with

respect to its origination of ACH Entries under this Section, and Originator's compliance

with this Section, the Rules and all other laws, rules and regulations applicable to

Originator's origination of ACH Entries. Originator will provide, within the timeframe

specified by the Bank, any and all documentation as the Bank may request, regarding

Originator's compliance with this Section, the Rules and all other laws, rules and

regulations applicable to Originator's origination of ACH Entries. The Bank also reserves

the right to require that Originator implement changes to its internal controls and

processes related to its origination of ACH Entries. Originator's failure to provide any

requested documentation, to comply with the Bank's audit request or to implement

reasonably requested changes to its internal controls and processes related to its

origination of ACH Entries within the Bank's specified timeframe may result in the closure

of the Originator's Account, as defined herein, as well as any other deposit account held

by the Originator at the Bank.

7. Data Retention. Customer shall retain data on file adequate to permit remaking of entries

for a period of two years following the date of their transmittal by Bank as provided

herein, and shall provide such Data to Bank upon its request. Without limiting the

generality of the foregoing provision, Customer specifically agrees to be bound by and

comply with all the applicable provisions of the Rules regarding the retention of

documents or any record, including, without limitation, Customer’s responsibilities to

retain all items, source document and records of authorization in accordance with the

Rules.

G. OFAC. The Originator agrees that it shall be responsible for compliance with OFAC

requirements as stated in Chapter IV, "OFAC Compliance" of the Rules (Operating

Guidelines). The Originator agrees that it will not violate OFAC-enforced sanctions, and that it

will not act on behalf of, or transmit funds to or from, any party subject to such sanctions. The

Originator agrees to originate only lawful ACH Entries and indemnifies the Bank from any

fines, expenses or losses due to actual or alleged violation of OFAC enforced sanctions.

Section V.A.15., provides the Specially Designated National (“SDN”) Website, which makes

available a current listing of persons and/or entities on the SDN list. ACH Customer is not

permitted to originate International Transaction Codes (“IAT”) to either Consumer or

Corporate accounts residing in Bank outside of the territorial jurisdiction of the United States.

H. AUTHORIZATIONS. The Originator shall obtain all authorizations and consents per the

Rules and shall retain these authorizations and consents for two years after the Settlement

Date of the last ACH Entry or Entries or as set forth by applicable state law, whichever is

longer. It is the responsibility of the originator to verify that the individual signing the ACH


debit or credit Authorization is, in fact, entitled to use of the specified account. The

Originator's obligation to pay the amount of the ACH Entry or Entries of the Bank is not

excused if the party is not entitled to use the specified account. Upon request from the Bank

or RDFI, the Originator shall provide a copy of such authorization within five (5) Business

Days to the Bank.

I. PRENOTIFICATION ENTRIES. A Prenotification Entry is a non-monetary ACH Entry that,

when used, must be originated at least three (3) Business Days prior to initiating the first live

(monetary) ACH Entry to the Receiver's account. Prenotification Entries are optional under

the Rules; however, Bank strongly recommends use for payroll and other time sensitive ACH

Entries. In the event that a Prenotification Entry is returned to the Originator, the Originator

shall review the Return Reason Code and contact the Receiver for clarification prior to

initiating the first live monetary ACH Entry. An Originator that has originated a Prenotification

to a Receiver’s account may initiate subsequent live Entries to the Receiver’s account as

soon as the third Business Day following the Settlement Date of the Prenotification, provided

the ODFI has not received a Return Entry or Notification of Change (NOC) related to the

Prenotification. If the ODFI receives a Return Entry or NOC in response to the Prenotification

by the opening of the business on the second Business Day following the Settlement Date of

the Prenote, the Originator must not transmit subsequent Entries to the Receiver’s account

until it has remedied the reason for the Return Entry or made the correction requested by the

NOC. Originator shall use the format and medium provided in the Rules when initiating

Prenotification Entries as set forth in Section V.V. The Originator acknowledges that an ACH

Entry or Entries to a Receiver’s account where the Receiver’s name does not match the

account information with the RDFI and the account number is a valid account with the RDFI,

may be accepted by the RDFI based solely on the valid account number provided in the

originated Entry or Entries.

J. RETURN AND NOTIFICATION OF CHANGE. The Bank shall notify the Originator of any

ACH Return or NOC Entry or Entries received from the RDFI after receipt of such ACH Entry

or Entries. This notification will be delivered to the Originator electronically via the Bank's

Internet Banking System and at the Bank's discretion, as an exception only, may be given by

phone to an Authorized Representative of the Originator, as defined herein, or by fax or e-

mail. It is the responsibility of the Originator to review its Return and NOC information daily

and act upon it in a timely manner and in accordance with the Rules. Section V.A. provides

details of the NOC and Return process of the Rules. Chapter II, "Notification of Change," of

the Rules (Operating Guidelines), and Chapter III, "Returns, Dishonored Returns, Contested

Dishonored Returns," of the Rules (Operating Guidelines), respectively, provide complete

details of the NOC and Return process. Except for an ACH Entry or Entries retransmitted by

the Originator in accordance with the requirements of this Section V.J., the Bank shall have

no obligation to retransmit a Returned ACH Entry or Entries to the ACH Operator if the Bank

complied with the terms of this Section with respect to the original ACH Entry.

1. Upon receipt of any ACH Return Entry, the Originator shall act on such ACH Return Entry

as applicable, including, but not limited to, handling items returned as unauthorized

and/or revoked in accordance with the Rules. The Originator shall bear full responsibility


for initiating items that are unauthorized and/or revoked. Originator shall be aware of,

and beholden to, the unauthorized return ratio threshold stated in the Rules.

2. Upon receipt of an ACH Return Entry for Insufficient Funds or Uncollected Funds

purposes, the Originator shall not re-initiate such ACH Entry or Entries more than two

times from the initial ACH Entry and in no case after 180 days of the Settlement Date of

the original Entry. The Originator shall bear full responsibility of re-initiating Insufficient

Funds or Uncollected Funds ACH Entries in accordance with the Rules.

3. Upon receipt of an NOC Entry, the Originator shall correct the account details of such

ACH Entry, if applicable, within six (6) Business Days from the Settlement Date of the

NOC Entry or prior to initiating the next ACH Entry to the Receiver's account, whichever

is longer.

4. The Originator acknowledges that it shall refer to the current Rules for a complete and

current list of Return Reason Codes, Dishonored Return Reason Codes, Contested

Dishonored Return Reason Codes, Notification of Change Codes, and Refused

Notification of Change Codes.

5. The Originator shall provide immediately available funds in the account(s) of the

Originator to offset any debit ACH Return Entries originated by the Originator.

K. REJECTED ACH BATCHES AND/OR FILES.

1. The Originator shall provide ACH Batches and/or Files in the medium set forth in Section

V.V. ACH Batches and/or Files not received in the specified format and medium may be

rejected by the Bank in its sole discretion. If an ACH Batch and/or File is rejected for any

reason, it is the responsibility of the Originator to remake and resubmit a valid ACH Batch

and/or File. Please refer to Section V.V.

2. If at any time prior to transmitting an ACH Batch and/or File to the ACH Operator, the

Bank determines, in its sole discretion, that the transmission of such ACH Batch and/or

File may expose the Bank to liability or risk of loss, the Bank shall have the absolute right

to reject such ACH Batch and/or File without penalty. The Bank would be exposed to

liability or risk of loss, for purposes of this Section V.K.2., in circumstances including, but

not limited to, the insolvency or bankruptcy of the Originator, or the garnishment or

placement of a judgment lien on any account held by the Originator at the Bank.

3. The Bank may reject any ACH Batch and/or File: that exceeds established limits set by

the Bank; that contains an ACH Entry Type that is not approved; where the Originator's

name and identification number contained in the Company/Batch Header Record does

not match the name and identification number of the Originator in the Bank's Treasury

Management System; that contains an invalid Effective Date; or for any other reason

Bank deems appropriate, in its sole discretion.

L. REVERSALS AND DELETIONS.

1. The Originator shall have no right to cancel or amend any ACH Entry after its receipt by

the Bank. The Originator shall reimburse the Bank for any expenses, losses, or damages

the Bank may incur in effecting or attempting to effect the Originator's request to reverse

an ACH Batch and/or File. An ACH Batch and/or File may be reversed for two (2)

reasons only: (a) a majority of the ACH Batch and/or File contains erroneous data, and/or

(b) it is a duplicate ACH Batch and/or File. If the Originator discovers that any ACH Batch


and/or File it has initiated contains erroneous data (majority thereof) or is a duplicate

ACH Batch and/or File, it must notify the Bank within 24 hours of discovery. Should the

Bank be unable to stop the ACH Batch and/or File from processing, the Originator may

initiate a reversing ACH Batch and/or File, as provided for and abiding by the Rules and

Section V.V. An ACH Batch and/or File Reversal may be initiated by the Originator within

five (5) Business Days from the Settlement Date of the erroneous or duplicate ACH Batch

and/or File. The Originator shall supply the word "REVERSAL" in the "Company Entry

Description" field of the Company/Batch Header Record. Section V.A., provides details of

the ACH Batch and/or File Reversal process according to the Rules.

2. If the Originator discovers that an ACH Entry or Entries it has initiated contains erroneous

data or is a duplicate ACH Entry or Entries, the Originator may reverse the ACH Entry or

Entries. The reversing ACH Entry or Entries may be initiated within five (5) Business

Days from the Settlement Date of the erroneous or duplicate ACH Entry or Entries. The

Originator shall notify the Receiver(s) of the reversing ACH Entry or Entries no later than

the Settlement Date of the reversing ACH Entry or Entries.

3. When reversing a credit ACH Entry, Batch, and/or File it is possible that the funds may no

longer be available when the reversing ACH Entry, Batch, and/or File attempts to post to

the Receivers' account; therefore, the reversing ACH Entry, Batch, and/or File may be

returned to the Bank, on behalf of the Originator. In this case, the Originator's Account

will be charged for the amount of the ACH Entry, Batch, and/or File. Under such

circumstances, the Originator may need to pursue resolution of the reversing ACH Entry,

Batch, and/or File outside of the ACH Network.

M. REJECTED ENTRIES. The Bank reserves the right to reject any ACH Entry or Entries with or

without cause. In the event that the Bank rejects any ACH Entry or Entries for any reason, it

shall be the responsibility of the Originator to reinitiate the ACH Entry or Entries and the ACH

Batch and/or File that corresponds to such ACH Entry or Entries. Should the ACH Batch

and/or File be rejected due to an error caused by the Bank, the Bank shall be responsible to

reinitiate the ACH Batch and/or File. In either case, the Originator must supply sufficient

information to the Bank, upon request, to recreate the ACH Entry or Entries and the

corresponding ACH Batch and/or File. The Bank will use its best effort to process any

reinitiated ACH Entry or Entries and its corresponding ACH Batch and/or File in a timely

manner. The Bank shall have no liability to the Originator by reason of the rejection of any

such ACH Entry or Entries and/or its corresponding ACH Batch and/or File. The Originator is

required to retain copies of its ACH Entries, Batches, and/or Files submitted for processing

for a minimum of 90 days following the Settlement Date as provided herein, and shall provide

such data to the Bank upon its request within five (5) Business Days.

N. THE ACCOUNT. The Bank may, at its sole discretion and without prior notice or demand,

obtain payment of any amount due and payable to it under this Section by debiting the

Account, and shall credit the Account for any amount received by the Bank by reason of the

Return of an ACH Entry transmitted by the Bank for which the Bank has previously received

payment from the Originator. Such credit shall be made as of the day of such receipt by the

Bank. The Account shall be maintained by the Originator at the Bank. The Originator shall at

all times maintain a balance of available funds in the Account sufficient to cover its payment


obligations under this Section. In the event there are not sufficient available funds in the

Account to cover the Originator's obligations under this Section, the Originator agrees that the

Bank may debit any other account maintained by the Originator with the Bank or any affiliate

of the Bank or the Bank may exercise its right of set-off without any notice to the Originator

against any amount it owes to the Originator, in order to obtain payment of the Originator's

obligations under this Section. The Originator shall provide immediately available funds in the

Offset Account maintained at the Bank to offset any credit ACH Entries originated or as

stated in ACH Block and Transaction Filtering Authorization. Similarly, the Originator shall

promptly provide immediately available funds in the Account to indemnify the Bank in the

event any ACH Entry or Entries is rejected after the Bank has permitted the Originator to

withdraw immediately available funds, should funds not be available in the Originator's

accounts to cover the amount of the rejected ACH Entry or Entries.

O. ACCOUNT RECONCILIATION. ACH Entries transmitted by the Bank or credited to a

Receiver's account maintained with the Bank will be reflected on the Originator's periodic

statement issued by the Bank with respect to the Account pursuant to this Section. The

Originator agrees to notify the Bank promptly of any discrepancy between the Originator's

records and the information shown on any periodic statement. If the Originator fails to notify

the Bank of any discrepancy within twenty-one (21) days of receipt of a periodic statement

containing such information, the Originator agrees that the Bank shall not be liable for any

other losses resulting from the Originator's failure to give such notice or any loss of interest or

any interest equivalent with respect to an ACH Entry shown on such periodic statement. If the

Originator fails to notify the Bank of any such discrepancy within 21 days of receipt of such

periodic statement, the Originator shall be precluded from asserting such discrepancy against

the Bank. This Section V.O. shall not be construed to limit in any way the Originator's duties

and obligations contained in this Section and under applicable law.

P. PROCESSING, TRANSMITTAL AND SETTLEMENT BY THE BANK.

1. The Bank shall: (i) process any ACH Entry, Batch, and/or File initiated by the Originator

or the Originator's Third-Party Service Provider that conforms with the procedures and

specifications set forth in the Rules and Section V.R. and Section V.V., (ii) transmit such

ACH Entry, Batch, and/or File as an ODFI to the ACH Operator or to an ACH Third Party

Service Provider, and (iii) handle such ACH Entry, Batch, and/or File as provided in the

Rules.

2. The Bank shall transmit any ACH Entry, Batch, and/or File to the ACH Operator on the

date released and/or uploaded by the Originator prior to the Effective Date of each ACH

Entry, Batch, and/or File provided: (i) such ACH Entries, Batches, and/or Files are

received by the Bank's related Cut-Off Time as set forth in Section V.V. on a Business

Day; (ii) The release and/or upload date of such ACH Entries, Batches, and/or Files is a

Business Day (iii) the ACH Operator is open for business on such Business Day; and (iv)

the Bank receives such ACH Entries, Batches, and/or Files in the appropriate time-frame,

as set forth in Section V.V.

3. If any of the requirements of clauses (i), (ii) or (iii) of Section V.P. are not met, the Bank

shall use reasonable efforts to transmit such ACH Entries, Batches, and/or Files to the


ACH Operator by the next processing day that is also a day on which the ACH Operator

is open for business ("Business Day").

4. The Originator shall indemnify the Bank, its employees, officers and directors, if the Bank

incurs any financial loss or liability due to the breach, with respect to any ACH Entries,

Batches, and/or Files initiated by the Originator, of any of the warranties of an ODFI

contained in the Rules, except those due solely to the negligence of the Bank. This

includes reimbursement by the Originator to the Bank of any fines imposed on the Bank

due to breaches of the Rules by the Originator or any Third Party acting on behalf of the

Originator. This indemnification is in addition to any other indemnification rights that are

provided for in this Section.

5. The Originator will receive immediately available funds for any debit ACH Entries initiated

by it not later than the Settlement Date of such ACH Entries. Notwithstanding the

foregoing, the Bank may place a hold on any account held by the Originator at the Bank

in the Bank's sole discretion, and may impose other conditions on the Originator's

withdrawal of funds in the Bank’s sole discretion.

Q. PAYMENT FOR SERVICES. The Originator shall pay the Bank the charges for the services

provided in connection with the ACH ODFI services. All fees and services are subject to

change without prior notice to Originator. Such charges do not include, and the Originator

shall be responsible for payment of, any sales, use, excise, value added, utility or other

similar taxes relating to such services, and any other fees or charges provided for in this

Section.

R. SECURITY. The Originator and the Bank shall comply with the security procedure described

in Section V.R. The Originator acknowledges that the purpose of the security procedure is for

verification of data authenticity and not to detect errors within the transmitted ACH Entries,

Batches, and/or Files. No security procedure for detection of any such error has been agreed

upon between the Originator and the Bank. The Originator is strictly responsible to establish

and maintain the procedures to safeguard against unauthorized or inaccurate transmissions.

The Originator warrants that no individual will be allowed to initiate transfers in the absence of

proper supervision and safeguards, and agrees to take reasonable steps to maintain the

confidentiality of the security procedures and any passwords, codes, security devices and

related instructions provided by the Bank in connection with the security procedures

described in Section V.R. If the Originator believes or suspects that any such information or

instructions have been known or accessed by unauthorized persons, the Originator agrees to

notify the Bank immediately by telephone, followed by written confirmation to be mailed to

Bank within five (5) Business Days from date of verbal notification. The occurrence of

unauthorized access will not affect any transfers made in good faith by the Bank prior to

receipt of such notification and within a reasonable time period to prevent unauthorized

transfers. The Originator shall, upon request by the Bank, provide the Bank the Originator's

processing schedule, if the Originator has a processing schedule.

S. COMPLIANCE WITH SECURITY PROCEDURE. If an ACH Entry, Batch, and/or File (or a

request for cancellation or amendment of an ACH Entry, Batch, and/or File) received by the

Bank purports to have been transmitted or authorized by the Originator, it will be deemed


effective as the Originator's ACH Entry, Batch, and/or File (or request) and the Originator

shall be obligated to pay the Bank the amount of such ACH Entry, Batch, and/or File even

though the ACH Entry, Batch, and/or File (or request) was not authorized by the Originator,

provided the Bank accepted the ACH Entry, Batch, and/or File in good faith and acted in

compliance with the security procedure established by the Bank and the Originator in Section

V.R. with respect to such ACH Entry, Batch, and/or File. If an ACH Entry, Batch, and/or File

(or request for cancellation or amendment of an ACH Entry, Batch, and/or File) received by

the Bank was transmitted or authorized by the Originator, the Originator shall pay the Bank

the amount of the ACH Entry, Batch, and/or File whether or not the Bank complied with the

security procedure referred to in Section V.R. with respect to that ACH Entry, Batch, and/or

File and whether or not that ACH Entry, Batch, and/or File was erroneous in any respect or

that error would have been detected if the Bank had complied with such procedure.

Transmittals with authorized signature(s) may be required as an additional method used to

verify authenticity of the communicated data.

T. COMMUNICATION SECURITY. In addition to the security procedures set forth in this

Section, the Originator must comply with the security procedures set forth in Section I.G. of

these Terms and Disclosures, as amended by the Bank. The Originator's failure to comply

with the security procedures shall result in Originator being responsible for any liability, loss

or damage resulting from the failure to comply with such security procedures. File Transmit

Method - through the Bank's Treasury Management Systems and designated Processors.

The Bank will not create and/or submit any payment information for the Originator. In the

event the Originator is unable to transmit any ACH Batch and/or File due to a complication

and/or malfunction of the Originator's equipment and/or software, including, but not limited to,

any complication and/or malfunction of a Third-Party Service Provider, the Originator must

have a contingency plan for transmitting its ACH Entries Batches, and/or Files. It is the

Originator's sole responsibility to decide which option (if any) it chooses to use and the Bank

shall be held harmless from any loss the Originator suffers as a result of such decision. If the

Originator does choose an alternate method to transmit its ACH Entries, Batches, and/or

Files, it shall notify the Bank prior to transmission. The items that follow may be of use to the

Originator when developing a contingency plan:

1. If the issue is with the Originator's Internet service, try going to different location to

access the Internet through a different Internet service.

2. If the issue is that the electrical power is out, try going to a different location that has

power.

3. If a payroll Batch and/or File is involved, consider issuing checks or sending wires.

4. Ensure that appropriate personnel of Originator are available to initiate, approve and

release Originator's ACH Entries, Batches and/or Files by the Bank's cut-off time.

U. ACH THIRD-PARTY SERVICE PROVIDER OR ACH THIRD-PARTY SENDER. With the

prior written approval of the Bank, when an ACH Third-Party Service Provider or ACH Third-

Party Sender acts on behalf of the Originator with respect to initiating any ACH Entry, Batch,

and/or File to the Bank or Bank's agent, the Originator acknowledges and agrees in this

Section that it has executed an ODFI/ACH Third-Party Sender Addendum, a written

agreement with its ACH Third-Party Service Provider or ACH Third-Party Sender binding both


the Originator and ACH Third-Party Service Provider or ACH Third-Party Sender to comply

with the Rules. The Originator indemnifies the Bank of any fines imposed on the Bank due to

breaches of the Rules by the Originator or any ACH Third Party Service Provider acting on

behalf of the Originator. This indemnification is in addition to any other indemnification rights

that are provided for in this Section. Bank reserves the right at Bank’s sole discretion, to

periodically, among other things, conduct enhanced due diligence and impose additional

requirements on Customer and its customers.

V. LOGISTICAL INFORMATION.

1. Cut-off and Release Times. The Bank's Cut-off Time for receiving ACH Batches and/or

Files from the Originator is 5:30 p.m. Central Standard Time each Business Day. Any

ACH Entry, Batch, and/or File received after the current Business Day's Cut-off Time

shall be processed the next available processing day, with a Settlement Date of one to

two (1 to 2) Business Days from the process date.

(i) ACH Entries shall be released to the ACH Operator pursuant to the following

timeframes:

(a) Credit = not more than two (2) Business Days prior to Effective Date of the

ACH Entry.

(b) Debit = not more than one (1) Business Day prior to Effective Date of the

ACH Entry.

(ii) In order for the Bank to initiate any ACH Entry, Batch, and/or File on behalf of the

Originator to the ACH Operator in accordance with the timeframes set forth above,

the Bank must receive: (1) any debit ACH Entry no less than one (1) Business Day

prior to the Effective Date of the ACH Entry; and (2) any credit ACH Entry no less

than two (2) Business Days prior to the Effective Date of the ACH Entry.

(iii) Any ACH Entry, Batch, and/or File received by the Bank with an Effective Date that is

not a valid Business Day shall be processed on the next available processing day,

with a Settlement Date of one to two (1 to 2) Business Days from the process date.

2. Warehouse of Batches. The maximum number of days an ACH Batch may be submitted

to the Bank and warehoused prior to the Effective Date is 30 days. ACH Batches

received prior to release timeframes set forth above will be warehoused.

3. Returns and Notification of Change. The Bank will deliver to the Originator ACH Return

and Notification of Change (“NOC”) details that it receives from the ACH Operator on the

day of receipt via the Bank's Internet Banking System. Upon receipt of an NOC the

originator is required to investigate the incorrect data and make the correction to the ACH

Entry, when applicable, within six business days, or prior to initiating the next ACH entry

to the Receiver, which is later.

4. Closures. Information on Bank closures (Federal holidays, early closures, and the like)

may be found through the Bank's Internet Banking System (banner and/or message

area) or the Bank's Website banksnb.com.

5. Medium and Format. ACH Batches and/or Files received by the Bank must be in a

NACHA formatted file that is in compliance with the Rules, must be balanced unless

Bank has agreed otherwise prior to receipt of ACH Batch and/or File by Bank, and

comply with any other specifications stated by Bank.


W. BANK RESPONSIBILITIES; LIABILITY; LIMITATIONS ON LIABILITY; INDEMNITY.

1. In the performance of the services required by this Section, the Bank shall be entitled to

rely solely on the information, representations, and warranties provided by the Originator

pursuant to this Section, and shall not be responsible for the accuracy or completeness

thereof. The Bank shall be responsible only for performing the services expressly

provided for in this Section, and shall be liable only for its gross negligence or willful

misconduct in performing those services. The Bank shall not be responsible for the

Originator's acts or omissions (including without limitation the amount, accuracy,

timeliness of transmittal or authorization of any ACH Entry received from the Originator)

or those of any other person, including without limitation any Federal Reserve Bank,

Third Party Service Provider, ACH or transmission or communications facility, any

Receiver or RDFI (including without limitation the Return of an ACH Entry by such

Receiver or RDFI), and no such person shall be deemed the Bank's agent.

2. ORIGINATOR INDEMNIFICATION OBLIGATIONS. ORIGINATOR WILL INDEMNIFY,

DEFEND AND HOLD HARMLESS THE BANK, ITS SHAREHOLDERS, AFFILIATES

AND SUBSIDIARIES, AND THEIR RESPECTIVE DIRECTORS, OFFICERS,

EMPLOYEES, SHAREHOLDERS, MEMBERS, LENDERS, PARTNERS, ATTORNEYS,

AGENTS, SUCCESSORS, ASSIGNS AND CORRESPONDENTS (COLLECTIVELY,

THE "BANK INDEMNIFIED PARTIES") HARMLESS FROM AND AGAINST ANY AND

ALL CLAIMS, DAMAGES, DEMANDS, JUDGMENTS, LIABILITIES, LOSSES AND

EXPENSES (INCLUDING ATTORNEY'S FEES) RESULTING DIRECTLY OR IN

DIRECTLY FROM: (1) ANY WILLFUL MISCONDUCT, NEGLIGENCE, ACTION OR

OMISSION ON THE PART OF ANY INDIVIDUAL WHO HAS BEEN LISTED, IN ANY

DOCUMENT OR AGREEMENT PROVIDED BY ORIGINATOR TO BANK, AS

PERSONS AUTHORIZED TO ACT ON ORIGINATOR'S BEHALF WITH RESPECT TO

ACH ENTRIES; (2) ACTS OR OMISSIONS BY THE BANK IN CARRYING OUT ITS

OBLIGATIONS HEREUNDER, EXCEPT FOR THE BANK'S GROSS NEGLIGENCE OR

WILLFUL MISCONDUCT; (3) ORIGINATOR'S ACTS OR OMISSIONS (INCLUDING

WITHOUT LIMITATION THE AMOUNT, ACCURACY, TIMELINESS OF TRANSMITTAL

OR AUTHORIZATION OF ANY ACH ENTRY RECEIVED FROM THE ORIGINATOR);

(4) ORIGINATOR'S FAILURE TO OBSERVE ANY PROVISION OF THE AGREEMENT,

INCLUDING, WITHOUT LIMITATION, ITS BREACH OF ANY REPRESENTATION,

WARRANTY OR COVENANT HEREUNDER; (5) ANY CLAIM OF ANY PERSON THAT

THE BANK IS RESPONSIBLE FOR ANY ACT OR OMISSION OF THE ORIGINATOR,

ANY THIRD-PARTY SERVICE PROVIDER ACTING ON BEHALF OF THE

ORIGINATOR OR ANY OTHER PERSON DESCRIBED IN THIS SECTION V.W.; AND

(6) CLAIMS OF ANY PERSON, INCLUDING WITHOUT LIMITATION ANY FEDERAL

RESERVE BANK, THIRD-PARTY SERVICE PROVIDER, ACH OR TRANSMISSION

OR COMMUNICATIONS FACILITY, ANY RECEIVER OR RDFI (INCLUDING WITHOUT

LIMITATION THE RETURN OF AN ACH ENTRY BY SUCH RECEIVER OR RDFI),

RELATED TO OR ARISING OUT OF ACH ENTRIES OR OTHER TRANSACTIONS

MADE UNDER THIS SECTION. ORIGINATOR'S INDEMNIFICATION OBLIGATIONS

HEREUNDER SHALL INCLUDE THE PAYMENT OF ALL COSTS OF DEFENSE, IF

ANY, INCLUDING WITHOUT LIMITATION, ALL REASONABLE AND NECESSARY

ATTORNEY'S FEES, COURT COSTS, ACCOUNTING FEES, CLASS ACTION COSTS


AND EXPERT FEES. NOTWITHSTANDING THE FOREGOING, ORIGINATOR'S

OBLIGATIONS TO DEFEND THE BANK HEREUNDER SHALL EXTEND WITHOUT

LIMITATION TO ALLEGATIONS OF OMISSIONS, NEGLIGENCE, GROSS

NEGLIGENCE, AND INTENTIONAL ACTS OF THE BANK OR THE OTHER BANK

INDEMNIFIED PARTIES, INCLUDING THE SOLE OR CONCURRENT NEGLIGENCE

OF ANY BANK INDEMNIFIED PARTY. IT IS CONTEMPLATED THAT ORIGINATOR'S

DEFENSE OBLIGATIONS UNDER THIS PROVISION MAY BE, BUT SHALL NOT

NECESSARILY BE, BROADER THAN ITS INDEMNIFICATION OBLIGATIONS

HEREUNDER.

3. The Bank shall be liable only for the Originator's actual damages; in no event shall the

Bank be liable for any consequential, special, incidental, punitive or indirect loss, damage

or lost profits which the Originator may incur or suffer in connection with this Section,

whether or not the likelihood of such damages was known or contemplated by the Bank

and regardless of the legal or equitable theory of liability which the Originator may assert,

including, without limitation, loss or damage from subsequent wrongful dishonor resulting

from the Bank's acts or omissions pursuant to this Section.

4. Without limiting the generality of the foregoing provisions, the Bank shall be excused from

failing to act or delay in acting if such failure or delay is caused by legal constraint,

interruption of transmission or communication facilities, equipment failure, war, terrorist

acts, emergency conditions or other circumstances beyond the Bank's control. In

addition, the Bank shall be excused from failing to transmit or delay in transmitting an

ACH Entry if such transmittal would result in the Bank's having exceeded any limitation

upon its intra-day net funds position established pursuant to present or future Federal

Reserve Board guidelines or in the Bank's reasonable judgment otherwise violating any

provision of any present or future risk control program of the Federal Reserve Board or

any rule or regulation of any other U.S. governmental regulatory authority.

5. Subject to the foregoing limitations, the Bank's liability for loss of interest resulting from its

error or delay shall be calculated by using a rate equal to the average Federal Funds rate

at the Federal Reserve Bank of New York for the period involved. At the Bank's option,

payment of such interest may be made by crediting the Account.

X. LIABILITY TO ORIGINATOR. In the event the Originator incurs any actual loss due to

mishandling of a particular ACH Entry or Entries by the Bank, the Bank's liability to the

Originator shall be limited to (a) liability for the Bank's gross negligence or willful misconduct;

(b) the amount recoverable by the Bank from the ACH Operator, or any Third Party pursuant

to the Rules; or (c) amounts recoverable under any indemnity agreement but, in no event

shall the Bank be liable for any consequential, special, incidental, punitive or indirect loss or

damage incurred or suffered by the Originator. Compensation shall be calculated using the

compensation rules provided in the Rules.

Y. COOPERATION IN LOSS RECOVERY EFFORTS. In the event of any damages for which

the Bank or the Originator may be liable to each other or to a Third Party pursuant to the

services provided under this Section, the Bank and the Originator will undertake reasonable

efforts to cooperate with each other, as permitted by applicable law, in performing loss


recovery efforts and in connection with any actions that the relevant party may be obligated to

defend or elects to pursue against a Third Party.

Z. TERMINATION. These ACH ODFI Services are terminable upon 30 days written notice by

either party, provided that applicable portions of this Section shall remain in effect with

respect to any ACH Entries initiated by the Originator, and received by the Bank, prior to such

termination. In addition, any requirement for the Originator to obtain and/or retain any

document, including, but not limited to, any authorization as described in Section V.H., shall

survive the termination of this Section. In addition, the Bank shall have the absolute right to

immediately suspend indefinitely and/or terminate this Agreement, without notice to the

Originator, if the Bank determines, in its sole discretion, that any one or more of the following

events has occurred:

1. Any material adverse change in the business, properties, assets, operations or condition,

financial or otherwise, of the Originator, including, but not limited to, insolvency,

bankruptcy, federal or state tax deficiency or inability to maintain Originator's existing

credit rating;

2. Any violation by the Originator of any state or federal law;

3. Any violation by the Originator of the Rules;

4. The Originator originates an ACH Entry whereby a reserve account or an account with a

hold placed upon it is set up as a condition to process such ACH Entry, and the

Originator subsequently withdraws funds from the reserve account or the account with

the hold; or

5. The Originator breaches the terms of this Section.

The Bank shall have the absolute right to delete any ACH Entry, Batch, and/or File that the Bank receives, or has already received and has yet to transmit to an ACH Operator, after the termination of this Section pursuant to this Section V.Z. In the event the Bank does delete an ACH Entry, Batch, and/or File pursuant to the right granted to the Bank in this Section V.Z., it will inform the affected party by either telephone or e-mail of such deletion. Additionally, the Bank shall have the absolute right to immediately and unilaterally place Customer in the Bank’s Prefunded ACH Origination Services program in accordance with Section V.BB. of these Terms and Disclosures.

AA. ACH ORIGINATION SYSTEM. The Originator acknowledges that the ACH Origination

System it uses to initiate ACH Entries, Batches, and/or Files was developed by persons other

than the Bank and that the Bank is not responsible for the performance, design, operation,

completeness, security, correctness or accuracy of the ACH Origination System. THE ACH

ORIGINATION SYSTEM IS PROVIDED TO THE ORIGINATOR ON A NON-EXCLUSIVE

AND ON AN "AS IS" BASIS AND WITHOUT ANY EXPRESS OR IMPLIED

REPRESENTATION OR WARRANTY WHATSOEVER, ALL OF WHICH ARE HEREBY

EXPRESSLY DISCLAIMED BY THE BANK. The Originator represents and warrants to the

Bank that the Originator will, before using the ACH Origination System, perform a test of the

system (including, without limitation, all updates) to determine and confirm its functionality,

capability, usefulness and suitability for the Originator's applications. The Originator agrees to

bear all risk, expense and burden arising from the Originator's use of the ACH Origination

System.


BB. PREFUNDED ACH SERVICES DISCLOSURE. The Bank may require a Customer to utilize

prefunded ACH Services as part of its ACH ODFI Origination Services, Customer agrees to

the following terms and conditions:

1. Prefunded ACH Credit Files. Prefunded ACH Credit File services are described as

processing an ACH credit file for payments contingent upon the availability of collected

funds in a designated DDA. The service has the following conditions and restrictions:

(i) Bank can debit Customer’s account the day of the Customer’s ACH files.

(ii) Holds on deposited checks will limit funds availability and checks written on the

designated DDA will impact account balances.

(iii) ACH credit files must be received by the stated cut-off time at a minimum of two

business days prior to the settlement date.

(iv) If Customer’s file is not processed due to insufficient funds in the designated account,

Customer may be required to re-initiate the file.

(v) IATs cannot be included in the transaction file.

2. Prefunded ACH Debit Files and Reserve Accounts. Prefunded ACH Debit File services

are described as processing an ACH debit file for receipt of funds from other parties’

bank accounts for which Customer is authorized to deduct payments. The service may be

contingent upon holding a portion of the funds received to cover potential returns over a

specified number of days in a reserve account. The service has the following conditions

and restrictions:

(a) At its discretion, Bank will determine the percentage of the funds received in the debit

file that will be held as well as the number of days over which the funds will be held to

cover potential returns.

(b) During the period of time the funds are held, they will not be available for Customer’s

use and will be released at the end of the predetermined timeframe.

(c) ACH debit files must be received by the stated cut-off time one business day prior to

the settlement date.

(d) IATs cannot be included in the transaction file.

Customer’s ACH credit files will not be processed until the above conditions are met. In

the event that the stated conditions are not met and the ACH credit file is not processed

or is delayed, Bank will not bear any liability for the fact that the file could not be

processed. Additionally, Bank will not bear any liability for the fact that funds were held

and unavailable for Customer’s use during the predetermined hold period. This applies to

both prefunded ACH credit files and ACH debit files. Failure to comply with the conditions

noted above may result in termination of ACH ODFI Origination Services or require

additional credit approval in order to continue using ACH services. Upon written

notification by Bank, Customer shall immediately establish a separate account funded

with an amount required to protect Bank against the risks associated with Customer’s

ACH operations (the “Reserve Account”). Such Reserve Account must be established by

the date requested by Bank, and the required Reserve Account amount expressly

includes any existing or anticipated Customer-related ACH returns, including all fees,

costs, fines and penalties assessed against either Customer or Bank associated with

such Customer-related ACH returns. The Reserve Account will not bear interest, and


Customer will not have any right or interest in the Reserve Account funds; provided that

upon satisfaction of all of Customer’s obligations under this Section, Bank will pay any

funds remaining in the Reserve account no sooner than ninety (90) days after the

effective date of termination of Customer’s ACH Services pursuant to the Rules and

Regulation E. Effective upon the establishment of any Reserve Account, Customer

irrevocably grants Bank a security interest in the Reserve Account and any and all funds

in the Account, together with the proceeds thereof. Customer also agrees to execute and

deliver to Bank such instruments and documents that Bank may reasonably request to

perfect and confirm the security interest and Bank’s right of setoff in the Reserve

Account. Customer understands and acknowledges that Customer’s failure to establish

and fund a Reserve Account immediately upon Bank’s request shall be grounds for

immediate termination of Customer’s ACH Services provided by Bank, with such

termination in Bank’s sole discretion.

CC. ACH SERVICES APPROVAL AND UNDERWRITING PROCESS.

1. Bank Approval and Monitoring of Customer’s ACH Operations Risk. Customer agrees

and acknowledges Bank shall only provide ACH Services to Customer subject to Bank’s

prior approval. To obtain approval from Bank, Customer is required to undergo Bank’s

screening and risk analysis process regarding Customer’s proposed ACH operations. In

addition, after any initial approval for ACH Services by Bank, Bank shall also, from time-

to-time and in its sole discretion (including the occurrence of certain events described in

subsection (c) below), undertake additional ACH operations credit and risk analysis

monitoring activities that are deemed necessary, in Bank’s sole and absolute discretion,

while Bank is providing ACH Services to an approved Customer. Customer agrees to

cooperate with Bank regarding any ongoing risk analysis activities by Bank, including

providing financial or other documents in a timely manner upon Bank’s request, granting

Bank authority to obtain financial or other documents on Customer’s behalf, and taking

any risk mitigation or other ACH Entry origination procedures as required by Bank.

2. ACH Operations Credit and Risk Criteria. Bank’s ACH operations credit and risk analysis

shall be based on certain factors deemed relevant by Bank in its sole discretion,

including, but not limited to, the following factors: (i) the credit worthiness, financial

condition and financial performance of Customer, particularly Customer’s capital

adequacy relative to Customer’s ACH activity volume; (ii) the nature, conduct and

geographic location of Customer’s business, including whether Customer engages in

certain high-risk ACH activities or transaction environments, or whether certain “Standard

Entry Class” (“SEC”) codes that Bank either deems to be high-risk or does not allow are

present in Customer’s ACH transactions; (iii) the historic level and dollar amounts of

Customer’s ACH returns, including (A) any return levels or dollar amounts in excess of

generally acceptable ACH return parameters (as determined by Bank in its sole

discretion), (B) a sudden increase in Customer’s ACH return levels, or (C) any ACH

return levels in excess of NACHA return rate thresholds that are not reduced within the

allowed timeframe under NACHA Rules; and (iv) whether Customer adheres to all

authorization requirements set forth herein.

3. Material Change in Credit and Risk Analysis Criteria. In the event a Customer approved

for ACH Services either fails to satisfy the minimum risk analysis criteria as required by


Bank, or if, in the opinion of Bank, Customer undergoes a material change in its

operations that Bank believes increases the risk of Customer’s ACH operations, then

Bank may, in its sole discretion, exercise its right to temporarily suspend Customer’s

ACH Services pending further investigation. Bank will inform Customer of the issue and,

after completing the investigation, may, in its sole discretion, take any and all of the

following actions: require Customer to pre-fund their ACH activities (as defined in Section

V.BB.); require Customer to establish a Reserve Account (as defined in Section V.BB.);

or terminate Customer’s ACH Services. Permanent termination of ACH services is may

be done immediately and without notice to Customer if Bank deems immediate

termination necessary to comply with the Rules. Events that constitute a material change

in a Customer’s business operations include, but are not limited to: (i) ACH return levels

that exceed what is determined by Bank to be generally acceptable; (ii) a significant or

sudden increase in Customer’s ACH return levels compared to Customer’s historic return

levels; (iii) significant changes in the nature of Customer’s business including types of

products and services or the transaction environment; or (iv) the occurrence of any other

event that Bank believes represents a material change in Customer’s financial

performance or financial condition.

VI. STANDING INSTRUCTIONS TRANSFER SERVICE TERMS

If Customer has requested and Bank has agreed to execute a future-dated single or recurring SI Funds Transfer (“Standing Instructions Funds Transfer” or “SI Funds Transfer”), either as a Wire Transfer or an ACH Entry, from Customer’s Account to an external account at another financial institution, Customer agrees to comply with the following:

A. AUTHORITY TO TRANSFER FUNDS. Customer understands that to authorize a SI Funds

Transfer, Customer must complete the Implementation Agreement. This authorization applies to

the Account identified in the Implementation Agreement. Customer authorizes Bank to execute

and charge to Customer’s Account any SI Funds Transfers designated in the Implementation

Agreement to transfer funds, provided the information in the Implementation Agreement is duly

completed and executed by an Authorized User in accordance with the procedures established

by Bank. Customer understands and acknowledges that Bank has no obligation to execute any

SI Funds Transfer that is not initiated in accordance with such procedures. Customer further

authorizes Bank to charge such Account for any applicable service fees for SI Funds Transfers

in accordance with Bank’s fee schedule in effect at the time of the SI Funds Transfer or in

accordance with any disclosures Customer receives at the time of the SI Funds Transfer.

B. SECURITY PROCEDURES. For all SI Funds Transfer requests, Bank may perform a call

back to an Authorized User to verify the request. Customer may also be required to provide

Bank with written and signed instructions from an Authorized User. Customer agrees that Bank

will not be liable for any delay in processing Customer’s SI Funds Transfer resulting from

compliance with these security procedures. Customer agrees that the use of these security

procedures to verify that Customer’s instructions in the Implementation Agreement have been

properly authorized is commercially reasonable for Customer. Customer further understands that

the security procedure is designed to verify the source of the request and not to detect errors in

the content of Customer’s instructions in the Implementation Agreement. Customer further


agrees to notify Bank promptly of any changes to the information provided by Customer in the

Implementation Agreement, in accordance with Section I.A.A (Notice; Communications) of these

Terms and Disclosures.

C. INFORMATION SUPPLIED BY CUSTOMER. Customer agrees that Bank will rely on the

information Customer has provided in the Implementation Agreement to execute the SI Funds

Transfer. Customer understands that it is Customer’s responsibility to provide Bank with

accurate information regarding that transfer, including the account number of the beneficiary of

the SI Funds Transfer (such as “IBAN”) and the number (such as “BIC” or “SORT”) identifying

the beneficiary institution, since payment will be processed based on the number(s) provided by

Customer. Should Customer provide an incorrect account number and/or Beneficiary Bank

identifier, Customer understands that any losses resulting from the funds being credited to the

wrong account will be Customer’s responsibility.

D. EXECUTION OF A STANDING INSTRUCTIONS FUNDS TRANSFER REQUEST. If the

date of a SI Funds Transfer falls on a day that is not a Business Day, Customer understands that

Customer’s request will be executed on the next Business Day. Bank will make the

determination to pay or reject Customer’s SI Funds Transfer request on the day on which it is

executed based on Customer’s available balance at the time the SI Funds Transfer request is

processed.

E. REJECTION OF SI FUNDS TRANSFER REQUEST. Bank reserves the right to reject

Customer’s request for a SI Funds Transfer if Customer has insufficient available funds in

Customer’s account, if Customer’s Implementation Agreement is received by Bank by a

communication means not authorized by the bank, if Customer’s Implementation Agreement is

unclear or incomplete, if Bank is unable to verify Customer’s SI Funds Transfer request, or if for

any reason the request is unsatisfactory to Bank.

F. RESPONSIBILITY FOR SI FUNDS TRANSFERS. To the fullest extent permitted by law,

Customer agrees to assume full responsibility and be bound by all SI Funds Transfer requests

issued in Customer’s name, whether or not authorized, provided the SI Funds Transfer was

executed by Bank in good faith and in accordance with the procedures set forth in these Terms

and Disclosures.

G. DELAYS, NON-EXECUTION OF SI FUNDS TRANSFER REQUESTS. While Bank will

handle Customer’s SI Funds Transfer request as expeditiously as possible, Customer agrees that

Bank will not be responsible for any delay or failure to execute Customer’s SI Funds Transfer

request, or delay in making the funds available to the beneficiary due to circumstances beyond

the control of Bank or any intermediary or Beneficiary Bank handling the transfer, including,

without limitation, any inaccuracy, interruption, delay in transmission, or failure in the means of

transmission of Customer’s SI Funds Transfer request to the bank or execution of such request

by the bank, whether caused by strikes, power failures, equipment malfunctions, or delays

caused by one or more institution’s fraud screening procedures or compliance procedures for

anti-money laundering, economic sanctions or similar laws. Customer further agrees that Bank

may refuse to process or delay processing any request if it would violate any guideline, rule,


policy, or regulation of any government authority or SI Funds Transfer system. TO THE EXTENT

PERMITTED BY LAW, BANK MAKES NO WARRANTIES, EXPRESS OR IMPLIED, WITH

RESPECT TO ANY MATTER IN CONNECTION WITH CUSTOMER’S FUNDS TRANSFER.

H. DESIGNATION OF BENEFICIARY BANK FOR SI FUNDS TRANSFERS. Customer must

specify a financial institution (hereafter referred to as “Beneficiary Bank”) in the Implementation

Agreement for the financial institution to receive a SI Funds Transfer. The Beneficiary (recipient)

Bank must be a member of the Federal Reserve System, Clearing House Interbank Payment

System (“CHIPS”), or a correspondent bank of such a member. Customer may request the

Beneficiary Bank to credit an account or to hold the funds for the beneficiary. In either case, the

Beneficiary Bank is responsible for following Customer’s instructions and notifying the beneficiary

when the funds become available. If Customer identifies a beneficiary by name and account

number, the Beneficiary Bank may pay the funds to the person identified by the account number

and Customer’s payment may be final even if the account number provided by Customer does not

correspond to the beneficiary. (The Beneficiary Bank is not obligated to verify that the account

number belongs to Customer’s beneficiary.) If the Beneficiary Bank is unable to locate an account,

the funds may be returned. Any losses resulting from any incorrect information Customer provides

regarding its beneficiary are Customer’s responsibility.

I. CURRENCY OF TRANSFER. SI Funds Transfers to beneficiaries within the United States

are made only in U.S. dollars

J. MEANS OF TRANSFER. Bank uses a variety of banking channels and facilities but will

ordinarily use electronic means to make a SI Funds Transfer. Customer agrees that Bank may

choose any conventional means that Bank deems suitable to transfer Customer’s funds to the

beneficiary. Because Bank does not maintain banking relations with every bank, it may be

necessary to use one or more intermediary banks before the funds are transferred to the

Beneficiary Bank. After Bank transmits the SI Funds Transfer to the intermediary bank, it will be

that bank’s responsibility to ensure that the SI Funds Transfer is completed. Customer understands

that there may be fees imposed by these other banks for handling Customer’s SI Funds Transfer

and that these fees may be deducted from the transfer amount before it is credited to the

beneficiary.

K. CANCELLATION OR AMENDMENT OF SI FUNDS TRANSFER REQUESTS. Customer

may cancel or amend Customer’s SI Funds Transfer request only if Bank receives Customer’s

request prior to Bank’s execution of the SI Funds Transfer request and at a time that provides

Bank with a reasonable opportunity to act upon that request. If Customer’s SI Funds Transfer

request has already been executed by Bank, Customer understands and agrees that the request

to cancel or amend the SI Funds Transfer will be effective with the voluntary consent of Bank

and the Beneficiary Bank. Bank will first have to check with the Beneficiary Bank to determine

whether or not the Beneficiary Bank will return Customer’s funds. If the Beneficiary Bank

confirms that the funds are returnable and the funds are returned to Bank, Bank will return the

funds to Customer. The amount that is returned to Customer may be less than Customer

originally transferred because of service charges of the Beneficiary Bank and/or Bank.

Customer’s returned funds will be in U.S. dollars. Bank shall not be liable to Customer for any


loss resulting from the failure of the Beneficiary Bank to accept a cancellation or amendment of

Customer’s SI Funds Transfer request.

L. CLAIMS WITH RESPECT TO SI FUNDS TRANSFERS. Customer agrees that within thirty

(30) days after Customer receives notification in Customer’s periodic account statement that the SI

Funds Transfer request has been executed, Customer will notify Bank of any errors, delays, or if

Customer needs additional information related to that SI Funds Transfer. If Customer’s SI Funds

Transfer request was delayed or erroneously executed as a result of erroneous information provided

by Customer, Customer understands that it may be responsible for the amount of that transfer and

any associated fees. If Customer’s SI Funds Transfer request was erroneously executed or delayed

as a result of Bank’s error, Bank’s sole obligation to Customer is to pay or refund such amounts as

may be required under the Uniform Commercial Code Article 4A or by other applicable law. Any

claim for interest payable by Bank shall be at Bank’s published savings account rate in effect within

the state of the home branch for the account from which the SI Funds Transfer was made. IN NO

EVENT SHALL BANK BE RESPONSIBLE FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL, OR

PUNITIVE DAMAGES OR EXPENSES IN CONNECTION WITH CUSTOMER’S FUNDS

TRANSFER.

M. APPLICABLE LAW. In addition to the applicable law provisions contained in Section I.T

(Applicable Law) of these Terms and Disclosures, Funds transfers authorized under these Terms

and Disclosures may involve one or more SI Funds Transfer systems, such as Fedwire or the

Clearing House Interbank Payments Systems (“CHIPS”). In these cases, the rules of the

appropriate SI Funds Transfer system(s) will apply along with applicable law. Subpart B of

Regulation J and Article 4A of the Uniform Commercial Code apply to SI Funds Transfers made

through Fedwire. Funds transfers made through CHIPS are governed by and subject to CHIPS

Rules and Administrative Procedures and the laws of the State of New York, including Article 4A

of the Uniform Commercial Code.

VII. CHECK CAPTURE SERVICE TERMS

A. CHECK CAPTURE SERVICE. If Customer has requested and been approved to use the

Check Capture Service, referred to in these Terms and Disclosures as the (“Remote Deposit

Capture” or "RDC") Service. Customer will have the ability to scan images of checks, create

deposits, and electronically transfer those deposits for credit to one or more of Customer's

accounts maintained at Bank and designated in writing by Customer (the "RDC Account").

Images of checks scanned by Customer will be transmitted through a secure, browser based

user interface. Customer understands and agrees that the RDC Service may be provided

directly to Customer by Bank or by Bank's designated third party vendor. The features,

functions and specifications of the RDC Service are within Bank's sole and absolute

discretion. Customer’s ability to utilize the RDC Service shall be subject to the transaction

limits contained in the Implementation Agreement.

B. THE RDC ACCOUNT. Customer must designate and maintain at least one DDA as the RDC

Account to utilize the RDC Service. Customer may designate more than one DDA as an RDC

Account for the RDC Service; provided, however, that Customer must contact Bank to add or


delete RDC Accounts. Customer understands and agrees that deposits made via the RDC

Service may only be made to a designated RDC Account.

C. SCANNERS AND OTHER EQUIPMENT AND SOFTWARE. Customer agrees to use only

equipment and software compatible with Bank systems and equipment and which have been

approved by Bank. Bank shall have no liability or responsibility for any damages, losses,

claims or causes of action experienced by Customer because of any software or equipment

used with the RDC and related services and transactions contemplated by this Agreement,

and Customer’s sole recourse regarding any such damages, losses, claims or causes of

action shall be against the manufacturer of such software and equipment. Customer

acknowledges and agrees that Bank shall not be liable for the maintenance, repair,

performance, or malfunction of third party software, scanners, or other equipment used by

Customer in connection with the RDC Service.

D. SECURITY. Customer acknowledges that the RDC Service is subject to the terms and

conditions set forth in these Terms and Disclosures, including, without limitation, the Security

Procedures set forth in Section I.G of these Terms and disclosures, and Customer agrees to

comply with such Security Procedures. Bank may recommend certain types of other security

procedures. It is Customer's responsibility to promptly and completely implement any such

security procedures. The Customer's failure to comply with the Security Procedures shall

result in Customer being responsible for any liability, loss or damage resulting from the failure

to comply with such security procedures.

E. PROCESSING PROCEDURES. Customer agrees to comply with all processing and

operating procedures set forth in any User Guide. Without limiting the foregoing, Customer

agrees to adhere to the following minimum procedures:

1. Checks deposited into an RDC Account must be payable to Customer, a reasonable

variation thereof, (or to a 'Specified Third Party' named in an authorizing agreement

adopted by the Customer and acceptable to Bank).

2. Customer must properly scan and transmit all information from the front and back of the

original check and ensure that all images submitted are of acceptable quality. The RDC

Service may reject any items received from Customer that cannot be processed by Bank

or its designated processor due to image or MICR quality concerns. Examples of images

which are not acceptable for deposit (non-conforming items) can be found at

https://www.banksnb.com. Customer may be assessed a fee for submitting any duplicate

or non-confirming items. Customer agrees to be available to rescan or otherwise present

original checks for those items that cannot be processed due to image, MICR or other

quality concerns.

3. Customer may create, approve and submit deposits up to the established cut-off time.

Customer understands and agrees that any deposit not submitted by Customer prior to

the established cut-off time will be considered received by Bank on the next "Business

Day" following Customer approval. For purposes of this Agreement, "Business Day"

means Mondays through Fridays, except Bank holidays.

4. Only United States dollar-denominated checks drawn on United States banks may be

deposited via the RDC Services. Bank assumes no responsibility for any check drawn on

a non-United States bank or checks payable in any currency other than United States


dollars (non-conforming items) that are deposited via the RDC Service, and customer

shall indemnify Bank for any losses suffered by Bank as a result of processing any

nonconforming item.

F. DEADLINES AND DISRUPTIONS. Bank will process deposits that are received by Bank

prior to the cut-off time established by Bank for accepting items deposited through the RDC

Service and provide ledger credit to Customer's RDC Account for the amount of such

deposits. Deposits received on a day that is not a Business Day or after the cut-off time for

RDC deposits will be considered received on the next Business Day. Availability of funds

deposited through the RDC Service will be determined by Bank's current funds availability

schedule. Bank reserves the absolute right to change the cut-off time for RDC deposits with

prior notice to Customer. Internet services are not guaranteed up-time services and can be

subject to service disruption of unspecified duration and severity. Such disruptions are

beyond the control of Bank. Bank assumes no responsibility for any losses suffered by

Customer for the disruption of internet services, equipment or electronic failures, or any other

condition beyond the control of Bank.

G. RECORD RETENTION. Customer agrees to maintain original checks for a period of 60

calendar days and allow Bank to review and inspect them during reasonable business hours.

Checks are to be stored in a secure site under lock and key. After the recommended

retention period, checks must be shredded and disposed of properly. Customer shall destroy

and dispose of the checks with a high degree of care, including selection and implementing

appropriate destruction and disposal procedures. Customer is required to implement such

procedure sot ensure that the checks are not accessed by unauthorized person during the

destruction and disposal process and, once destroyed, the checks are no longer readable or

capable of being reconstructed (e.g., through the use of competent shredding equipment).

H. AUDITING AND INTERNAL CONTROLS; FURTHER ASSURANCES. Bank reserves the

right to audit, inspect, and review Customer's files, records, systems and books with respect

to its use of the RDC service and its compliance with these Terms and Disclosures and

Implementation Agreement and all laws, rules and regulations applicable to Customer's use

of the RDC Service. Customer will provide, within the timeframe specified by the Bank, any

and all documentation as Bank may request, regarding Customer's compliance with these

Terms and Disclosures and Implementation Agreement and all laws, rules and regulations

applicable to Customer's use of the RDC Service. If requested by Bank, Customer will allow

Bank to perform an on-site audit of Customer’s RDC process at any location from which

Customer submits RDC deposits. Bank also reserves the right to require that Customer

implement changes to its internal controls and processes related to its use of the RDC

Service. Customer's failure to provide any requested documentation, to comply with Bank's

audit request or to implement reasonably requested changes to its internal controls and

processes related to its use of the RDC Service within the Bank's specified timeframe may

result in closure of the RDC Account and Customer's other accounts with the Bank.

I. CUSTOMER WARRANTIES AND INDEMNIFICATIONS. Customer is responsible for all the

warranties and indemnifications of a Reconverting Bank as defined in The Check Clearing for

the 21st Century Act ("Check 21 Law") and its implementing regulations found at 12 C.F.R.


Part 229, as the same may be amended. Customer warrants that the images it transmits to

Bank or its third party vendor are faithful recreations of the original paper item. Customer also

represents and warrants that duplicate images of the same item will not be presented for

payment to Bank or any other financial institution or entity, and that the original item, an

image of which has been transmitted to Bank or its third party vendor through the RDC

Service, will not be presented for payment to Bank or any other financial institution or entity.

Customer also represents and warrants that (a) checks processed using the RDC Service are

properly payable to Customer and are not third party checks (unless named as a 'Specified

Third Party' in an authorizing agreement adopted by Customer and acceptable to Bank); (b)

deposit totals accurately match the total of all items deposited; (c) if the customer alters

information, including check amounts and deposit totals, all such alterations are accurate and

are properly made; and (d) following any retention period required by applicable law and/or

this Agreement, original items will be destroyed in a manner that will render the items

unreadable and incapable of subsequent recreation or processing. In the absence of gross

negligence or willful misconduct on the part of Bank, Customer agrees to indemnify and hold

Bank and its third-party service providers harmless for (and agrees to immediately reimburse

Bank and/or any affected service provider for) all damages of any nature, including the cost

of reasonable legal fees incurred by Bank and such service provider, sought by any person or

entity against Bank or such service provider under applicable law or asserted under any legal

theory or as a result of breaches asserted against Bank or such service provider in

connection with Bank's and/or such service provider's provision of the RDC Service, including

damages from the presentment or negotiation of the original item by any person or resulting

from the submission of duplicate images by any person or resulting from claims that the

image or substitute item created from an image is not an accurate and unaltered recreation of

the item originally drawn by the drawee. Except as modified herein or otherwise modified by

a writing executed by Bank, all terms and provisions of the Master Treasury Management

Services Implementation Agreement and Master Treasury Management Services Terms and

Disclosures remain in full force and effect.

VIII. POSITIVE PAY SERVICE TERMS

A. THE SERVICE. The Bank agrees to provide various "Positive Pay Services" to the Customer

for the purposes of increasing the chance of identifying fraudulent or unauthorized checks

and/or electronic transfers drawn on selected Customer Deposit Account(s), as identified to

the Bank.

1. Check Module. Customer uploads a file of issued checks within the Positive Pay

application. Checks posted to the Customer’s applicable Deposit Account(s) are

compared to the Issued Check File and exceptions are presented to the Customer to

decide if the item should be returned.

2. ACH Module. Customer may define limited parameters to block or filter ACH

transactions presented to the bank for payment.

3. Reverse Positive Pay Module. Customer may download a file of paid items, which may

then be imported into the Customer’s accounting system.

4. Reconciliation Module. Reporting tools are provided which assist the Customer in

balancing the Deposit Account(s) subscribed to the Service.


B. PROCEDURES.

1. Issued Check File Customer Submission. Files delivered to the Bank shall be prepared

and submitted in compliance with the formatting as provided. Transmissions received by

the Bank after 4:00 P.M. Central Time may not be posted to the Issued Check File

(defined herein) until the next business day.

2. Check Module. For applicable Deposit Accounts identified whereby the Customer has

requested the Bank verify checks against an Issued Check File, the Customer agrees to

deliver or transmit the serial number, amount, date issued and status of each check by

Deposit Account number (such data cumulatively, the "Issued Check File") to the Bank in

the format agreed to by the Bank and the Customer. With the exception of checks

presented for immediate payment in person ("Teller Checks"), Issued Check File data

received by 4:00 PM Central Time each Business Day will be used to verify any check or

Electronic Check Presentment ("ECP") items posting to the applicable Deposit Account

that Business Day. Checks presented to Tellers will be cashed only if verified against

the most recent Issued Check File made available to Bank tellers and, if cashed, will be

posted to the applicable Deposit Account on the Business Day they are received. If the

online Issued Check File is unavailable, Bank’s tellers will follow normal check cashing

procedures. Bank reserves the right to cash any check presented to a Teller if the

amount of the check is below a Bank defined threshold, even if the check is not listed in

the Issued Check File. For items presented through ECP, the serial number on the

Customer’s Issued Check File must match the serial number on the MICR line of the

Customer’s checks as shown on the ECP item. The Customer acknowledges that Bank

has no controlled over what items are presented through ECP and what information is

provided with those items. The Customer also acknowledges that any stop payment

issued on a check will supersede any data transmitted hereunder.

3. ACH Module. As requested by the Customer, limited ACH blocks or filters can be created

which will stop external debits or credits (items not originated by or at the Bank) from

being allowed to process against a selected Customer Deposit Account. Possible

parameters which can be used to create blocks or filters include ACH Standard Entry

Class (SEC) code, transaction type (debit, credit, or both) and transaction amount. All

transactions originated by or at the Bank (including direct deposit settlement transactions)

are considered internal items and will not be matched against the Customer's maximum

and are processed, regardless of the amount.

4. Reverse Positive Pay Module. For applicable Deposit Accounts identified whereby the

Customer has requested the Reverse Positive Pay Module, Bank will make available to

Customer a report the Customer may download which will provide a listing of paid check

items. The format and data contained in the report will be determined by Bank in its sole

discretion.

5. Reconciliation Module. Three types of reports are available to assist with reconciling a

selected Customer Deposit Account.

a. Check Reconciliation - used to assist in balancing online account balances

with an account statement for check transactions only. The report displays

an activity summary of newly issued checks, paid checks, and


stopped/voided checks. The report also provides a total of outstanding

checks as of the reconciliation date.

b. Deposit Reconciliation – used to verify deposits made to an account by

location. Requires the use of location specific transaction codes on deposit

slips.

c. Account Reconciliation – used to assist in balancing online account balances

with an account statement for all transactions. The report displays an activity

summary with newly issued checks, paid checks, stopped checks, voided

checks, ACH debits and credits, miscellaneous debits and credits, deposits,

service charges, paid interest and taxes/withholding. The report also

provides a total of outstanding checks and the check register balance as of

the reconciliation date.

6. Exception Reporting. Each Business Day, for each Deposit Account for which the

Customer has requested the Service, the Bank will make available to the Customer, via

the Treasury Management System, an exception report (the "Exception Report") for the

prior Business Day for each Deposit Account for which the Customer has requested the

Service. The Exception Report will list (i) all check, Substitute Check (defined herein) and

ECP items posted to the applicable Deposit Account but not on the Issued Check File; (ii)

all check, Substitute Check and ECP items posted to the applicable Deposit Account that

are on the Issued Check File but for an amount different than that stated on the Issued

Check File; (iii) in the case of ACH where the Customer chooses to set Maximum Limits,

Substitute Check, ACH and/or ECP items exceeding the Maximum Limit; and (iv) all ACH

debits where the Customer chooses to block ACH debits.

7. Return Authorization for Exception Report Items. In the event the Customer wants to

return any item on the Exception Report, the Customer must notify the Bank of its intent

to return such item on or before the deadline stated in the Positive Pay system on the

Business Day that the Customer received such Exception Report. Such notification must

be made by an authorized Transactional User to the Bank via the Bank's Internet

Banking Services. Any items on the Exception Report not authorized for return by the

Customer will remain settled to the account.

C. SECURITY PROCEDURES. The Customer and the Bank shall comply with the following

Security Procedures with regard to the delivery/transmittal of Positive Pay files by the

Customer to the Bank.

D. TRANSMITTAL PROCEDURES. Through the Treasury Management System there is an

upload section where the Issued Check File may be uploaded. Customer may also choose to

enter the information directly into the Treasury Management System with the following data

required: (i) Check number (ii) Check Amount (iii) Account number (iv) Issue Date.

E. UPDATING ISSUED CHECK FILE(S). For each Deposit Account for which the Customer

requests certain Services hereunder, the Bank will pay Items presented for payment against

such Deposit Account in accordance with the terms of the Agreement. It is the responsibility

of the Customer to routinely and regularly update the "Issued Check File." The Bank is not

liable to the Customer or any third party for the payment or rejection of items consistent with


the terms of the Agreement, or for the erroneous payment or rejection of an item due to an

encoding error or posting error. Should the Customer fail to routinely update Issued Check

File(s), the Bank may terminate this Service immediately upon written notice to the Customer.

F. DOCUMENTATION REQUIREMENTS. Customer agrees to assist Bank in completing any

and all documentation requested by Bank in regards to an item Customer has elected to

return.

IX. DIGITAL LOCKBOX SERVICE TERMS

Bank and Customer agree that the provision by Bank and the use by Customer of the Bank’s Digital Lockbox™ Service described below shall be subject to the terms and conditions set forth in this Section. The options the Customer has elected to use as stated in the Implementation Agreement will determine which terms and conditions apply.

A. DEFINITIONS. The following words or phrases in this Section shall have the following

meanings:

1. Acceptable Payees. Individuals or entities named as payees on Checks whom Customer

has designated in writing as acceptable payees for the purpose of accepting deposits via

the Lockbox Services.

2. Acceptable Addressees. Individuals or entities named as addressees on correspondence

whom Customer has designated in writing as acceptable addressees for the purpose of

processing Paper Documents via the Lockbox Services. Acceptable Addressees are

designated in Implementation Agreement.

3. Check. A draft, payable on demand, and drawn on or payable through or at an office of a

bank.

4. Data. Checks and Paper Documents as defined herein and the scanned images and index

data created from them.

5. Debit Account. The account of Customer maintained at Bank which Bank may debit for

fees and costs incurred pursuant to this Agreement. The Debit Account is identified in the

Implementation Agreement. The Debit Account may be the same account as the Deposit

Account.

6. Deposit Account. The account of Customer maintained at Bank into which all Checks

processed via Lockbox Services under this Agreement will be deposited. The Deposit

Account is identified in the Implementation Agreement.

7. Image Files. The files transmitted or made available to Customer containing image of the

Checks and Paper Documents processed via the Lockbox Services. The format and type

of Image File is defined in the Implementation Agreement.

8. Image Management Software. The software system used by Bank to provide Data storage

and retrieval access to Customer, including any updated or upgraded versions thereof.

9. Lockbox Services. Includes (i) the process of collecting mail addressed to Customer; (ii)

the opening and processing of such mail, which may include the scanning of Checks and

Paper Documents for the purpose of providing Customer electronic access to the Data via

the Image Management Software or by delivery of Image Files if applicable; and (iii) the

depositing of Checks made payable to Customer’s Acceptable Payees into the Deposit

Account.


10. Paper Documents. All documents in paper form received by Bank on Customer’s behalf

pursuant to this Agreement, including, without limitation, invoices, statements, explanation

of benefits (“EOBs”) and any other accompanying correspondence. The term Paper

Documents does not include Checks.

B. IMAGE MANAGEMENT SOFTWARE SYSTEM ADMINISTRATION. Bank will issue

Customer’s designated Treasury Management System Administrator(s) with a Log-in ID to

facilitate the Treasury Management System Administrator’s access to the Image

Management Software. The Treasury Management System Administrator shall create and

administer Authorized User accounts. The Treasury Management System Administrator and

Customer’s Authorized Users authorized and managed by the Treasury Management System

Administrator may access the scanned images of Customer Data using the Image

Management Software provided by Bank.

C. TRAINING. Bank shall provide one (1) initial training session for the Treasury Management

System Administrator and Authorized Users designated by Customer for the initial training

session for the purpose of enabling the designated Treasury Management System

Administrator and initial Authorized Users to understand and properly operate the Image

Management Software. At the request of Customer, additional training sessions may be

scheduled. Customer agrees to pay Bank the fee(s) set forth in the Implementation Agreement

for such additional training. Customer agrees to reimburse Bank for all reasonable out-of-pocket

expenses, including, but not limited to, supplies, lodging, transportation and meals incurred by

Bank employees in the course of any travel necessary for their performance of the above

training.

D. P.O. BOX DESIGNATED FOR CUSTOMER. In connection with Customer’s use of the

Lockbox Services, Bank will supply a P.O. Box for receipt of payments to Customer. The P.O.

Box is identified in the Implementation Agreement. Customer understands and agrees that all

rights to the P.O. Box utilized for receipt of Customer’s mail by Bank under this Agreement

belong to Bank, and that Customer has no rights to access the P.O. Box, forward mail from the

P.O. Box or to otherwise modify or terminate the P.O. Box account. In addition to the P.O. Box

described above, Customer may also elect to receive payments at its own mailing address and

transport those payments to Bank for processing under this Agreement.

E. ACCEPTABLE PAYEES AND ACCEPTABLE ADDRESSEES. Customer agrees to provide

Bank with an accurate and complete list of Acceptable Payees and Acceptable Addressees on

or before the effective date of this Agreement and to notify Bank immediately of any changes in

its list of Acceptable Payees or Acceptable Addressees. Customer acknowledges that Bank

may continue to process payments to Acceptable Payees, and/or to process Paper Documents

for Acceptable Addressees, for up to three (3) Business Days following Bank’s receipt of

Customer’s instruction to remove an Acceptable Payee/Addressee from its list of Acceptable

Payees/Addressees. Customer acknowledges and agrees that Bank shall be obligated to

deposit only Checks made payable to Customer’s Acceptable Payees. Bank agrees to make a

reasonable effort to contact the Treasury Management System Administrator in the event of

the receipt of a payment made payable to a payee not listed as an Acceptable Payee. If

Customer does not notify Bank in writing that it authorizes Bank to deposit a payment to such


payee within ten (10) days after the date Bank contacts Customer, Bank will return the

Check(s) and any accompanying Paper Documents to the sender. Bank shall not be liable for

any delay in the processing of Checks or Paper Documents received by Bank if they are not

made payable to Customer’s Acceptable Payees or are not addressed to Customer’s

Acceptable Addressees.

F. PROCESSING OF CHECKS. Bank will open the envelopes obtained from the P.O. Box

assigned to Customer by Bank for receipt of Customer’s payments or received directly by Bank

from Customer, remove the contents, and inspect and handle the Checks and Paper

Documents in the following manner in accordance with the options the Customer has selected:

Checks and the accompanying Paper Documents will be scanned and indexed and transmitted

to the Image Management Software; or the Image Files will be transmitted or made available to

the Customer in the manner designated in the Implementation Agreement. Checks made

payable to Acceptable Payees or a reasonable deviation thereof shall be acceptable for

deposit. If the legal and courtesy amounts of the Check differ, Bank will guarantee the legal

amount in the absence of the ability to determine, from the accompanying Paper Documents

which amount is correct. Checks bearing the handwritten or preprinted legend “Paid in Full”

stamped anywhere on the Check will be accepted for deposit. Checks or drafts which are found

to be unacceptable for deposit because of document integrity will not be deposited in the

Customer’s Deposit Account and will be forwarded to Customer in the manner and to the

address designated in the Implementation Agreement. Deposited Checks will be endorsed with

the routing number of the depositing institution and the date of deposit. Bank shall not be liable

for damages incurred as a result of depositing any Checks which are made payable to an

Acceptable Payee.

G. DISPOSITION OF PAPER DOCUMENTS. After the Checks and Paper Documents have

been processed, Bank shall dispose of the Paper Documents in accordance with the method

selected by Customer as set forth in the Implementation Agreement. If Customer has elected

to have Paper Documents shredded after processing, but Customer subsequently determines

that it would like to have a particular Paper Document, Customer must contact Bank to

request the document no later than ten (10) days after Bank’s receipt of the Paper Document.

Any requests for Paper Documents must be sent to the following email address:

[email protected]. Any Paper Documents that Bank is unable to

process shall be sent to the Customer in the method as designated in the Implementation

Agreement. If Customer elects to utilize Bank’s courier services, lock bags will be issued to

and used by Customer. Customer agrees to pay the then current fees for the lock bags.

Unless requested otherwise, Customer will be issued four (4) bags. To ensure availability of

bags, Customer agrees to return empty bags to Bank on a daily basis or as courier service

allows.

H. CUSTOMER’S USE. Customer’s access to and use of the Image Management Software

shall be for Customer’s internal business use only, shall be used in a manner consistent with

the documentation, terms and conditions provided with it, and may not be used by Customer

for the benefit of any third party. Customer shall be solely responsible, at its own expense, for

providing its own connection to the internet, and for acquiring, installing and maintaining all

connectivity equipment, hardware, software and other equipment as may be necessary for


Customer and its Authorized Users to connect to, access, and use the Image Management

Software. Customer represents and warrants that it will comply with all applicable federal,

state and local laws and regulations, and communications common carrier tariffs, and will use

the Lockbox Services solely for lawful purposes. In addition, Customer shall at all times

ensure that all Customer Data that Customer has Bank store with the Image Management

Software is of a lawful nature, and that Customer has the legal right to have such Data

accessed and stored by Bank. Bank reserves the right to take all actions, including

termination of this Agreement, which it believes necessary to comply with applicable laws,

regulations and tariffs.

I. STORAGE OF IMAGES AND DATA ON THE SYSTEM. If Customer has elected to use the

Image Management Software Customer’s Data shall be electronically stored until (i) the

expiration or termination of this Agreement, or (ii) a period of seven (7) years, whichever

occurs first. Upon the termination of this Agreement or the closure of Customer’s Lockbox

Deposit Account, Customer may, at its option, request the delivery of Customer’s Data.

Customer must make such request within thirty (30) days after the termination of this

Agreement or the closure of its Lockbox Deposit Account. Customer’s failure to make such

request within the time required will be deemed a waiver of its right to do so, and Bank may

thereafter destroy such Data without further notice. If Customer timely requests delivery of its

Data, Bank will deliver the Data to Customer on USB storage devices or such other media

then offered by Bank, at Customer’s choice. Bank’s obligation to deliver the Data will be

subject to Bank’s receipt of Bank’s then current fee for the USB storage devices or other

media then offered by Bank.

J. PROCESSING SCHEDULE. Checks which are deemed acceptable for deposit per the

Acceptable Payee list will be deposited into the Deposit Account on the Business Day on

which they are received. Images of Checks which are deemed acceptable for deposit and

the accompanying Paper Documents will accessible to Customer via the Image Management

Software on the next Business Day following Bank’s receipt of same.

K. DISASTER RECOVERY PLAN. Bank has a disaster recovery plan ("Disaster Recovery

Plan"), and Bank requires its subcontractors to provide and maintain a disaster recovery plan

to the extent that Bank subcontracts database storage or Image Management Software

hosting to an independent data center. A "Disaster" shall mean any unplanned interruption of

the operations of or inaccessibility to Bank’s data center or a subcontractor’s data center, in

which Bank, using reasonable judgment, requires relocation of processing to a recovery

location. During a Disaster, the Lockbox Services shall be provided by Bank only to the

extent that adequate capacity exists at the recovery location. Customer understands and

agrees that the Disaster Recovery Plan is designed to minimize, but not eliminate, risks

associated with a Disaster affecting Bank’s ability to provide the Lockbox Services. Bank

does not warrant that the Lockbox Services will be uninterrupted or error free in the event of a

Disaster. Customer maintains responsibility for adopting a disaster recovery plan relating to

disasters affecting Customer’s facilities and for securing business interruption insurance or

other insurance necessary for Customer’s protection.


L. LIMITED LICENSE. Bank grants to Customer a limited, non-exclusive, non-transferable

license to use, in the manner and for the purposes set forth in this Agreement, the Image

Management Software and associated documentation provided by Bank for accessing and

using the Lockbox Services. Customer and its Authorized Users may use the Image

Management Software only in conjunction with the Lockbox Services. Customer represents

and warrants that it will use the Image Management Software only for its internal

use. Customer shall not remove any copyright, trade secret or other confidential protection

legend or notice that appears on or with the Image Management Software. Customer

acknowledges and agrees that any breach of this Agreement by an Authorized User or any

other employee, agent or contractor of Customer shall be deemed a breach of this

Agreement by Customer. Customer understands that all modifications, enhancements,

updates, changes, and error corrections to the Image Management Software provided

hereunder are and shall remain the property of Bank and/or its licensors. Customer further

understands that the term “Image Management Software” shall include any derivative works

arising from any changes, modifications, enhancements, updates and error corrections

provided hereunder. Customer shall have the right to use the Image Management Software in

accordance with the terms and conditions of this Agreement, and all other rights with respect to

the Image Management Software are expressly reserved to Bank and/or its licensors.

M. COPYRIGHT. The Image Management Software is copyrighted and contains the Confidential

Information of Bank and/or its licensors. Bank and/or its licensors retain all title to the Image

Management Software, and all copies thereof. Except as expressly licensed herein, no title to

the Image Management Software, nor any intellectual property rights in the Image Management

Software, are being transferred to Customer

N. NO COPIES. Customer understands and acknowledges that the Image Management Software

may only be accessed by Customer through the internet, and that Customer shall not have any

copies of the Image Management Software.

O. ENFORCEMENT. Bank and/or its licensors may: (i) enforce any provision of the Image

Management Software license granted hereunder; (ii) enjoin any unauthorized use by

Customer of the Image Management Software; and (iii) enforce any other right and seek any

remedy available at law or in equity. In the event of a material breach of this Agreement by

Customer, Bank shall, in addition to any other available remedies, be entitled to terminate the

Image Management Software license and immediately terminate Customer’s access to and use

of the Image Management Software.

P. IMAGE MANAGEMENT SOFTWARE UPDATES. Bank agrees to implement, within a

commercially reasonable period of time, any changes to the Image Management Software

necessary to make its functionality in compliance with any changes in the legal and regulatory

requirements governing performance of those functions. Customer agrees to promptly notify

Bank of any problems with the functionality or performance of the Image Management Software

and to provide Bank with whatever written documentation Bank reasonably requests for the

purpose of identifying and resolving problems associated with Customer’s use of the Image

Management Software. Customer’s failure to fulfill the above obligations shall relieve Bank of all


liability regarding the accuracy or performance of the Image Management Software caused by

Customer’s failure to comply with the provisions of this section.

Q. LOCKBOX SERVICES AND IMAGE MANAGEMENT SOFTWARE SUPPORT. Bank agrees

to provide telephone assistance to Customer on Business Days from 8:00 a.m. to 6:00 p.m.,

Central Local Time, for the purpose of assisting Customer’s Authorized Users on the use of

Lockbox Services and the Image Management Software. All requests for support must be

made to either [email protected], or by calling (888) 762-4762 x101362.

Bank will not provide any maintenance services for Customer’s own equipment, computers,

networks or software under this Agreement.

R. SCHEDULED SERVICE INTERRUPTIONS. Bank reserves the right to conduct routine

system backups, maintenance work, software updates, equipment upgrades and other

activities at any time from 1:00 a.m. to 4:00 a.m. (Central Local Time) or at other times upon

at least forty-eight (48) hours advance notice to Customer. Customer acknowledges the

Image Management Software may from time to time be unavailable to Customer as a result

of system maintenance, upgrades or remedial work.

S. RESPONSIBILITY FOR DETECTION OF ERRORS. Bank is not responsible for detecting

any errors contained in any scanned image, in the index data viewed via Image Management

Software, or in any Checks processed via Lockbox Services. Customer is solely responsible

for the detection of any errors and for the notification of such errors to Bank.

T. CORRECTION PROCEDURES. Customer shall promptly notify Bank of any errors detected

arising from its use of the Lockbox Services. Bank will use commercially reasonable efforts

to correct any reproducible errors. In the event of a Check being processed through Lockbox

Services into Customer’s Deposit Account in error, Customer shall, within three (3) months of

such processing, notify Bank of the deposit error and Bank will take commercially reasonable

steps to correct the error, including debiting Customer’s Deposit account for the amount of

the Check.

U. ATTEST TO DATA DESTRUCTION OR RETURN. In the event that Customer receives Data

in error, Customer will promptly notify Bank and return the Data to Bank. In the event it is not

possible to return the Data to Bank, Customer will notify Bank that it will destroy the Data

using a licensed document destruction service or similar commercially reasonable method.

Bank will provide to Customer a document to complete attesting to the disposition of the

Data. Customer must return the completed document to Banks within the time frame stated

on the document. Failure by Customer to return the completed document to Bank within the

time frame stated may result in termination of the Lockbox Service by Bank at its discretion.

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