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Electronic Banking Agreement

The following terms apply to the banking services described below and which the Bank makes available for use with accounts maintained by you with the Bank (“Electronic Banking Services”). For purposes of this Agreement, the “Bank,” "us" or “we” shall mean Alerus Financial, N.A. and “Customer” or “you” shall mean, collectively, the individual(s) or organization(s) identified in any application, any written or electronic acceptance of this Agreement or any amendment or addendum to any application, acceptance or this Agreement, or that use any of the Electronic Banking Services offered by the Bank.

 

Acknowledgement and Agreement

By signing or electronically submitting an Application or request to use one or more Electronic Banking Services, using any Electronic Banking Service, or otherwise accepting or agreeing to the terms of this Agreement, whether in writing or electronically, you (1) agree to the terms and conditions of this Agreement and any additional terms, conditions, limitations and restrictions contained in any Application or amendment approved by the Bank, any other agreements with the Bank governing your accounts, any online instructions, as well as any changes that may be communicated by the Bank from time to time in accordance with this Agreement; (2) acknowledge that you have been given the opportunity to make yourself familiar with the risks associated with the use of Electronic Banking Services and the steps you are responsible for taking and should take to reduce these risks, and (3) acknowledge that, in most instances, the Bank will not be liable for losses resulting from the use of Electronic Banking Services, provided that the Bank acted in accordance with the terms of this Agreement. 

 

Risk Management and Loss Prevention

Each Electronic Banking Service is offered by the Bank as an alternative or more convenient way of accessing information about or managing or transferring funds to and from your accounts at the Bank. You acknowledge that your decision to use one or more Electronic Banking Services may increase or decrease the risk of unauthorized access to your accounts, account information and funds held in or which might otherwise be transferred to or from your accounts and that these risks may also change over time. As further described in this Agreement, the Bank offers Security Procedures for use with its Electronic Banking Services as one means of managing risks that are within the Bank’s control and allocating risk between the Bank and its customers.  The applicable Security Procedures may also vary depending on whether you choose to access Electronic Banking Services through one or more of the Bank’s “Online Banking Systems,” such as Small Business Banking or Business Online Access, or using the Bank’s Telephone Banking System. For most Electronic Banking Services, Business Online Access provides the most robust and current Security Procedures and you acknowledge that while the Small Business Banking System or Telephone Banking System may be more convenient you will be at risk for losses that could have been prevented by using the security features of Business Online Access. You acknowledge that the equipment, systems, software and networks used to provide Electronic Banking Services and portions of each Security Procedure are not controlled exclusively by the Bank. You further acknowledge and agree that you are responsible for taking appropriate steps to protect the equipment, systems and networks that you own, control or use to access Electronic Banking Services, as well as those portions of each Security Procedure entrusted to you, in order to reduce the risk of unauthorized use of or access to your accounts and information and any resulting losses to you. Before using any Electronic Banking Service, you should be familiar with these risks and the steps that you are responsible for taking to protect your accounts and information. In addition, your banker can direct you to information and resources that will help you better understand these risks and steps you can take to protect your accounts and information. We may also offer you access to software products and services made available by third parties and that are designed to protect your equipment, systems and networks from unauthorized access, use or control. If you elect to use any such third party software, you acknowledge and agree that you are ultimately responsible for selecting, installing, updating and operating such third party software and any other systems or software you utilize to protect your equipment, systems and networks.

 

We will never send you a request to provide your username, user ID, password, access code or other login information, your account number or information, or any other non-public personal information in an e-mail or text message and you should never do so. If you have reason to believe a Customer Security Breach has occurred, you agree to notify the Bank immediately by contacting the Customer Care Center or your banker. This notice should be given by telephone or in person and should not be provided by e-mail, text message or voice mail. A “Customer Security Breach” includes: (1) the disclosure or compromise of all or part of a Security Procedure, including as a result of the loss or theft of one or more usernames, user ID’s, passwords, access codes, login information, repeat codes, tokens or other access devices; (2) the loss, theft or loss of the secure and exclusive control over any of the equipment, systems or networks that you own, control or use to access Electronic Banking Services or any portion of your internal network or systems, or (3) identity theft involving you or any person authorized by you to access your accounts or use Electronic Banking Services.   In most cases, you will be liable for any losses resulting from a Customer Security Breach that is a result of transactions initiated or other actions taken prior to the time we receive notice from you and have had a reasonable opportunity to act on such notice.

Accessing an Online Banking System

Before using most Electronic Banking Services, you must first access one of the Bank’s Online Banking Systems. The general steps for accessing an Online Banking System are described below and in more detail elsewhere in this Agreement.

  1. Obtain the necessary equipment and make sure your equipment, software and applications meet the minimum requirements for use of Electronic Banking Services through the desired Online Banking System.
  2. Initiate a secure internet connection following the instructions of your internet service provider and open your internet Web browser.
  3. If using an internet web browser, go to alerusfinancial.com and then follow the on screen instructions to select the sign in option for the desired service, additional sign in options are generally located in the “Other Alerus Sign-ins” menu.
  4. Sign in following the instructions provided on the website and the applicable Security Procedure and any Supplemental Security Procedures.
  5. Before gaining access to the Online Banking System or one or more Electronic Banking Services, you may from time to time be asked to review, accept, agree to or acknowledge notice of the terms of this Agreement, an amendment or other change in terms to this Agreement or an Electronic Banking Service, review important notices or comply with Supplemental Security Procedures.
  6. Once you have gained access to the Online Banking System, you may then follow the online instructions for using the Electronic Banking Services available to you. Use of a particular service may require compliance with additional applicable Security Procedures or Supplemental Security Procedures.
  7. Failure to properly sign in to the Online Banking System or satisfy applicable Security Procedures or Supplemental Security Procedures may result in additional restrictions being placed on your ability to access the Online Banking System, Telephone Banking System or your accounts or use Electronic Banking Services and may also result in the suspension or cancellation of payments or transfers from your accounts. If this occurs, please call the Customer Care Center.

 

Accessing the Telephone Banking System

Certain Electronic Banking Services may be accessed by using our Telephone Banking System by calling our Customer Care Center, as appropriate for the Electronic Banking Service you wish to use, as provided in and subject to the terms and conditions of this Agreement. The general steps for accessing Electronic Banking Services using our Telephone Banking System are described below and in more detail elsewhere in this Agreement.

  1. Initiate a telephone call to our Customer Care Center using the number provided. If using a cellular or public phone, you should call from a secure location where the details of your conversation cannot be overheard or monitored. Never provide personal information or attempt to access Electronic Banking Services by telephone if you did not initiate the call.
  2. Authenticate by following the instructions provided by our Bank representative that answers your call.
  3. Before gaining telephone access to one or more Electronic Banking Services, you may from time to time be asked to review, accept, agree to or acknowledge notice of the terms of this Agreement an amendment or other change in terms to this Agreement or an Electronic Banking Service, review important notices or comply with Supplemental Security Procedures.
  4. Once you have gained access to our Telephone Banking System you should then follow the instructions provided for using the Electronic Banking Services available to you. Use of a particular service may require compliance with additional applicable Security Procedures or Supplemental Security Procedures.
  5. Do not provide your account number, initiate access or provide information necessary to initiate access to our Telephone Banking System or any Electronic Banking Service or provide any other account or personal information over the telephone unless you initiated the telephone call or you receive a call about a transaction that you previously authorized or initiated by telephone, debit card, credit card or using our Online Banking System. If you receive a telephone call about a transaction you did not initiate or authorize, only indicate that you did not authorize the transaction and do not provide your account number or any other account or personal information.
  6. If you receive a telephone call about a transaction you did initiate or authorize by telephone, debit card, credit card or using our Online Banking System, you will only be asked to verify your identity, the payee and amount of the transaction and provide a call back or verification code if one was previously provided to you by the Bank.
  7. Failure to properly satisfy applicable Security Procedures or Supplemental Security Procedures may result in additional restrictions being placed on your ability to access your accounts or use Electronic Banking Services and may also result in the suspension or cancellation of payments or transfers from your accounts. If this occurs, please call the Customer Care Center.

 

Customer Care Center and Contact Information

You may contact the Customer Care Center regarding any inquiries, notices or questions regarding any Online Banking System, Telephone Banking System or any Electronic Banking Services by telephone at (701) 795-2662 in Grand Forks, ND; (701) 280-5151 in Fargo, ND; or (800) 279-3200, ext. 2662.   You may also contact us by e-mail by using the “Contact Us” button at the bottom of the Bank’s web page, sending e-mail to Support@alerusmail.com, or by sending a secure online message via an Online Banking System. You should never send confidential information, such as usernames, passwords, account numbers or tax identification numbers by e-mail or text message. You may also contact your banker regarding any inquiries, notices or questions regarding the Online Banking System, Telephone Banking System or any Electronic Banking Services using their regular office telephone number. Important notices or information should not be provided by voicemail, e-mail or text message. Any notices or information provided by voicemail, e-mail or text message shall not be deemed received until the later of: (1) actual delivery to and review by the recipient, and (2)  if not delivered and reviewed during the Bank's normal business hours, when the Bank's offices are next open for business.

 

Applications

Before using most Electronic Banking Services, Customers must complete and sign, accept or authorize a written, electronic or on-line application (each an "Application"), and the Bank must receive and/or approve your Application, which shall then be part of this Agreement, together with all schedules, exhibits, appendices or addenda to such Application(s). Certain Electronic Banking Services do not require an Application, provided that you accept and agree to the terms of this Agreement, either by written, oral or on-line acknowledgment or acceptance or by use of an Online Banking System, Telephone Banking System or an Electronic Banking Service. Customers may then use the Electronic Banking Services selected in the Application(s) or otherwise permitted under the terms of this Agreement. Application(s) may be amended or replaced by a new Application, which shall become effective only after the Bank has had a reasonable opportunity to act on an amendment or new Application following its receipt and, if required, has accepted or approved the amendment or Application. Applications or on-line features of certain Electronic Banking Services may be used to establish transaction limits, designate Authorized Persons, modify Security Procedures and establish other limitations and conditions.  You acknowledge that you have had the opportunity to review the options available with each Online Banking System and each Electronic Banking Service to establish transaction limits, designate Authorized Persons, select and modify Security Procedures and establish other limitations and conditions, and have selected the Online Banking System and Electronic Banking Services that are most appropriate for use with each of your Authorized Accounts, based on your operations, procedures, controls and risk tolerance.

 

Description of Electronic Banking Services

Each of the banking services described below are offered by the Bank as Electronic Banking Services. Some of the banking services described are available only to certain qualifying Customers and you may be required to confirm your eligibility in an Application or before using the Electronic Banking Service. While some of the services are available on a stand-alone basis, others are only available as part of a specific Online Banking System, such as Small Business Online Banking or Business Online Access. The Security Procedures available for each Electronic Banking Service may differ, depending on the services selected, whether you choose to use the Telephone Banking System or an Online Banking System and which Online Banking System is selected. Accordingly, each Customer should review the available Security Procedures before selecting a Telephone or Online Banking System and the Electronic Banking Services they wish to use.

 

Customer acknowledges and agrees that, except as otherwise indicated on Customer’s Application(s); Electronic Banking Services may not be used for personal, family or household purposes.  Customer further acknowledges and agrees that each Electronic Banking Service may only be used in accordance with the Governing Rules.  The Bank’s Small Business Online Banking and Business Online Access systems are available 24 hours a day, seven days a week, subject to reasonable downtime for maintenance.  The Bank will use reasonable efforts to conduct system maintenance outside of normal business hours.  The Bank reserves the right to eliminate or modify any Electronic Banking Service or Telephone Banking or Online Banking System function at any time without prior notice.

 

Account Information and Management Services

The Bank offers the following account information and management services. Except as otherwise indicated below, the Authorized Accounts that may be accessed using these account information and management services will include all of the Customer’s accounts at the Bank that share the same tax identification number (e.g. social security number or employer identification number) and may be accessed by any Authorized Person or using the applicable Security Procedure. For security purposes, information services are provided from a system separate and apart from the Bank’s core data processing system.  Customer acknowledges and agrees that in the event of any discrepancy between information retrieved using an Electronic Banking Service and the Bank’s core data processing system, the information from the core system shall control.

  1. Account Inquiries: Any Customer may use account inquiry services to obtain balance, cleared check and other transaction history, images of cleared checks and other data for any Authorized Accounts.  Account inquiries may be made using an Online Banking System, the Telephone Banking System or by visiting any of our banking offices.  By applying to use or using an Electronic Banking Service to make account inquiries, you authorize the Bank to make any and all of your loan, deposit or other account information available to any Authorized Person or in response to an inquiry made in accordance with any applicable Security Procedure.
  2. Account Reconciliation. Customer may match checking information from Customer’s own check-writing software with cleared transaction information in Business Online Access to show the status of all items and the outstanding balance for a selected account. Customer may also generate account reconciliation reports based on criteria selected by Customer.
  3. Data Import/Export. Most Customers may import account transaction history from the Bank into Customer’s accounting system or personal or small business financial software.  Customers using Business Online Access may upload information from certain check-writing software programs into the online check register maintained by the Customer using Business Online Access.
  4. Electronic Statements, Notices and Disclosures. Customers may elect to receive account statements, notices and disclosures electronically for any Authorized Account(s). If you elect to receive electronic statements, the Bank may also transmit disclosures, notice of change in account terms and other information electronically to you.  In most cases, electronic statements for Authorized Account(s) will be available through the Online Banking System and once selected you will no longer receive paper statements from the Bank. The Bank may notify you when electronic statements are available for review by sending an e-mail to the most recent e-mail address you provided, and you agree to notify the Bank immediately of any change in your e-mail address.  Unless otherwise required by applicable law, any disclosure, notice or other written communication concerning Electronic Banking Services or any Authorized Account may be sent to you via postal address or electronically, including via email, text message, or through the mobile application, as applicable.  All disclosures and notices sent to you electronically will be deemed to have been given and received three (3) Business Days of being sent to the electronic address you last provided.  The Bank reserves the right, but assumes no obligation, to provide a paper copy of any communication that a Customer has agreed to receive electronically.  You may elect to withdraw consent to receive electronic notices, disclosures and communications at any time by providing notice to Bank.  
  5. Coin and Currency Orders. Authorized Persons may place coin and currency orders through Business Online Access following the applicable Security Procedure and using funds from the Authorized Account(s) designated in Customer’s Application.  Orders placed by the cut off time established by the Bank will be available for pickup at the Bank branch specified in the order on the following Business Day.  Any person collecting a coin and currency order on behalf of Customer will be required to present a valid government issued picture ID matching the name indicated in the order.  The Bank will not be obligated to execute any coin or currency order unless (a) the Bank has sufficient coin and currency denominations available to fill the order, and (b) there are sufficient Available Funds in the Authorized Account, as determined in accordance with the Bank’s fund’s availability policy.

 

Risk Management Services

Available Electronic Banking Services include the following risk management services that allow a Customer to reduce the risk of loss resulting from the payment of checks or other items that were not authorized by the Customer or that are lost, stolen or altered after issuance. While use of these services is optional, the Bank may require Customers with accounts that experience a high degree of check fraud claims or unauthorized ACH transfers to use one or more of the following risk management services as a condition to continuing to maintain an account with the Bank.

  1. Stop Payment. Any Customer may request a stop payment on a check drawn on any of the Customer’s accounts at the Bank (a “Stop Payment”) in writing, by telephone or using an Electronic Banking Service. Stop Payment orders made by telephone will expire after fourteen (14) days unless confirmed in writing, by facsimile or using any Online Banking System that specifically includes Stop Payment services.  You authorize the Bank to accept Stop Payments transmitted using any Online Banking System and agree that the information electronically transmitted by you to establish or renew a Stop Payment will be sufficient written evidence of the Stop Payment and will be deemed the equivalent of a written Stop Payment.  You agree that, if not previously revoked, a Stop Payment submitted in writing, by facsimile or using an Online Banking System will automatically expire six (6) months after the date of entry, unless another Stop Payment is delivered to the Bank by one of those methods.  You are solely responsible for the accuracy of all information provided in any Stop Payment and agree to indemnify and hold the Bank harmless from all thirty-party claims, suits, damages, liability, expenses, and costs, including, but not limited to, reasonable attorneys' fees, incurred by the Bank as a result of a Stop Payment.  The Bank shall not be liable under any circumstances for payment of an item if a Stop Payment is not effectively delivered to the Bank, the item is presented for payment before the Bank has received and had a reasonable period of time to act on a Stop Payment, or accurate information regarding the amount and number of the item is not provided.  If the Bank pays such an item, you further agree that the Bank shall not be liable if other items drawn by you on the same account are returned for insufficient funds as a result of such payment.  To revoke a Stop Payment, you must execute written documentation in the form provided by Bank.

 

  1. Positive Pay. Positive Pay services are available to Customers using Business Online Access and restrict the payment of items drawn on and ACH transfers from each Authorized Account. Items are paid or returned based on the specific features selected for each Authorized Account in a completed Application and as further authorized through the Business Online Access system in accordance with the applicable Security Procedure. Customers using the traditional, payee verification or bar code positive pay services must select between the Pay Default and Return Default options in their Application. Positive Pay services and any changes to the Positive Pay services selected by a Customer will not become effective until a completed Application or amended Application is submitted to and approved by the Bank, Customer has submitted a successful test file to the Bank and the Bank has confirmed that no changes to the Customer’s file format are required.
    • Traditional Positive Pay. You must submit an “Issued Items File” to the Bank through Business Online Access for each Business Day that checks are issued on an Authorized Account, by the cut off time indicated in your most recent Application or notice from the Bank. Each Issued Items File shall list all checks issued on each Authorized Account since the last Issued Items File, along with all information required by the Bank presented in the format specified.  Checks presented for payment are reviewed against the Issued Items Files submitted by you. Those checks that match the check number and amount in an Issued Items File will be paid without further action by you. The Bank will post a list of checks that are not included in an Issued Items File or do not match the check number and amount provided to Business Online Access each Business Day (each an  “Exception Check”). If you selected the “Pay Default” option on your Application, the Bank may pay any Exception Check unless you object to such payment by providing a Return Request through Business Online Access no later than the cut off time indicated in your Application.  A Return Request must be in the form required by the Bank and accurately identify each Exception Check that you do not wish to pay by check number and amount. If you selected the “Return Default” option on your Application, the Bank shall return unpaid all Exception Checks unless you request that an Exception Check be paid by providing a Pay Request through Business Online Access no later than the cut off time indicated in your Application.  A Pay Request must be in the form required by the Bank and accurately identify each Exception Check that you wish to pay by check number and amount.
  • Payee Verification. If selected on Customer’s Application, Customer and the Bank shall follow the same procedures described for Traditional Positive Pay, except that Issued Items Files must include the name of the payee on each check issued and Exception Items will be comprised of those items that do not match the check number, amount and payee name in the Issued Items Files submitted by the Customer.
  • Critical Dollar Limit. If selected on Customer’s Application, Customer designates a dollar limit on the Application and then Customer and the Bank shall follow the same procedures described for Traditional Positive Pay, except that all checks for amounts above the dollar limit shall be returned unpaid.

 

  • Bar Code Verification. If selected on Customer’s Application, Customer and the Bank shall follow the same procedures described for Traditional Positive Pay, except that Customer shall be required to use the bar code functionality of the Business Online Access system and will not be required to submit Issued Items Files. Exception Items will be comprised of those items that do not contain a bar code or that do not match the check number, amount and payee name indicated by the bar code printed on the item.

 

  1. ACH Verification. ACH Verification restricts ACH transfers from each Authorized Account. Customers must indicate in their Application whether ACH Filtering or ACH Blocking is desired. ACH Filtering allows Customer to use Business Online Access to establish parameters for transactions to be paid and flagged for further review. ACH Blocking allows Customer to use Business Online Access to establish parameters only for transactions to be blocked and returned to sender. In some circumstances, such as ACH transactions flagged for further review, you will use the Business Online Access system to set filter and notice parameters and may be required to make pay or return decisions before an ACH transaction is paid or returned. You must enter all pay or return instructions using Business Online Access no later than the cut off time indicated in your most recent Application or notice from the Bank in order to avoid return of items flagged for review.
  1. Compliance with Applicable Laws, Responsibility for Items. You acknowledge that the payment and return of checks and other items are subject to laws, regulations and ACH and other clearing house rules and restrictions, including time limits and permissible reasons for return or non-payment, and agree that the Bank shall not be required to take any action or follow any instructions which may be contrary to such laws, regulations, rules or restrictions.  You further acknowledge that use of Stop Payment, Positive Payment and ACH Verification services to prevent payment of a check or other item will not relieve you of liability for a check or item that was issued or authorized by you or your authorized representative and otherwise properly payable under applicable law. You agree that any check paid in accordance with the Positive Pay service selected by you shall be deemed “properly payable” and that any check returned in accordance with Stop Payment or Positive Pay procedures shall be deemed rightfully dishonored by the Bank. You agree  to accept responsibility for and hold harmless and indemnify the Bank, its officers, shareholders and directors against any and all claims or liability, whether direct or indirect, relating to your use of Stop Payment, Positive Pay and ACH Verification services and that the Bank shall not be liable to you as a result of the payment or return of any item, except to the extent due to willful misconduct or gross negligence of the Bank or as otherwise required under applicable laws and regulations.

 

Internal Transfers and Payment Services

The Bank offers the following internal transfer and payment services, which permit the transfer of funds from any Authorized Account at the Bank to any other Authorized Account. In general, the Authorized Accounts that may be accessed using these internal transfer or payment services will include all of the Customer’s accounts at the Bank that share the same tax identification number (e.g. social security number or employer identification number) and may be initiated through an Online Banking System by any Authorized Person or through the Telephone Banking System, using the applicable Security Procedure. For example, funds could be transferred to or from any of your individual accounts at the Bank to any joint account that you maintain with any other person or entity, if the same tax identification number is used on each account. In addition, if you maintain multiple business accounts and have designated only certain Authorized Persons to initiate external payments from some but not all your accounts, internal transfer services could be used to move funds from one of your accounts to another account you have at the Bank by a person authorized to make external transfers from the second but not the first account.  By applying to use or using any of the following internal transfer and payment services, you acknowledge that you understand that funds may be transferred between any of your accounts at the Bank and agree that all such transfers will be considered authorized transfers. You further acknowledge and agree that you are solely responsible for selecting and monitoring the transactions initiated by each Authorized Person and their use of any Electronic Banking Services. In some cases, the Security Procedure for making internal transfers using Telephone Banking System is the same or similar for all of your accounts at the Bank and should not be selected by you if the persons you plan to authorize to make internal transfers will not be the same for all of your accounts at the Bank. Customers that do not want all of their accounts at the Bank with the same tax identification number to be considered Authorized Accounts for these internal transfer and payment services should use the Business Online Access service and exclude certain accounts from the list of Authorized Accounts in their Application.

  1. Internal Transfers. Customers may transfer funds from any Authorized Account to any other Authorized Account at the Bank in an amount up to the Available Funds balance of the account from which the funds are being transferred.   In general, transfers initiated prior to the cut off time indicated in your Application on any Business Day will be effective the same Business Day. Customers should confirm that a transfer is included in the Available Funds balance of the account to which the funds are being transferred before making a payment or transfer from that account in reliance on those funds.

 

  1. Loan Advances and Payments. Customers may initiate one-time or recurring payments from any Authorized Account to any loan account at the Bank, in an amount up to the Available Funds balance of the account from which the payment is being made. Customers may also initiate advances from any line of credit that is an Authorized Account to any other Authorized Account in an amount up to the available balance of line of credit. In general, payments and advances initiated prior to the cut off time indicated in your Application on any Business Day will be effective the same Business Day. Customers should confirm that an advance is included in the Available Funds balance of the account to which the funds are being transferred before making a payment or transfer from that account in reliance on those funds.

 

External Transfers and Payment Services

The Bank offers the following external transfer and payment services, which permit the transfer of funds from Authorized Accounts to third parties or accounts held by Customer at another financial institution and from accounts held by third parties or by Customer at another financial institution to an Authorized Account. By applying to use or using any of the following external transfer and payment services, you acknowledge that you understand that funds may then be transferred from any of your Authorized Accounts at the Bank and agree that all such transfers will be considered authorized transfers. You further acknowledge and agree that you are solely responsible for selecting and monitoring the transactions initiated by each Authorized Person as well as their use of each Electronic Banking Service. Customers using Small Business Online Banking may not have access to all of the services described below and the Authorized Accounts from which funds can be transferred will include all of the Customer’s accounts at the Bank. Customers that do not want all of their accounts at the Bank to be considered Authorized Accounts for these external transfer and payment services should use Business Online Access, which allows Customers to designate those accounts that will be Authorized Accounts for each of the services described below.

  1. Bill Payment. You may initiate one-time or recurring payments from any Authorized Account to any individual, company or organization. Bill Payment may not be used to make payments to federal, state or local government, court or tax unit who does not accept third party payments. Payments may be made by the Bank or its third party processor by transferring funds from the Authorized Account and then issuing a check or initiating a funds transfer to the designated payee, as determined by the Bank in its sole discretion. You are solely responsible for providing all information necessary to identify each payee and insure payments are properly credited to your account with the payee (such as account, bill and invoice numbers as they appear on the bill or statement provided by the payee) and all other information required by the Bank. You are liable for any payments and the cost of recovering any payments made based on inaccurate, incorrect and incomplete information provided by you. Payment send dates and estimated payment receipt times may vary depending on whether payments are made by funds transfer or printed check. You shall be solely responsible for scheduling bill payments in order to insure receipt by payee in a timely manner and shall be responsible for late payment and finance charges that may be imposed as a result of your failure to do so.  Once a payment is initiated it may only be changed or cancelled prior to the time it is processed by the Bank. The Bank may terminate Customer’s Bill Payment service if Customer does not utilize the service during any six-month period.

 

  1. Federal Tax Payments. Customers may initiate payments from any Authorized Account to the U. S. Treasury for payment of certain federal tax obligations, but only after enrolling with the U.S. Internal Revenue Service to electronically submit tax payments through the Electronic Federal Tax Payment System.  Customer must initiate tax payments no later than the cut off time indicated in your Application on the day before the payment is due at the U.S. Treasury.

 

  1. Wire and Third Party Funds Transfers. Customers may initiate Transaction Requests from any Authorized Account by wire transfer to accounts outside the Bank (“Wire Transfer”) or by internal funds transfer to accounts at the Bank owned by another Bank customer (“Third Party Funds Transfer”). These types of Transaction Requests may be initiated by telephone using the Customer Care Center or Business Online Access by any Authorized Person or in accordance with the applicable Security Procedure or in person by an authorized signer on any account at one of our banking offices. The Bank will execute each such Transaction Request according to Customer’s instructions, provided the order is (a) actually received by Bank; (b) identifies Authorized Account from which it is to be paid; (c) does not exceed the available funds in such Authorized Account or any applicable daily limits or other restrictions established by the Bank; (d) is authorized by an Authorized Person or in accordance with the applicable Security Procedure; (e) is accepted by the Bank; and (f) complies with applicable federal and state laws and with the rules of any applicable payment system.  The Bank may process Wire and Third Party Funds Transfers using any means the Bank considers suitable, including but not limited to the Bank’s own internal systems and the funds transfer system operated by the Federal Reserve Banks (“Fedwire”). You may provide one or more e-mail addresses for use in notifying you of outgoing and incoming wire transfers but acknowledge that such e-mail notices are provided for information purposes only and will generally be provided after the wire transfer in question had been sent or received, and if e-mail notification is not selected, you will not receive independent confirmation of wire transfers beyond that provided by the Business Online Access System. You agree to review any e-mail notifications sent to you and immediately report any unauthorized or erroneous wire transfer to the Bank.

 

  1. ACH Transactions. Customers may initiate Transaction Requests to be executed through an automated clearing house (“ACH”). ACH Transaction Requests may be either Payment Orders (transferring funds from an Authorized Account to an account at another financial institution or owned by a third party) or Debit Transfers (transferring funds to an Authorized Account from an account at another financial institution or owned by a third party).  Customers may submit ACH Transaction Requests directly to the Bank through Business Online Access,  using manual entry or by using the import ACH function to upload a file in the required National Automated Clearing House Association (“NACHA”) format, or by authorizing a third party processor (such as a payroll processor) to initiate ACH Transaction Requests to or from Authorized Accounts.  In order to use a third-party processor, you must complete and the Bank must approve a separate Third-Party Processor Agreement. In addition, notwithstanding anything to the contrary contained in this Agreement, you may not initiate ACH TEL Entries or Web Entries (as defined in the NACHA rules), through the Bank without the express written authorization of the Bank. You agree to comply with the operating rules of NACHA, as applicable and in effect from time to time, as well as all other Governing Rules (as defined below) applicable to electronic funds transfers and the terms of this Agreement shall in no way limit your responsibility to comply with such laws, regulations and rules.
    • You shall not initiate an ACH Transaction Request unless such transaction has been authorized by the person whose account is to be debited or credited, in accordance with the Governing Rules, and any applicable pre-notification requirements have been satisfied. You agree to retain the original or a copy of each authorization for two (2) years after such authorization has terminated or been revoked. You may, and in some cases may be required to, send a pre-notification that you intend to initiate an ACH transaction or transactions to a particular account within the time limits prescribed for such notices in the Governing Rules. Such notices shall be provided in the format prescribed by the Governing Rules.  If you receive notice that any such pre-notification has been rejected by the receiving bank, or that a receiving bank will not accept entries without having first received a copy of the authorization signed by its depositor, you agree not to initiate transactions to that account until you provide the receiving bank with the required authorization or otherwise correct the transaction as requested by the receiving bank.  In the event any entries are rejected for any reason whatsoever, it shall be your responsibility to resubmit such entries; provided, however, that the Bank shall resubmit any entries that were rejected due to an error in the Bank’s handling of such entries, but only if sufficient data is available to the Bank to resubmit such entries.  You shall retain and provide the Bank, on request, all information necessary to remake any entry or file of entries for three (3) days after the applicable settlement date. If the Bank is required to investigate any error with respect to an ACH transaction to or from a consumer account (as defined in the Electronic Funds Transfer Act), you shall fully cooperate with the Bank and make its records fully and completely available for such purpose.
      • If you receive funds transfers through wholesale credit transactions (CCD or CTX formats), you agree that any credit given by the Bank with respect to any wholesale ACH transaction is provisional until the Bank receives final settlement for such entry through a Federal Reserve Bank. If the Bank does not receive such final settlement, Customer is hereby notified and agrees that the Bank is entitled to a refund of the amount credited to you in connection with such transaction, and the party making payment to you via such transaction (e., the originator of the entry) shall not be deemed to have paid you the amount of such entry. Under the Governing Rules, the Bank is not required to give Customer next-day notice of receipt of an ACH item and the Bank will not do so.  The Bank will, however, notify you of receipt of payments in periodic statements sent to you and will make such information available online through Business Online Access as soon as reasonably practicable.

 

Deposit Services

The Bank offers the following deposit services, which permit checks to be deposited into Authorized Accounts using supportable scanning equipment or authorized Customer Equipment.

  1. Remote Deposit. Customers submit checks for deposit into Authorized Accounts electronically using scanning equipment rented or purchased from the Bank, compatible equipment supplied by a third party or authorized Customer Equipment. Before using Remote Deposit services, you must complete and submit an Application and the Bank must approve the Application and provide or confirm you have obtained compatible scanning equipment or authorized Customer Equipment. To submit a deposit, Customer must create and transmit images of checks to the Bank for deposit in accordance with Bank’s Operating Procedures set forth in your Application (as applicable).

 

  1. General Terms and Conditions for Remote Deposit. Images must be of such a quality that the following information can be clearly read by sight review of the image: the amount of the item, the payee, the drawer’s signature, the date of the item, the item number, the MICR line, and any endorsements or other information written on the front or back of the item. All images must conform to the dimensions and other requirements established from time to time by the Federal Reserve Board for “substitute checks,” as defined in the Federal Check Clearing for the 21st Century Act (“Check 21”) and Regulation CC of the Board of Governors of the Federal Reserve.  The magnetic ink character or MICR line at the bottom of each  item must capture the routing transit number, the account number, the check amount (when encoded) and the serial number and process control field (when encoded).  The Bank will determine the manner in which items are cleared or presented for payment in its sole discretion.
  • In addition to the representations, warranties and covenants contained elsewhere in this Agreement, you represent and warrant, with respect to items submitted through Remote Deposit, that:
  1. You will not initiate an electronic check entry without first being in possession of a proper check which is made payable to you;
  2. You will not transmit duplicate checks, or re-deposit or re-present a physical check deposited remotely;
  3. You will only deposit checks drawn on financial institutions within the United States and that do not exceed the dollar or volume limits specified in your approved Application. Checks drawn on financial institutions outside the United States must be deposited for collection at a Bank branch;
  4. The images of the checks transmitted by you to the Bank contain an accurate representation of the front and the back; the images comply with the above requirements and you will not alter any part of a check before or after their remote deposit, except by applying an endorsement;
  5. No subsequent transferees of the check(s), including but not limited to the Bank, a collecting or returning bank, drawer, drawee, payee or endorser, shall sustain a loss as the result of the fact that the image was presented for payment or returned instead of the original check;
  6. All of your checks and business transactions are bona fide, and all deposited checks will be free and clear of all security interests, liens and claims whatsoever of third parties;
  7. You will not use the equipment provided to you by the Bank to send checks, files or any other transmission to any other financial institution or party (other than agents of the Bank);
  8. You will train your employees who use the Remote Deposit service on the proper handling, transmission, storage and destruction of remotely deposited checks;
  9. You will not allow use of the Remote Deposit service by or for the benefit of any third party; and
  10. The file and image(s) of check(s) do not contain computer viruses or other harmful, intrusive, or invasive codes.

 

  • The Bank is not responsible for detecting errors contained in any check received from Customer by Remote Deposit, or for the payment of the check(s) made on the basis of such erroneous information. The Bank is not responsible for files or images lost or intercepted in transmission. Electronic images received for deposit are credited provisionally to an Authorized Account pending final collection and will be made available to you in accordance with the Bank’s Funds Availability disclosure, as revised by the Bank from time to time.  The Bank may reject any check or the batch containing any check image, which does not comply with the requirements of this Agreement.  You acknowledge that presenting an item more than once may constitute fraud, and you agree that you will bear any and all liability for costs (including but not limited to overdraft fees, attorney’s fees, interest, and any related or indirect costs) incurred in the event of such multiple presentment regardless of the circumstances.  Customer will only use equipment, including Customer Equipment, approved by the Bank for the Remote Deposit service, as listed on Schedule C to the Remote Deposit Application (as updated by the Bank from time to time).  You are solely responsible for establishing and maintaining an internet connection to transmit check images to the Bank and for maintaining any scanning equipment purchased from a third-party or Customer Equipment.  If you purchase or rent scanning equipment from the Bank, you acknowledge that the Bank has no responsibility to service or replace such equipment except as provided in Customer’s Application.  You agree to cooperate with the Bank to test all scanning equipment, Customer Equipment and communications facilities to ensure that electronic images are of sufficient quality for processing before commencing use of the Remote Deposit service.  You agree to cooperate with us in the investigation of unusual transactions, poor quality transmissions, and resolution of customer claims. You will maintain the original paper checks of which images were delivered to the Bank using Remote Deposit for a period of up to sixty (60) days in a secure container located in a secure area, and provide, upon request and without further cost, any originals or copies of checks so deposited.  After such period, Customer shall destroy the original check in a manner that will prevent the disclosure of non-public information (i.e., via a shredder).  You shall maintain electronic records of all checks in accordance with the Governing Rules, which records shall be made available to the Bank, its agents, or any regulatory authorities having jurisdiction over the Bank. You shall be responsible for providing all notices to your customers required by the Governing Rules and for obtaining all required approvals from your customers for the processing of the check items in accordance with the Governing Rules.  In the event that a communications, equipment or software outage prevents you from electronically transmitting check items to the Bank, you may hold the items until the outage is resolved or deliver them to a Bank branch for deposit.  The Bank shall have no liability for any delay in crediting your account or any expense incurred by you as a result of such outages.  Notwithstanding the foregoing and to the extent applicable, Customer’s warranties in this Agreement shall apply to the deposit of original checks.  In the event of any conflicts in the instructions received by the Bank regarding any checks/entries, the Bank may at its option and with or without notice, hold or interplead, comply with the legal process or other order, or otherwise limit access by Customer or by the Bank to the funds, checks/entries or proceeds thereof. Customer agrees to make its facilities, equipment, Customer Equipment, records and personnel available for inspection by the Bank and/or the Bank’s regulators upon reasonable advance notice.

Transactions Requests, Authorized Accounts and Persons and Security Procedures

Most Electronic Banking Services allow you to initiate Transaction Requests, allowing the movement of funds to and from your accounts at the Bank. Before applying for or using any Electronic Banking Service, you should carefully consider: (1) the types of Transaction Requests that can be made and the Security Procedures used with each Online Banking System, Telephone Banking System and Electronic Banking Service, (2) the Authorized Accounts that may be accessed with each Online Banking System, Telephone Banking System and Electronic Banking Service, and (3) the Authorized Persons who will have access to each service and the level of authority available to each person, and then select the Online Banking System, Telephone Banking System and Electronic Banking Services that are most appropriate for use with each of your accounts, based on your operations, procedures, controls and risk tolerance.

 

Transaction Requests

A “Transaction Request” means any request to deposit, withdraw or transfer funds to or from an account at the Bank, including wire transfers, ACH transfers, positive pay transactions, and remote deposit.  A “Payment Order” is any Transaction Request that moves funds from an account at the Bank to an external bank account or an account at the Bank that is not owned or controlled by you or any of your affiliates.  A “Debit Transfer” is a Transaction Request that moves funds to one of your accounts at the Bank from: (a) an account at another financial institution, or (b) an account at the Bank that is not owned or controlled by you or any of your affiliates. An "Internal Transfer" is any Transaction Request that moves funds from one of your accounts at the Bank to another one of your accounts at the Bank.  Subject to the terms and conditions of this Agreement, the Bank will execute each Transaction Request in the amount and from and/or to an account at the Bank, all as specified in each Transaction Request, provided the request is (i) actually received by the Bank; (ii) identifies the account to or from which it is to be paid; (iii) does not exceed the “Available Funds” in the account from which the funds are to be transferred, as determined in accordance with the Bank’s funds availability policy and applicable deposit account agreement, any applicable Daily Exposure Limits, or other restrictions or limitations established by the Bank; (iv) is authorized by an Authorized Person or in accordance with the applicable Security Procedure; (v) is accepted by the Bank; (vi) complies with any other written instructions and restrictions set forth in a current Application, (vii) complies with any Supplemental Security Procedures, and (viii) complies with applicable federal and state laws and with the rules of any applicable clearing house or payment system.  You acknowledge that any credits to your accounts resulting from a Transaction Request shall be provisional credits until the Bank receives final settlement.  In the event the Bank does not receive final settlement for any Transaction Request, the Bank shall be entitled to reverse any provisional settlement and withdraw the corresponding amount from the account or any other account of the Customer at the Bank. The Bank’s sole responsibility under this Agreement is to make a reasonable effort to execute Customer’s Transaction Requests.  The Bank shall have no liability to Customer if any other person or entity fails to execute an order in accordance with the Bank’s instructions.

 

Authorized Account(s)

Except as otherwise provided in or limited by this Agreement or an Application, the Online Banking System, Telephone Banking System and Electronic Banking Services you select may be used to access information, initiate Transaction Requests, and perform other functions with respect to all of your loan and deposit accounts at the Bank (each such account is referred to in this Agreement as an “Authorized Account” with respect to each Electronic Banking Service authorized for use with that account). Applications or on-line features of certain Online Banking Systems, Telephone Banking Systems and Electronic Banking Services may be used to limit the Authorized Accounts that may be used, limit the type of Transaction Requests that may be used with respect to those accounts, limit who may initiate certain types of Transaction Requests and limit the amount of such transactions. You acknowledge that you have had the opportunity to review the options available with each Online Banking System, Telephone Banking System and Electronic Banking Service to limit Authorized Accounts, and have selected the Online Banking Systems, Telephone Banking Systems and Electronic Banking Services that are most appropriate for use with each of your Authorized Accounts, based on your operations, procedures, controls and risk tolerance.

 

Authorized Persons

Each person that (a) you authorize to use an Online Banking System, Telephone Banking System or Electronic Banking Services;  (b) you, or any of your officers, employees or agents, provide or instruct the Bank to provide a username, password, token or other information or credentials necessary to comply with the Security Procedure used with an Online Banking System, Telephone Banking System and Electronic Banking Service, or (c) obtains a username, password, token or other information or credentials necessary to comply with the Security Procedure from a person described in (a) or (b), directly or indirectly through access to a computer, mobile device or network owned or controlled by you or any such person, shall be an "Authorized Person" under this Agreement. Unless otherwise limited in an Application, under the terms of this Agreement or using the on-line features of certain Online Banking Systems, each Authorized Person shall be a “Senior Administrator” for purposes of this Agreement and shall be authorized to sign or authorize a written, electronic or on-line Application and amendments to Applications, together with all schedules, exhibits, appendices or addenda to such Application(s); make changes in the Online Banking System, Telephone Banking System, Electronic Banking Services and Authorized Accounts; authorize new Authorized Persons or issue usernames, passwords, tokens or other credentials that may be used to access information, initiate Transaction Requests, and perform other functions pursuant to the applicable Security Procedures, and to access information, initiate Transaction Requests, and perform all other functions. Regardless of any limitations contained in an Application, established using the on-line features of certain Online Banking Systems and Electronic Banking Services or otherwise described in this Agreement, each Authorized Person shall be authorized to use any Online Banking System, Telephone Banking System and Electronic Banking Service to the full extent the username, password, token, or other information or credentials provided to or obtained by such person enable them to access information, initiate Transaction Requests, and perform other functions pursuant to the applicable Security Procedures, even if such username, password, token or other credentials were originally issued to another person.  Customer acknowledges that the Applications required for and the on-line features of certain Online Banking Systems, Telephone Banking System and Electronic Banking Services may be used to: (i) identify additional Authorized Persons, change the authority granted to certain Authorized Persons or remove Authorized Persons, and/or (ii) authorize or issue usernames, passwords, tokens or other credentials that may be used to access information, initiate Transaction Requests, and perform other functions pursuant to the applicable Security Procedures. Applications or on-line features of certain Online Banking Systems and Electronic Banking Services may allow you to designate certain Authorized Persons or issue usernames, passwords, tokens or other information or credentials that allow a person to act as: (1) “Administrators“ with authority to authorize new Authorized Persons or issue usernames, passwords, tokens or other credentials that may be used to access information, initiate Transaction Requests, and perform other functions pursuant to the applicable Security Procedures, and to use one or more Electronic Banking Services to access information, initiate Transaction Requests, and perform all other functions, or (2) “Userswith the authority to use one or more Electronic Banking Services to access information and initiate certain Transaction Requests pursuant to the applicable Security Procedures.  You acknowledge that you have had the opportunity to review the options available with each of the Online Banking Systems, Telephone Banking Systems and Electronic Banking Ser vices to designate the authority of Authorized Persons, and have selected the Online Banking Systems, Telephone Banking Systems and Electronic Banking Services that are most appropriate for use with each of the your Authorized Accounts, based on your operations, procedures, controls and risk tolerance.

 

Security Procedures

Customer agrees that the authenticity of each Transaction Request will be verified as being issued and authorized by Customer using one or more of the following security procedures (each a “Security Procedure”), which may be modified in an Application upon acceptance by the Bank, or by Senior Administrators through Business Online Access.  Customer acknowledges and agrees that (1) you have reviewed the Security Procedures offered by the Bank; (2) by electing to use an Online Banking System, Telephone Banking System and certain Electronic Banking Services you have made a determination that the applicable Security Procedures are commercially reasonable and any resulting risk is acceptable to you, based on the value, efficiency and convenience of the Online Banking System, Telephone Banking System and Electronic Banking Services you have selected, and (3) by electing to use an Online Banking System, Telephone Banking System and Electronic Banking Services, selecting one or more Security Procedures or requesting that all or any part of a Security Procedure be curtailed, deactivated or otherwise modified, you have elected not to use other procedures or manage your accounts in a manner that presents a lower risk of unauthorized activity or loss. For most Electronic Banking Services, Business Online Access provides the most robust and current Security Procedures and you acknowledge that while the Small Business Banking System or Telephone Banking System may be more convenient you will be at risk for losses that could have been prevented by using the security features of Business Online Access. Except as otherwise provided under applicable law, Customer agrees to be bound by and liable for all transactions initiated using the Security Procedure selected on Customer’s Application(s) or by Customer’s Senior Administrators, including transactions initiated using a procedure that has been curtailed, deactivated, or otherwise modified by or at the request of Customer or any such Authorized Person and transactions initiated as a result of your failure to follow the applicable Security Procedure, and all such transactions shall be deemed authorized regardless of whether such transaction was initiated by Customer or any other person authorized to act by or on behalf of Customer. 

 

Security Procedures for each Online Banking System generally include a combination of username, user password, one time password (“OTP”) and/or token. Initial usernames and passwords may be provided by the Bank and in some instances may also be created for individual Users by a Senior Administrator or Administrator and then changed by the individual User. Tokens or OTPs are provided by the Bank and may either generate an additional code required in addition to use of a username and password and/or use other interactive technology that allows for further verification of online activity, such as a Transaction Request.  OTPs are provided at the time when an Online Banking System is accessed or information or Transaction Request initiated by delivery of a text or voice call or message to a phone number provided in an Application or by an Administrator using the applicable Online banking System.

 

Security Procedures Applicable to Each Banking System. Each Electronic Banking Service may be accessed or used and Transaction Requests initiated using one or more Online Banking Systems or Telephone Banking Systems. Each system has Security Procedures used to access the system or that apply to all Electronic Banking Services available through the system. Customer acknowledges that, before completing an Application or using any Electronic Banking Service, you have reviewed and understand the available systems and the Security Procedures available with each.

 

Telephone Banking Systems. The Bank’s Telephone Banking Systems utilize our Customer Care Center. The Telephone Banking System may be used to make Account Inquiries, initiate Stop Payments, and initiate Internal Transfers between your accounts at the Bank. The Customer Care Center may also be used to initiate Loan Advances and Payments and Wire and Third Party Funds Transfers. Access to services from the Customer Care Center require presentation of the account number for an Authorized Account and certain other information that is generally known only by the Customer, an Authorized Person or individuals with access to the Customer’s non-public financial information. Internal Transfers, Loan Advances and Loan Payments are limited to accounts at the Bank that are individually or jointly owned by the same Customer, as evidenced by the tax identification number (e.g. social security number or employer identification number) associated with the account. Customers may restrict the accounts that may be used for Internal Transfers and Loan Advances and Payments in an Application or by contacting their banker or the Customer Care Center. Wire transfers and Third Party Funds Transfers between accounts, may be subject to the additional Security Procedures described below for Wire and Third Party Funds Transfers.

 

Small Business Online Banking System. The Bank’s Small Business Online Banking System may be used to make Account Inquiries, Import Data, view Electronic Statements, initiate Stop Payments, initiate Internal Transfers, initiate Loan Advances and Payments, and initiate Bill Payment Transactions. Access to the Small Business Online Banking System requires a username and password and may also require a token or verification of an image and passphrase selected by the customer. Internal Transfers, Loan Advances and Loan Payments are limited to accounts at the Bank that are individually or jointly owned by the same Customer, as evidenced by the tax identification number (e.g. social security number or employer identification number) associated with the accounts. Customers may restrict the accounts that may be used for Internal Transfers in an Application or by contacting their banker or the Customer Care Center. Bill Payment transactions can be initiated from any accounts at the Bank that are individually or jointly owned by the Customer, as evidenced by the tax identification number (e.g. social security number or employer identification number) associated with the accounts. Customers may restrict the accounts from which Bill Payment transactions may be made or may disable Bill Payment for all accounts and should do so and use the Business Online Access system in order to take advantage of the additional Security Procedures applicable to external transfers made using that system. 

Business Online Access System.  The Bank’s Business Online Access system may be used to access all of the Electronic Banking Services described in this Agreement. Access to the Business Online Access System requires a username and password and may also require a token or verification of an image selected by Customer. Access to certain Electronic Banking Services may require further use of a token or OTP. Senior Administrators may make changes to the Security Procedures used to access the various Electronic Banking Services available to the Customer through Business Online Access, including the authorization of additional Authorized Persons, establishing or changing transaction limits and the issuance of additional usernames, passwords and tokens.  Account Inquiry, Data Import and Export, Electronic Statements, Stop Payment, Internal Transfers, and Loan Advances and Payments are available for all accounts at the Bank that are individually or jointly owned by the same Customer, as evidenced by the tax identification number (e.g. social security number or employer identification number) associated with the account. Administrators may restrict the accounts that may be used for Internal Transfers. For each other Electronic Banking Service, Customer may designate the specific Authorized Accounts and Users that may initiate Transaction Requests, establish transaction limits, and use other features of the service. Certain Electronic Banking Services are subject to additional Security Procedures, as further described below.

The Bank will provide Senior Administrators or Administrators with initial usernames and passwords to access the Business Online Access system, may also provide tokens or establish OTP requirements to access certain services within the system and instructions for setting up the initial security parameters for the system.  Senior Administrators and Administrators may designate one or more additional Users and assign to them usernames, initial passwords and, where applicable, designate or change phone numbers for delivery of OTPS or assign tokens. Senior Administrators and Administrators are also responsible for safeguarding any tokens issued to you and providing instructions to Users on how to safeguard and protect their assigned usernames, passwords, tokens and telephones used to receive OTPs. Users may be designated for all Business Online Access functions and may also be separately designated with authority only with respect to Positive Pay, ACH Verification, ACH and Remote Deposit functions. Security questions and answers will be established for each Senior Administrator and Administrator for use in verifying their identity when requesting password resets and other account level changes. The Bank is not responsible for any Authorized Person’s actions or inaction in carrying out such responsibilities.  Any User may use Business Online Access to use those Business Electronic Banking Services selected on Customer’s Application(s), initiate Bill Payments in any amount and initiate other Transaction Requests subject to applicable transaction or daily limits, if any, and subject to any applicable Daily Exposure Limits established by the Bank. Bill Payment transactions can be initiated from any accounts at the Bank that are individually or jointly owned by the Customer, as evidenced by the tax identification number (e.g. social security number or employer identification number) associated with the accounts. Bill Payment transactions do not require use of a token or additional identification beyond that necessary to access Business Online Access. Customers may restrict the accounts from which Bill Payment transactions may be made and may also use this feature to disable Bill Payment for all accounts in order to take advantage of the additional Security Procedures applicable to other types of external transfers.  External transfers initiated using Business Online Access, other than through the Bill Payment service, require verification using a code generated by a token or using an OTP, either at the time a User accesses the Business Online Access system or at the time a Transaction Request is initiated.  A Senior Administrator or Administrator for a Customer using Business Online Access may also establish User specific limits within the Business Online Access System, limiting the size of each Transaction Request that a specific User may initiate using Business Online Access, other than those initiated using the Bill Payment service. Customer shall at all times remain solely responsible for all Users and their access rights (and any limitations, conditions or changes thereto), whether placed on the system by or at the direction of Customer’s Senior Administrators or Administrators. 

 

Written Instruction.  Written Transaction Requests may be made by any Authorized Person and any other person who is an authorized signer on the account from which a Transaction Request will be funded, by completing and signing a written Transaction Request form, in person at the location designated by the Bank from time to time for that purpose for the Authorized Account. Certain Electronic Banking Services are subject to additional Security Procedures, as further described below.

 

Service Specific Security Procedures. In addition to the Security Procedures used with each system, each of the Electronic Banking Services identified below shall be subject to following additional Security Procedures:

Wire Transfers and Third Party Transfers.  The Bank will process domestic and/or international wire transfers initiated through the Client Service Center and/or Business Online Access, as indicated in Customer’s Application(s). The Bank may also process transfers to third party accounts at the Bank using the Telephone Access System although authorizing use of this system is substantially less secure than Business Online Access, presenting greater risk to you.  Wire transfers may not be initiated in an amount greater than the Wire Transfer Limits established in Customer’s Application(s) and wire transfers in an amount equal to or less than such Wire Transfer Limits will only be initiated (a) through Business Online Access using a token or OTP, or (b) through the Telephone Banking System in amounts that are less than the callback limit in place at the time of the transfer (as determined by Alerus, which amount may change from time to time at our sole discretion without further notice) , or if verified by the Bank in a telephone call to one of the persons identified in such Application as a Call Back Party. Customer acknowledges that by authorizing third party transfers to accounts at the Bank through the Telephone Banking or Small Business Banking Systems, the Customer is authorizing such transfers without use of call backs, tokens or OTPs and should not do so unless willing to accept the risk of losses that may result.

ACH.  If selected on Customer’s Application(s) the Bank will process ACH Transaction Requests initiated through Business Online Access. If Customer’s Application(s) designate a maximum ACH file amount, the types of Transaction Requests that may be initiated or require verification of Transaction Requests by multiple Authorized Persons for all or certain categories of ACH Transaction Requests, the Bank may only initiate Transaction Requests in accordance with such limitations. If Customer elects not to utilize such transaction or file limitations, Customer acknowledges that the Bank shall have no liability for acting on any Transaction Request that otherwise satisfies the remaining applicable Security Procedure.  ACH transfers will only be initiated if authorized using a token or OTP through Business Online Access and may be subject to verification using Supplemental Security Procedures.

 

Bill Payment. If selected on Customer’s Application(s) the Bank will process Bill Payment Transaction Requests initiated through Small Business Online or Business Online Access. Customer acknowledges that using the Bill Payment system allows the transfer of funds to third parties without the additional protections available by authorizing third party transfers using only the Wire Transfer and ACH services made available by the Bank. If you elect to use the Bill Payment system, you acknowledge that you have reviewed and understand the Security Procedures available and have elected to forego the additional security features available for external transfers using the Business Online Access.

 

Bill Payment transactions may be initiated by following the on-line instructions provided after you access the Small Business Online or Business Online Access Systems, which will require you to identify the person to be paid (“Biller”), the amount of the payment and the date on which you would like the payment made (“Scheduled Payment Date”) and in some instances an invoice or account number. The earliest possible Scheduled Payment Date (typically four (4) or fewer Business Days from the current date) will be designated within the application when you are scheduling the payment. When scheduling payments you must select a Scheduled Payment Date that is no later than the actual due date reflected on your billing statement (“Due Date”) unless the Due Date falls on a non-Business Day. If the actual Due Date falls on a non-Business Day, you must select a Scheduled Payment Date that is at least one (1) Business Day before the actual Due Date. Scheduled Payment Dates must be prior to any late date or grace period in order to avoid late fees or similar charges that may be applied by the Biller. By providing the names and account information of Billers to whom you wish to direct payments, you authorize payments to be made in accordance with the information you provide through the Bill Payment system. When a Bill Payment instruction is received, you authorize a debit to your Authorized Account(s) and remittance of funds on your behalf so that the funds arrive as close as reasonably possible to the Scheduled Payment Date designated by you. The Bank and its agent shall not be liable if a Bill Payment cannot be completed because you have not provided the correct billing account, statement or invoice information, or the correct name, address, phone number, or account information for the Biller. The Bank and its Bill Payment service providers reserve the right to select the method used to remit funds on your behalf to your Biller. These payment methods may include, but may not be limited to, an electronic payment, an electronic to check payment, or a laser draft payment. You may cancel or edit any Scheduled Payment (including recurring payments) by following the directions within the Bill Payment application in the Small Business Online or Business Online Access system. There is no charge for canceling or editing a Scheduled Payment. Once payment processing has begun it cannot be cancelled or edited, therefore a stop payment request must be submitted. Payments to Billers outside of the United States or its territories are prohibited through the Service. Tax payments and court ordered payments may be scheduled; however such payments are considered exception payments, are discouraged and must be scheduled at your own risk as some tax and court authorities will not accept payments made through Bill Payment systems. Use of the Bill Payment service does not alter your liability or obligations that currently exist between you and your Billers. The Bank and its Bill Payment service provider reserve the right to refuse to pay any Biller to whom you may direct a payment. You will be notified if we decide to refuse to pay a Biller designated by you. This notification is not required if you attempt to make a prohibited payment or an exception payment under this Agreement. If we are unable to complete a Bill Payment transaction for any reason associated with your Authorized Account (for example, there are insufficient funds in your Authorized Account to cover the transaction), the transaction may not be completed. In some instances, you will receive a return notice from the Bank or our Bill Payment service provider. In each such case, you agree to reimburse the Bank or our Bill Payment service provider immediately upon demand for the transaction amount that has been returned and for any amount not reimbursed within fifteen (15) days of the initial notification, a late charge equal to 1.5% monthly interest or the legal maximum, whichever rate is lower, may be imposed for any unpaid amounts and for any fees or costs it incurs in attempting to collect the amount of the return from you. You hereby authorize the Bank or its Bill Payment service provider to deduct this amount from your Authorized Account(s) by ACH debit.

 

Protection of Security Procedures. Customer will, and will cause each person to whom any identification code, username, voice retrieval code, user password, OTP, personal identification number (PIN), repeat code or token (each an “Access Device”) is assigned to, establish and maintain reasonable security and control of each Access Device and each computer, telephone, mobile device, and all other equipment, systems and networks used with any Access Device or to access any Electronic Banking Services (collectively the “Customer Equipment”).  The Bank will maintain reasonable security and control over each Access Device within its control as well as any information regarding an Access Device that it maintains. Customer further agrees that each person that is provided access to any Access Device or Customer Equipment by an Authorized Person shall also be deemed an Authorized Person for purposes of the above Security Procedures and this Agreement.

 

You acknowledge that all Customer Equipment and Access Devices, as well as portions of each Security Procedure, are not controlled exclusively by the Bank, that you will be responsible for taking and agree to take appropriate steps to protect all Customer Equipment and Access Devices, as well as those portions of each Security Procedure entrusted to you, and that taking these steps is necessary in order to reduce the risk of unauthorized use or access to your accounts and information and resulting losses to you and to protect the good will and reputation of the Bank and the Electronic Banking Services it offers. Before using the Telephone Banking, Small Business Online Banking or Business Online Banking Systems or any Electronic Banking Service, you should be familiar with these risks and the steps that you are responsible for taking to protect your Customer Equipment, Access Devices, accounts and information. Steps that each Customer should take in order to comply with its obligations under each Security Procedure shall include, but shall not be limited to, ensuring that all Customer Equipment used to access Electronic Banking Services or store information regarding any Access Device are: (a) free from software or computer viruses and protected from unauthorized use, monitoring or control; (b) protected by current and properly maintained anti-virus software, firewalls and other software and hardware based protections; and (c) regularly examined and scanned for viruses and unauthorized use, monitoring or control. Customer further agrees to review transaction and account balances information on all Customers accounts on a daily basis, review account statements immediately upon receipt, and immediately advise the Bank of any transactions that were not authorized or were not executed as authorized. We will never send you a request to provide an Access Device, your account number or information, or any other personal information in any e-mail or text message or in a telephone call that is not initiated by you, and you agree not to provide any Access Device or other personal information in response to such an inquiry.

 

If you or any Authorized Person believes or has reason to believe that: (a) all or part of a Security Procedure has been compromised in any way; (b) any Access Device or other information or credentials necessary to comply with a Security Procedure has been lost, stolen, compromised or has become known to or obtained by any person that is not an Authorized Person; (c) any Customer Equipment or any other the equipment you use to access Electronic Banking Services has been lost or stolen, or the secure use or control over any such equipment or your internal network or systems has been compromised or the phone number for any telephone constituting Customer Equipment is changed or the service of any telephone constituting Customer Equipment is terminated, or (d) if you have any reason to believe that you have been the victim of identity theft (each a “Customer Security Breach”), in order to comply with each Security Procedure you agree to notify the Bank immediately by contacting the Customer Care Center or your banker.  Notice should be given by telephone or in person and should not be provided by e-mail, text message or voice mail.  The Bank will use reasonable efforts to terminate or de-authorize an Access Device as soon as reasonably possible.  In most cases, you will be liable for any losses resulting from a Customer Security Breach that is a result of transactions initiated or other actions taken prior to the time we receive notice from you and have had a reasonable opportunity to act on such notice.

 

Changes in Authorized Accounts or Security Procedures.  Changes in Authorized Accounts or Security Procedures may only be made upon the written request of Senior Administrators.  Users may only be added and passwords and OTP telephone numbers may only be assigned by a Senior Administrator or Administrator, either in writing or using available features of the Business Online Access system.  The Bank may also, from time to time, implement additional verification and identification steps, factors or procedures as it may deem necessary or appropriate, as an amendment to the Security Procedures selected by Customer or as an additional Security Procedure available to Customer; provided that no such amendment or adoption of a new Security Procedure shall constitute an admission or other evidence that a Security Procedure was not commercially reasonable as and when previously selected by Customer or as amended.

 

Supplemental Security Procedures. The Bank may, from time to time and in its sole discretion, require additional verification, including responses to security questions, additional use of OTPs, or refuse to complete a Transaction Request that is otherwise authorized in accordance with an agreed upon Security Procedure or refuse to complete such a Transaction Request without further authorization from Customer, by identifying transactions subject to additional verification or authorization by random selection or using software, algorithms or other criteria intended to identify transactions of a type that present a greater risk of error or fraud. Customer acknowledges that while the criteria utilized may be effective in reducing the overall risk of errors or fraud among the Bank’s electronic banking customers as a whole, these criteria are not designed to eliminate the risk to specific customers or accounts and the Bank’s use of such additional criteria shall not be deemed to amend or otherwise revise the Security Procedures selected and agreed to by Customer pursuant to this Agreement and in any Applications for purposes of authorizing the execution of Transaction Requests or allocating liability for Transaction Requests initiated using an agreed upon Security Procedure. Customer acknowledges that Supplemental Security Procedures may prevent or delay the execution of otherwise authorized Transaction Requests and that Bank shall have no liability for any resulting failure or delay in execution of a Transaction Request. If Customer specifies in an Application that no Supplemental Security Procedures should be used for transactions involving Customer’s accounts, Customer acknowledges that the Bank shall have no liability for acting on any Transaction Request that otherwise satisfies the remaining applicable Security Procedure.

 

Processing Transaction Requests

Customer agrees to be bound by any Transaction Request initiated in accordance with the applicable Security Procedure. Transaction Request initiated using an Electronic Banking Service and Cancellations of Transaction Requests, will be processed by the Bank in accordance with applicable laws and regulations; funds transfer system and clearing house rules and the following requirements:

 

Reliance on Content of Requests, Erroneous Requests

The Security Procedures are in addition to and do not limit or otherwise revoke the authority of any person (whether by course of dealing or otherwise) to issue Transaction Requests or Cancellations in the name or on behalf of Customer.  The Security Procedures are not designed to detect errors in any Transaction Request or Cancellation and the Bank is entitled to rely on the information contained in any Transaction Request or Cancellation initiated in accordance with the applicable Security Procedure, without further inquiry. If a Transaction Request or Cancellation request identifies the beneficiary of a Payment Order, or if a Debit Transfer identifies the owner of the account to be debited, by both name and an identifying or bank account number, and the name and number identify different persons, the execution, making or transmission of the Transaction Request or Cancellation request may be made solely on the basis of the number provided. If a Transaction or Cancellation request identifies any bank by both name and an identifying number and the number identifies a bank different from the bank identified by name, any bank may rely solely on the identifying bank number provided.

 

Time of Receipt of Transaction Requests and Cancellation Requests

The Bank’s deadline for receiving Transaction Requests will be as indicated in Customer’s Application or in any subsequent notice issued by the Bank.  All requests must be received by the Bank on a Business Day prior to the deadline for that day.  Requests received after the deadline or on a non-Business Day may be deemed to be received that hour or may be treated as if they were received at the opening of the next Business Day.  These deadlines are subject to change by the Bank from time to time in the Bank’s sole discretion. 

 

Repetitive Transfers

If Repetitive Transfers are selected in an Application, the Bank may assign Customer or an Authorized Person one or more repeat codes to expedite processing of Repetitive Transfers.  For purposes of this Agreement, Repetitive Transfers are those funds transfers in which the receiving bank, beneficiary, beneficiary’s account and Authorized Account are the same for each transfer and only the transfer date and amount vary.

 

Exposure Limits, Overdrafts

From time to time, the Bank may establish daily limits for Customer to manage the Bank’s risk of nonpayment, return or reversal of transactions (“Daily Exposure Limits”).  The Bank will notify Customer of any applicable Daily Exposure Limit and of any changes thereto, which notice may be oral or written.  Customer acknowledges that Daily Exposure Limits have been established by the Bank to manage the Bank’s risk of nonpayment, return or reversal of transactions, are not part of any Security Procedure, may be waived by the Bank in its sole discretion and may not be relied on by Customer as a limit on the total of funds transfers that may be authorized in the name of Customer on any Business Day. The Bank shall not be obligated to accept or execute any Transaction Request or order if the aggregate amount of all transactions requested by Customer on the same Business Day exceeds Customer’s daily limit or if such order is in excess of the Available Funds or would result in or increase an overdraft in the account designated to fund the transaction; however, nothing in this Agreement shall preclude the Bank from executing such orders in its sole discretion.  The Bank may, at any time and in its sole discretion, change Customer’s Daily Exposure Limit, or delay the availability of the proceeds of Debit Transfers, by providing either oral or written notice of such change to Customer.  Nothing in this section shall prohibit the Bank from debiting any Authorized Account for any Transaction Request executed by the Bank, even if the Payment Order exceeds Customer’s Daily Exposure Limit or the debit creates or increases an overdraft in the account.  In the event an overdraft is created or increased, Customer agrees to deposit or transfer into the account sufficient Available Funds to pay the amount of the overdraft by the close of that Business Day.  Any overdraft existing at the close of a Business Day is immediately due and payable without notice or demand.  Nothing in this Agreement nor any course of dealing between Customer and the Bank constitutes a commitment or obligation of the Bank to increase Customer’s Exposure Limit, lend money, allow the creation or increase of an overdraft, or otherwise extend any credit or advance funds to Customer to pay for transaction or transfer made hereunder. 

 

Settlement Reserve

Customer may be required to maintain a reserve (“Settlement Reserve”) of an amount to be solely determined by the Bank.  Customer hereby acknowledges and agrees that any Settlement Reserve will be deposited in an account at the Bank for exclusive use by the Bank for purposes of offsetting any Customer obligations under this Agreement.  If Customer's Settlement Reserve falls below the required amount, Customer authorizes the Bank to immediately replenish the Settlement Reserve to an amount to be determined by the Bank via an ACH debit to an Authorized Account or by a direct deposit to the Settlement Reserve.  No interest will be paid on the Settlement Reserve.  Customer grants the Bank a security interest in any Settlement Reserve so that the Bank may enforce any obligation owed by Customer under this Agreement without notice or demand to Customer.  Customer's obligation to maintain a Settlement Reserve shall survive the termination of this Agreement for the duration of the Termination Period during which time the Bank’s security interest shall continue.

 

Limits on Transfers from Savings Accounts

Pursuant to applicable laws and regulations, Transaction Requests that result in the withdrawal from a savings or money market account to another account or to third parties and all other withdrawals by preauthorized, automatic, telephone, or computer transfer, or by check, draft, debit card, or similar order to third parties are limited to a total of six per month per account.

 

Canceling Transaction Requests and Communicating Stop Payment Orders

You may request cancellation of any wire transfer or ACH Transaction Request (a “Cancellation”) in the manner provided in the Business Online Banking Systems or, if initiated using the Telephone Banking System, by calling the Customer Care Center.  You do not have the right to cancel wire transfer Transaction Requests after they have been received by the Bank.  Customer may cancel an ACH Transaction Request by submitting a Cancellation no later than the cut off time indicated in Customer’s Application on the business day prior to the Settlement Date for the related ACH Transaction. The Bank will use reasonable efforts to act on a late ACH Cancellation request or a wire Cancellation that is submitted before the Bank executes the wire transfer but shall have no liability for failure to do so.  The “Settlement Date” is the date on which an ACH transaction is settled by the exchange of funds through a Federal Reserve Bank, as requested by Customer, or otherwise determined in accordance with Operating Rules. The Bank shall have no obligation to adjust, cancel, reverse or stop payment or posting of any transaction, except to the extent permitted by applicable funds transfer system and clearing house rules and applicable laws and regulations. 

 

Foreign Currency

All Transaction Requests will be processed in U.S. Dollars.  For wire transfers only, Customer may request that the Bank execute a transfer in the currency of a foreign government or intergovernmental organization.  In the case of such requests, the Bank will debit Customer’s Authorized Account for an equivalent amount in U.S. Dollars, determined on the basis of the Bank’s buying rate for such foreign currency on the date of such transfer.  If any Transaction Request initiated in a foreign currency is subsequently reversed or returned, the Bank will pay to Customer the value in U.S. Dollars of the amount of foreign currency received by the Bank, determined on the basis of the Bank’s buying rate for such foreign currency on the date of receipt, and Bank shall have no liability to Customer for any loss due to currency exchange.

 

Notice of Transactions and Rejections

The Bank will notify Customer of the execution, making or transmittal of transactions unless otherwise agreed.  The Bank will notify Customer if the Bank, any funds transfer system or clearinghouse, or any other bank rejects or fails to execute a Transaction Request, and will inform Customer of the reason for the rejection or failure after the Bank receives notice of the reason. The Bank will have no liability to Customer for such rejection or failure.  In the event that a Transaction Request is rejected, the Bank will refund any monies debited from Customer’s account in connection with the Transaction Request only after the Bank has received confirmation of the effective cancellation of the order and the Bank is in possession of the funds debited or earmarked in connection with the order. If the order is payable in foreign currency, the Bank shall credit Customer’s account for the value of the order after it has been converted from foreign currency to US Dollars at the Bank’s buying rate for exchange at such time as the cancellation of the order is confirmed by the Bank and the Bank shall have no liability for any losses due to currency exchange.  The notices provided by the Bank under paragraph shall be deemed commercially reasonable and effective when given if given by telephone, facsimile transmission, first class mail or private delivery service, or if the information is made available to Customer through its regular deposit account statement, Business Online Access or any other online banking system or service used by Customer.

 

Bank’s Liability

An “Unauthorized Transaction” means a Payment Order or Debit Transfer that was not authorized by an Authorized Person on behalf of Customer.  The term does not include (a) instructions issued by any person in accordance with the Security Procedures specified in this Agreement, unless such person obtained an Access Device through the gross negligence or willful misconduct of the Bank, or (b) any transaction from which the immediate benefit accrues to Customer, any subsidiary or affiliate of Customer or any partnership or joint venture of which Customer is a member.  An “Erroneous Transaction” means a Payment Order that was executed by Bank in a larger amount or sent to a different beneficiary than was specified in Customer’s Transaction Request, subject to the terms of this Agreement regarding reliance on incorrect or incomplete Transaction Requests, or was executed more than once.  The Bank’s liability for Unauthorized Transactions and Erroneous Transactions shall be limited as follows: (1) Customer agrees to review all deposit account statements (whether sent by mail or posted online) within thirty (30) days of receipt, posting or availability for on-line review; (2) if Customer reports an Erroneous Transaction within thirty (30) days after the date such transaction first appeared on Customer’s Account statement, the Bank will refund such transaction to the extent it is not enforceable against Customer, together with interest on the amount refunded from the date of the transaction to the date of the refund, if due, not to exceed twenty (20) days; (3) the Bank shall have no liability for any Unauthorized or Erroneous Transaction reported more than thirty (30) days after the date such transaction first appeared on Customer’s Account statement, except to the extent required by applicable law, (4) the Bank’s liability for any losses due to error or mishandling of any ACH Transaction Request shall be further limited in amount to the greater of: (a) the total amount paid by Customer for services under this Agreement during the 12 months preceding the incident in question, and (b) any amount actually recovered by the Bank from any ACH or any third party pursuant to the Governing Rules or any indemnity agreement.

 

To the extent the Bank is liable for an Unauthorized or Erroneous Transaction in accordance with the foregoing paragraph, the Bank shall only be liable for Customer’s actual damages and then only to the extent the Bank fails to exercise ordinary care in performing its obligations under this Agreement and such damages are recoverable under UCC Article 4 or 4A.  The Bank will be deemed to have exercised ordinary care if its actions or failure to act have been in conformity with the Bank’s prescribed procedures and such procedures do not vary unreasonably from general banking practices and are not specifically disapproved by any provision of the UCC Article 4 or 4A.  Notwithstanding the foregoing, the Bank shall not be liable for failing to detect any Customer error contained in any Transaction Request sent by or on behalf of Customer to the Bank.  THE BANK SHALL NOT BE LIABLE FOR ANY CONSEQUENTIAL, INDIRECT OR SPECIAL DAMAGES UNDER THIS AGREEMENT, EVEN IF THE BANK HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

General Terms and Conditions

Business Day. For purposes of this Agreement, a “Business Day” is every day on which the Bank is open for purposes of carrying on substantially all of its business, except Saturdays, Sundays, and holidays observed by the Bank.

 

Customer’s Equipment, Networks, Software, and Applications

Before each use of any Electronic Banking Service, Customer should verify that they are using equipment, software and applications that meet the current, minimum specifications established by the Bank from time to time or described in this Agreement. To ensure compliance with the Bank’s minimum specifications, in order to comply with its obligations under each Security Procedure Customer shall verify the following prior to each use of any Electronic Banking Service:

 

  • Each computer used by Customer to access Electronic Banking Services must meet or exceed the Bank’s minimum specifications. Customer is solely responsible for the selection, purchase or lease and maintenance of all equipment used and is solely responsible for maintaining or upgrading this equipment in response to any changes in specifications. All equipment must be owned or leased and controlled by the Customer and password protected to prevent unauthorized use. Equipment made available by Customer for use by the public, its customers or other third parties shall not be used to access Electronic Banking Services.
  • All of Customer’s network equipment (including all routers, servers, and modems) must include firewall and other protections to prevent unauthorized access to Customer’s network or unauthorized access of use of any equipment connected to Customer’s network that is used to access Electronic Banking Services. All other equipment connected to Customer’s network must be similarly protected in order to prevent unauthorized access to Customer’s network.
  • All of Customer’s equipment (including network equipment) uses current versions (including all updates and patches) of: (i) an operating system and internet browser software that meets the minimum specifications; (ii) any software or applications required for use of the equipment to access Electronic Banking Services; and (iii) security software that provides firewall, intrusion and anti-virus protection (“Security Software”). None of the settings recommended by the provider of any Security Software have been altered and all recommended systems scans have been performed. All of Customer’s equipment is free from software or applications that alter or modify the operating or security features of any of the software described above. Customer is solely responsible for the selection, purchase or lease and maintenance of any third party software.

From time to time, we may offer you access to software products and services made available by third parties and that are designed to protect your equipment, systems and networks from unauthorized access, use or control. If you elect to use any such third party software, you acknowledge and agree that you are ultimately responsible for selecting, installing, updating and operating the systems or software you utilize to protect your equipment, systems and networks. The Bank shall not be responsible for any errors or failures in the operation of any Electronic Banking Service or Security Procedure arising out of any malfunction of Customer’s equipment or software, including any software or services made available by third parties through the Bank, or Customer’s failure to use equipment or software required by the minimum requirements and other terms of this Agreement. The Bank is not responsible for any computer virus or related problems that may be associated with the use of any online system.

 

Risks of Using the Internet

Customer acknowledges that, while the Bank and its service providers have established certain procedures, such as firewalls and data encryption, designed to prevent unauthorized access to Customer’s accounts, transactions or information, there can be no assurance that information or transaction activity will be completely secure.  Customer also acknowledges that access to the services will not be free from delays, malfunctions, or other inconveniences generally associated with use of the internet and related communications networks and systems. 

 

Software and Other Proprietary Data

If Customer has approved Small Business Banking, Business Online Access and/or Remote Deposit Services for use, Customer shall have a non-exclusive, non-transferable license to use the related system software (“Software”) solely for the purpose of using Electronic Banking Services in accordance with the terms and conditions of the Agreement.  Customer acknowledges that any software provided by the Bank for use with the Electronic Banking Services includes software owned and copyrighted by third parties and is being sub-licensed to Customer by the Bank, subject to the terms, conditions and limitations of the Bank’s license from such third parties.  Customer acknowledges that it is not purchasing title to any Software, that such Software may not be copied or used independently of the Electronic Banking Services, and that no third party provides any support services, upgrades or technical assistance in connection with the software owned by it.  Customer agrees not to decompile or reverse engineer any code contained in the Software.

 

Use of Funds Transfer Systems, System Rules and Representation

The Bank may facilitate a Transaction Request or Cancellation by use of any ACH, Fedwire or other funds transfer system.  If the accounts to be debited and credited by a Transaction Request are both maintained by the Bank, the Intra-Bank Transfer or related Cancellation may be made by a book transfer rather than through a funds transfer system.  The Bank will be responsible for selecting an ACH operator for transmission of the ACH entries.  Customer acknowledges that Transaction Requests will be subject to applicable ACH, Fedwire or other system rules and agrees to be bound by the same.  Terms used in this Agreement which are defined in the applicable system rules, but not in this Agreement, have the meanings given those terms in the applicable system rules.  Customer represents, warrants, and covenants to the Bank that: (a) at the time each Transaction Request (or any related adjustment or reversal requested by Customer), Stop Payment or Cancellation is executed, made or transmitted by the Bank, the information regarding it provided by Customer to the Bank is accurate and complies with the format and content specifications of the applicable funds transfer system rules and this Agreement, (b) if a Transaction Request requires the authorization of a third party, Customer will keep a copy of any required authorizations on file and make them available to the Bank upon request, (c) each Transfer Request initiated by Customer is in compliance with the laws of the United States of America, including, without limitation, economic sanctions maintained by the United States Treasury Department’s Office of Foreign Asset Control.  Without limiting the generality of the foregoing, Customer agrees to be bound by the Governing Rules, which include the operating rules, and the guidelines which are part of the operating rules, of the National Automated Clearing House Association (“NACHA”), as applicable and in effect from time to time.  The operating rules are available upon request. 

 

Governing Law, Rules AND VENUE

This Electronic Banking Agreement and all schedules, exhibits, policies, applications and other material of the Bank referenced hereby (“Reference Materials”), will be governed by the laws, regulations and rules of the State of New York, without reference to provisions relating to conflict of laws, except to the extent that United States federal laws, regulations or rules are applicable hereto and except as further noted below.  For the purpose of this Agreement, “Governing Rules” means the foregoing state and federal laws, regulations and UCC Article 4A (as defined below) and any applicable operating rules of NACHA, as are currently in effect, and as amended from time to time, except to the extent Section 4A-507 of UCC Article 4A  or the choice of law rules of a particular jurisdiction do not permit the application of New York law, in which case the law of the state where the branch holding the customer’s account is located shall apply.  With respect to ACH transactions, the Customer and the Bank agree to be bound by operating rules of NACHA, as applicable and in effect from time to time and as supplemented by the law of the State of New York and UCC Article 4A. If a Transfer Request or Cancellation relates to or is part of a transaction, portions of which are subject to the Electronic Funds Transfer Act of 1978 and Federal Reserve Board Regulation E (the “EFTA”), as may be in effect from time to time, all actions and disputes between Customer and the Bank concerning that Electronic Banking Service or Cancellation shall be determined pursuant to Article 4A of the Uniform Commercial Code as in effect from time to time in the State of New York, and as varied by this Agreement (“UCC Article 4A”), except to the extent the EFTA  otherwise requires or to the extent Section 4A-507 of UCC Article 4A does not permit the application of New York law.  The Bank may execute Payment Orders through Fedline (the funds transfer system owned and operated by the Federal Reserve Bank) and such Payment Orders will be governed by Subpart B of Regulation J of the Federal Reserve Board. 

 

Any litigation, dispute or claim relating to this Agreement or any Reference Materials must be brought exclusively in a state or federal court located within the Minneapolis, Minnesota metropolitan area.  You waive any objection that you may have based upon improper venue or forum non conveniens to the conduct of any such proceeding.  Both you and the Bank waive any right to have a jury participate in the resolution of any litigation, dispute or claim between relating to this Agreement or any Reference Materials.

 

Right of Setoff

Customer hereby acknowledges and agrees that the Bank shall have a right of setoff the amount of any and all fees, returns and refunds owed the Bank by Customer under this Agreement against any deposit account of the Customer.

 

Recording and Use of Communications

Customer acknowledges and agrees that all telephone conversations and data transmission among or between Customer, the Bank, any third parties used by Customer or Bank to effect Business Electronic Banking Services and their respective employees and agents may be recorded and retained by the Bank and the Bank’s third party service providers by use of any reasonable means, but the Bank is under no obligation to make or maintain any such recording.  Such data shall be used by the Bank to provide the services contemplated by this Agreement and as provided in the Bank’s customer information policies, subject to applicable law.

 

Warranty

Bank represents and warrants that it has developed the Electronic Banking Services (other than those portions furnished by third party vendors or service providers) and has the right to provide the Electronic Banking Services to Customer.  ANY HARDWARE, SOFTWARE OR ASSOCIATED DOCUMENTATION PROVIDED BY THE BANK ARE PROVIDED “AS IS.”  THIS WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESSED, IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF QUALITY, PERFORMANCE, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.  NO THIRD PARTY MAKES ANY EXPRESS OR IMPLIED WARRANTIES OF QUALITY, PERFORMANCE, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE.  NO THIRD PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INDIRECT OR SPECIAL DAMAGES.

 

Limitation of Liability; Acts of God 

The Bank will not be liable for its inability to perform its obligations under this Agreement when such inability arises out of causes beyond its control, including, without limitation, any act of God, accident, equipment failure, system failure, labor dispute, or the failure of any third party to provide any electronic or telecommunication service used in connection with the execution or cancellation of a Transaction Request or any other service.

 

Customer Indemnification

Customer shall indemnify and hold the Bank harmless from any cost, liability or expense (including reasonable attorneys’ fees) arising from (a) any claim by a third party alleging that a Transaction Request or other activity contravenes or compromises the rights, title or interest of any third party, or violates the Governing Rules, or any other law, rule, regulation, ordinance, court order or other mandate or prohibition, or (b) the breach of any representation, warranty, or covenant made by Customer to the Bank in this Agreement (“Claim”), except to the extent the Claim is caused directly by the Bank’s failure to act in accordance with Customer’s instructions given pursuant to and required by this Agreement.  This paragraph shall survive termination of this Agreement with respect to acts or omissions occurring during its term.

 

Authority

Concurrent with Customer’s delivery of its Application(s) to the Bank, Customer shall provide the Bank evidence satisfactory to the Bank of Customer’s authority to execute and perform its obligations hereunder and such other documents as the Bank may reasonably require.  The Bank is entitled to rely upon such evidence and upon amendments thereto executed by an Authorized Person.

 

Delivery of Financial Information

At least once every twelve (12) months at the Bank’s request, Customer shall provide the Bank with such financial statements and other information as the Bank may reasonably request for purposes of evaluating the Bank’s risk of nonpayment under this Agreement.  The Bank reserves the right to perform periodic Customer site inspections to ensure compliance with this Agreement.

 

Taxes

Customer is responsible for all tariffs, duties, or taxes (excluding U.S. federal, state, and local taxation of the income of the Bank) imposed by any government or governmental agency in connection with any payment order executed pursuant to this Agreement.

 

No Fiduciary Relationship

At no time will the Bank be considered Customer’s advisor or fiduciary with respect to this Agreement or any services provided hereunder.

 

Beneficiaries

This Agreement is for the benefit only of the Customer(s) named in the Application(s) and is not intended to and shall not be construed as granting any rights to or otherwise benefiting any other person.

 

Fees

The fees and charges for any services provided hereunder shall be as set forth in the Application(s) or in account documentation, as applicable.  Customer agrees to pay such fees and charges and authorizes the Bank to charge any of its accounts for said fees and charges, subject to any applicable earnings credit allowances.  These fees may be in addition to any fees otherwise imposed on the Account(s).  The Bank reserves the right, upon written notice to Customer, to increase its fees and charges, or to impose additional fees and charges, in connection with the Service(s) provided.

 

Events of Default

The occurrence of any of the following shall be deemed an Event of Default under this Agreement: (a) any breach or default by Customer under the terms of this Agreement; (b) any breach or default under the terms of any other note, obligation, mortgage, assignment, guaranty, other agreement, or other writing to which Customer and the Bank are parties; (c) the insolvency, death, dissolution, liquidation, merger or consolidation of Customer; (d) any appointment of a receiver, trustee or similar officer of any property of Customer; (e) any assignment for the benefit of creditors of Customer; (f) any commencement of any proceeding under any bankruptcy, insolvency, receivership, dissolution, liquidation or similar law by or against Customer; (g) the issuance or levy of any writ, warrant, attachment, garnishment, execution or other process against any property of Customer; (h) the attachment of any tax lien to any property of Customer; (i) any statement, representation or warranty made by Customer (or any representative of Customer) to the Bank at any time shall be incorrect or misleading in any material respect when made; (j) there is a material adverse change in the condition (financial or otherwise), business or property of Customer; (k) the Bank shall in good faith believe that the prospect of due and punctual payment or performance of Customer’s obligations under this Agreement is impaired; or (l) the Bank shall in good faith believe that Customer is using the Services for any purpose that is illegal, fraudulent or exposes the Bank to an unacceptable risk of financial, legal or reputational harm. 

 

Term and Termination

Subject to our acceptance and approval, this Agreement shall be effective upon the signing of any Application for services.  Unless otherwise noted, either party may terminate this Agreement upon at least thirty (30) days’ advance written notice.  Any termination of this Agreement shall not alter the obligations of either party arising prior to such termination.   The Bank may suspend or terminate any or all of the services provided hereunder for security reasons or as may be required by law, regulation, the Governing Rules or bank regulatory authorities.  The Bank may suspend or terminate Customer’s access to any service or related service that is not used at least once in any six-month period.  The Bank may terminate this Agreement or any service hereunder immediately with respect to the initiation of ACH transactions and immediately and without prior notice upon an Event of Default. 

 

Amendments

Except for those matters which the Bank, in its sole discretion, elects to amend or change by delivering notice to Customer, by mail or e-mail, at least thirty (30) calendar days prior to the effective date of such amendment or change, the provisions of this Agreement may be amended only by written agreement executed by a Senior Administrator.

 

Assignment

Customer may not assign this Agreement, or any of its rights or duties hereunder, or any accounts created hereunder to any person without the Bank’s prior written consent.  The Bank may assign all or part of its duties under this Agreement to an affiliate of the Bank or a third party service provider as may be necessary in order to provide the Services. 

 

Third Party Service Institutions

Customer acknowledges that the Bank may, from time to time, rely upon other financial institutions or entities (“Service Institutions”) in order to provide the services.  Customer agrees to cooperate in the event any Service Institution may require additional information or data in connection with a specific service.  Furthermore, Customer consents to the sharing of its corporate, financial, or other information with any Service Institution as may be necessary in order to complete a particular transaction or otherwise accomplish the Services Customer has requested under this Agreement.

 

Notice

Except as otherwise provided in this Agreement, any notice required or permitted by this Agreement shall be deemed to have been given when mailed, postage prepaid, or when communicated to the parties by e-mail or other form of electronic communication based on the contact information noted in the Application(s), by notices provides through any Telephone Banking or Online Banking System or by any other commercially reasonable means.  Customer agrees to keep the Bank informed of its current contact information at all times.

 

Severability

In the event that any court or tribunal of competent jurisdiction determines that any provisions of the Agreement are illegal, invalid, or unenforceable, the remainder of this Agreement shall not be affected thereby.

 

Entire Agreement; Account Subject to Account Agreement

This Agreement (and the other documents referenced herein) constitute the entire agreement and understanding between Customer and the Bank relating to the subject matter of this Agreement as of the date hereof and supersedes all prior agreements (if any).   Except as may be modified by this Agreement, all provisions of the Bank’s deposit account terms and conditions and any other agreement(s) between the Bank and Customer regarding any Authorized Account will remain in full force and effect during the term of this Agreement, including all fees and charges.  To the extent that the specific terms and conditions of this Agreement conflict with the applicable deposit account agreement, the terms and conditions of this Agreement shall control.