CONTROLLED DISBURSEMENT SERVICE TERMS
Section 1. THE SERVICE.
These Controlled Disbursement Service Terms (the “Service Terms”) set forth the terms and conditions under
which Bank provides Customer with daily reporting of all Checks via the Treasury Management Online Portal
(the “Service”). The Service is also subject to the General Provisions of the Treasury Management Terms and
Conditions Agreement (the “Agreement”) as if fully incorporated herein and all Applicable Laws. In the event
of a conflict between these Service Terms and other terms in the Agreement, these Service Terms shall
control. Unless otherwise defined herein, any capitalized terms shall have the meaning as set forth in the
Agreement. Any reference to the Agreement herein shall be deemed to include these Service Terms.
Section 2. IMPLEMENTATION.
The Service requires Customer to establish a “Controlled Disbursement Account” against which Customer can
write Checks and a separate “Funding Account” in which Customer agrees to maintain sufficient balances to
fund Check clearing activity in the Controlled Disbursement Account. The precise amount of funds needed to
cover the clearings is automatically transferred to the Controlled Disbursement Account from the Funding
Account as designated on the applicable Operational Instructions. In addition, Customer can sign up to
receive a Controlled Disbursement report alert notification. During the implementation process, Customer
agrees to provide to Bank’s satisfaction ten (10) voided sample Checks from each Account for purposes of
checking and verifying accuracy, validity, and quality of the MICR (Magnetic Ink Character Recognition) fields
on Checks and paper quality.
Section 3. PROCESSING.
(a) Customer will be notified on each Business Day of the total amount of Checks drawn on the
Controlled Disbursement Account and the total amount that will be debited from the Funding Account by
one of the methods designated on the applicable Operational Instructions. In providing the Service,
Customer understands that Bank relies on clearing information that Bank receives from the applicable
Federal Reserve Bank or other clearing entity, the accuracy and timeliness of which Bank does not control
and for which Bank assumes no responsibility or liability. Checks drawn on the Controlled Disbursement
Account that are presented over-the-counter may not appear in the total amount to be debited from the
Funding Account that Business Day, and will instead appear in the debit total for the next Business Day.
(b) Customer agrees to maintain a balance in the Funding Account sufficient to offset the total
amount of Checks presented against the Controlled Disbursement Account. Customer agrees that Bank may
debit the Funding Account for such amount and transfer the same into the Controlled Disbursement Account
each Business Day. Bank reserves the right to require Customer to maintain a specified minimum balance in
the Funding Account. Customer acknowledges that Bank is not obligated to provide overnight or daylight
funding for any shortfall in the Controlled Disbursement Account unless Bank has agreed in writing to provide
(c) Customer agrees that, without notification, Bank may return Customer’s Checks drawn on
Customer’s Controlled Disbursement Account for any reason including, but not limited to, insufficient funds
in Customer’s Funding Account, alleged forgeries, or items in controversy.
(d) Customer acknowledges that only Checks can be drawn against a Controlled Disbursement
Account. Automated Clearing House (ACH) debit or credit transactions cannot be applied to a Controlled Disbursement Account and will not be processed. Customer agrees to hold Bank harmless for any Losses incurred by Customer as a result of Customer’s failure to redirect any ACH transactions to proper accounts with no ACH restrictions.
Section 4. OPTIONAL LINE OF CREDIT DRAW SERVICE.
In connection with the Service, Customer has the option of linking an eligible line of credit maintained with
Bank (“LOC”) to the Funding Account to cover deficiencies in the Funding Account by drawing against the
LOC. With this option, Customer authorizes Bank to make an automatic draw on Customer’s LOC in an
amount sufficient to cover any deficiency in the Funding Account, or up to the maximum amount available
under the LOC, whichever is less. This method of obtaining a draw against the LOC shall be in addition to any
method set forth in the line of credit agreements(s), promissory note(s), security agreement(s) or other
agreement governing the LOC (collectively, the “Credit Agreement”). Bank shall not utilize the LOC to cover
any deficiency in the Funding Account or Controlled Disbursement Account after the maximum amount
available under the LOC has been advanced. Bank is not obligated to follow the foregoing procedures if any
default exists under the Credit Agreement. Further, Bank specifically reserves its right of offset as to the
Funding Account and any other legal rights it has with respect thereto, and Customer acknowledges that
Bank is not obligated to draw against the LOC to fund a deficiency in the Funding Account prior to exercising