Terms and Conditions

Controlled Disbursement

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THE SERVICE

Bank provides Customer with the ability to control disbursing of funds through reporting of all checks via Bank's online banking system. The precise amount of funds needed to cover the clearings is automatically transferred to the Controlled Disbursement Account ("Controlled Disbursement Account") from an Account (“Funding Account”) held at Bank as designated on the applicable Operational Instructions. In addition Customer can sign up to receive a Controlled Disbursement report alert notification.

PROCESSING

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.

Customer will be notified on each Business Day of the amount of checks drawn on the Controlled Disbursement Account and the amount that will be debited from the Funding Account by one of the methods designated on applicable Operational Instructions.

Customer agrees to maintain a balance in the Funding Account sufficient to offset the total 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.

Customer agrees that, without notification, Bank may return Customer's checks drawn on Customer's Controlled Disbursement Account for reasons including, but not limited to, insufficient funds in Customer's Funding Account, alleged forgeries, or items in controversy.

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 or liabilities incurred by Customer as a result of Customer’s failure to redirect any ACH transactions to proper accounts with no Automated Clearing House (ACH) restrictions.

OPTIONAL SERVICE

Customer option includes a Draw on Line of Credit capability.

Customer can agree that in the event there are insufficient funds in the Funding Account to cover checks drawn on the Controlled Disbursement Account, Bank is authorized to make an automatic draw on the Customer's line(s) of credit maintained with Bank in an amount sufficient to cover such deficiency, or up to the maximum amount available under such line(s) of credit, whichever is less. This method of obtaining a draw shall be in addition to any method set forth in the line of credit agreements(s) or promissory note(s) governing the line of credit(s). Bank shall not utilize the line(s) of credit to cover any deficiency in the Funding Account or Controlled Disbursement Account after the maximum amount available thereunder has been advanced. Bank is not obligated to follow the foregoing procedures if any default exists under the line(s) of credit. Further, Bank specifically reserves its right of offset as to the Funding Account or any other legal rights it has with respect thereto, and is not obligated to provide the foregoing services prior to exercising such rights.