MASTER TREASURY AGREEMENT
1. INTRODUCTION.
Client has caused one or more Acceptance of Master Treasury Agreement (each, an “Acceptance”) to be signed by one or more Executing Representatives, each such Acceptance is applicable to the enumerated services (“Service(s)”) to be performed by Tri Counties Bank (“Bank”), subject to Bank’s approval. The Services are more specifically described in the following, as updated from time to time: (i) the Acceptance(s); (ii) the service descriptions to the Master Treasury Agreement (“Master Agreement”), including any schedules, and exhibits to the same (collectively, “Service Descriptions”); and (iii) user guides, user manuals, set-up forms and other user materials, including online terms and information (collectively, “Supporting Documents”). The Master Agreement and each Service Description may include exhibits, appendices, schedules or similar materials, which form a part of the Master Agreement and Service Description, respectively. Any reference to the Master Agreement shall be deemed to include the Master Treasury Management Services Agreement, the Acceptance, the respective Service Descriptions, and the Supporting Documents, unless otherwise stated each of which may be amended from time to time. Unless otherwise agreed in writing, the Master Agreement including the Service Descriptions and Supporting Documents will be deemed accepted by Client upon provision by Bank of a Service to Client and continued use of such Service after any modification thereto.
The terms and conditions of the Master Agreement apply to the Services, and Client’s deposit accounts held at Bank which Client uses for transactions associated with the Services, in addition to the account deposit terms and conditions otherwise applicable to Client’s accounts with Bank. Unless otherwise provided, to the extent any provision of the Master Agreement conflicts with a Service Description, the provision of the Service Description will control. To the extent any term or provision of the Master Agreement conflicts directly with any term or provision of the applicable deposit account terms and conditions or the Supporting Documents, the provision of the Master Agreement (including any Service Description) will control. All transfers to and from an account will be subject to the terms and conditions applicable to the account as set forth in the deposit account terms and conditions governing the account, including but not limited to transfer limitations, as amended by the Master Agreement. The term “may,” when used in reference to action by Bank, is permissive and means that Bank reserves the right or is allowed, but not required, to take any action or inaction. Unless expressly provided otherwise, all references to time will be Pacific Standard Time.
2. SECURITY PROCEDURES; COMMUNICATIONS.
(a) Client and Bank may agree to certain procedures and security devices, which may include without limitation, codes, encryption, passwords, and other security devices, systems and Software (referred to individually and collectively, “Security Device(s)”) designed to verify the authenticity of information (including without limitation transaction information), instructions, orders (including without limitation payment orders) and other communications relating to a Service (each a “Communication”). The term “payment order(s)” includes payment orders, as defined in Division 11 of the California Commercial Code. In this regard, application of the procedures and Security Devices to authenticate a Communication will be collectively referred to as the “Security Procedures” in the Master Agreement.
If Bank takes any action not provided in the Security Procedures in connection with any Communication, such additional action shall not be deemed to become a mandatory part of the continuing Security Procedures. Client understands and agrees that Bank will use the Security Procedures to verify the authenticity of Communications and that the Security Procedures are not designed to, and are not used for the purpose of, detecting errors in transmission or content of Communications, including discrepancies between account names and numbers. As between Bank and Client, any transaction resulting from a Security Procedure which has been previously agreed upon between Bank and Client shall be deemed authentic for all purposes, and accordingly Client shall be bound thereby.
(b) Before using a Service and before sending a Communication to Bank, Client will review the Security Procedures and determine whether the Security Procedures will provide a commercially reasonable 165 TM-0025 Master Treasury Agreement
(07/12/22) Page 2 of 42
method for verifying whether a Communication is that of Client. As part of the review, Client will consider the size, type, and frequency of Communications Client normally makes or anticipates making, along with such other factors as Client may deem relevant or appropriate. i) Commercially Reasonable Procedures. If the size, type or frequency of Communications made by Client changes such that the Security Procedures in use by Client no longer provide a commercially reasonable method of providing security against unauthorized Communications, Client shall immediately notify Bank.
ii) Supplemental Security Devices. Bank may offer to Client or require Client to use additional authentication tools or methods from time to time (for example, challenge questions and phrases for employees). If Client chooses not to implement supplemental authentication tools, Client’s access to some or all of the Services may be limited or denied entirely. The term “Security Devices” will include any supplemental authentication tools that are offered by Bank and used by Client. Client’s continued use of any modified Security Procedures will evidence Client’s agreement that the modified Security Procedures are commercially reasonable for Client. iii) Client Responsible for Verified Communications, Even if Unauthorized. If Bank acts on a Communication in compliance with the Security Procedures, then Client will be obligated on the Communication, and it will be treated as Client’s Communication, whether or not authorized by Client.
iv) Client Responsible for Communications Actually Authorized. Regardless of whether or not Bank complied with the Security Procedures, any Communication received by Bank will be treated as Client’s and will bind Client if the Communication is delivered to Bank directly or indirectly by any Authorized Representative (as defined below), or if Client would otherwise be legally bound by the Communication, regardless of whether the Communication was erroneous in any respect or that any loss would have been prevented if Bank had complied with the Security Procedures. (c) Client will use and safeguard the Services, Security Devices, Security Procedures, Supporting Documents, and the Software (if applicable) in accordance with this Master Agreement. In connection with such safeguarding obligations, Client will implement and maintain physical, technical, and administrative controls and procedures sufficient to prevent impermissible or unauthorized access to or use of any Service, Supporting Document, Security Device or Security Procedures. Without limiting the foregoing and to the extent any of the Services utilize an electronic interface, Client agrees to use and maintain at all times up-to-date antivirus software, properly configured firewalls and otherwise to use commercial “best practices” to prevent Client’s computers or other electronic interfaces from being compromised, including by virus, trojan horse or other malware. Client expressly acknowledges that any wireless access to the Services initiated by Client may not be secure and, in such cases, Client assumes the risk associated with unauthorized access to the Services and any information contained therein, resulting from such wireless connectivity.
(d) Client agrees to immediately notify Bank if Client knows or suspects that a Security Device or other information pertaining to the Security Procedures is stolen, compromised, or misused. Client acknowledges that Bank’s ability to reverse fraudulent electronic transfers is extremely limited, and in many cases impossible. Client acknowledges that Bank is not an insurer of Client against losses associated with unauthorized activity associated with the Services and that Client has an independent responsibility to ensure the integrity and security of Client’s systems and to determine whether Client should obtain appropriate insurance coverage to protect against unrecoverable losses. (e) Client assumes all risks associated with disclosure of any part of the Security Procedures, including a Security Device, to its employees. Client agrees to limit disclosures of Security Devices to those employees or agents it will authorize to access the Services on Client’s behalf, or who have a specific 166
TM-0025 Master Treasury Agreement
(07/12/22) Page 3 of 42
need to know. Client agrees to follow all requirements and guidance that may be outlined in the Service Descriptions or Supporting Documents provided or made available to Client, including but not limited to password change policies and practices. Without limiting the foregoing, Client further agrees to require authorized persons to create new passwords at reasonably frequent periods, based on Client’s assessment of the security requirements appropriate for the Services utilized by Client, or as otherwise directed by Bank. Client agrees to promptly change security codes and level of authority, as applicable, in the event of any change in personnel or when reasonably prudent to do so. (f) If applicable, Client may be required to select in the Acceptance, or Supporting Documents, a means of communicating with Bank in connection with a particular Service (each, a “Communication Link”).
Multiple Communication Links may be selected for certain Services, as more specifically described in the Service Description and/or Supporting Documents. Information and instructions may be sent and received by Client through those Communication Links.
(g) Bank may act on a Communication by reference to the account number only, even if the name on the account is also provided and even if the account number does not actually correspond to the name. (h) Bank is not obliged to act on a Communication that is not transmitted in accordance with the Security Procedures. Bank may act on an incomplete Communication at its sole discretion, including but not limited to if in Bank’s reasonable opinion, it contains sufficient information. Bank has no duty to discover, and shall not be liable for, errors or omissions made by Client or the duplication of any Communication by Client.
(i) Bank may delay or refuse to execute any Communication or process any requested Service. Bank may do so for any reason or for no reason. Bank may provide notice to Client of such delay or refusal, but is not obligated to do so. Bank may delay or refuse processing of a Communication, for example, if: (i) processing would or may exceed the available funds in Client’s affected account; (ii) the Communication is not authenticated to Bank’s satisfaction or Bank believes the Communication may not have been authorized by Client; (iii) the Communication contains incorrect, inconsistent, ambiguous, or missing information; (iv) processing would or may involve funds which are subject to lien, security interest, claim, hold, dispute, or legal process prohibiting withdrawal; (v) processing would or may cause a violation of any laws or rules applicable to Client or to Bank; (vi) for any reason determined by Bank in its sole discretion; or (vii) for any other reason under this Master Agreement.
In addition, Bank shall be excused from failing to transmit or delay a transmittal of a transaction or Communication if such transmittal would result in Bank’s having exceeded any limitation upon Bank’s intra-day net funds position established pursuant to present or future Federal Reserve Board (“FRB”) guidelines or in Bank’s reasonable judgment otherwise violating any provision of any present or future risk control program of the FRB or any rule or regulation of any other U.S. governmental regulatory authority. Client agrees that Bank will have no liability to Client or to any other person for any loss, damage or other harm caused by or arising out of any such delay or refusal. (j) If Client informs Bank that it wishes to recall, cancel or amend a Communication after it has been received by Bank, Bank may, but will not be required to, use its reasonable efforts to assist Client to do so; however, Bank shall not be liable for any loss, cost or expense suffered by Client if Bank does not, or is unable to, amend, cancel or recall a Communication. Client hereby agrees to indemnify Bank against any loss, liability, claim or expenses (including legal fees and allocated costs of Bank’s in-house counsel) it may incur in connection with assisting Client to recall, cancel or amend a Communication, and Client agrees to immediately reimburse Bank for any monies paid by Bank associated with such losses, liability, claims or expenses incurred by Bank. (k) Client assumes the sole responsibility for providing Bank with accurate Communications in the form and format that Bank requires. Bank is not responsible for confirming Communications or for failing to detect and reject duplicate Communications. If Client provides Bank with a Communication that is 167
TM-0025 Master Treasury Agreement
(07/12/22) Page 4 of 42
incorrect in any way, Client agrees that Bank may charge Client’s accounts for any transactions related to the Communication whether or not the error could have been detected by Bank. Bank is not obligated to detect errors in Client’s transfer or payment instructions or other Communications. (l) Any person identified by Client in the Acceptance, Supporting Documents or any subsequent written notice delivered to Bank as authorized by Client to receive from Bank information, communications and notices regarding the Services, and authorized by Client to submit to Bank any Communications, or otherwise transact business via the Services is Client’s “Authorized Representative.” Additionally, the person referenced to or identified by Client in the Acceptance, Supporting Documents, resolutions, or any subsequent written notice delivered to Bank, as authorized by Client to make all agreements and sign and deliver all documents in connection with the Services is Client’s “Executing Representative.” If the identity of such an Authorized Representative or Executing Representative changes, Client will promptly notify Bank in writing. Bank will have a reasonable time after receipt of a notice or other communication to act on such written notice.
(m) Bank’s internal compliance, fraud control and other Bank procedures are for the benefit of Bank and create no duty to Client. Bank has no duty or obligation under this Master Agreement to inform Client if Bank is suspicious of activity, including possible breach of security by Client’s Authorized Representative(s) or Executing Representative(s) or unauthorized disclosure or use of Security Devices.
3. SOFTWARE AND EQUIPMENT. The service description and/or supporting documents for each service shall describe the various means by which client may communicate with bank in connection with such service.
Those means may include, without limitation, the use of computer software (“software”) licensed or sublicensed by bank to client (“license”) or the use of an internet connection. To the extent any of the services involve bank having granted client software license usage rights, such grant shall be a nonexclusive, non-transferable right to access and use the service in connection with client’s own business operations in accordance with the supporting documents. Client agrees to comply with the terms of any software license(s) provided to client in connection with the services. Client may not transfer, distribute copy, reverse engineer, decompile, modify or alter such software. Unless otherwise agreed by bank in writing, the computer programs, service guides, security procedures, equipment, software, and systems provided by bank to client in connection with the services represent bank’s proprietary property, including intellectual property, and must be returned to bank upon termination of services under this master agreement, or upon request. Client acknowledges and agrees that the software and content used by bank in the operation and provision of the services, and the copyright patent, trademark, trade secret and all other rights in and to the technology, software, content, designs, graphics, and trademarks included as part of the services and bank’s name and product names and the website’s url (collectively, by the “intellectual property”), are owned by bank and bank’s licensors. As such, client will not gain any ownership or other right, title or interest in or to such intellectual property by reason of the agreement or otherwise.
Unless otherwise provided in the master agreement, client is responsible for providing and maintaining any equipment that is necessary for the services, such as telephones, terminals, modems, computers, and software (collectively “equipment”). Client agrees to use equipment that is compatible with bank’s programs, systems, and equipment, which bank may change from time to time. Bank assumes no responsibility for the defects or incompatibility of any equipment that client uses in connection with the services, even if bank has previously approved their use. Bank makes no warranty, express or implied, in law or in fact, including but not limited to any implied warranty of fitness for a particular purpose or of merchantability, with respect to the services, or any computer programs, equipment or software made available by bank to client or otherwise used by client. Client agrees to notify bank promptly if any software or equipment bank provides to client becomes inoperative . Bank’s sole responsibility (if any) in such instances will be to use its best efforts to repair or replace the inoperative software or equipment that bank provided to client.
168
TM-0025 Master Treasury Agreement
(07/12/22) Page 5 of 42
4. CLIENT CONDUCT. Client agrees not to use the services or the content or information in any way that would: (i) infringe any copyright, patent, trademark, trade secret or other proprietary rights or rights of publicity or privacy; (ii) be fraudulent including, but not limited to, use of the service to impersonate another person or entity; (iii) violate any law, statute, ordinance or regulation (including, but not limited to, those governing export control, consumer protection, unfair competition, anti-discrimination, false advertising or illegal internet gambling); (iv) be false, misleading or inaccurate; (v) create liability for bank or its affiliates or service providers, or cause bank to lose (in whole or in part) the services of any of its service providers; (vi) be defamatory, trade libelous, unlawfully threatening or unlawfully harassing; (vii) illegal, offensive or objectionable; (viii) interfere with or disrupt computer networks connected to the service; or (ix) use the service in such a manner as to gain unauthorized entry or access to the computer systems of others. Without limiting the generality of the foregoing, client agrees not to: (a) make the service available, or allow use of the service, in a computer bureau service business, or on a timesharing basis; or (b) otherwise disclose or allow use of the service by or for the benefit of any third party.
5. CLIENT REPRESENTATIONS. Client represents and warrants to bank that:
(a) It is duly organized and validly existing, and is in good standing in every jurisdiction where required; (b) Client's execution, delivery, and performance of this Master Agreement and the transactions contemplated herein have been duly authorized by all necessary action and do not: (A) violate any provision of any applicable law, rule or regulation (including but not limited to any licensing requirement(s) or of Client's charter or bylaws or other governing documents, as applicable), or (B) result in the breach of, constitute a default under, or require any consent under any agreement or instrument to which Client is a party or by which Client is bound; (c) The Executing Representatives executing and delivering this Master Agreement and the Acceptance for and on behalf of Client, are duly authorized to do so;
(d) Any Communication or authorization required in connection with this Master Agreement and each Service Description has been provided by an Authorized Representative. Bank may rely upon the authority of each Authorized Representative for purposes of this Master Agreement and Service Descriptions until Bank has received written notice acceptable to Bank of any change of personnel designated by Client as an Authorized Representative, and Bank has had a reasonable time to act thereon (after which time Bank shall rely upon the change); (e) Any act required by any relevant governmental or other authority in connection with this Master Agreement has been or will be done (and will be renewed if necessary); (f) Client’s performance under this Master Agreement and use of the Services will not violate any applicable law, regulation or other requirement;
(g) This Master Agreement is a legal, valid, and binding obligation of Client; (h) Client is not, and agrees not to take any action that would result in Client being deemed or treated as, a money services business under any applicable state or federal law, except to the extent that Client has specifically and in writing previously informed Bank that Client is a money services business and Bank’s express prior written consent to provide Services to Client; (i) Unless otherwise agreed to in writing by Bank, the accounts established by Client with Bank and the Services utilized by Client in connection with the accounts will only be used for business purposes and not for personal, family or household purposes; and
(j) Client agrees that it shall be deemed to make and renew each representation and warranty made in this Section on and as of each day on which it uses the Services. Client will inform Bank in writing 169
TM-0025 Master Treasury Agreement
(07/12/22) Page 6 of 42
immediately upon Client’s becoming aware of facts or circumstances that cause (or with the passage of time would result in) any representation or warranty given by Client to cease to be true and correct.
Client will provide such information or documentation as Bank may request from time to time to demonstrate compliance by Client with Client’s representations and warranties, or other obligations of Client under this Master Agreement.
6. SERVICE LIMITATIONS. Client acknowledges that the services may be subject to system and other limitations, including bank-imposed limitations, which may include dollar, frequency, activity and other limits. Bank reserves the right, in its sole discretion, with or without prior notice, to alter any limitations established for Client. Client agrees not to exceed or otherwise violate any service limitations, including dollar, frequency, activity or other limits.
7. COMPLIANCE. Client agrees to comply with all state and federal laws, rules, and regulations, as may be amended from time to time, applicable to Client and to its use of the Services (collectively, “Laws”), including the operating rules of all systems and networks, as may be amended from time to time, used to provide Services to Client (collectively, “Rules”), and to promptly provide evidence reasonably satisfactory to Bank of the same if requested by Bank. Without limitation, Client agrees and acknowledges that the Services may not be used by Client in violation of, and must comply with, the Laws and Rules, including sanctions laws administered by the Office of Foreign Asset Controls. Client agrees that the Services will not be used to facilitate any illegal activity, including but not limited to illegal Internet gambling. Client acknowledges and agrees that the Software used to access the Services may be subject to restrictions and controls imposed by the Export Administration Act and the Export Administration Regulations, as may be amended from time to time (collectively, “Acts”).
Nothing in this Master Agreement is intended to, nor shall it be interpreted to relieve Client of any obligation Client may have under the Laws, Rules or Acts. If this Master Agreement is in conflict with the Laws, Rules or Acts, as may be amended from time to time, then this Master Agreement is deemed modified only to the extent necessary to allow or require Client to comply with the Laws, Rules, and Acts.
Client will implement and maintain procedures, including retention of legal counsel or compliance services, to ensure that Client is able to comply with all current Laws, Rules, and Acts, including any future changes to them. Bank is not obligated to provide information, updates or notice of or regarding the Laws, Rules, or Acts even if Bank is aware of the same and of the potential for material impact on Client and Client’s use of the Services, and Client’s indemnification and other obligations to Bank are not relieved or reduced by Bank’s not providing the same to Client. If Bank does provide information, updates or notices of or regarding the Laws, Rules or Acts to Client, Bank is not responsible for the accuracy, timeliness or currency of the same and may discontinue doing so at any time and without notice.
8. DELAYED PROCESSING. In addition to any allowances provided to Bank in any other agreement Bank has with Client, Client agrees that Bank may delay posting of an inbound credit to Client’s account(s) held at Bank, or delay the processing of an outbound transaction from Client’s account(s) held at Bank, when the delay is due to a suspicion that the transaction may be in violation of applicable Law, Rule or Act, or the transaction is otherwise under review by Bank. Notice of such delayed processing shall be provided when required by applicable law.
9. ACCOUNT DESIGNATIONS. For certain Services, Client may be required to designate one or more accounts to facilitate the particular Service.
10. SUFFICIENT FUNDS. Client agrees to maintain sufficient available funds (as determined under Bank’s funds availability policy) in Client’s accounts accessible via the Services to cover all transactions requested through the Service and applicable fees, or such higher amounts as Bank may specify from time to time.
Client acknowledges that Bank does not control intermediary banks or other third parties, including intermediary banks chosen by Bank, and that Bank does not control whether intermediary banks deduct fees as part of the processing of transfer requests. Client agrees that Client’s funds may be held by Bank 170
TM-0025 Master Treasury Agreement
(07/12/22) Page 7 of 42
for a period of time during the term of a Service Description and following termination of the Services, to protect Bank against any possible losses relating to the use by Client of the Services, including such reasonable time after closure of Client’s account(s), if Bank deems such hold is necessary to prevent a loss.
If Bank does hold funds, Bank may treat the held funds as not available for other purposes, and reject other transactions (for example, checks or other transfer instructions) in accordance with the applicable deposit account terms and conditions. If Client does not have sufficient or available funds or credit in Client’s account for which a particular transaction was requested, Bank may charge any account of Client’s held at Bank to cover the cost of the transaction, as well as any corresponding fees. Client’s obligation to pay Bank remains immediately due and payable whether or not the rejected, returned or adjustment entry was processed in accordance with any requirement of any laws or rules applicable to any party other than Bank and notwithstanding that Bank or Client may have a claim against another third party for breach of the applicable laws or rules. Nothing in the Master Agreement shall be construed as Bank’s commitment or obligation to lend Client money.
11. FEES AND AMOUNTS DUE. Client agrees to pay Bank the fees prescribed by Bank, including those provided in Bank’s current fee schedule for each of the Services, a copy of which is available upon request (each a “Service Fees Schedule”), as well as all amounts otherwise due under the Agreement. Unless other arrangements are made for payment of such fees and other amounts due, Client agrees that Bank may without prior notice or demand automatically debit any account maintained by Client with Bank in the amount of such fees and other amounts due. Bank does not in any way extend credit to Client under this Master Agreement. Bank may amend the Service pricing from time to time and Client’s continued use of the Service(s) shall be deemed acceptance of such change(s). Certain prices are subject to change without prior notice. Special or additional Services performed at Client’s request will be subject to additional terms and fees. If accounts are analyzed, Client may be able to use available earnings credit to offset certain charges related to the Services. If analyzed accounts contain funds belonging to third parties, Client represents that use of any related earnings credit is not limited by law, regulation or agreement with such third parties. In addition to the fees and other amounts due for the Services, Client agrees to pay for all taxes, tariffs, and assessments levied or imposed by any government agency in connection with the Services, the Master Agreement, and any Software or equipment made available to Client (excluding any income tax payable by Bank). Client is also responsible for the costs of any communication lines and any data processing charges payable to third parties. If Client is required by the laws of any relevant jurisdiction to make any deduction or withholding from any fees, interest or other amounts, on account of tax or other charges, Client shall withhold the same and pay it to the relevant authority, and shall pay Bank such additional amount as may be necessary to ensure Bank receives an amount equal to the amount it would have received had no such deduction been made. Interest will accrue on any amount due to Bank from the date the amount becomes due until paid at the annual rate of 2.000% over an Index Rate as it may change from time to time which is the Bank Prime Rate. The Bank Prime Rate is not necessarily the lowest rate charged by Bank on its loans. Bank may designate a substitute index after a notice to Client.
The interest rate change will not occur more often than each day. NOTICE: Under no circumstances will the interest rate on this Master Agreement be less than 7.00%. The annual interest rate for this Master Agreement is computed on a 365/360 basis; that is, by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding.
12. FINES OR PENALTIES. Client will reimburse Bank for any fines or penalties (and any associated costs, including reasonable attorneys’ fees, allocated costs of in-house counsel, and expenses) imposed on or assessed against Bank by any Federal Reserve Bank, any network operator, any state or federal regulatory agency or other US or foreign governmental body, or any clearinghouse or other third party having oversight or rulemaking authority over transactions facilitated using the Services, when the fine, penalty or other expense is caused by or related to Client’s data or use of the Services. Such amounts are immediately due and payable by Client without demand. Client’s obligation to pay Bank remains immediately due and payable whether or not the fine or penalty was imposed or assessed in accordance 171
TM-0025 Master Treasury Agreement
(07/12/22) Page 8 of 42
with any requirements of the Rules or Laws or any laws applicable to any party other than Bank and notwithstanding Bank or Client may have a claim against another for breach of the same.
13. NOTICES. Except as otherwise provided in this Master Agreement, all notices and other communications by Client to Bank shall be in writing and, addressed to:
Tri Counties Bank
63 Constitution Drive
Chico, CA 95973
or at such other address as Bank may specify in writing. Notices and communications to Client may be mailed or sent to Client electronically at the statement, email or mailing address shown for Client in Bank’s records. Any notice or communication sent by Bank to Client, whether electronic or written, will be deemed given and effective when sent or otherwise made available to Client, or as otherwise stated in the notice or communication. Client further acknowledges and agrees that certain notices and communications may be provided to Client by telephone, facsimile or electronic transmission at the telephone number, facsimile number or other location or number as shown in Bank’s records.
Client agrees to promptly notify Bank (in a form acceptable to Bank) whenever Client’s email address, physical address, mobile phone number or other contact information changes.
Any notice, instruction, Communication or other communication sent by Client to Bank will be effective when Bank has actually received and has had a reasonable time to act on the notice, instruction, Communication or other communication. Notwithstanding anything to the contrary herein, Bank may rely on all notices, instructions, Communications, and other communications sent to Bank via facsimile or electronic transmission as though they are originals. Without limiting the foregoing, Bank is entitled to rely on any notice, instruction, Communication or other communication believed by Bank in good faith to be genuine or to have been signed or authorized by an Authorized Representative of Client.
Client agrees to access the Services from time to time, in no event less than monthly, to access notices, communications, and information made available by Bank.
14. CONTENT.
(a) Bank reserves the right, but shall have no obligation, to reject, move, or delete content that Bank, in Bank’s sole discretion, believes violates this Master Agreement, or contains content, including viruses, that may interfere with the operation of Bank’s website or other systems. Bank shall have the right, but not the obligation, to disclose content to any third party if required by law or if Bank believes reasonably necessary, including but not limited to: (i) comply with legal process; (ii) enforce this Master Agreement; (iii) respond to claims that any content violates rights of third parties; or (iv) protect Bank’s rights, properly, or personal safety, or those third parties. (b) The Services may allow Client to access content originally provided or operated by third parties acting on Client’s behalf (collectively referred to as “third party content,” unless otherwise provided herein).
Unless Bank tells Client otherwise in writing, Bank does not operate or monitor any such content including any of the information, products or services provided or operated by third parties. Client acknowledges and agrees that: (i) Client accesses and relies on such third party content at Client’s own risk; (ii) Bank makes no endorsement of, and assumes no responsibility for, third party content uploaded or inputted to the Services by third parties; (iii) although Bank may have a contractual or other relationship with the providers of third party content, Bank will not be responsible for the content, accuracy, integrity, availability, timeliness or operation of their website or the data they make available. Client agrees to hold Bank harmless in connection with all of the foregoing. 172
TM-0025 Master Treasury Agreement
(07/12/22) Page 9 of 42
Without limiting the foregoing, Bank assumes no responsibility for determining the accuracy, reliability, timeliness, ownership, legality, appropriateness or completeness of any third party content that Client or others upload to the Services or otherwise provide to Bank, nor for any mistakes, defamation, slander, libel, omissions, falsehoods, obscenity, pornography or profanity associated with the same. Bank will not have a duty to interpret or evaluate any third party content transmitted to Bank or through Bank’s website or the Services, except to the limited extent, if any, set forth in this Master Agreement. Bank will not be required (by means of any security procedure or otherwise) to detect errors or illegality in the transmission or content of any third party content Bank receives from Client or third parties. Bank will not have a duty to notify Client about any inaccuracy, unreliability, ownership, incompleteness or other problem that may be associated with third party content, even if Bank has reason to know of its existence.
15. LIMITATION ON LIABILITY; INDEMNIFICATION. Bank’s duties and responsibilities shall be limited to those set forth in this Master Agreement. In no event shall Bank be liable for: (i) any punitive, indirect, consequential or special damages or lost profits, even if Bank has been advised of the possibility of such damages; (ii) the acts or omissions of a contractor, vendor, processor, third-party servicer or vendor used by Client or Bank, or any loss, cost, damage or expense incurred by any person or entity in connection therewith; (iii) Client negligence or breach of any agreement with Bank; (iv) any loss, including but not limited to debits from Client account(s), cost, expense, or damage to Client in connection with any Communication Link, Software, or any technical computer service, including Software installation or deinstallation performed by Bank or Client or any third party designated by Bank or Client, or Client’s or Bank’s use thereof; (v) any ambiguity, inaccuracy or omission in any instruction or information provided to Bank; (vi) the application of any government or funds-transfer system rule, guideline, policy or regulation; (vii) the lack of available funds in Client’s account to complete a transaction; (viii) Bank’s inability to confirm to its satisfaction the authority of any person to act on Client’s behalf; (ix) Client’s failure to follow any applicable software manufacturer’s recommendations or Bank’s Service instructions; or (x) any Internet sites related to the Services or maintained or operated by Bank or the use thereof or the inability to use such sites by any party, or in connection with any failure or performance, error, omission, interruption, defect, delaying in operation or transmission, computer virus or line or system failure, even if Bank, or representatives thereof, are advised of the possibility of such damages, losses or expenses. There may be other exceptions to Bank’s liability, as stated in Client’s account or other service agreements with Bank. Without limiting the foregoing, Bank will not be responsible for determining the compatibility of any installed Software with other system components or for any failure of any technical servicing or Software installation to provide access to the particular Service which the technical servicing or Software installation was intended to make available.
Bank’s liability and Client’s sole remedy for any cause not otherwise excluded herein and regardless of what form of action will be limited to actual direct damages sustained by Client, but in any event only to the extent that such damages resulted from Bank’s gross negligence or willful misconduct, will not exceed the lesser of: (i) the total of monthly charges for the Services in question for the twelve months immediately preceding the cost or loss; or (ii) actual damages. Any claim, action or proceeding by Client to enforce the terms of this Master Agreement or to recover for any Service-related loss must be commenced within one year from the date that the event giving rise to the claim, action or proceeding first occurs (or such shorter period as may be provided by the deposit agreement and disclosures provided in connection with the account(s)). Client agrees to cooperate with Bank in any loss recovery efforts Bank undertakes to reduce any loss or liability that arises in connection with the Services.
Client acknowledges that Service fees have been established in contemplation of: (A) these limitations on Bank’s liability, (B) Client’s agreement to review statements, confirmations, and notices promptly and to notify Bank immediately of any discrepancies or problems; and (C) Client’s agreement to assist Bank in any loss recovery effort.
Subject to the foregoing limitations, Bank’s liability for loss of interest, if any, resulting from Bank’s error or delay shall be calculated by using a rate equal to the average Federal Funds rate at the Federal 173
TM-0025 Master Treasury Agreement
(07/12/22) Page 10 of 42
Reserve Bank of New York for the period involved. At Bank’s option, payment of such interest resulting from or arising out of any claim of any person that Bank is responsible for any of Client’s or any third party’s acts or omissions, may be made by crediting any of Client’s accounts.
Client agrees to indemnify and hold Bank, its affiliates, licensors, processors, third-party contractors and vendors, and their respective directors, officers, shareholders, employees and agents, harmless from and against any and all claims, loss or damage of any nature whatsoever (including but not limited to attorneys’ fees and court costs) arising directly or indirectly out of: (i) the wrongful acts or omissions of Client, or any person acting on Client’s behalf in connection with Client’s use of the Services, including without limitation (A) the breach by Client of any provision, representation or warranty of the Master Agreement, (B) the negligence or willful misconduct (whether by act or omission) of Client or its clients or any third party on behalf of Client, (C) any misuse of the Services by Client, or any third party within the control, or on behalf, of Client, (D) the failure by Client to comply with applicable state and federal laws and regulations, or (E) any fine, penalty or sanction imposed on Bank by any clearing house, or any governmental entity, arising out of or connected with the Services; (ii) any act or omission of Bank that is in accordance with the Master Agreement or instructions from Client; (iii) actions by third parties, such as the introduction of a virus that delays, alters or corrupts the transmission of an image or communication to Bank; (iv) any loss or corruption of data in transit from Client to Bank; (v) any claim by any third party claiming that such third party incurred a loss due to the Service; or (vi) any claims, losses or damages resulting from Client’s breach of, or failure to perform in accordance with, the terms of this Master Agreement. This indemnity will survive the termination of this Master Agreement. Client agrees that it will not assert any claims against Bank based on theories of negligence, gross negligence, strict liability, misrepresentation, or fraud based on or relating to any Communication Link, Software or Client’s possession or use thereof or any technical computer service including, but not limited to, Software installation or de-installation performed by Bank.
16. EXCLUSION OF WARRANTIES. Client acknowledges that the services are provided on an “as is” and “as available” basis. Bank is not responsible for any errors or omissions in or to any information resulting from client’s use of the services. Bank makes no, and expressly disclaims all, warranties (express or implied) regarding client’s use of the services and the equipment, including the warranty of title and the implied warranties of merchantability, fitness for a particular purpose and non-infringement. Without limiting the generality of the foregoing, bank disclaims any warranties regarding any software, any communication link, the operation, performance or functionality of the services and the equipment, including any warranty that the services and the equipment will operate without interruption or be error free. Client acknowledges that there are security, transmission error, and access availability risks associated with using the services and assumes all risks relating to the foregoing.
17. FORCE MAJEURE. Notwithstanding any other provisions of this Master Agreement, Bank shall not have any responsibility or liability for any failure, error, malfunction or any delay in carrying out any of its obligations under this Master Agreement if such failure, error, malfunction or delay results from events due to any cause beyond its reasonable control, including, without limitation, unavailability of any communications system, sabotage, fire, flood, explosion, acts of God, civil commotion, strikes, stoppages of labor or industrial action of any kind, riots, insurrection, war or acts of government, power or equipment failure (including that of any common carrier, transmission line or software), emergency conditions, adverse weather conditions or any other factor, medium, instrumentality, condition or cause not in Bank’s control. Bank will not be liable or responsible for the acts or omissions of any other financial institution or any third party or for any inaccuracy or omission in a notice or communication received by Bank from Client, another financial institution, or any other third party. In addition, Bank shall be excused from failing to transmit, or delaying the transmission of, any transaction, if such transmittal would result in Bank’s having exceeded any limitation upon its intra-day net funds position established pursuant to present or future FRB guidelines or in Bank’s otherwise violating any provision of any present or future risk control program of the FRB or any rule or regulation of any other U.S. governmental regulatory authority.
Bank shall not be liable for any failure to perform any of its obligations under this Master Agreement if 174
TM-0025 Master Treasury Agreement
(07/12/22) Page 11 of 42
such performance would result in it being in breach of any law, regulation, requirement or provision of any government, government agency, banking or taxation authority in accordance with which Bank is required to act, as shall be determined in Bank’s sole discretion.
18. CUT-OFF HOURS. A number of Bank’s Services are subject to processing cut-off times. Communications received after the cut-off times or on a non-business day will be deemed received as of the next business day. Alternatively, some Services may require Client to resubmit a Communication when it is received after the cut-off time or on a non-business day. Current cut-off times can be found at www.tcbk.com/business/cutoff-times.
19. RECONCILIATION. Client will inspect all information made available by Bank in connection with the Services. Client agrees to promptly, by telephone and in writing, notify Bank of any errors in such information or any discrepancies between its records and the information, statements or confirmations of transactions made available by Bank. To the extent not expressly prohibited by applicable law, if Client fails to promptly notify Bank of any such error or discrepancy, in any case no more than 30 days from the date on which such information is made available to Client, then Client agrees that Bank will not be liable for any losses resulting from Client’s failure to give such notice or any resulting loss of interest relating to any transactions. Without limiting the foregoing: (i) if Client fails to notify Bank of any such error or discrepancy within one year of the date on which such information is made available to Client (or such shorter period as may be provided by the deposit agreement and disclosures applicable to the account(s)), then Client shall be precluded from asserting such error or discrepancy against Bank; and (ii) Bank reserves the right to, in its sole discretion, adjust transaction records for good cause after the expiration of said one year period.
20. PROVISIONAL CREDIT. Client acknowledges that credit for a payment order is provisional until the receiving financial institution obtains final settlement. If final settlement does not occur, the originator of the payment order is not deemed to have made payment to the beneficiary, and the beneficiary's bank is entitled to a refund of the provisional credit. Client agrees that when Bank gives Client credit for an incoming payment order, including but not limited to, returned credited transactions or credit reversals, it is provisional until Bank receives final settlement for the payment order. Bank may delay availability of provisional funds at its discretion. If Bank does not receive final settlement, Client must return the funds previously credited to Client's account to Bank, and the person who sent the payment order will not be treated as having paid Client. Bank may refuse to permit the use of any amount credited for an incoming payment order, including but not limited to a debit entry or credit reversal if Bank believes in its sole discretion that there may not be sufficient funds in Client's account to cover chargeback or return of such transaction.
21. DISPUTE RESOLUTION.
(a) No Jury Trial. To the extent allowed by law, if a dispute arises between Client and Bank regarding this Master Agreement or any service contemplated hereunder, Client and Bank each waive any right they may have to request a jury trial.
(b) Judicial Reference. WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY, if the above waiver of the right to a trial by jury is not enforceable, the parties hereto agree that any and all disputes or controversies of any nature between them arising at any time shall be decided by a reference to a private judge, mutually selected by the parties (or, if they cannot agree, by the Presiding Judge of Butte County, California Superior Court) appointed in accordance with California Code of Civil Procedure Section 638 (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal courts), sitting without a jury, in Butte County , California; and the parties hereby submit to the jurisdiction of such court. The referenced proceedings shall be conducted pursuant to and in accordance with the provisions of California Code of Civil Procedures Section 638 through 645.1 175
TM-0025 Master Treasury Agreement
(07/12/22) Page 12 of 42
inclusive (or their successor statutes). The private judge shall have the power, among others, to grant provisional relief, including without limitation, entering temporary restraining orders, issuing preliminary and permanent injunctions and appointing receivers. All such proceedings shall be closed to the public and confidential and all records relating thereto shall be permanently sealed. If during the course of any dispute, a party desires to seek provisional relief, but a judge has not been appointed at that point pursuant to the judicial reference procedures, then such party may apply to the Butte County, California Superior Court for such relief. The proceeding before the private judge shall be conducted in the same manner as it would be before a court under the rules of evidence applicable to judicial proceeding. The parties shall be entitled to discovery, which shall be conducted in the same manner as it would be before a court under the rules of discovery applicable to judicial proceedings.
The private judge shall oversee discovery and may enforce all discovery rules and orders applicable to judicial proceeding in the same manner as a trial court judge. The parties agree that the selected or appointed private judge shall have the power to decide all issues in the action or proceeding, whether of fact or of law, and shall report a statement of decision thereon pursuant to the California Code of Civil Procedure Section 644(a). The decision of the private judge shall then be appealable as if made by the court. The private judge shall also determine all issues relating to the applicability, interpretation, and enforceability of this paragraph. If Client and Bank do not agree on how the payment of the private judge’s fees and expenses will be shared, the court may apportion such fees and expenses between Client and Bank in a fair and reasonable manner that is consistent with the Code of Civil Procedure Section 645.1. No provision of this section shall limit the right of any party to exercise self-help remedies, to foreclose against or sell any real or personal property collateral or to obtain provisional or ancillary remedies, such as injunctive relief or appointment of a receiver, from a court of competent jurisdiction before, after or during the pendency of any reference proceeding. The exercise of a remedy does not waive the right of either party to resort to reference pursuant to the Master Agreement.
22. CONFIDENTIAL INFORMATION. Unless otherwise provided in the service descriptions, all supporting documents and software provided pursuant to this master agreement constitute bank’s, its contractors or vendors, or bank’s agent’s confidential information (“confidential information”). Bank, its contractors or vendors, or bank’s agent (as applicable) will remain the sole owner of all such confidential information, and client will not acquire any interest in or rights to the confidential information as a result of client’s use of any service except as expressly set forth in the service description. Client will maintain the confidentiality of the confidential information, and will not permit its employees or agents to, disclose, copy, transfer, sublicense or otherwise make any of it available to any person or entity, other than client’s employees who have a need to use the confidential information in connection with the applicable service.
Client shall notify bank immediately if client knows or suspects that there has been any unauthorized disclosure, possession, use or knowledge (each, an “unauthorized use”) of any confidential information, and if client is responsible for the unauthorized use, it will, at its expense, promptly take all actions, including without limitation initiating court proceedings to recover possession or prevent further unauthorized use of the confidential information and obtain redress for any injury caused to bank as a result of such unauthorized use. In addition, client must not decompile, reverse engineer, disassemble, modify, or create derivative works of any computer program provided pursuant to the master agreement.
Client authorizes the transfer of any information relating to Client to and between the branches, subsidiaries, representative offices, affiliates, contractors, vendors and agents of Bank and third parties selected by any of them, wherever situated, for confidential use in connection with the provision of products or Services to Client (including for data processing purposes), and further acknowledges that any such branch, subsidiary, representative office, affiliate, contractor, vendor or agent or shall be entitled to transfer any such information as required by any law, court, regulator or legal process.
23. FINANCIAL INFORMATION; AUDIT AND INSPECTION. Bank may from time to time request information from client in order to evaluate a continuation of the services to be provided by bank hereunder and/or adjustment of any limits set by this master agreement. Client agrees to provide the requested financial 176
TM-0025 Master Treasury Agreement
(07/12/22) Page 13 of 42
information immediately upon request by bank, in the form required by bank. Failure to provide requested information may result in a suspension or termination of services. Client authorizes bank to investigate or reinvestigate at any time any information provided by client in connection with this master agreement or the services and to request reports from credit bureaus and reporting agencies for such purpose.
Bank reserves the right, with prior notice to client, to enter upon client’s premises from time to time during regular business hours to audit client’s operations and procedures for compliance with the terms of this master agreement and the rules.
In connection with any such audit, Client agrees to furnish Bank with any documentation or information as is reasonably necessary to establish Client’s compliance with the terms of this Master Agreement. If it is determined by Bank that additional procedures or controls need to be implemented by Client, Client agrees to implement such procedures or controls within a reasonable period of time to be agreed upon by the parties.
In connection with Bank’s entry on the premises of Client for the purpose of conducting an on-site audit or inspection, or in connection with providing support to Client, Bank shall not be liable or responsible to Client or any third party for any loss, bodily harm, property damage.
24. SECURITY INTEREST. Client grants bank a security interest in client’s accounts to secure the repayment of any obligation that client incurs under the master agreement. The security interest provided under this Master Agreement is in addition to any other security interest bank may have in client’s accounts or other assets or as may be provided in the deposit agreement and disclosures related to the account(s). This security interest will survive termination of this master agreement.
25. RESERVE ACCOUNT. Client agrees that it will, if requested by bank at any time, establish one or more reserve accounts to be maintained with bank in type (including time deposits) and amount satisfactory to bank, to serve as collateral for and to secure client’s obligations to bank under this master agreement.
Bank may restrict or prohibit client’s access to any reserve account(s) and the funds on deposit in them, and may hold such accounts following termination of the master agreement for a period of time sufficient to protect bank against loss. Bank may increase or decrease the required reserve account amount from time to time, upon notice to client and client agrees to provide immediately available funds to cover a reserve amount requested by bank. In addition, bank may transfer funds from another account of client’s, or use funds payable to client or owed by bank to client under this master agreement or due to a service, and credit such funds to a reserve account if a deficiency exists between the available funds in client’s reserve account(s) and the amounts specified by bank as the required reserve amount.
26. TERM AND TERMINATION. The term of this master agreement will commence upon full execution of this master agreement and will continue in full force and effect thereafter until terminated as follows:
(a) Client may terminate some or all of the Services under this Master Agreement, with or without cause, upon 30 days prior written notice to Bank; and
(b) Bank may terminate, suspend or restrict some or all of Client’s access to the Services under the Master Agreement, with or without cause, at any time immediately upon notice to Client.
Any termination will not affect any obligations arising prior to termination. Upon termination, Bank will terminate Client’s access to the Services, and Client will terminate its access to and use of the Services, except to the extent necessary to process transactions that were in process prior to the termination date. Within 30 days after termination of this Master Agreement, Client will, at its expense, promptly uninstall and remove all Software provided for the Services from its computers and return to Bank any Software, hardware and equipment provided by Bank for the Services, including the Supporting Documents, procedures, documentation and any materials relating to the Services in its 177
TM-0025 Master Treasury Agreement
(07/12/22) Page 14 of 42
possession or under its control, destroy all copies of the Supporting Documents and materials relating to the Supporting Documents that cannot be returned, and upon request from Bank certify in writing to Bank that all such copies have been returned or destroyed. Client will be responsible and liable to Bank for the replacement cost of all lost, stolen or damaged equipment that was provided by Bank to Client in connection with the Services. Upon termination of the Master Agreement, all Services and any Licenses shall automatically terminate.
27. CLIENT RECORDS; NOT BACKUP SERVICE. This master agreement and the services are not intended to relieve client of any obligation imposed by law or contract regarding the maintenance of records or from employing adequate audit, accounting, and review practices as are customarily followed by similar businesses. The services do not include, and bank does not act as, a backup, data recovery or disaster contingency service. Except as otherwise stated in this master agreement, client agrees to retain and provide to bank, upon request, all information necessary to remake or reconstruct any deposit, file, entry, transmission, transaction request or order until at least three years following receipt by bank of the deposit, file, entry, transmission, transaction request or other order affecting an account.
28. SERVICES NOT SUBSTITUTE FOR LEGAL, TAX, OR FINANCIAL ADVICE OR PLANNING. Client acknowledges that the services, bank, its employees and service providers are not providing legal, tax or financial advice or planning. The services are merely a tool for use to assist client’s independent decision-making and have not been designed in contemplation of client’s specific business needs or risk tolerances. Prior to making any financial decisions, communicating or taking any action with respect to information made available using the services, client represents that it will have obtained appropriate and independent legal and tax advice regarding the same.
29. BUSINESS DAYS. For the purpose of the Master Agreement, Bank’s business days are Monday through Friday, excluding Saturdays, Sundays, and bank holidays.
30. ASSIGNMENT. Bank may assign its rights and delegate its duties under this Master Agreement to an affiliate or to a third party. Client may not assign any right or delegate any obligation under the Master Agreement without Bank’s prior written consent.
31. RELATIONSHIP OF PARTIES. Nothing in this Master Agreement creates a joint venture, partnership, principal agent or mutual agency relationship between the parties. No party has any right or power under this Master Agreement to create any obligation, expressed or implied, on behalf of the other party.
32. THIRD PARTIES. Client acknowledges and agrees that Bank may arrange to provide Software, if required, and/or may arrange for the Services covered by this Master Agreement to be performed or provided by third parties, including its affiliates. Client further agrees that any such party is a third-party beneficiary of this Master Agreement and as such is entitled to rely on, and avail itself of, the provisions of this Master Agreement as if it was Bank, including, without limitation, the limitations on liability and the indemnities described in this Master Agreement. Bank’s ability to provide certain Services may be dependent upon Bank’s ability to obtain or provide access to third-party networks. In the event any third-party network is unavailable or Bank determines in its sole discretion, that Bank cannot continue providing any third-party network access, Bank may discontinue the related Service or may provide the Service through an alternate third-party network. In such situations, Bank will have no liability for the unavailability or delay of access.
Notwithstanding the limitations described above pertaining to third parties, if Client authorizes a third party to access the Services on Client’s behalf, Client will be solely responsible and liable for all actions and inactions of said third party. Client expressly assumes the risks associated with providing Service access rights to its agents or third-party vendors, including but not limited to the risk of unauthorized or erroneous transactions. Bank will not be responsible, nor have any liability whatsoever for any services Client receives from Client’s agents or third-party vendors. Bank reserves the right to require Client to 178
TM-0025 Master Treasury Agreement
(07/12/22) Page 15 of 42
agree to additional terms and conditions as a condition precedent to Client’s use of any agent or thirdparty vendor in connection with Client’s access to the Services.
33. CREDIT CRITERIA. Bank, in its sole discretion, may, and Client hereby authorizes Bank to, perform credit reviews of Client in accordance with Bank’s credit qualification criteria. Client shall, upon Bank’s request, provide Bank with any credit-related information and assistance as Bank may require to perform any such review. Client agrees to provide Bank with financial statements or other information regarding Client’s financial condition upon Bank’s request. Failure to provide the requested information may result in suspension or termination of the Services.
34. WAIVER. Bank’s failure or delay in exercising any right or remedy under this Master Agreement will not operate as a waiver of such right or remedy, and no single or partial exercise of any right or remedy under this Master Agreement will preclude any additional or further exercise of such right or remedy or the exercise of any other right. No waiver by either party of any breach of this Master Agreement will operate as a waiver of any prior, current or subsequent breach. No waiver, breach, right or remedy will be effective unless made in writing.
35. ELECTRONIC SIGNATURES, CONTRACTS AND RECORDS. When any payment order or other Service generates items or transactions to be charged to an account of Client, Client agrees that Bank may charge the affected account without requiring Client’s signature and without prior notice to Client. Any transactions resulting from Client’s instructions which Bank receives in Client’s name and under Client’s credentials shall be deemed to have been “a writing” and authenticated by Client “in writing” for purposes of any law in which a writing or written signature is needed or required. All records maintained by Bank of transactions under Client’s credentials shall be deemed to have been “signed” and will further constitute an “original” when printed from records established and maintained by Bank or Bank’s authorized agent in the normal course of business.
Client agrees that Bank may contract and communicate electronically with Client, including execution and retention of contracts, documents, and certifications. Client agrees not to contest the authorization for, or validity or enforceability of, Bank’s electronic records and documents, or the admissibility of copies thereof, under any applicable law relating to whether certain agreements, files or records are to be in writing or signed by the party to be bound thereby. Records and “signed” documents, if introduced as evidence on paper in any judicial or other proceedings, will be admissible to the same extent and under the same conditions as other documentary business records. Upon Bank’s written request, Client agrees to manually sign or place Client’s signature on any paper original of any record or “signed” document which Bank provides to Client containing Client’s purported signature.
36. MONITORING, RECORDING AND RETAINING. Client authorizes Bank (but Bank is not obligated) to monitor, record electronically and retain telephone conversations and electronic communications between Client (including its purported Authorized Representatives) and Bank. Accordingly, Client agrees on behalf of itself, its employees and agents that Bank may monitor and record Client’s telephone and electronic communications in connection with the Services at any time, without further notice. Bank and Client hereby agree that Bank may produce the telephonic or electronic recordings or computer records as evidence in any proceedings brought in connection with this Master Agreement, and Client hereby acknowledges the validity and legal admissibility of such telephonic or electronic recordings.
37. FINAL AGREEMENT; AMENDMENTS. This Master Agreement constitutes the final and complete agreement between Bank and Client with respect to the Services, and supersedes all other oral or written agreements, understandings, and representations pertaining to the subject matter hereto. Bank may amend, add, delete or change the terms of this Master Agreement, including but not limited to the terms of any Service Description, and the applicable fees. Bank may make such amendments, additions, changes or deletions, at any time and at Bank’s sole discretion. If Bank deems it reasonably practicable to do so and if the change adversely affects Client’s usage of the Service, Bank may notify Client of the change in advance. 179
TM-0025 Master Treasury Agreement
(07/12/22) Page 16 of 42
Otherwise, Bank will notify Client of the change as soon as reasonably practicable after it is implemented, which notice may be given electronically. After such amendment(s), Client’s continued use of the Services will evidence Client’s consent to any amendments, including additions, changes or deletions.
38. AVAILABILITY. Bank may cause a Service to be temporarily unavailable to Client, either with or without prior notice, for site maintenance, security or other reasons, and Client acknowledges that factors beyond Bank’s reasonable control, such as telecommunications failure or equipment failure, may also cause the Service to be unavailable to Client. In such event, Client must make (and have done so prior to such failure) alternative arrangements for scheduled and other anticipated transactions and Client will be responsible for maintaining procedures and facilities to enable Client to do so if any of the Services are unavailable to Client. Such arrangements include, for example, issuance of paper checks, manual collection of deposits and transportation of paper items to a Bank branch. Upon notice from Bank of a failure of any software, hardware or other equipment necessary for Bank to perform in accordance with a Service Description, Client will as soon as reasonably possible deliver to Bank all data in Client’s possession or under its control which Bank reasonably requests in order for Bank to continue to provide the Service.
39. HEADINGS. Headings are for reference only and are not part of this Master Agreement.
40. SUCCESSORS AND ASSIGNS. This Master Agreement is binding upon and shall inure to the benefit of Bank and Client and their respective successors and assigns. However, in all cases the applicability of this Master Agreement to any of Client’s successors and assigns must be approved in an advance writing by Bank.
41. INSURANCE. If requested by Bank, Client agrees to obtain and maintain fidelity and error and omission insurance coverage in an amount reasonably satisfactory to Bank, to cover (at a minimum) losses due to action or inaction by Client, its employees and agents, or any person given access to the Services by Client (including unauthorized access by the same), and to name Bank as an additional insured on such policy.
Client will provide evidence reasonably satisfactory to Bank of the existence of such insurance promptly upon request by Bank.
42. APPLICABLE LAW; SEVERABILITY. This Master Agreement shall be construed and interpreted in accordance with federal law and regulations, and to the extent such law and regulations do not apply, with the laws of the state of California, without regard to its conflict of law provisions. Even if a provision of this Master Agreement is held to be invalid, illegal or unenforceable, the validity, legality, or enforceability of the other provisions of this Master Agreement will not be affected or impaired by such holding.
180
TM-0025 Master Treasury Agreement (07/12/22) Member FDIC
ONLINE BANKING SERVICE DESCRIPTION
1. ONLINE BANKING SERVICE. Tri Counties Bank (“Bank”) hereby offers its Client and Client hereby accepts the online banking service (the "Online Banking Service"). The Online Banking Service is an Internet based service that enables Client to access its accounts and to facilitate certain electronic services online, as identified in and subject to this Service Description. Bank reserves the right, without prior written notice to Client, to place, from time to time, limits on Client's right to use the Online Banking Service.
Additional Online Banking Services may be added to or removed by the Bank from time to time. Bank may allow eligible loans and lines of credit to be linked, in which case, Client agrees that the relevant loan agreement, note or other document is modified to the extent necessary to allow the transfers or other Services that may be utilized. Bank may process transactions from loan Accounts without regard to access limitations in any loan documentation or agreements.
Some Online Banking Services may not be available without special application to and approval by Bank, may be limited to specific types of accounts, and may require Client to agree to additional terms and conditions.
2. MASTER TREASURY AGREEMENT; SEPARATE SERVICE DESCRIPTIONS. This Service Description forms part of the Master Treasury Agreement (“Master Agreement”) executed by Client. In the event of conflicts between the terms of this Service Description and the terms of the Master Agreement, the terms of this Service Description shall control.
To the extent Client is enrolled in any additional Services, Client’s use of the Services will also be subject to the terms and conditions of each applicable separate Service Description. Defined terms in this Service Description shall have the meaning provided in the Master Agreement, unless otherwise defined in this Service Description. An “account” shall mean any deposit or loan account Client maintains with Bank and can include all accounts and products Client uses with Bank. Client’s “Account” shall mean the account(s) accessible through the Services.
3. CUT-OFF TIMES. A Communication received by Bank after the cut-off time on a business day, or on a day that is not a business day, may be treated by us as if it were received on the next business day. At Bank’s option, however, Bank may treat it as received the same day as the day of receipt. There can be a delay between the time when Client sends a Communication to Bank and the time Bank receives it. All references to time in this Agreement shall refer to Pacific Time. Bank’s current cut-off times are available at https://www.tcbk.com/business/cutoff-times:
4. ACCOUNT DESIGNATION. Client may need to designate certain accounts for specific purposes in connection with some of the Online Banking Services. If Client links more than one checking account to certain transactional services, Client will need to specify the account from which transfers should be made. Bank is not obligated to establish access to any or all of Client’s accounts, and not all Online Banking Services are available with all accounts.
5. ADMINISTRATOR AND USER(S). As part of the Online Banking Service, Client will appoint an individual to act as an administrator (for the purpose of this Service Description, referred to herein as “Administrator”) with the authority to determine who will be authorized to use the Online Banking Services on Client’s behalf. The Administrator will be able to designate additional users (“Designated Users”) and remove existing Designated Users. The Administrator will also determine what Online Banking Services will be available to particular Designated Users, when to change passwords, and any limitations on the use of the Services by individual Designated Users.
Bank will not control or oversee the Administrator function. Client agrees to all action taken by the Administrator or any Designated User designated or authorized by the Administrator, and all such persons are Client’s agents for purposes of use of Online Banking Services, each authorized to act individually or in concert. The fact that Bank is, or may be made aware of, or could have discovered, any limitation on access to the Online Banking Service does not make Bank obligated to enforce or attempt to enforce any limitation. Client understands that the Administrator and each Designated User may utilize Online Banking Services (including inquiries, transfers and account verification) without regard to any restrictions otherwise applicable to an Account. For example, the Administrator and each Designated User will be able to utilize the Online Banking Services regardless of whether they are also authorized signers on the Client’s signature card.
181
TM-0025 Master Treasury Agreement
(07/12/22) Page 18 of 42
6. COMMUNICATIONS; SECURITY DEVICES. For the purpose of this Service Description, Communications shall have the meaning provided in the Master Agreement and shall include Communications to Bank in connection with the Online Banking Service. For the purpose of this Service Description, Security Devices shall have the meaning provided in the Master Agreement and shall include but not be limited to any Security Devices used to access Accounts and to use the Online Banking Services. Bank may offer to Client or require Client to use additional authentication tools or methods from time to time (for example, challenge questions and phrases for employees). If Client chooses not to implement supplemental authentication tools, Client’s access to some or all Online Banking Services may be limited. The term “Security Devices” will include any supplemental authentication tools that are made available by Bank and used by Client.
Client has the responsibility of ensuring that Client has the current security patches installed and configured, Client maintains up-to-date virus detection program(s), and that Client regularly scans for the existence of malware and spyware and takes appropriate action if found. Client expressly acknowledges that encryption of data transmissions does not guarantee privacy. Data transferred via the Service is encrypted in an effort to provide transmission security.
Notwithstanding Bank’s efforts to insure that the Services are secure, Client acknowledges that the Internet is inherently insecure. Bank cannot and does not warrant that all data transfers utilizing the Services will not be monitored or read by others.
Bank may require a higher level of review of your security procedures, at Bank’s option, and to which Client agrees to submit for continued permission to use the System. Without limiting the foregoing, Bank may require one or more of the following: (a) more frequent on-site visits to verify Client’s security procedures; (b) additional log in requirements implemented through different software or hardware; (c) technical review of the computer system(s) used to access the System to verify the integrity of Client’s hardware, software, anti-virus and firewall protection; (d) requirement to use specific anti-virus and firewall software that Bank specifies and periodic inspection to determine that such systems are up to date; and/or (e) obtaining insurance coverage for electronic fraud losses that are beyond Bank’s control.
7. COMPUTER EQUIPMENT AND SOFTWARE TO ACCESS THE ONLINE BANKING SERVICES. To use the Online Banking Services, Client must have a sufficiently powerful computer hardware and appropriate software as described in the Supporting Documents. Some Online Banking Services may require Client to download software from Bank’s website; in some cases, Bank may place software on Client’s computer as part of Bank’s security and/or user verification tools. Bank recommends Client utilize antivirus software whenever possible. Client is ultimately responsible for maintaining and updating computer equipment used to access the Online Banking Services, including maintaining up-todate security patches, updates, and other protective applications.
8. ACCESS TO ACCOUNT DATA. Subject to system limitations, Client can obtain balance and other Account information through the Online Banking Services. Since certain information and transactions may not be processed by Bank until after the close of Bank’s business day, some transactions may not be reflected in the online banking system (“System”) until the next banking day. Posted items may be reversed due to insufficient funds, stop payment orders, legal process, and other reasons. Certain balances also may not be subject to immediate withdrawal. Bank assumes no responsibility for any loss arising from incomplete information or for any temporary interruption in the System. If Client is unable to access the System for any reason, Client may contact Client’s branch of Account for account information.
9. ACCOUNT TRANSFER LIMITATIONS. All transfers to and from an Account will be subject to the terms and conditions applicable to the Account as set forth in the deposit agreement governing the Account, including but not limited to transfer limitations. For example, federal regulations limit certain types of transactions/transfers from a money market or savings account. If Client exceeds these limits, Bank may impose a fee, close or convert Client’s Account, limit Client’s use of the Online Banking Services, or any combination of the foregoing. In addition, there may be other transfer limits addressed in the Supporting Documents.
10. LOAN ACCOUNT ADVANCES AND PAYMENTS.
Loan Advances can be processed against available lines of credit on a Tri Counties Bank loan through the transfer function. Advances made against a Tri Counties Bank line of credit are subject to Client’s loan agreement with Bank. 182
TM-0025 Master Treasury Agreement
(07/12/22) Page 19 of 42
Electronically initiated loan advances are not permitted for construction loans or loans with other advance restrictions.
Frequency of advances and dollar limits of advances are limited by the terms set forth in Client’s loan agreement. There are no specific transaction fees for loan advances, however, interest and advance charges set forth in the applicable loan agreement will apply.
Loan Payments can be scheduled (regular) and unscheduled that move money out of one of Client’s linked checking or savings Accounts to make a payment on a linked loan Account. For each loan payment that Client creates, Client must include an effective date that tells Bank when to make the payment on the loan. This feature enables Client to submit loan payment(s) in advance of their regular due date(s). To avoid late charges, be sure that the loan payment date Client specifies is on or before its due date according to Client’s loan agreement. The System cannot determine Client’s loan payment due date.
11. BILL PAYMENT SERVICE.
Bill Pay Account Designation; Payment Details. When using the Bill Payment Service, Client must designate the Account (“Bill Pay Account”) from which the bill payments (“Bill Payments”) are to be made. For each Bill Payment, Client will also be required to provide the complete name of the payee, the account number and the payee’s remittance address (as exactly as shown on the billing statement or invoice), the amount of the payment and the date Client wants the payment to be processed by Bank (“Send on Date”). If the Send on Date is not a business day, then the Bill Payment will be processed by Bank the next business day. To have a Send on Date that is the same date Client accesses the System and initiates the Bill Payment instruction, the Bill Payment instruction must be received by Bank on a business day, prior to the Bill Payment Service cut-off hour.
Setting-Up Payees. When Client signs onto the Bill Payment Service, Client must establish Client’s list of payees. A payee is anyone, including Bank, that Client designates to receive a Bill Payment; provided that Bank accepts the payee for the Bill Payment Service. Bank reserves the right to reject any payee at any time, at its discretion. Bank is not responsible if a Bill Payment is not made to a payee because Client provided Bank with incomplete, incorrect or outdated information regarding the payee or Client attempted to make a payment to a payee that is not on Client’s authorized list of payees. Payments to payees outside of the United States or its territories are prohibited through the Bill Payment Service.
Available Funds. Prior to the applicable cut-off hour as of the Send on Date and thereafter until the Bill Payment has been applied against Client’s Bill Pay Account, Client will need to have sufficient available funds in Client’s Bill Pay Account to cover the amount of the Bill Payment.
Non-Recommended Payees. Bank does not recommend that Client use the Bill Payment Service to pay Client’s federal, state or local taxes, courts or other governmental entities. Bank will not be liable for penalties, interest or other damages of any kind if Client tries to use the Bill Payment Service to remit or pay money for taxes, or to courts or governmental agencies.
Scheduling Bill Payment. Client must designate a Send on Date so that it is scheduled sufficiently in advance of the due date of Client’s bill (“Due Date”) to allow the payee to receive it on the Due Date set by Client’s payee and without taking into account any grace period that may be offered by Client’s payee. Some companies Client pays through Bank’s Bill Payment Service will receive a paper draft on Client’s behalf, rather than receiving an electronic payment. These paper draft payments can take longer to process before the payee receives the payment. Bank is not responsible for any damages Client may suffer if Client does not allow sufficient time between the Send on Date and the Due Date of Client’s bill or obligation, without counting any grace period offered by the payee.
Payment Methods. Bank reserves the right to select the method in which to remit funds on Client’s behalf to Client’s payees. These payment methods may include, but may not be limited to, an electronic payment, an electronic check payment (where the check is drawn off Bank’s third party service provider’s account), or a demand draft payment (where a negotiable instrument is created and drawn off of Client’s Bill Pay Account). 183
TM-0025 Master Treasury Agreement
(07/12/22) Page 20 of 42
Payment Changes and Cancellations; Stop Payments. Client may change or cancel a payment that has been scheduled through the Bill Payment Service but has not begun processing (“Scheduled Payment”) as long as Client logs onto the Service prior to the Send on Date for the Bill Payment instruction and Client follows the Bill Payment instructions provided by the Bill Payment Service for changes and cancellations. Client’s ability to stop payment on a processed Bill Payment will depend on the payment method and, if by check, whether or not the check has cleared. The Bill Payment Service must have a reasonable opportunity to respond to any stop request. To stop payment on any Bill Payment that has already been processed, Client must call Bank. Fees and additional documentation may be required by Bank to process a stop payment request. Bank will have no liability to Client for Bank’s refusal or failure to stop a Bill Payment that has already been processed.
Accurate Information on Payees. If the Bill Payment Service provides Client with a series of options regarding payee address or location, Client is responsible for correcting that information if such information does not agree with Client’s records or with Client’s particular bill. Bank and the others that handle Client’s Bill Payment (including the payee’s bank) are entitled to rely on information Client supplies, such as the payee’s account number or the routing number of the payee’s bank, even if the name Client gives to Bank and the number Client gives to Bank identify different persons.
Automated Clearing House Entries. Electronic payments that are made through the Automated Clearing House (“ACH”) are subject to the rules of the ACH, and Client agrees to be bound by the Operating Rules of the ACH, including the rule making payment to the payee provisional until receipt by the payee’s bank of final settlement of the credit transaction.
If final settlement is not received, Client will not be deemed to have paid the payee the amount of the bill payment.
12. CHECK STOP PAYMENT SERVICE. Client may stop payment on a check by providing Bank with timely, complete and accurate information as required in the System, including the EXACT: number of the Account on which the check was drawn; the date of the check; the check number; the payee information and the amount of the check (dollars and cents). If any information is incomplete or incorrect, Bank will not be responsible for failing to stop payment on the item. Requests become effective when Bank has had a reasonable opportunity to confirm their receipt and have verified that the item has not been paid. Client may use the Online Banking Services to stop payment on checks that Client has written against Client’s Accounts. If Client wishes to cancel or amend any other Online Banking Service transaction (for example, Wire Transfer Requests), Client should use that Online Banking Service and Client will be subject to any limitations or inability to stop applicable to that Online Banking Service. If Client contacts Bank, Bank may at its sole discretion attempt to assist Client, but will not be liable for any failure to successfully stop payment on transactions. To confirm whether a stop payment has been placed on a check, Client agrees to communicate with Bank by telephone. System messages regarding Bank’s receipt of Client’s stop payment order, or other system communications may not be relied on by Client to confirm whether a stop payment order has been placed.
Client may not use this check stop payment service to stop payment on any electronic fund transfer (EFT) transaction, point-of-sale EFT transfer; any cashier’s check, certified check or other official institution check that have purchased from Bank or any check which Bank has guaranteed. Client understands that its stop payment request is conditional and subject to Bank’s verification that the check has not already been paid, or any Online Banking Service not already performed, or that stopping payment may subject Bank to risk of loss or damages under any law or regulation (including clearing house or other processor rules).
All Stop Payment orders, renewals and revocations of stop orders will be subject to Bank’s current policy on stop payment orders. From time-to-time, the System may be inoperable. If that occurs, Client’s request can be communicated to Bank by telephone. Telephone requests will expire unless confirmed in writing within 14 days. A check stop payment order is effective for six (6) months only and will expire automatically, at which time Client is responsible for any renewal desired by Client for another six (6) month term. There will be a fee assessed for each stop payment request processed.
13. ACCOUNT ALERTS. The account alerts (“Alerts”) feature is a convenience tool that permits Client to request automated notification in specific situations. Alerts do not replace standard communications Client receives from Bank concerning Client’s accounts. Receipt of Alerts may be delayed, or prevented by factor(s) affecting Client’s access, including Internet service provider(s), phone operator(s), and other relevant entities. Bank neither guarantees the 184
TM-0025 Master Treasury Agreement
(07/12/22) Page 21 of 42
delivery or the accuracy of the contents of any Alert. Bank will not be liable for losses or damages arising from: (i) nondelivery, delayed delivery, or wrong delivery of any Alert: (ii) inaccurate content in an Alert; or (iii) Client’s use or reliance on the contents of any Alert for any purposes. Bank reserves the right to terminate any request from Client for any Alert, at any time. The information in any Alert may be subject to certain time lags and/or delays. Client may stop or suspend Alerts at any time.
14. DOWNLOAD/EXPORT SERVICE. The Download/Export Service is compatible with certain financial management software programs (“Programs”). Bank will not control or oversee any administrator, user or similar function that may be made available through the Programs. The fact that Bank is, or may be made aware of, or could have discovered, any limitation on access to the Download/Export Service as imposed by Client through the Programs, or otherwise, does not make Bank obligated to enforce or attempt to enforce any limitation. Client understands that the Program(s) may be utilized without regard to any restrictions otherwise applicable to an Account. For example, the Program(s) may be utilized regardless of whether an individual user is also an authorized signer on Client’s Account signature card.
ACCESS TO ACCOUNT DATA. Client can download balance and other Account information through the Download/Export Services. Since certain information and transactions are not processed by Bank until after the close of Bank’s business day, some transactions may not be reflected in the System until the next banking day. Posted items may be reversed due to insufficient funds, stop payment orders, legal process, and other reasons. Certain balances also may not be subject to immediate withdrawal. Bank assumes no responsibility for any loss arising from incomplete information or for any temporary interruption in the System, or unauthorized access to information once it has been accessed by the Program(s). Client is responsible for making a backup of Client’s data before using any export function.
SOFTWARE, EQUIPMENT AND THIRD PARTY CONTENT. Client is responsible for obtaining and maintaining any compatible software and equipment that is necessary for the Download/Export Service to interface with the Program(s).
Through the Program(s) Client may be able to access content provided or operated by third parties, including content that was originally sourced from data downloaded from Bank’s Online Banking Service (“Third Party Content”). Unless Bank tells Client otherwise in writing, Bank does not operate or control any such Third Party Content or any of the information, products or services accessed or uploaded through the same. Client acknowledges and agrees that: (i) Client accesses Third Party Content at Client’s own risk; (ii) Bank makes no representation or warranty, and assumes no responsibility for, Third Party Content provided or operated by third parties, actions or omissions of third parties, operators or providers; (iii) Bank makes no endorsement of, and assumes no responsibility for, Third Party Content uploaded to Bank’s system or Client’s hardware, or goods or services offered on or advertising on or by any other party; (iv) by using third party services or software, Client may be exposed to material that is offensive, indecent or objectionable; and (v) although Bank may have a contractual or other relationship with the operators of a linked website or the providers of Third Party Content, Bank will not be responsible for the Third Party Content, accuracy, completeness, integrity, availability, timeliness or operation of their website or the Third Party Content provided. Client agrees to hold Bank harmless in connection with all of the foregoing.
15. EMAIL COMMUNICATIONS. While access to Bank through the secure email function of the Services is "online," messages sent to Bank through email are not reviewed by Bank personnel immediately. If immediate attention is required, Client must contact Bank by telephone or in person. The secure email function is not intended for use by Client to initiate a transaction on Client’s account(s), including check stop payment orders. If Client sends Bank an email message outside of the secure logon feature within the Services, Client’s communication will not be secure and Bank’s receipt and response to the email may be further delayed. Client agrees not to rely on any form of email communication for any matter requiring immediate attention.
Client’s secure email messages may be acted upon by Bank if received in a manner and in a time providing Bank a reasonable opportunity to act. Nevertheless, unless otherwise expressly provided herein, email messages will not serve as a substitute for any requirement imposed on Client to provide Bank with "written" notice.
16. INCONSISTENCIES. If a beneficiary of any requested Online Banking Service, including but not limited to Bill Payments, Wire Transfer Requests, ACH Transactions, payment orders or other money transactions, or any other Communication from Client (collectively, “payment order”), is identified by both name and account number, payment 185
TM-0025 Master Treasury Agreement
(07/12/22) Page 22 of 42
may be made by Bank and by any other financial institution based on the account number even if the name and the account number are not consistent or identify different parties. If an intermediary bank or a beneficiary’s bank is identified on a payment order by both name and account number, Bank and other financial institutions may rely on the account number even if the name and the account number are not consistent or identify different parties.
17. PROVISIONAL CREDIT. Client acknowledges that credit for a payment order is provisional until the receiving financial institution obtains final settlement. If final settlement does not occur, the originator of the payment order is not deemed to have made payment to the beneficiary, and the beneficiary's bank is entitled to a refund of the provisional credit. Client agrees that when Bank gives Client credit for an incoming payment order, including but not limited to, returned credited transactions or credit reversals, it is provisional until Bank receives final settlement for the payment order. Bank may delay availability of provisional funds at its discretion. If Bank does not receive final settlement, Client must return the funds previously credited to Client's account to Bank, and the person who sent the payment order will not be treated as having paid Client. Bank may refuse to permit the use of any amount credited for an incoming payment order, including but not limited to a debit entry or credit reversal if Bank believes in its sole discretion that there may not be sufficient funds in Client's account to cover chargeback or return of such transaction.
18. FEES. Client agrees to current fees for requested services. Refer to the Treasury Management Fee Schedule or Business Services Fee Schedule for the most current fees and charges related to Online Banking services. Bank reserves the right to change fees at any time without prior notice.
19. UPLOADED CONTENT; LINKED SITES AND ADVERTISEMENTS.
From Bank’s website, Client may be able to access uploaded content provided or operated by third parties. Unless Bank tells Client otherwise in writing, Bank does not operate or control any such content or any of the information, products or services on such linked websites. Client acknowledges and agrees that: (i) Client accesses such content and linked sites at Client’s own risk; (ii) Bank makes no representation or warranty, and assumes no responsibility for, content on Bank’s website and any linked site or the actions or omissions of its/their owners, operators or providers (iii) Bank makes no endorsement of, and assumes no responsibility for, content uploaded to Bank’s website or goods or services offered on or advertising on or by any other website; (iv) by using other websites and services, Client may be exposed to content that is offensive, indecent or objectionable; and (v) although Bank may have a contractual or other relationship with the operators of a linked website or the providers of content, Bank will not be responsible for the content, accuracy, integrity, availability, timeliness or operation of their website or content. Client agrees to hold Bank harmless in connection with all of the foregoing.
Bank reserves the right, but shall have no obligation, to reject, move, or delete content that Bank, in Bank’s sole discretion, believes violates this Service Description, or contains content, including viruses, that may interfere with the operation of Bank’s website. Bank may, but has no obligation to, monitor, and/or retain copies indefinitely of, uploaded content, message boards, chat rooms or other forums or review content, or messages posted at such locations, to confirm their compliance with these guidelines. Bank shall have the right, but not the obligation, to disclose content to any third party if required or permitted by law or if Bank believes reasonably necessary to: (a) comply with legal process; (b) enforce this Service Description; (c) respond to claims that any content violates rights of third parties; or (d) protect Bank’s rights, properly, or personal safety, or those third parties. 186
TM-0025 Master Treasury Agreement
(07/12/22) Page 23 of 42
WIRE TRANSFER SERVICE DESCRIPTION
1. WIRE TRANSFER SERVICE. Tri Counties Bank (“Bank”) hereby offers its Client and Client hereby accepts the funds transfer service described in this Service Description (the "Wire Transfer Service"). Client may submit funds transfer requests (“Requests”) to Bank in accordance with the terms and conditions of this Service Description. A “Request” includes a “payment order,” as defined in Division 11 of the California Commercial Code. All references to the term “Request(s)” in this Service Description will include Drawdown Request(s), as applicable. Client is responsible for all Requests to the fullest extent provided by law and as set forth in this Service Description. Bank may choose the funds transfer mechanism (for example, FedWire, correspondent bank transfer, internal transfer) to be used when acting upon Client’s REQUEST.
2. MASTER TREASURY AGREEMENT; SUPPORTING DOCUMENTS. This Service Description forms part of the Master Treasury Agreement (“Master Agreement”) agreed to by Client. In the event of conflicts between the terms of this Service Description and the terms of the Master Agreement, the terms of this Service Description shall control.
Defined terms in this Service Description shall have the meaning provided in the Master Agreement, unless otherwise defined in this Service Description.
3. TRANSMISSION; RELATED SERVICE DESCRIPTIONS FOR FUNDS TRANSFERS. Client will communicate Requests using the Bank’s Online Banking Services; all Requests must also be consistent with the separate Business Online Banking Service Description.
4. ACCOUNT DESIGNATION. Client authorizes Bank to debit its designated account, or any other account maintained by Client at Bank, for any fees or other amounts due Bank in connection with the Services.
5. ACCURACY. Client assumes the sole responsibility for providing Bank with accurate transaction information in the form and format that Bank requires. Bank is not responsible for confirming such information, or for failing to detect and reject duplicate Requests. If Client provides Bank with a Request that is incorrect in any way, Client agrees that Bank may charge Client’s accounts for the transaction whether or not the error could have been detected by Bank. Bank is not obligated to detect errors in Client’s transfer or payment instructions.
6. COMMUNICATIONS; SECURITY PROCEDURES. For the purpose of this Service Description, Communications shall have the meaning provided in the Master Agreement and shall include Requests to Bank in connection with the Wire Transfer Service. For the purpose of this Service Description, Security Procedures shall have the meaning provided in the Master Agreement and shall include but not be limited to any Security Procedures used to access accounts and to use the Wire Transfer Services. More specifically, Client has selected the Security Procedures applicable to the Wire Transfer Service as identified in the Acceptance, or the Supporting Documents, as applicable. Bank may offer to Client or require Client to use additional authentication tools or methods from time to time (for example, challenge questions and phrases for employees). If Client chooses not to implement supplemental authentication tools, Client’s access to some or all Wire Transfer Services may be limited. Bank recommends Client utilize antivirus software whenever possible.
Client is ultimately responsible for maintaining and updating computer equipment used to access the Online Banking Services and related Services, including maintaining up-to-date security patches, updates, and other protective applications.
7. ACCOUNT TRANSFER LIMITATIONS. All transfers to and from an account will be subject to the terms and conditions applicable to the account as set forth in the deposit agreement governing the account. If Client exceeds these limits, Bank may impose a fee, close or convert Client’s account, limit Client’s use of the Wire Transfer Services, or any combination of the foregoing. In addition, each Client is assigned a daily Wire Limit by the Bank, related to the total dollar amount of daily transfers; Client cannot submit transfers that exceed this limit. If Client needs to submit transfers above this limit, Client must contact the Bank.
187
TM-0025 Master Treasury Agreement
(07/12/22) Page 24 of 42
8. INCONSISTENCIES. If a beneficiary of a Request is identified by both name and account number, payment may be made by Bank and by any other financial institution based on the account number even if the name and the account number are not consistent or identify different parties. If an intermediary bank or a beneficiary’s bank is identified on a payment order by both name and account number, Bank and other financial institutions may rely on the account number even if the name and the account number are not consistent or identify different parties.
9. PROVISIONAL CREDIT. Client acknowledges that credit for a payment order is provisional until the receiving financial institution obtains final settlement. If final settlement does not occur, the originator of the payment order is not deemed to have made payment to the beneficiary, and the beneficiary's bank is entitled to a refund of the provisional credit. Client agrees that when Bank gives Client credit for an incoming payment order, including but not limited to, returned credited transactions or credit reversals, it is provisional until Bank receives final settlement for the payment order. Bank may delay availability of provisional funds at its discretion. If Bank does not receive final settlement, Client must return the funds previously credited to Client's account to Bank, and the person who sent the payment order will not be treated as having paid Client. Bank may refuse to permit the use of any amount credited for an incoming payment order, including but not limited to a debit entry or credit reversal if Bank believes in its sole discretion that there may not be sufficient funds in Client's account to cover chargeback or return of such transaction.
10. FOREIGN CURRENCY TRANSACTIONS. If a Client requests a funds transfer in United States Dollars or in a currency other than United States Dollars to a foreign country, Bank may transfer the payment in the currency of the beneficiary bank’s country at any exchange rate chosen by Bank. If a funds transfer is returned, Client agrees that the exchange rate for conversion of the foreign currency into United States Dollars may differ from that used by Bank to process the initial funds transfer.
11. CUT-OFF HOURS. A Request is considered executed when Bank executes it. If a Request is received after the cutoff time or on a day that is not a business day, the Request will be deemed received the next business day. Current cutoff times can be found at www.tcbk.com/business/cutoff-times.
12. FEES. Client agrees to current fees for requested services. Refer to the Treasury Management Fee Schedule and Business Fee Schedule for the most current fees and charges related to Wire Transfer and related services. Bank reserves the right to change fees at any time without prior notice.
13. SUBJECT RULES AND REGULATIONS. Client acknowledges that any Request executed by Bank will be subject to rules and regulations applicable to payment orders, including recordkeeping and information transmittal requirement under federal Bank Secrecy Act and its implementing regulations. Client acknowledges and agrees that Bank may capture and transmit information regarding a Request (for example, beneficiary’s name, address other beneficiary identifies and beneficiary’s account number) as part of the processing of a payment order. Client agrees to assist Bank in connection with any requirements imposed on Bank fulfilling Bank’s obligations in this regard. 188
TM-0025 Master Treasury Agreement
(07/12/22) Page 25 of 42
POSITIVE PAY & ACCOUNT RECONCILIATION
SERVICE DESCRIPTION
1. POSITIVE PAY, ACH POSITIVE PAY &/OR ACCOUNT RECONCILIATION SERVICE. Tri Counties Bank (“Bank”) hereby offers its Client and Client hereby accepts the Positive Pay, ACH Positive Pay &/or Account Reconciliation Service (the "Service").
2. MASTER TREASURY AGREEMENT; SUPPORTING DOCUMENTS. This Service Description forms part of the Master Treasury Agreement (“Master Agreement”) agreed to by Client. In the event of conflicts between the terms of this Service Description and the terms of the Master Agreement, the terms of this Service Description shall control. Defined terms in this Service Description shall have the meaning provided in the Master Agreement, unless otherwise defined in this Service Description.
3. SUPPORTING DOCUMENTS; RELATED SERVICE DESCRIPTION. Each of the Services selected by Client and approved by Bank is identified in the Supporting Documents. Each Service is effective as of a start date which will be communicated separately by Bank to Client. If the Client chooses not to select one of the Services, or if Bank in its sole discretion chooses not to approve Client for a requested Service, the terms of the unselected/unapproved Service will not apply and the applicable Services will not be performed. Client’s use of each of the Services must be facilitated through Bank’s Online Banking Service and Client’s use of the Services will also be subject to the separate Business Online Banking Service Description.
4. ACCOUNT DESIGNATION. Throughout the term of this Service Description, Client will maintain the deposit account (the "Account") with Bank designated in the Supporting Documents, or otherwise in writing, to which the Services will be made available. Client acknowledges that this Service Description covers the Positive Pay and/or ACH Positive Pay Service to be provided by Bank and, except as specifically provided in this Service Description, does not cover the handling of the Account or the processing of checks or electronic funds transfers against the Account. As a result, the Account will be subject to, and Bank's operation of the Account will be in accordance with, the terms and provisions of Bank's deposit account agreement governing the Account, a copy of which Client acknowledges having received.
5. POSITIVE PAY SERVICE.
A. The Positive Pay Service provides certain account services through an automated check matching system.
Client's lists of checks recently issued will be compared against the amounts and check numbers of the checks that actually clear against the specified Client account(s) activated for the Positive Pay Service and listed on the Supporting Documents. Client agrees that Bank will only be obligated to match the check number and dollar amount from the Check Issue File (defined below) and that Bank may in its sole discretion, but is not obligated to, match additional data provided in the Check Issue File (“Additional Data”), including but not limited to payee name. Regardless of whether Bank decides to match against Additional Data, and notwithstanding the fact that Additional Data may be included in the Check Issue File, Client further agrees that Bank will not be liable to Client and Client agrees to hold Bank harmless from loss or liability resulting from Bank’s action or inaction with respect to Additional Data. Bank’s determination to match Additional Data in any case will not obligate Bank to continue to do so in other instances. Notwithstanding the foregoing, Bank and Client may agree to Bank’s review of Additional Data, subject to additional terms, fees and conditions.
B. Client must submit a file (“Check Issue File”) to Bank prior to the cut-off time provided in the Supporting Documents, on the day of issuance of any checks against accounts that are subject to the Positive Pay Service.
The Check Issue File must be in the format and contain the information specified by Bank.
C. The term “presented item(s)” shall mean checks that are presented for payment against Client’s Account through the normal check collection system. Presented items that do not match an item included in a Check Issue File, pursuant to this Service Description, will be identified as "error" (“Exception Item”) and will appear on a record describing the Exception Items (“Exception File”) which Bank will provide to Client under this Service Description. Client must submit a "pay", or "return" decision for each item to Bank on the same Business Day by 189
TM-0025 Master Treasury Agreement
(07/12/22) Page 26 of 42
the deadline specified in the Supporting Documents, otherwise the ‘default action’ (defined below) will be carried out by Bank.
D. Client may research suspect items in the System by viewing the check image.
E. Client grants Bank full authority to honor all checks that match the check numbers and amounts corresponding to your Check Issue File.
F. Default Action Types include either PAY ALL or RETURN ALL. The Default Action is applied to any check transaction identified as an exception. Client shall select the Default Action for Check and ACH exceptions at the time of enrollment in the service. The default action (PAY ALL or RETURN ALL) must be the same for all accounts enrolled in Positive Pay & ACH Positive Pay service for a particular Client. In order to change Default Action, Client must submit appropriate documentation.
(1) RETURN ALL – Checks flagged as exceptions will be returned if customer has not submitted a request to pay through the Positive Pay system prior to the cut-off time. (2) PAY ALL – Checks flagged as exceptions will be paid if customer has not submitted a request to return through the Positive Pay system prior to the cut-off time.
G. If Client orders or prints checks from any check-printing vendor other than a Bank selected vendor, Client agrees to meet the Bank's MICR encoding specifications.
H. The Service applies to checks that are presented for payment to Bank through normal interbank automated clearings. Client acknowledges that the Services do not cover checks which are (collectively “ineligible checks”):
(i) presented by mail for collection, (ii) misencoded or duplicate items, or (iii) items which Bank has already cashed, negotiated or paid or which Bank is already committed to honor or pay under applicable laws, regulations or the ACH rules. Bank may, in its sole discretion, attempt to compare Check Issue File data, as otherwise provide in this Service Description, against ineligible checks, but Bank will not be liable for its failure or refusal to do so.
I. Subject to funds being available pursuant to Bank’s funds availability policy, Bank shall honor all checks that match the check numbers and amounts corresponding to the Check Issue File that is provided in conformance with this Service Description.
6. ACH POSITIVE PAY SERVICE.
A. Client may use the ACH Positive Pay Service to review and confirm ACH debit transactions that post to the specified Client accounts listed on the Supporting Documents.
B. For ACH Positive Pay Service, Client may establish (and update from time to time) through the System its ACH rules which govern permissible transactions by SEC Code, Company ID, Transaction Type, and Amount Threshold. All transactions that meet the filter criteria are processed according to the ACH rule.
C. Default Action Types include either PAY ALL or RETURN ALL. The Default Action is applied to any ACH transaction identified as an exception. Client shall select the Default Action for Check and ACH exceptions at the time of enrollment in the service. The default action (PAY ALL or RETURN ALL) must be the same for all accounts enrolled in Positive Pay & ACH Positive Pay service for a particular Client. In order to change Default Action, Client must submit appropriate documentation.
(1) RETURN ALL – ACH transactions flagged as exceptions will be returned if customer has not submitted a request to pay through the Positive Pay system prior to the cut-off time. 190
TM-0025 Master Treasury Agreement
(07/12/22) Page 27 of 42
(2) PAY ALL – ACH transactions flagged as exceptions will be paid if customer has not submitted a request to return through the Positive Pay system prior to the cut-off time.
D. Client acknowledges that the Services do not cover ACH debit or credit items which Bank has already paid or finalized or which Bank is already committed to pay or honor under applicable laws, regulations or the ACH Operating Rules.
7. ACCOUNT RECONCILIATION SERVICE.
A. Full Account Reconciliation Service. To utilize the full Account Reconciliation Service, Client agrees to provide Bank with required information on checks it has issued (“Issued Information”) within the timeframes and in the manner described in the Supporting Documents. At the end of each reconcilement period, Client may access the status of all checks for which Client has provided Issued Information since the last reconcilement period, including paid, outstanding, exception, stopped, voided and cancelled checks. The full Account Reconciliation Services detail will be made available to Client via the Service. The previous month’s outstanding checks will be carried forward.
B. Check Issue File. Client acknowledges the current and complete Check Issue File must be uploaded through the Service and received by the applicable cut-off hour. Client agrees to add to its Issue Information all items identified by Bank as not matching the Issue Information provided to the Bank by Client.
C. Partial Account Reconciliation Service. Under the Partial Account Reconciliation Service, as of the end of each reconcilement period, Bank will provide Client with an electronic file for the checks that have cleared Client’s Account since the last reconcilement period, which can be retrieved by Client online via the Service.
D. Does Not Alter Other Obligations. Client’s enrollment in Account Reconciliation Services does not alter Client’s other obligations to keep its check stock safe and to adopt other security measures, or to review account activity and report to Bank checks paid with missing signatures or with altered information, or to check the indorsement on paid checks
8. CUT-OFF TIMES. The cut-off time applicable to Check and ACH Positive Pay exception decisions can be found at https://www.tcbk.com/business/cutoff-times.
9. FEES. Client agrees to current fees for requested services. Refer to the Treasury Management Fee Schedule and Business Fee Schedule for the most current fees and charges related to Positive Pay, ACH Positive Pay, Account Reconciliation and related services. Bank reserves the right to change fees at any time without prior notice.
10. SECURITY PROCEDURES. Bank recommends Client utilize antivirus software whenever possible. Client is ultimately responsible for maintaining and updating computer equipment used to access the Positive Pay and Account Reconciliation Services and related Services, including maintaining up-to-date security patches, updates, and other protective applications.
11. SYSTEM INTERRUPTION OR FAILURE. In the event of system interruption or failure, either that of Client’s or Bank’s system, resulting in Bank’s inability to receive or process Client’s Check Issue File or other communication, the Check Issue File or other Client communication will be deemed as having not been sent by Client, even if Bank has possession of the Check Issue File or other Client communication.
12. LIMITATION ON LIABILITY. In addition to any other limitation on liability in the Master Agreement, Client agrees that if Bank pays or rejects for payment checks or items in accordance with this Service Description, Client releases Bank and holds it harmless from any claim that the checks or items were not properly payable, or for wrongful dishonor, as applicable.
191
TM-0025 Master Treasury Agreement
(07/12/22) Page 28 of 42
ACH SERVICE DESCRIPTION
1. ACH SERVICE. Tri counties bank (“Bank”) hereby offers its client and client hereby accepts the ach service (the "ACH Service"). Client wishes to initiate credit and/or debit entries by means of the automated clearing house network pursuant to the terms of this service description and the rules of the national automated clearing house association (“NACHA”) and the local automated clearing house association (the "Rules"), and bank is willing to act as an originating depository financial institution (“ODFI”) with respect to such entries. Accordingly, client may submit ach entries to bank in accordance with the terms and conditions of this service description. Client is responsible for all entries to the fullest extent provided by law and as set forth in this service description.
2. MASTER TREASURY AGREEMENT; SUPPORTING DOCUMENTS. This Service Description forms part of the Master Treasury Agreement (“Master Agreement”) agreed to by Client. In the event of conflicts between the terms of this Service Description and the terms of the Master Agreement, the terms of this Service Description shall control. Defined terms in this Service Description shall have the meaning provided in the Master Agreement and as defined in the Rules, unless otherwise defined in this Service Description. The term "Entries" shall have the meaning provided in the Rules and shall also mean the data received from Client hereunder from which Bank prepares Entries.
3. RELATED SERVICE DESCRIPTIONS FOR ACH ENTRIES. Entries submitted by Client using Bank’s Online Banking Services must be consistent with the separate Business Online Banking Service Description. Additional terms and conditions may apply to the ACH Service to the extent Client transmits Entries outside Bank’s Online Banking Services.
Client may not submit Entries outside Bank’s Online Banking Services without Bank’s prior written consent.
4. THE RULES. A copy of the Corporate Edition of the Rules can be purchased from NACHA at www.NACHA.org. Client agrees to obtain a copy, to understand and be familiar with the Rules, and to be responsible for keeping up to date with changes in the Rules. Client agrees that information or advice received by Client from Bank as to the Rules or the operation of the Rules is not legal advice and is not a substitute for Client’s obligation independently to understand and comply with the Rules.
5. PROCESSING ENTRIES. Client may transmit only PPD (Prearranged Payments and Deposits), CCD (Corporate Credit or Debit) or CTX (Corporate Trade Exchange) credit or debit Entries to Bank to the location(s) and in compliance with the formatting and other requirements set forth in the Rules and the Supporting Documents. Entries may be submitted only for Client’s account. No entries may be submitted on behalf of third parties unless Client has requested and Bank has agreed to allow Client to act as a Third Party Sender, and a supplemental service description has been executed and agreed upon between Client and Bank. The ACH Service will start on a date agreeable to Client and to Bank after all set up requirements have been completed.
Client will not submit individual or total monthly Entries in excess of the maximum limits established by Bank and reflected in the Supporting Documents, as amended from time to time. The parameters and variations of the limits shall be set at Bank’s discretion, including but not limited to limits based on dollar amounts and/or Standard Entry Class Code types. Client will not divide a transaction into more than one Entry in order to avoid these limitations. Bank may adjust these limitations from time to time, at Bank’s discretion and without prior notice. Limits are set for the Bank’s protection only and Bank’s processing of Entries in an amount greater than the established limit(s) shall not be deemed a waiver of this provision and any such transactions remain Client’s responsibility. Bank may cease processing Entries in a greater amount at any time without prior notice.
Client may not originate Entries using Standard Entry Class Codes other than CCD, CTX or PPD without prior notice to and written approval by Bank. Bank may require Client to submit an application in form and content acceptable to Bank, and Client’s execution supplemental schedules, agreements and other documents as Bank may require, as a condition precedent to Client's use of other Standard Entry Class Codes. By way of example, the foregoing restrictions and requirements may apply to Client's use of ARC, RCK, BOC, POP, WEB, IAT or TEL Standard Entry Class Codes, or if Client is 192
TM-0025 Master Treasury Agreement
(07/12/22) Page 29 of 42
engaging in cross-border (International) transactions. Bank may block unapproved use of a Standard Entry Class Code or an unapproved cross-border transaction.
Except as provided below for On-Us Entries, Bank shall: (i) process Entries received from Client to conform with the file specifications set forth in Rules, (ii) transmit such Entries as an ODFI to an ACH Operator selected by Bank in its sole discretion (“ACH Operator”), and (iii) settle for such Entries as provided in the Rules. Bank shall transmit or complete the necessary authorizations for ACH Entries by the deadline of the ACH Operator, provided: (a) such Entries are received by Bank's related cut-off time on a business day and (b) the ACH Operator is open for business on such business day. Entries shall be deemed received by Bank when the transmission and compliance with any related Security Procedures is completed. If any of the requirements of this paragraph are not met, Bank may use reasonable efforts to transmit such Entries to the ACH by the next deadline of the ACH Operator which is a business day and a day on which the ACH Operator is open for business.
Any entries submitted for Same Day ACH processing that exceed the Same Day ACH limit or do not meet the guidelines for Same Day ACH will automatically processed on the next business day.
6. ON-US ENTRIES. In the case of an entry received for credit to an account maintained with bank (an "on-us entry"), bank shall credit the receiver's account in the amount of such entry on the effective entry date contained in such entry, provided the requirements set forth in this service description are met. If said requirements are not met, bank may use reasonable efforts to credit the receiver's account in the amount of such entry no later than the next business day following such effective entry date.
7. NOTICE OF RETURNED ENTRIES. Bank shall notify client by phone or electronic transmission, including email of the receipt of a returned entry from the ach no later than one business day after the business day of receipt. Except for an entry retransmitted by client in accordance with the requirements of this service description, bank shall have no obligation to retransmit a returned entry to the ach if bank complied with the terms of this service description with respect to the original entry.
8. PRENOTIFICATIONS. If Client chooses to originate non-dollar prenotification Entries to verify the accuracy of routing and account numbers, it agrees not to initiate live dollar Entries until at least three (3) business days following the Settlement Date of the prenotification Entry. Prenotifications must be provided to Bank in the format provided in the Rules. If Client receives notice that a prenotification has been rejected or returned, Client will research the problem and make any necessary corrections before transmitting another Entry.
9. NOTIFICATIONS OF CHANGE. Bank shall notify Client of all Notifications Of Changes (NOC) received by Bank relating to Entries transmitted by Client by mutually agreeable means, including email, no later than one business day after the business day of receipt. Client must make the changes specified in an NOC or corrected NOC: (a) within six business days of receipt or prior to initiating another Entry to the Receiver's account, whichever is later; or (b) as otherwise required in the Rules, if the Rules specify a different time for correction.
10. PREFUNDING; PAYMENT. Bank may designate Client as "ACH Prefunding," and Bank may change Client's designation to or from ACH Prefunding at any time, with or without cause and without prior notice at Bank's sole discretion. Bank will inform Client of Client’s designation as ACH Prefunding, and of any change in the designation.
Client will pay Bank or otherwise have and continue to maintain until the Effective Date in Client’s Account, in immediately available funds, an amount equal to the sum of all credit Entries or debit Reversals related to Entry data delivered to Bank at such time as Bank may from time to time designate or, if not otherwise designated: (a) if Client is not designated ACH Prefunding, no later than two business days prior to the Effective Entry Date; and (b) if Client is designated ACH Prefunding, no later than the date of transmittal of the related Entry data to Bank or at such other time as Bank may have established for Client.
11. INCONSISTENCIES. If a Receiver of an Entry is identified by both name and account number, payment may be made by Bank and by any other financial institution based on the account number even if the name and the account number are not consistent or identify different parties. If an intermediary bank or a beneficiary’s bank is identified on a payment 193
TM-0025 Master Treasury Agreement
(07/12/22) Page 30 of 42
order by both name and account number, Bank and other financial institutions may rely on the account number even if the name and the account number are not consistent or identify different parties.
12. PROVISIONAL CREDIT. Client agrees that any payment by Bank to Client for any debit Entry, returned credit Entry or credit Reversal is provisional until Bank has received final settlement for such Entry. Bank may delay availability of provisional funds at its discretion. If final settlement is not received, Bank is entitled to and Client agrees to pay a refund of the amount credited; and Bank will charge Client's account for the amount due. Bank may refuse to permit the use of any amount credited for a debit Entry or credit Reversal if it believes that there may not be sufficient funds in Client account to cover chargeback or return of such Entry or Reversal.
13. CUT-OFF TIMES. An entry is considered executed when bank executes it. If entry data is received after the cut-off time or on a day that is not a business day, the entry will be deemed received the following business day. Cut-off times can be found at https://www.tcbk.com/business/cutoff-times.
14. Electronic Tax Payment Service. The Electronic Tax Payment Service allows Client to originate federal and state tax payments using the Service. To facilitate the Electronic Tax Payment Service, Client appoints Bank to act as Client’s agent for the purpose of making tax payments and deposits on Client’s behalf. Upon Bank’s request, Client agrees to execute such additional enrollment forms and authorizations as Bank may request. Client authorizes Bank to release account and tax payment information to any taxing authority in performing the Electronic Tax Payment Service and to confirm payments.
Client must be pre-enrolled with the federal and/or state taxing authorities prior to using the electronic tax payment service. Client warrants that client is enrolled in the electronic federal tax payment system (EFTPS) and has selected the ACH Credit option. Client also warrants that all special requirements of the EFTPS system have been met. Client also warrants that Client has completed appropriate enrollment requirements with each state taxing authority, as applicable.
Client is solely responsible for determining the amount of any taxes due and transmitting the correct payment information in accordance with the Service requirements. Client must furnish Bank with complete and accurate tax payment information. Bank is not responsible for: (i) determining the correctness of any tax computation or payment; (ii) questioning the timing or amount of the payment; (iii) determining or questioning the correctness of any report or information submitted by Client (even if it appears incorrect on its face); or (iv) any penalty which may be imposed if Client instructs Bank to make a payment after Bank’s cut-off time or the date the tax payment is due.
Bank will notify Client orally, electronically or in writing if Bank is unable to process any payment in the manner attempted by the Electronic Tax Payment Service and will do so no later than the business day following the payment date. If Client fails to maintain sufficient collected and available funds in Client’s account, Bank may refuse to perform the tax payment. If any payment is rejected, it will be Client’s responsibility to resubmit the payment instruction. If Client does not have sufficient or available funds, Client may be charged an insufficient funds fee and any other fees or charges applicable to the transaction.
When Bank receives Client’s payment instruction to make a tax payment, Bank will charge Client’s Account for the amount of the payment(s). The funds may be held by Bank as a non-interest bearing deposit liability to Client, but will not be held in trust. Until Bank makes Client’s tax payment(s), Client’s funds will be subject to offset for legal process, or any debts owed to Bank.
Client assumes the risk of any failure to submit payment instructions to Bank in a timely and correct manner. Payments should be submitted at least two business days prior to the due date. Any interruption of the Electronic Tax Payment Service, regardless of the reason, will not relieve Client of Client’s obligation to make a tax payment or report. Client is ultimately responsible for promptly making any required tax payment or report. Client is responsible for promptly making required tax payments by another means in the event there is an interruption in the Electronic Tax Payment Service. Client agrees to be bound by the Rules, as amended from time to time, and all laws and regulations of the United States.
194
TM-0025 Master Treasury Agreement
(07/12/22) Page 31 of 42
Client acknowledges that Bank’s employees are not authorized or permitted to give tax advice to Client. Client agrees not to seek or place any reliance upon tax advice from Bank or Bank’s employees. If the Electronic Tax Payment Service is not used for a period of ninety (90) days, the Electronic Tax Payment Service may be removed or disabled. To cancel an Electronic Tax Payment Service Communication and the payment instruction that Client has scheduled, Client must cancel online prior to the cut-off time on the processing date. Payments cannot be cancelled after this time. Bank may, at Bank’s discretion, seek to assist Client in attempting to cancel or amend any payment but is not obligated to do so. If Bank does, Client will indemnify Bank in accordance with the Service Description for any losses Bank may suffer in connection with Bank’s efforts.
15. CLIENT REPRESENTATIONS AND WARRANTIES. In addition to the representations and warranties provided by client under the master agreement, with respect to each and every entry initiated by client, client represents and warrants to bank and agrees that:
A. Client shall obtain all consents and authorizations required under the Rules and shall retain such consents and authorizations for two years after they expire and other documents related to Entries for a period of six years.
Without limiting the foregoing, each person as the Receiver of an Entry received by Bank from Client has authorized the initiation of such Entry, and the crediting or debiting of its account in the amount and on the Effective Entry Date shown on such Entry. Client will provide Bank with a copy of such authorization whenever requested to do so within five business days. Such authorization is operative at the time of transmittal or crediting / debiting by Bank as provided herein;
B. Entries transmitted to Bank by Client are limited to those types of credit or debit Entries set forth in this Service Description;
C. If the amount of a debit Entry to a Receiver's account varies in amount from the previous debit Entry relating to the same authorization or preauthorized amount, Client will, at least ten days before the Effective Entry Date of such debit Entry, send the Receiver written notice of the amount of such debit Entry and its Effective Entry Date, unless the Receiver has previously been notified of Receiver's right to receive such notice and Receiver has elected to receive such notice only when the debit Entry does not fall within a specified range of amounts or varies from the most recent debit Entry by an agreed amount; D. If any change is made by Client in the scheduled Effective Entry Date of one or more debit Entries, Client will, at least seven days before the Effective Entry Date of the first such debit Entry to be affected by such change, send the Receiver a written notice of the new Effective Entry Date(s) of such Entry or Entries; E. Client shall be bound by and comply with the Rules as in effect from time to time, including, without limitation, the treatment of a payment of an Entry by the Receiving Depository Financial Institution (“RDFI”) to the Receiver as provisional until receipt by the RDFI of final settlement for such Entry; F. Client specifically acknowledges that it has received notice of the Rule regarding provisional payment and of the fact that, if such settlement is not received, the RDFI shall be entitled to a refund from the Receiver of the amount credited and Client shall not be deemed to have paid the Receiver the amount of the Entry; G. Client will not use the ACH Service to collect: (i) payments for goods or services sold by third parties; (ii) payments relating to adult entertainment, gambling services, or child pornography; (iii) obligations owning to third parties; or (iv) obligations related to cash advances by Client; H. Client hereby makes the same representations and warranties to Bank with respect to Entries sent by Bank to an ACH Operator upon the authorization of Client as Bank is deemed to make under the Rules, and Bank shall have no responsibility with respect to matters so represented and warranted by Client; and I. Except as previously disclosed in writing by Client to Bank: (i) Client is not a “money-services business” (as defined at 31 CFR 103.11(uu) or successor regulation) and is not subject to any state license requirements applicable to a money-services business, banks, broker-dealers or other financial institutions; and (ii) no Entry 195
TM-0025 Master Treasury Agreement
(07/12/22) Page 32 of 42
data is submitted by Client on behalf of, or as agent, service bureau or processor for another. By way of example, Client will not submit debit Entries that result from a sale of goods or services by a third party to the Receiver.
Client agrees to indemnify Bank against any loss, liability or expense (including attorney's fees and expenses) resulting from or arising out of any breach of any of the foregoing representations or agreements.
16. FEES. Client agrees to current fees for requested services. Refer to the Treasury Management Fee Schedule or Business Fee Schedule for the most current fees and charges related to ACH and related services. Bank reserves the right to change fees at any time without prior notice.
17. SECURITY PROCEDURES. Bank recommends Client utilize antivirus software whenever possible. Client is ultimately responsible for maintaining and updating computer equipment used to access the Online Banking Services, ACH Services and other related Services, including maintaining up-to-date security patches, updates, and other protective applications.
18. RETENTION. In addition to any retention obligations of Client under the Master Agreement and this Service Description, Client agrees to retain and make readily available to Bank on request all information necessary to remake any files of Entries for ten business days following the Settlement Date.
19. AUDIT. In addition to the audit commitments provided under the Master Agreement, if transactions Client conducts involve some use of the Internet, then Client agrees to conduct an internal security audit at least annually to ensure that the financial information obtained from Receivers is protected by security practices and procedures (“security audit”) that include, at a minimum, adequate levels of: (i) physical security to protect against theft, tampering, or damage; (ii) personnel and access controls to protect against unauthorized access and use; (iii) network security to ensure secure capture, storage, and distribution of financial information; and (iv)any other items identified in the Operating Guidelines of the Rules. Upon Bank’s request, Client agrees to have an external security audit conducted within sixty (60) days of the request. The external security audit will include the same items described in this paragraph for an internal security audit. Client agrees to provide Bank with a copy of each internal and external audit report, as applicable, in a format acceptable to Bank within (30) days from the completion of the audit.
Without limiting the foregoing, Client specifically agrees to establish data security policies, procedures and systems as required by the Rules. This requires Client to:
(i) Protect the confidentiality and integrity of Protected Information (ii) Protect against anticipated threats or hazards to the security or integrity of Protected Information until its destruction; and
(iii) Protect against unauthorized use of Protected Information that could result in substantial harm to a natural person
Such policies, procedures, and systems must include controls that comply with applicable regulatory guidance on access to all systems used by Client to initiate, process and store Entries. NACHA defines Protected Information as the nonpublic personal information, including financial information, of a natural person used to create or contained within an Entry and any related Addenda record.
196
TM-0025 Master Treasury Agreement
(07/12/22) Page 33 of 42
REMOTE DEPOSIT CAPTURE SERVICE DESCRIPTION
Introduction. Tri Counties Bank (“Bank”) hereby offers its Client and Client hereby accepts the remote deposit capture service (“Remote Deposit Capture Service,” “RDC Service” or “RDC”) described in this Service Description. The Remote Deposit Capture Service allows for the conversion of Checks to Substitute Checks or Image Exchange Items, which would enable Client to transmit paper checks converted to Imaged Items to Bank for processing and deposit into the designated account of Client maintained at Bank. Client desires to use the Remote Deposit Capture Service to facilitate the services as identified in and subject to this Service Description. Bank reserves the right, with prior written notice to Client, to place, from time to time, limits on Client's right to use the Remote Deposit Capture Service.
I. MASTER TREASURY AGREEMENT. Bank will provide to client the remote deposit capture services described in this service description to enable client to transmit imaged items to bank or bank’s designated processor to be cleared as substitute checks or image exchange items. This service description forms part of the master treasury agreement (“master agreement”) agreed to by client.
In the event of conflicts between the terms of this service description and the terms of the master agreement, the terms of this service description shall control. To the extent client accesses the remote deposit capture services using bank’s online services, client’s use of the remote deposit capture services must also be facilitated pursuant to the separate business online banking service description.
II. PRIMARY ACCOUNT DESIGNATION. Provided Bank has approved Client for the Remote Deposit Capture Service, Client may use the Remote Deposit Capture Services to facilitate a deposit to Bank approved deposit account(s) Client has with Bank (other than those with deposit restrictions, such as certificate of deposits). The account to which Client designates a deposit shall be referred to as the “RDC Account” for the purpose of this Service Description and the deposit transaction. Client authorizes Bank to debit the RDC Account (or any other account maintained by Client at Bank) for any fees or other amounts due Bank in connection with the Remote Deposit Capture Services. If the RDC Account is closed for any reason, Client's Remote Deposit Capture Services will be stopped along with any unprocessed Remote Deposit Capture Services transfers. To reinstate its Remote Deposit Capture Services, Client must designate a new RDC Account.
III. CLIENT RIGHTS. Subject to the terms of this Service Description, Bank hereby grants Client a non-exclusive, non-transferable right to access and use the Remote Deposit Capture Service in connection with Client's own business operations in accordance with the Supporting Documents.
IV. DEFINITIONS. Unless otherwise defined below or in this Service Description, terms in this Service Description shall have the meaning provided in the Master Agreement. For the purpose of this Service Description, the term “Communications” shall have the meaning provided in the Master Agreement and shall include Communications to Bank in connection with the Remote Deposit Capture Service, including transmission of output files from Client to Bank; the terms “Security Procedures” and “Security Devices” shall have the meaning provided in the Master Agreement and shall include but not be limited to any Security Procedures and Security Devices used to access the RDC Account and to use the Remote Deposit Capture Service.
A. "Check" means an Original Check, as defined in Regulation CC. 197
TM-0025 Master Treasury Agreement
(07/12/22) Page 34 of 42
B. "Endpoint" means any Federal Reserve Bank, financial institution, local clearing house, courier or other entity or location for the delivery of cash letters or other presentment of Electronic Items or Substitute Checks.
C. "Image Exchange Item" means a digitized image of an Item cleared and settled directly with a Paying Bank without conversion to a Substitute Check.
D. "Imaged Item" means the digitized image of a Check that is created by Client and transmitted to Bank using the Remote Deposit Capture Service.
E. "Item" means a Check that is payable on demand, drawn on or payable through or at an office of a United States Financial Institution and payable or endorsed to Client, and includes Original Checks, Substitute Checks and Image Exchange Items.
F. "Non-cash Item" means an Item that would otherwise be an Item, except that: (i) a passbook, certificate or other document is attached; (ii) it is accompanied by special instructions, such as a request for special advice of payment or dishonor; (iii) it consists of more than a single thickness of paper, except an Item that qualifies for handling by automated check processing equipment; or (iv) it has not been preprinted or post-encoded in magnetic ink with the routing number of the Paying Bank.
G. “Non-qualifying Item” means Non-cash Items, Items payable in a medium other than United States money, currency, warrants, Items payable to third parties, Items payable to joint payees (unless payable to the payees alternatively and deposited into an account in the name of all payees), demand drafts or remotely created checks as defined by the UCC and Regulation CC, respectively, Items that are stale dated by six months or more or postdated, savings bonds, Items payable to “cash,” Substitute Checks, non-negotiable Items, Items that have been returned unpaid for any reason and any Item that exceeds Client’s transaction limitations as established by Bank from time to time.
H. "Original" with respect to a Check means the first paper Item issued with respect to a particular payment transaction.
I. "Paying Bank" means the United States financial institution ordered in an Item to make payment to the payee(s) named on the Item.
J. "Remote Deposit Capture Services" means the services described in this Service Description, to be provided by Bank to Client to enable the processing of Items digitally as Image Exchange Items through image exchange networks or through creation of Substitute Checks and presentment to established Endpoints, including collectively the procedures, protocols, and software used by Bank and its licensors and contractors in connection with the electronic processing of Items.
K. "Software" means any software which may be offered or required by Bank for use in receiving, validating and packaging images and data from a bulk file to be forwarded to Bank for additional processing.
L. "Substitute Check" means a paper reproduction of an Item that satisfies the requirements and definition of "substitute check" set forth in Regulation CC.
M. "UCC" means the Uniform Commercial Code as enacted and amended in the state whose law governs interpretation of this Service Description.
N. "United States Financial Institution" means (i) any person, located in the United States, engaged in the business of banking; (ii) a Federal Reserve Bank; (iii) a Federal Home Loan Bank; and (iv) to the extent it acts as a payor, the U.S. Treasury, the U.S. Postal Service, or a State or local government. 198
TM-0025 Master Treasury Agreement
(07/12/22) Page 35 of 42
V. REMOTE DEPOSIT SERVICE.
A. Client will create images of Checks at Client’s location by use of scanning hardware and software, if any, approved or provided by Bank (as applicable). Client will enter all amounts and any other required information correctly and as provided in the Supporting Documents.
B. The electronic images of Checks will be transmitted by Client to Bank, or Bank’s authorized processor, over the Internet through a secure web-based interface.
C. Client’s RDC Account will be provisionally credited upon Bank’s acceptance of the Imaged Items for deposit which are received by Bank from Client through the Remote Deposit Capture Service.
D. Client will maintain the RDC Account for Client to receive credit and provide other specific information required by Bank related to the Remote Deposit Capture Service. As set forth in this Service Description, all deposits received by Bank are accepted subject to Bank’s verification and final inspection and may be rejected by Bank in Bank’s sole discretion. All deposits are subject to the terms of the deposit account agreement governing Client’s accounts.
VI. CLIENT RESPONSIBILITIES. IN CONNECTION WITH THE REMOTE DEPOSIT CAPTURE SERVICES, CLIENT SHALL COMPLY WITH THE FOLLOWING:
A. Client shall maintain the RDC Account at Bank for the receipt of deposits of Items.
B. Client will create images of Checks at Client’s location by use of scanning hardware and Software approved or provided by Bank. Client will enter all amounts and any other required information correctly.
C. Client will only submit Checks for processing to Bank that meet the definition of “Item” as provided in this Service Description and will ensure that the Items scanned meet the standards for image quality established by the American National Standard Institute (ANSI) required by Regulation CC, or other standards established or required by Bank or applicable law, as amended from time to time. Client will not process any Non-qualifying Items. Bank's processing of any Nonqualifying Items shall not constitute a waiver by Bank or obligate it to process such Non-qualifying Items in the future. Bank may discontinue processing of Non-qualifying Items at any time, without cause or prior notice.
D. Unless prior approval by Bank is obtained in writing, Client will not attempt to scan and transmit to Bank any Item which is drawn on a deposit account of Client at Bank or any other financial institution, or a deposit account of any business entity of which Client is a principal, officer or authorized signer. Client will only use the Remote Deposit Capture Service for its own purposes and in accordance with this Service Description.
E. Client will not attempt to scan and transmit to Bank any checks made out to parties other than Client (‘third-party checks’).
F. Client will not attempt to scan and transmit to Bank any previously truncated and reconverted Substitute Check. Any previously truncated and reconverted Substituted Check must be physically deposited with the Bank. Notwithstanding the foregoing, Bank may redeposit any returned Substitute Check or Image Exchange Item consistent with the terms of the deposit account agreement governing Client’s accounts.
G. Client will (i) ensure that Items are restrictively endorsed or otherwise processed to permit only financial institutions to acquire rights of a holder in due course in the collection process of Items, (ii) handle, process, maintain and destroy Original Checks as set forth in this Service Description 199
TM-0025 Master Treasury Agreement
(07/12/22) Page 36 of 42
and in the Supporting Documents, and (iii) ensure that no financial institution (depositary, collecting or payor), drawee, drawer or endorser receives presentment or return of, or otherwise is charged for an Item more than once in any form.
H. Except to the extent otherwise remotely agreed by Bank, Client will provide, at its own expense, a broadband Internet connection, such as via a digital subscriber line (DSL) or other connectivity having equivalent or greater bandwidth and all other computer hardware, software, including but not limited to a compatible Web browser, and other equipment and supplies required to use the Remote Deposit Capture Service, all of which must satisfy any minimum requirements or as otherwise may be acceptable to Bank. Except to the extent otherwise provided in this Service Description, Client will provide, or obtain from another party selected by Client at Client’s expense, support and maintenance of such Internet connection and all other computer hardware, software, and equipment required to use the Remote Deposit Capture Service, including without limitation troubleshooting Internet connectivity issues with Client’s internet service provider (ISP).
I. Client will balance the dollar amount of each deposit to the sum of Checks prior to transmitting to Bank.
J. Client will: (i) maintain a daily control record of all Checks, including transaction counts and dollar amounts; and (ii) balance transactions transmitted from the previous business day and immediately notify Bank of any error or discrepancy discovered.
K. Unless Bank specifically agrees otherwise in writing, Client will not use the Service to deposit any Check or Checks that exceed the transaction limits established by Bank from time to time. Bank may communicate the transaction limits, including changes to the same, by written or electronic notice to Client.
L. Client will be responsible for verifying Bank's receipt of Client’s transmission(s) by verifying that deposits have been posted to the RDC Account, in addition to cooperating in any investigation and resolving any unsuccessful or lost transmission with the Bank.
M. Client will maintain fully qualified, properly trained and experienced administrative staff and employees sufficient to perform its obligations under this Service Description.
N. Client shall exercise due care in preserving the confidentiality of any user identification, password, test key, or other code or authentication method provided by the Bank or otherwise required for use of the Remote Deposit Capture Service and shall further prevent the use of the same by unauthorized persons. Client assumes full responsibility for the consequences of any missing or unauthorized use of or access to the Remote Deposit Capture Service or disclosure of any confidential information or instructions by Client, its employees and agents (as applicable).
O. Client will immediately stamp or otherwise mark Original Checks “Processed,” once the Check has been scanned and transmitted. The purpose of this marking on the Original Check is to indicate that the Item has been electronically presented and is thereafter void for re-presentment. Client agrees that it will not present an Item through the Remote Deposit Capture Services to Bank or any other bank for payment once the Item has already been scanned and transmitted for RDC processing.
P. Client will, upon request, make scanner location available for on-site inspection by Bank, to ensure Client is complying with Terms and Conditions of Remote Deposit Capture Service.
VII. EQUIPMENT.
200
TM-0025 Master Treasury Agreement
(07/12/22) Page 37 of 42
A. Client agrees to use only scanner equipment and software that meet Bank’s service specifications, and shall not use any scanner equipment purchased or provided by a third parties without Bank’s prior written consent. Client will ensure that the equipment is clean and operating properly, and will inspect and verify the quality of images and ensure that the digitized images of Original Checks are legible for all posting and clearing purposes. If Client utilizes a scanner not provided by Bank, Client will be solely responsible for verifying the compatibility of any equipment used with the Remote Deposit Capture Service.
B. To the extent Bank provides access to equipment for Client’s use of the Remote Deposit Capture Service (“Bank-Provided Equipment”), Client is responsible for the maintenance of the BankProvided Equipment and Bank may require Client’s use of the same to be subject to separate terms. If any Bank-Provided Equipment is lost, stolen, or damaged in such a manner that Client cannot comply with the capture, transmission, processing, and other applicable procedures and requirements of this Service Description, Client agrees to inform Bank and to then obtain and substitute new equipment that is acceptable to Bank, before Client continues using the equipment and the Remote Deposit Capture Services. If Client’s use or maintenance resulted in damage to any Bank-Provided Equipment, Client agrees to reimburse Bank on demand for Bank’s costs to repair the equipment, or to replace the equipment if repair is not reasonably feasible. Upon termination of this Service Description, Client’s right to use the Bank-Provided Equipment shall terminate and Client agrees to return the scanner and all program materials within ten (10) calendar days (or Bank shall charge Client the replacement cost of the scanner).
C. Bank recommends Client utilize antivirus software whenever possible. Client is ultimately responsible for maintaining and updating computer equipment used to access the Remote Deposit Capture Service, Online Banking Service or related Services, including maintaining up-to-date security patches, updates, and other protective applications. Bank assumes no liability for any computer virus or related problems arising in connection with Client’s use of equipment, including Bank-Provided Equipment, and Client shall indemnify, defend and hold harmless the Bank for any losses, damages, costs and expenses resulting directly from any computer virus or related problems the Bank may suffer or incur from any computer virus or related problem caused by Client.
VIII. SOFTWARE. At any time during the term of this service description, bank may require in its sole discretion the use of software in connection with the RDC Services.
A. To the extent Bank requires the use of Software in connection with the Remote Deposit Capture Service, Client will implement and use the Software, as set forth in the Supporting Documents and any applicable materials relating to the Supporting Documents to transmit output files to Bank.
B. Client acknowledges that (i) its license to any Software that may be required for the Remote Deposit Capture Service is directly from the Software provider, pursuant to the license agreement that appears when any such Software is electronically accessed by Client or otherwise provided to Client, (ii) Bank may provide certain "first level" support to Client with respect to the Software, but that Bank will have no responsibility, for maintenance, support, infringement protection, or otherwise, to Client with respect to the Software, and (iii) Client will look strictly to the Software provider, or its successors, with respect to any issues concerning the Software that cannot be satisfactorily resolved with Bank's assistance.
C. Client will use the Software solely for the purpose of transmitting output files to Bank consistent with this Service Description and not for communications with any other party. Client will not allow access to the Software or the use of the Remote Deposit Capture Service by any person other than Client, and will only process Items arising from a transaction or obligation between Client and its direct payor. Without limiting the foregoing, Client agrees to implement and maintain separation 201
TM-0025 Master Treasury Agreement
(07/12/22) Page 38 of 42
of duties and dual control procedures at Client’s location(s) to ensure compliance with the limitation on access commitments provided under this Service Description.
D. To ensure Client’s retention obligations under this Service Description, Client agrees to implement and maintain business continuity procedures, including but not limited to those needed to ensure proper backup of data and periodic testing of the same.
IX. RETENTION AND DESTRUCTION OF ORIGINAL CHECK. Client will retain and store original checks in a safe and secure environment for a period of 30 days after such item has been digitized and processed. Client shall take appropriate security measures to ensure that: (i) only authorized personnel shall have access to original checks, and (ii) that the information contained on such original checks or on any corresponding imaged items are not disclosed to third parties. Client will promptly (but in any event within 5 business days) provide any retained original check (or, if the original check is no longer in existence, a sufficient copy of the front and back of the original check) to bank as requested to aid in the clearing and collection process to resolve claims by third parties with respect to any item or as bank otherwise deems necessary. Client will use a commercially reasonable method which is consistent with any requirements of regulation cc and approved by bank to securely and permanently destroy original checks after client's retention period has expired.
X. PROCESSING TIMES.
A. Notwithstanding any provisional credit that may be applied to the RDC Account in connection with Client’s transmitted Imaged Items, Imaged Items processed for deposit through the Remote Deposit Capture Service will be deemed to have been received by Bank for deposit at the time the Imaged Items are actually received and accepted at the location where Bank or its designated agent posts the credit to the RDC Account. A deposit of Imaged Items will be deemed to have been received and accepted by Bank for deposit when all of the following have occurred: (i) Bank has preliminarily verified that the image quality of the Imaged Items is acceptable to Bank in its discretion, all Item information is complete and the deposit totals are balanced to the Item information provided for the deposit; and (ii) Bank has successfully performed all further validation routines with respect to the deposit. Notwithstanding the foregoing, Imaged Items received by Bank for deposit may be rejected by Bank in Bank’s sole discretion.
B. Items will be processed and ready for presentment by Bank after Bank receives all good digitized images and associated data for any given transmission from Client. Client agrees to view the images of each scanned Item that is sent to Bank. If Item information received by Bank is not complete or cannot be processed by Bank for any reason, Bank may reject the Imaged Item, notwithstanding any transmission confirmation and charge the amount back against any provisional credit to Client’s RDC Account. Client will be responsible for verifying Bank’s receipt of Client’s transmissions by verifying that deposits have been posted to Client’s RDC Account. Bank will use commercially reasonable efforts to present Items for payment to the applicable Endpoint within a reasonable period of time following such receipt.
C. If an Imaged Item is not accepted for deposit, Client may then submit the Original Check to Bank for processing or contact the maker to reissue the Check. If Client submits the Original Check for processing, Bank reserves the right to refuse to process the Check for deposit and presentment to the Paying Bank and may instead require Client to have the maker reissue the Check.
D. It is Client's responsibility to understand and build into its transmission schedules the appropriate deadlines necessary to meet the availability schedules of Bank as set forth in the Master Agreement or as otherwise established by Bank. Client is further responsible for understanding 202
TM-0025 Master Treasury Agreement
(07/12/22) Page 39 of 42
and building into its transmission schedule the changes in transmission windows required by time changes associated with Daylight Savings Time.
E. The cut-off time for deposits to be made through the RDC Service can be found at https://www.tcbk.com/business/cutoff-times. Any deposits made after the cut-off time will be considered made the following business day.
XI. RETURNED ITEMS. Client understands and agrees that an item that is not paid by a paying bank, or is otherwise returned for any reason, will in bank’s discretion be: (i) re-presented to the paying bank; or (ii) returned to client and client’s RDC account charged for the amount of the item plus any associated fees as disclosed in bank’s applicable fee schedule, which may be changed from time to time in bank’s discretion. Client agrees that items may be returned as image exchange items, rather than substitute checks. Bank’s right to charge the RDC account of client will apply without regard to whether the item is timely returned to bank or whether there is any other claim or defense that the item has been improperly returned to bank.
XII. BANK RIGHTS AND RESPONSIBILITIES.
A. For all Imaged Items processed by Client pursuant to this Service Description, either (i) digitized images will be converted to Substitute Checks and presented for payment to established Endpoints, or (ii) Imaged Exchange Items will be presented for payment through image exchange networks.
Bank may in its sole discretion determine the manner of processing. All such processing and presentment shall be done in accordance with timeframes and deadlines established by the Bank from time to time.
B. Unless otherwise agreed by Client and Bank, Bank will process any returned Items in accordance with applicable law and the Master Agreement.
C. Subject to the terms of this Service Description, availability of credit from Items processed under this Service Description will be subject to the availability schedule of Bank, which may be amended from time to time.
D. Bank may at its sole option, with or without cause, at any time and from time to time, refuse to process any Imaged Items. Bank may from time to time establish transaction limitations and assign them to Client.
E. Bank shall be excused from failing to act or delay in acting if such failure or delay is caused by legal constraint, interruption of transmission, or communication facilities, equipment failure, war, emergency conditions or other circumstances beyond Bank's control. In addition, Bank shall be excused from failing to transmit or delay in transmitting an Item for presentment if such transmittal would result in Bank's having exceeded any limitation upon its intraday net funds position established pursuant to Federal Reserve guidelines or if Bank's otherwise violating any provision of any risk control program of the Federal Reserve or any rule or regulation of any other U.S. governmental regulatory authority. In the event of any failure or delay, Client acknowledges that it may instead deposit directly with Bank any Original Items for processing and presentment, provided such Original Items have not been previously imaged and processed in connection with the Remote Deposit Capture Services.
F. In addition to any other rights Bank may have with regards to the accounts of Client, Bank may hold and use funds in any Client account following termination of this Service Description for such time as Bank reasonably determines that any Item processed by Bank prior to termination may be returned, charged back or otherwise a cause for any loss, liability, cost, exposure or other action for which Bank may be responsible. Without limitation, you recognize that under the UCC, Regulation 203
TM-0025 Master Treasury Agreement
(07/12/22) Page 40 of 42
CC, the Electronic Check Clearing House OrganizationTM (“ECCHO”) Rules (as applicable), and the rules of any image exchange network, our representations and warranties with regards to Image Exchange Items and Substitute Checks may expose us to claims for several years following processing of the Image Exchange Item or Substitute Check.
XIII. CLIENT REPRESENTATIONS AND WARRANTIES. Client makes the following representations and warranties with respect to each item, including non-qualifying items, processed by client pursuant to this service description:
A. The Imaged Item is a digitized image of the front and back of the Original Check and accurately represents all of the information on the front and back of the Original Check as of the time Client converted the Original Check to an Imaged Item;
B. The Imaged Item contains all endorsements applied by parties that previously handled the Original Check in any form for forward collection or return;
C. Except as otherwise specifically disclosed in writing to Bank, Client is not now engaged, and will not during the term of this Service Description engage, in any business that would result in Client being or becoming a "money service business" as defined in the Federal Bank Secrecy Act and its implementing regulations;
D. All encoding, transfer, presentment and other warranties made under applicable law as Bank is deemed to make under applicable law, including without limitation those under the UCC, Regulation CC and the rules of any image exchange network;
E. There will be no duplicate presentment of a Check in any form, including as a digitized image, as a paper negotiable instrument or otherwise and Client will be liable for and otherwise assume responsibility for any such duplicate presentment of any Check. Client agrees to indemnify and defend Bank against any and all claims, causes of action or demands arising out of or directly or indirectly related to the duplicate presentment of any Check; and F. Client will not engage in any activity directly or indirectly related to the use of the Remote Deposit Capture Service that is illegal or fraudulent.
XIV. FEES. Client agrees to current fees for requested services. Refer to the Treasury Management Fee Schedule and Business Fee Schedule for the most current fees and charges related to RDC Service and related services. Bank reserves the right to change fees at any time without prior notice.
XV. BANK'S LIABILITY. In addition to any limitations in the Master Agreement, Bank will not be liable to Client for any refusal of a Paying Bank to pay an Image Exchange Item or Substitute Check for any reason (other than the gross negligence or willful misconduct of Bank), including without limitation, that the Original Check, Image Exchange Item or Substitute Check was allegedly unauthorized, was a counterfeit, had been altered, or had a forged signature.
204
TM-0025 Master Treasury Agreement (07/12/22) - Acceptance
ACCEPTANCE OF
TREASURY MANAGEMENT SERVICES
Part I – Certification
New Acceptance
Amendment No. ___________________
to existing Acceptance of Treasury Management Services, original dated: ____________ Name of Primary Entity________________________________________________________ Each amendment to this Acceptance will effectively supersede all prior versions of this Acceptance. Defined terms will have the meaning provided in the Tri Counties Bank Master Treasury Agreement, and applicable Service Description(s), unless otherwise defined herein.
The person(s) signing (“Executing Representative(s)”) this Acceptance of Treasury Management Services (“Acceptance”) on behalf of the company identified in the signature block of this Acceptance (“Client”), certifies on behalf of Client that:
(i) Client agrees to be bound by the Tri Counties Bank Master Treasury Agreement, together with each applicable Service Description, including any Supporting Documents, corresponding exhibits, schedules, enrollments, or attachments to the same, which apply to the services designated by Client in Part II of this Acceptance, and Client’s use of any Service, including without limitation each Service that Client commences using after the Effective Date of this Acceptance, confirms Client’s agreement to be bound by each Service Description relating to that Service; (ii) The Client has received a copy of the Master Agreement together with each Service Description for which a Service has been selected by Client below; and
(iii) The Executing Representative has full authority to execute this Acceptance on behalf of Client, and to enter into other agreements and Supporting Documents for the Services now or hereafter offered by Bank, and to amend, terminate or otherwise act on behalf of Client with respect to each Service used by Client.
Part II – Service Options
DESIGNATION OF MASTER TREASURY SERVICE OPTIONS.
Client designates the following Service options, and acknowledges receipt of the following Service Descriptions (check all that apply):
Online Banking
Wire Transfer
Positive Pay & Account Recon
ACH
Supplement to ACH Service Description:
Third Party Service Provider (Sender)
Remote Deposit Capture
Secure File Transfer
Lockbox
Business Associate Supplement to Lockbox Service
Description
Smart Safe
Courier and Cash Vault
Multiple Party Access
Integrated Payables
Virtual Card
205
TM-0025 Master Treasury Agreement (07/12/22) - Acceptance Part III – Additional Terms and Signatures
Any Client initiated addition, deletion or change to the Acceptance for any Service must be submitted in a form acceptable to Bank, and no such requested addition, deletion or change will become operative or effective until Bank confirms to Client that such addition, deletion or change has been approved by Bank and implemented. Notwithstanding the foregoing, Bank reserves the right to add to, delete or change this Acceptance upon notice to Client.
The Acceptance may be signed in counterparts and transmitted by facsimile. If signed in two or more counterparts, each will be deemed an original, but such counterparts will constitute one instrument. The effectiveness of the Acceptance (or any related document) and any signatures shall, to the extent permitted by applicable law, have the same force and effect as manually-signed originals and shall be binding on all parties hereto. Bank may also require that the Acceptance (or any related document) be confirmed by a manually-signed original thereof; provided, however, that the failure to request or deliver the same shall not limit the effectiveness of any facsimile document or signature.
Agreed To and Accepted (Effective Date”)
CLIENT:
By:
Name:
Title:
CLIENT:
By:
Name:
Title:
CLIENT:
By:
Name:
Title:
CLIENT:
By:
Name:
Title:
TRI COUNTIES BANK
By:
Name:
Title:
206
TRI COUNTIES BANK 1 FEBRUARY 1, 2021 B
Business Deposit Account
Agreement and Disclosures
Effective February 1, 2021
207
TRI COUNTIES BANK 2 FEBRUARY 1, 2021 B
TABLE OF CONTENTS
ACCOUNT OWNERSHIP AND BENEFICIARY DESIGNATION................................................ 5 ACCOUNT STRUCTURE ................................................................................................... 6 ACH AND WIRES ............................................................................................................ 6 ADJUSTMENTS............................................................................................................... 10 AMENDMENTS AND TERMINATION................................................................................. 10 APPROPRIATE ACCOUNT USAGE ..................................................................................... 10 ARBITRATION................................................................................................................. 10 AUTHORIZED SIGNERS ................................................................................................... 11 BUSINESS DAYS ............................................................................................................. 11 CASH REPORTING REQUIREMENT.................................................................................... 12 CHANGE OF ADDRESS OR NAME .................................................................................... 12 CHECK PRINTING........................................................................................................... 12 CHECK PROCESSING ..................................................................................................... 13 CHECKS PRESENTED IN PERSON FOR PAYMENT BY A NON-ACCOUNT HOLDER .................. 13 CHOICE OF LAW............................................................................................................ 14 CLOSING OR SUSPENDING ACCOUNTS........................................................................... 14 COMPLIANCE WITH LAWS, RULES, AND REGULATIONS ..................................................... 15 CONVERTING ACCOUNT AND REVOKING PRIVILEGES ...................................................... 15 CREDIT VERIFICATION..................................................................................................... 16 CUSTOMER IDENTIFICATION NOTICE UNDER THE USA PATRIOT ACT .................................. 16 CUTOFF TIMES............................................................................................................... 17 DEATH OR INCAPACITY .................................................................................................. 17 DEPOSITS AND CREDITS TO ACCOUNTS .......................................................................... 18 DIRECT DEPOSITS........................................................................................................... 20 208
TRI COUNTIES BANK 3 FEBRUARY 1, 2021 B
DISPUTED OWNERSHIP................................................................................................... 20 ELECTRONIC COMMUNICATIONS................................................................................... 21 ESCHEAT NOTICE; DORMANT ACCOUNTS....................................................................... 21 FACSIMILE OR MECHANICAL SIGNATURES ....................................................................... 22 FDIC INSURANCE........................................................................................................... 23 FEES ..................................................................................................................... 23 FORCE MAJEURE ............................................................................................................ 23 FOREIGN CURRENCY AND INSTRUMENTS........................................................................ 24 FUNDS AVAILABILITY POLICY........................................................................................... 24 HEADINGS/TERMS......................................................................................................... 26 INDORSEMENTS ............................................................................................................ 26 JOINT ACCOUNT LIABILITY .............................................................................................. 27 LARGE CASH WITHDRAWALS .......................................................................................... 27 LEGAL PROCESS............................................................................................................. 27 LIMITATION ON LIABILITY; HOLD HARMLESS AND INDEMNITY ........................................... 28 LIMITATION ON TIME TO SUE........................................................................................... 29 LOST/STOLEN/DESTROYED CASHIER’S CHECKS............................................................... 29 LOST ITEMS AND DELAYED RETURNS ............................................................................... 29 MONITORING, RECORDING AND RETAINING................................................................... 29 NOTICES ..................................................................................................................... 30 ORDER OF PAYMENTS .................................................................................................... 31 OTHER AGREEMENTS ..................................................................................................... 31 OVERDRAFT LIABILITY AND RELATED FEES ........................................................................ 32 OVERDRAFT PRACTICES.................................................................................................. 33 POSTDATED, STALE-DATED AND OTHER CHECKS .............................................................. 33 209
TRI COUNTIES BANK 4 FEBRUARY 1, 2021 B
POWER OF ATTORNEY .................................................................................................... 34 PREVENTING FRAUD....................................................................................................... 34 RELATIONSHIP ............................................................................................................... 35 RELEASING ACCOUNT INFORMATION ............................................................................. 35 REMOTELY CREATED CHECK AND ELECTRONIC ITEMS ...................................................... 35 RESERVE ACCOUNT........................................................................................................ 36 RIGHT TO SETOFF........................................................................................................... 36 SAFEGUARDING BLANK AND CANCELLED CHECKS .......................................................... 37 SAMPLE SIGNATURES ..................................................................................................... 37 SECURITY INTEREST........................................................................................................ 37 SEVERABILITY................................................................................................................. 38 SIGNATURES GENERALLY, FORGERIES, MISSING SIGNATURES AND ALTERATIONS................ 38 STATEMENTS ................................................................................................................. 39 STOP PAYMENTS ............................................................................................................ 40 TRANSFER AND ASSIGNMENT......................................................................................... 41 WAIVERS ..................................................................................................................... 41 WITHDRAWALS.............................................................................................................. 41 210
TRI COUNTIES BANK 5 FEBRUARY 1, 2021 B
THIS BUSINESS DEPOSIT ACCOUNT AGREEMENT AND
DISCLOSURES (“AGREEMENT”) EXPLAINS IMPORTANT TERMS
AND CONDITIONS WHICH GOVERN YOUR ACCOUNT(S) WITH US.
PLEASE READ THIS AGREEMENT CAREFULLY AND KEEP IT WITH
YOUR BANKING RECORDS FOR FUTURE REFERENCE.
You agree that your accounts will only be established and used for business and/or commercial purposes, and not for personal, family or household purposes. When you sign our signature card and/or continue to have an account with us, you and each authorized signer on your account(s) effectively agree to this Agreement, together with the Business Fee Schedule and applicable Product and Business Overdraft Privilege disclosures which will be delivered separately.
As used in this Agreement, the words “we,” “our,” “us,” and “Bank” mean Tri Counties Bank and the words “you” and “your” mean the owner(s) of the account(s) and any “agent” appointed by or on behalf of the owner(s) to sign on the account(s) in a representative capacity. Except to the extent otherwise defined herein, the term “business account” shall mean an account that is not primarily established for personal, family or household purposes. The term “consumer account” shall mean an account that is primarily established for personal, family or household purposes. The word “items” as used in this Agreement includes but is not limited to a check, draft, demand draft, preauthorized draft, or other order or instruction for the payment, transfer or withdrawal of funds including a withdrawal slip, deposit slip/adjustment, automatic transfers, electronic transactions, and miscellaneous charges to your Account. An item also means any other document created or authorized in your name that would be a check or draft but for the fact that it has not been signed. Except to the extent otherwise indicated in this Agreement, the term “may” shall mean that you authorize us to take action or not to take action, at our sole discretion without resulting liability to you. Unless it would be inconsistent to do so, words and phrases used in this Agreement should be construed so that the singular includes the plural and the plural includes the singular.
This Agreement applies to all business deposit account(s) you have with us. This Agreement supersedes any previous business deposit account agreement and applicable disclosures with us.
ACCOUNT OWNERSHIP AND BENEFICIARY DESIGNATION
Depending on the form of ownership and beneficiary designation, if any, specified in our account records, we reserve the right to refuse some forms of ownership on any or all accounts. You agree, upon request by us, to provide us with documentation acceptable to us designating each authorized signer with respect to your account(s) and related services.
Please note: Because decisions concerning whether an account should be held in a particular capacity may have significant legal, tax, and estate planning consequences, consultation with your attorney or tax advisor is recommended. 211 TRI COUNTIES BANK 6 FEBRUARY 1, 2021 B
Business accounts may be available to both profit or non-profit businesses and associations.
Corporate, partnership, limited liability or other statutory business entity account – These business accounts are established pursuant to statutory organizational requirements.
Fictitious Business Name Account - If the name in which the account is held is fictitious, the account holder represents he or she has the right to use that name and has fulfilled all legal requirements for using and or doing business under that name.
Organization Account - Such an account is issued in the name of a legal entity, such as a club or league. We reserve the right to require the governing body of the legal entity to give us a separate authorization telling us who is authorized to act on its behalf. We may honor such an authorization until we actually receive written notice of a change from the governing body.
ACCOUNT STRUCTURE
We may structure your account to consist of two sub-accounts to take advantage of an interpretation of federal regulations. The sub-accounts, a checking account, and money market account, will be used to allow for the transfer of funds between the accounts, subject to federal regulations. This structure will occur solely on our books and will not be visible to you, nor will it affect your account in any way. Also, this will not affect the FDIC coverage of your account.
ACH AND WIRES
We offer automated clearing house (ACH) origination and wire transfer services subject to the additional terms of our separate service agreements. From time to time, you may be a party to an ACH entry or a wholesale (wire) funds transfer, which may be credited or debited to your account. Division 11 of the California Commercial Code governs wholesale (wire) funds transfers, as well as non-consumer ACH credit entries and those consumer ACH credit and debit entries that may be excluded from the Electronic Fund Transfer Act and its implementing Regulation E (collectively referred to herein as “payment orders”). The term “payment order(s)” includes payment orders, as defined in Division 11 of the California Commercial Code. We reserve the right to choose any wire transfer system to affect your payment orders.
Provisional Credit. Credit given by us to you with respect to a payment order is provisional until we receive final settlement for such entry through a Federal Reserve Bank. If we do not receive final settlement, you are hereby notified and agree that we are entitled to a refund of the amount credited to your account in connection with the payment order, and the party (the originator of the entry) making payment to you will not be deemed to have paid you the amount of the payment order. Further, we will notify you of the receipt of payments in the periodic account statements we provide you. You acknowledge that we will not give next day notice to you of receipt of a payment order.
212
TRI COUNTIES BANK 7 FEBRUARY 1, 2021 B
Form and Accuracy. All payment orders must be provided to us, which may be required to be in a form prescribed by us, presented either in-person, by facsimile to the number approved by Bank, or secure e-mail to the address approved by Bank. If you will communicate payment orders using our online banking services, all payment orders must also be consistent with the separate agreement.
Accurate Transaction Information. You assume the sole responsibility for providing us with accurate transaction information in the form and format that we require. We are not responsible for confirming such information, or for failing to detect and reject duplicate payment orders. If you provide us with a payment order that is incorrect in any way, you agree that we may charge your account(s) for the transaction whether or not the error could have been detected by us. We are not obligated to detect errors in your transfer or payment instructions. If you fail to include an execution date or a payment date in your payment order, we may treat the payment order as if it called for execution or payment at any time and at our convenience.
Inconsistent Information. We advise you that any receiving financial institution (including us) of a payment order is entitled to rely on any account or bank number you have provided even though that account or bank number may identify a party different from the person or entity you have described by name in any transfer order.
Security Procedures. Notwithstanding anything to the contrary in the Bank’s terms and conditions for specific services, including but not limited to, the BusinessVue Users Terms and Conditions, you agree with us to the use of certain procedures and security devices (referred to individually and collectively, “Security Device(s)”) designed to verify the authenticity of payment orders. In this regard, application of the procedures and Security Devices to authenticate a payment order will be collectively referred to as the “Security Procedures” in this Agreement. If we take any action not provided in the Security Procedures in connection with any payment order, such additional action shall not be deemed to become a mandatory part of the continuing Security Procedures. You understand and agree that we will use the Security Procedures to verify the authenticity of payment orders and that the Security Procedures are not designed to, and are not used for the purpose of, detecting errors in transmission or content of payment orders, including discrepancies between account names and numbers.
Before requesting a payment order to the Bank, you will review the Security Procedures and determine whether the Security Procedures will provide a commercially reasonable method for verifying whether a payment order is yours. As part of the review, you will consider the size, type, and frequency of payment orders you normally make or anticipate making, along with such other factors as you may deem relevant or appropriate.
Commercially Reasonable Procedures. If the size, type or frequency of payment orders made by you change such that the Security Procedures in use by you no longer provide a commercially reasonable method of providing security against unauthorized payment orders, you shall immediately notify us.
Supplemental Security Devices. The Bank may offer to you or require you to use additional authentication tools or methods from time to time. If you choose not 213
TRI COUNTIES BANK 8 FEBRUARY 1, 2021 B
to implement supplemental authentication tools, your access to some or all of the services may be limited. The term “Security Devices” will include any supplemental authentication tools that are used by you. Your continued use of any modified Security Procedures will evidence your agreement that the modified Security Procedures are commercially reasonable for you.
You Are Responsible for Verified Payment Orders, Even if Unauthorized. If we act on a payment order in compliance with the Security Procedures, then you will be obligated on the payment order, and it will be treated as your payment order, whether or not authorized by you.
You Are Responsible for Payment Orders Actually Authorized. Regardless of whether or not we complied with the Security Procedures, any payment order received by us will be treated as yours and will bind you if the payment order is delivered to us directly or indirectly by any Authorized Representative (as defined below), or if you would otherwise be legally bound by the payment order, regardless of whether the payment order was erroneous in any respect or that any loss would have been prevented if we had complied with the Security Procedures.
Safeguarding. You will use and safeguard the Security Devices and Security Procedures. In connection with such safeguarding obligations, you will implement and maintain physical, technical, and administrative controls and procedures sufficient to prevent impermissible or unauthorized access to or use of the ACH and Wire Service, Security Device or Security Procedures. You assume all risks associated with disclosure of any part of the Security Procedures, including a Security Device, to third parties, including employees. You agree to limit disclosures of Security Devices to those third parties, employees or agents you will authorize to access the services on your behalf, or who have a specific need to know.
Sufficient Funds. You agree to maintain sufficient available funds (as determined under our funds availability policy) in your accounts to cover all payment orders and applicable fees, or such higher amounts as we may specify from time to time. You acknowledge that we do not control intermediary financial institutions, including those chosen by us, and that we do not control whether intermediary institutions deduct fees as part of the processing of a wire transfer. If you do not have sufficient or available funds or credit in the payment account, we may charge any account you maintain with us.
Cutoff Time. Same-day payment orders must be received by the Bank’s Wire Department by the cutoff time of 1:00 p.m. Pacific Time, or as described in the Outgoing Wire Transfer Request. A payment order is considered executed when we execute it. If a payment order is received after the cutoff time or on a day that is not a business day, we may process the payment order the following business day.
Delay or Refusal. We may delay or refuse to execute any payment order. We may do so for any reason or for no reason. We may provide notice to you of such delay or refusal, but are not obligated to do so. We may delay or refuse processing of a payment order, for example, if: (A) processing would or may exceed the available funds in your affected account; (B) the payment order is not authenticated to our 214
TRI COUNTIES BANK 9 FEBRUARY 1, 2021 B
satisfaction or we believe the payment order may not have been authorized by you; (C) the payment order contains incorrect, inconsistent, ambiguous, or missing information; (D) processing would or may involve funds which are subject to lien, security interest, claim, hold, dispute, or legal process prohibiting withdrawal; (E) processing would or may cause a violation of any laws or rules applicable to you or to us; (F) for any reason determined by us in our sole discretion; or (G) for any other reason under the Agreement.
Recall, Cancel or Amend. If you inform us that you wish to recall, cancel or amend a payment order after it has been received by us, we may, but will not be required to, use reasonable efforts to assist you to do so; however, we shall not be liable for any loss, cost or expense suffered by you if we do not, or are unable to, amend, cancel or recall a payment order. You hereby agree to indemnify us against any loss, liability, claim or expenses (including legal fees) we may incur in connection with assisting you to recall, cancel or amend a payment order, and you agree to immediately reimburse us for any monies paid by us associated with such losses, liability, claims or expenses incurred.
Foreign Currency Transactions. If you request a payment order in United States Dollars or in a currency other than United States Dollars to a foreign country, we may transfer the payment in the currency of the beneficiary bank’s country at any exchange rate chosen by us. If a payment order is returned, you agree that the exchange rate for conversion of the foreign currency into United States Dollars may differ from that used by us to process the initial payment order.
Confirmation; Duty to Review and Report. We may provide payment order confirmation of advice based on your request and, in any case, we will include the payment orders as part of the account statements provided to you. In addition to any other duties you have in connection with your review of account statements and information from us, you agree to examine the payment order confirmations and monthly account statements promptly upon receipt or availability, whichever occurs first, and to notify us immediately and in no event later than fourteen (14) days after receipt or availability, whichever occurs first, of the advice or statement of the existence of any unauthorized payment orders or payment order errors. Failure to notify us within 14 days shall relieve us of responsibility for unauthorized payment orders or errors that may arise after the 14th day. Failure to notify us within one year shall preclude you asserting the error or unauthorized transactions against us. Notwithstanding the foregoing, we reserve the right to, in our sole discretion, adjust transaction records for good cause after the expiration of said one year period.
Screening. We may screen payment orders that would result in debits or credits to your account for compliance with applicable laws, rules, and regulations. Where we believe a credit to your account may be subject to being blocked or frozen under the Office of Foreign Assets Control (OFAC)-administered sanctions laws of the United States or of sanctions laws of another country, or may be otherwise suspicious or illegal, we may block (or “freeze”) the funds and deny you access to them for a reasonable time sufficient to allow us to resolve the matter.
215
TRI COUNTIES BANK 10 FEBRUARY 1, 2021 B
ADJUSTMENTS
We may make adjustments to your account from time to time. This may be due, for example, to the return of an item you deposited which was unpaid or if a deposit is posted in the wrong amount.
AMENDMENTS AND TERMINATION
We reserve the right to amend, modify, add to, or delete (collectively referred to herein as “change(s)”) the terms or conditions of this Agreement without prior notice to you, except as required by law. Your continued use of a service or an account constitutes your acceptance of the change. Changes may include a deletion, modification, or amendment of an existing term or the addition of a new term not otherwise contemplated when you entered into this Agreement or opened your account(s). Any change will take effect immediately, unless stated otherwise in any notice we make available to you.
When applicable law or regulations require the Bank to notify you of a change, addition or deletion to this Agreement, in which case the Bank may do so by written or electronic means.
APPROPRIATE ACCOUNT USAGE
Do not use a business account as a consumer (personal) account. If you do, it may be reclassified as a consumer account, and we reserve the right to change your business deposit account type to a consumer deposit account type.
ARBITRATION
This provision contains the terms of how a dispute between you and the Bank will be resolved. Please read this provision carefully since it specifically limits your rights in the event of such dispute. By this provision, at the request of you or the Bank, disputes must be resolved by arbitration. Arbitration is a means of having an independent third party resolve a dispute without using the court system. With arbitration, there is no right to appeal the decision of the arbitrator as there is normally in the court system. BY THIS
AGREEMENT YOU UNDERSTAND THAT EACH OF US IS WAIVING THE RIGHT TO A JURY TRIAL OR A TRIAL BEFORE A JUDGE IN A PUBLIC COURT.
Either of us may submit a dispute concerning this Agreement to binding arbitration at any reasonable time, notwithstanding that a lawsuit or other proceeding has been commenced. If either of us fails to submit to binding arbitration following a lawful demand, the one who fails to submit bears all costs and expenses incurred by the other compelling arbitration.
Any controversy or claim arising out of or relating to this Agreement, or the account(s) covered by this Agreement, will be settled by arbitration administered by the American Arbitration Association (“AAA”) in accordance with its arbitration rules when the amount in controversy exceeds the amount subject to jurisdiction in small claims court. 216 TRI COUNTIES BANK 11 FEBRUARY 1, 2021 B
Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction. All statutes of limitation and rules of law that would otherwise be applicable to this Agreement, including those provided in the California Commercial Code, shall apply to any arbitration proceeding.
To the extent that there is any variance between the AAA Rules and this Agreement, this Agreement shall control. Arbitrators must have expertise in the substantive laws applicable to the subject matter of the dispute.
You agree to take all steps, and execute all documents, necessary for the implementation of arbitration proceedings.
This arbitration provision supersedes all prior arrangements and other communications concerning dispute resolution as to this Agreement. In the event more than one arbitration agreement entered into by us is potentially applicable to a dispute, the one most directly related to the account or transaction that is the subject of the dispute shall control.
Nothing in this “Arbitration” Section shall limit the right of any party at any time to exercise self-help remedies, foreclose against collateral, or obtain provisional remedies. The arbitrator shall also determine all issues relating to the applicability, interpretation, and enforceability of this paragraph.
AUTHORIZED SIGNERS
An authorized signer is someone to whom you give all rights you have now or in the future to make withdrawals and deposits, and to otherwise transact on your account and receive account information. Merely by designating an authorized signer you do not give any ownership rights in the account. Any one of the authorized signers may sign checks or withdrawal orders and give us instructions regarding the account, including an instruction to close the account. However, if there is a conflict, we reserve the right to require all authorized signers to sign an item, withdrawal order, or other instruction on the account.
Even if the authorized signers on an account change, we may continue to honor checks, withdrawal orders, and other instructions by authorized signers until we are notified in writing not to do so.
BUSINESS DAYS
For the purpose of this Agreement, our business days are Monday through Friday, excluding Saturdays, Sundays, and federal holidays.
217
TRI COUNTIES BANK 12 FEBRUARY 1, 2021 B
CASH REPORTING REQUIREMENT
The Bank Secrecy Act (“BSA”), a federal law, requires all financial institutions to report currency transactions of more than $10,000 to the Financial Crimes Enforcement Network (“FinCEN”). In addition, we may report to FinCEN multiple cash transactions which together total more than $10,000 in any one day. In order to better comply with the law, we may maintain a log of all sales of Bank checks or drafts, Cashier’s Checks, money orders, gift cards or traveler’s checks for $3,000-$10,000 in currency.
We may also report to FinCEN or other government agency transactions that may be structured to avoid the reporting requirement and other transactions that appear to involve illegal activity. In order to satisfy the BSA’s requirement, we may, and, in many cases, must request certain information about the individual presenting the transaction, as well as the organization or individual for whom the transaction is being conducted. This includes the individual’s/organization’s full name, permanent street address, social security number, identification number (such as a driver’s license or passport), date of birth (if applicable), and business, occupation or professions.
CHANGE OF ADDRESS OR NAME
You agree to notify the Bank in writing of any change of address, including your email address (if provided), or change of name, which will be effective after we have had a reasonable time to react. We may also change the mailing address of record we have for you if we receive an address change notice from the U.S. Postal Service. Each account holder is responsible for submitting their own signed change of address request. The address is changed only for the accounts you specify and does not affect your other account relationships with us unless you specify that you want the address changed for those accounts as well. The Bank is only required to attempt to communicate with you using the address you have provided to the Bank. If you fail to notify us of a change of address, an undeliverable statement fee may be assessed (see Business Fee Schedule for details). If sent statements or other Bank documents are returned indicating an incorrect address, and we are not notified of the new address after 90 days, you authorize us, at our discretion, to block your account until we can verify your correct address.
CHECK PRINTING
We offer checks in a number of styles and at various prices. The cost of any checks purchased through us will be automatically charged to your account. See the Business Fee Schedule. If you create your own checks, or obtain them from someone else, and we cannot accurately verify your signature on an item by comparing it with an item that posted to your account, you are responsible for any losses that may result from our inability to use that check to verify your signature. You agree not to print special limitations on checks, withdrawal orders or other items drawn on your account, such as “void over $100” or “paid in full” or “void after 90 days.” If you do print any special limitations, you agree that we are not bound by such limitations. You authorize us to pay such items without regard to the stated limitation(s). You further agree to indemnify us and hold us harmless for any claims or losses arising out of our refusal to honor said restrictions.
218
TRI COUNTIES BANK 13 FEBRUARY 1, 2021 B
CHECK PROCESSING
We have automated collection and payment procedures. These automated procedures rely primarily on information encoded on each check or item in magnetic ink. In paying or processing an item, we may rely on the information encoded on the check’s magnetic ink character recognition (MICR) line, according to general banking standards, whether or not that information is consistent with the other information on the check. You will reimburse us for any loss or expense we incur because you issue or deposit an item containing altered or extra information in the MICR line. You agree that automated check processing is reasonable and that you have responsibility for preventing and reporting forgeries, alterations, and other unauthorized use of your account. We do not fail to exercise ordinary care by posting or paying checks without sight examination of checks.
We will not be obligated to monitor items deposited to, or drawn against, accounts held by a trustee or other fiduciary to determine whether a trustee or fiduciary is acting consistently with or in breach of any fiduciary duty. When we take an item for processing by automated means, “ordinary care” does not require that we examine each item. “Ordinary care” requires only that we follow standards prevailing in the area in which we are located and that do not vary unreasonably from the general standards followed by similarly-situated financial institutions. A mere clerical error, or an honest mistake, is not considered a failure of the Bank to perform any of our obligations. The Bank’s own policies and procedures are used solely for our internal reasons and do not establish a higher standard of care for the Bank other than that which is provided by law or regulation.
The Bank is not responsible for the neglect, mistake or fault of another financial institution or person, including for the loss or destruction of an item or misrouting of an item in transit or in the possession of others. If a deposited item is lost or misrouted and we gave you provisional credit for that item, you agree that we may charge back the amount of the item to your account if we do not receive payment for the item, even if the item is not timely returned.
CHECKS PRESENTED IN PERSON FOR PAYMENT BY A NON-ACCOUNT HOLDER If an item drawn against your account is presented for payment in person for payment by a payee who is not an account holder of the Bank, the Bank may charge a fee to the person presenting the check as a condition for cashing the check. See the Business Fee Schedule. The Bank may also require identification acceptable to the Bank and not prohibited by law, including a fingerprint of the person presenting the check or other fraud prevention methods. You agree that the Bank may refuse to honor payment for checks presented for payment in person by a non-account holder, if the person refuses to pay the fee or provide the identification requested by the Bank. You agree that none of the foregoing will be deemed to be wrongful dishonor by us. 219
TRI COUNTIES BANK 14 FEBRUARY 1, 2021 B
CHOICE OF LAW
Except as stated herein or as otherwise may be required by applicable law, the provisions of this Agreement are governed by the bylaws of the Bank, federal laws and regulations, the laws and regulations of the State of California (excluding choice of law rules), and applicable local clearinghouse rules, as amended from time to time. In addition, our rights under this Agreement may be limited by laws, rules or regulations; to the extent this is so, this Agreement is modified to the extent needed to prevent representing that a transaction confers or involves rights, remedies, or obligations which we do not have or which are prohibited by law.
CLOSING OR SUSPENDING ACCOUNTS
The Bank may, at any time and in our sole discretion, close or suspend your account or any service we are providing to you. We may do so for cause or without cause. We may deliver the balance after an account is closed by any means chosen by us, including mailing a check for the balance by U.S. Postal Service, sent postage prepaid, to your last address as shown on our records. We may remit the balance by check payable to the name on the account as shown on our records, even if contrary evidence of account ownership has been given to us. We will provide you with notice before or after taking this action, unless prior notice is required by law, in which case we will provide you with such notice as is required by law. For example, we may close your account if your balance falls to zero, without advance notice.
Except to the extent otherwise agreed with us, you may close your account at any time upon notice to us, unless your account has a scheduled maturity date, subject to any applicable early withdrawal penalty. You will remain liable for the payment of accrued fees on the account and for checks in the process of collection, as well as any other obligations relating to actions or inaction prior to account closure. If you close an account, it may be subject to accrued or prorated fees or charges.
You agree to reimburse us immediately upon request for any overdrafts that arise after an account is closed, whether closed by you or by us.
We may honor any account holder’s or authorized signer’s request to close or suspend an account or transaction. At our discretion, we may require the signatures of all account holders and/or authorized signers before permitting the withdrawal of funds or the closing or suspension of an account.
Without limiting any of the foregoing, you authorize us, in our sole discretion, to “freeze” or place a hold on the balance in your account(s) at the Bank if we suspect that there is irregular activity or we receive conflicting instructions involving your account(s).
Should the Bank place a “freeze” on your account(s) to reasonably investigate our concerns, you agree that we shall not be liable to you for any claims you might have, including but not limited to claims of wrongful dishonor.
We may dishonor any check, withdrawal order, item or transaction presented for payment after an account is closed or frozen by you or by us. At our option, we may 220
TRI COUNTIES BANK 15 FEBRUARY 1, 2021 B
honor checks, withdrawal orders, items or transactions after an account is closed or frozen if the transaction was guaranteed by us under any check guarantee program or was part of an electronic fund transfer system, if you fail to place a stop payment order for any outstanding checks or other items or if we otherwise elect to honor the transaction in our discretion. You shall remain responsible and liable for such checks, items, and transactions.
If an interestbearing account is closed for any reason before accrued interest is actually paid, interest may not be paid for the last interest period.
COMPLIANCE WITH LAWS, RULES, AND REGULATIONS
You agree to comply with all laws, rules, and regulations applicable to you, to your activities and to your use of our services. This includes your agreement to comply with (to the extent applicable to you and your actions) federal anti-money laundering laws, sanctions laws administered by the Office of Foreign Assets Control, currency transaction or Bank Secrecy Act reporting and recordkeeping requirements, and any state counterpart of the same. You must inform us about and disclose to us the identity of all persons who have a beneficial interest in you (if you are a non-natural person) and in your transactions.
You represent and warrant that you will not use, and agree not to use, your account or any service we provide to you for any unlawful purpose. For example, you represent, warrant and agree not to accept or make payments in connection with the participation of any person (including yourself) in unlawful Internet gambling. You acknowledge that “restricted transactions” (as defined in the Unlawful Internet Gambling Enforcement Act and its implementing regulations) are prohibited from being processed through your accounts or your relationships with us. We reserve the right to deny transactions or authorization from merchants apparently engaging in the Internet gambling business or identifying themselves through card transaction records or otherwise as engaged in that or any other illegal or improper business. Further, we reserve the right to block or close any account which we believe may be involved in any such restricted transactions.
You represent and warrant that you are not, and you agree to take no action that would result in your being deemed or treated as, a money service business under any applicable state or federal law, except to the extent that you have specifically and in writing previously informed us that you are a money service business.
You covenant, and represent and warrant that the foregoing is true and correct, as of the opening of your account and again each time you make a deposit or withdrawal or otherwise use a service offered by us. You agree to provide us with evidence showing that you are in compliance with the above, reasonably satisfactory to us, upon our request.
CONVERTING ACCOUNT AND REVOKING PRIVILEGES
Without limiting our ability to close your account, we may alternatively convert your account to another type of account or revoke privileges when we consider it 221
TRI COUNTIES BANK 16 FEBRUARY 1, 2021 B
appropriate or necessary to do so. For example, we may revoke privileges, or convert your account to another account type if you make frequent transactions on a money market or savings account, if your account frequently has debits against uncollected funds, if your account has excessive deposit activity or if you use a business account for consumer purposes.
CREDIT VERIFICATION
From time to time we may obtain credit information about you from check or credit reporting agencies and/or other means. We may do so at the time you open an account, request a service, at any time while your account is open, or the service is available, or after your account or service is closed, or as otherwise permitted by law.
For example, new accounts are subject to verification through ChexSystems (the “Reporting Agency”) and may be declined based in whole or in part on information obtained in a report from the Reporting Agency. You have a right under the Fair Credit Reporting Act to know the information contained in your credit file at ChexSystems. If we decline to open an account or otherwise provide deposit services, the Reporting Agency will have played no part in our decision and would be unable to supply specific reasons why we would have denied the account or services. You have a right to a free copy of your report from the Reporting Agency, if you request it no later than 60 days after you receive notice of a declined account or service. In addition, if you find that any information contained in a report received by you is inaccurate or incomplete, you have the right to dispute the matter with the Reporting Agency. The Reporting Agency’s full name, address, and phone number is as follows:
ChexSystems
Attn: Consumer Relations
7805 Hudson Road, Suite 100
Woodbury, MN 55125
Telephone: 1-800-513-7125
As required by law, you are also hereby notified that a negative credit report reflecting on your credit record may be submitted to a credit reporting agency if you fail to fulfill the terms of your obligations, including credit obligations. We may report information about your account to credit bureaus, including ChexSystems. Late payments, missed payments or other defaults on your account may be reflected in your credit report.
CUSTOMER IDENTIFICATION NOTICE UNDER
THE USA PATRIOT ACT
IMPORTANT INFORMATION ABOUT PROCEDURES
FOR OPENING A NEW ACCOUNT
To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account.
222
TRI COUNTIES BANK 17 FEBRUARY 1, 2021 B
What this means to you: When you open an account, we will ask for your name, address, date of birth, tax identification number (TIN) and other information that will allow us to identify you. We may also ask to see a driver’s license or other identifying documents for account owners (and possibly authorized signers).
We may further ask you for specific information regarding the nature of anticipated activity, the sources of your funds, the purposes of transactions, the relationship you have with persons to whom you send funds and persons who send funds to you, the anticipated frequency of such transactions, the ultimate beneficiaries of funds you send and receive, and other questions that may help us clarify the nature and purpose of transactions. We may close accounts if we are unable to understand the purpose of the account, the structure of the organization, the authority of the signers, the documentation provided or the general risk associated with the establishment of the account. We may elect not to disclose the specific reason for our action.
Owners for fiduciaries, partnerships, corporations, and fictitious business names or other business names may also be asked at account opening and from time to time to provide us with valid documentation of trust agreements (or certification of trust), court orders, partnership agreements, certificates of limited partnership, articles of incorporation, and filed fictitious business name statements, in addition to any other documents deemed necessary by us.
CUTOFF TIMES
A number of our services are subject to processing cutoff hours. Communications received after the cutoff time or on a non-business day may, in our discretion, be deemed received as of the next business day. Alternatively, some services may require you to resubmit a communication when it is received after the cutoff hour or on a non-business day. Refer to separate service agreements for applicable cutoff hours, including the BusinessVue Users Terms and Conditions, the Outgoing Wire Transfer Request and ATM service notices. The cutoff time for transactions presented at our branches will vary, based on their hours of operation. The cutoff time is 9:30 p.m.
Pacific Time for transfers between accounts initiated through the Bank’s telephone automated customer service system.
DEATH OR INCAPACITY
You agree to immediately notify us about the death or incapacity of any owner or authorized signer on your account. Until we receive such notice in writing, and have a reasonable opportunity to act on it, we may continue to honor items drawn on your account by the authorized signer(s). We may suspend, refuse, and reverse any transactions or deposits (for example, automatic federal direct deposits of benefit payments belonging to the decedent) if any owner or authorized signer dies or is declared by a court to be incompetent. However, even with knowledge, we may pay checks drawn on the account for ten (10) calendar days after the date of death. Refer to the discussion below regarding the treatment of “Direct Deposits.” 223
TRI COUNTIES BANK 18 FEBRUARY 1, 2021 B
DEPOSITS AND CREDITS TO ACCOUNTS
Deposits and Credits Generally - You authorize us to accept an item for deposit to your account from anyone. We are not required to question the authority of the person making the deposit. Joint accounts include accounts held as joint tenancy, tenancy-in-common or as community property. A joint account holder authorizes the other account holder(s) to indorse items in that person’s name and to cash the items or deposit them into the joint account, with or without an indorsement. You will be responsible for any loss because of your failure to identify your account properly by name and number on any deposit item. We may accept for deposit to your account all items made payable or indorsed by you as an individual payee or joint payee, regardless of whether those items bear your indorsement, subject to our verification and final inspection. You guarantee to us the payment of all such deposited items. All deposits are subject to later verification, adjustment, and collection by us. We may refuse any deposit (whether in cash or by item or other charge) to an account, limit the amount of any deposit, or return all or any part of a deposit to you without prior notice, whether the deposit is attempted to be made by you or anyone else on your behalf. We reserve the right to return to you any item or other charge that we receive for deposit to your account, if we decide not to handle that item or other charge. If we make this decision, we will send a notice by the next business day after we receive it.
You authorize us to present an item again for payment, after it has been returned or dishonored, without telling you that the item was returned unpaid or that we are presenting it again. If we present a returned item again, there is a fee. See the Business Fee Schedule. You also authorize us to process and deliver to you a photocopy or other image of a returned item or other returned item, in lieu of the original, whether it is charged back to your account or automatically presented again, and whether or not the original item is available.
Deposits received at unstaffed facilities will be credited on the day funds are removed, verified, and processed by us. We may delay the verification of large currency and coin deposits until such time as armored transportation to a secure facility is completed, and delay the posting of the deposit to your account until verification and processing is complete. We may pass-through the costs or otherwise charge you a fee for the additional secure logistics that we require. We are not responsible for transactions initiated by mail until we actually receive them. Deposit receipts do not necessarily indicate the correct balance in the account or the amount being deposited. Any credit to an account is subject to final verification, payment, and adjustment by us from time to time. This may be due, for example, to the return of an item you deposited which was unpaid or if a deposit is posted in the wrong amount.
Provisional Credit; Returned and Unpaid Items and Other Credits - Any item or other charge posted for credit to your account, including an item we cash for you, is subject to final payment by the payor or receiving bank (as applicable). If we credit your account for an item or other charge, we may charge back that item or other charge at any time, if we do not receive payment for the item or other charge or if we receive notice that the item or other charge will not be paid. We act as a collection agent for you when we receive an item for deposit or when we cash an item for you, and are not responsible for the negligent actions or inactions of other financial institutions during 224
TRI COUNTIES BANK 19 FEBRUARY 1, 2021 B
the collection process. You assume all risk of loss of an item in transit. You authorize us to reverse any credit given and any interest accrued for an item that is lost in transit or otherwise not paid, and we may recover from any account you maintain with us the funds given to you for a cashed item that is lost in transit or otherwise not paid. You agree that we can notify you of the return as part of the account statement or other communication method (including electronic communication). We reserve the right to charge the applicable account if an item credited to the account is dishonored, returned or not paid even if we have not sent you notice of the dishonor, return or nonpayment. We also reserve the right to charge a dishonored, returned or unpaid item or other charge against the applicable account even if the item or other charge is dishonored or returned late, the dishonor or return does not comply with applicable laws, rules or regulations (including any clearinghouse rules), or we could have made a claim for reimbursement on the item or other charge from the bank on which the item was drawn or from another bank. We may charge a dishonored, returned or unpaid item or other charge against the applicable account even if the charge results in an overdraft. You authorize us to charge your account for the amount of the item and for any returned item fee for each item returned unpaid, even if there is a delay in notifying you or in returning the unpaid item (or photocopy or other image) to you.
You authorize us without notice to you to charge an item back to your account even if you have already used the funds, if we receive an affidavit of forged indorsement or alteration, or similar document, and we have no obligation to investigate the accuracy of such affidavit or similar document. You acknowledge that we may not return an item to you if we cannot recover its full amount from your accounts.
Daily Cutoff Time - All transactions received after our daily cutoff time on a business day, or received on a non-business day, may be treated and recorded as if initiated on the next business day that we are open. The Bank’s daily cutoff times may vary by location. Check with your branch for that branch’s daily cutoff time. If the daily cutoff time is not stated, the cutoff time will be at close of business day of the branch.
Collection Items - Handling an item as a “collection item” means that instead of accepting an item for deposit, we send the item directly to the item issuer’s financial institution for payment. If the item is returned unpaid, we will return the item to you. The fee for this service is disclosed on the Business Fee Schedule. We are obligated only to use ordinary care in collecting items on your behalf. You agree that the Bank has sole discretion to determine whether to accept an item for deposit or collection. If we do credit your account for a collection item, but do not receive final payment for an item or if the item is later returned, we may charge your account for the item plus any interest earned and associated fees. You agree to be responsible for all fees and charges assessed in the collection process as outlined on the Business Fee Schedule. We may notify you that an item is not eligible for a deposit, but rather a collection item, as soon as practicable after we determine to handle the item as a collection item. This may include after you have left a branch, for example. Items drawn on an institution located outside the United States are handled on a collection basis only. Collection items may be credited to your account, however you agree that availability of these funds may be delayed by us until we receive final payment. You waive any notice of nonpayment, dishonor, or protest regarding any items purchased or received by us for credit to your account or for collection. An item or item accepted for collection will not be deemed accepted for deposit for purposes of Regulation CC and is not governed by the Bank’s Funds Availability Policy. 225 TRI COUNTIES BANK 20 FEBRUARY 1, 2021 B
DIRECT DEPOSITS
If, in connection with a direct deposit plan, we deposit or credit any amount in your account which should have been returned to the state or federal government or any other third party for any reason, you authorize us to deduct the amount from your account or from any other account you have with us without prior notice and at any time, except as prohibited by law or regulation. You also authorize us to use any other legal remedy to recover the amount of our liability.
DISPUTED OWNERSHIP
If a dispute arises over control of or access to your account, or if we receive conflicting instructions from you (including any owner, joint account holder, contracting officer and/or other authorized signer on your account), or in the case of a corporate or partnership or association/LLC account, conflicting board resolutions or partnership authorizations or member instructions, we may require, but are not obligated to require, the signatures of all authorized signers on items, withdrawals, or other transactions. We may also, but are not obligated to, “freeze” the account until we get evidence satisfactory to us that either the dispute is resolved or there is general agreement on payment of the funds in the account.
During the time that we require additional signatures or freeze the account, you authorize us to do one or more of the following:
(1) We may ignore any instructions (such as an instruction by one account holder not to honor items or other withdrawal orders by another account holder) that conflict with the terms of the signature card for the account unless all account holders sign the instructions;
(2) We may reverse any debits or credits to the account in dispute, or other accounts with us, to correct what we believe in our sole discretion resulted from action taken to the disadvantage of one account owner, over another; (3) We may return items unpaid, marked “Refer to Maker” or otherwise at our discretion;
(4) We can close the account and issue a single Cashier’s Check for the available account balance jointly payable to all account owners, or to all signatories to the account and we may mail or deliver that check to any one of the account holders or signatories, or to the address of record;
(5) We may commence an action in interpleader, which is giving the disputed funds to a court so that it can decide who has the right to control the funds.
We will not be liable to you for any costs, claims, damages, or other expenses that result from the payment or non-payment of items or other request for payment of the deposited funds. We will charge the account for our costs and expenses (including attorneys’ fees) in commencing an action in interpleader or may seek recovery of such costs and expenses from the funds deposited in the interpleader action;
226
TRI COUNTIES BANK 21 FEBRUARY 1, 2021 B
(6) Continue to pay items and other withdrawals when the instructions to do so are given to us by an owner of the account according to our records; and/or (7) We can take any other action we believe to be reasonable under the circumstances even if the action is not listed here. These actions include but are not limited to any specific procedures that may be applicable under a law or regulation.
You agree to assume all liability for, and you agree to indemnify, defend, and hold us harmless from and against any and all losses, damages, claims, costs or expenses (including attorneys’ fees and costs) incurred by us as a result of any dispute that arises under this Section. In addition to the foregoing rights, you authorize us in our sole discretion to elect to close your accounts pursuant to this Agreement.
ELECTRONIC COMMUNICATIONS
You agree that we may use electronic communication to enter into agreements and contracts between ourselves and you and otherwise to establish terms and conditions for products and services you receive from or through us. Electronic agreements may be provided to you through such things as hyperlinks or “click-through” agreements on our web site. Your consent to or agreement with the electronic communication in these circumstances may occur by your clicking “agreed” or similar terms, or by your subsequent use of a product or service, or otherwise as may be specified in the communication or as provided by law (subject to any limitations set forth in the communication). Your signature and agreement may be obtained by us electronically and includes mouse clicks, key strokes, your use of passwords or other authentication systems, or as is otherwise set forth in the particular electronic communication.
You agree not to contest the authorization for, or validity or enforceability of, our electronic records and documents, or the admissibility of copies thereof, under any applicable law relating to whether certain agreements, files or records are to be in writing or signed by the party to be bound thereby. Records and “signed” documents, if introduced as evidence on paper in any judicial or other proceedings, will be admissible to the same extent and under the same conditions as other documentary business records. Upon our request, you agree to manually sign or place your signature on any paper original of any record or “signed” document which we provide to you containing your purported signature.
ESCHEAT NOTICE; DORMANT ACCOUNTS
The funds in your account may be transferred to the appropriate State if no activity occurs in the account within the time period specified by state law.
We may consider accounts with no activity for a requisite period to be dormant.
We may, but are not obligated to, try to contact you before we classify the account as dormant. A dormant account will continue to be charged a normal Monthly Maintenance Fee or service charge. We may, but are not required to, hold statements on accounts that are in a dormant status until the account has been removed from 227 TRI COUNTIES BANK 22 FEBRUARY 1, 2021 B
dormant status. You authorize us to, at our discretion, refuse to permit withdrawals from an account that has become dormant until we are satisfied that we are dealing with the true owner or authorized signer of the account.
If an account or other property is inactive for more than three (3) years (or other escheat period or as required by escheat law as may apply to the account or property), we may comply with what we in good faith believe to be any legal requirement to turn the balance over to the State of California or to another jurisdiction. To the extent required by law, we will send a notice to your last known address before we turn your account or other property over to the state. A dormant account escheatment fee may be imposed against your account for this notice. Refer to the Business Fee Schedule. If your mail has been returned to us as undeliverable, we may not send you any notice. If you discover that an account of yours has been turned over to the State, you may reclaim your funds by submitting proof of ownership to the State Controller’s office in Sacramento or to such other comparable authority as may be responsible for escheated funds.
FACSIMILE OR MECHANICAL SIGNATURES
Many customers use a facsimile or other mechanical signature, including a stamp, referred to herein as (“facsimile signature”) to authorize transactions, provide and authorize instructions and to indorse or otherwise complete other documents. If you use any form of facsimile signature in connection with any account, you agree to deliver a sample to us before you begin using it, and to execute and deliver agreements in a suitable form, if we so require. If you use a facsimile signature for any of these purposes, you are responsible for any such transactions, instructions or indorsements that appear to us to bear a signature that resembles the signature of a person authorized to sign on your account. When you use a facsimile signature in connection with any account, you agree you shall have the sole responsibility for maintaining security of the facsimile signature or device by which it is affixed, and you shall bear the entire risk for unauthorized use thereof, whether or not you are negligent, except as may be required by law. You agree that we may rely on facsimile signatures that resemble the appropriate original or any signature specimen given to us and that appears to have been made through an authorized medium, regardless of how the facsimile signature came to be placed on the item. We may rely on facsimile signatures, even if they were placed on items without your knowledge or consent. We may pay items bearing facsimile signature, regardless of the persons to whom they are drawn or paid. A facsimile signature that resembles an authorized signer’s signature or any facsimile signature specimen is not considered a forgery or an unauthorized signature, and such a facsimile or automated signature shall be effective as your signature or indorsement, without regard to color variation, whether or not you have been negligent. You further agree to indemnify, defend, and hold us harmless from and against any and all losses, damages, claims, costs or expenses (including attorneys’ fees and costs) incurred by us as a result of the unlawful use, unauthorized use, or misuse by any person of any such facsimile signature or the device by which it is affixed. This means that we are not responsible for any misuse of a facsimile signature we believe you authorized.
228
TRI COUNTIES BANK 23 FEBRUARY 1, 2021 B
FDIC INSURANCE
We are a member of the Federal Deposit Insurance Corporation (FDIC). At this time, the standard deposit insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.
For current information relating to deposit insurance coverage, you may contact the FDIC toll-free at 1-877-275-3342 or visit the FDIC website at www.fdic.gov.
FEES
The fees associated with our business deposit accounts are provided in our Business Fee Schedule. You agree to pay the fees we charge, and you give us the right to collect any fees, as earned, directly from any of your account balances. All fees are subject to change by us at any time. You can get current information about services and fees that apply at any of our branches, by phone through the Customer Service Department at 1-800-922-8742, or on line at www.tricountiesbank.com.
FORCE MAJEURE
Notwithstanding any other provisions of the Agreement, the Bank shall not have any responsibility or liability for any failure, error, malfunction or any delay in carrying out any of its obligations under the Agreement if such failure, error, malfunction or delay results from events due to any cause beyond its reasonable control, including, without limitation, unavailability of any communications system, sabotage, fire, flood, explosion, acts of God, civil commotion, strikes, stoppages of labor or industrial action of any kind, riots, insurrection, war or acts of government, power or equipment failure (including that of any common carrier, transmission line or software), emergency conditions, adverse weather conditions or any other factor, medium, instrumentality, condition or cause not in the Bank’s control. We will not be liable or responsible for the acts or omissions of any other financial institution or any third party or for any inaccuracy or omission in a notice or communication received by the Bank from you, your agents, your authorized signers, other financial institutions, or any other third party. In addition, we shall be excused from failing to transmit, or delaying the transmission of, any transaction, if such transmittal would result in our having exceeded any limitation upon its intra-day net funds position established pursuant to present or future FRB guidelines or in our otherwise violating any provision of any present or future risk control program of the FRB or any rule or regulation of any other U.S. governmental regulatory authority.
The Bank shall not be liable for any failure to perform any of its obligations under the Agreement if such performance would result in it being in breach of any law, regulation, requirement or provision of any government, government agency, banking or taxation authority in accordance with which the Bank is required to act, as shall be determined in our sole discretion.
229
TRI COUNTIES BANK 24 FEBRUARY 1, 2021 B
FOREIGN CURRENCY AND INSTRUMENTS
You may not write items or other withdrawal orders on your account which order payment in a foreign currency.
The processing and collection of foreign instruments are not subject to United States laws and regulations. We may refuse to accept for deposit or collection an item that is payable in a currency other than United States Dollars or that is drawn on a bank or a branch of a bank located outside of the United States (a “foreign instrument”). If we accept a foreign instrument for deposit or collection, you bear all the risks associated with the collection process and foreign currency fluctuation (exchange rate risk). A foreign instrument may be returned unpaid much later (sometimes several months after we process the foreign instrument) than instruments that are drawn on banks located in the United States. You bear all the risks of a late return. We may decide not to credit a foreign instrument to your account until we receive the proceeds in cleared funds from the paying bank. If we do provide credit, such credit is provisional and we may reverse the credit at any time if the foreign instruments is returned unpaid or is initially paid but then subsequently returned for fraud or any other reason. You agree that we may use the current exchange rate and we may charge your account for the full value of the foreign instruments, including any applicable fees, which may result in a loss to you.
You are responsible for all fees incurred including exchange rate, our collection fee, and other charges assessed by the payor bank. You understand that foreign instruments sent for collection are sent solely for you and at your risk and that we are not liable for any event in the collection process which is beyond our control including a default by any banks or agents involved in the collection process or for loss of the foreign instrument in transit.
FUNDS AVAILABILITY POLICY
Your Ability To Withdraw Funds
Our policy is to make funds from your cash and check deposits available to you on the first business day after the day we receive your deposit. Electronic direct deposits will be available on the day we receive the deposit. Once they are available, you can withdraw the funds in cash, and we will use the funds to pay checks that you have written.
For determining the availability of your deposits, every day is a business day, except Saturdays, Sundays, and federal holidays. If you make a deposit before the closing time for the branch on a business day that we are open, we will consider that day to be the day of your deposit. However, if you make a deposit after the closing time of the branch, through or on a day we are not open, we will consider that the deposit was made on the next business day we are open.
Longer Delays May Apply
In some cases, we will not make all of the funds that you deposit by check available to you on the first business day after the day of your deposit. Depending on the type of 230
TRI COUNTIES BANK 25 FEBRUARY 1, 2021 B
check that you deposit, funds may not be available until the second business day after the day of your deposit. The first $225 of your deposits, however, may be available on the first business day.
If we are not going to make all of the funds from your deposit available on the first business day, we will notify you at the time you make your deposit. We will also tell you when the funds will be available. If your deposit is not made directly to one of our employees, or if we decide to take this action after you have left the premises, we will send you the notice by the next business day after we receive your deposit.
If you will need the funds from a deposit right away, you should ask us when the funds will be available;
In addition, funds you deposit by check may be delayed for a longer period under the following circumstances:
• We believe a check you deposit will not be paid;
• You deposit checks totaling more than $5,525 on any one day; • You redeposit a check that has been returned unpaid;
• You have overdrawn your account repeatedly in the last six months; or • There is an emergency, such as failure of computer or communications equipment.
We will notify you if we delay your ability to withdraw funds for any of these reasons, and we will tell you when the funds will be available. They will generally be available no later than the seventh business day after the day of your deposit.
Special Rules for New Accounts
If you are a new customer, the following special rules will apply during the first 30 days your account is open.
Funds from electronic direct deposits to your account will be available on the day we receive the deposit. Funds from deposits of cash, wire transfers, and the first $5,525 of a day’s total deposits of cashier’s, certified, teller’s, traveler’s, and federal, state, and local government checks will be available on the first business day after the day of your deposit if the deposit meets certain conditions. For example, the checks must be payable to you (and you may have to use a special deposit slip). The excess over $5,525 will be available on the ninth business day after the day of your deposit. If your deposit of these checks (other than a U.S. Treasury check) is not made in person to one of our employees, the first $5,525 will not be available until the second business day after the day of your deposit.
Funds from all other check deposits will be available on the ninth business day after the day of your deposit.
231
TRI COUNTIES BANK 26 FEBRUARY 1, 2021 B
Holds on Other Funds (Check Cashing)
If we cash a check for you that is drawn on another bank, we may withhold the availability of a corresponding amount of funds that are already in your account.
Those funds will be available at the time funds from the check we cashed would have been available if you had deposited it.
Holds on Other Funds (Other Account)
If we accept for deposit a check that is drawn on another bank, we may make funds from the deposit available for withdrawal immediately but delay your availability to withdraw a corresponding amount of funds that you have on deposit in another account with us. The funds in the other account would then not be available for withdrawal until the time periods that are described elsewhere in this disclosure for the type of check that you deposited.
HEADINGS/TERMS
The headings in this Agreement are for convenience only and are not part of these terms.
INDORSEMENTS
You warrant that all indorsements on items deposited to your account are genuine and further warrant that you are authorized to negotiate and/or deposit any items that contain no indorsements. We are authorized to supply your indorsement to any item taken for collection, payment, or deposit to your account. Also, we are authorized to collect any unindorsed item made payable to you without first supplying your indorsement, provided the item was deposited to your account, but may, at our option, require your personal indorsement prior to accepting an item for deposit.
We may require that each payee personally indorse any items, including government checks, insurance company items, or other special types of items. You agree to indemnify, defend, and hold us harmless from and against any and all losses, damages, claims, costs or expenses (including attorneys’ fees and costs) incurred by us in connection with your failure to indorse an item exactly as it is drawn or for any item that is alleged to have a forged, missing or unauthorized indorsement.
We are not bound by any restrictions you make on the face of an item or in the indorsement of any items unless we agree in writing to them.
We reserve the right to refuse items that bear or require more than one indorsement, including the indorsements of individuals who are not known to us. If you wish to deposit or cash an item which has been previously indorsed by one or more individuals, we reserve the right to require all indorsers to be present before we accept the item or to require that their indorsements be guaranteed by their financial institution.
To the extent legally permitted, each co-owner of an account appoints the other coowner as his or her attorney-in-fact with full power to indorse the name of any co-owner 232
TRI COUNTIES BANK 27 FEBRUARY 1, 2021 B
on any item for deposit, or to deposit without indorsement any such item, into the account or cash the item.
JOINT ACCOUNT LIABILITY
If your account is a joint account, any one of the account holders may, without notice to the other account holders, initiate withdrawals or close the account, and, in the case of checking accounts, write items against the account or request stop payment.
Each joint account holder is jointly and severally liable to us for any and all overdrafts to the account.
LARGE CASH WITHDRAWALS
We may require reasonable advance notice for large cash withdrawals. We may also refuse to honor a request to withdraw funds in cash from your account or to cash an item (including a Cashier’s Check or other official item) at a branch if we believe that the amount is unreasonably large or that honoring the request would cause us an undue hardship or security risk. We may require that such withdrawals be made at one of our cash vault facilities by an armored courier, acceptable to us and at your sole risk and expense. We are not responsible for providing for your security in such transactions.
Rather than permitting a large cash withdrawal, we reserve the right instead to provide you with a Cashier’s Check for the amount requested.
LEGAL PROCESS
You authorize us to accept and act on any legal process that we believe to be valid without any liability by us to you, whether served in person, by mail, by facsimile transmission or electronic communication, and whether at locations other than the branch or office at which the account, property, or records are held or in one state for property or records held in another state. “Legal process” includes a subpoena, restraining order, injunction, writ of attachment or execution, levy, garnishment, or other legal order relating to you or your account. If we are permitted, we will use good faith efforts to send you notice of any legal process received by us, but this Agreement does not require us to do so.
If we receive legal process against your account which requires us to attach, garnish or turn over your funds, and you do not have enough funds in the account to cover the legal process, we may return items or other items presented against your account the previous business day and apply the funds to satisfy the conditions of the legal process.
If any legal process directs us to attach, garnish or turn over funds or other property, then, depending on the type of order, we either immediately deliver the funds or property or hold them for a legally permitted period. We do not pay interest on the funds during the period we hold them. If we use funds from a time deposit account, we may impose an early withdrawal penalty.
You authorize us to charge your account a legal process fee for each order. See the Business Fee Schedule. You agree to pay our fees and expenses for research and 233
TRI COUNTIES BANK 28 FEBRUARY 1, 2021 B
copying of documents and all other expenses, including administrative expenses, we incur in responding to any legal process related to your account. These may include attorneys’ fees. You authorize us to deduct these fees and expenses from any of your account(s) without prior notice to you.
Any legal process requiring us to attach, garnish or turn over your funds shall be subject to the Bank’s right of setoff and security interest in the account. We are not liable to you for not paying items because we have withdrawn funds from your account or in any way restricted your access to funds because of a legal process or our setoff.
LIMITATION ON LIABILITY; HOLD HARMLESS AND INDEMNITY
Except as otherwise stated in this Agreement or as specified by applicable law, we will be liable to you only for damages arising directly from our intentional misconduct or gross negligence. “Ordinary care” requires only that we follow standards that do not vary unreasonably from the general standards followed by similarly situated banks. Our policies and procedures are general internal guidelines for our use and do not establish a higher standard of care for us that is otherwise established by the laws governing your account. A mere clerical error or an honest mistake will not be considered a failure by us to perform any of our obligations.
Except to the extent limited by applicable law, we are not liable for loss, damage, harm or expense (“Loss”) from: (a) any inaccuracy, act or failure to act of any person not within our reasonable control; (b) the failure of other financial institutions to accept or perform in connection with items or other charges; or (c) your negligence or breach of this Agreement.
Our liability for any act or failure to act is limited to your direct Loss (and interest on that loss, if required by law, at the average Federal Funds rate at the Federal Reserve Bank of New York for the period). Except if specifically imposed by statute that cannot be waived between parties, WE ARE NOT LIABLE FOR CONSEQUENTIAL, INDIRECT, INCIDENTAL, PUNITIVE OR SPECIAL DAMAGES, such as loss or damage from subsequent wrongful dishonor from our acts or omissions, even if we are aware of the possibility of the same.
In addition to any other rights we may have under this Agreement or any related agreement, or at law or in equity, and except as expressly limited by applicable law or regulation, you agree that you will indemnify, defend, and hold harmless the Bank and our directors, officers, shareholders, employees and agents, against any and all third party suits, proceedings, claims, demands, causes of action, damages, expenses (including reasonable attorneys’ fees and other legal expenses), liabilities and other losses (“Indemnified Losses”) that result from or arise out of: (a) the wrongful acts or omissions of you, or any person acting on your behalf (including without limitation your processor, if any), in connection with your use of your accounts or services we offer to you, including, without limitation: (i) the breach by you of any provision, representation or warranty; (ii) the negligence or willful misconduct (whether by act or omission) of you, your customers, your processor (if any) or any third party on behalf of you; (iii) any misuse of the account or services by you, or any third party within the control or acting on behalf of you; or (iv) the failure by you to comply with applicable 234
TRI COUNTIES BANK 29 FEBRUARY 1, 2021 B
state and federal laws and regulations applicable to you; (b) any act or omission of ours that is in accordance with this Agreement or instructions from you; (c) actions by third parties, such as the introduction of a virus that delay, alter or corrupt the transmission of information to us; or (d) any loss or corruption of data in transit from you or your processor to us.
LIMITATION ON TIME TO SUE
Unless a shorter time is prescribed in another provision of this Agreement, an action or proceeding by you to enforce an obligation, duty, or right arising under this Agreement or under applicable law with respect to your account must be commenced within one year after the cause of action accrues.
LOST/STOLEN/DESTROYED CASHIER’S CHECKS
You do not automatically have the right to stop payment on Cashier’s Checks you purchase from us. If a Cashier’s Check is lost, stolen or destroyed, please contact us for the procedures to obtain reimbursement or have the Cashier’s Check reissued. In general, you must complete a declaration of loss form describing the Cashier’s Checks and how it was lost, stolen or destroyed. We will then wait ninety (90) days from the date the check was issued before we pay your claim. If ninety (90) days has already passed, we will act on your claim within a reasonable time. If the check is presented during the ninety (90) day waiting period, we may pay the item to a person entitled to enforce the check. If this happens, we will not pay your claim.
If we determine that any such instrument is presented by or on behalf of a person who may be a holder in due course or who may otherwise have the right to obtain payment of the Cashier’s Check from the Bank, we may, without notice to you, pay the Cashier’s Check, even though you may have paid us a fee to not honor the Cashier’s Check.
LOST ITEMS AND DELAYED RETURNS
We act only as a collection agent for you when we receive an item for deposit or which we cash for you. If that item is lost, stolen or destroyed in the process of collection, we may reverse the credit for any deposit or charge your account for the cashed item.
You are responsible for the condition of an item when you issue it, or present it for deposit to your account. If an item is returned or payment is delayed as a result of any writing or marking that you or a third party placed on the front or back of the item, you will be responsible for any costs or liabilities incurred as a result.
MONITORING, RECORDING AND RETAINING
You authorize us (but we are not obligated) to monitor, record electronically and retain telephone conversations and electronic communications between you (including your purported authorized representatives) and us. Accordingly, you agree on behalf of yourself, and your employees and agents that we may monitor and record your 235
TRI COUNTIES BANK 30 FEBRUARY 1, 2021 B
telephone and electronic communications in connection with your account at any time, without further notice. You agree that we may produce the telephonic or electronic recordings or computer records as evidence in any proceedings brought in connection with the Agreement, and you hereby acknowledge the validity and enforceability of such telephonic or electronic recordings.
NOTICES
Except as otherwise provided in this Agreement, all notices and other communications by you to us shall be in writing and, addressed to:
Tri Counties Bank
PO Box 909
Chico, California 95927
or at such other address as we may specify in writing. Notices and communications to you may be mailed or made available to you electronically at the statement, email or mailing address shown for you in our records, or at our website. Any notice or communication sent or made available by us to you will be deemed given and effective when sent or otherwise made available to you, or as otherwise stated in the notice or communication. Certain notices and communications may be provided to you by telephone, facsimile or other electronic transmission at the telephone number, facsimile number or other location or number as shown in our records.
Any notice, instruction, or other communication sent by you to us will be effective when we have actually received and have had a reasonable time to act on the notice, instruction, or other communication. Notwithstanding anything to the contrary herein, we may rely on all notices, instructions, and other communications sent to us via facsimile or electronic transmission as though they are originals. Without limiting the foregoing, we are entitled to rely on any notice, instruction, or other communication believed by us in good faith to be genuine or to have been signed or authorized by your authorized representative.
If there are multiple authorized signers, we may send or make available communications to any one or more of them (unless otherwise agreed by us). You assume the risk of loss in the mail or in electronic transit.
If we hold Bank mail for you and a statement or other communication is not picked up within 30 days, we may send it to you at the address shown in our account records or destroy it. If a statement and/or notice is returned to us by the Postal Service for any reason, we may hold subsequent statements and notices of every kind until we receive forwarding information from you.
236
TRI COUNTIES BANK 31 FEBRUARY 1, 2021 B
ORDER OF PAYMENTS
The order in which we pay your checks and any other transactions is important if there is not enough money in your account to pay all of the transactions presented on one day.
In the normal course of business, we generally post transactions presented on a single banking day in the following order:
1) All credits/deposits
2) Cash paid items--checks you have written that are cashed in person at a Bank branch.
3) Debit card point-of-sale transactions and ATM withdrawals will be debited in the order received.
4) Electronic debits through Online Banking, Mobile Banking, Cash Management or the 24 hour automated customer service.
5) Electronically-converted checks and Automated Clearing House (ACH) transactions including electronic BillPay payments.
6) Checks (including paper BillPay payments) will be debited in check number sequence. This means that the check with the LOWEST check number will be paid FIRST and then the remaining checks will be paid in sequence to the highest check number.
We reserve the right to change the payment order of items without notice to you if we suspect fraud or possible illegal activity affecting your account. Also, please be aware that the order in which we pay transactions may create multiple overdrafts during a single banking day. For more information on overdrafts, refer to the section below, “Overdraft Practices.”
There is no particular order of payment that is favorable to you in every instance. There are advantages and disadvantages for any order of payment. In some cases your more important transactions (which may be those with higher dollar amounts) may get paid later in this sequence or may not be paid at all depending upon your account balance and the available Overdraft Privilege limit assigned to your account, (if applicable).
Using this sequencing method is our way of trying to be neutral.
OTHER AGREEMENTS
You may have other written agreements with us which, by their terms, supersede this Agreement in whole or in part.
237
TRI COUNTIES BANK 32 FEBRUARY 1, 2021 B
OVERDRAFT LIABILITY AND RELATED FEES
We have no liability to you for rejecting some checks or other charges and paying others, or otherwise processing a transaction when your account is overdrawn, even if:
• The check or other charge that we choose to pay is payable to us; or • Your account is overdrawn due to Bank charges.
Each account owner is jointly and severally responsible for paying all overdraft amounts created by any authorized signers, regardless of whether the account owner authorized the check or other charge or received any benefit from the check or other charge. If you receive from the federal government or a state government, electronic deposits to your checking account of statutorily protected federal or state benefits and you do not want us to deduct from those funds the amount your account is overdrawn and any related overdraft fees, please contact us at 1-800-922-8742. If you wish to pay the amount your account is overdrawn and the related overdraft fees separately, you may do so at one of our branches.
If we pay an item or other charge, cash a check for you, or process a transaction, and the amount we pay or process is more than the available balance in the account on which it is drawn, we may hold balances in other accounts of yours, up to the amount we have paid until we have received final payment for the check we paid or the transaction we processed.
Unless otherwise agreed between you and us, if we pay checks or other charges by overdrawing your account, we are not obligated to continue paying your overdrafts in the future. We may stop paying overdrafts without notice to you. If we pay your check or other charge against nonsufficient funds, you must deposit enough to cover your overdraft and any Bank fees or charges. You will be required to pay for any costs of collection (including attorneys’ fees) that we incur in recovering from you.
Non-Sufficient Funds (NSF) or Uncollected Funds (UCF) Fee - Without limiting any other provision of this Agreement, if you have no overdraft coverage (meaning you are not enrolled in one or more of the overdraft products or services described below), typically your overdraft transactions will be returned, rejected or declined rather than paid. Subject to the “Force Pay Transactions” described below, if you have no overdraft coverage, typically the following will happen:
• Your everyday debit card transactions or ATM transactions will be declined rather than paid. We do not charge a fee for declining your debit card or ATM transactions. Typically, merchants also do not charge a fee for declined ATM or everyday debit card transactions.
You will simply need to arrange for an alternative form of payment. • Your checks, ACH transactions, recurring debit card transactions and other transactions made using your checking account number will be returned or rejected rather than paid.
Please see the Business Fee Schedule for the current fee for returned checks or ACH transactions. Some merchants may also assess a returned check fee, of which we have no control, but you should see a warning from the merchants on their returned check policy. 238
TRI COUNTIES BANK 33 FEBRUARY 1, 2021 B
Force Pay Transactions. There may be instances where we will pay a transaction even if you do not have sufficient funds in your account to cover the transaction and no overdraft coverage. These transactions can occur, for example, when an ATM transaction or everyday debit card transaction is approved but later other transactions reduce the balance in your account before your ATM transaction or everyday debit card transaction is posted to your account. Under these circumstances, we will still pay (or “force pay”) the transaction and you will NOT be charged a fee.
There may also be instances where the Bank will force pay a recurring debit card transaction. This would also occur if, for example, the recurring debit card transaction is approved, but later other transactions reduce the balance in your account before your recurring debit card transaction is posted to your account. Under these circumstances, we will force pay the transaction and you will NOT be charged a fee.
Although this represents the Bank’s policy with respect to Force Pay Transactions, it is more likely than not that if you have no overdraft coverage, your transactions will be returned, rejected or declined as described above rather than force paid.
OVERDRAFT PRACTICES
We offer different overdraft protection options: Linked Deposit Account, Automatic Cash Reserve and Overdraft Privilege.
(1) Linked Deposit Account allows you to link your Tri Counties Bank accounts as a form of overdraft protection. For the fees and other terms that apply to Linked Deposit Account, please refer to the Linked Deposit Account and Automatic Cash Reserve Disclosure and the Linked Deposit Accounts Authorization. (2) Automatic Cash Reserve (ACR). We also offer ACR as an overdraft protection option.
This is a line of credit for which you must apply and is subject to credit approval. This is not a commitment to lend. Other restrictions apply. Call us at 1-800-922-8742 for more information and to obtain an application.
(3) Overdraft Privilege is our automated discretionary overdraft service. For the fees and other terms that apply to Overdraft Privilege, please refer to the Business Overdraft Privilege Disclosure.
POSTDATED, STALE-DATED AND OTHER CHECKS
Processing checks is a highly automated service, and we use commercially reasonable efforts to process them. We may pay checks drawn on an account even if one or more of the following are true: the check is dated after the date we pay it; the check is presented to us for payment more than six months after the date on the check; a stop payment previously requested has expired; the check contains language that purports to make it void before the time it was paid; or the check contains other language that purports to establish conditions under which it may be paid.
239
TRI COUNTIES BANK 34 FEBRUARY 1, 2021 B
We are not obligated to, but may at our option, pay a check, other than a certified check, presented for payment that is postdated. A postdated check is one which bears a date later than the date on which the check is written. We may properly pay and charge your account for a postdated check even though payment was made before the date of the check, unless we have received written notice of the postdating in time to have a reasonable opportunity to act. If you do not want us to pay a postdated check, you must place a stop payment order on the check in the manner we have described elsewhere.
Upon presentment of an item for payment more than six (6) months after its date, you agree that we may, in our sole discretion and without notice or inquiry to you, charge your account for the item. However, we are not obligated to do so. You agree that our obligation of good faith does not require us to make any inquiry of you or require us to give you notice prior to the payment of an item more than six (6) months after its date.
Our payment of the item will be in good faith absent written notice from you in the form of a timely received stop payment order. If you want to ensure that we do not pay a stale-dated item, you should place a stop payment order on the item.
POWER OF ATTORNEY
Under certain types of account ownership, you may authorize another person as your agent and attorney-in-fact to act on the account (“agent”). You shall be bound by and responsible for the actions of your agent, even if the agency relationship is not indicated on the item, withdrawal order or other instruction. Prior to accepting the authority of your agent, we may require the appointment to be in a form satisfactory to us. Unless prohibited by law, we may reasonably refuse to honor a power of attorney or agency that you grant to others for any reason. We may require you or your agent to present the original form. In some cases, we may require that the agent confirm in an affidavit that the powers have not been revoked or terminated. We may continue to rely on the instructions and actions of your agent until we receive written notice in accordance with applicable law and this Agreement that the agent’s authority has been terminated, and we have had time to act upon it. You must tell us of any changes involving the power of attorney. We will not be liable to you or anyone else if we, in good faith and without actual knowledge that the power of attorney is deficient or has terminated for any reason, act on the written instructions of your attorney-in fact. We may charge you a Legal Document Review fee to cover our costs to review any power of attorney document other than the form we provide.
PREVENTING FRAUD
To help you protect your account, you should consider using some or all of the following preventative measures: reconciling your statements as you receive them, watching for out-of-sequence checks and checks made payable to cash, and reviewing your transaction activity for unexpected fluctuations. Business customers should consider assigning responsibilities for opening mail, reconciling bank statements, and issuing checks to different individuals. Do a thorough background check on agents, bookkeepers, accountants or other employees who may be handling any part of your banking and/or who have access to your confidential records. You must contact us immediately if you discover any irregularities. 240
TRI COUNTIES BANK 35 FEBRUARY 1, 2021 B
You should be cautious about giving someone your account number. If you give your account number to a third person and authorize that third person to initiate one or more transactions on your account, you may be liable for all transactions initiated by the third person even if you did not intend to authorize a particular transaction.
Positive Pay is an additional fraud prevention service offered by the Bank for an additional fee. See the Business Fee Schedule. This service allows the business customer to transmit a list of checks that are written on their account to the Bank. The bank, in turn, compares the list to incoming items presented for payment.
RELATIONSHIP
Our relationship with you concerning your account(s) is that of debtor and creditor. No fiduciary, quasi-fiduciary or similar special relationship exists between yourselves and us.
RELEASING ACCOUNT INFORMATION
You authorize us to release information regarding the current status and history of your account to others. For example, we may release information: (1) where it is necessary or helpful to complete a transaction; (2) to verify the existence and condition of your account for a third party, such as a merchant or another financial institution; (3) to comply with the law or a court order; (4) when an inquiry is made regarding whether your account has sufficient funds to cover an item drawn on your account; (5) with your authorization; (6) for other legitimate business purposes; (7) as otherwise permitted by law.
The Bank, from time to time, enters into agreements with third parties to provide bankrelated services for the Bank. The services provided by the third parties may include check processing services, data processing services or other bank-related services. You authorize us to release information regarding your account to such third party service providers in connection with the service providers providing bank-related services for the Bank.
REMOTELY CREATED CHECK AND ELECTRONIC ITEMS
A remotely created check is a document not signed by the customer that is created by a third party under the purported authority of the customer for the purpose of charging the customer’s account with a financial institution. A remotely created check is also known as a demand draft. A remotely created check must contain the customer’s account number and may contain the customer’s printed or typewritten name, a notation that the customer authorized the draft, or the statement “no signature required” or words to that effect.
If you voluntarily give information about your account (such as our routing number and your account number) to someone and authorize them to draw against your account, we may charge your account and pay any items, including remotely created checks initiated by the person to whom you gave the information. You also agree that we may pay an electronically created item even though the item was not created from an 241
TRI COUNTIES BANK 36 FEBRUARY 1, 2021 B
original paper check, whether presented in the form of a remotely created check or an electronic item. You authorize us to continue to honor items or debits from a payee previously authorized by you, until you instruct us to cease to do so, whether or not the payee is acting within the scope of your initial authorization, subject only to such liability as may be imposed upon us by law. If you want us to stop honoring items from a payee previously authorized by you, you must tell us in writing. Until you notify us that such items are not authorized, we can continue to pay them and will not be liable to you even though the items are not in accordance with any authorization you may have given.
This does not, however, obligate us to honor remotely created checks or similar items or entries. We may refuse to honor remotely created checks or similar items or entries without cause or prior notice, whether or not we have honored or dishonored similar items or entries previously.
You agree that we are under no obligation to verify whether the name and account number shown on the remotely created checks are accurate. If any information on a remotely created checks is incomplete, inaccurate, or in error, you agree that we may, at our sole discretion, either pay the remotely created checks and charge your account for the item as drawn or refuse to honor the remotely created checks and, without prior notice to you, return the item unpaid. You further agree to indemnify and hold the Bank harmless for losses resulting from our honoring or dishonoring any such debit.
RESERVE ACCOUNT
You agree that you will, if requested by us at any time, establish one or more reserve accounts to be maintained with us in type (including time deposits) and amount satisfactory to us, to serve as collateral for and to secure your obligations to us under the Agreement.
We may restrict or prohibit your access to any reserve account(s) and the funds on deposit in them, and we may hold such accounts following termination of the Agreement for a period of time sufficient to protect us against loss. We may increase or decrease the required reserve account amount from time to time, upon notice to you and you agree to provide immediately available funds to cover a reserve amount requested by us. In addition, we may transfer funds from another account of yours, or use funds payable to you or owed by us to you under the Agreement, and credit such funds to a reserve account if a deficiency exists between the available funds in your reserve account(s) and the amounts specified by us as the required reserve amount.
RIGHT TO SETOFF
Subject to applicable law, we may, but are not obligated to, use the funds in your accounts to pay any due and payable debt(s) and obligation(s) that you owe us which are not paid when due. This is referred to as a “setoff.” If we exercise this right of setoff, we shall comply with all applicable laws. We will notify you promptly of the action taken. Generally, you agree that all sums in deposit accounts will be subject to our right of setoff for liabilities owed to us by any one or more of the account owners, including any other person who is a joint account owner; or any partnership of which you are a general partner; or any other person or entity with whom you are a co-obligor, or have agreed to act as surety or guarantor, or for whose debts you are 242 TRI COUNTIES BANK 37 FEBRUARY 1, 2021 B
liable or may be contingently liable. You authorize us to use account funds to pay your debts and obligations to us even if the setoff results in an early withdrawal penalty or the dishonor of items. If your account is a checking or money market account and if we exercise our right of setoff, our duty to pay any items presented for payment on your account during the business day preceding the day on which the setoff occurs may be terminated, and you agree that we may return those items unpaid. If we do return items, we also will charge you a non-sufficient funds fee for each returned item.
See the Business Fee Schedule.
If the debt arises from a note, “any due and payable debt” includes the total amount of which we are entitled to demand payment under the terms of the note at the time we charge the account, including any balances for which we properly accelerated the due date under the note.
We will not be liable for the dishonor of any item or draft when the dishonor occurs because we charge and deduct an amount you owe us from your account. You agree to hold us harmless from any claim arising as a result of our exercise of our right to repayment.
This right of setoff does not apply to this account if: (a) it is an IRA or a tax-deferred retirement account; (b) the debt is created by a consumer credit transaction under a credit card plan; or (c) the debtor’s right of withdrawal only arises in a representative capacity.
SAFEGUARDING BLANK AND CANCELLED CHECKS
You agree to safeguard your blank and cancelled checks and to take reasonable steps to prevent unauthorized access to or use of your checks. This means that you will store them under proper control in a secured, locked location accessible only to authorized signers. You further agree to notify us immediately if one or more of your blank checks are lost or stolen. You agree to accept all responsibility for any failure to safeguard your blank checks.
SAMPLE SIGNATURES
To determine the authenticity of your signature, we may refer to the signature card or to an item or other document upon which your signature appears. We may use an automated process to reproduce and retain your signature from an item based on the format and other attributes of checks we offer to customers.
SECURITY INTEREST
You grant us a security interest in your accounts to secure the repayment of any obligation that you incur under the Agreement. The security interest provided under the Agreement is in addition to any other security interest we may have in your accounts or other assets. This security interest will survive termination of the Agreement. 243
TRI COUNTIES BANK 38 FEBRUARY 1, 2021 B
SEVERABILITY
If any provision of this Agreement is determined to be void or invalid, the remainder of the Agreement shall remain in full force and effect. No provision of this Agreement shall be deemed to deny (and any term to the contrary is modified so as not to deny) protections, rights or privileges that under state or federal law are required to be made available to consumers or to consumer accounts, except that any modification of your protections, rights and privileges under this Agreement will be effective to the extent (but only to the extent) that the relevant state or federal law allows us and you to agree to modify them.
SIGNATURES GENERALLY, FORGERIES, MISSING SIGNATURES AND
ALTERATIONS
The authorized signatures for an account are noted on the account signature card.
Any one of the authorized signers may sign items or withdrawal orders and give us instructions regarding the account. We do not offer accounts on which two or more signatures are required for a withdrawal or other instruction on an item or other charge.
If you indicate on your signature card or other account opening documents that more than one signature is required, this indication is for your own internal procedures. It is not binding on us. We may attempt on occasion to enforce any multiple signature requirement, but we may cease to do so at any time without prior notice to you. We may act on the instruction or pay out funds from your account if the item or other charge is signed or authorized by (or otherwise authenticated as being the act of) any owner or by any authorized signer (including when acting alone). We have no liability to you if we do this. However, if there is a conflict, the Bank reserves the right to require all authorized signers to sign an item or withdrawal order.
If your negligence contributes to a check being altered, changed or forged, we will not be responsible if we pay the check in good faith and in accordance with the reasonable commercial standards of our business. If anyone disputes the payment of a check because it was altered, changed, forged, bore an unauthorized signature or was otherwise improper, we may not credit the amount to your account until the dispute has been resolved.
We will have a reasonable period of time to investigate the facts and circumstances surrounding any claim of loss. Unless a law, rule or regulation provide otherwise, such a claim is deemed not to have been made until submitted in writing to us. You agree to fully cooperate in our investigation of such a claim. Your cooperation may include among other things, at the Bank’s discretion: (1) a requirement that you submit a declaration under penalty of perjury describing your claim; (2) a report filed with the appropriate police and/or investigatory authority; (3) promptly providing documentation in support of your claim, if the Bank requests it from you; and (4) if your claim arises from employee fraud or embezzlement, the Bank may require you to make a claim against any insurance coverage that you might carry for such a claim. Our liability to you will be reduced by the amount your insurance company pays you for any claim you tendered to it. Any failure to cooperate in the Bank’s investigation may result in our decision not to honor your claim. We may, although we are not required to do so, provisionally credit your account pending the final outcome of the investigation. If we 244 TRI COUNTIES BANK 39 FEBRUARY 1, 2021 B
determine, in our sole discretion, that the debit to your account was not improper, then we may reverse any provisional credit made to your account.
We will not be liable for special or consequential damages, including loss of profits or opportunity, or for attorneys’ fees incurred by you to recover your loss against the person responsible and you agree to indemnify and hold us harmless from any such losses. In the event that we reimburse your loss, you agree that you will not waive any rights you have to recover your loss against anyone who is obligated to repay, insure, or otherwise reimburse you for your loss. You will pursue your rights or, at our option, assign them to us so that we may pursue them. Our liability will be reduced by the amount you recover or are entitled to recover from these other sources, including insurance coverage. At our request, you will provide us with all reasonable information about your insurance coverage, including the name of your insurance carrier, policy number, policy limits, and applicable deductibles.
STATEMENTS
With certain exceptions, we make account statements available to account holders.
You agree to promptly examine your statements as soon as we make them available to you. If items are not returned with your statement, upon your request, the Bank will make a reasonable effort to promptly provide you with a copy or image of any item in our possession. Unless otherwise agreed, you waive any right to receive any original item after it is paid.
A “statement cycle” means the period covered by your account statement. If you receive a statement monthly, the monthly statement cycle may or may not be a calendar month, but in most cases it won’t be more than 32 days or less than 28. The specific dates covered for your statement cycle will appear on your periodic statement. Savings accounts typically cycle on a quarterly basis.
You assume full responsibility for monitoring and reviewing the activity of your account, including the work of your employees, agents, and accountants (as applicable).
You agree to notify us immediately if you think there is an error or an unauthorized transaction shown on your statement, including, forgeries, alteration or unauthorized items. If you fail to notify us promptly, but no later than 30 calendar days following the statement mailing date or the date we make the statement available to you, then you agree that you cannot assert any error, problem or unauthorized transaction or forged, altered or unauthorized item against us. You further agree that if you fail to notify us within a 30 calendar day period, then you are precluded from asserting against us the error, problem, unauthorized transaction or forged, altered or unauthorized item and any subsequent forged, altered or unauthorized item from the same wrongdoer. This 30 calendar day limitation is without regard to whether we did or did not use ordinary care and does not otherwise restrict any right we have under law or other agreements with you.
If you do not receive your scheduled statement, it is your obligation to notify the Bank of that fact.
245
TRI COUNTIES BANK 40 FEBRUARY 1, 2021 B
STOP PAYMENTS
If you want to stop payment on a check you have written, you may place a written stop payment order at a branch or contact Customer Service at 1-800-922-8742 to stop payment before it is finally paid by us. Any authorized signer on the account may furnish a stop payment order.
You must furnish us with the date, the check number, and the exact amount of the check and the name of the payee in order for us to stop payment on the item. If you provide us with any incorrect information, we will not be responsible for our failure to stop payment on the check. We will not be responsible for a stop payment order if we do not have a reasonable opportunity to act on it before final payment of the item. You may not stop payment on a check guaranteed by us.
You may furnish the stop payment order orally or in writing. If you give us an oral stop payment order, then it will be effective for fourteen (14) days. The stop payment order will expire at the end of fourteen (14) days unless you give us written notice of the stop payment order. We have a special form for this purpose. Upon confirming the order in writing, the order will remain in effect for six (6) months and must be renewed by you every six (6) months to remain in effect. If you do not renew the stop payment order when it expires and the item is presented for payment, we may pay the item and charge it to your account. There is a fee for each stop payment order and renewal order requested. See Business Fee Schedule.
In some cases, we may pay an item even if a stop payment request is in effect. If we, or another person or entity, is determined by us to be a “holder in due course” of the item, we may pay the item. If we pay a check which has a valid stop payment order on it with correct information, we may be responsible to you for up to the face amount of the item if you establish that you have suffered a loss because we paid the item. You agree to assign to us all of your rights against the payee and/or any other holder of your check.
You also agree to cooperate fully with us in any legal actions that we subsequently take against such persons.
Anyone holding the check, including the Bank, may be entitled to enforce payment against you despite the stop payment order. You agree to indemnify, defend, and hold us harmless from all costs (including attorneys’ fees), actions, damages, claims, and demands related to or arising from our action in stopping payment on the check.
TAXPAYER IDENTIFICATION NUMBER
We are required to obtain a taxpayer identification number (“TIN”) for each account you open or maintain with us. The taxpayer identification number for a business is usually an employer identification number (EIN). The taxpayer identification number for a sole proprietorship may be either a social security number (SSN) or an EIN. We must obtain this number even if you are not required to file tax returns. This number is included on reports we must file with state and federal tax authorities about interest we pay you.
246
TRI COUNTIES BANK 41 FEBRUARY 1, 2021 B
U.S. persons, including resident aliens may be required to complete a Form W-9 to certify their TIN and backup withholding status. To establish that you are not a U.S. citizen or other U.S. person (including a resident alien individual), we may require you to (among other things) complete a Form W-8. We may report interest in cases where it is not mandated for us to do so. We are not responsible for your action or inaction in selecting or completing a form, and no information in these matters that may be supplied by us to you should be relied upon by you. In all tax matters, you should consult your own tax advisor. You agree to notify us and submit a new Form W-9 or W-8, as applicable, within 30 days if any certification made on the form becomes incorrect.
If you fail to provide your TIN and certify that it is correct, or if you fail to certify that you are not subject to backup withholding or if the IRS notifies us that you have furnished an incorrect taxpayer identification number, then federal tax rules may require us to re-solicit your TIN and/or withhold a percentage of interest paid to you. We forward amounts withheld to the IRS. If there are any fines, penalties, or charges assessed upon us due to any incorrect name/TIN mismatch or error not caused by us, you agree to reimburse us for the fine, penalty, or charge, and we may charge your account for the same.
When an account earns interest, we may report the interest paid and the amount withheld to the IRS (and to the California Franchise Tax Board). You will receive a copy of the information reported to the tax authorities.
TRANSFER AND ASSIGNMENT
This account may not be negotiated, transferred or assigned without our prior written consent.
WAIVERS
We may delay enforcing our rights under this Agreement without losing them. Any waiver by us shall not be deemed a waiver of other rights or of the same right at another time. You waive diligence, demand, presentment, protest and notice of every kind, except as otherwise set forth in this Agreement.
WITHDRAWALS
Unless otherwise clearly indicated to the contrary, any one of you who signs in the space designed for signatures on the signature card, including any authorized signers and agents, may withdraw or transfer all or any part of the account balance at any time.
Withdrawals will first be made from collected funds, and we may, unless prohibited by law or our written policy, refuse any withdrawal request against uncollected funds, even if our general practice is to the contrary. We reserve the right to refuse any withdrawal or transfer request, which is attempted by any method not specifically permitted, which is for an amount less than any minimum withdrawal requirement. We may limit the amount of cash that can be withdrawn each day. Even if we honor a nonconforming request, repeated abuse of the stated limitation may eventually force us to close this account. Additional withdrawal limitations may be disclosed elsewhere. 247
TRI COUNTIES BANK 42 FEBRUARY 1, 2021 B
TRI COUNTIES BANK
For additional information about any
Tri Counties Bank product or service, please visit one of our branches or call us at: 1-800-922-8742
or online at TriCountiesBank.com
Member FDIC
248
TRI COUNTIES BANK 43 FEBRUARY 1, 2021 B
249
TRI COUNTIES BANK 44 FEBRUARY 1, 2021 B
NA-12B (02/2021) Member FDIC
We’re Here For You.
Whether you need help with a transaction, have questions about your current accounts or have interest in learning about new products and services, we’re here with real bankers ready to serve you.
Speak with a Banker ........................................1-800-922-8742 (Hablamos Español)
24 hours a day, seven days a week
24-Hour Automated Telephone Banking
Call Toll Free ....................................................... 1-844-TCB-24HR (1-844-822-2447)
Treasury Management Support .........................1-877-895-7580 Monday – Friday: 7:30am – 5:30pm
Branches Throughout Northern and Central California
Visit TriCountiesBank.com/locations for a branch near you. 1-800-922-8742 | TriCountiesBank.com
250
Tri Counties Bank Mobile & Online Banking User
Agreement
This Agreement sets forth the terms and conditions under which Tri Counties Bank will provide electronic access to your accounts through the Bank’s Mobile & Online Banking service (“Service”). By using the Service, whether accessed by computer or mobile device, you accept all the terms and conditions of this Agreement, and as they may be periodically revised. Please read it carefully. This Agreement is in addition to other agreements between Tri Counties Bank and you, including but not limited to the Consumer Deposit Account Agreement and Disclosures, and as those may be periodically revised. We recommend that you print or store a copy of this Agreement for your records. You may also review this Agreement on our website at www.TriCountiesBank.com.
Definitions - As used in this Agreement, the words "we", "our", "us", “Bank” mean Tri Counties Bank. “You" and "your" refer to the accountholder authorized to use the Service and anyone else authorized by the accountholder to have access to the Service. "Account" or "Accounts" means your account(s) at Tri Counties Bank. "Electronic funds transfers" means ATM withdrawals, preauthorized transactions, point of sale transactions, transfers to and from your internal Tri Counties Bank accounts, transfers to external accounts you have at other financial institutions, as well as Bill Pay. "Mobile & Online Banking services" or the “Service” means the services provided pursuant to this Agreement, including Bill Payment Service, External Transfers Service, Debit Card Manager and Mobile Deposit. "Business days" means Monday through Friday. Federal holidays are not included. Additional definitions applicable only to Mobile Deposit are set forth below.
Access – To use the Service, you must have at least one eligible account, Internet access, and a phone number or email address. Your browser must have encryption capabilities that meet current acceptable industry security standards. Your browser can be used on a desktop computer, laptop, tablet and/or mobile device. You can enroll at www.TriCountiesBank.com, through our Mobile App, or by visiting a branch or calling Customer Service. Mobile & Online Banking can be used to access only the accounts on which you are an authorized signer. Transactions made within Mobile & Online Banking will be treated as authorized. We do not monitor transactions through Mobile & Online Banking (other than verification of login credentials) to determine that they are made on your behalf. Take care to keep your login credentials secret.
Eligible Accounts – The Service provides access to checking, money market, savings, and time deposits. In some cases, we may allow loans to be linked, in which case you agree that your loan agreement, note or other document is modified to the extent necessary to allow the transfers or other Services that may be utilized. We may process transactions from loan Accounts without regard to access limitations in any loan documentation or agreements. No online transactional activity is allowed on certificates of deposit, which are view only. Accessibility to Accounts may vary based on the Service(s) you use.
Mobile & Online Banking – You can use the Service to check the balance of your accounts, view account histories, transfer funds between your accounts, order checks, make stop payment 251
requests, view checks, and pay bills from your accounts (Bill Pay terms and conditions can be found in the Bill Pay section of the Bank’s website at www.TriCountiesBank.com). Other functions may also be available.
Account balance and activity information is real time. Mobile banking allows you to use a mobile device to access the Service, e.g., a smart phone or tablet that has text messaging capabilities and Internet access. We will provide access to an app for Android, iOS and iPadOS devices.
Your wireless provider’s standard rates apply to Internet access, including messaging rates that apply to SMS usage. We do not charge for content; however, downloadable content may incur additional charges from your wireless provider. Please contact your wireless provider for information about your Internet access and messaging plans. Your wireless provider may charge you for Internet access, message and/or charge limitations that are your responsibility. You agree that we may send messages through your wireless provider and that we may use the mobile phone number, email address or other delivery location we have in our records to contact you.
Your wireless provider and other service providers may also collect data from your mobile banking usage according to their policies. We are not responsible or liable for the acts or policies of such service providers. We will only use the information you provide to us from your mobile banking usage in connection with the Service, except that we reserve the right to disclose any information necessary to satisfy any law, regulation or governmental request, to avoid liability, or to protect our rights or property.
Our Mobile & Online Banking service, as well as the content and materials you may receive or access through your use of our service, are proprietary to us and our licensors, and are for your personal, noncommercial use only. You agree that if you are using the Service outside the United States, you are responsible for obtaining network access and are responsible for applicable fees and charges. You understand that you may not be able to access Mobile & Online Banking from certain countries and that the access can change at any time. You agree to indemnify, defend, and hold us harmless from and against any and all claims, losses, liability, cost and expenses (including reasonable attorney’s fees) arising from your use of mobile banking.
Hours of Access – The Service is available 24/7, although some functions may be occasionally unavailable due to scheduled maintenance. We will post advance notice of downtime whenever possible. We reserve the right to modify, suspend, or terminate access to Mobile & Online Banking at any time and for any reason without notice. We will terminate access to Mobile & Online Banking after 180-days of inactivity unless you have scheduled transfers or bill payments pending.
Your Username and Password – For security purposes, you are required to select a unique username and password during your initial login to Mobile or Online Banking (“login credentials”). You determine what password you will use, although it must meet certain minimum security standards. We cannot recover a lost or forgotten password. We can only reset your password to allow you to select a new one. You accept responsibility for the confidentiality and security of your login credentials and agree to change your password regularly. Upon three unsuccessful attempts to use your password, your access to the Service will be suspended. To re252 establish your authorization to use the Service, you must contact us in-person or by phone to have your password reset and obtain a new temporary password. Neither Tri Counties Bank nor any of its service providers will ever ask you for your password and you should never give it to anyone else.
For security purposes, we require that you create a password that meets minimum security requirements, including the use of upper- and lower-case alpha, numbers and special characters.
Your password should not be associated with any commonly known personal identification, e.g., social security number, address, date of birth, or names of children, and should be memorized rather than written down. You agree that the use of passwords constitute a reasonable security procedure for the verification of the authenticity and accuracy of transactions initiated through the Service. You authorize Tri Counties Bank and our service providers to rely and act upon any transactions or inquiries initiated through Mobile or Online Banking using your login credentials and agree to be responsible for all transactions that processed using those credentials except as disclosed in the Bill Pay Terms and Conditions.
Security – You understand the importance of your role in preventing misuse of your Accounts through the Service and you agree to promptly examine the periodic statements for each of your Tri Counties Bank accounts as soon as they are made available (either by eStatements or mail).
You agree to protect the confidentiality of your account and account number, and your personal identification information, such as your driver's license number and social security number. You understand that personal identification information by itself, or together with information related to your account, may allow unauthorized access to your Account(s). Your password and username, plus the One-Time Passcode sent to you by text or automated call and/or security questions presented as challenges when Mobile or Online Banking doesn`t recognize your login behavior as fitting your normal pattern, are intended to provide security against unauthorized entry and access to your accounts. You acknowledge that the Internet is inherently insecure and that all data transfers, including electronic mail (email), occur openly on the Internet and potentially can be monitored and read by others. We cannot and do not warrant that all data transfers utilizing the Service will not be monitored or read by others.
You agree that we are not responsible for any electronic virus that you may encounter using the Service. We encourage you to routinely update your computer and mobile device operating systems, together with browser software and mobile apps, scan your computer using any reliable virus protection product to detect and remove any viruses found. Undetected or unrepaired, a virus may corrupt and destroy your programs, files and even your hardware.
If you choose to request Mobile & Online Banking access for individuals using the Mobile & Online Banking feature called Family Banking, you agree to be solely responsible for the activities of those individuals according to the access entitlements you request for them. You are responsible for instructing these individuals on the importance of Security. You are responsible for any fees or charges incurred by these individuals in their use of the Service. To request Family Banking, please contact your local Branch or call us at 1-800-922-8742.
Fees and Charges – Currently, the Service is offered without charge, excepting certain features (e.g. stop payments, checking supplies). These fees are set forth in our Consumer Fee Schedule, 253
which is available within Mobile & Online Banking, and listed under the Help function. You agree that all such fees and charges will be deducted from the Tri Counties Bank checking account designated as the "Primary Checking Account". If you close your Primary Checking Account, you must contact us immediately to designate another account as your Primary Checking Account. You agree to pay any additional reasonable charges for services you request which are not covered by this Agreement. You are also responsible for your mobile phone and Internet service fees you incur in connection with your use of the Service. We recommend you review the agreement with your mobile phone carrier and internet service provider before enrolling in the Services.
Account Transfers – Transfers are subject to limitations in your Consumer Deposit Account Agreement and Disclosures. Tri Counties Bank reserves the right to refuse or cancel a transfer.
We will notify you promptly if we decide to refuse or cancel any transfer. However, we are not obligated to provide notification of your transfer being refused or cancelled if you attempt to make transfers that are prohibited under this Agreement, any additional agreement affecting your terms of your account(s), or federal and state law. You will also be held responsible for any applicable fees charged in accordance with our Consumer Fee Schedule.
Internal Transfers – Internal Transfers are transfers between accounts at Tri Counties Bank on which you are an account owner or an authorized signer. Not all accounts may be eligible for Internal Transfers within Mobile & Online Banking. You may make one-time, recurring or future-dated Internal Transfers between eligible accounts. Internal transfers are processed in realtime as they are submitted. Funds for recurring and/or future-dated Internal Transfers should be in the account no later than midnight on the morning of the scheduled transfer to ensure the transfer can be completed.
External Transfers - External Transfers are transfers between a Tri Counties Bank account and an account at an external Financial Institution; you must be an account owner or an authorized signer on the external account and the Tri Counties Bank account in order to initiate an External Transfer. Not all accounts may be eligible for External Transfers within Mobile & Online Banking. External Transfers to or from another Financial Institution require us to validate your access to such external accounts through micro deposits or through a 3rd-party application. We reserve the right to impose a limit to the dollar amount of External Transfers and/or a limit to the total number of transfers that may be requested. We reserve the right to place a hold on any funds prior to debiting your funding account for the transfer amount. You are required to have sufficient funds available in the funding account of any transfer request(s) by the opening of the business day the transfer is to be processed. In the event that any External Transfer results in a deficiency to your account(s) with us, you authorize us to collect such deficiency from any other account(s) you have with us, or to collect same from the external account to which a debit or credit was posted. All other rights stated in the Consumer Deposit Account Agreement and Disclosures will also apply.
An External Transfer request submitted before the cutoff time will be deemed as received that day (“Transfer On date”). Any External Transfer requests submitted after designated cutoff time will be deemed as received the following Business Day (“Transfer On date”). External Transfers will post to your account, loan or line of credit no later than two business days after the “Transfer 254
On” date, otherwise the transfer will be processed on the following Business Day and post not later than three (3) business days. For External Transfers, we reserve the right to wait a period of no more than three (3) business days after debiting your account prior to submitting a credit to the destination account of the transfer, and/or place a hold on a credit to the destination account of the transfer.
When you schedule any type of External Transfer or recurring External Transfer for a future date using the Service, it must be submitted at least one (1) calendar day prior to the desired processing date. All scheduled or recurring External Transfers for a future date will only be processed on Business Days. If the future date for processing is not a Business Day, the External Transfer will be processed on the following Business Day.
External transfers completed as ACH debits and credits are governed by the rules of the National Automated Clearing House Association (NACHA) to which you and we agree to be bound.
If your account has insufficient funds to perform any transfer(s) you have requested for a given business day, then:
a. We reserve the right to determine posting order of items presented for payment; b. Electronic fund transfers which would result in an overdraft of your account may, at our discretion, be cancelled; and
c. In the event the electronic fund transfer which would result in an overdraft of your account is not cancelled, overdraft charges may be assessed pursuant to the terms of the Consumer Deposit Account Agreement and Disclosures.
Limits on Amounts and Frequency of Transfers - The number and amounts of transfers from your accounts may be limited by the terms of the Consumer Deposit Account Agreement and Disclosures. If a hold has been placed on deposits made to an account from which you wish to transfer funds, you cannot transfer the held portion of the funds until the hold expires.
Our Liability for Failure to Make a Transfer - If we do not complete a transfer to or from your account, including a bill payment, on time or in the correct amount, according to our agreement with you when you have properly instructed us to do so, we will be liable to you for your losses or damages caused as a result. However, there are some exceptions. We will NOT be liable, for instance:
(1) If, through no fault of ours, you do not have enough money in your account to make a transfer.
(2) If a legal order directs us to prohibit withdrawals from the account. (3) If your account is closed, or if it has been frozen. (4) If the transfer would cause your balance to go over the credit limit of an established line of credit or the credit limit for any credit arrangement set up to cover overdrafts. 255
(5) If you, or anyone authorized by you, commits fraud or violates any law or regulation. (6) If any electronic terminal, telecommunication device, or any part of Mobile & Online Banking. electronic fund transfer system is not working properly and you knew about the problem when you started the transfer.
(7) If you have not provided us with complete and correct payment information for the Bill Payment Service, including, without limitation, the name, address, your payee-assigned account number, payment date, and payment amount for the payee on a bill payment. (8) If you have not properly followed the on-screen instructions for using Mobile & Online Banking.
(9) If circumstances beyond our control (such as fire, flood, interruption in telephone/internet service) prevent the transfer, despite our taking reasonable precautions.
Your Liability for Unauthorized Transfers - CONTACT US AT ONCE if you believe your Mobile & Online Banking password or your mobile device has been lost, stolen, used without your authorization, or otherwise compromised, or if someone has transferred or may transfer money from your accounts without your permission. An immediate telephone call to us is the best way to reduce any possible losses. You could lose all the money in your accounts (plus your maximum overdraft line of credit, if any). You assume full responsibility for the security and confidentiality of your username and password, mobile phone number and personal identification numbers used to access the Service.
Bill Payment Service – Refer to the applicable Terms and Conditions for Bill Payment services prior to enrollment for Bill Payment. You can review the Terms and Conditions for Bill Payment at any time by going to www.TriCountiesBank.com.
Stop-Payment Requests – Stopping the payment of a check is different from the cancellation of a bill payment. Once the bill payment has been debited from your account, you CANNOT cancel or stop an electronic bill payment. You may be able to stop a bill payment paid by paper check by contacting us by telephone before the check has cleared. You will have to contact us by telephone to determine if the bill pay check has cleared, and if not, we will process your stoppayment request. You may also initiate stop- payment requests through the Service for paper checks you have written (non-electronically) on your Tri Counties Bank account(s). Stoppayment requests submitted through Mobile & Online Banking are processed in real-time as they are submitted. To be effective, this type of stop-payment request must precisely identify the name of the payee, the check number, the dollar amount, and the check date. If you make your stop-payment request via Mobile or Online Banking, or by telephone, we may also require you to put your request in writing and get it to us within 14 days after you call. You will incur stoppayment charges as disclosed in our Consumer Fee Schedule for the applicable account. Stoppayment charges are the same for both checks you write, and bill payment checks. eStatements – You will not receive a separate Mobile & Online Banking statement.
Transactions on your accounts using the Service will appear on the periodic account statements 256
made available for your Tri Counties Bank accounts. You can use the Service to enroll in eStatements for your accounts. This is your authorization to us to stop delivering paper statements for the accounts you designate. You will be able to view and print your eStatements through the service. Use the Services menu option within Mobile & Online Banking to enroll in eStatements. You will be presented with a separate eStatement Agreement that outlines details of this service.
Debit Card Manager – Debit Card Manager service (“Debit Card Manager”) is designed to allow you to temporarily disable your Debit Card in the event it is misplaced, lost, or stolen, OR for other purposes, such as extended travel. Debit Card holders who are enrolled in Mobile & Online Banking are automatically enrolled in Debit Card Manager. Debit Card Manager may also send transaction alerts, authentication requests, or other communications via push notification, text message, or email. Access to Debit Card Manager is limited to Mobile & Online Banking. Debit Card Manager does not allow for the cancellation of authorized or preauthorized Debit Card transactions. It is not intended as a method for stopping payment on authorized or pre-authorized transactions. All transactions for which there is a prior authorization will be paid by Tri Counties Bank. This applies to authorizations made in both card present and card not present situations, and in cases of pre-authorized recurring transactions. Pre-authorized recurring transactions must be stopped in accordance with the agreement made with the merchant involved in the pre-authorizations. The Card on File and Recurring Payment features are provided for informational purposes only and may not identify all businesses, individuals or entities that may have a card number on file and/or recurring payments. Recent Activity displayed in Debit Card Manager is based on the specific card selected, not a comprehensive list of all account transactions.
Lost or Stolen Card. Reporting a card lost or stolen within Debit Card Manager will disable the card, but is not intended to replace direct contact with the Bank. You are required to contact the Bank to report a card lost or stolen and/or to report unauthorized transactions.
Disabling Cards. Disabling a card within Debit Card Manager will NOT reorder a new card.
You are required to contact the Bank to report a card lost or stolen and/or to report unauthorized transactions. Toggling a card “ON” or “OFF” within Debit Card Manager does not permanently disable a card. To permanently disable a card, you must contact the Bank. Upon deactivation of a card, it will automatically be removed from Debit Card Manager.
Unauthorized Transactions. Transactions cannot be disputed within Debit Card Manager. Any unauthorized transactions must be reported to the Bank in accordance with existing agreements.
For additional information on unauthorized transactions, refer to the Consumer Debit Card Agreement and Disclosure.
Alerts, Controls & Travel Plans. Following your registration to receive Transaction Alerts sent to your mobile device, alerts may be sent in real-time; however, the actual time between a transaction made with your Debit Card that triggers a Transaction Alert and the time you receive such Transaction Alert may be dependent on a number of factors including but not limited to the method the transaction is billed by the merchant, the time at which the transaction is processed by the merchant, how a merchant is classified by their card processor, the location of the 257
merchant’s card processor, your wireless carrier’s service and coverage within the area in which you are physically located at that time, and other potential variables that may or may not be known by the Bank. Your receipt of Transaction Alerts may not be available in all areas. Transaction Alerts are intended as “for your information” only and are not intended to identify transactions as fraudulent. Placing controls or alerts based on locations, regions, merchant types, transaction types or spending limits is not a guarantee to prevent transactions from clearing through your account and may be honored at the Bank’s discretion. Travel Plansestablished through Debit Card Manager are only valid for the time specified in Debit Card Manager, and only a limited number of Travel Plans can be established for each card. You will need to contact the Bank to accommodate longer periods of travel, or more comprehensive itineraries.
Eligibility. Debit Card Manager is only available to individuals who are: (i) of legal age of majority in their jurisdiction of residence (and at least 18 years of age); and (ii) own a Tri Counties Bank Debit Card that is in good standing and eligible for Debit Card Manager ("Card").
Note: Eligibility of a Card will be determined by us in our sole and absolute discretion. Our decisions with respect to your eligibility are final and binding. We reserve the right to terminate your participation in Debit Card Manager at any time or for any reason. The user must qualify for Mobile & Online Banking in order to use Debit Card Manager. The user must adhere to the terms and conditions of all existing agreements with Tri Counties Bank.
No Amendment of Existing Terms and Conditions For Cards. THE TRANSACTION ALERTS
THAT ARE PROVIDED TO YOU THROUGH THIS SERVICE DO NOT AMEND,
SUPPLEMENT, CHANGE OR REPLACE ANY OTHER NOTICE OR INFORMATION
THAT YOU MAY RECEIVE IN CONNECTION WITH YOUR CARD ACCOUNT,
INCLUDING, BUT NOT LIMITED TO, ANY INFORMATION PROVIDED TO YOU ON YOUR PERIODIC STATEMENT.
Availability. Debit Card Manager may not be available for all Debit Card Types. You may need to consent to location services to access all the features of Debit Card Manager. While we will make every effort to decline transactions while your card is in a deactivated state, we cannot guarantee that all such transactions will be declined due to circumstances beyond our control.
You acknowledge that the deactivation function is reliant on computer and/or telecommunication systems. Disruptions to these systems may result in the authorization of transactions, even when the card is in a deactivated state. Reactivation of cards may be unavailable during certain times of the day. We will attempt to notify you of these times. You are responsible for monitoring your account activity, whether electronically or by checking your statements. Use of Debit Card Manager does not override the user’s responsibility to report unauthorized transactions in a timely manner as described in the Deposit Account Agreement and Disclosures. We assume no responsibility for failure of Debit Card Manager to work in the expected manner, aside from the responsibilities put forth in said agreement.
Termination. We may terminate or suspend Debit Card Manager, or your use of Debit Card Manager, at any time or for any reason. Without limiting the foregoing, this Agreement may be terminated if you breach any term of the Agreement, if you use Debit Card Manager for any unauthorized or illegal purposes or you use the Services in a manner inconsistent with the terms 258
of your Deposit Account Agreement and Disclosures or any other Agreement with us. If you wish to no longer use Debit Card Manager, it is your responsibility to ensure all card controls and alerts are set to OFF.
Mobile Deposit – Mobile Deposit service (“Mobile Deposit”) enables you use your smart phone in conjunction with our mobile app to make check deposits into your account. We reserve the right to modify or terminate Mobile Deposit at any time, with or without notice to you. (a) Definitions. The following definitions apply to Mobile Deposit:
"Check" or “check” means an Original Check, as defined in Regulation CC. "Agreement" means this Agreement and all instructions (including online instructions) relating to Mobile Deposit which we may provide to you from time-to-time. "Imaged Item" means the digitized image of a Check transmitted to us that is drawn on a U.S.
Financial Institution, payable to you and properly endorsed and is otherwise eligible for Mobile Deposit. This excludes items payable in currency other than US Dollars, or which has other special instructions and/or limitations on its deposit. "Mobile Deposit" means the Mobile Deposit services described in this Agreement to enable the processing of Items digitally through image exchange networks or through creation of Substitute Checks.
“Non-qualifying Item” means Non-cash Items, Items payable in a medium other than United States money, currency, warrants, Items payable to third parties, Items payable to joint payees (unless payable to the payees alternatively and deposited into an account in the name of all payees),drafts or remotely created checks as defined by the UCC and Regulation CC, respectively, Items that are stale dated by six months or more or post-dated, savings bonds, Items payable to “cash,” Substitute Checks, non-negotiable Items, Items that have been returned unpaid for any reason and any Item that exceeds your transaction limitations as established by us from time to time. "Original" with respect to a Check means the first paper Item issued with respect to a particular payment transaction.
"Payor Financial Institution" means the United States Financial Institution ordered in an Item to make payment to the payee(s) named on the Item. "Regulation CC" means 12 C.F.R. Part 229, as it may be amended from time to time.
"Substitute Check" means a paper reproduction of an Item that satisfies the requirements and definition of "substitute check" set forth in Regulation CC. "UCC" means the Uniform Commercial Code as enacted and amended in California.
"United States Financial Institution" means (i) any person, located in the United States, engaged in the business of banking; (ii) a Federal Reserve Bank; (iii) a Federal Home Loan Bank; and (iv) to the extent it acts as a payor, the U.S. Treasury, the U.S. Postal Mobile Deposit Service, or a State or local government.
259
(b) Limitations. We may impose limits on the dollar amount of each Mobile Deposit, including limits on the aggregate dollar amount of multiple deposits in one day. We may change any one or more of these limits at any time at our sole discretion, and without prior notice. (c) Your Responsibilities. Your use of Mobile Deposit is subject to the following requirements:
(1) Each Imaged Item must be transmitted in compliance with the terms and conditions of this Agreement; (2) You will not deposit a duplicate Imaged Item and you agree to indemnify and defend us against any and all claims related to the duplicate deposit of any Check; (3) You will not use Mobile Deposit to operate a “money services business” as defined in the Federal Bank Secrecy Act; (4) You will: (i) ensure that Imaged Items are properly endorsed, (ii) destroy Original Checks as required by this Agreement, and (iii) endorse Checks as follows “[your signature] For Mobile Deposit Only to Tri Counties Bank [account #]” before you photograph the Check (otherwise they may be returned); (5) You will notify us of any errors or Mobile Deposit discrepancies within 14 days of your receipt of the statement on which such error is disclosed and absent notice from you, such transactions will be deemed correct, and you will be precluded from asserting any error or discrepancy against us; (6) You shall ensure that: (i) only authorized persons shall have access to Original Checks, (ii) such Checks will not be duplicated or scanned (photographed) more than once; and (iii) Checks will not be re-deposited or renegotiated in any manner. You will promptly provide any retained Original Check (or copy) to us when requested to resolve claims by third parties with respect to any Item. You will secure Original Checks until you establish that they have been accurately posted and then permanently destroy them so they may not be redeposited.
(d) Your Representations and Warranties. Without limiting any other provision of this Agreement, each time you submit an Original Check through Mobile Deposit, you represent and warrant that: (1) each Imaged Item is a complete and accurate representation of the front and back of a negotiable Check; (2) the Imaged Item is not prohibited or non-qualifying pursuant to this Agreement or applicable law; and (3) the Original Check used to create the image has not been previously deposited, duplicated, or used to create another image or electronic fund transfer.
(e) Prohibited Checks. We have no obligation to accept any Imaged Item which you attempt to submit for deposit through Mobile Deposit, in our sole discretion. You agree that you will only submit Checks for processing to us that meet the definition of “Item” as provided in these Mobile Deposit Terms and will ensure that the Items scanned meet the required standards for image quality. You agree that you will not photograph and attempt to deposit any of the following: (1) Any third-party Checks, or checks drawn on any deposit account of yours, or a deposit account of any business in which you are a principal, officer or authorized signer; (2) Checks payable to multiple persons or entities or a business, or a combination thereof; (3) Altered checks; (4) Fraudulent checks; (5) Previously deposited checks; (6) checks drawn on foreign banks.; (7) Checks not payable in U.S. dollars; (8) Checks that are postdated or more than six (6) months old or beyond any expiration date printed on the check; (9) Substitute checks (i.e., previously imaged item for which you only have the image); (10) Remotely created checks; (11) Unsigned or improperly signed checks; (12) Travelers checks.
260
(f) Processing. (1) We will process any returned Items in accordance with applicable law and your Consumer Deposit Account Agreement and Disclosures. Availability of credit from mobile deposits will be subject to our then current availability schedule, which may be amended by us from time to time; (2) Notwithstanding any provisional credit, Imaged Items processed through Mobile Deposit will be deemed received for deposit at the time the Imaged Items are actually received and accepted by us; (3) You agree to view the images of each scanned Item that is sent to us. If Item information received by us is not complete or cannot be processed by us for any reason, we may reject the Imaged Item (notwithstanding any transmission confirmation) and thereafter charge the amount back against any provisional credit to your Account. You will be responsible for verifying our receipt of your transmissions by verifying that deposits have been posted to your Account; (4) If an Imaged Item is not accepted for deposit, you may submit the Original Check to us at a Branch; and (5) Our processing of any Non- qualifying Items shall not constitute a waiver by us or obligate us to process such Non-qualifying Items in the future. You agree that we may discontinue processing of Non-qualifying Items at any time, without cause or prior notice.
(g) Receipt of Imaged Item. We are not responsible for Imaged Items we do not receive or that are dropped during transmission. An Imaged Item will be deemed received by us only when we provide an online confirmation receipt. When we confirm receipt, the Imaged Item will still be subject to review before we submit it for collection and may still be rejected for any reason in our sole discretion. If we reject an Imaged Item received through Mobile Deposit, then you may submit the Original Check to us through Branch deposit unless we instruct you otherwise, or you may want to contact the maker and have them reissue the Check. (h) General Terms and Conditions.
Technical Requirements. You must meet the current technical requirements we specify, including regular updates to our Mobile App, as well as your mobile operating system software.
We may change these technical requirements at any time without notice to you. Each Imaged Item you transmit using Mobile Deposit must be legible, as determined by us. If your mobile device produces Imaged Items of unacceptable quality, we may reject your deposit or terminate your access to the Mobile Deposit service. We are not responsible for problems arising out of your equipment or internet connection even if you are using equipment that meets our technical requirements.
Funds Availability. We generally apply the Funds Availability Schedule to Imaged Items received through Mobile Deposit as if we had received the Original Check. However, in addition to the rules in the Consumer Deposit Account Agreement and Disclosures, we may delay availability of funds from any deposit you make through the Mobile Deposit Service for additional periods, and at any time in our sole discretion.
Cutoff Hour. The cutoff time for Mobile Deposits is displayed within the Mobile Banking App when making a Mobile Deposit. The cutoff time can also be found at www.TriCountiesBank.com. Any items received after the designated cutoff time will be considered received the next business day.
261
Acceptable Use of the Mobile Deposit Service. The Mobile Deposit Service may be used only for personal, family and household services, and is not intended for business purposes.
Mobile Deposit Fees. There is no charge for Mobile Deposit, but other fees, such as for returned items (chargeback items), and overdrafts, may apply. Please refer to our Consumer Fee Schedule for a current listing of fees.
Security Interest; Held Funds. To secure all your obligations arising from Mobile Deposit, you grant to us a security interest in all your accounts with us, whether current or opened later, and all proceeds of same. Our security interest will survive after termination of the Mobile Deposit Terms. This security interest is supplemental to and not in lieu of the security interest granted by you to us under any other agreement including your Consumer Deposit Account Agreement and Disclosures. This security agreement allows us to recover any loss or shortfall by debiting any other account you have with us. We will give you notice of such action after the debit has been made. In addition, we may hold funds in any account following termination of your use of Mobile Deposit for such time as we reasonably determine that any Item processed by us prior to termination may be returned, charged back or otherwise a cause for any loss, liability, or cost.
Indemnification. Without limiting the other indemnification provisions set forth in this Agreement and your Consumer Deposit Account Agreement and Disclosures, you agree to indemnify, defend and hold us harmless from and against any and all claims, demands, damages, liabilities, expenses (including reasonable attorneys’ fees) or other loss that arises from or relates to your use of Mobile Deposit, including without limitation your attempt to deposit a duplicate check image and any liability that we may incur for processing an Imaged Item or Substitute Check rather than the Original Check.
Compliance with Law. You are responsible to meet all compliance requirements or obligations that we and/or you may have with respect to Mobile Deposit under all applicable U.S. federal and state laws, regulations.
Change in Terms – We may change any term of this Agreement at any time. If the change would result in increased fees for any Mobile or Online Banking service, increased liability for you, and except as provided in this Agreement fewer types or stricter limitations on the frequency or dollar amount of electronic fund transfers, we agree to give you notice at least 30 days before the effective date of any such change, unless an immediate change is necessary to maintain the security of an account or our system. We will post any required notice of the change in terms within the Tri Counties Bank Mobile & Online Banking platform or send a notice to you via email. If advance notice of the change is not required, and disclosure does not jeopardize the security of the account or our electronic fund transfer system, we will notify you of the change in terms within 30 days after the change becomes effective.
Your continued use of Mobile & Online Banking Services indicates your acceptance of the change in terms. We reserve the right to waive, reduce or reverse charges or fees in individual situations. You acknowledge and agree that changes to fees applicable to specific accounts are governed by the Consumer Deposit Account Agreement and Disclosures. 262
Disclaimer of Warranty and Limitation of Liability – We make no warranty of any kind, express or implied, including any implied warranty of merchantability or fitness for a particular purpose, in connection with Mobile & Online Banking Services provided to you under this Agreement. We do not and cannot warrant that Mobile & Online Banking will operate without errors, or that any or all Mobile & Online Banking Services will be available and operational at all times. EXCEPT AS SPECIFICALLY PROVIDED IN THIS AGREEMENT, OR
OTHERWISE REQUIRED BY LAW, YOU AGREE THAT OUR OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS OR CONTRACTORS ARE NOT LIABILE FOR ANY INDIRECT,
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES OR BY REASON OF ANY
SERVICES OR PRODUCTS PROVIDED UNDER THIS AGREEMENT OR BY REASON OF
YOUR USE OF OR ACCESS TO MOBILE & ONLINE BANKING, INCLUDING LOSS OF
PROFITS, REVENUE, DATA OR USE BY YOU OR ANY THIRD PARTY, WHETHER IN AN ACTION IN CONTRACT OR TORT OR BASED ON A WARRANTY. FURTHER, IN
NO EVENT SHALL THE LIABILITY OF TRI COUNTIES BANK AND ITS AFFILIATES
EXCEED THE AMOUNTS PAID BY YOU FOR THE SERVICES PROVIDED TO YOU THROUGH MOBILE & ONLINE BANKING.
Your Right to Terminate – You may cancel your Mobile & Online Banking service at any time by providing us with written notice by mail or by submitting a secure message through the Mobile & Online Banking service. Your access to Mobile & Online Banking will be suspended within 3 business days of our receipt of your instructions to cancel the service. You will remain responsible for all outstanding fees and charges incurred prior to the date of cancellation.
Our Right to Terminate – You agree that we can terminate or limit your access to Mobile & Online Banking Services for any of the following reasons: 1. Without prior notice, if you have insufficient funds in any one of your Tri Counties Bank accounts. Mobile & Online Banking service may be reinstated, in our sole discretion, once sufficient funds are available to cover any fees, pending transfers, and debits.
2. Upon 3 business days’ notice if you do not contact us to designate a new Primary Checking Account immediately after you close your Primary Checking Account. 3. Upon reasonable notice, for any other reason in our sole discretion.
Communications between Tri Counties Bank and You – Unless this Agreement provides otherwise, you can communicate with us in any one of the following ways:
Secure message via Mobile & Online Banking. “Mobile” or "Online" messages sent to us through Secure Messages function are not reviewed by our personnel immediately after they are sent. If immediate attention is required, you must contact us by telephone or in person.
Telephone - You can call us at 1-800-922-8742
Mail - You can write to us at:
TRI COUNTIES BANK
Attn: Electronic Banking
63 Constitution Drive
Chico, CA 95973
263
In Person - You may visit us in person at any Tri Counties Bank Branch.
Visit www.TriCountiesBank.com for a complete list of our locations.
Consent to Electronic Delivery of Notices – You agree that any notice or other type of communication provided to you pursuant to the terms of this Agreement, and any future disclosures required by law, including electronic fund transfer disclosures, may be made electronically by posting the notice within the Tri Counties Bank Mobile & Online Banking platform or by email. You agree to notify us immediately of any change in your email address.
This consent to electronic notices only applies to this Agreement. If after consent, you would like a paper copy of this Agreement, please call us and we will mail one to you at no charge. You may withdraw this consent by contacting us or closing your account.
Electronic Records and Signatures – You agree that we may charge your Account(s) without requiring your signature on an item. Any transactions resulting from your instructions which we receive in your name and under your credentials shall be deemed authorized by you. All records maintained by us of transactions under your credentials shall be deemed to have been “signed” and to constitute an “original” when printed from our records maintained in the ordinary course of business.
Privacy and Confidentiality – All information gathered from you in connection with using the Service will be governed by the provisions of our consumer privacy policies, including our online privacy policy, which you agree to review by accessing them on our website, and to which you have agreed by utilizing the Services. In addition, we will disclose information to third parties about your account or the transfers you make: (a) Where it is necessary for completing transfers; (b) to verify the existence and condition of your account for a third-party, such as a credit bureau or merchant; (c) to comply with government agency or court orders; and/or (d) If you give us your permission.
Ownership of Software – You acknowledge that a third party provider to Tri Counties Bank ("Licensor") is the owner of all right, title and interest in and to the software used for access to Mobile & Online Banking Services from Tri Counties Bank and the computer programs contained therein in machine readable object code form as well as any accompanying user documentation along with all subsequent copies, updates or versions thereof which are made available to you (if any), regardless of the media or form in which they may exist (collectively the "Software").
1. License. Subject to the terms and conditions of this Agreement, you are hereby granted a limited, nonexclusive license to use the Software in accordance with the terms of this Agreement. All rights not expressly granted to you by this Agreement are hereby reserved by the owner of the Software. Nothing in this license will entitle you to receive hard-copy documentation, technical support, telephone assistance, or updates to the Software directly from its owner. All support must be received through Tri Counties Bank. This Agreement may be terminated at any time, for any reason or no reason.
2. Restrictions. You shall not: (i) modify, revise or create any derivative works of the Software; (ii) decompile, reverse engineer or otherwise attempt to derive the source code 264
for the Software; (iii) redistribute, sell, rent, lease, sublicense, or otherwise transfer rights to the Software; or (iv) remove or alter any proprietary notices, legends, symbols or labels in the Software, including, but not limited to, any trademark, logo or copyright.
Your Liability – Tell us IMMEDIATELY if you believe any part of your login credentials, including your password, has been lost or stolen, or if you believe that an electronic funds transfer has been made without your permission using information from your check.
Telephoning is the best way of keeping your possible losses to a minimum. You could lose all the money in your account (plus your maximum overdraft line of credit, as applicable). If you tell us within two (2) business days after you learn of the loss or theft of any part of your login credentials, including your password, you can lose no more than $50 if someone used your credentials without your permission.
If you do NOT tell us within two (2) business days after you learn of the loss or theft of any part of your login credentials, including your password, and we can prove that we could have stopped someone from using the login credentials without your permission if you had told us, you could lose as much as $500. Also, if your statement shows transfers that you did not make, including those made by card, code or other means, tell us IMMEDIATELY. If you do not tell us within 60 days after the statement was mailed or first made available to you, you may not get back any funds you lost after the 60 days if we can prove that we could have stopped someone from taking those funds if you informed us in time. If a good reason (such as a long trip or a hospital stay), kept you from telling us, we will extend the time periods.
Errors and Questions - In case of errors or questions about your electronic transfers, call us at , 1-800- 922-8742 or write us at:
TRI COUNTIES BANK
Attn: Customer Service
P.O. Box 909
Chico, CA 95927
If you believe your statement is wrong or if you need more information about a transaction listed on the statement, please contact us right away. We must hear from you no later than sixty (60) days after we sent you the FIRST statement on which the problem or error appeared. • Tell us your name and account number (if any)
• Describe the error or the transfer you are unsure about, and explain as clearly as you can why you believe it is an error or why you need more information • The dollar amount of the suspected error
If you tell us orally, we may require you to send us the complaint or question in writing within 10 business days. We will determine whether an error occurred within 10 business days after we hear from you and will correct any error promptly. If we need more time, however, we may take up to 45 days to investigate a complaint or question. If we decide to do this, we will credit your account within 10 business days for the amount you think is in error, so that you will have the use of the money during the time it takes us to complete our investigation. If we ask you to put 265
your complaint or question in writing, and we do not receive it within 10 business days, we may not credit your account. For errors involving new accounts, point-of-sale, or foreign-initiated transactions, we may take up to 90 days to investigate your complaint or question. For new accounts, we may take up to 20 business days to credit your account for the amount you think is in error. We will tell you the results within 3 business days after completing our investigation. If we decide that there was no error, we will send you a written explanation. You may request copies of the documents that were used in the investigation.
Tri Counties Bank Mobile & Online Banking Agreement and Disclosure. 01/2024 266
CONTRACT FOR DEPOSIT OF MONEYS
THIS CONTRACT, relating to the deposit of moneys, made as of the _____ day of _______________, 20______ between _________________________(hereinafter designated "Treasurer") acting in official capacity as ___________________("Treasurer," "Finance Director," etc.) of ______________________ (hereinafter designated "Depositor"), and Tri Counties Bank (hereinafter designated "Depository"), having a paid-up capital and surplus in excess of One Billion Dollars ($1,000,000,000).
WITNESSETH:
WHEREAS, the Treasurer proposes to deposit in the Depository from time to time, commencing on ________________________, 20___ moneys in his/her custody in an aggregate amount on deposit at any one time not to exceed ____________________________ Dollars ($ _________________); or the total of the paid-up capital and surplus of the Depository, whichever is the lesser amount, and said moneys will be deposited subject to Title 5, Division 2, Part 1, Chapter 4, Article 2 (commencing with Section 53630) of the Government Code of the State of California; and WHEREAS, said provisions of the Government Code require the Treasurer to enter into a contract with the Depository setting forth the conditions upon which said moneys are deposited; and WHEREAS, in the judgment of the Treasurer, this contract is to the public advantage; NOW, THEREFORE, it is agreed between the parties hereto as follows:
1. This contract cancels and supersedes any previous contracts between the Treasurer and the Depository relating to the method of handling and collateralization of deposits of moneys.
2. This contract, but not deposits then held hereunder, shall be subject to termination by the Treasurer or the Depository at any time upon 30 days' written notice. Deposits may be withdrawn in accordance with the agreement of the parties and applicable federal and state statutes, rules and regulations. This contract is subject to modification or termination upon enactment of any statute, rule or regulation, state or federal, which, in the opinion of the Administrator of Local Agency Security, is inconsistent herewith, including any change relative to the payment of interest upon moneys so deposited by the Treasurer.
3. Interest shall accrue on any moneys so deposited as permitted by any act of the Congress of the United States or by any rule or regulation of any department or agency of the Federal Government adopted pursuant thereto. If interest may legally be paid, all moneys deposited in accordance with this contract shall bear interest at a rate agreed upon by the Treasurer and the Depository.
4. The Depository shall issue to the Treasurer at the time of each inactive deposit a receipt on a form agreed to by the Depository and the Treasurer, stating the interest to be paid, if any, the duration of the deposit, the frequency of interest payments, and the terms of withdrawal. Each such deposit receipt is by reference made a part of this contract.
5. As security for said deposit, the Depository shall at all times maintain with the Agent of Depository named herein, commencing forthwith, eligible securities having a market value at least 10% in 267
excess of the actual total amount of local agency moneys on deposit with the Depository. If any eligible security is determined by the Administrator of Local Agency Security of the State of California in accordance with Government Code Section 53661 to be not qualified to secure public deposits, additional security shall be substituted immediately by the Depository, as necessary, to comply with the requirements of this Paragraph.
6. Eligible securities are those listed in Government Code Section 53651.
7. The Agent of Depository, authorized by the Treasurer and the Depository to hold the eligible securities posted as collateral under this contract is The Independent Bank (TIB). Said Agent of Depository has filed with the Administrator of Local Agency Security of the State of California an agreement to comply in all respect with the provisions of Title 5, Division 2, Part 1, Chapter 4, Article 2 (commencing with Section 53630) of the Government Code. A copy of this agreement is attached hereto.
8. Authority for placement of securities for safekeeping in accordance with Government Code Section 53659 is hereby granted to the Agent of Depository, including placement with any Federal Reserve Banks or branches thereof, and the following banks, other than the Depository, located in cities designated as reserve cities by the Board of Governors of the Federal Reserve System:
9. If the Depository fails to pay all or part of any deposits of the Treasurer which are subject to this contract when ordered to do so in accordance with the terms of withdrawal set forth on the deposit receipt (which is by reference made a part hereof), the Treasurer will immediately notify, in writing, the Administrator of Local Agency Security. Action of the Administrator in converting the collateral required by Paragraph 5 above for the benefit of the Treasurer is governed by Government Code Section 53665.
10. The Depository may add, substitute or withdraw eligible securities being used as security for deposits made hereunder in accordance with Government Code Section 53654, provided the requirements of Paragraph 5 above are met.
11. The Depository shall have and hereby reserves the right to collect the interest on the securities, except in cases where the securities are liable to sale or are sold or converted in accordance with the provisions of Government Code Section 53665.
12. The Depository shall bear the expenses of transportation of eligible securities maintained as collateral to and from the designated Agent of Depository.
13. This contract, the parties hereto, and all deposits governed by this contract shall be subject in all respects to Title 5, Division 2, Part 1, Chapter 4, Article 2 (commencing with Section 53630) of the Government Code, and of all other state and federal laws, statutes, rules and regulations applicable to such deposits, whether now in force or hereafter enacted or promulgated, all of which are by this reference made a part hereof.
IN WITNESS WHEREOF, the Treasurer in his/her official capacity has signed this contract in duplicate and the Depository has caused this contract to be executed in like number by its duly authorized officers.
TREASURER/FINANCE DIRECTOR:
By
DEPOSITORY: Tri Counties Bank
By
268
63 Constitution Drive • Chico • California 95973 • (530) 898-0300 • Fax: (530) 898-0310 www.tricountiesbank.com
WAIVER OF SECURITY
TO WHOM IT MAY CONCERN:
Pursuant to Section 53653 of the Local Agency Deposit Security Law, a treasurer may, at his discretion, waive security for such portions as are insured pursuant to Federal Law.
WHEREAS, it is the advantage of Tri Counties Bank to increase the amount of its available collateral to secure the deposits of public accounts, and in so doing, without increasing the risk of the deposits of such public accounts;
NOW, THEREFORE, the authorized agent of _________________________________________, a public institution, hereby agrees to waive the security required by Section 53653 of the Local Agency Deposit Security Law by Tri Counties Bank the Depository Association for up to the maximum federally insured amount of certain deposits of the described public institution. As a condition to the granting of this Waiver of Security, it is understood that Tri Counties Bank shall continue to maintain approved collateral security for all those deposits in excess of the maximum federally insured amount per Section 53653 of the Local Agency Deposit Security Law.
I authorize Tri Counties Bank to waive security per Section 53653 of the Local Agency Deposit Security Law.
Date: _____________________________
Local Agency entity: _____________________________
Authorized Signer _____________________________
Title: _____________________________
TAX ID of entity _____________________________
269
Form # XX/XX Member FDIC
RESOLUTIONS FOR ACCEPTANCE OF
TREASURY MANAGEMENT SERVICES
(the “Company”)
I/we, the undersigned (“Undersigned”), herby certify to Tri Counties Bank (“Bank”) that the undersigned am/are the individual owner of the sole proprietorship, or the secretary of the corporation, or all the general partners, or all the members (if management is by members), or all the managers (if management is by the managers), or all the representatives of the governing body of the Company, and designated keeper of the records and minutes of the Company.
WHEREAS, the following is a true and correct copy of Company Resolutions duly adopted by the Board of Directors (if a corporation), the partners (if a partnership), members/managers (if a limited liability Company), proprietor (if a sole proprietorship) or other governing authority of the Company at a meeting held on the day of , 20 , at which a quorum was present and acting throughout, or adopted by the written consent of a majority of those entitled or required to act to bind the Company, and that such Company Resolutions are in full force and effect and have not been amended, modified or repealed; WHEREAS, the Company has reviewed and approved the Tri Counties Bank Acceptance of Treasury Management Services, pursuant to which the Company agrees to be bound by the Tri Counties Bank Master Treasury Agreement, together with each applicable Service Description, including any Supporting Documents, corresponding exhibits, schedules or attachments to the same, which apply to the services designated by Company in the Acceptance (collectively referred to herein as the “Acceptance”) to be entered into by and between the Company and Tri Counties Bank (“Bank”); WHEREAS, defined terms in this document shall have the meaning provided in the Acceptance, unless otherwise provided herein; and
WHEREAS, the Company has determined that it is in the best interests of the Company to enter into the Acceptance in connection with the Services and subject to the terms and conditions of the Acceptance, as amended from time to time.
NOW, THEREFORE, BE IT RESOLVED AS FOLLOWS:
(i) The Company finds that it is in the best interest of the Company to enter into the Acceptance, as amended from time to time; (ii) The Company authorizes and appoints to execute and deliver the Acceptance; (iii) The foregoing named person is authorized to negotiate terms and conditions of the Acceptance, amendments or supplements to the Acceptance; and
(iv) The authority given above will continue, and the Bank may rely on the actions of such person referred to above, until such time as the Bank is given formal written notice of the revocation of such authority and the Bank has an opportunity to respond to the same. All acts and deeds taken by such person referred to above shall be deemed the act and deed of the Company for all purposes relating to the Acceptance and to all services described in the Acceptance or provided by the Bank to the Company under the Acceptance.
The Undersigned hereby certify under penalty of perjury under the laws of the state of California that the forgoing resolutions were duly and legally adopted by the governing body of the Company and that said Resolutions have not been revoked and are currently in full force and effect:
Signature: Signature:
Title: Title:
Print Name: Print Name:
Date: Date:
Signature: Signature:
Title: Title:
Print Name: Print Name:
Date: Date:
270
271
15 EXHIBIT C
FEE SCHEDULE
272
Account Services
Monthly Maintenance 2 $ 25.00 $ 50.00
Stop Payment 0 $ 34.00 $ -
Online Banking Services
Trico Treasury Center (per enrollment) 1 $ 18.00 $ 18.00 5.,6.,10.,11.,13 Depository Services
Checks Deposited 242 $ 0.20 $ 48.40 3.
Checks Paid 229 $ 0.22 $ 50.38
Deposits 8 $ 1.75 $ 14.00
Electronic Credits 47 $ 0.22 $ 10.34
Electronic Debits 10 $ 0.22 $ 2.20
Cash Handling (per $1,000) 5 $ 1.60 $ 8.00 2.
Returned Items/Checks 1 $ 10.00 $ 10.00
Remote Deposit Services
Remote Deposit Capture 1 $ 35.00 $ 35.00 17.
RDC Scanner Lease (per Scanner) 1 $ 25.00 $ 25.00 17.
Remote Deposit Items 242 $ 0.05 $ 12.10 17.
ACH Services
ACH Credit Origination Module 1 $ 35.00 $ 35.00 12.,14.,15.,16.
ACH Originated Per Item 240 $ 0.17 $ 40.80 12.,14.,15.,16.
Wire Services
Wire Origination Module 1 $ 20.00 $ 20.00 8.
Incoming Wire 1 $ 15.00 $ 15.00 8.
Outgoing Online Domestic Wire 2 $ 12.50 $ 25.00 8.
Fraud Prevention Services
Payee Positive Pay 1 $ 60.00 $ 60.00 1.
ACH Positive Pay 1 $ 20.00 $ 20.00 1.
Positive Pay Paid Item 239 $ 0.05 $ 11.95 1.
TOTAL $ 511.17
*Volumes are based on 3 month average from US Bank Analysis Statements *Worksheet with formulas is provided as Schedule 1. No one-time setup fees are charged.
PRICING
SERVICE VOLUME UNIT
PRICE TOTAL FEE
ATTACHMENT 2
PRICING FORM
273
1. Positive pay system for the operating account
2. Currency deposits
3. Check deposits
4. Deposit error corrections No Fee
5. Online system access to all account activity
6. On-line stop payments
7. NSF/Returned Item (two attempts to clear) No Fee
8. Wire transfers (in and out)
9. Courier services (weekly) No Fee
10. Account reconciliations Included with Treasury Center
11. Access to cleared checks/imaging Included with Treasury Center
12. ACH processing
13. ACH return information Included with Treasury Center
14. Federal and State tax payments by phone or on-line system
15. Direct deposit for employee payroll
16. Payroll tax payments
17. Remote Deposit
18. Procurement Cards No Fee
19. FDIC Insurance No Fee
KEY COMMENTS
274
Town of Paradise
Council Agenda Summary
Date: February 13, 2024
Agenda Item: 6(b)
ORIGINATED BY: Colin Nelson, Capital Projects Manager
REVIEWED BY: Jim Goodwin, Town Manager
SUBJECT: Award Contract No. 2023-005 Progressive Design Build Services to Mountain Cascade/Carollo Engineers
for the Paradise Sewer Project
LONG TERM
RECOVERY PLAN:
Yes
COUNCIL ACTION REQUESTED:
1. Consider concurring with staff’s recommendation for awarding the contract for Progressive Design Build Services for the Paradise Sewer Project to the Mountain Cascade-Carollo team, and,
2. Authorize the Town Manager to enter into a Progressive Design Build Contract (2023- 005) with the recommended firm, contingent upon approval by the Town Attorney, and,
3. Adopt Resolution No. 2024-__, “A Resolution Designating Authority to the Paradise Town Manager to Execute Individual Contract Amendments Under the Resultant Progressive Design Build Contract for RFQ 2023-005 Progressive Design Build Services with Mountain Cascade/Carollo Engineers for the Paradise Sewer Project up to the maximum contract aggregate amount of $17,000,000 to complete the initial design and progressive design build process for the Paradise Sewer Project” (ROLL
CALL VOTE)
Background:
Since its incorporation in 1979, the Town has sought a formal wastewater treatment solution for the community, with service for commercial and densely populated residential areas being a priority. Failed and failing septic systems create public health and environmental concerns and have limited economic growth. Prior to the Camp Fire, which almost completely destroyed the town in 2018, Paradise was the largest unsewered community in California. The Town has prepared numerous studies to address its need for a centralized wastewater treatment solution, and in its most recent study, the Town identified a proposed sewer service area. The proposed sewer service area includes the Town’s commercial corridors, and as described in the 2017 feasibility study, it represented the area that had the most septic systems that had failed or were projected to fail by 2022.
The Paradise Sewer Project consists of three primary components: Core Collection System, Export Pipeline System, and Extended Collection System. The Core Collection System would support the centralized businesses and housing in Town, including approximately 1,500 parcels 275
along the Skyway, Clark Road, and Pearson Road corridors. The proposed Export Pipeline System would start at the southern end of the Core Collection System as a gravity sewer line and would continue southwest approximately 18 miles to the City of Chico for connection to the Chico Water Pollution Control Plant. Other than the Town of Paradise flow, no other connections will be allowed to the export pipeline. The Extended Collection System would be an extension of the Core Collection System that would allow collection of sewage from parcels outside the Core Collection System, but within the Town limits.
The Town of Paradise has secured $30 million for pre-construction phases of work (environmental, design, right of way, and permitting) and an additional $15 Million for construction through Community Development Block Grant Disaster Recovery Planning and Infrastructure funds to facilitate the design phase of the Paradise Sewer Project.
Analysis:
On October 30, 2023, staff issued a formal Request for Qualifications (RFQ 2023-005) utilizing formal selection procedures in compliance with Paradise Municipal Code, State and Federal requirements including regulations for typical federally funded projects as well as specific requirements utilizing CDBG-DR funds. The RFQ stated the scope of work for the Progressive Design Build Services and requested proposers provide their qualifications and experience and included price as a component.
In general, the Scope of Work for the Progressive Design Build Team is as follows:
Develop and implement Project Management Plan, including all schedule and cost tools. Perform Risk Management and Mitigation activities.
Establish and maintain Change Management Plan
Develop and implement Project Health and Safety practices. Facilitate resolution of Project issues and challenges Support Project funding activity
Support Public Information activity
Provide additional Town-requested, Project-specific services necessary for Project success
Lead engineering and design team resources
Develop design deliverables
Support Project funding activity
Recommend technology solutions
Facilitate review of construction submittals and verify design intent is being met during construction
Manage interface between design and construction team members Support Project funding activity
Prepare and maintain a Project Cost Model and Project Schedule Provide constructability input during design.
Prepare equipment and subcontract procurement plans.
Develop procurement and construction proposal(s) and negotiate in good faith Deliver constructed work
Support Project funding requirements
Manage self-performing and subcontracted work
276
Manage craft labor
Maintain site safety and security
Perform engineering services during construction
Obtain and comply with government approvals and permits for which the Design-Builder is responsible
Provide warranty coverage for constructed work
Maintain and transmit as-built drawings to the Town at construction completion Participate in the early development of the operations plan Coordinate construction activities with and lead assigned testing, commissioning, startup, and training activities, coordinating with future O&M staff to minimize impacts Provide timely and complete submission of manufacturer’s equipment O&M materials Prepare system O&M manual
The contract term for the Progressive Design Build Team is designed for a base term of five years, with the possibility of one-year extensions at the sole discretion of the Town Manager.
By December 15, 2023 at 12:00 P.M., Town staff had received seven (7) responses to the RFQ.
The proposers are listed below:
1. Kiewit / Woodard & Curan
2. Flatiron / Rasic JV
3. Teichert / AECOM JV
4. Preston Pipelines / Sandis Engineers
5. Mountain Cascade / Carollo Engineers
6. Sukut / West Coast Civil
7. Garney
A five-member evaluation committee was formed to evaluate the proposals, including the following members:
Ashley Stanley, Butte County Department of Public Works Marc Mattox, Town of Paradise Public Works Director/Town Engineer Jim Goodwin, Town of Paradise, Town Manager
Colin Nelson, Town of Paradise, Capitol Projects Manager Guy Voss, HDR, Town of Paradise Owners Agent
The Committee received and ranked the proposals according to the criteria provided in the RFQ and shown in Table 1 below.
Table 1: Evaluation Criteria Table
Section Evaluation Criteria Points
Possible
1 Respondent Profile and Minimum Requirements (Pass/Fail) 2 Project Understanding and Project Approach 30
3 Project Team and Organizational Structure 10
4 Key Personnel 30
5 Relevant Project Experience 25
277
6 BODR Scope of Services, Schedule and Fee 5
Committee review of the proposals was performed independently. Evaluation scoring & ranking are shown in Table 2 below.
Table 2
Staff recommends Council consider awarding contract 2023-005 to the Mountain Cascade/ Carollo Engineers Progressive Design Build Team to complete final design on the Paradise Sewer Project and eventually construct the project once construction funding is secured.
The proposed Progressive Design Build Contract is attached to this Agenda Summary. Council is requested to approve this Agreement in its current form and any minor modifications prior to full Contract execution by the Town Manager as approved by the Town Attorney. Minor modifications are defined as agreed items which do not affect the cost or delivery of the project.
Following award of the Progressive Design Build Contract, staff and the Progressive Design Build team will immediately begin work on Phase 1A, as described in the Contract, to deliver a Basis of Design Report. Subsequent to completion of the Basis of Design Report, the Town Manager will be authorized to execute subsequent Contract Amendments to deliver the remaining Project services described under the not-to-exceed aggregate amount of $17M approved by Council.
Future Council actions relating to this contract award will include major milestones such as amendments to include construction services.
Financial Impact:
The Progressive Design Build Contract and associated Contract Amendments will include a combination of federal and state funds with an estimated not-to-exceed aggregate amount of $17,000,000. It is anticipated all costs associated with this Agreement will be sourced to the $30 million CDBG-DR award.
Attachments:
1. Resolution approving Contract 2023-005
2. Agreement (Contract) for Progressive Design Build Services for the Paradise Sewer Project
3. Scope of services for the PDB contract
278
4. Schedule
5. Budget for phase 1A up to the Basis of Design Report 279
1 TOWN OF PARADISE
RESOLUTION NO. 2024-__
RESOLUTION DESIGNATING AUTHORITY TO THE PARADISE TOWN MANAGER
TO EXECUTE INDIVIDUAL CONTRACT AMENDMENTS UNDER
THE RESULTANT PROGRESSIVE DESIGN BUILD CONTRACT
FOR RFQ 2023-005 PROGRESSIVE DESIGN BUILD SERVICES WITH MOUNTAIN
CASCADE/ CAROLLO ENGINEERS FOR THE PARADISE SEWER PROJECT UP TO THE MAXIMUM CONTRACT AGGREGATE AMOUNT OF $17,000,000
TO COMPLETE THE INITIAL DESIGN AND PROGRESSIVE DESIGN BUILD PROCESS FOR THE PARADISE SEWER PROJECT.
WHEREAS, the 2018 Camp Fire caused unprecedented damage to the Town of Paradise and has necessitated a variety of recovery projects which are further guided by the Paradise Long-Term Recovery Plan;
WHEREAS, the Paradise Sewer Project is by far the largest project in scale, cost and overall benefit to the community;
WHEREAS, to ensure delivery of the Town of Paradise Sewer Project, Town staff issued a Request for Qualifications “Progressive Design Build Services for the Paradise Sewer Project” (RFQ 2023-005);
WHEREAS, RFQ 2023-005 was designed for a base term of five years, with the possibility of one-year extensions at the sole discretion of the Town Manager; WHEREAS, RFQ 2023-005 was designed for a not-to-exceed aggregate contract amount of $17,000,000 to be issued as individual contract amendments to the Progressive Design Build Contract;
WHEREAS, RFQ 2023-005 was prepared and reviewed under the most stringent of procurement standards, meeting Paradise Municipal Code, State and Federal requirements;
WHEREAS, RFQ 2023-005 was advertised on October 30, 2023 for work relating to the Town of Paradise Sewer Project, with major scopes of work categories listed below:
Develop and implement a Project Management Plan, including all schedule and cost tools
Perform Risk Management and Mitigation activities
Establish and maintain a Change Management Plan
Develop and implement a Project Health and Safety practices Facilitate resolution of Project issues and challenges Support Project funding activity
Support Public Information activity
Provide additional Town-requested, Project-specific services necessary for Project success
Lead engineering and design team resources
280
2 Develop design deliverables
Support Project funding activity
Recommend technology solutions
Facilitate review of construction submittals and verify design intent is being met during construction
Manage interface between design and construction team members Prepare and maintain a Project Cost Model and Project Schedule Provide constructability input during design
Prepare equipment and subcontract procurement plans
Develop procurement and construction proposal(s) and negotiate in good faith Deliver constructed work
Support Project funding requirements
Manage self-performing and subcontracted work
Manage craft labor
Maintain site safety and security
Perform engineering services during construction
Obtain and comply with government approvals and permits for which the DesignBuilder is responsible Provide warranty coverage for constructed work
Maintain and transmit as-built drawings to the Town at construction completion Participate in the early development of the operations plan Coordinate construction activities with and lead assigned testing, commissioning, startup, and training activities, coordinating with future O&M staff to minimize impacts
Provide timely and complete submission of manufacturer’s equipment O&M materials
Prepare system O&M manual
WHEREAS, seven (7) proposals were received by December 15, 2023, and following subsequent evaluation and interview, the Mountain Cascade-Carollo Team was recommended for the Progressive Design Build Contract;
WHEREAS, by designating the Town Manager authority to execute all contract amendments associated with RFQ 2023-005, full benefits of this robust procurement process will be realized.
NOW, THEREFORE, BE IT RESOLVED, by the Town Council of the Town of Paradise as follows:
Section 1. The above recitals are true and correct and are incorporated as if fully set forth herein.
Section 2. The Paradise Town Manager is authorized to execute a Progressive Design Build Contract with the above-recommended Progressive Design Build Team in its current form including any current or subsequent minor modifications approved in writing by the Town Attorney. Minor modifications are defined as agreed items which do not affect the cost or delivery of the project.
281
3 Section 3. The Paradise Town Manager is authorized to execute individual contract amendments under the Progressive Design Build Contract for RFQ 2023-05 Progressive Design Build Services for the Paradise Sewer Project, not to exceed the maximum contract aggregate amount of $17,000,000 to complete the initial design and progressive design build process for the Paradise Sewer Project and for a base term of five years, with the possibility of one-year extensions.
PASSED AND ADOPTED by the Town Council of the Town of Paradise on this 13th day of February, 2024, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
By:
Ronald Lassonde, Mayor
ATTEST:
Dina Volenski, CMC, Town Clerk
APPROVED AS TO FORM:
Scott E. Huber, Town Attorney
282
HDW Draft 2/2/24
3835755.8 047018 CTR
DESIGN-BUILD CONTRACT
FOR THE
TOWN OF PARADISE SEWER PROJECT
between
THE TOWN OF PARADISE
and
MOUNTAIN CASCADE, INC.
Dated
[___________, 2024]
283
3835755.8 047018 CTR
[This Page Intentionally Left Blank]
284
(i)
3835755.8 047018 CTR
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INTERPRETATION
SECTION 1.1. DEFINITIONS ................................................................................................. 3 SECTION 1.2. INTERPRETATION ........................................................................................ 26 (A) Gender and Plurality ............................................................................ 26 (B) Persons ............................................................................................... 26 (C) Headings ............................................................................................. 26 (D) References Hereto ................................................................................ 26 (E) References to Days and Time of Day ..................................................... 26 (F) References to Including ........................................................................ 27 (G) References to Statutes ......................................................................... 27 (H) References to the Town, Governmental Bodies and Private Persons ....... 27 (I) References to Documents and Standards.............................................. 27 (J) References to All Reasonable Efforts ..................................................... 27 (K) Entire Agreement ................................................................................. 27 (L) Standards of Workmanship and Materials ............................................ 27 (M) Technical Standards and Codes ........................................................... 27 (N) Causing Performance ........................................................................... 28 (O) Party Bearing Cost of Performance ....................................................... 28 (P) Good Engineering and Construction Practice ........................................ 28 (Q) Interpretation of Contract Documents .................................................. 28 (R) Applicability, Stringency and Consistency of Contract Standards .......... 28 (S) Delivery of Documents in Digital Format .............................................. 28 (T) Severability .......................................................................................... 29 (U) Drafting Responsibility ......................................................................... 29 (V) No Third-Party Rights .......................................................................... 29 (W) Acting Reasonably and in Good Faith; Discretion .................................. 29 (X) Counterparts ....................................................................................... 29 (Y) Governing Law ..................................................................................... 29 (Z) Defined Terms ..................................................................................... 29 (AA) Interpolation ........................................................................................ 29 (BB) Accounting and Financial Terms .......................................................... 29 (CC) References to Dollar Amounts .............................................................. 29 (DD) Liquidated Damages ............................................................................ 30 (EE) Convenience Termination ..................................................................... 30 ARTICLE 2
DESIGN-BUILDER REPRESENTATIONS AND WARRANTIES
SECTION 2.1. REPRESENTATIONS AND WARRANTIES OF THE DESIGN-BUILDER ............. 31 (A) Existence and Powers .......................................................................... 31 (B) Due Authorization and Binding Obligation ........................................... 31 (C) No Conflict........................................................................................... 31 (D) No Commitments Limiting Ability to Perform Contract Obligations ........ 31 (E) No Approvals Required ......................................................................... 31 (F) Licensing and Registration Requirements ............................................. 31 (G) No Litigation ........................................................................................ 32 285
Table of Contents
(continued)
Page
(ii)
3835755.8 047018 CTR
(H) Claims and Demands ........................................................................... 32 (I) Applicable Law Compliance .................................................................. 32 (J) Information Supplied by the Design-Builder ......................................... 32 (K) Intellectual Property ............................................................................. 32 (L) Practicability of Performance ................................................................ 32 (M) Required Insurance ............................................................................. 32 ARTICLE 3
TERM
SECTION 3.1. EFFECTIVE DATE AND TERM....................................................................... 33 (A) Term ................................................................................................... 33 (B) Accrued Rights .................................................................................... 33 SECTION 3.2. SURVIVAL .................................................................................................... 33 ARTICLE 4
GENERAL PERFORMANCE REQUIREMENTS
SECTION 4.1. PROJECT SCOPE AND PERSONNEL ............................................................. 35 (A) Project Scope Generally ........................................................................ 35 (B) Pricing Established on the Contract Date ............................................. 35 (C) Pricing Established Subsequent to the Contract Date ........................... 35 (D) Estimated Substantial Completion Date ............................................... 35 SECTION 4.2. DESIGN-BUILDER RESPONSIBILITIES GENERALLY ..................................... 35 (A) Reliance .............................................................................................. 35 (B) Scope of the Contract Obligations......................................................... 36 (C) Cooperation ......................................................................................... 36 (D) Responsibility for Personnel and Subcontractors .................................. 36 (E) Stationing of Key Personnel .................................................................. 36 SECTION 4.3. ENVIRONMENTAL REVIEW .......................................................................... 37 (A) CEQA .................................................................................................. 37 (B) NEPA ................................................................................................... 37 SECTION 4.4. ACCESS TO AND SUITABILITY OF THE PROJECT SITES ............................... 37 (A) Familiarity with the Project Sites .......................................................... 37 (B) Independent Verification of the Town-Provided Project Sites Information ....................................................................................... 38 (C) Access to the Project Sites .................................................................... 38 (D) Core Collection System Rights of Way ................................................... 39 (E) Export Pipeline System Rights of Way................................................... 39 (F) Project Sites Signage ............................................................................ 39 SECTION 4.5. INFORMATION PROVIDED BY OR ON BEHALF OF THE TOWN ...................... 39 (A) Generally ............................................................................................. 39 SECTION 4.6. COMPLIANCE WITH APPLICABLE LAW ......................................................... 39 (A) Compliance with Applicable Law Generally ........................................... 39 (B) Compliance with Conditions in Governmental Approvals ...................... 40 (C) Fines, Penalties and Remediation ......................................................... 40 (D) Compliance with Conditions in Grants ................................................. 40 SECTION 4.7. ENGAGEMENT OF TOWN REPRESENTATIVES ............................................. 41 SECTION 4.8. OWNERSHIP AND USE OF DOCUMENTS AND INFORMATION ....................... 41 SECTION 4.9. MONTHLY PROGRESS REPORTS .................................................................. 41 286
Table of Contents
(continued)
Page
(iii)
3835755.8 047018 CTR
ARTICLE 5
PRELIMINARY SERVICES
SECTION 5.1. SCOPE OF THE PRELIMINARY SERVICES ..................................................... 43 (A) Generally ............................................................................................. 43 (B) Phase 1a Base Preliminary Services; Notice to Proceed .......................... 43 (C) Phase 1b Base Preliminary Services ..................................................... 43 (D) Phase 1b Base Preliminary Services; Notice to Proceed.......................... 45 (E) No Obligation of Town to Enter Into a Phase 1b Preliminary Services Amendment ......................................................................... 45 SECTION 5.2. CHANGES TO THE SCOPE OF THE PRELIMINARY SERVICES ....................... 45 (A) Generally ............................................................................................. 45 (B) Additional Preliminary Services ............................................................ 45 (C) Additional Preliminary Services Resulting From Delay .......................... 46 (D) Exclusions from Additional Preliminary Services ................................... 46 (E) Changes that Reduce the Scope of the Preliminary Services .................. 47 SECTION 5.3. PRELIMINARY SERVICES SCHEDULE .......................................................... 47 SECTION 5.4. COORDINATION WITH TOWN ....................................................................... 47 (A) Meetings and Reports Generally ........................................................... 47 (B) Information Provided by the Town ........................................................ 47 (C) Required Design Information ................................................................ 48 (D) Revisions to Drawings and Specifications ............................................. 48 SECTION 5.5. PROJECT DESIGN ....................................................................................... 48 (A) Design Considerations ......................................................................... 48 (B) Design-Builder Assumption of Full Design Liability .............................. 49 SECTION 5.6. EARLY WORK PACKAGES ............................................................................ 49 (A) Early Work Packages ........................................................................... 49 (B) Early Work Package Submittals ........................................................... 49 (C) Early Work Package Submittal Revisions .............................................. 50 (D) Negotiation and Execution ................................................................... 50 (E) Complete Early Design-Build Work Package Pricing .............................. 50 (F) Compensation Payable in Connection With Early Work Packages .......... 51 (G) Design-Builder Representations in an Early Work Package Amendment ...................................................................................... 51 (H) Limited Authorization to Proceed; Commencement of Early Work Package ............................................................................................ 51 SECTION 5.7. GMP SUBMITTAL ......................................................................................... 51 (A) Preliminary Services and GMP Submittal .............................................. 51 (B) Derivation of Proposed Base Guaranteed Maximum Price ..................... 53 (C) Preliminary Services Fee, Design-Builder Fee and General Conditions Fee .................................................................................. 53 (D) Early GMP Submittal ........................................................................... 53 SECTION 5.8. GMP AMENDMENT ...................................................................................... 54 (A) Non-Compliant GMP Submittal ............................................................ 54 (B) Negotiation and Execution of the GMP Amendment .............................. 54 (C) Base Guaranteed Maximum Price Negotiating Principles ....................... 54 (D) Obligations of the Design-Builder Relating to the GMP Amendment ...... 55 (E) No Obligation of the Town to Enter Into a GMP Amendment.................. 55 (F) Elective Continuance of the Project by the Parties on Other Bases ........ 55 (G) Elective Continuance of the Project by the Town with Other Contractors; Project Documents ........................................................ 56 287
Table of Contents
(continued)
Page
(iv)
3835755.8 047018 CTR
(H) Design-Builder Representations in a GMP Amendment ......................... 56 (I) Performance Bond and Payment Bond .................................................. 57 SECTION 5.9. APPROVALS REQUIRED PRIOR TO DESIGN-BUILD PERIOD ......................... 57 ARTICLE 6
DESIGN-BUILD WORK
SECTION 6.1. DESIGN-BUILD PERIOD WORK GENERALLY ................................................ 59 (A) Authorization to Proceed; Commencement and Completion of the Design-Build Period Work ................................................................. 59 (B) Elements of the Design-Build Period Work ............................................ 59 (C) Sequencing and Staging of Design-Build Period Work ........................... 60 (D) Construction Work Hours .................................................................... 60 (E) Laydown Areas .................................................................................... 60 (F) Design-Build Period Work Schedule and Reports .................................. 60 (G) On-Site Meetings and Design and Construction Review ........................ 61 (H) Construction Utilities ........................................................................... 61 (I) Quality Assurance and Quality Control ................................................ 61 (J) Title and Risk of Loss ........................................................................... 61 (K) Encumbrances .................................................................................... 61 (L) Notice of Default .................................................................................. 61 (M) Required Project Manager Certification ................................................. 62 (N) Partnering Requirements ..................................................................... 62 (O) Temporary Project Sites Facilities ......................................................... 62 (P) Sensitivity to Stakeholders ................................................................... 62 (Q) Utility Coordination and Relocation ...................................................... 62 SECTION 6.2. CONSTRUCTION COMMENCEMENT DATE ................................................... 63 (A) Construction Commencement Date Generally ....................................... 63 (B) Establishment of the Construction Commencement Date ...................... 64 (C) Effect of the Establishment of the Construction Commencement Date.................................................................................................. 64 SECTION 6.3. DIFFERING SITE CONDITIONS ..................................................................... 64 (A) Preliminary Services Relating to Differing Site Conditions ..................... 64 (B) Commencing Subsurface Excavations .................................................. 64 (C) Discovery of Differing Site Conditions ................................................... 65 (D) Relief for Differing Site Conditions ........................................................ 65 SECTION 6.4. REGULATED SITE CONDITIONS ................................................................... 65 (A) Design-Builder Responsibilities ............................................................ 65 (B) Cultural Resources .............................................................................. 66 (C) Endangered Species ............................................................................. 66 (D) Encountering of Regulated Substances ................................................. 66 (E) Uncontrollable Circumstance Relief ...................................................... 66 (F) Generator Liability ............................................................................... 67 SECTION 6.5. PERMITTING RESPONSIBILITIES AND SCHEDULE ....................................... 67 (A) Design-Builder Governmental and Non-Governmental Approval Responsibility Generally .................................................................... 67 (B) Application Process .............................................................................. 67 (C) Town Managed Governmental Approval Responsibility .......................... 67 (D) Design-Builder Responsibility For the Town Managed
Governmental Approvals and Town Managed Non-Governmental Approvals .......................................................................................... 68 288
Table of Contents
(continued)
Page
(v)
3835755.8 047018 CTR
(E) No Relief for Delays or Conditions in Design-Builder Managed Governmental Approvals or Design-Builder Managed NonGovernmental Approvals ................................................................... 69 (F) Adjustment to Scheduled Substantial Completion Date Based on Delays in Obtaining Town Managed Governmental Approvals or Town Managed Non-Governmental Approvals .................................... 69 (G) Relief Based on Certain Permitting Terms and Conditions ..................... 69 SECTION 6.6. INTERFACE AND COORDINATION WITH OTHER ENTITIES ........................... 70 (A) City of Chico ........................................................................................ 70 (B) Butte County ....................................................................................... 70 (C) UPRR .................................................................................................. 70 (D) Caltrans .............................................................................................. 70 SECTION 6.7. FINAL DESIGN RESPONSIBILITIES AND RISK ASSUMPTION ......................... 70 (A) Performance of the Design Work........................................................... 70 (B) Sole Responsibility and Liability ........................................................... 71 (C) Town Review and Comment on Final Design Documents....................... 71 (D) Documents at the Project Site .............................................................. 71 SECTION 6.8. CHANGES TO THE BASELINE DESIGN DOCUMENTS AT DESIGNBUILDER REQUEST ..................................................................................... 71 (A) Town Consent Required ....................................................................... 71 (B) Notice and Information as to Proposed Change ..................................... 72 SECTION 6.9. OTHER CHANGES TO THE BASELINE DESIGN DOCUMENTS ....................... 72 (A) Changes Made Due to Uncontrollable Circumstances ........................... 72 (B) Changes Required by Governmental Bodies .......................................... 72 (C) Changes Required by the Town ............................................................ 73 SECTION 6.10. CHANGE PROCEDURES ............................................................................... 73 (A) Generally ............................................................................................. 73 (B) Design-Builder Change Order Proposal ................................................ 73 (C) Negotiation of Proposed Change Order .................................................. 73 (D) Effect of Design-Builder’s Signature ..................................................... 74 SECTION 6.11. WORK CHANGE DIRECTIVES ....................................................................... 74 (A) Town Right to Issue ............................................................................. 74 (B) Disagreement with Terms of a Work Change Directive .......................... 75 SECTION 6.12. DESIGN-BUILD PERIOD WORK DELIVERABLE MATERIAL............................ 75 SECTION 6.13. INTERFACE AND COORDINATION WITH TOWN, UTILITIES AND OTHER CONTRACTORS ........................................................................................... 75 (A) Maintenance of Operations During Construction .................................. 75 (B) Related Projects Generally .................................................................... 75 (C) Interrelated Work ................................................................................. 76 (D) Disputes Associated with Separate Work .............................................. 76 SECTION 6.14. SUSPENSION OF WORK ............................................................................... 76 SECTION 6.15. CONSTRUCTION PRACTICE ......................................................................... 77 (A) Exclusive Responsibility of Design-Builder ........................................... 77 (B) Project Sites Debris, Trash and Waste .................................................. 77 SECTION 6.16. RESPONSIBILITY FOR SAFETY AND SECURITY ............................................ 77 (A) Safety Manager .................................................................................... 77 (B) Precautions and Protection; Project Sites Security ................................ 77 (C) Health and Safety Inspections and Meetings ......................................... 78 (D) Health and Safety Compliance Requirements ........................................ 78 (E) Emergencies ........................................................................................ 79 (F) Traffic Control ..................................................................................... 79 289
Table of Contents
(continued)
Page
(vi)
3835755.8 047018 CTR
SECTION 6.17. CONSTRUCTION MONITORING, OBSERVATIONS, TESTING AND UNCOVERING OF WORK .............................................................................. 79 (A) Observations and Design-Build Work Review Protocol .......................... 79 (B) Factory Fabrication, Inspection and Testing ......................................... 79 (C) Design-Builder Tests ............................................................................ 80 (D) Certificates and Reports ....................................................................... 80 (E) Town Tests, Observations and Inspections ........................................... 80 (F) Notice of Covering Design-Build Work .................................................. 80 SECTION 6.18. CORRECTION OF WORK .............................................................................. 81 (A) Correction of Non-Conforming Design-Build Work ................................ 81 (B) Election to Accept Non-Conforming Design-Build Work......................... 81 (C) Relation to Other Obligations ............................................................... 81 SECTION 6.19. PROPERTY DAMAGE DURING THE DESIGN-BUILD PERIOD ......................... 81 (A) Damage Prevention .............................................................................. 81 (B) Restoration .......................................................................................... 82 (C) Notice and Reports ............................................................................... 82 (D) Insurance and Other Third-Party Payments .......................................... 82 (E) Payment for Restoration Work and Uninsured Costs ............................. 82 (F) Repair of the Town and Private Property ............................................... 83 SECTION 6.20. OPERATIONS AND MAINTENANCE MANUAL ................................................. 83 SECTION 6.21. PUNCH LIST ITEMS ...................................................................................... 83 (A) Punch List Requirements ..................................................................... 83 (B) Completion of Punch List Items ............................................................ 84 ARTICLE 7
MANAGEMENT, LABOR AND SUBCONTRACTORS
SECTION 7.1. MANAGEMENT ............................................................................................ 85 (A) Project Manager ................................................................................... 85 (B) Town Rights With Respect to Key Personnel ......................................... 85 SECTION 7.2. LABOR ......................................................................................................... 86 (A) Personnel Performance ........................................................................ 86 (B) Training of Design-Builder and Subcontractor Employees ..................... 86 (C) Labor Relations .................................................................................... 86 (D) Notice of Labor Disputes ...................................................................... 86 (E) Federal and State Prevailing Wage Requirements .................................. 86 (F) Labor Compliance ................................................................................ 88 (G) Non-Discrimination in Employment ..................................................... 88 (H) Drug-Free Workplace ........................................................................... 88 (I) Overtime Work ..................................................................................... 88 (J) Inclusion in Subcontracts .................................................................... 89 (K) Design-Builder Employee Whistleblower Rights and Requirement to Inform Employees of Whistleblower Rights ..................................... 89 (L) Employee-Related Insurance Coverage ................................................. 89 (M) Applicability of Certain Grant Requirements ......................................... 89 (N) Skilled and Trained Workforce Requirements........................................ 89 SECTION 7.3. SUBCONTRACTING GENERALLY .................................................................. 89 (A) Limited Right to Subcontract ............................................................... 89 (B) Approval Required ............................................................................... 90 (C) Performance Failure ............................................................................. 90 (D) Restricted Persons ............................................................................... 90 290
Table of Contents
(continued)
Page
(vii)
3835755.8 047018 CTR
(E) Subcontractor Licensing ...................................................................... 90 (F) Availability of Subcontractors and Key Personnel .................................. 90 (G) Assignability ........................................................................................ 91 (H) Prompt Payment .................................................................................. 91 (I) Subcontractor Claims .......................................................................... 91 (J) Design-Builder Employee Claims .......................................................... 91 (K) Subcontracting with Small and Minority Businesses, Women’s Business Enterprises and Labor Surplus Area Firms ......................... 92 SECTION 7.4. SELF-PERFORMANCE AND SUBCONTRACTOR SELECTION ......................... 92 (A) Self-Performed Construction Work Generally ........................................ 92 (B) Subcontractor Selection Generally ........................................................ 92 (C) Subcontracting Plan ............................................................................ 92 (D) Division of Work .................................................................................. 93 (E) Pre-Bid Conferences............................................................................. 93 (F) Competitive Procedures for Construction Work ..................................... 93 (G) Alternative Procedures for Construction Work ...................................... 94 (H) Procurement of Subcontractors Prior to the GMP Amendment Date ...... 94 (I) Use of Approved Subcontractors; Non-Substitution .............................. 94 (J) Security for Construction Subcontractor Performance .......................... 94 SECTION 7.5. TERMINATION, AMENDMENT, ASSIGNMENT AND REPLACEMENT OF MATERIAL SUBCONTRACTS ........................................................................ 95 (A) Termination, Amendment and Assignment ........................................... 95 (B) Replacement ........................................................................................ 95 ARTICLE 8
SUBSTANTIAL COMPLETION AND FINAL COMPLETION
SECTION 8.1. SUBSTANTIAL COMPLETION DATE CONDITIONS ......................................... 96 (A) Substantial Completion Date Conditions .............................................. 96 SECTION 8.2. CONCURRENCE OR DISAGREEMENT WITH SUBSTANTIAL COMPLETION DATE ..................................................................................... 97 (A) Substantial Completion Date Concurrence ........................................... 97 (B) Substantial Completion Date Disagreement .......................................... 97 SECTION 8.3. EFFECT OF UNEXCUSED DELAY; EXTENSION PERIOD ............................... 97 (A) Schedule for Completing the Design-Build Work ................................... 97 (B) Unexcused Delay ................................................................................. 97 (C) Delay Liquidated Damages ................................................................... 97 (D) Failure to Achieve Substantial Completion by End of Extension Period ............................................................................................... 98 SECTION 8.4. FINAL COMPLETION .................................................................................... 98 (A) Requirements of Final Completion ........................................................ 98 (B) Notice and Report of Final Completion .................................................. 98 (C) Achievement of Final Completion ......................................................... 99 ARTICLE 9
CONTRACT COMPENSATION
SECTION 9.1. COMPENSATION FOR PRELIMINARY SERVICES ......................................... 100 (A) Compensation for Base Preliminary Services ...................................... 100 (B) Compensation for Additional Preliminary Services .............................. 100 291
Table of Contents
(continued)
Page
(viii)
3835755.8 047018 CTR
(C) Payment Requests and Payment ......................................................... 100 (D) Non-Compliant Preliminary Services .................................................. 101 (E) Billing Statement Disputes ................................................................. 101 SECTION 9.2. DESIGN-BUILD PRICE ............................................................................... 101 SECTION 9.3. DESIGN-BUILD PRICE PAYMENT PROCEDURE .......................................... 101 (A) Payments .......................................................................................... 101 (B) Payment Request ............................................................................... 102 (C) Online Project Management System ................................................... 103 (D) Review and Payment .......................................................................... 103 (E) Payment Dispute Procedures .............................................................. 103 (F) Retainage .......................................................................................... 104 (G) Cost Control and Reporting ................................................................ 104 (H) Certification of Amounts Due ............................................................. 104 SECTION 9.4. PERMISSIBLE WITHHOLDINGS .................................................................. 104 (A) Permissible Withholdings ................................................................... 104 SECTION 9.5. PAYMENT UPON FINAL COMPLETION ........................................................ 105 (A) Final Completion Payment Request .................................................... 105 (B) Final Completion Payment ................................................................. 106 (C) Final Determination and Approval of Design-Build Price ..................... 107 (D) Completion of Design-Build Period Work ............................................ 107 SECTION 9.6. NO SUBSTANTIAL COMPLETION, WAIVER OR RELEASE ............................ 107 SECTION 9.7. CHANGES IN DESIGN-BUILD PRICE ........................................................... 108 (A) Determination of Base Guaranteed Maximum Price Adjustment .......... 108 (B) Design Professional Services .............................................................. 108 (C) Construction Subcontractor’s Maximum Mark-Up on
Subcontracted Construction Work ................................................... 108 SECTION 9.8. COST SUBSTANTIATION ............................................................................ 109 (A) Required Substantiation .................................................................... 109 (B) Cost Substantiation Certificate ........................................................... 109 SECTION 9.9. INTEREST ON OVERDUE OBLIGATIONS..................................................... 109 SECTION 9.10. RETENTION AND AUDIT OF BOOKS AND RECORDS ................................... 109 (A) Books and Records ............................................................................ 109 (B) Town Rights to Audit and Examine Payments ..................................... 110 (C) Notice and Process ............................................................................. 110 (D) Selection of Auditor or Examiner and Determination of Scope ............. 110 (E) Preservation of Books and Records ..................................................... 110 (F) Overpayment ..................................................................................... 111 ARTICLE 10
PROJECT WARRANTIES
SECTION 10.1. PROJECT WARRANTIES ............................................................................. 112 (A) Project Warranties Defined ................................................................. 112 (B) Term of the Project Warranties ........................................................... 112 SECTION 10.2. WARRANTY WORK ..................................................................................... 112 (A) “Call-Back” Obligations ...................................................................... 112 (B) Right of the Town to Proceed with Corrective Action; DesignBuilder Liability .............................................................................. 113 (C) No Period of Limitation on Other Obligations ...................................... 113 (D) Extension of Warranties ..................................................................... 113 (E) Manufacturers’ Warranties ................................................................. 113 292
Table of Contents
(continued)
Page
(ix)
3835755.8 047018 CTR
(F) Performance of Warranty Work........................................................... 113 (G) Responsibility for Costs ...................................................................... 114 SECTION 10.3. PROJECT WARRANTIES NOT EXCLUSIVE .................................................. 114 SECTION 10.4. MANUFACTURERS’ WARRANTIES .............................................................. 114 (A) Manufacturers’ Warranties Generally ................................................. 114 (B) No Limitation on Third Party Warranties ............................................ 114 ARTICLE 11
DISPUTE RESOLUTION
SECTION 11.1. DISPUTE RESOLUTION PROCEDURES ....................................................... 115 (A) Compliance with California Public Contract Code ............................... 115 (B) Alternative Dispute Resolution Procedures ......................................... 115 SECTION 11.2. FORUM FOR DISPUTE RESOLUTION .......................................................... 116 SECTION 11.3. CONTINUANCE OF PERFORMANCE DURING DISPUTE ............................... 116 ARTICLE 12
BREACH, DEFAULT, REMEDIES AND TERMINATION
SECTION 12.1. REMEDIES FOR BREACH ........................................................................... 117 (A) Generally ........................................................................................... 117 (B) No Effect On Contract Obligations ...................................................... 117 (C) No Duplicative Recovery; Express Remedies ....................................... 117 SECTION 12.2. EVENTS OF DEFAULT BY THE DESIGN-BUILDER ...................................... 117 (A) Events of Default Not Requiring Previous Notice or Cure Opportunity for Termination ............................................................ 117 (B) Events of Default Requiring Previous Notice and Cure Opportunity for Termination ............................................................................... 118 (C) Notice and Cure Opportunity ............................................................. 118 (D) Other Remedies Upon Design-Builder Event of Default ....................... 119 (E) Relationship to Liquidated Damages ................................................... 119 SECTION 12.3. LIMITATION ON DESIGN-BUILDER LIABILITY ............................................. 119 (A) Design-Builder Liability Limit ............................................................. 119 (B) Liquidated Damages Sub-Limit .......................................................... 119 SECTION 12.4. APPLICABILITY AND INTERPRETATION OF THE LIMITATION ON LIABILITY ................................................................................................... 120 SECTION 12.5. EVENTS OF DEFAULT BY THE TOWN ......................................................... 120 (A) Events of Default Permitting Termination ........................................... 120 (B) Notice and Cure Opportunity ............................................................. 120 (C) Other Town Breaches Constituting Uncontrollable Circumstances ...... 121 (D) Effect of Termination.......................................................................... 121 SECTION 12.6. TOWN CONVENIENCE TERMINATION RIGHTS ........................................... 121 (A) Convenience Termination Right and Payment ..................................... 121 (B) Convenience Termination Payment for Preliminary Services ................ 121 (C) Convenience Termination Payment for Design-Build Period Work........ 121 (D) Early Work Packages ......................................................................... 122 (E) Settlement of Subcontracts ................................................................ 122 (F) Payment of Amounts Due as a Result of Convenience Termination ...... 122 (G) Completion or Continuance by the Town ............................................ 123 (H) Convenience Termination Rights as Consideration .............................. 123 293
Table of Contents
(continued)
Page
(x)
3835755.8 047018 CTR
SECTION 12.7. OBLIGATIONS OF THE DESIGN-BUILDER UPON TERMINATION ................. 123 (A) Obligations of the Design-Builder Upon Termination .......................... 123 SECTION 12.8. NO WAIVERS ............................................................................................. 125 SECTION 12.9. WAIVER OF CONSEQUENTIAL AND PUNITIVE DAMAGES ........................... 125 ARTICLE 13
INSURANCE
SECTION 13.1. INSURANCE ............................................................................................... 127 (A) Required Insurance ........................................................................... 127 (B) Insurers, Deductibles and the Town Rights ........................................ 127 (C) Certificates, Policies and Notice .......................................................... 127 (D) Subcontractors .................................................................................. 128 (E) Maintenance of Insurance Coverage ................................................... 128 (F) Compliance with Insurer Requirements .............................................. 128 (G) Reductions for Insurance Proceeds ..................................................... 129 ARTICLE 14
UNCONTROLLABLE CIRCUMSTANCES
SECTION 14.1. UNCONTROLLABLE CIRCUMSTANCES GENERALLY .................................. 130 (A) Extent of Relief Available to the Design-Builder .................................. 130 (B) Mitigation Given Effect ....................................................................... 130 (C) Applicable Law Compliance ................................................................ 130 (D) Contract Obligations Not Affected; Resumption of Performance ........... 130 SECTION 14.2. UNCONTROLLABLE CIRCUMSTANCE CLAIM PROCEDURES ...................... 130 (A) Notice and Written Report .................................................................. 130 (B) Updates ............................................................................................. 130 (C) Submittal of Relief Request ................................................................ 131 (D) Delay in Notification........................................................................... 131 (E) Multiple and Overlapping Claims ....................................................... 131 (F) Burden of Proof and Mitigation ........................................................... 131 (G) Town Response .................................................................................. 131 (H) Agreement or Dispute ........................................................................ 131 (I) Certifications ..................................................................................... 131 SECTION 14.3. UNCONTROLLABLE CIRCUMSTANCES RELIEF .......................................... 132 SECTION 14.4. SCHEDULE RELIEF AND RELATED PRICE RELIEF ..................................... 132 (A) Conditions to Schedule Relief ............................................................. 132 (B) Compensable Uncontrollable Circumstance Delay .............................. 133 (C) Concurrent Delay .............................................................................. 133 SECTION 14.5. UNUSUALLY SEVERE AND ABNORMAL CLIMATIC EVENTS ........................ 133 SECTION 14.6. RELEASE ................................................................................................... 134 SECTION 14.7. UNIT PRICING ............................................................................................ 134 ARTICLE 15
INDEMNIFICATION
SECTION 15.1. DESIGN-BUILDER’S OBLIGATION TO INDEMNIFY ...................................... 135 SECTION 15.2. INDEMNIFICATION PROCEDURES ............................................................. 136 294
Table of Contents
(continued)
Page
(xi)
3835755.8 047018 CTR
(A) Notice ................................................................................................ 136 (B) Consolidation of Claims ..................................................................... 136 (C) Design-Builder Right to Dispute Claim ............................................... 136 (D) Rights and Duties of the Parties ......................................................... 136 (E) The Town Indemnitee Rights to Conduct Defense ............................... 137 (F) Transfer of Conduct of Claim to the Town Indemnitee ......................... 137 (G) Design-Builder Responsibility for Costs .............................................. 137 ARTICLE 16
SECURITY FOR PERFORMANCE
SECTION 16.1. BONDS ...................................................................................................... 138 (A) Performance and Payment Bonds ....................................................... 138 (B) Bond Forms ....................................................................................... 139 (C) Delivery of Bonds ............................................................................... 139 (D) Surety Requirements ......................................................................... 139 (E) Monitoring of Sureties ........................................................................ 140 (F) Completion of Work ........................................................................... 140 SECTION 16.2. COSTS OF PROVIDING SECURITY INSTRUMENTS ...................................... 140 ARTICLE 17
MISCELLANEOUS PROVISIONS
SECTION 17.1. OWNERSHIP OF THE PROJECT .................................................................. 136 SECTION 17.2. RELATIONSHIP OF THE PARTIES ............................................................... 136 SECTION 17.3. AFFILIATE TRANSACTIONS ........................................................................ 136 SECTION 17.4. CONTRACT ADMINISTRATION .................................................................... 136 (A) Administrative Communications ........................................................ 136 (B) Contract Administration Memoranda.................................................. 136 (C) Procedure .......................................................................................... 137 (D) Effect ................................................................................................. 137 SECTION 17.5. CONTRACT AMENDMENTS ........................................................................ 137 (A) Amendments Generally ...................................................................... 137 (B) Procedure .......................................................................................... 137 SECTION 17.6. CONTRACT REPRESENTATIVES ................................................................. 137 (A) Design-Builder Contract Representative and Senior Supervisors ......... 137 (B) Town Contract Representative ............................................................ 138 (C) Town Approvals and Consents ........................................................... 138 SECTION 17.7. PROPERTY RIGHTS .................................................................................... 138 (A) Protection from Infringement .............................................................. 138 (B) Substitutes for Deliverable Material, Process or Equipment ................ 139 (C) Exceptions to Infringement Protection ................................................ 139 (D) Pre-Existing Intellectual Property ....................................................... 139 (E) Protection of Proprietary Rights of the Town ....................................... 140 SECTION 17.8. AFFIRMATIVE ACTION REQUIREMENTS .................................................... 140 (A) Applicable Law................................................................................... 140 (B) Affirmative Action Statement .............................................................. 140 (C) Subcontracts ..................................................................................... 140 SECTION 17.9. GENERAL DUTY TO MITIGATE ................................................................... 141 (A) Mitigation by the Design-Builder ........................................................ 141 295
Table of Contents
(continued)
Page
(xii)
3835755.8 047018 CTR
(B) Mitigation by the Town ....................................................................... 141 SECTION 17.10. ASSIGNMENT OF ANTI-TRUST CLAIMS ...................................................... 141 SECTION 17.11. ACTIONS OF TOWN IN ITS GOVERNMENTAL CAPACITY .............................. 141 SECTION 17.12. ASSIGNMENT ............................................................................................ 142 (A) By the Design-Builder ........................................................................ 142 (B) By the Town ...................................................................................... 142 SECTION 17.13. CONFIDENTIALITY ..................................................................................... 142 (A) Confidential Nature of Information ..................................................... 142 (B) Limitation on Use and Disclosure ....................................................... 143 SECTION 17.14. LIMITED RECOURSE TO TOWN .................................................................. 143 SECTION 17.15. BINDING EFFECT ...................................................................................... 143 SECTION 17.16. AMENDMENT AND WAIVER ....................................................................... 143 (A) Contract Amendments ....................................................................... 143 (B) Waiver ............................................................................................... 143 SECTION 17.17. NOTICES ................................................................................................... 143 (A) Procedure .......................................................................................... 143 (B) Town Notice Address .......................................................................... 144 (C) Design-Builder Notice Address ........................................................... 144 SECTION 17.18. OTHER NOTICES ....................................................................................... 145 (A) Notice of Litigation ............................................................................. 145 (B) Notice of Third Party Claim ................................................................ 145 SECTION 17.19. FURTHER ASSURANCES ............................................................................ 145 SECTION 17.20. RIGHTS OF GRANTING AGENCIES AND FEDERAL AGENCIES .................... 145 296
Table of Contents
(continued)
Page
(xiii)
3835755.8 047018 CTR
APPENDICES
1. Project and Project Sites
Attachment 1A – Potential Project Alignments
2. Preliminary Services
Attachment 2A – Planned Survey Extents
Attachment 2B – Preliminary Services Schedule
Attachment 2B-1 – Phase 1a Preliminary Services Schedule Attachment 2B-2 – Phase 1b Preliminary Services Schedule Attachment 2C – Preliminary Services Not-To-Exceed Pricing Attachment 2C-1 – Phase 1a Preliminary Services Not-To-Exceed Pricing Attachment 2C-2 – Phase 1b Preliminary Services Not-To-Exceed Pricing Attachment 2D – Preliminary Services Billing Rates
Attachment 2D-1 – Phase 1a Preliminary Services Billing Rates Attachment 2D-2 – Phase 1b Preliminary Services Billing Rates
3. Governmental and Non-Governmental Approvals
4. Baseline Design Documents
5. General Design-Build Work Requirements
6. Design-Build Quality Assurance and Quality Control Requirements
7. Design-Build Work Review Procedures
8. Design-Build Price
Attachment 8A - Description of General Conditions Costs Attachment 8B – Billing Rates for Design-Build Period Work Professional Services Personnel
Attachment 8C – Billing Rates for Self-Performed Construction Work Attachment 8D - Anticipated Design-Build Period Work Cost Schedule and Design-Builder Contingency
9. Substantial Completion and Final Completion
10. Insurance Requirements
11. Key Personnel and Approved Subcontractors
Attachment 11A – Key Personnel Organization Chart
Attachment 11B – Key Personnel Roles
12. Certain Grant Requirements and Guidelines
Attachment 12A – Davis Bacon Act Wage Determinations
13. Certain Provisions of the California Public Contract Code
TRANSACTION FORMS
A. Form of Performance Bond (Early Work Package Amendment) B. Form of Payment Bond
C. Form of Performance Bond (GMP Amendment)
297
3835755.8 047018 CTR
[This Page Intentionally Left Blank]
298
3835755.8 047018 CTR
DESIGN-BUILD CONTRACT
FOR THE
TOWN OF PARADISE SEWER PROJECT
THIS DESIGN-BUILD CONTRACT (“Design-Build Contract”) is entered into on [________, 2024] between the TOWN OF PARADISE (the “Town”), a municipal corporation organized and existing and by virtue of the laws of the State of California and MOUNTAIN CASCADE, INC., a corporation organized and existing under the laws of the State of California (the “Design-Builder”).
RECITALS
WHEREAS, the Town is the largest town in California that relies solely on septic systems for the treatment and disposal of its wastewater. Prior to the Camp Fire in 2018, the Town struggled to support a thriving economy, in part due to the lack of a municipal sewer system.
WHEREAS, for more than 50 years, the Town pursued a municipal solution for wastewater treatment to address failed septic systems that degraded local groundwater quality and constrained affordable housing, essential community services, and related economic growth. Economically, the lack of a sewer system suppressed the development of a sustainable business community by limiting the size and types of businesses that could affordably operate in the community. Development of affordable housing and workforce housing also was hindered, as larger housing facilities require more sewer treatment capacity than a traditional septic system can provide within the available parcel sizes.
WHEREAS, on November 8, 2018, the Camp Fire severely impacted the Town.
More than 26,000 Town residents were displaced; 90 percent of structures in the Town, including more than 11,000 homes and 1,000 businesses, were burned to the ground; and, most tragically, 85 people lost their lives. The 2018 Camp Fire affected the Town’s business and management operations, as resources were redirected toward recovery, which delayed further development of a municipal wastewater solution for the Town. Concurrently, many private septic systems were found to be damaged by the fire, which further compounded the pre-fire sewer needs. These additional impacts from the Camp Fire constrained affordable housing, essential community services, overall economic growth and rebuild efforts. The Town embarked on the rebuild while continuing to seek municipal sewer treatment options.
WHEREAS, the Town plans to construct the Paradise Sewer Project (as more particularly defined herein, the “Project”) to establish a municipal sewer system for the Town, as well as connection to the City of Chico Water Pollution Control Plant (as more particularly defined herein, the “Chico WPCP”) for regional treatment of the Town’s wastewater. The project includes three distinct components to serve approximately 1,400 parcels within the Sewer Service Area: a core sewer collection system in the Town, an 18-mile sewer export pipeline system to convey wastewater to the Chico WPCP, and the sewer pipeline connection to the Chico WPCP.
WHEREAS, the Town has determined that it is in the Town’s best interests to contract with a private entity to design and construct the Project using the progressive designbuild project delivery method in accordance with Chapter 4.1 of Part 3 of Division 2 (Section 22170 et seq.) of the California Public Contract Code (the “Enabling Law”); WHEREAS, pursuant to the Enabling Law, the Town issued a Request for Qualifications for Progressive Design-Build Services for the Paradise Sewer Project, Town of Paradise Project Number: CIP-9394, Federal Aid Project Number: 18-DRINFRA-18009, Town of Paradise, Public Works Department, 5555 Skyway, Paradise, CA 95969, No. RFQ 299
2 3835755.8 047018 CTR
2023-9394-01, on October 30, 2023 (as amended by addenda issued on November 13, 2023, November 21, 2023 and November 30, 2023 (the “RFQ”), in order to select the design-build entity whose statement of qualifications would be evaluated and determined to be the most advantageous to the Town based upon the evaluation criteria set forth in the RFQ; WHEREAS, statements of qualifications submitted in response to the RFQ were received on December 15, 2023, from seven entities, including the Design-Builder; WHEREAS, the Town’s selection committee engaged in a comprehensive evaluation of the competing statements of qualifications in accordance with the evaluation factors and selection criteria set forth in the RFQ;
WHEREAS, the Town’s selection committee determined that the statement of qualifications submitted by the Design-Builder was the most advantageous to the Town considering the evaluation factors set forth in the RFQ, subject to the negotiation of an acceptable contract;
WHEREAS, on [________, 2024], the Town Council adopted Resolution Number [______] authorizing the execution and delivery of this Design-Build Contract; WHEREAS, the Project will be designed and constructed by the Design-Builder pursuant to the terms of this Design-Build Contract and the appendices attached hereto; and WHEREAS, the Town desires to receive, and the Design-Builder desires to provide design and construction services under the terms of this Design-Build Contract.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto, intending to be legally bound, agree as follows:
300
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
3 3835755.8 047018 CTR
ARTICLE 1
DEFINITIONS AND INTERPRETATION
SECTION 1.1. DEFINITIONS.
As used in this Design-Build Contract, the following terms shall have the meanings set forth below:
“Additional Preliminary Services” means the Phase 1a Additional Preliminary Services and the Phase 1b Additional Preliminary Services. “Affiliate” means any person directly or indirectly controlling or controlled by another person, corporation or other entity or under direct or indirect common control with such person, corporation or other entity.
“Anticipated Design-Build Period Work Cost Schedule” means the detailed, itemized list of prices and costs that establishes the value of each part or component of the Design-Build Period Work, to be developed by the Design-Builder in accordance with the Contract Standards, and to serve as the basis for tracking contingency and line item savings of the Design-Build Price during the Design-Build Period.
“Appendix” means any of the Appendices and, as applicable, any attachments thereto, that are appended to this Design-Build Contract and identified as such in the table of contents to this Design-Build Contract.
“Applicable Law” means:
(1) Any federal, state, Town or local law, statute, ordinance, code, rule or regulation;
(2) Any formally adopted and generally applicable rule, requirement, determination, standard, policy, implementation schedule, or other order of any Governmental Body having appropriate jurisdiction;
(3) Any established interpretation of law or regulation utilized by an appropriate Governmental Body if such interpretation is documented by such Governmental Body and generally applicable;
(4) Any Governmental Approval; and
(5) Any consent order or decree, settlement agreement or similar agreement between the Town and any Governmental Body;
in each case having the force of law and applicable from time to time, over the Project, the Contract Obligations or any other transaction contemplated hereby. “Approved Subcontractors” means the subcontractors identified in Appendix 11 (Key Personnel and Approved Subcontractors). “Archaeological Construction Monitoring, Mitigation and Preservation Plans” means the archaeological construction monitoring, mitigation and preservation plans to be developed by the Design-Builder as part of the Phase 1b Preliminary Services in accordance with the Contract Standards and required to comply with CEQA and NEPA in accordance with Section 4.3 (Environmental Review).
301
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
4 3835755.8 047018 CTR
“Base Guaranteed Maximum Price” means the initial amount approved by the Town as the Guaranteed Maximum Price pursuant to Appendix 8 (Design-Build Price). “Base Guaranteed Maximum Price Adjustment” means an adjustment to the Base Guaranteed Maximum Price made in accordance with and subject to the terms and conditions of Appendix 8 (Design-Build Price).
“Base Preliminary Services” means the Phase 1a Base Preliminary Services and the Phase 1b Base Preliminary Services.
“Baseline Cost Model” means the cost model to be prepared by the DesignBuilder and included in or submitted no later than thirty (30) days following delivery of the Basis of Design Report pursuant to the Phase 1a Base Preliminary Services set forth in Appendix 2 (Preliminary Services).
“Baseline Date” means the Contract Date; except that:
(1) With respect to any Design-Build Work authorized pursuant to an Early Work Package Amendment, the Baseline Date shall mean the Early Work Package Amendment Date; and
(2) Upon the execution and delivery of a GMP Amendment, the Baseline Date shall mean the GMP Amendment Date.
“Baseline Design Documents” means the Specifications, Drawings, and other technical requirements for the performance of the Design-Build Work developed by or on behalf of the Design-Builder through the performance of the Preliminary Services and established in any Early Work Package Amendment or GMP Amendment, as applicable and including the Technical Standards set forth in Appendix 4 (Baseline Design Documents) hereto. “Baseline Design Requirements Change” means a change to the Baseline Design Documents made by a Change Order pursuant to Section 6.8 (Changes to the Baseline Design Documents at Design-Builder Request), Section 6.9 (Other Changes to the Baseline Design Documents) or a Work Change Directive pursuant to Section 6.11 (Work Change Directives):
(1) As a result of a Design-Builder request agreed to by the Town; (2) Due to Uncontrollable Circumstances;
(3) As a result of a term or condition imposed by a Governmental Body; or (4) At the direction of the Town.
“Baseline Design and Construction Phasing Plan and Schedule” means the non-guaranteed schedule so designated to be prepared by the Design-Builder and included in or submitted no later than thirty (30) days following delivery of the Basis of Design Report pursuant to the Phase 1a Base Preliminary Services set forth in Appendix 2 (Preliminary Services).
“Basis of Design Report” or “BODR” means the report so designated to be prepared by the Design-Builder pursuant to the Phase 1a Base Preliminary Services set forth in Appendix 2 (Preliminary Services).
302
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
5 3835755.8 047018 CTR
“Bankruptcy Law” means the United States Bankruptcy Code, 11 U.S.C. 101 et seq., as amended from time to time and any successor statute thereto. “Bankruptcy Law” shall also include any similar state law relating to bankruptcy, insolvency, the rights and remedies of creditors, the appointment of receivers or the liquidation of companies and estates that are unable to pay their debts when due.
“Books and Records” has the meaning specified in Section 9.10(A) (Books and Records).
“Business Day” means a day other than a Saturday, Sunday or an official the Town holiday.
“Butte County” means the County of Butte, a political subdivision of the State. “Caltrans” means the California State Department of Transportation. “Caltrans Requirements” means the written and oral requirements of Caltrans regarding construction of the Project below Highway 99. “CERCLA” means the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. 9601 et seq., and applicable regulations promulgated thereunder, each as amended from time to time.
“CEQA” means the California Environmental Quality Act of 1970, California Public Resources Code Section 21000 et seq., and applicable regulations promulgated thereunder, each as amended from time to time.
“Change in Law” means any of the following acts, events or circumstances to the extent that compliance with the change materially expands the scope, interferes with, delays or increases the cost of performing the obligations of the Design-Builder:
(1) Except as provided below with respect to the exclusions from the definition of “Change in Law”, the adoption, amendment, promulgation, issuance, modification, repeal or written change in administrative or judicial interpretation of any Applicable Law on or after the Baseline Date, unless such Applicable Law was on or prior to the Baseline Date duly adopted, promulgated, issued or otherwise officially modified or changed in interpretation, in each case in final form, to become effective without any further action by any Governmental Body;
(2) Except as provided below with respect to the exclusions from the definition of “Change in Law”, the order or judgment of any Governmental Body issued on or after the Baseline Date (unless such order or judgment is issued to enforce compliance with Applicable Law which was effective as of the Baseline Date) to the extent such order or judgment is not the result of willful or negligent action, error or omission or lack of reasonable diligence of the Design-Builder; provided, however, that the contesting in good faith or the failure in good faith to contest any such order or judgment shall not constitute or be construed as such a willful or negligent action, error or omission or lack of reasonable diligence; or
(3) Except as provided below with respect to the exclusions from the definition of “Change in Law”, the denial of an application for, a delay in review, issuance or renewal of, or the suspension, termination or interruption of any Town Managed Governmental Approvals, or the imposition of a term, condition or requirement on or after the Baseline Date in connection with the issuance, renewal or failure of issuance or renewal of any Town Managed Governmental Approval, to the 303
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
6 3835755.8 047018 CTR
extent such occurrence is not the result of willful or negligent action, error or omission or a lack of reasonable diligence of the Design-Builder; provided, however, that the contesting in good faith or the failure in good faith to contest any such occurrence shall not be construed as such a willful or negligent action or lack of reasonable diligence.
It is specifically understood, however, that none of the following shall constitute a “Change in Law”:
(1) Acts, events and circumstances with respect to Town Managed Governmental Approvals to the extent the Design-Builder has assumed the permitting risk under Section 6.5 (Permitting Responsibilities and Schedule); (2) Any Change in Law relating to Taxes other than a change in law pertaining to state sales Taxes or tariffs on materials and equipment incorporated in the Project;
(3) A change in the severity of the actions typically taken by a Governmental Body to enforce compliance with Applicable Law that was in effect as of the Contract Date;
(4) Any increase in any fines or penalties provided for under Applicable Law in effect as of the Baseline Date;
(5) Any Change in Law (including the enactment of any statute, or the promulgation of any regulation) the terms and conditions of which do not impose more stringent or burdensome requirements on the Design-Builder than are imposed by the Contract Standards in effect as of the Baseline Date;
(6) Any event that affects generally applicable working conditions or standards that is not specific to the wastewater pipeline construction industry or the Project; or
(7) Acts, events and circumstances with respect to Design-Builder Managed Governmental Approvals to the extent the Design-Builder has assumed the permitting risk under Section 6.5 (Permitting Responsibilities and Schedule). “Change Order” means a written order issued by the Town and agreed to in writing by the Design-Builder prior to Final Completion making a Baseline Design Requirements Change, a Base Guaranteed Maximum Price Adjustment, adjustment to the Scheduled Substantial Completion Date or any other change to the terms and conditions of the Contract Documents. A Change Order shall be deemed to constitute a Contract Amendment. “Chico WPCP” means the City of Chico’s Water Pollution Control Plant. “Chico WPCP Connection” means the sewer pipeline connection from the Export Pipeline System to the Chico WPCP at its Influent Sewer Junction Box A. “Chico WPCP Connection Site” means the site where the Chico WPCP Connection will be located pursuant to the Baseline Design Documents. “City of Chico” means the City of Chico, California, a municipal corporation organized and existing and by virtue of the laws of the State. 304
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
7 3835755.8 047018 CTR
“Construction” means that part of the Design-Build Work consisting of the construction of the Project as required by the Contract Documents, including furnishing, installing or incorporating Supplies into the Project.
“Construction Commencement Date” means the date, following satisfaction of the Construction Commencement Date Conditions by the Design-Builder, upon which the Design-Builder shall have the right to proceed with the Construction of the Project, as determined in accordance with Section 6.1(A)(1) (Notice to Proceed). “Construction Commencement Date Conditions” has the meaning specified in Section 6.2(A) (Construction Commencement Date Generally). “Construction Phasing Plan” means the Design-Builder’s plan for Construction sequencing site access, to be developed as part of the Phase 1b Preliminary Services in accordance with the requirements set forth in Appendix 2 (Preliminary Services). “Contaminated Media Management Plan” means the Design-Builder’s plan for the management of contaminated soils and groundwater, to be developed as part of the Phase 1b Preliminary Services in accordance with the Contract Standards and required to comply with CEQA and NEPA in accordance with Section 4.3 (Environmental Review). “Contract Administration Memorandum” has the meaning specified in Section
17.4(B) (Contract Administration Memoranda).
“Contract Amendment” has the meaning specified in Section 17.5(A) (Amendments Generally).
“Contract Compensation” means the Preliminary Services Fee and the DesignBuild Price. “Contract Date” means the date this Design-Build Contract is executed and delivered by the parties hereto.
“Contract Documents” means:
(1) This Design-Build Contract and all Appendices;
(2) Any amendments to the Design-Build Contract including the GMP Amendment and any Early Work Package Amendment;
(3) The Baseline Design Documents;
(4) Any Change Order, Work Change Directive or other Contract Amendment;
(5) Any Notice to Proceed;
(6) Any Contract Administration Memoranda; and
(7) The Issued for Construction Drawings and Specifications. “Contract Obligations” means everything required to be furnished and done for and relating to the Design-Build Work and the Warranty Work pursuant to the Contract Documents.
305
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
8 3835755.8 047018 CTR
“Contract Standards” means the standards, terms, conditions, methods, techniques and practices imposed or required by:
(1) Applicable Law;
(2) The Baseline Design Documents;
(3) The Substantial Completion Standards;
(4) Good Engineering and Construction Practice;
(5) The Insurance Requirements;
(6) All plans required to be developed by the Design-Builder pursuant to the requirements of this Design-Build Contract;
(7) All applicable requirements of the Grants, including all applicable provisions identified in Appendix 12 (Certain Grant Requirements and Guidelines); and (8) the Quality Management Plan;
(9) the Health and Safety Plan;
(10) the Operations and Maintenance Manual; and
(11) Any other standard, term, condition or requirement specifically provided in the Contract Documents to be observed by the Design-Builder.
Section 1.2(R) (Applicability, Stringency and Consistency of Contract Standards) shall govern issues of interpretation related to the applicability, stringency and consistency of the Contract Standards.
“Core Collection System” means the wastewater pipelines (including connections beginning at the property lines and trunkline) for the collection of wastewater from the properties located in the Sewer Service Area to the Export Pipeline System, including all related structures, lift stations, pipes, valves and equipment, as generally described in Appendix 1 (Project and Project Sites) and more particularly described in the Baseline Design Documents, to be designed, constructed, and tested by the Design-Builder in accordance with the Contract Documents.
“Core Collection System Rights of Way” means the right of access to the real property, as generally described in Appendix 1 (Project and Project Sites) and more particularly described in the Baseline Design Documents, on or under which the Core Collection System are to be constructed by the Design-Builder.
“Cost Substantiation” means the process of providing evidence of actual costs in accordance with Section 9.8 (Cost Substantiation).
“Deliverable Material” means the Preliminary Services Deliverable Material and the Design-Build Period Work Deliverable Material.
“Design-Build Contract” means this Design-Build Contract for the Town of Paradise Sewer Project between the Design-Builder and the Town, including the Appendices and all other Contract Documents, as the same may be amended or modified from time to time in accordance herewith.
306
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
9 3835755.8 047018 CTR
“Design-Build Period” means the period from and including the GMP Amendment Date (or with respect to any Design-Build Work authorized pursuant to an Early Work Package Amendment, the applicable Early Work Package Amendment Date) through the date Final Completion is achieved.
“Design-Build Period Costs” has the meaning specified in Appendix 8 (DesignBuild Price). “Design-Build Period Work” means all Design-Build Work performed by the Design-Builder hereunder on and after (1) the GMP Amendment Date and (2) the Early Work Package Amendment Date in connection with any Early Work Package. “Design-Build Period Work Deliverable Material” means all documents, reports, studies, surveys, computer programs, warranties, manuals, submittals, licenses and other documents and materials required to be delivered by the Design-Builder to the Town in the performance of the Design-Build Period Work pursuant to this Design-Build Contract, including the Final Design Documents.
“Design-Build Period Work Schedule” means the Design-Builder’s critical path method completion schedule for the performance of the Design-Build Period Work, as set forth as an attachment to Appendix 5 (General Design-Build Work Requirements) on the GMP Amendment Date and as updated and maintained by the Design-Builder in accordance with Section 6.1(F) (Design-Build Period Work Schedule and Reports). “Design-Build Price” has the meaning specified in Appendix 8 (Design-Build Price).
“Design-Build Work” means everything required to be furnished and done for and relating to the design and construction of the Project pursuant to the Contract Documents.
Design-Build Work includes the employment and furnishing of all labor, materials, equipment, supplies, tools, scaffolding, transportation, Utilities, insurance, temporary facilities and other things and services of every kind whatsoever necessary for the full performance and completion of the Design-Builder’s design, engineering, permitting, procurement, construction, Testing, and related obligations with respect to the construction of the Project under the Contract Documents, including all completed structures, assemblies, fabrications, acquisitions and installations, all testing, and all of the Design-Builder’s administrative, accounting, recordkeeping, notification and similar responsibilities of every kind whatsoever under the Contract Documents pertaining to such obligations. Design-Build Work includes the Preliminary Services, all work performed pursuant to Early Work Package Amendments, the Design-Build Period Work and the Warranty Work. A reference to Design-Build Work shall mean any part and all of the Design-Build Work unless the context otherwise requires, and shall include all Design-Build Work authorized by Change Order or Work Change Directive. “Design-Builder” means Mountain Cascade, Inc., a corporation organized and existing under the laws of the State of California, and its permitted successors and assigns. “Design-Builder Contingency” has the meaning specified in Appendix 8 (Design-Build Price).
“Design-Builder Contract Representative” has the meaning specified in Section 17.6(A) (Design-Builder Contract Representative and Senior Supervisors). 307
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
10 3835755.8 047018 CTR
“Design-Builder Fault” means:
(1) A breach by the Design-Builder of any of its obligations under this Design-Build Contract;
(2) A breach of any representation or warranty made by the Design-Builder under this Design-Build Contract;
(3) Willful misconduct of the Design-Builder or any other Design-Builder Person; or
(4) A negligent act or omission of the Design-Builder or any other DesignBuilder Person. “Design-Builder Fee” has the meaning specified in Appendix 8 (Design-Build Price).
“Design-Builder Managed Governmental Approvals” means the Governmental Approvals other than the Town Managed Governmental Approvals. The Design-Builder Managed Governmental Approvals are those Governmental Approvals for which the DesignBuilder is the application manager, as designated in Appendix 3 (Governmental and NonGovernmental Approvals). “Design-Builder Managed Non-Governmental Approvals” means the NonGovernmental Approvals other than the Town Managed Non-Governmental Approvals. The Design-Builder Managed Non-Governmental Approvals are those Non-Governmental Approvals for which the Design-Builder is the application manager, as designated in Table A3-2 in Appendix 3 (Governmental and Non-Governmental Approvals). “Design-Builder Person” means each of the following:
(1) The Design-Builder;
(2) Any director, officer, employee or agent of the Design-Builder in each case acting as such;
(3) Any Subcontractor and any representative, advisor (including any legal and financial advisor) of the Design-Builder, in any such person’s capacity as a provider of services directly or indirectly to the Design-Builder in connection with the Project; and
(4) Anyone for whose acts any of the foregoing may be legally or contractually liable in connection with this Design-Build Contract, including officers, directors, employees, representatives, agents, consultants, and contractors. “Design Professional Services” means that part of the Design-Build Work consisting of the preparation of plans, drawings and specifications for the Project by licensed professional engineering, architectural and land surveying firms, as well as all other services required to be performed by licensed design professionals as part of the Design-Build Work for the design and engineering of the Project, including professional engineering, architectural and land surveying services.
“Design Professional Services Firm” means any person providing Design Professional Services.
308
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
11 3835755.8 047018 CTR
“Differing Site Conditions” means (a) actual subsurface or latent physical subsurface conditions along the Core Collection System Rights of Way, along the Export Pipeline System Rights of Way or at the Transition Chamber Site or the Flow Control and Metering Structure Site that differ materially from those indicated in the Reference Documents or those documents prepared by the Design-Builder as part of the Preliminary Services (including the Basis of Design Report), or (b) unknown physical subsurface conditions at the of an unusual nature, which differ materially from those ordinarily encountered and generally recognized as inherent in work of the character required herein; provided, however, that the term “Differing Site Conditions” excludes: (1) conditions of which the Design-Builder had actual or constructive knowledge as of the Baseline Date (including through review of the Reference Documents and those documents prepared by the Design-Builder as part of the Preliminary Services as well as conditions that are evident from the location, topography and nature of the Project Sites); and (2) conditions that should have been discovered through a reasonable investigation performed prior to the Baseline Date and through the geotechnical, hydrogeology, and contaminated soil and water management work required to be performed by the DesignBuilder as part of the Preliminary Services. “Document Management Plan” means the Design-Builder’s plan for document management in implementing the Phase 1b Preliminary Services and the Design-Build Period Work to be developed as part of the Phase 1a Preliminary Services in accordance with Appendix 2 (Preliminary Services).
“Drawings” means drawings, diagrams, illustrations, schedules and other data that show the scope, extent, and character of the Design-Build Work, as prepared by or on behalf of the Design-Builder.
“Early Work Package” has the meaning specified in Section 5.6(A) (Early Work Packages).
“Early Work Package Amendment” has the meaning specified in Section 5.6(A) (Early Work Packages).
“Early Work Package Amendment Date” means the date that an Early Work Package Amendment is executed and delivered by the parties. “Early Work Package Price” means the price established in any Early Work Package for the portion of the Design-Build Work to be performed thereunder. “Early Work Package Submittal” has the meaning specified in Section 5.6(A) (Early Work Packages).
“Encumbrances” means any Lien, lease, mortgage, security interest, charge, judgment, judicial award, attachment or encumbrance of any kind with respect to the Project. “Engineer-of-Record” means the professional engineer licensed in the State in good standing who is designated by the Design-Builder and acceptable to the Town, acting reasonably, as the engineer responsible for the preparation, signing, dating, sealing and issuing of the engineering documents relating to all or a portion of the Design-Build Work. “EPA” means the United States Environmental Protection Agency and any successor agency.
“Environmental Mitigation Measures” means any environmental mitigation measures set forth in, or required in connection with, a Governmental Approval. 309
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
12 3835755.8 047018 CTR
“Event of Default” means, with respect to the Design-Builder, those items specified in Section 12.2 (Events of Default by the Design-Builder) and, with respect to the Town, those items specified in Section 12.5 (Events of Default by the Town). “Expiration Date” means the last day of the Warranty Period. “Export Pipeline System” means the 18-mile-long export pipeline system to convey wastewater from the Core Collection System to the Chico WPCP, including all related structures, pipes, valves and equipment, as generally described in Appendix 1 (Project and Project Sites) and more particularly described in the Baseline Design Documents, to be designed, constructed, and tested by the Design-Builder in accordance with the Contract Documents. The Export Pipeline System will include the Ridge Gravity Section, the Gravity Force Main Section, the Transition Chamber and the Flow Control and Metering Structure. “Export Pipeline System Rights of Way” means the right of access to the real property, as generally described in Appendix 1 (Project and Project Sites) and more particularly described in the Baseline Design Documents, on or under which the Export Pipeline System are to be constructed by the Design-Builder.
“Extension Period” means 60 days following the Scheduled Substantial Completion Date.
“Fees and Costs” means reasonable fees and expenses of employees, attorneys, architects, engineers, expert witnesses, contractors, consultants and other persons, and costs of transcripts, printing of briefs and records on appeal, copying and other reimbursed expenses, and expenses reasonably incurred in connection with investigating, preparing for, defending or otherwise appropriately responding to any Legal Proceeding. “Federal Agencies” means (a) the California Department of Housing and Urban Development; (b) the California Department of Housing and Urban Development; and (c) the California State Water Resources Control Board.
“Federal Highway Administration Requirements” means the written and oral requirements of Federal Highway Administration regarding construction of the Project below Highway 99.
“Final Completion” means completion of the Design-Build Work, including all construction of the Project, in compliance with the Contract Documents and the requirements of Section 8.4 (Final Completion).
“Final Design Documents” means the Design-Builder’s plans, technical specifications, drawings, record drawings and other design documents prepared following the GMP Amendment Date (or in connection with any Early Work Package, the applicable Early Work Package Amendment Date) in connection with the Design-Build Period Work, including:
(1) Specifications, Drawings and all other work product generated through the performance of the Design Professional Services following the establishment of the Baseline Design Documents; and
(2) All technical criteria, written descriptions and design data necessary for obtaining Governmental Approvals and performing Construction, such as shop drawings, product data and samples whether or not such documents are required to be prepared by licensed design professionals.
310
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
13 3835755.8 047018 CTR
“Flow Control and Metering Structure” means a structure and equipment located therein for the flow control and metering of wastewater, located at or near the Chico WPCP, including all related structures, pipes, valves and equipment, as generally described in Appendix 1 (Project and Project Sites) and more particularly described in the Baseline Design Documents, to be designed, constructed, and tested by the Design-Builder in accordance with the Contract Documents.
“Flow Control and Metering Structure Site” means the site where the Flow Control and Metering Structure will be located pursuant to the Baseline Design Documents. “General Conditions Costs” has the meaning specified in Appendix 8 (DesignBuild Price). “General Conditions Fee” has the meaning specified in Appendix 8 (DesignBuild Price). “Geotechnical Baseline Report” means the report so designated to be prepared by the Design-Builder pursuant to Preliminary Services set forth in Appendix 2 (Preliminary Services).
“Geotechnical Evaluation Report” means the report so designated to be prepared by the Design-Builder pursuant to Preliminary Services set forth in Appendix 2 (Preliminary Services).
“GMP Amendment” has the meaning specified in Section 5.8(B) (Negotiation and Execution of the GMP Amendment).
“GMP Amendment Date” has the meaning specified in Section 5.8(B) (Negotiation and Execution of the GMP Amendment).
“GMP Submittal” has the meaning specified in Section 5.7 (GMP Submittal). “GMP Submittal Design Level” means the design of the Project progressed to a level sufficient to permit the Design-Builder to provide the GMP Submittal, as determined by the Town based on information provided by the Design-Builder in the Phase 1a Base Preliminary Services Submittal, and as to be described in an amendment to Appendix 2 (Preliminary Services) to be executed prior to issuance of a Notice to Proceed with any Phase 1b Preliminary Services. [Note: To be agreed to by the parties prior to Phase 1b Base Preliminary Services Amendment.]
“Good Engineering and Construction Practice” means (a) with respect to the design and engineering services performed by the Design-Builder under this Design-Build Contract, those methods, techniques, standards and practices which, at the time they are to be employed and in light of the circumstances known or reasonably believed to exist at such time, are generally recognized and accepted as meeting the prevailing standard of care ordinarily used by members of the subject profession, having experience with projects similar in scope and complexity and practicing in the State, and (b) with respect to equipping, installation, construction, commissioning and testing services performed by the Design-Builder under this Design-Build Contract, those methods, techniques, standards and practices which, at the time they are to be employed and in light of the circumstances known or reasonably believed to exist at such time, are generally recognized and accepted as good equipping, installation, construction, commissioning and testing practices as observed for water and sewer pipelines, as followed in the State.
311
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
14 3835755.8 047018 CTR
“Governmental Approval” means any permit, license, authorization, consent, certification, exemption, ruling, entitlement or approval issued by a Governmental Body of whatever kind and however described, which is required under Applicable Law to be obtained or maintained by any person with respect to the Design-Build Work, including any Town Managed Governmental Approvals and Design-Builder Managed Governmental Approvals. “Governmental Approval Application Date” means the applicable date set forth in the Governmental and Non-Governmental Approvals Table. “Governmental and Non-Governmental Approvals Table” means Table A3-1 and A3-2 of Appendix 3 (Governmental and Non-Governmental Approvals) to be developed by the Design-Builder as part of the Phase 1a Preliminary Services in accordance with Appendix 2 (Preliminary Services). [Note: To be completed as part of the Phase 1a Base Preliminary Services.]
“Governmental Body” means any federal, State, Town, regional or local legislative, executive, judicial or other governmental board, department, agency, authority, commission, administration, court or other body (including the Town, acting in its governmental capacity other than as a party to this Design-Build Contract), or any official thereof, having jurisdiction in any way over or in respect of any aspect of the performance of this Design-Build Contract or the Project.
“Grant Requirements” means the written requirements of the Grants relating to the Preliminary Services and the Design-Build Work, including all applicable provisions identified in Appendix 12 (Certain Grant Requirements and Guidelines). As of the Contract Date, the written requirements of any California State Water Resources Control Board grants have not yet been established and therefore are not yet reflected in Appendix 12 (Certain Grant Requirements and Guidelines). The parties intend to update Appendix 12 (Certain Grant Requirements and Guidelines) by Contract Amendment once such written requirements have been established.
“Granting Agencies” means (a) the California Department of Housing and Urban Development; (b) the California Department of Housing and Urban Development; and (c) the California State Water Resources Control Board. “Grants” means (a) the $30,000,000 Community Development Block Grant – Disaster Recovery grant from the California Department of Housing and Urban Development; (b) the $200,000,000 Community Development Block Grant – Disaster Recovery grant from the California Department of Housing and Urban Development, approximately $16,000,000 of which will be used to pay all amounts under this Design-Build Contract, including the Phase 1a Preliminary Services Fee, the Phase 1b Preliminary Services Fee and the Design-Build Price; and (c) one or more California State Water Resources Control Board grants administered by the Division of Financial Assistance of the California State Water Resources Control Board. “Gravity Force Main Section” means the second section of the Export Pipeline System anticipated to be approximately 60,150 feet or 11.4 miles long, beginning at the Transition Chamber, dropping 224 feet in elevation and ending at the Flow Control and Metering Structure.
“Guaranteed Maximum Price” has the meaning specified in Appendix 8 (Design-Build Price).
“Hazardous Material” means any waste, substance, object or material deemed hazardous under Applicable Law, including “hazardous substances” as defined under CERCLA, “hazardous waste” as defined under RCRA and in California Health and Safety Code 312
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
15 3835755.8 047018 CTR
Section 25117, and “hazardous material” as defined under US DOT regulations (49 CFR 100- 180).
“Health and Safety Plan” means the Design-Builder’s plan for health and safety in implementing, initially, the Phase 1a Preliminary Services including related field work, to be developed as part of the Phase 1a Preliminary Services in accordance with the requirements set forth in Appendices 2 and 5, as updated to become the Design-Builder’s plan for health and safety in implementing the Phase 1b Preliminary Services including related field work, and as further updated to become the Design-Builder’s plan for health and safety in implementing the Design-Build Period Work.
“Intellectual Property” means any trade secrets, proprietary rights, patents, copyrights or trademarks recognized under Applicable Law. “Inter-Municipal Agreement” means the Inter-Municipal Agreement, City of Chico Wastewater Treatment Services to the Town of Paradise, approved by the Town Council on February 14, 2023 and approved by the City of Chico City Council February 21, 2023, by and between the City of Chico and the Town, as the same may be amended from time to time in accordance therewith.
“Insurance Requirement” means any rule, regulation, code, or requirement issued by any insurance company that has issued a policy of Required Insurance under this Design-Build Contract or by any insurance company that has issued a policy of insurance required to be obtained and maintained by the Town in connection with this Design-Build Contract, compliance with which is a condition to the effectiveness of such policy. “Issued for Construction Drawings and Specifications” means the Drawings and Specifications which have been accepted by the Town as final Drawings and Specifications for the commencement of Construction of all or any portion of the Design-Build Work. “Legal Proceeding” means every action, suit, litigation, arbitration, administrative proceeding, and other legal or equitable proceeding having a bearing upon this Design-Build Contract, and all appeals therefrom.
“Lien” means any and every lien against the Project or against any monies due or to become due from the Town to the Design-Builder under this Design-Build Contract, for or on account of the Contract Obligations, including mechanics’, materialmen’s, laborers’ and lenders’ liens.
“Limited Notice to Proceed” means a written notice issued by the Town Contract Representative authorizing the Design-Builder to proceed with Construction under certain specific terms and conditions pursuant to Section 6.1(A)(2) (Limited Notice to Proceed), in either case as specified in the Limited Notice to Proceed. “Loss-and-Expense” means any and all actual loss, liability, forfeiture, obligation, damage, fine, penalty, judgment, Lien, deposit, Tax, charge, assessment, cost or expense, including all Fees and Costs, relating to third party claims for which the DesignBuilder is obligated to indemnify the Town Indemnitees pursuant to this Design-Build Contract.
“Mediator” means any person serving as a third-party mediator of disputes hereunder pursuant to Section 11.1 (Dispute Resolution Procedures). “Monthly Progress Report” has the meaning specified in Section 4.9 (Monthly Progress Reports).
313
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
16 3835755.8 047018 CTR
“NEPA” means the National Environmental Policy Act, 42 U.S.C. 4321 et seq., and applicable regulations promulgated thereunder, each as amended from time to time. “NEPA Document” means the categorical exclusion, environmental assessment, finding of no significant impact or environmental impact statement for the Project pursuant to NEPA, in draft and final forms as applicable.
“Non-Binding Mediation” means the voluntary system of dispute resolution through third-party mediation established by Section 11.1 (Dispute Resolution Procedures) for the resolution of any dispute arising under this Design-Build Contract. “Non-Governmental Approvals” means the UPRR Approval and access approvals and easements from private property owners, including any Town Managed NonGovernmental Approvals and Design-Builder Managed Non-Governmental Approvals. “Notice of Final Completion” has the meaning set forth in Section 8.4(B) (Notice and Report of Final Completion).
“Notice to Proceed” or “NTP” means a written notice issued by the Town Contract Representative authorizing the Design-Builder to commence performing a portion of the Design-Build Work, as specified in the Notice to Proceed. “Operations and Maintenance Manual” means the manual and related computer programs prepared by the Design-Builder containing detailed standard operating and maintenance procedures and other specific instructions, policies, directives, routines, schedules and other matters relating to the Project, developed and maintained as required by Section 6.20 (Operations and Maintenance Manual) and Appendix 5 (General Design-Build Work Requirements). The Operations and Maintenance Manual includes the service manuals describing the operation and maintenance requirements for each equipment system, package and unit incorporated into the Project.
“OSHA” means the Occupational Safety and Health Act of 1970, 29 U.S.C.
Section 650 et seq., including the applicable regulations promulgated thereunder, as amended or superseded from time to time.
“Overdue Rate” means the maximum rate of interest permitted by the laws of the State, if applicable, or the Prime Rate, whichever is lower. “Owner Representative” means any individual or firm, or team of individuals or firms, under contract with the Town, including subcontractors, and designated by the Town from time to time as part of its management-consulting, engineering or construction management team for purposes of administering this Design-Build Contract on behalf of the Town.
“Payment Bond” means the labor and materials payment bond provided by the Design-Builder as described in and maintained pursuant to this Design-Build Contract and in the form set forth in the Transaction Forms.
“Payment Request” means a written submission by the Design-Builder in the form approved by the Town and accompanied by all required supporting documentation, requesting payment hereunder of any portion of the Contract Compensation. “Performance Bond” means the performance bond provided by the DesignBuilder as described in and maintained pursuant to this Design-Build Contract and in the form set forth in the Transaction Forms.
314
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
17 3835755.8 047018 CTR
“Permitted Encumbrances” means, as of any particular time, any one or more of the following:
(1) Encumbrances for utility charges, taxes, rates and assessments not yet delinquent or, if delinquent, the validity of which is being contested diligently and in good faith by the Design-Builder and against which the Design-Builder has established appropriate reserves in accordance with generally accepted accounting principles; (2) Any encumbrance arising out of any judgment rendered that is being contested diligently and in good faith by the Design-Builder, the execution of which has been stayed or against which a bond or bonds in the aggregate principal amount equal to such judgments shall have been posted with a financially-sound insurer and which does not have a material and adverse effect on (a) the ability of the Design-Builder to construct the Project in accordance with this Design-Build Contract or (b) the ability of the Town to utilize the Project;
(3) Any encumbrance arising in the ordinary course of business imposed by law dealing with materialmen’s, mechanics’, workmen’s, repairmen’s, warehousemen’s, landlords’, vendors’ or carriers’ encumbrances created by law, or deposits or pledges which are not yet due or, if due, the validity of which is being contested diligently and in good faith by the Design-Builder and against which the Design-Builder has established appropriate reserves or bonded against, at the Town’s request; (4) Servitudes, licenses, leases, easements, restrictions, rights-of-way, rights in the nature of easements or similar items which shall not individually or in the aggregate materially and adversely impair (a) the construction of the Project by the Design-Builder in accordance with this Design-Build Contract or (b) the operation of the Project by the Town;
(5) Applicable zoning and building bylaws and ordinances, municipal bylaws and regulations, and restrictive covenants, which individually or in the aggregate do not materially interfere with and adversely affect (a) the construction of the Project by the Design-Builder in accordance with this Design-Build Contract or (b) the utilization of the Project by the Town;
(6) Encumbrances which are created on or before the Contract Date; (7) Encumbrances which are created by a Change in Law on or after the Contract Date; and
(8) Any encumbrance created by the Town.
“PG&E” means Pacific Gas and Electric Company.
“Phase 1a Additional Preliminary Services” has the meaning specified in Section 5.2(B) (Additional Preliminary Services).
“Phase 1a Base Preliminary Services” means those services designated as Phase 1a Base Preliminary Services in Appendix 2 (Preliminary Services). “Phase 1a Preliminary Services” means, collectively, the Phase 1a Base Preliminary Services and the Phase 1a Additional Preliminary Services. “Phase 1a Preliminary Services Fee” has the meaning specified in Section 9.1 (Compensation for Preliminary Services) and Appendix 2 (Preliminary Services). 315
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
18 3835755.8 047018 CTR
“Phase 1a Preliminary Services Schedule” has the meaning specified in Section 5.3 (Preliminary Services Schedule).
“Phase 1b Additional Preliminary Services” has the meaning specified in Section 5.2(B) (Additional Preliminary Services).
“Phase 1b Base Preliminary Services” means those services designated as Phase 1b Base Preliminary Services in Appendix 2 (Preliminary Services). “Phase 1b Base Preliminary Services Submittal” has the meaning specified in subsection 5.1(C) (Phase 1b Base Preliminary Services). “Phase 1b Base Preliminary Services Amendment” has the meaning specified in Section 5.6(A) (Early Work Packages).
“Phase 1b Base Preliminary Services Amendment Date” has the meaning specified in Section 5.6(A) (Early Work Packages).
“Phase 1b Preliminary Services” means, collectively, the Phase 1b Base Preliminary Services and the Phase 1b Additional Preliminary Services. “Phase 1b Preliminary Services Fee” has the meaning specified in Section 9.1 (Compensation for Preliminary Services) and Appendix 2 (Preliminary Services). “Phase 1b Preliminary Services Schedule” has the meaning specified in Section 5.3 (Preliminary Services Schedule).
“Preliminary Design Documents” means the Design-Builder’s plans, technical specifications, drawings and other documents prepared in connection with the Preliminary Services, including the Baseline Design Documents.
“Preliminary Services” means the Base Preliminary Services and the Additional Preliminary Services performed by the Design-Builder hereunder prior to the GMP Amendment Date.
“Preliminary Services Deliverable Material” means all documents, reports, studies, surveys, computer programs, warranties, manuals, submittals, licenses and other documents and materials required to be delivered by the Design-Builder to the Town in the performance of the Preliminary Services pursuant to this Design-Build Contract, including the Preliminary Design Documents.
“Preliminary Services Fee” means an amount equal to the sum of the Phase 1a Preliminary Services Fee and the Phase 1b Preliminary Services Fee. “Preliminary Services Period” means the period between the Contract Date and the GMP Amendment Date.
“Preliminary Services Tasks” means the tasks specified in Appendix 2 (Preliminary Services) for Phase 1a Base Preliminary Services or Phase 1b Base Preliminary Services.
“Prime Rate” means the prime rate as published in The Wall Street Journal (Eastern Edition), or a mutually agreeable alternative source of the prime rate if it is no longer published in The Wall Street Journal (Eastern Edition) or the method of computation thereof is substantially modified.
316
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
19 3835755.8 047018 CTR
“Project” means the Core Collection System, the Core Collection System Rights of Way, the Export Pipeline System, the Export Pipeline System Rights of Way, the Transition Chamber Site, the Flow Control and Metering Structure Site, the Chico WPCP Connection and all Contract Obligations required to be performed under the Contract Documents. “Project Management Plan” means the Design-Builder’s plan for project management in implementing the Phase 1b Preliminary Services and the Design-Build Period Work to be developed as part of the Phase 1a Preliminary Services in accordance with Appendix 2 (Preliminary Services).
“Project Manager” has the meaning specified in Section 7.1(A) (Project Manager).
“Project Schedule” means the Phase 1a Preliminary Services Schedule, the Phase 1b Preliminary Services Schedule and the Design-Build Period Work Schedule. “Project Sites” means the Core Collection System Rights of Way, the Export Pipeline System Rights of Way, the Transition Chamber Site, the Flow Control and Metering Structure Site and the Chico WPCP Connection Site.
“Project Warranties” has the meaning specified in Section 10.1(A) (Project Warranties Defined).
“Punch List” has the meaning specified in Section 6.21(A) (Punch List Requirements).
“Quality Management Plan” means the Design-Builder’s plan for quality assurance and quality control in implementing, initially, the Phase 1a Preliminary Services, to be developed as part of the Phase 1a Preliminary Services in accordance with Appendix 2 (Preliminary Services), as updated to become the Design-Builder’s plan for quality assurance and quality control in implementing the Phase 1b Preliminary Services, and as further updated to become the Design-Builder’s plan for quality assurance and quality control in implementing the Design-Build Period Work.
“RCRA” means the Resource Conservation and Recovery Act, 42 U.S.C.A. 6901 et seq., and applicable regulations promulgated thereunder, each as amended from time to time.
“Reference Documents” means the documents listed as reference documents in Appendix 1 (Project and Project Sites) Table A1-1 to this Design-Build Contract. “Regulated Site Condition” means, and is limited to:
(1) The presence or habitat of a species that is classified under Applicable Law as endangered, rare, threatened, of special concern, or similarly subject to the protections of Applicable Law;
(2) The presence anywhere in, on or under the Project Sites of historical, archaeological, religious architectural or other cultural artifacts, relics, vestiges, remains or objects of antiquity that are regulated by Applicable Law; (3) The presence anywhere in, on or under the Project Sites on the Baseline Date of wells or underground storage tanks for the storage of chemicals, petroleum products or Regulated Substances; and
317
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
20 3835755.8 047018 CTR
(4) The presence of Regulated Substances in environmental media anywhere in, on or under the Project Sites (including presence in surface water, groundwater, soils or subsurface strata), but not including Regulated Substances used, stored or otherwise brought to the Project Sites by the Design-Builder or any Subcontractor as provided in Section 6.4(A) (Design-Builder Responsibilities). “Regulated Substance” means:
(1) Any oil, petroleum or petroleum product; and
(2) Any pollutant, contaminant, hazardous substance, hazardous material, toxic substance, toxic pollutant, solid waste, municipal waste, industrial waste or hazardous waste that is defined as such by and is subject to regulation under any Applicable Law. Regulated Substances include Hazardous Materials. “Related Projects” has the meaning specified in Section 6.13(B) (Related Projects Generally).
“Relief Request Notice” has the meaning specified in Section 14.2(C) (Submittal of Relief Request).
“Request for Qualifications” or “RFQ” means the Town’s Request for Qualifications for Progressive Design-Build Services for the Paradise Sewer Project, Town of Paradise Project Number: CIP-9394, Federal Aid Project Number: 18-DRINFRA-18009, Town of Paradise, Public Works Department, 5555 Skyway, Paradise, CA 95969, No. RFQ 2023-9394-01, on October 30, 2023, as amended.
“Required Insurance” means the insurance policies and coverage required to be provided by the Design-Builder under this Design-Build Contract, as set forth in Section 13.1 (Insurance) and Appendix 10 (Insurance Requirements).
“Restricted Person” means any person who (or any member of a group of persons acting together, any one of which):
(1) Is disbarred, suspended, or otherwise disqualified from federal, State, or Town contracting for any services similar in nature to the Contract Obligations; (2) Was or is subject to any material claim of the United States, State, or Town in any proceedings (including regulatory proceedings) which have been concluded or are pending at the time at which the determination of whether the person falls within this definition is being made, and which (in respect of any such pending claim, if it were to be successful) would, in the Town’s view, in either case, be reasonably likely to materially affect the ability of the Design-Builder to perform its obligations under this Design-Build Contract;
(3) In the case of an individual, he or she (or in the case of a legal entity, any of the members of the board of directors or its senior executive managers) has been sentenced to imprisonment or otherwise given a custodial sentence for any criminal offense (other than minor traffic offenses or misdemeanor) less than 5 years prior to the date at which the determination of whether the person falls within this definition is being made;
(4) Has, directly or indirectly, its principal or controlling office in a country that is subject to any economic or political sanctions imposed by the United States for reasons other than its trade or economic policies; or
318
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
21 3835755.8 047018 CTR
(5) Has as its primary business the illegal manufacture, sale, distribution or promotion of narcotic substances or arms, or is or has been involved in terrorism. “Ridge Gravity Section” means the first section of the Export Pipeline System anticipated to be approximately 35,700 feet or 8.8 miles long, beginning at the southwest edge of the Town, dropping about 1,070 in elevation and ending at the Transition Chamber. “Safety Manager” has the meaning specified in Section 6.16(A) (Safety Manager).
“Scheduled Substantial Completion Date” means the date which is [_____] days following the GMP Amendment Date, as such Scheduled Substantial Completion Date may be adjusted in accordance with Section 14.4 (Schedule Relief and Related Price Relief). [Note: To be negotiated as part of the GMP Amendment.]
“Security Instruments” means the Performance Bond and the Payment Bond. “Senior Supervisors” has the meaning specified in Section 17.6(A) (DesignBuilder Contract Representative and Senior Supervisors). “Separate Contractor” means any person or entity under contract with the Town for the performance of work associated with the Related Projects or under contract with a non-Town owner to perform work at the Project Sites.
“Shared Savings Amount” has the meaning specified in Appendix 8 (DesignBuild Price). “Sewer Service Area” means the Town’s sewer service area as depicted in Appendix 1 (Project and Project Sites).
“Specifications” means the documents prepared by or on behalf of DesignBuilder comprising written technical descriptions of materials, equipment, construction systems, standards, and workmanship for the Design-Build Work and certain administrative details applicable thereto.
“Specified Project Risk Contingency” means the amount that the Town has included in the Base Guaranteed Maximum Price to address certain Design-Builder assumed risks as set forth in Appendix 8 (Design-Build Price).
“State” means the State of California.
“Statement of Qualifications” means the statement of qualifications submitted by the Design-Builder on December 15, 2023, in response to the RFQ. “Subcontract” means any contract entered into by the Design-Builder, or a Subcontractor of the Design-Builder of any tier, with one or more persons in connection with the carrying out of the Design-Builder’s obligations under this Design-Build Contract, whether for the furnishing of labor, materials, equipment, supplies, services or otherwise, including contracts for Construction, Design Professional Services and Supplies. “Subcontracting Plan” means the Design-Builder’s plan for entering into Subcontracts, to be developed as part of the Phase 1b Preliminary Services in accordance with the requirements set forth in Appendix 2 (Preliminary Services) and the attachment to Appendix 11 (Key Personnel and Approved Subcontractors) and finalized on the GMP Amendment Date in accordance with Section 7.4(C) (Subcontracting Plan). 319
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
22 3835755.8 047018 CTR
“Subcontractor” means any person, other than the Design-Builder, that enters into a Subcontract, including Construction Subcontractors, Design Professional Services Firms and Suppliers.
“Substantial Completion” means demonstration by the Design-Builder in accordance with Article 8 (Substantial Completion and Final Completion) and Appendix 9 (Substantial Completion and Final Completion) that the Project has met all of the Substantial Completion Conditions, as certified by the Design-Builder pursuant to Section 8.1(A) (Substantial Completion Date Conditions) and agreed to by the Town pursuant to Section
8.2(A) (Substantial Completion Date Concurrence).
“Substantial Completion Date” means the date on which Substantial Completion of the Project occurs or is deemed to have occurred under Article 8 (Substantial Completion and Final Completion).
“Substantial Completion Date Conditions” means the preconditions for the achievement of Substantial Completion by the Design-Builder, as set forth in Section 8.1 (Substantial Completion Date Conditions).
“Supplier” means a manufacturer, distributor, materialman, fabricator, vendor or other supplier having a Subcontract to furnish Supplies. “Supplies” means materials, equipment or other supplies furnished in connection with the Design-Build Work.
“Surety” means the surety company issuing the Performance Bond, the Payment Bond, as applicable.
“Tax” means any tax, fee, levy, duty, impost, charge, surcharge, assessment or withholding, or any payment-in-lieu thereof, and any related interest, penalty or addition to tax.
“Technical Standards” means the technical standards applicable to design and testing for the Project set forth in Appendix 4 (Baseline Design Documents) hereto. “Term” has the meaning set forth in Section 3.1 (Effective Date and Term). “Termination Date” means the last day of this Design-Build Contract resulting from a termination under any provision hereof.
“Town” means the Town of Paradise, California, a municipal corporation organized and existing and by virtue of the laws of the State. “Town Allowance” means the amount that the Town has included in the Guaranteed Maximum Price to address Uncontrollable Circumstances as set forth in Section 8.8 of Appendix 8 (Design-Build Price).
“Town Contract Representative” has the meaning specified in Section 17.6(B) (Town Contract Representative).
“Town Fault” means any breach (including the untruth or breach at the time made of any Town representation or warranty herein set forth), failure, non-performance or non-compliance by the Town under this Design-Build Contract with respect to its obligations and responsibilities under this Design-Build Contract to the extent not directly attributable to 320
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
23 3835755.8 047018 CTR
any Uncontrollable Circumstance and which materially and adversely affects the DesignBuilder’s rights, obligations or ability or costs to perform under this Design-Build Contract. “Town Indemnitee” has the meaning specified in Section 15.1 (Design-Builder’s Obligation to Indemnify).
“Town Managed Governmental Approvals” means those Governmental Approvals for which the Town is the application manager, as designated in Appendix 3 (Governmental and Non-Governmental Approvals). [Note: For purposes in addition to Uncontrollable Circumstances, we can revisit.]
“Town Managed Non-Governmental Approvals” means those NonGovernmental Approvals for which the Town is the application manager, as designated in Table A3-2 in Appendix 3 (Governmental and Non-Governmental Approvals). “Town Property” means any structures, improvements, equipment, or other real or personal property owned, leased, operated, maintained, or occupied by the Town. “Traffic Control Plan” means the Design-Builder’s plan for traffic control, to be developed as part of the Design-Build Period Work in accordance with the requirements set forth in Appendix 2 (Preliminary Services). The Traffic Control Plan shall include the traffic control requirements of all applicable jurisdictions, including, without limitation, Butte County, the City of Chico, Caltrans and UPRR.
“Transaction Form” means any of the transaction forms identified in the table of contents to this Design-Build Contract.
“Transition Chamber” means the chamber that provides the necessary transition of the wastewater flow from the steep Ridge Gravity Section to the Gravity Force Main Section that runs along the flatter portions of the valley floor, connecting the Gravity Force Main Section to the Chico WPCP.
“Transition Chamber Site” means the site where the Transition Chamber will be located pursuant to the Baseline Design Documents.
“Unallowable Costs” has the meaning specified in Appendix 8 (Design-Build Price).
“Uncontrollable Circumstance” means any act, event or condition that (1) is beyond the reasonable control of the party relying on it as a justification for not performing an obligation or complying with any condition required of the party under this Design-Build Contract, and (2) materially expands the scope, interferes with, delays or increases the cost of performing the party’s obligations under this Design-Build Contract, to the extent that such act, event or condition is not the result of the willful or negligent act, error or omission, failure to exercise reasonable diligence, or breach of this Design-Build Contract on the part of the party claiming the occurrence of an Uncontrollable Circumstance. (1) Inclusions. Subject to the foregoing, Uncontrollable Circumstances may include the following:
(a) A Change in Law;
(b) The existence of Differing Site Conditions, as and to the extent provided in Section 6.3 (Differing Site Conditions) but subject to the limited relief set forth in Section 6.3(D) (Relief for Differing Site Conditions);
321
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
24 3835755.8 047018 CTR
(c) The existence of a Regulated Site Condition, as and to the extent provided in Section 6.4 (Regulated Site Conditions) but subject to the limited relief set forth in Section 6.4(E) (Uncontrollable Circumstance Relief); (d) Acts, events or circumstances associated with the Separate Contractors, as and to the extent provided in Section 6.13(C) (Interrelated Work); (e) Naturally occurring events, including unusually severe and abnormal climatic conditions (as determined in accordance with Section 14.5 (Unusually Severe and Abnormal Climatic Events)), landslides, underground movement, earthquakes, fires, tornadoes, hurricanes, floods, lightning, epidemics and other acts of God; (f) Explosion, terrorism, sabotage or similar occurrence, acts of a declared public enemy, extortion, war, blockade or insurrection, riot or civil disturbance; (g) Labor disputes or actions, except labor disputes or actions involving employees of the Design-Builder, its Affiliates, or Subcontractors, which affect the performance of the Design-Build Work;
(h) The failure of any Subcontractor (other than the Design-Builder or any Affiliate of the Design-Builder) to furnish services, materials, chemicals or equipment on the dates agreed to, but only if such failure is the result of an event which would constitute an Uncontrollable Circumstance if it affected the Design-Builder directly, and the Design-Builder is not able after exercising all reasonable efforts to timely obtain replacements;
(i) The preemption, confiscation, diversion, destruction or other interference in possession or performance of materials or services by a Governmental Body in connection with a public emergency or any condemnation or other taking by eminent domain of any material portion of the Project;
(j) An act, event or circumstance occurring outside of the United States only to the extent that such act, event or circumstance (i) directly impacts the DesignBuilder’s foreign Suppliers or vendors with respect to the performance of the DesignBuild Work, and (ii) would otherwise constitute an Uncontrollable Circumstance affecting the Design-Builder directly, as determined in accordance with Article 14 (Uncontrollable Circumstances);
(k) Failure of Utilities to perform any relocation work identified in the Utility Relocation Plan in a timely manner following reasonable notice provided that reasonable notice shall at a minimum be [_____] days;
(l) With respect to the Design-Builder, any Town Fault or a Change Order not made due to Design-Builder Fault;
(m) With respect to the Town, any Design-Builder Fault; (n) The addition of any new federal or state project funding requirements that did not exist as of the GMP Submittal; or
(o) Any other act, event or circumstance specifically identified herein as providing a basis for Uncontrollable Circumstance relief. (2) Exclusions. It is specifically understood that, without limitation, none of the following acts, events or circumstances shall constitute Uncontrollable Circumstances:
322
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
25 3835755.8 047018 CTR
(a) Any act, event or circumstance that would not have occurred but for the affected party’s failure to comply with its obligations hereunder; (b) Changes in interest rates, inflation rates, wage rates, insurance premiums, commodity prices, labor availability, currency values, exchange rates or other economic conditions; [Note: Parties to determine whether to provide for escalation of cost of materials prior to GMP Submittal.]
(c) Changes in the financial condition of the Town, the Design-Builder or their Affiliates or Subcontractors affecting the ability to perform their respective obligations;
(d) The consequences of error, neglect or omissions by the Design-Builder, any Subcontractor, any of their Affiliates or any other person in the performance of the Design-Build Work;
(e) Union or labor work rules, requirements or demands which have the effect of increasing the number of employees employed at the Project or otherwise increasing the cost to the Design-Builder of performing the Design-Build Work; (f) Except as specifically included as an Uncontrollable Circumstance pursuant to clause (i)(g) of this definition, strikes, labor disputes, work slowdowns, work stoppages, boycotts or other similar labor disruptions; (g) Weather conditions that do not constitute unusually severe and abnormal climatic conditions (as determined in accordance with Section 14.5 (Unusually Severe and Abnormal Climatic Events));
(h) Except as specifically provided in Section 6.3 (Differing Site Conditions) and Section 6.4 (Regulated Site Conditions), any surface or subsurface conditions affecting the Project Sites during the Design-Build Period Work; (i) Except as specifically provided in the “Inclusions” section of this definition, any act, event, circumstance or Change in Law occurring outside of the United States;
(j) Mechanical failure of equipment or repair delays to the extent not resulting from a condition that is listed in the “Inclusions” section of this definition; (k) The failure of the Design-Builder to secure any patent or other Intellectual Property right which is or may be necessary for the performance of the Design-Build Work;
(l) Acts, events and circumstances with respect to Town Managed Governmental Approvals to the extent the Design-Builder has assumed the permitting risk under Section 6.5 (Permitting Responsibilities and Schedule); or (m) Acts, events and circumstances with respect to Design-Builder Managed Governmental Approvals to the extent the Design-Builder has assumed the permitting risk under Section 6.5 (Permitting Responsibilities and Schedule). “UPRR” means the Union Pacific Railroad.
“UPRR Approval” means the approval required to be granted by UPRR regarding construction of the Project in the UPRR right of way. 323
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
26 3835755.8 047018 CTR
“UPRR Requirements” means the written and oral requirements of UPRR relating to the Design-Build Work to be performed near, next to or under the railway owned by UPRR.
“Utilities” means any and all utility services and installations whatsoever (including gas, water, sewer, electricity, telephone, and telecommunications), and all piping, wiring, conduit, and other fixtures of every kind whatsoever related thereto or used in connection therewith.
“Utility Relocation Plan” means the Design-Builder’s plan for utility relocation to be developed as part of the Phase 1b Preliminary Services in accordance with the requirements set forth in Appendix 2 (Preliminary Services). “Warranty Period” has the meaning specified in Section 10.1(B) (Term of the Project Warranties).
“Warranty Work” means all work and services required to be performed or provided by the Design-Builder pursuant to the Project Warranties in accordance with Article 10 (Project Warranties).
“Wastewater Pipelines” means the wastewater pipes to be designed and installed by the Design-Builder as set forth in Appendix 4 (Baseline Design Documents). “Work Change Directive” has the meaning specified in Section 6.11 (Work Change Directives).
SECTION 1.2. INTERPRETATION.
This Design-Build Contract shall be interpreted according to the following provisions, except to the extent the context or the express provisions of this Design-Build Contract otherwise require:
(A) Gender and Plurality. Words of the masculine gender mean and include correlative words of the feminine and neuter genders and words importing the singular number mean and include the plural number and vice versa.
(B) Persons. Words importing persons include firms, individuals, legal personal representatives, companies, associations, joint ventures, general partnerships, limited partnerships, limited liability corporations, trusts, business trusts, corporations, Governmental Bodies and other legal entities.
(C) Headings. The table of contents and any headings preceding the text of the Articles, Sections and subsections of this Design-Build Contract shall be solely for convenience of reference and shall not affect its meaning, construction or effect. (D) References Hereto. The terms “hereto”, “hereby,” “hereof,” “herein,” “hereunder” and any similar terms refer to this Design-Build Contract. (E) References to Days and Time of Day. All references to days herein are references to calendar days, unless otherwise indicated, such as by reference to Business Days. If the time for doing an act falls or expires on a day that is not a Business Day, the time for doing such act shall be extended to the next Business Day. Each reference to time of day is a reference to Pacific Standard time or Pacific Daylight Saving time, as the case may be. 324
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
27 3835755.8 047018 CTR
(F) References to Including. The words “include,” “includes” and “including” are to be construed as meaning “include without limitation,” “includes without limitation” and “including without limitation,” respectively.
(G) References to Statutes. Each reference to a statute or statutory provision includes any statute or statutory provision which amends, extends, consolidates or replaces the statute or statutory provision or which has been amended, extended, consolidated or replaced by the statute or statutory provision and includes any orders, regulations, by-laws, ordinances, codes of practice or instruments made under the relevant statute. (H) References to the Town, Governmental Bodies and Private Persons. Each reference to the Town or a Governmental Body is deemed to include a reference to any successor to the Town or such Governmental Body or any organization or entity or organizations or entities which has or have taken over the functions or responsibilities of the Town or such Governmental Body. Each reference to a private person that is not an individual is deemed to include a reference to its successors and permitted assigns. (I) References to Documents and Standards. Each reference to an agreement, document, standard, principle or other instrument includes a reference to that agreement, document, standard, principle or instrument as amended, supplemented, substituted, innovated or assigned.
(J) References to All Reasonable Efforts. The expression “all reasonable efforts” and expressions of like import, when used in connection with an obligation of either party, means taking in good faith and with due diligence all commercially reasonable steps to achieve the objective and to perform the obligation, including doing all that can reasonably be done in the circumstances taking into account each party’s obligations hereunder to mitigate delays and additional costs to the other party, and in any event taking no less steps and efforts than those that would be taken by a commercially reasonable and prudent person in comparable circumstances.
(K) Entire Agreement. This Design-Build Contract contains the entire agreement between the parties hereto with respect to the transactions contemplated by this Design-Build Contract. Without limiting the generality of the foregoing, this Design-Build Contract shall completely and fully supersede all other understandings and agreements among the parties with respect to such transactions, including those contained in the RFQ, the Statement of Qualifications, and any amendments or supplements to any such documents. (L) Standards of Workmanship and Materials. Any reference in the Contract Documents to materials, equipment, systems or supplies (whether such references are in lists, notes, specifications, schedules, or otherwise) shall be construed to require the Design-Builder to furnish the same in accordance with the grades and standards therefor indicated in the Contract Documents. Where the Contract Documents do not specify any explicit quality or standard for construction materials or workmanship, the Design-Builder shall use only workmanship and new materials of a quality consistent with that of construction workmanship and materials that are specified elsewhere in the Contract Documents, and the Contract Documents are to be interpreted accordingly.
(M) Technical Standards and Codes. References in the Contract Documents to all professional and technical standards, codes and specifications are to the most recently published professional and technical standards, codes and specifications of the institute, organization, association, authority or society specified, all as in effect as of the Baseline Date.
Unless otherwise specified to the contrary, (1) all such professional and technical standards, codes and specifications shall apply as if incorporated in the Baseline Design Documents, and (2) if any material revision occurs, to the Design-Builder’s actual knowledge, after the Baseline 325
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
28 3835755.8 047018 CTR
Date, and prior to completion of the applicable Design-Build Work, the Design-Builder shall notify the Town. If so directed by the Town through a Work Change Directive or Change Order, the Design-Builder shall perform the applicable Design-Build Work in accordance with the revised professional and technical standard, code, or specification, subject to the DesignBuilder’s rights under this Design-Build Contract with respect to Work Change Directives and Change Orders at the direction of the Town.
(N) Causing Performance. A party shall itself perform, or shall cause to be performed, subject to any limitations specifically imposed hereby with respect to Subcontractors or otherwise, the obligations affirmatively undertaken by such party under this Design-Build Contract.
(O) Party Bearing Cost of Performance. All obligations undertaken by each party hereto shall be performed at the cost of the party undertaking the obligation or responsibility, unless the other party has explicitly agreed herein to bear all or a portion of the cost either directly, by reimbursement to the other party or through an adjustment to the Guaranteed Maximum Price.
(P) Good Engineering and Construction Practice. Good Engineering and Construction Practice shall be utilized hereunder, among other things, to implement and in no event displace or lessen the stringency of, the Contract Standards. (Q) Interpretation of Contract Documents. The Contract Documents are intended to be complementary, and what is set forth in any one document is as binding as if set forth in each document. The parties recognize that Contract Amendments, Change Orders and Work Change Directives may provide for specific modification to the terms and conditions of other Contract Documents, in which case, the modified terms and conditions shall govern, as expressly set forth in the Contract Amendment, Change Order or Work Change Directive.
However, all terms and conditions of such other Contract Documents that are not expressly modified or deleted by a Contract Amendment, Change Order or Work Change Directive shall remain in effect. Section 1.2(R) (Applicability, Stringency and Consistency of Contract Standards) shall govern matters of interpretation related to the applicability, stringency and consistency of the Contract Documents, the requirements of which are included among the Contract Standards.
(R) Applicability, Stringency and Consistency of Contract Standards. The Design-Builder shall be obligated to comply only with those Contract Standards which are applicable in any particular case. Where more than one Contract Standard applies to any particular performance obligation of the Design-Builder hereunder, each such applicable Contract Standard shall be complied with. In the event there are different levels of stringency among such applicable Contract Standards, the most stringent of the applicable Contract Standards shall govern. In the event of any inconsistency among the Contract Standards, the Town’s determination, acting reasonably, as to the applicable standard shall be binding. (S) Delivery of Documents in Digital Format. In the Contract Documents, the Design-Builder is obligated to deliver reports, records, designs, plans, drawings, specifications, proposals and other documentary submittals in connection with the performance of its duties hereunder. The Design-Builder agrees that all such documents shall be submitted to the Town both in printed form (in the number of copies indicated) and, at the Town’s request, in digital form. Digital copies shall consist of computer readable data submitted in any standard interchange format which the Town may reasonably request to facilitate the administration and enforcement of this Design-Build Contract. In the event that a conflict exists between the signed or the signed and stamped hard copy of any document and the digital copy thereof, the signed or the signed and stamped hard copy shall govern. 326
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
29 3835755.8 047018 CTR
(T) Severability. Each provision of this Design-Build Contract shall be valid and enforceable to the fullest extent permitted by law. If any provision of this Design-Build Contract is held to be invalid, unenforceable or illegal to any extent, such provision shall be severed and such invalidity, unenforceability or illegality shall not prejudice or affect the validity, enforceability and legality of the remaining provisions of this Design-Build Contract, unless such continued effectiveness as modified would be contrary to the basic understandings and intentions of the parties as expressed herein. If any provision of this Design-Build Contract is held to be invalid, unenforceable or illegal, the parties will promptly endeavor in good faith to negotiate new provisions to eliminate such invalidity, unenforceability or illegality and to restore this Design-Build Contract as nearly as possible to its original intent and effect. (U) Drafting Responsibility. The parties waive the application of any rule of law which otherwise would be applicable in connection with the construction of this DesignBuild Contract to the effect that ambiguous or conflicting terms or provisions should be construed against the party who (or whose counsel) prepared the executed agreement or any earlier draft of the same.
(V) No Third-Party Rights. This Design-Build Contract is exclusively for the benefit of the Town and the Design-Builder and, except as specifically provided in Article 15 (Indemnification) with respect to the Town Indemnitees and except as specifically provided in Section 17.20 (Rights of Granting Agencies and Federal Agencies) with respect to Granting Agencies and Federal Agencies, shall not provide any third parties with any remedy, claim, liability, reimbursement, cause of action or other rights. (W) Acting Reasonably and in Good Faith; Discretion. Each party shall act reasonably and in good faith in the exercise of its rights hereunder, except where a party has the right to act in its “discretion” by the express terms hereof. When a party has “discretion”, it means that party has the sole, absolute and unfettered discretion, with no requirement to act reasonably or provide reasons unless specifically required under the provisions of this DesignBuild Contract. When a party does not have “discretion” it means that the party shall act reasonably.
(X) Counterparts. This Design-Build Contract may be executed in any number of original counterparts. All such counterparts shall constitute but one and the same Design-Build Contract.
(Y) Governing Law. This Design-Build Contract shall be governed by and construed in accordance with the applicable laws of the State. (Z) Defined Terms. The definitions set forth in Section 1.1 (Definitions) shall control in the event of any conflict with any definitions used in the recitals hereto. (AA) Interpolation. If any calculation hereunder is to be made by reference to a chart or table of values, and the reference calculation falls between two stated values, the calculation shall be made on the basis of linear interpolation. (BB) Accounting and Financial Terms. All accounting and financial terms used herein are, unless otherwise indicated, to be interpreted and applied in accordance with generally accepted accounting principles.
(CC) References to Dollar Amounts. All statements of, or references to, dollar amounts or money, including references to “$” and “dollars”, are to the lawful currency of the United States of America. All payments required to be made by either party hereunder shall be made in dollars.
327
Town of Paradise Sewer Project Design-Build Contract
Article 1 - Definitions and Interpretation
30 3835755.8 047018 CTR
(DD) Liquidated Damages. This Design-Build Contract provides for the payment by the Design-Builder of liquidated damages in certain circumstances associated with unexcused delays in achieving Substantial Completion, as and to the extent provided in Section 8.3(C) (Delay Liquidated Damages). Each party agrees that the Town’s actual damages in each such circumstance of replacement or unexcused delay would be difficult or impossible to ascertain, and that the liquidated damages provided for herein with respect to each such circumstance of unexcused delay are intended to place the Town in the same economic position as it would have been in had the unexcused delay not occurred. Such liquidated damages shall constitute the only damages payable by the Design-Builder to the Town to compensate the Town for such replacement or for unexcused delays in achieving Substantial Completion by the Scheduled Substantial Completion Date, as applicable, regardless of legal theory. This limitation, however, is not intended to limit any of the other remedies for breach specifically provided for in this Design-Build Contract, including the Town’s remedies associated with an Event of Default by the Design-Builder under Section 12.2 (Events of Default by the Design-Builder). The parties acknowledge and agree that the additional remedies specifically provided for in this Design-Build Contract are intended to address harms and damages which are separate and distinct from those which the liquidated damages are meant to remedy. In addition, the parties agree as follows:
(1) that the liquidated damages payable under this Design-Build Contract are not a penalty, and are fair and reasonable and such payment represents a reasonable estimate of fair compensation for the losses that may reasonably be anticipated from the circumstances of unexcused delay; and (2) that, in recognition of the acknowledgments above, the Design-Builder is expressly estopped from arguing, and waives any rights it may have to argue, that the liquidated damages provided for herein are a penalty and that they are not enforceable. (EE) Convenience Termination. The Town may exercise its right of convenience termination under this Design-Build Contract in its discretion. The exercise by the Town of its right of convenience termination under any provision of this Design-Build Contract shall not be deemed a breach of any implied duty of good faith dealing or a Town Event of Default nor shall any damages be payable by the Town on account thereof. The only compensation payable by the Town upon the exercise of its convenience termination option shall be any amounts specified in Section 12.6 (Town Convenience Termination Rights) in connection therewith.
328
Town of Paradise Sewer Project Design-Build Contract
Article 2 – Design-Builder Representations
and Warranties
31 3835755.8 047018 CTR
ARTICLE 2
DESIGN-BUILDER REPRESENTATIONS AND WARRANTIES
SECTION 2.1. REPRESENTATIONS AND WARRANTIES OF THE DESIGNBUILDER.
In addition to any other representations and warranties made by the DesignBuilder in this Design-Build Contract, the Design-Builder represents and warrants that:
(A) Existence and Powers. The Design-Builder is a corporation, having its principal office at 555 Exchange Court, Livermore, California 94550. Such corporation is duly organized, validly existing and in good standing under the laws of the State and has the authority to do business in the State and in any state in which it conducts its activities, with the full legal right, power and authority to enter into and perform its obligations under this Design-Build Contract.
(B) Due Authorization and Binding Obligation. This Design-Build Contract has been duly authorized, executed and delivered by all necessary corporate action of the Design-Builder and constitutes a legal, valid and binding obligation of the Design-Builder, enforceable against the Design-Builder in accordance with its terms, except to the extent that its enforceability may be limited by the Bankruptcy Law or by equitable principles of general application.
(C) No Conflict. Neither the execution nor delivery by the Design-Builder of this Design-Build Contract nor the performance by the Design-Builder of its obligations in connection with the transactions contemplated hereby nor the fulfillment by the DesignBuilder of the terms or conditions hereof (1) conflicts with, violates or results in a breach of any constitution, law, governmental regulation, by-laws or certificates of incorporation applicable to the Design-Builder or (2) conflicts with, violates or results in a breach of any order, judgment or decree, or any contract, agreement or instrument to which the Design-Builder or any of its Affiliates is a party or by which the Design-Builder or any of its Affiliates or any of its properties or assets are bound, or constitutes a default under any of the foregoing. (D) No Commitments Limiting Ability to Perform Contract Obligations. The Design-Builder has no commitments, obligations, or impediments of any kind that would have a material and adverse impact on the ability of the Design-Builder to perform the Contract Obligations in accordance with the Contract Standards. The Design-Builder covenants that it will not enter into any such commitment throughout the Term. (E) No Approvals Required. No approval, authorization, order or consent of, or declaration, registration or filing with, any Governmental Body is required for the valid execution and delivery of this Design-Build Contract by the Design-Builder except as such have been duly obtained or made.
(F) Licensing and Registration Requirements. The Design-Builder possesses all licenses required under Applicable Law to perform all services required of the DesignBuilder under this Design-Build Contract and is not in violation of any of the terms or conditions of such licenses. The Design-Builder is registered with all appropriate Governmental Bodies to the extent necessary to perform all services required of the DesignBuilder under this Design-Build Contract. 329
Town of Paradise Sewer Project Design-Build Contract
Article 2 – Design-Builder Representations
and Warranties
32 3835755.8 047018 CTR
(G) No Litigation. There is no legal proceeding, at law or in equity, before or by any court, arbitral tribunal or other Governmental Body pending or, to the best of the Design-Builder’s knowledge after due inquiry, overtly threatened or publicly announced against the Design-Builder, in which an unfavorable decision, ruling or finding could reasonably be expected to have a material and adverse effect on the execution and delivery of this DesignBuild Contract by the Design-Builder or the validity, legality or enforceability of this DesignBuild Contract against the Design-Builder, or any other agreement or instrument entered into by the Design-Builder in connection with the transactions contemplated hereby, or on the ability of the Design-Builder to perform its obligations hereunder or under any such other agreement or instrument.
(H) Claims and Demands. There are no material and adverse claims or demands based in environmental, contract or tort law pending or threatened against the Design-Builder or any of its Affiliates with respect to any facilities designed or constructed by the Design-Builder or any of its Affiliates that would have a material and adverse effect upon the ability of the Design-Builder to perform the Contract Obligations. (I) Applicable Law Compliance. To the best of its knowledge after due inquiry, the Design-Builder and its Affiliates have no material violation of any law, order, rule or regulation with respect to any facilities designed or constructed by the Design-Builder or any of its Affiliates.
(J) Information Supplied by the Design-Builder. The information supplied and representations and warranties made by the Design-Builder in all submittals made in response to the RFQ with respect to the Design-Builder (and to its knowledge after due inquiry, all information supplied in such submittals with respect to any Affiliate or Subcontractor) are true, correct and complete in all material respects.
(K) Intellectual Property. The Design-Builder owns, or has sufficient rights to use, all Intellectual Property necessary for the Project without any material conflict with the rights of others.
(L) Practicability of Performance. Subject to, and in accordance with, the terms of this Design-Build Contract, the Design-Builder assumes the risk of the practicability and possibility of performance of the Contract Obligations in compliance with the requirements of the Contract Standards on the scale, within the time for completion, and in the manner required hereunder, and agrees that sufficient consideration for the assumption of such risk is included in the Contract Compensation.
(M) Required Insurance. Concurrently with the execution of this DesignBuild Contract, the Design-Builder has provided the Town with certificates of insurance for all Required Insurance specified in Appendix 10 (Insurance Requirements) to be in effect as of the Contract Date. The Required Insurance is in compliance with the requirements of Section 13.1 (Insurance).
330
Town of Paradise Sewer Project Design-Build Contract
Article 3 – Term
33 3835755.8 047018 CTR
ARTICLE 3
TERM
SECTION 3.1. EFFECTIVE DATE AND TERM.
(A) Term. This Design-Build Contract shall become effective, and the term hereof (the “Term”) shall commence, on the Contract Date. The Term shall continue to the Expiration Date or, if this Design-Build Contract is earlier terminated by either party in accordance with their respective termination rights under Article 12 (Breach, Default, Remedies and Termination), to the Termination Date.
(B) Accrued Rights. No termination of this Design-Build Contract shall:
(1) Limit or otherwise affect the respective rights and obligations of the parties hereto accrued prior to the date of such termination; or (2) Preclude either party from impleading the other party in any Legal Proceeding originated by a third-party as to any matter occurring during the Term.
SECTION 3.2. SURVIVAL.
Notwithstanding any other provision of this Design-Build Contract, this Section and the following provisions hereof shall survive the expiration or any earlier termination of this Design-Build Contract:
(1) Article 2 (Design-Builder Representations and Warranties); (2) Section 4.8 (Ownership and Use of Documents and Information); (3) Section 5.8(F) (Elective Continuance of the Project by the Parties on Other Bases);
(4) Section 5.8(G) (Elective Continuance of the Project by the Town with Other Contractors; Project Documents);
(5) Section 7.2(G); (Non-Discrimination in Employment); (6) Section 9.9 (Interest on Overdue Obligations);
(7) Section 9.10 (Retention And Audit of Books and Records); (8) Section 10.3 (Project Warranties Not Exclusive);
(9) Article 11 (Dispute Resolution);
(10) Article 12, as applicable to the obligations of the parties following the Termination Date (Breach, Default, Remedies and Termination); (11) Article 15, including all of the indemnities, limitations and releases set forth therein (Indemnification);
(12) Section 17.7 (Property Rights);
331
Town of Paradise Sewer Project Design-Build Contract
Article 3 – Term
34 3835755.8 047018 CTR
(13) Section 17.13 (Confidentiality);
(14) Attachment 8D (Anticipated Design-Build Period Work Cost Schedule and Design-Builder Contingency) of Appendix 8 (Design-Build Price) regarding Subcontractor and surety recoveries;
(15) Appendix 10 (Insurance Requirements);
(16) All provisions of this Design-Build Contract with respect to payment obligations of the Design-Builder or the Town accrued prior to the Termination Date; (17) Any other provisions which either expressly or by their context or inherent character should survive expiration or earlier termination of this Design-Build Contract or the completion of the Contract Obligations; and (18) Any provisions necessary to give effect to the provisions referenced or described in this Section 3.2 (Survival).
332
Town of Paradise Sewer Project Design-Build Contract
Article 4 – General Performance Requirements
35 3835755.8 047018 CTR
ARTICLE 4
GENERAL PERFORMANCE REQUIREMENTS
SECTION 4.1. PROJECT SCOPE AND PERSONNEL.
(A) Project Scope Generally. The Project and the Project Sites are generally described in Appendix 1. The Design-Builder recognizes that the Project will ultimately be defined by the Baseline Design Documents, which will be developed by the Design-Builder as part of the Preliminary Services.
(B) Pricing Established on the Contract Date. The parties acknowledge and agree that the not-to-exceed limit for the Phase 1a Preliminary Services Fee and the DesignBuilder Fee were proposed by the Design-Builder as part of the Statement of Qualifications, negotiated by the parties prior to the Contract Date and included in this Design-Build Contract as executed on the Contract Date, and shall not be the subject of (1) any Early Work Package Submittal or any Early Work Package Amendment, and (2) the GMP Submittal or the GMP Amendment.
(C) Pricing Established Subsequent to the Contract Date. The parties further acknowledge and agree that all other elements of pricing provided for in this DesignBuild Contract (including the Phase 1b Preliminary Services Fee, the General Conditions Fee and the Guaranteed Maximum Price) are to be negotiated by the parties subsequent to the Contract Date in connection with establishing the Phase 1b Preliminary Services Amendment, any Early Work Package Amendment and the GMP Amendment in accordance with the terms and conditions of this Design-Build Contract. The parties acknowledge that the General Conditions Fee is intended to fully compensate the Design-Builder for General Conditions Costs as defined in Appendix 8 (Design-Build Price). The Town reserves the right to transition the Phase 1a Preliminary Services Fee, the Phase 1b Preliminary Services Fee, the DesignBuilder Fee, the General Conditions Fee and/or the Guaranteed Maximum Price to a lump sum basis.
(D) Estimated Substantial Completion Date. As of the Phase 1b Base Preliminary Services Amendment Date, the estimated Scheduled Substantial Completion Date is [__________], 202[_], based on an estimated Preliminary Services Period (including negotiation of the GMP Amendment) of [_____] days, and an estimated Design-Build Period of [_____] days. [Note: To be agreed to by the parties prior to Phase 1b Base Preliminary Services Amendment.] The Design-Builder shall be responsible for updating and refining the estimated Scheduled Substantial Completion Date as part of the Preliminary Services. Ultimately, the parties intend to negotiate and agree on the definitive Scheduled Substantial Completion Date (expressed as a number of days following the GMP Amendment Date) in accordance with Section 5.8 (GMP Amendment), and to incorporate the agreed upon Scheduled Substantial Completion Date in the GMP Amendment.
SECTION 4.2. DESIGN-BUILDER RESPONSIBILITIES GENERALLY. (A) Reliance. The Design-Builder acknowledges and agrees that the Town is entering into this Design-Build Contract in reliance on the Design-Builder’s expertise with respect to the performance of the Contract Obligations. The Design-Builder recognizes that the Town’s sole purpose is to provide an essential public service and that the achievement of Substantial Completion by the Scheduled Substantial Completion Date and Final Completion by the date specified in Section 8.4 (Final Completion) is critically important to the Town. The Design-Builder agrees that it will be relieved of its performance obligations under this Design333 Town of Paradise Sewer Project Design-Build Contract
Article 4 – General Performance Requirements
36 3835755.8 047018 CTR
Build Contract solely to the extent provided in Article 14 (Uncontrollable Circumstances) with respect to the occurrence of Uncontrollable Circumstances. (B) Scope of the Contract Obligations. The Contract Obligations are divided into the Phase 1a Preliminary Services, the Phase 1b Preliminary Services, the Design-Build Period Work and the Warranty Work, each as more particularly described in Article 5 (Preliminary Services), Article 6 (Design-Build Work), Article 8 (Substantial Completion and Final Completion) and Article 10 (Project Warranties). The Design-Builder recognizes that, notwithstanding this division, the Contract Obligations may overlap and agrees to perform all Contract Obligations in accordance with the Contract Standards. In no event shall the DesignBuilder commence with any Early Work Package prior to the execution of an Early Work Package Amendment and the issuance by the Town of the associated Notice to Proceed in accordance with Section 5.6(H) (Limited Authorization to Proceed; Commencement of Early Work Package). In no event shall the Design-Builder commence with any portion of the Design-Build Period Work authorized in a Limited Notice to Proceed prior to the issuance by the Town of the associated Limited Notice to Proceed in accordance with Section 6.1(A)(2) (Limited Notice to Proceed). Except in respect of any Early Work Package or in respect of any portion of the Design-Build Work authorized in a Limited Notice to Proceed pursuant to Section
6.1(A)(2) (Limited Notice to Proceed), in no event shall the Design-Builder commence with the Design-Build Period Work prior to the GMP Amendment Date and the issuance of the Notice to Proceed with respect to Design-Build Period Work in accordance with Section 6.1(A)(1) (Notice to Proceed). Following the issuance of the earlier of the Notice to Proceed with Design-Build Period Work in accordance with Section 6.1(A)(1) (Notice to Proceed) or a Limited Notice to Proceed pursuant to Section 6.1(A)(2) (Limited Notice to Proceed), the Design-Builder shall be solely responsible for undertaking and completing the design and for the construction of the Project in accordance with the Contract Documents, including supervision, coordination and administration of all design work and of all Construction, and all other work reasonably inferable from the Contract Documents.
(C) Cooperation. The Design-Builder agrees to cooperate with the Town and any entity engaged by the Town in connection with the work to be performed toward completion of the Project and any Related Project, including the Owner Representative and any Separate Contractor, as well as with any contractor performing work for a non-Town owner that could affect the Preliminary Services or the Design-Build Period Work. The Design-Builder recognizes that a cooperative and collaborative environment among all persons engaged in performing such work is essential to the successful implementation of the Project and agrees to use all reasonable efforts to work with all such other persons toward fostering such an environment.
(D) Responsibility for Personnel and Subcontractors. All obligations of the Design-Builder under this Design-Build Contract shall be performed by Design-Builder employees, agents or Subcontractors (subject to the limitations set forth in Article 7 (Management, Labor and Subcontractors)) who are qualified to perform the specific services and meet all licensing and certification requirements of Applicable Law. The Design-Builder shall be fully responsible, in accordance with the terms and conditions of this Design-Build Contract, for all Contract Obligations performed by its employees, agents or Subcontractors. (E) Stationing of Key Personnel. From and after the Construction Commencement Date, the Design-Builder’s construction superintendent shall on a full-time basis be stationed at the Project Site, and the Project Manager and other appropriate Key Personnel shall also be stationed at the Project Site or be available as required for communications with the Town.
334
Town of Paradise Sewer Project Design-Build Contract
Article 4 – General Performance Requirements
37 3835755.8 047018 CTR
SECTION 4.3. ENVIRONMENTAL REVIEW.
(A) CEQA. The Town is complying with CEQA for the Project as described herein. The Town Council approved and certified a Programmatic EIR in November 2022. The Design-Builder shall provide the Town with any reasonably requested assistance associated with CEQA compliance and any environmental mitigation measures required as a result of the CEQA process shall constitute Baseline Design Documents, which the Design-Builder is required to comply with hereunder. The CEQA analysis for the Project will not be completed prior to the Contract Date. The Town will not issue the Notice to Proceed with Design-Build Period Work in accordance with Section 6.1(A)(1) (Notice to Proceed) or a Limited Notice to Proceed pursuant to Section 6.1(A)(2) (Limited Notice to Proceed) with ground disturbing construction (as opposed to ground disturbing investigations) until the CEQA process is successfully completed and all other Construction Commencement Date Conditions are achieved. Prior to the issuance of the Notice to Proceed with Design-Build Period Work in accordance with Section 6.1(A)(1) (Notice to Proceed) establishing the Construction Commencement Date, the Design-Builder is authorized to perform the following Design-Build Work:
(1) Design Professional Services, including site investigations and the preparation of the Archaeological Construction Monitoring, Mitigation and Preservation Plans;
(2) Design work to support environmental regulatory compliance and early permit coordination; and
(3) Surface, subsurface and geotechnical studies or tests. (B) NEPA. The Town will serve as the lead agency with respect to any necessary NEPA compliance. The Design-Builder shall provide the Town with any reasonably requested assistance associated with NEPA compliance and any environmental mitigation measures required as a result of the NEPA process shall constitute Baseline Design Documents, which the Design-Builder is required to comply with hereunder. The NEPA analysis for the Project will not be completed prior to the Contract Date. The Town will not issue the Notice to Proceed with Design-Build Period Work in accordance with Section 6.1(A)(1) (Notice to Proceed) or a Limited Notice to Proceed pursuant to Section 6.1(A)(2) (Limited Notice to Proceed) with ground disturbing construction (as opposed to ground disturbing investigations) until the NEPA process is successfully completed and all other Construction Commencement Date Conditions are achieved. Prior to the issuance of the Notice to Proceed with Design-Build Period Work in accordance with Section 6.1(A)(1) (Notice to Proceed) establishing the Construction Commencement Date, the Design-Builder is authorized to perform the following Design-Build Work:
(1) Design Professional Services, including site investigations and the preparation of the Archaeological Construction Monitoring, Mitigation and Preservation Plans;
(2) Design work to support environmental regulatory compliance and early permit coordination; and
(3) Surface, subsurface and geotechnical studies or tests.
SECTION 4.4. ACCESS TO AND SUITABILITY OF THE PROJECT SITES. (A) Familiarity with the Project Sites. Prior to the issuance of the earlier of the Notice to Proceed with Design-Build Period Work in accordance with Section 6.1(A)(1) 335
Town of Paradise Sewer Project Design-Build Contract
Article 4 – General Performance Requirements
38 3835755.8 047018 CTR
(Notice to Proceed) or a Limited Notice to Proceed pursuant to Section 6.1(A)(2) (Limited Notice to Proceed), the Design-Builder’s agents and representatives shall have inspected and become familiar with the Project Sites, their physical condition relevant to the obligations of the DesignBuilder pursuant to this Design-Build Contract, including surface conditions, normal and usual soil conditions, roads, Utilities, topographical conditions and air and water quality conditions and, as part of the Preliminary Services, shall have developed the Geotechnical Baseline Report, the Geotechnical Evaluation Report and the Contaminated Media Management Plan and other Preliminary Services Deliverable Materials. As of the issuance of the earlier of the Notice to Proceed with Design-Build Period Work in accordance with Section
6.1(A)(1) (Notice to Proceed) or a Limited Notice to Proceed pursuant to Section 6.1(A)(2) (Limited Notice to Proceed), the Design-Builder shall be familiar with all local and other conditions which may be material to the Design-Builder’s performance of the Design-Build Period Work (including transportation; seasons and climate; water tables; typical weather; access, availability, disposal, handling and storage of materials and equipment; and availability and quality of labor and Utilities); the Design-Builder shall have received and reviewed all information regarding the Project Sites provided to it or developed by it in connection with the Preliminary Services pursuant to this Design-Build Contract; and the Design-Builder shall have made all other site investigations that it deems necessary to make a determination as to the suitability of the Project Sites and to submit its GMP Submittal to the Town in accordance with Section 5.7 (GMP Submittal).
(B) Independent Verification of the Town-Provided Project Sites Information.
The Design-Builder acknowledges that it is responsible for the independent verification and confirmation of any Project Sites information, including geotechnical, soils, utility locations, groundwater levels and other reports, surveys and analyses regarding the Project Sites, supplied to it by or on behalf of the Town and upon which it elects to rely in connection herewith. Except with respect to Differing Site Conditions and Regulated Site Conditions, as and to the extent provided in Section 6.3(D) (Relief for Differing Site Conditions) and (E) (Uncontrollable Circumstance Relief) respectively, no error or omission in any such information shall constitute an Uncontrollable Circumstance, or relieve the Design-Builder from the Contract Obligations or entitle the Design-Builder to any increase in compensation hereunder.
Notwithstanding any factual statement, conclusion, or any language or recommendation contained in any information supplied to the Design-Builder by or on behalf of the Town, the Design-Builder assumes full responsibility for inspecting the Project Sites and for the means and methods of construction that it employs when performing the Design-Build Work. (C) Access to the Project Sites. Subject to the provisions of this Section
4.4(C), the Design-Builder shall have access to the Project Sites for the purposes of performing the Contract Obligations, including such surface, subsurface and geotechnical studies or tests required to be performed as part of the Preliminary Services and as deemed necessary by the Design-Builder prior to the commencement of Construction in accordance with Good Engineering and Construction Practice. Such access shall be subject to the Town’s prior approval, which shall not be unreasonably withheld, as to time and scope, and shall be subject to all Town procedures and requirements regarding Project Sites security and any applicable easement or right of way restrictions. The Design-Builder shall perform all such activities in accordance with the Contract Standards, including the specific requirements set forth in Appendix 2 (Preliminary Services) and Appendix 5 (General Design-Build Work Requirements), and shall provide the Town with all reports or analyses generated by such activities promptly after such reports or analyses are generated. Except to the extent provided in Section 6.4 (Regulated Site Conditions) with respect to Regulated Site Conditions, the Design-Builder shall assume all risks associated with such activities and shall indemnify, defend and hold harmless the Town Indemnitees in accordance with and to the extent provided in Article 15 (Indemnification) from and against all Loss-and-Expense resulting therefrom. Following the issuance of the Notice to Proceed with Design-Build Period Work and for the duration of the Design-Build Period, the Design-Builder shall have all Project Sites access rights as are 336
Town of Paradise Sewer Project Design-Build Contract
Article 4 – General Performance Requirements
39 3835755.8 047018 CTR
necessary for the performance of the Design-Build Work in accordance with the Contract Documents. Notwithstanding any of the foregoing, the Design-Builder shall not access portions of the alignment until either the Design-Builder or the Town has obtained legal access rights, and the Design-Builder shall at all times comply with the Project Sites access requirements and restrictions set forth in the Contract Documents, including Appendix 5 (General Design-Build Work Requirements), and shall coordinate the Design-Build Work and interface with all Separate Contractors in accordance with Section 6.13 (Interface and Coordination with Town, Utilities and Other Contractors). (D) Core Collection System Rights of Way. The Town shall acquire all easements or rights of way necessary for the Core Collection System Rights of Way. The Design-Builder shall comply with all conditions of all Non-Governmental Approvals. Upon such acquisition, the acquiring party shall notify the other party, and the Design-Builder shall thereafter have access rights in respect thereof in accordance with Section 4.4(C) (Access to the Project Sites). Each party shall use all reasonable efforts to inform the other party of its progress toward acquiring such.
(E) Export Pipeline System Rights of Way. The Town shall acquire all easements or rights of way necessary for the Export Pipeline System Rights of Way, including the UPRR and Caltrans crossings. The Design-Builder shall comply with all conditions of all Non-Governmental Approvals. Upon such acquisition, the acquiring party shall notify the other party, and the Design-Builder shall thereafter have access rights in respect thereof in accordance with Section 4.4(C) (Access to the Project Sites). Each party shall use all reasonable efforts to inform the other party of its progress toward acquiring such. (F) Project Sites Signage. The Design-Builder shall provide all Project Sites signage, including directional, safety, information, and warning signs in accordance with the Contract Standards.
SECTION 4.5. INFORMATION PROVIDED BY OR ON BEHALF OF THE TOWN.
(A) Generally. The Town has made data and information available to the Design-Builder on the Project website. The Town makes no representation or warranty with respect to any information provided to the Design-Builder by or on behalf of the Town in connection with this Design-Build Contract. The Design-Builder shall assess all risks related to the Project and independently verify and confirm all information supplied to it by or on behalf of the Town and upon which the Design-Builder elects to rely in connection herewith.
Except as may reasonably be requested by the Design-Builder, agreed upon by the Town in its discretion, and expressly established in the GMP Amendment or any Early Work Package Amendment, the Design-Builder shall have no right to relief hereunder or to make any claim against the Town, or to seek any adjustment to the Contract Compensation or the Scheduled Substantial Completion Date as the result of any error, omission or insufficiency relating to any information provided to the Design-Builder by or on behalf of the Town in connection with this Design-Build Contract.
SECTION 4.6. COMPLIANCE WITH APPLICABLE LAW.
(A) Compliance with Applicable Law Generally. The Design-Builder shall, and shall cause all Subcontractors to, perform the Contract Obligations in accordance with Applicable Law and all other applicable Contract Standards. The Design-Builder shall provide all notices required by Applicable Law and the Contract Standards. The incorporation, reference or citation of specific statutes or other parts of Applicable Law in the Contract Documents is not intended, nor shall it be construed, to limit the generality of the Design337 Town of Paradise Sewer Project Design-Build Contract
Article 4 – General Performance Requirements
40 3835755.8 047018 CTR
Builder’s and all Subcontractors’ obligations to comply with Applicable Law (whether or not specifically incorporated or referenced in the Contract Documents). (B) Compliance with Conditions in Governmental Approvals. The DesignBuilder shall comply with all conditions and requirements of all Governmental Approvals required to be made, obtained or maintained under Applicable Law in connection with the performance of the Contract Obligations, including the Town Managed Governmental Approvals. The Design-Builder shall report to the Town, immediately upon obtaining knowledge thereof, all violations of the terms and conditions of any Governmental Approval or Applicable Law pertaining to the Project. The Town, in its capacity as the counterparty to the Design-Builder under this Design-Build Contract, shall have the right independently to enforce compliance with this Design-Build Contract regarding the requirements of any Governmental Approval regardless of whether a concurrent or different regulatory enforcement action has been undertaken by any other Governmental Body. The Design-Builder shall comply with and perform all Environmental Mitigation Measures in a timely manner to the extent required under applicable Governmental Approvals. Any violations of or noncompliance with any Governmental Approval caused by the Design-Builder violating or not being in compliance with a Governmental Approval shall be at the sole risk of the Design-Builder and shall not be a basis for Uncontrollable Circumstance relief under this Design-Build Contract. (C) Fines, Penalties and Remediation. In the event that the Design-Builder or any Subcontractor fails at any time to comply with Applicable Law with respect to the Design-Build Work, the Design-Builder shall:
(1) Promptly respond to any notice of non-compliance, warning letter, notice of violation or other enforcement action and seek amicable resolution of the issues; (2) Immediately correct such failure and resume compliance with Applicable Law;
(3) Pay any resulting fines, assessments, levies, impositions, penalties or other charges;
(4) Indemnify, defend and hold harmless the Town Indemnitees in accordance with and to the extent provided in Article 15 (Indemnification) from and against all Loss-and-Expense resulting therefrom;
(5) Make all changes in performing the Contract Obligations which are necessary so that the failure of compliance with Applicable Law will not recur; and (6) Comply with any corrective action plan filed with or mandated by any Governmental Body in order to remedy a failure of the Design-Builder to comply with Applicable Law.
(D) Compliance with Conditions in Grants. The parties acknowledge and agree that the Town intends to utilize Grants for the entirety of its financing structure. The Design-Builder hereby acknowledges that the utilization of the Grants is predicated on complying with all applicable requirements of the Grants, including, as applicable, complying with Davis-Bacon Act wage requirements, the Disadvantaged Business Enterprise Program, Build America Buy America Act, American Iron and Steel requirements and Section 3 of the Housing and Urban Development Act of 1968. The Design-Builder shall comply will all such requirements, including all applicable provisions identified in Appendix 12 (Certain Grant Requirements and Guidelines). The Design-Builder represents and warrants that the costs of compliance with all federal or state programs that may be required in order to obtain the Grants (including the requirements identified in Appendix 12 (Certain Grant Requirements and 338
Town of Paradise Sewer Project Design-Build Contract
Article 4 – General Performance Requirements
41 3835755.8 047018 CTR
Guidelines) are incorporated into the Phase 1a Preliminary Services Fee as of the Contract Date. Only the addition of any new federal or state project funding requirements that did not exist as of the GMP Submittal shall constitute an Uncontrollable Circumstance.
SECTION 4.7. ENGAGEMENT OF TOWN REPRESENTATIVES.
The Design-Builder shall fully cooperate with the Owner Representative and any other representative designated by the Town from time to time. The services of the Owner Representative and other Town-designated representatives may include the following:
(1) Reviewing drawings, plans and specifications for compliance with the Contract Documents;
(2) Reviewing proposed changes to the Baseline Design Documents; (3) Determining the completion of specified portions of the Design-Build Work and reviewing the release of funds to the Design-Builder pursuant hereto; (4) Reviewing and monitoring Construction progress, scheduling, payments and procedures;
(5) Monitoring testing undertaken by the Design-Builder; (6) Assisting the Town in reviewing the validity of the Design-Builder’s written notice that an Uncontrollable Circumstance has occurred; and (7) Reviewing and advising the Town with respect to material changes to the Project during the Term.
It is understood that the services intended to be provided by the Owner Representative shall be of an observational and review nature only, and that the Owner Representative shall not have authority to interfere with, halt or delay in any way the construction of the Project or to require or approve changes to the Design-Builder’s Baseline Design Documents or plans and specifications made in accordance therewith. Any fees of the Owner Representative shall be paid by the Town. Nothing in this Section 4.7 shall be construed to limit the right of any Town personnel or representative having the authority to protect the health and safety from inspecting the Project or otherwise exercising any power permitted under Applicable Law.
SECTION 4.8. OWNERSHIP AND USE OF DOCUMENTS AND
INFORMATION.
The Design-Builder acknowledges and agrees that the Town shall own exclusively the Deliverable Material and any and all other documents and information in whatsoever form and character produced or maintained in accordance with, pursuant to, or as a result of this Design-Build Contract. All such documents and information may be used as the Town determines and shall be delivered to the Town at no additional cost to the Town as required hereunder, upon request, upon Project completion or upon termination of this DesignBuild Contract. If the Town uses any such documents and material for a purpose other than the Project, such use shall be at the Town’s sole risk and liability.
SECTION 4.9. MONTHLY PROGRESS REPORTS.
The Design-Builder shall provide the Town and the Owner Representative with monthly written reports (“Monthly Progress Report”) prepared in accordance with the Contract 339
Town of Paradise Sewer Project Design-Build Contract
Article 4 – General Performance Requirements
42 3835755.8 047018 CTR
Standards, covering the Project and addressing work performed during the past month, percentage of work completion and compliance with the Project Schedule. The Design-Builder shall describe Project issues, problems or concerns that the Town should be made aware of and how the Design-Builder proposes to address them in each Monthly Progress Report. The Monthly Progress Report shall include a description of the work planned for the next three months. The Monthly Progress Report shall also include cash flow reports and forecasts that satisfy the Town’s reporting requirements for the Grants. The Town’s and the Owner Representative’s receipt or acceptance of the Monthly Progress Report (or any revised Monthly Progress Report) shall not bind the Town in any manner. Thus, the Town’s and the Owner Representative’s receipt or acceptance of the Monthly Progress Report (or any revised Monthly Progress Report) shall not imply the Town approval or consent to any of the matters set forth therein and shall not limit or otherwise affect the Design-Builder’s obligations to achieve Substantial Completion by the Scheduled Substantial Completion Date and Final Completion by the date specified in Section 8.4 (Final Completion). 340
Town of Paradise Sewer Project Design-Build Contract
Article 5 – Preliminary Services
43 3835755.8 047018 CTR
ARTICLE 5
PRELIMINARY SERVICES
SECTION 5.1. SCOPE OF THE PRELIMINARY SERVICES.
(A) Generally. The Design-Builder shall render and perform the Phase 1a Preliminary Services to and for the Town in accordance with Appendix 2 (Preliminary Services) and the terms and conditions of this Design-Build Contract. The Design-Builder shall render and perform the Phase 1b Preliminary Services to and for the Town in accordance with Appendix 2 (Preliminary Services), the Health and Safety Plan and the Quality Management Plan, and the terms and conditions of this Design-Build Contract. The parties acknowledge that the Town may desire to expand the scope of the Preliminary Services performed by the Design-Builder under this Design-Build Contract at any time, in its discretion, beyond those services included in the Phase 1a Preliminary Services and the Phase 1b Preliminary Services based on the recommendations of the Design-Builder, to be delivered in additional phases of the Preliminary Services, to be defined sequentially as Phase 1c, Phase 1d, etc. The DesignBuilder and the Town shall enter into a Contract Amendment to provide for such additional phase of Preliminary Services, the scope of the base preliminary services for such phase, the fee for such base preliminary services and the preliminary services schedule for such phase.
The Design-Builder’s responsibility to perform the Preliminary Services shall include the employment of or the subcontracting for all necessary professionals, technicians and engineers, properly qualified, licensed and skilled in the various aspects of the Preliminary Services, and the performance of all services reasonably inferable from the Contract Documents.
(B) Phase 1a Base Preliminary Services; Notice to Proceed. The DesignBuilder acknowledges that the Phase 1a Base Preliminary Services are divided into discrete Preliminary Services Tasks identified in Appendix 2 (Preliminary Services) and associated with the advancement of the Phase 1a Base Preliminary Services. The Design-Builder shall commence performing a discrete Preliminary Services Task of the Phase 1a Base Preliminary Services only upon the issuance by the Town Contract Representative of a Notice to Proceed with such discrete Preliminary Services Task of the Phase 1a Base Preliminary Services. In no event shall the Design-Builder be entitled to compensation for the performance of any Preliminary Services Task of the Phase 1a Base Preliminary Services prior to the issuance by the Town of a Notice to Proceed with such discrete Preliminary Services Task of the Phase 1a Base Preliminary Services.
(C) Phase 1b Base Preliminary Services. The parties acknowledge and agree that the not-to-exceed limit for the Phase 1b Preliminary Services Fee was not proposed by the Design-Builder as part of the Statement of Qualifications, and therefore not included in this Design-Build Contract as executed on the Contract Date. The Town shall have the discretion to authorize the Phase 1b Base Preliminary Services pursuant to this Section. (1) Phase 1b Base Preliminary Services Submittal. Concurrently with delivery of the Basis of Design Report delivered to the Town as part of the Phase 1a Base Preliminary Services, the Design-Builder shall recommend the scope of the Phase 1b Base Preliminary Services and the discrete Preliminary Services Tasks thereof, the amount of the Phase 1b Preliminary Services Fee and the Phase 1b Preliminary Services Schedule to the Town Contract Representative through the performance of the Phase 1a Base Preliminary Services, based on a Phase 1b Base Preliminary Services submittal (the “Phase 1b Base Preliminary Services Submittal”). If not already included in the Basis of Design Report delivered to the Town as part of the Phase 1a Base Preliminary Services, the 341
Town of Paradise Sewer Project Design-Build Contract
Article 5 – Preliminary Services
44 3835755.8 047018 CTR
scope of the Phase 1b Base Preliminary Services described in the Phase 1b Base Preliminary Services Submittal shall include the milestones at which the DesignBuilder recommends review and update of the Baseline Cost Model and the Baseline Design and Construction Phasing Plan and Schedule (non-guaranteed).
The Phase 1b Base Preliminary Services Submittal shall include recommendations of the Design-Builder with respect to the GMP Submittal Design Level for the Phase 1b Base Preliminary Services. The scope of the Phase 1b Base Preliminary Services described in the Phase 1b Base Preliminary Services Submittal shall also include development of the design of the Project to the GMP Submittal Design Level. The Phase 1b Base Preliminary Services Submittal shall be completed and submitted to the Town on a timely basis as required in this Section 5.1(C), and shall remain a firm offer by the DesignBuilder for at least 90 days. The Design-Builder shall not condition the Phase 1b Base Preliminary Services Submittal by inclusion of any requirement that a Phase 1b Base Preliminary Services Amendment be entered into by the parties or that a Notice to Proceed with a discrete Preliminary Services Task of the Phase 1b Base Preliminary Services be issued by the Town prior to the expiration of such 90-day period.
(2) No Material Change to Design Set Forth in Basis of Design Report. The Design-Builder acknowledges the Town’s material interest in each provision of the Basis of Design Report, and agrees that, subject to Section
5.1(C)(3), no material change to the design of the Project set forth in the Basis of Design Report shall be made except with the consent of the Town, which may be withheld or conditioned in its discretion.
(3) Permitted Change to Design Set Forth in Basis of Design Report Made Due to Uncontrollable Circumstances. Upon the occurrence of an Uncontrollable Circumstance after the Basis of Design Report, the DesignBuilder shall promptly proceed, subject to the terms, conditions and procedures set forth in Article 14 (Uncontrollable Circumstances) and subject to the Town’s approval, to make or cause to be made all changes to the design of the Project set forth in the Basis of Design Report reasonably necessary to address the Uncontrollable Circumstance. The Design-Builder shall consult with the Town concerning possible means of addressing and mitigating the effect of any Uncontrollable Circumstance. The parties shall use all reasonable efforts to address all changes to the design of the Project set forth in the Basis of Design Report required due to Uncontrollable Circumstances in a manner that will not impact the critical path of planned Phase 1b Base Preliminary Services in the Phase 1b Preliminary Services Schedule.
(4) Phase 1b Base Preliminary Services Amendment. The agreement of the parties as to the scope of the Phase 1b Base Preliminary Services and the discrete Preliminary Services Tasks thereof, the amount of the Phase 1b Preliminary Services Fee and the Phase 1b Preliminary Services Schedule, as well as to any permitted change to the design of the Project set forth in the Basis of Design Report, shall be effectuated through a Contract Amendment authorizing the Phase 1b Base Preliminary Services (a “Phase 1b Base Preliminary Services Amendment”). In the event the parties elect to execute the Phase 1b Base Preliminary Services Amendment, the date of execution and delivery thereof shall constitute the “Phase 1b Base Preliminary Services Amendment Date” hereunder. All work performed pursuant to a Phase 1b Base Preliminary Services Amendment shall constitute Preliminary Services hereunder and shall be performed in accordance with Appendix 2 (Preliminary 342
Town of Paradise Sewer Project Design-Build Contract
Article 5 – Preliminary Services
45 3835755.8 047018 CTR
Services), the Health and Safety Plan and the Quality Management Plan, and the terms and conditions of this Design-Build Contract.
(D) Phase 1b Base Preliminary Services; Notice to Proceed. The DesignBuilder acknowledges that the Phase 1b Base Preliminary Services are divided into discrete Preliminary Services Tasks identified in Appendix 2 (Preliminary Services) and associated with the advancement of the Phase 1b Base Preliminary Services. The Design-Builder shall commence performing a discrete Preliminary Services Task of the Phase 1b Base Preliminary Services only upon the issuance by the Town Contract Representative of a Notice to Proceed with such discrete Preliminary Services Task of the Phase 1b Base Preliminary Services. In no event shall the Design-Builder be entitled to compensation for the performance of any Preliminary Services Task of the Phase 1b Base Preliminary Services prior to the issuance by the Town of a Notice to Proceed with such discrete Preliminary Services Task of the Phase 1b Base Preliminary Services.
(E) No Obligation of Town to Enter Into a Phase 1b Preliminary Services Amendment. Notwithstanding the intent of the parties as expressed in Section 5.1(C) (Phase 1b Base Preliminary Services) and (D) (Phase 1b Base Preliminary Services; Notice to Proceed), the Town has no obligation whatsoever to negotiate with the Design-Builder to enter into a Phase 1b Base Preliminary Services Amendment. The Town, in its discretion, may elect not to commence or continue negotiations and not to enter into and execute a Phase 1b Base Preliminary Services Amendment for any reason. The Design-Builder acknowledges and agrees that no failure by the Town to negotiate or to enter into a Phase 1b Base Preliminary Services Amendment shall entitle the Design-Builder to make any claim for damages or compensation as a result of any such failure, and all such claims are hereby waived and released by the Design-Builder. The Design-Builder acknowledges and agrees that neither the intent of the parties to negotiate and enter into a Phase 1b Base Preliminary Services Amendment, nor the conduct or discontinuance of any such negotiations, shall be construed to limit or affect the Town’s right to off-ramp or terminate this Design-Build Contract for its convenience at any time as provided in Section 12.6 (Town Convenience Termination Rights).
SECTION 5.2. CHANGES TO THE SCOPE OF THE PRELIMINARY
SERVICES.
(A) Generally. The Town shall have the right to make changes to the scope of the Phase 1a Preliminary Services or the Phase 1b Preliminary Services set forth in Appendix 2 (Preliminary Services) at any time, in its discretion, by written notice to the DesignBuilder, subject to the terms and conditions of this Section. Changes to the scope of the Phase 1a Preliminary Services or the Phase 1b Preliminary Services may be made by the Town to account for an Uncontrollable Circumstance or any other reason determined by the Town. (B) Additional Preliminary Services.
(1) Except as otherwise specifically provided in this Section, the Design-Builder shall be entitled to an equitable adjustment to the maximum amount of the Phase 1a Preliminary Services Fee (as stated in Appendix 2 (Preliminary Services)) and the Phase 1a Preliminary Services Schedule in the event of any expansion of the scope of the Phase 1a Base Preliminary Services pursuant to this Section (the “Additional Phase 1a Preliminary Services”). Any expansion of the scope of the Phase 1a Base Preliminary Services under this subsection (B) and the corresponding equitable adjustment to the maximum amount of the Phase 1a Preliminary Services Fee and the Phase 1a Preliminary Services Schedule shall be reflected in a Change Order or a Contract Amendment. The Design-Builder shall not be entitled to compensation for any Phase 1a Additional Preliminary Services beyond the scope of the Phase 1a Base 343
Town of Paradise Sewer Project Design-Build Contract
Article 5 – Preliminary Services
46 3835755.8 047018 CTR
Preliminary Services unless, prior to the performance of any such Phase 1a Additional Preliminary Services, the Design-Builder shall have received express written authorization from the Town to perform the Phase 1a Additional Preliminary Services. In the absence of any the Town-directed change to the scope of the Phase 1a Base Preliminary Services reflected in a Change Order or a Contract Amendment, the Design-Builder shall have no obligation to perform work outside the scope of the Phase 1a Base Preliminary Services. (2) Except as otherwise specifically provided in this Section, the Design-Builder shall be entitled to an equitable adjustment to the maximum amount of the Phase 1b Preliminary Services Fee (as stated in Appendix 2 (Preliminary Services)) and the Phase 1b Preliminary Services Schedule in the event of any expansion of the scope of the Phase 1b Base Preliminary Services pursuant to this Section (the “Additional Phase 1b Preliminary Services”). Any expansion of the scope of the Phase 1b Base Preliminary Services under this subsection (B) and the corresponding equitable adjustment to the maximum amount of the Phase 1b Preliminary Services Fee and the Phase 1b Preliminary Services Schedule shall be reflected in a Change Order or a Contract Amendment. The Design-Builder shall not be entitled to compensation for any Phase 1b Additional Preliminary Services beyond the scope of the Phase 1b Base Preliminary Services unless, prior to the performance of any such Phase 1b Additional Preliminary Services, the Design-Builder shall have received express written authorization from the Town to perform the Phase 1b Additional Preliminary Services. In the absence of any the Town-directed change to the scope of the Phase 1b Base Preliminary Services reflected in a Change Order or a Contract Amendment, the Design-Builder shall have no obligation to perform work outside the scope of the Phase 1b Base Preliminary Services. (C) Additional Preliminary Services Resulting From Delay. (1) Except as otherwise set forth in Section 6.5 (Permitting Responsibilities and Schedule), extra costs resulting from delays caused by Uncontrollable Circumstances, shall be deemed to be costs resulting from Additional Phase 1a Preliminary Services, provided the Design-Builder demonstrates that the costs claimed (1) resulted from time or expenses actually incurred in performing the Phase 1a Base Preliminary Services, (2) were incurred by Design-Builder as a direct result of the delay and not otherwise within the scope of the Phase 1a Base Preliminary Services, and (3) are documented to the Town’s reasonable satisfaction.
(2) Except as otherwise set forth in Section 6.5 (Permitting Responsibilities and Schedule), extra costs resulting from delays caused by Uncontrollable Circumstances, shall be deemed to be costs resulting from Additional Phase 1b Preliminary Services, provided the Design-Builder demonstrates that the costs claimed (1) resulted from time or expenses actually incurred in performing the Phase 1b Base Preliminary Services, (2) were incurred by Design-Builder as a direct result of the delay and not otherwise within the scope of the Phase 1b Base Preliminary Services, and (3) are documented to the Town’s reasonable satisfaction.
(D) Exclusions from Additional Preliminary Services. Additional Preliminary Services shall not include work or services necessary because of errors, omissions or conflicts of any type in the Design-Builder’s plans and specifications or other Preliminary Services Deliverable Material. All such work or services shall constitute Phase 1a Base Preliminary Services or Phase 1b Base Preliminary Services, as applicable, and shall be performed at no 344
Town of Paradise Sewer Project Design-Build Contract
Article 5 – Preliminary Services
47 3835755.8 047018 CTR
cost to the Town, and shall include any required corrections or revisions to reports, plans or specifications.
(E) Changes that Reduce the Scope of the Preliminary Services. The Town shall have the right to reduce the scope of the Phase 1a Preliminary Services or the Phase 1b Preliminary Services at any time by written notice to the Design-Builder. Changes to the Phase 1a Preliminary Services or the Phase 1b Preliminary Services that reduce the scope of the Phase 1a Preliminary Services or the Phase 1b Preliminary Services shall be effective upon the delivery of the written notice by the Town pursuant to this subsection (E). Any reduction in the scope of the Phase 1a Preliminary Services or the Phase 1b Preliminary Services shall result in an appropriate reduction in the Phase 1a Preliminary Services Fee or the Phase 1b Preliminary Services Fee, as applicable, and an adjustment to the Phase 1a Preliminary Services Schedule or the Phase 1b Preliminary Services Schedule, as appropriate, which shall be reflected in a Change Order or a Contract Amendment.
SECTION 5.3. PRELIMINARY SERVICES SCHEDULE.
The Phase 1a Preliminary Services Schedule is set forth in Attachment 2B-1 (Phase 1a Preliminary Services Schedule) and shall be updated as provided in Appendix 2 (Preliminary Services). The Design-Builder acknowledges that time is of the essence with respect to major milestones and in relation to days from completion of all prerequisites in the performance of the Phase 1a Preliminary Services and agrees to complete the Phase 1a Preliminary Services in a diligent, efficient and timely manner in accordance with Good Engineering and Construction Practice and in any event in accordance with the Phase 1a Preliminary Services Schedule.
As part of the Phase 1b Preliminary Services Amendment, the Phase 1b Preliminary Services Schedule will be set forth in Attachment 2B-2 (Phase 1b Preliminary Services Schedule) and shall be updated as provided in Appendix 2 (Preliminary Services). The Design-Builder acknowledges that time is of the essence in the performance of the Phase 1b Preliminary Services and agrees to complete the Phase 1b Preliminary Services in a diligent, efficient and timely manner in accordance with Good Engineering and Construction Practice and in any event in accordance with the Phase 1b Preliminary Services Schedule.
SECTION 5.4. COORDINATION WITH TOWN.
(A) Meetings and Reports Generally. The Design-Builder shall hold periodic meetings and conferences with the Town during the Preliminary Services Period, in accordance with Appendix 2 (Preliminary Services), to verify and confirm that the development of the Project (1) has the full benefit of the Town’s experience and knowledge of existing needs and facilities, (2) is consistent with the Town’s current policies and standards, and (3) is proceeding in accordance with the Preliminary Services Schedule. The Design-Builder shall also keep the Town regularly informed as to the progress of the Preliminary Services through the submittal of Monthly Progress Reports in accordance with the requirements set forth in Section 4.9 (Monthly Progress Reports) and Appendix 2 (Preliminary Services). The Monthly Progress Report shall present Project budget information and indicate amounts billed by Preliminary Services Task by the Design-Builder for the past month, cumulatively to date and the amount of funds remaining. The Monthly Progress Report shall include a section on the progress of the design and list any concerns, actions, changes, and reviews and approvals from the Town that the Design-Builder requires. The Design-Builder shall indicate any Governmental Body, UPRR or Utility requirements and issues that the Town should be aware of. (B) Information Provided by the Town. The Town shall make available for the Design-Builder’s use in the performance of the Preliminary Services all existing plans, maps, field notes, statistics, computations, and other data in the Town’s possession relating to 345
Town of Paradise Sewer Project Design-Build Contract
Article 5 – Preliminary Services
48 3835755.8 047018 CTR
the Project, as reasonably requested in writing by the Design-Builder, at no cost to the DesignBuilder. All such information is provided to the Design-Builder for the sole purpose of the Design-Builder’s convenience and for use in relation to the performance of the Preliminary Services, may not be relied upon by the Design-Builder, and must be verified by the DesignBuilder as provided in subsection (C) of this Section. The Design-Builder shall promptly notify the Town in writing when it reasonably believes or suspects that information provided by the Town is not accurate or cannot be checked. Any and all information provided by the Town shall remain the property of the Town and shall be returned promptly to the Town upon written request.
(C) Required Design Information. Notwithstanding the provisions of subsection (B) of this Section, the Design-Builder shall be responsible for obtaining and verifying all information required as further described in Appendix 2 (Preliminary Services) in order to properly design the Project so that it is designed, constructed and performs in accordance with Applicable Law and the Contract Standards. (D) Revisions to Drawings and Specifications. Notwithstanding anything in this Design-Build Contract to the contrary, the Design-Builder shall, at no additional expense to the Town, provide reasonable minor revisions to any and all drawings and specifications provided to the Town, whether or not previously reviewed and accepted by the Town, as may be required to satisfy the Preliminary Services established by this Design-Build Contract. It is agreed and understood that the scope of each of the Preliminary Services Tasks in Appendix 2 (Preliminary Services) (Preliminary Services) may require some reasonable minor revisions to drawings and specifications provided to the Town, as the scope of the Project is refined, and that such reasonable minor revisions are included within the existing Preliminary Services under this Design-Build Contract. The Design-Builder shall make, without additional expense to the Town, such reasonable minor revisions or corrections to the Preliminary Services Deliverable Material as may be required.
SECTION 5.5. PROJECT DESIGN.
(A) Design Considerations. The design for the Project undertaken and performed by the Design-Builder shall:
(1) Be undertaken by a design team exercising such degree of care, skill and diligence as would reasonably be expected from consultants qualified to perform services similar in scope, nature and complexity to the design, as of the date of this Design-Build Contract, and the Design-Builder shall appoint a design team that:
(a) Is so qualified;
(b) Includes (as required by Applicable Law) licensed or registered professional engineers and architects; and
(c) Has sufficient expertise and experience to expeditiously and efficiently perform all of the design in a proper and professional manner to the standard set out in this Design-Build Contract;
(2) Include specific consideration of “constructability” and “life cycle” cost issues at all stages of design, as appropriate; and
(3) Include consideration of efficient and cost-effective operation and maintenance.
346
Town of Paradise Sewer Project Design-Build Contract
Article 5 – Preliminary Services
49 3835755.8 047018 CTR
(B) Design-Builder Assumption of Full Design Liability. The Design-Builder acknowledges and agrees that, as provided in Section 6.7 (Final Design Responsibilities and Risk Assumption), if and when a GMP Amendment is executed by the parties (and with respect to any Early Work Package work, when an Early Work Package Amendment is executed by the parties), the Design-Builder will have the sole and exclusive responsibility and liability for the design, construction and performance of the Project in accordance with and subject to the terms and conditions of the Contract Documents. Accordingly, the Design-Builder shall have the right and the responsibility to develop and provide the Preliminary Design Documents and to perform the Preliminary Services under this Design-Build Contract in a manner that would permit a design-build contractor, acting reasonably and having the experience and qualifications required to successfully undertake and complete the design and construction of a project similar in scale and complexity to the Project, to assume such responsibility and liability. In particular, the Design-Builder shall not propose or agree to any element of the Baseline Design Documents or other work product to be incorporated in any GMP Amendment or Early Work Package Amendment that would, in its reasonable judgment, be inconsistent with the assumption of such responsibility and liability.
SECTION 5.6. EARLY WORK PACKAGES.
(A) Early Work Packages. The parties anticipate that there may be some phases of the Design-Build Work that are ready for commencement before it is appropriate to arrive at an overall agreed-upon Base Guaranteed Maximum Price in accordance with Section
5.7 (GMP Submittal). The Design-Builder shall recommend such phases or elements of the Design-Build Work (“Early Work Packages”) to the Town Contract Representative, as appropriate, through the performance of the Preliminary Services, based on Early Work Package submittals (“Early Work Package Submittals”). The Town shall have the discretion to authorize the commencement of Design-Build Work associated with an Early Work Package pursuant to this Section. The agreement of the parties as to an Early Work Package shall be effectuated through a Contract Amendment authorizing the Design-Build Work associated with the Early Work Package and specifying the terms and conditions of compensation payable to the Design-Builder and the completion dates associated with such Design-Build Work (an “Early Work Package Amendment”). All work performed pursuant to an Early Work Package Amendment shall constitute Design-Build Work hereunder and shall be performed in accordance with the Contract Standards. The Town shall have no obligation to enter into an Early Work Package Amendment. All Early Work Package Amendments agreed upon in accordance with this subsection (A) shall be taken into consideration in the preparation of the GMP Submittal submitted in accordance with Section 5.7 (GMP Submittal). The DesignBuilder shall furnish a Performance Bond and a Payment Bond with a penal sum equal to the guaranteed maximum price or lump sum amount applicable to the Early Work Package, in compliance with the requirements set forth in Section 16.1 (Bonds) prior to the Town’s issuance of a construction NTP for the Early Work Package. (B) Early Work Package Submittals. An Early Work Package Submittal shall include and be based upon the applicable Baseline Design Documents and all other specifications, information, analysis, findings and reports developed by the Design-Builder during the performance of the Preliminary Services as developed to the date of submittal, and shall be prepared in accordance with the Contract Standards. An Early Work Package Submittal shall include the following:
Price Submittal:
(1) a proposed lump sum or guaranteed maximum price, as authorized by the Town, including the terms and conditions of payment, focused solely on the DesignBuild Work associated with the Early Work Package and prepared in accordance with 347
Town of Paradise Sewer Project Design-Build Contract
Article 5 – Preliminary Services
50 3835755.8 047018 CTR
subsection (E) of this Section, together with a description of how such price will impact overall Project costs;
Technical Submittal:
(2) A detailed description of the Design-Build Work associated with the Early Work Package Submittal and the associated Baseline Design Documents; (3) A proposed schedule for completion of the Design-Build Work associated with the Early Work Package, together with a description of how such work will impact the Project Schedule;
(4) A listing of any assumptions, clarifications or qualifications made by the Design-Builder in providing the Early Work Package Submittal that are material to any part thereof, including a statement as to what information supplied by the Town (if any) the Design-Builder proposes to use as the basis of any portion of its Early Work Package Submittal; and
(5) Any other information reasonably requested by the Town prior to the due date for the Early Work Package Submittal as necessary or appropriate to negotiate and complete the Early Work Package Amendment.
(C) Early Work Package Submittal Revisions. The Design-Builder shall provide the Town with at least seven days’ notice prior to submitting an Early Work Package Submittal for review. The Town will act reasonably in considering any proposed Early Work Package in light of the schedule requirements under this Design-Build Contract. In the event the Early Work Package Submittal does not comply with the Contract Standards, the Town may provide written notice to the Design-Builder of any additions, corrections or revisions required to achieve such compliance. In such event, the Design-Builder, without any increase in the Preliminary Services Fee, shall promptly take all necessary rectification action, making multiple re-submittals if required.
(D) Negotiation and Execution. If the Town agrees to authorize the commencement of a portion of the Design-Build Work under an Early Work Package Submittal, the Design-Builder and the Town shall negotiate and enter into an Early Work Package Amendment. An Early Work Package Amendment at a minimum shall incorporate and definitively address all of the items identified in subsection (B) of this Section, and shall contain any other commercial terms and conditions specific to the Early Work Package, including the rights of the Town to terminate the work being performed pursuant to the Early Work Package Amendment and the right of the Town to direct the Design-Builder to continue performance of the Early Work Package in the event the parties do not enter into a GMP Amendment. Early Work Packages may be structured in a manner that provides for the commencement of the related Design-Build Work at any time determined by the parties. (E) Complete Early Design-Build Work Package Pricing. It is the intention of the parties that each Early Work Package Submittal, and any associated Early Work Package Amendment, include complete pricing for the Design-Build Work to be performed thereunder, including: (1) the maximum cost of the Design-Build Work described in the Early Work Package Submittal excluding the Design-Builder Fee, the General Conditions Fee and contingency; (2) the Design-Builder Fee, attributable to the Design-Build Work described in the Early Work Package Submittal; (3) the General Conditions Fee attributed to the Design-Build Work described in the Early Work Package Submittal; and a contingency amount for such Design-Build Work to be administered in the same manner as the Design-Builder Contingency.