CAPITAL BANK CB CONNECT ONLINE BANKING

AGREEMENT AND INITIAL DISCLOSURES

Electronic Disclosures: You agree to receive this Agreement and Initial Disclosure electronically. After you have carefully read this Agreement, you will be asked to consent to the terms and conditions of this Agreement. We suggest that you print a copy of this Agreement for future reference.

1. Definitions. As used in this Agreement, account(s) refers to the checking, savings or money market account(s) you have with Capital Bank, some of which may not be eligible for electronic transfers and bill payments using the Service; Capital Bank refers to Capital Bank and its depository institution affiliates where your Accounts may be located; agreement refers to the Terms and Conditions of Your Deposit Account given to you at the time your account was opened; designated service charge account means the Account you have designated to be charged for all fees and charges associated with the Services; business day(s) means Monday through Friday, except Federal Reserve holidays. The service(s) refers to collectively, any or all of Capital Bank’s Online Banking Services, which allows you to access account and transaction information and transfer funds, and, if you so choose to pay bills on a personal computer – CB Connect refers to the Service allowing you to access account and transaction information and transfer funds and CB Connect with Bill Pay refers to the Service allowing you to pay bills; we, us or our refers to Capital Bank and any agent, independent contractor, designee or assignee that Capital Bank may, in its sole discretion, involve in the provision of the Service; you or your refers to the individuals, corporations, partnerships, limited liability companies and sole proprietorships subscribing to or using the Service.
   
   
2. Applicability. This Agreement and the Initial Disclosures (the "Agreement") between you and Capital Bank governs your use of CB Connect and CB Connect with Bill Pay. By subscribing to CB Connect or CB Connect with Bill Pay or using these services you agree to the terms of this Agreement. Please read this Agreement carefully and in its entirety. We suggest that you print a copy of this Agreement.
   
   
3. CB Connect and CB Connect with Bill Pay. With CB Connect, you may access your accounts and transaction information and order transfers of funds among your eligible account(s). Not all Capital Bank accounts are eligible for electronic transfers using the service. If you are subscribing to CB Connect with Bill Pay, you may also use a personal computer to direct us electronically to make payments from your eligible account(s) to third parties ("Payees") whom you have selected in advance to receive payments.
   
   
4. Software and Equipment Requirements. You may access your account information and direct us to make payments from your eligible account(s) using any personal computer that provides access to the Internet. The online browser you use must use 128 Bit SSL encryption.
   
   
5. Account Requirements. To subscribe to CB Connect, you must maintain at least one checking account with Capital Bank, which may include the following types of accounts: checking account or money market account collectively and individually (“accounts”). CB Connect will allow you to access more than one account, to view account balance and transaction information, transfer funds among designated accounts, pay bills from designated accounts, send electronic mail to Capital Bank and receive electronic mail from the Bank.
   
   
6. Your User ID and Password. Upon becoming an online banking client, you will receive a temporary user ID and password, which will allow you access to your account information. Use of the user ID and password assigned to you will indicate to the Bank your acceptance of the terms and conditions governing your account(s) and this online banking agreement. You will be asked to choose a unique user ID consisting of 6-12 alpha-numeric characters and a password consisting of 6-12 alpha-numeric characters which you will use to obtain access to your eligible account(s). You authorize us to follow any instructions entered through CB Connect or CB Connect with Bill Pay using your user ID and password. Because your user ID and password can be used to access money in your account(s) and to access information about these account(s), you should treat your user ID and password with the same degree of care and secrecy that you use to protect your ATM security code and other sensitive financial data. We may ask you to change your user ID and password from time to time for security reasons. You agree not to use any language that is abusive, harassing, libelous, defamatory, obscene or threatening when defining your user ID or any other personalization of your account(s).
   
   
7. Sharing Your User ID and Password with Others. You agree not to give or make available your user ID, password or account number(s) to any person who is not authorized to access your account(s). If someone to whom you have granted authority to use your user ID and password exceeds such authority, you are fully liable for all transfers and payments made by such person until you have notified us that you have terminated the authority granted to such person and have given us a reasonable period of time to act upon such notice. We may require that you put such notice in writing. Upon receipt of such notice we may require you to immediately change your user ID and password and to identify the person or persons you believe to have exceeded such authority. You agree to cooperate with us in the investigation and prosecution of any person who has obtained and used your user ID and password without your authorization.
   
   
8. Balance Inquiries and Transfers. You may use the service to check the balance of your accounts and to transfer funds among your eligible accounts. In order to initiate one of these transactions, you must first use your user ID and password to go online and obtain access to your account(s). The balance shown may include deposits still subject to collection by us. The balance shown also may differ from your records because it may not include deposits in progress, outstanding checks, or other withdrawals, payments or charges. A funds transfer request will be transacted immediately, if funds are available. If there are insufficient funds in an account from which you are requesting a funds transfer, including any overdraft line of credit, you will be notified immediately by an electronic message.
   
   
9. Documentation. All of the payments and funds transfers made through CB Connect and CB Connect with Bill Pay will appear on your monthly account statement. The Payee name, payment amount and transaction date will be reflected for each payment made through CB Connect with Bill Pay.
   
   
10. Fees. You will not be charged for the use of CB Connect except for account transaction fees as described in our Personal and Business Products and Services brochures.
    
    Monthly fees may be changed with advance notice. There may be additional fees charged against your accounts if a transaction you initiate using CB Connect or CB Connect with Bill Pay causes any of your accounts to be overdrawn, exceed the maximum permissible number of transactions for the accounts or exceed any other qualifiers for the accounts. Refer to our Personal or Business Products and Services brochure for a complete listing of these fees. You authorize Capital Bank to deduct all applicable subscription, service and user fees for CB Connect with Bill Pay from your designated service charge account.
    
    
11. Termination. You may terminate your use of CB Connect and CB Connect with Bill Pay at any time by:
    
    
    • Visiting your local Capital Bank branch office
    • Calling Capital Bank customer service at 800.308.3971
    • Sending an email to customerservice@capitalbank-nc.com
    • Writing to us at Capital Bank, Post Office Box 18949, Raleigh, NC  27619

    You must notify us at least ten (10) days prior to the date on which you wish to have your service terminated. We may require that you put your request in writing. Subject to applicable law, we may terminate your use of CB Connect or CB Connect with Bill Pay in whole or in part, at any time without notice if you do not pay any required fee when due, if you do not comply with the terms of this agreement or the agreements governing your accounts, if your account(s) or designated service charge account is not maintained in good standing and no other account and service charge account has been designated or if we believe that you have handled your account(s) or CB Connect or CB Connect with Bill Pay in a fraudulent manner. We may also terminate your use of CB Connect or CB Connect with Bill Pay for any other reason by giving you fifteen (15) days notice. After 120 days of consecutive inactivity, a client’s bill pay service may be automatically terminated without notice. Termination will not affect your liability or obligation under this agreement for transactions that we have processed on your behalf.
    

12. Business Days. Our business days are Monday through Friday. Federal Reserve Holidays are not included. You may use the service 24 hours a day, seven (7) days a week, except during maintenance periods, for the scheduling, modification or review of payment orders and for funds transfers and balance inquiries. Bill payments can be processed only on business days.
    
    
13. Transfer Types and Limitations.
    1. Account Access
       1. Transfer funds between your eligible accounts whenever you request.
       2. If you subscribe to CB Connect with Bill Pay, pay bills directly from your eligible account(s) in the amounts and on the days you request in accordance with the terms of this agreement to merchants and individuals located in the U.S.
       3. Obtain account balances.
       4. Review the history of past transactions on your accounts.
       5. Email messages to us. However, email may not be used to initiate transactions on your accounts.
    2. Limitations on Frequency of Transfers. You may initiate an unlimited number of transfers between your eligible Accounts subject to the limitations that apply to the maximum number of automatic or recurring withdrawals from savings and money market accounts. Please refer to the Truth in Savings disclosures provided to you when your account was opened for more details.
    3. Limitations on Dollar Amount of Transfers/Bill Payments. The maximum aggregate amount that can be transferred between eligible Accounts per day is unlimited. The maximum aggregate bill payment amount that can be paid per day is unlimited.
       
       
14. Electronic Funds Transfer Act. Some of the terms set forth below are governed by the Electronic Funds Transfer Act (“EFT Act”), which is only applicable to personal accounts. Business account holders are not entitled to the rights provided under the EFT act.
    
    
15. Your Liability (Applicable to personal accounts only). Tell us AT ONCE if you believe your user ID and password have been lost or stolen. Telephoning is the best way of keeping your possible losses down. You could lose all the money in your account (plus your maximum overdraft line of credit). If you believe your user ID and password have been lost or stolen and you tell us within two (2) business days after you learn of the loss or theft, you can lose no more than $50 if someone used your user ID and password without your permission.
    
    If you do NOT tell us within two (2) business days after you learn of the loss or theft of your user ID and password and we can prove that we could have stopped someone from using your user ID and password 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, tell us AT ONCE. If you do not tell us within sixty (60) days after the statement was mailed to you, you may not get back any money you lost after the sixty (60) days if we can prove that we could have stopped someone from taking the money if you had told 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.
    
    
16. Contact In Event of Unauthorized Transfer. If you believe your user ID and password have been lost or stolen or that someone to whom you have granted authority to use your user ID and password has exceeded such authority or that someone has transferred or may transfer money from your account(s) without your permission, please call us immediately at:
    
    800.308.3971
    
    Or contact your local branch as soon as possible.
    
    Please note that you may be asked to verify your identity by answering your security question.
    
    
17. Bank Liability for Transfers and Bill Payments (Applicable to personal accounts only). If we do not complete a transfer to or from your account on time or in the correct amount according to this agreement, we will be liable for your losses or damages. This liability is in addition to the payment guarantee for bill payments. 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 the transfer or payment.
    2. If the transfer or payment would go over the credit limit on your overdraft line.
    3. The funds in your account are subject to legal process or other encumbrance restricting such transfer.
    4. If the service or your personal computer or modem is not working properly and you know about the malfunction when you started the transfer or payment.
    5. A Payee mishandles or causes delays in handling payments sent by us.
    6. You have not provided us with the correct Payee name, address, account information or payment amount.
    7. Circumstances beyond our control prevent the proper completion of the transaction despite reasonable precautions by us to avoid these circumstances. Such circumstances include, but are not limited to, fire, flood, delay in U. S. Mail, interruption in your electrical power or telephone, the disconnecting of your telephone line by your local telephone company or from deficiencies in your line quality or any defect or malfunction of your personal computer, operating software, modem or telephone line.
    8. If you have not properly followed the instructions for using CB Connect.
       
       
18. Error Resolution Notice (Applicable to personal accounts only).
    
    In Case of Errors or Questions About Your Electronic Transfers
    Telephone us at  800.308.3971
    
    Or Email:  customerservice@capitalbank-nc.com
    
    Or write:
    Capital Bank
    CB Connect Services
    P.O. Box 18949
    Raleigh, NC 27619
    
    Please note that you may be asked to verify your identity by answering your security question.
    
    Contact Capital Bank as soon as you can, if you think your statement (or information regarding a transaction) is wrong or you need more information about a transfer listed on the statement. We must hear from you no later than sixty (60) days after we sent the FIRST statement on which the problem or error appeared. When contacting Capital Bank regarding an error, please be prepared to communicate the following information:
    
    
    1. Your name, social security number or tax identification number and account number.
    2. 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.
    3. The dollar amount of the suspected error.

    If you tell us orally, we may require that you send us your complaint or question in writing within ten (10) business days. We will tell you the results of our investigation within ten (10) business days (twenty (20) business days if the transfer involved a new accounts) after we hear from you and will correct any error promptly. If we need more time, however, we may take up to forty-five (45) days (ninety (90) business days if the transfer involved a new account) to investigate your complaint or question. If we decide to do this, we will credit your account within ten (10) business days (twenty (20) business days if the error involved a new account) for the amount you think is in error, so that you will have use of the money during the time it takes us to complete our investigation. If we ask you to put your complaint or question in writing and we do not receive it within ten (10) business days, we may not credit your account. We will tell you the results of our investigation within three (3) business days after we finish our investigation. If we decide that there was no error, we will send you a written explanation. You may ask for copies of the documents that we used in our investigation.

    
    

19. Electronic Messaging.  CB Connect provides you with the ability to send and receive electronic messages to and from us. Please remember that we will not immediately receive an electronic message sent by you. If you need to contact us immediately, please see the Section titled Error Resolution Notice. No action will be made on any electronic message you send to us until we actually receive your message and have a reasonable opportunity to act on it. In addition, electronic messages should include your designated security question and answer.
    
    Electronic messaging CANNOT be used to notify us of unauthorized transactions. Notification of these occurrences must be done as specified in the section titled Contact in Event of Unauthorized Transfer. From time to time, we may send important notices to you concerning your use of the service by electronic messaging. The electronic messaging service may not be used to send or receive email messages to or from the general public.
    
    
20. Limitation of Liability. Except as otherwise provided in this agreement or by law, we are not responsible for any loss, injury or damage whether direct, indirect, special or consequential, caused by CB Connect or CB Connect with Bill Pay or the use thereof, even if we have been advised of the possibility of such damages or losses. We are not responsible for any loss, damage or injury resulting from an interruption in your electrical power or telephone; the disconnecting of your telephone line by your local telephone company or from deficiencies in your line quality, the failure or unavailability of online access; problems with online service providers, any defect or malfunction of your personal computer, modem or telephone line.
    CAPITAL BANK MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO YOU CONCERNING THE SERVICE, EQUIPMENT, BROWSER OR OTHER SERVICES INCLUDING, BUT NOT LIMITED TO ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE OR NONINFRINGEMENT OF THIRD-PARTY RIGHTS, UNLESS DISCLAIMING SUCH WARRANTY IS PROHIBITED BY LAW.
    
    
21. Entire Agreement. This agreement, together with the terms and conditions of your deposit account, which is incorporated herein by reference, constitutes the complete and exclusive agreement related to CB Connect and CB Connect with Bill Pay and supplements the terms and conditions of your deposit account and any other agreement or disclosure related to your accounts. In the event of a conflict between this agreement and any other agreement or disclosure related to you’re accounts or any statement by our employees or agents, this agreement shall control, only as to electronic fund transfers conducted by using CB Connect and CB Connect with Bill Pay.
    
    
22. Waivers. No delay or omission by us in exercising any rights or remedies hereunder shall impair such right or remedy or be construed as a waiver of any such right or remedy. Any single or partial exercise of a right or remedy shall not preclude further exercise or the exercise of any other right or remedy. No waiver shall be valid unless in writing and signed by us.
    
    
23. Assignment. You may not assign this agreement to any other party. We may assign this agreement or delegate any or all of our rights and responsibilities under this agreement to any third parties.
    
    
24. Governing Law. This agreement shall be governed by and construed in accordance with the laws of North Carolina, without regard to that state's conflict of laws provisions.
    
    
25. Amendments. We may amend this agreement from time to time by giving you written or electronic notice. Notice may be included in your account statement. The notice may state that there has been a change in this agreement and that changes have been posted on our website capitalbank-nc.com or instruct you to call 800.308.3971 to request a copy. Continued use of CB Connect and CB Connect with Bill Pay following notice of amendment constitutes acceptance of any amendments to this agreement.
    
    
26. Severability. If any provision of this agreement is determined to be void or invalid, the remainder of this agreement shall remain in full force and effect.