Harrington Bank Online Banking Agreement
and Disclosure Statement

This agreement states the terms and conditions that apply when you use the Harrington Online Banking service. These terms and conditions are in addition to those that apply to any accounts you have with us or any other services you obtain from us. You must also follow all of our instructions and procedures applicable to the services covered by this agreement. Each time you access an account through Harrington Online Banking, you confirm your agreement to these terms.

1. Definitions

* "You" and "your" mean each person or business entity who establishes a Harrington Online Banking Customer Account with us or who uses or is authorized to use a Harrington Online Banking identification number and password or other means of access we establish or approve.

* "Harrington Online Banking" and the "Service" means our service that allows you to make payments, transfer funds, access accounts, obtain information and perform other transactions over the Internet by use of a personal computer and modem and/or other means we authorize or allow.

* "We", "us", "our" or "the Bank" refer to Harrington Bank which offers the Service and which holds the account or accounts accessed by the Service.

2. Identification Number and PIN

To access the Harrington Online Banking service, you must use the identification number (Harrington Online Banking ID) and/or other means of access we establish or provide for your Harrington Online Banking Customer Account, together with a Harrington Online Banking PIN. Anyone to whom you give your Harrington Online Banking ID and PIN or other means of access will have full access to your accounts and you will not be able to limit that person's authority.

The first time you access any of the accounts available to you under this Service, you confirm your agreement to be bound by all of the terms and conditions of this Agreement and acknowledge your receipt and understanding of this disclosure. You may choose to accept or decline new services or changes to existing services by continuing or discontinuing the services to which such change may relate.

Upon your acceptance of this Agreement and the successful completion of your application, we will provide you, in a timely manner, with your Harrington Online Banking ID and a temporary PIN. You will be prompted to change your PIN after the first use of your bank assigned PIN. We recommend that you change your PIN on a regular basis. We are entitled to act on any instruction received under your Harrington Online Banking ID and PIN. You are responsible for keeping your Harrington Online Banking ID, PIN, and account data confidential.

WE STRONGLY SUGGEST THAT YOU DO NOT DELEGATE AUTHORITY OVER YOUR ACCOUNT TO ANYONE WHO IS NOT AN AUTHORIZED SIGNER FOR YOUR ACCOUNT AS LISTED ON THE ACCOUNT SIGNATURE CARD.

You must be a principal owner of this account. Notwithstanding any instructions contained on the signature card for your account, you understand and agree that access to your account via Harrington Online Banking is granted by IDs and PINs that can be reentered by a single individual. You should not designate any account that requires more than one signature for withdrawals. However, if you do so designate such an account, you, and all co-signers of the account, agree that transactions made via Harrington Online Banking by use of an ID and PIN are authorized.

3. Online Banking Transactions

You, or someone you have authorized by giving them your Harrington Online Banking ID and PIN or other means of access (even if that person exceeds your authority), may instruct us to perform the following transactions:

• View account balances and transaction history;
• Make transfers between your qualifying accounts to the extent authorized;
• Obtain information that we make available about your qualifying accounts;
• Make payments on eligible loan accounts or lines of credit;
• Make third party payments under the Bill Pay Service (see Section 4 for disclosures concerning the Bill Pay Service);
• Obtain other services or perform other transactions that we authorize or make available now or at a future date.

4. Bill Pay Service

The Bill Pay Service allows you to schedule bill payments through Harrington Online Banking. Bill payments cannot be made from savings accounts, IRAs, lines of credit, installment loans, or certificates of deposit, and, because of the limitations discussed in Section 5, bill payments may not be made from money market accounts.

Eligible Payees: You may only designate payees with addresses in the United States. We reserve the right to determine who may be a payee. You may not use the Bill Pay Service to purchase securities, to make federal or state tax payments, or to comply with any court order.

Initiating Payments: To initiate a payment, you must identify the person or business you are paying, the payment date, the amount to be paid, and (if you have one) your account number with the payee. You may be asked for additional information when you establish a payee for the first time on our system. You may pay an unlimited number of payees using the Bill Pay Service.

Erroneous Payment Requests. You assume sole responsibility for providing us with complete and accurate payment information. We are not responsible for confirming such information, or for identifying or rejecting errors or duplicate payment instructions. If you give us a payment instruction that is incorrect in any way, you agree that we may charge your account for the payment, whether or not the error could have been detected by us. We are not obligated to detect errors in your transfer or payment instructions.

Processing Payments. There are two payment processing times per business day: 3:00 a.m. EST and 1:00 p.m. EST. The cut-off time for processing payments on any business day is 12:45 p.m. EST. The business day you instruct us to process the payment is the "Payment Initiation Date". For payments entered by 2:45 a.m. EST or 12:45 p.m. EST on the Payment Initiation Date and that are to be paid electronically, we will withdraw funds from your designated account on the Payment Initiation Date and then will process an Automated Clearing House (electronic) payment on the following business day to the payee. For payments entered by 2:45 a.m. EST or 12:45 p.m. EST on the Payment Initiation Date and that are to be paid by check, we will mail a check to the payee on the Payment Initiation Date. The funds will not be withdrawn from your account until the payee deposits the check and it clears through the Bank. Payments that are to be made either electronically or via check that are entered after 12:45 p.m. EST on the Payment Initiation Date, or anytime on a non-business day, will be processed at the first processing time on the next business day. We do not have to make a payment if you do not have sufficient funds or credit available for the payment on the Payment Initiation Date. Although you can enter a payment request 24 hours a day, 7 days a week, your designated Payment Initiation Date must be on a business day. If you direct us to make a payment on a day other than a business day, we will initiate the payment on the following business day.

Scheduling Payments. You should schedule payments sufficiently in advance to ensure that they are received and credited by your payee by the payment due date. WE RECOMMEND THAT YOU SCHEDULE THE PAYMENT INITIATION DATE AT LEAST FIVE (5) BUSINESS DAYS PRIOR TO THE DATE THE PAYMENT IS DUE AT YOUR PAYEE WITHOUT REGARD TO ANY GRACE PERIOD. Although we may be able to pay certain payees electronically within two business days, it could take longer for payments sent by mail. It is your responsibility to request that payments be made in such a manner that they will be paid on time. You are solely responsible for any damages, such as late fees and finance charges, that may be imposed as a result of your failure to identify the correct Payment Initiation Date and transmit your payment instruction to us in a timely manner. To ensure that critical or time-sensitive payments are received on time, you should consider establishing payment dates (especially for payees that will receive payment by mail during peak holiday periods) well in advance of the payment due date. We will not be responsible for any charges imposed or any other action taken by a payee resulting from a payment that you have not scheduled properly. In addition, we will not be liable if any third party through which any bill payment is made (e.g., the postal system) fails to properly transmit the payment to the intended payee.

Changing or Canceling Payments. You may cancel or change any scheduled payment by utilizing Harrington Online Banking up until the time it is processed on the Payment Initiation Date. If the payment has been entered or scheduled by or before 2:45 a.m. EST on the Payment Initiation Date, you have until 3:00 a.m. EST to change, modify or delete that payment. If the payment has been entered between 3:01 a.m. and 12:45 p.m. on the Payment Initiation Date, you have until 1:00 p.m. EST to change, modify or delete that payment. You may also call us at (919) 945-7800 or write us at Harrington Online Banking, 5925 Farrington Road, Chapel Hill, NC 27517, in time for us to receive your request three business days or more before the payment is scheduled to be made. If you call, we may also require you to put your request in writing and get it to us within 7 days after you call. If you order us to stop one of these payments by phone or by mail three business days or more before the transfer is scheduled, and we do not do so, we will be liable for your losses or damages.

Rejecting Payment Requests. We may reject any payment request with or without cause or prior notice. If we do, we will notify you promptly of the rejection orally, electronically or in writing.

Joint Accounts. Since joint account holders share the same payee list, any account owner or authorized signer may (a) authorize transfers and payments to or from joint accounts, (b) cancel payments, and (c) remove any payee from the list.

5. Limits On Online Banking Transactions

You must have enough available money or credit in any account from which you instruct us to make a payment or transfer. Payments are not allowed from savings, money market, certificate of deposit, installment loan, or line of credit accounts. You cannot transfer funds from an installment loan or line of credit (with the exception of home equity loans), or from or into a certificate of deposit or IRA. Funds transfers into loans or lines of credit will be credited as payments in the manner set forth in your promissory note or loan agreement. Transfers from savings and money market accounts are limited by law and your deposit account agreement with us. For these types of accounts, you may only make up to six withdrawals and/or transfers each month by check, preauthorized or automatic transfer, draft, telephone, or online access. Only three of these six transactions may be by check, draft, debit card, or similar order to third parties. Funds from deposited items may also be subject to an uncollected funds hold, as disclosed in your funds availability disclosure. You may request another one of these at the time you fill out your Harrington Online Banking application.

6. Our Liability For Failure To Complete Payments Or Transfers

If we do not complete a payment or transfer on time or in the correct amount according to our agreement with you, we will only be liable to you to complete such payment or transfer. Under no circumstances will the Bank be liable for any damages that you may suffer, including consequential damages, due to our failure to complete a payment or transfer. Specifically, the Bank will NOT be liable to any extent whatsoever if:

a) Through no fault of ours, you do not have enough available money in the account from which a payment or transfer is to be made, or if the account has been closed or is not in good standing, or if we reverse a payment or transfer because of insufficient funds;

b) Any payment or transfer would go over the credit limit of any account;

c) Your equipment or ours was not working properly and the breakdown should have been apparent to you when you attempted to conduct the transaction;

d) You have not given us complete, correct or current account numbers or other identifying information so that we may properly credit or debit your account or otherwise complete the transaction;

e) You do not properly follow our instructions or if you provide us with wrong or inaccurate information or fail to correct or tell us about any inaccuracy of which you are aware;

f) You do not initiate your payment or transfer in time to be received and credited by it’s due date;

g) The money in the account from which a payment or transfer is to be made is subject to legal process or other claim which restricts the transaction;

h) We process your payment in a timely manner, but the payee rejects your payment or fails to process it in a timely manner;

i) Circumstances beyond our control prevent, delay, intercept or alter the transaction, despite reasonable precautions that we have taken.

There may be other exceptions stated in our agreements with you.

If any of the circumstances listed in a) through i) above shall occur, we shall assist you with reasonable efforts in taking appropriate corrective action to reprocess the transactions that may not have been completed or to correct incorrect transactions that have been processed.

7. Business Days and Hours of Accessibility

The Harrington Online Banking Service is generally available 24 hours a day, 7 days a week. However, we only process transactions, payments, and update information on business days, which are everyday except Saturday, Sunday, and federal banking holidays. There may be periods that the service is not available due to routine maintenance or other reasons. Where possible, we will provide advance notice of these system downtimes. You may not be able to access Harrington Online Banking during these downtimes.

There are two payment processing times each business day: 3:00 a.m. EST and 1:00 p.m. EST. A payment initiated through Harrington Online Banking Bill Pay by 12:45 p.m. EST on a business day will be posted to your account the same day. All payments entered after 12:45 p.m. EST on a business day or any time on a Saturday, Sunday, or holiday may not be posted until the next business day at the 3:00 a.m. processing time.

A transfer initiated through Harrington Online Banking by 6:30 p.m. EST on a business day will be posted to your account the same day. All transfers initiated after 6:30 p.m. EST on a business day or any time on a Saturday, Sunday or holiday may not be posted until the next business day.

Harrington Online Banking support hours are 9:00 a.m. to 5:00 p.m. EST each business day.

8. Statements

Your Harrington Online Banking payments and transfers will be indicated on the monthly or quarterly statements we provide or make accessible to you. You agree to notify us promptly if you change your address or if you believe there are any errors or unauthorized transactions on any statement, or statement information. Your statements may contain further information or disclaimers.

9. Your Liability

Each of you agrees to the terms of this Service. You are liable for all transactions that you or any of you make or authorize, even if the person you authorize exceeds your authority. You agree not to disclose or share your Harrington Online Banking ID and PIN or other means of access with others. If you have given someone your Harrington Online Banking ID and PIN or other means of access and want to terminate that person's authority, you must change your Harrington Online Banking ID and PIN or other means of access or take additional steps to prevent further access by such person.

10. Unauthorized Transactions Or Loss Or Theft Of Your Harrington Online Banking ID Or PIN

If you believe your Harrington Online Banking ID or PIN or other means of access have been lost or stolen or that someone has used them without your authorization, contact us immediately by one of the following methods:

1. Telephone Harrington Bank during normal business hours at (919) 945-7800;
2. Email us at customerservice@bankatharrington.com; or
3. Visit, or write to, us at 5925 Farrington Road, Chapel Hill, North Carolina 27517.

Quickly telephoning us is the best way of reducing your possible losses. Not all emails may arrive at their destinations. If you do email us, we will reply to you via return email to confirm that we did receive it. Because the Internet is not secure from being read by just anyone, do not include any of your Account or Social Security numbers with your email. Your name, address, a phone number where you can be reached, and a brief message as to what the problem might be is all we will need to initially assist you.

If you think that your statement or receipt is wrong or if you need more information about a transfer listed on the statement or receipt, the Bank must hear from you no later than 60 days after the Bank sent the FIRST statement on which the problem or error appeared.

• Tell the Bank your name and account number (if any).
• Describe the error, the transfer or payment you are unsure about, and explain as clearly as you can why you believe it is an error or why you need more information.
• Tell the Bank the dollar amount of the suspected error.

If you tell the Bank orally, the Bank will require that you send the Bank your complaint or question in writing within 10 business days. The Bank will tell you the results of its investigation within 10 business days after it hears from you and will correct any error promptly. If the Bank needs more time, however, it may take up to 45 days to investigate your complaint or question.

If the Bank decides to investigate your complaint, it will re-credit your account within 10 business days for the amount you think is in error, so that you will have use of the money during the time that it takes the Bank to complete its investigation. If the Bank asks you to put your complaint or question in writing and does not receive it within 10 business days the Bank may not re-credit your account. If the Bank decides that there was no error, it will send you a written explanation within 5 business days after it finishes its investigation. You may ask for copies of the documents that the Bank used in its investigation.

Customers who are consumers using an account for personal, family or household purposes have some protection from loss caused by unauthorized access. An "unauthorized electronic funds transfer" means an electronic funds transfer from a consumer’s account initiated by a person other than the consumer without actual authority to initiate the transfer and from which the consumer receives no benefit. The term does not include an electronic funds transfer initiated by a person who was furnished with the access device to the consumer’s account by the consumer, unless the consumer has notified the Bank that transfers by that person are no longer authorized or the transfer was initiated with fraudulent intent by the consumer or any person acting in concert with the consumer. If your Harrington Online Banking PIN has been compromised and you tell us within 2 business days after you learn of the loss or theft, you can lose no more than $50.00 if someone used your Harrington Online Banking PIN without your permission to access a Bank deposit account. If you do NOT tell us within 2 business days after you learn of the loss or theft and we could have stopped someone from taking money without your permission had you told us, you could lose as much as $500.00.

If your statement shows withdrawals, transfers or purchases that you did not make or authorize, please notify us at once. If you do not notify us within 60 days after the paper or online statement was sent to you, and we could have stopped someone from taking money if you had told us in a timely manner, you may not get back any money lost after the 60 days. If extenuating circumstances, such as long trip or hospital stay, kept you from telling us, the time periods in this section will be extended.

11. Business and Other Non-Personal Accounts

The Bank's obligations set forth in Sections 6 and 10, and the limitations on your liability set forth in Section 9, do not apply in the case of business or other non-personal accounts. Under no circumstances will we be liable for any special or consequential damages involving such accounts. The owners of non-personal accounts must notify us immediately if they discover any unauthorized transactions or errors, and must send us a written notice of the problem within a reasonable time (not to exceed 14 days from the date of discovery or their receipt of the first statement or notice reflecting the problem, whichever occurs first). We may process any on-line instruction we believe is given by any of you if the instruction is accompanied by your Harrington Online Banking ID and PIN, and you will be obligated for the transfer or payment, even if the instruction is not transmitted or authorized by you.

12. Electronic Communications and Access

You are responsible for the selection, installation, maintenance, and operation of your computer and software. We assume no responsibility for any error or malfunction by your computer or software, or for any computer virus or similar problems you may experience with the internet or your internet service provider. You must use equipment and software that are compatible with our system, which may change from time to time. Note: Some browser software may store user names and security codes to facilitate the future use of a web site. For security reasons, you agree to disable this feature in your browser. Check your browser's Help screen for more information on this feature.

You agree that this Agreement and any notice or other type of communication that is provided to you in connection with the Service, including amendments, statements, and account information, may be sent to you electronically by posting the communication at our web site or by sending it to you by email. You may obtain a free copy of this Agreement, any amendments to it, and other communications about the Service in paper form by calling us at (919) 945-7800 or writing to 5925 Farrington Road, Chapel Hill, NC 27517. You may withdraw your consent to such electronic communications by writing to us at the same address, and advising us that you wish to have future notices sent to you in paper form. We may elect to terminate this Agreement and the Service if you choose to receive notices in paper form.

You agree to provide us with your current email address for notices. If your email address changes, you must send us a notice of the new address by writing to us or by updating your email yourself in the appropriate location within Harrington Online Banking. You will need the following or equivalent hardware and software in order to access our web site, to receive notices from us, and to retain an electronic record of this Agreement and future notices:

• Windows 95/98/ME/NT or Macintosh System 7.5.5 or higher
• 32 MB RAM (recommended)
• 800 X 600 or higher video resolution (recommended)
• Internet Access (28.8/56 kbps modem, cable modem, DSL, etc.)
• A browser that supports 128-bit encryption (e.g. Netscape Communicator 4.7+, Netscape Navigator 6.1+, Microsoft Internet Explorer 5.5+)

We do not provide ISP services; you must have your own internet service provider.

13. Fees and Service Charges

The Bank reserves the right to impose fees and/or other service charges for access to or use of the Harrington Online Banking and the Bill Pay Service. We will promptly notify you of any new fees or change in the fees for these services. These charges will be automatically deducted from the checking account you designate for this purpose and the charges will appear on your statements. If you close that account, you will need to designate a new account for such payments. Please see your service charge schedule for information on other fees that may apply to your account, such as non-sufficient funds or stop payment fees. We are not responsible for any fees that may be billed to you by your internet service provider.

14. Termination

To cancel the Harrington Online Banking and/or Bill Payment Service, you must notify the Bank and provide your name; address; whether you are discontinuing Harrington Online Banking or the Bill Payment Service (if you are discontinuing Harrington Online Banking, the Bill Payment Service is automatically discontinued); and the effective date to stop the service. When Bill Payment Service is terminated, any bill payments scheduled to be made through the Bill Payment Service will also be terminated. Your final charge for the Bill Payment Service will be assessed at the end of your statement cycle. You may notify us by one of the following methods:

1. Telephone Harrington Bank during normal business hours at (919) 945-7800;
2. Email us at customerservice@bankatharrington.com;
3. Come in and speak to a Bank representative; or
4. Write to us at 5925 Farrington Road, Chapel Hill, North Carolina 27517.

The Bank reserves the right to terminate this Agreement and your access to this Service (including the Bill Payment service) in whole or in part at any time if you do not pay any fee required by this Agreement when due, or if you do not comply with the Agreement governing your deposits or loan accounts, or if your accounts are not maintained in good standing. We will promptly notify you if we terminate this Agreement or your use of this Service for any other reason.

15. Provisions

We may introduce new services or enhance existing services from time to time. Unless we state otherwise, any new or enhanced services will be subject to the terms of this Agreement. By using new or enhanced services when they become available, you agree to be bound by the terms and conditions relating to the services.

We may amend (add to, delete from, or change) the terms of this Agreement at any time by sending a notice to any of you at the address or email address shown in our records, by posting the notice or an amended agreement on our web site, or delivering it to you. You may choose not to accept the change by closing your account(s) or terminating this agreement and your use of the Service.

You agree to take precautions to protect your Harrington Online Banking ID and PIN. In addition, you should take precautions to protect your personal identification, such as your driver’s license numbers and your social security numbers, to help prevent unauthorized access to your account.

This Agreement is governed by the laws of the State of North Carolina and applicable federal law.

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