This Agreement describes your rights and obligations as a user of westsoundbank.com, our internet banking service ("Services"). It also describes the rights and obligations of Westsound Bank. Please read this Agreement carefully. By pressing the “I Accept” button below, you agree to comply with the terms and conditions of this Agreement.

Note: You must scroll down and click the “I Accept” button at the bottom of this agreement to continue.

DEFINITIONS
The following definitions apply in this Agreement. Internet Banking is the Internet-based service providing access to your account(s); Internet Account means any Westsound Bank account from which you will be conducting transactions using the Service; Password is the code sent to you by Westsound Bank for use during the initial sign-on, or the codes you select after the initial sign-on, that establishes your connection to the Service; Time of day references are to Pacific Standard Time; and We, Us or Westsound Bank refers to Westsound Bank, which offers the Services, and which holds the accounts accessed by the Services.

ACCESS TO SERVICES
Westsound Bank will provide on-line instructions describing how to use the Internet Banking Service. You will gain access to your Internet Accounts through the use of your Internet-enabled device, your Internet Service Provider, your User Code, and your Password.

HOURS OF OPERATION
The Services are available 24 hours a day, seven days a week, except during special maintenance periods. We will attempt to limit downtime to those hours of operation least impacted by customer usage, when such options are available. For purposes of transactions, Westsound Bank's business days are Monday through Friday, excluding holidays. All Internet Banking transaction requests received after 5:00 p.m. on business days, and all transactions, which are requested on Saturdays, Sundays, or holidays on which Westsound Bank chooses to remain closed, will be processed on the next Westsound Bank business day.

USE OF YOUR SECURITY PASSWORD
You will be required to change your password to a new unique password, only known by you, on the first time you access the Internet Banking Service. The new password must be a minimum of 8 characters, maximum of 16 characters, with at least one upper case and one lower case character. The password is also case sensitive, so if you change your password using lower case, you must always use the lower case characters. You may change your password at anytime, however, you will be required to change it every six months. You agree not to allow anyone to gain access to the Services or to let anyone know your Password used with the Services. You agree to assume responsibility for all transactions up to the limits allowed by applicable law.

IF YOUR PASSWORD HAS BEEN LOST OR STOLEN
Tell us AT ONCE if you believe your Password has been lost or stolen, or if another person has discovered the Password. Telephoning is the best way of minimizing your potential losses (you could lose all funds in your account). For personal accounts only, if you inform us within two business days that someone is using your password without your permission, your losses will be limited to no more that $50. If you do NOT tell us within two business days after you learn of the loss or theft of your password, and we can prove that we could have stopped someone from using the password to make transfers without your permission had you told us, you could lose as much as $500. Also, if your statement shows transactions that you did not make, tell us at once. If you do not tell us within 60 days after the statement was mailed 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 said funds if you informed us in time. If you were prevented from informing us for good reason (such as a long trip or a hospital stay), we will consider extending the time period.

When you give someone your Westsound Bank ATM or/and Internet Banking Password, you are authorizing that person to use the service, and you are responsible for all transactions the person performs using the service. All transactions that person performs, even those transactions you did not intend or want performed, are authorized transactions. If you notify us that the person is no longer authorized, then transactions that person performs after the time you notify us are considered unauthorized. (Transactions that you or someone acting with you initiates with fraudulent intent are also authorized transactions). For your protection, log off after every Online Banking session and close your browser to ensure confidentiality.

BANKING TRANSACTIONS WITH INTERNET BANKING
In addition to viewing account information, you may use Internet Banking to conduct the following transactions:

• Transfer funds among your linked checking accounts, savings accounts, and money market accounts from accounts with the same signers and same vesting only. If Westsound Bank becomes aware of account transfers with different signers or vesting, we will restrict the transaction and remove the account from on-line viewing.
  
  Because regulations require Westsound Bank to limit pre-authorized transfers (including Internet Banking transfers), the following limitations apply:
  
  Savings Account - Transfers from a Westsound Savings account to another account or to third parties by pre-authorized, automatic, or telephone transfer are limited to three per month.
  
  Money Market Account - Transfers from a Money Market account to another account or to third parties by pre-authorized, automatic, or telephone transfer are limited to six per month with no more than three by check, draft, debit card, or similar order to third parties.
  
• Download transactions to Quicken or Money software program.

New services may be introduced for Internet Banking from time to time. Westsound Bank will notify you of the existence of these new services. By using these services when they become available, you agree to be bound by the rules that will be made available to you concerning these services.

STATEMENTS
You will continue to receive your regular account statement either monthly or quarterly, depending on the type of account. If your statement shows transfers that you did not make, notify Westsound Bank immediately by calling us toll-free at 1(866) MYBANK 2 or locally at (360) 405-1150, 9:00 a.m. to 5:00 p.m.

If you do not notify Westsound Bank within sixty (60) days after the statement was mailed to you, you may not recover any money lost after the sixty (60) days which would not have been lost if Westsound Bank had been notified in time. If a good reason (such as a long trip or hospital stay) delayed you from contacting Westsound Bank, Westsound Bank will consider extending these time periods.

ERRORS AND QUESTIONS
In case of errors or questions regarding an Internet Banking or Bill Payment transaction, call Westsound Bank at 360-405-1200, or write us at:

Westsound Bank
Attention: Internet Customer Service
P.O. Box 405
Bremerton, WA 98337

We must hear from you at the specified telephone number or address no later than sixty (60) days after we sent you the first statement on which the problem or error appeared. We will need:

• Your name and account number.
• A description of the error or the transfer in question, and an explanation concerning why you believe it is an error or need more information.
• The dollar amount of the suspected error.
• The date on which it occurred.

If the report is made orally, we may require that you send the complaint or question in writing within ten (10) business days. We will notify you with the results of the investigation within ten (10) business days and will correct any error promptly. If more time is needed, however, we may take up to forty-five (45) days to investigate a complaint or question. If this occurs, we will credit your account within ten (10) business days for the amount you think is in error. This will allow you to use the money during the time it takes us to complete our investigation. If your complaint or question is not received in writing within ten (10) business days, we may not credit your account until the investigation is completed.

If an alleged error involves an electronic fund transfer outside a state or territory or possession of the United States, the applicable time periods for action by us are twenty (20) business days (instead of ten) and ninety (90) calendar days (instead of forty-five).

If we determine that no error occurred, we will send you a written explanation within three business days after the investigation is complete. You may request copies of the documents that were used in the investigation.

You agree that Westsound Bank may respond to you by electronic mail with regard to any claim of unauthorized electronic fund transfer related to the Service. Any such electronic mail sent to you by Westsound Bank shall be considered received within three (3) days of the date sent by Westsound Bank, regardless of whether or not you sign on to the Service within that time frame.

PROVISIONS APPLICABLE TO BUSINESSES
You agree that we may send notices and other communications including Password confirmations, to the current address shown in our records, whether or not that address includes a designation for delivery to the attention of any particular individual. You further agree that Westsound Bank will not be responsible or liable to you in any way if information is intercepted by an unauthorized person, either in transit or at your place of business. You agree to:

• Keep your Password secure and strictly confidential, providing it only to authorized signers on your account(s).
• Instruct each person to whom you give your Password that he or she is not to disclose it to any unauthorized person.
• Immediately notify us and select a new Password if you believe an unauthorized person may have your Password.

THE BANK WILL HAVE NO LIABILITY TO YOU FOR ANY UNAUTHORIZED PAYMENT OR TRANSFER MADE USING YOUR PASSWORD THAT OCCURS BEFORE YOU HAVE NOTIFIED US OF POSSIBLE UNAUTHORIZED USE AND WE HAVE HAD A REASONABLE OPPORTUNITY TO ACT ON THAT NOTICE. We may suspend or cancel your Password even without receiving such notice from you, if we suspect your Password is being used in an unauthorized or fraudulent manner.

By using the Internet Banking service, you acknowledge and agree that this Agreement sets forth security procedures for electronic banking transactions, which are commercially reasonable. You agree to be bound by instructions, whether authorized or unauthorized, which we implement in compliance with these procedures, unless you have given us prior notice of possible unauthorized use as described above (and we had a reasonable opportunity to act on such notice).

If we fail or delay in making a payment or transfer pursuant to your instructions, or if we make a payment or transfer in an erroneous amount which is less than the amount per your instructions, unless otherwise required by law, our liability shall be limited to interest on the amount which we failed to timely pay or transfer, calculated from the date on which the payment or transfer was to be made until the date it was actually made or you canceled the instructions. We may pay such interest either to you or the intended recipient of the payment or transfer, but in no event will we be liable to both parties, and our payment to either party will fully discharge any obligation to the other. If we make a payment or transfer in an erroneous amount which exceeds the amount per your instructions, or if we permit an unauthorized payment or transfer after we have had a reasonable time to act on a notice from you of possible unauthorized use as described above, unless otherwise required by law, our liability will be limited to a refund of the amount erroneously paid or transferred, plus interest thereon from the date of the payment or transfer to the date of the refund, but in no event to exceed 60 days' interest. If we become liable to you for interest compensation under this Agreement or applicable law, such interest shall be calculated based on the average federal funds rate at the Federal Reserve Bank in the district where the Bank is headquartered for each day interest is due, computed on the basis of a 360-day year. UNLESS OTHERWISE REQUIRED BY LAW, IN NO EVENT WILL THE BANK BE LIABLE TO YOU FOR SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES INCLUDING, WITHOUT LIMITATION, LOST PROFITS OR ATTORNEYS' FEES, EVEN IF WE ARE ADVISED IN ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES.

OFFICE OF FOREIGN ASSET CONTROL
Under the Bank Secrecy Act, the Bank is prohibited from transacting business with persons or entities listed as “blocked” by the Office of Foreign Assets Control (OFAC). The official listing is published in the Federal Register and updated from time to time. You agree not to transact business with persons or entities blocked by OFAC.

LIMIT OF WESTSOUND BANK AND OTHER PROVIDER'S RESPONSIBILITY
Westsound Bank agrees to make reasonable efforts to ensure full performance of Internet Banking. Westsound Bank will be responsible for acting only on those instructions sent through Internet Banking, which are actually received, and cannot assume responsibility for malfunctions in communication facilities not under our control, which may affect the accuracy or timeliness of messages you send. Westsound Bank is not responsible for any losses incurred should you give incorrect instructions, or if your payment instructions are not given sufficiently in advance to allow for timely payment or delays in mail service.

Any information you receive from Westsound Bank or Other Information Providers is believed to be reliable. However, it can only be provided on a best-efforts basis for your convenience and is not guaranteed. Westsound Bank is not liable for any deficiencies in the accuracy, completeness, availability, or timeliness of such information, or for any investment or other decision made using this information.

Neither Westsound Bank nor Other Information Providers are responsible for any computer virus or related problems, which may be attributable to services provide by any Access Service Provider.

You are responsible for obtaining, installing, maintaining, and operating all computer hardware and software necessary for performing Internet Banking. Westsound Bank will not be responsible for any errors or failures from the malfunction or failure of your hardware or software.

Except as otherwise provided in the Westsound Bank's Responsibility section below, and in the absence of negligence on the part of Westsound Bank, neither Westsound Bank, any Other Information Provider, nor any Other Software Supplier is responsible for any direct, indirect, special, incidental, or consequential damages arising in any way out of the use of Internet Banking.

WESTSOUND BANK'S RESPONSIBILITY
Westsound Bank will be responsible for your actual losses if they were directly caused by our failure to:

• Complete an Electronic Funds Transfer as properly requested.
• Cancel an Electronic Funds Transfer as properly requested.

However, we will not be responsible for your losses if:

• Through no fault of Westsound Bank, you do not have enough money in your account to make the transfer.
• Through no fault of Westsound Bank, the transaction would have caused you to exceed your available credit.
• Circumstances beyond our control (e.g., fire, flood, power outage, equipment or technical failure or breakdown) prevent the transfer, despite reasonable precautions that we have taken.
• There is a hold on your account, or if access to your account is blocked in accordance with banking policy.
• Your funds are subject to legal process or other encumbrance restricting the transfer.
• Your transfer authorization terminates by operation of law.
• You believe someone has accessed your accounts without your permission and you fail to notify us immediately.
• You have not properly followed the scheduling instructions on how to make a transfer included in this Agreement.
• We have received incomplete or inaccurate information from you or a third party involving the account or transfer.
• We have a reasonable basis for believing that unauthorized use of your Password or account has occurred or may be occurring, or if you default under this Agreement, the Deposit Account Agreement, a credit agreement, or any other agreement with us, or if we or you terminate this Agreement.

There may be other exceptions stated in this agreement and in other agreements with you. In no event shall we be liable for damages in excess of your actual loss due to our failure to complete a transfer, and we will not be liable for any incidental or consequential damages.

If any of the circumstances listed 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.

ELECTRONIC MAIL
If you send Westsound Bank an electronic mail message, Westsound Bank will be deemed to have received it on the following business day. Westsound Bank will have a reasonable time to act on your e-mail.

You should not rely on electronic mail if you need to communicate with Westsound Bank immediately. Transactions such as notification of an unauthorized transaction from one of your accounts, or if you need to place a stop payment must not be sent through e-mail.

You agree that Westsound Bank may respond to you by electronic mail with regard to any matter related to the Service, including responding to any claim of unauthorized electronic funds transfer that you make. Any such electronic mail sent to you by Westsound Bank shall be considered received within three (3) days of the date sent by Westsound Bank, regardless of whether or not you sign on to the Service within that time frame.

PRIVACY POLICY
From the time it was founded, Westsound Bank has always valued its customers’ privacy highly. We have protected your confidential information in many ways and will continue to do so using state-of-the-art measures. We never lose sight of the fact that our customers’ trust is our most treasured asset. You can rest easy knowing that our corporate focus is the protection of your privacy in your dealings with us. When the new law took effect, we did not have to make any changes to our policy or practices to be fully in compliance. If you ever have any questions about the confidentiality of your information in our hands, please call Veronica R. Colburn, CFO at (360) 405-1200. Every day, we appreciate your business. Thank you for banking with us!

We collect nonpublic personal information* about you and our former customers from the following sources:

• Information we receive from you on applications or other forms.
• Information that we receive from processing your accounts with us and the transactions in those ac-counts, such as deposit accounts and loans, as well as information that we receive from providing services to you, such as funds transfer services.
• Information we receive from a Consumer Reporting agency (commonly known as a credit bureau).
• Information that we receive in response to requests we make to third parties about you or to confirm information that you have provided to us, particularly in the process of evaluating applications for loans.

We may disclose the following kinds of nonpublic personal information* about you and our former customers:

• We may disclose information that we receive from you on an application such as your assets, liabilities, income and employment history [for example, in order to determine whether a loan that you have applied for is saleable in the secondary market (when we are unable to grant the request)].
• We may disclose information that we receive from you on an application such as deposits or loans that you have with other financial institutions, or your employment (for example, in order to verify the ac-curacy of the information that you have provided us).
• We may disclose information that we receive from you on an application such as existing loan bal-ances to be paid from our loan proceeds (for example, to persons who will be involved in the closing of the loan, such as attorneys and title companies).
• We may disclose information that we receive from processing your accounts with us, such as balance information (for example, to the operator of the interchange that processes our ATM, Debit Card, Mer-chant, Internet Banking and Credit Card transactions).
• We may disclose information as permitted by law.

CONFIDENTIALITY, SECURITY AND INTEGRITY
The bank’s automation systems have a complex set of passwords, user identifications and terminal identifications that limits each employee’s access to information in the systems to that information that he or she requires to properly carry out his or her job responsibility.

*Nonpublic personal information means information about you that we collect in connection with providing a financial product or service to you. Nonpublic personal information does not include information that is available from public sources, such as telephone directories or government records.

OTHER PRIVACY CONSIDERATIONS
Our Employees’ Access to and Use of Customer Information - Each of our employees has responsibility for maintaining the confidentiality of customer information. We require all of our employees to agree in writing to protect the confidentiality of customer information and to use it only for our business purposes. Our policy is to prohibit employees from accessing your personal information unless there is a business reason to do so. Internal access and sharing of information about you within our various service units occurs to evaluate, structure and facilitate the services you have requested or to inform you of other financial services that may be of interest to you. We train our employees to recognize the importance of customer confidentiality. Employees who violate these standards are subject to disciplinary measures.

Our Security Procedures - We also take other steps to safeguard customer information by maintaining physical, electronic, and procedural safeguards that comply with federal standards to guard your non-public personal information.

Maintaining the Accuracy of Customer Information - We have procedures to see that customer information is maintained in a commercially reasonable manner so that it is accurate, current, and complete. We also have procedures to see that requests to correct inaccurate or incomplete information are acted upon in a timely manner. We maintain security standards and procedures to help prevent unauthorized access to confidential customer information, and we regularly review, test and update our technology and procedures to improve the security and accuracy of such information. We investigate your inquiries about information received from us (or from a credit bureau reflecting information we have provided) that you believe to be inaccurate and we take steps to correct information we determine to be incorrect.

Maintaining Confidentiality in Our Business Relationships with Other Companies - From time to time we contract with other businesses to perform specific services in support of our products. When it is necessary to provide confidential customer information to a third party, we require each business that we select to agree to adhere to the same privacy standards, laws and regulations that apply to us. That is, we require such third parties to agree to safeguard non-public personal information regarding our customers in accordance with our own privacy policies.

Internet Banking Security - At Westsound Bank we take security very seriously. The latest methods in Internet system security, as upgraded from time to time, are used to increase and monitor the integrity and security of our system.

Internet security does not rely on technology alone. Without everyone's participation, all the security systems and technology in the world are worthless. You must treat your User ID and password with the utmost confidentiality. Passwords should NOT consist of obvious data about the user (i.e. children’s names, birthdays, or spouse’s name). Selecting letters that do not create a common word but instead represent the first letter of each word in a favorite phrase, poem, or song can create a memorable but difficult to crack password.

Data security between the customer browser and our Internet Banking link is handled through a security protocol called Secure Sockets Layer (SSL). SSL provides data encryption, server authentication, and message integrity for an Internet connection. In addition, SSL provides a security "handshake" that is used to initiate the connection. This handshake results in the client and server agreeing on the level of security they will use and fulfills any authentication requirements for the connection. Currently Westsound Bank’s online banking application supports data encryption at the highest level (128 bit). In order to get this level of encryption, you will need a browser that supports it. Both versions 3 and 4 of the most popular browsers support 40-bit encryption as a default, although you can upgrade your security level very easily. For those clients that are using Internet Explorer, the upgrade process is fairly simple. By simply clicking on Help and About Internet Explorer after bringing up the browser, you will notice a Cipher Strength. This will tell you the security level, and give you an opportunity to upgrade via the hyperlink to Upgrade Information. For those clients using Netscape, there is a similar process. By clicking on Help and Software Upgrades after bringing up the browser, you will be taken to a SMART Upgrades screen from which you can download the updated version of 128-bit encryption software. All other browsers will probably need to go to their software company's home page, where many times the upgrades are available for download.

Children’s Privacy - Our web site is directed to a general audience. We do not knowingly solicit or collect personal information from children on our site.

This disclosure of our privacy policy applies to consumers. We reserve the right to make changes to this policy at any time. We will notify you if we do so.

OTHER AGREEMENTS
In addition to this Agreement, you and Westsound Bank agree to be bound by and comply with the requirements of the agreements applicable to each of your Internet Accounts. Your use of the Internet Banking service is your acknowledgment that you have received these agreements and intend to be bound by them. (You should review other disclosures received by you when you open your accounts at Westsound Bank, including the charges that may be imposed for electronic funds transfers or the right to make transfers listed in the fee schedules accompanying those disclosures and the fee schedule at the end of this Agreement).

MODIFICATIONS TO THIS AGREEMENT
Westsound Bank may modify the terms and conditions applicable to either Service from time to time upon mailing or delivering a notice of the modifications to you at the address shown on our account records, and the revised terms and conditions shall be effective at the earliest date allowed by applicable law. We may send any notice to you via electronic mail and you will have been deemed to have received it three (3) days after it is sent. We reserve the right to terminate this Agreement and your use of the Services in whole or in part at any time without prior notice.

INACTIVITY / TERMINATION
You are responsible for complying with all the terms of this Agreement and with the terms of the agreement governing the deposit accounts which you access using electronic banking services. We can terminate your Internet Banking privileges under this Agreement without notice to you if you do not pay any fee required by this Agreement when due, if you do not comply with the Agreements governing your deposit or loan accounts, or your accounts are not maintained in good standing. We will promptly notify you if we terminate this Agreement or your use of the services for any other reason.

If you are not paying a monthly service charge for the Service, we may convert your account to inactive status if you do not sign on to the Service or have any transaction scheduled through the Service during any consecutive ninety (90) day period. If your account is considered inactive, you must contact us to have the Service activated before you will be able to schedule any transaction through the Service.

To cancel the Internet Banking Service, you must notify Westsound Bank and provide your name, address, and the effective date to stop the service.

You may notify Westsound Bank by one of the following methods:

• By initiating a customer inquiry through our Website.
• By calling 1(866) MYBANK 2 or locally 360-405-1200, 9:00 a.m. to 5:00 p.m.
• By writing a letter and either sending it to the following address or giving it to a Banking Officer at any location:

Westsound Bank
Attention: Internet Customer Service
P.O. Box 405
Bremerton, WA 98337

GOVERNING LAW
This Agreement is governed by the laws of the State of Washington and applicable federal laws.