Controlled Disbursement

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Part I. Disbursement Authorization Framework

I.1 Definitions

• "Authorization" means the instruction issued by You to the Partner Bank to release Funds from the Controlled Hold to a Provider upon verification of Milestone completion.
• "Funds" means the monetary amounts allocated by You in Your Partner Bank account for Project execution, which remain Your legal property at all times until Disbursement to Providers.
• "Partner Bank" means a licensed banking institution in Ghana or another jurisdiction with which Nnarksup has a Disbursement Control Agreement in place to facilitate the Controlled Hold and release mechanism.
• "Milestone" means a distinct, measurable, and verifiable phase or deliverable within a Project, against which payment to a Provider is conditional.
• "Controlled Hold" means the temporary restriction placed by the Partner Bank on Funds within Your bank account, preventing withdrawal or transfer except through the Disbursement Authorization Framework.
• "Disbursement" means the release of Funds by the Partner Bank to a Provider following Authorization.
• "Project" means the construction, business setup, service provision, or other undertaking defined by You and structured into Milestones for execution by Providers.
• "Services" means the project governance, structuring, verification, coordination, and disbursement authorization services provided by Nnarksup as described in Article 3.
• "Verification" means the process of confirming Milestone completion through AI-assisted analysis, field officer inspection, Documentation review, or other methods specified in the Project Agreement.
• "Verification Officer" means an individual engaged by Nnarksup to conduct physical inspections, quality assessments, and Documentation gathering for Projects.
• "Provider" means a contractor, service provider, supplier, or other party engaged to execute work under a Project, who has entered into a Provider Agreement with Nnarksup.

I.2 Roles & Responsibilities

• Client Role: Fund allocation, and approval or rejection of each Milestone
• Partner Bank Role: Custody, hold placement, payment execution
• Nnarksup Role: Verification, Authorization issuance on an approved Milestone, audit trail
• Provider Role: Work execution, Documentation submission

I.3 to I.6 Controlled Hold, Authorization, Issuance and Bank Execution [NOT YET IN FORCE]

These sections are under finalization pending execution of the Disbursement Control Agreement with Nnarksup's Partner Bank. They bind neither Party until that agreement is executed and this document is updated to say so.

Expected implementation date: Q4 2026

Placeholder terms (pending Bank agreement)

The executed sections will cover the following. These are the topics to be settled, not operative terms, and nothing below may be relied on as a rule today:

• Calculation of hold amounts
• Hold placement, and modification on a change order
• Conditions for partial and full release of the hold
• Trigger events and the evidence required before an Authorization may be issued
• Issuance of a signed, encrypted Authorization to the Partner Bank, and what it must contain
• Execution of payment by the Partner Bank, payment routing, transaction confirmation, and the Bank's liability limitations
• Technical integration with Partner Bank systems

Interim provisions

Until these sections are finalized, the following are in force and govern the matters above:

• Milestone approval: Section 4.5 of the User Agreement. Approval is manual. There is no automatic, timed or deemed approval, and silence releases nothing
• Fund allocation and fees: Section 4.4 and Article 6 of the User Agreement
• Rejection and disputes: the Dispute Resolution Policy
• Fund ownership and custody: Sections II.1 to II.7 of this document, which are in force
• Liability and indemnities: Part III of this document, which is in force

Sections II.8 and II.9 describe the Controlled Hold itself, so they are pending on the same agreement and on the same terms as Sections I.3 to I.6.

For current information on disbursement procedures, contact support@nnarksup.com.

I.7 Rejection & Dispute Handling

If You reject a Milestone, You must give specific reasons, the Provider is given an opportunity to correct the work, and nothing is released until the matter is resolved. The process that applies, including escalation, mediation, arbitration and enforcement of the outcome, is set out in full in the Dispute Resolution Policy.

I.8 Audit Trail & Compliance

Every Authorization, approval, rejection and Disbursement is written to an append-only log that records who acted, what they acted on and when. The log cannot be edited or erased by anyone, including Nnarksup, and it is the record relied on in a dispute.

Nnarksup reports to regulators and tax authorities as Applicable Law requires, including anti-money-laundering and counter-terrorist-financing reporting. Records are kept for at least 7 years, as Section 8.5 of the User Agreement sets out.

I.9 System Failure Protocols

If the Platform, a payment provider or, once Sections I.3 to I.6 are in force, the Partner Bank is unavailable at the moment a payment was due to be issued or executed, the payment fails. It is not queued and it is not issued on a best guess while a system is down. The failure is recorded in the audit trail, the Parties are notified, and the payment must be started again once the systems are available.

A Force Majeure Event affecting the Platform or a party executing payment suspends Authorization and Disbursement obligations for its duration, as set out in Article 10 of the User Agreement.

I.10 Liability Allocation

Once Sections I.3 to I.6 are in force, liability for the Disbursement Authorization Framework is allocated as follows, subject to the limits and exclusions in Part III:

• The Partner Bank is liable for unauthorized payments and for errors in executing a valid Authorization
• Nnarksup is liable for issuing an Authorization it should not have issued, and only where it did so through gross negligence
• The Client is liable for rejecting a Milestone unreasonably
• The Provider is liable for Documentation it knows to be false

Until those sections are in force, liability is allocated by Part III alone.

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Part II. Controlled Disbursement Structure & Non-custodial Agreement

II.1 Fundamental Principle

• NON-CUSTODIAL STRUCTURE: Nnarksup does NOT hold, custody, or control Funds
• All Funds remain in Client's bank account or Partner Bank's custody
• Nnarksup = technology layer providing governance, NOT financial custody

II.2 Legal Characterization

• Nnarksup is NOT an escrow agent under traditional escrow law
• Nnarksup is a project governance platform
• Partner Bank acts as quasi-escrow holder (under banking relationship with Client)
• Controlled Hold = contractual arrangement, not statutory escrow

II.3 Fund Ownership

• Client retains legal and beneficial ownership at all times
• Funds never transferred to Nnarksup
• Controlled Hold = restriction on Client's portion of project funds in own account (Client still owns)
• Upon Disbursement, ownership transfers directly from Client to Provider

II.4 Partner Bank's Custodial Role

• Bank holds Funds as Client's bank (not as escrow agent for Nnarksup)
• Bank's obligations governed by banking agreement with Client
• Nnarksup has NO access to Client's funds
• Nnarksup only issues instructions; Bank executes or declines

II.5 Risk Allocation - Fund Loss

If funds lost due to:

• Bank insolvency → Client bears risk (deposit insurance applies per banking law)
• Nnarksup wrongful Authorization → Nnarksup liable (limited to actual loss caused)
• Provider fraud → Provider liable; Nnarksup NOT liable (except gross negligence in verification)
• Cyber-attack on Bank → Bank liable (per banking regulations)
• Cyber-attack on Nnarksup Platform (no fund access) → Nnarksup NOT liable for Client's funds

II.6 Nnarksup's Limitations

Nnarksup does NOT:

• Guarantee fund safety (Bank's role)
• Insure funds (Client should ensure Bank is insured)
• Accept fiduciary duty over funds
• Act as trustee or escrow agent
• Nnarksup DOES:
  • Provide technology infrastructure for control
  • Verify Milestone completion
  • Issue Authorizations for Milestones You have approved
  • Maintain audit trail

II.7 Regulatory Compliance

• Structure designed to avoid classification as deposit-taking institution
• Complies with Bank of Ghana fintech guidelines
• Nnarksup does NOT require banking/escrow license under this model
• Future Model Evolution path (deeper bank integration)

II.8 Client Acknowledgments

Client acknowledges and accepts:

• Funds held by Bank, not Nnarksup
• Banking relationship governed by separate agreement
• Nnarksup not liable for Bank's acts/omissions
• Controlled Hold is Client's voluntary election
• Risk of Bank failure (mitigated by deposit insurance)

II.9 Termination of Hold

Hold released upon:

• All Milestones completed and paid
• Project cancellation (by mutual agreement)
• Client revocation (if Project not commenced)
• Unused funds return to Client's unrestricted account

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Part III. Liability, Indemnification & Risk Allocation Framework

III.1 Nnarksup's Liability Limitations

III.1.1 Maximum Liability Cap

• Total liability to Client: Lesser of (a) Fees paid by Client in 12 months, OR (b) GH₵50,000
• Total liability to Provider: Lesser of (a) Commission withheld, OR (b) GH₵25,000

III.1.2 Excluded Damages

• NO liability for indirect, consequential, punitive, or special damages
• NO liability for loss of profits, revenue, data, or business opportunities

III.1.3 Causes for Which Nnarksup is NOT Liable

• Provider performance, fraud, or negligence
• Client's unreasonable rejection of verified Milestones
• Partner Bank errors, delays, or insolvency
• Force Majeure events
• Third-party service failures (internet, power, etc.)
• Verification limitations (cannot detect all defects)
• User error or misuse of Platform

III.1.4 Gross Negligence Exception

• Liability limitations do NOT apply if loss caused by Nnarksup's gross negligence or willful misconduct
• "Gross negligence" = extreme departure from standard of care (not mere negligence)

III.2 Client Indemnification Obligations

III.2.1 Client Indemnifies Nnarksup For

• Breach of User Agreement
• Violation of Applicable Law
• Claims by Providers arising from Client's breach of Project Agreement
• Infringement of third-party IP rights by Client's designs/plans
• Tax liability arising from Client's non-compliance

III.2.2 Indemnification Process

• Nnarksup notifies Client of claim
• Client assumes defense (or Nnarksup defends at Client's expense)
• Client pays settlements, judgments, and Nnarksup's legal costs

III.3 Provider Indemnification Obligations

III.3.1 Provider Indemnifies Nnarksup For

• Work quality defects or non-compliance
• Injury/property damage caused by Provider
• Claims by Clients arising from Provider's breach
• Fraudulent Documentation
• Violation of safety or building codes
• IP infringement by Provider's methods/designs
• Environmental damage

III.4 Risk Allocation Matrix

III.5 Insurance Requirements

III.5.1 Nnarksup's Insurance

Nnarksup does not currently hold professional indemnity or supervision insurance. This section will state the cover and its limits once it is in place.

III.5.2 Provider's Insurance

• Per Provider Agreement Article 9.3

III.5.3 Client's Insurance (Recommended, Not Required)

• Property insurance for Projects
• Builder's risk insurance (for construction Projects)

III.6 Disclaimer of Warranties

Nnarksup provides Services "AS IS" without warranties:

• NO warranty of uninterrupted service
• NO warranty of error-free verification
• NO warranty of Project completion
• NO warranty of Provider suitability
• NO warranty of fitness for particular purpose
• Exception: Nnarksup warrants it will perform Services with reasonable skill and care (professional standard).

III.7 Third-Party Claims

III.7.1 Claims by Providers Against Clients

• Nnarksup NOT a party; disputes between Provider and Client
• Nnarksup may provide evidence (Verification reports)

III.7.2 Claims by Third Parties (Neighbors, Subcontractors, etc.)

• Directed at Provider (work site issues)
• Provider indemnifies Nnarksup and Client

III.8 Dispute Resolution Costs

III.8.1 Costs in Client-Provider Disputes

• Levels 1 to 3 of the Dispute Resolution Framework carry no Nnarksup fee (Clause 3.4.3 of that Framework)
• Mediation costs as Clause 3.8 of that Framework provides
• Arbitration costs split per arbitrator's award
• Each party bears own legal fees (unless arbitrator awards fees to prevailing party)

III.8.2 Costs in Client/Provider vs. Nnarksup Disputes

• Costs are allocated as Clause 3.21 of the Dispute Resolution Framework provides

III.9 Survival of Obligations

Indemnification and liability provisions survive:

• Agreement termination
• Project completion
• Account closure
• Survival Duration: 7 years from date of event giving rise to liability (aligns with statute of limitations).