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agency outside the U.S. as an IAT in accordance with the
<br />NACHA Rules, (b) provide data necessary to accompany
<br />the transaction in compliance with the Bank Secrecy Act's
<br />"Travel Rule," (c) screen the IAT prior to transmitting any
<br />file(s) of Entries to the Bank in accordance with the
<br />requirements of OFAC and comply with OFAC sanctions,
<br />and (d) otherwise comply with and be subject to all other
<br />requirements of U.S. law, the NACHA Rules, OFAC and
<br />FinCEN, as well as the Foreign Country Rules;
<br />(viii) with respect to each Internet-
<br />mitiated/mobile ("WEB") (as defined under the NACHA
<br />Rules) ACH Entry that Customer may be permitted by
<br />Bank to initiate, (a) Customer employs (1) commercially
<br />reasonable detection systems to minimize nsk of fraud
<br />related to Intemet-initiated payments, (2) commercially
<br />reasonable procedures to venfy validity of routing
<br />numbers, (3) commercially reasonable methods of
<br />authentication to verify the identity of the Receiver, and (4)
<br />a commercially reasonable level of encryption technology,
<br />and (b) where required by the NACHA Rules and/or Bank,
<br />Customer conducts annual audits as to its security practices
<br />and procedures that include, at a minimum, verification of
<br />adequate levels of (1) physical security to protect against
<br />theft, tampering, or damage, (2) personnel and access
<br />controls to protect against unauthorized access and use and
<br />(3) network security to ensure secure capture, storage, and
<br />distribution, and will provide proof of such audits to Bank
<br />upon request;
<br />(ix) with respect to each Telephone -
<br />Initiated ("TEL") Entry that Customer may be permitted by
<br />Bank to initiate, Customer has (a) employed commercially
<br />reasonable procedures to venfy the identity of the Receiver,
<br />and (b) utilized commercially reasonable procedures to
<br />venfy that routing numbers are valid;
<br />(x) with respect to each Accounts
<br />Receivable ("ARC") Entry that Customer may be permitted
<br />by Bank to initiate, (a) the amount of the Entry, the routing
<br />number, the account number and the check serial number
<br />are in accordance with the source document, (b) Customer
<br />will retain a reproducible, legible image, microfilm or copy
<br />of the front of the Receiver's source document for each
<br />ARC Entry for two (2) years from the Settlement Date of
<br />the ARC Entry, (c) Customer has einployed commercially
<br />reasonable procedures to securely store (1) all source
<br />documents until destruction and (2) all banking information
<br />relating to ARC Entries, (d) Customer has established
<br />reasonable procedures under which the Receiver may
<br />notify Customer that receipt of Receiver's checks does not
<br />constitute authorization for ARC Entries to the Receiver's
<br />account and that Customer will allow the Receiver to opt -
<br />out of check conversion activity, and (e) the source
<br />document to which each ARC Entry relates may not be
<br />presented or returned such that any person will be required
<br />to make payment based on the source document unless the
<br />ARC Entry is returned;
<br />(xi) with respect to each Back Office
<br />Conversion ("BOC") Entry that Customer may be
<br />permitted by Bank to initiate, (a) Customer has employed
<br />conunercially reasonable procedures to verify the identity
<br />of the Receiver, (b) Customer has established and
<br />maintains a working telephone number for Receiver
<br />inquiries regarding the transaction that is answered during
<br />normal business hours and that such number is displayed
<br />on the notice required by the NACHA Rules for BOC
<br />Entries, (c) the amount of the Entry, the routing number,
<br />the account number and the check serial number are in
<br />accordance with the source document, (d) Customer will
<br />retain a reproducible, legible image, microfilm or copy of
<br />the front of the Receiver's source document for each BOC
<br />Entry for two (2) years from the Settlement Date of the
<br />BOC Entry, (e) Customer has employed commercially
<br />reasonable procedures to securely store (1) all source
<br />documents until destruction and (2) all banking information
<br />relating to BOC Entries, and (f) the source document to
<br />which each BOC Entry relates will not be presented or
<br />returned such that any person will be required to make
<br />payment based on the source document unless the BOC
<br />Entry is retumed,
<br />(xii) with respect to each Point -of -Purchase
<br />("POP") Entry that Customer may be permitted by Bank to
<br />initiate, the source document provided to Customer for use
<br />in obtaining the Receiver's routing number, account
<br />number, and check serial number for the initiation of the
<br />POP Entry (a) is returned voided to the Receiver after use
<br />by Customer and (b) has not been provided to the Receiver
<br />for use in any prior POP Entry; and
<br />(xiii) with respect to each Returned Check
<br />("RCK") Entry that Customer may be permitted by Bank to
<br />initiate, (a) all signatures on the item are authentic and
<br />authorized, (b) the item has not been altered, (c) the item is
<br />not subject to a defense or claim, (d) the Entry accurately
<br />reflects the item, (e) the item will not be presented unless
<br />the related Entry has been returned by the RDFI, (f) the
<br />information encoded after issue in magnetic inlc on the item
<br />is correct, and (g) any restrictive endorsement placed on the
<br />item is void or ineffective.
<br />Customer shall indemnify and hold Bank harmless from
<br />any loss, liability or expense (including reasonable
<br />attorneys' fees and costs) resulting from or ansmg out of
<br />any breach of the foregoing warranties, representations or
<br />agreements. Customer shall also indemnify and hold Bank
<br />harmless from any claim of any person that Bank is
<br />responsible for any acts or omissions of Customer regarding
<br />any Entry received from Customer, or those of any other
<br />person related thereto, including, without limitation, any
<br />Federal Reserve Bank, ACH Operator or transmission or
<br />communications facility, any Receiver or RDFT.
<br />23. Same Day ACH ("SDA"). Upon the effective
<br />date of the changes to the NACHA Rules enabling the same-
<br />day processing of certain ACH payments (the "SDA
<br />Rule"), Customer may be permitted, in Bank's sole and
<br />exclusive discretion, to. initiate SDA Entries. In the event
<br />Bank approves Customer's initiation of SDA Entries, either
<br />on a one time or other periodic basis, Customer agrees as
<br />follows:
<br />211 Customer shall be solely responsible
<br />for transmitting its SDA Entries with the appropriate
<br />NC 4814-6754-1549 19 0.1'58 022016
<br />P43
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