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agrees not to initiate Entries that violate the laws of the United States or any Applicable Laws; (C) acknowledges Bank's right to suspend or terminate its ACH Service for breach of the NACHA Rules and as otherwise provided in the Agreement and this Addendum; and (D) acknowledges Bank's right to audit the Client's compliance with the Origination Agreement and the NACHA Rules. Customer agrees to indemnify Bank from and against any and all claims, demands, losses, liabilities, and expenses (including attorneys' fees and costs), that result directly or indirectly from the failure of that Client to perform its obligations as an OriginaWr under the NACHA Rules. V. Customer agrees that, by December 31 each year and at its own expense, Customer will conduct or have conducted an annual audit of its compliance with the NACHA Rules in accordance with Appendix Eight of the Rules. vi. Customer shall have the responsibility W (I) handle all returned Entries, Notifications of Change (VOCs), and rejected Entries; (1I) notify the Receiver of any reversing Entry; and (III) detect and correct any errors. vii. Customer represents and warrants that it will initiate ACH Entries only from accounts located in the United States. ) Fees and Other Charges. In addition W the fees and charges for use of the ACH Service, Customer also agrees to pay any fines and penalties arising ftam or related to Customer's use of the ACH Service W provide payment processing for Clients or failure W comply with this Section, including without limitation any fines or penalties imposed on Bank in connection with Customer's acts or omissions. Article 177. Positive Pay Service I. Statement of Service. This Article describes Bank's Positive Pay Services whereby Bank and Customer follow the processes and procedures described herein in order to authorize and/or confirm the payment or return of checks presented for payment against Customer's account(s). The Service systems are not designed to detect or preventfraud due W paperless entries (W include ACI, Wire, and EFT) to the account If a Positive Pay account is funded by an ACI, Wire, EFT, or any other paperless entry and there are no funds available to be deposited to the Positive Pay Aeeour#, the Bank will not be required to pay any checks presented against the accoum. Same Day Positive Pay and Next Day Positive Paw. a) In the Some Day Positive Pay Service and the Next Day Positive Pay Service, Batik will match checks that are presented for payment W a file of issued checks Customer provides to Bank and generate an exception report indicating discrepancies between the issued checks and the checks being presented for payment. As used in this Article, the following terns shall have the following meanings with respect W Same Day Positive Pay and Next Day Positive Pay: (i) Conforming heck means, as applicable, (A) with respect to Same Day Positive Pay and Next Day Positive Pay, any check presented W Bank for payment which bears an encoded check serial number and an encoded amount which match the description of an outstanding item in the Issue File, (B) with respect to the Payee Name Verification service, any check presented W Bank for payment which bears an encoded check serial number, an encoded amount, and a payee name which match the description of an outstanding item in the Issue File, and (C) whether or not Customer has elected the Payee Name Verification service, and only with respect to over-the- counter transactions through Bank's Teller Positive Pay System where Customer has elected W furnish payee names in the Issue File along with other required information, any check presented to Bank for payment which bears an encoded check serial number, an encoded amount, and a payee name which match the description of an outstanding item in the Issue File. (ii) Issue File means a list, as updated from time to time in accordance with Bank's rules and guidelines, in an electronic readable format prescribed by Bank, of Customer's duly issued checks, describing each check by its serial number and amount. If Customer has elected the Payee Name Verification service, or if Customer has not elected the Payee Name Verification service and desires verification of payee name in connection with over-the- counter transactions through Bank's Teller Positive Pay System, the Issue File must also include the payee name for each check 23 of 29 P62