|
(vii) with respect to each International ACH
<br />Transaction ("IAT") that Customer may be permitted by
<br />Bank to initiate, Customer shall (a) classify and format
<br />payments transmitted to or received from a financial agency
<br />outside the U.S. as an IAT in accordance with the NACHA
<br />Rules, (b) provide data necessary to accompany the
<br />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 />initiated/mobile ("WEB") (as defined under the NACHA
<br />Rules) ACH Entry that Customer may be permitted by Bank
<br />to initiate, (a) Customer employs (1) commercially
<br />reasonable detection systems to minimize risk of fraud
<br />related to Internet -initiated payments, (2) commercially
<br />reasonable procedures to verify validity of routing numbers,
<br />(3) commercially reasonable methods of authentication to
<br />verify the identity of the Receiver, and (4) a commercially
<br />reasonable level of encryption technology, and (b) where
<br />required by the NACHA Rules and/or Bank, Customer
<br />conducts annual audits as to its security practices and
<br />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 -Initiated
<br />("TEL") Entry that Customer may be permitted by Bank to
<br />initiate, Customer has (a) employed commercially
<br />reasonable procedures to verify the identity of the Receiver,
<br />and (b) utilized commercially reasonable procedures to
<br />verify 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 are
<br />in accordance with the source document, (b) Customer will
<br />retain a reproducible, legible image, microfilm or copy of the
<br />front of the Receiver's source document for each ARC Entry
<br />for two (2) years from the Settlement Date of the ARC Entry,
<br />(c) Customer has employed commercially reasonable
<br />procedures to securely store (1) all source documents until
<br />destruction and (2) all banking information relating to ARC
<br />Entries, (d) Customer has established reasonable procedures
<br />under which the Receiver may notify Customer that receipt
<br />of Receiver's checks does not constitute authorization for
<br />ARC Entries to the Receiver's account and that Customer
<br />will allow the Receiver to opt -out of check conversion
<br />activity, and (e) the source document to which each ARC
<br />Entry relates may not be presented or returned such that any
<br />person will be required to make payment based on the source
<br />document unless the ARC Entry is returned;
<br />(xi) with respect to each Back Office
<br />Conversion ("BOC") Entry that Customer may be permitted
<br />by Bank to initiate, (a) Customer has employed
<br />commercially reasonable procedures to verify the identity of
<br />the Receiver, (b) Customer has established and maintains a
<br />working telephone number for Receiver inquiries regarding
<br />the transaction that is answered during normal business
<br />hours and that such number is displayed on the notice
<br />required by the NACHA Rules for BOC Entries, (c) the
<br />amount of the Entry, the routing number, the account
<br />number and the check serial number are in accordance with
<br />the source document, (d) Customer will retain a
<br />reproducible, legible image, microfilm or copy of the front
<br />of the Receiver's source document for each BOC Entry for
<br />two (2) years from the Settlement Date of the BOC Entry,
<br />(e) Customer has employed commercially reasonable
<br />procedures to securely store (1) all source documents until
<br />destruction and (2) all banking information relating to BOC
<br />Entries, and (f) the source document to which each BOC
<br />Entry relates will not be presented or returned such that any
<br />person will be required to make payment based on the source
<br />document unless the BOC Entry is returned;
<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 number,
<br />and check serial number for the initiation of the POP Entry
<br />(a) is returned voided to the Receiver after use by Customer
<br />and (b) has not been provided to the Receiver for use in any
<br />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 the
<br />related Entry has been returned by the RDFI, (f) the
<br />information encoded after issue in magnetic ink 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 any
<br />loss, liability or expense (including reasonable attorneys'
<br />fees and costs) resulting from or arising out of any breach of
<br />the foregoing warranties, representations or agreements.
<br />Customer shall also indemnify and hold Bank harmless from
<br />any claim of any person that Bank is responsible for any acts
<br />or omissions of Customer regarding any Entry received from
<br />Customer, or those of any other person related thereto,
<br />including, without limitation, any Federal Reserve Bank, ACH
<br />Operator or transmission or communications facility, any
<br />Receiver or RDFI.
<br />23. Same Day ACH ("SDA"). Customer may be
<br />permitted, in Bank's sole and exclusive discretion, to initiate
<br />SDA Entries. In the event Bank approves Customer's
<br />initiation of SDA Entries, either on a one time or other
<br />periodic basis, Customer agrees as follows:
<br />23.1 Customer shall be solely responsible for
<br />transmitting its SDA Entries with the appropriate intended
<br />CAP /D 88442 0722
<br />
|