AgdaPkt 2015-08-24 Joint SA and PAF

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TM-1418 Image Positive Pay Service Description Page 2 of 5 Revised 04-30-2014 3.1. Perfect Presentment® Positive Pay. Bank electronically compares a Check to Company’s Check Issue Data prior to posting the Check to Company’s Account. Each Check with error(s) that Bank can correct, such as an encoding error, will be corrected, so that the Exceptions Report includes only unresolved Exception Items. This option is offered only on an Account enrolled in Bank’s Controlled Disbursement Service. 3.2. Positive Pay and Positive Pay Only. Bank electronically compares a Check to Company’s Check Issue Data after posting the Check to Company’s Account. Bank then reviews each Exception Item, and reverses and reposts each Exception Item with error(s) that Bank can correct, such as encoding errors, so that the Exception Report includes only unresolved Exception Items. Enrollment in Bank’s ARP Service is not required for Positive Pay Only. 3.3. Basic Positive Pay. Bank electronically compares a Check to Company’s Check Issue Data after posting the Check to Company’s Account and provides Company with an Exceptions Report containing all Exception Items including Checks with encoding errors. 4. Payee Validation. In addition to performing the electronic comparison described in section 2, Bank electronically compares the payee’s name on each Check exceeding the dollar threshold determined by Bank to the payee’s name in Company’s Check Issue Data. If there is a discrepancy between the two names that is not within parameters Bank establishes, Bank will (a) include the Check as an Exception Item in Company’s Exceptions Report (and the discrepancy will constitute an Exception), or (b) manually review the Check. Bank will not perform Payee Validation with respect to a Check if (i) Company fails to include the payee's name on the Check in Company’s Check Issue Data; (ii) Bank does not receive Company’s Check Issue Data for the Check before the cutoff time Bank separately discloses; or (iii) Company requests Bank add the payee’s name manually to Check Issue Data Company has previously provided to Bank. Bank will reimburse Company for the face amount of any Check Bank pays if the Company incurs a loss as a result of an unauthorized alteration of the payee’s name on the Check, except if the Check with the unauthorized alteration is hand-written or if Bank fails to identify an alteration or other exception in the payee’s name because Company has (x) truncated the payee’s name in Company’s Check Issue Data, or (y) elected to use customized zone formatting (as detailed in Bank’s Customer Guidelines for the Service). 5. Check Issue Data. The “Check Issue Data” for any Check is the Check’s complete serial number and numeric amount, and if Company has selected Payee Validation, the payee’s name (or truncated name). As detailed in Bank’s User Guide for the Service, a “truncated name” is the portion of a payee’s name Company includes in its Check Issue Data based on the option it has elected from the options for truncation Bank offers. Each Business day not later than the cutoff time Bank separately discloses, Company will provide the Check Issue Data for all Checks issued through that Business Day to Bank in the format, through the medium, and at the place(s) Bank specifies. In performing the Service, Bank will use only the Check Issue Data Company provides to Bank. Bank will not electronically or manually compare a Check with an issue date after the current Business Day against the Checks presented for payment on the Account until the issue date contained on Company’s future-dated Check register matches the current Business Day’s calendar date. Bank will not accept Check Issue Data containing an issue date more than forty-five (45) calendar days in the future. 6. Payment of Matching Checks. If a Check presented to Bank matches the Check Issue Data Company has provided to Bank (a “Matching Check”), Bank will make final payment on the Check and charge the Check to Company’s Account (subject to section 13). 6.1.D. - Page 104