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4.14 The Settlement Account is owned and controlled by the Merchant and is a valid
<br />account for processing debit and credit transactions tinder this Merchant Agreement;
<br />4.15 Merchant is not (i) a Sanctioned Person, (ii) located in or operating under a
<br />license issued by a jurisdiction whose government has been identified by die U.S.
<br />Department of State as a sponsor of international terrorism under 22 U.S.C. 2371 or 50
<br />U.S.C. App. 24050), (iii) located in or operating under a license issued by a jurisdiction
<br />that has been designated as non - cooperative with international anti -money laundering
<br />principles or procedures by an intergovernmental group or organization or which ilia U.S.
<br />is a member, or (iv) located in or operating under a license issued by a jurisdiction that has
<br />been designated by the U.S, Secretary of Treasury pursuant to 31 U.S.C. 5318A as
<br />warranting special measures due to money laundering concerns; and
<br />4.16 That Merchant will immediately notify Merchant Bank and Processor of any
<br />material changes to any information provided herein including but not limited to a. change
<br />in Merchant's legal entity, location, business type, or die types of goods and services
<br />offered for sale by Merchant.
<br />5. CONFIDENTIALITY; DATA SECURITY.
<br />5.1 Transaction Receipts. Merchant will retain in a secure and confidential manner
<br />original or complete and legible copies of each Transaction Receipt, and each Credit
<br />Transaction Receipt raptured to be provided to Cardholders, for at least two years or longer
<br />if required by law or the Operating Rules. Merchant shall render all materials actua rung
<br />Cardholder Account Numbers unreadable prior to discarding.
<br />52 Storage. Merchant will store Transaction Receipts and Credit 'i'ransnntion
<br />Receipts in an area limited to selected personnel, and when record- retention requirements
<br />have been met. Merchant will destroy the records so that the same are rendered unreadable.
<br />5.3 Merchant Servicers and Agents. Merchant must notify Bank and receive
<br />Bank's approval prior in engaging any Merchant Servicer or Agent in connection with
<br />Merchant's acceptance of Cards or the submission of Transactions to Bank. Merchant shall
<br />provide Merchant Bank and Processor at least sixty days advance written notice of
<br />Merchant's election to use a Merchant Servicer or Agent. Merchant Bank and/or Processor
<br />may 'individually approve or deny the use of a Merchant Servicer or Agent in their sole and
<br />absolute discretion and at any time. If a Merchant Servicer or Agent is required to certify,
<br />register, or set in any fashion pursuant to the Operating Rules, Merchant shall cause such
<br />Merchant Servicer or Agent to cooperate with Merchant Bank in completing any steps
<br />required for registration and/or certification and/or action. Merchant is solely responsible
<br />for any and all applicable fees, costs, expenses and liabilities associated with such
<br />registration and/or certification and/or action. Bank shall in no event be liable to Merchant
<br />or any third only for any actions or inactions of any Merchant Servicer or Agent used by
<br />Merchant, and Merchant hereby expressly assumes all such liability.
<br />Merchant will immediately notify Bank if Merchant decides to use electronic authorization
<br />or data capture terminals provided by any entity other than Bank or its authorized designee
<br />( "Third Party Terminals ") to process Transactions, including leasing a terminal from a
<br />third party. if Merchant elects to use 'third Party Terminals (a) the third party providing
<br />the terminals will be Merchant's Merchant Servicer in the delivery of Transactions to
<br />Bank; and (b) Merchant assumes full responsibility and liability for any failure of that third
<br />party to comply with the Operating Rules. applicable laws, rules or regulations or this
<br />Merchant Agreement Bank will not be responsible for any losses or additional fees
<br />incurred by Merchant as a result of any error by a third party agent or a malfunction in a
<br />Third Party Terminal.
<br />The use of a Merchant Servicer or Agent or software or systems provided by a Merchant
<br />Servicer or Agent that has connectivity to the Internet poses an increased risk, and
<br />Merchant assumes all liability for such increased risks. If Merchant utilizes software or
<br />hardware with a connection to the Internet such hardware or software interacts in any
<br />capacity with the provision of services contemplated pursuant to this Merchant Agreement,
<br />Merchant is solely liable without limitation for any and all consequences of such
<br />interaction.
<br />5.4 Security. Merchant agrees and shall ensure that Merchant Servicers and Agents
<br />wilized by Merchant provide the same levels of security as those required of Merchant, and
<br />that such Merchant Servicers and Agents transmit data in accordance with: (a) ilia required
<br />formats) of the Card Associations; (b) the Operating Rules; and (e) the requirements of
<br />Bank. Merchant must have a written contract between die Merchant and its Agent or
<br />between the Merchant and the Merchant Servicer that stipulates adherence to the provisions
<br />of such information security requirements- Merchant shall indemnily and hold Merchant
<br />Bank and Processor harmless against losses or damages arising from the acts or Omissions
<br />of Merchant Servicers or Agents engaged by Merchant.
<br />5.5 Loss or Theft. Merchant most immediately notify Merchant Bank. and Processor
<br />of any suspected or confirmed loss or theft of materials or records that contain Cardholder
<br />Account Numbers or Card Transaction information. In the event of a suspected or
<br />confined loss or theft Merchant shall provide immediate access to all facilities, systems,
<br />procedures, equipment. and documents as may be deemed appropriate by Bank or its
<br />designated representatives for Inspection, audit, and copying as deemed appropriate by
<br />both Merchant Bank and Processor in their individual sole discretion. Merchant shall be
<br />responsible for all costs associated with such inspection, audit, and copying however such
<br />costs may occur.
<br />5.6 Merchant autluirizes Bank to release its name and address to any third party
<br />whom the Bank determines needs to know such information in order for Back to perform
<br />the Card Program services under this Merchant Agreement and who has requested such
<br />information.
<br />5.7 Merchant will not (a) provide Cao folder Account Numbers, personal
<br />Cardholder information or Transaction information to anyone except Back, the Card
<br />Associations, or Merchant's Merchant Servicers or Agents for the purpose of assisting
<br />Merchant in Completing Card Transactions, or as specifically required by law; (b) retain or
<br />store Card Magnetic Stripe, CVV, CVV2, CVC2 or CID data (including 'track Data)
<br />subsequent to Authorization for a Transaction; (c) soil, purchase, provide or exchange Card
<br />Account Number information to any third party without the Cardholder's consent, or to any
<br />entity other than Merchant's Merchant Serviccrs or Agents, Bank, the Card Associations,
<br />or in response to valid legal process or subpoena; or to) release any Cardholder information
<br />over the telephone tinder any circumstances.
<br />5.8 Merchant may not in any event, including its failure, including bankruptcy,
<br />insolvency, or other suspension of business operations, sell, transfer, or disclose any
<br />materials that contain Cardhalder Account Numbers, personal information or Transaaion
<br />information to third parties. In the event that Merchant's business fails or ceases to exist,
<br />Merchant is required to mar m to Bank all such information or provide proof of destruction
<br />of this information to Bank.
<br />5,9 Merchant agrees to establish security procedures to protect Cardholder
<br />information and comply with the Visa Cardholder Information Security Program (LISP),
<br />MasterCard's Site Data Protection (SDP) Program, Discover Information Security
<br />Compliance (DISC), American Express Dam Security Requirements, and the Payment
<br />Card Industry data security standards. The Card Associations or Barak, and the respective
<br />representatives, may inspect the premises of Merchant or any Merchant Servicer or Agent
<br />engaged by Merchant for compliance with security requirements. Merchant acknowledges
<br />that any failure to comply will) security requirements may result in the imposition of
<br />restrictions on Merchant or the permanent prohibition of Merchant's participation in Card
<br />acceptance programs by file Card Associations. Merchant shall indemnify and hold Bank
<br />harmless against any losses or damages arising from Merchant's failure to comply with
<br />security procedures mid any tosses or damages arising from or related to Merchant's acts or
<br />omissions that result in a branch of data security, including but not limited to Merchant's
<br />noti - participation in any breach security program Processor may offer.
<br />5.10 Federal regulations enacted pursuant to the USA PATRIOT Act and other
<br />applicable laws require financial institutions with which the Processor has relationships to
<br />verify the identity of every person who seeks to open an account with it financial
<br />institution. As a result of Merchant's status as an account holder with Merchant Bank,
<br />Merchant shall provide documentary verification of Merchant's identity, such as a driver's
<br />license or passport for an individual and comfort copy of organization documents for an
<br />entity in manner acceptable to Bank. Bank reserves the right to verify Merchant's identity
<br />through other non- documentary methods as Bank deems appropriate in its sole discretion.
<br />Bank may retain a copy of any document it obtains to verify Merchant's identity with the
<br />financial institution.
<br />C OPERATING RULES.
<br />6.1 Merchant must comply with the Operating Rules, as the same may be amended
<br />Bonn time to time. The Operating Rules may change with little or no advance notice to
<br />Merchant and Merchant will be bound by all such changes. if Merchant objects to any
<br />change fn the Operating Rules, it must immediately stop accepting new Transactions for
<br />Cards governed by the change. The Operating Rules will govern in the event that there is
<br />any inconsistency between this Merchant Agreement and the Operating Rules However,
<br />nothing in this Merchant Agreement shall be remained to impose on Merchant a
<br />requirement (including a requirement under the Operating Rules) which is prohibited by
<br />mandatory provisions of applicable law (i,e., where the applicability of such provisions of
<br />law to this Merchant Agreement, and ot'the law's prohibition to the particular requirement
<br />which otherwise would be imposed on Merchant hereunder, cannot lawfully be waived by
<br />agreement), but the requirement hereunder shall be construed to continue in effect and to
<br />be imposed on Merchant in all respects and at all times to the fullest extent possible
<br />without violating the law's prohibition, with only those particular applications of the
<br />requirement which would violate the law's prohibition deemed severed from the provisions
<br />hereof
<br />6.2 Operating Rules of the Debit Networks may differ among them with respect to
<br />the Transactions they allow. Bank, at its discretion, may require that lire most restrictive
<br />requirements of one Debit Network apply to all of Merchant's Orr -line Debit Card
<br />Transactions, regardless of Card type.
<br />7. MERCHANT'S BUSINESS; OTHER PROCESSORS.
<br />7.1 Compliance with Laws. Merchant will comply with all Requirements of Law
<br />and regulations, including but not limited to haws and regulations regarding anti -money
<br />laundering compliance, in completing Transactions, submitting them to Bank, performing
<br />its obligations under this Merchant Agreement, and otherwise conducting its business.
<br />7.2 Change in Name or Business. Merchant will give Membant Bank and Processor
<br />at least thirty days' prior written notice before any change in Merchant's name or location,
<br />any change in ownership or management of Merchant's business, any sale, assignment,
<br />rental, lease or transfer of ownership of any location that accepts Cards, or any material
<br />change in information concerning Merchant' in the Merchant Application, and material
<br />change in the type or nature of the business carried out by Merchant or otherwise required
<br />to be provided to Bank.
<br />7.3 Other Processors. To the extent permitted by applicable law, Merchant agrees
<br />that it will not participate in a Card Program with another financial institution or processor
<br />without Bank's written approval.
<br />8. CREDIT RI; PORTS AND OTHER IN FORMATION,
<br />8.1 Reports About Merchant. From time to time, Bank may obtain credit and other
<br />information on Merchant, owners and officers of Merchant, and any and all personal
<br />grammars of Merchant, from others (such as customers and suppliers of Merchant, lenders
<br />and credit reporting agencies), and furnish information on Merchant's relationship with
<br />Bank and Bank's experience with Merchant to others seeking the information.
<br />8.2 Reports from Merchant. Merchant will provide Bank with updated business
<br />and Internet information concerning Merchant, including financial statements, tae returns,
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