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evidence of required licenses and other information and documents Bank may reasonably
<br />request from time to time. Merchant shall further provide Bank such information as it may
<br />request for the making of insurance claim, regulatory or other filings related to Merchant's
<br />activity pursuant to this Agreement. All material marked "confidential" which Bank
<br />receives from Merchant will be used only by Bank or Card Association in performing the
<br />Card Program services under this Merchant Agreement or related services find reporting.
<br />At any reasonable time, Bork, any Card Association or any other entity having carbon ty,
<br />ins the right to audit Merchant's records relating to this Merchant Agreement. Without
<br />limiting the generality of the foregoing, Merchant understands and agrees that if at the
<br />time of signing this Merchant Agreement Merchant is undergoing a forensic investigation,
<br />Merchant must notify Batik and fully cooperate with the Investigation unfit it is completed.
<br />9. ASSIGNMENT; BANKRUPTCY.
<br />9.1 Asaignment. This Merchant Agreement is binding upon the successors and
<br />assigns of Bank and Merchant. Merchant will not assign this Merchant Agreement to
<br />another entity without Bank's prior written consent and any purported assignment made
<br />without Bank's consent will be void.
<br />9.2 Bankruptcy.
<br />(a) Merchant will notify Bank immediately if any bankruptcy, insolvency or
<br />similar petition is filed by or against Merchant. Merchant acknowledges that this Merchant
<br />Agreement constitutes an executory contract to extend credit or financial accommodations
<br />m defined in 1 I. II.S.C. §365(c)(2) and that the Merchant Agreement cannot be assumed or
<br />assigned in the event of bankruptcy. Merchant and Bank agree that in the event of
<br />Merchant's hankruptcy, Bank shall be entitled to suspend further performance under this
<br />Merchant Agreement.
<br />(b) Merchant acknowledges and agrees that in the event of a bankruptcy
<br />proceeding, Merchant must establish a Reserve Account or maintain a previously
<br />established and then current Reserve Account in amounts required by Bank and in
<br />accordance with any Reserve Account provision specified in this Merchant Agreement.
<br />Bank will have the right to setoff against the Reserve Account for any and all obligations
<br />which Merchant may owe Bank, without regard as to whether the obligations relate to
<br />Transactions initiated or created before or after the tiling of the bankruptcy petition,
<br />10. AMENDMENTS; WAIVERS.
<br />10.1 Amendments. Unless otherwise provided for in this Merchant Agreement, Bank
<br />may amend this Merchant Agreement at any time by providing Merchant will, fifteen days'
<br />prior notice by: (a) sending Merchant written notice of such amendment, or (b) posting
<br />such amendment to the Processor web site and providing Merchant with electronic notice
<br />as provided in Section 23. The amendment will become effective unless Bank receives
<br />Merchant's notice terminating this Merchant Agreement before the effective date. Bank .
<br />may amend this Merchant Agreement upon less than fifteen days prior notice if Bank
<br />reasonably determines immediate modification is required by Requirements of Law,
<br />Operating Rules or any adverse change in Merchant's financial condition. Amendments
<br />submitted by Merchant will bind Bank only if in writing and approved and signed by
<br />Back's authorized officer.
<br />10.2 Waivers. Bank's failure to enforce this Merchant Agreement will not waive
<br />Bank's rights under this Merchant Agreement. Waivers ofany provision of this Merchant
<br />Agreement must be in writing and signed by Bank. A waiver in one instance will not apply
<br />to other occasions unless that intent is clear from the signed waiver.
<br />11. TERlvl;'rER1NL NATIOM
<br />11.1 Term(Renewal. The initial train of this Merchant Agreement shall be for the
<br />term of three years (the "Initial Tenn ") commencing on the date Bank processes the first
<br />Transaction for Merchant (including, a test Transaction) and, with processing of the first
<br />transaction, the Merchant accepts the services ot'Processor and agrees to be bound by this
<br />Merchant Agreement and signifies Bank's approval of this Merchant Agreement. At the
<br />expiration of the Initial Term, this Merchant Agreement will automatically renew for
<br />successive one year periods (each a `Renewal Tenn" and collectively with the Initial'1`erm
<br />the "Term ") unbr s a party provides the other parties with notice of its intent not to renew
<br />this Merchant Agreement at least ninety days prior to the expiration of the then current
<br />term.
<br />I1.2 Termination.
<br />(a) lamination without Cause. Merchant Bank or Processor or Merchant
<br />Bank's or Processor's designated representative may terminate this Merchant Agreement as
<br />to all Card types or individually specifics! Card types, without cause, upon thirty days
<br />advance written notice
<br />(b) Terminatit tin for .Cause by Bank. Merchant Bank or Processor or Merchant
<br />Bank's or Processor's designated representative may terminate this Merchant Agreement in
<br />its sole and absolute discretion, effective Immediately, upon written, electronic or oral
<br />notice, except as otherwise stated in this Merchant Agreement, to Merchant if Merchant
<br />Bank or Processor reasonably determines that any of the following conditions exists:
<br />(i) Merchant has violated any provision of this Merchant Agreement
<br />(it) There is a material adverse change in Merchant's financial condition,
<br />material change in Merchant's processing activity, processing activity inconsistent with the
<br />Merchant Application, or Merchant Bank or Processor determines in its sole discretion that
<br />Merchant's processing activity could result in a loss to Bank.
<br />(iii) A petition in bankruptcy has been tiled by or against Merchant, the
<br />Merchant is generally unable to pay its debts as they become due, a receiver, custodian,
<br />trustee, liquidator or similar ofiiefal is appointed for a substantial ponion of Merchant's
<br />business, there is a general assignment for the benefit creditors, or the business terminates.
<br />(iv) Any information which Merchant provided to Bank, including
<br />Merchant Application information, was false, incomplete or misleading when received, or
<br />has materially changed since Merchant provided such information
<br />(v) At any tune during the term of this Merchant Agreement, Merchant
<br />has had it monthly ndio of Chargebucks to Transactions exceeding one percent, or
<br />Chargeb:aks tare in excess of three percent army monthly dollar amount of['ransactions.
<br />(vt) There is an overdraft for three days or more in the Settlement
<br />Account, or overdrafts in the Settlement Account are otherwise excessive.
<br />(vii) Merchant or any of Merchant's officers or employees has been
<br />involved in processing Transactions with Bank or other parties arising front fraudulent or
<br />otherwise unauthorized transactions.
<br />(viii) Merchant is or will be unable or movilling to perform its obligations
<br />under this Merchant Agreement or any applicable laws.
<br />(ix) Merchant has failed to Puy Bank any amount when due.
<br />(x) Merchant has failed to promptly perform or discharge any obligation
<br />under this Merchant Agreement, the Settlement Account or the Reserve Account,
<br />(xi) Any of Merchant's representations or warranties made in connection
<br />with this Merchant Agreement was not true or accurate when given.
<br />(xii) Merchant has defaulted on any agreement it has with Bank.
<br />(xiii) Bank is served with legal process seeking to attach or garnish any of
<br />Merchant's funds or property in Bank's possession, and Merchant does not satisfy or
<br />appeal the legal process within fifteen days of the Bank being served.
<br />(xiv) The Operating Rules are amended in any way so that the continued
<br />existence of this Merchant Agreement would cause Bank to be in breach of such Operating
<br />Rules.
<br />(xv) Any Guaranty supporting Merchant's obligations is revoked,
<br />withdrawn or terminated or altered in any way,
<br />(xvi) Any governmental entity initiates proceedings against Merchant, or
<br />Bank reasonably believes that a governmental entity may do so.
<br />(xvii) If any, circumstances arise regarding Merchant or its business that
<br />create harm or loss of goodwill to any Card Association.
<br />(c) Tenninntionftn CamgbyMerchant. Merchant may terminate this Merchant
<br />Agreement in the event of a material breach of the terms of this Merchant Agreement by
<br />Bank, provided Merchant gives Bank written notice of any alleged breach and such breach
<br />remains uncured for a period of thirty days following receipt ofwrown notice by the Bonk.
<br />(d) PJa„mage_(or Early Terminal on.
<br />(i) Bank and Merchant acknowledge and agree that in addition to all
<br />other remedies available to Bank under this Merchant Agreement arm otherwise available
<br />in law or equity, if this Merchant Agreement is terminated prior to the expiration of the
<br />applicable Tern of the Merchant Agreement for any reason other than for a material,
<br />uncured breach by Bank, Merchant agrees to pay Bank damages (the "Damages ")
<br />determined by adding an account closure fair as follows: (1) $250 for Merchants with less
<br />than twelve months remaining from the date of termination to the end of the then current
<br />Term, or; (2) $500 for Merchants with more than twelve months remaining, or such portion
<br />or the foregoing as may be permitted by applicable law.
<br />(it) Merchant agrees that such Damages shall also be due to Bank if
<br />Merchant discontinues submitting Transactions for processing during the Tenn for a period
<br />of lonely (90) consecutive days, and is not designated on the Merchant Application, or by
<br />notice to Bank, as a seasonal merchant or as otherwise agreed to by Bank.
<br />(iii) Merchant acknowledges and agrees that the Damages are not a
<br />penalty but rather are a reasonable computation of the financial harm caused by the
<br />termination oftltis Merchant Agreement by the Merchant.
<br />(e) Merchant Bank's or Processor's rights of termination under this Merchant
<br />Agreement are cumulative, A specific right of termination shall not limit any other right of
<br />Bank to terminate this Merchant Agreement expressed elsewhere in this Merchant
<br />Agreement. Notice of termination may be given orally or In writing, if given orally, shall
<br />be confirmed in writing, except as otherwise stated in this Merchant Agreement.
<br />(f) Upon termination, Merchant's rights to complete 'transactions and submit
<br />them to Bank, and to use Transaction form or formats, promotional material and any other
<br />items provided by Bank, will cease. Termination of this Merchant Agreement will not
<br />terminae the rights and obligations of Merchant and Bank relating to acts or emissions
<br />occurring before termination, including for example, airy Processing Fees or other service
<br />fees awed to Bank, cry Transactions processed for Merchant by Bank (whether before or
<br />after termination), Merchant's Chargeback and indemnity obligations, and the Security
<br />Interest granted. to Bank in this Merchant Agreement.
<br />(g) It is understood that a file for terminated merchants referred to as
<br />"6[ATCB" is maintained by Card Associations containing the names of any business (and
<br />its principals) which have been terminated for certain reasons, including fraud, depositing
<br />excessive counterfeit paper, excessive unauthorized transactions, depositing paper for
<br />others (laundering), bankruptcy or branch of this Merchant Agreement Merchant
<br />acknowledges that Merebant Bank or Processor is required to report Merchant to the
<br />MATCH (and/or on [he Consortium Merchant Negative File (the CMNF) published by
<br />Discovere Network) if this Merchant Agreement is terminated for any of the foregoing
<br />reasons or other reasons as may be modified by the Card Associations. Merchant agrees
<br />and consents to such meaning in the event of the termination of this Merchant Agreement
<br />for any of the foregoing reasons.
<br />(6) Sections 2.3, 3, 4, 5, 6, 7, 9.1, 10.2, 11, 12, 13, 14, 15, 16.3, 16.4 17, 18, 19,
<br />20 and 22 will survive termination of this Merchant Agreement.
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