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<br />network organization, upon any misrepresentation by Merchant, upon commencement of bankruptcy or insolvency proceedings by or
<br />' against the Merchant, upon a material change in the Merchant's average ticket or volume as stated in the Merchant Application, or in the
<br />event Global Direct reasonably deems itself insecure in continuing this Card Services Agreement.
<br />In the event that Global Direct and Member breach the terms and conditions hereof, the Merchant may, at its option, give written notice
<br />to Global Direct and Member of its intention to terminate this Card Services Agreement unless such breach is remedied within thirty (30)
<br />days of such notice. Failure to remedy such a breach shall make this Card Services Agreement terminable, at the option of the
<br />Merchant, at the end of such thirty (30) day period unless notification is withdrawn.
<br />Any Merchant deposit of sales or credit slips that is accepted by Global Direct and Member or by a designated depository after the
<br />effective date of termination will be returned to Merchant and will not be credited (or debited) to merchant's account(s). If the deposit has
<br />already been posted to Merchant's account(s), said posting will be reversed and the deposit returned to Merchant. Termination of this
<br />Card Services Agreement shall not affect Merchant's obligations which have accrued prior to termination or which relate to any
<br />indebtedness purchased hereunder prior to termination, including but not limited to chargebacks even if such chargebacks come in after
<br />termination. In the event of termination, all equipment leased from Global Direct (but not from any other leasing agent), including but not
<br />limited to imprinters, terminals, and printers; all supplies; Card Acceptance Guides; and operating instructions must be returned
<br />immediately to Global Direct at Merchant's expense. Notwithstanding the above, for existing Merchants processing under a version of
<br />the Card Services Terms & Conditions prior to version 06/07 MPS, the original term and termination fee agreed to by the Merchant shall
<br />continue to apply and control and not be superseded by the above.
<br />14. RETURNED ITEMS/CHARGEBACKS.
<br />If a cardholder disputes any transaction, if a transaction is charged back for any reason by the card issuing institution, or if Global Direct
<br />or Member has any reason to believe an indebtedness previously purchased is questionable, not genuine, or is otherwise unacceptable,
<br />the amount of such indebtedness may be charged back and deducted from any payment due to Merchant or may be charged against
<br />any of Merchant's accounts or the Reserve Account (as defined below). Merchant acknowledges and agrees that it is bound by the
<br />rules of the card associations and network organizations with respect to any chargeback. Merchant further acknowledges that it is
<br />solely responsible for providing Global Direct and Member with any available information to re-present a chargeback and that,
<br />regardless of any information it provides or does not provide Global Direct and Member in connection with a chargeback, or any other
<br />reason, Merchant shall be solely responsible for the liability related to such chargeback. A list of some common reasons for
<br />chargebacks is contained in the Card Acceptance Guide provided, however, that such list is not exGusive and does not limit the
<br />generality of the foregoing. If any such amount is uncollectible through withholding from any payments due hereunder or through
<br />charging Merchant's accounts or the Reserve Account, Merchant shall, upon demand by Global Direct, pay Global Direct the full amount
<br />of the chargeback. Merchant understands that obtaining an authorization for any sale shall not constitute a guarantee of payment, and
<br />such sales slips can be returned or charged back to Merchant like any other item hereunder.
<br />15. RESERVE ACCOUNT.
<br />At any time, Global Direct and Member may, at their option, establish a reserve account to secure the performance of Merchant's
<br />obligations under this Card Services Agreement to such party ("Reserve Account"). The Reserve Account may be funded, at Global
<br />Direct's sole discretion, through any or all of the following: (a) Direct payment by Merchant -- At the request of Global Direct or Member,
<br />Merchant will deposit funds in the Reserve Account; (b) The proceeds of indebtedness presented for purchase; or (c) The transfer by
<br />Global Direct and Member into the Reserve Account of funds withdrawn from any of the accounts referred to in Section 5 or any other
<br />accounts, including certificates of deposit, maintained by Merchant or Merchant's guarantor, if any, with any designated depositary or
<br />other financial institution. Merchant and Merchant's guarantor hereby grants Member a security interest in all said accounts and
<br />authorizes Global Direct (to the extent authorized by Member) or Member to make such withdrawals at such times and in such amounts
<br />as it may deem necessary hereunder. Merchant and Merchant's guarantor hereby instruct said financial institutions to honor any
<br />requests made by Global Direct and Member under the terms of this provision. Merchant and Merchant's guarantor will hold harmless
<br />the financial institutions and indemnify them for any claims or losses they may suffer as a result of honoring withdrawal requests from
<br />Global Direct and Member.
<br />Merchant hereby agrees that Global Direct and Member may deduct from this Reserve Account any amount owed to such party in
<br />accordance with this Card Services Agreement. Any funds in the Reserve Account may be held until the later of (a) the expiration of any
<br />potentially applicable chargeback rights in respect of purchased indebtedness under the rules and regulations of the card associations
<br />or network organizations and (b) the period necessary to secure the performance of Merchant's obligations under this Card Services
<br />Agreement, which holding period may extend beyond termination of this Card Services Agreement. The Merchant will not receive any
<br />interest on funds being held in a Reserve Account. Without limiting the generality of the foregoing, Merchant shall, upon termination of
<br />this Card Services Agreement, maintain the sum of at least five percent (5%) of gross sales for the 90 day period prior to termination to
<br />be held in a Reserve Account in accordance with the terms of this Card Services Agreement. Global may, at its discretion upon
<br />termination of this Card Services Agreement, require that the Merchant maintain more than five percent (5%) of gross sales for the 90
<br />day period prior to termination in a Reserve Account.
<br />16. DEFAULT/SECURITY INTEREST.
<br />Upon failure by Merchant to meet any of its obligations under this Card Services Agreement (including funding the Reserve Account),
<br />any of the accounts referred to in Section 5 or any other accounts belonging to Merchant or Merchant's guarantor held by any
<br />designated depository (or by any other financial institution) may be debited without notice to Merchant, and Merchant and Merchant's
<br />guarantor gives Member and Global Direct a security interest in all such accounts for these purposes. The scope of the security interest,
<br />and Merchant's and Merchant's guarantor's instructions to its financial institutions to accept withdrawal requests from Global Direct and
<br />Member, and Merchant's agreement to hold such institutions harmless and to indemnify them are described above in Section 15.
<br />Merchant also agrees that, in the event of a default by Merchant, Member has a right of setoff and may apply any of Merchant's
<br />balances or any other monies due Merchant from Member towards the payment of amounts due from Merchant under the terms of this
<br />Card Services Agreement. The rights stated herein are in addition to any other rights Global Direct and Member may have under
<br />applicable law.
<br />Rev. 04/08 MPS
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