Common use of Creating a Reserve Clause in Contracts

Creating a Reserve. If we believe that we need to create a Reserve, we may do so immediately by: (i) withholding amounts from payments we otherwise would make to you under this Agreement; or (ii) require you to deposit funds or other collateral with us. Such amounts or funds are called a Reserve. The amount of the Reserve may change from time to time, and we will only hold an amount that we consider to be reasonable and necessary to cover our financial exposure or risk to us or our Affiliates under this or any Other Agreement. Some of the events that may cause us to establish a Reserve include: (a) your ceasing a substantial portion of, or adversely altering, your operations; (b) your selling all or substantially all of your assets or any third party acquiring 25% or more of the equity interests issued by you; (c) your suffering a material adverse change in your business; (d) your becoming insolvent; (e) our receiving a disproportionate number or amount of Disputed Charges at your Establishments; (f) our reasonable belief that you will not be able to perform your obligations under this or any Other Agreement; or (g) you become subject to any protective action by any third party with whom you have entered into an arrangement for the acceptance or processing (or both) of Other Payment Products. You agree to notify us immediately upon the occurrence of any of the events described above.