Common use of Additions to Reserve Account Clause in Contracts

Additions to Reserve Account. If Processor has reason to believe that Merchant may be liable to customers or to Processor for Chargebacks exceeding the balance in the Reserve Account, Processor or Member Bank may: (a) immediately place in the Reserve Account provisional credits or payments otherwise due to Merchant and/or stop processing transactions for Merchant until such time as the extent of Merchant’s obligations to Processor and Member Bank, or Merchant’s liability for Chargebacks, or Merchant’s liability to customers are known, and Processor no longer deems itself insecure, and/or (b) demand from Merchant an amount that in Processor’s judgment is needed to ensure payment of Merchant’s obligations and liabilities. Merchant’s failure to pay any amount will permit Member Bank or Processor or its designated representative to terminate the Merchant Agreement immediately without advance notice.