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Rev. 2024-08-06 pg. 8 <br /> <br />6.1. Provider may upon mutual agreement with Sub-merchant, make one or more deductions <br />or offsets to any payments otherwise due to Sub-merchant to fund the Reserve Account in an <br />amount satisfactory to Provider based upon a reasonably anticipated risk of loss to Provider, <br />Processor and/or Member Bank. To secure Sub-merchant’s obligations to Provider, Processor <br />and/or Member Bank under this Agreement, Sub-merchant grants to Provider, Processor and/or <br />Member Bank a lien and security interest in and to (i) any such Reserve Account, and (ii) any of <br />Sub-merchant’s funds pertaining to the Card transactions contemplated by this Agreement now or <br />hereafter in Provider, Processor and/or Member Bank’s possession, whether now or hereafter due <br />or to become due to Sub-merchant. In addition, in the event of termination of this Agreement by <br />either Provider or Sub-merchant, an immediate Reserve Account, if not already established, may <br />be established by Provider and the Reserve Account will be held by Provider for six (6) months <br />after termination of this Agreement or for such longer time as Provider may, in its sole discretion, <br />deem necessary based upon Sub-merchant’s liability to Provider, Processor and/or Member Bank <br />arising prior to or after termination of this Agreement, and Provider may deposit into and retain in <br />the Reserve Account any and all amounts otherwise payable to Sub-merchant. Sub-merchant’s <br />funds held in a Reserve Account may be held in a commingled account for the reserve funds <br />(“Reserve Funds Account”) of Provider’s Sub-merchants, without involvement of an independent <br />escrow agent. Sub-merchant agrees that it shall have no right, title or interest in or to the Reserve <br />Funds Account. In addition to any rights now or hereafter granted under applicable law, and not <br />by way of limitation of any such rights, Provider, Processor and/or Member Bank are hereby <br />authorized by Sub-merchant at any time, without notice or demand to Sub-merchant or to any other <br />person (and such notice and demand being hereby expressly waived), to set off, recoup and to <br />appropriate and to apply any and all funds held in a Reserve Account established hereunder against <br />and on account of obligations owed to Provider, Processor and/or Member Bank by Sub-merchant, <br />whether such obligations are liquidated, unliquidated, fixed, contingent, matured or unmatured. <br />Sub-merchant agrees to duly execute and deliver to Provider, Processor and/or Member Bank, as <br />applicable, such instruments and documents as may reasonably be requested to perfect and confirm <br />the lien or security interest set forth in this Agreement. The right of setoff shall be deemed to have <br />been exercised immediately upon the occurrence of Sub-merchant’s default under this Agreement <br />without any action by Provider or notation in Provider’s records, although Provider may thereafter <br />enter such set off in its books and records. Any amount of Sub-merchant’s Reserve Account <br />remaining in the Reserve Funds Account when Provider determines that the Reserve Account may <br />be closed, shall be released to Sub-merchant. <br />7. Default. The following events shall be considered an "Event of Default": <br />7.1. Sub-merchant becomes subject to any voluntary or involuntary bankruptcy, insolvency, <br />reorganization or liquidation proceeding, a receiver is appointed for Sub-merchant, or <br />7.2. Sub-merchant makes an assignment for the benefit of creditors, or admits its inability to <br />pay its debts as they become due; or <br />7.3. Sub-merchant fails to pay or reimburse the fees, expenses or charges referenced herein <br />when they become due; or <br />7.4. Sub-merchant violates the Operating Regulations or applicable law; or