Common use of Protective action Clause in Contracts

Protective action. 11.1. Regardless of any contrary provision in this Agreement, we may, in our reasonable judgment, determine that it is necessary to withhold, and offset amounts from, payments we otherwise would make to you under this Agreement or require you to provide us with additional security for your or any of your Affiliates’ obligations to us or any of our Affiliates under this Agreement or any Other Agreement. Such withheld payments are called a Reserve. 11.2. Some of the events that may cause us to establish a Reserve include: (i) your ceasing a substantial portion of or adversely altering your operations; (ii) your selling all or substantially all of your assets or any party acquiring 25% or more of the equity interests issued by you (other than parties currently owning 25% or more of such interests), whether through acquisition of new equity interests, previously outstanding interests, or otherwise; (iii) your suffering a material adverse change in your business; (iv) your becoming insolvent; (v) our receiving a disproportionate number or amount of Disputed Charges at your Establishments; or (vi) our reasonable belief that you will not be able to perform your obligations under this Agreement, under any Other Agreement, or to Cardmembers. 11.3. If an event leads us to believe that we need to create a Reserve, then we may establish a Reserve or terminate this Agreement immediately upon notice to you. We may increase the amount of the Reserve at any time; provided that the amount of the Reserve will not exceed an amount sufficient, in our reasonable judgment, to satisfy any financial exposure or risk to us under this Agreement (including from Charges submitted by you for goods or services not yet received by Cardmembers), or to us or our Affiliates under any Other Agreement, or to Cardmembers. 11.4. We may deduct and withhold from, and recoup and offset against, the Reserve any amounts you or any of your Affiliates owe us or any of our Affiliates under this Agreement or any Other Agreement. We may take other reasonable actions to protect our rights or those of any of our Affiliates, including changing the speed or method of payment for Charges, exercising Full Recourse, or charging you fees for Disputed Charges. 11.5. You must provide to us promptly, upon request, information about your finances and operations, including your most recent certified financial statements. 11.6. In the event that your account with us shows a debit balance, we shall be entitled to: (i) require payment in full by you on receipt of notification from us of the amount of such debit balance together with late payment interest thereon; (ii) debit your Account (if you have signed a Direct Debit mandate); and (iii) refer your account to a third party (which may be a firm of lawyers) for collection and to charge you a file referral fee and all associated costs.

Protective action. 11.1. Regardless of any contrary provision in this Agreement, we may, in our reasonable judgment, determine that it is necessary to withhold, and offset amounts from, payments we otherwise would make to you under this Agreement or require you to provide us with additional security for your or any of your Affiliates’ obligations to us or any of our Affiliates under this Agreement or any Other Agreement. Such withheld payments are called a Reserve. 11.2. Some of the events that may cause us to establish a Reserve include: (i) your ceasing a substantial portion of or adversely altering your operations; (ii) your selling all or substantially all of your assets or any party acquiring 25% or more of the equity interests issued by you (other than parties currently owning 25% or more of such interests), whether through acquisition of new equity interests, previously outstanding interests, or otherwise; (iii) your suffering a material adverse change in your business; (iv) your becoming insolvent; (v) our receiving a disproportionate number or amount of Disputed Charges at your Establishments; or (vi) our reasonable belief that you will not be able to perform your obligations under this Agreement, under any Other Agreement, or to Cardmembers. 11.3. If f an event leads us to believe that we need to create a Reserve, then we may establish a Reserve or terminate this Agreement immediately upon notice to you. We may increase the amount of the Reserve at any time; provided that the amount of the Reserve will not exceed an amount sufficient, in our reasonable judgment, to satisfy any financial exposure or risk to us under this Agreement (including from Charges submitted by you for goods or services not yet received by Cardmembers), or to us or our Affiliates under any Other Agreement, or to Cardmembers. 11.4. We may deduct and withhold from, and recoup and offset against, the Reserve any amounts you or any of your Affiliates owe us or any of our Affiliates under this Agreement or any Other Agreement. We may take other reasonable actions to protect our rights or those of any of our Affiliates, including changing the speed or method of payment for Charges, exercising Full Recourse, or charging you fees for Disputed Charges. 11.5. You must provide to us promptly, upon request, information about your finances and operations, including your most recent certified financial statements. 11.6. In the event that your account with us shows a debit balance, we shall be entitled to: (i) require payment in full by you on receipt of notification from us of the amount of such debit balance together with late payment interest thereon; (ii) debit your Account (if you have signed a Direct Debit mandate); and (iii) refer your account to a third party (which may be a firm of lawyers) for collection and to charge you a file referral fee and all associated costs.