Re: Letter from Visa regarding Heartland

[Dave Stampley <dstampley () kamberedelson com>]

Some more info re fines... 

> From Heartland's 10-K filing for fiscal year ending Dec. 31, 2007, p. 19: "Generally, our agreements with merchants 
> are for three years and automatically renew for additional one-year periods unless otherwise terminated. Our sponsor 
> bank is also a party to these agreements. The merchants are obligated to pay for all chargebacks, fines, assessments, 
> and fees associated with their account, and in some cases, annual fees." 

p. 27 (in section discussing risk factors): " Any significant incidents of loss of cardholder data by us or our 
merchants could result in significant fines and sanctions by Visa, MasterCard or governmental bodies, which could have 
a material adverse effect upon our financial position and/or operations. In addition, a significant breach could result 
in our being prohibited from processing transactions for Visa and MasterCard. 
. . . 
" Our computer systems could be penetrated by hackers and our encryption of data may not prevent unauthorized use. In 
this event, we may be subject to liability, including claims for unauthorized purchases with misappropriated bank card 
information, impersonation or other similar fraud claims. We could also be subject to liability for claims relating to 
misuse of personal information, such as unauthorized marketing purposes. These claims also could result in protracted 
and costly litigation. In addition, we could be subject to penalties or sanctions from the Visa and MasterCard 
networks." 


David A. Stampley | Of Counsel | KamberEdelson LLC 
11 Broadway, 22nd Fl. | New York, NY 10004 
o.646.964.9602 | f.212.920.3081 
dstampley () kamberedelson com | www.kamberedelson.com 

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