NOTE PURCHASE AGREEMENT

This Note Purchase Agreement (this “Agreement”) is made and entered into on
April 28, 2011 (the “Effective Date”), by and between Calpian, Inc., a Texas
corporation, with its principal place of business located at 500 North Akard
Street, Suite 2850, Dallas, Texas 75201 (the “Company”), and HD
Special-Situations II, LP (the “Lender”).

Recitals

A. The Company and the Lender are executing and delivering this Agreement in
reliance upon the exemptions from securities registration afforded by (i) the
provisions of Regulation D (“Regulation D”) as promulgated by the United States
Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933,
as amended (the “1933 Act”), and (ii) Section 4(2) under the 1933 Act.

B. The Lender desires to purchase from the Company, and the Company desires to
issue and sell to the Lender, upon the terms and conditions stated in this
Agreement:

(i) an aggregate of up to $8,000,000 in principal amount of the Company’s 16%
Senior Secured Term Notes in the form attached as Exhibit A (each a
“Note;”collectively, the “Notes”); and

(ii) a Warrant to Purchase Common Stock in the form attached as Exhibit B (the
“Warrant”) for the purchase of that number of shares of the Company’s $0.001 par
value common stock (the “Common Stock”) as is specified therein at the exercise
price specified therein, which Warrant must be exercised (if at all) within five
years after the date of issuance.

The Notes are to be issued and sold (i) in an initial funding (the “Initial
Funding”) of at least $2,000,000 in principal amount to occur within 90 days
after the Effective Date and (ii) if the Initial Funding is less than $8.0
million, and at the Company’s option, in up to three subsequent fundings (each a
“Subsequent Funding;” collectively, the “Subsequent Fundings”) to occur within
one year after the date of the Initial Funding (the “Initial Funding Date”) and
otherwise pursuant to the provisions of Section 1(c) below. For the Initial
Funding and each Subsequent Funding (sometimes referred as a “Funding,” or
collectively as the “Fundings”), the principal amount of each Note shall be as
specified by the Company (subject to the limits provided herein) and, except as
provided in Section 1(e) below, the purchase price for each Note (the “Purchase
Price”) shall be the principal amount thereof. The Warrant is to be issued and
sold contemporaneously with the execution and delivery of this Agreement. Any
Common Stock receivable upon exercise of the Warrant shall be referred to herein
as the “Warrant Shares.” The Notes, the Warrant and the Warrant Shares may be
collectively referred to herein as the “Securities.”

--------------------------------------------------------------------------------

C. Contemporaneously with the execution and delivery of this Agreement, the
Company is executing and delivering to the Lender a Security Agreement in the
form attached as Exhibit C (the “Security Agreement”), pursuant to which the
Company has agreed to secure all of its obligations under the Notes with a
first-priority security interest in all existing and hereafter acquired assets
owned by the Company.

D. Contemporaneously with the execution and delivery of this Agreement, and in
furtherance of the security interest granted to the Lender in the Security
Agreement, the Company is executing and delivering to the Lender a Collateral
Assignment in the form attached as Exhibit D (the “Collateral Assignment”),
pursuant to which the Company has agreed to assign as security all of its rights
under the Collateral Loan Documents (as defined in the Collateral Assignment),
including, but not limited to, the Company’s rights under (i) the Residual
Purchase Agreement between the Company and Calpian Residual Partners V, L.P.
dated December 31, 2010, and all agreements and other documents attached thereto
as exhibits or otherwise referenced therein, and any amendments thereto,
(ii) the Residual Purchase Agreement between the Company and Cooper and
Schifrin, LLC dated December 31, 2010, and all agreements and other documents
attached thereto as exhibits or otherwise referenced therein, and any amendments
thereto, and (iii) the Residual Purchase Agreement between the Company and First
Alliance Payment Processing, Inc. dated January 7, 2011, and all agreements and
other documents attached thereto as exhibits or otherwise referenced therein,
and any amendments thereto (collectively, the “Existing Residual Contracts”).

E. Contemporaneously with the execution and delivery of this Agreement, the
Company is also delivering to the Lender a Subordination Agreement in the form
of the attached Exhibit E (the “Subordination Agreement”) pursuant to which each
individual or entity listed in the attached Schedule E is subordinating his, her
or its rights with respect to his, her or its portion of the $1,550,000 in
principal amount of Company debt shown on Schedule E (collectively, the
“Subordinated Debt”) to the Lender’s rights under the Notes and the Security
Agreement.

F. Contemporaneously with the execution and delivery of this Agreement, the
Company is also executing and delivering to the Lender (i) a Deposit Account
Control Agreement - Access Restricted After Notice (the “Fundraising DACA”) in
the form attached as Exhibit F with respect to the Company’s account #        
at Wells Fargo Bank, National Association (the “Fundraising Account”), pursuant
to which the Company shall be replaced as the account administrator by the
Lender and the Lender shall have sole control over the movement of funds out of
the Fundraising Account beginning on the Initial Funding Date, and (ii) a
Deposit Account Control Agreement - Access Restricted After Notice (the
“Operating DACA”) in the form attached as Exhibit F with respect to the
Company’s account #         at Wells Fargo Bank, National Association (the
“Operating Account”), pursuant to which, beginning on the Initial Funding Date,
the Lender shall have access to all transactional history in the Operating
Account and the Operating Account shall be subject to such restrictions and
control by the Lender as is specified therein. The Fundraising DACA and the
Operating DACA are collectively referred to herein as the “DACAs.”

--------------------------------------------------------------------------------

G. Contemporaneously with the execution and delivery of this Agreement, the
Company is also executing and delivering to the Lender a Registration Rights
Agreement in the form attached as Exhibit G (the “Registration Rights
Agreement”), pursuant to which the Company agrees, among other things, to
provide certain piggyback registration rights for the Warrant Shares under the
1933 Act and applicable state securities laws.

Agreements

NOW, THEREFORE, in consideration of their respective promises contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company and the Lender hereby agree as follows:

1. Deliveries and Payments on the Effective Date; Purchase and Sale of the
Notes.

(a) Deliveries and Payments on the Effective Date. On the Effective Date:

(i) the Company shall deliver to the Lender originals of (A) this Agreement,
(B) the Warrant, (C) the Security Agreement, (D) the Collateral Assignment,
(E) the Subordination Agreement, (F) the DACAs, (G) the Registration Rights
Agreement, (H) an Escrow Agreement in the form attached as Exhibit H (the
“Escrow Agreement”) and (I) such other items as may be required by any of the
foregoing documents (collectively, the “Closing Documents”), each duly
authorized and executed by the Company and/or any other parties thereto, other
than the Lender;

(ii) the Company shall pay to the Lender, in immediately available funds, (A) a
non-refundable commitment fee of $40,000, (B) an origination fee of $240,000
(the “Origination Fee”), a portion of which shall be refundable as provided in
Section 4(bb) below, (C) an administrative fee of $7,500 and (D) such other
amounts, including the fees and expenses of the Lender, as the Company may be
required to pay on the Effective Date pursuant to the Closing Documents; and

(iii) the Lender shall deliver to the Company executed originals of those
Closing Documents which are required to be signed by the Lender.

(b) Initial Funding. So long as there is no existing or anticipated default by
the Company under any of the Closing Documents, the Initial Funding shall occur
on such date as the parties shall mutually agree, but not more than 90 days
after the Effective Date. At the Initial Funding the Lender shall purchase from
the Company a Note in the principal amount designated by the Company (but not
less than $2,000,000), and the Company agrees to sell that Note to the Lender.
Out of the Purchase Price for such Note there shall be paid to the Lender
(i) non-refundable pre-paid pro-rated interest as provided in such Note, and
(ii) such other amounts, including the fees and expenses of the Lender, as the
Company and the Lender agree shall be included in disbursement instructions in
the form attached as Exhibit I (the “Initial Disbursement Instructions”). The
disbursements listed in the Disbursement Instructions shall be made as specified
therein. On or before the date of the Initial Funding, (i) the Company shall
have delivered to the Escrow Agent (as defined in the Escrow Agreement)
originals of (A) the Note,

 

3

--------------------------------------------------------------------------------

(B) the Disbursement Instructions and (C) such other items as may be required by
this Agreement or any other Closing Documents to be so delivered (collectively,
the “Initial Funding Documents”), each duly authorized and executed by the
Company and/or any other parties thereto (other than the Lender), and (ii) the
Lender shall have delivered to the Escrow Agent (A) the Purchase Price and
(B) executed originals of those Initial Funding Documents which are to be signed
by the Lender.

(c) Subsequent Fundings. If the original principal amount of the Initial Funding
is less than $8.0 million, the Company may, in its sole discretion, notify the
Lender in writing that it desires to borrow some or all of the remaining balance
through the issuance of up to three additional Notes in up to three Subsequent
Fundings. To be valid, any such notification must (i) be given within one year
after the Initial Funding Date and (ii) specify the amount being borrowed (which
amount shall not (A) exceed $8.0 million minus the original principal amount(s)
of the previously issued Note(s) or (B) be less than the lesser of $1.0 million
or the remaining amount available to be drawn hereunder). If any such
notification is received by the Lender, within 21 days after that receipt (or
such other date as the parties may mutually agree in writing), the parties shall
thereafter be obligated to complete that Subsequent Funding, so long as there is
no existing or anticipated default by the Company under any of the existing
Transaction Documents (as defined below); provided, however, that the Company
may withdraw any notification by written notice to the Lender at least three
days prior to the date that has been set to complete that Subsequent Funding. At
each Subsequent Funding the Lender shall purchase a Note from the Company in the
principal amount designated by the Company in the notification, and the Company
agrees to sell that Note to the Lender. Out of the Purchase Price for any such
Note there shall be paid to the Lender (i) non-refundable pre-paid pro-rated
interest as provided in such Note and (ii) such other amounts, including the
fees and expenses of the Lender, as the Company and the Lender agree shall be
included in disbursement instructions (the “Subsequent Disbursement
Instructions”) substantially similar to the Initial Disbursement Instructions
(to the extent appropriate). The disbursements listed in the Subsequent
Disbursement Instructions shall be made as specified therein. On or before the
date of each Subsequent Funding, (i) the Company shall have delivered to the
Escrow Agent originals of (A) the Note being sold pursuant to such Subsequent
Funding, (B) the Subsequent Disbursement Instructions and (C) such other items
as may be required by this Agreement or any of the other Closing Documents
(collectively, the “Subsequent Funding Documents”), each duly authorized and
executed by the Company and/or any other parties thereto (other than the
Lender), and (ii) the Lender shall have delivered to the Escrow Agent (A) the
Purchase Price and (B) executed originals of those Subsequent Funding Documents
which are required to be signed by the Lender.

(d) Distribution of Documents and Payment. At each Funding, the Escrow Agent
shall be responsible for disbursement of the Purchase Price according to the
applicable Initial or Subsequent Disbursement Instructions and delivery of the
Initial Funding Documents or Subsequent Funding Documents, as the case may be,
to the Lender (with copies of the applicable documents to the Company duly
executed by the Lender, where required), in each case in accordance with the
terms of the Escrow Agreement.

 

4

--------------------------------------------------------------------------------

(e) Purchase Price Allocation. For purposes of §1273(c)(2) of the Internal
Revenue Code of 1986, as amended (the “Code”), and §1.1273-2(h)(2) of the
Treasury Regulations thereunder, the Company and the Lender agree to allocate
$100.00 to the purchase of the Warrant from the Purchase Price in the Initial
Funding. The Company and the Lender agree that this paragraph constitutes the
provision of relevant information to the Lender by the Company in a reasonable
manner for purposes of §1.1275-2(e) of the Treasury Regulations.

2. The Lender’s Representations and Warranties. As of the Effective Date and the
date of each Funding (a “Funding Date”), the Lender represents and warrants to
the Company, and agrees, as follows:

(a) Investment Purposes; Compliance With 1933 Act. The Lender is purchasing the
Securities for its own account for investment only and not with a view towards,
or in connection with, the public sale or distribution thereof, except pursuant
to sales registered, or exempt from registration, under the 1933 Act and
applicable state securities laws. The Lender agrees to offer, sell or otherwise
transfer the Securities only (i) in accordance with the terms of this Agreement,
the Notes, the Warrant and the Registration Rights Agreement, as applicable, and
(ii) pursuant to registration under the 1933 Act or an exemption from
registration under the 1933 Act and any other applicable securities laws. The
Lender does not by its representations in this Section 2(a) agree to hold the
Securities for any minimum or other specific term, and reserves the right to
dispose of the Securities at any time pursuant to a registration statement or in
accordance with an exemption from registration under the 1933 Act, in all cases
in accordance with applicable state and federal securities laws. The Lender
understands that it shall be a condition to the issuance of the Warrant Shares
that such shares be and are subject to the representations set forth in this
Section 2(a).

(b) Accredited Investor Status. The Lender is an “accredited investor,” as that
term is defined in Rule 501(a) of Regulation D. The Lender has such knowledge
and experience in financial and business matters that it is capable of
evaluating the merits and risks of the investment made pursuant to this
Agreement. The Lender (i) understands that its investment in the Securities
involves a high degree of risk, (ii) understands that it may be required to bear
the economic risk of its investment for an indefinite period of time and
(iii) is able to bear such risk.

(c) Reliance on Exemptions. The Lender understands that the Securities are being
offered and sold to it in reliance on specific exemptions from the registration
requirements of applicable federal and state securities laws, and that the
Company is relying upon the truth and accuracy of, and the Lender’s compliance
with, the representations, warranties, agreements and covenants of the Lender
set forth herein in order to determine the availability of such exemptions and
the eligibility of the Lender to acquire the Securities.

(d) Information. The Lender and its advisors, if any, have been furnished with
all materials relating to the business, finances and operations of the Company
and materials relating to the offer and sale of the Securities that have been
requested by the Lender. The Lender and its

 

5

--------------------------------------------------------------------------------

advisors, if any, have been afforded the opportunity to ask all questions of the
Company as they have in their discretion deemed advisable. The Lender has sought
such accounting, legal and tax advice as it has considered necessary to an
informed investment decision with respect to the investment made pursuant to
this Agreement.

(e) No Government Review. The Lender understands that no United States federal
or state agency or any other government or governmental agency has approved or
made any recommendation or endorsement of the Securities or the fairness or
suitability of the investment in the Securities, nor have such authorities
passed upon or endorsed the merits of the offering of the Securities.

(f) Transfer or Resale. The Lender understands that except as provided in the
Registration Rights Agreement, (i) the Securities have not been and are not
being registered under the 1933 Act or any state securities laws, and may not be
offered for sale, sold or otherwise transferred unless either (A) subsequently
registered thereunder or (B) the Lender shall have delivered to the Company an
opinion by counsel reasonably satisfactory to the Company, in form, scope and
substance reasonably satisfactory to the Company, to the effect that the
securities to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration and (ii) neither the Company nor any other
individual or entity is under any obligation to register the Securities under
the 1933 Act or any state securities laws or to comply with the terms and
conditions of any exemption thereunder.

(g) Legend. Subject to Section 5(b) below, the Lender understands that each
Note, the Warrant and any stock certificates representing the Warrant Shares
(until such time as the Warrant Shares have been registered under the 1933 Act
pursuant to the Registration Rights Agreement or otherwise may be sold by the
Lender pursuant to Rule 144 (or any applicable rule which operates to replace
Rule 144) promulgated under the 1933 Act (“Rule 144”)), shall bear a restrictive
legend (the “Legend”) in substantially the following form:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE (COLLECTIVELY, THE “LAWS”). THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE
ABSENCE OF EITHER (I) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE APPLICABLE LAWS OR (II) AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE ISSUER IN FORM, SUBSTANCE AND SCOPE REASONABLY ACCEPTABLE TO THE ISSUER,
TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED DUE TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE APPLICABLE LAWS.

(h) Authorization; Enforcement. Of the Closing Documents, Initial Funding
Documents and Subsequent Funding Documents (collectively, the “Transaction
Documents”), those that are to be signed by the Lender have been duly and
validly authorized, executed and delivered by the Lender and are each valid and
binding agreements of the Lender enforceable in accordance with their respective
terms, subject as to enforceability to general principles of equity and to
bankruptcy, insolvency, moratorium and other similar laws affecting the
enforcement of creditors’ rights generally.

 

6

--------------------------------------------------------------------------------

3. The Company’s Representations and Warranties. As of the Effective Date and
each Funding Date, the Company represents and warrants to the Lender, and
agrees, as follows:

(a) Organization and Good Standing. The Company is a corporation duly organized
and existing in good standing under the laws of the State of Texas, and has the
requisite power to own its properties and to carry on its business as now being
conducted. The Company is duly registered as a foreign corporation and is in
good standing in every other jurisdiction in which the nature of its business
makes such registration necessary and where the failure to so register would
have a Material Adverse Effect. As used herein, “Material Adverse Effect” means
any material and adverse effect on (i) the assets, liabilities, sales, financial
condition, business, operations, affairs, circumstances or prospects of the
Company and any subsidiaries (taken as a whole) from those reflected in the SEC
Documents (as defined below) or from the facts represented or warranted in the
Transaction Documents, (ii) the ability of the Company and any subsidiaries to
carry out their businesses as the same are being conducted or are proposed to be
conducted at the date of this Agreement or to meet their obligations under the
Transaction Documents on a timely basis or (iii) the rights and remedies of the
Lender under the Transaction Documents.

(b) Authorization; Enforcement. The Company has the requisite corporate power
and authority to issue and sell the Securities in accordance with the terms
hereof and of the Warrant, to perform its obligations under the Notes and the
Warrant in accordance with their terms, and to enter into and perform the other
Transaction Documents to which it is a party. The Company’s execution, delivery
and performance of the Transaction Documents to which it is a party, and its
consummation of the transactions contemplated thereby, have been duly authorized
by the Company’s Board of Directors and no further consent or authorization of
the Company, its Board of Directors, its stockholders, or any other individual
or entity, is required in connection therewith. The Transaction Documents to
which the Company is a party, including, on the applicable Funding Date, the
applicable Note, have been duly and validly authorized, executed and delivered
by the Company, and the Transaction Documents to which the Company is a party,
including each Note (when issued) and the Warrant, constitute the valid and
binding obligations of the Company enforceable against the Company in accordance
with their respective terms, subject as to enforceability to general principles
of equity and to bankruptcy, insolvency, moratorium and other similar laws
affecting the enforcement of creditors’ rights generally.

(c) Capitalization. As of the Effective Date, the authorized capital stock of
the Company consisted of (i) 200,000,000 shares of $0.001 par value common
stock, of which 16,674,140 shares were issued and outstanding, and
(ii) 1,000,000 shares of preferred stock, of which 23,836 shares of $0.001 par
value Series A Convertible Preferred Stock were issued and outstanding. All of
such outstanding shares have been validly issued and are fully paid and
non-assessable. As of the Effective Date and each Funding Date, except for the
Notes and the Warrant or as disclosed in the attached Schedule 3(c), (i) there
were no outstanding options,

 

7

--------------------------------------------------------------------------------

warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever issued or agreed to by the Company relating to, or securities or
rights convertible into, any shares of capital stock of the Company or any of
its subsidiaries, or arrangements by which the Company or any of its
subsidiaries is or may become bound to issue additional shares of capital stock
of the Company or any of its subsidiaries, (ii) there were no outstanding debt
securities of the Company or any of its subsidiaries other than as set forth on
Schedule E and (iii) there were no agreements or arrangements under which the
Company or any of its subsidiaries is obligated to register the sale of any of
its or their securities under the 1933 Act (except as provided in the
Registration Rights Agreement). The Company has previously furnished to the
Lender true and correct copies of the Company’s Certificate of Formation (the
“Certificate of Formation”) and the Company’s Bylaws, each of which was in
effect on the Effective Date.

(d) Issuance of Warrant Shares. The Warrant Shares are all duly authorized and
reserved for issuance, and in all cases upon issuance in accordance with the
terms of the Warrant shall be validly issued, fully paid and non-assessable,
free from all taxes, liens and charges with respect to the issuance thereof, and
will not be subject to preemptive rights or other similar rights of stockholders
of the Company which have not been previously waived.

(e) Acknowledgment Regarding Lender’s Purchase of the Securities. Except as
disclosed in the attached Schedule 3(e), (i) the Lender is not acting as a
financial advisor to, or fiduciary of, the Company (or in any similar capacity)
with respect to this Agreement or the transactions contemplated hereby,
(ii) this Agreement and the transactions contemplated hereby, and the
relationship between the Lender and the Company, are and will be considered
“arms-length” notwithstanding any other or prior agreements or nexus between the
Lender and the Company, whether or not disclosed, and (iii) other than the
representations and warranties set forth in Section 2 above, any statements made
by the Lender, or any of its representatives or agents, in connection with this
Agreement and the transactions contemplated hereby are not to be construed as
advice or a recommendation, are merely incidental to the Lender’s purchase of
the Securities and have not been relied upon in any way by the Company or its
management. The Company’s decision to enter into this Agreement and the
transactions contemplated hereby have been based solely upon an independent
evaluation by the Company and its management.

(f) No Integrated Offering. Neither the Company nor any of its Affiliates (as
defined in Section 3(n) below), nor any individual or entity acting on its or
their behalf, has directly or indirectly made any offers or sales of any
security or solicited any offers to buy any security under circumstances which
would prevent the parties hereto from consummating the transactions contemplated
hereby pursuant to an exemption from registration under the 1933 Act and,
specifically, in accordance with the provisions of Regulation D. The
transactions contemplated hereby are exempt from the registration requirements
of the 1933 Act, assuming the accuracy of the representations and warranties of
the Lender contained herein.

 

8

--------------------------------------------------------------------------------

(g) No Defaults, Violations or Required Consents. Except as set forth in the
attached Schedule 3(g), the Company (i) is not in violation of its Certificate
of Formation and (ii) is not in default (and no event has occurred which, with
notice or lapse of time or both, would put the Company in default) under, nor
has there occurred any event giving others (with notice or lapse of time or
both) any rights of termination, amendment, acceleration or cancellation of, any
agreement or other instrument to which the Company is a party, except for
defaults or rights as would not, in the aggregate or individually, have a
Material Adverse Effect. The business of the Company is not being conducted in
violation of any law, ordinance, or regulation of any governmental entity, or
any industry standard, except for possible violations which neither singly nor
in the aggregate would have a Material Adverse Effect. Except as specifically
contemplated by this Agreement or as required under the 1933 Act, the 1934 Act
(as defined below) and/or any applicable state securities laws, the Company is
not required to obtain any consent, authorization or order of, or make any
filing or registration with, any court or governmental agency in order for it to
execute, deliver and perform any of its obligations under the Transaction
Documents in accordance with the terms thereof.

(h) SEC Documents; Financial Statements. Except as disclosed in the attached
Schedule 3(h), since the date that the Company’s registration statement on Form
10 became effective, the Company has timely filed all reports, schedules, forms,
statements and other documents required to be filed by it with the SEC pursuant
to the reporting requirements of the Securities Exchange Act of 1934, as amended
(the “1934 Act”), with all of the foregoing that were filed prior to the
Effective Date, together with all exhibits, financial statements and schedules
thereto and all documents (other than exhibits) incorporated by reference
therein, being hereinafter referred to as the “SEC Documents.” The Company has
made available to the Lender (to the extent requested by the Lender) true and
complete copies of the SEC Documents. As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the 1934
Act and the applicable rules and regulations of the SEC promulgated thereunder,
and none of the SEC Documents, at the time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. As of
their respective dates, the financial statements of the Company included in the
SEC Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto. Such financial statements (i) have been prepared in accordance
with generally accepted accounting principles (“GAAP”), consistently applied,
during the periods involved except (A) as may be otherwise indicated in such
financial statements or the notes thereto or (B) in the case of unaudited
interim statements, to the extent they may exclude footnotes or may be condensed
or summary statements and (ii) fairly present in all material respects the
financial position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). No information
provided by or on behalf of the Company to the Lender contains any untrue
statement of a material fact or omits to state any material fact required to be
stated therein in order to make the statements therein, in the light of the
circumstances under which they are or were made, not misleading. Except as set
forth in the financial statements of the Company included in the SEC Documents
or as disclosed in Schedule 3(h), the Company has no liabilities, contingent or
otherwise, other than (i) liabilities incurred in the ordinary course of
business subsequent to the date of such financial statements and
(ii) obligations under contracts

 

9

--------------------------------------------------------------------------------

and commitments incurred in the ordinary course of business and not required
under GAAP to be reflected in such financial statements, in each case of clauses
(i) and (ii) above, which, individually or in the aggregate, are not material to
the financial condition, business, operations, properties, operating results or
prospects of the Company. The SEC Documents contain a complete and materially
accurate description of all written and oral contracts, agreements, leases or
other instruments to which the Company is a party or by which the Company is
bound which are required by the rules and regulations promulgated by the SEC to
be disclosed (each a “Contract”). Neither the Company nor, to the Company’s
knowledge, any of the other parties thereto, is in breach or violation of any
Contract, which breach or violation would, or with the lapse of time, the giving
of notice, or both, have a Material Adverse Effect.

(i) Absence of Certain Changes; Bankruptcy. Since September 30, 2010, there has
been no Material Adverse Effect on the business, properties, operation,
financial condition, results of operations or prospects of the Company. The
Company has not taken any steps, and currently has no reasonable expectation of
taking any steps, to seek protection pursuant to any bankruptcy law, nor does
the Company have any knowledge that its creditors intend to initiate involuntary
bankruptcy proceedings.

(j) Absence of Litigation. Except as set forth in the attached Schedule 3(j),
there is no action, suit, proceeding, inquiry or investigation before or by any
court, public board or governmental body pending or, to the knowledge of the
Company, threatened against or affecting the Company, (i) wherein an unfavorable
decision, ruling or finding would have a Material Adverse Effect, or would
materially and adversely affect the validity or enforceability of, or the
authority or ability of the Company to perform its obligations under, any of the
Transaction Documents, (ii) that involves, or would involve, the Sold Merchants
(as defined in the Existing Residual Contracts) or a Seller (as defined in the
Existing Residual Contracts) or (iii) that may impact the Company’s rights to
the Purchased Residuals (as defined in the Existing Residual Contracts) or any
security interest granted to the Lender under any of the Transaction Documents.

(k) Corrupt Business Practices. Neither the Company nor any officer, director or
other individual or entity acting on behalf of the Company has, in the course of
his, her or its actions for or on behalf of the Company, (i) used any of the
Company’s funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity, (ii) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from the Company’s funds, (iii) violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or
(iv) made, directly or indirectly, any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment to any foreign or domestic government
official or employee.

(l) Brokers; No General Solicitation. Except as set forth in the attached
Schedule 3(l), the Company has not taken any action that would give rise to any
claim by any individual or entity for brokerage commissions, finder’s fees or
similar payments relating to this Agreement and the transactions contemplated
hereby. The Company acknowledges that, except as set forth in Schedule 3(l), no
broker or finder was involved with respect to the transactions contemplated

 

10

--------------------------------------------------------------------------------

hereby. Neither the Company nor any other individual or entity participating on
the Company’s behalf in the transactions contemplated hereby, nor any individual
or entity acting for the Company or any such other individual or entity, has
conducted any “general solicitation,” as described in Rule 502(c) under
Regulation D, with respect to the Securities.

(m) Status of Assets; Subsidiaries. Except for (i) the subordinate liens held by
the holders of the Subordinated Debt or of any other Debt (as defined in
Section 4(g) below) incurred subsequent to the Effective Date in accordance with
the provisions hereof, or (ii) as described on Schedule 3(m), the Company has
good and marketable title to, or valid right to use, each of the Purchased
Residuals and each of its other assets that is material to its business, in each
case free and clear of all liens, claims, restrictions and other encumbrances.
The Company has no subsidiaries.

(n) Affiliate Transactions. Except as set forth on Schedule 3(n), as to each
agreement or transaction between the Company and any Affiliate, the terms of
that agreement or transaction are consistent with market rates in effect at the
time the agreement or transaction was entered into. For purposes of this
Agreement, the term “Affiliate” means, with respect to any individual or entity,
any other individual or entity that directly or indirectly controls or is
controlled by, or under common control with such individual or entity. For the
purposes of this definition, “control,” when used with respect to any individual
or entity, means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such individual or
entity, whether through the ownership of voting securities, by contract or
otherwise.

(o) Insurance. The Company’s insurance coverage with respect to its properties,
assets and business is reasonable and customary for corporations engaged in
similar lines of business and is in full force and effect. Such coverage
includes general liability insurance of at least $1.0 million, with a $3.0
million umbrella policy, and key man insurance of at least $2.0 million on the
life of Harold Montgomery.

(p) Solvency. The Company is solvent and shall not become insolvent as a result
of the consummation of the transactions contemplated by this Agreement. The
Company is, and after giving effect to the transactions contemplated by this
Agreement shall be, able to pay its debts as they become due, and the Company’s
property now has, and after giving effect to the transactions contemplated
hereby shall have, a fair saleable value greater than the amounts required to
pay its debts (including a reasonable estimate of the amount of all contingent
liabilities). The Company has adequate capital to carry on its business, and
after giving effect to the transactions contemplated by this Agreement, the
Company shall have adequate capital to conduct its business. No transfer of
property is being made and no obligation is being incurred in connection with
the transactions contemplated by this Agreement with the intent to hinder, delay
or defraud either present or future creditors of the Company.

(q) No Undisclosed Liabilities; Taxes. The Company has no material liabilities
or obligations of any nature, whether absolute, accrued, contingent or
otherwise, that adversely impact the Sold Merchants or the Purchased Residuals.
The Company has paid, when due, all taxes owed to all governmental authorities.

 

11

--------------------------------------------------------------------------------

(r) Sold Merchants. The Company has provided the Lender with complete and
accurate information as to (i) the name of each Sold Merchant, (ii) the address
of each Sold Merchant, (iii) the current month to date sales of each Sold
Merchant, (iv) the current year to date sales of each Sold Merchant, (v) the
discount rate paid by each Sold Merchant, (vi) the Sold Merchant’s MID (as
defined in the Existing Residual Contracts) and (vii) any other documentation
reflecting revenues received by the Company attributable to a Sold Merchant. The
Company has the right to receive the Purchased Residuals with respect to the
each Sold Merchant under the ISO Agreements (as defined in the Existing Residual
Contracts), as applicable. The Company does not maintain or control any reserve
account or other funds attributable to any Sold Merchant. The Company has not
received any notice of default or termination from any Sold Merchant, nor does
the Company know of any bankruptcy of any Sold Merchant. The Company has
complied in all material respects with the provisions of the ISO Agreements that
are applicable to it.

(s) Industry Security Guidelines. To the Company’s best knowledge, each Seller
has complied with the Industry Security Guidelines (as defined in the Existing
Residual Contracts) with respect to the Purchased Residuals acquired from that
Seller.

(t) Privacy Requirements. To the Company’s best knowledge, each Seller has
complied with the Privacy Requirements (as defined in the Existing Residual
Contracts) with respect to the Purchased Residuals acquired from that Seller.

4. Covenants of the Parties.

(a) Best Efforts. Each party shall use its best efforts to timely satisfy each
of the conditions to be satisfied by it as provided in Sections 6 and 7 of this
Agreement. No party shall intentionally perform or fail to perform any act that,
if performed or omitted to be performed, would prevent or excuse the performance
of this Agreement or any of the transactions contemplated hereby.

(b) Securities Laws. On or before the Effective Date and each Funding Date, the
Company shall take all action necessary in order to sell the Securities then
being sold to the Lender in compliance with federal and applicable state
securities laws, and shall promptly provide written evidence of such compliance
to the Lender upon written request. The Company shall timely file a Form D (and
any other equivalent form or notice required by applicable state law) with
respect to the issuance of the Securities if and as required under Regulation D
and applicable state securities laws.

(c) Reservation of Shares.

(i) The Company shall at all times have authorized and reserved for issuance
that number of shares of Common Stock which is sufficient to provide for the
issuance of all of the Warrant Shares. Prior to the complete exercise or
expiration of the Warrant, the Company shall not reduce the number of shares of
Common Stock reserved for issuance upon exercise of the Warrant without the
written consent of the Lender, except for a reduction proportionate to a reverse
stock split which affects all shares of Common Stock equally.

 

12

--------------------------------------------------------------------------------

(ii) If at any date the Company shall not have authorized and reserved for
issuance that number of shares of Common Stock which is sufficient to provide
for the issuance of all of the Warrant Shares which could then be issued, within
90 days of such date the Company shall call and hold a special meeting of its
stockholders (or arrange for a written consent of stockholders) for the sole
purpose of increasing the Company’s authorized and unissued shares to an amount
sufficient to correct such deficiency. In connection with such meeting, the
Company shall use it best efforts to cause its officers and directors to
(i) recommend to stockholders that they vote in favor of such increase in the
number of authorized and unissued shares and (ii) vote all of their shares in
favor of such increase. Such remedy shall be in addition to all other rights and
remedies available to the Lender under the Transaction Documents, as well as any
other rights or remedies afforded by law or equity.

(d) Expense Reimbursement. Subject to the provisions of this Section, the
Company agrees to (i) pay all fees and expenses (including business, legal,
appraisal and post-Effective Date monitoring) reasonably incurred by the Lender
in connection with this Agreement and the other Transaction Documents, or any
amendment thereto, and (ii) provide advances against such fees and expenses in
such amounts as the Lender may reasonably request from time-to-time. Upon
receipt from the Lender of adequate documentation for such fees and expenses,
the Company agrees to pay, or reimburse the Lender for, all such fees and
expenses, regardless of whether they are incurred before or after the Effective
Date. The Lender acknowledges that as of the Effective Date $30,000 has been
paid by the Company to be applied toward such fees and expenses. Although the
Company acknowledges that such fees and expenses may exceed $30,000, the
Company’s reimbursement obligation hereunder shall not exceed an additional
$30,000 through the Effective Date without the Company’s written consent.

(e) Status; Taxes. Until the Notes have been paid in full, the Company shall
maintain its existence in good standing and shall pay all taxes before they
become delinquent, except for taxes that are reasonably disputed or which, if
not paid, would not have a Material Adverse Effect.

(f) Use of Proceeds. The Company shall use the net Purchase Price for each Note
only for (i) the acquisition of retail credit card processing residual income
streams from independent sales organizations in the United States after the
Effective Date (the “Future Residuals”), but only if the acquisition has been
approved in writing by the Lender prior to its consummation, which approval
shall not be unreasonably withheld, conditioned or delayed, and (ii) working
capital.

(g) Restrictions on Existing Debt Payments. Until the Notes have been paid in
full, the Company shall not make any payment on or with respect to any Debt in
existence on the Effective Date except for scheduled principal and interest
payments on the Subordinated Debt; provided, however, that no principal or
interest payments shall be made on any Subordinated Debt (i) if such payment
would cause an “Event of Default” to occur under any Note or (ii) if an Event of
Default has occurred and is continuing under any Note. For purposes of this
Agreement, the term “Debt” means indebtedness for borrowed money, except that
trade payables and/or accrued liabilities arising in the ordinary course of
business shall not be considered Debt.

 

13

--------------------------------------------------------------------------------

(h) Creation of Post-Effective Date Debt. Until the Notes have been paid in
full, the Company shall not incur any Debt unless such additional Debt is
non-amortizing, currently payable on terms reasonably acceptable to the Lender
(with the parameters of such acceptable terms being set forth on the attached
Schedule 4(h)), subordinated to the Notes by a subordination or other agreement
on terms substantially the same as the terms of the Subordination Agreement, and
has a maturity date that is at least 91 days after the maturity date of the
then-outstanding Notes.

(i) Minimum Cash, Monthly Revenue and EBITDA. Until the Notes have been paid in
full, beginning on the first day of the month in which the Effective Date occurs
and as of the first day of each calendar month thereafter, for the Existing
Residual Contracts, the Company shall maintain a balance of cash and cash
equivalents, monthly revenue, and earnings before interest, taxes, depreciation
and amortization (“EBITDA”) in excess of the minimum amounts set forth on the
attached Schedule 4(i) for the months specified thereon. Upon each acquisition
of Future Residuals, the monthly revenue and EBITDA set forth on Schedule 4(i)
for the month specified thereon shall be modified by multiplying the projected
monthly revenue and EBITDA of those Future Residuals by 0.9 and adding the
result to Schedule 4(i) for the remaining months specified thereon.
Notwithstanding any amount specified on Schedule 4(i), beginning on the first
day of the second month following the month in which the Initial Funding Date
occurs, and as of the first day of each calendar month thereafter (until the
Notes have been paid in full), the Company shall maintain a balance of cash and
cash equivalents of at least $350,000.

(j) Financial and Other Information. Until the Notes have been paid in full:

(i) Within 90 days after the end of each fiscal year (plus any filing extension
to which the Company may be entitled based on a timely filing on Form 12b-25),
the Company shall provide the Lender with audited consolidated financial
statements of the Company for such fiscal year, in each case audited by an
accounting firm selected by the Company and reasonably acceptable to the Lender
(it being agreed that the firm of Whitley Penn, LLP, or its successor, is
reasonably acceptable to the Lender).

(ii) Within 45 days after the end of each of the first three fiscal quarters
(plus any filing extension to which the Company may be entitled based on a
timely filing on Form 12b-25), the Company shall provide the Lender with
unaudited consolidated financial statements of the Company for such fiscal
quarter.

(iii) Within 15 days after the end of each calendar month, the Company shall
provide the Lender with a report, electronically or in writing, that includes
(A) a listing of all of the Ratio Collateral (as defined below) as of the end of
such calendar month, (B) the cash flow status of the Ratio Collateral as of the
end of such calendar month, (C) internally prepared consolidated financial
statements of income, shareholders’ equity and cash flow of the Company for such
calendar month and a balance sheet of the Company as of the end of such month
(each

 

14

--------------------------------------------------------------------------------

prepared in accordance with GAAP, consistently applied during the period covered
by such statements and in a form satisfactory to the Lender), setting forth in
each case (beginning in January 2012) comparisons to figures for the
corresponding periods in the preceding fiscal year and, beginning in the month
of the Effective Date, comparisons to budgets prepared by the Company and
(D) such other financial or business information as the Lender may reasonably
request, all in a format that is mutually agreeable to the Company and the
Lender. The monthly statements shall be accompanied by (i) a certificate from
the Company’s principal financial officer and principal executive officer, in a
form reasonably acceptable to the Lender, certifying that (A) the Company is in
compliance with each covenant set forth in the Transaction Documents that
applies to it, (B) no Event of Default has occurred with respect to any of the
Notes and (C) no event of default has occurred with respect to any indebtedness
in favor of banks, other financial institutions or third party lenders, or if
such is not the case, specifying such non-compliance, Event of Default or other
event of default and the steps being taken to remedy same, (ii) management’s
discussion and analysis of the Company’s financial condition and any material
changes in its financial condition and/or results of operations compared to the
prior month and (iii) a description of any pending or, to the Company’s
knowledge, threatened litigation or other legal action involving the Company or
any of its subsidiaries.

(iv) Unless otherwise notified by the Lender, during each calendar month the
Company shall hold a review meeting (or teleconference) with the Lender at a
mutually agreeable place and time.

(v) At least 30 days prior to the commencement of each fiscal year the Company
shall provide the Lender with a comprehensive annual budget, which shall include
annual consolidated and consolidating budgets prepared on a monthly basis for
the Company for such fiscal year (displaying anticipated statements of income,
shareholders’ equity, changes in financial position and balance sheets and
containing such internal narrative as is appropriate). In addition, the budget
shall include a capital expenditure plan which shall be presented to the
Company’s Board of Directors for its approval within 30 days after the
commencement of each fiscal year. Such capital expenditure plan, and any changes
thereto, shall be subject to the approval of the Lender, which approval shall
not be unreasonably withheld, conditioned or delayed.

(k) Other Company Information. Until the Notes have been paid in full, the
Company shall promptly provide the Lender with any reports, management letters
or other information that are created or received concerning significant aspects
of its and/or any subsidiary’s operations and financial affairs to the extent
not otherwise provided to the Lender. Until the Notes have been paid in full,
within five days following the Lender’s request, the Company shall provide the
Lender with such other information and financial data concerning the Purchased
Residuals and/or any Future Residuals (collectively, the “Residuals”), the
Company and/or any subsidiary as the Lender may reasonably request.

(l) Dividends, Distributions and Redemptions. Until the Notes have been paid in
full, neither the Company nor any subsidiary shall (i) declare, authorize or pay
any dividend or distribution on any of its equity interests, except for
dividends payable solely in common stock, (ii) purchase, redeem or otherwise
acquire for value any of its equity interests or (iii) return any capital to its
equity holders.

 

15

--------------------------------------------------------------------------------

(m) Sale of Assets; Leasebacks; Management Fees; Affiliate Transactions. Until
the Notes have been paid in full, without the written consent of the Lender
(which consent shall not be unreasonably withheld, conditioned or delayed), the
Company shall not, and shall not permit any subsidiary to, enter into any
arrangements, directly or indirectly, with any individual or entity, whereby the
Company or subsidiary shall (i) sell or transfer any property, whether now owned
or hereafter acquired, outside of the ordinary course of business, (ii) sell or
transfer any property and then rent or lease (as lessee) that property for
substantially the same purpose or purposes as the property was used prior to
sale or transfer or (iii) pay any management fee or similar type of fee to any
individual or entity, except on fair, arm’s length terms. Until the Notes have
been paid in full, the Company shall not (i) perform any existing agreement, or
enter into any new transaction(s), with any Affiliate which would, individually
or in the aggregate, cause payment to that Affiliate in excess of $10,000 in any
fiscal year, (ii) increase the salary or other compensation payable to any
Affiliate from that paid as of the Effective Date, (iii) enter into any
agreement or transaction with any Affiliate except on terms that are consistent
with market rates in effect at the time or (iv) cause or allow any subsidiary to
take any of the foregoing actions.

(n) Capital Expenditures. Until the Notes have been paid in full, without the
written consent of the Lender (which consent shall not be unreasonably withheld,
conditioned or delayed), the Company shall not, and shall not permit any
subsidiary to, make any expenditures for fixed or capital assets if, after
giving effect thereto, the aggregate of all such expenditures would exceed
$50,000 during any fiscal year net of the cash proceeds received during such
fiscal year from the sale of any fixed or capital assets (with any amount of
such limit which is not used during a fiscal year to be added to the amount that
may be expended in the succeeding fiscal year).

(o) Collateral Coverage Ratio. Until the Notes have been paid in full, the
Company shall not, at any time following the Initial Funding Date, permit its
Collateral Coverage Ratio to be less than 2.0x. For purposes of this paragraph,
“Collateral Coverage Ratio” shall mean, as of any date, an amount equal to the
ratio of (i) the sum of (A) the Company’s cash and cash equivalents, plus
(B) the value of the Residuals, less amortization (collectively, the “Ratio
Collateral”), all determined as of the end of each calendar month in which any
Note remains outstanding on a consolidated basis in accordance with GAAP and
reflected on the Company’s consolidated balance sheets, to (ii) the aggregate
outstanding principal amounts, plus accrued interest (if any), of the Notes.

(p) Payment of Administrative Fee. At the end of each calendar quarter ending
after March 31, 2011, at which one or more of the Notes remains outstanding, the
Company shall pay to the Lender a $7,500 administrative fee (the “Administrative
Fee”), such payment to be made at the same time as the monthly Note payment(s)
then due.

 

16

--------------------------------------------------------------------------------

(q) Acquisition of Subsidiaries. In the event that the Company acquires any
wholly- or partially-owned subsidiary at any time prior to the full payment of
the Notes, at the time of such acquisition the Company shall (i) cause each such
subsidiary to guaranty the payment of the Notes (and related expenses) and
secure such guaranty with a first-priority security interest in all of its
assets and (ii) provide the Lender with a first-priority security interest in
all of its equity interests in each subsidiary. In each case, such guaranty and
security interests shall be in a form reasonably acceptable to the Lender.

(r) Acquisition of Real Property. After the Effective Date and prior to the full
payment of the Notes, the Company shall not acquire, nor shall it cause or allow
any subsidiary to acquire, any real property without the Lender’s prior written
consent, which shall not be unreasonably withheld, conditioned or delayed. In
the event that any acquisition of real property is permitted by the Lender, the
Company shall, or shall cause the acquiring subsidiary to, grant the Lender a
first-priority security interest therein by means of a mortgage or deed of trust
in a form reasonably acceptable to the Lender and enter into or provide such
other documentation in connection therewith as the Lender may reasonably
require.

(s) Sale or Discount of Residuals or Accounts Receivable. Until the Notes have
been paid in full, without the consent of the Lender (such consent not to be
unreasonably withheld, conditioned or delayed) neither the Company nor any
subsidiary shall discount or sell (with or without recourse) any Residuals or
accounts receivable except in connection with the collection or enforcement
thereof in the ordinary course of business.

(t) Indemnification. Upon demand, the Company shall, and shall cause any
appropriate subsidiary to, indemnify the Lender and its Affiliates with respect
to, and defend and hold the Lender and its Affiliates harmless against, any
fine, penalty, loss, damage, liability, cost or expense (including, but not
limited to, reasonable attorney’s fees and costs of investigation) arising out
of or in connection with any claim or cause of action that is brought or
threatened against the Lender and/or its Affiliates by any individual or entity
(other than the Company or any subsidiary) as a result of the Lender entering
into this Agreement or any of the other Transaction Documents and/or performing
its obligations hereunder or thereunder, except to the extent that such fine ,
penalty, loss, damage, liability, cost or expense has resulted from the gross
negligence or willful misconduct of the Lender or its Affiliates. The
obligations in this Section shall survive the termination of this Agreement and
the payment of the Notes.

(u) Inspection Rights. Until the Notes have been paid in full, the Company shall
permit any representative designated by the Lender, upon reasonable notice and
during normal business hours, to (i) visit and inspect any of the properties of
the Company or any subsidiary, (ii) examine the financial records of the Company
or any subsidiary and make copies thereof or extracts therefrom and
(iii) discuss the affairs, finances and accounts of the Company or any
subsidiary with the Company’s management, key employees and/or independent
accountants. So long as the Company is not in default under any Note, all costs
and expenses incurred by the Lender in connection with any such inspection shall
be funded by the Administrative Fee.

(v) Unfunded Liabilities - ERISA. Until the Notes have been paid in full, the
Company shall not incur, and shall not cause or allow any subsidiary to incur,
any liability or tax under section 4971 of the Code in respect of an accumulated
funding deficiency (or obtain any

 

17

--------------------------------------------------------------------------------

waiver under section 412(d) of the Code or section 303 of the Employee
Retirement Income Security Act (“ERISA”)) or incur any material liability to the
Pension Benefit Guaranty Corporation in connection with any employee benefit
plan. The Company shall not cause or allow, and shall not permit any subsidiary
to cause or allow, any Reportable Event (as defined in Title IV of ERISA) to
occur or continue with respect to any such plan.

(w) Additional Agreements. In addition to the DACAs, until the Notes have been
paid in full, at the Lender’s request, the Company shall enter into, or cause
any subsidiary to enter into, mutually acceptable agreements with (i) the Lender
and the Company’s or applicable subsidiary’s bank(s) with respect to its bank
account(s) and/or (ii) the Lender and individuals or entities making payments to
the Company or applicable subsidiary with respect to the deposit of those
payments. The Company shall cooperate with the Lender to implement such
agreements within five business days after written notice from the Lender.

(x) Conduct of Business; Notice. Until the Notes have been paid in full, the
business of the Company and any subsidiaries shall not be conducted in violation
of any law, ordinance or regulation of any governmental entity, except for
possible violations which neither singly nor in the aggregate would have a
Material Adverse Effect. Until the Notes have been paid in full, the Company
shall promptly notify the Lender in writing of the occurrence of a Material
Adverse Effect with respect to itself or any subsidiary.

(y) Insurance. Until the Notes have been paid in full, the Company shall at all
times (i) keep its business and assets, and the business and assets of any
subsidiary, insured against such liabilities, losses and damage as are
ordinarily insured against by owners of similar businesses through such insurers
and on such terms of coverage as are reasonably acceptable to the Lender and
(ii) cause its insurance policies and those of its subsidiaries to name the
Lender as an additional insured or beneficiary thereunder (or include a lender
loss contract endorsement payable in favor of the Lender) and provide that such
policies may not be canceled without at least ten days prior notice to the
Lender. Such insurance coverage shall at all times include (i) general liability
insurance of at least $1.0 million, with a $3.0 million umbrella policy, and
(ii) key man insurance of at least $2.0 million on the life of Harold
Montgomery.

(z) No Material Changes to Certain Agreements. Unless consented to in writing by
the Lender (such consent not to be unreasonably withheld, conditioned or
delayed) or as set forth on the attached Schedule 3(n), until the Notes have
been paid in full, the Company shall not (i) materially modify any employment,
consulting, advisory or other services agreement between the Company and any of
its officers, directors, Affiliates, Cagan McAfee Capital Partners, LLC or
Colorado Financial Services Corporation, or any of their Affiliates, in
existence as of the Effective Date or (ii) enter into any new agreement with any
of its officers, directors, Affiliates, Cagan McAfee Capital Partners, LLC or
Colorado Financial Services Corporation, or any of their Affiliates, involving
employment, consulting, advisory or other services or providing for any
compensation to such persons.

 

18

--------------------------------------------------------------------------------

(aa) Confidentiality Agreement. To the extent reasonably requested by the
Company, the Lender shall execute a confidentiality agreement with respect to
any material non-public information that may be disclosed to the Lender pursuant
to this Agreement.

(bb) Partial Refund of Origination Fee. Subject to Section 8(l) below, if, on
the first anniversary of the Initial Funding Date, the original principal
amounts of the issued Notes total less than $8.0 million, within 30 days after
such anniversary the Lender shall pay to the Company an amount equal to one and
one-half percent (1.5%) of the difference between such total and $8.0 million.

(cc) Landlord Subordination. The Company shall use commercially reasonable
efforts to obtain, within 30 days after the Effective Date, a subordination
agreement from its landlord for the leased premises located at 500 North Akard
Street, Suite 2850, Dallas, Texas, pursuant to which the landlord will
subordinate its landlord’s liens (whether established pursuant to the terms of a
lease agreement or implied by law), to the Lender’s rights under the Notes and
the Security Agreement, in a form and substance reasonably acceptable to the
Lender.

(dd) Future Residuals Security Documents. Until the Notes have been paid in
full, each time the Company or any subsidiary acquires any Future Residuals, the
Company and/or such subsidiary shall deliver to the Lender documentation with
respect to such Future Residuals in a form substantially similar to the
applicable Existing Residuals Security Documents (as defined in Section 7(h)
below) or as the Lender shall otherwise reasonably request (collectively, the
“Future Residuals Security Documents”). In each instance, the applicable Future
Residuals Security Documents shall be delivered at such time as is agreed upon
by the Company and the Lender.

(ee) Additional Subordinated Debt. On or before the date of the Initial Funding,
the Company shall have obtained at least $1 million (less applicable fees and
expenses) from a lender on terms consistent with Section 4(h) above, or
otherwise acceptable to the Lender.

(ff) Amendment to Residual Agreements. Until the Notes have been paid in full,
the Company shall not amend, or cause or allow any Affiliate to amend, any
agreement with respect to any Future Residuals (collectively, the “Future
Residual Contracts”), any Existing Residual Contract, or any ISO Agreement in
any way that affects any Residual or the Lender’s rights with respect thereto
without the Lender’s prior written approval (which approval shall not be
unreasonably withheld, conditioned or delayed).

(gg) Compliance with Industry Security Guidelines. The Company shall use its
best efforts to cause the Sellers at all times to comply with the Industry
Security Guidelines applicable to any of the Residuals.

(hh) Compliance with Privacy Requirements. The Company shall use its best
efforts to cause the Sellers at all times to comply with the Privacy
Requirements applicable to any of the Residuals.

 

19

--------------------------------------------------------------------------------

(ii) Compliance with Processor Agreements and Applicable Laws. The Company shall
use its best efforts to cause the Sellers at all times to comply in all material
respects with the provisions of the ISO Agreements and any similar agreements
with processors with respect to the Future Residuals that are applicable to it,
as well as all applicable laws, regulations and industry standards in connection
with the operation of its business.

(jj) Release of Liens. Without the Lender’s prior written approval (which
approval shall not be unreasonably withheld, conditioned or delayed), the
Company shall not release, or cause or allow any Affiliate to release, any lien
it now holds, or in the future may hold, on the assets of any Seller or any
entity from which the Company acquires Future Residuals.

(kk) Fundraising Account Deposits and Transfers. Until the Notes have been paid
in full, the Company shall cause all payments that are to be made to it with
respect to any Residuals to be electronically deposited into the Fundraising
Account on a timely basis. Thereafter, such funds shall be transferred only to
the Operating Account, with each such transfer to be at such time, and in such
amount, as is agreed upon by the Lender (with such agreement to not be
unreasonably withheld, conditioned or delayed).

(ll) Substitution of Escrow Agent. Upon reasonable request of the Lender, the
Company shall use its best efforts to promptly cause a new escrow agent to be
substituted for the existing escrow agent under the Escrow Agreement dated
January 25, 2011, by and between the Company, Cooper and Schifrin, LLC and
American Escrow Company.

(mm) Changes to Fundraising and Operating Accounts. By such means as is
reasonably acceptable to the Company, the Lender and Wells Fargo Bank, National
Association, on or before the occurrence of the Initial Funding, the Company
shall (i) replace the Company with the Lender as the Fundraising Account
administrator, (ii) cause the Lender to have sole control over the movement of
funds out of the Fundraising Account and (iii) allow the Lender to have online
access to all transactional history in the Operating Account. Such replacement,
control and access shall continue until the Notes have been paid in full.

(nn) Default Prior to the Initial Funding Date. In the event that there is an
existing or anticipated default by the Company under any of the Closing
Documents on or prior to the Initial Funding Date, the Lender agrees that its
sole remedy for such default shall be to withhold the Initial Funding until such
time as the default has been cured (it being understood by the Company that the
period of such withholding shall not extend the 90-day period specified in
Section 1(b) above).

5. Transfer and Warrant-Related Matters.

(a) Transfer of the Securities. If the Lender (i) provides the Company with an
opinion by counsel reasonably satisfactory to the Company, in form, scope and
substance reasonably satisfactory to the Company, to the effect that the
Securities to be transferred may be transferred pursuant to an exemption from
registration under the 1933 Act, (ii) transfers (in accordance with the
provisions of this Agreement) any of the Securities to an Affiliate which is

 

20

--------------------------------------------------------------------------------

an accredited investor or (iii) transfers any of the Securities in compliance
with Rule 144, then, in each instance, the Company shall permit such transfer
and, if applicable, promptly (and in all events within five business days)
issue, or instruct any transfer agent to issue, one or more certificates in such
name and in such denominations as specified by the Lender.

(b) Removal of Legend. The Legend shall be removed from any certificate for a
Security, and a certificate for a Security shall be originally issued without
the Legend, if, unless otherwise required by state securities laws, (i) the sale
of such Security is registered under the 1933 Act, (ii) the holder of such
Security provides the Company with an opinion by counsel reasonably satisfactory
to the Company, in form, scope and substance reasonably satisfactory to the
Company, to the effect that the Securities to be transferred may be transferred
pursuant to an exemption from registration under the 1933 Act or (iii) such
holder provides the Company with assurances reasonably satisfactory to the
Company that such Security can be sold pursuant to Rule 144. The Lender agrees
that its sale of the Securities, including those represented by a certificate
from which the Legend has been removed, or which were originally issued without
the Legend, shall be made only pursuant to an effective registration statement
(with delivery of a prospectus in connection with such sale) or in compliance
with an exemption from the registration requirements of the 1933 Act. In the
event the Legend is removed from the certificate for a Security, or any
certificate for a Security is issued without the Legend, and thereafter the
effectiveness of a registration statement covering the sale of such Security is
suspended or the Company determines that a supplement or amendment thereto is
required by applicable securities laws, then upon reasonable advance notice to
the holder of such Security, the Company shall be entitled to require that the
Legend be placed upon such Security, which Legend shall be removed when such
Security may again be sold pursuant to an effective registration statement or
Rule 144 or such holder provides the opinion with respect thereto described in
clause (ii) above.

(c) Exercise of the Warrant. Promptly after receiving notice of exercise of the
Warrant pursuant to the terms thereof, and in any event no more than five
business days after the Company’s receipt of such notice of exercise and payment
of the full purchase price of the Warrant Shares (as set forth therein), the
Company shall issue, or shall instruct its transfer agent to issue, certificates
registered in the name of the Lender or its permitted nominee for the Warrant
Shares in such amounts as are specified in such notice. All such certificates
shall bear the Legend unless otherwise provided by this Agreement or any
documents referenced herein. The Company represents and warrants that (i) no
instructions will be given by it to its transfer agent other than (A) the
instructions referred to in this Section 5 and (B) any stop transfer
instructions required to give effect to Section 2(g) hereof in the case of the
Warrant Shares prior to their registration under the 1933 Act and (ii) the
Warrant and the Warrant Shares shall be freely transferable subject to transfer
restrictions imposed under applicable law and by the terms of this Agreement,
the Warrant and the Registration Rights Agreement. Nothing in this Section shall
affect in any way the Lender’s obligations and agreement to comply with all
applicable securities laws upon resale of the Warrant Shares. The Company will
deliver the certificate(s) representing the Warrant Shares issuable upon
exercise of the Warrant (along with a replacement Warrant representing the
balance of the original Warrant not so exercised, if applicable) to the Lender
or its designee via overnight courier within five business days after the
applicable exercise date (with respect to each exercise, the “Deadline”). Time
is of the essence with respect to the requirements of the immediately preceding
sentence.

 

21

--------------------------------------------------------------------------------

(d) Injunctive Relief for Breach. The Company acknowledges that a breach of its
obligations under Sections 5(a), 5(b) and/or 5(c) above will cause irreparable
harm to the Lender by vitiating the intent and purpose of the transactions
contemplated hereby. Accordingly, the Company agrees that the remedy at law for
a breach of its obligations under such Sections would be inadequate and agrees
that, in the event of a breach or threatened breach by the Company, the Lender
shall be entitled, in addition to all other remedies at law or in equity, to an
injunction restraining any breach and/or requiring immediate appropriate action
by the Company, without the necessity of showing economic loss and without any
bond or other security being required.

(e) Liquidated Damages for Non-Delivery of Certificates. In addition to the
provisions of Section 5(d) above, the Company understands and agrees that any
delay in the delivery of a certificate beyond the Deadline will result in
substantial economic loss and other damages to the Lender. As partial
compensation for such loss, the Company agrees to pay liquidated damages (which
the Company acknowledges are not a penalty) to the Lender for delivery of the
certificate(s) after the Deadline, in accordance with the following schedule
(where “No. of Business Days Late” is the number of business days beyond 15
business days from the date of delivery by the Lender to the Company of a
facsimile notice of exercise or, if later, from the date on which all other
necessary documentation duly executed and in proper form required for the
exercise of the Warrant has been delivered to the Company, but only if such
necessary documentation has not been delivered to the Company within the 15
business day period after the facsimile delivery to the Company of the notice of
exercise):

 

No. of Business Days Late

  

Liquidated Damages (in US$)

1

   $300

2

   $400

3

   $500

4

   $600

5

   $700

6

   $800

7

   $900

8

   $1,000

9

   $1,250

10

   $1,500

11+

  

$1,750 + $1,000 for

each Business Day Late

beyond 11 days

Subject to the Lender’s right, in its sole discretion, to add accrued liquidated
damages on to the principal amount of one of the Notes (as provided in the
Notes), the Company shall pay the Lender any liquidated damages incurred under
this Section 5(e) in immediately available funds upon the earlier of (i) the
delivery to the Lender of the certificate(s) with respect to which the damages
accrued or (ii) each monthly anniversary of the receipt by the Company of the
Lender’s notice of exercise. Nothing herein shall limit the Lender’s right to
pursue actual damages for the Company’s failure to deliver certificates to the
Lender by the Deadline.

 

22

--------------------------------------------------------------------------------

(f) Restriction on Transfer. Notwithstanding anything to the contrary herein or
in any Transaction Document, the Lender shall not transfer the Notes or the
Warrant to any individual or entity that is not a “U.S. Person,” as such term is
defined in Section 7701(a)(30) of the Code.

6. Conditions to the Company’s Obligation to Sell. The obligation of the Company
to enter into this Agreement and sell the Warrant at the Effective Date and to
sell a Note at a Funding is subject to the satisfaction, on or before the
Effective Date and the date of each such Funding, of each of the following
applicable conditions; provided, however, that these conditions are for the
Company’s sole benefit and may be waived in writing by the Company at any time
in its sole discretion:

(a) Execution and Delivery of Documents. The Lender shall have (i) executed each
of the applicable Transaction Documents to the extent required thereby and
(ii) delivered such documents or signature pages thereof (electronically or as
otherwise provided herein or in the Escrow Agreement), together with such other
items as may be required by this Agreement, to the Company or the Escrow Agent,
as applicable.

(b) Delivery of the Purchase Price. For each sale of a Note, the Company shall
have received the net Purchase Price pursuant to the Initial or Subsequent
Disbursement Instructions (as applicable) by wire transfer of immediately
available funds.

(c) Accuracy and Performance. The representations and warranties of the Lender
herein shall be true and correct in all material respects on the Effective Date
and on each Funding Date as though made at that time (except for representations
and warranties that speak as of a specific date), and the Lender shall have, in
all material respects, performed, satisfied and complied with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Lender at or prior to the Effective Date and each
Funding Date.

(d) No Restrictions or Prohibitions. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered or issued
by any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated
hereby which restricts or prohibits the consummation of any of the transactions
contemplated herein.

7. Conditions to the Lender’s Obligation to Purchase. The obligation of the
Lender to enter into this Agreement and purchase the Warrant at the Effective
Date and to purchase a Note at a Funding is subject to the satisfaction, on or
before the Effective Date and the date of each such Funding, of each of the
following applicable conditions; provided, however, that these conditions are
for the sole benefit of the Lender and may be waived by the Lender at any time
in its sole discretion:

(a) No Material Adverse Effect; Payments. There shall have been no Material
Adverse Effect since the Effective Date or the date of the most recent Funding,
as applicable, and the Company shall have paid or caused the payment of all fees
and expenses due to the Lender and counsel for the Lender as required by this
Agreement.

 

23

--------------------------------------------------------------------------------

(b) Execution and Delivery of Documents. The Company and each other individual
or entity (other than the Lender) who is required to execute the applicable
Transaction Documents shall have (i) executed each of the applicable Transaction
Documents to the extent required thereby and (ii) delivered such documents or
signature pages thereof (electronically or as otherwise provided herein or in
the Escrow Agreement), together with such other items as may be required by this
Agreement, to the Lender or the Escrow Agent, as applicable.

(c) Issuance of Applicable Securities. The Company shall have issued the
applicable Securities duly executed by the authorized officers of the Company
and delivered them to the Escrow Agent via overnight delivery or as otherwise
provided by the Escrow Agreement.

(d) Accuracy and Performance; Certificate. The representations and warranties of
the Company herein shall be true and correct in all material respects on the
Effective Date and on each Funding Date as though made at that time (except for
representations and warranties that speak as of a specific date), and the
Company shall have, in all material respects, performed, satisfied and complied
with the covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Company at or prior to the
Effective Date and each Funding Date, including obtaining all consents and
approvals required for it to enter into and consummate the applicable
Transaction Documents. The Lender may require a certificate, executed by the
Chief Executive Officer of the Company and dated as of a Funding Date, to the
foregoing effect.

(e) No Restrictions or Prohibitions. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered, or issued
by any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated
hereby which restricts or prohibits the consummation of any of the transactions
contemplated herein.

(f) Completion of Due Diligence. Prior to the Effective Date, the Lender’s due
diligence investigation of the Company shall have been completed to the Lender’s
satisfaction.

(g) Evidence of Insurance. Prior to the Effective Date, the Company shall have
delivered to the Lender evidence (in a form reasonably acceptable to the Lender)
that the insurance required by this Agreement and the other applicable
Transaction Documents is in effect.

 

24

--------------------------------------------------------------------------------

(h) Documentation Regarding the Purchased Residuals. Prior to the Effective
Date, the Company shall have delivered to the Lender such documentation as the
Lender may reasonably request in order to perfect, protect and/or enforce the
Lender’s first-priority security interest in the Purchased Residuals, including,
but not limited to, the following (collectively, the “Existing Residuals
Security Documents”):

(i) Documentation reasonably acceptable to the Lender by which each processor
for the Purchased Residuals under the ISO Agreements (the “Existing Processors”)
irrevocably (A) agrees that it will send its payments only to the Fundraising
Account unless otherwise directed in writing by the Lender, (B) consents to the
Collateral Assignment to the extent that it relates to the Company’s rights
under the ISO Agreements and (C) consents to the Lender’s ability to elect to
cure (in its sole discretion) any defaults that may arise under the ISO
Agreements.

(ii) Documentation reasonably acceptable to the Lender by which each Seller
irrevocably agrees that (A) it consents to the Collateral Assignment to the
extent that it relates to the Purchased Residuals that it sold to the Company
and (B) it shall promptly provide notice to the Company and the Lender of any
actual or reasonably anticipated breach of the ISO Agreement or any other
agreement affecting the Purchased Residuals that it sold to the Company of which
it has actual knowledge.

(iii) Copies of the filed UCC-1 financing statements evidencing the security
interests in each Seller’s assets that were granted to the Company pursuant to
the Existing Residual Contracts (including a UCC-1 financing statement for First
Alliance Payment Processing, Inc. that has been filed in Delaware (its state of
formation)).

(i) Legal Opinion. Prior to the Effective Date, the Company shall have delivered
to the Lender an opinion of counsel reasonably satisfactory to the Lender with
respect to such matters as the Lender has reasonably designated.

(j) Agreements as to Additional Debt. If, on the Effective Date, there is any
Debt in addition to the Subordinated Debt, the Company shall have delivered to
the Lender subordination or other agreements with respect to such additional
Debt on terms acceptable to the Lender.

(k) Revenue and EBITDA. The Company shall have met the minimum thresholds for
monthly revenue and EBITDA set forth on Schedule 4(i) for the prior calendar
month.

8. Governing Law; Miscellaneous.

(a) Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of California, without regard to the
conflicts of laws provisions thereof. Service of process in any civil action
relating to or arising out of this Agreement (including all Exhibits and
Schedules and any amendments hereto or thereto) or the transactions contemplated
herein may be accomplished in any manner provided by law. The parties hereto
agree that a final, non-appealable judgment in any such suit or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on such
judgment or in any other lawful manner.

 

25

--------------------------------------------------------------------------------

(b) Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
signature pages from such counterparts have been delivered to the other party or
the Escrow Agent.

(c) Headings; Interpretation. The headings of this Agreement are for convenience
of reference and shall not form a part of, or affect the interpretation of this
Agreement. As used herein, unless the context clearly requires otherwise, the
words “herein,” “hereunder” and “hereby” shall refer to the entire Agreement and
not only to the Section or paragraph in which such word appears. If any date
specified herein falls upon a Saturday, Sunday or legal holiday, the date shall
be construed to mean the next business day following such Saturday, Sunday or
legal holiday. For purposes of this Agreement, a “business day” is any day other
than a Saturday, Sunday or legal holiday. Each party intends that this Agreement
be deemed and construed to have been jointly prepared by the parties. As a
result, the parties agree that any uncertainty or ambiguity existing herein
shall not be interpreted against either of them.

(d) Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

(e) Entire Agreement; Amendments. This Agreement and the documents referenced
herein (which are incorporated herein by reference) contain the entire
understanding of the parties with respect to the matters covered herein and
supersede all prior agreements, negotiations and understandings, written or
oral, with respect to such subject matter. Except as specifically set forth
herein, neither the Company nor the Lender makes any representation, warranty,
covenant or undertaking with respect to such subject matter. No provision of
this Agreement shall be waived or amended other than by an instrument in writing
signed by the Company and the Lender. No delay or omission of a party hereto in
exercising any right or remedy hereunder shall constitute a waiver of such right
or remedy, and no waiver as to any obligation shall operate as a continuing
waiver or as a waiver of any subsequent breach.

 

26

--------------------------------------------------------------------------------

(f) Notices. Any notices required or permitted to be given under the terms of
this Agreement shall be in writing and sent by U. S. Mail or delivered
personally or by overnight courier or via facsimile (if via facsimile, to be
followed within one business day by an original of the notice document via
overnight courier) and shall be effective (i) five days after being placed in
the mail, if sent by registered mail, return receipt requested, (ii) upon
receipt, if delivered personally, or (iii) one day after facsimile transmission
or delivery to a courier service for overnight delivery, in each case properly
addressed to the party to receive the same. The addresses for such
communications shall be as follows:

 

If to the Company:    Calpian, Inc., Attn.: Harold Montgomery   

500 North Akard Street, Suite 2850

Dallas, Texas 75201

Telephone: (214) 758-8600

Facsimile: (214) 758-8602

E-mail: HaroldMontgomery@calpian.com

If to the Lender:    HD Special-Situations II, LP   

One Maritime Plaza, Suite 825

San Francisco, California 94111

Attention: Todd Blankfort

Telephone: (415) 277-2293

Facsimile: (415) 236-6023

E-mail: todd@hdcap.com

Each party shall provide written notice to the other of any change in address.

(g) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and permitted
assigns; provided, however, that (i) the Company shall not assign this Agreement
or any of its rights or obligations hereunder and (ii) the Lender may assign any
or all of its rights and obligations under this Agreement to any individual or
entity to whom the Lender assigns or transfers a Note in accordance with the
provisions hereof; provided, however, that such transferee agrees in writing to
be bound, with respect to that Note, by the provisions hereof that apply to the
“Lender.” Notwithstanding anything herein to the contrary, the Lender may pledge
all or any part of any Note or the Warrant as collateral for a bona fide loan
pursuant to a security agreement with a third party lender which is an
accredited investor, and such pledge shall not be considered a transfer in
violation of this Agreement so long as it is made in compliance with all
applicable laws, it being acknowledged that such third party lender shall be
entitled to assume the rights and shall agree in writing to be bound by the
obligations of the Lender provided in the Transaction Documents.

(h) No Third Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
individual or entity.

(i) Survival. Unless this Agreement is terminated under Section 8(l) below, the
representations, warranties and agreements of the Company and the Lender
contained herein shall survive the Effective Date and each Funding.

(j) Publicity. The Company and the Lender shall have the right to review (but
not the right to approve), before issuance by the other, any press releases or
other public statements with respect to the transactions contemplated hereby,
including a “tombstone” describing the financing provided pursuant to this
Agreement.

 

27

--------------------------------------------------------------------------------

(k) Further Assurance. Each party shall do and perform, or cause to be done and
performed, at its expense (subject to Section 4(d) above), all such further acts
and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated hereby.

(l) Termination. In the event that the Initial Funding has not occurred on or
before 90 days after the Effective Date, this Agreement may be terminated at any
time thereafter by written notice from one party to the other. Such termination
shall not be the sole remedy for a breach of this Agreement, and each party
shall retain all of its rights and remedies at law or in equity with respect to
such breach. Notwithstanding anything herein to the contrary, a party whose
breach of a covenant or representation and warranty or intentional failure to
satisfy a condition prevented the Initial Funding shall not be entitled to
terminate this Agreement. In the event of a termination pursuant to this
Section, the Lender shall not be required to repay any portion of the
Origination Fee.

(m) Remedies. No provision of this Agreement providing for any specific remedy
to a party shall be construed to limit such party to that specific remedy, and
any other remedy that would otherwise be available to such party at law or in
equity shall also be available. The parties intend that the rights and remedies
hereunder be cumulative, so that exercise of any one or more of such rights or
remedies shall not preclude the later or concurrent exercise of any other rights
or remedies.

(n) Attorney’s Fees. If a party to this Agreement shall bring any action for
relief against the other arising out of or in connection with this Agreement, in
addition to all other remedies to which the prevailing party may be entitled,
the losing party shall be required to pay to the prevailing party a reasonable
sum for attorney’s fees and costs incurred in bringing or defending such action
and/or enforcing any judgment granted therein, all of which shall be deemed to
have accrued upon the commencement of such action and shall be paid whether or
not such action is prosecuted to judgment. Any judgment or order entered in such
action shall contain a specific provision providing for the recovery of
attorney’s fees and costs incurred in enforcing such judgment. For the purposes
of this Section, attorney’s fees shall include, without limitation, fees
incurred with respect to the following: (i) post-judgment motions, (ii) contempt
proceedings, (iii) garnishment, levy and debtor and third party examinations,
(iv) discovery and (v) bankruptcy litigation.

IN WITNESS WHEREOF, the Lender and the Company have caused this Agreement to be
duly executed by their respective authorized persons on the Effective Date.

 

28

--------------------------------------------------------------------------------

 

The Company:

CALPIAN, INC.

By: /s/ Harold Montgomery, Chief Executive Officer

By: /s/ Harold Montgomery, Secretary

 

The Lender:

 

HD SPECIAL-SITUATIONS II, LP

 

By:    Hunting Dog Capital II, LLC

 

Its:    General Partner

 

By: /s/ Todd Blankfort, Managing Member

LIST OF EXHIBITS AND SCHEDULES

 

Exhibit A        Form of 16% Senior Secured Term Notes Exhibit B    Warrant to
Purchase Common Stock Exhibit C    Security Agreement Exhibit D    Collateral
Assignment Exhibit E    Subordination Agreement Exhibit F    Deposit Account
Control Agreement - Access Restricted Immediately

 

29

--------------------------------------------------------------------------------

Exhibit G        Registration Rights Agreement Exhibit H    Escrow Agreement
Exhibit I    Initial Disbursement Instructions

Schedule E

Schedule 3(c)

Schedule 3(e)

Schedule 3(g)

Schedule 3(h)

Schedule 3(j)

Schedule 3(l)

Schedule 3(m)

Schedule 3(n)

Schedule 4(h)

Schedule 4(i)

 

30