NBO Systems, Inc.

Exhibit 10.9

 

CONFIDENTIAL TREATMENT HAS BEENREQUESTED FOR CERTAIN REDACTED PROVISIONS OF THIS AGREEMENT. THE REDACTEDPROVISIONS ARE INDICATED BY THREE ASTERISKS ENCLOSED BY BRACKETS AND UNDERLINED.THE CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION.

 

**CONTRACT	SERVICES AGREEMENT**
 

This CONTRACTSERVICES AGREEMENT (this "Agreement") is entered into effective as of**October 14, 2003**(the "Effective Date") by and between NBO Systems,Inc., a Maryland Corporation ("NBO"), with its principal place of business at3676 W. California Avenue, Building D, Salt Lake City, Utah 84104, and **Glimcher Properties Limited Partnership** ("Customer"), with an address of **150 East Gay Street, Columbus, OH 43215.**NBO and Customer are sometimes eachreferred to herein as a "Party" and collectively the, "Parties."

 
**RECITALS:**
 

       A.        NBO is in the business ofdeveloping, marketing, owning and operating remote distribution and processingsystems for gift cards, gift certificates, gift rights, vouchers, and otherinstruments allowing the giving of a right to receive a credit toward thepurchase of merchandise (collectively "Mall Gift Cards").

 

       B.        Customer is in the business ofowning, operating and managing the marketplace center(s) as defined in **Addendum C** (the "Property" or "Properties").

 

       C.        The Parties desire to enter into arelationship whereby NBO will make available to and install distribution countertop unit(s) ("CTU") with related network components that allow Customer to sellGift Cards/Certificates from the Property Iocation(s) as stated herein and alsoallows NBO to accept, fulfill and distribute card orders placed online via theInternet and telephonically via NBO's toll -free Call Center service(collectively, the "System"), as further described in this Agreement.

 

       NOW, THEREFORE, In consideration of the premises set forth above, the mutualpromises, covenants, agreements and benefits set forth herein below, and forother good and valuable consideration, the Parties agree as follows:
** 

1.       RIGHTS AND OBLIGATIONS OF CUSTOMER.**
**       a.****       Distribution.** Customer hereby grants to NBO the exclusive right tooffer and issue Mall Gift Cards/certificates (the "Mall Gift Cards" or "Cards")which may be used at all participating retail establishments located at theProperty through the System (the "Mall Gift Card Program ") and grants to NBO alicense to install the System at the Property for the Term (defined below) andas further described in this Agreement. During the Term, NBO will also have theexclusive right to issue Cards for orders placed through the Internet and thetelephone to individual and corporate customers as described herein. Nothingcontained herein shall limit the right of Customer's tenants of the Property toissue gift cards, certificates or any similar vouchers to be used for redemptionat their own respective stores.

 
**       b.        Utility Access**andService.******Customer accepts full responsibility to provide thefacilities necessary to enable and maintain the System's electricity; networkconnectivity and telecommunication service (the "Utility Services") required forSystem operation, as specified in **Addendum A, Item 1**, attached hereto.The installation of such services will be at a distribution location to bemutually agreed upon as stated herein and all associated on-going expenses arethe responsibility of the Customer as specified in **Addendum A, Item 1**.Such installation shall include coordination with NBO as specified in **Addendum A, Item 1**.

 
**       c.        System Hardware and Software.Upon NBO's receipt of full payment for the System hardware received andinstalled at the Property, the CTU will become the property of the Customer asdescribed in **Addendum A, Item 2**. Customer understands and agrees thatalthough the System hardware and components may be owned by them, this ownershipdoes not extend Customer any right or ability to install any other software onthe System throughout the Term of this agreement, or any

 
**Glimcher		Realty Trust*
* Page		1 of 16*
*10/14/2003*
 

 
CF         		
 

 

extensionsthereafter, that is not provided by and/or authorized in writing by NBO. NBO isand shall be the sole owner of the trade name "NBO", "The Gift CertificateCompany", "The Gift Card Company", and all other trade names, trademarks andcopyrights used now or in the future in connection with the System. NBO retainsall rights to the System software it has developed and provided to Customer.Software supplied by NBO may not be copied, sold or used except as authorized byNBO and Customer acknowledges that NBO hardware is designed exclusively for theMall Gift Card software as stated above. NBO hereby grants Customer a license touse the System software for the Term hereof and in the event of a default by NBO,for a period not to exceed an additional one hundred eighty (180) days.

 

       **d.        Installation and Maintenance.**Expenses relating to the installation and maintenance of System hardware aredescribed in **Addendum A, Item 3**. Customer shall endeavor to notify NBO,or its designated service agent, of any malfunction of or damage to the System,within twenty-four (24) hours of Customer becoming aware of the problem.Customer must first attempt to notify NBO of any problem requiring assistance.Customer's personnel shall cooperate with NBO in performing periodic maintenanceand diagnostic procedures on the System's hardware and/or software components todetermine if and when any periodic or preventative maintenance may be required.

 

**       e.        Relocation.**At anytimeduring the Term of this Agreement, Customer shall have the right to relocate theCTU to another location in the Property and agrees to provide NBO a minimum ofthirty (30) days advance written notice of intent to do so. In that event,Customer shall, at their expense, bring the necessary utilities per **AddendumA, Item 1** to the relocation area. NBO shall provide the technical telephonesupport to assure that the System is functioning properly following therelocation. Customer shall reimburse NBO for any/all reasonable out-of-pocketexpenses incurred by NBO or NBO's designated service organization, relating tothe relocation of the System and any payment due NBO is payable upon thirty (30)days following receipt of invoice from NBO

 

       **f.        Internet/Website.**AtCustomer's request, NBC) shall cooperate in designing and implementing a"shopping cart" that allows visitors access to Customers and/or NBO's websites,for the purpose of purchasing Cards online via the Internet. Customer shallprovide NBO with contact information of Customer's website administrators inorder to complete all programming requirements and all Customer expensesassociated with this process are described in **Addendum A, Item 4**.

 

**       g.        Training and Property Set-Up.**Throughout the term of this Agreement, Customer agrees to maintainadequately trained Property personnel to assist appropriate users in theoperation of the System for Card purchases at the Property. NBO will provide anyrequired on-site training at a cost as specified in **Addendum A, Item 5**and initial and on-going training and support conducted on the telephone will beprovided to Customer at no cost, throughout the term of the Agreement.

 

**       h.        Advertising.**Customeragrees to provide promotional and advertising support of the Cards at theProperty for consumers, tenants, prospective tenants, and corporate customers.Any expenses associated with such advertising and promotion will be at the soleexpense of Customer unless otherwise agreed upon in writing. Any Mall Gift Cardadvertising and promotion containing reference to VISA requires written approvalfrom NBO prior to implementation by Customer. NBO agrees that dual or crossmarketing opportunities with Customer may be available, and said opportunitieswill be mutually defined and agreed upon by both Parties by separate writtenAgreement.

 

**       i.      ** **Software Licensing Fee.**NBO shall be the exclusive provider of all software to be used in theoperation of the System and any fees associated with the use of such software,including maintenance and upgrades, will be at a charge to the Customer asspecified in **Addendum A, Item 6**.

 

**       j.   **    **Mall Gift Cards****andPackaging.******NBO shall provide the Cards and Packaging at a cost toCustomer as specified in **Addendum A, Item 7**.

 

**       k.        Inventory.**Customer shall provide the on-site personnel necessary to periodically monitorthe inventory of Card stock, report to NBO as requested by NBO on such inventorylevels, and

 
**Glimcher		Realty Trust*
* Page		2 of 16*
*10/14/2003*
 

 
CF         		
 

 

restock/secure theCard stock in compliance with NBO instructions on Card security.

 

**       l.   **    **Gift CardFees****and Expenses.******Customer acknowledges and agrees to allAdministrative and non-use fees ("Admin Fees" charged monthly on cards thatretain a balance after a specified period of time from date of purchase untilexpiration), and any other fees and expenses required for the operation, distributionand management of Cards are described in **Addendum A, Item 8**. My fees andexpenses charged to the holder of the Card, that may affect Card balances, arein accordance with the Terms and Conditions provided with each Card purchasedfrom Customer and NBO.

 

**       m.**        **FinancialResponsibility.**Customer accepts full financial responsibility for thecollection of all funds associated with the issuance of Cards sold at theProperty (the "Customer Sales"). At the conclusion of each business day,Customer shall ensure that funds equal to the dollar amount of Cards sold insuch business day are deposited to the account described in **Addendum B**,**Item 1**, whether by cash, check, credit or debit card. In the event thatNBO determines that there is a shortage with respect to the Customer Sales, NBOshall provide immediate notification thereof to Customer's designee. In theevent of a shortage, whether discovered by Customer or NBO, Customer shalldeposit the shortage amount relating to Customer Sales within five (5) calendardays following the discovery of the shortage. Customer accepts full financialresponsibility to assure good funds for cash or check transactions, and for anyfraud, toss, or charge backs on credit/debit cards processed at the Property.Customer may request guidance from NBO to assist in minimizing the likelihood ofcharge backs but Customer retains responsibility to ensure Property managementand personnel are adequately trained to minimize exposure. Customer shallreimburse NBO for any credit/debit card charge backs, returned checks, and anyassociated bank fees relating to Card sales at the Property within five (5)calendar days of notification of such event. Customer is not responsible foroverdrafts created by NBO's debiting of Customer's local mall depository bankaccount.

 

       **n.     **  **Credit/Debit CardFees.**Customer agrees to reimburse NBO for all credit/debit cardtransaction fees associated with the issuance of Cards to include all Cards soldat the Property by the Customer and/or those sold via the Internet or CallCenter by NBO. NBO shall invoice all associated credit/debit card transactionfees to Customer as described in **Addendum A, Item 10**.
** 

       o.        Extraneous CardUsage. Customer acknowledges and understands the Mall Gift Card is built onan open VISA platform, and that some portion of the value of some Cards will beredeemed outside the Property.

 

**       p.   **    **Bank Processing.**Customer and NBO acknowledge and agree that NBO is responsible for all bankfees/charges described in Addendum B associated with the processing of theCards, excluding the Credit/Debit Card Fees as described in Section In of thisAgreement, and the type of instrument used, as described in**Addendum B.**

 

**       q.        Consumer ConvenienceFees.**All Consumer Convenience Fees to be charged for Card purchases atthe time of****sale are described in **Addendum A, Item 11.**

 

**       r.       ****Internet and**Call**Center Charges.******Customer acknowledges and agrees with NBO feesassociated to the issuance, processing, handling and shipping of Internet orCall Center orders fulfilled by NBO, as described in **Addendum A, Item 12**.

 

    **   s.     **  **Termination Fees.**Customer acknowledges and agrees to Termination Fees as described in **AddendumA, Item 13.**
** 

2. RIGHTS ANDOBLIGATIONS OF NBO.**
 

      ** a.**       **The System.**Except as otherwise set forth in this Agreement, NBO shall assist theCustomer in the installation of the System at the Property as described in **Addendum A, Item 1** and

 
**Glimcher		Realty Trust*
* Page		3 of 16*
*10/14/2003*
 

 
CF         		
 

 

Customer shall usethe System exclusively for the issuance of Cards and for no other purposewhatsoever. The System and related software are designed to accept all forms ofpayment used for Card purchases to include cash, check and credit/debit cards.

 

     **  b**.        **CompetingInstallations.**Customer acknowledges and agrees that NBO has the rightto enter into agreements the same as, or similar to, this Agreement, with othercompanies who may own or manage competing retail establishments or malls in thegeographic vicinity of the Property. This may include the installation of an NBOSystem used for the purpose of the issuance of NBO gift certificates, Gift Cardsor other similar type instruments as those made available to Customer by NBO.

 

   **    c**.        **Maintenance.**Throughout the Term of this Agreement, NBO shall provide all necessary supportrequired to maintain operation of the System as described throughout thisAgreement and as described in **Addendum A, Item 3.**

 

**       d.       ****Training.**Throughout the term of this Agreement, NBO shall provide System operationtraining to Property management personnel as described in **Addendum A, Item 5.**Upon said NBO training, Customer will assure all Property employees involvedin the issuance of the Cards are adequately trained at all times.

 

     **  e.     **  **Advertising.**NBO may use Customer's name and/or the name of the Property In any sales andmarketing advertising or promotion of the relationship between the parties,without Customer approval; however, any mass media advertisements or promotionsusing Customers name, logos or proprietary trademarks of Customer shall requireprior Customer approval, which shall not be unreasonably withheld. NBO agreesthat dual or cross marketing opportunities with Customer may be available, andsaid opportunities will be mutually defined and agreed upon by both Parties byseparate written Agreement.

 

     **  f.   **    **Mall Gift Cards**;****All Gift Cards sold as per the terms of this Agreement can be used topurchase merchandise or services from any participating retail merchant withinthe Property. The Customer shall have no financial obligation under the MallGift Card program to make any payments to merchants, purchasers, or holders ofthe Mall Gift Cards. It is NBO's obligation to pay to` appropriate participatingmerchants all or a portion of the purchase price of merchandise or services,depending upon the amount of the purchase made and the balance of availablefunds to be deducted from the Card balance remaining at time of purchase. AllCards issued by the Customer or by NBO shall include Terms and Conditionscontaining some or all of the following language, which is incorporated intothis contract by reference:

"The Terms and Conditions are		a contract between the holder, NBO, the processing  network and the Customer.		When presented to a participating merchant for the purchase of merchandise and/or		services, NBO has the obligation to pay the merchant all or part of  the purchase price, to the		extent of the remaining value of the Mall Gift Card. The remaining value is equal to		the purchase price of the Mall Gift Card, less any previously used amounts, less any fees		or charges deducted from the card balance by NBO as detailed In the Terms and		Conditions accompanying the Card at time of purchase".

The followingdisclosures shall be prominently printed/displayed on the Mall Gift Card or theTerms and Conditions provided with each Gift Card purchased:
-  Mall Gift		Card is not redeemable for cash.
-  Subject to		Expiration except where prohibited by law.

**        g.    **   **Mall****Gift Cards and Packaging.**All information relating to Customerexpenses associated to Gift Card and Packaging is described in **Addendum A,Item 7.**

 

      ** h.        CardRedemption.**Merchant must accept VISA Credit or signature debit cards asa form of payment for merchandise or services in order to participate in theMall Gift Card program. NBO

 
**Glimcher		Realty Trust*
* Page		4 of 16*
*10/14/2003*
 

 
CF         		
 

 

shall have noobligation to Customer for Cards redeemed outside the Property.

 

**       i.    **  **Mall Gift CardPayments.**The Mall Gift Cards shall be in the form and of materialsspecified by NBO and associated processing partners as described in **AddendumA, Item 7**. All Cards purchased will include Terms and Conditions that applyto use of the Card, and upon use, Card Holder is acknowledging and accepting theTerms and Conditions disclosed. Cards may be used in whole or in part, forpurchasing merchandise or services, up to the amount of the purchase price oramount of available balance remaining on the Card at that time. NBO guaranteespayment to the merchant as per the terms of this Agreement, if Merchant followsthe redemption procedures provided by NBO and/or VISA USA. Such procedures shallbe governed by processing and/or Card issuer regulations.

 

**        j.  **    **Reporting.**Within twenty (20) days of the end of each month, NBO shall provide Customerwith a Property Gift Card report showing the volume of Mall Gift Cards issuedduring the preceding month.. The Property's Mall Gift Card report shall indicatethe entire volume of Mall Gift Cards issued, and shall have a summary of Cardsissued at the Property, via the Internet or through NBO's call center and willalso detail types of payments used. Additional reports and detail not providedby NBO as per the terms of this Agreement may be available to Customer at a feeas described in **Addendum A, Item 14.**

 

**        k.       ****Consumer ConvenienceFees.**NBO Consumer Convenience fees charged for Card purchases aredescribed in **Addendum A, Item 11**

 

**        l.       ****Internet andCall Center Charges.**NBO shall provide processing, fulfillment, handlingand shipping of all Card orders that are initiated through the Internet andNBO's call center as described in **Addendum A, item 12.**

 

**        m.      ****Unused Mall GiftCards.**NBO shall be responsible for and shall cause compliance with allexisting applicable abandoned property or escheat laws (the "Escheat Laws"). NBOshall charge Admin Fees as described in **Addendum A, Item 9**upon Cards andAccounts, except as prohibited by law. NBO shall and does hereby indemnifyCustomer and hold Customer harmless and, at Customer's option, will defend itfrom and against any and all claims, actions, costs, damages, expenses(including attorneys' and other professional fees), judgments, settlementpayments, fines and liabilities incurred or suffered by Customer in connectionwith any failure by NBO to account for and pay over to any governmentalauthority any amount which escheats to any such governmental authority or whichsuch governmental authority claims escheats to it in connection with theissuance of Mall Gift Cards. Customer shall notify NBC) of such claims Customerreceives from any such governmental authority. NBO shall have the right tocontest such claims, and Customer agrees to cooperate with and assist NBO, atNBO's expense, in minimizing and/or defending against such claims. All fundscorresponding to unused or unusable Cards (subject to compliance with allexisting applicable Escheat laws), Admin Fees, Expiration Fees, breakage and/orestimated breakage shall belong solely to and may be used by NBO as fees forservices upon issuance of the Card. NBO's obligations and rights pursuant tothis subsection shall survive any termination of this Agreement.

 

**        n.**       **Management ofDepository and Related Accounts.**Certain depository and other accountsshall be established by NBO as described in **Addendum B** attached hereto.

 

**        o.   **    **FinancialResponsibility.**NBO accepts full financial responsibility for thecollection of all funds associated with the issuance of Cards sold via theInternet or through NBO's call center (the "NBO Sales"). At the conclusion ofeach business day, NBC) shall ensure that the amounts associated with NBO Cardsales for that specific day are collected and deposited In the appropriateaccount(s) as per **Addendum B,**and that they correspond to the value ofsuch Cards issued for that specific day. In the event of a shortage, whetherdiscovered by Customer or NBO, NBO shall deposit the shortage amount relating toNBC) Sales within five (5) calendar days following the discovery of theshortage. NBO accepts full financial responsibility for fraud/charge backs forcredit/debit cards processed via the Internet and NBO's call center. NBO shallreimburse any credit/debit card charge-backs, returned checks, and anyassociated bank fees relating to Card sales via the Internet and NBO's callcenter

 
**Glimcher		Realty Trust*
* Page		5 of 16*
*10/14/2003*
 

 
CF         		
 

 

within five (5)calendar days of notification of such event.

 

**        p.**       **Billing.**NBOagrees that all bills or invoices to be issued by NBO to Customer shall beissued to Customer's address as shown in the first sentence of this Agreement,or such other address designated by customer in writing to NBO.

 

**        q.    **   **Insurance; Indemnity.**NBO shall indemnify Customer and save it harmless for, from and against anyand all claims, actions, damages, liabilities and expenses (including attorneys'and other professional fees) suffered by Customer in connection with: (i) damageto property or the environment suffered by third parties occasioned wholly or inpart by any gross negligent act or gross negligent omission of NBO, its agents,contractors, invitees or employees and (ii) the misappropriation or other lossof any funds held in any of the accounts described in **Addendum B**to theextent such misappropriation or other loss was occasioned by any gross negligentact or gross negligent omission of NBO, its agents, contractors or employees.This indemnity shall survive any termination of this Agreement with respect toany incident occurring during the Term. At all times on and after the date ofthis Agreement, NBO will carry and maintain, at its expense, a non-deductible(i) commercial general liability insurance policy, including insurance againstassumed or contractual liability under this Agreement to afford protection withrespect to property damage of not less than One Million Dollars ($1,000,000.00)per occurrence combined single limit and Two Million Dollars ($2,000,000.00)general aggregate; (ii) all-risks property and casualty insurance policy,including NBO employee theft, written at replacement cost value and withreplacement cost endorsement, covering all personal property of NBO located atthe Property, including without limitation, all elements of the System and (iii)if and to the extent required by law, worker's compensation insurance policy, orsimilar insurance in form and amounts required by law. Insurance maintained byNBO shall contain coverage for NBO employee theft, premises, transit, anddepositor's forgery with respect to money and securities with a limit of notless than One Million Dollars ($1,000,000.00). NBO and Customer agree that anyproceeds of the Policy relating to funds associated with the Customer's MailGift Cards shall be deposited into an account so as to cover Customer'soutstanding Mall Gift Cards. Commercial general liability and all risks propertyand casualty insurance policies evidencing such insurance shall benon-contributory. The Policy shall contain a provision by which the insureragrees that such policy shall not be canceled, materially changed or not renewedwithout at least thirty (30) days' advance notice to Customer at the Propertymanagement office and with a copy to the address listed in the first paragraph of this Agreement,Attention: Risk Manager, by certified mail, return receipt requested. A copy ofsuch policies, or certificates thereof, shall be delivered to Customer uponrequest. Neither Customer nor NBO shall be liable to the other Party or to anyinsurance company (by way of subrogation or otherwise) insuring the other partyfor any loss or damage to any building, structure or other tangible property orany resulting loss of income or losses under worker's compensation laws eventhough such loss or damage might have been occasioned by the negligence of suchParty, its agents or employees. The provisions of this paragraph shall not limitthe indemnification for liability to third parties contained in the precedingparagraph.

 

    **    r.  **     **Laws Compliance.**NBO shall use its best efforts to maintain compliance of all federal, state,regional, county, municipal and other governmental statutes, laws, rules,orders, regulations and ordinances applicable to the Customers Mall Gift CardProgram, including, but not limited to, applicable escheat statutes.

 

**3. AGREEMENT TERM;TERMINATION.**

 

**        a.       ****Term.** The"Term" of this Agreement shall commence as of the Effective Date and shallterminate three (3) years from the Effective Date, unless earlierterminated in accordance with the provisions of Section 3b or Section 5 below.Any extension or Amendments to this Agreement shall only be effective uponwritten agreement of the Parties.

 

       ** b.**       **Customer EarlyTermination Right.**Not withstanding anything to the contrary set forthherein, NBO and Customer hereby agree that Customer shall the have the right,not sooner than January 1, 2005, to be exercised in Customer's sole discretion,to terminate this Agreement ninety (90)

 
**Glimcher		Realty Trust*
* Page		6 of 16*
*10/14/2003*
 

 
CF         		
 

 

days after deliveryof written notice to NBO of such intent to terminate. Such early termination byCustomer shall be in accordance with the provisions of **Addendum A, Item 13.**

 

**       c.       ****Termination.**Upon the termination of this Agreement, NBO and Customer shall no longer issueMall Gift Cards for the Property through the System. Outstanding Cards incirculation shall continue to be processed normally per Card Association rules.NBO shall continue to process previously issued Mall Gift Cards until theexpiration date of the last Mall Gift Card issued. Fees associated with theearly termination of this Agreement are described in **Addendum A, Item 13**.Customer shall account for and return to NBO, at Customer expense, all unusedCard and Packaging stock and upon receipt by NBO, all returned stock that isspecific to Customer's Property will be destroyed. In any event, NBO shallcontinue to collect all interest, fees and proceeds from the Card program untilall issued Cards expire or until all Card Accounts have a zero balance.**4. ASSIGNMENT.

 

       a.        Assignment byCustomer.Customer may delegate, assign, transfer or encumber itsrights, duties, interests or obligations under this Agreement to any subsidiaryor affiliate of Customer or to any person or entity which acquires (TheAcquirer") the Property, with no obligation to obtain NBO's consent thereto . Nosuch transfer or assignment of this Agreement shall constitute a termination ofthis Agreement. All terms and covenants of this Agreement shall survive suchassignment and are enforceable upon the Acquirer. This Agreement is personal toCustomer and NBO and is not binding upon or run with the Property. In the eventCustomer transfers its interest in any portion of the Property to a person orentity that is not a subsidiary or affiliate of Customer, this Agreement shallautomatically terminate as to such affected Property.

 

       **b.   **    **Assignment by NBO.**NBO may delegate, assign, transfer or encumber its rights, duties, interestsor obligations under this Agreement (each an "Assignment") with writtenauthorization from Customer. Customer agrees that it will not unreasonablywithhold its consent to a proposed Assignment, provided the proposed transferee:(i) possesses qualifications equivalent to those of NBO to operate the businessoperated by NBO and shall have demonstrated recognized experience insuccessfully operating such a business, including, without limitation,experience in successfully operating a similar quality business in a first-classshopping center; (ii) will not adversely affect the quality and type of businessoperation which NBO has conducted theretofore; (iii) will continue to operatethe business in the same manner as NBO and pursuant to all provisions of thisAgreement; and (iv) assumes in writing, in a form acceptable to Customer, all ofNBO's obligations hereunder, and NBO shall provide Customer with a copy of suchdocument.
** 

5. DEFAULT ANDTERMINATION. The following events shall constitute an "Event of Default":

 

    **   a.        Bankruptcy.**The adjudication of either Party as being bankrupt, insolvent or unable to payits debts and obligations as they become due, or if either Party places any ofits property or assets in liquidation for the purpose of meeting claims of itscreditors, or a trustee or receiver is appointed. If any such adjudication isinvoluntary, it shall not be an Event of Default hereunder if such Party isseeking to have the adjudication dismissed and in fact causes it to be dismissedwithin sixty (60) days thereof.

 

      ** b.**        **Failure to Perform.**The failure of either Party to perform or fulfill at the time and in themanner herein provided any material duty, obligation or condition required to beperformed or fulfilled by that Party hereunder; provided, however, that thenon-performing Party shall have been given ten (10) days written notice if suchnon-performance is the non-payment of money and thirty (30) days' prior writtennotice for any other non-performance, specifying the non-performance or non-fulfillment that it is charged with having committed and shall have failed tocure such non-performance or non-fulfillment within such ten (10) day or thirty(30) day period, as the case may be; provided, however, in the event of anon-monetary non-performance or non-fulfillment, there shall not be an Event ofDefault hereunder if the defaulting Party shall be diligently pursuing thecuring of such non- performance and in fact completes the cure within sixty (60)days from the date of the notice.

 
**Glimcher		Realty Trust*
* Page		7 of 16*
*10/14/2003*
 

 
CF         		
 

 

Upon the occurrenceof an Event of Default, the non-defaulting Party shall have the right toterminate this Agreement upon thirty (30) days written notice to the otherParty. If this Agreement is terminated pursuant to this Section, the defaultingParty nevertheless shall remain liable for all damages which may be due orsustained by the non-defaulting Party, including, but not limited to, reasonableattorneys' fees, costs and expenses incurred by the non-defaulting Party inpursuit of its remedies hereunder, as well as Termination Fees as described in**Addendum A, Item 13**.
** 

6. MISCELLANEOUSPROVISIONS.

 **
      ** a. **      **ApplicableLaw**. All matters pertaining to the validity, performance, constructionor effect of this Agreement, and the legal relations between the Parties, shallbe governed by and construed in accordance with the laws of the State ofMaryland applicable to agreements made and wholly to be performed in said Statewithout regard to principles of conflicts of law. Any disputes arising underthis Agreement or the transactions contemplated hereunder shall be resolved inthe state and federal courts residing in Columbus, Ohio.

 

**        b.  **     **EntireAgreement.**This Agreement constitutes the entire agreement andunderstanding of the Parties with respect to the subject matter hereof, andsupersedes all prior agreements, arrangements and understandings related to thesubject matter**hereof. No representation, promise, inducement orstatement of intention has been made by either of the Parties that is notembodied in this Agreement, and neither of the Parties shall be bound by or beliable for any alleged representation, promise, inducement or statement ofintention that is not specifically set forth in or referred toherein.

 

       **c. **      **No Joint****Venture.******NBO and Customer are independent contractors. Noagency, partnership, joint venture or employee-employer relationship is intendedor created by this Agreement, and neither party shall hold itself out in amanner that would indicate any such relationship exists in any matter, includingbut not limited to, advertising.

 

**        d.   **    **Notice.**Any notice or other communication required or permitted to be given hereundershall be effective upon receipt by the intended recipient at the addressindicated in the introductory paragraph above (or such other address as eitherParty shall provide to the other Party by one of the means set forth hereinbelow). Receipt shall be deemed to have occurred upon the earlier of (a) thedate of actual receipt by the intended Party by registered mail, (b) five (5)days after such notice is deposited in the United States mail, certified orregistered, postage prepaid and properly addressed, (c) the date such notice issent to the other Party by telecopy (with receipt confirmation), provided suchnotice is promptly provided to the other Party by United States mail, certifiedor registered, postage prepaid and properly addressed, or (d) one (1) businessday after such notice is deposited with a recognized overnight courier servicewith instructions for overnight delivery.

 

**        e.   **    **ForceMajeure.**Neither Party shall be responsible to the other Party for non-performance or delay in performance of any of the terms, duties, obligations orconditions contained in this Agreement due to acts of God, acts of governments,wars, riots, strikes, accidents or other causes beyond the control of theParties. In no event shall financial inability excuse a Party's performancehereunder.

 

     **  f. **      **Confidentiality.**The Parties agree that the contents and existence ofthis Agreement shall be considered confidential and shall not be disclosed toany third person or entity by either Party except with the prior writtenapproval of the other Party or upon the order of a court of competentjurisdiction.

 

     **  g.    **   **Severability.**In the event that any provision hereof shall be deemed inviolation of any applicable law, rule or regulation, or held to be invalid byany court in which this Agreement shall be interpreted, the violation orinvalidity of any particular provision hereof shall not be deemed to affect anyother provision hereof, but this Agreement shall be thereafter interpreted asthough the particular

 
**Glimcher		Realty Trust*
* Page		8 of 16*
*10/14/2003*
 

 
CF         		
 

 

provision so held tobe in violation or invalid were not contained herein.

 

      ** h.        Miscellaneous.**The above Recitals and all Attachments attached heretoare deemed to have been incorporated herein by reference. Notwithstanding anyrule or maxim of construction to the contrary, any ambiguity or uncertainty inthis Agreement shall not be construed against either Party based upon authorshipof any of the provisions hereof.

 

        IN WITNESS WHEREOF,the Parties have entered into this Agreement effective as of the Effective Date.

 

 

**CUSTOMER: **

**NBOSystems, Inc.:**

Glimcher PropertiesLimited Partnership  

  

  

By: /s/ William G.Cornely   

By: /s/ Christopher Foley

Name  

ChristopherFoley

Exec V.P.   

Chief Financial Officer

Title  

Date: 10/21/03   

Date: 10/31/03

 
**Glimcher		Realty Trust*
* Page		9 of 16*
*10/14/2003*
 

 
CF         		
 

 
**ADDENDUM A**
 

THIS ADDENDUM IS APART OF THE CONTRACT SERVICES AGREEMENT DATED AS OF THE EFFECTIVE DATE FIRSTREFERENCED HEREIN BY AND BETWEEN NBO SYSTEMS, INC. ("NBO") AND **GLIMCHER PROPERTIES LIMITED PARTNERSHIP,**("CUSTOMER").
**        1.       UTILITY ACCESSand SERVICE.
 

        a.        Customer shallensure the power specification is available at the Counter Top Unit(s) ("CTU")location(s) prior to the installation of the System hardware. NBO shall not shipSystem hardware to Property until such utility access and servicespecifications, as described in this paragraph, are completed by Customer andconfirmed by NBO. Anticipated completion date of said specifications andservices by Customer is __________________________, 2003.

 

        b.        Customer shallprovide a site installation plan outlining specific locations for placement,power, and connectivity to the CTU and shall provide this to NBO prior toinstallation.

 

        c.        The powerrequirement for installation at each CTU location is a dedicated 110 Volt,15-amp circuit; either wall or floor mounted, and must be within five feet ofthe installation location.

 

        d.        The CTU requiresinstallation of a Cat 5E cable between the CTU location and thehub/internet/frame relay connection location and cannot exceed a maximum ofthree hundred (300) cable feet.

 

        e.        Customer shallensure that all System hardware to be stored in an enclosed space hasappropriate ventilation.

 

        f.        Customer shallensure the System hardware is installed in a secure location.

        

        g.        The Customer isresponsible for the initial installation and on-going monthly costs of theSystem connectivity to NBO.

 

        h.        Each CTU must havetelecommunication in the form of Frame Relay, DSL, or other dedicated line(meaning "always on" Internet connection). If the Internet connection is sharedwith other users, Customer may be required to increase bandwidth to ensurereliable communication between each CTU location and NBO. Dial-up connections donot provide reliable service and are not recommended by NBO.

 

        i.        Customer shallestablish an Internet account with a local Internet Services Provider ("ISP"),and shall provide the account name, password and local contact number of saidaccount to NBO upon acquisition. Customer is responsible for all costsassociated with the installation, the connection and the Internet account at thelocal ISP. Customer may contract this ISP connection through NBO on a monthlybasis [*** * ***], payable by Customer to NBO upon receipt ofinvoice from NBO.

 

        j.        Remote locationsmay not provide required local Points of Presence, and in such cases where NBOincurs long distance charges, Customer shall reimburse NBO for such charges,plus a processing fee, upon receipt of invoice from NBO.
** 

2. SYSTEMHARDWARE.
 

Customer shall pay.[*** * ***], except where Termination Fees apply in accordance with**Addendum A, Section 13**, for each CTU to be installed at the Property. TheSystem hardware remains the property of NBO.

 
**Glimcher		Realty Trust*
* Page		10 of 16*
*10/14/2003*
 

 
CF         		
 

 
**3. INSTALLATIONand MAINTENANCE.
 

        NBO shall provide all necessarytechnical services required, excluding remodeling costs or other requiredconstruction or modifications, to install the CTU at the designated location.During the Term hereof, NBO shall use its best efforts to provide for themaintenance and repair of System hardware (for all events not as a result ofCustomer negligence or damage) within twenty-four (24) hours of Customer'srequest therefore, subject to NBO designated service organization availability.Upon the expiration or earlier termination of this agreement, all maintenance,repair and removal expenses of the System hardware are the responsibility of theCustomer and any NBO assistance for such services will be invoiced to Customerand must be paid upon receipt of invoice from NBO.
** 

4. INTERNET/WEBSITE.
 

        Throughout the termof this Agreement, programming costs, set-up fees and on-going monthly softwarefees required to insert and maintain the NBO shopping cart on Customer'swebsite, [*** * * ]**Customer is responsible for providing anaccessible website designed to accommodate HTML frames and Cascading StyleSheets prior to shopping cart integration.
** 

5. TRAINING ANDPROPERTY SET-UP.
 

        All activities andexpenses associated with a one-time NBO on-site training of Property personnel,creation of the Property database and the building of the required retailmerchant inclusion tables are provided for the cost of [*** * * ]**payable by customer. All additional supplemental on-site training sessions areavailable to Customer at Customers expense, unless otherwise agreed upon inwriting.
** 

6. SOFTWARELICENSING FEE.
 

        The use of NBO proprietary software for the System,including maintenance and upgrades, is provided at [*** * * ]**toCustomer.** 

7. MALL GIFT CARDSAND PACKAGING.
 

        a.        NBO will provide astandard NBO Mall Gift Card and Packaging Design to Customer, as defined in thisparagraph 7, at [*** * * ]**to Customer. NBO retains all rights tochange the standard NBO Mall Gift Card and Packaging Design from time to time asmay be required. Any customized designs requested by Customer will be billed toCustomer as defined in 7.f. and 7.g. below.

 

        b.        Cards shall be ofstandard credit card size and thickness shall include no more than 4 colors onthe face of the card, 1 color on the back of the card, a magnetic stripe andsignature panel on the back and must conform to VISA specifications.

 

        c.       A Card Carrier("Carrier" or "Packaging") shall be supplied with each Card sold, at the time ofthe sale, and shall include the Terms and Conditions of the program.

 

        d.        Customer agrees topay for all Card and Card Carrier shipping and handling charges, which must bepaid within thirty (30) days following receipt of invoice from NBO. Shipping andhandling charges are based on actual Fed-Ex (or similar traceable deliveryservices) rates from Salt Lake City, Utah to individual properties and will varyby class of service, size and weight.

 

        e.        Subject to Section2.q of the Agreement, Customer has full responsibility, financial and otherwise,for all losses associated to lost, stolen or fraudulent activity of Cards andCarriers entrusted to Customer.

 

        f.        If Customerchooses one of the NBO standard gift card designs, there will not be a designfee. If Customer requests a custom Card design, a design fee of not less than [*** * * ]**will be paid to NBO before any design work is initiated by NBO.Complex designs may incur an additional fee, and any additional fee in

 
**Glimcher		Realty Trust*
* Page		11 of 16*
*10/14/2003*
 

 
CF         		
 

 

excess ofthe [*** * * ]**will be agreed upon between the parties beforeadditional expenses are incurred. Design fees will apply each time a Customdesign is changed.

 

        g.        If Customerchooses to use a custom Card, Customer agrees to reimburse NBO for thedifference between the allowable cost of a standard design and the cost of thecustom Card design. Any price differences between standard Cards and customCards will be agreed upon in writing prior to card production, and Customer willreimburse NBO within thirty (30) days following receipt of invoice.

 

        h.        NBO shall beresponsible for monitoring Customer Card sales at the Properties andreplenishment of Card inventory to ensure Customer has adequate Card inventoryon hand at all times and receives said Card inventory in a timely manner. NBOshall use best efforts to avoid overstock conditions at the Properties. NBOshall strive to maintain no more than six (6) weeks inventory on hand at theProperty at any time. Customer hereby indemnifies NBO for significantfluctuations in Card inventory due to unforeseen events, or events out of thecontrol of Customer and/or NBO.

 

        i.        NBO herebyrepresents and warrants that all cards delivered to Customer for sale at theProperties shall be delivered with a minimum of thirteen (13) months, and amaximum of eighteen (18) months remaining until the stated expiration date onthe face of the Card. NBO hereby further represents, due to the functionality ofNBO proprietary software, that no Card shall have the ability to be activatedwith less than twelve (12) months remaining to the stated expiration date listedon the face of the Card.

 

        j.        Customer shall besolely responsible for the physical Card inventory for all circumstanceswhatsoever after shipment from HBO. Customer shall maintain a FIFO (first in,first out) inventory turnover method for Cards after receipt from NBO, subjectto expiration conditions as defined in this Addendum Section 9.c.

 

        k.        The minimum Cardface value denomination sold by Customer or NBO shall be [*** * * ] [ * * *]**dollars unless mutually agreed upon in writing by NBO and Customer.
** 

8. PROPERTY ANNUALSALES INCENTIVE VOLUME {PASIV).
 

Customer hasrepresented to NBO that the Property Annual Sales Incentive Volume (PASIV) to beused as the basis for certain economic conditions stated herein is [*** * *]**in Card face value sold per year. Based on this representation byCustomer, NBO has agreed to pay Customer the following rebate on all Cards soldat the Property by Customer, and all Cards sold by NBO via the Internet and CallCenter:

 

        1.        If the PASIVreaches or exceeds [*** * * ]**in Card face value sold, NBO willrebate an amount equal to [*** * * ]**per Card on all Cards sold.

 

        2.        If the PASIV isbelow [*** * * ]**in Card face value sold, the following rebates orfees will apply:
**[ * * * ]

The dates used indetermining the PASIV will be on an annual calendar basis (January 1 throughDecember 31). Any partial year Card sales will be paid a rebate based on theprojected annualized volume obtained during the said partial year per thefollowing example calculation. The calculation of

 
**Glimcher		Realty Trust*
* Page		12 of 16*
*10/14/2003*
 

 
CF         		
 

 

projected annualizedvolume for partial year sales will utilize NBO historical monthly salespercentages as follows:
**[ * * * ]**
The PASIVcalculations will not include any Cards returned, voided, refunded, etc.

 

All Rebates are to bepaid [*** * * th * * * ]**
 

Based on the PASIVrepresented above, NBO shall pay the fees associated to the Card Initial Loadand Activation Fee (" ILAF") and the Card Account on File Fee ("AFF") on allCards sold by Customer or by NBO.
** 

9. ADMINISTRATIVE(ADMIN) FEES AND EXPIRATION TERMS.
 

        a.        Beginning theseventh month from date of Card purchase, and every month thereafter, all Cardsor Mall Gift Card Accounts ("Accounts") will be assessed a non-refundable AdminFee of $2.50 per Card/Account until such time that the Card/Account balance isZero or until Expiration of the Card, as disclosed in the Terms and Conditions(except where prohibited by law). No Administrative Fee shall be assessed duringthe first 6 months.

 

        b.        The Cardexpiration date is determined at the time of the Card encoding process and willbe indicated on the face of each Card. The Card will expire on that date,however, the associated Account mayor may not, as determined by applicable laws.

 

        c.        Cards shall expireno more than eighteen (18) months from the date of Account creation and shallnot be extended. Cards that have less than one (1) year remaining beforeexpiration cannot be sold by Customer or NBO, under any conditions whatsoever.NBO hereby represents, due to the functionality of NBO proprietary software,that no Card shall have the ability to be activated with less than twelve (12)months remaining to the stated expiration date listed on the face of the Card.All costs associated with expired, obsolete and un-sellable Cards are theresponsibility of Customer,

 
**Glimcher		Realty Trust*
* Page		13 of 16*
*10/14/2003*
 

 
CF         		
 

 

excluding Cardsdelivered to Customer with less than twelve (12) months to the stated expirationdate listed on the face of the Card. In such exclusionary case, Customer shallreturn said un-sellable Cards to NBO at NBO expense. Otherwise, expired,obsolete or un-sellable Cards (not as a result of NBO fault) shall be returnedto NBO at Customer expense and each Card shall incur a fee of [*** * * ]**** 

10. CREDIT/DEBITCARD FEES.
 

Customer shallreimburse NBO for all credit/debit card fees, transaction fees, and merchantprocessing fees at a rate of [*** * * ]**of all Card purchasetransactions. Said fees are payable within thirty (30) days following Customerreceipt of invoice from NBO. This fee covers the actual transaction cost as wellas other related NBO expenses such as costs of accounting for and processing ofcredit/debit cards, related credit/debit card charge back expenses, duplicatereports, research, special processing fees, etc. NBO reserves the right toreview Customer transaction fees annually and in doing so, also reserves theright to adjust this rate as necessary. Customer may not process TelephoneOrders or Mail Orders through the CTU. The above rate applies to card presenttransaction rates, and additional fees will apply if other transaction types areprocessed through the CTU.
** 

11. CONSUMERCONVENIENCE FEES.
 

Customer and NBOagree to the following Convenience Fee and Revenue Sharing, structure, to becharged at the time of sale. (Customer may waive Convenience Fee for sales atthe Property):

 

        a.       [*** * * ]**
 

        b.        Revenue Share onConsumer Convenience Fees:
**[ * * *]****12. FULFILLMENTSHIPPING CHARGES.
 

Competitive Shippingand Handling fees associated with Internet and Call Center orders will becharged to Consumers. NBO shall set the rates and will notify Customer of ratechanges subject to Customer approval, which shall not be unreasonably withheld.As of the date of this contract, the following shipping methods and rates areoffered:

 

US Mail:[ *** * ***
Federal ExpressSaver: [*** * * ]**
Federal Express 2"dDay: [*** * * ]**
Federal ExpressOvernight: [*** * * ]**** 

13. TERMINATIONFEES.
 

If Customerterminates this Agreement prior to the end of the Term, other than NBO defaultper paragraph 5 (b) of this Agreement, Customer agrees to pay NBO the followingearly termination fees:

 

        a.        Any equipment orSystem hardware not owned by Customer will incur a fee of [*** * * ]**per System per month for each month remaining on the initial term of theContract Services Agreement. In addition, Customer will pay NBO any expensesincurred by NBO for items such as, but not limited to, productioncost of the Cards, warehousing of Cards, Shipping and Handling of Cards, unusedMarketing collateral material, etc. Said fees shall be calculated as the numberof unused Cards produced for Customer multiplied by [*** * * ]**perunused Card. All Termination fees are to be paid to NBO no later than 30 daysafter the Property has removed the System due to early Termination of theAgreement, and will incur a penalty of [*** * * ]**annualizedinterest per month until paid in full.

 
**Glimcher		Realty Trust*
* Page		14 of 16*
*10/14/2003*
 

 
CF         		
 

 
**14. REPORTINGFEES.
 

If Customer requestsany additional reports of any kind, other than those described in 2(j) of thisAgreement, the reports will be made available to Customer at a reasonable costto be agreed upon at the time of the request. If Customer requests suchadditional reports, NBO will provide its best efforts to fulfill the request asquickly and efficiently as reasonably possible. Customer must pay all reasonableassociated reporting expenses incurred by NBO upon receipt of invoice from NBO.
** 

15. SAS NO. 70COMPLIANCE.
 

NBO hereby representsand warrants to Customer that it shall deliver to Customer annually withinninety (90) days following the end of NBO's fiscal year, currently March 31, aSAS No. 70 report. Notwithstanding anything to the contrary set forth herein,NBO shall pay all fees incurred in connection with complying with and issuingsaid SAS No. 70 report as stated herein. Customer shall pay all reasonable fees,to be mutually agreed upon by the Parties, incurred in connection with NBOissuing an SAS No. 70 report requested by Customer outside the normal, annualreport provided by NBO as represented herein.
** 

16. CUSTOMER AUDITRIGHT.
 

Customer shall havethe right, at any time upon delivery of [*** * * ]**prior writtennotice of such election, to audit N80/Customer statements pertaining to the MallGift Card Program as defined in this Agreement. Such audit shall take place atNBO headquarters in Salt Lake City, Utah at Customer expense. In the event suchan audit discloses an overstatement of the actual amounts charged to Customer byNBO, NBO shall immediately pay Customer all such excess amounts together withinterest thereon at [*** * * ]**per annum. In the event suchoverstatement is greater than [*** * * ]**of the actual amount ofallowable fees per the terms of this Agreement, NBO shall reimburse Customer forthe reasonable costs of such audit. In the event such an audit discloses anunderstatement of the actual amounts charged to Customer by NBO, Customer shallimmediately pay NBO all such shortage amounts together with interest thereon at[*** * * ]**per annum.

 
**Glimcher		Realty Trust*
* Page		15 of 16*
*10/14/2003*
 

 
CF         		
 

 
**ADDENDUM B

 

BANKING TERMS - VISAPLATFORM**
 

ATTACHED TO ANDFORMING A PART OF THE CONTRACT SERVICES AGREEMENT DATED AS OF THE EFFECTIVE DATEFIRST REFERENCED HEREIN BY AND BETWEEN NBO SYSTEMS, INC. ("NBO") AND **GLIMCHERPROPERTIES LIMITED PARTNERSHIP** , ("CUSTOMER").

 

The followingdescribed procedures will be implemented with ,the financialinstitutions after the Agreement is signed by both parties and prior to theissuance of any Mall Gift Cards by NBO.

 

        1.       **DepositoryAccount.** NBO shall establish a joint bank account with the Customer (the"Depository Account") at a bank at or near the Property (the "Local Bank") forthe deposit of all receipts, whether cash, check, proceeds of credit card ordebit card transactions, or other receipts from the sale of Mall Gift Cards atthe Property. The funds deposited into the Depository Account shall be used fortransfer of funds to accounts described below, refunds on credit/debit cardsales, charge backs on credit/debit card sales, checks returned by the bank,charges imposed by the Local Bank in connection with the Depository Account, andmerchant charges associated with the credit/debit card sales. NBO shall transferamounts deposited to the Depository Account (except for established reserves tocover other items to be disbursed from the Depository Account) on a regularbasis. NBO will pay for this account. Customer will be invoiced for any specialprocessing or bank fees for returned items related to this account.

 

        2.       **RequiredAccounts.** NBO shall establish any and all other bank accounts requiredto operate the Gift Card Program. Funds in said bank accounts shall be used foroutstanding Card liability, distribution of Admin Fee and Expiration Feerevenue, and all other fees and income earned by NBO per this Agreement. Fundsshall not be commingled with NBO operating funds.

 

        3.       **AccountFunds.** Except for funds which are earned by NBO in the form of AdminFees, Expiration Fees, Breakage, Estimated Breakage, Account fees, interest,dividends and other income as set forth herein, all funds held in the accountsestablished in this Addendum B shall be held for the benefit of consumers andthe merchants who are entitled to payment in connection with the use of MallGift Cards. Funds are not the property of Customer and shall be paid to NBO, theConsumer, or Merchants, as applicable, and upon redemption.

 

       4.       **Fees and Interest.** All feescharged by the banks associated with the accounts in Item 2 above [*** * *]**All income, interest, dividends, and other amounts earned on all ofthe accounts described above shall be the sole property of NBO and will bedistributed to NBO regularly. NBO shall receive Administration fees andExpiration revenue as described in **Addendum A, Item 9.**

 
**Glimcher		Realty Trust*
* Page		16 of 16*
*10/14/2003*
 

 
CF         ************************************************************