Exhibit 10.11

 

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.

 

 

ODFI OriginatorAgreement 

[FINAL]

 

The ODFI OriginatorAgreement (the "Agreement") dated as of March **19_,**2004 and is betweenNBO Systems, Inc. whose address is 3676 W. California Ave. Bldg. D, Salt LakeCity, Utah 84104 ("Client") and BANKFIRST, whose address is 2600 W. 49thStreet, Sioux Falls, South Dakota 57105 ("Bank").

 

RECITALS

 

(a) Bank is a memberbank of the Federal Reserve Bank of Minneapolis and is a member of the UpperMidwest Automated Clearing House Association ("UMACHA"). Bank is in the businessof establishing Settlement Accounts for the settlement of Automated ClearingHouse ("ACH") transactions.

 

(b) Client wishes toinitiate Debit and Credit Entries by means of the Automated Clearing HouseNetwork pursuant to the terms of this Agreement and the rules of NACHA (the"Rules"), and the Bank is willing to act as an Originating Depository FinancialInstitution ("ODFI") with respect to such Entries.

 

NOW, THEREFORE, in considerationof the mutual covenants and conditions hereinafter set forth, the partieshereto, intending to be legally bound, agree as follows:

 

ARTICLE I -DEFINITIONS

 

SECTION 1.1 Definitions

 

Except as otherwisespecifically indicated, the following terms shall have the following meanings inthis Agreement (such meanings to be equally applicable to both the singular andplural forms of the terms defined):

 

(a) "Entry" or "Entries" means therecording of a debit and/or a credit of a transaction.

 

(b) "GovernmentalRequirements" means collectively all statutes, codes, ordinances, laws,regulations, Rules, orders and decrees of all governmental authorities(including without limitation federal, state and local governments, governmentalagencies and quasi-governmental agencies).

 

(c) "Mark" means theservice marks and trademarks of a System and Bank, including but not limited to,the names and other distinctive marks or logos, which identify a System andBank.

 

(d) "Membership" means the membershipin a System and licensing rights

 

1

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thereto obtained by Bank.

 

(e) "Originator" means the party thatcreates an ACH item to be processed in the ACH system.

 

(f) "ProcessingServices" means those services, which are necessary to process an Entry inaccordance with the Rules of any System and Regulatory Authority. Such servicesshall include but not be limited to: transaction authorization, processing,clearing and Settlement, System access, customer dispute resolution, Systemcompliance, regulatory compliance, security and fraud control, and activityreporting.

 

(g) "Regulation E" means (i) the regulations, all amendments thereto andofficial interpretations thereof (12 C.F.R. Part 205) issued by the Board ofGovernors of the Federal Reserve System implementing Title IX (Electronic FundsTransfer Act) of the Consumer Credit Protection Act as amended (15 U.S.C. 1693et. seq.), and (ii) the Electronic Funds Transfer Act and any amendmentsthereto.

 

(h) "Regulatory Authority" means, as the context requires, any System; the Stateof South Dakota; the Federal Deposit Insurance Corporation; the Federal ReserveBoard; and any Federal or state agency having jurisdiction over Bank or Client.

 

(i) "Rules" means the by-laws and operating rules of any System, the publishedregulations of any Regulatory Authority including NACHA, any Federal or Statestatutes, and the published policies and procedures of Bank, as promulgated byBank's Board of Directors in good faith to ensure the continued safety andsoundness of Bank.

 

(j) "Settlement" means the movement of funds between Bank and System members inaccordance with the Rules.

 

(k) "System" means Automated Clearing House (ACH), and/or any other card networksystem of transmitting Items and Settlement thereof.

 

ARTICLE II - GENERALDESCRIPTION OF PROGRAMS

 

SECTION 2.1 Purpose

 

The purpose of this Agreement is to offer ACH processing functionality, as analternative to traditional transfer of funds by credit cards, cash and paperchecks. It is designed to offer consumers a convenient and secure paymentmechanism.

 

ARTICLE III - DUTIESOF CLIENT

 

Client - BANKFIRST                                                                                            2

3/19/2004

 

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SECTION 3.1 Marketing

 

Client shall, from time to time, promote and market ACH functionality toprospective customers. Except as may be agreed by the parties from time to timeduring the term of this Agreement, each party shall be responsible for its owncosts and expenses associated with marketing of any ACH functionality under-thisAgreement. Client has no authority to use any Marks unless Bank is appropriatelyidentified. Bank shall have the right to approve or disapprove any marketingmaterials bearing Bank's name or any of its Marks prior to distribution orbroadcast of such materials. Bank shall not delay or withhold its approvalunreasonably.

 

SECTION 3.2 ACH File Transmission

 

Bank reserves the right to refuse service to any consumer and or Transactionthat, in its opinion, presents excessive financial or reputation risk. Clientshall transmit valid Standard Entry Class Codes CIE, COR, PPD, TEL, and WEBdebit and credit Entries to Bank in compliance with the formatting/security andother requirements set forth in Schedule B. The total dollar amount of Entriestransmitted by Client to Bank on any one day shall not exceed $500,000.00. On aquarterly basis during the term of this Agreement Bank and Client shall reviewthe maximum dollar limit for the file of Entries and Bank shall, within two (2)business days of such determination to adjust the system to reflect the change.Both parties agree to act in good faith in determining a mutually agreed todollar amount.

 

The limits in Section 3.2 shall apply to all Entries with the exception of theVISA Gift Card Program funding during the December calendar month. Bank andClient shall agree to a temporary increase in the maximum Entry directlyresulting from Gift Card sales. In the event the temporary limit is insufficientto allow total funding, Bank will in its sole discretion review and approve ormake the appropriate recommendation and advise Client accordingly.

 

SECTION 3.3 Accesses to ProgramDocuments and Information

 

Bank shall have access to all information and documents it reasonably requestsconcerning the Client's processing and reporting of ACH Transactions in order tooffer ACH connectivity.

 

SECTION 3.4 Audit

 

Bank shall have the right, during the term of this Agreement, upon reasonablenotice and during normal business hours, to conduct a review of the books andrecords of the Client to determine or to verify the compliance of the Clientwith its obligations under this Agreement, including the payment of fees.

 

SECTION 3.5 Reserve Account

 

 

Client - BANKFIRST                                                                                            3

3/19/2004

 

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Client shall own and maintain a demand deposit account ("Reserve Account") atthe Bank. The Bank in its sole discretion may require Client to maintain at aminimum a balance in the Reserve Account equal to one days funding load requestof the highest mall and/or merchant. Client is prohibited from sending CreditEntries relative to the VISA Gift Card Program. Client shall at all timesmaintain sufficient available funds in the Reserve Account to pay the amount ofall Entries against Client, returned or reversed Entries, adjustment Entries,fees, and other amounts which Client is obligated to pay Bank under thisAgreement. Bank in its sole discretion may require Client to have sufficientavailable funds in the Reserve Account to cover the amount of a credit Entryprior to Bank's transmittal of such Entry to an ACH. In the absence of such arequirement, Client shall be obligated to have such available funds in theReserve Account on the Settlement Date with respect to such Entry. Bank in itssole discretion may defer any credit to the Reserve Account with respect to adebit Entry until it has received final settlement for such Entry. Any creditprovided prior to that time shall be provisional and Bank shall have the rightto immediate payment by Client upon Bank's receipt of notice that finalsettlement has not occurred. In addition, Bank shall have the right to paymentby Client of the amount of any returned or rejected Entry for which Client haspreviously received credit upon its receipt by Bank. Bank may, without priornotice or demand, obtain payment of any amount due and payable to it by Clientby initiating an ACH debit Entry against the Reserve Account, and may initiatean ACH credit Entry to the Reserve Account for any amount to which Client isentitled. If there are insufficient funds available in the Reserve Account topay amounts Client owes Bank under the Agreement, Client shall pay any amountsdue immediately upon demand, and Client agrees that Bank may debit any accountmaintained by Client with Bank or that Bank may set off against any amount itowes to Client, in order to obtain payment of Client's obligations. In its solediscretion, Bank has the right to suspend or terminate this Agreement if thereare insufficient funds to cover transactions/fees pursuant to Section 9.2.

 

Entries transmitted by Bank or credited to Client Reserve Account maintainedwith Bank will be reflected on Client's periodic statement issued by Bank withrespect to the Reserve Account pursuant to the Agreement between Bank andClient. Client agrees to notify Bank promptly of any discrepancy betweenClient's records and the information shown on any periodic statement. If Clientfails to notify Bank of any discrepancy within sixty (60) days of receipt of aperiodic statement containing such information for Consumer transaction or five(5) business days for a corporate transaction, Client agrees that Bank shall notbe liable for any other losses resulting form Client's failure to give suchnotice or any loss of interest or any interest equivalent with respect to anEntry shown on such periodic statement. If Client fails to notify Bank of anysuch discrepancy within ninety (90) days of receipt of such periodic statement,Client shall be precluded from asserting such discrepancy against Bank.

 

SECTION 3.6 Monitoring

 

Client shall be responsible to monitor the ACH activity. Monitoring oftransaction activity shall include, but not be limited to, activity trends,large dollar activity, returns (number and percentage), and multiple loadtransactions on a daily basis.

 

 

Client - BANKFIRST                                                                                            4

3/19/2004

 

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SECTION 3.7 Reporting

 

When and as reasonably requested by Bank, Client shall promptly provide to Bankpertinent data and other information which may be in the possession of oravailable to Client concerning the transactions. Client shall make such data andother information available to Bank at Client's sole cost and expense.

 

SECTION 3.8 Warranty of Transactions

 

Client shall warrant all ACH transactions that are originated by Client. 

 

**SECTION 3.9 Notice of Change (NOC)Processing**
 

Client shall process all NOC files/transactions within five (5) business days ofreceipt.
** 

SECTION 3.10 Compliance with SecurityProcedure**
 

Client shall comply with the security procedure requirements described inSchedule Bwith respect to Entries transmitted by Client to Bank. Clientacknowledges that the purpose of such security procedure is for verification ofauthenticity and not to detect an error in the transmission or content of anEntry. No security procedure for the detection of any such error has been agreedupon between the Bank and Client.

 

Client is strictlyresponsible to establish and maintain the procedures to safeguard againstunauthorized transmissions. Client warrants that no individual will be allowedto initiate transfers in the absence of proper supervision and safeguards, andagrees to take reasonable steps to maintain the confidentiality of the securityprocedures and any passwords, codes, security devices and related instructionsprovided by Bank in connection with the security procedures described inSchedule B. If Client believes or suspects that any such information orinstructions have been discovered or accessed by unauthorized persons, Clientagrees to notify Bank immediately followed by written confirmation. Theoccurrence of unauthorized access will not affect any transfers made in goodfaith by Bank prior to receipt of such notification and within a reasonable timeperiod to prevent unauthorized transfers.

 

If an Entry (or arequest for cancellation or amendment of an Entry) received by Bank purports tohave been transmitted or authorized by Client, it will be deemed effective asClient's Entry (or request) and Client shall be obligated to pay Bank the amountof such Entry even though the Entry (or request) was not authorized by Client,provided Bank accepted the Entry in good faith and acted in compliance with thesecurity procedures referred to in Schedule B with respect to such Entry.

 

If an Entry (or request forcancellation or amendment of an Entry) received by Bank was transmitted orauthorized by Client, Client shall pay Bank the amount of the

 

Client - BANKFIRST                                                                                            5

3/19/2004

 

 

Entry, whether or notBank complied with the security procedures referred to in Schedule B withrespect to that Entry and whether or not that Entry was erroneous in any respector that error would have been detected if Bank had complied with such procedure.

 
**SECTION 3.11 Data Retention

 **
Client shall retain data on file adequate to permit remaking of Entries forninety (90) days following the date of their transmittal by Bank as providedherein, and shall provide such Data to Bank upon its request. Client shallretain any data regarding transactions processed pursuant to this agreement fora minimum of six (6) years.

 

**SECTION 3.12Evidence of Authorization**
 

Client shall obtain all consents and authorizations required under the Rules andshall retain such consents and authorization for two years after they expire.
** 

ARTICLE IV - REPRESENTATIONS ANDWARRANTIES 

 

SECTION 4.1 Representations andWarranties Client**
 

Client represents and warrants toBank as follows:

 

(a)        This Agreement is valid, bindingand enforceable against Client in accordance with its terms.

 

(b)        Client is a corporation dulyincorporated, validly existing and in good standing under the laws of the Stateof Maryland and is authorized to do business in each state in which the natureof Client's activities makes such authorization necessary.

 

(c)        Client has the full power andauthority to execute and deliver this Agreement and to perform all itsobligations under this Agreement. The provisions of this Agreement and theperformance by Client of its obligations under this Agreement are not inconflict with Client's Articles of Incorporation, bylaws or any other agreement,contract, lease or obligation to which Client is a party or by which it isbound.

 

(d)        Neither Client nor any principalof Client has been subject to the following: 

 

(i)        Criminal conviction (except minortraffic and other petty offenses); 

 

(ii)        Federal or state tax lien;

 

(iii)       Administrative or enforcementproceedings commenced by the Securities and Exchange Commission, any statesecurities regulatory authority, Federal Trade commission, federal or state bankregulator, or any other state or federal regulatory agency; or

Client - BANKFIRST                                                                                            6

3/19/2004

 

 

(iv)        Restraining order, decree,injunction, or judgment in any proceeding or lawsuit, alleging fraud ordeceptive practice on the part of Client or any principal thereof.

 

For thissubparagraph, the word "principal" shall include any person directly orindirectly owning ten percent (10%) or more of Client, any officer or directorof the Client, or any person actively participating in the control of Client'sbusiness.

 

(e)        There is not pending or threatenedagainst Client, any litigation or proceeding, judicial, tax or administrative,the outcome of which might materially adversely affect the continuing operationsof Client. Attached to this Agreement is a list and brief description of allpending lawsuits in which Client is a party.

 

(f)        Client has delivered to Bankcomplete and correct copies of its balance sheets and related statements ofincome and cash flow. Client's financial statements, subject to any limitationstated therein, which have been or which hereafter will be furnished to Bank toinduce it to enter into this Agreement do or will fairly represent the financialcondition of the Client, and all other information, reports and other papersfurnished to Bank will be, at the time the same are furnished, accurate andcomplete in all material respects and complete insofar as completeness may benecessary to give Bank a true and accurate knowledge of the subject matter. Thefinancial statements are in accordance with the books and records of Client wereprepared in accordance with generally accepted accounting principles ("GAAP") asin effect from time to time in the United States, as consistently applied, andin accordance with all pronouncements of the Financial Accounting StandardsBoard. The Bank will make available a standard financial package that itprovides its key vendors in accordance with its other practices.

 

(g)        Client agrees that at Bank's solediscretion, Bank, its authorized representatives, or agents and any governmententity with regulatory or supervisory authority over Bank (collectively "theAuditing Party"), shall have the right to inspect, audit, and examine all ofClient's facilities, records and personnel relating to the functionalitydescribed in this Agreement at any time during normal business hours uponreasonable notice. The Auditing Party shall have the right to make abstractsfrom Client's books, accounts, data, reports, papers, and computer recordsdirectly pertaining to the subject matter of this Agreement, and Client shallmake all such facilities, records, personnel, books, accounts, data, reports,papers, and computer records available to the Auditing Party for the purpose ofconducting such inspections and audits.

 
**SECTION 4.2 Representations andWarranties Bank 

 **
Bank represents and warrants toClient as follows:

 

(a) This Agreement is valid, bindingand enforceable against Bank in accordance with its terms.

 

 

Client - BANKFIRST                                                                                            7

3/19/2004

 

 

(b)        Bank is a corporation dulyincorporated, validly existing and in good standing under the laws of the Stateof South Dakota and is authorized to do business in each state in which thenature of Bank's activities makes such authorization necessary.

 

(c)        Bank has the full power andauthority to execute and deliver this Agreement and to perform all itsobligations under this Agreement. The provisions of this Agreement and theperformance by Bank of its obligations under this Agreement are not in conflictwith Bank's Articles of Incorporation, bylaws or any other agreement, contract,lease or obligation to which Bank is a party or by which it is bound.

 

(d)        There is not pending or threatenedagainst Bank, any litigation or proceeding, judicial, tax or administrative, theoutcome of which might materially adversely affect the continuing operations ofBank.

 
**ARTICLE V - COVENANTSSECTION 

 

SECTION 5.1 Covenants of Client

 **
Client covenants and agrees with Bankas follows:

 

(a) It will comply with all applicable laws, the Rules and any rules, orders andregulations issued by the Regulatory Authorities that relate to the matters andtransactions contemplated by this Agreement. In particular, Client will complywith the applicable requirements of: the U.S. PATRIOT Act, including Section 326Customer Identification Programs; Gramm-Leach-Bliley Act (GLBA) including thePrivacy Rules and Regulation P; and the Office of Foreign Asset Control (OFAC)directives.

 

(b) It will promptly give written notice to Bank of any material adverse changein the business, properties, assets, operations or condition, financial orotherwise, of Client and any pending, or a threat of, litigation involving a sumof $50,000 or more and of all tax deficiencies and other proceedings beforegovernmental bodies or officials affecting Client.

 

(c) As soon as possible, and in any event within 90 days after the end ofClient's fiscal year, commencing January 1, 2004, it will provide Bank with itsaudited balance sheets and related statements of income and cash flow and allnotes and schedules thereto as of the end of such period.

 

(d) All consumer complaints received by Client, relating to the ACHfunctionality or its use, will be immediately reported to Bank. Such reportshall include the name and address of the complaining consumer and a briefsummary of the consumer's complaint.

 

(e) Client will not, without Bank's prior consent, solicit consumers through theuse of any party who is not directly employed by and under the immediatesupervision and

 

 

Client - BANKFIRST                                                                                            8

3/19/2004

 

 

control of Client and its affiliates.

 
**SECTION 5.2 Covenants of Bank**
 

Bank covenants and agrees with Clientas follows:

 

(a) It will comply with all applicable laws, the Rules and any rules, orders andregulations issued by the Regulatory Authorities that relate to the matters andtransactions contemplated by this Agreement. In particular, Bank will complywith the applicable requirements of: the U.S. PATRIOT Act, including Section 326Customer Identification Programs; Gramm-Leach-Bliley Act (GLBA) including thePrivacy Rules and Regulation P; and the Office of Foreign Asset Control (OFAC)directives.

 

(b) It will promptly give written notice to Client of any material adversechange in the business, properties, assets, operations or condition, financialor otherwise, of Bank and any pending, or a threat of, litigation involving asum of $50,000 or more and of all tax deficiencies and other proceedings beforegovernmental bodies or officials affecting Bank.

 

(c) All consumer complaints received by Bank, relating to the ACH functionalityor its use, will be immediately reported to Client. Such report shall includethe name and address of the complaining consumer and a brief summary of theconsumer's complaint.
** 

ARTICLE VI - DUTIES OFBANK

 

SECTION 6.1 Sponsorship Certificationand Administrative Fees

 **
Bank shall be responsible for any annual membership fees relating to BankMembership with any System.

 
**SECTION 6.2 Memberships in System

 **
Bank shall retain its Membership in System in good standing and shall abide inall material respects by all the Rules and regulations applicable to Bank;provided, however, that Bank shall not be obligated to maintain such Membership.If Bank elects to terminate its membership in any System, or if a System electsto terminate Bank's Membership in spite of Bank's compliance with the applicableRules, Bank shall give notice to Client as soon after it provides notice to orreceives notice from the System according to the Rules.

 
**SECTION 6.3 Notices

 **
       Bank shall deliver to Client a copy of all material notices or correspondencethat it receives from any System, or any other third party, relating to thisagreement, within five (5) business days of receipt of such notice orcorrespondence.

 

Client - BANKFIRST                                                                                            9

3/19/2004
** 

 

SECTION 6.4 Processing Services

 **
Bank shall provide for the processing of Entries received from Client to conformto the requirements set forth in this Agreement. Bank shall provide fortransmitting of such Entries as an ODFI to the Federal Reserve System or throughthe use of an ACH Client Sender. Bank shall settle for such Entries as providedin the Rules.

 

Bank shall provide for the processing of the Entries as defined in Schedule Bprovided that the file was received on time, the Federal Reserve Bank is openfor business, and the effective entry date is stated. If any of the requirementsare not met in this Section 6.4, Bank shall use reasonable efforts to transmitsuch Entries to the ACH by the next deposit deadline of the ACH following thatspecific in Schedule B which is a business day and a day on which the ACH isopen for business.

 

Bank shall not cancel or amend an Entry after it is delivered to Bank. Bankshall use reasonable efforts to act on a request by Client for reversal of afile of Entries according to the Rules; provided that Bank shall not be liablefor interest or loses if such reversal is not effected. Any request by Clientfor reversal of a file of Entries must comply with the Delivery Requirements andSecurity Procedures as defined in Schedule B. Client shall reimburse Bank forany expenses, losses, or damages Bank may incur in effecting or attempting toeffect Client's request for the reversal of a file of Entries. Bank is entitledto payment from Client in the amount of any such reversal of a debit file ofEntries prior to acting on any request thereof.

 
**SECTION 6.5 Error Resolution andRejection of Entries

 **
Bank shall be responsible to investigate all errors identified by the Client.Bank may reject any Entry which does not comply with requirements of Section 3.2and Section 3.10 or which contains an Effective Entry Date more than three (3)days after the business day such Entry is received by Bank. Bank may reject anOn-Us Entry for any reason for which an Entry may be returned under the Rules.Bank may reject an Entry if Client has failed to comply with its Reserve Accountbalance obligations under Section 3.5. Bank may reject any entry if Client doesnot adhere to security procedures as described in Schedule B. Bank shall notifyClient by telephone, e-mail, or any other mutually agreed to means not laterthan the next business day after the effective Entry date. Notices of rejectionshall be effective when given. Bank shall have no liability to Client by reasonof the rejection of any such Entry or the fact that such notice is not given atan earlier time than that provided for herein.

 

 
**SECTION 6.6 File Return Notification**
 

Bank will provide for the notification to Client either by telephone,electronically, or as otherwise agreed about the return of a file. Notificationwill be made within one (1) business day of receipt of such an Entry or File.Bank shall use its best efforts to provide for notification to Client on thedate of the receipt but will have no obligation to reexecute

 

 

Client - BANKFIRST                                                                                            10

3/19/2004

 

 

or take other actionwith respect to a returned Entry or File. Notices of the return of a file shallbe effective when given. Bank shall have no liability to Client by reason of thereturn of any such Entry or the fact that such notice is not given at an earliertime than that provided for herein.

 
**SECTION 6.7 Tapes and Records

 **
All magnetic tapes,Entries, security procedures and related records used by Bank for transactionscontemplated by this Agreement shall be and remain Bank's property. Bank may, atits sole discretion, make available such information upon Client's request. Ayexpenses incurred by Bank in making such information available to Client shallbe paid by Client.

 
**SECTION 6.8 On-Us Entries

 **
Except as provided inthis Section 6.8, in the case of an Entry received for credit to an accountmaintained with Bank (an "On-Us Entry"), Bank shall credit the Client's ReserveAccount in the amount of such Entry on the Effective Entry Date contained insuch Entry, provided the requirements set forth in Section 6.4 are met. If theserequirements are not met, Bank shall use reasonable efforts to credit the ClientReserve Account in the amount of such Entry no later than the next business dayfollowing such Effective Entry Date.
** 

ARTICLE VII - COMPENSATION ANDEXPENSES 

 

SECTION 7.1 Expenses of Bank

 

Bank shall be solely responsiblefor the following expenses:

 

Except as otherwiseprovided in this Agreement, all annual Membership fees related to Bank's licensewith and Membership in any System utilized by the ACH processing, and any feesand penalties assessed by any such System or Regulatory Authority due to Bank'sactions or of any third party retained by Bank.
** 

SECTION 7.2 Compensation of Bank

 **
Client shall pay Bankthe charges for the services provided in connection with this Agreement, as setforth in Schedule A. All fees and services are subject to change upon 30calendar days' prior written notice from Bank to Client. Such charges do notinclude and Client shall be responsible for payment of, any sales, use, excise,value added, utility or other similar taxes relating to such services, and anyfees or charges provided for in the agreement between Bank and Client withrespect to the Reserve Account.

 
**SECTION 7.3 Expenses of Client

 **
Client - BANKFIRST                                                                                            11

3/19/2004
** **
 

Client shall be solely responsiblefor the following:

 

(a) Advertising andother expenses associated with the marketing of ACH functionality or membershipplans to its consumers or prospect base or any party under its control or anyparty for which it is providing services.

 

(b) All fines and penalties assessedby any Regulatory Authority due to Client's actions, inactions, or omissions.

 

(c) All expensesassociated with and losses from non-sufficient fund payment requests, consumerfraud, or any other transactions initiated by the consumer where funds are notavailable and cash was provided/distributed to the consumer by Client.

 

(d) All fees assessed by Bank forexceeding the error tolerance levels on files transmitted for ACH processing.

 
**ARTICLE VIII -LIMITATION OF LIABILITY 

 

SECTION 8.1 No Special Damages

 **
Neither party shallbe liable to the other for any special, indirect, incidental, consequential,punitive or exemplary damages, including, but not limited to, lost profits, evenif such party has knowledge of the possibility of such damages provided,however, that the limitations set forth in this Section shall not apply to or inany way limit the indemnity obligations under this Agreement.

 
**SECTION 8.2 Disclaimers of Warranties

 **
Bank specificallydisclaims all warranties of any kind, express or implied, arising out of orrelated to this Agreement, including without limitation, any warranty ofmarketability, fitness for a particular purpose or non-infringement, each ofwhich is hereby excluded by agreement of the parties.

 
**SECTION 8.3 Liabilities of Client forSystem and Regulatory Claims

 **
Client shall beliable to Bank for any and all liabilities and every loss, claim, demand, andcause of action (including, without limitation, the cost of investigating theclaim, the cost of litigation and reasonable attorneys' fees, whether or notlegal proceedings are instituted and whether paid or incurred, as the case maybe) as a result of Client's failure to comply with the Rules or applicableRegulatory Authority.

 

 

Client - BANKFIRST                                                                                            12

3/19/2004

 

 
**ARTICLE IX - TERM OFPROGRAMS AND AGREEMENT 

 

SECTION 9.1 Term and Termination ofAgreement Without Cause

 **
The term of thisAgreement shall commence on the Effective Date and continue for three (3) years(the "Initial Term") from the first day that Processing Services are actuallyprovided for by Bank unless terminated earlier as provided below. After theInitial Term, the Agreement shall automatically extend for additional periods ofone year each (a "Renewal Term"). During a Renewal Term, either party mayterminate this Agreement for any reason by providing written notice to the otherat least 120 days in advance of termination or as provided below.

 
**SECTION 9.2 Termination of AgreementFor Cause

 **
(a) Either Bank or Client shall havethe right to terminate this Agreement upon occurrence of one or more of thefollowing events:

 

(i) Failure by theother party to observe or perform, in any material respect, that party'sobligations to the other party hereunder, so long as the failure is not due tothe actions or failure to act of the terminating party, but only if the failurecontinues for a period of (A) thirty (30) days after the non-performing partyreceives written notice from the other party specifying the failure in the caseof a failure not involving the payment of money, or (B) ten (10) days after thenon-performing party receives written notice from the other party specifying thefailure in the case of a failure to pay any amount then due hereunder, provided,however, that Bank, in its sole discretion, may terminate this Agreement withoutsuch a cure period if a substantially similar material failure has previouslyoccurred;

 

(ii) In the event anyfinancial statement, representation, warranty, statement or certificatefurnished to it by the other party in connection with or arising out of thisAgreement is materially adverse to the terminating party and intentionallyuntrue as of the date made or delivered.

 

(iii) The other party(A) voluntarily commencing any proceeding or filing any petition seeking reliefunder Title 11 of the United States Code or any other Federal, state or foreignbankruptcy, insolvency, liquidation or similar law, (B) applying for orconsenting to the appointment of a receiver, trustee, custodian, sequestrator orsimilar official for such party or for a substantial part of its property orassets, (C) making a general assignment for the benefit of creditors, or (D)taking corporate action for the purpose of effecting any of the foregoing; or

 

(iv) The commencementof an involuntary proceeding or the filing of an involuntary proceeding or thefiling of an involuntary petition in a court of competent jurisdiction seeking(A) relief in respect of the other party, or of a substantial part of itsproperty or assets under Title of the United States Code or any other Federal,state or foreign bankruptcy, insolvency, receivership or similar

 

 

Client - BANKFIRST                                                                                            13

3/19/2004

 

 

law, (B) theappointment of a receiver, trustee, custodian, sequestrator or similar officefor the other party or for a substantial part of its property or assets, or (C)the winding up or liquidation, of the other party, if such proceeding orpetition shall continue un-dismissed for sixty (60) days or an order or decreeapproving or ordering any of the foregoing shall continue unstayed and in effectfor sixty (60) days.

 

(v) Upon any changeto or enactment of any law or regulation which would have a material adverseeffect upon the processing described in this Agreement.

 

(vi) Violation of any federal orstate law relating to the performance of this Agreement.

 

(vii) Upon direction from anyRegulatory Authority to cease or materially limit performance of the obligationsunder this Agreement.
** 

SECTION 9.3 Survivals of Payments andSurvival of Obligations Upon Termination of Agreement

 **
This Agreement shallcontinue in full force and Bank shall continue to provide the services currentlythen being provided until such time as all transactions are so processed, but inno event exceeding ninety (90) days from notice of cancellation. If suchtermination is made by Bank pursuant to Section 9.2, Bank will be entitled towithhold and pay directly all processing expenses from processing revenuesincluding the costs of servicing the existing customers by a servicingorganization reasonably selected by Bank. In such event, Bank shall have nofurther obligation to accept transactions from Client.

 

Any termination ofthis Agreement shall not affect any of Bank's rights and Client's obligationswith respect to Entries initiated by Client prior to such termination, or thepayment obligations of Client with respect to services performed by Bank priorto termination, or any other obligation that survive termination of thisAgreement.

 

**SECTION 9.4Liquidated Damages**

 

The Parties agreethat the pricing under this Agreement was determined by mutual agreement basedupon certain assumed volumes of processing activity and the length of the Termof this Agreement.

 

The Parties furtheragree that it would be difficult or impossible to ascertain Bank's actualdamages for a termination or other breach of this Agreement by Client resultingin a termination of this Agreement before the end of the Term. The Partiesfurther agree the Bank is entitled to : (i) all fees earned but not paid priorto the date of termination, (ii) any direct costs incurred as a result of thetermination, deconversion and/or change-over; and (iii) depending on theAgreement, an amount equal to: (x) the contract minimum, if

 

 

Client - BANKFIRST                                                                                            14

3/19/2004

 

 

applicable; (y) 50%of the annual minimum for each full year remaining in the Agreement, proratedfor partial years remaining; or (z) 50% of an average monthly fee, calculated byBank by selecting and averaging any three consecutive months, multiplied by thenumber of months remaining in the Agreement. Client agrees this is a reasonableestimation of the actual damages Bank would suffer if Bank did not receive theexpected benefits to be derived from this Agreement for the full Term.

 

Each Partyacknowledges and agrees, after taking into account the terms of this Agreementand all relevant circumstances at the date hereof, that the Liquidated Damagespayable under this Section 9.4 represents a reasonable and genuine pre-estimateof the damages which would be suffered by Bank in the event of early terminationof this Agreement and does not constitute a penalty.

 

Nothing in this Agreement shall limitthe right of any party to this Agreement to seek injunctive relief, to theextent available, with respect to breaches of this Agreement.
** 

ARTICLE X -CONFIDENTIALITY

 ****SECTION 10.1 Confidential Information

 **
The term"Confidential Information" shall mean this

 

 Agreement andall proprietary information, data, trade secrets, business information and otherinformation of any kind whatsoever which (a) a party ("Discloses") discloses, inwriting, orally or visually, to the other Party ("Recipient") or to whichRecipient obtains access in connection with the negotiation and performance ofthis Agreement, and which (b) relates to (i) the Discloser, (ii) in the case ofClient, Bank and its customers and or associates, or (iii) Consumers who havemade confidential or proprietary information available to Client. The definitionof Confidential Information shall include Customer Information as describedbelow.

 
**SECTION 10.2 Customer Information

 **
Client acknowledgesthat Bank has a responsibility to its customers to keep information about itscustomers and their accounts strictly confidential and Bank acknowledges thatClient has a responsibility to its consumers to keep their information strictlyconfidential (collectively, "Customer Information"). In addition to the otherrequirements set forth in this Section regarding Confidential Information,Customer Information shall also be subject to the additional restrictions setforth in this Subsection. The Recipient shall not disclose or use CustomerInformation other than to carry out the purposes for which the Discloser or oneof its affiliates disclosed such Customer Information to Recipient. Recipientshall not disclose any Customer Information other than on a "need to know" basisand then only to: (a) affiliates of Discloser; (b) its employees or officers;(c) affiliates of Recipient provided that such affiliates shall be restricted inuse and redisclosure of the Customer Information to the same extent asRecipient; (d) to carefully selected subcontractors provided that suchsubcontractors shall

 

 

Client - BANKFIRST                                                                                            15

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have entered into aconfidentiality agreement no less restrictive than the terms hereof; (e) toindependent contractors, agents, and consultants hired or engaged by Recipient,provided that all such persons are subject to a confidentiality agreement whichshall be no less restrictive than the provisions of this Section; or (f)pursuant to the exceptions set forth in 15 USC 6802(e) and accompanyingregulations which disclosures are made in the ordinary course of business. Therestrictions set forth herein shall apply during the term and after thetermination of this Agreement.

 

Each Party must comply with allfederal and state privacy laws. 

 
**SECTION 10.3 Disclosure to Employeesand Agents.

 **
Each of the Parties,as Recipient, hereby agrees on behalf of itself and its employees, officers,affiliates and subcontractors that Confidential Information will not bedisclosed or made available to any person for any reason whatsoever, other thanon a "need-to-know basis" and then only to: (a) its employees and officers; (b)subcontractors and other third-parties specifically permitted under thisAgreement, provided that all such persons are subject to a confidentialityagreement which shall be no less restrictive than the provisions of thisSection; (c) independent contractors, agents, and consultants hired or engagedby Bank, provided that all such persons are subject to a confidentialityagreement which shall be no less restrictive than the provisions of thisSection; and (d) as required by law or as otherwise permitted by this Agreement,either during the term of this Agreement or after the termination of thisAgreement. Prior to any disclosure of Confidential Information as required bylaw, the Recipient shall (i) notify the Discloser of any, actual or threatenedlegal compulsion of disclosure, and any actual legal obligation of disclosureimmediately upon becoming so obligated, and (ii) cooperate with the Discloser'sreasonable, lawful efforts to resist, limit or delay disclosure. Nothing in thisSection shall require any notice or other action by Bank in connection withrequest or demands for Confidential Information with request by bank examiners.

 
**SECTION 10.4 Return of Materials

 **
Upon the terminationor expiration of this Agreement, or at any time upon the request of a Party, theother Party shall return all Confidential Information, including CustomerInformation, in the possession of such Party or in the possession of any thirdParty over which such Party has or may exercise control.

 
**SECTION 10.5 Exceptions

 **
With the exception ofthe obligations related to Customer Information, the obligations ofconfidentiality in this Section shall not apply to any information which a partyrightfully has in its possession when disclosed to it by the other party,information which a party independently develops, information which is orbecomes known to the public other than by breach of this Section or informationrightfully received by a party from a third party without the obligation ofconfidentiality.

 

 

Client - BANKFIRST                                                                                            16

3/19/2004
** 

 

SECTION 10.6 Media Releases

 **
All media releases,public announcements and public disclosures by either party, or theirrepresentatives, employees or agents, relating to this Agreement or the name orlogo of either Party, any Bank affiliate or supplier, including, withoutlimitation, promotional or marketing material, but not including any disclosurerequired by legal, accounting or regulatory requirements beyond the reasonablecontrol of the releasing party, shall be coordinated with and approved by theother party in writing prior to the release thereof.

 
**ARTICLE XI - INSURANCE

 

SECTION 11.1 Insurance

 **
Each party shallmaintain, throughout the term of this Agreement, appropriate comprehensivegeneral liability insurance policies (which shall include contractualliability), the limit of which shall be no less than a combined single limit of$1,000,000 per occurrence for bodily injury and property damage.
** 

ARTICLE XII - GENERALPROVISIONS

 

SECTION 12.1 Indemnification**
 

(a) Client covenantsand agrees to indemnify and hold harmless Bank, its parent, subsidiaries oraffiliates, and their respective officers, directors, employees and permittedassigns, as such, against any direct losses or expenses arising from any legalaction, claim, demand or proceedings brought against any of them as a result ofany misrepresentation, breach of warranty or failure to fulfill a covenant ofthis Agreement on the part of Client, any act or omission of Client or itsproviders which violates any law, by-laws or Governmental Requirements, or anyclaim relating to obligations owed to or by Client or any third party retainedby it; provided, that this provision shall not apply if such claim arises out of(i) an act of fraud, embezzlement or criminal activity by Bank, (ii) negligence,willful misconduct or bad faith by Bank, or (iii) the failure of Bank to complywith, or to perform its obligations under, this Agreement

 

(b) Bank covenantsand agrees to indemnify and hold harmless Client and its parent, subsidiaries oraffiliates, and their respective officers, directors, employees, and permittedassigns, as such, against any direct losses or expenses arising from any legalaction, claim, demand, or proceedings brought against any of them as a result ofany misrepresentation, breach of warranty or failure to fulfill a covenant ofthis Agreement on the part of Bank, any act or omission of Bank or its providerswhich violates any law, by-laws or Governmental Requirements, or any claimrelating to obligations owed to or by Bank or any third party retained by it(except to the extent that Client has agreed to fulfill such obligation underthis Agreement); provided, that this provision shall not apply if such claimarises out of (i) an act of fraud, embezzlement or criminal activity by Clientor its representatives, (ii) negligence, willful misconduct or bad faith byClient or its

 

 

Client - BANKFIRST                                                                                            17

3/19/2004

 

 

representatives, or (iii) the failureof Client or its representatives to comply with, or to perform its obligationsunder, this Agreement.

 

(c) If any claim ordemand is asserted against any party or parties (individually or collectively,the "Indemnified Party") by any person who is not a party to this Agreement inrespect of which the Indemnified Party may be entitled to indemnification underthe provisions of subsections (a) or (b) above, written notice of such claim ordemand shall promptly be given to any party or parties (individually orcollectively, the "Indemnifying Party") from whom indemnification may be sought.The Indemnifying Party shall have the right, by notifying the Indemnified Partywithin ten (10) days of its receipt of the notice of the claim or demand, toassume the entire control (subject to the right of the Indemnified Party toParticipate at the Indemnified Party's expense and with counsel of theIndemnified Party's choice) of the defense, compromise or settlement of thematter, including, at the Indemnifying Party's expense, employment of counsel ofthe Indemnifying Party's choice. If the Indemnifying Party gives notice to anyIndemnified Party that the Indemnifying Party will assume control of thedefense, compromise or settlement of the mailer the Indemnifying Party will bedeemed to have waived all defenses to the claims for indemnification by theIndemnified Party with respect to that matter. Any damages to the assets orbusiness of the Indemnified Party caused by a failure of the Indemnifying Partyto defend, compromise or settle a claim or demand in a reasonable andexpeditious manner, after the indemnifying Party has given notice that it willassume control of the defense, compromise or settlement of the matter, shall beincluded in the damages for which the Indemnifying Party shall be obligated toindemnify the Indemnified Party.

 

(d) The provisions of this Section12.1 and of Section 12.2 shall survive termination or expiration of thisAgreement.

 
**SECTION 12.2 Disclosure

 **
(a) Each party shallpromptly notify the other of any action, suit, proceeding, facts andcircumstances, and the threat of reasonable prospect of same, which might giverise to any indemnification hereunder or which might materially and adverselyaffect either party's ability to perform this Agreement.

 

(b) Each partyrepresents and warrants to the other that it has no knowledge of any pending orthreatened suit, action, arbitration or other proceedings of a legal,administrative or regulatory nature, or any governmental investigation, againstit or any of its affiliates or any officer, director, or employee which has notbeen previously disclosed in writing and which would materially and adverselyaffect its financial condition, or its ability to perform this Agreement.

 
**SECTION 12.3 Legal Compliance

 **
Each party represents and warrants tothe other that it is familiar with the requirements of all applicable consumerprotection laws applicable to it which relate to the

 

Client - BANKFIRST                                                                                            18

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Program and itsobligations hereunder, and agrees that it will comply, in all material respects,with all such laws and regulations and all other applicable laws and regulationsrelating to its activities under this Agreement, now and in the future.

 
**SECTION 12.4 Relationship of Parties

 **
Bank and Client agreethey are independent contractors to each other in performing their respectiveobligations hereunder. Nothing in this Agreement or in the working relationshipbeing established and developed hereunder shall be deemed, nor shall it cause,Bank and Client to be treated as partners, joint ventures, or otherwise as jointassociates for profit.

 
**SECTION 12.5 Regulatory Examinationsand Financial Information

 **
Client agrees tosubmit to any examination which may be required by any Regulatory Authority withaudit and examination authority over Bank, to the fullest extent of suchRegulatory Authority. Client shall also provide to Bank any information, whichmay be required by any Regulatory Authority in connection with their audit orreview of Bank or the Program and shall reasonably cooperate with suchRegulatory Authority in connection with any audit or review of Bank. Clientshall furnish Bank, at Client expense, with audited financial statementsprepared by a certified public accountant. Client shall also provide such otherinformation as Bank, Regulatory Authorities, or the System may from time to timereasonably request with respect to the financial condition of Client and suchother information as Bank may from time to time reasonably request with respectto third parties contracted with Client.

 
**SECTION 12.6 Governing Law

 **
This Agreement shallbe governed by the internal laws, and not by the laws regarding conflicts oflaws, of the State of South Dakota. Each Party hereby submits to thejurisdiction of the courts of such state, and waives any objection to venue withrespect to actions brought in such courts.

 
**SECTION 12.7 Severability

 **
In the event that anypart of this Agreement is deemed by a court, Regulatory Authority, or otherpublic or private tribunal of competent jurisdiction to be invalid orunenforceable, such provision shall be deemed to have been omitted from thisAgreement. The remainder of this Agreement shall remain in full force andeffect, and shall be modified to any extent necessary to give such force andeffect to the remaining provisions, but only to such extent.
** 

SECTION 12.8 Survival

 **
All representations and warrantiesherein shall survive any termination or

 

 

Client - BANKFIRST                                                                                            19

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expiration of this Agreement.

 
**SECTION 12.9 Successors and ThirdParties

 **
Except as limited bySection 12.10, this Agreement and the rights and obligations hereunder shallbind, and inure to the benefit of the parties and their successors and permittedassigns.

 
**SECTION 12.10 Assignments

 **
The rights andobligations of Client under this Agreement are personal and may not be assignedeither voluntarily or by operation of law, without prior written consent fromBank.

 
**SECTION 12.11 Notices

 **
All notices, requestsand approvals required by this Agreement shall be in writing addressed/directedto the other party at the address and facsimile set forth below, or at suchother address of which the notifying party hereafter receives notice inconformity with this section. All such notices, requests, and approvals shall bedeemed given upon the earlier of receipt of facsimile transmission during thenormal business day or actual receipt thereof. All such notices, requests andapprovals shall be addressed to the attention of:

 

Bank to: BANKFIRST

2600 W. 49th'			Street 			Sioux Falls, SD 57105 			Attention: General Counsel 			Facsimile Number: (480) 308-5102

Client to:

NBO Systems, Inc.

3676 W. California Ave.,			Bldg.D 

Salt Lake City, UT 84104			

Attention: CEO

Facsimile Number: (801)			973-4188

Tax Identification			Number: 55-0795927
**SECTION 12.12 Waivers**
 

Neither party shallbe deemed to have waived any of its rights, power, or remedies hereunder exceptin writing signed by an authorized agent or representative of the party to becharged. Either party may, by an instrument in writing, waive compliance by theother party with any term or provision of this Agreement on the part of theother party to be performed or complied with. The waiver by either party of abreach of any term or provision of this Agreement shall not be construed as awaiver of any subsequent breach.

 

 

Client - BANKFIRST                                                                                            20

3/19/2004
** 

 

SECTION 12.13 Entire Agreement;Amendments

 **
This Agreementconstitutes the entire Agreement between the parties and supersedes all priorAgreements, understandings, and arrangements, oral or written, between theparties with respect to the subject matter hereof. This Agreement may not bemodified or amended except by an instrument or instruments in writing signed bythe party against whom enforcement of any such modification or amendment issought.

 
**SECTION 12.14 Counterparts

 **
This Agreement may beexecuted and delivered by the parties in counterpart, each of which shall bedeemed an original and both of which together shall constitute one and the sameinstrument.

 
**SECTION 12.15 Disputes

 **
(a) Duty to Notify.In the event of any dispute, controversy, or claim arising out of or relating tothis Agreement or the construction, interpretation, performance, breach,termination, enforceability or validity thereof (hereinafter, a "Dispute"), theparty raising such Dispute shall notify the other promptly and no later thansixty (60) days from the date of its discovery of the Dispute. In the case of aDispute relating to account or transaction statements or similar matter, thefailure of a party to notify the other party of such Dispute within sixty (60)days from the date of its receipt shall result in such matter being deemedundisputed and accepted by the party attempting to raise such Dispute.

 

(b) Cooperation toResolve Disputes. The parties shall cooperate and attempt in good faith toresolve any Dispute promptly by negotiating between persons who have authorityto settle the Dispute and who are at a higher level of management than thepersons with direct responsibility for administration and performance of theprovisions or obligations of this Agreement that are the subject of the Dispute.

 

(c) Arbitration. AnyDispute which cannot otherwise be resolved as provided in paragraph (b) aboveshall be resolved by arbitration conducted in accordance with the commercialarbitration rules of the American Arbitration Association, and judgment upon theaward rendered by the arbitral tribunal may be entered in any court havingjurisdiction thereof. The arbitration tribunal shall consist of a singlearbitrator mutually agreed upon by the parties, or in the absence of suchagreement within 30 days from the first referral of the dispute to the AmericanArbitration Association, designated by the American Arbitration Association. Theplace of arbitration shall be Sioux Falls, South Dakota, unless the partiesshall have agreed to another location within 15 days from the first referral ofthe dispute to the American Arbitration Association. The arbitral award shall befinal and binding. The parties waive any right to appeal the arbitral award, tothe extent a right to appeal may be lawfully waived. Each party retains theright to seek judicial assistance: (i) to compel arbitration, (ii) to obtaininterim measures of protection prior to or pending arbitration, (iii) to seekinjunctive relief in the courts of any jurisdiction as may be necessary andappropriate to protect the unauthorized disclosure of its proprietary or

 

 

Client - BANKFIRST                                                                                            21

3/19/2004

 

 

confidentialinformation, and (iv) to enforce any decision of the arbitrator, including thefinal award. In no event shall either party be entitled to punitive, exemplaryor similar damages.

 

(d) Confidentialityof Proceedings. The arbitration proceedings contemplated by this Section shallbe as confidential and private as permitted by law. To that end, the partiesshall not disclose the existence, content or results of any proceedingsconducted in accordance with this Section, and materials submitted in connectionwith such proceedings shall not be admissible in any other proceeding, provided,however, that this confidentiality provision shall not prevent a petition tovacate or enforce an arbitral award, and shall not bar disclosures required byany laws or regulations.

 
**SECTION 12.16 Limitation of Liability

 **
Neither Client, theBank nor any of their respective directors, officers, employees, agents,representatives or controlling persons shall be liable for any action taken orfor refraining from taking any action in good faith pursuant to this Agreement;provided, however, that this provision shall not protect Client or Bank againstany breach of their respective representations, warranties or covenants madeherein, or against any specific liability imposed pursuant hereto, or againstany liability which would otherwise be imposed by reason of willful misfeasance,bad faith or gross negligence in the performance of duties or by reason ofreckless disregard of obligations or duties hereunder. Client and Bank may relyin good faith on any document, electronic file or other electronic or telephoniccommunication of any kind, which appears bona fide, submitted by any appropriateperson respecting any matters arising hereunder.

 

IN WITNESS WHEREOF, this Agreement isexecuted by the parties' authorized officers or representatives and shall beeffective as of the date first above written.

 

**Client  **
**BANKFIRST**
By: /s/ C.		Foley   
 By: /s/		**[illegible signature]**
Title: CFO  		
 Title:		SVP
Dates: 3/19/04  		
  		
 

 

Client - BANKFIRST                                                                                            22

3/19/2004
** 

 

Schedule A

 ****BANKFIRST		SERVICES AND FEES**Standard		Service Items**Fee
Set Up fee
[ * * * 
Monthly Maintenance Fee*** * * 
File Processing Fee*** * * 
Monthly Transaction Fee

         		[*** * ***]*** * * 
Return ACH Transaction Fee*** * * 
Return File from Federal		Reserve Fee*** * * 
Request to Reverse or Reject		File*** * * 
Exception File Runs*** * * 
Investigation/Research		Services*** * * 
Professional Services*** * * ]
 

 

Client - BANKFIRST                                                                                           23

3/19/2004

 
** 

Schedule B

ACH File Requirementsand File Processing Schedule

 **
Bank Transmission Location

 

All file of Entries generated byClient must be transmitted to Bank.

 

Security Procedures

 

Bank requires the file of Entriesbeing transmitted to comply with the industry standard security standards whichat a minimum will be 128-bit, triple DES (Data Encryption Standard).

 

File Process Timing

 

(a) The Client will provide thefile(s) of Entries to the Bank at least one day prior to the settlement date..

 

(b) The Bank operates under a"continuous balancing" mode which means they can accept a file of Entries fromClient ongoing.

 

(c) The Bank willtransmit all approved files of Entries to the Federal Reserve for immediatesettlement at 11 AM. CST. Immediate settlement occurs at 5 p.m. CST. Debit filestransmitted after 11 AM CST will be automatically settled the following day.

 

 

Client - BANKFIRST                                                                                            24

3/19/2004**************************