Exhibit 10.14

 

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.

 

 

MARKETER AGREEMENT

 

 

This MarketerAgreement (the "Agreement") dated as of September 2, 2004 (the "Effective Date")is between **NBO Systems, Inc.**whose address is 3676 W. California Ave.Bldg. D, Salt Lake City, UT 84104 ("Client") and **First Federal Savings Bankof the Midwest, dba Meta Payment Systems,**whose address is 2500 S. MinnesotaAve, Sioux Falls, South Dakota 57105 ("Bank"). Each may be referred to here inas a "Party" or collectively as "Parties".

 

RECITALS

 

(a) Bank is a member of VISA /MasterCard and is in the business of issuing Cards and establishing SettlementAccounts for the settlement of Card transactions.

 

(b) Client intends to offer Cards,issued by Bank, to consumers as an alternative to credit cards, cash or checks.

 

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) "Billable Card"means a Card which a network transaction or a Cardholder load results in a debitor credit to the Cardholder Funds in the last thirty (30) days or the Cardcarries a positive balance.

 

(b) "Card" means apre-paid magnetic stripe-based stored value card issued by Bank to a Cardholderpursuant to this Agreement, used for the purchase of goods, services and cashadvances by accessing the available balance in the Cardholder Funds through aSystem. Card may include stored value cards of any type acceptable by a System.

 

(c) "Cardholder" means (i) a personwho is issued a Card, and (ii) uses the Card to originate a transaction.

 

(d) "CardholderFunds" means the pooled stored value account which is associated with one ormore Cards, and includes the record of debits and credits with respect totransactions originated by each Cardholder.

 

(e) "Cardholder Agreement" means theagreement between Bank and a

 

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Cardholder governing the terms anduse of a Card.

 

(f) "GovernmentalRequirements" means collectively all statutes, codes, ordinances, laws,regulations that may apply to Cards (including Regulation E, Z, and anti-moneylaundering laws), rules, orders and decrees of all governmental authorities(including without limitation federal, state and local governments, governmentalagencies and quasi-governmental agencies).

 

(g) "Graphic Standards" means allstandards, policies, and other requirements adopted by a System from time totime with respect to use of its Marks.

 

(h) "Interchange or Interchange Fee"means the fee paid to the issuer of a Card by an acquiring financial institutionfor a transaction, as established by a System.

 

(i) "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.

 

(j) "Membership" means the membershipin a System and licensing rights thereto obtained by Bank.

 

(k) "ProcessingServices" means those services, which are necessary to issue a Card and processa transaction in accordance with Government Requirements and the Rules of anySystem and Regulatory Authority. Such services shall include but not be limitedto: set-up and maintenance of the Card and Cardholder Funds, transactionauthorization, processing, clearing and Settlement, System access, Cardholderdispute resolution, System compliance, regulatory compliance, security and fraudcontrol, and activity reporting.

 

(1) "Program" meansany Card based system designed for Client hereunder to provide an electronicmeans of providing Client's customers with access to stored value financialtransactions utilizing a Settlement Account and a specific list of Cardholderspursuant to this Agreement.

 

(m) "ProgramRevenues" means Interchange share, Transaction fee and commission on deposit asdefined in Schedule A generated by or accruing under a Program pursuant to thisAgreement.

 

(n) "Regulation E"means (i) the regulations, all amendments thereto and official interpretationsthereof (12 C.F.R. Part 205) issued by the Board of Governors of the FederalReserve System implementing Title IX (Electronic Funds Transfer Act) of theConsumer Credit Protection Act as amended (15 U.S.C. 1693 et. seq.), and (ii)the Electronic Funds Transfer Act and any amendments thereto.

 

(o) "Regulation Z" means theregulations, all amendments thereto and official interpretations thereof (12C.F.R., Part 226) issued by the Board of Governors of the

 

 

 

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Federal Reserve System.

 

(p) "RegulatoryAuthority" means, as the context requires, the State of South Dakota; theFederal Deposit Insurance Corporation; the Office of Thrift Supervision; and anyFederal or state agency having jurisdiction over Bank or Client.

 

(q) "Rules" means theby-laws and operating rules of any System, the published policies and proceduresof Bank, as promulgated by Bank's Board of Directors in good faith to ensure thecontinued safety and soundness of Bank.

 

(r) "Settlement" means the movementand reconciliation of funds between Bank and System members in accordance withthe Rules.

 

(s) "Settlement Account" means theaccount maintained by Bank used for Settlement of all transactions initiated byuse of a Card(s) by or on behalf of a Cardholder.

 

(t) "System" means MasterCard, VISA,Cirrus, Plus, and/or any other card network system of transmitting items andSettlement thereof.

 

(u) "Transaction"means a purchase and sale transaction initiated using a Card, or any creditthereon, between a merchant accepting a Card and a Cardholder, evidenced by anitem, which is presented for payment to Bank through the Systems, in accordancewith the Operating Rules.

 

ARTICLE II - GENERALDESCRIPTION OF PROGRAMS

 

SECTION 2.1 Purpose

 

The purpose of thisProgram is to offer Cards, issued by Bank, as an alternative to traditionalcredit cards, cash and checks. It is designed to offer consumers a convenientand secure payment mechanism. The Cards may be used to pay for purchases, cashadvances and other expenses that are allowed by law.

 

ARTICLE III - DUTIESOF CLIENT 

 

SECTION 3.1 Marketing

 

Client shall, fromtime to time, promote and market Cards to prospective customers. Except as maybe agreed by the Parties from time to time during the term of this Agreement,each Party shall be responsible for its own costs and expenses associated withmarketing of any Card under this Agreement. Client has no authority to use anyMarks unless Bank is appropriately identified. Bank shall have the right toapprove or disapprove any marketing materials bearing Bank's name or any Markprior to distribution of such materials. Bank shall not delay or withhold itsapproval unreasonably.

 

 

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SECTION 3.2 Implementation

 

This Agreement setsforth the general terms and conditions applicable to all the Programs. Clientwill receive written approval from Bank prior to issuing Cards under variousPrograms. Bank reserves the right to refuse service to any consumer that, in itsopinion, presents excessive financial or reputation risk.

 

SECTION 3.3 Printing of Cards andCardholder Agreements

 

All Cards andCardholder Agreements shall identify Bank as the issuer and include such othernames and Marks as may be required to conform to Graphic Standards, RegulatoryAuthority, System, and Rules. The design for the co-branded Card and CardholderAgreement shall be at Client's expense (including the expense of undertakingtrademark search and acquiring any intellectual property rights in such design).Such design will be subject to Bank's prior written approval, which approvalshall not be unreasonably withheld or delayed, and must comply with allapplicable laws, regulations, and Rules.

 

Cards will bedistributed in custom packaging with several inserts including a CardholderAgreement describing the Program and Card use. Cards can be activated by Clientby calling an Interactive Voice Response Unit or accessing an approved Internetapplication. The Cardholder Agreements shall be prepared by Bank and may beamended by Bank, from time to time, upon notice to Client. Client shall beresponsible for printing and distributing the Cardholder Agreement and anyamendments thereto to Cardholders.

 

SECTION 3.4 Access to ProgramDocuments and Information

 

Bank shall have access to allinformation and documents it reasonably requests concerning the Client'sprospects in order to issue prepaid Cards.

 

SECTION 3.5 Reserve Account

 

Client shallestablish and maintain for purposes of this Agreement a non-interest bearingdemand deposit account (the "Reserve Account") in Client's name. The ReserveAccount will be Client owned and Bank controlled. Client shall not have accessto the funds. Client shall maintain a minimum balance of [*** * ***]dollars. If Client does not maintain the minimum balance in the Reserve Account,Bank in its sole discretion may terminate this Agreement pursuant to Article IX.Bank shall refund to Client the remaining balance in the Reserve Account uponClient maintain [*** * ***.]

 

SECTION 3.6 Funding Process for Cards

 

 

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Client shall send toBank each business banking day by 2:00 PM CST an ACH file of the previous day(or days following a weekend or holiday) Card load activity. The daily ACH filesent to Bank shall match the processor's Card load activity report.

 

ARTICLE IV -REPRESENTATIONS AND WARRANTIES OF CLIENT 

 

SECTION 4.1 Representations andWarranties 

 

Client represents and warrants toBank as follows:

 

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

 

(b) Client is acorporation duly incorporated, validly existing and in good standing under thelaws of the State of Maryland and is authorized to do business in each state inwhich the nature of Client's activities makes such authorization necessary.

 

(c) Client has thefull power and authority to execute and deliver this Agreement and to performall its obligations under this Agreement. The provisions of this Agreement andthe performance 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) Criminalconviction (except minor traffic offenses and other petty offenses);

 

(ii) Federal. orstate tax lien;

 

(iii) Administrativeor enforcement proceedings commenced by the Securities and Exchange Commission,any state securities regulatory authority, Federal Trade commission, federal orstate bank regulator, or any other state or federal regulatory agency or

 

(iv) Restrainingorder, decree, injunction, or judgment in any proceeding or lawsuit, allegingfraud or deceptive practice on the part of Client or any principal thereof.

 

For purpose of 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 orthreatened against Client, any litigation or proceeding, judicial, tax oradministrative, the outcome of which might materially

 

 

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adversely affect the continuingoperations of Client. Attached to this Agreement is a list and brief descriptionof all pending lawsuits in which Client is a party in Schedule B.

 

(f) Client hasdelivered to Bank complete and correct copies of its balance sheets and relatedstatements of income and cash flow. Client's financial statements, subject toany limitation stated therein, which have been or which hereafter will befurnished to Bank to induce it to enter into this Agreement do or will fairlyrepresent the financial condition of the Client, and all other information,reports and other papers furnished Bank will be, at the time the same arefurnished, accurate and complete in all material respects and complete insofaras completeness may be necessary to give Bank a true and accurate knowledge ofthe subject matter. The financial statements are in accordance with the booksand records of Client were prepared in accordance with generally acceptedaccounting principles ("GAAP") as in effect in the United States, asconsistently applied, and in accordance with all pronouncements of the FinancialAccounting Standards Board. The Bank will make available a standard financialpackage that it provides its key vendors in accordance with its other practices.

 

(g) Client agreesthat at Bank's sole discretion, Bank, its authorized representatives, or agentsand any government entity with regulatory or supervisory authority over Bank(collectively the "Auditing Party"), shall have the right to inspect, audit, andexamine all of Client's facilities, records and personnel relating to theProgram at any time during normal business hours upon reasonable notice. TheAuditing Party shall have the right to make abstracts from Client's books,accounts, data, reports, papers, and computer records directly pertaining to thesubject matter of the Marketer Agreement, and Client shall make all suchfacilities, records, personnel, books, accounts, data, reports, papers, andcomputer records available to the Auditing Party for the purpose of conductingsuch inspections and audits. Such review will be conducted at Bank's expense,unless the review is caused by Client's action, inactions, or omission in whichcase the review will be completed at Client's sole expense.

 

ARTICLE V - COVENANTSOF CLIENT

 

SECTION 5.1 Covenants

 

Client covenants and agrees with Bankas follows:

 

(a) It will complywith all applicable laws, Government Requirements, the Rules and any rules,orders and regulations issued by the Regulatory Authorities that relate to thematters and transactions contemplated by this Agreement.

 

(b) It will promptlygive written notice to Bank of any material adverse change in the business,properties, assets, operations or condition, financial or otherwise, of Clientand any pending, or a threat of; litigation involving a sum of $50,000 or moreand of all tax deficiencies and other proceedings before governmental bodies orofficials affecting Client.

 

 

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(c) As soon aspossible, and in any event within 90 days after the end of Client's fiscal year,commencing January 1, 2004, it will provide Bank with its audited balance sheetsand related statements of income and cash flow and all notes and schedulesthereto as of the end of such period.

 

(d) All writtenconsumer complaints received by Client, relating to the Card or its use, will beimmediately reported to Bank. Such report shall include the name and address ofthe complaining Cardholder, if provided by complainant, a brief summary of theCardholder's complaint, and when resolved a brief summary of how the complaintwas resolved.

 

(e) Client will not,without Bank's prior consent, solicit consumers through the use of any party whois not directly employed by, under the immediate supervision of, or undercontractual agreement with Client and its affiliates.

 

ARTICLE VI - DUTIES OFBANK 

 

SECTION 6.1 Marketer Certificationand Administrative Fees

 

Bank shall be responsible for anyannual membership fees relating to Bank Membership with any System.

 

SECTION 6.2 Memberships in System

 

Bank shall obtain andmaintain at its sole expense a principal license with each applicable System,and shall timely pay all fees, dues, and assessments associated therewith. Bankshall retain its Membership in System in good standing and shall abide in allmaterial respects by all the rules and regulations applicable to Bank. If Bankelects to terminate its membership in any System, or if a System elects toterminate Bank's Membership for any reason, Bank shall give notice to Client assoon after it provides notice to or receives notice from the System according tothe Rules. In such an event, Bank shall immediately reimburse Client on apro-rata basis the expenses previously paid by Client for System relatedregistration or renewal fees.

 

SECTION 6.3 Issuer of Cards

 

Bank shall be theissuer of Cards and responsible for holding and retaining the Cardholder Fundsuntil such funds are used by Cardholders, or are payable to Client in accordancewith the terms of this Agreement. As issuer of the Cards, Bank is ultimatelyresponsible for the Cardholder Agreement. Bank and Client are mutuallyresponsible for preparing and updating the Cardholder Agreement.

 

SECTION 6.4 Notices

 

 

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Each Party shall deliver to theother Party a copy of all material notices or correspondence that it receivesfrom any System, or any other third party, relating to this Agreement, withinfive (5) business days of receipt of such notice or correspondence.

 

SECTION 6.5 Processing Services

 

Bank may use the services of anindependent processing operation (IPO) to switch or process Card transactions.

 

ARTICLE VII -COMPENSATION AND EXPENSES 

 

SECTION 7.1 Expenses of Bank

 

Bank shall be solely responsible forthe following expenses:

 

(a) Except asotherwise provided in this Agreement, all annual Membership fees related toBank's license with and Membership in any System utilized by a Program, and anyfees and penalties assessed by any such System or Regulatory Authority due toBank's actions or of any third party retained by Bank.

 

(b) Bank shall pay *** * ***toward the initial ISO or MSP Registration fee and [*** * ***] annualrenewal fee.

 

Payments to Client will be made onthe 20th day of each month for the prior month's Program Revenues andwill be net of any expenses due from Client.

 

SECTION 7.2 Compensation Payable toBank

 

Client shall pay Bank the fees forproducts and services set forth in the attached Schedule A, netted againstcompensation payable to Client.

 

SECTION 7.3 Compensation Payable toClient

 

(a) Bank, shall pay Client the feesfor products and services set forth in the attached Schedule A, including butnot limited to Interchange, Commissions on Deposits.

 

(b) Bank shalldistribute to Client the IVR/Operator costs charged to the Cardholder, monthlymaintenance fees charged to the Cardholder, and expiration fees (breakage)charged to the Cardholder upon expiration of the Card in accordance with theCardholder Agreement based on reports from the processor. Client shall providefor the reports being sent from the processor to Bank.

 

SECTION 7.4 Expenses of Client

 

 

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Client shall pay Bankthe fees for products and services set forth in the attached Schedule A. [**** ***]

 

Client shall be solely responsiblefor the following:

 

(a) Advertising andother expenses associated with the marketing of prepaid cards 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 (other than Bank) or System due to Client's actions,inactions, or omissions.

 

(c) All expenses associated with andlosses from over limit processing, cardholder or value load fraud and underfloor limit processing.

 

(d) The IndependentSales Organization ("ISO") registration fee (MasterCard and/or VISA, asapplicable) with respect to the Program(s) hereunder due on January 1 of everyyear hereafter, beginning January 1, 2006.

 

(e) System transaction fees relatedto the Programs.

 

(f) All expensesassociated with establishing and maintaining any accounts with, or receivingservices from, any financial institution providing Settlement and all expensesin providing Bank with Account Balances.

 

(g) All expense associated withcompleting a due diligence review for any third party relationship contemplatedin this Agreement as mutually agreed upon by the Parties.

 

SECTION 7.5 Adverse Impact of SystemFee Change

 

The Parties agreethat if System materially changes, as reasonably defined collectively by Bankand Client, the System fees the Parties mutually agree to may be re-negotiatedin good faith on revised pricing. If the Parties cannot agree on revised pricingwithin 30 days of notice of a collectively agreed upon material change toSystem, either Party may terminate the Agreement. Cards already issued aresubject to the existing terms and conditions at the time of issuance.

 

ARTICLE VIII -LIMITATION OF LIABILITY

 

SECTION 8.1 No Special Damages

 

Neither Party shall be liable to theother for any special, indirect, incidental,

 

 

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consequential, punitive or exemplarydamages, including, but not limited to, lost profits, even if such Party hasknowledge of the possibility of such damages provided, however, that thelimitations set forth in this Section shall not apply to or in any way limit thethird party 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) by or on behalf of any Cardholder as a result of Client's failure to complywith the Rules, System or applicable Regulatory Authority.

 

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") unless terminated earlier as provided below. After theInitial Term, the Agreement shall automatically extend for additional periods ofone year each (a "Renewal Term") based upon written approval of both Parties.

 

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 each Party may terminate this Agreement without such a cure periodif a

 

 

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substantially similar materialfailure has previously occurred;

 

(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 11 of the United States Code or any otherFederal, state or foreign bankruptcy, insolvency, receivership or similar law,(B) the appointment of a receiver, trustee, custodian, sequestrator or similaroffice for 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 or change in interpretation or enforcement of any law orregulation which would have a material adverse effect upon such Party's abilityto perform its obligations or such Party's costs/revenues with respect to theProgram.

 

(vi) Violation by either Party of anyfederal or applicable state law relating to the performance of this Agreement.

 

(vii) Upon direction from anyRegulatory Authority or System to cease or materially limit performance of theobligations under this Agreement.

 

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

 

In the event of atermination hereunder, this Agreement shall continue in full force and Bankshall continue to provide the services currently then being provided until suchtime as all Cards are so canceled in accordance with the Cardholder Agreement,but in no event exceeding one hundred and eighty (180) days from notice ofcancellation. If such termination is made by Bank pursuant to Section 9.2, Bankwill be entitled to withhold and

 

 

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pay directly allProgram expenses from Program Revenues including the costs of servicing theexisting Cardholders by a servicing organization reasonably selected by Bank. Insuch event, Bank shall have no further obligation to accept any Cardholder Fundsfrom Client. During any termination, the Parties will cooperate to ensure asmooth and orderly wind-down of the Program. In no event will any Party make anypublic statement or customer communication regarding the wind-down without theexpress prior written approval of Bank, which approval shall not be unreasonablywithheld or delayed.

 

ARTICLE X -CONFIDENTIALITY

 

SECTION 10.1 Confidential Information

 

The term"Confidential Information" shall mean this Agreement and all proprietaryinformation, data, trade secrets, business information and other information ofany kind whatsoever which (a) a Party ("Discloser") discloses, in writing,orally or visually, to the other Party ("Recipient") or to which Recipientobtains access in connection with the negotiation and performance of thisAgreement, 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 party that receives Customer Information the other(the "Recipient") shall not disclose or use such Customer Information other thanto carry out the purposes for which the party that has provided the CustomerInformation (the "Discloser") or one of its affiliates disclosed such CustomerInformation to Recipient. Recipient shall not disclose any Customer Informationother than on a "need to know" basis and then only to: (a) affiliates ofDiscloser; (b) its employees or officers; (c) affiliates of Recipient providedthat such affiliates shall be restricted in use and redisclosure of the CustomerInformation to the same extent as Recipient; (d) to carefully selectedsubcontractors provided that such subcontractors shall 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. For the purposes of this Section, Cardholdersshall be considered customers of Bank.

 

 

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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 withrequests or demands for Confidential Information from bank examiners or forcompliance purposes.

 

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 or destroy all Confidential Information, includingCustomer Information, in the possession of such Party or in the possession ofany third Party over which such Party has or may exercise control. If destroyed,such destruction of Confidential Information shall be designated by acertificate executed by an officer of the Party which was responsible for suchdestruction.

 

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.

 

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 Bank or Client, any Bank or Client affiliate or supplier, including,without limitation,

 

 

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promotional ormarketing material, but not including any disclosure required by legal,accounting or regulatory requirements beyond the reasonable control of thereleasing Party, shall be coordinated with and approved by the other Party inwriting prior to the release thereof.

 

ARTICLE XI - INSURANCE

 

SECTION 11.1 Insurance

 

Client shallmaintain, throughout the term of this Agreement, appropriate comprehensivegeneral liability (which shall include contractual liability), errors andomissions, and employee theft and dishonesty insurance policies, the limit ofwhich shall be no less than a combined single limit of $1,000,000 per occurrencefor 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 representatives, or (iii) the failure of Client or itsrepresentatives to comply with, or to

 

 

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perform its obligations under, thisAgreement.

 

(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 representsand warrants to the other that it is familiar with the requirements of allapplicable consumer protection laws applicable to it which relate to the Programand its obligations hereunder, and agrees that it will comply, in all material

 

 

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respects, with all such laws andregulations and all other applicable laws and regulations relating to itsactivities 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 orSystem with audit and examination authority over Bank, to the fullest extent ofsuch Regulatory Authority or System. Client shall also provide to Bank anyinformation, which may be required by any Regulatory Authority or System inconnection with their audit or review of Bank or the Program and shallreasonably cooperate with such Regulatory Authority or System in connection withany audit or review of Bank. Client shall furnish Bank, at Client expense, withaudited financial statements prepared by a certified public accountant. Clientshall also provide such other information as Bank, Regulatory Authorities, orthe System may from time to time reasonably request with respect to thefinancial condition of Client and such other information as Bank may from timeto time reasonably request with respect to third parties contracted with Client.

 

SECTION 12.6 Governing Law

 

The Partiesacknowledge that Bank, as a federally charted savings bank, is regulated by theOffice of Thrift Supervision, and is therefore subject to federal law, andentitled to preemption from state laws to the fullest extent permitted by law.In any matters not so preempted (if any) this Agreement shall be governed by theinternal laws, and not by the laws regarding conflicts of laws, of the State ofSouth Dakota. Each Party hereby submits to the jurisdiction of the courts ofsuch state, and (subject to the Bank's reservation of preemption rights above)waives any objection to venue with respect 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, System, orother public 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.

 

 

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SECTION 12.8 Survival

 

All representations and warrantiesherein shall survive any termination or 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: First Federal Savings	Bank of the Midwest 

dba Meta Payment Systems 

2500 S. Minnesota Ave.

Sioux Falls, SD 57105

Attention: General Counsel

Facsimile Number: (605) 977-7501

Client to: NBO Systems, Inc.

> 
3676 W. California Ave., Bldg. D

Salt Lake City, UT 84104

Attention: Christopher Foley, CFO

Facsimile Number: (801) 973-4951

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

 

 

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performed or complied with. Thewaiver by either Party of a breach of any term or provision of this Agreementshall not be construed as a waiver of any subsequent breach.

 

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

 

 

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a right to appeal maybe lawfully waived. Each Party retains the right to seek judicial assistance: (i)to compel arbitration, (ii) to obtain interim measures of protection prior to orpending arbitration, (iii) to seek injunctive relief in the courts of anyjurisdiction as may be necessary and appropriate to protect the unauthorizeddisclosure of its proprietary or confidential information, and (iv) to enforceany decision of the arbitrator, including the final award. In no event shalleither Party be entitled to punitive, exemplary or 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.

 

SECTION 12.17 Non-Solicitation ofEmployees

 

The Parties agreethat during the term of this Agreement each Party will not seek out or induceany person (by offering employment or otherwise) who is an employee of the otherParty to terminate their employment.

 

SECTION 12.18 Headings

 

The table ofcontents, various captions and section headings in this Agreement are includedfor convenience only and shall not affect the meaning or interpretation of anyprovision of this Agreement. References in this Agreement to any Section are tosuch Section of this Agreement. To the extent possible, each provision of thisAgreement shall be interpreted in such a manner as to be effective and validunder applicable law, but if any provision of this Agreement shall be held to beinvalid, illegal, or unenforceable, such

 

 

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provision shall beineffective only to the extent of such invalidity, illegality, orunenforceability, without rendering invalid, illegal, or unenforceable theremainder of such provision or the remaining provisions of this Agreement.

 

Signature page tofollow

 

 

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IN WITNESS WHEREOF, thisAgreement is executed by the Parties' authorized officers or representatives andshall be effective as of the date first above written.

 

| **Client: NBO		Systems, Inc.  **
**First		Federal Savings Bank of the Midwest**
**  **
**dba Meta		Payment Systems**
By: /s/		Christopher Foley   
 By: /s/		Brad Hanson
Name:		Christopher Foley   
 Name:		Brad C. Hanson 
Title: CFO  		
 Title:		Division President
 

 

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** 

 

Schedule A

PREPAID CARD PORTFOLIO

 **
Client will pay toBank a share of interchange based on the Monthly gross dollar volume (GDV) forsignature-based transactions and, alternatively, transaction fees for PIN-basedor ATM transactions. Client agrees to minimums sponsorship fees of [*** * ***]beginning in January 2005. Bank will pay to Client commission on average monthlyMetaBank deposits associated with this portfolio. (See tables below for ratesschedules).

 

[*** * ****** * **** * **** * **** * **** * **** * *
 

 
*** * **** * **** * **** * **** * **** * **** * *
 

 
*** * **** * **** * **** * **** * **** * **** * *]
 

 

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** 

 

ADDITIONAL FEES

[**** 

FEE DESCRIPTION**AMOUNT**MasterCard MSP/ISO		Registration (as required)1 **[* * **** * **** * **** * **** * **** * *  *** * * *** * **** * **** * **** * **** * **** * *  *** * **** * *  *** * **** * **** * * *** * *   *** * **** * **** * * *** * *   *** * **** * **** * * *** * * *** * * *** * * *** * * *** * * *** * * *** * * *** * ***]** 

RISK AND INDEMNIFICATION

 **
Bank is indemnified by Client fromlosses associated with under the floor limit transactions, fraud loss, negativebalances or other losses in violation of the Cardholder Agreement or anyrelevant laws, ordinances or statutes.

 

 

________________________________

1 Bank will pay [*** * ***]towards the Initial ISO or MSP Registration Fees and one half of the first yearAnnual Renewal Fees.

 

 

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** 

 

ACH SERVICES

 **
Bank offers ACH origination serviceswith the following pricing schedule:

 
**Standard		Service Items**Fee**[* * **** * **** * **** * **** * **** * **** * * *** * **** * **** * **** * **** * **** * **** * **** * **** * **** * **** * **** * **** * **** * **** * **** * *]
 

 

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** 

 

Schedule B

 **
Pending lawsuits of Client:

 

On February 13, 2004,Thomas Ripperda, et al, filed an action in Illinois State Court in St. ClairCounty, Illinois, against the Company in connection with gift cards sold at theSt. Clair Square Mall in St. Clair County, Illinois. The plaintiff's complaintseeks to establish a class action. However, as of this date, the plaintiff hasnot moved to certify a class. The complaint alleged that the term "valid thru"appearing on the face of the gift card next to the expiration date of the giftcard is misleading. The plaintiff seeks a return of all administrative feescharged against his gift card prior to the "valid thru" date. If a class werecertified, then the plaintiff would seek to recover similar fees with respect toall gift cards that the Company sold.

 

Under the terms andconditions of the gift cards and the gift card program, the Company disclosed itmay charge an administrative fee against a gift card if the gift card is notused within 90 days from the date of purchase. The "valid thru" date istypically between 12 months and 18 months after the date the gift card ispurchased. In some cases, the administrative fee reduces the amount of the giftcard prior to the "valid thru" date on the card. The Company disclosed thecharge of an administrative fee on the back side of the gift card and again inthe written terms and conditions that are distributed to customers when theypurchase the gift cards. The Company also disclosed that a gift card may berenewed after the "valid thru" date with the payment of a renewal fee.

 

The Company removedthe lawsuit to federal court in the Southern District of Illinois and also movedto dismiss the lawsuit. The plaintiff has filed an opposition to the Company'smotion. The District Court has not yet ruled on the Company's motion. If theDistrict Court does not grant the Company's motion, the Company expects theplaintiff to move for a remand of the case to the Illinois State Court and thenmove to certify a class as plaintiffs consisting of those gift card purchasersor holders with respect to whom the Company charged an administrative fee priorto the "valid thru" date.

 

Not withstanding theforegoing, the Company is not a party to any other material threatened orpending legal proceedings, which if adversely determined, would have an adversematerial effect on the financial condition or results of operations of theCompany. From time to time, however, the Company may become subject to legalproceedings, claims, and litigation arising in the ordinary course of business,including, but not limited to, employee, customer and vendor disputes.

 

 

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